Ahnold: The First Clean Energy Hero

Ahnold hearts renewables.

Earlier this week, the Governator not only mandated that his state’s utilities produce 33% of their electricity from renewable sources by 2020–he also made it easier for companies to gain permits for renewable energy projects. Go Arnie!

California Governor Arnold Schwarzenegger on Monday terminated talk that the recession will crimp California’s fight against global warming when he ordered every utility in the state to obtain a third of its electricity from renewable sources by 2020. And in a move that will shake up the land rush to build solar power plants in the desert, Schwarzenegger signed an executive order to streamline and prioritize the licensing of such projects.

“One of the great things about California, of course, is that we always push the envelope,” said Schwarzenegger at startup OptiSolar’s solar cell factory in Sacramento, surrounded by a triptych of solar panels, utility executives and environmentalists. “That is why today I’m proposing that we set our sights even higher. This will be the most aggressive target in the nation.”

I Like Wal-Mart More and More Each Day…

The big-box retailer is taking the right steps to reduce their carbon footprint, this time using Texas wind to power their stores:

Wal-Mart has signed a contract to help power hundreds of its stores using wind energy, one of the largest investments in the field by a U.S. retailer.

The four-year agreement with Duke Energy is expected to provide up to 226 million kilowatt-hours of power each year to about 360 stores and distribution centers in Texas, about 15 percent of the total electricity used. The company said the purchase will result in the reduction of about 139,000 metric tons of carbon dioxide, the equivalent of what 25,000 cars would emit.

Big Business: Cap-and-Trade Needed Now More Than Ever

The U.S. Climate Action Partnership, a coalition of 26 companies and environmental groups who support action to fight climate change, came out to reiterate their support for cap-and-trade legislation. The move in an important one because of the dodgy financial situation several member companies (i.e. the Big 3) are in:

U.S. business leaders including the troubled Big Three automakers offered a prescription on Tuesday for economic recovery and job creation: cap the carbon emissions that spur global warming. …
[USCAP] wants reductions in greenhouse gas emissions that are 60 percent to 80 percent below current levels by 2050, a goal that is in line with what President-elect Barack Obama supports. …

“Some of the things you would have to do under climate legislation — becoming more efficient, putting significant dollars into new technology investments and new infrastructure — are all job-creation tools and revenue-producing tools,” [Eileen Claussen, president of the Pew Center on Climate Change] said.

“So rather than viewing the economic downturn as a reason not to do this, many in the business community are viewing this as a reason to do this,” she said.

Utilities May Offer (Not Entirely Altruistic) Help to Auto Companies

A smart move by the utilities, who will benefit from a wholesale switchover to electric cars:

The auto industry’s quest to launch a new generation of electric cars may get a big boost from a sector with much to gain from getting advanced vehicles on the road: U.S. electric utilities.

Top executives at several utilities are mulling the possibility of ordering thousands of the vehicles — known as plug-in electric cars — as an expression of support for the technology they fear could be derailed by the auto industry’s financial traumas. The cars would run primarily on electricity, with gasoline to extend their range, and would recharge by plugging into standard electrical outlets.

Utilities stand to gain by selling the electricity needed to power the cars. Because power companies own tens of thousands of cars for their own company fleets, the idea under discussion involves putting in a substantial order to put weight behind development and, perhaps, persuade Congress to give the auto industry the assistance it needs.

Clean Tech Down 4% in ’09?

It’s really not that bad, considering. Here’s what New Energy Finance predicts:

New investment in low carbon energy will decline by 4 percent in 2008 compared to 2007 due to the global financial crisis but the conditions for growth are intact, research group New Energy Finance said.

Total new investment in low carbon technology is estimated at $142 billion in 2008, down from the record level of $148 billion in 2007.

New Energy Finance said the credit crunch and financial crisis have caused a sharp fall in investment into such energy through public markets and a more modest fall in financing of wind farms, solar parks and biofuel plants.

On the plus side, the research group sees an increase in venture capital and private equity investment into so-called clean energy.

Dream Headline: “Under Obama, Dark Days Seen Ahead For Fossil Fuels”

I read the following in today on CNN Money, and it put a smile on my face:

Under President-elect Sen. Barack Obama, D-Ill., the fossil fuels industry may face “dark days ahead,” while alternative energy sectors are likely to flourish.

Although it will take years to engineer and implement, an Obama administration energy and environment policy marks a tectonic shift for the nation. He would move the U.S. away from petroleum as its primary energy source and towards renewable energy, advanced biofuels, efficiency and low greenhouse-gas-emitting technologies.

And he must be doing something right–Big Oil is already “concerned” about his policies:

Companies such as ExxonMobil (XOM), ConocoPhillips (COP) and Chevron Corp. ( CVX) say they’re concerned about returning to policies enacted in the 1970s, including Sen. Obama’s proposals for a windfall profits tax and market intervention such as tapping the Strategic Petroleum Reserve.

I doubt either of these ideas will be at the top of Obama’s agenda, but it’s still interesting to see the Big Three shaking in their boots.

Partly Cloudy Forcast for Solar

Financial experts predict tight credit markets could mean trouble for certain solar start-ups, who could be swallowed up by more established companies. Though bad for the smaller firms in the short-term, analysts predict the consolidation ultimately will strengthen the industry. Via Reuters:

Many of the world’s solar energy companies could fail or fall into the arms of stronger rivals as the financial crisis raises borrowing costs and as solar module prices fall. [...]

“In our view, too much solar capacity has been added relative to demand, and will lead to oversupply,” Goldman Sachs analysts wrote, adding that the consequences would drive module prices down by about 15 percent next year.

Oversupply and an easing of demand as economies slow will help the cost of photovoltaic solar energy fall in line with the cost of conventional electricity — so-called “grid parity” — which will ultimately give the sector a boost, but not before many companies have fallen by the wayside.

Euro Wind Companies Blowing By U.S. Rivals

Without a price on carbon emissions to make wind energy more cost-effective, U.S. wind companies are being outgunned by their European rivals who’ve been able to thrive under their continent’s cap-and-trade regime. Spanish companies like Iberdrola have already gained a foothold in the U.S. and are looking to expand even further during the economic downturn.  BusinessWeek reports:

Despite a troubled investment climate due to the weak economy, the U.S. wind sector looks set to continue growing—and European companies are likely to increase their role. Tough carbon dioxide emission restrictions forced the Old World’s utilities to embrace clean technology before their U.S. counterparts, giving them a crucial head start.

Their first-mover advantage was buttressed by generous local government subsidies, particularly in Spain and Portugal, that helped make wind energy profitable at an early stage. Now, flush with cash from their European operations, both Iberdrola and EDP have launched aggressive plans to invest billions of dollars in new wind farms across the U.S. by 2012. [...]

“Under current market conditions, the big players such as Iberdrola Renovables and EDP Renovaveis will consolidate in the booming U.S. market,” says Eduard Sala, senior analyst at Emerging Energy Research (EER), a consultancy based in Barcelona and Cambridge, Mass. “Players without finance could be forced to sell, with the large, experienced companies filling the void.”

What was that about climate legislation ruining the U.S. economy? Looks like not having a cap-and-trade mechanism is starting to put us at a competitive disadvantage.

Hot Rocks: Geothermal’s Bubbling Up

The LA Times reports on the booming geothermal business:

Billionaire Warren E. Buffett has invested big. Internet giant Google Inc. is bankrolling advanced research. Entrepreneurs are paying record prices for drilling leases in places such as Nevada, where they’re prospecting for heat instead of metals.

“This is the new gold rush,” said Mark Taylor, a geothermal analyst with the consulting firm New Energy Finance in Washington. […]

Global investment in geothermal was around $3 billion last year, Taylor said. Although that’s a blip compared with the estimated $116 billion funneled into wind and solar, it’s still a 183% increase over investment in 2006. […]

“I’ve been at this 25 years, and I’ve never seen anything like it,” said Shevenell, a research hydrologist. “Money is falling out of the sky.”

Geothermal’s problem isn’t the cost of electricity generation—after all, it’s only 4-7 cents per kWh once the plant’s in place. The cost of getting a geothermal plant online is very high, and it’s these up-front capital costs that have kept it from being competitive on a larger scale.

But Enhanced Geothermal systems (EGS) technology is set to change all this and create a path for full scale-up:

Some say the key to harnessing this energy source on a massive scale lies with a technology known as enhanced geothermal systems, or EGS for short. The idea is to engineer the necessary conditions by pumping water into the Earth’s crust and fracturing the hot rocks below. Heat from the Earth warms the water, whose resulting steam is channeled back to the surface, powering turbines to create electricity. The water is then pumped back underground.

Though still in its infancy, EGS has the potential to open up much of the planet to geothermal development.

EGS “is indeed the sleeping giant of renewable energy,” Dan Reicher, director for climate change and energy initiatives at Google.org, said during a recent industry conference in Reno. “It’s the killer ap.”