China & US: Who'll rule on clean tech, green jobs?

(Photo of solar panel plant worker in China from Flickr and Bert van Dijk)

If you can’t beat ‘em, join ‘em.

That seems to be our strategy with China when it comes to the renewable energy race.

China is spending as much on clean energy as it is on its military. We’re, um, a little less generous. As the Senate dithers, bowing to the interests of Big Oil, Big Coal, and a backward-looking Chamber of Commerce, China is racing ahead toward dominance in the clean energy field.

We’re just not taking it nearly as seriously as they are. They’re ramping up their economy. Ours seems to be ramping down. We’re too tied to the old fossil fuels and don’t really believe that green jobs are the future.

We are spending about 12% of our stimulus money on renewable energy (which for us is amazing). They are spending 38% of theirs. Altogether they’re investing tens of billions of dollars in renewable energy and improving their grid. By 2013 green technology is projected to be 15% of their GDP.

China expects to expand its solar generation 20,000% (no, that’s not a mistake in zeros) by 2020. We project ours to increase just 33%.

Chinese solar manufactures are flooding the American market with cheap panels, driving some companies like GE and BP Solar, to close factories here and outsource. Applied Materials is opening a research facility over there. Of the 10 largest producers of solar panels, only one is American. Even Nellis Air Force Base is using Chinese panels.

We have been dominant in wind generation, with as many jobs in that as in coal mining. At one point, not long ago, we dominated turbine manufacturing. But now we have only one company in the world’s top five.

We’ll have to put a heck of a lot more into it, to catch and pass up China when it comes to the energy of the future.

Forming partnerships
At this point we’re settling for partnerships that can make use of China’s technology and capital. When we talk about sharing technology, it’s no longer us helping them. And they have plenty of money to invest.

On President Obama’s trip to China, a partnership between the two countries was announced – to boost renewable energy, share technology on modernizing the grid, develop codes and labels for energy efficient buildings and electronic consumer products, come up with standards on electric cars, and set up a joint clean energy research facility. We will also help China with shale gas technology.

By itself, this sounds like a vague announcement of cooperation that may not go anywhere. But several other recent announcements make it real.

*China’s A-Power Energy Generation Systems is partnering with U.S. Renewable Energy, a private equity firm, to set up a wind turbine factory in the U.S. for windfarms in North and South America. The technology will come from China, the turbine parts from the U.S. An estimated 1,000 American jobs will be created.

*A subsidiary of Chinese A-Power has joined with partners in Texas to build a 600-megawatt windfarm, funded mainly by Chinese banks, though they applied for U.S. stimulus funds. The request is controversial and may not go anywhere because the turbines are made in China, providing about 2,400 jobs there, but less than 400 here.

*Chinese solar panel maker SunTech is building a North American headquarters and factory in Arkansas, chosen over Texas because of a 10% tax incentive. Initially there will be 75 jobs, eventually as many as 250.

*Duke Energy has a deal with two Chinese companies for cash, equipment and technology for two projects: one solar power development in the U.S., the other better technology for carbon capture and storage at coal-fired electric plants.

I think we can expect more such deals. China, of course, is not only about clean energy. They’re still building at least one coal plant a week. But their rapidly growing need for energy and concerns about pollution are driving an interest in renewable energy we just can’t match. Or won’t match. So we may be ceding the energy future to them like we did the car business to Japan. And for the same reasons. Protecting dirty fossil fuels and resistance to change.

(Sources: Greenwire, CNN, Huffington Post, ClimateWire)

How do enviro groups and clean tech stack up against oil and gas for lobbying money?

(Photo of oil rig from Flickr and photographer crashworks/Elan Ruskin.)

In Washington, D.C., it was raining lobbying dollars this summer. Both sides were trying to influence all-important climate legislation.

The oil and gas industry spent $38.4 million in Q3 (July-September), while environmental groups spent a fraction of that -- $6.1M and renewable energy just 6.6M. Exxon alone matched each of the latter and then some with it $7.2M.

Electric utilities spent almost as much as oil and gas -- $37.4M. And they're doing it with our rate money. Their argument is they don't want our rates to go up. So concerned about the consumer are they. Lesser amounts fueled lobbying from coal mining ($3.6M), natural gas ($3.1M) and forestry/forest products ($2.9.)

Industry groups were largely trying to get more allowances in a cap-and-trade system, but some were trying to block a climate bill entirely.

The summer quarter roughly matched the time between when the House bill was passed at the end of June and the Kerry-Boxer Senate bill was released in the fall.

Environmental groups went all out with spending to keep the momentum going for a bill they wanted to see passed by the Senate before the December international meeting in Copenhagen.

The World Wildlife Fund spent $1 million, way up from $45,000 last summer. They ran ads targeted senators from the swing states of Alaska, Arkansas, Indiana, Maine, Montana and North Dakota.

Environmental Defense was second with $430,000, nearly double what it spent last year. Overall, enviro group lobbying money was up 33% from $4.6M last summer.

Their money, of course, came from concerned citizens like you. Keep the donations flowing.

(Source: Greenwire. E&E analysis based on data from the Center from Responsive Politics.)

Financial meltdown slams corn ethanol and threatens mass transit, but Big Oil still riding high

(Photo of ethanol plant from Flickr and and photographer freddthompson, actor, senator and presidential candidate)

Weekly Angst: Because of the financial meltdown, ethanol companies are struggling and some are going under. Caught between corn contracts signed last summer when prices were sky-high and lower fuel prices, and with credit hard to come by, businesses are seeing the ethanol bubble of the past year burst. Investors have lost billions. VeraSun Energy, for example, expects to lose up to $103 million this quarter. Its stock is down 90% from its peak earlier this year. And ethanol companies in Kansas and Ohio declared bankruptcy last week. The Agriculture Department is considering loan guarantees to keep ethanol businesses afloat.

Mass transit hits trouble
Mass Transit agencies are also caught in the crunch. They face having to pay banks billions as old financing deals fall apart. The problem was triggered by the failure of insurance giant AIG, which guaranteed deals between the agencies and banks. Because of long-standing agreements to give banks tax shelters by selling them rail cars and then leasing them back, some 30 mass transit agencies around the country are now in danger of having to pay back their loans all at once. Washington, D.C.’s Metropolitan Area Transit Authority is the first to be hit. KBC Group of Belgium wants $43 million by next week. The feds may have to get in the middle of this one too – to keep the trains running.

Other repercussions include cancellation of a coal-to-liquid joint venture between Consolidated Energy and Synthetic Energy Systems and the delay of a SunCor Energy oil sands project in Canada. (No tears shed over those).

Major oil companies in good shape
So how is the meltdown affecting Big Oil? With prices dropping rapidly you might think they’re feeling the pain. But apparently not. With record profits last year, they have reduced their debt and are cash fat. So now they can buy up distressed smaller rivals and make deals with resource-heavy countries. Production may be down, but refining should be profitable this year. And they expect less pressure to pass windfall profits taxes. So lower prices and lower demand don’t really bother them. (No one ever said life is fair.)

On the bright side
The economic downturn could benefit green technology, though. It could give government a historic opportunity to climate-proof its infrastructure as part of a public works effort to generate jobs. This may translate into an investment opportunity, says a recent report from Deutsche Bank. The International Energy Agency has called for a $45 trillion investment in climate related technology by 2050. And Deutsche Bank says renewable energy investments have more promise in the long term than tradition energy sources.

At the same time, venture capital continues to flow into Silicon Valley and California in general. VC investments in energy and utilities were up in the 3rd quarter 90% over the same period last year, as investors pulled back from other sectors like information technology, media and financial services. Clean tech reported a record $1.08 billion in investments, most of it going to solar. In the Bay Area, which includes Silicon Valley, overall VC was up 22%, the highest single-quarter total since 2001. One benefit of green technology is most of it is tied to government policy so it’s not as vulnerable to swings in the market.
Observers are waiting to see the results of this quarter, however, anticipating that falling oil and carbon prices could have an impact. VC fell in the third quarter in other parts of the country.

And Neal Dikeman, of Jane Capital Partners, warned that a prolonged financial crisis could have an adverse effect on a 2012 post-Kyoto international agreement to fight global warming, by either delaying or weakening it.

For additional comments on the financial crisis’ impact on climate change see my earlier post.

(Sources: Greenwire, Washington Post, Wall Street Journal)

VC investment in clean tech soars in down quarter

(Photo of photovoltaic solar panels from Flickr and and photographer Dale 331)

News Update 3: Venture capital investment in clean tech jumped 41% this quarter to a record $961.7 million, in a period when VC generally slumped 8%, according to Ernst & Young. The investment amount was a record for the clean-tech sector. Solar photovoltaics and other energy-generating companies took more than half the money, with efficiency coming in second with 20%. Smart energy meters were popular as an example of investment with a quick payback. Two major solar deals occurred during the quarter, April-June. SunEdison in Maryland got $131 million and eSolar in California $130 million. (Source: Greenwire)