Category → Energy Efficiency
It takes some creative thinking to make clean technologies profitable. This is a theme that appears again and again in renewable energy stories about everything from algae to solar.
But cleaning up fossil fuels faces the same hurdle. Yesterday, private energy firm SCS Energy said it would take over a major California carbon capture project from mega industrials BP and Rio Tinto.
The Hydrogen Energy California (HECA) project aims to generate hydrogen for electricity production from petroleum coke and coal, while capturing CO2. The captured CO2 would be pumped into the earth as part of a neighboring natural gas project, where it would aid in gas recovery and presumably stay stored underground.
HECA has been backed by BP and Rio Tinto – to the tune of $55 million each - and by the Department of Energy, which supplied $54 million from Recovery Act funds. It is eligible for an additional $354 million in financial assistance in Clean Coal Power Initiative funding.
In total, that would be $514 million for the power plant, which is expected to start generating power in 2016. It is currently in the design and permitting stage. But operating HECA profitably is apparently still a challenge. SCS energy wants to add the capability of producing urea from the facility to create an additional income stream. The urea would be used for fertilizer.
It seems rather clear that without an additional product/revenue stream, this power producer cannot make the finances work. In its written statement about the transfer of ownership, HECA closes with “The approach of producing both electricity and urea helps address the economic challenge of creating a viable business model to cover the high capital costs of the plant and its carbon capture capabilities. ”
One would have thought it would be absurd to try to find a silver lining in the week-long tragedy still unfolding in Japan. But the world’s investors have strong imaginations, apparently. Earlier this week while searching for cleantech news, I came across a number of articles describing a huge run up in share prices of solar firms.
Bloomberg now reports, “The Bloomberg Global Leaders Solar Index has risen about 9.1 percent since March 11, when an earthquake and tsunami in Japan knocked out cooling systems at a Tokyo Electric Power Co. reactor, releasing radioactive pollution.” But the piece quickly lets the air out of the balloon, saying “While the incident triggered speculation governments will scale back nuclear power in favor of renewable, solar panel demand is stagnating.”
Basically, after a doubling of solar installions last year – led by Germany – governments have ratcheted back the incentives that are the primary driver of demand for companies like U.S.-based First Solar. First Solar was one of the leading firms to receive positive fall-out from the nuclear disaster this week.
Because solar is not now the main focus of government interventions, any turning away from nuclear energy plans is more likely to benefit energy efficiency and natural gas projects, Bloomberg reports.
Yesterday, President Obama was at Penn State to press for more federal support of green buildings. In his speech promoting the Better Buildings Initiative, he suggested that many in his audience might not consider green buildings to be “sexy.” But I suspect that chemists have many reasons to find green buildings to be pretty darned appealing.
For one thing, green building materials research – like that conducted by a clean energy hub in Philadelphia headed by Penn State - can earn chemical firms a Presidential shout-out. The hub includes corporate partners Bayer Material Science, which is working on new materials for insulation and facades that save energy, and PPG Industries, whose researchers are creating walls that reflect sun and windows that reflect infrared, according to the President’s remarks.
He pointed out that making buildings (and homes) more energy efficient is a green upgrade that comes with no tradeoffs. The whole point of retrofitting (or building green from the start) is to save on energy costs. The roadblock, though, is the initial upfront cost, which is a cash expenditure. The President’s initiative - through tax credits and financing help – is supposed to minimize the up-front sticker shock. He’d like to pay for the cost of the program by rolling back “subsidies to the oil companies,” saying, “it’s time to stop subsidizing yesterday’s energy.”
Three articles in this week’s Washington Post and New York Times examine the question of whether the shift to clean energy will really create more U.S. jobs or just hasten the shift of jobs to China. It seems like there is strong evidence for the latter case.
Today’s New York Times covers the news that the United Steelworkers union plans to file a case with the Obama Administration accusing China of violating free trade rules in its subsidies for exports of clean energy equipment. Here’s a taste:
“The union says the violations have helped Chinese companies expand their share of the world market for wind turbines, solar panels, nuclear power plants and other clean energy equipment, at the expense of jobs in the United States and elsewhere. The filing asks the Obama administration to begin formal proceedings at the W.T.O. in Geneva to force China to repeal the subsidies.
“Unless China’s policies are urgently addressed, the U.S. may never get a fair shot at making the green technologies of the future,” the filing says.”