Year: 2011

Posted on

“Crony Capitalism” Alleged Behind Tar Sands Pipeline Review

The Nicholas Institute for Environmental Policy Solutions at Duke University

The proposed Keystone XL pipeline, which could carry a diluted form of tar sands from Canada to Texas, has attracted the ire of many environmentalists, including Bill McKibben, who spearheaded protests in front of the White House last month.

This week, McKibben argued the Obama administration is practicing “crony capitalism” and that e-mails obtained through a Freedom of Information Act request imply the State Department—charged with evaluating the pipeline—may have worked closely with TransCanada, the company building the pipeline, to help the plan win approval.

The State Department rejected the accusations of bias. In response, the heads of a more than a dozen major environmental groups and other nonprofits called for President Obama to strip the State Department of its authority over the pipeline. Environmental groups also sued to stop the pipeline, saying TransCanada had unlawfully begun preparations in Nebraska for the pipeline, although it is still awaiting approval.

The opposition went more mainstream when a New York Times editorial called for the United States to “Say No to the Keystone XL,” arguing it would not do much to help energy security because much of the oil appears slated for export, and the best bet for long-term job creation is through renewable and alternative energy, rather than building more pipelines.

The European Union appears likely to stymie imports of fuels made from tar sands, through a new fuel quality directive.

Haunting Visit

The Obama administration also came under fire because the U.S. Department of Energy (DOE) had hired top campaign supporters to help direct loan guarantees and other support for cleantech companies, including $535 million for now-bankrupt solar panel manufacturer Solyndra.

Obama was warned before his May 2010 visit to Solyndra, the trip may come back to haunt him because the company was already looking shaky, according to newly released e-mails.

Before a major loan guarantee program ended, the DOE completed $4.75 billion in loan guarantees for four large solar projects, on top of $11.4 billion in loans backed by the program before.

Solar Decline

It’s not just solar companies such as Solyndra that have struggled. Sales of solar panels may drop in 2012, according to a Bloomberg New Energy Finance analyst and two large solar companies. This runs counter to 15 years of double-digit growth rates, and would be the first time, at least since 1975, that annual installations have fallen.

The U.S. solar industry is headed for a “solar coaster” as key federal subsidies are set to expire.

In Germany, consumers are rushing to install more panels in anticipation of a scheduled drop in the country’s solar subsidies. Chancellor Angela Merkel also said the government may cut the subsidies further.

With a surplus of panels on the market and prices falling, Germany’s plan to shut its nuclear plants may cost the country less than expected, taking away some of the bite of this transition.

Subsidy Backfire

In 2010, the world spent $409 billion subsidizing fossil fuels, up 36 percent from the year before, since policies remained largely unchanged while fossil fuels prices rose, according to a new report by the International Energy Agency (IEA).

In industrialized countries, subsidies tend to go to fuel producers, while in developing countries the price to consumers is subsidized as a way to help the poor. However, the vast majority of fossil fuel subsidies go to middle and upper classes, the report found. It also argued the subsidies encourage waste and make prices more volatile, thus backfiring by creating hardship for the poor.

The countries with the biggest subsidies are major oil and gas producers that rely heavily on oil revenue—mostly members of the Organization of Petroleum Exporting Countries (OPEC), plus Russia. In 2010, about half the subsidies went toward oil, a quarter toward natural gas, and the remaining quarter toward coal. “The time of cheap energy is over,” said the Executive Director of the IEA, Maria van der Hoeven.

Fighting Denial

Many of the leading Republican candidates for the presidency have, while on the campaign trail, questioned whether climate change is real, or whether people are causing it.

Some Republicans who supported policies to cut emissions in the past have been quiet about this issue recently. But National Journal reports that, behind the scenes, former Republican officials and other insiders are trying to shift the GOP’s focus back to acknowledging climate change is real.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Cutting Oil Use Should Be Focus of U.S. Energy Research, New Roadmap Says

The Nicholas Institute for Environmental Policy Solutions at Duke University

A major study modeled after goal-setting reports from the Departments of Defense and State, the first Quadrennial Technology Review by the U.S. Department of Energy (DOE), called for a shift in energy research and development priorities to reduce America’s dependence on oil.

“Reliance on oil is the greatest immediate threat to U.S. economic and national security and also contributes to the long-term threat of climate change,” the report said.

The DOE spends about $3 billion annually on research and development, with about three-quarters of that going toward “stationary energy” technologies—such as power plants and buildings—and one-quarter allotted for transportation. The report’s release could shift the funding balance more toward transportation, in particular more efficient cars and electric cars.

It will likely shape the 2013 fiscal year budget request from the Obama administration, due to be sent to Congress in February 2012.

Big Dreams

But a longer-term view isn’t synonymous with funding blue-sky ideas, as in the DOE’s Advanced Research Projects Agency-Energy (ARPA-E), which Time dubbed “the Department of Big Dreams.” The Quadrennial Technology Review criticized the DOE for placing too much emphasis on technologies “multiple generations away from practical use.”

Instead, the report called for greater focus on integrated energy systems and deployment over the medium to long term. The Obama administration has no choice but to focus on the longer term, argued Jeff Tollefson of Nature, because the weak economy and political stalemates have stymied progress in the shorter term.

The report sticks close to President Obama’s goals: getting one million electric cars on the road by 2015 and cutting oil imports by one-third by 2025. It also focuses on modernizing the electric grid and deploying clean energy, in line with Obama’s goal for 80 percent for America’s electricity to come from clean sources by 2035.

Carbon Credit Controversy

WikiLeaks has once again stirred up controversy, this time by releasing a diplomatic cable sent by the U.S. embassy in India, revealing discussions about questionable projects there that earn carbon credits through the United Nation’s Clean Development Mechanism (CDM).

Most of the CDM projects in India should not have been certified, the cable said, because they did not achieve emissions cuts beyond what would have happened without the sales of carbon credits.

The cable shows “the CDM is basically a farce,” said a group critical of the program, but officials involved in the program said it has been improved since the cable was sent in 2008.

However, an investigative series last year by the Christian Science Monitor found many instances of fraud and exaggeration. And last week Oxfam published a report alleging 20,000 people were evicted from their land in 2010 to make way for a tree plantation that would earn carbon credits.

Superconductor Espionage

American Superconductor, which designs magnet systems for wind turbines, alleges that Chinese turbine manufacturer Sinovel, its largest customer, stole trade secrets by bribing a disgruntled employee, one of a handful with access to a crucial bit of software.

A court in Austria is hearing the case, in which Sinovel stands accused of offering the rogue employee an employment contract worth at least $1 million. The employee only received a small fraction of what he was promised, and American Superconductor sent Sinovel many parts also without receiving payment.

Sen. John Kerry said such theft would hurt American investment in China.

Master of the Domain

With the internet opening to new domains, there has been a tussle over who will control the .eco domain, with Al Gore’s Alliance for Climate Protection vying against the Canadian company Big Room, supported by former Soviet leader Michel Gorbachev’s charity Green Cross International.

Al Gore’s group has dropped its bid, after many green groups—including 350.org, Greenpeace, and WWF—backed Green Cross International. The new domain is intended to be a badge of credibility, said the co-founder of Big Room, and may require disclosure about environmental performance when registering to use the domain.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Ending Fossil Fuel Subsidies May Be the Way to Jumpstart Climate Finance

The Nicholas Institute for Environmental Policy Solutions at Duke University

A leaked World Bank document, due to be presented at the G20 meeting in November, proposes that rich countries eliminate their fossil fuel subsidies and instead contribute the money to climate aid for poor countries to help with green energy and adaptation measures. The paper also said donor countries are unlikely to come up with the money they had pledged to give during 2011 and 2012.

Just five years ago, climate change adaptation was a taboo subject among many environmentalists—as a feature in Earth Island Journal recounts—but things have changed a lot in recent years. Now the Global Adaptation Institute has released a new ranking of how prepared countries are, weighing the likely impacts of climate change in a country against its ability to adapt.

In general, wealthier countries came out on top, with Europe, North America and Australia occupying most of the top 20 spots, and at the bottom were many of the poorest countries that receive the bulk of the world’s development and aid money. Overall, the countries to be hardest hit are also the least able to adapt.

For new adaptation spending, there is a “sweet spot in the middle” for getting the most bang for the buck, investing in countries that are not very wealthy, but also don’t get international aid, said Ian Noble, chief scientist at the Global Adaptation Institute’s council of scientific advisers.

Some countries are already receiving aid for climate change adaptation and emission cuts—but donor countries are not being transparent about their contributions, said a new report from the International Institute for Environment and Development. Norway ranked the highest in transparency, whereas the U.S. was in the middle of the pack, and New Zealand got the lowest score. Of major concern is that donors may be redirecting funds from other development efforts, rather than giving additional aid for climate efforts.

In response to such concerns, the World Bank has launched an Open Data Initiative to allow easier access to more information.

Earlier this month, U.N. Secretary-General Ban Ki-moon also called for transparency on the part of climate aid recipients—in particular, small island nations.

Grim Energy Forecast

The U.S. Energy Information Administration (EIA) released what may be its final International Energy Outlook, a report it has published annually, but that was canceled after the EIA’s budget was slashed 14 percent this year.

Some of its highlights include the projection in its reference scenario that global energy use will rise about 50 percent over the coming quarter-century, with half the increase coming from China and India.

The reference scenario also projects renewables (including hydroelectricity) will be the fastest-growing energy source, growing close to 3 percent a year and more than doubling in production over 25 years. But natural gas, coal, and oil all register significant increases as well in this scenario, and the world’s fossil fuel mix shifts increasingly toward coal.

As Time‘s Bryan Walsh comments on the EIA’s scenario, “If you care about climate change, that’s a pretty grim forecast.”

In the near term, debt crises around the world may slow the growth of economies and energy use—including in India and China—said Harold Gruenspecht, acting administrator of the EIA.

China’s Environmental Movement

As a reminder that not every aspect of cleantech is necessarily clean, in China hundreds of protesters camped outside a solar panel factory they accused of polluting a river. After protesters broke into the facility and destroyed offices and overturned cars, the factory closed. Following the protests, the company, JinkoSolar, did pledge to clean up its operations.

Last month, a mass demonstration about a chemical plant in northeast China led the government to close it and promise to relocate it. An increase in such protests in recent years, said an Agence France-Presse article, marks a rising environmental awareness in China.

Sensor Genius

The Macarthur Foundation announced this year’s batch of “Genius awards.” The youngest winner was 29-year-old Shwetak Patel, an assistant professor in computer science at the University of Washington. He won for work on sensor systems that can allow people to track, among other things, energy and water use from individual appliances. He invented a device that plugs into a socket and, by measuring noise in a house’s circuits, figures out when a fridge is running or a TV is on, and, over time, tracks the consumption from each product.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Ending Oil Tax Breaks Could Pay For New Jobs—and Some May Be Green

The Nicholas Institute for Environmental Policy Solutions at Duke University

President Obama unveiled a new job creation plan in a major speech to Congress last week and follow-up speeches this week, in which he called for an end to tax breaks for oil and gas companies to bring in an additional $32 billion over 10 years to pay for increased government spending.

Earlier this year, Obama called for repealing those same tax breaks to help pay for clean energy.

In his new speeches on jobs, Obama has not dropped the words “energy” or “green”—but some commentators said, reading between the lines, the president is still calling for more green jobs.

As green stimulus programs have approached their end, in recent months there has been controversy over how many green jobs—and of what kinds—were created.

An article featured in the New York Times said there were not as many jobs created as some had hoped, and that the spending helped outsource numerous jobs to places like China. But sources quoted in the article shot back, saying the article, among other things, neglected to mention many of the green jobs companies created in the United States.

A recent study estimated green stimulus spending created 367,000 jobs directly, and also created jobs indirectly that brought the total to one million jobs.

Meanwhile, the oil and gas industries said they can create 1.4 million jobs, if many areas are opened to drilling—but to create that many jobs would require drilling in the Arctic National Wildlife Refuge, off the East and West coasts and Florida’s Gulf coast, and on most federal lands besides national parks.

Solar Probe

One company touted for its green jobs—solar panel manufacturer Solyndra—was probed by Congress this week, since it had received $535 million in federal loan guarantees before declaring bankruptcy this month, triggering an FBI raid.

While some have accused Republicans of grandstanding and using the company’s failure as a way to argue against green stimulus spending, some Democrats who supported the company said they also want answers—such as Henry Waxman, who released a July letter from the company indicating it was in good financial shape.

There are many myths about the situation, however, wrote Brad Plumer of the Washington Post. While there do seem to be irregularities about the way the company got its loan guarantee, Plumer argued its failure does not shoot down the idea of green loan guarantees or cleantech subsidies.

Going Flat

Overall, the U.S. failed to add any additional jobs in August, retail sales were flat, and fears grew of an approaching recession.

The fragile economic situation is having widespread effects on energy, with many forecasters lowering their expectations for oil demand the rest of this year and next year. Nonetheless, Americans may spend a record amount on gasoline this year: $491 billion.

Also, the growth of U.S. ethanol consumption appears to be slowing down, after registering several-year growth spurt, in part because of a drop in gasoline use and because most gasoline is now at the legal limit with 10 percent ethanol blended in.

The economic slowdown is likely taking a bite out of some energy efficiency efforts as well, the Energy Information Administration pointed out. Refrigerator replacements, for example, have dropped over the past several years—meaning people are sticking with older, less efficient fridges.

Two Kinds of Green

Two-thirds of the world’s 500 largest companies now include climate change in their business strategies, according to a survey by the Carbon Disclosure Project—and companies that work to cut their greenhouse emissions also outperformed their competitors on the stock market. Also, more companies reported their efforts to cut emissions have resulted in actual reductions, with the fraction soaring from about one-fifth in 2010 to nearly half in 2011.

Sails, Flowers and Honeycombs

Most pylons for power lines are reminiscent of the 19th-century Eiffel Tower, but a U.K. competition for “pylons of the future” aims to update this piece of critical infrastructure. Energy and climate change minister Chris Huhne announced six finalists in the competition, including a pylon design resembling a cylindrical honeycomb, a curved design similar to the sail-shaped Burj Al Arab hotel in Dubai, and another with a single stem branching out to several arms like a flower’s stamens.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Solar Industry “Darwinism” Weeding Out Weaker Companies

The Nicholas Institute for Environmental Policy Solutions at Duke University

Solar panel manufacturer Solyndra, which recently filed for bankruptcy, got special treatment from the Obama administration, some have alleged, since the company’s $535 million in federally guaranteed loans had much lower interest rates than those of other green energy companies, according to an investigative report.

The FBI raided Solyndra’s office, although it would not comment on the reason. The company shut without giving notice to its employees and contractors, which many large companies are legally required to do.

However, Lewis Milford of the Clean Energy Group argued critics are inconsistent in highlighting Solyndra’s failure, since there are many examples of failure in government projects—and that a high rate of failure is inevitable in innovative fields. Overall, the Loan Guarantee Program has performed well, and Solyndra’s failure is not a reason to abandon it, Forbes argued.

Solyndra is only one of many solar energy companies around the world struggling recently, due in large part to rising costs of materials and weaker-than-expected demand for panels, which have led to a sharp rise in mergers and acquisitions compared with last year.

Germany has long been a solar powerhouse, but one of its companies—SolarWorld—is also having trouble, and is shutting down factories in Germany and the U.S. and consolidating manufacturing. Another German solar company, Solon, is shutting an Arizona plant and laying off workers.

All this activity “is Darwinism at work in business,” said an executive of manufacturer Abound Solar.

Solar at Scale

Nonetheless, large solar projects are moving ahead. The U.S. has offered a loan guarantee for putting solar panels on military housing, which could double the number of residential rooftop arrays in the country.

With solar panel costs falling, the European Photovoltaic Industry Association said, solar could be competitive with conventional energy within a couple of years in some markets, and across Europe by 2020.

Also, a new projection from the International Energy Agency said in 50 years’ time, solar energy could provide more than half the world’s power.

Spinning up Fresh Debate

Iran joined the list of nuclear countries by connecting its first nuclear power plant to the grid last week, according to the country’s official media.

Also, the International Atomic Energy Agency reported Iran began running upgraded centrifuges. Iran also offered to allow inspectors “full supervision” of its nuclear activities for the next five years, in exchange for lifting sanctions.

Iran has reportedly tested weapons systems, which some experts said cast doubt on Iran’s claim that its nuclear program is limited to producing electricity. But arms expert Mark Fitzpatrick of the International Institute for Strategic Studies said that without proof, it is too soon to jump to the conclusion Iran is pursuing nuclear weapons. Nonetheless, in discussions at the United Nations, several countries kept pressure on Iran to suspend uranium enrichment until a monitoring deal is worked out.

Storm Brewing Over Clouds

A paper in the journal Remote Sensing has generated a lot of thunder, since the authors argued their study of clouds suggested the climate is not as sensitive to greenhouse gas emissions as had been thought. But many other experts have poked holes in the study, with one arguing the controversial study’s model fails to conserve energy, so it violates a basic principle of physics. The journal’s editor resigned over the controversy.

Energetic Ghost Town

To test out new energy technologies in conditions between the overly controlled confines of the lab and the all-too-messy real world, a company is planning to erect in New Mexico a 20-square-mile, $200-million “ghost town” outfitted with real buildings—but no people.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Tar Sands Pipeline Gets Green Light in Environmental Review

The Nicholas Institute for Environmental Policy Solutions at Duke University

Hundreds of protesters—including famed climate researcher James Hansen—have been arrested in protests in front of the White House over the past two weeks, in an attempt to stop the construction of a pipeline from Canada to Texas to carry diluted tar sands to Gulf Coast refineries, mainly over concerns about greenhouse gas emissions and risks of tainting a nearby water aquifer.

The U.S. State Department has been weighing whether to approve the pipeline, and under what conditions. In a major step last week, the State Department published its final environmental review, which said the pipeline would have “no significant impact to most resources” along its path, assuming “normal operation.”

U.S. Secretary of Energy Steven Chu said energy security concerns could help the pipeline win approval on the grounds that importing oil from Canada is preferable to imports from the Middle East—an argument echoed in a Washington Post editorial by veteran business reporter Robert Samuelson.

Shale Gas Shakedown

The Marcellus shale deposits—so far, the biggest site for hydraulic fracturing, or fracking— may contain far less gas than recently projected by the U.S. Energy Information Administration (EIA), according to a new assessment by the U.S. Geological Survey.

Although the new estimate is higher than the U.S. Geological Survey’s own 2002 estimate, it is much lower than an estimate EIA published earlier this year. In response, the EIA said it will downgrade their next estimate—perhaps by as much as 80 percent. But the Washington Post reports there may be more to these numbers.

In light of allegations that petroleum companies have overstated how much gas they could get out of shale deposits, the New York State Attorney’s Office is investigating whether companies “overbooked” reserves. Earlier this summer, federal lawmakers called on the Securities and Exchange Commission, the EIA and the Government Accountability Office to investigate industry estimates.

Rise and Fall of Solar, Wind

China achieved a meteoric rise in wind power over the past five years, and last year pulled ahead of the U.S. to become the country with the largest installed capacity of wind turbines.

At the same time, the growth of China’s wind industry is slowing down due to over capacity and withdrawal of subsidies, among other causes. And some of China’s largest wind turbine manufacturers reported falling profits due to fierce competition, as has been seen in the solar panel industry.

Solar manufacturers in the U.S. and Europe have been struggling to compete with panels from Asia, China especially. Two weeks ago, Evergreen declared bankruptcy, followed by Solyndra this week. Both companies had been touted by the Obama administration and local officials as models for the green economy. New York-based SpectraWatt, a solar spin-out from computer chip manufacturer Intel, also filed for bankruptcy.

Meanwhile, China is pushing ahead with plans to greatly expand their installations of solar power, doubling their targeted installations over the next decade. By 2015, they aim to have 3 gigawatts installed—10 times as much as they had last year—and by 2020, 50 gigawatts.

Despite such difficulties in the market, the United States’ net exports of solar power products more than doubled in 2010 compared with the year before, reaching $1.8 billion. Total U.S. exports of solar products rose 83 percent, to $5.6 billion, in part because Asia is importing equipment for manufacturing solar panels.

Burying the Problem

The first industrial-scale carbon capture and storage (CCS) plant in the U.S. broke ground in Illinois, with the aim of capturing emissions from a large corn ethanol plant. Work on the plant began just after a U.S. utility canceled its plan for CCS on a West Virginia coal plant.

In Canada, a CCS plant for capturing emissions from tar sands processing may move ahead after Canada’s government recently agreed to underwrite two-thirds of the $1.35-billion project’s cost.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Libya’s Revolution Could Provide Stimulus through Cheaper Oil

The Nicholas Institute for Environmental Policy Solutions at Duke University

After rebel forces swept into Libya’s capital, Tripoli, the country may be able to start to ramp oil production and exports again, which many analysts hope will bring down oil prices.

Libya claims Africa’s largest proven oil reserves, and was producing about 1.6 million barrels a day when the production suddenly dropped to near zero in February. Many analysts said it will take two to three years for Libya’s oil production to recover to previous levels, and by year’s end they may only be producing a quarter to a third as much as before.

Even before rebels had taken over Moammar Gadhafi’s compound, oil companies were preparing to return to the country, which they left months before.

So far, though, the price has been up and down, in part because of anticipation of the outcome of a summit this week, which may result in a new round of quantitative easing, which would likely drive down the value of the dollar.

Trading Leaks

To try to understand how much speculators are driving oil prices, the Commodity Futures Trading Commission has been looking into “excessive speculation.” Earlier this year, five traders were charged with making $50 million off speculation.

Sen. Bernie Sanders, a long-time critic of oil speculation, became frustrated with the pace of investigations and leaked the records of many trades.

Unconventional Contention

While dozens were in jail in Washington, D.C., after protests to oppose the construction of another pipeline carrying tar sands products from Canada to the U.S., a New York Times editorial argued against the pipeline because of high greenhouse gas emissions from tar sands operations. Canadian officials, meanwhile, stepped up lobbying on its behalf.

Producing natural gas from shale deposits using hydraulic fracturing has also been under scrutiny for its greenhouse gas emissions, and now a new study argues Marcellus Shale natural gas has slightly higher emissions than conventional natural gas, but fewer emissions than coal.

West Virginia issued emergency rules to regulate horizontal drilling, which the governor hoped was a first step to more permanent regulations for this drilling.

Dark Days in America, Brighter Elsewhere

With budget woes, spending cuts, and more spending cuts scheduled to be made over the coming years, it appears renewable energy in the U.S. is entering “dark days,” reported GreenBiz.

But renewables are gaining increasing traction elsewhere. In Brazil, in a large power auction, wind emerged as the cheapest source of electricity, beating out natural gas and hydroelectric power. The contracts could lead to the construction of 1.9 gigawatts of new wind farms.

Japan is expected to pass a renewable energy bill that would introduce a feed-in tariff to make renewables more attractive, and set down in law the government’s target of cutting greenhouse gas emissions 25 percent (compared with 1990 levels) by 2020. To cope with the Fukushima disaster, though, Japan has boosted its use of fossil fuels in the short term.

Germany’s national rail company, which is the country’s biggest electricity consumer, is also moving toward renewables, planning to quit fossil fuels by 2050.

The Billionth Car

The future is bright for electric cars, according to a forecast from Pike Research, which said worldwide sales are likely to grow to 5.2 million by 2017, more than 50 times this year’s estimated sales.

However, even then electric cars would make up a tiny fraction of all cars, with more than one billion on the road as of 2010, a new study said. About half of the recent growth in cars has been in China, which has higher efficiency standards than the U.S., but the country is showing little interest in hybrids and electric cars.

Scientists Scrutinized 

Scientists working on climate change have been under scrutiny, with a polar bear researcher being suspended from his job for the U.S. government.

Another researcher came under fire after the “Climategate” leak of e-mails. He was cleared earlier this year in an investigation by his university, and now has been cleared in a second investigation by the National Science Foundation.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Scrambling to Head Off Power Outages Caused by Heat Waves, Rapid Growth, and Disaster

The Nicholas Institute for Environmental Policy Solutions at Duke University

Texas has suffered through the worst drought and one of the worst heat waves on record, pushing electricity use to a record high in an attempt to cope.

Texas is the state with the largest installed wind capacity, and recently installed wind farms came through to boost the state’s electricity generation just in time. However, even this jump was not enough to meet demand, and four mothballed natural-gas plants will be fired back up. Thermostats that power companies can automatically adjust also helped ease demand.

The state suffered through blackouts earlier this year, and the mere threat of more outages recently has boosted home energy audits and efficiency measures, as well as calls for more renewable energy.

Texas may also beat Massachusetts to the punch, installing America’s first offshore wind farm before the long-delayed (but finally approved) Cape Wind project. The 600-turbine, 3-gigawatt project may have its first turbine up and spinning by year’s end.

Shortages Boost Fossil Fuels

China also had to ration electricity earlier this year, and is facing a power crunch over the next few years as it struggles to keep up with fast-growing demand.

To meet the demand, China’s coal use is soaring, and the country became a net importer of coal in 2009. In July, the country’s coal imports broke a new record, possibly driven by worries of outages, and by the government’s decision to allow power companies to charge more.

Earlier this month, it was reported that China is planning to create a national cap on energy use as part of a plan to limit greenhouse gas emissions.

China is not the only one boosting coal imports. The U.K. is buying increasing amounts of coal from the U.S., and the European Union’s demand for coal may increase.

Likewise, Japan has coped with a drop-off in nuclear power mainly by using more liquefied natural gas, but was able to boost its total electricity generation higher than last year, before the Fukushima disaster.

The increased cost of energy in Japan, said some experts, risks pushing the country into a third “lost decade” of economic stagnation.

Making Fracking Friendlier

The push to produce more natural gas through fracking needs further examination to reduce any environmental risks it could be causing in the U.S., according to a task force organized by U.S. Secretary of Energy Steven Chu. Companies are failing to follow best practices, and the explosive growth of fracking has left regulators behind, the task force said, prompting the need for stronger regulations. However, the panel made few specific recommendations of how to improve the situation, focusing mainly on collecting more data on the effects of fracking and sharing the data publicly.

While there are state regulations on fracking practices, the U.S. Environmental Protection Agency proposed earlier this month its first air pollution standards aimed at cutting smog and greenhouse gas emissions from these wells.

Renewables’ Attraction

While many economies are struggling, large investors are finding renewable energy looks more favorable, with insurance giants such as Allianz and Munich Re putting billions into wind and solar and  big banks funding large installations.

The world’s biggest solar power plant, to be built in California, will use photovoltaics rather than concentrated solar, its developer announced, because of the drop in solar panel prices.

Although U.S. residential solar power has not grown as quickly as in some other countries, such as Germany, do-it-yourself kits and innovative installations are making the investment more attractive.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

As Markets Dive, Clean Energy Stocks Hit by “Triple Whammy”

The Nicholas Institute for Environmental Policy Solutions at Duke University

The stock market took a beating this week, after the rating agency Standard & Poor’s downgraded U.S. bonds—but clean tech stocks have been falling even faster than the market as a whole.

Shares in clean energy companies have been hit by a “triple whammy”—producing too much capacity for the demand, problems with government debt, and broader risk aversion among investors. As a part of this, clean energy venture capital funding has dropped 44 percent when compared with last year.

Analysts from the global bank HSBC said wind energy stocks are undervalued and their prices could fall more as debt crises in both the United States and European Union stand to cut wind subsidies further. There are more than seven gigawatts of wind projects under construction now—but few planned beyond 2013 because of uncertainty about policies.

Solar stocks were down after many companies reported dismal second-quarter results, as prices on panels fell—but not as fast as the costs of producing them—and as their margins shrank. First Solar, the biggest solar panel manufacturer outside of China, boosted production but suffered a large drop in profits—and their share price. Suntech, the biggest manufacturer, also saw its stock fall, hitting a one-year low.

But some analysts say renewables stocks are bottoming out, and are set to rise again.

Adjusting to No Nukes

Germany decided to phase out nuclear power within 10 years and rely more heavily on renewables, and the country’s utilities are scrambling to adjust. E.ON, the world’s biggest utility in terms of sales, suffered its first-ever quarterly loss and is laying off 11,000 workers as it aims to boost its spending on renewables.

Another utility, RWE, is also selling off assets to cope with poor performance—but is planning to stick with its renewables investments.

Making the Military Green

The U.S. military is the single biggest user of oil in the world, and has been warned by analysts its dependence is a security threat. Now the U.S. Army has formed a new renewables office that may spend $7 billion over the next decade on renewable and alternative energy power.

Although the military has a target of using 25 percent renewable energy by 2025, many installations lack the expertise to move forward quickly enough, said the U.S. Department of Defense, and the new office aims to fill that gap.

Meanwhile, units within the mega-corporations Boeing and Siemens have teamed up to pursue military contracts for smart-grid technologies, which the military could develop and bring down the costs, helping them reach the market later.

Risky Business

With oil prices high and political uncertainty in many oil-exporting countries, the U.S. faces near-record energy security risks, according to a new U.S. Chamber of Commerce report. In 2010, their energy risk index is as high, as in the late 1970s and early 1980s, and near the record high of 2008. The Chamber predicts the risk level will remain high for another 25 years.

With gloomy economic prospects, the International Energy Agency (IEA), the U.S. Energy Information Administration, and the Organization of Petroleum Exporting Countries all agreed oil demand later this year is likely to be less than they had thought.

With Saudi Arabia boosting its production to the highest level in 30 years, oil prices have fallen a bit in recent weeks, but this is largely because of weak economies, the IEA said.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

China Aims to Become Solar Powerhouse with New Subsidies

The Nicholas Institute for Environmental Policy Solutions at Duke University

China is already the world’s biggest solar panel manufacturer, but now it is making a move to become a major solar energy consumer as well, with a nationwide feed-in tariff to pay people or businesses a subsidy for electricity they produce with solar panels. This follows on the heels of the country’s wind energy feed-in tariff in 2009, which led to explosive growth in their wind industry.

China had a mishmash of solar incentives before, but the new policy will give a clearer signal to the market and “encourage more companies to participate in the industry,” said an analyst from Bloomberg New Energy Finance.

China’s latest five-year plan, released in March, set the goal of using 20 percent renewable energy by 2020, and a solar feed-in tariff has been expected for months—so in anticipation many solar installations have already gotten rolling, and a flurry of projects may soon qualify.

Fast and Steady Wins the Race?

China, Germany and the U.K. have the most stable and consistent clean energy policies, which helps boost investment, according to a new report by Deutsche Bank Climate Change Advisors.

However, on the same day as China’s announcement, the U.K. put into place a cut in its solar power subsidy for installations over 50 kilowatts, “effectively ending solar farm development” in the country, Business Green argued.

There was a stampede of projects trying to get completed before the deadline, but some are planning more large installations nonetheless. Also, it turns out a loophole in the solar feed-in tariff would have allowed large projects to still get high subsidies—but the government is now moving to close that.

The U.K. had planned to raise subsidies for other clean energy—but it is delaying the raise in the feed-in tariff for anaerobic digesters.

Besides the U.K., a number of other European countries—including Spain, Italy and the Czech Republic—hacked away at their solar subsidies before, and now the Australian state of Western Australia has also eliminated theirs.

The Canadian state of Ontario, on the other hand, is trying to protect clean energy projects by changing regulations to make it harder to cut clean energy subsidies.

Meanwhile, solar installations have been rising fast worldwide as the price of solar panels has fallen about 20 percent in the past year. But manufacturer’s margins are also falling, so it is not clear how much longer these price trends can continue.

Ethanol Subsidy Survives—For Now

It came down to the wire, but the U.S. Congress passed a deal to raise the debt ceiling before the Aug. 2 deadline, and Obama signed it into law.

But the deal did not include a near-term cut of ethanol tax breaks, as some had expected, which would have netted an estimated $2 billion in additional revenue.

However, it is likely the ethanol tax break will not be renewed, in which case it would cease at the end of this year.

Meanwhile, ethanol producers are pushing for a change in regulations to allow more ethanol to be blended into gasoline, allowing gasoline to be E15—15 percent ethanol—compared with E10 today. Last month, experts testified to Congress that the higher ethanol content may damage some cars’ engines, and more tests were needed to ensure E15 is safe.

There are also plans to carry ethanol in existing oil pipelines—but a new study found ethanol could crack the pipes, since bacteria that eat the fuel and excrete acids could thrive inside the pipes.

Making the Smart Grid Smarter

There have been many proposals for making our electricity grids and appliances smarter to help them use less electricity at peak times and shift use to off-peak hours of the day.

However, if many people’s appliances all switch on suddenly when the electricity rate drops, an MIT study found, the spike in power use could bring down the grid. But smarter tuning of how electricity rates go up and down during the day could avoid the problem.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.