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Green Energy Sector Weekly Update: What’s Next?

What’s next?  That question has been on the mind of many stakeholders in the renewable energy industry who, as we’ve previously reported, are hungry for clarity on the future of the stimulus-funded programs that have supported their industry over the past two years.

A recently leaked White House memo clarifies the administration’s thinking on the future of the grants and reaffirms its support for their extension.  To do that the memo proposes ending the Department of Energy loan guarantee program and transfering its remaining funds to the 1603  cash grant program.  The memo was authored by Energy and Climate Change Adviser Carol Browner, Vice President Joe Biden’s Chief of Staff Ron Klain and then-economic adviser Larry Summers.  Unlike the DOE loan guarantees, which  have been very slow to get to developers, the 1603 subsidy program has been extremely efficient. The White House memo underscores that the 1603 program has been behind the addition of nearly 10,000 megawatts of wind capacity; of which about 25 percent would not have been built if the 1603 cash grants had not been available.

But the clock is ticking to get s a 1603 extension passed.  Indeed, come January,  a Republican (and more carbon-friendly) majority is taking over and while some inside the party have said they might support legislation implementing a federal Renewable Electricity Standard, don’t expect a conservative majority to pass legislation providing long-term renewable energy subsidies.  That’s why the lame duck session is so crucial since it would be the only time to get 1603 extended in a timely manner.

In the meantime the industry is waiting, and  growing concerned, about the impact the House Republican majority will have on their industry. One investment banker who advises a number of renewable energy and clean tech clients is pessimistic,  telling G.E.R. that he doubts Republicans will even get behind RES legislation. “There’s almost no momentum for any green legislation,” he says. “I just get the feeling that the coal lobby is winning these days,” he adds.

That policy uncertainty and ongoing reverberation from the global financial crisis has put the  U.S. wind power market in a bind. This year wind capacity  is expected to drop by 39 percent.  This sour market has  created something of a buyer’s market. This week, for example, California wind developer Champlin Windpower sold itself to private equity fund Good Energies.  As part of the deal the fund has committed to invest $50 million on project development.  An industry source told G.E.R. that Good Energies and Champlin are looking to start construction of their first joint power plant at the end of next year.

VC and PE Watch

OnGreen, a California-based social media platform that connects potential investors with  renewable energy and cleantech entrepreneurs, secured a $1.4 million Series A financing from a Chinese investor.

A leading renewable energy-focused private equity fund has acquired a stake in a California-based developer of utility-scale wind farms.

Rambling

This week we released our monthly ranking:  “The Top 10 Players in Green Energy.”  Taking the top spot was BrightSource Energy CEO John Woolard. Indeed October was a busy month for this deal-maker extraordinaire. In a short span under Woolard’s leadership BrightSource secured a $300 million equity investment, forged a strategic partnership to deploy its utility-scale solar power plants and secured crucial federal and state permits.

By. Green Energy Reporter




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  • Anonymous on November 15 2010 said:
    I hope no one is waiting on the sidelines for government money. Private money awaits us and we need it all!

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