Friday, February 27, 2009

Biofuels market set to grow beyond imagination

Middle Eastern oil sheiks move over. There’s a new kid on the energy block! Bio-fuel is the new green, completely clean fuel source. It’s also known as “agro-fuel” and can be broadly defined as any solid, liquid or gas fuel consisting of or derived from biomass. Biomass is nothing more than materials that were recently living organisms—in this case, plants and their by-products. Even better, it is a renewable energy source, unlike petroleum and coal, which once used are gone forever. Thanks to a new miraculous feat of engineering and science, this energy source has suddenly become competitive with oil, catapulting it from a backyard business into a global economic phenomenon.

Right now, bio-fuels are capturing about $23 billion of the $1.3 trillion we spend each year to power our cars, trucks, airplanes, trains and ships. That’s just two percent of the market with an astounding 98 percent upside. To say we’re at the forefront of a growth curve is an understatement.

Is the bio-fuel market set to grow by 1,000 percent? One Brazilian company planning to spend $54 billion on this new fuel by 2010 sure thinks so.

The fact is that major governments from the world over have practically guaranteed this revolution by writing it into law. The U.S., the E.U., Japan and China have all passed statutes mandating that bio-fuel be increasingly used to replace crude oil products in order to reduce emissions and to reduce dependence on foreign crude.

The market for bio-diesel is also growing at a phenomenal rate. Consumption in the U.S. grew from 25 million gallons in 2004 to 78 million in 2005, a 300 percent increase in one year! In the U.S. alone, more than 80 percent of commercial trucks and city buses run on diesel, making the potential U.S. market for biodiesel huge.

Ethanol fuel, made from ethyl alcohol, is one such bio-fuel alternative to gasoline. It is easy to manufacture and process and can be made from very common crops grown in the United States such as sugar cane and corn, which reduce the need for imported foreign crude.

Ethanol production should increase dramatically over the next couple of years because of the Energy Policy Act of 2005, which set a renewable fuels standard mandating 7.5 billion gallons of annual domestic renewable-fuel production by 2012. Furthermore, refiners will be required to blend bio-fuel into diesel and gasoline supplies.

Like with anything else, the bio-fuel industry has its share of critics too. Some of the more common complaints you’ll hear:

1. Ethanol cost too much to produce

2. Switching to Ethanol is Expensive

3. Vehicles running on Ethanol don’t get good mileage

Ethanol cost about $1 a gallon to produce at most facilities. Corn based ethanol is the most common form of ethanol in the United States. Corn is broken down into a useable fuel through a multi-step process of adding water, yeast and other enzymes. The price for corn has increased, but the more we turn to ethanol and other bio-fuels, we’ll start to see greater savings at the pump. The National Resources Defense Council calls corn ethanol “energy well spent.” Furthermore, Japanese scientists are experimenting with other vegetable oil-based fuels to help keep the cost of corn down.

A new car can be made flex-fuel capable for about $35. Ethanol is already being mixed in with the gasoline you put in your car. Auto-makers realize the importance of bio-fuels and are producing more flex-fuel models.

Right now, ethanol-run vehicles get about a quarter less mileage compared to traditional gasoline vehicles. As auto-makers focus on keeping vehicles cleaner and greener, we’re seeing the production of better engines that are able to support and run more efficiently on ethanol and other bio-fuels.

Ford, DaimlerChrysler and General Motors sell flexible-fuel vehicles that can use gasoline and ethanol blends ranging from pure gasoline all the way up to 85% ethanol (E85). By mid-2006, there were approximately six million E85-compatible vehicles on U.S. roads.

Some very prominent names have also shown an interest in the bio-fuels market. Bill Gates recently injected $84 million into one of America’s very few publicly traded bio-fuel pure-plays. Willie Nelson recently launched his own brand of bio-fuel called Bio-Willie. Richard Branson soon followed with his version called Virgin Fuel. Even Larry Page and Sergey Brin, the Google billionaires, recently toured the operations of Brazil’s largest bio-fuel producer.

President Bush was quoted in 2005 as saying, “What people need to hear loud and clear is that we’re running out of energy in America.” With crude oil prices as unpredictable and steep as ever, turning to bio-fuel as an alternative fuel source, one that is clean and can be used over again, is the way to go.”

Saturday, February 21, 2009

Cost of Solar Photovoltaic System drops

A new study on the installed costs of solar photovoltaic (PV) power systems in the U.S. shows that the average cost of these systems declined significantly from 1998 to 2007, but remained relatively flat during the last two years of this period.

Researchers at the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) who conducted the study say that the overall decline in the installed cost of solar PV systems is mostly the result of decreases in nonmodule costs, such as the cost of labor, marketing, overhead, inverters, and the balance of systems.

“This suggests that state and local PV deployment programs — which likely have a greater impact on nonmodule costs than on module prices — have been at least somewhat successful in spurring cost reductions,” states the report, which was written by Ryan Wiser, Galen Barbose, and Carla Peterman of Berkeley Lab’s Environmental Energy Technologies Division.

Installations of solar PV systems have grown at a rapid rate in the U.S., and governments have offered various incentives to expand the solar market.

“A goal of government incentive programs is to help drive the cost of PV systems lower. One purpose of this study is to provide reliable information about the costs of installed systems over time,” says Wiser.

The study examined 37,000 grid-connected PV systems installed between 1998 and 2007 in 12 states. It found that average installed costs, in terms of real 2007 dollars per installed watt, declined from $10.50 per watt in 1998 to $7.60 per watt in 2007, equivalent to an average annual reduction of 30 cents per watt or 3.5 percent per year in real dollars.

The researchers found that the reduction in nonmodule costs was responsible for most of the overall decline in costs. According to the report, this trend, along with a reduction in the number of higher-cost “outlier” installations, suggests that state and local PV-deployment policies have achieved some success in fostering competition within the industry and in spurring improvements in the cost structure and efficiency of the delivery infrastructure for solar power.
Costs differ by region and type of system

Other information about differences in costs by region and by installation type emerged from the study. The cost reduction over time was largest for smaller PV systems, such as those used to power individual households. Also, installed costs show significant economies of scale. Systems completed in 2006 or 2007 that were less than two kilowatts in size averaged $9.00 per watt, while systems larger than 750 kilowatts averaged $6.80 per watt.

Installed costs were also found to vary widely across states. Among systems completed in 2006 or 2007 and less than 10 kilowatts, average costs range from a low of $7.60 per watt in Arizona, followed by California and New Jersey, which had average installed costs of $8.10 per watt and $8.40 per watt respectively, to a high of $10.60 per watt in Maryland. Based on these data, and on installed-cost data from the sizable Japanese and German PV markets, the authors suggest that PV costs can be driven lower through sizable deployment programs.
The study also found that the new construction market offers cost advantages for residential PV systems. Among small residential PV systems in California completed in 2006 or 2007, those systems installed in residential new construction cost 60 cents per watt less than comparably-sized systems installed as retrofit applications.

Cash incentives declined

The study also found that direct cash incentives provided by state and local PV incentive programs declined over the 1998-2007 study period. Other sources of incentives, however, have become more significant, including federal incentive tax credits (ITCs). As a result of the increase in the federal ITC for commercial systems in 2006, total after-tax incentives for commercial PV were $3.90 per watt in 2007, an all-time high based on the data analyzed in the report. Total after-tax incentives for residential systems, on the other hand, averaged $3.1 per watt in 2007, their lowest level since 2001.

Because incentives for residential PV systems declined over this period, the net installed cost of residential PV has remained relatively flat since 2001. At the same time, the net installed cost of commercial PV has dropped — it was $3.90 per watt in 2007, compared to $5.90 per watt in 2001, a drop of 32 percent, thanks in large part to the federal ITC.

Wednesday, February 11, 2009

Earth's second warmest year

Climatologists at the NASA Goddard Institute for Space Studies (GISS) in New York City have found that 2007 tied with 1998 for Earth's second warmest year in a century.
Goddard Institute researchers used temperature data from weather stations on land, satellite measurements of sea ice temperature since 1982 and data from ships for earlier years.

The greatest warming in 2007 occurred in the Arctic, and neighboring high latitude regions. Global warming has a larger affect in polar areas, as the loss of snow and ice leads to more open water, which absorbs more sunlight and warmth. Snow and ice reflect sunlight; when they disappear, so too does their ability to deflect warming rays. The large Arctic warm anomaly of 2007 is consistent with observations of record low geographic extent of Arctic sea ice in September 2007.

"As we predicted last year, 2007 was warmer than 2006, continuing the strong warming trend of the past 30 years that has been confidently attributed to the effect of increasing human-made greenhouse gases," said James Hansen, director of NASA GISS.

"It is unlikely that 2008 will be a year with truly exceptional global mean temperature," said Hansen. "Barring a large volcanic eruption, a record global temperature clearly exceeding that of 2005 can be expected within the next few years, at the time of the next El Nino, because of the background warming trend attributable to continuing increases of greenhouse gases."

The eight warmest years in the GISS record have all occurred since 1998, and the 14 warmest years in the record have all occurred since 1990.

A minor data processing error found in the GISS temperature analysis in early 2007 does not affect the present analysis. The data processing flaw was failure to apply NOAA adjustments to United States Historical Climatology Network stations in 2000-2006, as the records for those years were taken from a different data base (Global Historical Climatology Network). This flaw affected only 1.6% of the Earth's surface (contiguous 48 states) and only the several years in the 21st century.

The data processing flaw did not alter the ordering of the warmest years on record and the global ranks were unaffected. In the contiguous 48 states, the statistical tie among 1934, 1998 and 2005 as the warmest year(s) was unchanged. In the current analysis, in the flawed analysis, and in the published GISS analysis, 1934 is the warmest year in the contiguous states (but not globally) by an amount (magnitude of the order of 0.01°C) that is an order of magnitude smaller than the certainty.


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