Energy and Global Warming News for January 26: General Motors to make its own electric motors in 2013; Coke introduces plant-based bottles

GM to make its own electric motors in 2013

General Motors Corp. is back in the electric motor business.

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The automaker said Tuesday that starting in 2013, it plans to build its own electric motors for hybrid and electric vehicles. GM has been getting electric motors for those vehicles from suppliers, but wants to make the motors in-house in order to lower costs and improve quality and reliability.

“We need to not only buy the parts, we need to really understand them,” said Pete Savagian, engineering director for hybrids and electric motors, in a conference call with reporters ahead of Tuesday’s announcement.

GM wouldn’t say where it will build the electric motors, but it scheduled a news conference Tuesday afternoon at its Baltimore Transmission plant in White Marsh, Md. The plant currently makes hybrid transmissions. GM said it will invest more than $246 million to build the electric motors. It wouldn’t say how many motors it will build.

This isn’t the first time GM has built electric motors. It built them for its EV1 electric car in the mid-1990s, and some of the engineers of that car worked on the new motors, Savagian said. Savagian said GM has been quietly developing a new electric motor since 2003, and will be the first U.S.-based automaker to manufacture its own.

GM-designed and built electric motors will debut in 2013 on rear-wheel-drive, two-mode hybrid vehicles, but eventually they could be placed in all-electric and fuel-cell cars.

Two-mode hybrids use a motor alongside a conventional engine to boost power and improve fuel-efficiency. Electric vehicles are powered solely by batteries and electric motors, while in fuel-cell vehicles, an electric motor is powered by a reaction between oxygen and hydrogen.

On traditional vehicles, gas fuels the engine and transmission, which power the wheels. On electric vehicles, batteries replace fuel and electric motors replace the engine and transmission.

Tom Stephens, GM’s vice chairman of global product operations, said using energy from the electric grid is the best way to cut emissions and reliance on oil in the short term.

“We do need to have the electrification of the automobile,” he said.

Coke introduces plant-based bottles

Coca-Cola Co. has introduced new bottles that are made partially from plants, a move the company hopes will reduce its carbon footprint and better its image with environmentalists.

The new beverage container, which has “the same weight, the same feel, the same chemistry and functions exactly the same way” as a regular plastic bottle, according to a Coke spokeswoman, is made of 70 percent petroleum-based materials and 30 percent sugar cane-based materials. Traditional bottles are made from polyethylene terephthalate, or PET, the production of which consumed 17 million barrels of oil in 2006.

The “plant bottle” debuted at the Copenhagen summit in December and will appear in Vancouver in time for the 2010 Winter Olympic Games next month. The company hopes to sell 2 billion drinks in the new bottles this year.

A Coke-funded study out of Imperial College London found production of a plant-based bottle has a 12 percent to 19 percent smaller carbon footprint than a regular bottle. But critics say the real impact comes from consumers not recycling. Just 27 percent of PET containers were recycled in the United States in 2008.

Other companies also are entering the environmentally friendly packaging race. PepsiCo Inc. recently introduced a compostable bag made from plants for SunChips, and Nestl© is reducing the amount of plastic used in its bottles.

But plant-based bottles have shorter shelf lives than PET bottles and do not hold carbonation as well, industry experts say.

“It just doesn’t keep the product protected the same way that the current bottles do,” said Wade Groetsch, president of Blue Lake Citrus LLC, a juice processor. “It’s definitely a tradeoff.”

Indonesia to kick off $1 bln green investment fund

Indonesia plans a $1 billion green investment fund this year to drive infrastructure developments that aid growth and help cut greenhouse gas emissions, a finance ministry official said on Tuesday.

Indonesia has promised to slash its emissions by at least 26 percent from business as usual levels by 2020 but recently re-elected President Susilo Bambang Yudhoyono has also vowed to boost economic growth to 7 percent or more by 2014.

At global climate talks in Copenhagen last month, Yudhoyono announced a plan to develop the Indonesia Green Investment Fund, which will catalyse infrastructure development that could speed economic growth, boost food and clean water production and also help cut emissions blamed for global warming.

Indonesia’s sovereign wealth fund the Government Investment Unit will put $100 million into the fund and a further $900 million will come from foreign governments including Norway and Australia, plus institutional investors, said Edward Gustely, a senior adviser to the Ministry of Finance.

“We’re in the initial stages but the target is to have this fund operational within this year,” Gustely told Reuters, adding the fund would rival Brazil’s Amazon Fund in size and scope. “There’s no reason why this can’t, in the next five years, scale to $5 billion or more.”

Brazil launched its Amazon Fund last year to promote sustainable development and scientific research in the world’s largest rain forest, with donations from European countries and the first projects unveiled last month.

Indonesia last year became the first country to launch a legal framework for a U.N.-backed scheme called Reducing Emissions from Deforestation and Degradation, allowing polluters to earn tradeable carbon credits by paying developing nations not to chop down their trees.

Cleaning Up In China

Energy stocks were key to China’s stock market recovery last year, helping to lead the market to recover from its bottom. For the year as a whole alternative energy shares vaulted more than 150% compared with a 74% rise in the Shanghai A-share market. This year, with stocks valuations already above 40 times earnings among much of the group, similar gains will be harder to come by.

Yet clean energy and natural gas companies still look promising. “Government support on clean energy and natural gas reform will create a booming cycle for clean energy and gas operators,” emerging markets brokerage CLSA noted in a report this month.

Among the beneficiaries: Companies that distribute gas in urban areas. The government is looking to increase natural gas to 9% of China’s energy mix by 2016 from 3.5% today. Part of that will mean that city gas distribution companies will be expanding, in part with government encouragement.

Among that group, one winner may be Hong Kong-listed Xinao Gas, (its founder, Wang Yusuo, made Forbes’ China Rich List in 2009). Net profit increased by 31% in the first six months of 2009 to $55 million, as the company raised the number of connected customers served by 40% to 4 million households. Government-controlled Beijing Enterprises is also poised to benefit from growing gas sales. Aside from its current operations, it may acquire others, says CLSA , which rates it a “buy.” Both companies trade in Hong Kong.

Hong Kong-listed CNOOC one of China’s largest oil producers, might seem to have the wind at its back because of strong demand for oil products in China. Yet production growth has been exceeding new reserves, forcing the company to look to acquisitions and become a deep-water driller. That and other factors led Macquarie Securities to call the company a sell in a scathing report this month. Says the Australian brokerage, “its true costs are among the highest in the industry.”

With price-earnings ratios of many clean energy products high, CLSA suggests another way to invest is to look at companies that supply equipment to energy producers, including the expanding nuclear power industry. They are also benefiting from government efforts — especially after the Copenhagen summit — to limit investment in coal-fired plants. Hong Kong-listed Dongfang Electric, for instance, supplies both wind and nuclear power products, and is trading at 15 times its projected 2010 earnings, according to Bloomberg. Shanghai Electric, which is listed in Hong Kong and Shanghai, is trading at 14 times projected 2011 earnings and a modest 1.4 times its 2010 price-to-book ratio, CLSA says.

Coalition donates hydro plant in bid to save World Heritage Site

A venture by an international coalition of power companies aims to shore up world-famous rice terraces in the northern Philippines and bring a sustainable source of electricity to an area that desperately needs it.

The group dubbed the “e8” — a play on the Group of 8, or G-8, nations from which they hail — donated a $1 million hydroelectric facility to Ifugao province that was symbolically turned over to the Philippine government last week.

The initiative, which was spearheaded by the e8’s Tokyo Electric Power Company (TEPCO), is expected to generate about 1,450 megawatts hour (MWh) of new energy a year for Ifugao province, meet 18 percent of the area’s electricity needs and raise $70,000 in annual revenue for an effort to save the rice terraces.

The 4,000 square miles of terraces were added to UNESCO’s list of World Heritage Sites in Danger in 2001 after years of bad weather and limited maintenance eroded sections of the ricefields’ mud and stone walls.

The e8, a nonprofit formed after the U.N. climate meeting in Rio Janeiro in the early 1990s, says it wants to influence the international energy debate. “One of the e8 missions is to promote sustainable development and use of energy through the member companies jointly implementing concrete pilot projects — in particular in developing countries,” said Yoshihiro Hatano, TEPCO’s general manager of international exchange and cooperation.

The other e8 companies are: American Electric Power Co. Inc., Duke Energy Corp., Hydro-Qu©bec, Ontario Power Generation, ‰lectricit© de France, Italy-based ENEL SpA, Germany-based RWE AG, Russia-based JSC “RusHydro”, and Japan’s Kansai Electric Power Co. Inc.

TEPCO, which operates more than 100 hydropower stations in Japan, was already familiar with the Philippines terrain and decided to lead the Ifugao project as one of its e8 initiatives because it offered the opportunity to “combine renewable development, regional revitalization and World Heritage preservation,” Hatano said.

Though the expected revenue from the Ifugao hydroelectric facility falls far short of the estimated $11.8 million needed to restore and maintain the terraces, TEPCO says the investment is an “important first step” and that it hopes this initiative will bring other donors to the cause.

The terraces are vital to Ifugao’s economy, both in tourism revenue and because “heirloom rice” is a valuable export, said Ambassador Preciosa Soliven, secretary general of the UNESCO National Commission of the Philippines. It was TEPCO’s idea to have the profits from the hydroelectric facility save rice terraces, she said.

E8 chooses its project sites upon the recommendation of its member companies or U.N. organizations, said Johane Meagher, e8’s executive director.

The group has completed six renewable energy projects, including a grid-connected solar power system that partially powers Tuvalu’s capital city and a wind project in the Galapagos Islands.

For the Philippines hydro project, UNESCO provided guidelines on the conservation of the World Heritage site. Soliven said she hopes restoring the terraces will bring young people back to the community to work on their families’ rice terraces. About a third of the terraces are abandoned.

More than 180 local people, trained by TEPCO, worked on the site’s new hydroelectric facility, and e8 anticipates that the site will also be maintained by local workers.

“When we develop a project, we do it so the local people can keep it alive,” Meagher said. “We will monitor the site for two years to see if they need more training to maintain it.”

Senate Dems Build Case to Include Clean Energy, Solar in Jobs Bill

A Senate Environment and Public Works subcommittee this week will highlight solar energy and clean energy job opportunities as President Obama and Democrats continue to work on economic recovery and job creation.

Obama appeared at Lorain County Community College in Ohio on Friday to urge Congress to pass legislation that includes incentives for training in clean energy such as making solar panels and windmill blades. Obama watched formerly laid-off workers weld and shape components for wind turbines as they work toward a certificate or associate’s degree.

“I’m calling on Congress to pass a jobs bill to put more Americans to work building off our Recovery Act; put more Americans back to work rebuilding roads and railways; provide tax breaks to small businesses for hiring people; offer families incentives to make their homes more energy-efficient, saving them money while creating jobs,” Obama said.

“That’s why we enacted initiatives that are beginning to give rise to a clean energy economy. That’s part of what’s going on in this community college. If we hadn’t done anything with the Recovery Act, talk to the people who are building wind turbines and solar panels. They would have told you their industry was about to collapse because credit had completely frozen,” Obama added.

Sen. Bernie Sanders (I-Vt.), chairman of the Green Jobs and New Economy Subcommittee, has been a leading voice on the need for more incentives for renewable energy and energy efficiency, and successfully added several provisions in last year’s stimulus bill for training and education for these “green jobs.”

But Sanders has said that the investment was only “a good start,” especially in the solar energy industry.

“The solar cell was invented in the United States. Unfortunately, however, we now import almost half our solar panels, while countries like Germany and Spain get more energy from solar energy than we do,” Sanders said in November. “There is potential for huge job gains as we manufacture and install photovoltaic panels and solar hot-water systems and construct solar thermal plants in the Southwest.”

Sanders said he is planning to reintroduce legislation soon that will provide incentives for buying solar panels and the companies that produce them with a goal to achieve 10 million solar rooftops in the United States in 10 years.

Thursday’s hearing will include three leading U.S. solar companies that can help make that happen and are already competing in overseas markets. Vermont-based GroSolar, which distributes and installs solar equipment, has expanded across the United States and helped represent U.S. solar interests at last year’s climate talks in Copenhagen.

Tempe, Ariz.-based First Solar is the world’s largest manufacturer of solar cells with a capacity of producing about 1 gigawatts of solar panels, which is helping to lower the cost of solar technology. The cost of solar energy is still high compared with wind or fossil fuels and is a major barrier to the widespread use of solar generation. First Solar has also provided financing and solar panels for large projects in Germany and is working on projects in France and China.

Meanwhile, Pasadena, Calif.-based eSolar is pushing forward on a different type of solar power that does not rely on silicon-based panels but instead a series of mirrors to concentrate the sun’s rays into one area to boil water to create steam to turn turbines and create electricity. The company already has a 5 megawatt project in Southern California and this month negotiated a $5 billion deal with Chinese utilities to bring its “concentrating solar power plant” (CSP) technology to China. The company will provide the technology for facilities with a capacity totaling 2,000 megawatts.

Despite the headway some U.S. solar companies are making in the solar manufacturing and technology market, China has recently come to dominate the industry. Tax incentives could aid U.S. manufacturing companies to compete with China, whose solar manufacturing sector now provides a majority of the world’s solar components.

Federal and state incentives are helping to bring Chinese manufacturers to the United States. Suntech Power Holdings announced plans in November to build a 100,000-square-foot plant in Arizona that would create up to 250 jobs in the next two years, the company said.