Monthly Archives: June 2011

First Solar gains almost $4Bn from Federal Program

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First Solar has become the biggest solar beneficiary of a federal renewable energy loan guarantee program. The U.S. Department of Energy on Thursday announced three loan guarantee offerings totaling roughly $3.73 billion for First Solar’s three photovoltaic power plants in California.

The Arizona company is set to get a guarantee for a $680 million loan for the 230 MW Antelope Valley Solar Ranch 1 project, partial guarantees for $1.88 billion in loans for the 550 MW Desert Sunlight project, and partial guarantees for $1.93 billion in loans for the 550 MW Topaz Solar project. Electricity from these projects will go to utilities Pacific Gas & Electric Co. and Southern California Edison.

First Solar will be using its cadmium-telluride solar panels for all three solar farms and overseeing their construction as well. The $680 million loan guarantee for Antelope Valley Solar will translate into a loan of the same amount from the Treasury-run Federal Financing Bank, said Ted Meyer, vice president of corporate communications at First Solar.

The second and third loan guarantees are for up to 80 percent of the loans that will be funded by institutional investors and banks. The Desert Sunlight project will get the $1.88 billion in loans (up to $1.5 billion in guarantees) from a group led by Goldman Sachs Lending Partners. The $1.93 billion in loans (up to $1.54 billion in guarantees) for Topaz Solar will come from investors led by The Royal Bank of Scotland. (Topaz was sold to First Solar by the now defunct OptiSolar in early 2009).

The three loan guarantees make First Solar the biggest recipient of the loan guarantee program. The company also is set to provide solar panels for a fourth project headed by NRG Energy, which has gotten a $967 million loan guarantee offer to build the 290 MW Agua Caliente solar farm in Arizona.

The loan guarantee program, called Section 1705, that Congress created through the 2009 stimulus package to boost job creation and clean power generation. So far, the program has offered over $16 billion in guarantees for 15 solar power generation projects, most of which are in California and other southwestern states. Just last week, the DOE announced a guarantee for up to $1.12 billion for the country’s largest rooftop solar project.

Through the program, the government promises to repay loans if borrowers can’t. In many cases, it also provides the loans through the Federal Financing Bank. The DOE issues press releases when it has offered loan guarantees to specific projects, but the offers still need to be finalized and that process typically takes several months at least. Section 1705 is making it possible for large solar and other types of renewable energy farms to get financing. Solar by far has attracted the most government backing (check out this list of loan guarantees).

The program also has attracted critics who question whether some recipients deserve the government help and whether the program has indeed created ample jobs. A House energy committee, led by Republicans, is investigating whether the administration did its due diligence when it provided a $535 million loan guarantee – and the loan as well – to solar panel maker Solyndra to build a factory in California. It’s been trying to get the Office of Management and Budget to turn over more documents related to its decision to support the loan guarantee.

First Solar has devoted a lot of money and efforts to become a solar farm developer in recent years. The public company wants to use the project development business, which targets the North American market, to help offset any shortfalls from its main business of manufacturing and selling solar panels to Europe, the largest solar market in the world.

First Solar’s shares rose nearly 9 percent to $140.42 per share in recent trading.

Scotland sets targets to 30% Renewables by 2020

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The Scottish government has done it again. The UK’s leading developer of renewable energy has today increased its green energy ambitions yet again, announcing a new target to supply at least 30 per cent of the country’s energy from renewable electricity, heat and transport by 2020.

Scottish energy, enterprise and tourism minister Fergus Ewing unveiled a new renewables routemap outlining the steps required to meet its already ambitious targets, including a goal of supplying 100% of electricity demand from renewables and 11 per cent of heat from renewables by 2020.

He also increased Scotland’s overall ambition by adopting a target of supplying 30 per cent of all energy from renewables by 2020, 10 per cent above the existing 20 per cent goal.

The new goal exceeds the EU’s 2020 renewable energy target of 20 per cent and will be double the UK’s agreed EU target of 15 per cent.

The roadmap also sets a new target to deliver 500MW of community and locally owned renewable energy by 2020, and outlines a commitment to develop strategies for microgeneration and agri-renewables.

In addition, Ewing announced plans to establish a Scottish Renewables Advisory Themed Group to provide expert advice from industry and other stakeholders on how to achieve Scotland’s full renewable energy potential. It will be co-chaired by the minister and Niall Stuart, chief executive of trade association Scottish Renewables.

“More than 40,000 jobs could be created in this rapidly expanding industry and some of the biggest names in energy have already chosen to expand their operations in Scotland, including Mitsubishi Power Systems, Gamesa and Dossan Babcock,” said Ewing.

“It is essential we continue to move quickly to develop the necessary infrastructure and skills required to attract more international investment and green energy jobs to our communities.”

In related news, AMEC and EDF Energy have refiled a planning application to build a 151MW wind farm to the west of Stornoway on the Isle of Lewis, in the Western Isles of Scotland.

The two companies today confirmed they have filed an application to the government, which, if successful, could create nearly 400 jobs in Scotland and almost 800 jobs overall.

A socio-economic assessment of the proposed wind farm estimates that £48m of materials and labour will be sourced within the Western Isles during the construction phase.

The companies said the specific wind turbine model has yet to be decided, although the 42 machines will have a hub height of no more than 90 metres and a tip height of no more than 143.5 metres.

The exact timeline for a decision could not be specified, but the developers expect a decision by the Scottish government in spring 2012.

The previous application was turned down because of concerns over the impact of the project on the Lewis Peatlands Special Protection Area.

However, the new Stornoway wind farm application covers a different area of land and does not directly intrude on protected areas, potentially increasing the likelihood of approval.

UK Energy Secretary suggests additional Nuclear Plants to reduce electricity bills

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Yesterday Chris Huhne the energy secretary warned of the rise of UK electricity bills. Mr. Huhne suggested that the UK reliance on fossil fuels will leave us vulnerable to price fluctuations in the market. He claims that if we adopt a similar energy policy to France which has three times as many nuclear reactors our power bills would be considerably lower.

Mr Huhne went on to say that a shift away from fossil fuel would ultimately deliver benefits to consumers. Electricity prices will rise by about 9 per cent this year, Mr Huhne said. By contrast, French households face only a 3 per cent increase. “It is no surprise that France is the European country with the least reliance on fossil fuels, and enjoys some of the lowest prices,” he told the Prince of Wales’s Corporate Leaders Group. According to the Department of Energy and Climate Change, barely 10 per cent of French electricity is generated by fossil fuel plants. By contrast, about three quarters of British electricity comes from coal, gas and oil. France has 58 nuclear reactors while Britain has 19.
French energy costs 9 per cent less than British, he said. Price increases this year will take the average annual bill for British householders to almost £1,400, the highest level ever.
According to Mr Huhne’s department, nuclear power provides about 18 per cent of the electricity used in Britain, down from 30 per cent during the 1990s.
The French government this week said it would invest €1 billion (£898 million) in new nuclear power technology.
By contrast, the British government has ruled out direct state spending on nuclear power, insisting that commercial operators must pay for new plants.
The Government has said that about £200 billion will have to be spent on the power network over the next decade.

Mr Huhne said low-carbon energy would cost more, but if oil prices rise then consumers would be better off. He said if oil prices averaged $80 (£50) a barrel, low-carbon energy bills would be 1 per cent higher than the current level. But when oil hits $100 a barrel, low-carbon energy bills would “break even”.

NGO demands transparency in Oil Contracts

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The Civil Society Platform on Oil and Gas has called on government to make contract disclosures in the oil and gas industry mandatory and sanctioned by law to ensure transparency.

The group wants the Petroleum (Exploration and Production) Bill which is due to return to Parliament to make provisions for mandatory contract disclosures, stressing that reliance on presidential and ministerial directives have not worked, making them unreliable.

A recent directive by the Minister of Energy for the disclosure of all petroleum contracts signed with the Government of Ghana has not been implemented.

Addressing a press conference in Accra Monday, Executive Director of Civil Society Platform on Oil and Gas, Mohammed Amin Adam, expressed disappointment about the fact that this directive has not been complied with one month since it was issued.

“Government cannot continue to drag its feet on this important exercise especially since similar directives were given in 2009 and 2010 by His Excellency the President and the Vice-President of the Republic respectively,” he insisted.

The group called for an immediate publication of all the Petroleum Agreements in the interest of transparency and accountability including the Lifting and Marketing Agreements.

According to the group, the Petroleum Agreements the country signed which led to the significant discoveries of oil and gas were not the best.

“We have been told that the terms of the current contracts, which gives Ghana lesser value for her petroleum resources were meant to attract investments upstream. Ghana’s cumulative earning is under 50% consisting of a royalty of 5%, a carried interest of 10%, a paid interest of between 2.5 and 5%, and a corporate tax of 35%. These terms fall short of the expectations of our people,” the group stressed in their press statement.

The group does not understand why Ghana did not go for the maximum corporate petroleum tax of 50% while accepting a concessionary 10% carried interest.

The Platform, therefore, called on Parliament to ensure that the Petroleum (Exploration and Production) Bill provides for contractual terms that give Ghana higher stake and value in all the petroleum agreements.

“We also call on the Government to take more additional paid interests from the Hess Petroleum Agreement and float some of them on the Ghana Stock Exchange for Ghanaians and Ghanaian institutions to acquire ownership in the concession. This will not only give meaning to the domestic content policy but will also ensure the local economy retains substantial portion of the liquidity in the industry for national development,” they added.

The Platform also called for a review of the concession process towards an open and competitive bidding process, to ensure a transparent process of granting oil concessions and marketing contracts, and further prevent the likelihood of ‘shadowing’ in the oil industry.

“This will give Ghana high value for oil concessions whiles ensuring that the bid with the best technology is accepted for oil exploration in the country,” they explained.

The Platform further said it was alarmed that since the installation of flow metres on the FPSO, the calibrations of both the production and export flow meters had not been verified by the Ghana Standards Board due to logistical constraints.

In this regard, the country cannot monitor whether the meters can be tempered with or not, something which the group says undermines the transparency promised the people of Ghana by all parties in the Jubilee project.

“It is also disturbing that only one officer of the Ghana Revenue Authority is on the FPSO to monitor operations upstream. This is further compounded by the malfunctioning of the electronic seals in the pipelines for data transmission to the on-shore centers established by the Revenue Authority. There is therefore no system to verify the reports of the customs officer on production and export volumes,” the Platform decried.

While calling on Government to provide adequate resources and institutional capacity to state institutions such as the Ghana Revenue Authority, the Standards Board, the Ghana Maritime Authority and the Environmental Protection Agency to ensure that they play their roles effectively, the group urged Government to seek international certification on the production and export flow metres annually.

Google Publishes Report on economic analysis of Renewables for USA

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Google has published an analysis of the economic benefits of renewable energy innovation. It has concluded that even a five year lapse without a national clean energy policy would cost the United States an aggregate US$2.3-3.2 trillion in unrealized GDP gains and 1.2-1.4 million net jobs.

The most favorable outcomes occurred when innovation was paired with government intervention such as clean energy mandates or a carbon tax. The study also noted that innovation alone would not be enough to sufficiently curtail carbon emissions.

Google processed the data using McKinsey and Company’s US Low Carbon Economics Tool. Google’s researchers ran through multiple scenarios ranging from “business as usual” to what would likely happen if major break throughs occurred in energy storage, clean power, and transportation.

“Based on our modeling, we estimate that by 2030, innovation in the modeled technologies alone could have a transformative impact on the US, adding over $155 billion per year in GDP and 1.1 million net jobs, while reducing household energy costs by $942 per year, oil consumption by 1.1 billion barrels per year, and GHG emissions by 13% relative to BAU. By 2050, annual gains in GDP increase to $600 billion, net additional jobs to 3.9 million, and emissions reductions to 55%,” the study says.

Google concluded that the first renewable energy sources that become more economical than fossil fuels will win the future. General Electric recently claimed that solar power was on target toward meeting that criteria.

An “innovation arms race” between competing technologies would generate healthy competition in the marketplace that’s ultimately beneficial to consumers, Google’s study said. It has been upping the ante by fiercely promoting clean energy technologies over the past two years, investing nearly $1 billion to incubate wind and solar power projects.

Google’s study is not an outlier: renewable energy means jobs, a more prosperous future – and is not a drain on the economy despite politically charged rhetoric to the contrary. One of the largest private corporations in the United States has just given further credence to the claim that inaction is harmful to society.

Japan PM adds Cabinet jobs on tsunami, nuke crisis

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Japan’s prime minister on Monday created two Cabinet posts to oversee the nuclear crisis and tsunami reconstruction efforts as he hopes to shore up his administration against criticism of its handling of the crises.
Prime Minister Naoto Kan named Ryu Matsumoto as reconstruction minister and made Goshi Hosono his minister in charge of handling the crisis at the Fukushima Dai-ichi nuclear plant.
He also gave special advisory positions to two other senior politicians.

The moves are seen as an attempt by Kan to strengthen his hand against a growing number of critics who perceive a lack of leadership following the March 11 disaster.He has said he would be willing to step down, but only after significant steps are made toward putting Japan’s recovery on a solid footing. He has also set several preconditions, including the passage of budget bills and a renewable energy measure.

“I’m aiming at (stepping down) after achieving those bills,” Kan told a news conference late Monday.
Hosono, who has been director of the government’s nuclear crisis task force, will also be in charge of power conservation. An electricity shortage is expected in Tokyo because of the nuclear crisis, and the government has taken several steps to prevent problems. Matsumoto, previously Kan’s environment minister, will be replaced by Justice Minister Satsuki Eda, who will hold a double portfolio. Popular Cabinet member Renho will become an advisor, along with Shizuka Kamei, the leader of a smaller party in parliament.

“The main purpose of the new appointment is to push for reconstruction from the disaster and take steps to prevent another nuclear accident,” Kan said. “Three months have passed since the disaster. It’s time to start thoroughly discussing how we can be better prepared.”

Chief Cabinet Secretary Yukio Edano earlier Monday announced the new lineup, in which he also serves administrative reform minister, taking over Renho’s former post. Renho uses one name.
The earthquake and tsunami disaster left about 23,000 people dead or missing on the northeast coast, and touched off the worst nuclear crisis since Chernobyl.
The disaster brought out deep rifts within Kan’s party and has strengthened the largest opposition bloc, which has slammed his response as dithering and poorly coordinated.
Kan’s support with the voters is also slipping.

A major newspaper reported Monday that support for his Cabinet has fallen to 26 percent, with 42 percent of the respondents saying he should be replaced as soon as possible. The telephone poll of 893 voters was conducted over the weekend by The Nikkei, a conservative business daily, and the TV Tokyo Corp. A poll of that size would normally have about a 3 percent margin of error.
The result marked a two-percentage-point drop for the Cabinet. Sixty-five percent of the respondents said they did not support the Cabinet.

Gamesa secures offshore wind site in Scotland

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Gamesa has secured a site for its Offshore Wind Technology Centre in Glasgow, Scotland, which could see the creation of 40 jobs.

By Renewable Energy Focus staff

The Offshore Wind Technology Centre will be located at Strathclyde Business Park and the recruitment process has already started with the aim of employing around 40 engineering staff by July/August.

The number of jobs could grow to more than 100 by the end of this year – rising to 180 within three years of the offshore wind entre beginning operational, Gamesa says. It is due to be officially opened in the autumn.

Gamesa says it is also prepared to invest in manufacturing, logistics and operations & maintenance (O&M) in Scotland, conditional upon development of offshore wind projects in the area, securing government support and the availability of sites for prototypes.

If this goes ahead, Gamesa’s offshore wind plan could represent an investment of around €50 million in Scotland and create 300 direct jobs.

Jorge Calvet, Chairman and CEO of Gamesa, says: “Our commitment is strong and we are preparing to play a role in the offshore wind market. Our Offshore Technology Centre in Glasgow represents an important step in this strategy. Our offshore plans could generate significant local, skilled and sustainable jobs over the coming years.

Rooftop Solar Project to generate 1000s of Jobs – USA

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Rooftop solar generation takes a giant leap forward as a consortium of companies – Bank of America Merrill Lynch, Prologis and NRG Energy – announce an offer of a conditional commitment from the U.S. Department of Energy’s Loan Programs Office to help finance the largest distributed rooftop solar generation project in the world.

According to a release, the loan guarantee supporting $1.4 billion of debt facilitates a total project size of about $2.6 billion, which is being financed entirely by the private sector over the next four years.

This distributed solar project will generate employment across 28 states and will create the equivalent of more than 10,000 full-year jobs. Once fully funded and completed, these installations are expected to provide approximately 733 megawatts (MW) of distributed solar energy, which is enough clean, renewable energy to power approximately 100,000 homes.

Having received this offer of a conditional commitment from the Department of Energy, the three firms are working to finalize the financing documentation for the distributed solar project and begin the first phase of installation. Of this first phase, 15 MW of solar capacity is ready immediately for construction and installation in Southern California, where the power generated will be sold to a local utility under long-term power purchase agreements that have been approved and executed. NRG Energy has committed to be the lead investor for the first phase of the project over the next 18 months.

BofA Merrill is acting as sole financial and structuring advisor and sole lender on this transaction, which is being executed under the Department of Energy’s Financial Institutions Partnership Program (FIPP). Through FIPP, the DOE will guarantee 80 percent of the $1.4 billion debt financing for this transaction.

“By harnessing the full capabilities of our platform we’re able to deliver this innovative transaction that brings together many parts of our Global Banking and Markets franchise,” said Tom Montag, president of Global Banking and Markets. “This important accomplishment transforms the dynamics of distributed solar generation, delivers a significant source of clean energy and creates thousands of jobs across the U.S.”

Prologis, an owner, operator and developer of industrial real estate, will provide site access to rooftops and will also act as developer, construction manager and program sponsor, in addition to making an equity investment. This effort is the most recent example of the company’s long-standing and industry-leading commitment to renewable energy.

“As one of the world’s largest owners of distribution facilities and an active solar industry participant, we’re pleased to be a partner in a project of this magnitude,” said Drew Torbin, vice president of Prologis Renewable Energy. “This project will add significant scale to the distributed solar market and provides economic and environmental benefit to our shareholders and customers.”

NRG Energy, an electric power company and solar energy developer, in addition to funding the first phase of the project, has a right of first offer for the remainder (up to the program total of 733 MW) and will provide development resources and project expertise for the installations.

“NRG believes rooftop solar is a smart choice for industrial, commercial and residential property owners in markets around the country, and this program provides the commercial scale that will bring the benefits of solar power to customers across the country,” said Tom Doyle, president of NRG Solar, NRG’s solar subsidiary. “This program will nearly double the amount of grid-connected solar online in the United States today and make another positive contribution to cleaner air and a healthy environment.”

Within BofA Merrill, the transaction was led by the Cross Asset Solutions and Strategies group, a team established to leverage the bank’s entire platform and coordinate the resources of the firm from origination to execution, in partnership with the company’s Global Investment Banking and Global Leasing teams. In addition to demonstrating the strength of its Global Banking and Markets platform, this transaction also is a part of the company’s 10-year, $20 billion environmental business initiative, which focuses on addressing climate change by aligning its global financial products and services to help advance energy efficiency and low-carbon energy markets.

NRG Solar pursues a diverse, multi-technology approach to commercializing solar generation, including large-scale concentrated solar thermal and photovoltaic, and distributed solar. The company owns solar photovoltaic plant currently operating in California and has more than 2,000 MW of solar projects under development or in construction across the United States.

Statoil sharpens renewable energy efforts

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Statoil signed on Friday 24th June two agreements for the sale of the major part of Statoils onshore wind power activities in Norway.

Statoil, through its subsidiary, signed an agreement for the sale of all of Statoil 50% of Sarepta Energi as to Trønder Energi Kraft AS. Another agreement was signed for the sale of wind power projects in Finnmark, comprising Arctic Wind AS and the three projects Hamnefjell, Båtsfjordfjellet and Snefjord, to Finnmark Kraft AS.

The sale is part of the group’s strategy to aggregate investment in wind energy in offshore projects, in order to better utilize the company’s core expertise in developing renewable energy.

“Renewable energy is an important priority for us. We are now in a process where we want to sharpen our focus where we believe we can contribute most. Offshore wind is a market in strong growth and how Statoil can use our expertise as the world’s largest offshore operator. It means that we are now working to find new owners for the group’s interests in wind farms on land,” says Ståle Tungesvik, senior vice president of Renewable Energy in Statoil.

Statoil has quickly built up a significant position in the market for offshore wind:

Sheringham Shoal in England is under construction and will supply electricity for 220,000 British households. The project, which is a collaboration between Statoil and Statkraft will be having 88 fixed offshore wind turbines and deliver 317 MW of power. Statoil is operator for the development construction.

The group is also part of the consortium Forewind, which has the rights to develop the Dogger Bank field. With a possible development of 13 GW, the Dogger Bank, the world’s largest development of offshore wind.

Statoil also operates an active technology development through the world’s first floating wind turbine half, Hywind. After testing the technology outside of Karmøy, the company is now working to commercialize Hywind and the next step will be to establish demonstration farms with 3-5 floating windmills together..

Ireland is the ideal location for wind energy…

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Further interest in Ireland providing a large source of renewable energy was highlighted again today by Charles Hendy, the UK energy minister. He claimed the west coast of Ireland was a prime spot for the development of wind turbines and potential creation of wind farms.

It is a well known fact that Ireland receives a regular flow of high winds and would be highly suitable area for the development of wind turbines. It is due to its low demand for electricity that has caused many to overlook its potential (only 1/10 of UKs demand). However with recent disucssions with the idea of combining the UK and Ireland energy system has caused a strong interest in the potential of renewable energy in Ireland.

Not only would this create additional sustainable energy options it would create many jobs within the construction and engineering fields.

The final decision comes down to the Irish Government and whether they are willing to develop Wind Farms to create sustainable energy options for both Ireland and the UK.