7 Responses to Energy and Global Warming News for November 9: Can offshore winds spin in U.S. market? Exelon boss thinks Senate will act on climate bill by spring; Climate bill will save households money — ACEEE
Middle Eastern oil is one energy dependency. Another, looming in the future, could be a growing array of wind turbines, situated along the Eastern Seaboard, manufactured by European companies and feeding electricity to nearby American cities. That’s what government and industry experts are trying to avoid — a new addiction.
The effort here to roll out an offshore wind industry is accelerating, but major gaps are still stopping turbine builders from opening U.S. facilities that could supply East Coast states with homemade blades, towers and nacelles. Experts expressed confidence in the United States’ ability to establish a strong offshore wind manufacturing sector, and also anxiety about the steps that aren’t being taken to get there.
The United States has yet to plant its first turbines in the seafloor, while Europe widens its lead, adding 1-megawatt every day on average, according to its industry group. Europe’s offshore winds now produce a total of 1,471 megawatts, the amount of electricity produced by a very large coal-fired power plant.
“If we don’t get on the ball and do it, the Europeans are going to do it,” Bob Thresher, a wind power expert with the National Renewable Energy Laboratory, said of turbine manufacturing. “They’ll gain all the experience, and they get the privilege of selling us all their equipment. So sitting on our butts and doing nothing is just gonna cost us.”
To people like Thresher, the United States needs to hurry up and allow someone to build the first wind facility in the ocean. That, in all likelihood, would be Cape Wind, a 130-turbine project proposed 5 miles off the coast of Massachusetts. It has been stuck in regulatory quicksand for eight years — a signal that has not helped to attract manufacturers or financing sources.
“They need to see there’s a critical mass of megawatts that are sort of in the pipeline or committed,” Greg Watson, the top renewable energy advisor to Massachusetts Gov. Deval Patrick, said of parts builders. “You’re not going to make a commitment to build a manufacturing facility unless you have some sense that there’s going to be a workload, or an anticipated number of projects.”
“We’ve had some frank discussions” with manufacturers, he added. “They might give you a quote that they need to see five or six more Cape Winds in the pipeline.”
Others say the bar is higher. Jim Lanard, managing director of Deepwater Wind, which has three offshore projects proposed in Rhode Island and New Jersey, said manufacturers want to see a decade-long outlook promising that 1,000 turbines will be installed.
“Instead of sending our dollars to countries that export oil, we’re now going to send our dollars to countries that export offshore wind equipment,” Lanard warns. “It’s billions of dollars being sent overseas. That’s thousands of jobs.”
Exelon Corp. Chief Executive John Rowe, speaking last week after Senate action on a cap-and-trade bill aimed at curbing greenhouse gas emissions, sounded upbeat as ever.
Republicans on the Environment and Public Works Committee boycotted the discussion, prompting Committee Chair Sen. Barbara Boxer (D-Calif.) to push through the so-called Kerry-Boxer bill on an 11-1 vote without a single Republican present. Democrats from Southern and coal-producing states got no chance to amend the measure, as they wanted, and the tactics alienated GOP moderates.
Speaking before the Economic Club of Chicago, however, Rowe delivered the same sunny talk as ever, saying a consensus has emerged for a cap on carbon, and a market mechanism for regulating it. “At that level of generality, there is strong support for a bill,” he said. “There is a very good chance we will see action either this fall or next spring.”
As the nation’s top nuclear-power producer, Exelon has a lot to gain from cap-and-trade. But some stalwart supporters are starting to worry, as here, and its enemies here smell blood. Even the phrase “cap-and-trade” is being viewed as a political liability.
Rowe is undaunted: “Most other solutions are simply more expensive for the economy than cap-and-trade,” he said. “You have to put a cap on it, you have to put a price on it, and you get the marketplace to work.”
Or — as appears increasingly likely — the Environmental Protection Agency could be writing the rules for controlling emissions. And if that happens, forget about the “marketplace” working.
According to a report released last month by the American Council for an Energy-Efficient Economy, climate legislation won’t just have a low cost. Once the energy efficiency programs kick in, it says, the average household would actually save more than $300 a year, and the economy would gain 1 million net jobs.
In June, the Congressional Budget Office concluded that House-passed climate legislation, H.R. 2454, would cost the average household $175 a year — a cost the administration likened to buying a postage stamp a day.
Skip Laitner, senior economist at ACEEE and the author of its October study, echoed Werbos’ sentiment. He said that if climate legislation only raises energy prices and consumers don’t respond by making more efficient choices, then the economy will suffer.
Laitner and other efficiency boosters, however, have said most of the cost analyses of climate legislation have only focused on the cap-and-trade policy, not on the host of other programs, like energy efficiency, that the legislation includes.
When the price of electricity goes up, consumers and businesses can make choices to use less energy, Laitner said at the Capitol Hill briefing. The more a climate bill incentivizes these choices — through utility programs and building codes, for example — the less the bill costs, and the more jobs result from building in that efficiency.
Forty-two projects related to energy-saving and environmental protection were signed between China and Japan on Sunday.
The effort to deepen cooperation in tackling environmental change and the economic downturn comes ahead of the climate change summit in Copenhagen, Denmark, next month.
Vice-Premier Li Keqiang called for cooperation on key projects and strengthening technological cooperation at the fourth Sino-Japan Energy-saving and Environment Protection Forum in Beijing Sunday.
“Japan has a lot of experience in solving energy and environmental issues, while China has put years of effort into forming its energy saving industry. China’s potential market and Japan’s technology complement each other,” said Xie Zhenhua, deputy minister of the National Development and Reform Commission.
The two sides have worked together in building recycling eco-cities and personnel training, Xie said. About 300 Chinese experts were sent to Japan for training, while more than 300 Japanese experts came to China to help nurture local talent.
The Chinese central government has arranged 58.1 billion yuan ($8.5 billion) to support 10 major energy-saving and emission reduction projects, including sewage treatment and industrial pollution control. China will also help qualified environmental-friendly companies expand their financing channels, Xie said.
Masayuki Naoshima, Japan’s minister of economy and trade, said in the near future Japan can assist China with water treatment and carbon emissions control.
China pledged to “strengthen efforts in intellectual property protection” to create a healthy environment for technology transfers, said Chen Jian, deputy minister of commerce.
The American Petroleum Institute has hired Martin Durbin, a top lobbyist for the American Chemistry Council, to be the oil industry trade group’s executive vice president of government affairs.
Durbin, who has worked for Democratic lawmakers, will have his hands full as the industry aims to influence — and in some cases thwart — congressional and White House energy initiatives.
Durbin — the nephew of Sen. Richard Durbin of Illinois, the chamber’s No. 2 Democrat — will join API next month.
“I know he will proudly represent the interests of the thousands of companies and the millions of employees in the oil and natural gas industry, and stand up for policies that promote jobs and affordable energy,” API President Jack Gerard said in a statement yesterday. Gerard, who once ran the chemical industry group, worked with Durbin there.
API also issued a statement from Durbin: “I will work hard to ensure that policymakers in both houses and parties understand the industry’s perspective on key policy issues, and that they appreciate the industry’s many contributions to America’s economy and society.”
Durbin is coming to API as lawmakers are considering climate and energy legislation that will have major implications for the institute’s members. The group opposes the major House and Senate cap-and-trade bills, alleging they would raise fuel prices and cost jobs.
Refiners in particular allege the plans provide an unfairly small number of free emissions allowances to the sector and warn that they would create a competitive advantage for foreign refineries and thereby increase reliance on imported fuels.
At the same time, the group is fighting White House proposals to eliminate tax incentives for domestic production. The industry is also pushing the Interior Department to offer more offshore areas for leasing following the lapse of decades-long outer continental shelf leasing bans last year.
China offered African governments a multibillion-dollar package of financial and technical assistance on Sunday, stepping up a courtship that already has gained Beijing wide access to oil and minerals across perhaps the most resource-rich continent in the world.
Prime Minister Wen Jiabao pledged to grant African countries $10 billion in low-interest development loans over the next three years, to establish a $1 billion loan program for small and medium-size businesses, and to forgive the remaining debt on certain interest-free loans that China previously granted less-developed African nations.
Besides the financial assistance, Mr. Wen also promised to form a partnership to address climate change in Africa, including the building of 100 clean-energy projects across the continent. Beijing will also remove tariffs on most exports to China from the least-developed African nations that do not have diplomatic relations with Taiwan, and sponsor an array of other programs in health, education, culture and agriculture.
The gestures are likely to further cement China’s good relations with many African nations, and may help address rising concern in some quarters that China is merely replacing Europe as a colonial power.
China’s focus on extracting oil and minerals from Africa has drawn some criticism from African scholars, and labor and safety conditions at some Chinese-run mines and smelters have set off outcries by African workers. Some critics say that the flood of low-cost Chinese goods into African cities has displaced products once made by local workers.
Britain’s claim to be a world leader in green energy investment has been called into question by an authoritative new study that will embarrass ministers as they prepare to launch an important climate change initiative tomorrow.
A report from Deutsche Bank says that the UK does not have the right climate change strategy to attract international investment and is lagging behind other countries, such as Germany, France and China.
Britain’s energy strategy lacks the level of transparency and certainty required to encourage investment, according to Deutsche Bank’s study on the best places to do business. It comes as ministers prepare to launch six draft national policy statements on energy and climate change policies tomorrow.
“What investors want is transparency, longevity and certainty – TLC – in policy regimes to mobilise capital,” said Kevin Parker, global head of Deutsche Bank’s asset management division, which is based in New York.
“Many major emitters such as the US and the UK do not have enough TLC in their policy frameworks. Our rankings show that China has a lower risk for climate change investors, as does Germany, but the research also shows that in order to avoid catastrophic climate change, they have demonstrated their ability to deliver scale.”
The Department of Energy and Climate Change said its host of new initiatives to streamline planning and ensure the building of new infrastructure, such as clean coal plants, is proof of its positive commitment to moving to a low-carbon economy.
“You will have seen [from] the recent announcement from RWE and E.ON about spending £15bn and creating thousands of jobs here in new nuclear plants that investment does seem to be coming,” said a DECC spokesman.
But Deutsche Bank says Japan and Australia are among the countries that represent lower risk profiles than the UK because they have more comprehensive and integrated government plans.