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United States a Net Exporter of Solar Technology, to the Tune of $1.9 Billion

A new report from the Solar Energy Industries Association and Greentech Media Research showed that the United States was a net exporter of solar energy products in 2010, with a total positive balance of US $1.88 billion.

The United States had a solar energy positive trade balance with China that alone accounted for as much as $540 million. According to the report, $2.5 billion in polysilicon was exported from the United States; the material is the primary feedstock used in manufacturing crystalline silicon photovoltaic cells.

The report notes that though finished solar modules tend to be used as a benchmark for the health of the industry, a full 50 percent of solar energy–related revenue came from so-called "soft costs": site preparation, labor, permitting, financing, and others. And this is interesting: Though the country's largest export was polysilicon, its largest import was finished PV modules; $2.4 billion-worth of these were imported in 2010.

The $1.88 billion positive balance marks an amazing increase of more than 100 percent over the previous year. The United States was still a net exporter in 2009, but with a positive balance of $723 million.

(Image via SEIA/GTM Research)

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The End of Energy Policy

We may as well say it out loud: Not only is fiscal and monetary policy running into limits in the advanced industrial (or OECD) countries, so that growth and jobs increasingly seem a question of luck; energy policy also is running into a brick wall. Everywhere in the rich countries of Europe, North America, and Asia, budgetary shortfalls, a reluctance to do anything that would further jeopardize growth, and the fallout from the Fukushima nuclear catastrophe have trumped energy and climate objectives.

OPEC, contrary to some expectations, now accounts for almost as large a fraction of world oil reserves as it did in 1973. Though it had little success in 2008–09 in slowing a precipitous drop in oil prices, this hardly matters in the larger scheme of things. With demand sure to keep growing sharply from the fastest-growing developing countries, and with the age of easy oil over, the basic trend will be for prices to remain high. For OPEC's biggest customers, "energy independence" is as distant a goal as it was a generation ago.

Though Europe has managed to cut its total oil consumption for several years in a row, its North Sea reserves are running low and its dependence on imports from Russia as well as the Middle East is growing. What is more, as Germany and Italy have adopted plans to limit or end reliance on nuclear energy, natural gas imports from Russia are sure to rise too—imports that are even more vulnerable than oil to interruption and manipulation.

Less reliance on atomic power also means much more generation of electricity from coal, in both Germany and Japan, and with that, higher-than-hoped-for greenhouse gas emissions. Since the adoption of the Kyoto Protocol in 1997, Germany and the United Kingdom have been the most aggressive and successful of the world's major world economies in reducing their greenhouse gas emissions. But that leadership now is threatened not only by greater dependence on fossil fuels but also by limits to how far and fast they can go with wind, the only real alternative to coal, gas, and nuclear for utility-scale power generation.

Germany, to be sure, has strengthened government incentives for offshore wind, and it remains optimistic about wind's growth potential. But let's not forget that favorable onshore sites have been largely exhausted, that the country's electricity prices already are rising quite sharply post-Fukushima, and that more expensive offshore wind could run into a consumer backlash.

We're already seeing that in the UK. Several years ago I paid a visit to the offices of Britain's Friends of the Earth in London, having previously visited in 1978. I learned that FoE's grassroots organizers were now trying to persuade activists to promote (and not oppose) plans for new wind farms; thirty years before organizers were helping activists block proposed nuclear power plants. Because of wide opposition to onshore wind in the UK, the government has had to resort to an ambitious program of offshore generation.

According to one critic of the program, the costs of British offshore wind could come to almost US $10 000 per citizen and be, on an installed megawatt basis, 10 to 12 times the cost of new natural gas generation.

Because of rising costs and economic worries, we have not been hearing the leaders of Germany, Japan, and the UK complain about the weakness of the U.S. greenhouse gas reduction program. It is basically an obsolete "no regrets" approach, of the kind widely recommended in the 1990s, when the scientific consensus was that climate change might turn out to be a serious problem: Promote green energy technology and domestic energy technology—things that make sense to do anyway, and which also would have a benign impact on greenhouse gas emissions.

Today the scientific consensus is that climate change definitely is a serious problem, but the United States, China, and India remain unwilling to address it frontally, and few nations are eager to call them to account.

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Is China Backing Off From EVs?

China's ambitious goals for electrification of its automotive fleet call for 10 percent of the cars expected to be produced in 2015 to be EVs, as Micheal Austin reported in a "technology time machine" roundup earlier this year. The official hope has been that China might skip the hybrid phase that advanced industrial countries are going through and leap straight to all-electric cars. But the Financial Times reports this week that those goals are coming to be seen as too ambitious, and that some retuning or reformulation is in the works.

According to the FT, China's leading automotive battery and EV manufacturer BYD "has repeatedly delayed plans to commercialize and export its electric vehicles." Austin, who is in charge of BYD's U.S. operations, says in a personal communication that testing of the company's e6 all-electric sedan proceeded as scheduled and that commercial introduction of the car was delayed only because it was decided late in the game to change the size of the passenger compartment in response to dealer feedback.

Further, says Austin, the company has focused on production of fleet vehicles like its eBUS (above), responding to official emphasis on electrification of public transportation, rather on the more iffy consumer sector. While this has been "a fiscally conservative approach," he says, "the market [previously] crucified us for building capacity aggressively and then missing our 'doubling each year' targets." Yet  BYD's "15 percent growth last year should have been envied by any industry expert."

A month ago, Shanghai agreed to buy 200 of BYD's electric buses and 300 e6 taxicabs, initially to service the 2011 International Universiade Games and then, after the games end, to serve the city generally.

The consumer market in China is not looking to be an easy sell. Keith Bradsher, the New York Times' China correspondent, reports that Chinese have tended to prefer heavier, options-laden cars to the relatively light and simple EVs introduced so far. "A wide range of subsidies has not yet proved adequate to offset this," he observes. (Previously, Bradsher covered Detroit and the U.S. auto industry for the Times, so he can be assumed to know what he's talking about.) China's national government offers a subsidy for each EV bought of close to US $10 000, and the cities Beijing and Shenzhen another $10 000; Shanghai offers two-thirds that—40 000 versus 60 000 renminbi. In addition, Beijing and Shanghai exempt EVs from restrictions on issuance of license plates.

Under the circumstances, it's hardly surprising that introduction of the e6, which sells for 300 000 renminbi, has been cautious. Hertz announced this week it would start renting electric cars in China—but just three pairs of e6 sedans initially, and only with a chauffeur as part of the deal. By the end of the year Hertz hopes the Chinese total will be 25 to 30, Bradsher reports.

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Complex Oil Market Complicates Global Economic Outlook

Global oil demand grew 3.1 percent last year to reach an all-time high of 87.5 million barrels per day, despite dropping sharply the previous two years, Worldwatch reports. Partly because European demand has fallen four consecutive years and partly because of continued boom growth in many of the so-called emergent market economies (such as Brazil, China, India, and Turkey), the world's less developed countries now account for almost as much of total world consumption as the OECD countries: 47.4 percent versus 52.5 percent. From 2005 to 2010, OECD oil demand fell 7 percent, while non-OECD demand grew 20 percent.

In terms of production, OPEC and non-OPEC countries (not counting the former Soviet countries) each account for about 42 percent of total supplies, with the FSU states accounting for a sharply rising share of 16.8 percent. For the second year running, Russia was the world's top oil producer, displacing Saudi Arabia in the top spot.

Prices and the balance of supply and demand show a high sensitivity to global economic trends. Prices spiked at the end of 2008, when the world economy was crashing, at over US $140 per barrel. In the next year prices dropped precipitously to about $30/barrel, despite OPEC’s decision in December 2008 to cut production targets by 4.2 million barrels per day. Prices climbed back more gradually in 2010–2011 to about $115 per barrel, only to start dropping again in recent months as nervousness about the prospect of a second recession has mounted.

OPEC’s continued centrality, despite Russia's rise, is noteworthy. During and after the oil crises of 1973–1974, free-market theorists predicted that as the organization tried to limit world production and drive up prices, competing suppliers would enter the market, causing the organization eventually to wither away. In the short term, something like that happened. From 1975 to 1985, a Worldwatch figure shows, OPEC's share of world production fell from almost 50 percent to below 30 percent. But then in climbed back in the next decades to over 40 percent, where it has held steady. 

Evidently there was a limit to how much oil was readily available in non-OPEC countries to develop. Today, another Worldwatch figure indicates, the OPEC countries account for almost as large a share of total estimated world reserves as they did in 1973.

What are the prospects for the immediate future? According to IEA figures cited in a recent Financial Times article, even with oil demand growth slowing with lower-than-expected economic growth, the increase in total world petroleum demand this year will exceed any increase in oil supplies from non-OPEC countries. So OPEC will continue to play a key balancing role and strongly influence world prices.

Offshore Update: Wind Power Momentum Builds

Sometime within the next year, we will finally get to post a story on the very first offshore wind turbine installed in United States waters. But not just yet. The news on offshore wind continues to build, though, and the progress portends that once that first turbine does start spinning, a thousand others won't be all that far behind.

Secretary of the Interior Ken Salazar made an appearance in Rhode Island this week, announcing a call for proposals for offshore wind facilities. The permitting and approval process will supposedly be streamlined, and the first approvals are expected by next year. The tiny state's coastlines have big wind power potential, with an NREL report suggesting as much as 1000 gigawatts could be generated there.

And though such a lofty figure isn't the most practical of goals, some of the existing proposals in Rhode Island are indeed immense. Neptune Wind recently announced plans for a 500-megawatt wind farm 20 nautical miles offshore, near the Rhode Island–Massachusetts border. Similarly, Deepwater Wind has plans for a 200-turbine, 1000-megawatt farm in Rhode Island Sound.

The only federally approved US offshore wind farm, of course, remains Cape Wind. Though still fighting off legal challenges, construction is expected to start in Nantucket Sound by next year. Cape Wind's first-in-the-water goal, though, may be at risk: Coastal Point Energy may have its first turbine spinning in the water off the coast of Galveston, Texas, by the end of this year.

Elsewhere, offshore wind is also picking up steam. Secretary Salazar also visited a center at the University of Maine focused on developing offshore technology; the center is part of the DeepCWind Consortium, a group aiming at generating 5 GW of offshore wind power by 2030 using floating turbine technology.

Offshore is even gaining some momentum in Washington, D.C. Last month, a collection of senators introduced the Incentivizing Offshore Wind Power Act; the legislation would provide investment tax credits to the first 3000 megawatts of offshore power. The bill has been referred to the Senate Committee on Finance.

All of this movement has yet to actually produce a single watt of power, but it feels like progress nonetheless.

(Image via Danny Rimpl)

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American Vanadium's Plan for Utility-Scale Energy Storage

Earlier this week, I had breakfast in New York with William Radvak, president and CEO of American Vanadium, and Michael Doyle, the company's vice president for operations. They described their plan to combine vanadium mining at a Nevada site, where they have acquired rights, with manufacture of electrolyte for grid-scale flow cell batteries. Doyle, who has extensive experience in gold mining, explained that in the process they propose to use—"heap leach"—the leaching fluid, sulfuric acid, happens to be the same in combination with vanadium as the electrolyte used in flow cell batteries.

Why, with gold booming like never before, would one leave gold for vanadium and a small start-up in Vancouver, B.C.? Well, as Radvak paints the picture, vanadium isn't doing too badly either. To be sure, in the short term there may be a market glut, with a new Chinese mine coming into operation. But longer term, the outlook is strong and solid, globally and in the United States. Vanadium is a standard steel strengthener used in virtually all rebar, says Radvak. Since it reduces the amount of steel and iron ore needed by about 30 percent, it can be called a green metal. The booming emergent market economies from Argentina and Mexico to Turkey, India, and China can't get too much of it; as for the United States, it gets almost of its vanadium from Venezuela (where it's a by-product of oil production), perhaps not the most desirable or reliable supplier.

But why then, if the steel market is such a sure thing long-term, spend time and money worrying about flow batteries to back up intermittent renewable generation? Partly, allows Radvak, because it makes for a "nice story." If that was meant to be disarming, the effect was rather the opposite. Is the flow cell battery a credible candidate for utility-scale applications? And what about American Vanadium's business plan?

It doesn't take much research to answer the first question in the affirmative. Though flow-cell battery technology matured only in recent decades, it has attractive features and appears prominently in every authoritative list of utility-scale energy storage systems. The battery, a cousin of the fuel cell, consists basically of electrolyte divided by a porous membrane into two compartments, with negatively and positively charged ions. The voltage of the battery is boosted by adding cells, and its storage capacity by increasing the amount of electrolyte. It can be recharged electrically or by adding electrolyte, and it discharges readily.

Flow battery installations are built or firmly planned in Australia (where critical R&D work was done), Japan, Ireland, and the United States. A handful of companies are in the business of making the batteries—Ashlawn Energy, Cellennium, Cellstrom GmbH, Prudent Energy, and REDT, among others—and technology big shots like Sumitomo and United Technology are beginning to show interest. (Among the current flow battery players, Prudent appears to have the most active projects.)

To be sure, the cost of delivering power to the grid from a flow battery is high: Estimates are $500/kWh and up. Yet those costs are mid-range when compared with the major alternatives (compressed air, pumped hydro, advanced nickel metal and lithium ion batteries, etc.). The actual cost depends a lot on operating conditions, on how frequently and for how long the battery is called into service, points out Paul Casey, American Vanadium's director of business development. A particularly attractive feature of the flow battery is its ability to respond to electricity demand in a fraction of a microsecond, fast compared with standard sources of voltage support such as gas peakers.

Casey says that providing electrolyte for flow batteries is a well-developed part of American Vanadium's business plan, not just a nice story to soften up regulators and investors. He says the company has been in touch with all the important flow battery producers, talking about electrolyte quality and leasing terms. Vanadium doesn't get used up in a flow battery, so it could be rented out rather than sold, which has some appeal, Casey says.

However American Vanadium fares, it's in an interesting business with a technology that's worth watching. 

DOE Will Spend $67 Million on Novel Carbon Capture Technologies

The Department of Energy's National Energy Technology Laboratory announced on Monday the funding of four carbon-capture technology projects totaling US $67 million. The goal of these projects is to achieve at least 90 percent capture of carbon dioxide from a coal-fired power plant at an added electricity cost of no more than 35 percent.

The NETL's press release points out that existing technologies can achieve 90 percent capture only by adding as much as 80 percent to electricity prices. The new projects cover several technology areas; for example, the Drake #7 plant in Colorado Springs will be outfitted with a NeuStream absorber, a technology that is "applicable to a variety of solvents and can be added to existing pulverized coal power plants with reduced cost and footprint." Another, to be conducted by Linde LLC, is described as follows:

The proposed project will use a post combustion capture technology incorporating BASF’s novel amine-based process at a 1 MWe equivalent slipstream pilot plant at the National Carbon Capture Center. This technology offers significant benefits as it aims to reduce the regeneration energy requirements using novel solvents that are stable under the coal-fired power plant feed gas conditions.

Each of these ideas seeks to improve technologies that have proven too costly to get off the ground on large scales. The DOE continues to stand behind the FutureGen plant (now in its 2.0 iteration), last year pledging $1 billion to modify a coal plant in Meredosia, Ill. (pictured, above); progress so far has involved picking sites for sequestration.

Elsewhere, American Electric Power tabled its plan to launch a full-scale CCS project at its Mountaineer Plant in West Virginia last month. An official within the Obama administration told the New York Times that the lack of federal incentive to spend $668 million on such an idea is what led to its demise: "This is what happens when you don’t get a climate bill."

Clearly, the political environment at the moment will not yield any change on that front in the near future. In that context, the DOE's efforts to find better methods of capturing and storing carbon emissions appear even more relevant; without federal legislation, the only way to start bringing emissions down from coal plants is to lower the costs of doing so.

(Image via DOE)

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Gas Fracking Review Calls for Transparency

A Department of Energy committee issued a report this week calling upon the natural gas extraction industry to fully disclose chemicals used in hydraulic fracturing fluids and to keep track of all water flows connected with fracking operations; it also said state regulatory agencies should review existing rules to check their adequacy in the light of the revolution in unconventional gas that's been sweeping much of the United States.

Those recommendations may seem the equivalent of white Wonder bread, but for an industry that traditionally has kept a low profile and avoided the public eye, they may have real significance. Last year, reporting an article for IEEE Spectrum about the water implications of fracking, I was startled to discover that almost all of the companies in the business—mostly small, with names I had never heard before—had no press or public relations offices and did not return phone calls. And these companies, on the rare occasion I was able to smoke anybody out, told me bluntly that they saw no percentage in communicating with me. (This was unprecedented in my 35 years working as a reporter.)

One such company suffered a major accident in Pennsylvania fracking operations earlier this month, prompting aggressive calls for full disclosure of what went wrong and all environmental implications.

The DOE advisory subcommittee on shale gas production, chaired by MIT’s John Deutch, was convened by Energy Secretary Chu at the direction of President Obama, who has said that unconventional gas represents a big opportunity for the country but must be exploited in ways consistent with the environment.

Among other things, the panel recommended that the government support "existing, multistakeholder mechanisms" for tracking operations and assessing risks, such as the Ground Water Protection Council’s Risk Based Data Management System. It  suggests additional field studies to determine whether and how methane from fracking operations is finding its way into reservoirs or wells, and reminds industry and public authorities that air quality as well as water is an issue.

Emissions from natural gas pipelines and extraction operations are a major issue in their own right, inasmuch as methane is a potent greenhouse gas. (One of the more startling watchdog groups I hear from regularly is Natural Gas Watch, which sends a weekly e-mail headed "This Week in Natural Gas Leaks and Explosions.") In a perfect world without gas leakage, generating electricity from gas produces between a third and a half as much GHG as coal-generated power. But to the extent gas leaks, that advantage is reduced or possibly even canceled.

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Startling Smart Grid Developments

Peter Fox-Penner, a former chairman of The Brattle Group, reports some surprising developments—one of them quite disconcerting—in the latest issue of IEEE's smart grid eNewsletter.

On the positive side of the ledger, Fox-Penner finds that contrary to what one might suppose, relatively small municipal and cooperative utilities have been among the most aggressive and imaginative early adopters of smart grid technology. Cooperatives currently lead smart meter deployment, with 25 percent penetration of their customers' homes—three times the average across all utilities—according to the Federal Energy Regulatory Commission

On the negative side, use of dynamic pricing across the United States is currently flat or declining rather than growing, contrary to what just about every smart grid advocate has expected or predicted. Despite an 85 percent increase in advanced metering over the past two years, the number of entities offering sophisticated pricing programs has decreased.

The numbers are dramatic: "There are 72 fewer entities offering Time of Use (TOU) Rates programs today than there were in 2008—which translates into 180,000 fewer consumers being offered TOU plans," writes Fox-Penner. "The decrease in entities offering Real Time Pricing (RTP) is even more dramatic: In 2008, 85 entities offered RTP programs and within only two years this number has shrunk to 19."

Fox-Penner concludes (uncontroversially) that evolution of the smart grid will be gradual and halting. Yet, considering the hesitant state of the whole economy, the smart gird continues to produce relatively dramatic news on a regular basis. On August 8, the New York Independent System Operator announced a $74 million smart grid initiative, with $37 million in support from the U.S. Department of Energy. That announcement coincided with the ribbon-cutting at the NYISO's new central control facility in Rensselaer, N.Y., itself a $35.5 million project.

The smart grid initiative involves installation of capacitor banks and phasor measurement units (PMUs) throughout the New York State system, which NYISO estimates will save the state $9 million per year in reduced power losses and higher reliability. "Eventually, the NYISO’s PMU network will connect with PMU networks in New England, the mid-Atlantic, the Midwest, and Ontario, Canada, to create a broader situational awareness throughout the Eastern Interconnection Planning Collaborative, a coalition of 24 transmission planning authorities in the eastern United States and Canada," says the ISO's press release.

Another seemingly positive development: The consultancy Black & Veatch reports that ComEd customers could save $2.8 billion in electricity bills over the next 20 years thanks to smarter metering, EnergyCentral reports. Well, that’s very nice, but how exciting is it actually? ComEd appears to have 3.8 million Northern Illinois customers. It takes only a little arithmetic to discover that their $2.8 billion saving translates into $36.85 per year for 20 years.

And as long as we're dwelling on details, why aren't customers already equipped with smart meters seeing savings? If they don't pretty soon, we're going to start hearing mean talk about he Stupid Grid.

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U.S. Nuclear Renaissance Rockier than Ever

Special Report: Fukushima and the Future of Nuclear Power

Editor's Note: This is part of IEEE Spectrum's ongoing coverage of Japan's earthquake and nuclear emergency.

With nuclear power still controversial at the grassroots and the projected economics of new plants still marginal at best, the approach to rejuvenating the U.S. industry has been to use existing sites. By either building additional reactors at already approved sites or resuscitating old construction projects, utilities hope to reduce the number of regulatory hurdles, avoid public outcry, and cut costs. But this approach also has pitfalls, as exemplified by the Tennessee Valley Authority's plan to restart reactor projects at its Bellefonte site in Jackson County, Ala.

The tawdry history of the Bellefonte complex is detailed in a report released today by the Southern Alliance for Clean Energy (SACE), which commissioned it. According to the report, prepared by nuclear engineer Arnold Gundersen of Fairewinds Associates, TVA originally intended to build two Babcock & Wilcox reactors at the site and got the Atomic Energy Commission's permission to proceed in 1974. Fourteen years and US $4 billion later, TVA stopped construction. Then, in 2006, it asked the Nuclear Regulatory Commission to terminate the construction permit. The next year, TVA hatched the idea of building two all-new Toshiba AP1000 reactors at the site. But when costs of that project mushroomed, TVA returned to the idea of completing the original two reactors—one of which was 88 percent complete when construction stopped decades ago, the other 58 percent complete—and got the NRC's go-ahead for that in February 2009.

A dissenting voice in that decision was Gregory Jaczko, who is now NRC chairman. So it would not be surprising if TVA opted for the better part of wisdom, as SACE recommends, and dropped the project rather than going back to what is sure to be a more hostile and critical NRC. Today's SACE report enumerates seven categories of problems with the idea of finishing the two reactors, none of them trivial: among them, an obsolete containment made of concrete that's already 35 years old, undocumented cannibalization of reactor components following initial termination of the project, and costly post-Fukushima design changes that will be needed.

The vaunted nuclear renaissance isn't doing much better on other fronts either. Florida ratepayers are restive at being required to pay already for new nuclear plants where ground hasn't even been broken. (One projected plant would be an expansion, the other all-new.) Congressman Markey, a persistent, well-informed and aggressive critic of the industry, is telling the NRC not to approve the beginning of construction of new reactors at Georgia's Vogtle site (where two units already operate) until the Toshiba reactor design has been fully approved. The one reactor likely to come into operation in the foreseeable future is the second unit of TVA’s Watts Barr plant in Tennessee: That project was stopped in 1988 but resumed in late 2007.

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