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Context of 'June 18, 2009: Study Shows Transition to Clean Energy Economy Viable, Profitable'

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The American Recovery and Reinvestment Act (ARRA) invests $90 billion in clean energy projects for the next 10 years via loan guarantees, tax incentives, and grants. $38 billion of this is government spending and $20 billion is tax incentives. Symbolically, President Obama signs the bill into law at the Denver Museum of Nature and Science, where he takes a tour of the museum’s solar panel installation. He says he hopes the bill will inspire Americans to get involved in “green” energy the same way that President Kennedy’s goal to put a man on the moon inspired Americans in the 1960s. “I hope this investment will ignite our imagination once more in science, medicine, energy and make our economy stronger, our nation more secure, and our planet safer for our children,” Obama says before signing the bill. The bill includes:
bullet A three-year extension to the tax credit for wind, which would have expired at the end of this year, and an extension until the end of 2013 for geothermal and biomass renewable-energy projects. The credit has been increased to 30 percent of the investment.
bullet $4.5 billion in direct spending to modernize the electricity grid with smart-grid technologies.
bullet $6.3 billion in state energy-efficient and clean-energy grants, and $4.5 billion to make federal buildings more energy efficient.
bullet $6 billion in loan guarantees for renewable energy systems, biofuel projects, and electric-power transmission facilities.
bullet $2 billion in loans to manufacture advanced batteries and components for applications such as plug-in electric cars.
bullet $5 billion to weatherize homes of up to 1 million low-income people.
bullet $3.4 billion appropriated to the Department of Energy for fossil energy research and development, such as storing carbon dioxide underground at coal power plants.
bullet A tax credit of between $2,500 and $5,000 for purchase of plug-in electric vehicles, available for the first 200,000 placed into service.
Most companies in the green-tech field hail the new focus on energy efficiency and renewable energy in the bill, contrasting it with the Bush administration’s support for fossil fuel energy production and its disdain for clean energy programs. Investors and analysts say the new law is a step towards a comprehensive energy policy based on sustained commitment to renewable energy and efficiency. Michael Liebriech of New Energy Finance says: “For years, US policymakers’ support for clean energy has been uneven. No longer… the US will have a great chance to be the growth engine for our industry over the next several years.” The spending should have an almost-immediate impact, especially in areas such as smart grid technology and energy efficiency, says venture capitalist Dennis Costello. However, even this influx of government funding does not solve all the financial problems facing energy technology firms. The recession continues to grip the economy, he notes, damping demand and making financing of new projects difficult. “It’s kind of refreshing to see at least beginnings of a real energy policy, some sort of unified approach to our energy problems,” he says. “But it isn’t going to solve our energy problems. There are a lot of countervailing factors to give pause to being over-exuberant on the future of energy sector and clean tech.” [CNET News, 2/17/2009; Adam Johnston, 7/2013]

Entity Tags: Bush administration (43), Barack Obama, Michael Liebriech, Dennis Costello, Obama administration, American Recovery and Reinvestment Act of 2009, Denver Museum of Nature and Science, US Department of Energy

Timeline Tags: Global Economic Crises, US Solar Industry

The Center for American Progress releases a study that shows how economically viable a transition from the US’s current dependence on carbon-intensive and fossil fuels to a clean energy economy can be. Making this transition is a necessity, the study says, due to “global climate change due to rising carbon emissions” forcing the US to “dramatically cut its consumption of traditional fossil fuels, the primary source of carbon dioxide (CO2) delivered into our atmosphere by human activity.” The transition must achieve three interrelated goals:
bullet Dramatically increasing energy efficiency;
bullet Dramatically lowering the cost of supplying energy from such renewable sources of energy as solar, wind, and biomass; and
bullet Mandating limits and then establishing a price on pollution from the burning of oil, coal, and natural gas.
According to the study, a dramatic decrease in CO2 emissions can be achieved alongside an increase in employment opportunities, individual incomes, and economic growth. The authors of the study say their work is done within the parameters of two government initiatives: the American Recovery and Reinvestment Act (ARRA—see February 2009) and the proposed American Clean Energy and Security Act (ACESA), which remains to be passed by Congress. Taken together, the authors claim, the two measures can generate roughly $150 billion per year in new clean-energy investments in the United States over the next decade. Most of this new spending will be undertaken by the private sector, the authors say, triggered by the ARRA and the yet-to-be-passed ACESA, and will, they predict, create some 1.7 million new jobs that will be sustained if the spending continues year after year. That job gain would drop the unemployment rate about one percent, “even after taking into full account the inevitable job losses in conventional fossil fuel sectors of the US economy as they contract.” The authors say the clean energy program would do a great deal to combat the recession. The program would rely on three elements:
bullet Regulations aimed at promoting clean energy;
bullet A mandated cap on carbon emissions that will be phased in through 2050; and
bullet Measures designed to help businesses, communities, and individuals successfully manage the transition to a clean-energy economy.
The authors conclude: “To be sure, any economic modeling effort that estimates changes in employment growth, economic growth, and income growth will result in forecasts that are problematic by nature. We make this clear in our paper wherever we rely on our own economic models and those employed by others. But we also take pains to examine the relative strengths and weaknesses of all the modeling approaches—including our own. This enables us to cross check our own conclusions with those of other researchers to reach the most reliable possible understanding of the overall impact of advancing a clean-energy agenda within the US economy.” [Center for American Progress, 6/18/2009; Robert Pollin, James Heintz, and Heidi Garrett-Peltier, 6/18/2009 pdf file]

Entity Tags: American Recovery and Reinvestment Act of 2009, American Clean Energy and Security Act, Center for American Progress

Timeline Tags: US Solar Industry

The US has slipped to third place in clean energy investment in 2010, despite the federal government’s push to promote investment in clean energy and reduced pollution (see February 2009). China (see January 11, 2011) and Germany are both outspending the US in clean energy investment, according to a report by the Pew Charitable Trusts. Phyllis Cuttino, the director of Pew’s Clean Energy Program, says, “The United States’s position as a leading destination for clean energy investment is declining because its policy framework is weak and uncertain.” As competitors adopt renewable energy standards and incentives for renewable energy investment, the US could fall even further behind, Cuttino warns. The US spent $34 billion last year on clean energy, while China invested $54.4 billion and Germany $41.2 billion. [USA Today, 3/29/2011]

Entity Tags: Phyllis Cuttino

Timeline Tags: US Solar Industry

President Obama speaks on the topic of clean energy in front of the Copper Mountain Solar Project in Boulder City, Nevada, in March 2012.President Obama speaks on the topic of clean energy in front of the Copper Mountain Solar Project in Boulder City, Nevada, in March 2012. [Source: CleanTechnica (.org)]An analysis by Reuters claims that the $90 billion investment made by the federal government to generate jobs in the field of clean energy (see February 2009) has not produced as many jobs as initially touted. In March 2012, President Obama spoke in front of the Copper Mountain Solar Project in Boulder City, Nevada, which uses 1 million solar panels to power 17,000 homes. The facility only employs 10 people. The green initiative has put people to work retrofitting over a million homes to lower heating and cooling costs, and energy generation from solar and wind sources has nearly doubled since 2008. But some say the program has not created enough jobs. Critics say the program was expected to lower the unemployment rate, currently hovering above 8 percent, and say it has not done so. Supporters say the administration promised too much in the short term and fear a backlash that might undermine support for clean-energy policies across the board. Clean energy specialist Mark Muro of the Brookings Institution says, “All of this stuff is extraordinarily worthy for driving long-term economic transformation but extremely inappropriate to sell as a short-term job program.” Janet Bluman, head of the Foundation for an Independent Tomorrow, says, “From my perspective it makes more sense for us to arm our clients with the basic skills, rather than saying, ‘By golly, you will do something in the green economy or you won’t work.’” Bluman claims that her organization, which trains people for jobs in the Las Vegas area, has seen positions in trucking and accounting go unfilled because training money had been earmarked for green efforts. The federal program earmarked some $500 million for job training, and has employed some 20,000 people, far short of its stated goal. Republicans say the clean-energy program is merely a way for the Obama administration to give money to Obama’s friends (see October 15, 2012). GOP presidential candidate Mitt Romney has claimed, “[Obama] handed out tens of billions of dollars to green energy companies, including his friends and campaign contributors at companies like Solyndra that are now bankrupt.” Romney and other Republicans have not advanced proof of their allegations. Supporters say that in the long term, clean energy will “create a bounty of stable, middle-class jobs and fill the gap left by manufacturing work that has moved overseas,” as Reuters reports. White House officials say that there is more to the clean energy program than creating jobs. “We have a record of success that has created tens of thousands of jobs and is ensuring that America is not ceding these industries to countries like China,” White House spokesman Clark Stevens says. “Thanks to the investments we’ve made, these industries will continue to grow, along with the jobs they create.” Senator Charles Grassley (R-IA), an opponent of the program, says: “The green jobs-training program just didn’t work. It was a poor investment of tax dollars.” Darren Devine of the College of Southern Nevada says: “Will it add a significant number of jobs, enough to make a real dent in our unemployment? No, I don’t see that happening.” What it will do is help the country reduce its energy consumption, lower the amount of carbon dioxide being pumped into the atmosphere, and help create jobs in the clean-energy and other fields, such as health care, education, and technology. [Reuters, 4/13/2012]

Entity Tags: Janet Bluman, Barack Obama, Charles Grassley, Darren Devine, Obama administration, Copper Mountain Solar Project, Reuters, Willard Mitt Romney, Mark Muro

Timeline Tags: Global Economic Crises, US Solar Industry

Analyses by the New York Times and FactCheck.org show that presidential candidate Mitt Romney made some fundamental misstatements when he criticized the Obama administration’s green energy program (see February 2009). During the October 3 presidential debate, Romney claimed Obama had given $90 billion of federal money to clean energy programs, saying at one point: “Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives. Ninety billion—that—that would have—that would have hired two million teachers.” The Times reports that while the $90 billion is an accurate number drawn from the 2009 economic stimulus package, not all of it was spent on green energy, and much of the money that was spent on green energy programs was authorized during the Bush administration. Of the $90 billion authorized by the Obama administration, $29 billion went to energy efficiency programs; much of that was spent on retrofitting homes and apartments of low-income households to be more energy efficient and lower their energy costs. $18 billion was spent on fast, energy-efficient trains and $21 billion was spent on wind farms, solar panels, and other renewable energy. Much of these expenditures was matched by private investments. Romney claimed, “I think about half of them, of the ones have been invested in, they’ve gone out of business,” and cited the example of Solyndra, a maker of solar equipment that went bankrupt, costing the government some $528 million. The Times notes that Solyndra began receiving money during the Bush administration, and that the government has been able to recover some of its funds from other firms that went bankrupt. The Times writes, “The defaults were far less than Congress had allocated to cover losses, and far, far less than half of the ventures, although some others may yet fail.” FactCheck, a project of the Annenberg Public Policy Center, goes further, noting, “In summary, Romney said a lot about the $90 billion in stimulus spending on clean energy—and very little of it was accurate.” FactCheck accuses Romney of making “numerous bogus claims” about the $90 billion energy funding. Only six percent of the firms loaned money by the government for clean energy technology have gone bankrupt, it notes, not “about half,” as Romney claimed. Romney also wrongly stated that the entire $90 billion was spent on “solar and wind” projects; in reality, less than a third was spent on those programs. His claim that the $90 billion was equivalent to “about 50 years’ worth of what oil and gas receives” in tax breaks was doubly wrong; by his own figures, it would have been 32 years’ worth, but real data shows it is closer to about 10 years’ worth of oil and gas subsidies. The claim that Obama could “have hired two million teachers” was wrong, since much of that $90 billion was in the form of loans, and, FactCheck notes, “the government can’t hire teachers with loans.” Even data provided by the Romney campaign to back up its claims disproves Romney’s assertions. [New York Times, 10/4/2012; FactCheck (.org), 10/4/2012]

Entity Tags: New York Times, Barack Obama, Bush administration (43), Obama administration, FactCheck (.org), Willard Mitt Romney, Solyndra Corporation

Timeline Tags: Domestic Propaganda, 2012 Elections, US Solar Industry

The Ivanpah Solar Electric Generating System, located on 3,500 acres in the Mojave Desert, begins generating electricity. The solar thermal power plant uses a circular array of mirrors to concentrate sunlight at a water-filled central tower. The resulting steam powers turbines, which in turn produce electricity. When fully operational, the Ivanpah plant will feed 377 megawatts of power into two California utilities, Pacific Gas and Electric (PG&E) and Southern California Edison. During some days, the power generated could serve up to 200,000 residential consumers. The project is a partnership between NRG Energy, BrightSource Energy, Google, Bechtel, and the federal government, which leased public land to the plant and provided loan guarantees (see February 2009). Some environmentalists have been sharply critical of the impact on the desert environment (see August 13, 2013), and other critics have asked why a desert solar power plant is not using photovoltaic panels to collect sunlight. NRG Solar president Tom Doyle says, “Given the magnitude and complexity of Ivanpah, it was very important that we successfully complete this milestone showing all systems were on track.” Unit 1 is producing energy; Units 2 and 3 are coming online soon. When fully operational, the three plants will almost double the amount of commercial solar thermal energy capacity now operating in the US. [NRG Solar, 2012; Business Wire, 9/24/2013; Grist Magazine, 9/25/2013]

Entity Tags: Ivanpah Solar Complex, Bechtel, Google, Pacific Gas and Electric, NRG Energy, Tom Doyle, BrightSource Energy, Southern California Edison

Timeline Tags: US Solar Industry

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