JouleBlog

The wind energy industry in the U.S. had a record-breaking year in 2009, installing 10,000 megawatts of new generating power, enough to serve 2.4 million homes, according to the American Wind Energy Association in its fourth quarter report released today. Yet the industry is still plagued by a lack of manufacturing investment, and job creation still lags. Here is a PDF of the report.

The AWEA credits the American Reinvestment and Recovery Act as the impetus for the growth. During the last quarter the wind added 4000 megawatts of new capacity, together with new construction, operations and management jobs. Texas, the top wind-producing state, added 2292 megawatts in new wind capacity, more than twice that of Indiana, which ranked No. 2, with 905 megawatts added. Arizona opened its first utility scale wind project in 2009.

Yet wind power’s prospects for long-term growth are far from a sure bet. Total investment in manufacturing actually dropped compared to 2008; there were one-third fewer wind power manufacturing facilities in 2009 compared to the year before. This resulted in a net loss of manufacturing jobs, which was compounded by low orders and high inventory.

The weak manufacturing outlook caused AWEA CEO Denise Bode to sound a warning: “U.S. wind turbine manufacturing – the canary in the mine — is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow.  We need to set hard targets, in the form of a national Renewable Electricity Standard, in order to provide the necessary stability for manufacturers to expand their U.S. operations and to seize the historic opportunity we have today to build up a thriving renewable energy industry.”

In another development, Detroit Edison and Michigan-based Heritage Sustainable Energy have started commercial operation of a wind farm that will supply the utility’s customers with enough electricity to power about 2,000 homes. The wind farm is the first constructed and operated in Michigan under the state’s energy reform law that will have 10 percent of the utility’s power  generation come from renewable sources such as wind and solar by 2015. The wind farm was built after the utility signed a 20-year agreement to purchase wind power and renewable energy credits from Heritage.

Solar panel installation on a San Francisco rooftop. Source: SolarCity

If you own a home or run a business in California,you could be eligible for financial help to tap into solar power. Pacific Venture Capital, a capital investment unit of the utility PG&E, and solar panel supplier SolarCity Corp., have announced $60 million in tax equity financing for solar installations for U.S. homes and businesses. SolarCity will offer financing options that will allow homeowners and businesses to purchase or lease solar panel installations with no upfront investment. SolarCity expects to install more than 1,000 solar systems under the investment, which is funded by PG&E.

In return for providing the upfront investment needed for the new systems, Pacific Venture Capital will receive lease revenues from SolarCity customers, along with the federal investment tax credits and local rebates for the solar energy projects. The companies say that the deal is the first such tax equity financing investment by a utility holding company and the first such collaboration between a utility holding company and a solar power provider. The solar systems funded under the agreement will be installed in 2010, predominantly in California, with some in Arizona and Colorado. More details are here.

President Obama today announced the award of $2.3 billion in new clean manufacturing projects across the United States. The award comes on the heels of a dismal jobs report that 85,000 jobs vanished in December. Employment in manufacturing declined by 27,000, according to the Bureau of Labor Statistics. Since the beginning of the recession manufacturing employment has fallen by 2.1 million.

Today’s announcement may only put a small dent in those massive losses, but at least it is a step to build domestic manufacturing capacity for renewable energy technology. The funds will come in the form of Recovery Act Advanced Energy Manufacturing Tax Credits, which will support 183 projects in 43 states. The investment tax credits are worth up to 30% of each planned project. It’s estimated that the tax credits will leverage private capital for a total investment of $7.7 billion in high-tech manufacturing in the U.S.

The projects include:

• Itron, Inc., which manufactures a smart meter for the residential market.
• W.L. Gore & Associates,, Inc., which produces a membrane for fuel cells for buildings and vehicles.
• PPG Industries, Inc., which produces a double anti-reflective coating for glass to make solar sells more efficient.
• TPI Composites, Inc., which is building a new manufacturing facility in Nebraska to produce composite wind turbine blades.

The projects selected for the tax credit will be in service by 2014; about a third of the projects will be completed this year. The 183 projects selected today will produce solar, wind and geothermal energy equipment; fuel cells, microturbines and batteries; electric cars; electric grids to support renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions. A full list of the selected projects is here.

The New Year brings a fresh urgency to develop alternative sources of energy. While the Copenhagen Climate talks fell short of expectations for a binding agreement, I side with those who maintain that the deal that was led by President Obama was a positive step in cutting carbon emissions. It got major carbon emitting nations to agree to cuts and provided a commitment to fund developing nations to reduce emissions. At least the U.S. embraced a leadership position in reducing carbon emissions, and, hopefully, the agreement will provide momentum to getting a bill on clean energy and climate passed in the Senate this year.

As important as international agreements are, it now seems sure bet that what came out of the meeting would never measure up to the hype and high expectations that preceded it. Better, perhaps, to get one’s own house in order first. As noted by Thomas Friedman’s column in the December 22^nd New York Times, Denmark provides a good example of how this can be done. The Danish government uses energy taxes to stimulate innovations in green power, and then recycles the revenues back to Danish industry as an incentive for the companies to invest in clean technologies.

According to Friedman, Denmark, the most energy-efficient member of the European Union, has used a mix of carbon taxes, cap-and-trade, building codes and energy labeling systems to reduce its greenhouse gas emissions by 14% during the last decade. Renewable resources account for nearly 30% of Denmark’s electricity today.

It can be done in the U.S., too — but not without the political leadership to make it happen. That’s doubtful in a nation where the political system is a mess of partisan politics, lobbies and stunts like “tea parties” that hijack any real debate on issues. Any talk of energy taxes or shared sacrifice to make the U.S. more energy independent is a non-starter for many Republicans in the Senate, to say the least. And politics is bound to get even more acrimonious with Democrats on the defensive for the upcoming mid-term elections.

That’s tragic, because investments in a green economy, with modern energy and transportation infrastructures, can do much to get the millions of unemployed in this country back to work. This U.S. needs more public investments to get it out of the huge hole it has dug for itself. It needs to set a new direction.

“This opening represents a critical breakthrough for the photovoltaic industry and China and a tremendous benefit to our customers,” said Mike Splinter, chairman and CEO of Applied Materials. “Establishing this center in China is an integral part of Applied’s global strategy and an important step toward the industrialization of the global solar industry.”

Applied Materials  broke ground in Xi’an in 2006 and the total investment in the multi-phase project is more than $250 million dollars. The completed facility includes a solar technology center for R&D, engineering, product demonstration, testing and training for crystalline silicon and thin film solar module manufacturing equipment and processes. Employees in the center will work closely with local suppliers to test and qualify new materials and tools and evaluate potential new cost saving technologies. The center has the largest solar array in Xi’an, a 56 kilowatt array on a parking lot structure.

According to a recent report released by Lawrence Berkeley National Laboratory,the installed cost of PV power systems in the U.S. has declined by more than 30 % from 1998 to 2008. Within the last year of this period, costs fell by more than 4%. according to the report, the most recent decline in costs is primarily the result of a decrease in PV module costs.

Source: BNSF Railway Corp.

Investor Warren E. Buffett described the deal in which Berkshire Hathaway Inc. would acquire all of the remaining shares of Burlington Northern Santa Fe Corp., one of the nation’s largest railroads, as “an all-in wager on the economic future of the United States.” And indeed, Buffett is putting his money on the line: the $44 billion deal, which includes assuming $10 billion of BNSF debt, is the largest acquisition in Berkshire Hathaway history.

“Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” said Buffett, Berkshire Hathaway chairman and chief executive officer. “Conversely, America must grow and prosper for railroads to do well. Berkshire’s $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry.”

Left unsaid is that the deal is a bet that coal will remain a major source of power in this country, according to a blog post in The New Republic. As noted by TNR‘s Bradford Plumer, BNSF hauls enough coal to power 10% of the electricity in the U.S. By investing in the railway, Plummer says Buffett is betting that coal will be a major energy source for years to come, even while the administration seeks to cut carbon emissions. Near term, it also suggests that Buffett believes that environmentalists will fall short in efforts to apply tighter pollution standards to older coal-fired plants that have been exempted from them in the House climate bill.

Energy Secretary Steven Chu today announced the latest in a string of stimulus funding awards–this time directed at industrial facilities. The Department of Energy is awarding $155 million for 41 energy efficiency projects across the country. The industrial sector uses more than 30 percent of U.S. energy and is responsible for nearly 30 percent of U.S. carbon emissions.

Nine projects announced today will promote the use of combined heat and power, district energy systems, waste energy recovery systems, and energy efficiency initiatives in hospitals, utilities, and industrial sites.  Combined Heat and Power and District Energy Systems generate both the heat and power needed for industrial processes on-site, instead of using electricity from the grid, and can be nearly twice as efficient as conventional heat and power production, according to the announcement. The remaining 32 awards will provide local technical support for the industrial sector through university-based Industrial Assessment Centers, state agencies, regional partnerships, and a national technical assistance provider.

Is the Obama administration going far enough in calling the nation to action on energy? Bob Herbert asks that question in his column in today’s New York Times. Herbert lamented that President Obama’s speech on the smart grid last week, in which Obama touted $3.4 billion in energy funding, had fallen flat with the public. So had Vice President Biden’s announcement the same day that federal funds would help re-open an idled former GM plant in Wilmington, Del. to manufacture plug-in hybrid vehicles. As noted by Herbert, more important that the size of the grants was Obama’s call to action for anew direction on energy that will bring much-needed jobs and a more secure future.

I agree. There is a disconnect between President Obama’s eloquent message and its reception. On the other hand, it’s understandable that a public facing unemployment. Stimulus funds are a good thing, and there needs to be more of it. But there also needs to be a much bigger focus on job creation and training. It will take workers to make President Obama’s vision a reality.

What are your thoughts? Can the smart grid be a engine for job growth?

More farms in the U.S. are installing renewable energy, prompted by a spike in energy prices in 2008 as well as grants and tax credits handed out by state, federal and private agencies, according to an Associated Press story yesterday. The numbers of farms using renewable energy are still small: just 23,451 farms out of 2 million generated electricity or some form of energy, according to the 2007 Farm Census. But the numbers are growing. Renewable energy production rose 5% from 2007 to 2008, according to the Energy Information Administration.

The AP also reported that demand for energy grants is also up. There were $9 million worth of applications for just $2.4 million in grants authorized by the 2008 Farm Bill for farm energy audits, which are required for alternative energy grants. In fiscal 2009 USDA Rural Development funded 385 projects, up from 197 renewable energy projects the previous year.

Source: Alstom

American Electric Power and Alstom formally commissioned its Mountaineer Plant on Friday, the world’s first coal-fired power plant to capture and store carbon dioxide. The Mountaineer CSS demonstration project began capturing carbon dioxide Sept. 1 and began storing it Oct. 2. It’s designed to capture 100,000 metric tonnes of carbon dioxide annually. West Virginia Gov. Joe Manchin III and U.S. Sen. Jay Rockefeller (D-WV) attended the event.

AEP’s 1,300-megawatt Mountaineer electric generation plant was retrofitted earlier this year with Alstom’s patented chilled ammonia carbon dioxide capture technology that captures the plant’s exhaust flue gas. The exhaust gas is chilled and combined with a solution of ammonium carbonate, which absorbs the carbon dioxide to create ammonium bicarbonate. The ammonium bicarbonate solution is then pressurized and heated in a separate process to produce a high-purity stream of carbon dioxide.  The carbon dioxide will be compressed and piped for storage into deep geologic formations, roughly 1.5 miles beneath the plant surface. Approximately 90 percent of the CO2 will be captured and permanently stored.

AEP has applied for federal stimulus funding to scale up the Alstom 20 megawatt-electric (MWe) chilled ammonia technology demonstration plant to 235 MWe. The proposed commercial-scale demonstration will capture and geologically store approximately 1.5 million metric tonnes of CO2 per year. Alstom says it will make carbon capture and sequestration technology commercially available by 2015.

In October U.S Energy Secretary Steven Chu announced $55 million to develop advanced technologies that can capture carbon dioxide from flue gases at existing power plants. A few days before that announcement, on October 12, Secretary Chu issued a “call to action” to Energy Ministers and other attendees of the Carbon Sequestration Leadership Forum in London. Noting that coal accounts for 25% of the world’s energy supply and 40% of carbon emissions, Secretary Chu acknowledged that coal would be a major and growing energy source now and in the future. “For this reason, I believe we must make it our goal to advance carbon capture and storage technology to the point where widespread, affordable deployment can begin in 8 to 10 years,” he said.

Is he right? The question of where federal funds should be directed will be sure to heat up as Congress begins to tackle to climate bill, and is sure to be a hot-button issue in cash-strapped states (Like West Virginia) whose economies are strongly tied to the coal industry. Still, I would like to see more funds directed to wind and solar power as well as the infrastructure to carry the power to its end-use markets. I think its money that needs to be spent now if this country is to upgrade its energy supply in the future, and it’s the only way, really, to break away from coal as an energy source to a significant degree.

What’s your take?

Source: Cielo Wind Power

At a time of tight lending by U.S. banks, commercial banks in China have stepped in to put up $1.5 billion for a giant wind farm in West Texas. The project is a joint venture between Austin, Texas-based Cielo Wind Power LP, private equity firm U.S. Renewable Energy Group, and China’s Shenyang Power Group, which will receive the funding through the commercial banks in China. The Associated Press quotes Cappy McGarr, managing director of the U.S. Renewable Group, as saying  the project will also tap into U.S. stimulus funding for renewable energy.

The JV partners say the project is the largest-ever joint U.S.-China investment in renewable energy in America. The 36,000-acre wind farm will have the power to provide electricity to 180,000 homes. A-Power Energy Generation Systems, Ltd., will supply 240 units of the 2.4 megawatt wind turbines, which will be manufactured at A-Power’s facilities in Shenyang, China. A-Power is a shareholder in Shenyang Power Group. A-Power will begin manufacturing the turbines next March and will deliver all 240 turbines by March 2011.

The joint venture says a lot about the positive role of much-needed for stimulus spending and the damage that tight credit continues to have on this economy. Manufacturing has rebounded in China, where it has benefitted from a massive stimulus package. In July T. Boone Pickens’ company, Mesa Power,  dropped its plans for a 4,000 megawatt wind farm in Texas, pinning the decision on tight credit and low natural gas prices. The American Wind Energy Association said last week that in its third quarter the U.S. wind energy industry installed 1,649 megawatts of generating power, an increase compared to the previous quarter. But manufacturing still lagged below 2008 levels.