Renewable Energy Memo

September 14, 2009

Renewable Energy Around the Web: September 14, 2009

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

Biomass in North Carolina

North Carolina is exploring the potential of biomass energy through the recently created Biofuels Center of North Carolina.  The Center  is investigating the potential for in-state biofuels production from energy crops and forest biomass within the state. Industry leaders, elected officials and others toured the center’s four-acre plot of more than a dozen energy crops and fast-growth trees during the North Carolina Grows Biofuels event at the end of August.

The North Carolina General Assembly established the nonprofit center in 2007 to address strategies outlined in the North Carolina Strategic Plan for Biofuels Leadership, created by policymakers to develop a homegrown industry. The state allocated $5 million to the center to fund research and development in agriculture economics, conversion technologies and workforce development.  Norman Smit, director of communications and education for the center, noted that several companies have received grants.  He said, “The biofuel center’s goal is to replace 10 percent of all fuel used in the state with homegrown and produced biofuels by 2017.  He noted that North Carolina buys 5.6 billion gallons of liquid fuels each year.  

Energy crops have been planted at 20 sites around the state in partnership with the North Carolina Department of Agriculture and North Carolina State University. They include miscanthus, switchgrass, sweet sorghum, grain sorghum, tropical sugar beets and many others, along with fast-growth trees like sweetgum and cottonwood, Smit said. The center will use the data collected to determine which crops grow best in certain types of soil around the state, he said. The center will also determine the markets for the crops, ensuring they are economically sensible for farmers. “We want to be able to talk to farmers and say, ‘This is what you need to look out for,” Smit said. “We want to look for crops that will provide farmers with income.” While the Midwest can sustain one crop per season, North Carolina can support two, he added.

48C Application Deadline

Preliminary applications for Section 48C qualified advanced energy projects are due on September 16, 2009, just two days hence. 

Show Me the Money

Anna  Austin and Lisa Gibson chronicle the challenges of renewable energy promoters in finding cash funding for their projects in the latest issue of Biomass Magazine

They write that, “although a lack of liquidity in the equity and debt markets is currently keeping a lid on project development activity, there are some encouraging signs on the horizon for biomass projects, according to Rob Kurtz, BBI International Engineering and Consulting Group project manager. “Positive signs include the recent USDA issuance of feasibility study grant guidelines for both combined heat and power at biofuels plants and anaerobic digestion systems, and a slight thawing in venture capital/risk investment as evidenced by the Tendril and Gevo investments recently announced, and several other announcements by companies developing combined-heat-and-power systems,” Kurtz says. The Tendril Networks and Gevo investments totaling $70 million were among the top five reported venture-capital deals nationwide for clean energy and environmental technology companies in the second quarter, according to Ernst & Young LLP. Gevo, an Englewood, Colo.-based alternative fuels producer received $40 million and Tendril, a Boulder, Colo.-based smart grid software company received $30 million.

“Biomass project developers need to think big when they are putting together their financial package, says Timothy Baye, bioeconomy and bioenergy business development specialist at the University of Wisconsin-Extension. “Think return on capital, working capital needs, for this type of commodity-related business, you’ll need equal to or up to three times the amount of the capital budget, because you’ve got to secure a feedstock—and that takes money.””

Up in the Air, Junior Birdmen!

Biofuels Digest is reporting that Sustainable Oils been awarded a contract by the Defense Energy Support Center for 40,000 gallons of camelina-based jet fuel.

The fuel will be delivered to the Naval Air Systems Command fuels team in 2009 and will support the Navy’s certification testing program of alternative fuels. The contract includes an option to supply up to an additional 150,000 gallons of camelina-based jet fuel.

Camelina was selected by the DESC because it does not compete with food crops, has been proven to reduce carbon emissions by more than 80 percent, and has already been successfully tested in a commercial airline test flight. In addition, camelina has naturally high oil content, is drought tolerant and requires less fertilizer and herbicides.

It is an excellent rotation crop with wheat, and it can also grow on marginal land. Camelina has also been proven to significantly reduce carbon emissions in aviation fuel. A life cycle analysis (LCA) of jet fuel created from camelina conducted at Michigan Tech University in conjunction with UOP LLC, a Honeywell Company, and Sustainable Oils found that the renewable fuel reduces carbon emissions by 80 percent compared to petroleum jet fuel.

Camelina is the most readily available renewable fuel feedstock that meets the Navy’s criteria, with the ability to scale up acreage to meet demand.  The camelina for the contract was primarily grown in 2009 and harvested recently by farmers in Montana. The company also has several field trials in Washington state.

More Green Jobs

A new study is reporting that shifting to renewable energy will create more jobs than continued dependence on fossil fuels. 

The study, by environmental group Greenpeace and the European Renewable Energy Council (EREC), urged governments to agree a strong new United Nations pact to combat climate change in December in Copenhagen, partly to safeguard employment.

“A switch from coal to renewable electricity generation will not just avoid 10 billion tons of carbon dioxide emissions, but will create 2.7 million more jobs by 2030 than if we continue business as usual,” the report said.

Governments were often wrong to fear that a shift to green energy was a threat to jobs, said Sven Teske, lead author of the report at Greenpeace. He said that the wind turbine industry was already the second largest steel consumer in Germany after cars.

“Renewable power industries can create a lot of jobs,” he told Reuters of the outlook for solar, wind, tidal, biomass — such as wood and crop waste — and other renewable energies in power generation. “This research proves that renewable energy is key to tackling both the climate and economic crises,” said Christine Lins, Secretary General of EREC, which represents clean energy industries.

Assuming strong policies to shift to renewables, the study projected that the number of jobs in power generation would rise by more than 2 million to 11.3 million in 2030, helped by a surge in renewables jobs to 6.9 million from 1.9 million.

While the prospect of more jobs in renewable energy is heartening, the study seems to drive home what would be an obvious (and not terribly meaningful) point.  Shifting energy production from one technoloyg to ANY OTHER TECHNOLOGY would necessarily create more jobs.  The effort and stress of making any kind of change in production would necessarily “create jobs” as facilities were designed, funded, built and staffed.  We won’t criticize green jobs on these pages, but this kind of study runs the risk of prompting a backlash as it touts an economic necessity (that a shift from one technology to another technology creates new employment potential) as if it were a merit of renewble energy per se.  That kind of reasoning will not help the renewable energy industry in the long run.

100 Servants

U.S. Energy Secretary Steven Chu, in an interview with National Public Radio, called for greater conservation and more sensitive in using energy in America.  Today, he said,  “every person in the United States uses energy as if they had 100 personal servants at their beck and call,” cleaning their carpets, or traveling to the supermarket.  While he won’t ask everyone to “cut” the number of their “servants” in half or by some other fraction, he believes American need to be more aware of how they use energy and to conserve more.

Your Name Here

Does your company have a story of interest to the renewable energy committee?  Drop us a line at “editor” at “renewableenergy” dot com and tell us what’s going on with your company or firm.  We would love to hear from you.

August 24, 2009

Renewable Energy Around the Web: August 24, 2009

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.

August 17, 2009

Renewable Energy Around the Web: August 17, 2009

Filed under: Around the Web, Biofuels — Tags: , , , , — Jonathan B. Wilson @ 6:19 am

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

Guidance on Section 48C Credits

The Departments of Treasury and Energy issued joint guidance on the process for seeking over $2 billion in qualified advanced energy project tax credits.  The tax credits are aimed at manufacturers of renewable and clean energy equipment and projects.  Unlike the other tax credits programs, the qualified advanced energy project tax credits are limited to approximately $2.3 billion, so potential recipients of the credits must apply for them in advance and submit several rounds of qualifying information (lasting into March of next year) before they find out whether or not they may receive the tax credits.

Initial applications are due September 16, 2009.

Legislation in Australia

The Australian legislature took steps to introduce new legislation to encourage renewable energy after a bill that combined renewables with emissions cap and trade failed to pass.  Industry groups opposed the emissions reduction plan but there appears to be popular support for moves to encourage renewable energy.  Although Australia accounts for only 1.5 of global greenhouse gas emissions, its pollution, on a per capita basis, leads the world because the nation generates roughly 80% of its electricity from coal. 

 Garden State?

Renewable energy supporters in New Jersey celebrated a milestone last week as the state unveiled its 4,000th solar installation, making New Jersey the second largest adopter of solar power in the U.S. 

“New Jersey continues to be ahead of the curve on energy preservation, implementation of innovative approaches to energy efficiency and the use of renewable energy sources,” Governor Jon Corzine said.

This solar milestone was marked by a ceremonial celebration by the New Jersey Board of Public Utilities (NJBPU) on Tuesday at Birch Arms, a solar-powered, energy efficient housing program in Paterson.

“I also want to commend the BPU, the many representatives of environmental organizations, the solar industry, and the businesses and residents all across New Jersey who have been tireless advocates on behalf of solar development in our state and who share in this achievement,” added the Governor.

One program that the BPU has implemented in an effort to achieve its “Energy Master Plan” goals, is the Renewable Energy incentive Program (REIP). The company website states that it is “striving to use 30 percent of electricity from renewable sources by 2020.”

Green for Me but not for Thee

We covered the distinction between the tax incentives for biodiesel contained in S.B. 1589 (the Biodiesel Tax Incentive Reform and Extension Act) and those tax incentives that expire at the end of this year for alternative fuels that don’t meet the definition of “biodiesel.”  Producers of non-biodiesel alternative fuels will find themselves without any tax incentives after December 31, 2009 unless the existing blender’s credit is extended or legislators make room for non-biodiesel alternative fuels in a new tax credit program.

August 15, 2009

Treasury and Energy Issue Guidance on over $2 billion in Section 48C Tax Credits

The Departmetnt of Energy announced recently more than $2 billion in tax credits for “qualified advanced energy projects.” 

“This program will help encourage innovation in design of clean energy technologies,” said Treasury Secretary Tim Geithner.  “This partnership between Treasury and Energy adds an important new dimension to the incentives created in the Recovery Act to increase US manufacturing output, improve energy efficiency, and develop alternative sources of energy.”
 
The Recovery Act created a new tax credit program by authorizing Treasury to provide developers with an investment tax credit of 30 percent for facilities that manufacture particular types of energy equipment. Qualifying manufactures will produce solar, wind, and geothermal energy equipment; fuel cells, microturbines, and batteries; electric cars; electric grids to support the transmission of renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions. 

Said Energy Secretary Steven Chu: “These tax credits will help create thousands of high quality manufacturing jobs in some of the highest growth segments of the economy.  This is an opportunity to develop our global leadership in clean energy manufacturing and build a secure, sustained base of jobs for America’s workers.”

The DOE has devoted a page on their website to a description of the Section 48C tax credits.

Applications for the QAEP credits are due by September 16, 2009.  (Click here for guidance on the application process).

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