The IRS issued an important piece of guidance related to clean energy finance this week. It is the annual inflation adjustment for the Production Tax Credit (PTC) and it increased the credit from 2.2 to 2.3 cents per kWh for full qualifying energy property like wind and geothermal, while the partial credit for sources like open-loop biomass and incremental hydro remained at 1.1 cents per kWh (also adjusted were the inflation factors for Indian and refined coal).
More important is what is still missing – despite widespread expectation for a first quarter release, the long awaited rules on how to determine the start of construction for purposes of determining what projects will be PTC eligible at the end of 2013 still have not been issued.
When the PTC was extended as part of the fiscal cliff deal during the holidays there was an important change in the method for determining whether a project would qualify for the credit. Historically, the qualification of property was based on the date the property was placed in service (and it’s worth noting that this rule is actually somewhat vague and the application sometimes very nuanced). Now, qualification is based on when construction for the facility begins. As long as construction starts before year-end, property is eligible for the credit.
The problem, and the new rules will address this – no one is exactly sure what it means to begin construction. There are some obvious assumptions that can be made, but at the edges, such as where a developer is contracting for facility components, the final vision or location of a project is not completely fixed, or instances where an adequate financial commitment is made to begin construction, the rules for qualification will be vital. Developers, vendors and especially investors are waiting for clarity before making key project decisions. While some projects are moving, this overhanging uncertainty has slowed countless projects. ( Continue… )
Energy savings mean savings for tax day 2013.
Congress extended federal tax credits for energy efficiency in early January. That means homeowners can earn as much as $500 per year for investments in energy-saving windows, water heaters, air conditioners, and a host of other home improvements.
"Rest assured, if you’re doing something that’s uniquely beneficial for the environment, there's likely a tax credit there," says Mark Steber, chief tax officer at Jackson Hewitt Tax Service, a tax-return preparation firm headquartered in Parsippany, N.J.
The savings aren't enormous, but they're easy to come by. Energy-efficient appliances are more prevalent than ever, and many homeowners may own more than they even realize. ( Continue… )
It is said that the market climbs a wall of worries, and there is much to worry about globally: European Bank debt crisis that never seems to be resolved though the Euro higher ups always declare victory after each eruption; the U.S. debt crisis just gets larger every day; the U.S. housing market, is it in recovery mode or exactly how does one define a recovery?; Europe is in recession; U.S. GDP is on life support.
I could go on, as the macro list of worries rolls along, but let's look at the immediate data. Crude supplies rose again this week by 2.7 MM barrels (bbl) higher than analysts expected - 0.2 MM bbl. Gasoline supplies declined less than expected, distillates fell more than expected, and refineries ran a bit more than expected as more refineries return from winter maintenance and begin to gear up for summer gasoline production.
However, gasoline demand has begun to slide from its earlier higher demand in the beginning of the year from last year; over the four-weeks ending in March of this year demand declined slightly from the comparable period last year, and this as the weather begins to moderate.
More surprising, though it should not be, is that the WTI-Brent differential has collapsed from over $20/bbl as recently as the end of February to between $13.00 and $14.00/bbl. Since the beginning of the year WTI has increased 3% in price while Brent has fallen by a like amount, and the WTI-Brent spread has narrowed by 34%. Why? Well earlier this year Brent production was constrained due to pipeline issues that are now resolved and we are seeing more Brent supplies and that coupled with Europe deepening in recession is weighing on its price. ( Continue… )
Californians support coal despite LA plan to ban it (Sponsor content)
Clean coal technology enjoys majority support among California voters. It is especially interesting that this support is broad-based, encompassing majorities of Republican, Democratic and voters declining to state a party affiliation. Given that the most important issues to California voters are “jobs and the economy”, voter sentiment that the state’s energy policies have made it less competitive should be a red flag to Sacramento legislators.
In a recent survey of California voters, nearly 57% answered yes when they were asked “Do you support or oppose developing new clean coal power plants in California?”
When asked the question, “Do you think that California’s energy policies have made the state more or less competitive?”, more than 43% answered yes. And particularly telling is the fact that nearly one-quarter of California voters (24.7%) feel that the state’s energy policies have made the state far less competitive.
These numbers are in stark contrast to comments recently made by Los Angeles Mayor Antonio Villaraigosa when he announced that the city will become the only city in America that won’t get any electricity from coal by the year 2025. ( Continue… )
Before the departure of former Chief Executive Lord Browne in 2007, BP (NYSE: BP) invested heavily in alternative energy projects as part of its ‘Beyond Petroleum’ strategy. Since then the British energy company has abandoned this strategy, in favour of a higher focus on oil and gas, where it believes greater margins exist.
It exited the wind sector in Europe, and then near the end of last year announced that it would also sell its solar business. The final nail in the coffin to their original renewable energy plan is delivered by their announcement to now sell all US wind farm assets.
A company statement read: “BP has decided to market for sale our US wind energy business as part of a continuing effort to become a more focused oil and gas company and re-position the company for sustainable growth into the future. For BP, this effort represents another example of prudent and active management of our global portfolio, consistent with our pledge to unlock more value for shareholders.” (Related article: Has Belgium Cracked the Problem of Storing Wind Power Electricity?)
Whilst the sale is part of the strategy to focus on the core oil and gas business, it also forms part of the program to raise $38 billion from assets sales in order to cover the costs that BP is facing from the fallout of the 2010 Deepwater Horizon spill in the Gulf of Mexico. ( Continue… )
As President Obama travels to San Francisco to attend two fundraisers Wednesday – one hosted by an anti-Keystone billionaire, the other by an oil heir – environmental activists are stepping up their campaign to convince the president that the Keystone XL oil pipeline is a bad idea.
So far, they haven't convinced the broader public. Two-thirds of Americans support the construction of the Keystone XL pipeline, according to a new Pew survey. The oil and gas industry says Tuesday's poll is an encouraging show of support for the pipeline, which would transport energy-intensive crude from Canadian tar sands (also known as oil sands) to refineries in Texas.
"The Pew poll is a reflection of the growing public support for KXL," wrote Sabrina Fang, a spokeswoman for the American Petroleum Institute, in an e-mail. "The majority of the American people want KXL to be built because it will create thousands of jobs and enhance our nation’s energy security."
Critics challenge Keystone's economic benefits, saying the pipeline would create few permanent jobs and be used to export oil out of the US. The State Department's most recent review concluded the project would potentially support 42,100 annual jobs over a one- to two-year construction period and 35 permanent jobs. ( Continue… )
The not-so-distant future of driving will be first increasingly semi-autonomous and then fully automated, as technology to build self-driving cars gains traction, promising both safer driving and lighter-weight vehicles that save on gas.
The development of advanced driver assistance systems (ADAS) will first see some seemingly innocuous changes in the way we drive—from autonomous driving in traffic jams, parking and lane-changing assistance on highways and pedestrian detection cameras to predictive emergency braking. Essentially, the first semi-autonomous steps will free up hands to so a bit of illegal texting on mobile phones and keep us alert to avoid traffic accidents.
Audi's ADAS is getting increasingly personalized, with advanced systems taking into account how an individual driver operates, assessing his or her driving patterns and driving history. (Related article: Clarifying the Clean Energy Innovation v Deployment Debate)
In its parking assistance, Audi is working to be able not only to alert a driver to available parking spots in congested urban areas, but also to add a Big Brother element that would let a driver know when someone else’s parking meter has expired so they can have the car ticketed.
And if you aren’t paying attention, this advanced human-machine interface technology will snap you back into focus. When that fails, an adaptive cruise-control (ACC) system could be put into effect to keep drivers safe. ( Continue… )
Sales of the Nissan Leaf roared to life in March, breaking the record for sales of electric vehicles in a month that may turn out to be the industry's best yet.
"[I]t’s looking like a record-breaking month for plug-in sales," wrote Genevieve Cullen, vice president of the Electric Drive Transportation Association, a Washington-based advocacy group, in an e-mail. "The numbers show a growing, robustly competitive market, in part because of the increasing number of options that manufacturers are offering."
It's a notable jump for electric vehicles, but less significant in the broader automotive market.
Last month, Nissan sold 2,236 Leafs, a 286 percent increase over March 2012. To put that in perspective, analysts estimate total March 2013 car and truck sales reached nearly 1.5 million.
"To sell a couple thousand in a month, it’s a drop in the bucket," said Cosmin Laslau, an analyst at Lux Research, a Boston-based research and advisory firm. "I don't mean to dismiss it entirely, but the bigger question is: How do you get that number from 2,000 to 200,000?"
One way to do it is to lower prices – a strategy that seems to be working for Nissan. Electric car batteries are expensive and the company has moved manufacturing plants to the US in an effort to make the Leaf cost-competitive. The March sales numbers reflect the first full sales month for the new, lower-priced Nissan Leaf 2013. ( Continue… )
Exxon Mobil dispatched more than 100 responders to a community in Arkansas to address a release from its Pegasus pipeline system. So far, the company said it has managed to recover thousands of barrels of heavy Canadian crude oil and water from last week's spill. Though no major waterways were said to be polluted from the spill, the Environmental Protection Agency categorized the incident as a major release. The accident comes roughly two weeks before U.S. State Department officials head to Nebraska to vet public comments on the Keystone XL oil pipeline. Critics of the project, however, got in line early following the Arkansas spill.
In its latest update, Exxon said it had 15 vacuum trucks, 33 storage tanks and 120 employees in Mayflower, Ark., responding to a release from the Pegasus pipeline system. The company said around 12,000 barrels of oil and water were recovered, boom was deployed and a claims hotline was already established. In response to the incident, the company said nearly two dozen homes were evacuated, though no oil has managed to migrate to nearby Lake Conway.
Late last month, U.S. pipeline safety regulators recommended Exxon pay a $1.7 million fine for a 2011 spill from its Silvertip pipeline into the Yellowstone River in Montana. About 1,500 barrels of crude oil spilled from that release, which was said to be tied to river scour. The government said in that case that Exxon (NYSE: XOM) didn’t take seasonal flooding, erosion and river scour into Silvertip safety considerations. No cause was indicated yet for the Arkansas release. (Relative article: Keystone XL – Why Protestors Should be Focusing on a Much Bigger Issue) ( Continue… )
Tesla Motors announced late Sunday it expects to report a profit for the first time in the electric carmaker's 10-year history. Meanwhile, Fisker Automotive, its main competitor, may be careening toward bankruptcy.
The contrasting narratives are not unusual in an electric car industry marked by highs and lows. Fisker shut down production of its plug-in hybrid Karma last November after its battery manufacturer declared bankruptcy. It has struggled, and failed, to restart production of the luxury sedan ever since.
Tesla is no stranger to hiccups either. A calamitous February test drive by a New York Times reporter created a public relations headache. The ensuing spat between Tesla and the Times raised questions over the ability of the Model S battery to perform in cold weather – a sensitive topic for an industry that has worked to assuage public concerns about the battery range of electric cars.
But Tesla rolled with the punches and has suffered fewer blows than its rival. It expected to sell 4,500 Model S cars in the first quarter of 2013, but the company announced late Sunday it sold 4,750 units. Shares of Tesla stock shot up 16 percent in trading Monday. The success is a departure from the last three months of 2012 when the company reported a $75 million loss. ( Continue… )