On a mountain top 80 miles northeast of Bangor, Maine, in country where houses and gravel pits are mere pinpricks on a map green with forest, Paul Gaynor is making stimulus work.
Gaynor, chief executive of First Wind, is using $40 million in federal funds to help build a wind farm that will produce enough power for 13,000 homes and has created 200 construction jobs.
Without stimulus, First Wind’s project — and most renewable energy projects across the country — may not have happened.
“To us, it’s been essential to get through the nuclear winter of financing ability,” Gaynor said, referring to the dark days of early 2009 right after the financial collapse. “The recovery act was the bridge that got us from a broken market to one where projects actually get done.”
Because of the way tax incentives worked prior to stimulus, few industries were more dependent on Wall Street profits than renewable energy.
Pre-stimulus, renewable energy developments were funded largely by big banks. As an incentive to expand clean, homegrown power, the government offered generous tax credits.
The credit wasn’t limited to just big banks, said Ethan Zindler, head of North American research at Bloomberg New Energy Finance, a firm that tracks renewable energy investments. But the banks had the money and understood the rules, so they were by far the biggest financiers.
But tax credits only work when you’re paying taxes. When Wall Street profits dried up and their tax bill fell, almost all funding for new renewable energy froze up.
“The market for financing large-scale power projects collapsed,” said Zindler. “Stimulus fixed that.”
Stimulus fixed it by changing the tax credit to an outright government grant worth roughly the same amount.
There is no limit to the amount that can be spent under the grant program, although it is set to expire at the end of this year. The government originally estimated it would cost taxpayers $5 billion.
The Energy Department said that from the start of the program in July though September, the last month for which data is available, over $1 billion has been paid to finance 32 projects nationwide.
Better Place, the closely watched start-up that hopes to create vast networks of charge spots to power electric cars, is set to receive a vote of confidence on Monday, in the form of $350 million in new venture capital.
Although Better Place will most likely require billions more in financing, this investment is an important step for the company and its chief, Shai Agassi, an Israeli-American software executive who founded the company in 2007.
“Better Place is a huge experiment in how you sell and fuel vehicles, and these investors are becoming convinced this will make money,” said Rod Lache, an analyst at Deutsche Bank. “It is a financial validation. Now we need to see technical validation and consumer validation.”
HSBC is leading the new round of financing, contributing $125 million in exchange for a 10 percent stake in Better Place. That gives Better Place a market value of $1.25 billion.
“This is a pretty big round,” Mr. Lache added. “I am impressed that they have succeeded in raising this amount of capital even before the business has started operating.”
Both Mr. Agassi and HSBC executives portrayed the investment as a business-based decision, rather than as an effort to enhance the bank’s green credentials.
Better Place is scheduled to make its commercial debut in 2011 in Israel and Denmark, but HSBC’s investment could ease doubts about its complicated “” and expensive “” answer to the longstanding chicken-and-egg problem of getting electric cars on the road without the infrastructure to support long-distance driving.
In addition to the $125 million from HSBC, $225 million will come from Morgan StanleyInvestment Management, Lazard Asset Management and Better Place’s original investors, which include Israeli companies and VantagePoint Venture Partners in Silicon Valley.
All together, Better Place has raised approximately $700 million, including an initial round of financing in 2008 that brought in $200 million. HSBC’s head of global capital financing, Kevin Adeson, will join Better Place’s board.
The new funds, Mr. Agassi said, will be devoted to research and development, completing the company’s infrastructure in Israel and Denmark, and eventually broadening its reach to include the United States, Australia and other countries in Europe.
Mr. Agassi has cast his company’s effort in moral terms, citing the threat of global warming and the need to find renewable sources of energy to replace fossil fuels….
Under Better Place’s plan, consumers would buy electric vehicles made by the big automakers but get the batteries from Better Place and pay a fee according to the distance they drive. The blueprint calls for thousands of conventional charge points, as well as switching stations where a robotic device could replace a battery in less time than it takes to fill a tank of gas.
These stations are needed because batteries have a range of only about 100 miles, or 160 kilometers, and recharging takes up to five hours. Changing batteries en route would make long journeys more convenient.
Hardware and software changes to the internal-combustion engine in cars can make it much more fuel-efficient.
New rules due soon from the Environmental Protection Agency governing greenhouse gas emissions and from the Department of Transportation on fuel economy will force the efficiency of cars, SUVs and pickups to rise 4.4 percent a year from 2012 through 2016 and probably more in later years.
Technologies such as direct gasoline injection, variable valve timing and cylinder deactivation can reduce the major sources of energy loss in engines: waste heat and engine friction.
Methane ranks only behind water vapor and carbon dioxide among principal greenhouse gases, in terms of its abundance and global warming potential. Even though it is less abundant and has a shorter lifetime in the atmosphere than carbon dioxide, methane in the atmosphere accounts for nearly 20 percent of the heating effect of greenhouse gases compared with carbon dioxide’s 50 percent. And similar to CO2, methane in the atmosphere emanates from both anthropogenic and natural sources.
Scientists have a decent understanding of the extent of anthropogenic methane emissions from sources such as landfills, livestock and fossil-fuel production, which altogether account for 60 percent of the gas’s production. It has been tricky, however, to track its release from its major natural source””wetlands.
Wetlands are thought to be responsible for 70 percent of global atmospheric methane from natural sources””but not all wetlands are created equal. Water level, soil temperature, vegetation and topography all affect a wetland’s methane production, complicating estimates of emissions from specific areas.
To try and clarify these estimates, a group of researchers recently created a model to predict wetland methane emissions from different geographic regions using the two most important properties affecting these discharges: water level and soil temperature. The team developed a model, using satellite and weather data, to explain the relationship between these two wetland properties and methane emissions. Then the researchers applied the model to estimate how much of the gas is emitted from wetlands areas, such as those in the tropics.
At the heart of the approach are data from NASA’s twin GRACE satellites, which measure changes in Earth’s gravity. “The gravity measurements are incredibly useful in trying to look at methane emissions,” says Paul Palmer, a geoscientist at the University of Edinburgh in Scotland and one of the authors of a paper on the model, detailed in the January 15 Science.
Traditionally, gravity measurements have been used to determine variations in the extent of groundwater. In flooded areas, which include many tropical wetland areas such as in the Amazon and Congo, groundwater level can also be correlated with methane emissions. This is because methane-producing bacteria, known as methanogens, live in groundwater and can release methane directly into the atmosphere when water rises above soil.
In addition to the GRACE data as a measure of wetland water levels, Palmer and his colleagues used weather data from both the National Oceanic and Atmospheric Administration’s (NOAA) National Centers for Environmental Prediction and the National Center for Atmospheric Research as a proxy for soil temperature””the other important wetland property. The modeling focused on determining the relationships among the weather information, water levels (based on GRACE data) and atmospheric methane levels during 10-day periods from 2003 to 2007 for areas measuring 350 square kilometers square. Information about the methane came from the European Space Agency’s SCIAMACHY spectrographic satellite. Among other findings, the results showed that emissions increased by about 2 percent from 2003 to 2007, which Palmer says is important because tropical areas accounts for about 55 percent of worldwide wetland methane emissions.
The team’s model also confirmed a relationship that other scientists had suspected: In tropical regions where the temperature is fairly constant, approximations of water level fluctuations are a better indicator than surface temperature of methane emissions. At higher latitudes more than 30 degrees above or below the equator, however, the surface temperature is a more important determinant of methane wetland emissions.
“The real contribution is [the researchers] could actually find a relationship between these parameters and methane [in the atmosphere],” says John Melack, an Earth scientist and remote sensing specialist at the University of California, Santa Barbara. Although Melack was not involved in the research, he said he gave the authors feedback when they were writing the paper.
The model could stand some improvements to make it more useful for inferring wetland methane emissions, says Elaine Matthews, a physical scientist at the NASA Goddard Institute for Space Studies in New York City. According to Matthews, the authors made a “huge leap” in using GRACE satellite data. This information is only useful in flooded areas but, as Matthews points out, only about two thirds of the world’s wetlands are flooded at a given time. She suggests including data from a microwave-based satellite called the Special Sensor Microwave/Imager (SSM/I) developed at NASA Goddard in New York City , which detects water above the soil.
Although the model offers a new way to look at methane emissions from wetland areas, it does not necessarily point to solutions for regulating it””such as draining wetlands in flooded areas. “It’s difficult to argue for that because there are groups promoting [wetland] preservation,” says Changyong Cao, a satellite research scientist at NOAA’s National Environmental Satellite, Data and Information Service. Instead, models that try to map methane emissions could help scientists in turn make better models for understanding climate change.
Ever since Scott Brown won Ted Kennedy’s senate seat in Massachusetts, the mood has been darkening on clean energy reform (my own misguided optimism aside). Some of the bill’s staunch supporters, like Sen. Diane Fienstein, have come out and said that a climate bill won’t happen this year. But they shouldn’t give up so easily. Two recent polls, the first done by one of the most influential GOP strategists of the last couple decades, the second from one of Obama’s campaign advisers–both find that clean energy reform is supported by Americans.
Daniel J Weiss has an entire post on how GOP, Dem polls show climate and clean energy jobs legislation has strong bipartisan support and why this should be a powerful, politically winning message.
Weiss notes that Frank Lutz recently conducted a poll on Republican support for addressing climate change. Here’s what he found:
The push for adding energy provisions to the jobs bill continues.
A number of green technology investors and companies on Thursday called for inclusion of a so-called green bank in planned legislation aimed at stemming high unemployment.
Google Inc., the big venture capital firm Kleiner Perkins Caufield & Byers – which counts Al Gore among its partners – and others wrote to President Obama touting the “Clean Energy Deployment Administration.” The letter also went to House and Senate leaders from both parties.
The plan would create a new federal corporation that provides loans and other support for low-emissions energy projects and technologies.
Versions of the green bank are part of the big climate bill the House approved in June and a bipartisan energy bill the Senate Energy and Natural Resources Committee passed around the same time.
But with the fate of climate and energy legislation highly uncertain, various lawmakers and lobbyists want some provisions to migrate to the jobs bill. The effort comes at a time when Democrats nervous about the mid-term elections are making the economy their main focus.
The letter says including the green bank in the jobs bill would spur new employment fast and more broadly position the U.S. as a leader in “clean energy” technologies.
“We believe the availability of CEDA financing will help America’s emerging clean energy technology companies cross the so-called ‘valley of death’ between the invention of a technology and its commercial deployment, and thus substantially accelerate and increase private sector investment necessary to position the U.S. as the global clean energy leader,” states the letter also backed by other venture firms, the National Venture Capital Association, GE Energy Financial Services and others.
Rep. Chris Van Hollen (D-Md.), who is a member of the House Democratic leadership, last week called for including the green bank in the jobs bill in his own letter to Obama.
The letter from the venture capitalists yesterday drew applause from Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.).
“If enacted today, CEDA can create countless new jobs this year in new companies across the country by helping breakthrough clean energy technologies get introduced into U.S. markets and expanded as quickly as possible,” Bingaman said in a statement.
The green bank in the Senate bill differs from the House plan in several ways. The Senate version makes the bank an autonomous entity within the Energy Department, while the House plan creates a separate, stand-alone federal corporation.
Four of the world’s emerging economies, which account for 30% of global greenhouse gas emissions, Sunday said they will disclose their voluntary mitigation actions by Jan. 31 and called for developed countries to release $10 billion pledged for small developing nations to address climate change issues.
The decision was taken during a meeting of the climate ministers of the BASIC group of countries–Brazil, South Africa, India and China–which was held in New Delhi Sunday to discuss their joint strategy for the United Nations climate negotiations.
Pennsylvania becomes a regional leader in green technology with the approval of $9.2 million in funds for energy innovation, the governor said.
The Pennsylvania government approved the allocation of $9.2 million in grants and loans from an alternative energy investment fund.
The funds go toward the development and upgrade of biorefineries in the private sector.
A 13-megawatt biomass energy facility in Mt. Carmel Township in the east of the state becomes the first such facility in the region. Through a $4.98 million investment, the facility will generate enough energy to power roughly 20,000 homes.
A private citizen received a $16,782 loan to purchase a geothermal system to power a 1,600-square-foot residence.
Pennsylvania’s Democratic Gov. Ed Rendell said the move toward renewable energy resources is not only socially responsible, but also contributes to the economic well-being of his state.
“Moving to a green economy is essential for our future if we’re to be competitive globally,” he said. “Doing that work today provides a boost because it opens the door to new private investment and creates new employment opportunities.”
The European Union should stop wringing its hands after the disappointment of the Copenhagen climate talks and embark on practical policies that will begin to reduce carbon use, a senior BP PLC executive said Friday.
In what was billed by the company as an important speech in Brussels, BP’s chief executive of refining and marketing, Iain Conn, said that rather than focusing on the long-term objective of halving carbon usage by 2050″”an effort he called “polishing the diamond”"”the EU should take early material steps toward increasing energy efficiency and cutting carbon usage.