http://www.nytimes.com/2011/11/12/business/energy-environment/a-cornucopia-of-help-for-renewable-energy.html
... NRG Energy is building ... a compound of nearly a million solar panels that will produce enough electricity to power about 100,000 homes.
... Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project. Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.
The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.
A great deal of attention has been focused on Solyndra, a start-up that received $528 million in federal loans to develop cutting-edge solar technology before it went bankrupt, but nearly 90 percent of the $16 billion in clean-energy loans guaranteed by the federal government since 2009 went to subsidize these lower-risk power plants, which in many cases were backed by big companies with vast resources.
When the Obama administration and Congress expanded the clean-energy incentives in 2009, a gold-rush mentality took over.
As NRG’s chief executive, David W. Crane, put it ... early this year, the government’s largess was a once-in-a-generation opportunity, and “we intend to do as much of this business as we can get our hands on.” NRG, along with partners, ultimately secured $5.2 billion in federal loan guarantees plus hundreds of millions in other subsidies for four large solar projects.
“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview....
From 2007 to 2010, federal subsidies jumped to $14.7 billion from $5.1 billion, according to a recent study [by the Energy Information Administration available at http://www.eia.gov/analysis/requests/subsidy/.]
Most of the surge came from the economic stimulus bill, which was passed in 2009 and financed an Energy Department loan guarantee program and a separate Treasury Department grant program that were promoted as important in creating green jobs.
States like California sweetened the pot by offering their own tax breaks and by approving long-term power-purchase contracts that ... will also require ratepayers to pay billions of dollars more for electricity for as long as two decades. The federal loan guarantee program expired on Sept. 30. The Treasury grant program is scheduled to expire at the end of December, although the energy industry is lobbying Congress to extend it. But other subsidies will remain.
The windfall for the industry over the last three years raises questions of whether the Obama administration and state governments went too far in their support of solar and wind power projects, some of which would have been built anyway, according to the companies involved.
Obama administration officials argue that the incentives, which began on a large scale late in the Bush administration but were expanded by the stimulus legislation, make economic and environmental sense....
The first subsidy [for NRG’s California Valley Solar Ranch project] is for construction. The plant is expected to cost $1.6 billion to build, with key components made by SunPower at factories in California and Asia. In late September, the Energy Department agreed to guarantee a $1.2 billion construction loan, with the Treasury Department lending the money at an ... interest rate of about 3.5 percent, compared with the 7 percent that executives said they would otherwise have had to pay.
That support alone is worth about $205 million to NRG over the life of the loan, according to an analysis performed for The New York Times by Booz & Company....
When construction is complete, NRG is eligible to receive a $430 million check from the Treasury Department — part of a change made in 2009 that allows clean-energy projects to receive 30 percent of their cost as a cash grant upfront instead of taking other tax breaks gradually over several years.
... Under a [California] law ... NRG will not have to pay property taxes to San Luis Obispo County on its solar panels, saving it an estimated $14 million a year.
... [Due to] mandates that California utilities buy 33 percent of their power from clean-energy sources by 2020, the project’s developers struck lucrative contracts with the local utility, Pacific Gas & Electric, to buy the plant’s power for 25 years.... Ultimately its electric customers, will pay NRG $150 to $180 a megawatt-hour, according to a person familiar with the project, who asked not to be identified because the price information was confidential. At the time the contract was awarded, that was about 50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant, state officials said. While neither state regulators nor the companies will divulge all the details, the extra cost to ratepayers amounts to a $462 million subsidy, according to Booz, which calculated the present value of the higher rates over the life of the contracts.
Additional depreciation tax breaks for renewable energy plants could save the company an additional $110 million, according to Christopher Dann, the Booz analyst who examined the project.
The total value of all those subsidies in today’s dollars is about $1.4 billion, leading to an expected rate of return of 25 percent for the project’s equity investors, according to Booz.
Mr. Crane of NRG disputed the Booz estimate, saying that the company’s return on equity was “in the midteens.”
NRG, which initially is investing about $400 million of its own money in the project, expects to get all of its equity back in two to five years, according to a statement it made in August to Wall Street analysts.
By 2015, NRG expects earnings of at least $300 million a year before interest, taxes, depreciation and amortization from all of its solar projects combined, making these investments some of the more lucrative pieces in its sprawling portfolio, which includes dozens of power plants fueled by coal, natural gas and oil.
...
At least 10 of the 16 solar or wind electricity generation projects that secured Energy Department loan guarantees intend to also take the Treasury Department grant, and all but two of the projects have long-term agreements to sell almost all of their power....
...Legislation that has been passed in about 30 states ... pushes local utility companies to buy a significant share of their power from renewable sources, like solar or wind power. These mandates often have resulted in contracts with above-market rates for the project developers, and a guarantee of a steady revenue stream.
“It is like building a hotel, where you know in advance you are going to have 100 percent room occupancy for 25 years,” said Kevin Smith, chief executive of SolarReserve. His Nevada solar project has secured a 25-year power-purchase agreement with the state’s largest utility and a $737 million Energy Department loan guarantee and is on track to receive a $200 million Treasury grant.
Because the purchase mandates can drive up electricity rates significantly, some states, including New Jersey and Colorado, are considering softening the requirements on utilities.
Brookfield Asset Management, ... will receive so many subsidies for a New Hampshire wind farm that they are worth 46 percent to 80 percent of the $229 million price of the project, when measured in today’s dollars, according to analyses for The Times performed by Booz and two other two industry financial experts....
...The chief executive of Brookfield Renewable Power, the division that oversees the Granite Reliable project in New Hampshire, declined to discuss his profit expectations in detail, but said the project might not have happened without government assistance.
...
Google has invested in several renewable energy projects ... in part to get federal tax breaks that it can use to offset its profits from Web advertising.
... In the 2010 fiscal year, the oil and gas producers got federal tax breaks of $2.7 billion, according to an analysis by the Energy Information Administration.
...
In an October 2010 memo prepared for the president, Lawrence H. Summers, then his top economic adviser; Carol M. Browner, then his adviser on energy matters; and Ronald A. Klain, then the vice president’s chief of staff, expressed discomfort with the “double dipping” that was starting to take place. They said investors had little “skin in the game.”
...
Energy Department officials said they had carefully evaluated every project to try to calculate how much money the developers and investors stood to make. “They were rejected, if they looked too rich or too risky,” Mr. LaVera, the Energy Department spokesman said.
In at least one instance — NRG’s Agua Caliente solar project in Yuma County, Ariz. — the Energy Department demanded that the company agree not to apply for a Treasury grant it was legally entitled to receive. The government was concerned the extra subsidy would result in excessive profit, NRG executives confirmed.
In other cases, the agency required that companies use most of the Treasury grants that they would get when construction was complete to pay down part of the government-guaranteed construction loans instead of cashing out the equity investors.
G.E. ... lobbied Congress in 2009 to help expand the subsidy programs, and it now profits from every aspect of the boom in renewable-power plant construction. It is also an investor in one solar and one wind project that have secured about $2 billion in federal loan guarantees and expects to collect nearly $1 billion in Treasury grants. The company has also won hundreds of millions of dollars in contracts to sell its turbines to wind plants built with public subsidies.
...
Satya Kumar, an analyst at Credit Suisse ... said ... “But the industry could have done a lot more solar for a lot less price, in terms of subsidy,” he said.
by Eric Lipton and Clifford Krauss
FOR FULL STORY GO TO:
http://www.nytimes.com/2011/11/12/business/energy-environment/a-cornucopia-of-help-for-renewable-energy.html
The New York Times www.NYTimes.com
November 11, 2011
Tuesday, November 22, 2011
Monday, November 14, 2011
Energy Department Launches Vehicle Cost Calculator
http://apps1.eere.energy.gov/news/progress_alerts.cfm/pa_id=634
On October 26, 2011 the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) launched a new Vehicle Cost Calculator and accompanying widget. These online tools are now available on DOE's Alternative Fuels and Advanced Vehicles Data Center (AFDC), currently celebrating its 20th anniversary. The AFDC helps consumers, fleet managers, and local governments find and compare energy-saving vehicles that can reduce their petroleum consumption. By providing a variety of tools, databases, and informational resources on vehicles powered by alternatives to gasoline and diesel, the AFDC helps users buy the efficient vehicles that are right for them.
The latest addition to the Alternative Fuels and Advanced Vehicles Data Center (AFDC) is the Vehicle Cost Calculator, an easy-to-use tool that allows users to compare emissions and lifetime operating costs of specific vehicle models, including conventional cars and trucks, as well as vehicles running on alternative fuels such as electricity, ethanol, natural gas, or biodiesel. With the new calculator, which was developed by DOE's National Renewable Energy Laboratory (NREL), car shoppers, small business owners, and fleet managers can make side-by-side comparisons between thousands of conventional, electric drive, and alternative fuel vehicles from model year 1996 and newer.
The calculator also lets users enter information such as driving habits, local ZIP code, price of fuel, and potential tax credits to personalize their results. The tool then presents a comparison of the selected models, displaying the total lifetime ownership costs of the vehicles and the breakdown of the lifetime operating costs between fuel and maintenance costs. It also calculates the operational cost per mile and greenhouse gas emissions over time for the vehicles. By helping potential buyers evaluate the long-term costs and benefits of various fuels and vehicle options now on the market, they can choose the vehicles and technologies that best suit their needs.
The calculator's widget version gives other organizations outside DOE an easy way to add a simplified alternative fuel and emissions calculator to their own website, and it links to the full calculator for users interested in a more detailed analysis.
In addition to the cost calculator, the AFDC features more than 20 other online tools. The Alternative Fueling Station Locator and its mobile version allow users to search for fuel stations and charge points in a specific region or along a set route. Light and heavy-duty vehicle searches provide information about currently available alternative fuel and advanced technology vehicles, from sedans to school buses. The laws and incentives search provides information on state and federal laws, including tax credits, and allows users to sort by technology, location, type of user, or type of policy.
EERE invests in clean energy technologies that strengthen the economy, protect the environment, and reduce dependence on foreign oil. Visit EERE's Clean Cities website for more information about the initiative's deployment work that is reducing petroleum consumption in the transportation sector.
U.S. Department of Energy Office of Energy Efficiency and Renewable Energy (EERE) http://www.eere.energy.gov
Press Release dated October 26, 2011
On October 26, 2011 the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) launched a new Vehicle Cost Calculator and accompanying widget. These online tools are now available on DOE's Alternative Fuels and Advanced Vehicles Data Center (AFDC), currently celebrating its 20th anniversary. The AFDC helps consumers, fleet managers, and local governments find and compare energy-saving vehicles that can reduce their petroleum consumption. By providing a variety of tools, databases, and informational resources on vehicles powered by alternatives to gasoline and diesel, the AFDC helps users buy the efficient vehicles that are right for them.
The latest addition to the Alternative Fuels and Advanced Vehicles Data Center (AFDC) is the Vehicle Cost Calculator, an easy-to-use tool that allows users to compare emissions and lifetime operating costs of specific vehicle models, including conventional cars and trucks, as well as vehicles running on alternative fuels such as electricity, ethanol, natural gas, or biodiesel. With the new calculator, which was developed by DOE's National Renewable Energy Laboratory (NREL), car shoppers, small business owners, and fleet managers can make side-by-side comparisons between thousands of conventional, electric drive, and alternative fuel vehicles from model year 1996 and newer.
The calculator also lets users enter information such as driving habits, local ZIP code, price of fuel, and potential tax credits to personalize their results. The tool then presents a comparison of the selected models, displaying the total lifetime ownership costs of the vehicles and the breakdown of the lifetime operating costs between fuel and maintenance costs. It also calculates the operational cost per mile and greenhouse gas emissions over time for the vehicles. By helping potential buyers evaluate the long-term costs and benefits of various fuels and vehicle options now on the market, they can choose the vehicles and technologies that best suit their needs.
The calculator's widget version gives other organizations outside DOE an easy way to add a simplified alternative fuel and emissions calculator to their own website, and it links to the full calculator for users interested in a more detailed analysis.
In addition to the cost calculator, the AFDC features more than 20 other online tools. The Alternative Fueling Station Locator and its mobile version allow users to search for fuel stations and charge points in a specific region or along a set route. Light and heavy-duty vehicle searches provide information about currently available alternative fuel and advanced technology vehicles, from sedans to school buses. The laws and incentives search provides information on state and federal laws, including tax credits, and allows users to sort by technology, location, type of user, or type of policy.
EERE invests in clean energy technologies that strengthen the economy, protect the environment, and reduce dependence on foreign oil. Visit EERE's Clean Cities website for more information about the initiative's deployment work that is reducing petroleum consumption in the transportation sector.
U.S. Department of Energy Office of Energy Efficiency and Renewable Energy (EERE) http://www.eere.energy.gov
Press Release dated October 26, 2011
Saturday, November 12, 2011
LEED's Reach Grows Despite Grim Economy, But Slower Than Hoped
http://www.greenbiz.com/news/2011/11/08/leeds-reach-grows-despite-grim-economy-slower-hoped
LEED registration soars overseas and continues to edge upward in the United States, but growth seems to be slowing, prompting a concern that progress in green building must accelerate mightily to counter the threats posed by climate change, according to the latest Green Building Market and Impact Report.
GreenBiz.com released the report November 8, 2011 by green building expert Rob Watson, a senior contributor to GreenBiz and the founding chairman of the LEED Steering Committee.
The data-rich study by Watson, his fourth annual report in a series that began in 2008, charts the progress of registration and certification under the market-leading green building rating and assessment system, the Leadership in Energy and Environmental Design standards of the U.S. Green Building Council.
Here are some of the key findings in Watson's new report:
Now, what it comes down to, he continued, is "if you're not making more money with your green building, you need a new marketing department. Similarly, if you're not getting your green building coming in at zero-cost -- or very low single-digit extra costs -- then you probably need a new design team as well."
Designing green buildings and retrofitting existing structures can go along toward combatting climate change.
...
The report tracks LEED buildings' current and future impacts along a wide range of metrics, from CO2 to the amount of construction waste diverted, to reductions in miles traveled for commuters, and many more.
Although the impacts of LEED standards on water use increased over last year's impacts, growth was not as high as hoped, although the savings are significant....
Publication of the Green Building Market and Impact Report coincided with the release of results from a survey on the public's perception of sustainable facilities. The Harris survey sponsored by Sealed Air's Diversey business found that:
...
For the greater Philadelphia market, Jones Lang LaSalle’s regional office has put together a ... market indicator snapshot called “Green Gauge” that does compare submarkets and building types. The 2011 3Q Green Gauge found that green buildings — defined here as either LEED or Energy Star certified — overall have nearly a $4 rent premium per square foot, a 3-plus percent lower vacancy rate and are being absorbed much faster into the market....
...
Several new and important statistical studies look at the impact of green labels on market value that also control for all of the key factors that go into a real estate valuation — for example, building age, size, location, class, etc. — all of which corroborate to varying degrees the premium associated with third-party green certification...
...
The authors estimate that estimate that the cumulative market value of environmental materials going in to LEED projects to date exceeds 23 billion dollars, which could grow to over 150 billion dollars by 2030.
...
The number of workers in LEED buildings is expected to exceed 21 million by 2030, resulting in approximately an economic value of $90 billion from increased productivity.
...
By Matthew Wheeland
LEED registration soars overseas and continues to edge upward in the United States, but growth seems to be slowing, prompting a concern that progress in green building must accelerate mightily to counter the threats posed by climate change, according to the latest Green Building Market and Impact Report.
GreenBiz.com released the report November 8, 2011 by green building expert Rob Watson, a senior contributor to GreenBiz and the founding chairman of the LEED Steering Committee.
The data-rich study by Watson, his fourth annual report in a series that began in 2008, charts the progress of registration and certification under the market-leading green building rating and assessment system, the Leadership in Energy and Environmental Design standards of the U.S. Green Building Council.
Here are some of the key findings in Watson's new report:
- LEED certification to reach 2 billion square feet soon. It took about 10 years for LEED to hit the 1-billion mark, but certification is expected to reach 2 billion square feet in 2012.
- Overall growth seen, but not as much or as fast previous years. Registration domestically and abroad grew 45 percent, "though not quite up to the levels of the three-year "bubble" of LEED registrations between 2007 and 2009," Watson found.
- Market penetration is climbing, with impressive international growth. LEED registrations rose by 53 percent overseas and 39 percent in the United States in the past year.
- Certifications continue to be another story. Certifications, the number of projects that complete the ratings process, are hovering around the 35 percent level and grew by just under 3 percent in the past year. "Although LEED certification grew by 2.6 percent overall compared with last year's record -- indeed, more than a third of all LEED floor area ever certified in the history of the system was certified in 2011 -- we were expecting more," Watson said in his report.
Now, what it comes down to, he continued, is "if you're not making more money with your green building, you need a new marketing department. Similarly, if you're not getting your green building coming in at zero-cost -- or very low single-digit extra costs -- then you probably need a new design team as well."
Designing green buildings and retrofitting existing structures can go along toward combatting climate change.
...
The report tracks LEED buildings' current and future impacts along a wide range of metrics, from CO2 to the amount of construction waste diverted, to reductions in miles traveled for commuters, and many more.
Although the impacts of LEED standards on water use increased over last year's impacts, growth was not as high as hoped, although the savings are significant....
Publication of the Green Building Market and Impact Report coincided with the release of results from a survey on the public's perception of sustainable facilities. The Harris survey sponsored by Sealed Air's Diversey business found that:
- 69 percent of U.S. adults would prefer to work in a facility that's certified by a third-party environmental organization.
- 64 percent would prefer to patronize a business in a facility that holds such certification.
- 49 percent said they feel better about doing business with such a company.
- 48 percent said third-party environmental certification of a faclity improves their image of a company.
...
For the greater Philadelphia market, Jones Lang LaSalle’s regional office has put together a ... market indicator snapshot called “Green Gauge” that does compare submarkets and building types. The 2011 3Q Green Gauge found that green buildings — defined here as either LEED or Energy Star certified — overall have nearly a $4 rent premium per square foot, a 3-plus percent lower vacancy rate and are being absorbed much faster into the market....
...
Several new and important statistical studies look at the impact of green labels on market value that also control for all of the key factors that go into a real estate valuation — for example, building age, size, location, class, etc. — all of which corroborate to varying degrees the premium associated with third-party green certification...
...
The authors estimate that estimate that the cumulative market value of environmental materials going in to LEED projects to date exceeds 23 billion dollars, which could grow to over 150 billion dollars by 2030.
...
The number of workers in LEED buildings is expected to exceed 21 million by 2030, resulting in approximately an economic value of $90 billion from increased productivity.
...
By Matthew Wheeland
Green Biz www.GreenBiz.com published November 08, 2011
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