Tag: renewables

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Debt Ceiling Impasse Could Hit Clean Energy Hard

The Nicholas Institute for Environmental Policy Solutions at Duke University

Clean energy could be among the hardest-hit sectors if the U.S. government does not raise the debt ceiling and then defaults on the national debt.

If there is a default, it could hurt in direct ways, by stopping payments for cash grants and loan guarantees that support many renewables projects. It could also hit innovation, by putting the Department of Energy program for cutting-edge energy technologies, ARPA-E, at risk.

A default could also hit indirectly, by pushing down the value of the U.S. dollar, as well as pushing up interest rates, which would affect financing for renewables projects that require large up-front investment.

Leaving Energy Subsidies, Credits Behind

Any kind of budget deal will have to include large spending cuts. According to a survey of experts by the National Journal, most energy subsidies and tax breaks could be cut back. Subsidies for wind and solar may fly under the radar and survive cuts—at least for a little while.

Corn ethanol subsidies are likely to face big cutbacks, following a Senate vote in June. Any plan to raise the debt ceiling would most likely include slashing the 45-cent-per-gallon credit for gasoline blended with ethanol. “We don’t need the excise tax credit,” said Chuck Woodside, chairman of the national Renewable Fuels Association, because ethanol is now cheaper than gasoline.

The tariff on imported ethanol is likely to go soon as well, reported Ethanol Producer—either at the end of the year when current legislation expires, or sooner, if that legislation is repealed by a deal on the debt ceiling.

Making Oil Go Further

Problems with the debt ceiling could have mixed effects on the price of oil, which has been rising again in recent weeks. A default would likely push down demand, but also push down the value of the dollar—which would have opposite effects on the price of oil. Lately, though, traders have been betting prices will continue to go up.

The oil the U.S. buys would go further under new auto efficiency standards Obama is expected to announce on Friday, which would require cars by 2025 to average 54.5 miles per gallon, compared with current requirements of 30.2 mpg.

During the first half of 2011, Detroit’s Big Three automakers—General Motors, Ford and Chrysler—boosted their lobbying to more than $10 million to try and shape the efficiency standards. Now, Platts reported, the major automakers have agreed to the plan.

Renewables Boost in U.K., Germany

The U.K. is dominating the offshore wind market lately, installing, in the first half of 2011, the most offshore turbines of any country—101 around the U.K., compared with seven across the rest of Europe.

But Germany is looking to catch up. Both houses of Parliament have now passed a new energy bill, which has more aggressive targets for expanding renewable energy, and includes higher tariffs for biomass, geothermal energy and offshore wind. But according to an analysis by Rhenish-Westphalian Institute for Economic Research, the transition to renewable energy is likely to be more expensive than the government has said.

A Warm Cloud

Server farms—which store and process huge amounts of data that zing around via the internet—eat up a lot of electricity, but the heat they spit out could be put to use, argued scientists at Microsoft Research and the University of Virginia. They propose putting servers in buildings, where the waste heat could heat the buildings, to save ­on energy—and it could also create faster, more secure networks.

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.

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OPEC Discord May Be “the Beginning of the End” of the Oil Cartel

The Nicholas Institute for Environmental Policy Solutions at Duke University

With oil prices high, the International Energy Agency (IEA) last month made a rare plea for the world to produce more oil. So the latest meeting of the Organization of Petroleum Exporting Countries (OPEC), where they set their production quotas, was closely watched. After a rancorous meeting, most member countries refused to raise quotas.

Before the OPEC meeting, the chief economist of the IEA, Fatih Birol, told the New York Times: “Oil prices are hurting the economy.” He added, “I hope to see more oil in the markets soon.”

Saudi Arabian Oil Minister Ali al-Naimi declared it “one of the worst meetings we ever had,” with opposing views from the “haves” and “have-nots”—in terms of spare production capacity.

Saudi Arabia had been pushing to boost production by more than 1.5 million barrels per day, above current levels. Already OPEC members have gone beyond their quotas, producing an estimated 28.8 million barrels per day, compared to the current overall quota of 24.8 million barrels per day. “Everybody in OPEC is cheating and everyone knows that,” an oil analyst told the New York Times.

The Saudi oil minister suggested his country would decide on its own production levels, telling Platts, “let the buyers come and we will supply them with what they want, whatever they need.” The Wall Street Journal quoted one Gulf-state delegate as saying it’s “the end of the quota system,” and the Guardian reports some analysts say the split could mark the beginning of the end for the cartel.

Some analysts argued OPEC doesn’t matter, and Russia is the big winner, since they have added more to exports in the past few years than Saudi Arabia, and have the ability to boost their production further.

Is Increasing the Gas Tax the Answer?

The head of General Motors’ North American unit predicted gasoline prices will continue to climb in coming years. While, General Motors’ CEO, Dan Akerson, called for higher gas taxes to push people to buy more efficient cars. “We ought to just slap a 50-cent or a dollar tax on a gallon of gas,” Akerson said.

Meanwhile, the Liveable Communities Taskforce in the U.S. House of Representatives issued a report titled “Freedom From Oil.” “Providing a range of transportation choices can help break auto dependence,” the report said, and it encouraged a range of measures from more efficient cars, to better city planning, to “pay-as-you-drive” auto insurance.

Clean Energy Trade Wars

Subsidies for clean energy and emissions trading schemes were also a source of discord, within countries and internationally. China agreed to end subsidies that favored wind power firms using domestic parts, after the U.S. complained it was protectionism that broke World Trade Organization rules.

Starting next year, the European Union plans to include flights in and out of Europe in its greenhouse gas emissions trading system. But China may threaten a trade war over this issue, following on U.S. carriers, who have already started a legal battle to fight European Union levies on flights.

In several countries, feed-in tariffs that subsidize renewable energy are on the chopping block. The United Kingdom is considering slashing its subsidy by 40 to 70 percent for installations producing more than 50 kilowatts, but the solar industry pleaded for a re-think, saying the move would “decapitate” the industry. The chief policy director of the Confederation of British Industry said “business confidence has clearly been bruised by sudden and unexpected policy shifts,” including the reversal of these tariffs.

Climate Talks Stumble, Coal Rises

A few countries are starting to oppose an extension of the Kyoto Protocol. The climate treaty expires in 2012, and countries have been trying to negotiate a successor, but with limited success. At the latest round of talks in Bonn, Germany, one of Canada’s delegates said their country would not take on any emissions targets under an extension of the treaty. Russia and Japan also took a similar stance. The European Union’s lead negotiator said it may take until 2014 or 2015 to create a full successor treaty.

To help cut emissions and cope with a decline of nuclear power, the world could create a “golden age of gas,” according to a new IEA report. However, renewable energy such as wind and solar is often competing with natural gas—so the rise of natural gas could “muscle out” renewables, delaying their deployment.

Only six months ago, the IEA was warning about a gas glut, but that is already beginning to dissipate as gas demand has surged. In part this is due to increased imports by Japan of liquefied natural gas, after shutting another of its nuclear power plants.

The world may be moving increasingly toward coal, according to numbers published in the latest BP Statistical Review. Coal consumption  rose to 29.6 percent of the world’s energy—its highest share of the energy mix since 1970—with China’s use growing 10 percent in 2010, but richer countries also consuming 5 percent more in 2010. To reflect the rise of renewables, BP added them to their report for the first time, reporting that in 2010, solar grew 73 percent and wind close to 25 percent.

A New Kind of Crude

Instead of relying one kind of black goop—crude oil—to power cars, researchers at MIT developed another liquid they call “Cambridge crude.” The conductive liquid can store electrical charge, so that the battery could be slowly charged by plugging it in, or could be quickly “refueled” by draining the liquid and pumping in a new, pre-charged batch—giving electric cars the flexibility of fuel cars.

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.

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After Fukushima, Japan Vows to Boost Renewables

The Nicholas Institute for Environmental Policy Solutions at Duke University

In the wake of the nuclear disaster at Fukushima, Japan’s Prime Minister Naoto Kan pledged to boost renewable energy to at least 20 percent of its consumption in the next decade. This would double the share of renewable electricity in Japan, which gets most of its electricity from nuclear, coal, and oil. Nuclear power had supplied 30 percent of Japan’s electricity, and before the nuclear disaster, the country had planned to build more nuclear plants to boost that share to 50 percent.

“We will do everything we can to make renewable energy our base form of power, overcoming hurdles of technology and cost,” Kan said at a G8 meeting in France. In another speech in France, to the Organisation for Economic Co-operation and Development, Kan also questioned ongoing growth of energy consumption: “we must ask ourselves … whether it is appropriate for society to increase energy consumption without any limits.”

Kan was expected to announce a new “Sunrise Plan” that would make it compulsory by 2030 for all new buildings to include solar panels. Japan’s richest man, telecoms mogul Masayoshi Son, also threw his weight behind renewables, announcing plans to build 10 large solar power plants and a partnership with local officials from around the country to launch a “Natural Energy Council.”

Alternative Federal Fleet

The federal government’s vehicle fleet should be cleaned up, a memorandum from President Obama ordered. The memo directs federal agencies to switch to purchasing only “alternative fueled” passenger cars and light-duty trucks by 2015. The “alternative fuel” category would include electric vehicles and hybrids, as well as those powered by biofuels or compressed natural gas. To kickstart the switch, a pilot project is purchasing more than 100 electric vehicles.

To help consumers understand their cars’ fuel costs and environmental impacts, fuel efficiency labels have gotten an overhaul. The U.S. Environmental Protection Agency (EPA) called the change “the most dramatic overhaul to fuel economy labels since the program began more than 30 years ago.” The new labels are not as simple as those proposed last year by the EPA and the U.S. Department of Transportation, which would have given letter grades to cars.

Meanwhile, richer countries—such as the U.S., Germany and Japan—have reached “peak travel,” according to a new study, with miles traveled per person flattening off in recent years.

China’s Blackouts

In China, now the world’s biggest consumer of electricity, power companies are cutting their production. They are balking at government regulations that are raising the price of coal, while keeping the price of electricity down—policies that the companies say are threatening to push them into bankruptcy. The State Grid, the country’s largest electricity distributor, warned that this summer blackouts could be the worst since the early 1990s.

With power shortages already, Chinese stocks fell on concerns the country would not be able to keep up its high rates of growth. Nonetheless, China widened its lead as the most attractive place to invest in renewable energy, according to consultancy Ernst & Young LLC.

Globally, more money is pouring into renewable energy—but according to a new survey, some investors fear a green bubble may be forming.

Shale Gas Redemption?

A study last month by Cornell University researchers estimated power plants burning natural gas from fracking shale formations cause more global warming than burning coal.  A new assessment from the U.S. Department of Energy’s National Energy Technology Laboratory rebuts the Cornell study, finding that, watt for watt, such “unconventional” natural gas contributes only about half as much to global warming as does coal.

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.