Environment Forum

Caveat investor: Wind may let you down

John Laforet is president of Wind Concerns Ontario, a coalition of 42 grassroots organizations aiming to curtail development of wind farms in the central Canadian province of Ontario.  He is also running for municipal public office.

Governments around the world are actively seeking private development of renewable energy projects by offering generous feed-in tariffs that often see developers paid many times the market rate for the power they produce.

This has encouraged a surge of applications, but the volume of applications and other challenges associated with these projects present potential risks to prospective investors.

Projects require transmission capacity to carry their energy to market, but the agencies accepting applications for a given jurisdiction often aren’t responsible for managing transmission systems.

In the Czech Republic, a boom of renewable projects has caused considerable challenges to the transmission system and has caused the grid operator to block future wind projects, while threatening to disrupt grid connections for existing renewable energy projects.

In Canada, Ontario’s inventory of projects under development, approved or in the proposal stage, does not consider existing grid capacity.

Which way will the wind (power) blow in 2010?

The United States became the No. 1 wind power market in the world in 2008. But under the credit crisis in 2009, the building of new wind farms slackened and the United States ceded its top global spot to China.

With the demand for renewable energy still growing, the American Wind Energy Association is eyeing 2010 as a critical year. Here are some of their top trends to watch for:

Second to natural gas: Wind power generates only 2 percent of the U.S. electrical supply. But new wind power generation in the United States has been second only to natural gas generation in terms of new capacity built each year since 2005. Watch for the industry to work to keep that spot.

Wind turbines ratchet up the power: General Electric won a $1.4 billion contract in December to supply 338 turbines for a massive new wind farm in Oregon being built by energy producer Caithness Energy LLC. The size of the turbines — 2.5 megawatts — forecasts a shift to larger turbines, driven by economics, the wind group said. “Taller turbines with larger swept areas produce more power at a lower cost per kilowatt-hour.”

Market for small projects grows: The trade group predicts small wind projects for homeowners and small businesses will see record growth, fueled by an expansion of a 30-percent investment tax credit.

Industry seeks advice on where to put projects: Wind farm developers have to win regulatory approval for their projects, which have sparked conflict with conservationists at times. To ease the process of clearing those hurdles and finding sites for projects, the industry is working with the U.S. Fish and Wildlife Service plus other federal agencies and nonprofits to get more clarity on wildlife surveys and other required studies. Will more guidelines be enough to speed up the development?

States, regions work on transmission: The industry is looking to states and regions to move toward investing in transmission needed to move electricity from often remote wind farms to the cities that use the power. The trade group is eyeing the Midwest in particular and whether its independent system operator that manages the regional power grid for 15 states and one Canadian province follows Texas and the Southwest region in how it invests in new transmission lines.

Wind projects don’t harm property values: study

Not-in-my-backyard — or NIMBY — protests can stall or stop wind power projects, with their spinning turbines, or other renewable energy projects, as Reuters has reported here.

But a new study issued by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory gives wind power companies and developers a leg up in the debate.

The study — which can be read here – examined the sales of 7,500 single-family homes from 1996 to 2007. It found that wind power does not deserve the stigma — like causing a nuisance or ruining the scenery — that it sometimes carries.

“Neither the view of the wind facilities nor the distance of the home to those facilities is found to have any consistent, measurable, and statistically significant effect on home sales prices,” the study said.

Still, it’s probably too early to declare the debate closed over where to put large scale wind, solar and other renewable energy projects and their environmental impact.

(Photo credit: Fabrizio Bensch / Reuters)

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.

Which U.S. states make the grade on net-metering?

Advocates for renewable energy hail net-metering as a key policy so that electricity from solar and wind is generated at the same place where it is consumed.

Supporters refer to it as the policy that lets the electric meter spin backwards. It allows people who own solar power systems, for example, export electricity to the grid and earn credits — at retail prices — on their utility bill.

In a new report called “Freeing the Grid,” advocates with several groups grade each state on their net-metering policies.

Environmental trendsetter California tied for fifth, but Colorado got the top spot.

Delaware, Maryland and New Jersey followed Colorado in the ranking, while California, Oregon and Pennsylvania tied for fifth.

Seven states flunked by default. Those states  — Alabama, Alaska, Mississippi, South Carolina, South Dakota, Tennessee and Texas — have no statewide net-metering policy.

The report also looked at how states fare on another key policy: interconnection standards, which determine how a generator on a customer’s site plugs into the electricity grid.

The race for U.S. smart-grid cash

Utilities across the United States are rushing to a federal stimulus program that is doling out money to create a “smart grid” — systems that will upgrade the electricity grid.******In this story, Reuters correspondent Eileen O’Grady looks at the tough job facing the U.S. Department of Energy: They have to divvy up $4.5 billion in smart-grid money among some 565 applications.******Smart grid technology measures and modifies power usage in homes and businesses and improves grid reliability. Experts envision that it will open the door to a new era with “smart” appliances that turn themselves on and off, electric cars, more renewable energy and more efficiency on power lines.******San Diego Gas & Electric is one of the utilities hoping to launch a smart grid through the federal program and has applied for $100 million in stimulus funds.******Their plan would build micro smart grids at the University of California, San Diego and a residential community in San Diego County. They would work with companies like IBM, Cisco and Itron on the system technologies, software and hardware.******”They not only have to talk with each other but we have to make sure the entire network is secure. So from an intellectual security standpoint, we’ll ensure that we have that set-up, that we have the ability to communicate from one device and we make it seamless for the customer,” said Michael Niggli, chief operations officer at San Diego Gas & Electric.******Another major issue the utility hopes to solve is what happens when energy from renewable resources is intermittent, with its power generated fading or spiking.******”If the wind stops blowing or if the sun has clouds that intervene, so you can be in a situation where the power supply is affected,” Niggli said in a phone interview with Reuters.******”That’s a lot different than what we have today … where it’s like driving a car. If you want to go faster, you push the accelerator.”******Niggli envisions a system where customers can control their home energy use remotely, turning on the air-conditioning from a computer through the Internet or even on  their handset.******Some companies that are partnering with utilities are not putting all their eggs in one basket in the race for the smart-grid stimulus funds.******IBM is working as a vendor with a dozen utilities that have applied for money.******If the smart grid is done right, then customers won’t even notice a difference, said IBM’s Stephen Callahan, who leads the company’s Intelligent Utility Network unit for the Americas.******”Those customers shouldn’t see anything but improvement in cost, reliability, all those things,” Callahan said.******We wanted to know what readers think about the federal program to jump-start smart grid projects. What should the DOE prioritize? What kind of projects would you like to see?******(Photo: The sun is shown as it rises between power transmission lines in Burbank, California. Photo credit: Fred Prouser/Reuters)*********************

from Tales from the Trail:

Team Obama’s Environmental Irony Tour

Okay, so it's August in Washington. It's hot. Congress has gone home. Even the summer interns are packing up and getting out of town. So it's not surprising that top members of the Obama administration might be ready for a road trip.

That's basically what the White House announced in a statement headlined: "Obama Administration Officials Travel America, Talk Clean Energy Economy." President Obama went to Indiana to announce $2.4 billion in funding for advanced battery and electric drive projects; Energy Secretary Steven Chu headed for Minnesota to look at renewable energy projects and North Carolina to announce a big grant to a lithium battery firm, finishing up the week in Massachusetts to talk about clean energy jobs at Harvard; Interior Secretary Ken Salazar went to a solar panel company in Colorado; EPA Administrator Lisa Jackson was in Florida and Commerce Secretary Gary Locke traveled to Missouri.

Probably only a crank would wonder just how much greenhouse gas all this official travel spewed into the atmosphere. There's no hybrid Air Force One, after all. But it does seem like an exquisite irony that, with the best of environmental intentions, the Obama team may have stomped all over the United States with a heavy-duty carbon footprint.

Is it fair to ask that when they talk the talk, they walk the walk -- or offset emissions by funding windmills or other projects that supply renewable energy? Let us know what you think.

For more Reuters political news, click here.

Photo credits: REUTERS/Jason Reed (President Obama speaks in Wakarusa, Indiana, August 5, 2009); REUTERS/Jonathan Ernst (Windmill turbines on Backbone Mountain in West Virginia, August 28, 2006)

Green Portfolio: Pacific Ethanol shines

Shares in the suffering utility Pacific Ethanol shot up over 8 percent on Tuesday, reaping the rewards of cheaper ethanol prices, thanks largely to what is expected to be a bumper crop year for U.S. corn. Units of Pacific Ethanol that owned four ethanol plants filed for Chapter 11 protection last month, stung by volatile prices for corn, low fuel demand and the credit crisis.******A senior company official at India’s Suzlon Energy said the wind power company was looking at selling assets and shares to lower its debt, dealing a major blow to its shares, falling 11.44 percent in Tuesday trading.

Wacky windmill forces California highway shutdown

Turns out birds aren’t the only ones with a reason to steer clear of wind farms.

This past weekend, a wind turbine spinning out of control forced California police to shut down a stretch of highway because of concerns that it could break into large, heavy, and very fast-moving pieces.

California Highway Patrol officers late on Sunday morning noticed that a roughly 125-foot tall turbine on a ridge near the desert town of Tehachapi was spinning much faster than any of the others at the Tehachapi farm.

“It looked like a propellor on an aircraft… and it was giving off a loud racket as it failed,” Officer Ed Smith said.

Officials contacted AES, the power company that owns the wind farm, and Smith said “it was determined that if it failed it could cast large pieces of steel and debris up to a mile from where the turbine was.”

Given that the state’s Highway 58 is less than half a mile from the location of the crazy turbine, which could not be stopped, officials resolved to shut down the road. It was closed for about 10 hours, Smith said, at which point the winds had died down enough to reopen it.

AES spokeswoman Meghan Dotter said the turbine was made in the mid-1980s by Denmark’s Vestas and was smaller than more modern models. The turbine’s brake failed, Dotter added, causing it to spin out of control in high winds of more 50 mph. The site is being monitored now, she said.

Dark days for renewable energy

We knew things were going badly in the renewable energy industry, but this week we got a grim view of just how ugly it looks out there.

Today, research group New Energy Finance said first-quarter investment in so-called clean energy fell 44 percent from the fourth quarter of last year, which in the immediate aftermath of the credit crisis wasn’t exactly stellar itself.

The $13.3 billion of investment in the most recent quarter was 53 percent below the same quarter of last year, the group said.

Things are particularly bad in the United States, where financing of new renewable energy projects was only $500 million in the first quarter compared with $2 billion in the fourth quarter of last year and $5 billion in the first quarter of 2008, according to New Energy Finance.

That report came a day after several other groups, including Deloitte and the Cleantech Group, gave their own views of first-quarter activity in clean tech. Though they had different authors, all the studies sent the same message: green investment is way down, and it’s unlikely to bounce back any time soon.

“The sector has been hit by an oncoming train,” New Energy Finance CEO Michael Lebreich said in a statement. “The industry has to get through some very difficult quarters until the stimulus funds start to flow.”

Companies including solar panel makers, wind turbine manufacturers and biofuels producers are all hoping that the U.S. government’s energy-focused economic stimulus plan will unlock lending for new projects such as wind farms and solar power plants.  Many analysts, however, say those funds may not materialize until the end of this year.