The United Nations Environment Program (UNEP) today released its latest study of global renewable energy investment.  2007 was another record-setting year for investments in renewable energy and energy efficiency, according to UNEP’s “Global Trends in Sustainable Energy Investment 2008.” 

More than $148 billion was raised and invested in these sectors during 2007 – 60% more than 2006 - even as the credit crunch spread, deepened and weakened the US and other economies. 

Though the bulk of investment capital flowed into Europe and the US, respectively, the share of total investment accounted for by China, India and Brazil increased 14-times in absolute terms – from $1.8 billion to $26 billion, and from 12% in 2004 to 22% in percentage terms last year, according to the UNEP study, which was prepared by New Energy Finance. 

Facts & Figures

“Sustainable energy transaction volume” as defined by UNEP totaled $204.9 billion globally in 2007.   Some $98.2 of the total flowed into new renewable energy generation; $50.1 billion went into technology development and scaling up manufacturing.  Mergers and acquisitions accounted for $56.6 of the total. 

Wind energy led the renewable energy field, attracting more than $50.2 billion of investment capital.  Solar power was the fastest growing segment of the market, attracting approximately $28.6 billion in 2007, which translates into an average annual growth rate since 2004 of 254%.

“The clean energy industry is maturing and its backers remain bullish.  These findings should empower governments - both North and South - to reach a deep and meaningful new agreement by the crucial climate convention meeting in Copenhagen in late 2009,” Achim Steiner,  UNEP’s executive director, commented in a media release.

Renewable energy and energy efficiency investment was subdued by the end of 2007 and into Q1 2008 with banks tightening credit and restructuring in the US ethanol industry as concerns over rising food prices and supply shortages took their toll. 

Investment flows rebounded in most sectors during Q2, however, even as economic and geopolitical concerns hung overhead.  Sustainable energy venture capital and private equity in rose 34% in Q2 2008, new asset finance was up 8% and public market investment was showing a strong recovery, as exhibited by Portuguese utility EDP’s spinning off its renewable energy business,  EDP Renovaveis, in an IPO, according to the study.

“Just as thousands were drawn to California and the Klondike in the late 1800s, the green energy gold rush is attracting legions of modern day prospectors in all parts of the globe,” said Steiner, who is also a UN Under-Secretary General.

Interested in listening in on an executive summary of the report’s findings?  You can download the full report, as well as listen to a podcast of Steiner doing just that in various languages here. 

In a rare showing of bipartisan support, The Renewable Energy and Job Creation Act of 2008 (H.R. 6049) overwhelmingly passed the House on May 21^st with a vote of 263–160.

As we reported on May 19^th, the bill would have extended tax credits for wind, solar, and other renewable and alternative energy development projects.

All that was needed to help insure a path for commercial scale renewable energy development was that same spirit of bipartisanship from the Senate acting in the interest of the people.

A Republican filibuster and failed cloture vote today to stop it made sure that didn’t happen.

Renewable energy development stands poised to help move the country move toward a sustainable energy future. Wind energy grew 45% last year. The Department of Energy reported last month that wind could provide up to 20% of the nation’s energy needs by 2030. But with a start-stop strategy of lukewarm support (at best) from government, renewable energy development finds it difficult to find an economic footing in the face of well established subsidies for fossil fuel.

And that wasn’t enough for one day. Republicans also blocked debate on the Consumer-First Energy Act of 2008 (S.3044) with another rejected cloture motion that would have ended a filibuster.

The Consumer-First Energy Act is aimed at curbing price gouging, would deny large oil companies (those that produce at least 500,000 barrels of oil per day) the manufacturing tax deduction, impose a windfall profits tax, and collect new tax revenues for an energy independence and security trust fund. The bill would also limit commodities speculation by effectively raising margins for futures contracts.

That’s two filibusters this week and one last week.

The Senate is 0 for 3.

Carl Pope, Executive Director of the Sierra Club said in a statement, in part, that 

The Senate Republican Leadership has now proved it has no interest whatsoever in even discussing the solutions to our mounting energy and economic crises”.

By blocking debate on these two critical issues, the Senate has once again failed to show the vision and leadership required of it as we move into a changing energy future.

We can embrace that change, or find it as a very rude awakening, kicking and screaming the whole way. It appears that the Senate has been kicking and screaming a lot lately, with little to show for it.

Sources and Further Reading
Oil & Gas Journal
SolveClimate.com

A British professor asserts that by 2080 some parts of southern England might be too hot to grow grapes. In a book entitled ‘The Winelands of Britain: past, present and prospective‘ professor Richard Selley argues this on the basis of new climate change models indicating temperature rises of up to 5 degrees centigrade by 2080 in southern England.

Instead of growing grapes, this kind of climate only allows for the production of raisins, currents and sultanas, according to Selley, an emeritus professor at the Imperial College London. If temperatures continue to rise as predicted by the UK’s Met Office and the UN’s Intergovermental Panel for Climate Change (IPCC), many vineyards in the Southern parts of Britain could face extinction within the next 75 years, Selley predicts.

The professor’s approach to climate change and wine making is quite unique. Normally the debate focuses in on how winemakers can eliminate the negative impact they have on the environment. Selley’s work paints a much bleaker picture because he takes into consideration the future impact of all CO2 emissions on winemaking as a human activity.

Selley says that by 2080 UK vineyards growing Merlot and Cabernet Sauvignon will likely have migrated further north to areas including Yorkshire and Lancashire. Climate change has affected UK wine growers since Roman times, but the effects have been getting more noticeable during the past 20 years.

Grapes that are growing in ‘intermediate’ warm climates on the globe have started to be planted in the UK for the first time in the last two decennia. Already British southeastern vineyards have won international prizes for wines made from Pinot Noir and Chardonnay grapes.

“The northernmost limit of UK wine-production has advanced and retreated up and down the country in direct relation to climatic changes since Roman times", said Selley. “Now, [with up to date climate change data] I have been able to map how British viticulture could change beyond recognition in the coming years", he added.

If you are interested in the reverse side of this story -how wineries impact the environment- check out the specialist International Wine Industry Greenhouse Gas Calculator users guide at New Zealand Wine.com.

Climatologists are not agreed for the time being what the exact contribution to greenhouse gas output is by the winemaking industry but a climatologist from Oregon University, Dr Gregory Jones, points out that various estimates indicate it hovers around 0.1%. "There are numerous entities working on better understanding the viticulture (sink) and winemaking (source) issues of CO2 but we have much to learn. What is absolutely clear though is that wine production is much, much lower that most broad acre crops for various reasons (use of fertilizers, herbicides, tractor passes, etc.)", Jones said in an interview at the International Climate Change and Wine Conference in Spain last February.

Earlier this week we were hopeful that, after making it through the Way and Means Committee, the Energy and Tax Extenders Act of 2008 (H.R. 6040) would pass the full House.

On Wednesday the bill was approved in the House by a vote of 263–160. If the bill can pass the Senate, where it has been opposed in the past due to reductions in tax credits to oil and gas companies, incentives for wind, solar, and other alternative energy technologies (including carbon sequestration and “clean” coal) will be extended, helping to spur much needed investment and development in renewable energy.

This time around the bill does not have the reductions in tax credit for fossil fuel companies, but closes a tax loophole that will cost hedge fund managers millions of dollars. Many Republicans and the White House are opposed to closing that loophole. The Bush administration has threatened a veto.

If bill does not pass the Senate and the tax credits are allowed to expire at the end of this year, analysts estimate that up to 100,000 jobs and almost $20 billion in investment will disappear.  

Sources and Further Reading:
Renewable Energy World
Grist
SustainableBusiness.com
BusinessGreen.com

Last Thursday, the House Ways and Means Committee voted 25–12  to approve the Energy and Tax Extenders Act of 2008 (HR6049) worth $54 billion in tax breaks including the expansion of the refundable child tax credit and breaks for education and small business expenses. The bill also includes an extension of the Production Tax Credit for wind energy and other other tax breaks for research and development in solar and other alternative energy technologies. A breakdown of the energy-related tax breaks in the bill include:

• A six-year extension in the investment tax credit for solar energy
• A three-year extension of the production tax credit for biomass, geothermal, hydro-power, landfill gas, and solid waste
• A one-year production tax credit extension for wind energy
• Incentives for non-corn based (cellulosic) ethanol and biodiesel
• Incentives for companies that produce energy efficient products like plug-in hybrids
• Incentives for energy conservation in both commercial and residential buildings
• Tax credit bonds to help state and local governments make energy conservation investments in public infrastructure and invest in research

Late last year congress extended renewable energy tax credits one year, then set to expire on December 31^st 2007.

With the realities of oil now trading at over $127 a barrel as of this writing, renewable energy sources show increasing economic viability, without even considering any long term sustainability and climate issues inherent with continued and increasing dependence on diminishing sources of oil.

As seen in the recent study from the Department of Energy that we wrote about last Friday, wind and other renewable energy sources stand poised to help transition the nation into a new energy economy, providing new and sustainable sources of energy, industrial growth, and hundreds of thousands of jobs.

One stumbling block to this is the halting nature of the renewable energy tax credit. The U.S. government directly subsidizes (pdf) the oil industry (by some estimates to the tune of $61 billion). The cost of gas and oil, while rising substantially, has never reflected its true cost by externalizing the cost of dependence, environmental degradation, source depletion, and climate impact (how does $480 a barrel sound?).

In the meantime, renewable energy has been hampered by inconsistent and half-hearted support from the federal government. Last year represented only the second time the production tax credit was extended before allowing it to expire. Between 1999 and 2004, the PTC was left to expire, promoting an on-again off-again atmosphere, dampening progress in renewable energy development – particularly wind.

Alternative energy projects take years to develop, plan, permit, and build. Investment in these projects depend on the 1.9 cent per kilowatt/hour tax incentive to help bring the potential of wind and other renewable to fruition. When that tax incentives disappear, so do billions of dollars in investment and ten of thousands of jobs. Poof!

Tuesday May 20th is a “National Day of Action” for renewable energy, calling on clean energy advocacy groups, environmental organization, and companies with a stake and interest in developing clean energy to call their representative in Washington in support of the Energy and Tax Extenders Act of 2008.

The bill also provides tax breaks for coal gasification projects and other “clean coal” technologies such as carbon capture and sequestration.

Speaker of the House Nancy Pelosi hopes to bring the legislation to a full vote before the House for the Memorial Day recess.   

Sources and Further Reading
Union of Concerned Scientists
EndOilAid.org
Renewable Energy World
Grist
Solar Nation