Goldman sets $40 bln clean energy investment plan

Wed May 23, 2012 9:16pm GMT

 

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By Lauren Tara LaCapra
May 23 (Reuters) - Goldman Sachs Group Inc plans to channel investments totaling $40 billion over the next decade into renewable energy projects, an area the investment bank called one of the biggest profit opportunities since its economists got excited about emerging markets in 2001.
Goldman executives said this week that demand for alternative energy sources will grow with global energy demand, and as big manufacturing countries, including China and Brazil, set more aggressive targets for reducing emissions. The bank plans to finance deals with clients' money and, to a lesser extent, its own funds.
Goldman, which plans to announce the new target at its annual meeting on Thursday, already invests in clean technology. In 2011, it helped finance $4.8 billion in clean technology companies globally, and co-invested more than $500 million in that area. The new target would average out to $4 billion a year, leading some analysts to minimize the target as more of a "charm offensive" than a new initiative.
In 2005, Goldman pledged to invest and finance $1 billion of environmentally friendly projects. By the end of 2011, the company had exceeded its goal, arranging $24 billion worth of financing and investing $4 billion into such projects, said Kyung-Ah Park, head of environmental markets at Goldman.
The bank's new $40 billion target applies to investments and financings for solar, wind, hydro, biofuels, biomass conversion, energy efficiency, energy storage, green transportation, efficient materials, LED lighting and transmission.
Goldman has also pledged to reduce its own net carbon emissions to zero by 2020.
Stuart Bernstein, head of Goldman's clean technology and renewables investment banking group, compared the opportunity to technology investments in the 1990s or investing 10 years ago in fast-growing countries like Brazil, Russia, India and China, for which Goldman economist Jim O'Neill coined the term "BRIC" in 2001.
"This is another emerging opportunity we think will be quite large," Bernstein said.
Enthusiasm for renewables was high in 2006 and 2007 as oil prices soared. But enthusiasm waned after the financial crisis cut energy demand and cash-strapped governments reduced subsidies for alternative energy programs.
The use of hydraulic fracturing technology to access abundant supplies of natural gas in the United States and elsewhere has also undermined alternative sources of energy.
"Obviously we recognize this is not the easiest of times in the clean energy market but nevertheless the underlying thesis as to why cleaner and more sustainable forms of energy need to scale up still holds true," Park said.
CHARM OFFENSIVE
Analysts and experts said Goldman may also be looking to score public relations points for a relatively small investment.
The bank has been on a charm offensive in recent months, after a former employee wrote a scathing opinion piece in the New York Times in March accusing Goldman of ripping off clients regularly. That was the latest in a series of blows the bank's image has suffered since the financial crisis.
"It's forcing a firm that had its roots in being private for a very long time to have to go out there and defend itself," said Michael Carrazza, a former Goldman banker who is now CEO of the private equity firm Solaia Capital Advisors. Promoting these sorts of initiatives makes sense, to show that the bank does some good, Carrazza added.

Obama budget plan ups renewables funding by 29 percent

By Anna Austin | February 14, 2012

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  Obama plans to increase the budget for renewables in 2013.
  PHOTO: OFFICIAL WHITE HOUSE PHOTO BY PETE SOUZA

U.S. President Barack Obama has sent to Congress his federal budget for fiscal year 2013 and has seemingly followed through on his verbal commitments to renewable energy delivered in his Jan. 24 State of the Union Address.
Also as promised, Obama has begun attempts to pull the rug from beneath the feet of big fossil fuel, with a repeal of 12 tax breaks to oil, gas, and coal companies to raise $41 billion over 10 years. At the same time, the $3.8 trillion budget proposal increases 2013 renewable energy funds by 29 percent compared to 2012.
In the budget proposal, the U.S. DOE is allotted $27.2 billion, $2.3 billion of which is slated for the Office of Energy Efficiency and Renewable Energy for energy efficient research and development, biofuels, advanced vehicles and renewable electricity generation. While the DOE budget increases by more than 3 percent from 2012, the USDA budget decreases by 3 percent, to $23 billion in discretionary funding. Out of that, Obama has proposed $6.1 billion in loans to rural electric cooperatives and utilities that will support clean energy, and to promote renewable energy at electric generation, transmission, and distribution sites in rural communities.
In addition, through the Rural Energy for America Program, the plan provides $19 million in assistance to agricultural producers and rural small businesses to complete a variety of projects, including renewable energy systems, energy efficiency improvements and renewable energy development. More than $200 million is proposed to continue support for the development of domestically produced advanced biofuels.
To access budget documents, visit http://www.whitehouse.gov/omb/budget.

U.S. investment market for woody biomass looks strong for 2012 as demand for wood pellets rises; regulatory changes expected to enhance picture

U.S. investment market for woody biomass looks strong for 2012 as demand for wood pellets rises; regulatory changes expected to enhance picture: U.S. investment market for woody biomass looks strong for 2012 as demand for wood pellets rises; regulatory changes expected to enhance picture

Senator calls on US to help biofuels’ development
2 February 2012

A US senator has called for congress to do more to support development in technology and biofuels incentives during a briefing at the White House.
Senator Chris Coons spoke at an American Chemical Society briefing, saying that biofuels production was essential for the future of the US economy.
‘This was a great starting point as a concrete forum to look at how we begin to move forward towards workable solutions that will require cooperation from many public and private interests to be able to move from the field to the filling station in the future,’ he said.
Coons listed the advantages that investment in biofuels could have for the US, such as job creation, economic development in rural areas and employment in all different types of sectors from growing the biomass to distributing the fuel.
He also discussed what individual companies in the country were doing to improve the production of biofuels and its development.
‘DuPont is deeply committed in investments to a diversified mix of next generation biomass and biofuels, those building blocks and the facilities necessary, those cellulosic production facilities as well as the development of bio-butanol and other drop-in biofuels,’ said Coons.
‘CMS is licensing what were formerly DuPont fluoropolymers selected impermeable memory technologies for the dehydration of biodiesel and other biofuels, a small plucky start-up the recipient of a number of critical SBIR and CDR grants that I think can play a key role in solving some of the production and delivery challenges,’ he continued.
He called for the Department of Energy and the USDA R&D programmes to extend tax credits for advanced biofuels and for the industry to work together on the Renewable Fuels Standard.

Buffet Ivest in Solar

Warren Buffet’s Berkshire Hathaway utility subsidiary, MidAmerican Energy, has purchased First Solar’s Topaz Solar Farm project.

Bernie Sanders Pledges Legislation Ending 'Absurdity' of Federal Fossil Fuel Subsidies

Mat McDermott
Business / Economics
January 25, 2012

Mark van Laere/CC BY-ND 2.0
We just learned, based on IEA calculations, if all fossil fuel subsidies were eliminated it would result in greenhouse gas emission cuts deep enough to get us halfway to preventing dangerous climate change. Indeed, cutting fossil fuel subsidies has been publicly mulled over for some time, with scant little progress made.
Now, at a rally in Washington DC organized by 350.org, Vermont senator Bernie Sanders has pledged to do something about that.
Sanders said:

One of the absurdities that foes on right here in Washington DC is that Congress keeps voting not for the interest of our children, not in the interest of our future, but for the profits of the huge oil and coal companies. ... The most profitable corporations in the world do not need subsidies from the American people.

Sanders pledged to introduce legislation repealing federal tax breaks to fossil fuel companies, saying that doing so would reduce the federal deficit by over $40 billion over the next ten years. (International Business Times)
Ending fossil fuel subsidies also made it into President Obama's State of the Union speech yesterday. Obama said:

We have subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that's rarely been more profitable, and double-down on a clean energy industry that's never been more promising.

Given the chronic Congressional constipation of late, any legislation by Sanders or the President likely has an tough fight, despite the obvious climate, energy security, public health, and long-term jobs benefits of rapidly transitioning away from fossil fuels, facilitated by taking away support for polluting non-renewable energy sources and promoting non-polluting renewable ones.
But nevertheless ending fossil fuel subsidies in a rapid yet planned and measured manner, structured in such a way that the poor don't continue to get the sharp end of the stick, is absolutely what must happen.

Lufthansa: Biofuels Could Be Aviation’s Standard in Five Years

Published on January 18th, 2012 by EnergyRefuge.com

Posted in Aviation, Biofuel

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Joachim Buse, Lufthansa airline’s head of aviation biofuel, last week said at an industry event in Washington, D.C. that biofuels could be the industry’s standard fuel in five to seven years.
According to Air Transport World, the airline executive said his company’s burnFAIR project has shown that biofuels are a feasible proposition for commercial flights from a technological point of view. What needs to be done now is to make sure there is enough production and from sustainable feedstocks. He told ATW that “from now on, it’s purely a commercial issue.”
One day before Joachim’s talk, a flight between Frankfurt and Washington using a Boeing 747 400 carried 40 tons of a biosynthetic fuel mix. Between mid-July and late December, Lufthansa had four daily roundtrip flights between Hamburg and Frankfurt as part of burnFAIR.
Joachim said that in order for biofuels to become a routine within the aviation industry, government assistance and commercial practices will be necessary. burnFAIR cost Lufthansa €6.6 million ($8.4 million). Out of the total, €2.5 million were covered with subsidies from the German government.
The use of biofuels by airlines is likely to revive the ‘food versus fuel’ debate. What do you think? Are biofuels a green solution for airlines, who account for an estimated two percent of the total amount of greenhouse gas emissions?
Article by Antonio Pasolini, a Brazilian writer and video art curator based in London, UK. He holds a BA in journalism and an MA in film and television.

EPA Utility MACT Rule Released: Coal Plants Set For Closure As Blackout Risks Cited

Regulation

EPA Utility MACT Rule Released: Coal Plants Set For Closure As Blackout Risks Cited

By Margaret Ryan

Published: December 21, 2011

Santa arrived a few days early for environmentalists, but the coal industry is getting Scrooge.

The Environmental Protection Agency released its Utility MACT rule on Wednesday, issuing a controversial order to slash mercury and other hazardous emissions from coal-fired power plants. By 2016, all plants must emit as little mercury as the best 12% do today, lowering national emissions 90%.

For more news and information on the rapidly evolving energy industry, please sign up for the AOL Energy newsletter. Connect with the authors and editors of AOL Energy on our LinkedIn Group.

EPA estimates compliance will annually cost the industry $9.6 billion and provide health benefits of at least $37 billion – figures that rule opponents dispute.

The rule, first authorized in the 1990 Clean Air Act amendments, is a win for environmentalists who were furious with the White House for dropping EPA's review of ozone limits in September.

For coal, the rule essentially ends the Clean Air Act grandfathering that has made it economic to keep running aging coal plants. The expected rule has already been cited in utility decisions to shut old units. Oil-fired plants are also affected, but they produce less than 1% of US electricity while coal produces 43%.

Here Come The Lawyers

The rule is expected to give lawyers a busy holiday as they digest the final text and, probably, head to the federal courthouse. Opponents including 27 states were already asking a court to delay the rule, charging EPA did not take needed time to consider its real-world impacts.

EPA Administrator Lisa Jackson stressed, as she rolled out the rule at Children's National Medical Center in Washington, DC, that EPA will be reasonable in setting compliance schedules but is firmly behind a rule EPA believes will prevent more than 11,000 premature deaths annually and prevent 130,000 cases of childhood asthma.

Rule opponents protest those and other claimed health benefits actually come from a side effect, as mercury controls also lower fine particulates. Almost no benefits can be attributed to controlling mercury, they contend.

The final rule sticks with a three-year compliance schedule for most plants. Under the Clean Air Act, state air permitting authorities can allow up to one more year for technology installation, and EPA can tap separate authority to grant a fifth year to "reliability critical" installations. EPA said it expects little need for that provision.

The Edison Electric Institute negotiated till the final hours last week trying to get more compliance time. EPA estimates about 600 plants with 1,100 coal and 300 oil units are affected. The North American Electric Reliability Council (NERC) warned in November that EPA's three-year timeline means hundreds of units shutting at once – either for months for retrofits, or permanently.

NERC said that could endanger electric reliability in some coal-dependent regions, raising the spectre of blackouts.

Sue Tierney with Analysis Group, a former assistant energy secretary in the Clinton administration, said the rule provides flexibility in multiple ways: in compliance technologies, in how multiple units at a station are handled, and for grid reliability. She said ensuring reliability is the reason EPA took extra time to craft a roadmap for needed time extensions, including allowing units slated for shutdown to operate until other units can be backfit.

Bringing Down The Hammer

Estimates of plant shutdowns caused by the rule have varied wildly, from 10,000 to 110,000 megawatts of some 320,000-plus MW of coal capacity in the US. But analysts say many old coal plants are inefficient, and can't compete with low-cost natural gas anyway. That complicates distinguishing MACT's impacts.

The rule has split the utility industry. Companies such as PSEG, which has invested in anticipation of the rule, and Exelon, with heavy nuclear investment, have back the rule, while coal-dependent companies like Southern Co. and American Electric Power are fighting it.

Scott Segal, Director of the Electric Reliability Coordinating Council, representing fossil-heavy companies, said neither the scope nor the timing of the rule is legally justified. He said the rule will force replacement of coal plants with less labor-intensive generation, costing the US 1.44 million jobs by 2020.

Mary Gade, EPA Region 5 head during the Bush administration, said where plants have been upgraded, the substantial investment has created jobs. She said the rule has been in the works 21 years and opposition is coming from "hell no we won't go" utility companies.

And there's another complication. The MACT rule is hitting utilities at the same time as the Cross-State Air Pollution Rule is tightening limits on sulfur and nitrogen oxides from coal plants. That rule was issued in July and takes effect next month unless opponents get the court stay they are seeking. Like MACT, CSAPR is an Obama administration rewrite of a Bush-era rule found legally defective by the courts.

Google invests $94m into solar PV

Google invests $94m into solar PV

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December 22, 2011

 

 

 

 

 

 

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Search engine giant Google has put $94m into four solar photovoltaic (PV) projects currently under construction in California.
The sites, currently being built by Recurrent Energy near Sacramento, bring Google’s investment in renewables up to more than $915m.
But this investment, according to Google, represents its first investment in the US in larger scale solar PV power plants that generate energy for the grid–instead of on individual rooftops.
These projects have a total capacity of 88MW, equivalent to the electricity consumed by more than 13,000 homes.
A spokesman said: “We’ve had a busy year at Google, since January we’ve invested more than $880m in clean energy projects.
“We believe the world needs a wide range of solutions–from wind, to transmission, to solar PV and concentrated solar–and we look forward to new opportunities next year to further expand our portfolio of clean energy investments.”

Residential PV achieves grid parity

Residential PV achieves grid parity  

December 15, 2011

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Researchers at Queen's University recalculate the levelized cost of electricity, and find photovoltaics (PV) is the low-cost solution.

By Seth Masia
Editor, SOLAR TODAY

With increasing frequency, peer-reviewed academic papers are confirming things the market already knows. This month, it's this: residential PV has achieved grid parity for peaking loads in key North American markets, and is quickly gaining ground as the price of conventional power rises.
A team of researchers at Queen's University in Ontario has published "A Review of Solar Photovoltaic Levelized Cost of Electricity" in Renewable & Sustainable Energy Reviews.
Mechanical engineering professor Joshua Pearce, with his students Kadra Branker and M.J.M. Pathak, analyzed standard methods of calculating LCOE. Then they proposed a template for determining LCOE based on specific values for specific locations and specific equipment prices. Their method avoids sweeping generic assumptions and accommodates recently-acquired data - for instance, that real-world installations are degrading more slowly than predicted, and therefore have a significantly longer productive life cycle, and that both equipment costs and interest rates have come down quickly in recent months. Critically, the team modeled insolation and financing mechanisms current in Ontario, which are consistent with conditions across the northern tier of U.S. states, and a residential-scale installation instead of a more cost-efficient utility-scale array.
The study concludes, in part:

Given the state of the art in the technology and favorable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.

The full report is available for purchase here: http://dx.doi.org/10.1016/j.rser.2011.07.104.
A draft version is posted here: http://qspace.library.queensu.ca/bitstream/1974/6879/1/LCOE%20of%20PV%20pre-print.pdf
In August, 2010, Pearce and Branker published a financial analysis in Energy Policy, finding that the Ontario government would realize more than 8 percent annual ROI for subsidizing development of thin-film manufacturing in the province. See http://dx.doi.org/10.1016/j.enpol.2010.03.058

U.S. Military Tests Out Green Tech In Afghanistan

 

Gunnery Sgt. William Price Small/AP In this photo released by the U.S. Marines and taken in December 2010, Lance Cpl. Dakota Hicks, from Laharpe, Ill., connects a radio battery to a portable solar panel communication system in Sangin District, in Afghanistan.The U.S. military is trying to wean itself off reliance on fossil fuels by employing solar energy and biofuels, among other measures.

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December 29, 2011

The heavy, mine-resistant vehicles that almost all U.S. military personnel use to move about Afghanistan are gas guzzlers. And even though the U.S. military buys that fuel at a reasonable price, the energy it takes to fly it and truck it to remote parts of Afghanistan drives the price into the stratosphere.
There's also a much greater cost, says Ray Mabus, secretary of the U.S. Navy.
"It's expensive in terms of getting us there financially. It's also expensive in the fact that for every 50 convoys, we lose a Marine, either killed or wounded, guarding that convoy," he says.
That cost, in both lives and dollars, is pushing the military to go green.
Practical Benefits Of Green Tech
The Navy has set the goal of using nonfossil fuels for 50 percent of its power by the year 2020. Mabus recently paid a visit to U.S. Marines in the remote Afghan province of Helmand, at the far end of the fuel supply chain, where some innovative green equipment is already in use.
Some of the solutions are incredibly simple: silvery tent liners that increase the efficiency of heaters or air conditioners. More novel are the portable solar-panel blankets, able to power communications gear for a patrol. That means carrying far fewer heavy batteries. There's also a small shipping container connected to a bank of solar panels that is powering flat screens and surveillance equipment.
Marine Capt. Brandon Newell says the troops don't have to be environmentalists to like the new gear.
"If the system works, they don't care. In fact, a Marine will love it if he has to refuel that generator less often. They'll love it. They don't care about the message or anything else; all they want is something that works whenever they need it," he says.
Newell admits that the measures so far are baby steps, and there are plenty of bugs in the system.

Enlarge Shah Marai/AFP/Getty Images Afghan policemen and locals watch a burned-out fuel truck, supplying a U.S.-run base, after being targeted by a bomb near Bagram Air Field near Kabul on Oct. 26. Attacks on convoys carrying supplies to U.S. troops are costly — both in monetary terms and in human life.

But the important thing, says Mabus, is that the U.S. military is starting to test some of the technology in the roughest conditions.
"When the military does something and shows that it works ... in the most critical circumstances, it makes it much easier to commercialize something," he says.
Environmental Impact A Side Benefit
That goes for solar panels, says Mabus, but also for biofuels. This fall, the Navy purchased half a million gallons of fuel made from algae or used cooking oil. In the spring, a huge exercise in the Pacific Rim intends to demonstrate that it works just as well as petroleum-based fuel.
Mabus says the strategic goal is to free the U.S. military from a product that comes from volatile places with unsavory regimes. He points out that during the NATO action in Libya, a spike in the price of oil cost the U.S. military about $1 billion. The environmental impact is a side benefit, he says.
"It really is a question of national security. It may be a side effect on climate change, being better stewards of the environment, but that's not the reason we're doing it," Mabus says.
Still, major environmental groups have reacted positively. And developers of biofuels and solar panels say having the Pentagon — the world's largest consumer of fossil fuel — trying to go green is providing a shot in the arm to their industry.
"It's a signal to investors that there is going to be stability. That is the game changer," says Sean O'Hanlon, president of the American Biofuels Council. "The bottom line is there has to be stable policy for them to invest hundreds of millions of dollars."