Tag: wind

Renewables MMI Up as US Solar Jobs Expansion Continues

It can be tempting to lump our Renewables MMI in with the Rare Earths MMI as sub-indexes that rarely move with fairly calm, if lower-priced, markets.
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That might be true of the once-high-flying RE market, but to say that about renewables would be a mistake. Sure, many of the magnets and batteries derived from rare earth elements end up in wind power installations and hybrid/electric cars so there’s a direct relation from end use, but the real difference maker in the renewables market is solar.
An estimated 2% of all new jobs created in 2016 in the U.S. came from the solar industry, according to the Department of Energy. 10% Of those jobs came from non-warm weather climes such as Colorado, too, so regional limitation is essentially over. The solar industry employs more than three times the amount of people as the coal industry, despite the political power of the latter. Solar installations are expected to rise by 29% this year from last. While wind and other renewable technologies have a long road to adoption, the solar industry is largely “there” when it comes to supplying energy directly to homes and businesses with solar silicon photovoltaic panels affixed to them and even directly to modern energy grids.

Aside from those statistics, too, there are market forces at play that make solar adoption a strong investment opportunity. China’s National Energy Administration has revealed its solar power production more than doubled in 2016, hitting 77.42 gigawatts, making China the world’s largest producer of solar energy.
But Jeff, you say, isn’t this just yet another promised tipping point? Haven’t we been promised all of this before? What makes me feel different about these studies is that they are based on jobs, and not adoption numbers alone. You may have noticed that we have a new President who is very eager to develop new American jobs. As much as President Donald Trump might like oil pipelines, coal mines and steel mills, he’ll need solar to create millions of American jobs and to make us all tired of winning so much.
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The DOE report says 187,117 workers are employed at coal, oil, and natural gas power plants compared to nearly 374,000 people in the solar industry. This is somewhat misleading because an array of direct and indirect jobs related to exploration, excavation, construction, and well surveying—still employs millions of people come from fossil fuels such as oil and natural gas exploration and those aren’t counted. Still, the National Solar Jobs Census 2016 documents truly dramatic growth of a the solar industry in less than a decade and that 10% projected increase isn’t something the Trump administration can afford to miss. Workers who install rooftop solar panels make up the largest share employment in the sector at 137,133 jobs.
Increasing installations would be considered the low-hanging fruit of jobs growth. The Renewables MMI was up 2% this month.

Renewables MMI Flat Again, China Scales Back Solar, Wind Ambitions

China, the world’s biggest clean-energy investor, lowered its solar and wind power targets for 2020, a reflection of how record installations of panels and turbines have simply overwhelmed the ability of the nation’s existing electrical grid to absorb the new electricity.

Renewables_Chart_November-2016_FNL

This is more bad news for the burgeoning renewable energy infrastructure market and it’s not like the metals that go into panels (steel, silicon and copper wire) were setting the world on fire before this news. Our Renewables MMI has been flat as a board, stuck at 52, for the last three months and only held at one point higher for the previous two months. Along with Rare Earths, Renewables have been habitually flat for much of the year.

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The problem, for China, is two-fold. It must upgrade its grid to accept available solar and wind power directly into local grids and also set up energy storage that can save generated power when for when the sun doesn’t shine or the wind doesn’t blow.

China is now aiming for 110 gigawatts of solar power by 2020, a 27% reduction from an earlier target, according to a webcast posted on the website of the National Energy Administration that cited the agency’s chief engineer, Han Shui. The nation reduced its goal for wind power by 16% to 210 gw.

While China has poured billions of dollars into clean energy in recent years, the ability to deliver the newly-generated electricity from where it’s produced to where it’s needed has lagged, a common problem with wind and solar. The mismatch has left solar and wind capacity sitting idle in some parts of the country, hurting companies such as China Longyuan Power Group Corp. and China Datang Corp. Renewable Power Co.

Renewables: India Calls on the WTO to Counteract U.S. Solar Subsidies

“The biggest hurdle renewables have to overcome is not the cost of production, but the curse of intermittency. Where does the power come from when the wind doesn’t blow or the sun doesn’t shine?”

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Those are the words of MetalMiner Co-Founder Stuart Burns writing last month about how efficient and cost-effective energy storage could allow intermittent power sources such as renewables to play a baseload role in energy delivery. The U.S. Department of Energy is funding 75 projects developing electricity storage, funding research at Harvard, MIT, Stanford, and the elite Lawrence Livermore and Oak Ridge national labs in a bid for achieve a breakthrough. But haven’t we heard this all before?

Renewables_Chart_September-2016_FNL

Research has long been touted as the key to unlocking the potential of renewables for at least a decade now. There are plans for hydrogen bromide, zinc-air batteries, storage in molten glass, next-generation flywheels, to name but a few with many claiming “drastic improvements” that can slash energy storage costs by 80–90%, but it will be — at best — years before we see any of these technologies and work.

Our Renewables MMI dropped a point to 52 this month, reflecting the general low-demand market the specialty and rare earth metals used in solar panels and wind turbines are in. We remain skeptical that, even with such a research investment, that a breakthrough in energy storage is imminent. Existing technologies — such as Tesla’s powerwall home batteries — hold the most potential for renewable energy storage right now.

India’s Solar Panel Turnabout

Meanwhile, in an example of turnabout is fair play, India has decided to take its case against U.S. solar subsidies of photovoltaic panel companies to the World Trade Organization and the world’s largest democracy, honestly, has a good chance of winning.

The complaint alleges the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota prop up their renewables sector with illegal subsidies and domestic content requirements – an obligation to buy local goods rather than imports.

India lost a case at the WTO earlier this year after the U.S. complained about local supplier requirements to provide silicon photovoltaic panels for India’s massive new national solar power initiative. We said, at the time, that the U.S. might want to rethink taking the case to the WTO and even accepting the win.

Now, India is saying what’s good for the goose has to be good for the gander, and that the U.S. shouldn’t be able to subsidize its solar industry at the expense of Indian panel importers. It’s difficult to see how our nation will argue the exact opposite of what it said about free trade and market forces just one year ago when U.S. panel manufacturers were salivating over the prospect of providing of the 4,5000 megawatts of panels needed for three phases of India’s massive. Jawaharlal Nehru National Solar Mission and didn’t want India’s local subsidies to keep them out.

U.S. Protects its Interests in India

SolarWorld and several other U.S. panel manufacturers cried foul and the Commerce Department and International Trade Administration appealed the case all the way to the WTO and won. Now, those chickens have come home to roost. By filing the complaint, India has triggered a 60-day window for the U.s. to settle the dispute, after which India could ask the WTO to adjudicate.

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California’s clean energy law, alone, has some of the richest solar subsidies in the world. Not only does the state offer cash back for installation of panels, it also doesn’t include rooftop generation by homeowners as mw that go toward meeting the state’s ambitious energy targets (50% of all energy from renewable sources by 2030). That means utilities creating their own solar parks get more impact toward meeting government goals, and rewards and lawmaker consideration, than homeowners and businesses do. Ratepayers essentially subsidize utility companies toward meeting the state’s renewable goals.

21 states and the District of Columbia include rooftop solar panels in their mandates for clean energy but not California.

What Does This Have to do With Renewables?

California’s subsidies for providing panels to solar projects are also quite rich. The California Solar Initiative offers rebates to buyers of the panels whether they are installed on homes, businesses or in utilities’ solar parks. The value of each rebate is defined by a complicated equation, but if India can prove those subsidies are against WTO — especially considering how much more consideration big buyers like utilities receive than homeowners and businesses — the case could be a serious slam dunk against U.S. solar subsidies.

Even The Renewables MMI Was Affected by Brexit, UK Says it Won’t Hit 2020 Goals

In its future energy scenarios report, the U.K.’s network operator, the National Grid, said even its most optimistic scenario suggests it will miss the European Union’s15% energy consumption from renewable sources 2020 climate target for member-states by at least two years.

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“While we believe the electricity sector can achieve its contribution to the 2020 renewable target, we believe the progress required in the heat and transport sector is beyond what can be achieved on time. As a result, none of our scenarios achieve the 15% level by the 2020 date. Our (most optimistic) Gone Green scenario is the earliest to reach this, meeting the target by 2022,” the report stated.

Renewables_Chart_July-2016_FNL

Our Renewables MMI fell 2% to 53 this month as it still traded in the narrow range it has fluctuated in for much of the year, but the U.K.’s situation mirrors that of many industrialized nations and shows just how difficult it has been to reliably grow renewable energy markets without burning coal or natural gas as backups. Despite the best of intentions, the U.K. simply cannot make its 15% energy reduction targets and the Leave campaign took full advantage of that fact last month when it promised citizens that it would get an independent U.K. out of such deals. But can it? Really?

Can the UK Escape EU Climate Deals By Leaving?

Withdrawing from the E.U. will certainly give the U.K. an easier route on heat and transportation policies in the short-term. The island nation will no longer be obligated to hit the 15% reduction target for 2020 whether it actually leaves two years from now or later.

But when it comes to renewable electricity, long lead-times to build new wind and solar farms (particularly wind in the U.K.) mean most of the projects needed to hit the E.U.’s 30% reduction goal for 2030 have already been granted planning permits and government money has been spent on their contracts. In other words, the genie is out of the bottle for almost all of the U.K.’s 2020 goals and even for some of its 2030 goals. It’s going to be really hard to put that genie, economically, back in the bottle.

The U.K.’s Own Goals Are More Ambitious in the Long Term

There’s also the fact the U.K.’s own unilateral Climate Change Act actually imposes even tougher requirements for cutting carbon emissions. Under the Act, the U.K. must cut its carbon emissions by 80% on 1990 levels by 2050. Again, whoever is Prime Minister and in charge of the National Grid can push the 15% 2020 goal and even the 30% 2030 goal set by the E.U. further off, but that 80% 2050 goal will only hang more ominously over the U.K. like a figurative sword of Damocles if politicians decide to do that.

The 2008 Climate Change Act also requires the government to set legally binding “carbon budgets,” which have already been set up. A carbon budget is a cap on the amount of greenhouse gases emitted in the U.K. over a five-year period. The committee provides advice on the appropriate level of each carbon budget. The budgets are designed to reflect a cost-effective path to achieving the long-term objective of an 80% reduction by 2050. The first four carbon budgets have already been put into legislation and run through 2027.

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The early implementation of regulations makes it even more difficult for any future government to get out from under the U.K.’s own 2050 targets as utilities, local governments and the federal bureaucracy has already appropriated money to achieve its short-term goals. So, the possibility of a repeal of the 2008 Climate Change Act is highly unlikely, as well, although some are vocally advocating it just as they did Brexit when that idea was called “bonkers” and we all know how that turned out.

Renewables MMI Increases 2%, DoE Puts Up $25 Million for Grid Research

The broad commodities rally even helped our normally moribund Renewables MMI increase at least a little (2%) this month.

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The sub-index is still range-bound but it’s in the upper portion of the range we’ve seen it inhabit for the last year.

Renewables_Chart_May-2016_FNL

The steel plate products in the IndX were mainly responsible for the increase. Magnetic rare earth electric motor metal neodymium and silicon actually saw their prices decrease this month.

Rather than bore you with my regular disclaimer on how difficult it is to gauge what exactly is going on at the U.S. consumer level with renewables, due to rebates and subsidies, let’s talk about recent initiatives that could move the needle on solar.

The Department of Energy recently announced $25 million in available funding through an effort called Enabling Extreme Real-Time Grid Integration of Solar Energy (ENERGISE) to help software developers, solar companies, and utilities accelerate the integration of solar energy into the grid.

How to Capture Solar Power?

It’s been a long-term gripe from many in the power generation business that solar, at least here in the U.S., has been great for homeowners and businesses using crystalline silicon photovoltaic panels to feed energy directly into their appliances, laptops, lights and TVs, but much more difficult to transfer it back into the nation’s grid.

$25 million might seem like a lot, but it’s actually a rather small sum considering how long this problem has confounded some of the greatest engineering minds out there.

The initiative specifically seeks to develop software and hardware platforms for utility distribution system planning and operations that integrate sensing, communication, and data analytics to help utilities manage solar and other distributed energy resources on the grid. Its products will, supposedly, be data-driven, easily scaled-up from prototypes, and capable of real-time monitoring and control.

We’ve been promised similar systems in the past so we’re not holding our breath or anything. Still, the expected 10-15 solutions developed with the new funding will be field-tested by utilities to demonstrate their performance and value in real-world operating environments so there’s some rigor to the program.

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As always, we’ll monitor what comes out of this program and how the solutions could impact metals markets for products such as steel plate and silicon.

What This Means for Metal Buyers

While the broad rally has visited steel, the Renewables MMI is still rangebound.

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Renewables MMI: Record US Solar/Wind Adoption Won’t Help Prices

Our Renewables MMI regained some of the ground it lost last year and climbed back up to 52 this month.

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However, renewables are still a market stuck in a low-price rut with little prospect of breaking out of the low range they’ve been settling into over the last four years. Seemingly paradoxically, renewable energy was the biggest source of new power added to U.S. electricity grids last year as falling prices and government incentives made wind and solar increasingly viable alternatives to fossil fuels.

Renewables Lead New Energy Capacity

Developers installed 16 gigawatts of clean energy in 2015, or 68% of all new capacity, Bloomberg New Energy Finance said in its Sustainable Energy in America Factbook released Thursday. U.S. clean-energy investments rose to $56 billion last year, up 7.5% from 2014. The majority, $30.2 billion, went to solar. Investors pumped $11.6 billion into wind energy and $11.1 billion into technology to improve grids, boost efficiency, develop storage systems and other ways to better manage power usage.

Renewables_Chart_February-2016_FNL

With so much investment in the technology, why such a gloomy outlook for the metal products, such as grain-oriented electrical steel and silicon, that go into them? Most are oversupplied and their individual markets have not yet hit bottom in this bearish commodities cycle. We’ve also often lamented that the recently extended tax credits for products that contain these metals actually help keep prices low and discourage any real price inflation based on value.

Low prices for both gasoline in cars and natural gas for electrical power generation will also discourage further adoption as those fossil fuels will look more attractive to investors.

Adoption Keeps Climbing

The good news is that with more adoption, green technologies are getting into the hands of more homeowners, in the case of solar, and more utilities in the case of wind. Some lesser-subsidized technologies such as biomass are also taking a bite out of the electrical power generation market where natural gas is now the dominant player.

Power from natural gas-fired plants accounted for 25% of capacity added to grids last year. Nearly one-third of all electricity in the U.S. is now generated by gas, putting it nearly on par with a declining provider, coal.

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The future is certainly bright for the metal inputs of wind turbines and solar panels. We just wouldn’t advise anyone to invest in these metals right now expecting a turnaround and an escalating market such as nickel’s 2014 climb. Slow, steady and subsidized will win this race.

Actual Renewables Prices

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Why The Renewable Energy Tax Credit Won’t Help Wind as Much as Solar

Why The Renewable Energy Tax Credit Won’t Help Wind as Much as Solar

When US lawmakers voted to extend lucrative federal subsidies for renewable energy as part of the $1.15 trillion spending deal last month, wind and solar companies celebrated as they looked forward to passing those savings along to customers and reducing their own production costs.

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But are some renewable technologies more promising than others?

[caption id="attachment_76086" align="aligncenter" width="550"]You can install PV panels on our roof, collect a tax credit and bring down your own electricity bill. A wind turbine? Not so much. Source: Adobe Stock/rob245. You can install PV panels on your roof, collect a tax credit and bring down your own electricity bill. A wind turbine? Not so much. Source: Adobe Stock/rob245.[/caption]

For solar, this is an unqualified windfall as the consumer products manufacturers such as SolarCity and SolarWorld make, mostly silicon photovoltaic panels, can qualify homeowners, banks and other end users for tax credits, but the picture is still murkier for far more costly and technically challenging wind power.

Solar’s Sweet Deal

The legislation allows solar power companies to keep claiming federal tax credits at 30% of the price of a solar array. The credits, which apply to home solar kits as well as big commercial installations, will be good through 2019. After that, though, the credit will begin to drop, declining to 10% in 2022. It will remain at 10% unless legislation eventually eliminates the credit before or after 2022.

So the credits ultimately can go to homeowners who buy solar arrays. If they lease solar equipment from providers like SolarCity, the tax credits go to those that finance home installation projects, usually banks.

Why Wind’s Deal Isn’t As Sweet

Tax credits for wind projects weren’t extended for nearly as long. Newly built wind turbines will be able to claim a credit of $0.023 cents for each kilowatt-hour of electricity they generate under the legislation. That credit will be in effect through the end of 2016, then fall each year until it expires entirely in 2020.

The US wind power industry employs more than 70,000 people in 43 states, many of them in Texas and California, the two biggest wind power markets, according to the American Wind Energy Association. Why the disparity?

Part of wind power’s stepchild relationship with the US government and its older sibling, solar, is technical. Wind simply does not work on a micro scale the way that solar does. Home and business owners who install small turbines on their buildings will likely see little to no return, depending on where these mini-turbines are mounted.

Wind requires a high-wind corridor to create even remotely consistent generation. This is why the Texas Panhandle is a perfect location for large wind turbine installations but these are mostly owned by utilities and there are no individual taxpayers who could spread out the benefit of the tax credit and offset the cost of mass installation. The problem of low-power generation even from sites considered “perfect” for wind generation is very, very real.

The Wall Street Journal reported that Michael Garland, chief executive of Pattern Energy Group Inc., which develops big wind farms in the Panhandle, said the move to revive renewable subsidies “will save jobs.” Notice, though, that he didn’t focus his remarks on expanded installation.

Why You Should be Glad the Playing Field Isn’t Even

Utilities are dependent on municipalities to purchase power from them to offset windfarm construction costs and without cities such as Georgetown, Texas, buying available wind-generated power, the technology faces a much steeper climb to adoption than solar panels which a homeowner can slap on his roof, collect a hefty tax break from and even possibly see his energy bill fall to zero. Even the Texas community above balances its wind purchases with solar to avoid blackouts during low-wind hours. Georgetown also has an upgraded grid that can efficiently move wind from the turbines to its customers. Many grids in the US can’t transmit wind-generated power at all.

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With all of this understood, perhaps it makes more sense, then, for the government to spend our tax dollars heavily subsidizing the more applicable, mature technology of solar while still giving wind the smaller boost it has received. Markets have winners and losers, after all, and, right now, solar is kicking wind in the proverbial… umm… turbine when it comes to adoption. US installed capacity of photovoltaics stands at 7.4 GW, an improvement over 6.3 GW last year.

What’s All of This Cost?

There’s also the cost to the taxpayers to consider. The nonpartisan Joint Committee on Taxation estimates that extending tax credits for wind power will cost taxpayers $14.5 billion, while continued solar tax credits will cost $9.3 billion. Solar power is not only easier to use, generates better returns for home energy savings and gives building owners skin in the game, but its tax credits — which run far longer than wind’s — are less expensive.

Georgetown, Texas, Will be 100% Renewable Energy Powered by 2017

Georgetown, Texas, Will be 100% Renewable Energy Powered by 2017

Georgetown, Texas, a community of 50,000 people 25 miles north of Austin is poised to become the first city in the Lone Star state to receive 100% of its power from renewable sources.

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Thanks to investments in its grid by the state government, most Texas cities enjoy an electricity market that is deregulated, meaning customers have the right to choose from a variety of providers and plans. In Houston there are more than 70 plans that offer energy from entirely renewable sources.

In Georgetown, the city utility company has a monopoly but can still choose the city’s provider like individuals elsewhere in Texas. When its staff examined their options last year, they discovered something that seemed remarkable, especially in Texas: renewable energy was cheaper than non-renewable. In February, city officials finalized a deal with SunEdison, a multinational solar energy company. It means that by January 2017, all electricity within the city’s service area will come from wind and solar power.

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