Sustainable Energy Strategies for Clean Air in North Carolina Larry Shirley State Energy Office NC Department of Administration 1
State Energy Office 4Advancing energy efficiency in industrial, utility, transportation, government, and residential sectors. 4Developing the state s abundant renewable energy resources. 4Accelerating use of alternative fuels and vehicles. 4Responding to energy emergencies. 2
Energy Supply - Cost Outlook 1.6 1.4 Growth compared to 2001 1.2 1 0.8 Total Energy Total Trans. Energy Population 0.6 1990 1995 2000 2005 2010 2015 2020 Year 3 Source: EIA
4 US Petroleum Production vs. Imports
Katrina and Rita 429% of Refinery Capacity Brought Down 466% of Gulf oil production shut-in 454% of Gulf natural gas production out 416 Natural Gas processing plants down 4Impacts will spill over to economy 4NC vulnerable: reliant on two pipelines with little storage 5
Cost of Energy Imports $10-15 Billion Wood, Waste, Biomass 96 TBtu Petroleum 975 TBtu Natural Gas 236 TBtu 10 TBtu Coal 706 TBtu Electrical Losses 734 TBtu Nuclear 408 TBtu 6 TBtu 696 408 TBtu TBtu 969 TBtu 226 TBtu ELECTRIC POWER GENERATION Electricity leaves our economy for 409 TBtu 10 TBtu 23 Solar TBtu Thermal 1 TBtu Hydro 33 TBtu 10 TBtu $10-$15 billion per year energy fuel imports Energy Flows In North Carolina 6 SO 2 NO x 47 tons CO 312 tons 2 69 million tons CO 2 57 million tons NO x 319 tons SO 2 636 tons
Shining Rock - Mt. Pisgah Vista Class 1 Wilderness Shining Rock - Cold Mtn. Vista Class 1 Wilderness SAMI Linville Gorge Class 1 Wilderness Joyce Kilmer Slickrock Class 1 Wilderness 7
8 Ozone Nonattainment Areas
Air Pollution s Impact on Health in North Carolina EPA studies show: 1/3 to 1/2 asthma in NC due to air pollution Every summer in NC, air pollution causes: 240,000 asthma attacks 6,300 emergency room visits 1,900 hospital admissions 9 (Source: Clay Ballentine, M.D., Asheville, NC)
10 Sea Level Rise: Climate Change Ben Poulter, Duke University; Sam Pearsall, The Nature Conservancy
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12 Energy efficiency s contribution to our energy supply 160 National Energy Supply (TBtus) 140 120 100 Efficiency s Contribution 80 60 40 Actual Energy Use 20 Source: Alliance to Save Energy, 2002. 0 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
America s Greatest Energy Resource America's Greatest Energy Resource Energy Efficiency and Conservation Improvements Since 1973 Have Reduced Annual Consumption by 43 Quads Energy Efficiency and Conservation Petroleum Natural Gas Coal Nuclear Electric Power Wood, Waste, Alcohol Conventional Hydroelectric Geothermal Solar and Wind 2.9 2.7 0.3 0.2 8.2 23.1 22.5 43.5 40.6 Alliance to Save Energy January 2006 0 10 20 30 40 50 Quads (2004) Domestic Production Net Imports 13
1,400,000 Total Savings (TBtu 15% Reduction) 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Residential Savings Commercial Savings Industrial Savings Residential Commercial Industrial 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 14
Energy Management Program Results 1988 to 2005 4800 surveys completed 475.9 MW saved 4$40.4 million annual cost savings 4$38.7 million initial investment 411,466 Workshop Attendees in 511 Workshops $355 million Total Economic Benefit recommended/$160 million implemented 15
Utility Savings Initiative (USI) 4 Comprehensive energy management program for all state facilities. 4 Goal is to reduce energy consumption by 20% by 2008 4 100+ million square feet state-owned property; 4 million square feet leased 4 State s Energy and Water Bill: $275 M in 2004-05 4 Total Avoided Costs 2002-03 to 2004-05: $22 Million 16
Upgrade and Save Program for Manufactured Housing 4 Upgrade from electric furnace to high efficiency heat pump 4 17-county region in Eastern NC 4 Managed by East Carolina University 4 Energy Costs can be $400/month/winter 4 Savings of $350-700/winter 4 Cost of $500/home 4 Payback is 1-2 years 17
Why Renewable Energy? 4High Technology Growth Industries» PV, Wind and Fuel Cells combined growth from 2005 2014 of nearly 23% annually» Combined market is doubling about every 3 years, projected at $167 billion in 2015 4Demand Routinely Outstrips Supply» SOLD OUT - N. American Wind manufacturers in 2005 sold-out available capacity 18
Renewable Energy Cost Trends Levelized cents/kwh in constant $2000 1 COE cents/kwh 40 30 Wind 20 10 0 1980 1990 2000 2010 2020 100 80 PV 60 40 20 0 1980 1990 2000 2010 2020 COE cents/kwh 10 70 15 Geothermal Solar thermal 60 8 12 50 Biomass 6 40 9 30 4 6 20 2 3 10 0 0 0 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2002.ppt) 1 These graphs are reflections of historical cost trends NOT precise annual historical data. Updated: October 2002 19
NC Renewable Energy Tax Credits 435% for Renewable Energy Applications 4Up to $2.5 million/application for industrial and commercial 4Up to $10,500 for consumers 4Can be stacked on federal credits 425% credit for manufacturing plants» Does not include fuel cells or hydrogen technology 20
Wind Power Benefits 1.5 mw turbine 4 5 million kwh/yr 4 500 homes 4 $500,000/yr green power, keeps $ in NC 4 Saves 7.5 million lbs CO2 4 2 nd or 3 rd crop for farmers 4 Quiet, no water use, small footprint, no emissions 4 2,500+ MW potential in NC 21
22 Wind Power at 50 meters
Landfill Methane Buildings, greenhouses, glassblowing and ceramics kiln heated by landfill methane gas. 23 Regional Conservation District, Cultural Resources, EPA, USDA, Foundations, Community College
Alternative Fuels 4Ethanol: 4,600 state vehicles/e-85 4E-10 useable by anyone/mtbe Ban 4Biodiesel: Soybean/Canola or Waste Oil 420% blend can be used by everyone 4State must cut petroleum use by 20% by 2010 4Clean Cities Programs 24
Biofuels Potential Ethanol Production Capacity Ethanol Production Capacity Capacity Under Construction million gallons per year 6000 5000 4000 3000 2000 1000 0 Jan-99 Capacity under construction equals 33% of existing capacity Jan-00 Jan-01 Jan-02 Jan-03 Renewable Fuels Association Industry Statistics http://www.ethanolrfa.org Jan-04 Jan-05 present 25
For North Carolina, this could be a ~$1 billion opportunity 4North Carolina could produce 30-36 million barrels/year (1.2-1.5 billion gallons/year) of ethanol from forestry wastes, mill residues, agricultural residues, CRP/other acreage, and conversion of tobacco lands using current technology» State of the art technology could increase this to ~58 million bbl/y (2.4 billion gallons/year 4The economic value is significant» Ethanol Fuel Value @ $1.50/gallon: $1.8+ Billion/year» Annual crop value paid to farmers: $131 - $263 Million/year» Annual value paid to the forestry sector: $130 Million/year» In addition, farmers could get $14 - $70 Million/year in carbon credits (@10-50 $/ton)» If 36 new 40-million gallon/year ethanol plants were sited in NC, the economic multiplier benefit would provide a one time $5 billion boost, and nearly 1,000 direct jobs 26
27 Where is NC s biomass?
Electric Power Production 4 Hog waste..79 MW 4 Poultry litter.111 MW 4 Crop residue 216 MW 4 Urban, mill, & forest residue..900 MW 4 Energy crops..356 MW 4 Landfill gas..116 MW 4 Total generating capacity.1,779 MW 4 Tons of coal displaced 4,321,813 4 Value of coal displaced/year..$112,367,151 28
Biodiesel 4NC uses more than 1 billion gallons of diesel fuel annually 45% blend of biodiesel=29 million bushels of soybeans 41 million acres soybeans» or 300,000 acres of rapeseed» or a combination of; waste vegetable oil, rendered animal fats, and refined vegetable oil 4 15% less particulates, 10% less CO, 10% less hydrocarbons 29
State Competition 4 Jan. 11, 2006» PA Gov. Rendell announced $8.5 million investment in 25 renewable energy projects» Expected job creation 1,000 with 238 perm. jobs» Landed Spanish wind company with 400 jobs 4 Jan. 12, 2006» NY Gov. Pataki proposed a statewide tax-free zone for renewable energy companies and making renewable fuels available across the state 30
Pending Legislation 4 S402/H454 Water and Utilities Savings in Government Facilities» Performance contracting conservation measures» Raises debt ceiling 4 S190/H445 Income Tax Credit Energy Efficient Homes» Energy Star Home: $500 new, $1000 updated» HealthlyBuilt Home: $1500 new, $2000 existing 4 H1369 Expand Renewable Energy Tax Credit» Establishes manufacturing incentive for makers of fuel cell & hydrogen equipment 31
Pending Legislation 4S1015/H1766 Alternative Fuel Tax Credit ($2,000 for hybrids & AFVs) 4S11150/H1296 Renewable Fuels Motor Fuels Tax Exemption (exempts biofuels from state motor fuel excise tax) 4S1038 Mobile Source Emissions Reduction Program (AFV Fund) 4S1006 Low Emission Vehicles 32
Recommendations 4 Carefully consider pending state legislation 4 Lead by Example: Local and State Governments should be the model 4 Community Energy Plan: establish Energy Efficiency and Renewable Energy Goals 4 Weatherize Nonprofit Agencies & Schools 4 New Buildings = Green Buildings 4 Alternative Fuels and Hybrids for Fleets 4 Food Lion and Catawba College: catalysts 33
34 NC Sustainable Energy Conference Deputy Secretary of Department of Administration Carlton Myrick; Jim Parker, NCSU, Industrial Extension Service; Larry Shirley, State Energy Office March 29, 2006 Multiple tracks Transportation Efficiency Sustainability Buildings Energy Champions Speakers include: James Woolsley, Ray Anderson & Dr. William Schlesinger www.energync.net
For More Information 4State Energy Office 41830A Tillery Place 4Raleigh, NC 27604 4919-733-2230 4800-662-7131 (NC only) 4919-733-2953 (fax) 4www.energync.net 4Larry.Shirley@ncmail.net 35