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SFCE Dec 16
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China’s State Power Investment Corporation to Buy Renewable Energy Company
Dec 15, 2015 | The New York Times - DealBook
By Amie Tsang
China’s State Power Investment Corporation agreed on Wednesday to buy Pacific Hydro, a renewable energy company, from the Australian pension fund IFM Investors for an undisclosed price. Pacific Hydro has electric and wind facilities in Australia, Brazil and Chile, and it will be added to the Chinese company’s roster of assets in 35 countries. -
BNEF: ITC extension may lead to more pressure on net metering
Dec 16, 2015 | PV Magazine
By Jonathan Gifford
Unintended consequences are frequently a feature of policy and legislative support of the PV industry. The likely extension of the ITC could well result in another, with utilities incentivized to acquire or develop more utility scale PV in the U.S., while stepping up their efforts to wind back net metering regimes supporting residential solar... -
ITC Extension Could Provide Solar Industry Bridge To Clean Power Plan
Dec 15, 2015 | PoliticoPro
By Eric Wolff and Esther Whieldon
Congress may throw solar developers a lifeline some say they need to thrive over the next several years until EPA rules kick in and boost demand for their carbon-free power. Democrats are demanding at least a five-year extension to the investment tax credit in exchange for a GOP push to lift the oil export ban as part of a year-end spending and tax... -
Solar industry declares victory in California net metering battle
Dec 16, 2015 | PV Tech
By Ben Willis
California’s utility regulator has ruled that the state’s flagship net metering regime will be maintained in broadly its current form beyond 2017, in what is being hailed as a major victory for the pro-solar lobby. The California Public Utilities Commission (CPUC) yesterday issued its long-awaited decision on what some have ... -
DOT Extends Contract With Solar Pavement Company
Dec 15, 2015 | E&E News PM
By Ariel Wittenberg
Hoping that a futuristic pavement made from solar panels could become cost-effective, the Department of Transportation has decided to continue its contract with Solar Roadways. DOT has been working with the Sandpoint, Idaho-based company to develop pavement that can harness solar energy and transfer it to the grid since the two... -
California Proposal Keeps Home Solar System Payments
Dec 16, 2015 | BNA Daily Environment Report
By Mark Chediak
California rooftop solar users will continue to get paid for their excess green energy under a proposed ruling that is seen as a bellwether of how the rest of the country deals with the rapid emergence of power generated by customers. New solar users would pay a connection fee of about $75 to $150 and other charges to fund low-income... -
Report back from Paris: What the new climate deal means – and where we go from here
Dec 15, 2015 | Environmental Defense Fund
By Nat Keohane
The United Nations climate agreement in Paris, and the intense negotiations leading up to it, were a breakthrough in a number of important ways. First of all, the agreement represents the coming of age of climate diplomacy. It was evident from the beginning that French Foreign Minister Laurent Fabius, who chaired the talks, had the full trust... -
San Diego Vows to Move Entirely to Renewable Energy in 20 Years
Dec 16, 2015 | The New York Times
By Matt Richtel
Last weekend, representatives of 195 countries reached a landmark accord in Paris to lower planet-warming greenhouse gas emissions. On Tuesday, local leaders in San Diego committed to making a city-size dent in the problem. With a unanimous City Council vote, San Diego, the country’s eighth-largest... -
2016: Time For Energy To Reinvent Itself?
Dec 15, 2015 | Forbes
By Tara Schmidt
Picture this: a world powered on renewable energy. A breakthrough in battery technology propels solar and wind to become the most competitive energy sources, everywhere. Everyone powers their homes, businesses and industries with renewables, while transport goes electric. The energy companies that thrive are the ones that went green...
Industry News
Full Text of Stories Below
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China’s State Power Investment Corporation to Buy Renewable Energy Company
Dec 15, 2015 | The New York Times - DealBook
By Amie Tsang
China’s State Power Investment Corporation agreed on Wednesday to buy Pacific Hydro, a renewable energy company, from the Australian pension fund IFM Investors for an undisclosed price.
Pacific Hydro has electric and wind facilities in Australia, Brazil and Chile, and it will be added to the Chinese company’s roster of assets in 35 countries. State Power, or SPIC, was formed from a merger of China Power Investment Corporation and State Nuclear Power Technology Corporation and has interests in logistics and coal power.
“The acquisition of Pacific Hydro will add a high quality global renewable development platform to SPIC,” Wang Binghua, the chairman of State Power, said in a news release.
Kyle Mangini, the global head of infrastructure at IFM Investors, said the fund had “invested heavily in growing the business over the last 10 years.”
“We are not surprised with the level of buyer interest in the business and are particularly pleased that Pacific Hydro is transitioning to an owner of the quality of SPIC, who will continue the path of growth and excellence,” he added.
The deal is expected to be completed in the first quarter of next year. Previous reports have said the deal would be worth $2 billion to $3 billion.
Santander Global Corporate Banking and King & Wood Mallesons advised State Power. Credit Suisse, Merrill Lynch and Herbert Smith Freehills advised IFM.
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BNEF: ITC extension may lead to more pressure on net metering
Dec 16, 2015 | PV Magazine
By Jonathan Gifford
Unintended consequences are frequently a feature of policy and legislative support of the PV industry. The likely extension of the ITC could well result in another, with utilities incentivized to acquire or develop more utility scale PV in the U.S., while stepping up their efforts to wind back net metering regimes supporting residential solar in various markets throughout the country.
“My initial reaction was ten explanation marks one after the other,” commented Jenny Chase, head of Bloomberg New Energy Finance’s (BNEF) solar team. “My second thought was that if this is going to be a solar boom to end all solar booms, something else will come into solar’s way and maybe this is net metering. The result would be great for the utility sector as utilities will buy solar because it fits the load profile, but they will want to step up the net metering war.”
Proponents of net metering in California scored a considerable win yesterday with the a proposed decision issued today by the California Public Utilities Commission (CPUC) recommending that the basic features of net metering be maintained after 2017, with some minor modifications.
In terms of the ITC, BNEF's Chase noted that it has commonly been the case that solar support regimes that provide a stable subsidy system for longer than two years, as the proposed ITC extension does, they have been changed before the program has expired as planned.
“Although this is a Capex subsidy and not a FIT so it is likely more stable because if the Capex comes down the cost to the government will come down as well,” said Chase. “Even as it stands U.S. Capex for solar projects is much higher than global levels, in the residential sector it is 30% above global levels.”
The proposed ITC extension, included in a wide-ranging supply bill currently before Congress, would see the Capex support measure maintained at 30% through to 2020, before stepping down to 26% in that year, then 21% in 2021 and beyond that at 10%, as a “permanent” measure.
On Twitter, SunEdison co-founder and solar evangelist Jigar Shah congratulated SEIA’s Rhone Resch on achieving “the perfect deal”.
In terms of developers, BNEF’s Chase concludes that the ITC extension would be good news for “the usual suspects”, including First Solar, SunPower, SunEdison and First Solar, along with Scatec Solar and construction companies such as Bechtel.
On the module supply front, Trina is well positioned to benefit from an ITC extension through its announced Indian production plans, along with other suppliers with capacity outside of China such as SolarWorld, Jinko, Canadian Solar, Yingli and Hanwha Q Cells.
“For the solar industry it is a great result as it means more money will be sloshing around,” remarked Chase. “Whether it's the optimal result from a very long term policy perspective is unclear to me. A more gradual step down might have had some advantages in enforcing U.S. installer and supply chain optimization.”
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ITC Extension Could Provide Solar Industry Bridge To Clean Power Plan
Dec 15, 2015 | PoliticoPro
By Eric Wolff and Esther Whieldon
Congress may throw solar developers a lifeline some say they need to thrive over the next several years until EPA rules kick in and boost demand for their carbon-free power.
Democrats are demanding at least a five-year extension to the investment tax credit in exchange for a GOP push to lift the oil export ban as part of a year-end spending and tax package taking shape on Capitol Hill. That would keep the 30 percent credit in place at its current level past 2017, when it is scheduled to disappear for residential projects and see its value fall to 10 percent for others. The wind production tax credit, which expired last year, is also expected to see a five-year extension as part of a package, and both credits could be gradually phased out.
Details remained in flux ahead of the omnibus package's expected release Tuesday night. But Senate Democrats made clear that substantial renewable incentives would be necessary for enough of them to agree to back oil exports as part of an overall package.
"So all of these negotiations require a realistic pathway to the Clean Power Plan and beyond to make sure that wind and solar can compete and provide the new low carbon energy sources for our country,” Sen. Ed Markey (D-Mass.) said, referring to the EPA carbon rules.
Solar industry supporters say losing the ITC would be devastating, but opponents point to a rapid drop in solar costs to argue that the industry has matured to the point where it no longer needs federal incentives. Sources say Democrats have demanded at least a five-year extension as part of the year-end package.
Five years could be enough for the industry to keep growing until its cavalry arrives in the form of the EPA rules, which would allow states and utilities to shutter coal-fired power plants in favor of carbon-free sources like wind and solar, assuming it survives in court and is not thrown out by a future president. Compliance begins in 2022, but EPA is offering additional incentives to encourage states to start implementing clean energy policies as soon as 2020.
At the same time, solar costs are dropping fast, and they may achieve parity with conventional power by then, even without the tax credit, some experts said. A gap between the ITC's expiration and the Clean Power Plan compliance period could slow the pace of solar development, but a five-year extension may plug the hole. Solar is on par with traditional energy sources in parts of the country, and would become more competitive with such an extension, said Ethan Zindler, an analyst with Bloomberg New Energy Finance.
"We think prices of solar will continue to decline, and we think solar will be more economically competitive, and that does coincide with where the Clean Power Plan kicks in," Zindler said. "And we think it coincides with improving solar economy."
The solar industry says the tax credit is at least partly responsible for its rapid growth. Since 2006, when the ITC was enacted, solar has created 150,000 jobs, installations have grown by more than 7,800 percent, and the industry has injected $70 billion into the U.S. economy, according to the Solar Energy Industries Association. At the same time, solar costs have fallen from $12 per installed watt in 1998, to less than $4 last year, according to a report from Lawrence Berkeley National Labs.
Opponents say that track record shows the industry has matured and no longer needs federal support.
"Even people who believe in a stronger role for government should see these subsidies and promoting policies have been successful already," said Catrina Rorke, director of energy policy and a senior fellow at the R Street Institute, a free-market group. "How much more do we need? There has to come a time that we cut them off."
At least one developer agrees with that line of criticism. John Berger, CEO of residential solar company Sunnova, broke ranks with the rest of the industry to lobby against extension of the ITC.
"It's going to go away eventually, so instead of extending it for three or four years for no apparent reason, let's do it now," Berger said. "There will be a short period of time that's painful, but the money will eventually say, hey there's real money out there in solar."
Solar installations would fall by 70 percent from 2016 to 2017 if the ITC expired, according to a September forecast from Bloomberg New Energy Finance, with much of the decline coming from utility scale solar. But by 2022, capacity would be down just 10 percent, according to the forecast.
"We basically think at that point, the solar getting increasingly cost competitive in more markets by then," Zindler said.
The industry has come to depend on the ITC to secure "tax equity financing" from lenders. Under these deals, banks and a few other institutions with sufficiently large tax bills provide loans to solar developers in exchange for the tax credit and some return on capital. Deals using tax equity reached $4.5 billion in 2014, with more expected this year, according to the September Project Finance NewsWire.
The loss of the ITC would wipe out that form of financing, forcing parts of the industry to reconfigure their business models and lay off workers, industry supporters say. But a five-year reprieve from Congress could bridge the gap to the Clean Power Plan.
"The Clean Power Plan is going to provide some certainty in terms of the viability of solar going forward, but that might lacking if the ITC goes away. So a short term extension might provide a bridge," said Michael Ferguson, an associate director with Standard & Poor's.
If the credit disappears or steps down on schedule next year, smaller companies could go out of business, and cost declines would not continue along their current trajectory, potentially complicating future policy decisions, said David Burton, a tax attorney and partner at Akin Gump.
For lawmakers, it’s “kind of a question of what's your tolerance for how much you want to see the market decline and smaller and less well capitalized parties forced to exit," Burton said. “To the extent they want to be serious about a renewable portfolio standard, that standard becomes much more expensive. The Clean Power Plan also becomes much more expensive without the tax credits."
Some industry supporters wonder whether five years would be enough — especially given broader uncertainty around the future of the Clean Power Plan and its early-action incentives.
"While a short term ITC extension is better than no extension, it is unclear whether future incentives ... will provide the necessary indirect subsidy to help solar developers reached cost parity in all energy markets around the country,” said Cameron Prell, counsel with Crowell & Moring LLP.
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Solar industry declares victory in California net metering battle
Dec 16, 2015 | PV Tech
By Ben Willis
California’s utility regulator has ruled that the state’s flagship net metering regime will be maintained in broadly its current form beyond 2017, in what is being hailed as a major victory for the pro-solar lobby.
The California Public Utilities Commission (CPUC) yesterday issued its long-awaited decision on what some have dubbed the state’s ‘net metering 2.0’, the replacement to the current regime that is due to expire in 2017.
Utility companies in the state had been pushing for net metering payments to solar customers to be slashed, but the CPUC has ruled that they will continue to be paid at retail rates.
However, net metering customers will be subject to a series of new charges and rules, which solar companies have opposed and which industry advocates vowed to seek to modify in the final version of the new policy.
One of these is an interconnection fee paid by net metering customers ranging from US$75-100 depending on the utility and system size.
NEM customers will also be required to pay so-called non-bypassable charges on a large proportion of the power they generate.
Another change is the shift to compulsory time-of-use rules after 2018, under which tariff rates paid to NEM customers vary according to the time of day.
Aside from the pending step-down of the investment tax credit, the future of California’s net metering regime had arguably been the most significant regulatory debate taking place in the US. The state’s distributed solar market is by some margin the largest in the US and observers had previously suggested the CPUC’s decision would shape the outcome of other net metering battles taking pace in the US.
“[California] Governor Brown’s PUC is standing up for clean power and for customers by proposing to reject the utilities’ attempts to make solar out of reach for customers,” said Bernadette Del Chiaro, executive director of the California Solar Energy Industry Association (CALSEIA).
CALSEIA said it would work with authorise to improve measures outlined in the proposed new regime, such as the new charges and time-of-use rules. For example said the time-of-use rates would make it harder for NEM customers to predict the savings solar makes to their energy bills.
“Although we don’t like everything in the proposed decision, it is a fair compromise that will maintain the opportunity for customers to go solar,” said the body’s policy director, Brad Heavner. “It is consistent with Governor Brown’s strong commitment to transforming our energy system into one that is based on clean, local power.”
Lyndon Rive, CEO of leading installer SolarCity, welcomed the decision but described the time-of-use charge as “concerning”.
“As we saw in 2007 when time-of-use rates were briefly mandated for solar customers, they don’t work for everyone who wants to go solar, and would reduce the motivation for installing solar. While these rates can send helpful signals about when to use electricity, we urge the PUC to closely examine the impacts of mandating time-of-use rates.”
In a statement, utility San Diego Gas & Electric, one of the utilities that had been pushing for NEM tariffs to be slashed for solar customers, said: “We are disappointed that today’s proposed decision on the rooftop solar subsidy does not address the growing cost burden among our customers. Workable solutions must be developed to create a future where all customers can receive benefits.
“Today’s decision fails to recognise what consumer advocates and the utilities have already confirmed: we need to continue to support the growth of solar energy AND new rooftop solar rules that don’t require non-solar customers to pay over US$160 million additional per year – US$100 per family on their electricity bill. People shouldn’t be penalised with higher electric bills just because they are unable to afford or accommodate solar on their rooftops.”
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DOT Extends Contract With Solar Pavement Company
Dec 15, 2015 | E&E News PM
By Ariel Wittenberg
Hoping that a futuristic pavement made from solar panels could become cost-effective, the Department of Transportation has decided to continue its contract with Solar Roadways.
DOT has been working with the Sandpoint, Idaho-based company to develop pavement that can harness solar energy and transfer it to the grid since the two entered into a "proof of concept" contract in 2009. In 2011, DOT awarded the company another contract to develop and test pavement.
That contract is now being extended, according to a post on DOT's Fast Lane blog by Federal Highway Administration research and technology director Michael Trentacoste and Volpe National Transportation Systems Center Director Robert Johns.
"Everyone was encouraged by the results of the initial prototype pavement testing," the pair wrote on the blog yesterday.
Solar Roadways' pavement is made from hexagon-shaped solar panels that would generate electricity to power streetlamps and tolls, as well as in-road heating systems that could melt snow and ice. The solar panels could also reduce road maintenance costs by eliminating the need to repave asphalt and could "ultimately transform the nation's roadways into an intelligent pavement system," Trentacoste and Johns wrote.
Solar Roadways' biggest problem: production costs, which are high because its specially shaped solar panels are currently handmade.
In its extended DOT contract, Solar Roadways aims to refine its production line to lower costs, according to the blog post.
Even if the technology proves too expensive for widespread installation, Trentacoste and Johns wrote, it is still a worthwhile investment for DOT.
"Because this idea offers the ability to melt snow on the roadway or keep water from freezing, even if the cost for comprehensive highway implementation is too high, this innovation could still be useful in smaller areas such as parking lots, sidewalks, driveways and bike lanes," they wrote.
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California Proposal Keeps Home Solar System Payments
Dec 16, 2015 | BNA Daily Environment Report
By Mark Chediak
California rooftop solar users will continue to get paid for their excess green energy under a proposed ruling that is seen as a bellwether of how the rest of the country deals with the rapid emergence of power generated by customers.
New solar users would pay a connection fee of about $75 to $150 and other charges to fund low-income and energy efficiency programs, according to a filing by an administrative law judge at the California Public Utilities Commission. The charges would amount to about 2 cents to 3 cents per kilowatt-hour of energy consumed and have a $5 a month impact on bills, said Sara Kamins, supervisor of customer generation programs at the CPUC.
Rules that allow for the sale of this energy, known as net metering, have been adopted by more than 40 states and have become the single most important driver of growth for the rooftop solar business, according to Sanford C. Bernstein & Co. Under net metering, utilities are required to buy power from consumers’ home-solar systems. The policy can eat into sales of power distribution companies, which have increasingly viewed it as a threat to their businesses.
The new California fees and charges appear to be less than those proposed by utilities. PG&E Corp. had asked regulators for changes that would be between $13 and $29 monthly for a typical prospective solar customer planning to install a 3.0 kilowatt solar system, the company has said.
“The California Public Utilities Commission issued a strong proposed decision today that, if adopted, would uphold net metering in California for future solar customers,” Susannah Churchill, regional director for advocacy group Vote Solar, said in a statement.
Utilities Seek Higher Fees
California utility owners PG&E, Edison International and Sempra Energy have asked the state to increase fees and cut payments to power-generating customers, arguing that customers who don't have solar shouldn't subsidize those who do. They've also said the program needs to better reflect the value of the power and the cost of upgrading the grid to handle it.
Rooftop solar installers including SolarCity Corp. and Sunrun Inc. say the utilities’ proposals threaten to undermine the economics of their systems.
The proposed decision “falls well short of what is needed to ensure sustainable growth of solar,” PG&E said in a statement. Maintaining the existing incentives for rooftop solar would increase bills for non-solar customers by $45 a month by 2025, the utility said. Most of PGE's customers can't adopt rooftop solar because they rent, live in apartment buildings or have homes poorly situated for solar panels, the utility said.
“Some solar company executives will say that the sky is falling if we make any changes, but the truth is that solar's bright future will only be assured by moving with smart energy reform,” Steve Malnight, PGE's senior vice president of regulatory affairs, said in a statement. “Solar is too important to our state's energy future not to get it right.”
Solar Industry Praises Decision
“Gov. [Jerry] Brown's PUC is standing up for clean power and for customers by proposing to reject the utilities' attempt to make solar out of reach for customers,” Bernardette Del Chiaro, executive director of the California Solar Energy Industry Association, said in a statement.
While the proposed decision would maintain net metering with credits valued at a customer's full retail rate, it also would make changes that solar companies have opposed. Del Chiaro said her organization would work to improve those provisions, which call for a new fee in 2019 on solar customers to collect utility program charges on a larger portion of the bill and impose mandatory time-of-use rates for solar customers in 2018.
“Time of use rates create an economic incentive to reduce peak electricity, invest in storage and better align solar generation with grid needs,” Evan Gillespie, director of the Sierra Club's My Generation campaign, said in a statement. “A thoughtful, gradual transition to time of use rates for solar customers will enable the market to continue growing rapidly,” he said.
The California PUC proposal is scheduled to be voted on at the agency's meeting on Jan. 28.
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Report back from Paris: What the new climate deal means – and where we go from here
Dec 15, 2015 | Environmental Defense Fund
By Nat Keohane
The United Nations climate agreement in Paris, and the intense negotiations leading up to it, were a breakthrough in a number of important ways.
First of all, the agreement represents the coming of age of climate diplomacy. It was evident from the beginning that French Foreign Minister Laurent Fabius, who chaired the talks, had the full trust and confidence of the room.
He artfully identified a zone of agreement among 196 delegations that gave nearly everyone something they wanted without crossing red lines.
The agreement was also the culmination of months of bilateral diplomacy at the highest levels, most visibly between the U.S. and China. The direct involvement of President Obama and other world leaders was critical to success – and shows a strategic savvy and leader-level involvement that we haven’t seen in past climate talks.
But it’s the language of the agreement itself, and the broad backing it received, that makes it such a big deal. It means that we now have a chance – not a guarantee, but a chance – to put the world on a healthier path. What COP21 achieved
We know that the COP21 commitments so far will not deliver all the emissions reductions we need. That’s why the heart of the deal is the process it establishes to review countries’ progress toward meeting their commitments, and to ratchet up ambition over time.
The Paris deal: Lays out a common, transparent, and legally binding framework for countries to report their emissions regularly and undergo a technical expert review. Includes regular assessments and strengthening of commitments every five years, beginning in 2020. Includes strong provisions against double-counting of emissions reductions, to make sure that every ton of emissions reductions is only counted once — a critical safeguard for environmental integrity.
That strong framework for transparency and review is critical because it will provide the accountability needed to keep pressure on countries to meet their commitments. And it will send a strong signal to energy producers, world markets and governments that the future lies in clean energy.
As a result, it will drive investments, policy choices and a fundamental shift in decision-making. As an economist, I’ve seen it over and over again: Once strong rules are in place, the money follows.
188 countries, 99% of emissions onboard
Critics have complained that the deal does not penalize countries that don’t meet their emission targets. But the greater flexibility inherent in that non-binding approach made possible the most striking aspect of the Paris outcome: the broad participation underlying the agreement.
As of today, 188 countries covering almost 99 percent of global emissions have submitted commitments to take action on climate. Joining them were more than 120 states, provinces and cities that made strong commitments of their own – along with many of the world’s largest companies.
The Paris conference did not create this wave of momentum on climate action – but it will provide an important boost to keep it going. With an eye toward markets
The unsung hero of the agreement, meanwhile, is a set of provisions that encourages the use of markets to drive up investment in clean energy and drive down pollution.
You won’t find the word “markets” in the text. But that is what the agreement is referring to, when it lays out clear rules for “cooperative approaches that involve the use of internationally transferred mitigation outcomes.”
By affirming a role for this powerful tool, the agreement recognizes the realities already on the ground, where emission trading systems are already at work in more than 50 places that are home to nearly 1 billion people.
What’s more, the deal strikes the right balance between “bottom-up” and “top-down.” Carbon markets will continue to be driven and shaped by national priorities. The UN’s role will be limited to providing clear guidance to ensure that when countries choose to use markets internationally, the emissions reductions are correctly tracked and accounted for.
The role of markets may not be in this week’s headlines – but a decade from now, it will be one of the enduring legacies of Paris.
Next: Keeping up the pressure
Over the course of the two-week long conference, I and my colleagues from Environmental Defense Fund walked the halls and worked the delegation rooms, talking with reporters, negotiators and fellow activists.
We pushed for accountability, transparency, forest protection, an opening for markets, regular strengthening of national commitments – and, above all, for an agreement that would actually make a significant difference for the climate.
Together, we made progress because the nations of the world – developed and developing, north and south, large and small – moved beyond the old excuses for delay and pledged substantial cuts in the pollution that is damaging our climate.
When Fabius finally brought the gavel down on Saturday evening, formally adopting the agreement, I was sitting with hundreds of other attendees in a packed meeting room at the conference site, watching on closed-circuit TV.
We were bone-tired after a week of late nights and little sleep, but the mood was ebullient.
Three days later, the exhaustion has begun to fade. But the ebullience remains, along with the sense that we were witness to a transformative moment.
Now it’s up to all of us to keep up the pressure on nations – and to deliver on the promise of the Paris agreement.
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San Diego Vows to Move Entirely to Renewable Energy in 20 Years
Dec 16, 2015 | The New York Times
By Matt Richtel
Last weekend, representatives of 195 countries reached a landmark accord in Paris to lower planet-warming greenhouse gas emissions. On Tuesday, local leaders in San Diego committed to making a city-size dent in the problem.
With a unanimous City Council vote, San Diego, the country’s eighth-largest city, became the largest American municipality to transition to using 100 percent renewable energy, including wind and solar power. In the wake of the Paris accord, environmental groups hailed the move as both substantive and symbolic.
Other big cities, including New York and San Francisco, have said they intend to use more renewable energy, but San Diego is the first of them to make the pledge legally binding. Under the ordinance, it has committed to completing its transition and cutting its greenhouse gas emissions in half by 2035.
The steps to get there may include transferring some control of power management to the city from the local utility. Officials said they would also shift half of the city’s fleet to electric vehicles by 2020 and recycle 98 percent of the methane produced by sewage and water treatment plants.
The mayor, Kevin L. Faulconer, said San Diego’s ocean, sunshine and other environmental attributes were “in our fabric, our DNA, who we are.”
The City Council is controlled by Democrats, but Mr. Faulconer is a Republican. He sold the plan to a conservative business base in part by saying that transforming the electric grid would drive the economy and create jobs.
“It’s not a partisan issue at all,” he said. “It’s about putting a marker down. It’s the right thing to do.”
Many details have yet to be determined, including how the new power sources will be delivered and managed. But the mayor said the key first step was to commit to a goal — to “make sure we set it and hold to it.”
The San Diego ordinance has been years in the making. But Nicole Capretz, an author of an earlier draft and now an environmental advocate, characterized it as a concrete step in the direction set by world leaders in Paris.
“We’re responding to that call,” Ms. Capretz said. “It’s up to cities to blaze new trails. We’re just laying out the pathway for how to get these massive reductions worldwide.”
Under the Paris accord, nations offered general, nonbinding plans to reduce their carbon emissions.
Officials in the United States envision reaching the nation’s goals mainly through higher fuel-economy standards for cars and a move to cleaner sources of electrical power, something states could help oversee.
This is where the actions of a city like San Diego fit in. As the city moves to renewable energy, the State of California can begin to build its bank of carbon reductions and contribute to global goals.
Evan Gillespie, director of the Sierra Club’s clean energy campaign in California, estimated that San Diego’s plan would lead to an annual reduction of seven million metric tons of greenhouse gases, a contribution to California’s broader effort to reduce greenhouse gas emissions by 80 percent by 2050.
Those targets are California’s own — passed by a state government that is seen as one of the most ambitious on climate change, and that is as influential as many countries given its size — and not set by the federal government.
Ms. Capretz, who wrote a version of the plan for Mr. Faulconer’s predecessor, said that much of the earlier version remained in the measure adopted Tuesday.
Echoing the mayor, she said she expected that much of the renewable energy would come from solar power. “We’re sunny in San Diego, so we’re counting on a lot of homegrown solar on rooftops and parking lots,” she said.
Mr. Gillespie said San Diego had laid down a challenge to other cities. “We need others to see this and say, ‘Game on,’ ” he added. “We need places like Los Angeles, like San Francisco and New York, to step up.”
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2016: Time For Energy To Reinvent Itself?
Dec 15, 2015 | Forbes
By Tara Schmidt
Picture this: a world powered on renewable energy. A breakthrough in battery technology propels solar and wind to become the most competitive energy sources, everywhere. Everyone powers their homes, businesses and industries with renewables, while transport goes electric. The energy companies that thrive are the ones that went green… back in 2016. Is it completely unfathomable?
Today, renewables are already competing against fossil fuels, with substantial opportunity for growth. Despite coal and oil prices being at multi-year lows, over half of global power capacity additions in 2015 came from wind, solar, hydro and nuclear. And on December 12th, the UN Climate Conference (COP21) delivered a global climate accord – a landmark agreement between nearly 200 countries. Although carbon-cutting targets are nowhere near the agreed 2oC goal, many expect progressively stringent policy to stimulate more investment into renewables and energy storage.
Global Power Additions_chart
While renewables continues to grow, the fossil fuel industry is facing more challenging times ahead. Over the next 15 years, Wood Mackenzie forecasts the average annual rate of growth for coal and oil demand to slow to just half of what it is today, with significant downside risks. Increasing pressure from governments, investors and fossil fuels divestments could further dampen demand – particularly for coal. And the risk of ‘lower-for-longer’ prices is mounting, with China’s economic growth rate falling more suddenly and rapidly than many expected. Consequently, there is a risk energy prices will not fully recover any time soon.
In this business environment, fossil fuel companies are grappling to find growth. Until now, many have endured by cutting costs. But tough times sometimes call for a shift in strategy. And CEOs are asking, is it time to diversify into renewables?
Global Energy Demand Growth 2000-2015 vs 2016-2030_chart Recommended by Forbes
Some energy majors are wagering money on it. Last month, Total announced plans for 10-15% of its portfolio to be solar by 2030 (compared with 3% today). And Statoil is already planning to build the world’s largest floating offshore windfarm in Scotland. But some companies have tried this before, only to be disappointed – such as BP’s attempt to move “beyond petroleum” 10 years ago.
Why is this time any different? Never before has there been more of an impetus for a move into renewables. Solar and wind costs have plummeted in the past five years, a global climate accord has been agreed, and growth in fossil fuels is slowing.
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