Showing posts with label project finance. Show all posts
Showing posts with label project finance. Show all posts

Monday, August 13, 2012

Study: Solar ITC Pays For Itself

Source:  Novogradac & Company Renewable Energy Tax Credit Resource Center

The U.S. Partnership for Renewable Energy Finance (US PREF) yesterday released a study that says that the investment tax credit (ITC) for solar energy projects is more than offset by the tax revenues generated in leases and power purchase agreements (PPA). US PREF’s “Paid in Full” reports that a $300,000 commercial solar credit can create for the federal government a $677,627 nominal benefit in lease and PPA scenarios during a 30-year period. Additionally, the report said that the ITC provides a 10 percent internal rate of return to the federal government and has enabled financing mechanisms that generate a positive return for the government.


* The investment tax credit (ITC) for solar photovoltaic (PV) projects, expanded under the

George W. Bush administration as a part of the Energy Policy Act of 2005 and modified

as a grant-in-lieu of tax credit program under the Obama Administration, has enabled

financing mechanisms that generate a positive return for the federal government.


* Over the life of a solar photovoltaic (PV) asset, the initial cost of federal expenditures

associated with the ITC can be more than offset by the tax revenues generated in lease and

Power Purchase Agreement (PPA) scenarios, both of which create fixed payment structures

and provide a positive financial return on investment to the federal taxpayer.

*This paper demonstrates that, over the life of solar assets, lease and PPA financing
structures can deliver a nominal 10% internal rate of return (IRR) to the federal government
on the federal investment tax credit (ITC) for residential and commercial solar projects.

* Based on this analysis, a $10,500 residential solar credit can deliver a $22,882 nominal
benefit to the government and a $300,000 commercial solar credit can create a $677,627
nominal benefit in lease and PPA scenarios over a 30-year period (the minimum expected
life of the assets).

* The fiscal return demonstrated in this model is independent of, and additive to the
numerous other benefits of solar projects, including job creation, energy independence,
the preservation of natural resources and the health benefits of cleaner air.


For questions about the ITC, contact Stephen Tracy at (415) 356-8000 or at stephen.tracy@novoco.com.

Tuesday, August 30, 2011

State of the Renewable Energy Finance Markets

Post-stimulus Financing: Will Renewable Growth Continue?
Will private lenders and investors pick up where government leaves off in a post-stimulus world?

LONDON – Money is flowing worldwide for many forms of renewable energy, as the industry presses forward with dramatic growth. CleanEdge reported US$188.1 billion in global revenue for biofuels, solar and wind energy in 2010, a 35.2% surge over 2009. Bloomberg New Energy Finance (BNEF) found that clean energy investment worldwide reached $243 billion in 2010, nearly double the sector investment just four years earlier. And venture capital investment for clean technology in the US rose 54% in the first quarter of 2011 compared with the same period one year earlier, in a trend led by solar energy companies, according to Ernst & Young.

What has buoyed the market? Many in the renewable energy sector thank stimulus funds infused into the industry by governments throughout the world. But will the growth continue as stimulus funding winds down? Will private lenders and investors pick up where government leaves off in a post-stimulus world?

Several deal makers describe the state of today’s finance markets and provide their outlook into 2012 and beyond, including how hard – or easy – it is to attract private tax equity, project finance, venture capital and other types of loans and investments. Even as the world economy continues to struggle, renewable energy fares far better than many sectors.

REVIVAL OF U.S. TAX EQUITY?
Jonathon Gross, a principal with US accounting firm Reznick Group and head of the firm’s alternative energy practice in North Carolina, helps match renewable energy project developers with investors. He specialises in tax equity investments, where the investor, in effect, buys a project’s tax benefits to offset tax liability. Goldman Sachs was one of the more notable tax equity investors before the financial collapse. But when profits dropped after the crash, so did tax liabilities. As a result, tax credits had little value and investors fled.

In response, the US government created a cash grant to help renewable energy projects during this phase. The grant differed from a traditional tax credit in that developers received money up front, rather than after the project was built or operating. This helped renewable energy developers secure project financing when tax equity investors vanished. The grant, however, is being phased out beginning in 2012.

Fortunately, tax investors are returning to the market, said Gross. But, he added, “I don’t know if it will be fast enough for the developers who are getting the grant.” Gross predicts a dip in US project development in early 2012 when the federal cash grant expires for projects that do not meet certain predevelopment requirements.

Meanwhile, a player known as the tax equity syndicator is increasingly moving into energy. Syndicators, such as Stonehenge Capital Company and Red Stone, connect private equity investors with developers. They more commonly work in low-income housing investment, but syndicators lately have been attracted to state renewable energy credits, Gross said.

Flat Water Wind Farm, a 60-MW Nebraska project, was a recent beneficiary of a tax equity deal. Completed in April 2011, the deal was arranged between U.S. Bancorp (USB), Gestamp Wind North America, Spanish Banco Santander and other lenders. USB has committed more than $400 million of renewable energy tax equity to finance over $800 million of renewable energy projects in the US, primarily in the solar and wind energy markets.

INNOVATIONS, CREDITS AND PROJECT FINANCING
In Europe, it’s unclear where the renewable energy sector will find the capital to build enough projects to meet 2020 renewable energy targets. Assuming it will cost about €350 billion to achieve the goals, each of Europe’s 40 banks that are active in the sector would need to loan €750 million annually for the next 10 years, according to Ernst & Young’s paper, Funding Renewable Energy in a Capital-Constrained World.

What will those sources be? European utilities might fill in some of the gap, but renewable energy will still need alternative pools of equity and debt to finance projects. One source might be industrials, especially those that act as supply chain co-sponsors in the project development phase, said Ernst & Young.

In the US, renewable energy credits are gaining importance in helping developers secure financing. Banks are apt to take an applicant more seriously if it has a long-term contract to sell its RECs to a utility or other credit-worthy buyer (as opposed to selling RECs on the spot market or under short-term deals).

Solar renewable energy credits (SRECs), only available in certain states, are created by solar energy projects. One MWh generated by a solar installation equals one SREC. Utilities and retail suppliers buy the credits from projects and use them to meet state government requirements that a certain amount of the electricity they sell comes from solar.

But there was much talk in Spring 2011 about the collapse of the famed New Jersey SREC market. New Jersey is a crucial market for solar developers in the US, the second largest to California, with an exceptionally mature SREC market, according to the Solar Energy Industries Association’s US Solar Market Insight: First Quarter 2011.

New Jersey’s SREC was a victim of its own success. The state’s high SREC prices attracted so much solar development that the market became oversupplied with SRECS and trading prices plummeted for the credits. SEIA predicts an end to New Jersey’s market growth in late 2011/early 2012 as a result of the overheated SREC market.

However, Kent Rowey, head of Freshfields’ Americas Energy and Infrastructure practice, says that stories are overblown about the death of New Jersey’s SREC market. “Smart traders think that the market has mispriced the SREC, that the forward curve is incorrect,” he said.

Why? Too often analysts forecast SREC supply based on the project applications that are before regulatory bodies, and not on the actual projects being built, according to Rowey. This creates an overly high forecast for solar development. In reality, a good number of the projects that are proposed will never be built. Rather than counting applications, savvy financiers conduct their due diligence “the old-fashioned way” – they count rooftops from helicopters to determine what’s really being installed. What they are finding is that fewer projects are being built than expected, and therefore fewer SRECs will be available in the future than is now believed. Therefore, the New Jersey SREC market may not be as overheated as some believe.

Beyond SRECs, Rowey sees the overall debt market for renewable energy as buoyant. “If there is any kind of limiting factor, it is probably that there is an inverse relationship between the size of the deal and the work that goes into it,” he said. Big banks prefer large loans because it takes just as much work to administer a large loan as a small loan, but the returns are lower.

German commercial banks are leaders in providing debt capital for project finance. Rowey also sees more US banks eyeing renewable energy projects; some are teaming up with pension funds.
“There still is liquidity in the debt market for renewable projects. It is one of the sectors in the infrastructure market that hasn’t really been hit as hard,” he said. Even though underwriting standards are more stringent since the market crash of 2008, “for the right project and right sponsor, renewable energy is a space where traditional financing is available.”

WHAT FINANCIERS LIKE
Michael Lorusso, managing director and group head for US-based CIT Energy, which focuses on project and structured finance, shares this view. He says that if the developer offers a financeable project, the lender will be there. “It is incumbent on the developers to do something that is financeable and not push the market to the point where they are stuck with a project that cannot be financed,” Lorusso said.

CIT Energy evaluates projects much the way large banks do. The financing and advisory firm prefers proven technologies and shies away from technology risk. Projects should have equipment contracts with established manufacturers, and a solid construction contract, Lorusso said. Applicants for finance also should produce a power purchase agreement with a solid buyer, like a utility or industrial customer, which minimises the project’s price risk in the eyes of the investor. Or the project may use a short-term contract that relies on commodity price hedges with third parties, like Goldman Sachs or Morgan Stanley. All government permits must be in place.

Lorusso likes wind, solar and geothermal energy, as well as hydroelectricity, although he noted that less hydroelectricity is in development than the other three resources. He is skeptical about biomass because he sees its fuel source as less reliable, or at least harder to quantify through statistical analysis than wind, solar and geothermal. He receives many inquiries for new technologies that use fuel cells, wave energy, biofuels and gasification, but says often they are unproven, unreliable or uneconomic, and therefore not yet good candidates for financing.

Even though wind energy is high on his list of strong investments, Lorusso sees that market slowing. The sentiment is that “the best sites have been taken, the low hanging fruit has been picked,” so it’s becoming more difficult to develop wind farms, he said. In addition, utilities are less apt to enter into lucrative long-term power sales agreements with wind farms, given today’s low natural gas prices and depressed demand for electricity. Solar energy, on the other hand, appears to be more quickly moving toward grid parity. It also offers the promise of adaptable consumer applications as it becomes integrated into shingles, windows and signs, he said.

Not all solar, however, is created equal when it comes to financing. The industry seems to be developing under what Lorusso described as a bifurcated “barbell effect.” On one side of the barbell is the proliferation of small rooftop solar installations, almost “real estate plays,” he said, that are increasingly aggregated to make them more appealing to financers. On the other side of the barbell are fewer, but massive, utility-scale projects with well-structured deals that attract financial backing. One example is the 392-MW Ivanpah Solar Energy Generating System, being built in California’s Mojave Desert with the help of a $1.6 billion loan guarantee from the US Department of Energy.

While small and large deals make it onto the barbell, mid-sized solar projects often find it hard to secure traditional financing. These $2-3 million installations on commercial roofs lack the economies of scale to attract large banks. As far as the banks are concerned, he said, conducting due diligence on these projects takes too much time for the size of the transaction. Therefore this mid-range solar project often must rely on all equity deals, aggregation, or in some cases small regional banks.
A solar company needs roughly a $20-$50 million pipeline of projects just to catch financiers’ attention, said Scott Wiater, president of Standard Solar, the highest ranking renewable energy company on Inc. magazine’s top 500 fastest growing American companies for 2010. “It’s all about scale, you have to have scale,” he said.

Having a signed power purchase agreement is crucial, Wiater added. “The people that offer tax equity and debt – their mindset is we don’t want to take any pre-development risk.” With a power purchase agreement in hand, a solar company can secure debt financing relatively easily now; tax equity financing less so, he said. “You can find tax equity, but it is expensive.”

Meanwhile, Standard Solar has seen an uptick in the number of commercial enterprises that install solar panels to hedge against future energy rate hikes. Some of these deals are all cash and others operate under power purchase agreements. ‘We are seeing just normal commercial customers installing fairly large systems,’ he said, adding, “If natural gas pricing wasn’t as low as it is, we would have much more business. But with that said, we can still be competitive even with the currently depressed energy prices.”

COMMUNITY BANKS FOR SMALL PROJECTS
For the truly small renewable project, conventional financing can be extremely hard to find. But small specialised or community banks are increasingly filling this niche by lending to ventures that have a hard time accessing conventional capital. Many of these banks function as non-profit institutions that do not have to answer to shareholders, so focus on investments with social impact, such as day care centers or schools. For such projects, “there are a world of government programmes that aren’t going to go anywhere, that are not in danger of being zeroed. We have been looking for how to take those tools and put capital in the green economy,” said Melissa Malkin-Weber, green initiatives manager for Self-Help Credit Union, nonprofit community development lender, real estate developer, and credit union with offices in California, North Carolina, and Washington, D.C.

For example, in the US small renewable energy projects can take advantage of the new markets tax credit, set up in 2000 for real estate construction and renovation in low-income areas. “Renewable energy looks a lot like commercial real estate from an underwriting perspective,” she said.
Renewable energy developers, such as solar installers, can use such credits to attract private capital. The developer can parlay the credit into a below-market interest rate and more flexible loan term. Loans can be as small as $5000, although the sweet spot tends to be $75,000 to $10 million, she said.

YOUNG AND UNSUBSIDISED
New technologies, those just getting off the ground, typically seek out a different kind of investor than those already accepted by commercial markets. Still unproven, and not ready for full-scale commercial deployment, these technologies often look to angel investors, venture capitalists and government funding.

The good news is that an increasing amount of VC money has been flowing to renewables. In the US, investors in new technologies look to renewable energy as the “next major economic transformation frontier,” according to Venture Capital’s Role in the US Renewable Energy Sector, a white paper by the US Partnership for Renewable Energy Finance. Before 2005, renewable energy accounted for two percent of VC investment in the US; by 2010 it had reached 15 percent.
China, too, with its growing appetite for clean energy, can be a rich launching point for new renewable energy technology, according to Stephen Edkins, partner in Diverso, a Shanghai-based venture capitalist firm that specialises in connecting technology innovators with opportunity in China. Diverso’s clients included Ilika, a clean-tech materials company that works in energy storage, and TMO Renewables, the developer of a new process for converting biomass into fuel ethanol. Both are based in the UK.

Direct subsidy is difficult to come by in China, and that’s just fine with Diverso. Much like other VCs, Diverso looks for technology that can stand on its own.

“Technological innovation is about allowing renewable energy to be competitive in the absence of subsidy,” said Edkins. While direct subsidies may be hard to come by in China, the government backs renewable energy in other ways, particularly through favourable terms from its state-owned banks, which “act as a lever,” Edkins said.

Opportunity is great for new technology in China’s hungry energy market, but also daunting. The language barrier alone can stymie outside businesses, according to Diverso.

Brian Kinane, managing director at Yorkville Advisors, also works with junior energy companies, but in Europe, where the challenges are different. “Equity markets are difficult to access for companies at present. Many investors are concerned that there is correction coming in the market. There is a feeling that the market has had quite a high run-up and now there is a greater sense of volatility,” he said.
This slowdown is being spurred by government austerity measures throughout Europe, as well as talk that China’s economy is cooling. The correction is expected to be temporary, with a positive economic trend reasserting itself, but investors “don’t want to be caught up in that correction,” he said.
Longer term, Europe’s renewable energy finance sector is likely to benefit from Germany’s decision to close down its nuclear power stations, he added.

HELP FROM EXPORT BANKS
Meanwhile, government export credit agencies, such as the US’ Export-Import Bank (Ex-Im Bank), Export Development Canada and Germany’s Hermes Cover, have been filling in the financing gaps for equipment suppliers. Export banks are especially well suited for small transactions that hold little interest to conventional lenders.

For example, Ex-Im Bank offers a streamlined application process known as Renewable Express. Solyndra saw its financing processed in just 41 days. The manufacturer used the programme to finance its sale of solar panels to an international supermarket chain in Belgium. The June 2011 deal offered Solynda not only a favourable interest rate, but also a long financing term. The US export bank guaranteed an 18-year €7.7 million loan ($10.3 million) to finance panels for the 3 MW project.

NOT A BUBBLE
Kathleen Marshall, managing director at Green Solar Finance, says that stimulus funding did what it set out to do. Financing is again available for renewable energy. “What we are seeing is tremendous movement on almost all fronts,’ she said. “We’re seeing many more financial entrants coming in – philanthropic investors, insurance and bank lenders.” She credits much of the movement to the cash grant offered in lieu of a tax credit. “It provided a strong initial catalyst to start moving things. I think what it really did is it created scale. It created tremendous scale and success in getting projects done.”
Ultimately, though, for a financing deal to work it takes “tremendous collaboration,” she said. If a subsidy goes away, parties must be willing to be flexible and realistic about yields. And then “a deal will get done,” she said. In any case, whether stimulus money stays or goes, what’s clear to renewable energy investors now is that this industry is “not a bubble – the horses are out of the gate and they are running,” Marshall said.

Monday, April 25, 2011

Update on California's Upcoming Utility-Scale Solar Projects from The Desert Sun


Laura Abram of First Solar holds a photograph with a simulated image
of what the terrain near Desert Center will look like after solar panels
are placed in the area behind her.  Omar Ornelas, The Desert Sun
Solar: California's new gold rush
Green energy offers the prospect of an economic boon, but some worry the environmental, cultural cost is too high

The Desert Sun - Keith Matheny 

It's been called California's second gold rush: the clamor by large solar companies to stake a claim in southern California's open deserts and capture one of its most abundant resources — sunlight.

While many cheer the cleaner energy and economic possibilities utility-scale solar development may bring to a job-starved region, some environmentalists, Native Americans and others are critical of the process, saying it's running roughshod over threatened plant and animal species and culturally sensitive areas.

The California Energy Commission and federal Department of the Interior have approved eight major solar projects in Southern California since last year, including seven projects in the deserts north and east of the Coachella Valley. All but two of the approved plans utilize largely undeveloped public land managed by the federal Bureau of Land Management. The projects are expected to generate:

• Nearly 3,600 megawatts of non-carbon-emitting electricity, enough to power almost 1.8 million homes.

• Some 5,500 jobs during construction of the projects, and nearly 1,000 long-term operational jobs.

• More than $15.2 million in annual property taxes, and hundreds of millions more in sales taxes as the projects are built.

Another eight utility-scale solar projects are also in the permitting pipeline for Riverside and Imperial counties, promising an additional 2,173 megawatts of renewable energy generation. And long-range plans are in the works that could open up millions more public acres to solar development in six western states, with the largest proposed solar energy zone in Riverside County.

“California is the national leader in clean energy, and our great state is poised to become the world leader in renewable energy generation,” Gov.Jerry Brown said Monday.

Brown earlier this month signed a bipartisan bill to further increase California's renewable energy portfolio standard, now requiring that utilities get one-third of their electricity from renewable sources by 2020, up from 20percent.

Critics contend the politically driven fast track to approving projects on tens of thousands of acres of public lands will cause irreparable damage to threatened plant and animal species, as well as to historic, prehistoric and culturally important sites.

“The irony is, in the name of saving the planet, we're casting aside 30 or 40 years of environmental law. It's really a type of frenzy,” said Christine Hersey, a solar analyst at Wedbush Securities who closely follows environmental concerns associated with solar projects.

It's an issue that pits green against green, environmentalists prioritizing the reduction of atmospheric emissions that contribute to climate change versus those most interested in threatened species and the near-pristine desert ecosystem.

“When you take a look at the political climate, the economy, and you add that to the recent media notoriety of the climate crisis — which I'm not a skeptic of at all — you've got a rather vicious cocktail where environmental groups don't really know how to handle this,” said Kevin Emmerich, a former park ranger turned biological consultant who lives in the Mojave Desert in Beatty, Nev., just across the border from California.

“A lot of them are thinking, ‘The climate's changing; the desert is disappearing anyway; we may have to sacrifice some in order to save the rest.' That support has helped expedite this process.”

The state of California and federal government are spurring the desert solar development, offering billions of dollars in federal loan guarantees, cash grants and tax breaks. On Monday, U.S. Energy Secretary Steven Chu announced $2.1 billion in federal loan guarantees for one project, a 1000-megawatt proposal near Blythe.

Another solar plant in development, Ivanpah in eastern San Bernardino County, received $1.37 billion in federal loan guarantees in February.

Janine Blaeloch, executive director of the nonprofit Western Lands Project, questioned the huge taxpayer commitment to the solar projects.

Blaeloch is a member of Solar Done Right, a coalition of public land activists, solar power and electrical engineering experts, biologists and renewable energy advocates critical of placing large solar projects on relatively unspoiled public land. She co-authored a report released earlier this month on governmental push for solar in the open desert, entitled “Wrong from the Start.”

She noted that corporate investors in companies developing solar projects in the California desert include Chevron, BP, Morgan Stanley and Goldman Sachs.

“It's big money and big oil,” she said. “It's the same people who have driven us into the hole we're in now trying to get us into another one.”

NextEra Energy's Solar Electric Generating Systems facility near Kramer Junction,
which is near Barstow, in San Bernardino County. The company is planning a similar
solar thermal plant to be located on federal land east of the Coachella Valley.
 - NextEra Energy
Gold mine in the desert

Perhaps ironically to some, the modern push for large-scale desert solar, it can be argued, started under former President George W. Bush and California Republican Gov. Arnold Schwarzenegger.

“The gold rush really started after George W. Bush signed the Energy Policy Act of 2005,” which provided tax incentives and loan guarantees for California desert solar development, Hersey said. “That's what really started the speculators.”

Under Democratic Gov. Gray Davis, California in 2002 passed a renewable energy portfolio standard calling for 20 percent of California's electricity to come from renewable sources by 2017. Schwarzenegger in 2006 moved the 20 percent target up to 2010.

Interest in solar development on federal land in the Southern California desert jumped from 20 applications in 2006 to about 150 the following year, said Greg Miller, BLM renewable energy program manager for the California Desert District.

“We had what we called a land rush,” he said.

BLM had previously approved use of federal desert lands for things such as power line corridors — never anything of the size of solar energy projects, Miller said.

“We were kind of learning as we were going,” he said.

In 2008, Schwarzenegger signed Executive Order S-14-08, streamlining renewable energy permitting and collaborating with federal agencies to develop the Desert Renewable Energy Conservation Plan, to facilitate desert energy development while maintaining natural resources conservation.

The push for solar has continued and expanded under Democratic President Barack Obama, whose administration has made green energy a priority, Hersey said.

“They can't do it fast enough,” she said.

Schwarzenegger and U.S. Interior Secretary Ken Salazar in October 2009 signed a memorandum of understanding between the state and Department of Interior that, among other things, developed a fast-track permit approval process allowing as many large-scale solar projects that could to begin construction by Dec. 1, 2010, making them eligible for American Recovery and Reinvestment Act, or federal stimulus, funding.

The fast-tracking “demonstrates how separate government processes can be coordinated without cutting corners or skipping any environmental checks and balances in the projects,” Salazar said Oct. 25 as he announced approval of the Blythe solar project.

BLM Director Bob Abbey in October acknowledged what was at stake.

“With something as momentous as the introduction of large-scale solar development on the public lands, we have one chance to do things right,” he said. “That's why we did complete environmental analyses on these projects with expanded opportunities for public participation.”

But Blaeloch questions that assertion.

“They are not saying to the public, ‘We want to know how you feel about this;' They're saying, ‘We're going to do this and you can comment on it if you want,'” she said.

“These solar plants will introduce a huge amount of damage to our public land and habitat. The sites will be turned into permanent industrial zones. Even if the plants are dismantled after their life is expired, you cannot restore the desert to what it was.”

Solar Done Right's report contends government officials could take advantage of already disturbed lands such as brownfield sites and former agricultural fields. The U.S. Environmental Protection Agency identified hundreds of thousands of acres of such sites, with the potential to generate 920,000 megawatts of solar electricity, the report notes. Distributed generation on rooftops is another option, Blaeloch said.

“I think those are really good questions to ask,” said Amy Fesnock, BLM's chief wildlife biologist in California.

“BLM doesn't have the ability to say, ‘Go build this on private land.' We don't have authority on private land. We can only assess the projects that are presented to us, on lands over which we have authority.”

BLM stands to bring in more than $10.2 million a year in rental fees from the solar companies permitted or nearing approval to locate in the desert, along with more than $25 million in additional megawatt capacity fees.

Hashing out the details

Though projects are approved with thick, multi-volume environmental impact statements, many details aren't yet resolved and are being worked out on the fly as work commences, including final plans on what will ultimately happen with endangered desert tortoise found on solar project sites.

Preliminary plans include moving the tortoise to other habitats, known as translocation — a controversial practice that top tortoise biologists say leads to high mortality rates.

A panel of independent scientists in October prepared a report for officials working on the Desert Renewable Energy Conservation Plan, that concluded: “In general, moving organisms from one area to another ... is not a successful conservation action and may do more harm than good to conserved populations by spreading diseases, stressing resident animals, increasing mortality, and decreasing reproduction and genetic diversity.

“Transplantation or translocations should be considered a last recourse for unavoidable impacts, (and) should never be considered full mitigation for the impact.”

In approving Ivanpah, California Energy Commissioners stated, “We assume that a substantial number of translocated tortoise may perish.”

But commissioners concluded the proposed mitigation efforts will make the impacts acceptable.

“Whether to approve this project or not is a policy decision to be made by the Energy Commission, after considering all the relevant factors, including scientific opinion,” they stated. “Input from the Advisory Panel is informative but we are not bound by any policy recommendations it makes.”

In addition to tortoise, the commission listed numerous other impacts from Ivanpah: loss of multiple-use lands, loss of habitat for the threatened Mojave milkweed and desert pincushion, increased traffic on Interstate 15 and degradation of scenic vistas. However, the commission found, the “project benefits outweigh the significant impacts identified.”

“The project helps address a global climate change problem of paramount importance and responds to state laws requiring a shift to renewable electricity sources,” the energy commission's Ivanpah decision states.

“Overriding concern” citations were used by the energy commission in the approval of other desert solar projects as well, said Jim Andre, a desert botanist with UC-Riverside's Granite Mountains Desert Research Center in eastern San Bernardino County.

“A decision is being made to waive significant impacts and to go forward with these projects as quickly as possible, without even acknowledging the science,” he said.

It's a similar story with cultural resources.

A June Energy Commission staff report on the Genesis solar project looked at cumulative impacts on cultural sites from past, present and likely future solar development.

“This analysis estimates that more than 800 sites within the I-10 corridor, and 17,000 sites within the Southern California Desert Region, will potentially be destroyed,” the report stated. “Mitigation can reduce the impact of this destruction, but not to a less-than-significant level.”

An economic boon

But large-scale desert solar development proponents say use of the BLM-managed lands provides an opportunity to shape projects in ways that minimize negative impacts that other tracts of land might not.

First Solar, a company based in Tempe, Ariz., is nearing final approval of its Desert Sunlight project, a photo-voltaic solar plant planned north of Desert Center, a tiny community about 50 miles east of Indio off Interstate 10.

The project at its inception secured 19,000 acres of BLM land, studied it with biologists and archaeologists, then scaled and modified the project footprint to minimize impacts to biological and cultural resources, First Solar project director Kim Oster said.

Removed were a bighorn sheep movement corridor, a potential desert tortoise corridor, an area of threatened foxtail cactus and “significant prehistoric resources,” she said.

“To combat climate change, changing our energy use has to be part of the solution. It will provide a significant solution to global warming for the future, while providing green jobs now.”

First Solar on Monday informed Desert Center community leaders of plans to provide a $350,000 community development fund for locally identified priorities such as local school and library improvements.

“Everybody around here thinks it's a great project,” said Ken Statler, owner of McGoo's Country Store in Desert Center.

“They're willing to help out the county and the area. There are no jobs available out here.”

The solar construction and ongoing operational jobs will “undoubtedly” help his store, Statler said.

“Where else are they going to get anything?” he said. “We had two other mini-marts out here and they closed down. You can't get gasoline; it's closed down.

“We need some life out here in the desert. That will definitely help us.”

Desert Center resident John Beach earlier this month landed a job in procurement with NextEra's Genesis project.

The currently proposed projects “bring an economic boost to an area that has very high unemployment and not very much in the way of business,” he said.

But community members generally are more apprehensive about what may be coming later, Beach said.

Federal agencies are currently working on an overarching framework for solar development on public lands in six western states, including California, called a solar programmatic environmental impact statement.

The plan calls for creation of 24 federally designated solar energy zones, areas deemed most likely to work for large-scale solar development while minimizing environmental and cultural impacts. The largest of the zones, at 202,000 acres, is in eastern Riverside County's open deserts.

“That's not reasonable,” Beach said.

“We're going to end up having a disproportionate share of all of the projects and having no more open desert. People are saying that doesn't sound right.”

But the federal report recommends opening up even more land to solar development than the 667,384 acres currently under consideration across western states. Another 21.5 million acres of federal land could be considered for renewable energy development, including 1.7 million more acres in California, with 205,000 acres of the total in the deserts surrounding the Coachella Valley.

Though more than a dozen major solar projects have been approved or are nearing approval, the work on considering the cumulative impacts of them all is in many ways only beginning.

The Desert Renewable Energy Conservation Plan is not scheduled for completion until next year.

“The goal of the DRECP is to approach renewable energy in a more organized fashion. The question really is, will that be in place in time to be of benefit to the planning?” said Gail Barton, principle planner for Riverside County and the county's representative on the committee developing the plan.

Solar projects are currently being considered “consistently with the law,” Barton said.

“Is that the best kind of planning? Probably not. With more comprehensive planning, you tend to look more thoughtfully at things.”

In December, after approving seven large desert solar projects, the California Energy Commission solicited applicants to conduct a study examining the “cumulative biological impacts framework for solar energy projects in the California desert.”

A Sierra Club lawsuit against the Calico solar project in San Bernardino county was dismissed by the California Supreme Court April 13. Legal challenges remain on other solar projects, filed by both environmentalists and tribal members who claim they were not properly consulted, and that the projects fail to protect species and cultural sites as required under federal law.

To many in the rest of the country, local concerns about the desert solar projects' impacts aren't the priority.

“Societally, this is the kind of change that helps the whole country, the whole world,” said Kenneth Zweibel, director of the George Washington University Solar Institute in Washington, D.C.

“There's much bigger value in helping the whole society, the whole world, than in the local issues. Something you are trying to protect is being changed, but it's helping so much in terms of climate change, energy self sufficiency and clean energy, it's a sacrifice that's appropriate to take.”

Wednesday, April 13, 2011

Google Invests in BrightSource's 392 MW Ivanpah Solar Project

Google making big investments in solar energy


By: Chris Meehan, Clean Energy Authority.com

Apr 13, 2011
Is the search giant on its way to becoming a renewable energy giant?

Last week, Google made what sounded like a big investment in solar when it announced that the company bought a 49-percent stake in an 18.4-megawatt photovoltaic farm in Brandenburg, Germany.

But yesterday (April 11), it announced that it was purchasing a $168 million stake (roughly 10 percent) in Brightsource’s 392-megawatt Ivanpah Solar Electric Generating System. In all, the company has now invested more than $250 million in clean energy.

“We have been active in the renewable energy sector for some time, having invested in several innovative companies through Google.org, and more recently, making corporate investments in clean energy projects, like two North Dakota wind farms, an offshore wind transmission line, and these two solar investments over the last week,” said spokesperson Parag Chokshi.

Chokshi could not discuss what type of return on investment the company expected from the projects.
“We're interested in investments that have attractive returns and spur more deployment and development of compelling renewable energy technologies,” he said. “That includes solar photovoltaics in Germany, and power tower technology at Ivanpah here in the U.S.”

“We need smart capital to transform our energy sector and build a clean energy future. This is our largest investment to date,” wrote Rick Needham, Google’s director of green business operations in Google’s official blog. “We’re excited about Ivanpah because our investment will help deploy a compelling solar energy technology that provides reliable clean energy, with the potential to significantly reduce costs on future projects.”

News of Google’s investment in the Ivanpah plant came on the same day that the DOE announced a $1.6 billion loan guarantee to support development of the Ivanpah project. The project is largely being financed NRG.

“We hope that investing in Ivanpah spurs continued development and deployment of this promising technology while encouraging other companies to make similar investments in renewable energy,” Neeham wrote.

Google has plans for further clean energy investments, according to Chokshi.

“We are continuing to look for new ways of advancing clean energy,” he said.
But Google isn’t just buying stakes in clean energy projects, it’s also using it to help power its operations.

“We have a 1.6 MW solar installation at our Mountain View headquarters,” Chokshi said. “It was built in 2007, and was, at the time, the largest corporate solar installation in the U.S.”













RELATED LINKS

http://cleantechnica.com/2011/04/12/googles-largest-cleantech-investment-yet-in-california/

http://www.eweek.com/c/a/Green-IT/Google-Pumps-168M-into-BrightSource-Solar-Power-Tower-228810/

http://cleantechnica.com/2011/04/12/googles-largest-cleantech-investment-yet-in-california/

Monday, January 24, 2011

Chadborne & Parke LLP's Project Finance NewsWire January 2011

Click here for Chadborne & Parke's latest Project Finance Newswire, which we consider to be required reading for clean energy project finance participants.

IN THIS ISSUE

1 More Subsidies for US EnergybProjects
8 DOE Loan Guarantee Update
12 California Cap-and-Trade Program Takes Shape
15 California Settlement Settles Old Scores and Charts New Paths for Generators
18 Master Financing Facilities for Solar Projects
29 Turkey Moves to Boost Renewable Energy
31 Cellulosic Biofuels: The Future Is When?
38 PPPs in the Middle East
42 Environmental Update

Wednesday, April 28, 2010

Update on the Cash Grant and More - Chadbourne & Parke's April Newswire

Chadbourne & Park's April 2010 Newswire is available here.

Again, Chadbourne has provided excellent up-to-date information on matters relating to the clean energy project finance market.


In This Issue
1 Strategies for Starting Construction
5 Germany Cuts Solar Subsidy
8 Update: Tax Equity Market
20 Swap Gets Wholesale Generator Into Trouble
22 Tax Credits for Green Manufacturers: Who Will Use Them and How
27 Court Orders Lender to Continue Funding Defaulted Loan
28 Shedding Assets Quickly in Bankruptcy
34 Environmental Update 


Strategies for Starting Construction
by Keith Martin and John Marciano in Washington, and Eli Katz in New York

FULL CREDIT TO CHADBOURNE & PARKE

The race is on to get renewable energy projects in the United States under construction by year end to qualify for cash grants from the US Treasury. Developers are pursuing different strategies. It is not enough merely to have made a large down payment toward turbines, modules or other equipment for the project by year end. A senior Treasury source said the government is looking for economic activity during 2010. A developer must show work at the site or at the factory on equipment for the project during 2010. The grants are 30% of the project cost and are paid on new wind, solar, geothermal, biomass, landfill gas, waste-to-energy, ocean energy and fuel cell projects that are completed in 2009 or 2010 or that start construction in 2009 or 2010. Grants of up to 10% of project cost are also paid on small cogeneration facilities of up to 50 megawatts in size. Projects that merely start construction in 2010 must be completed by a deadline. The deadline is 2012 for wind farms, 2016 for solar, small cogeneration and fuel cell projects and 2013 for other types of projects.

Congress may ultimately give companies more time. A bill in the House would give developers another two years through December 2012 to start construction without changing the deadlines to complete projects. However, the odds of such an extension at this point are probably a little better than 50%. Most developers are taking steps to start construction in case there is no extension.

Two Ways 


The Treasury Department explained what it means to start construction in written guidance on March 15. The guidance left many unanswered questions. The Treasury answered some of the questions since then in private meetings and in public statements at industry conferences.There are two ways to show construction started. One is to show there was “physical work of a significant nature” on the project during 2010. The Treasury said that “the beginning of excavation of the foundation, the setting of anchor bolts into the ground or the pouring of concrete pads of the foundation” at the site count as such work. It also counts if physical assembly of major components starts off site at a factory. However, the developer must have a “binding” contract in place before such work starts in order to count work done by an equipment supplier or other contractor. To be “binding,” the contract must be more than an option to choose equipment later. The Treasury said “the amount and design specification of the property to be purchased” must be clear from the contract. The contract should not limit damages if the developer walks away to less than 5% of the contract price. Any conditions to performance by a party must be outside the control of the parties. Thus, for example, if the developer must give a notice to proceed before the contractor will start work, the notice should be given before year end. It is not clear whether a contract between related parties can be “binding.” It is best to assume not. There is a risk that amending the contract after work starts could lead to loss of grandfather rights. The guidance suggests that it does, but the Treasury may still be thinking about this issue. The guidance said that any amendment must be “insubstantial.” Minor modifications in design are not a problem; an example is the later addition of a “cold weather package for wind turbines.” The IRS used a similar standard in 1986 after the investment tax credit was repealed. Projects that were under binding contract before the repeal to be built still qualified for an investment credit provided there was no “substantial modification” of the contract later. An amendment that increased the contract cost by more than 10% was considered substantial.


Ellen Neubauer, the cash grant program manager, said at a wind industry finance conference
in New York in early April that it is the start of physical work of a significant nature to construct roads on the project site. The roads must be used to transport equipment rather than solely to provide access for people working at the site. She said it is also the start of physical work for the developer
to lay three concrete pads for a wind farm that will consist of 65 turbines or for the turbine vendor to commence physical assembly of at least one turbine for the project at the factory under a binding turbine supply agreement signed before physical assembly starts.


It is not clear whether it matters if work starts in 2010 but then nothing is done for another year at the site or at the factory on the turbine order. Some senior Treasury staff are not bothered by such a delay; they stress that the Treasury guidance said all that is required in 2010 is the “beginning” of construction or else they view the deadline to complete the project as a check on how long a delay is possible. However, there may be a risk if the facts show with hindsight that construction did not truly get underway.  Developers who plan to rely on physical work to start construction plan to work steadily once construction starts, although possibly at a slower pace than normal. For example, a
wind farm that might normally take six months to construct might take 12 to 18 months under an elongated construction schedule.

There is an assumption in each of these cases that the developer will choose to treat all the turbines or solar arrays as a single “property” so that the work done in 2010 counts as the start of work on the entire project. The Treasury treats each turbine or solar array that can operate independently as a
separate property. Therefore, work must start independently on each. However, a developer can choose to treat multiple turbines or solar arrays that are owned by the same company and are on the same site as a single project.

5% Test

The other way to show that construction started is to “incur” more than 5% of the total project cost by December 2010. A developer does not have to satisfy both the physical work test and the 5% test; either is enough. Costs are considered “incurred” when the developer pays them, but only if he expects the equipment or services for which payment was made to be delivered within 3 1/2 months
after payment. Otherwise, he must wait until delivery to count the costs. Thus, for example, a payment made on December 31, 2010 counts in 2010 as long as the equipment is reasonably expected to be delivered by April 15, 2011. Otherwise, the payment is treated as spending in 2011 after delivery in 2011. Delivery may include transfer of title to equipment that has been manufactured, but that the manufacturer is holding in storage at the site.

The developer can look through any “binding” contracts with equipment suppliers or other contractors that are signed before manufacture of the equipment or other work starts and count spending by the contractor using the same principles. Thus, for example, the developer can count spending by a turbine vendor on components or services, but the spending counts at time of payment only if it is reasonable to expect delivery of the components or services to the turbine vendor within 3 1/2 months of payment. Otherwise, costs are incurred only as equipment or services are delivered to the vendor. This will require getting equipment suppliers to certify how much they spent toward manufacture by year end this year. To show how this works, suppose a developer signs a binding turbine supply agreement in mid-2010 for turbines to be delivered in late 2011 and makes a 20% down payment. The turbine vendor then spend 15% on components for the turbines. The developer cannot count the 20% down payment in 2010, but can count the 15% spent by the turbine manufacturer provided the manufacturer expects delivery of the components within 3 1/2 months of payment. The manufacturer would also have to link the components to the turbines ordered under the contract. Two large wind turbine manufacturers told the Treasury at a meeting in early April that it is impossible to certify that components ordered this year are for particular turbines that will be manufactured next year or the year after. One said that components are ordered well in advance of use based on expected orders. Ninety-five percent of the components in a turbine are interchangeable across turbine types. The manufacturer said components are not assigned to a particular turbine until roughly a week before manufacture starts. Actual manufacture of the turbine takes five days. This has caused wind developers to take a harder look at starting physical work at the site or else requiring manufacturers to manufacture at least one turbine for each project in 2010 in order to commence construction under the physical work test.

The developer must incur more than 5% of the actual project cost, not the expected cost in 2010. A developer would be wise to incur more to leave a margin for error. However, it may be possible if project costs spiral to fix the problem by choosing not to include one or more turbines or solar arrays as part of the project on which a cash grant is taken. For example, the developer has the option in a 65-turbine wind farm of treating 63 turbines as one project and two turbines as a separate project.

Other Issues

The Treasury is still thinking about several issues. They may be addressed in questions and answered posted to the Treasury website. Any such answers are unlikely to be posted before June. The Treasury has not sorted out how to deal with frame or master agreements that larger wind companies use to buy turbines for multiple projects. The agreement is usually signed by a parent company. Closer to the time turbines are manufactured, “daughter” contracts are signed with project companies
essentially designating turbines for use in particular projects and copying over the terms from the master agreement into each standalone contract. Among the issues are whether spending by the parent company carries over to the subsidiary and by when turbines must be designated for use in particular projects.

The Treasury is looking for a way that it can confirm to developers that they started construction. A developer can apply for a grant after starting construction, but before the project is completed. The Treasury said last year that it planned to respond in such cases whether it agrees the project is under
construction. However, it has not sent any such confirmations to date despite receiving more than 100 applications. In all the cases to date, the agency concluded that the projects would be completed by December 2010 so it was a moot issue when construction started. Whether it is able to send such confirmations in the future is a resource issue. It is looking into what is possible.

Developers should ask equipment suppliers to certify to spending or the start of physical assembly as soon after the threshold for starting construction is reached in 2010, and then the developer should apply to Treasury for a grant. This may leave time to fix any problems before year end if the Treasury responds promptly. Even if the response is not received until early 2011, at least the issue whether construction started in time can be taken off the table. Geothermal companies that started drilling before 2009 for power plants that will not be completed until after 2010 received some relief in March. The Treasury said that it is not the start of physical work on a project to do “test drilling of a geothermal project.” It also said that a developer “may treat physical work of a significant nature as not having begun until more than 5 percent of the total cost of the property has been paid or incurred.”

Senior Treasury staff told Chadbourne at the same time that it is the start of physical work on a geothermal power plant to drill a fully-functioning production well whose output will be dedicated to the power plant. An example of such a well is one drilled to production depth and diameter and for
which permanent casing, a tree or other above-ground equipment and flow controls have been installed and tested. 

Tuesday, February 23, 2010

BrightSource Lands Federal Loan Guarantee

U.S. Offers Solar Project a Crucial Loan Guarantee


Published: February 22, 2010
The United States Department of Energy offered a $1.37 billion loan guarantee on Monday to a California company planning to build a large-scale solar power plant in the Southern California desert.
green inc.
A blog about energy, the environment and the bottom line.
The loan guarantee for BrightSource Energy of Oakland, Calif., is the largest the department has given for a solar power project. BrightSource’s planned project, the Ivanpah Solar Electric Generating System, is the first utility-scale solar power plant to undergo licensing in California in nearly two decades.

It would use solar thermal technology, in which mirrors concentrate sunlight to heat a fluid and generate steam. If built, it would be the largest of its kind.

“We’re not going to sit on the sidelines while other countries capture the jobs of the future — we’re committed to becoming the global leader in the clean energy economy,” Steven Chu, the energy secretary, said in a statement.

The loan guarantee is contingent on the Ivanpah project passing state and federal environmental reviews.

Some environmental groups have objected to the site of the project in the Ivanpah Valley, arguing that the plant would eliminate habitat for the imperiled desert tortoise and other rare plants and wildlife. BrightSource earlier this month offered to reduce the size of the plant to lessen its impact on wildlife, but representatives of the Sierra Club and Defenders of Wildlife said the move was inadequate and argued the project should be relocated.

Surveys have found 25 desert tortoises on the site, which is about 45 miles south of Las Vegas.
Executives at BrightSource, which is backed by Google, Morgan Stanley, Chevron and BP, have said the loan guarantee is crucial to obtaining financing to build the plant at a time when banks are reluctant to finance new technologies. The company will not disclose the total projected cost of the power plant.

The Ivanpah plant will deploy thousands of mirrors, called heliostats, that focus the sun on three towers that will each contain a boiler filled with water. The focused heat creates steam that drives a turbine to generate electricity. The plant, to be built by Bechtel, is expected to create 1,000 construction jobs.

BrightSource has signed contracts to deliver 2,600 megawatts of electricity to the utilities Pacific Gas and Electric and Southern California Edison.

Thursday, February 4, 2010

Chadborne & Parke Project Finance Feb 2010 NewsWire

Chadborne & Parke Project Finance NewsWire contains great up-to-date information on the word of clean energy project finance.

Click here to link to the Newswire in PDF form


Table of Contents
1 The Year Ahead: What to Expect from Washington
11 DOE Moves on Loan Guarantees
17 Treasury Cash Grant Update
22 Update: M&A Market
28 Update: Tax Equity and Debt Markets
35 Islamic Project Finance: Structures and Challenges
40 Cross-Border Renewables — Baja to California
43 Finding Development Capital
48 A New Transmission Superhighway Takes Shape in the West
54 Environmental Update

Monday, April 20, 2009

Nevada Solar One - Clearinghouse



This is a compilation of links and videos describing Nevada Solar One:


First is Acciona's advertisement announcing the opening of Nevada Solar One in 2007. Click here.


Click here for the Wikipedia Article


The Energy Blog's Nevada Solar One Photos, Write-Up, and Discussion


Click here or read below to review details the financing structure for Nevada Solar One

Structured Leveraged Concentrating Solar Power?

On August first, Acciona Energy closed financing on Nevada Solar One, in the first leveraged lease structured financing in the United States.

This begs two questions:

  1. What in the world is a leveraged lease structured financing?
  2. Why do we care?

What in the World?

An in-depth analysis of the economics of leverage leasing for all three parties involved is available here. Structured financing is a generic term for any form of financing more complex than a loan or a rental. For those of you who need to remain awake, here's the short version: a leveraged lease is a way of obtaining financing that allows the three parties (lenders, equity investors, and lessee) involved to parcel out the risks, tax benefits, and income streams in a way that suits each of their needs.

Why We Care

While using structured finance can lead to substantial financial benefits for the parties involved, the deal can only be done if the lenders believe that the cash flows from the underlying asset, in this case Nevada Solar One, a Concentrating Solar Power (CSP) plant, are sufficiently reliable that they are willing to loan money in exchange for a share of those cash flows.

In other words, the lenders believe that Acciona (ACXIF.PK) will be able to operate the CSP plant with sufficient reliability to earn enough money to eventually pay off the $266 million they put up for the deal. The equity investors believe that the CSP plant will retain some value at the end of the lease, so they will not be left holding the bag.

The completing of a leveraged lease is implicit proof that all the financial institutions involved have a degree of confidence in CSP technology, which they would not have in a development stage technology. By their actions, lenders Spain-based Banco Santander and BBVA, and Portugal-based CAIXA Geral de Depositos and equity investors JPMorgan Capital Corp., Northern Trust (NTRS) and Wells Fargo (WFC), are all saying, "Concentrating Solar Power is a main-stream technology, and we are confident of its predictable operation for the lifetime of the lease." Just as important, they're putting their money where their mouths are.

When lenders believe in predictable cash flows, they reduce the interest rate they charge to finance a project, just as a mortgage company will charge a lower rate of interest to a married couple with steady jobs than they would to a single man who has never worked in his life (if he could obtain a loan at all.) A lower interest rate translates into a lower discount rate when calculating the Levelized Cost of Energy which a technology can produce.

With financial innovation, a group of Iberian and American financial institutions have reduced the cost of energy which will have to be paid by this plants and future CSP plants in the United States just as surely as any technical innovation would. Everyone who wants clean energy at affordable prices should care.

UPDATE: 9/13: In this article on CSP by Fortune/CNN columnist Marc Gunther, he quotes an executive at CSP developer Ausra, saying "As soon as we can build solar power projects with the same cost of capital as building conventional coal or natural gas plants, we'll deliver electricity at the same cost as coal." (emphasis mine.)

DISCLOSURE: Tom Konrad and/or his clients do not have positions in any of the companies mentioned here.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

Wednesday, March 18, 2009

Report from the Renewable Energy World Conference

March 16, 2009

Optimism Abounds Throughout Renewable Energy Industry

Las Vegas, United States [RenewableEnergyWorld.com]

Last week the editors at RenewableEnergyWorld.com and Renewable Energy World magazine traveled to Las Vegas to attend the 6th annual Renewable Energy World North America (REWNA) Conference and Expo. With almost twice the attendance of last year's event and more than double the exhibitors, the show's exponential growth in spite of a dismal economy is a testament to the strength of the renewable energy industry.

The problems for companies created by the recession are apparent. But the enthusiasm and recognition of the incredible prospects for renewables dominated the discussion.

We captured video interviews with dozens of experts in the renewable energy field on topics including energy storage and the smart grid, the American Recovery and Reinvestment Act, Hydropower, CPV, algae and much, much more. Taken together, the videos show an upbeat, enthusiastic renewable energy industry despite all of the economic turmoil surrounding it — truly the glimmer of hope that is needed today.

The editors started the week with a tour of the El Dorado thin-film solar facility (see lead photo). The 10-MW project is the largest thin-film installation in North America, covering 88 acres with 167,400 First Solar Cadmium Telluride panels.

When the conference started, editors roamed the conference floor gathering a range of video interviews with analysts and business executives on new technologies and policy developments.

Interested in tracking what's happening in the broader clean tech space? Check out our conversation with RenewableEnergyWorld.com contributing writer Clint Wilder on Clean Edge's Clean Energy Trends 2009 Report, which includes the 5 key technologies to watch in clean tech as well as Wilder's comments on the state of the industry.

One of the most popular energies in the space is algae. While there weren't many algae companies at the conference, there was still a lot of talk about what role this prolific organism will play in the fuel market. Editor Jennifer Runyon spoke with Mark Braly about what experts are saying about this burgeoning industry.

Of course, finance is a big issue in the renewable energy space. Braly and Runyon also sat down to talk about the lack of project finance and what types of projects are actually getting the capital to move forward. Braly talked about utility PV projects as well, which are rapidly gaining ground. According to the Solar Electric Power Association, there are now 2,200 MW of projects being pushed forward by 10 utilities around the U.S. This made utility involvement in the solar industry a hot topic at the conference.

While interest in traditional PV is still growing, new solar technologies are sprouting up everywhere, increasing the amount of attention the industry is getting. Stephen Lacey spoke with one of the oldest players in the Concentrating PV space, Amonix, about what the increased competition means for well-established players.

Darren Kimura, CEO of Sopogy, also spoke with Lacey about the company's micro-CSP parabolic trough collectors, which are extending the solar thermal industry to a variety of meet on-site generation needs.

Sopogy is currently working on a major project in Spain — one of many solar projects being developed for the country's very hot solar market. But the 2009 cap on installations will certainly dampen the Spanish industry's growth this year, which may provide more incentive for Spain-based companies to branch out into other markets. Brian Gaylord, a market analyst for the Spanish Trade Commission, talked with Lacey about the growing international presence of Spanish companies.

This trend is certainly being felt here in the U.S. wind industry as companies from Spain and other European countries buy up and develop American wind assets. News Editor Graham Jesmer spoke with the new CEO of the American Wind Energy Association, Denise Bode, about the incredible growth in foreign and U.S. wind businesses, which put around 8,300 MW of capacity online last year.

Wind is a great resource to harvest, but there is also a need to harvest more stable forms of baseload renewables. The answer is geothermal, said Geothermal Energy Association Executive Director Karl Gawell in an interview with Jesmer.

We may see a slowdown in wind and other renewables well into this year, but the recent stimulus package, which sets aside $67 billion for clean energy, energy efficiency and smart-grid technologies may reverse that downward trend. Jesmer caught up with John McKinsey of the law firm Stoel Rives to talk about when the stimulus may have an impact. He also talked with Piper Jaffray's Chris Flannery about the details of the program and the need to create more project finance opportunities for the industry.


All in all, the conference was a great success. The problems for companies created by the recession are apparent. But the enthusiasm and recognition of the incredible prospects for renewables dominated the discussion. We hope you enjoy the interviews. We'll see you next year in Austin, Texas.

Photo Credit: David Wagman