Weekly Clean Energy Roundup:October 27, 2004

News and Events

• President Bush Signs New Energy Tax Incentives Into Law
• GE Energy Receives $1.3 Billion in U.S. Wind Turbine Orders
• Connecticut Clean Energy Fund to Jump-Start Renewable Projects
• BP Solar to Boost U.S. Production of Solar Cells and Modules
• New BLM Policy Encourages Solar Power on Public Lands
• Schwarzenegger Opens Hydrogen Fueling Station at L.A. Airport

Site News

• EPA Launches Heat Island Effect Web Site

Energy Connections

• IEA: World Energy Demand May Increase 59 Percent by 2030

News and Events

President Bush Signs New Energy Tax Incentives Into Law

President Bush signed H.R. 4520, the “American Jobs Creation Act of 2004,” into law on Friday. The new law creates and extends a number of energy-related tax credits, including an expansion of the renewable energy production tax credit. This credit formerly applied only to wind energy and some biomass energy projects, but Section 710 of the law now expands the credit to a wide range of biomass, geothermal, and solar energy projects, as well as hydropower produced from small irrigation projects. The tax credit applies to facilities placed in service before the end of next year.

The bill’s Title III also extends the tax credit for ethanol through 2010 and creates a new tax credit for biodiesel, effective through 2006. It also removes a disincentive for ethanol and biodiesel production by eliminating any impact on the Highway Trust Fund caused by the tax credits.

Section 701 of the law places the U.S. Environmental Protection Agency (EPA) in charge of a demonstration program to provide up to $2 billion in tax-exempt financing to green building and sustainable design projects on so-called “brownfields”?abandoned industrial sites. The EPA’s aggregate goal for the program will be to reduce electric consumption from traditional sources by 150 megawatts, reduce daily U.S. sulfur dioxide emissions by 10 tons, expand the domestic solar photovoltaic market by 75 percent (compared to the market growth from 2001 to 2002), and generate at least 25 megawatts of power from fuel cells. The projects must be partly supported by state or local governments and must be nominated by state or local governments within the next six months.

See the White House announcement on the bill signing, or go directly to the full text of the law. The new law was greeted with enthusiasm by the National Ethanol Vehicle Coalition; the Renewable Fuels Association, which issued press releases on October 10th and October 22; and the National Biodiesel Board, which issued press releases on October 11th (PDF 35 KB) and October 22nd (PDF 35 KB).

GE Energy Receives $1.3 Billion in U.S. Wind Turbine Orders

GE Energy is experiencing a surge in U.S. wind turbine sales, having secured contracts to supply more than 750 megawatts of wind turbine capacity while receiving commitments to order another 750 megawatts. The total value of these orders and commitments is $1.3 billion, according to the company. GE Energy credits the recent extension of the renewable energy production tax credit (PTC), which provides a credit of 1.8 cents per kilowatt-hour of wind power, adjusted annually for inflation. GE Energy will supply its 1.5-megawatt wind turbines to new projects in California, Idaho, Iowa, Minnesota, Oklahoma, Oregon, and Texas. See the GE Energy press release.

Among the many new wind energy projects now under development is a 114-megawatt wind power project in Texas. FPL Energy announced last week that it will build the Callahan Divide Wind Energy Center in Taylor County, about 12 miles southwest of Abilene. The company will erect 76 1.5-megawatt wind turbines at the site by early next year. See the FPL Energy press release.

A recent study by the Renewable Energy Policy Project (REPP) found that wind power has economic benefits for much of the country. According to REPP, some 90 companies in 25 states currently manufacture wind turbine components, and more than 16,000 companies in all 50 states have the technical potential to enter the wind turbine market. Examining the potential impacts of expanding the U.S. wind power capacity to 50,000 megawatts?a roughly eight-fold expansion?the REPP study found it could create 150,000 manufacturing jobs nationwide. See the press release from the American Wind Energy Association (AWEA), or go directly to the REPP report (PDF 1.7 MB). Download Acrobat Reader.

Connecticut Clean Energy Fund to Jump-Start Renewable Projects

The Connecticut Clean Energy Fund (CCEF) is seeking expressions of interest from renewable energy developers for up to 100 megawatts of new renewable energy capacity. Called the “Project 100” initiative, the goal is to support state legislation that requires the state’s electric distribution companies?Connecticut Light and Power and United Illuminating?to buy power from renewable energy projects totaling 100 megawatts in capacity by July 1, 2007. Since that legislation also requires the projects to be funded by the CCEF, the fund needs to work quickly to get projects underway. CCEF will release a draft request for proposals at its first “Project 100” forum, currently planned for mid-November. See the CCEF press release, and see further details on the CCEF home page.

DOE’s Lawrence Berkeley National Laboratory (LBNL) has been producing a series of case studies on the impact of such state clean energy funds on renewable energy development. A study released in mid-October examined utility-scale projects supported by the Clean Energy States Alliance and found that these state funds have thus far obligated $345 million in support of 2,288 megawatts of new renewable energy capacity, with 707 megawatts already on-line. See the full series of LBNL case studies, as well as the Clean Energy States Alliance Web site.

BP Solar to Boost U.S. Production of Solar Cells and Modules

BP Solar announced last week that it will more than double its capability to produce solar cells and modules at its Frederick, Maryland, facility. The company will invest $25 million in the plant expansion, which will begin before year-end and be completed by the end of 2005. BP Solar will also increase employment at the plant by 28 percent. The expansion is part of BP Solar’s plan to increase its global production capacity from 90 megawatts of solar cells per year to 200 megawatts per year by the end of 2006.

BP Solar will also grow the U.S. market for solar energy systems by expanding its efforts to offer solar power through The Home Depot. The two companies are currently offering complete solar power systems for homes at selected Home Depot stores in southern California, but plan to expand the program to another 40 stores in that region in November. In 2005, the companies will expand the program to stores in places such as northern California, New Jersey, New York, and Hawaii.

BP has also become a major sponsor of DOE’s 2005 Solar Decathlon, in which teams of students from 19 colleges and universities will construct solar-powered homes on the National Mall in Washington, D.C., and compete in 10 contests over the course of 10 days. In addition to BP, the Solar Decathlon is sponsored by DOE in partnership with its National Renewable Energy Laboratory, The Home Depot, the National Association of Home Builders, and the American Institute of Architects. See the BP Solar press release and the Solar Decathlon Web site.

New BLM Policy Encourages Solar Power on Public Lands

The Bureau of Land Management (BLM) announced last week a new land-management policy to encourage the development of solar energy resources on public lands. The new Solar Energy Development Policy establishes a framework for land managers to use in processing right-of-way applications for solar energy development projects on public lands administered by the BLM. The policy builds on a 2003 report prepared by DOE and BLM, which identified the top 25 BLM areas with high solar energy development potential. The policy also encourages the installation of renewable energy systems at BLM facilities. See the BLM press release and the Solar Energy Development Policy.

Schwarzenegger Opens Hydrogen Fueling Station at L.A. Airport

California Governor Arnold Schwarzenegger unveiled last week the state’s first hydrogen fueling station designed for retail sales. Located at the Los Angeles International Airport, the BP station was developed in partnership with Praxair, South Coast Air Quality Management District, and Los Angeles World Airport as part of DOE’s fuel cell vehicle and infrastructure validation effort. According to BP, the new station has been designed to run like a public retail station in order to help BP develop such stations in the future. See the BP press release.

The new station will normally provide hydrogen for five fuel cell cars provided by DaimlerChrysler, but at its opening, the station fueled up a one-of-a-kind vehicle, the governor’s hydrogen-fueled Hummer. General Motors Corporation (GM) built the vehicle, dubbed the H2H, and GM is sharing the vehicle with the governor’s office. The H2H burns hydrogen in an internal combustion engine, drawing on three high-pressure carbon fiber tanks that carry a total of 5.5 kilograms (12 pounds) of hydrogen. According to the GM press release, the H2H is expected to travel 60 miles between fill-ups, or about 11 miles per kilogram of hydrogen?the energy equivalent to a fuel economy of 11 miles per gallon of gasoline. See the governor’s press release and the GM press releases on the H2H and its design and technology highlights.

Site News

EPA Launches Heat Island Effect Web Site

The Environmental Protection Agency (EPA) recently launched a Hea
t Island Effect Web site that explains the phenomenon of heat islands, in which urban and suburban areas experience higher temperatures than surrounding rural areas. The site also provides energy-efficient measures to lessen heat island effects. See the Heat Island Effect Web site.

Energy Connections

IEA: World Energy Demand May Increase 59 Percent by 2030

The world may consume 59 percent more energy in 2030 than it does now, with fossil fuels providing 85 percent of the increase, according to the “World Energy Outlook 2004,” released yesterday by the International Energy Agency (IEA). Under the IEA’s “Reference Scenario,” two-thirds of the new energy demand will be in the developing world, with China and India dominating the growth in demand. As a result, oil production will increase by 48 percent, coal production will increase by 59 percent, and natural gas production will double. Meanwhile, electricity generated from renewable energy will increase by a factor of six, mostly due to increases in wind and biomass power. Since the world’s electrical demand will double in that timeframe, the percentage of power generated from renewable energy will increase from 2 percent today to 6 percent in 2030.

However, the IEA also sees an alternate possibility in which countries around the world pursue a more sustainable energy path. In the IEA’s “World Alternative Policy Scenario,” investment capital is shifted more toward demand-side measures, causing world energy use to increase only 43 percent by 2030. As a result, oil production increases by 32 percent, coal production only increases by 20 percent, and natural gas production increases by 80 percent. The alternative scenario yields energy-related carbon dioxide emissions that are 16 percent lower than in the reference scenario. Energy-efficient vehicles, appliances, lighting, and industries account for half of the savings, with the other half provided by a greater use of both renewable energy and nuclear power. See the IEA press release and executive summary (PDF 94 KB).

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