No Gloom in Green Energy | Green Energy News

July 6, 2008 – Vol.13 No.16

NO GLOOM IN GREEN ENERGY.

It’s really unfortunate. The queasiness on the streets about the state of the US may be unnecessary. High gas prices, the continuing war in Iraq, sinking home values, the bearish stock market, job layoffs, the credit crisis, abysmal auto sales – all bad news that might not have to be there.

This I know with certainty: Most people in the US don’t read this publication (nor likely others like it.) If they did they’d know that at least one sector of the economy is doing remarkably well – the green energy sector, the industry revolving around clean, efficient and renewable energy. If those millions of nonreaders knew how well that sector is doing there might be less pessimism about the future.

The press release accompanying a new report from the United Nations Environment Programme (UNEP) says this about the sector, “UNEP study says clean energy investments charge forward despite financial market turmoil.” The report "Global Trends in Sustainable Energy Investment 2008" speaks of worldwide investment with the US playing a strong role:

--- New global investment in green energy surpassed $148 billion in 2007, a 60-percent rise from 2006;

--- Most of the investment was in the EU and the US, but significant gains – $26 billion – were in China, India and Brazil;

--- Green power accounted for 23 percent of all new power capacity added globally in 2007: 31 gigawatts of green power were added, about 10 times that of nuclear;

--- Total investment in all energies - green and otherwise - is expected to be $20 trillion by 2030 to meet soaring demand: There’ll be continued pressure by nations to make sure much of this investment produces green energy;

--- Investment in wind energy reached $50.2 billion in 2007;

--- Wind attracted more investment globally last year than any other non-fossil fuel based technology, including large hydro and nuclear power. In Europe and the US, wind capacity additions in 2007 on their own accounted for 40 percent and 30 percent, respectively, of all new power capacity.

--- Global installed wind capacity surpassed 100 gigawatts in March, 2008.

--- Solar energy grew at faster rate than wind to reach $28.6 billion in 2007;

--- Solar attracted by far the most venture capital and private equity investment of all renewables – $3.7 billion – although biomass and waste-to-energy saw the fastest rate of growth.

--- Biofuels in the US had a difficult year in 2007. With US feedstock costs up and ethanol prices down, venture capital and private equity investment in biofuels fell by almost one-third in 2007, to $2.1 billion. However, biofuels investment has shifted to Brazil, India and China.

--- Investment in energy efficiency technology reached a record $1.8 billion, an increase of 78 percent from 2006. According to the International Energy Agency, each $1 invested in energy efficiency on average avoids more than $2 needed to create new supply.

--- North America attracted most energy efficiency investment during 2007, followed by Europe;

--- Research & Development spending on clean energy and energy efficiency was $16.9 billion in 2007, including corporate R&D of $9.8 billion, and government R&D of $7.1 billion.

The report, prepared by UK-based New Energy Finance for UNEP's Paris-based Sustainable Energy Finance Initiative, also looks forward. According to the International Energy Agency (IEA) $20 trillion is projected to be invested to meet the world's energy demand in 2030. With governments increasingly concerned about energy security and global warming, much of this investment could be renewables and energy efficiency– a boom for those in the business.

Beyond what the UNEP report has to say, a change in administration in the US (to either candidate) will spur more government spending on green energy, helping more to build the already strong industry. Both candidates are committed to this effort.

Further, state mandates for greener energy as well as taxpayer funding continue to fuel the industry.

California has published its Climate Change Draft Scoping Plan, which outlines how the state will achieve greenhouse gas reductions in the coming years. Savvy businessmen should be looking over this document for opportunities.

On the other coast Governor Ed Rendell of Pennsylvania has announced his state’s 2008-09 budget which includes an investment of $665.9 million in alternative energy. Of the total, solar will get $180 million, $165 million will be set aside to encourage alternative energy projects and $150 million will be available over seven years to help consumers and small businesses weatherize their homes and adopt conservation tools and offer tax credits to businesses developing and building alternative energy projects in the commonwealth. Green buildings, wind and geothermal energy, will get millions as well.

The proposed state budget also has long term plans to increase the use of biofuels. As production levels of biodiesel increase, the state will require the percentage that will be blended into conventional diesel to also increase. The boost cellulosic development gasoline must include at least 10-percent cellulosic ethanol once production reaches 350 million gallons per year. New investments will also be made in Pennsylvania's biofuel producers; up to $5.3 million will be available annually through June 2011 to encourage the production of ethanol and biodiesel.

Economic downturns are often psychological: bad news begets more bad news until the news gets really bad. It will take considerable good news to counter what’s bad now. It seems, though, that the good news will be coming from the green sector. The sooner people know this, the sooner the country will recover.

Links:

--- UNEP- Global Trends in Sustainable Energy Investment 2008
http://www.unep.org/Documents.Multilingual/
Default.asp?DocumentID=538&ArticleID=5849&l=en

--- California Air Resources Board (CARB) -- Climate Change Draft Scoping Plan
http://www.arb.ca.gov/cc/scopingplan/document/draftscopingplan.pdf

--- Pennsylvania 2008-09 State Budget
http://www.budget.state.pa.us