NewEnergyNews: Holiday Reading: What Abound Solar’s Bankruptcy Says About the DOE Loan Program; It has a 96 percent success rate and the endorsement of an independent Republican consultant.

NewEnergyNews

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

Hey, hey, Ms. Abby!!! Go get 'em!!!

The challenge: To make every day Earth Day.

YESTERDAY

  • THE STUDY: THE IMPACT ON REAL PEOPLE OF RISING POWER PRICES
  • QUICK NEWS, Oct. 22: SCHOOLS SAVE W/GEOTHERMAL HEAT PUMP SYSTEMS; BUILDING FOR NEXT-GEN U.S. BIOFUELS; ENERGY STORAGE MARKET EMERGING
  • THE DAY BEFORE

  • THE STUDY: WHERE U.S. OFFSHORE WIND WILL CONNECT
  • QUICK NEWS, Oct. 21: SOLARCITY TO CROWDFUND WITH $1,000 BONDS; NEW JERSEY LOOKS AT OCEAN WIND; SMART LED LIGHTING MRKT TO DOUBLE
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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

  • THE STUDY: NEW OPPORTUNITIES IN TRANSMISSION
  • QUICK NEWS, Oct. 20: ELEVEN GOOD THINGS ABOUT SOLAR ENERGY; YAHOO BUYS WIND; SMART THERMOSTATS’ BILLION DOLLAR FUTURE
  • THE DAY BEFORE THAT

  • Weekend Video: The Ocean Speaks Out
  • Weekend Video: Adapting To The Inevitable
  • Weekend Video: The Joy Of Driving EVs Powered By The Sun
  • AND THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-HOTTEST SEPTEMBER EVER; WORLD’S HOTTEST MONTHS STREAK AT SIX
  • FRIDAY WORLD HEADLINE-EU WIND BEATS FOSSIL, NUKE ENERGY PRICES
  • FRIDAY WORLD HEADLINE-DESERTEC SUCCUMBS TO MIDEAST TURMOIL
  • FRIDAY WORLD HEADLINE-JAPAN UPS PUSH FOR GEOTHERMAL
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT THURSDAY, Oct. 16:

  • TTTA Thursday-THE MILITARY FALLS FOR THE HOAX
  • TTTA Thursday-FORTUNE 100 BUSINESSES BOOST SUN
  • TTTA Thursday-IOWA UTILITY BUYS WIND TO CUT COSTS
  • TTTA Thursday-GETTING ENERGY EFFICIENCY FROM THE CLOUD
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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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  • Monday, December 31, 2012

    Holiday Reading: What Abound Solar’s Bankruptcy Says About the DOE Loan Program; It has a 96 percent success rate and the endorsement of an independent Republican consultant.

    Holiday Reading: What Abound Solar’s Bankruptcy Says About the DOE Loan Program; It has a 96 percent success rate and the endorsement of an independent Republican consultant.

    Herman K. Trabish, July 19, 2012 (Greentech Media)

    As with the Solyndra bankruptcy before it, last month's financial failure of Abound Solar has presented an opportunity for politicians to rail against the U.S. Department of Energy (DOE) loan guarantee program. But according to Abound executives speaking Wednesday before a U.S. House of Representatives financial oversight committee, the real culprit in the thin-film solar panel manufacturing startup's demise last month was China.

    At least, that's how former Abound CEO Craig Witsoe explained his company’s failure in his Wednesday testimony. Abound’s progress, Witsoe said, was “solid” until “panel prices dropped 50 percent in one year due to aggressive price-cutting from Chinese competitors using older crystalline silicon technology.” That Chinese competition was backed, Witsoe said, by “over $30 billion in reported government subsidies” and was therefore “able to sell below cost and put Abound out of business before we were big enough to pose a real competitive threat.”

    Abound was funded with more than $300 million in private investment and about $70 million drawn from a potential $400 million, Witsoe said. The two funded production lines “enabled a nearly doubling of panel efficiency from 45 watts per panel in 2009 to 85 watts per panel in 2012.” Whether that would have been improvement enough to allow Abound to compete with its key cadmium-telluride based thin-film solar panel competitor First Solar, let alone the polysilicon solar panels now flooding global markets from China, will never be known.

    The market’s “very fast and severe decline,” Witsoe said, “affected many U.S. companies.” General Electric, which announced plans to enter the thin-film solar panel business in 2011, cited Chinese competition when it recently announced it would delay cad-tel production by at least 18 months, he noted. The tariffs imposed on imported Chinese panels, Witsoe said, “were simply too late for our company.”

    One example of the partisan vitriol on display at the July 18 hearing of the House committee on government oversight and reform was a Representative’s poster with a picture of the President and a map of China, with the heading “President Obama’s jobs program” and the words “from shovel ready to Shanghai” written across the map.

    Representative Jim Jordan (R-Ohio), who chaired the proceedings, described the program as “a bad bet” and accused DOE officers of “failing to protect taxpayers.”

    “The real scandal,” replied Subcommittee ranking member Dennis Kucinich (D-Ohio), “is the systematized illegal dumping of subsidized Chinese solar panels. We’re attacking our own business people and meanwhile the Chinese are eating our lunch.”

    David G. Frantz, acting executive director of DOE's Loan Programs Office (LPO), testified that collectively, LPO projects are expected to support nearly 60,000 jobs. Of nineteen electricity generation projects funded by the LPO, Frantz said, nine are in operation and six are complete.

    Other LPO-backed projects include the first two U.S. all-electric vehicle manufacturing facilities; one of the world’s biggest wind farms; one of the first U.S. commercial-scale cellulosic ethanol plants; the first new U.S. commercial nuclear power plant licensed in three decades (conditionally); a groundbreaking 28-state distributed photovoltaic project that will put solar panels on commercial rooftops; the biggest utility-scale photovoltaic solar power plant, the biggest concentrated solar power plants and two of the biggest thermal energy storage systems in the world.

    Conservative Republican Herb Allison led an Independent Consultants Report on the LPO, Frantz testified. After thoroughly reviewing each loan, Allison’s report found DOE “is using the appropriate risk factors in assessing each loan.”

    Speaking on the other side of the issue. Veronique de Rugy, a Senior Research Fellow at the George Mason University Mercatus Center, noted that “We don’t know how big the failure rate will be in the end."

    De Rugy pointed out that DOE loans put at risk taxpayer money for “projects that would not have been funded in the open market without a government guarantee because they are too risky, and projects that could have gotten a loan but were happy to benefit from the lower interest rate available through a DOE loan guarantee.”

    De Rugy also said that loan guarantee programs transfer risk from lenders to taxpayers, may inhibit innovation, and increase the cost of borrowing. “Such guarantees,” she said, “distort crucial market signals.” The worst impact, she added, is that “guarantees introduce political incentives into business decisions, creating the conditions for businesses to seek financial rewards by pleasing political interests rather than customers. This is called cronyism, and it entails real economic costs.”

    But, as Gregory Kats, president of independent consulting firm Capital E, noted in his testimony, “The purpose of loan guarantee programs is to fund companies and projects that have desirable benefits and that probably otherwise could not get commercial funding." Kats said that his LPO review “suggests that total defaults are likely ultimately to be in the range of $400 million to $800 million, or about one-quarter the amount projected and budgeted.” That, he said, includes Solyndra and Abound. Overall, the program has had a 96 percent success rate, he said.

    “A fair assessment of outstanding portfolio financial profile and risks proves that the DOE loan program has been prudently managed,” Kats said. “There is a global hyper-competitive race to see which counties will dominate clean energy. Abdication of U.S. federal support,” he said, by “failing to make substantial additional loan guarantees to expand U.S. strength in renewable and clean energy, strengthen U.S. jobs, competitiveness and security would be self-defeating.”

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