Green Tech States Are Not Necessarily Democratic

Most people would expect blue Democratic states to be eager to embrace clean tech and green jobs, the authors assert, with red Republican states resolutely declining to join in the action. However, according to the report, in the 10 states where clean tech jobs are growing the most quickly, only two can be considered traditionally Democratic – Hawaii and New York. Many of the remaining states are decisively Republican, including North Dakota, Nebraska, Wyoming and Alaska. Additionally, among Top 10 states where green jobs make up the biggest percentage of the labor force, only three – Washington, Oregon and Vermont – are Democratic.

"What's more, many of the governors working the hardest to bring clean tech jobs to their home states are not only Republican, but are usually regarded as leaders of their party," according to the report. This demonstrates that clean tech and green jobs are only contentious inside Washington D.C., the authors conclude. "Outside of the capital, where governors (and mayors) are more concerned with creating jobs than scoring debate points, there is no controversy about the impact of clean tech." 

"(Clean tech) is almost universally appreciated as the important engine for job development and economic growth that it is," the authors say. "Disregarding the partisan bickering in Washington, these local officials are using clean tech to bring high-quality jobs to their states, in the process reviving communities and winning the support of local voters in both parties."

Zooming out even further, the report reveals that seven of the top 17 states with the most rapid growth in the clean tech sector are considered swing states for the 2012 presidential election. "Numbers like these suggest we are entering an era in which politicians who unfairly criticize or otherwise ignore clean tech run the risk of alienating a bedrock constituency: job holders, most of whom vote," the authors say.

A copy of the report is available here.

Lead image: Divided flag via Shutterstock

20 Sep, 2012

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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/green-tech-states-are-not-necessarily-democratic?cmpid=rss
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The Demonization of Clean Tech: The Five Biggest Myths

As a longtime analyst at clean-tech research firm Clean Edge and contributor to the recently published book Clean Tech Nation (coauthored by Clean Edge colleagues Ron Pernick and Clint Wilder), I should be on the front lines defending the clean-tech moniker. But given the noticeable intensifying of false debates surrounding clean tech in the last year, it's worth taking a moment to examine ways in which the industry's far-reaching identity has opened the door to some misplaced antagonism.

#1: Energy Sources as Sports Teams

Unless you are employed in a particular sector of the energy industry, as long as the car runs, the lights are bright, the showers hot, and the beer cold, it makes little sense as a consumer to root for one specific energy source against another, as if they were sports teams. Solar power isn't the Miami Heat, and – as much as T. Boone Pickens would like you to believe it – natural gas isn't the Oklahoma City Thunder.

Of course, it's imperative to evaluate energy sources based on availability, affordability, and environmental impact. But blind support of identifiers like traditional energy, alternative energy, renewables, or clean energy – which aggregate many dissimilar resources and technologies – can quickly create an "us versus them" culture. And that's exactly what seems to be playing out on the national political stage in this election season. When the failure of one longshot solar startup (that shall not be named) can be used to demonize all aspects of a multi-hundred billion dollar industry, perhaps the umbrella is too large.    

#2: The Misrepresented History (and Current Reality) of Energy Subsidies

Government has always played an important role in energy innovation. Nuclear power plants are offshoots of nuclear submarines, which themselves are derivative of atomic bombs developed by the Manhattan Project – the ultimate embodiment of government-funded R&D. Less understood is that today's shale gas boom also owes much to government involvement, as recent technological advances are fruits of decades of public-private research and commercialization efforts, as the Breakthrough Institute detailed well in a recent report. 

Unabashedly ignoring this history, The Wall Street Journal's editorial team recently used a snapshot of 2010 federal subsidies to argue that renewables don't merit government support because right now "wind and solar get the most taxpayer help for the least production" – an argument that only makes sense if 2010 was the lone year subsidies were ever available. Surprisingly, the universe did exist prior to January 1, 2010, so we don't have to rely on such disingenuous analysis. A report by DBL Investors' Nancy Pfund and Yale University graduate student Ben Healey, which looked into the historical role of U.S. federal energy subsidies, found that annual federal support for oil, gas, and nuclear has averaged 22 times the amount of subsidies available to renewables.

This extreme imbalance is one reason why Clean Tech Nation's Seven-Point Action Plan suggests phasing out all energy subsidies over the next decade. We know that's a controversial proposal, but let's debate the future of subsidies based on facts, not myths.

#3: The False Promise of Energy Independence

"Lobsters are cheap in Maine because storing and shipping live lobster is hard, but globally traded commodities aren't like that," says Slate's Matthew Yglesias in what might be the most effectively concise dismissal to date of the U.S. energy independence delusion. 

Yes, U.S. reliance on foreign oil has fallen amidst an Obama-era domestic production boom – allowing for fewer direct imports from petro-dictator nations. But unlike lobsters, oil is easily stored, shipped, and traded across borders, so America's oil fate will forever be linked to conditions defined by the global free market.

And if American energy "independence" was truly a top concern, vehicle electrification would be priority number one, as 99 percent of U.S. electricity is derived from domestically-generated electrons. Yet instead of being hailed as uber-patriotic "DEVs" (domestic energy vehicles), electric vehicles continue to fight perceptions of simply being expensive eco-toys.

#4: There is No Such Thing as a Green Job

Granted, this is a tricky one, as definitions vary widely – so claiming a direct link between these jobs and a remedy for the economy often does little more than fuel opposition to all industries involved when the nation's labor market proves stubbornly sluggish. Opponents can claim, for example, that it takes fewer than 30 workers to maintain a 250 MW wind farm that powers 75,000 households. But as a recent NRDC report finds, that same wind farm will actually create 1,079 jobs over the lifetime of the project, mostly during manufacturing and construction.  

There are plenty of wind turbine technicians, increasing masses of solar installers, and armies of workers at the world's largest industrial conglomerates working on products to beef up the electric grid, boost vehicle efficiency, and convert waste into resources. As demand for clean-tech products and services grows, an expanding workforce will obviously be an economic boon.

#5: The Climate Change "Debate"

When even Koch brothers-funded researchers conclude that the world is warming and humans are to blame, it's time to stop arguing the science and start focusing on solutions. But this doesn't seem to be the trajectory of things. Climate change continues to be politically toxic, and demand for clean tech – the market's answer to a changing climate – is being severely hamstrung as a result.    

In place of real climate action, U.S. leadership on both sides of the aisle is clinging to an "all of the above" energy approach. But until the current subsidy outlay changes, in no way will this translate into a level playing field. 

Ultimately, clean tech – or green tech, or advanced energy, or whatever you choose to call it – will win out. The realities of a resource-constrained world and changing climate are just too powerful to ignore. But as clean tech moves forward, it's increasingly important to understand the steadfast opposition – and its myth-making operation – facing this innovative sector that dares challenge the status quo. 

Lead image: Myth via Shutterstock

20 Sep, 2012

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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/the-demonization-of-clean-tech-the-five-biggest-myths?cmpid=rss
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Studies Cite Increased Demand for Wind Power, Other Renewables

According to the Global Consumer Wind Study 2012 (GCWS), the desire for more renewable energy options was voiced by 85 percent of survey respondents, with 49 percent saying they'd have no problem digging deeper into their pockets to support companies committed to renewable energy in the product manufacturing process. Even more encouraging, those numbers spiked considerably when consumers were asked specifically about wind power, with 62 percent indicating that if given a choice, they would consciously choose to buy products manufactured using wind over traditional forms of power generation.

These statistics bode well for the efforts of WindMade, a nonprofit whose primary function is the identification of companies and products that rely on wind power for at least 25 percent of their overall electricity generation. The organization's ultimate goal is not only to give eco-conscious consumers the information necessary to vote with their wallets, but also to generate interest for an industry whose potential still vastly exceeds its demand.

"One of the important challenges the [wind power] industry is facing in many markets around the world is public acceptance," writes Angelika Pullen, Communications Director for WindMade. "Our objective is to help address this problem by creating a tool for that majority of the public that is supportive of wind power, to identify and favor those brands and companies that are using wind energy." 

But public acceptance is one thing — actual corporate espousal of renewable energy is another. And in an era where social and ecological consciousness ranks high in the area of mass appeal, new evidence has come to light that tells us not all private companies are riding the aforementioned fence over whether to pursue renewable alternatives. An increasing number are leading the charge, as evidenced by the second of the two studies, the Corporate Renewable Energy Index Report 2012 (CREX).

According to the results of the report, global corporate investment in renewables has surpassed investment for fossil fuel generation by a significant margin. In 2011, corporations around the globe spent $237 billion investing in renewable energy, eclipsing the $223 billion spent chasing fossil fuel power generation. The CREX is an index that ranks companies by their level of investment in renewable energies. The report also found that 40 percent of renewable energy purchases made in 2011 were made by companies for the purpose of on-site power generation, showing a marked increase from previous years.

The GCWS survey was conducted by TNS Gallup, and the CREX report was prepared by Bloomberg New Energy Finance.

Lead image: Demand chart via Shutterstock

20 Sep, 2012

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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/studies-cite-increased-demand-for-wind-power-other-renewables?cmpid=rss
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The Big Question: What Can We Expect over the Next 12 Months?

Maria van der Hoeven, Executive Director, International Energy Agency

Renewable energy continues to grow in the face of both economic crisis and subsidy reductions in key markets. The technology portfolio is expanding, with generation from wind, solar PV and bioenergy growing in double digits year-on-year. Hydropower continues to grow steadily and remains the largest renewable source in absolute terms. Even geothermal and ocean energy are growing. That growth is being driven by emerging and developing markets outside the OECD - and we expect this contribution to accelerate.

One striking trend is the geographic spread of renewable energy projects, often to totally new markets. Just a few years ago, only a handful of countries hosted significant solar, wind, or bioenergy projects — but renewable energy projects are now taking root across Asia, in Latin America, and in Africa and the Middle East.

While we see growth across renewable technologies, of course the trends for each vary. Solar PV is particularly striking. Stagnating economies and electricity demand, combined with feed-in tariff reductions and other support limitations, are slowing down European PV growth. But that is compensated for by increases in China, the US, Japan and India, and also driven by a rapid fall in component costs. And with falling costs comes intensified global competition. A consequent shake-up of the industry should ultimately bode well for its long-term health. Companies surviving the current consolidation are restructuring and successfully transitioning from subsidized markets to new and potentially more competitive market segments.

Finally, although wind and solar often grab headlines, hydropower remains the largest renewable source by a wide margin. And despite its more sedate image, hydro's growth continues at a healthy pace, driven by the need for baseload capacity in emerging economies, and by increasing pumped storage demands in countries seeking to integrate more variable renewables.

With an outlook marked by growth and driven by emerging economies, these trends are likely to continue and accelerate into the medium term.                      

Birger T. Madsen, Director, Navigant's BTM Consult APS

The global wind market has undergone a dramatic transformation over the past two decades. In 2011, it defied the fragile Western economic climate with a record level of global installations (around 42 GW). There is no doubt that although much of the IP and highest ranking turbine OEMs reside in Europe, the balance of power has shifted to Asia and specifically China, the number one market in the world. 

The wind industry was largely unaffected by the credit crisis, but now is feeling its hangover. It is faced with an overcapacity of turbines and some core components, limited credit availability, high material prices, shortages in skilled labor, continuing low U.S. gas prices and Chinese turbine and core component suppliers producing at lower costs than western competitors. This has resulted in Western companies reducing prices and profit margins, resulting in a strategic rethink of their earlier ambitious targets and aggressive investment decisions made during the boom of 2008. Despite this, the investment level available to the wind industry remains high, but there has been a marked evolution in the shape and face of the investment vehicles available, most notably in the offshore sector.

Looking ahead over the next 12 months, the Chinese market will still constitute the lion's share of global installations despite a drop in annual installations, with Europe seeing a flat level of growth and the US seeing a spike as companies seek to capitalize on the PTC before it expires at the end of 2012.

It is, however, the Latin American, Indian, Eastern European and European offshore markets which are expected to provide the main impetus in installations moving forward.

It's crucial that transmission capacity is improved in time to facilitate the expected offshore progress in northern Europe. Furthermore, it is expected that there will be a continued shift towards the use of direct drive technology and an increasing interest in two-bladed wind turbines.              

Andrew Beebe, CCO, Suntech

Rumors of our industry's death have been greatly exaggerated. Yes, it's true that upstream module oversupply is thinning margins and eroding profitability. But the global solar market will still grow in 2012, just not at the pace we're used to. Although it's a tough time to be a solar manufacturer, it's a great time to be a solar consumer. That's what matters. 

For the first and last time, the price of solar modules has breached the US$1/W mark, a harbinger of cost-competitive solar. We have finally reached the tipping point. New markets are emerging, and the potential for growth is astounding. 

Of course, to achieve this growth, solar companies will need to endure a market that is slowly digesting excess capacity and ensuring that only the most efficient producers survive. As the industry moves through this consolidation phase, we expect bankability to separate the wheat from the chaff. We are witnessing a 'flight to quality', where customers are looking for a reliable and trustworthy brand that can uphold its end of the promised 25-year relationship.

In addition, innovation will define future leaders. In previous years cost reductions came from both technology improvements and declines in key material prices; in coming years innovation will take centre stage. Companies that have a technology heritage and have invested heavily in R&D will be able to innovate ways to redesign cells and modules, to effectively use cheaper ingredients and to scale higher conversion efficiencies.

Despite the skepticism of critics, we can expect the industry to continue on a moderate growth trajectory in 2012 and to accelerate into 2013. The consumer's good fortune bodes well for the industry as our ultimate goal is to make solar power a viable and affordable energy choice.

We knew that solar manufacturers would have to go through this ultra-competitive "Valley of Death". Consolidation is maturation. Amidst unfounded political skepticism of our industry's long-term health and potential, we must stay focused on what matters.

Andrew Oldfield, Head of Cleantech, Mercia Fund Management

There is still a lot of work to do to move UK climate chief Lord Stern's central thesis (that the true cost of not acting on environmental issues is far greater than the cost of investing in alternative technologies) into the political mainstream. It is being questioned whether green is compatible with growth, when in fact it should be synonymous. Community led cleantech companies offer a viable approach, commercializing disruptive innovations without the heavy investment the sector has demanded in the past. 

In solar, for example, new business models will be enabled by technology advances bringing existing low-cost industries into the supply chain. This will require equity finance to build some exciting early stage SMEs [small and medium-sized enterprises] in a capital efficient manner. The financial backdrop is not healthy: for example, seed stage venture investment in the UK has dropped every year from 2006 (about £400 million [US$620 million]) to last year (about £10 million [$16 million]). This is seriously affecting the ability of UK cleantech entrepreneurs to get their ventures funded.

There is a perception that early stage ventures do not offer an attractive risk-reward profile. The reality is that seed stage investment has often been through publicly backed funds with significant restrictions on follow-on investment. These funds have therefore shouldered the operational risk inherent in backing early stage, high growth companies - some of which do fail - without being able to invest in the winners that do eventually emerge. This negatively skews the true value of early stage investing on average. 

The UK urgently needs to re-seed its early stage venture capital market, with substantial funds going into cleantech sectors. A fully functioning seed fund will do 80 per cent of its deals in seed, but 80 per cent of the money goes into later rounds. Community-led cleantech will help returns, but government help is needed to correct the perception that early stage is not an attractive place to invest. Once corrected, the market will take over the job. 

In the end the sector needs to stand on its own feet. Ironically this requires more early stage funding so the financing of disruptive innovation can be shown to be attractive and therefore self-sustaining.

Sven Teske, Renewable Energy Director, Greenpeace International            

The renewables industry's circumstances have changed fundamentally over the past five years. Renewables became mainstream, economic, and grew out of their sometimes wild teenage years. And even faster growth across all renewable energy technologies is more important than ever.

A certain amount of climate change is now "locked" based on the amount of CO2 and other greenhouse gases emitted into the atmosphere since industrialization began. On the 25th anniversary of the Chernobyl catastrophe yet another nuclear incident underlined the urgent need to rethink global energy strategies. The Fukushima disaster sparked a surge in global renewable energy and made at least some governments reconsider their energy approach. At the same time, the poor state of the global economy has resulted in decreasing carbon prices, some governments reducing support for renewables, and a stagnation of overall investment, particularly in the OECD. Rising oil demand is putting pressure on supply, causing prices to rise and making possible increased exploration for "marginal and unconventional" oil resources, such as regions of the Arctic newly accessible due to retreating polar ice, and environmentally destructive tar sands in Canada.

For almost a decade it looked as if nothing could halt the growth of the renewables industry. But the economic crisis and its continuing aftermath slowed growth and dampened demand. While the industry is slowly recovering, increased competition, particularly in the solar PV and wind markets, has driven down prices and shaved margins to the point where most manufacturers are struggling to survive. PV prices fell more than 60 per cent in the past two years, with costs not always following. More production capacity - not only for PV - is a must to get to the market size needed to save the climate and supply enough energy to growing economies such as China and India.

A renewable energy market of around 200 GW by 2020 is required. The big question is whether governments around the world will provide the reliable policy framework needed, and if infrastructure will be adapted to renewables not the other way round. 

Lead image: Question marks via Shutterstock

18 Sep, 2012

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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/the-big-question-what-can-we-expect-over-the-next-12-months?cmpid=rss
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Renewables and Emissions Trading: Do Schemes like the EU ETS Work?

More than 30 countries around the world are now using emissions trading as the primary vehicle to drive carbon pollution reduction. But while emissions trading schemes are growing in popularity, they are also coming in for heavy criticism over their cost, lack of effectiveness and because they do too little to support the growth of renewables. The key question is whether emissions trading schemes can be made to work successfully, or will they eventually be supplanted by alternative schemes aimed at reducing carbon emissions and boosting renewables growth? 

By far the largest scheme currently in place is the E.U. Emissions Trading System (E.U. ETS). This is the Europe-wide cap-and-trade scheme, which started in 2005 and it is one of the key policies introduced by the E.U. to help meet its greenhouse gas emissions target of 8 per cent below 1990 levels under the Kyoto Protocol. The E.U. ETS covers electricity generation and the main energy-intensive industries — power stations, refineries and offshore, iron and steel, cement and lime, paper, food and drink, glass, ceramics, engineering and the manufacture of vehicles.

Making the E.U. ETS work

Under the terms of the E.U. ETS, each Member State was obliged to develop a National Allocation Plan (NAP), which was then approved by the European Commission. This sets an overall cap on the total emissions allowed from all the installations covered by the system. This is then converted into allowances (one allowance equals one ton of CO2) which are then distributed by Member States to installations covered by the system.

At the end of each year, installations are required to surrender allowances to account for their actual emissions, using all or part of their allocation. Installations can emit more than their allocation by buying allowances from the market. Similarly, an installation that emits less than its allocation can sell its surplus allowances. In any case, the overall environmental outcome remains the same because the amount of allowances allocated is fixed and reduces year-on-year.

The E.U. 2020 Climate and Energy Package saw substantial changes made to the E.U. ETS after Phases I (2005-2007) and II (2008-2012) were criticized for not going far enough to tackle climate change. Consequently, Phase III, which starts in 2013, has been significantly revised to make it more ambitious.

During Phases I and II, allowances for emissions have typically been given free to firms, which has resulted in electricity getting windfall profits. Moreover, a number of design flaws have limited the effectiveness of scheme. In the initial 2005-2007 period, emission caps were not tight enough to drive a significant reduction in emissions and the total allocation of allowances turned out to exceed actual emissions. This drove the carbon price down to zero in 2007.

This oversupply was caused because the allocation of allowances by the E.U. was based on emissions data from the European Environmental Agency in Copenhagen, which uses a horizontal activity-based emissions definition similar to the UN's. The E.U. ETS Transaction log in Brussels, however, uses a vertical installation-based emissions measurement system. This caused an oversupply of 200 million tons (equivalent to 10 per cent of the market) in the E.U. ETS in the first phase and collapsing prices.

Phase II saw some tightening, but crucially, the use of Kyoto flexible mechanism certificates as compliance tools was allowed. The "Linking Directive" allows operators to use a certain amount of Kyoto certificates from flexible mechanism projects in order to cover their emissions. These include Joint Implementation projects (JI) and the Clean Development Mechanism (CDM). JI projects produce Emission Reduction Units (ERUs). One ERU represents the successful emissions reduction equivalent to one tonne of carbon dioxide equivalent (tCO2). The CDM produces Certified Emission Reductions (CERs) with one CER representing the successful emissions reduction equivalent to one tCO2e.

Clearly, some tightening was needed, and so for Phase III (2013-2020) the European Commission has proposed a number of changes, including the setting an overall E.U. cap, with allowances then allocated to EU members; tighter limits on the use of offsets; unlimited banking of allowances between Phases II and III; and a move from allowances to auctioning.

As a result of these changes, Phase III of the E.U. ETS is expected to deliver two-thirds of the E.U.'s unilateral 20 per cent emissions reduction target by 2020 on 1990 levels. This means that by 2020, the E.U. ETS will be saving 500 MtCO2e per year, making it the biggest single policy instrument for addressing climate change in the E.U. These emissions reductions will increase further if the E.U. moves to a 30 per cent GHG emission reduction target, although this looks unlikely given the currently poor economic conditions in Europe, and despite strong support from some E.U. states, particularly Germany.

But despite high hopes for Phase III and all the tweaking that has taken place since 2005, the markets are less convinced that the scheme can ever be truly effective. The E.U. ETS has come in for particularly strong criticism from the Swiss bank UBS, which claims the E.U. ETS has cost the continent's consumers €210 billion for "almost zero impact" on cutting carbon emissions, and has also warned that the E.U.'s carbon pricing market is on the verge of a crash in 2012.

In a report to clients, UBS Investment Research said that had the €210 billion been used in a targeted approach to replace the E.U.'s dirtiest power plants, emissions could have been reduced by 43 per cent "instead of almost zero impact on the back of emissions trading". Describing the E.U.'s ETS as having "limited benefits and embarrassing consequences", the report said there was fading political support for the scheme, the price was too low to have any significant environmental impact, and it had provided windfall profits to market participants, paid for by electricity customers. UBS forecast the E.U. carbon price would average €5 per ton for 2012-2013 with a floor of €3, attributing the slump to a large surplus of permits. "We see few buyers of the surplus until after a 'crash'," the report claims. It argued the surplus could continue until 2025, when the ETS would work as it was supposed to.

14 Sep, 2012

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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/renewables-and-emissions-trading?cmpid=rss
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