Greece Invests Bailout Billions In Greener Energy

Greece announced today that it will invest 12 billion euros ($15.6 billion) in environmental and energy projects over the next five years. This amounts to more than 10% of the 110 billion euro bailout fund it received from the EU and the IMF.

If successful, Greece will get 40% of its electricity from renewable sources within 10 years, compared to only 4% today.

Imagine what 40% renewable electricity could do for an economy and an environment. Yes, it requires a large investment up front, but within 10 years Greece could get a significant portion of its energy needs from sources such as wind and solar that have zero fuel costs. Talk about a competitive advantage. Businesses in other countries will be paying inflated prices per ton of coal or barrel of oil, while Greece will have zero fuel costs for a significant portion of its energy needs.

Considering all the ways IMF bailout funds have been used by countries in the past (where, exactly, did all that money go?), investing in infrastructure that will reduce energy costs and emissions over the long term has to be one of the better plans.

Greece hopes to leverage its investment by attracting an additional 32 billion euros of private sector funding for energy infrastructure projects such as natural gas pipelines and storage terminals. It also hopes to create almost 200,000 new jobs in the process.

This will be fascinating to watch. Getting 40% of electricity from renewable sources and creating jobs over 10 years is not a pipe dream. I wish Greece all the best on this venture….and hope they succeed as an example for the rest of us.

John Howley
Orlando, Florida
www.HowleyGreenEnergy.com

Wind Power Exceeds 10% of Electricity Generation in Four States

The US added 10 Gigawatts of new wind power generation in 2009. Texas led the way with 2,239 Megawatts but 27 other states also added to their wind generation capacity last year. Four US states now generate more than 10% of their electricity from wind power. Iowa gets 20% of its electricity from wind, followed by South Dakota (13%), North Dakota (12%) and Minnesota (11%).

“Wind power projects accounted for 39 percent of all new electric generating capacity added in the U.S. in 2009," noted Ryan Wiser, a scientist at Lawrence Berkeley National Laboratory, "and wind energy is now able to deliver 2.5 percent of the nation’s electricity supply.” Berkeley Labs and the US Department of Energy released a study last week with more details on the state of wind power in the US.

Investments in wind power are creating good manufacturing jobs in the US. Seven of the top ten wind turbine manufacturers already have manufacturing facilities in the US. Two of the remaining 3 have announced plans to open manufacturing facilities here. And, of course, the actual installation and ongoing management of wind turbines create domestic jobs.

Wind power also creates competitive advantages for manufacturers by lowering electricity rates over the long term. While the up front investment is high (construction of wind farms costs about twice as much per MW as construction of coal-fired power plants), wind and other renewables are less expensive over the long term because they have zero ongoing fuel costs. This advantage will become even more pronounced if, as predicted by many economists, the costs of coal, petroleum and natural gas increase dramatically as the world economy comes out of the Great Recession.

Transmission remains a significant stumbling block. In Texas, 17% of existing wind generating capacity was not used last year because of inadequate transmission. Billions of dollars in investments in smart grid technologies will be required to pave the way for more wind and solar generation. (See DOE Says Grid Needs Upgrade to Handle Wind Power, Jan. 20, 2010).

The US accounted for 26% of all new wind generating capacity in the world last year. That put the US in second place after China, which accounted for 36% of all new wind generation capacity and is the world leader.

John Howley
Orlando, Florida

How Warehouses Become Power Plants

ProLogis, a warehouse and distribution company, is building a 2.4 megawatt solar power project on the roofs of seven warehouses in Portland, Oregon.

This is the second rooftop solar project built by Prologis and Portland General Electric (PGE), the local utility. Together, the two projects will generate 3.5 MW of solar energy.

There's more. ProLogis has solar power projects installed or under construction on 27 other buildings in France, Germany, Japan, Spain and the United States. The installations cover more than 8.1 million square feet (755,000 square meters) of roof space and will produce 13.5 MWs of electricity.

ProLogis says that it has another 450 million square feet (42 million square meters) of roof space available for solar installations on industrial buildings in the United States, Europe and Asia.

So could this be the start of something really big?

That depends as much on regulatory and financial environments as it does on natural environments.

Oregon and the European nations where ProLogis is building solar projects have regulatory and financial frameworks that make these projects possible. For example, the Oregon Renewable Energy Act mandates that the largest utilities in the State must deliver 25 percent of their power from renewable sources by 2025. To meet the mandates, Oregon utilities will require about 1,500 megawatts of renewable energy by 2025.

Oregon also has a feed-in tariff that allows renewable energy to be sold back to the grid. In the ProLogis project, all the generated power will feed directly into PGE's electrical system to serve its customers.

Oregon's incentives for promoting renewable energy include an extensive menu of financial incentives including tax credits, production incentives, and loans for renewable energy, on top of federal incentives.

Oregon's regulatory structure and financial incentives have created new business opportunities for everyone involved in the ProLogis project. PGE formed a joint venture with US Bank to own and operate the system and to secure state and federal solar tax credits to help finance the project. In addition to receiving rent payments, ProLogis established its own Renewable Energy group to procure new business, manage installations and provide development management services.

ProLogis hopes this will turn into an extension of its global distribution and logistics business. "Our program is unique because we have dedicated resources across the globe," says Drew Torbin, vice president of renewable energy for ProLogis. He adds that ProLogis has "the construction management experience and local relationships to get solar installations on the fast-track to completion."

John Howley
Orlando, Florida