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Tag Archives: low-carbon energy systems

U.S. receives international support for renewable energy

With the December 31 deadline for the extension of the wind power production tax credit looming, the future of American green energy hands in limbo. The US might to look to other countries that are dedicated to the development of the renewable energy sector.

China is in its 12th five year plan and places strong emphasis on boosting economic growth through development of seven emerging industries: new energy, energy conservation and environmental protection, biotechnology, new materials, new IT, high-end equipment manufacturing and clean energy vehicles. China is understandably more aggressive in its investments in a low-carbon economy. The country aims to reduce greenhouse gas emissions by 40 to 45 percent per unit of gross domestic product (GDP) by 2020, compared with 2005 emission levels. China seeks to increase the use of non-fossil fuels as a percentage of total energy use to 11.4 percent by 2015 and 15 percent by 2020.

Japan recently approved incentives for renewable energy, which will help the country decrease its dependence on nuclear power and increase clean energy programs, such as offshore wind farms. These incentives could result in billions of dollars in clean energy investment, expanding revenue from renewable generation and equipment, including wind turbine components such as ultracapacitors, to more than $30 billion by 2016.  Just 1 percent of Japan’s power supply comes from renewable energy sources, apart from hydro-electric dams which account for most of the rest of the electric power. Despite the low starting point, Japan has the potential to generate cleaner and safer energy from renewable sources such as the sun, wind and geothermal. Over the past decade, Japan’s wind power capacity has multiplied to 2.5 million kilowatts, and the Japan Wind Power Association estimates the country can generate 740 million kilowatts of wind power on a commercial basis on land and offshore.

Germany also announced a shift away from nuclear power last year with an ambitious plan to shut down all of its 17 nuclear reactors within a decade and replace the 30 percent of the energy currently generated by nuclear reactors with renewable power. The country pledged to obtain 80 percent of its power from renewable sources by 2050. Currently, Germany gets 17 percent of its electric power from clean energy sources, about half-way to its target of 35 percent by 2030. The aggressive energy policies have also stimulated the job market in the country with 382,000 new clean energy technology jobs, and this number expected to reach 600,000 by 2020.

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Strong Connection Between Economy & Environment – Investors Taking Action

Many of the world’s leading executives and investors believe in a strong connection between the economy and the environment. Talk of a “political battle” between the two major focal areas is mere “nonsense,” says Mark Vachon, Vice President of GE’s Ecomagination program.

In a recent interview, Vachon shot down the “false dichotomy” that some are trying to present between attaining profits and respecting our planet.  “There’s this theory that you have to pick one: economics or environmental performance.  That’s nonsense.  Innovation is the way you can have both.”

Over $5 billion has been invested in renewable energy, efficiency and smart grid technologies as part of GE’s Ecomagination program.  By 2015, GE plans to double investments in the sector to $10 billion.  These investments have paid off handsomely, noted Vachon.  With $85 billion in revenue, GE’s cleantech investments have doubled the performance of the rest of its portfolio.

“Companies that don’t get this, really risk becoming irrelevant to the marketplace. Whether you believe it for climate change or just the markets that are developing, it is our responsibility as businesses to be responsible to the design  signal that the world is telling us.”

The trend is undeniable.  Investments in clean energy and related technologies are accelerating. In 2011, investments in clean energy trumped those in fossil fuels for the first time.  In total, $260 billion was funneled into the clean energy sector.  Since 2004, cumulative investment numbers over $1 trillion dollars.

Based on our current path, Bloomberg New Energy Finance predicts $400 billion will be invested annually in proven renewable energy technologies such as solar PV, solar thermal, wind energy and geothermal by 2020.  Many sophisticated investors view clean energy as one of the greatest wealth creation opportunities in history.

For more information on how we invest in clean energy, please visit us here.

 

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Chinese Water, Agriculture at Risk from Climate Change

The Chinese government’s “Second National Assessment Report on Climate Change” warns of significant risks to agriculture and water resources as a result of a changing climate.

Global warming may reduce crop yields, shrink rivers and increase the frequency of damaging droughts and floods, says the 700+ page report, recently released to the public.  Chinese prosperity and economic growth may be hindered as a result.

If global warming trends continue unmitigated, Chinese grain output could fall between 5% and 20% by 2050.  China is already the world’s largest consumer of grains and relies heavily on imports of key commodities.  Any decrease in domestic production would be deeply felt.

Lin Erda, one of the chief authors of the report, remarked:

“Generally, the observed impacts of climate change on agriculture have been both positive and negative, but mainly negative.  But steadily, as the temperatures continue to rise, the negative consequences will be increasingly serious.  For a certain length of time, people will be able to adapt, but costs of adaptation will rise, including for agriculture.”

However, Lin points out that improved crop choice and more efficient use of irrigation and fertilizer could help the situation, suggesting that agri-science and new technologies will be crucial for China going forward.

The impact of climate change on China’s water resources may be sizable.  Experts fear “severe imbalances in China’s water resources,” concentrated precipitation in the summer and autumn rainy seasons, and “increasingly frequent” floods and droughts.

“Without effective measures in response, by the latter part of the 21st century, climate change could still constitute a threat to our country’s food security.”

The report warns that 8 of mainland China’s provinces could face severe water shortages by 2050 (less than 500 cubic meters per resident), and 10 others could face lesser shortages.  The continual retreat of glaciers in Tibet which feed many important rivers is also cause for concern, as is rising sea levels that could impact coastal cities like Shanghai.

Through it all, Chinese carbon emissions continue to rise.  Rising by a predicted 10.4% a year, China’s emissions could grow to 9 or 9.5 billion tons by 2020.  Achieving the Chinese government’s stated goal of a 40-45% reduction in economic carbon intensity by 2020 (the level of carbon pollution for each unit of growth) will be an expensive endeavor. China’s efforts to reduce carbon emissions will likely require 10 trillion yuan (USD $1.6 trillion) of investment, with half designated for energy-saving technology and clean energy.

The report emphasizes the importance of prompt action, noting that “many cost-effective and mature technologies for energy saving and new and renewable energy have already been widely applied.  In the future, controlling greenhouse gas emissions will require more costly and less mature technologies.”

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Norway Commits $300 million/year to Support Carbon Markets & Energy Efficiency

The oil-rich nation of Norway has announced significant financial commitments to support broader global access to energy and the development of a new carbon marketplace.

As part of its “Energy+ Partnership” with the UK, France, Denmark, Switzerland, the Netherlands and South Korea, Norway will invest $300 million a year to further these goals.  Poor, developing nations including Bhutan, Ethiopia, Kenya, Liberia, Maldives, Morocco, Nepal, Senegal and Tanzania will receive aid to build new, efficient power plants and increase public access to energy.

The Energy+ Partnership initiative will be launched this June at the Rio+20 summit.  The top priority of the conference will be broadening global access to energy.  The International Energy Agency (IEA) warns this undertaking may cost $48 billion a year – at a minimum.

Included in the Energy+ agenda are measures to reduce greenhouse gas emissions in developing nations and develop practical ways to establish new carbon markets.  Instead of the project-by-project approach established by the U.N.’s Clean Development Mechanism system, many governments are now advocating for the creation of carbon markets across entire sectors.  Norway’s investments will go towards furthering these markets in energy.

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State of the Union Address – Renewed Focus on Energy

Investing in clean energy, expanding energy efficiency programs and harnessing America’s vast natural gas resources received considerable emphasis in President Obama’s State of the Union Address.  Below are key excerpts from his speech:

Natural Gas

“…nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my administration to open more than 75 percent of our potential offshore oil and gas resources.”

“This country needs an all-out, all-of-the-above strategy that develops every available source of American energy. A strategy that’s cleaner, cheaper, and full of new jobs. We have a supply of natural gas that can last America nearly 100 years.”

“The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”

Clean Energy

“Our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries. Because of federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it.”

“I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We’ve subsidized oil companies for a century. That’s long enough”

“The Department of Defense…the world’s largest consumer of energy, will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year.”

Energy Efficiency

“The easiest way to save money is to waste less energy. So here’s a proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, more jobs for construction workers who need them.”

Read the full transcript of the speech here

 

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Google, TransCanada & Warren Buffett: New Investors in Solar Power

Solar power installations in the United States have reached record highs this year.  As we reported previously, third quarter photovoltaic installations rose by 40%, bringing total installed capacity above 1GW for the first time in U.S. history.

As the year draws to a close, the North American sector is attracting notable new investments from high profile corporate and individual investors such as Google, TransCanada and Warren Buffett.

Google, in conjunction with private equity firm KKR & Co, is buying four solar power plants in California from solar developer Recurrent Energy (owned by Sharp Corp).  Together, these plants have a total capacity of 88MW.  Google’s latest purchase brings its total investment in solar to over $915 million.

Making its first investment in solar, TransCanada – in the news recently surrounding its Keystone XL pipeline to connect Canada’s Alberta tar sands region with refineries in the Gulf – will pay $470 million to Canadian Solar to develop nine plants across Ontario, Canada.  Canadian Solar will take advantage of Ontario’s generous feed-in-tariff program to incentivize the generation of electricity from renewable sources.

Last but certainly not least, we come to Warren Buffett.  The “Oracle of Omaha” has invested heavily into solar via MidAmerican Energy’s (a holding company of Berkshire Hathaway) plan to buy First Solar’s $2 billion Topaz solar photovoltaic plant in Southern California.

The plant is currently under construction, but upon completion by early 2015, will have the capacity to generate enough energy to meet the demands of approximately 160,000 homes.

“MidAmerican is the No. 1 owner of wind-powered energy generation among US rate-regulated utilities,” remarked Greg Abel, the Chairman, President & CEO.  “Adding solar energy to our generation portfolio is a strategic move to invest in yet another renewable energy source.”

Abel continued, “This project also demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees and reflects the type of solar and other renewable generation that MidAmerican will continue to seek to add to its unregulated portfolio.”

Read about Google and TransCanada here

Read more about Warren Buffett and MidAmerican’s purchase here

Learn more about investing in solar and renewable energy

 
 

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Investment in Clean Energy May Double to $395bn by 2020

Bloomberg New Energy Finance predicts strong growth in solar and off-shore wind energy may propel annual investments in clean energy to double by 2020, reaching an estimated $395 billion a year. By 2030, that figure may rise to $460 billion annually.

Within 20 years, the percentage of total world power generation supplied by clean energy may rise to 15.7% up from 12.6% last year.  This growth will continue despite the gloomy economic environment.

“Big winners over the next 20 years will be the emerging renewable energy hubs in Latin America, Asia, the Middle East and Africa – by 2020 the markets outside of the European Union, U.S., Canada and China will account for 50% of the global annual investment in renewable energy capacity,” said Guy Turner, director of commodity research.

The world’s current major players – China, Europe, The United States and Canada – will continue their investments in the sector.  China was the world’s leader in new clean energy investment last year with $51.1 billion, by far the largest expenditure of any country.

In 2009, Asia and Oceania overtook the Americas in terms of regional clean energy spending, and by 2014, it is likely to leap over the Europe, the current leader.

The most rapid growth in spending rates will come from India, the Middle East and Africa, where rates will grow between 10% – 18% over the next decade.  Emerging energy technologies are rising significantly in the world’s emerging markets.  We believe this trend is integral to our clean energy investment strategy.

Read the full article here

Read more about Investing in Clean Energy

 
 

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