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CCBJ News Update
April 18, 2014


IPCC: aggressive action needed to control GHG emissions
DOE launches new loan program
EPA: U.S. GHG emissions down again in 2012
Yingli signs framework agreement, forms new fund
Financing closed for 252 MW Mexican wind project
IKEA invests in Illinois wind project
California issues first offsets for forestry project
SolarWorld, PetersenDean to partner
U.S. Geothermal acquires Vale Butte
CCEMC issues awards for carbon use technology
Siemens to connect BorWin3 to grid
First Wind signs PPA with Hawaiian Electric


IPCC: aggressive action needed to control GHG emissions


In the third of three recently released reports constituting the comprehensive Fifth Assessment Report (AR5) on the causes and impacts of a changing global climate, the Intergovernmental Panel on Climate Change (IPCC) has concluded that governments of the world must significantly step up their efforts to control emissions of greenhouse gases (GHG) in order to keep global temperatures within manageable levels and avert the worst impacts of climate change. The new report, released in Berlin on April 13, offered some good news—that governments and businesses around the world seem to be showing greater commitment to addressing climate change, implementing new building codes and efficiency standards and taking advantage of decreasing costs of renewable energy without compromising standards of living. Even so, the report noted, GHG emissions continue to increase, and if previously announced targets are to be met, annual investment in fossil fuel-fired power plants will need to fall by 20% over the next two decades, while investment in cleaner energy sources will need to double.
“We cannot afford to lose another decade,” said Ottmar Edenhofer, a German economist and co-chair of the Working Group III committee, which wrote the new report. “If we lose another decade, it becomes extremely costly to achieve climate stabilization.”
In a summary of the report released for policy makers, the Working Group III committee estimated that mitigation scenarios for keeping atmospheric concentrations of carbon dioxide equivalents (CO2e) to 450 parts per million (ppm) would entail losses of global consumption of only 1 to 4% by 2030. These estimates do not factor in the benefits the expenditures on mitigation, including improved health. IPCC will prepare a “synthesis report” consolidating the three AR5 reports, to be released in October.


DOE launches new loan program

After a three-year hiatus, the U.S. Department of Energy (DOE) is jumping back in to the business of providing loan guarantees to support the development of renewable energy and energy efficiency technologies. DOE issued a draft solicitation on April 16 in which it declared that up to $4 billion in loan guarantees under the Section 1703 program would be available to support technologies that are “catalytic, replicable, and market ready,” with special emphasis on developments in advanced grid integration and storage, drop-in biofuels, waste to energy, enhancement of existing facilities, and efficiency improvements. “Through our existing renewable energy loan guarantees, the department’s Loan Programs Office helped launch the U.S. utility-scale solar industry and other clean energy technologies that are now contributing to our clean energy portfolio,” said Energy Secretary Ernest Moniz in announcing the draft solicitation. “We want to replicate that success by focusing on technologies that are on the edge of commercial-scale deployment today.”


EPA: U.S. GHG emissions down again in 2012

The ongoing switchover of electric power generation from coal to natural gas and a general decrease in energy consumption in the U.S. economy continue to contribute to reductions in GHG emissions in the United States, according to the U.S. Environmental Protection Agency’s newly released 19th annual report on U.S. GHG emissions. The report, titled The Inventory of U.S. Greenhouse Gas Emissions and Sinks, finds that U.S. GHG emissions decreased by 3.4% in 2012 compared with 2011, with the decreases coming across all sectors of the economy. In addition to the displacement of coal by gas as the fossil fuel of choice for many electric power plants, a major contributor to the overall decrease in GHG emissions was increased fuel efficiency in the transportation sector and limited new demand for passenger transportation. Total GHG emissions in 2012 amounted to 6,526 million metric tons of CO2e, according to the report. EPA said its fuel-efficiency standards for cars and light trucks for model years 2012 through 2025 are saving Americans more than $1.7 trillion in fuel expenses, and that the improved efficiencies provided by Energy Star-rated products saved Americans more than $26 billion in utility bills in 2012.

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Yingli signs framework agreement, forms new fund

Solar photovoltaic (PV) module maker Yingli Green Energy Holding Co. Ltd. (Baoding, China) has signed a framework agreement with United Photovoltaic Group Ltd. under which United PV will acquire solar PV plants in China to be developed and constructed by Yingli. The plants are located in Guangxi, Hebei, Shanxi, Shandong, and other provinces and will amount to a total electricity-generating capacity of 300 megawatts (MW) once they are built. Yingli will continue to operate the plants following their sale to United PV. Separately, Yingli announced that it has joined with Shanghai Sailing Capital Management Co. Ltd. in establishing a new fund to invest in the development of solar energy projects in China. The new fund will be capitalized at an initial level of RMB1 billion, or about $160 million U.S., and it will initially focus on ground-mounted solar installations and distributed solar power systems.


Financing closed for 252 MW Mexican wind project

Fisterra Energy, a company owned by funds managed by Blackstone (New York, NY) and affiliate Blackstone Energy Partners, and project partner CEMEX, a global building materials company, have closed on the financing of the Ventika wind project in Nuevo Leon, Mexico. The financing package consists of 75% debt and 25% equity, with the debt financing provided the North American Development Bank, Banobras, Nafin, Bancomext, and Santander, and the equity portion taken by Fisterra, the Blackstone entities, CEMEX, and other private investors. The $650 million project, Mexico’s largest onshore wind farm, consists of two 126 MW facilities and is scheduled to begin operations in 2016. Spain’s Acciona Energy will supply 84 of its AW-3000 turbines for installation at the two facilities under a contract announced simultaneously with the closing of the project financing. “With the development and construction of Ventika, we will be able to support Mexico in meeting its green energy targets,” said Sean Klimczak, senior managing director at Blackstone. “This project exemplifies the progress and positive impact that can be achieved when private capital works in partnership with government, entrepreneurs, and industry.”


IKEA invests in Illinois wind project

As part of a campaign to increase its reliance on renewable energy and marking its first investment in large-scale wind power in the United States, Swedish furniture retailer IKEA will acquire the 98 MW Hoopeston Wind project in Vermillion County, Illinois, from Apex Clean Energy (Charlottesville,VA). IKEA said that the Hoopeston facility, which is scheduled to be up and running in 2015, will generate 165% of the electric power required to run IKEA’s U.S. operations. With a goal of deriving power for all its global facilities from renewable resources by 2020, IKEA has turned to wind initially in the United States because “it was able to move us much further, at this point surpassing our goal from a U.S. perspective,” Rob Olson, CFO of IKEA U.S., told the Associated Press on April 9. Olson indicated that IKEA expects to benefit from some kind of government incentive in making the investment, but the Illinois Department of Commerce and Economic Opportunity and officials of Vermillion County have said that they are not providing any tax breaks or other incentives, AP reported.

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California issues first offsets for forestry project

Under California’s GHG emissions credit trading program, the California Air Resources Board (CARB) has issued the first carbon credits for a forest protection project, providing 836,619 offset credits for the Yurok Tribe Sustainable Forest Project on 8,000 acres of tribal land in Humboldt County, Reuters reported on April 9. The credits, valued at about $10.25 each at the time of CARB’s action, will be available for purchase by California utilities to help them meet their emission reduction limits. In return for the credits, the landowners participating in the forestry project must maintain the levels of carbon stored in their forest holdings or increase those levels for a period of at least 100 years. “Twenty percent of the world’s GHG emissions come from deforestation,” said Linda Adams, chair of the board of directors at Climate Action Reserve, which registered the project and did its initial verification. “The issuance of these forest offset credits signifies a legal commitment to long-term forest protection and demonstrates the effectiveness and benefit of market mechanisms to encourage environmental action.”


SolarWorld, PetersenDean to partner

Solar power system maker SolarWorld (Hillsboro, OR) and roofing and solar system installer PetersenDean (Fremont, CA) have formed a partnership under which the two companies will jointly pursue opportunities in the rooftop solar installation market. The partnership is part of PetersenDean’s Solar4America program, in which the company is using solar system components supplied only by domestic U.S. suppliers for its installations. SolarWorld will manufacture solar panels for PetersenDean at its factory in Hillsboro. “We made a decision at PetersenDean to only source our products from North America,” said Jim Petersen, founder of PetersenDean. “As a result, we are supporting the American economy, supporting the American worker, and reinvesting those dollars back in America.” Citing solar industry estimates, PetersenDean said that residential solar power installations in the United States will increase by about 50% in 2014.


U.S. Geothermal acquires Vale Butte

Following quickly upon its announcement that it will buy geothermal energy assets in California’s Geysers region, U.S. Geothermal Inc. (Boise, ID) announced that it has completed the acquisition of the Vale Butte property near Vale, Oregon, a site that the company will evaluate for geothermal energy potential. The site is located 12 miles east of U.S. Geothermal’s Neal Hot Springs geothermal power plant and encompasses 368 acres of geothermal energy and surface rights acquired from private landowners, Malheur County, and the municipality of Vale. “This project adds to our pipeline of choice development opportunities and continues to build on our growth strategy for the company,” said Dennis Gilles, U.S. Geothermal’s CEO. “Vale Butte is close to transmission lines and is in a great location to serve the Pacific Northwest energy market.”

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CCEMC issues awards for carbon use technology

The Climate Change and Emissions Management Corp. (CCEMC; Edmonton, Alberta), a non-profit established by Alberta regulation to facilitate climate-change response actions in the province, has announced the 24 winners of its international “Grand Challenge: Innovative Carbon Uses” program and will distribute a total of $35 million in grants to the winners to support the further development of their carbon use technologies. The winners, including biofuel makers such as Enerkem, chemical synthesis technology developers such as RTI International, and makers of solid products such as Skyonic Corp., were selected out of 344 submissions from companies in 37 countries. The winners will each receive $500,000 and access to a CCEMC support team to help develop their technologies further. “While efforts to mitigate greenhouse gas emissions around the world are making progress, we still need to pursue other strategies that can reduce emissions as global demand for fossil fuels grows,” said CCEMC Chair Eric Newell. “We applaud the leaders behind these projects who are taking action through developing new carbon utilization technologies.”


Siemens to connect BorWin3 to grid

German-Dutch grid operator TenneT has awarded a contract to Siemens AG (Erlangen, Germany) and consortium partner Petrofac (Jersey, U.K.), an engineering, procurement, and construction (EPC) contractor historically serving the oil and gas industry, to provide the technology for connecting the BorWin3 offshore wind farm in the North Sea to the terrestrial grid. The connection, which will have a transmission capacity of 900 MW, is the fifth order that Siemens has received from TenneT for connecting North Sea wind farms to the German-Dutch grid. Under the new contract, Siemens and Petrofac will supply the high-voltage equipment and the terrestrial station for the connection, with the converter modules to be designed, manufactured, and tested at Siemens’ factory in Nuremberg, Germany. Hamburg-based Prysmian has secured the contract to lay the cables from the BorWin3 wind farm to the land-based connections.


First Wind signs PPA with Hawaiian Electric

The output of a proposed 20 MW solar PV plant on the island of Oahu, Hawaii, will be delivered to the Hawaii Public Utilities Commission under a 20-year power purchase agreement (PPA) recently signed by the utility and developer First Wind (Boston, MA). The project is the first in the state to be developed by First Wind’s newly established solar division, First Wind Solar Group, which was formed to pursue solar energy opportunities near the parent company’s wind projects in Hawaii, the northeastern United States, and the western states. First Wind said that the PPA will support the utility’s efforts to meet a mandate set under the Hawaii Clean Energy Initiative to derive 70% of the state’s electric power through conservation and clean energy sources by 2030 and reduce Hawaii’s reliance on imported fossil fuel.

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