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CCBJ News Update
June 13, 2014



Comments on EPA carbon rule abound
U.S. imposes duties on solar products from China
Third Quebec auction raises C$26.8 million
U.S. Navy to issue major biofuels solicitation

NRG to acquire Alta wind farm
Odebrecht unit wins Panama hydropower concession
NADP loans $40 million for Texas solar farm
SolarCity, REC Group sign 100 MW supply agreement


Comments on EPA carbon rule abound

In the hours and days that followed the U.S. Environmental Protection Agency’s (EPA) issuance of a proposed rule establishing limits on greenhouse gas (GHG) emissions from existing fossil fuel-fired power plants, commentary from industry groups, labor associations, environmental and citizen groups, and government officials followed in multitudes. Many business associations and Republican legislators and governors condemned the rule as a job and economy “killer,” while commentary from the environmental community ranged from “at last” to “good first step” to “not enough.” The electric power industry’s views spanned a range, with some power companies—not surprisingly, those that had taken steps to mix their sources of generation—welcoming the rule’s flexibility and pledging to work with EPA and the state governments in developing state-specific programs to meet the new requirements.
A sampling of the commentary follows.
National Association of Manufacturers: “As users of one-third of the energy produced in the United States, manufacturers rely on secure and affordable energy to compete in a tough global economy, and recent gains are largely due to the abundance of energy we now enjoy. Today’s proposal from the EPA could singlehandedly eliminate this competitive advantage by removing reliable and abundant sources of energy from our nation’s energy mix. It is a clear indication that the Obama Administration is fundamentally against an ‘all-of-the-above’ energy strategy, and unfortunately, manufacturers are likely to pay the price for this shortsighted policy.”
Michael Brune, executive director of the Sierra Club: “Today, the president made good on his promise to American families that his administration would tackle the climate crisis and clean up and modernize the way we power our country. Climate disruption is the greatest challenge facing our generation. Until now, power plants have been allowed to dump unlimited amounts of carbon pollution into our air, driving dangerous climate disruption, and fueling severe drought, wildfires, heat waves, and superstorms. Extreme weather, and the costs to Americans’ health and wallets, will only worsen unless we act.
Chad Kolton, spokesman for the Partnership for a Better Energy Future: “The Obama Administration had ample opportunity to listen to the concerns of energy users across the country and create a rule that was balanced and supported an ‘all of the above’ approach to energy. Today’s announcement shows that they chose instead to push regulations that go too far, too fast without consideration of the consequences for American companies and consumers.”
Stephanie Walton, spokeswoman for FirstEnergy: “As proposed, the rule uses an appropriate baseline year, provides states with reasonable flexibility, and gives an adequate compliance timeline…Through investments in emissions control equipment and multiple plant retirements, FirstEnergy expects a 25% reduction below 2005 levels in CO2 emissions by 2015. This puts the company on target to meet the Obama administration's goal of a 30% reduction in greenhouse gas emissions by 2030, if credit is given for plants retired since 2005.”
Conrad Schneider, advocacy director of the Clean Air Task Force: “Our analysis confirms that the significant reductions EPA has proposed can be achieved at minimal cost and without economic disruption.  In fact, EPA’s proposed interim target can be achieved simply by displacing electric generation from the highest-emitting coal plants with electricity from underutilized natural gas plants in operation today.”
Cecil Roberts, president of the United Mine Workers of America International: “[N]o one—no one—can point to a significant reduction in global greenhouse gas emissions that is guaranteed to come from this rule…” The rule will lead to “long-term and irreversible job losses for thousands…[I]t’s not just that these jobs will be lost, it’s the ability of companies to continue funding pension and retiree health care benefits will be at great risk.”
Steven Nadel, executive director of the American Council for an Energy Efficient Economy: “By including energy efficiency in its proposal, the Environmental Protection Agency has created a path for states to lower consumer energy bills through modest investments. States that take advantage of this flexibility will benefit both the economy and the environment. The real story here is about economic opportunity…we project that if states choose the efficiency path in the proposal, they would create hundreds of thousands of jobs and lower energy bills across the country by tens of billions of dollars a year.”
Jim Robo, chairman and CEO of NextEra Energy, Inc.: “While we will continue to review the proposed guidelines in detail, we appreciate that EPA’s plan provides for compliance flexibility in terms of enabling states to choose how they will meet their goals. We also appreciate that EPA’s plan recognizes the efforts that states and companies have taken already toward balancing the needs for cleaner power, lower emissions, and affordable energy.”
Senator Orrin Hatch (R-UT): “This rule is yet another example that the administration is more focused on catering to its political allies than doing what’s best for hardworking Americans… Make no mistake—this proposed cap-and-trade rule will kill jobs, increase energy costs, and make it even more difficult for hardworking families to make ends meet.”
Tom Steyer, investor and climate activist: “For far too long, coal-fired power plants have had free reign to dump carbon pollution into our atmosphere. The administration’s plan to end this carbon pollution loophole will establish a level playing field for advanced energy solutions that are cleaner, affordable, and more secure. Now, more than ever, the United States must be a global leader in addressing climate change.”
Tom King, president of National Grid: “The Obama Administration, through the good work of EPA Administrator Gina McCarthy and her staff, has worked in a transparent manner to craft regulation that promotes environmental and human health through a host of clean energy options. Rather than picking winners, this proposed rule supports market-based solutions.”
Richard Myers, vice president for policy development, planning, and supplier programs at the Nuclear Energy Institute: “For any strategy for reducing greenhouse gas emissions, one thing is abundantly clear for every state in the nation: with nuclear energy it is feasible to meet the administration's goals, and without it there is no chance at all.”

For commentary on the new EPA rule and Obama’s climate policy by Jim Hight, senior editor of the Climate Change Business Journal, visit his blog.


U.S. imposes duties on solar products from China

In response to a complaint by the U.S. arm of Germany’s SolarWorld AG, the U.S. Department of Commerce (DOC) has imposed import duties on solar panels, modules, and other components that, although they were made with parts from Taiwan, were found to have been produced with the help of subsidies from the Chinese government. The move represents a preliminary determination by DOC, which is expected to rule on the anti-dumping section of SolarWorld’s complaint before the end of June. In the determination, DOC imposed a duty of 35.21% on the import of solar panels and related products made by Wuxi Suntech Power and five affiliates, 18.56% on imports of products made by Trina Solar, and 26.89% on imports of products made by other Chinese producers.
“Today is a strong win for the U.S. solar industry,” said Mukesh Dulani, president of SolarWorld Industries America Inc. (Hillsboro, OR). “We look forward to the end of illegal Chinese government intervention in the U.S. solar market, and we applaud Commerce for its work that supports fair trade.” The Coalition for Affordable Solar Energy, a group of U.S. solar installers, said in a statement that “the ruling is a major setback for the entire U.S. solar industry because it will immediately increase the price of solar power and cost American jobs in one of the fastest-growing sectors of the U.S. economy.”


Third Quebec auction raises C$26.8 million

With the first joint auction with the state of California just months away, the Canadian province of Quebec held its third auction of GHG emission credits, on May 30, and claimed success, as demand for emission credits exceeded supply. The auction raised C$26.8 million (about $24.6 million U.S.) in revenue, for a total of C$82.2 million for the three auctions held to date. In the May 30 auction, participants submitted bids amounting to 102% of the emission credits, or units, that were up for sale in 2014, thereby requiring the use of a tie-breaker to assigning the remaining units. The units sold for a price of C$11.39 per ton, which is on a par with the floor price set by the Quebec Government. In addition, 85% of future vintage emission units for 2017 were sold during the auction. “The high participation rates for purchasing both present and future vintage units is an indicator that emitters are taking the new market seriously and are already preparing for their future needs,” said David Heurtel, Quebec’s minister of sustainable development, the environment and the fight against climate change.

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U.S. Navy to issue major biofuels solicitation


In the recent Inland/East/Gulf Coast bulk fuels solicitation issued by the Defense Logistics Agency (DLA), the U.S. Navy is seeking to procure at least 37 million gallons of drop-in biofuels for its shipboard jet fuel supplies. According to the DLA solicitation, eligible products can be blends of biofuels with conventional petroleum products, with biofuels constituting 10 to 50% of the blend. DLA said that it will purchase the blends only if they are cost-competitive with conventional fuels. “Since we are looking for a minimum of 10% of the total JP-5 and F-76 pool in the domestic locations covered by this solicitation to be drop-in biofuels, this means we are seeking 37.8 million gallons or more of biofuels,” said Chris Tindal, director for operational energy for the U.S. Navy. Bids are due by July 9; DLA expects deliveries of products to begin on April 1, 2015.


NRG to acquire Alta wind farm

The largest wind farm in North America is about to change hands under a recently announced agreement between NRG Yield, Inc. (Princeton, NJ) and the facility’s developer, TerraGen Power LLC (New York, NY). The two companies announced on June 4 that NRG Yield will acquire the 947 megawatt (MW) Alta Wind facility in Tehachapi, California, from TerraGen for $870 million, plus the assumption of $1.6 billion of non-recourse project financings. The purchase also includes a portfolio of land leases associated with the facility. NRG Yield said that it will finance the purchase price through a combination of newly issued debt, common equity, and cash. The Alta Wind facility has long-term power purchase agreements to deliver electricity to Southern California Edison, with 21 years of remaining contract life for phases I through V of the project, and 22 years beginning in 2016 for phases X and XI.


Odebrecht unit wins Panama hydropower concession

Panamanian utility Egesa has awarded a concession to a unit of Brazilian conglomerate Odebrecht to design and build a 213 MW hydropower plant in Panama and operate and maintain the facility for 50 years. The Odebrecht unit, Odebrecht Energy Luxembourg, was the sole bidder in an auction for the concession, submitting a winning bid of $1.05 billion U.S. Odebrecht Energy Luxembourg will own a 77% stake in the project while the Panamanian government will hold the remaining interest, although the government has the option of increasing its stake in the facility during the construction period. The hydropower dam, which is located in the western province of Bocas del Toro, is expected to start up operations in 2019 or 2020, at which point it will account for about 9% of Panama’s electric power generation capacity.

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NADP loans $40 million for Texas solar farm


The North American Development Bank (NADB) has signed an agreement with OCI Solar Power LLC (San Antonio, TX) under which the bank will provide $40 million in loans to finance the construction of OCI’s Alamo 4 Solar Park in Bracketville, Texas. OCI will use polycrystalline photovoltaic (PV) modules mounted on a dual-axis tracking system for the facility, which will have an electricity generating capacity of 39.6 MW. OCI has a long-term power purchase agreement to sell the output of CPS Energy, a utility serving the San Antonio area. Construction has begun at the 633-acre site; OCI expects to start up operations at the facility in October 2014.


SolarCity, REC Group sign 100 MW supply agreement

Rooftop solar system installer SolarCity (San Mateo, CA) and Norway’s REC Solar ASA have entered into a supply agreement under which SolarCity will purchase a minimum of 100 MW and up to 240 MW of REC’s Peak Energy solar PV panels. Under the agreement, REC will deliver the panels over a 12-month period beginning in the fourth quarter of 2014 for installations in SolarCity’s 15-state territory. The panels are compatible with SolarCity’s Zep Solar mounting system, an outcome of a technology licensing agreement struck by the two companies earlier this year. “The availability of competitively priced, U.S. trade-compliant PV modules is an important development for the global solar industry,” said Tanguy Serra, SolarCity’s chief operations officer. “REC delivers high-performance modules with excellent resistance to degradation, all with a responsible environmental footprint.”

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