Archive for April, 2009
Financing obstacle to renewable energy becoming next green bubble
NPR aired a story this morning covering the potential for renewable energy to be the next investment bubble.
According to NPR, “credit is a problem right now for renewable energy developers” and is one obstacle to there being a “green bubble” in the near future. However, the story suggestions that “legislation that would limit greenhouse gas emissions and then turn them into a commodity that can be traded . . .[s]uch a cap-and-trade system might be the seed for creating the credit necessary to get a renewable energy bubble going . . .Some think the investment banks will get into the cap-and-trade business and figure out a way to use that market to create securities that can then be the foundation for an asset price inflation.” We will see.
The NPR www site also has some excellent interactive maps worth a look that depict existing and possible future locations for power grid connections, along with wind and solar power capacity.
EPA Issues Proposed Endangerment Finding for Greenhouse Gas Emissions
On April 17, 2009, the U.S. Environmental Protection Agency (“EPA”) released a proposed finding under Section 202 of the Clean Air Act (42 U.S.C. § 7521(a)(1)) that greenhouse gases in the atmosphere endanger the public health and welfare.
The decision implements the Supreme Court’s 2007 decision in Massachusetts v. EPA (2007) 549 U.S. 497 (2007). The Supreme Court ruled that carbon dioxide is an “air pollutant” subject to regulation by the Clean Air Act. The case involved a petition to the EPA by several states and environmental groups, pursuant to Section 202(a) of the Clean Air Act, seeking regulation of CO2 emissions from motor vehicles. Section 202(a)(1) of the Clean Air Act requires the EPA to regulate emissions of any air pollutants from mobile sources that “may reasonably be anticipated to endanger public health or welfare.”
The EPA’s proposed endangerment finding is based on rigorous, peer-reviewed scientific analysis of six greenhouse gases. The action, if finalized, would not itself impose any requirements on industry or other entities, however. The scientific analysis also confirms that climate change affects human health in several ways, including the following:
* higher concentrations of ground-level ozone
* increased drought
* more frequent and intense heat waves and wildfires
* greater sea level rise
* more intense storm events
* increased flooding
* harm to water resources, agriculture, wildlife, and ecosystems
A 60-day public comment period commences on the date that the proposed endangerment finding is published in the Federal Register. Public hearings are scheduled in Arlington, Virginia, on May 18 and Seattle, Washington, on May 21.
Green Bank Act of 2009
On March 24, 2009, Representative Chris Van Hollen (D-MD) introduced H.R.1698, the Green Bank Act of 2009. The proposed legislation seeks to establish the Green Bank, an independent, not-for-profit, tax-exempt corporation, wholly owned by the United States, which will provide financial support for qualified clean energy projects and qualified energy-efficiency projects that are unable to obtain low-priced financing in the private credit markets.
The Green Bank Act of 2009 would:
• Provide the Green Bank with an initial capitalization of $10 billion through the issuance of Green Bonds by the Department of Treasury, with a maximum authorized limit of $50 billion in Green Bonds outstanding at any one time.
• Help the country transition to a clean energy economy and create jobs through the construction and operation of clean energy and energy efficiency projects.
• Help the country address other national objectives such as abating climate change, promoting energy independence and fostering long-term domestic manufacturing capacity in clean energy and energy efficiency technologies.
• Include robust spending safeguards and public disclosure requirements for operational efficacy, accountability and transparency.
A project is a “qualified clean energy project” if it:
-is a clean energy project;
-is carried out within the United States;
-pays wages to its employees in accordance with the Davis-Bacon Act;
-stays current on interest- and debt-payment obligations; and
-satisfies any other requirements established by the Green Bank.
Original co-sponsors of the act include Congressman David Loebsack (D-IA), Congresswoman Gabrielle Giffords (D-AZ), Congressman Earl Blumenauer (D-OR) and Congresswoman Madeleine Z. Bordallo (D-GU).
Overview of Funding for Renewable Energy and Energy Efficiency Projects in Vermont via the Federal Stimulus Package
The State of Vermont is slated to receive approximately $48 million from the American Recovery and Reinvestment Act (ARRA) for state programs related to weatherization, energy efficiency, and renewable energy.
In addition to specific weatherization funding, approximately $21.5 million will also be allocated for renewable energy and efficiency programs through the Vermont State Energy Program. The Vermont Office of Economic Stimulus and Recovery reported last week that these federal funds:
will supplement state monies that are targeted for renewable energy and efficiency from the Regional Greenhouse Gas Emissions compact and the Clean Energy Development Funds, giving the state a total $35.1M. We anticipate allocating 50% to renewable energy and 50% to energy efficiency.The Department of Public Service has filed its formal initial application for SEP funding; final applications are due in May of 2009.
According to the State Recovery Office, applications for specific renewable energy and efficiency projects will not be accepted until the ARRA / Stimulus fund become available to the state.
The Obama Administration also announced that Vermont would receive an additional $10.5 million through the Energy Efficiency and Conservation Block Grant (EECBG) Program. This program will provide a direct allocation of funds to the ten largest cities and towns in Vermont, and the remaining funds will be allocated through either a competitive process or through the State Energy Program. This block grant funding will:
support energy audits and energy efficiency retrofits in residential and commercial buildings, the development and implementation of advanced building codes and inspections, and the creation of financial incentive programs for energy efficiency improvements. Other activities eligible for use of grant funds include transportation programs that conserve energy, projects to reduce and capture methane and other greenhouse gas emissions from landfills, renewable energy installations on government buildings, energy efficient traffic signals and street lights, deployment of Combined Heat and Power and district heating and cooling systems, and others.
According to the federal press release, Vermont municipalities will recieve the following amounts:
- Bennington = $57,900
- Brattleboro=$56,100
- Burlington=$180,200
- Colchester=$71,200
- Essex=$50,000
- Essex Junction =$50,000
- Hartford=$50,000
- Milton=$50,000
- Rutland=$78,900
- South Burlington=$85,500
Meanwhile, representatives of the Windham Regional Planning Commission are rightly asking whether counties in Vermont are being shortchanged by the American Recovery and Reinvestment Act. Under the terms of the ARRA, the 10 most populous towns and the 10 most populous counties in the state are supposed to receive direct allocations through the block grant program. Because Vermont does not have a traditional county government structure, that funding has not been allocated to the 10 most populous counties in Vermont. A report in today’s Brattloboro reformer has the story. According to the report, the Vermont congressional delegation “is asking the secretary [of energy] to use the broad authority granted him by Congress to make direct grants to state or regional entities for distribution to eligible counties in lieu of direct grants to county governments.”
Dept. of Interior: Offshore Wind in Focus
U.S. offshore areas hold enormous potential for wind energy development near the nation’s highest areas of electricity demand – coastal metropolitan centers, according to Secretary of the Interior Ken Salazar.
“More than three-fourths of the nation’s electricity demand comes from coastal states and
the wind potential off the coasts of the lower 48 states actually exceeds our entire U.S. electricity demand,” Salazar told a summit meeting of 25X’25 America’s Energy Future, a group working to lower America’s carbon emissions. Secretary Salazar’s comments at the summit can be viewed here.
Interior, which managers of one-fifth of the nation’s land mass and 1.7 billion acres of ocean off the U.S. coasts, will have a major role in creating the nation’s clean-energy future, Salazar said. The Department’s Bureau of Land Management has identified about 20.6 million acres of public land with wind energy potential in the 11 western states and 29.5 million acres with solar energy potential in the six southwestern states. There are also over 140 million acres of public land in the western states and Alaska with geothermal resource potential.
There is also significant wind and wave potential in U.S. offshore waters. The National Renewable Energy Lab has identified more than 1,000 gigawatts of wind potential off the Atlantic coast, and more than 900 gigawatts of wind potential off the Pacific Coast. The Lab estimates that the class 5 wind potential off the coasts of the lower 48 states exceeds the entire U.S. electricity demand. Currently, there are more than 2,000 megawatts of offshore wind projects proposed in the United States.
Demand for Small Cars & Hybrids Down
These two stories appearing the same day last week in the NYT’s caught my attention.
The first story describes how, with much hype, Tesla Motors unveiled its “affordable” all electric sedan. Tesla’s Model S is expected to cost about $50,000 after tax credits. The company is awaiting a decision on its request for a $450,000 million government loan needed to put the sedan into production.
The second story indicates that as gas prices have declined so has demand for small cars, including hybrids.
Could the combination of massive government investments in the U.S. auto manufactures and the fact that consumers’ demand for more fuel efficient cars is tied to gas prices provide political support for a national policy to stabilize gas prices? Apparently, a “whisper campaign” in Detroit has already started in support either raising the gas tax or setting a system that maintains gasoline prices at a certain level.
Vermont legislative committees advance renewable energy bills
The Associated Press reports this morning that bills promoting renewable energy have advanced in the Vermont House and Senate.
One bill, (S. 54) (the House version is H. 161) authorizes municipalities to help finance certain renewable energy and energy efficiency projects. The bill would allow a communities’ voters to authorize the creation of “clean energy districts.” Once a clean energy district is established, the community may incur debt to help finance renewable energy and energy efficiency projects located within the community’s district.
The House Natural Resources and Energy Committee calendar indicates that the committee will continue working on the bill today and tomorrow. The House Committee’s work also includes a proposal to require the Public Service Board to issue a standard contract for SPEED projects to facilitate Vermont’s goal of generating 20% of the power consumed in the state from renewable projects by 2017. The bill calls for wind-power developers to get 20 cents per kilowatt-hour for the power they send to the grid; solar-power developers would get 25 cents.
Recent Comments