West Virginia Energy Outlook 2012: Identifying Synergies Between Renewables and Fossil Fuel

More than thirty years later I am happy to report that this dream of unity is emerging in the 2^nd largest coal producing state in America. As the age old “us vs. them” debate continues, many West Virginia residents, companies and entrepreneurs are beginning to identify synergies between renewable energy and fossil fuels, specifically building unexpected coalitions in the heart of coal country. As a social milieu that is built upon a long and proud tradition of producing coal to fuel the development of the first industrial revolution, what opportunities are on the horizon for WV playing a role in simultaneously maintaining its dominance as an energy producer as well as bringing about a less anti-coal version of what Jeremy Rifken has deemed the Third Industrial Revolution? Using WV as a test bed, it is my belief that a network economy can only emerge from a mutually beneficial strategy that identifies synergies between fossil fuels and RE (e.g., Hybrid car) given the present political climate in the U.S. 

According to the Energy Information Administration (EIA), WV accounts for more than one-tenth of total U.S. coal production and coal-fired plants produce nearly all of the electricity generated in the state. In 2009 WV produced 96.3% of its energy from fossil fuels, which include coal, natural gas, and petroleum, and the remaining 3.7% from RE resources (figure 1 below).

Given the WV energy portfolio’s existing concentration of fossil fuels, identifying mutually beneficial approaches to diversifying WV’s energy portfolio may be a wise move. By encouraging further development of RE resources, WV can ensure sustainable fiscal policies and state programs that account for recent market trends and adapt to rapidly evolving energy production technologies, economics, and policy changes. In their 2011 Annual Energy Outlook, the United States Department of Energy projects that the RE sector will nearly double its output from 2009 to 2035. 

Simultaneously the EIA predicts that Appalachian coal will undergo a notable decrease in production over the same period (Figure 2 below). Significant declines in the productivity of the mining sector have led to increased prices over the last decade.   This trend is expected to continue to reduce the competitiveness of Appalachian coal compared to other coal producing regions. Furthermore, a 2009 United States Geological assessment predicts that coal reserves in the region will continue to dwindle, increasing both extraction costs and environmental impact.

So you may be asking…

What can WV do about it? In a recent RenewableEnergyWorld.com article written by AEP’s COO, Robert Powers, he states that “there has never been a better time to work together to shape our energy future, ensuring safe, reliable, cleaner energy and a stronger economy for decades to come.” He went on to say that this “would be a much better use of our collective energy.” In the spirit of creative collaboration, a subject that I have written about here, the answer is simple: Bridge the gap between fossil fuels and RE resources in a way that mutually benefits both industries.

According to a November article in WV Executive, WV exports 81% of its energy. This is a very unique and important position to be in, that is, WV can simultaneously reap the benefits from expenditures in fossil fuels as well as a variety of RE resources. Reduced local energy demand through distributed RE development will allow WV to expand economic growth through energy exports by utilizing existing electricity generation plants, rather than having to construct new plants to meet increasing demand. Furthermore, reduced local peak-demand consumption of electricity increases the value of WV’s coal resources by allowing the state’s utilities to sell excess electricity to neighboring states during times of peak demand.

Where does WV start? Thanks to the tremendous foresight and leadership of WV agencies and elected officials, the bridge is already being built to include hydro, wind, biofuels and a rapidly expanding solar sector which should see tremendous growth over 2012 after the WV Public Service Commission’s recent adoption (effective July 18, 2011) of interconnection standards based on the Interstate Renewable Energy Council model interconnection rules.   

Who will participate? Building a WV-based, highly collaborative energy resource consortium with the primary goal of “bridging the gap” is imperative in order to capture the benefits of these emerging markets. For example, the City of Williamson is presently supporting the development of the Central Appalachian Sustainable Economies (CASE) network which is working with state agencies, local residents, elected officials as well as national and regional experts to develop the next steps for creating a mutually beneficial environment for both the fossil fuel and RE sectors.  Some partners of this consortium include: Community Power Network, Interstate Renewable Energy Council, Policy Consensus Initiative, Coalfield Development Corporation, Brookings Institution, Bridgemont Sustainability Institute, Mingo County Redevelopment Authority, Green for All, Appalachian Institute for Renewable Energy, Center for Economic Options and many more. This emerging network economy will be facilitated by integrating a social networking tool called the Green Jobs Accelerator.  

What role is hydroelectricity playing? According to the WV Development Office, in June 2010, Brookfield Renewable Power started the rehabilitation of a hydropower project located in Glen Ferris on the Kanawha River. When completed in 2012, the Glen Ferris hydropower project will generate more than 38,000 MWh per year of renewable power for the WV electricity market. That’s enough electricity for 4,500 households. Brookfield also manages the 102-MW hydropower plant at Hawks Nest on the New River. 

What about wind? Home to one of the largest wind farms on the east coast (Mt. Storm – 264MW), WV has opened its arms to wind.  Most recently, landowners from Monroe County have begun to explore locally-owned wind at two different locations with Angel Winds Renewable Energy, LLC completing its meteorological tower installation in August of 2011.   Locally-owned wind provides local control over the development of a project as well as increased revenues for both local landowners and municipal governments. 

Solar's role? Highlighted in PHOTON International Magazine’s 2011 February issue, WV is well on its way to becoming a dominant player in the solar sector and Gilliam Solar will be leading the way. Based in “The Heart of the Billion Dollar Coalfield,” Gilliam Solar is a company specifically designed to bridge the gap between fossil fuels and solar. Trained by WV’s largest and most respected solar integrator (Mountain View Solar), Gilliam Solar is led by a third generation coalmine electrician with extensive business/project management experience (Matthew Gilliam) and a solar expert who recently moved back to his home state after working on RE in Japan (Murphy Poindexter).  Through their collaborative partnerships, Gilliam Solar is presently developing several novel approaches to residential, commercial and municipal scale solar.

Biofuels? With over 2.41 million dry tons of available feedstock a year, WV is well positioned to utilize biofuels as a viable means for diversifying WV’s energy portfolio.  Using a technology designed by Mid-Atlantic Technology, Research and Innovation Center, a team comprised of members of The JOBS Project, the Appalachian Regional Reforestation Initiative’s science team and one of the nation’s leading coal companies will develop a sustainable energy pilot project on an active mine site that will tentatively benefit both coal companies and local communities. 

What’s next? Look out for more advances in the distributed energy generation sector, especially in regards to energy optimization and customer based demand control applications. Additionally, innovative financing models for municipal governments and local businesses will potentially become a major game changer over 2012 (e.g., performance contracting, shared savings agreements, property assessed clean energy, etc.).