Is there money to be had in carbon restrictions?

Smart companies are looking to profits they can earn when state governments clamp down on carbon emissions.

Toby Talbot/AP/File
In this file photo, a wind turbine is seen at the First Wind project in Sheffield, Vt. As state governments work to reduce emissions, companies are searching for ways to make a profit.

Matthew Wald of the NY Times reports that two companies called SolarReserve and BrightSource are thinking ahead about profits they can earn when state electric utility commissions enact the combined policies of aggressive renewable portfolio standards (RPS) and time of day pricing.  A RPS of 33% would mean that an electric utility must purchase 33% of its power from renewable sources such as wind and solar.  If total demand peaks each day at around 3pm and then declines throughout the rest of day gradually , then the price of electricity could soar at around 6pm each day because the sun is no longer shining and solar won't be generating much electricity.  

Anticipating that there could be serious profits to be earned by those generators who have capacity to sell at that hour,  these companies are developing storage technologies that will allow them to sell at that hour.Note the key synergy here.  Solar power becomes more "feasible" if there exists such a storage technology so there will be greater investment in solar.  As there is greater investment in solar, this encourages more investment in storage technology. Similar to peanut butter and jelly, the two go together.  Now is government $ needed here? The DOE is betting on SolarReserve.  Will this be another Solyndra?  In the absence of government $, would the private sector have funded this?  Is VC capital aggressive or highly risk adverse?

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