QUICK NEWS, 3-7: WIND DRIVES UK REAL ESTATE UP; LA UTILITY MIXES IN BIG SUN; FLYWHEEL POWER

THE SUCCESS OF CAP&TRADE
Carbon emissions trading: more buy in, small impact; Carbon emissions trading gains wider acceptance among European power companies and heavy industries. But so far, carbon emissions trading has had only a marginal impact in reducing emissions.
March 4, 2011 (AP via Christian Science Monitor)

"The European system for putting a price on carbon emissions is gaining wider acceptance and is making a small dent in the amount big energy companies are polluting, according to a survey of more than 2,500 companies…[but] the cap and trade program adopted six years ago will only begin to bite when it enters its next period in 2013, analysts said.

"Under the cap-and-trade system, about 12,000 companies are allocated permits that limit how much greenhouse gases they can emit. Companies that exceed their allocations can buy credits from companies that have emitted less than allowed…Last year, the trade amounted to $123 billion…"

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"…The survey included hundreds of European power companies and heavy industries, and showed that 59 percent of those that responded already have reduced their emissions because of the system, up from 54 percent last year. Another 9 percent said they plan to lower emissions because of the cost of carbon.

"…[M]ost of the reductions were marginal, often less than 5 percent over the last two years…[largely because power] companies have been receiving their permits for free…[S]tarting in 2013 they will have to pay for their allocations in an auction with other companies…Despite a small increase in emissions last year as economies recovered from recession, overall carbon pollution has declined since 2005 and Europe was on target to meet its goal of slashing emissions 20 percent by 2020 from 1990 levels."

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"A similar cap and trade program was a cornerstone of President Barack Obama's policy on climate change, but failed to win congressional support. However, several regional trading schemes have been approved among U.S. states, most recently in California, and within five years carbon trading is expected to be established in China, Australia, Brazil and others among the world's largest polluters.

"The survey, conducted Jan. 27-Feb. 14, showed 49 percent of the 2,535 companies that responded thought the trading scheme was the most cost-effective way for Europe to meet its emissions targets, up from 43 percent the previous year…[T]he growing level of confidence was a surprise after the discovery in January of the cyber theft of about $50 million in carbon credits…"


WIND DRIVES UK REAL ESTATE UP
Scotland’s commercial windfarm site leases headed sky high…property consultant CKD Galbraith’s analyst…[discusses] factors placing an upward pressure on commercial wind farm leases…
Rikki Stancich, 18 February 2011 (Wind Energy Update)

"Land rental values for large-scale wind farms have increased dramatically in Scotland since 2002, according to a report by UK property consultancy, CKD Galbraith…[B]etween 2002 and 2008, rents under new leases increased on average by 200%. In addition, from 2009 to 2010, rents rose by more than 10%. Early indications in 2011 suggest a continuing upward trajectory…[W]ind farm owners and operators can expect to pay significantly higher land rents in coming years…"

[Mike Reid, utilities department head, CKD Galbraith:] "The demand for larger-scale commercial wind farm sites is bigger than the current supply of land. Most of the good sites have been taken up and there are areas of local opposition including owners who don’t want their land used for wind farms. Also more mid-range developers have entered the market looking to develop sites, which is increasing the global demand and pushing up prices…It is outstripping other rental streams at present."

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[Mike Reid, utilities department head, CKD Galbraith:] "Existing projects won’t be affected, given that rent figures are usually agreed at the beginning of the planning and consent process…[with] annual increases…[and] stepped rental uplifts from year 10 onwards…locked into 25-year lease agreements…[but] current earnings from the land lease, compared to other land uses (such as sheep farming), is still higher…Wind farm projects in the pipeline will, however be affected by higher rents…[T]echnological efficiencies…[should] counterbalance the cost, but it will need to be factored into the developer’s financing model."

[Mike Reid, utilities department head, CKD Galbraith:] "…[T]he small-to- medium sized market should still be efficient [the 10% cut in the UK feed-in tariff (FiT) coming in 2014-15]…In the UK, the FiT begins from the date the project is commissioned. Therefore, if a developer starts the planning process now, it could receive a different FiT rate from that which is in place today. This creates a lot of uncertainty for both developers and farmers – ultimately, they are kicking a ball toward a goal that is likely to move…"


LA UTILITY MIXES IN BIG SUN
LADWP Working With SolarWorld To Develop And Interconnect Solar Array
2 March 2011 (Renew Grid)

"The Los Angeles Department of Water and Power (LADWP) has joined forces with SolarWorld to develop an 11.6 MW direct-current solar project.

"LADWP will install, own and operate the system, and SolarWorld will supply the complete system engineering and solar panels, as well as procure balance-of-system components, including SMA America inverters, to convert power from the system to 10 MW alternating-current power for transmission to Los Angeles...[Work began] in February at the LADWP's existing high-desert Adelanto Switching and Converter Station...Preliminary designs...have been delivered, soil testing has concluded and detailed engineering at Adelanto is now under way."

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"The project is expected to produce 22,400 MWh during its first year and 515,700 MWh over a 25-year period. The system will be interconnected into a critical bulk-grid substation, as well as a 1,000-volt solar power system...The Adelanto solar array [with SolarWorld Sunfix ground-mounted flexible aluminum structures] will be built on a 42-acre site about 65 miles north of Los Angeles. The station there serves as the southern terminus of LADWP’s Southern Transmission System, which links Southern California with wind farms and the existing Intermountain Power Project in Utah.

"This project is one of three LADWP renewable energy projects to be financed by federal Qualified Energy Conservation Bonds..."


FLYWHEEL POWER
Beacon Power and Northwestern Energy Sign Contract for Flywheel Energy Storage System
February 28, 2011 (Globe Newswire via Beacon Power)

"Beacon Power Corporation, a leading provider of fast-response energy storage systems and services…has signed a lease agreement with NorthWestern Corporation d/b/a NorthWestern Energy for a one-megawatt (1 MW) Beacon Smart Energy Matrix flywheel energy storage system. The system will be installed by Beacon Power and operated in conjunction with Mill Creek Generating Station (MCGS), a gas-fired regulating reserve plant recently commissioned in Montana and owned by NorthWestern Energy. The system is expected to be operational by the end of 2011.

"The initial term of the lease will be 15 months, which, at NorthWestern Energy's option, can be extended up to two additional 12-month terms. NorthWestern Energy will pay Beacon $500,000 for the first 15-month term and $500,000 for each subsequent term…At any point NorthWestern Energy can opt to purchase the 1 MW system outright for approximately $4 million. A portion of lease payments already made under the agreement would be applied to the purchase…"



"The Mill Creek Generating Station was recently placed in service to balance all loads and resources in NorthWestern Energy's balancing authority area in Montana. It will also provide regulation service for variable energy resources that are part of NorthWestern Energy's retail energy supply portfolio…

"…Beacon and NorthWestern Energy will collaborate closely in developing the flywheel system's control signal algorithms to optimize the performance of the MCGS, and to evaluate the impact of the flywheel resource. The companies will also seek to determine the optimum amount of flywheel regulation capacity for MCGS should NorthWestern elect to expand the flywheel capacity."