US President Barack Obama’s has galvanised his administration’s position on clean energy with a 2013 budget proposal that includes a 3.2 per cent increase to energy funding over the current year to $US27.2 billion — including a 21 per cent, $2.3 billion boost to research funds for energy efficiency, advanced vehicles and biofuels, as well as the renewal and extension of a renewables subsidy that US solar industry sources say would help pay for as much as 30 per cent of development costs and possibly add as many as 37,000 solar jobs.
In a conference call with reporters, US energy secretary Steven Chu said the administration would be redirecting funds from past favourites like EV batteries, that were now approaching commercial viability, to emerging sectors like offshore wind power. Chu also said that some research funds were also being pulled from projects that “did not reach research milestones.” But he stressed that the government’s overall strategy remained: “We want to lead in clean energy technology,” Chu said.
Bloomberg reports that the president of America’s Solar Energy Industries Association, Rhone Resch, says that the 2013 budget released Monday would restore US Treasury Department grants that expired in December, known as the 1603 program, a subsidy th Washington-based lobby group says has helped develop more than $24 billion worth of renewable energy resources since its introduction in 2009.
The Obama administration also used the budget announcement to renew its calls to end subsidies for America’s oil and gas sector. Reuters reports that in an election-year budget that has little chance of surviving in Congress, Obama called for the repeal of around $4 billion a year in tax breaks for oil and gas companies — a long-held goal of Obama’s that has been staunchly opposed by Republicans.
According to Reuters, the budget also sets aside around $1 billion for energy conservation investments in a Department of Defense program, up from $400 million in 2010. The US DOD — the world’s largest energy consumer — has been actively increasing its exposure to renewables, which now make up 8.5 per cent of its energy output and procurement, according to the budget. The DOE budget also includes $12 million towards a research program to improve safety of natural gas development, as well as $770 million for research in advanced small nuclear reactors.
Flight of the biofuels
New research from Bloomberg New Energy Finance has predicted that some world airlines could start sourcing a proportion of their fuel from plant-based alternatives within the next few years, with some biofuels looking set to become cost-competitive by 2020. The research note, published this month by BNEF, forecasts that the cost of some biofuels, such as those based on non-food vegetable oils, could be close to that of conventional jet fuel by 2018, if production efficiency continues to improve.
The study says that by around 2018, biofuels made from the hydro‐treatment of non‐food vegetable oils like jatropha or camelina, or from pyrolysis of cellulosic feedstocks, should be the first types to become properly cost-competitive with fossil-based jet fuel (taking into account the added cost of carbon) when they move into large-scale production.
But BNEF bioenergy analyst Harry Boyle stresses that if governments want commercial airlines to burn a significant amount of non-fossil fuels before 20202, they will have to either “subsidise advanced‐but‐not‐yet‐economic biofuels or, more likely, introduce mandates requiring carriers to use a certain percentage of sustainable biofuels in their mix, and put up with complaints.”
The report also warns that some of the better-established biofuels, made from edible vegetable oils such as soybean, rapeseed and palm, may never become fully competitive, with a best-case scenario seeing aviation fuel produced from these feedstocks costing $US1.20 a litre — well above current jet fuel prices of around $0.85. Using jatropha, however, could produce jet fuel at $0.86‐a‐litre by 2018, if production scales up. While pyrolising wood could produce jet fuel at $0.90 a litre by 2018, says the report.
Banking on efficiency
Westpac has this week rolled out a new product aimed at making it easier and more cost-effective for large businesses to adopt energy saving measures and technologies. Dubbed the Energy Efficient Lease, or EEL, it applies what the bank describes as the standard features of a lease to energy efficient assets such as building management equipment, renewable energy assets, computer hardware, heating and cooling systems, and energy efficient lighting.
According to the bank’s head of Portfolio Asset Finance, Debt Capital Markets, Peter Deutsch, the EEL includes advice on the most energy efficient assets to meet the future needs of a business, 100 per cent funding for the purchase, as well as long-term management and maintenance of the asset. The new product also targets government, and other big energy users such as schools and hospitals.
“The EEL is an easy to understand solution that will help customers reduce carbon emissions and energy costs,” said Westpac’s Global Head of Corporate and Institutional Banking, Jeff Mitchell, on Tuesday. “It is an important part of the suite of products and services Westpac is developing to help our customers respond to emerging risks and commercial opportunities around carbon and energy,” he said.