Renewable Energy Memo

May 30, 2011

Taylor English Duma Renewable Energy Blog

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September 7, 2010

Corn Prices Surge. Is Ethanol to Blame?

Corn prices have surged but, as Biofuels Digest reports, the culprit this time is a poor harvest and shutdown of grain exports from Russia.

U.S. ethanol production remains sluggish as low gas prices and a lack of investment capital have held back plans for new plants.  In addition, Congress’  inability to  extend biofuel subsidies that expired that the end of 2009 means that China has surged ahead of the rest of the G20 both in energy consumption and in clean energy investment.

March 15, 2010

Alternative Fuel Producers Push for 30% Investment Tax Credit

Filed under: Biofuels,biomass,CleanTech investing — Tags: , , , , , — Jonathan B. Wilson @ 6:00 am

Blue Fire Ethanol and a consortium of 31 other alternative fuel producers have sent a letter to Congress asking for a 30% investment tax credit for biofuels.  While alternative fuel producers were encouraged by last week’s passage of extenders legislation to extend the alternative fuel mixture and biodiesel excise tax credit programs, those extentions are temporary.

While the national renewable fuels standard contemplates increasing amounts of biofuels by 2010, there are no commercial scale cellulosic ethanol plants schedule to come online before 2011, according to one industry letter sent to Congress.

March 11, 2010

Alternative Fuels Tax Credits Extended

The U.S. Senate yesterday voted by a margin of 82-36 to pass the American Workers, State and Business Relief Act, which included H.R. 4213.  That bill includes a one year extension of the biodiesel excise tax credit and the alternative fuel mixture credit.

Producers reacted with a sign of relief and reportedly have re-commenced or ramped up production in response to the news. 

For more background on the biodiesel and alternative fuel excise tax credits, please check out our recent podcast on Lexis-Nexis.

February 23, 2010

Senate Passes Jobs Bill Without Alternative Fuel Tax Credit Extension

Filed under: Biofuels,biomass — Tags: , , , — Jonathan B. Wilson @ 7:47 am

The Senate voted yesterday to move  forward with Senator Reid’s stripped-down version of the Hiring Incentives to Restore Employment Act.  The bill could be voted upon by the Senate by the end of the week.  Reid’s version of the bill, however, omits the extension of the alternative fuel mixture and biodiesel tax credits that were included in the earlier (Baucus/Grassley) version of the bill.

February 3, 2010

Administration Announces New Program to Promote Biofuels and Renewable Energy (RFS2; Carbon Sequestration; Biomass Crop Assistance Program)

President Obama today announced a series of steps as part of a comprehensive strategy to enhance American energy independence and build a foundation for a new clean energy economy. The administration believes that the strategy will create new industries and millions of jobs. (Reuters;  Reaction from Renewable Fuels Association).  At a meeting with a bipartisan group of governors,  the President set forth three efforts that he believes will work in concert to boost biofuels production and America’s dependence on foreign oil:

• The Environmental Protection Agency (EPA) has finalized a rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress.

• The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy. 

• The President’s Biofuels Interagency Working Group released its first report – Growing America’s Fuel. The report, authored by group co-chairs, Secretaries Vilsack and Chu, and Administrator Jackson, lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets. 

In addition, President Obama announced a Presidential Memorandum creating an Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies. The U.S. will continue to rely on the availability and affordability of domestic coal for decades to meet its energy needs, and these advances are necessary to reduce pollution in the meantime.

The Presidential Memorandum calls for five to ten commercial demonstration projects to be up and running by 2016.

President Obama said, “Now, I happen to believe that we should pass a comprehensive energy and climate bill. It will make clean energy the profitable kind of energy, and the decision by other nations to do this is already giving their businesses a leg up on developing clean energy jobs and technologies. But even if you disagree on the threat posed by climate change, investing in clean energy jobs and businesses is still the right thing to do for our economy. Reducing our dependence on foreign oil is still the right thing to do for our security. We can’t afford to spin our wheels while the rest of the world speeds ahead.” 

“Advancing biomass and biofuel production holds the potential to create green jobs, which is one of the many ways the Obama Administration is working to rebuild and revitalize rural America,” said Agriculture Secretary Tom Vilsack. “Facilities that produce renewable fuel from biomass have to be designed, built and operated. Additionally, BCAP will stimulate biomass production and that will benefit producers and provide the materials necessary to generate clean energy and reduce carbon pollution.”

“President Obama and this Administration are strongly committed to the development of carbon capture and storage technology as a key part of the clean energy economy. We can and should lead the world in this technology and the jobs it can create,” said Energy Secretary Steven Chu. “The actions President Obama has taken today will create jobs, slash greenhouse gas emissions and increase our energy security while helping to put America at the leading edge of the new energy economy,” said EPA Administrator Lisa P. Jackson. “The renewable fuel standards will help bring new economic opportunity to millions of Americans, particularly in rural America. EPA is proud to be a part of the President’s effort to combat climate change and put Americans back to work – both through the new renewable fuel standards and through our co-chairmanship with the Department of Energy of the Interagency Task Force on Carbon Capture and Storage.”

February 2, 2010

U.S. Endowment for Forestry Seeks Proposals for Energy Demonstration Projects

Filed under: Biofuels,biomass,Renewable energy jobs — Tags: , — Jonathan B. Wilson @ 7:42 am

The U.S. Endowment for Forestry and Communities is seeking pre-proposals for grants of up to $250,000 to develop demonstration projects for the conversion of woody biomass to energy.

The Endowment will award grants of up to $250,000 (but not more than $750,000 in total) for proposals that can convert laboratory technology for converting woody biomass to energy in a way that is sustainable, economically viable and produces employment opportunities. 

The Endowment is a non-profit corporation created in 2006 as part of a bilateral agreement between the U.S. and Canada.  The Endowment’s approach in this RFP is to find solutions that have not yet been developed to commercial scale, for harvesting trees in forets that are not suitable for traditional lumbering. 

Proposals are due on February 12, 2010 and must be submitted through the Endowment’s online grant system.

January 4, 2010

Renewable Energy Around the Web: January 4, 2010

Filed under: Around the Web,Biofuels,CleanTech investing — Tags: , , , — Jonathan B. Wilson @ 8:10 am

Welcome to our first “around the web” summary for the new year.  Renewable Energy Around the Web is a weekly compilation of renewable energy news and information.  Please write to us with idea or suggestions for topics at “editor at renewableenergymemo.com”. 

Top Ten Biofuels Predictions for 2010

Our friends at BiofuelsDigest have posted their predictions for the coming year:

#10 – Low Carbon Fuel Standards – Following California’s lead, BFD predicts that other states will also adopt low carbon fuel standards that will spur investment into renewable fuels.

#9 – Cellulosic Ethanol “Happens”- BFD predicts 102 million gallons of advanced biofuels capacity by the end of 2010 with 25 Mgy of it cellulosic ethanol at 17 facilities.

#8 – Aviation Biofuels Surge- 2009 say several successful tests of aviation biofuels.  Look for an increase in interest and investment in 2010.

#7 – Oil Companies Acquire Ethanol Capacity- BFD predicts that a major oil company will acquire 200-800 Mgy in ethanol capacity, at a discounted rate of $0.70 per gallon of capacity.

#6 – Green Chemicals and Plastics Boom – Look for big investments by ‘old’ economy chemical companies into biochemical and related lines of business.

#5 – Jatropha Revival – BFD predicts major investments in this once-maligned plant for use as a feedstock.

#4 – U.S. Renewable Fuel Standard – Congress will take up the renewable fuel banner and will extend targets into the future. 

#3 – Micrcrops / Algae- BFD predicts that Lemna, cyanobacteria and heterotrophic algae gain traction as microcrops begin transition from R&D to commercialization.

#2 – Green Ports / Marine Biofuels- Look for major deals involving marine biofuels.

#1 – Alternative Finance / REITS Move In – BFD predicts the formation of at least one $1B+ investment fund that will finance renewable energy on a build-leaseback basis.  BFD cites its earlier poston the need for project securitization to make project finance money available for biofules projects. 

Our take?  BFD’s ten predictions are an ambitious (and probably somewhat hopeful) look at the year ahead.  Some, like the commercialization of cellulosic ethanol and an interest in green chemical platforms by traditional chemical companies, seem to be the product of trends that were put into place over the past few years.  Others, like a revival of interest in Jatropha, are hard to visualize as we’re sitting here today. 

Still others, like a prediction that Congress will pace a renewable fuel standard, depend on political forces that are notoriously difficult to predict. 

If even half of these predictions come to pass, however, 2010 will bring a great deal of interest and focus to the renewable fuels sector.

And In Other News

Alternative Fuel Mixture Credit Expires.     Congress failed to act, allowing the alternative fuel mixture credit to expire on December 31st.  My tax lawyer buddies tell me that an extender bill is likely in the coming month that will be retroactive, but with this Congress there can be no guarantees.

Environmentalists vs. The EnvironmentAnother report of a large solar park planned in the Mojave Desert falling prey to environmental challenges that the site will endanger the desert tortoise.  Environmental challenges continue to make it difficult for large solar projects in the desert southwest to get permitted and get funded.

European Supergrid – Energy planners in Europe, meanwhile, are pondering the merits of a ‘supergrid’ that would interconnect the electrical grids of participating states in Europe.  Carrying a price tag of nearly $30B Euros, the supergrid would link “turbines off the wind-lashed north coast of Scotland with Germany’s vast arrays of solar panels, and join the power of waves crashing on to the Belgian and Danish coasts with the hydro-electric dams nestled in Norway’s fjords.” 

(Passing interest – If you follow the link to the supergrid story, check out the picture of the solar park in Schleswig-Holstein Germay.  The park is so far north that the solar panels are point almost perpendicular to the ground in order to see the sun. )

December 21, 2009

Renewable Energy Around the Web: December 21, 2009

Our weekly compilation of renewable energy news and information from around the Web. 

Renewable Energy in Scotland

A report from the Scottish National Heritage organization claims that Scotland is on target to exceeds its renewable energy goals and could achieve 300% of its goals by 2020 if pending programs are approved.  The report claims that 2,834 MW of renewable power is operational and another 3,739 MW of power has been approved with another 19,500 MW in the planning stages.  The combined output is more than three times the 8 GW need to meet Scotland’s 2020 target of 50% of electricity from renewables. 

Utilities Building Long Distance Transmission Lines

The California PUC gave its final approval for Southern California Edison to construct the last 173 miles of its 250-mile Tehachapi transmission project in Kern County.  The line is expected to transmit as much as 4,500 megawatts of electricity produced from wind, enough power for nearly 3 million homes.

The capital cost of high-capacity long distance transmission is often seen as a barrier to the development of renewable energy production because the cost can be so high and the time to delivery can take years.

In a related development, LS Power announced that it would build the LaSalle Transmission Project (“LaSalle”), a new 345 kilovolt (kV) transmission project connecting Illinois and Indiana. The project is intended to facilitate renewable energy development within the region.

LaSalle is expected to be an approximately 160-mile transmission line to connect three existing 345-kV substations operated by the PJM Regional Transmission Operator. These three substations are the Pontiac-Midpoint substation near Pontiac, Illinois; the Reynolds substation near Reynolds, Indiana; and the Dumont substation near North Liberty, Indiana. New substations may also be constructed along the transmission line to serve as points where additional wind could interconnect to the transmission system.

“LaSalle will be routed through some of the most promising areas in Illinois and Indiana for wind development – areas that currently have limited access to the high-voltage transmission system,” stated Sharon K. Segner, Director – Project Development with LS Power. “LaSalle will provide both a means for wind generation to connect to the transmission system and an outlet for the wind generation to be delivered to load.”

The project is being developed by Central Transmission, LLC, a new transmission company and member of the LS Power Group. The LS Power Group has active transmission development across the country representing over 1,000 miles of transmission planned to help deliver renewable resources to load. This includes Great Basin Transmission, a new transmission company in Idaho and Nevada developing a “shovel ready” 500+ mile 500-kV transmission line; and Cross Texas Transmission, a new transmission company in Texas developing over 200 miles of double circuit 345 kV as part of the Competitive Renewable Energy Zone Transmission Plan.

Renewable Energy Committee Studies State Incentives

The Renewable Energy Committee of the American Bar Association’s Public Utility Section is conducting a study of state-level incentives for renewable energy.  The Committee’s Fall 2009 Report outlined the key federal incentives and for its Spring 2010 Report the Committee will dig deeper into the incentives available at the state level.  Created by the Public Utility Section in 2009, the Renewable Energy Committee has nearly 100 members and brings together legal practicioners to study developments in the sector.

New Landfill Methane Plant in North Carolina

Methane Power announced the opening of a new landfill gas-to-energy plant in Durham, NC, the state’s fourth largest city.  Electricity generated by the Durham landfill energy plant is being sold to Duke Energy Carolinas under a power purchase agreement.

Methane Power Inc., the project developer, said the energy plant is powered by three of GE’s containerized JGC 320 Jenbacher landfill gas engines. GE’s Jenbacher landfill gas engines are generating 3.17 megawatts of renewable electricity for the regional grid by using the landfill’s methane gas, which is created by the decomposition of municipal solid waste. The facility is generating enough energy to support about 1,800 North Carolina homes.

North Carolina is one of 27 states with a renewable portfolio standard (RPS), which requires utilities to produce a certain percentage of electricity from renewable sources, including biogas. North Carolina’s RPS requires that by 2021, utilities must meet 12.5 percent of customers’ energy needs through energy efficiency savings or renewable energy production.

Copenhagen’s Effect on Renewable Energy

Will the recently-announced climate change deal at Copenhagen have an effect on the market for renewable power?  The popular investing blog, SeekingAlpha, things so.  SeekingAlpha writes:

“The result from Copenhagen boosted the renewable energy outlook; India’s Suzlon sees wind turbines shortfall in 2010 and in the coming years. The $53B wind turbine market means the current global capacity cannot meet the demand.”

“The wind energy market is heating up in China as well. Ealier this year General Electric set a joint venture with A-Power Energy Generation with an annual 2GW capacity in 2010. According to the CEO, GE sees China as leading the green energy trend already, and this will continue if the U.S. does not come up with a green energy policy. A-Power Energy Generation announced Wednesday that the company has signed a definitive agreement with US-REG and Cielo wind for a Texas 600MW wind farm project. ”

“Before this announcement, some investors were still skeptical. What makes this project golden is that A-Power has agreed to deliver wind turbines beginning in March 2010. In other words, revenue on wind turbines will starts to flow in Q1 of 2010. Of course, the company has already realized revenue from Chinese wind farms in Q4 2009, however this marks the first revenue in-flow from a Mega wind farm project that A-Power has signed. The company has many huge alternative energy projects from various countries and is ramping up its turbine projects quickly through a Joint venture with General Electric.”

On the other hand, most environmental activists have viewed Copenhagen as a bust, so any boost for renewables is likely less than would have been the result if world leaders had adopted a wider-reaching or more robust agreement. 

In that same vein, on the first tradng day after the Copenhagen announcement, the price of carbon trading permits in Europe fell, reflecting the decreased likelihood of restrictions on carbon emissions.  Bloomberg reported that the “nations attending the two-week Copenhagen summit that ended at the weekend agreed to voluntary, rather than binding, targets to reduce emissions. The accord isn’t enough to boost demand for permits, said Trevor Sikorski, an emissions analyst at Barclays Capital in London.”

December 16, 2009

Taylor English Duma Assists Client with $17 Million Renewable Energy Grant

Taylor English Duma LLP attorney Greg Sanderson recently advised a Washington state-based manufacturer in successfully obtaining a Treasury §1603 cash grant in excess of $17 million for a 55 megawatt biomass power plant. Sanderson is part of the Renewable Energy Finance team at the firm. 

The client manufactures bleached and unbleached kraft pulp and linerboard at its mill in the Tacoma, Washington area. The mill employs some of the most advanced paper recycling techniques available, and recycles some 500 tons of waste paper and boxes every day, turning it into high-quality packaging paper while improving the environment. The new power plant is fueled with biomass residues from mill operations and other regional sources. The plant co-generates green power that is sold into the public electrical power grid and steam that is used for paper manufacturing.

For the last two years, Sanderson has worked to obtain incentives for this biomass power project. The grant will cover 30 percent of the cost of the project. “Biomass” is any organic material obtained from terrestrial and aquatic crops, including wood and paper residue. The biomass material is a renewable fuel used by the power plant as an alternative to coal or petroleum products.

“The 2009 Recovery Act has made billions available to companies trying to build renewable energy facilities,” Sanderson says. “The policy is to promote domestic and renewable sources of energy.”

Sanderson is a member of the Taylor English Duma LLP renewable energy team. Taylor English lawyers represent renewable energy developers and investors to help them qualify for tax incentives and obtain project financing in debt and capital markets. Sanderson has been involved in more than 100 similar tax credit transactions supporting renewable energy. He has also served as a co-owner and financial officer of Power Management, Inc. and of W-T-E Development, LLC, private alternative energy firms that developed and financed over 30 energy projects in 14 states from 1995 to 2004.

“It is great to be able to complete a project like this and see it work,” Sanderson says. “It is rewarding because we are helping to produce electricity from renewable resources. Renewable biomass energy is produced locally, carbon neutral, and environmentally friendly. Our nation needs to develop more renewable sources to reduce our dependence on fossil fuels and imported oil.”

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