Green Bean Energy

The Tyranny of Private Gains and Public Losses

greenbeanenergy — Thu, 22 Oct 2009 09:25:23 +0000

and this…

http://valuethinking.blogspot.com/2009/10/tyranny-of-private-gains-and-public.html

Lies, Damned Lies and Bonuses….

greenbeanenergy — Thu, 22 Oct 2009 09:21:17 +0000

Everyone should read this

http://valuethinking.blogspot.com/2009/10/lies-damned-lies-and-bonuses.html

A Smarter Way To Kick Start A Clean Energy Industry

greenbeanenergy — Wed, 30 Sep 2009 09:17:19 +0000

With the Copenhagen summit on climate change less than three months away, and governments the world over engaged in intensive discussions and preparations, it feels like we are finally standing at a true crossroads. One direction leads to a vision of a sustainable future, with adequate energy, food, and water for all without compromising the welfare of future generations. The other direction is a continuation of the path we’re currently on, which the vast preponderance of empirical evidence says is not sustainable, but which continues to be vigorously defended by vested interests. Climate change is the headline purpose that brought us to this point, but choosing the sustainable path has far greater implications. As sustainable business proponent and founder of the carpet company Interface, Ray Anderson, put it in the introduction to his new book, Confessions of a Radical Industrialist: By survive, I mean business must be steered through a transition from an old and dangerously dysfunctional model to a far better one that will operate in balance and harmony with nature—thrive in a carbon-constrained world, and put down the threats of global climate disruption, species extinction, resource depletion, and environmental degradation. In a word, develop a business model that is sustainable. The sustainability cause is championed by an unlikely alliance of climate scientists, government agencies, military analysts, environmentalists, and forward-thinking business leaders like Anderson — the Greens — all of whom realize that we are heading for Big Trouble if we keep on going the way we have been. On the other end of the struggle are the Browns: businesses who would rather fight than switch. The oil and gas industry dominates this faction, but they are by no means alone. All those whose livelihoods depend on our continued use of fossil fuels have found common cause in opposing efforts to curb climate change. In the past several weeks, two utility companies — Duke Energy, which provides power to five states; and Alstom, a French manufacturer of power plant components —and aluminum giant Alcoa resigned their memberships in the American Coalition for Clean Coal Energy after revelations surfaced of forgeries the group perpetrated as part of its lobbying against climate change legislation. This week, California utility PG&E made a similar move by leaving the U.S. Chamber of Commerce over the organization’s extreme stance on climate change. Three weeks ago, the Chamber called for a “Scopes monkey trial of the 21st century” to put climate change science on trial — a silly idea, since science is intrinsically a process of examination and proof; and strange choice of metaphors, considering that science won the Scopes argument. Then again, it’s not called the U.S. Chamber of Sustainability. Would that we had one! A House Divided While those who stand to lose something waste their energy impeding our progress on the march to sustainability, those who stand to gain from it are going gangbusters. As I discussed two weeks ago (”Why We Need the Red Dragon“), China has made aggressive and well-timed moves in the solar race. In only five years it has gone from being a negligible player to the world’s top producer of solar PV cells, according to a new report from the European Commission Joint Research Centre Institute for Energy. Worldwide solar module production increased by 80% in 2008 alone, with Asia and Europe taking the largest share while the U.S. share barely budged. Source: JRC PV Status Report 2009. “In 2008, China became the global leading producer of solar cells with an annual production of about 2.4 GW, followed by Europe with 1.9 GW, Japan with 1.2 GW and Taiwan with 0.8 GW. It this trend continues, China might have about 32% of the world-wide production capacity by 2012.” It must greatly amuse the Chinese to watch the Greens and Browns in the U.S. waste their energy squabbling over who’s going to pay for the transition to a sustainable climate, starving the country of investment in the clean energy solutions of the future while China is busy taking over the global PV market and implementing policies that will soon take it far beyond the U.S. in meeting climate change and renewable energy goals. Indeed, the U.S. is fighting itself at every turn, offering more incentives that will increase CO2 output than those that would curb it. Last week, just days before President Obama would warn at the United Nations that the “irreversible catastrophe” of climate change must be avoided, the Environmental Law Institute issued a new report finding that U.S. subsidies to fossil fuels ($72 billion) were over two-and-a-half times as great as those it invests in renewables ($29 billion). Of the latter portion, traditional renewables received only $12 billion, while corn ethanol—a net energy loser—got $17 billion. The OECD also issued a report last week estimating that eliminating fossil fuel subsidies alone would cut emissions by more than 10% by 2050. I suspect the two reports had something to do with Obama’s call on Wednesday of this week to “work with my colleagues at the G-20 to phase out fossil fuel subsidies.” As of this time, however, the madness continues. Pending House legislation sports tens of billions of dollars of incentives for so-called “clean coal” technology, which does not exist commercially, but has no hint of a feed-in tariff (FiT), the primary impetus behind Europe’s stunning renewable energy growth. As I have written previously, FiTs have been responsible for an explosion of renewable energy in over 37 countries and put them on track to meet their carbon emission reduction goals. But instead of following those examples, the U.S. is fixated on a backward approach to the climate problem: a highly corruptible and ineffectual cap-and-trade mechanism that puts the focus on what comes out of the tailpipe instead of what goes into the engine. (Notable exceptions to this are Gainesville, which has adopted a FiT, and San Antonio, Los Angeles, and Sacramento, which are considering one.) A new research note from Deutsche Bank points out that under Germany’s FiT the share of electricity supplied from renewables grew from 6.3% to 14% and created 300,000 new jobs, but the program’s cost only contributed between 3% and 4% to the increase in electricity prices from 2004 to 2006. Over the same time period, the fraction of renewable energy in the U.S. actually fell from 10.1% to 9.4% while the Browns fought it tooth and nail. Job creation was anemic, electricity prices still rose, and oil imports continued to increase. A Case Study in Failure: California As usual, California offers a useful example of how backward the U.S. approach is to formulating energy policy. A recent showdown occurred over a bill that would raise California’s renewable portfolio standard (RPS) from 20% by 2010 to 33% by 2020. Governor Schwarzenegger threatened to veto the bill because of a provision that would require the power to be generated by plants connected to the California grid — an attempt to keep the projects in-state and limit imports — calling it “protectionist.” Then he proceeded to issue an executive order to the California Air Resources Board establishing the new 33% RPS by mandate. The RPS approach, which favors utility-scale projects, has already failed to yield the desired results. California’s three big utilities will almost certainly fall short of meeting the existing 2010 goal, with laggard San Diego Gas and Electric currently getting only 10% of its electricity from renewables. (I can also tell you firsthand that the one residential solar project I did in SDG&E territory was a slow-moving absolute nightmare of confusion and paperwork compared to the projects I did in PG&E territory.) At the same time, an approach that actually works continues to meet resistance. California’s net metering law, which requires utilities to give credits to customers who feed renewable power back to the grid, is currently capped at 2.5% of the total load. A new bill would have raised the cap to 5%, but was stalled when the International Brotherhood of Electrical Workers (IEBW) successfully inserted an amendment that would have permitted only contractors with a general C-10 electrician license to install projects larger than 250 kilowatts, excluding numerous non-union contractors with the solar-specific C-46 license. (The IEBW has attempted the same strategy several times in recent years, impeding the progress of pro-solar policy while gaining nothing for itself.) If the net metering cap is not raised, there is a distinct possibility that PG&E will hit the existing cap and trigger another slump in the long boom-and-bust history of solar. Time to Choose If the U.S. were serious about making progress on climate change and renewable energy, it would put aside the jockeying of narrow-minded interest groups and implement long-term policies with proven records of success. As I see it, the effective policy approaches are stable, transparent, long-term, and simple: Forget about cap-and-trade and RPS, and incentivize clean energy with a generous and long-lived national FiT modeled on successful programs elsewhere. Shift all subsidies for brown fuels to green fuels, with priority given to those with the highest net energy (geothermal, solar, and wind), instead of those with the best lobbies (corn ethanol). Level the playing field between rooftop and utility scale solar by removing net metering caps, allowing utility customers to put as much excess renewable energy onto the grid as they can generate. Tear down the barriers between states and utilities, and create a national market for renewable energy. Above all, we should stop framing our decision-making around short-term cost arguments, and accept the fact that all of the energy solutions of the future will cost more than those of the past. The cost of fossil fuels will continue to rise because the best resources have already gone up in smoke, and what remains is progressively more expensive to produce. The cost of renewables will cost more in the short term, but fall as the technologies mature. Besides, ample research has shown that in the long run—once the true costs of all fuels are recognized, with nothing externalized, and cost-benefit analyses are extended into multi-decade time frames—renewable energy wins hands-down over fossil fuels. With which would you rather align yourself: a dirty, mature industry going into decline that still claims to need billions in public support; or a clean, new industry that’s growing at 40% per year, with no limit in sight, and a reasonable expectation of being able to get along without subsidies in 20 years or so? Beyond renewable energy’s long-term benefits—a more resilient economy, jobs created indirectly, better public health, a reduced burden on the national coffers for imported oil (on the order of $400 billion for this year in the U.S.), and other indirect and intangible benefits—there is the straightforward imperative that we begin the urgent transformation toward true sustainability. The short-term cost argument is tired, and we have already delayed too long. It is time we evaluated our choices in terms of the wealth and welfare of future generations, not just the personal net worth and power of today’s kings of industry. At this crossroads in history, the United States can either seize the opportunity to reinvent itself and secure a prosperous future, or allow an unproductive process of selfish bickering to lead us further down a dead-end street. We can apply our vaunted ingenuity and innovation to the renewable energy challenge, or watch our fortunes continue to slide while the rest of the world kicks our butts. We do have a choice. (Source: TBI Chris Nelder|Sep. 28, 2009)

Clean tech investments soar worldwide in Q3-Reuters

greenbeanenergy — Wed, 30 Sep 2009 08:47:27 +0000

Global investment in clean technology roared back in the third quarter, driven by solar power and a public offering that underscores growing enthusiasm for the sector, Greentech Media reported on Monday. Clean tech investments — which include solar power, an electric grid controlled by computers for efficiency, electric cars, biofuels and green building materials — rose to $1.9 billion in 112 deals, Greentech said. That represents another big jump, after clean tech went from $836 million in the first quarter to $1.2 billion of second quarter. “There is a lot of momentum and there are a lot of deals in the pipeline,” said Eric Westoff, who wrote the report. “People are energized by the A123 Systems Inc IPO. I’d say it’s reasonable to look for moderate growth in the fourth quarter.” Shares of battery maker A123 soared more than 50 percent on Thursday, marking it as the most attractive of last week’s public offerings. Westoff said venture capitalists will take note of that, but that their pockets are not deep enough to support continued growth at the rate of the past two quarters. More than half the clean tech investment in the third quarter went into two areas — solar and a combined category of biofuels, gasification and cleaner coal. Solar accounted for $575 million in 29 deals, and biofuels, gasification and coal for $513 million in 17 deals. One company alone, high-efficiency solar electric panel maker Solyndra, accounted for a $198 million, in a round led by Argonaut Private Equity. Exxon Mobile Corp made a multi-year commitment to invest $300 million in Synthetic Genomics for the development of algae-based fuels. Smart grid and associated technologies accounted for $160 million in 14 deals, and auto and transport in five deals for $158 million. Green buildings at $105 million and green materials at $100 million were the other two major areas. Still the deals failed to hit the record highs of 2008, when the third quarter saw $2.9 billion and the entire year $7.6 billion. Westoff said the year — and the quarter — were driven by unusual capital investment to build out solar manufacturing plants.

UK launches new £20m fund for clean energy technologies

greenbeanenergy — Wed, 30 Sep 2009 08:43:45 +0000

The UK Government has launched a new £20m government-backed venture capital support fund for clean energy technologies. Energy and Climate Change Secretary Ed Miliband said, ‘It is essential we meet our long term climate change goals. That’s why we’re intervening with support for tomorrow’s green energy technologies.’ He added, ‘Where market capital isn’t coming forward, we’re stepping in to plug the gap as speedily as possible.’ Until now, advancements in wave, tidal, fuel cell, solar and energy efficiency technologies have relied on R&D grant support and venture capital, which has waned since the economic downturn in 2008. The latest instalment is part of the £405m budget available for low carbon projects. Chief executive of the British Venture Capital Association Simon Walker said, ‘Low carbon energy technologies backed by venture capitalists will play an important role in creating a sustainable energy future for the UK. In 2009 we have seen a dramatic fall in the amount invested into clean energy companies in the UK. We welcome any initiative which boosts the supply of capital into this crucial sector.’ Chief executive of UK Sustainable Investment and Finance, Penny Shepherd, added, ‘Government support now is vital to develop the UK low carbon technology businesses that we need for lasting prosperity. This commitment shows that the Government is serious about promoting a low carbon economy and sustainable investment in the UK.’ Source: Newnet

Clean technology venture capital spikes in Q2

greenbeanenergy — Tue, 29 Sep 2009 20:05:33 +0000

Larger transactions and increased investor confidence pushed clean technology (“cleantech”) venture capital investments higher in the second quarter of 2009. Investments in companies dealing with energy efficiency and solar power led the overall market, which surged 73 percent quarter-over-quarter. A study by Ernst & Young, with data from Dow Jones VentureSource, suggests a sharp up-tick in cleantech venture capital. Venture capital investment in cleantech companies hit $572 million last quarter. Forty-eight financing rounds were completed, representing a 100 percent increase in quarter-over-quarter transaction count. Compared to the second quarter of 2008, which was the second best cleantech quarter for venture capital investment, capital put to work fell 59 percent, with the number of transactions down 16 percent. “The quarterly up-tick reflects investor confidence in the ability of cleantech companies to capitalize on market opportunities,” says Joseph A. Muscat, Ernst & Young LLP, Americas Director of Cleantech. The Energy/Electricity Generation category accounted for 27 percent of cleantech venture capital investment last quarter, with $157 million. This is up 181 percent quarter-over-quarter. Solar energy-related transactions accounted for most of this, with these companies receiving $148 million in venture investments — more than three times greater than the first quarter of 2009. The Energy Efficiency category followed, raising $152 million and posting 168 percent quarter-over-quarter growth. The Alternative Fuels category, at $53 million, consisted mostly of a $40 million round in biofuels company Gevo. The Transportation sector picked up $65 million, most of it from Daimler AG’s $50 million in Tesla Motors. Companies in later stages — specifically those shipping product — accounted for 65 percent of the financing rounds, up from 54 percent the previous quarter. Those in product development stages picked up 27 percent of the transactions, down from 46 percent in the first quarter, 8 percent went to companies in the start-up stage (from none in the first quarter of 2009). The government continued to play a substantial role in the cleantech venture capital market. The U.S. Department of Energy put more than $47 million into this market to speed up the implementation of eight smart grid demonstration projects in seven states. This comes in addition to $74 million in tax incentives extended to General Electric by the State of Michigan, and a U.S. Department of Treasury plan to issue grants rather than investment tax credits. “While enacted and anticipated government actions have helped bolster confidence and catalyze new capital,” Muscat says, “we believe that leading cleantech companies will be defined by their ability to execute on business plans and advance their technologies through commercialization and distribution despite the challenging economy.” The sharp growth from the first quarter of 2009 to the second might suggest a quiet first quarter for the cleantech venture capital sector. While this is true, it nonetheless reinforces the perception of cleantech as a growing and resilient category in an extremely difficult alternative investment environment. The rapid growth from 2003 may have slowed with the financial crisis, but the strength demonstrated last quarter — in addition to year-over-year cleantech private equity stability — indicates the resilience of the sector and its potential for continued growth. Tom Johansmeyer

Reason for Hope!

greenbeanenergy — Wed, 16 Sep 2009 18:32:11 +0000

This is where I want to come to think about where we have come from, where we are and where we might go….