Energy and Global Warming News for January 22: Samsung signs $6.6 billion deal to build wind and solar power in Ontario; UAE’s Masdar, Spanish partner secure $760M for solar projects; FERC seeks better grid integration for renewables

PhotoSamsung Signs $6.6 Billion Deal to Build Wind and Solar Power in Ontario

In what’s being described as the largest deal of its kind in the world, Samsung C&T and the Ontario government signed a $6.6 billion investment deal Thursday under which the Korean industrial conglomerate will build 2,500 megawatts of wind and solar power in the province, as well as establish manufacturing facilities that will build the equipment.

The third player in the deal is Korea Electric Power Corp., the country’s largest utility, with 10,200 megawatts of generation capacity worldwide, including a new 1,200-megawatt wind farm in China.

The deal, initially proposed by Samsung a year ago, was spurred on by the province’s Green Energy Act, which was passed last year to provide generous incentives for clean-energy production. “This means Ontario is officially the place to be for green energy manufacturing in North America,” Ontario’s premier, Dalton McGuinty, said during a signing ceremony in Toronto.

Under the terms of the agreement, officials said, Samsung must build four manufacturing plants in Ontario, promising 16,000 direct and indirect jobs over the next five years. The energy generated will be enough for 580,000 homes.

“I think 16,000 jobs in this economy is pretty good,” said Mr. McGuinty, who has taken some criticism for selecting Samsung without an open tendering process. He rejected suggestions that Samsung’s presence would crowd out other suppliers.

The first phase will be built near Windsor, in southwestern Ontario where energy was once generated by a coal plant that is due to be decommissioned by 2014.

Korean trade officials said at the event that Samsung selected Ontario as a base of operations to make wind and solar equipment for customers not just in Ontario, but across North America.

Ontario’s green energy laws include domestic content provisions that require some of the equipment to be made in Ontario. It also gives the province a leg up in the race to supply wind and solar equipment to the rapidly transforming American electricity sector, Mr. McGuinty said. “If you ask around state capitals in the U.S., they would be secretly asking themselves why they didn’t do it first.”

Quebec adopted similar domestic content rules for its own wind sector, which is largely based in the Gaspe region on the south shore of the St. Lawrence River.

Samsung is a relative newcomer to the green energy business and says it is using expertise from its other heavy industry divisions, including its shipbuilding group, to manufacture wind turbines.

And it is not the only Korean firm pushing into the North American green energy market. Last year, Hyundai Heavy Industries moved into wind turbine manufacturing and has also been pushing to make inroads into the United States.

UAE’s Masdar, Spanish partner secure $760M for solar projects

The United Arab Emirates’ Masdar initiative and a Spanish partner have secured $760 million to build two concentrated solar power arrays, capable of producing 100 megawatts collectively, in southern Spain, officials said today.

Torresol Energy, a joint venture between Masdar and the Spanish engineering firm Sener Group, secured the project finance loans from seven Spanish companies, including Caja Madrid and Banco Santander SA. Torresol officials broke ground on the two 50-megawatt projects in Spain’s Andalucia region last March and aim to finish construction next year.

Both plants, dubbed Valle 1 and Valle 2, will use 512,000 square meters of parabolic troughs to concentrate sunlight. The heat energy will be stored in molten salt and used to create steam for greenhouse gas-free electricity production, according to project officials.

“A significant feature of these plants will be their ability to produce electricity at night and at times of poor sunlight, which is obviously an important consideration for consumers who require and demand uninterrupted electricity supplies,” Torresol Chairman Enrique Sendagorta said in a written statement.

Torresol will use a similar energy storage system at its Gemasolar project near Seville. The 17-megawatt project, slated for completion next spring, will use a field of heliostats to concentrate sunlight on a central tower.

The three concentrated solar power projects constitute a $1.4 billion capital investment, said Pilar Garcia, a Torresol spokeswoman.

Torresol aims to build additional renewable energy projects in the Middle East, the United States, North Africa and southern Europe, she noted, but the Madrid-based company has no plans to build a concentrated solar power project as part of the ambitious Masdar “eco-city” that is taking form in Abu Dhabi. A 10-megawatt photovoltaic array is already generating power for the walled city — the centerpiece of an ambitious renewable energy initiative by UAE’s state-owned Mubadala Development Co.

When completed later this decade, Masdar City will be the home of about 50,000 residents, a research university, a clean-technology fund and offices for dozens of global corporations — all on just 3.7 square miles of land (Greenwire, June 28, 2007).

In addition to Banco Santander and Caja Madrid, financiers of Torresol’s Valle projects included La Caixa, BBVA, Instituto de Cr©dito Oficial, Banco Espa±ol de Cr©dito and Banco Popular Espa±ol.

FERC seeks better grid integration for renewables

Renewable energy is popular across the political spectrum, but integrating wind, solar and other “variable” sources into the power grid presents thorny problems for regulators.

The Federal Energy Regulatory Commission on Thursday said it’s taking a “fresh look” at ways to connect these sources to the grid as fast as possible without compromising reliability. The commission is issuing a notice that seeks public comment on the matter.

Renewables are heralded for their absence of greenhouse gas emissions but their intermittent nature – the wind doesn’t always blow – and other characteristics mean regulators need to employ some fresh thinking to manage their growth, FERC officials say.

“It is important that the Commission examine the most efficient ways to effectively integrate these resources into the electric grid, while maintaining reliability and operational stability. We want to examine whether existing rules, regulations, tariffs or practices within the Commission’s jurisdiction hinder such efficient integration,” FERC Chairman Jon Wellinghoff said in a prepared statement.

The FERC notice drew a cheer from the solar industry’s main trade group.

“Creating standards and clarifying issues surrounding the integration of renewable resources like solar will accelerate the development of utility-scale solar projects, which in turn will create jobs sooner and spur more investment,” said Rhone Resch, CEO of the Solar Energy Industries Association.

India May Start Renewable-Energy Credits Trade in May

India may let power companies start trading renewable-energy credits in May in a push to create a multibillion-dollar market to encourage reductions in greenhouse-gas emissions.

India is pressing ahead with its own efforts to fight climate change after last month’s Copenhagen talks failed to reach a new global climate treaty. The move puts the world’s fourth-largest emitter ahead of China and other developing nations in creating a domestic emissions-trading market to boost investment in solar, wind and other clean-energy projects.

“This will become one of the most progressive regimes as far as renewable energy is concerned,” said Vinod Kala, managing director of Emergent Ventures India, a New Delhi-based consulting company that estimates trade in renewable energy credits could rise to as much as $10 billion by 2020.

“By April or May, we should have the Renewable Energy Certificate mechanism in place,” Deo said.

The plan would require power distributors including billionaire Anil Ambani’s Reliance Infrastructure Ltd, Tata Power Co. and large-scale consumers to ensure a portion of the electricity they carry comes from renewable sources.

If their supply of clean energy falls short, companies must buy certificates from others with surpluses, an incentive for renewable-energy production and a more stable market. Similar rules exist in the U.K. and some U.S. and Australian states.

Electricity sector could reduce emissions 18% by 2030 — study

The electricity sector could shave up to 18 percent off its energy use and carbon dioxide emissions by 2030 by aggressively embracing smart-grid technologies, according to a new analysis.

Smart grid-related savings would come from a number of factors, most significantly from a “conservation effect” as consumers incorporate feedback on their energy use, the study found. Additional factors include the use of power diagnostics to tune homes and smaller commercial buildings and increased use of wind and solar generation.

“The magnitude of these reductions suggests that, while a smart grid is not the primary mechanism for achieving aggressive national goals for energy and carbon savings, it is capable of providing a very substantial contribution to the goals for the electricity sector,” the authors found.

Led by Rob Pratt, a researcher with Pacific Northwest National Laboratory and leader of the lab’s Energy Systems Transformation Initiative, the study does not aim to assess the environmental impacts of smart-grid technologies or argue their cost-effectiveness, the report notes.

Rather, it assesses the energy and CO2 savings that might accrue from a group of technologies that are typically justified because they promise to improve the reliability and efficient operation of the power system.

Based on published research studies and new analyses, the study identified nine mechanisms by which a smart grid can reduce energy use in the electricity sector.

A key savings stems from “demand response” — or more simply, from conservation — that arises in homes and small businesses when smart-grid technologies make usage data available. The study estimated demand response could save 6 percent of those buildings’ energy use, which amounts to 3 percent of electricity overall.

Another chunk of savings, about 1.5 percent, can come from better insight into the breakdown of electric load at a site. New data mining capabilities are an enabling technology, the authors found, that can allow for more targeted spending on particularly beneficial upgrades.

The authors attributed another 3 percent savings to support for electric and plug-in hybrid vehicles. Smart charging infrastructure is a central component of new vehicle technology plans that hinge on charging cars during off-peak hours when electricity is cheaper and less carbon intensive.

The analysis is based on a full availability of smart-grid technologies by 2030.

In a side note, the authors point out that for all the savings potential in smart grid technologies, they will also slightly increase electric loads as electric substations get new computer servers and communication capabilities are built into a host of thermostats, refrigerators, dryers and the like.

“While the magnitude of this increase is small and may not be considered important,” the authors note, “it does point to the need for technology developers to minimize the increased loads of smart grid technologies.”

California OKs $350 million in rebates for installing solar water heaters

Utility regulators have approved $350 million in rebates to encourage Californians to install water-heating systems powered by solar energy.

The state Public Utilities Commission on Thursday established the California Solar Initiative Thermal Program, which will be funded using $250 million to replace natural-gas-powered water heaters, with $25 million set aside for low-income customers. An additional $100.8 million will be used to swap out water heaters powered by electricity.

The rebates could reduce the cost of a solar water heater by 15% to 25%, industry experts said. The federal government also offers a 30% tax credit.

The program could result in systems that displace 585 million therms of natural gas, or the equivalent of placing a solar water heater at 200,000 single-family homes, according to the utilities commission. It could also lead to systems that displace 275.7 million kilowatt-hours of electricity a year.

Those who install solar water heaters were ecstatic. At Inc., a manufacturer and installer in Carmichael, Calif., employees had a celebratory toast when they heard the news.

The last year was “absolutely dismal,” President Al C. Rich said. The company sold about a dozen heating systems last year compared with 50 the year before. In the 1980s and 1990s, firms like his were regularly installing 10 systems a week, he said.

The new initiative is a “tipping point” to entice customers, Rich said.

“I finally see in the industry things coming together,” he said. “These heaters have been the low-hanging fruit in terms of bang for the buck, but we’ve been overlooked. Now, we’re finally getting some really positive incentives.”

Customers of Edison International’s Southern California Edison utility who displace their electric water heater with a solar-powered system will be eligible for a rebate. Sempra Energy’s Southern California Gas Co. will offer the rebate to ratepayers who replace a natural-gas water heater. PG&E Corp.’s Pacific Gas & Electric Co. and Sempra Energy’s San Diego Gas & Electric Co. will offer the deal to ratepayers whose solar water heaters displace either electric or natural gas use.

Solar water heaters, which are usually placed on rooftops, absorb the sun’s energy to warm water, which is then stored in a water tank, according to Environment California. The advocacy group claims that the new rebate could mean more than 3,000 new jobs, a 5% reduction in natural-gas demand and a 35% drop in wholesale natural-gas prices.

Customers replacing a residential natural-gas water heater can receive rebates of up to $12.82 a therm, or $1,500 overall. Forty percent of those rebates will go to single-family homes, while the rest is reserved for commercial and multifamily systems.

Chu Defends U.N. Climate Science, Admin Efforts on Nuclear Waste

Energy Secretary Steven Chu today dismissed accusations of fraud in climate science generated by the release last year of hacked e-mails between researchers, saying e-mails showed “warts and bumps” in the scientific process.

Chu told a Senate panel there are “mountains” of evidence that climate change is real and the Energy Department will continue to rely on the U.N. Intergovernmental Panel on Climate Change, which critics say has been undermined by the so-called “Climategate” e-mails.

“That’s a little snippet out of all the things that have shown the climate is changing,” Chu said of the e-mails. “There are always little warts and bumps as science goes on.”

Chu was responding to Sen. John Barrasso (R-Wyo.), who had pressed him for his views about the reliability of the U.N. climate science during an Energy and Natural Resources Committee hearing.

Barasso was citing accusations of scientific fraud spurred by hacked e-mails released late last year from scientists at the Climatic Research Unit at the University of East Anglia in the United Kingdom. Critics say the e-mails show that scientists were colluding to subvert the peer-review process to further their belief that the climate is changing.

Supportive scientists and politicians have largely taken the same stance as Chu, saying it does not undercut years of research on rising temperatures, expanding seas and precipitation changes.

The Senate hearing was focused on research and development spending, and much of the questioning by Republican senators focused on why DOE isn’t doing more to promote nuclear energy. One lawmaker accusing him of “slow-walking” the process.

Supporters of expanded nuclear are growing impatient with Chu about the time it is taking to appoint members to a planned blue-ribbon commission to study nuclear waste fuel policy options. But he has given no firm dates.

Sen. Bob Corker (R-Tenn.) said the Obama administration is too focused on more exotic technologies, like solar and biofuels generated from crop waste.

“You’re slow-walking things that are proven, and wanting to spend lots of money on things that are unproven.” Corker said. “It makes me less trustful of the department.”

Chu said establishing the blue-ribbon panel involves “complicated issues,” but he declined to explain what those are.

“I can assure you I am not slow-walking this. I’m pushing it as hard as I can,” Chu said. “I don’t want to go into the details of why it’s taking so long.”

The closest Chu got to explaining the delay was saying that he wants to maintain his credibility as a scientist.

The Obama administration supports expansion of nuclear energy. But one member of the Senate’s Democratic Caucus questioned placing an emphasis on nuclear energy.

“This country has put more money into nuclear fuel than any other fuel,” said Sen. Bernie Sanders (I-Vt.). “I’d like to see volunteers, maybe Kentucky or Tennessee would volunteer, for places to store all that [nuclear] waste. I usually don’t see a lot of hands going up.”

3 Responses to Energy and Global Warming News for January 22: Samsung signs $6.6 billion deal to build wind and solar power in Ontario; UAE’s Masdar, Spanish partner secure $760M for solar projects; FERC seeks better grid integration for renewables

  1. Sergi Melzar says:

    That is 375,000 dollars per job.
    Of course that is 11,000 dollars per home which homes also now have electric. This of course doesn’t mention the cost of the gathering grid. Canadia has a high severence tax on oil. They can pay for this by reason of producing a lot of oil from the sands and the new pipeline to Cushing Oklahoma.

    When oil fell 1 year ago, Alberta dropped it’s peak royalty rate from 25% to a low of 5%. to save jobs. So the pipe line will run 450 bpd and gather 2 million a day in royalties. It will take 10 years crude from tar sands to pay for the windmills. Everybody wins.

  2. Sergi Melzar says:

    That is 450,000 bpd day pipeline.

  3. Leif says:

    Brian C-S, #3: You have not been paying attention! Mitigation and sustainable energy will improve the economy more than retaining the status quo. Renewable retain money and jobs while fossil fuels export both and we pay interest on top of that for ever more. Use your head.