Governor Blagojevich's Sustainable Energy Plan: Moving Illinois from Laggard to Leader

Editor’s Note: The following Power Point presentation was given by the State of Illinois’ Deputy Director of the Department of Commerce and Economic Opportunity (DCEO) Hans Detweiler at the Fourth Annual Ill. Renewable Energy Fair Aug. 13 at the Ogle County Fairgrounds in Oregon, Illinois. This information is very important for consumers and producers of energy in Illinois, as it is the latest update and the largest effort by the State of Illinois to date. The presentation has been edited for clarity in newspaper format.

One year ago…

Illinois had no stakeholder consensus on renewable energy development;

Utilities, Citizen Utility Board (CUB), American Wind Energy Association (AWEA) and environmental organizations were not finding common ground;

Only 0.5 percent of Illinois electricity was generated from renewable energy without a clear plan for improvement; and

Renewable Energy Standard legislation was stuck in the Illinois General Assembly.

Other State Standards Moving Forward…

Wisconsin: 4 percent today; 10 perent by 2015—adds 6 percent over 10 years

Texas: 2.7 percent by 2009

New Mexico: 10 percent by 2011

Very progressive standards Wisconsin, Minnesota, New York and to a lesser extent, Iowa.

18 total states with Renewable Energy Standards.

Governor Blagojevich’s

Sustainable Energy Plan

Presented in the February 2005 State of the State Speech:

Proposed Renewable Energy Standard;

Proposed Energy Efficiency Standard;

Achieved consensus on key points of key stakeholders;

Adopted by Illinois Commerce Commission (ICC) July 19, 2005

Renewable Energy Standard

Renewable Standard Adopted by ICC:

2 percent for 2007

Increasing 1percent per year to 8 percent by 2013;

75 percent from wind energy;

At least 2,000 Megawatts of wind energy installations anticipated in Illinois

Enough wind power for 1,000,000 homes

Renewable Energy Standard Defined

“Relying more on our homegrown energy sources will make our air cleaner to breathe and bring much-needed jobs and economic growth to our rural communities.”—Gov. Rod Blagojevich

“We believe the Governor’s sustainable energy plan will attract the necessary renewable generation to Illinois to make this program work.”—Steven Sullivan, Senior vice-president, Ameren

“We are excited to work with Gov. Blagojevich and the ICC to bring more renewable energy to Illinois.”—Frank M. Clark, president, ComEd

UIC Study on Clean Energy

Development Impacts

Meeting the Governor’s goal of 8 percent would:

Gain 7,800 jobs (including 1,800 directly in renewable energy);

Increase economic output by approximately $7 billion;

Increase household and business income in the state by about $1.8 billion;

Cut power plant pollution of sulfur dioxide and nitrogen oxides by 2012 by the equivalent of four typical mid-size power plants operating today.

Energy Efficiency Standard requirements

Energy Efficiency Standard adopted by ICC sets out:

Electric power suppliers to contract for energy efficiency and demand reduction services to reduce annual growth in electricity consumption by:

10 percent from 2007 to 2009

15 percent from 2010 to 2012

20 percent from 2013 to 2015

25 percent from 2016 to 2018

Utilities to submit plans to procure energy efficiency;

Current DCEO Energy Efficiency Fund $3 million per year;

Efficiency Standard value estimated at $40 million per year.

Adoption of Statewide Energy Efficiency Building Code for Commercial Buildings

Enactment of Commercial Building Code;

Capital Development Board as regulatory agency;

DCEO as lead education Agency;

Illinois now joins 38 other states with a statewide commercial building code.

Why Renewable Fuels?

Self-Reliance, Economic Development, Environmental Protection

Midwest, not Mideast: Biofuels reduce our dependence on imported transportation fuels (only 3 percent of gasoline nationwide today are biofuels);

Fields and factories: Ethanol and biodiesel production support local grain prices while creating jobs. The national demand for ethanol increases corn prices by 25 to 50 cents per bushel;

Biofuels from biorefineries: Today’s research is creating ethanol plants that produce ethanol, proteins, and numerous other valuable co-products;

Future generations: Biofuels reduce greenhouse gas emissions (GHG) and are cleaner-burning than gasoline and diesel;

10 percent ethanol blended gasoline reduces GHG emissions by 12-19 percent.

Ethanol Net Energy Yield:

Dispelling an Urban Legend: Net Energy Balance and Ethanol

Dispelling one current study, Argonne National Lab Study (Wang)—shows Corn Ethanol generates 35 percent more energy than it takes to produce.

USDA Study (Shapouri)—Corn Ethanol generates 67 percent more energy than it takes to produce.

Of nine major studies since 1995, eight find a significant, positive balance; the remaining one (Pimentel) is based on data as old as 1980.

See for more.

Ethanol Net Energy Yield

Three Key Factors Behind the continued increase in the Net Energy Balance of Ethanol:

Ethanol production—20 percent less energy is required for processing compared with only five years ago.

Corn production—Corn yields have doubled since the 1960s, and yields per energy unit have improved dramatically over 40 years—each 1 percent increase in yield raises the net energy value by 0.37 percent.

As biomass associated with current production is integrated, even greater efficiencies will be realized.

Governor Blagojevich’s Biofuels Policy

Supporting Production: Producer Incentives (biofuels production plants);

Supporting Utilization: Biofuels Sales Tax Exemptions as well as Fuel Infrastructure Development (E-85 Stations);

Supporting Research and Development: National Corn to Ethanol Research Center, SIU-E;

Supporting National Policies: 2004 Chairmanship of the Governors’ Ethanol Coalition;

State Government Leading By Example: Implementation of Executive Order 2004-7 on the Use of Biofuels;

DCEO Biofuels Programs:

Supporting Production

Renewable Fuels Development Program:

Provides grants of up to $5.5 million for new plant construction or expansion of at least 30 million gallons per year.

First grant of $4.8 million for Lincolnland Agri-Energy in Robinson, IL, a 40 million gallon per year ethanol plant.

Making Biofuels Happen: Crawford County, Ill., Lincolnland Agri-Energy.

DCEO Biofuels Programs:

Supporting Utilization

Gov. Blagojevich eliminated the state sales tax on E-85 (Ethanol at 85 percent per gal.) and B11+ (Biodiesel at 11 percent or more per gal.) biodiesel fuels, creating a 10-15 cent per gallon price advantage for E-85 fuel. B11+ fuels are actually cheaper per gallon than the current price of regular diesel—adequate production is the problem [see page 1A story “Energy Fair attracts thousands].

The Illinois E-85 Clean Energy Infrastructure Program: Provides grants to gas stations for E-85 equipment;

Grants of up to $2,000 for conversion of an existing facility to E-85 operation and up to $40,000 for a new E-85 facility are available;

Goal is to establish at least 100 E-85 stations by the end of 2006;

Supported by grant from Illinois Clean Energy Community Foundation.

DCEO Biofuels Programs:

Supporting Research and Development

Providing more than $1 million to the National Corn to Ethanol Research Center at SIU Edwardsville;

Conducting research to commercialize new technologies for producing ethanol from corn and cellulose;

Also other co-product research;

Energy yield and environmental analyses at Argonne National Laboratory;

E-diesel commercialization partnership with John Deere.

Ethanol from Biomass

Supporting National Policies

Ethanol from traditional sources can double or triple to 6 to 9 percent of national gasoline supply; beyond that, new feedstocks are needed.

Biomass is plentiful

Immediately available: corn kernel fiber

Also: Corn stover and cobs

Wheat straw

Papermill and wood wastes


Other low-value agr

icultural residues

Strong environmental benefits of ethanol from biomass

Ethanol from Biomass: Three GEC National Policy Recommendations

Enact a Renewable Fuels Standard requiring the use of at least 8 billion gallons a year of ethanol and biodiesel by 2012.

Amend the federal tax code to provide greater incentives for ethanol from biomass.

Design the incentives in a manner that does not penalize existing production.

Research and Development: $800 million over 10 years to address the “recalcitrance” of biomass.

Commercialization and Production Incentives: $800 million for commercial demonstrations of large-scale projects.

Initial goal of 1 billion gallons a year of biomass-derived ethanol

DCEO Biofuels Programs:

State Government Leading By Example

DCEO chairs the interagency working group implementing Executive Order 2004-7, focusing on:

Educating state employees to recognize E-85 capable Flexible Fuel Vehicles (FFV) in the vehicle fleet and to use E-85 fuel whenever practical.

Improving state fleet infrastructure to add new E-85 stations at state fueling facilities.

Procuring B-2 biodiesel (2 percent soy) for all state diesel fuel purchases.

Procuring E-85 FFVs whenever practical with future vehicle purchases, and seeking to purchase super-efficient hybrid-electric FFVs whenever practical.

Summary of Accomplishments

First-ever Renewable Portfolio Standard

First-ever Energy Efficiency Portfolio Standard

First-ever enactment of Commercial Building Code

First-ever creation of permanent of Renewable Fuels Development Program

Establishment of Sales Tax Exemptions for Renewable Fuels—both E-85 and B11

Tripled number of E-85 stations in Illinous

Governors’ Ethanol Coalition supportive of ethanol from new feedstocks.

Ethanol Environmental Benefits

Use of E-85 from current corn ethanol production reduces Green House Gas pollutants by 14-19 percent (Wang study).

Use of E-85 from cellulosic ethanol production with estimated 2010 technology reduces GHG pollutants by 68-91 percent (Wang)

In 2004, ethanol use in the U.S. reduced C02-equivalent GHGas emissions by 7.03 million tons, equal to removing one million cars from the road.

From the August 17-23, 2005, issue

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