Solar Goes From Gardens to Gigabucks

As reported in Wired Science

By Alexis Madrigal October 06, 2008 | 11:00:00 PMCategories: Energy  

FREMONT, California — Solar cells have been converting sunlight into electricity for years, but scientists have been much less successful at turning that technology into money.

Now, in a staid Bay Area office park, a converted hard-drive factory with a shiny new façade has begun churning out unconventional solar tubes that could change the economics of solar power.

The highly-automated factory belongs to Solyndra, a three-year-old company that has received $600 million in venture capital and $1.2 billion in orders for its new modules, which look like curtain rods. Those big investors are betting the company’s unique product will soon blanket commercial buildings across the world.

Instead of the standard panels mounted on racks that have dominated solar for the last 20 years, Solyndra’s cylindrical solar modules collect sunlight more efficiently across a broader range of angles and catch light reflected off the roof itself. The solar cells also contain no silicon, which has been a costly component of most solar systems.

Targeted at a highly specific market — office and big-box rooftops — and with signed contracts in hand, the company, along with a small cadre of other well-funded solar startups, are racing to turn their scientific and engineering marvels into profitable businesses.

The scramble, the money, and the size of the prize — a big slice of the trillions of dollars made in energy — remind the company’s founder, Chris Gronet, of his earlier experience in the industry that became the basis for the information revolution.

“We think the solar industry or market look very similar to the way semiconductor manufacturing was 20 years ago,” Gronet, Solyndra’s CEO, told Wired.com. “We say, ‘Wow this is familiar. We’ve been through this before.'”

All types of solar power have experienced growth in the wake of increasing awareness of the risks of climate change and the rising costs of fossil fuels. A report released last week by Lux Research, a solar-focused analysis firm, predicts that the total solar market will grow from $33.4 billion in 2008 to $100.4 billion in 2013. While traditional silicon-based solar cells continue to underpin most solar systems, there is a broad expectation among industry analysts and insiders that these new thin-film solar cells, such as Solyndra is making, will experience rapid growth. While thin-film cells aren’t as efficient at using the sun’s energy as their silicon competitors, they cost less to produce.

Instead of using wafers of material, a la computer chips or traditional solar PV, thin-film solar cells use tiny amounts of material deposited in ultra thin layers along the surface of glass or metal. In Solyndra’s case, vice president of business development Kelly Truman said that their process uses just a bit more than a micron of copper indium gallium diselenide, or CIGS. Using less of the expensive photovoltaic material drives the cost of their production down.

For years, CIGS technology had appeared the most promising for cheap solar power. The National Solar Technology Roadmap, created by the National Renewable Energy Laboratory, states that steady efficiency improvement “could ultimately allow CIGS to achieve the lowest module costs and levelized cost of energy among all PV technologies.”

The total solar market can be broken into three main pieces: solar for utilities, residential installations and commercial buildings. Solyndra is focusing exclusively on the commercial side. What Gronet envisions is solar panels installed on your average Home Depot or Ikea, generating a substantial percentage of the company’s power needs right on site.

On the roof of the Solyndra office buildings, they’ve installed the first Solyndra array. What’s striking about the system is how simple it appears: The solar tubes look like reverse fluorescent light bulbs that generate electricity rather than using it. The mounting system is also light and small, as you can see in the image. They don’t have to be bolted to roofs because the spacing between the cylinders makes them less susceptible to wind damage than traditional flat solar panels.

But despite the industry’s high hopes, CIGS solar cells have proven very difficult to manufacture at industrial scales. Greentech Media analyst Michael Kanellos said that the risks for CIGS thin-film players have “increased dramatically” over the last few months with the worsening financial system and increased competition.

“Some CIGS will survive, but a lot of these companies might only leave a wet spot on the pavement,” Kanellos wrote in an e-mail to Wired.com.

Kanellos noted that Solyndra’s cylindrical design was advantageous, but also the most difficult to manufacture.

“Everyone else is having trouble making efficient flat CIGS panels. Curving adds another layer of complexity,” Kanellos wrote. “It is part of the reason that their contracts call for the delivery of their solar panels from now to 2012.”

Only two other CIGS-based thin-film manufacturers have managed to start cranking out actual saleable product. Nanosolar and Global Solar started selling cells last year. Solyndra, after hundreds of millions of dollars of investment, generated its first revenue in the third quarter of this year.

If Gronet and his team can work out the manufacturing challenges and navigate the difficult financial waters, their unique design and tightly focused business model could lead them to profitability, even after government subsidies in Europe phase out.   

“In any unsubsidized world, which is a few years down the road, you need a cost structure that allows you to compete,” Gronet said. “Our panel, because it’s CIGS and thin film, will beat the costs of any silicon system.”

California’s First Solar Thermal Plant in 20 Years

As reported in Huffington Post Green

Written by Hank Green

Thursday, 23 October 2008

A funny thing about solar thermal. It works great, is cheap, easy to build, easy to maintain, and has been profitable for decades. But no one’s been building them!Why? Simply because utilities are too lazy to deal with developing new technologies and, in the absence of other pressures, would much rather just keep the status quo.So now that there (finally) are other pressures, like impending carbon taxes, pressure from state and national government to clean up power generation, and the possible end of the freaking world, we’re finally seeing solar thermal plants go online again. The first Californian plant in over 20 years went online today, in fact, on a nice sunny day. The plant is the first built by Ausra which is already planning a similar plant in Las Vegas. They’re somewhat famous for their claim that they could power all of America with a mere 92 square miles of land. While technically true, 92 square miles of solar is a pretty daunting project. The plant basically uses flat mirrors to concentrate sunlight on a pipe containing oil. The oil is heated to magnificent temperatures and then the pipe runs through a vat of water. The water instantly boils, creating steam that then drives a turbine, creating electricity. The plant is small, only 5 megawatts, but their second project, planned for next year, will be 117 megawatts. An average coal plant is roughly 800 megawatts. Solar thermal projects are particularly appealing because they produce most of their power when people are using the most electricity in warm climates (when all the air conditioners are on.) Other solar thermal start-ups (like eSolar) are working on their own similar systems to compete with Ausra. But right now, it looks like they’ll all succeed fairly well because desire for these plants far outstrips the capacity of the companies to build them.

Chicago Company To Build Wind Farm Downstate

As reported in Huffington Post Green

 An agreement has been reached between the developer of a McLean County wind farm and a group of landowners that opposed the project.

Invenergy Wind and the landowners settled their differences before a hearing on a civil lawsuit filed by the landowners was scheduled to begin Monday. No agreement details were made available.

Information is Power, representing the landowners, argued in its lawsuit that the McLean County Zoning Board of Appeals did not give ample opportunities for opponents of the wind farm to express their opinions.

Chicago-based Invenergy applied for the permit in August 2006. The zoning board recommended granting the permit in February 2007, and the County Board approved it the next month.

Of the 100 turbines in the planned project, 89 would be in McLean County. The rest would be in Woodford County.

Google’s Green Agenda Could Pay Off

As Reported in Huffington Post Green

By MIGUEL HELFT

 

Published: October 27, 2008

SAN FRANCISCO — Google, the Internet search and advertising giant, is increasingly looking to the energy sector as a potential business opportunity.

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Peter DaSilva for The New York Times

William E. Weihl, left, and Dan W. Reicher, who focus on environmental issues at Google, on the solar-paneled roof of the company’s headquarters in California.

Google’s Energy Ideas Might Emerge Under Open Source Licenses — Or Not

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Peter DaSilva for The New York Times

A Google worker trying to determine which of the company’s electric rental cars, which are powered by solar panels, is his.

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Peter DaSilva for The New York Times

Besides using solar panels at its headquarters, Google has invested in start-ups specializing in alternative energy, like wind.

From its beginning, the company has invested millions of dollars in making its own power-hungry data centers more efficient. Its philanthropic arm has made small investments in clean energy technologies.

But in recent weeks, Eric E. Schmidt, Google’s chief executive, has hinted at the company’s broad interest in the energy business. He also joined Jeffrey R. Immelt, General Electric’s chief executive, to announce that they would collaborate on policies and technologies aimed at improving the electricity grid. The effort could include offering tools for consumers.

Meanwhile, engineers at Google are hoping to unveil soon tools that could help consumers make better decisions about their energy use.

And while the company’s philanthropic unit, Google.org, has invested in clean energy start-ups like one that uses kites to harness wind power, Google is now considering large investments in projects that generate electricity from renewable sources.

“We want to make money, and we want to have impact,” said Dan W. Reicher, director for climate change and energy initiatives at Google.org.

The timing could be off. With a recession looming and oil prices dropping, investors might pressure Google to curtail its clean energy ambitions.

Google’s shares have lost more than half their value in the last year, and some analysts complain that the company has a long history of dabbling in new initiatives with mixed results. It still relies on one business — small text ads that appear next to search results and on other sites — for the bulk of its earnings.

And Google’s online success does not guarantee success in the energy business.

But none of this has deterred Google from going deeper into the alternative energy business. To support its efforts, it has hired a growing number of engineers who are conducting research in renewable energy, former government energy officials, scientists and even a former NASA astronaut, whose hands-on experience with all sorts of electronic gadgets is being put to use to develop energy tools for consumers.

“They are a high-profile actor in the energy field,” said Daniel M. Kammen, a professor in the energy and resources group at the University of California, Berkeley, and an adviser on energy to the Obama campaign. “Google is in the lead in terms of human resources as well as money.”

Last year, Google unveiled an ambitious initiative called RE C, denoting its goal to develop renewable energy that is cheaper than coal. Since then, much of the public focus on the initiative has been in the approximately $45 million in investments that Google.org has made in wind, solar and geothermal energy start-ups.

That effort now also includes a small but growing group of engineers at Google who are conducting their own research and development in those technologies, which Google said it might commercialize in the future.

Google.org also announced a project last year to develop plug-in hybrids. To make them widely available, the electrical grid would have to be upgraded so that cars could be plugged in at multiple locations, where they could be recharged and consumers billed.

Google now says it is interested in developing technologies to support some of those upgrades, as well as other tools at the intersection of energy and information technology, like “smart” electrical meters. The partnership with G.E. is aimed in part at exploring some of those opportunities.

Google has also increased its lobbying in Washington on energy issues. And the company is looking at larger investments in renewable energy projects that would be primarily motivated by their profit potential, not their environmental promise.

How far Google plans to go with its energy efforts, the company does not yet know, or at least is not willing to say.

“We have been debating, ‘What are the business opportunities for Google in this area,’ ” Mr. Schmidt, Google’s chief executive, said recently. “And I think right now, we would answer the question that our primary mission is one of information.”

Mr. Schmidt said that Google would be active in “information businesses or communications businesses” related to energy. Speaking more broadly about the energy sector, he added, “As to whether we will be in these other businesses, we will see.”

Google is known for stealth. The search engine company kept its advertising ambitions under wraps for years, a strategy that helped it become the dominant tech company in Silicon Valley. And with $14.5 billion in cash in the company’s coffers, it has plenty of resources to keep making further investments in new energy ventures.

Google’s efforts in the energy area remain relatively modest. The company has long said it assigns 70 percent of its resources to its core search and advertising business, another 20 percent to related business, like various Internet applications, and 10 percent to long-term, strategic projects. Its energy work falls in the last group.

But even that may be too much for some investors.

“With the stock cut in half and shareholders becoming increasingly frustrated, a lot of these initiatives are going to be called into question,” said Ross Sandler, an analyst with RBC Capital Markets. “Google is a search and advertising company. We are in a belt-tightening period. They should focus on the core business.”

And others still are raising questions about some of the company’s goals.

“The Silicon Valley guys have this idea that we are going to make solar cheaper than coal,” said John White, executive director of the Center for Energy Efficiency and Renewable Technologies. “To me that’s the wrong idea. I don’t think it needs to be cheaper than coal to be successful. The focus needs to be on the investment and deployment of the technology.”

Google’s commercial and philanthropic interest in energy emerged, in large part, from the intersection of its idealism and its business goals.

“The issue globally, and particularly in the U.S., is that renewable energy is hard to come by and is expensive,” said William E. Weihl, Google’s green energy director. “But as a competitive business, we can’t afford, anymore than anyone else, to say we are going to pay more.”

Google has gone to great lengths to conceal how much electricity it uses in its data centers. For instance, Google agreed to build a $600 million data center in Oklahoma only after the State Legislature passed a law exempting public utilities from disclosing the energy use of their largest customers. Google has also vowed to be carbon neutral, but unlike its rival Yahoo, for instance, it has refused to reveal its overall carbon emissions.

Google said that its power use was information that could be used by rivals to learn secrets of its operations, which it considered a competitive advantage.

Still, a picture of the scale of its data center operations has emerged through various reports. The company is believed to have about two dozen data centers around the world of various sizes. Some, like the one it built in The Dalles, Ore., which is largely powered by hydroelectricity, are among the largest in the industry. Two people familiar with that facility, who spoke on the condition of anonymity, said that it was operating at about 50 megawatts — enough to power 37,500 homes — but was built to handle even more capacity.

Google’s desire to better align its idealism and business interests helped motivate the REC project.

“For us to clean our energy supply, we need renewable energy available more broadly and more cheaply than it is today,” Mr. Weihl said.

Google does not maintain a strict divide between the energy work of the corporation and Google.org. A recent status meeting included employees from both sides. Google.org was set up not as a traditional philanthropy, but rather as a Google unit that could profit from its investments and that, unlike traditional nonprofit organizations and foundations, was allowed to lobby.

Google’s business development executives, as well as some company engineers specializing in energy, work with Google.org to make investment decisions. Mr. Reicher, a former assistant secretary of energy for conservation and renewable energy in the Clinton administration, said that Google.org investments were primarily aimed at pushing an environmental agenda. But Google itself is eyeing more capital-intensive projects, including some to generate renewable energy on a commercial scale.

“If we make those investments,” Mr. Reicher said, “it would be largely from a profit motive rather than an impact motive.”

Our Perspective:

Many of the larger corporations are taking steps to lead by example. Walmart, Target and now Google. This is very important, for it sidesteps the business as usual agenda. In the next 3 to 5 years, it is our hope that these projects will be mainstream and it will serve as a commitment to securing our energy future.

Let us know your thoughts? Leave a comment or email george@hbsadvantage.com

Should you want to know more about alternative energy opportunities or state and federal incentives for alternative energy projects, dfeel free to contact us.

New Jersey Landfills Capture The Methane They Produce, Turn It Into Energy

 

Written by David Porter As reported in Huffington Post Green

KEARNY, N.J. — Standing atop the 400-acre 1-E landfill, you get a panoramic view of the Meadowlands sports complex to the north and the New York City skyline to the east. You’re also standing on a critical part of New Jersey’s, and the nation’s, energy future.

Decades’ worth of household trash, construction waste and assorted refuse buried in the landfill are providing electricity to thousands of homes.

“It’s like you’re buying back your own garbage, but in a different form,” said Tom Marturano, director of solid waste and natural resources for the New Jersey Meadowlands Commission, which owns and operates the 1-E site.

The Kearny site is among 21 landfills in New Jersey where methane gas produced by decomposing garbage is used as fuel to generate electricity, according to the state Board of Public Utilities.

That is almost as many as in the state of Texas and more than the combined number in Georgia, Mississippi, Louisiana, Arkansas and Oklahoma.

Nationwide, the federal Environmental Protection Agency counts 455 landfills that use their methane to generate electricity and has targeted more than 500 others as potential candidates through its Landfill Methane Outreach Program.

One of New Jersey’s leading environmentalists envisions the state’s landfills someday making more use of the sites by installing wind and solar power to supplement methane.

“We see landfills as potential New Age energy plants because you can combine all three and create a steady source of power _ and not everybody wants a windmill in their backyard,” said Jeff Tittel, executive director of the New Jersey chapter of the Sierra Club.

Marturano cautioned that adding wind farms might take awhile because landfill surfaces are constantly shifting, but the Meadowlands Commission already has plans to install 20 acres of solar panels on the southern side of the 1-E landfill.

Gov. Jon S. Corzine’s Energy Master Plan touts landfill methane gas as one of the key renewable energy sources that the state hopes will combine to supply 30 percent of New Jersey’s electricity by 2020. According to the plan, New Jerseyans produce 6.7 pounds of trash per day, 50 percent more than the national average.

While wind and solar power are in their relative infancy in New Jersey _ Corzine recently announced the state’s first offshore wind power project _ landfills in the state have been collecting methane gas and using it as fuel to generate electricity for more than two decades.

Mike Winka, director of the Board of Public Utilities’ clean energy office, said new landfills in New Jersey are required to be designed to accommodate methane gas collection.

Existing landfills can produce methane long after they’ve been shut down.

For example, the freshest garbage in the Kingsland landfill, adjacent to 1-E, dates to 1987, according to Marturano. That means the half-eaten Big Mac you threw away near the end of the Reagan administration may be helping to light your neighbor’s home today.

Marturano estimates the 1-E landfill can keep collecting methane for 20 more years or so. He said the energy produced by the four landfills in the Meadowlands district powers about 25,000 homes.

The Edgeboro landfill in East Brunswick, operated by the Middlesex County Utilities Authority, has been collecting methane since 2001 and currently generates about 13 megawatts of electricity, enough for about 13,000 homes for a year, according to Public Service Electric and Gas, the state’s largest utility.

The Middlesex County agency uses the electricity generated by the Edgeboro landfill’s methane to power the county’s wastewater treatment plant in Sayreville. Last year, that saved the authority about $3 million, according to executive director Rich Fitamant.

Methane gas is produced by micro-organisms that feed on organic matter in trash. The bacteria are not picky eaters and have adapted to feasting on wood, cardboard or plastic if food waste isn’t available.

“It’s evolution on a fast track,” Marturano said.

Long tubes with perforated bases are drilled down into a landfill to collect the methane gas, which then is used as fuel to drive generators. Inactive landfills like 1-E are capped, usually with a plastic or rubber covering that prevents excess gas from escaping.

“People used to think of the landfills as wasted space,” Marturano said. “But we’re turning them from the juvenile delinquents of the district into productive members of society.”

Our Perspective:

New Jersey is taking great strides to make alternative energy available thru out the state.  The incentive now offered show less that a 5 year ROI.

Would you like to learn more email george@hbsadvantage.com

Clean Energy Outlook

Written by Clint Wilder as reported in Huffington Post Green

About 18 months ago, the clean tech buzz was all the rage. Billions of venture capital dollars were pouring in to clean energy technology startups, solar and biofuels stock prices (like the overall market) were soaring, and a new booming industry was well underway. Yet as soon as this happened, the voices of panic sprang up in Silicon Valley and beyond. Is this a bubble? It looks like another dot-com implosion waiting to happen! Be very afraid!

Now there’s a whole different kind of panic, reflected in recent stories in the New York Times, Washington Post, and many other outlets, about sudden big trouble in the clean tech sector. Oil prices have plunged and credit has dried up! Clean-tech stocks are way down! We can’t afford to fight climate change! Be very afraid! Drill, baby, drill!

I know it’s a lot to ask at a time when the Dow swings a couple hundred points every hour, but could we all please just step back, take a deep breath, and look at the long-term outlook? Of course a global slowdown/recession/worse will lower most economic boats (except hamburger sales at McDonald’s), including clean tech. But does the current fiscal mess change any of the fundamental drivers of clean energy growth: carbon-reduction imperatives, reducing dependence on foreign oil, reducing dependence on volatile fossil-fuel prices, and the need for innovation and job creation? It does not. And it’s worth noting that while falling oil prices grab the headlines, the price of coal — a much more important cost-comparison indicator for solar, wind, and geothermal developers — continues near record highs despite some recent softening.

The transition to a clean-energy economy is not some luxury that we can only afford in good financial times. In fact, it can easily be argued that investing in domestic production of solar power, wind energy, sustainable biofuels, electric vehicles, smart-grid technologies, and dozens of other clean-tech sectors may be the best way out of this fiscal mess. Many recent studies have reached this conclusion — check out the Center for American Progress’ Green Recovery report for the nation, and a UC-Berkeley study released last week detailing the positive impacts of energy efficiency and clean-tech development on the California economy. Clean tech is the “triple threat” that can address the Big Three challenges facing the United States: climate change, national security, and economic recovery. Sen. Barack Obama seems to get this, and the increasingly likely prospect of his election next week is another reason not to hit the panic button on clean tech’s growth prospects.

I’m not claiming that clean energy is recession-proof. Tight credit is slowing project investment, and jitters throughout the economy have many companies wary of new ventures. Clean tech is a full-fledged industry, not immune from forces affecting any other industry. There will be business cycles. There will be consolidation, losses, and layoffs. To some extent, these are growing pains experienced by all expanding industries, especially those that are technology-based.

It’s likely that when all is said and done by year’s end, the clean tech industry growth rate for 2008 may be down from the 30%-40% expansions we’ve seen in the last few years.

But let’s stay focused on the longer term. The current knee-jerk reaction of pegging clean tech’s prospects to today’s closing price for light sweet crude ignores so many fundamental drivers of the clean-energy economy around the world. And pooh-poohing clean energy as an unaffordable luxury in hard times smacks of the “we must choose between the economy and the environment” false dichotomy that’s been debunked time and time again (just ask Arnold Schwarzenegger). Perhaps it’s not a bad idea to invest in wind farms, solar technologies, and energy-efficiency retrofits instead of sub-prime mortgages and credit swaps?

It’s been said many times: every crisis equals opportunity. Let’s use the current crisis to accelerate the new energy economy, not retreat back into the old one.

Our perspective:

Becoming complaisant has brought us to our current energy situation. Over the last 35 to 40 years there were many signs that forecasted that a problem was looming. Because energy prices remained affordable, we tended to ignore the issue.

The future is now!

As a result, our demand continues to grow and we find ourselves not being able to service this growing demand in the near future. Let’s not wait until our backs are against the wall, we are already on the warning track. Federal and State incentives now provide the incentives to move this technology forward and make alternative energy mainstream. Spread the news, the future is NOW!

Let us know your thoughts? Leave a comment or email george@hbsadvantage.com

UK Is Now World’s #1 Offshore Wind Power Producer

As reported in Huffington Post Green

Treehugger   |  Matthew McDermott   |   October 22, 2008 04:26 PM

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With the completion of a new 194 MW wind farm off the coast of Skegness, Lincolnshire the United Kingdom has overtaken Denmark to claim the offshore wind power capacity crown. The new installation brings the UK’s total offshore wind capacity to 590 MW, which is approximately enough electric generating capacity for 300,000 homes. Denmark currently has 423 MW of offshore wind power capacity.

Offshore wind power in the UK is set to keep growing however:

The Guardian quotes a minister at the Department of Energy and Climate Change as saying that by the end of 2009, a further 938 MW of offshore wind power capacity will be added from projects already under construction. Further along in 2012, the London Array will add another 1000 MW of capacity.

Want to know more about alternative energy opportunities? email george@hbsadvantage.com

Alternative Energy Suddenly Faces Headwinds

 

George Frey/Bloomberg News

Wind turbines in operation at a wind farm owned by Edison Mission Group outside Spanish Fork, Utah.

By CLIFFORD KRAUSS

 

Published: October 20, 2008

HOUSTON — For all the support that the presidential candidates are expressing for renewable energy, alternative energies like wind and solar are facing big new challenges because of the credit freeze and the plunge in oil and natural gas prices.

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Markel Redondo/Bloomberg News

Heliostats redirect sunrays to a tower in Seville, Spain. Energy created at the plant provides electricity to thousands of homes.

Shares of alternative energy companies have fallen even more sharply than the rest of the stock market in recent months. The struggles of financial institutions are raising fears that investment capital for big renewable energy projects is likely to get tighter.

Advocates are concerned that if the prices for oil and gas keep falling, the incentive for utilities and consumers to buy expensive renewable energy will shrink. That is what happened in the 1980s when a decade of advances for alternative energy collapsed amid falling prices for conventional fuels.

“Everyone is in shock about what the new world is going to be,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, a California advocacy group. “Surely, renewable energy projects and new technologies are at risk because of their capital intensity.”

Senator Barack Obama and Senator John McCain both promise ambitious programs to develop various kinds of alternative energy to combat global warming and achieve energy independence.

Mr. Obama talks of creating five million new jobs in renewable energy and nearly tripling the percentage of the nation’s electricity supplied by renewables by 2025. Mr. McCain has run television advertisements showing wind turbines and has pledged to make the United States the “leader in a new international green economy.”

But after years of rapid growth, the sudden headwinds facing renewables point to slowing momentum and greater dependence on government subsidies, mandates and research financing, at a time when Washington is overloaded with economic problems.

John Woolard, chief executive officer of BrightSource Energy, a solar company, said he believed the long-term future for renewables remained promising, though “right now we are looking at tumultuous and unpredictable capital markets.”

Venture capital financing for some advanced solar projects and for experimental biofuels, like ethanol made from plant wastes, is drying up, according to analysts who track investment flows.

At least two wind energy companies have had to delay projects in recent days because of trouble raising capital. Several corn ethanol projects have been delayed for lack of financing in Iowa and Oklahoma since last month, and one plant operator in Ohio filed for bankruptcy protection last week.

Tesla Motors, the maker of battery-powered cars, recently announced it had been forced to delay production of its all-electric Model S sedan, close two offices and lay off workers.

Investment analysts say initial and secondary stock offerings by clean energy companies across global markets have slowed to a crawl since the spring, and for the full year could total less than half of the record $25.4 billion for 2007.

Worldwide project financings for new construction of wind, solar, biofuels and other alternative energy projects this year fell to $17.8 billion in the third quarter, from $23.2 billion in the second quarter, according to New Energy Finance, a research firm in London. The slide is expected to be sharper in the fourth quarter and next year.

In the United States, financing for new projects and venture capital and private equity investments in renewable energy this year might still top last year’s results because so much money was in the pipeline at the beginning of the year, but the pace has slowed sharply in the last month.

The next presidential administration, to make good on campaign rhetoric and continue supporting renewables, will have to choose alternative energy over other programs at a time of ballooning deficits. Analysts say that is no sure thing.

“Government funding for renewables is now going to have to compete with levels of government funding in other areas that were unimaginable six months ago,” Mark Flannery, an energy analyst for Credit Suisse, said.

The central questions facing renewables now, experts say, are how long credit will be tight and how low oil and natural gas prices will fall. Oil and gas are still relatively expensive by historical standards, but the prices have fallen by half since July. Some economists expect further declines as the economy weakens.

Wall Street analysts say most utilities and other builders can profitably choose big wind projects over gas-fired plants only when gas prices are $8 per thousand cubic feet or higher. Natural gas settled Monday at about $6.79 per thousand cubic feet, down from about $13.58 on July 3.

“Natural gas at $6 makes wind look like a questionable idea and solar power unfathomably expensive,” said Kevin Book, a senior vice president at FBR Capital Markets.

Government mandates already on the books, including state rules requiring renewable power generation and federal requirements for production of ethanol, ensure that to some degree, alternative energy markets will continue to exist no matter how low oil and gas prices go. But the credit crisis means some companies that would like to build facilities to meet that demand are going to have problems. “If you can’t borrow money, you can’t develop renewables,” Mr. Book said.

Renewable energy now meets 7 percent of the nation’s energy needs, and public subsidies have promoted a leap for several alternative energy sources in recent years.

Ethanol is sold nationwide as a gasoline additive, and federal legislation aims to replace a major share of the oil now imported into the United States with domestically produced biofuels in the next 15 years. Enough new wind power was installed in the United States to serve the equivalent of 4.5 million households in 2007, the third year in a row the country led all nations in new wind power.

Renewable energy has become a big business worldwide, with total investment increasing to $148.4 billion last year, from $33.4 billion in 2004, according to Ethan Zindler, head of North American research at New Energy Finance. Mr. Zindler said the upward momentum had halted, and that total investment this year was likely to be lower than last.

In the 1970s, just as in recent years, high prices for fossil fuels led to rising interest in renewables. But when oil prices collapsed in the 1980s, the nascent market for renewable energy fell apart, too. Congress eliminated tax credits for solar energy, ethanol could not compete with cheap gasoline and a wind farm boomlet in California failed to catch on in the rest of the country.

The epicenter of investment and development moved to Europe, with its strong government support for renewables, and began shifting back only when heating oil and natural gas prices shot up again in recent years.

There are some differences this time. Coal, another major competitor of renewables, remains expensive and is facing increasing scrutiny over environmental concerns.

Most important, renewable energy entrepreneurs and experts say, is the growing government and public backing for renewable energy in the United States.

“What is driving the market this time is that we’re at war and this is a security issue,” said Arnold R. Klann, chief executive of BlueFire Ethanol, a California company that is planning to make ethanol out of garbage with the help of $40 million in financing from the Energy Department.

In its recent financial rescue package, Congress provided $17 billion in tax credits to promote various forms of clean power, for everything from plug-in electric vehicles to projects that will capture and store carbon dioxide from coal-burning power plants. Production and investment tax credits were extended for wind energy for one year, geothermal energy for two years and for solar energy for a full eight years.

Meanwhile more than 30 states have enacted standards demanding that utilities generate a minimum proportion — typically 10 to 20 percent — of their power from renewable sources in the next 5 to 10 years.

But some analysts say the government supports may not be enough to propel continued growth for renewables, noting that several states have already relaxed their goals.

“When they can’t meet their targets,” Mr. Book said, “they change them.”

Our Perspective:

Let’s not take our eye off the ball. This is not the time to become complacent. As noted in the story the rally cries for the alternative market once existed in the 1970’s. As prices dropped so did the interest in developing the alternatives.

Today, the one big difference can be found in the incentives that have been put in place by both the Federal Government and multiple states. These incentives translate into a 4.5 years ROI for commercial businesses.

Energy demand continues to grow!

Based on a projected demand growth of 1.5%  per year for the next 8-10 years, we are faced with a real dilemma. The providers will not have enough capacity with their existing facilities to handle the additional growth in demand.

Are rolling brownouts really a viable option?

Let’s keep our eye on the ball and let our voices be heard. This is not the time to lose focus, for the only ones who will lose will be the American public.

Let us know your thoughts? Leave a comment or email george@hbsadvantage.com

The Economic Crisis and the Environment

 

Written by Michael Klare as reported in Huffington Post Green

Given the magnitude and scope of the current economic crisis, the world will no doubt experience a significant economic downturn — of what degree and duration, no one can say — profoundly affecting all aspects of U.S. and international society. Of the many areas that will be impacted by the downturn, the environment stands out in particular. It’s closely tied to the tempo of resource consumption, and significant efforts to ameliorate environmental decline will prove very expensive and out of reach for already-stretched budgets. The question thus arises: Will the crisis be good or bad for the environment, especially with respect to global warming?

To put this question in perspective, it is necessary to first look at the environmental situation prior to the crisis.

Gathering Crisis

 

By all accounts, the steady growth in the world economy — much of it driven by phenomenal economic expansion in China, India, and other nations — was producing a corresponding increase in demand for energy of all forms, especially greenhouse-gas emitting fossil fuels. According to the latest pre-crisis projections by the U.S. Department of Energy (DOE), combined energy consumption by all nations of the world was expected to grow by 22% between 2005 and 2015, from 462 to 563 quadrillion British thermal units (BTUs). Most of this increase, almost 90%, was expected to come from fossil fuels — oil, coal, and natural gas.

The result, not very surprisingly, was a dramatic projected increase in the emission of carbon dioxide (CO₂), the leading source of climate-changing greenhouse gases. Again using DOE projections, total world emissions of CO₂ were expected to increase by a frightening 22% between 2005 and 2015, from 28.1 to 34.3 billion metric tons. This increased rate of greenhouse-gas emissions would precipitate global climate change, resulting in persistent droughts, increased storm activity, and a significant rise in the sea level.

At the same time, however, the rising price of oil — itself caused by the sharp increase in demand — combined with growing awareness of the risks of global warming to create an unprecedented spurt in investment in alternative energy ventures. Many governments, energy firms, and venture capitalists have announced plans to spend vast sums on the development of climate-friendly alternative fuels and improved methods for obtaining energy from wind and solar power. In November 2007, for example, Google announced that it would invest hundreds of millions of dollars in the development of advanced renewable energy sources. These efforts, and others like them, wouldn’t reverse the trend toward higher CO₂ emissions between 2005 and 2015 but could set the stage for a dramatic turnaround in the years that follow.

How will the current economic crisis affect this picture? As in so many things, there’s both good news and bad news.

The Upside

 

The good news is that economic hard times will cause people to drive less, fly less, and otherwise consume less energy, thus lowering expectations for greenhouse-gas emissions. According to the most recent projections from the International Energy Agency (IEA) in Paris, global oil demand in 2008 will be 240,000 barrels per day less than in its earlier predictions, and 440,000 barrels per day less than in its predictions for 2009. Many experts believe, moreover, that demand will drop even further in the weeks and months ahead as the economic crisis deepens and consumers around the world cut back on their travel and energy use — and the less oil consumed, the less CO₂ emitted.

As petroleum consumption declines, the price of oil is also likely to drop — thereby discouraging investment in many costly and environmental hazardous energy projects.

Already, the price of oil has plunged by nearly half over the past three months, from $140 to $70 a barrel, and some experts see prices going even lower. Fifty dollars a barrel “is now within the realm of possibilities,” according to oil analyst Stephen Schork. At these prices, it may no longer be profitable to advance some of the more technologically challenging energy projects with a significant environmental risk, such as the development of Canadian tar sands or Rocky Mountain shale oil. These projects might make economic sense when oil is $80 per barrel or more — despite strong objections from environmentalists — but won’t attract support from investors when the price of oil slips much below this level.

The current economic crisis is closely linked with housing, and this too has a silver lining. Many dwellings built in the heyday of subprime lending were oversized homes in distant suburbs far removed from public transit, or second homes in Sunbelt vacation sites far from owners’ primary residences. These houses consumed a lot of energy and necessitated long commutes. Now, many of these exurban/vacation homes are up for sale and it is doubtful that many of them will be occupied for a long time to come. People are staying where they are, moving closer to public transit, and flying less to second homes. This will also produce a substantial decrease in energy use and CO₂ emissions.

The Downside

 

But there is a downside to all this as well. Most serious is the risk that venture capitalists will refrain from pouring big bucks into innovative energy projects. At an energy forum organized by professional services firm Ernst & Young on October 9, experts warned of a sharp drop-off in alternative energy funding. “The concept of alternative energy has a lot of momentum,” says Dan Pickering, head of research for Tudor, Pickering, Holt & Co. Securities in Houston. “But lower oil prices make it harder to justify investment. At $50 a barrel, a lot of that investment will die.”

Governments could also have a hard time coming up with the funds to finance alternative energy projects. Moderators at the presidential debates repeatedly asked both John McCain and Barack Obama what programs they would cut in order to finance the massive financial-rescue packages the Bush administration has engineered in order to avert further economic distress. Both insisted that their respective energy initiatives would be spared any such belt-tightening. It is highly likely, however, that costly endeavors of this sort will be scaled back or postponed once the magnitude of the financial rescue effort becomes apparent. The same is true for Europe and Japan, who have also pledged to undertake ambitious energy initiatives in their drive to reduce greenhouse-gas emissions.

Indeed, leaders of some European Union countries are calling for a slowdown in efforts to curb emissions of greenhouse gases due to the burgeoning economic crisis. Under a plan adopted by the EU in 2007, member countries pledged to reduce such emissions by 20% below 1990 levels by 2020, which is far more ambitious than the Kyoto Protocol. European leaders are scheduled to implement a detailed plan to achieve this goal by December of this year. But at a rancorous summit meeting of the EU heads of state in mid-October, Prime Minister Silvio Berlusconi of Italy and the leaders of some Eastern European countries indicated that due to the current crisis, they were no longer able to finance the high costs of attaining the 2020 goal and so weren’t prepared to adopt a detailed plan. “We don’t think this is the moment to push forward on our own like Don Quixote,” Berlusconi declared at the summit. “We have time.”

At some point, the price of gasoline will fall so low that many drivers will once again engage in the wasteful driving habits they may have given up when the price of gas soared over $3 per gallon. This may not occur right away. But with crude oil at $70 per barrel, half of what it was in August, a corresponding drop in the price of refined products will eventually follow. And that could lead people to see cheap gasoline as the one bright spot on an otherwise dismal horizon.

It’s unclear at this point whether the crisis will do more good or more harm for the environment. In the short term, it will certainly slow the increase in carbon dioxide emissions. It will also cause a delay in developing environmentally hazardous projects like Canadian tar sands. But if the crisis also sets back the development of energy alternatives for any significant length of time, it will cancel out any of these positive developments. Many people are waiting and watching what happens in the global financial markets. Likewise, the verdict is still out on the ultimate impact of the crisis on the environment.

• Environment
• Green Energy
• Financial Crisis
• Energy

Given the magnitude and scope of the current economic crisis, the world will no doubt experience a significant economic downturn — of what degree and duration, no one can say — profoundl…

Given the magnitude and scope of the current economic crisis, the world will no doubt experience a significant economic downturn — of what degree and duration, no one can say — profoundl…

George Soros: Investing In Green Energy Could Save Global Economy

As reported in Huffington Post Green

Last Friday, in an interview with Bill Moyers on PBS, George Soros, who has made billions of dollars based on his ability to read the ebb and flow of markets, suggested that investing in alternative energy technologies, refurbishing aging electricity grids and pursuing household energy efficiency, among other green strategies, could yet save the global economy.

Mr. Soros, whose prescient book “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means,” was published in May, told Moyers that the business of green could serve as the new “motor of the world economy” — echoing a refrain he has used before.

Click on link below to listen, with transcript to be found after the link.

http://greeninc.blogs.nytimes.com/2008/10/14/george-soros-on-the-green-energy-economy/

 

Excerpt transcript:

BILL MOYERS: So let’s think about those people down at Neely’s Barbecue going home tonight having heard you. What they’ve heard you say is the system is really disfunctioning right now. It’s out of control. Nobody’s in charge. They’ve heard you express your own worry that in the next three months it could get much, much worse.

And they’ve heard you say that you don’t see much good news immediately on the horizon. So let’s leave them something to think about as they go home. Let them go home and say, “Mr. Soros said here are three things we can do, simply.” One?

GEORGE SOROS: Well, deal with the mortgage problem. Reduce foreclosures. Recapitalize the banks. And then work on a better world order where we work together to resolve problems that confront humanity like global warming. And I think that dealing with global warming will require a lot of investment.

You see, for the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished. It’s run out of — can’t continue. You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come.

BILL MOYERS: Putting more money in, building infrastructure, converting to green technology.

GEORGE SOROS: Instead of consuming, building an electricity grid, saving on energy, rewiring the houses, adjusting your lifestyle where energy has got to cost more until it you introduce those new things. So it will be painful. But at least we will survive and not cook.

BILL MOYERS: You’re talking about this being the end of an era and needing to create a whole new paradigm for the economic model of the country, of the world, right?

GEORGE SOROS: Yes.

On Sunday, Mr. Soros blasted leaders of the United States and Europe for being “consistently behind the curve” in dealing with the global financial crisis.

“This is the crisis of my lifetime,” Mr. Soros told The Associated Press during the weekend meeting of the International Monetary Fund and the World Bank. “I haven’t seen anything like it and I won’t see anything like it again.”

It is also worth noting that despite his sanguine disposition toward clean-energy development, Mr. Soros has drawn jeers from green advocates — principally for his investments in sugar cane production (destined to become ethanol) in Brazil, which critics say is mowing down forests at an unprecedented pace.

Wrote The Washington Post last year:

“Deforestation in the Cerrado is actually happening at a higher rate than it has in the Amazon,” said John Buchanan, senior director of business practices for Conservation International in Arlington. “If the actual deforestation rates continue, all the remaining vegetation in the Cerrado could be lost by the year 2030. That would be a huge loss of biodiversity.”

The roots of this transformation lie in the worldwide demand for ethanol, recently boosted by a U.S. Senate bill that would mandate the use of 36 billion gallons of ethanol by 2022, more than six times the capacity of the United States’ 115 ethanol refineries. President Bush, who proposed a similar increase in his State of the Union address, visited Brazil and negotiated a deal in March to promote ethanol production in Latin America and the Caribbean.

U.S. companies and investors — including George Soros and agribusiness giants Archer Daniels Midland and Cargill — are staking out territory in Brazil, expecting even greater growth in biofuels.