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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.

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

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.

GreenBiz

Despite Boom in Renewables, Risks Could Hurt Further Growth | GreenBiz

“Alternative” energy is officially not so alternative anymore. Last year, for the first time ever, spending on projects to generate electricity from renewable sources eclipsed the amount spent to build conventional fossil fuel plants.

In 2010, renewable projects drew $187 billion in investment, 19 percent more than the $157 billion spent to build or augment conventional generating plants, fuelled by natural gas, oil and coal, according to analysis released by Bloomberg New Energy Finance for the Durban climate talks.

As the clean energy sector comes of age it must now reckon with the challenges of more mature industries. Namely, managing the risk posed by larger, more complex projects. According to “Managing the Risk in Renewable Energy,” a report released this week by the Economist Intelligence Unit and Swiss Re, minimizing financial risk is one of the most “acute” challenges facing the sector in the near term.

The renewable energy sector will face an even more uncertain future if it fails to manage the growing risks associated with larger, more complex projects, EIU found. The study was based on survey of 284 senior-level renewable energy executives.

The survey found that renewables have moved to center stage. Power companies increasingly view renewable energy as central to their business strategies, and are developing larger and more complex renewable energy projects. Billion dollar projects, once rare, have become regular.

Worry is rising among renewable energy investors that some of the other 100 or so governments supporting clean energy will cut public subsidies as part of austerity measures, the report found. Fiscal crisis in Europe and economic malaise in the U.S. suggest public support for renewable energy is more likely to shrink than grow in the near term. For example, solar feed-in tariffs are being slashed across Europe: lowered by 15 percent in Germany and up to 70 percent in the U.K.

As public funds dry up, the appetite for renewables remains strong, siginaling a shift to more private funding. “Risk management measures such as insurance will be key to encourage further private sector investment,” said Agostino Galvagni, Chief Executive Officer Swiss Re Corporate Solutions in a statement. “Additional investments into renewable energy are needed to achieve the transition to a low-carbon economy,” he added.

A major issue in renewable energy projects is their high up front costs. Projects are typically capital-intensive and highly leveraged, with up to up to three quarters financed through debt. As companies seek to scale up investments, overcoming financial risks is one of the biggest challenges, according to 76 percent of the survey respondents.

Among plant investors, owners and operators surveyed, other significant concerns included political and regulatory risk (62 percent) while weather-related volume risk comes in third for wind power producers (66 percent). These risks increase further as projects grow in scale and complexity.

The report revealed that while companies are sophisticated in using insurance elsewhere in their businesses, the dearth of risk-management tools in the renewables space has limited their use. About two-thirds of respondents already use insurance to transfer risks. But only half of respondents said they are currently transferring risk successfully, for example through insurance to hedge against the risk of weather-related reductions in output of a solar park or wind farm. Instead, because of the limited availability of suitable risk-transfer mechanism, many retain the risks related to renewable energy assets on their balance sheets due to.

The use of solutions such as weather-based financial derivatives is slowly picking up, even though only 4 percent of wind power producers apply them to their projects. Many solutions on the market today are unsuitable for small-scale projects. In the survey, executives say they would transfer more risk if suitable risk-transfer products become more widely available in the future, particularly more standardized and cost-effective products.

With the next round of global climate talks expected to founder in Durban, the need to develop more efficient private sector investment tools for technologies that mitigate climate change, such as renewables, is only growing. The toll for climate related damage is expected to continue to rise in coming years. In 2011, the U.S. eclipsed the prior worst-year record for extreme weather events, with 14 such events doing more than $1 billion in damage. In 2008, the prior record year, the tally was nine such events.

“New technologies and innovation in renewable energy will be the only possibilities left should a global policy regime to reduce carbon emission not materialize,” says Andreas Spiegel, Swiss Re’s Senior Climate Change Adviser in a statement.

As the reports sponsor, Swiss Re is eager to “better understand how insurance can mobilize financing for renewable energy projects and identify the most cost-effective ways to reduce risks,” Spiegel added. Insurance can help lower construction and operational risks, by covering losses in the case of accident or delay.

For deeper dive into the survey’s findings, check out the EIU’s summary analysis here [PDF]. Cribbed from that analysis, here are the reports key findings, as well, according to Aviva Freudmann, Research Director at EIU.

1. Renewable energy is growing in strategic significance in the power industry, and is the focus of ever-larger investments.2. As renewable energy projects grow in number, scale and complexity, the industry faces a growing range of risks — as well as significant challenges in managing them.

3. Plant financiers and operators consider financial risks the most significant, particularly in early project stages.

4. Industry players are becoming more cautious, taking a variety of measures to reduce their exposures and transfer the remaining ones. One emerging way to manage certain risks is to diversify by geography and by technology.

5. By a wide margin, the industry chooses insurance to transfer financial risks to third parties, followed by capital-market instruments such as catastrophe bonds.

6. For operational risks, industry players seem unsure whether to continue using current risk transfer mechanisms, which focus on insurance and capital-market instruments. Many transfer operational risks to hardware suppliers.

7. Confusion abounds on how best to manage weather-related volume risks. The industry calls for a broader range of risk transfer products to cover such risks.

Solar farm photo via Shutterstock.

GreenBiz

Method, Deutsche Bank, Bloomberg Among Firms Betting on WindMade | GreenBiz

Would knowing that more wind energy was used to manufacture a cell phone lure you to buy it instead of a similar model made with regular power?

The wind industry hopes so. It’s making a high visibility bet that most consumers will be swayed by a new WindMade label that will start appearing on products in the coming year.

The strategy has plenty of precedents. Remember the iconic “Intel Inside” branding campaign? In the course of a few years, by pasting a simple label on practically every PC, Intel transformed its brand image from just-another-chip-maker to that of an industry powerhouse.

The wind industry is hoping its new label — a circular blue swirl — will make visible wind’s growing, green impact on business and the economy. To that end, WindMade.org, a nonprofit debuted backed by WWF and the Global Wind Energy Council, last week unveiled its first class of companies that will use the mark.

At a press conference in New York, WindMade revealed that — led by the likes of Bloomberg, Deutsche Bank, LEGO and Motorola Mobility — more than a dozen companies had signed on to new logo. (Find the full list at the bottom of this post.)

Companies can qualify to use the mark by documenting that they source at least 25 percent of their power from wind energy. The wind power can come either from company-owned turbines, a long-term power purchase agreement, or by buying high quality Renewable Energy Certificates (RECs) approved by WindMade.

The label will show the precise percentage of the wind energy share in the product. And companies have the flexibility to certify global, regional or facility level operations, a distinction that will be also clearly displayed on the label.

Companies see the label’s potential to burnish their brand’s green reputations. The wind industry, meanwhile, is betting the allure of the mark will drive more companies to opt for wind, spurring demand for wind power, and leading to increased investment in new wind capacity.

“It is Motorola Mobility’s intent through our participation in the WindMade initiative to encourage greater use of renewable energy sources like wind and solar around the globe,” said Bill Olson, director office of sustainability and stewardship at Motorola Mobility in a statement.

WindMade has evidence that consumers will be drawn to the new symbol. In a survey of 31,000 consumers, two thirds “told us they would favor WindMade products, even at a premium,” said Morten Albæk in a statement. Albæk is senior vice president of global marketing at Vestas, the Danish wind turbine manufacturer spearheading the initiative.

Next page: Does the world really need another eco-label?

In the wilds of real-world retail environments, plenty can go awry with eco-labeling, however. There’s growing of confusion over the number of labels. According to Ecolabelindex, 426 labels circulate in 246 countries and 25 industries.

In the organic food space, for instance, a proliferation of standards and authenticating bodies — some independent, some industry backed, others from by government — has left many consumers confused and skeptical. In the UK, despite costly, complex efforts to track the CO2 footprint of select groceries, consumers proved only mildly interested, if at all, in the CO2 “nutrition lable”.

The precedent suggests that consumers may simply tune out from abstract numbers. A sample of the WindMade label a hypothetical product could earn is below.

windmade label

That said, wind energy looks less vulnerable to these sorts of confusion. It’s certainly easier to verify wind content than, say, how sustainably a given fish was caught. And wind energy is less abstract that CO2: windmills are widely recognized, and as an energy source have positive, broad public support.

There’s also plenty of precedent: a growing number of big companies have made renewable energy a public priority. Last year, for instance, Intel was the nation’s largest corporate buyer of renewables, with 1,493 gigawatt-hours of electricity, enough to meet about a third of its total worldwide needs — and equivalent to the annual demand of about 150,000 homes. Kohl’s food markets and Whole Foods stand out for meeting 100 percent of their electricity demand with renewable energy.

Intel’s leadership in renewables begs the question: Someday, will all those Intel Inside labels on computers carry another label showing the chips are WindMade, too?

Until then, check out WindMade’s complete first class of corporate pioneers and founders:

Wind turbine photo via Shutterstock.

View and comment on the original post here: http://www.greenbiz.com/blog/2011/11/22/method-deutsche-bank-bloomberg-among-firms-betting-windmade

The Fiscal Times

Offshore wind for Cleveland? Wind Energy Can Create Jobs, Reduce Carbon Footprint | The Fiscal Times

Cape Wind, the planned $2.7 billion wind farm off the coast of Cape Cod, Mass., in Nantucket Sound, got the green light in April from the Interior Dept., the most important approval so far in the project’s nine-year odyssey. Even so, there’s still plenty of reason to doubt it will ever be built.

Despite the environmental merits of replacing a dirty local power plant, and a steady parade of local, state and federal approvals, the project has been besieged by a series of legal challenges backed in part by well-heeled opponents with homes in the area, such as billionaire industrialist Bill Koch.

Cape Wind has also pitted green against green, renewable energy supporters against conservationists. Some have argued the project threatens the area’s shore views, birds and sea life, most famously Robert F. Kennedy Jr., senior attorney at the Natural Resources Defense Council, from whose family compound the turbines would be visible. In the wake of the April approval, opponents immediately vowed to file new suits.

Meanwhile, there’s little opposition to a proposal to put wind turbines in Lake Erie, near Cleveland. Developers there have been careful to focus on the potential to salvage the region’s beleaguered manufacturing sector. Ohio’s plan is smaller than Cape Wind — initially five turbines compared with 130 planned in Massachusetts — and slated to be a fraction of the cost, at about $100 million…

More here: http://www.thefiscaltimes.com/Articles/2010/09/25/Wind-Energy-Can-Create-Jobs-Reduce-Carbon-Footprint.aspx

 

BusinessWeek

Cape Wind: The War Over Offshore Wind Is Almost Over | BusinessWeek


Cape Wind’s Gordon may soon get the O.K. to build turbines Stephan Savoia/AP photo

It’s no longer if, but when, where, and how many wind farms will go up along the U.S. coast

Wind farms are springing up in Midwestern fields, along Appalachian ridgelines, and even in Texas backyards. They’re everywhere, it seems, except in the windy coastal waters that lap at some of America’s largest, most power-hungry cities. That’s partly because the first large-scale effort to harness sea breezes in the U.S. hit resistance from an army led by the rich and famous, waging a not-on-my-beach campaign. For almost eight years the critics have stalled the project, called Cape Wind, which aims to place 130 turbines in Nantucket Sound about five miles south of Cape Cod. Yet surprisingly, Cape Wind has largely defeated the big guns. In a few months it may get authorization to begin construction. Meanwhile, a string of other offshore wind projects is starting up on the Eastern Seaboard, in the Gulf of Mexico, and in the Great Lakes.

Much of the credit—or blame—for this activity goes to Jim Gordon, the man who launched Cape Wind in 2000. His goal is to provide up to 75% of the electric power on Cape Cod, Nantucket, and Martha’s Vineyard by tapping the region’s primary renewable resource: strong and steady offshore breezes. He has methodically responded to every objection from Cape Cod property owners and sometime-vacationers, ranging from heiress Bunny Mellon and billionaire Bill Koch to former Massachusetts Governor Mitt Romney and Senator Edward M. Kennedy (D-Mass.). “This is like trying to put a wind farm in Yellowstone National Park, as far as we’re concerned,” says Glenn Wattley, CEO of the Alliance to Protect Nantucket Sound, the opposition’s lobbying arm.

Click here for a full size map: http://goo.gl/DPyMH

Since 2000, Cape Wind’s Gordon has burned through $30million of his own wealth, much of it to pay for studies of the site. The result is a four-foot-high stack of environmental reports, including three federal applications looking at the wind farm’s potential impact on birds, sea mammals, local fishermen, tourism, and more. “We’ve gone through a more rigorous evaluation process than any prior energy project in New England,” says Gordon, who built natural-gas-fired power plants before starting Cape Wind.

Victory is by no means certain. Cape Wind could yet bog down in litigation or be nixed by the feds, Gordon concedes. Even if Washington O.K.’s the project, he must find a way to finance it. Expected costs have more than doubled in the last eight years, to over $1.5billion, by some estimates. And assuming the funding comes through, engineering and construction could drag on for three or more years.

Regardless of how this all plays out, Gordon has secured his spot as one of U.S. wind power’s pioneers. When it comes to building natural gas and oil rigs in federal waters, energy companies must follow clear government rules. But until Cape Wind floated its first proposal, Washington had never spelled out how to develop an offshore wind farm. Gordon’s plan prodded the Minerals Management Service, the federal agency that oversees energy extraction from public lands, to take action. The regulators hope to release detailed rules for utilizing wind, wave, and tidal power by yearend, at which point the path will be cleared for applications from a dozen or so wind projects in federal waters, with nearly as many under way in state areas. “We’ll see an incredible flurry of proposals to tap ocean resources for clean and renewable energy,” says Maureen A. Bornholdt, program manager at the MMS’s Office of Alternative Energy Programs.

It’s easy to understand why entrepreneurs are rushing in. Winds at sea blow stronger and more steadily than on land, where they are slowed by forests, hills, and tall buildings. Unlike terrestrial winds, sea breezes also tend to keep blowing during the hottest times of the day, when the most power is needed. Within a few miles of much of the U.S. coastline, in almost any direction, wind resources are more abundant and dependable than anywhere outside the Great Plains. Exploiting this resource could supply about 5% of all U.S. electricity by 2030, says the National Renewable Energy Laboratory.

Putting turbines in open water is not a cheap proposition. It costs up to twice as much as in rural expanses. But the economics still work well in the Northeast, where open land is scarce, electricity is pricey, and demand for power keeps surging as populations swell. The Northeast is heavily dependent on electricity from natural gas, which has doubled in price in the past year. What’s more, most state governments in this region have passed laws dictating that a growing share of power must come from renewable resources. These states “have to build offshore,” says Bruce Bailey, president and CEO of AWS Truewind, which assesses wind resources. “They won’t be able to meet their [renewables goals] if not.”

In Hull, Mass., a faded Victorian-era beach town just across the bay from Boston, there’s already a windmill spinning above the local high school and another over the dump. Four more turbines are planned for the waters just a mile and a half from one of Greater Boston’s busiest public beaches. Thanks to the two functioning windmills, power rates in the town haven’t risen in seven years, although they’ve doubled statewide. With four more, Hull could meet all of its needs with homegrown energy, says town manager Phil Lemnios.

Throughout New England, shrunken shipbuilding and fishing towns have begun to view offshore wind power as a source of investment and jobs. In Rhode Island, a consortium of fishermen is vying with Bluewater Wind, a unit of wind-farm developers Babcock & Brown (BNB), to put turbines in state waters near Block Island. Across the region, planners hope to reanimate shipyards by building not just turbines and foundations but also the specialized ships needed to transport and erect supersized towers and blades. In Delaware, Bluewater Wind has a project in development that could produce as much as 600 megawatts 12 miles from Rehoboth Beach; it scored an industry first in late June, when it inked a long-term contract to supply electricity to Delmarva Power. Bluewater’s project may well become the first functioning offshore wind farm in North America.

The shores of the Great Lakes, with their strong winds and shallow waters, are also luring developers. Cleveland is among a handful of cities planning wind farms. With offshore wind as a driver, the Rust Belt city wants to remake its waning industrial base into a launchpad for green energy projects.

Down in the Gulf of Mexico, a consortium of oil-and-gas-industry veterans has leased tracts stretching from Galveston, Tex., to the Mississippi Delta to develop offshore wind. Their startup, Wind Energy Systems Technology, plans to adapt retired oil rigs to cut the cost of building offshore plants to a fraction of current prices, says CEO Herman J. Schellstede. The rigs also let them site the turbines farther out at sea. Today’s offshore windmills are built on gigantic steel tubes bored into the seabed. It’s a proven approach, but it demands a lot of costly steel and can’t go too deep. Moving farther offshore on rigs allows developers to tap stronger winds—and the turbines are out of sight.

Europe is some 15 years ahead of the U.S. in exploiting offshore wind. Hundreds of giant windmills already dot the North Sea, with more than 1,000 megawatts of generating capacity. This head start provides an edge to equipment suppliers such as Denmark’s Vestas Wind Systems and Germany’s Siemens, the only two companies building offshore turbines in large volumes today. By 2020, Europe hopes to generate a quarter of all its electricity offshore.

As wind farms are moved into deeper water, they can take advantage of the oil sector’s offshore drilling knowhow, says John Westwood, CEO of Douglas-Westwood, a London-based market analyst that focuses on offshore energy. The U.S. has decades of expertise in this area, he adds. Schellstede’s company, for example, is looking at a new design that adapts multilegged platforms from the oil business. These rigs could be stable enough to withstand a hurricane and would use less steel than the current generation of coastal wind farms.

Back in Cape Cod, the talk is all about deep water, too. In June, real estate agents, marina managers, and property owners met at a Chamber of Commerce breakfast to discuss the latest proposal. BlueH Technologies of the Netherlands has dreamed up a project roughly the size of Cape Wind but over 30 miles out to sea, in depths of 160 feet. BlueH is testing a design with novel two-bladed turbines that uses floating windmills chained to huge anchors. The company faces years of costly development. Still, the region’s die-hard opponents of Cape Wind have embraced the plan as a better solution for Cape Cod. In a decade or so, those foes may find themselves enjoying ample supplies of green power from not one, but four or more offshore farms.

Aston is Energy & Environment editor for BusinessWeek in New York .