Archive for June 2011

Say Goodbye To Big PV Incentives In Oregon…and more

Oregon’s New Legislation Slashes Renewable Energy Incentive Funding
on 28 Jun 2011 by Laura DiMugno email the content item print the content item
The Oregon State Senate has voted overwhelmingly to approve House Bill 3672, which contains cuts that could be devastating to large-scale renewable energy development – as well as manufacturing – in the state. The 26-1 Senate vote follows the bill’s 57-2 passage by the state’s House of Representatives. The legislation [read more]

Energy Matters Video News – Episode 35 – June 29, 2011

by Energy Matters

Energy Matters Video News
Presented by Energy Matters team member Virginia, we take a look at some of the stories from Australia and around the world recently added to our renewable energy news section.

In this episode, Virginia covers changes to South Australia’s feed in tariff, solar heading for grid parity in 100 countries by 2020, solar power poised to trump fossil fuel on cost and and rooftop solar now as economical as large scale PV.

VIDEO    http://youtu.be/rfLiIIkb_Ks

Home: Renewable Energy News: Energy Matters Video News – Episode 35 – June 29, 2011

 

Renewable Energy News

WEDNESDAY 29 JUNE, 2011 | RSS Feed

Energy Matters Video News – Episode 35 – June 29, 2011

 

by Energy Matters

Energy Matters Video News
Presented by Energy Matters team member Virginia, we take a look at some of the stories from Australia and around the world recently added to our renewable energy news section.

In this episode, Virginia covers changes to South Australia’s feed in tariff, solar heading for grid parity in 100 countries by 2020, solar power poised to trump fossil fuel on cost and and rooftop solar now as economical as large scale PV.

 
In this episode:

From October, new connections to South Australia’s feed in tariff scheme will only receive 22 cents per kilowatt hour rather than the current 44 cents. The lower feed in tariff is seen as more sustainable and was agreed upon to avoid creating another boom or bust scenario all too commonly seen in Australia’s solar sector recently. Read more.

– The results of a recent survey show that by 2020, over 100 countries will have access to solar power at prices comparable to traditional energy sources. The results of the survey by solar panel manufacturer Applied Materials show that the manufacturing cost of solar panels has dropped by 70 per cent since 2008. Read more.

– The world’s largest technical association, the Institute of Electrical and Electronic Engineers, says solar PV is set to become the most economical form of power generation. Read more.

– Mr Rich praised the government on its recent support of large scale PV and believes that major projects will become economical without subsidies in the next few years. Mr Rich also believes that the rooftop solar industry can create as many if not more jobs than large scale solar, without the environmental issues such as the amount of land required for solar farms. Read more.

Feed-in Tariff funding for photovoltaic installations should be protected

When FiTs were announced in 2010 a fund of £900m was made available. A 10 per cent reduction in the funding for 2014-15 has already been announced as part of last year’s wide-ranging spending review.

Further cuts were recently announced to the Feed-in Tariffs (FiTs) subsidies for large-scale photovoltaic installations. The cuts are designed to make sure that funding isn’t consumed by these large-scale projects, leaving nothing in the bank for householders or small community projects.

Plumb Center is urging the government to protect Feed-in Tariffs, which give homeowners cash incentives to choose renewable solutions to their energy needs.

The government says initial tariff rates were only intended to last until April 2012. Now it has been confirmed that the rates will come down after that date.

Head of Sustainability at Plumb Center, Tim Pollard, said: “While any changes to the FiT scheme which compromise the commercial feasibility of the product are regrettable, it is encouraging that the domestic programme will remain unaffected under the scope of the fast track review.

“However, it is absolutely crucial for the long term success of the industry that we have a period of extended stability to allow for sensible investment decisions to be made. Any compromises in the short term are likely to have very serious implications for an emerging market which has potential to make enormous contributions to lower impact living and working.”

He added: “Plumb Center is working actively with key supply partners and customers providing quality products which will deliver economic and practical outcomes.”

EPA Releases Draft 2012 Renewable Fuel Standards

Legal News Alert from the Stoel Rives Renewable Energy Law Group

The U.S. Environmental Protection Agency (“EPA”) has released a series of proposed rules relating to the Renewable Fuel Standard (“RFS”). Originally enacted by Congress in the Energy Policy Act of 2005 and expanded by the Energy Independence Act of 2007, the RFS represents the country’s most comprehensive and effective policy in the energy security and greenhouse gas (“GHG”) sectors. The current RFS, often referred to as RFS2, contains four categories of fuel made from renewable biomass. EPA has the authority to set the mandate levels for these renewable fuels. U.S. petroleum refiners and importers are obligated parties under the program and must prove compliance by purchasing a sufficient quantity of these fuels. The EPA proposed an overall standard for 2012 for renewable fuel of 9.21% or 15.2 billion gallons of fuel and also proposed significant regulatory changes to the program.

Click here to continue reading this alert.

If you have any questions about the content of this alert, please contact:

 

Graham Noyes


(206) 386-7615
jgnoyes@stoel.com

Japan Goes Solar A $286 Billion Play on Japan’s Nuclear Fallout

By Jeff Siegel
Monday, June 27th, 2011

It was in 2006, while on a train from Frankfurt to Hanover, that I got my first look at something spectacular.

Although the train was traveling at around 150 mph, it wasn’t hard to catch a glimpse of the rows upon rows of rooftop-mounted solar panels that were sucking in the sun’s rays and spitting out electrons…

Certainly solar panels were not new to me. But to see this many — in an environment that boasted a solar resource about as strong as what you might find in Portland or Seattle — well, that was definitely not something I expected.

Of course, in 2006, Germany was well into its sixth year of its solar feed-in tariff, a mechanism designed to rapidly integrate solar into the country’s energy mix. And boy, did it work…

From 2000 to 2010, Germany’s installed solar photovoltaic capacity experienced a staggering CAGR of 66 percent.

The robust demand for solar was so significant, many believe Germany’s aggressive solar agenda is responsible for the global solar bull market we experienced from 2004 to 2008.

There’s no doubt nearly every solar manufacturer today exists in its current form as a result of Germany’s aggressive solar initiatives.

Of course these days, Germany is in the process of strategically cutting its feed-in tariff. After all, this thing was never intended to run forever. And as a result, solar growth in Germany will slow a bit — although the most recent data indicates it won’t be nearly as bad as some would have you believe.

In any event, there’s no argument that Germany’s solar feed-in tariff allowed for incredible growth… and course dozens of opportunities for investors.

Now, if you weren’t playing solar back when the profits were pouring in, don’t worry; you may have another chance.

And this time around, the windfall could be even greater.

A $286 Billion Dollar Solar Pay Day

The anti-nuclear movement got a real boost following the Fukushima crisis. There’s no doubt about that. And as a result, renewable energy was once again paraded around as one of the many forms of clean energy that could be used to displace any nuclear power that would be phased out in Japan…

Especially solar.

A few months ago, Prime Minister Naoto Kan announced a plan that would put solar panels on about 10 million roofs by 2030. Of course, he gave little details on how such a plan would be funded. But since the announcement, a number of high-level government officials have called for a solar feed-in tariff similar to that of Germany’s.

University of Tokyo professor Ryoichi Komiyama recently offered his analysis of the effects of such a tariff, and noted that in a scenario where the country would seek 30 gigawatts of solar, a $261 billion market for solar panel production and installation would be created.

In the case of utility-scale solar, Komiyama added that developers would potentially have to spend an additional $25 billion for about 8 gigawatts of batteries.

As you know, we’ve long been bullish on utility-scale batteries, particularly in the case of solar. I would even argue that if Japan were to go full force on a solar feed-in tariff, it would be the utility-scale battery players providing the biggest pay day for investors.

You see, of the top five solar panel producers in Japan, only one is a pure play. And that’s Suntech Power (NYSE: STP), which is actually the world’s largest solar panel producer. If Japan were to implement this feed-in tariff, Suntech would get a huge boost.

Also benefiting from the tariff will be Sharp (PINK SHEETS: SHCAY), Kyocera (NYSE: KYO), Panasonic Corp (NYSE: PC), and Mitsubishi Electric Corp (PINK SHEETS: MIELY).

Solar deals put empty roof space to work

HELLEY WHITE

Globe and Mail Update
Published Tuesday, Jun. 28, 2011 5:00AM EDT

IKEA Canada is putting its rooftops to work.

By installing 3,790 solar panels on three of its Ontario stores, IKEA will generate about 960,000 kilowatt hours of “clean” energy per year, enough to power about 100 homes.

But IKEA’s project won’t just earn it kudos for being a good corporate citizen – the furniture retailer is also earning a new revenue stream. The company will be paid for its solar energy by the Ontario Power Authority through the province’s new feed-in tariff program.

More related to this story

The FIT program was established in 2009 to boost the province’s green energy industry. It works like this: Power producers get premium rates for generating “clean” energy, provided they use Ontario-made equipment and labour. For example, the tariff pays 44 to 80 cents per kilowatt hour for electricity from solar installations, a rate far better than the wholesale price for electricity, which is about four cents per kilowatt hour. Once a contract is approved, it’s guaranteed for 20 years.

Since the FIT program came into being, dozens of solar development companies like AMP Solar Group have sprung up to take advantage of the favourable rates. “Ontario’s feed-in tariff is probably the most aggressive in the world, and has truly created the hottest renewable energy market in the world,” said Dave Rogers, chief executive officer of Port Credit, Ont.-based AMP.

These programs can make things too hot, however. Spain has dramatically scaled back its FIT program because of the costs involved, and if Ontario’s Progressive Conservatives secure power in the fall, leader Tim Hudak promises to cancel the program.

Under Ontario’s program, contracts can be handled in two ways. If the building owner provides the capital for the purchase and installation of solar panels, they also own the revenue stream from the OPA. (This was the case with the IKEA project, which cost the retailer $4.6-million to implement.)

Alternatively, a building owner can lease roof space to a solar development company, which will raise the financing to purchase and install the panels. In this case, the development company gets the FIT revenue and the building owner gets rent payments. It’s a model favoured by Windsor, Ont. company Solar Power Network.

“(Building owners) don’t have to worry about how much power we’re generating, or what kind of panels we’re using, or what our deal is with the Ontario Power Authority,” said Peter Goodman, CEO of Solar Power Network. “They’re literally getting paid to be green, because I’m renting their rooftop.” Mr. Goodman estimates a typical commercial or industrial building would receive about $25,000 in rent per year for the use of a roof.

While steady rental income can be an appealing incentive, sometimes it’s the roofs themselves that benefit from the deal. For example, AMP, in partnership with Potentia Solar, recently won a contract to put solar panels on 450 Toronto District School Board roofs.

As part of the deal, AMP is giving the board all of its rent money upfront so the TDSB can pay for new roofs before the panels go on.

Because the FIT program is still very new, it remains to be seen whether it will be embraced by every Ontario company with a roof. Mr. Goodman said that selling the idea of a 20-year lease to building owners has been tougher than developers expected.

“Many owners are reluctant to make a 20-year lease commitment,” he said. “They want to always have access to do maintenance, and they worry about impairing future building sale potential.”

Many mid-sized and private building owner groups have embraced the program, but larger groups have been slower to make a decision, Mr. Rogers said. “But the expectation is that they intend to make up a big piece of the second wave of the program,” he said.

Feed-in tariff for power producers ‘only a guideline’

The renewable energy feed-in tariff announced recently by Nersa as binding on all independent power producers could not be binding at all, but could be used only as a guideline

LINDA ENSOR and SISEKO NJOBENI
Published: 2011/06/27 06:52:19 AM

CAPE TOWN — The renewable energy feed-in tariff (REFIT) announced recently by the National Energy Regulator of SA (Nersa) as binding on all independent power producers could not be binding at all, but could be used only as a guideline, according to a legal opinion obtained earlier this month by the South African Wind Energy Association and supported by the Treasury

The Department of Energy has also adopted the opinion as a basis for its renewable energy plans to avoid the risk of a future legal challenge, even though parts of the industry do not favour competitive bidding as it could result in developers undercutting each other.

The “embarrassing” revelation, as one observer described it, that legally Nersa’s decision-making could not be rigidly bound by a set tariff, emerged during a presentation by the department’s Ompie Aphane to Parliament’s energy committee on Friday.

The REFIT programme was conceptualised so Nersa would make an upfront determination of the tariffs at which the successful tenderer would sell electricity to Eskom.

The independent power producers would then tender for the electricity supply contract at the set price and the successful bidder would apply to Nersa for a licence to generate electricity and sell it to Eskom. The wind energy association sought the legal opinion because of its concern that the department was veering away from a predetermined tariff policy.

But in the opinion dated June 13, advocates Wim Trengove and Nadine Fourie advised that the Electricity Regulation Act stipulated that Nersa only had discretionary power to decide on licence applications and not the power to make upfront tariff determinations

“It is not permitted by law to fetter itself in the exercise of this discretion by a prior determination of the tariff it will impose,” the opinion stated. That is, Nersa cannot determine an electricity tariff of an independent power producer in the abstract unrelated to a particular generation licence.

Mr Trengove said it was perfectly permissible for Nersa to publish a tariff policy as long as this was not binding and rigidly adhered to.

Mr Aphane said price would be considered only after applicants met all the eligibility criteria.

“We do not believe investors will walk away simply because there will be price competition. Big investors are saying they are willing to compete on the basis of price,” he said.

But the wind energy association’s CEO, Johan van den Berg, said that competitive bidding on price could adversely affect investor confidence and destroy SA’s nascent renewable energy industry. Wind energy developers had invested more than R400m in preparing for the REFIT programme.

The R400m was spent on feasibility studies, wind measurements, environmental impact assessments, other regulatory compliance and general overheads associated with doing business.

“Internationally, feed-in tariffs have proven to be an effective means to establish a nascent energy industry,” Mr van den Berg said.

“Conversely, global experience has shown that if the industry is price competitive early on, it fails to take off. In a competitive tender process, inexperienced and overly optimistic developers tend to bid at a price that may secure a tender but is insufficient to raise the finance required to construct projects.

“The REFIT (programme) is a mechanism designed to do the opposite, to provide price security that facilitates the bankability of the project,” he said.

 

 

Germany will not be cutting the feed-in tariff for solar projects

Author: Stefan Schmitz, Partner, London and Munich

Publication Date: June 17, 2011

This decision was announced by a junior minister in an interview with the Financial Times Germany. Originally, it was thought that Germany would cut the generous tariff in July, and expectations ranged from 3% to as much as 24%.

The decision is the result of the slowed down growth of the German PV market. Had the market grown as expected, the government would have cut the tariffs to cool the market down.
However, the latest figures show that up to May this year only 700MWp have been installed. On an annual basis this would be 2,800MWp, and thus a lot less than the 3,500MWp which would
have triggered a cut.

 

Now, the current tariff will stay in place until the end of the year. The tariff, depending on the

type of project varies between 21.11 and 28.74 cent/kWh. At the end of this year, the next step of the planned reduction, already prescribed by law, will come into effect. This should be 9% but if, following the decision not to cut the tariff now, the market grows significantly and exceeds the mark of 3,500 MWp, the cut may also be higher.

 

Reed Smith’s German Renewable Energy Practice

 

Reed Smith is a recognised leader in renewable energy project finance, development and

operation. Our experience in Munich spans solar, wind, hydroelectric, geothermal, biofuels, and waste-to-energy projects.

Our Energy Group actively represents project lenders, project developers, equity investors and engineering, procurement, construction (EPC) contractors and solar panel and turbine suppliers. We currently represent utilities and independent power producers with operating projects or
other commercial activities across Europe, the United States and Asia.

Reed Smith’s energy lawyers in Germany have the full range of experience and skills needed for
coordinated and timely completion of nearly any type of energy facility or investment, regardless  of location. Our environmental, real estate, commercial, corporate, construction, securities, antitrust, finance, tax and regulatory lawyers are fully conversant on all issues that arise in energy transactions

Nuclear Power, Japan, Feed-in Tariffs, and the Rapid Development of Renewables

By Paul Gipe

“We Can Do It” Says German Environment Agency on Nuclear Phase Out

June 7, 2011; Vers. 02

By Paul Gipe

The Conservative German government has issued a 14-page document outlining how Germany can close all its reactors by 2017 and keep the lights on.

The report, Hintergrundpapier zur Umstrukturierung der Stromversorgung in Deutschland was released by the Umweltbundesamt, or the German Environment Agency (UBA), May 30, 2011.

The study found that Germany could close its reactors by 2017, much sooner than the government’s official proposal of 2022. The report, and the timing of its release, indicates the intense political debate within and without the ruling coalition of Angela Merkel’s Christian Democrats and her junior partner the neoliberal Free Democrats.

As noted by Craig Morris for Renewables International, the report was issued by an agency within the German Ministry of the Environment, but it was not “commissioned” by the Ministry itself. This subtlety would be lost on all but the most avid political junkies.

The Ministry, the Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit or BMU, is led by the up and coming conservative party member Dr. Norbert Röttgen, who distanced himself from the report but did not prevent its publication. The report will surely be used by the opposition parties in arguing that the “austieg” or exit from nuclear can be quicker than the Merkel government is proposing.

Ironically, the conservative Merkel government has proposed essentially the exit policy implemented by the previous red-green government of Social Democrats and the Greens. Merkel’s conservative party rose to power in part on a platform of extending the operation of the existing reactors. Her policy on extending the reactors operating lives was tabled shortly before the Fukushima accident. The policy reversal is historic not only in Germany, but worldwide.

Critics of the reversal have charged that

  • Germany will suffer power outages,
  • Germany will import nuclear power from other countries, notably France, and
  • Germany will build massive new coal plants to make up the shortfall.

The analysis by the German environment agency was undertaken to specifically examine these questions. They concluded that Germany can close the reactors within five years and do so

  • without power outages,
  • without importing nuclear power from other countries,
  • without building new coal plants, and
  • with only a modest increase in the cost of electricity.

The agency says that Germany can close the nuclear plants by faster development of its renewable sources of energy and the construction of 5,000 MW of new gas-fired generation. The new gas-fired generation will give the grid the needed flexibility in meeting demand while also preserving Germany’s commitment to reducing its carbon dioxide emissions.

To the surprise of many critics of Germany’s renewable energy program, the country is not a net importer of electricity. In recent years, Germany has been a net exporter of generation.

UBA’s study found that electricity imports to Germany are based on price and not on any shortage of supply and that this will continue as the reactors are taken off line. That is, Germany buys electricity on the liberalized market when it is cheaper than generating the electricity from its own fossil-fired power plants.

The German Environment Agency estimates that a rapid exit from nuclear will cost ratepayers only €0.006 to €0.008 per kilowatt-hour ($0.009/kWh to $0.01/kWh). This increase, says UBA, is less than the price swings of natural gas and coal during the past year.

Interestingly, the higher market price for electricity will reduce the cost of Germany’s renewable energy program by decreasing the differential between the market price of electricity and the average cost of feed-in tariffs for renewable energy.

See also the Heinrich Böll Foundation’s No Nukes, No Problem? by Arne Jungjohann and Wilson Rickerson.