Pros And Cons Of Solar Energy - Investopedia

With the growing threat of climate change due to the excessive release of carbon emissions, many nations are looking to clean energy alternatives to replace traditional fossil fuels. Of all the clean energy alternatives, solar has arguably been the most expensive. However, after considering the pros and cons along with the 80% drop in solar panel prices over the last five years, the future of solar energy is looking rather bright.

The Pros

Sustainable

The advantage of solar energy is that it is a sustainable alternative to fossil fuels. While fossil fuels have an expiration date that may be fast approaching, the sun is likely to be around for at least a few billion years. Additionally, 73,000 terawatts of solar energy shine down on the Earth’s surface every day, which is 10,000 times the daily global energy use. That’s an enormous supply just waiting for the technology that can harness it.

Low Environmental Impact

Solar energy has a substantially reduced impact on the environment compared to fossil fuels. Its greenhouse gas emissions are inconsequential as the technology does not require any fuel combustion. Also, although concentrating solar thermal plants (CSP) are comparatively inefficient in their water usage depending on the type of technology being used, the right technology significantly increases efficiency while photovoltaic (PV) solar cells do not require any water when generating electricity.

The one environmental downside to solar technology is that it contains many of the same hazardous materials as electronics. As solar becomes a more popular energy, the problem of disposing the hazardous waste becomes an additional challenge. However, assuming the challenge of proper disposal is met, the reduced greenhouse gas emissions that solar energy offers makes it an attractive alternative to fossil fuels.

Energy Independence

Since the sun shines across the globe, it makes every country a potential energy producer, thus allowing for greater energy independence and security. Solar energy doesn’t only promise to bring security and independence at the national level; solar panels can be installed on individual homes, providing power that does not depend on being connected to a larger electrical grid.

The Cons

Intermittency

One of the biggest problems that solar energy technology poses is that energy is only generated while the sun is shining. That means nighttime and overcast days can interrupt the supply. The shortage created by this interruption would not be a problem if there were low-cost ways of storing energy as extremely sunny periods can actually generate excess capacity. In fact, Germany â€" a leader in solar energy technology â€" is now focusing on developing adequate energy storage to deal with this issue.

Land Use

Another concern is that solar energy may take up a significant amount of land and cause land degradation or habitat loss for wildlife. While solar PV systems can be fixed to already existing structures, larger utility-scale PV systems may require up to 3.5 to 10 acres per megawatt and CSP facilities require anywhere from 4 to 16.5 acres per megawatt. However, the impact can be reduced by placing facilities in low-quality areas or along existing transportation and transmission corridors.

Scarcity of Materials

Certain solar technologies require rare materials in their production. This, however, is primarily a problem for PV technology rather than CSP technology. Also, it is not so much a lack of known reserves as much as it is the inability of current production to meet future demand: many of the rare materials are byproducts of other processes rather than the focus of targeted mining efforts. Recycling PV material and advances in nanotechnology that increase solar cell efficiency could both help boost supply, but perhaps finding material substitutes that exist in greater abundance could play a role.

The Bottom Line

While solar energy technology has some disadvantages that make it somewhat expensive in certain markets, it is becoming an increasingly cost-competitive alternative to fossil fuels. The cons that add to the cost of solar energy could be rendered negligible by further technological advances that increase efficiency and storage capacity. Considering the enormous potential gains of harnessing the sun’s light and heat, it may be worth increasing the incentives for furthering the development of solar energy.

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Will Green Energy Create Investment Opportunities? - Industry Outlook - Nasdaq

Alternative energy -- "green power" solutions as they are called -- is the most discussed topic regarding the widespread desire to combat global warming worldwide.

Despite the multitude of macro challenges like deflationary worries in Europe, slowdown in China and Japan, along with the oil price carnage in the market, the long-term outlook for the alternative energy space has held up pretty well. The latest report from by the U.S. Energy Information Administration ("EIA") shows that renewable energy will be the fastest growing power source through 2040.

Solar and wind are gradually transforming the way we produce and consume energy, driving the ongoing global energy transition. Although some better-established sources of alternative energy -- hydro, wind, biomass and waste, not to mention solar photovoltaics ("PV") -- are supported extensively, niche renewable energy sources such as geothermal and concentrated solar power ("CSP") are also on the rise, natural conditions permitting.

Other upcoming alternative sources include the prospect of harnessing sea power. Numerous new ocean power technologies are on the verge of commercial development. Although this form of renewable energy is one of the most notable, it involves technologies with high research and development as well as startup costs. This has inhibited its all-out adoption so far.

According to the latest "Energy Infrastructure Update" report from the Federal Energy Regulatory Commission's ("FERC") Office of Energy Projects, wind, solar, geothermal, and hydropower combined provided more than 75% of the 1,229 megawatts ("MW") of new U.S. electrical generating capacity placed into service during the first quarter of 2015.

Here we take a look at the alternative energy space and attempt to identify this nascent industry's strengths.

U.S. Administration's green energy drive: "Clean energy" has long been the focus of the current administration. President Obama's "Climate Change Action Plan" and the favorable green energy trends have already done a lot in pushing the sector northward. Now, the budget proposal seeks an approximate a 7.2% rise in funding for a clean energy space .

The proposal asks Congress for a permanent extension of tax credits for the solar and wind industry. The fiscal 2016 budget request includes a $7.4 billion fund for clean energy technologies, up 7.2% from the $6.9 billion proposal for fiscal 2015 and above the $6.5 billion enacted by Congress for fiscal 2015.

New tariffs and solar-trade war: Washington imposed new import duties on solar panels and other related products from China and Taiwan. The new duties would further escalate trade tensions between the two countries at a time when the two nations were planning to work together in the common fight against global warming and carbon emissions. The U.S. believes that Chinese manufacturers have hitherto benefited from unfair subsidies offered by their government.

The U.S. Department of Commerce ("DOC") in Dec 2014 set anti-dumping duties at about 52% on most module imports from China and at 19.5% on most imports of Taiwanese cells. It has also slapped 39% anti-subsidy tariffs on most China-made panels.

The continued invasion of low-priced Chinese solar products had pushed many American manufacturers out of business. In retaliation, the Department of Commerce implemented anti-dumping duties in 2012. Tariffs were only applied on Chinese-made cells that were used to make panels. Many Chinese solar manufacturers were able to dodge the hefty levies by assembling panels from cells produced elsewhere, especially in Taiwan. Yet those cells were derived from components -- ingots and wafers -- from China.

Hence the latest move is intended to close a gap in which Chinese companies could use solar cells made in Taiwan to avoid paying higher tariffs.

In the meantime, some U.S. solar stocks like SunPower Corp. ( SPWR ), First Solar Inc. ( FSLR ) and SunEdison Inc. ( SUNE ) are expected to make the most of the conflict.

The sun is everywhere: Solar power is generally located at a customer's site due to the universal availability of sunlight. As a result, solar power limits the expense and losses associated with transmission and distribution from large-scale electric plants to the end users. For most residential consumers seeking an environment-friendly power alternative, solar power is currently the only viable choice.

Among the renewable energy pack, we would advise investors to look for companies like rooftop solar energy systems provider SolarCity Corp. ( SCTY ) with an innovative game plan. The downstream solar company plays on its strength providing renewable power lower than the grid price to residential and commercial markets in the U.S. California-based SolarCity's MyPower loan plan allows its customers to own their solar systems and still pay less for electricity when compared to leasing them through power purchase agreements.

Residential solar in the U.S. has been one of the success stories in the alt-energy space. As per the Solar Energy Industries Association ("SEIA"), residential PV installation grew 51% year over year in 2014.

Japan looks bright: We note that Japan has recently been a happy hunting ground for solar companies in search of new markets. The country is going to be a key energy market as the recent strategy document released by Japan's Photovoltaic Energy Association (JPEA) outlined how Japan solar could reach 100 GW of installed PV generation capacity by 2030. "By 2020, Japan could target 65.7 GW of solar capacity, raising the bar from predictions made in 2013 for 49.4GW by that date," a JPEA statement said. "By reaching 100 GW by 2030, the country would be meeting around 11.2% of its overall power generation demand with PV."

Japan was the world's second largest market for solar PV growth in 2013 and 2014, adding a record 6.9 GW and 9.6 GW of capacity, respectively. In 2014, cumulative capacity reached 23.3 GW, ahead of Italy (18.5 GW) making the country the world's third largest power producer from solar PV, behind Germany (38.2 GW) and China (28.2 GW).

Japan's need for electricity is on the rise, particularly after the Fukushima nuclear power plant accident which triggered a complete phase-out of all nuclear reactors in the country. Presently, the Japanese government is looking for alternate resources to meet the growing need for power in this very industrialized nation.

Companies like First Solar are investing substantially to install emission-free renewable set-ups. The country is expected to become the second largest market for solar products after China. First Solar -- the largest U.S. solar company -- has been teaming up with Japanese counterparts to develop, build and operate solar power plants.

India holds promise: While the U.S. and China have been in the forefront in recent years in driving the industry, other nations are also pushing hard to have their home-grown solar generation capacity as a remedial measure to solve the electricity crisis. The latest to join this list is Asia's third largest economy, India.

Prime Minister Narendra Modi had revealed ambitious plans at the Vibrant Gujarat Summit held earlier this year for the solar industry in the country. India is striving to enhance its solar energy capacity to 100 GW by 2022. Moreover, India intends to increase its renewable energy share to at least 15% from the present 6% by 2020. Presently, India's solar power capacity is below 3 GW. This has kindled the interest of the global solar players in the Indian market.

India signed a $1 billion agreement with the Export-Import Bank in 2014 for companies willing to ship equipment from the U.S. First Solar and SunEdison Inc. have ample businesses in India and, together with local firms, will invest $6 billion in the country for the fiscal year ending Mar 31, 2016.

Environmental legislation: Alternative energy companies are increasingly benefiting from new legislation in the U.S. stipulating installation of renewable sources of electricity generation as mandated by Renewable Energy Standards ("RES"). As of now there are 29 states, the District of Columbia and two territories that have RES legislation in place. Another eight states and two territories also have goals for adopting renewable energy standards.

At the federal level, investment tax credit ("ITC") is currently at 30%, which will remain in effect through Dec 31, 2016. Beginning 2017, the solar tax credit becomes 10%. The industry will likely see many companies taking advantage of the 30% ITC, and build more panels, storage capacity and other production items up to the end of 2016. Once the ITC drops to 10%, these companies can also utilize a higher rate of depreciation to protect their profits. So, the cut in ITC will not likely dent these companies' profitability.

The wind sector also benefited significantly from the production tax credit ("PTC") over the last few years. It began as part of the Energy Policy Act of 1992. Subsequent to that it received life extensions of half a dozen times.

In the first decade of a renewable energy facility's lifespan, the PTC provided 2.3 cents/kilowatt-hour ITC benefit for wind turbines and 1.1 cents for some other renewable energy sources. In early 2013, the renewable electricity PTC was extended for one more year. However, it expired by the end of 2014 due to Congressional gridlock.

Need for a pollution-free environment: Globally, utilization of renewable energy is rising primarily due to its clean nature and a growing awareness among the masses regarding its benefits. In Jun 2014, the Obama administration proposed a commonsense plan to curtail carbon emissions from power plants by 30% by 2030 from 2005 levels.

The proposed rule was expected to come into effect this year. This has influenced utility providers like NRG Energy Inc. ( NRG ), Sempra Energy ( SRE ) and Duke Energy Corp. ( DUK ) to gradually shift their mode of power generation to solar, wind and water.

The EIA projects that utility-scale solar capacity will expand by about 84% between year-end 2014 and year-end 2016 in the U.S., in tandem with considerable consumption growth in renewables for electricity and heat generation purpose. California is expected to grab most of the growth with approximately 70% of the new capacity being built in the state.

To Sum Up

It is evident that demand for renewables is strengthening at a rapid clip. Moreover, the gradual widening of the solar markets will bode well for all global players and instill confidence in the industry over the long term.

Check out our latest "Can Alternative Energy Stop Global Warming?" here for more on the current state of affairs in this market from an earnings perspective, and how the trend is looking for this important sector of the economy now.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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Will Green Energy Create Investment Opportunities? - Zacks.com

Alternative energy -- "green power" solutions as they are called -- is the most discussed topic regarding the widespread desire to combat global warming worldwide.

Despite the multitude of macro challenges like deflationary worries in Europe, slowdown in China and Japan, along with the oil price carnage in the market, the long-term outlook for the alternative energy space has held up pretty well. The latest report from by the U.S. Energy Information Administration (“EIA”) shows that renewable energy will be the fastest growing power source through 2040.

Solar and wind are gradually transforming the way we produce and consume energy, driving the ongoing global energy transition. Although some better-established sources of alternative energy -- hydro, wind, biomass and waste, not to mention solar photovoltaics (“PV”) -- are supported extensively, niche renewable energy sources such as geothermal and concentrated solar power (“CSP”) are also on the rise, natural conditions permitting.

Other upcoming alternative sources include the prospect of harnessing sea power. Numerous new ocean power technologies are on the verge of commercial development. Although this form of renewable energy is one of the most notable, it involves technologies with high research and development as well as startup costs. This has inhibited its all-out adoption so far.

According to the latest "Energy Infrastructure Update" report from the Federal Energy Regulatory Commission's (“FERC”) Office of Energy Projects, wind, solar, geothermal, and hydropower combined provided more than 75% of the 1,229 megawatts (“MW”) of new U.S. electrical generating capacity placed into service during the first quarter of 2015.

Here we take a look at the alternative energy space and attempt to identify this nascent industry's strengths.

U.S. Administration’s green energy drive: "Clean energy" has long been the focus of the current administration. President Obama’s "Climate Change Action Plan" and the favorable green energy trends have already done a lot in pushing the sector northward. Now, the budget proposal seeks an approximate a 7.2% rise in funding for a clean energy space.

The proposal asks Congress for a permanent extension of tax credits for the solar and wind industry. The fiscal 2016 budget request includes a $7.4 billion fund for clean energy technologies, up 7.2% from the $6.9 billion proposal for fiscal 2015 and above the $6.5 billion enacted by Congress for fiscal 2015.

New tariffs and solar-trade war: Washington imposed new import duties on solar panels and other related products from China and Taiwan. The new duties would further escalate trade tensions between the two countries at a time when the two nations were planning to work together in the common fight against global warming and carbon emissions. The U.S. believes that Chinese manufacturers have hitherto benefited from unfair subsidies offered by their government.

The U.S. Department of Commerce (“DOC”) in Dec 2014 set anti-dumping duties at about 52% on most module imports from China and at 19.5% on most imports of Taiwanese cells. It has also slapped 39% anti-subsidy tariffs on most China-made panels.

The continued invasion of low-priced Chinese solar products had pushed many American manufacturers out of business. In retaliation, the Department of Commerce implemented anti-dumping duties in 2012. Tariffs were only applied on Chinese-made cells that were used to make panels. Many Chinese solar manufacturers were able to dodge the hefty levies by assembling panels from cells produced elsewhere, especially in Taiwan. Yet those cells were derived from components -- ingots and wafers -- from China.

Hence the latest move is intended to close a gap in which Chinese companies could use solar cells made in Taiwan to avoid paying higher tariffs.

In the meantime, some U.S. solar stocks like SunPower Corp. (SPWR - Analyst Report), First Solar Inc. (FSLR - Analyst Report) and SunEdison Inc. (SUNE - Analyst Report) are expected to make the most of the conflict.

The sun is everywhere: Solar power is generally located at a customer's site due to the universal availability of sunlight. As a result, solar power limits the expense and losses associated with transmission and distribution from large-scale electric plants to the end users. For most residential consumers seeking an environment-friendly power alternative, solar power is currently the only viable choice.

Among the renewable energy pack, we would advise investors to look for companies like rooftop solar energy systems provider SolarCity Corp. (SCTY - Snapshot Report) with an innovative game plan. The downstream solar company plays on its strength providing renewable power lower than the grid price to residential and commercial markets in the U.S. California-based SolarCity’s MyPower loan plan allows its customers to own their solar systems and still pay less for electricity when compared to leasing them through power purchase agreements.

Residential solar in the U.S. has been one of the success stories in the alt-energy space. As per the Solar Energy Industries Association (“SEIA”), residential PV installation grew 51% year over year in 2014.

Japan looks bright: We note that Japan has recently been a happy hunting ground for solar companies in search of new markets. The country is going to be a key energy market as the recent strategy document released by Japan’s Photovoltaic Energy Association (JPEA) outlined how Japan solar could reach 100 GW of installed PV generation capacity by 2030. “By 2020, Japan could target 65.7 GW of solar capacity, raising the bar from predictions made in 2013 for 49.4GW by that date,” a JPEA statement said. “By reaching 100 GW by 2030, the country would be meeting around 11.2% of its overall power generation demand with PV.”

Japan was the world's second largest market for solar PV growth in 2013 and 2014, adding a record 6.9 GW and 9.6 GW of capacity, respectively. In 2014, cumulative capacity reached 23.3 GW, ahead of Italy (18.5 GW) making the country the world's third largest power producer from solar PV, behind Germany (38.2 GW) and China (28.2 GW).

Japan's need for electricity is on the rise, particularly after the Fukushima nuclear power plant accident which triggered a complete phase-out of all nuclear reactors in the country. Presently, the Japanese government is looking for alternate resources to meet the growing need for power in this very industrialized nation.

Companies like First Solar are investing substantially to install emission-free renewable set-ups. The country is expected to become the second largest market for solar products after China. First Solar -- the largest U.S. solar company -- has been teaming up with Japanese counterparts to develop, build and operate solar power plants.

India holds promise: While the U.S. and China have been in the forefront in recent years in driving the industry, other nations are also pushing hard to have their home-grown solar generation capacity as a remedial measure to solve the electricity crisis. The latest to join this list is Asia's third largest economy, India.

Prime Minister Narendra Modi had revealed ambitious plans at the Vibrant Gujarat Summit held earlier this year for the solar industry in the country. India is striving to enhance its solar energy capacity to 100 GW by 2022. Moreover, India intends to increase its renewable energy share to at least 15% from the present 6% by 2020. Presently, India’s solar power capacity is below 3 GW. This has kindled the interest of the global solar players in the Indian market.

India signed a $1 billion agreement with the Export-Import Bank in 2014 for companies willing to ship equipment from the U.S. First Solar and SunEdison Inc. have ample businesses in India and, together with local firms, will invest $6 billion in the country for the fiscal year ending Mar 31, 2016.

Environmental legislation: Alternative energy companies are increasingly benefiting from new legislation in the U.S. stipulating installation of renewable sources of electricity generation as mandated by Renewable Energy Standards (“RES”). As of now there are 29 states, the District of Columbia and two territories that have RES legislation in place. Another eight states and two territories also have goals for adopting renewable energy standards.

At the federal level, investment tax credit (“ITC”) is currently at 30%, which will remain in effect through Dec 31, 2016. Beginning 2017, the solar tax credit becomes 10%. The industry will likely see many companies taking advantage of the 30% ITC, and build more panels, storage capacity and other production items up to the end of 2016. Once the ITC drops to 10%, these companies can also utilize a higher rate of depreciation to protect their profits. So, the cut in ITC will not likely dent these companies' profitability.

The wind sector also benefited significantly from the production tax credit (“PTC”) over the last few years. It began as part of the Energy Policy Act of 1992. Subsequent to that it received life extensions of half a dozen times.

In the first decade of a renewable energy facility's lifespan, the PTC provided 2.3 cents/kilowatt-hour ITC benefit for wind turbines and 1.1 cents for some other renewable energy sources. In early 2013, the renewable electricity PTC was extended for one more year. However, it expired by the end of 2014 due to Congressional gridlock.

Need for a pollution-free environment: Globally, utilization of renewable energy is rising primarily due to its clean nature and a growing awareness among the masses regarding its benefits. In Jun 2014, the Obama administration proposed a commonsense plan to curtail carbon emissions from power plants by 30% by 2030 from 2005 levels.

The proposed rule was expected to come into effect this year. This has influenced utility providers like NRG Energy Inc. (NRG - Analyst Report), Sempra Energy (SRE - Analyst Report) and Duke Energy Corp. (DUK - Analyst Report) to gradually shift their mode of power generation to solar, wind and water.

The EIA projects that utility-scale solar capacity will expand by about 84% between year-end 2014 and year-end 2016 in the U.S., in tandem with considerable consumption growth in renewables for electricity and heat generation purpose. California is expected to grab most of the growth with approximately 70% of the new capacity being built in the state.

To Sum Up

It is evident that demand for renewables is strengthening at a rapid clip. Moreover, the gradual widening of the solar markets will bode well for all global players and instill confidence in the industry over the long term.

Check out our latest “Can Alternative Energy Stop Global Warming?” here for more on the current state of affairs in this market from an earnings perspective, and how the trend is looking for this important sector of the economy now.

Read More

Saudis Confirm Switch from Oil to Solar - Alternative Energy Stocks

By Jeff Siegel

al-naimiYou probably wouldn't recognize him if you saw him on the street.

Heck, you probably don't even know his name.

But Ali Al-Naimi is one of the most powerful men in the world.

As the Saudi oil minister and chairman of Saudi Aramco, Al-Naimi is not particularly popular with U.S. oil producers, especially after telling the media he didn't care if oil prices crashed to $20 because it was not in the interest of OPEC producers to cut production â€" regardless of price.

Still, he remains the most influential oilman on the planet. Listed as one of Forbes' 50 most powerful people in the world, Ali Al-Naimi may not feel the love in Texas, but his influence is unquestionable.

So last week, when he made the following statement, the gatekeepers of the global energy economy blinked...

In Saudi Arabia, we recognize that eventually, one of these days, we’re not going to need fossil fuels. I don’t know when - 2040, 2050 or thereafter. So we have embarked on a program to develop solar energy. Hopefully, one of these days, instead of exporting fossil fuels, we will be exporting gigawatts of electric power.

Al-Naimi also added:

I believe solar will be even more economic than fossil fuels.

And he calls himself an oilman!

One of these days...

Sarcasm aside, Al-Naimi is right.

One of these days, we're not going to need fossil fuels.

We're not going to need gasoline or diesel to fuel our vehicles because in the future, our vehicles will not be reliant upon outdated internal combustion technology.

We're not going to need coal or natural gas to juice up our grid because those resources will simply be too expensive and environmentally burdensome to rely upon.

But let me assure you, dear reader, that this “one of these days” scenario is pretty far off.

Although I'm without a doubt one of the biggest advocates for transitioning our energy economy to one that is primarily built on cleaner energy, moving from a fossil fuel-dominated world to a renewable energy-dominated world will take more than 25 to 35 years.

Renewable Energy is the Future

Don't get me wrong; this transition is well underway. And those making the important investments in renewable energy today will be the dominant energy providers of tomorrow.

Don't think for a second that companies like Tesla (NASDAQ: TSLA), Google (NASDAQ: GOOG), and Apple (NASDAQ: AAPL) are embracing cleaner energy because they're run by a bunch of tree-huggers.

Renewable energy IS the future, and embracing it in its earliest stages is little more than a very smart investment decision.

By the end of this decade, solar will be competitive with all forms of fossil fuel power generation in nearly every city, town, and neighborhood on the planet. In some places, it's already there.

New developments in energy storage are not 50 years away â€" they're here today. In another 10 to 15 years, innovations like Tesla's Powerwall will be ubiquitous.

Electric cars â€" not even representing 1% of all the cars on the road today â€" will conquer 20% of the entire new car market in less than 15 years.

By 2030, we'll be moving people and freight at speeds in excess of 500 miles per hour using hyperloop technology. Centuries-old rail systems will find new homes in museums, and short-range air travel will become almost non-existent.

But here's the thing...

Even with all of these wonderful and exciting innovations that will move us forward as a global society, it's highly unlikely that all of the world's energy needs in 2050 will be met without the inclusion of fossil fuels.

That being said, the demand for fossil fuels is definitely going to decrease dramatically, and in a relatively short amount of time.

Your Grandkids Will Thank You

By 2030, 30% of the U.S. will be powered by renewables. And that's a conservative estimate.

By 2040, we'll be at 45%, and by 2050, we'll be well above 70%.

As far as transportation is concerned, I suspect that by 2050, they won't even be building internal combustion passenger vehicles anymore. Economically, environmentally, and socially, they just won't make sense.

Electric cars and high-speed travel (powered almost exclusively by renewable energy) will be the norm, new drivers won't even know how to put gas into a gas tank, and guys like Elon Musk and Jigar Shah will be in the history books as the most influential inventors and entrepreneurs of the 21st century.

As for you...

Well, if you approach investing as a long-term, sustainable avenue for wealth creation, do yourself a favor and commit at the very least a small portion of your portfolio to renewable energy. You'll be happy you did, and your grandkids will thank you â€" not just for the fat inheritance, but for the clean air and water, too!

To a new way of life and a new generation of wealth...

 signature

Jeff Siegel is Editor of Energy and Capital, where this article was first published.
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Pa. Official Says Gov. Wolf is Sold on Value of Solar Energy Industry - CBS Local

By Steve Tawa

PHILADELPHIA (CBS) â€" Philadelphia trails other major American metropolitan areas in its use of solar power, but Gov. Tom Wolf is hoping that the solar initiative proposal in his next statewide budget will light a fire for stronger policies here and across the commonwealth.

A new report on solar energy by Penn Environment shows that Philadelphia ranks only 26th for installed solar capacity among US cities and 41st for per-capita solar power.

John Hanger, Gov. Wolf’s secretary of policy and planning (at lectern in top photo), says the Wolf administration’s proposed $200-million alternative energy package in the budget includes $50 million to jumpstart solar energy programs in Pennsylvania.

“Very frankly, for the last four years Pennsylvania dropped out of the alternative energy game,” Hanger says, because the Corbett administration had little interest in solar power and investment flowed elsewhere.

“They certainly were zealous about focusing on natural gas and, frankly, a lot of important energy opportunities fell off the plate,” Hanger said today.  He says tax credits and other incentives for solar power are good for the environment, for jobs, and for consumers.

“About a dollar spent here on solar can leverage three, four, five dollars of private investment,” he noted.

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Chicago Students Build Virtual Alternative Energy Vehicles After School - T.H.E. Journal

STEM

Chicago Students Build Virtual Alternative Energy Vehicles After School

A group of middle-school students at Chase Elementary School in Chicago spent 10 weeks building virtual alternative energy vehicles after school.

They did so with the help of volunteers from Citizen Schools, a nonprofit organization that works to expand the learning day for children in low-income communities, and Hikvision, a maker of video surveillance equipment.

Volunteers from the company and the nonprofit visited the school once a week for the engineering design project that had as its overarching goal the enhancement of the students' science, technology, engineering and math (STEM) skills.

In the after-school project, students were able to build structures and vehicles, test their load-bearing capacity using technology and then apply what they had learned to an understanding of how alternative energy vehicles operate.

As a culmination of the 10-week program, the students were able to "teach back" to teachers, parents and community members what they had learned during a WOW! Event held May 15.

"These opportunities are crucial for students in many urban areas," said Citizen Schools CEO Steve Rothstein. "By the time they have reached the sixth grade, they typically receive 6,000 fewer hours of academic and personal enrichment opportunities than students in higher-income communities."

"Coming into the classroom every week and seeing how excited the students got was an incredible experience," said Hikvision sales engineer Ahmed Elsayed, who was a volunteer in the program. "Their desire for knowledge was palpable and I’m proud to be part of a program that fostered that."

About the Author

Michael Hart is a Los Angeles-based freelance writer and the former executive editor of THE Journal.

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A Look at Alternative Energy Sources and the Challenges Ahead - Press TV

By Homa Lezgee

Energy and environmental experts agree that there are three hard truths in the field of energy. The first one is that the demand for energy is going to rise, the second is that there will not be enough conventional fuel to cover this demand and the third is that with the increasing demand and use of energy, CO2 emissions will multiply.

“We know that demand is going to increase dramatically because of the many billions of poor people around the world who don’t have access to sustainable energy, wanting a better life,” says Josef Waltl, a senior advisor to the UN initiative, Sustainable Energy for All.

That’s why, he says the world needs new energy and the only real new energy source is renewable energy. But as of yet the world is not economically and technologically capable of putting conventional energy resources aside in favour of renewables.

“We need every kind of resource in the energy mix. It’s not about either this or that,” says Waltl. “It’s about renewables and non-renewables. The world will have to allocate a huge amount of money, capital and brainpower into the topic of developing alternative energy sources, finding ways to store them and using them in a way that’s different from what we have become used to in the last century.”

One of the areas where alternative energy is already being used is e-mobility but the batteries’ capacity and their high cost is still a problem.

In their documentary film ‘The Lithium Revolution’, Andreas Pichler and Julio Weiss say rechargeable lithium-ion batteries could solve the energy storage problem. In a time of global resource shortage and increasing energy prices, it is lithium that is on the way to becoming “the” natural resource of the 21st century, they say. 

The American company Tesla Motors has delivered more than 70,000 electric cars since 2008 and has now put serious money, up to $5 billion to be exact, into producing a gigafactory to manufacture lithium-ion battery packs for cars as well as homes. The factory is supposed to produce 50 gigawatt hours of electricity and manufacture about 500,000 batteries for cars and an unknown number of batteries for regular households by 2017.   

The project, according to economists is the first real sign that we’re moving toward a future in which alternative energy sources will have a greater share in the energy mix.

“With regards to available resources of lithium, we don’t have a real problem,” says Professor Reinhard Haas from the Vienna University of Technology. “The question is how to harvest this lithium and the costs involved.”

The biggest producers of lithium are Chile, Argentina and Bolivia. Around 50 percent of the world’s lithium reserves lies in the Salar de Uyuni salt flat in southwest Bolivia and the country has already opened its first lithium processing plant. The project is state-funded and does not permit intervention from foreign investors, which doesn’t help since the extraction demands a lot of money as well as technological know-how.

China on the other hand is using a lot of its money alongside South Korean and Australian technology to extract lithium carbonate from the raw material and use it to manufacture battery cells. The biggest challenge is their storage capacity.

Often leading demand not least because of the size of its population and economy, China is currently the world’s number one in almost all technologies for environmentally friendly electricity generation. But even in China around 90 percent of electricity is produced with coal.

“Over the next 20 to 30 years, China will see a 7 to 8 percent growth in energy demand and to cover that demand, it will have to use traditional fuels,” says Waltl. “Then, we have the 1.2 billion Indians, a billion Africans, 250 million Indonesians and 200 million Brazilians; so we will need all sources of energy we can get a hold on and fossil fuels will continue to be a major part of the energy mix.”

Bolivia's Salar de Uyuni, the largest salt flat in the world

More fossil fuel means more CO2 emissions and tackling that through the increased use of renewable energy requires finding an answer to the question of energy storage. 

“If people want to have a green environment and to reduce greenhouse gas emissions, we have to set the corresponding regulatory conditions,” says Professor Haas. “One kind of regulation is taxing rather than subsidizing, and currently worldwide many countries are subsidizing fossil energy and others are taxing it, obviously it depends on whether you have it in excess or whether you import it. If we have this cost of greenhouse gas emissions included in the final energy prices, then we can have competition between different supplies and demands of technologies.”

Experts agree that more research is needed. “About 30 years ago the production of solar electricity was seen as hugely uneconomical and the cost of production was about four or five times more than traditional methods of electricity production but this price gap has now closed,” says Waltl.  “We should be quite positive about the ingenuity of human beings and their ability to solve very difficult problems provided there is support by governments and regulators and the right economic incentives,” he concludes.

HL/HSN   

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Vietnam Slow To Start Up Renewable Energy - VOA Learning English

Vietnam Slow To Start Up Renewable Energy


Vietnam might seem to be a good candidate for renewable energy projects. With plenty of sunshine and ocean winds, Vietnam seems like the right place to capture energy from the sun and wind. But there are only three big wind farms producing electricity and no considerable solar investment. That puts Vietnam far behind Indonesia, Thailand and other Asian countries in the development of renewable energy.

Critics say the reason is easy to recognize: price controls.

Vietnam keeps a ceiling, an upper limit, on electricity prices. On average that is about seven cents per kilowatt hour. Investors say they need a feed-in tariff that is at least two times that amount. Feed-in tariffs are policies that give money to renewable energy producers. Renewable energies can be costly to start up and the tariffs would help with the price of production.

People working in the power market have suggested other ways to support renewables. These include a reduction in taxes for energy-related training and education. But when talking about electricity in Vietnam, it often comes to the same criticism.

“There’s nothing that can make up for a feed-in tariff that’s in the single digits,” said Daniel Potash, Chief of Party for the Private Finance Advisory Network for Asia Program. The program is part of the United States government’s Agency for International Development.

Mr. Potash spoke earlier this month at the U.S.-Vietnam Clean Energy Conference in Ho Chi Minh City. Most people at the conference pushed for Vietnam to develop alternative energy sources, like solar and wind power. But doing so would mean the state power company, Electricity Vietnam (EVN), would raise its prices. This could cause political problems. It might invite criticism from Vietnamese consumers who want low prices and do not trust the state-owned EVN.

Nguyen Anh Tuan is chief editor of the Vietnam Investment Review. His newspaper organized the conference with the U.S. Commercial Service. He said policymakers are trying to find a balance, so Vietnam can have reasonably priced, yet sustainable energy. Based on talks with the Ministry of Planning and Investment, which owns his newspaper, he said, price increases would have to be made slowly. 

“If we increase the unit price in different areas, it will cause a negative reaction from society,” said Nguyen Anh Tuan. “So that will affect our policy.”

In addition to wind and sunlight, Vietnam is working on rules to support energy produced from other sources. These include waste, biomass (such as rice and corn husks), and water currents. Officials are considering the possibility of cutting or suspending taxes temporarily for energy producers, and permitting duty-free imports of machinery.  Another idea is promising to buy electricity from companies. It is all part of an official “Green Growth Strategy” that combines economic development with low carbon emissions, or less pollution.

Some businesses are putting in solar equipment for their own use already. The Vietnam Business Forum said that it found many companies would pay more for renewable energy because it can be clean and dependable. The government is also considering ways to let private individuals with solar panels sell their extra electricity back to the power company. Fred Burke, managing partner at Baker & McKenzie Vietnam, called this idea “low-hanging fruit.”  That means it could be an easy first step.

“It does appeal to the entrepreneurial spirit of the Vietnamese people,” he said. “They can each sell to EVN.”

But Vietnam also is increasing coal production. Its Master Power Plan VII says that by 2030, coal will supply just over half of the country’s electricity, compared with about 30 percent now. This is true despite the country’s fears that it could be hurt by climate change, especially changes resulting from pollution. In Vietnam, pollution comes mainly from energy production.

Citizens have protested the arrival of coal-fired power plants in their neighborhoods. In Binh Thuan province, recent protests forced officials to seek pollution-cutting measures. Nguyen Dang Anh Thi works as an advisor to the International Finance Corporation. He calls coal a “time bomb” that also could lead to heavy metal pollution and acid rain.

“It is very clear that this will be a really serious issue and we need to reconsider Master Plan VII,” he said at the conference. He added, “I recommend that we review the renewable energy strategy, which has a very low target.”

Under the strategy, Vietnam would get 4.5 percent of its electricity from renewable energy sources by 2020, up from 3.5 percent in 2010.

I’m Anne Ball.

Lien Hoang reported on this story from Ho Chi Minh City.  Anne Ball adapted it for Learning English. George Grow was the editor.

______________________________________________________________

renewable energy â€" n. energy from something that is not used up when used, such as wind or solar power

kilowatt hour â€" n. a way to measure of electrical energy. One kilowatt hour equals power use of 1,000 watts for 1 hour

consumer â€" n. a person who gets goods and services; someone who uses something

sustainable â€" adj. can be kept at a set rate

despite â€" prep. something that is true, or will happen even though something could prevent it from happening

Do you have renewable energy in your city?  What do you think about renewable energy?  Leave a comment below and let us know.

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Darling Ingredients: At the Margin - Alternative Energy Stocks

by Debra Fiakas CFA

This week Darling Ingredients (DAR:  NYSE) reported earnings of $100,000 on net sales of $874.7 million in the first quarter ending March 2015.  Darling is a recycler of sorts, collecting by-products of the food production industry and recycling the left-overs and waste into proteins, fats and leathers.  Nothing goes to waste.  Every last chicken feather, hide, gallon of used cooking grease and cake crumb gets up-cycled to a usable material for feed, food, fuel or clothing.  Its customers include pet food producers, personal care manufacturers and textile users, among others.

Darling used to sell its non-edible oils to the biofuel industry until it entered into a joint venture called Diamond Green Diesel with oil and gas giant Valero Energy, Inc. (VLO:  NYSE).  The joint venture provides a good hedge for Darling against declines in the prices for its oil, which can weaken against other oils from corn, soy or palm crops.   Diamond Green produced 37 million gallons of renewable diesel in the quarter.

The commodities business is a tough one and Darling had been under some pressure in recently months from weakened selling prices.  Sales in the three months ending March 2015, slipped compared to the year-ago quarter on lower selling prices for fat products.  The strong dollar also trimmed reported sales.   Management seems to have righted the ship with a cost cutting program and restructuring in some divisions.  The company also has some protection if raw materials prices increase  through sales contract include provisions for selling price adjustments.    During the earnings conference call management characterized margins in the feed segment as ‘normalizing’ and in the food segment ‘stable’ following restructuring efforts.

The breakeven earnings results were better than analyst expectations for the quarter and offered encouraging evidence that management had regained control of margins.   On a non-GAAP basis Darling generated $0.09 in earnings per share after excluding acquisition and integration costs and amortization.  This compares to the consensus estimate of non-GAAP earnings of $0.06 per share.  The appearance of an upside surprise was enough to bring investors and traders back to DAR, which gapped higher in the first day of trading following the earnings release.

Crystal Equity Research has a Buy rating on DAR.  The stock appears overbought in the short term, but management’s efforts to regain profit margins have borne fruit and the stock looks interesting for investors with a long-term horizon.


Debra Fiakas is the Managing Director of
Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Crystal Equity Research has a Buy rating on DAR and Darling Ingredients is included in the Biofuel Group of the Beach Boys Index of alternative energy developers and producers.

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Evident in Troy buys assets of Boston-area alternative energy firm - Albany Times Union

Troy

Just months from launching its first commercial product, Evident Thermoelectrics of Troy has acquired a Boston-area energy company called GMZ Energy of Waltham, Mass.

Terms of the deal were not disclosed, but Evident, which operates on the Russell Sage College campus, purchased all of GMZ's assets, including its patents, equipment, product lines, customer contacts and brand.

GMZ was in the news lately for having reportedly shut down after years of promise that included $20 million in investment from venture capital firms such as Kleiner Perkins Caufield & Byers of Silicon Valley. The firm, which had ties to both MIT and Boston College, originally was focused on solar technology and then shifted to thermoelectronics, which is technology that turns heat into electricity.

Although it went through a Chapter 11 bankruptcy reorganization several years ago, Evident has rebounded and also shifted from LED and quantum dot technologies to thermoelectric devices. It has raised millions of dollars in new capital in the last couple of years and has 15 employees. It says it is months away from its first commercial product based on technology that it licensed from NASA.

"GMZ Energy has been very successful at developing nanomaterial-based thermoelectric modules, and making them commercially available," Evident CEO Clinton Ballinger said. "This acquisition is a key element in our investment core strategy to accelerate our product development, as it broadens our market segments and allows us to offer even more products that perform at higher temperatures, meeting customer demand."

GMZ's equipment will be moved to Troy as part of the purchase. Evident plans to also hire some of its former employees, including Giri Joshi, research director at GMZ.

"I am excited to work with Evident as we continue the work we started at GMZ," Joshi said.

NASA uses thermoelectric devices that convert heat from plutonium to the electricity that powers the Voyager and Mars Curiosity space vehicles. Evident has said its technology could be used to replace alternators in cars using heat from a vehicle's engine.

lrulison@timesunion.com • 518-454-5504 • @larryrulison

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Wind rules in 10 years of alternative energy development - Great Falls Tribune

As he drove past windmills in Judith Gap, Shelby Mayor Larry Bonderud thought to himself, "We can do this."

Since then, Glacier Wind Farms 1 and 2 between Shelby and Cut Bank have brought more than $6.47 million to the county in property taxes and impact fees.

"That affects all of us as we broaden our tax base," Bonderud said, adding, "We are aggressively seeking more" wind power development.

The wind farms, including one near Kevin, have brought technology from all over the world â€" and the people who operate and install that technology â€" to Shelby and lured home graduates to work in maintenance, he said. Combined with the oil and gas wells in the county (more than 10,000 wells), a carbon sequestration, daily crude oil trains and a fracking sand project, Shelby is "at the crossroads of energy," he said.

Bonderud was among those on hand Wednesday to mark the 10th anniversary of Montana's Renewable Power Production and Rural Economic Development Act, which requires utilities to purchase 15 percent of their power from renewable resources by this year.

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Shelby Mayor Larry Bonderud said he looked at the wind farm in Judith Gap and thought Shelby could have a development like that, too. (Photo: TRIBUNE FILE PHOTO/LARRY BECKNER)

In the past decade, wind power has gone from supplying none to 6.5 percent of the energy generated in Montana. Based on projects in the queue, that could be 13 percent by 2020 and 28 percent by 2040.

U.S. Sen. Jon Tester, D-Mont., was president of the Montana Senate in 2005 and sponsored the act.

"The last 10 years have shown how successful that standard has been," he said via video.

Tester said alternative energy development has been good for air and water and also the economy and ratepayers, and he pitched a bill he recently introduced to support further investment in geothermal development.

The debate isn't between renewable and nonrenewable energy but an "all of the above" policy, said Evan Barrett, who was former Gov. Brian Schweitzer's director of business development.

"And that's great for Montana as we have so many sources of energy," he said. "It's not a zero-sum game. There's lots of opportunity."

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NorthWestern Energy’s Spion Kop wind farm near Geyser. (Photo: TRIBUNE FILE PHOTO/RION SANDERS)

Instead of fighting over the slices of the energy market, "Montana is a kitchen and we can all make our own pie," said Bob Quinn, a Big Sandy farmer and developer of the Judith Gap Wind Farm.

"Our goal was to make sure Montana's first wind farm wasn't the last," he said.

Wind energy is nearly as important to Wheatland and Toole counties' economies as coal and coal-fired power are to Rosebud County, according to research sponsored by Renewable Northwest and Montanans for Good Jobs & Clean Air.

"Wind for many years was a liability, and now it's an asset," Quinn said.

While some states are reluctant to export energy, Montana has a strong culture of exporting energy to other states and markets, making it a prime place for additional wind farms, said Josh Framel, Invenergy project developer.

"We want to take Judith Gap and multiply it across other counties," he said.

Two-thirds of wind power generated in Montana is exported out of state.

Wind power has meant about 100 new jobs a year in the state and an average of $17 million added to the gross state product and nearly $400 million spent on construction, taxes, leases, labor and other costs, said Gary Gannon, who presented research compiled by SciGaia.

"It's had a huge impact on the well-being of those communities and compares well with oil and gas counties," Gannon said.

Electric rates don't seem significantly impacted, with Montana rates 5 percent lower than other mountain states and 15 percent below the national average, he said.

While the wind, sun and water are present, the challenge down the road will be in transmission of the power. Bonderud said the best option for transmission may be to Canada.

"As you look at future constraints, it's transmission," he said. "Maybe the way to get it out of here is to go north."

The only certainty is that Montana's energy picture will be different in the future, Gov. Steve Bullock said. He said Montana still has a ways to go to realize its full renewable energy potential and needs to tap into new technology to keep Colstrip in operation.

"With good-paying jobs, investment and plenty of resources, Montana is primed for renewable energy," Bullock said. "Through innovation, we can and will continue to create jobs and deliver clean air without pulling the plug on our existing energy industries."

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Windmills between Shelby and Cut Bank have provided nearly $6.5 million to Toole County in taxes and impact fees. (Photo: TRIBUNE File PHOTO/KRISTEN INBODY)

Eastern Montana has "really hot water at shallow depths," which could be harnessed for geothermal development, Gannon said. That could power the oil and gas industry, heat buildings or be used for greenhouses for higher profit crops.

Other alternative energies are pumped hydro-power, with a project expecting to add 400 megawatts by 2019 and adding power components to dams that aren't now generating electricity, an estimated 70 megawatts of untapped energy.

Wind produces about 670 megawatts of power in Montana now (with another 285 megawatts expected in 2016 and a capacity for 2,400 megawatts). Solar energy hasn't been so big a factor as wind, but the industry does employ 140 people in a $25 million business. Projects in the hopper for Lewis and Clark, Deer Lodge, Missoula, Golden Valley, Bighorn and Broadwater counties could add 60 megawatts.

"Big sky. Big sun. Big opportunity," Barrett said.

"We have a long way to go to realize the full solar potential" of the state, said Diana Maneta, director of the Montana Renewable Energy Association.

Key going forward will be distribution of energy generation, Maneta said, with home solar panels and small-scale windmills.

"People want to take some control over their own energy," she said.

Reach Tribune Staff Writer Kristen Inbody at kinbody@greatfallstribune.com. Follow her on Twitter at @GFTrib_KInbody.

Read or Share this story: http://gftrib.com/1SfbjiS

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Outsourcing Alternative Energy To The Developing World - Science 2.0

Like with emissions-free, white-collar astronomy jobs, it seems strange that anyone would protest emissions-free alternative energy, but in the United States it faces an uphill battle. On one side environmental groups lobby for it, while on the other, different environmentalists wait to file lawsuits and if they aren't paid off quickly, it could take years to resolve in court. San Diego Gas&Electric learned that in 2006 when they tried to run power lines from a solar farm in the Mojave Desert and environmental lawyers prevented it - after the utility spent $125 million.

In the case of the developing world, the lack of both entrenched energy constituents and environmental lawyers may be a good thing. 

When the cellular market was first taking off, there was a lot of American hand-wringing about infrastructure. In the 1990s, it was noted as a cause for alarm that Brazil was beating the U.S. in cellular uptake. For most people that was a 'so what?' moment because everyone in the U.S. knew why wireless would take longer here - Brazil never subsidized landlines to every remote rural area the way the U.S. did and so they had no legacy infrastructure that was already 'good enough' for most people. 

A similar lack of entrenched constituencies in energy may be better for everyone in developing nations. A country that has little coal is not really benefiting from coal or natural gas plants because they have to import it. So if the developed world makes an "investment" in the third world that then has a high recurring cost for local citizens, it isn't beneficial.(1)

The developing world also provides some real proof-of-concept. It is great for environmentalists to insist solar and wind are ready right now and that the need for continued subsidies and mandates will go away if we just keep subsidizing and mandating, but they said the same thing about ethanol 20 years ago and natural gas and solar before that.(2) Currently, developed nations are installing alternative energy, but it is mostly for show. Germany added solar but then stated they were dropping nuclear, so now German fossil fuel companies are making billions with "instant on" capability to prevent brown-outs and the country is importing natural gas extracted using the fracking German politicians claim to environmentally oppose(3). German CO2 emissions have risen and even France is ridiculing them for their increased pollution.

If alternative energy is viable it will be obvious in countries where there is no financial sleight-of-hand and nonsense about 'embedded' value of solar power replacing the actual money citizens spend. Countries like Thailand and Bulgaria have recent uptake in alternative energy and if it works they may be able to show the path for the rest of us. While in optional technology like cell phones, it is always necessary for rich countries to have uptake first in order to bring the cost down over time, in energy it may be better for developing countries to lead, because they can get something done without lawyers masquerading as environmentalists seeking graft.(4)

A new analysis from Pew shows that 100 nations outside the big 20 got $62 billion in alternative energy funding from 2009 to 2013. 45 percent of that was in 10 countries, and led to an increase in alternative energy capacity of 91 percent. Joining countries like Bulgaria and Thailand were Ukraine, Kenya, Peru, Taiwan, Morocco, Vietnam, Pakistan, and the Philippines.


Credit: Pew Emerging Markets Report

That alternative energy was wind and solar for the most part, but hydropower, another technology that has fallen out of favor with U.S. environmentalists, got $2.1 billion in 7 countries, the bulk of it in Viet Nam. Thailand led in biomass, Kenya added geothermal and Pakistan added nuclear.

Obviously the largest economies still lead in adding alternative energy, the G20 installed 90 percent of it in the past decade, but countries like the U.S. have shown big declines in CO2 output while the world's output has increase. The Obama administration signed a bizarre agreement to allow China to emit pollution unchecked through 2030 while we cut back even more, which is bad economics and even worse environmentalism, so our products will continue to be made elsewhere with no environmental protection in order to keep environmentalists happy.

Outsourcing clean energy will offset some of the environmental damage that would otherwise result from strange U.S. economic strategies.

NOTES:

(1) Californians have discovered this. They now have 50 percent higher utility costs than other states because of green energy subsidies - and can't build desalination plants to offset the drought because of both environmental lawsuits and high energy costs.

(2) The only one they got correct was natural gas - and both ethanol and natural gas they turned against after they became popular.

(3) As New York hypocritically does with Pennsylvania next door.

(4) Only the politicians are seeking graft, but that is still half as many people holding projects hostage.

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Renewable energy target 'an enormous challenge': Industry Minister Ian ... - ABC Online

MICHAEL BRISSENDEN: For more on that story we're joined now by the Industry Minister Ian Macfarlane.

Mr MacFarlane, welcome to the program.

IAN MACFARLANE: Morning Michael.

MICHAEL BRISSENDEN: Do you concede that the last 12 months of political gridlock has had a cost to the industry?

IAN MACFARLANE: Well what I've seen is an outcome which will give the industry an enormous challenge. It is a very ambitious target and if you talk to people in the industry - and I met yesterday with Matthew Warren in the roundtable where Kane Thornton was attending. Matthew's view is that it is almost impossible to build this many wind towers in the time that they have available. Remember they have to build as much wind generation in the next five years as has been built in the last 15.

Now I'm a bit more optimistic than that. But look it's a challenge that they need to get into it. There's plenty of opportunities. There's more than $30 billion in subsidies going to come to the industry from electricity consumers. I think it's a pretty good outcome.

MICHAEL BRISSENDEN: But what was the political fight all about, particularly the last few months of it? Because you've come back to the table with the compromise you were still against only a weeks ago.

IAN MACFARLANE: Well I've got what I needed, and that is a mechanism where the Government will get accurate information about whether or not the RET is on target and whether or not the prices aren't going to default and therefore cost electricity consumers a very significant amount of money.

So we've got that safety mechanism. We originally asked for it through the reviews that the Labor Party put in place. I suggested an alternative to the Prime Minister in terms of having the clean energy regulator report to both the Government and the Parliament regularly. That's happened.

With those safeguards in place for consumers, then it's open slather for the industry to get out there and build this 33,000 gigawatt hours of generation.

MICHAEL BRISSENDEN: Ok well, let me take another tack then, because last month you said 32,000 was the top limit that we can move to and still be confident that the renewable energy scheme is sustainable, if we go higher there's a risk the scheme will default. Does that risk not exist anymore?

IAN MACFARLANE: Well that risk certainly does exist and that was the whole point, having the regulator keep a good watch on what was happening in terms of the scheme.

So we have our concerns about the ability of the industry to build in five years what has taken 15 to build already. So as I say, we want to be sure that the price doesn't go to default and that on that pace consumers would face a very significant increase in the cost of renewable energy. So we've got the checks and balances in place.

The challenge is there for the industry, we hope they achieve it, but everyone needs to get very busy, because the best wind sites are gone, the alternative technologies aren't competitive at this stage and there's going to be a lot of pressure on the wind industry to not only build the towers but get the off-take agreements in an oversupplied electricity market.

MICHAEL BRISSENDEN: Industry largely seems to be pretty happy, but not everyone is happy. I see the chief executive for the Solar Council describes the deal as an act of political bastardry and he's pushing Labor to commit to a policy of 50 per cent renewables by 2030. Is that something you could agree to as well?

IAN MACFARLANE: Well look we've got to be realistic, let's achieve this target first, it's a target that'll be amongst the highest in the world. It's higher than the original target of 20 per cent. It's now 23.5 per cent.

It's still 45,000 gigawatt hours. Mainly because the solar industry, which is not affected in any way by this - so household, rooftops, solar, will continue unabated. Because household solar is performing the best in the world here in Australia, in fact it's daylight second and away third, and we've seen a massive uptake of solar and we believe that will continue to happen, but large scale is still struggling to compete.

MICHAEL BRISSENDEN: Now Labor says that the 33,000 gigawatt hours figure is a flaw, is that how you see it as well?

IAN MACFARLANE: Well I see it as a target and that's what it is and we'll be (inaudible).

MICHAEL BRISSENDEN: But is there a possibility that you would agree to it going higher?

IAN MACFARLANE: Well

MICHAEL BRISSENDEN: Some time in the future?

IAN MACFARLANE: Well let's achieve one thing at a time. Everyone accepts this is a significant challenge to get to 33,000 gigawatt hours. Let's achieve that first, and let's see where we are in 2018, which will be when we really know where we sit with this whole scheme.

MICHAEL BRISSENDEN: And is that when you'll start thinking about post-2020 policy or will you start before then?

IAN MACFARLANE: Well we're starting to think about post-2020 policy now and as you know the Government is preparing to put in a significant submission in Paris at the end of the year in terms of curbing global emissions. And of course renewable energy is very much a part of that. But it is a mix of technologies, it's a mix of policies, but we're working on it as we speak.

MICHAEL BRISSENDEN: Okay. Can we just turn quickly to the possibility of an iron ore inquiry. You reportedly share the concerns about pushing ahead with such an inquiry. Now you would have noted Don Argus from BHP this morning that we'd be a laughing stock internationally if we interfered in any way in the iron ore market. He's right, isn't he?

IAN MACFARLANE: Well let's be clear - no decision has been made to have an inquiry and no-one in the Government wants to regulate the iron ore market. There have been claims and counter claims and that's what the ACCC's there for. They can look at those claims and we'll continue to monitor the situation.

MICHAEL BRISSENDEN: What would be the point of an inquiry then if you don't want to interfere in the market?

IAN MACFARLANE: Well as I just said no decision has been made to have an inquiry.

MICHAEL BRISSENDEN: But the discussion's going on isn't it?

IAN MACFARLANE: Well no discussion has been made to have an inquiry.

MICHAEL BRISSENDEN: Well what would be the end game of an inquiry if you did decide to do one?

IAN MACFARLANE: Well I'm sorry Michael but no decision has been made to have an inquiry. We've said that we will continue to monitor the situation, but no decision has been made to have an inquiry.

MICHAEL BRISSENDEN: But the Prime Minister seems to be in favour of one, at least at this point.

IAN MACFARLANE: Well I've spoken pretty regularly with the Prime Minister in the last two days and I can tell you no decision has been made to have an inquiry.

MICHAEL BRISSENDEN: Okay. And to the polls quickly, there's been plenty of talk in the last couple of months about an early election, which camp are you in - the early camp or the stay the course?

IAN MACFARLANE: Well I'm in the camp of delivering a really good budget and that's what this is, it's a very, very good budget for small business. And being out there on the ground, there is a lot of excitement amongst small business that they've got a deduction which they can use not only to boost their business, but also make it more viable.

And along with the families package, that's what we're focusing on at the moment, getting out there and making sure that people understand what a very strong budget this is to grow the economy and also address the deficit.

MICHAEL BRISSENDEN: And do you think you could use that enthusiasm to your political advantage?

IAN MACFARLANE: Well look I'm always about selling what we have in front of us and one step at a time Michael. There's always a smorgasbord of issues, but I like to deal with what's in front of me right now. What's in front of me right now is a great budget which is getting a very good reception from the community.

MICHAEL BRISSENDEN: Okay, Ian Macfarlane, thank you very much for joining us.

IAN MACFARLANE: Thanks, Michael.

MICHAEL BRISSENDEN: That's the Industry Minister Ian Macfarlane there.

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Renewable energy target deal is flawed but still good for all - The Australian Financial Review

by Tony Wood

Although agonisingly slow in gestation, the deal done by the government and opposition on the renewable energy target (RET) is good for all, although perfect for none.

A target that had been legislated to deliver 41,000 gigawatt hours of large-scale renewable electricity by 2020 has been reduced to 33,000 gigawatt hours. On forecasts contained in the government's Warburton Review, this will comprise about 25 per cent of electricity demand by 2020.

The government had argued that the target should be reduced significantly because it was always intended to source 20 per cent of electricity demand from renewables, but because of falling electricity demand the figure was heading closer to 28 per cent by 2020. The government has now achieved a substantial reduction and removed a key policy barnacle.

The opposition had argued that the original fixed target was essential for a viable renewable sector. In being prepared to negotiate for a lower figure it has achieved an outcome significantly better than would have been achieved by the Warburton Review's recommendations of big cuts to the target.

A bipartisan agreement is far better than any alternative because it is likely to hold for the timeframes essential to underpin ongoing investment. If the support of the Clean Energy Council is a guide, the result will sustain the sector into the next decade. The council, the renewables industry peak body, has played a key role in the negotiations and the result. It will not have been easy, given their multiple constituencies.

For the energy sector, the resolution provides urgently needed policy predictability. The big energy players, such as AGL, Energy Australia and Origin Energy, should also welcome it.

Why has the renewable energy target, created to provide policy and industry certainty, sparked such acrimonious debate for so long? There are several reasons.

Marketing slogan

First, because the target of 20 per cent by 2020 was more of a marketing slogan than sound policy, there was no fundamental basis to fall back to when people started challenging the validity of the target.

Second, turning the 20 per cent target into a fixed 41,000-gigawatt figure to provide investor certainty was based on a forecast that was always going to be wrong. Unpredicted falls in electricity demand made the forecast very wrong. Vested interests in coal and gas power generation had accepted renewables' share of a growing pie. But they changed their minds as falling demand made it clear the market was entering a period of oversupply that would squeeze their profits.

Third, electricity prices have risen by more than 60 per cent in real terms since the target was set in 2009. Although network costs have been the main cause, the increases made electricity prices a politically sensitive issue and any policy that might push up power prices became an obvious target.

Fourth, the RET had been conceived as a weapon of climate change policy that would become redundant over time as a rising carbon price that favoured renewable and other low-emission power sources gradually became the central policy element. That world is no more.

With the repeal of the carbon tax last year, the RET became "the only currently prospective policy instrument in the electricity supply sector than can be relied upon to deliver sizeable volumes of emissions reduction", to quote the Climate Change Authority. The target found new friends and enemies: the first sought to save the remaining policy instrument from the climate change bonfire, the second to burn that policy as well.

In 2014 the government sought to wind back the RET through the Warburton Review. Yet it came badly unstuck when the review's recommendations proved hard to defend and were discarded in the face of Senate hostility to any short-term changes to the RET. From that time, a negotiated outcome became necessary and desirable.

While all parties to the debate have reason to be disappointed, resolution offers three substantial benefits. It provides a predictable environment for further investment in renewable energy. More than 5000 megawatts of renewable electricity power was installed under the RET between 2001 and 2014. The reduced target should still deliver another 6000 megawatts of capacity from next year to 2020.

Greater capacity

Second, the wholesale electricity market will have greater capacity to manage a more predictable supply from renewable sources.

Third, the policy focus can now shift to the main game â€" developing a credible, long-term climate change policy beyond 2020, with bipartisan support and able to meet future targets that governments might adopt. Expanding the RET to include other low-emissions technologies would more strongly complement the emissions reduction fund and could even be a platform for a post-2020 market-based approach that reduces emissions at lowest cost. 

The RET deal has limitations. But as Confucius said: "Better a diamond with a flaw than a pebble without."

Tony Wood is energy program director at the Grattan Institute. 

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PNM dedicates solar energy center - Albuquerque Journal

PNM’s new solar energy center in Sandoval County has almost 80,000 solar panels. (Antonio Sanchez/Rio Rancho Observer)

PNM’s new solar energy center in Sandoval County has almost 80,000 solar panels. (Antonio Sanchez/Rio Rancho Observer)

The Public Service Company of New Mexico celebrated Sandoval County’s 80-acre solar energy center on Thursday, winning praise from local officials.

The PNM Sandoval County Solar Energy Center, located north of Northern Boulevard on Encino Road, houses approximately 75,590 solar panels and generates enough energy to serve 2,450 average customers.

Energy produced by the 6.4-megawatt solar energy center will be used for PNM’s user base, and not just for Sandoval County residents.

The dedication event on Thursday featured remarks from representatives of the county, the Rio Rancho Regional Chamber of Commerce and the Sandoval Economic Alliance.

The $16 million project began operating near the end of 2014 and, according to PNM, has resulted in an estimated $152,000 in construction-related tax revenue for the county.

Sandoval County Commissioner Glenn Walters thanked PNM for investing in the county.

“Alternative energy sources are somewhat the way of the future,” he said. “Obviously, it’s not the primary source of energy but it has potential as an alternative source that can be used.”

Paul Barabe, RRRCC vice president of member services, agreed with Walters, saying the investment was one made for the future of Rio Rancho and for energy.

“This is very impressive to be out here,” he said. “I think it’s something we need to look at in the future as we’re growing.”

PNM began planning and working on acquiring permits for the project in 2013; construction took place in 2014 over the course of three months.

Danielle Duran, PNM’s Albuquerque metro area manager, said work between PNM and Sandoval County went smoothly.

“We had a great experience with the planning and zoning commission,” she said. “We really appreciated all the assistance and support from the county manager, the county attorney, planning department. They didn’t just let us walk through, but they definitely helped us with the process.”

The new county solar energy center is part of PNM’s $270 million investment in solar energy, and is one of 15 solar energy centers planned to open throughout the state by the end of the year, she said. The next two centers PNM expects to open are in Santa Fe County and Bernalillo County.

Tiffany Avery, SEA director of marketing and communications, said the opening of the site was in line with SEA’s goals.

“This is a great step in the right direction with what we’re trying to do, by putting Sandoval County on the map,” she said.

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Positioning Solid Minerals Sector For Alternative Energy, Employment Generation - Leadership Newspapers

While many developed and developing countries of the world have taken advantage of the alternative energy resources nature provides, Nigeria has continued to lag behind in its struggle to generate sufficient power supply. RUTH TENE NATSA writes on the need to take advantage of coal as an alternative energy source as well as a platform for employment generation.

A major challenge to the economic development of the nation has been blamed on the poor or unavailable energy and power supply, said to be a major factor, for manufacturing and production by small, medium and large scale industries and businesses.

While there are many sources of energy particularly through renewable energy, including hydro (water) solar (sun), wind and coal among several others, government has failed to take advantage of these resources rather restricting its attention to electricity.

Nigeria’s electricity generation though said to have attained a steady climb of 4,044 megawatts (MW) in the past two years, is still below the peak generation level expected. While the country’s power generation capacity currently stands at 6,000 MW, it is expected to grow to 40,000 MW by 2020.

Experts and stakeholders are of the view that using alternative energy will fast track the nation’s dreams of achieving a steady and more dependable source of energy to tackle the needs of the nation’s huge population. This is in view of the huge potential coal is said to have as an alternative to power generation.

Speaking in an exclusive interview with LEADERSHIP Sunday, coal miner and expert, Dr Innocent Zuma says Nigeria has done very well in developing its coal through President Goodluck Ebele Jonathan. In his words, “the President Jonathan administration has given a lot of impetus to the coal sector.”

According to him, “today Nigeria is mining coal, my own group has over 300,000 tonnes of proven coal reserves and we are mining coal in Nigeria, so I do not see how people can be saying they are importing it, whereas it is in abundance.”

Reacting to the need for further government intervention in the sector, he said, “the federal government has done all it has to do for the success of the sector and all that is required are long term and cheap funds to move the sector forward. He adds that anybody importing coal into Nigeria is a traitor to Nigeria economy and development and that cannot be allowed to happen.”

Speaking on the challenges that have hindered the development of the sector as a whole, the miner said, “the problems from my own point of view is that our past leaders neglected the sector so much that fresh investments were not made. And the solid minerals and power sector is one that must be actively invested in in all the chains, including distribution, transmission and other sectors of it.”

Zuma maintained that since President Jonathan took over he had done so much but the much that was done cannot immediately transform the sector, “it cannot be done overnight, power sector infrastructures are not such that can be bought off the shelf, it requires time and huge investment, but if we continue on the path we are now, it will surely get better.”

He assured that “the challenges that have delayed the 30% coal to power generation have been overcome by the enabling environment provided by the outgoing administration.”

Meanwhile speaking on the progress made in the development of the solid minerals sector the minister of Mines and Steel Development, Architect Musa Mohammed Sada said, “the President Goodluck Ebele Jonathan government has sanitised the sector through a sound regulatory framework, but maintained that policy instability was not good for mining development.”

According to him, “I realised that the intermittent changes seem to be affecting the progress of the sector that is why we set out to develop some sustainable processes in making sure we institutionalise those key areas of operations in the sector.”

Speaking with journalists in Abuja recently, Sada said, “for mining companies to successfully operate, what they require is continuity of policies and guidelines.”

“The effort of the outgoing government was to sanitise the system, develop a framework and provide a road map that could be further built on.”

He noted that “though the roadmap is not a perfect document, it’s a guideline that can be built on, you can review it from time to time and see what adjustments can be made to move the sector forward.”

Speaking on the myriad of challenges to the development of the sector in general, Arch Sada said the sector is faced with varying policy challenges, poor infrastructures, power, lack of equipment, low technical know-how among several others.”

Also speaking in an exclusive interview with LEADERSHIP Sunday, the CEO Promethean Resources Demola Gbadegeshin asserted that “as far as the regulatory regime for mining is concerned, Nigeria has one of the best in the world, it is modelled after the best and even improved on from countries such as Peru, China and Australia and as far as we can implement and enforce those regulations, the sector will be good. I also think the current regime is doing a good job and doing its best.”

“The other aspect is the private sector, if there is nothing to regulate, the regulators won’t be able to do their jobs, so there needs to be more investments going into the sector. We need to invest and encourage the government and also encourage more players, the more players we have the more the competition, and the more competition we have the more viable the sector will be.”

It should be recalled that as a means to curbing Nigeria’s myriad power challenges, the federal government through the Ministry of Mines and Steel Development initiated the coal-to-power project with the aim of generating 30% power using coal by the year 2020.

While these efforts have been lauded and applauded as a means to boost power generation, onlookers in the industry fear that it is just one of the policy statements government makes on paper to create the impression that much is being done.

This pessimistic view is caused by the fact that while it is believed that the sector is rich and has much to offer particularly at a time when Nigeria can no longer boast of its huge and continuous revenue from oil and gas, very little has been done to address the many challenges that make the sector a ghost to its agriculture counterpart.

Mining in Nigeria, according to records, began over 2,400 years ago with artisanal mining taking the initial form as practised by communities while seeking for natural resources.

In the area of funding, the solid minerals sector remains one of the most underfunded sectors and this is also complimented by the fact that revenue generation by the sector is said to be below 0.5% as against agriculture with over 40%.

Funding institutions have also not shown much interests in tying down their finances as it is said mining often requires long term funding to begin yielding profits, as such mining activities are mostly left to artisanal and small scale miners (ASMs) also known as informal miners or illegal miners.

Other challenges hindering development in the sector include lack of infrastructure such as roads, the collapse of the nation’s rail system which could aid movement, poor technical know-how, policy instability and power challenges among several others which continue to hinder the development of the sector.

Another major challenge to the sector’s development is the policy somersaults the nation suffers from. It is believed that every new government comes with new policies as such policies created by previous transitions do not allow for continuous development of the sector.

As a way of addressing present day challenges in the mining sector stakeholders have called on the incoming government to take advantage of the existing opportunities the sector have.

Experts have agreed that the sector has the capacity to generate huge revenue for the government through tax and royalty payments, registration and payments of mineral titles among others, adding that “the sector has the potential to generate employment even more than the nation’s agricultural sector which presently accounts for highest employment generation.”

“It is also agreed that while the sector continues to suffer neglect from government, private individuals and illegal organisations are enriching themselves at the detriment of the government and the masses who suffer from the impact of mining in their communities.”

In the words of environmental activist and country director, Global Rights, Abiodun Baiyewu, the sector has the potential to generate revenue for the government but he notes that while it will generate in a lot of solid minerals, globally the price of solid minerals are dropping. Australia for example depends largely on iron and the price of iron just like that of hydro carbons has dropped.

“However, there is a lot of revenue that goes out of Nigeria every day from solid minerals, if we do not begin to harness these resources and know exactly how much is generated from them, government cannot levy or tax them adequately. Most of them are not taxed at all and nothing is paid for the mining of these minerals and then they go out of our borders every day.”

He notes that despite the fact that there is a lot of artisanal mining going on, “there are also lots of foreigners mining that we are not paying attention to, even the local miners we are not paying attention to them. A lot of people are getting rich from gold mining in Zamfara and lead in Ebonyi from which they build mansions in Dubai from wealth they get from Nigeria, so while their work is legitimate, it is not benefitting the larger society, instead it is depriving and of course there are opportunity cost on the larger society.

In her summation, she stressed the need to give proper attention to mining so as to ensure that minerals are not taken out of the country unaccounted for. She also called on the incoming government to empower NEITI as a means to curbing some of the excesses in the solid minerals sector and also as a means to monitor the nation’s mineral resources.

Also speaking with LEADERSHIP Sunday, President Miners Association of Nigeria (MAN) Alhaji Sani Shehu called on the incoming government to take mining seriously by funding it and giving it the needed publicity as is being done in the agricultural sector.

He assured, “that opening funding windows and creating such publicity will not only open funding windows for investors but will ensure that the sector becomes highly competitive and lucrative.”

From past experience there is no doubt that funding the sector, stabilisation of policies, provision of better infrastructures, the revival of the nation’s rail system as well as creating viable mineral processing zones will ensure that the nations minerals are protected, government revenue is assured and secured while thousands of jobs are created in the process.

In establishing a viable and alternative power through coal, the incoming government must begin to implement the many policies that have been laid for the development of the sector.

In the words of the president of Progressive Miners Association, Sunday Ekozin, “the sector does not need any more policies as it suffers from lack of implementation and not lack of policies.”

Also speaking, the Korean Ambassador to Nigeria Noh Kyu-duk says, “in view of the collapse of oil prices, it is important for the Nigerian government to exploit its solid minerals resources.”

“I understand that it is very important for the Nigeria government to exploit its solid mineral resources because at the moment, the falling down of oil prices is affecting the Nigerian economy in an erratic way, so it is better for the government to develop its solid mineral resources” he states when he paid a courtesy visit to the minister of Mines and Steel Development, Architect Musa Mohammed Sada in Abuja recently.

Now more than ever, the federal government must ensure that the solid minerals sector is repositioned to compensate for the fall in the price of oil, to supplement for the nation’s energy and power needs and become the job creation platform for the many unemployed Nigerian youths.

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