See the Full Press Release Here- Nations First Tidal Power RECs Delivered to 3Degrees

16^th Annual Congressional Renewable Energy

and Energy Efficiency EXPO + Forum

 Efficiency + Renewables = Economic & National Security!

 Cannon House Office Building – Caucus Room

U.S. House of Representatives

Wednesday – June 12, 2013 

Julia Pyper, E&E reporter
Published: Thursday, April 11, 2013
In meeting America’s energy needs, the marine hydrokinetic industry could be the wave of the future.

FOR IMMEDIATE RELEASE                              CONTACT:   Sean O’Neill (301) 325-5099

April 15, 2013                                                                            Carolyn Elefant (202) 297-6100

DOE Investment in MHK Technology Poised to Grow

The Department of Energy made major announcements the week of April 8 that will significantly advance marine hydrokinetic technology (MHK) and their role in the US power generation sector.

 In the first announcement, President Obama released his Fiscal Year (FY) 2014 budget request last week, which included $55 million for the Department of Energy’s (DOE) Water Power Program, with $39.5 million for Marine and Hydrokinetics Technologies (MHK). The request reflects a 14 percent increase from the program’s current $34 million FY12 funding level and will support advanced MHK systems and components, water power systems manufacturing R&D, and support for Wave Energy Converter (WEC) Test Facilities, in conjunction with the US Navy to enable testing of WEC devices.

 “This is encouraging for the U.S. water power industry,” said Sean O’Neill, OREC’s president. “MHK technologies, including wave, current and tidal technologies have demonstrated continued progress and promise to deliver clean, affordable and domestic energy to the U.S. grid. The proposed increase demonstrates the Administration’s desire to compete with the rest of the world in commercializing these technologies.  This recent activity sends a clear message across the MHK supply chain that federal commitment to advance the technology and move it into the market is strong, serious, and sustained.  We applaud the DOE leadership, program managers and technical staff on their critical support to date and for making a successful argument for continued federal investment going forward.”

Now that the President’s budget has been released, OREC pledges to work with its supporters in Congress during the FY14 appropriations process to secure a fair level of R&D funding to support MHK commercialization efforts by member organizations.

About the Ocean Renewable Energy Coalition

 The Ocean Renewable Energy Coalition (OREC) is the only national trade association exclusively dedicated to promoting marine and hydrokinetic renewable energy technologies from clean, renewable ocean resources. Founded in April of 2005, the Coalition has grown to over 60 members including technology developers, consultants, law firms, investor-owned utilities, publicly owned utilities, universities, and scientific and engineering firms. The coalition is working with industry leaders, academic scholars, and other interested NGO’s to encourage ocean renewable technologies and raise awareness of their vast potential to help secure an affordable, reliable, environmentally friendly energy future.

OREC seeks a legislative and regulatory regime in the U.S. that fosters the growth of ocean renewable technologies, their commercial development, and support in the race to capture the rich energy potential of our oceans. While other countries have already deployed viable, operating, power generating projects using the emission-free power of ocean waves, currents, and tidal forces, the U.S. is only beginning to acknowledge the importance of these technologies.

First up is a funding opportunity sponsored by DOE in conjunction with various offices and agencies, entitled DE-FOA-0000816: Marine & Hydrokinetic Environmental Effects Assessment and Monitoring. According to the announcement (available at the previous link):  “This FOA will support the collection of environmental monitoring and experimental data from MHK devices and analyses of existing data.” Letters of intent from interested companies are requested by April 18, 2013 and should be sent by email to Environmental_Assessment_FOA@go.doe.gov by 11:59 Eastern Time on 4/18/2013.

Next, are two notices of intent to issue FOAs.  The first NOI is for Marine and Hydrokinetic System Performance Advancement (Funding Number DE-FOA-0000848) has a deadline of June 9, 2013. Through this FOA,

DOE intends to fund projects that will improve the performance of existing marine and hydrokinetic systems through the development and verification/validation of innovative components that are designed and built specifically for MHK applications in three areas: 1) advanced controls, 2) next-generation power take-off (PTO) and 3) optimized structures. 

The proposed FOA would seek projects that design components to meet performance objectives, conduct numerical simulation and analysis to verify performance, and/or validate performance through physical model testing.

For more information on the FOA and expected deadlines, visit the Full Solicitation.

The second NOI is geared towards OREC’s university members and is for Marine and Hydrokinetic (Wave) Testing Infrastructure Development, Funding Opportunity DE-FOA-0000899.  According to this release:

DOE intends to fund two university- or national laboratory-led projects that will conduct preliminary engineering designs and select a potential site for an open water, fully energetic testing facility for wave energy technologies.

The goal of this opportunity is to identify a site location and a recommended construct for a national wave test facility within United States (U.S.) territorial waters. The proposed facility can be new construction or involve the design and modification of an existing facility. Infrastructure available for transporting, handling, installing, and servicing components and equipment, as well as proximity to a grid connection, should be factors in site selection.

For additional information on the FOA and expected deadlines, visit Full Solicitation

Click here to read the March 2013 newsletter. If you have any questions, please ask a member of Team OREC at the 6th Annual Global Marine Renewable Energy Conference.

Congress Passes Spending Plan for the Balance of FY2013 – DOE Water Power Program Funded at FY2012 Level

On March 22, Congress finalized legislation to provide funding for federal programs through the end of Fiscal Year (FY) 2013, averting a government shutdown. The final measure maintains the five percent across-the-board cuts known as the sequester.  This legislation was necessary as Congress was not able to enact any appropriations bills prior to the start of the current fiscal year on October 1, 2012.  Instead, Congress enacted a Continuing Resolution (CR) to get through the election.  The final CR package passed last week includes appropriations bills for Defense, Military Construction, and Veterans programs and kept the Energy and Water Development funding levels the same as last year.  For the Water Power R&D program, the funding levels for MHK in FY12 was $34 million.  We expect a similar level for FY13 and that DOE will now have funding available this year to support additional MHK R&D work and further development of testing facilities.

Defense Energy R&D Programs Funded

A bright spot in an otherwise austere Defense R&D budget was the increase for Alternative Energy R&D.  OREC and other MHK industry interests lobbied for an increase ($40 million) to the Navy Energy Program to fund wave and tidal energy projects.  The FY13 budget is $95 million and we are working with our Congressional champions to ensure that a portion of the increase is allocated for MHK industry and test center R&D projects.  Other parts of DoD have Alternative Energy funding including $40 million for the Office Of Naval Research, $37 million for the Air Force Research Lab, and $37 million for the Army.

Senate and House Pass Budget Resolutions

The ultimate fate of the sequester may be determined by competing Fiscal Year 2014 budget resolutions that also were passed by their respective chambers last week.  This was the first budget resolution passed by the Senate in four years.  The House budget resolution maintains the sequester, and imposes new cuts to renewable energy programs, while the Senate budget resolution eliminates the sequester, and protects funding for critical clean technology R&D initiatives.  The budget is a non-binding resolution and does not mandate program spending levels.  It is the appropriations legislative process that will set the final levels for funding the water power R&D program for FY14.  The President’s budget request to Congress should be released the week of April 8th
Members of Congress now return to their states and districts for a two-week Spring recess.  When they return, they will begin efforts to negotiate a final budget agreement between the House and the Senate and also begin work on FY2014 appropriations.

Marine Renewable Energy Promotion Act

We continue to work with Senate Energy and Natural Resources Committee Members and staff on the bipartisan Marine Renewable Energy Promotion Act to ensure inclusion in any upcoming energy legislative package.  Senator Ron Wyden (D-OR), Chairman of the Energy Committee, along with his Ranking Republican on the Committee, Senator Lisa Murkowski (R-AK), will likely re-introduce the MREPA bill or an extension of current law sometime after the Spring recess.

Please contact Damian Kunko or Paul Gay at SMI (202-467-5459) if you have any questions on our government relations activities.

Speaking at the Offshore Wind Power USA conference earlier this week, Interior Secretary Ken Salazar said, “The potentially devastating impact of budget reductions under sequestration could slow our economy and hurt energy sector workers and businesses.” While this is true for all parts of the energy industry—the cuts could put up to 300 oil and gas leases in jeopardy, for example—it is particularly bad news for renewables: fewer studies, less stakeholder input, and delays in licensing and permitting.

Energy Secretary Steven Chu agrees. In a letter to the Senate Appropriations Committee earlier this month, Chu warned that “funding reductions would decelerate the Nation’s transition into a clean energy economy, and could weaken efforts to become more energy independent and energy secure, while spurring overall economic growth.” Additionally, cuts to the Department of Energy could cripple the Department’s efforts to improve grid security and reliability.

Read the full text of the proposed rule here.

OVERVIEW:

In response to a request from the Solar Energy Industries Association (SEIA), FERC has proposed to revise the pro forma Small Generator Interconnection Procedures (SGIP) and pro forma Small Generator Interconnection Agreement (SGIA), which establish a process for interconnection of facilities generating 20 MW or less. Both FERC’s current and revised small generator regulations apply only to interconnection with a public utility’s transmission facilities or jurisdictional distribution facilities. Therefore, FERC’s revised small generator interconnection rules are not expected to affect many MHK projects, which are small, located in remote areas, and are likely to interconnect with local distribution facilities subject to state rather than FERC jurisdiction. Nevertheless, the FERC rules are important because it is anticipated that they will serve as a model for states seeking to improve access to small generators.

Background:

FERC’s current interconnection procedures establish a streamlined process for interconnection of small generation projects, thus enabling them to bypass costly system impact studies. One of the technical screens used in the Fast Track and 10 kW Inverter processes to determine whether a small project will impact transmission is the 15 Percent Screen:

“For interconnection of a proposed Small Generating Facility to a radial distribution circuit, the aggregated generation, including the proposed Small Generating Facility, on the circuit shall not exceed 15 [percent] of the line section annual peak load as most recently measured at the substation.”^[1]

The recent increase in solar and wind generation capacity (almost all of which comes from small generation facilities) has called the 15 Percent Screen into question. If penetration reaches 15 percent on a line section, subsequent facilities will fail the screen—thus presenting an additional obstacle to interconnection.

In February 2012, the Solar Energy Industries Association (SEIA) petitioned FERC for revisions to the pro forma SGIP and SGIA. SEIA claimed that the regulations in their current form “present unreasonable barriers to market entry”^[2] and proposed three revisions:

1. maintain the 15 Percent Screen but require utilities to offer a “well-defined supplemental review”^[3] if a facility fails the 15 Percent Screen;
2. remove the 2 MW threshold for the Fast Track Process, or, alternatively, change it to 10 MW; and
3. provide (at applicant’s request and cost) independent third-party technical review of proposed upgrades to determine whether there are simpler, cheaper options.

Summary of FERC’s Proposed Rule:

For a $300 fee, an interconnection applicant may request a report from the utility (prior to applying for interconnection services) covering system conditions at the proposed interconnection point. The applicant must “clearly identify” the proposed interconnection point, and the utility has ten business days to provide the report.^[4]

• The utility need only provide existing information; it need not gather new information.
• To the extent of the available information, the report must cover:
  • other facilities that serve the interconnection point (including capacity, voltage, etc.);
  • the transmission from the interconnection point to the substation that will serve it (including circuit distance, protective devices, voltage-regulating devices, etc.);
  • peak and minimum load data; and
  • any other known constraints.

Eligibility for the Fast Track Process now depends on the characteristics of individual systems and generators (with an maximum cap of 5 MW), as shown in the following table^[5]:

FERC clarifies and modifies the Fast Track Process’s customer options meeting as follows:

• If the applicant agrees to pay for minor modifications to the utility’s system, the utility must provide an interconnection agreement within five business days.
• Supplemental review is conducted at the applicant’s discretion, for a $2,500 fee.
• Supplemental review includes three additional screens. If a proposed interconnection fails any of the three, the Study Process will be used. The screens are:
  • 100% of minimum load screen (using daytime minimum for solar generators, and absolute minimum load for all others);
  • power quality and voltage screen; and
  • safety and reliability screen.
• These new screens are designed as a “middle ground”: maintaining the 15 Percent Screen (at the outset of the Fast Track Process) while providing an alternative in case a proposed interconnection fails the Screen. This allows small generation facilities to exceed 15 percent of peak load on a case-by-case basis as long as there are no safety or reliability problems.

The applicant may review and comment on system upgrades required by the utility, but the utility makes the final decision.

How the Proposed Rule May Affect MHK:

As described, most of today’s proposed or existing MHK facilities are small demonstration or pilot projects, remotely located and as such are not likely to qualify for FERC’s interconnection procedures.  However, the potential for a higher threshold would be helpful in the future as MHK continues to expand. Still, those projects facing interconnection challenges at the state level may use the FERC process to negotiate a better alternative with the utility or as a model for modifying state rules.

Moreover, the MHK industry will eventually advance, at which point the new FERC rules could prove useful in several ways. Any small-generation energy producer could benefit from the ability to request a report from an interconnection provider prior to officially submitting an interconnection application. In the case of MHK and other offshore facilities, this “frontloading” of information is especially beneficial; due to the unique geography of these projects, connecting to the grid can present significant engineering challenges, and MHK developers may have few options when considering potential interconnection points. By making information available earlier in the process, the proposed rule would therefore encourage MHK development. Additionally, changing the threshold for the Fast Track Process would benefit small-generation developers overall.

While the proposed changes to supplemental review are better than the status quo, they may not be the best way to solve the problem. Because most renewable energy comes from small generation facilities, the 15 Percent Screen operates as a penalty for developing in an area that has strong renewable portfolio standards and/or distributed generation standards. The proposed rule creates a “workaround” by allowing facilities to exceed the 15 Percent Screen on a case-by-case basis, but this two-step process is inefficient and may be unnecessary because the 15 percent figure is rather arbitrary. (FERC describes it as “derived by using a ‘rule of thumb.’”^[6])

Comments:

Due June 3, 2013

Workshop for stakeholders to discuss proposals: to be held before end of comment period (date will be announced by April 2, 2013)

OREC intends to file comments on the proposed FERC rules. To this end, we seek input from members, particularly developers who have already gone through the interconnection process.  Do you believe that the FERC rule will be helpful to MHK developers as a model for states? Are there other elements that the proposed rule should include to expedite the interconnection process? Finally, for our foreign members, what procedures are in place for interconnection in your respective countries, and might they be helpful to inform the process here in the United States.

Please submit comments to Carolyn Elefant, carolyn@oceanrenewable.com, or our new associate counsel Len Rubin, len@oceanrenewable.com, who will be drafting OREC’s comments.

Read the full text of the proposed rule here.