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CCBJ News Update
February 3, 2012
U.S. ready to impose tariff on Chinese solar firms?
Army signs ESPCs valued at $66.8 million
ZeaChem receives $232.5 million USDA loan guarantee
Loan recipient Ener1 files for bankruptcy
AWEA: PTC deadline spurring record activity
SunPower acquires Tenesol for $165.4 million
SWEPCO signs PPAs for 359 MW
FirstEnergy to issue SREC RFP, close plants
MidAmerican Renewables acquires 550 MW solar plant
Tetra Tech wins 18.6 million USAID clean energy program
Fluor wins Arizona solar construction job
Primoris to construct waste-to-energy plants
U.S. ready to impose tariff on Chinese solar firms?
On January 30, the U.S. Department of Commerce (DOC) issued a preliminary determination saying that there is a “reasonable basis to believe or suspect” that Suntech Power Co., Trina Solar Energy Co. Ltd., and all other Chinese producers or exporters of solar panels are receiving illegal subsidies from the Chinese government on “massive imports” of their products into the United States. DOC’s preliminary determination, although not enforceable, included a finding that “critical circumstances exist” with respect to Chinese subsidies of solar imports, and that as a result, DOC could impose tariffs on those imports retroactive to December 3, 2011 should the department ultimately uphold its findings. That decision could come by March 2, 2012.
SolarWorld Industries America, Inc. (Hillsboro, OR), which filed a trade complaint against Chinese solar panel makers in October, said that DOC’s determination “is yet another step in the right direction toward clearing a trade obstacle for rekindling the growth of U.S. renewable energy and manufacturing jobs.” In a report issued almost simultaneously with DOC’s announcement, however, the Coalition for Affordable Solar Energy (CASE), which opposes the imposition of U.S. tariffs on Chinese solar panel exporters, concluded that imposing a 50% tariff could cost the United States 15,000 to 50,000 jobs in assembly, installation, sales, and marketing. The CASE report, which was prepared by the Brattle Group (Cambridge, MA), also concluded that, if the Chinese retaliate by imposing tariffs on the import of polysilicon, U.S. job losses could total 60,000 positions by 2014.
Army signs ESPCs valued at $66.8 million
In a series of contracts that will include the U.S. Army’s largest renewable energy project to date, the Army Engineering and Support Center (Huntsville, AL) has awarded three energy savings performance contracts (ESPCs) with a total value of $66.8 million to two energy management companies for initiatives at several bases. Under a $16.8 million contract, Siemens Government Technologies will install 4.44 megawatts (MW) of solar photovoltaic (PV) capacity to provide about 10% of the total electricity consumption at the White Sands Missile Range in New Mexico. The Army said that, when completed, the project will be the branch’s largest renewable energy project, more than double the 2 MW array at Fort Carson in Colorado. Johnson Controls, Inc. has received a $16 million contract to save Fort Bliss in Texas a total of $42 million in energy costs over 25 years through the purchase of energy produced by 5,500 solar panels that will be owned and operated by a third party. Johnson Controls has also received a $34 million contract to install wind and solar PV systems, light-emitting diode (LED) lighting systems, energy management controls, and other energy conservation equipment and systems at military bases in Puerto Rico.
Commercial and industrial energy management and efficiency is a growing business, despite and because of the recession. For in-depth coverage, see CCBJ's Nov/Dec 2011 edition
ZeaChem receives $232.5 million USDA loan guarantee
ZeaChem Inc. (Lakewood, CO) will move forward with the construction of its first commercial-scale cellulosic ethanol biorefinery with the help of a conditional commitment to a $232.5 million loan guarantee by the U.S. Department of Agriculture (USDA). At the plant, which will be located in Boardman, Oregon, ZeaChem plans to use woody biomass and agricultural residues to produce 25 million gallons per year (gpy) or more of product. ZeaChem has agreements for supply of 100% of the facility’s feedstock from the nearby GreenWood Tree Farm Fund, managed by GreenWood Resources, as well as from local agricultural residue processors. ZeaChem said that the commercial facility, which is located next to the company’s 250,000 gpy demonstration plant, will create 188 direct construction jobs and 65 full-time operations jobs, plus an additional 242 indirect jobs.
Loan recipient Ener1 files for bankruptcy
Ener1 Inc. (New York, NY), parent of electric vehicle (EV) battery maker EnerDel and recipient of a U.S. Department of Energy (DOE) loan guarantee of $118 million, has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Ener1 has received approval from a judge in the U.S. Bankruptcy Court in New York City to borrow $13.5 million in financing from company shareholder to finance operations during reorganization—less than the $20 million Ener1 had sought. In papers filed with the Bankruptcy Court, Ener1 said that the demand for EVs did not develop as quickly as anticipated and thus had negative impacts on the company’s operating results, financial condition, and prospects. Ener1’s filing lists assets of $73.9 million and debt amounting to $90.5 million. “This was a difficult, but necessary, decision for our company,” Ener1 CEO Alex Sorokin said in a statement on the company’s website. “We moved aggressively to reduce costs and shift focus when the marketplace did not evolve as quickly as anticipated.”
CCBJ's Sept/Oct 2011 electricity storage edition provides in-depth coverage and analysis of the electricity storage industry and the global competition to bring down the cost per kWh of batteries for EVs and utility systems.
AWEA: PTC deadline spurring record activity
A total of 6,810 MW of wind-generated electric power capacity was installed in the United States during 2011, up 31% over the capacity installed in 2010, and the record pace of construction has continued into the new year as developers anticipate the expiration of the production tax credit (PTC) for wind power development by the end of 2012, according to recent data compiled by the American Wind Energy Association (AWEA). The organization observed that there hasn’t been so much wind power capacity under construction in the United States since the middle two quarters of 2008. AWEA CEO Denise Bode tied the elevated activity to the PTC, “which leveraged an average of more than $16 billion a year in private investment over the last several years and supported tens of thousands of manufacturing jobs.” Bode said that extension of the PTC beyond the December 31, 2012, expiration date has support in both houses of Congress, as well as in many state houses around the country. The 2011 growth in wind power capacity took place in the traditional wind powerhouse states—Texas, Iowa, and California—as well as in emerging states such as Colorado, Illinois, Kansas, Minnesota, Oregon, and Washington.
SunPower acquires Tenesol for $165.4 million
Cementing a relationship that began with French oil and gas giant Total SA’s acquisition of a 60% interest in solar panel maker SunPower (San Jose, CA) last year, SunPower has acquired Total’s subsidiary Tenesol SA (La Tour de Salvagny, France) for $165.4 million U.S. in cash. Concurrently with this transaction, Total purchased another 18.6 million shares of SunPower common stock for $8.80 per share, giving Total a total ownership stake of approximately 66% in SunPower. Tenesol has been designing, engineering, manufacturing, installing, and managing solar energy systems for global customers since 1983, claiming a total installed base of more than 15,000 systems generating approximately 500 MW. It expects to report record revenue of approximately €200 million in 2011 (about $262 million U.S.). “With SunPower’s industry-leading technology, attractive long-term cost roadmap, our joint collaboration on research and development, and Tenesol’s established downstream presence, the combined company is well positioned to open new, largely untapped markets for solar,” said Arnaud Chaperon, senior vice president of Total’s Gas and Power Division.
For detailed analyses of U.S. solar energy markets, see CCBJ's Solar Energy III edition.
SWEPCO signs PPAs for 359 MW
In a series of agreements that will more than quadruple Southwestern Electric Power Co.’s (SWEPCO) portfolio of wind energy generating capacity, SWEPCO has signed long-term power purchase agreements (PPA) with three wind farm developers for delivery of 358.65 MW of electric power. SWEPCO, a unit of American Electric Power (Columbus, OH), signed three contracts with Canadian Hills Wind, LLC for 201.25 MW of electric power generated at a facility in Canadian County, Oklahoma. Under another contract, NextEra Energy Resources LLC will supply SWEPCO with 79.6 MW from the High Majestic Wind II project in Carson and Potter counties, Texas. SWEPCO has also signed a contract with BP Wind Energy and Sempra U.S. Gas and Power for delivery of 77.8 MW from the Flat Ridge 2 wind farm straddling four counties southwest of Wichita, Kansas. In a separate agreement, the Oklahoma Municipal Power Authority, a co-owner of SWEPCO’s coal-fired John W. Turk Jr. Power Plant, signed a 25-year PPA for delivery of 49.2 MW from the Canadian Hills Wind project. Through these deals, SWEPCO has exceeded a commitment to source at least 400 MW of electric power from renewable energy under a recent settlement of legal issues involving the John W. Turk Jr. plant.
FirstEnergy to issue SREC RFP, close plants
In another sign of the slow but inexorable shift towards cleaner energy generation among U.S. utilities, FirstEnergy Corp. (Akron, OH) has made recent moves away from coal-fired generation and towards solar power. The utility announced on January 30 that it will issue a request for proposals (RFP) for 10-year contracts to provide solar renewable energy credits (SRECs) for customers of its Ohio utilities Ohio Edison, Cleveland Electric Illuminating, and Toledo Edison. The RFP, which is designed to help the utility meet the renewable energy targets established under Ohio law, seeks delivery of 1,000 SRECs produced by qualifying generating facilities in Ohio for each calendar year from 2012 through 2021. Separately, FirstEnergy announced that it will retire six older coal-fired power plants in Ohio, Pennsylvania, and Maryland by September 1, 2012. The utility said that the decision to close the facilities was based on its judgment that complying with new federal regulations, including the recently issued standards for controlling emissions of mercury and other toxic air pollutants, would not be worth the expense at the six facilities. The total capacity coming out of service will be 2,689 MW.
MidAmerican Renewables acquires 550 MW solar plant
MidAmerican Renewables, the newly formed subsidiary responsible for managing the renewable energy business of MidAmerican Energy Holdings Co. (Des Moines, IA), has completed its acquisition of the Topaz Solar Farm in California’s San Luis Obispo County from First Solar, Inc. (Tempe, AZ). First Solar will retain its role of building, operating, and maintaining the 550 MW facility, which will use First Solar’s advanced thin-film PV modules. Construction began in December 2011, and commissioning is expected by early 2015. Pacific Gas and Electric Company will purchase the electricity from the Topaz project under a 25-year PPA.
Tetra Tech wins 18.6 million USAID clean energy program
To support its efforts to increase access to renewable energy sources and improve energy efficiency practices in the nation of Colombia, the U.S. Agency for International Development (USAID) has awarded a $16.8 million contract to Tetra Tech, Inc. (Pasadena, CA) to provide project development support, technical assistance, and other services to the Colombia Clean Energy Program (CCEP). Under the program, Tetra Tech will be charged with placing particular emphasis on expanding energy access in remote areas of the country. Tetra Tech will assist USAID in improving local governance, supporting commercial-scale rural electrification projects, and catalyzing local investment in renewable energy development.
Fluor wins Arizona solar construction job
The job of building the Arlington Valley Solar Energy II solar PV plant in Maricopa County, Arizona, will go to Fluor Corp. (Irving, TX) under a lump-sum engineering, procurement, and construction (EPC) contract awarded to the company by the developer, an affiliate of LS Power Group (New York, NY). Fluor has also received a separate contract to provide operations and maintenance (O&M) services at the 125 MW facility, on which Fluor has received full notice to proceed with construction. Fluor said that engineering and procurement is under way from its southern California operations center. The facility is expected to achieve full commercial operation by the end of 2013.
Fluor occupies a unique niche in the EPC market for wind and solar; see in-depth competitive profiles of this firm and dozens of others in CCBJ's Climate Change Consulting Report.
Primoris to construct waste-to-energy plants
Primoris Services Corp. (Dallas, TX) announced that its subsidiary Primoris Renewables and its teaming partners Synergy Renewables (Dallas, TX) and Dynamis Energy, LLC (Boise, ID) have received contracts from Sunbeam Synergy, LLC to construct two waste-to-energy facilities in Puerto Rico. The value of the contracts is estimated at $40 million. Primoris recently signed a cooperative agreement with Synergy Renewables, which is planning to develop and construct multiple waste-to-energy plants worldwide. Dynamis Energy is providing proprietary gasification technology for the projects. Each of the two facilities in Puerto Rico will use the gasification technology to process approximately 180,000 tons of municipal solid waste per year and generate 10 MW of electric power.
