Colorado Governor Bill Ritter this week signed into law an increase in that state’s renewable portfolio standard (RPS).
Colorado’s HB 10-1001 requires Colorado to produce at least 30% of its electricty from renewable sources by the year 2020. The state’s goal had previously been 20%, as established in a 2004 law.
At 30%, Colorado’s RPS is the second most agresssive in the nation, trailing only Maine which seeks to achieve 40% by 2017.
The bill requires a portion of the RPS to be met through a subset of renewable generation, or “distributed generation” (DG), which does not require additional transmission facilities to connect to the grid. By 2015 and through 2019, 20 percent of retail electricity sales in Colorado must be renewable with DG equaling at least 1¾ percent of retail electricity sales; 30 percent of its retail electricity sales by 2020 and thereafter with DG equaling at least 3 percent of its retail electricity sales.
The bill will apply to all providers of retail electric service in Colorado, other than municipally owned utilities that serve 40,000 or fewer customers.
The bill’s sponsors say that the measure will create thousands of new jobs as a result of the shift in sources of electrical generation.
A provision in the health care bill passed by the House of Representatives over the past weekend (H.R. 3962) would cut the tax credits currently benefitting cellulosic ethanol and other biofuel tax producers.
Section 555 of the bill excludes from the cellulosic biofuel producer credit (under Section 40(b)(6) of the Internal Revenue Code) any fuel that (a) consists of more than 4% water and sediment or (b) consists of more than 1% ash.
In an attempt to generate revenues to pay for the costs of expanded health care, the House bill eliminated tax credit provisions that are expected to return $24 billion to the U.S. Treasury over the next 10 years. Members of the House from Midwestern and other farm states who voted in favor of the bill have already staked out positions in favor of eliminating the tax credit cut in the final version of the health care bill.
In a development little-noticed in the U.S. media, JP Morgan Chase has placed a bet in the coming carbon trading market by making an offer for European carbon-trading firm EcoSecurities Group plc. The management of EcoSecurities Group yesterday announced that it was backing JP Morgan’s bid to be acquired.
EcoSecurities provides a range of consulting services, including emissions abatement and project management in the field of carbon offsets. JPMC’s bid of 129 million pounds (roughly $200 million U.S.) represents a 17% premium over the price offered by a competing bidder. Shares in EcoSecurities have risen roughly 35% since July.
Carbon trading in the U.S. currently exists only on a voluntary basis and carbon offset projects in the U.S. are not eligible for offset trading in the European offset market. JPMC’s investment represents, to at least some degree, a bet by that firm that carbon trading in some form will one day reach the U.S.
Our weekly compilation of renewable energy news and information from around the Web.
Qualified Advanced Energy Project Tax Credits
We covered the DOE’s guidance on QAEP (or Section 48C) tax credits and the application process now under way. (Refer to our white paper for details on the application process). We’re working on a free webinar on the topic on September 2, 2009.
Solar Loses Some Shine
The Wall Street Journal reported on slumping sales at a number of solar companies due to the global recession. It reported that the expiration of an incentive program in Spain also accounted for a dramatic drop-off in solar sales in that country. In 2008, the WSJ reported, “Spain accounted for more than 40% of all new solar panel installation globally, installing 2.7 gigawatts — five times the 2007 figure — out of a global total of 5.6 gigawatts. According to Spain’s photovoltaic industry association, Asif, the country’s market was worth €16.38 billion ($23.24 billion). This year, with cuts to aid and a more complicated application process, there has been no new installation in Spain.”
The slump in global sales, however, has not reduced the marketing emphasis given to solar efforts, however, in the U.S. with Baker Roofing, Inc., one of the largest roofing companies in the U.S., announcing its formation of a “green” subsidiary that will focus on roof-top gardens and roof-top solar. The company, based in Raleigh, NC, has completed a number of installations in 2009 and has a glitzy, separate website devoted to its green efforts.
Pending Legislation
When Congress returns from its Summer recess on September 8th it has alot of work to do. There are at least three bills of keen interest to the renewable energy community, including:
* The Biodiesel Tax Incentive Reform and Extension Act;
* The American Renewable Energy Act; and
* The Cleaner, Secure, Affordable Thermal Energy Act.
The Biodiesel Tax Incentive Reform and Extension Act is an attempt to circumvent the “black liquor” controversy by converting the existing blender’s tax credit into a $1/gallon ethanol producer’s credit. As previously reported, however, the bill would do nothing to extend the existing non-biodiesel alternative fuel producer’s credit that expires at the end of 2009.
The American Renewable Energy Act would require 25% of all U.S. electric production to come from renewable sources by the year 2025, while the Cleaner, Secure, Affordable Thermal Energy Act would create tax credit incentives for both residential taxpayers and business taxpayers who converted heating oil furnaces into natural gas or biomass-burning furnacts. You can follow pending legislation in the renewable energy space here.
Lowering Costs for Cellulosic Ethanol
Corn-based ethanol producers are finding the times tough. A relatively low-priced oil market has kept gasoline below $3/gallon and margins are thin. Cellulosic ethanol producers have found it hard to attract the capital needed to build production-scale plants.
A new producer in Connecticut is planning a 15 MgY plant at a production cost of less than $1 per gallon.
Connecticut-based American Energy Enterprises Inc. plans to construct a commercial-scale ethanol production facility in New Milford, Conn., and according to company chairman Christopher Brown, will use wood waste to produce ethanol at a cost of 80 to 85 cents per gallon. The plant is expected to begin production in mid-2010 and will initially produce up to 15 MMgy. Once production commences, units will be added monthly to increase capacity until the plant reaches its full capacity of 80 MMgy to 100 MMgy.
A contributing factor to the company’s low production cost is its plan to acquire feedstock at no cost or, in some cases, at a profit. Brown said that tipping fees for wood waste at landfills and wood chip companies in the region range up to $60 per ton. American Energy will offer lower fees or take the wood waste for free. “We’re in good shape with the municipalities, the local tree groomers and handlers of that material, and some of the waste companies,” he said, adding that contracts are in place to supply the plant with triple its need for feedstock for the first five years. Brown said the option to ship feedstock by rail to the facility from over 100 miles away is available, but so far, the 1 million tons of feedstock required annually can be acquired from within a 15-mile radius of the plant.
Meanwhile, another struggling cellulosic ethanol project in Pike County, Kentucky, believes its one step closer to its $200 million target to break ground on a waste-to-ethanol plant there under the guidance of Agresti Biofuels. Project sponsors are now said to be looking for private financing to fill out the needed funding.
In the first interview of the series, we interview Eric Taub, the founder and Chief Executive Officer of Verus Carbon Neutral, the only aggregator of carbon credits in Atlanta, Georgia.
Before Eric founded Verus Carbon Neutral, he was a partner and portfolio manager at Juno Management of Atlanta. His career has taken him to London, New York, Mexico City and Chicago. Eric’s experience includes several years as Senior Vice President in portfolio management at Wachovia, Managing Director at SunTrust, Director of Emerging Markets at Bank of Montreal, and certification as a Chartered Financial Analyst.
You can find the complete interview here.
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