The New Carbon Cycle

First Solar and NRG Announce Operation of 21 MW Thin Film Solar Plant in California

NASDAQ-listed solar company First Solar and NYSE-listed renewable energy company NRG Energy announced that they have started commercial operation of the 21MW solar photovoltaic plant in Blythe, California.

The plant was acquired last month by NRG through its wholly owned subsidiary NRG Solar. Electricity generated by the solar facility is being sold to Southern California Edison (SCE) under a 20-year power purchase agreement.

Located in Riverside County about 200 miles east of Los Angeles, the Blythe plant is the largest thin film PV project in the US, according to the company.

‘It is no surprise that America’s largest thin film solar project was built right here in California, where my Administration has successfully created a climate where green businesses can thrive,’ said California Governor Arnold Schwarzenegger. ‘It is forward-thinking businesses such as First Solar that will help California reach its nation-leading greenhouse gas reduction and renewable portfolio standard goals.’

First Solar expanded its offerings in California in 2008. The Blythe plant is a model for First Solar’s future large-scale solar developments.

‘With a three-month build-out, we are pleased to be bringing it online ahead of schedule,’ said Bruce Sohn, president of First Solar.

NRG Solar is NRG’s subsidiary company responsible for developing, constructing, financing and operating a multi-technology portfolio of solar power assets in North America. Headquartered in Princeton, New Jersey, Fortune 500 company NRG Energy’s power plants provide more than 24,000MW of generation capacity. NRG’s retail business, Reliant Energy, serves more than 1.6 million customers in Texas.

Could US-China Deal Go Forward without United Nations?

Before the Copenhagen meeting, I began telling clients that the US and China could negotiate a climate change arrangement and then bring along the other major developed and developing countries.  Once the US and China forge a deal, then the EU, Japan, and Australia would likely go along, and the other major developing nations such as India, Brazil, South Africa, and Mexico would have a keen strategic interest in agreeing to the Sino-American climate pact.  Copenhagen has shown that may be more of a probability.

The US and China were the major movers at Copenhagen.  Despite the drama of the small island nation of Tuvalu and the other G77 nations objections and shutting down of the meetings from time to time, the real players were the US and China.  The "Copenhagen Accord" as it is being called, was a US-China deal with participation from the players mentioned above.

From a strict carbon market perspective, with the US and China along with the EU, Japan, Australia in the developed country group, plus Brazil, Mexico, and South Africa in the major developing country group, this would be a huge carbon credit market.  It would be a huge forest carbon market--Indonesia would likely join to bring in their huge potential forest carbon projects.  The market could rise to hundreds of billions of dollars relatively quickly.

A new system outside the bureaucratic Clean Development System could be adopted and funded by the major countries.  Instead of the G8, we may have a C20 or C30 or so list of countries that determine the international greenhouse gas accord and the global carbon market.

Why would this happen?  If all 193 countries have to approve a post-Kyoto treaty, an agreement may be difficult to forge.  A C20 or C30 accord may thus become more likely.

Senators Kerry, Lieberman, and Graham Issue Outline of Possible Bi-Partisan Climate Bill

In a letter to President Obama on December 10, 2009, and what looks like an attempt to boost the US negotiations at the Copenhagen Conference of the Parties of the UN Framework Commission on Climate Change, three U.S. Senators issued their policy framework for developing a bi-partisan climate bill they hope will gather the 60 votes necessary to pass the Senate, and lead to an energy efficiency, energy independence, and climate change policy for the United States.

"Over the past month, we have been working together to develop consensus on a comprehensive pollution reduction and energy independence plan. Support is building to simultaneously create jobs, protect our national security interests, and improve our environment. As you depart for Copenhagen, we wanted to provide an assessment of where we see the debate heading in the United States Senate,” the Senators wrote today in a letter to the President detailing their outline.

 “Our discussions have led us to develop a basic framework for climate action, which is attached for your consideration. We look forward to working with you in the coming months to enact comprehensive pollution reduction and energy independence legislation,” wrote the Senators.

The proposed reductions would follow what the Obama Administration has proposed at the Copenhagen meeting, 17 percent reductions of greenhouse gas emissions by 2020 based on a 2005 baseline, with a long-term target of an 80 percent reduction, presumably by 2050.

Jim Rogers, CEO of Duke Energy, was quoted as having  said, "the sooner we pass climate change legislation - the better off our economy, and the world's environment - will be. If we go about it the right way, we can not only avoid unnecessary economic harm and dislocation, but we can also ignite a lower carbon, green revolution and more rapidly put this recession in our rear view mirror."

The letter provides the basic elements of the bill that they would craft.  A synopis of the letter follows below:

Better jobs, cleaner air.  It is our belief that a market-based system, rather than a labyrinth of command-and-control regulations, will allow us to reduce pollution economically and avoid the worst impacts of global climate change. It will also provide significant transition assistance to companies and consumers without using taxpayer dollars or driving up the national debt.

Securing energy independence.  We find ourselves more dependent on foreign oil today than any other time in our nation's history, and that is unacceptable. Every day, we spend nearly $1 billion to sustain our addiction to foreign energy sources - and we ship Americans' hard earned dollars overseas, some of which finds its way to extremist or terrorist organizations. 

The letter states that the proposal would encourage new clean energy technologies, energy efficiency, increase domestically produced oil and natural gas on land and offshore, and maintaining the ability to refine petroleum products in the United States is a national security priority.

Creating regulatory predictability. By failing to legislate, Congress is ceding the policy reins to the EPA and ignoring our responsibility to our constituents. We agree that providing the business mmunity as much certainty as possible is essential to attract investment, create jobs and generate the confidence necessary to reach our goals. The absence of national greenhouse gas emissions standards has invited   patchwork of inconsistent state and regional regulations.

Protecting consumers. It is critical to provide transitional assistance to households and businesses to  ase the shift to a low-carbon economy. We will provide support to help companies meet their compliance obligations and avoid driving up prices for energy consumers. We will include special protections for low- and middle-income Americans, who spend a disproportionately large amount of their income on energy.

Encouraging nuclear power. Additional nuclear power is an essential component of our strategy to reduce greenhouse gas emissions. We strongly support incentives for renewable energy sources such as wind and solar, but successful legislation must also recognize the important role for clean nuclear power in our low-emissions future.

Ensuring a future for coal. Our country has plentiful, accessible coal resources and infrastructure. It is a key component of our current fuel mix.

Reviving American manufacturing by creating jobs. Manufacturing is the backbone of our nation's economy, and we refuse to believe that the days of American leadership are behind us. Successful climate legislation will not send existing jobs overseas. Rather, pricing carbon will drive innovation - creating new opportunities for those who develop clean energy technologies, as well as those who build, install, and maintain them. We plan to provide significant assistance to manufacturers to avoid carbon leakage and ensure the continued competitiveness of American-made goods.  In addition to employing thousands in the building trades, our envisioned development of nuclear and wind power will also mean jobs and growth for our steel industry.

Creating wealth for domestic agriculture and forestry. While emissions from agriculture will not be regulated, climate legislation will provide farmers with new opportunities to benefit from reducing their carbon emissions. Offset projects and other incentives will enable farmers to develop new income treams, as environmentally-friendly farming practices dramatically increase in value once a price is placed on carbon.

Regulating the carbon market. We will support vigilant carbon market oversight, real-time transparency, adequate settlement requirements to control risk in the market and strong quality controls to ensure maximum effectiveness and clarity.

Climate change is a global problem that requires a global solution. Ultimately, climate
change must be addressed through a strong international agreement that includes real, measurable, reportable, verifiable and enforceable actions by all nations. American leadership is essential, but  action by the developing world is necessary to maximize the benefits of our effort.

Building consensus. We intend to continue to engage our Senate colleagues in the weeks ahead to develop sensible, effective climate change legislation that will create jobs, ensure our energy independence, restore America to a position of leadership in the clean energy economy and reduce pollution.

The full letter and the video of the press conference can be found as Senator Kerry's website.  

Reported Post-2012/Post-Kyoto Carbon Credit Sale at Reduced Price

PointCarbon reported a deal between Norsk Hydro and Statkrafte Energy and carbon fund C-Quest Capital.  Finding buyers for post-2012/Post-Kyoto carbon credits has been a challenge.  PointCarbon reported that carbon brokers said that such deal would likely reflect aprice of 6-9 euros per ton CO2e.    The current price for CERs under the Clean Development Mechanism would be about 14 euros.  The discount for post-Kyoto credits would thus be 5-8 euros--a significant reduction reflecting the uncertainty of the negotiations at Copenhagen and at UNFCC meetings thereafter.  If a treaty is not finalized until next December, these low prices may continue until then.

EPA Has Reportedly Issued Its Endangerment Finding as a Prelude to Greenhouse Gas Regulation under the Clean Air Act

EPA has reportedly issued its  "Endangerment Finding" as a prelude to regulation under the Federal Clean Air Act, even without any action by Congress on a climate change bill.  The issuance of the endangerment finding under the Clean Air Act follows a US Supreme Court ruling in 2007 that concluded that EPA could regulate greenhouse gases under the existing Clean Air Act.  That case involved mobile sources, such as cars and trucks, but the finding would apply to all sources including power plants, refineries, cement plants, lime plants, natural gas processing plants, and other sources of greenhouse gases.

 

http://www.msnbc.msn.com/id/34311724/ns/us_news-environment/from/ET

 

In another proposed rule, EPA is attempting to limit the regulation of stationary sources (not vehicles and other mobile sources) that emit 25,000 tons per year of greenhouse gases, including carbon dioxide, methane, and nitrous oxide to name a few.  The goal would be to exclude smaller sources of emissions.

 

EPA also recently issued a greenhouse gas reporting rule that goes into effect January 1 of next year.

 

These are all steps EPA is taking to move forward with a greenhouse gas regulatory system under existing statutes as Congress considers a climate change bill.

 

Litigation would likely be filed challenging these various rules, so without Congressional action, much of the rules would end up in court for review.