 |
 |
 |
 |
 |
|
 |
 |
 |
 |
|
 |
|
 |
|
 |
What is Energy Trust of Oregon? Energy Trust of Oregon, Inc. is an independent, non-profit corporation that seeks to change the way Oregonians produce and use energy. On behalf of Oregon customers of Pacific Power and PGE, Energy Trust invests in new projects that generate electric power from new renewable energy resources. Energy Trust also supports projects that allow Oregonians to use energy more efficiently. In 1999, the Oregon legislature adopted, and the governor approved, legislation establishing public-purpose funding to be used for new cost-effective local energy conservation, new market transformation efforts, the above-market costs of new renewable energy resources, and new low-income weatherization. The Oregon Public Utility Commission (OPUC) was authorized to direct the expenditure of the funds collected. Energy Trust was formed as a nonprofit corporation and entered into a grant agreement with the OPUC to manage a portion of the public purpose funds for certain energy efficiency and new renewable energy programs. Energy Trust began operations in March 2002. For more information on Energy Trust generally, see the Who We Are page. The Biopower program provides financial support for new biomass projects that generate electricity for PGE or Pacific Power customers in Oregon. Eligible projects use several types of organic material. Support may also be available for projects fueled by certain types of waste from manufacturing processes. The program also provides services to aid project developers and the renewable energy industries in building a healthy renewable energy business environment. Oregon law limits Energy Trust renewable energy funding to the portion of costs that exceed the value of the electricity at market rates. Energy Trust’s payment may not exceed these “above-market” costs. What biomass resources are eligible for funding through the Biopower program? The Biopower program seeks new projects that use organic wastes from plant, animal or human sources to generate electricity. Examples of eligible resources include:
In addition, Energy Trust will consider biomass projects using wastes from manufacturing and industrial processes that would otherwise be lost to commercial use, and which have no higher-value use than energy production. These projects will receive a lower priority than projects using organic or biological waste, and they will be considered as resources allow. For more information on this subject, see Energy Trust's Policy on Biopower Eligible Fuels. Energy Trust will not consider biomass projects that derive energy value from fossil or nuclear fuel, or are integrally related to the production of fossil or nuclear fuel. Energy Trust will not consider projects that derive energy value from discarded petroleum-based products such as plastics or tires. Where must projects be located? Because the Biopower program receives money collected from Oregon customers of PGE and Pacific Power, the program typically funds biomass projects that benefit those customers. Projects must typically either be inside the Oregon service territories of PGE or Pacific Power, or, if they are outside those territories, the project must deliver its power to PGE or Pacific Power for the benefit of their Oregon customers. Energy Trust may fund Oregon biomass projects located outside PGE and PacifiCorp territory, even if those projects do not deliver power to PGE or PacifiCorp, if the projects demonstrate new renewable energy technology or approaches. To discuss potential demonstrations, please contact program staff. Projects must be grid-connected. Does Energy Trust fund the production of ethanol, biodiesel or other biofuels? No. Energy Trust may fund only projects that generate electric power, not the
production of transportation fuels or other types of energy. Does Energy Trust fund existing projects? No. Energy Trust may fund new biomass projects, or new additions to existing biomass projects that increase the project’s electric generation over its historic output. Will Energy Trust support projects that mix renewable and non-renewable fuel? Projects may use de minimus quantities of non-renewable fuels (typically 1% or less), but beyond that level, projects that co-fire renewable and non-renewable fuels are not currently eligible for funding. What type of funding is available? Energy Trust can provide up to 100% of a qualifying project’s above-market costs. In return, Energy Trust takes title to a share of the green tags generated over the project’s operating lifetime. For instance, if a project were $1 million above market, and Energy Trust provided $500,000, Energy Trust would take title to one-half of the green tags. Energy Trust would take fewer tags if one-half the project’s tag output was worth more than $500,000 in credible tag markets. In most cases, Energy Trust pays the owner or developer over the first few years of the biomass project’s operating life, contingent on its electricity production. In the case of very small biomass projects, Energy Trust may consider a payment on commercial operation. Energy Trust will not make payment before a biopower project begins commercial operation. For selected projects, Energy Trust may be able to contribute funds toward feasibility studies. For instance, this may be appropriate when an applicant has a promising biopower concept, but lacks the information or resources to determine whether the project makes financial sense for them or for Energy Trust. Energy Trust is generally able to provide up to 50% of the cost of the feasibility study, up to an agreed-upon limit. What are “above-market” costs? Oregon law and the OPUC grant agreement under which Energy Trust operates allow Energy Trust to offset all or a portion of a renewable energy project's “above-market” cost. A project has an above-market cost if it costs more to build and operate than the project can earn in revenue. Energy Trust can provide up to 100% of the above-market cost of a new renewable
energy project. We determine exactly what portion of the above-market costs
we will pay on a case-by-case basis, considering factors including funding
availability, how much money the project needs, benefits of the project, and
whether the project can help transform the renewable energy market (e.g. by
reducing renewable resource costs or establishing a replicable model). How does Energy Trust determine above-market costs? Energy Trust calculates above-market costs through a net present value analysis. Costs to consider may include feasibility studies, development costs, capital equipment purchases, interconnection and power delivery costs, interest on debt, maintenance costs, fuel costs, labor costs, insurance, taxes and other items. Offsetting those costs, credits to the project may include sales of electric power to a utility or avoided purchases of retail power from a utility, the value of the project’s waste heat, the value of byproducts such as digested fiber, avoided landfilling or other disposal costs for biomass fuel, the value of accelerated depreciation, tax credits, grants and other items. The calculation includes a reasonable, risk-adjusted rate of return for the project owner. Energy Trust may adjust cost, expense, operating information and financing information provided by the applicant for evaluation purposes, after comparing that information to data for similar projects. Energy Trust's Policy on Above-Market Cost Methodology will provide you with greater detail on Energy Trust's procedures for evaluating the above-market costs of new renewable energy resource projects. Applicants considering a standard dairy project can review the incentive that Energy Trust may provide by using this spreadsheet tool. What role do green tags play in funding from Energy Trust? "Green tags" represent the environmental attributes of electricity generated from renewable resources. These attributes are created when a renewable energy facility generates electricity. Environmental attributes may be traded separately from the electricity generated by the system, as green tags. Green tags are sometimes called renewable energy certificates (RECs) or tradable renewable certificates (TRCs). When Energy Trust provides funding for a renewable energy project, it takes ownership of project green tags in proportion to Energy Trust’s share of the project's above-market costs and in relation to the market value for those tags. For instance, if the project is $1 million above market, and Energy Trust provides $500,000, Energy Trust will take one half of the tags generated over the project’s estimated operating life. If Energy Trust offers less funding than the tags are worth in credible green tag markets, then Energy Trust will reduce its share of tags on a negotiated basis. A copy of Energy Trust's Green Tag Policy is also available for your review. If I qualify for Energy Trust funding, can I also receive other subsidies? Yes. Energy Trust expects applicants to pursue all other applicable forms of funding so as to minimize the project’s above-market funding requirement. These may include Oregon Business Energy Tax Credits, federal production tax credits, state and federal accelerated depreciation, and other subsidies. In some cases, this may require applicants without a tax burden (municipalities, tribal entities or not-for-profit organizations, for example) to develop an ownership structure able to absorb available tax benefits. In addition, Energy Trust expects applicants to use the lowest-cost financing available, which in many cases may be represented by the Oregon State Energy Loan Program. In some cases, the Biopower program may be able to assist eligible projects in applying for grants, loan guarantees and other assistance from the Federal Government or other parties. How do I participate in the Biopower program? Interested applicants are encouraged to contact program staff before proceeding. If you decide to apply for funding take the following steps: download a copy of the Initial Application, fill out the application and submit it by mail or email Thad Roth. Please note that you may e-mail the form to us, but we will require a signed paper copy before we will begin to process it formally. This form will help Energy Trust understand who you are, what type of project you have in mind, and at what stage you are in the project development process. If your project meets threshold conditions, appears promising and is reasonably mature, Energy Trust may invite you to submit a Full Application. The Full Application will consist of a technology-specific form, plus a financial template. How do I request funding for a feasibility study for a biopower project? Funds may be available to share the cost of feasibility studies. Interested applicants should contact Thad Roth, Biopower Program Manager, at 503-445-7632. What happens if I am invited to submit a Full Application? The Full Application requests that you provide additional detailed technical and financial information on your proposed project and business plan. For those applicants invited to submit a Full Application, a complete response must include:
Submit a signed print copy of your completed Full Application materials to Energy Trust. The Financial Template must be submitted in electronic format, using Microsoft Excel (version 2000 or more recent), either via e-mail attachment, on a CD or on a PC-compatible computer disk. You do not have to submit a print copy of the Financial Template. Energy Trust will accept Full Applications by invitation only. For diary-based anaerobic digester projects, there is a slightly different process. Because we will calculate incentives for dairy projects on a standard basis using a spreadsheet tool, you will not need to submit the Financial Template with your Full Application. We will ask that you complete the Financial Template later, on project completion, to help us understand the costs associated with these projects. What if my project does not fit into one of Energy Trust’s technology categories? If your project concept does not fit easily into the categories represented by the technology-specific Full Application forms, or if the forms seem otherwise inappropriate to your project, contact Thad Roth, Biopower Program Manager, at 503-445-7632. What happens after I submit my Full Application? Energy Trust will evaluate all complete Full Applications submitted. As part of the review, Energy Trust staff may contact you to discuss your application. There will typically be at least one and perhaps more rounds of questions, designed to help staff understand the technology, business structure, and financing underlying your project. After the review is complete, we will share with you our conclusions regarding our above-market cost determination for your proposed project. Energy Trust may invite projects that best meet program goals to proceed to the contract negotiation stage. No potential award will be considered a commitment, and no obligations or legal relations shall exist between Energy Trust and any applicant until a final and binding contract has been executed by and between Energy Trust and applicant. What would be covered by a contract with Energy Trust? Energy Trust has prepared a generic term sheet describing the general issues to be covered in a contract. What timeline should I expect after I submit my application? The following guidelines describe the process for most applicants. Where unique circumstances dictate, Energy Trust staff may approve an altered timeline.
To improve Energy Trust programs and processes, program evaluators periodically seek to interview renewable energy project developers at various stages of the application process, as well as those who do not receive Energy Trust funding for their projects. If you are contacted by a member of our evaluation team, we hope you will share your experiences and your suggestions for improving the Biopower program. What criteria are used to evaluate an application? Energy Trust staff and consultants typically evaluate proposals using the following criteria:
If my project concept is not fully mature, can I still apply? Even if your project concept is not fully mature, you may submit an Initial Application. By doing this, you will help Energy Trust determine the number, size and type of projects likely to emerge in future years, thereby helping staff develop a plan and budget for the Biopower program. Energy Trust may also use the Initial Application to help it determine whether or not your project might qualify for feasibility study assistance. Can entities that “self direct” their renewables public purpose charge participate in the Biopower program? Yes, subject to certain limitations and requirements. For more information about the impacts of Energy Trust's Policy on Self-Direction, see the FAQ. Can I submit more than one proposal to the Biopower program? Yes. However multiple projects cannot
be proposed in a single application. Can I submit a proposal if I received financial support from Energy Trust for a separate project? Yes. In particular, we encourage
applicants to contact the
program to ensure that the loads served by the proposed biopower project are as efficient as possible. Will Energy Trust continue to fund biomass-fueled projects? Yes. As we learn more about how best to support these projects, the form of
the Biopower program may change. However, Energy Trust has made
a strong strategic commitment to developing biomass energy resources,
and, as funding permits, we expect to continue supporting competitive,
high-quality biomass energy projects in the foreseeable future. Where can I get more information on the Biopower program? For questions regarding the Biopower program, contact Thad Roth, Biopower Program Manager, at 503-445-7632.
Photo Top: Rough and Ready Lumber Company is using Energy Trust incentives to install a new high efficiency boiler and generator that will run on its sawmill's wood waste. |
|
| © 2008 Energy Trust of Oregon, Inc. | Contact the WebMaster |