GAO Reports Show Policy Makers Must Commit to RFS Goals

Two reports issued this week by the General Accounting Office (GAO) are being touted – unsurprisingly – by critics of the Renewable Fuel Standard (RFS) as proof of the biofuel-blending mandate’s failings. But, just as those who in the past have campaigned against the far-sighted energy policy, the detractors this week are putting a negative spin on what are essentially recommendations for improving the RFS. They are slanting the facts to justify their claims that the program must be ended.

The GAO reviewed the questions of whether the RFS program is going to meet its 2022 targets for reducing greenhouse gas emissions and for expanding production of U.S. renewable fuels in accordance with congressional statutes. Cited in particular by the watchdog agency was the shortfall in the production of advanced biofuels.

Advanced biofuels, which are defined as those that offer a reduction in greenhouse gas (GHG) emissions of 50 percent or more when compared to petroleum-based fuels, aren’t being produced at the levels called for by the RFS when it was strengthened and reauthorized by Congress in 2007. As an example, the GAO notes that in 2015, less than 5 percent of the 3 billion gallons of cellulosic ethanol called for by the RFS was produced. Cellulosic ethanol is a biofuel made from plant material such as corn stalks and leaves – even wood trimmings – that offers lifecycle GHG-emission reductions of at least 60 percent.

The report notes that EPA has reduced the RFS targets for advanced biofuels through waivers in each of the last four years, attributing the shortfall to high production costs. The GAO asserts that the investments in the research and development required to make advanced biofuels more cost-competitive with petroleum-based fuels “are unlikely in the current investment climate.”

But, a continued and more thorough reading of the reports shows that the GAO offers a number of proposals that the agency says can incrementally improve the investment climate for advanced biofuels.

Maintaining a consistent tax credit for biofuels, for example, rather than allowing it to periodically lapse and be reinstated – the second-generation biofuel producer tax credit has been allowed to expire about every two years – could reduce uncertainty and encourage investment in advanced biofuels.

Other suggestions cited in the GAO reports include making the producer credit more long-term, possibly up to 10 years; make the producer credit refundable to make sure biofuel producers receive the subsidy in early years when they are sustaining financial losses; and couple the producer tax credit with an investment tax credit to decrease capital costs and improve the financial incentives for building cellulosic biofuel plants.

In other words, an update to policies that give the advanced biofuels sector a chance to meet the economic, energy security and environmental goals Congress envisioned when it established the RFS, as well as help boost production within reach of the 2022 goal of 36 billion gallons.

Disheartening, however, was the announcement this week from House leadership that the $1-per-gallon blender tax credit for biodiesel, along with a variety of additional tax incentives promoting cellulosic ethanol production and alternative fuel infrastructure – all set to expire at the end of December – will not be renewed in the remaining “lame duck” days of this Congress. This is just the kind of policy inconsistency cited by GAO that is causing the shortfall in meeting the RFS goals.

It’s unfortunate that the GAO report tends to dissect the component parts of the RFS to focus on the shortfalls of advanced biofuels. A broader view of the program shows the RFS has boosted the production of biofuels, which, over time, are getting cleaner and cleaner. According to the DOE’s Argonne National Laboratory’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, average corn ethanol reduces GHG emissions by 34 percent.  Meanwhile, gasoline produced from oil extracted from increasingly difficult locations is getting dirtier and dirtier, according to research from Steffen Mueller of the University of Illinois at Chicago’s Energy Resources Center, and Stefan Unnasch, managing director of Life Cycle Associates.

Conventional and cellulosic ethanol, as well as biomass-based diesel and advanced biofuels are all positive economic engines, and they bring many security and environmental benefits. When it comes to the RFS, it’s time to make sure the message is clearly heard – renewable fuels are important today, and will be even more important tomorrow. As the GAO reports suggest, it’s time for policy makers to steady the course with the RFS and implement resounding policies that can make the standard work the way Congress intended more than a decade ago.

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On Thanksgiving, Generous Servings of Renewable Energy On Menus Everywhere

The value of renewable energy is being reaffirmed with a constant flow of new developments that underscore the energy security, economic benefits and environmental enhancements that the sector offers. The projects, policies and research that are coming to light on a weekly basis give notice that as this country looks to its future for solutions to its energy challenges, clean, renewable energy is an answer that holds a top priority.

These developments are not only benefiting the country as a whole. We are seeing the direct impacts to states and local communities from renewable energy investments as well. For example, the University of Minnesota recently found that planned additions of wind and solar projects in the state will result in more than $7 billion in direct investment, at least 5,000 jobs in rural Minnesota related to construction alone, and nearly 4,000 megawatts of newly installed energy capacity.

It’s not hard to extrapolate from the Minnesota job and economic numbers for renewable energy development to recognize the huge impact these clean energy projects are having on dozens of other states, and that when put together, the cumulative figures help us to grasp the broad range of the sector’s effect throughout the United States.

If you need a recent indication of how corporate America views the impact of renewable energy on the bottom line, look to Virginia. There, 18 big corporations – Microsoft, Walmart, Best Buy, Ikea, Staples and Mars Inc., among them – have written state legislators and the Virginia State Corporation Commission calling for “an explicit legal framework” to expand access to renewable energy from utilities and third-party sellers. A key to their demand, the companies say, is the reliability renewables bring in supplying the power needed to sustain and build their businesses.

Also on the corporate front, Microsoft announced its largest purchase of wind energy to date with the signing of two agreements representing 237 megawatts of wind energy for its data center in Wyoming, bringing the multinational technology company’s total investment in wind energy projects in the United States to more than 500 megawatts.

Looking to the skies, a single airline flight has had huge ramifications for the growth of renewable fuels. Alaska Airlines recently flew the first commercial flight – from Seattle to Washington, D.C. – powered in part by a new, 20-percent blend of biofuel made from the limbs and branches that remained after the harvesting of sustainably managed forests in Washington state, Oregon and Montana. To mark the significance of the event, Agriculture Secretary Tom Vilsack was among many officials and policy makers on hand at Reagan National Airport in Washington to greet the cross-country flight.

Elsewhere in the biofuels arena, NASCAR has kicked off the celebration of the expected attainment by the end of the 2016 season of 10 million competition miles powered by E15 – a biofuel blended with 15 percent American-made ethanol. Six years ago, NASCAR entered into a groundbreaking partnership with Sunoco and American Ethanol to launch its long-term biofuels program to reduce emissions across its three national race series.

Now into the laboratory, where scientists with the University of California, Berkeley, and the Lawrence Berkeley National Laboratory earlier this month publisher a paper showing solar cells made from perovskite, an inexpensive and increasingly popular material, can more efficiently turn sunlight into electricity using a new technique to sandwich two types of perovskite into a single photovoltaic cell. The researchers say that devices made from the material can be made more easily and cheaply than silicon. The first perovskite solar cells, all with a range of efficiency equivalent to those made from traditional, more expensive materials, could be available to the market as soon as next year.

This Thanksgiving, we urge all 25x’25 champions to give thanks and help spread the good news about renewable energy developments in their towns, cities, counties, states – even at the national level. We should all be especially grateful of the economic, environmental, national security and public health benefits that these burgeoning biofuel, bioenergy, solar, wind, geothermal and small scale hydro industries are providing to our communities. Raising awareness is a valuable tool for helping people understand that the 25x’25 national energy goal is readily achievable.

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Solutions from the Land: A New Way Forward

As the incoming administration contemplates the path forward for America’s energy, agriculture, conservation and climate polices, it will be important to carefully assess the role that farms, ranches and forests – our nation’s working lands – can play in meeting desired outcomes.

For too long we have been managing these lands and the services they provide in “silos,” often looking narrowly at either food, habitat, water quality or endangered species objectives and outcomes. A new way forward is needed – one by which land is managed in a more integrated way.

21st century problems require 21st century solutions, and it’s time to accept the fact that many of the policies and programs of the past cannot meet the needs of tomorrow. The new way forward begins with recognizing that to achieve the outcomes society wants and needs, there must be an economic return.

In recent years, the U.S. agriculture and forestry economies have struggled mightily. Today’s commodity prices are well below the cost of production. Furthermore, nonaligned, disjointed and often conflicting regulatory programs are crippling efforts to feed and fuel a growing population, while also trying to reverse historical losses in ecosystem integrity and seeking to meet the challenges of a changing climate.

As politically difficult as this latter point is, the climate is changing and impacts are being felt by those who make their living off the land. Regardless of the cause, it is producing volatile weather conditions – drought, flooding, wildfires and tornadoes – that are impacting agricultural and forestry production, elevating risk and causing huge economic losses.

The question is not: Should we do something? The question is: What do we need to do?

This week, the Obama administration released the Mid-Century Strategy for Deep Decarbonization, which sets out a long-term vision for achieving emission reductions of 80 percent or more by 2050 while meeting growing demands on our energy system and our lands.

It is understandable that a new administration will bring with it significant change. But we urge those about to take power not to wholly reject sensible programs and policies developed by their predecessors, such as the sound concept of using agricultural and forestry landscapes to sink carbon, as is discussed in the mid-century strategy. Terrestrial soil carbon sequestration improves soil health and, in turn, productivity and profitability for farmers and forestland owners.

As the mid-century strategy notes, U.S. lands have been sequestering much more carbon than they emit (a net “carbon sink”) for the last three decades. In 2014, the U.S. land carbon sink sequestered a net 762 million metric tons of CO2, offsetting 11 percent of economy-wide greenhouse gas emissions. The strategy also recognizes the critical role to be played by bioenergy, as energy demand is expected to grow in the decades to come. The sustainable management of our forests and other biomass resources can help supplement non-renewable fossil fuels in the transportation, building and industry sectors, while also supporting domestic industries and improving our national energy security.

How we manage our land resources, both in the near-term and over the next several decades, will determine whether U.S. lands can remain a robust carbon sink, while delivering food, feed, fiber, forest products and bioenergy.

There is a need for wider implementation of sequestration-supporting conservation practices that are already in use, and which are advocated for in the mid-century strategy. Those practices are paying off for thousands of farmers, and for our country as a whole, in the form of increased crop yields, better resilience to weather extremes, less soil erosion, improved nutrient management and enhanced cropping system diversity. But much more is needed to feed a growing global population and counter vulnerability in an unpredictable future.

We respectfully urge the Trump administration to exercise patience – go slow and take a fresh look at ways agricultural landscapes can be managed and repurposed to deliver production, environmental and economic returns to our country, and especially to farmers, ranchers and foresters, the guardians and stewards of America’s working lands.

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Commitment to Renewable Energy is a Commitment to Rural America

Donald Trump has been elected the 45th president of the United States and his campaign is to be commended for earning the support of rural America – a voting constituency that most analysts say assured his election. We hope that support will, in turn, prompt a commitment from the new administration to America’s farmers, ranchers, forestland owners and small communities that represent the driving force behind the 25x’25 Vision.

We are encouraged by the president-elect’s vigorous support for the federal Renewable Fuel Standard and for the biofuel industry in general. We would also urge the new administration to stay the course that has accelerated the wide development and deployment of other renewable energy technologies in rural America, such as biomass, wind, solar, hydropower and geothermal. This progress is keeping the nation on track to meet 25 percent of the its energy needs coming from renewable energy sources by 2025.

25x’25 has nearly 1,000 partners – agricultural and forestry trade groups and organizations, large and small businesses, academic and governmental interests – all with deep roots in rural America and all with the understanding of the wide economic benefits that clean, domestically produced renewable energy is contributing to communities that might not otherwise share in the prosperity that that has been experienced by many of the nation’s urban centers.

There is much indisputable evidence that supports the development of renewable energy and the implementation of energy efficiency measures – more jobs, fewer emissions, improved energy security, and many others. But the point that we hope is most resonant with the new administration is the difference that clean and conserved energy can make to the nation’s bottom line.

Low- and no-carbon renewable energy continues to grow at an incredibly rapid rate, in large part due to sharply dropping production costs. Federal tax credits and multiple state policies have helped push exponential growth in the wind energy and solar power sectors, and we urge all who take office next year – at both the state and federal levels – to maintain those policy mechanisms.

By extension, the push for renewable energy offers farmers, ranchers, forestland owners and rural communities huge income opportunities, a principle that 25x’25 has been preaching since its origins in 2004.

In a report that we detailed here last month, Bloomberg New Energy Finance (BNEF) says more than $100 billion has been invested by companies in low-income counties, where some 70 percent of the nation’s wind farms are located. BNEF analysts say that by 2030, rural landowners will receive up to $900 million a year from wind developers for land leases. American Wind Energy Association (AWEA) data show U.S. wind farms currently pay more than $220 million a year to farming families and other rural landowners, and more than $156 million of that is going to landowners in counties with below-average incomes.

The solar energy sector also makes massive financial contributions to rural landowners and the counties and states where solar farms are being located. Through June of this year, solar has reached 31.6 gigawatts (GW) of total installed capacity. Many of the new solar facilities are being built by an array of rural-based electric cooperatives around the country, pumping billions of dollars into the national, state and local economies.

Citing a recent study by the Innovation Center for U.S. Dairy, the American Biogas Council says the dairy sector alone could create $3 billion in products from biogas/anaerobic digestion systems. Biogas industry experts say building 11,000 new systems would result in at least $33 billion in capital expenditures for construction activity, generating approximately 275,000 short-term construction jobs and 18,000 permanent jobs to run the digesters.

The biofuels sector contributed nearly $44 billion to the nation’s gross domestic product in 2015, with close to $24 billion coming from agriculture. The Renewable Fuels Association says the economic activities of the ethanol industry put $9.1 billion in rural American pockets last year.

Also worth noting is a study released earlier this year by Environmental Entrepreneurs, a clean energy advocacy group of business executives, that shows nearly 414,000 people work in the sector, many in rural areas.

The economic benefits of renewable energy not only better the lives of farmers, ranchers and forestland owners, they also help boost local tax revenues that allow rural counties to renovate roads, build schools and update infrastructure, as well as pay down debt.

The 25x’25 Alliance has always recognized that renewable energy is one part of an “all-of-the-above” national energy strategy. Natural gas and other fossil fuels will remain the largest part of our energy resource base for decades to come. But we also urge the new administration to recognize the wide, positive impact renewable energy development has made on a constituency – rural America – that proved important in this week’s elections, and has played a major role in changing and expanding our clean energy resources.

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Renewables Share of Global Power Generation Nearing 25 Percent

News and data highlighting the inevitable growth of renewable energy in the U.S. and world energy markets continues to flow at an ever-increasing rate. In recent weeks, the International Energy Agency (IEA) said it was significantly increasing its five-year growth forecast for renewables thanks to strong policy support in key countries and sharp cost reductions.

According to IEA’s latest edition of its Medium-Term Renewable Market Report, over the next five years, renewables will remain the fastest-growing source of global electricity generation, with the expected share growing to 28 percent in 2021 compared to the 23 percent that was projected in 2015.

The intergovernmental agency now sees renewables growing 13 percent more between 2015 and 2021 than it did in last year’s forecast, due mostly to stronger policy backing in the United States, China, India and Mexico. Also, costs are expected to drop over that forecast period by a quarter in solar PV and 15 percent for onshore wind.

Meanwhile, in the United States, the latest quarterly market report from the American Wind Energy Association (AWEA) shows that sector has reached 75 gigawatts (GW) of installed capacity and has more than 20 GW of wind power capacity currently under construction or in advanced development (one GW equals 1,000 megawatts). U.S. wind capacity, which stood at 11.6 GW 10 years ago, has seen an annual growth rate of more than 25 percent.

The IEA says 2015 marked a turning point for renewables on the world stage. Wind, solar, biomass, geothermal and hydropower represented more than half of the new power capacity installed around the world, reaching a record 153 GW, which is 15 percent more than 2014. Most of the gains were driven by record-level wind additions of 66 GW and solar PV additions of 49 GW.

About half a million solar panels were installed every day around the world last year. In China, which accounted for about half the wind additions and 40 percent of all renewable capacity increases, two wind turbines were installed every hour in 2015. Renewables surpassed coal last year to become the largest source of installed power capacity around the world.

The IEA cites several factors driving the growth, including more competition, enhanced policy support in key markets and technology improvements. Given the dropping costs of renewable energy, the agency points out that climate change mitigation – while a powerful driver for renewables – is not the only cause for rapid growth of the industry.

As global electricity generation grows, renewables are expected to represent more than 60 percent of the increased supply over the five-year forecast period. Renewable energy is expected to exceed 7,600 terrawatt hours by 2021 – equivalent to the total electricity currently generated by the United States and the European Union together.

It should be noted that some renewable energy advocates insist that the IEA, even with the higher projection through 2021, still underestimates the growth forecasts, arguing that the exponential growth experienced over the past two years can be sustained as costs continue to drop. Nonetheless, all parties, including the IEA acknowledge that 2015 was an exceptional year.

However, the IEA also cautions that policy uncertainty persists in too many countries, slowing down the pace of investments. The agency points out that the rapid progress in variable renewable technology such as wind and solar PV is exacerbating system integration issues in a number of markets, as demonstrated, for example, by the ongoing net-metering debates taking place before state public utility commissions across the United States in recent years.

The IEA also says progress in renewable growth in the transportation sector remains slow, and needs significantly stronger policy efforts – a sentiment echoed in an International Renewable Energy Agency report released last week that suggested that advanced biofuels are the only practical alternative to fossil fuel for airplanes, ships and heavy freight trucks, but need policies and business models that can ensure production facilities continue to be built and their costs continue to decline.

Examples of the type of policy-supported growth discussed in the IEA’s report can be seen in updates like AWEA’s quarterly analysis announced last week in Iowa, which recognized the state for generating more than a third of its electric power from wind. The state is also the nation’s leading biofuel producer. Furthermore, Texas – an oil and natural gas producing giant – is on the verge of being the nation’s leader in solar market development.

These milestones are being reached because of strong, forward-thinking policy makers who recognize the economic, environmental and energy security benefits that come from renewables. The 25x’25 Alliance urges policy makers at the federal, state and local levels to follow the lead of these far-sighted groundbreakers and help bring renewable energy fully into the mainstream.

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Texas Ascension to Renewable Energy Leadership Makes Good Economic Sense

The trend in national media circles reporting on renewable energy advances in Texas often characterizes the progress and development as a somewhat curious happening, given the state’s leading status as an oil and natural gas producer. But leaders in Texas have for several years recognized that the broad growth of wind, solar and bioenergy just makes good economic sense.

Looking at the wind sector, there is more than 18,500 megawatts (MW) installed in Texas – ranking the state first in the country – and more than 5,000 MW is under construction. Wind accounts for more than 12 percent of the state’s energy production, the equivalent of powering 4.1 million homes. Much of the wind development can be attributed to a decision by the state legislature in 2005 to create Competitive Renewable Energy Zones (CREZ), which have promoted the construction of electrical transmission lines stretching from areas of high wind capacity to dense population centers.

Wind’s bottom line in Texas is impressive. The sector employs some 25,000 people in the state and there are currently 38 wind energy-related manufacturing facilities in Texas. Some $33 billion has been invested in wind in Texas and lease payments for wind facilities total more than $50 million each year, most of which is going into rural areas that need it most.

Solar is a more recent arrival to Texas, at least in terms of recent significant growth. But today, the state finds itself on track to become the fastest-growing utility-scale solar market in the United States within the next five years. As of June, the state had 566 MW of solar energy installed, enough to power 61,000 homes, and earning Texas a top-10 ranking nationwide for installed solar capacity. A recent market analysis from the Solar Energy Industries Association shows that by the end of the year, the state’s total solar capacity is expected to more than double. And over the next five years, Texas is expected to install more than 4,600 MW of solar electric capacity (including 4,000 MW utility-scale), second only to California during that time span.

Today, there are nearly 500 solar companies in Texas, employing more than 7,000 people, representing manufacturers, contractors, project developers, distributors and installers.

Bioenergy is relatively early in its development in Texas, but the state has authorized nearly four dozen projects over the past 10 years. While many are ethanol and biodiesel plants, others include biomass-fired electricity generators (a sector that can take advantage of the state’s more than 60 million acres of forestland, second in the nation only to Alaska). High-tonnage sorghum, energy canes, jatropha, castor, cottonseed and sunflower are being developed in Texas specifically for bioenergy purposes.

Given the focus on renewables, it is not surprising that Agriculture Secretary Tom Vilsack chose to come to Texas to announce the department is investing more than $300 million in Rural Energy for America Program (REAP) funds to help hundreds of small rural businesses, farmers and ranchers across the country improve their bottom lines by installing renewable energy systems and energy efficiency solutions. (USDA also announced this week it is providing $3.6 billion in loans to finance 82 electric infrastructure upgrades in 31 states that will build or improve 12,500 miles of transmission and distribution line. The total includes $216 million for smart grid technologies, $35 million for renewable energy and nearly $1.8 million for energy efficiency.)

USDA is investing a total of nearly $80 million for energy projects in Texas, including nine farms and rural businesses in the state that will receive more than $870,000 in REAP grants, and two businesses that will receive REAP loans of $5 million each. The biggest recipient in Texas announced by Vilsack is the Pedernales Electric Cooperative (PEC), which will receive the largest Energy Efficiency and Conservation Loan Program (EECLP) loan ever offered – $68 million – to fund energy improvements to assist a rural portion of the co-op’s service territory. PEC will offer members low-interest loans of up to $20,000 for solar photovoltaic and energy storage equipment, to be repaid through on-bill payments.

The recognition of Pedernales – the largest among the nation’s more than 900 electric co-operatives and host of the Vilsack announcement in Austin – is appropriate, given PEC’s commitment to renewable energy. In 2012 the co-op’s board formalized in a resolution that PEC will generate at least 30 percent of its electricity from renewable sources by 2020. And Pedernales CEO John Hewa is a member of the steering committee of 25x’25’s Energy for Economic Growth Initiative, which aims to spotlight and support rural electric cooperatives that are implementing distributed renewable energy generation and the business models that enable that generation.

Given the bigger picture, Texas is hardly an anomaly in its growingly diverse approach to energy generation. Like many other states, Texas has forward-thinking industry leaders who recognize the value of renewable energy and its inevitable rise in the U.S. energy market. 25x’25 commends those in Texas and across the country who are taking leadership in the move to a clean energy future.

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National Bioenergy Day Recognizes Sector's Economic, Environmental Benefits

More than 50 companies, institutions, agencies and organizations around the country today are celebrating the fourth annual National Bioenergy Day and highlighting the energy, environmental and economic benefits of bioenergy, biomass, and biobased products.

So, what exactly is bioenergy? Bioenergy is the use of any organic material, such as forest thinnings, agricultural residues and urban wood waste, to generate electricity, heating and cooling. Renewable biomass can also be converted to biofuel to power transportation. Energy from biomass represents close to half of all renewable energy production.

The benefits of bioenergy are enjoyed at the local, state and national levels. Many independent power producers generate electricity for the grid using bioenergy. Hospitals, college campuses, school districts and government buildings also use bioenergy for heat and electricity. Thousands of homes and businesses have installed stoves and other appliances fueled by wood pellets, reducing their heating costs. Working farms and other businesses with organic waste products recycle their “leftovers” to power or heat their facilities.

Sponsored by the Biomass Power Association, Biomass Magazine, the U.S. Industrial Pellet Association, the Biomass Thermal Energy Council, the Hearth, Patio and Barbecue Association, Pellet Fuels Institute, Drax and Enviva, the day’s events aim at educating more people – media, elected officials and communities – about the benefits of bioenergy as a critical renewable energy source, along with the many solutions it presents.

Events are being held in Arizona, California, Colorado, Connecticut, Florida, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington state, and Washington, D.C., as well as a number of locations in Canada.

As an example, one of the events that is being held this afternoon will be at the University of Tennessee Arboretum Auditorium. There, with the help of DOE’s Oak Ridge National Laboratory and the U.S. Forest Service, as well as contributions from several other sponsors, young aspiring scientists can spend a couple of hours investigating the world of bioenergy with hands-on experiments, handling switchgrass seeds and talking with experts who are building bioenergy resources to power the world.

Why the hoopla? Because bioenergy produces some 5.3 percent of this country’s total energy and is responsible for sustaining tens of thousands of jobs, many of which are in rural communities where they are most needed. On an international scale, countries like the United Kingdom, Belgium and Denmark meet ambitious national renewable energy standards, in large part, through densified wood pellets – produced here in the United States that originate from low value wood gleaned from forest-thinning operations in sustainably managed forests.

There is a more than ample supply of bioenergy feedstocks, as verified by the latest update of an ever-evolving DOE report on biomass. The Billion Ton Update reaffirms that by the year 2040 the United States has the potential to sustainably produce at least one billion tons of nonfood biomass resources that could be used for low- and no-carbon biofuel and biopower, as well as other bioproducts.

Research from scientists with the DOE’s Argonne National Laboratory, the University of Illinois and the International Food Policy Research Institute in Washington, D.C. – who collected and analyzed data from worldwide field observations of major land use change from cropland, grassland and forests to land producing biofuel feedstocks – demonstrates the huge carbon sequestration capabilities of energy grasses, tree systems and even corn. The maintenance of healthy North American forests, for example, puts forest trimmings to good use while also reducing carbon emissions that can emanate from dying trees or forest fires.

Critical to maintaining and accelerating the success of bioenergy are the policies that promote its development. For example, Congress is negotiating an energy bill that proposes biomass be deemed “carbon neutral,” recognizing that sustainably produced and managed biomass can offer valuable clean energy contributions and important carbon sequestration services to mitigate climate change. The designation would offer harmony to what are currently 13 different definitions of biomass in various laws and regulations, and allow for the full potential of bioenergy solutions.

The 25x’25 Alliance commends the sector for its contributions and encourages all to learn more about bioenergy. But efforts must extend beyond a single day. The work must be sustained to convince policy makers and regulators that bioenergy can help bring about an energy future that creates jobs, improves our air and water, and strengthens our energy security.

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Renewable Energy Generates Billions for Rural America

A report published last week by Bloomberg New Energy Finance (BNEF), an investment research arm of Bloomberg news service, highlights a principle that 25x’25 has been preaching since its origins in 2004: Renewable energy offers farmers, ranchers, forestland owners and rural communities huge income opportunities.

Focusing principally on wind energy, the BNEF analysis says more than $100 billion has been invested by companies in low-income counties, where some 70 percent of the nation’s wind farms are located. Alex Morgan, North American wind energy analyst at BNEF, says that by 2030, rural landowners will receive up to $900 million a year from wind developers for land leases.

The projections from BNEF build off of data released earlier this year by the American Wind Energy Association (AWEA). The data showed U.S. wind farms currently pay more than $220 million a year to farming families and other rural landowners, and more than $156 million of that is going to landowners in counties with below-average incomes. Those lease payments range from $3,000 to $6,000 per megawatt of installed capacity, along with payments for power line easements, road rights-of-way, or royalties based on the project’s annual revenues.

These payments not only better the lives of farmers, ranchers and forestland owners – in some cases, says AWEA, they allow producers to keep their family farms, giving owners the chance to pass their operations on to the next generation – they also help boost local tax revenues that allow rural counties to renovate roads, build schools and update infrastructure, as well as pay down debt. An Oklahoma State Chamber analysis released last year shows that owners of wind farms will pay some $1 billion in ad valorem taxes over the projects’ 40-year life span.

The solar energy sector also makes massive financial contributions to rural landowners and the counties and states where solar farms are being located. Through June of this year, solar has reached 31.6 gigawatts (GW) of total installed capacity. With more than 1.1 million residential solar installations nationwide and utility-scale solar facilities in the construction pipeline totaling more than 20 GW, the industry is on pace to nearly double in size over 2016.

These solar facilities, including a number being built by an array of electric cooperatives around the country, are pumping more than $15 billion a year into the U.S. economy. The North Carolina Sustainable Energy Association says that landowners in that state are leasing sites for solar farms for $300 to $700 an acre per year, three times the average rent for cropland and pastureland.

The biogas industry is a renewable energy sector that is only beginning to make an economic impact in rural America. The American Biogas Council (ABC) says that as more biogas systems are built, many sectors of our nation’s economy will be strengthened, including agriculture and renewable power. Later this month, ABC will recognize biogas projects and technology advancements from across the country for their innovation and potential for replication during their 16th annual conference.

Citing a recent study by the Innovation Center for U.S. Dairy, ABC says the dairy sector alone could create $3 billion in products from biogas/anaerobic digestion systems. Biogas industry experts say building 11,000 new systems would result in at least $33 billion in capital expenditures for construction activity, generating approximately 275,000 short-term construction jobs and 18,000 permanent jobs to run the digesters.

Meanwhile, as one of four pillars USDA has identified to boost the country’s rural economy, the department has invested heavily in growing the biobased economy. USDA has been working closely with farmers and ranchers to make investments that spur a new generation of renewable fuels and biobased products. A new USDA report released last week shows that in 2014, the biobased products industry contributed $393 billion and 4.2 million jobs to America’s recovering economy. The report also indicates that the sector grew from 2013 to 2014, creating or supporting an additional 220,000 jobs and $24 billion over that period.

It is worth noting the job creation that is generated by renewable energy development, especially in rural areas. A study released earlier this year by Environmental Entrepreneurs, a clean energy advocacy group of business executives, shows nearly 414,000 people work in the sector, many in rural areas.

As we often remind policy makers, the 25x’25 Vision – by 2025, America’s farms, ranches and forestlands will meet 25 percent of our nation’s energy needs through renewable resources – brings with it vast environmental and energy security benefits. The third takeaway from the vision is the enormous range of economic returns it offers, not only to consumers who pay less for cleaner, domestically produced power and fuels, but also to rural America where energy innovation is being nurtured.

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Growing Collaboration Easing Disputes over Net Metering

After years of conflict between utilities and the developers of distributed energy systems like wind and solar – with state regulators usually caught in the middle – there have been some encouraging developments of late to suggest there is a growing move toward collaboration that gives all sides, including consumers, what they want.

These disputes had centered on claims by utility companies that the growing number of customers with solar systems, which has greatly increased as installation costs have fallen to under $3 per kilowatt, are not paying their fair share of the fixed costs of infrastructure maintenance and other grid supports, increasing the financial burden on non-solar ratepayers. The utilities have been asking regulators to decrease net metering rates (the money paid to residences with solar systems for excess power generated and sent back to the grid, usually at retail rates) and impose high fixed fees to compensate for what the utilities say are lost maintenance costs.

Solar interests say residential installations actually provide a net benefit by reducing the need to construct or purchase more power sources, cutting electricity prices for all by reducing peak demand on the grid and avoided pollution costs. Solar advocates say utilities seeking to end or weaken net metering, or calling for high fixed fees for solar customers, are simply trying to discourage solar installations to maintain their share of the power market.

The ongoing debate could not be better demonstrated than the heated dispute witnessed in Nevada sparked by a vote by the state Public Utilities Commission (PUC) late last year to roll back net metering rates from 11 cents per kilowatt hour (kWh) down to 2.6 cents per kWh by 2020, not only for new solar customers but for existing residential solar systems as well, taking the unprecedented step of denying “grandfather” status to some 32,000 existing solar customers.

The regulatory and legal challenges that have taken place since have, for the most part, been ended by an agreement reached between the utility (NV Energy), SolarCity and PUC staff to allow rooftop solar customers to retain the original retail rate of 11 cents per kWh for net metering.

The settlement coincides with a recommendation from a task force convened by Nevada Gov. Brian Sandoval that state lawmakers adopt legislation reinstating retail rate net metering for solar customers until regulators can approve a comprehensive investigation into a possible Value of Solar tariff, a rate of compensation based on the real value provided by solar installations to the electric system. (Disputed allegations that the PUC acted last year in reaction to overly aggressive advocacy efforts by solar groups have since been eased with Sandoval’s replacement of two members of the PUC, and the exit of the head of a principal solar group, who was replaced by a former state regulator who has experience working for both utilities and clean energy groups.)

The compromise demonstrated by the solar-valuation regulatory decision reached in Nevada is one of several other that have helped to ease net metering disputes in states this year, including similar agreements reached in Arizona and Colorado. But it’s still a sensitive issue to the solar industry, depending on the value assigned to solar (as well as other distributed energy sources, such as small wind farms).

The 25x’25 Alliance believes that solar has proven to provide net benefits across the grid. The Solar Energy Industries Association (SEIA) reports that 16 states have conducted cost benefit analyses (multiple studies in some states), and none have shown solar to increase the financial burden on non-solar customers. In fact, as the Brookings Institution reported in May, net metering frequently benefits all ratepayers when all costs and benefits are accounted for, “which is a finding state public utility commissions, or PUCs, need to take seriously as the fight over net metering rages” (The North Carolina Clean Energy Technology Center says 41 states and the District of Columbia have mandatory net-metering laws).

After the many high-profile battles fought before state regulators in 2015, all players this year are beginning to understand the inevitability of the significant role distributed energy sources will play going forward. Earlier this year, six New York State electric utilities and three of the nation’s leading solar development companies formed a “Solar Progress Partnership” that aims “to encourage more solar development across the state, while ensuring that adequate funding is available to maintain a reliable and resilient grid.” California is nearing approval of a pilot program that would allow regulators to devise a way to bring a rate of return on distributed resources similar to those earned from traditional infrastructure projects like power plants. If the CPUC can incent investor owned utilities to take some of the investment normally made for traditional power sources and place it into distributed sources, that would offer utility shareholders the opportunity to achieve returns of equal or greater value. Like the New York program, the California initiative will be watched by renewable and utility stakeholders around the country.

Tools are being made available to facilitate collaboration. The Smart Electric Power Alliance, for example, has issued briefing books for state regulators, utilities and solar developers under an initiative called The 51st State: Blueprints For Electricity Market Reform Building A Structure For Collaborative Stakeholder Discussions. The project recognizes the longstanding conflicts and provides utilities and distributed technology organizations with plans for working together on new energy market structures.

25x’25 commends the utilities, solar and wind interests, and regulators for taking on the tough job of getting together in a room and coalescing around fair and equitable paths forward. These are the steps that are carrying this country to a clean energy future.

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25x'25: High Octane, Low Carbon Fuels Can Help Meet CAFE, GHG Goals

The 25x’25 Alliance has joined a wide array of other clean air, public health, renewable energy and biofuel advocates in calling on federal and state regulators to put more focus on the composition of fuels to best deliver on the promises the agencies have placed in new engine technology they say will meet fuel efficiency and greenhouse gas (GHG) emissions standards into the next decade. By putting greater emphasis on what car and light truck engines can best burn, regulators will ensure consumers more efficient, more economic and more environmentally friendly transportation fuel.

The Alliance made its argument in comments submitted to EPA and the National Highway Transportation Safety Administration (NHTSA), as well as to the California Air Resources Board (CARB), in response to a draft Technical Assessment Report (TAR), a 1,200-plus page document issued earlier this year that is essentially a report card on the progress auto manufacturers are making in their pursuit of fuel economy standards that average 54.5 mph by 2025 for light duty cars and trucks.

Here’s how we got here: In October 2012, EPA adopted GHG emission standards through model years 2017-2025, with the 2022-2025 standards subject to the midterm evaluation process required by the agency’s regulations. Meanwhile, federal law allows the NHTSA to adopt Corporate Average Fuel Efficiency (CAFE) standards for only up to five model years at a time. So NHTSA is creating fuel efficiency standards now for model years 2022-2025. EPA and NHTSA will finalize their respective standards by April 1, 2018.

But as 25x’25 points out in its comments, a glaring omission from the Draft TAR is any effort to address and consider fuel quality and octane pathways for meeting the very aggressive GHG and fuel efficiency targets that have been established for model year 2022-2025 cars and light trucks. This is surprising, given the fact that DOE’s national laboratories have been reporting extensively over the past two years that major engine-efficiency and emission-reduction benefits can be derived from high-octane, low-carbon (HOLC) fuels, specifically blends of ethanol in the 25-30-percent range. And recent studies by the Ford Motor Company and others show ethanol blends of up to 30 percent (E30) would increase fuel efficiency and reduce tailpipe carbon emissions by seven percent each. Just as important, the Alliance points out, the combination of HOLC fuels and higher compression engines can enable a compliance pathway that is much more cost-effective than many other more expensive and complex technologies

“The EPA and NHTSA should put considerable focus on the composition of liquid fuels, and their co-optimization with advanced internal combustion engines through MY 2025, thereby recognizing octane – as many other federal and industry partners already have – as the single most important fuel property for maximizing efficiency and performance,” 25x’25 tells the agencies. “We believe that EPA and NHTSA can achieve the GHG and CAFE goals for 2022-2025, but only if significant consideration and analysis is given to how HOLC fuels can contribute to fuel economy and carbon reduction compliance.”

The Alliance says the draft TAR should contain a detailed analysis of how HOLC fuels and high compression engines interact and perform against other compliance pathways using cost parameters and customer acceptance metrics. The evidence demonstrates that utilizing high compression, high efficiency spark ignition engines in association with low-cost HOLC fuels represents the most affordable and sustainable pathway for achieving the desired model year 2022-2025 benchmarks.

In comments submitted by the High, Octane, Low Carbon (HOLC) Alliance, a group of stakeholders representing a wide range of energy and agricultural interests with a specific focus on motor fuels, EPA is told that “study after study from DOE and others show that dramatic efficiency gains can be had in gasoline vehicles by using higher-octane fuels (RON 98-100) than are currently available at the pump.” The group says that encouraging the introduction of optimized high-octane vehicles sooner rather than later can help to ensure that carbon footprint standards are met in 2025.

The HOLC Alliance goes on to remind EPA of its own assessment that a high-octane fuel such as a mid- level ethanol blend “could help manufacturers that wish to raise compression ratios to improve vehicle efficiency, as a step toward complying with the 2017 and later light-duty greenhouse gas and CAFE standards,” and that such a strategy would “enhance the environmental performance of ethanol as a transportation fuel by using it to enable more fuel efficient engines.”

The Environmental and Energy Study Institute cites the work of Co-Optima, a joint industry-DOE effort investigating future fuel and engine design, in asserting that “in the near term, ethanol is the best bio-based octane booster available” for today’s newer, more efficient engines.

25x’25 has long participated in an Ag-Auto Ethanol work group made up of agriculture interests, auto manufacturers and supply chain members intent on helping federal regulators understand the advantages higher ethanol-blend gasoline, ranging from 25 percent ethanol (E25) to E85, can provide in raising octane ratings, making gasoline burn cleaner and reducing greenhouse gas emissions. The Alliance has long understood the value of innovation in our transportation fuels. We urge federal and state regulators come to a similar understanding and encourage use of the fuel solutions readily available.

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