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1. Plug It In, Plug It In, Say West Coast Utilities
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2. EPA Denies Texas Request to Slash RFS
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3. Blackstone Establishes Cleantech Investment Group
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4. Rentech Producing Synthetic Fuel from Natural Gas, Coal
Plug It In, Plug It In, Say West Coast Utilities
Celeste LeCompte - Energy
West Coast utilities Southern California Edison, Pacific Gas & Electric and Portland General Electric announced this week a few initiatives aimed at bringing electric vehicles closer to the road.
Portland General Electric said it will focus on building out infrastructure for the electric vehicles through a network of charging stations throughout its service territory. Meanwhile, Mitsubishi signed agreements with both Southern California Edison and PG&E to test a handful of its i MiEV electric cars over a three-year period. Mitsubishi says the partnership will allow it to test its battery technology; utilities will get a chance to test out how the vehicles can be used to smooth electrical demand on the power grid.
Utilities are eager to speed the adoption of both electric and plug-in hybrid vehicles, which could act as a kind of distributed, mobile power plant; when power demand goes up, instead of turning to expensive last-resort power plants, utilities could draw power from the batteries of plugged-in hybrid around their territory. Portland General Electric and the California utilities are all pairing their plug-in hybrid initiatives with investment in so-called “smart metering” technologies that will help regulate vehicle charging and discharging onto the grid.
Portland General Electric received approval earlier this year to implement a more than $130 million smart-metering project that will install 16,000 new meters during the six-month testing phase; additional meters will be installed through the end of 2010. When the project is complete, PGE estimates it will reap $18 million in annual operational savings. (PGE customers will foot the bill via an additional charge on their electric bill.)
EPA Denies Texas Request to Slash RFS
Craig Rubens - Policy
The EPA has denied a request by Texas Governor Rick Perry to cut the federal Renewable Fuel Standard in half. The RFS mandates the blending of 9 billion gallons of grain-based ethanol into national gasoline supplies this year; the EPA is authorized under law to waive the requirement if it determines that the mandated biofuel volumes would cause "severe harm" to either the economy or the environment. Perry made the reduction request back in April, citing claims that grain-based ethanol production is causing food prices to rise. But EPA administrator Stephen Johnson said that, “After reviewing the facts, it was clear this request did not meet the criteria in the law."
Perry called the decision “a mistake” and said in an emailed statement: “For the EPA to assert that this federal mandate is not affecting food prices not only goes against common sense, but every American's grocery bill.” He criticized what he called “the EPA's inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers and American households.”
But Perry’s own intentions for requesting the waiver have been suspect from the beginning. According to the Houston Chronicle, he made it after meeting with the nation’s largest poultry processor, Pilgrim’s Pride, the month before. He went public with it by holding a national press conference, at which he said that, “Granting this waiver will provide much needed relief to families, while enabling Texas to continue feeding and fueling the nation.”
The livestock industry in Texas relies, of course, on cheap corn feed. As the Houston Chronicle further noted, Pilgrim’s Pride co-founder Lonnie “Bo” Pilgrim spent over $9,000 to fly Perry to that press conference and subsequently donated $100,000 to the Republican Governors Association, which Perry heads as chairman.
Already the ethanol industry has come out to praise the EPA for their ruling. POET, one of the largest ethanol producers in the world, issued a statement saying the ruling preserves the market for cellulosic ethanol. While the cellulosic and grain-based ethanol mandates are differentiated in the RFS, POET spokesman Nathan Schock told us:
It would send a very bad signal to the investment community if parts of the RFS of any kind are rolled back. The cellulosic industry needs the grain-based ethanol industry because it’s building out infrastructure, leading to the production of more flex-fuel vehicles as well as building consumer acceptance for the product.
Of the total 36 billions gallons of ethanol required by 2022 by the RFS, 21 billion gallons are to come from “advanced biofuels,” 16 billion gallons of which are to be cellulosic.
Update: The Auto Alliance, a trade association representing 10 of the largest automakers in the world, agrees with POET and in an emailed statement said they are pleased with the EPA’s decision. The Alliance says its members have already produced 12.5 million alternative fuel cars, including flex-fuel and biodiesel-compatible models, but says only about 1 percent of America’s gas stations pump E85 and even fewer have biodiesel. Continued federal encouragement of biofuels and the necessary infrastructure is needed, the Alliance asserts.
Blackstone Establishes Cleantech Investment Group
Craig Rubens - Big Green
The group will be led by James Kiggen, who has a solid cleantech background from his days as a Senior Vice President at AllianceBernstein. At AllianceBerstein, Kiggen managed a research team working on emerging sciences and technologies and oversaw late-stage venture capital and growth equity investments across a variety of cleantech plays, including battery startup A123Systems, carbon capture company Powerspan and agri-biotech firm Targeted Growth.
Blackstone has made a few recent moves into the renewable energy market. In July the company partnered with a German firm that plans to develop a 400 MW wind farm off the coast of Germany. That partnership followed on the heels of a $870 million investment in December 2007 in the (troubled) Bujagali hydroelectric project in Uganda by Blackstone portfolio company Sithe Global Power. Sithe builds and operates large power generation systems in developing countries, a severely undeserved, but potentially huge, market for renewable energy.
While venture capital investments in cleantech show no sign of slowing, Blackstone could provide a more diverse set of investment strategies than a VC firm. The lack of cleantech exits so far shows that cleantech firms develop differently from the IT plays many VC firms are used to.
Blackstone Group’s second quarter financials, released Wednesday, showed total revenues fell 63 percent to $353.7 million for the quarter, a net loss of $156.5 million.
Rentech Producing Synthetic Fuel from Natural Gas, Coal
Katie Fehrenbacher - Energy
Rentech, a company that turns hydrocarbons like natural gas and coal into alternative fuels, says it has started producing an “ultra clean synthetic fuel” at a demonstration unit in Colorado. It’s a controversial process, particularly when coal is used, because it can be a significant carbon dioxide-emitter when combusted. Rentech defends its synthetic fuel process as more environmentally friendly than petroleum fuel and says it can also be used to convert biomass and municipal waste.
Basically Rentech uses an advanced version of the Fischer Tropsch process and an iron-based catalyst to turn synthetic gas into fuel. At the Colorado demo unit, Rentech is already producing fuel from natural gas and plans to produce 420 gallons per day of synthetic jet and diesel fuels. The demo plant will also provide samples so that the fuel can be tested for environmental requirements.
While we appreciate that there are a lot of options out there for changing the face of transportation, if this process is chiefly used to turn coal into fuel, this will be a big problem. Rentech spokesperson Julie Dawoodje confirmed that one of the feedstocks for its synthetic fuel demo unit could be coal. Environmental groups, including the National Resources Defense Council, are convinced that turning coal into liquid fuel is a disaster from the perspective of greenhouse gas emissions.
Those that are interested in the coal to fuel process are largely interested in the economics — coal is cheap and abundant, and would reduce the need to import oil from unstable regions. The military has been eying using coal to liquids for jet fuel, and diesel for long-distance trucking.
Interestingly, Rentech ranked No. 7 for most money spent on lobbying by the alternative energy industry. (This was as of June 30 and the numbers have since been updated, changing the rankings.) When asked if there was a specific cause Rentech was interested in promoting through its lobbying dollars, Dawoodje said that anything that promotes alternative fuels was good for the company.
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