Alternate, Alternative and Renewable Energy

“…water…the waves of our Great Lakes waters creates enormous energy. We are talking with businesses right now about coming to Michigan to convert water currents into electric currents.”

“…woods…The wood waste from the pulp and paper industry is being used to produce the next generation of biofuels.”

and later added “…hybrids, clean diesel, electric, fuel cells, flexfuel…; …solar…; …ethanol…; and …waste…” to the list.

The governor asked the Legislature “to set ambitious alternative energy goals for Michigan to produce 10 percent of our electrical energy from renewable sources by the year 2015 and a full 25 percent by the year 2025” (e.g., a Renewable Portfolio Standard, RPS) and “…pass tax incentives for anchor companies in the alternative energy sector that get their suppliers to also locate in Michigan.” Throughout the address the governor used the terms “alternative energy” and “renewable energy” interchangeably.

Defining the terms and the relationships

Over the past few years as interest and concern over energy have increased, various commissions, the Legislature and government officials have referred to, named, categorized, defined and included various sources in differing ways. Examples of this range from the long list which appears in the Michigan NextEnergy Authority Certification Guidebook to those in House Bills No. 4950, June 19, 2007, and No. 5028, July 17, 2007, and Senate Bills No. 1045, January 22, 2008, and No. 1041, January 22, 2008. While there are some common elements, each has changed, rearranged, added, modified or deleted items, terms, categories or definitions.

Let’s begin by identifying the terms and clarifying the definitions. The Energy Information Administration, U.S. Office of Energy Statistics defines the terms as follows:

Energy source: Any substance or natural phenomenon that can be consumed or transformed to supply heat or power. Examples include petroleum, coal, natural gas, nuclear, biomass, electricity, wind, sunlight, geothermal, water movement and hydrogen in fuel cells.

Primary energy: All energy consumed by end users, excluding electricity but including the energy consumed at electric utilities to generate electricity. (In estimating energy expenditures, there are no fuel associated expenditures for hydroelectric power, geothermal energy, solar energy or wind energy, and the quantifiable expenditures for process fuel and intermediate products are excluded.)

Renewable energy resources: Energy resources that are naturally replenishing but flow limited. They are virtually inexhaustible in duration but limited in the amount of energy that is available per unit of time. Renewable energy resources include biomass, hydro, geothermal, solar, wind, ocean thermal, wave action and tidal action.

Alternative fuel: Alternative fuels, for transportation applications, include the following:

• methanol

• denatured ethanol, and other alcohols

• fuel mixtures containing 85 percent or more by volume of methanol, denatured ethanol, and other alcohols with gasoline or other fuels — natural gas

• liquefied petroleum gas (propane)

• hydrogen

• coal-derived liquid fuels

• fuels (other than alcohol) derived from biological materials (biofuels such as soy diesel fuel)

• electricity (including electricity from solar energy)

“… any other fuel the Secretary determines, by rule, is substantially not petroleum and would yield substantial energy security benefits and substantial environmental benefits.” The term alternative fuel does not include alcohol or other blended portions of primarily petroleum-based fuels used as oxygenates or extenders; i.e., MTBE, ETBE, other ethers, and the 10 percent ethanol portion of gasohol.

The categories and subsets are shown in Figure 1.

Michigan

The (conventional) energy sources that have an established history of use in Michigan include petroleum, coal, natural gas, nuclear, biomass and electricity. Renewable energy sources that have been used and have the best potential for further development in Michigan include biomass, hydro and wind. Renewable energy sources that have been used or are operational on a trial or small scale basis and have lower potential for widespread further development in Michigan include solar, wave and tidal action. Alternative fuels which have recently been the focus of activity and have moderate to good potential for further development in Michigan include ethanol, biodiesel and hydrogen.

Pros and cons

The pros and cons associated with the use of (conventional) energy sources such as petroleum, coal, natural gas and nuclear which we currently rely on to provide the majority of our energy needs have been thoroughly debated and discussed. The issues include the economic, geopolitical and environmental aspects and impacts of their use. What have not been so thoroughly analyzed and evaluated in the current pursuit of renewable energy and alternative fuels are the economic, geopolitical and environmental aspects, impacts and consequences of their use. For example, a recent analysis prepared by CRA International found that: “Pending energy legislation in the U.S. Congress would likely have significant adverse effects on the economy and consumers — including 5 million lost jobs and $1 trillion in lost economic output.” Some of the provisions the study evaluated included the oil savings program, renewable fuels standard, and renewable portfolio standards. A study reported on by H. Josef Herbert of the Associated Press which appeared on page 7A of the February 8, 2008 Lansing State Journal, in part, found: “The widespread use of ethanol from corn could result in nearly twice the greenhouse gas emissions as the gasoline it would replace because of expected land-use changes. The study challenges the rush to biofuels as a response to global warming.”

Recommendations

There is still a long way to go in developing renewable energy and alternative fuels. The current generation of renewable energy technologies and alternative fuels should be measured and the next generation should be required to meet the following standards: It must be economically viable without incentives and legal or regulatory mandates; it must be operational and functional within the current infrastructure; and it must be compatible or cross functional.

In addition, there needs to be further development and use of cogeneration, distributed generation and power recovery options which offer rapid payback periods and high profitability; proven, large-scale renewable sources which are dispatchable rather than intermittent; more efficient and profitable production of clean fuels including natural gas, especially unconventional gas; cost-effective gasified solid fuels, including coal, refuse-derived fuels and biomass; and enhanced oil recovery techniques and methods (adapted from January 2008 issue of Power Engineering).

David Woltz, BA, MS, MBA,CPG, PG, RG is an economist, energy, natural resources, and environmental specialist with W.E.S. Corporation. His areas of expertise and experience include: business; economics and finance; energy and natural resource exploration, development, use and conservation; sustainable and renewable resources; and environmental management.

 

 

 

 

 

 

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