Funding for Smart Grid Training by State

Sec. of Energy Steven Chu

Speaking in Maryland Today…

…United States Secretary of Energy Steven Chu announced a new round of Recovery Act funding, totaling close to $100 million, creating fifty-four centers in thirty-three states  to train the workforce the country needs to build and maintain a “Smart Grid.”

“Building and operating smart grid infrastructure will put tens of thousands of Americans to work,” said  Chu. “Today’s investment will help ensure that we have the workforce in place to meet this need. This is a great opportunity for workers to upgrade their skills and earn more, or for laid off workers from other industries to start fresh in a new and growing field.”

What is a Smart Grid?

Here’s a thumbnail sketch from a Department of Energy (DOE) booklet:

The Smart Grid and the technologies embodied within it are an essential set of investments that will help bring our electric grid into the 21st century using megabytes of data to move megawatts of electricity more efficiently, reliably and affordably. In the process, our nation’s electric system will move from a centralized, producer controlled network to a less centralized, more consumer-interactive, more environmentally responsive model. Far more than “smart meters,” a fully functioning Smart Grid will feature sensors throughout the transmission and distribution grid to collect data, real-time two-way communications to move that data between utilities and consumers, and the computing power necessary to make that intelligence actionable and transactive. Indeed, only by bringing the tools, techniques and technologies that enabled the Internet to the utility and the electric grid is such a transformation possible.

You can download a pdf file of all fifty-four training programs with full details, here.

A host of new tax credits are now available thanks to the American Recovery and Reinvestment Act (ARRA). The only drawback is that there are so many ways to reduce your tax bill by investing in energy efficiency and renewables, that it may be hard to keep track of them all.

While visiting Seaway Manufacturing Corporation in Erie, Pennsylvania today (they make energy efficient windows), Secretary of Energy Steven Chu reminded his audience that “Investing in energy efficiency is one of the quickest and most cost-effective ways reduce the energy bills in your home. We want to make sure that families that made those investments are taking advantage of the Recovery Act tax credits, which can put up to $1,500 into their pockets.”

Here are six tax credits that are often overlooked:

1.Residential Energy Property Credit (Section 1121)

The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.

The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.

A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as “energy efficient” for purposes of this tax credit.

2. Residential Energy Efficient Property Credit (Section 1122)

This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property.

3. Plug-in Electric Drive Vehicle Credit (Section 1141)

The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer’s vehicles after the manufacturer has sold at least 200,000 vehicles.

4. Plug-In Electric Vehicle Credit (Section 1142)

The new law also creates a special tax credit for two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable.

5. Conversion Kits (Section 1143)

The new law also provided a tax credit for plug-in electric drive conversion kits. The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.

6. Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT (Section 1144)

Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.

For more information, see the IRS FAQ page, here.

From the Department of Energy, some good news and some bad news for renewable energy advocates.

First, the good news: The DOE released a list today of the dozen projects currently participating in the Department’s energy loan programs. The loans and guarantees total more $19 billion and will “create or save” 50,000 jobs, according to DOE figures. So, what could be bad about that? Nothing, unless you look carefully at the details. (Not that the DOE is trying to mislead anyone — it’s a matter of definitions.)

The Devil is in the Definitions

The Arizona state legislature recently tried to pass a bill that would have defined nuclear power as a “renewable” source of energy, despite federal regulations to the contrary. (I’ve written about the details elsewhere.) No such purposeful dis-information is contained in the information coming from Secretary of Energy Steven Chu’s office. It’s just that Chu, like his boss, defines “clean energy” very narrowly — referring only to sources that emit little or no-CO2.

Shippingport Atomic Power Station

This definition excludes the 2,200 tons of radioactive waste produced annually by the nation’s 104 nuclear power plants. A half century after the first commercial nuclear power plant went on-line (the Shippingport Atomic Power Station in Pennsylvania), there is still no long-term solution for what to do with this dangerous waste.

Still, even the enthusiastically pro-nuclear Secretary of Energy doesn’t claim nuclear is “renewable” since it runs on a fuel supply (uranium) that has to be mined and is finite.

Of the dozen loan recipients, nine are clearly renewable. One (Ford) is a combo — the loan goes “to transform factories…to produce more fuel efficient models,” according to the DOE (pdf file). The increased efficiency comes from a variety of changes, including adding electric vehicles (which can be “renewable” depending on the energy source) and design changes that allow more complete energy capture from combustion — which is a good thing, but doesn’t make it “renewable.”

In addition to the two nuclear power plants (operated by Southern Nuclear), one other project is clearly not renewable — or clean: the construction of a plant in Louisiana to produce activated carbon), used to remove mercury emissions from coal-fired power plants. Reducing mercury pollution is clearly a good thing. The coal industry also needs this technology because new, lower mercury emission standards are going into effect. But, is a project “clean” if it allows coal-fired power plants to continue emitting CO2? The DOE’s definition of “clean energy” is not just narrowly defined, it’s also a moving target.

Follow the Money

The DOE’s $19 billion dollar energy pie can be sliced in different ways. Here’s what that pie looks like based on the opening sentence of the DOE press release on the dozen projects: “The U.S. Department of Energy’s Loan Guarantee Program paves the way for federal support of clean energy projects…”

Chart 1 shows all monies as “Clean Energy” because it assumes DOE’s definition.

CHART 1

Chart 2 divides the DOE money based on renewable vs. non-renewable energy project.

CHART 2

[Note: As of Sunday (March 7), the DOE was unable to say how the $5.9 billion loan to Ford was divided between renewable and non-renewable projects. For that reason, Ford is not included in Chart 2.]

Substituting “renewable” for the ambiguous term “clean” gives a much different picture. Loan guarantees for renewable projects account for just over a third of DOE dollars. It’s instructive to look at a similar chart, with one difference — illustrating how funding for renewable energy stacks up against funding for nuclear power in this DOE program.

Chart 3 divides the DOE money based on renewable vs. nuclear power projects.

CHART 3

The non-renewable portfolio is almost entirely devoted to building twin nuclear power plants in Georgia, operated by Southern Nuclear. Removing the single other project in this category (the facility to produce activated carbon in Louisiana) has no effect on the whole number percentages of the renewable and non-renewable categories in Chart 2.

The point of this exercise is to underscore the importance of precision in discussing energy policy issues. In this debate, the words “clean” and “renewable” are often applied to the word “energy” as if they were synonymous. They aren’t.

Whether or not nuclear power should play a major role in our energy future is an enormously important question — but it’s not addressed here. In the DOE’s loan guarantee program, one form of energy is dominant: nuclear power.

Advocates of nuclear power will be happy with this arrangement. Renewable energy supporters, not so much.

Announced Projects in the DOE’s Loan Programs

1. Solyndra, Inc. was awarded a $535 million loan guarantee (pdf) to manufacture innovative cylindrical solar photovoltaic panels that provide clean, renewable energy.
   
   

   Solyndra solar panel tubes

   
   

2. Nordic Windpower USA has been offered a conditional commitment for $16 million (pdf) to support the expansion of its assembly plant in Pocatello, Idaho to produce its one megawatt wind turbine.




3. Beacon Power, an energy storage company, has been offered a conditional commitment of $43 million (pdf) to support the construction of its 20 megawatt flywheel energy storage plant in Stephentown, New York that will help ensure the reliable delivery of renewable energy to the electricity grid.




4. Red River Environmental Products has been offered a conditional commitment for $245 million (pdf) to build an activated carbon (AC) manufacturing facility near Coushatta, Red River Parish, Louisiana.




5. Vogtle Electric Generating Plant (operated by Southern Nuclear) has been offered conditional commitments for a total of $8.33 billion in loan guarantees (pdf) for the construction and operation of two new nuclear reactors at the Alvin W. Vogtle Electric Generating Plant in Burke, Georgia.
   
   

   Vogtle Nuclear Power Plant

   
   

6. BrightSource Energy, Inc. has been offered conditional commitments for more than $1.37 billion in loan guarantees (pdf) under the American Recovery and Reinvestment Act to support the construction and start-up of three utility-scale concentrated solar power plants.




7. First Wind – Kahuku Wind Power has received a conditional commitment for $117 million to install twelve 2.5 MW wind turbine generators along with a battery energy storage system for electricity load stability.
   
   

   Wind turbines

   
   

8. Sage Electrochromics has received a conditional commitment for $72 million to support the financing of the construction and operation of a 250,000 square foot, high volume manufacturing facility to produce SageGlass®, an energy-saving switchable window technology for commercial and residential use.




9. Ford Motor Company has closed on a $5.9 billion loan (pdf) to transform factories across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce more fuel efficient models.




10. Nissan has closed on a $1.4 billion loan (pdf) to produce electric cars and battery packs at its manufacturing complex in Smyrna, Tennessee. The loan will aid in the construction of a new battery plant and modifications to the existing assembly facility.
    
    

    Nissan Leaf, EV

    
    

11. Tesla Motors has been offered a $465 million loan (pdf) to finance a manufacturing facility for the Tesla Model S sedan and to support a facility to manufacture battery packs and electric drive trains.




12. Fisker Automotive has been offered a $528.7 million conditional loan (pdf) for the development of two lines of plug-in hybrids that will save hundreds of millions of gallons of gasoline and offset millions of tons of greenhouse gas emissions by 2016.

[Source: DOE press release via email, 5 March 2010]