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SFCE 11/30
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Solar power gains ground in Valenzuela
Nov 29, 2015 | Philippine Daily Inquirer
By Jodee A. Agoncillo
...Using Suntech solar panels from China, the solar farm can generate 8.6 megawatts, which will be sold to the Manila Electric Co. (Meralco). The panels cost around P12,000 each, said Therese Dizon of the city’s Public Information Office. -
Saudi Arabia Takes the Lead in Regional Shift to Solar Power
Nov 30, 2015 | Egyptian Streets
By Jose Martinez
...Suntech Power, a Chinese producer of solar panels, has recently built plants throughout the United States, as well as in the Middle East. -
Why Growth Is the Enemy of Solar Stocks
Nov 30, 2015 | The Motley Fool
By Travis Hoium
...But time after time, the companies that grow the fastest have been abysmal investments. Suntech Power, LDK Solar, Yingli Green Energy, and SunEdison (NYSE:SUNE) are just a few of the former industry highfliers that have gone from darling status to bankruptcy, or that teeter on the verge of financial insolvency. -
IDB approves US$450 million finance package for Latin American climate targets
Nov 27, 2015 | PV - Tech
By Tom Kenning
The Inter-American Development Bank (IDB) has approved US$450 million of financing to initiate an Energy Efficiency Green Bond Facility in the Latin America region. -
Behind China's Evolution From Climate Deal Holdout to Leader
Nov 30, 2015 | Bloomberg
Back in 2009, China was a reluctant partner during major climate negotiations in Copenhagen that eventually collapsed amid recriminations between rich and poor nations. This time around the world’s biggest polluter is regarded as a driving force behind what could be a comprehensive deal at a world climate summit in Paris. -
China learns lessons of past failures ahead of Paris climate talks
Nov 29, 2015 | Financial Times
By Lucy Hornby and Christian Shepherd
Six years ago China was criticised as the spoiler of the climate talks in Copenhagen but this time around in Paris, China vows things will be different. -
China's Major CO2 Emissions Seen Stalling Amid Climate Push
Nov 27, 2015 | BNA Daily Environment Report
By Feifei Shen
China's emissions of carbon dioxide from burning fossil fuels such as oil and gas are forecast to stall this year as the nation installs more clean energy capacity to tackle climate change. -
EU Energy Ministers Agree to Plan for Renewables Goal
Nov 27, 2015 | BNA Daily Environment Report
By Stephen Gardner
European Union member states will submit to the European Commission national energy and climate plans by the end of 2019 that will allow monitoring of their progress toward the EU's 2030 goals for greenhouse gas emission reductions and renewable energy, the bloc's energy ministers agreed Nov. 26. -
'No Planet B,' marchers worldwide tell leaders before U.N. climate summit
Nov 29, 2015 | Reuters
More than half a million people from Australia to Paraguay joined the biggest day of climate change activism in history on Sunday, telling world leaders gathering for a summit in Paris there is "No Planet B" in the fight against global warming. -
India Confident of Prevailing in Solar Dispute
Nov 27, 2015 | BNA Daily Environment Report
By Nayanima Basu
The Indian government is confident that it will win the solar panel dispute case against U.S. at the World Trade Organization and is gearing up to move forward on its solar efforts, a senior government official told Bloomberg BNA. -
German government set for U-turn over plan to scrap storage incentive
Nov 27, 2015 | Recharge
By Bernd Radowitz
In a reversal of earlier plans by energy minister Sigmar Gabriel, Germany's government is preparing to extend an incentive programme for PV storage systems, but in a modified form, according to legislators and the energy ministry. -
Dubai to make rooftop solar mandatory in 2030
Nov 29, 2015 | PV - Tech
By John Parnell
Dubai has launched an ambitious new energy strategy, which includes a provision to make rooftop solar mandatory from 2030.
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Solar power gains ground in Valenzuela
Nov 29, 2015 | Philippine Daily Inquirer
By Jodee A. Agoncillo
From a fish pond to a solar power farm.
Valenzuela City will inaugurate today what is considered the largest in-city solar power farm in the country, which will provide not only an alternative source of energy but also employment for local residents.
The Valenzuela Solar Energy Inc. has installed a total of 32,000 solar panels on a reclaimed 12-hectare land in Barangay Isla—an area that used to be a fish farm. The facility, which started construction seven months ago, is expected to be fully operational on Dec. 14, according to the company engineer, Edwin Chao.
Dizon said the solar farm project was in line with Mayor Rex Gatchalian’s key visions for the city that focus on housing, education, health and social welfare, job generation and trade and industry.
According to Joeven Go, assistant project manager of Valenzuela Solar, the project is the company’s very first and that the city was chosen as the site because of its vast open spaces.
Meralco has the discretion to distribute the energy produced by the solar power farm, Go added.
Also benefiting from the technology is Barangay Isla Elementary School, to which the company will donate solar panels as a way of giving back to the community, said the village chair, Joel Santiago Angeles. The number and size of panels suitable for the school are still being determined, he added.
“There will be a double-throw switch for the school. The electricity supply will come from the solar panels in the morning and from Meralco in the evening,” Angeles said.
“This is a pilot run for the solar farm. If the venture succeeds, there is a possibility that more Valenzuela schools will be using solar technology,” he added.
The solar farm has already provided at least 80 jobs for residents related to construction, maintenance and gardening. Starting December, thirty more people are expected to be directly employed by the project, he said.
“I am happy that they constructed a solar farm in our city. I will not allow developers to turn that idle land into a warehouse or factory which can add to pollution,” Angeles said. “I just wish Valenzuela residents can also get discounts from Meralco since the solar farm is located in our city.’’
Sunday’s inaugural can cap a particularly fruitful year for Valenzuela. In September, the city was cited by Galing Pook Foundation as one of the 10 local government units with outstanding governance programs.
Valenzuela was also hailed as the “most business-friendly” among highly urbanized cities in the country in 2012, 2014 and 2015 by the Philippine Chamber of Commerce and Industry, thus entering the award-giving body’s Hall of Fame.
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Saudi Arabia Takes the Lead in Regional Shift to Solar Power
Nov 30, 2015 | Egyptian Streets
By Jose Martinez
After years of hesitation and having observed several countries successfully choosing to invest in solar power, Saudi Arabia is finally willing to invest over USD 100 billion in solar technologies. From Saudi Arabia’s deserts should soon rise the most powerful solar plants in the world in the coming years.
TechSci Research, a global market research and consulting company, recently published a report forecasting a robust growth rate in the kingdom’s solar power use before 2020. The Saudi government is now focusing on investing in solar energy throughout the country, a move that could revolutionize the country’s future. Located on the Equatorial Sunbelt with high levels of solar radiation, the country benefits from vast desert stretches and has ideal conditions for its future solar power plants.
The country’s energy demand has been growing in tandem with industrial development, urbanization and population growth. Saudi Arabia was the largest producer of crude oil until recently, some of which was being used for electricity production. In order to both maintain and improve the standards of today’s power supply, Saudi Arabia must invest in solar power to find a durable and sustainable alternative to crude oil.
King Abdullah City for Atomic and Renewable Energy (K.A.CARE) introduced a renewable energy program for adding 54 Gigawatts (GW) of power generation capacity to its current capacity of 58 GW. It is estimated that it will take an investment of USD 109 billion by the year 2032 to reach this goal.
Among the 54 GW, 41 GW should come from solar power capacities, which represent a great improvement for Saudi Arabia and would make the country a regional leader in the solar field.
“K.A.CARE renewable energy program would be a major driving factor for solar power industry in Saudi Arabia in coming years. The country is more focused towards generating solar power from concentrated solar power technology,” said Mr. Karan Chechi, Research Director with TechSci Research.SAUDI POWER 2015 EXHIBITION AND LFR PLANTS
In May of this year, the Saudi Minister of Water & Electricity Abdullah Bin Adbulrahman Al Hussayen and Dr. Saleh Bin Hussein Al Awaji, Deputy Minister for Water & Electricity launched the annual Saudi Power Exhibition, hosting 158 local and international exhibitors from over 28 countries, including renewables specialists. Concentrated Solar Power technology especially caught the eyes of Saudi Arabia’s leaders because of its increasing capacities, compared to photovoltaic (PV) cell-based solar power, which generate energy directly from sunlight.
The Ministry of Water and Electricity is likely to be interested in investing in another kind of technology called Concentrated Solar Power that uses mirrors as reflectors to concentrate the power. This technology, Linear Fresnel Reflectors (LFR), is booming due to its ability to adapt well in a rugged environment, its capability of storing generated electricity and keep plants functioning both day and night during peak times, dual output of steam and electricity and, most importantly, the lower price point.
Far from being anecdotal, controlled costs would allow Saudi Arabia to add more GW capacities for a cheaper price than with a conventional solar photovoltaic solar plant.
According to French-based Constructions Industrielles de la Méditerannée (CNIM), a historic leader in the European power industry that is specialized in plants using LFR technology, this new technology is a truly profitable bargain. CNIM built the first prototype of LFR-plants in the 1980s in France and is now building large-scale plants of a type that could interest Saudi Arabia. World leaders in the energy sector, including CNIM, are now offering turnkey projects for plants using LFR technology. Using simple mirrors, the LFR plants can also be a good source of employment locally, which Saudi Arabia is trying to accomplish as a return on investment.
Several other countries have already begun their shift to solar energy. The American photovoltaic manufacturer First Solar is one of the world’s leaders in PV energy and is currently developing a new generation of photovoltaic plants, using comprehensive technologies. They have already installed over 10 GW and are now operating the most successful PV plants across the world.
Photovoltaic constructors have multiplied in the past several decades and China is also at the front of the race to renewable energy, building plants and becoming experts in manufacturing photovoltaic cells panels. Some Chinese companies are now also willing to export their expertise and build plants abroad. Suntech Power, a Chinese producer of solar panels, has recently built plants throughout the United States, as well as in the Middle East.
Coming up, we will see if the future of the sun is bright when it comes to photovoltaic plants or if countries like Saudi Arabia start investing more in Concentrated Solar Panels. The latter are more durable and require less maintenance in the long term, making it an attractive option for countries on the road to solar energy.
Egypt is already one of them. After power outages became a hot topic following the January 25th 2011 uprising, so far the problem hasn’t been fully addressed. Saudi Arabia’s new solar plants could potentially help Egypt through the shared lines during peak times.
Although Egypt and Russia recently inked a deal to establish a nuclear power plant, Egypt is likely to diversify its energy sources to provide more stable and cheaper power sources to its people.
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Why Growth Is the Enemy of Solar Stocks
Nov 30, 2015 | The Motley Fool
By Travis Hoium
On the surface, you would think renewable energy companies that can grow quickly and exploit the industry's massive potential should be the kind of companies investors will want to buy and hold for the long term. But time after time, the companies that grow the fastest have been abysmal investments. Suntech Power, LDK Solar, Yingli Green Energy, andSunEdison (NYSE:SUNE) are just a few of the former industry highfliers that have gone from darling status to bankruptcy, or that teeter on the verge of financial insolvency. They also provide a similar story of growth, debt, and massive losses that couldn't be overcome by even more growth.
So, why is growth such a bad thing for renewable energy companies, and why have slow or no-growth companies like SunPower (NASDAQ:SPWR) and First Solar (NASDAQ:FSLR)been able to survive while others rise and fall around them? The answer lies in what companies have to do to grow in the solar industry in the first place.
Growth adds debt
To fund growth, solar companies have to invest a lot of money in capital projects. Whether you're a solar installer like SolarCity (NASDAQ:SCTY) putting systems up on roofs across the country or a manufacturer like Yingli Green Energy, it takes capital to build out capacity.In most cases, the capacity being built will pay off over 10 to 20 years, either from selling products like solar panels or from collecting customer payments. So, solar companies are spending billions up front to generate a long-term payoff, and usually that means adding a lot of debt to fund operations.
Debt isn't necessarily a bad thing for growth companies, but solar is different than most industries. Falling costs create a larger market for the solar industry, but they also create challenges in making enough money to pay off debt.
Falling solar costs are bad for growth
For most businesses, growing volume is the path to long-term growth. But in solar, it can be a path down the rabbit hole, because costs are falling so fast. The phenomenal returns you've projected for that new manufacturing plant or fleet of installations in year one can quickly dry up once the growth train stops.Let's take a solar panel manufacturer as an example. This hypothetical company starts off with a brand-new manufacturing plant that has initial production of 100 MW; over the course of the first four years of operation, that capacity will be increased to 300 MW. Total cost for this plant is $300 million ($1 per watt), and debt used for funding construction has an 8% interest rate.
Assume that the cost of solar panels from the manufacturing plant begin selling for $2 per watt but decline in cost 25% per year and generate a consistent gross margin of 20%.
You can see that in year one the company's gross margin was $40 million, and in year two, that grew 50% to $60 million. But by year five the company was generating less gross margin than ever before and had little hope of increasing margins in the future, because solar costs are going nowhere but down.
If we also assume that operating expenses might be $30 million for this company, we can see the dilemma starting to unfold. $54 million in gross margin would be needed to pay for the $30 million in operating costs and $24 million in interest on the debt, so this company goes from a profit in years two and three to losing $16 million by year five.
This is just an example, but if you look at what happened to companies that built out manufacturing capacity with debt (Suntech Power, LDK Solar, Yingli Green Energy), you'll see similar story lines playing out. Falling costs in the solar industry lead to falling profits unless you have enough volume growth to make up for the lost margin. And growing margins require even more capital investment.
Financial engineering works -- until it doesn't
One way many solar installers got around the growth conundrum I described above is by using financial engineering, particularly on the installer side of the business. If I sign a contract with a customer for 20 years, I can divvy up the contract payments and tax benefits, selling them to different parties and taking a profit along the way. This is what SolarCity has done with tax equity and asset-backed securities.Another method that became popular was funding growth through yieldcos, which could continually issue shares and debt to buy projects. As long as the cost of debt and equity was lower than the returns, these projects providing this structure could go on indefinitely. This is what SunEdison did when acquiring billions of dollars in businesses over the past few years, assuming it could fund acquisitions through its yieldcos.
Both structures make a lot of sense on paper, but they're reliant on strong market sentiment to allow financing to remain open -- and market sentiment can be fickle. When the price of yieldco stocks began to fall, it crushed the thesis that SunEdison could grow indefinitely and just fund projects through its own yieldcos. And when investors started to question how long SolarCity could keep up growth at the margins it promised, and if those margins would ever be realized in the first place, the stock was hit hard.
When you're reliant on financing from third parties to fund growth, then your very business model isn't very self-sufficient. Financial engineering can make solar companies look really good, but until you have the cash in your pocket, the projections these companies put out are just that -- projections. And that's a tough thing to build a business on.
Building a solid foundation is hard
Growth seems like it would be a big advantage in the solar industry, but too often it's been a road to ruin for both companies and investors. Using debt to fund growth built on falling costs and the volatility of businesses built on financial engineering have played a major role in the demise of some of the industry's biggest players.Left standing are SunPower and First Solar, two companies that won't knock over anyone with their growth but that continue to churn out profits year after year. They do this by managing their balance sheets conservatively and by not overinvesting in growth, even when the opportunity in solar seems too big to pass up.
The dislocations happening in high-growth companies have also become an advantage for First Solar and SunPower, which can sell utilities and commercial customers on their stability and long-term viability, which should help to expand their margins above competitors'.
Yieldcos, which were SunEdison's weakness, could be a strength for both companies because they have financing flexibility. Their lack of leverage in the past means they have flexibility to build projects on the balance sheet, sell them to third parties, or sell down to the yieldco at their leisure.
Sometimes a conservative approach wins in the long term, even in high-growth markets. And it looks like those companies that chose to build a fundamental advantage before growing at breakneck speed will be the ones that pay off for investors in the long run.
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IDB approves US$450 million finance package for Latin American climate targets
Nov 27, 2015 | PV - Tech
By Tom Kenning
The Inter-American Development Bank (IDB) has approved US$450 million of financing to initiate an Energy Efficiency Green Bond Facility in the Latin America region.
Earlier this month, the Green Climate Fund (GCF), which channels investment for climate initiatives from public and private sectors, announced that the IDB programme would receive up to $217 million in additional funding.
The new green bond facility aims to support Latin American and Caribbean countries in achieving their INDC commitments, the carbon reduction pledges being made by countries ahead of next week's COP21 climate talks in Paris. Mexico will implement the programme first, followed by the Dominican Republic, Jamaica, and Colombia. The programme will also contribute to the development of capital markets in the region.
IDB’s loan of up to $400 million is complemented by a loan of up to $50 million from the China Co-Financing Fund, which will be administered by the IDB, in relation to the first use of the green bond facility in Mexico.
The facility provides an alternative funding mechanism through the issuance of green asset-backed securities (ABS), in order to encourage environmentally responsible investments.
Amal-Lee Amin, IDB’s climate change and sustainability division chief, said: “The approval of this programme furthers our commitment to supporting Latin American and Caribbean countries in the implementation of their proposed Intended Nationally Determined Contributions (INDCs). Tapping into domestic capital markets for refinancing of energy efficiency is key for increasing scale of investment for de-carbonization over the medium and longer term.”
Gema Sacristan, IDB’s financial markets division chief, added: “This private sector program stands out for its innovative financial approach, involving small and medium enterprises and the potential mobilisation through capital markets of funds from different institutional investors such as pension funds and insurance companies.”
IDB plans to double its climate financing by 2018 through both public and private investments.
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Behind China's Evolution From Climate Deal Holdout to Leader
Nov 30, 2015 | Bloomberg
Back in 2009, China was a reluctant partner during major climate negotiations in Copenhagen that eventually collapsed amid recriminations between rich and poor nations. This time around the world’s biggest polluter is regarded as a driving force behind what could be a comprehensive deal at a world climate summit in Paris.
The change in stance has a lot to do with the record levels of foul air that often hang over China’s major industrialized urban centers, undermining public health. The resulting backlash over the smog has made President Xi Jinping’s government far more serious about combating climate change and investing in cleaner forms of energy.
China’s resolve will be tested along with other countries as world leaders, including U.S. President Barack Obama and China’s Xi, gather in the French capital on Monday. The talks organized by the United Nations are scheduled to run for two weeks and include the biggest ever gathering of leaders on a single day.
The road to Paris for China and others has been in the works for some time.
In March 2014, Chinese Premier Li Keqiang declared war on pollution, telling the National People’s Congress that his government would accelerate efforts to tackle environmental problems. At the same time, China has embarked on a makeover designed to shift its $10 trillion-plus economy away from reliance on big, energy-consuming heavy industries and toward services and consumer spending. For climate deal warriors, both moves have added up to a big and welcome policy shift.
“The fact that you’ve got some countries like China and Russia actively talking about their role is a complete change, so we’ve made tremendous progress,” U.K. Energy and Climate Change Secretary Amber Rudd said in an Oct. 15 interview in London.
The nascent alliance between the world’s two biggest polluters stands in stark contrast to Copenhagen in 2009 where China’s premier at the time, Wen Jiabao, missed a scheduled meeting with Barack Obama, and the U.S. president later forced himself into a meeting of the Chinese with Brazil, South Africa and India in order to get face time with the leaders he felt necessary to forge a lasting deal.Copenhagen Failure
Ultimately, the Copenhagen deal broke down because of opposition from a host of smaller countries, including Sudan, Cuba, Nicaragua, Venezuela and Tuvalu.
Since then, “the United States has invested enormously in a better dialog with China and the other major economies,” former UN climate chief Yvo de Boer, who now heads the Global Green Growth Institute, said in an Oct. 29 telephone interview from Seoul.
China’s engagement this time around has been one of the biggest game changers in the climate story and received a boost when Obama and Xi announced an accord in November 2014 committing to work together to combat the greenhouse gases that result from burning fossil fuels such as oil and coal. As part of the deal, China set a deadline of 2030 for emissions to stop rising. It’s on track to meet that commitment before then, said Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis in Cleveland.
China’s Xi, building on the November 2014 accord with Obama, promised in September that China will start a national pollution-trading system to cut global-warming emissions in 2017. China will also partner with the U.S. on other ways to cut emissions, has pledged $3.1 billion to help developing countries combat climate change and also promised to cut carbon dioxide emitted per dollar of economic output by 60 percent to 65 percent from 2005 levels.
“The fact that the United States and China at the presidential level joined arms and stepped forward in November of last year in the ramp up to 2015 and put forward strong targets together, these two historic antagonists at the presidential level, was a big shot in the arm to the negotiations,” Todd Stern, U.S. special envoy on climate change, told reporters Oct. 23 during a conference call.Caught by Surprise
The November 2014 accord between the U.S. and China, which together emit more than 40 percent of global CO2 pollution, caught many by surprise and is seen by some as a strong signal that Paris could result in a globally binding deal.
“The U.S., China accord in November 2014 was really historic,” former Indian Environment Minister Jairam Ramesh said in an interview last month. “It completely caught India off guard. I knew something was in the works, but I expected it to happen sometime in March 2015. I was completely flabbergasted.”
Ramesh negotiated for India in Copenhagen, but his party was out of power by the time China and the U.S. struck their deal in 2014.
China’s pollution scourge is a public health crisis. Air pollution is killing 4,000 people a day in the country, according to a recent study by Berkeley Earth, an independent research group funded largely by educational grants. The researchers cited coal burning used to produce electricity and heat homes and offices as the likely principal cause.
Much of the drive to do something about emissions in China is borne by the need for action on pollution.Earlier this year, China’s air quality took center stage following the release of a film made by well-known Chinese reporter Chai Jing called “Under the Dome,” a reference to the Stephen King novel of the same name depicting residents of a small town in Maine trapped in a mysterious bubble.Deadly Pollution
The latest reminder came earlier in mid November when residents of northeastern China were enshrouded in some of the worst smog on record with levels of PM2.5, small airborne particles that pose the greatest risk to human health, soaring to almost 56 times the levels considered safe by the World Health Organization in some areas of Shenyang.
Countering climate change “is in line with China’s willingness to solve regional environmental pollution,” Dai Yande, director general of the Energy Research Institute under the National Development and Reform Commission, said in Shanghai in early November. China’s pledges are “very political and challenging.”
China’s energy transformation is also driving its climate aspirations. Where the nation was an afterthought in renewable energy at the time of the last global climate summit in Copenhagen, China is now the biggest player.
“China wants to learn lessons from the Copenhagen talks,” said Li Shuo, a climate policy adviser at Greenpeace East Asia. “As coal consumption slows and renewable energy rises, China has more room in international negotiations,” making the nation more supportive to a climate deal.Renewables Spark
China was the biggest renewables market in the world with 433 gigawatts of generating capacity at the end of 2014, more than double the second place U.S., according to Bloomberg New Energy Finance data.
The Asian nation added more than four times as much clean energy capacity as the U.S. in 2014. Moreover, solar installations have gone from about 300 megawatts in 2009 at the time of Copenhagen to almost 33 gigawatts at the end of 2014 -- a 110-fold increase. China accounts for almost one of every three wind turbines in the world at the moment.
More is to come. The November 2014 accord, and China’s own commitments calls for the nation to get a fifth of its energy from low-carbon sources by 2030. That means adding as much as 1,000 gigawatts of low-carbon emitting energy supplies within the next 15 years, or an amount roughly equal to the total of all electricity currently produced in the U.S.
Coal is also on the wane. New coal plants in some urban areas have already been banned. In March, Beijing vowed to close the last of its major coal-fired power plants next year. According to estimates from Bloomberg New Energy Finance, China could see a net closure of coal plants in the early 2020s.
“Peak demand for coal will happen at some point for China in the future and if anything this year has brought a number of surprises and indicators, whether it’s economic growth or electricity demand consumption,” said Justin Wu, an analyst with Bloomberg New Energy Finance in Hong Kong. “Everything is pointing to the (coal) peaking happening earlier or sooner than even previous estimates.”
The change in China’s position is the result of the nation’s recent pivot to an economic model based on domestic consumption and away from exports and development at all costs, said a French government official, who asked not to be identified in line with policies.
“The unity of economic development and energy growth is now broken,” Michael Liebreich, the founder of Bloomberg New Energy Finance, said in an interview. “The economy can develop and energy can go in a different direction. You can get divergence between economic growth and energy growth, and particularly divergence from fossil energy growth.”Growth Decoupling
China’s service industry is starting to account for a greater percentage of economic output, rising 2.3 percentage points in the third quarter compared with the year earlier, according to data from the National Bureau of Statistics.
As China focuses more on services “energy demand won’t be as big as before and the nation could easily use clean energy installations to meet the growth in energy use rather than coal power," said Lin Boqiang, director of the Energy Economics Research Center at Xiamen University.
To be sure, China remains a voracious consumer of coal regardless of the boom in clean energy. The most polluting fossil fuel still accounts for more than 60 percent of the nation’s total power installations. Some 155 coal-fired power plants, or four per week, have received environmental permits in the first nine months of this year, according to Greenpeace East Asia.
As long as coal is seen as the cheapest form of energy, the fossil fuel may still remain an attractive option for regional governments eager to promote economic development.
And yet, there is every possibility that the move away from fossil fuels and toward a cleaner, greener future could already be anchored too deeply into the model China sees for itself.
China has realized "it needs to transit the economy towards more sustainable growth both from an economic perspective and energy environmental perspective," said Zach Friedman, a Beijing-based adviser to the Institute for Industrial Productivity, a non-profit organization that looks to address industrial energy efficiency to mitigate climate change.
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China learns lessons of past failures ahead of Paris climate talks
Nov 29, 2015 | Financial Times
By Lucy Hornby and Christian Shepherd
Six years ago China was criticised as the spoiler of the climate talks in Copenhagen but this time around in Paris, China vows things will be different.
In a series of highly scripted announcements in the run-up to the conference, which starts on Monday, Chinese President Xi Jinping has aligned his country with the US and the conference’s hosts France in the battle against climate change.
Chief among the commitments was that China’s emissions would peak around 2030, a crucial element of the voluntary agreements made by more than 150 countries that it is hoped will help seal a new global accord on carbon emissions cuts in Paris.
“China learnt its lessons from Copenhagen. It cares about its international image. It knows that it could not afford another failure in Paris,” said Li Shuo, climate change campaigner for Greenpeace.
The refusal of then-premier Wen Jiabao to enter dramatic, last-minute, face-to-face negotiations with other world leaders at Copenhagen was seen as one of the factors for the collapse of the talks in 2009.
What became clear following the failure in Copenhagen, say observers, was that Mr Wen could not personally commit on behalf of China’s consensus-driven leadership and powerful industrial lobbies. This time, Chinese negotiators are on solid ground domestically, with support from both state-owned enterprises and a public fed up with pollution.
“Despite all the noise our two governments have really come a long way,” says Amos Hochstein, US state department co-ordinator for international energy, who has been involved in bilateral talks with China. “We have really transitioned to an era of close collaboration and co-operation in the energy space in a way that wasn’t there just three or four years ago.”
Just as entry into the World Trade Organisation in 2001 helped China restructure its economy into an export powerhouse, Beijing sees a deal in Paris to cut carbon emissions as an opportunity to modernise its inefficient, polluting industries.
China overtook the US as the largest emitter of greenhouse gases in 2006. It will soon pass all other countries and become the largest emitter in history, in large part from the coal that fuelled its rapid economic expansion.
But large-scale investment in nuclear, hydro, solar and wind power will trim coal’s dominant role in the national energy mix. Coal is slated to account for about 62 per cent of China’s energy consumption by 2020, down from the current 64 per cent.
Yang Fuqiang, senior adviser at the Natural Resources Defense Council, says Beijing can achieve about half its emissions cuts simply by eliminating coal-fired industrial boilers.
About half of China’s coal is used for power generation, compared with about 90 per cent in the US, with the rest going to boilers, home heating and other uses. Replacing the boilers would mean hooking up more factories to the national power grid, and it is the prospect of thousands of new electricity customers that has helped persuade state power companies to support the state’s goal of securing an emissions reduction deal.
Political pressure at home tied to dangerously high pollution levels in many of China’s biggest cities has also added urgency to Beijing’s engagement in the global talks. Air pollution is one of the biggest areas of public dissatisfaction among the urban middle class, including government officials, who closely monitor levels of PM2.5, or tiny particles in the air, on smartphone apps.
“No one knew what PM2.5 was six years ago. Now everybody knows. This change offers a lot more room to manoeuvre internationally,” Mr Li said.
Whether the commitments will succeed or fail lies in the hands of the National Development and Reform Commission, the powerful state planning agency to which China’s lead climate negotiator Xie Zhenhua reports.
The NDRC, which leads China’s negotiations with other countries, was responsible for calculating when China’s emissions will peak.
Going into the talks Mr Xie made a plea for politicians to leave the negotiating to negotiators, rather than repeating the mistake in Copenhagen of gathering top leaders alone for a final round of talks, an approach, he says, that spectacularly failed. Mr Xie called the outcome of the Copenhagen talks for China “disastrous”.
Critics say the NDRC’s top-down approach and alliance with inefficient state firms helped to create China’s current problem of overcapacity in heavily polluting industries. They worry that its reliance on rigid economic planning has already locked in coal-fired plants that China will not actually need, prolonging the country’s damaging emissions and inefficient energy use.
However, Zou Ji, deputy director of China’s National Center for Climate Change Strategy, says the need to change the country’s industrial structure and mode of growth ensures it will stay the course to reduce carbon output, no matter what happens in Paris.
“We want Paris to succeed and are pushing for that to be the case, but regardless of whether it does, this is China’s only potential development route. There is no
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China's Major CO2 Emissions Seen Stalling Amid Climate Push
Nov 27, 2015 | BNA Daily Environment Report
By Feifei Shen
China's emissions of carbon dioxide from burning fossil fuels such as oil and gas are forecast to stall this year as the nation installs more clean energy capacity to tackle climate change.
Emissions tied directly to burning fossil fuels, the biggest source of carbon emissions, may rise only 0.24 percent in 2015 from a year earlier, the slowest pace in at least 15 years, according to a Bloomberg New Energy Finance preliminary estimate based on coal consumption data drawn from government customs reports, company production filings and port inventories.
The analysis assumes China's coal use may drop this year by 0.59 percent, slightly offsetting the possibility of a marginal increase in oil and gas demand because of low prices. The small rise in emissions this year compares with growth of 1 percent in 2014.
“The economic slowdown has helped to curb carbon emissions temporarily,” said Lin Boqiang, director of the Energy Economics Research Center at Xiamen University.
The Chinese government is also making its best efforts to cut greenhouse gases, he said.
Clean Energy Rising
The world's biggest carbon emitter is using clean energy sources such as solar, wind and nuclear power to cut its reliance on coal. Chinese President Xi Jinping will join at least 130 heads of government and state, including President Barack Obama, in Paris for global climate talks beginning Nov. 30. The aim of those talks is to reach a globally binding agreement on the climate.
China, the world's second-biggest economy, has become a driving force for a possible deal in the French capital and has promised to cap emissions by 2030 and to cut carbon intensity by 60 percent to 65 percent from 2005 levels.
“The structural change of China's economy is happening faster than people anticipated,” said Sophie Lu, a Beijing-base analyst from Bloomberg New Energy Finance.
Coal consumption in the power industry has declined as clean energy accounts for a larger share of power generation, said Lu.
China's service industry is starting to amount to a greater percentage of economic output, rising 2.3 percentage points in the third quarter compared with the year earlier, according to data from the National Bureau of Statistics.
Coal Production
China's coal production fell 3.6 percent in the first 10 months from a year earlier while consumption of the fossil fuel declined 4.7 percent, according to data from the China National Coal Association.
“Peaking emissions for China before 2030 is not difficult,” Lu said.
Industrial sector emissions are peaking soon and power generation emissions are actually slowing down, she said.
Power usage rose 0.7 percent in the first 10 months of the year, compared with a 3.8 percent increase from the previous year, according to data from the National Energy Administration. Electricity demand in the industrial sector fell 1 percent in the period.
China continues to hold the top position as the best developing country in which to invest in clean energy in a study by Climatescope, a research project whose partners include Bloomberg New Energy Finance and the U.K. Department for International Development.
Investment Destination
In 2014, China added 35 gigawatts of new renewable power generating capacity—greater than all the capacity online today in sub-Saharan Africa's 49 nations combined, excluding South Africa and Nigeria—and attracted $89 billion in all types of new clean energy capital, the report said.
The greater use of clean energy and slowing energy demand are both helping to keep carbon emissions flat, said Tian Miao, a Beijing-based analyst at North Square Blue Oak Ltd., a research company.
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EU Energy Ministers Agree to Plan for Renewables Goal
Nov 27, 2015 | BNA Daily Environment Report
By Stephen Gardner
European Union member states will submit to the European Commission national energy and climate plans by the end of 2019 that will allow monitoring of their progress toward the EU's 2030 goals for greenhouse gas emission reductions and renewable energy, the bloc's energy ministers agreed Nov. 26.
In particular, the plans would enable tracking of progress toward a goal for the EU to meet at least 27 percent of its energy consumption from renewable sources by 2030, the ministers said in astatement following a meeting in Brussels.
EU leaders agreed in October 2014 that the 27 percent goal should be binding on the EU as a whole, but not binding on countries individually, raising questions about how the target would be enforced if some countries are seen to be lagging.
The energy ministers said the national plans would be based on a common template and would contain comparable information about national measures to meet the EU's 2030 climate and energy objectives. The European Commission, the EU's executive arm, should devise indicators so that progress can be measured, the ministers said.
Political Energy Union
Following the submission to the commission of national plans, progress reports should be prepared every two years, while national renewable energy measures should be boosted in order to meet the 27 percent target in case “there is a gap based on the national plans or based on reviewed or updated national plans in the mid-2020s,” the ministers' statement said.
They added that the commission and “neighboring member states in the context of regional cooperation” would be able to comment on the plans of individual countries.
Étienne Schneider, deputy prime minister of Luxembourg, which currently chairs European Union member state ministerial meetings, said the review system would “create the opportunity for the EU and member states to move from the existing technical approach to energy policy to a more integrated and political energy union.”
Helena Gomes, a spokeswoman for the Council of the EU, the institution that represents member states, told Bloomberg BNA Nov. 27 that it was unclear from the ministers' discussions to what extent national energy and climate plans and progress reports would be made public.
‘Preparatory Stage.'
The European Commission will publish in fall 2016 concrete proposals on measures to meet the 27 percent renewables target, while respecting that the target is binding only for the EU as a whole. The commission started a consultation on possible measures Nov. 18.
Speaking after the energy ministers' meeting Nov. 26, EU Climate Action Commissioner Miguel Arias Canete said work on a system to enforce the 27 percent renewables goal was at a “preparatory stage.”
The EU also has a goal to reduce greenhouse gas emissions by 40 percent by 2030 compared to 1990, which will be achieved by tightening up the EU emissions trading system (ETS) and by measures covering sectors that do not participate in the ETS, such as agriculture and construction.
The commission has said it will publish proposals for non-ETS sectors, including per-country non-ETS emission reduction targets, before summer 2016.
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'No Planet B,' marchers worldwide tell leaders before U.N. climate summit
Nov 29, 2015 | Reuters
More than half a million people from Australia to Paraguay joined the biggest day of climate change activism in history on Sunday, telling world leaders gathering for a summit in Paris there is "No Planet B" in the fight against global warming.
In the French capital, where demonstrations were banned by the authorities after attacks by Islamic State militants killed 130 people on Nov. 13, activists laid out more than 20,000 shoes in the Place de la Republique to symbolize absent marchers on the eve of the summit.
Among the high heels and sandals were a pair of plain black shoes sent by Pope Francis, who has been a vocal advocate for action to prevent dangerous climate change, and jogging shoes from U.N. Secretary-General Ban Ki-moon.
One activist, dressed in white as an angel with large wings, held a sign saying "coal kills". About 10,000 people joined arms to form a human chain through Paris along the 3-km (2-mile) route of the banned march, organizers said.
ARRESTS IN PARIS
French police detained scores of protesters after violent clashes in central Paris on Sunday though, a day before the official start of conference that aims to tackle global warming.
Riot police used tear gas to disperse about 200 protesters, some of them masked, who responded by hurling rocks and even candles. French President Francois Hollande accused the violent protesters of dishonoring the memory of the dead.
The U.N. climate change conference is taking place at Le Bourget just outside Paris. Initial talks among negotiators began on Sunday.
PROTESTS AROUND THE WORLD
More than 2,000 events were held in cities including London, Sao Paulo, New York and Asuncion, Paraguay, on the eve of the Paris summit which runs from Nov. 30-Dec. 11 and will be attended by about 150 heads of government.
About 683,000 people attended the rallies around the world, said Sam Barrat, a spokesman for Avaaz, one of the organizers.
"And this was done even without Paris," after the March there was banned, he said,
Around the world, activists marched, dressed as polar bears or penguins at risk from melting ice, or chanted slogans such as "climate justice".
Organizers said that 570,000 people so far had taken part in rallies worldwide and that they expected demonstrations including in Ottawa and Mexico City later in the day to push the count above 600,000.
"These are the biggest set of global marches in history," said Sam Barratt at Avaaz.
There was no independent verification of the numbers, although none of the individual marches rivaled one in New York last year that drew an estimated 310,000 people.
In Sydney, about 45,000 people are estimated to have marched through the central business district toward the Opera House. Protesters held placards reading: “There is no Planet B,” and “Say no to burning national forests for electricity”.
In London, organizers said 50,000 marchers were joined by fashion designer Vivienne Westwood, actress Emma Thompson and opposition Labour leader Jeremy Corbyn, who said the turnout was especially impressive for a wet November Sunday.
In New York, hundreds of people, many of them holding signs calling for aggressive measures to stop global warming, marched around the perimeter of New York City Hall in lower Manhattan.
OBAMA AND XI JINPING IN PARIS
U.S. President Barack Obama and China's Xi Jinping will be among the leaders attending the start of the summit, which organizers hope will produce a legally binding agreement to commit both rich and developing nations to curbing emissions of greenhouse gases, blamed for warming the planet, beyond 2020.
Hopes are high that the Paris summit will not fail like the previous such meeting six years ago in Copenhagen.
Popular and political momentum for tougher action on carbon emissions has accelerated in recent years, with 2015 set to be the warmest on record. Activists are seeking to combat everything from Beijing’s smoggy skies to Canada’s Keystone oil pipeline.
Saiba Suso, a 26-year-old demonstrator in Paris, said the poor were most at risk: "We are paying the price and we are not the cause. The industrialized countries owe us a lot."
Still, all sides say pledges made in Paris will be insufficient to limit a rise in global temperatures to 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels, widely viewed as a threshold for dangerous changes in the planet's climate system.
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India Confident of Prevailing in Solar Dispute
Nov 27, 2015 | BNA Daily Environment Report
By Nayanima Basu
The Indian government is confident that it will win the solar panel dispute case against U.S. at the World Trade Organization and is gearing up to move forward on its solar efforts, a senior government official told Bloomberg BNA.
The Dispute Settlement Body (DSB) is expected to release its final report in December.
A WTO panel looking into this dispute reportedly ruled against India in August, stating that it has violated world trading norms due to insistence on local content requirement. The WTO refused to confirm the panel's findings and said the details of a confidential report, which had been sent to the two parties on Aug. 2, would not be made public until later this year(171 DEN A-12, 9/3/15).
The U.S. in 2014 filed a WTO complaint alleging that India domestic sourcing requirements violated international trade rules and unfairly discriminated against imported solar cells and modules. The U.S. said India violated WTO's Agreement on Trade-Related Investment Measures (TRIMs).
India has a strong case to take on the U.S. at the WTO, a senior official told BNA. Prime Minister Narendra Modi is pushing an ambitious solar program, known as the Jawaharlal Nehru National Solar Mission, to raise India's solar power generation capacity to 100 gigawatts by 2022 from 4 gigawatts presently.
“India is basing its confidence on the diplomatic ties,” the official said adding that U.S. officials have assured India of the outcome during the U.S.-India Strategic and Commercial Dialogue (S&CD) held in September.
The Jawaharlal Nehru National Solar Mission also came up for discussion during the last bilateral meeting between Modi and President Barack Obama in September, the senior official said.
India is aiming at building a global clout. At the G-20 Summit on Nov. 15-16 in Turkey, Modi pushed for a global fund of $100 billion a year for development of clean energy.
“At G20, we can play an effective role in supporting the multilateral goals of increasing research and development to develop affordable renewable energy. We must also ensure finance and technology is available to meet the universal global aspiration for clean energy … We must meet the target of $100-billion goal per year by 2020,” Modi stated at the summit.
Modi may take up the issue again with President Obama on Nov. 30 when the leaders meet in Paris for the United Nations climate conference, another government official told Bloomberg BNA.
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German government set for U-turn over plan to scrap storage incentive
Nov 27, 2015 | Recharge
By Bernd Radowitz
In a reversal of earlier plans by energy minister Sigmar Gabriel, Germany's government is preparing to extend an incentive programme for PV storage systems, but in a modified form, according to legislators and the energy ministry.The programme, supported by subsidised loans from German development bank KfW and introduced in 2013, is scheduled to run out at the end of this year.
In a letter to lawmakers much criticised by the solar sector, Gabriel earlier this month had said he plans to end the successful programme as it already had fulfilled its purpose of supporting a market introduction of PV battery storage.
But as the German PV industry is just in the course of recovery and the power market in the need of flexibility options, the economics ministry is intensively discussing incentives for battery-based storage, Social Democratic (SPD) lawmaker Thomas Jurk said in parliament on Thursday.
"The result will probably be a new programme that is adapted to current requirements of the electricity market," he said during a speech.
The SPD is the junior coalition partner in the government of Chancellor Angela Merkel, a Christian Democrat (CDU). The energy ministry confirmed to Recharge that it is working on a modified programme, but couldn't tell yet for how long it will be in effect, or when exactly it will kick in.
Julia Verlinden, a member of parliament from the opposition Green Party, welcomed the turnaround, and stressed that thanks to 10,000 storage systems aided by the current incentive programme prices for domestic electricity storage have already fallen by 25%.
"Each euro from the incentive programme mobilises seven euros in investments," Verlinden said.
Germany's solar federation BSW had also lobbied for a continuation of the scheme that costs tax payers a mere €25m ($26.5m) per year.
"Germany now has a chance to expand on its system leadership in this giant global market of the future," BSW managing director Carsten Körnig says.
The BSW in recent weeks had called upon lawmakers to extend the incentive programme for another three years.
The German storage programme is one of only a few public programmes across the world to support solar storage, and has been hailed as a success by increasingly successful Germany-based storage specialists such as Younicos.
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Dubai to make rooftop solar mandatory in 2030
Nov 29, 2015 | PV - Tech
By John Parnell
Dubai has launched an ambitious new energy strategy, which includes a provision to make rooftop solar mandatory from 2030.
The Dubai Clean Energy Strategy 2050 also sets a renewable target of 75%, with intermediate goals of 7% by 2020 and 25% by 2030. These objectives speed the pace of the emirate’s transition from a previous 15% target for 2030 set in January of this year.
The utility-scale Mohammed bin Rashid Al Maktoum Solar Park has also been increased in size, first from an initial 1GW to 3GW earlier this year, and now to 5GW by 2030. The tender process for 800MW of capacity is currently underway. Total investment in the site is estimated by state utility DEWA to be AED50 billion (US$13.6 billion).
A free trade zone, the Dubai Green Zone, will also be established to encourage clean technology firms to move to the city.
Work with IRENA and research and development institutes to establish training programmes in the emirate together with the establishment of a flagship clean tech innovation centre will be used to create jobs in the emirate.
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