Tom Stoddard’s Recent Comments

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  15 - 45

  Please stay tuned.  AVEC has indicated that they will post a comment shortly after close of business AK time.On Legit or not? posted 2 years, 4 months ago 11 Responses

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  15 - 45

  Kayakkid and Pilgrim - your comments might have some merit if they were factually correct.  They are not.  The 15 and 45 are apples and oranges.  The 45 includes total grid and administration operating costs and the 15 does not.  Even Gar Lipow pointed that out.  Your continued reference to the reduction from 45 to 15 is disingenuous at best.

  Only AVEC can comment on the significance of the net operating savings.  We are not about to disclose AVEC's financial information.

  Our point is that we never relied on financial additionality with this project.  Even the UNFCCC Tool for the Assessment and Demonstration of Additionality makes clear that economic returns do not necessarily make a project non-additional.
  On Legit or not? posted 2 years, 4 months ago 11 Responses

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  NativeEnergy's Views

  Gar - NativeEnergy here.  Your article raises several important issues that are being vigorously debated by lots of people in this emerging market, and frankly, it asks the questions that should be being asked of all marketers.  I do, however, have concerns with some of your assumptions and conclusions.  They remind me how crucial education around the issues is, as misconceptions can arise even when some level of research is conducted.

  To clarify:

  *    You suggest that AVEC could simply have raised their wind power cost to their customers from 15 cents per kWh to 17 cents per kWh to cover the extra operations and maintenance costs.  That puts the cart before the horse.  If, as actually happened, the turbines needed significant reconfiguring following the testing period, or if there were other early breakdowns, as happened with its prior project, the turbines can't generate the power needed to obtain that extra 2 cents to pay for the reconfiguration or repair.  That's why we provided an O&M reserve, up front.  A project that isn't generating power cannot pay for its own repairs out of sales revenues.

  *    I never said that "offsets" are a nebulous concept.  I stated that "additionality" is a nebulous concept.  I do agree with you, however, that more analysis and detail is required in the offsets context than if we sold the RECs simply as green power.  NativeEnergy continues to be one of the longest and loudest proponents of that view.  The question is how much more is required?  With offsets, the market reality is that both sides of the equation, the footprint and the offset, must necessarily be estimated.  The National Association of Attorneys General Environmental Marketing Guidelines for Electricity (NAAG Guidelines) state that when a specific emissions claim is made, you need to disclose your basis for making the claim, and that disclosure "should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid deception."  The NAAG Guidelines do not require precision - just transparency.  

  *    Every detail on how we calculate the emissions reductions estimated to be produced by the projects we help fund is set forth at http://www.nativeenergy.com/how_we_calculate.html.  Our web site is replete with disclosures of both the fact that the claimed emissions reductions are estimated, and our methodologies for estimating them.  We do not, contrary to your suggestion, claim to offset "an exact amount of carbon emissions."  We claim to offset an estimated amount of carbon emissions, just as our customers estimate how much they want to offset.  We also employ significant discounting to ensure that our estimates are conservative.

  *    Additionality is a nebulous concept, and there is a great diversity of opinion on the subject.  The bulk of marketers take a very minimalist view, claiming that all renewable projects built after the inception of the market for green power are additional.  By contrast, we believe that additionality should be assessed on a project-specific basis whenever possible; and when assessed for a project group, discounting should be employed, which we do, to account for "false positives."  What is important to understand is that concluding that a specific project is additional necessarily requires exercising judgment in particular circumstances that are unique to that specific project.

  We were fully aware of the project's generation cost and the cost of the power it displaces.  We had extensive discussions with AVEC regarding the additionality of the project, its wind development efforts overall, the barriers it faced and that others face in trying to build and operate these projects in extremely remote and isolated areas and under extremely harsh conditions.  This direct relationship with the project developers is actually one of the major differences between NativeEnergy and others.  

  We looked closely at the project through the eyes of the United Nations Framework Convention on Climate Change Tool for the Assessment and Demonstration of Additionality, and we exercised our best judgment.  We concluded that this project faced significant technical barriers to successful operations (as opposed to construction) that could be overcome with our offsets revenues.  

  As in most matters of judgment, the yes/no line is seldom as bright as we might like.  So we seriously considered the potential ramifications of this project's success or failure for future wind development in Alaska Villages - the potential for a widespread view that "oh, AVEC tried wind turbines down in Toksook Bay and they just didn't work."  We also considered the potential drawbacks of committing to this project rather than others.  There is no shortage of projects that need additional revenues to get built or to operate successfully.  Demand for offsets is the real limiter.  We have no motivation to commit to a project we see as non-additional when so many additional projects are available.  Based on all these factors, we concluded that the AVEC project, our customers, the market and the climate were better served by our funding an adequate O&M reserve through offsets than not.  As none of the "revelations" in your article are news to us, we remain convinced.

  One final note - what the Oscars purchased did not come from NativeEnergy, nor did we put anything in the goodie bags.  
  On Legit or not? posted 2 years, 4 months ago 11 Responses

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  One more thought

  NativeEnergy again.  I may have left readers with the impression that our view is that no RECs from operating wind farms qualify as carbon offsets.  That's not the case.  Many, perhaps even most, wind farms would qualify as "additional" projects.  But we believe that additionality must be assessed on a project-by-project basis, however, and for our CoolWatts product, we do not do additionality assessments because there is no need to, for green power purposes.  We have in the past conducted project-specific additionality assessments and we do sell RECs from operating, additional projects to some of our business customers who choose that option.

  Ultimately, the primary distinction is not whether a given project is operating, but whether its implementation was, at the time, beyond business as usual.  That is critical to qualifying the RECs as offsets.  Among projects that are additional, it is a matter of taste whether one would want to have his or her purchase support an operating project or help build a new one.  We're pleased to offer both alternatives.On Among bad deals, TerraPass's methane offset project? posted 2 years, 7 months ago 7 Responses

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  questionable support

  NativeEnergy here.  I'd like to thank ltlf653 for pointing out an important distinction between buying green power (through RECs) and offsetting CO2 emissions, and for linking to our web site for more information.

  I'd like also to clarify NativeEnergy's view that while purchasing RECs absent demonstrated additionality isn't a waste.  Far from it.  "Using" clean energy through the purchase of RECs is valuable and beneficial to the market for clean energy and for the environment.  We commend Vail for its purchase.

  Nevertheless, the issue isn't merely one of semantics, and that's why we are careful on our web site to distinguish between our Green-e certified CoolWatts product - RECs from operating wind farms - which we sell as a green power option, and our "help build" RECs and offsets products that meet our additionality requirements (www.nativeenergy.com/additionality) and thus qualify as offsets for purposes of offsetting direct fossil fuel use, such as for driving, flying, heating and business process heating.On Among bad deals, TerraPass's methane offset project? posted 2 years, 7 months ago 7 Responses