Tag Archives: Renewable energy

At least one major oil company will turn its back on fossil fuels

Repost from The Guardian

At least one major oil company will turn its back on fossil fuels, says scientist

Jeremy Leggett, former industry adviser, warns over plunging commodity prices and soaring costs of risky energy projects

Jeremy Leggett
Jeremy Leggett: ‘One of the oil companies will break ranks and this time it is going to stick.’ Photograph: Linda Nylind for the Guardian

By Terry Macalister, 11 January 2015

The oil price crash coupled with growing concerns about global warming will encourage at least one of the major oil companies to turn its back on fossil fuels in the near future, predicts an award-winning scientist and former industry adviser.

Dr Jeremy Leggett, who has had consultations on climate change with senior oil company executives over 25 years, says it will not be a rerun of the BP story when the company launched its “beyond petroleum” strategy and then did a U-turn.

“One of the oil companies will break ranks and this time it is going to stick,” he said. “The industry is facing plunging commodity prices and soaring costs at risky projects in the Arctic, deepwater Brazil and elsewhere.

“Oil companies are also realising it is no long morally defensible to ignore the consequences of climate change.”

Leggett, now a solar energy entrepreneur and climate campaigner, points to Total of France as the kind of group that could abandon carbon fuels in the same way that E.ON, the German utility, announced plans before Christmas to spin off coal and gas interests and concentrate its future growth on renewables.

Pressure on the energy industry to pull out of fossil fuels has grown in recent months with a campaign for pension funds to disinvest from coal, oil and gas.

A new report published this week by researchers at University College London deepened the message that vast amounts of oil in the Middle East, coal in the US and gas in Russia cannot be exploited if the global temperature rise is to be held at the 2C level safety limit agreed by countries.

Leggett, who once conducted research into shale funded by BP and Shell, chairs Carbon Tracker Initiative, a thinktank which aims to raise awareness among key decision-makers about the risks that fossil fuel investments pose to wider financial stability. He believes the current 50% slump in the price of Brent crude will cause the US shale boom to go bust with potentially alarming consequences for the financial system.

“Many of the shale drillers have been feasting on junk bond finance, which was so easy when oil prices were above $100 (£66) but with prices at $50 confidence is going to collapse,” he said. “Should the shale narrative evaporate then it is going to be very embarrassing for all sorts of political promoters of the industry, including George Osborne.”

Leggett said that despite the price collapse due to oversupply, he remained convinced the “peak oil” theory that supplies will eventually be unable to meet demand remains intact.

This is not because there are not the oil or gas reserves in the ground to meet future growth, but because they are too costly and environmentally dangerous to produce, he argues.

“I would say to both the utility industry and the oil and gas industry: its game over, guys,” he said. “You have got to identify the point at which it’s all going to be thoroughly changed and you have got to map back from it.

“You have to think strategically. The point to map back from is zero carbon in the energy system, not the electricity system, by 2050, because more than 100 governments want that in the [next UN climate change] treaty being prepared for signing in Paris.”

But he also believes the energy industry is privately aware of the problems as it watches its own costs of fossil fuel extraction going up while the costs of solar and other new technologies are coming down.

Leggett, who plans to stands down as chairman of the highly successful Solarcentury renewable business he founded to focus on climate change campaigning, holds what he calls “friendly critic” sessions with the fossil fuel sector these days. The tone of the meetings has changed significantly over the past two years, he said.

“Before it was know your enemy. Now it’s: ‘Crikey. A lot of this may be coming true on our watch. What shall we do about it?’ There are top-to-bottom strategic reviews going on in E.ON but in other companies as well, utility and oil and gas. So it will be really interesting to see which is the first of the oil and gas companies to break from the pack, although I fear BP and Shell are going backwards not forwards on carbon.”

Solar industry heating up in California

Repost from The Sacramento Bee
[Editor: I still burn fossil fuel in my car, but my home and my electric bicycle are powered by the sun.  In Benicia, call or email Dave Hampton of Diablo Solar – Dave and the crew did a great job on my home.  – RS]

Solar industry is heating up again after stumbling during recession

Northern California companies are part of the energy surge
By Mark Glover, 11/08/2014
Birds fly over a solar power array, owned by the Sutter Basin Growers Cooperative, that provides Northern California farmers with a renewable energy source to power key equipment and save on energy costs in Knights Landing.
Birds fly over a solar power array, owned by the Sutter Basin Growers Cooperative, that provides Northern California farmers with a renewable energy source to power key equipment and save on energy costs in Knights Landing. | Paul Kitagaki Jr./Sacramento Bee file

The solar power industry, viewed more than a decade ago as a game-changing, jobs-producing juggernaut in California, took its lumps during the recession.

But now it’s coming back with a vengeance, both here and globally.

Some California solar system installers say they have work backlogs. New deals to build new solar power-generating arrays are being announced regularly. And the nation’s No. 1 solar installer, San Mateo-based SolarCity Corp., recently created ripples industrywide, announcing a loan program that lets homeowners finance and buy their rooftop solar systems. It also announced an offering of what it calls the nation’s first solar bonds.

“Inch by inch and now leap by leap, solar is growing and creeping further into the mainstream … and California is a center point for what we’re seeing now,” said Alfred Abernathy, a Bay Area energy analyst.

That growth is fueled partly by a sunnier economy, falling manufacturing costs, federal tax incentives and increasing consumer and corporate enthusiasm for renewable energy. Solar also has boomed far beyond California’s borders, spreading in China, Japan and Europe.

For perspective, the U.S. Department of Energy shows that the United States currently has about 16 gigawatts of installed solar power, or enough to power more than 3 million average American homes. Through June this year, California accounted for nearly half – 7 gigawatts – of the national total. A gigawatt is a unit of power equal to 1 billion watts.

By contrast, China’s solar power supply is more than 23 gigawatts, and it has set a goal of 35 gigawatts in 2015. Japan surpassed 14 gigawatts early this year and is working toward a goal of doubling that by 2020.

Sacramento’s solar hotspots

The industry’s hot streak has rippled throughout the Sacramento area.

SolarCity, which employs more than 500 locally, plans to move its rapidly growing sales staff into 60,000 square feet of space at 1000 Enterprise Way in Roseville’s Vineyard Pointe Business Park next month.

SolarCity CEO Lyndon Rive noted that if his company’s Sacramento-area operations alone were considered a single company, it would be among the largest solar firms in the United States.

Last month, Folsom-based 8minutenergy Renewables LLC received approval to build three solar projects of up to 135 megawatts in Kern County. Collectively called the Redwood Solar Farms, it will be developed on 640 acres of farmland. Construction of the first phase is set to begin in December, with energy production expected to begin in mid-2015.

Roseville’s SPI Solar, which warned in an early 2013 filing with the Securities and Exchange Commission that there was “substantial doubt as to the company’s ability to continue as a going concern,” has found new life since closely aligning operations with LDK Solar Co., its China-based parent company. In recent weeks, SPI has signed a blizzard of solar development agreements in China (regarded as the world’s No. 1 solar market), Japan and Europe.

David Hochschild, one of five commissioners on the California Energy Commission and an expert in renewable energy, acknowledged that solar energy was once regarded as a relatively exotic technology that was outside the mainstream for most consumers. But that perception is changing, and he envisions solar’s growth path similar to what the mobile phone industry experienced nearly a generation ago.

“I think the future is very bright, and I think that we will eventually reach the point where solar panels are as ubiquitous as cellphones,” he said.

Driving the growth

A combination of factors is propelling solar forward in California.

For one, an improving economy has helped. Sales and installations of residential and commercial solar systems nosedived during the housing meltdown but are on the upswing now.

Mark Frederick, president and CEO of CitiGreen Solar in Auburn, says his company is backlogged with orders from commercial clients. “My experience with businesses is that they are willing to invest (in solar) when they have had three good years in a row, and we have been seeing that.”

Hochschild cites another major factor: “In the past, the barrier has been cost, but it’s no longer a barrier.”

Improved methods of solar panel production have dramatically reduced manufacturing expenses, said Hochschild. In 1980, solar panels cost around $35 per watt to produce, he said. That fell to around $5 a watt in 2000 and currently stands at around 70 cents a watt.

Low cost was not always considered a plus in the solar industry. China’s overproduction of solar panels was cited by some energy experts as one of the factors producing a soft market in 2012. But the international playing field has shifted.

Subsidization of solar projects in China and Japan helped turbocharge the industry in those nations, to the point where Hochschild says the United States is the world’s No. 3 solar market, behind China and Japan, respectively. In China’s case, it went from being a relatively small builder of solar installations to a major builder in just several years.

That has benefited Roseville’s SPI Solar, which is now finding substantial work overseas due to its relationship with Chinese parent LDK. Xiaofeng Peng, SPI’s chairman, says SPI is now “one of the largest photovoltaic development companies in (China’s) market.”

Hochschild said California’s solar market also has benefited from Gov. Jerry Brown’s push for a third of California’s energy supply to come from renewable sources by 2020. Also helping the solar industry are federal tax credits of 30 percent for homeowners and businesses that install solar panels by Dec. 31, 2016.

Tax credits also played a role in SolarCity’s recently announced solar financing plan, which analyst Abernathy called a “game-changer.” “On one level, it’s a variation of the old-fashioned car loan.” Under the company’s MyPower plan, consumers take out a 30-year loan to purchase their rooftop solar system, rather than leasing it, which is the norm. The benefit of buying the system is that the homeowner gets the 30 percent federal tax credit, instead of the solar company.

Some red flags

For all of solar’s promise, energy analysts warn that the industry’s history is laced with periods of boom and bust, dating back to the 1954 invention of the world’s first practical solar cell by scientists at Bell Laboratories in New Jersey.

Already, there are some red flags.

In Japan, where subsidies and a favorable tariff policy created a solar boom following the March 2011 Fukushima nuclear disaster, energy analysts are now citing a glut of renewable-energy businesses and applications for solar facilities. Some fear that the industry could collapse under its own weight. Japan solar investors who were betting on relatively high renewable-energy rates over the long term are now voicing concerns.

In Europe, Germany was the embodiment of solar power expansion from 2010-12, installing a whopping 22.5 gigawatts of capacity. However, solar power installations have declined for two years, accompanied by significant job losses in the industry. Renewable-energy advocates have blamed the German government for enacting policies that restricted tariff benefits and put unreasonable restrictions on utility-scale installations.

SolarCity’s Rive dismissed concerns about the solar industry and its past history, stating that the recessionary dip in California occurred in manufacturing, not in the growth of solar companies.

As further evidence of the increasingly mainstream interest in solar technologies, a handful of major U.S. companies are now offering their workers substantial discounts on solar installations for their homes, making it another employee benefit like health care. The discounts will be available to 100,000 employees of four companies – Cisco Systems, 3M, Kimberly-Clark and National Geographic – part of a program announced last month by the World Wildlife Fund.

To insiders like Rive, that’s yet another sign of the solar industry’s momentum: “Now, more people are educated on it. More people are getting it.”