In part, the 2009 stimulus bill was formulated by our legislative branch to get the deposit multiplier going through the grant funding of “shovel ready” infrastructure, healthcare and clean energy and efficiency projects. Since it is the current economic situation that needs to be jumpstarted, our politicians insisted that immediate economic effect was necessary. To this end, $43 billion dollars of grant money was allocated to clean energy and energy efficiency projects that were ready to start construction immediately.
Here is the rub. The lifecycle of large clean energy project is long (2-3 years for a decent size wind project). There are few clean energy developers that sit around with “shovel ready” projects waiting for the stimulus grant fairy to come and put a slug of grant money under their pillow. The time value of money prevents this tactic. By the time a project has become “shovel ready” the developer has already invested significant time, resources, and capital into getting it to that point. For example, it could take a year to negotiate and lock-up wind energy leases, and install meteorological towers to gather wind speed data on a site - next comes an arduous environmental assessment and permitting process. After that, a typical grid interconnection agreement can take 1.5-3 years to push through a PUC, and that is often needed BEFORE a power purchase agreement (PPA) can be negotiated with buyer! Finally, equipment procurement, wind turbine purchase agreements, and contractors must be lined up before you have a “bankable” project (i.e. before a tax equity investor will buy the project from you). A project is not “shovel ready” until it has all of these pieces in place. Morale of the story, this is not a fast process, and if there is no tax equity light at the end of the tunnel (i.e. September 2009 – through today) the process is often halted or delayed to preserve capital.
To be fair, there are the “lucky” distressed assets out there as a result of tax equity leaving the market in fall 2009. (Their wishes have come true, and projects that were ready to be scrapped as uneconomic are now looking very attractive). But for the most part, if a project was economic and “shovel-ready” without the grant money then it had already locked up its financing before being “shovel ready”.
The challenge for the Department of Energy and other governmental organization that are receiving these funds is to balance the pressure to get them out the door fast with the need to maximize the impact that they have. Not an easy task.
Saturday, April 11
Exciting Infrastructure Support for Plug-in Hybrid Electric Vehicle (PHEV) Adoption
Slowly but surely innovation in the automotive industry is pushing toward PHEV technology. On a recent trip to Shanghai, I spoke with the CEO of Ford, China. He believed the PRC officials in Beijing were going to leap-frog the U.S. - going straight from combustion engines to PHEV technology through blunt force (as is typical in China). U.S. national policy seems focused on providing incentives for consumers to purchase PHEVs (mostly in the form of rebates), and putting a gun to Detroit’s head by forcing PHEV innovation with strings attached to the bailout money.
Some controversy about the actual mpg performance of existing models has questioned the economic savings at the pump. Several DOE tests done under real-world driving conditions showed only 51mpg performance for vehicles that were capable of 100mpg performance under lab conditions.
Despite the challenges there are several firms who are locking-in their first mover advantage in the U.S. urban markets they think will be early PHEV adopters.
Two top competitors in this space are starting their efforts in California. Coulomb Technologies has plans to install 500 PHEV charging stations along California highways in 2009. Better Place is focusing on charging stations that also offer battery swap services. A San Jose news report stated that a Coulomb’s “ChargePoint” charging station was installed in twenty minutes and cost only $2,000 dollars (paid for by Coulomb). The unit is only three-feet high x one-foot wide and in this case they had strapped it onto a modified street lamp. Coulomb customers who have an account, sign-up for a access key, that when swiped at a charging station, opens the door to the outlet. Once plugged in, you close and lock the door (so that no one is tempted to unplug you). What I found fascinating was that Coulomb is emulating the electric utilities’ rate model by charging customers a “subscription fee” which blends the cost of the electricity that they consumed at the charging station with maintenance costs, and the up-front capital cost it took to install the station. Most importantly, the units have bi-directional metering so if your car is plugged into a charging station at a parking deck during peak hours, Coulomb’s software will stop charging your battery during those peak hours to help the electric utility “peak shave” demand. There is a revenue sharing business model with “hosts” who buy the charging stations, although this isn’t released. They have also integrated with Google Maps to not only show the location of charging stations in their network, but through their network software they can determine which station is occupied at a given moment. This will allow customers to plan their route and choose the closest unoccupied station. The company has already formed a joint venture with a German company to distribute Charge Point stations throughout Europe, the Middle East, and Asia (EMEA). Although GridPoint’s V2Green has through their partnership in the “Pecan Street Project” marked Austin as their target. There are two PHEV vehicles on a proof-of-concept project with Austin Energy to determine the value of PHEVs as load-management resources. It will be interesting to see if these two California players make inroads in the Austin market in the next 3-5 years.
Web Sources:
http://cleantechnica.com/2009/02/18/smartlet-stations-charge-plug-in-vehicles-from-sidewalk/
http://www.coulombtech.com/aboutus.php
http://www.betterplace.com/
http://www.gridpoint.com/solutions/electricvehiclemanagement/
http://www.verdek-ev.com/MainPage.aspx
http://www.greentechmedia.com/articles/are-the-benefits-of-plug-in-hybrids-overstated-6014.html
Some controversy about the actual mpg performance of existing models has questioned the economic savings at the pump. Several DOE tests done under real-world driving conditions showed only 51mpg performance for vehicles that were capable of 100mpg performance under lab conditions.
Despite the challenges there are several firms who are locking-in their first mover advantage in the U.S. urban markets they think will be early PHEV adopters.
Two top competitors in this space are starting their efforts in California. Coulomb Technologies has plans to install 500 PHEV charging stations along California highways in 2009. Better Place is focusing on charging stations that also offer battery swap services. A San Jose news report stated that a Coulomb’s “ChargePoint” charging station was installed in twenty minutes and cost only $2,000 dollars (paid for by Coulomb). The unit is only three-feet high x one-foot wide and in this case they had strapped it onto a modified street lamp. Coulomb customers who have an account, sign-up for a access key, that when swiped at a charging station, opens the door to the outlet. Once plugged in, you close and lock the door (so that no one is tempted to unplug you). What I found fascinating was that Coulomb is emulating the electric utilities’ rate model by charging customers a “subscription fee” which blends the cost of the electricity that they consumed at the charging station with maintenance costs, and the up-front capital cost it took to install the station. Most importantly, the units have bi-directional metering so if your car is plugged into a charging station at a parking deck during peak hours, Coulomb’s software will stop charging your battery during those peak hours to help the electric utility “peak shave” demand. There is a revenue sharing business model with “hosts” who buy the charging stations, although this isn’t released. They have also integrated with Google Maps to not only show the location of charging stations in their network, but through their network software they can determine which station is occupied at a given moment. This will allow customers to plan their route and choose the closest unoccupied station. The company has already formed a joint venture with a German company to distribute Charge Point stations throughout Europe, the Middle East, and Asia (EMEA). Although GridPoint’s V2Green has through their partnership in the “Pecan Street Project” marked Austin as their target. There are two PHEV vehicles on a proof-of-concept project with Austin Energy to determine the value of PHEVs as load-management resources. It will be interesting to see if these two California players make inroads in the Austin market in the next 3-5 years.
Web Sources:
http://cleantechnica.com/2009/02/18/smartlet-stations-charge-plug-in-vehicles-from-sidewalk/
http://www.coulombtech.com/aboutus.php
http://www.betterplace.com/
http://www.gridpoint.com/solutions/electricvehiclemanagement/
http://www.verdek-ev.com/MainPage.aspx
http://www.greentechmedia.com/articles/are-the-benefits-of-plug-in-hybrids-overstated-6014.html
Friday, March 28
Steelcase Inc. Becomes First Renewable Energy Credit Buyer to Sponsor Commercial-Scale Wind Farm
Office Furniture Company Defines New Role in Wind Industry, Makes Long-Term Commitment to Facility to be Named ‘Wege Wind Energy Farm, provided by Steelcase’
Read about it here.
Read about it here.
Monday, December 10
UK Announces Plan For Offshore Wind Generators to Provide Enough Electricity to Power all Homes in the UK by 2020
Harnessing the vast potential of the UK's island status entered a new phase as Energy Secretary John Hutton announced proposals to open up its seas to up to 33GW (gigawatts) of offshore wind energy. He also announced that he will chair a panel of experts to advise him on renewable energy, underscoring the UK Government's determination to play its part in meeting the EU target of 20% renewable energy by 2020 [Click here to read full article...]
Friday, November 23
Solar Startup Ausra Inks $1B Deal With PG&E
Pacific Gas and Electric on Monday announced that it signed a 177-megawatt solar thermal power purchasing agreement with Ausra.
According to John O'Donnell, Ausra's executive vice president, the twenty-year agreement will generate over $1 billion in revenue for the Palo Alto, California-based start-up.
The plant will be located in San Luis Obispo County, California, and is expected to begin generating power in 2010. Ausra has filed its application for certification for this plant with the California Energy Commission, which must grant approval before construction begins.
PG&E supplies 12 percent of its energy from renewable sources, said Keely Wachs, PG&E’s environmental communications manager.
“PG&E continues to aggressively add renewable electric power resources” to its supply and the company is confident that it will meet or exceed its 20 percent renewable energy goal by 2010, he said.
Proving that bigger isn’t always better, the plant will use only one square mile of land and will burn no fuel, use minimal water, and have no air or water emissions.
[Click here to read the original article...]
According to John O'Donnell, Ausra's executive vice president, the twenty-year agreement will generate over $1 billion in revenue for the Palo Alto, California-based start-up.
The plant will be located in San Luis Obispo County, California, and is expected to begin generating power in 2010. Ausra has filed its application for certification for this plant with the California Energy Commission, which must grant approval before construction begins.
PG&E supplies 12 percent of its energy from renewable sources, said Keely Wachs, PG&E’s environmental communications manager.
“PG&E continues to aggressively add renewable electric power resources” to its supply and the company is confident that it will meet or exceed its 20 percent renewable energy goal by 2010, he said.
Proving that bigger isn’t always better, the plant will use only one square mile of land and will burn no fuel, use minimal water, and have no air or water emissions.
[Click here to read the original article...]
Thursday, November 8
AWEA Quarterly Report
AWEA QUARTERLY MARKET REPORT: WIND DELIVERS VITAL NEW POWER SUPPLY WITH OVER 2,300 MEGAWATTS INSTALLED THIS YEAR TO DATE Wind energy trade group raises estimate for 2007 installations, calls on U.S government to deliver strong renewable energy legislation
Continuing a major growth trend, the American Wind Energy Association (AWEA) today announced a substantial increase in the projected installation of new wind energy facilities in 2007. Previous projections for a record-setting 3,000 megawatts (MW) of new wind power capacity in 2007 have now been raised: AWEA reports that the U.S. wind energy industry is currently on track to complete a total 4,000 MW in 2007, shattering its 2006 record of 2,454 MW, and generating enough new electricity to power the equivalent of over one million homes. In its third quarter market report, AWEA also reports that the industry has already added over 2,300 MW of generating capacity to the nation’s electrical grid so far this year with a total of more than 5,000 MW in various stages of construction, establishing wind as one of the largest sources of new power in the country today. “The U.S wind energy industry is going to exceed what was already a record projection for installations this year,” said AWEA Executive Director Randall Swisher. “This is great news because it means that new, readily available, clean generation is reaching consumers at a time when electricity demand and global warming concerns are both on the rise. “But the not-so-good news is that, even as we face these twin challenges [climate change and growing energy demand], our country does not have a long-term, national policy in place to promote renewable energy development.” The federal production tax credit (PTC) for renewable energy will expire in December 2008, and there is no national renewable electricity standard (RES) or other long-term policy in place. Commented Swisher, “A national long-term policy to promote renewable energy, like the Renewable Electricity Standard approved by the House of Representatives in August, is essential for wind and other renewable energy industries to grow successfully and cost-effectively. The U.S. wind energy industry urges Congressional leaders and the President to work together and bring to the finish line energy legislation that extends the production tax credit and establishes a national standard for renewable electricity. “In addition to strengthening energy security and fighting global warming, more wind power and renewables will help stabilize electricity costs, and will create economic opportunity in both industrial and rural America .” Wind power is delivering a generous return on public investment: the continuity in the PTC since 2005 has spurred both record-breaking new generating capacity (2,431 MW added in 2005, 2,454 MW in 2006, about 4,000 MW expected in 2007) and a wave of investment in manufacturing facilities and services across the country, including in states that do not have a large wind resource. Additional returns include lower pollution costs, and growing income for communities in which wind farms are installed. The U.S. wind energy industry completed 1,251 MW of wind power generation since last reported, bringing the total installed to date this year to 2,310 MW and the total cumulative wind power generating capacity in the country to 13,885 MW, according to AWEA. One megawatt of wind power produces enough electricity on average to serve 250 to 300 American homes. State highlights include: -- Texas again added the largest amount of new wind power generation (600 MW); -- Colorado installed 264 MW and now ranks as the state with the 6th-largest amount of wind power generation; -- Washington , with 140 MW of new wind capacity, pulls ahead of Minnesota into 4th place; --Missouri saw the completion of its first utility-scale wind farm, a 56.7-MW project that generates power for electric cooperatives in the region and that makes Missouri the state with the 21st largest amount of wind power now installed; -- Illinois , Pennsylvania , and Iowa also saw the completion of utility-scale projects. The full AWEA quarterly market report is available online at http://www.awea.org/Projects/PDF/3Q_Market_Report_Nov2007.pdf
For a full list of projects completed this quarter, listing of states by capacity installed, and additional market information see http://www.awea.org/projects/
Continuing a major growth trend, the American Wind Energy Association (AWEA) today announced a substantial increase in the projected installation of new wind energy facilities in 2007. Previous projections for a record-setting 3,000 megawatts (MW) of new wind power capacity in 2007 have now been raised: AWEA reports that the U.S. wind energy industry is currently on track to complete a total 4,000 MW in 2007, shattering its 2006 record of 2,454 MW, and generating enough new electricity to power the equivalent of over one million homes. In its third quarter market report, AWEA also reports that the industry has already added over 2,300 MW of generating capacity to the nation’s electrical grid so far this year with a total of more than 5,000 MW in various stages of construction, establishing wind as one of the largest sources of new power in the country today. “The U.S wind energy industry is going to exceed what was already a record projection for installations this year,” said AWEA Executive Director Randall Swisher. “This is great news because it means that new, readily available, clean generation is reaching consumers at a time when electricity demand and global warming concerns are both on the rise. “But the not-so-good news is that, even as we face these twin challenges [climate change and growing energy demand], our country does not have a long-term, national policy in place to promote renewable energy development.” The federal production tax credit (PTC) for renewable energy will expire in December 2008, and there is no national renewable electricity standard (RES) or other long-term policy in place. Commented Swisher, “A national long-term policy to promote renewable energy, like the Renewable Electricity Standard approved by the House of Representatives in August, is essential for wind and other renewable energy industries to grow successfully and cost-effectively. The U.S. wind energy industry urges Congressional leaders and the President to work together and bring to the finish line energy legislation that extends the production tax credit and establishes a national standard for renewable electricity. “In addition to strengthening energy security and fighting global warming, more wind power and renewables will help stabilize electricity costs, and will create economic opportunity in both industrial and rural America .” Wind power is delivering a generous return on public investment: the continuity in the PTC since 2005 has spurred both record-breaking new generating capacity (2,431 MW added in 2005, 2,454 MW in 2006, about 4,000 MW expected in 2007) and a wave of investment in manufacturing facilities and services across the country, including in states that do not have a large wind resource. Additional returns include lower pollution costs, and growing income for communities in which wind farms are installed. The U.S. wind energy industry completed 1,251 MW of wind power generation since last reported, bringing the total installed to date this year to 2,310 MW and the total cumulative wind power generating capacity in the country to 13,885 MW, according to AWEA. One megawatt of wind power produces enough electricity on average to serve 250 to 300 American homes. State highlights include: -- Texas again added the largest amount of new wind power generation (600 MW); -- Colorado installed 264 MW and now ranks as the state with the 6th-largest amount of wind power generation; -- Washington , with 140 MW of new wind capacity, pulls ahead of Minnesota into 4th place; --Missouri saw the completion of its first utility-scale wind farm, a 56.7-MW project that generates power for electric cooperatives in the region and that makes Missouri the state with the 21st largest amount of wind power now installed; -- Illinois , Pennsylvania , and Iowa also saw the completion of utility-scale projects. The full AWEA quarterly market report is available online at http://www.awea.org/Projects/PDF/3Q_Market_Report_Nov2007.pdf
For a full list of projects completed this quarter, listing of states by capacity installed, and additional market information see http://www.awea.org/projects/
Wednesday, November 7
BP, Arizona State look to bacteria, not algae, for a biofuel
Algae's not the only organism that can be used as a feedstock for biofuel.
BP will collaborate with Arizona State University to try to figure out a way of using cyanobacteria, a photosynthetic form of bacteria, as a feedstock for diesel or synthetic petroleum. Ideally, the bacteria could be cultivated in large, contained plots of land baked by the sun--Arizona has a lot of that. The bacteria also consume carbon dioxide to grow. Thus, carbon dioxide could be pumped in from a power plant into the contained bacteria farm. The company could thus make money from selling carbon credits and selling fuel feedstock...[Click here to read the full article]
BP will collaborate with Arizona State University to try to figure out a way of using cyanobacteria, a photosynthetic form of bacteria, as a feedstock for diesel or synthetic petroleum. Ideally, the bacteria could be cultivated in large, contained plots of land baked by the sun--Arizona has a lot of that. The bacteria also consume carbon dioxide to grow. Thus, carbon dioxide could be pumped in from a power plant into the contained bacteria farm. The company could thus make money from selling carbon credits and selling fuel feedstock...[Click here to read the full article]
Tuesday, November 6
Will biofuels end OPEC’s power and agricultural protectionism?
Published: November 6 2007 16:32 | Last updated: November 6 2007 16:32
Biofuels are set to transform the global economy, according to Harvard University economist Ricardo Hausmann, leading to the demise of the price-setting power of OPEC and the end of agricultural protectionism.
He argues that technology is bound to deliver a biofuel that will be competitive with fossil energy at something like current prices. The consequences of this will be that the large potential supply of biofuels will cap the price of oil because its supply is much more elastic.
Professor Hausmann also argues that the large-scale biofuel production will cause increases in the price of agricultural land and of food that will relieve governments from the current political pressure to protect the agricultural sector. This, he says, will boost sustainable development in poorer nations.
Can these predictions become reality? Which biofuels will become most widely used? What do such scenarios mean for carbon emissions and energy security?
Professor Hausmann will answer your questions on Thursday 15 November 2007. Post a question now to ask@ft.com or use the online submissions form below.
http://www.ft.com/cms/s/2/2fe3bea8-8c84-11dc-b887-0000779fd2ac.html
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