Midwest Alerts

January 27, 2010
Renewable Energy Business Alliance Hosts Statewide Energy Summit

LANSING -- Midwest Integrated Suppliers for Renewable Energy (Midwest Integrated Suppliers) will host the 2012 Energy Moves Michigan Forward! summit on Wed., March 21, 2012, from 8:30 a.m. to 4:30 p.m. at Perspective 2 Studio, 319 E. Grand River, Old Town, Lansing. The day-long conference will feature Joe Arvin and Scott Newton, co-founders of Citizens for American Manufacturing, as well as co-authors of A Nation On Borrowed Time; and clean energy champion State Rep. Jeff Irwin (D-Ann Arbor).
The summit is designed for businesses and advocates for developing economic opportunities for manufacturers in the renewable energy field. In addition to its keynote speakers, the summit will include sessions on analyzing potential energy initiatives and inclusion of domestic content through regulatory and legislative processes.

"This is an important step forward for businesses in Michigan that want to develop renewable energy products and services."explained Dwight Smith, Chairman of the Midwest Integrated Suppliers Advisory Board. Smith is CEO of Cole Manufacturing Systems, Rochester Hills. "Our members believe that there are considerable business opportunities in the renewable energy field that can result in jobs and economic development for our state."

If your company finds value in promoting your product or service to Michigan businesses engaged in manufacturing renewable energy components, or providing support service to manufacturers or installers of renewable energy systems, then your company will find value in sponsoring the summit. Contact Midwest Integrated Suppliers for details.

Midwest Integrated Suppliers is a business alliance developed in 2010, initially to recruit utility-scale wind turbine manufacturers to Michigan and create business opportunities for manufacturing suppliers in the state. The scope of the alliance has since expanded to promote business opportunities in all alternative energy sectors. It currently represents manufacturers with an interest in developing alternative energy products and services, as well as advocates, to create a better business environment for renewable energy manufacturers.

"This is a state that has led the world in several areas, from cars to corn flakes. Today, however, we stand at a critical juncture in developing new industry for Michigan," explained Tim Bannister, executive director for Michigan Integrated Suppliers. "It's well-known that we need to diversity the industrial base in Michigan; likewise, we realize that we must take new approaches to create further business opportunities.

"Clean renewable energy technology is the future, and with $10 billion already invested and more than 220 manufacturers supplying wind and solar components, we've already started down the path to make it part of Michigan's future. Michigan manufacturers need to leverage this base and take the lead in clean energy technology. This will require progressive-thinking business owners, elected officials, and policy-makers willing to work with suppliers and service providers in creating an environment conducive to renewable energy growth.

"Wind and solar energy investors around the world are looking to jurisdictions that have clear and well-defined targets for energy development and a comprehensive policy framework to support renewable energy investment. There are several entities advocating for various aspects of clean energy in Michigan -- but no single organization is committed to this area.

"Midwest Integrated Suppliers will play a unique role in coordinating all interested parties in reviewing and ranking initiatives that increase renewable energy-related manufacturing and services; advocating for policy change that incorporates a greater incentive to use Michigan content; and educating our state on the benefits of these proposed initiatives. In short," he added, "we will develop one message and present it with one voice."

The registration fee for the conference is $45.00 for members; $85.00 for non-members. For those registering for the summit, an introductory membership rate of $95.00 for six months is available. To attend 2012 Energy Moves Michigan Forward!, go to (http://www.perspective2studio.com/happenings/default.aspx#energy) and register by March 14, 2012. For more information, contact Tim Bannister, executive director, at tbannister2@integrated-suppliers.com or call toll-free 1-888.244.0047.


Will Shale Crowd Out Coal and Green Energy?

Common wisdom is suggesting that the fate of shale-gas here will outshine all competing energy forms. But is that logic well-considered?

Estimates are that at least a century's worth of shale-gas is now recoverable from underneath America's feet. Some are betting that such volume will drive down the cost of that fuel, making the alternatives unattractive.

"With the new abundance and lower prices, lower-carbon gas seems likely to play a much larger role in the generation of electric power," writes Daniel Yergin, in his new book, The Quest. By comparison, nuclear would seem expensive, while coal would appear to be more carbon intensive. Meantime, it creates "a more difficult competitive environment for wind projects."

Yergin, however, is admonishing policymakers not to rely exclusively on shale-gas. That's because too many factors can disrupt markets and include everything from politics to environmental and natural disasters.

Shale will not just become a U.S. phenomenon. It will also have a great impact around the globe. Global proven reserves are estimated to be at 6,600 trillion cubic feet, according to the U.S. Energy Information Administration. China and the U.S. have the most supplies respectively. In this country, for example, shale gas has grown 48 percent a year from 2006 to 2010. It now makes up a third of all natural gas supplies.

In Quest, Yergin points to the Japanese nuclear accident and the Arab Spring that caused oil prices to spike as two geo-political events simultaneously occurred. Both had a tremendous effect on the energy economy. But the energy analyst adds that shale-gas is most impacted by the environmental issues here.

To extract the shale-gas that is embedded inside of rocks, a concoction of water, sand and chemicals is pumped a mile beneath the earth's surface. Not only does it taka huge amount of water, but the mixture that comes back t the top is filty. Many communities have therefore expressed concern about heir water quality…

At the same time, the outlook says that natural gas is projected to be the fastest growing fossil fuel, while coal and oil are likely to lose market share as all fossil fuels experience reduced growth rates. Fossil fuels’ contribution to primary energy growth is projected to fall from 83 percent to 64 percent…

Shale's rise will undoubtedly make a dent in the U.S. market place. Part of its ascent will come at the expense of coal, and part will affect wind and solar. But if the country mitigates its risk by diversifying its energy interests, green power will also innovate and see an upswing in production.

How U.S. Lost Out on iPhone Work (highlights)

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas…

It isn't just that workers are cheaper abroad. Rather, Apple's executives believe the vast scale of overseas factories, as well as the flexibility, diligence and industrial skills of foreign workers, have so outpaced their American counterparts that "Made in the U.S.A." is no longer a viable option for most Apple products…

Companies like Apple "say the challenge in setting up U.S. plants is finding a technical work force," said Martin Schmidt, associate provost at the Massachusetts Institute of Technology. In particular, companies say they need engineers with more than high school, but not necessarily a bachelor's degree. Americans at that skill level are hard to find, executives content. "They're good jobs, but the country doesn't have enough to feed the demand," Mr. Schmidt said…

It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone's expense. Since Apple's profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.

But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans—it would require transforming the national and global economics. Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility…

Modernization has always caused some kinds of jobs to change or disappear. As the American economy transitioned from agriculture to manufacturing and then to other industries, farmers became steelworkers, and then salesmen and middle managers. These shifts have carried many economic benefits, and in general, with each progression, even unskilled workers received better wages and greater changes at upward mobility.

But in the last two decades, something more fundamental has changed, economists say. Mid-wage jobs started disappearing. Particularly among Americans without college degrees, today's new jobs are disproportionately in service occupations—at restaurants or call centers, or as hospital attendants or temporary workers—that offer fewer opportunities for reaching the middle class…

Toward the end of a dinner President Obama hosted on behalf of Steven Jobs and other Silicon Valley executives, Mr. Jobs said: "I'm not worried about the country's long-term future," he told Mr. Obama. "This country is insanely great. What I'm worried about is that we don't talk enough about solutions."…

What remains unknown, however, is whether the United States will be able to leverage tomorrow's innovations into millions of jobs.

In the last decade, technological leaps in solar and wind energy, semiconductor fabrication and display technologies have created thousands of jobs. But while many of those industries started in America, much of the employment has occurred abroad. Companies have closed major facilities in the United States to reopen in China. By way of explanation, executives say that are competing with Apple for shareholders. If they cannot rival Apple’s growth and profit margins, they won’t survive.

"New middle-class jobs will eventually emerge," said Lawrence Katz, a Harvard economist. "But will someone in his 40s have the skills for them? Or will he be bypassed for a new graduate and never find his way back into the middle class?"

FITs are best to deal with climate change, says task force

A November 2011 report issued by the Intergovernmental Panel on Climate Change, a European-based watchdog based in Switzerland, makes it clear, according to consultant Paul Gipe, that feed-in tariffs (FITs), or fixed-price mechanisms, perform better at delivering renewable energy quickly and equitably than quota systems, such as Renewable Portfolio Standards in the U.S…

Several studies have concluded that some feed-in tariffs have been effective and efficient at promoting renewable energy electricity, mainly due to the combination of long-term fixed price or premium payments, network connections, and guaranteed purchase of all renewable energy electricity generated. Quota policies can be effective and efficient if designed to reduce risk, for example, with long-term contracts. Although they have not succeeded in every country that has enacted them, price-driven policies have resulted in rapid renewable electric capacity growth and strong domestic industries in several countries—most notably Germany, Spain and China—and have spread rapidly across Europe and around the world.

FITs have encouraged both technological and geographic diversity, and have been found to be more suitable for promoting projects of varying sizes…A number of studies have concluded that FITs have consistently delivered new supply, from a variety of technologies, more effectively and at lower coast than alternative mechanisms, including quotas, although they have not succeeded in every country that has enacted them… They generally have lowered administrative costs than quota policies and are considered easier to implement, though tariff setting can be challenging, particularly if there are very dynamic cost developments (as with photovoltaic in recent years).

In summary, a number of historical studies, including those carried out for the European Commission, have concluded that well-designed and well-implemented FITs are the most efficient and effective and support policies for promoting renewable energy electricity.

Hemlock Semiconductor expands silicon capacity despite oversupply

Michigan's Hemlock Semiconductor Group is boosting production capacity as other manufacturers of polysilicon consider cutting back amid an oversupply of the material used to make semiconductors and solar cells. The world’s largest polysilicon producer will increase capacity 28 percent when a plant in Clarksville, TN, goes into operation this year. Hemlock is expanding as an oversupply of polysilicon and flagging demand have driven down the price for the material 56 percent last year.

"The hope is that the market does come back into balance over the next couple of years," Paul Leming, an analyst, said in November. He said that Hemlock’s decision to build the plant was made when polysilicon prices were higher. At this point it would cost as much to stop production as to finish the factory because the company already has signed contracts and purchase materials, he said.

Hemlock announced plans to build the Tennessee plant and expand its Michigan factory in December 2008, when polysilicon sold for about $81 a pound amid a shortage. It now goes for about $15 a pound. The company received $169 million in tax credits in 2010 as part of the U.S. economic stimulus program, most of which was used to expand the Michigan plant. “We believe over the long term the solar industry will continue to grow and that Hemlock Semiconductor will be well-positioned to continue to play a leading role in supplying polysilicon,” stated Hemlock spokesman Jarrod Erpelding.

Subsidies for renewable energy: American as apple pie

The collapse this past August of Solyndra, a California solar panel manufacturer backed with $500 million in Federal loan guarantees, has sparked loud and ongoing complaints over renewable energy subsidies. "It is not the role of government to pick winners and losers," said House Energy and Commerce Committee Chairman Fred Upton (R-St. Joseph) in a September statement. "Let's learn the lessons of Solyndra before another dollar goes out the door."

But these complaints, and the related calls for free market ascendance, ignore the basic historical fact that energy subsidies have been both a constant in the American narrative and essential to our country's economic development… (F)irst, every great expansion of the American economy can be linked to the discovery of a new energy source. Second, each of these new energy industries received substantial government support at a pivotal time in its early growth…

Over the full lifetime of subsidies, the oil and gas industry has benefited from tax expenditures of, on average, $4.86 billion per year between 1918 and 2009. The renewables industry has received an average of only $0.37 billion per year between 1994 and 2009.

It is a simple and straightforward falsehood when established energy industries or special interests describe renewables as sops for federal money. Rather, the renewables industry is getting relatively less government help, not more, than traditional competitors.

Additionally, disappointments like Solyndra must be kept in perspective. For every successful 19th-century coal operation, dozens, perhaps even hundreds of projects collapsed in bankruptcy. Looking at the solar industry, several companies have received the same loan guarantees as Solyndra, but they are not making news; rather, they are well-managed companies that are growing and quietly creating jobs across the country.

Finally, it is important to note that early energy subsidies for coal, oil and gas were never phased out, even as those energy sources matured. The existence of these subsidies (for in some cases more than a century) makes the competitive landscape look less like a level playing field and more like a black diamond ski slope for renewables. It also means that those who call for an end to ALL subsidies may end up with a surprising outcome: in many regards, the profitability of these industries has risen and remains elevated upon the backs of taxpayers….

Calls for an end to renewable subsidies ignore the lessons of American history. It has long been, and should continue to be, the case that government investment supports the growth of emerging energy sources. History teaches that such support helps drive U.S. technology innovation, job creation and economic expansion.

…News in brief… News in brief… News in brief… News in brief...

  In his State of the Union speech on Tues., Jan. 24, Pres. Barack Obama pressed for local content. "It is time to stop supporting businesses that ship jobs overseas and reward companies that create jobs here…If the playing field is level," he said, "I promise you that America will always win." Pres. Obama also cited Brian Ritterby, an employee working for Holland-based Energetx, who stated "he is proud to be part of building the clean energy industry" in this country. The President also pressed Congress to set a clean energy standard for the country, with the U.S. Dept. of Defense setting an example. And he pressed for energy efficiencies in the manufacturing industry that secondarily will provide new jobs in repairing America's infrastructure.

  Manufacturing grew in December at the fastest pace in six months, and hiring at U.S. factories picked up, results that helped bolster the view that the economy was gaining momentum at the end of last year…United States manufacturing has expanded for more than two years. Factories were one of the first areas of the economy to start growing after the recession officially ended in June 2009…Still, demand for core capital goods, which are often a proxy for business investment plans, fell for the second straight month. Business spending was a crucial driver of economic growth in 2011. If businesses trim spending, economic growth is likely to slow. Businesses are less likely to retreat, however, if the economy continues to improve.

  The American Wind Energy Association (AWEA) has established a tradition of taking a look back at the events that shaped the year in wind power. Two highpoints: Wind turbine prices have dropped sharply in recent years, and a government report released last year says they decreased by as much as 33 percent or more between 2008 and 2010…Last year marked the launch of WindMadeâ„¢, a new consumer label that will highlight companies getting a large portion of their electricity form wind power. Already 15 companies—including Motorola Mobility, Deutsche Bank, and Bloomberg—have committed to attaining the new label by getting at least 25 percent of their electricity from wind energy.

  The Board of State Canvassers approved the wording of a ballot initiative on Jan. 20 that would raise the state's renewable energy standard to 25 percent by 2025. A coalition called "Michigan Energy, Michigan Jobs" backs the initiative. Supporters of the energy initiative have until July 9 to collect 322,609 valid signatures and file the petitions with the Secretary of State. If the petition drive is successful, voters would decide the issues in the Nov. 6 election. If approved by voters, the initiatives would amend the state constitution.

  Great Lakes Renewable Energy Association celebrated 20 years of efforts to increase renewable energy use in Michigan at its annual meeting held Dec. 13 in Ann Arbor. State Rep. Jeff Irwin (D-Ann Arbor) updated the membership on key legislative issues, while DTE Energy, Invenergy, Greater Gratiot Development and wind developer Rich VanderVeen were recognized for their work in launching the Gratiot Wind Farm, which was honored as the Exemplary Project of the Year.

  Tuscola County's Gilford Township approved a plan for Florida-based NextEra Energy to build 63 wind turbines as part of a $250 million Tuscola Bay Wind Energy Park The proposal calls for up to nine turbines in Bay County’s Merritt Township and seven turbines in Saginaw County’s Blumfield Township, with NextEra negotiating separately with each of those townships.

  Exelon Corp. has announced that construction has been completed on its 50-turbine, 90MW Michigan Wind 2 project, located in Minden City, and the wind farm has entered commercial production. The project is located southeast of the already operational 46-turbine Michigan Wind 1 project in northern Sanilac and Huron counties. Exelon Wind also operates the Harvest 1 Wind project in Elkton. In early 2012, Exelon Wind will begin construction on Harvest II Wind, a 59.4MW project in nearby Pigeon. Exelon Wind is a division of Exelon Power, which owns and operates Exelon’s renewable, hydroelectric and fossil power plants. Consumer Energy is purchasing the output from Michigan Wind 2 through a 20-year renewable energy purchase agreement.

  U.S. Energy Sec. Steven Chu said that the deployment of solar, wind and other renewable energy was outpacing the development of a modern electricity grid, and that the country risked falling behind others in the use of advanced grid technologies. "It is only a matter of time before solar energy becomes equal in cost to many forms of fossil (fuels). Whether it is going to be 10 years or 15 years, there is a debate," Chu told the GridWise Global Forum in Washington. "We need a grid that can accommodate these technology gains." Chu outlined details of the $4.5 billion in smart grid and grid modernization spending the Dept. of Energy put in place under the 2009 American Recovery and Reinvestment Act, and called on utilities and other5s to move more quickly to modernize the electricity infrastructure.

(Sources for all: Ken Silverstein,"Will Shale Crowd Out Coal and Green Energy?," renewablesbiz/covering the business of renewable and sustainable energy; Charles Duhigg and Keith Bradsher, “How U.S. Lost Out on iPhone Work," New York Times; "Feed-in Tariffs Best to Deal with Climate Change," pgipe@igc.org; Crain's Detroit Business; Paul Egan, Detroit Free Press; Associated Press, New York Times; mlive.com; huffingtonpost.com.