The Power Generation Blog: March 2011

Italian Solar Power A Bit Sotto Voce

Is Italy pulling the rug out from under solar power producers? It seems like they may be.

Previously, Italy had offered plush incentives to solar operators as it ramped up quotas and incentives for overall solar production.

Now, Reuters reports, the Italian government is changing its renewable energy incentives in solar to apply only to photovoltaic plants that are on the grid by this May. Previously, companies had until 2013. Another program is being created for solar plants that get on line after the May deadline, but it’s expected to be much more limited than the original plan.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

An In-Depth Look At Solar's Future

Investors Business Daily has a comprehensive look at solar power generation subsidies. The whole thing is worth a long read if you’re interested in solar power or power generation in general.

The piece begins by noting that with all the upheaval in the Middle East, it should be a boom time for renewable energies like solar power. As oil prices increase (which they have been), investment in solar power usually increases. But that’s not the case right now.

That link may be weakening. Oil price spikes are reliably fickle. And the solar industry’s history in Europe, its largest market, is rife with lessons of boom and bust. Italy’s recent talk of drastic cuts to its solar subsidies — still the lifeblood of this industry — spurred a two-week sell-off in solar stocks. In addition, the potential for fast-growing capacity in China to overwhelm flagging demand further clouds the picture.

Solar power is heavily dependent on subsidies—as it says above. It’s an expensive form of power, infrastructure-wise. While its power is clean, it’s also very expensive to make the equipment that makes the power. Since clean energy is more expensive, the so-called free market generally wouldn’t make it a winner. That’s where government intervention comes in. And with the global economy still uncertain, governments around the world are hesitant to push ahead with aggressive solar power goals they set during boom years.

A way to cut down the costs of producing solar energy would make it more attractive, but since solar power is an unattractive option for business, the development of new solar technology is increasing at a slow rate.

The whole piece is worth checking out. Make sure you read it here.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

Record Profits in Ontario a Bad Thing?

The Financial Post has seen some holes in Ontario Power Generation’s financial numbers.

On the surface, they look good. The state-owned power generation company generated $10.5 billion in revenue and $1.2 billion in net income. And while revenue rose only 1% from last year, its net income enjoyed a 13.4% increase. That seems good, right?

Overhead for OPG has increased while it employed 20 fewer workers. The company’s debt also increased $1.2 billion, a 10.4% increase. A close look also uncovers some other problems. In the Financial Post’s words,

OPG was profitable because its nuclear decommissioning fund had a market gain of $668-million. OPG, with hundreds of millions in unfunded pension and benefit liabilities, doesn’t make money on what it actually produces -electricity.

Some of OPG’s largest projects—two large hydro power generation projects and several nuclear power-related projects—have all come in over budget.

And, as seen in its American neighbor, Canada’s OPG is also seeing some tension with its workforce, 90% of which has a collective bargaining agreement. Overall, OPG looks to be likely to increase its power rates during the year in order to keep up with its budgeting needs.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

China's Wind Woes

There’s a shocking story by Nasdaq that claims that half of China’s wind power is lost because of their poor power grid. And since China is the world leader in wind power, that amounts to a lot of (wasted) hot air!

In the first half of 2010, China wasted 2.8 billion kilowatt-hours of solar energy. The country has in place the capacity to make 41.83 gigawatts. China has put in place an unprecedented amount of wind power generation infrastructure in order to meet a goal of 15% non-fossil fuel power generation by 2020.

However, a large number of its wind power turbines are located in western China, in Inner Mongolia and Xinjiang Uygur autonomous regions and Gansu province. Much of its power is used 4,000 kilometers away, though. This great distance between the site of power generation and its use accounts for all the lost power.

Another shortcoming of wind power in China and elsewhere is that wind is an inherently unpredictable (and therefore unreliable) source of energy. This has caused the demand for fossil fuel power generation to rise, defeating the purpose of wind power.

China is doing a great amount of work in renewable energy, but it has a long way to go.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

The Sunshine State Seizes On Its Natural Strength

A “solar power innovator and leader.” That’s what Reuters has called the Florida Power and Light-commissioned Martin Next Generation Solar Energy Center in Martin County, Florida.

The Next Generation station is made up of 190,000 solar panels; it does work in combination with a preexisting natural gas power plant, though. Still, it’s a great advance for the state of Florida. Besides providing clean energy, it’s also going to generate $5 million in tax revenue for its home county.

The Florida-based solar project is meeting a bit of pushback, though. The Miami Herald reports that legislators are bickering over what the best clean energy technology best suits the state. In the debate is Florida Power and Light, Florida Crystals, and domestic solar panel companies.

Even though the Next Generation station is a great boon for Florida, many smaller businesses are clamoring for some money and jobs, as well.

A bill passed in 2008 has mainly benefited Florida Power and Light, allowing it to charge a set rate for its solar power. Many business owners say the bill gives the company an unfair advantage. Florida Crystals, a local company that produces solar and biomass energy at a lower cost than Florida Power and Light agrees.

No matter, the market and local legislators seem primed to iron out the wrinkles in Florida’s plan to produce large amounts of renewable energy, and that’s good for everyone.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

Bakersfield Gets Steamy with Glasspoint Solar-Oil Hybrid

Bakersfield, California. Once known for its abundant oil, is still a thriving city--the eleventh largest in California. And while Bakersfield enjoys a beautiful climate, a city doesn't sustain double digit growth with sunshine alone. Or can it?

According to this Forbes blog, a new company called Glasspoint is setting up shop in an old oil field of Bakersfield. Actually, what Glasspoint is setting up is more like a greenhouse than a shop.

The company recently built a half-acre greenhouse-looking structure that combines renewable energy with typical fossil fuel power. It all comes together in an incredibly clever way.

The glass structure contains a multitude of solar reflecting mirrors made of aluminum, all hanging by wires. As the sun passes overhead, the mirrors are shifted to best focus the sunlight onto hanging pipes filled with water. (Anyone who's ever used a "solar shower" will be familiar with the idea.) The water boils into steam, and the steam is then injected into the ancient oil field to push up aged crude oil.

The whole process works similar to hybrid automobiles. By combining renewable energy (or at least potentially lower-impact, in the case of automobiles) with traditional power generation, a unique hybrid approach begins to take hold.

Glasspoint's service is meant not to compete with traditional solar power, but rather the way oil is already harvested. Traditionally, oil companies use the steam process to force out oil from deep underground; to do so, they use natural gas. Glasspoint's business is predicated on replacing natural gas in both more environmentally friendly and less expensive ways. The first goal is obviously met--in optimal circumstances. The second goal is also met--apparently the Glasspoint glass houses will cost about half as much as gas to operate.

There are a few problems with Glasspoint's project, though. To start, the initial installation is about half an acre; to properly power the oil field it's situated on, it would take about 100 acres of such houses. The cost power a larger field (like the one owned by oil giant Chevron) is estimated at $700 million to cover 3,200 acres.

As oil supplies become depleted, it takes more energy to extract the oil. It makes sense that you'd want to spend as little energy as possible to produce more energy. Other oil producing nations like Oman, Qatar, and even Spain are looking to solar-powered oil extraction. American reserves are supposed by many to be economically unfeasible, but if the cost to extract oil can be reduced, our supplies could be said to increase quite a bit. Let's hope the sun keeps shining on beautiful Bakersfield.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

Driving Becomes Electric!

What if all cars were electric? It's not such a crazy idea as that sounds, as this piece from Triple Pundit spins out a little thought experiment.

To begin, it points out that all electric cars (as conventionally thought--like a Prius, say) actually cause carbon emissions. After all, your electricity has to come from somewhere. Since that's the case, we can then think of all carbon-emitting cars (read: gasoline-powered cars) in terms of electricity.

While the piece doesn't actually come up with how much electricity it takes to power a gasoline car, it does find the opportunity cost of making a gallon of gas is about 6 kilowatt hours of electricity, or 20 miles traveled in an electric car.

The whole piece is worth looking into, so check it out!

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

How To Judge the First Biorefinery in America

In the power generation market, we often focus on the big names: Coal, nuclear, wind, and water. Even geothermal gets a lot of press. One power source that is relatively little-heralded is biomass power. Luckily, Renewable Energy World is here to give us the lowdown on how to evaluate a biomass refinery.

Specifically, they look at the proposed Abengoa Bioenergy Biorefinery of Kansas (ABBK), which, besides featuring lots of bios, would be the first commercial-class biorefinery in America.

The way the ABBK works is by taking in biomass (like corn, wheat, switchgrass, and other fuel-rich materials) and producing ethanol from them. The ethanol is then burned like, for instance, oil to produce electricity with a high pressure steam turbine.

In order to properly power the ABBK, its site needs a 425 acre plot to grow the actual energy sources; the refinery itself would occupy 385 acres. It would take 18 months to construct the ABBK, and it requires improved infrastructure, including road and rail upgrades.

While it would require lots of money and materials to get off the ground, the ABBK would have other positives (aside from creating energy from renewable resources and resulting in improved infrastructure of the community). The ABBK would employ up to 260 workers, pumping into the local economy about $16 million during construction and around $4 million per year during operation. While the ABBK would still emit greenhouse gasses, it would result in a net reduction compared to fossil fuel use.

The Renewable Energy World piece delves quite deeply into the various issues surrounding the ABBK, including funding, waste disposal, environmental impacts, and more. It's worth your time to check out if you're at all interested in power generation or renewable energy.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

Can Europe Avoid California's Power Problems?

Yesterday, we published a piece on problems the Columbia River Valley is facing, including having too much wind power and too poor a power grid Today, there's a story from Renewable Energy World about Europe facing a similar dilemma--from the opposite end!

In order to meet a carbon reduction goal for 2020, Europe is hoping to make wind power comprise 20% of its total energy output. Therefore, European leaders have realized the need to radically change its power grid.

The European Wind Energy Association is looking to build large offshore wind power stations to start harvesting all the renewable wind energy blustering over the ocean. But in order to make off shore wind power a success, Europeans are working on creating something called the North Sea grid, carrying wind and water power from Norway to the rest of Europe.

Formed in 2009, the North Sea Countries' Offshore Grid Initiative counts Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden, and the United Kingdom among its members. This intra-Europe push toward building a healthy power grid infrastructure will go a long way toward to making renewable energy a reality in Europe.

Europe's power goal for 2020 is just the first step in its ambitious renewable energy plan. By 2050, Europe hopes to have 50% of its electricity generated by renewable energy sources. Its focus on the power grid can hopefully help it obviate some of the challenges California is facing.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

The Columbia Runneth Over

We've recently covered some of the struggles facing industrials wind power generators. Now, the Bonneville Power Administration, the governing body of power generation in the Columbia River Valley, is facing a wind power-related dilemma.

To wit, there's just too much power. As the New York Times puts it,

If the region's grid is carrying high power output from wind generators at a time when the river flow is extremely high, the combination of wind power and hydropower would exceed the demand for electricity, in expected scenarios.

Besides the overabundance of power to worry about, there are also grave environmental concerns at play. If too much water flows over hydro power dams on the Columbia, the spillover will ravage protected salmon and other fish species.

The BPA has proposed offering wind power generators that excess hydropower at no cost in return for them to power down. Area coal generators would also see reduced rates on power. However, such a solution would cost the area tens of millions of dollars, perhaps up to $50 million per year as the problem recurs. Another problem with this proposed solution is that wind power generators receive federal tax credits for generating renewable energy, which they would lose and not be reimbursed for.

The real problem here is that the power grid is insufficient to effectively transmit power from areas such as the Columbia River Valley to other areas that need power. The Columbia River is known to regularly overflow whenever there is above average snowfall, which happens (somewhat paradoxically) frequently. Were the power grid upgraded, such an excess of power would be a great boon rather than a problem.

Finally, another confusion added to the mix is that coal power is being seen as an increasingly appealing option. Since the BPA will offer coal plants a reduced rate, it creates an economic incentive for coal power. No matter that coal power generally results in ecological waste (which is the reason why the abundance of hydro power is a problem in the first place).

This problem in the Columbia River Valley is an odd confluence of counter-intuitive problems, but it highlights the overwhelming need for a better energy grid, something like smart grid technology, implemented throughout California and the US.

To learn more about industrial power generation, check out Power and Composite Technologies: www.pactinc.com

The Power Generation Blog

Italian Solar Power A Bit Sotto Voce

An In-Depth Look At Solar's Future

Record Profits in Ontario a Bad Thing?

China's Wind Woes

The Sunshine State Seizes On Its Natural Strength

Bakersfield Gets Steamy with Glasspoint Solar-Oil Hybrid

Driving Becomes Electric!

How To Judge the First Biorefinery in America

Can Europe Avoid California's Power Problems?

The Columbia Runneth Over

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