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Tuesday, January 21, 2014

Tom Still: Striking an energy generation balance: Will Wisconsin be late for dinner?


By Tom Still
Matt Neumann's Pewaukee-based company, Sunvest Solar, is running hot these days. It has more than 210 solar energy projects in some phase of installation, he told attendees at a recent conference in Madison, but only one in Wisconsin.

Why? Perhaps because Wisconsin, unlike other states, has yet to officially bless third-party owned electric systems. Under this model, the contractor owns the solar panels and leases them to the building's owner, whether a business or a home owner, thus dramatically reducing initial costs to the consumer.

In case you think Neumann is a classic enviro-liberal, think again: He's the son of former Republican member of Congress Mark Neumann and a firm believer that the economics of solar power have improved to the point that it now makes sense – as in dollars and cents.

"Any conservative should be in favor of free-market competition," Matt Neumann said. "It's the energy industry competing for who can provide power for the lowest cost."

One speaker after another at the Renew Wisconsin Policy Summit cited examples of how other states, often Midwest neighbors but also politically "red" states around the country, are forging ahead with strategies that involve solar, wind, biomass and other renewable generation sources.

While state officials in Wisconsin are cautious about getting too far ahead of the market's ability to absorb such energy – and to get that energy where it needs to go – the industry trend is toward a portfolio that includes more renewables. In Wisconsin, which has a strong reliance on coal and natural gas from other states and nations, that trend may be unavoidable over time.

Not all renewables are created equal, however. Wisconsin has surprising advantages in solar energy and waste-to-energy digesters, for example, but not a lot of available wind energy sites large enough to support massive wind farms.

While solar energy has high upfront costs, the return on investment can be seven to 10 years, and the solar panels continue to provide energy for years to come.

Wisconsin is the nation's leading state when it comes to building digesters that convert dairy farm waste into energy – think tons of available cow manure – although other states are closing the gap. A Chilton-based company, DVO, is the state's leading producer of such digesters, but much of its work these days is spread from Vermont to Vietnam.

As pressure builds to contain farm waste from reaching groundwater and surface water, especially in parts of the state where the soil is relatively thin, digesters may help provide answers that keep the dairy industry and smaller farms in business. Wind power sites sometimes encounter local opposition, especially if they're big enough, and the power they produce can be intermittent. But many supporters of renewable energy think a logical solution is to tap into wind energy produced more steadily elsewhere, such as Minnesota, Iowa and across the High Plains, through transmission lines.

One such project on the docket in Wisconsin is a joint venture by Xcel Energy and American Transmission Company to build a high-voltage line, called the Badger Coulee line, to transport low-cost electricity produced by wind farms into the state's electric grid. Supporters say it will enhance reliability throughout the system while tapping into a renewable source.

Other factors may influence Wisconsin government and businesses over time. A coalition of Eastern states is petitioning for lower carbon and particulate emissions from Midwest states, and major companies everywhere are expecting other policies, such as a low-carbon fuels standard or a revenue-neutral "carbon tax," that will affect bottom-line performance.

Renewables won't be the only answer for Wisconsin, of course. Hydraulic fracturing and horizontal drilling are producing vast amounts of oil and gas elsewhere, and plans for next-generation nuclear plants are being touted as safer and less expensive. One thing seems certain, however: Wisconsin cannot afford to sit still while others around us embrace more comprehensive and economically sensible energy strategies.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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