BioCycle January 2006, Vol. 47, No. 1, p. 49
Funds from private venture capital funds and innovative energy grants push some projects into the implementation phase.
IN 2005, alternative – and renewable – energy concepts “vaulted the highly fortified border separating cottage industry and big business,” writes Daniel Gross in The New York Times business pages (Jan. 1, 2006). “With oil and gas prices soaring, the allure of alternate energy sources is apparent,” he writes. It reminds many investment analysts of the “dot-com boom” of the 1990s. A new bubble may be in the offing.
As examples, Gross cites the following initial public offerings (IPOs) specifically in solar applications: In 2005, there was a tripling of venture capital money going into the solar industry compared to 2004, says the president of the Solar Energy Industries Association. Shares of a company called SunPower rose 41 percent on its first day of trading last fall. On the General Electric web site, the company’s chief executive Jeff Immelt extols his enthusiasm for renewables.
The Wall Street Journal headlines: “Solar Power Investors Find Place in Sun” (Dec. 28, 2005). In the first three-quarters of 2005, the Journal reports, U.S. venture capital firms funneled $67.7 million into the solar energy sector up from $31.4 million in 2004. That is more than 30 times the amount invested 10 years ago. Demand for solar panels in Europe and Asia has blazed ahead of the U.S., with Germany in the lead. But California has a waiting list, and orders have picked up in such states as Arizona.
This year, solar energy companies are forecast to bring in an estimated $12 billion in worldwide revenues, up 50 percent from 2004. By 2010, that figure is expected to more than triple to $40 billion. “This is not just the most attractive space in the energy sector, but probably the most attractive space across equity markets,” observes a global market analyst.
Many socially responsible investing (SRI) firms have a long history of exposure to the alternative energy industry. According to GreenBiz.com, the solar market may be fueled by recent commitments to support renewable energy from large conglomerates such as GE, BP and even Wal-Mart. “We believe that these announcements amount to validation of what alternative energy proponents have been saying – that alternative energy sources will be needed to meet the world’s energy demands,” says an environmental analyst for Winslow Green Growth Fund.
COAL PROBLEMS AND GOVERNMENT ASSISTANCE
According to Jeff Goodell, author of Big Coal: The Dirty Secret Behind America’s Energy Future, coal plants generate more than 130 million tons/year of combustion waste – fly ash, bottom ash, scrubber sludge that is laced with toxic metals like arsenic and mercury and pumped into holding ponds and abandoned mines, where it can sometimes leak into aquifers and drinking water. In an op-ed piece in The New York Times, Goodell explains further: “Most important, coal plants are responsible for nearly 40 percent of the carbon dioxide released in the United States, meaning that if we’re going to get a handle on global warming, we’ll have to get a handle on coal.”
He also points out that more than half the electricity generated in America is produced with coal. Again, the challenges with coal – and the dangers of mining – provide further impetus to develop more sustainable and renewable power supplies.
To open up new incentives for those renewables, government officials seek to provide funds by way of grants and innovative policies. In his final State of the State Address in Albany, New York, Gov. George Pataki proposed to put alternative fuels at service stations along the New York State Thruway and provide incentives to bring ethanol refineries to the state. The biobased industry – which includes renewable fuels, value-added materials from plant, forestry and other biological components – can submit proposals to receive grants from agencies like the U.S. Department of Agriculture and state offices.
“For individual farmers or food processors who want to install a biogas generator, the USDA 9006 grants are still the best choice,” notes Roger Kasper of the Wisconsin Biogas Development Team. This year, the application process is open year-round. “Individual farmers or processors could benefit from these funds, but they or their developers will need to collect data or experiences that can be shared to promote the science, technology or market of digesters,” adds Kasper.
The USDA Small Business Innovation Research (SBIR) program goal is to offer an opportunity to for-profit small firms to submit applied R&D projects that have the potential to benefit animal waste management, community development, aquaculture and wildlife. Up to $19.4 million are expected to be available, with awards ranging from $80,00 to $300,000.
A program from the California Energy Commission – the Energy Innovations Small Grant (EISG) – provides funds for new energy concepts that address a “clear market need, provide benefits for California ratepayers, and target industrial/agricultural/water end-use efficiency and renewable generation. Qualifying entities outside of California are eligible.”
SAVING ENERGY WITH “LOCAL” AND “SUSTAINABLE”
A regional supermarket based in Portland, Oregon – New Seasons – specializes in supplying foods that are grown in the northwest and do not go through a central distribution warehouse. The emphasis on local, cuts way back on fuel used to transport food thousands of miles across the country. It also means more farms and open space.
At New Seasons – which is also actively involved in Portland’s food residuals collection and composting programs – locally-grown items carry yellow shelf tags. Of the 30,000 items on each store’s shelves, more than 25 percent have yellow tags. Because the milk is local, none of it is ultrapasteurized.
As reported in a national newspaper account about the importance of “thinking local,” the United States Department of Agriculture’s census tells the story about how farms are being revitalized. In Oregon, the number of farms has risen – from 26,753 in 1974 to 40,033 in 2002. “It makes you feel good about supporting your local farmer and your local fishing industry,” says a customer. Doc and Connie Hatfield who founded the Country Natural Beef cooperative in 1986 says the co-op now has 70 ranchers who raise beef on a vegetarian diet free of hormones, antibiotics and genetically modified feed. “Nineteen years ago, we were going broke,” recalls Hatfield. “Now we are paying income taxes.”
Sums up an editor who reports on supermarket trends: “The New Seasons model is a brilliant concept because it brings back the days of food co-ops, the feeling of being closer to nature, to the food supply, to the neighborhood. What they are saying is, we are your store and we want to build a relationship with you. That lack of relationship has been the downfall of supermarkets.” And also the problem with how much fuel is used in food transportation. – J.G.
January 30, 2006 | General
New Incentives For Alternative Energy
BioCycle January 2006, Vol. 47, No. 1, p. 49