Planning for the Energy Future IN NORTH CAROLINA S PIEDMONT TRIAD REGION

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1 IN NORTH CAROLINA S PIEDMONT TRIAD REGION

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3 In North Carolina s Piedmont Triad Region Prepared By Elizabeth Jernigan, Piedmont Triad Regional Council With Support from Cy Stober, Piedmont Triad Regional Council Kyle Laird, Piedmont Authority for Regional Transportation With the Support of the US Department of Housing and Urban Development Sustainable Communities Initiative Grant Program March 2014

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5 INTRODUCTION... 1 EXISTING ENERGY LANDSCAPE... 2 Service Providers... 3 Clean Energy Policy... 4 Renewable Energy... 8 Solar Potential... 8 Wind Potential Biomass Potential Geothermal Potential Hydroelectric Potential Recaptured Methane Gas Potential Smart Grid & Energy Storage Potential Renewable Energy from Contaminated Lands ENERGY EFFICIENCY Residential Local Government Commercial Industrial THE ENERGY WATER NEXUS Electricity Generation Public Water and Wastewater TRANSPORTATION Emissions.22 ECONOMIC IMPACTS IMPLEMENTATION Preparing for Tomorrow Leveraging Growth CONCLUSION IMPLEMENTATION THE VISION Goals, Objectives & Strategies REFERENCES... 31

6 Figures & Tables Figure 1: Energy Use & Climate Change... 1 Figure 2: County Population and Designation... 2 Figure 3: Electricity Providers in NC... 3 Figure 4: Piedmont Triad Power Plants... 4 Figure 5: Decoupling in the United States... 6 Figure 6: Photovoltaic Solar Potential in the Southeast... 8 Figure 7: Davidson County Solar Energy Project... 9 Figure 8: NC Biomass Land Cover Figure 9: Oakdale Manufacturing Co., Randolph County Figure 10: Approximate Landfill Gas Composition Figure 11: Piedmont Triad LGF Project Opportunities Figure 12: PTRC Identified Brownfield Sites Figure 13: Piedmont Triad Home Energy AFfordability Gap Figure 14: Residential Energy Efficiency Figure 15: Energy Use By Sector Figure 16: Primary Energy Consumption in the South Figure 17: NC DOT Expenditures by Focus Area Figure 18: NC CMAQ Eligible Counties Figure 19: Registered Renewable Energy Systems in NC Figure 20: Growth of Clean Energy Firms in the Piedmont Triad Table 1: Renewable Portfolio Standards in North Carolina... 5 Table 2: Energy Efficiency & Clean Energy Development Opportunities in the Southeast... 7 Table 3: Piedmont Triad Rankings Table 4: Piedmont Triad Renewable Energy Systems... 26

7 Planning for the Energy Future IN NORTH CAROLINA S PIEDMONT TRIAD REGION INTRODUCTION The total population of the Piedmont Triad will grow from about 1.6 million in 2010 to about 1.8 million in 2025, then to about 2.0 million in With this unprecedented growth will come 80,000 new households by 2025 and about 14,000 by 2040 and nonresidential work space will need to accommodate 350,000 new jobs (Nelson 2012, 1). The Piedmont Triad region is uniquely situated to be both a logistical hub for the distribution of renewable energy and energy efficiency technologies, as well as ensuring the energy needs of the growing population are met in a way that ensures a high quality of life for all residents of the Piedmont Triad. A growing number of local governments are turning to FIGURE 1: ENERGY USE & CLIMATE CHANGE renewable energy and energy efficiency as a strategy to reduce greenhouse gas emissions (GHG), improve air quality and energy security, boost the local economy and plan for a more sustainable energy future. Solar, wind, biomass, hydropower, landfill gas and other technologies reduce GHG emissions by replacing fossil fuel combustion. Renewable energy and energy efficiency strategies create jobs and open new markets for the local economy, and can help protect communities from the fluctuating prices of fossil fuels. Renewable energy and energy efficiency programs can help local governments facilitate renewable energy investments in their region (US EPA 2012). Local governments can also promote energy efficiency through programs like ENERGY STAR as well as through educational programs and encouraging behavioral change. Brownfield sites and abandoned lands which may be unfit for traditional development without expensive remediation efforts can often support renewable energy projects while many of the vacant factories and mills in the Piedmont Triad region already have the necessary infrastructure to foster production of new energy technologies. As world population and economic activity expands, so does our dependence on energy. Unprecedented demand and depletion of costly fossil-fuel reserves may eventually affect both production costs and basic economics of supply and demand. The International Energy Outlook 2013 projects world energy consumption will grow by 56 percent between 2010 and Renewable energy and nuclear power are the fastest growing sources of energy, each increasing by 2.5 percent while natural gas is the fastest growing fossil fuel and consumption increases by 1.7 percent per year. The industrial sector will continue to consume more than half of global delivered energy in 2040 and estimated carbon dioxide emissions will rise from about 31 billion metric tons in 2010 to 36 billion metric tons in 2020 and then to 45 billion metric tons in 2040, a 46%increase (EIA 2013, 1). Page 1

8 Thus far, energy production has met expanding demand without significant increases in real prices (EIA 2008). Multiple studies have examined whether this trend will continue or if production capacity of fossil fuels, particularly oil, will reach a peak or level off (Wood, J. H. et al. 2004). The United States accounts for approximately 19 percent of global energy consumption, more than any other single country (EIA 2013). Eighty-five percent of U.S. energy comes from oil, natural gas, or coal. Of these, oil and fuels derived from petroleum are the largest source, providing 40 percent of energy consumed. Oil and petroleum-based fuels are used primarily for transportation and industrial uses while coal is used to generate electricity. Natural gas is more versatile and can be used for generating electricity, many industrial purposes, and space and water heating. Nuclear energy, hydropower, solar and wind energy are used primarily for generating electricity and biomass is used or processed for heating, electricity, and transportation fuel purposes (Shuford et al. 2010, 7). While the focus of this paper is on energy, it is important to note that climate change and energy issues are interrelated. In the Piedmont Triad, climate change is expected to cause more extreme heat, more intense hurricanes, and changing precipitation patterns causing more drought and heavy rainfalls (Woodruff, Sierra C., et al. 2013). These conditions along with higher occurrences of wildfires and other natural disasters may put an undue strain on our current energy infrastructure. This report illustrates the pros and cons of the current energy landscape, as well as describing viable options for expanding our dependence on alternative energy. As a region, our choices will shape how our energy needs are met. Rapidly changing technology is present in both our private firms and in our educational systems and has the potential to help rebuild our region as we recover from declining furniture, textile and tobacco industries. The largest provider, Duke Energy, recognizes the increasingly important role renewable energy plays in our future. Working with Duke Energy and other providers as they continue to make investments in hydropower, wind, solar, biopower, and captured methane from landfills, is perhaps, the most obvious choice for decreasing our reliance on fossil fuels. There is also tremendous potential within the local economy to support the production of liquid biofuels, expand the use of geothermal heating and cooling systems, recover and reuse landfill gas from municipal solid waste landfills, and invest more in solar thermal technologies for businesses and residences. As a region, we can most FIGURE 2: COUNTY POPULATION AND DESIGNATION successfully prepare for the future by educating consumers and providing options regarding where and how they consume energy for jobs, housing, and transportation. EXISTING ENERGY LANDSCAPE While the majority of our energy is produced through coal and nuclear facilities and is provided primarily by the investor owned utility Duke Energy, the State has the potential to greatly expand our capacity to utilize wind, solar and other forms of energy. Traditional and emergent technologies benefit economically not only those areas in North Carolina most situated to the particular Page 2 Source: U.S. Census Bureau

9 demands of each technology, but in the regions where the firms, universities, nonprofits, and government organizations are researching, developing and leading manufacturing efforts in all aspects of these innovative technologies. Opportunities and implementation strategies exist across all twelve counties, however they differ significantly in urban and rural areas (see Figure 2). The Piedmont Triad is also home to a significant number of clean energy firms, including energy efficient builders, solar, biomass, and emergent technology firms focusing on energy storage. Service Providers Energy in North Carolina is a regulated industry in which each utility is responsible for providing services to a unique customer base. There are three types of service providers, electric membership cooperatives (EMCs), investor owned utilities (IOUs), and municipal owned utilities (see Figure 3). IOUs account for nearly 75 percent of electric sales in the State (NC Sustainable Energy Association 2011). While North Carolina utilities have expanded energy efficiency programs in recent years, their performance and level of investment remain below the national average (ACEEE 2013). In 2011, Duke Energy and Progress Energy merged to create the new Duke Energy, the nation s largest utility (ACEEE 2013). Prior to their merger the two utilities accounted for 71 percent of electric sales in 2009 and have an impressive presence in rural communities, selling electricity in 95 counties and serving nearly 77 percent of residential customers in rural counties. Of the three service providers, residential and commercial consumers served by EMCs and municipal owned utilities have annual expenses significantly higher than those served by IOUs (NC Sustainable Energy Association 2011, 5-6). EMCs are nonprofit cooperatives, primarily serving residential customers and constituting 13 percent of all retail electric sales. Municipal owned utilities are the most abundant, but serve the smallest percentages of customers, accounting for only 12 percent of electric sales. However, municipal owned utilities serve more energy intensive commercial and industrial customers, resulting in sales comparable to EMCs (NC Sustainable Energy Association 2011, 5-6). In the Piedmont Triad, High Point and Lexington both house their own electric utilities. The City of High Point Electric Utilities Department was founded in 1893 and was one of the first cities in the country to be certified by the American Public Power Association as a Reliable Public Power Provider. The Utility serves over 40,000 customers in the City (City of High Point 2013). Lexington Utilities is a municipally owned and operated public utility system housing electric, natural gas and water resources, providing services since 1904 to over 18,000 customers in Davidson County (City FIGURE 3: ELECTRICITY PROVIDERS IN NC Source: 2011 NC Clean Energy Data Page 3

10 of Lexington 2013). Both EMCs are members of ElectriCities, a non-profit government service organization representing cities, towns and universities that distribute energy. Duke Energy supplies 96 percent of utility-generated electricity, primarily through coal and nuclear facilities (see Figure 4). Interestingly, over 60 percent of the coal capacity is located in rural counties while a similar amount of nuclear capacity lies in the urbanized counties of Wake and Mecklenburg. Most EMCs and municipal owned utilities do not own and operate generating facilities, instead purchasing wholesale electricity through third party organizations which can constrain individual electric utilities ability to use renewable energy (NC Sustainable Energy Association 2011, 6). Clean Energy Policy There are various policies that support renewable energy development and energy efficiency. The most common state-level policies supporting renewable energy development in the southeast are personal and corporate tax incentives and loans, FIGURE 4: PIEDMONT TRIAD POWER PLANTS however, built in limitations reduce their effectiveness in stimulating development. In particular, raising the cap on participation and increasing installation and size limits would encourage further participation. North Carolina policies support efficiency improvements through a variety of energy efficiency incentives and regulations, including: Sales tax incentives Rebates Grants & loans Energy standards for public buildings Residential and commercial building codes that meets or exceeds 2006 (International Energy Efficiency Code) IECC Page 4

11 TABLE 1: RENEWABLE PORTFOLIO STANDARDS IN NORTH CAROLINA Renewable Portfolio Standards in North Carolina Final Rules Adopted February 2008 Investor-Owned Utilities 12.5% by 2021 Standard Municipal and Cooperative Utilities 10% by : 0.02% from solar : 3% Interim Standards 2015: 6% 2018: 10% 2021: 12.5% Solar Water Heat, Solar Space Heat Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Eligible Technologies Geothermal Electric, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Small Hydroelectric (up to 10MW), Tidal Energy, Wave Energy Efficiency Eligible Yes Solar: 0.2% by 2018 Technology Set-asides Swine Waste 0.2% by 2018 Poultry Waste: 900,000 Multiplier None Credit Trading Allowed Yes REC tracking and verification Yes: North Carolina Renewable Energy Tracking System (NC-RETS) required Utilities may recover the incremental cost of renewable sources and up to $1 million in alternative Cost Recovery energy research expenditures annually from customers. The cost per customer account is capped. Source: & Southeast Regional Clean Energy Policy Analysis In August 2007, North Carolina adopted the North Carolina Renewable Energy Efficiency Portfolio Standard (REPS). In doing so, the state became the 25 th in the country and the first in the Southeast to enact such a policy. REPS policies (see Table 1) creates demand for clean energy that reduces uncertainty for investors and acts as a foundation policy on which other clean energy policies can be built (McLaren 2011, ix-x). The law requires the state s electric power providers to generate a portion of electricity through renewable energy resources and energy efficiency. Prior to its adoption, a study prepared for the NC Utilities Commission known as the La Capra Study, analyzed the costs and benefits of REPS and found that adopting the law would be roughly $500 million cheaper than using new coal and natural gas or new nuclear power. The policy was the result of nearly two years of discussion and negotiation between state legislators, NC Utilities Commission staff and about 90 stakeholder groups and others. The REPS law, found in NC General Statute , seeks to: Diversify the resources used to reliably meet the energy needs of consumers; Provide better energy security by using local energy resources; Encourage private investment in renewable energy and energy efficiency; and, Improve air quality and other benefits for energy consumers and residents (NC Sustainable Energy Association 2012, 2). The Energy Efficiency and Renewable Energy (EERE) standard required the state s IOUs to meet 12.5% of demand with renewable energy by 2021 with municipal and cooperative utilities providing 10% of electricity from renewable resources by A price cap limits cost of compliance to utilities. IOUs can currently meet a quarter of this requirement through energy efficiency measures with an increase to 40% after Page 5

12 Municipal and cooperative utilities may fully meet the requirements through energy efficiency with the exception of poultry and swine waste to energy projects and solar requirements. (McLaren 2011, 31). While the Piedmont Triad region has plenty of potential to meet solar requirements, there are no poultry or swine operations large enough to utilize biomass to energy technologies. Duke Energy reached a settlement agreement with clean energy groups that sets an annual efficiency savings target of 1 percent of retail sales starting in 2015 and a 7 percent cumulative target from 2014 to Meeting these goals will require successful development, regulatory approval and implementation of energy efficiency programs. Property Assessed Clean Energy (PACE) financing supports energy efficiency and renewable energy projects by providing up-front capital that is paid back by an assessment added to property taxes. PACE financing is tied to the property itself, not the property owner. While the implementation of PACE is currently on hold due to a conflict with Fannie Mae and Freddie Mac requirements, North Carolina has authorized certain local governments to establish energy assessment programs which, through Senate Bill 97, authorizes cities and counties to make special assessments in order to finance the instillation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to residential, commercial, industrial, or other real property (McLaren 2011, 33). North Carolina also encourages renewable energy technologies through renewable energy certificates or RECs (NC Sustainable Energy Association 2011). NC GreenPower is a nonprofit organization started in 2003 which is supported entirely by voluntary contributions from citizens and businesses across the state. What is unique about NC GreenPower is their ability to accept contributions through their utility. Utilities pass along donations in their entirety to the organization, and 75% is put back into renewable energy generation or carbon offset mitigation (NC GreenPower 2013). Decoupling policies also encourage energy efficiency policies for utilities. Decoupling is a rate adjustment mechanism that severs the link between the amount of energy a utility sells and the revenue it collects to recover the fixed costs of providing service. It basically removes the incentive for utilities to increase sales as a means of increasing revenue and FIGURE 5: DECOUPLING IN THE UNITED STATES profits while keeping utility profits steady and customers energy costs reasonable (NREL 2009). North Carolina s three major gas utilities are decoupled (see Figure 5), however current electric utilities are not decoupled and continue to employ the traditional link between sales volume and revenue (ACEEE 2013). Page 6

13 TABLE 2: ENERGY EFFICIENCY & CLEAN ENERGY DEVELOPMENT OPPORTUNITIES IN THE SOUTHEAST Energy Efficiency & Clean Energy Development Opportunities in the Southeast Barrier Opportunity Policy Support Some biomass crops compete with traditional crops, driving up prices for staples such as corn and the derivative products (e.g. pork, poultry). Land values also prohibit the growth of biomass for energy production. Biomass supply and demand market is immature. High risk for both biomass suppliers and energy developers. Utilities revenue structures provide little incentive to promote energy efficiency. Local resources are distributed. Distributed generators face barriers to entering market. Lack of public knowledge and experience with efficiency and renewable energy technologies. Lack of incentive for manufacturers to reduce energy usage of appliances. Lack of incentive for builders to reduce energy usage of buildings. The largest hydroelectric resources that are easily permitted have already been developed. High energy intensity of water heating. Grow dedicated biomass crops such as switchgrass and short-rotation woody crops. These crops can be grown on land under contract with the Conservation Reserve Program, which are already under contract to grow permanent vegetation, or on marginal lands. Reduce investment risk and support the early stages of the biomass market formation by encouraging co-tiring biomass in existing coal power plants. Separate utility revenues from sales and place a value on efficiency in the electricity market. Encourage the use of local energy resources by providing a favorable market for thirdparty power producers. Strengthen government clean energy leadership through increased demonstration of efficiency and renewable energy technologies on and in public buildings. Align the interests of manufacturers and builders with those of customers through policy updates. Develop incremental hydro resources and small hydroelectric facilities. Encourage the use of the optimal biomass production zones by biomass growers by providing biomass tax incentives, zoning for biomass, increasing farmer education regarding opportunities, and connecting farmers with investors/power producers. Include the biomass portion of co-tiring in clean energy policies. Implement policies that encourage nearterm carbon dioxide reductions. Implement carbon taxes or tradable carbon permits. Provide technical support and education to biomass suppliers and plant operators. Strengthen decoupling policy, implement integrated resource planning process that values efficiency as a resource, and establish incentives for effective utility-led efficiency programs. Implement or strengthen interconnection standards and net metering policies. Allow net metering for system sizes of 2MW and increase total program size limits. Standardize interconnection standards for all utilities. Refer to the Interstate Renewable Energy Council for model rules and standards. Set EERE requirements for state facilities. Model legislation and best practices designed to facilitate the implementation of EERE in public buildings is available from the Energy Services Coalition [ Implement energy efficiency standards on appliances and update building efficiency codes. Model state-level legislation for setting appliance efficiency standards is available from a variety of sources, including the Energy Services Coalition and the Appliance Standards Awareness Project. incentivize utilities to increase efficiency at existing dams through retrofits. Make tax credits and financing available for small hydroelectric facilities. Financial incentives (tax credits/rebates) for Reduce energy needs through increased solar water heaters and WaterSense and efficiency in water use and water heating. EnergyStar labeled appliances. Source: Southeast Regional Clean Energy Policy Analysis Page 7

14 Renewable Energy North Carolina has a variety of renewable energy resources including solar, wind, biomass, geothermal, hydroelectric, and smart grid and energy storage. The Piedmont Triad region has significant potential to utilize most of these resources with the exception of wind. While solar and biomass potential are perhaps the most promising, many communities are investing in other forms of renewable energy with positive results. Ultimately, maximizing our investment in diverse renewable energy technologies is the regions best opportunity to decrease dependence on traditional non-renewable resources. Solar Potential Solar energy has tremendous potential in North Carolina (see Figure 6), especially when coupled with the states programs and policies. Solar energy generation falls into two categories, electric and thermal. Photovoltaic or PV systems are electric systems which convert radiant energy from the sun to electricity and are typically developed at the residential or utility scale. Concentrating solar power or CSP technology collects solar radiation through use of reflective services and tracking systems and is primarily FIGURE 6: PHOTOVOLTAIC SOLAR POTENTIAL IN THE SOUTHEAST Page 8

15 FIGURE 7: DAVIDSON COUNTY SOLAR ENERGY being developed in the Southwestern United States (NC Sustainable Energy Association 2011, 7-8). Source: National Renewable Energy Laboratory Thermal energy technology captures energy from the sun in a liquid contained within a system. In a direct heading system, the liquid is water and once heated is transferred to a water heating unit and ultimately the end user. In an indirect system, a separate liquid is heated and transferred through a closed circuit and transferred from the contained liquid to the water, again generating usable hot water. Solar thermal technologies are typically used for water heating, space heating and pool heating. Solar hot-water systems are one of the most widely used and cost-effective renewable-energy technologies. Simple technology and more flexible site conditions mean solar hot-water systems can pay for themselves in fewer than 10 years. Both domestic and commercial users can benefit from solar hot-water systems (Shuford et al. 2010, 12). The Proximity Hotel in Greensboro installed 100 panels on the hotel s roof, providing 60 percent of the hotel s hot water and saving the hotel approximately $14,000 per year (Rowe 2006). While costs per kilowatt-hour of delivered energy vary widely, rapidly developing technologies are making prices for solar panels trend downwards, making solar an increasingly viable alternative-energy option (Shuford et al. 2010, 10). Installation of solar PV systems are also increasing due to federal and state incentive packages (NC Sustainable Energy Association 2013), however, high equipment costs still pose a challenge. Solar energy technology also requires a large amount of space for the greatest efficiency and even then, energy generated is intermittent (NC Sustainable Energy Association 2013). The Proximity Hotel in Greensboro installed 100 panels on the hotel s roof, providing 60 percent of the hotel s hot water and saving the hotel approximately $14,000 per year Shared renewable energy programs are also growing more popular. Community shared solar projects allow homes and businesses that are unable to install renewable energy systems on their property to pool resources and invest in more financially feasible solar projects. A NREL study (2008) found only 22-27% of residential rooftop area is suitable for hosting on-site PV system. In addition to providing options to those whose businesses or residences are structurally unsuitable, communitybased solar options allow renters, lower-income homeowners and other end-users to utilize renewable energy resources without the high costs associated with many renewable energy projects (Coughlin, Jason et.al., 2012) Page 9

16 CASE STUDY: How A Small NC Community Funded a Big Solar Project Photo: NARENCO In 2011, Gaston County became more than just an appealing commuter community to nearby Charlotte. With a population of just over 207,000, the community now boasts a 740 kilowatt solar energy system projected to generate just shy of one million kilowatt hours of electricity per year for Gaston County. Like many local governments, funding was a challenge. Gaston County looked to a third party developer that could take advantage of federal and state tax incentives for the installation of a rooftop photovoltaic system on the county s York Chester Plaza Building. A request for qualifications (RFQ) went out and qualifying companies provided detailed system specifications and the amount of roof rent the vendor would pay annually to the County for an initial 10-year lease term and a 10-year lease extension agreement. The Charlotte based National Renewable Energy Corporation (NARENCO) was selected for the project. Under the terms of the lease agreement NARENCO owns and operates the energy system. Electricity generated is sold to Duke Energy Carolinas under a separate Power Purchase Agreement (PPA) and the solar renewable energy credits (REC) are then sold to Energy United of Statesville, NC. To be competitive for this type of lease agreement, NARENCO President Dennis Richter recommends the following advice to local governments looking to lease rooftop space to solar developers in today s market: Package together rooftops that could be leased and offer them to local developers. Projects need to be large enough to attract developers. Single rooftops may not meet this requirement Understand the package a developer is looking for and make it easy for them to find the opportunity Do preliminary homework on project feasibility, including making sure rooftops are new enough and can support the weight of a solar instillation. (NC Solar Center 2012) Page 10

17 Wind Potential North Carolina s wind resources vary dramatically across the state, but can be found in both urban and rural areas. Wind energy development requires steady, consistent, and unobstructed wind resources making placement of turbines on tall towers an important criteria in wind generated electricity. Small-scale turbines have been used in the State, but the potential in the Piedmont region is marginal. Utility scale projects target regions that meet or exceed average wind speeds of five meters per second at a height of 80 meters, limiting horizontal turbine instillation to the ridgelines of the western mountains and the east coast. While scope of these projects can be immense (thousands of acres), the physical footprint of the project is generally only about two percent of the total area (NC Sustainable Energy Association 2011, 8). There are currently no offshore wind facilities in North Carolina or in the United States, however several projects are seeking regulatory approval. A state and federal task force organized by the Bureau of Ocean Energy Management, Regulation, and Enforcement is conducting an extensive analysis of potential development in federal waters. The emergence of offshore wind technology has the potential to be a significant economic driver in both coastal and inland communities and is particularly relevant as wind conditions are the most favorable along the entire East Coast (NC Sustainable Energy Association 2011, 9). Biomass Potential Biomass energy includes agricultural waste, animal waste, wood waste, spent pulping liquors, combustible residues, combustible liquids, combustible gasses, energy crops, or landfill methane (North Carolina General Statutes n.d.). Although certain areas have a competitive advantage in specific types of fuel, biomass fuels are easily found in all areas of the state. The Piedmont region specifically has access to urban waste streams including wood and municipal resources (see Figure 8) (NC Sustainable Energy Association 2011). In a statewide woody biomass assessment, the Piedmont Triad region includes approximately 2.1 million acres of timberland, with 10 million tons of pine pulpwood and 28 million tons of hardwood pulpwood potentially available to the biofuels industry (Voegele 2013). Waste can be converted into fuel through direct combustion, gasification, and digestion (NC Sustainable Energy Association 2011, 10). FIGURE 8: NC BIOMASS LAND COVER Source: US Geological Survey National Land Cover Dataset 2001, NC Sustainable Energy Association Page 11

18 Biofuels are produced in different ways and each has varying social, economic and environmental impacts. Starch based ethanol is derived from the starches and sugars in the fruits and seeds of plants. Ninety-five percent of starch-based ethanol in the US is produced from corn which has been criticized as a relatively inefficient fuel source. Corn also sequesters very little carbon and uses large amounts of fertilizer, causing algal blooms which can deplete the water of oxygen making it hard for fish and other aquatic organisms to survive. Heavy pesticide and herbicide use can also negatively impact water quality conditions. It may also contribute to rising food prices as the acreage needed to meet demand for ethanol has displaced other food crops. Overall, corn requires significant amounts of energy, water, and fertilizer to grow and has a relatively low net-energy ratio which is a comparison of the nonrenewable energy put into production. While corn-based ethanol is a clean-burning biofuel, its use as an alternative energy source may be questionable when all environmental impacts are taken under consideration (Shuford et al. 2010, 14-15). Cellulostic ethanol production on the other hand, is less detrimental to the environment, requiring fewer chemicals and less energy. Fuels from agriculture and forestry operations, perennial crops like switchgrass and miscanthus, trees and shrubs are all viable sources. If managed properly, plants with extensive root systems can sequester large amounts of carbon, provide habitat, filter rainwater, and require little or no fertilization to produce biomass. Unfortunately, cellulostic ethnol is not cost-competitive, however, the US Department of Energy is investing in six biorefinery facilities which are expected to produce more than 130 million gallons cellulostic ethnol per year making it cost-competitive with gasoline prices (Shuford et al. 2010, 15). Cellulostic ethanol production has the potential to protect the environment, improve public health, and provide tremendous economic benefits to the region. Biodiesel is produced from biological-based oils. While most biodiesel is made from soybean, canola, sunflower and recycled cooking oils, animal fats are also used. Biodiesel production can have many of the same impacts ethanol production does but also has more variance in the net-energy ratio depending on how it is produced. Research is also being conducted to assess whether algae is viable as an alternative energy crop. Algae are extremely fast growing microscopic organisms. Preliminary studies have determined algae can produce far more biodiesel per acre of land used than any other terrestrial crop (Shuford et al. 2010, 15). Geothermal Potential Geothermal energy is derived from hot water found in deep geologic formations. While North Carolina does not have adequate geological structures to allow industrial scale operations, the use of geothermal heat-exchange systems or ground-source heat pumps can be used almost everywhere at a residential scale. In winter, heat from the relatively warmer ground is transferred into the house, while hot air is pulled from the house in the warmer months. Geothermal energy can also be used to heat water (Shuford et al. 2010, 14). Hydroelectric Potential Hydroelectricity is deeply rooted in North Carolina history. Hydroelectricity is generated when water turns a wheel which is tied to a generator. In North Carolina, most hydropower is generated by hydroelectric dams and can be characterized by scale into large (greater than 30 megawatts), small (100 kilowatts to 30 megawatts) and micro (less than 100 kilowatts) (Shuford et al. 2010, 13). While the larger systems (exceeding 100 megawatts) are found exclusively in the western part of the state, there are many smaller, micro-hydroelectric operations involving systems less than 10 kilowatts in capacity in the central Page 12

19 and eastern regions (NC Sustainable Energy Association 2011, 11). These systems are capable of meeting the electricity needs of a building or sometimes a complex of buildings and may not require the construction of a dam or impoundment (Shuford et al. 2010, 13). A major benefit of this type of generation is that electricity can be dispatched within a few minutes. While the Piedmont region is rich in water resources, there is little potential to build additional hydroelectric facilities. There are, however, many opportunities and a need to improve existing facilities (NC Sustainable Energy Association 2011, 11). While hydroelectric power is a clean, renewable energy alternative to fossil fuel derived electricity, it does however, require the construction of large dams, destroying habitat and changing the hydrology of an area. The dams along the rivers of the Piedmont Triad often result in shallow lakes which can cause water temperatures to rise. In conjunction with nutrient pollution from stormwater runoff, many of these lakes have low levels of dissolved oxygen making FIGURE 9: OAKDALE MANUFACTURING CO., RANDOLPH COUNTY it challenging for fish and other aquatic organisms to survive. The change in hydrology also interrupts fish migration patterns and impacts upstream and downstream ecosystems. Hydroelectric energy is also highly subject to weather conditions and drought-prone areas which may result in decreased or suspend energy production (Shuford et al. 2010, 13). Recaptured Methane Gas Potential As solid waste decomposes in landfills, a gas is emitted that is approximately 50% Source: methane (CH4) and 50% carbon dioxide (CO 2), both of which are greenhouse gases but provide valuable, clean burning energy when captured (see Figure 10). Landfill gas (LFG) from municipal solid waste landfills is the largest source of human-related methane emissions in the US, accounting for approximately 34% of these emissions (NC Solar Center 2013). However, methane has a relatively short atmospheric life meaning that LFG recovery projects offer significant opportunity to mitigate atmospheric concentrations of methane in the near future (US EPA 2012). LFG energy projects can generate additional revenue for local governments. Depending on who owns the rights to the LFG and other factors, a local government may also generate revenue by selling renewable energy certificates (RECs), trading GHG emissions offsets, and providing other incentives (US EPA 2012). In the Piedmont Triad, there are six operational landfills utilizing LFG including: the City of Greensboro Landfill, City of Winston-Salem Landfill, Davidson County Landfill, Surry County Landfill, Rockingham County Landfill, and the Piedmont Sanitary Landfill located in Kernersville. Page 13

20 Reducing methane emissions from landfills by encouraging the recovery and use of LFG can fuel power plants, manufacturing facilities, vehicles, homes, and more. LFG prices are more consistent than fossil fuels and methane collected from LFG provides valuable, clean burning energy that improves quality of life and can generate revenue. Figure 11 identifies LFG energy project opportunities in the Piedmont Triad. There are currently six operational sites, five candidate sites and seven potential sites. EPA s Landfill Methane Outreach Program (LMOP) defines a candidate landfill as one that is accepting waste or has been closed for five years or less, has at least one million tons of waste, and does not have an operational or under-construction project. A potential landfill may lack the necessary data to meet the candidate definition, or could have LFG energy project potential based on site-specific needs (US EPA 2013) FIGURE 10: APPROXIMATE LANDFILL GAS COMPOSITION Source: NC Solar Center FIGURE 11: PIEDMONT TRIAD LGF PROJECT OPPORTUNITIES Page 14

21 Smart Grid & Energy Storage Potential Smart grid and storage technology is a rapidly growing trend referring to the modernization of the electric grid by using new technologies, tools, and techniques to more efficiently transmit energy. While not a renewable resource, smart grid and energy storage technologies would allow electricity from variable resources including solar and wind, to be managed with much greater certainty (NC Sustainable Energy Association 2011, 12). Renewable Energy from Contaminated Lands Accidents, spills, leaks, and improper disposal and handling of hazardous materials and wastes have resulted in tens of thousands of acres of contaminated lands across the United States. These lands are costly to clean up and can threaten human health and the environment, and potentially hamper economic growth and the vitality of our communities. The US EPA s RE-Powering America s Land Initiative encourages renewable energy development on potentially contaminated land and mine sites, in accordance with the community s FIGURE 12: PTRC IDENTIFIED BROWNFIELD SITES Source: Page 15

22 vision for the site (US EPA 2011). The Office of Solid Waste and Energy Response s Center for Program Analysis tracks sites across the United States and partners with states and local communities to address contamination and decide how lands can be meaningfully reused. A detailed feasibility study provides technology and financing recommendations, identifies all physical issues, determines technical performance potential and economic viability, and identifies environmental, social or other constraints that may impede project execution. The Piedmont Triad has the opportunity to turn contaminated properties into sites for renewable energy generation (US EPA 2013). Data from the US EPA s Re-Powering America s Land (US EPA 2013) estimates 73 potentially contaminated sites in the Piedmont Triad that may be suitable for generating renewable energy. These sites include Superfund, Resource Conservation and Recovery Act (RCRA), Brownfields, and abandoned mine lands. These lands are environmentally and economically beneficial for siting renewable energy facilities because they: Offer thousands of acres of land with few site owners; Often have critical infrastructure in place including electric transmission lines, roads and water onsite, and are adequately zoned for such development; Provide an economically viable reuse for sites with significant cleanup costs or low real estate development demand; Take the stress off undeveloped lands for construction of new energy facilities, preserving the land carbon sink; and Provide job opportunities in urban and rural communities (US EPA 2013) Developing renewable energy while addressing environmental issues may also provide revenue to help cover cleanup costs or offset costs of long-term operation and maintenance of cleanup remedies. Various funding mechanisms have been successfully employed, and are dictated by potential project scale, site owner, market conditions, and the renewable energy developer. There are also more than two dozen federal programs that support brownfields redevelopment as well as various federal and state programs and tax incentives that can improve feasibility of implementing projects. The Comprehensive Environmental Response Compensation and Liability Act (CERCLA) contains a secured creditor exemption that eliminates federal owner/operator liability for lenders who hold ownership in a CERCLA facility (US EPA 2013). The North Carolina Brownfields Program is also authorized by a state statute known as the Brownfields Property Reuse Act to provide protections and incentives to developers who did not cause or contribute to the contamination of the property (NC DENR 2013). The Piedmont Triad Regional Council has worked with communities in the Piedmont Triad to further identify brownfield sites that may be suitable for a number of reuse purposes including alternative energy generation or technology centers (see Figure 12) Page 16

23 CASE STUDY: BMW Spartanburg Landfill Imagine the energy needed to drive a car around the globe 4,300 times - over 100 million miles. That's how much energy we save each year by using methane gas from the local landfill at our Spartanburg plant instead of natural gas. As a result, the atmosphere is spared thousands of tons of greenhouse gases - 17,000 tons to be exact. Ever since we started construction on our Spartanburg plant in 1993, our plan consisted of the efficient cogeneration of electricity and hot water. Specifically, our plan called for building a 9.5-mile pipeline from the Palmetto Landfill to our facility where we build the BMW Z4 and the BMW X5. The recycled methane gas that we get as a result of this pipeline not only provides energy for 50% of the plant's total energy, but it also helps us reduce energy costs. While we're proud of our energy savings at Spartanburg, we know they're just part of the larger picture. BMW's global production network has reduced CO2 emissions by 30% in the last 10 years, for example, and we continue making inroads in such important places as hydrogen technology. We believe in doing things differently at BMW, and we believe that includes committing to sustainable business practices. And, as an independent company, we have the power of putting our money where our mouth is in order to share our beliefs with the world. (BMW 2013) Page 17

24 ENERGY EFFICIENCY Energy efficiency projects can significantly reduce energy consumption in residential, commercial, industrial and transportation sectors. The economic impacts from these projects are significant. Making greater investments in energy efficiency is a win-win strategy to meet the state s growing electricity, water, and transportation needs while lowering energy bills and creating jobs. While the state and region are well positioned to lead the way in energy efficiency policy and technology, strong leadership and investments are needed to if we hope to see a significant impact on the local and regional economy (Eldridge, M. et al. 2013, viii-ix). While the need to address electricity demand is clear, water and transportation inefficiencies represent a pressing economic threat to the state and the region. The Piedmont Triad region is considered rich in water resources, however, the growing population will use more water, require more energy, and derive more food and fuel from water dependent agricultural practices. Likewise, our current transportation infrastructure is becoming overburdened in the regions economic corridor (Eldridge, M. et al. 2013, 2). Residential Home energy is a crippling financial burden for low-income residents in the Piedmont Triad. Households with incomes of below 50% of the Federal Poverty Level pay an average of 35% of their annual income (see Figure 13) for home energy (Fisher, Sheehan & Colton 2013). The majority of opportunities to increase energy efficiency exist in homes built prior to 1975, and in manufactured homes. Prior to 1975, the NC Building Code did not require insulation and homes built during this period are unlikely to be insulated. FIGURE 13: PIEDMONT TRIAD HOME ENERGY AFFORDABILITY GAP 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Piedmont Triad Home Energy Affordability Gap 2012 The Piedmont Triad has the second largest population of homes built prior to 1970 and presents major opportunities for energy retrofitting. ~2011 NC Clean Energy Data Book According to U.S. Census Bureau data, counties with the majority of homes built prior to 1970 occur mostly in rural, economically disadvantaged communities. In addition to older homes, manufactured homes are estimated to consume 67 percent more energy per square foot than single-family detached homes. While residents in these demographics may find costly energy efficiency improvements challenging, the potential long-term savings are enormous. (NC Sustainable Energy Association 2011, 13-14). Page 18 Source: Approximately 35 percent of the housing stock in the Piedmont Triad was built prior to 1970, making the residential

25 FIGURE 14: RESIDENTIAL ENERGY EFFICIENCY energy efficiency a significant opportunity for the region. Of these, over half of these homes are concentrated in Guilford and Forsyth counties (see Figure 14). These counties have higher concentrations of multiple housing units (83 percent). While not comparable to many other regions around the state, there is significant opportunity to invest in improving energy efficiency in mobile home units, particularly in the rural counties of Stokes, Caswell, and Montgomery which have a high ratio of manufactured housing (NC Sustainable Energy Association 2011, 51). Local Government Local governments can utilize a wide range of techniques to promote energy efficiency, both in their own operations and in their communities. Opportunities include efficiency measures in operations and facilities, water and wastewater facilities, incentive programs for non-governmental buildings and residences and partnerships with utilities and other major players in the energy sector. Local governments are also unique in their ability to demonstrate energy and environmental leadership, and raise public awareness and introduce the benefits associated with reducing GHG emissions (US EPA 2014). There are a variety of tools available to help local government implement energy efficiency measures. The American Council for an Energy-Efficient Economy (ACEEE) has many of these available on their website at Examples include: The Local Energy Efficiency Self-Scoring Tool Local Policy Case Studies Local Energy Efficiency Policy Calculator Local Technical Assistance Toolkit The Multifamily Energy Savings Project. Commercial Source: 2011 NC Clean Energy Data Book Energy consumption in the commercial sector is projected to increase more rapidly than in any other sector. Electricity and related losses represent more than 80% of primary energy consumption and natural gas accounts for another 11%. Studies indicate cost-effective efficiency improvements could achieve a 29% reduction by The South uses a proportionately higher percentage of electricity in commercial facilities than the rest of the country and presents tremendous opportunity for increasing energy efficiency projects. One of the most significant barriers to cutting energy costs and curbing emissions in the commercial sector is the underinvestment of upfront energy efficiency technologies. A market structure overemphasizing initial costs means long-term costs for owners and occupants are higher (Brown, Marilyn A., et. al. 2010). Page 19