SESSION: ALTERNATIVE USES OF RIGHTS OF WAY Highway Right-of-Way use for carbon sequestration, biomass production, and energy efficient lighting By: David Ponder, Good Company As state DOTs seek solutions to funding issues and enhance environmental outcomes, they have begun to explore opportunities to leverage their assets for sustainability value creation. One potential opportunity is the utilization of highway rights-of-way to for renewable energy development or the cultivation of vegetation for carbon sequestration and biomass feedstock generation. There is also significant opportunity for sustainability value creation from investments in energy efficiency particularly in roadway lighting. This presentation will summarize the finding of two recent research projects that considered these opportunities in detail. The first, NCHRP 25-35, Guidebook for Designing and Managing Rights of Way for Carbon Sequestration and Biomass Generation, evaluated the technical and financial aspects of carbon sequestration and bioenergy feedstock generation projects in the right-of-way. The second, Opportunities On The State Highway System To Generate Revenue Or Offset Expenditures For The State Of Florida evaluates the technical and financial feasibility of a number of sustainability value creation project types including solar photovoltaic energy systems and LED highway lighting. The presentation will include discussion of agency management considerations and policy frameworks affecting implementation, evaluation of cost-effectiveness and market prerequisites, and the potential for public-private partnerships. The presentation will also review the decision support tools for DOT personnel developed for these research projects. David Ponder offers technical and market research and analysis in service of Good Company’s clients in the transportation and energy infrastructure sectors. He recently completed research assesing the opportunity for renewable energy generation, carbon sequestration, and value extraction in highway rights-of-way for Florida DOT and NCHRP. David is the primary author of the Oregon DOT guidebook to developing Solar in the ROW and was instrumental in analysis for the development of Oregon’s Solar Highway Program. David has lead the the firm’s work for a municipal electric and water utility to produce annual sustainability reports and annual greenhouse gas inventories of its operations and power resource portfolio. Prior to joining Good Company, David served as a research analyst at the Appalachian State University Energy Center, and directed the Montana Public Interest Research Group for 5 years. SUSTAINABLE VALUE EXTRACTION FROM HIGHWAY RIGHTS OF WAY: A REVIEW OF CARBON SEQUESTRATION, BIOENERGY FEEDSTOCK & ENERGY EFFICIENCY OPPORTUNITIES TRANSPORTATION RESEARCH BOARD COMMITTEE ADC60 SUSTAINABLE AND RESILIENT INFRASTRUCTURE WORKSHOP JUNE 17, 2014 DAVID PONDER, ASSOCIATE, GOOD COMPANY MAKING SUSTAINABILITY WORK www.goodcompany.com Overview Review findings from two recent research reports NCHRP 25-35 Designing and Managing Rights-of-Way for Carbon Sequestration and Biomass Generation Opportunities on the State Highway System to Generate Revenue or Offset Expenditures for the State of Florida 3 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Our firm Good Company Sustainability research and consulting firm Mission-driven, for-profit Industries 4 transportation civil infrastructure clean energy and fuels public agencies TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com NCHRP 25-35 Carbon sequestration and bioenergy feedstocks While technically feasible constrained by: Safety and other considerations Clear zone and access control Limited market opportunity for commodities Carbon offsets (protocols not intended for ROW) Bioenergy feedstock (commodity value chain) Poor financial performance Carbon (carbon prices $5-$10/ tonne) Bioenergy (higher costs, lower yields in ROW) 5 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Safety and other considerations Reduces available ROW and increases costs Issue Standard/Practice Implications Clear zone No vegetation > 4-in. within ~30-feet of edge of roadway; allowable behind safety barrier Projects involving trees not suitable to clear zone Sight distance Limits on placement and maximum allowable height of vegetation Projects involving tall vegetation should not obstruct sightlines Access control Ingress and egress from roadway discouraged; new access on Interstate requires FHWA approval Projects that require frequent access via roadway not suitable Work zone Work on or off the shoulder requires traffic control; some states also restrict time, manner and place of equipment operation Projects will require traffic control Wildlife collision Vegetation maintained to discourage cover and reduce forage Projects involving highly palatable forage should be disallowed Shading and hazard trees Vegetation should be maintained to minimize risk of drifting snow, roadway shading or limbs and branches falling onto the roadway Projects involving trees should be appropriately sited 6 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Safety and other considerations DOTs should consider these as well Asset management Need to avoid conflict with existing and future infrastructure Environmental impact Need to balance project benefits against potential impacts (e.g. noxious weeds, water quality, GMOs) Regulatory and policy issues Business models, FHWA approval 7 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Carbon offsets Terrestrial carbon sequestration Carbon cycle Above-ground biomass Below-ground biomass Enhanced through Avoiding removals Increasing number of plants Boosting soil organic matter Can mitigate CO2 levels in atmosphere 8 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way Courtesy: TERC www.goodcompany.com Carbon Offsets Markets and quality standards Voluntary versus compliance market Compliance: smaller market, higher prices Voluntary: larger market, lower prices Offset quality 9 Real (ongoing monitoring) Additional (Δ beyond current practice) Independent (3rd party verification) Enforceable (contract) Permanent (min. 100-yr commitment, buffer pool) TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Carbon Offsets Key takeaways Potential projects limited by Protocol requirements and restrictions Limited demand and weak pricing for offsets Safety and long-term asset management concerns Conditions to monitor Protocol development and revisions Carbon policy and offset prices 10 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Biomass for heat and power 11 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Short rotation woody crops 12 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Short rotation woody crops Shrub Willow Crop • Coppiced • 20-25 yr. rotation • 3-4 yr. harvest cycle • 2-6 dry tons ac-1 yr-1 Hybrid Poplar 13 Agronomics • Plantation • 8 yr. harvest & rotation cycle • 2-6 dry tons ac-1 yr-1 Bioenergy opportunity / constraints Applicability to ROW Economic Feasibility • Industrial & electric power sector • No active buyers • Low maintenance • Small diameter • > 12’ tall at maturity • Potential cobenefits • Requires > 20 acre blocks • Not currently viable • Low yields • High production cost • Low prices • Industrial and electric power sector • Bioenergy use is secondary to higher, better uses • Limited maintenance • > 4” diameter at maturity • > 40’ tall at maturity • Requires > 20 acre blocks • Not currently viable • Low yields • High costs • Low prices TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Biomass for liquid fuels 14 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Oilseeds 15 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Oilseeds Crop Canola 16 Agronomics Spring/winter cultivars; rotated with wheat; GMO; 1,200-1,800 pounds/acre, 40% oil content Bioenergy opportunity / constraints Applicability to ROW Financial viability Biodiesel / commodity value chain (2% of canola oil serves biodiesel) Technically feasible; little to no large scale market opportunity • Not currently viable • Low yields • High costs • Low prices TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Bioenergy feedstocks Key takeaways Potential projects limited by Supply chain logistics Geography of the ROW High production costs relative to feedstock prices Safety and other management concerns Conditions to monitor Emerging technologies 17 Fossil fuel prices TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com FDOT Energy efficiency from LED lighting One of three concepts examined also looked at solar PV and haying LED Lighting 18 Saves energy, reduces GHGs Cost-effective Adaptive controls, increase energy savings Safety co-benefit TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com LED Lighting Potential roadway applications Conventional lighting High mast lighting www.goodcompany.com LED Lighting Financial analysis Comparison of Scenarios and Simply Payback 20 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com LED Lighting Potential business models Utility Incentives State DOT Funded Fund through DOT budgets; limited by budget availability 21 Energy Services Performance Contract ESCO provides the upfront financing; payment to ESCO and DOT based on the resulting energy savings TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way Partnerships Partner with municipalities or utilities to effectively install more lights www.goodcompany.com LED Lighting Key takeaways Rapidly evolving technologies Develop pre-qualified product lists No national guidance, yet WSDOT, MNDOT, CalTrans have specifications Financing a challenge Innovative business models exist 22 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com Thank you Questions and Discussion David Ponder, Associate 65 Centennial Loop, Ste. B Eugene, Oregon 97401 541.341.4663 ext. 214 david.ponder@goodcompany.com 23 TRB ADC 60: Sustainable Value Extraction from Highway Rights-of-Way www.goodcompany.com