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Settlement Reached Over Proposed Ohio Cracker Plant Air Permit

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Photo: Brittany Patterson/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

Environmental groups have reached a settlement agreement with a petrochemical company in Ohio to beef up air pollution controls at a proposed petrochemical plant along the Ohio River.

Thailand-based PTT Global Chemical America and South Korea-based Daelim Industrial Co. have proposed building a multi-billion dollar ethylene cracker plant on a 500-acre tract of land in Belmont County, Ohio, just a few miles from Moundsville, West Virginia.

The plant would crack apart ethane — which is produced during natural gas fracking — into smaller molecules used in plastics and chemical manufacturing. The plant would produce an estimated 1.5 million tons of ethylene annually.

An air permit issued by the Ohio Environmental Protection Agency last December allowed the plant to emit 400 tons of volatile organic compounds and produce the equivalent carbon dioxide emissions of putting about 365,000 cars on the road annually.

Three environmental groups, the Sierra Club, Freshwater Accountability Project and Earthworks, challenged the air permit in January arguing pollution from the plant could harm communities and that the air pollution controls mandated by Ohio EPA were not sufficient. 

The settlement signed Monday requires the company to use technology to find pollution leaks and repair them. The company would also install a weather station on site and create a website available to the public with emissions data.

In a statement, environmental groups praised the improvements, but remained opposed to the plant, which would be the second such facility in the region. About 30 miles northwest of Pittsburgh, Shell Chemical’s Monaca cracker plant is under construction. It’s slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers when done, according to the company.

“This agreement will help protect local communities from dangerous air pollution should this facility be built, and we’ll continue to fight to ensure that it never comes to that,” said Sierra Club Organizer Cheryl Johncox.

Federal Support

A final investment decision by the project developer has not been made. Proponents envision the Ohio Valley as the next hub for plastics and petrochemical production, which they argue could drive investment and jobs to the region.

The Marcellus and Utica shale formations located in the Ohio Valley contain high levels of natural gas liquids, or NGL, which can be separated from their cousin methane to become valuable feedstocks for plastic and chemical production. A 2017 U.S. Department of Energy report found U.S. NGL production in the region is projected to increase over 700 percent in the 10 years from 2013 to 2023.

Last month, President Donald Trump toured the Shell cracker plant. In a wide-ranging speech to workers, he expressed his administration’s commitment to supporting an Ohio Valley petrochemical buildout.

In July, a top Department of Energy official testified in front of members of the West Virginia Legislature that the federal government is prioritizing expanding the petrochemical industry in Appalachia.

“Federal efforts are strong and continue to gain momentum,” Steven Winberg, DOE’s assistant secretary for fossil energy, told the Joint Committee on Natural Gas Development. “We also recognize that others are doing a lot and we believe that together we can make this Appalachian petrochemical renaissance happen for the benefit of the industry, the region and the country.”

In addition to concerns over air pollution, those opposed to a petrochemical buildout in the region point to climate concerns. A report released earlier this year by a coalition of environmental groups estimates production and incineration of plastics in 2019 will add more than 850 million metric tons of greenhouse gases to the atmosphere, or equal to the pollution of building 189 new coal-fired power plants.

The report projected by 2050, emissions from the entire plastics life cycle could account for as much as 14 percent of the earth’s entire remaining carbon budget.

Based at WVPB in Morgantown, WV, Brittany Patterson covers all things energy and environment.

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Toyota Driving Demand For Solar Power in Central Appalachia

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Part of the 700-acre surface mine still remains to be reclaimed. Photo: Sydney Boles/Ohio Valley ReSource

This story was originally published by the Ohio Valley ReSource.

Automaker Toyota is planning to announce a major investment in solar and other renewable energy in Appalachia and the Southeastern U.S. The plan includes a massive new solar facility on an old surface coal mine property in Kentucky.

Sources close to the deal tell the Ohio Valley Resource that the Kentucky site is part of a much larger plan. Toyota plans to purchase as much as 800,000 megawatt hours per year, or roughly 365 megawatts, of renewable energy, primarily from developers in Appalachia and the South.

“A project of this magnitude is certainly significant,” said Alex Hobson, director of communications for the Solar Energy Industries Association, a leading industry research group. “You’re talking enough energy to power about 50,000 homes.”

Toyota has already undertaken ambitious energy efficiency goals, with a similarly sized solar array installed on its headquarters in Plano, Texas. But once completed, Toyota’s solar mega-project would place the automaker among the largest corporate investors in renewable energy.

The portion of the project scheduled to be built in Pike County, Kentucky, is a 15- to 20-year power purchase agreement. Partners in the development include: coal company RH Group; French renewable energy company EDF Renewables; and Adam Edelen, former state auditor and current candidate for governor in Kentucky’s Democratic party primary.

At 100 megawatts, the site would be largest solar array in Kentucky and, according to one of the project’s developers, would likely be visible from space. The project is expected to cost $130 million, will be built on a 700-acre reclaimed surface mine site and could create between 50 and 100 renewable-energy jobs in a region still reeling from the loss of coal employment.

Toyota declined to confirm the scope of the project. A spokesperson issued a written statement hinting at an upcoming announcement. “We have been working with certain electric power providers on a very innovative initiative.”

Developers say the massive project is a smart business decision that happens to make a larger point: It’s proving that Kentucky’s economic future is in energy production, but perhaps that energy won’t be limited to coal and other fossil fuels.

“It doesn’t matter whether you care about the environment or not, this is pure economics,” said Ryan Johns, vice president of business development at RH Group. In a nod to Toyota’s slogan, Johns added, “If we don’t diversify our thinking, we’re never going to be able to keep moving forward.”

Power Politics

Toyota’s power purchase agreement would be the final missing piece in a plan that had been in the works for several years. The idea began in 2016 as a conversation between Johns and his longtime friend Edelen, now a Democratic candidate for governor.

The pair were brainstorming ways to reuse previously mined land in RH Group’s portfolio, Johns said, when Edelen suggested a renewable energy project. “Well, I’m the coal guy,” Johns said, “So that gave us quite a good laugh.”

Edelen, who served as Kentucky’s state auditor from 2012 to 2016, said the pitch was immediately of interest to solar developers. “We’ve got a coal company that wants to partner with a renewable energy firm to do a renewables project on a mountaintop removal site and hopefully put a bunch of out-of-work miners back to work. The response was amazing,” he said. “And that’s when we knew we had lightning in a bottle.”

The project was in the works long before Edelen decided to run for governor. But in deep red Kentucky, Edelen acknowledges part of the appeal of the project is uniting people across diverse ideologies and backgrounds for a common purpose. The solar project was “just two Kentucky boys trying to help their community,” he said.

The optics of the announcement are certainly a boon to Edelen, a progressive running against more centrist and better-known opponents in the gubernatorial primary.

Johns acknowledged the challenge of building a large-scale solar farm in a Appalachia.“Solar’s not a new concept, but for here, it’s very new,” Johns said. “All the ancillary businesses that go along with a solar farm, those have to be created for here.”

Johns said he hoped to help other coal companies redevelop surface mine lands into solar farms if the Pike County site is a success.

Developers hope to break ground in summer 2019 and be fully operational by 2021.

Driving Solar

Hobson said businesses are pushing for renewable energy programs to meet corporate sustainability goals and to help their bottom lines.

Virtual power purchase agreements are a popular way that corporations have chosen to pursue renewable energy goals. In those agreements, a buyer, in this case Toyota, pays a fixed price to the seller for the energy that’s generated, but the specific units of energy generated at the site do not go to the buyer directly.

PPAs accounted for nearly five gigawatts of solar energy in the United States in 2018. For context, that’s 15.6 million individual solar panels.

Toyota’s partnership with RH Group is the part of the company’s goal of a net-positive carbon impact by 2050. The company’s central Kentucky plant has been implementing renewable-energy and energy-efficiency solutions for years, with LED lights and methane-capture technology systems already in place.

An investment of this size would make Toyota a significant player in what SEIA characterizes as a major push from corporations to embrace renewable energy.

Coal Country Solar

Adding 100 MW of solar energy would more than triple Kentucky’s existing solar energy output, which was less than 50 MW at last industry report. “An additional 100 megawatts in the Bluegrass State could produce enough electricity to power about 12,000 households,” said Hobson.

Restrictive net metering policies in Ohio Valley states have lowered the return on investment for residential and commercial consumers who install solar, and the region’s deep ties to the coal industry have made politicians reluctant to embrace renewable energy.

Still, the economics are clear. Because of cheap natural gas, dozens of coal-fired generators have been retired or switched to natural gas in the Ohio Valley alone. The federally owned utility Tennessee Valley Authority voted in February to close more of its coal-fired power plants in Kentucky and Tennessee despite opposition from elected officials including President Donald Trump and Kentucky Governor Matt Bevin.

Johns said he expected RH Group to continue as a coal-centered business, but he acknowledged that the writing was on the wall.  “We would love more than anything for coal to keep being mined,” he said. “But the reality of it is, on the power generation side, our customers are gone. They have switched to natural gas and diversified their portfolio.”

Johns said he hoped that the involvement of a coal company in a massive solar project would defray what he considered outdated rhetoric pitting coal against renewables. “In no way are we turning our backs on the fossil fuel industry. All we’re doing is adding to the growth Kentucky can have.”

This story was originally published by the Ohio Valley ReSource.


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Shading Out Solar: State Policies In Ohio Valley Dim Future Of Energy Jobs

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Solar panels installed at Arlie Boggs Elementary in Letcher county, KY. Photo: Tre' Sexton/Bluegrass Solar

When Jennie and Brian Kahly decided to move to a 150-acre family farm in West Virginia’s Preston County, they thought a lot about what type of farmers they wanted to be.

“We went ahead and made a list of values, and one of those values was to minimize our fossil fuel use,” Jennie said. “That doesn’t mean we don’t use fossil fuels. It means we make a conscious effort to minimize them.”

Farmers Jennie and Brian Kahly found WV law made it hard to finance a solar array. Photo: Brittany Patterson/Ohio Valley ReSource

Installing solar panels was high on their wish list. After two years of planning, this fall Possum Tail Farm began running on sunshine.

The Kahlys installed an 18-kilowatt solar array. Fifty-two panels sit atop the steel roof that adorns the farm’s storefront. Inside, they sell cuts of the certified naturally-grown beef. Two inverters convert the energy created by the panels into electricity that can be used on the farm and sent into the grid. Anything extra they produce gets credited to their power bill.

In recent years, the cost of solar systems has dropped significantly, but it can still be a costly investment. The Kahly’s got three quotes for their system, ranging from about $20,000 to almost $50,000.

“We had to work out how to make it work financially and logistically,” Jennie said.

Inverters and an electric vehicle charger put solar energy to use. Photo: Brittany Patterson/Ohio Valley ReSource

As small farmers, the Kahlys qualified for two federal programs through the U.S. Department of Agriculture: a low-interest loan from the USDA’s Farm Service Agency,and a federal grant through the agency’s Rural Energy for America Program that covered 25 percent of the cost of the panels.

Without this federal assistance, they said, installing this solar system would have been out of reach. And in West Virginia, a complete lack of solar-friendly policies or incentives further complicated the financial picture.

Across the Ohio Valley, state adoption of solar policies looks like a patchwork quilt. Experts say weak policies make it harder for residents and businesses to afford to install a solar system and make it less likely that the region will attract jobs and economic benefits associated with this fast-growing industry.

Dim View

With less solar energy on the grid, consumers in these coal-heavy states have fewer options to counter rising power costs.

“If customers are able to get their own solar, that’s a hedge against rising electricity costs,” said Jamie Van Nostrand, director of West Virginia University’s Center for Energy and Sustainable Development. “You’re going to be able to generate your own electricity and pay your utility less because you’re basically buying fewer electrons.”

According to the U.S. Energy Information Administration, in 2017, coal-fired power accounted for 93 percent of West Virginia’s electricity, 79 percent of generation in Kentucky and 58 percent in Ohio.

Credit: Alexandra Kanik/Ohio Valley ReSource

As coal-fired power plants continue to shutter, rate-payers in Kentucky and West Virginia are footing the bill for decommissioning costs. Coal-heavy American Electric Power customers in West Virginia and Kentucky, in particular, have seen their power prices skyrocket. The utility’s customer base is also shrinking, which is further compounding the problem.

This week, the West Virginia Public Service Commission agreed to review a proposed 4 percent rate increase requested by Appalachian Power. The utility had asked for an almost 12 percent rate hike. This is on top of a 29 percent increase between 2014 and 2018.

Similarly, Kentucky Power customers have electricity bills that rank among the highest in the nation for an investor-owned utility, according to 2016 numbers from the EIA.

Credit: Alexandra Kanik/Ohio Valley ReSource

“There’s no question our electricity bills have gone up pretty dramatically the last three or four years because we’ve doubled down on coal in this state and the utilities have been able to purchase coal plants that were formerly owned by their merchant subsidiaries and put them in their regulated rate base,” Van Nostrand said.

He added that boosting the ability of individuals, businesses and municipalities to invest in solar could help control energy costs.

“It’s basically helping people to manage their electricity costs because our electricity costs are going up and they’re going to continue to go up,” he said.

Power Policies

There are two main policies that states can adopt that incentivize solar installation. Most states have one or both, but according to the National Renewable Energy Laboratory West Virginia and Kentucky have neither.

Credit: Alexandra Kanik/Ohio Valley ReSource

The first is called a third-party power purchase agreement, or PPA. That allows a private, third-party developer to install a solar system on your property and then sell you the power that that array produces at a fixed rate for typically 15 to 20 years.

Tax-exempt entities such as schools, churches and local governments especially benefit from PPAs, because they aren’t eligible for the 30 percent federal income tax credit. Beginning in 2020, the federal solar tax credit will begin ramping down.

“A power purchase agreement allows them to install solar with zero up-front cost, potentially lower their energy bills from day one, and it’s also a really popular way for commercial businesses to go solar on a larger scale than that business is potentially going to be able to invest in with their own capital up front,” said Autumn Long, program director of the nonprofit West Virginia Solar United Neighbors.

In West Virginia, power purchase agreements are illegal under current law. That’s something Long’s group hopes might change during this upcoming legislative session because they see it as a major barrier to bringing new business to the state.

“West Virginia has a lot of land that could be made available for this type of larger scale solar development if third-party developers were allowed to sell that power to willing buyers,” she said. “They’re out there and they represent major economic investments that we’re currently not taking advantage of.”

The second policy that can help boost solar is a Renewable Portfolio Standard, or RPS. These require electric utilities to procure a certain percentage of electricity from renewable sources, which creates a demand for renewable energy like solar. Individuals and businesses with solar panels can help utilities meet those goals and make some extra cash by selling renewable energy credits or certificates, also called RECs.

According to the National Conference of State Legislatures, 29 states, Washington, D.C., and three territories had adopted an RPS as of July, 2018. Eight additional states and one territory have set renewable energy goals.

Kentucky does not have one. West Virginia repealed its RPS in 2015 on a bipartisan vote. Opponents of the policy argued it was no longer economically in the state’s best interest.

Van Nostrand and others argue that the loss of the RPS means those who do install solar in these states are losing out.

“So you’re building solar panels in West Virginia, installing them in West Virginia, you’ve got the payments for the electricity itself, the electrons, but you’re not getting anything for the fact that those electrons are produced by renewable resource unlike Maryland, unlike Ohio, unlike Pennsylvania, unlike Virginia,” he said.

Jobs, Jobs, Jobs

Advocates for solar say the biggest thing at stake is jobs. In 2017, the U.S. Bureau of Labor Statistics projected that solar installer will be the single fastest growing job in the country over the next decade.

Already, employment data show states like Kentucky and West Virginia that don’t have pro-solar policies on their books are lagging behind their neighbors. According to the 2017 Solar Foundation solar jobs census, solar employs more than 6,500 people in Ohio. Kentucky has just under 1,300 solar installer, and in West Virginia it’s just over 300.

“I think with the right state and policy support, we can see a lot more of this development and attract a lot of jobs as a result,” said Dan Sawmiller, Ohio energy policy director for the Natural Resources Defense Council.

He and others have been working with utility American Electric Power in Ohio to leverage a massive proposed solar project to bring not only solar installers, but hopefully, solar supply chain manufacturers.

As part of a legal settlement, AEP is shutting down much of its coal-fired power plants and is asking regulators for permission to install at least 500 MW of wind and 400 MW of solar energy projects. Ohio has an RPS, but utilities in the state have largely met their renewable energy requirements by purchasing credits or RECs produced out of state.

“We set a goal of a minimum of 400 MW in the idea that a solar project at that scale is large enough to attract supply-chain manufacturing partners,” Sawmiller said.

That includes solar panel makers, but also companies that produce power inverters and more.

Once they’re here, it becomes more competitive to develop additional solar projects in Ohio, West Virginia and Kentucky.”

Solar panels now help power the Kahly farm. Photo: Brottany Patterson/Ohio Valley ReSource

Having a robust renewable energy policy on a state level can also affect job growth in another way. Increasingly, companies around the world are making commitments to source some, if not all, of their electricity from renewable sources, said Long, with Solar United Neighbors.

“And it’s not just Amazon, it’s GE and GM and Procter & Gamble which is already here,” she said. “Companies from automakers to textiles to food and beverage to tech companies to banks, all of them have signed on to 100 percent renewable energy and they all demand access to solar to meet those internal goals.”

Growing Greener

Back at the farm, the Kahlys are quick to note that installing their solar system was still a good investment despite the lack of state-level incentives.

An analysis of state policies from Solar United Neighbors. Credit: Solar United Neighbors

Brian, whose background is in computer programming, created a spreadsheet that breaks down the cost-benefit ratio. It shows that if energy prices remain steady, the system will pay for itself in about 15 years.

“If the price of energy goes up faster than that we make out sooner,” he said. “The life of the system is 25-30 years, so there’s a lot of time there yet in the future that then becomes all free energy.”

That sentiment is one Dave Fleeharty, with MTV Solar, hears a lot. The Berkeley-Springs, West Virginia, company installed the solar array at Possum Tail Farm. He said despite a lack of state-level incentives in West Virginia, they still do about half their business here.

“We’d love to see more state incentives, but the fact of the matter is we’re probably at the historical low for the cost of solar right now,” he said. “So even without any incentives we’re finding churches doing it that don’t have the tax breaks at all. It’s still a financially viable and smart investment with a very good return.”

By Brian’s count, the rate of return for the farm’s investment is expected to be somewhere between 7 and 8 percent at the end of 30 years.

“You’ve got to be a really good investor to have that kind of rate of return in the stock market right now I believe,” he added.

This story was originally published by the Ohio Valley ReSource.

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Appalachia Could Get a Giant Solar Farm, If Ohio Regulators Approve

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AEP's solar farm plan faces challenges as it goes through the regulatory approval process. Credit: Photo: Kerry Sheridan, AFP, Getty Images

AEP’s plan would bring jobs to an impoverished region, but its structure would break the established regulatory mold in a state that has pushed back on renewables.

Appalachian Ohio, a region hurt by the decline of coal, may become home to one of the largest solar projects east of the Rockies.

American Electric Power submitted a plan Thursday evening to work with two developers to build 400 megawatts of solar in Highland County, Ohio. It would more than triple the state’s current solar capacity and be a big step forward for solar energy in a part of the country where renewable energy has been slow to develop.

AEP says the plan would save consumers $218 million over 20 years because solar power from the project would be less expensive than conventional energy sources.

“This is something that Appalachia needs,” said Dan Sawmiller, Ohio energy policy director for the Natural Resources Defense Council. “The jobs of this renewable energy economy are going to go somewhere and I think it’s important that they go where they’re needed.”

But the project’s structure would break the established regulatory mold in Ohio, a state where utilities don’t own power plants and generators compete with each other to supply the cheapest power to the grid.

The savings and the jobs promised are a turnaround from the arguments state officials listened to when they rejected clean energy proposals in recent years. If the new plan is approved by Ohio regulators, it could serve as a template for other new projects in Ohio and in other states.

‘Just Transition’ in Appalachia

The decision to put the project in Appalachian Ohio, which covers the southern and eastern parts of the state, is part of an attempt to bring economic development to an economically depressed region.

“It’s a really hopeful move,” said John Quigley, director of the Center for Environment, Energy and Economy at Harrisburg University, who has written about so-called “just transition” for poor communities affected by the shift from fossil fuels to the new green economy.

“It’s an eye-opener for policymakers that there’s a huge economic development opportunity for solar, especially in communities negatively affected by the energy transition,” he said.

Another recent example is Xcel Energy’s plan to close its coal-fired power plant in Pueblo, Colorado, and build renewable energy projects there.

Highland County, Ohio, where AEP and its solar developers chose to build, has an unemployment rate higher than the state average, and nearby counties have some of the highest unemployment rates in the state. AEP says its plan would bring 3,900 new jobs, most of them in construction, plus 113 full-time jobs in solar manufacturing. Details on the manufacturing jobs were not immediately disclosed.

The plan is part of a boom in solar development that is happening across the country. Some other big solar projects have also been announced in the region but not yet built, including a 150 megawatt solar farm being developed by Invenergy in Hardin County, Ohio. The AEP project would go into service in 2021 if approved.

Challenging Ohio’s Regulatory System

This project is unusual for Ohio because a utility, AEP Ohio, would benefit financially from an electricity generation project. That would be normal in much of the country, but Ohio has a separation between utility companies and the owners of power plants.

AEP’s proposal is seeking to make an exception to this rule by having solar developers operate the solar farms on behalf of AEP Ohio. The costs would be passed on to the utility’s consumers, which AEP says is justified because of benefits to the environment and the local economy.

Opponents likely will argue that this violates Ohio’s open market for electricity generation. In the market, owners of power plants compete to offer the lowest prices and utility companies do not own power plants. More than a dozen states similarly have open markets for electricity generation, including much of New England and the Great Lakes region, and Texas, among others.

Ned Hill, an economist at Ohio State University, says that having a utility pay for certain power plants could stifle investment in competing projects—including other renewable energy projects. He has opposed previous proposals by energy companies and utilities to subsidize coal and nuclear plants, and says this plan is bad for some of the same reasons.

The Public Utilities Commission of Ohio will decide whether to approve the plan in a process that will unfold over the next few months and that likely will focus on the types of questions Hill is raising.

Sawmiller, from NRDC, said he can understand why there are concerns about what this project means for the competitive market, but he thinks the market is structured in a way that has held back renewable energy development.

“If you rely exclusively on the market you lose some of the innovative economic development that’s laid out in this filing,” he said.

This story was originally published by Inside Climate News.
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