Green Topics Summer 2007
From the Manager
Why Sun Reigns on Spain’s Plains
The Answer is “Negawatts”
Air Force embraces solar power
Tilting at Windmills
From the Manager
Welcome to summer in the northern hemisphere. Keep us in mind for all your outdoor maintenance and gardening needs.
We offer all-natural organic fertilizers of fish remains. Mulch mat materials for your trees allow pass through of water and nutrients but prevent grass and weed growth. We offer devices to reduce the water use in your garden. Our long life exterior flood bulbs will let you work outside until late in the evening. For your yard beautification consider step stones of recycled rubber and solar path lighting of stainless steel. You can perform all your work in one of our offering of hemp T-shirts for men and women.
Being outside in the summer allows you to be one with the Earth. We Can Help!!!
The theme for this edition of Green Topics is the arrival of solar electric as a viable addition to the offering of power producing options. It is by no means THE answer but it is an answer whose use continues to gain traction in the fabric of power production.
We will say that we may or may not agree with all the views and expressions of the writers of these articles but we find the discussion useful.
Thanks for reading,
Porter
Why Sun Reigns on Spain’s Plains
Thu April 19, 2007
Wall Street Journal
By Leila Abboud
In the Arid Plains outside Seville, Spain, stand a 380-foot concrete tower surrounded by 600 huge mirrors. Together, they form a new generation of solar-power plant that will be able to deliver enough electricity to supply a town of 6,000 people. The plan employs a technology called concentrating solar power, or CSP, which represents a sort of holy grail for the energy industry: an attempt to produce commercially viable solar power on a grand scale. Despite the fact solar-generated electricity is more expensive to produce than power from traditional sources such as coal or natural gas and other renewables, European companies and governments are pushing its adoption as part of their search for cleaner energy sources that don’t exacerbate global warming.
A host of CSP projects are under way around Europe, especially in Spain, where government set up incentives. Governments elsewhere on the Continent also are using subsidies to bolster alternative energy. The European Union, as part of its fight against global warming under the Kyoto treaty, set a goal for member countries to double the amount of power generated by renewable sources to 12% by 2010. The German government set up subsidies to encourage the installation of photovoltaic solar panels on buildings and homes, while Denmark has had success by subsidizing wind power over the past decade. CSP technology was pioneered by the U.S. Energy Department in the late 1980s, and nine plants were built in the California desert before 1990. But it is only recently that CSP has attracted attention from industry, as high energy prices and concerns about global warming have increased internet in renewable energy.
“After wind power, solar thermal is the next renewable energy that can be used on a wide scale,” said Todd Allmendinger of Emerging Energy Research in Barcelona. Though CSP technology is still in its early stages, power companies and specialized engineering firms recently have begun to pour investments into it. More than 45 CSP projects are in the planning stages world-wide, and four projects are expected to begin commercial operations in the next 18 months in the U.S. and Spain, according to consultancy Emerging Energy Research. The plans are much more powerful than the classic and more familiar photovoltaic panels, which use semiconductor chips to convert sunlight into electricity. A typical installation of solar panels on a roof, for example, can generate about 400 kilowatts of electricity, enough to feed a medium-size office building. A CSP plant like the one being built out-side Seville by Spanish engineering and construction company Abengoa SA can generate as much as 11 megawatts, enough to power a small town.
CSP technology uses a huge array of mirrors to track the sun and collection its heat in different ways. In the plant near Seville, the mirrors focus the sun’s rays on a single point – in much the same way a child might use a magnifying class to burn an ant. The heat from the concentrated sunlight creates steam, which powers a turbine. Some of the heat is also stored in oil or molten salt so it can keep the turbine running after sunset or when clouds pass overhead. There have been previous investment boom and busts in solar power. And the technology has yet to deliver a sizable contribution to the world’s energy needs. Only about 2% of the world’s electricity came from renewable energies like wind and solar in 2004, according to the International Energy Agency. But some observers believe this time could be different, unlike solar panels, CSP produces energy on a much larger scale, akin to that of a small or midsize power plant. However, skeptics note it still depends on subsidies to make it commercially viable.
Because CSP products zero emissions and can be rolled out anyplace the sun shines intensely, it has also found adherents among environmentalists and policy makers. But generating electricity with solar-thermal technologies remains expensive. Though the technology is advancing and becoming more cost-effective, it still costs 12 to 15 cents to generate one kilowatt hour of electricity with CSP, compared with four cents when generated by a coal-fired plant. The higher costs stalled investment in CSP for years, says Tom Mancini, CSP program manager at the Energy Department’s Sandia National Laboratories, creating a sort of Catch-22. With few large-scale CSP plants up and running, engineers had trouble fine-tuning the generating process to make it more efficient. And the price of the specialized equipment, such as the large mirrors, also remained high.
“In technology development, we call it the valley of death,” says Mr. Mancini. But he believes that with so many new plants coming online soon, CSP is on the cusp of commercial viability. Spain, where electricity demand is increasing 4% to 6% a year and the sunny, dry climate is ideal for solar power, has been the world’s most aggressive in pushing CSP. Madrid set a goal of building 500 megawatts of solar-thermal generation capacity by 2010. To get there, it set up a system of “feed-in” tariffs for CSP plants that required utility companies to buy electricity generated by the plants at a premium rate to foster solar technology. The incentives set off a race to build CSP projects that now stand to generate more power than the government’s target. Iberdrola SA, the country’s second-largest utility by revenue and generating capacity, plans to build 550 megawatts of CSP capacity, German firm Solar Millennium AG plans to build 400 megawatts of CSP plants in Spain.
Abengoa, which built the solar tower near Seville, plans seven more plants in the area, capable of supplying 180,000 homes – the equivalent of the city of Seville. Construction of a new plant costs between $250 million and $500 million, depending on the type of CSP technology used. Companies around Europe are experimenting with different ways of bringing down the cost of CSP power. Enel SpA of Italy has grafted a CSP plant onto an existing coal-fired power plant in Sicily. The CSP plant creates additional steam for the coal-fired plant’s turbine, generating about 10% more power. By using the same turbine, it also cut down on the CSP plant’s construction cost. In the U.S., the first CSP plant to be built in more than a decade is going up in the Nevada desert, slated to start generating 64 megawatts of power next year. It is being built by SolarGenix, which was recently acquired by Spanish engineering conglomerate Acciona SA. The project is likely to benefit from a federal tax credit that covers 30% of the capital investment in renewable-energy plants. With their acres of bright mirrors, the plans are stunning to behold. They are also eerily silent compared with a conventional power plant. There has been little public resistance to their construction, mostly because they lie in remote areas. But that could change as the prime sites are used up.
“If people complain about wind turbines, what are they going to think when they see a few hundred acres of mirrors being built in their backyards?” said Emerging Energy’s Mr. Allmendinger.
The Answer is “Negawatts”
Fri April 20, 2007
Solar Today
By Martin Ogle
As the threats of global warming become better known, experts like NASA scientists James Hensen, PH.D, urge adoption of the many energy-efficiency and renewable energy technologies available for reducing fossil fuel use and carbon emissions.
Others propose expanding integrated power systems with technology such as plug-in hybrid vehicles. But I question the assumptions that new technologies and greater efficiency alone will enable a smooth transition in a world that consumes massive and growing amounts of energy. James Lovelock, former NASA scientist, described the larger perspective in his book, The Revenge of Gaia: “[Renewable energy] has a future, but we have no time now to experiment with visionary energy sources: Civilization is in imminent danger and has to use nuclear energy now or suffer the pain soon to be inflicted by our outraged planet. We must follow the good green advice to save energy, and we must all do this whenever we can, but I suspect that, like losing weight, it is easier said than done.”
Although I disagree with Lovelock’s notion that nuclear energy is our only option, I understand his reasoning. He does not think that society is up to the social challenge of large-scale energy conservation. But Lovelock creates a self-fulfilling prophecy by not advocating conservation (even if in conjunction with nuclear energy). Conservation must become the cornerstone of our short- and long-term energy policies. If not, the only viable short-term option for maintaining our voracious energy appetites will be to increase our reliance on nuclear energy and “clean fossil fuel” options. And if these proceed without a massive conservation ethics, other problems will soon surpass even global warming as critical threats
Filling the gap with Negawatts
I find the perspectives offered by U.S. Rep. Roscoe Bartlett (R-Md.) among the most compelling, Bartlett argues that trying to “fill the gap” between projected energy demand and the projected shortfall of fossil fuels (or required reductions to reduce carbon emissions) is impossible in the long run and in the short run will maintain current levels of fossil fuel consumption. That will make the inevitable transition even more painful. Instead, Bartlett says that we need to develop a new economy that requires vastly less energy than can be supplied by renewable sources. Bartlett sees renewable energy as a necessary part of this “new energy paradigm” but he views energy conservation as even more important. We need to “fill the gap” by not using the energy in the first place.
Unfortunately, some are entirely dismissive of conservation, warning that people will not listen to a message that would limit our desires. Others insist that we can develop ways to do the things we do now, only with renewable energy. I strongly disagree with these assessments and believe that if we continue to disregard conservation, the painful crash that Bartlett speaks of will become a self-fulfilling prophecy. We must view conservation as our primary and most promising solution to energy problems. Certainly conservation must include the elimination of waste as well as “doing more with less,” but what about simply doing less and enjoying it? Bartlett had some thoughts on this subject during a Sept. 26, 2005, conference he sponsored: “The simple fact of the matter is you go to Europe, you spend time there for a couple weeks, and you come back raving about how great it is. You can walk to everywhere, perform all the daily functions you need to perform just by walking around.”
Recognizing That Less is More
A big impediment to a serious conservation strategy is an entrenched cultural sentiment that implies that Americans are entitled to waste and unlimited energy use. When commentator Ann Coulter wrote the following words in 2000, she, in effected, dared people who might value conservation to speak up or shut up. “We will not live like Swedes. We want 18-ton Ford Explorer-cruisers, cell phones, CDs, hot showers, blow dryers, DVD players and jet skis. Fuel is the metric of prosperity, and conservationism is an acknowledgement that we are in the decline of prosperity – that this is the beginning of the long bleak twilight of civilization.”
Few have called her bluff. Yet the conservative Congressman Bartlett will not dismiss conservation. In response to the Bush administration’s promotion of energy initiatives in February 2006, Bartlett extolled the importance of conservation in his Feb. 27, 2006, essay, “The Next Conservative Energy Policy”: “Delayed gratification and self-sufficiency are traditional conservative values. That is why the next conservatism should champion policy changes to use less, not more oil, through conservation and energy efficiency.”
We need to be driven by the needing less, not by constantly working to produce more and more. And unlike many of the high-tech solutions to our energy predicament, using less is something everyone can do. We can replace energy-intensive activities with ones that require little or no energy, and be happy, challenged and fulfilled. What we need is leadership and a compelling vision of life in a less consumptive world. It is time to place conservation at the top of our list of energy solutions.
Air Force embraces solar power
Thu April 24, 2007
USA Today
By William M. Welch
The largest solar power plant in North America will soon be providing electricity to an Air Force base in the Nevada desert. The military says the plant scheduled to power up at Nellis Air Force Base by the end of the year, shows that solar energy can effectively meet part of the country’s energy needs. “It allows the Air Force to show its leadership in applying renewable energy and new technology to reduce our needs to use traditional forms of electric power, “says Maj. Don Ohlemacher, operations flight chief and acting commander of the 99th Civil Engineer Squadron at the base.
But the project also demonstrates something else: the considerable constraints that continue to limit the viability and growth of solar electric power in the USA. Despite three decades of development of the technology, solar energy is expensive, requires large amounts of space and taxpayer subsidies, and doesn't’t work at night or on overcast days. “The industry has some problems to solve,” says Paula Mints, associate director and photovoltaic specialist with Navigant Consulting of Palo Alto, Calif. “Solar energy has been around 30 years and is still a startup industry.”
Savings: $1 million a year
Nellis, which is outside Las Vegas, is devoting 140 acres to a massive photovoltaic array with panels of silicon wafers that will rotate to follow the sun across the sky and generate electricity. The plant will be capable of producing 15 megawatts of power, enough to provide 30% of the electric needs on the base, where 12,000 people work and 7,215 people live, Nellis officials say. The Air Force expects to save $1 million a year in lower electric bills and to use the plant to demonstrate it is boldly advancing the use of renewable energy technology, a commitment of the Bush administration, Ohlemacher says. But lowering the price of solar-produced electricity remains an obstacle even in a place like the Mojave Desert of Nevada, where clear, expansive skies provide an optimal setting for harnessing the sun’s abundant rays.
Only by taking advantage of multimillion-dollar financial subsidies and incentives-federal and state- is it possible for the Air Force and its energy partners to build the plant, recover investment costs and produce electricity at a savings, “That is possible because of state and federal incentives. Without those, prices wouldn’t be competitive,” Daniel Tomlinson, editor of a solar newsletter for Navigant Consulting, says of the project. “The price of solar is coming down, but today those subsidies are important,” says David Edwards, a market analyst of green power with ThinkEquity Partners of San Francisco.
The project is being built in a complex arrangement between the Air Force and three financial partners: SunPower Corp. and its Sunlight subsidiary, California-based solar specialists that will construct the plant. MMA Renewable Ventures, a San Francisco company that will attract institutional investors to finance the project and own and operate the plant on land leased by the Air Force. Nevada Power, the local power provider, which will indirectly subsidize the Air Force’s lower rates through payments to MMA Renewable Ventures.
MMA Renewable Ventures and its investors will take advantage of a 30% federal tax credit that Congress passed in 2005 and expires at the end of this year. Solar advocates are asking Congress for a 10-year extension as a way to keep solar electric economically viable. Investors also can take advantage of accelerated depreciation schedules for solar, an additional tax break, Tomlinson notes. MMA and its investors will sell solar energy credits generated by the project to Nevada Power. The Utility plans to use those credits towards meeting Nevada requirements that is obtain 20% of its power from renewable energy sources by 2015, says Tom Fair, Nevada Power executive for renewable energy. “Our goal is to bring more renewables into the system,” Fair says.
States may be key players
Matt Cheney, chief executive officer of MMA, said financing details were still being worked out but his company is investing more than $100 million in the Nellis plant. “It’s a big one,” he said of the project. “It will be the biggest system in North American probably for the foreseeable future, using this particular technology.” Photovoltaic arrays have been used in the USA mainly on a small scale – roof to panels to provide power for homes or commercial buildings, or to light roadside signs. Several European countries, particularly Germany, have built large-scale photovoltaic arrays that, provide utility-scale power, and have provided aggressive subsidies to make them economically viable, Mints says. She says even bigger U.S. projects are likely to follow the Nellis plan, particularly if tax subsidies are extended and more states require power companies to include some renewable sources in their energy production.
The Nellis plant will produce electricity in the daytime but will cease when the sun goes down. It will not have battery storage capacity and this will be useful as a power supplement but not as a primary generating source. “A lot of people are focusing on these large fields as a way to bring down the price of solar,” Mints says. “They certainly have their place in the energy portfolio, but there are a lot of other technologies out there,”
Tilting at Windmills
November, 18th 2006
The Economist
Until recently, recalls Charlie Gay, a 30-year veteran of the solar-power business, venture capitalists were far too busy catering to captains of the information-technology industry to waste time on “hippy-dippy tree huggers” like himself. But now the tree-huggers are in the ascendant and the IT barons are busy investing in clean-energy technology.
Among them is Vinod Khosla, a celebrated Silicon Valley financier. He is touting ethanol as the next big thing. Applied Materials, where Mr. Gay works, has branched out from flat screens and computer chips into solar cells. Sun Power, the solar subsidiary of Cypress Semiconductor, is now worth almost as much as its hip making parent company. Investors are falling over themselves to finance start-ups in clean technology especially in energy. Venture Business Research reckons that investment in the field by venture capitalists and private-equity firms has quadrupled in the past two years, from some $500M in 2004 to almost 2 billion so far this year. The share of venture capital going into clean energy is rising rapidly. New Energy Finance, another research firm, reckons that investment of all sorts in the business will reach $63 billion this year, compared with just $30 billion in 2004. The lure of big money is leading investment banks to ramp up their analysis of the latest boom industry.
Clean-energy fever is being fuelled by three things: high oil prices, fears over energy security and a growing concern about global warming. The provision of energy, the industry’s cheerleaders say, will change radically over the coming decades. Polluting coal- and gas-fired power stations will give way to cleaner alternatives such as solar and wind; fuels derived from plants and waste will supplant petrol and diesel; and small, local forms of electricity generation will replace mammoth power stations feeding far-flung grids. Eventually, it is hoped, fuel cells running on hydrogen will take the place of the ubiquitous internal combustion engine. It is a bold vision, but if it happens very slowly, or only to a limited extent, boosters argue that it will still prompt stupendous growth for firms in the business. Analysts confidently predict the clean energy business will grow by 20-30% a year for a decade. Jefferies, an investment bank that organized a recent conference on the industry in London, asked participants how soon solar power would become competitive with old-fashioned generation technologies: in 2010, 2015 or 2020. More distant dates – let alone never – were not even discussed. About three-quarters of those present, one visitor gleefully observed, were “cheque-writers”. This “megatrend”, the keynote speaker gushed, “may be the biggest job- and wealth-creation opportunity of the 21st century”
At a similar event devoted to solar power at San Jose, in the heart of Silicon Valley, registrations almost quintupled this year, to over 6,500 attendees. Arnold Schwarzenegger, California’s green-minded governor, made a cameo appearance in the midst of his re-election campaign. “I feel the energy”, he bellowed to an elated audience, “I feel the electricity. Clean energy is the future.” Such hyperbole might seem reminiscent of the dotcom bubble. But clean-energy advocates insist growth is sustainable because of the likes of Mr. Schwarzenegger. The Governator is a hero in green circles because of his enthusiasm for environmental regulation. He easily won re-election partly because he seized on global warming as a concern and signed into law America’s first wide-ranging scheme to cap greenhouse-gas emissions. California also boats America’s most ambitious initiative to promote solar power, dubbed “One Million Solar Roofs”. The state will pay $2.9 billion in rebates over ten years to households and businesses that install solar panels. The federal government also chips in with a tax credit of 30% of the cost of installation. All manner of businesses in the state, from FedEx to wineries in Napa Valley, are rushing to install subsidized solar panels.
Renewable States
By 2010, California aims to generate 20% of its power from the renewable sources. No fewer than 21 of America’s 50 states have such “renewable portfolio standards”, which local utilities are obliged to meet within a set period. Voters in Washington approved one in the recent elections. Maine has the highest standard, of 30% although its utilities already meet in thanks to the state’s many hydroelectric dams. Among the most ambitious is New Jersey’s, which will require 22.5 of energy to come from renewables by 2021. It has already become the second-biggest solar market in America, after California.
Other government policies ensure that making ethanol from corn is a lucrative business, despite lingering concerns that the manufacturing process consumes almost as much energy as the resulting fuel provides, so that the effort does no good for the environment or the cause of energy independence. Farmers receive subsidies for growing corn, refineries for mixing it into fuels, service stations for installing pumps to sell it and consumers for buying it. Moreover, several states have laws requiring that a certain amount of ethanol be mixed into petrol, helping to bolster demand. A recent study by the Global Subsidies Initiative, a pressure group, estimated that all this would cost American taxpayers at least $5 billion this year.
America’s incentives for clean energy, however, are relatively modest compared with Europe’s. The European Union, for example, wants 5.75% of all transport fuel to come from non-fossil sources by 2010. Big refiners say the measure guarantees them a market for as much bio-diesel as they can produce. The EU also has a target for power from renewable sources of 18% by 2010. Analysts at Goldman Sachs, an investment bank, calculate that solar output would have to grow by over 30% a year to meet it. By their count, 49 counties have policies on renewable in place that will foster rapid growth at clean-energy firms, including big emerging markets such as Brazil, China and India. Germany is perhaps the most generous. It has fixed the price of renewable power for the next 20 years on a sliding scale that will decline over time. Certain solar projects will receive as much as 73 cents for each kilowatt-hour of electricity generated, compared with the going rate for dirtier power of around 16 cents. In normal circumstances, Germany would be a terrible place to install solar panels: it is not very sunny and has a good distribution grid, which solar does not require. But thanks to its “feed-in tariff”. it is the biggest solar market in the world.
Around the world governments like Germany’s have pledged billions, or in some case unlimited sums, to advance the clean-energy cause. In the process, enthusiasts claim, they have “pre-booked” growth. Supporters argue that these subsidies are reasonable, since they encourage a worthwhile cause-the fight against global warming-that markets do not seem to prize highly enough. What is more, the subsidies are not supposed to be permanent. Applied Materials’ Mr. Gay points out the cost of generating solar power falls steadily over time. The first cells, in satellites, cost about $200 per watt of generating power. By last year the price had fallen to about $2.70 per watt. That equates to a price decrease of about 18% every time production doubles, he calculates. Price decreases come inexorably with volume, he argues, so subsidies imply help to speed the process up by stimulating extra sales.
When subsidies go
Eventually, the proponents of clean technology maintain, renewable energy will become competitive with fossil fuels, allowing governments to end subsidies. Mr. Gay thinks solar power will be as cheap as that from big coal-fired power stations within a decade. Something of the sort has already taken place in Japan, where last year subsidies for solar were phased out. When these were introduced in 1994, says Chris O’Brien of Sharp, the world’s biggest maker of solar cells, a system typically cost some $16,000 per kilowatt, of which government paid half. About 500 systems were installed in the first year. A decade later, the cost had dropped to $6,000 per kilowatt and 60,000 systems were fitted. Nowadays, he says, Japan is the first market “where customers have continued to buy solar systems without subsidy”.
However, all this is somewhat misleading. Retail electricity prices in Japan are among the highest in the world, making it much easier for solar to compete. In most places, concedes Michael Liebreich, of New Energy Finance, renewable power and fuels will be more expensive than the dirtier sort for the “foreseeable future”. That leaves the clean-energy business largely dependent on government handouts. Shares in the sector rose after George Bush’s state-of-the-union address in January, when he swore to wean America off dependence on foreign oil. But what one politician can mandate, another can terminate- and therein lies one of the biggest risks for clean energy. American politicians have periodically allowed a tax break for wind generation to expire, for example. This caused the industry to falter several times, before the credit was renewed again (see chart 2). It is due to expire once more next year. In similar fashion, the shares of European clean-energy firms fell this summer, along with the price of permits to emit carbon dioxide within the EU. The price of permits had fallen because European governments had handed out too many of them to polluters, thus flooding the market.
Voters, too, sometimes lose heart. In the recent elections, Californians, normally a reliably green lot, voted against a proposal to tax oil production to fund research into renewables. Yet clean-energy investors are gambling, essentially, that governments and that taxpayers who fund them will continue to spend lavishly on the industry. A dramatic fall in the oil price will almost certainly prompt governments to tighten purse-strings, since subsidies become relatively more expensive. Developing new, carbon-free technologies will seem less urgent if there is plenty of cheap oil about. When oil prices fell in the 1980s, governments quietly dropped many of the grand plans for energy independence developed during the oil shocks of the 1970s. In Mr. Liebreich’s view, oil-prices below $50 a barrel would undermine the momentum of clean energy. Mr. Khosla, the venture capitalist, warned delegates at the conference in San Jose that they needed technologies that are “unconditionally cheaper” than fossil fuels: “If it ain’t cheaper, it doesn’t scale”
For the time being, however, keeping pace with demand is more of a worry. Most manufacturers of wind turbines have full order books for the next few years. Executives at Neste, a big Finnish refiner, doubt Europe’s output of bio-fuels can expand fast enough to meet the EU’s target. The EU has also had toe reduce its target for renewable power, since the industry could not grow fast enough to meet it. The growth of solar firms has outspaced the supply of high-grade silicon needed to make their panels. Investors are now rushing to finance factories to produce the necessary silicon. Goldman Sachs expects output to double by 2010-raising fears of an eventual crash in prices. In the meantime, solar firms seeking financing are trying to distinguish themselves, either through contracts that assure their future supplies of silicon or through technology that reduces their consumption of it.
The potential for growth, most analysts argue, is clear. But bottlenecks and political setbacks, not to mention technological glitches, will create many bumps in the road ahead. Indeed, fears that the most euphoric investors were overlooking such obstacles seem to have contributed to a sharp fall in clean-energy stocks earlier this year- although they have since recovered much of the lost ground. Such jitters caused several green-energy firms to cancel planned flotations. “There’s legitimate debate about a couple of segments”. says Keith Raab, boss of Cleantech Venture. In some instances, valuations accorded to firms with no profits-and little chance of making any soon- were reminiscent of the excesses of the dotcom bubble. As Douglas Lloyd, of Venture Business Research, puts it, “There’s too much money chasing too few opportunities. How is it possible that this many solar companies are going to succeed? They’re not”.
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