Inkwell: Authors and Artists

    
When we first started talking to our next guests about doing this
interview, California was experiencing its first few Stage 1 Power
Alerts.  I never dreamed that when the interview actually started, Stage 1
or 2 Power Alerts would still be a daily occurrence.  I honestly thought
the "crisis" would be over soon.  I had no idea how wrong I would be, and
how little I knew at the time about California and its energy sources.
 
Our first guest, Peter Asmus, has been covering the energy business since
1987, focusing on the environmental impacts of electricity sources. His
new book, Reaping The Wind, tells the gonzo tale of the wind power
industry, the world's fastest growing power source and the most logical
solution to today's power crisis in California. This new book reads like a
mystery novel and features quotes from the likes of Jerry Garcia, Hunter
Thompson and Nikola Tesla. It focuses on the California years under
Governor Jerry Brown and argues that if we blow it with wind power, we are
all doomed!

Joining Peter is Randy Tinkerman, who moved to California in 1979 to
promote the development of renewable energy.  He founded a wind company in
his living room in 1983 which developed the first utility-scale,
institutionally-financed windpark in the world, which was completed in the
Altamont Pass in 1985.  He established his consulting firm, Wind Power
Management, in 1987, where he continues his efforts to make windpower the
premier source of new generation.
        
Randy developed the California Energy Commision's Wind Demonstration
Project, sat on the Board of the CA Solar Lobby, and as Director of his
bedroom think tank, testified before the House Energy & Power
Subcommittee.  He's been invited twice to the White House for energy
battles, and participated at the CPUC in crafting the contracts under
which power today is sold.

Together with the father of American windpower, William Heronemus, and the
leading aerodynamicist, Dr. Forrest Stoddard, he is creating a venture to
produce hydrogen from offshore winds around the world.
 
According to Peter Asmus, Tinkerman is the premier dumpster diver in the
wind business.  I can't wait to find out what that means.

Peter and Randy will be interviewed by Fred Heutte, who has been an energy
policy analyst since the last big energy crisis in 1979.  He was executive
director of the Solar Oregon Lobby in the 1980s, and authored numerous
bills in the legislature including those leading to Oregon's state energy
plan and global climate research, and the PUC's utility least-cost
planning framework.  He worked for ERC, the pioneering conservation
program evaluation firm, from 1983 to 1991, and continues to work with
Pacific Energy Associates, supporting their planning of "market
transformation" to develop energy efficiency.  He has preserved a
whiteboard with the outline of ERC's evaluation of the PG&E residential
weatherization program, circa 1990, a daily reminder that the road once
taken can be taken again.

Please join me in welcoming Peter, Randy, and Fred to inkwell.vue! 
  

    
I met Peter and Randy in circumstances having nothing to do with
energy.  

Peter was one of the ringleaders, more or less, in a large
network of Deadheads stretching from Sacramento to Davis to Santa
Cruz, and is involved with his own band, Space Debris.  But he also
has co-authored two very good books on environmental and energy issues
("In Search of Environmental Excellence" with Bruce Piasecki and 
"Reinventing Electric Utilities" with ex-SMUD manager Ed Smeloff).
I think it's his day to day knowledge of developments in energy
policy as a newsletter reporter and magazine author over the last 
15 years that really provide the sharp insights on wind energy,
past, present and future, in "Reaping the Wind." 

In addition to being active for many years here on the Well, Randy 
is one of the dedicated supporters of the underground dance music 
formerly known as "rave" in San Francisco in the early 1990s; 
his son Buck is a talented DJ and producer in that scene.  I have to
admit that I had little idea of the total extent of Randy's background
in wind energy until Peter's book.  We truly have someone who has
seen and done it all, and worked for (and sometimes against) just
about every major player in the often fractious California wind
energy business since 1979.

Since both of them had longstanding involvement with energy issues,
we have always had lots to talk about.  And while Randy was in and out
of various wind energy efforts during the last decade, Peter was
wrestling constantly with the demons of "the damn wind book." 

As for myself, unlike California, the Northwest was good at planning 
for wind but until the last couple of years, just absolutely terrible 
at doing anything about it.  So my experience was that of a bystander.  
It was only a matter of time before Peter was in contact with Randy, 
who ended up being a major source of background for the book as well 
as one of the ongoing characters.

Now we fast forward from the confusion of the early 1990s, when wind
energy development in California basically went off a cliff, to 
today, when a regionwide energy crisis provides another opportunity 
for the big breakthrough that we have always wanted for renewable energy.  

But we've seen illusions and disappointments in the past.  The question
is, are things different this time?  Is it possible that wind will finally
take its long ordained role on the front range of power development?
Or will it basically be cover for a total lockup with the natural 
gas industry, which now is the fuel for more than 50% of the electricity 
produced in California, and a rising proportion throughout the West?

I think this will be a recurring theme of the discussion here, which
will cover a lot of ground as we talk about the present tumultuous 
state of the usually "boring and complex" world of electricity supply.  
As the Wild West era of California wind energy development draws to a
close, we stand yet again around the corner from a future waiting
to meet us.  

So welcome, Peter and Randy... I'm hoping we'll keep this conversational,
and encourage readers to bring up whatever interesting questions come
to mind.
  

    
And to get us started, here's the story in this morning's Sacramento Bee
about the deal that alternative energy producers (QFs or qualifying
facilities as the jargon has it) have cut to set a flat rate for
five years on what they receive for the power they generate.  A large
fraction of the total power is wind generation, so this has a significant
impact on the economics of the business going forward.  I know you've
been following developments on this closely, Peter and Randy, so have at it.

www.sacbee.com/news/calreport/calrep_story.cgi?story=N2001-02-22-1900-0.html
  

    
Extra! Extra! Read all about it!  

Yesterday, at long long last, the Bonneville Power Administration finally
put a serious bid out for wind power: up to 1000 MW of capacity.  BPA
has spent most of two decades playing footsie with renewables -- they
are always in the resource plans the agency puts out, but they have
only with the greatest reluctance actually moved real dollars into
demonstration projects.  This is the first real solicitation they have
ever put on the table. 

http://www.bpa.gov/corporate/KCC/nr/01nr/nr022201x.shtml
  

    
Howdy folks -- 

Fred, you ask damn good questions.

First of all on the flat price for existing wind and other renewables.

When I first heard about it, I thought, great, we are going to cap the
prices renewables are getting for their power, but allow everybody
else to reap the profits, so to speak. I read somewhere where the
utilities proposed capping what they get paid for their nuclear power
plants (whose past investments have all been paid off we ratepayers) to
something like 15 cents (the renewable guys were negotiating a cap of
something like half of that -- 8 cents.

Of course, the renewable guys are now worried about getting paid, so
they have some incentive to lower thier prices so they end up getting
something SOON.

The irony of all this is incredible. For so long, the utilities used
to put all kidns of onerous conditions on independent power under the
logic that these clean power producers could be fly-by-nights (well,
some of them maybe were). A certain glee came over the renewable guys
when after struggling to survive for years at prices in the 3 cent
range, they suddenly were receiving payments up in the 15 cent range.
But, they now too are worried about getting paid!

The fact that these guys are voluntarily reducing their prices for the
benefit of all Californians is a tribute to the industry. 

In terms of BPA, I think it is about time. Wind power is the most
logical solution to the power crisis in the West. Governor Davis should
sink a couple of billion dolalrs into new wind farms, expedite siting
of renewables, instead fo spending all of this taxpayer money on new
power plants that still burn natural gas, driving up the price for
power for the rest of the state.

The more I investigate the implications of Davis' approach to thsi,
with the state becoming more and more involved, the more nervous I get.
I'm a public power person, but the Davis approach has some big
downsides. Anyone want to comment on that?
  

    

        Please forgive me for being unable to comment for a few hours, but
the breaking deal for renewables has grabbed my attention.  We're
working right now to put together a program that will accelerate
renewable power development in California, so i'll have more time to
comment in a few hours.
        i'm surprised at how favorable the legislative climate is toward
renewables, and trust we'll be able to take advantage of the situation.
        Please stand by, things are changing hourly, but i'll be here soon.
  

    
        I can say that the BPA bids are long overdue and welcome.  America
has far to go before catching up with Europe in renewable development,
but there's nothing like a crisis to wake people up.
  

    
I really sense that things are finally going to change. This "crisis"
is the canary in the coal mine. Fossil fuels are running out. The Bush
administration is going to push for more drilling, but when citizens
find out the environmental costs associated with some of the locations
that are left, they will rebel.

Randy -- looking forward to hearing what you are working on. The best
news I've heard is that Byron Sher may be carrying a bill that would
increase California's renewable energy from 12 to 20% by 2010.

Is that enough to make a difference?
  

    
        Not enough to make a difference.  First what are they including as
renewable?  Wind is currently just over one percent of the State.  One
of lobbyists at dinner a few nights ago mentioned the 20% figure, and i
told him we'd probably be there anyway, that Europe would be at forty
or fifty percent by 2020, that little Denmark was already at 10% wind,
already!  But they must be counting sources other than sun and wind
directly, so i'd have to say... not far enough.
  

    

>Fossil fuels are running out.

Where is this happening?  Last I heard, we had a 300-year supply at
current usage and prices, with likely much more available as prices
rise [making new extraction techniques feasible].
  

    
Oil executives freely admit we hav maybe 40 to 50 years left -- and
that is if you include places like the Artic, where considerable
opposition remains. Many of the sites require extremely deep drilling,
which adds to cost.

Why sacrifice pristine areas when fossil fuel sources are not the
cheapest from of energy and when global warming compells us to shift
away from fossil to renewables.

So, we may not run out IN THE VERY NEAR FUTURE. But the price will
remain high for a while, which undercuts the whole argument for
sticking with fossil fuels.
  

    

  Oh, I'm not saying we should stick with them -- *LOTS* of excellent
reasons _not_ to do that.  I was just curious about your assertion,
which I continue to find rather counterfactual.  But this is really a
distraction from the main topic, so I'll let it go now.  Carry on!
  

    
        People are alive today who will be alive when we run out of fossil
fuel -- Bret Logue, hydrogen whiz, who thinks 300 years is off by an
order of magnitude.
        More to the point is the underlying theory.  We have so much need for
petroleum as a feedstock, why burn it?
        Perhaps oil executives recognize the profitability of addiction, as
did the tobacco execs.  It doesn't matter if you're Dick Cheney or Zach
de la Rocha, if you want toast, you plug in your toaster, if you want
to go somewhere, you fill up your Unimog.
  

    
I'm only on Chapter 7, where the book is just starting to get interesting. So
far, one line really made me reach for my highliter:

    "Despite a ruling in 1391 by the Bishop of Utrecht that no one could
     own the wind since no one could control it, Lords continued ot try
     charging millers for the rights to use wind in some communities as
     late as 1789."

Discussion probably belongs in the napster topic...
  

    
Interestingly enough, it is the sale of wind rights today that is
saving the family farm. Places like Minnesota, near Wisconsin, where I
was taught that PBR was the only beer that mattered.

But I stray...

Mr. Tinkerman knows a lot about wind rights. While wind fuel may be
free for the taking, wind farmers compensate those who own the land
upon which turbines spin. Farmers can keep doing what they've always
done while reaping royalties from the profits generated by the wind
that blows across their private piece of real estate.

Napster?

Well, as a naturalist and a musician, I see a difference between wind
and music. But more about that later.

I also believe those peasants who installed the first windmills in
England should become SUPERHEROES in some cinematic form.
  

    
        The ranchers in the Altamont saved their ranches through wind rights
royalties.
        The longest term aspect of any windplant is the relationship between
the rights on the land and the project operators.  Longer than the
financing mechanisms, sometimes longer than the power sales contracts.
        What this provides is the basic contract between the wind and its
harnessing.  And wind rights mix the social cultures of old families
committed to their lands and those pioneers of new technology.
        Of course, there are no landowners when you go offshore.
  

    
But there are some whopping big expenses when you go offshore. 

In the early '80s I did a lot of naval architecture work for a company
involved with a couple of OTEC projects. (OTEC = Ocean Thermal Energy
Conversion, whereby water from 3,000 ft down, at 40 degrees F, would be
pumped up to the surface where the water is 80 degrees F. A heat engine, in
this case using ammonia as the working fluid, could run between the two
sources of thermal energy.)

The work was interesting and fun, but the inescapable conclusion was that
shore-based plants (with longer pipes to reach the cold water) would be more
practical.

So as much as I love things that float, I'm having trouble with this concept
of offshore wind farms, even if they're making hydrogen and don't have to
pipe electricity to shore.
  

    
        Ahhh, call you Fishmeal, but there's nothing as elegant as an array
of floating wind ships with far more energy capture than land based
machines, making the fuel that gets us off oil.
        During the next two weeks, we'll examine why wind ships, with their
higher power loading, are more efficient generators, and the future of
the world.
        And we may be lucky enough to hear from Professor William Heronemus,
former Navy Captain and designer of the Nautilus class of nuclear
submarines, father of American windpower and mentor to many of the
engineers currently designing wind turbines, and to whom Peter's book
is dedicated.
        But let's focus on the current energy miasma first.
  

    
        Peter and phred, let's set a framework for this discussion.  Here's
the current situation, using stats from the American Wind Energy
Association and it's counterpart in Europe.
        3500 megawatts of wind capacity (1.3 million California households,
or 3.5 million people) were installed worldwide last year.  53
megawatts of that was in the former united states.  Fifty three.  For
those of you doing the math, that's a percent and a half.
        Germany, not nearly as large as Texas, now has 6,113 megawatts of
windpower capacity, while U.S. totals 2,554  MWs.  Germany had two and
a half times as much wind capacity as a-murk-a.  Spain could pass u.s.
next year.
        Denmark, roughly the size of North Beach, has nearly the same
capacity as the land of SUVs, 2,140 MWs.  What's thrilling about the
Danes?  Ten percent of their total power generation is from the wind...
already.  In place.  Period.  Not that that's the only thrilling
aspect of Danish life, they also make Dogma '95 films.
        Italy installed more than three times what Cheneyville installed last
year, though they can be forgiven for Roberto Begnini.
        The United States far surpassed last year's installed capacity in
Dubai, and made more films than Dubai, though we're talking quantity,
not quality.
        Worldwide capacity to date is 17,000 MW, generating some 34 billion
kilowatt hours, or enough power to supply 66.47 bazillion Palm Pilots.
(product placement, fee unpaid.)
        America is cost conscious about energy, bitching when gas prices
reach one third of prices in the Netherlands.  America conveniently
forgets the price paid to defend oil supply lines in the desert, or the
cost to air, water, and breathing.  At every Academy Awards, many
breast ribbons support the fight against AIDS, but no one wears blue
ribbons to support the 60,000 premature deaths a year from
particulates.
        A few years ago, lobbying in the halls of illicit congress, i was
told not to mention global warming during discussions with
leprosentatives.  It was patiently explained to me that global warming
was not an officially accepted phenomena, which must of course be
studied ad nauseum before it's accepted as pronounceable, and it was
never actually described how it becomes an actual issue.  Hello.
        Anybody read any insurance actuarial charts lately?
        Twenty five years in the business of renewables convinces me this is
about power and control, and rational thought does not enter into the
equation.
        Me believe future generations will consider today's energy policy
makers guilty of criminal negligence.
  

    
Randy -- thanks for setting the context. It is incredible to me the
growht in recent wind power installations. With each subsequent draft
of my book, the number of total capacity kept increasing, from 11,000
MW to 15,000 MW in the final draft. Now we are up to 17,000 MW -- but
very little in the US recently...

As I've said before, the current energy crisis is the canary in the
coal mine. The recent stats on global warming only underscore the
poverty of our energy policy. The billions of dollars we ratepayers
will have to spend to keep the lights on and support a fossil fuel
industry which takes away far more than it gives, is, in the words of
Herr Tinkerman, criminal. 

When will citizens wake up? When will they see that the Davis plan to
lock all of us  -- both those served by private and public utilities --
into a power supply that supports a sick status quo.

Instead of accelerating the building of gas peaking plants, we should
be sinking dollars into solar PV, large and small wind turbines and
fuel cells, the technologies of tomorrow. 

I think Davis associated renewables with his old boss, Jerry Brown,
and therefore is afraid to do somethign bold. Besides, we buys the
utility line all the way.

The answer to California's energy crisis is both a large federal
program to build wind ships and large land-based wind farms, and a
great expansion of distributed generation sources. We need more public
power, coops and other vehicles so that consumers can get the type of
power they want -- and that this planet requires to sustain itself....

My question: Is there anything good about Davis' approach?
  

    
        i'm of two minds about the Governor's role in solving Cauliflornia's
crisis.  On the one hand, all the public pronouncements indicate an
accent on bailing out the utilities through measures masquerading as
giving the State some kind of value, like buying the power lines for
2.7 times book value, and forcing thirty-some gas peakers down our
throats, exascerbating gas demand and throwing several decades of clean
air regulation to the armadillos of Texas.
        On the other hand, reports from the Legislature indicate a strong
committment to building on the State's pioneering development of
renewables, and both accenting and accelerating further development. 
Hard to believe the Governor isn't strongly behind such measures.
        Various windpower representatives have a strong presence in the halls
of current debate, as indicated by the industry's being the first to
forego "windfall" profits in return for a guaranteed fixed price for
the next five years.  the Legislature didn't see as much of a PV
presence (that's photovoltaics), and called in some large potential
manufacturers to ask what they needed.  They said a committment from
the State to make Cauliflornia a ten percent solar State within ten
years would be enough to build manfacturing plants.
        Seems to me a public outcry in support of a sustainable future would
let the legispersons know they're not alone out on point, and that they
can count on being rewarded by the vote of the people for taking the
soft energy path.  Hard to believe the Governor doesn't feel this
already.
        Legislative staffers have said, hey, you guys won, get with the
program and make some deals.  After nearly three decades of fighting
uphill battles over energy policy, it's hard for me to shift focus and
believe what i'm hearing.
        But then Bonneville Power goes out yesterday to solicit 1,000
megawatts of windpower after years of sitting on their...
  

    
        FERC chairbot Hebert yesterday stated that CA needed FERC approval of
State takeover of transmission lines, and that he would vote against
it.
        "We support States Rights, unless we don't, or under conditions of
coup d-etat."
        His stance seems to indicate that we're undergoing a huge power play
nationwide over energy policy, read revenue streams.
  

    
Okay, I look forward to reading the rational for floating wind ships,
especially compared to turbines on causeway structures in shallow water.
Remember that there's a very highly evolved technology for ships to use wind
power for their own propulsion, and even that can't seem to compete
successfully against high-priced fossil.

I don't know how much of the wind power in Europe is driven by government
subsidies, and how much is driven by the higher price of energy over there. 
But it's clear that the higher prices are necessary for it to make economic
sense. 

Here's my plan for California: Immediately impose a $0.10/KWH tax on
electricity. The marginal rate for consumers would snap up to $0.23/KWH. This
would result in more refrigerators being replaced, more lights being turned
off, and more fluorescent bulbs being bought than all the subsidies you could
shake a stick at.

There may not be much elasticity in the price/supply curve, but there's lots
of elasticity in the price/demand curve, *especially* among commercial and
industrial consumers who actually make rational decisions about consumption
and price. 

Demand would drop back below supply by a comfortable margin, and the windfall
would be re-directed back into the state treasury instead of the Texas oil
cartel. Some of this windfall would be used to subsidize "hardship" cases.

(A lot of cash might also have to be directed to various special interests as
a kind of "populist pork" to make this go down the consumers' throats a
little easier - but I think the result would be that a lot of good things
would get funded)

Best of all, a steep rate increase creates the economic environment for
renewables to work without heavy subsidy. Energy is still amazingly cheap,
even at twice the price. 
  

    
21 slipped. I see the "huge nationwide power play" as an attempt by Texas
(now that Texas conrols the White House) to transfer a lot of California's
wealth to the east. Especailly to Texas.

But we can call their bluff. If the California economy goes down the tubes,
so do the portfolios of the individuals holding all the stock in the Texas
energy companies. Or so I'm guessing, at least. 
  

    
        If there were no subsidies to any mature technology, and complete
accounting of social and environmental costs were included, windpower
would blow away the competition.
        Conservation and efficiency are certainly the starting point, as are
accurate price signals.  Cauliflornians should be cleaning their
refrigerator coils, instead of having their clocks cleaned and pockets
picked.
        But then we need new generation, and new transportation fuels.
        We need them clean and sustainable, but that butts up against the
enormous revenue streams of companies invested in burning the legacy of
the dinosaur generations in two hundred years.
        The next few months will determine whether Cauliflornia (and
Massachusetts, and islands of windpower everywhere) will lead a-murk-a
back to energy sanity.
        You can bet Dick Cheney spends most of his day fixing strategy to
deliver a solar/hydrogen future.
        
        
  

    
Funny thing you should mention that.  I'm wondering about that great good
pal of Cheney and Ace (as in "Flying", as in the President, if he can give
out nicknames so can I), Ken Lay of Enron.

Peter, Jim Dehlsen of Zond plays a big role in your book and in the 
up and down course of wind development in California for the last two
decades.  He stuck to his course, didn't succumb to either the tax
credit backlash that drove many of the startups into the ground, or
the delusions of grandeur and financial convolutions that caused
USW/Kenetech to "blow up real good."  In 1997, in fact, he sold Zond
to Ken Lay, and hey presto, Enron Wind Corporation becomes the largest
developer in the US.

What kind of practical upside does wind have, in the current circumstances,
when Enron is the leading firm in the domestic business and obviously has
the levers of power on energy policy, but their mainline focus now and in
the future is natural gas?