Domestic Fuel

Representatives of the renewable fuels industry were pleased to hear President Obama talking about energy independence during his State of the Union address last night, saying that we need to “break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015″ as well as mentioning wind and solar, nuclear, clean coal and natural gas, and even alluding to the promise of algae as an energy source. However, the goals that Obama laid out are very similar to the goals presidents of this country have been talking about for decades.

Yesterday’s Iowa Renewable Fuels Summit in Des Moines concluded with a piece that aired on “The Daily Show with Jon Stewart” in June 2010 about how the last eight presidents have gone on television and promised to move America towards a more energy independent future. The segment was filled with Stewart’s trademark humor, but it is sobering to think about how long this country has been touting energy independence and yet still be facing so many hurdles, skeptics and downright enemies who continue to impede that progress.

Stewart showed clips of all of the past eight presidents, from Nixon to Obama, talking about moving “beyond a petroleum-based economy,” first playing clips of both Obama and George W. Bush saying almost the exact same words. He follows up with Clinton, Bush 42, Reagan, Carter, Ford and Nixon making similar statements and talking about ideas like solar, natural gas, fuel cells and even “gasohol.”

Funny, but unfortunately, way too true. Take a look.

Last Fall, National Wind named Peter Mastic President and Chief Development Officer. Now the company has named him CEO. He is now responsible for the company’s strategic planning, operations management, wind farm development, project finance, and overseeing all company employees. Mastic is replacing Leon Steinberg who had been the CEO since 2007 and is staying on as Executive Vice President during the transition period and will remain on the Board of Directors.

“Peter joined National Wind three months ago following a national search I initiated and led earlier in the year,” said Steinberg. “Since joining us, Peter has demonstrated a masterful ability to deal with the challenges of the wind industry, and I feel comfortable transitioning out of this role knowing the company is in good hands. His proven success in developing large-scale wind projects across the country will enable National Wind to reach its full potential moving forward.”

Mastic added, “I am pleased to be taking the lead of National Wind at a pivotal point in its progress. As a utility-scale community-based wind developer, National Wind is unique in the industry and is well positioned to adapt successfully to future challenges and opportunities.”

Los Angeles, California officials have announced the city’s Department of Water and Power has generated 20 percent of its power from wind, solar and geothermal sources.

This story from the LA Daily News says it put the city well ahead of its and state renewable energy goals:

“This is a big deal,” Mayor Antonio Villaraigosa said at a City Hall news conference with environmental leaders. “When we set this goal in 2005, the DWP was the dirtiest utility in the nation. Today, it’s the cleanest and we have been able to do it at a cost lower than any other utility in California.”

Wind power accounted for 47 percent of the renewable power, small hydro-electric was 20 percent, geothermal was 22 percent and solar was 1 percent. The mayor said the city hopes solar will provide more of the renewable energy in future years. The amount of renewable power generated by the DWP is 4,500 gigawatt hours, the level needed to power 750,000 homes. That reduces carbon dioxide by 2.5 million metric tons, the equivalent of taking 490,000 cars off the road.

The city was able to hit this goal ahead of other utilities in the area.

AltaTerra Research is hosting an online briefing aimed at the renewable energy industry, particularly, the solar industry, to help them learn how to obtain financing. “Roadmap to Bankability: A Discussion with Matt Cheney on Getting New Technology Financed & Deployed” will be held Thursday, February 3 at 11:00 am Pacific / 2:00 pm Eastern. Matt Cheney is the founder of Renewable Ventures and the CEO of CleanPath Ventures.

Project financing, also known as “bankability” is a critical issue facing the renewable energy industry today. The ability to successfully navigate your company through the paths to funding and onto commercialization is the key for new and improved technologies survive in the marketplace. Without access to private capital, the renewable energy industry will struggle to survive.

“Matt Cheney is a solar luminary and financing expert, who was the first to finance many emerging solar technologies in America. As the founder and former CEO of Renewable Ventures, Matt has financed, owned, and operated more than $300 million in solar assets,” said Jon Guice, managing director of research at AltaTerra Research and moderator of the online briefing. “We are excited to have Matt share his insights on how bankability is affecting the renewable and solar industries and discuss some potential solutions.”

During the online briefing, Cheney will discuss the challenges of project financing and commercialization for emerging and established renewable energy innovations. He will offer practical solutions for how companies are solving the bankability problem, including an exploration of innovative finance mechanisms, and he will focus on how bankability affects customers and investors in innovative technology solutions. In addition, the session will cover the broader issue of how bankability affects the commercialization of new, improved and emerging technologies.

Registration is now open for the live online briefing, and for post-event access.

San Diego, California has approved the first vertical axis wind turbine for the county. Not soon after, the first one has gone live at the home of Tim Williams, who has a personal mission to “go green”. His 3.4 kW Falcon turbine from WePOWER was installed on an 18′ pole on his property by Joe Moore Construction, an authorized WePOWER dealer.

According to a news release, Joe Moore had to appear before the County Building Department and present the WePOWER’s Falcon Turbine for approval. Unlike traditional prop-style turbines, this one is virtually vibration, noise and maintenance free and is safe for birds and bats. But that was only half the battle. A qualified third party had to inspect and approve the product and TUV SUD America, Inc. did just that.

With the work of William and Moore, other residents and businesses in San Diego County can install wind power. Other global customers of WePOWER include Lockheed Martin, AT&T, Best Buy, Tata Energy, and others.

In addition to the 3.4 kW Falcon turbine, WePOWER also has other products including 600W, 1.2kW, 3.4kW, 5.5kW and 12kW turbines. The turbines are approved by the California Energy Commission (CEC) and with the federal tax package that was signed at the end of last year, they also quality for federal tax credits.

Two, four, six, eight, who do we love to hate? The oil companies!

Despite my story lead, I was not a cheerleader in another life but I couldn’t get that cheer out of my head while I read this week’s book, “Why We Hate The Oil Companies Straight Talk From An Energy Insider,” by John Hofmeister. I recently gave Mr. Hofmeister some ink when he predicted that the country would see $5 per gallon of gas within the next 10 years so I thought, hey, I should read his book. See what’s he’s all about. He is, after all, the former president of Shell Oil Company.

What is Hofmeister all about? Bringing affordable, clean and sustainable energy to all Americans. He writes, “The truth is that affordable energy is essential for American economic growth. It is essential for our national security and position in world leadership. And it is necessary to maintain our quality of life.” He continues by saying affordable energy and environmental sustainability are challenges that require immediate attention.

Who is in charge of leading the way to affordable energy?  The oil and utility companies? Government? American Citizens? The answer is not so black and white as Hofmeister explains. No one believes the oil companies – they are ranked 24 out of 24 in the industry “Who do you trust” poll and the government is ranked at 22. Not swell by any standards. Then we have American citizens who have been fed “information, misinformation and no information” and they are still electing politicians who have spent 40 years not making good energy policy decisions. We Americans have bad voting histories.

So what do we have? Hofmeister says “there is an energy shortage, but there is no shortage of energy.”
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I’m feeling a bit nostalgic this first week of 2011 for the days of affordable energy prices, environmentalists who still understood change for the greater good and for a biofuels industry that not only got along but were actually friends.

We’re only four days into the new year and some energy economists have declared that $3.00 per gallon gas prices are the new low and only going up – we’ll never see them lower again.

Not only are Gas prices going up but energy prices as well – heating oil costs on the East Coast and natural gas costs in the Midwest. Coal is also getting more expensive.

Yet while we lament about high energy costs, we downright howl over the higher costs of alternative energy and try to push today’s development aside for future progress and cost competitiveness.

Let’s talk about cost parity for a moment. Those opposed to ethanol often cite the cost per gallon is not competitive with gasoline without subsidies unless the price of a gallon of oil reaches a certain point. Hey people – we’re nearing that point and we’ll soon hold steady and never look back.

Several things will happen when the cost of a barrel of oil averages $150 – proof we’ve already seen – America’s energy-based economy begins to collapse. A domestic and global recession ensues. People lose jobs. People lose houses. People can’t afford to pay their energy bills or their food bills.

Yet another thing happens at this point – cost parity. Without subsidies and incentives, and with the advancements in technologies, we suddenly have the ability for domestically produced affordable energy. But we’ll never have this future if we don’t continue to develop alternative energy today.

Yeah, yeah…I know that NO energy source is perfect.
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Southwest Windpower has released the Skystream 600 – their most efficient and small wind turbine product. The Skystream is designed to provide personal wind energy for homeowners and businesses. According to the company, the Skystream 600 produces 74 percent more energy than its predecessor, which makes it the most efficient power grid-connected turbine in its class. On average, it can produce 7,400 kWh of energy per per per household in 12 mph average annual wind speeds. Since the wind does not blow steady, the company says that depending on the wind resource, siting and energy efficiency, a Skystream 600 could provide up to 80 percent of an average home’s energy requirements.

Available in March of this year, the Skystream 600 is currently being featured as part of GE’s “home of the future” exhibit at the Consumer Electronics Show. GE is an investor in Southwest Windpower. Another component of the turbine the company is touting is its interactive Skyview system where users can monitor how much energy the wind turbine is producing from anywhere internet access is available.

“In many applications, Southwest Windpower offers the most economical distributed renewable generation technology,” said Kevin Skillern, managing director of venture capital at GE Energy Financial Services. “Through our investments in the company, GE Energy Financial Services is helping bring this new product to market.”

The company believes that with their new technology, more than 13 million homes in the U.S. could install a wind turbine. The company did not disclose the price of the Skystream 600 in their release or on its website.

Environmental Watch List of 2011. The 10 environmental hot topics range from issues like oil spills and offshore drilling to breakthroughs in wind and solar energy and the military’s increased use of renewable energy. The full report evaluates 10 judicial, legislative and other actions that the top-ranked law school considers to significantly affects humans and the natural world.

“We can continue our short-sighted addiction to fossil fuels or we can adopt innovative, healthier, more sustainable practices,” said VLS Dean Jeff Shields. “The Environmental Watch List will help improve public understanding of how to use the law to take action on the critical issues of our time.”

The 2011 Watch List:
1. Congressional failure to enact climate change legislation – will states take over where federal failed in 2011?
2. The nation’s worst oil spill – Deepwater Horizon Disaster
3. First U.S. greenhouse gas rules – Will the EPA’s efforts to restrict global warming pollutants survive judicial and political challenges?
4. Climate change in the courts – Supreme Court case that would allow public nuisance lawsuits against major air polluters.
5. California’s climate law dodges a bullet – Voters kill Prop 23 in November elections
6. EPA clamps down on mountaintop removal coal mining – Looks at the EPA’s crackdown on the coal industry’s practice of tearing off mountain peaks
7. Wind and solar projects make breakthroughs – Including offshore wind and solar projects on public lands
8. Supreme Court reviews genetically modified crops – Looks at the Supreme Court’s first ruling on so-called Frankenfoods
9. EPA’s water transfer exemption remains in force – Conflict over transferring polluted water from one water body to another.
10. U.S. military going green – Looks at how the military is reducing its dependence on fossil fuels

You can learn more about each issue and delve into the debate on their dedicated Environmental Watch List 2011 website.

With only two days left in 2010, I thought “The Impending World Energy Mess” was only fitting for review as we head into 2011. It is also fitting for another reason, it ties nicely into the story I brought you earlier this week, $5 Gas Prices on the Horizon. The authors, Dr. Robert L Hirsch, Dr. Roger H. Bezdek, and Robert M. Wendling, bring you decades of experience in energy from economics to oil to technologies. In the book, they lay out their premise that the most serious energy mess facing the world today is the impending decline in world oil production. It just so happens that it is taking place at the same time energy use is all an all-time high and continues to grow.

The authors write, “The warming signs include the six-year long plateauing of world oil production, the escalation of oil prices, and the analyses of a number of highly trained professionals and competent organizations.”

They authors don’t use the term “peak oil” because world oil production, they say, has been and is likely to stay on the current fluctuating world oil production plateau for a few more years before the onset of production decline.

So what’s the problem you ask? We have hoards of alternatives? According to the authors, the realities of these alternatives are that they are “very costly and insufficient to satisfy our overall energy needs, let alone our liquid fuel needs.” The energy sources they discuss are numerous including biofuels, solar, wind, nuclear, natural gas, hydrogen, electric vehicles, oil shale, coal to liquids, and more. But let’s delve into this deeper using biofuels, more specifically, corn ethanol as an example.
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In a new study released by The Conference Board of Canada and financed by the wind company Vestas Offshore, the development of offshore wind farms could boost Ontario’s economy by $4.8 billion to $5.5 billion a year between 2013-2026. During the same time frame, development could lead to a total of $10 billion in capital investment and operations spending and support around 4,000 jobs during the construction phase.

“Employment and Economic Impacts of Ontario’s Future Offshore Wind Power Industry,” was based on the economics if seven new offshore wind energy projects were developed totaling 2,000 megawatts (MW) by 2026. The Conference Board felt that this number was “conservative compared with market potential.” While there are no offshore wind farms currently operational in North America, there are two in development near Kingston, Ontario.

“An offshore wind industry in Ontario – one that develops enough projects to be sustainable in the longer term – would create both short-term construction employment and permanent green jobs in the operations phase,” said Len Coad, Director, Environment, Energy and Technology Policy, The Conference Board of Canada. “Should development progress as anticipated, it is likely that new industries will develop in the province to service the needs of the growing sector.”

According to IESO, there is 2,600 MW of wind energy capacity expected to be online in Ontario by the end of 2011 with the number growing significantly over the next five years. The organization said that wind energy is well positioned for growth with the implementation of the Green Energy and Green Economy Act of 2009 as well as the Ontario Power Authority’s Feed-in-Tarriff (FIT) program that promotes renewable energy.

When nearly 5,000 South Dakota fourth graders return to school after the holidays, they will be getting some new lesson plans. They will be learning about alternative energy including ethanol, wind and hydroelectricity as well as conservation and other green practices. The lessons have been added to the 2011 “South Dakota Road Trip,” a 13-week virtual tour of the state used in the classrooms to help the students learn about the state’s history.

“South Dakota and the entire Midwest has had a profound impact on our nation’s energy supply, and that impact will grow many times over in the future,” POET CEO Jeff Broin said. “I’m glad that POET can help students learn about that rich history and hope it will inspire some of them to get involved in this exciting field in the future.”

Beginning in January, during each lesson, students will travel across South Dakota learning about significant historical figures, events, industries, and culture. Along the way, they’ll stop at places including a farm, an ethanol plant and a racetrack to learn about the different stages of ethanol production. Students will also stop at a windmill to learn about the evolution of wind energy and the Oahe Dam to learn about hydroelectric power. This is just a sampling of the places the students will go.

There is also a health element in the program.“Students learn about the environment and healthy habits related to the town’s name and history, making it a fun and interesting way to learn about healthy lifestyles,” said Marsha Kucker, owner of Education Resource Center of South Dakota.

The curriculum is being finalized for use in January 2011. The project was developed by the Education Resource Center of South Dakota in partnership with Avera Health. South Dakota State University provided graphic design and programming and POET sponsored the alternative energy sections. If you would like to request a copy of the curriculum or enroll your student, please contact Julia Miller at 605-265-5555 or via email.

The wind industry has gained some momentum as the year comes to a close. Last Friday, President Obama signed into law the tax bill that includes a one-year extension of the 1603 investment tax credit for developing renewable energy sources including wind. Denise Bode, the CEO of the American Wind Energy Association said of the event, “This is a great holiday present for the 85,000 American workers in the wind energy industry, tens of thousands of whom will now be able to get back to work in a sector that has been a bright spot in the recession so far.”

Bode believes that this governmental action will be a signal to investors to put more capital back into the U.S. economy. She anticipates that new orders will be on the rise and with wind power reaching 20 percent of the total in Iowa and at times contributing to 25 percent of total power needs in Texas, Bode sees a “a whole lot more” affordable wind energy to come. “The inclusion of renewable energy in the tax bill is a clear indication of strong bipartisan support for the wind industry, which will make more renewable energy than any other technology for decades,” she said.

Another big win for the industry last week was word that the Federal Energy Regulatory Commission (FERC) approved a proposal by Midwest Independent System Operator (MISO), the company that operates the grid throughout the Midwest, to create a new cost allocation policy, or “regime” to pay for transmission upgrades. These upgrades are needed to develop transmission infrastructure, improve reliability, reduce electric bills, foster economic development, and provide consumers access to wind energy and other forms of renewable energy.

The regime creates a new category of transmission projects called Multi-Value Projects (MVPs). The MVP concept is based on the recognition of the numerous, widely shared benefits provided by enhanced transmission infrastructure and, accordingly, spreads the costs for these lines across the MISO footprint.

“We applaud the Commission’s decision to approve the MISO proposal with respect to Multi-Value Projects, as it represents a significant improvement over the existing cost allocation proposal,” said AWEA’s Senior Vice-President for Public Policy Rob Gramlich. “With this policy in place, the Midwest is ready to step up to the plate and support wind development and unlock the associated manufacturing and supply chain jobs throughout the region. The proposed mechanism would spread the costs of new transmission infrastructure to the beneficiaries, allowing the region to build a robust transmission grid that will bring reliability and economic benefits as well as supporting state, regional and national policy goals. This policy is a tremendous victory for the region’s consumers, environment, and economy.”

The solar energy industry has a reason to smile this morning as the Congress passed the tax bill with amazing speed late last night. Today, the Solar Energy Industries Association’s (SEIA) President and CEO Rhone Resch said of the passage of the one-year extension of the Treasury Section 1603 program, “After a year’s worth of effort, we are now close to getting the 1603 Treasury Grant Program extended. I’d particularly like to thank Representatives Holt, Blumenauer and Thompson for providing leadership and vision in support of the renewable energy industry and the 1603 program.” Resch is calling for swift action from President Obama in signing the bill.

SEIA has been a vocal advocate of the amount of jobs that the program has successfully created in all 50 states for blue collar workers who have been hit hard by the worst recession in 80 years. Fortunately the growth of industries like solar are putting them back to work in better paying green jobs. A major component of this bill is the extension of unemployment benefits for those millions who remain out of work.

While the solar and wind industries have been watching the progress of the incentives closely in D.C. neither industry has been saying much and are waiting until President Obama signs the bill which is expected soon. Once this happens, the bloggers of DomesticFuel will bring you the stories.

According to an analysis performed by Battelle Memorial Institute and R&D Magazine, the global research and development (R&D) outlook for 2011 will be more stable and positive and is emerging from one of the worst recession eras in recent times. With this in mind, R&D managers are prepared to see moderate, but sustainable growth and more global competition for resources and market share.

In more tangible terms, R&D spending is expected to increase by 3.6 percent in 2011 to $1.2 trillion; however, in the U.S. this number is only expected to climb by 2.4 percent over the 2010 numbers reaching just over $405 billion in 2011. Regardless of a number that appears to be minor, the U.S. is positioned to be the dominate region for research and investment.

When you hone in on energy R&D, the report notes that in this category, overall R&D budgets are low compared to the percent of R&D versus revenues of companies in other categories. The companies spending the most in R&D are: Exxon Mobil, Chevron, ConocoPhillips, USEC, First Solar, Cree, McDermott International, A123, SunPower, and FuelCell Energy.

The authors write, “Unlike defense, outcomes and benefits from federal energy research are realized largely in the private sector. Moreover, DOE’s research investment fills a critical gap in private sector innovation capacity. The relatively low level of R&D spending in the regulated, capital-intensive energy sector is unlikely to achieve the affordable, abundant, sustainable, secure energy supply that will be necessary for the U.S. to maintain global economic leadership in this century.”

“At the same time, public-private collaboration and commercialization are necessary to deploy energy innovation at scale, since the government controls little energy production or distribution capacity (except fossil reserves on federal lands).”

The conclusion in this sector by the report authors is that the private sector lacks the full scope of resources to accomplish the necessary research that is required to meet the demand for sustainable and affordable energy. They also note that the government lacks the means to deploy energy innovation at scale to meet policy goals and stresses that collaboration and commercialization are essential to see success.

You can download a copy of the 2011 Global Funding R&D Forecast here.