Articles in Category: Green

A quiet revolution is going on in the US power generation market, and it may be giving a lesson for those countries dithering over whether to allow hydraulic fracturing (fracking) of oil and natural gas deposits identified but not yet proven.

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According to the FT, April was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, (although it came close in 2012 when gas prices were also very weak). By comparison, in 2010 coal provided 45% of US power. In April of this year 31% of US electricity was generated by natural gas compared to 30% for coal, and the trend continues.

Watts Up

In gigawatt terms, wind power is growing even faster than natural gas, flattening the latter in the league tables. US coal capacity dropped by about 3.3 GW during 2014, and the US Energy Information Association predicts it will shrink by a further 12.9 GW this year, while wind power capacity rose by 9.8 GW and gas by 4.3 GW.

Source FT

Source: Financial Times

The reasons are more complex than simply low natural gas prices, although that, undoubtedly, is a major factor. The Environmental Protection Agency’s failed attempt to force environmental compliance by the back door this year encouraged some coal-fired utilities to see the writing on the wall and either mothball plants or invest in new technology to accommodate the mercury emission and other pollution targets, raising costs.

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After months of rancorous trade battles, a funny thing happened to the crystalline silicon solar photovoltaic panel market. Prices in market leader Europe suddenly went up. For the first time in a decade.

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Prices for solar panels in the European spot market have risen by about 6% so far this year, according to pvXchange, a solar market consultancy based in Bremen, Germany.

Renewables_Chart_July-2015_FNLFlat is the New Up!

Our monthly Renewables MMI® doesn’t track panel prices per se, only the silicon raw material that goes into them, but still registered a value of 58 in July, on par with June’s value. Flat is the new up in this bearish commodity market.

Despite the modesty of the increase, it’s a huge turning point for European solar as the increase represents an abrupt reversal of historical trends. In 2011, the average price of a solar panel in Europe fell by nearly one-third compared to the previous year. In 2012, solar panel prices in Europe plunged by nearly another third. Just last year, the price of a solar panel in Europe fell by more than 14% compared to the previous year.

What’s even more astounding is that this increase could have been caused by the real price of silicon finally being quoted in a majority of European retailers. We have long lamented that government subsidies for both silicon exports in China and for local solar installation in destination markets have artificially eroded the price of silicon.

Tariffs to the Rescue?

A trade war was waged in the US largely between Germany’s Solarworld, Inc., and small Chinese manufacturers who received government support for silicon exports at home and possible kickbacks abroad from installers who specified their thin-film products over higher-quality silicon products from companies such as SolarWorld. The real price fight, though, was always in Europe where solar could make up 12% of power generation by 2030.

The European Commission renewed their own tariffs on Chinese silicon recently and it looks like those duties were finally enough to keep the cheap imports out of their markets. A robust European solar market is good news for silicon refiners and producers such as Solarworld as higher prices mean more profitability for them.

It’s too early to tell if this turnaround will ever be felt in the highly subsidized the US market, but it’s certainly a good sign.

The Renewables MMI® collects and weights 8 metal price points used extensively within the renewable energy industry to provide a unique view into renewable energy metal price trends over a 30-day period. For more information on the Renewables MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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Hawaii’s blessing is also its curse.

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So successful has the state’s switch to renewable energy been that at times the small island grid systems are creating too much energy, or conversely, others are generating too little. Unfortunately, the significant swings in power supply cause enormous system management problems. Hawaii is not alone of course, the islands display a microcosm of what most countries with a significant proportion of renewable power generation suffer: coping with the variability of renewable power supply.

The Smaller the Grid, the Bigger the Shifts

According to the WSJ, though, the smaller the grid the harder it is to manage and they don’t get much smaller than Hawaii’s. Every island has its own grid, none of them connected to any other, compared to the US mainland where just three grids cover 48 states.

The larger the grid, the more capacity it has to absorb fluctuations in power levels. The islands still burn oil for 70% of their power pushing power costs to 34 cents per kilowatt-hour; as a result there has been a massive adoption of solar panels and wind turbines. On Oahu 13% of residential utility customers have solar panels, unprecedented in the US, even compared to green California or super sunny Arizona.

Source: WSJ

Source: Wall Street Journal

In Hawaii, at any time, up to a third of power could be coming from renewables. If a cloud passes, power levels fluctuate significantly. On Maui, the WSJ reports peak electricity demand is about 200 megawatts. The island has 150 megawatts of renewable capacity, half of it consisting of wind turbines. That means sometimes as much as 75% of power generated comes from variable sources like the wind and sun. Read more

The job of 3D-printing the world’s first office building is being tackled and 27 states have filed a lawsuit against the EPA over new water rules.

3D-Printed Office Building

Plans have been made to 3D-print a 2,000-square-foot office building – along with the furniture for its clients. Shanghai design company Winsun Global will work with architecture firm Gensler, structural engineer Thornton Tomasetti and construction manager Syska Hennessy Group on the project and plans to use reinforced concrete, fiber-reinforced plastic and glass-fiber-reinforced gypsum in a 20-foot-tall 3D printer. The project should require up to 80% less labor and could reduce construction waste by as much as 60%.

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Winsun previously 3D-printed a house and an apartment building using similar materials and methods.

27 States Suing EPA

Several lawsuits have been filed by 27 states against the Environmental Protection Agency‘s expanded water rules. The states are concerned that the EPA violated the Clean Water Act and other laws when it extended its authority. The separate suits are expected to be combined into one case in federal court.

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Silicon is essentially sand. But for use in semiconductors and solar panels it needs to be refined to a purity of 99.99999 %. This makes the second-most abundant resource in the world a commodity as its availability is limited by worldwide refining capacity.

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We have long lamented the trade war going on over refined silicon over the last few years. Big companies such as German-based multinational Solarworld, Inc., want higher prices, saying their panels are of higher quality than those offered by smaller, mostly Chinese, producers.

US Factory Capacity Increasing

Installers in US markets are reaping a windfall by using the cheaper panels for installations that are subsidized by states such as California and the low cost of the cheap imports. While it was kind of funny to see Solarworld wrap itself in the flag when it successfully petitioned the Commerce Dept. for tariffs on Chinese panels, and then Chinese silicon, itself, Solarworld has simultaneously stepped up its US presence and seems to be willing to fight for the US market.

Meanwhile, Elon Musk’s SolarCity, an entirely American-owned operation, is building a massive $5 billion
“gigafactory” in Buffalo, NY. When the silicon solar panel factory is completed and running full-tilt (projections within two years), it will be the biggest solar panel plant in North America. To run at full speed, the plant will need an elaborate network of suppliers and service firms to support it.

Is Domestic Demand There Yet?

Is there enough solar demand for companies like SolarCity and SolarWorld to get their prices increases AND see sales grow? A significant price spike in silicon in the renewables MMI this week is certainly a step in the right direction. The tariffs placed on Chinese panels and silicon seem to be having the desired effect, as well. The European Union renewed similar duties this week, essentially stifling Chinese exports to the West with high tariffs in both markets.

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The renewables market lost ground again this month, going from being an unspectacular but steady market to just an unspectacular one. It’s even now from the range it had been hovering in since last November.


The monthly Renewables MMI® registered a value of 58 in June, a decrease of 3.3% from 60 in May.

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What’s concerning is that while we certainly didn’t expect renewables to break out and hit new highs this year, they’ve actually lost significant ground compared to late 2014 when the range hovered between 60 and 70. 58 is a new all-time low. We can only chalk this drop up to more incentives for end-use products using silicon in the solar market and the overall weakness in the rare earths market for neodymium.

In California this month, a state cap-and-trade program is now giving away crystalline silicon photovoltaic panels to low-income homeowners. While this will certainly help adoption, it won’t do any favors to companies such as SolarWorld, Inc. which are trying to bring prices of the panels, and silicon itself, up to achieve higher profit margins.

Silicon will also inevitably feel the pinch from a wave of mergers in the semiconductor industry that will force the involved companies to adopt better procurement and lean operations principles.

The more interesting renewable market is that of grain-oriented electrical steel. While the US GOES price actually went up this month, the GOES M3 price, a much better indicator of actual purchasing activity, went down. More on that tomorrow.

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We at MetalMiner have long covered the US domestic policy front as pertains to US manufacturing industries, and time and again, we hear industry experts extolling the virtues of “all-of-the-above” strategies, rather than unilateral regulatory decrees.

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So is the federal government, in conjunction with individual states, pursuing “all-of-the-above” strategies to their fullest potential when it comes to US energy policy?

michael whatley headshot consumer energy allianceAs the final rule of the EPA Clean Power Plan gets closer to being finalized (word on the street: it’s happening this summer), we got an insider perspective from Michael Whatley at Consumer Energy Alliance on the issues for US manufacturers surrounding the potential effects of the final rule. Below is a condensed and edited version of our conversation.

All-of-the-Above Fuel Mix

MetalMiner: So when we talked to AISI and NAM, there was sort of like this clear-cut division. There [seem to have] been trust issues between EPA and industry. Are you guys in the same boat as that?

Michael Whatley: We feel very strongly that we’ve seen rules that have been put in place over the last 15 to 20 years across multiple presidencies that are reducing the role that coal is going to play in the nation’s energy power supply. But at the end of the day, in order to ensure that we have affordable, reliable electricity for all of our consumers, whether those are industrial or individual and residential, we have to make sure that we have a fleet mix – a generation mix – for electricity that is going to work. If we’re going to say unilaterally, the way that this administration’s EPA has said, that we’re going to move away from coal, then we…can’t just take 30 or 40% of our power supply of the grid in a short period of time without having ramifications. Electricity [demand], over the long haul, is projected to increase across the country. So if we’re going to be making major changes to our fuel mix, we’ve got to make sure that we’re able to replace the coal if the coal is going to go away. And in this short of a time, we just don’t think that’s realistic.

MM: Is that what you mean by fleet mix? Does that have a different meaning than the fuel mix?

MW: No, fleet mix is the fuel mix. Frankly, as much as we support solar and wind and other renewables, those are not ready to take on a baseline generation capacity in most states yet. Even though we have natural gas that is online and have massive reserves nationwide, the infrastructure to be able to get the natural gas from those reserves to new electricity plants that are yet to be built, as well as the pipeline capacity, is going to be a challenge for us. We have to make sure that the timelines EPA puts in place for the states here are going to be realistic.

MM: So what are you guys advocating at CEA?

MW: We are advocating that if we’re going to move forward with any set of rules, they have to be done in a way that is not going to set up unrealistic emissions generation cuts or unrealistic timelines, because we can’t do this in a way that’s going to foster blackouts or price spikes, as we’ve seen in some states already. In California, that state has taken steps to say “we’re not going to have any coal-fired power plants.” Yet, they import electricity from a bunch of other states. If you take that same model and apply it nationally, then we’re not going to be able to get enough renewables online in the timelines they’re talking about. Read more

This is part two of a series on carbon-dioxide taxes and how quickly they could affect energy industry companies. Part one ran yesterday.

One could, and many will, dismiss the International Monetary Fund report “How Large Are Global Energy Subsidies,” as so much drivel, that, while there are undoubtedly costs to burning fossil fuels, due to health and pollution, the energy industry also pays huge amounts of taxes and provides low economic cost energy that allows our economies to function.

Why Manufacturers Need to Ditch Purchase Price Variance

Whatever we may or may not think of the validity of this argument we should remember the IMF rarely deviates from the thinking of the US Treasury. If the IMF have gone public with this approach it will have widespread support among influential circles.

Subsidies and Energy

The basis for the IMF’s case is that fossil fuel companies have been allowed to keep huge profits while dumping the consequences on the rest of society, and that the only way to dissuade this practice is to tax the fuels sufficiently to compensate society, an analytical approach developed by Arthur Pigou, an early 20th century economist according to the London Telegraph newspaper.

If the full cost, under this model, were applied coal would become uneconomic overnight. Compare the article’s figure of $5.7 trillion with the annual subsidy for renewables of $77 billion, with the latest solar investments operating without any subsidy in some parts of the world.

The COPS21 conference is aiming to limit the rise in carbon to 450 particles per million (ppm) and to cap the rise in temperature to 2 degrees Celsius above pre-industrial levels by the end of the century. Climate scientists claim that we are currently on course for 4 degrees Celsius, and while their claims have been often shown to be wildly pessimistic the reality is a) temperatures are rising and b) if lawmakers believe the science it probably makes no difference what individuals think action will be taken.

Source: Telegraph newspaper

Source: London Telegraph

China has the additional drivers to limit emissions in that, more than any other nation, they are suffering the consequences of fossil fuel air pollution. Read more

We have already written this year on the risk to the fossil fuel industry posed by potential carbon taxes. Consensus that such taxes are coming seems to be building surprisingly quickly, helped, it must be said, by a historic agreement between the USA and China to work together to agree on emission targets and add momentum for an agreement to emerge from the COPS21 conference planned in December in Paris.

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The most noise is, not surprisingly, coming from fear that trillions of investments in fossil fuels, principally coal but also oil and even natural gas, could become uneconomic if some form of carbon tax is agreed upon. Probably more because of this worry than any more altruistic notion major investors are already beginning to turn their backs on coal in particular. The latest is the world’s largest sovereign wealth fund, Norway’s $916 billion fund has decided this week to pull any investments from companies whose business relies more than 30% on coal according to the FT. Read more

Thanks to fees from its state cap-and-trade law, Northern California homeowners will soon start receiving completely free crystalline silicon photovoltaic solar panels.

Why Manufacturers Need to Ditch Purchase Price Variance

Oakland nonprofit Grid Alternatives is using $14.7 million raised through the state’s cap-and-trade system to install the panels in lower income neighborhoods for free. The fees were paid by industries whose emissions exceeded the state “cap” set by the new law. The fees were donated by state to Grid and the money came out of the Greenhouse Gas Reduction Fund (GGRF), also established by the cap-and-trade law.

Silicon was the biggest mover this week on our renewables MMI, as well.

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