World Bank Lends Belarus $90 Million For Wood Biomass Heating Projects

The World Bank has loaned US$90 million to the Republic of Belarus for converting municipal district heating stations from gas to biomass wood fuel.  The project involves the replacement of existing gas boilers by biomass boilers, provision of wood chipping equipment and biomass fuel storage facilities, installation of individual building-level heat substations with temperature control, and upgrading of district heating networks.

“Forest is one of Belarus’s richest natural resources. The full potential of wood biomass as alternative renewable energy resource has yet to be realized in Belarus,” stated Young Chul Kim, World Bank Country Manager for Belarus. “Using low-quality wood, now treated as industrial waste, for heat and power generation will also contribute to the development of the wood processing industry, and is consistent with the national overall strategy to encourage sustainable forest management. It also allows new jobs and business opportunities to be created in these sectors.”

Previously Belarus has relied on Russian gas to run its heating stations, and the Government of Belarus has a goal to replace this gas with local fuels, mainly biomass, by 32 percent in 2020. Further details and information are available on the World Bank's website at http://www.worldbank.org/en/news/press-release/2014/03/31/world-bank-belarus-energy-sector.

Kind regards
Jon

Japan Approves New Renewable Energy Feed-In Tariffs

On June 18, Japan's Ministry of Industry approved the implementation of renewable energy feed-in tariffs.  These tariffs, set to last for at least 20 years, are among the highest in the world (see chart below) and they become effective from July onwards. Bloomberg New Energy Finance estimates that Japan's photovoltaic (PV) market alone could be worth at least 10 billion USD, with Japan poised to overtake Italy as the world's second largest solar energy market.

The new Japanese green tariffs require utility companies to purchase electricity from renewable sources, such as wind, solar, biomass, geothermal and different forms of biomass.  Japan's government views this requirement as a positive step towards reducing its historic reliance on nuclear power and thereby mitigate against a potential future "nature+nuclear" national catastrophe a la Fukushima.

Japan only generates about 1% of its energy from renewable sources at present, but analysts predict that the country should unlock at least 30 billion USD in fresh renewable energy investment by means of these new tariffs. It will be interesting to watch how feed-in tariff policies evolve in the USA and other major economies -- much work still needs to be done in order to reduce our global dependence on greenhouse gas emitting fossil fuels.

Cheers -- Jon

Renewable Energy IPO in USA - first of hopefully several during 2012

Greetings from Kiev!

It's a cold winter in Ukraine but a hot market, it seems,  for renewable energy companies tapping into the capital markets.  Two weeks ago, in climate change skeptical USA, an Iowa company named Renewable Energy Group Inc. completed its 72 million dollar IPO on Nasdaq (ticker: REGI).  While the book closed at the low end of the projected raise, the successful placement in January (typically a quiet month for IPOs) shows demonstrably strong continued investor interest in alternative energy as a growth market in America.  The global economic picture is not conducive to bull market placements at this time, with the market weighed down by macroeconomic concerns in the Europe and with other alternative fuel companies trading below their IPO prices last year (such as Gevo Inc. and KiOR Inc. and notably Solazyme Inc.)

Renewable Energy claims to be the largest producer of biodiesel in the U.S., using low cost feedstocks (such as inedible animal fat, used cooking oil, and inedible corn oil) to create fuel. Over the first 3Q of 2011, total revenue nearly quadrupled to $557 million compared to the same period a year earlier, but its loss widened to $27 million from $25 million in the 2010 period. 

This recent IPO underscores the growth potential in the alternative fuels sector, and it will be interesting to see how similarly situated companies in Central and Eastern Europe, with their superior access to feedstock and fuel supply inputs, can take advantage of the global capital markets to undertake their own IPOs and private placements.

Cheers from Kiev,

Jon

Happy 2012!

Greetings and happy new year to everyone!  I hope that this year will bring great tidings for the future of carbon trading and green energy in the USA, Europe and Asia.  Stay tuned for some news :)

UNFCCC Webcast of Durban Conference of Parties, December 2011

Greetings from Kiev!

This week is a major week for emissions trading and battling climate change.  Nations from all over the world have gathered in Durban, South Africa to discuss the future of the Kyoto Protocol and carbon trading schemes.  The event is hosted by the United Nations Framework Convention on Climate Change, and addresses the future of CDM and JI under the Kyoto Protocol, as well as bilateral climate treaties that could arise after Kyoto's expiration in 2012.

You can find the podcast at the UNFCCC website to follow events on a rolling basis:  http://unfccc4.meta-fusion.com/kongresse/cop17/templ/play.php?id_kongresssession=4295&theme=unfccc

Kind regards
Jon

Largest Energy Deal of the Year Creates Largest Natural Gas Pipeline in USA

Greetings from Kiev!  As reported on world news services, the gas company Morgan Kinder (run by ex Enron chief Richard Kinder) made a cash and stock offer worth 21 billion dollars to buy El Paso Corp., another gas transit company... and this would result in a combined company having 107,000 kilometers of gas lines and becoming the single largest American pipeline operator.

The shift in company focus from exploration and production into gas transit would accomodate biogas as well, and could help instigate a nationwide shift from traditional fossil fuels to cleaner energy solutions.  For more information please see http://www.bloomberg.com/news/2011-10-16/kinder-to-buy-el-paso-for-21-1-billion-making-biggest-u-s-pipe-company.html

Kind regards,
Jon

U.S. Department of Agriculture Awards Grants To Fund Biomass & Biofuel Production

Last week the U.S. Secretary of Agriculture, Tom Vilsack, announced that 160 wood pellet producers in 41 states would start receiving grant money to produce biomass and biofuel components.  According to Secretary Vilsack this measure will create tens of thousands of new American jobs and provide fresh sources of clean energy to millions of Americans.

The funding will be awarded by the Bioenergy Program for Advanced Biofuels, a program dedicated to promoting manufacturers of biofuels from non-corn derived sources. For the full story please see http://bioenergy.checkbiotech.org/news/usda_awards_grants_biomass_and_biofuel_production

It will be interesting to see whether this news indicates the start of a new trend for different government agencies taking more proactive positions towards enhancing and subsidizing cleaner alternative energy in the USA -- a country that by most accounts trails global peers significantly in this regard.  With the current high unemployment levels in America currently, coupled with the country's high reliance on outdated fossil fuel energy production methods, linking the renewable energy sector to new jobs as a joint initiative makes a lot of sense.  Of course it will take a lot more than some USDA grant money to accomplish anything significant.  But the recent news from Secretary Vilsack represents a step in the right direction and hopefully signifies a growing new trend within both USDA and its sister agencies in Washington.

Kind regards from Kiev,
Jon

Green Energy News Website

Greetings from Kiev!  With the European and global markets under pressure from many fronts, it's nice to know that the green energy industry is proceeding with gusto.  From renewable energy vehicles, cool new devices and gadgetry, all the to large scale power generation, innovators across different continents are developing new commercially viable means to for humans to live in a more progressive way.

There are many green news websites out there that cover daily updates on what's happening in this space, but one that I recommend is http://www.green-energy-news.com.  Check out some of their stories about new electric cars and solar power if you have a moment -- it's a light introduction to where our future lives are headed!

Cheers,
Jon

New Report Shows How Energy Choices by U.S. States Impacts Public Health and Economy

Greetings!

A new report, Western Grid 2050: Contrasting Futures, Contrasting Fortunes, outlines how energy choices in eleven Western states over the coming decades will impact human health and the economy.  The 165 page report suggests that a Business As Usual (BAU) scenario will evolve with higher electricity bills and U.S. businesses becoming disadvantaged in the world marketplace.

With domestic energy infrastructure investment projections exceeding $200 billion for the next 19 years, regardless whether green energy or traditional fossil fuels, it makes sense to direct more focus toward clean energy -- in large part because traditional fossil fuel infrastructure already exists.

According to the report, future electricity sector development will arise from energy efficiency mandates (that will drive down use), renewable portfolio standards and renewable energy credits (that help push in favor of clean energy).

However, utilities (and other electricity providers in retail choice geographic areas) will continue to exert considerable influence on how the nation’s energy dollars are spent – whether maintaining the existing plant and transmission status quo, or investing in technologies that drive energy savings, favor clean energy production, and provide more multifaceted grid operations such as smart meters, lithium batteries, distributed generation and home area networks.

A full copy of the report is available at:  http://www.cleanenergyvision.org/wp-content/uploads/2011/08/WG2050_final_rev082211.pdf


Kind regards
Jon

Who Will Be The New Energy Captains of Industry?

Energy – a word that sums up the foundation of the world as we know it. Every part of the global economy runs off of some form of electricity, gas or fuel. One hundred and fifty years ago the original economic paradigm shifted from manual labor to the industrial revolution… and fortunes were made and lost by the original captains of the fuel industry to supply the world’s power. The world and people’s lives changed forever in a new direction.

Fossil fuels were the big news then. Previously semi-worthless coal and gas made billions of sudden dollars for the original energy captains of industry, and they continue to do so today. But now things are changing in the face of concerns over climate change and a related scientific revolution… fossil fuels are still going strong but are expected to be on the permanent decline with the real energy needs of the future being met by clean and renewable means. The winds of change now blow into a turbine and the new sun rises on a reflective solar farm.

This raises an interesting question: who will be the new energy captains of industry, and how will traditional notions of vertical integration and trading markets be affected by this? Part of the answer seems wide open and large market players recognize this. We see automakers like Toyota, Kawasaki and SAIC in China developing plans for global battery and battery charging station initiatives. The day will come when you drive your Prius into a Toyota-owned filling station to top off your electric car battery which is also made by Toyota. No more independent gas station will be required to break up the money cycle for Toyota’s shareholders. Other car makers will soon follow suit if they see success from Toyota’s forward thinking. Single companies can control every aspect of your personal travel and can monopolize the customer service elements attached to that travel.

Fossil fuel companies are working hard to develop similar clean tech initiatives so they won’t be left in the dark fifty years from now, but they know that they can quickly become extinct in the new market unless they become innovation leaders in some way, and the playing field is fairly level. Exxon, BP and Shell are investing billions into bio-fuel concepts and renewable energy. The Middle Eastern oil producing countries are doing likewise, the largest example being the 400 biillion Euro ‘Desertec’ renewable energy project announced this year. All of these groups stand to lose and be replaced by energy market creative destructionism unless they get moving and stay ahead of the curve.

Commodity traders will also need to switch their business models over time, in a manner that could bring more or less market security. Their staple trading products, oil, coal and gas, probably will not be in very high demand within 30 years. And renewable energy is not as transferable as fossil-fuel generated energy is, at least for the moment, so that changes how it can be traded also on the market in spark spreads et cetera. Solar power is not easily exported over long distances, for instance, even with the best storing battery system. It typically goes into the local grid or is used for local power supply. As the trading markets adjust to the new energy economy, will they create more or less market risk?

The world is finally on the path to energy efficiency and clean energy technology, and this is a wonderful thing. The new direction means all the old rules are changing and a new energy economy is coming soon. It will be interesting to see who is left after this big shake-up, and who gains or loses as a result.