Community Renewable Energy

As the next installment in our ongoing series on renewable energy, we examine the history of community energy projects and their role in the development of renewable power sources. To learn more about community energy projects, Paul Woodin gave CUB a briefing on his work as the Executive Director of the Community Renewable Energy Association (CREA). Here is a quick recap of Paul’s briefing.

After the Renewable Portfolio Standard was created in 2007, the Renewable Energy Working Group helped create state policy that indicated 8% of new generation capacity in Oregon should come from community or locally-owned renewable energy projects. In addition to this policy, it was also suggested that State Agencies should adopt favorable policies for achieving this goal. With the assistance of the Oregon Energy Trust, CREA has helped support and promote community renewable projects across the State of Oregon. CREA is a Chapter 190 organization comprised of 14 counties, the State of Oregon, and 25-30 private corporations and individuals. Although CREA works within the state, it is focused on addressing federal issues related to community renewable projects such as the investor tax credit, production tax credit, and other incentives.

Generally speaking, any project smaller than 10 MW that is owned locally or publicly by the community is considered a community renewable energy project. Some examples of currently operating community energy projects include small-scale hydro power and small wind farms. Small-scale hydro power can be found throughout the Cascade region, where irrigation systems can be fitted with small turbines to utilize the existing flow of water. The power generated from these systems is relatively small, but it significantly reduces the cost of operating the irrigation system. Small wind projects are another proven form of community energy. These projects are typically developed through public-private partnerships that use public land and can also take advantage of business tax credits and incentives. The partnership is able to generate revenue for both parties through power purchase agreements with utilities. In addition to these two examples of community power, there are projects in development that utilize a wide array of technologies, including solar, geothermal, biomass, and cogeneration.

Even though community projects provide benefits for many stakeholders, there are challenges that hamper their development. A major challenge to developing a community power project is that policy changes can quickly eliminate critical incentives or create new regulations that prevent a project from being completed as planned. Like any energy development, securing power purchase agreements for community projects can be difficult. Without dependable revenue there is no way to guarantee a project’s profitability. In Oregon, the Renewable Energy Working Group has established guidelines for negotiating power purchase agreements for community projects, but it does not guarantee a deal can be reached. In order to secure a power purchase agreement, community projects must already have or be able to develop reliable transmission infrastructure to the state’s grid. This can add additional costs to a project even though the power will most likely be consumed locally. In addition to these obstacles, there are also environmental and aesthetic considerations that must be taken into account when developing a community project. Getting buy-in from all stakeholders can be difficult since community power is, for some people, a relatively new concept that lacks widespread understanding.

Outside of commercial power, most power generated in the U.S. comes from community projects. Looking to the future, it will be important to continue developing community energy projects to promote renewable power and contribute to a diverse portfolio of energy sources. In order to do this, incentives at both the state and federal levels need to be dependable enough to minimize financing and construction setbacks, and strong enough to encourage development. Favorable power markets can also contribute to the growth of community projects by providing easily negotiated power purchase agreements and clearly defined revenue streams. As energy consumption increases, the definition of a community project may need to be expanded so that larger projects can be developed at the community level to meet rising demand.

Paul Woodin and CUB’s Jeff Bissonnette are both members of the state’s Renewable Energy Working Group. CUB and CREA have worked closely with each other in the past and hope to see the continued development of community projects in the State of Oregon.

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