US Investigating Chinese Solar Imports

Photo by: Living Off Grid

China’s new energy manufacturing sector has been growing rapidly in the last two years. In 2009, there were $640 million in U.S. imports of Chinese solar. Last year that amount grew three times that amount to $1.5 billion. U.S. solar manufacturing however, has been struggling.

SolarWorld Industries America, Inc., joined by other American solar manufacturers, alleged in a petition to the Department of Commerce that they have suffered financial injury and requested tariffs to be imposed on Chinese solar. The Chinese government allegedly provides preferential loans, land discounts, discounted raw materials, tax breaks, export assistance grants, and export insurance to domestic solar companies. The claim is that illegal Chinese subsidies result in artificially low prices that are unfairly disrupting sales of American manufactured cells. The scale of the Chinese subsidies may violate World Trade Organization (WTO) rules. The requested tariffs on Chinese solar panels, which could potentially exceed 100%, are intended to level the playing field to allow the struggling U.S. solar manufacturing sector to compete.

U.S. solar generating companies and the Coalition for Affordable Solar Energy oppose the potential duties. The Coalition has 25 members, including U.S companies, Solar City and MEMC Electronic Materials Inc., as well as Chinese companies with U.S. arms such as Yingli Green Energy and Suntech Power Holdings. There is criticism that the tariffs will cause prices for solar to rise, making solar projects too expensive. In response to the potential action CECEP Solar Energy Technology Co. Ltd., China’s largest solar power developer, put $500 million worth projects on hold in anticipation of the foreboding rise in costs.

Instead of imposing tariffs on Chinese solar, the U.S. should provide new legal subsidies to domestic solar manufacturers. The 1603 Treasury Cash Grant Program for renewable energy projects is sunsetting in a few months. If the U.S. wants to be a part of the green energy future, incentives like these need to be extended and expanded. Inciting a trade war will not be the solution to growing solar in the U.S.

On December 5th, the ITC will vote on whether there is sufficient evidence of injury to U.S. manufactures such that a case should go forward. In January, the Commerce Department will make preliminary decisions on whether to impose the duty on Chinese-subsidized solar panels.

Has the Sun Set on U.S. Green Tech?

Photograph courtesy of Living Off Grid on Flickr

Solar panel maker Solyndra, LLC is turning off its lights. After receiving a $535 million loan guarantee from the federal government and raising over $1 billion from private sector investors, Solyndra filed for Chapter 11 bankruptcy. The company is looking into a possible sale of its business or licensing out its technology. Solyndra developed a unique thin-film photovoltaic technology that the company claimed to have the lowest system installation costs on a per watt basis for the commercial roof top market. Earlier this year, President Obama visited a California Solyndra facility to publicize the U.S. government’s investment in green technologies and highlight its incentive programs aimed at promoting clean tech development in the country. The shut down creates a two-fold hit; it exposes an embarrassing vulnerability for Obama administration policy and raises questions about the rationale for U.S. government investment in green technologies.

On the political front, Republican lawmakers are capitalizing on the bankruptcy to highlight a flaw in the Obama administration’s stimulus plans. At a House Energy and Commerce Committee (HECC) panel hearing on September 14, Republicans released a report suggesting that administration officials rushed Solyndra’s loan award and failed to note obvious risks in supporting the company. In response, Democrats argued that Republicans are using the Solyndra bankruptcy to garner criticism for other clean energy projects because of a disbelief in climate change. Congressman Waxman, top Democrat on the HECC noted, “The majority of Republicans on this committee deny that climate change is real. If you are a science denier, there’s no reason for government to invest in clean energy.”

Abroad, foreign governments invest heavily in renewable energy technologies within their own countries and provide incentives for the consumption of the technologies. China leads the way and invests billions of dollars in green tech. Ironically, China’s investment is one of the reasons for Solyndra’s fail. The American company was not able to provide a cost competitive product with those developed in China.

From an economic perspective, renewable energy technology does not follow the traditional supply/demand model. Significant front-end investments are needed for renewable technologies to reduce sufficient costs to allow for competition with coal, natural gas, and nuclear energy. Asian and European governments led the way in these investments and as a result, those countries have a head start in tech development. Not only are Europe and Asian in control of the most cost competitive solar technologies, but they are bringing them to the U.S.

Early policy incentives for the installation of renewable technology in Europe, particularly in Germany and Italy, led to an increase in demand that European companies met with supply, eventually driving down the cost of the products. Technology companies rapidly grew to meet the demand. In response, policy makers relaxed incentives and took a back seat, thereby allowing the market to naturally play out. The lack of incentives resulted in a leveling off of demand, while supply continued to grow as companies worked toward creating better and more cost effective products. Currently, demand is just about tapped out in Europe. Economists predict that European companies will now bring their product to the U.S. market, making it even more difficult for emerging American solar technologies.

Where does that leave the U.S.? Demand for alternative energy, including solar, will rise as traditional energy supplies deplete. The U.S. is one of the world’s top energy consumers, and therefore must play a role in the development of green technologies for security and economic reasons. A mix of policy incentives and public financial backing is needed to ensure the U.S.’s place in the green tech arena. However, the Solyndra bankruptcy is illustrative of the risks of friendly green tech policy. It is probable that the bankruptcy will dissuade lawmakers on both sides of the aisle from supporting future green tech incentives. Lawmakers must search for a swift and creative solution for this bind before we are all left in the dark.

Gasping for Air: How the House is Trying to Choke the EPA Out of the Climate Change Debate.

In an effort to improve the U.S. government’s knowledge of the causes and effects of climate change, the Department of Energy launched the Scalable, Efficient, and Accurate Community Ice Sheet Model (SEACISM). SEACISM is an endeavor to perfect algorithms used at the Oak Ridge National Labora+tory to measure depleting glacial ice in countries such as Greenland. The DOE hopes that SEACISM will create enough data by 2013 to adequately inform the Intergovernmental Panel on Climate Change.

Despite this lack of knowledge, House Republicans proposed a bill on February 2, 2011 which would prohibit the Administrator of the Environmental Protection Agency (EPA) from promulgating rules pertaining to greenhouse gas emissions in efforts to address climate change. The Energy Tax Prevention Act, proposed by Rep. Fred Upton of Michigan, is in response to a variety of administrative rulemakings amending the permitting process for Prevention of Significant Deterioration (PSD). PSD is a permitting process instituted by the 1977 Amendments of the Clean Air Act, to prevent a state that is in compliance with the EPA’s standards on “criteria pollutants” from falling out of the acceptable pollution levels. As part of this permitting process, new sources of regulated materials must incorporate the “Best Available Control Technology” to prevent gas emissions. This can require the installation of costlier pollution reduction technologies in proposed plants, factories, etc. The PSD regulations were amended to include greenhouse gases as a pollutant requiring the BACT after the Supreme Court’s ruling in Massachusetts v. EPA, which permitted the Administrator of the EPA to regulate greenhouse gases.

The Energy Tax Prevention Act would repeal the various rulemakings the EPA has made regarding “concerns over climate change”, and would prevent any future attempts at regulation by the EPA. The Clean Air Act was intended to be technology forcing, placing burdens on polluters so as to force industry standards to adopt newer and cleaner methods of doing business. By removing greenhouse gases out of the purview of PSD, the technology forcing ethos behind the CAA and its subsequent amendments is eroded. While PSD is not the most stringent standard imposed by the CAA, and allows for consideration on a case by case basis of what is technology and economically feasible, the BACT requirement is meant to force industries to consider and incorporate continuously progressing pollution reduction technology.

The debate goes to the heart of contemporary political issues: on one side are pro-business laissez faire supporters wishing to keep business costs down in the hopes of improving the American economy, and on the other side are environmentalists and climate change experts who see the hands off approaches to business as threats to the public health and welfare. The competition of interests creates a foreboding air of stalemate for the representative branches of the U.S. Government. In a climate where the basic existence of climate change and human contribution are so diametrically opposed, it is wishful thinking to believe in any preventative action being taken to better air quality.

Although the bill is unlikely to pass the senate due to the absence of a sufficient majority, the Obama Administration already vowed to veto the bill in the event of the bill’s passage. With climatologists claiming that the point of no return for remedial action is fast approaching, the actions by climate control opponents attempting to remove technology requirements for greenhouse gases further postpones any significant curtailment of the U.S.’s contribution to this potential ecological crisis. Hopefully, the SEACISM project at Oak Ridge can provide some much needed clarity to the issue so as to allow for meaningful discussion based not on opinion but scientific facts; however without scientific certainty this legislative gridlock may be insurmountable.

Japanese Nuclear Emergency Response

An 8.9 magnitude earthquake (the 5th largest earthquake ever recorded) struck Japan last night northeast of the island of Honshu. The quake unleashed a massive tsunami into the Japanese seaboard. As the sun rose in the land of the rising sun this morning, the full extent of the damage and devastation was still being ascertained. Even by the most cautious estimates, a horrible human tragedy occurred: hundreds are believed to be dead and many more have lost their homes.

Potentially making matters worse, the quake damaged several nuclear power plants, forcing officials to declare a nuclear emergency. Officials shutdown at least four reactors along Honshu’s eastern seaboard: Onagawa, Fukushima Daiichi, Fukushima Daini, and Tokai (see the map above). Some reports indicate that as many as eleven reactors have experienced shutdowns. This has left many residents, quite literally, in the dark.

Japan is the third largest producer of nuclear energy in the world, behind the United States and France and generates 30% of its power using nuclear power from 53 reactors (despite being the only country in the world to have witnessed firsthand the damage that nuclear energy is capable of when unleashed via a nuclear bomb). Japan’s lack of natural energy reserves and reliance upon foreign imports is expected to lead to an ever increasing reliance on nuclear power in the future. Some estimates find Japan generating 50% of its power from nuclear energy by 2030.

Japan sits on an area of rampant seismic activity and the nuclear commission pays especially close attention to the possibilities of earthquakes in the siting, design and construction of nuclear power plants. Japanese regulations require plants to be built on hard rock foundations to minimize shaking. Additionally, all Japanese plants are equipped with seismic detectors that trigger an immediate reactor shutdown when a large earthquake occurs. The standards issued for seismic resistance of plants were adopted in 1978 and amended in 2001. The regulations specify requirements in terms of localized ground motion (measured in Gal.) as opposed to the more familiar Richter Scale because there is not always a correlation between amount of energy released (what the Richter Scale measures) and the amount of ground motion locally (what actually causes damage). Still, the NSC concluded that under current guidelines, Japanese plants could survive a quake with a magnitude of 7.75 on the Richter Scale. Today’s tragedy isn’t the first occasion that a nuclear plant in Japan faced a forced shutdown because of seismic activities – for example, the largest plant in the world at Kashiwazi-Kariwa was shut down in 2007 in the wake of a an earthquake measuring 6.8 on the Richter scale.

Under the regulatory policies developed by the Nuclear Safety Commission of Japan (similar to the Nuclear Regulatory Commission in the United States), the central nuclear emergency response headquarters (NERHQ) issues the nuclear emergency declaration with technical assistance from the Nuclear Safety Commission. The declaration is analogous to a declaration of federal emergency in the United States. In a nuclear emergency situation, a joint council is formed that includes the National Government’s representatives from NERHQ, senior nuclear emergency response specialists, and representatives of the Nuclear Safety Commission. The joint council devices an overall plan, provides instructions for resident evacuations, guides emergency services, and directs the armed forces. Under the current emergency order, 3,000 residents have been evacuated near the Fukishima plant.

It seems that the highly engineered plants in large part resisted the damaging effects of the quake. Current reports indicate that the plants have not leaked any radiation and remain in fairly good shape. My only hope is that these emergency response agencies do an effective job of dealing with repairing and reactivating the damaged nuclear plants and restoring power to residents. Other than that, there isn’t much to say besides: our thoughts and prayers go out to the residents of Japan.

Gasoline Now with 50% More Corny Goodness

On October 14, the Environmental Protection Agency issued a waiver to allow for the sale of ethanol gasoline containing 15% ethanol (E15) with a limitation on cars 2007 or newer. As obligated under section 211 of the Clean Air Act (CAA), the EPA granted the waiver for gasoline that is not “substantially similar” to fuel certified under the CAA after conducting extensive studies. This alters the previous maximum ethanol allowance in the United States of 10%. The limitation is based on testing which shows that E15 will not have a detrimental effect on the emissions controls used in cars and light trucks made in 2007 or later. Not covered in the waiver are vehicles with a model year before 2007 and other small engines such as motorcycles, lawn mowers, and snow blowers. With the waiver comes the additional requirement that pumps dispensing E15 fuel post a notice on the pump that only cars and light trucks 2007 or later are permitted to use the fuel.

The waiver was praised by farmers and environmental groups as a step in the right direction toward weaning the United States off of foreign produced fossil fuels. As corn is subsidized by the United States government, a majority of the corn that would go towards the 50% increase in allowable ethanol would be homegrown. However the decision comes with guarded optimism as proponents are disappointed by the limited scope of E15’s approval, and wish that the application be extended to pre-2007 models of automobiles. This comes as a result of proponents of ethanol such as farmers and alternative energy proponents wanting to compete with gasoline’s dominance in the American fuel market.

Although being praised by some environmentalist, the issue presents certain dangers for the environment. An ad sponsored by the Environmental Working Group and Natural Resources Defense Council shows that hot burning E15 can erode catalytic converters on certain engines. The catalytic converter is the little contraption on the back of small engines that is responsible for reducing the emission from a vehicle; if this contraption is corroded the emissions can be more harmful for the environment. The ad also expresses concerns over fragile farmland being repeatedly plowed to produce corn, and the potential cutting down of forests to clear more land for corn production.

Despite the immediate impact of benefitting corn farmers across the country, the EPA’s decision does not make me so optimistic that the allowance will shine so favorably for farmers in the long term. Brazil, currently the world’s leading producer of sugar cane based ethanol, issued a statement indicating its desires to enter into the American market with its sugarcane ethanol following the allowance of E15 by the EPA. In a statement shortly after the EPA’s decision, Joel Velasco, the president of Brazil’s Sugarcane Industry Association (UNITA) issued a statement urging both the Brazilian and American government for a move toward free trade. It desired for Brazil to make its recent postponement on tariffs for biofuel permanent, and at the same time for Congress to eliminate the very government subsidies it offers to corn farmers to produce corn. As the carbon emission from sugarcane based ethanol is less than that of corn based ethanol, and corn based ethanol requires large quantities of developed land for farming, the support that corn farmers received from environmental groups wishing to increase renewable energy may wane in favor of a free trade relationship with Brazil.

The EPA’s decision most likely will not destroy vehicles’ exhaust systems, nor will forests and trees be leveled due to this allowance. However, there may be cause for concern for those corn farmers that expect a booming corn demand to come from this waiver. Brazil’s sugarcane industry is a powerful one, and the 2007 meeting between then President Bush and Brazilian President Luiz Inácio Lula da Silva concerning the expansion of biofuels may prove to have laid the necessary groundwork for Brazillian sugar cane ethanol expansion into the United States, despite the new Obama Administration. Sugarcane presents a cheaper and more efficient source of ethanol than corn. The international economic effects of the spreading allowances for green technology present unknown horizons for the American agriculture industry, and one can only wonder whether the EPA sufficiently weighed this consideration in their decision.

Out With the Oil, In With the Green

Sometimes change in technology is facilitated by wise innovation, diligent research, or accidental discoveries. And other times it is forced by an oil leak off the Gulf of Mexico spilling 60,000 barrels of oil a day into the ocean. More than ever, our country is facing the harsh reality of the worlds’ severe dependence on a limited energy source. On June 15, 2010, in his first televised address from the Oval Office, President Barack Obama demanded advancements in clean energy sources and technology, which would require refocusing innovation and creativity towards a solar-based way of life. “The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now,” said President Obama. “Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.”

Before the oil spill, the United States Patent and Trademark Office (USPTO) decided to execute a green technology pilot program on December 7, 2009, intended to expedite the patent application and examination process involving green technology inventions. If this program is effective, this effort could prove beneficial in facilitating the President’s determination to wean America off its dependency on oil and introduce the country to a clean energy source.