Why a Best-Selling Energy Author Is Giving Away His Book for Free
By George Alger | March 12, 2011
Los Angeles When Renewable Energy – Facts and Fantasies was published in 2010, it skyrocketed to the top of Amazon.com's charts in both the "energy" and "engineering" categories – a clear hit as a #1 best-seller. Now, just a couple of months later, author Craig Shields is offering an electronic copy of the book -- to anyone -- for free. Why?
As I imply in the book's title, we live in a world in which not everything is possible, and we must make difficult choices as we migrate away from fossil fuels in the direction of clean energy. Craig Shields
“Writing Renewable Energy – Facts and Fantasies was a great project. I had fun doing it, readers loved it, and a whole bunch of people bought it within the first week or so,” says Shields. “Now it's time to move along – but before I do that, why not put it in as many people’s hands as possible?”
Download the free book:
http://2greenenergy.com/renewable-energy-facts-fantasies-ebook/
There is no doubt that the migration to clean energy is the most pressing issue of our time. Whether our worries are global warming, peak oil, national security, or simply America’s competitiveness in world markets, or our siphoning off another $1 billion in our wealth off to foreign entities every day, 365 days a year, there is definitely room for concern. In fact, you’ll have to try hard to find anyone who thinks that our addiction to oil and coal is a good thing. But, looking at the problem in practical, realistic terms, how can we “get there from here?”
According to Shields, “The truth is that we face tough realities. The technologies are constantly improving, albeit at an uneven rate. And big money and politics make this ten times more complicated than it would have been if we were not talking about energy – home to the largest and most sophisticated business interests on Earth. As I imply in the book’s title, we live in a world in which not everything is possible, and we must make difficult choices as we migrate away from fossil fuels in the direction of clean energy.”
The book is based on interviews with 25 of the world’s top researchers, authors, analysts and industry leaders – a surprisingly large percentage of whom point to these “tough realities” that exist in the technology migration, the economic implications, and the political issues that affect the world energy industry.
Shields continues, “All of us – well, almost all of us – want clean energy. Whether our concerns are healthcare issues caused by emissions, enriching terrorists, military conflicts, social chaos and injustice, global climate change, or other forms of long-term environmental damage, there is no doubt that we need to put an end to our reliance on fossil fuels. But it’s just not that easy. We would do well to understand the realities if we are to have informed, relevant discussions as to what we must do as a nation – and as a civilization.”
Though Shields is by nature a modest gentleman, he doesn’t hide the fact that he believed in the book’s success from the onset. “I wrote it for several different groups – each fairly large. There are people who simply want a broad and objective treatment of the subject. There’s a great deal of science, current events, international relationships, and economics to keep tabs on; that’s not an easy task for anyone,” Shields explains. “But there is also a significant business audience,” as folks see a multi-trillion dollar industry forming and say, ‘Hey, I’d like to be a part of that too.’”
Reviewers have gushed praises. Paul Scott, co-founder of Advocacy group Plug-In America writes:
The whole 2GreenEnergy project is extremely worthwhile -- and this "Facts and Fantasies" is a good example of the value that Craig and his team add to the renewables and sustainability movement. It would be hard to find more stimulating ideas – and more compelling reasons to move to clean energy, all stuffed into one small place. Readers will walk away with a greatly expanded understanding of the factors that face us all in our quest for clean energy.
Shields is already hard at work, setting the course for his next book, in which he’ll continue along the path of his independent investigation: What, pragmatically, are we facing – technologically, economically, and politically – in terms of the migration to renewables?
Additional Information
•FREE DOWNLOAD: #1 Best Selling Energy Book on Amazon
•About Craig Shields
•2GreenEnergy.com
•Buy the book: Renewable Energy – Facts and Fantasies
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Oil and the economy
The 2011 oil shock
More of a threat to the world economy than investors seem to think
Mar 3rd 2011 | from The Economist print edition
THE price of oil has had an unnerving ability to blow up the world economy, and the Middle East has often provided the spark. The Arab oil embargo of 1973, the Iranian revolution in 1978-79 and Saddam Hussein’s invasion of Kuwait in 1990 are all painful reminders of how the region’s combustible mix of geopolitics and geology can wreak havoc. With protests cascading across Arabia, is the world in for another oil shock?
There are good reasons to worry. The Middle East and north Africa produce more than one-third of the world’s oil. Libya’s turmoil shows that a revolution can quickly disrupt oil supply. Even while Muammar Qaddafi hangs on with delusional determination and Western countries debate whether to enforce a no-fly zone (see article), Libya’s oil output has halved, as foreign workers flee and the country fragments. The spread of unrest across the region threatens wider disruption.
The markets’ reaction has been surprisingly modest. The price of Brent crude jumped 15% as Libya’s violence flared up, reaching $120 a barrel on February 24th. But the promise of more production from Saudi Arabia pushed the price down again. It was $116 on March 2nd—20% higher than the beginning of the year, but well below the peaks of 2008. Most economists are sanguine: global growth might slow by a few tenths of a percentage point, they reckon, but not enough to jeopardise the rich world’s recovery.
That glosses over two big risks. First, a serious supply disruption, or even the fear of it, could send the oil price soaring (see article). Second, dearer oil could fuel inflation—and that might prompt a monetary clampdown that throttles the recovery. A lot will depend on the skill of central bankers.
Of stocks, Saudis and stability
So far, the shocks to supply have been tiny. Libya’s turmoil has reduced global oil output by a mere 1%. In 1973 the figure was around 7.5%. Today’s oil market also has plenty of buffers. Governments have stockpiles, which they didn’t in 1973. Commercial oil stocks are more ample than they were when prices peaked in 2008. Saudi Arabia, the central bank of the oil market, technically has enough spare capacity to replace Libya, Algeria and a clutch of other small producers. And the Saudis have made clear that they are willing to pump.
Yet more disruption cannot be ruled out. The oil industry is extremely complex: getting the right sort of oil to the right place at the right time is crucial. And then there is Saudi Arabia itself (see article). The kingdom has many of the characteristics that have fuelled unrest elsewhere, including an army of disillusioned youths. Despite spending $36 billion so far buying off dissent, a repressive regime faces demands for reform. A whiff of instability would spread panic in the oil market.
Even without a disruption to supply, prices are under pressure from a second source: the gradual dwindling of spare capacity. With the world economy growing strongly, oil demand is far outpacing increases in readily available supply. So any jitters from the Middle East will accelerate and exaggerate a price rise that was already on the way.
What effect would that have? It is some comfort that the world economy is less vulnerable to damage from higher oil prices than it was in the 1970s. Global output is less oil-intensive. Inflation is lower and wages are much less likely to follow energy-induced price rises, so central banks need not respond as forcefully. But less vulnerable does not mean immune.
Dearer oil still implies a transfer from oil consumers to oil producers, and since the latter tend to save more it spells a drop in global demand. A rule of thumb is that a 10% increase in the price of oil will cut a quarter of a percentage point off global growth. With the world economy currently growing at 4.5%, that suggests the oil price would need to leap, probably above its 2008 peak of almost $150 a barrel, to fell the recovery. But even a smaller increase would sap growth and raise inflation.
Shocked into action
In the United States the Federal Reserve will face a relatively easy choice. America’s economy is needlessly vulnerable, thanks to its addiction to oil (and light taxation of it). Yet inflation is extremely low and the economy has plenty of slack. This gives its central bank the latitude to ignore a sudden jump in the oil price. In Europe, where fuel is taxed more heavily, the immediate effect of dearer oil is smaller. But Europe’s central bankers are already more worried about rising prices: hence the fear that they could take pre-emptive action too far, and push Europe’s still-fragile economies back into recession.
By contrast, the biggest risk in the emerging world is inaction. Dearer oil will stoke inflation, especially through higher food prices—and food still accounts for a large part of people’s spending in countries like China, Brazil and India. True, central banks have been raising interest rates, but they have tended to be tardy. Monetary conditions are still too loose, and inflation expectations have risen.
Unfortunately, too many governments in emerging markets have tried to quell inflation and reduce popular anger by subsidising the prices of both food and fuel. Not only does this dull consumers’ sensitivity to rising prices, it could be expensive for the governments concerned. It will stretch India’s optimistic new budget (see article). But the biggest danger lies in the Middle East itself, where subsidies of food and fuel are omnipresent and where politicians are increasing them to quell unrest. Fuel importers, such as Egypt, face a vicious, bankrupting, spiral of higher oil prices and ever bigger subsidies. The answer is to ditch such subsidies and aim help at the poorest, but no Arab ruler is likely to propose such reforms right now.
At its worst, the danger is circular, with dearer oil and political uncertainty feeding each other. Even if that is avoided, the short-term prospects for the world economy are shakier than many realise. But there could be a silver lining: the rest of the world could at long last deal with its vulnerability to oil and the Middle East. The to-do list is well-known, from investing in the infrastructure for electric vehicles to pricing carbon. The 1970s oil shocks transformed the world economy. Perhaps a 2011 oil shock will do the same—at less cost.
February 7, 2011
PowerVerde enters into a distribution/manufacturing agreement with Newton Investments BV of the Netherlands, to distribute and manufacture their 50Kw renewable energy system.
PowerVerde, Inc. (Nasdaq BB symbol "PWVI") today announced signing a binding Letter of Intent ("LOI") with Newton Investments BV, ("Newton") a Dutch-based company, to license PowerVerde's unique renewable 50Kw energy system. The LOI allows Newton to distribute this energy system throughout the 27 countries of the European Union, initially focusing on the Netherlands, Belgium, Germany and Scandinavian countries. Furthermore, PowerVerde has authorized Newton to manufacture this system under a strict licensing agreement with a Dutch/German foundry and machine shop capable of producing hundreds of units per year. Under the terms of this LOI, Newton must sell at least 100 systems in the first year to maintain these exclusive rights for up to 10 years.
In connection with the transaction, a Newton affiliate invested $250,000 in PowerVerde by purchasing 333,333 share of common stock at $.75 per share, accompanied by a three-year warrant to buy 333,333 shares at $.75 per share.
Piet van der Hoop, President of Newton remarked, "PowerVerde is by far the most efficient and remarkable renewable energy company we have seen. We as a technology company are always looking for exceptional alternative energy opportunities. I have reviewed hundreds of companies over the past 12 years and PowerVerde is among the best. Their waste heat recovery system was demonstrated for us at PowerVerde's Phoenix facility and impressed us greatly. In addition to our licensing agreement, PowerVerde has allowed us to make a sizeable dollar investment in their company. We plan to install up to 300 megawatts of PowerVerde systems over the next 3 years".
PowerVerde Director Rick Davis commented "This licensing agreement was the right deal at the right time for PowerVerde. We believe that our systems are ready for sale. Because of Europe's appreciation for green electricity products we felt that a product launch in this region combined with North America later this year was a positive marketing strategy for 2011. The EU respects international intellectual property rights, and we're comfortable making Newton our first non-US licensing partner".
About Newton Investments BV
Newton, based in Leeuwarden, the Netherlands, is a renewable energy investment company which actively pursues green energy opportunities and products covering variety of energy sources including, but not limited to, wind, biomass, photovoltaic, electric and thermal. Their investment objectives are to offer green renewable energy products in the EU utilizing available credits and incentives. Their relationships with sophisticated Dutch and German manufacturers and knowledge of these industries allow them advantages well beyond mere distribution.
About PowerVerde
PowerVerde, Inc. (OTCBB: PWVI) manufactures advanced renewable power generator systems comprised of gas pressure and gas expansion motors. These systems operate without combustion or fossil fuel creating electrical power from any low grade heat source or adequate pressure forum. PowerVerde is an environmentally friendly green company producing zero emissions or waste stream byproducts. For more information about PowerVerde, please visit our web-site www.PowerVerdeEnergy.com.
This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company's current views with respect to future events that involve risks and uncertainties. Among others, these risks include the failure to meet schedule or performance requirements of the Company's contracts, the Company's liquidity position, the Company's ability to obtain new contracts, the emergence of competitors with better products and/or greater financial resources, the impact of competitive pricing and the termination or limitation of alternative energy incentive programs. In the light of these uncertainties the forward-looking events referred to in this release might not occur.
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See our new website changes and more news at www.PowerVerdeEnergy.com.
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PO Box 630453
Littleton, CO 80163
Is Organic PV the Future of Solar?
by Stephen Lacey, Staff Writer
Published: May 3, 2010
Massachusetts, United States -- When Dr. Alan Heeger and his colleagues began experimenting with newly-found semiconducting polymers in the 1970s, they just wanted to understand the basic physics of how electrons were set free in the materials. But they ended up making a discovery that has helped advance a new generation of solar plastics and inks.
By oxidizing polyacetylene, a long-chain molecule which acts like a pigment, the researchers found the polymer to have extraordinarily high conductive properties.
“We realized it in a classic 'ah ha moment,'” says Heeger. “But then over and over again, we saw additional properties that we had not foreseen.”
Eventually, Heeger and his colleagues, Alan MacDiarmind and Hideki Shirakawa, figured out that the material was not just a novelty. It had the potential to change the way we manufacture electronic devices, transistors, diodes and solar cells. These semiconducting polymers could be put in a solution and printed on a substrate – potentially creating a revolution in electronics that rivals what Gutenberg's printing press did for books 600 years earlier.
“Printing is a low-cost, high speed manufacturing process...I doubt that there's a lower-cost manufacturing for any solar technology,” says Heeger.
The science community agreed. In 2000, the three researchers received the Nobel Prize in chemistry for their work.
A year later Heeger co-founded Konarka, a Massachussets-based company working to commercialize organic solar PV technologies. The company has since racked up tens of millions of dollars in financing and has built a GW-scale manufacturing facility that produces “power plastic,” a flexible material that can be integrated into bags, electronics, and building materials.
With all this promising sounding news, one might think that the revolution in printed organic PV is underway. But that's definitely not the case. A number of technical challenges and changing market conditions have made it difficult for third-generation solar companies to ramp up production and sell products.
“Clearly the industry had a good story to tell,” says technology journalist Peter Fairley. “But that story has since changed and I think things look very different today for these companies.”
During the height of the silicon shortage between 2005 and 2007, interest in emerging third-generation solar technologies was strong. The high price of silicon made printable, non-silicon based solar products look very attractive. Never mind that they were only 4 to 5 percent efficient and lasted for only a few years – roll-to-roll printing below a dollar per watt was an attractive selling point.
Then came Cadmium Telluride thin-film producer First Solar, which said it was manufacturing 11-percent efficient products below a dollar per watt. It quickly steamrolled its way to the top of global module producers.
The eventual easing of the silicon shortage and the global oversupply of PV caused a roughly 30% drop in prices, making traditional PV technologies more attractive than they've ever been. This has taken some of the spotlight off the third-gen PV industry as well.
Konarka may have a GW-scale manufacturing facility, but they don't appear to be shipping anywhere close to that amount of product.
“I don't believe that Konarka is producing a GW of material a year,” says Fairley. “They have to find buyers and people who want a GW of their material. And that's still the number one challenge.”
With such low efficiencies and short product lifetimes, third-generation PV companies are trying to find a unique niche rather than taking traditional PV head-on. Applications like portable chargers, solar clothing, solar umbrellas and roll-out awnings are the most obvious. And after that, windows and building facades are a potentially promising area. Companies are already installing small building integrated systems, but organic solar technologies need to get much more efficient in order to achieve real scale.
“In the laboratory today, people are making these organic solar cells with peak power efficiencies in the range of 6 to 8 percent. We should be able to get twice that – and that's our challenge,” says Konarka's Heeger.
Success in the lab does not necessarily mean success in the market. However, these technologies have moved fairly quickly from research to reality. And if the progress continues, organic PV may someday be competitive with more traditional solar products – someday being the key word.
“It seems premature to call the technology commercialized,” says Fairley. “Many of the products that we've heard about have failed to materialize.”
To hear interviews with Alan Heeger and Peter Fairley, listen to the podcast linked above. To see a video clip of Konarka's manufacturing facility, watch the video below.
Video
Previous Podcast
US Solar Sees 38% Growth in PV Capacity in 2009
Washington, D.C., United States [RenewableEnergyWorld.com]
The Solar Energy Industries Association (SEIA) this week released the 2009 U.S. Solar Industry Year in Review, finding another year of strong growth despite the economic recession. Overall U.S. solar electric capacity increased by 37 percent (photovoltaic and concentrating solar power combined). This was driven primarily by strong demand in the residential and utility-scale markets, resulting in a 36 percent increase over 2008 in overall revenue.
Grid-tied photovoltaic installations grew by 38 percent. Residential grid-tied PV solar installations doubled from 78 megawatts (MW) to 156 MW while non-residential grid-tied PV solar installations grew 2 percent less than in 2008. The utility market tripled their cumulative grid-tied PV capacity from 22 MW to 66 MW.
Over that same time period, solar water heating shipments grew by 10 percent over 2008 while solar pool heating growth was 10 percent less than 2008 growth, reflecting construction and housing declines.
On a call to discuss the results, Freeman Ford, founder of FAFCO said that while the U.S. solar thermal is seeing much larger growth than in recent years, the market lags behind the rest of the world. He said that while the market was valued at US $30 million last year, he expects the market to grow at 50% per year every year for the foreseeable future, led in large part by California, which could support a $1 billion market on its own.
Three new concentrating solar power plants came online and cumulative U.S. CSP capacity reached 432 MW with a development pipeline totaling more than 10,000 MW.
Marc Ulrich, vice president of Renewable & Alternative Power at Southern California Edison (SCE) said that his utility alone purchased 13.6 billion kilowatt-hours from renewables in 2009, or close to 17% of its overall mix. Of that, only 6% was solar, but solar is also the fastest growing segment is growing most quickly. He said that SCE plans to add more than 1 gigawatt (GW) of solar to its mix in the next five years.
Industry growth resulted in a 36 percent increase in overall revenue, totaling nearly $4 billion. The solar industry added 17,000 new jobs from coast to coast and today employs 46,000 total U.S. workers and supports another 33,000 jobs in other sectors.
Jonathan Bass, director of communications at SolarCity said the company added 285 new employees in last 12 months, half of which were installer positions, he also said SolarCity expects to add 150 more jobs later this year to bring the company's payroll to 800 in total. Also on the jobs front, VP of Sharp's solar energy solutions group Ron Kenedi said that 160 jobs were added in its manufacturing plant in Memphis, Tennessee, which now boasts 480 union jobs. That plant runs 24 hours a day and has a yearly capacity of 140 MW.
"The story behind the increase in factory growth is the demand for solar products in the United States," Kenedi said. "For every new job in our factory many more are being created in the field including designers and installers."
California (220 MW) led in new solar electric capacity, followed by New Jersey (57 MW), Florida (36 MW), Arizona (23 MW), Colorado (23 MW), Hawaii (14 MW), New York (12 MW), Massachusetts (10 MW), Connecticut (9 MW), and North Carolina (8 MW).
Julie Blunden, VP of public policy and corporate communications at SunPower said that the California Public Utilities Commission has just released figures showing that last month saw more the 50 MW of applications to the California Solar Initiative, the highest on record. She also said that SunPower has experienced the massive growth in the solar market first hand, going from $11 million in revenue in 2004 to $1.5 billion in 2009.
SunPower also announced that it has signed a new three-year letter of credit facility. The new facility, which initially provides for a maximum issuance of $350 million and may be increased to a maximum of $400 million, will replace the company's existing $250 million letter of credit facility and will be underwritten by a syndicate of banks that include Deutsche Bank, Bank of America Merrill Lynch, Citi, Credit Suisse, and Barclays Capital.
Solar manufacturing showed a 7 percent increase in PV module production from 2008. SEIA's president and CEO Rhone Resch said that while one of the bright spots in 2009 was manufacturing, only 7% of worldwide manufacturing is in U.S. and Resch called on Congress to extend the manufacturing tax credit that was passed in the stimulus package in 2009 and to make solar a bigger part of the U.S. energy mix through the energy bill that is expected to come to the floor this summer.
Bryan Ashley, chief marketing officer at Suniva said that federal support has helped to create jobs and bring in huge amounts of revenue for the Georgia-based solar cell manufacturer. He said that Suniva expanded from 32-MW of production capacity to 100 MW at end of 2009, which added 80 new jobs, using the Advanced Manufacturing Tax Credit Resch talked about. Ashley also said that the company is currently expanding by another 70 MW, which will bring its facility to 175 MW of capacity by mid-year, and will add 25 more jobs.
Resch and everyone else on the call was also excited about the prospects for 2010 as the total utility-scale pipeline (across all solar technologies) reached 17 gigawatts by the end of 2009. Much of that capacity is expected to come online this year which would lead to a record year for U.S. solar growth.
New Hampshire, United States [RenewableEnergyWorld.com]
Inventors all around the world are developing new wind turbine technologies, hoping they can break into the market and "revolutionize" the industry. Some of them are creating entirely new designs or making interesting improvements on existing designs; many of them make claims about performance they can't back up. But they all have an impact on this still-fragmented market.
In this podcast, we'll look at the evolving landscape for small wind technologies in the U.S. and around the world.
We'll speak with Dan Parker and his team about a new technology they're developing, called the Spiral Air Foil Turbine. We'll talk about his design, the expensive testing and certification process, and why his team is similar to others in garages and machine shops around the country.
Then, we'll talk to Ron Stimmel, the small wind advocate for the American Wind Energy Association, about where these inventors fit into the broader small-wind landscape. While there may be a lot of work being done on new designs, the traditional three-bladed horizontal-axis turbine continues to dominate 99% of the small-wind market.
Finally, we'll move from small wind to really, really big wind. Katie Roek, an attorney with Stoel Rives, discusses the likely differences in how the Europeans and Americans develop offshore wind – once the U.S. actually gets a project in the water.
Inside Renewable Energy is a weekly audio news program featuring stories and interviews on all the latest developments in the renewable energy industries.
Learning how to capitalize upon net feed-in tariffs.
by Warwick Johnston, SunWiz
Despite the global financial crisis, the Australian solar power industry grew a phenomenal 366% in 2009. Driven by a rebate that enabled "free" solar power systems to be sold, installations of grid connected solar power systems grew even eclipsed past-years' 200% growth. Will Australia be able to repeat these figures in 2010, now that the federal government's rebate has been substituted for a far less generous point-of-sale discount?
In 2009, over 56 MW of grid-connected solar power was installed in Australia. This is 3.66x the 12.2 MW installed in 2008, which itself was 2.13x the 4.3 MW installed in 2007 (Figure 1). Can Australia continue this trajectory and install 208 MW in 2010?
Figure 1: Rebated Australian Grid Connected Solar Power Installations (kW/year). Source: Source: Solar Homes and Communities Program statistics.
Unfortunately, the short answer is ‘no’. It’s quite possible that 2010 may actually see a fall in Australian PV installations. Much of the past years’ growth was driven by an A$8/Watt federal government rebate (capped at $8,000), which when combined with Renewable Energy Certificates (RECs) meant that zero-cost 1 kW solar power systems were being offered by a number of companies. The value of upfront government support measures has more than halved since the government rebate was replaced by Solar Credits, a point-of-sale discount based upon the market value of a multiplied number of RECs. Put simply, PV is no longer free, so white-hot sales have cooled considerably.
Indeed, the Australian PV industry may face a bumpy ride in 2010. The ability to sell free systems at a reasonable profit attracted a large number of new market entrants towards the end of 2008, which saw installations quickly ramp up in the first half of 2009, before the government’s snap decision to end the rebate stunned the industry. While Solar Credits legislation was being passed, the industry got to work installing the backlog of 63 MW of systems that had been issued pre-approval for the rebate.
The industry’s ability to sell solar power took a further setback when the price of RECs plunged from $50 to $30, meaning the value of Solar Credits (in effect a REC multiplier for the first 1.5kW of installed capacity) dived from $5150 to $3090 for a 1 kW system (from $7750 to $4650 for a 1.5 kW system). At the same time as a geared-up industry started installing 8 MW a month, sales volumes plummeted.
Figure 2: Grid-connected solar power installations, 2009. Source: Source: Solar Homes and Communities Program statistics.
Even since the plunge in federal government support, the Australian PV industry demonstrated its ingenuity over the last four months of 2009, installing over 4,600 Solar Credit systems totalling an additional 12 MW. Those states with Feed-in Tariffs (FITs) have been more successful at selling systems with Solar Credits, and the announcement of Australia’s most generous FIT of 60c/kWh on gross solar generation by Australia’s largest state means fair demand is likely to continue through 2010.
This suggests that, although diminished somewhat due to reduced affordability, public appetite for PV continues to be strong, particularly in states with FITs – Queensland, Victoria, South Australia, the Australian Capital Territory, and in 2010 New South Wales and Western Australia (Figure 3). How much will be installed in 2010 is anyone’s guess, but as of January approximately 28 MW of 2009’s rebate pre-approved sales remain to be installed. The amount sold with Solar Credits depends upon the performance of salespeople, and how well the industry handles any setbacks.
Figure 3: Percentage of 2009’s Australian solar power installations receiving Solar Credits. Source: Compiled from data on the REC Registry.
Unfortunately, evidence suggests that the Australian solar industry does not yet possess the wisdom of maturity. The plethora of new market entrants still seem focussed on selling on price alone, ignoring the lessons learned from setbacks in previous years. In the latter half of 2008, Australia’s panel prices went skyward on the back of a weak Australian dollar coinciding with the peak of Spain’s infamous PV demand, almost stranding low-margin operators. With a reversal of this situation presently acting in Australia’s favour, the nascent Australian PV industry may suffer when global demand catches up with supply in 2010.
Further, the majority of solar companies entered the market during a rebate-fuelled feeding frenzy in which lowest prices brought greatest market share. As a consequence, few companies seem to be educating the public as to the value of larger solar power systems. Although average system size has increased slightly under Solar Credits, this has occurred because a majority of sales are now 1.5 kW instead of 1 kW. Systems of 2-4 kW are now less common than they were under the rebate (Figure 4). This is unfortunate, as 1.5 kW systems barely create enough revenue over 10 years to pay for a replacement inverter, meaning customer’s investments may be too-often wasted.
Figure 4: Proportion of PV Systems of2-4 kW in size under each government support mechanism. Source: Compiled from data on the REC Registry.
Innovative sales techniques may be able to improve the outcome for both solar businesses and the public. In spite of a 1.5-kW Solar Credit sweet spot, larger solar power systems offer more favourable long-term financial and environmental benefits. In states with net FITs, larger systems earn substantially higher premium revenue because they export far more power to the grid, significantly shortening payback (Figure 5). Even in states with gross FITs, larger system sizes more strongly insulate against rises in the price of electricity, which may be as much as 68% over the next three years.
Regardless of FIT, larger inverters are more efficient and also cost less as a proportion of system cost, meaning that inverter end-of-life replacement-impact less upon long-term financial profitability. Companies able to convince customers to upgrade system size and implement energy efficiency technologies and measures may produce better outcomes for both customer and industry, strengthen customer relationships, and benefit from greater gross profit and diversified income streams less dependent upon the variability of government support.
Figure 5: Likely System Payback under a net Feed-in Tariff, as varying with system size and household power consumption levels.
That said, the Australian government recently announced that the REC price for small-scale renewables would be fixed at $40/REC from the 1/1/2011, as reported here. The spot REC price soared to $42 on this news, a price that may provide the impetus for bumper 2010 and 2011 years in Australian solar power.
Warwick Johnston manages SunWiz, a solar energy consulting business that has recently released a suite of tools to support the sales efforts solar power businesses. These provide automated calculation of revenue, payback, and Internal Rate of Return for typical residences power consumption profiles in locations with net and gross Feed-in Tariffs.
How to Build a Business in Clean Energy
by Stephen Lacey, Podcast Editor
New Hampshire [RenewableEnergyWorld.com]
Entrepreneurs around the world see our myriad environmental, social and economic issues related to energy not just as problems, but as opportunities. Indeed, the possibilities for developing businesses in the clean energy industry are endless. Unfortunately, many people have a hard time figuring out where to approach this very competitive, capital-intensive space.
In this podcast, we'll have a roundtable discussion with a group of entrepreneurs and get some pointers on how to find a core idea, get funding, build a team and grow your business in the face of adversity.
Sramana Mitra, entrepreneurial consultant and author of the book series “Entrepreneur Journeys,” details the important process of bootstrapping. She'll also talk about why she's disappointed with the Obama administration's approach to supporting entrepreneurship in the U.S.
Wayne Krouse, founder and CEO of Hydro Green Energy, describes his long, hard journey to develop a new hydrokinetic technology. He'll talk about how to secure a patent and get funding for capital intensive projects.
Danny Kennedy, co-founder and president of Sungevity, talks about why internet-based commerce is so important for bringing down the installed cost of solar and other renewables. He'll also discuss how he formed his team and how he plans to grow the company in a sustainable way.
This podcast is sponsored by groSolar, a provider of solar energy solutions for homes, businesses, dealers and contractors.
If you're a clean energy entrepreneur and you're looking at ways to promote your business – check out our Total Access program. It offers a low-cost, easy-to-use method of marketing your company or technology to the largest renewable energy audience world-wide!
Inside Renewable Energy is a weekly audio news program featuring stories and interviews on all the latest developments in the renewable energy industries.
US Government Expected To Increase Geothermal Funding by 25%
Washington, D.C., United States [RenewableEnergyWorld.com]
The Obama administration 2011 federal budget proposal includes a 25% increase in geothermal technology funding through the Department of Energy, the Geothermal Energy Association (GEA) said this week.
The Treasury Department budget proposes an additional $5 billion to expand tax credits for new renewable manufacturing facilities.
In addition to the US $55 million requested specifically for geothermal technology development, the President’s budget also allocated energy funding that the geothermal industry will have a chance to compete for. This funding includes $300 million for the Advanced Research Projects Agency–Energy to assist in developing technologies such as the Enhanced Geothermal Systems (EGS) that an MIT report says could prove upwards of 800,000 MW of geothermal power across the United States.
The budget also gives $500 million in credit subsidy to support $3 billion to $5 billion in loan guarantees for energy efficiency and renewable energy projects and directs DOE to take the lead in federal efforts to double renewable energy generating capacity by 2012, a target that GEA’s most recent report says is possible within the industry.
The Treasury Department budget proposes an additional $5 billion to expand tax credits for new renewable manufacturing facilities and the budget would add funds for the Department of Interior (DOI) to speed up permitting geothermal and other renewable projects on public lands, adding $14 million to the currently $50 million DOI renewable energy budget.
“The United States is the world leader in geothermal energy production and the industry, with its expected double digit year-over-year growth, will be keeping our nation at the forefront of renewable energy development. We applaud President Obama’s emphasis on the need for our country to lead the world in renewable energy during his State of the Union address. His budget increases funding for geothermal energy, showing that this country is serious about developing the new technologies that will ensure energy independence, help sustain our planet, and create jobs," said Karl Gawell, GEA's executive director.
by Coco Liu, Chinese contributor
Shanghai, China [RenewableEnergyWorld.com]
Sales of Chinese solar modules, which accounted for nearly one third of the global market share, were shadowed in the wake of the financial crisis. However, what did not kill the Chinese companies made them stronger, especially in terms of product cost and market access.
Most of the top solar modules manufacturers in China had recovered as of the second half of 2009, according to Sean Tzou, the chief operating officer of Trina Solar Limited, a NYSE-listed Chinese solar photovoltaic company.
Along with sales recovery, the Chinese may have grabbed more market share from their international competitors. "Trina's global market share is estimated to have reached 6 to 7 percent in 2009, up from 3.5 percent in 2008, " said Tzou. "We also estimate that Chinese solar module manufacturers, including Taiwan, answered over half of the world's demand in 2009."
Better cost advantages played a key role. Up until mid-2008 Chinese manufacturers had to buy extremely high priced polysilicon, a major part of solar modules production cost, while their international competitors had access to long-term supply agreements at significantly lower prices. However, following the financial crisis, the global polysilicon price slumped by 87.5 percent, giving the Chinese a way in.
In addition, the Chinese processing cost is 30 percent lower than that of their European counterparts, which is a "remarkable cost advantage," said Shawn Kravetz, founder of Esplanade Capital LLC, an investment firm in Boston that focuses on solar companies.
Due to this product cost gap, Chinese manufacturers are able to attract large-scale solar project developers, while their European and U.S. counterparts suffer losses in the price competition, according to Trina's Tzou.
China's Suntech Power Holdings, the world's second largest solar modules supplier, also attributes its growth in shipments last year to improved cost competitiveness, said Rory Macpherson, the company's investor relations’ director. Suntech sales in 2009 are estimated to have increased by around 32 percent over 2008.
This advantage is expected to continue, despite the fact that increasing western manufacturers, such as SunPower Corp. and SolarWorld AG are opening new factories in Malaysia, South Korea and other Asian countries, in the pursuit of lower processing cost.
But cost competitiveness isn’t China’s only advantage, said analyst Jiang Qian with Shenzhen Zhongzhe Investment Consulting Co. "China's well-developed supply chain, cheap electricity, supportive policies and even low environmental standards, all contribute. While, currently, solar manufacturing conditions in Malaysia still lag behind."
Another major advantage for Chinese solar companies is their ready access to finance amid the global economic downturn. Backed by China's preferential policies towards renewable energy, domestic solar modules makers have benefited from supportive local banks.
"This is something that European companies do not enjoy," said Frank Haugwitz, former European Union Renewable Energy manager within the EU-China Energy & Environment Program. "Chinese companies have easier access to local finance institutions who could help them in their endeavor in developing new markets."
Such new markets include North America. In its latest second quarter statement, Suntech reported that "major investment in the U.S. market has resulted in rapidly growing dealer network." The company now has more than 200 authorized dealers throughout the United States, Canada and Mexico.
Like Suntech, other Chinese solar manufacturers are gearing up further expansion. As China's solar demand was awakened by government incentives last spring, Yingli Green Energy, a top Chinese solar manufacturer, opened a factory in South China's Hainan province in July, aimed at the domestic and Southeast Asia markets. And this year, Canadian Solar, another solar leader in China, will develop solar projects in South Korea together with LG Group.
Furthermore, China's state-owned investment companies that are involved in overseas solar projects may drive up the country's solar modules sales around the world. For instance, China Energy Conservation Investment Corp., which previously partnered with several local solar module makers in China, is talking to European developers about financing solar projects in Germany, Spain and Italy, according to a December report from Wall Street Journal.
While for now things look good, Chinese solar manufacturers may face challenges in the future, due to rising trade frictions with Europe and the U.S., where about 90 percent of their solar modules go to. In addition, the Chinese have to fight the concerns about quality that come from the “made-in-China” image, even though they have achieved equal or better quality ranks as Western manufacturers, said Esplanade Capital's Kravetz.
It seems Chinese solar manufacturers are winning the battle, but have not yet won the war.
"Well now, we [the Chinese] have good timing, advantage of financing, we get the market share, and then that will be our market share forever?" asked Haugwitz. "No, no, no. That would be a little bit too easy. The competition will go on...I look at a company, how good its quality, reputation and price."
Coco Liu is a professional writer, based in Shanghai, covering renewable energy and business news. Contact Coco at cliu.info@gmail.com
Can Renewables Really Power our Cities?
by Stephen Lacey, Podcast Editor
New Hampshire [RenewableEnergyWorld.com]
Over the course of history, the city has evolved from an agropolis, based on surrounding resources, to a petropolis -reliant on far-away food and fossil fuels. Now, with those environmentally-dangerous energy needs becoming harder to meet, can we make another transition to the ecopolis?
In this podcast, we'll look at the economic and logistical challenges in powering our cities with renewable energies. Some say it can be done – but only with a major re-evaluation of our current growth patterns.
Herbert Girardet, co-founder of the World Future Council and author of the book “Cities, People, Planet,” talks about the historic transformation the world's cities have undergone. He'll also describe the latest transformation, driven by rapid technological change, environmental concerns and energy supply constraints.
We'll also speak with Nate Hagens of the Post Carbon Institute about the uphill battle that renewables face in the transition to a clean energy future. He'll talk about the concept of Net Energy and why it may be more difficult to overtake fossil energies than we'd like to admit.
Finally, we'll chat with our contributor Denis Dubois of Energy Priorities Magazine about the sustainable neighborhood at the Vancouver Olympics this year. Dubois had the chance to tour the site, and we'll speak to him about what the project means for the cause of sustainable urban planning.
Inside Renewable Energy is a weekly audio news program featuring stories and interviews on all the latest developments in the renewable energy industries.
25% US Renewable Electricity Standard Will Create 274,000 Jobs
Washington, D.C., United States [RenewableEnergyWorld.com]
A new study released by Navigant Consulting finds that a 25% by 2025 national Renewable Electricity Standard (RES) would support hundreds of thousands of new American jobs and prevent a near-term collapse in some industries. Job growth in the wind, solar, biomass, waste-to-energy and hydropower industries would particularly benefit the Southeastern U.S. and manufacturing states whose Congressional delegations have had a history of voting against incentives and other measures designed to support the renewable energy sector.
The "Job Impacts of a National Renewable Electricity Standard" study was released by the RES Alliance for Jobs and found that a 25% by 2025 national RES would support an additional 274,000 renewable energy jobs over a no-national policy option. The 25% figure is significantly higher than RES mandate in current legislation and the expected jobs supported in the current House and Senate provisions would be considerably lower.
In addition, the study found that without stronger near-term targets than currently envisioned, industries like wind will experience flat job growth and long-term stagnation, while the U.S. biomass industry could collapse altogether. The RES Alliance recommends raising near-term RES targets in federal legislation to 12% in 2014 and 20% in 2020.
"A strong Renewable Electricity Standard is crucial to create a stable investment environment and grow this highly promising sector. Without a strong RES, the U.S. wind industry will see no net job growth, and will likely lose jobs to overseas competitors. A target like 25 percent by 2025 would allow American wind companies to support double the amount of jobs than without a policy -- about 125,000 additional jobs. That's a gain our country cannot afford to pass up," said Don Furman, senior vice president for development, transmission and policy at Iberdrola Renewables.
States that stand to gain the most from a strong RES, according to the RES Alliance / Navigant Consulting study, include:
•Louisiana, Alabama, Kentucky, Tennessee Georgia and Florida that can benefit from substantial biomass and municipal solid waste-to-energy
•Ohio, Michigan, Pennsylvania and Indiana, which will gain from growth in manufacturing for a wide range of technologies
•North and South Dakota, Iowa, Kansas, Nebraska and Illinois, home to major wind resources
•Colorado, Arizona, Oregon and California, where solar, wind and hydropower have significant growth potential
•States that do not currently have renewables standards or targets like Indiana, Florida, Virginia, Kentucky, Tennessee, Georgia, Arkansas, Oklahoma and Alabama
The study emphasizes that while tax credits continue to play a critically important role in preserving the viability of existing facilities, an RES is needed in order to support both near- and long-term investments.
To read the full report, click here.
US Continues Breaking Records, Installs 9922 MW of Wind in 2009
by Graham Jesmer, Staff Writer
Washington, D.C., United States [RenewableEnergyWorld.com]
In early 2009, the American Wind Energy Association (AWEA) and industry experts predicted that the year would see a drop in the amount of wind capacity installed in the United States. The continuing recession, lack of tax credit financing and a reduction in demand for energy were expected to cause a drop in installations by as much as 50% from 2008 levels. However, yesterday after the numbers were tallied, it turned out to be another record breaking year for the U.S. wind energy industry with nearly 10,000 megawatts (MW) put in the ground.
Alternative Energy?
The quick action on releasing ARRA cash grants for wind projects in the middle of last summer in particular helped to reverse what AWEA said was a tough situation for the industry. Wind developers took advantage of much of the $2 billion in grants that were released in order to build out 44 wind projects in 22 states, representing 3,200 MW of installed capacity.
The 9,922 MW installed last year expanded the nation’s wind plant fleet by 39% and brought total wind power generating capacity in the U.S. to over 35,000 MW. The five-year average annual growth rate for the industry is now 39%, up from 32% between 2003 and 2008.
These new projects place wind power alongside natural gas as the leading source of new electricity generation for the country. Together, the two sources account for about 80% of the new capacity added in the country last year. The wind energy industry brought over 4,000 MW of new capacity online in the fourth quarter of 2009 alone.
“The U.S. wind energy industry shattered all installation records in 2009, chalking up the Recovery Act as a historic success in creating jobs, avoiding carbon and protecting consumers,” said Denise Bode, AWEA's CEO. “But U.S. wind turbine manufacturing — the canary in the mine — is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow."
In a conference call, Bode called for the U.S. to set hard national targets for renewables, which would provide the incentive for wind companies to set up manufacturing facilities in the country.
Broken down by state, total installation numbers show that Texas continues to lead the states with a total of 9,410 MW installed. Iowa is second with 3,670 MW installed; California is third with 2,794 installed; Washington is fourth with 1,980 MW installed and Minnesota rounds out the top five states with 1,809 MW of capacity installed.
Texas also led the way in added capacity in 2009, with 2,292 MW installed. Other leading states in 2009 included Indiana with 905 MW, Iowa with 879 MW, Oregon with 691 MW and Illinois with 632 MW. The number of states with at least one utility scale project rose to 36 in 2009.
The industry cites the American Recovery and Reinvestment Act (ARRA) and the clear commitment to renewables from the Obama Administration as key drivers of the year's success. The quick action on releasing ARRA cash grants for wind projects in the middle of last summer helped to free up capital for the industry. Wind developers took advantage of much of the $2 billion in grants that were released and built out 44 wind projects in 22 states, representing 3,200 MW of installed capacity.
The year wasn't an unqualified success, however. The lack of a long-term policy at the federal level, combined with the continuing reticence of investors to get back into the manufacturing sector caused a drop in investment in wind manufacturing compared to 2008, with one-third fewer wind power manufacturing facilities online, announced and expanded in 2009.
Steve Sawyer, chairman of the Global Wind Energy Council said that the downturn in U.S. manufacturing and demand for new turbines is in line with many markets around the world and is a symptom of the recession.
"It was a tough year obviously, especially at the beginning when we felt the real aftershocks of the financial meltdown in the fall of 2008. There were not an awful lot of new orders," Sawyer said. "It's a bit of a different world and I'm hoping that the wind market continues to recover."
The result was net job losses in the manufacturing sector in the U.S., which were compounded by low orders and high inventory. Because more jobs were added in operations, maintanence and construction, total nation-wide job numbers in the industry remained flat at 85,000. This is in some ways welcome news to the industry, which expected to lose between 25 and 50% of its workforce without the federal government's investment through the ARRA.
Recovery Act incentives spurred the growth of construction, operations, maintenance and management jobs, helping the industry to save and create jobs in those sectors.
The manufacturing sector did receive a boost last month when it was announced that US $350 million in tax credits would go to more than 50 companies to invest in manufacturing of towers, blades, gears, gearboxes, generators, nacelles assembly and other components. AWEA cautioned that some of these projects will only move forward if other political action, like passing a national renewable energy target, is taken.
The noticeable disconnect between record installations and a drop in manufacturing investment was the result of the availability of large inventories of turbines that followed the market's collapse in late 2008, according to AWEA. The development of a "grey market" of developer-to-developer turbine sales also led to fewer new turbine orders in 2009.
Looking forward, AWEA said that it will be critical for Congress to pass an energy bill that includes a strong renewable energy target in order for the industry to continue its growth.
Passing such a bill could be a challenge, as Democrats no longer hold a 60-vote majority in the Senate. Gramlich said that Congressional Democrats will likely reevaluate their agenda and move forward on a smaller energy bill before the midterm elections this coming fall.
AWEA's projections for 2010 remain murky. Gramlich said that if there is a "strong political and market signal," the U.S. could see as much as 10 gigawatts (GW) installed again this year, which would include the 3 GW currently under construction. Without that signal, AWEA cautioned that it could be much less, especially if natural gas prices remain at their current levels and domestic manufacturing doesn't rebound.
Scott Sklar, president of the renewable energy consulting firm The Stella Group Ltd., said that he sees the 2009 wind numbers as part of positive trend in the industry that he expects to continue through this year, despite ongoing economic problems.
"The wind data confirms a cleantech 2009 trend, essentially that all energy efficiency and renewable energy markets expanded significantly during he height or the world economic crises. Sales should increase again in 2010," Sklar said.
- "HydroCor" offers Supply & Service of AQUASTEL devices.
- Onsite production of “ELECTROLYZED WATER”
- Neutral Electrolyzed Water (‘NEW’)
Alternative Energy?
The primary component of ‘NEW’ is Hypochlorous Acid (HOCL), the most effective element of chlorine. ‘NEW’ is pH neutral, super-oxidized water generated by electrolysis of a dilute salt solution passing through an electrolytic cell. This process creates large volumes of a gentle but extremely potent antimicrobial solution capable of rapid reduction of bacteria, viruses, spores, cysts, scale and biofilm. ‘NEW’ is stable, cost-effective to produce, greener than traditional chemical technologies, and can be used in multiple applications across a wide variety of industries.
‘NEW’ is an oxidizing agent due to a mixture of free radicals, giving it an antimicrobial effect. Studies have shown that ‘NEW’ is highly biocidal and can substantially reduce pathogens such as Salmonella and E. coli without the use of hazardous toxic chemicals. In addition, it offers the added benefits of being able to remove biofilm and scale from manufacturing equipment, thus, greatly minimizing a major contributor to contamination problems.
Because ‘NEW’ is an activated, not a chemical oxidizing agent, microorganisms cannot build up resistance to ‘NEW’ as they can to other sanitizers and disinfectants. Standard toxic chemicals can create strains of pathogens that become resistant over time, because the cell can expel or neutralize the chemical before it can kill it, thereby causing the overall efficacy of chemical cleaners and disinfectants to be significantly reduced.
Numerous applications have been identified in agricultural, horticultural, food processing and retail grocery venues where the produce, poultry, meat, seafood and dairy industries are particularly impacted. ‘NEW’ can be safely applied to food products, equipment and facilities using a variety of methods, including fogging, direct application on or dosing into a contaminated medium.
Aquastel Devices
Our devices are designed to produce ‘NEW’ on site for usage in various applications where there is a need for water purification, disinfecting and sterilization.
All devices have an EPA (Environment Protecting Agency) establishment number. Our devices meet all labeling requirements and we pay close attention to all the FIFRA (Federal Insecticide Fungicide and Rodenticide Act) requirements as to be fully compliant. No product is produced from our device for storage or later use as per regulations.
Basically the devices, using electric current 208-240 volt, produce Hypochlorous Ions on site on demand, which kill bacteria, mold, mildew, viruses and surface filling algae. The devices use sodium chloride (table salt) in a liquid format in water and an electric charge to generate HOCL on demand. HOCL does the killing of the life forms. When the electric charge has been turned off the devices produce no HOCL and have no residual in it.
Our devices do not require a hazardous use permit whereas chlorine (commercial available hypochlorite) in bottles must be permitted for filling, transportation or storage.
Electrolytic Flow Cells
Aquastel’s Electrolytic Flow Cells provide for safe and effective control of pathogens, when used as directed applying a rectified AC current voltage.
All components are produced within the US and supplied under manufacturers’ warranty: No leakages at 45psi pressure, no leaching of heavy metals into the disinfecting liquid and an extreme long lifetime of electrodes and membrane are guaranteed.
Electrolytic Flow Cells should be returned to and reconditioned by Aquastel after approximately 1 year of service in order to guarantee the disinfecting properties. An Electric Flow Cell can be reconditioned up to 5 times.
Manufacturing and quality
Our facilities are ISO 9001:2000 certified. Aquastel’s devices and Electrolytic Flow Cells are manufactured conform UL/CSA standards.
Aquastel contracted 3D-Machining Inc. to manufacture its Electrolytic Flow Cells. 3D-Machining Inc. is a FDA registered, ISO 9001:2000, ISO 13485, and GMP compliant facility. 3D manufactures high precision machined components and electromechanical assemblies. 3D Machining Inc is specialized in machining Titanium, Stainless, Aluminum, and Plastic that demand close tolerance and superior cosmetic finishing.
Aquastel contracted Delta Group Electronics Inc. to manufacture Aquastel Devices. Delta Group Electronics Inc. provides cost-efficient, high-quality assembly of custom and turnkey electronic assemblies for its business partners throughout the southern half of the United States. Based in Albuquerque, New Mexico, Delta Group also has assembly operations in Florida, Texas and southern California. The company maintains an ISO9001:2000 quality certification at each of its facilities, along with the upgraded AS9100 quality standard.
HydroCor has outstanding opportunities available and is seeking dealers and distributors for our product range. Contact us for more details.
Contact
Tel: 403 356 9212
Email: ECA@HydroCor.com
Prospects Fading for U.S. Climate Legislation in 2010
by Stephen Lacey, Staff Writer
Washington, D.C., United States [RenewableEnergyWorld.com]
Last summer, clean energy advocates were confident that the U.S. Congress would pass a comprehensive energy and climate bill by the time the Copenhagen conference rolled around. Now, as energy issues slip further down the policy priority list in the wake of that failed meeting, advocates are left wondering if the U.S. will see any significant piece of clean energy legislation in 2010.
"Sometimes you have to separate the climate issues and the renewables issues...They are both extremely important...but I sometimes have to pinch myself when I see where [the renewable energy industry] has come. It's on a trajectory that I don't think can be stopped."
-- Scott Sklar, President of the Stella Group, Ltd.
With health care, the economy and the upcoming mid-term elections dominating the political agenda in Washington, most onlookers now believe that an energy bill will be broken up into smaller pieces in order to make progress on key issues this year.
“It looks less and less likely that Congress will pass a broad climate bill. Lawmakers are now talking about individual bills focused just on one issue,” says Chris Stimpson, Executive Campaigner for Solar Nation, a grassroots lobbying organization run by the American Solar Energy Society.
Much has changed since the beginning of 2009, when the clean energy community was banking on President Obama's election promises to swiftly pass a climate bill that would put a price on carbon and create strong national targets for renewable energy.
The prospects for such a program looked good last July when the Waxman-Markey bill passed the House of Representatives. That piece of legislation created a cap and trade program, a 20 percent renewable energy target by 2020, a program to upgrade the electric grid and stronger energy efficiency standards. Although the cap and trade portion was criticized by some as being too lenient on polluters, the bill was a major step for renewables: It would have finally provided the national target that the industry has been seeking for years.
But then the climate bill quickly stalled in the Senate, where lawmakers have been sidetracked by the contentious health care debate. A number of politicians, including Democratic Senators John Kerry and Barbara Boxer, have introduced their own pieces of legislation; however, it is unlikely that the Senate will vote on either bill until March of this year. House lawmakers are now urging Senators to act soon, as the bills will expire at the end of this year when the Congressional session ends.
Because this is a Congressional election year, the make-up of the House and Senate may be different when the new session begins. That could mean that Democrats — who have been much more supportive of climate and clean energy legislation — will have less power to pass a strong bill next year. And if members of Congress are worrying about getting re-elected, they may not give as much attention to climate and energy issues this year.
“[Congress] may not have the energy, ironically enough, to work on an energy bill,” says Stimpson. “If it doesn't happen by Memorial day, this being an election year, it's generally understood here [in Washington] that you can forget it — nothing else will happen until after the election.”
The chance that individual, renewable-energy specific programs will get passed is much more realistic, says Stimpson. Some analysts believe that Congress will individually support more manufacturing tax credits for renewable energy companies, a renewable energy standard and increased funding for an overhaul of the electric grid, rather than an overarching climate bill.
Many advocates who see renewables as only one part of a broader carbon-reduction strategy are disappointed by this approach. Assuming the political landscape in Washington will be different in the next session of Congress, they see 2010 as a “make-or-break” year for climate change legislation.
“To say that we'll pass some parts this year and save other parts for other years, I think risks dealing with the bargaining in Congress that needs to take place,” says Jim Rubens with the advocacy group Clean Energy Works. “If we can't get them in this year, they're just going to be tougher to get later.”
To make matters more complicated, there is increasing backlash in Washington against an economy-wide cap and trade program. Many Senators have proposed more straightforward carbon taxes or “cap and dividend” programs, which would tax carbon at the source and then send the money back to taxpayers in different ways.
Most observers believe that cap and trade will be the policy of choice, but they agree that the debate could be delayed further as concerns over a complex trading program are worked out.
“I do believe [cap and trade] is on the train right now. But I do think there's going to be lots of compromise and lots of horse trading. And you never know what's going to end up in the sausage until the votes are taken,” says Analyst Scott Sklar, president of the Washington, DC-based consulting firm Stella Group Ltd.
In the meantime, the Environmental Protection Agency is gearing up to start regulating greenhouse gases under the Clean Air Act. This top-down “command and control” approach, which is much less flexible than a trading program, has many in the energy business worried. The Obama administration is using this option as a way to get Congress moving on a climate bill this year. It doesn't appear to be working, however.
Even though the passage of a comprehensive climate bill is becoming less likely each day, analysts are still positive about the prospects for renewables in 2010. After all, the Obama administration has given more support for clean energy in the last year than had been given in the last decade, says Sklar.
Sklar points to last year's stimulus package, increased government spending on R&D and the billions of private dollars that have poured into the industry as tell-tale signs of how strong the industry is today — even if Congress doesn't pass a bill that advocates were hoping for.
“Sometimes you have to separate the climate issues and the renewables issues...They are both extremely important...but I sometimes have to pinch myself when I see where [the renewable energy industry] has come. It's on a trajectory that I don't think can be stopped.”
When Will Renewable Energy Companies Overtake Traditional Energy Companies?
by Jennifer Kho, Contributor
California, United States [RenewableEnergyWorld.com]
Alternative Energy?Renewable energy has got buzz, growth and growing government support. But it's no secret that it still makes up a small portion of the overall energy mix. As interest in renewables increases, the question has begun coming up more and more often: When will renewable energy companies catch up to conventional energy companies? That is, when will we see an Exxon Mobil Corp., Chevron Corp. or ConocoPhilips of renewables?
In other words, the next BP of renewables could be BP.
Robert F. Kennedy Jr. brought more attention to this question with his prediction, repeated over the last several months, that clean energy would overthrow energy incumbents within the next decade. “We’re going to democratize the energy system in this country and take it away from the incumbents over the next 10 years,” he said at the Solar Power International conference in Anaheim last October.
As a new year — and new decade — begins, many hope it will launch a new era of growth and profit for renewable energy after a year of financial suffering. It's also a time when companies, as well as individuals, traditionally take stock of where they are and set new goals and resolutions. So it seems like a fitting time to examine this question and take a look at various predictions of when this might happen.
Total Energy
One of the most obvious ways to attempt to answer the question is by looking at how much of the world's energy comes from renewables today. According to the International Energy Agency's World Energy Outlook in 2008, renewables made up 18 percent — or 3,470 terawatt hours — of the global electricity generation in 2006, with most of that coming from hydroelectric and wind power. In the same report, the agency forecast renewable-electricity generation would overtake natural gas, becoming the world's second-largest source of electricity after coal, "soon after 2010." According to those predictions, renewables are on track to account for 4,970 terawatt hours in 2010 and more than 7,700 terawatt hours, or 23 percent of the global electricity production, in 2030.
That expected growth might have been slowed by financial difficulties this year. According to the 2009 World Energy Outlook, investment in renewables-based power generation "fell proportionately more than that in other types of generating capacity" in late 2008 and early 2009. The report forecast that investment in those projects may have declined by nearly one-fifth this year, and would have dropped by almost 30 percent without government stimulus packages worldwide. Even if renewables do still overtake natural gas by 2015, that isn't an apples-to-apples comparison as it compares all types of renewable electricity, including hydro, wind, solar and more, to only one type of fossil fuel.
Looking at the numbers for just one type of renewable energy, such as solar, for example, shows renewables are far behind in total production. Adam Krop, vice president for equity research at Ardour Capital Investments, said his company estimates that solar will likely only be about 1 percent of the total global electricity generating capacity for the foreseeable future — and that's an aggressive target. In the United States, which is a small solar market today, solar electricity accounts for only 0.01 percent of the total, he said, but could grow to 0.5 percent by 2020. "Growing from 0.01 percent to 0.5 percent still represents rapid growth, but growing to the size of conventional energy companies is not likely," he said.
As independent analyst Peter Lynch puts it, "If the solar industry doubled every year for the next 20 years, it wouldn't even be a significant number."
Meanwhile, an early release of this year's U.S. Department of Energy's International Energy Annual forecasts that the electricity generated from renewables worldwide will match that of natural gas in 2015, but sink slightly below it through 2030 (see chart here titled “Figure 6:World Electricity Generation by Fuel”). Renewables make up a much smaller portion of the total energy (not just electricity) usage, however. According to the report, renewables made up only 41.5 quadrillion Btu of the total world energy consumption compared with 28.5 quadrillion Btu for nuclear, 115.5 quadrillion Btu for natural gas, 136 quadrillion Btu for coal and 175.2 quadrillion Btu for liquids, including biofuels.
Profits and Revenues
But finding a single company large enough to rank among the energy majors isn't the same as comparing global energy output or usage. A common way of determining the size of a public company is its market capitalization, or the total value of all the shares owned by investors. Ardour's Krop pointed out that at $323.72 billion as of Dec. 31, Exxon Mobil's market cap is still 28 times larger than that of First Solar, the largest stock in his solar group, at $11.52 billion. It's also 26 times larger than Danish wind company Vestas Wind Systems' market cap of 64.57 billion kroner, or $12.47 billion. "My sense is that my solar group will not likely approach conventional energy company size in the foreseeable future," he said.
Another way to compare renewable- and conventional-energy companies is through their revenues and profits. Let's compare Vestas, the largest pure-play wind-turbine manufacturer, to Exxon Mobil, which sits at the very top of the Fortune 500. Exxon Mobil saw its revenue grow 18.8 percent to a whopping $442.851 billion last year as its profit grew 11.4 percent to $45.22 billion. Meanwhile, Vestas saw its revenue grow 24 percent to €6.03 billion last year — valued at $8.51 billion at the time of its annual report, according to Hoover's Inc. — while its profit grew 75.6 percent to €511 million.
If Vestas continued to grow at exactly the same annual rate, which is unlikely, it would catch up to Exxon Mobil's 2008 revenue in 18.7 years, and reach its profit in seven and a half years. (In dollar terms, revenue grew only 18.9 percent to $8.51 billion in 2008 from $7.15 billion in 2007, according to Hoover's. At that rate, it would take 23.3 years. But the discrepancy has to do with exchange rate differences, so we've instead compared euros to euros above.)
But unsurprisingly, Vestas' growth has slowed in 2009. In the first nine months of 2009, the company reported €4.13 billion in revenue, up 16.2 percent from €3.55 billion in the same period the previous year, and €264 million in profit, up 35.4 percent from the first nine months of 2008. According to its guidance, Vestas anticipates revenue of €7.2 billion for 2009, which would represent growth of 19.4 percent.
Of course, this is a simplistic way of looking at this question, as the growth of renewable energy isn't linear. Many as-yet-unknown factors play into the equation. For example, government incentives and other policies play a huge role in determining the market for renewable energy today, as well as the price of renewable projects compared to the ever-changing price of the traditional energy it might be competing with. "Until the industry can get along without government incentives, it will be at the mercy of how government incentives are structured," said Alfonso Velosa, a research director at Gartner Inc. He pointed to the consequences of the Spanish feed-in tariff, which more than quadrupled the country's solar market to 2.5 gigawatts in 2008 only to cut the program to 500 megawatts in 2009, leading to an oversupply of panels and shrinking panel prices globally.
Infrastructure challenges such as electrical transmission or biofuel distribution, as well as the need to figure out how to smooth and control the intermittent electricity from sources such as solar and wind, also stand in the way, he said. Financing for these projects will also likely need to improve before a renewable company will reach the Fortune 500. "Financing is the No. 1 concern for any renewable-energy project; it goes hand in hand with finding a customer," Velosa said.
Companies that help arrange financing for their customers, such as SunPower Corp., which offers power-purchase agreements through financing partnerships with the likes of Morgan Stanley and Wells Fargo, could have a big advantage, he said, adding that he expects to see more companies get into financing. All together, Velosa said, he expects to see world-scale renewable-energy companies emerge in 15 to 20 years.
Independent analyst Peter Lynch also forecasts it will take at least 10 years — and potentially "decades," as fossil-fuel companies continue to receive subsidies and government support far beyond renewables — to see companies at that size.
Shares and Returns
From an investor perspective, what matters most isn't a company's market cap or energy output, but the potential returns — or growth in share price — which depends, in part, on anticipated future revenue and profit. As Lynch pointed out, "Investors could care less which company is bigger, but care instead which company is going to grow the most," he said.
"Solar companies are going to grow a heck of a lot faster [than conventional energy companies]. They have potentially far greater room to grow; therefore, their stocks probably have equally greater potential to grow."
It's easier to invest in solar than in wind because the sector has far more pure play companies, or "more items on the menu," he said. For example, GE is a big player in wind power, but has so many other businesses that the wind part of the company doesn't drive the stock. "You don't buy GE because they have a good wind turbine," Lynch said.
Solar stocks dramatically outperformed the market in 2005, 2006 and 2007, although they fell way down in 2008, he said (see chart on returns, below). Lynch predicts that solar will be the fastest-growing segment of the energy industry, with returns exceeding those in oil and gas, but doesn't expect solar companies' market caps will overtake those of the oil and gas giants. Not all renewable-energy sectors perform similarly, though. He pointed out that biofuel stocks are down 50 to 80 percent over the last three years.
Short Answer: In a Long Time
From all of these different angles, it's obvious that renewable energy companies are a long way from catching up with fossil-fuel energy industry giants. In addition to all the above-noted variables, David Jones, editor of the Platts Renewable Energy Report, said he doesn't expect to see a renewable-energy company on the Fortune 500 until governments set a market price on carbon emissions. "Until that takes place, companies and other organizations will naturally release carbon because it doesn't cost anything," he said. "Once a price gets put on those emissions, renewables will be much more competitive." Europe already has a carbon emissions trading program, and the United States also is considering one in several proposed climate bills.
In addition, Jones said prices need to keep coming down to make renewable energy affordable for the majority of customers, and the industry needs to grow large enough so that renewable energy is accessible as an everyday option for most people. "I think there will be a time when utilities automatically add [a green power] option on their bills."
Consumer awareness and marketing is another big factor. "What you're going to need is some sort of consumer revolution in which renewable energy becomes a standard feature of energy generation," he said. "It's got to be in the consumers' interest beyond trying to make a difference. … It has to be really attractive to people as a product."
Overall, with a worldwide market, Jones said its always possible renewables could see explosive growth — and in fact solar is already becoming mainstream in some markets — but added that he'd be very hard pressed to predict a year — or even a decade – when a renewable company will reach that size. "In a nutshell, it's going to take a while," he said. Manufacturers of smaller-scale systems that are mass-produced and sold in large volumes to consumers are most likely to get to the Fortune 500, he predicts.
Still, keep in mind that looking at the state of pure play renewable companies hardly tells the whole story of the success and growth of clean energy. After all, many existing energy companies, including oil companies and major utilities, are getting involved in renewable energy, and Gartner’s Velosa said he expects that trend to keep growing. BP Solar, for example, has some advantages — such as experience in the energy industry, a familiarity of the market dynamics involved, the relationships and the ability to get financing — from its parent company, he said. And even though wind may make up a small part GE, the company is a major player in the sector.
Velosa expects to see large energy-generation and –distribution companies get more involved in renewables, leading to more mergers and acquisitions and other impacts. "Global companies are very interested in this because they see a market segment that has higher growth than the overall energy industry does," he said. In other words, the next BP of renewables could be BP.
And of course, a spot on the Fortune 500 isn't the only measure of success. Dan Adler, director of the California Clean Energy Fund, said while he wants the renewable industry to be huge and profitable, his gut reaction to the question of when renewable-energy companies would catch up to conventional energy players was "hopefully never." He would like to see the renewable industry retain a larger number of players rather than the few energy giants that exist in oil, gas and coal today.
While oil companies, for example, have to be big because oil's so expensive to produce and oil resources are more centralized, one of the goals — and strengths — of renewable energy is its diversity and the ability to distribute its production, Adler said. "The nature of the technology doesn't require the kind of scale and vertical integration [of oil companies]," he said. "If we start to see a lot of consolidation, we may be moving away from that strength."
Freelancer Jennifer Kho has been covering green technology since 2004, when she was a reporter at Red Herring magazine. She has more than nine years of reporting experience, most recently serving as the editor of Greentech Media. Her stories have appeared in such publications as The Wall Street Journal, the Los Angeles Times, BusinessWeek.com, CNN.com, Earth2Tech, Cleantechnica, MIT's Technology Review, and TheStreet.com.