With over 35 years of field experience, Peter Banner is a veteran of the renewable energy industry. He was a founding member of the California based Independent Energy Producers Association (IEP), and served on its Board of Directors from 1982 through 1986. Erecting his first wind turbine in 1979, he has since worked as the project manager on numerous wind farm projects, taking them from permitting through financing, construction and operation. Internationally, Mr. Banner has represented a U.S. based manufacturer of large hydroelectric turbine runners and a manufacturer of meteorological and wind farm monitoring equipment in India. He also served on an advisory board of the U.S. Bureau of Land Management (BLM) for development of wind energy projects in the Coachella Valley in California.
Planet Experts: Tell us about your organization, Support Resources, and describe the various types of projects on which you work.
Peter Banner: Support Resources, Inc. (SRI) is an energy and management consulting firm, specializing in the renewable energy field. I am its principal and have been involved in this field since 1976.
A considerable amount of our work has been in project development (i.e., identifying potential wind farm, solar or hydro projects) and eventually managing the development process, coordinating the various experts required, meteorologists, engineers, financial, attorneys, wildlife biologists, construction firms, etc. We have taken a number of projects from concept through permitting, construction, and operation. Over 35 plus years, we have worked on projects involving solar thermal, solar electric, wind, biomass, geothermal and hydro.
PE: What are the biggest challenges when it comes to implementing and utilizing renewable energy technologies?
PB: The biggest challenge is securing a financeable power purchase agreement (PPA).
Wind farms’ current biggest challenge is finding a viable wind resource – in a sparsely populated area, in close proximity to a power line – with sufficient capacity to transport the power to a substation that has the available capacity to accept the power and transmission capacity to get it to a population center. Permitting difficulties vary from state to state.
To date, avian mortality impact has presented the most challenging issues environmentally. Balancing the beneficial environmental impacts of developing non-polluting wind energy with the impact on a particular species can present a conundrum. What is an acceptable mortality rate from a moral standpoint, from a local habitat impact, and on the species overall population?
Increasingly, we are seeing both local regulatory and local neighborhood opposition to wind farm development. Alleged health issues and noise objections have increasingly been used to impede or halt development. In some cases, municipalities have either put moratoriums on new development or established set-back requirement from property lines that erode the economics of a project.
Solar has the same challenges as wind relating to substation capacity and power line constraints, but identifying a site with a developable solar resource is considerably easier, since micro climates are less of a concern, making it easier to quantify and evaluate the available resource. Scarcity of water for cleaning panels can be a challenge. Solar technology is highly developed and reliable, and with few moving parts, it requires far less O&M than wind. Price per kW has been dropping precipitously so the economics have been increasingly attractive.
While bio-mass projects have all of the same challenges as wind and solar, these challenges vary by degree from project to project, dependent upon technology used and fuel source. One additional challenge to biomass is obtaining a secure and reliable fuel supply. The fuel supply must be provable over the life of the project or no funder will touch it. Biomass projects utilizing animal waste must address fairly well established issues pertaining to disposal of animal waste, as well as air quality issues and local and state regulations.
Geothermal has the challenge of having extremely high upfront costs. Considerable environmental work and proving up the resource all need to be done upfront. In some cases it is similar to exploring for oil and gas, in that sometimes the resource just isn’t there or is of insufficient quality for a viable economic project. Many utilities are hesitant to offer PPAs for a project that might not deliver power for 5 or more years in the future, and securing financing for a merchant plant – a project without a known off-take and at an unknown price – is extremely difficult.
PE: What role should the government play in crafting policies that encourage investment in and usage of renewable energy?
PB: We have seen that government policies have a definite effect in encouraging (or discouraging) the development and implementation of renewable energy. Some of the prime examples are the Public Utilities Policy Act of 1978 . Prior to this, the utility companies had a monopoly on the generation and distribution of electrical power.
Unfortunately, the Act initially had only marginal effect on the market place. Defining avoided cost was left to the states for the most part, and few projects were developed. In the 1980s, California took a lead on encouraging renewable energy development. They implemented a State investment tax credit of 25% for investment in renewable energy projects, which complemented the Federal investment tax credit (ITC) of 10% and 15% ITC for renewable energy projects. The missing link became the ability to secure a financeable PPA. The CA PUC solved this by approving standard offers which the utilities had to enter into with the developers. These standard offers somewhat defined what they considered to be avoided cost, something PURPA had left to the States to determine.
Both the feds and the states can make (and I believe should make) policy decisions as to what industries they would like to encourage and what industries they would not like to encourage, which should be based upon what they see as being beneficial to society. Encouraging investment and usage of renewable energy in most cases has been deemed beneficial from a societal viewpoint, improving quality of life and minimizing the environmental impact of power generation. The problem can be that some of these societal benefits can become subverted in the process by poor implementation or poor oversight.
Allowing the installation of wind turbines too close to homes or allowing developers to cover thousands of acres of desert with solar panels can undermine the intent of policies. Governmental policies and guidelines need to temper the greed gland that too often tails (or leads) an industry.
PE: Which sector of currently available renewable energy sources — wind, solar, wave, hydro — are the most promising?
PB: They all show promise. In the near term, solar and wind show the most promise, with solar probably having the most wide spread potential application. The continuing decline in manufacturing cost and incremental improvements in efficiency will increasingly improve solar’s economics. As a prime example of distributed power technology (i.e. roof top rather than large commercial plants), it has the potential to significantly contribute to a utility’s power supply with minimal environmental impact.
Large wind turbines are becoming more efficient and lower in cost. Plant capacity factors have increased significantly as blade technologies have enabled larger and larger rotor diameters; improved materials and manufacturing technologies are enabling wind turbine operators to operate their equipment more aggressively. The off-shore market probably has some of the most potential, having only recently begun to develop. Off-shore wind turbine can be considerably larger than on-shore, and the wind resource is typically more constant and of higher quality. Population centers tend to be along the coasts, so the power generated by these turbines has a shorter distance to the demand loads.
Wave technology is the least researched and developed. It has huge potential, but must overcome technology and logistical difficulties.
Small hydro offers some great potential, but small hydro must come out from under FERC oversight. An in-stream beneficial fish study (IFG4) and riparian habitat impact study generally have to be performed on any stream where water diversion is proposed, a fairly expensive process – generally too expensive for small projects. This has discourage the development of small (or micro) hydro plants, which have the potential to generate significant power. For large hydro, improving efficiency at existing facilities has proven to be one of the most cost effective ways to bring new power on-line.
PE: In June, President Obama and the EPA announced a sweeping 30 percent cut in carbon emissions (from 2005 levels). Do you think this move goes far enough and how can renewable energy fill the gap left by polluting coal plants?
PB: Changing the basics of a world economy, from one based upon carbon versus non carbon can be hugely disruptive, something governments, corporations, and people in general loathe and fear. Companies will embrace change if they can see how they might profit from it. I believe this is something that needs to be done incrementally with a good road map and a clear objective of where we want to be 5, 10, and 25 years down the road.
Renewables will help to fill some of the gap left by phasing out coal, but storage technologies need to be developed more aggressively to enable wind and solar to emulate base load capacity. Energy conservation is still underutilized, ignored by too many.
PE: Is there any place for nuclear energy in this equation, in light of the significant investments being made into building more efficient plants with less radioactive waste?
PB: The increased use of nuclear presents a conundrum for those believing that greenhouse gas is a more threatening prospect for the planet than having to protect and contain dangerous materials for millennium. Some of the small, modular nuclear technologies look interesting, especially these “fast breeder” reactors. Before any of this can occur, safety issues need to be addressed adequately and some progress made on long term handling of existing radioactive waste, as well as any future waste.
PE: You have worked on projects in Asia, Europe and Latin America. Which countries have the most progressive renewable energy policies? The least progressive?
PB: India’s policy of allowing “wheeling” of electricity has been a driver in encouraging the development of renewable energy. Large industrial consumers are allowed to wheel, or bank, energy with the local utility, allowing them to operate when they might otherwise be curtailed.
China is an example of a country that, from the top, the decision was made to support and deploy renewable energy projects. In the wind industry, many of the large state-owned industrial manufacturing companies were encouraged to develop renewable energy divisions. In addition, some wind turbine companies such as Goldwind and Sinoval were created with heavy government support. The policy seems to be to support numerous companies initially, and waiting to see which of them survive. What has occurred is slowly the weaker companies are falling by the wayside, especially component parts suppliers, and are being forced to merge with stronger companies.
PE: Latin America seems to be on the cusp of developing an attractive environment for renewables.
PB: Corruption and governmental control of the utilities is probably the biggest impediment to attracting investment.
In the early days, the “renewable energy” ministries were considered backwaters and flew under the radar, and the traditional power generators did not see renewables as a threat to their domains. This enabled some fairly progressive legislation to pass which tremendously benefited the renewable energy sector. PPA rates in such countries as Nicaragua have been in the $120 MW range, making project development quite attractive.
Mexico presents one of the potentially most attractive countries for renewables. In 1992, legislation was passed allowing for “self supply,” in which companies could build and own energy facilities if the power was for their own use. Under this legislation, renewables were treated particularly well, allowing for the wheeling of power to their businesses whereever they might be in Mexico. Companies such as CEMEX and Walmart have invested in wind farms in Mexico.
Prior to 2014, all energy and power in Mexico constitutionally was controlled by State owned entities. Legislation passed in 2014 opened up this sector to private investment and it is anticipated that this will have a dramatic effect on the development of renewables.
PE: What’s the one thing most people don’t know about renewable energy?
PB: I believe most people do not believe that renewable energy can be and in many cases is competitive with conventional energy sources. People have to understand that outside of hydro and the burning of biomass, the renewable energy industry is a relatively young industry. Commercial wind farms did not really start until the early to mid 1980s, and then really only in California.
The industry crashed in the early 1990s, when the price of oil dropped precipitously, hitting less than $12 per barrel in 1998. It was not until the passing of the Energy Policy Act of 1992, which enacted various incentives for the development of renewables that the wind energy industry began to slowly recover.
It was with the Energy Policy Act of 2005, which significantly increased the tax credits for renewables, that the industry began to experience exponential growth. In 2013, the amount of energy derived from renewables in the U.S. exceeded 13 percent, surpassing that derived from nuclear.
Put into perspective, I believe people would be quite surprised as to how young an industry renewable energy actually is and how much it has accomplished in such a short time frame.