Tuesday, February 8, 2011

California wins SunShot dollars while GOP trains sights on clean energy

Californian companies did exceptionally well out of Steven Chu’s “SunShot” announcement on Friday to award $27m to nine companies in the US to drive down the cost of solar. And as Vice President Joe Biden announces $53bn for high speed rail today, it looks like Barack Obama is following through with his clean energy commitments made in his "Sputnik" state of the union.

The US energy secretary announced details of the Department of Energy's SunShot initiative to reduce the cost of photovoltaic solar energy systems by about 75% by 2020, to $1 a watt.

SunShot will focus on four areas:
  • Technologies for solar cells and arrays that convert sunlight to energy;
  • Electronics that optimize the performance of the installation;
  • Improvements in the efficiency of solar manufacturing processes;
  • Installation, design and permitting for solar energy systems. 
$20 million of this funding went to five projects to develop US supply chains for PV manufacturing.  And most of that cash went to four Californian startups as part of the Photovoltaic (PV) Solar Incubator Program.

Crystal Solar in Santa Clara will receive $4 million to develop its silicon wafer technology, Solexant will get $1m to develop thin film solar from non-toxic and non-rare raw materials, Stion in San Jose will receive $1m for thin film development, and Caelux will get $1m to develop its flexible solar cell in Pasadena.

But most effective driver in cost reductions, say most analysts, is policy. In a previous blog, Vishal Shah, analyst at Barclays Capital, said that federal initiatives such as the Treasury Grant Programme, the loan guarantee scheme and 30% tax incentives at federal level were having a huge impact on the US market, just at a time when Europe's subsidies begin to run out.

In California, one of the most effective policies for meeting renewable energy targets and driving down costs has been its Renewable Energy Portfolio Standard targets. Under California's RPS, its utilities will have to buy 20% of their electricity from renewable sources by 2020, and 33% by 2020.

But there is no national target. California's targets are the most aggressive, while some states such as Utah and Iowa, don't appear to have any voluntary targets. This piecemeal approach does not give renewable project developers or investors anything like the market certainty they need to put their dollars on the line.

Compare this approach to Europe, where more than two years ago, EU leaders agreed to a 20% renewable target by 2020. The EU's renewable project is not without its own problems, energy commissioner, Guenther Oettinger, said recently that Europe will have to double its spending on renewables to nearly $100 billion if it wants to meets its 2020 clean energy targets. This is money Europe clearly doesn't have spare at the moment.

But at an energy summit last week, European Union leaders (who cross the political divide more extremely than in the US) agreed on greater cooperation to merge energy networks to boost the renewable energy industry.
This is a level of collaboration and cooperation that is sadly missing from clean energy politics in Washington, and its effects are being felt across the states, as GOP moves to do all it can to avoid such cooperation with its Spending Reduction Act of 2011. 

Energy Boom reports the following cuts:
  • $1.27 billion for DOE-applied research (think NREL and other DOE laboratories vested in renewable technologies and renewable energy storage, among others).
  • $530 million in DOE funding to states for weatherization to improve energy efficiency.
  • $12.5 million for the UN Intergovernmental Panel on Climate Change, or IPCC.
  • $52 million from the Energy Star program, which rates appliance efficiency.
  • $200 million from the DOE’s FreedomCAR and Fuel Partnership.
  • $2.5 billion for intercity and regional high speed rail grants.
  • $2 billion for New Starts Transit funding for public transit improvements.

Hopefully, this will fail along with the Republican party's cynical shots at the Environmental Protection Agency and Darell Issa's war on "Obama regulations".

But the damage will be done, and time will be wasted, leaving China to take pole position on renewable manufacturing, and Europe giving demonstration classes on how the economy and people's livelihoods should take precedence over petty Tea Party-style politics.

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