Wednesday, August 31, 2011

Department of Energy Joins with Manufacturers, Environmentalists to Announce New Efficiency Standards for Home Refrigerators
On August 26, 2011the Department of Energy issued final energy efficiency standards for home refrigerators and freezers that will improve their efficiency by about 25 percent by 2014.  These new standards, developed through a consensus process with manufacturers, consumer groups and environmentalists, are expected to deliver more than $200 in electricity bill savings for the typical consumer over the lifetime of the refrigerator.  Nationally, consumers are expected to save more than $21 billion on their energy bills through 2043 as a result of the standards announced today.
“These standards reflect a consensus among manufacturers, consumer groups and environmentalists.  The agreement builds on more than three decades of common-sense state and federal refrigerator efficiency standards that have collectively saved American families hundreds of billions of dollars,” said Secretary Chu.  “What’s so remarkable is that even as the size of American refrigerators has increased and more features have been added, the historical purchase prices have come down and we are all saving money on our electricity bills every month.”
“DOE's action today, which was required by law, is based on the consensus agreement reached by stakeholders which balances energy savings, consumer choice and manufacturer impact.  We applaud DOE for its work and continue to urge both DOE and EPA to carefully balance implementation of mandatory standards and voluntary programs such as ENERGY STAR,” said Joseph M. McGuire, president of the Association of Home Appliance Manufacturers.
“This final rule implements a consensus agreement between appliance manufacturers and energy efficiency supporters on new refrigerator and freezer standards,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy. “This consensus agreement maximized cost-effective energy savings for consumers while keeping impacts on manufacturers to manageable levels.  We commend the Department for issuing this rule now and for following the consensus agreement.”
These new consensus standards build on previous efficiency standards for refrigerators, which have successfully reduced energy use while promoting design innovation and new features for homeowners.  Since the first standards were set in the 1970s, the energy needed to power home refrigerators has decreased by more than two-thirds, while at the same time, costs have come down, storage space has increased, and more features are available than ever before.  
The efficiency standards issued today finalize the proposed consensus standards agreed to by the Association of Home Appliance Manufacturers (AHAM), more than 25 individual refrigerator manufacturers, and some of the nation’s leading consumer and environmental advocacy groups.  The standards will go into effect three years after publication in the Federal Register. 
According to the Department’s analysis, the standards announced today will ultimately save enough electricity each year to power 3.4 million homes, about the same number of homes in the entire state of Virginia.  The standards will also avoid more than 340 million metric tons of carbon dioxide emissions over 30 years. 
These standards are part of a broader Department of Energy effort designed to help families save money by saving energy by increasing the efficiency of residential and commercial appliances and products. Under the Obama Administration, the Department of Energy has finalized new efficiency standards for more than thirty household and commercial products, which are estimated to save consumers a total of $300 billion through 2030.
The standards are available on the Department of Energy website at
To see Secretary Chu discuss the broader benefits of appliance efficiency standards, check out this video on

Tearn more about the test procedures and minimum efficiency standards for residential appliances and commercial equipment developed by DOE’s Appliances and Commercial Equipment Standards Program and other building technologies projects

U.S. Department of Energy
Press Release dated August 26, 2011

Expanding the Scope of Benefit Cost Analysis: Practical Applications and Analytical Frontiers Society for Benefit-Cost Analysis Fourth Annual Conference and Meeting
The fourth annual conference and meeting of the Society for Benefit-Cost Analysis will take place at the L’Enfant Plaza Hotel in Washington, DC, from October 21-22, 2011. The conference discusses the practical use of cost-benefit analysis (CBA) in a variety of institutional and national settings. You can register at  The conference program is available online.  A partial agenda is presented below:

Friday, October 21 2:30 p.m.–2:45 p.m. Welcome Remarks
  • Glenn P. Jenkins, Vice President, Society for Benefit-Cost Analysis
2:45 p.m.–4:15 p.m. Panel 1: Exploring the Net Benefits of Land Cleanup and Reuse

Moderator: Robin R. Jenkins, Senior Economist, U.S Environmental Protection Agency
EPA Handbook on the Benefits, Costs, and Impacts of Land Cleanup and Reuse
  • Heather Klemick, Economist, U.S. Environmental Protection Agency
Valuing the Benefits of Superfund Site Remediation: Three Approaches to Measuring Localized Externalities
  • Christopher Timmins, Associate Professor, Duke University (Presenter)
  • Shanti Gamper-Rabindran, Assistant Professor of Environmental Economics and Policy, University of Pittsburgh
CERCLA’s Overlooked Cleanup Program: Emergency Response and Removal
  • Alex Marten, Economist, U.S. Environmental Protection Agency (Presenter)
  • Elizabeth Kopits, Economist, U.S. Environmental Protection Agency
  • Robin R. Jenkins, Senior Economist, U.S. Environmental Protection Agency
  • Heather Klemick, Economist, U.S. Environmental Protection Agency
Valuing the Benefits of Brownfields Assessment and Cleanup Grants
  • Kevin Haninger, Public Health Policy Analyst, Department of Health and Human Services (Presenter)
  • Christopher Timmins, Associate Professor, Duke University
What Do Property Values Really Tell Us? A Hedonic Study of Pollution from Underground Storage Tanks
  • Dennis Guignet, Economist, U.S. Environmental Protection Agency (Presenter)
  • Jeffrey Zabel, Professor, Tufts University
Panel 2: The Need for Cost-Benefit Analysis in Criminal Justice Reform
Moderator: Inimai Chettiar, Advocacy and Policy Counsel, American Civil Liberties Union, Center for Justice
  • Rachel E. Barkow, Professor and Faculty Director of the Center on the Administration of Criminal Law, New York University School of Law
  • Gary VanLandingham, Director of Results First Initiative, Pew Center on the States
  • Valerie Levshin, Cost Benefit Analysis Unit, Vera Institute of Justice
Panel 3: Application of Cost Analysis in Developing Economies
Moderator: TBD
Cost Benefit Analysis in World Bank Projects
  • Andrew M. Warner, Lead Economist, Independent Evaluation Group
The Use of Cost-Benefit Analysis in World Bank Operations: Overview of Recent Practice, and Some Issues for Future Policy
  • Jon Strand, Senior Economist, The World Bank, Development Research Group, Environment and Energy Team (Presenter)
  • Michael Toman, Research Manager, The World Bank, Development Research Group, Environment and Energy Team
  • Andrew Warner, Independent Evaluation Group, The World Bank
4:30 p.m.–6:00 p.m. Panel 4: Disaster Preparedness
Moderator: Elena D. Ryan, Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection
Induced Development in Risky Locations: Fire Suppression and Land Use in the American West
  • Carolyn Kousky, Fellow, Resources for the Future (Presenter)
  • Sheila Olmstead, Resources for the Future
Surviving Natures Most Powerful Storm: Cost Effective Methods To Reduce Tornado Casualties
  • Kevin M. Simmons, Corrigan Chair of Economics, Austin College (Presenter)
  • Daniel Sutter, Charles Koch Professor of Economics, Johnson Center for Political Economy, Troy University
The Effect of Nearby Tornadoes on Self-Protection Investments
  • Eric N. Duquette, Research Economist, U.S. Department of Agriculture Economic Research Service (Presenter)
  • Trudy Ann Cameron, Raymond F. Mikesell Professor of Environmental and Resource Economics, University of Oregon
The Dynamic Effects of Hurricanes in the US: The Role of Non-Disaster Transfer Payments
  • Tatyana Deryugina, Lecturer, University of Illinois at Urbana-Champaign
Panel 5: Air/Water Pollution
Moderator: TBD
Does Electronic Reporting of Emissions Information Generate Environmental Benefits?
  • Ron Shadbegian, Senior Economist, U.S. Environmental Protection Agency National Center for Environmental Economics (Presenter)
  • Ann Wolverton, Senior Economist, U.S. Environmental Protection Agency National Center for Environmental Economics
  • Wayne Gray, Professor, Clark University
Uncertainty and Estimates of the Benefits of Reducing Fine Particle Pollution
  • Randall Lutter, Visiting Scholar, Resources for the Future
  • Art Fraas, Visiting Scholar, Resources for the Future
The Cost-Effectiveness of Alternative Approaches to Residential Radon Control
  • Erik Johnson, Assistant Professor of Economics, Georgia Institute of Technology (Presenter)
  • Paul Courant, Harold T. Shapiro Collegiate Professor of Public Policy Professor of Economics and of Information, University of Michigan
  • David Mendez, Associate Professor, University of Michigan
  • Kenneth Warner, Avedis Donabedian Distinguished University Professor of Public Health, University of Michigan
Reference-Dependent Valuations of Environmental Health Risks
  • W. Kip Viscusi, Distinguished Professor of Law, Economics, and Management, Vanderbilt University (Presenter)
  • Joel Huber, Schwartz Professor of Marketing, Fuqua School of Business, Duke University
Panel 6: Benefit-Cost Analysis and Regulation
Moderator: TBD
An Assessment of Private and Public Impacts of Broadband Policies on Next Generation Broadband Deployment in the U.S.
  • David Waring, Doctoral Student, Rutgers University (Presenter)
  • Stuart Shapiro, Associate Professor and Director of the Public Policy Program, Rutgers University
A Comparative Study to Measuring Change in Social Welfare From Federal Regulation
  • Alex Moscoso, Economist, HDR
The Regulatory Red Herring—Environmental Protection and the “Job-Killing” Myth
  • Jason Schwartz, Legal Director, Institute for Policy Integrity, New York University
  • Elizabeth Pienaar, Economics Fellow, Institute for Policy Integrity, New York University
Market Failures, Behavioral Economics, and Benefit-Cost Analysis of Federal Regulations
  • Donald Kenkel, Professor, Cornell University, Department of Policy Analysis and Management
Saturday, October 22
8:00 a.m.–9:00 a.m. Check-In/Continental Breakfast
9:00 a.m.–10:30 a.m. Panel 7: Office of Information and Regulatory Affairs After 30 Years of Benefit-Cost Analysis
30 Years as an Obscure, Unaccountable Monopoly Is Enough: It’s Time for OIRA to Face Competition in Regulatory Review
  • Richard B. Belzer, President, Regulatory Checkbook, and Managing Editor, Neutral Science
Perpetuating Puffery? OIRA’s Annual Benefit-Cost Report to Congress
  • Susan Dudley, Director, Regulatory Studies Center, The George Washington University (OIRA 1984–1989, 2007–2009)
Panel 9: Social Programs: Youth, and Early Adulthood
Moderator: TBD A Cost-Benefit Analysis of Communities That Care Outcomes at Eighth Grade
  • Margaret Kuklinski, Research Scientist, Social Development Group, University of Washington (Presenter)
  • J. David Hawkins, Professor, University of Washington
The Contribution of Student Success Programs of Community College Student Persistence an Graduation Rates: A Case Study of the Benefits and Costs of the Accelerated Study in Associate Programs (ASAP) at the City University of New York (CUNY)
  • Anthony Rini, Vice Provost for Budget, Planning, and Administration, Northeastern University
Cost Effectiveness of the Opening Doors Program at Chaffey College
  • Timothy Rudd, Cost-Benefit Analyst, MDRC
A Fiscal Impact Analysis of Three Strategies to Prevent Unintended Pregnancy
  • Adam Thomas, Research Director, Brookings Institution, Center on Children and Families

10:45 a.m.–12:15 p.m. Panel 10: Climate
Moderator: TBD Comparing the Costs of Alternative Policies for Climate Finance
  • Ian Parry, Technical Assistance Advisor, International Monetary Fund (Presenter)
  • Ruud de Mooij, Economist, Fiscal Affairs Department, International Monetary Fund
Cost-Effectiveness and Marginal Abatement Cost Analysis in Low-Carbon Growth Modeling for Emerging Market Countries: Lessons From China, Mexico, and Colombia
  • William A. Ward, Professor, Clemson University (Presenter)
  • Todd M. Johnson, Lead Energy Specialist, Sustainable Development, The World Bank
Promoting Pollution Prevention in Small Businesses: Costs and Benefits of the “Enviroclub” Initiative
  • Paul Lanoie, Professor, Institute of Applied Economics, HEC Montréal (Presenter)
  • Alexandra Rochon-Fabien, HEC Montréal
Panel 11: Benefit-Cost Analysis and Transportation Infrastructure Investment
Moderator: TBD
Benefit-Cost Analysis of Airports: Are Benefit Transfers a Useful Tool for the Assessment of Noise Impacts on Human Health?
  • Denise Zak, Project Assistant, Center of Public Finance and Infrastructure Policy, Vienna University of Technology (Presenter)
  • Michael Getzner, Chair, Center of Public Finance and Infrastructure Policy, Vienna University of Technology
Framework for Measuring Value Premium of Affordable Housing Due to Transit Investment
  • Kate Ko, Economist, HDR
Estimation of Option Value in the Assessment of Transportation Investments
  • Jose E. Tejeda, Senior Economist, HDR
Panel 12: Concepts and Methods II
Degas Room
Moderator: TBD
The Reference State Basis of Comparison, Adaptation to Losses, And The Choice of Welfare Measure
  • Jack Knetsch, Professor Emeritus, Simon Fraser University
Modifying the Benefit-Cost Standard to Reflect Political Costs: A Behavioral-Economic Approach
  • Kerry Krutilla, Associate Professor, Indiana University
  • Alex Alexeev, Postdoctoral Fellow, Indiana University
Scitovsky Reversals Caused by Environmental Policies Under Constrained Conditions
  • Richard Just, Professor, University of Maryland
  • Andrew Schmitz, Professor and Eminent Scholar, University of Florida
  • Richard O. Zerbe, Distinguished Professor, University of Washington
Social Welfare Functions and the Value of Statistical Life
  • Matt Adler, Leon Meltzer Professor, University of Pennsylvania Law School
12:15 p.m.–1:30 p.m. Lunch, Business meeting of the Society for Benefit-Cost Analysis membership
Solarium Room
1:30 p.m.–3:00 p.m. Panel 13: Landscape-Based Public Goods, Forests, and Biodiversity
Monet Ballroom
Moderator: TBD
Optimal Supply of Landscape-based Public Goods: Benefit-Cost Prioritization With and Without Spatial Interdependencies
  • Steven J. Dundas, Doctoral Student, Department of Economics, North Carolina State University (Presenter)
  • Joshua M. Duke, Professor, Departments of Food and Resource Economics, Economics, and Legal Studies, University of Delaware
  • Robert J. Johnston, Professor, Department of Economics and Director, George Perkins Marsh Institute (GPMI), Clark University
  • Kent D. Messer, Associate Professor, Departments of Food and Resource Economics and Economics, University of Delaware
State Parks as Public Goods: Public Funding or User Fees?
  • Trudy Ann Cameron, Raymond F. Mikesell Professor of Environmental and Resource Economics, University of Oregon (Presenter)
  • Brian Vander Naald, Doctoral Student, University of Oregon
Biodiversity and Resilience in Benefit Cost Analysis
  • Jeff Bennett, Professor, Australian National University, Crawford School (Presenter)
  • Gabriela Scheufele, Doctoral Student, Australian National University, Crawford School
Goal Conflicts and Benefit-Cost AnalysisThe Case of Sweden's National Environmental Objectives
  • Göran Bostedt, Associate Professor, Swedish University of Agricultural Sciences
Panel 14: Alternative Energy, Green Roofs, and BCA in the Netherlands
Renoir Room
Moderator: TBD
A Model for the Financial and Economic Analysis of Wind Farms For Electricity Generation with Application to Santiago, Cape Verde
  • Sener Salci, Graduate Student, Department of Economics, University of Birmingham, UK
  • Glenn Jenkins, Professor, Department of Economics, Queen’s University, Canada and Eastern Mediterranean University, North Cyprus
Estimated Costs and Benefits of one Thousand Green Roofs in New York City
  • Ken Acks, Cost-Benefit Group, LLC + Environmental Valuation and Cost-Benefit News
The Practice of Valuing the Environment in Cost-Benefit Analysis
  • Jan Anne Annema, Assistant Professor, Transport Policy, Delft University of Technology (Presenter)
  • Carl Koopmans, Professor, VU University, Amsterdam
A New Assessment of the Benefit From CAFE: Correcting a Misperception
  • Jon Neill, Professor, Western Michigan University, Department of Economics
Panel 15: Social Investments
Regulatory Benefit-Cost Analysis?
Improving the Public’s Return on Investment in Regulatory Benefit-Cost Analysis: A Congressional Perspective
  • Heidi R. King, Chief Economist, Energy and Commerce Committee, U.S. House of Representatives
Alternative Ways to Organize an Effective Congressional Regulatory Review and Analysis Function
  • Richard B. Belzer, President, Regulatory Checkbook and Managing Editor, Neutral Source
Lessons Learned from the CBO and OMB Experience
  • *Alice M. Rivlin, Senior Fellow, Economic Studies, The Brookings Institution (Invited)
4:45 p.m.–5:00 p.m. Closing Remarks
Monet Room
  • Glenn P. Jenkins, President, Society for Benefit-Cost Analysis
  • Joseph Cordes, Vice President, Society for Benefit-Cost Analysis

Tuesday, August 30, 2011

Rooftop farms sprouting in Brooklyn -Urban pioneers cater to restaurants and markets
Gotham Greens, with 25 employees, had its first harvest in June. Two soil-based operations—Eagle Street Rooftop Farm, in Greenpoint, and Brooklyn Grange, in Long Island City, Queens—have started up within the past two years, selling their crops to restaurants and markets throughout the city.
But it remains to be seen whether these rooftop farms can compete in a system dominated by national growers.
... The cost of a hydroponic rooftop is about $2 million to $2.5 million, says Paul Lightfoot, CEO of Manhattan-based BrightFarms, a firm that finances hydroponic outfits.
... Mr. Puri would not disclose startup costs for the 0.3-acre farm....
The urban farm's strategy is to focus on growing items that are highly perishable and expensive to ship. “Food goes bad while people own it,”....
Eagle Street co-founder and head farmer Annie Novak says keeping labor costs low is essential to its success. The 6,000-square-foot farm relies on volunteers, apprentices and a partner organization, Growing Chefs, to assist its four paid employees.
The farm focuses on leafy greens and herbs, which provide the best return, says Ms. Novak. “An herb is perfect, because it has a high price and requires zero labor,” she said.
Eagle Street breaks even on crops, with annual revenues of about $1.25 to $1.50 a square foot. The business makes an additional $2,000 from sales of T-shirts and nonperishables such as honey, Ms. Novak said. Building owner Broadway Stages paid for the $60,000 roof, which was designed and installed by New York-based Goode Green. The cost—amounting to about $10 a square foot—was significantly lower than that of many similar projects.
Because Gotham Greens can achieve a denser yield and harvest year-round, Mr. Puri forecasts first-year revenues to be higher “by a factor of hundreds” than those of the average soil-based rooftop farm.
Demand for Gotham Greens items already outstrips supply. Mr. Puri is in talks to open another Brooklyn facility next year and expects to establish several more.
• The green roof base system is comprised of 2” of built-up components: polyethelene, drainange mat, and retention and separation fabrics.
• With the approval of the building's engineer, 200,000 pounds of growing medium were lifted onto the roof by crane, in "super-sacks", over the course of a single day. The growing medium, laid directly onto the green roof base, is a mixture of compost, rock particulates and shale and is manufactured in Pennsylvania. It is a green roof component that at the same time retains water, allows for air circulation and is lightweight.
• The green roof can hold over 1.5” of rain, providing a significant reduction in storm water runoff. The captured water, in turn, can help to cool the warehouse below yielding a reduction in cooling costs.
• Installation cost was approximately $10 per square foot. This is significantly lower than most green roof installations due in part to two main factors: the three story building and open expanse of roof were very accessible and, two, that recycled materials such as used rafters were utilized for edging.
• Upon completion of Goode Green's base system installation, the growing medium was moved into by place by a team of farming volunteers over the course of three days. It was arranged into 16 north-south beds measuring thirty inches to four feet in width and divided down the middle by a single long aisle. The beds have a soil depth of 4-7”. The aisles were filled with mulched bark.
• Since overhead watering on a rooftop often evaporates or blows away, irrigation was inititally provided via black plastic drip lines, using city tap water. In 2010, the drip irrigation system was de-installed, as the root systems of the crops rotated and intercropped through the farm during the growing season were incondusive with drip watering (e.g. carrots, microgreens, radishes). Currently, the Farm relies on hand watering (via hose) for seedlings and transplants, and rainwater for established plants (kale, chard, tomatoes).
• In its first season, the Eagle Street Rooftop Farm grew over thirty types of produce, from watermelon to cabbage. Having seen what fared poorly in a greenroof growing environment, in 2010 Annie tightened the crop list to a wider range of varities within a smaller number of crops.
• In 2010, the Farm grows a narrower crop list, with a wide diversity of heirloom and rooftop-acclimated varities of produce within each crop type. In chosing her crops, Annie designed a special rooftop salad mix of seed stock designed to do well on rooftop conditions, yet provide the same colors and spice of traditional popular salad mixes. Currenly, the Farm grows cucumbers, hot peppers, tomatoes, eggplants, spinach, radishes, kale, swiss chard, carrots, peas, beans, salad greens (lettuces, mustards, arugula) herbs (sage, tarragon, oregano, parsley, chives, cilantro, dill), and flowers (cosmos, zinnias, calendula, tobacco, daisys, hops). Additionally, the Farm grows a small amount of corn and squash (winter and summer).
by Sara Eckel

Crains New York Business
August 28, 2011

U.S. Solar Industry Was Net Global Exporter by $1.9B in 2010
A new report shows that the U.S. is central to the global solar supply chain. In 2010, U.S. solar firms achieved a positive trade flow of $1.9 billion globally according to SEIA® and GTM Research’s U.S. Solar Energy Trade Assessment 2011. Photovoltaic (PV) components accounted for more than 99 percent of the year’s exports, with solar heating and cooling (SHC) claiming the remainder of the positive balance.

For the U.S. PV manufacturing industry, 2010 was a record year. Exports totaled more than $5.6 billion, with PV polysilicon feedstock and capital equipment leading all components at $2.5 billion and $1.4 billion respectively. The leading destinations for U.S.-sourced PV components were China and Germany. Meanwhile, U.S. imports of PV products totaled $3.7 billion, the majority of which ($2.4 billion) came from procurement of modules assembled overseas. China and Mexico were the top two sources of PV goods headed to the U.S. in 2010.

Furthermore, the U.S. was a net exporter of solar products to China last year by more than $240 million. The U.S. primarily sold capital equipment and PV polysilicon to China, while China primarily sold PV modules to the U.S.

“The U.S. solar energy market continues to be a bright spot in an otherwise bleak economy. As the global solar industry continues to grow and evolve, the U.S. is seen more and more as a leading market – both in installations and in exports. Solar is a showcase industry of U.S. ingenuity.  In 2010, we grew by over 100 percent, we achieved a significant positive trade balance, and we exported more goods and services to China than we imported,” said Rhone Resch, president and CEO of SEIA. “Solar energy is an industry invented in the U.S. that is helping our country reclaim our manufacturing leadership and creating tens of thousands of jobs.  But to maintain our competitive advantage, we need innovative, proactive solutions from policymakers to match the investments being provided overseas to grow robust solar supply chains. Doing so will result in new jobs and opportunities for communities that have seen their factories close up shop in recent years.”

“Until now, the finished module was the industry’s benchmark for judging the health of the PV manufacturing sector,” said Shayle Kann, Managing Director of Solar at GTM Research. “However, the PV market is more complex than meets the eye. To completely understand solar trade flows, this report looks both at earlier steps in the value chain and at the non-panel components of a solar PV system. As our research shows, the U.S. remains a focal point in global PV manufacturing, thanks largely to the domestic manufacturing of feedstock and manufacturing equipment.”

According to the U.S. Solar Energy Trade Assessment 2011, a significant portion of the domestic value generated by the PV industry resides beyond manufactured components; site preparation, labor, permitting, financing and other industry ‘soft costs’ comprised nearly 50 percent of total solar revenue in 2010. The report found $4.4 billion of domestic revenue accrued last year from U.S. solar installations. This domestic value originated from both local and foreign firms employing U.S. resources on the ground for solar goods and services. According to the report, for every dollar spent on a U.S. solar installation in 2010, $0.75 accrued to the U.S.

To download a free copy of U.S. Solar Energy Trade Assessment 2011, visit

About the Report:
U.S. Solar Energy Trade Assessment 2011 is a free report researched and published by GTM Research and SEIA®. This is the second annual edition of a study first published in November 2010. It is a comprehensive analysis of trade flows and domestic value creation in the U.S. solar energy industry for the calendar year 2010. The primary intent of this study is to go beyond the relatively simplistic analysis of solar trade issues often provided in both industry and political circles.

Key Findings:
  • The U.S. is a significant net exporter of solar energy products with total net exports of $1.9 billion in 2010.
  • The U.S. is a net exporter to China by more than $240 million.
  • The largest solar energy export product is polysilicon, the feedstock for crystalline silicon photovoltaics, of which the U.S. exported $2.5 billion in 2010.
  • The second largest solar energy export product is PV capital equipment, the manufacturing equipment for PV products, of which the U.S. exported $1.4 billion in 2010.
  • The largest solar energy import product is the PV module, of which the U.S. imported $2.4 billion in 2010.
  • 2010 U.S. solar energy installations created a combined $6.0 billion in direct value, of which $4.4 billion (75%) accrued to the U.S.
    • 82% ($3.6 billion) of the domestic value created by solar in the U.S. came from the PV sector
    • 9% ($419 million) came from the concentrating solar sector
    • 9% ($400 million) came from the solar heating and cooling sector
Background Resources:

U.S. Solar Market Insight Report: 1st Quarter 2011:

The Solar Energy Industries Association (SEIA)
Press Release dated August 29, 2011

Germany Dims Nuclear Plants, but Hopes to Keep Lights On
Not since the grim period after World War II has Germany had significant blackouts, but it is now bracing for that possibility after shutting down half its nuclear reactors practically overnight.

Nuclear plants have long generated nearly a quarter of Germany’s electricity. But after the tsunami and earthquake that sent radiation spewing from Fukushima, half a world away, the government disconnected the 8 oldest of Germany’s 17 reactors.... Three months later ... Parliament voted to close them permanently. There are plans to retire the remaining nine reactors by 2022.

As a result, electricity producers are scrambling to ensure an adequate supply. Customers and companies are nervous....

“It’s easy to say, ‘Let’s just go for renewables,’ and I’m quite sure we can someday do without nuclear, but this is too abrupt,” said Joachim Knebel, chief scientist at Germany’s prestigious Karlsruhe Institute of Technology. He characterized the government’s shutdown decision as “emotional” and pointed out that on most days, Germany has survived this experiment only by importing electricity from neighboring France and the Czech Republic, which generate much of their power with nuclear reactors.

Then there are real concerns that the plan will jettison efforts to rein in manmade global warming, since whatever nuclear energy’s shortcomings, it is low in emissions....
The International Energy Agency, generally a fan of Germany’s green-leaning energy policy, has been critical.

Germany’s planners believed they could forgo nuclear energy in large part because of the country’s remarkable progress in renewable energy, which now accounts for 17 percent of its electricity output, a number the government estimates will double in 10 years. On days when the offshore wind turbines spin full tilt, Germany produces more electricity from renewable sources than it uses, according to European energy monitors.

Germany has “exceeded everyone’s expectations on renewable power,” said Mr. Varro, showing that it could be cost effective and reliable.

Until it closed the reactors, Germany was Europe’s leading energy exporter.

With a total of 133 gigawatts of installed generating capacity in place at the start of this year ... the country needs about 90.5 gigawatts of generating capacity on hand to fill a typical national demand of about 80 gigawatts a day. So the 25 gigawatts that nuclear power contributed would not be missed — at least within its borders.

To be prudent, the plan calls for the creation of 23 gigawatts of gas- and coal-powered plants by 2020. Why? Because renewable plants don’t produce nearly to capacity if the air is calm or the sky is cloudy, and there is currently limited capacity to store or transport electricity, energy experts say.

New coal and gas plants will use the cleanest technology available and should not aggravate climate change, government officials said, because they will operate within the European carbon-trading system in which plants that exceed the allowed emissions cap have to buy carbon credits from companies whose activities are environmentally beneficial, thus evening out the environmental ledger.

Electricity prices are expected to rise by 35 to 40 euros ($50 to $60) per household each year, or less than 5 percent, the government estimates. Though nuclear energy generally costs less than newer options, German law has long stipulated that renewable energy must be purchased first even if it is costlier.

But skeptics consider government assumptions overly optimistic. Stefan Martus, the mayor of Philippsburg, says he believes energy costs could rise more dramatically than government estimates; the price of permits to offset dirty power plants is highly unpredictable and variable, like the value of stocks. And the International Energy Agency does not think Germany — or any other country — will be able to reduce its emissions at a reasonable cost without nuclear power.

Energy agency officials also question predictions that electricity use will decline an additional 10 percent over the next decade given the projected expansion of electric growth of the German economy. The average German family already uses only about half the electricity of its American equivalent.
Even before Fukushima, nuclear energy’s days in Germany were numbered. ... Germany was already enacting a plan for slowly phasing out nuclear energy by 2023....  Still, Chancellor Angela Merkel, herself a physicist, decided last fall to extend the operating licenses of Germany’s nuclear plants over concerns that innovation alone would not satisfy the country’s energy appetite.  Fukushima changed everything....

Biblis and nearby Philippsburg were stunned by the suddenness of the about-face.... Both towns will lose hundreds of jobs and millions in tax revenue.

German energy companies say they have been handed a national energy template that looks good on paper but is technically challenging. Although the country’s production of energy is bounteous, they say it is not always available where and when it is needed. Northern Germany has offshore wind and coal deposits, but southern Germany — a manufacturing epicenter that is home to Mercedes, BMW and Audi — has no plentiful local fuel source other than nuclear. Germany’s current grid is highly decentralized, lacking high-voltage transmission lines to move electricity over long distances.
Amprion, the largest of the country’s four grid operators ... had already started working toward a renewable future with no nuclear power, planning for 500 miles of new transmission lines to bring electricity from north to south that would cost $4.3 billion and take 10 to 15 years to build. At most, 40 miles of lines have been completed.

The country has also been pouring money into biomass plants and solar installations — millions of panels now sit on German roofs and fields. Despite recent technological improvements, solar electricity is still far more expensive to generate than wind, gas or nuclear power. And output can be highly seasonal.

Germany’s hope that gas and coal plants will temporarily replace some of the lost nuclear generation may be hard to fulfill — power companies remain lukewarm about building them especially given the German policy of buying “clean” energy first. “Few operators will be willing to build a power plant in a form that may ultimately only run a couple of hundred hours a year,” Mr. Grossman of RWE said.

This winter, Amprion predicts its grid will have 84,000 megawatts of electricity at its disposal, to provide 81,000 megawatts needed for consumption — an uncomfortably slim margin of safety, Mr. Vanzetta said. In prior years, electricity was readily available for purchase on the European grid if the price was right. But exported German power is what helped keep France glowing in winter.

"At the moment, we have a stressed system, but it’s under control,” Mr. Vanzetta said. “If we have days with no wind and no solar and can’t buy energy from abroad, then there is the risk of blackouts.”

by Elisabeth Rosenthal
August 29, 2011

OFM Celebrates One-Year Anniversary of Solar Farm With Plans to Expand - Furniture manufacturer to house one of the largest renewable energy sites in North Carolina
 This month office and school furniture manufacturer, distributor and wholesaler OFM is celebrating the one-year anniversary of the 250-kilowatt solar farm it installed on the rooftop of its headquarters in Holly Springs, N.C. last August. The company has since been producing more energy than it uses.

“We've been very happy with the success of this initiative which has certified us as carbon neutral and a renewable energy facility,” said Abel Zalcberg, co-founder and chief executive officer of OFM. “We are now planning to install another 250-kilowatt solar farm on the rooftop of our headquarters to be completed by the end of the year making ours the largest in the state through the Progress Energy SunSense Commercial Solar PV program.”  

OFM’s solar farm at present consists of 1,042 solar panels generating 322,500 kilowatts of energy each year which is sold to Progress Energy as part of its SunSense Commercial Solar PV program. This is a new initiative inspired by the North Carolina General Assembly, which mandates Progress Energy obtain three percent of its power from renewable energy sources in 2012 and up to 12.5 percent by 2021.

To watch a video of OFM’s solar farm project that was completed last August, go to:
In a separate correspondence Abel Zalcberg notes the following-
- The total cost to install the Solar Farm was $1,480,000.
- Subsidies provided include a government grant of $420,000, 100% depreciation in the first year, 35% State Tax credits and $60,000 per year from Progress Energy for the purchase of the energy created.
- The company is not using the energy they create, it is more profitable to sell it back.

OFM, Inc. Press Release dated August  2, 2011

Sunday, August 28, 2011

Study Shows Significant Economic Value of Jamaica’s Threatened Coral Reefs
Tourism, fisheries, and shoreline protection represent just three of the many culturally and economically important services reef ecosystems provide in Jamaica, according to a MacArthur-supported report [PDF, 8 pg] by the World Resources Institute, the Nature Conservancy, the University of the West Indies’ Marine Geology Unit, and the Mona GeoInformatics Institute. The analysis showed reef-related fisheries alone contributed $34.3 million to the local economy, supported 15,000 - 20,000 fishermen, and impacted the livelihoods of more than 100,000 people island-wide. Currently, all of Jamaica’s coral reefs are under threat from overfishing, bad fishing, watershed-based pollution, coastal development, marine-based pollution, climate change, and ocean acidification. Watch the CNN video »

The MacArthur Foundation
August 3, 2011

Saturday, August 27, 2011

The Economics of Tail Events with an Application to Climate Change 
Abstract: From time to time, something occurs that is outside the range of what is normally expected. This is called a tail event in the sense that it is way out the tail of a probability distribution. This article considers the implications of tail events for economic policy and climate change economics. This issue has been analyzed by Martin Weitzman, who has proposed a dismal theorem. The theorem’s general point is that under limited conditions concerning the structure of uncertainty and preferences, society has an indefinitely large expected loss from high-consequence, low-probability events and that standard economic analysis does not apply. The present article is intended to put the dismal theorem in context and examine the extent of its relevance with regard to climate change. There are indeed deep uncertainties about virtually every aspect of the natural and social sciences of climate change, and the only way these uncertainties can be resolved is through continued careful consideration and analysis of all data and theories. I conclude that tail events are important phenomena that require careful analysis and attention. At the same time, I find that there is no universal rule for determining when benefit–cost analysis should or should not be applied.

by William D. Nordhaus; Department of Economics, Yale University, New Haven, CT 06520; e-mail:
Review of Environmental Economics and Policy via Oxford Journals
Volume 5, Issue2; pages 240-257

For Coal Plants, a Game of Chicken
On August 15, 2011 Matthew Wald wrote:
In an article in Friday’s paper, I described how some companies that operate dirty coal-fired power plants are playing chicken as they face a decision on whether to retire them or install expensive scrubbers and filters.
They are waiting to see what their neighbors will do as new environmental rules take effect:....
In fact, in the largest grid jurisdiction in North America, the one operated by PJM Interconnection, money comes to plant owners in several different ways. The biggest is selling energy, or kilowatt-hours, and that price varies by time of day. Plants in areas where there is a lot of congestion on the grid and new supplies cannot easily be shipped in will enjoy something close to a monopoly and take in very high revenues on peak summer days.

American Electric Power, a multistate utility based in Columbus, Ohio, has been arguing that if it and its competitors close some big low-cost plants, customers will face abrupt rate increases of 10 to 35 percent. The nature of the PJM market magnifies the importance of losing a cheap generator; all producers get the same payment, equal to the highest-cost generation running, and if a low-cost generator is retired, then the most expensive generator needed to replace it will set a higher price for everyone.

But the consulting firm Bloomberg New Energy Finance identifies a second mechanism by which prices will increase. In PJM and in parallel organizations covering New York, New England, the upper Midwest and California, electric generating stations are selling several services at once, each with its own price.

The simpler thing they sell is electricity, which is priced in units of megawatt-hours. A megawatt-hour, or 1,000 kilowatt-hours, is the amount of energy that a suburban house uses in a month or so. But they also sell capacity: each utility that serves customers has to go into the wholesale market and buy not only energy but the actual availability of generation.

There are few parallels outside the electricity world; it is as if a restaurant charged upfront for a reservation for a table, independent of the price of the food. The way the electric system works, the equivalent in a restaurant would mean paying for a table of adequate size, whether or not everybody showed up.

The capacity market is not only a way to compensate generators; it can also be used to set a value on the services of “demand response” companies. Those are companies that line up electricity customers who agree, in exchange for a payment, to turn off their equipment on peak days.

Companies that serve retail electricity customers must buy as much capacity as the retail customers used in their last peak load day, plus a margin. And this summer, many of the companies had new peak loads.
Eventually electricity customers pay for both the energy and the capacity. The mechanism is intended to compensate generators that sit idle much of the year but are really important on hot days. The price also serves as a signal to companies thinking about building new plants; if it rises high enough, they know it is time to build.

Capacity payments have mostly been low in the last few years because the recession has cut demand for electricity and supply has been high relative to demand in the auctions or individual deals between utilities that serve customers and companies that own generation.

In a research note released late Friday, Bloomberg New Energy Finance said that capacity payments in 2014 and 2015 would reach a level equal to $7 per megawatt-hour of electricity sold — in other words, about $7 on the monthly bill of that suburban house, or seven-tenths of a cent per kilowatt-hour. The national average retail price of a kilowatt-hour is about 10 cents, although in some parts of the Northeast it can be triple that amount.

Higher capacity payments are one of the mechanisms through which surviving electric plants will get the revenue needed for add-on antipollution devices.

Charles Blanchard, an analyst at Bloomberg New Energy Finance and author of the research note, said in an e-mail that capacity payments may reach 25 percent of total revenues as supply is reduced.

For the Independent System Operators, or I.S.O.’s, like PJM, the capacity problem will become more important as fewer generators are coal- or gas-fired power plants, which can be switched on at will to meet peak load, and more are wind or solar, which must be compensated for times it is not sunny or windy.
The New York Times Green Blog
August 15, 2011 

Saturday, August 20, 2011

Good Enough is Better than Best for Solar Modules
In a race to improve margins and expand market share, solar manufacturers are seeking to jettison all unnecessary costs from their photovoltaic (PV) modules. To date, they’ve been more successful in trimming costs from active PV materials – helped, in part, by declining silicon prices. But non-active materials such as frontsheets, encapsulants, and backsheets have proven to be more stubborn. These non-active materials contribute between 25% and 40% to overall module costs, depending on the type of module, and that percentage will grow as silicon prices continue to decline.

In a new report titled, “Critical to Quality: Illuminating Drivers for Change in Solar Non-Active Materials,” Lux Research surveys the field of incumbent and emerging non-active material technologies for flat plate PV modules, and identifies the most realistic and viable opportunities for minimizing trade-offs between cost and performance.

“Module-makers confront risks whether they explore unfamiliar new materials themselves, or let competitors search for a better solution and find it first,” said Jason Eckstein, a Lux Analyst and the report’s lead author. “The guiding principle is to find new non-active materials that minimize costs while meeting the minimum 25-year threshold for module lifetimes.”

In preparing its report, Lux Research surveyed 30 manufacturers of crystalline silicon (x-Si), rigid thin film, and flexible thin film PV modules, and built detailed analytical models to identify the most attractive development opportunities for non-active materials based on cost vs. performance tradeoffs, among others. Among its findings:
  • Float glass will edge into rolled glass’ traditional dominance over x-Si modules. Historically, rolled, patterned glass frontsheets have dominated the x-Si module market due to higher transmittance over float glass alternatives more typically used in thin-film modules. However, even as rolled glass has increased in price, suppliers have begun offering float glasses of equal quality, and x-Si players like SolarWorld have begun incorporating the cheaper alternative into their modules.
  • Higher efficiency modules to expand use of anti-reflective (AR) coatings. To date, AR-coated glass has seen low adoption rates. By reducing reflectance from the frontsheet, however, AR coatings directly boost out-of-the-box efficiency for solar modules. In fact, based on current pricing, AR-coated glass offers a significant value for higher efficiency crystalline silicon and CIGS technologies at a cost less than $4/m2, which will fuel higher adoption in the future.
  • Despite claims of enhanced performance from new encapsulants, adoption is unlikely. Several suppliers have announced new encapsulant materials, claiming higher performance than ethylene vinyl acetate (EVA), the industry standard. But EVA is a low cost solution that addresses existing performance requirements for every market segment. Overall, module-makers will remain adverse to new encapsulants that require a change to their manufacturing processes, even given the incentive of more durable or efficient modules.
Lux Research
Press Release dated June 1, 2011

Friday, August 19, 2011

Seven-point plan for Japan’s energy strategy post-Fukushima
The crisis at the Fukushima Daiichi nuclear reactors, and sudden gap in Japan’s power capacity, should prompt the country to adopt a bold, seven-point plan for its future energy mix. Research by Bloomberg New Energy Finance shows that Japan has much better options available than increasing its reliance on fossil-fuel generation.

The Fukushima disaster caused Japan at a stroke the country to lose 20% of its nuclear electricity supply. Nuclear produced 300TWh of power in 2010, and before the March tsunami, the plan was for this to increase by nearly 50% to 447TWh by 2019. Japan had made aggressive commitments to reduce carbon emissions, and despite broad targets for renewable energy, the reality was that these depended largely on plans for new nuclear power stations – plans which, in May, Prime Minister Naoto Kan announced would be scrapped entirely. So Japan finds itself not just dealing with a supply crunch, but having to develop an entire new energy policy on the fly, from the ground up.

“Our analysts have put together a seven-point plan for Japan’s future energy strategy,” said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “We believe the plan would contribute to a reinvigoration of Japan’s economy, as well as allowing it to meet energy needs and hit its carbon emission targets.”

In brief, these are the seven: 

1. Target world leadership in energy efficiency
Japan responded aggressively to the threat posed by last century’s oil shocks. As a result, by 1990 it was the world leader in several key clean energy technologies, including batteries, heat pumps, fuel cells, mass transportation and solar power. Since 2000 Japan’s leadership has been overtaken by Germany, Denmark, Spain, China, even in some cases the US.

Japan should now embark on a crash programme of energy efficiency, in industrial, commercial and residential applications. Creating large pools of demand for LEDs, building automation systems, smart grids and other efficiency technologies should be accompanied by programmes to support the supply side, so that Japanese companies can become export powerhouses to help fund the investment. In particular, technologies for “peak shaving” – shifting demand to eliminate the need to build new power stations – should be given the highest priority, and Japan should aim to be the first G20 country with universal connection to a truly smart grid. 

2. Get hold of accurate cost data
It is absolutely vital that the authors of Japan’s new energy strategy base it on real current costs of clean energy solutions, and their likely evolution. It is not well-recognised that solar PV today is competitive with retail electricity prices in a number of markets, and will be competitive in a lot more by 2015. This year’s best new wind farms will be producing power at $68/MWh without subsidies, competitive with new coal plants, once the coal plants have to cover their capital costs and pay for proper pollution control. The old certainties of centralised power stations, baseload requirements, redundant grids, and high-cost renewables need to be set aside. 

3. Pass a feed-in tariff
In Japan today, there is a need for speed. Restoring the country’s electricity supply is urgent. A feed-in tariff should be the policy-maker’s weapon of choice in giving momentum to a clean energy roll-out. Supported by a residential-scale PV buy-back programme and installation subsides, Japan’s annual installation doubled last year. However last year Germany installed 7.5GW of PV, against a bit shy of 1GW in Japan. There is a feed-in tariff bill already on the floor of the Diet (parliament); the bill covers, beyond residential-scale PV, biomass, small hydro, geothermal, commercial-scale PV and wind. Ideally, the bill would have a grandfather clause so it falls away in two years, and/or a cap on volume, or an auction for the rights to qualify for certain tariffs. But the overriding priority is for action, without delay. 

4. Eliminate barriers to clean energy roll-out
Not nearly enough attention is paid to removing barriers to the quick roll-out of clean energy – reduce the risks, eliminate legislative and planning bottlenecks, create markets quickly through public sector procurement. The planning process in Japan is extremely tortuous, holding back the geothermal and wind sectors in particular. Now would be a good time to reform it. Wherever the costs of clean energy technologies are higher in Japan than elsewhere, wherever projects are harder to implement, find out why and bring together the stakeholders to sort out the problem. The huge potential of Japan’s geothermal sector, and the obstacles facing it, are examined in a Bloomberg New Energy Finance insight note published to clients on 2 June, entitled Could The Answer to Japan’s Energy Gap Lie Right Under Its Feet? 

5. Restructure power markets
Despite much debate about liberalisation, Japan’s power markets are more rigid than in almost any other divided up into 10 regional near-monopolies. Given the extremity of the challenge, the priorities must be innovation, flexibilityand rewards for problem-solving, but the system is biased towards protecting the status quo. In particular, with Tepco, one of the world’s largest privately-owned utilities with 24m customers, bearing massive liability and needing full support from the national government, now would be a good time to advance a broader reform agenda on energy. This would have knock-on effects on Japanese industrial and economic dynamism: think deregulation of supply, incentives to bring in new participants, net metering, funding support for use of new technologies, support for micro-grids and off-grid living, creative mechanisms to reward demand management and large volumes of local renewable power resources. 

6. Start to rebuild trust in nuclear power
It will be hard to erase those images of Japanese toddlers being checked for radiation by masked inspectors. From an engineering standpoint, however, there is no reason why nuclear power cannot meet a significant and even growing part of Japan’s energy needs. The nuclear industry practically invented the science of risk management, and has at its disposal techniques to understand and manage risk with clinical thoroughness. What is required is a root-and-branch overhaul of the Japanese nuclear industry’s safety culture. Out must go the clubby atmosphere, the links with politicians, the tolerance for sloppiness, prevarication, incompetence and cover-ups. In must come independence, transparency, whistle-blowing, ruined careers and even prosecutions. 

7. Fire up gas generation to bridge some of the gap
Inevitably, ramping up renewables and, especially, rebuilding trust in nuclear power will take years. In the short term, Japan needs quickly to increase its ability to import natural gas and increase gas-fired power capacity, beyond 2010’s figure of just over 60GW. From the point of view of its carbon emission targets, additional gas-fired generation makes more sense for Japan as a stop-gap than increased coal- or oil-fired output.

Bloomberg New Energy Finance
Press Release dated June 9, 2011

Lux Research Reveals Rankings of New HVAC Technologies
Despite rising energy costs and looming carbon regulations, cutting-edge heating, air conditioning and ventilation (HVAC) technologies face an uphill battle for adoption by a conservative building industry. In a report titled “Uncovering Attractive Innovations in HVAC Amidst Evolutionary Growth,” Lux Research surveys the field of incumbent and emerging HVAC technologies; reviews the geographical, regulatory, and economic factors influencing adoption; and assesses which systems and components are best positioned for future growth.

Building HVAC systems consume 13% of all primary energy generated around the globe, crying out for new, more energy-efficient HVAC equipment, including advanced heat pumps, absorption chillers, evaporative chillers, and condensing boilers. In addition, there’s demand for component technologies that improve the operational cost or performance of existing HVAC equipment, including variable speed compressors, electronic expansion valves, advanced humidity removal, heat recycling, variable frequency drives, and thermal energy storage.

"While some builders and owners will choose to install whole new, cutting-edge HVAC systems, occupants and building managers will favor lower-cost incremental component solutions that improve efficiency of their existing systems,” said Jaideep Raje, a Lux Research Senior Analyst and a contributing author of the report. “Component technologies demonstrate the quickest return on investment, smoothing their path to adoption.”
The report evaluates HVAC systems and components separately and scores technologies on their technical value and maturity. It then plots each technology’s relative potential on a matrix comprising four quadrants: Current Winners, Future Winners, Long-Shot, and Faded Incumbents. Among its key findings:
  • Advanced HVAC systems are seeing incremental adoption. Yesterday’s steam-heated boilers and standard furnaces are slowly giving way to more efficient gas-fired furnaces and condensing boilers, as well as new technologies like radiant heating and advanced heat-pumps. Heat pumps show particular potential when coupled with water heaters, as this approach – from companies like Cool Sound Industries, WhisperGen, and Disenco – combines the efficiency of electrically driven pumps with advanced absorption cycles.
  • Opportunities abound for advanced HVAC components to show their value. Simplicity can shorten the path to adoption, as illustrated by component-level solutions such as variable frequency drives (VFDs) and expansion valves. Rated a Current Winner, low-cost VFDs enable compressors to pump only what is needed for specific applications, significantly improving the efficiency of chillers; most see payback periods of 2.5 years or less. Expansion valves, meanwhile, rank among the Future Winners, thanks to their ability to reduce energy consumption of air conditioning systems and boilers and their very attractive payback periods.
  • The value of integrated HVAC technologies can exceed the sum of their parts. Many of the report’s highest ranked HVAC technologies can deliver even better returns when combined. Using expansion valves with membrane-based air-quality and humidity-control technologies, for example, can reduce HVAC energy consumption by 40% without a significant capital cost. Developers that can pool the value of their HVAC technologies through integration will also see their commercial opportunities multiply.
Uncovering Attractive Innovations in HVAC Amidst Evolutionary Growth,” is part of the Lux Green Buildings Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the bi-weekly Lux Research Green Buildings Journal, and on-demand inquiry with Lux Research analysts.

Lux Research
Press Release dated June 15, 2011

Thursday, August 18, 2011

Wind farm valuations declined in 2010 as developers sought to sell assets
The year 2010 saw a record number of acquisition deals for wind assets worldwide, although the total capacity of wind assets changing hands was less than half that of 2008. The average price for operating plants fell, while those for permitted pre-construction projects rose, according to the latest Portfolio Hunters report published by Bloomberg New Energy Finance.

The report is based on analysis of the world's most robust data set of 875 sale and purchase transactions of wind assets from early-stage developments to operating wind farms. It found that some 26.8GW of wind assets were sold  in 2010, up 15% from 2009's levels but down more than half on 2008's figure of 53.9GW. However, a record 163 deals closed in 2010, up nearly 60% from  2009 figures.

During the period from 2001 to 2011, there were 309 deals with disclosed pricing and portfolio information,  and these were used to derive pricing benchmarks by stage of development and by geographic market. The main  findings of the report include:
• The global average price for operating wind farms sold in 2010 fell 5%  to EUR 1.58m per MW. Prices peaked at EUR 1.78 per MW back in 2008.
• This fall reflected the pressure on some project developers to sell  completed wind farms in order to strengthen their balance sheets and secure  cash to fund their current development portfolio.
• Some utilities have also been selling wind assets to rebalance their portfolios, mainly in Iberian markets and the offshore sector.
• New, well capitalised buyers have entered the market, attracted by the lower prices. These included pension funds, asset managers and private equity funds, insurance companies, technology and consumer brands, most of which target commissioned assets with no financing or construction risk.
• Buyers continued to pay a significant premium for management teams, although somewhat less than in earlier years. Average valuations for wind  development companies were EUR 1.88m/MW while average pricing for  acquisitions of projects only came in at EUR 1.48m/MW - some 22% lower.
• Fully-permitted, but unbuilt, assets saw a 25% jump in average pricing to EUR 172,000 per MW, reflecting fierce competition to secure good wind sites - especially in Europe - and a recovery from distressed prices in 2008-09.
• Bloomberg New Energy Finance expects to see a further, slight reduction of pricing for commissioned assets (to EUR 1.5m/MW) in 2011 as policy uncertainty and asset divestments continue - providing opportunities for asset buyers.

Michael Liebreich, chief executive of Bloomberg New Energy Finance, commented: "In the wind market, we are seeing the emergence of a new normality after the depressed acquisition activity levels of the post-financial crisis period. As always, asset owners with the lowest cost of capital are the net buyers. What is different from before the crisis is that in many cases these are now long-term financial owners, rather than utilities."

Bloomberg New Energy Finance
Press Release dated July 12, 2011

Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010
This report responds to a November 2010 request to the U.S. Energy Information Administration (EIA) from U.S. Representatives Roscoe G. Bartlett, Marsha Blackburn, and Jason Chaffetz for an update to a 2008 report prepared by EIA that provided a snapshot of direct federal financial interventions and subsidies in energy markets in fiscal year (FY) 2007, focusing on subsidies to electricity production (Appendix A). As requested, this report updates the previous report using FY 2010 data and is limited to subsidies that are provided by the federal government, provide a financial benefit with an identifiable federal budget impact, and are specifically targeted at energy markets. Subsidies to federal electric utilities, in the way of financial support, are also included, as requested. These criteria do exclude some subsidies beneficial to energy sector activities (see “Not All Subsidies Impacting the Energy Sector Are Included in this Report”) and this should be kept in mind when comparing this report to other studies that may use narrower or more expansive inclusion criteria.

Energy subsidies and interventions discussed in this report are divided into five separate program categories: 
Direct Expenditures to Producers or Consumers. These are federal programs that involve direct cash outlays which provide a financial benefit to producers or consumers of energy. 
Tax Expenditures. These are provisions in the federal tax code that reduce the tax liability of firms or individuals who take specified actions that affect energy production, consumption, or conservation. 
Research and Development (R&D). These are federal expenditures aimed at a variety of goals, such as increasing U.S. energy supplies or improving the efficiency of various energy consumption, production, transformation, and end-use technologies. R&D expenditures generally do not directly affect current energy consumption, production, and prices, but, if successful, they could affect future consumption, production, and prices. 
Loans and Loan Guarantees. These involve federal financial support for certain energy technologies. The U.S. Department of Energy (DOE) is authorized to provide financial support for “innovative clean energy technologies that are typically unable to obtain conventional private financing due to their ‘high technology risks.’ In addition, eligible technologies must avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases." 
Electricity programs serving targeted categories of electricity consumers in several geographic regions of the country. Through the Tennessee Valley Authority (TVA) and the Power Marketing Administrations (PMAs), which include the Bonneville Power Administration (BPA) and three smaller PMAs, the federal government brings to market large amounts of electricity, stipulating that “preference in the sale of such power and energy shall be given to public bodies and cooperatives.” The federal government also indirectly supports portions of the electricity industry through loans and loan guarantees made by the U.S. Department of Agriculture’s Rural Utilities Service (RUS) at interest rates generally below those available to investor-owned utilities.

With the exception of the federal electricity programs and loan guarantee programs, this report measures subsidies and support on the basis of the cost of the programs to the federal budget as provided in budget documents. This report measures support provided by federal electricity programs by comparing the actual cost of funds made available to these entities to the cost of funds that they might otherwise have incurred. Similarly, the value of the support provided by DOE's loan guarantee program is estimated by analyzing what the costs of financing eligible projects might be without the guarantees and the cost of the credit subsidy required for the guarantee. Uncertainties in the estimation of subsidy and support costs for federally-guaranteed loans, federal utilities, and participants in Rural Utilities Service loan programs are reflected by providing a range of subsidy estimates for selected programs in the body of the report.  To facilitate exposition, the Executive Summary presents only midpoint value estimates for these programs.

Key findings: 
-The value of direct federal financial interventions and subsidies in energy markets doubled between 2007 and 2010, growing from $17.9 billion to $37.2 billion. In broad categories, the largest increase was for conservation and end-use subsidies, followed to a lesser degree by increases in electricity-related subsidies and subsidies for fuels used outside the electricity sector
-Subsidies to the wind industry increased 10-fold, from $467 million in 2007 to $4.9 billion in 2010, while that source’s share of total energy production increased from 0.5 percent to 1.2 percent during the same time.-Renewable energy subsidies increased by 186 percent from $5.1 billion to $14.7 billion.
-In 2010, solar received $745.19 per unit of energy produced and wind received $52.68.  That same year, hydropower received $0.84 per unit of energy produced and coal received $0.64 per unit.
-In 2010, oil, natural gas, and coal accounted for 78 percent of U.S. energy production while receiving 11 percent of all federal energy subsidies.

U.S. Energy Information Administration (EIA) Released August 1, 2011

Fight Brewing Over Off-Grid Energy Storage
Struggling to get their feet in the door of transportation and grid-tied markets, emerging electrical storage developers have begun eying off-grid opportunities as a way to attain scale and lower costs. But the off-grid market represents a rapidly closing window of opportunity for emerging storage – only developers who take immediate and intelligent action will capture a meaningful share of the market, according to a new report by Lux Research.

The report, titled “Off-grid: A Modest Meal for Starving Storage Developers,” forecasts opportunities for emerging battery, flywheel, ultracapacitor, and fuel cell technologies in off-grid markets, such as telecommunication networks, datacenters, and mobile and semi-permanent military bases. The off-grid storage market will grow from $9.9 billion in 2011 to $13.5 billion in 2016, a 6% compound annual growth rate. Emerging technologies will be the fastest growing segment of the market, growing from $1.5 billion in 2011 in 2011 to about $4 billion in 2016, a 22% CAGR.

“Considering the current financial and regulatory state of grid-connected storage, the off-grid market presents a relatively bright opportunity for emerging storage technologies,” said the report’s lead author, Steve Minnihan. “But given the sheer number of developers competing for a share of the market, decisive action is needed to succeed.”

The report bases its analysis on a lifetime cost calculation for each technology, market, and application it covers. Among its key conclusions:
  • Li-ion sees small, steady growth in diversified markets. Li-ion batteries will grow from $795 million in revenue in 2011 to $2.2 billion in 2016, a 23% compound annual growth rate (CAGR). Thanks to its improved cycle life and energy density over lead-acid batteries, lithium-ion will see narrow penetration into the high-end datacenter market, netting 6.8% of unlimited power supply (UPS) capacity and 5.8% of telecom backup capacity in 2016. If Li-ion developers can trim costs 33% to $400/kWh and demonstrate improved lifetimes, then the technology could usurp further market share in the telecom backup market in the latter half of the decade.
  • Flywheels and ultracapacitors will supplement, not lead, the UPS market. Together, flywheels and ultracapacitors will capture 10% of the datacenter UPS market by 2016. Flywheels will grow from $49 million in 2011 to $104 million in 2016 (a 16% CAGR), while ultracapacitors will expand from a base of $88 million to $248 million in 2016 (a 23% CAGR). High reliability, superior cycle life, unsurpassed power density, and minimal maintenance costs all help make these technologies strong candidates, but their limited energy capacity raises barriers against broad adoption.
  • Fuel cell potential is strong, with room for growth beyond 2016. Fuel cells will grow from $536 million in 2011 to $1.3 billion in 2016, a 22% CAGR, through adoption in the off-grid telecom power and datacenter market. This expansion won’t be enough, however, to support the expansive list of fuel cell developers, leading to fierce competition and consolidation.
“Off-grid: A Modest Meal for Starving Storage Developers,” is part of the Lux Smart Grid and Grid Storage Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Smart Grid Journal, and on-demand inquiry with Lux Research analysts.

Lux Research
June 21, 2011

When Does Institutional Investor Activism Increase Shareholder Value?: The Carbon Disclosure Project
Abstract: This paper presents the first empirical test of the financial impacts of institutional investor activism towards climate change. Specifically, we study the conditions under which share prices are increased for the Financial Times (FT) Global 500 companies due to participation in the Carbon Disclosure Project (CDP), a consortium of institutional investors with $57 trillion in assets. We find no systematic evidence that participation, in and of itself, increased shareholder value. However, by making use of Russia’s ratification of the Kyoto Protocol, which caused the Protocol to go into effect, we find that companies’ CDP participation increased shareholder value when the likelihood of climate change regulation rose. We estimate the total increase in shareholder value from CDP participation at $8.6 billion, about 86% of the size of the carbon market in 2005. Our findings suggest that institutional investor activism towards climate change can increase shareholder value when the external business environment becomes more climate conscious.

by Eun-Hee Kim and Thomas Lyon
The B.E. Journal of Economic Analysis & Policy
Volume 11, Issue 1; Article 50
DOI: 10.2202/1935-1682.2676

Urban Density, Human Capital, and Productivity: An empirical analysis using wage data 
Numerous studies have indicated that densely populated cities enhance the productivity of workers through knowledge spillover and superior matching with employers in the labor market. This paper quantitatively analyzes the relationship among urban density, human capital, and wages by using micro data from the Basic Survey on Wage Structure for the years from 1990 to 2009. According to the estimation of standard wage functions augmented with population density, the agglomeration premium is larger for workers with higher observable skills such as education, tenure, and potential experience, which suggests rapid learning and superior matching in densely populated cities. Under structural changes such as a declining population and the trend toward a knowledge-based service economy, forming densely populated areas by facilitating the migration of workers has desirable effects throughout Japan on both individual wages and firm productivity.
The major results can be summarized as follows:
(1) Simple raw elasticity of nominal wages with respect to municipal population density is about 0.08. After controlling for individual worker characteristics and firm size, this figure decreased to roughly 0.05. By further adjusting regional price disparities, the real wage elasticity becomes about 0.03. This figure is comparable with those found in previous studies.
(2) The agglomeration wage premium is larger for university graduates. This suggests that agglomeration economies and worker skills are complementary.
(3) The wage elasticity to density increases with the tenure of workers up to around 20 years. This result indicates that human capital accumulation through learning by experience within a firm is relatively large in establishments located in densely populated cities.
(4) The wage elasticity to density also increases with the potential experience of workers up to around 30 years of experience. This relationship is stronger for “non-standard employees” who experienced job changes than “standard employees” who served at a single firm for long time. This result suggests that, in addition to the learning effects, superior matching between workers and firms through labor turnover contribute to the urban wage premium.

The full paper is available free of charge at

by Masayuki Morikawa
Ministry of Economy, Trade and Industry (METI)
1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901 11th floor, Annex; Phone: +81-3-3501-1363, Fax: +81-3-3501-8577
July, 2011; 28 pages
via Research Papers in Economics (REPEC)

Refuse Collects Here, but Visitors and Wildlife Can Breathe Free
Waiting lists for selective colleges, fine restaurants and overbooked flights are familiar enough — but Singapore may have the only landfill with a four-month wait once you sign up to visit.

... It’s a manmade island that resembles a nature preserve, despite the 9.8 million tons of incinerated waste lying just a foot under the parklike surface.

Singapore’s land scarcity — the city-state is smaller than Rhode Island — has led the government to develop innovative waste disposal techniques. Among them is an island off the southern part of the mainland that opened after Singapore’s last city dump, Lorong Halus, closed in 1999. By joining two small islands in an area roughly the size of Central Park, the government created Semakau Landfill, Singapore’s first offshore dumping ground, and now a popular local getaway.

The $360 million facility includes a 4.4-mile-long sea wall made of sand, rock and clay, as well as a geomembrane of polyethylene, which lines the island’s periphery to prevent leakage. Incinerated trash from the mainland comes over in barges, and the wet ash is emptied into one of several pits, or “cells,” to eventually be covered over with dirt, where palm trees and other plants naturally take root.

Renovating landfills for public use is nothing new. In New York, the Fresh Kills landfill on Staten Island, which closed in 2001, will reopen as a park that is expected to be completed around 2035. In 1994, Japan turned an old landfill southwest of Osaka into Kansai International Airport, the world’s first ocean airport.

But Semakau Landfill is the only active landfill that receives incinerated and industrial waste while supporting a thriving ecosystem, which includes more than 700 types of plants and animals and several endangered species....

Wildlife is so precious at Semakau that the intended perimeter of the landfill was altered to ensure two mangrove forests were accessible to fresh water from the changing tides. Protected species like great-billed herons and Malaysian plovers nest on the island....
The ... number of public visitors ... has tripled in the last five years, to 13,000 in 2010 from 4,000 in 2005.

The National Environment Agency says the unique landfill system it has created reduces the volume of waste by 90 percent, and adds that 2 percent of Singapore’s power comes from energy generated by four mainland incinerators.
But critics admonish a waste management plan that completely relies on incineration. Large-scale incinerators, like the ones in Singapore, have short life spans, sometimes lasting only 10 years before needing replacement.
Environmentalists from Greenpeace say incineration simply changes the waste problem into a pollution problem.

There is also the small but real risk that the waste will leak into the ocean. Protective measures “will likely succeed in preventing leaching into the surrounding water bodies for a number of years, at least a few decades, but will ultimately fail, posing a risk for future generations,” said Scott Kaufman, an adjunct professor at Columbia University and U.S. senior manager at Carbon Trust, a British nonprofit group that seeks to help companies cut carbon emissions.
by Lindsay Hoshaw
The New York Times
August 15, 2011