Environment Forum

How the recession reshaped U.S. electricity production

Electricity generation in the United States fell 4.1 percent in 2009, the biggest drop in 60 years, according to a new report from the U.S. Energy Information Administration.

The survey offers a snapshot of the impact the recession had on energy markets and shifts in the power supply as coal costs rose and natural gas prices plummeted. Industrial demand for electricity, for instance, dropped by 9.1 percent in 2009 to the lowest level in 22 years.

Expectations that Congress would pass legislation to impose a cap on greenhouse gas emissions may have also encouraged a move away from carbon-intensive electricity production, the report stated.

Electricity produced from coal-fired power plants fell by 11.6 percent in 2009 from the previous year while generation from natural gas increased by 4.3 percent, according to the report.

“In 2009, annual average natural gas wellhead prices reached their lowest level in seven years,” the report said. “Increased supply due to the availability of shale gas, coupled with mild winter temperatures and higher production, and storage levels, and significant expansions of pipelines capacity also worked to put downward pressure on natural gas prices.”

As Southeastern states switched to natural gas, coal’s share of the nation’s electricity production fell to its lowest level since 1978.

Why subsidize the surfeit of wind turbines?

With an oversupply of wind turbines, why are governments subsidizing new manufacturing plants?

In recent years, China has ramped up its efforts to become a world leader in manufacturing and installation of wind turbines.

But the other side of the story is that China has also idled 40 percent of its industrial wind turbine manufacturing capacity as a result of oversupply and plummeting prices.

In Europe, the world’s largest turbine manufacturer, Vestas, announced a bond issue of 600 million euros ($807 million). This is the first bond issue in the company’s history and it was due to slow growth.

Even with an oversupply of manufacturing capacity, and falling prices for wind turbines, taxpayer-funded investment in wind turbine manufacturing by foreign companies in North America has been moving ahead with great fanfare.

In Canada, Ontario signed a $7 billion dollar deal with South Korea’s Samsung to manufacture industrial wind turbines and develop wind energy projects in the province — creating 4,000 jobs.

Gaze into clean technology’s crystal ball for 2010

Clean technology investors who have suffered through 2009 can find cheer in a new report by the Cleantech Group that gives its top ten predictions for 2010.

The number one prediction: Private capital growth will recover, the research group said.

The group believes that the amount of money from global venture capital and private equity in clean technology in 2010 will surpass that in 2009 “by a healthy margin” and could be a record year. The group also is watching for major investments like Khosla Ventures’ raising $1 billion for renewable energy and clean technology funds, more capital in Asia and innovative fund strategies.

Here are the group’s other predictions for 2010:

2.    Clean economies become the new space race. There will be changes in which countries and cities are driving global momentum, but greater protectionism surrounding the industry will be a drawback.

3.    Electric cars take the back seat to smart mobility. The trend will influence city designs, shipping ports and governments’ tax incentives and budgets.

4.    Resource constraints beyond carbon rise to the fore. As the global economy picks up, there could be price spikes that impact clean technology sectors, pushing companies to use resources more efficiently in order to maintain or boost their profitability.

from Summit Notebook:

Enviro-boxer Britain needs to spend more on climate cure

Scientists may face an uphill battle in trying to warn the world about the looming perils of global warming, but one of Britain's top academics wouldn't trade places with the politicians tasked with negotiating a new global treaty to cut greenhouse gas emissions.

"Although the science (of climate change) is difficult and still uncertain, it's a doddle compared to the politics," said Martin Rees, president of the Royal Society, Britain's science academy.

Thousands of international delegates will convene at UN climate talks in Copenhagen in December. All early indications suggest those talks, seen as critical to agreeing a successor to the Kyoto Protocol after it expires in 2012, will be anything but a cake walk.

That said, Rees thinks UK policymakers have done a good job so far.

"We must give (the UK) government credit for its leadership in this area, going back to the Gleneagles G8 summit in 2005 when climate change was pushed up the agenda," Rees said at the Reuters Climate and Alternative Energy Summit this week.

"The UK punches above its weight in the debate on climate change even though we only produce 2% of the world's emissions," said Rees, likening Britain to some sort of environmental boxer.

Rees thinks that because the UK has the high-tech know-how, it should strive to provide more than 2% of the solution to the climate problem by upping investment technologies to help replace fossil fuel burning.

Sage, wind and grouse: The “brown” side of clean energy?

CARBON, Wyoming – They used to mine coal in the abandoned town of Carbon. Now this patch of southern Wyoming is a battleground in the debate over what many hope will be the clean energy source of the future: wind power.

At the heart of the dispute are plans to build a network of wind farms in the American West that conservationists fear could disrupt threatened habitat such as sage brush, a dwindling piece of the region’s fragile ecosystem.

This has made the greater sage grouse — which as its name suggests is totally dependent on sage brush — an unlikely poster child for some U.S. environmentalists, in much the same way that the rare spotted owl became a symbol in the 1980s of pitched battles with the logging industry.

Wyoming is home to 54 percent of the greater sage grouse population in North America. The bird’s status is being evaluated for inclusion on the U.S. government’s threatened or endangered species list, which would give it more protection.

The problem: The chicken-sized bird lives in the vast tracts of wind-whipped open spaces that make Wyoming highly attractive to the wind industry.

Near Carbon, the focus is on a 198-turbine, $600 million wind farm proposed by Horizon Wind Energy.

New ‘gold rush’ buzz hits Germany over Sahara solar

A “gold-rush-like” buzz has spread across Germany in the last week over tentative plans to invest the staggering sum of 400 billion euros to harvest solar power in the Sahara for energy users across Europe and northern Africa. Even though European and Mediterranean Union leaders have been exploring and studying for several years the idea of using concentrated solar power (CSP), the Desertec proposition suddenly captivated the public’s attention a week ago when German reinsurer Munich Re announced it had invited blue chip German companies such as Deutsche Bank, Siemens and several major utilities to a July 13 meeting on the project. The 20 companies aim to sign a memorandum of understanding to found the Desertec Industrial Initiative that could be supplying 15 percent of Europe’s electricity in the decades ahead.

Germany’s deputy foreign minister, Guenter Gloser, has been the government’s point man for the project. I had the chance to talk to him about it.

Question: How did this project to turn the sun in the Sahara into electricity for Europe and north African countries get started? Guenter Gloser: About 15 months ago Germany and France proposed including the solar plan into the list of projects for the Union for the Mediterranean. There were institutions that had already done research and we thought: ‘Why don’t we use this sun belt where there is such an abundance of sunshine as a source of renewable energy?’ Together Germany, France and Egypt put forth this solar plan as one of the six projects for the Euro-Mediterranean Partnership and underscored the fact that it could benefit both sides. It was not an idea where just countries north of the Mediterranean will benefit but rather those countries south of it as well as across the EU would also benefit.

Question: What is the current status of the project? Gloser: We agreed to move forward with the project and want to go forward step-by-step towards its implementation. But obviously neither the EU nor the Arab League will be the principal players but rather private investors. Our task for this project is to create the political framework — for example with setting up of the feed-in tariffs, ensuring the infrastructure is built and ensuring that the renewable energy can be transported to Europe. The political framework can also make it possible to expedite the approvals process. But what is also very important is that the energy produced is also available for countries in the region. For example, Morocco can take advantage of its solar and wind conditions on the Atlantic coast to build solar power plants or wind energy parks to provide energy for its domestic market and to sell energy abroad as well. Even countries such as Algeria, which has fossil fuel reserves, could also use the sun belt for solar thermal power for some of their energy needs — and prolong their fossil fuel reserves.

Question: Is there not risk involved in such large-scale investment in a region with a potential for political instability? Gloser: It’s a cooperation that will contribute towards diversifying energy sources, geographically and in terms of energy sources. It’s a truly fascinating project because it’s a win-win for everyone. And the third winner will be the people and institutions that finance this project. Neither the EU nor the countries in the south are capable of financing this on their own. So the question is: can third-parties bringing financing be involved. Energy security is an important issue everywhere. There are energy sources we have today that at times have been somewhat at risk. There’s no contradiction in saying that it’s important to diversify a country’s energy source as well as diversifying the types of energy it receives. It’s not that there is no risk whatsoever but it’s important to keep in mind that there are also some risk factors for other sources of energy that we are now importing.

Question: What impact do you think a project like this could have in the Mediterranean Union? Gloser: I think the partnership approach that we have taken could well have a positive influence of stability for the countries taking part as well as the neighbouring nations. The EU has been enlarged and come closer together in the past decades but there hasn’t been as much of that among Arab countries. Perhaps it would be possible through certain projects, such as this solar energy project or water projects or transportation routes, to increase the cooperation among those countries.

Question: There have been fears expressed that Europe would be exploiting natural resources in Africa, raising fears of a new sort of ‘colonisation’. What would you say to those fears? Gloser: It is not in any way an issue of the north dominating the south. It is not only the north that is interested in acquiring renewable energy but rather other users are interested. And if that mutual need for energy leads to a project that satisfies all sides then that is in my view a good route to take. I don’t think there’s any justification for the notion of this being an ‘energy colonisation’ or anything like that at all. It’s a mutually beneficial project.”

from Summit Notebook:

Kinder: wind, solar not the answer to U.S. energy needs

Rich Kinder, CEO of Kinder Morgan Energy Partners, says the Obama Administration's push to develop alternative energy sources such as wind and solar are not the answer to reducing the nation's dependence on oil or reducing greenhouse gas emissions. Click below to hear where Kinder thinks the U.S. should be focusing its attention.

Kinder: wind, solar not the answer from Reuters TV on Vimeo.