Village Green News

Village Green’s new carbon offset launched this week, and with it many conversations are being sparked about the benefit of buying and removing carbon permits from the RGGI market.  This is great news, as we think a healthy debate about the effectiveness of voluntary carbon offsets is exactly what is needed.

The main issue that has been coming up in regards to purchasing RGGI permits as carbon offsets, is the fact that the RGGI market is seemingly oversupplied with permits at the initial level.  We have seen estimates that 2006 emission levels in the region were around 164 million metric tons of C02, whereas permits in RGGI represent 188 million metric tons of CO2 for 2009.  The reason for this potential over-allocation is the slower than expected growth in electricity generation.

So it would appear that purchasing permits out of an oversupplied market would lower the cap, but not actually reduce carbon emissions.  However, there is a crucial rule that ensures a purchase of a permit from RGGI forces a reduction in carbon dioxide emissions.  The rule is called “banking”, and it means that if there are excess permits available one year, power plants can save or “bank” these permits and use them in a later year.

For easy numbers, let’s say this year emissions are 9 tons and the cap is at 10.  Emitters will save that one extra permit for later years.  Then when the cap drops to say 8, they can use that extra permit to emit 9 tons.  So in these two years, 18 total tons would be emitted.

If instead, someone had purchased that extra ton in the first year, it couldn’t be used in a later year.  So emissions this year would be 9 and next year would be 8, for a total of 17 tons.

Because the market is currently oversupplied, it means that reductions can actually be purchased quite cheaply right now.  Removing one permit from the system will reduce one ton of emissions, whether the prices are at $1 or $100.

It is exactly correct that this approach would not work if the banking rule wasn’t in place, but because RGGI permits can be banked indefinitely, our methodology is still sound.

For more information, and for answers on all the questions that you may have regarding buying RGGI permits as carbon offsets, please visit our carbon offsetting FAQ page and don’t hesitate to give us a call if you want to chat more about this.

Thanks – Jordan Parrillo, Policy Director at Village Green Energy

Village Green Energy has launched a new carbon offset.  With the implementation of RGGI, the United State’s first ever cap and trade market, we are enabling our customers to interact with this regulated market and buy carbon permits out of the system.  With each permit purchased out of the system the cap becomes tighter and power plants are forced to cut emissions.  This effectively links a voluntary purchase to a compliance market for carbon, and because the number of permits is directly linked to total emissions, a customer’s purchase of one permit guarantees the reduction of a ton of carbon dioxide.

Village Green’s new approach to sourcing carbon offsets is picking up some steam.  Here is a sample of the press it has received thus far:

Ecopreneurist – Making Carbon Offsets Actually Work.  Affordably.

True Carbon - SF Company Claims Carbon Transparency

CARBONyatra – Carbon Offset Company to Buy RGGI Permits and Force US Power Majors to Cut Emissions

Alternative Energy Foundation – Village Green Energy Launches Revolutionary Carbon Offset

Our thoughts on Proposition 7 are that it does not actually advance the development of renewable energy in California, and therefore we will vote NO.  The pro-environmental initiative of requiring all utilities to buy 50 percent of their power from renewable energy sources such as solar, geothermal and wind by 2025 sounds great, and we are in full support of driving the transition to clean energy as soon as possible.  However, the way Proposition 7 is written, and a few specific provisions inside of it, will actually undermine the progress California’s Renewable Portfolio Standard (RPS) has currently created.

Specifically, Prop 7 contains a “competition elimination” provision that forces smaller renewable energy companies out of California’s market.  It says that renewable power projects smaller than 30 megawatts cannot count towards the new requirement.  Given that nearly 60% of the contracts under California’s RPS are with small generators that fit in this category, this would cut a major source of clean energy in the state.  Many of these smaller renewable power providers would be driven out of business, along with thousands of jobs.

So while the goal of Proposition 7 is admirable, we don’t think this measure will take us there.  California currently has a very ambitious mandate of 20% renewable by 2010, and a goal of 33% renewable by 2020, so here at Village Green we think we should focus on meeting these before changing the approach - and adding more complexities and potentially significant delays and added costs to the process.

Mostly biomass, but wind increased 50% since 2007. Too bad the PTC hasn’t been extended yet, or we could do another 50% by next year.

Read the coverage from Renewable Energy Access.

California’s Air Resources Board (CARB) released a report on Wednesday that analyzed the economic impacts of implementing the climate change law AB 32, which requires a statewide reduction of greenhouse gas emissions to 1990 levels by 2020.  The results indicate that the reduction measures will have a positive impact on economic growth in California by 2020.

The estimated economic benefits for California include:

♦ Increasing production activity by $27 billion
♦ Increasing overall Gross State Product (GSP) by $4 billion
♦ Increasing overall personal income by $14 billion
♦ Increasing per capita income by $200
♦ Increasing jobs by more than 100,000

The $4 billion increase in overall GSP represents 0.25% of California’s total $1.8 trillion GSP.  California has the seventh largest economy in the world.  The increased production, income and jobs are in addition to the environmental benefits of reducing greenhouse gas emissions.  These environmental benefits may prove to be vastly undervalued in current economic analyses, so the positive impact could be larger.

This report suggests that we can address the market failure that global warming presents, and internalize the market externalities associated with greenhouse gas emissions, while also adding to the long-term economic value of California.

To read the report go to the Air Resources Board website at
http://www.arb.ca.gov/cc/scopingplan/document/draftscopingplan.htm.

For the first time in the history of the United States, regulators will be forcing polluters to pay to emit carbon dioxide – the main contributor to global warming.  September 25, 2008 will mark one of the most significant victories for the environmental movement in our history.  On this day, America’s first mandatory carbon dioxide cap-and-trade system will launch.

This program is called the Regional Greenhouse Gas Initiative (RGGI) and will regulate carbon emissions in ten Northeastern and Mid-Atlantic states.  RGGI is similar to the European Union’s more established Emissions Trading Scheme (EU ETS).

The states pioneering RGGI have designed the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions.  In a cap-and-trade system, regulators decide how many tons of carbon can legally be emitted, and then the regulated entities, in this case power plants, can buy and trade permits to emit carbon.  Each permit is equal to one ton of CO2 emissions, and over time the government reduces the number of permits available, thus restricting the amount of carbon dioxide that is emitted.  RGGI permits will be auctioned off each year to the highest bidders, and the revenue generated will be invested in energy efficiency and renewable energy in the region as well as programs to combat fuel poverty and support consumers.

Opening the auction registration process, RGGI’s Executive Director Jonathan Schrag said, “This first RGGI auction is a historic moment. The auctions will spur innovation in the energy sector and we anticipate strong interest from bidders.”

Village Green Energy will be participating in the RGGI process, as we will begin offering carbon offsets with the implementation of this program.  We will help our customers buy carbon permits out of this market, thereby reducing the number available to the regulated polluters.  Similar to our method of selling RECs, this methodology will ensure that our offsets guarantee additionality and adhere to the highest environmental standards in our industry.

The renewable energy world received news last week that the two largest photovoltaic plants in the world are going to be built in California, and the power will be sold to Pacific Gas & Electric. This is a sign that utility companies are making the necessary investments to meet their mandated renewable portfolio standard (RPS). Furthermore, the significant scale of this project should encourage an increase in solar power investment.

With a combined maximum generating capacity of 800 MW, and an expected yearly output of 1.65 billion kilowatt hours per year, these two plants will put out more than 12 times as much electricity as the largest grid-tied photovoltaic installation in the world today. Comparatively, Spain has a 23 MW plant, Germany is building a 40 MW plant, and the Nellis Air Force Base in Nevada is currently the largest already-built solar power installation in the U.S with 14 MW.

Pacific Gas & Electric will buy the power from the solar plants, and will use it to meet their state mandated goal to get 20 percent of its electricity from renewable sources by 2010. Although the plants, being built by OptiSolar and The SunPower Corporation, are not expected to be up and running until 2012, this is still very encouraging news that the utility companies are building renewable capacity to keep up with their RPS.

This is also very encouraging for Village Green Energy, as our methodology is directly linked to generating more renewable energy in the states with renewable portfolio standards. Village Green is the only retailer that sources RECs exclusively from these compliance markets, guaranteeing the concept of additionality. This means Village Green is buying RECs away from electric utilities that need them to meet their state mandated quota of renewable energy, thereby forcing the utilities to buy more renewable energy to meet the quota.

So as plans for the two largest solar plants in the world were unveiled last week to be built in central California, customers of Village Green Energy should feel good about their efforts to drive the transition to renewable energy by voluntarily purchasing green power.

This news should also give critics of photovoltaic technology something to think about. The scale of the systems and the high costs of materials and connection to the electric grid are often cited as limitations for why solar energy can’t satisfy the energy-hungry needs of our society. But at this size, the plants’ costs would be much lower than photovoltaic installations of the past, and PG&E says they will be competitive with other renewable sources such as wind power and power from solar thermal plants.

If successfully built, these two gigantic plants can not only achieve economies of scale, but they also have the potential to significantly lower the manufacturing cost per unit, and be a major market driver towards the transition to clean energy.

Another encouraging sign earlier this month addressed the shortage of polysilicon, which has been a holdup for solar expansion. Polysilicon is a key ingredient used to make solar cells, and the rapid growth of the solar industry has caused shortages and pushed prices to over $400 per kilogram from just $30 a few years ago. In an effort to expand the supply of the ingredient and reduce the costs of solar energy, The World Bank made a $50 million investment in a Russian polysilicon producer, Nitol. Nitol’s projected output of 3,700 tons of polysilicon a year is about 9 percent of last year’s global supply.

Check out Shaq in a smart car. Go Shaq.

I’d like to take this opportunity to share a realization we came to today, here at the office.

Not one person on the Village Green team drives to work.

Two walk, two bike, and two take public transport.

“Warm and fuzzies”

Green My Vino Team:

As promised, we have more work to do. Burning Hawk and Seghesio are now on board and are looking for your support as they go green.

Send your Green Power Minutes for the day! We are bringing clean energy to wine country and it is pretty dang exciting if you ask me.

A bit about the new participants.

Burning Hawk is a new wine brand dedicated to supporting research that will protect raptors’ habitats and way of life. The brand was inspired by a tragic incident in which a hawk was electrocuted while perched on a power line and fell to the ground, causing a vineyard fire.
Burning Hawk donates a percentage of the proceeds from each bottle sold towards research that will prevent bird deaths of this kind in the future.

Burning Hawk also recognizes that climate change is a major threat to raptors. Thus, their commitment on Green My Vino is to purchase Solar Renewable Energy Certificates. Promoting solar accomplishes two things: it cuts down on the need for power lines, since solar power is distributed generation, and it mitigates climate change, protecting raptor habitats.

Seghesio Family Vineyards has been around since 1895! Wow. Being around for that long means you have the wisdom to respect long term, sustainability minded thinking. Seghesio undertakes many sustainability initiatives. For example, they already power half of their operations with solar and have adopted advanced watering techniques that have allowed them to reduce their usage by 20% since 2005.

Both Burning Hawk and Seghesio make delicious, globally responsible wines. Show them your support on Green My Vino and next time you are in the wine aisle.

Right on,
Robby Bearman