July 16, 2010 – Volume 13, Issue 6
I N · T H I S · I S S U E


The Good, the Bad, and the Ugly

What a week: Obama invests $2 billion in solar and creates thousands of jobs. PACE is “on the ropes.” A major heat wave hits New England. The Gulf oil spill hits day 85; crude has swept around the Keys and past Miami.

Let’s begin with “the good:” A $2 billion commitment of taxpayers’ money for solar. These funds provide a federal loan guarantee to build one of the world’s largest solar plants in Arizona, and cadmium telluride panel manufacturing plants in Colorado and Indiana. Abengoa – featured on EcoMotion’s 2008 solar research tour to Spain – will build a 250 MW concentrating solar plant about 70 miles south of Phoenix.

Big news? Yes, now perspective: The Obama administration is considering adding $40 billion and up to $147 billion in federal subsidies for the nuclear industry. That’s commitment.

“The bad,” PACE – “the son of AB 811” and spearheaded by pioneering efforts in Berkeley and Palm Desert, scaled in Sonoma County, California – is at best, very significantly derailed. Just as major programs are launching throughout California,and enabling legislation has passed in 22 states (with 16 more in the works), PACE may no longer live up to its name.

Property Assessed Clean Energy is on the ropes due to a Federal Housing Finance Authority (FHFA) ruling that under no circumstances will Fannie Mae and Freddie Mac loans be subordinated by PACE liens. With the housing industry blamed for catalyzing the economic crisis, some experts believe the chances of legislation overriding the ruling is slim. Others claim that the momentum is on their side, and that federal legislation will rectify the situation.

What if legislative attempts fail? California’s Attorney General Jerry Brown has already filed suit. Without the “first position” in the event of delinquency and ultimately foreclosure and tax sale, mortgage lenders will be loathe to accept such encumbrances, and the bond market is unlikely to provide interest rates that are at the core of an attractive program for consumers.

San Francisco's new, $150 million GreenFinanceSF program was suspended after the FHFA announced that the PACE program is potentially risky and inadvisable for mortgage lenders. Sonoma County – despite vigorous objection to the FHFA ruling -- suspended its program this week until its board re-opened the program with full disclosure and Board direction to work with local lenders unaffiliated with Fannie Mae and Freddie Mac. The City of Palm Desert suspended its program. Fourteen additional California counties plus an independently run Los Angeles County program planned to embark on similar endeavors later this year.

Worse sign yet of a total program collapse is that the White House and DOE have withdrawn their support for PACE, the DOE notifying recipients of stimulus funding for PACE program marketing and outreach to redirect these funds. Despite gubernatorial, mayoral, and senatorial pleas, the almighty FHFA that controls the mortgage market rules appears to be rooted in its position. That’s the really bad.

The ugly continues. Day 85+. Despite the engineering horsepower of the world, the unlimited spending of British Petroleum – that now wishes it really was “Beyond Petroleum” – the gusher continues, with oil spreading around the region. More than ten times the size of the Exxon Valdez spill. Is there an end in sight? Will the new cap, in place now for 24 hours, continue to hold?

Support for offshore oil drilling – both deepwater (defined as 1,000 feet and deeper) -- and in depths of less than 500 feet -- is fading fast. Public support has dropped from 63% pre-spill support to 44% in a recent Pew Research Center poll. This in contrast to 78% support for increased building efficiency standards; 75% support for increased federal funding for increased research on solar, wind, and hydrogen; and 64% for increased subway, rail, and bus. Every day seems to sharpen the national focus.

Atlantic Seaboard Heat Wave

Power systems from Virginia to New England were put to the test this past week. Over 100 cities recorded new record temperatures, blistering heat that sent many to cooling shelters, and engaged utility load management and demand response programs. Some say thanks to the economic downturn and the short work week, the power grids held up on July 6 and 7, the days of most intense heat. New York City registered over 100 for two days in a row.

The New York Independent System Operator recorded its third highest peak demand ever, 33,452 MW. (The first and second highest peaks were in August 2006.) This peak compares to average use in 2009 of 18,126 MW, and favorably to NYISO’s 2010 reserve of 38,970 MW and 43,001 MW of available capacity including 2,251 MW of demand response and 2,645 MW of imports. On July 6, the New England ISO registered its fourth highest peak demand of 27,154 MW.

The Electric Highway

The Washington State Department of Transportation, armed with a $1.32 million grant from the U.S.DOE, is planning the nation’s and world’s first electric highway. Two hundred and seventy-six miles of Interstate 5 will be electrified from the Canadian border to the Oregon state line. Charging stations are planned for every 80 miles. WSDOT is planning 7 – 10 “Level Three” fast charging stations along the route that can charge vehicles in 15 – 30 minutes. Planners now are looking for shopping center venues for the chargers, places where vehicle owners can grab a cup of coffee and quick massage while they charge up. The project still has quite a few important details to sort through, where exactly the stations will go, how much a charge will cost, and the source of the EV power.

Meanwhile, in East Tennessee, 350 EV charging stations are being identified to provide the value of a robust EV infrastructure. Knoxville, Nashville, and Chattanooga are test markets for the all-electric Nissan LEAF. Publically accessible EV charging stations are slated to open to the public in September.

As part of “the EV Project,” a $230 million federal study into the needs and driving habits of electric car drivers, nearly 15,000 charge stations will be introduced in four states -- Washington, California, Arizona, and Tennessee -- and the District of Columbia. Just in time: The Chevy Volt is expected to go on the market this November with a 40-mile electric range.

Windy Plans for New York

The American Wind Energy Association states that eight countries have wind turbines installed offshore providing clean, renewable electricity: Denmark, Belgium, Sweden, Finland, Germany, the United Kingdom, the Netherlands, and Ireland. Additional countries with offshore projects planned by 2015 include France, Italy, Norway, Poland and Spain.

The U.S. offshore market is growing at a fast pace: At the beginning of 2009, there were five offshore projects planned off American coasts. At the end of 2009, there were 20. The target is 54 GW offshore capacity by 2030. At present, 83% of all offshore turbines are manufactured in Europe.

Last month, the Atlantic Offshore Wind Energy Consortium was established. It consists of the U.S. Department of the Interior Secretary Ken Salazar and the governors from Massachusetts, Maine, New Hampshire, Rhode Island, New York, New Jersey, Delaware, Maryland, Virginia, and North Carolina. They signed a Memorandum of Understanding to streamline offshore projects spanning multiple states.

The concept for offshore wind in New York comes from Governor Paterson’s Renewable Energy Task Force and the Governor’s 45*15 program which establishes the goal for the State to achieve 45% of its electricity needs through improved energy efficiency and renewable sources by 2015.

There is a bit of an offshore history in Southeast New York: In August of 2007, LIPA terminated the project to install 40 wind turbines off the coast of Jones Beach. Main reasons cited included strong opposition from local groups due to its close proximity to land, the rising cost of the technology at the time, and poor economies of scale. More recently, a joint feasibility study conducted by Con Edison and LIPA concluded that an interconnection of up to 700 MW of wind power would be feasible with transmission system upgrades. This has catalyzed the Long Island – New York City Offshore Wind Project is a public-private partnership being advanced by a collaborative that includes Con Edison, Long Island Power Authority, New York Power Authority, New York City Economic Development Corporation, New York State Energy Research and Development Authority, The Port Authority of New York & New Jersey, and the Metropolitan Transportation Authority.

Now the New York Power Authority is seeking a 25 year lease for 64,500 acres of Atlantic Ocean, 13 – 15 miles off the Rockaway Peninsula, from the Federal Bureau of Ocean Energy Management. The lease will be for a 350 – 700 MW offshore wind farm slated to be built by 2016 after nearly a billion of transmission upgrades. The 350 MW wind facility operating at 30% of its nameplate capacity would generate 920,000 MWh per year, enough energy for over 250,000 homes.

New York's installed wind capacity totals 1,274 megawatts, up from 424 megawatts since last March. That represents a three-fold increase in on-land wind generation capacity in 2008, according to figures released by the New York Independent System Operator (NYISO), operators of the State’s power grid.

There are presently no offshore wind projects in commercial service today, but there are a number of announced ones. A few projects nearby have been announced or are at various stages of development. Cape Wind (420 MW) in Nantucket Sound is the furthest along. Other projects include Garden State Offshore Energy in the Atlantic Ocean (345 MW) and NYPA’s Great Lakes Offshore Wind Project in Lake Erie and/or Lake Ontario (120 MW), and the Long Island – New York City Offshore Wind Project.

The Greenpeace Top Ten Ways to Use Less Oil

1. Carpool, cycle or use public transport to go to work.

2. Choose products packaged without plastic and recycle or re-use containers.

3. Buy organic fruits and vegetables. Fertilizers and pesticides are often oil derivatives.

4. Buy beauty products (shampoo, soap, make-up) based on natural ingredients, not oil.

5. Choose locally produced products to cut transport requirements.

6. Buy clothes made out of organic cotton or hemp - not from oil derivatives.

7. Use non-disposable items for picnics and summer festivals.

8. Quit bottled water.

9. Fly less.

10. Demand that your government encourage renewable energy instead of oil.

Chinese to Double World PV Output

China may double the world’s capacity for making solar panels by loaning Yingli Green Energy Holding Co. 36 billion yuan ($5.3 billion) to expand production. These funds, provided by the state-run China Development Bank Corporation, follow an agreement to lend up to 50 billion yuan to Suntech Power Holdings Co. in April. Some 30 billion yuan was also loaned to Trina Solar Ltd. in the same month. Yingli expects its newest production lines to reach full capacity by the end of the third quarter, raising its total annual output capacity to 1 gigawatt.

The loans and their resulting panel production are enough to increase the world’s solar wafer and cell capacity by 100%. They will allow the Chinese companies to deliver unprecedented economies of scale. The money will allow China to strengthen its position as the world’s largest maker of solar panels.

Reusing the Atomic Proving Grounds

The U.S. Departments of Energy and Interior have signed an interagency memorandum and have announced that the southwest corner of the “proving grounds” in Nevada – the Nevada atomic bomb test site – will be converted to a Solar Demonstration Zone to demonstrate cutting-edge solar energy technologies. The land is owned by the Department of Interior's Bureau of Land Management (BLM) and administered by DOE's National Nuclear Security Administration.

"The Nevada Test Site is about to play a new role in securing America's future—but instead of testing nuclear weapons, we will test new solar technologies that will help put America on a sustainable energy path," said DOE Secretary Chu. Under the agreement, the federal government is dedicating more than 25 square miles to solar energy research. DOE will use the site to demonstrate innovative concentrating solar power (CSP) technologies. Plans are underway to create a new DOE funding opportunity for demonstration projects at the Nevada Test Site that will include matching investments from the private sector.

In related news and according to the latest issue of the EIA Monthly Energy Review, during the first quarter of 2010, renewable energy sources (biomass, biofuels, geothermal, solar, water, wind) accounted for 10.73% of domestic energy production. And the renewable levels are growing. Nuclear power accounted for 11.54% of domestic energy production while experiencing a drop of 1.5% compared to the first quarter of 2009.

According to a new report by Dr. John Blackburn, the former chancellor of Duke University, solar electricity has become cheaper than that from new nuclear power plants in North Carolina, and will be far less expensive before nukes could be built. Solar photovoltaic and hot water system costs have fallen steadily for years, and are projected to fall even more over the next 10 years due to manufacturing and installation advances. The report explains that states with open competition for electricity sales are rejecting the nuclear gamble in favor of the combined economic and environmental benefits of solar, wind, cogeneration and energy efficiency. At least 20 states are ahead of North Carolina in developing clean energy. By contrast, the report shows, states with monopoly power markets are the ones still proposing to build new nuclear plants – with each project absorbing billions of public dollars.

The Nation’s Largest Net Zero Building

The federal government has just finished construction of the 222,000-square-foot Research Support Facility, America’s largest zero-energy office building. The demonstration is located at the Department of Energy’s National Renewable Energy Laboratory campus in Golden, Colorado.

Thanks to various “passive” design techniques and technologies, the facility will consume 50% less energy than buildings constructed to current commercial codes. The remaining power needs will be generated on-site from solar panels, allowing the building to operate at an annual net-zero energy basis. NREL expects the project to get a platinum rating from the United States Green Building Council’s Leadership in Energy and Environmental Design and plans to share the building’s design through publication of a how-to manual at the laboratory’s web site this fall.

Earth Policy and Bicycle Data

A new study published by the Earth Policy Institute, written by Lester Brown, finds that few methods of reducing carbon emissions are as effective as substituting a bicycle for a car on short trips.

World bicycle production, averaging 94 million per year from 1990 to 2002, climbed to 130 million in 2007, far outstripping automobile production of 70 million. China, with 430 million bikes, has the world’s largest fleet, but ownership rates are higher in Europe. The Netherlands has more than one bike per person. Among the industrial-country leaders in designing bicycle-friendly transport systems are the Netherlands, where 27 percent of all trips are by bike, Denmark with 18 percent, and Germany, 10 percent. By contrast, the United States and the United Kingdom are each at 1 percent. Sales of electric bicycles also have taken off; in the United States and Europe, combined sales now exceed 300,000 per year.

Residential Solar Financing

Pacific Energy Capital II, LLC, a non-utility subsidiary of PG&E Corporation, and SunRun Inc., a provider of home solar financing, have announced a $100-million tax equity project financing agreement to fund SunRun’s installation of more than 3,500 new home solar installations across the nation. The investment creates the largest residential solar financing vehicle established to date.

SunRun offers home solar power without high upfront costs through power purchase agreements (PPAs) and solar leases. Through SunRun’s solar plans, homeowners pay as little as no money down to get solar panels installed, followed by a monthly payment. SunRun provides complete solar maintenance, monitoring, repairs, insurance and money-back performance guarantee.

The solar systems funded under the agreement are expected to be installed in 2010 and 2011 in states including Arizona, California, Colorado, Massachusetts, and New Jersey. SunRun currently serves more than 4,000 customers in these five states and is growing at 500% per year. The company partners with 15 solar integrators for installations across the country.