October / November 2010
Most analysts interviewed by CCBJ over the last three years expected federal climate change legislation by now. But after the demise of Kerry-Graham-Lieberman in the spring and the Republication rout in November, climate legislation has a snowball's chance in Cancún of being passed by 2012.
Yet the broader spectrum of drivers that propel business in CCBJ's climate change industry (CCI) sustained modest 2% growth in 2009 and 2010 and look strong going forward. Disappointment over the news out of Washington and the international climate meetings is balanced with the emergence of corporate carbon indices like Dow Jones Sustainability Index and Carbon Disclosure Project, sustainability initiatives by WalMart and other leading wholesale buyers, the SEC's guidance around disclosing climate change risks-not to mention the resounding victory of the California referendum on state climate change policy (state policies will be the focus on CCBJ's December 2010 edition.)
Inside this edition
Low carbon power is the largest of the nine Climate Change Industry segments, with $133 billion in 2009 revenues. In terms of power sales, nuclear, hydroelectric and combined heat and power earn the largest shares by far. While growth has been relatively flat in these segments for some time, CCBJ's coverage shows many positive trends for these and other core low-carbon power segments (nuclear power was covered in CCBJ's Oct. 2009 electric power edition). In this edition:
The public and policymakers are giving new respect to Hydropower as the industry targets opportunities to power thousands of unpowered dams and upgrade capacity at existing plants. Relicensing is steady business for consultants while interest grows in new run-of-river plants and pumped storage.
Biomass Power is expected to grow dramatically in many of the 38 U.S. states and territories with renewable energy standards or goals. But to meet those targets, the slow-growing biopower industry will have to draw on energy crops that are currently scarce and expensive while confronting some difficult policy and public relations challenges.
Combined Heat and Power (CHP) enjoys respect in energy and climate change circles but lacks public understanding and support. Market and environmental regulations have restricted growth while the recession has stalled investment in CHP. But backup power regulations, cleaner turbines, modernized air permitting in some states and other developments are improving the prospects for what Oak Ridge National Lab calls "one of the most promising options in the U.S. energy efficiency portfolio."
The mature Landfill Gas to Energy (LFGE) industry has tapped about 70% of available resources, but developers and consultants see continued growth as existing projects expand and more landfills become large enough to justify LFGE development. Converting LFG to CNG for fleet vehicles sweetens the economic equation for many operators. Few consulting engineering firms are active in this space, reflecting the specialized expertise required-and perhaps indicating an opportunity for others. The smaller digester gas to energy segment, including wastewater treatment, solid waste and agricultural operations, is also profiled.
Bloom Energy achieved star status in 2010 with sales of 100-kW Stationary Fuel Cells to Adobe, WalMart and others, but experts question whether the start-up can get its costs low enough for recurring sales to broader markets without generous state and federal incentives. More mature players FuelCell Energy and UTC Power have longer sales histories to broader industry segments, but they are also challenged to get costs down for the inevitable decline of incentives and subsidies.
Only a small fraction of heating needs in the cold regions of North America are met with Biomass Heating, but equipment vendors, forest and farm researchers and economic development specialists are promoting the use of biomass heating with new technology and incentives. A major challenge is cultivating more trees and shrubs like willow and poplar for fuel and reducing the cost of harvesting and handling.
Battered by the recession and the derailment of the PACE financing option for small-scale projects, the Energy Efficiency segment nonetheless remains stalwart with help from the ARRA stimulus bill and state energy efficiency mandates.
Look inside the Annual Overview of the Climate Change Industry: Focus on Low-Carbon Power Segment.
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