NEW ENERGY STILL BEST BET

Clean Energy Shows Spark
Keith Johnson, February 22, 2010 (Wall Street Journal)

"The clean-energy industry is poised for record growth in the U.S., with big companies expecting to invest billions of dollars, despite Washington's failure to enact limits on greenhouse-gas emissions.

"Areva SA, a world leader in nuclear power…[is] buying California solar-equipment maker Ausra Inc. The French energy company said demand for solar plants is likely to jump by 20% a year over the next decade and that it plans to be a leader…Many politicians and environmentalists had argued that a clean-energy revolution requires passage of a cap-and-trade program that limits greenhouse-gas emissions…But that doesn't seem to be the case. Existing programs to support clean energy, combined with the prospect that Congress will pass an energy and jobs bill, have many analysts projecting a banner 2010."

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"Natural gas could sap near-term enthusiasm for renewable energy and there's concern that government incentives could have only short-term effects…But the biggest names in renewable energy…say they are confident…NextEra, a unit of FPL Group Inc. and the largest wind-farm operator in the U.S…recently purchased a trio of wind farms…[and] plans to add one gigawatt of wind power this year…Spain's Iberdrola, the world's largest renewable-energy company…was the biggest recipient of U.S. government grants for clean-energy projects last year, receiving $570 million, and expects to receive $400 million more this year to spur wind-farm development…Clean-energy companies say it would have taken years before the penalties in cap-and-trade legislation would have sparked development…

"The clean-energy sector last year braced itself for trouble after the credit crunch and the recession…But the U.S. government's stimulus package, which included cash grants for clean-energy projects, turned the year into a record breaker. The American wind-power industry, for example, installed nearly 10 gigawatts of new turbines, keeping the U.S. the world leader by capacity…"

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"Bloomberg New Energy Finance, a clean-energy consulting firm based in London, figures world-wide investment in clean energy could reach $200 billion this year, easily topping the record of $155 billion set in 2008…The [U.S.] Department of Energy still has almost $30 billion in stimulus grants left to spend this year…[and] the Obama administration's budget calls for a jump in federal loan guarantees for new energy projects…Energias de Portugal SA's Horizon plans to invest $4 billion in the U.S. through 2012. GE, which dominates the U.S. market for wind turbines, expects revenue in its clean-energy division to rise to $25 billion this year…

"The companies do have concerns, however. Natural-gas prices are relatively low, which makes wind farms less economically competitive. And many companies worry that the short-term incentives for clean energy, especially the cash grants, could simply drive firms to accelerate already planned investment in clean energy rather than create new investment…That's why a lot of firms are still pushing for more long-term support, such as the federal renewable-energy targets…"