The cost of oil and natural gas is rising. Coal is dirty. Output from hydroelectric is limited by environmental constraints. So builders, manufacturers, utilities and homeowners across Oregon are investing in renewable power. But many other states are ahead in the race to an alternative energy future.

Participants:

CYLVIA HAYES
Manager, Business Alliance for a Sustainable Economy (BASE)
Executive director, 3E Strategies
Bend

JOHN REYNOLDS
Professor emeritus, University of Oregon School of Architecture
President, Solar Energy Association of Oregon
Eugene

BART RICKETTS
General manager, Lease Crutcher Lewis, LLC
Portland

PETER WEST
Director of renewable resources, Energy Trust of Oregon
Portland

VIRINDER SINGH
Environmental policy analyst, PacifiCorp
Portland

OREGON BUSINESS: First, let's define our terms. There's confusion about "renewable," "alternative," and "green." Is there any real difference?

JOHN REYNOLDS: Alternative energy is a catch-all phrase and it's not very specific. Renewable means what it says: The energy source is going to keep going.

CYLVIA HAYES: We wrestled at BASE [Business Alliance for a Sustainable Economy] with the term "clean energy." But we decided to use the term "sustainable energy" in the end. Renewable energy is only one aspect of sustainable energy, which includes the whole component of conservation technologies. When I think about Oregon becoming a leader in the sustainable energy scene, it's in both renewable energy and energy efficiency development.

How about green building? Is that the same as sustainable building? Is it the same as LEED [Leadership in Energy and Environmental Design] certification?

BART RICKETTS: You don't have to be LEED-certified to have a green or sustainable construction project. It comes down to minimizing resources, minimizing energy use, developing a building that's healthy from the standpoint of indoor air quality and recycled content. If you're LEED, you're green. But you can be green without being LEED.

HAYES: And LEED only refers to commercial buildings. We define green building as energy efficient, resource efficient, and healthy indoor air quality — whether that's commercial or residential.

Of the LEED-certified buildings in Oregon, which would you point to as truly world-class architecture — quite apart from what they achieve in terms of energy and environmental impacts?

REYNOLDS: The Lillis Business Complex at the University of Oregon [built by Lease Crutcher Lewis] is a very attractive building, with a wonderful rotunda, natural ventilation and daylighting, photovoltaics [solar panels] on the roof and along the south facade, even though that's partially shaded by a tree.

RICKETTS: We wanted to cut it down.

REYNOLDS: Not on that campus, you don't.

We've been hearing a lot about the potential for distributed generation, in which power is generated close to its end use — whether that's a pulp plant burning wood waste to generate electricity or a dam on a creek powering nearby farm buildings. Is this a form of renewable energy, or is it just a different way of organizing the grid?

VIRINDER SINGH: It's the latter. Instead of large power plants connected by transmission wires to homes and businesses, this is power generation right next to the home or business. Distributed generation can capture electricity from everything from diesel generators to natural gas-powered microturbines to fuel cells to solar panels. So, are diesel generators sustainable, as opposed to a small wind or solar system? I'm sure there'll be vigorous debate on that question.

And is distributed generation more efficient than the grid?

PETER WEST: A diesel generator is not more efficient than getting power from the Bonneville Dam, and it's certainly far more environmentally destructive. However, it's the cheapest way to buy backup power if the grid goes down. So you would put it in a hospital or a credit card company, where losing the data costs millions of dollars.

Where is Oregon right now in terms of renewable energy generation?

WEST: About 45% of our power comes from fossil fuels — mostly natural gas and coal — and nuclear. Large hydro projects generate about half our power, but for many in the environmental community, that's not counted with renewables. About 2% to 3% of our power comes from nonhydro renewables. The biggest chunk is biomass, where lumber mills and pulp and paper plants are taking their byproduct, burning it and generating electricity. The fastest- growing renewable in Oregon right now is solar. In the last two years, it's increased 400%. The second-fastest growing is large wind facilities.

SINGH: Keep in mind, "fast growing" means a small base that's growing quickly.

WEST: Oregon isn't in the top five for its wind resource — North Dakota and Wyoming rate higher. So we've really stepped forward in utilizing what we have available. In fact, PGE just signed a deal to develop a 75-MW wind farm outside Wasco. And PacifiCorp is looking at possibly two wind farms.

What are the practical limitations to wind at this point?

SINGH: There's still a lot of speculation about the possible total penetration of wind that would be acceptable to the grid. A figure of 20% has been thrown around. In Spain, Northern Germany and Denmark they've probably tested the limits. That has to do with wind's variability: You have to accommodate a resource that goes on and off, blows higher and lower, based on wind patterns. Then you have to manage your other resources, such as hydro or coal, accordingly. You can't really ramp nuclear up and down to accommodate wind. If wind is varying, then you have to have other resources in a flexible state to accommodate that.

WEST: So you're basically saying that we could go from the level of wind production we have today — about 200 MW — up to 1,000 MW, in just the PGE and PacifiCorp systems, without any problems showing up? That's a long-term solution. The more immediate problem, though, is that we have to get the power to market, and transmission is constrained in the Northwest.

SINGH: You're right. And there are barriers to expanding transmission from the perspective of who pays. There are some great ideas for wind farms in regions where there aren't transmission lines yet. Can we get lines installed in an expedited manner to get that power into the market? You've got to deal with all the landowners and counties along the way. It's a challenge.

PacifiCorp and PGE are both planning new natural gas-fired power plants. Why is this more attractive than new wind farms?

SINGH: Natural gas has been a bit more flexible for us. With wind, there's no commercial storage technology available — you've got to put the wind plant where the wind is. With natural gas, there's a pipeline system and there's more flexibility in putting the plant in a place that makes sense. The trick is that the nation is facing gas prices that are creeping up and are volatile. It makes sense as part of a balanced portfolio. We have coal, gas, hydro; we want to get more nonhydro renewables in the system.

What about putting windmills in places where the wind does blow all the time — for instance, off the Oregon Coast. Is that pie in the sky? They're doing it in Europe, in the North Sea, after all.

WEST: In Europe they have a continental shelf. You go 10 miles off the Oregon Coast and you're a mile deep. And we also have a much more violent ocean. So we're not going to go off the coast for a long time. The way we're developing wind in Oregon is that we're putting it where it makes the most economic sense, where farmers can use it as a second crop.

REYNOLDS: I'm intrigued by using the peaks in wind power to do something other than ship electricity immediately. One of the things being talked about is to use surplus wind power to split water into hydrogen and oxygen and to ship the hydrogen [hydrogen is used to power fuel cells]. This may become particularly attractive in appropriate offshore locations where you're electrolyzing seawater rather than Columbia River water. You could have ships pulling up to fuel on the hydrogen. Looking to the future, I think that's important.

HAYES: If I had any money, I would invest in solar — it's where wind was 20 years ago, as far as competitiveness. As we get more serious with building smart buildings, solar can be a huge market. And it has potential in the Third World, too, because of its capacity to do off-grid distributed generation. I think biofuels are going to be big in the next five years, particularly in the West, where we need to deal with fuel buildups and low-value forest materials in a more cost-effective manner. The tie between generating energy and dealing with wildfire risk is going to drive some very significant developments.

Are utilities just adding renewables piecemeal at this point — for a bit of diversification and PR value? Or is there a plan here?

SINGH: Right now, wind is the leading technology in terms of how much energy we get from nonhydro renewables in the nation, and it will be for at least the next five years, maybe 10. PacifiCorp is open to a range of technologies — geothermal, for instance. But wind is the technology that the nation is looking toward right now to get some clean and cost-effective renewable energy online in the foreseeable future.

REYNOLDS: There are also societal issues. A nuclear plant is a terrorist's dream. But imagine trying to take out a wind farm. This points out yet another disadvantage of centralized power generation.

RICKETTS: Cylvia said that solar is the wind power of tomorrow. Instead of creating big power on the grid, there are great opportunities for solar to be used in smaller applications — for instance, to take a part of a facility or maybe all of a facility off the grid. There is a wide range of photovoltaic arrays that can be used, and they're getting better every year. A lot of people in Bend are looking at that.There is an abundance of sunny days over there, and it's a good place to play with that stuff.

HAYES: It's worth noting that Oregon's worst solar saturation area — around Astoria — is still better than most of Germany, where there's a lot more solar generation going on.

SINGH: Photovoltaics were first used in the space program, the most off-grid application you can possibly think of. Slowly the costs are coming down, so it's entering markets that are closer and closer to the grid. Solar is actually cost-effective for remote telecommunications operations and remote homes. And in the developing world, where villages are far from the grid, solar can make a lot of sense, rather than having to worry about your monthly supply of diesel coming in to fuel your little generator.

WEST: If you're in most places in Oregon and you're more than a mile away from the nearest utility pole, solar is your cheapest solution. And in many places in Oregon, if it's half a mile away, given our terrain, then solar is the cheaper solution.

RICKETTS: If you're trying to power a home or a small cabin somewhere, that's one thing. If you're trying to power a 120,000-square-foot office building with a heating and cooling load, that's another. And there's a wide variation in the electrical output of the different kinds of solar arrays. There are some really sexy ones, such as what we used on the Lillis building at the U of O — it's glazed into the insulated glass units in the curtain wall. These technologies are more expensive and they don't produce as much electricity as a flat array on the roof or a peel-and-stick on a metal roof panel. We are still far from being able to power big commercial buildings and developments with solar alone. It's an offset against what these buildings are taking off the grid. But it's an offset, and that's all it is right now.

HAYES: We're not likely to have big solar panel farms in the city. We're much more likely to have a city that has gotten serious about low-energy building, so that the buildings themselves become their own energy plants. That's the ultimate picture of distributed generation, and a diversity of renewable resources will be part of that. It also gets back to conservation, which we've been emphasizing in Central Oregon. When you hear solar right now, you typically think of solar photovoltaic or solar hot-water systems. But the biggest solar bang for the buck is passive solar design. If you just orient a building on the site properly and use the proper lengths of overhang, you can reduce that building's energy demands by 40%. That's adding no additional electricity generation, no additional construction costs.

RICKETTS: I don't know if it contributes no additional construction cost, but it's a very incremental addition. It's all about the orientation of the building and using thermal massing principles to take advantage of the heat from the sun when you want it and proper shading elements to stay away from heat gain in the summer months.

REYNOLDS: And it makes a much more interesting building to look at. It's not just a flat glass box — the shadows move, the building responds to the time of day and almost makes architecture a performing art. Another thing about solar that intrigues me is its worldview. Solar energy is strongest at the equator and then falls off as you go toward the poles. Many of the world's poorest countries are close to the equator. I think that from a world peace point of view, solar is enormously promising. We don't have a few rich people or countries with their hands on the valve. It's so easy to use it right where you live.

HAYES: I spent last March in Europe doing a series of United Nations-related sustainable development events. In the United States, we're always dealing with the economic and environmental aspects of sustainable development. But on the global scale, particularly related to energy and climate change, it's the third "E" — the social equity "E" — that's really driving it. African representatives are saying that 10% of their people have no electricity whatsoever. They're pushing the solar companies to devise systems that work at the village scale. For them, it's a peace and social equity issue, and solar fits that better than anything else at this point.

Not to dis world peace or anything, but how do we make renewables take off in Oregon? Can any one single sector or utility or government agency put Oregon in the forefront of this trend nationwide?

SINGH: There's the green building sector, which is a huge story. And it should be recognized that Portland is a tremendous center for wind development. If you had to map out the industry in terms of the brain power helping to drive it, you'd see a substantial mark on Portland. You have PPM Energy, which is PacifiCorp's affiliate, plus a number of other developers. Vestas [based in Denmark] was thinking about locating a factory here for wind turbines. That didn't happen, but they still brought more than 100 skilled folks here for corporate activities.

What about the other technologies?

WEST: There is certainly a growing hub for small-scale renewables in the Bend-Redmond area. You've got geothermal developers, fuel cell developer Idatech and PV Powered, one of the newest manufacturers of a key piece of solar equipment called an inverter.

HAYES: Through BASE, we have found that there are more than 100 renewable energy-related companies in the Central Oregon corridor already. That's everything from the manufacturing folks to solar installers to plumbers who are doing direct-use geothermal.

So, is Oregon ahead, holding its own or behind compared to other key states?

HAYES: Texas is probably ahead of us when it comes to targeting renewable energy as a significant piece of their economic development strategy. And I think that some of the Midwestern states are doing a really good job with biofuels, such as ethanol. But Oregon has a diversity of renewable energy resources unparalleled in the country. We also have a relatively well-educated populace and a high-tech work force that translates well into the sustainable energy industry.

SINGH: But I want to emphasize: There are a lot of states that want the same thing. New York is doing fantastic work on fuel cells and incentivizing distributed generation — businesses, technologies, applications. So if Oregon wants to secure its place as a hub for renewable energy development, the state has to make concerted efforts, because there's a lot of competition out there.

RICKETTS: Necessity is the mother of invention. In California — with all the problems they had with the distribution grid and its unreliability — they're now putting a lot of energy behind becoming more efficient. They're developing co-generation facilities that serve an entire section of a city development, taking it entirely off the grid. The private sector is embracing this and putting co-gen facilities in high-rise towers. I agree that we've got diversity in Oregon, but there are other regions that are pushing very hard, too.

WEST: The state of Oregon has tried to attract three different photovoltaic panel manufacturers and we've been outbid every time.

How have we been outbid?

WEST: We couldn't put as much public subsidy on the table as Texas and California could. And we didn't have enough public policy in place, as Texas and California and New York did. They have more robust policies to invest in and support renewable energy technology companies than we do in Oregon. Mind you, these are very rich states compared to us.

SINGH: I'd say that we've gotten along pretty well cobbling together small policies in Oregon. The Energy Trust is the biggest policy advance the state has taken in modern times and it really has made a difference. [The Energy Trust invests a portion of Oregon electricity customers' rates to promote energy efficiency and renewable generation.] Customers are stepping up and wanting green buildings. But 17 other states have renewable portfolio standards in place mandating that a certain percentage of their supply come from renewables. We are among the remaining states that don't. When you look at where wind turbine manufacturers want to locate, they want a state that has a definite future demand for renewables and for wind. Pennsylvania has that mandate, and a big Spanish manufacturer just moved to Pennsylvania. We've been doing a lot of talking about it, and Oregon seems to be very effective in talking about a lot of things of that scale, but we haven't quite stepped up to the plate.

RICKETTS: Here in Oregon, we're still stuck in the phase of patting ourselves on the backs for having good building codes in place and having public buildings that meet state energy efficiency design standards. But all that's still not changing where the power's coming from. And it's not mandating a renewable source for that power. So we haven't taken it to the next step.

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Copyright 2005 Oregon Business magazine