While the lack of a coherent national energy policy is nothing new for the US, Standard & Poor’s ratings service says in a new report that Washington’s current inability to definitively establish long-lasting energy policies and regulations distinguishes today’s situation from earlier eras. I quote:
Making resource decisions and committing a utility’s balance sheet to support those decisions has never been more complicated or littered with more potential pitfalls, and diminishing credit quality is a result.
Clear policy direction and consistent application by all branches of government of the various policies, ideally with maximum flexibility and abundant time for implementation, would benefit utility bondholders by promoting credit stability.
Last month, Vestas launched its new 7MW offshore wind turbine to great fanfare. At the top of London’s South Bank Centre, accompanied by a flashy video and models of the turbine for every attendee, we were told that this was the future of offshore wind power.
This was an obvious pitch to developers hoping to build under the upcoming third round of leasing of the UK’s seabed for offshore wind farms. The only problem was that the company hadn’t got very far with it – no prototype had been built and no location had been set for its manufacture.
The UK has decided to put forward 12 projects for consideration by the European Investment Bank for its New Entrants Reserve, the €4.5bn pot to spend on CCS and “innovative renewable projects”.
There are seven CCS projects and five renewable ones.
The numbers from today’s report by the Carbon Trust into the potential of marine energy are impressive.
According to the report, the total global market for wave and tidal could be worth up to £40bn per annum by 2050. UK companies could realistically capture around 22 per cent, or £76bn, of the total market theoretically accessible to them, the report concludes, generating 68,000 jobs in the process.
But before green campaigners in the UK jump with joy, there are a number of conditions attached to these projections, not least of which is the idea that other renewable sources have to suffer in order for marine energy to snatch this much market share.
The group of UK solar companies behind the campaign against the reduction of the subsidies for larger projects has asked the courts to quash the government’s review altogether.
Greg Barker, energy minister, announced in March that the government intended to cut the level of public subsidy for large solar farms after a brief review of feed-in tariffs.
The companies have filed a claim in the High Court for judicial review against Chris Huhne, energy secretary, and hope they can get the energy department to start all over again on the process of deciding which projects get which subsidies.
The groups have included four arguments in their case:
- The energy department previously indicated that the review would take place in 2012, with changes being implemented in 2013.
- There was a suggestion that an early review could take place based on a certain “trigger point”, but that trigger point was never set.
- There is no evidence of the “excessive deployment” of large-scale solar power about which the energy department warns.
- Large-scale solar is more cost effective, and so reducing subsidies at the larger end to balance the cost to the consumer doesn’t make sense.
More than three quarters of small and medium sized cleantech businesses in the UK plan to recruit in the next 12 months, according to a report*.
The findings, from a survey of 312 companies by the CleanTech Group on behalf of the Carbon Trust, will give a boost to government hopes for a recovery founded on green jobs.
Benj Sykes, director of innovations at the Carbon Trust, told Energy Source:
This is evidence that green growth is going to be an engine for growth. There is a recognition that this is an agenda that is not going to fail because of financial constraints.
In this week’s readers’ Q&A session, Amrita Sen, oil analyst at Barclays Capital, answers your questions.
In this second of two posts, she discusses drilling in the US, national oil subsidies and growing demand from the Middle East.
Earlier, she answered questions on whether speculation is driving up the oil price, whether such an increase could trigger another recession and when “peak oil” might occur.
(NB – Because of a very high volume of questions, we were not able to tackle every question submitted. Apologies if yours was not answered.)
Next week, Michael Bromwich, director of the US oceans regulator, will be answering your offshore-drilling queries. Email questions to email@example.com by the end of Sunday, April 10th.
But for now, over to Amrita: