Renewable resources

by Keith Nunes
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On March 10, the Environmental Protection Agency proposed the first comprehensive national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States. The proposal, combined with other efforts by the federal government, signals a significant push by the Obama administration for industrial manufacturers to consider investing in renewable sources of energy.

If the plan is enacted, the new reporting requirements would apply to suppliers of fossil fuel and large direct emitters of greenhouse gases with emissions.

Beau Griffey, an account manager with U.S. Energy Service, Plymouth, Minn., said the development of this proposed rule is worth watching as it may affect food manufacturers.

"Any plant that emits 25,000 metric tons per year will be required to report the levels of their greenhouse gas emissions," he said. "From your industry’s perspective, a food plant that burns natural gas in boilers that produce 460,000 mcf per year would, under the rules currently set out by the E.P.A., be required to report their emissions."

Mr. Griffey said the E.P.A.’s proposal, combined with the administration’s carbon emission cap-and-trade proposal currently contained in the president’s budget, would lead all industrial manufacturers to develop a better understanding of their emissions.

"Congress has not acted yet, but there is a lot of talk about it," Mr. Griffey said. "I think something will get done. With cap and trade, the E.P.A. is tuning up through the Clean Air Act to regulate the marketplace. As a result, companies have to pay attention to the rules and understand what their carbon footprint is."

While the federal government’s emissions and cap-and-trade initiatives may put pressure on companies, it also has created several options for those companies looking for financial assistance with regard to future technology investment. Contained within the American Recovery and Reinvestment Act of 2009 are several programs manufacturers considering alternative sources of energy may benefit from. Mr. Griffey said there are several financial assistance options companies may consider.

"A couple of things were extended and enhanced, such as the production tax credits (P.T.C.) program," he said. "For example, if you are selling energy to the grid that is renewable you can get a return on your investment in the form of a tax credit.

"Another thing they have is an investment tax credit (I.T.C.). They enhanced it from 10% to 30% and it has two features. With the tax credit, if a company purchases equipment that qualifies under the program they may receive up to 30% for the cost. It should be noted, however, this is an either or proposition. If you do the P.T.C. you can’t do the I.T.C."

The second feature of the I.T.C. is a bonus depreciation mechanism that allows companies to write off the depreciation of the equipment faster.

"Separately from those projects, there are some new renewable energy grants," he said. "If you have a project just about to start you may go to the Treasury Department and, if accepted, they can issue you a grant up to 30% of the cost."

Mr. Griffey added there is also money available to manufacturers at the state level.

"The Department of Energy was given a bucket of money, approximately $3.2 billion, to disperse toward projects that address energy efficiency," he said. "Each state can elect how they can use the money so it requires some investigation to find out what is available."

Gail Witham, vice-president of marketing for American Capital Energy, a solar power systems integrator based in North Chelmsford, Mass., said the federal and state programs are in addition to the net metering programs utility providers may offer.

"Net metering, where available, provides additional benefits," she said. "A roof or ground mounted solar array provides electricity needed to power the site and the surplus energy being generated on the rooftop or ground mounted array is sold to the utility. The difference between the energy used and sold is net metering and will drastically cut electrical costs and feed needed power to the grid."

She added there is no net metering standardization and what type of program is available varies by utility.

Mr. Griffey said companies considering making an investment in a renewable energy source need to do it on a facility-by-facility basis.

"First and foremost, facility managers have to ask what they have at their operation that may work with a renewable fuel source, whether it is solar or a digester," he said. "Step two, comb the state for whatever incentives are out there. There is a lot of interest in this area and people may be surprised by the resources they find available."

This article can also be found in the digital edition of Food Business News, March 31, 2009, starting on Page 25. Click here to search that archive.

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