Environment Policy Review
May Edition 2008
Study Suggests Demand for Electric Services Will Top $1 Trillion by 2030; New Power Plants Needed
With power demands expected to increase by 30% between now and 2030, the energy industry claims that significant investment in new generation plants is required in order to keep up with that demand. The Brattle Group for Edison Electric Institute (EEI) released a report earlier this month counters environmental groups arguments that increased energy efficiency measures will mean fewer generation plants and transmission lines are needed.
The report suggests that construction of new and replacement generating plants could cost nearly $600 billion through 2030 and transmission and distribution together could demand nearly $900 billion through that same time period. The Group’s report notes that these estimates are based on current trends and do not account for any significant expansion of energy efficiency programs or new climate initiatives. If aggressive energy efficiency programs are implemented, electricity consumption could decline 7-11% below the 2007 Energy Information Administration baseline figure; however, this decline would not result in a tremendous reduction in the overall generation and transmission investments required by 2030.
The report also notes that costs will continue to increase for the energy industry as climate policies demand clean energy technologies that may not yet be available. The Group highlights carbon dioxide capture and storage systems for coal plants as an example- a technology that is not yet commercially available and alone adds an additional $200 million to generation investment needs.
“Transforming America’s Power Industry: The Investment Challenge, The Brattle Group’s Preliminary Findings”
“Energy Industry Says More Plant Construction Needed”
U.S. Department of Energy Announces Demonstration Grants to Reduce Peak Load Electricity Demand; Illinois Institute of Technology Selected
The U.S. Department of Energy (DOE) announced Monday, April 21 that the Illinois Institute of Technology (ITT) will receive one of nine demonstration grants aimed at improving the efficiency and reliability of the nation’s electricity grid. The $50 million the DOE has set aside represents a five-year investment and is still depends on Congressional approval before the Illinois project can expect to receive its $7 million share. Once that funding has been approved and released, ITT plans to collaborate with Exelon/ComEd, Galvin Electricity Initiative, S&C Electric and others to implement a project that it hopes will achieve “perfect power” at the main campus and prove replicable for municipalities.
“DOE Selects Projects for up to $50 Million of Federal Funding to Modernize the Nation’s Electricity Grid”
Environmental Groups Making Coal-Fired Power Plant Construction More Difficult
In the midst of reports like the one recently released by the Brattle Group calling for increased investment in new electricity generation plants, utilities are facing another battle against crusading environmental groups that are employing whatever tactics necessary to delay or halt new coal plant construction. Environmental groups, such as the Sierra Club, readily admit that with each new coal plant proposed in the U.S. there is a lawyer within their group assigned to stop that plant’s construction. Coal and other energy industry groups, however, are continuing to fight back.
The “anti-coal crusade” does not just stop at the construction of new plants. The group is also picking fights over any generator that uses coal, seeking the denial of permits and ultimately blocking coal utility expansion efforts. Utilities argue that the crusade’s targets are typically without merit, citing a case in Kansas last October of the Sunflower Electric Co. that was denied an air-quality permit for two 700-megawatt generators. The case is still tangled up in a fight between the courts and the Kansas legislature and Sunflower has been unable to proceed with its construction efforts.
Business and utility groups are picking their battles for now, only fighting back in cases that could prove “precedential.” The groups, however, are also continuing to discuss a more comprehensive approach to the environmentalists’ challenges. In the meantime, these groups are urging businesses seeking prospective coal plant construction or generation expansion to ensure that all plans budget for the additional time and legal expenses that are almost guaranteed to plague any proposal.
“Global warming has a new battleground: coal plants”
Proposal Seeks to Improve Ethanol Production Efficiency in Illinois
The Illinois House recently passed legislation that could award ethanol plants up to $4 million to install advanced technologies for water usage, carbon footprint reductions, and other blending improvements designed to optimize processes at the plant. HB 5978, sponsored by Republican Representative Don Moffitt and Democrat Senator John Sullivan is one of a number of proposals that have circulated this session aimed at increasing ethanol production and consumption in Illinois.
One of the major criticisms of ethanol production is that it is a water-intensive process that requires 2 to 3 gallons of water for every gallon of ethanol produced. Environmentalists have started targeting ethanol production plants for this reason, seeking to impose strict regulations on the industry that could ultimately translate into fewer plants being erected.
Environmental groups went after the “stick approach” to this issue this year as, proposing legislation that would have required all ethanol plant permit applications to provide documented water supply, treatment, and discharge plans for the plant’s operations before those permits construction permits would be granted. The proposed measure ultimately failed to clear a House legislative committee.
“Bill Aims to Make Ethanol More Green”
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The Illinois Environmental Regulatory Group was created for Illinois Chamber members who are interested in environmental regulations.
