As reported in NJ BIZ

The Garden State’s status as a solar-energy leader will get a major boost Wednesday, when officials break ground on what will be the largest solar energy farm in the Northeast.

Con Edison Development, a subsidiary of Consolidated Edison Inc., and Texas-based Panda Power Funds plan to build a 20-megawatt solar farm on a 100-acre site in Pilesgrove. The installation, expected to go online in May 2011, will feature 71,400 solar panels and cost between $85 million and $90 million.

solar

A rendering of the solar farm, which will be the largest in the Northeast.

Con Edison Development and Panda announced their intent to partner on solar projects in April.

Steve Tessum, vice president of east region management at Panda and manager of the Pilesgrove project, said South Jersey was chosen as the site in part because of the state’s support of solar energy.

“We did look at other states,” Tessum said. “Quite frankly, the regulatory climate in New Jersey is friendly to somebody who wants to own and develop a solar-power utility.”

The farm will be connected directly to the electrical grid via the Atlantic City Electric distribution system, said Mark Noyes, vice president of Con Edison Development.

Noyes said the arrangement with Panda is a 50-50 partnership: Panda is taking the lead in development, Con Edison will take the lead in operations and energy management, and construction will be split.

“The reason it makes sense to partner with Panda is, much like our background, they’re developers and they know how to develop projects, whether natural gas and oil, wind, solar,” Noyes said. “The development expertise is really what drives the development.”

Noyes said the property had originally been slated for the development of 67 homes, each with its own septic tank.

“The town opposed that type of taxing, from an environmental and economic standpoint,” Noyes said. “The construction of those homes never got through the planning board, so we were able to go in and acquire that land from the local player for this solar farm.”

Tessum said the solar farm doesn’t require any municipal infrastructure development, as the housing plot would have.

Con Edison Development said the installation is expected to generate enough electricity to power 5,100 homes.

E-mail Jared Kaltwasser at jkaltwasser@njbiz.com

As reported in Northeast Energy update by Direct Energy

PECO Completes Second of Four Electricity Purchases for 2011
In the second of four purchases for the electricity to serve customers beginning in January 2011, moderate wholesale market conditions resulted in lower electricity prices compared to the company’s last procurement in June 2009. 

The September 2009 purchases resulted in a retail energy price of 9.16 cents per kilowatt hour (kWh) for PECO’s residential customers.  When combined, the June and September purchases result in a retail price of 9.41 cents per kilowatt hour (kWh) for PECO’s residential customers—or about a 4 percent increase compared to current prices. 

For the first time, PECO also purchased electricity for 2011 for its small and mid-sized commercial customers.  This recent purchase resulted in a retail price of 9.79 cents per kWh, about the same as current prices for these customer classes.

Because energy prices fluctuate, PECO is buying the electricity needed in 2011 at four different times in an effort to reduce the risk of purchasing electricity all at once when market prices could be high.  PECO will complete the remaining two purchases in June 2010 and September 2010.  The results of all four purchases will determine the price in which PECO’s customers will pay for electricity beginning Jan. 1, 2011 when rate caps expire. 

PECO is estimating an overall increase of 10–15 percent for customers once all procurements have been made.

To find out more information your electric cost beginning in Jan 2011, email george@hbsadvantage.com

Years ago, AT&T ruled the U.S. telecommunications industry. However, once deregulation was introduced, it opened the field to competition and allowed customers to shop for alternative carriers.

The same rings true for the energy marketplace, which saw deregulation gain momentum in the late 1990’s, giving customers a choice of energy suppliers, products and prices in their utility jurisdictions. There are approximately 20 states today with deregulated natural gas and approximately 15 with deregulated electricity.

Natural gas market

In the past 20 years, the majority of new electric generating plants have been designed to run on natural gas. When the pipelines were deregulated and the fuel was labeled “clean”, federal, state and local governments pushed for natural gas’s usage and consumers responded by using more gas every year since.

Natural gas has a relatively non-polluting production cycle and poses very little risk when it’s transported in pipelines. There also aren’t the emissions you have with shipping fuel by trucks and ships.

Yor current local utility provider buys natural gas in the wholesale market and then sells it to their customers at retail prices. We put our clients in a wholesale position. 

Expanding electricity

Unlike the natural gas market, it’s trickier to deregulate the electricity industry. Whereas the former has a direct line from well to pipeline to user, electricity comes from multiple sources, including nuclear, coal, oil, natural gas and renewable energies.

Deregulation of electricity allows for competion for the purchase of your electric supply in the local market and this means savings for you. 

Your natural gas and electric is still delivered by your local provider. Should there and be any service issues or disruption, your local provider is still responsible for servicing the account.

Hutchinson Business Solutions is an independent broker reresenting all the major deregulated providers selling natural gas and electric in the tri state area for the last 10 years.

We offer a free analysis of your current annual natural gas and electric supply cost. Our clients are finding savings from 11% upto 48%.

For more information and to order your free energy analysis email george@hbsadvantage.com

By John D. Sutter, CNN //
// -1) {document.write(‘February 13, 2010 — Updated 0103 GMT (0903 HKT)’);} else {document.write(‘February 12, 2010 8:03 p.m. EST’);}
// ]]>February 12, 2010 8:03 p.m. EST

Long Beach, California (CNN) — Microsoft Corp. founder and philanthropist Bill Gates on Friday called on the world’s tech community to find a way to turn spent nuclear fuel into cheap, clean energy.

“What we’re going to have to do at a global scale is create a new system,” Gates said in a speech at the TED Conference in Long Beach, California. “So we need energy miracles.”

Gates called climate change the world’s most vexing problem, and added that finding a cheap and clean energy source is more important than creating new vaccines and improving farming techniques, causes into which he has invested billion of dollars.

The Bill & Melinda Gates Foundation last month pledged $10 billion to help deploy and develop vaccines for children in the developing world.

The world must eliminate all of its carbon emissions and cut energy costs in half in order to prevent a climate catastrophe, which will hit the world’s poor hardest, he said.

“We have to drive full speed and get a miracle in a pretty tight timeline,” he said.

Gates said the deadline for the world to cut all of its carbon emissions is 2050. He suggested that researchers spend the next 20 years inventing and perfecting clean-energy technologies, and then the next 20 years implementing them.

The world’s energy portfolio should not include coal or natural gas, he said, and must include carbon capture and storage technology as well as nuclear, wind and both solar photovoltaics and solar thermal power.

“We’re going to have to work on each of these five [areas] and we can’t give up on any of them because they look daunting,” he said. “They all have significant challenges.”

Gates spent a significant portion of his speech highlighting nuclear technology that would turn spent uranium — the 99 percent of uranium rods that aren’t burned in current nuclear power plants — into electricity.

That technology could power the world indefinitely; spent uranium supplies in the U.S. alone could power the country for 100 years, he said.

A “traveling wave reactor” would burn uranium waste slowly, meaning a 60-year supply could be added to a reactor at once and then not touched for decades, he said.

Gates also called for innovation in battery technology.

“All the batteries we make now could store less than 10 minutes of all the energy [in the world],” he said. “So, in fact, we need a big breakthrough here. Something that’s going to be of a factor of 100 better than what we have now.”

Gates called for more investment in climate-related technology. He said he is backing a company called TerraPower, which is working on an alternate form of nuclear technology that uses spent fuel.

Money that goes into research and development will pay bigger returns than other investments, he said, especially if money goes into energy sources that will be cheap enough for the developing world to afford.

Clean energy technologies must be installed in poorer countries as they develop, he said.

“You’d be stunned at the ridiculously low costs of innovation,” said Gates, who received a standing ovation for his remarks.

If he could wish for anything in the world, Gates said he would not pick the next 50 years’ worth of presidents or wish for a miracle vaccine.

He would choose energy that is half as expensive as coal and doesn’t warm the planet.

Posted on Sun, Jan. 31, 2010

 

By Andrew Maykuth

Inquirer Staff Writer

In their exuberance, oil- and gas-industry officials repeat a single refrain when describing the natural gas from Pennsylvania’s Marcellus Shale:

A game-changer.

Tony Hayward, chief executive officer of oil giant BP P.L.C., was the latest to gush enthusiastically when he called unconventional natural gas resources like the Marcellus “a complete game-changer.”

“It probably transforms the U.S. energy outlook for the next 100 years,” Hayward said Thursday at the World Economic Forum in Davos, Switzerland.

The breathtaking emergence of natural gas as America’s energy savior was not in the cards. Just four years ago, after Hurricanes Katrina and Rita devastated Gulf Coast rigs and rattled gas markets, energy pundits forecast a bleak winter of short supplies, high prices, and low thermostats.

The vast scale of shale-gas resources has come into focus quickly, and industry officials are touting the possibility of steady supplies for decades to come.

The Potential Gas Committee in Colorado last year revised its outlook of America’s future gas supply – up 35 percent in just two years. The forecast was the highest in its 44-year history.

The Marcellus Shale is the nation’s fastest-growing producing area. Though it lies under five states, about 60 percent of its reserves are in Pennsylvania, according to Terry Engelder, a Pennsylvania State University geologist.

“In terms of its impact on Pennsylvania, this is probably without peer in the last century,” said Engelder, whose projections in 2008 alerted the public about the size of the Marcellus.

“America’s energy portfolio has undergone a first-order paradigm shift just in the last two years,” he said. “This is such an exciting thing.”

Not everyone has climbed aboard the bandwagon. Some environmentalists are uneasy about the hydraulic-fracturing process that has unlocked the shale gas. The technique requires the injection of millions of gallons of water into a well to break up the shale to initiate production.

And some analysts say they believe the gas industry’s estimates are too optimistic.

“I would look at all this with a bit of healthy skepticism,” said Arthur E. Berman, a Houston gas-industry consultant, who says he believes some operators have overstated the production potential and understated the cost of Texas shale-gas wells. His pointed criticism got him banished from one trade journal – and invited to speak at scores of investor workshops.

“Two years ago, we were talking about importing gas from the Middle East,” he said. “And now we have a hundred-year supply of domestic gas?”

Berman said he had been unable to conduct a similar analysis of Marcellus wells because Pennsylvania law allows operators to keep their production data secret for five years, unlike other states, where output is reported to taxing authorities promptly.

“If something looks too good to be true,” he said, “I need to look more closely.”

Questioning voices such as Berman’s are uncommon in the industry, which portrays natural gas as abundant, cheap, and cleaner than coal and oil – a domestically produced “bridge fuel” to ease the transition to renewable wind and solar generation.

For companies like UGI Corp. – the Valley Forge energy company that operates regulated utilities in Pennsylvania that sell natural gas to retail customers and operates unregulated subsidiaries that consume and transport natural gas – the Marcellus Shale represents a game-changing opportunity on several fronts.

“That activity in the Marcellus Shale is really a win-win, not only for our regulated business, but also our nonregulated business,” UGI chief executive Lon R. Greenberg told analysts in a conference call last week.

Officials at UGI and other Pennsylvania gas utilities say retail customers will benefit in the long run, as utilities begin buying their supplies from Marcellus sources, saving pipeline costs from the Gulf Coast.

UGI’s utilities are in a strong position because many of their 578,000 customers are in Marcellus cities such as Scranton, Wilkes-Barre, and Williamsport. The utility could eventually work out deals to buy gas directly from producers.

Though UGI has no interest in becoming a gas producer, the company is exploring the possibilities for investing in “midstream” pipelines that tie the Marcellus wells to the interstate pipelines that move gas to lucrative urban markets like New York. Expansion of the pipeline infrastructure is critical to opening the Marcellus to exploration.

In addition, UGI is looking at expanding its underground gas-storage operations in Western Pennsylvania, said Brad Hall, president of UGI Energy Services.

“There is a bit of a gold-rush mentality,” he said, “but in this case, there’s really gold.”

UGI may also reap some other, unintended benefits.

The company’s power-generation subsidiary last year announced a $125 million project to convert its aging Hunlock Power Station near Wilkes-Barre from coal to natural gas.

Hall said the decision was made before the Marcellus abundance was fully understood. But when the plant comes online in 2011, it is likely to find eager sellers of fuel nearby.

“It makes us look like we were really smart.”

 

 Did you know that Electric and Gas are no longer monopolies and due to deregulation you have a choice of who supplies your business with Electric and Gas services? 
Maybe you do know because you have been getting annoying sales calls telling you to switch but you think it is a scam.
Hutchinson Business Solutions (HBS) is an independent energy management solutions provider. Our clients are savings from 10% to 40% on their natural gas and electric supply cost.  You can save thousands and perhaps tens of thousands of dollars depending on how much energy you use.
 
Power to Choose
Thanks to a national energy deregulation bill passed in 1999, organizations in roughly two dozen states (CT, NY, NJ and PA included) can now manage and control their energy costs in ways never before thought possible. Before deregulation you had no choice. You did not need to pay attention to the energy markets and you simply paid the bill like everyone else. But today you have the power to choose your supplier! The savings will not come to you by default; you must actively make a choice. In a deregulated market you must decide who to buy from, when to buy, what type of service agreement, how long to contract or whether you should consider a market based (variable) rate. If you do not choose a new supplier the local utility by default will remain the supplier of your energy at the highest market rate permitted.
 
What was deregulated?
Simply put the supply portion of your electric bill. The utilities sold off their power plants, and now only own the transmission and distribution wires. They also serve as a ‘backstop’ for power supply to customers who do not shop for electricity. With the move to competition the utilities have separated their service into two parts:
  • Regulated distribution of power, which is still only provided by the utility, and
  • Supply (called BGS) of the electric commodity (open to competition)
Customers who choose an alternate energy provider still have their power delivered to them by their local utility, and will therefore contact their utility for any outage issues. Depending on your utility market after you choose a new supplier you may still get one bill from the utility with two company names on it or you may receive two separate bills; one from the utility for the delivery and the other from the new supplier.
Types of programs
 
If you have not chosen an alternate supplier you are paying a month-to-month variable rate based on filed tariffs. This is usually the most expensive type of rate that you can have since it is based upon the demand of the month in which you were billed. Like everything else in life if you wait until the last minute to buy it you usually pay more. If you choose a new supplier you have the option of remaining on a month-to-month variable rate or choosing to lock in today’s low rates for up to three years in most markets. Energy costs are at or near their all-time lows so it makes sense to lock in for as long as you can to hedge rising energy costs and inflation.
 
 
Types of Sales People
First you need to know if you are speaking with a direct sales person for one supplier or an independent broker that represents multiple suppliers. HBS in an independent energy broker that will present independent and unbiased recommendations for the best program that suits your needs. We offer a free analysis of your current natural gas and electric cost and we receive a small commission from the energy supplier so there is zero cost to you the customer. 
 
How does it work?
To begin, all we need  is a copy of your latest natural gas and electric bill from your local provider. You will also be asked to sign a letter of authorization which permits us to pull the annual usage from these providers. With this information HBS can go out to the deregulated market and get competitive bids for your energy needs. We will then present you with the best options and you choose to activate your savings.
 
If you activate your savings by choosing a new supplier there is no cost to switch. You get the same power, same delivery company, same poles, same wires and same meter. There will be no interruption or downtime of service. The only change will be a new bill in 45 – 60 days from a new supplier.
 
Today’s Economy is difficult at best and you owe it to your business to see if you can save your company money. You have nothing to lose and big savings to gain. 
For more information email george@hbsadvantage.com or call 856-857-1230

Current electric rates provide an open opportunity for alternative energy suppliers to communicate with commercial end users in deregulated electric markets.

New utility rules allow alternative electric companies to compete for your business.  Hutchinson Business Solutions (HBS) is an independent energy management solutions provider. We bring together the best electric suppliers in your state to bid on your commercial, industrial  electric supply. If you currently buy your electric from Jersey Central Power and Light (JCP&L), PSEG, Atlantic City Electric, or Rockland Electric Company or PPL in PA, than you have the power to choose your electric supplier and save money on electric. Deregulated electricity gives the customer the power to choose their electric supplier and save on energy.

Your local provider currently purchases electric on the open market at  wholesale prices, they then sell it to you at a retail price. We put our clients in a wholesale position and the savings fall to the bottom line. HBS clients are saving from 10% upto 40%.

Utility bills for electricity now include one total price for generation, transmission, and distribution. Deregulation means the generation portion (the supply) of the electricity service will be open to competition. Your local utility company will remain responsible for providing maintenance, customer services, and billing for the transmission and distribution of your electric.

A long time monopoly system of electric utilities has been replaced with competing suppliers. When competition is present in any market place, the end user benefits. Deregulation of energy markets give our clients the opportunity to compare rates of suppliers, decide who is the best fit for their energy consumption needs, and find savings in the deregulated market.

If you would like to know more about your opportunity for savings email george@hbsadvantage.com

Posted on Fri, Jan. 1, 2010

By Andrew Maykuth

Inquirer Staff Writer

When the Pennsylvania legislature approved electric competition 13 years ago, lawmakers imagined that one day most customers would shop around for the cheapest price or the best service – the way they now do with cell phone providers.

That hasn’t happened.

In two parts of Western Pennsylvania, where market rates rule, for example, less than 20 percent of residential customers have opted for alternative suppliers, despite offers of discounts ranging from 7 percent to 10 percent.

Instead of choosing a power supplier that would save a typical Pennsylvania household about $100 a year, residential customers there seem to be saying that the savings just aren’t worth the hassle of shopping.

“The idea was to give customers a choice,” said James H. Cawley, chairman of the state Public Utility Commission. “You can only do so much, and if people don’t help themselves, you can’t make them.”

But Cawley and others say they believe the climate might change dramatically in the next month as full competition is introduced to the vast territory in central and eastern Pennsylvania served by PPL Electric Utilities Corp., of Allentown, which has 1.4 million customers, nearly a quarter of the state’s total.

Today, state-mandated caps will be lifted in PPL territory – which includes parts of Bucks, Montgomery, and Chester Counties – and rates will go up about 30 percent. Five suppliers are blanketing the territory with ads and direct-mail offers of discounts that would cut the amount of the increase about a third.

Already, 148,000 customers, more than 10 percent, have signed up.

The experience in PPL territory will set the stage for the complete transition of Pennsylvania’s regulated electric utilities to open competition at the end of 2010, when rate caps expire for five remaining utilities, including the biggest, Philadelphia’s Peco Energy Co.

Power brokers are ramping up activity in the state now, with the aim of establishing a long-term presence. Cawley said he had talked to the electrical-generation suppliers, “and they think the Peco market is huge.”

If the industry’s experience in Western Pennsylvania is any indication, residential customers will be reluctant to embrace the change.

In areas served by Duquesne Light Co., of Pittsburgh, and Penn Power Co., of New Castle, Pa., where rate caps came off in recent years, only about one in five residential customers have switched suppliers – though a majority of commercial customers and nearly all industrial customers have.

“We and the utilities haven’t done enough to educate customers,” said Dan Donovan, spokesman for Dominion Retail, a nonregulated subsidiary of the Richmond, Va., energy company that markets in Pennsylvania.

Under the Electricity Generation Choice and Competition Act of 1997, utilities such as Peco and PPL Electric divested their power plants and became distributors that deliver electricity to customers. They earn profits only for the monopoly service they provide to all customers, such as billing and maintenance of distribution lines. Those charges are still regulated by the PUC.

Though the utilities are indifferent to which suppliers their customers choose, the PUC has ordered them to provide power to those customers who do not choose. A utility’s rate, which is an average price of contracts from power suppliers who bid at auctions, is called the default rate.

PPL’s default rate is 10.45 cents per kilowatt-hour, compared with prices of 9.38 cents to 9.52 cents per kilowatt-hour from alternative suppliers. The average Pennsylvania residential customer consumes 10,500 kilowatt-hours a year, so those pennies add up.

Donovan said many customers misunderstood the process of shopping for a generation supplier, whose charges typically make up about 70 percent of the total bill.

“It’s painless,” he said. “You still get one bill. It doesn’t change anything.”

Suppliers offering the best prices typically want customers to commit for at least a year. Some impose fees for early cancellation of the contract.

Cawley, the PUC chairman, said customers who did not switch often said they could not be bothered with shopping for savings of only $100 a year.

“That’s not serious money?” he asked.

Many customers also fear that by choosing a supplier other than their present utility, they will be penalized with poor service.

“It’s nonsense,” Cawley said.

Our Perspective:

We have found great opportunity for deregulated savings in the commercial market. 

 Hutchinson Business Solutions is an independent energy management broker. We have been providing savings in the deregulated energy market in the Mid Atlantic region for the last 10 years. We have strategic partnerships with all the major gas and electrical providers selling deregulation in the PPL territory.

Our clients are saving from 10% to 40% in the deregulated gas and electric market.

We offer a free analysis of your current energy cost from your local provider. All we need is a copy of your latest gas and electric bill.

If you would like to know more about the current market conditions and your opportnity for savings email george@hbsadvantage.com or call 856-857-1230

By Andrew Maykuth

Inquirer Staff Writer

Posted on Sun, Jan. 31, 2010

In their exuberance, oil- and gas-industry officials repeat a single refrain when describing the natural gas from Pennsylvania’s Marcellus Shale:

A game-changer.

Tony Hayward, chief executive officer of oil giant BP P.L.C., was the latest to gush enthusiastically when he called unconventional natural gas resources like the Marcellus “a complete game-changer.”

“It probably transforms the U.S. energy outlook for the next 100 years,” Hayward said Thursday at the World Economic Forum in Davos, Switzerland.

The breathtaking emergence of natural gas as America’s energy savior was not in the cards. Just four years ago, after Hurricanes Katrina and Rita devastated Gulf Coast rigs and rattled gas markets, energy pundits forecast a bleak winter of short supplies, high prices, and low thermostats.

The vast scale of shale-gas resources has come into focus quickly, and industry officials are touting the possibility of steady supplies for decades to come.

The Potential Gas Committee in Colorado last year revised its outlook of America’s future gas supply – up 35 percent in just two years. The forecast was the highest in its 44-year history.

The Marcellus Shale is the nation’s fastest-growing producing area. Though it lies under five states, about 60 percent of its reserves are in Pennsylvania, according to Terry Engelder, a Pennsylvania State University geologist.

“In terms of its impact on Pennsylvania, this is probably without peer in the last century,” said Engelder, whose projections in 2008 alerted the public about the size of the Marcellus.

“America’s energy portfolio has undergone a first-order paradigm shift just in the last two years,” he said. “This is such an exciting thing.”

Not everyone has climbed aboard the bandwagon. Some environmentalists are uneasy about the hydraulic-fracturing process that has unlocked the shale gas. The technique requires the injection of millions of gallons of water into a well to break up the shale to initiate production.

And some analysts say they believe the gas industry’s estimates are too optimistic.

“I would look at all this with a bit of healthy skepticism,” said Arthur E. Berman, a Houston gas-industry consultant, who says he believes some operators have overstated the production potential and understated the cost of Texas shale-gas wells. His pointed criticism got him banished from one trade journal – and invited to speak at scores of investor workshops.

“Two years ago, we were talking about importing gas from the Middle East,” he said. “And now we have a hundred-year supply of domestic gas?”

Berman said he had been unable to conduct a similar analysis of Marcellus wells because Pennsylvania law allows operators to keep their production data secret for five years, unlike other states, where output is reported to taxing authorities promptly.

“If something looks too good to be true,” he said, “I need to look more closely.”

Questioning voices such as Berman’s are uncommon in the industry, which portrays natural gas as abundant, cheap, and cleaner than coal and oil – a domestically produced “bridge fuel” to ease the transition to renewable wind and solar generation.

For companies like UGI Corp. – the Valley Forge energy company that operates regulated utilities in Pennsylvania that sell natural gas to retail customers and operates unregulated subsidiaries that consume and transport natural gas – the Marcellus Shale represents a game-changing opportunity on several fronts.

“That activity in the Marcellus Shale is really a win-win, not only for our regulated business, but also our nonregulated business,” UGI chief executive Lon R. Greenberg told analysts in a conference call last week.

Officials at UGI and other Pennsylvania gas utilities say retail customers will benefit in the long run, as utilities begin buying their supplies from Marcellus sources, saving pipeline costs from the Gulf Coast.

UGI’s utilities are in a strong position because many of their 578,000 customers are in Marcellus cities such as Scranton, Wilkes-Barre, and Williamsport. The utility could eventually work out deals to buy gas directly from producers.

Though UGI has no interest in becoming a gas producer, the company is exploring the possibilities for investing in “midstream” pipelines that tie the Marcellus wells to the interstate pipelines that move gas to lucrative urban markets like New York. Expansion of the pipeline infrastructure is critical to opening the Marcellus to exploration.

In addition, UGI is looking at expanding its underground gas-storage operations in Western Pennsylvania, said Brad Hall, president of UGI Energy Services.

“There is a bit of a gold-rush mentality,” he said, “but in this case, there’s really gold.”

UGI may also reap some other, unintended benefits.

The company’s power-generation subsidiary last year announced a $125 million project to convert its aging Hunlock Power Station near Wilkes-Barre from coal to natural gas.

Hall said the decision was made before the Marcellus abundance was fully understood. But when the plant comes online in 2011, it is likely to find eager sellers of fuel nearby.

“It makes us look like we were really smart.”

By KEITH BRADSHER
Published: January 30, 2010

Shiho Fukada for The New York Times

Components of wind turbines at a factory in Tianjin, China. Shifting to sustainable energy could leave the West dependent on China, much as the developed world now depends on the Mideast.

TIANJIN, China — China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.

As China takes the lead on wind turbines, above, and solar panels, President Obama is calling for American industry to step up.

China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.

These efforts to dominate the global manufacture of renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.

“Most of the energy equipment will carry a brass plate, ‘Made in China,’ ” said K. K. Chan, the chief executive of Nature Elements Capital, a private equity fund in Beijing that focuses on renewable energy.

President Obama, in his State of the Union speech last week, sounded an alarm that the United States was falling behind other countries, especially China, on energy. “I do not accept a future where the jobs and industries of tomorrow take root beyond our borders — and I know you don’t either,” he told Congress.

The United States and other countries are offering incentives to develop their own renewable energy industries, and Mr. Obama called for redoubling American efforts. Yet many Western and Chinese executives expect China to prevail in the energy-technology race.

Multinational corporations are responding to the rapid growth of China’s market by building big, state-of-the-art factories in China. Vestas of Denmark has just erected the world’s biggest wind turbine manufacturing complex here in northeastern China, and transferred the technology to build the latest electronic controls and generators.

“You have to move fast with the market,” said Jens Tommerup, the president of Vestas China. “Nobody has ever seen such fast development in a wind market.”

Renewable energy industries here are adding jobs rapidly, reaching 1.12 million in 2008 and climbing by 100,000 a year, according to the government-backed Chinese Renewable Energy Industries Association.

Yet renewable energy may be doing more for China’s economy than for the environment. Total power generation in China is on track to pass the United States in 2012 — and most of the added capacity will still be from coal.

China intends for wind, solar and biomass energy to represent 8 percent of its electricity generation capacity by 2020. That compares with less than 4 percent now in China and the United States. Coal will still represent two-thirds of China’s capacity in 2020, and nuclear and hydropower most of the rest.

As China seeks to dominate energy-equipment exports, it has the advantage of being the world’s largest market for power equipment. The government spends heavily to upgrade the electricity grid, committing $45 billion in 2009 alone. State-owned banks provide generous financing.

China’s top leaders are intensely focused on energy policy: on Wednesday, the government announced the creation of a National Energy Commission composed of cabinet ministers as a “superministry” led by Prime Minister Wen Jiabao himself.

Regulators have set mandates for power generation companies to use more renewable energy. Generous subsidies for consumers to install their own solar panels or solar water heaters have produced flurries of activity on rooftops across China.

China’s biggest advantage may be its domestic demand for electricity, rising 15 percent a year. To meet demand in the coming decade, according to statistics from the International Energy Agency, China will need to add nearly nine times as much electricity generation capacity as the United States will.

So while Americans are used to thinking of themselves as having the world’s largest market in many industries, China’s market for power equipment dwarfs that of the United States, even though the American market is more mature. That means Chinese producers enjoy enormous efficiencies from large-scale production.

In the United States, power companies frequently face a choice between buying renewable energy equipment or continuing to operate fossil-fuel-fired power plants that have already been built and paid for. In China, power companies have to buy lots of new equipment anyway, and alternative energy, particularly wind and nuclear, is increasingly priced competitively.

Interest rates as low as 2 percent for bank loans — the result of a savings rate of 40 percent and a government policy of steering loans to renewable energy — have also made a big difference.

As in many other industries, China’s low labor costs are an advantage in energy. Although Chinese wages have risen sharply in the last five years, Vestas still pays assembly line workers here only $4,100 a year.

China’s commitment to renewable energy is expensive. Although costs are falling steeply through mass production, wind energy is still 20 to 40 percent more expensive than coal-fired power. Solar power is still at least twice as expensive as coal.

The Chinese government charges a renewable energy fee to all electricity users. The fee increases residential electricity bills by 0.25 percent to 0.4 percent. For industrial users of electricity, the fee doubled in November to roughly 0.8 percent of the electricity bill.

The fee revenue goes to companies that operate the electricity grid, to make up the cost difference between renewable energy and coal-fired power.

Renewable energy fees are not yet high enough to affect China’s competitiveness even in energy-intensive industries, said the chairman of a Chinese industrial company, who asked not to be identified because of the political sensitivity of electricity rates in China.

Grid operators are unhappy. They are reimbursed for the extra cost of buying renewable energy instead of coal-fired power, but not for the formidable cost of building power lines to wind turbines and other renewable energy producers, many of them in remote, windswept areas. Transmission losses are high for sending power over long distances to cities, and nearly a third of China’s wind turbines are not yet connected to the national grid.

Most of these turbines were built only in the last year, however, and grid construction has not caught up. Under legislation passed by the Chinese legislature on Dec. 26, a grid operator that does not connect a renewable energy operation to the grid must pay that operation twice the value of the electricity that cannot be distributed.

With prices tumbling, China’s wind and solar industries are increasingly looking to sell equipment abroad — and facing complaints by Western companies that they have unfair advantages. When a Chinese company reached a deal in November to supply turbines for a big wind farm in Texas, there were calls in Congress to halt federal spending on imported equipment.

“Every country, including the United States and in Europe, wants a low cost of renewable energy,” said Ma Lingjuan, deputy managing director of China’s renewable energy association. “Now China has reached that level, but it gets criticized by the rest of the world.”