Russia’s top leadership  is on record supporting the development of solar power projects in the country. At a March 2008 meeting with Vladimir Putin and Dmitry Medvedev, Chairman of the State Duma Boris Gryzlov stressed the importance of solar power for electricity generation and mentioned a patented Russian technology for solar power applications that could be marketed.  Gryzlov’s August 2008 article in the  Russian Journal “Expert” noted  that  ”Development of renewable energy will  make it possible not only to address the problem of energy supply, reduce dependence  on  hydrocarbon raw materials and improve the ecological situation, but also to make money from the production and export of high-tech products and engineering solutions.” 

In October 2008, Prime Minister Vladimir  Putin supported a proposal  made by  the state corporation Rosatom to invest in polysillicon production  and  to construct  a solar equipment plant in Krasnoyarsk Region to produce solar modules.   This project would involve Rosatom’s Zheleznogorsk polysilicon plant, the state-owned Krasnoyarsk Machine-Building Plant (Krasmash), and OJSC Krasnoyarsk Non-Ferrous Metals Plant (KrasTsvetMet).   Other state corporations, Rosnanotekh and Vheshekonombank, might participate in co-financing the project, whose goal is to create a vertically integrated manufacturing value chain  from the supply of  raw materials  to the assembly of solar modules.

In September 2008, Rosnanotekh signed a strategic cooperation agreement with Oerlikon, a Swiss industrial technology corporation partly   owned by  the  Renova Group of Companies,  a  leading asset management company  in Russia . In May 2008, Renova Industries Ltd increased its stake in Oerlikon to 39.1 percent.  Oerlikon’s subsidiary, Oerlikon Solar, is a  major producer of equipment for manufacturing solar cells.

Private initiatives  [noted in a previous posting “Russian officials approach renewables cautiously” dated September 9, 2008] include Nitol Solar’s new construction project in Irkutsk Oblast , with its projected annual polysilicon capacity of 3,700 tons in 2009.  Nitol produced its first industrial batch of polysilicon in early 2008.  Krasnodar-based producers Solar Wind Ltd and Kvark Ltd  are also interested in the creation of a manufacturing value chain in Krasnodar Region.  The required investment for this project was estimated in 2007 at about 260 million euros ($372 million).  Kvark has  already produced and installed solar-powered light posts in the southern city of Krasnodar.  Solar Energy LLC, a Russian subsidiary of Industrial Investors Group, has a project for a 1200 MT polysilicon production facility near the city of Lipetsk.  Production is expected to start in 2009, with some output exported and some used for domestic production of solar cells in the city of Ryazan. 

The  present financial crisis  will most likely produce delays in some of these projects.  However, state-controlled companies  will probably find it easier to raise the significant amounts needed to launch large-scale solar projects than will private companies.

Present producers of solar cells and/or solar modules in Russia include the following companies:

1. Solar Wind Ltd.(city of Krasnodar, Krasnodar Krai)
2. OJSC Krasnoe Znamya (city of Ryazan, Ryazan Oblast)
3. Kvark Ltd (city of Krasnodar,  Krasnodar Krai)
4. CJSC Telecom STV (city of Moscow)
5. OJSC Ryazan Metal Ceramics Instrumentation Plant (RMCIP) (Ryazan Oblast)
6. JSC Bogoroditsk Plant of Techno-Chemical Products (BTCP) (city of Bogoroditsk, Tula Oblast)

Present producers of polysilicon for solar applications include the following companies:

1. Nitol Solar (city of Usolye-Sibirskoye, Irkutsk Oblast)
2. Zheleznogorsk Polysilicon Plant of the Krasnoyarsk Mining & Chemical Complex (city of Zheleznogorsk, Krasnoyar s k Krai)

Present producers of monocrystalline silicon for solar applications include the following companies:

1. OJSC Podolsk Chemical Metallurgic Plant (city of Podolsk, Moscow Oblast)
2. OJSC Krasnoyarsk Non-Ferrous Metals Plant (city of Krasnoyarsk, Krasnoyarsk Krai)

For further information about this topic, please contact Akin Gump.

 On November 17, 2008, California Governor Arnold Schwarzenegger signed Executive Order S-14-08 (EO S-14-08) to expedite the approval process for renewable energy projects and increase California’s renewable portfolio standards (RPS) to 33% by 2020. 

As previously raised by ClimateIntel, current inefficiencies and red tape in the permitting process have been holding up progress towards meeting California’s existing 20% by 2010 RPS goal.  Thus, the effectiveness of the RPS procurement process has been tempered by the slow pace of actual renewable development coming online.  The Governor’s EO S-14-08 directly addresses this problem through the following:

• Streamlining the application process for renewable energy development by creating a “one-stop” process for concurrent review of permit applications by the California Energy Commission (CEC) and the Department of Fish and Game (DFG).  On November 17, the CEC and DFG signed a Memorandum of Understanding (MOU) to create a joint Renewable Energy Action Team (REAT) that will concurrently review permit applications filed at the state level.  This streamlined process is expected to halve the application time for specific projects.  Beyond this, the CEC and DFG entered into a further MOU with the U.S. Fish and Wildlife Service and the U.S. Bureau of Land Management to include the federal partner agencies in the expedited permitting process for projects on federally-owned California land. 
• Initiating the Desert Renewable Energy Conservation Plan in the priority Mojave and Colorado Desert Regions.  Under this Plan, the REAT will, among other things, collaborate with federal partners and stakeholder groups to identify and map pre-approved areas for streamlined RPS project permitting and environmental review.  The REAT will also develop a Best Management Practices manual to assist applicants in designing projects to emphasize siting considerations and minimize environmental impacts.  The Plan is expected to reduce both the time and uncertainty normally associated with renewable project development.  
• Further accelerating and raising California’s RPS Goal from 20% by 2010 to 33% by 2020.  The Governor will be unveiling proposed companion legislation to codify this higher RPS standard and require all utilities, public and private, to meet the 33% target.  The legislation will also reform the renewable energy market structure to spur new development while providing consumer safeguards.

About half of the states in the U.S. have renewable energy mandates, but California’s 33% by 2020 will be the most aggressive.  With California again pushing the envelope, hopefully, the Obama Administration will be next to push for a strong federal renewable portfolio standard.

For further information about this topic, please contact Akin Gump.

Over the 21 months of his presidential campaign Barack Obama repeatedly stressed themes of change: finding new solutions to the problems of today’s world.  This philosophy certainly extends to the President-elect’s bold and comprehensive plan to overhaul the country’s energy policy and actively engage in the global fight against climate change.  Below, we outline some of the most significant items on the Obama administration’s climate and energy “to-do” list:

Diversify Energy Sources and Reward Energy Efficiency

A major plank of the President-elect’s energy proposals is to focus American ingenuity on renewable energy and other “green” technologies. As he sees it, this focus will have both environmental and energy security benefits, but most importantly in these troubled economic times, help stimulate the economy through the creation of new “green collar” jobs. President-elect Obama indicates that by ensuring that America is a leader in clean energy technology, such as deploying carbon capture and storage, his plan will create at least five million new jobs, and create demand for American expertise around the world. The President-elect’s plan has several strategies for accomplishing this:

1) Accelerating investment in green technology, both by providing incentives for the private sector and by investing $150 billion of federal money over the next 10 years;

2) Extending the Production Tax Credit for five years; and

3) Creating a national Renewable Portfolio Standard beginning at 10% by 2012 and increasing to 25% by 2025.

To support this massive expansion of alternative energy, President-elect Obama’s plan also advocates the creation of a unified national “smart grid,” which has been strongly encouraged by Al Gore’s group Alliance for Climate Protection. 

Design and Implement Comprehensive Cap and Trade Legislation

Throughout his campaign, President-elect Obama advocated for an economy-wide cap and trade program to significantly reduce greenhouse gas emissions. In fact, his proposal, which would slash GHGs to 80% below 1990 levels by 2050, is more aggressive than either GHG control effort undertaken by the House or Senate (the Dingell-Boucher bill proposes reductions of 80% below 2005 levels by 2050 and the Lieberman-Warner bill proposed reductions of 70% below 2005 levels by 2050). Then candidate Obama’s platform advocated a 100% auction of carbon credits, with a portion of the proceeds would go towards supporting clean energy and energy efficiency technology. Read the rest of this entry »

For further information about this topic, please contact Akin Gump.

In 2007, former Vice President Al Gore applied for a permit to install 33 solar panels on the roof of his home in Belle Meade, Tennessee.  His application, however, was blocked by the city until new local zoning rules were adopted.  Since then, new rules allow homeowners to install solar panels on their roofs, but only if they are not visible from the street or from any adjoining property.  As highlighted in a report released by the Network for New Energy Choices, too many towns, cities and counties are making it difficult and expensive for homeowners and small business owners to install small-scale solar and wind systems to generate their own renewable energy.     

The report identifies the following as the most significant municipal-level planning and permitting obstacles to small-scale distributed renewable energy systems:

• complex and/or unclear local permitting requirements;
• inspectors and permitting authorities that are inexperienced with renewable electricity systems;
• multiple permitting processes and standards that vary significantly across jurisdictions;
• permit fees that vary across jurisdictions and are sometimes not consistent with the municipal resources expended; and
• unfair and often illegal enforcement of restrictive housing covenants.

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For further information about this topic, please contact Akin Gump.

 A Dutch University is challenging the notion that the diversion of grains from food to biofuels is responsible for the spikes in agricultural commodity and food prices over the last two years.  The university’s findings likely will be welcomed by the biofuels industry in the context of the political and policy debate over the potential impact on food prices from biofuel requirements in the US and abroad. 

Wageningen University and Research Centre (Wageningen UR) in the Netherlands has analyzed  the factors influencing the rapid rise in worldwide food prices in a series of reports over the last five months.  Noting that the actual “long-term trend of world food prices is declining” in light of technological advances that continue to increase land productivity, the university cites a number of factors that it suggests have affected the recent trend in rising food prices:  

• High energy costs that led to higher costs for artificial fertilizers and fuel, as well as higher transport; costs for grains that travel long distances to market;
• Poor harvests of wheat and barley in Australia, Ukraine and Europe;
• Export taxes in Argentina, Kazakhstan, India, Vietnam and Egypt designed to protect domestic food supplies;
• Production limitations for food products in the European Union; and
• Rapidly growing demand in the developing world, particularly Asian countries that are increasing consumption of meat products.

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For further information about this topic, please contact Akin Gump.

On November 4th, California voters rejected both of the proposed renewable energy measures.  Proposition 7, the Renewable Energy Generation Initiative, would have required government-owned utilities to generate 20% percent of their electricity from renewable energy by 2010, a renewable energy portfolio standard already applicable to private utility companies.  Proposition 7 also would have raised the requirement for all utilities to 40% by 2020 and 50% by 2025.  Many argued that, while well-meaning, the measure was poorly drafted, and would have created loopholes for compliance, resulted in higher electric rates and forced small renewable energy companies out of business.  Opposed by leading environmental groups, renewable power providers, taxpayers, business and labor, Proposition 7 was defeated 65% to 35%. 

Proposition 10, the Alternative Fuel Vehicles and Renewable Energy measure, would have authorized the state to sell $5 billion in general obligation bonds to finance various renewable energy and alternative fuel vehicle incentives, largely green car rebates.  It would have cost the state about $10 billion over 30 years to repay the bonds.  This proposition was heavily backed by Clean Energy Fuels Corp., a company founded by Texas billionaire T. Boone Pickens that operates natural gas filling stations throughout the U.S. and Canada.  Opponents, which included environmental groups and consumer watchdogs, criticized the measure as special interest legislation that would have provided large subsidies to compressed natural gas.  Voters rejected the measure 60% to 40%. 

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For further information about this topic, please contact Akin Gump.

Last week, the California Public Utilities Commission (CPUC) issued a Proposed Decision authorizing the use of unbundled and tradable renewable energy credits (RECs) for compliance with California’s Renewable Portfolio Standard (RPS).  This Proposed Decision also sets forth the structure and rules for a tradable REC market and for the integration of RECs into the RPS flexible compliance system.          

Established in 2002 and accelerated in 2006, California’s RPS program requires electric corporations to increase procurement from eligible renewable energy resources by at least 1% of their retail sales annually, until they reach 20% by 2010.  Currently, California is considering raising the RPS to an even more ambitious 33% by 2020.

A REC generally represents the environmental and renewable attributes of renewable electricity as a separate commodity from the energy itself.  A REC can be sold either “bundled,” with the underlying energy, or “unbundled” into a separate REC trading market.  When traded in the voluntary market, a company may acquire non-renewable energy from its local energy provider and at the same time purchase an equivalent amount of RECs that have been “unbundled” from renewable energy produced elsewhere, and claim that it is powered by clean energy.  In an RPS compliance market, the RPS-obligated load serving entities can use unbundled RECs, rather than actual renewable energy, to comply with their RPS mandates.   

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For further information about this topic, please contact Akin Gump.

Deutsche Bank has released a white paper entitled “Investing in Climate Change 2009: Necessity and Opportunity in Turbulent Times,” which asserts climate change investing can be suitable for all asset classes, including listed equities, private equity, venture capital, infrastructure and hedge funds.  Citing the $45 trillion of investment the IEA predicts will be needed in clean energy technologies by 2050 and the driving forces of government regulations, economic/market trends, and the development of new technologies, the white paper identifies four fast-growing markets likely to see increased returns and reduce expected risks in future years-

• Clean energy (power generation, cleantech infrastructure, power storage technology, and transport & sustainable biofuels);
• Environmental resource management (water, agriculture, and waste management);
• Energy and material efficiency (advanced materials, building efficiency, and power grid efficiency); and
• Environmental services (environmental protection and business services).

Investment-Side Analysis

The white paper identifies factors that should be considered in assessing the commercial breakeven point for various climate change technologies and investments, as well as considerations for assessing an industry’s or company’s adaptability in the face of updated or changed regulations.  The report suggests that investors can mitigate and hedge risk by diversifying the risk associated with the breakeven of a clean technology across carbon risk/return, energy price risk/return and regulatory risk/return.

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For further information about this topic, please contact Akin Gump.

California’s 20% by 2010 Renewable Portfolio Standard (RPS) is one of the most ambitious in the United States.  In their 2008 Energy Action Plan Update, the California Public Utilities Commission (CPUC) and California Energy Commission (CEC) committed to evaluating an even more aggressive 33 % by 2020.  In order to reach this 33% target, some of the barriers that have been hindering RPS projects thus far must be addressed.

According to a July 2008 CPUC RPS Quarterly Status Report, since the RPG program was adopted in 2002, the CPUC has approved  95 contracts for 5,900 megawatts (MW) for new and existing RPS-eligible capacity.  Of these, 61 contracts (totaling 4,480 MW) are for new projects.  To date, only 14 contracts for approximately 400 MW have come online.  The CPUC identified the key barriers to renewable energy project development as the expiration of the federal Production and Investment Tax Credits, transmission, developer inexperience, financing, site control, permitting, among other factors.  Although responsible public agencies may not have control over all of these barriers, they can help by streamlining their permitting processes.

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For further information about this topic, please contact Akin Gump.

On October 7, the Biomass Research and Development Board (Board) was charged with carrying out the National Biofuels Action Plan (NBAP).  The NBAP is the federal government’s first step toward achieving 36 billion gallons per year (BGY) of biofuel production by 2022-the congressionally mandated requirement in the Energy Independence and Security Act (EISA) of 2007. 

The NBAP is focused on research in seven key areas (Action Areas).  When combined, these Action Areas form a strategy for a biofuel industry supply-chain framework (2-6 below) and assurance that the strategy can succeed in a safe and effective manner (1&7 below). 

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For further information about this topic, please contact Akin Gump.