The Financial Times energy source blog (May 16 2010) reports that Germany, with the largest Solar PV installations in the world, is about to reduce the gross feed in tariff subsidy on solar rooftop installations by 16 per cent.

The cut in feed-in-tariff incentives, along with an 11 per cent reduction in incentives for solar installations on conversion sites, and the scrapping of support for solar installations on agricultural land will come into force from July 1 2010. Predictably, shares in some of the leading solar companies have fallen.

PV-tech.org in a background note reported on April 16 2010 that feed-in-tariff laws place an obligation on energy companies to purchase electricity from renewable sources at a premium price. In Germany, the national gross feed-in-tariff provides access to the grid at a set price per kWh and is guaranteed for 20 years. This makes solar PV and other renewable energy investments secure for producers, investors and suppliers.

The German Government began offering incentives for renewable electricity generation with the introduction of the Electricity Feed Act. The scheme was enhanced with the adoption of the EEG in 2000, leading to a nine fold increase in solar installations. A more updated and refined FiT became law, with an amended EEG in 2004. The new law committed Germany to increasing electricity supplied by renewable energy sources to 12.5 per cent by 2010, and to at least 20 per cent by 2020.

Angela Merkel’s government in May 2010 said that the reductions of solar subsidies were necessary, because panel prices had fallen by as much as 40 per cent, causing overcapacity of silicon panels on the German market. The FiT rules give solar energy producers an extra 8 euro cents for each kilowatt hour generated when they use more than 30 per cent of the total produced.

Bank of America Merrill Lynch says that with “solar prices around E50/MWh in Europe currently, solar is costing consumers around E60 billion more than they otherwise would have paid for electricity. German households are paying E130 annual solar subsidies and rising rapidly. We fear an increasing backlash against overly generous subsidies.”

With all Eurozone countries warned to reduce their sovereign debt and government deficits, there will be a sharp reduction in FiT subsidies. Early in 2010, France cut its solar subsidies. Italy is next on the list, and the other high subsidy countries will follow suit.

In was not until 1982, before the first motor vehicle was assembled in China. And it took a further 10 years before one million vehicles were sold in any one year. But over the last 18 years, an astonishingly giant industry has been created to become in 2009 the largest auto market in the world.

And having come this far, it is inevitable that like the steel industry, where the Chinese produce about 50 per cent of global supply, the same trends are emerging in motor vehicles.

In hybrids and fully electric cars, China with its still current 200 auto manufacturers will dominate this space, with the government goal for 2011 of 500,000 electric vehicles seen as a modest beginning.

All the major international auto companies, with hopes of marketing success in the hybrid and electric vehicle space, with affiliates in China are extremely busy right now.

Indeed, all of the majors, whether joint ventures with foreign auto companies, state owned, municipal owned, or private owned are currently working two and three shifts throughout the week, with an almost endless supply of customers.

Passenger car sales rose 63 per cent to 1.26 million vehicles in March 2010, and commercial vehicles rose even more strongly to 470,000 units over the same month, according to the China Association of Automobile Manufacturers (CAAM).

In 2009, vehicle sales totalled 13.6 million units, a gain over the previous year of 45 per cent. CAAM expects the domestic auto market to grow 15 per cent this year suggesting a total market of 15-16 million. Another auto trade association, Shanghai based China Passenger Car Association is even more confident, suggesting that China’s vehicle sales will surpass 17 million units in 2010.

In 2008, the Ministry of Science and Technology mandated that 10 per cent of Chinese cars will run on alternative fuels by 2012 and called for research subsidies. The Ministry of Finance announced a new commitment to promote new energy vehicles in the country’s 13 largest cities- Beijing, Shanghai, Chongqing, Zhangchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen, Hefei, Kunming and Nanchang.

The mandate called for public services to begin buying alternative fuel vehicles in these cities and provide subsidies for their production and purchasing. The subsidies included 50,000 yuan for hybrids and 60,000 yuan for pure electric cars.

A revised subsidy scheme is eagerly expected for new energy vehicles. China Daily (April 9 2010) reported that electric cars qualifying for subsidies are those that have received the government’s production license and are assembled in China, regardless whether they come from domestic or joint venture firms.

Zero emission pure electric cars is now the preferred technology path for new energy cars in China, which will be reflected in the new stimulus plan. Where hybrids and hydrogen fuel cell vehicles fit in is not clear, as they were targeted as the priority for new energy vehicle development in China’s 11th Five Year Plan (2005-2010).

Zhang Jinhua, vice secretary general of the Chinese Society of Automotive Engineers, who is also an official for the national 863 research program on energy saving and new energy vehicles says that China’s roadmap for new energy cars has shifted in “giving priority to pure electric cars and taking hybrid cars as complement.”

As part of China’s new12th Five Year Plan, the National Development and Reform Commission (NDRC), China’s major planning body has highlighted nuclear energy, wind energy and new energy vehicles as priorities.

Frank Liao, chief engineer of Chery, now China’s fifth largest automaker, says that the first round of competition for the electric car market share would mainly be between medium and small sized domestic private automakers, and the large state owned domestic automakers ,which had acted “sluggishly” in electric car research and development.

There has since been an element of change, with even the highly profitable state and municipal owned SAIC, the No 1 auto company in China, too content in its cosy joint ventures, finally getting the message that the government wants the industry to accelerate change. SAIC is releasing a hybrid model this year, and a pure electric car in 2012.

A number of pure electric cars are about to enter the market. BYD, the 7.5 per cent affiliate of Warren Buffett’s Berkshire Hathaway was first in with its own hybrid F3DM introduced in 2009. BYD for “Build Your Dreams” started in 1995 in auto batteries, and it is only in recent years that it entered the vehicle market.

For many years, a notorious reverse engineering outfit, which never paid for foreign technology,was openly exposed as such in a prominent online piece by Caexon Online. BYD sold 430,000 vehicles in 2009, and is building a new plant to double that output. It now wants to do its own research and development, and is prominent in the export market.

Chery started in 1997, and became the fifth Chinese automaker to reach a production goal of two million vehicles, the first one million was in 2007, and the second in 2009. At the beginning of 2010, Chery began a $350 million R&D program to develop traditional automotive technologies and new energy technologies at the same time.

The aim is to continue a strong program of technical improvements spending around 4.6 per cent of yearly sales on R&D. Chery, which launched its S18 electric car in March 2009, the first of its S series of fully electric cars, has been concentrating on “high efficiency, energy saving, easy operation, continuous variable transmission and quietness.”

The largest of the private auto companies Geely, which nreleased its EK-1 fully electric car, has just concluded a deal with Ford to buy Volvo, the Swedish motor firm for $1.8 billlion. Whether the Chinese company can meet the full purchase price at this stage is up in the air, but they retain first right of refusal advantage to purchase the prestige marque.

To make the 500,000 electric car target by 2011, there are generous production subsidies, and there is a scramble among large state owned enterprises to set up charging stations to enable the new car revolution to take place.

By all accounts, geothermal resources in the world are immense. The Union of Concerned Scientists says that within 10 km (about 33,000 feet) of the Earth’s surface, the amount of heat contains 50,000 times more energy than all the known oil and natural gas reserves in the world.

Greater effort is now being made to exploit these resources, as the need to create low carbon economies becomes more urgent. Although there is a small volume of greenhouse gases involved, geothermal energy is available 24 hours a day, providing base load power at a price almost competitive with coal.

At September 2009, United States with the largest known geothermal resources in the world, is generating geothermal electric power in eight western states. California is the long time leader, with more than 40 geothermal plants providing nearly 5 per cent of the state’s electricity.

The state’s renewable energy requirement of 33 per cent by 2020 will spur more development. Nevada, the second largest geothermal producer has a 25 per cent renewable energy target by 2020, and this will also facilitate increased production. Soon another five states will also be generating electricity.

Total US installed geothermal capacity is currently 3.1 GW. Although representing less than 1 per cent of total US electricity capacity today, the aim is to reach at least 5 per cent of US power needs by 2020, and 10 per cent by 2030. The US Geothermal Energy Association says that 144 projects are now under development in 24 states, which could provide additional electricity capacity of 7 GW.

Up to $338 million in Recovery Act funding was allotted by the Obama Administration in 2009 for the exploration and development of new geothermal fields and research into advanced geothermal technologies. These grants matched on a one-for-one basis with private and non-federal cost share funds will support 123 projects in 39 states.

Conventional US geothermal resources on private and accessible public lands has a mean estimate of 33 GW, while the latest study by the US Geological Survey of geothermal resources in hot rock technology suggest an additional mean estimate of 518 GW available.

While the capacity factor in conventional geothermal production, (the amount of electricity produced) is at least 73 per cent, and may be only 30 per cent in hot rock technology, the overall resources are so large, that one day they may be able to supply much of the country’s electricity needs.

European geothermal resources are mainly in heating and cooling, directly exploiting the aquifers (Paris leads in low and medium energy resources), where the temperature ranges between 30 degrees C. and 150 degrees C. The second way is to produce heat using geothermal ground source heat pumps. The major European producers are Sweden, Italy, France, Hungary, Germany, Denmark.

The EU-27 country geothermal electricity target for 2020 is 6 GW, and for geothermal heating installed 39 GW. Outside the EU, Iceland with about 300,000 people is the geothermal standout,with 17 per cent of its electricity and 87 per cent of its direct heating from geothermal energy.

Everywhere on Earth, the deeper you go, the hotter it gets. Some of the regions are within the “Ring of Fire,” characterised by volcanoes, hot springs and fumaroles, (vents emitting hot gases), where the heat is close to the surface. These areas are around the rim of the Pacific Coast on the US and Canadian west coast – California, Nevada, Alaska, Hawaii, and down the Asian coast to include Japan, China, Philippines and Indonesia.

There is also the Mid-Atlantic Ridge, an underwater mountain stretching from Iceland and the Azores to Antarctica, the East African Rift Valley mainly around Kenya, the East Pacific Rise paralleling the west coast of South America, the Rio Grande Rift running up through New Mexico and Colorado and the Juan de Fuca Ridge (tectonic spreading centre off the coast of Washington state and the adjoining province of British Columbia.)

There are two additional levels of geothermal resources. One of these is a steady supply of milder heat available for direct space heating, at depths down to 200 metres or so, which is available in parts of Europe and North America.

There is also the very large resource at depths of 3 km to 10 km (about 2 to 10 miles), where enhanced geothermal systems (EGS), also known as hot rock technology, has opened up a virtual Pandora box of energy treasures. In addition to the US, Australia, France, Germany and Japan have R&D programs to make EGS commercially viable.

In the EGS process, a fractured reservoir is created at a depth where the rock is hot. Water is continuously injected down a well into the engineered fractures, where the water heats as it flows through. The water is then brought to the surface via production wells, and its heat is extracted to generate electricity in power plants. Finally, the water depleted of its heat, is re-injected to be heated again.

Susan Petty, President of AltaRock Energy, whose company is exploiting an EGS project in Oregon gave evidence to the US Senate Committee on Energy and Natural Resources in 2007.She discussed the economics of the cost of geothermal electricity at depths of 3 km, and temperature of 300 degree C.

Her experience is that EGS at current technology could be generated for a cost of about US$74 MWh. This price includes financing costs and amortising the capital investment of the well field, but before profit. With incremental technology improvement, the cost of power could be cut in half

Australia represents only about 1.5 per cent of global greenhouse gases, but on a per capita basis, it ranks No 1 in carbon emissions.

The  carbon pollution reduction legislation, which has been subject to endless committee hearings, and purposedly delayed to start July 1 2012,  to avoid  the disruption of the global downturn, requires only a modest 5 per cent reduction in carbon emissions by 2020 from 2000 levels.

The legislation went through the lower House, but has been held up in the Australian Senate, by a determined rabble of global warming sceptics, despite getting significant legislative concessions by the Rudd government.

If you measure Australia against a significant grouping of carbon emissions targets by other countries, the lucky downunder country comes out poorly.

The Copenhagen summit, from December 7 to 18, will go a long way to an international agreement, which can be codified in 2010, and if need be 2011, so as to slot in when the Kyoto Protocol comes to an end in 2012.

Carbon emission targets so far promised:

*European Union 27-country bloc’s  longstanding commitment to a 20 per cent cut in carbon emissions by 2020 from below 1990 levels. A few of the country membership, such as UK, Belgium, Netherlands would like the EU to move to a unilateral 30 per cent cut.

However, the eastern European members, particularly Poland, which have  coal dependent economies oppose this move, and would like the 2020 target changed to 2030.

*President Obama’s promise for the US is a  17 per cent emissions reduction by 2020 from below 2005 levels, although the cap and trade legislation is held up in the US Senate. According to the WWF, this is equal to a 4 to 5 per cent reduction from below 1990 levels to have a meaningful comparison with the EU target.

President Obama also said his Administration’s overall goal is to reduce emissions 30 per cent below 2005 levels in 2025, 42 per cent below 2005 levels by 2030, and 83 per cent below 2005 levels by 2050.

* China, which is now the world’s largest carbon emitter, with the US the second largest is committed to a meaningful slowing in greenhouse gas emissions. The undertaking is to reduce carbon intensity by 40 to 45 per cent by 2020 compared with 2005 levels. Carbon intensity is the amount of CO2 for each unit of GDP (gross domestic product).

UN climate officials have said to Associated Press that the 40-45 per cent cut would put China on a path to reduce greenhouse gas emissions about 13 per cent from business- as- usual, the level emissions would have reached without any action. As part of its pollution control policy, China has announced that it plans to invest up to US454 billion in environmental protection in the five years to 2015.

  *Japan is committed to a 25 per cent cut in emissions by 2020 from 199o levels. The new Democratic Party government hasn’t spelled out how the emissions cuts are to be achieved. 

But the Japanese steel industry, which has the most efficient emission controls among world steelmakers, will provide their latest technologies for cutting CO2 emissions to Chinese steelmakers.

 In return, the Japanese can include the emissions reductions in their own quotas under the Kyoto Protocol’s clean development mechanism. If more of Japanese industry  follow the same approach, it won’t be too difficult to reach the Copenhagen target.

*Brazil will be tabling its commitment to cut greenhouse gas emissions by between  36.1 per cent and 38.9 per cent of their business-as-usual level by 2020. The country is the fourth biggest carbon emitter in the world, largely due to deforestation in the Amazon. Brazil is looking to international funding to help in the remediation process.

*Canada is undertaking to reduce carbon emissions 20 per cent by 2020 from 2006 levels, although legislation is yet to be introduced. Even so, its emissions would still be 24 per cent higher in 2020 from 1990 levels.

* India is yet to announce a reduction in either carbon intensity, or in emissions, but it will make its plans known at Copenhagen. A range of incentives is shortly  to be announced  for 714 of the nation’s most energy-intensive installations across nine sectors.

As with China, energy efficiencywill be the key, with a national registry for energy-efficiency certificates, which will have a one year tenure. It sounds like a type of cap and trade. Prime Minister Singh says that the government has “a very ambitious national plan to combat climate change.”

 *Indonesia, the third largest carbon emitter in the world is undertaking to  reduce greenhouse gas emissions 26 per cent by 2020. As with Brazil, a strong campaign to save the forests and more of the peatlands, which  provide the carbon sinks would greatly help to achieve the target reductions. 

* South Korea is committing to a 4 per cent reduction by 2020 from 2005 levels.  This is equivalent to a 30 per cent reduction on the business- as-usual projection for 2020.

POSCO, the world’s fourth largest steelmaker, accounting  for 10 per cent of Korea’s total carbon emissions is currently studying the brand new technology of the hydrogen steelmaking process. This technology  doesn’t emit CO2 emissions, which would be a tremendous achievement, if it can be done.

* Russian President Medvedev said his country “would try” to reduce greenhouse emissions by 25 per cent, and in the process seek to increase energy efficiency by 40 per cent. 

* The 5o African countries, which have no plans to cut carbon emissions are demanding that rich countries commit to deep cuts in carbon emissions that add to global warming. In a show of unity, African countries blame advanced economies for using fossil fuels to take the fast track to prosperity, but at the cost os unleashing today’s climate nightmare.

A similar attitude to Africans is likely to be taken by Central and South American countries.

On the table for consideration at Copenhagen is that the rich industrial countries will subscribe US$ 10 billion a year to help developing countries become equipped to cope with climate change, and to make available technology transfers and know how on renewable energy. 

*

For United States and China to collaborate on renewable energy is always  fraught with US politicians trying to outdo themselves, beating their chest, that it has to be made in USA.

A case in point involves the joint venture between A-Power Energy Generation Systems, a member of  the Shenyang Power Group, with two American companies, Cielo Wind Power of Austin Texas, and the US Renewable Energy Group.

The prominent US Democrat Senator, Charles Schumer of New York, is up in arms about the deal. An energy agreement to instal 240 2.5 MW wind turbines on a wind farm in west Texas to produce a total 600 MW of renewable energy at a cost of $1.5 billion is big news even in Texas, the dominant US wind state.

One of the two US companies involved, Cielo Wind Power is a wind energy specialist, having developed 1.15 GW (1,150 MW) of wind energy installations, largely in Texas. The other US firm, US Renewable Energy Group, is one of the largest US private equity groups focussed on investing in renewable energy.

The Chinese company, A-Power is one of the largest providers of distributed power generating systems in China, and although relatively new in wind turbines has a licensing agreement with the German wind  company, Fuhrlander AG and Norwin of Denmark, two long established wind turbine firms.

The US Department of Energy is making available loan guarantees authority for the rapid deployment of renewable energy projects, providing they are located in one of the fifty states, the District of Columbia, or a  US territory.

The Chinese are putting up the bulk of the funds, and this at a time when US banks are unwilling to finance renewable energy projects. Yet Senator   Schumer wants to block funds to projects, unless they use “high value components,” built in United States.

The Green Inc column of the New York Times (November 5 2009) reports a study by the Investigative Reporting Workshop at American University, finding that 84 per cent of green stimulus funding has thus far gone to foreign companies building renewable energy projects in the US.

The real problem is that American renewable energy companies are usually too small,  move  too slowly, and are often hampered by lack of funding , while Asian companies move more swiftly in this new exciting age of renewable energy development.

Reporting from China, New York Times correspondent, Michael Forsythe (November 18 2009) points to the excitement and sheer exhilaration in China, as regions seek to outdo each other in the race to develop alternative energy sources and reduce pollution.

The Breakthrough Institute and the Information Technology and Innovation Foundation in their report Rising Tigers and Sleeping Giant (November 2009) elaborate on this theme.

The speed in North Asia to become world leaders in elaborately transformed manufactures, and particularly in renewable energy, is very engaging, and yet quite worrying for the west, when compared to the much slower United States in gaining  first mover advantage in the new technologies.

The Breakthrough report says that China, South Korea and Japan will invest a total of US$509 billion in clean technology over the next five years (period through to 2013), while the US will invest $171 billion over the same period.

The Breakthrough report describes the exceptional incentives  in China at both the national, regional and local government level to develop clean technology and innovation clusters, including free land, low cost financing, tax incentives, and money for R&D.

In just over three years, Baoding in Central Hebei Province has been transformed into a second Silicon Valley, with nearly 200 renewable energy firms. The Christian Science Monitor’s Peter Ford (August 10 2009) describes the crusader Mayor Yu Qun’s determined stand to make his city a hub of renewable energy. An ancient city, but now a very modern one, proud of his “electricity valley” as the Mayor describes it.

Or take Ordos in Inner Mongolia, the centre of the most modern coal mine  in  the world. Jonathan Watts reporting for the London Guardian on the two faces of China’s coal industry (November 15 2009) says “China is trying to use science to clean up and expand coal production” at the same time.

“Dirty old steel factories are being upgraded or relocated. To rerduce smog, the low chimneys of small thermal power generators are being replaced by the towering smokestacks of more efficient supercritical plants.”

Ordos is also the location of one of the two major coal to diesel plants in China, which has pioneered a direct liquefaction technique, that cracks carbon with hydrogen extracted from water to produce clear diesel.

Ordos is also the centre of a 2GW solar photovoltaics panel array in the Mongolian desert. This is being developed by Arizona based First Solar, the largest solar company in the world, and the first one to join the Standard and Poor’s 500 index. In turn, the First Solar installations will be part of an even larger 12 GW solar project.

China’s fast moves ahead is obscuring to some extent, Japan’s many technologies in the clean energy space. Toyoto’s hybrid Prius and Honda’s hydrogen fuel cell Clarityare two prominent examples of world leadership.  Sanyo, now being acquired by Panasonic is the world’s largest rechargeable battery company, and about the third largest solar cell producer. Japan is also the centre of the exciting energy storage market.

The Chinese are providing the bulk of the finance, but Senator Schumer ants

What does Brockovich, Darbee, and US Chamber of Commerce have in common?  The ingredients have all the hallmarks of high drama.

It started with the class action in Anderson v Pacific Gas & Electric, (as portrayed in the movie Erin Brockovich, with Julia Roberts in the lead role).

 Brockovich was the single mother paralegal in the office of Masry & Co, who did the leg work for the trial and subsequent arbitrated class action against PG&E, California’s largest gas and electric utility serving 20 million people.

The class action involved 77 residents in the Mojave desert town of Hinkley, who sued the utility for contaminating the ground water supply, with 370 million gallons of cancer causing chemicals in unlined ponds.

Hinkley on PG&E’s gas pipeline route from Texas to California is the site of  the company’s gas compressor station, where one third of the gas is compressed for the company’s customers in northern and central California.

Gas compression generates heat, and the gas and the compressors have to be cooled with circulating water, which in turn passes through cooling towers. Reducing the problem of corrosion, the company chose to use in the inhibitors, a known cancer causing toxin, chrome 6.

The eventual arbitrated settlement in 1987 was $333 million awarded to the plaintiffs in the class action.

The utility was also required to clean up the environment and stop using chromium.

Act 2 of the drama  involved  the deregulation of energy prices in California in the late 1990s. The manipulative energy rogue trader Enron and others created havoc, with the state’s three energy utilities held to ransom. Sharp price rises and electricity shortages leading in  2001 to blackouts, and eventual Chapter 11 bankruptcy. That was in April 2001.

After Chapter 11 bankruptcy and re-organisation in 2002, PG&E goes through an extended period of transformation.  The appointment of the self proclaimed conservative Peter Darbee in January 2005,  as chairman and chief executive intensifies the round of business and cultural tranformation,  with primary emphasis on customer service.

Peter Darbee had joined PG&E at a critical time in 1999, just before the electricity market was about to undergo radical change. He had worked for AT&T, when the monopoly phone company was trust busted, and did telcom deals for Goldman Sachs, before joining the gas and electricity utility. Like the old Ma Bell, PG&E was then a slow moving bureaucratic institution.

In 2006, Darbee and PG&E commenced a campaign of energy efficiency and choosing renewable energy sources to supplement power from traditional sources.

From their denier role in the 1980s, allowing  residents of Hinkley and other towns close by to die of cancer from contaminated ground water to a born again utility giant, now seen as the most green friendly utility in the US, takes a lot of doing and achieving.

Darbee,who has testified many times about the dangers of climate change is a notable supporter of solar and wind energy, with contracts for 1.3 gigawatts of concentrated solar thermal power and more than 800 megawatts of solar photovoltaics, along with wind energy, small hydro power and geothermal.

The latest solar venture is seeking approval from regulators to purchase 200 megawatts from stealth space solar power company Solaren over 15 years.

The concept of space-based solar power is to place solar panels on a satellite to generate electricity. The technology converts it to  radio frequency on board,  and it is then sent to a ground station in California. The receiver then converts the radio frequency to electricity. which is fed into the power grid. Sounds a bit like geo-engineering to me.

 The diversified energy resources will enable PG&E to reach the Californian requirement of 20 per cent renewable energy level by 2010. 

In August 2009, PG&E said that it is seeking $25 million in US government smart grid stimulus funds to build an underground compressed air storage facility.

This would allow the storage of as much wind energy, as a medium size power plant would produce for about 10 hours. The aim is to smooth out fluctuations on the grid from intermittent supplies of renewable energy. The company is also investigating the use of large lithium-ion batteries also for energy storage. 

PG&E is also spending $2.2 billion to instal about 10 million smart meters by 2011. The company has already installed 1.45 million electric meters and 1.9 million gas meters with two way communications so far. Of those,1.2 million electric meters and 1.8 million gas meters are now being billed through the utility’s network.

The last act of the drama involves PG&E  leaving the biggest business lobby in the world, the US Chamber of Commerce, over the lobby’s ”extreme” positions on climate change.

PG&E’s stand has been joined by three other large electric utilities- Duke Energy of North Carolina, Exelon Corporation of Chicago, and PNM Resources, the largest utility in New Mexico.

In PG&E’s letter of resignation, Peter Darbee wrote: “We find it dismaying that the Chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored. In our opinion, an intellectually honest argument over the best policy response to the challenges of climate change is one thing; disgenuous attempts to diminish or distort the reality of these challenges are quite another.”

Unlike

The UN Climate Change chief, Yvo de Boer sees China as the green frontrunner, the world climate change leader of the future.

Although China’s President Hu Jintao didn’t state the country’s emissions target by 2020 at the United Nations General Assembly meeting on climate change (September 22 2009), he confirmed that there would be  deep cuts in carbon intensity over the next decade.

Hu Jintao also confirmed that there would be a 15 per cent increase in renewable energy from 2005 levels by 2020. There would also be a substantial growth in forest coverage by 40 million hectares and in forest stock volume.

Carbon intensity is the amount of carbon dioxide emissions per unit of gross domestic product for each 1,000 yuan (US$147) of economic output.

For the five years to 2010, China set a goal of reducing energy consumption per unit of GDP by 20 per cent to 2010.

A big test for the Chinese will be the need to redouble efforts on carbon intensity from current levels. But the goals for the 12th and 13th Five Year Plans between 2010 and 2020 are still being kept secret.

It will need to be large to have a significant impact, given that between 2001 and 2005, energy consumption grew at 1.2-1.5 times the rate of GDP. As the blog, China Sustainable Energy Energy Program pointed out,”such a low efficiency development pattern is wholly unsustainable. It requires enormous energy input.”

In a report  “China sustainable development strategy report 2009- China’s approach towards a low carbon future,” the team leader Professor WANGI Yi, chief scientist of the CAS Sustainahle Development Strategy sets out a low carbon economic development target.

The recommended scenario is that by 2020, China’s low carbon target be set at 40 to 60 per cent reduction of energy consumption per unit of GDP over the 2005 level, and CO2 emissions per unit of  GDP   be decreasing by about 50 per cent.

The  strategy study group of the Chinese Academy of Sciences suggested that if more restrictive policy measures were adopted for energy saving and carbon reduction, “China’s carbon emissions could be expected to peak between 2030 and 2040, and then stabilise and start to decline afterwards.”

This would be a disappointing outcome for cutting global carbon emissions,as the climate scientists are very concerned that countries have a duty to ensure carbon emissions start to fall before 2020.

No matter how much progress is made by the developed world in carbon reduction, renewable energy and energy efficiency, there will be an equal need for  meaningful climate change by the poorer countries. 

However you calculate it, there is a great deal of money involved. 

The broad assumption,egged on by China, which ironically is becoming the darling of the UN on climate change, is that the richer countries must assume the financial burden.

 The contributions are expected to be in place annually for periods beyond 2020. So, how much funds are involved?

Climate Works Foundation estimated that the funding costs for energy savings and low carbon technologies would be in the order of 95 to 130 billion euros a year (US$135 to 185 billion) between 2010 and 2020.

The spending figures include up to 80 billion euros ($114 billion) for the developing countries to meet climate change commitments.

Both the United Nations (UN) and European Union (EU) estimate that the developing world would need to find around 100 billion euros ($145 billion) each year on climate change.

The EU with its 27 -country community say they are prepared to contribute from  two to 15 billion euros a year to the UN for the 11 year period to 2020.

There is an unofficial suggestion that the contribution would start with the two billion euros in 2012, and move up to the 15 billion euros over the period to 2020.

The EU suggest that domestic and private financing in the developing countries should provide 20 to 40 per cent of the 80 billion euros. Another 40 per cent  “could be found through international public financing.”

The EU suggest that each country’s contribution would be assessed according to a scale of emission levels and ability to pay. The poorest countries would be exempted from any commitment to put forward their own plans on low emissions.

Another EU suggestion is the creation of a Forum on International Climate Finance to monitor and review  “gaps and imbalances” in the financing and results of the policy.”

The US Administration hasn’t nominated any dollar figure for a contribution, and the other developed countries have been silent on the issue.  The EU is looking for the US to put up about 12 billion euros a year.

How much?

Whether any legislation on climate change gets through the US Senate this year is extremely unlikely. But what is crystal clear is that there will be no mention of cap-and-trade in any bill this year.

Lisa Lerer in the political commentary Politico.com (September 17 2009) suggests that what might happen is a “modest energy bill, while leaving the more controversial cap-and-trade proposals  for a later date.” Politico.com reported that in August, four Democratic Senators-Blanche Lincoln of Arkansas, Ben Nelson of Nebraska, Byron Dorgan and Kent Conrad, both of North Dakota urged that the cap-and trade proovisions of the Climate Bill be dropped.

This followed 10 moderate Democratic Senators largely from Rust Belt states sending a letter to the President saying they would not support a bill that didn’t protect American manufacturing.

If you put the pieces of the political jig saw puzzle together, you come up with the following:

The Senate’s version of the Waxman- Markey bill was to be introduced in August, but it didn’t appear. The bill is now expected to be introduced before the end of September, but not voted on before the Copenhagen COP15 Conference in December.

.Harry Reid, the Democratic Majority Leader, who will have to contest his Nevada Senate seat next November  is cool on the legislation, and unlikely to support it. As the political blog ,FiveThreeEight said on August 24, although Harry has more than $7 million cash in hand for re-election, his approval numbers are poor, and he will have to nurse his electorate , without too much contentious legislation to weigh him down.

Chris Dodd, the chair of the Senate Finance Committee, who is reported to have prostate cancer is also up for re-election in Connecticut , and it’s a toss up whether he’ll be re-elected.  Dodd will have very contentious legislation to defend, when a bill comes through on greater regulation of banks, and in particular, as former Federal Reserve Chairman Paul  Volcker described, the need to curb risky activities in the financial markets. The banks and Wall Street will be vigorously opposing any legislation on this, and there will be opposition in Congress.                                                                                                                                                                       

Also standing for re-election next year are Democrats Michael Bennet in Colorado, Roland Burris in Illinois, and Blanche Lincoln in Arkansas. Lincoln has just been appointed chair of the Agriculture Committee , and won’t be supporting the cap-and-trade.

The net effect is that although the Senate Democrats have nominally 61 votes, including the independent Joe Lieberman,  many are becoming nervous, as the political pendulum is now swinging against them. 

Barack Obama’s popularity is sagging, the town hall campaigns in favour of the government health insurance bill faced so much virulent opposition, as to give the Republicans renewed confidence  in Congress and looking good for re-election next year. 

Even Sarah Palin, the probable front runner for President in 2012 is increasingly looking good, despite her hysterical claims on health reforms. Palin received more than  8oo,000 supporters on Facebook  in August.   

lost a great deal of oxygen on the Health Reform Bill, and the need to to legislate on greater bank regulation is going to be very difficult to get congressional approval,       given the vocal opposition of Wall Street

Concentrating solar power (CSP) grew strongly in the 27- country European Union and Switzerland in 2008, with new installed capacity increasing by 27 per cent to 3.3 GW.

Germany, Europe’s biggest CSP market grew to 1.5 GW in 2008, an increase over the year of more than 120 per cent.  Spain the second largest European market rose by 58 per cent to over 300 MW, and Italy rose by 295 MW.

In Spain, there are 22 CSP projects in development, with 1.2 GW new capacity under construction, with another 13.9 GW scheduled to be constructed by 2014.

To get to the Greenpeace estimate of CSP making up 25 per cent of world energy by 2050, you have to think big.

 One way of thinking big is the Financial Times report  (June 16 2009)  of a German consortium of 20 companies, including Siemens, Deutsche Bank and Munich RE contemplating a network of  hundreds of north African CSP power plants, supplying power by underwater cables to Europe.

The German Aerospace Centre estimates the project costs at Euros 395 billion, with the powerlines alone costing Euros 45 billion. It’s great to think big, but you need big pockets too.

Another think big project, but on a smaller scale, involves a Japanese consortium of 16 companies including Mitsubishi Electric and IHI in a US$21 billion Japanese project to build a giant solar power generator in space to beam electricy to earth without cables.

Bloomberg (August  31 2009) tells us that the trade ministry and the Japan Aerospace Exploration Agency, which are leading the project, plan to launch a  small satellite fitted with solar panels in 2015, and test beaming the electricity from space through the ionosphere, the outermost layer of the earth’s atmosphere.

Bloomberg also report that NASA and the US Department of Energy have spent $80 million over the last 30 years to study solar generation in space.

 Back in more conventional technology territory, CSP installations in United States rose by 922 MW in 2008 to reach a total installed capacity of 7.76 GW. Under development in the US are  24 projects, which in coming years will add further capacity of 6.09 GW.

 Unlike solar PV (photovoltaics) on rooftops, which generate electricity directly, CSP systems use lenses or mirrors and tracking systems to focus a large area of sunlight onto a small beam to deliver steam, which is piped into a turbine to generate electricity in a power plant.

As Michael Kanellos reported in Greentech Media (April 28 2009), CSP systems can be by way of  a tower, a trough, a dish, or a plate. In a trough, rows of curved mirrors focus heat on a tube filled with oil. The oil, which heats to 750 degrees Celsius boils water to make steam.

In a tower/heliostats combination, such as employed by BrightSource Energy, water is placed in a tower in the centre of a field of mirrors.  The field heliostats, which are air cooled or cooled by hybrid systems can tilt in two directions, and allows for higher temperatures to be used.

BrightSource Energy is currently in the process of building CSP power plants involving 2.6 GW of projects with the two dominant utilities in California. One of these is 1.31 GW for PG&E in northern California, and the other 1.3 GW for Socal Edison in southern California.

A related market to CSP in power plants is the CSP thermal steam market, where the same technology is used to turn water into steam to directly clean equipment, pump liquids from the ground or kill germs. BrightSource Energy has a contract for a 29 MW thermal plant at Chevron’a oil field in Central California.

BrightSource now wants to expand its operations to China and India, and has put out feelers.

The main proponent of the solar dish is Stirling Energy Systems, which focus heat on a Stirling engine. The difference in air temperature drives a piston. Stirling’s 25 kilowatt SunCatcher enable a more than 25 per cent efficiency on average.  There are four projects in development, involving  more than 1.6 GW of generating capacity. 

A SunCatcher is made up of a parabolic dish of  40 mirrors( formerly 80 mirrors) to focus the sun’s rays onto a receiver, which transmits heat to a Stirling engine. The engine is a sealed system filled with hydrogen. As the gas heats and cools, its pressure rises and falls. The change in pressure drives the piston inside the engine, producing mechanical power, which in turn drives a generator and makes electricity.

A new player in the US market is Solar Millenium, owned by two German companies-  Solar Millenium in partnership with MAN Ferrostaal, which is developing  two  parabolic trough systems each of 242 MW. This is part of a contract with SoCal Edison in southern California to supply up to 726 MW of generating capacity.

With such a long schedule of CSP projects to develop, some large contracting companies have become involved with the solar firms, which should speed progress. Bechtel, one of the US largest engineering contractors is involved with BrightSource Energy.

Bechtel  will become an equity investor in Ivanpah solar generating system, which involves three power plants in California’s Mojave Desert totalling 440 MW.

The aerospace contractor Lockheed Martin is working on a 290 MW  CSP plant near Phoenix Arizona for the developer Starwood Energy Group.