An Ignoble Experiment

2. AZ maintaining top solar ranking

Energy companies today face myriad challenges when it comes to adding shareholder value. To add this value, it is important that utilities have excellent financial and risk management through improved working capital management practices and greater focus on free cash flow generation, according to Frost & Sullivan.

Frost & Sullivan conducted an extensive ratio analysis to rank the companies in the power sector on the basis of different financial and risk management parameters. The ratios of the leading companies ranked within the top 33 percent, indicating that sound financial management plays a key role in the success of a business.

"High-performance enterprises diminish uncertainty in demand recovery and risks in customer refinancing through operative measures and customer partnerships," said Frost & Sullivan Business and Financial Services Analyst K. Vinod Cartic. "They follow supply chain management best practices to leverage the economies of scale and minimize raw material price volatility and procurement risks."

Further, successful utilities use commodity derivatives to hedge raw material risks, and also reduce currency exchange fluctuation liabilities through local production. In addition, they employ derivative-based hedging to mitigate the risks of converting receivables and liabilities, as well as purchases and sales, in foreign currencies.

To ensure profitability, companies must consolidate their presence in new geographies and invest in renewable energy, though the renewable sector is becoming highly competitive as it shifts to cost-based business models, according to Frost & Sullivan. Entrants need to rely on their own capital, as financing is limited for project developers, and technology developers can partner with existing research labs.

"Continuous product advancements to keep up with mega trends such as rapid urbanization, depleting energy resources, and climate protection are crucial for financial sustainability," said Cartic. "With the global demand for energy escalating and the focus on a smaller carbon footprint popularizing renewable energy, companies must focus on research and development to match the requirements and growth opportunities in power generation and energy efficiency."

For more:
- see this article

Read more about: renewable energy, Energy Companies
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By Barbara Vergetis Lundin

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3. Dominion will pay mightily for emissions

Arizona utilities are taking full advantage of the state's most prolific resource -- the sun. According to the Solar Energy Industries Association's (SEIA) 2012 U.S. Solar Market Insight Report from, Arizona ranks second nationally for solar installations and is first for the most utility-scale solar technology installed.

Credit: SRP

In 2012, Arizona Public Service (APS) added 148 MW of solar, a single-year record that is expected to more than double in 2013. APS will have more than 600 MW of solar on the system by the end of 2013, according to the utility.

Later this year, the 250 MW Solana Generating Station will come online and APS will purchase 100 percent of its power over the next 30 years.

Looking toward 2014, APS is building the 32-megawatt Gila Bend Solar Power Plant -- the seventh in its APS AZ Sun Program. Construction will begin in October 2013 and is expected to be completed in June 2014.

Salt River Project (SRP), another Arizona utility, has launched a 1 MW solar photovoltaic power plant at Arizona State University's (ASU) that utilizes a tracking system to concentrate the sun's power seven times to achieve one of the lowest levelized costs of electricity for solar power plants today. An added bonus is that the plant uses little of one of Arizona's not so abundant resources -- water.

Under a power purchase agreement, SRP is buying the entire output of the solar plant from SunPower, the plant's developer. ASU is purchasing the power from SRP under a separate agreement.

The ASU solar is the third commercial-scale solar facility in Arizona to provide energy for SRP.

For more:
- see the renewable energy compliance report

Read more about: APS, Arizona Public Service
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By Barbara Vergetis Lundin

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4. DOE's Bioenergy Research Centers drive biofuels industry forward

Dominion Energy has agreed to pay a $3.4 million civil penalty and spend approximately $9.8 million on environmental mitigation projects to resolve Clean Air Act violations, according to the Department of Justice and the U.S. Environmental Protection Agency.

This settlement limits power plant emissions in northwest Indiana and central Illinois, and requires Dominion to fund environmental mitigation work, including projects that will improve air quality near Chicago rail yards and protect lands around the Indiana Dunes National Lakeshore.

Dominion must install or upgrade pollution control technology on two plants, and permanently retire a third. Dominion will be required to continuously operate the new and existing pollution controls, and comply with stringent emission rates and annual tonnage limitations.

As a result of the settlement, Dominion will have to spend $9.75 million on projects that will benefit the environment and human health in communities located near its facilities, including wood stove change outs; land acquisition and restoration; energy-efficiency and geothermal/solar projects for local schools; and clean diesel engine retrofits for municipalities. Dominion must also pay a total of $750,000 to the United States Forest Service and the National Park Service, to be used on projects to address the damage done from Dominion's alleged excess emissions.

For more:
- see the Consent Decree

By Barbara Vergetis Lundin

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5. Tying energy storage into a modern grid

The U.S. Department of Energy (DOE) will fund its three Bioenergy Research Centers for an additional five years, subject to continued congressional appropriations.

Each Center is funded at the rate of $25 million per year with the next five years focused on developing new lines of research and accelerating the transformation of scientific breakthroughs into new technologies that can transition to the marketplace.

In 2007, the BioEnergy Research Center (BESC) led by Oak Ridge National Laboratory, the Great Lakes Bioenergy Research Center (GLBRC) led by the University of Wisconsin-Madison in partnership with Michigan State University, and the Joint BioEnergy Institute (JBEI) led by Lawrence Berkeley National Laboratory were established by the DOE's Office of Science to accelerate fundamental research breakthroughs toward the development of advanced, next-generation biofuels.

In their first five years, the Centers have achieved new approaches for engineering non-food crops for biofuel production; reengineering of microbes to produce advanced biofuels such as "green" gasoline, diesel, and jet fuel precursors from biomass; and the development of methods to grow non-food biofuel crops on marginal lands so as not to compete with food production.

By investing in innovative approaches and technologies at the Bioenergy Research Centers, the biofuels industry will drive forward to grow the economy while reducing reliance on foreign oil.

"Developing the next generation of American biofuels will enhance our national energy security, expand the domestic biofuels industry, and produce new clean energy jobs. It will help America's farmers and create vast new opportunities for wealth creation in rural communities," said Energy Secretary Steven Chu in a statement.

For more:
- visit this website

By Barbara Vergetis Lundin

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