NewEnergyNews: Holiday Reading: Commercial Solar’s Risk Targeted by Insurers’ Partnership; Assurant and GCube know risk—and they are betting on distributed solar generation.

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge: To make every day Earth Day.

YESTERDAY

  • Weekend Video: Obama On Climate Change At The UN
  • Weekend Video: Jon Stewart Heats Up Over Climate Change
  • Weekend Video: Colbert Asks If “This Changes Everything”
  • THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-HIGH WATER RISING – EVERYWHERE
  • FRIDAY WORLD HEADLINE-MOROCCO WIND BOOM COMING
  • FRIDAY WORLD HEADLINE-INDIA BOOSTS ITS SOLAR BUILD
  • FRIDAY WORLD HEADLINE-ABU DHABI BUYS A PIECE OF NORWAY’S STAKE IN UK OFFSHORE WIND
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    GET THE DAILY HEADLINES EMAIL: CLICK HERE TO SUBMIT YOUR EMAIL ADDRESS OR SEND YOUR EMAIL ADDRESS TO: herman@NewEnergyNews.net

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    THE DAY BEFORE THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, Sept. 25:

  • TTTA Thursday-THE PRIVATE SECTOR FACES CLIMATE CHANGE
  • TTTA Thursday-SOLAR WILL POWER SCHOOLS, EARN MONEY FOR TEACHERS
  • TTTA Thursday-A RIDE IN TOMORROW’S CAR
  • TTTA Thursday-A LOOK AT SEE-THROUGH SOLAR
  • THE DAY BEFORE THAT

  • THE STUDY: FREEING THE NATIONAL TREASURE IN U.S. NATIONAL LABS
  • QUICK NEWS, Sept. 24: ROCKEFELLERS DIVEST OIL FOR NEW ENERGY; BOLD $8BIL WIND BUILD-TRANSMIT-STORE PROJECT; CALIF TARGETS 1.5MIL 0-EMISSIONS CARS BY 2024
  • AND THE DAY BEFORE THAT

  • THE STUDY: WHERE OFFSHORE WIND IS IN THE WORLD
  • QUICK NEWS, Sept. 23: THE NEW ENERGY TRANSITION; THE MATTER OF WIND IN KANSAS; MICROGRID TECHNOLOGY MARKET TO QUADRUPLE
  • THE LAST DAY UP HERE

  • THE STUDY: NEW ENERGY TO BE THE WORLD’S BIGGEST AND BEST ENERGY BY 2030
  • QUICK NEWS, Sept. 22: BIG NEW WHITE HOUSE BACKING FOR SUN, EE; DOE BOOSTS RESEARCH ON BIGGER WIND; TEXAS CONSIDERS SPREADING GRID COSTS
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • Thursday, December 27, 2012

    Holiday Reading: Commercial Solar’s Risk Targeted by Insurers’ Partnership; Assurant and GCube know risk—and they are betting on distributed solar generation.

    Holiday Reading: Commercial Solar’s Risk Targeted by Insurers’ Partnership; Assurant and GCube know risk—and they are betting on distributed solar generation.

    Herman K. Trabish, July 13, 2012 (Greentech Media)

    Because solar is a still maturing industry, one of the big fears its financial backers have is that the panels on which their investment depends will not perform according to manufacturer claims.

    Solar can point to few large-scale installations that have performed to warranty provisions over the promised 25-year warranty period.

    Assurant, Inc. (NYSE: AIZ), a powerhouse in the insurance space for 120 years, and GCube Insurance Services, Inc., a three-decade veteran of the renewables space, have partnered to provide a new insurance product for commercial-scale solar projects between 100 kilowatts and three megawatts that addresses investors’ concerns.

    “In addition to the standard property and liability insurance,” explained Assurant Operations and Industry Relations VP David A. Schroeder, “we also have a warranty component at a project-specific level. That is what is unique about our offering.”

    Assurant had $8 billion in revenues in 2011, but, more importantly, $1.7 billion of that was in warranties.

    Financing parties typically specify an amount of property and liability coverage they want, but haven’t had the option of doing so “on the warranty side,” explained Assurant New Venture Commercialization VP Jeanne Schwartz. But, she added, there has been concern because “the OEM [original equipment manufacturer] warranty that typically comes with solar panels is often for 25 years, but it is being offered by a company that has been in business for five years. We are able to bring some reassurance to the financiers that we can stand behind that warranty.”

    And, Schwartz said, the project developer will have the option of warranty management coverage as long as the project’s property and liability coverage remains with Assurant.

    “Assurant sought us out,” GCube Underwriter Erin Cullen said, “because of our presence in the renewable energy industry.” GCube began in wind in the 1980s and now covers utility-scale solar, wind, hydro, wave, biofuels and geothermal projects. But, she added, “we don’t provide warranty coverage. This Assurant product is a huge value-add because it is really the only one with warranty management available in the market.”

    Assurant’s warranty management will be done through OEMs and operations and maintenance (O&M) providers in the same way that auto insurance providers use body shops.

    “We started out developing a product for the solar industry because it is a rapidly growing space,” Schroeder said.

    “We are really excited about this industry because of its growth prospects,” Schwartz said. A subsequent market survey of 80 developers, lenders, brokers, solar service providers and equipment manufacturers showed “the commercial space was underserved.”

    Assurant is focusing on photovoltaic (PV) installations in the United States initially, Schroeder said. “We now insure eleven projects constituting over seven megawatts in three states. The largest project is in Arizona. The smallest projects are in Tennessee.”

    The amount of coverage, he explained, tends “to follow construction costs. But there is also a component that is net present value of future income expected from the project.”

    The cost of the premium, he added, depends on the project and the technology. “If you are in an area that has negligible catastrophic perils and the project is using excellent equipment and has been developed wisely, you will pay a lot less because your risks are lower than one that is in an area that has high [risk of] wind storms or earthquakes and is not using quality materials or workers.” For a typical project, he said, the premium would likely be “less than half a percent” of the project’s capital cost.

    GCube will use its experience in the renewables sector to manage the product in the marketplace and administer it, Schwartz said. It will handle underwriting and policy issuance.

    Unlike its clients in utility-scale renewables, Cullen said, this new product is likely to attractnewer players who “need a little more hand-holding.” For such smaller companies, she explained, “this product takes away the stress of having to go find liability somewhere, find property somewhere and then worry about calling each manufacturer when you have problems with your warranties. This is one-point contact. You contact Assurant and you get all three coverages in one place.”

    Assurant, Schwartz explained, will “be maintaining relationships with clients [and] exploring other distribution channels for the product.” Assurant is also, she said, “exploring partnerships with other financing entities, OEMs and O&M providers -- people who have a vested interest in making sure the risk is mitigated for commercial-sized solar projects.” And, she added, “we are going to be the ones paying the claims.”

    But Assurant did not become a Fortune 500 and S&P 500 company and accrue $8 billion in 2011 revenues by creating insurance products on which they have to pay claims. That means the solar projects they insure are likely to be solar projects investors can win their bets on.

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