Real Renewable Energy vs. Renewable Energy Credits
A couple of my friends have recently asked about the new renewable energy credit program that our local electricity utility, DTE Energy, is now offering. One friend asked me about it directly, and another raised the question on the state mailing list for the o2 Network. There was an interesting discussion about the topic on the 02 list, and I’ve included some of the information that other people shared on that list in this article.
In southeast Michigan, the local electricity company is DTE Energy. Although it has (or had) a number of business units exploring all manner of alternative energy production, DTE has been relatively resistive to including any renewable energy in its portfolio. Despite consumer demand for green energy, DTE has no plans to construct anything, and has been very resistive to connecting alternative producers to its grid. (This is the same company that fought against connecting a wind turbine installed at a local middle school from connecting to the grid.)
Looking at the renewable energy credit (REC) program that DTE is offering, there isn’t much to it. DTE is offering now has two options for residential customers. One is a premium of 2 cents per kilowatt-hour (kWh) on all electricity used. The other is to buy RECs in blocks of 100 kWh for $2.50 each (2.5 cents per kWh). These are supposed to come from in-state sources, to the greatest extent possible, but DTE has argued that there aren’t many in-state sources available to them.
Michigan’s Pubic Service Commission "Opinion and Order" (PDF) regarding DTE’s program recognizes the comments and criticism about the program and how much (or how little) it will do to encourage the development of renewable energy production in the state of Michigan.
"The primary criticism of the RRP made in the comments centers on the issue of whether and how much the proposed program will encourage development of in-state or in-service-territory renewable resources. Some of the commenters are of the opinion that procuring RECs alone will not prove sufficient to support the development of in-state renewable resources. Other commenters criticize the company’s proposal because Detroit Edison’s only responsibility will be to act as a broker that buys RECs at one price and sells them at a higher price."
The order from MPSC specifically disallows DTE from providing some out-of-state RECs, and has tried to steer the program toward emphasizing in-state energy production as much as possible. A presentation on the Ann Arbor (MI) website notes that "Importing Energy Means Exporting $$$" and goes on to add that 100% of the coal, 96% of the oil, and 75% of the natural gas used in the state is imported. This amounts to an annual outflow of $18 billion from the state. And this is exactly why Michigan (and the rest of the country, too) needs to develop local, renewable energy resources.
As tepid as the DTE program may seem, it’s the only program that I’m aware of that specifically includes funding development of alternative sources of energy in the state of Michigan. On the positive side, some fraction of the proceeds of the REC program will go toward development of in-state renewable energy. And participation in the program serves to indicate consumer interest in the program and a willingness ot pay a premium for green power.
On the downside, this is a company that has demonstrated very little interest in providing green energy for its customers. I’m not sure how much of an effect my participation in the DTE program is going to have towards actual new development. If I want to buy RECs, there are lots of providers around, and many of them are probably competitive with DTE’s rates. The REC program being offered by DTE is unlikely to do much on its own to spur the development of additional in-state sources of renewable energy.
On the other hand, a renewable energy portfolio standard (RPS) would mandate that a certain percentage of a utility’s power come from renewable sources. But that’s a whole further step, and something that some states have, but which the state of Michigan still lacks.
Right now, I’m not signed up with the new DTE program, and I’m not hurrying to do so. Once the portfolio of providers is available, I’ll re-evaluate. And in the meantime, I’m looking for another REC provider that supports renewable energy in-state.
PROSPECTS FOR THE BIODIESEL INDUSTRY
Where we’ve been.
The biodiesel industry has reached a crisis point. The demand for biodiesel has promoted the construction of a large number of biodiesel plants. These refineries use the oils from many plants, but especially soy. The cost of seed oil has risen dramatically because of the rise in petrodiesel costs to farm and the demand for ethanol as an additive to gasoline. Ethanol is used in the processing of biodiesel.
In Europe, many of the biodiesel plants have been moth-balled because of the high cost of oil seed oil. Imperim Renewables, Gray’s Harbor WA, is finishing a 100,000 million gallon per year plant, with no assured source of vegetable oil. They are reluctant to import palm oil because of the adverse ecological impact of the palm plantations. Other refineries are facing the same supply issues.
The favored source of oil, algal oil, has been touted as the liquid fuel source of the future – and indeed it is. Most early investors put their money up to fund the construction of algae farms. Guess what? They proved they could grow algae using a wide variety of technologies.
Where we’re at.
Slowly, it dawned on these producers and their investors, that while they could successfully grow algae, they had only very inefficient means of extracting the oil from the algae cells. The universities were of no help since most of their funding was to discover ways of growing algae and tweaking the DNA. None have developed any new technologies to extract the oil in a continuous, large volume process.
There are ways of fracturing the algae cell to get at the lipids floating around in the cytoplasm. Heat, pressure drop, impingement, solvents, crushing, grinding with small ceramic bebees – all have been tried. Yet much of the technology, derived from the lab bench was not scalable to commercial standards, except at great cost and poor results.
Algable to the rescue.
We are a small group of highly energized professionals who have found the technological “sweet spot” for harvesting the Chlorella vulgaris cells and extracting the algal oil. Included in our talent mix are mechanical engineers, an agricultural engineer, a computer scientist, a lawyer, airline owners and an biodiesel plant design-and-build specialist. The process of harvesting the mature “parent” cells and returning the “daughter” cells to the head of the growing system has been solved. The opening of the Chlorella cell is done by osmotic rupture, leaving the cell wall intact, looking like an opened flower. The cytoplasm and the cell walls are separated and then the lipids (oil) removed, returning the balance of the cytoplasm to the algae production system to add to the nutrient. The cell walls can be dehydrated and sold as a health food supplement or fermented into ethanol. The wash water used to clean the raw biodiesel is laced with Phosphorus and serves as a nutrient.
The remaining mechanical issues are: how big do we make the system to handle what quantity of algae? If our clients will tell the quantity, we can build the machinery to handle the clients’ request. We are not dealing in rocket science. We are not interested in doing study after study like the universities and think tanks. We want to build the machine the client wants and get it into operation fast. We will stand behind our work and tweak the equipment when necessary. We are constantly on the look-out for new ideas. The technology in this field is a moving target, and we move with it.
In terms of scale, our designs will serve two primary markets: The small farmer cooperative of fifteen to fifty members, using at least 100,000 gallons of biodiesel a year, and the larger farm which is producing algae which converts to 10 million gallons of biodiesel a year. While the equipment we build (the cell harvester and the cell rupture machine) are fully scalable, some of the equipment we buy from others has not been scalable, except by installing a bank of units. These units include filters, separators, polishers, and solvent recovery devices. We are working with many of these vendors and encouraging them to scale up their equipment. We have encountered the age old problem of “why invent, develop and make a much larger machine, since no one has demanded such machine”. Before Xerox was invented, no one demand a Xerox copier.
We have the science and engineering talent in our firm and the advanced knowledge of where technology should be driven to solve the “Xerox” conundrum. We will not likely be on the front page of the WSJ any time soon. We are not interested in selling out to an oil company, merely to see our patents and technology suppressed. We know that Chlorella divides 2.5 times per hour. The growth/harvest cycle is about ten days as against annually for oil seed crops. We can grow the algae in cover ponds in the middle of winter in Montana on non-crop soils. We can grow it on dry desert lands. We can make our own distilled water. The wash water can be used to grow algae and other crops. The co-product, glycerol, has many profitable uses, despite what you may have read about the glut of raw glycerine on the market. We want to use the “free” energy of geothermal wells, the Sun and wind energy. We want to be as green as we can get with the smallest carbon footprint.
Contact information:
James E. Miller
530 NW 13th St., Corvallis, OR 97330
Landline: 541-757-9797; cell: 541-971-0403; Skype: jimmiller5417 or 541-359- 3676.