Tag Archives: renewables

RMI - Rocky Mountain Institute

It’s the IRA’s First Birthday. Here Are Five Areas Where Progress Is Piling Up.

The Inflation Reduction Act promised an unprecedented wave of clean energy investment. One year in, here’s where we’re seeing progress.

Originally published on August 16, 2023 at RMI.org: https://rmi.org/its-the-iras-first-birthday-here-are-five-areas-where-progress-is-piling-up/

By  Hannah Perkins,  Adam Aston,  Vindhya Tripathi

“Unprecedented.”  “A landmark.” “The Super Bowl of clean energy.”

Those are just a few of the superlatives that hit the headlines when the Inflation Reduction Act (IRA) was signed into law on August 16, 2022.

The act’s passage came as a surprise both politically — emphasizing lower energy costs helped the bill clear years of oppositional brinksmanship — and for its unprecedented scale. Toward the goal of shifting the US grid to 80 percent clean electricity and cutting climate pollution by 40 percent by 2030, the act mobilized an estimated $370 billion in federal incentives.

A year in, the early fanfare has resolved into unprecedented progress. Twelve months after passage, the IRA’s impact — in industrial investment, new jobs, and other economic activity — already exceeds early estimates. To date, we have seen:

  • $278 billion announced in new private clean energy investments.
  • Projects announced accounting for 170,000 new jobs.
  • The availability of $70 billion was announced in grants, rebates, and other non-loan funding.

And while politics could yet alter its trajectory, the impact to date has been weighted towards traditionally Republican-leaning regions, a bias which may ensure its longevity in years to come. Given the rapid uptake, Goldman Sachs earlier this year upped their estimate of public IRA investment over the next decade to more than $1 trillion, with private sector spending potentially a multiple of that.

By design, incentives are drawing this investment widely across the United States, with a focus on disadvantaged, low-income, and energy communities. RMI estimates that, if they take full advantage of the IRA and adopt clean energy at the pace and scale needed to meet national climate targets, by 2030, each state could see:

  • Cumulative investment of from $1 billion (for smaller states) up to $130 billion (for the largest beneficiaries).
  • Per capita new investment of $1,500 to $12,000.
  • The creation of 2,000 to 100,000 new jobs.
  • Lower healthcare costs and impacts by avoiding 4,000 to 300,000 negative health outcomes avoided.

On the ground, IRA incentives have already translated into a rush of announcements and projects spanning regions and industries, including both legacy and cleantech sectors. On the advent of the IRA’s first birthday, here’s a rundown highlighting the breadth of this progress.

Manufacturing boom

Nourished by the IRA, manufacturing announcements have mushroomed across the country. While heavy on electric vehicles (EVs) and batteries, the greenfield factories and upgrades also include wind and solar sites, along with semiconductors, electronics, and others. The new capacity promises to boost US energy security and independence by reshoring key supply chains and strengthening US competitiveness as global leader in clean energy technologies. To date, 272 new clean energy projects have been announced, including:

  • 91 new battery manufacturing sites.
  • 65 new or expanded EV manufacturing facilities.
  • 84 wind and solar manufacturing announcements.
Electrifying transportation

Globally, sales of internal combustion vehicles peaked in 2017, and are now in long-term decline, according to Bloomberg NEF. As older cars and trucks are retired, the world’s combustion vehicle fleet will start to shrink after 2025. In the United States, the IRA is supercharging this shift, with incentives that span from electric school buses to battery factories and new charging infrastructure:

  • For consumers, the IRA offers rebates on new and used electric vehicles, peaking at $7,500. Juiced by this incentive, US sales of new EV passenger cars are expected to surge by 50 percent in 2023 to over 1.5 million, the White House estimates. The incentives will help heavier vehicle classes electrify more quickly too. By 2032, RMI estimates that the share of EV sales using IRA credits will be close to 100 percent for Class 1–3 commercial fleets, and 84 percent for medium- and heavy-duty trucks.
  • To supply incentive-amped demand, global automakers such as GM and Ford and their battery partners are leveraging the act’s $45-per-kilowatt battery production tax credit to turbocharge construction of new plants across a “battery belt,” stretching from Michigan to Georgia (see map, in above section). Increased output of US-made batteries is, in turn, helping carmakers boost output of popular EVs, such as Ford’s F-150 Lighting electric pickup (image, top of page).
  • IRA also provides funding for the federal government to lead by example. The US Postal Service(USPS) received $3 billion for clean vehicles. And starting in 2026 the post office will buy only EVs.
  • RMI analysis shows IRA credits will help electric passenger cars and light-duty trucks achieve total cost of ownership (TCO) parity with ICE vehicles between 2023 and 2025. Without the IRA credits, EVs would have reached TCO parity with ICE vehicles between 2024 and 2027.
Total Cost of Ownership parity for EVs and ICE passenger cars chart
Greening buildings

Buildings account for around a third of US emissions, making it one of our largest, most complex sectors to decarbonize given the age, diversity, and costs to retrofit America’s stock of millions of buildings. The IRA is tackling this challenge on multiple fronts:

  • Guidance on funding for the Home Energy Rebate programs is being rolled out and has generous carve-outs for low-income households. States are currently designing programs based on this guidance to help consumers save money and live more comfortably. The first state programs could be rolled out as early as the end of this year.
  • Appliance efficiency standard programs like CEE and ENERGY STAR, which some IRA incentive programs rely upon, continue to align with decarbonization efforts that ensure the most efficient HVAC systems and appliances are installed in homes across the country.
  • New HUD programs prioritize healthy, efficient, electrified retrofits for affordable housing HVAC and appliances; more than $800 million is available and funding from these programs can’t go towards in-unit fossil fuel appliances.
  • The General Services Administration (GSA) — which oversees the federal government’s vast portfolio of buildings and properties — is using $1 billion of IRA funding to shift federal facilities towards electrification, with near-term plans to electrify over 100 buildings, including one of their largest, the Ronald Reagan Building in DC.
Decarbonizing electricity

Clean electricity is essential to decarbonize the wider US economy, whether to charge EVs and power greening buildings (see above), or to decarbonize industry (below). The shift is advancing steadily. In the first five months of 2023, wind and solar produced more power than coal, a first for the US. The IRA is continuing this shift:

  • Commercial solar is on pace to grow by 12 percent in 2023, and over the next seven years, we expect twice as much wind, solar, and battery deployment as there would have been absent the IRA.
  • The IRA-linked credits reinforce renewable powers’ long-standing price edge over gas- and coal-fired generation, an advantage which endures despite some demand-led inflation in the price for new solar and wind.
  • With IRA funding, USDA is making the largest investment in rural electrification since the New Deal — nearly $11 billion for rural electric co-ops. In particular, the Empowering Rural America (New ERA) program gives rural electric cooperatives an unprecedented opportunity to modernize aging grid infrastructure to maintain reliability, lowering costs for members and reduce emissions.
  • Michigan’s largest investor-owned utility, DTE, filed the first resource plan in the country that attempts to demonstrate the IRA’s intended changes to the economics of clean energy, projecting $500 million in savings for customers over 20 years. The proposal includes building 15 gigawatts (GW) of new solar and wind, improving DTE’s exploration of battery pilots, and moving up the retirement of the Monroe Power Plant – the fourth largest coal plant in the US.
  • Energy Infrastructure Reinvestment announced funding for solar and storage in Puerto Rico, replacing a retired coal power plant.
Transforming industry

Steel, cement, petrochemicals, and other hard-to-abate heavy industries pose a special challenge to decarbonize. For now, many rely on raw materials and/or high temperatures that only fossil fuels can affordably deliver at scale. The IRA aims to scale up affordable alternatives — such as hydrogen which, if implemented cleanly, offers a clean alternative — along with greener raw materials and recycling options:

  • Incentives for industry and hydrogen have had a big impact on economic analyses. Many projects have been announced, focused on advancing US global competitiveness. Policies are meant to drive applications and interest in first-of-a-kind projects and hubs demonstrating industrial decarbonization opportunities.
  • From the IRA and Bipartisan Infrastructure Law, the Office of Clean Energy Demonstrations (OCED) has been allocated $6.3 billion for Industrial Demo Grants. OCED funds will de-risk technologies that are not yet demonstrated on a commercial scale.
  • A range of tax credits is being clarified that will spark investment. For hydrogen, guidance on the Hydrogen Production Tax Credit (45V) is forthcoming. And the  Advanced Manufacturing Production Credit (45X) will unlock a major buildout of the lithium-ion battery supply chain, stationary storage manufacturing, and solar and wind supply chains.
  • Likewise, guidance has been released and the first round of applications reviewed for the Advanced Energy Project Credit (48C), which offers $4 billion for projects that expand clean energy manufacturing and recycling, expand critical minerals refining, processing, and recycling, and reduce emissions at industrial facilities. The U.S. Energy Department’s roster of funding opportunities, among other things, prioritizes heat pump manufacturing, signaling a clear shift towards supporting beneficial electrification.
Finance

The act has also unlocked financing via the reform of tax credits and innovative financing that prioritizes climate-friendly investment in historically disadvantaged communities:

  • For the first time, the IRA widens access to investment and production tax credits (ITCs and PTCs) for non-taxable entities, such as states, local governments, coops, and non-profits that in the past had little or no way to use the credits to finance new renewables. Historically, constrained demand for tax credits has limited the scale of ITC and PTC financing. For instance, RMI analysis of 2019 financial disclosures found that US investor-owned utilities had aggregate tax liabilities sufficient to build less than 4 GW of new solar and storage per year, barely enough capacity to replace one or two coal plants. Later this year, Treasury will release final guidance for organizations to tap into these direct pay and transferability options.
  • The Notices of Funding Opportunity (NOFOR) for the Greenhouse Gas Reduction Fund’s three grant competitions are now live, with deadlines in September and October. These grants will be disbursed in 2024, capitalizing a national network of clean energy financiers who will be focused on mobilizing private capital at scale to fund emissions-reducing projects, especially in low-income and historically disadvantaged communities.
Looking ahead

The IRA is not only the most ambitious climate bill in US history. It is one of the most ambitious and complex efforts at economic and industrial reinvestment ever. By these standards, the progress the act has already made is enormous, but years of work — and meaningful obstacles — remain to fully deploy the IRA at the pace and scale needed to reach climate targets.

Chief among these obstacles is permitting. As project timelines stretch into the years — whether to connect renewables projects onto the grid, or site new critical mining and industrial facilities — streamlining the thicket of overlapping regulatory and administrative approvals is emerging as a make-or-break challenge for the US energy transition.

Despite challenges in implementation, the hundreds of announced projects and hundreds of billions of dollars in investment show the energy transition is out of the starting gate and gaining speed.

The challenge is increasingly shifting to subnational players — such as states and cities as well as businesses and non-profits — to mobilize the funding the IRA has unlocked. Ultimately, the IRA’s full potential will be limited only by our own ambition to realize a clean energy future.

GreenBiz

PG&E is first utility client for Mainspring’s novel ‘linear generator’ | GreenBiz

Mainspring technicians workl the assembly line to build linear generators.

Mainspring Energy was founded in 2010 by a trio of Stanford Ph.D.s, born not out of the university’s legendary coding schools but rather from its thermodynamics lab. Back at a time when the startup world was growing wary of cleantech, the team targeted a tough task: to drive down emissions by reinventing one of the grid’s most fundamental technologies. 

Their target? The nearly 200-year-old design of the electric generator. Where practically all mechanical generators spin in a circle, relying on rotating magnets to generate current, Mainspring engineered a design that moves back and forth in a line. 

It’s a simple physical reorientation with potentially dramatic impact. The resulting “linear generator” delivers efficiencies that co-founder and chief executive Shannon Miller says produce electricity more cleanly, at a lower cost and more flexibly than can a multi-billion-dollar market of incumbents, including turbines, reciprocating engines and fuel cells.

And after a decade of development, the Menlo Park (Calif.) firm’s linear generator is scaling into commercial production at a time of sharply growing demand for flexible options that can support the grid sustainably. “Extreme weather events and the rise of electrification are driving increasing demands on the electric grid for affordable resiliency,” Miller said. “At the same time, we need to be moving rapidly toward a net-zero-carbon grid.” 

A utility milestone

Following a handful of corporate and institutional deployments beginning in 2020, Mainspring’s first utility project was announced this week in Angwin, California. 

The town is a crucial node on Pacific Gas & Electric’s network in Napa County, a microgrid distribution point where a generator is positioned to stabilize the daily ebbs and flows of power, as well as to supply downstream customers if transmission into the area goes down. And during California’s epic drought and record wildfire season, that’s been happening more often, as PG&E resorts to public safety power shutoff (PSPS) events to avoid sparking new fires.  

Occupying a footprint about the size of a parking space, the 240-kilowatt linear generator will initially run in tandem with a conventional diesel reciprocating engine, while PG&E commissions the unit. Multiple Mainspring units can be paired to increase output. In time, Miller expects the linear generator to take over fully, as it does things the diesel cannot.

For example, thanks to precise power electronics, the Mainspring unit can ramp up and down almost instantaneously, to better match microsecond grid fluctuations. And as renewables multiply, power supplies are growing more variable and less stable overall, so increased responsiveness is good for the grid. 

And its low emissions should be good for nearby communities. As utilities have increased their reliance on portable diesel generators to stabilize the grid, rising air pollution is hitting nearby populations, often in disadvantaged communities. 

Compared with the nearby diesel engine, Mainspring’s generator cuts nitrogen oxide (NOx) emissions by more than 90 percent and lowers particulate pollutants proportionately. Fueled by biogas, it emits virtually no carbon. And in the future, the unit can run on practically any gaseous fuel, Miller said, including emerging zero-carbon fuels such as renewable propane or green hydrogen.  

The Mainspring linear generator’s core assembly.

How it works

Mainspring’s performance edge arises from the architecture of its design, combined with the benefits of its state-of-the-art power electronics, an area of technology that, thanks to the scaling of renewables, has advanced rapidly during Mainspring’s decade of development. “Those systems allow us to do all the control, to achieve fuel flexibility, dispatchability and efficiency,” Miller said.

Physically, the design reorients familiar elements of an electric generator — magnets moving through loops of copper wire. Rather than spinning in circular motion like most generators, in Mainspring’s design, the magnets slide to and fro along a horizontal axis with precision that varies by less than the width of a piece of paper.

When a mix of fuel and air enters the central reaction zone, it is not combusted. Rather, via a low-temperature reaction, pressure directly converts thermochemical energy into motion which pushes two pistons — Mainspring calls them oscillators — outward from the center. 

Power is produced as magnets mounted on the oscillators pass through copper coils embedded in the shell.

When the oscillators reach the limit of their travel, they compress air at the far end of the cylinder, creating a spring-like pressure that rebounds them back toward the center, generating more power on the return journey.

With only two moving parts, Mainspring’s design can generate more power per unit of fuel than other mechanical generators. Miller said. At the same time, its simplicity incurs lower maintenance and material costs. Unlike turbines or engines, its innovative air bearing system needs no oil or routine parts replacement. And unlike fuel cells, no costly catalysts need be replaced. 

By operating at relatively low heat, the design virtually eliminates NOx emissions and other harmful byproducts of combustion. Taken together, the design advances “can deliver the high efficiency and low emissions of fuel cells with the low cost and dispatchability of engines and microturbines,” Miller said. 

Mainspring linear generator at a test site (not the PG&E implementation).

Financing growth

This bundle of advantages has attracted a wave of blue chip investors. In May, Mainspring capped a Series D round of $95 million, led by Fine Structure Ventures (previously Devonshire Investors), the private equity firm affiliated with Fidelity Investments’ parent company FMR, along with support from 40 North Ventures, Chevron Technology Ventures and Princeville Capital. 

The D round brings to $228 million the total raised by the startup to date, building on earlier commitments from Khosla Ventures in Round A and Bill Gates in Round B. The Series C included a mix of strategic energy industry partners: AEP, Centrica, ClearSky Power & Technology and Equinor. 

In March, Mainspring announced a partnership with U.S. utility and renewables giant NextEra Energy — the world’s largest private-sector generator of renewable energy. 

Via its business services arm NextEra Energy Resources, the deal commits $150 million to help Mainspring’s customers buy, finance and deploy the new generators, principally via arrangements like power purchase agreements (PPAs), where customers need not buy the asset outright and can instead pay recurring fees. 

NextEra also offers the startup a strong partner with which to scale up green hydrogen. In July 2020, NextEra announced a pilot green hydrogen project with Florida Power & Light. For Mainspring, NextEra’s expertise in deploying emerging renewables into the grid offers a leg up and a fast track to partner with new clients. “Our strategy is find partners that understand where the grid is going and can really help us scale,” said Miller.  

Mainspring’s two publicly disclosed customers, PG&E and Kroger, both opted for PPA-style financing via NextEra. For Kroger, the deal offered a way to improve the reliability of energy supply at one of its Los Angeles-area stores, while cutting costs and lowering emissions — all with minimal upfront commitment.  ​​

“We’re not spending capital on this. That’s for other companies to do. We’re not maintaining it. That’s for other companies to do,” said Denis George, energy manager at The Kroger Co. “That puts us on a very equivalent basis to buying power from the utility.” 

The grocer is facing an increasingly common bind: the squeeze of rising costs for grid-supplied electricity along with pressure to cut emissions from onsite power sources. 

“We’ve already done practically everything we can on efficiency,” George said. The linear generator helps Kroger improve sustainability by moving towards its enterprise-wide goal of cutting greenhouse gas emissions by 30 percent.

Reliability vs. climate 

Kroger’s priorities mirror those of a growing number of big energy users for whom decarbonization goals are running up against the challenges of climate change and grid instability. 

Along with California, much of the west is in a similar predicament, as rising temperatures are driving electricity demand, just as drought is diminishing hydropower output and fire is threatening major transmission lines. 

The pressure is pushing governments, utilities and companies alike to boost spending on backup power, even when it may not meet green goals. In July, despite supporting some of the nation’s most ambitious decarbonization targets, California’s governor declared an emergency, a move that permitted rapid deployment of fossil-fueled backup solutions and sped the rollout of new clean energy projects. 

The following month, the state energy commission OK’d five temporary gas-fired generators to reduce blackout risks. As GreenBiz’s Sarah Golden noted in her weekly newsletter, “[California] officials are faced with the difficult choice of alleviating suffering today or curbing catastrophe tomorrow.” 

Mainspring offers a way to meet both priorities. Near term, it can responsively generate low-emissions, affordable energy. And into the future, its fuel flexibility enables it to handle tomorrow’s clean fuels, Miller said. Compared with a decade ago, “The tailwinds for us keep getting stronger.”

Originally published at Greenbiz.com: https://www.greenbiz.com/article/pge-first-utility-client-mainsprings-novel-linear-generator

GreenBiz

Jigar Shah Is Making the DOE’s loans office mighty again. Here’s how | GreenBiz

By Adam Aston

Maybe you first knew him as chief executive of the Carbon War Room or as the co-founder of Generate Capital. Or maybe you came across him as a LinkedIn mega-influencer, GreenBiz contributor or even as a former co-host of The Energy Gang podcast — he’s the one with the ready laugh and the sharp takes.

Chances are, you already know Jigar Shah. He’s spent the past two decades making a compelling case for the climate-fixing, profit-generating potential of clean energy, all the while batting down ill-informed skeptics and bad business models.

Now, as part of the Biden administration’s effort to jump-start economy-wide decarbonization, Shah has been granted more capital — and a bigger platform — than he might ever have thought possible. 

The total: $46 billion, according to Shah. That’s the lending capacity he can mobilize at the Department of Energy’s Loan Programs Office (LPO), which he was appointed to oversee in March. 

To make the “once-mighty” office — as his boss, Energy Secretary Jennifer Granholm, put it — mighty again, Shah faces big challenges. The office has been all but dormant for much of the past decade, due in part to Trump-era deprioritization but also hampered by a lingering reputation for bureaucratic dysfunction. 

Barely three months into his new role, Shah joined this week’s VERGE Electrify virtual event to kick off the conference and share his plans to get the loans flowing once again, in a keynote conversation with GreenBiz Group’s Senior Transportation Analyst Katie Fehrenbacher, who co-chaired the event. 

Re-booting the LPO. Following a decade of dormancy, the office has moved into a fast-forward mode, fueled by Biden’s climate agenda and Shah’s contacts — he’s reached out to over 100 CEOs since he joined. “People are starting to realize that we’re open for business,” he said. “If we got maybe three applications all of last year, we’ve gotten three a week recently. That comes from people trusting the program will be there for them.” 

A catalytic role. Deep as LPO’s loan pool may be, Shah sees his office’s role as narrowly targeted — providing catalytic funding at a key stage, before companies are able to access commercial debt. Consider the example of nuclear energy innovators such as Oklo, NuScale or Holtect. “Small modular reactors are going to be built across the country,” said Shah. But they’re not likely to be able to raise commercial debt until the technology is de-risked. Shah sees LPO’s role as building a bridge to bankability: “Then, we’re done.”

Streamlining the process. By pushing an easier, more user-friendly approach, Shah is tackling head-on the office’s lingering reputation for being too costly, too complex and too long-odds. “We’ve dropped all the application fees,” he said. “And we don’t charge any of the other fees that we used to until you’ve received the loan and started to draw it down.”

Energizing climate justice. Shah sees a space where the LPO has the potential to both modernize the grid and benefit historically disenfranchised communities. Virtual power plants offer an opportunity to advance grid-scale energy services while helping cities and communities upgrade energy infrastructure and cut energy costs. That could mean building solar with storage on low-income housing or affordably financing grid-responsive smart air conditioners or water heaters. Models such as these promise to “not only get essential appliances affordably into the hands of people who need them,” said Shah, “you’re also able to get higher utilization rates from the existing distribution infrastructure.” 

Swings at bat. To the vexing question of how to pick winners from among emerging technologies, Shah brings the perspective of a seasoned climate tech entrepreneur. “We have to take a lot of swings at bat,” said Shah, “and we are going to have misses.” But misses — with a nod to the failure of Solyndra, a Obama-era solar startup — can be offset by towering successes, such as Tesla, to which the DOE lent $465 million in 2010, a moment when the then-nascent EV maker was far closer to failure than world domination. Today, it’s the world’s most valuable carmaker and has sparked a competitive race to electrify the automotive industry. “That’s what the president has talked about,” said Shah. “We want to make sure from a technology standpoint, we’re leading the pack worldwide.”

Tips for loan candidates. “Don’t be scared! Come in early,” advised Shah. To be sure: There will be many forms, but Shah’s team is working to ensure that the process is easier to navigate than before. Over the past month, the office has added more than 10 people to escort applicants through the loan process. “We want every person who thinks they have a good idea that deserves funding to have a shot.”

If you’re one of those people, the initial review process takes six weeks, typically. Once qualified, getting the approval stage takes four to five months of diligence.

By that timeline, Shah’s office will announce the first batch of new loans under the Biden administration by autumn, if not sooner. 

Published May 28, 2021 at https://www.greenbiz.com/article/how-jigar-shah-sees-making-energy-departments-loans-office-mighty-again.

CPP Investments, White papers

Hydrogen’s new moment | CPP Investments

A white paper on behalf of Thinking Ahead, a thought leadership platform at CPP Investments, a Canadian pension fund.

Challenge: Survey hydrogen’s enormous potential role in the energy transition across multiple sectors for an audience of non-energy experts.

Solution: A short white paper overviewing fast developing news in the hydrogen space, offset by classic data visualizations: call outs, tables and explainers for emphasis.

My roles: research, writing, data composition, chart design/recommendation, writing, copy editing, design/visual editing.

View the full report at CPP Investments or download here:

2021-03 Hydrogen’s new moment Download

GreenBiz

Why wholesale POWER markets matter SO MUCH to big ENERGY buyers | GreenBiz

When a big brand such as Google, General Motors or Walmart unveils an eye-popping commitment to use more renewable energy, the news usually gets attention. And as these pledges have multiplied in number and scale, corporate energy buyers are having impacts beyond the headlines. They’re reshaping larger U.S. power trends by pulling investment into renewables.

Already, roughly half of the Fortune 500 have climate and clean energy goals; over 250 large companies have committed to using 100 percent renewable energy. Corporate buyers have collectively deployed over 23 gigawatts (GW) of new renewable energy over the past five years, according to the Renewable Energy Buyers Alliance (REBA). Over the next decade, renewable energy demand from Fortune 1000 companies could add 85 GW.

To speed progress, REBA and its membership of 200-plus energy buyers and sellers have launched a set of guiding principles to standardize wholesale electricity markets across the U.S. 

By making it easier for big power buyers to synchronize terms with utilities and project developers, the principles should stimulate investment, drive down renewable energy prices and, the alliance hopes, boost market competition while growing supply. REBA’s goal is to catalyze 60 GW of new renewable energy projects over the next five years.

Wholesale power markets already serve most U.S. consumers. The largest of these — such as the middle-Atlantic’s PJM or MISO, which spans Louisiana to Minnesota — straddle multiple states and coordinate the intricate flow of power from thousands of power plants, across millions of miles of wires, to tens of millions of customers. Today, roughly 80 percent of corporate power purchase agreements take place within existing wholesale energy markets, according to REBA. 

The principles are significant because American businesses are making wholesale market design a central priority not just to meet their own clean energy goals but also to shape the market structures …

Yet large swaths of the economy remain outside these regions. So standardizing rules for all the participants and extending wholesale markets across the entire country could enable even more deals. 

In a document released during a breakout session at last week’s VERGE 20 event, REBA laid out key principles to organize extant and new wholesale markets. According to this roadmap, well-functioning wholesale energy markets are defined by three core principles which should:

  • Unlock wholesale market competition to catalyze clean energy by ensuring a level playing field, large energy buyer participation, and services that provide actual value for energy customers.
  • Safeguard market integrity through independent and responsive governance structures, transparency and broad stakeholder engagement and representation.
  • Design to scale to the future by ensuring operational scale, customer-oriented options to meet decarbonization goals, alignment with federal and state public policy and predictable investment decisions.

Improving wholesale markets

“The principles are significant because American businesses are making wholesale market design a central priority not just to meet their own clean energy goals but also to shape the market structures that are critical to help decarbonize the entire power most affordably, for everyone,” said Bryn Baker, director of policy innovation at REBA.

Operators should ensure customers have pathways to engage in decision-making, which is not always the case today, Baker explained. “Energy buyers can and want to have a seat at the table. It’s going to be really important that a broad cross-section of customer voices are present in these markets.” 

From the perspective of a big buyer such as GM, an effective wholesale market can capture supply from a larger geographical area. This can help optimize for price, by buying wind one day in one region and switching to solar in another area on another day. 

Diversity of sources reinforces grid resiliency, said Rob Threlkeld, GM’s global manager of sustainable energy, supply and reliability. In one region, solar power may be surging, while in another wind output is waning.

“A wholesale market allows you to really match that generation with the load at the lowest cost possible,” Threlkeld said.A wholesale market allows you to really match that generation with the load at the lowest cost possible.

“As we think about the wholesale markets, we want to drive toward a clean and lean grid,” Threlkeld added. “We’re moving from big, centralized plants to more decentralized operations … It allows us to optimize the grid itself, matching generation with load.”

GM has accelerated its commitment to renewable energy, aiming to power 100 percent of U.S. facilities by 2030 and global operations by 2040. Wholesale markets can help, Threlkeld said, by hastening the deployment and procurement of cost-effective clean energy. 

Energy consumers take the lead

REBA’s efforts reflect wider trends in the energy industry, where households and big businesses alike are pushing energy companies to respond to their needs. “The conversation is shifting from a production focus to one where consumers are driving the next wave. It’s about what customers want and how they’re consuming power,” said Miranda Ballantine, REBA’s chief executive. 

Localization of renewable energy is also guiding REBA’s agenda. In the past, companies had little choice but to contract renewable capacity from far-off markets. Today, more are seeking to procure renewable energy near their facilities on the same grid they operate. “More companies are saying that they want to time match those renewable electrons with their consumption,” Ballantine said. 

Google recently unveiled plans that highlight the challenges corporate energy buyers face in upgrading their renewables sourcing from such a first-generation approach, where they may still use local fossil-generated energy but net that out against purchases elsewhere. In April, the internet goliath unveiled complex software-based plans to dynamically match its actual minute-by-minute consumption with low-carbon electricity supplies by region, a technical challenge no other large company has yet solved.

For other companies, simply accessing regional grids with sufficient low-carbon energy remains a challenge. Somewhere between 30 and 40 percent of corporate assets are not in the kinds of regional transmission organizations (RTOs) that can draw and balance power from a wider region, Ballentine said. 

“Those customers have very little opportunity in those markets to actually make choices to drive zero-carbon electrons to power their facilities,” Ballantine added. Absent organized wholesale markets, companies can’t really use their demand signals to drive change in the type of electricity they’re consuming. 

—

Originally published at Greenbiz.com.

Global CCS Institute

Looking Ahead: CCS’ Prospects Under Ernest Moniz, Energy Secretary Nominee | Global CCS Institute

Ernest Moniz, President Obama’s newly nominated Energy Secretary, shares much with his predecessor, Steven Chu, outgoing head of the Department of Energy (DOE) and who is returning to an academic chair at Stanford University. Both men are prominent academic physicists, with long track records of advancing energy technology.

Chu proved to be a vocal advocate for clean energy technologies, especially in the realms of renewables and transportation, funneling billions in stimulus dollars into early stage R&D through DARPA-e and buoying mid-stage companies such as Tesla with federal loans. Under Chu’s watch, carbon capture and storage (CCS) remained a priority, with efforts to press ahead with FutureGen 2.0, but lacked the urgency that many stakeholders wanted to see.

Assuming a quick Senate approval—Moniz is widely regarded to face a relatively easy confirmation—so what’s in store for CCS under a Moniz-led DOE? On the downside, Moniz takes charge in a period of ever-tightening fiscal policy, so will all but certainly have less public money to deploy than did Chu.

If the conditions of the recent sequester hold, the budget for the DOE’s Fossil R&D program—under which FutureGen and other carbon capture programs are funded—will be cut by 5 per cent, or US$25 million.

On the upside, Moniz enters his new post with far more experience in rough-and-tumble Beltway tactics than did Chu. Moniz served in the second term of President Clinton’s cabinet, first as Under Secretary of Energy, and later as Associate Director for Science in the Office of Science and Technology. Moniz has frequently testified before Congress, as well.

In terms of CCS, if past is precedent, there’s reason to be hopeful, maybe even a little optimistic.

I spent some time conducting some research to map out Moniz’ work and statements on CCS. Here’s what I found. If you have other examples, please comment and add more in the comments.

As Tamar Hallerman notes at GHG Monitor, Moniz has co-authored several high-profile works on energy technology and policy in which carbon is a central issue. In The Future of Coal (2007, MIT Energy Initiative) CCS is addressed front and center, vital to extending coal’s tenure in an environmentally tolerable way. The report formally recommends both a carbon price and that the Energy Dept. alter practices in its Fossil R&D regime to accelerate the development of CCS. Retrofitting of Coal-Fired Power Plants for CO2 Emissions Reductions (2009, MIT Energy Initiative) offers far more detail on these issues. In the Summary for Policy Makers section which Moniz co-authored, he makes a detailed case for increased federal emphasis on CCS. A few quotes (emphasis added):

“The US Government must move expeditiously to large-scale, properly instrumented, sustained demonstration of CO2 sequestration, with the goal of providing a stable regulatory framework for commercial operation.”

“Real world” retrofit decisions will be taken only after evaluation of numerous site-specific factors.

CO2 capture cost reduction is important.

A robust US post-combustion capture/oxy-combustion/ultra-supercritical plant R&D effort requires about US$1 [billion per] year for the next decade.

The Federal Government should dramatically expand the scale and scope for utility-scale commercial viability demonstration of advanced coal conversion plants with CO2 capture.

The program should specifically include demonstration of retrofit and rebuild options for existing coal power plants. New government management approaches with greater flexibility and new government funding approaches with greater certainty are a prerequisite for an effective program.

Time is of the essence.

About a year ago, Moniz sat down with The Energy Switch Project to document his views across the full range of conventional and renewable energies, and related technologies. I’ve pasted below two out-takes, where he comments on coal, CCS and carbon pricing.

In the video above, Moniz makes the following statements (abridged transcript):“Coal of course is a very widely used fuel, particularly for the power sector, with the US China and India combined using about 60 per cent of the world’s coal. So if we’re going forward particularly with carbon control in the future, we simply have to figure out a way to employ coal.

The answer has to be then for a serious solution: the ability to capture CO2 and sequester it underground. The problem right now is cost. Today we would probably be adding six, seven, eight cents per kilowatt-hour to electricity produced by coal… For a brand new coal plant, we’re probably talking that’s on top of six to seven cents. So let’s call it a doubling of the cost at the plant of the production of electricity.

We might or might not be willing to pay that in the United States, but it is very difficult to understand China and India being willing to pay this kind of a premium.

Do I believe today we can start safely injecting billions of tons into an appropriate reservoir? Absolutely. That’s a different statement however to do with 30, 40, or 50 years, however, and I think those things will work out as we do it.

The other near-term issue is that we really have very little idea as to how to regulate, how to assign liability [for CCS]. The EPA is in fact working on this, but certainly it cannot be based on the old types of regulatory structures put in place for water injection.”

From the same interview, he also comments on carbon pricing, saying:

“Certainly it will never be cheaper to capture and store CO2 than it is to release it into the atmosphere so the reason we’re doing it in fact is because carbon will have a price and ultimately it has to be cheaper to capture and store it than to release it and pay a price.

If we start really squeezing down on carbon dioxide over the next two decades, that [price] could double, it could eventually triple.

I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push towards efficiency, it brings along with a push towards clean technologies in a conventional pollution sense. It brings along with it a push towards security. After all, the security issues revolve around carbon-bearing fuels.

Now, I think it is very important that any funds associated with that be recycled efficiently to productive uses and to address distributional questions because some of the poor may bet hit harder. There’s a lot of work to do, but in the end, if you take one simple thing, that’s the direction I think we need to go in.”

You can check out a continuous stream of Moniz’ full 22-minute interview on Vimeo, or pick and choose Moniz’ comments on a single topic, in short 1-2 minute segments, the interview is conveniently split into shorts by topic.

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Check out the original post here:

http://www.globalccsinstitute.com/insights/authors/adamaston/2013/03/19/ccs%E2%80%99-prospects-under-energy-secretary-nominee-ernest-moniz

NRDC OnEarth

Meet the Change Makers: How UPS Delivers Big Energy Savings | OnEarth

For UPS, the world’s largest package delivery company, no time of year is more challenging than the holiday season. This year, the Atlanta-based company predicts the surge of packages it handles between Thanksgiving and Christmas will exceed half a billion. That tidal wave will peak on December 20 when, on a single day, some 28 million cardboard boxes will be loaded into UPS’s iconic big brown trucks to be delivered, at a rate of roughly 300 per second, to homes and businesses around the world.

The challenge of getting those packages where they need to be using the least amount of energy possible falls to Scott Wicker, who was named UPS’s first chief sustainability officer in 2011. Like many of UPS’s top execs, Wicker is a lifer. He got his start in 1977 unloading UPS trucks while studying to become an electrical engineer. Some three decades later, it’s fair to say Wicker is still working in trucks. Yet today, as CSO, his mandate is to improve the efficiency of UPS’s entire fleet of 93,000-plus vehicles – which includes those brown vans, long-haul trucks, and cargo planes as well as gondolas and tricycles — along with the company’s global portfolio of more than 1,800 facilities.

True to his engineering roots, Wicker approaches this challenge quantitatively. Given that fueling the UPS armada generates more than 90 percent of the company’s carbon emissions, much of UPS’s sustainability efforts focus on its fleet, such as streamlining delivery operations, developing fuel-efficient technologies, and exploring alternative fuels. In 2011, those efforts helped reduce company-wide greenhouse gas emissions by 3.5 percent, even though total package volume grew by 1.8 percent, according to a 2011 report.

OnEarth contributor Adam Aston spoke with Wicker about how UPS has achieved these gains and become one of its industry’s top performers on sustainability.

If there’s a singular example of UPS’s focus on efficiency, it’s the left-hand turn rule in which delivery routes are designed for drivers to make as few lefts as possible. How did this come about?

It’s one of a long list of tweaks we’ve been making to drivers’ routes over the years. It goes back to the ‘70s. Back then, we saw that we were wasting a lot of time making left turns. The more time a van sits waiting to turn, the more fuel is burned idling.

Can you quantify the benefits of the rule?

Partly. It’s part of a broader set of efforts to eliminate idling. Last year we avoided 98 million minutes of idling. And less idling means less fuel burned. We estimate that this effort alone saved 653,000 gallons of fuel.

So fuel efficiency is as much about how vehicles are driven, as what fuel they use or how the vehicle is designed?

Yes, some of the biggest changes to our fleet operations are the least visible. Last year, for example, we estimate we avoided driving nearly 90 million miles thanks to improvements in routing and package-flow technologies. That translates into more than 8 million gallons of fuel not burned. Our technologies determine how to load each package and where each one goes on a specific shelf in the truck.

We’re also developing the ability to adjust routing on the fly. If the driver has to veer off a route for any reason, the system can recalculate the optimal delivery sequence. Further, the system will help the driver to mix more urgent, early-morning deliveries in between less urgent deliveries with later time commitments. In the past, this hasn’t been possible — instead, all urgent packages are delivered first, regardless of lost opportunities to deliver another package nearby.

It may sound minor, but these changes can help reduce the number of miles each driver travels each day. When you multiply a few miles saved per driver per day, the aggregated savings in time, fuel, and carbon are significant.

That said, is the push for a high-mileage truck still a top priority?

Yes. With more than 90,000 vehicles, it’s a constant concern. Our fleet of alternative-fueled vehicles is the largest in the industry, and one of the most diverse. Since 2000, some 2,500 unconventional UPS vehicles have racked up over 200 million miles in service.

Many are powered by natural gas, which we’re looking to as an alternative to diesel. For example, more than 900 local delivery vans are powered by compressed natural gas (CNG) in the U.S., and almost that many vehicles in Canada are powered by propane [a close relative of natural gas]. For long distances, we also have about 59 big rigs — highway tractor-trailers — powered by liquefied natural gas (LNG).

Rounding out the alternative fleet are 381 hybrid electric models that, similar to Toyota’s Prius, use a combination of combustion, electric motors, and battery storage to boost mileage. Because they recapture so much of their energy through regenerative braking, these models are especially well-suited to urban routes, where total miles travelled is short, with many stops and starts, and pollution control is important. We’re also running a small number of ethanol-powered vehicles and pure electric vehicles, which run solely on power stored in their batteries.

We’re also excited to announce that starting this month, we’re rolling out 40 hydraulic hybrid delivery vehicles. This is a continuation of a program we piloted with the Department of Energy and other partners in 2006. Instead of storing energy in a conventional battery, these vehicles use hydraulic fluid as the storage medium. When the vehicle accelerates, some of this stored pressure helps it to start moving. During braking, the process works in reverse: the vehicle’s momentum is converted into pressure to recharge the hydraulic tanks. It’s a remarkably rugged system that can save up to 40 percent of fuel.

Why pursue so many kinds of technology?

We’d like to get off of fossil fuels. That’s our goal. Our approach is holistic because there is no silver bullet. It would be foolish to try to predict which fuel will emerge as the best or most durable.

Can you squeeze greater savings from your conventional diesel trucks?

Yes. One of the things we’re most excited about is “lightweighting.” Last year, we rolled out a test truck that looks similar to our regular delivery van, but that’s built with advanced materials that shave off 900 pounds. There are body panels made of lightweight plastic composites instead of metal sheets. Because the vehicle is so much lighter, we’re able to use a smaller engine, as well.

The trucks deliver approximately 40 percent gains in fuel efficiency, and the price is in line with the cost of a conventional vehicle. Based on that trial, we ordered 150 of these higher-mileage models. We’re also more comfortable with composite material and will consider adding more composite components into larger vehicle types.

UPS operates a lot of vehicles consumers rarely see, from planes to long-haul trucks. What are you doing with these?

To put this in perspective, more than half of UPS’s carbon dioxide emissions come from jet fuel, and the rest of our mobile fleet make up about a third of emissions.

For surface transportation, we shift as much as possible to rail, which is a far more efficient way to move goods than road. For rail and air, the efficiency options are fewer than on the road. With planes, we’re testing more efficient flight paths. Simplifying a jet’s landing pattern, by letting it glide down continuously rather than descending in a step pattern, delivers substantial savings. We’re also testing aviation biofuel. We know it works. The problem is making it at the right price.

Are your customers asking for data on the carbon impact of their shipping?

Customers began to push for this kind of data a few years ago. Big companies are facing more pressure from groups like the Carbon Disclosure Project, the federal government, and financial entities to report on their carbon footprints.

It’s been a challenge to build a system that collects all this data. But today, we’re one of the few logistics providers that calculate Scope 3 emissions, which often comprise a very large share of the total. These are the emissions produced indirectly to make goods or deliver services a company buys. [Ed. note: Scope 1 emissions are created from direct actions, such as fueling a UPS truck. Scope 2 are emitted indirectly, such as the emissions associated with electricity bought by a UPS utility. Find out more here.]

When we ship for a company, or handle its logistics, UPS becomes a major source of the company’s Scope 3 emissions. Delivering that data reliably is a very sophisticated process. Our experience developing these measures has helped us advise partners on their efforts to map out their own Scope 3 emissions, too.

Have UPS’s sustainability efforts helped attract customers?

Yes. UPS is the only U.S.-based company offering a carbon neutral shipping option across all product lines. Puma, for example, ships everything carbon neutral. Toto [a Japanese bathroom fixture maker] uses the service, too. Another example is LiveNation, which organizes touring bands. We ship of all the bands’ gears in our trucks, and, in some cases, have begun to manage transport for those tours in a carbon neutral manner.

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Originally published at http://www.onearth.org/article/meet-the-change-makers-how-ups-delivers-big-energy-savings

GreenBiz

Despite naysayers, green energy keeps growing | GreenBiz

Despite naysayers, green energy keeps growing Clean-energy programs find themselves squarely in the cross hairs of the GOP this election season. After pillorying the White House over Solyndra’s collapse, the House has been griping about everything from military spending on renewables to Obama’s failure to lower gasoline prices. So it may not be the best of times to crow about green energy success.

Or maybe it is. After all, while the past year may be remembered for cleantech’s struggles, green-energy companies turned in another banner year in the humdrum businesses of generating renewable electric power and biofuels.

All together, solar PV, wind and biofuel markets expanded by 31 percent last year to $246 billion globally, according to Clean Edge’s 11th annual edition of Clean Energy Trends 2011, a wrapup of key green-energy indicators. The expansion caps a five-year run during which these markets have grown by roughly a third each year.

To be sure, the market issues facing solar PV manufacturers, wind turbine makers and biofuel producers are very different, so I want to be cautious about generalizing. But the three share similarities. All are gaining sales in established markets dominated by fossil fuels. All have matured beyond startup stages and are, accordingly, seeing the emergence of sophisticated, large-scale players.

And, of course, all three have faced souring public support in the past year. Solar subsidies retreated in Europe. And in the U.S., tax benefits were eliminated for corn ethanol, while the wind industry is once again fighting for the renewal of its production tax credits.

Last year, “the industry became a modern-day whipping boy,” Ron Pernick, Clean Edge co-founder and managing director, said in a press statement. “The attacks… overlooked the fact that many clean-energy technologies are becoming increasingly cost-competitive, central to the expansion of energy markets in places like China, Japan and Germany, and a critical hedge against more volatile forms of traditional energy.”

Despite these headwinds, Clean Edge expects the markets to grow steadily — albeit more slowly — in the decade to come. It projects the clean-energy market will expand by 4.6% per year (compounded) to $385 billion by 2021. In all three technologies, falling prices will spur further growth.

Solar photovoltaic: Sales of PV panels globally surged to $91.6 billion in 2011 from $71.2 billion in 2010. The surge is all the more remarkable because it comes amid fast falling unit prices for solar panels. Put another way, dollar sales rose by 29 percent, while the volume of watts installed soared by 69 percent to more than 26 gigawatts worldwide last year from 15.6 gigawatts in 2010. Clean Edge projects that the cost to install solar PV systems will fall from an average of $3.47 per watt globally last year to $1.28 per watt in the next decade. The falling price will make solar PV cheaper than the grid average price in about a dozen U.S. states in that period.

Wind power: The volume of new turbines coming on line also hit a record last year, with 41.6 GW of wind capacity installed. Assuming, as a rule of thumb, that windmills produce about a third of their rated capacity, that’s the equivalent of more than a dozen nuclear reactors. The total spent to build that new capacity hit a record: $71.5 billion, up 18 percent from $60.5 billion in 2010.

Biofuels markets also established a new high in 2011, with $83 billion in global sales, up from $56.4 billion the prior year. Unlike the markets for solar and wind technology — where falling prices were the rule – per-gallon prices for ethanol and biodiesel rose through the year, reflecting the higher costs of feedstocks such as corn and plant oils, as well as higher fossil-fuel prices.

Venture capital. U.S.-based venture-capital investments in cleantech grew by 30 percent to $6.6 billion in 2011, from $5.1 billion in 2010, according to data provided by Cleantech Group. Clean Edge analysis found that cleantech deals accounted for a record 23 percent of the total U.S. venture-capital investments last year.

Just in time for GreenBiz’s VERGE meeting in Washington, Clean Edge’s report also focuses on several key trends highlighting the way that energy technologies, efficiency and infotech are converging to transform business and government practices. These include the potential for “deep” retrofits in commercial buildings; the growth of waste-to-resource business plays; the promise of energy storage on the grid; the U.S. military’s growing emphasis on clean technology and efficiency; and Japan moving into its post-nuclear future.

Check out the Clean Edge’s full report at http://cleanedge.com/reports/charts-and-tables-from-clean-energy-trends-2012 (click on “Download full report” on the left).

Photo courtesy of Vaclav Volrab  via Shutterstock.

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View the original article here: http://www.greenbiz.com/blog/2012/03/14/despite-naysayers-green-energy-keeps-growing

Global CCS Institute

Lessons form California’s daunting carbon challenge | Global CCS Institute

Among US states, California is leading the race to explore and implement ways to lower its greenhouse gas output. Its goal: to cut emissions to one-fifth of 1990 levels by mid century. As such, other states and nations are closely watching the Golden State’s practices for inspiration and technical guidance.

What then, if a deep, hard look at California’s ambitious plans to lower its greenhouse gas emissions revealed that – even by pursuing an all-out, no-holds-barred mix of today’s technologies and aggressive efficiency measures – the state was only likely to get about halfway towards its goal?

That, roughly, is the conclusion that Jane C. S. Long comes to in a commentary published in the journal Nature last October. Titled Piecemeal cuts won’t add up to radical reductions, her note maps out, with remarkable clarity, the mountainous challenge ahead for California to achieve its climate goal. The bracing conclusion: California can’t just spend or deploy its way to an 80 per cent reduction or beyond – and neither can anywhere else.

Jane’s expertise stems from her role as co-leader of a team of energy analysts who wrote California’s Energy Future: The View to 2050 published in May 2011. By day, she’s principal associate director at Lawrence Livermore National Laboratory, a global leader in research on energy technologies and policy.

One of the important implications that surfaces in Jane’s broader analysis is the central role of carbon capture and sequestration (CCS). This is somewhat surprising given that California’s grid is all but coal-free.

California is different from most states, she observes, with 40 per cent of total energy used for transportation, versus 25 per cent nationally. Thus CCS must come into play less so for grid power than to help generate low-carbon vehicle fuels and other applications where neither electricity nor biofuels can substitute for existing fossil fuels.

The model Jane and her team developed strives to avoid what she calls ‘sleights of hand’ where it can be difficult to fully account for the secondary or tertiary impacts induced by switching to new energy forms. For example, rather than simply count solar panels as clean generation, Jane’s model more fully enumerates the impact of electric power generation at night and other times when solar panels are off line.

The analysis reveals that to achieve a 60 per cent reduction – well short of the 80 per cent goal California and many nations are looking to – would require all manner of tough-to-imagine steps:

[The state would have to] replace or retrofit every building to very high efficiency standards. Electricity would have to replace natural gas for home and commercial heating. All buses and trains, virtually all cars, and some trucks would be electric or hybrid. And the state’s entire electricity-generation capacity would have to be doubled, while simultaneously being replaced with emissions-free generation. Low-emissions fuels would have to be made from California’s waste biomass plus some fuel crops grown on marginal lands without irrigation or fertilizer.

Given that California represents a best-case scenario for the rest of the US, Long’s assessment is a compelling case to accelerate the speed and scope of carbon-reduction efforts.

I’ll refrain from diving into the broader implications of her report here – better to check it out in whole. Instead, for the Global CCS Institute’s community, I wrote to Jane to tease out a bit more of her vision of CCS in California’s future. An edited version of our exchange follows.

Adam: You’ve said that CCS has a critical role in helping California achieve its goal of cutting emissions to 20 per cent of their 1990 levels by mid century. How so?

Jane: I would guess that CCS will not play much of a role in meeting the AB32 goals of 20 per cent reductions, but it may play an important role in meeting the longer-term goal of 80 per cent reductions by 2050. Natural gas generation is a large part of California’s electricity portfolio. If this is to continue and meet the emission reductions, CCS would have to be used whether or not that generation was within state or say, by wire from Wyoming.

In the long term, CCS may play a critical role in solving the fuel problem. We are unlikely to have enough biofuel to meet all of our demands for fuel even if we are successful in cutting demand in half through efficiency measures and electrifying everything we can. CCS could be part of a hydrogen scenario where we get hydrogen from methane and sequester the CO2 generated in this process. Or we might use biomass to make electricity and sequester the emissions to create a negative emission credit to counter the continued use of fossil fuels.

Adam: Yet CCS technologies remain immature and under-commercialized. Starting in what years would CCS need to begin entering into California’s energy mix to play this kind of role? And are we already behind that pace?

Jane: If we start now with demonstration projects, it could be possible to have all new fossil generation be using CCS within a few decades. We need that amount of time to be sure the demonstrations are working.

Adam: What lessons does California’s CCS case have for the transportation challenge in other countries?

Jane: The transportation problem in the developing world is really interesting because it’s not clear that countries like India, for example, should electrify automobiles as a first strategy. If their electricity is made with coal without CCS, electrification is not a clear benefit. If they move to de-carbonize electricity, then electrification of transportation and heat makes much more sense.

Adam: I’ve assumed that developing countries such as China and India ought to leapfrog to electric fleets ahead, and skip the oil-burning stage, to whatever degree possible. You’re suggesting that might not be the best bet for the climate?

Jane: The distance countries like China and India have to go to provide enough electricity at low emissions is huge. If having to run cars on electricity means they add twice as much coal-fired electricity without CCS it would be a disaster. As well, the biomass for biofuel problem is likely to be more acute in these countries as they face serious challenges with food supplies. In the same 2050 period that we are looking to more than double energy supply, we are looking to double food supply. As it takes some time to roll over the fleet of automobiles to electric vehicles, it probably makes sense to move forward with electric transportation at some level as this is what we need in the long term, recognizing it will make the need to decarbonize electricity even more acute.

Adam: Writing for the Institute, the Natural Resource Defense Council’s CCS expert, George Peridas, recently summarized California’s progress as “not a whole lot of progress on the CCS front to showcase since last year, but developments are expected soon”. How could the state reorder its CCS priorities to pick up the pace of technology development?

Jane: The state could get behind a demonstration project for a combined cycle gas plant. There are a lot of people skeptical about CCS. We need to have a concrete example that it works. A big issue in CCS is integrating all the complex industrial processes: electricity generation, capture, and storage. We need experience in actually doing what we theoretically ‘know’ how to do.

For an exploration of the broader report, along with further details on the technicalities of the model used in Jane’s analysis, check out Andy Revkin’s interview with Jane at his Dot Earth blog at the New York Times.

GreenBiz

Clean Energy Makes Big Strides, but Just How Sustainable is the Growth? | GreenBiz

Clean Energy Makes Big Strides, but Just How Sustainable is the Growth?

Global investment in clean energy capacity expanded by 5 percent in 2011 to $260 billion. The growth comes despite the considerable drag from economic crisis in Europe and weak growth in the U.S.

The new research, compiled by Bloomberg New Energy Finance, was announced yesterday in New York at United Nations headquarters building, site of the Investor Summit on Climate Risk & Energy Solutions.

Up from $247 billion in 2010, last year’s rise in spending on clean energy capacity offered reasons for optimism along with rising cause for concern. Note that this data includes spending on renewable energy technologies, but not advanced coal, nuclear or conventional big hydro.

The good news: Spending has quintupled in the past seven years, with outlays for solar power leading the expansion — soaring by 36 percent to $137.5 billion during 2011.

And in the global horse race for green energy leadership, the U.S. regained its lead over China for the first time since 2008. U.S. spending hit a record, at $55.4 billion, up 35 percent, as investment in China rose by just one percent to $48.9 billion.

“The performance of solar is even more remarkable when you consider that the price of photovoltaic modules fell by close to 50 percent during 2011, and now stands 75 percent lower than three years ago, in mid-2008,” Michael Liebreich, chief executive of Bloomberg New Energy Finance, said in a statement.

But lurking behind those big numbers are worries that U.S.’ resurgence in 2011 may turn out to be the lunge that precedes a stumble. Spending in the U.S. was buoyed by a big surge of stimulus funds, originally set aside in the 2008 stimulus bill, that will taper off sharply in the year ahead.

“The U.S. jumped back into the lead in clean energy investment last year,” Liebreich added. “However before anyone in Washington celebrates too much, the U.S. figure was achieved thanks in large part to support initiatives which have now expired.”

As those incentives shrink, the global wind and solar industries are set to consolidate. Supply in both the wind and solar markets exceeds demand significantly, leading to bankruptcies and pullbacks. In the solar space, Solyndra is the most visible, but one of a growing number of startups that crashed under pressure from falling solar cell prices.

Dominated by mature conglomerates such as GE and Siemens, the outlook for wind is dimmer than for solar: Global investment fell by 17 percent to $74.9 billion. To try to compete with lower-cost Chinese manufacturers Vestas, the world’s largest producer of turbines, yesterday announced it was shuttering a factory, and cutting 2,335 jobs, or about 10 percent of its staff.

Of course, oversupply means lower-cost energy systems for buyers. And even as subsidies are declining in the wealthy West, non-financial policy support remains resilient. In the U.S., renewable portfolio standards in 29 U.S. states represent a $400 billion investment opportunity, as other states finalize similar commitments.

Meanwhile, stepped up subsidies in emerging markets — especially Brazil and India — are upgrading energy services to virgin markets. Spending in these areas will replace some of the investment that is retreating in North America and Europe, said Ethan Zindler, Head of Policy Analysis at Bloomberg New Energy Finance.

Financial innovation remains a weak spot, however, especially in the U.S., where clever capital solutions could help fill the gap left by shrinking federal subsidies. Given the multi-billion dollar scale of many clean-energy investment projects, there’s been a dearth of the sorts of high-efficiency financial instruments that can bundle up batches of projects, and finance them at low cost in public markets, Zindler added.

There have been some promising precedents — such as PACE loans and solar lease-to-own programs. But nothing has yet emerged to substitute for large-scale, multi-billion federal subsidy programs. Proposals such as green bonds or a national infrastructure bank are stuck in the starting gate, said Zindler.

Institutional investors, meanwhile, are hungry for more diversified ways to put money into greener projects. “Investors need diversified, sustainable strategies that maximize risk-adjusted returns in a volatile investment environment,” said Ceres head Mindy Lubber, which directs the Investor Network on Climate Risk, a network of 100 institutional investors with collective assets totaling about $10 trillion.

The retreat of subsidies may enhance the competitiveness of products and strategies already honed to deliver higher efficiency and energy savings, said Marc Vachon, vice president of ecomagination at GE. He added that GE’s ecomagination product line is growing at twice the rate of the rest of the company, having already generated $85 billion in revenues to date.

The event saw the release of two other reports of note for folks following investment trends in green business and clean tech:

• Global investment consultant Mercer issued a new report showing how leading global investors, including the nation’s largest public pension fund, CalPERS, are integrating climate change considerations into investment risk management and asset allocations. The report, “Through the Looking Glass: How Investors are Applying Results of the Climate Change Scenarios Study” comes on the heels of a Mercer report last year showing that climate change could contribute as much as 10 percent to portfolio risk over the next 20 years.

• Deutsche Asset Management also released a new report, “2011: The Good, The Bad, and the Ugly,” describing generally mixed results on climate investments and policy in 2011 but projecting long-term growth in cleaner energy markets to continue. Positive trends included China and Germany’s continued low-carbon leadership, the U.S. Environmental Protection Agency’s issuance of new rules on hazardous air pollutants, Australia’s new carbon legislation, and Japan’s commitment to supporting the deployment of more renewable energy.

The report also highlights negative trends such as the weak performance of cleantech public equity stocks in 2011 and the expiration of several U.S. federal renewable energy incentive programs, including the “highly successful” Treasury Grant Program that expired Dec. 31, 2011. The report noted that the TGP program, in 2 1/2 years, leveraged nearly $23 billion in private sector investment for 22,000 projects in every state across a dozen clean energy industries.

Last but not least, a plug. If you, like me, have concluded that the “end of coal” is all but inevitable to prevent catastrophic climate change, check out this remarkable presentation — which ended with a standing ovation — by Richard Trumka, President of the AFL-CIO at yesterday’s summit.

Trumka, a former miner, spoke with passion about how the “end of coal” message is landing on the ground in blue-collar coal country, even as he acknowledged the dire need to address climate risks and build a low-carbon economy.

His message is cause to reflect on how labor’s interests are often misunderstood and under-represented in climate policy discussions. Where coal miners see their jobs, housing values, and culture imperiled, it’s no surprise that the politics of climate change become hard to swallow — no matter how chaotic the climate change signals may be. The same labor issues vex the proposed XL Pipeline, about which Trumka says labor remains divided, and natural gas fracking as well.

Read the transcript here or watch his talk below, starting just before the 14-minute mark. It’s well worth the 15-minute running time. If the embedded player isn’t working, point your browser here: http://www.unmultimedia.org/tv/webcast/2012/01/2012-investor-summit-on-climate-risk-and-energy-solutions-2.html:

Wind turbine photo CC-licensed by Samuel Stocker.