Green Tech

Governments and utilities are expected to ramp up their investments in the electrical smart grid, spending a total of $200 billion worldwide from 2008 through 2015, says a new Pike Research report released Monday.

The term "smart grid" is shorthand for a number of technologies intended to automate and digitize management of electrical power. By computerizing the 20th century electrical system, utilities and others in the power industry hope to manage and control electrical output more efficiently and reliably. Though smart grid sounds like it's a single system, it's more an array of different tools and technologies, from smart meters to solar power, all designed to reduce costs, waste less energy, and provide better networking and communications between homes and utilities.

(Credit: Pike Research)

Technologies to automate the grid are expected to win around 84 percent of that $200 billion, says Pike. Smart metering systems to track and analyze the usage of electricity, gas, and water will grab 14 percent, while systems to provide juice to electrical cars will garner the remaining 2 percent.

"Smart meters are currently the highest-profile component of the Smart Grid, but they are really just the tip of the iceberg," said Pike managing director Clint Wheelock in a statement. "Our analysis shows that utilities will find the best return on investment, and therefore will devote the majority of their capital budgets, to grid infrastructure projects including transmission upgrades, substation automation, and distribution automation."

Though the grid has seen some technological advancements, it still suffers from a lack of intelligence and automation that would provide greater efficiency and cost savings, according to Pike. Four key goals will drive higher investments in the grid: improving reliability and security; improving operating efficiencies and costs; balancing power generation supply and demand; and reducing the overall electrical system's impact on climate change.

So far, development of the grid has been hurt not just by technical and financial limitations but also by a lack of vision and common standards, outdated regulations, and misunderstanding and even mistrust on the part of the industry over how the public consumes electricity, says Pike. As as result, government and industry bodies see the investment in the grid as a high priority.

As part of its push toward greener and more efficient technology, the U.S. government recently said it would spend about $3.4 billion of stimulus money on state-run smart-grid projects, with utilities kicking in another $4.7 billion. With such strong investment, Pike believes that industry revenues from the smart grid will likely reach their peak in 2013 and then taper off to become a smaller but still robust market over the foreseeable future.

Images: The many faces of the smart grid

A new Chinese law requires power grid operators to buy all the electricity produced by renewable energy generators, in a move that will increase the proportion of energy that comes from renewable sources in coal-dependent China.

The amendment to the 2006 renewable energy law was adopted on Saturday by the standing committee of the National People's Congress, China's legislature, the Xinhua news agency said.

The amendment also gives authority to the State Council energy department, together with the State Council finance department and the state power authority, to "determine the proportion of renewable energy power generation to the overall generating capacity for a certain period."

Many other countries also have requirements that grid operators priorities the dispatch of power from renewable sources, even if it is more expensive than coal-fired base load plants.

In China, a boom in wind-power plants thanks to government subsidies has resulted in a large amount of wind capacity that is not always properly connected to the grid. In some cases, the wind farms are not located at the optimal spot for wind.

One-third of China's installed wind power capacity is not well connected to the grid, Xinhua said, citing industry experts.

Much of China's wind power is installed in remote, wind-swept regions like Inner Mongolia and Gansu, where power demand is low. But some of the country's cheapest coal generators are also in Inner Mongolia, pricing the wind farms out of the power market.

"Renewable energy power in the country's resource-rich, underdeveloped northwestern region must be sent to the resource-scarce, prosperous coastal area," said Wang Zhongyong, renewable energy director at the National Development and Reform Commission's Energy Research Institute, according to Xinhua.

The relative independence of regional grids made such transmission difficult, Wang said.

China must develop more efficient "smart grids" as part of the solution, said Xiao Liye, director of the Institute of Electrical Engineering of the Chinese Academy of Sciences.

The new requirement will also benefit China's massive new nuclear power plants, although nuclear power is usually cheap enough to be competitive on its own.

Grid operators refusing to buy power produced by renewable energy generators could be fined up to double the loss suffered by the renewable energy generator, the amendment said.

China's target is for renewable energy sources to make up 15 percent of its power generation by 2020, up from about 9 percent currently. It also targets a reduction in carbon intensity, or the amount of carbon produced per unit of GDP, of between 40 and 45 percent by 2020 compared with 2005.

Story Copyright (c) 2009 Reuters Limited. All rights reserved.

2010 Ford Fusion Hybrid

(Credit: CNET)

Ford Motor's hybrid sales are up 67 percent this year, despite an overall industry slump of 11 percent, the company reported.

The carmaker sold 31,000 hybrid cars through November this year--which was higher than its previous sales record set in 2007. The company said Wednesday that it pinned part of the increase on the release of the Ford Fusion Hybrid and Mercury Milan Hybrid. Both vehicles get 41 mpg in the city and 36 mpg on the highway, Ford said. The Fusion Hybrid, which was released in March, represents 45 percent of all Ford hybrid sales for 2009.

Ford's goal is to make 10 percent to 25 percent of its fleet "electrified" by 2020. That's the equivalent of 800,000 to 2 million cars. "Electrified" covers hybrids, plug-in hybrids, and battery-electric vehicles.

2010 Mercury Milan Hybrid

(Credit: Corinne Schulze/CNET)

President Barack Obama said on Wednesday that disappointment over the outcome of the Copenhagen climate change summit was justified, hardening a widespread verdict that the conference had been a failure.

"I think that people are justified in being disappointed about the outcome in Copenhagen," he said in an interview with PBS Newshour.

"What I said was essentially that rather than see a complete collapse in Copenhagen, in which nothing at all got done and would have been a huge backward step, at least we kind of held ground and there wasn't too much backsliding from where we were."

Sweden has labeled the accord Obama helped broker a disaster for the environment, British Prime Minister Gordon Brown said the summit was "at best flawed and at worst chaotic," and climate change advocates have been even more scathing in their criticism.

The talks secured bare-minimum agreements that fell well short of original goals to reduce carbon emissions and stem global warming, after lengthy negotiations failed to paper over differences between rich nations and developing economies. Some singled out China for special blame.

British Environment Minister Ed Miliband wrote in the Guardian newspaper on Monday China had "hijacked" efforts to agree to significant reductions in global emissions. Beijing denied the claim and said London was scheming to divide developing countries on the climate change issue.

Obama did not point any fingers, but did say the Chinese delegation was "skipping negotiations" before his personal intervention.

"At a point where there was about to be complete breakdown, and the prime minister of India was heading to the airport and the Chinese representatives were essentially skipping negotiations, and everybody's screaming, what did happen was, cooler heads prevailed," Obama said.

Obama forged an accord with China, India, Brazil and South Africa in the conference's final hours after personally securing a bilateral meeting with the four nations' leaders.

"We were able to at least agree on non-legally binding targets for all countries--not just the United States, not just Europe, but also for China and India, which, projecting forward, are going to be the world's largest emitters," he said.

The PBS interview with Obama can be viewed here

Story Copyright (c) 2009 Reuters Limited. All rights reserved.

WASHINTON--Two U.S. senators pledged on Tuesday to take up legislation early next year to extend the biodiesel tax credit as it looks likely action will not be taken on it this year.

An industry group complained that if a bill was passed by Congress early next year to extend the credit, it would not be enough to stop plants from closing after the credit expires on December 31.

Sen. Max Baucus, a Democrat from Montana who is chairman of the Senate Finance Committee, and the panel's top Republican, Sen. Charles Grassley of Iowa, said they would take up legislation to extend the $1-per-gallon tax credit and an array of other tax breaks as soon as possible after Congress convenes next year.

The credit extension has been delayed by the health care debate and because it has been linked with other tax incentives.

The renewable fuels industry was angry that legislation has not yet passed in the Senate. A so-called extenders bill passed in the House of Representatives earlier this month that would keep the credit going to the end of 2010. But industry had wanted five-year extensions to be passed before the end of the year.

"Very frustrating," said Monte Shaw, director of the Iowa Renewable Fuels Association. "Congress has really dropped the ball on this."

He said he appreciated that Baucus and Grassley hope to move on it early next year. But he said biodiesel plants are already losing contracts to make the fuel because of the credit not yet being renewed and oil refiners are afraid they will not get the credit for blending the fuel.

Plants will shut after December 31 and thousands of people could lose their jobs until the credit is renewed, Shaw said.

The White House has said the extension of the tax credit for biodiesel would provide "clean energy companies with the certainty they need to make critical investments in the nation's energy future."

Soybean oil is a primary feedstock for making biodiesel. Eleven percent of this year's soybean crop will be used for biodiesel, according to a U.S. Department of Agriculture estimate.

The American Soybean Association has said failure to renew the incentive could reduce prices paid to farmers for their soybeans by 25 cents or more per bushel.

Story Copyright (c) 2009 Reuters Limited. All rights reserved.

Updated at 2:30 p.m. PST with additional information on PG&E deal.

SolarReserve said on Tuesday it has signed a deal to build a utility-scale solar plant in Nevada with a molten salt storage system that will let it supply power when the sun isn't shining.

The Santa Monica, Calif.-based company has a 25-year power purchase agreement with utility NV Energy to supply about 480,000 megawatt-hours of electricity a year, enough to power about 75,000 homes during peak times. The capacity of the concentrating solar system will be 100 megawatts and be located near the town of Tonopah in Nye County, Nev.

The plant will use a field of heliostats--large mirrors that track the movement of the sun--to heat molten salt held in a tower. That liquid salt is heated to over 1,000 degrees Fahrenheit and transferred to storage tanks. It is then fed into a loop where it creates steam that turns a turbine to generate electricity. The colder molten salt is recaptured and fed back into tanks to be heated again.

Click for larger image.

(Credit: SolarReserve)

The company did not indicate how many hours of storage it intends to have at the Tonapah plant but said that the solar field will be able to deliver energy at peak times even when the sun isn't shining.

Construction of the project is expected by the end of 2010, but it still needs approval from the Nevada Public Utilities Commission.

The southwest U.S. is prime land for concentrated solar thermal technology, which needs the right sun angle and a lot of sunlight. Utilities in California and other states are pursuing large-scale solar projects to meet state mandates for renewable energy generation.

The addition of a storage system adds to the overall cost per kilowatt-hour of solar. But it allows the power producer to deliver electricity during peak times when the cost of electricity is highest.

Also on Tuesday, California utility Pacific Gas & Electric said that it has signed a contract to purchase electricity from a SolarReserve-developed project at the Rice Airfield in San Bernardino County, Calif.

The proposed Rice Solar Energy project, which has not yet been approved by state regulators, would produce 150 megawatts of electricity, or enough to power 60,000 average homes, starting in 2013, according to PG&E.

In a company blog, PG&E said that the molten salt storage technology was successfully demonstrated in the 1990s at the Solar Two power plant in California, and plants in Spain have also used the technique. "Best of all, a well-insulated storage tank for molten salt can be 99 percent efficient, so it loses heat only very gradually," company representative Jonathan Marshall wrote.

U.S. lawmakers face an uphill battle enacting a climate bill in 2010 that includes a cap-and-trade market in greenhouse gases, after this month's U.N. meeting in Copenhagen failed to hammer out a global pact on emissions cuts.

U.S. climate legislation remains likely as lawmakers feel pressure to help the country lead in production of low-carbon energy sources such as wind, solar, and nuclear power.

But the Copenhagen Accord did not include emissions targets. This will make it difficult for lawmakers to argue that the United States should have a cap while China, the world's top emitter of greenhouse gases, and other big polluters are not legally required to act on climate.

"We were previously of the view that cap and trade was becoming an increasingly hard sell in the U.S.," said Paul McConnell, an energy markets analyst at Wood Mackenzie. "But I think the events in Copenhagen have probably made that even more difficult."

Alternatives to cap and trade will emerge, such as mandates and incentives for increasing levels of energy from low-carbon sources like solar, wind, and nuclear.

Further delays in launching a trillion-dollar market in U.S. rights to emit greenhouse gases will disappoint potential investors and dealers looking toward a trading scheme that could be several times larger than the one in Europe.

The health care debate has delayed U.S. Senate action on climate, and financial industry reform legislation will likely push back the cap-and-trade debate into early next year, analysts said.

The longer the delay, the harder it will be to convince undecided Democratic senators to vote for a cap-and-trade plan.

"For a lot of moderate Democrats who are up for re-election, they don't want to be seen as closely attached to this because of the concerns about job losses and higher energy prices," said Divya Reddy, an analyst at the Eurasia Group in Washington.

Said McConnell: "Cap and trade potentially could have economic impacts, which many senators would be loathe to push onto the U.S. economy right now," as it struggles to recover from recession.

That could make it harder for the three senators working on a compromise climate bill -- Democrat John Kerry, Republican Lindsey Graham and independent Joe Lieberman -- to come up with the 60 votes required to pass the measure with cap and trade. Such a proposal was included in the climate bill that passed narrowly in the House of Representatives in June.

Failure to pass a U.S. cap and trade program could have international implications. It could delay development of a similar market in Canada, which has signaled it will follow the U.S. lead on an greenhouse gas emissions mechanisms.

Lengthy delays could also hamper investments in energy efficiency and low-carbon sources like wind, solar, and nuclear power. Experts say such alternatives would remain more expensive than today's dirtier technologies.

"Plan B" alternatives
Kerry said in Copenhagen last week that the Senate bill may not contain cap and trade, and other options are being discussed.

So-called "Plan B" alternatives to cap and trade could include carbon taxes and national mandates for power generators to produce higher levels of cleaner energy sources, Reddy said.

A new climate strategy could also include elements of a "cap and dividend" plan recently introduced by two senators. That aims to cut Wall Street's role in emissions markets by auctioning permits to polluters and delivering most of the proceeds to the general public.

But Kevin Book, an analyst at Clearview Energy Partners said many senators and many companies, like oil major ConocoPhillips and power generator Duke Energy, are already sold on cap and trade. Some power companies that have invested in low-carbon electricity generation feel they could compete better against companies that burn mostly coal under a cap-and-trade regime.

In addition, the U.S. Environmental Protection Agency may become more aggressive on forcing polluters to cut emissions after issuing a finding late this year that greenhouse gases endanger human health.

Still, the lack of a global agreement on emissions cuts will make it hard for U.S. lawmakers to convince the public to accept caps on emissions that get stricter over time.

"There's definitely scope for other solutions," McConnell said. "For the U.S. to put itself under strict and binding emissions targets when other major emitters aren't doing the same thing, represents something of a challenge."

Story Copyright (c) 2009 Reuters Limited. All rights reserved.

First Solar employees work on the solar power station in Blythe, Calif.

(Credit: First Solar)

Solar module maker First Solar on Monday opened the largest photovoltaic solar power station in California, which the company plans to replicate in order to expand its utility business.

The plant in Blythe, Calif., which First Solar purchased from energy developer NRG, will have the capacity to generate 21 megawatts of electricity, or enough to power about 17,000 homes. It will supply electricity to Southern California Edison under a 20-year purchase power agreement.

It's one of a number of projects that First Solar is pursuing as it seeks to expand in the utility-scale solar business. A deal to build a 48-megawatt plant in California to supply Pacific Gas & Electric was approved last week. "The development, project finance and construction of this solar plant demonstrate First Solar's capabilities in utility scale projects," Bruce Sohn, president of First Solar, said in a statement.

First Solar's panels, which use thin film solar cells made from cadmium telluride, are considered the lowest cost solar panel in the industry. The company's relatively low cost and the technology's track record make it attractive to utilities that need to meet the California renewable energy mandate.

COPENHAGEN--U.N. climate talks ended with a bare-minimum agreement on Saturday when delegates "noted" an accord struck by the United States, China, and other emerging powers that falls far short of the conference's original goals.

"Finally we sealed a deal," U.N. Secretary-General Ban Ki-moon said. "The 'Copenhagen Accord' may not be everything everyone had hoped for, but this...is an important beginning."

A long road lies ahead. The accord--weaker than a legally binding treaty and weaker even than the "political" deal many had foreseen--left much to the imagination.

It set a target of limiting global warming to a maximum 2 degrees Celsius over pre-industrial times--seen as a threshold for dangerous changes such as more floods, droughts, mudslides, sandstorms, and rising seas. But it failed to say how this would be achieved.

It held out the prospect of $100 billion in annual aid from 2020 for developing nations but did not specify precisely where this money would come from. And it pushed decisions on core issues such as emissions cuts into the future.

"This basically is a letter of intent...the ingredients of an architecture that can respond to the long-term challenge of climate change, but not in precise legal terms. That means we have a lot of work to do on the long road to Mexico," said Yvo de Boer, head of the U.N. Climate Change Secretariat.

Another round of climate talks is scheduled for November 2010 in Mexico. Negotiators are hoping to nail down then what they failed to achieve in Copenhagen--a new treaty to replace the Kyoto Protocol. But there are no guarantees.

Story Copyright (c) 2009 Reuters Limited. All rights reserved.