Published: August 27 2008 19:20
Anyone who went off to the beach a month ago in the expectation that the future of Britain’s nuclear industry had been settled will be returning to a serious disappointment. The structure of the industry is still undecided, while the government maintains the fiction that it is a question that can be resolved by the private sector alone. With the security of Britain’s energy supplies at stake, this muddle and confusion is dismaying.
British Energy is the UK’s principal nuclear generator and owns the great majority of its reactors and most of the best sites for building new ones. At the end of July it seemed that it would fall into the hands of Electricité de France. The deal would have had problematic consequences for competition in Britain’s electricity market, but would have secured EDF’s expertise and financial strength for the UK nuclear industry.
At the eleventh hour, with both companies preparing to announce a deal, the takeover fell through because of resistance from Invesco and M&G, British Energy’s two biggest institutional shareholders. But responsibility for the collapse of the deal is shared with the government, which provided less than wholehearted support for the French bid. The tough conditions it attached to selling its 35 per cent stake in the company gave unhappy investors the leverage they needed to hold out for a higher price. While EDF remains interested in buying British Energy, a deal that can win over dissident shareholders is as far away as ever.
British Energy’s fall-back strategy is to engage in a series of ad hoc joint ventures with partners including EDF and other big European energy groups to build new nuclear power stations. But until the company’s future is resolved, potential investors will be uncertain about crucial factors, such as the structure of the industry and the availability of sites. The UK does not have the luxury of indefinite time to debate its options. Perhaps a third of the country’s generating capacity is likely to go out of service in the next decade, and new nuclear power stations are urgently needed to replace it.
If the government sold its 35 per cent stake to EDF regardless of the attitude of the institutional shareholders, it would resuscitate the French bid. The government’s reticence over British Energy is legitimately motivated: it does not want to be seen to be dirigiste, and it does not want to sell its stake too cheaply. But it needs to act quickly. If the lights are to be kept on in the 2020s, its laisser faire attitude must change.
Copyright The Financial Times Limited 2008
Thursday, 28 August 2008
TVA asks government to renew nuclear plant permits
The Associated Press
Published: August 28, 2008
KNOXVILLE, Tennessee: The Tennessee Valley Authority, faced with growing electricity demand and rising coal costs, asked regulators Wednesday to renew construction permits for two unfinished nuclear reactors it virtually abandoned 20 years ago.
Knoxville, Tennessee-based TVA, among the first to join a recent push to build new reactors around the country, hasn't decided whether it will complete the Unit 1 and 2 reactors at the Bellefonte site near Scottsboro, Alabama. But it has budgeted $10 million this year to study what would be involved.
The request is complicated by another project TVA is considering for the same site — two additional reactors for which TVA has applied for a combined construction and operating license with partner NuStart Energy Development LLC.
Nuclear Regulatory Commission spokesman Ken Clark said TVA's environmental reviews for the new reactors assumed they would use cooling towers and other infrastructure built for the older unfinished reactors but didn't account for the finishing of the older reactors.
Now, the NRC staff will have to decide if the old construction permits for Units 1 and 2 can be reactivated or if new permits will be required, Clark said.
TVA has made no final decision on whether to build any of the four reactors.
TVA Chief Operating Officer Bill McCollum said Wednesday the federal utility will need to add a major new power plant or reactor every five to seven years to meet growing demand. TVA supplies electricity to 8.8 million consumers in Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina and Virginia.
Published: August 28, 2008
KNOXVILLE, Tennessee: The Tennessee Valley Authority, faced with growing electricity demand and rising coal costs, asked regulators Wednesday to renew construction permits for two unfinished nuclear reactors it virtually abandoned 20 years ago.
Knoxville, Tennessee-based TVA, among the first to join a recent push to build new reactors around the country, hasn't decided whether it will complete the Unit 1 and 2 reactors at the Bellefonte site near Scottsboro, Alabama. But it has budgeted $10 million this year to study what would be involved.
The request is complicated by another project TVA is considering for the same site — two additional reactors for which TVA has applied for a combined construction and operating license with partner NuStart Energy Development LLC.
Nuclear Regulatory Commission spokesman Ken Clark said TVA's environmental reviews for the new reactors assumed they would use cooling towers and other infrastructure built for the older unfinished reactors but didn't account for the finishing of the older reactors.
Now, the NRC staff will have to decide if the old construction permits for Units 1 and 2 can be reactivated or if new permits will be required, Clark said.
TVA has made no final decision on whether to build any of the four reactors.
TVA Chief Operating Officer Bill McCollum said Wednesday the federal utility will need to add a major new power plant or reactor every five to seven years to meet growing demand. TVA supplies electricity to 8.8 million consumers in Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina and Virginia.
Britain a nation of environmental hypocrites
Britain is a nation of "eco-hypocrites", with people ready to adopt a green lifestyle at home but not abroad on holiday, a study has found.
By David Millward, Transport Editor Last Updated: 10:30PM BST 27 Aug 2008
The worst culprits tend to be young and in full-time jobs, according to research carried out by Essex University, with just over half of those questioned found to be only part-time environmentalists.
"They are the sort of people who say that they are 100 per cent committed to the environment at home," said Stewart Barr, from Exeter University's geography department
"They will say they are good for 48 weeks of the year, but for the other four they want to be let off."
This behaviour manifests itself in recycling while in the UK. The eco-hypocrite will also buy environmentally-friendly products, save energy and cut down on their water consumption.
Their homes will use energy-efficient light-bulbs, there is a fair chance the eco-hypocrite will also have a small car.
But when they are abroad, such constraints do not apply, Dr Barr added.
They will take bigger baths and will not take part in carbon-offsetting schemes by donating to an environmentally beneficial scheme to compensate for the damage their flight has caused.
This group accounted for 52 per cent of the 202 people questioned at length by Exeter University in a paper which was presented to the Royal Geographical Society.
They were also found to be sceptical about climate change and justified their behaviour by saying that what they did at home compensated for their few weeks of environmentally lax behaviour.
A smaller proportion of respondents were classified as "eco-conscious".
Accounting for 26 per cent of those who participated in the survey, this group behaved in an environmental manner at home and abroad.
However they were found to take more flights than eco-hypocrites, but were three times more likely to participate in a carbon-offsetting scheme.
This group, who tended to be older and in many cases had retired, were more likely to take long-haul holidays – but only to see the natural wonders of the world.
The true environmental saints, classified as "eco-conscious" only accounted for 22 per cent of the survey.
They saved water and energy at home and abroad. However 76 per cent of them were took overseas holidays compared to 66 per cent of "eco-hypocrites".
By David Millward, Transport Editor Last Updated: 10:30PM BST 27 Aug 2008
The worst culprits tend to be young and in full-time jobs, according to research carried out by Essex University, with just over half of those questioned found to be only part-time environmentalists.
"They are the sort of people who say that they are 100 per cent committed to the environment at home," said Stewart Barr, from Exeter University's geography department
"They will say they are good for 48 weeks of the year, but for the other four they want to be let off."
This behaviour manifests itself in recycling while in the UK. The eco-hypocrite will also buy environmentally-friendly products, save energy and cut down on their water consumption.
Their homes will use energy-efficient light-bulbs, there is a fair chance the eco-hypocrite will also have a small car.
But when they are abroad, such constraints do not apply, Dr Barr added.
They will take bigger baths and will not take part in carbon-offsetting schemes by donating to an environmentally beneficial scheme to compensate for the damage their flight has caused.
This group accounted for 52 per cent of the 202 people questioned at length by Exeter University in a paper which was presented to the Royal Geographical Society.
They were also found to be sceptical about climate change and justified their behaviour by saying that what they did at home compensated for their few weeks of environmentally lax behaviour.
A smaller proportion of respondents were classified as "eco-conscious".
Accounting for 26 per cent of those who participated in the survey, this group behaved in an environmental manner at home and abroad.
However they were found to take more flights than eco-hypocrites, but were three times more likely to participate in a carbon-offsetting scheme.
This group, who tended to be older and in many cases had retired, were more likely to take long-haul holidays – but only to see the natural wonders of the world.
The true environmental saints, classified as "eco-conscious" only accounted for 22 per cent of the survey.
They saved water and energy at home and abroad. However 76 per cent of them were took overseas holidays compared to 66 per cent of "eco-hypocrites".
Xcel to Expand Greenhouse-Gas Data
By REBECCA SMITHAugust 28, 2008;
Xcel Energy Inc. agreed to expand its disclosures about the possible impact of climate-change and greenhouse-gas legislation on its business in response to a 2007 subpoena from the New York attorney general.
Xcel Energy
Xcel Energy, a major owner of coal-fired plants, agreed to expand disclosures about the possible impact of climate-change and greenhouse-gas legislation on its business.
The settlement is "an effort to create a new model" for climate-change disclosures to investors, said Katherine Kennedy, New York's special deputy attorney general for environmental protection.
Xcel, a Minneapolis-based energy company, doesn't own any generating plants in New York but it is a major owner of coal-fired plants in other states and is building an additional plant in Colorado, its first such plant in almost three decades.
New York's attorney general, Andrew Cuomo, last year issued subpoenas to Xcel and four other energy companies -- AES Corp., Dominion Resources Inc., Dynegy Inc. and Peabody Energy Corp. -- citing the 1921 Martin Act that gives his office broad powers to access internal documents of firms doing business in New York, even if the primary relationship is a listing on the New York Stock Exchange.
Several Eastern states have taken steps to discourage production of electricity from coal due to the air pollution that results, which can blow across state boundaries. New York has asserted a right to intervene in coal-plant proposals in other states by arguing that carbon dioxide accumulates in the atmosphere and affects the whole planet. The initial batch of Martin Act subpoenas related to climate change targeted firms with plans to build additional coal plants.
Under the agreement announced Wednesday, Xcel will beef up its disclosures in annual filings with the Securities and Exchange Commission. For example, there will be a more rigorous analysis of its perceived financial risk from existing laws and possible future laws, its actual and expected emissions levels, mitigation actions and other disclosures.
The company said that although it is building a big coal-burning power plant near Pueblo, Colo., it has been reducing carbon emissions in recent years and is one of the largest generators of electricity from wind turbines in the U.S. Xcel Chairman Dick Kelly said the firm "plans to continue making significant reductions in CO2 emission."
The settlement comes amid growing pressure from environmental organizations, state officials and investors to increase disclosures, partly to inform and partly to discourage business activities that worsen the carbon situation.
Dan Bakal, director of the electric-power program at Ceres, a coalition of investors, public interest and environmental organizations, said the Xcel move "hopefully will raise the bar on disclosure" by other firms. His organization filed a petition with the SEC in September 2007 asking it to require deeper analysis and disclosure of climate-change issues and he said the Xcel action appears to conform to what his group is seeking.
Write to Rebecca Smith at rebecca.smith@wsj.com
Xcel Energy Inc. agreed to expand its disclosures about the possible impact of climate-change and greenhouse-gas legislation on its business in response to a 2007 subpoena from the New York attorney general.
Xcel Energy
Xcel Energy, a major owner of coal-fired plants, agreed to expand disclosures about the possible impact of climate-change and greenhouse-gas legislation on its business.
The settlement is "an effort to create a new model" for climate-change disclosures to investors, said Katherine Kennedy, New York's special deputy attorney general for environmental protection.
Xcel, a Minneapolis-based energy company, doesn't own any generating plants in New York but it is a major owner of coal-fired plants in other states and is building an additional plant in Colorado, its first such plant in almost three decades.
New York's attorney general, Andrew Cuomo, last year issued subpoenas to Xcel and four other energy companies -- AES Corp., Dominion Resources Inc., Dynegy Inc. and Peabody Energy Corp. -- citing the 1921 Martin Act that gives his office broad powers to access internal documents of firms doing business in New York, even if the primary relationship is a listing on the New York Stock Exchange.
Several Eastern states have taken steps to discourage production of electricity from coal due to the air pollution that results, which can blow across state boundaries. New York has asserted a right to intervene in coal-plant proposals in other states by arguing that carbon dioxide accumulates in the atmosphere and affects the whole planet. The initial batch of Martin Act subpoenas related to climate change targeted firms with plans to build additional coal plants.
Under the agreement announced Wednesday, Xcel will beef up its disclosures in annual filings with the Securities and Exchange Commission. For example, there will be a more rigorous analysis of its perceived financial risk from existing laws and possible future laws, its actual and expected emissions levels, mitigation actions and other disclosures.
The company said that although it is building a big coal-burning power plant near Pueblo, Colo., it has been reducing carbon emissions in recent years and is one of the largest generators of electricity from wind turbines in the U.S. Xcel Chairman Dick Kelly said the firm "plans to continue making significant reductions in CO2 emission."
The settlement comes amid growing pressure from environmental organizations, state officials and investors to increase disclosures, partly to inform and partly to discourage business activities that worsen the carbon situation.
Dan Bakal, director of the electric-power program at Ceres, a coalition of investors, public interest and environmental organizations, said the Xcel move "hopefully will raise the bar on disclosure" by other firms. His organization filed a petition with the SEC in September 2007 asking it to require deeper analysis and disclosure of climate-change issues and he said the Xcel action appears to conform to what his group is seeking.
Write to Rebecca Smith at rebecca.smith@wsj.com
New steam technology to turn car engine's waste heat into power
Steam power may have an old-fashioned image, but British engineers think it can improve the efficiency of the internal combustion engine
James Randerson, science correspondent
guardian.co.uk,
Wednesday August 27 2008 14:25 BST
Say "steam power" and you conjure up images of Stevenson's rocket, Isambard Kingdom Brunel and the heyday of the Victorian railways – romantic, but hardly the stuff of a clean, cutting-edge technology.
But steam could be about to make a comeback thanks to a company that is trying to make the internal combustion engine more efficient.Clean Power Technologies, in Newhaven on the English south coast, is developing steam hybrid engines that claw back some of the immense amount of energy wasted by the internal combustion engine. Ultimately they aim to develop a car engine that runs partly on steam power.
"When you talk of steam people think you are going backwards," said Abdul Mitha, the company's CEO and president, "Anywhere where you are wasting a lot of heat, we can go in, capture the heat and turn it into energy savings ... Steam has tremendous power. If it can drive a steam locomotive, why can't it drive an automotive engine?"
Mitha's company aims to target the wasted heat that is currently pumped out of the exhaust and convert it into useful power. Of the energy in your petrol tank, just 27% is converted into forward motion, 33% is spent cooling the engine, 4% is lost as friction and a whopping 36% is lost as exhaust heat. "There is a lot of heat that is created and totally wasted," said Mitha. Clean Power Technologies aims to recover 40% of this exhaust heat.
Dr Ralph Clague, a mechanical engineer at Imperial College London, thinks the strategy is a good one: "Recycling exhaust heat and energy that is rejected from the engine has got to be the way forward in the future." He said there has been little incentive to improve the efficiency of the internal combustion engine in the past. "A tank of petrol or a tank of diesel is such an incredibly good energy store that we have been able to afford to throw some of it away up until now."
Clean Power Technologies has developed an experimental set up in which engine exhaust at 750C – typical for a lorry – is run through a steam accumulator. This closed vessel allows water to be heated to 360C or hotter, creating high pressure steam that can then be used to provide useful power.
Ultimately, the aim is to pipe the steam back into the main engine and use it to drive some of the pistons, but the first step for the company is using it to run the refrigeration units on trucks that transport frozen goods. They are currently building a demonstration truck that will be finished by the end of October. They have links with Safeway supermarkets in the US and a haulage firm East-West Express Transportation in Calgary who are interested in fitting the technology to their vehicles. Currently each Safeway truck uses $10,000 to $15,000 (£5,400 to £8,000) worth of diesel per year to power the separate refrigeration unit.
Once the truck refrigeration units are up and running the company will concentrate on marine applications, such as providing power for air conditioning and electrics for boats. By the end of 2011 they aim to have created a steam hybrid car. "Any technology that can be gradually introduced like that is a very sensible idea. So I think they are doing exactly the right thing," said Clague.
He said that although similar ideas have floated around the engineering community for years, Clean Power Technologies appears to be furthest ahead in making them a commercial reality. "It's a perfectly feasible idea, certainly. It adds complexity to the engine and therefore cost and I think that's why we haven't seen it before," he said, "Obviously now with rising oil prices etc it becomes essential to extract more energy from the fuel you are putting in."
James Randerson, science correspondent
guardian.co.uk,
Wednesday August 27 2008 14:25 BST
Say "steam power" and you conjure up images of Stevenson's rocket, Isambard Kingdom Brunel and the heyday of the Victorian railways – romantic, but hardly the stuff of a clean, cutting-edge technology.
But steam could be about to make a comeback thanks to a company that is trying to make the internal combustion engine more efficient.Clean Power Technologies, in Newhaven on the English south coast, is developing steam hybrid engines that claw back some of the immense amount of energy wasted by the internal combustion engine. Ultimately they aim to develop a car engine that runs partly on steam power.
"When you talk of steam people think you are going backwards," said Abdul Mitha, the company's CEO and president, "Anywhere where you are wasting a lot of heat, we can go in, capture the heat and turn it into energy savings ... Steam has tremendous power. If it can drive a steam locomotive, why can't it drive an automotive engine?"
Mitha's company aims to target the wasted heat that is currently pumped out of the exhaust and convert it into useful power. Of the energy in your petrol tank, just 27% is converted into forward motion, 33% is spent cooling the engine, 4% is lost as friction and a whopping 36% is lost as exhaust heat. "There is a lot of heat that is created and totally wasted," said Mitha. Clean Power Technologies aims to recover 40% of this exhaust heat.
Dr Ralph Clague, a mechanical engineer at Imperial College London, thinks the strategy is a good one: "Recycling exhaust heat and energy that is rejected from the engine has got to be the way forward in the future." He said there has been little incentive to improve the efficiency of the internal combustion engine in the past. "A tank of petrol or a tank of diesel is such an incredibly good energy store that we have been able to afford to throw some of it away up until now."
Clean Power Technologies has developed an experimental set up in which engine exhaust at 750C – typical for a lorry – is run through a steam accumulator. This closed vessel allows water to be heated to 360C or hotter, creating high pressure steam that can then be used to provide useful power.
Ultimately, the aim is to pipe the steam back into the main engine and use it to drive some of the pistons, but the first step for the company is using it to run the refrigeration units on trucks that transport frozen goods. They are currently building a demonstration truck that will be finished by the end of October. They have links with Safeway supermarkets in the US and a haulage firm East-West Express Transportation in Calgary who are interested in fitting the technology to their vehicles. Currently each Safeway truck uses $10,000 to $15,000 (£5,400 to £8,000) worth of diesel per year to power the separate refrigeration unit.
Once the truck refrigeration units are up and running the company will concentrate on marine applications, such as providing power for air conditioning and electrics for boats. By the end of 2011 they aim to have created a steam hybrid car. "Any technology that can be gradually introduced like that is a very sensible idea. So I think they are doing exactly the right thing," said Clague.
He said that although similar ideas have floated around the engineering community for years, Clean Power Technologies appears to be furthest ahead in making them a commercial reality. "It's a perfectly feasible idea, certainly. It adds complexity to the engine and therefore cost and I think that's why we haven't seen it before," he said, "Obviously now with rising oil prices etc it becomes essential to extract more energy from the fuel you are putting in."
Czech CEZ invests in wind farm in Romania
The Associated Press
Published: August 27, 2008
PRAGUE, Czech Republic: The Czech Republic's dominant power utility, CEZ AS, said Wednesday it will invest a total of €1.1 billion (US$1.6 billion) in a 600-megawatt wind farm in Romania.
CEZ said the farm — located 10 miles (17 kilometers) from the Black Sea, north of the port of Constanta — is expected to become fully operational by the end of 2010.
The farm will eventually become Europe's largest onshore wind farm, CEZ said in a statement.
The Czech state owns a 65 percent stake at CEZ, which owns companies across central and eastern Europe.
Published: August 27, 2008
PRAGUE, Czech Republic: The Czech Republic's dominant power utility, CEZ AS, said Wednesday it will invest a total of €1.1 billion (US$1.6 billion) in a 600-megawatt wind farm in Romania.
CEZ said the farm — located 10 miles (17 kilometers) from the Black Sea, north of the port of Constanta — is expected to become fully operational by the end of 2010.
The farm will eventually become Europe's largest onshore wind farm, CEZ said in a statement.
The Czech state owns a 65 percent stake at CEZ, which owns companies across central and eastern Europe.
Solar Firms Wait on Tax Credit
By MARTIN VAUGHANAugust 27, 2008;
U.S. solar-energy companies that do business primarily in America would suffer most if Congress fails to renew expiring federal tax credits for solar energy.
Wall Street analysts and industry observers say firms such as Akeena Solar, Real Goods Solar Inc., and Solar Power Inc. will be most threatened in the event that tax credits are allowed to expire.
Larger solar firms that have customers outside the U.S., including SunPower and Spain's Abengoa Solar, may see their U.S. projects put on hold. But these firms have the ability to tap global markets to ensure continued growth.
Congress has been deadlocked for months over legislation to extend investment tax credits for new solar-energy projects, which are slated to expire at the end of this year. Lawmakers are expected to mount an 11th-hour effort in September to reach agreement on a tax package for solar and other renewable energy sources before suspending their work, possibly until 2009.
Historically, there's always been a last-minute fight, but the credits typically get extended. Still, there remains a risk.
Brion Tanous, a clean-energy analyst with Merriman Curhan Ford, this month downgraded Akeena Solar to "neutral" from "buy." "Akeena will be one of the companies hit hardest if the tax credit fails to get extended," he said. "The companies that can ride through this are the ones that have a more global presence."
Renewable Mandates
Interest in solar energy as an electricity source has taken off in recent months, from large-scale utility projects to rooftop installations at retail outlets, including Kohl's Corp. department stores and the REI sporting-goods chain. But representatives for Macy's Inc. and REI said any plans to install rooftop solar systems in 2009 will depend upon whether the tax credit is available. REI has installed or plans to install systems on 11 of its U.S. stores this year.
Solar projects have been driven by high prices of coal and natural gas and by renewable energy mandates from California and other states. In the retailers' case, solar power affords a chance to burnish corporate images with the cachet of green technology.
Earlier this month, Pacific Gas & Electric Corp. announced an agreement with SunPower and OptiSolar Inc. to build an 800-megawatt photovoltaic energy plant, the largest project of its kind in the U.S.
Such large-scale electric-power projects wouldn't be economically feasible if not for the 30% federal tax credit. Failure to renew the tax credit by the end of the year would cause some projects to grind to a halt.
Uncertainty surrounding the credit is already affecting purchasing decisions at Abengoa's Gila Bend, Ariz., project, scheduled to be in place by 2012.
Fred Morse, senior adviser for Abengoa's U.S. operations, said permits for the facility won't be finalized before September 2009. But financing has been put on hold until the fate of the tax credit is clearer, and project managers have watched steel prices rise by as much as 70% in the meantime, said Mr. Morse.
"The tax credit is the missing ingredient. When that is passed and extended long enough, we'll have the cash on hand to start purchasing," he said.
Even if the tax credit lapses, such companies as Abengoa can look to ample overseas demand for growth opportunities. Not so with smaller, U.S.-based firms.
'Falling By the Wayside'
Barry Cinnamon, chief executive of Akeena Solar, said in an interview that a slowdown in commercial projects in the second half of 2008 due to uncertainty over the tax credit will stunt growth for his company in 2008.
"As we get closer to the expiration of the credit, the bigger jobs are falling by the wayside," he said.
If Congress fails to renew the tax credit, Akeena and other U.S.-based solar companies will look to residential demand to pick up some of the slack.
"I don't believe [the tax credit's expiration] would have a big impact on our growth. We have and continue to have a robust residential business," said Mr. Cinnamon.
The federal tax credit is less of a factor in the economics of most residential projects than it is in commercial ones. Now capped at $2,000, the tax credit will offset only a fraction of the cost of residential projects, which can cost $40,000 or more. That contrasts with the tax credit available for commercial facilities, which offsets up to 30% of installation costs.
"The thing that's driving the residential business is energy rates" from conventional energy sources, said Julie Blunden, vice president for public policy and corporate communications at SunPower.
As long as prices for coal and other conventional sources remain high, demand for residential installation will grow, independently of what's happening with the federal subsidy, she said.
But solar-energy analyst Mark Bachman of Pacific-Crest Securities notes that other factors -- including shrinking homeowner equity due to the housing slump -- may damp residential demand.
Blocked in the Senate
The House of Representatives passed legislation in May to extend the solar-investment tax credit through 2014. A bill pending in the Senate includes an 8-year extension, through 2016. Both bills would raise the cap on the residential tax credit to $4,000 from $2,000 per year.
The solar tax credits are widely supported, but Senate Republicans have blocked the broader tax bill because they object to Democrats' use of loophole-closers and tax increases to offset the cost of tax incentives for renewable energy and other tax cuts.
The solar tax-credit provision and other tax-cut extensions might make it across the finish line if they are part of a broader deal on energy when Congress returns. Another possibility is that Congress would pass a shorter extension of one year, preventing expiration but effectively punting a decision until the next Congress.
Write to Martin Vaughan at martin.vaughan@dowjones.com
U.S. solar-energy companies that do business primarily in America would suffer most if Congress fails to renew expiring federal tax credits for solar energy.
Wall Street analysts and industry observers say firms such as Akeena Solar, Real Goods Solar Inc., and Solar Power Inc. will be most threatened in the event that tax credits are allowed to expire.
Larger solar firms that have customers outside the U.S., including SunPower and Spain's Abengoa Solar, may see their U.S. projects put on hold. But these firms have the ability to tap global markets to ensure continued growth.
Congress has been deadlocked for months over legislation to extend investment tax credits for new solar-energy projects, which are slated to expire at the end of this year. Lawmakers are expected to mount an 11th-hour effort in September to reach agreement on a tax package for solar and other renewable energy sources before suspending their work, possibly until 2009.
Historically, there's always been a last-minute fight, but the credits typically get extended. Still, there remains a risk.
Brion Tanous, a clean-energy analyst with Merriman Curhan Ford, this month downgraded Akeena Solar to "neutral" from "buy." "Akeena will be one of the companies hit hardest if the tax credit fails to get extended," he said. "The companies that can ride through this are the ones that have a more global presence."
Renewable Mandates
Interest in solar energy as an electricity source has taken off in recent months, from large-scale utility projects to rooftop installations at retail outlets, including Kohl's Corp. department stores and the REI sporting-goods chain. But representatives for Macy's Inc. and REI said any plans to install rooftop solar systems in 2009 will depend upon whether the tax credit is available. REI has installed or plans to install systems on 11 of its U.S. stores this year.
Solar projects have been driven by high prices of coal and natural gas and by renewable energy mandates from California and other states. In the retailers' case, solar power affords a chance to burnish corporate images with the cachet of green technology.
Earlier this month, Pacific Gas & Electric Corp. announced an agreement with SunPower and OptiSolar Inc. to build an 800-megawatt photovoltaic energy plant, the largest project of its kind in the U.S.
Such large-scale electric-power projects wouldn't be economically feasible if not for the 30% federal tax credit. Failure to renew the tax credit by the end of the year would cause some projects to grind to a halt.
Uncertainty surrounding the credit is already affecting purchasing decisions at Abengoa's Gila Bend, Ariz., project, scheduled to be in place by 2012.
Fred Morse, senior adviser for Abengoa's U.S. operations, said permits for the facility won't be finalized before September 2009. But financing has been put on hold until the fate of the tax credit is clearer, and project managers have watched steel prices rise by as much as 70% in the meantime, said Mr. Morse.
"The tax credit is the missing ingredient. When that is passed and extended long enough, we'll have the cash on hand to start purchasing," he said.
Even if the tax credit lapses, such companies as Abengoa can look to ample overseas demand for growth opportunities. Not so with smaller, U.S.-based firms.
'Falling By the Wayside'
Barry Cinnamon, chief executive of Akeena Solar, said in an interview that a slowdown in commercial projects in the second half of 2008 due to uncertainty over the tax credit will stunt growth for his company in 2008.
"As we get closer to the expiration of the credit, the bigger jobs are falling by the wayside," he said.
If Congress fails to renew the tax credit, Akeena and other U.S.-based solar companies will look to residential demand to pick up some of the slack.
"I don't believe [the tax credit's expiration] would have a big impact on our growth. We have and continue to have a robust residential business," said Mr. Cinnamon.
The federal tax credit is less of a factor in the economics of most residential projects than it is in commercial ones. Now capped at $2,000, the tax credit will offset only a fraction of the cost of residential projects, which can cost $40,000 or more. That contrasts with the tax credit available for commercial facilities, which offsets up to 30% of installation costs.
"The thing that's driving the residential business is energy rates" from conventional energy sources, said Julie Blunden, vice president for public policy and corporate communications at SunPower.
As long as prices for coal and other conventional sources remain high, demand for residential installation will grow, independently of what's happening with the federal subsidy, she said.
But solar-energy analyst Mark Bachman of Pacific-Crest Securities notes that other factors -- including shrinking homeowner equity due to the housing slump -- may damp residential demand.
Blocked in the Senate
The House of Representatives passed legislation in May to extend the solar-investment tax credit through 2014. A bill pending in the Senate includes an 8-year extension, through 2016. Both bills would raise the cap on the residential tax credit to $4,000 from $2,000 per year.
The solar tax credits are widely supported, but Senate Republicans have blocked the broader tax bill because they object to Democrats' use of loophole-closers and tax increases to offset the cost of tax incentives for renewable energy and other tax cuts.
The solar tax-credit provision and other tax-cut extensions might make it across the finish line if they are part of a broader deal on energy when Congress returns. Another possibility is that Congress would pass a shorter extension of one year, preventing expiration but effectively punting a decision until the next Congress.
Write to Martin Vaughan at martin.vaughan@dowjones.com
Viruses rule the deep sea
Posted by Alla Katsnelson
[Entry posted at 27th August 2008 06:00 PM GMT]
Viruses in the deepest ocean environments are unexpectedly strong regulators of the deep sea biosphere, according to a paper published tomorrow (August 28) in Nature. By infecting and killing bacteria and other prokaryotes viruses are the main producers of the organic matter that sustains life at 1000 meters deep and below. By generating this biomass, viruses also make major contributions to the carbon cycle and other geochemical processes. "This shows that a very large amount of the carbon that reaches the sea floor is going through pathways that were commonly thought to be relatively minor," said Jed Fuhrman, an ocean biologist at the University of Southern California who was not involved in the study. "The whole idea that viruses have any significance in marine systems is only 15 to 20 years old." Approximately 65% of the Earth is dominated by deep sea, or benthic, ecosystems. The sea floor is one of the hardest environments for research, Fuhrman explained, because of the distances and logistical challenges involved in conducting experiments. The researchers, led by Roberto Danovaro of the Polytechnic University of Marche, Italy, collected 232 samples of sediment from the deep sea. They found that viruses were surprisingly abundant in their samples, and that they were reproducing locally, rather than migrating down from surface waters. The deeper the water, the more virus-induced death they observed in the bacteria, with viral infection responsible for about 80% of bacterial death in the deep sea samples. "The viruses are the key agents of mortality in bacteria," said Antonio Dell'Anno of the Polytechnic University of Marche, Italy, an author on the study. "The result is a huge amount of organic material released by killing these cells," which in turn "represents new food for other cells that have not been infected by viruses," he said. It's also a carbon source that acts as "a sort of shunt," he explained, regulating the metabolism of the deep sea. Virus-induced bacterial death, the researchers estimate, produces as much as 0.37 to 0.63 gigatonnes of carbon each year. The fact that the turnover of biomass is so dynamic came as a surprise to researchers, he said. "Previously, people hadn't thought about viruses when they did their benthic modeling," said Fuhrman, adding that the study's strength lies in the fact that the researchers collected data from many deep ocean locations. The discovery that there's such a high degree of carbon production in deep sea environments means that researchers will now have to adapt their models of ocean functioning and how it contributes to the overall carbon cycle, both he and Dell'Anno noted.
[Entry posted at 27th August 2008 06:00 PM GMT]
Viruses in the deepest ocean environments are unexpectedly strong regulators of the deep sea biosphere, according to a paper published tomorrow (August 28) in Nature. By infecting and killing bacteria and other prokaryotes viruses are the main producers of the organic matter that sustains life at 1000 meters deep and below. By generating this biomass, viruses also make major contributions to the carbon cycle and other geochemical processes. "This shows that a very large amount of the carbon that reaches the sea floor is going through pathways that were commonly thought to be relatively minor," said Jed Fuhrman, an ocean biologist at the University of Southern California who was not involved in the study. "The whole idea that viruses have any significance in marine systems is only 15 to 20 years old." Approximately 65% of the Earth is dominated by deep sea, or benthic, ecosystems. The sea floor is one of the hardest environments for research, Fuhrman explained, because of the distances and logistical challenges involved in conducting experiments. The researchers, led by Roberto Danovaro of the Polytechnic University of Marche, Italy, collected 232 samples of sediment from the deep sea. They found that viruses were surprisingly abundant in their samples, and that they were reproducing locally, rather than migrating down from surface waters. The deeper the water, the more virus-induced death they observed in the bacteria, with viral infection responsible for about 80% of bacterial death in the deep sea samples. "The viruses are the key agents of mortality in bacteria," said Antonio Dell'Anno of the Polytechnic University of Marche, Italy, an author on the study. "The result is a huge amount of organic material released by killing these cells," which in turn "represents new food for other cells that have not been infected by viruses," he said. It's also a carbon source that acts as "a sort of shunt," he explained, regulating the metabolism of the deep sea. Virus-induced bacterial death, the researchers estimate, produces as much as 0.37 to 0.63 gigatonnes of carbon each year. The fact that the turnover of biomass is so dynamic came as a surprise to researchers, he said. "Previously, people hadn't thought about viruses when they did their benthic modeling," said Fuhrman, adding that the study's strength lies in the fact that the researchers collected data from many deep ocean locations. The discovery that there's such a high degree of carbon production in deep sea environments means that researchers will now have to adapt their models of ocean functioning and how it contributes to the overall carbon cycle, both he and Dell'Anno noted.
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