Clean Energy Investment Not Immune From Financial Crisis

The global financial crisis has taken its toll on clean energy investment.  Nevertheless, the medium and long term outlook for clean energy investment remain extremely bright.

According to U.K.-based New Energy Finance, a global leader in analysis about carbon markets and clean energy technology, "Investment in clean energy has collapsed to just $13.3 billion in the first quarter of 2009, down by no less than 44% on the fourth quarter of last year and 53% below the level achieved in the first quarter of 2008."  Meanwhile, over $150 billion of economic stimulus funding targeted to clean energy has not fully begun to flow into the market.

According to the firm's report, "The biggest single element in clean energy investment is asset finance of new-build projects such as wind farms, solar parks and biofuel plants.  This amounted to just under $11.5 billion in the first three months of 2009, down 44% from the fourth quarter of 2008 and half the figure for the first quarter of 2008."

On the other hand, Michael Liebreich, chairman and CEO of New Energy Finance, said, "The medium-term and long-term outlook for clean energy is strong, given the imperatives for G20 economies to curb carbon emissions and improve energy security.  We forecast that on current policies, annual investment in the sector will return to growth in due course and reach $350 billion by 2020."

Denver Water Board Director of Planning Meets With Graduate Students

David L. Little, director of planning for Denver Water, met today with graduate program students.

Denver Water, which reports to the five-person Denver Water Board, serves water and promotes its efficient use to 1.3 million people in the city of Denver and surrounding suburbs. Established in 1918, Denver Water is the state's oldest and largest water utility. In 2007, Denver Water generated nearly $200 million in revenue.

Mr. Little explained the history of Denver Water as well as the integrated resource plan, which serves as the strategic underpinning for the utility's services. The planning department is responsible for identifying and integrating the future water and facility needs and resources of Denver Water and determining and protecting options to meet those needs and resources. He also explained the relationship between western slope water users and the Denver Water.

Most of the water delivered by Denver Water comes from a sophisticated series of mountain reservoirs that store nearly 700,000 acre feet of water.

European Commission Publishes White Paper on EU-Related Climate Change Adaptation Strategies

The European Commission has published a white paper, "Adapting to climate change: Towards a European framework for action."

The white paper, which proposes various policy-related measures, reflects the European Commission's view that, "The earth's climate is changing and the impacts are already being felt in Europe and across the world." The white paper presents "the framework for adaptation measures and policies to reduce the European Union's vulnerability to the impacts of climate change."

The European Commission, in presenting the white paper, said, "Adapting to climate change will be integrated into all EU policies and will feature prominently in the Union's external policies to assist those countries most affected."

European Commissioner for the Environment Stavros Dimas said, "The seriousness of climate change is becoming greater and more disturbing withi each passing year...It is therefore essential that we start work now with governments, business, and communities to develop a comprehensive adaptation strategy for the EU and to ensure that adaptation is integrated into key EU policies."

Despite the EU's leadership on climate change (e.g., adoption of the EU Emissions Trading Scheme), not everyone in the "green lobby" is satisfied with the steps the EU has taken. Tony Long, director of the European Policy Office for the WWF, said, "We are particularly concerned for a potential water crisis across Europe, whereby southern countries will suffer from reduced supplies and other regions will face increased extreme weather events and floods. Why isn't action taken now? How much longer do we have to wait?"

Major Energy-Related Legislation Introduced in U.S. House

The introduction yesterday of "The American Clean Energy and Security Act of 2009" marks the official beginning of Congressional consideration of issues ranging from encouraging clean energy development to establishing a cap-and-trade system for greenhouse gas emissions.

The measure establishes a particularly important starting place since it was drafted by two key members of the U.S. House of Representatives, Henry Waxman (D-Cal), chairman of the powerful House Energy and Commerce Committee, and Edward Markey (D-Mass), chairman of the Committee's Energy and Environment Subcommittee. Both congressmen are enthusiastic supporters of a cap-and-trade system.

The Act, which totals more than 600 pages, contains four titles:

• Title I: Clean Energy
• Title II: Energy Efficiency
• Title III: Reducing Global Warming Pollution Through a Cap-and-Trade System
• Title IV: Transitioning for a Clean Energy Economy

Among other things, the Act calls for:

• Retail energy suppliers to generate 25% of their electricity from renewables by 2025
• Establishment of a cap-and-trade system for electric utilities, oil companies, large industrial sources, and other entities that are responsible for 85% of the country's greenhouse gas emissions
• The cap-and-trade system will reduce the number of emissions "allowances" issued each year to meet a combined target of 20% below 2005 levels in 2020 and 42% below 2005 levels in 2030

The importance of this measure cannot be understated since it reflects the House leadership's view of how a total energy package should be implemented.

On the other hand, the House Republican leader, John Boehner (R-Ohio), was quick to describe the bill as "the Democrats' national 'cap and trade' energy tax legislation." However, the reality is that with a big Democratic majority in the House whatever the House leadership wants is likely to make its way into the final bill passed in the House. When the measure moves to the Senate, it may be tougher sledding. Stay tuned...

Interesting Climate Change-Focused Website

The Bureau of National Affairs (better known by its initials BNA), a U.S.-based legal publishing firm, has introduced a new (and partly free) website called climate.bna.com.

The website includes information about climate change, the associated business impacts, and what tools are being developed to address it. While there is a charge for some information, students in the LLM and MRLS programs can access much of the "charged for" content through the Westminster Law Library website (go to World Climate Change Report for details).

Among other things, the website posts important press releases (e.g., "Pelosi Statement on Comprehensive Clean Energy Legislation Released by Chairman Waxman and Markey," March 31, 2009) as well as lists upcoming conferences. Free daily e-mail highlights are available.

For those who closely follow the matter of climate change, this website may be a useful resource.

La Palabra desde Espana (The Word From Spain)

The government of Spain, a strong supporter of renewable energy development, has indicated yet again the importance with which it views renewables.

Prime Minister Jose Luis Rodriguez Zapatero told the Financial Times last week, "To change the world's energy model is the most significant challenge facing humanity in this generation, not only for the impact on climate change but also for its effects on the [world's] economic model."

More U.S. Nuclear Power on Deck?

As the U.S. government moves closer to some type of carbon management regime, one industry player -- nuclear power generators -- is very interested in the eventual outcome.  For example, J. Wayne Leonard, Chairman and CEO of Entergy Corp., the number two generator of nuclear power in the country, is fully in support of a cap and trade or tax on carbon emissions.

In a recent Wall Street Journal interview ("The Carbon Cap Dilemma," March 28, 2009), Mr. Leonard says that America sees itself "as a market economy, and that's created great wealth for society over time.  But we're a market economy that doesn't have price signals for carbon dioxide."  As such, Mr. Leonard supports the Obama Administration's goal of an 80 percent reduction in carbon emissions by 2050.

The catch, and not surprisingly since this was published in the quintessential pro-business Wall Street Journal, of course is what to do with the waste generated by nuclear power plants.  Are there lessons that could be learned from France, where nearly 80 percent of electricity is generated from nuclear?  Perhaps so, but it's worth noting that in France the government largely owns and operates the nuclear plants while in the U.S. the private sector has taken on that role.  As a Frenchman once said, "We're comfortable with the nuclear industry since the government runs it and what benefit would the government possibly have from cutting corners.  In America, with your economic system, private businesses are constantly looking for ways to lower their costs and in some instances this means cutting safety-related corner."

Stay tuned. The role of nuclear in a carbon managed economy is only beginning to be debated.