We have been warned again by thousands of scientists about climate change – STOP CARBON EMISSIONS OR…
In Ashland, the Friends of 10×20 hear this call to change our life style radically and quickly or suffer the consequences of climate change that will be irreversible. The Ashland City Council in August of 2016 voted to accept the 10×20 ordinance after the Friends collected over 1800 signatures to put the ordinance on the ballot. The ordinance simply requires the city to produce 10% of the electricity used in the city from new, local and a clean resource by the year 2020… Today, almost 15 months later, the council and staff have done little to implement this ordinance. Below are three articles written by Dr. Tom Marvin, who is one of the friends of 10×20 who assisted in the writing of the ordinance. He tells the reader what needs to happen to bring this ordinance to life. Join the Friends of 10×20 on most Saturday mornings from 11-noon to learn more. They meet at the Washington Federal meeting room next to the coffee shop, Pony Espresso. Look for their new website which will be announced here soon.
Ashland’s Renewable Energy Ordinance – Part 1 of 3
Probably the most common question asked about Ashland’s renewable energy ordinance (‘10×20’) is: “Why not just put solar panels on all the rooftops?”. There are several long and short answers to this, and none of them are difficult. Sometimes I prefer to make this analogy: Suppose you have an active kitchen and want to store 4 lbs of rice. Would you want to store it in one or two large canisters, or would you prefer to store it in 95 little jars?
We know the answer, and it coincides with the results of every other search for the best way to meet the ordinance requirements. One pretty good answer is: a 55 acre solar farm. It turns out that since Ashland is already the happy owner of a very appropriate chunk of land that has few other uses — the riddle is solved! Approximately 6% of Ashland’s 860 acre Imperatrice property, right across I5, fits this need. Currently the City staff is working on the complexities of a plan to implement 10×20, but it needs Council (and citizen) guidance.
Now, the second most frequently asked question is “Why does Ashland want to do this, to get 10% of its power through its own local renewable energy?”. You can see the answer plainly in the City’s heavily invested Climate and Energy Action Plan [CEAP]. You can also hear the answer in the dialogues of a large number of concerned citizens, who are seriously asking how can we reduce our carbon footprint. Well, by annually generating 22 gigawatt-hours (gwh) of nearly carbon-free energy, we will have at least made a start. An effort. A city-wide effort.
Do not let anyone tell you that producing 22 gwh of juice is merely replacing renewable energy from our BPA supplier with renewable energy. Anyone who nurtures and harvests an organic fruit tree will explain to you why that tree contributes to the net supply of organic fruit in this world. When you insert 22 gwh of new electricity into the ‘system’, you’ve added that much new renewable energy. It also helps to know that the fine BPA power we buy from sources 400 miles away (with line loss) is statistically no more than ~50% from actual renewable sources. And that the best of it is hydro-power that BPA will have no trouble furnishing to others in need.
Some readers suspect correctly that there is more to this story of ‘Why do we want our own good, local energy?”. The answer lies in the long term strategy of providing the basis for a resilient electricity function in our town. Modern technology is bringing online, as we speak, forms of local self-sufficient power grids known as micro-grids. The idea is that in the event of the loss of shipped-in power, a community can turn to its internal grid to meter power to critical or sub-critical needs. Ashland, with its own fiber network and a generally interested citizenry, is well-poised to consider resiliency. Of course — what is the essential element in a local micro-grid? It is a usable local source of power.
We have a small hydro system already, operating on Ashland Creek. This can be made more useful, larger, relatively easily. Combined for balance with a 22 gwh solar farm and an energy storage unit, Ashland can have a very fine micro-grid. Please note that a micro-grid is an option of but not the reason for building the solar farm. The first reason is the renewable energy.
The sequel to this Guest Opinion will deal with how such a farm pays for itself. Until then, please understand that the solar farm functions like a giant solar rooftop over the entire city. Like any rooftop solar array, it pays for itself with the energy it produces. And after it has paid for itself, it continues to feed the public its power for many years, completely in the black.
Tom Marvin Professor Emeritus
Physics, SOU 1976-2006
Ashland Renewable Energy Ordinance Part 2 of 3
In Part 1 I discussed some of the whys and wherefores of Ashland’s 10×20 renewable energy ordinance project. Now we can discuss its economics and financing. There are three nice surprises: the project is essentially free, the financing of it is relatively easy, and it is entered with no risk at all.
The project, now seen as a 55 acre solar farm across I5 on City-owned property, has a capital cost of millions of dollars which neither Ashland nor any of its residents ever see. There is no debt incurred. Rather, a private company undertakes all aspects of building, financing, and operating the project, and obtains its return by selling the solar power to us. This is called a power purchase agreement (PPA) and it is the standard way public utilities acquire large energy projects. This works because companies can use tax incentives and depreciation. Cities cannot. This is why I say the financing is easy.
PPAs typically retire in twenty years. Then the City takes full ownership with no further obligations, receiving its 22 gigawatt-hours per year free. During the ‘purchase’ period, Ashland will agree to buy the power at a wholesale ‘cents per kilowatt-hour’ rate, if we like the proposal. If there is no proposal the City likes — we stop right there, with nothing spent. This is a City Council decision, informed by the public. This is why there is no risk: we know with certainty the full cost going in.
The project proceeds through a formal RFP (request for proposals). Ashland writes this proposal, and puts it out for bids. A well-conceived and well-written RFP will attract several companies, and hopefully at least one proposal will interest us.
We determine whether a PPA is in our interest by comparing its ‘cents per kwh’ rate to what we pay now (wholesale) for our electricity. Because solar energy projects have burgeoned throughout the world, solar farms have become very reasonable. For example, Tucson has just been offered a PPA for a 100 megawatt system at 3 cents per kwh! Even in the NW where the Bonneville Power Administration (BPA) can sell us power at 4.5 cents (wholesale), solar is competitive. Ashland, developing a smaller 14 megawatt system further north, will expect to pay a little more than 3 cents/kwh.
We can estimate how the solar farm, producing 10% of the City power, will affect our actual utility bill. The PPA offers may range from ~ 5 cents/kwh to ~ 9 cents/kwh. And we can include the possible BPA contract penalty called “Take or Pay”, which could add another 4.5 cents/kwh in the first few years (I will explain in Part 3). These prices will result in an initial addition to the typical utility bill, ranging from a low of ~1.5% to a worst case scenario of ~ 4.6%.
These increases, however, diminish over time since the cost of the standard 90% of Ashland electricity will always increase due to inflation. Before the PPA runs out, its price/kwh will likely be less than the cost of BPA power Ashland buys. Utility bills then see a % decrease, due to the solar. And when the PPA ends, the solar portion is pure free power into the City, and any previously accumulated outlay is very quickly returned.
The purpose here has been to show how the Ashland solar farm is financially sound. The reasons for the ordinance itself however are not to save money. Rather, it is close-up action of significance, taking an actual step against climate change — at the community level. It is offering every person in town, regardless of circumstance, some direct participation in the transition away from fuels with greenhouse gas emissions. It is Ashland making a strong statement.
In Part 3, we explain the BPA Take or Pay issue and give possible resolutions of other perceived hurdles in moving forward in a community clean energy project.
Tom Marvin, Prof. Emeritus,
Physics, SOU 1976-2006
Challenges to Local Renewables Part 3 of 3
Two recent opinion pieces describing Ashland’s renewable energy project demonstrate the practicality of meeting the City’s ordinance requirements with a solar farm. Part 1 (Nov. 2) and Part 2 (Nov. 9), found online at this newspaper, make the case for how the city can obtain a significant 10% of its electricity from very clean, local sources — and come out ahead financially.
Of course this sounds too good to be true. The reason it sounds that way is related to how we have come to understand what is true … and what isn’t. So we need to look at that.
One of the things that have given pause in City Hall to the project is the sense that it’s not affordable, due to a clause in our power contract that stipulates that we must pay for a certain amount of imported power even if we replace it with our own local power. This is called ‘Take or Pay’, and it is meant to assist several planning issues for Bonneville Power Administration. It turns out however that the clause is not a real obstacle for us, for several reasons.
First, I showed in Part 2 the effect on power rates even when Take/Pay is triggered. It is not a financial deal breaker after all, especially in the long run. How can that be? It is because solar photovoltaics are economically positive past the dollar penalty that Take/Pay can impose. In the short run, Take/Pay could only add less than ~ 2.7% to a typical utility bill, and that decreases over time.
Secondly, as Ashland pursues its Climate and Energy Action Plan, it will necessarily encourage replacing as much natural gas and petroleum use with electricity as it can — because only electricity can have near-zero greenhouse gas emissions. Since Ashland is already near the Take/Pay threshold, significant new uses of electricity can only deactivate its trigger. In other words, one of our best, and greenest, strategies is to use more electricity where energy is needed!
Next, our BPA contract runs out in 2028, when we are into less than one third of the life of the farm’s first set of solar panels. This does not imply that Ashland would find another supplier (our BPA rates are very good), but just that renegociation could help rewrite the ‘Take or Pay’ clause.
BPA is on record for supporting renewables other than hydropower. It is unlikely that among BPA’s 112 utility customers with the same contract as Ashland that several do not share our interest in renewable energy production. It’s hard to imagine that BPA isn’t looking for solutions to the general problem of how to integrate local solar farms into its utility customers’ systems. And it seems that a serious City petition to BPA to search out a solution would be worth the effort.
The City Council created the 10×20 renewable ordinance 14 months ago, and the staff has completed several quality studies for it. But staff changes and a tentative Council have kept the apparent progress dangerously slow in regards to what must be done to meet the 2020 target. The year 2020 was not a random selection, as it may be a serious inflection point in the availability of incentives needed to make the solar farm as viable as I have claimed.
The immediate hurdle is the drafting of the RFP for the solar farm. It will take some staff effort, but require no special funding. We will need a county permit, a Pacific Power agreement, a variance from the land use board, and a geologic analysis. To clear the hurdle we need City action on these steps. In order for Ashland to make an informed decision on whether to have the solar farm it needs to receive a few proposals responding to a fine, clean RFP.
Yes, the City has its priorities. The contention here is that the planning and execution of a stronger, modern, interesting energy future is one of them.
Tom Marvin, Prof. Emeritus,
Physics, SOU 1976-2006