Obama victory signals rebirth of US environmental policy

• President-elect will send representatives to key climate change talks in Poland in three weeks' time• Election result greeted with optimism by environmental groups
John Vidal
guardian.co.uk,
Wednesday November 05 2008 14.42 GMT

US president-elect Barack Obama at his election night victory rally in Chicago. Photograph: Jewel Samad/AFP
President-elect Obama will shred the Bush administration's energy policies and introduce a major climate change bill in an attempt to bring the US back into the international environment fold according to his senior advisers.
Obama talked of the "planet in peril" in his acceptance speech – a clear reference to climate change. He will now send his own energy representatives to the UN's climate change talks in Poznam, Poland, in three weeks' time.
He is also expected to announce a goal of reducing US greenhouse gas emissions to 1990 levels by 2020 and then cutting them by 80% by 2050. This will be via a cap-and-trade system with carbon permits auctioned off to industries to encourage them to reduce emissions.
The initiative would match Britain's ambitious 80% target by 2050 and would see the US overtake Europe, which is committed only to a 60% cut in emissions by the same date
The election result was greeted ecstatically by US environment groups. Rodger Schlickeisen, the president of the Defenders of Wildlife Action Fund, said: "For the first time in nearly a decade, we can look to the future with a sense of hope that the enormous environmental challenges we face will begin to be addressed and that our air, land, water, and wildlife – and the overall health of our planet – will not be sacrificed to appease polluting industries and campaign contributors.
"It is difficult to describe the damage done by the Bush administration's misguided and destructive environmental policies. For eight years, the special interests have ruled, virtually dictating our conservation, environmental and energy policies."
European environment groups also welcomed what they hoped would be a radical new direction for US environmental policy. "Obama's victory will give crucial climate negotiations a much greater chance of success – the United States must face up to its international responsibilities and show positive global leadership in low-carbon economic development", said Andy Atkins, Friends of the Earth's executive director in London.
According to his manifesto, Obama climate change plans will be linked to a $175bn (£109bn) economic-stimulus package intended to revamp the US energy economy and kickstart new US environmental policy by creating five million new "green" jobs.
"That's going to be my number one priority when I get into office," Obama said of his "green recovery" plans shortly before his election. "A clean-energy economy can be the engine that drives us into the future in the same way the computer was the engine for economic growth over the last couple of decades."
Federal support will now be given to car companies to design fuel-efficient cars, a "green jobs corps" for unemployed youth will be set up to improve energy conservation in homes and community buildings, and science and research funding for clean energy will be doubled. In addition, consumers could get tax credits if they buy green cars or make homes energy efficient.
"He will put forward an energy bill ahead of a climate bill," said Kateri Callahan, president of the Alliance to Save Energy, an energy advocacy group in Washington that represents some of America's largest companies, including Areva and Dow Chemicals.
Renewables, including hydroelectricity from dams, generate 8% of US electricity now and Obama has said he wants 10% of electricity to come from them by 2012 and 25% by 2025. This still falls short of Europe where the plan is for renewables to generate 20% of all energy, including electricity, by 2020.
However, the global financial crisis could undermine many of his plans, some analysts have warned, with many clean technology companies expected to go out of business in the next 18 months.
Other analysts warned today that Obama could leave the UK trailing in the race to capitalise on the huge new opportunities for environmental technologies. Adrian Wilkes, chair of the Environmental Industries Commission said: "Obama has set out a comprehensive set of policies to support the US in the transition to a low-carbon and resource-efficient economy. This is a warning to Gordon Brown and Peter Mandelson that the UK risks falling behind in the race to develop the technologies of the future".
The environment was a clear winner in Congressional races, with seven of the 12 congressmen known as the "Dirty Dozen" lawmakers – who have consistently voted against clean energy and conservation – failing to keep their seats, ".
"The Dirty Dozen represent the biggest roadblocks in Congress on the road to America's clean energy future," said League of Conservation Voters' president, Gene Karpinski. "Siding with the oil industry at every turn, they have consistently voted against policies that would create jobs, ensure our national security, and guarantee a sustainable future for our country."

Recycling waste piles up as prices collapse

Lewis Smith, Environment Reporter

Thousands of tonnes of rubbish collected from household recycling bins may have to be stored in warehouses and former military bases to save them from being dumped after a collapse in prices.
Collection companies and councils are running out of space to store paper, plastic bottles and steel cans because prices are so low that the materials cannot be shifted. Collections of mixed plastics, mixed paper and steel reached record levels in the summer but the “bottom fell out of the market” and they are now worthless. The plunge in prices was caused by a sudden fall in demand for recycled materials, especially from China, as manufacturers reduced their output in line with the global economc downturn.
Local authorities and collection companies are so concerned about the mountains of paper, plastic bottles and cans that they are having to store that they have called for storage regulations to be eased.
Officials from the Environment Agency and the Department for Environment, Food and Rural Affairs are considering changing the regulations on the storage of recycled waste and are expected to issue new guidelines next week. They have been urged to relax the rules limiting the quantity of waste that can be stored and to allow it to be kept in secure warehouses or abandoned military bases and former airfields.

Steve Eminton, of letsrecycle.com, said: “Warehouses around Britain could start to be filled with waste paper, metal and plastic bottles. There's nowhere for these materials to go at the moment. It's rapidly becoming a very serious problem.”
He said that mountains of plastic bottles, paper and steel cans were likely to build up by the end of the year and that the problem would be exacerbated by the Christmas festivities, when a surge of packaging materials and drinks containers would fill recycling bins.
The speed at which prices collapsed has taken the recycling industry and local authorities by surprise and has been made worse because recycling rates are at record levels.
Jane Kennedy, the Environment Minister, will announce this morning that more than 90 per cent of local authorities are meeting or exceeding their household recycling targets. East Lindsey District Council has the highest recycling rate, with 58.4 per cent of all household rubbish, and 18 other authorities exceeded 50 per cent.
Stuart Foster, of Recoup, which advises on plastic recycling, said that mixed plastics had slumped from about £200 a tonne to the point of worthlessness in only four weeks. He was confident, however, that the low value would be temporary as at least three mixed-plastic facilities will open next year, reducing the nation's dependence on Chinese demand.
Mr Foster urged officials to be flexible on the regulations and said that with sensible management the plastic, paper and steel could be stored safely until prices rise. “We think there's light at the end of the tunnel but it's going to take some work,” he said.
Staff at Waste Resources Action Programme (Wrap) and the Local Government Association have begun investigating the extent of the problem.
A spokesman for the Local Government Association said: “The credit crunch has caused prices to fall in the materials and market and clearly this potentially has implications for councils.”
Steve Creed, of Wrap, said: “We think the current extremely low prices are likely to be temporary. Recovered materials are still a valuable resource. They have undergone similar price volatility in the past.”

The Incentives to Buy Hybrids Are Dwindling

By MIKE SPECTOR

The clock is ticking. Car buyers have until the end of the year to get a tax credit for buying a Honda Civic hybrid, one of the more popular fuel-saving vehicles on the market.
The dying tax credit is the latest in a series of changes chipping away at the financial incentives to buy a hybrid. Tax breaks tied to Toyota Motor Corp.'s strong-selling Prius, which gets about 46 miles a gallon, and its other hybrid models ended about a year ago. Now, the federal government is phasing out the same incentives on Honda Motor Co.'s Civic hybrid, which gets 42 miles a gallon.

Combine that with the fact that fuel prices have fallen from their historic highs above $4 a gallon this summer, and it's getting a lot more expensive to be an environmentally conscious driver.
Hybrid tax incentives start to go away when a car maker sells its 60,000th alternative-fuel vehicle, a level Toyota reached in mid-2006 and Honda hit in the third quarter of 2007. The amount of the tax credit is first reduced by 50% before disappearing altogether over several months. Honda's tax credit, currently $525, will be phased out by Dec. 31, according to the Internal Revenue Service. The Civic credit had been as high as $2,100 before the phase-out began in January 2008.
Sales of hybrids, though still only about 2% of the overall market, have grown rapidly since the Prius made its debut in the U.S. in 2000. Toyota and Honda were the first to have these vehicles in dealer showrooms when fuel prices started skyrocketing in the past few years.
Hybrids get better mileage because they pair a traditional internal-combustion engine with an electric motor, which is powered by a rechargeable battery. Electric motors boost power to the regular gas engine, allowing auto makers to install smaller, more-efficient motors in hybrid cars. Some hybrids run on electric power alone at low speeds, further saving fuel.
Less Economical
Higher sticker prices and lower fuel costs make hybrids less economical than their gas-engine counterparts because it takes far longer to earn back the hybrid's price premium through savings at the pump. Hybrids can cost anywhere from $2,000 to $7,000 more than conventionally powered cars. The Honda Civic hybrid retails for $21,954, compared with $17,820 for a conventional Civic, according to Edmunds.com, an auto-research firm.
The tax credits, created as part of the Energy Policy Act of 2005, effectively provide discounts on hybrids and other alternative-fuel cars up to $3,000 and sometimes even more, which help shorten that payback period.
For instance, let's say you buy a Honda Civic, which gets 42 mpg and currently has a $525 credit. Assume you drive 15,000 miles a year with gas prices at $2.91 a gallon. The Civic hybrid's price is some $4,000 higher than a gas-engine Civic, meaning it would take nearly 10 years to recoup the premium in gas savings, according to an Edmunds analysis.
Without the $525 credit, the payback period would be about a year longer, according to Edmunds. With the full $2,100 credit, the payback period would have been only six years.
"If you look at it strictly from a short-term payback perspective, without the tax credits, hybrids make absolutely no sense for the average driver," says Kim Korth, president of IRN Inc., a consulting firm in Grand Rapids, Mich. "The tax credit at least made it neutral, if not positive."
A Honda spokesman says the auto maker has no plans to discount its Civic hybrid in light of the disappearing credit. Next year, Honda is releasing a new Insight model, expected to be priced around $19,000, much cheaper than most other hybrids, though it will not be eligible for a tax credit.
In any event, many customers have grown accustomed to hybrids' higher prices and buy them to brandish their environmental credentials, not save money. So dealers and analysts don't expect Toyota and Honda hybrids to suffer disproportionately to other vehicles in today's depressed auto market.
Still, the built-in discount remains a lure for many shoppers. When the $3,150 tax credit on Toyota's Prius started to dwindle in October 2006, so too did its sales. "Prius sales fell off a cliff," says Earl Stewart, a Toyota dealer in Lake Park, Fla. "It was like someone turned the faucet off."
New Prius Incentives
Manufacturer discounts on hybrids have been rare, but that sales dip prompted Toyota to increase its incentives on the Prius, on top of any remaining government tax breaks. By March 2007, Toyota's average Prius discount had risen to $1,471 from just $54 the previous September, according to Edmunds. Prius sales eventually rebounded and have remained relatively strong over the past year or so. Mr. Stewart says his October Prius sales were the best in about a year despite tough economic conditions.
Manufacturers currently offering full tax credits for their hybrids include General Motors Corp. and Ford Motor Co. GM's 2008 Chevrolet Malibu hybrid, which gets about 27 mpg, offers a $1,300 credit. Ford's 2009 Escape hybrid, a small sport-utility vehicle that gets about 32 mpg, has a $3,000 credit for its two-wheel drive version. The same goes for Ford's two-wheel drive Mercury Mariner hybrid.

A full $2,350 tax credit attracted Steven Suher, a 63-year-old salesman in Seekonk, Mass., to Nissan Motor Co.'s Altima hybrid, which gets about 34 mpg. Nissan hasn't come close to selling 60,000 alternative-fuel vehicles, so buyers still get the full tax break on its hybrids.
In March, Mr. Suher bought an Altima hybrid for his wife. He liked it so much that he traded in his Subaru Tribeca to get one for himself. The tax break "was a big factor," Mr. Suher says. "That offset the difference considerably between the hybrid and the non-hybrid." (The Altima hybrid costs about $3,400 more than the non-hybrid model, according to Edmunds.)
Recouping the Premium
In Edmunds's analysis, it would still take about nine and a half years to recoup the Altima hybrid's premium at the pump. But that time frame would balloon to 16 years without the tax credit. With gas at $4 a gallon, it would take about seven years.
Another option for fuel-conscious drivers: clean diesel, which pollutes less in some cases than gasoline-powered cars. Volkswagen AG's 2009 Jetta sedan and Jetta SportWagen each offer a $1,300 tax break. Both get about 34 mpg, featuring turbocharged engines that run on ultra-low-sulfur diesel. Daimler AG's Mercedes-Benz also has a few small diesel SUVs that boast credits ranging from $900 to $1,800. Diesel fuel currently costs more than gasoline, but tends to be more efficient.
Of course, shoppers can also nab fuel-efficient conventionally powered small cars like the Toyota Corolla and Ford Focus. Both models get about 35 mpg and feature discounts in certain regions.
Some analysts say Congress could revisit the expiration of these tax credits in another round of economic stimulus legislation next year. But auto lobbyists expect lawmakers to focus any new incentives on the next wave of technological advances, such as electric plug-in cars.
Write to Mike Spector at mike.spector@wsj.com

Energy Policies Come Up Against Green Initiatives

The slumping economy has sent oil prices tumbling and taken the edge off consumer anxiety about gasoline prices. But energy and climate-change policy will still be significant issues for the new Congress and president.
President-elect Obama promised to fight global warming and reduce U.S. dependence on foreign oil. Now, he will have to deal with the reality that the goals aren't entirely compatible -- technically or politically.

Cutting oil imports from the Middle East could increase U.S. reliance on more expensive alternatives, some of which aren't very green. More fundamentally, the new president must determine how to persuade lawmakers to support his agenda for cutting U.S. consumption of carbon-intensive fuels at a time when many Americans are more concerned about high gasoline prices and home-heating bills.
Mr. Obama also is considering naming a special White House energy and climate-change czar as part of his cabinet, according to people familiar with the matter.
Environmentalists and some liberal Democrats are expected to press for a reinstatement of a federal ban on offshore drilling, a step that wouldn't sit well with some of the party's more moderate members.
Mr. Obama talked often of a program to create millions of "green jobs," in fields such as wind and solar energy. Mr. Obama has committed to mandating that the U.S. generate 10% of its electricity from renewable sources by 2012, and 25% by 2025. But electric utilities in Southern states oppose such mandates.—Stephen Power

Renewable energy: Obama's cruise to the White House puts the wind back in green sails

After Bush's years of neglect, the new president promises the planet a fresh start
Terry Macalister
The Guardian,
Thursday November 6 2008

The election of Barack Obama has put the wind back into the sails of the renewable energy sector, where investor confidence had been badly punctured by the credit crisis. Clean technology and green energy stocks have soared as City analysts predict a major boost from the incoming president.
Solar Integrated Technologies rose by 30% yesterday after increases of 22% by Renewable Energy Corporation and 16% by the wind turbine maker Vestas in the 24 hours before, when they were helped upwards by oil prices returning to above $70 a barrel.
Obama has promised to invest $150bn over 10 years in renewables as part of a wider plan to increase US energy security amid fear of oil shortages, while also reducing the country's carbon emissions in a bid to tackle global warming - and create jobs during an economic downturn.
Kate Hampton, head of policy at Climate Change Capital, a UK-based investment manager, was one of many who welcomed the poll result as a massive step forward for renewables.
"We cannot overstate how divisive the Bush administration was, how far behind the US now is in the transition to the low-carbon economy and how high expectations are now that Obama is the president-elect," she said.
Dean Cooper, alternative energy analyst with Ambrian Partners in London, predicted widespread change in the US with production tax credits for the wind industry increased from one year to seven years and a national renewable-energy guideline introduced alongside a cap-and-trade scheme to give more certainty on a carbon price.
The moves come as Britain has recently put more muscle into its low-carbon drive by creating a new government department to cover energy and climate change, while Spain, Germany and other European nations press ahead with their own plans to boost renewables.
The US election result has provided a much-needed boost at a critical time for an emerging investment sector that risked being crushed by the banking crisis and emerging economic recession. Some companies had seen their share prices halve in the turmoil that began in September.
"Since the onset of the most recent phase of the credit crisis, the European wind sector has been battered with an unweighted average decline of 45% compared to a decline of 23% for both the S&P 500 and FTSE Eurofirst 300 over the same period," said Michael McNamara, analyst at Jefferies & Co, in a research note published at the height of the sell-off.
"Much of this has been linked to fears that wind power developers would see themselves cut off from access to financing due to a toxic combination of a potential global closure of the project finance market and a drying up of demand for tax equity investment in the US."
Sentiment in the City and Wall Street has steadied since, but the dependence on project finance at a time when the cost of money has soared continues to cast uncertainty over a sector that is also nervous about rising costs and planning delays in countries such as Britain.
Peter Horsburgh, a manager of the Environmental Technologies Fund, said early start-up businesses were going to find it much harder to raise capital and those who had rushed early into a stockmarket listing could find it hard to win secondary tranches of cash.
"Rights issues are going to be incredibly difficult and yet neither is bank lending going to be easy for small and medium-sized firms," said Horsburgh, who expects his own fund will look at less speculative, "later stage" companies that have defined revenue streams.
In fact, there is nothing new about volatility in the clean tech and green energy sector, with share prices being driven in the past to hugely inflated levels on the back of hyped euphoria that sucked in investors before being rapidly deflated as realism set in.
The dotcom boom surrounding internet stocks was followed in the US at the turn of the century by a bubble in solar and hydrogen companies that soon burst. A similar spike happened in Europe with Vestas among the companies whose future looked in doubt at one stage.
Global solar stocks have suffered since last Christmas over fears of an oversupply of modules and cells, while wind turbine makers have been hit since the highs of the summer by soaring input costs. Confidence in the offshore wind sector in Britain was also dented by Shell's decision to sell up its interest in the huge London Array project.
Peter Fusaro, chairman of energy consultant Global Change Associates, said the green investment sector remained still relatively small but "fat with hype and fluff".
But it is also growing. Whereas there were four hedge funds looking at the sector in 2004 there are more than 90 today, while an estimated 4,000 private equity funds are said to be targeting the sector, according to Fusaro.
But the profit margins in many of the renewable sectors are relatively small, making them particularly vulnerable to a serious global economic slowdown and rising inflation. However, Kevin Collins, chief operating officer at the specialist renewables insurer GCube, said he was confident of the long-term value in the sector. He also warned: "Are the banks and lenders going to be in a position to finance projects as they were? We don't see a massive slow-up in demand yet, but its early days and while renewables will continue to grow it is difficult to say at what rate."
Many of the pioneers of low-carbon energy are dependent on public subsidy to survive. There is a question over whether bank bail-outs will have drained the state coffers and lead to a slowdown in environmental grants.
France, Germany and Austria have already called for an easing of European Union climate goals to help industries cope better with the downturn. In Washington one Republican senator said, on condition of anonymity, that the green bubble had burst.
"There is a very large question mark hanging over the idea that Congress would take economy-wide action on global warming with the economy in such anaemic shape," said Frank O'Donnell, president of Clean Air Watch.

Britain burying huge amounts of potential fuel

The Guardian,
Thursday November 6 2008

Britain's biomass industry will miss targets necessary to meet renewable energy goals by 50% unless "blockages in the system" are removed by the government. In a letter to the new energy and climate change secretary, Ed Miliband, representatives from the wood industry say urgent action is required to put biomass back on track.
"For the government to meet its targets for generating 20% of its energy from renewable sources by 2020, the UK needs to fully harness the potential for generating energy, heat and power through biomass," writes Craig White, chairman of Wood for Gold, a pressure group for the timber sector.
"The government is assuming that 50% of that 20% target will be provided by biomass, including clean and sustainable waste wood. But blockages in the system mean that only 4.1% is currently provided by biomass and that the current rate of growth is insufficient to enable the government to meet its 2020 target. Indeed it is likely to miss it by around 50%."
Wood for Gold, which includes the Timber Trade Federation, Confederation of Forest Industries and the British Woodworking Federation, argues that large amounts of potential fuel are being buried, creating methane, one of the most potent greenhouse gases.
"Of an estimated 7.5m tonnes of domestic wood waste, much from construction and demolition, some 80% goes to landfill. Only some 4% becomes sustainable energy from biomass," adds White, who says the UK needs only about 2.7m tonnes a year of wood to meet the biomass 2020 target.
Wood for Gold is keen to see the 2012 Olympics used to showcase biomass with a large plant providing heat and power to the site in east London. There are only very small biomass plants burning wood or plant-based matter, as well as the large coal-fired station at Drax, which is experimenting with burning some non-carbon fuel.
Last week Drax, the owner of Britain's most carbon-intensive power station, said it was turning greener with a £2bn plan to build the country's first large-scale biomass plants. But it is clear the bulk of the fuel for these plants will be imported, at least in the short term.
The three facilities - in Hull, Immingham and probably Drax itself - will have the capacity to produce 900MW of electricity - enough to supply 3% of the country's total.

Lack of political will slowing Europe's renewables revolution, engineers say

Leading European engineers say governments are slow to pass legislation that will implement renewable energy technology that is already available
Alok Jha, green technology correspondent
guardian.co.uk,
Wednesday November 05 2008 15.36 GMT

The experts tasked with delivering Europe's green energy revolution have said that a lack of political leadership is their biggest single obstacle in meeting the continent's ambitious targets for renewable power.
At a meeting of more than 100 leading European engineers this week, half said that, while the technology already exists to deliver 20% of all of the EU's primary energy from renewables, governments are slow to pass legislation that would enable it to be introduced quickly.
The engineers, representing 21 European countries, came together under the auspices of the Royal Academy of Engineering (RAEng) in London to discuss the technical challenges in meeting Europe's renewables challenges. When asked to choose the single biggest potential stumbling block, 50% chose a lack of political will.
Consumer behaviour came next but it was far behind the political problem, topping the list for only 19% of the engineers. The next biggest issue was the lack of suitable government incentives for generating renewable power, chosen by 13% and then insufficient capacity in electricity grids with 9%.
Despite the problems, 66% of the expert group felt the EU's 2020 targets could be achieved with a concerted effort.
"There is today a diversity of views of energy security and how serious climate change is," said Jan van der Ejik, chief technology officer at Shell. "That translates to a lack of political resource."
That lack of leadership has fed into a shortage of suitable incentives that could shepherd new technologies into the crowded energy market. The engineers highlighted the example of feed-in tariffs, which pay electricity generators a guaranteed premium price for the power they produce from renewable sources. While these tariffs have accelerated the introduction of solar technology in Germany and wave power in Portugal, the same is not true for the UK.
The Energy Bill, currently making its way through the British parliament, does include an amendment to introduce feed-in tariffs, but environmental campaigners have argued that the government's proposals are too weak.
The experts at the RAEng meeting questioned whether the EU should maintain its commitment to raise its renewable energy target to 30%, if a successor to the Kyoto protocol was agreed next year: 72% of the group felt the rise was unecessary.
"It's much more important that we cut CO2 emissions than raise the targets for new renewables sources," said Irene Aegerter, vice president of the Swiss Academy of Engineering Sciences. "We don't need to go to 30% but we have to include all potential CO2-free energy sources like nuclear."
Others at the meeting agreed that the EU should only set a carbon-reduction target and then let countries individually decide how to reach it, whether by renewables technology or approaches such as energy efficiency. Technologies that increase efficiency are the best, said Paul Caseau of the National Academy of Technologies of France. "Society is quite ready to use them, they are not extremely expensive and they can be used for a long time. If you do only one thing, then you do only that."
Efficiency technologies were seen by 24% of the engineers as one of the top three ways, after renewables, to reduce CO2 emissions. Nuclear power was seen as a priority by 21% of the expert group and carbon capture and storage (CCS) technology by 18%. "Even as far out as 2050, fossil fuels are still accounting for two-thirds of the energy supply," said Van der Ejik. "What needs to be done is find real progress in CCS – it's only if we tackle that source of CO2 that we can hope to bring emissions down."
There was also majority support for the construction of a pan-European energy supergrid: 86% of the engineers thought it a good way to balance out the intermittency of renewable power sources across the continent. The grid could be fed, for example, by solar power plants in southern Europe and the Sahara region and with wave, tidal and biomass plants across the north of the continent. It would allow countries such as the UK and Denmark to export wind energy at times of surplus supply, as well as import from other green sources such as geothermal power in Iceland.
The European supergrid plan already has tentative support from politicians, including Nicolas Sarkozy, who commissioned a study earlier this year into whether such a renewable energy grid would be feasible. The engineers at the RAEng meeting said that any European grid plan should include not only strengthening the existing national grids, so that they can carry more power, but also the construction of a new backbone of high-voltage direct current (HVDC) transmission lines, which can carry electricity long distances without losing as much power as standard alternating-current lines.

Windfarmers find fertile ground in Welsh hills

Plans to build one of the one of Britain's biggest windfarms were announced yesterday. Costing just under £16m and potentially producing 69MW, it would be operational by the end of 2010. Renewable Energy Holdings decided on the site in Llangurig, Powys, after an independent study revealed that the winds were strong enough to make it one of the most efficient sites in the UK. "You could say this is our cornerstone investment," chief executive Mike Proffitt said. "The study revealed that the site has a net capacity factor of 36%, while the global average for wind farms is 24-32%."Abhinav Ramnarayan

Judge denies Evergreen request on Barclays shares

Reuters
Published: November 6, 2008

By Emily Chasan
A U.S. judge on Wednesday denied a request from solar power panel maker Evergreen Solar Inc's that would have prevented British bank Barclays PLC from trading in 12.2 million shares of Evergreen stock.
In a hearing in U.S. bankruptcy court in Manhattan, Judge James Peck said he was "unconvinced" that Evergreen would be irreparably harmed without a temporary injunction that would have locked up the shares during litigation.
Emanuel Grillo, a lawyer for Evergreen, said at the hearing that Barclays acquired the shares improperly as part of its purchase of Lehman Brothers Holdings Inc's core U.S. brokerage business. Barclays is now the company's second-largest shareholder and Grillo said the lack of clarity about the status of the shares could prevent Evergreen from going to the markets to raise more money from the markets.
In the hearing, Evergreen Chief Financial Officer Michael El-Hillow testified that the company is a start-up and does not generate cash, but instead loses about $7 million (4.4 million pounds) to $10 million per month.

"We survive on our ability to access capital markets," El-Hillow said.
Evergreen filed a lawsuit last month, saying that 30.9 million shares of its stock had been loaned to Lehman in connection with a $375 million financing the investment bank ran for the company in July 2008. About 18 million of the shares had been sold into the markets by Lehman, and were not transferred to Barclays, Grillo said.
Peck said he did not believe Evergreen's concern about the Barclays shares would be the primary difficulty in raising money.
"The problems with obtaining financing in today's credit markets are manifest .... It is difficult for me to identify the parking of these particular shares at Barclays as a principal impediment to the successful identification and closing of alternative means to finance the company's operations."
(Reporting by Emily Chasan, editing by Richard Chang)

US energy sector feeling winds of change

By Ed Crooks and Sheila McNulty
Published: November 5 2008 20:47

In the last few days of the campaign, Republicans attacked Barack Obama in coal-producing states such as Ohio and Pennsylvania by highlighting his warning in January that companies building coal-fired power stations would go “bankrupt” under his plan to cut carbon dioxide emissions.
Although in vain, the tactic was a well-aimed blow.

Energy policy is one of the areas where Mr Obama has the most ambitious goals, and where his administration is likely to make the greatest difference.
The twin objectives of strengthening US energy security and fighting climate change point towards radical policies that are set to raise the cost of energy and bring about the most profound shake-up in the industry for more than two decades.
As oil has fallen from $147 a barrel in July to about $68 on Wednesday, the pressure to cut consumption has also faded. Mr Obama has been careful with talk of “energy independence”, a concept derided by most industry experts, but he is committed to curbing US demand for foreign oil.
His target is a cut equivalent to US imports from the Middle East and Venezuela, – 4.3m barrels per day last year, or 20 per cent of US consumption – in 10 years.
A fall on that scale would not be unprecedented. A deep recession and soaring oil prices brought an equivalent decline between the late 1970s and the early 1980s.
Mr Obama hopes to deliver his cut in imports by measures including raising fuel economy standards for vehicles by 4 per cent per year, and setting a new target for “advanced” second generation biofuels to be brought in by 2030.
In the longer term, the bigger impact is likely to come from the strategy to fight climate change.
Mr Obama is committed to an 80 per cent reduction in greenhouse gas emissions by 2050, and has set several intermediate objectives.
He wants a national trading scheme for carbon dioxide emissions, in which companies would have to pay for all permits, unlike the European Union, where the introduction of the scheme was smoothed by giving away permits at first.
That explains why Mr Obama rightly identified his plans as bad news for coal-fired power generators.
He has also proposed targets for the proportion of the US’s electricity to be derived from renewable sources: 10 per cent by 2012 and 25 per cent by 2025.
Steve Mitnick, a partner at Oliver Wyman, an international management consulting firm, said: “I think we’re positioned for a major boom for wind and solar.”
Copyright The Financial Times Limited 2008

Trades on Solar Companies Show Optimism in Sector

By TENNILLE TRACY

NEW YORK -- Options traders rallied around solar stocks, as the price of oil climbed above $70 a barrel and voters headed to the polls for an election that could change the political landscape in Washington.
The trading in First Solar Inc. was particularly heavy, as investors picked up 31,000 calls that allow them to buy the company's stock and 23,000 puts that allow them to sell it, according to Trade Alert.
Traders appeared most interested in November calls that allow them to buy First Solar for $200. Priced at $6.90, the contracts make money if the company's shares pull above $206.90 before Nov. 21. The stock closed at $177.52, up 9.6%, Tuesday on the Nasdaq Stock Market.
Options traders gravitated toward LDK Solar Co. as well, picking up nearly five times as many calls as puts. In this case, they focused on November $25 calls, which are priced at $2.40 and make money if LDK jumps above $27.40. LDK shares closed at $23.49, up 4.8%, on the New York Stock Exchange.
Investors also showed a preference for bullish contracts in Solarfun Power Holdings Co. With trading in Solarfun heating up to five times the normal level, investors picked up 15,000 calls and 3,000 puts.
The bulk of the action in Solarfun took place in November $10 calls. Those contracts are priced at 75 cents and make money if Solarfun reaches above $10.75. The shares ended the session at $8.95, up 8.6%, on Nasdaq.
Tuesday marked the second day in a row in which traders jumped on solar stocks as the action coincided with a jump in oil prices. Oil prices rose $6.62 to settle at $70.53 a barrel after the dollar lost strength against the euro and a decision by the Organization of Petroleum Exporting Countries to cut production started to take hold.
"Many of the stocks mentioned in this sector have already announced earnings, and yet the implied volatilities are still remaining near their highs for the year," said Brian Overby, senior options analyst with TradeKing.
Options traders also were eager to take up positions in Nasdaq stocks Evergreen Solar Inc. and Canadian Solar Inc.
In Evergreen Solar, traders scooped up three times as many calls as puts and showed interest in November $7.50 calls. Priced at 20 cents, the contracts make money if the company's stock climbs above $7.70. Evergreen closed at $5.29, up 13%.
In Canadian Solar, traders gravitated toward November $12.50 calls. Those contracts are priced at $1.65 and make money if Canadian Solar reaches above $14.15. The shares closed at $12.50, up 15%.
Write to Tennille Tracy at tennille.tracy@dowjones.com

Under Obama, Dark Days Seen Ahead For Fossil Fuels

By Ian Talley
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--Under President-elect Sen. Barack Obama, D-Ill., the fossil fuels industry may face "dark days ahead," while alternative energy sectors are likely to flourish.
Although it will take years to engineer and implement, an Obama administration energy and environment policy marks a tectonic shift for the nation. He would move the U.S. away from petroleum as its primary energy source and towards renewable energy, advanced biofuels, efficiency and low greenhouse-gas-emitting technologies.
Obama won the U.S. presidential race Tuesday evening, sweeping battleground states such as Ohio and Florida.
Sen. Obama's lynchpin policy is a climate change bill that would cap emissions such as carbon dioxide and auction greenhouse gas credits to encourage a fundamental transition away from high emitting industries to low-carbon alternatives. Obama said such a policy would be more aggressive than any other cap-and-trade system proposed.
As part of that policy shift, renewable energy, natural gas, plug-in hybrid vehicles, and advanced electricity transmission are forecast to receive a major boost. Sen. Obama has proposed using $150 billion from the emissions auction to fund such low-carbon alternatives over the next decade.
And to begin cutting emissions, the president-elect is targeting the fossil fuel industry.
Companies such as ExxonMobil (XOM), ConocoPhillips (COP) and Chevron Corp. (CVX) say they're concerned about returning to policies enacted in the 1970s, including Sen. Obama's proposals for a windfall profits tax and market intervention such as tapping the Strategic Petroleum Reserve.
"It's pretty clear that if we repeat those mistakes again, we're going to see some pretty dark days ahead," said outgoing American Petroleum Institute president Red Cavaney.
Obama shifted his stance on offshore oil and gas drilling in the Outer Continental Shelf under pressure from $145 a barrel oil prices and $4 a gallon gasoline. But he's largely against extensive new domestic petroleum production. Congressional Democrats could reinstate at least parts of a moratorium on such offshore drilling that expired at the end of September.
With oil prices falling to more than half levels seen in July, there will likely be less political opposition to a new ban. Some Capitol Hill watchers say the moratorium is likely to cover 50 miles off the coast and won't include revenue sharing for the states.
The oil industry says for oil companies to tap domestic production quickly it needs access closer to the shore, and sharing the wealth is necessary to get state approval for exploration off their coasts.
It's unlikely Obama will use all of his new presidential political capital to try and force a contentious greenhouse gas bill through Congress. But the president-elect is expected to start working piecemeal towards a climate change bill early in his tenure.
A federal renewable energy mandate is a central piece of his policy to ax man-made contributions to global warming. Obama wants reductions of 25% by 2025, with a 10% standard achieved early in the next decade. A similar mandate has passed in the House, though it narrowly failed in the Senate. Democrats picked up several seats in the Senate, and with that, "the RPS is almost a certainty," said Dave Hamilton, Sierra Club director of its Global Warming and Energy Program.
Southern utility companies, including Duke Energy Corp. (DUK) and Southern Co. (SO), have lobbied against a federal renewable portfolio standard, though some encourage state mandates.
Wind turbine manufacturers such as GE Energy, a unit of the General Electric Co. (GE), India's Suzlon Energy (532667.BY) and Denmark's Vestas Wind Systems (VWS.OS), as well as solar firms such as Norway's Renewable Energy Corp. ASA (REC.OS), and U.S.-headquartered First Solar Inc. (FSLR) and Evergreen Solar Inc. (ESLR) would benefit under a renewable portfolio standard.
Sen. Obama - as well as Senate Majority Leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif. - believe spurring the renewable industry would help the country recover from its current economic crisis.
The coal-fired power generation sector, one of the biggest emitters of greenhouse gases, will likely find the investment climate more difficult under stricter environmental regulations.
Longer-term, the president-elect said he plans to funnel federal money to pay for carbon capture and sequestration technology.
The coal industry, however, is concerned that Obama's pursuit of stringent greenhouse gas laws could strangle the industry. Obama has said his cap-and-trade bill would encourage carbon capture and sequestration for coal-fired power plants. Yet he admits that without such technology, new construction of traditional coal-fired power plants could face bankruptcy.
The National Mining Association, whose members include Peabody Energy Corp. (BTU) and Consol Energy (CNX), said it feared Obama's climate change policy could destroy the U.S. coal industry, "break(ing) America's energy backbone."
One of the real questions is how quickly Obama and congressional Democrats can move the country swiftly away from petroleum and coal use without damaging the economy. Obama contends a transition to a lower carbon economy will create up to 5 million jobs.
But it will also raise manufacturing, transportation, and material costs because of higher energy prices and put U.S. goods and services at a competitive disadvantage to economies that lack similar emission standards, such as China, India, Russia or the South American and Middle Eastern countries.
It's also questionable whether the president-elect could pass climate change policy early in his tenure amid a focus on rescuing the U.S. economy from a deep recession.
As the oil and coal industries may see their market share of energy production fall, the biofuels, natural gas and nuclear industries could grow.
For the biofuels market, next-generation fuels such as cellulosic and algae-based ethanol and biodiesel will benefit under Obama's energy and environment policies.
Democrats have also warmed to the natural gas industry. The fuel emits half the greenhouse gas pollution that coal producers when conventionally burned, and the U.S. has massive domestic sources that wouldn't require a major change in the sector's transportation infrastructure.
Many Democratic leaders, including Obama, are open to proposals to convert a large portion of the nation's vehicle fleet to run on natural gas.
And though Obama would try to change the current waste storage policy, a long-term expansion of the nuclear power industry is seen as essential to meet the climate change goals propounded by the President-elect.
-By Ian Talley, Dow Jones Newswires, 202-862-9285; ian.talley@dowjones.com