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Geothermal Storing Wind, Small Projects Hydro Implications Industry’s Struggle Solar Energy That Think Big of FERC Order 1000 for Acceptance

Strategies for Solar Growth WHAT WOULD YOU DO? Industry execs weigh in (And you can, too at

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12 Financial Trends 14 The Interview 36 The Deal Can the geothermal industry We asked, you answered. Solar Financing a community wind farm was overcome challenges to raising executives and Renewable made possible because of the 1603 Cash capital? Energy World’s social media Grant in lieu of Tax Credit. With the Editor’s Letter 4 community all chimed in to grant expiring in December 2011, will defi ne strategies they believe community wind ever be possible again? will lead to a thriving U.S. solar Renewable Street 6 industry. 8 76 Final Word Even without a formal cap-and-trade program in place, it’s a mistake for Renewable Utility 10 companies to think they are immune to carbon controls. To remain competitive, companies must minimize their carbon 12 footprints now. 14

CONTENTS SEPTEMBER/OCTOBER 2011 SOLAR

Strengthening PV’s Backbone Through Inverter Innovation The competition is fi erce in the inverter market. Check out recent trends, technological advancements and how the industry is working to reduce costs. 40 In The News 28

50 GEOTHERMAL 58 BIOMASS 60 WIND 66 HYDRO

Geothermal Industry The Biomass Carbon Energy Storage Industry How FERC Continues To Struggle Debate: When To Start Grows To Integrate Order 1000 for Acceptance Counting? Wind, Solar Could Affect Hydro The industry is on track to add In the last issue we published an If costs come down, storage FERC’s Order 1000 ammends the 700 MW of capacity by 2013, article that stated Manomet got could be the silver bullet for way public utilities can allocate according to GEA’s Karl Gawell, its carbon accounting rules widespread renewable energy costs for transmission projects. with 27 projects in phases III backwards. In this issue the adoption. Several demonstration Hydropower and other renewable (drilling) and IV (construction). organization explains why they projects in place today show the energy technologies could benefi t Why do projects take so long? believe they got it exactly right. technology’s increasing promise. from the new regulation.

RENEWABLE ENERGY WORLD MAGAZINE NORTH AMERICA is published 6 times a year, Bi-monthly, by PennWell Corp., 1421 S. Sheridan Rd., Tulsa, OK 74112; phone (918) 835-3161. ©Copyright 2011 by PennWell Corp. (Regis- tered in U.S. Patent Trademark Offi ce). Authorization to photocopy items for internal or personal use, or the internal or personal use of specifi c clients, is granted by RENEWABLE ENERGY WORLD MAGAZINE NORTH AMERICA provided that the appropriate fee is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923 USA 508-750-8400. Prior to photocopying items for educational classroom use, please contact Copy- right Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923 USA 508-750-8400. Periodical Pending postage paid at Tulsa, OK and additional mailing offi ces. Subscriptions: USA $95 per year; Canada $125 per year; International $190 per year. Single copies: USA $16, Canada $21, International $32. Copies of back issues are available on microfi lm and microfi che from University Microfi lm, a Xerox Co., 300 N. Zeeb Rd., Ann Arbor, MI 48103. Available on LexisNexis, Box 933, Dayton, OH 45402; (800) 227-4908. POSTMASTER: Send change of address to RENEWABLE ENERGY WORLD MAGAZINE NORTH AMERICA, PO Box 3264, Northbrook, IL 60065-3264. “RENEWABLE ENERGY WORLD MAGAZINE NORTH AMERICA” is a registered trademark of PennWell Corp. Return undeliverable Canadian addresses to P.O. Box 122, Niagara Falls, ON L2E 6S4. Ride–a–Long enclosed.

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38 38 Data Points

The U.S. solar power pipeline 40 shows the exponential expansion of solar capacity as large-scale projects work their way through the development stage.

What Can We Expect for the Solar Project 50 Finance Market? 54

Industry experts from Chadbourne and Park, Borrego Solar and East West Bank discuss the 54 perils and pitfalls of solar project fi nance.

Smaller Projects That Think Big

While large developments push the needle closer toward a path of sustainability, it’s often the projects taking uncharted roads that allow us to envision our 68 energy future. Here, we give you projects in the solar, 66 wind, hydro, biomass and geothermal industries that are helping to reshape how we do business. 68

Advertisers’ Index 72 Seeing the Forest and 73 the Trees: Utilities and Regulators Consider Biomass Power Plants Final Word 76

As the EPA struggles to understand biomass power plant emissions, some utilities across the U.S. are converting coal plants to biomass plants without hesitation, while Cover photo 73 others think it’s best to wait it out. © Muhamad Kautsar | Dreamstime.com______

RENEWABLE qM ENERGY qMqM WORLD PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDH Qmags NORTH AMERICA THE WORLD’S NEWSSTAND® RDH RDH ENERGY RENEWABLE ENERG RENE OT AMERICA NORTH NORTH WORLD WORLD W AMERICA customers’ exacting energyrequirements andare backed by AREVA’s guarantees. performance Our Compact LinearFresnel Refl ector solarsteam generators are customized to meetour steam facility. concentrated solarthermal power plant,power process augmentationinstallation,orindustrial High efficiencythatislow-costandwater-wise Solar Simplified: www.solar.areva.com [email protected]: Please visitourbooth #6319atSolarPower International What canwe buildwithyou? Simple Solutions.Powerful Results. We andcommissioning bringthe project delivery help customers thrive inadynamicenergymarket. AREVA combinesourglobal energyexperience andturnkey concentrated solarpower solutionsto Experience you canbankon.Technology delivers. that AREVA’s CompactLinearFresnel Refl ector solarsteam generators areinstalled atthe Kimberlinasolarthermal power plant, Bake ABLE Y MINING PreviousPage|Contents|Zoomin|out|FrontCover|SearchIssuNexPage PreviousPage|Contents|Zoomin|Zoom out|Front Cover|SearchIssue|NextPage FRONT END & SERVICES REACTORS services neededto establish services BACK END a ready-to-operate RENEWABLE ENERGIES rsfiCA. eld, q q H OL’ NEWSSTAND WORLD’S THE NEWSSTAND WORLD’S THE q q q q M M M M M M q q Qmags Qmags q q M Energy is our future, don’t waste it! - ©2011 AREVA Inc. All Rights Reserved. Photo credit: Eric James Swearingen, Art of Eric James M M M ® ® RENEWABLE ENERGY WORLD NORTH AMERICA 4 RDH RDH ENERGY RENEWABLE ENERG RENE OT AMERICA NORTH NORTH WORLD WORLD Jennifer Runyon Managing Editor EDITOR’S W AMERICA ABLE Y cannot peacefully coexist, at least not without some sacrifi atleast some cannot peacefullycoexist, notwithout two thatthe simple factis energy, the forrenewable groups advocate andsometimes too, development of renewables, where doesthatleave of where us? renewables, development catastrophic eff the groups must fi can’t animals course andenvironmental Of lawsuit forthemselves tofruition? advocate of involved Nantucket inbringingthis be view somehow pristine Sound their distort italways scratching my me leaves head. mentalism, resources forenergy. naturally sun andother path tomitigating change by climate replenished wind, using the probablyenvironmentalist, you energy. support renewable are clearest the Renewables an For yourself consider andrenewables. ifyou most protection part, environmental the change. andclimate energy renewable about taught are animals also about tolearn come change.impressed hadadisplay Ilikewho climate it about thatvisitors center that the faucet.Iwasalso aninformationalsign through rightatthe howitworks and explained inits bathrooms hotwater Iwasimpressedused solar region. center to the thatthe of New Hampshire. Th Saturday Region Lakes One inthe inAugust, center science toanoutdoor my Itook kids Anyway? What isEnvironmentalism, ing the project to “take”ing the andpiping terns suffi ploverswithout roseate andU.S. Endangered Act the by Species allow- violated Service Fish andWildlife Service groupsfi of environmental coalition arementalism really just a front forNIMBYism. year Last Wind anexample. a Cape is of environ- grounds onthe toprojects ifobjections wonder often we In newsroom, the Environmentalism orNIMBYism? working toreduceto be of cost the solar? conservation,”wildlife most defi will “acquiring torestore Plain subdivision largely Carrizo lotsinthe inthe for undeveloped areas” Joaquin San kitfox conservation andother Plain and Carrizo onthe rodenticides nifi Joaquin kit fox previously kangaroo agreed companies have both andgiant rats.tosig- While Calif. Valley andTopaz’s Ranch Solar 550-MW Farm Solar are planned: regarding SunPower’s projects, companies where solar solar Obispo Luis San 250-MW cant commitments to protect and preserve species in this important habitat area and have important habitatarea inthis andhave species cant commitments toprotect andpreserve If environmentalists support the idea that we use less fossil fuels inorder tostave off fuels fossil thatweuseless If idea environmentalists support the How do we further a new energy agenda if we keep fi agendaifwekeep energy How anew dowefurther Could the very same people who object to Cape Wind on the grounds that it would thatit Wind grounds would objecttoCape on the who people same very the Could Take groupsand arecent environmental agreement between Club,other Sierra the of name projectsenviron- are inthe energy andnail renewable foughttooth when So alot: newsroom atopic thatwediscussinthe about But thinkingfurther it gotme Th e projects are located in the Carrizo Plain, a core recovery area for endangered San acore area for recovery endangered San Plain, eprojects are intheCarrizo located letter PreviousPage|Contents|Zoomin|out|FrontCover|SearchIssuNexPage PreviousPage|Contents|Zoomin|Zoom out|Front Cover|SearchIssue|NextPage ght for them if we want them toexist. Th if wewantthem ght forthem stated include stipulations such as helping fund the “eff fundthe stipulations such include ashelping stated press have the which companies release made, agreements thatthe beyond those provided under existing local, state and federal permits. andfederal state permits. existingbeyond under thoseprovided local, and above Plain for theremaining inthenorthern Carrizo unprotected lands protection Th ofthearea. asuiteto provide ofadditional environmental benefi agreement this SunPower andTopaz with andlocalagencies, state commit received project on environmental approvals based reviewsfederal, byvarious ects of change climate butdon’t inthe wanttoseeany harmed species Going above and beyond anything always andbeyond addingTh cost. above means Going e center is a place where visitors can learn about animals native native animals about canlearn visitors where aplace is ecenter nitely add to the developer’snitely tothe add Aren’t costs. wesupposed led a lawsuit alleging that the Minerals thatthe alawsuit led Management alleging or call(603)925-3206 Contact [email protected] www.RenewableEnergyWorld.com For more articleslikethis, logonto is agreement provides for additional conservation for agreement additional is provides conservation at’s But agiven. environmental ghting amongst ourselves? amongst ourselves? ghting ce on one or the other’s orthe ce onone part. ts to further increase tofurtherincrease ts cient cient safeguards. orts to eliminate toeliminate orts e

Production Manager Circulation Director Circulation Manager President Chief FinancialOffi President/CEO Marketing Manager (847) 559-7330 [email protected] Address Changes: (847) 559-7330 www.omeda.com/rewna All OtherRegions Paid Subscriptions: www.rewna-subscribe.com USA, Canada, Mexico Free Subscriptions: Subscriber Service (918) [email protected] Production Supervisor Marla Barnes, RussellRay Hydro Review Peter Singer PV World David Wagman Sharryn Dotson, LindsayMorris, Power Engineering Meg Cichon, SteveLeone RenewableEnergyWorld.com Contributing Editors [email protected] (603) 925-3206 Managing Editor RenewableEnergyWorld.com World WideWeb:http://www. E-mail: [email protected] Fax: (918)831-9834 Telephone: (918)835-3161 P.O. Box1260, Tulsa, OK74101 Tulsa, OK74112 1421 SouthSheridanRoad Vol. 3, No. 5, September/October2011 Chairman (918) 835-3161 1421 S. SheridanRoad, Tulsa OK74112 PennWell Corp. Corporate Headquarters (918) [email protected] Renewable Energy Group Publisher, North America Richard G. Baker Generation Group Vice President, North American Power (918) [email protected] Magazine —Mark C. Wilmoth —Frank T.Lauinger Printed onRecycled Paper Magazine —Robert F. Biolchini —Jennifer Runyon Magazine – cer/Senior Vice —Dick Rauner —Gloria Adams —Cassie Chitty —Ron Kalusha —Shirley Gamboa —Chad Wimmer — q q H OL’ NEWSSTAND WORLD’S THE NEWSSTAND WORLD’S THE q q q q M M M M M M q q Qmags Qmags q q M M M M ® ® RENEWABLE qM ENERGY qMqM PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDWORLD H Qmags NORTH AMERICA THE WORLD’S NEWSSTAND®

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Is 2011 Solar’s Peak Year?

Th e last two years have brought about unprecedented based incentives, it seems the market for solar projects growth for solar utility installations. Th e utility-scale solar could stay robust for at least a few more years. market exploded in 2010 with 459 megawatts (MW) of “At the current price trend, the market will be able to photovoltaic (PV) and concentrating solar power (CSP) continue beyond 2016 without 1603,” said Brian Lynch, se- installations, according to the Interstate Renewable Energy nior vice president of development for Enfi nity Corp. Lynch Council (IREC). And it’s looking like 2011 has said the real eff ect of the removal of 1603 won’t be felt until Associate Editor, PE Associate Editor, the potential to knock those numbers out of the mid-2012 when “capital becomes constrained and concen- ballpark. According to the Solar Electric Power trated in the hands of relatively few tax equity investors.” Association (SEPA), as many as 50 utility-scale So what needs to happen on a federal and state level to MORRIS solar projects could be completed by the end of encourage new solar developments in spite of this pre- this year, totaling 831 MW.* dicted capital crunch? State-level incentives in the form of But what happens after 2011? Renewable Portfolio Standards can continue to help push With the 1603 Treasury Cash Grant Program developments along. Some states, like New Jersey, are also

By Lindsay extension set to expire at year-end, develop- using Solar Renewable Energy Certifi cates (SRECs) to aid ers are rushing to start projects. Under 1603, Treasury has in project development costs. As a result of a robust SREC agreed to make a payment equal to 30 percent of the basis market, solar developments in New Jersey grew by 139 per- of certain solar property that is placed in service by the cent in 2010, according to SEIA. Last year, New Jersey also end of 2011, or for which construction passed the Solar Advancement Act, which began by the end of 2011 and is placed encourages utilities to buy more solar in service by the end of 2016. In 2010, electricity from in-state sources. the 1603 grant provided $410 million and With the State incentives are undoubtedly con- funded at least 40 percent of the non-res- combination of structive. However, the lack of a national idential PV installations during the year, 1603 projects renewable energy standard will encourage according to the IREC. While the Solar En- being completed, a continuation of the stop-and-go fl ow ergy Industries Association (SEIA) is push- continually falling PV that the solar industry has been experi- ing for another extension of 1603, 2011 will module prices and a encing over the last few years. For now, likely be the “sunset” of the program, said host of state-based developers will reap the benefi ts of 1603, Jeff Davis, co-head of the renewable energy incentives, it seems but what will the federal government do practice at Mayer Brown. the market for solar to ensure that solar and other renewable So will the sunset of the 1603 grant put projects could stay energy resources have the opportunity to the bang of new solar projects to bed? robust for at least a grow steadily post-2011? Th e absence of a First, take into consideration that few more years. consistent federal policy has caused mar- while the cash grant rushes project com- ket uncertainty, fl uctuation in technology

mencement, it does not rush completion. costs and therefore, bottlenecking on the In order to qualify for the 1603 grant, a developer must do development side. one of two things: commence construction or pass the “5 “Providing policy certainty for markets is critical to at- Percent Safe Harbor Test.” To qualify as a project that has tract billions of dollars that are necessary to achieve solar commenced construction, a developer could do something goals,” said Rhone Resch, president of SEIA during the PV as simple as putting a single foundation in place. However, America Conference 2011. NORTH AMERICA “construction activity then needs to be continuous in order Without more stability on a federal level, it’s likely that to qualify,” Davis said. the solar industry will experience a dip in new project an- Many developers choose the 5 Percent Safe Harbor Test nouncements post-2011. However, states that have vibrant instead. Under this test, a developer must incur at least 5 state incentives, like New Jersey, will continue to lead in percent of the total project costs upfront, but the project development and reap from the long-term benefi ts that can then be completed non-continuously. solar power has to off er. With the combination of 1603 projects being completed, continually falling PV module prices and a host of state- *As of Aug. 22, only half of the 50 projects had commenced construction. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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Uncle Sam Wants….Renewable Energy?

It’s the middle of September, and the solar industry is on life Renewables are going rogue, and they’re coming with support. Evergreen has died. SpectraWatt is buried. And Solyn- fi repower. dra’s eulogy has made mention of the black plague of federal Th at fi repower is being wielded by the American military. fi nancing. Meanwhile, ethanol is counting its days and second Yes, the very military industrial complex President Eisenhower generation biofuels are DOA. And wind? If it’s not dying, it’s on warned us about 50 years ago may lead us out of the energy cri- a killing spree taking with it every bird in sight. sis President Carter alerted us to more than three decades ago. Associate Editor OK. So this isn’t the reality. But in many Now, the question is, “Who will come along for the circles, it’s the perception. And as we all know, ride?” Even the most hardened in the Tea Party movement

LEONE, LEONE, perception can quickly turn into reality. With don’t dislike the notion of renewable energy. Th ey just don’t that unfortunate truth in mind, there is the think it’s something worthy of federal support. If it’s not realization that all renewables need to chart an protecting our life, liberty and pursuit of happiness, then alternate course, and perhaps tell a diff erent it should be guided solely by free market principles. But By Steve story. In a sense, they need to convince the same what if it did protect our liberty? What if it was intrinsically people who have happily written their obituaries linked to our collective security? that they are the key – not to our environmental concern, Even though it probably doesn’t qualify as a federal but to our security worries. energy policy, people at the highest level of the Pentagon

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see renewable energy as a solution to our Th ese military renewable energy ing partnership has the ability to make energy security. To them, clean energy initiatives have the ability to boost con- all Americans re-evaluate energy based allows the U.S. to stay out of global aff airs fi dence for both industries and consum- more on security and less on cost. Th at in which our only perceivable goal is to ers, which in turn would lead to greater shift would scale up demand, would keep the oil fl owing. It also has a bit to do production and new streams of revenue. increase production and would drive with global warming (or climate change Th e American military has always been down the very cost held up as the main as those who see the results but refute the lauded for its ability to drive innovation concern by opponents. Th en, maybe, cause like to call it). Warming climates and create commercial markets. we’d all have something we could are expected to lead to more extreme But more than anything, this emerg- agree on. weather in some parts and contribute to more politically unstable situations in others. In each of these scenarios, it could require greater military involvement and, yes, more taxpayer money. At a recent event in Concord, N.H., a city that promises to hold political sway in the upcoming fi rst-in-the-nation & ' $(% ) * + primary, retired Rear Adm. Larry Baucom and Republican State Sen. Gary Lambert were among those making the call for GOP legislators to get onboard with their vision of an American economy domi- nated by energy produced from wind, solar, hydro, biomass and geothermal and a culture powered by American-grown biofuels. Later in the month, Retired Four-Star Gen. Robert Keys spoke to a bipartisan crowd in the same state to address many of the same concerns. Th ere already has been a change — or an order, if you will — coming from the highest levels of the Pentagon. At Nellis Air Force Base in Nevada, most of the energy output comes from solar installa- # , + -" tions while at a Navy and Marine training . "$ ' +/ ++ # " #0- # facility at Dam Neck, Va., about half the $ 0 + 0 ' + " ' power comes from geothermal sources. $'01 " "" 1 . 0 $ 1 Recently, the Department of Energy " # 0$ "0 " 2 announced a deal to install solar panels on 160,000 rooftop locations at military 01 # $ #$ # 0 $" bases in 33 states and in early August, / + . $$ $# ## 1 $$ $ + $ the military announced a plan to install large-scale renewable energy projects on ! " ! " # its lands to meet a goal of drawing 25 per- $ cent of its electricity from clean sources by 2025. ! Even more potential comes from the NORTH AMERICA biofuels that will be used by the Air Force and the Navy. Also in August, President Obama announced a federal investment of $510 million over three years to produce advanced drop-in aviation ______ and marine biofuels. Th e goal is that by

2016, all military fuel will include at least ! "#$ !% 50-percent biofuels. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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EV Envy magazine Much of the buzz around electric vehicles has focused on vehicles are less expensive to fuel than gasoline-powered automobiles, including the launch of production plug-in vehicles. (Of course, they also are more expensive to buy vehicles by Nissan and General Motors in December 2010. than the average conventional-fueled vehicles, but that Th ese vehicles are slated to be followed over the next seems likely to change with time.) 18 months by models from Ford, Mitsubishi, On the issue of vehicle recharging itself, the EPRI report Power Engineering Power Toyota and Tesla, among others. concludes that problems could arise by ill-conceived charge Autos get most of the headlines, but electri- control strategies. For example, if owners were restricted fi cation extends to other parts of the transport to recharging their vehicles until after 9 p.m., the charging economy. Th ink delivery vans, small and large load could hit rapidly. Assuming that around 500,000 plug- WAGMAN WAGMAN transit buses, utility service vehicles and urban in vehicles are in the market by 2015 (a scenario EPRI sees delivery trucks. Non-road electric transporta- as a “medium” adoption rate) a 9 p.m.-and-after rule could

David tion includes lift trucks and material handling see demand reach nearly 1 GW. Th at’s because almost equipment, airport ground equipment, truck three-quarters of all electric vehicles would be charging at stops, port electrifi cation, mining and overland conveyers. the same time. End result: a demand spike. At the neighborhood level, Walgreen’s said that around But how much of a demand spike? Not much, Mark Du- 800 of its almost 8,000 locations will vall, the report’s author, tells me. One install electric vehicle charging stations. million plug-in electric vehicles in Ditto for some IKEA and WalMart stores. California would add around 700 MW KwikTrip is installing charging stations Plug-in cars ... are to the peak load. On an afternoon this and will let customers fi ll up for free, of interest to the past July, peak demand was forecast following the industry model of making renewable energy to be 37,500 MW. (Keep in mind that money on snacks and soda pop. Domin- community because as of the end of May, Nissan and GM ion Virginia Power said in July it will move recharging can make combined had delivered around 5,000 ahead with an electric vehicle recharging good use of renewable vehicles nationwide. We’re still in the pilot program. Th e regulator-approved resources such as very early days.) pilot will test whether electric vehicle wind that in some Duvall says a charge management owners will choose to recharge during instances peak during strategy that starts charging vehicles off -peak hours – typically overnight – in nighttime hours. after peak hours and distributes exchange for lower electricity costs. charging throughout the off -peak Th is last point fi gures in a new report will benefi t the grid the most and use the Electric Power Research Institute available capacity most effi ciently. (EPRI) released July 19. It details the status of, and consid- For example, a recharge control strategy that shifts the

ers issues related to, eff orts to electrify the transportation load to nighttime hours would allow vehicle charging to be infrastructure. Titled “Transportation Electrifi cation: A staged to start during one of seven hours from 9 p.m. until Technology Overview,” the 120-page report examines is- 3 a.m. In this scenario, the EPRI report said the average sues related to grid infrastructure and pricing. per-vehicle load would end up being about 0.7 kW and Plug-in cars — let’s use that shorthand — are of interest would hit at a more favorable time for power generators. to the renewable energy community because recharging Of more concern near-term is the eff ect EVs may have NORTH AMERICA can make good use of renewable resources such as wind on the local distribution network. Duvall points out that that in some instances peak during nighttime hours. EV an individual transformer will see a 7.7-kW load increase advocates also see a role for vehicle batteries in providing regardless of when the vehicle begins charging. It’s at this storage capacity to help meet peak load demand. What’s level that the grid impacts of EVs will be felt fi rst, aff ecting more, electrifying portions of the transportation system transformers with little or no remaining capacity. could off er power generators a new source of load growth, Continued research by EPRI, Dominion and others in help ease U.S. dependency on imported oil and give con- the coming months will shed still more light onto this sumers a break on the cost of gasoline. After all, electric emerging source of electric demand. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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RENEWABLE qM ENERGY qMqM WORLD PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDH Qmags NORTH AMERICA THE WORLD’S NEWSSTAND® RENEWABLE ENERGY WORLD NORTH AMERICA 12 RDH RDH ENERGY RENEWABLE ENERG RENE OT AMERICA NORTH NORTH WORLD WORLD By Jane PATER SALMON Navigant Consulting FINANCIAL W AMERICA ABLE Y potential. Financing projects that use conventional geothermal Financing thatuseconventional geothermal projects potential. country’s richgeothermal the present todeveloping hurdles activities exploration with anddrilling associated risks and the horizons development long proposition, value compelling this alternatives. Despite thanmanyenergy cost renewable other atalower energy presents clean baseload energy Geothermal Highertransactioncostsattheprojectlevel. - Challengessecuringdebtwithrecoursetoasingle - Concernsabout creditworthinessof - past year. adversely aff for geothermal project investment have Challenges toRaisingCapital? Can theGeothermalIndustryOvercome Similar levels of due diligence and negotiation are required andnegotiation diligence of due levels Similar 50 MW, projects are wind typically while atleast 100MW. are range projects inthe of 25to geothermal exceptions, projects. With energy compared renewable few toother ting stage U.S. inthe are of interms capacity smaller as projects thathaveGeothermal reached permit- atleast the project. smaller fi Th sought more collateral to reduce the risk of loss. of toreduce loss. risk more the sought collateral type this of past loan in the year.to provide have Lenders generally unwilling have who been forlenders increases risk ny’s Non-recourse assets other however, are debt, protected. compa- the developer’s of because default event inthe risk Th of default. event in the company norecourse tothe with debt secure project-level fi fi tosecure smaller which loans,these few projects. With fewerassets against of holding portfolios companies just a many with smaller one, afragmented is nologies companies like companies Vestas,nologies First Solar, andIberdrola. are relatively tech- lowcompared tolarger energy renewable levels capitalization are their traded onpublicexchanges, Even thoughmany of companies these rms with morerms with diversifi amorerms pose signifi ree toraising key challenges capital PreviousPage|Contents|Zoomin|out|FrontCover|SearchIssuNexPage PreviousPage|Contents|Zoomin|Zoom out|Front Cover|SearchIssue|NextPage Trends low and capital constraintslow andcapital continue. pronounced asinvestors’ risk-tolerance remains more even have years,in previous they become are faced those project with consistent level the fi three common challenges to geothermal project strategies usedalternative toovercome opers environment. economic uncertain remains inthe challenging technology When conditions permit, developers prefer to prefer to developers permit, conditions When ected developers in the nance. While the challenges forraising challenges capital the at nance. While rms. rms. In past the year, project devel- geothermal Th e geothermal industry industry egeothermal cant risk than than cant risk ed portfolios. is “non-recourse debt” reduces the reduces “non-recourse debt” is the constraints continue. remains lowandcapital investors’ risk-tolerance more pronouncedas they havebecomeeven faced inprevious years, consistent withthose the projectlevel for raisingcapitalat While thechallenges strategic benefi benefi needed tosecure fi needed credibility cases,the projects andinsome ontheir forward provide smaller fi with larger,with fi more well-established Well-known fi geothermal butsmaller-cap Creditworthiness ofSmallerFirms Overcoming Concernsaboutthe the availableresources the –toaddress challenges. these fi adiverse have setof deployed strategies United – the States Enbridge, the debt-to-equity the Enbridge, ratio project was 75to25. onthe equity combined of loanandthe U.S.the and Geothermal With project. on the construction tocomplete needed capital Federal Financing Bank.Th by the backed loanprovided Guarantee, a$97million which strengthenedby aU.S. Loan offurther Energy Department ments in the renewable energy space at a much lower risk. space atamuchlowerrisk. energy renewable inthe ments opportunity the invest-Enbridge with toexperiment closely related tothatof andgas resources. oil It provided also early-stage profi risk Th company,and distribution itsfi gastransportation aCanadian Enbridge, brought partnership for its 23-MW Neal HotTh Springsproject inOregon. futureconsider collaboration. partnership also provided both companies with the potential to Th portfolio. initsown thanothers cycle development into the tting eachcompany’s circumstance andleveraging unique e partnership leveraged Enbridge’s leveraged epartnership the familiarity with As a result, companies developing geothermal projects in projects in aresult, geothermal As developing companies projects. transaction forgeothermal costs resulting scale, for investments inrelatively atthis higher Th U.S. toraise Enbridge equity with partnered Geothermal ecreditworthiness of Neal the Hot Springsproject was t from the fi t fromthe are ts of partnership. ts of partnership. rms with the capital needed tomove capital needed the rms with nancial returnsnancial project andthe onthe nancing. At the same time, largernancing. At time, fi same the le of geothermal development, which is is which development, ofle geothermal risk return on a project that was further returnrisk onaproject thatwasfurther gainedaccessproject, toalower- Ormat the tocomplete cashneeded the providing Power. Geothermal Nevada growing By forthe partner wasseenasanideal Ormat of stronghistory fi business andalong integrated model With Ormat. avertically giant industry ajointventureOregon is geothermal with Power’s 30-MW project Geyser in Crump strategy. this deployed Geothermal Nevada PowerGeothermal andU.S. Geothermal Over the past the year,Over Nevada both eloanrepresented of balance the rst investment. geothermal rms. Th nancial performance, rms have partnered ese ese partnerships is rms e q q H OL’ NEWSSTAND WORLD’S THE NEWSSTAND WORLD’S THE q q q q M M M M M M q q Qmags Qmags q q M M M M ® ® RENEWABLE qM ENERGY qMqM PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDWORLD H Qmags NORTH AMERICA THE WORLD’S NEWSSTAND®

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Addressing Challenges to Securing Debt with Recourse to a Single Project Over the past year, geothermal developers have bundled combinations of their assets in order to leverage their equity investments with debt. In many cases, these assets are limited to a portion of those owned by the company but are broader than those assets tied to a specifi c project. Th is approach limits the amount of leverage developers have because the debt typically appears on the company’s balance sheet. In exchange, however, developers have secured the capital needed to continue to develop the resources to which they have rights. Gradient Resources (formerly Vulcan Power) and Ram Power have each used corporate assets as collateral to secure credit in order to continue development. Gradient Resources secured a $13 million loan from GB Merchant Partners, LLC, with the fi rm’s geothermal drilling and cementing equipment. Th e proceeds from the loan enabled Gradient Resources to continue development of three projects in Nevada. Th is limited-recourse loan only put select assets at stake, but was unique in that the capital was not tied directly to the projects it will support. In March 2011, Ram Power closed on a two-year $50 million credit facility providing additional working capital to support its portfolio of projects under development. Th e credit facility was secured by “unspecifi ed assets” of the company but is not tied to a single project. In addition, the lenders retained rights to exercise warrants based on Ram Power’s reliance on the credit facility. Th e warrants provide the opportunity for the lender to earn additional returns on its investment if it elects to exercise them.

Reducing Transaction Costs Associated with Project Finance Bundling projects to reduce transaction costs benefi ts both the lender and the borrower. Th e lender benefi ts from access to a portfolio of assets used to secure the loan. Th e borrower benefi ts from lower costs of capital, in terms of both fees to lenders and any arranger as well as in terms of staff time committed to clos- ing the deal. Both Ormat and John Hancock Life Insurance Company took advantage of these benefi ts in an application to the U.S. Department of Energy (DOE) for a Federal Loan Guarantee. Ormat bundled three projects – McGinness Hills, Jersey Valley and Tuscarora – that total 121 MW —achieving a scale similar to those achieved by wind projects. Meanwhile, bundling diversifi ed John Hancock’s resource risk and development risk for projects in multiple stages of development. In June 2011, DOE condition- ally awarded the bundle a partial guarantee of up to a $350 ______million loan.

14 thetheINTERVIEWINTERVIEW QUESTION: How Can the U.S. Solar Industry Meet Expectations? RenewableEnergyWorld.com asked solar executives and our social media community to present their strategies for a successful U.S. solar market. THE

Compiled by Meg Cichon, Associate Editor

We asked solar experts and THE QUESTION: our social media community The U.S. is expected to to lend their voices and defi ne what strategies they think will be one of the largest lead to a thriving solar industry. growth markets for Responses were varied, and many interesting opinions were solar power in the brought to light. next 5 years. What key strategy should This story is published on RenewableEnergyWorld.com, the solar industry where we encourage you to lend your own voice to the discussion: adopt to ensure these What would YOU do? projections are met?

Ed Woolsey: Only one and construction of Mary Hanna: Produce Yadi Carrasquillo: Dan Davis-Boxleitner: policy will work: Feed-in alternative energy sys- solar equipment at a Move grass root Encourage younger tariff s. Th e question tems. Th is would give local level (create jobs, America (by educating) generations to get in- should be: What strat- a ready base of trained save transportation to make the DOE and volved with solar energy egy is best for getting a professionals. costs, buy into the local the government insti- projects that teachers FIT policy in place? environmental push) tute aggressive national can include in their cur- NORTH AMERICA Powering People: We and help ensure that policies. Substitute riculum. Dan Brookshear: Th e need more government middle and lower in- dirty energy with clean high schools, universi- subsidies for solar/new come families can aff ord renewable energies like Cecilia Augustin: ties and colleges could battery storage technol- to install it. solar, wind, and fuel cell Promote the uses and participate in DOE ogy and less for coal and among others. applications of solar en- loan programs to get oil to open the market ergy with emphasis on students trained in and rapidly phase out technological develop- planning, engineering fossil fuels. ments. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

RENEWABLE qM ENERGY qMqM WORLD PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDH Qmags NORTH AMERICA THE WORLD’S NEWSSTAND® RDH RDH ENERGY RENEWABLE ENERG RENE OT AMERICA NORTH NORTH WORLD WORLD tax-oriented fi investors toinvest eligible incomplicated fi allowed tofl allowed isn’t capital investment ifthe built notbe will Th CEO –Recurrent Energy Arno Harris jobs, which is the single most the pressing is jobs, which creates marketplace. deployment Solar than itsability inthe tostand onitsown viability of acompany andproduct better eff R&D drive the competition Let viable. products arewhose notyet commercially directed toward being is companies solar Yet majority the of funding for government day. every cant volumes installed insignifibeing tions already exist andare Cost-eff GM –CanadianSolar Alan King to be used for solar projects. usedforsolar to be to fi (MLP)nerships structures, commonly used Masterrefundable; Part- or3)allow Limited TGP; Investment 2)make the Tax Credit to fi taxcreditswith thatare almost impossible stuck be projects endof will the 2011,solar temporarily,issue at itsdeadline butwith Treasury Grant Program (TGP) fi to mass produce solar to mass produce solar veloping cheaper ways ofthrough means de- production energy solar priceof decrease the wemust demands consumption energy order toincrease solar free of charges. universities business and engineering energy Wissam Fawaz: Chris Lanfranco: nancing barrier is due to a shortage of toashortage due is nancing barrier e30-GW pipeline W AMERICA orts of companies — nothing proves the —nothingproves of the orts companies ABLE nance real estate andoil/gas projects, nance. Th Y ective solar solu- , ow. Th e solution? 1) Extend the 1603 1603 the 1)Extend esolution? , nancial structures.nancial Th e solar Solar In In PreviousPage|Contents|Zoomin|out|FrontCover|SearchIssuNexPage PreviousPage|Contents|Zoomin|Zoom out|Front Cover|SearchIssue|NextPage - a reality? canbecome they so gies invest technolo- innew orinvestors ment to govern- from the money How doweget more Th panels. time. ready is big forthe solar unaware is lation that Education! Ahuge popu- Sierra SolarSystems: xed this xed this e 1603 e question is: is: equestion small companies to add employees. toadd companies small Americanthese of economy andallow the efi U.S. inthe need today. Th local distribution networks, WDG removes removes networks, distribution WDG local networks of feeding smallfacilities power Basedon Generation (WDG). Distributed Wholesale called model deployment friendly aneconomy- adopting power successfully is Solar Amonix Inc. Founder, CTO – Vahan Garboushian innovations. game-changing produce to inbasic potential ing research the with invest- be weshould existing technologies, into Instead money of pouring from. come breakthrough next can say the will where nature progress, of technological noone of unpredictable Butnologies. the because effi inthe ments improve- support, andtoincremental government without viable economically systems of thatare solar not deployment intosubsidies forthe amounts of money federal are governments sinking large and State development. toresearch and shifted Investment must be HyperSolar Inc. President andCEO– Tim Young t small businesses thatare businesses t small lifeblood the process 3) Streamline permitting 1603 2) Extended program SREC orFIT fossil fuels benefi fuels fossil over on roofs, solar Promote solar shingles Casey Newkirk: Institute: HeatSpring Learning tax benefi savings emphasize and , ciencies of existingciencies tech- ts. 1) 20-year 1)20-year , eseprojects ben- ts, and Peter Williams: Ben Gorman: tariff SRECs. nationalize same; mote andpro-standards, tariff national feed-in other renewables); adopt (and tosolar fossils breaks from tax shift s ReVision Energy Jen Hatch they produce. renewable electricity cost-based priceforthe generators are paida renewable electricity tariff (FIT)where eligible nationwide feed-in We mustlobbyfora to why solar is economically viable. is to why solar –let’sinstallations as example totheir look currently solar with is world the leading FIT. bylead adoptingits revised Germany investment. We Germany’s follow should investorswhile seeareasonable return on foradiverse ofallows growth technologies electricityable produce. Th they renew-are priceforthe acost-based paid generators electricity able renew- eligible where (FIT) tariff feed-in nationwide We must lobby fora Director –ReVisionEnergy Jen Hatch de-centralized models. models. de-centralized strategiesment andsimilar around WDG product of develop- their formpart should companies andmore. Solar terconnection of permitting, complexity the fi Rapidly Feed-in , MarketingDirector – , Marketing

the performance. effi available most the to achieve and hydrogen boilers radiant heating with and solar thermal PV both Combine Kambiz Pishghadam:

INTERVIEW ciency ciency and nancing, in- is formula q q H OL’ NEWSSTAND WORLD’S THE NEWSSTAND WORLD’S THE q q q q M M M M M M q q Qmags Qmags q q M M 15 M M RENEWABLE ENERGY WORLD NORTH AMERICA ® ® RENEWABLE ENERGY WORLD NORTH AMERICA 16 RDH RDH ENERGY RENEWABLE ENERG RENE OT AMERICA NORTH NORTH WORLD WORLD the W AMERICA ABLE *),-.-)/!")0-"! #$%&'(#) better, andbetter: better simply better, better, better, II is PVmaster scale inverter Reasons newlarge- the why INTERVIEW !" 98 Y + PreviousPage|Contents|Zoomin|out|FrontCover|SearchIssuNexPage PreviousPage|Contents|Zoomin|Zoom out|Front Cover|SearchIssue|NextPage

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______www.lt-i.com Director –SolisPartners Jamie Hahn Th projects. construction seen inlarge services installation providing are not Large multi-nationalcompanies of components. balance systemother (BOS) brackets, and connectors, inverters sizes, there forpanel arestandards noindustry Currently standardization. is energy oftotal cost solar factors inreducing the important of the One Naresh Nigam CTO –Sanmina-SCI labor would be outrageous. outrageous. be would labor and parts installation bulb, of cost the the manufacturer then socket own hadtheir fi cantly by standardizing hardware speci- industry, hasreduced which signifi cost PC industries the like other emulate should on more work. more quickly, totake them thusallowing projects integrators tocomplete enable also Streamliningfor consumers. would cost the hours of andbringdown work streamline tosave process the integrators By creating can uniformstandards, we requirementsting of eachmunicipality. permit- unique the exhausted inmeeting Muching permits. of anintegrator’s is time havewhich diff of –all 566 municipalities New Jersey has wide. alone nation- permitting process cations. For example, if every light bulb lightbulb cations. For ifevery example, We a uniform need , Managing erent processes forobtain- erent processes , e solar industry - comes a robust, modernized network. arobust, modernized comes supply power in the be- asmartgrid mix, resources more with bined energy renewable Com- generation. renewable dispatchable storage and integration andmanagement, andcurrent distributed regulation, voltage street response, demand lighting controls, active andreactive optimization, power detection, outage enables convergence also sustainable andcreates jobs.Th for utilities, benefi key commercial provides technology grid andreduces grid of cost the the solar. Smart of reliability the enhances technology and smartgrid bining solar distributed be encouraged at a federal and state level. encouragedbe atafederal level. and state andresearch andinnovationshould ship role, U.S. the where regain could agloballeader- CEO –Petra SolarInc Shihab Kuran Piésold andCo. Project Manager–Knight Dr. RickDamiani Fund (CalCEF) Fund (CalCEF) California CleanEnergy Dan Adler scientifi Both are importers. states coal southern the most of while boundaries, state their within andgas convinced coal of cheap abundant, remains tions. Alarge population of the part genera- forall andsaferenvironment clean of costs a andweighthe of energy renewable emphasize advantages the programsschool should why wecan’t copy thatsuccess. inour 50-state laboratory, even no reason, markets. inother Th deployment solar are principaldrivers of the massive often pricing Streamlined contracting andclear thatarements ineffi tobureaucratic goes engage- development andeff amount of money Currently,processes. adisproportionate anddeployment opment how tostandardize devel- Public outreach and outreachPublic and We thinkabout should Th eapproach of com- ts, addresses meaningful challenges challenges ts, addresses meaningful cally andtechnologically, afi is this , President – , , Senior ciently designed. . ort spent on solar onsolar spent ort ere’s eld eld is is q q H OL’ NEWSSTAND WORLD’S THE NEWSSTAND WORLD’S THE q q q q M M M M M M q q Qmags Qmags q q M M M M ® ® RENEWABLE qM ENERGY qMqM PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDWORLD H Qmags NORTH AMERICA THE WORLD’S NEWSSTAND®

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18 thetheINTERVIEWINTERVIEW

Gina Heng, GM, VP – solar industry needs to work with utility projects. Th e solar industry must work Mitsubishi Electric & companies, grid operators and regula- toward educating local banks on the Electronics USA, tors to help them better understand and benefi ts and long-term returns on solar Photovoltaic Division assess the impact large amounts of PV to create a more supportive fi nancial have on the grid. At larger penetration environment. Our industry’s ultimate levels (starting between 5-15 percent), challenge is to compete utilities are likely to get concerned about Tom Dinkel, with fossil-fueled electricity generation, cost impact. Th ere is limited data on how CEO – SunReports which has an artifi cially low price from de- large PV penetration might impact volt- cades of subsidies that dwarf government age, generation dispatch and general grid Performance based in- fi nancial support for the renewable energy reliability. centives rely on transpar- industries. To give renewable energy a ent, accurate reporting of fair chance, we must advocate for policies Gaurav Naik, the return on governments’ investments. that reduce fossil fuel subsidies and align Principal – GeoGenix Th e days of unaccountable solar incen- the price of carbon with its true social and tives are coming to a close. Policy makers environmental cost. Th e solar industry increasingly require that solar incentive must create a variety of programs include data verifying energy Lisa Frantzis, Managing solar fi nancing options performance of subsidized installations. Director – Navigant for businesses considering solar, espe- Similarly, banks are beginning to require cially small- to mid-size fi rms. For many energy production verifi cation in projects Providing additional companies, the up-front costs of solar are they fund, so performance based moni- analytical support for grid prohibitive, and a lack of comprehensive toring enables fi nancing for both solar integration will be very loan and fi nancing options means that thermal and solar PV projects via PPAs important over the next fi ve years. Th e they are unable to proceed with solar and other fi nancing vehicles. Get The Most from the Sun. Up to 500kW Central Grid-Tied Photovoltaic Inverters.

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20 thetheINTERVIEWINTERVIEW

Jack Calderon, Managing in proximity to each other. For example, on providing incentives to residential and Director, Solar Energy & a single roof with solar panels mostly commercial consumers can revolutionize Chaim Lubin, Associate – aff ects the energy usage in that particular how power is consumed in major cities Lincoln International building. However, as multiple buildings across America. install solar panels, they can network Th e benefi ts of solar together to create a “solar ring,” which John Jordan, grow exponentially as optimizes usage requirements across the VP – Dunmore multiple solar sites are constructed with- networked participants. A renewed focus Lessen the burden on the homeowner. You can’t expect the average Joe to install a $20,000 solar system on his roof that won’t pay for itself for 15-20 years — it’s bad economics. Secondly if “Joe” had $20K of disposable income he wouldn’t be the average Joe. Th e simple truth is, people want to invest in solar power. Solar- generated electricity has been a goal for the past 30 years, but in order for it to become a reality the fi nancial burden must be reasonable.

John Curcio, CCO – CAUTION Cupertino Electric Inc.

ONE°MEAN°BATTERY We must develop solar-specifi c safety standards. At its core, a solar project is a construction project. With the construction industry facing some of the tightest margins in recent history, we need to adopt industry-wide safety standards that are as stringent — if not more strin- Available in 20 countries on 6 continents worldwide, gent — as those of the larger construction industry. We need to acknowledge Rolls offers the broadest product line of deep cycle, low maintenance and maintenance the “hidden” costs of not working safely free batteries for the Renewable Energy market. From large-scale storage to small (such as citations, litigation, negative PR, village electrification, our flooded or AGM storage batteries deliver the power you insurance rate increases, etc.) and take a need every time. Each is backed by our industry leading warranty, solid reputation proactive approach to safety. and 97% recyclable at end of life. Green just got a whole lot meaner. We must develop solar- specifi c safety standards. At its core, a solar project is a construction project.

John Curcio, CCO – Cupertino Electric Inc.

______

22 theINTERVIEW

Matt Lamasney, Sales Tony Clifford, Reports on existing facts Support Specialist – Rheem CEO – Standard Solar and projects, as well as Manufacturing Company As an industry and future possibilities, can Th e solar industry must as individual companies, attract the attention of forge greater partnerships PV must “get big fast.” not only experts, but with electric co-ops. Th e Consolidation is going to also the general public’s nations’ more than 800 electric cooperatives continue in the PV industry, and we need have a unique opportunity to drive solar that consolidation for the industry to attention – the industry water heating adoption. For instance, in continue its rapid growth. If an individual should make use of this 2009 Nevada’s Valley Electric Association company is not growing at least at the opportunity. (VEA) launched the largest domestic solar industry growth rate, it will likely not be hot water heating program in the U.S. VEA around in fi ve years. Karl-Heinz Remmers, began off ering complete solar water heating CEO – Solarpraxis packages to its 17,000 members. Th e co-op Marlene Brown, Senior then installs the packages for a small fee Member Technical Staff – (less than $50 a month), which is added to Sandia National Labs the customer’s electric bill. After 10 years, cessible areas can equally provide power the homeowner owns the system. Solar We must couple from PV installations as large systems water heating has an opportunity to reduce energy effi ciency and can power large cities, which are becom- the electric load on co-ops’ grids, and help conservation with solar. ing more successful and more economi- members reduce energy costs anywhere Th ere is no reason to cally viable. Reports on existing facts and from $250-$550 annually. spend lots of money on solar before com- projects, as well as future possibilities, can pleting energy effi ciency and conservation attract the attention of not only experts, Bouaziz Ait-Driss, VP measures. Also, we need more energy and but also the general public’s attention Solar North America – solar education for the public to make — the industry should make use of this GL Garrad Hassan them more savvy consumers. Educating opportunity. the public would help promote a strong Demonstrate solar sustainable industry with less skepticism Greg Ashley, VP, COO – technology reliability by moving forward. Solar Frontier enhancing equipment reliability. Achieving this objective will require improving and Karl-Heinz Remmers, Sustainable energy raising the standards for OEMs, including CEO – Solarpraxis leaders and policy mak- certifi cation requirements for equipment ers must continue to destined to solar projects. Th is will entail Th e solar industry advance standards that reviewing the standards and proposing should address the public, ensure the highest quality, performance, improvements in accordance with the but not necessarily with a and environmental friendliness of our evolution of the industry and increases in uniform voice. energy sources. We must rise to the chal- average project size. Additionally, ensure Its high-tech nature makes for thrilling lenge of making solar energy solutions availability of a qualifi ed workforce to meet and interesting stories about the industry, as sustainable as they can be through the sustained growth of the industry by and the vast span of its application allows improvements in critical areas such as

planning training and fostering recognized people from all backgrounds to relate. energy payback, carbon footprint, safety solar careers. Areas with weak grids or otherwise inac- and environmental impact.

@SWDick @Bluenadas @philipricciardi @ChrisBolman NORTH AMERICA Present an understand- Lower entry costs for Th e U.S. solar industry 1. Storage able/workable ‘off the consumers. is on a good path. Th e 2. Transmission upgrades grid’ plan. government (state/fed) 3. SREC policy reform @EverybodySolar will have to adopt some 4. Nation-wide standards @Chaolyst A major micro-invest- strategies to ensure goals like solar ABCs We need a marketing ment platform. are met. council! RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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24 thetheINTERVIEWINTERVIEW

Patrick Perry, Land Use Michael Heck, Vice Presi- Joe Langan, President/ and Government Rela- dent Sales & Marketing – CEO – Langan Energy tions – Allen Matkins Leck DEGERenergie Solution Gamble Mallory & Natsis LLP Th e future belongs Th e most important to decentralized energy strategy for the U.S. solar Feed-in tariff s allow generation. Solar energy industry is to push for a utilities to purchase excess energy pro- therefore is predestined: federal renewable portfolio standard (RPS). duced by consumers at a price that meets Electricity is generated where it is Until the government creates nationwide or exceeds the cost of production. Without consumed. Th ere is no need to create an standards, many states will fail to implement a feed-in tariff , property owners have no expensive network infrastructure. Par- progressive alternative energy programs. incentive to produce more energy from ticularly in the U.S. with its vast expanses, Th ough a federally mandated RPS will en- renewable sources than they can consume. this is a decisive advantage over other compass a range of renewables, the existence As a result, distributed solar facilities are technologies like off shore wind turbines, of a general renewable standard will still undersized relative to the potential energy where energy has to be transferred over promote the growth of solar, the most imme- that could be produced. Federal law cur- many miles. diately viable source of renewable energy. rently preempts states from establishing feed-in tariff s. So without an amendment, Mike Miskovsky, CEO – Elliott Gansner, GM – a feed-in tariff can only be implemented as Zep Solar pvXchange North America a voluntary measure by individual utilities, which is unlikely under current conditions. Integration of new One major stumbling racking technology block hindering solar is essential to reduce growth across the U.S. is The most important balance-of-system the permitting process. strategy for the U.S. components costs, which can account Acquiring permits is often a cumbersome solar industry is to for up to 30 percent of the overall cost process, requiring the costly expenditure of push for a federal of a solar system. Standardizing across man-hours, and navigating the regulations the U.S. on a rail-free mounting system of each state is even more complicated. Try- renewable portfolio that uses drastically fewer components ing to do solar in the U.S. is not unlike work- standard (RPS). enables economies of scale, reduces ing with 50 diff erent countries. Th e solar installation time, cuts high shipping costs industry must begin to explore mechanisms Joe Langan, President/CEO – and enhances the structural properties of for streamlining permitting processes and Langan Energy Solution solar arrays. decreasing red tape so that solar companies

NORTH AMERICA

______RENEWABLE ENERGY WORLD ENERGY RENEWABLE

theINTERVIEW 25

can easily expand their areas of operation and complete projects more quickly. @JoeMorris_RWM @Intrepid2011 @Julie_Malone Show the global com- Introduction of Feed- No interruptions from Andrew Beebe, Chief munity an integrated in Tariff at the state the wrong side of Commercial Offi cer and system and how eff ec- level. Feed-in Tariff will government. Our infra- Interim President – Sun- tive it can be. make installations of structure needs to be tech America solar panels a very good stronger. @Riley_PA investment. Th e U.S. solar industry First we need congres- must eff ectively com- sional leadership and @AtlSolarMap municate that PV technology is already then we need a CES. No Tie federal and state commercially competitive today even more fear of coal and oil. funds (drinking age, without subsidies. Incremental innovation Policy matters. interstates, education) and manufacturing effi ciency have made to renewable energy. solar power competitive against certain @Dzonatas_Sol Generate X% of renew- traditional forms of power generation such Have California fi x able energy or lose as nuclear and natural gas peaker plants. In the Solyndra disaster money. Encourage buy- many cases, PV power is downright cheap recovery due to physical American with tariff s on – you can lock-in a power price for decades fi nancial property and foreign goods. with no volatility. Solar also has the added relative staff to #NYC in benefi t of creating about seven times more #IRENE. jobs than fossil fueled power plants, which is particularly valuable in this challenging employment environment.

Juan Suarez, Senior Director of Engineering and Earn a Bachelor’s Degree in Alternative Program Management – Unirac and Renewable Energy Management

Lowering cost is im- Courses include: perative for market expansion, but cost-per- Alternative Energy Equipment watt is a false measurement — total cost of Solar Energy and Photovoltaics ownership (TCO) paints a more accurate Wind Energy picture. Th e best way to lower TCO is to Hydroelectric Energy standardize solar infrastructure so that it Geothermal Energy is easy to install and maintain. High-value Call about our additional products should be built to last for decades degree programs: under extreme weather conditions. Com- Crisis and Disaster Management, panies should off er long-lasting warranties Construction Management, Business, that cover performance, rather than defects, Alternative Medicine, and Aviation

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time of an array and expedit- Boca Raton Campus (Main Campus) 888.226.0902 ing ROI will spur the expan- 5002 T-REX Avenue, Suite #100, Boca Raton, FL 33431 Sarasota Campus (Branch Campus) 888.785.8689 sion of the solar market. 6001 Lake Osprey Drive, Suite #110, Sarasota, FL 34240 Orlando Campus (Branch Campus) 866.314.4540 Juan Suarez, Senior Director of Engineering 887 East Altamonte Drive, Altamonte Springs, FL 32701 and Program Management – Unirac RENEWABLE ENERGY WORLD ENERGY RENEWABLE

26 thetheINTERVIEWINTERVIEW

The industry needs to Mike Nager, Jeffrey Seagle, increase our batting Marketing Manager – President – Stahlin Phoenix Contact Non-Metallic Enclosures average and simplify the landscape. The While costs of solar We must be con- majority of announced energy components, cerned with the safety of most notably the mod- the solar system. Electri- solar projects either ule, have fallen in recent years, the instal- cal fi res consistently rank among the top never get installed lation costs in the U.S. remain stubbornly fi ve causes of commercial building fi res, or fall years behind high. Standardization of mechanical and according to the National Fire Protec- schedule due to electrical components to simplify and tion Association (NFPA). One of the shorten the amount of time to install most eff ective ways to address fi re safety fi nancial, environmental systems is needed to bring the total cost concerns and better protect property or entitlement issues. of installation to levels that are required against any solar energy caused electrical to continue growth. Installation costs fi res is through education. Th e 2011 U.S. Mike Hall, CEO – Borrego Solar in Europe are much lower due to such National Electric Code (NEC) includes a Systems Inc. standardization. requirement for arc-fault protection in certain new rooftop PV systems. Make sure everyone involved in the solar project is aware of the latest codes /safety rules and include them in your employee safety program.

Don Alcorn: 1. Price Pragati Prasad: Smart Thai Xuan Nguyen: Th e Mike Hall, CEO – Borrego breaks for American Grid U.S. government should Solar Systems Inc. made equipment, 2. adopt Texas business- Higher or more rebates Denis Van Decker: Cre- friendly policies. Texas Th e industry needs on installs, 3. Educate ate a FIT Regime similar is the mini-economic to increase our batting the public more on the to Turkey. Th ey are more version of China. average and simplify the benefi ts effi cient than the mish- landscape. Th e majority mash in the U.S. Imple- Lee Gilden: Invest fully of announced solar projects either never Christopher Klug: ment 0-100 percent in trough collectors, get installed or fall years behind schedule Don’t forecast your prof- domestic content and silicon is too expensive due to fi nancial, environmental or entitle- its on the increase of the get a higher FIT rate the and not in great enough ment issues. Our batting average should price of silicon. higher you go. Th is way supply. be much higher than wind or other tech- there are no trade barri- nologies that have signifi cant transmis- Funda Dere: Th e U.S. ers and it will stimulate Tom Kabat: Develop sion, interconnection and environmental solar industry has to local manufacturing. combined systems challenges. Unfortunately the vast major- stay competitive with where you draw the ity of announced utility solar PPAs are far the Chinese solar Surya Anil: We need waste heat off the back from commencing construction. Th ere industry specifi cally in to create a renewable of PV panels and use it are too many developers and technol-

the labor-intense part energy portfolio for all to provide heat-pump ogy providers promising too much. We of production. How? states. water heating and heat- need to work with the utilities to develop Automate, automate. pump space heating. It processes and systems that distill the Mohamed Atta could be controlled via industries development pipeline down to Niraj Palsule: Fund re- 1.Government support smart grid. the most viable projects. search activities that are through a FIT 2. R&D NORTH AMERICA focused on developing a to create effi cient solar Mojahed Sanjak: Com- new material that would cells 3.Grid integration bined Solar PV/wind have more effi ciency using solar on a mass would be most effi cient. and lower the cost of scale production. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

WHAT DID OUR MODULES AND SYSTEMS LEARN FROM OUR CELLS?

Quality is our most important benchmark and the foundation for our extended product portfolio, which includes solar cells, modules and turnkey solar systems. To ensure that each and every product is of the highest quality, we pay special attention to every detail. A high-quality solar system, after all, depends on high quality of its individual components.

However these exacting quality standards do not just apply to our products alone. Our services, our staff and the way we communicate also measure up to our stated standard of being highly reliable.

Daniel Felsch from our Quality Division is especially vigilant in making sure that this standard is maintained.

Find out more about Q-CELLS at www.q-cells.com

Additional news 28 NEWS Samsung, Ontario Sign $3 Billion can be found at: Price of Wind Wind, Solar Deal p. 34 Lower Than Gas, www.renewable Hydro in Brazil Gene Breakthrough Could energyworld.com Auction p. 32 Unlock Ethanol Potential p. 34

Federal Judge Rejects U.S. Salmon Plan p. 35 TIMELINE AUG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Germany’s Solon To Close Denver International Airport Expands Solar U.S. Manufacturing p. 34 Generation to Become Largest in U.S. p. 35 Report: Hydropower GEA Names Industry Tops $56 Billion Evergreen Solar Files For Geothermal in 2011 p. 34 Bankruptcy, Looks to Sell Winners p. 34 Core Technology p. 34

LANZATECH, VIRENT, RTI LAND that was scoring best on preliminary tests and big ambitions. It was held up as an DOE GRANTS FOR DROP-IN could be molded into the right shape and example of a company thriving behind BIOFUELS maintain properties. American technology and manufactur- U.S. Energy Secretary Steven Chu Using a small commercial blade as ing during visits by then-Gov. Arnold announced up to $12 million to fund three a template, he manufactured a 29-inch Schwarzenegger, Energy Secretary Steven small-scale projects in Illinois, Wisconsin, blade that is substantially lighter, more Chu and President Obama. and North Carolina that aim to commer- rigid and tougher. Th e company had downsized its cialize novel conversion technologies to “Th e idea behind all this is the need planned growth starting in 2010 when accelerate the development of advanced, to develop stronger and lighter materials, the CIGS thin-fi lm manufacturer pulled drop-in biofuels and other valuable bio- which will enable manufacturing of blades an IPO, restructured its executive team, based chemicals. for larger rotors,” Loos said. and announced plans close one of its Th e projects, funded through DOE’s California plants and delay expansion of Offi ce of Energy Effi ciency and Renewable GE, DOE LOOKING TO DEVELOP its newest facility. Energy, seek to accelerate research and 10- TO 15-MW TURBINE According to a company press release, development that will lead the way GE has begun work on the fi rst phase of Solyndra saw strong growth in the fi rst toward aff ordable, clean alternatives a two-year, $3 million project with the half of 2011 and secured a number of to fossil fuels and diversify our nation’s U.S. Department of Energy to develop a orders for very large commercial roof- energy portfolio. wind turbine generator that could support tops in North America. Offi cials said the large-scale wind projects in the 10- to company could not “achieve full-scale RESEARCHERS BUILD A 15-MW range. operations rapidly enough to compete in TOUGHER, LIGHTER WIND GE’s design would use architecture and the near term with the resources of larger TURBINE BLADE cryogenic cooling technology along with foreign manufacturers.” Th e company Eff orts to build larger wind turbines able MRI magnetic technology that could have went on to say a global oversupply of solar to capture more energy from the air are more economy of scale and reduce the panels, falling prices and uncertainty in stymied by the weight of blades. A Case cost of energy produced by the turbines. traditional markets such as Europe led to Western Reserve University researcher has Phase I will focus on developing a its decision to exit the solar business. built a prototype blade that is substan- conceptual design and evaluating the tially lighter and eight times tougher and economic, environmental and commercial APPLIED LAUNCHES SOLAR more durable than currently used blade factors associated with it. Phase II will TOOLS TO MEET GREATER

materials. explore the potential commercialization of DEMAND FOR EFFICIENT CELLS Marcio Loos, a post-doctoral research- the technology. GE will work with the Oak Effi ciency — the rate that solar cells or er in the Department of Macromolecular Ridge National Laboratory on the project. modules convert sunlight into electricity Science and Engineering, worked with — has always been an important metric colleagues at Case Western Reserve, and SOLYNDRA TO FILE FOR for manufacturers. But improving it has investigators from Bayer MaterialScience BANKRUPTCY; 1,100 LOSE JOBS received greater emphasis in recent years, NORTH AMERICA in Pittsburgh and Molded Fiber Glass Fremont-Calif.-based Solyndra, which in and factory equipment manufacturers Co. in Ashtabula, Ohio. Th e team com- 2009 received a $535 million federal loan have responded with R&D eff orts to pared the properties of new materials guarantee, announced that it would fi le deliver better tools. Applied Materials with the current standards used in blade for Chapter 11 bankruptcy protection and unveiled a new set of equipment under manufacturing. immediately lay off 1,100 full-time and its Baccini brand that it said will enable Loos built the world’s fi rst polyure- temporary employees. customers to lower production costs and thane blade reinforced with carbon nano- Th e company received much fanfare use advanced technologies to boost cell tubes. He wanted to be sure the composite for its innovative rooftop technology effi ciencies. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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30 NEWS DOE Offers $133.9 Mil- Renewables lion Conditional Loan Investment Breaks 500 MW of California Guarantee to Abengoa Records p. 30 Solar Shifts from CSP Bioenergy p. 32 LanzaTech, Virent, RTI Land to PV p. 32 Solar Stunner: DOE Grants for Drop-in Biofuels America is a $1.9 p. 28 Billion Exporter of Solar Products Researchers Build a Tougher, p. 30 Lighter Wind Turbine Blade p. 28 TIMELINE GE, DOE Looking to Develop AUG1819202122232425262728293031 10- to 15-MW Turbine p. 28

Solyndra To File for Bankruptcy; GT Buys Confl uence World’s First Hybrid 1,100 Lose Jobs p. 28 Solar, Set to Offer Solar-Geothermal SoloPower To Expand U.S. Canada to Provide Novel Silicon Ingot Power Plant Under- Manufacturing Capacity to Loan Guarantee Applied Launches Solar Tools Technology p. 30 way p. 30 400 MW p. 32 for Lower Churchill To Meet Greater Demand for Hydro Project p. 32 Effi cient Cells p. 28

Th e new line is called Baccini Pegaso, mal power plant — a 24-MW facility that $70 billion of that took place in developed and it covers equipment for screen will combine 80,000 polycrystalline PV countries, more than $72 billion occurred printing metal lines (commonly silver), a modules with traditional hydrothermal in developing countries. dryer, defect inspection, and testing and technology. sorting silicon solar cells. Th e metal lines One of the largest power plant develop- SOLAR STUNNER: AMERICA IS serve as the highways that conduct and ers in the world, Enel, is building the A $1.9 BILLION EXPORTER OF transport the electrons out of the cells. project. Th e company decided to go with SOLAR PRODUCTS Printing them with precision is important PV because of the cost competitiveness With all the stories about China to makes sure they don’t cover up the cell of the technology. But Enel is also in the dominating the solar photovoltaics (PV) surface that should be exposed to the sun early stages of developing a similar hybrid manufacturing sector, you might not think to generate electricity. Concentrating Solar Power-Geothermal that America is a net exporter of solar Th e Santa Clara, Calif., company “test plant” in the same location. products. But it is — to the tune of $1.8 already sells Baccini-branded tools for “All these things are going to be neces- billion. Th at’s a $1 billion increase over net these steps. In fact, Applied claims to sary as we move into renewables,” said exports documented in the solar sector be the top supplier of screen-printing Energy Secretary Steven Chu, speaking at last year. systems and says about 75 percent of the the press conference. “Th is is an incredible In fact, a report released by GTM silicon solar cells made today come from new technology that can be used across Research and the Solar Energy Industries its Baccini equipment. But Pegaso is the the country.” Association found that the U.S. has a $247 next-generation system which, unlike million trade surplus with China. other Baccini lines, comes with dual lanes RENEWABLES INVESTMENT U.S. imports in 2010 were estimated at — instead of a single track — for screen- BREAKS RECORDS $1.4 billion, while exports were estimated printing silicon wafers. Two lines of wafers Global investment in renewable power to be between $1.7 billion – $2.0 billion can move through the printing process and fuels set a new record in 2010, accord- based on the availability of data for capital at the same time, a design that aims to ing to a new analysis commissioned by equipment sales. Th is made the U.S. a net reduce the downtime when equipment UNEP’s Division of Technology, Industry exporter of solar goods to China by $247 has to remain idle for maintenance. Th e and Economics (DTIE) from Bloomberg million to $539 million. Imports came equipment also comes with inspection New Energy Finance. Investment hit $211 predominantly from modules ($1.2 bil- equipment that can look for defects and billion last year, up 32 percent from a lion), while exports were driven by capital make adjustments quickly to correct any revised $160 billion in 2009, and nearly equipment ($708 million to $1 billion)

mistakes. fi ve and a half times the fi gure achieved as and polysilicon ($873 million). (Th is news Despite reports about solar manufac- recently as 2004. write-up contributed by Stephen Lacey at turers producing more panels than the Th e document, Global Trends in Climate Progress.) market can handle over the past year, cells Renewable Investment 2010, an Analysis with higher effi ciencies remain a hot com- of Trends and Issues in the Financing of GT BUYS CONFLUENCE SOLAR, modity, said the company. Renewable Energy, reports that the record SET TO OFFER NOVEL SILICON NORTH AMERICA itself was not the only eye-catching aspect INGOT TECHNOLOGY WORLD’S FIRST HYBRID SOLAR- of 2010. Solar equipment maker GT Advanced GEOTHERMAL POWER PLANT Another was the strongest evidence yet Technologies bought Confl uence Solar for UNDERWAY of the shift in activity in renewable energy $60 million to become the only provider of A group of business and policy leaders towards developing economies. Financial a technology that just about every silicon were in Las Vegas at the National Clean new investment, a measure that covers cell maker wants. Energy Summit to announce the ground- transactions by third-party investors, was Confl uence Solar has developed equip- breaking of the world’s fi rst solar-geother- $143 billion in 2010, but while just over ment to make monocrystalline silicon RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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32 NEWS

ingots at lower costs than the conven- DOE OFFERS $133.9 MILLION PRICE OF WIND LOWER THAN tional method, GT’s CEO Tom Gutierrez CONDITIONAL LOAN GAS, HYDRO IN BRAZIL AUCTION told fi nancial analysts during a conference GUARANTEE TO ABENGOA As renewables across leading global mar- call. It’s a type of technology that has the BIOENERGY kets strive toward grid parity, wind may solar world buzzing, including GT’s exist- In Kansas, the US Department of Energy have just become the cheapest option in ing customers. has off ered Abengoa Bioenergy a condi- Brazil. Monocrystalline silicon cells are tional commitment for a $133.9 million In a government energy auction, 44 several percentage points more effi cient, federal loan guarantee for the construc- wind developers saw their bids accepted but also pricier, than their multicrystalline tion of its “fi rst of a kind” commercial at an average price of 99.58 reais per counterparts. Silicon ingots are materials scale biorefi nery facility to produce megawatt-hour. Th at converts to about that are made into wafers, from which renewable liquid fuel from earth’s most $62.07. Th ose wind developments would solar cells are produced. Th e Confl uence abundant organic feedstock source – total more than 1,000 MW of new capacity. acquisition enables GT to enter the plant fi ber, or cellulosic biomass. Th e Brazilian government also accepted monocrstalline silicon equipment busi- With the off er of a conditional commit- bids for one hydro plant (102 reais, ness. GT already sells equipment for ment now received, Abengoa Bioenergy $63.58), four biomass plants (102.41 reais, making multicrystalline silicon ingots. has announced that it intends to start $63.83) and two using natural gas (103.26 Th e interest in this type of solution construction on the site, which is located reais, $64.36). is extremely high,” Gutierrez said. “We near Hugoton, in Stephens County, According to the Global Wind Energy will be the only merchant supplier in the Kansas, in the very near future. Council, Brazil had just under 1,000 MW marketplace for some time.” of installed capacity by the end of 2010. SOLOPOWER TO EXPAND U.S. Th e country has seen strong growth in CANADA TO PROVIDE LOAN MANUFACTURING CAPACITY TO projects under construction and under GUARANTEE FOR LOWER 400 MW development, and the auction results CHURCHILL HYDRO PROJECT San Jose-based SoloPower, which makes could to strengthen the nation’s wind Th e Government of Canada will provide fl exible thin-fi lm solar cells and modules, energy eff orts. or purchase a loan guarantee for the has received a $197 million Department of Th e news came on the same day that Lower Churchill clean energy projects Energy loan guarantee that the company Danish wind giant Vestas announced that in Newfoundland and Labrador, reports says will allow it to produce about 400 it was opening its fi rst assembly plant in indicate. megawatts (MW) of modules each year. Brazil. Th e projects involve the Muskrat Falls According to the company’s website, hydroelectric generating station and three SoloPower moved into its current 20-MW 500 MW OF CALIFORNIA SOLAR power transmission lines. plant in 2008. SHIFTS FROM CSP TO PV Nalcor and Emera’s $6.2-billion Phase SoloPower will expand its existing In a move that underscored the grow- 1 of Lower Churchill includes an 824-MW operation in San Jose, Calif. and build two ing shift from concentrating solar hydro plant at Muskrat Falls and under- new facilities in Portland, Ore. Th e com- power (CSP) technology to photovolta- sea transmission lines linking Labrador, pany says the expansion will create 450 ics, especially in the United States, Solar Newfoundland and Nova Scotia. permanent positions and 270 construc- Millennium announced that it would Nalcor said previously that the Lower tion jobs. convert its 500-megawatt (MW) project in Churchill hydro project would include SoloPower recently began expanding Blythe, Calif. to PV. a pair of generating facilities at Muskrat its San Jose facility. Construction on the U.S. subsidiary Solar Trust of America Falls and Gull Island, with a combined fi rst Portland plant could start as early as cited the lower cost of PV modules and

capacity of more than 3,000 MW. September. more favorable lending conditions as reasons for the shift in technology. FAST FACTS Construction has already begun on the fi rst phase of the project. When 6.2 Billion completed, the two-phase project will be 1,000 MW – far larger than any current NORTH AMERICA Nalcor and Emera’s $6.2-billion Phase 1 of Lower Churchill includes an 824-MW hydro plant at Muskrat Falls and undersea transmission lines operating site. linking Labrador, Newfoundland and Nova Scotia. Solar Millennium said it will continue to specialize in CSP in select international markets. “Our long-term strategy remains 1,000 MW unchanged,” said CEO Christoph Wolff . Solar Millennium announced that it would convert 500-megawatts of its Blythe, Calif. project from CSP to PV. Construction has already begun on the “We see solid demand for CSP in the first phase of the project. When completed, the two-phase project will be world’s growth markets such as Africa, the 1,000 MW – far larger than any current operating solar power site. Middle East, India and China. Th is is also RENEWABLE ENERGY WORLD ENERGY RENEWABLE

______

34 NEWS

true for Southern Europe where we have opment, project management, fi nance, Under the terms of the contract, just achieved fi nancial close on our fourth and other support functions. Tucson will Samsung C&T will build projects totalling CSP plant in Spain,” Wolff added. remain the headquarters of the company’s 520 MW in the Haldimand and Chatham- Earlier this year, the Department North American operation. Kent regions and totalling 550 MW in of Energy approved a $2.1 billion loan “We regret the near-term impact of Kingston and Bruce. Korea Electric Power guarantee for the construction of 500 this business decision on our employees Corp. will design the plants’ electrical MW of CSP at the Blythe site. However, and the Tucson community, but as a wiring and operate the plants. the company said it decided to surrender company Solon is adapting to a rap- Samsung C&T said the contract repre- that conditional backing in order to move idly changing solar market,” said Dan sents the fi rst two steps of a fi ve-step plan toward PV. Alcombright, President and CEO of North over two decades to build and operate America for Solon. 2,000 MW of wind capacity and 500 MW of GEA NAMES GEOTHERMAL Th e move for the German-based com- solar power capacity in the province. WINNERS pany comes during a period in which the Construction is expected to begin in Th e Geothermal Energy Association has global PV industry deals with a softening 2012 and be completed by 2014. announced the winners for its inaugural European market and an inventory of In 2010, Samsung committed to invest GEA Honors, designed to recognize the about 8.6 GWs, which has contributed to $7 billion ($7.07 billion American) under individuals and companies that have the falling price of modules. Ontario’s Green Energy Act. Th at invest- made signifi cant contributions to the ment pledge came in exchange for $110 development of the geothermal industry. EVERGREEN SOLAR FILES FOR million ($111.17 million) in subsidies over TAS Energy won the Technological BANKRUPTCY, LOOKS TO SELL the next 25 years. Advancement award for its development CORE TECHNOLOGY of new high-effi ciency binary expanders, Evergreen Solar is fi ling for Chapter 11 so GENE BREAKTHROUGH COULD which have substantiated the commercial that it can carry out a re-organization plan UNLOCK ETHANOL POTENTIAL viability and utility use of low-temperature and perhaps stay in business somehow. Th e Th e federal government has stepped up resources. Massachusetts company said it also will lay its eff orts both fi nancially and in the lab Ormat Technologies won for off about 65 people and stop production at in an eff ort to boost American biofuel Economic Development for its contribu- its Michigan factory. production. tion to the development of local, regional, Th e company’s woes have been well A team of researchers at the and national markets through the documented and involved both its ability Department of Energy’s BioEnergy development of geothermal systems in to make and sell its silicon solar panels Science Center has pinpointed the single Nevada. Th e Environmental Stewardship more cheaply. Investors began losing gene that controls ethanol production award went to EnergySource for its confi dence in Evergreen a few years back, capacity in a microorganism. Researchers Hudson Ranch 1 Project in Imperial when the company was posting mounting believe the discovery could be the missing Valley, Calif., which is designed to losses. In 2009, the company announced link in developing biomass crops that

dramatically reduce CO2 emissions and plans to expand production by setting up produce higher concentrations of ethanol water use. a manufacturing base in China instead at lower costs. According to the DOE, the of the United States, as it had previously discovery of the gene controlling ethanol GERMANY’S SOLON TO CLOSE planned to do. It also dialed back produc- production in a microorganism known U.S. MANUFACTURING tion in the United States as well. as “Clostridium thermocellum” will mean Solon announced that it will shutter its While Evergreen worked on its new that scientists can now experiment with Tucson, Ariz.-based photovoltaic mod- manufacturing strategy, many of its genetically altering biomass plants to

ule manufacturing facility by the end of peers, particularly those in China, were produce more ethanol. October while shifting its focus to utility- able to line up fi nancing and build new Meanwhile, the departments of energy scale project development. factories. Silicon solar panel prices have and agriculture announced Th ursday they About 60 of the 130 positions at the fallen by more than 50 percent in the past would spend $12.2 million on 10 research Tucson site are expected to be eliminated. two years, and the pressure to cut costs projects across the country. Jobs will remain in sales and marketing, continues to be intense this year as supply NORTH AMERICA engineering, research and product devel- outstrips demand. REPORT: HYDROPOWER INDUSTRY TOPS $56 BILLION FAST FACTS SAMSUNG, ONTARIO SIGN $3 IN 2011 BILLION WIND, SOLAR DEAL A report indicates that the global hydro- South Korea-based Samsung C&T Corp. power market is worth $56 billion this year. $56 Billion has signed a $3 billion (Canadian) contract Th e “Hydropower Market 2011-2021” A report indicates that the global hydropower market is to build wind and solar energy plants in report by independent business informa- worth $56 billion this year. Ontario. tion provider Visiongain was presented by RENEWABLE ENERGY WORLD ENERGY RENEWABLE

NEWS

Global Information Inc. Visiongain’s forecast is defi ned in terms of spending on new hydropower projects in addition to spending on upgrades and expansions.

FEDERAL JUDGE REJECTS U.S. SALMON PLAN A federal judge in Oregon has found that the Obama administration’s attempt to make federal hydroelectric power projects in the Northwest safer for protected salmon violates the Endangered Species Act, the Associated Press reported. Judge James Redden of Federal District Court in Portland ruled that the plan, known as a biological opinion, is too vague and uncertain on specifi c steps that will be taken in future years to improve salmon habitat. Redden said he did not think the government could meet the standards of the Endangered Species Act by habitat improvements alone, and that it was time to consider new options, including removing some of the dams. Th e judge left the plan in place through 2013, when federal agencies must come up with more specifi c projects to help the salmon population. National Hydropower Association Executive Director Linda Church Ciocci said, “While we are still reviewing the decision, NHA is disappointed that the Pacifi c Northwest will continue to be distracted by litigation for several more years as a result of this latest ruling by Judge Redden regarding the federal hydroelectric dams along the Columbia and Snake Rivers. NHA believes restoring salmon runs in the Pacifi c Northwest is best served by pursuing the science-based, cost-eff ective methods proposed by the past two presidential administrations and approved by well respected members of the scientifi c and environmental communities. Th e plan should be given the opportunity to succeed.”

DIA EXPANDS SOLAR GENERATION TO BECOME LARGEST IN U.S. With the completion of a 4.4-MW ground-mounted solar power system, the Denver International Airport (DIA) now has more than 8 MW of solar power — more than any commercial airport in the U.S. It now receives over 6 percent of its electricity via solar power. DIA hopes to continue its green initiatives and cost savings with the project. “We support alternative energy applications at DIA because these projects are good for the environment while positively impacting our bottom line; they are fi nancially sustainable,” said Kim Day, aviation manager at DIA, in a press release. “Th is airport was built with a goal of being green, and with this additional solar array, Denver International Airport now has one of the largest solar installations in North America.” Constellation Energy built, owns and maintains the solar PV system for this project. And the DIA signed a 20-year power purchase agreement with the utility to buy the electricity produced. Th e airport expects to receive approximately 7,000 MWh annually from 19,000 Yingli solar photovoltaic panels. Th is is the third solar project for the DIA, the fi rst two being 2-MW and 1.4-MW installations that were built and managed by Quanta Services Intermountain Electric. In total, the DIA instal- ______lations cover 45 acres of farmland near the airport.

36 The DEAL

A Wind Turbine at a South Dakota Wind Farm.

Courtesy Dustin Tinney

The DEAL

Cooperative South Dakota Wind Farm Nets 600 Local Owners

John Farrell, Institute for Community wind power But the SDWP project is particularly Local State Reliance can happen when an innovative coop- noteworthy, with its seven turbines having

erative combines with favorable federal nearly 100 owners (farmers and South renewable energy incentives. Th at’s what Dakota residents) per turbine. In all, there happened in South Dakota, where more are more than 600 owners of the farm. than 600 local investors became owners of Th e project was born of a commitment the South Dakota Wind Partners (SDWP) by local electric cooperative, East River, to 10.5-MW wind project. economic development. In earlier years, the NORTH AMERICA Th is community wind farm is one part cooperative had helped its members invest of the 162-MW Crow Lake Wind project in local ethanol plants. Now, it sought an developed by Basin Electric subsidiary, opportunity to open a nearby wind project PrairieWinds SD 1. When it came online to local investment. in early 2011, the 108-turbine project Th e cooperative connected with three near White Lake had already earned the other local organizations, the South distinction of being the largest wind project Dakota Farm Bureau Federation, the owned solely by a cooperative. South Dakota Farmers Union and the RENEWABLE ENERGY WORLD ENERGY RENEWABLE

The DEAL 37

South Dakota Corn Utilization Council. model for others to participate in community- “There’s a lot of Th ese four groups formed the SDWP based wind projects.” and sought advice from wind developer Financing for the SDWP project was political benefi t in Val-Add Services on creating a community organized as an intra-state off ering under letting local people wind project. securities law, avoiding the laborious become investors I spoke with Brian Minish from Val- and costly federal registration process Add about the structure of the project. for investment off erings, but limiting in the project,” Brian Most important, said Minish, was the the project to participants within South Minish said. “Local availability of a cash grant in lieu of the Dakota. Th is was a minor issue, since the ownership can help federal Production Tax Credit (PTC) for four organizations all had a large number wind power. Th is incentive typically takes of members with the capital and interest reduce opposition to the form of a 2.1-cent per kilowatt-hour in participating in a local wind project. Th e wind power projects.” tax credit over 10 years. Wind projects intra-state off ering has been used in other used the credit by fi nding fi nanciers to community wind projects, including those provide cash for building the project in developed by National Wind and others. exchange for the tax benefi ts. Approximately 80 percent of the investors Minish’s company, Val-Add Services, has When the economic crisis hit, many in the SDWP project were members of the already fi elded inquiries from interested of the biggest “tax equity fi nanciers” four participating organizations, and the community wind projects in New York, disappeared, unable to use tax credits remainder were South Dakota residents. Texas and Nebraska. However, it may be when they had no profi ts or taxable Th e eligible investors in the Wind diffi cult to replicate the South Dakota income. With typical tax equity fi nancing Partners project had to select from three Wind Partners project. Th e 1603 cash grant drying up, the government converted the types of shares: Class A, Class B, and Class expires at the end of 2011 and without program to a cash grant. C. Each share was $15,000, with Class A it Minish admits that the focus will shift Th e cash grant rescued many wind and B shares primarily composed of debt, back toward the tax investor rather than projects and provided some new opportu- and Class C shares primarily equity. the many individuals who invested in the nities. For one, it saved project developers Th e major diff erence between the share South Dakota project. With a much smaller money. Renewable energy projects had classes was the type of benefi t sought by pool of local investors, it won’t be easy to to sell their tax credits for as little as 50 the investor. duplicate the success of the SDWP 10.5- cents on the dollar to equity investors who Debt-heavy shares (Class A and B) grow MW wind project. wanted their own return on investment. like a bond, with investors getting a fi xed With the cash grant, wind power projects rate of return for several years followed by John Farrell directs the Energy Self-Reliant no longer required a tax equity partner. repayment of their principal. Equity shares States and Communities program at ILSR and Additionally, the change to a cash grant (Class C) provide a share of the tax benefi ts he focuses on energy policy developments opened the door to non-profi ts, coopera- (accelerated depreciation) as well as a that best expand the benefi ts of local owner- tives, and other non-taxable entities to dividend (if the project proves profi table). ship and dispersed generation of renewable develop projects owned by their members. Th e rate of return on the debt portion of a energy. His latest paper, Democratizing the In the case of SDWP, it made the broader share is 7 percent for Class A, 6.75 percent Electricity System, describes how to blast the ownership model possible. for Class B, and 5.5 percent for the small roadblocks to distributed renewable energy Using the cash grant (commonly called portion of debt in Class C. Th e forecast generation, and how such small-scale renew- the “1603 grant” after the section of federal dividend (for Class C shares) is a 4 percent able energy projects are the key to the biggest law), it was possible to reach out to indi- annual return on investment. strides in renewable energy development.

vidual investors instead of the typical tax Minish, who manages the project for investor. Th us, in addition to East River’s the South Dakota Wind Partners, hopes Farrell also authored the landmark report cooperative members, the farmer-mem- to see future opportunities for this kind Energy Self-Reliant States, which serves as the bers of the other three SDWP organizations of development. “Th ere’s a lot of political defi nitive energy atlas for the United States, would be able to join in the project. benefi t in letting local people become detailing the state-by-state renewable elec- Jeff Nelson from East River Electric investors in the project,” Minish said in tricity generation potential. Farrell regularly NORTH AMERICA explained in this interview from an AWEA an interview last month. “Local owner- provides discussion and analysis of distributed report: ship can help reduce opposition to wind renewable energy policy on his blog, Energy “Th is development model created oppor- power projects.” According to the National Self-Reliant States (energyselfreliantstates. tunity for small local investors to have direct Renewable Energy Laboratory, local owner- org), and articles are regularly syndicated on local ownership in wind energy and access ship can also create signifi cantly higher Grist and Renewable Energy World. the tax benefi ts previously reserved for large local economic benefi ts, a fact that likely equity investors,” said Jeff Nelson, general contributed to East River Electric’s interest John Farrell can also be found on Twitter @ manager at East River Electric. “It off ers a in the project. johnffarrell, or at [email protected]. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Developer Project name Ausra Kimberlina Tessera Solar Maricopa Solar Power Plant Chevron Technology Ventures Unnamed eSolar Sierra SunTower Luz Solar Energy Generating Systems (SEGS) VIII Data Points Luz Solar Energy Generating Systems (SEGS) IX

Sopogy Keahole Solar Power GreenVolts Inc. GV1 BrightSource Energy Ivanpah Solar Electric Generating System (SEGS) II BrightSource Energy Ivanpah Solar Electric Generating System (SEGS) III BrightSource Energy Ivanpah Solar Electric Generating System (SEGS) I

Operating 509

Soitec/CSOLAR Imperial Solar Energy Center West Tessera Solar San Luis Valley Under Construction 679 Emcore/SunPeak Power Name TBA BrightSource Energy Name TBA Siemens Energy Mojave Solar Park

CSP Under Development 7,886

Operating 295 Developer Project name Florida Power & Light DeSoto Next Generation Solar Energy Center First Solar/Sempra Generation Copper Mountain Solar Project Under Construction 856 RRE Austin Solar Pfl ugerville Solar Power Plant First Solar Paloma Solar Plant Solar Millennium Blythe Solar Power Project: Phase I PV

Westside Holdings Westlands Solar Park Needle Mountain Power LLC Sterling Project Under Development 17,350 Chevron Energy Solutions Lucerne Valley Solar Project Sempra Generation Mesquite Solar Corporación Gestamp/ GA-Solar NA Solar Energy Initiatives Inc. West Texas Solar Park Nextlight Renewable Power/First Solar Silver State South Solar Project Scatec Solar Redhills Renewable Energy Park

City/County State Technology Online MW capacity Bakersfi eld CA Linear Fresnel 2009 5 Phoenix AZ Dish-engine 2010 2 Questa NM Lens CPV 2011 1 Antelope Valley CA Tower 2009 5 Widening Kramer Junction CA Trough 1990 80 Kramer Junction CA Trough 1991 80 pipeline

Oahu HI MicroCSP 5 The American solar industry Byron CA CPV 2 Barstow CA Tower 133 is bracing for an exponential Barstow CA Tower 133 expansion of its solar capacity as Barstow CA Tower 126 large-scale projects work their way through the development stage. The U.S. currently has less than Imperial County CA CPV 150 1 GW of large-scale solar. The Saguache County CO Dish ‐engine 145 TBA SW US Lens CPV 200 pipeline, however, is fl owing with TBA NV Tower 1,200 potential. CSP currently dominates TBA CA Trough 533 the large-scale sector in both projects in operation and those under construction. The future, however, seems to be tilting toward PV, which represents two-thirds of the projects under development. A recent example of this shift

City/County State Technology Online MW capacity occurred in mid-August when Arcadia FL PV 2009 25 Solar Millennium switched the fi rst Boulder City NV Thin-fi lm 2010 55 500 MW of its 1,000 MW project in Blythe, Calif., from CSP

Pfl ugerville TX PV 60 to PV. At left is a sampling of Gila Bend AZ Thin-fi lm 17 projects at various stages. Blythe CA PV 500 Source: Solar Energy Industries Association (SEIA). Project database last updated on June 28, 2011.

San Joaquin Valley CA PV 5,000 Lake Havasu City CA PV 1,200 San Bernardino County CA Thin‐fi lm 45 Arlington AZ PV 700 Guadalupe County NM PV 300 NA TX PV 300 Primm NV PV 267 Iron County UT PV 100

40 Solar Strengthening PV’s Backbone through Inverter

Innovation In recent years, the photovoltaic market has grown rapidly in North America as a result of falling module prices and federal incentive programs. But at every PV plant, there is a secret behind the panel: a computer that makes it all happen. Th roughout the solar industry, the inverter is known as the central nervous system — the The competition is fi erce backbone of the PV array. “Integrators and developers are beginning to realize in the inverter market. that the inverter’s role is not just for converting power, but Here’s a look at recent it is the ‘brains’ behind the entire system,” said Bill Rossi, trends, technological chief marketing offi cer for Enphase Energy. advancements and how If solar isn’t transferred from DC to AC power, it cannot be connected to the grid. Th e inverter is responsible for the industry is working to the transformation of distributed energy into AC power. reduce costs. If the inverter isn’t working, the entire PV system will go down. Not only is it perhaps the most Lindsay Morris, Associate Editor, fundamental element of the PV process, but Power Energineering innovations in inverters could result in smarter solar energy processes and easier implementations of solar projects.

NORTH AMERICA RENEWABLE ENERGY WORLD ENERGY RENEWABLE

42 Solar

PV manufacturers recognize that Breakdown of PV costs Fig. 1 module costs are declining rapidly, but the BOS (Balance of System) cost are see- Prices based on national average U.S. labor rates (electrical contractor and roofer) ing much more modest declines, said Paul and exclude system O&M, financing costs Sales tax (5%) Bundschuh, vice president of business $7.00 development for Ideal Power Converters. Installer overhead and profit “BOS costs including the inverter and $6.00 $5.71 Site preparation installation are increasingly the bottle- neck to lowering LCOE long-term.” $5.00 $4.59 Land If manufacturers want to lower LCOE $3.37 $4.13 long-term, the focus must also be on the $4.00 $3.77 Permitting, commissioning BOS costs instead of just module costs, Installation labor $3.00 Bundschuh said.

Tracker “We’ve been so successful at address- $2.00 ing the module, but the inverter has a Installation materials huge eff ect on installation costs.” $2.15 $2.05 $1.95 $1.95 $1.29 $1.00 Inverter Inverter costs could soon comprise 10 Installed system price ($ per W PDC) 5 215 187.5 187.5 187.5 to 15 percent of the installed PV system kW kW kW kW kW $0.00 Module cost, but also strongly impact the installa- Residential Commercial Utility Utility Utililty (fixed axis) (1 axis) (Fixed axis) tion costs, which are about 40 percent of c-Si (14.4%) CdTe (11.1%) the installed PV system cost. Source: eere.energy.gov “As the penetration of PV on the grid increases, you’ll see utilities requesting Solar Makes Cents per-watt calculation often used in the more advanced features in the inverters In recent years, the module portion of the industry, said Ed Heacox, vice president that lead to reductions in overall PV system PV market has experienced rapid cost of Advanced Energy Renewables. prices,” said Bates Marshall, senior manager decline as a result of the fl ood of develop- Many factors determine LCOE, of strategic marketing for SMA America. ment in Asia. Panel costs are approxi- including performance, system costs and mately half of what they were just a few ongoing operations and maintenance. An Advanced Energy years ago – now pushing $1.25/watt, with Inverter effi ciency, reliability and perfor- PV Powered 100-kW predictions that the $1/watt mark may be mance directly impact energy output, stainless steel inverter breached in 2012. Heacox said. “Ensuring the inverters and is installed at a 787-kW Th e solar inverter market has his- all PV site equipment remain opera- facility at the U.S. Navy torically represented about 8 percent of tional through fi rst-rate O&M aff ects the Pacifi c Missile Range the overall cost of a solar installation. amount of energy produced and the long- Facility (PMRF) in Kekaha, However, it will be diffi cult for inverter term return on capital investment.” Hawaii. Photo courtesy of costs to follow the same downward trend Advanced Energy. that module costs have experienced because of the “advanced engineering required to design and manufacture the power electronics” in inverters, said Louis

Lalonde, vice president of worldwide marketing for Enecsys. In fact, inverter-specifi c costs are projected to increase as the PV industry experiences a shift away from measuring cost-per-watt to measuring levelized NORTH AMERICA costs of energy (LCOE), said Charles Dauber, CEO of American Electric Technologies. LCOE analysis considers costs distributed over the project lifetime, measured in cents/kWh of energy produced. Th is provides a more accurate long-term fi nancial picture that system operators prefer over the simple cost- RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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44 Solar

Reliability Advancements To solve issues on the integration level, In the past, inverters have been plagued some manufacturers, like SMA America with reliability issues. Since the inverter and American Electric Technologies, have is essentially a computer placed in a loca- released “factory integrated” inverters. In A production line tion that is typically hot, instability has the past, EPCs have bought, designed and at SMA America’s been inherent. In the past, as the percent installed the inverter, transformer and facility in Niestetal, of PV penetration has increased, unreli- switchgear all separately. Now manu- Germany, where a ability of the inverter has increased. But facturers are producing inverters that new circuit board new inverters are being programmed for integrate and connect all three pieces. is produced every low-voltage ride-through, reactive power Marshall said the inverter is shipped on 30 seconds. controls and other features with the a truck to the plant site, pre-wired and Photo courtesy capability to maintain a consistent supply ready to run. “You eliminate the expen- of SMA America. of solar power to the grid. sive fi eld labor and improve quality,” he said. “Instead of integrating the inverter in the hot New Mexico sun, you’re doing it in a factory.” Charles Dauber of American Electric Technologies said the factory-integrated inverter method also saves on costs — somewhere between $70,000 and $125,000 per inverter. While it is the ally of the entire PV process, the sun has in the past been the enemy to the inverter. Since most com- puters are not constructed to sit under the sun’s beams all day, some companies have previously met the challenge by building protective stations around the inverter. But thanks to cooling technologies, modern inverters no longer need to have their own stations — they can be placed on steel platforms. Some inverter companies, like Advanced Energy, are producing a varia- tion of this concept — what’s known as “outdoor ready” inverters. Th e inverter is placed inside a steel enclosure that guarantees a 20-year lifetime, said Heacox. Th is helps improve the inverter lifetime, which was previously about 10 years. Another method many manufacturers

have introduced to increase reliability is liquid cooling. “Blowing air on a hot computer is not going to work — you have to incorporate liquid cooling,” said Dauber. Cooling technology also removes the cost of building a station and the NORTH AMERICA expense of cooling the station itself. Many manufacturers architect their cooling systems around the concept of tereloss — the amount of power lost in order to run the system. Th is means that the cooling technology is designed to allow the least amount of tereloss possible, resulting in a more cost-eff ective process. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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Solar

Your Solar Mount Solution Trends A 100-kW Enphase Energy Inverter trends for the commercial and inverter at work at a PV plant Original design utility space include advancements in in Phoenix, Ariz. The system size consolidation, voltage increases and was installed by LE Solar Economical smart features, said Lior Handelsman, Energy in 2010. Photo courtesy Corrosion-resistant aluminum and vice president of product strategy and of Enphase Energy. stainless steel business development for SolarEdge Technologies. such as transformers, reactors and Made in USA Terms like “microinverter” and “mini inductors. Th ese components are built inverter” have been fl oating around for from commodity metal materials such Low profile residential and commercial-scale solar as copper wire and ferrite/steel cores. Customized to project for a while. Distributed power conver- Little opportunity exists for signifi cant sion solutions such as module dedicated cost reduction in PV inverters unless Low point loading microinverters can be attractive in resi- the amount of these materials can be dential applications with partial shading substantially reduced, Buncschuh said. 10 year warranty issues, but commercial and utility-scale However, some hope exists, as IPC cur- Ballasted systems continue to depend on large cen- rent-modulation topology has reduced tral inverters due to lower costs. Instead the weight of magnetic components by Fast assembly of central inverters getting smaller, some more than 90 percent, he said. have actually increased in size in an eff ort Utility-scale inverters are also increas- Sealed wind letter to improve effi ciency, said Bundschuh of ing in size due to voltage issues. Th e Ideal Power Converters. market is experiencing a shift away from Call today for a free quote “Inverters are becoming bigger and the traditional 600-volt toward 1000-volt, bigger in order to utilize the economy of said Laurent Bataille, senior vice president scale,” Handelsman said. for the renewable energies business at SolsceMounngSystem Th e size, weight and cost of PV invert- Schneider Electric. “Th erefore, inverters are ers are limited by magnetic components increasing in size, using multiple inverters c/oAdvancedSolarProducts as building blocks for larger systems.” 9087515818 Dauber said one of the benefi ts of “Inverters are moving toward the 1000-volt design is a 270SouthMainStreet,Suite203 becoming bigger signifi cant cost savings on cabling and Flemington,NJ08822 the prevention of loses that typically and bigger in occur with the 600-volt level of architecture. Th is occurs as a result of more order to utilize the panels per string, Dauber said. “Effi ciency economy of scale” goes up; costs go down.” Th e higher the DC voltage, the higher – Lior Handelsman $/kW gain, Handelsman said. Some

Solar 47

LCOE vs. Cost per watt LCOE: Cost per kWh Cost per watt A precise method for determining the net present cost of A simple calculation that estimates the value of your production for a specifi c PV installation, or, expressed in investment at the time of purchase: terms of key fi nancial aspects:

LCOE (cents/kWh) = $/W=

Lifetime expense for capital + fi nancing Total installation expenses + installation + O&M + miscellaneous ______Peak power rating Lifetime energy production

Advantage Advantage Encompasses cumulative system costs and total Quick, simple math for budgeting solar PV projects. energy production over the system lifetime, levelized to compare with prevailing electricity rates in cents/kWh. Limitations Provides no comparison to grid parity and completely Limitations ignores critical factors like effi ciency, uptime, system Can entail complex analysis; however, online calculators architecture and lifetime optimization. now make LCOE calculations straightforward.

Source: Advanced Energy Industries, Inc.

regulations are changing to even allow for a prototype of a 50-kW inverter. Th e power electronics of the same rating. 1500-volt systems, he said. inverter is the size of a microwave oven Funding for the prototype was provided In an eff ort to further voltage- and can be used for PV projects, a small from the California Energy Commission. related inverter advancements, the wind turbine, a battery charger, a fuel cell In addition to voltage advancements, U.S. Department of Energy’s National or a fl ywheel. When the inverter is pro- inverters are also becoming smarter. Renewable Energy Laboratory has duced in volume, the price is expected to In the past, inverters have been viewed partnered with Semikron to develop be one-third the cost of other integrated simply as conversion units. Now inverters

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48 Solar

are being built with features such as reactive power, smart grid for 80 percent of the EMEA market in Solectria Renewables’ interaction and energy storage. “Utilities, especially in Europe, 2015, according to IMS Research. utility-scale inverters are increasingly pushing for inverters to assist in grid stabiliza- While the push for “smart” invert- installed at Seabrook tion,” said Tom Haddon, a PV research analyst at IMS Research. ers may be the strongest in Europe, Farms in New Jersey. Because of this push, smart inverters are expected to account North American inverter manufacturers Installer: DCO Energy. are also innovating smarter systems. Credit: Solectria “Th ere is an evolution happening in Renewables & DCO what we call utility interactive con- Energy trol,” said Heacox of Advanced Energy Renewables. Th ese controls are essentially interactive controls that allow the inverter to interact with the grid in a stable way, Heacox said. In the past, inverters were expected to detach from the grid if zero-, low- or high-voltage situations occurred. Now new smarter inverters, however, can ride through an AC grid disturbance of CUSTOM SOLAR EXTRUSIONS any kind, at least for a short period of time, Heacox said. Aside from voltage T hrough it’s aluminum division, AFCO ride-through, other smart features supplies aluminum extrusions and fabricated include power factor control (PFC), dynamic power control components to some of the most recognized (DPC), module-level optimization, module-level safety, anti- theft and monitoring. names in solar products. A vertically “By adjusting anti-islanding requirements to allow the integrated producer, AFCO enjoys a reputation inverter to stabilize the grid during brownouts and blackouts, for innovative design and utilizes the latest rather than disconnecting, the PV system will become a more technology for precision fabrication of valuable generation asset to the utility,” said H. Clinton Porter, NORTH AMERICA aluminum parts. Technology alone does not director of marketing for KACO New Energy. provide the services that AFCO customers Inverters are experiencing more innovation than any other have come to expect; AFCO is an employee- part of the PV chain. Hundreds of inverter companies have owned company whose strength is in its entered the market over the last three years, hoping to evolve a technology into something that will make the overall PV pro- dedicated people. cess more streamlined and less expensive. In the end, when the www.afco-ind.com 800 551-6576 backbone of the PV system — the inverter — is bolstered, the entire process of creating solar energy will be strengthened. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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50 Geothermal Geothermal Industry Continues To Struggle for Acceptance

Back in March, the geothermal industry predicted Geophysics 3D Inversion that many projects would come online by the end Illustration. of the year. Now, it’s fall and so far there are none. Image courtesy of the Dewhurst Here’s an update on geothermal activities across Group. North America.

Marc Favreau, Contributor

Last March, RenewableEnergyWorld.com reported on the 2011 version of the annual U.S. Geothermal Power Production and Development Report that was released by the Geothermal Energy Association (GEA). Th e tone was decidedly optimistic, with high expectations swirling around a forecasted wave of investment from

private as well as government sources. Now, six months later, we revisit the report to see how the industry fared. On the plus side, the industry “remains on track to add 700 megawatts (MW) of to a recent Environmental Protection 71 wells. Ormat Technologies will develop capacity by 2013,” said GEA Executive Agency’s announcement of receipt of fi nal one plant in this project with Gradient NORTH AMERICA Director Karl Gawell. He noted that the Environmental Impact Statements (EIS) Resources handling the other four. industry has 27 projects in phases III (drill- on a series of projects as proof that the Ormat, as a public company, is more ing) and IV (construction). industry is indeed moving forward. Th ese open about its ongoing work. It alone has Even though in many cases proj- EIS approvals are for projects that will be 124 to 129 MW under construction in the ects move forward in secret in order built at Salt Wells, Nev. Th e plans are for U.S., not including Salt Wells, and two more to keep ‘spoilers’ from tying up sur- fi ve geothermal power plants ranging from projects of up to 45 MW under develop- rounding properties, Gawell pointed 30 to 60 MW each that will be driven by ment elsewhere. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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52 Geothermal

Th e March progress report also Th e lack of private capital echoed Warren Dewhurst, founder of the anticipated “renewed capital investment.” throughout our investigation. A number of Dewhurst Group, a pure-play geophysical Gawell said that the GEA had “started respondents, including Gawell, noted that services company catering exclusively to to see money loosening the fi rst of the the large incubation periods for geothermal the geothermal industry, explained that year, but this has since contracted” with projects — fi ve to seven years — means the these critical fi rst steps are not being taken. the lack of economic growth. However, fi rst steps for a project come with the highest “Th e money is not fl owing for explora- he added that projects already going risk. Th us, the geothermal company itself tion and needs encouragement,” he said. forward do have the necessary funding must often fund the exploration work that is He added that EPA funds are targeting lined up. needed to prove a geothermal resource. Enhanced Geothermal Systems (EGS) and other research and development, and the DOE’s loan guarantees are going to power plant construction and operation, leaving exploration high and dry. From Dewhurst’s perspective, there has not been an uptick in exploration work in the U.S. He said his company has one job pending in Colorado, but most of the exploration activity is in South America, Indonesia and Africa. Bill Rickard of Geothermal Resource Group Inc. said his company, which does geothermal energy exploration, on site drilling management and development planning, has seen additional engineering (drilling) work but had also not seen an increase in exploration. Rickard said banks are demanding “budgets be increased by 25 percent to take higher risks into account.” Perhaps this is the price the industry must pay for having painted overly rosy pictures in years past. One company that isn’t having diffi culties fi nding funds is Gradient Resources. Th is past April, Montgomery Street Financial (MSF) announced that it had arranged a $13 million secured loan for the geothermal fi rm to continue development of its three geothermal projects: Patua, Salt Wells and Fallon, all in Nevada. Since 2007, MSF has raised over $225 million of debt and equity for Gradient Resources.

When asked why his company has been so successful in funding Gradient, MSF’s CEO Richard Rogers said Gradient has three things going for it: 1) they have the richest property (resource) position; 2) they have a very qualifi ed management team; NORTH AMERICA and 3) they have committed private equity sources in hand. Hannon Armstrong’s Senior VP of Project Finance Brian J. Harenza echoed this, saying geothermal companies “need to be in good geothermal areas, have verifi ed their ______resource, contracted to sell the power to a credit-worthy off -taker, and have a construc- RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Geothermal 53

25 years ago it took gas leasees to produce geothermal power. didn’t want to be quoted) wanted to 2 ½ years to get a Th en there is what will no doubt be be clear that they are not “down on the project done. Now ongoing budget wrangling on Capitol industry.” He and the others interviewed it takes 5 to 7 years. Hill. Gawell said, “No one feels safe. Th e continue to see great potential in the current tax credits may be on the table [to geothermal energy and bemoan the There is no fast track.” be cut] in the fall.” Washington D.C. law lack of support from policymakers and fi rm Van Ness Feldman, which counsels geothermal’s lack of visibility in front of tion plan that is fi nanceable,” saying in eff ect geothermal companies among others, the general public. that the money will fl ow once the resource actually sent a letter encouraging “all of As Gawell said, “regardless of the debt risk has been eliminated. Th e company is our clients and friends to identify now limit deal, energy and environmental issues funding the Hudson Ranch project in the both the current federal programs as well remain.” All 50 states broke heat records in Salton Sea area, which fi ts all the criteria. as the current tax provisions that benefi t July, which points both to possible environ- Addressing the industry’s continuing their businesses, quantify the importance mental connections and to the continued diffi culties fi nding backing, he said, “25 of these provisions to your businesses and growing need for energy in the U.S. years ago it took 2 ½ years to get a project contact us about developing a strategy to Th e country’s geothermal industry done. Now it takes 5 to 7 years. Th ere is no protect these provisions or fi nd alterna- remains poised to help. fast track.” Th is is an issue that was raised tives to these provisions.” by everyone we spoke to, and may have the MSF’s Rogers said the tax credits barely Marc Favreau is a freelance journalist based beginnings of a solution on the way in the provide any help as it is. “Japan” he notes, in Connecticut. He has served as a reporter form of two bills pending in Washington. “passed a feed-in tariff shortly after the or editor on technology subjects ranging One would cut the permitting process for tsunami to encourage geothermal.” He from energy and electronic materials to food geothermal exploration on federal land feels the U.S. should do the same. ingredients and biotechnology for over 15 when the developer already owns a lease Despite what may sound like negativ- years. Most recently he founded and edited and the second would allow federal oil and ity, Rogers and other respondents (who The Geothermal Digest.

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These supports are designed to be installed using only NORTH AMERICA simple tools and all hardware is Compact gearbox design, powerful motors and RoHS compliant so the entire easy mounting characterize our tracking systems. system qualiﬁes for LEED points. HANNING solar controls can monitor and control up More info: www.legrand.us/deltastrut www.legrand.us/cablofil Phone 800-658-4641 to eight tracking systems. Please get in touch with us Visit us at SPI 2011 - Booths 6500 and 417-OD 618-566-3230 and count on efficiency and reliability! Fax 618-566-3250 8319 State Route 4 HANNING ELEKTRO-WERKE GmbH & Co. KG · Holter Straße 90 Mascoutah, IL 62258 USA D-33813 Oerlinghausen · Tel +49 (5202) 707-0 · Fax +49 (5202) 707-301 [email protected] · www.hanning-hew.com/solar RENEWABLE ENERGY WORLD ENERGY RENEWABLE

54 Solar What Can We Expect

for the Solar Project Industry experts from Chadbourne and Park, Borrego Finance Market? Solar and East West Meg Cichon, Bank discuss the Associate Editor perils and pitfalls of solar project fi nance.

Solar enthusiasm is more abundant than ever before but competition for fi nancing is fi erce. Th ere are now close to 30 GW of solar projects in the pipeline and three times more tax equity demand than Eli Katz, Law Partner, money available, leaving many wondering Chadbourne and Park what will happen to projects that are struggling to receive fi nancing. With an uncertain incentive climate, what can we expect in the near future? How many of these proposed projects can realistically be fi nanced? What makes one project more attractive than the rest? To answer these questions, three leading solar experts took part in a project fi nance roundtable at Intersolar North America 2011. An edited transcript follows. Roundtable participants included Eli Katz, Law Partner at Chadbourne and Park, Bill Bill Bush, CFO, Bush, CFO at Borrego Solar, and Hank Lee, Borrego Solar VP at East West Bank.

Q. What attracts investors to a new project? What do you usually look for? Katz: A number of things, one is proven technology — the type of solar panels that have worked before. Second, a development team that has executed NORTH AMERICA before. Th ird is probably the strength of returns: Is this a good investment, something we can make money on? How do we feel about the geographical region and the incentive system that is in place? Hank Lee, VP, East Bush: A lot of those are right and the West Bank biggest factor we run into is the credit quality for the off -take host. We have to RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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56 Solar The less consider if there is a REC market involved. Lee: From a tech standpoint we are competition there What is going on in that particular area? agnostic. Whether it is between diff erent Who is going to pay the bills? Th e bank manufacturers and tech, ultimately what is, the higher the takes a good hard look at those things. Th e drives a project is the credit of the off -take higher tier developers are established and and the contracts behind it. Th e third cri- prices are — even tend to only work with top tier manufac- teria is then the technology. Depending on in a market where turers, so they are much less of an issue for what is involved in a particular project and investors. how much risk there is, whether it is more prices have been Lee: Certainly the projects that this project fi nance risk or service risk, every- space off ers are credits that we would like thing gets calculated into the credit deci- declining as much to bank by themselves. We are attracted to sion. But from the projects I’ve seen come as they have. strong credits, customers and off -takes that across my desk, the majority are silicon PV, we would like to be a new customer for and to a lesser degree, thin fi lm. And quite – Bill Bush East West. And the territory that Borrego frankly, I haven’t seen any CSP projects. covers seems to be a nice footprint and Bush: I think CSP tends to be the attractive opportunity for us. larger utility-scale projects. Th ere are two issues with those: the amount fi nanced is away, and we don’t expect it to be extended, Q. There seems to be a race signifi cantly larger and the development the grandfathering that Eli mentioned is between photovoltaic (PV) and con- cycle is much longer. So I think when you probably going to happen, but the rules centrated solar power (CSP). Which add technology that hasn’t been function- haven’t been fi nalized yet. Ultimately it will of these technologies do you think is ing on a high level for very long in the favor large developers and large balance most attractive for investment? marketplace, the time period from design sheets. Th is will lead to projects that die Katz: I think most investors will tell to operation in the ground is strung out. on the vine, or smaller developers will you that PV is more proven right now. I Katz: I think the answer is: we don’t sell out to larger developers. Given the think the larger utility-scale projects may know yet. I read somewhere that 100 years relatively immature level of the industry be CSP. I don’t think we know yet. My guess ago there were hundreds of car manufac- so far, I don’t think it’s a good thing to have would be that PV ends up winning. turers in the U.S., which then consolidated concentration at the development level — Bush: It’s ultimately about getting down to fi ve or six. I suspect we’ll see that you want to have more competition. Th e fi nancing in place. And CSP, while not bad, in the next fi ve years in the solar space. less competition there is, the higher the isn’t proven on a large scale yet — and prices are — even in a market where prices that is the bigger problem with getting a Q. The 1603 cash grant is set to expire have been declining as much as they have. project started. at the end of this year. How do you I think ultimately it will be a bad thing think this will affect the solar industry? but who knows what will happen? We all Katz: Badly, I think. Not just subsi- thought it would go away last year and that dies for renewable energy in general. It didn’t happen. has been boom-bust since the early ’90s. Lee: I see the expiration of the grant Some people think Congress does that having a cooling eff ect on the market- on purpose just to get us to a milestone place. Getting fi nancing is the critical and then pull away the incentive. Th e nice component for successfully completing a thing about this 1603 program is that even project. If the grant goes away, it will limit I think most though it expires at the end of this year, the amount of capital in the market and

any project that started construction can make it more expensive for participants investors will grandfather in. Even if it does go away, you to get their deals done. And given all the will still have half to three quarters of 2012 bickering in D.C. right now, I don’t see the tell you that PV with people still working on 1603 projects. grant being extended past this year. It will is more proven We may see a little lag until it badly aff ects be a more diffi cult environment for manu- the industry. But this might be the silver facturers, developers and investors to NORTH AMERICA right now. lining: If people see that these boom-bust continue the pace of transactions we have cycles don’t work maybe it will make developed. It would be a shame to see all – Eli Katz people enact a long-term subsidy. that hard work cooled down to a place Bush: Any time there is uncertainty, where we struggle to fi gure out how we that’s bad. Th e 1603 grant has been a really get these transactions done and funded. good widget from the government, not Th e full transcript and a video of this just solar, but manufacturing and other roundtable discussion is available at industries as well. I think when that goes RenewableEnergyWorld.com. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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58 Biomass

The Biomass Carbon Debate: Manomet says the goal of its study was to assess the immediate carbon impact of switching from fossil fuels to woody biomass.

John S. Gunn, Manomet Center for Conservation Sciences

1900 1910 1920 1930 1940 1950 1960 1970 198

In June 2010, the Manomet Center produce more GHG emissions than out switching to woody biomass energy. for Conservation Sciences released burning fossil fuels to generate the same Prior growth of the forest is irrelevant the results of a study on burning woody amount of energy. Th is is due to the low to the policy question, unless the forest biomass for energy in Massachusetts. embedded energy of wood relative to fos- was grown intentionally for the purpose Since then, several critiques have sil fuels — for the energy technologies we of being used for biomass energy, and appeared, including one recently evaluated, wood releases more GHGs per wouldn’t have been grown otherwise. published in the July/August 2011 issue unit of usable energy. However, as forests Th at was not the case with the proposed of Renewable Energy World North grow back, this carbon “debt” is reduced Massachusetts biomass feedstock. America by William Strauss). and eventually replaced with a carbon Forests are dynamic systems con-

Th e Commonwealth of Massachusetts “dividend” (relative to fossil fuels). Th e stantly emitting and absorbing CO2 as asked Manomet and our partners to length of time to pay off the debt can vary a result of natural and human factors. quantify the impacts — positive and from a decade to a century, depending on Th e emissions profi le of a given forest negative — on greenhouse gas emis- an array of factors outlined in our study. can change over time and the decisions and forest health if Massachusetts Our study has been controversial sion to establish a new biomass energy switched some proportion of energy because it challenged the conventional facility will alter the emissions profi le production from fossil fuels to wood. For wisdom that burning wood is instan- of a forest. Th at change is the point of greenhouse gas (GHG) emissions, the taneously carbon neutral. Two argu- interest in accounting for the impacts

policy-relevant question was: What will ments are generally made for carbon of a switch from fossil fuel energy to the atmosphere “see” if Massachusetts neutrality. First, there is the assumption switched from fossil fuels to biomass that carbon is immediately seques- energy? Th e timing of the emissions tered somewhere else on the forested mattered because Massachusetts had set landscape. Th e second argument was a goal of reducing greenhouse gas emis- made by Strauss in the previous issue NORTH AMERICA Forests are sions by 10-20 percent from 1990 levels of this magazine. In that article, Strauss dynamic systems by 2020 and 90 percent by 2050. Th e state claimed that Manomet’s debt-then-divi- wanted to promote renewable energy dend model ignores growth of the forest constantly emitting technologies that could help meet that before the biomass harvest takes place. and absorbing time-specifi c goal. Both arguments fail to acknowledge that CO as a result of Th e study found that, initially, switch- what is important to climate policy is 2 ing to the combustion of forest biomass understanding the diff erence in future natural and human to generate electricity or heat would atmospheric GHG levels, with and with- factors. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Biomass 59

When To Start Counting?

80 1990 2000 2010 2020 2030 2040 2050 2060

bioenergy. Contrary to what Strauss fuel being displaced must be known. Th e the near term (e.g., next 10-20 years), argued, the growth of the forest before emissions from wood relative to fossil switching to wood might not be desir- the switch to biomass is the same in both fuels therefore depend on the embedded able. For those who view climate change scenarios and therefore is not relevant energy of the fossil fuel being displaced. as a longer-term (20-100 years) problem, to determining future GHG emissions. Management of the forests: Th e then switching to wood energy may be Furthermore, our evaluation did account change in forest carbon stocks under a good option. Th e study team did not for sequestration occurring elsewhere the biomass energy scenario must be make such a determination because that on the landscape. In our Massachusetts compared to forest carbon stocks in depends on one’s own assessment of study, this landscape-level sequestration the absence of the proposed biomass climate change risk. was not suffi cient to overcome the short- scenario. How the forest is managed Manomet continues to invite careful term carbon debt. matters to the carbon recovery period. scrutiny of our study. It is crucial that we In our framework, there are four Our framework does not ignore the thoroughly understand these topics in elements to calculating the GHG impacts existence of the biogenic carbon cycle. We order to develop smart and sustainable of switching from fossil fuels to forest are simply refl ecting the common sense energy and climate policy. Th e science biomass energy: insight that decreases in forest carbon needs to be accurate, especially when Biomass feedstock source: Carbon stocks resulting from the harvest of bio- society must make diffi cult decisions. dynamics of the feedstock source will mass can result in a greater share of earth’s It is also important to have civil and

vary depending upon whether live biogenic carbon ending up in the atmo- productive conversations that allow accu- trees are being used or whether harvest sphere instead of staying in the forest. rate science to become eff ective policy. residue (i.e., tree tops and limbs) is used. With respect to “what the atmosphere Massachusetts set a goal for greenhouse Th e carbon debt for using live trees takes will see,” we maintain that we got the gas emissions. Our study accurately much longer to “pay back.” GHG accounting correct. It was a simple explained the short and long-term GHG Form of energy generated: Th e math problem, not a value statement implications of switching to biomass NORTH AMERICA lifecycle emissions per unit of energy about the many important attributes of energy in Massachusetts. One might argue for the biomass energy technology of managed forests. about validity of the goal, but we believe concern must be known. For wood, In our study we drew no conclusions we got the science right. combined heat and power generation about whether biomass energy was right has a shorter carbon debt period than or wrong. In fact, diff erent people can John Gunn is an ecologist and a Senior electricity generation. have legitimately diff erent interpreta- Program Leader at the Manomet Center Fossil fuel displaced: Th e lifecycle tions. For those who feel compelled for Conservation Sciences based in emissions per unit of energy for the fossil to reduce GHG emissions urgently in Brunswick, Maine. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

60 Wind Energy Storage Industry To Integrate Wind, Solar

Robert Crowe, Energy storage has long been touted as the silver bullet needed Contributor for widespread renewable energy adoption, but high costs have remained a sticking point to full-scale implementation. Today, several demonstration projects are proving that energy storage holds increasing promise.

NORTH AMERICA RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Wind 61

plants being built all over the country,” growth. With passage of Assembly Bill No. said Brad Roberts, executive director of the 2514 in September, California began the Grows Electricity Storage Association (ESA). process of developing a portfolio standard As more renewable energy hits the grid, for energy storage. Grid-scale energy storage is gaining generators and independent system opera- Storage technology pulled in $150.3 mil- momentum as batteries, fl ywheels tors are looking to new storage systems to lion in venture capital during the second and compressed air systems begin proving provide emissions-free backup and regula- quarter, according to Ernst & Young. they can regulate frequency and ancillary tion when intermittency interrupts solar Newton, Mass.-based General Compression services with the same effi ciency of and wind power. received the largest percentage, with $54.5 “spinning reserves” from fossil fuel-fi red “We are interested in the potential of million. Th e company plans to use General power plants. battery storage to be a game-changer in Compression Advanced Energy Storage “We still hear people say storage isn’t our industry in both regulated utilities (GCAES), a unique heat transfer technol- ready for primetime, but that isn’t the case and commercial businesses,” said Greg ogy, to compress air in underground because we already have 20-MW storage Efthimiou, spokesman for Duke Energy, caverns. Investors include ConocoPhillips, which operates more than 1,000 MW of US Renewables Group, Duke Energy and wind farms. Serious Change L.P. Duke Energy is installing the country’s Compressing air underground has the largest battery storage system, a 36-MW potential for storage in excess of 100 MW unit, near its 153-MW Notrees Windpower but there are only two such projects in the Project. Th e system will regulate frequency world: A 290-MW facility built in Huntorf, and store excess energy for use during peak Germany in 1978, and a 110-MW facility demand. In Texas, where nearly 11,000 completed in 1991 in McIntosh, Ala. And MW of generation comes from wind farms, in July Iowa offi cials and the DOE scrapped grid operator Electric Reliability Council of the Iowa Stored Energy Park, a facility Texas relies on standby gas turbines and intended to store up to 270 MW of wind steam coal generators to ramp frequency energy in a limestone cavern 3,000 feet up or down as wind generation changes. underground. Studies showed limitations Th e Notrees battery system is funded with air permeability in the site’s geology. by a $22 million grant from the U.S. Department of Energy (DOE) and match- CAES Winners, Losers ing funds from Duke Energy, which will use Compressed Air Energy Storage (CAES) Austin-based Xtreme Power’s proprietary utilizing man-made, above-ground storage dry cell technology. tanks has also gained traction with DOE funding. Startup SustainX is working with Investment, Policy Gains AES Energy Storage to demonstrate a ESA’s Roberts said the $158 million in one-hour, 4-MW system. SustainX, founded stimulus earmarked by the DOE for stor- in 2007 by engineers at the Th ayer School age research generated $780 million in of Engineering at Dartmouth College, investments for battery, compressed air, received a $5.39 million DOE grant. fl ywheels and other systems. Th e Arizona Research Institute for Th e storage industry has been calling Solar Energy (azRISE) at the University

for creation of an ITC to further stimulate of Arizona has been developing a CAES solution for three years. DOE funds will enable azRISE to scale up a 10-kW proof-of- concept prototype that will be grid-tied to A rendering of a 1.6-MW solar power plant. how A123 Systems Solon Corp., the solar plant’s developer, NORTH AMERICA Nanophosphate is working with azRISE and Tucson Electric battery systems can Power (TEP) to demonstrate a variety of be used for energy storage projects, including lithium ion storage at wind batteries. farms. Photo courtesy “As we see more integration of solar, A123 Systems. we want to control storage for our utility customers,” said Bill Richardson, Solon’s director of research and development. “Th e RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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Wind 63

ultimate goal is to make renewable energy plants look like traditional plants with dispatchable energy.” Joseph Simmons, azRISE director, said storage prices are high, particularly for battery systems, but he predicts a breakthrough will come with “intermediate size” compressed air systems that use off -the-shelf storage containers and have capacities of up to 100 kW. Th e institute’s concept, he said, can be scaled up to 10 MW with a coiled natural gas pipeline buried underground. “I like batteries but they are very expensive,” Simmons said. “We expect to see more of a combination of batteries and compressed air storage.” Heat transfer is another issue associated “Storage will have to be below $200 per The A123 Systems Smart with CAES since air cools when it expands kilowatt if we’re going to be major players Grid Stabilization Systems and warms during compression. in the long-term storage fi rming in renew- at AES Gener’s Los Andes Th e azRISE system removes heat from ables without government subsidy,” he said. substation in Chile. Courtesy a compressor then stores it in fl uid. Th e Pumped-hydro, which accounts for 20 A123 Systems. system recovers electricity when heat GW of the country’s energy storage, can returns to the compressed air before enter- provide 1,000-MW storage systems for $100 ing an expander. SustainX manages heat by per kilowatt-hour, according to Th e New using an isothermal system to cycle air in York Times. It requires massive reservoirs hydraulic cylinders. that cost more than $1 billion and take years to construct with ideal geography Price Points Still High In just three years, the storage industry Understanding The approximate cost of a Joseph Simmons, director has grown rapidly from a handful of proto- 1-MW, 6-hour sodium-sulfur of Arizona Research types to revenue-generating corporations, Energy (NaS) battery is $3,000 per Institute for Solar Energy Roberts said. Current battery technology Storage Costs kW. That translates to a cost (azRISE), estimates a 10-kW has a long way to go before renewable of $500 per kWh ($3,000/ 6 compressed air storage Energy storage systems are hours = $500), Roberts said. system with a $50,000 price energy can be stored and dispatched in typically quantifi ed in terms Xtreme Power Chief tag can generate 30 kilowatt- meaningful amounts. Meanwhile, revenue of capacity (kilowatts or kW) hours, or three hours of is limited to ancillary services, critical and generation (kilowatt- Development Offi cer Darrell Hayslip said battery costs are electricity at a cost of about observers say. And then there’s the price: hours or kWh), but there are 33 cents per kilowatt-hour. some exceptions. expressed in dollars per kWh At $43.6 million, the 36-MW Notrees when considered “stored Calculations for the system costs $1,211 per kilowatt. Others “In the case of energy energy.” Xtreme Power often University of Arizona system storage costing, dollars are down to $400. quotes prices in terms of call for use of a 1,000-gallon per kilowatt-hour can be dollars-per-kilowatt because storage tank. He said the

“But the price is still way too high for very misleading,” said Brad it markets its dry cell system could be scaled up to this market,” said Donald R. Sadoway, Roberts, executive director products as a “generating 10 MW using coiled pipeline Professor of Materials Chemistry at MIT. of the Energy Storage or supply resource,” Hayslip to create 1 million gallons of Th e leading battery systems are based Association. said. storage space. Such a system on lithium ion or sulfur-sodium (NaS) Battery storage is growing Xtreme Power’s 36-MW would generate 30 MWh, but power cells. A multiple-megawatt stor- rapidly, but costs remain high, Notrees project is funded the price is unknown at this NORTH AMERICA so the industry is striving by about $22 million from a point, he said. – RC age system using these technologies can for average prices to get far require thousands of cells. U.S. Department of Energy below $500 per kWh within grant and about $22 million Sadoway co-founded Liquid Metal three years. in matching funds from Duke Battery Corp., a startup that uses pizza “Technologies like lithium Energy, which Hayslip said box-sized power cells made with liquid ion need to see huge price brings the cost to $1,211 metal and molten salt. Sadoway is banking declines in the next few per kW ($43.6 million/36,000 years, which may be possible on his batteries to provide game-changing, kilowatts = $1,200). as electric transportation cost-eff ective power storage capacity. grows,” Roberts said. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

64 Wind

and abundant water resources. Th at pretty Zahurancik said. Large-scale battery stor- China Calls on A123 much rules out the arid Southwest, so age is still years away, so revenue streams to Help Smooth researchers like Simmons and Sadoway are limited to ancillary services, which Wind Power look to alternatives. (For a primer on represent a small piece of all sales on the China’s third-largest wind turbine Energy Storage Costs, see Sidebar: electricity market. Th e ESA and American manufacturer is evaluating battery Understanding Energy Storage Costs.) Wind Energy Association are lobbying util- storage devices to help the country Sadoway’s company received a $6.9 ity regulators who oversee electricity sales meet its goal of adding 170 GW of wind million grant from the Advanced Research to create markets that recognize a premium power to its generation mix by 2020. Projects Agency-Energy (ARPA-E) as well for emissions-free storage and regulation. Rapid installation of wind farms has as seed money from Total, an oil company, Some systems are growing outside of been met with unique challenges to manage a signifi cant load of intermittent and Microsoft co-founder Bill Gates. ancillary services. AES is installing an A123 electricity. Nearly 30 percent of China’s Sadoway said the size of his batteries will Systems battery unit capable of providing wind farms are offl ine while the broaden grid-scale storage capacity since 20 MW of spinning reserve for 15 minutes country’s grid operators develop an more liquid will be present per cell than in Northern Chile. approach for regulating frequency. conventional cells. “We’re moving out of the lab and into Waltham, Mass.-based A123 Systems large production facilities,” said Chris recently fi lled an order to supply Lithium Ion Still Popular Campbell, vice president of marketing for Dongfang Electric Corp. (DEC) with an advanced energy storage device. The “We’re starting to see prices come down A123 Systems’ Energy Solutions Group. 500-kW lithium ion battery system will as we scale up each project,” said John He said A123 Systems European be installed at the company’s factory Zahurancik, AES Energy Storage vice customers are interested in 100-MWh to in Hangzhou City, China, by the end president. 500-MWh storage systems that will help of this year. A123 Systems said the AES Energy Storage is installing a them meet clean air goals. Zahurancik said demonstration system would help the turbine manufacturer research 32-MW lithium ion storage system to regu- battery storage devices in the next three technologies for smoothing and late the 100-MW Laurel Mountain Wind years will off er two to four hours of storage integrating wind power with the grid. Farm in West Virginia. Since it was founded that can transfer nighttime wind energy for “Part of the problem is an inability to in 2007, AES Energy Storage has completed peak use. deal with zero voltage, so drop-offs more than 32 MW of storage, and it claims “We’re already seeing our market grow are suddenly causing disruptions to to have 500 MW “in the pipeline.” like the solar and wind industries,” he said. the grid,” said Chris Campbell, vice “We are starting to demonstrate the president of marketing and business development for A123’s Energy real commercial competence of storage,” Robert Crowe is a technical writer and report- Solutions Group. Zahurancik said. er based in San Antonio, Texas. He has written A123’s system will target algorithms to Storage is attractive to generators — par- for Bloomberg, the Houston Chronicle, Boston improve ramp management, Campbell ent company AES Corp. operates 132 power Herald, StreetAuthority.com, San Antonio said. plants worldwide — because it provides Express-News, Dallas Business Journal, and The almost 30 percent of China’s wind “fuel-free” power during peak hours, other publications. power capacity that is not connected to the grid is due to unacceptable Low Voltage Ride Through (LVRT) when grid voltage declines, A123 said. The order is A123’s fi rst energy storage system in China. – RC

In the foreground is NORTH AMERICA the expansion turbine and in the background is the compressor behind the large fan. Courtesy AzRISE/University of Arizona. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

THE FUTURE OF ENERGYIS

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66 Hydro

How FERC Order 1000 Could Affect Hydro

Th e Federal Energy Regulatory ciples of Order No. 890 and produces Commission (FERC) issued Order a regional transmission plan and the No. 1000 on July 21. Th e order amends method must satisfy six regional cost FERC’s requirements for interstate allocation principles, electric transmission companies to • Local and regional transmission allocate the costs of transmission planning processes must consider planning and developments to their transmission needs driven by public customers. Th is is a big step for transmis- policy requirements that are established sion projects and planning and the eff ect by state or federal laws or regula- What are the it will have on renewable energy projects, tions or public utility transmission especially hydroelectric developments, requirements, implications of could be positive. • Transmission planning regions must FERC’s new coordinate to determine if there are What is Order 1000? more effi cient or cost-eff ective solutions ruling on interstate Th e 620-page rule aims to give public to mutual transmission needs when transmission utility transmission providers in a region a evaluating proposed solutions, and common method for allocating the costs • Participant-funding of new transmis- for hydropower of new transmission facilities. It also allows sion facilities is permitted, but is not development? them to evaluate transmission alterna- allowed as the regional or interregional

tives at the regional level that may resolve cost allocation method. the region’s needs more effi ciently or cost Th e rule also says that a non-public Sharryn Dotson, eff ectively, according to the World Alliance utility transmission provider must revise Online Editor, Power for Decentralized Energy. Similarly, two its tariff order to maintain reciprocity, or Engineering neighboring transmission-planning regions safe harbor, status. Other providers do not must have a common interregional cost have to include this. It also eliminates the NORTH AMERICA allocation method for new interregional right of fi rst refusal, which gives the project transmission facilities. holder the option to enter into a business Other stipulations of the order accord- transaction before the owner can enter into ing to FERC are: an agreement with a third party. • Each public utility transmission As a result of Order No. 1000, utilities, provider must participate in a regional independent generators, suppliers and transmission planning process that developers of renewable technologies, satisfi es the transmission planning prin- merchant transmission providers, and RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Hydro 67

end-users all have something at stake. In consistent with previous commission account all options, even non-transmis- addition, natural gas-fi red energy genera- policy and its eff orts to promote integra- sion options. “We need to ensure that tors and storage projects that can provide tion of diverse resources into the energy planned projects can be sited and their alternatives to transmission or support market and foster competition among costs fairly recovered,” he said. “Congress’ integration of intermittent renewables, may those resources.” recent attempts to promote transmis- also benefi t from the new regulations. One way the new rule helps is that now sion, such as the corridor designation and “With these new factors in play, it is transmission providers determine who backstop siting process, have generally not critical that transmission planners seek the pays for which part of the development. been successful.” most effi cient and cost-eff ective ways to “[Right now] it’s like trying to plan an meet the needs of their region,” said FERC interstate system. Often individual states Transmission Effects Chairman Jon Wellinghoff in a statement. or companies refuse to pay for the part Today, FERC can only approve intercon- “Transmission providers have in place the they perceive they don’t use,” Hoecker nections from authorized, regulated hydro foundations for eff ective planning through said. ““But all our infrastructure was generators so the new rule is a fi rst step in their Commission-approved Order No. 890 built on a share-the-cost basis, because getting new projects off the ground. But planning processes. highways and railroads and transmis- other barriers still exist such as a lack of a “However, our monitoring of the imple- sion lines ultimately serve a broad array national energy plan that would help deter- mentation of these planning processes, of benefi ciaries,” he said. “[Regional cost mine what needs to be built and where. conduct of technical conferences across allocation] is how we’ll get to a strong Further, transmission planning and the country and the numerous comments electricity system in the future.” permitting takes a long time. For example, received in this rulemaking proceeding With the aging infrastructure and Dan Prowse, transmission access offi cer indicate that there remain gaps that must increasing need for new generating sourc- with Manitoba Hydro said his com- be fi lled if the transmission system is going es to reach areas that have an increasing pany sent 12 proposals to MISO for new to effi ciently and cost-eff ectively address demand for clean energy, Hoecker said transmission projects in 2007. Th e next the trends and challenges that were just investment in transmission could be more year, those dwindled down to 6 and the appearing on the horizon when Order No. than $300 billion over the next 20 years. following year, three projects remained. 890 was issued,” Wellinghoff continued. But for that to happen, the generating Out of those three, only one, the Keeyask “It is essential that the Commission’s sources need to have policy certainty fi rst. transmission project, is scheduled to be in transmission planning and cost allocation “Today’s grid is subject to a bewilder- operation in 2019. requirements are adequate to support ing assortment of local, state, and federal WIRES’ Hoecker said current transmis- more effi cient and cost-eff ective decisions requirements. Th at kind of ineffi ciency sion developments are more competitive moving forward.” infl icts a penalty on resources such as than ever before. “Th ey can’t be operated Th e rule is expected to be eff ective hydropower,” said Hoecker. just based on economic interests,” he said. October 11, 2011, 60 days after it is pub- “Just because we recognize the need “We have to look at the grid as a whole lished in the Federal Register. doesn’t mean we will get it built,” Hoecker and try to ensure that all customers and said. “Siting is complicated, planning is industry participants are treated equally Effects on Hydro complicated and expensive and regulation and the market is competitive.” Any improvement to the transmission is tremendously uncertain. Th e order will also help alleviate bar- system and how projects are planned and “Th e order is not the entire solution, riers to bringing electricity to sparse U.S. developed will have an eff ect on hydro, said but in terms of reinforcing transmission regions from border countries. Jim Hoecker, outside counsel to the WIRES and hydro, it’s important,” Hoecker said. Manitoba Hydro’s Prowse said his Group and senior counsel and energy Hoecker said that transmission company is already transmitting about

strategist at Husch Blackwell LLP. planning must be regional and take into 3,000 MW of wind power to Minnesota “One of the biggest challenges facing the from Canada and has 200 MW of hydro in hydro industry is that hydroelectric projects development. tend to be location constrained,” Hoecker One way the While importing electricity across the said. “In some cases, they are not near new rule helps border is important, most utilities would customers or near the grid for that matter.” like to see more storage solutions like is that now NORTH AMERICA Hoecker said the new rule could make transmission pumped hydro to support the integra- it easier for diff erent types of generating tion of wind and solar. But increasing sources to connect to the grid, including providers the use of pumped storage would pumped storage and run-of-the-river hydro- determine who require signifi cant regional transmission electric projects that are often sited far from pays for which upgrades, Prowse said, and there are other consumers and connections to the grid. part of the operational and processional barriers to “I think this is very positive rulemaking,” overcome, not to mention the uncertainty Hoecker said. “Order 1000 is completely development. over a national climate change policy. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

68 Renewable Energy Developments THINKSMALLER PROJECTS THAT

Five renewable energy developments illustrate creative solutions to age-old problems.

BIG Steve Leone, Associate Editor

As renewable energy continues to Solar carve out a bigger stake in markets Th e ubiquitous utility pole stands proudly across North America, it often straddles the as an example of a necessary, yet perhaps line between new ideas and accepted unsightly, addition to the modern world. practices. While large developments push When they were going up, there may have Utility poles across the needle closer toward a path of been some groans. But, really, do we even many communities in sustainability, it’s often the projects taking notice them anymore? New Jersey now include uncharted roads that allow us to envision Petra Solar is attempting to go the way individual solar panels our energy future. Below is a look at of the utility pole in an eff ort to ingrain that create a virtual projects in the solar, wind, hydro, biomass renewable energy into neighborhoods 40-megawatt power plant. and geothermal industries that are helping across its home state of New Jersey. And Courtesy of Petra Solar to reshape how we do business. it’s doing this by jumping onto the back of those poles, quite literally. Th e fi ve-year-old solar company is

behind a 40-MW project being installed for PSE&G, the largest utility in New Jersey. Th ere are no solar farms or sprawling rooftop installations, but rather individual 220- watt modules mounted 15 feet up on utility poles across a wide swath of the state. NORTH AMERICA In all, PSE&G is installing between 180,000 and 200,000 units — one pole at a time — in the 300 towns and cities that the utility serves. Th e individual modules each feed directly into the grid, and they act as independent units. Together through Petra Solar’s software and monitoring network, they form a virtual power plant. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Renewable Energy Developments 69

If a system of the same size were needed to reinvent the institution as one The Central Massachusetts ground-mounted in a fi eld, it would take focused on renewable energy. campus of Mount Wachusett up 300 acres, and vast amounts of time and First came the biomass heating system. Community College includes two money for siting, permitting, zoning and Th en, a 100-kilowatt (kW) solar array wind turbines that provide 97 interconnection costs. was installed on the roof. Th e big change, percent of the school’s electricity. “It’s an ambitious eff ort, said Joe Deluca, though, came earlier this spring when the Courtesy Mount Wachusett Vice President of Development and Product school welcomed two wind turbines that Community College Marketing for Petra Solar. “We’re on a will power 97 percent of the school. nationwide and worldwide trek to make it Th e turbines have a capacity of 3.3 common. We believe some day it may be MW, and they’ve helped the school cut its odd to drive into a neighborhood and not electricity consumption from as high as see solar on utility poles and rooftops.” 9 million kilowatt-hours (kWh) a year to about 5 million. Future energy effi ciency

Wind gains could push consumption down to a Biomass A product of the 1970s, the building that target of 4 million kWh each year. If that On a sprawling farm in Southwestern Iowa, houses Mount Wachusett Community becomes the case, the school will then be it’s business as usual as row upon row College in Gardner, Mass., was born during producing more energy than it is consum- of corn gets processed into ethanol. But a national energy crisis. At that time, the ing. Th at could be quite a lesson – and cost there’s something diff erent going on, and desire to break from a dependence on savings – for institutions of higher learning even those at the highest ranks of agricul- NORTH AMERICA foreign oil led the school to build an all- and those who pay to go there. ture think this could be, if not the answer, electric campus. “We’re one of the few campuses in the perhaps an answer. Decades later, energy once again country, and perhaps the world, that is In its public relations battle, ethanol has became the focus of discussion at the approaching zero net energy and zero a carbon problem. It’s widely debated how Central Massachusetts campus, only this net carbon – and that’s without buying much carbon is emitted during the produc- time it was the cost as much as the source. green energy from another source,” said tion of ethanol, what is certain is that the With electricity bills approaching $800,000 Ed Terceiro, a former school offi cial who debate continues, and it’s not a good thing annually, school offi cials decided that they helped lead the wind turbine project. for the industry. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

70 Renewable Energy Developments

Above: An artist be room for a large-scale operation, the Well, what’s more predictable than the rendering shows what hope is that using algae to create biofuels sun? Th at’s not expected to go anywhere the algae-ethanol plant will then become feasible and profi table. for a few billion years. Enel Green Power will look like after Right now, the operation has moved North America just might be onto expansion. into its second phase. And it was such a big something with the company’s decision deal, that U.S. Agriculture Secretary Tom to co-locate a 24-MW PV solar farm on Right: The algae Vilsack was there to give the keynote at the a 240-acre parcel adjacent to its 60-MW reactors are currently dedication this spring. Th e best line of the Stillwater geothermal plant in Churchill housed indoors at the day came from Vilsack: “Th is is a remark- County, Nevada. Conceivably, solar could fi rst algae-ethanol plant able project … I don’t understand it totally, off set concerns about resource predictabil- located in Shenendoah, but it’s really neat to look at.” ity while contributing to a plant’s capacity. Iowa. Photos courtesy Green Plains Renewable Geothermal Energy For an industry that has seen one new The Stillwater plant come online since the end of 2009, geothermal plant in much of the diffi culty can be attributed Churchill County Nevada To fi nd a solution, Tim Burns took a to the cost associated with exploration is undergoing a facelift diff erent look at the problem. Rather than and permitting. But some of it also speaks with the addition of viewing the carbon that is emitted during to the unpredictability of a geothermal 24 MW of solar panels the ethanol refi ning process as a head- resource 20 years down the road. How in the fi rst co-located ache, he saw it as a business opportunity. can a developer promise how much geothermal-solar project Th at’s because he’s in the algae business, power will be produced decades from in the United States. and algae love to feast on carbon. So on now when negotiating a power purchase Courtesy of Enel Green Power this particular farm in Shenendoah, Iowa, agreement? North America every day is Th anksgiving, at least from the perspective of the algae. Burns leads BioProcess Algae, which

has teamed with Green Plains Renewable Energy, for the world’s fi rst co-located algae-ethanol plant. Th e carbon emitted during the fermentation process feeds the algae. For every unit of algal biomass produced, two units of CO2 are absorbed NORTH AMERICA into the growth process, which happens in giant vertical and horizontal reactors exposed to sunlight. Th e algae is dried and used to feed, not a car via biofuel, but livestock via feed. Burns is interested in making his algae-based business profi t- able, and right now that’s through creating feed. Eventually, as profi ts build, there will RENEWABLE ENERGY WORLD ENERGY RENEWABLE

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72 Renewable Energy Developments ADVERTISER’S INDEX PAGE # ADVANCED SOLAR PRODUCTS, INC. 33, 46 AFOC INDUSTRIES, INC 48 AREVA SOLAR 3 Th e solar power produced will inte- ACCORDING TO SOME ASIA SOLAREXPO 2011 57 51 grate into the existing plant, allowing it REPORTS, THE MUCH ATLAS COPCO HIGHER DENSITY OF BECHTEL 23 to produce more power, especially during CANADIAN SOLAR INC (CSIQ) 35 periods of peak energy. It also saves the WATER MEANS THAT AN CRYOSTAR 52 power producer the costs associated with AVERAGE 5 MPH FLOW EVERGLADES UNIVERSITY 25 interconnection and operation. Th is is the IN THE MISSISSIPPI FASTENER TECHNOOGY 24 fi rst such project in the United States, and WOULD BE A FORCE GCUBE INSURANCE SERVICES, INC. 49 HANNING ELECKTRO-WERKE GMBH & CO KG 53 according to company offi cials, likely the EQUIVALENT TO 130 MPH WINDS. KEMA 7 fi rst in the world. Construction is ongoing, LEGRAND CABLOFIL 53 and the company hopes to bring it online LTI REENERGY 16 by the end of the year. Th e questions will MASSACHUSETTS CLEAN ENERGY CENTER 31 now focus on how to take advantage of MCDONALD CARANO WILSON C3 11 this technological marriage beyond this where the power is needed and the grid MOOG QUICKSET NATIONAL HYDROPOWER ASSOCIATION 65 one PV addition. Will there be a natu- infrastructure already exists. SOLAR FLEXRACK 45 ral marriage between geothermal and According to some reports, the much POWER ONE 17 concentrating solar power? Will solar see higher density of water means that an POWER-GEN INTERNATIONAL 2011 71 geothermal as an answer to its intermit- average 5 mph fl ow in the Mississippi Q-CELLS SE 27 tency problem, and will geothermal turn would be a force equivalent to 130 mph REIS ROBOTICS, USA 9 RENEWABLE ENERGY WORLD 62 to solar to make it more bankable? winds. Environmental review is an CONFERENCE & EXPO NORTH AMERICA obvious consideration, and Free Flow is SANREX 18 Hydro awaiting permits at dozens of sites along SCHLETTER, INC. 47 Free Flow Power has conventional hydro the Mississippi. SCHNEIDER ELECTRIC 21 SCHUCO INTERNATIONAL 29 projects in every corner of the U.S., but the In the meantime, the company will con- SEMI PV GROUP 36A company’s most unconventional approach tinue with its test site near New Orleans, SIEMENS AG 5 lies deep below the Mississippi River. where the 40-kW capacity turbine turns SKF 75 Since June, a jet engine-like hydroki- the river’s power into energy. Th e company SOLAR POWER-GEN 55 netic turbine has been generating power has said that it wants to install about 120 SOLAR PROMOTION INTERNATIONAL GMBH 19 in what the company hopes will be a new units per turbine farm, allowing each site to SOLON AMERICA CORPORATION 43 SPIRE CORPORATION 13 wave of development. Th e company is still approach 5 MW of capacity. SUNTECH AMERICA C4 a ways away from turning this isolated SURRETTE BATTERY CO LTD 20 project into viable option for utilities. But TRINA SOLAR 41 the implications are striking. In a pilot project, an VESTAS WIND C2 While wind turbines are at the mercy underwater turbine that WESTINGHOUSE SOLAR 8 of weather patterns, underwater turbines will generate power are powered by steady river fl ows, mean- from currents has been Sales Representatives ing utilities could depend on them for placed in the Mississippi North America their predictability. Clusters of turbines River. Courtesy Free Flow could also be located close to urban areas, Power Peter Andersen 1.603.924.4405 ext 204 [email protected]

Dan Harper

1.603.924.4405 ext 211 [email protected]

Katharine Hart 1.603.924.4405 ext 218 [email protected]

NORTH AMERICA Europe/Asia

Ekow Monney 44.208.679.5945 [email protected]

Leo Wolfert 44.1992.656.600 [email protected]

Sandra Spencer 44.1992.656.664 RENEWABLE ENERGY WORLD ENERGY RENEWABLE [email protected]

RENEWABLE qM ENERGY qMqM WORLD PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDH Qmags NORTH AMERICA THE WORLD’S NEWSSTAND® RDH RDH ENERGY RENEWABLE ENERG RENE OT AMERICA NORTH NORTH WORLD WORLD W AMERICA ABLE Power Plants Consider Biomass Utilities andRegulators Trees: the and Forest the Seeing Y PreviousPage|Contents|Zoomin|out|FrontCover|SearchIssuNexPage PreviousPage|Contents|Zoomin|Zoom out|Front Cover|SearchIssue|NextPage certainty fromregulators. with gusto, more others await developing biomasspowerplants While someU.S. utilitiesare Ivan Castano, Contributor switch off switch more nationand the biomass to power anopportunitymeans toburn forutilities asmany asclean Th report. is technology agencytofi tries the three years next while sion capsforthe exempt be from emis- projectspower will suppliers power that canhelp dojust that. gain technology popularity energy asaclean to starting electricity biomass be goals, could plants they have been using foryears. have been they plants CO Th 2 emissions and meet their renewable renewable their emissions andmeet eEPA recentlybiomass thatall ruled As U.S. electric utilities continue to to U.S. continue As utilities electric wrestle howtocost-eff with some of the dirtier coal-fi dirtier of the some gure out whether the the gure outwhether Biomass ectively cut red red is q q H OL’ NEWSSTAND WORLD’S THE NEWSSTAND WORLD’S THE q q q q M M M M M M q q Qmags Qmags q q M M 73 M M RENEWABLE ENERGY WORLD NORTH AMERICA ® ® RENEWABLE qM ENERGY qMqM PreviousPage|Contents|Zoomin|Zoomout|FrontCover|SearchIssue|NextPage qMqM RDWORLD H Qmags NORTH AMERICA THE WORLD’S NEWSSTAND®

74 Biomass

Bob Cleaves, president of the U.S. laws that regulate biomass for electricity he said. “It’s premature for companies to Biomass Power Association, expects generation. make investments as it’s hard to know increasing numbers of utilities will Th e fuel switch would reduce nitro- to what degree biomass will really be begin investing in biomass facilities to gen oxides, sulfur dioxide, mercury and exempt from emission limits until the take advantage of the EPA’s exemptions. particulate emissions, and all of the power EPA does enough research to understand “Biomass is very carbon friendly and it’s plants would meet stringent new emis- the technology,” Namovicz said. clear the government is going to make it sions standards established by the U.S. “Companies are not going to want to harder and harder to use coal for energy Environmental Protection Agency. make big capital investments until there generation as it works to lower green- Th e total economic benefi t of the is more regulatory certainty,” he added. house gas emissions,” Cleaves said. He project will be more than $350 million, also expects fewer coal plants will be built including $30 million in local taxes, $180 Controversy Over as biomass becomes more economically million for the creation of more than 300 Carbon Neutrality feasible for utilities. “No one is building jobs in the state’s forestry and trucking It’s not just the EPA that is having a hard new coal plants.” industries and about $120 million paid time calculating the market’s potential Not only are plans to build new coal to the 90 employees who will work at the as a clean power-producing technol- plants being shelved but the plants overhauled stations, Dominion said. ogy. Several U.S. states are also up in themselves are ramping down. Cleaves It added the project would help arms about how much they want to explained, “[Coal plants] are being the utility meet Virginia’s voluntary support the technology. Biomass plants curtailed because of carbon emission Renewable Portfolio Standard, which calls are already in operation in California, concerns.” He said “many view them as for 15 percent of its generation to stem Michigan and Maine, thanks to tax costly facilities to operate as the govern- from renewable resources by 2025. Th e credits issued by states that are keen to ment steps up emission penalties in the company said it successfully met the 2010 diversify their power portfolios and build future.” milestone of 4 percent. their green credentials. One factor that could undermine bio- But in Massachusetts, a major debate mass’ development is natural gas, the sup- 56 Billion Kilowatt-hours is brewing over the exact environmental ply of which is quickly expanding. Natural of Biomass Generation benefi ts of biomass. Th e controversy is gas could compete with biomass as the But despite Dominion’s enthusiasm for so bitter that the state has launched new next clean-energy alternative, Cleaves biomass, some experts say other electric- rules to limit the type of projects that pointed out. He added that biomass is not ity suppliers may not be so keen to grow quality for renewable energy incentives. that easy to procure, making its produc- their biomass supply chain until the EPA tion expensive, while natural gas is more clarifi es how exactly it plans to regulate abundant and could remain a cheaper the sector. “We don’t see a sudden rush alternative well into the future. from utilities to expand their biomass Th e cost notwithstanding, some utilities generation sources,” said Chris Namovicz, are already getting ahead of the game and a biomass consultant at the U.S. Energy biomass fl eshing out their biomass resources. One Information Administration. generation from such fi rm is Dominion Virginia Power, “Rather, I think the move will be gradu- which has asked the state of Virginia for al as it takes time to bring biomass plants all operating permission to convert three aging and small online and utilities will have to establish coal-fi red plants into biomass facilities. a reliable biomass supply system.” So far, sources reached Th e coal plants are in Altavista, biomass accounts for a tiny fraction of

Hopewell and Southampton County and electricity generation in the U.S. According 56 billion have capacities of 63 MW each, but they to Namovicz, biomass generation from operate only during peak demand. When all operating sources reached 56 billion kWh last year transformed into biomass plants, capaci- kWh last year compared to 4,120 billion compared to ties will decrease to 50 MW each, but they kWh from all electricity power sources will be running all the time, Dominion said including electric utilities, independent NORTH AMERICA 4,120 billion in a statement. Th e company added the producers and industrial facilities that plants’ capacity will soar about 92 percent co-generate electricity. kWh from all over their 30-year lifespan, making them How fast biomass power plants will signifi cantly cheaper than running coal in actually grow is anyone’s guess, at least electricity the long run. According to Dominion, the until the EPA fi nishes reviewing the biomass plants will obtain most of their sector’s emission levels (and can issue power sources fuel from waste wood left from timbering an appropriate cap framework) which operations and will comply with Virginia will not happen for another three years, RENEWABLE ENERGY WORLD ENERGY RENEWABLE

Biomass 75

It has also made the emission allowances But for now, it’s a wait-and-see game Ivan Castano is a freelance journalist based for biomass installations more stringent, for the technology’s advocates, including in Miami. His work has appeared in Thomson according to Mike Camera, chairman Camera, who says the state is currently Reuters’ International Finance Review (IFR), of the Coalition for Biomass Energy for reviewing both parties’ claims before Dow Jones’ Financial News, Euromoney, Trade MASS, which is lobbying the state to enacting any new legislation. & Forfaiting Review and a range of trade pub- change the legislation. “We have no idea what the govern- lications covering the capital markets, private Th e controversy stems from a recent ment will do but we are going to continue equity, loan, credit and restructuring markets. study claiming biomass is not carbon fi ghting to see biomass receives the credit He is fully bilingual in Spanish and English hav- neutral. (For more on this issue see, “Th e it deserves,” Camera said. ing been raised in Ecuador, Colombia and Spain. Biomass Carbon Debate: When To Start Counting,” on page 58.) Since then, anti-biomass group, the Biomass Accountability Project, has been pressing the state to put a moratorium on state air permits for new biomass projects, threatening the viability of three new facilities currently under construction in Springfi eld, Russell and Greenfi eld. But Camera said biomass is carbon neutral and that the state is undermining its renewable goals and hindering the creation of thousands of new jobs. “It’s totally unfair,” Camera says. “Biomass is a clean technology and we have 2.5 million tons of it available in the state that could be used as a clean fuel. Instead, the state is exporting this amount, creating a bigger carbon footprint in the process.” Under the current rules, the Springfi eld, Russell and Greenfi eld facilities will be more expensive to build and faces delays, Camera adds. He hopes Massachusetts’ Environment Secretary will heed the coalition’s pleas and enact new regulations to allow biomass installations to fl ourish in the northeast state. But the Biomass Accountability Project

will likely continue its fi ght to see the technology scrapped. In a statement, the organization

claimed wood-burning plants create air ! pollution and are harmful to health. " # $ % “At a time when our governments are in fi nancial meltdown and health costs are skyrocketing, taxpayer money (is) in these dirty incinerators that will poison com- NORTH AMERICA munities for decades,” said Meg Sheehan, !"# $ the attorney behind the group. “Th e federal government is giving billions of our money to corporations that wrongly call biomass ‘green energy.’ ” ______If other states follow Massachusetts, the biomass sector’s domestic growth could be seriously jeopardized. RENEWABLE ENERGY WORLD ENERGY RENEWABLE

For more articles 76 Final word like this, log onto www.Renewable EnergyWorld.com

The Carbon-Constrained World: Companies Ignore At Their Own Risk

When U.S. Senator Lindsey Graham last year declared that “cap-and-trade is dead” in the wake of the failed federal climate change legislation that would have capped carbon emissions, many companies — both large and small — perhaps shelved their carbon reduction programs. Indeed, some companies might think they are now immune to carbon controls. Th is would be a mistake. Th e state of California remains committed to its ambitious cap-and-trade program, and state legislators remain positioned to fi ll the legislative vacuum left by the U.S. Senate with a state-level program that promises to set the standard for other state and regional carbon reduction protocols. The CarbonNeutral Company The CarbonNeutral

Despite years of litigation and regulatory uncertainty, California now stands just a few months away from potentially adopting the most comprehensive cap-and-trade bill this country has ever seen — including the Regional Greenhouse Gas Initiative (RGGI) now being scrutinized by state Porcaro legislatures throughout the northeastern United States. For regulated Californian businesses, the implications of this development are undeniable: Jem

By remaining competitive in a carbon constrained economy requires companies to minimize their carbon footprint. To do so, companies must make fundamental organizational and behavioral changes and develop a much broader and deeper understanding of greenhouse gas (GHG) management vernacular. Among the leading concepts for companies to understand are GHG inventories and carbon off sets, as well as others. But what about the rest of the country? Surely this need not concern other states and their local businesses. Yet time and again business, cultural and fi nancial trends have followed the same pattern: What happens in California matters for the rest of the country. In the case of cap-and-trade, it’s worth noting Smokestack at a that California contains the largest U.S. state popula- coal-burning plant tion, the largest U.S. state economy and represents roughly 6 percent in Conesville, Ohio. of the country’s total GHG emissions. Th is has for decades made it the bellwether state for, among other indicators, national environmental regulation. Whether it’s been regulating insecticides or controlling automotive emissions, California has long set the bar for environmental protection in the United States. Th is should serve as a wake-up call to companies — small and large — who think they are immune to carbon controls. Californians may soon be entering a carbon constrained world and could bring others with them. Th is is the time for businesses across the country to get a jump start

on managing their own carbon footprint. Failing to do so would mean being left behind by a growing number of more effi cient and innovative companies, the likes of which California is known for. Admittedly, budgets are tight these days. However, that should not stop companies from taking action. Minimizing one’s carbon footprint can lead to substantial cost savings and, through emission reductions such as off sets, can enable companies to achieve their climate goals cost- eff ectively. It is time we all take notice of what’s going in California and anticipate the inevitable NORTH AMERICA – a carbon constrained world.

Jem Porcaro has 10 years of experience in energy and environmental management and policy. His career includes a substantial period as energy analyst with the Sustainable Energy Programme at the United Nations Development Programme (UNDP), the U.N.’s largest source of grant assistance. At UNDP, Porcaro was responsible for advising governments on sustainable energy technologies and policy and helping manage UNDP’s $2.5 billion energy project portfolio. Prior to UNDP, Porcaro worked as an environmental engineer advising large corporate clients, including several Fortune 500 companies, on U.S.

RENEWABLE ENERGY WORLD ENERGY RENEWABLE environmental policy and regulation.

Generating Results in an Energy-Rich Environment

Thom Sheets, Former General Counsel of FERC, Rejoins McDonald Carano Wilson’s Energy Practice Group

From wind energy to solar to geothermal and more, Nevada is poised to be a leader in energy policy on a local, state, nationwide and global scale. Thom’s recent experience as General Counsel of the Federal Energy Regulatory Commission (FERC), combined with his past experience as General Counsel for Southwest Gas Corporation and his service as counsel for the Public Utilities Commission of Nevada, give him a unique perspective for our clients in matters relating to the Firm’s Energy, Environment and Natural Resources Practice Group. McDonald Carano Wilson welcomes Thom Sheets’ energy and experience back to our firm.

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