Natural gas has a bad rap in some parts of the country, because the process of fracking is not popular. But many people looking at cheap natural gas from the global perspective see it as a good thing.

Henry Jacoby, an economist at the Center for Energy and Environmental Policy Research at MIT, says cheap energy will help pump up the economy.

“Overall, this is a great boon to the United States,” he says. “It’s not a bad thing to have this new and available domestic resource.” He says cheap energy can boost the economy, and he notes that natural gas is half as polluting as coal when it’s burned for electricity.

“But we have to keep our eye on the ball long-term,” Jacoby says. He’s concerned about how cheap gas will affect much cleaner sources of energy. Wind and solar power are more expensive than natural gas, and though those prices have been coming down, they’re chasing a moving target that has fallen fast: natural gas.

“It makes the prospects for large-scale expansion of those technologies more chancy,” Jacoby says.

Natural Gas: ‘A Bridge To Nowhere’?

From an environmental perspective, natural gas could help transition our economy from fossil fuels to clean energy. It’s often portrayed as a bridge fuel to help us through the transition, because it’s so much cleaner than coal and it’s abundant. But Jacoby says that bridge could be in trouble if cheap gas kills the incentive to develop renewable industry.

“You’d better be thinking about a landing of the bridge at the other end. If there’s no landing at the other end, it’s just a bridge to nowhere,” he says.

In the short run, at least, the wind industry isn’t too worried about this. Denise Bode, who heads the American Wind Energy Association, says low gas prices don’t undercut current prices for wind, because those are mostly fixed by 20-year contracts, not market prices.

And even if wind is a bit more expensive than natural gas, she says utilities still want it in their mix. Windmills aren’t subject to changing fuel prices, so the cost of production is quite predictable. That’s not true for natural gas — there’s no guarantee that today’s cheap prices will stay as low as some predict.

“It’s very difficult to really know how certain that is, so you always want to balance that with something that is certain,” Bode says.

Reducing Political Will For Renewables?

What really worries her isn’t natural gas — it’s politics. Wind could lose a huge tax break at the end of this year. And that would have a much more dramatic effect than low natural gas prices.

“You’ll see very low numbers” for new wind installations if the federal production tax credit expires,” Bode says. “In fact, I think EIA [the U.S. Energy Information Administration] projects almost zero for 2013.”

The solar industry’s subsidies run for several more years, so they are not in that bind, at least not yet. But Trevor Houser, an energy analyst at the Rhodium Group, says these tax credits and other incentives like state renewable standards are key if renewables are to grow and mature during the natural-gas glut.

“Long-term renewable deployment in the U.S. is going to depend primarily on policy,” Houser says. “Is there enough concern about environmental consequences to put in place incentives for renewable energy?”

That partly depends on how much of a premium people and companies will be willing to pay for cleaner energy. Right now, with natural gas so cheap, that premium is fairly substantial.

“If those prices hang around for another three or four years, then I think you’ll definitely see reduced political will for renewable energy deployment, ” Houser says. “But we don’t expect prices that low to hang around that long, because low prices are in many ways self-correcting.”

Gas is so cheap now that companies that produce it are struggling to make a profit. So Houser expects prices to move up. That will help close the price gap between gas and renewable energy.

Even so, there’s still a huge way to go before prices and government policies do enough to significantly reduce emissions of the gases that contribute to global warming.

Source: www.npr.org

But it’s the type of thin-film solar panels and where the photovoltaic power plant will be built that foreshadows a potentially sizable business opportunity as well as a way to maximize renewable energy production.

Energy producer Invenergy will build the Grand Ridge Solar project in Illinois adjacent to its 210-megawatt wind farm. (Powered, not coincidentally, by GE wind turbines.)

By pairing wind and solar farms, Invenergy makes more efficient use of the transmission system, given that both sources of electricity are intermittent and tend to hit peak production at different times of day. That helps power grid operators balance supply and demand.

“You put those two together you have a much more dispatchable and local renewable system,” Victor Abate, vice president of GE’s renewable energy business, told me Thursday. “We’ve built 30 gigawatts of wind farms so adding solar is a good utilization of assets.”

Abate says it’s too early to tell how big a market that could be but notes that installing solar at just 10% of those wind farm sites would sell out GE’s solar panel production for the next five or six years.

The company is building the U.S.’s largest solar panel factory in Colorado, which will annually manufacture 400 megawatts of cadmium-telluride thin-film photovoltaic panels. (That poses a competitive threat to First Solar, the industry leader that dominates the market for cadmium-telluride solar panels.)

But GE will be supplying a different type of thin-film solar panels made by Japan’s Solar Frontier to the Invenergy project in Illinois. It’s the second win this week for Solar Frontier’s CIGS (copper indium gallium selenide) technology.

On Monday, renewable energy developer enXco announced that it would build a 150-megawatt solar farm in the Southern California desert using Solar Frontier panels near its wind farms in the Tehachapi Mountains. Those wind and solar farms will share a 4,500-megawatt renewable energy transmission line under construction in the Tehachapi.

That is by far the biggest deployment of CIGS technology, which a number of Silicon Valley startups have been working on for years to commercialize as it promises cheaper solar electricity through by lowering production costs.

Source: www.forbes.com

The latest Energy Statistics (PDF) from the Department of Energy and Climate Change (DECC) show that, over the first three quarters of 2011, Scotland delivered 94 per cent of last year’s totals and 83 per cent of the previous record year.

The Scottish government said that, if the trend continues over the fourth quarter, 2011 will be a record year for renewable electricity in Scotland.

It added that the country’s goal of 100 per cent green energy by 2020 is also on track, as the statistics reveal sufficient capacity in Scotland to meet its interim target of 31 per cent of electricity demand from renewables in 2011.

Installed capacity reached a record high of 4.3GW over the year, while Scotland continued to be a net exporter of electricity in 2010, exporting 21 per cent of electricity generated.

Scottish energy minister Fergus Ewing said that £750m worth of renewables projects were switched on in 2011, while another £46bn worth are in the pipeline.

“2011 has been an exceptional year for renewable energy in Scotland,” he said in a statement. “These figures show that it is on course to be truly the best year yet.”

DECC’s figures also show that the amount of electricity from renewable sources in the UK’s overall energy mix increased by almost 12 per cent on the previous year to 7.45 terawatt hours (TWh). The contribution of coal and gas fell by around four and six per cent respectively to 19TWh and 38TWh, while nuclear shot up 21 per cent to around 16TWh.

Renewables’ share of electricity generation increased from just over eight per cent in the third quarter of 2010 to nine per cent a year later, while overall renewable electricity capacity stood at 10.2GW.

The amount of electricity from onshore wind fell 2.4 per cent to 1.9TWh, but growing offshore wind capacity sparked a 30.5 per cent increase and high rainfall saw hydro generation rise 41.3 per cent.

The figures come as the government gave its consent today for a 53MW biomass station in Yorkshire, the eighth GW and 15th power station approved this year, which marks a new record for capacity consented since the Electricity Act came into force in 1989.

Developer Dalkia’s plant at the former RAF airfield at Pollington will be fuelled by 360,000 tonnes of waste wood per year, set to be delivered to the site via the Aire and Calder Navigation Canal.

“It has been a priority for this administration to remove the backlog in planning applications [and] to demonstrate our commitment to economic growth,” said energy minister Charles Hendry. “A record number of decisions shows that we have delivered on this, helping ensure our long-term energy security and creating jobs.”

Source: www.guardian.co.uk

Bidding for the complex is under way, with the farm expected to come online in 2016, Hassan Younis, Egypt’s minister of electricity, said at a wind energy conference in Cairo last month. The contract will be awarded before the year is out, Professor Galal Osman, the president of the Egyptian Wind Energy Association, told The National yesterday.

The tender represents one of several wind energy projects that are intended to provide a total of 7,200 megawatts by the end of the decade. Egypt generates only 550 megawatts from wind.

Yet the Egyptian government hopes that, together with solar and thermal power, wind energy will cover 20 per cent of all domestic electricity demand by 2020. Wind turbines will provide 12 per cent of all alternative energy, said Prof Osman, as the government is looking to capitalise on its vast potential.

“The wind conditions in Egypt are among the best in the world,” said Stefan Gsänger, the secretary general of the World Wind Energy Association, which organised the Cairo conference.

Existing capacity is state-owned, but a two-step plan is in place to introduce private ownership. While 33 per cent of the added capacity will be owned by the government, the remaining 4,825 megawatts will be generated by private companies under the build-own-operate (BOO) model.

Experts believe that private investment in wind energy will depend on the introduction of a feed-in tariff, which reimburses producers for the cost of production not covered by electricity prices. Feed-in tariffs are in place in virtually every country that generates electricity from wind or solar power. In the Middle East, where fossil fuels are heavily subsidised, renewable energy would not be competitive without financial incentives. “With existing subsidies, investment in renewables is not viable without compensation,” Mr Gsänger said.

Egypt is working on a feed-in tariff, scheduled to come into existence next year. It will be based on the prices quoted by private companies bidding for the BOO contracts, Mr Osman said.

Investing in wind power not only diversifies Egypt’s electricity sources, it will also provide the government with an opportunity to create much-needed jobs. High unemployment, especially among the young, was the primary reason behind the popular unrest that unseated Hosni Mubarak, the president, after 31 years in power.

“A well-established wind energy industry can create tens of thousands of jobs,” Mr Gsänger said.

Source: www.thenational.ae

Underlining the government’s seriousness in changing the country’s energy matrix, Germany’s Kreditanstalt fur Wiederaufbau (German Development Bank) is to underwrite renewable energy and energy efficiency investments in Germany with $137.3 billion over the next five years, Germany Trade and Invest reported. Overall, the German government’s 6th Energy Research Program has made an extraordinary $274.6 billion available for joint funding initiatives in energy storage research over the next three years.

It is by any yardstick an extraordinary (and expensive) commitment that may well have the collateral benefit of unlocking similar funding worldwide for renewable energy projects.

The new Kreditanstalt fur Wiederaufbau loans and projects are designed to underwrite a broad array of energy areas, including energy efficiency and smart grids, as well as wind and solar energy generation. Last year Kreditanstalt fur Wiederaufbau financed 40 percent of all photovoltaic installations in Germany.

Germany is already the world’s strongest photovoltaic market and also accounts for Europe’s largest share of installed wind capacity. Moving resolutely into the field of renewable energy, by 2020, renewable energy sources are expected to account for 35 percent of Germany’s energy output, soaring to 80 percent by 2050. Germany now produces 20 percent of its electricity from renewable energy sources, now, up from just 6 percent in 2000. The effort is in turn creating thousands of jobs and new industries.

Industry expert Tobias Homann observed, “With the decision to abandon nuclear power earlier this year, it was clear that the road ahead would be challenging. But Germany is in a very promising position to be the first industrialized country to rely entirely on renewable energy.”

One of the current major shortfalls of the renewable energy market is its inability to store generated energy but Germany is working on this dilemma, focusing on the development of battery and smart grid technology.

According to Germant Trade & Invest CEO Jurgen Friedrich, “Germany has established the ideal prerequisites for the rapid development of the energy storage industry. The unique combination of renewable energy generation, innovation and implementation through such projects makes Germany an optimal location for companies looking to enter this budding industry.”

Germany is also assiduously pursuing improving solar technology. Germany’s photovoltaic installations and solar facilities recently surpassed hydropower in Germany’s total energy generation matrix.

In the area of offshore wind power generation, Germany projects 4,000 turbines off its Baltic coast producing electricity by 2030. Germany’s northeastern Mecklenburg-Vorpommern state on the Baltic will produce 100 percent of its electricity from renewables by 2015-2017, and then export the excess to other German states. Mecklenburg-Vorpommern premier Erwin Selling told reporters, “Renewable energy has become extremely valuable for our state. It’s just a great opportunity – producing renewable energy and creating manufacturing jobs. From an industrial point of view we’d been one of Germany’s weaker areas. But the country is abandoning nuclear power. That will work only if there’s a corresponding and substantial increase in renewables. It’ll be one of Germany’s most important sectors in the future. We want to be up there leading the way.”

The picture is not completely rosy, however – there have been delays in expanding and upgrading the national grid of high-voltage transmission lines from sparsely populated coastal regions such as Mecklenburg-Vorpommern to areas where the power is needed in Germany industrial and densely populated western and southern regions. While Berlin is working to remove infrastructure bottlenecks, if the nation’s electrical grid is not expanded soon it could cause future problems when more off-shore wind power goes on line.

Such problems aside however, Germany, as Europe’s leading creditor nation and technological powerhouse is surging forward on weaning itself off of nuclear energy and strongly moving towards alternative renewable energy sources, an experiment that will doubtless be watched by other industrialized societies from Tokyo to Washington.

Source: www.oilprice.com