Now, Norway's new power chief is joining with the country's parliament to make the non-EU country a key component in continental renewable energy goals.

"Offshore wind energy may become the next adventure for the Norwegian industry and energy sector," Terje Riis-Johansen observed. As the world's #6 oil exporter and a key source of western European natural gas, Norwegians could play possum when it comes to overhauling the Scandinavian country's energy infrastructure.

Instead, officials in Oslo are aiming to make the country a hub of northern European offshore wind power activity.

Between Denmark's Vestas Wind Systems to the south, Scotland's joint wind farm projects led by Talisman Energy (NYSE:TLM) and ScottishPower to the west, and shipbuilding companies like Finland's Rautarukki now coming from the east with the goal of shifting shipbuilding operations into wind turbine tower production, Norway is at the heart of a transformational cold-water economy.

And the clean energy initiatives are coming from all over...

Norwegian oil and gas champion StatoilHydro (NYSE:STO) has teamed up with German infrastructure giant Siemens (NYSE:SI) to build the first floating wind turbines for deepwater use.

With centers of gravity deep below the surface and moorings tied to the seabed, these rigs would go farther offshore than any pylon-based wind turbine could. The first application for such a far-flung power generation system would actually be to help power oil and gas rigs that sit atop the North Sea's dwindling petroleum reserves.

And with Norway straddling the line between old North Sea energy and the new wave, legislators want to codify goals for getting a new industry off the ground and into the water.

With about $45 billion dollars in investment, Norway could build enough 5000-8000 megawatt wind power arrays to equal the output of 8 nuclear power plants.

The European Union, of which Norway is not a member, has set the goal of achieving a 20% renewable energy contribution to the EU's electricity generation by 2020. If Norway can harness its significant wind energy resources to deliver up to 40 terrawatt hours per year, it will also generate significant revenue from European customers to offset declining fossil fuel revenue.

Companies like Siemens and ABB (NYSE:ABB) are already hard at work addressing questions of transmission from offshore wind farms to onshore utilities, which of course presents a challenge of both minimizing loss and providing storage systems for off-peak generation times.

But the political will—for decades the missing component in Norwegian wind power—is now prominent. 

Now let's see what the Norwegians do for themselves and the worldwide viability of offshore wind power when they put the money where their mouths are.

-Sam Hopkins

City officials announced today that they are kicking around the idea of building a wind farm off the Rockaway Peninsula. . .about 13 miles off the coast of New York City.

The offshore wind farm would be the largest in the United States, boasting 350 megawatts.

Here's what Kevin Burke, CEO of Con Edison had to say about it...

"If the technical, environmental, economic and social challenges can be met, and we have the support of government, energy and environmental leaders, I am confident this project will be built and produce enormous benefits for our region."

Of course, it's likely that the price tag will be the key.

Back in 2007, a proposal for a 140 megawatt wind farm off the shore of Jones Beach was canceled after project estimates came in at more than twice the initial estimate.

And this latest 350 megawatt project is estimated to run anywhere between $1.35 billion and $2.7 billion.

Still, a lot has changed in the past two years. Most importantly, a pro-renewables White House that is likely to get its national renewable porftolio standard approved this year.

I suppose we'll get a better handle on how this will work out later in the year. But I'm optimistic that at some point very soon, a big chunk of New York City's power is going to come from offshore wind.

Jeff

That means each wind power base will generate more than double the power that's expected to be generated at T. Boone Pickens' wind farm in Texas. That's huge!

Certainly for those who invest in turbine manufacturers, this kind of continued support for wind energy in China could prove to be quite lucrative. But this opportunity is not limited to only the Middle Kingdom.

As it stands, the U.S. surpassed Germany as the country with the largest amount of installed wind power capacity in 2008. This, after more than 8,500 megawatts of new wind power increased the nation's cumulative total to more than 25,300 megawatts - representing a growth of about 50 percent.

Based on this growth rate, and assuming long-term policy support (which is now in place), this puts the U.S. on a trajectory to generate 20 percent of our electricity from wind energy by 2030.

This is a massive jump, based on the 1.25 percent that was generated by installed wind projects at the end of 2008 - and a massive opportunity for investors.

Of course, the real catalyst here is Washington.

Secretary of Energy Steven Chu has been very vocal about his support for wind energy development, saying that he believes wind energy is one of our most promising renewable energy sources.

Not surprisingly, the wind energy industry picked up $93 million from the stimulus to further develop wind energy in the U.S.

We also believe that much of the new investment in transmission and infrastructure is being made to facilitate the continued growth of wind in the U.S. After all, the DOE didn't announce that wind energy could produce 20 percent of our electricity by 2030 without taking into account infrastructure development.

The writing is on the wall, my friend. And unless you hate money, there's absolutely no reason you shouldn't be properly positioned in the wind energy market.

Wind Energy Investing: What the Stimulus Holds

When we talk about investing in wind energy, most focus on turbine manufacturers. It's a common and logical connection.

Today, GE (NYSE:GE), Vestas (CPH:VWS), Siemens (NYSE:SI), Suzlon (NSE:SUZLON) and Gamesa (MCE:GAM) are the main suppliers of wind turbines in the U.S.

And they are likely to remain the major players too.

In fact, Vestas is now in the process of constructing two new manufacturing facilities in Colorado. Both are expected to be operational in 2010.

Gamesa has built four new wind turbine production facilities in the U.S. over the past two years, and Siemens is expected to begin construction on its newest turbine production facility next month in Hutchinson, Kansas. This comes just two years after the company built a rotor blade manufacturing facility in Fort Madison, IA.

Now a couple of years ago, turbine prices were exorbitant...and the down time between the initial order and receipt of the turbines was anywhere between two to four years.

Today, however, thanks to the recession - prices for wind turbines have fallen 18 percent globally. This is primarily because of declining demand and a decrease in the cost of raw materials.

Perhaps this hasn't made turbine manufacturers do cartwheels, but it has allowed some wind farm developers to get better pricing. At least the ones that have the financing to continue their expansion projects.

That being said, once a lot of that stimulus money finally gets funneled through the system later this year, we'll definitely see a lot of those wind farm developments that have been on hold for the past year or so, get back on track. As a result, turbine orders will pick up.

Now some have suggested that it's too risky to count on that stimulus money. But the fact is, that money's already been set aside and is currently being distributed. Granted, the distribution of that money may be too slow for some. But I'd prefer a slower distribution to a bunch of blank checks being thrown around wildly - something Washington is famous for.

In the meantime, we continue to believe the near-term opportunities here will be found primarily in the wind farm developers that are either currently developing new projects, or at least have the necessary financing to begin development in Q3 and Q4, 2009.

In 2010, we'll likely see turbine orders pick up enough to at least start to make a difference when earnings come out.

Of course, everyone has a different take on the timing. But the bottom line is that the world's largest wind turbine manufacturers have already begun building out their manufacturing right here in the U.S. They wouldn't be doing that if there wasn't real opportunity here.

Again...the writing is on the wall.

And whether you believe it's the right thing or not, the government is facilitating the wind energy industry's early growth, not only by offering direct support for research, testing and development. . .but also by building out our nation's electric infrastructure to enable the transmission of new wind power generation.

This is all going down right now.

Even as the climate change and energy debates continue on the Hill - the wind energy industry is continuing to grow and develop at a rapid pace. And in no time at all, wind will go from being considered an alternative form of power generation to simply another form of power generation.

Now as I already mentioned, we see wind developers representing the best near-term opportunities for investors. Particularly those with operations in California. And next week, I'll get into more detail on why that is. I'll also clue you in on a publicly-traded wind energy developer that could easily be one of our biggest winners for 2009.

To a new way of life, and a new generation of wealth...

Jeff

The talk was led by Don Paul, Executive Director of the University of Southern California Energy Institute.

In his former life, Mr. Paul was the Vice President and Chief Technology Officer at Chevron. He knows a thing or two about the oil business. And his presentation was right to the point.

The first bullet on his outline was: Why the global majors will be players in renewable energy. I'd like to share some of his insights here.

Why Big Oil Will Enter the Renewable Energy Market

Mr. Paul laid out five clear reasons why Big Oil will pursue clean energy opportunities.

1. They have global reach and scale

2. Strong balance sheets and cash flow

3. Technical, business, and market capabilities

4. Infrastructure, land, and supply chain management

5. Patience and longevity

In a sentence, Big Oil has enough cash, credit, know-how, and steel in place to pursue multiple clean technologies in numerous geographic markets—even if it takes years. And it probably will, because the majors need to walk a fine line between becoming cleantech companies and ensuring they exploit increasingly scarce oil for all it's worth.

That's why Big Oil's coming to cleantech.

How Big Oil Will Enter the Renewable Energy Market

This was another five bullet set.

First, of course, they're going to use renewable energy to produce oil, freeing up more natural gas to send to market. (Insight: this means Big Oil thinks nat gas will be more expensive than renewables.) The possibilities here have a broad range, from offshore solar powered platforms to wind turbines next to Texas oil rigs.

I guess there's no power like clean power to produce, well, oil.

Second is what Paul calls "adaptive re-use for production and manufacturing assets." In English that means putting wind turbines or utility scale solar on their dying, or soon to be dead, oil fields.

Third is by integrating power infrastructures. Read: We are salivating over the natural gas back-up opportunities (and that's why we're not going to burn it to produce oil).

Fourth should probably be number one. It's geothermal development, which is a natural fit for companies with decades of drilling experience and huge land holdings. In fact, oil companies are already involved in geothermal on a large scale.

Lastly is integrating infrastructures for biofuels, also a glove-fit for Big Oil. There are already increasing ethanol blend rates required by law. And though biofuels still make some people cringe, once we nail down successful enzymes for cellulosic and feedstocks for biodiesel (algae?), the market should blossom nicely once again.

Big Oil can leverage their infrastructure ownership and know-how to seamlessly enter this market. And they already are.

Real Life Examples

In the face of continued criticism of renewables by the uniformed, I find it reassuring to know that even the sworn enemy of cleantech is finally coming around. Big Oil's plan to enter these markets should be the final piece of tape on naysayer's mouths.

And it's not about carbon or altruism in any way, shape or form. It's about profits and a major energy transition—plain and simple.

It's why Valero is using clean energy to power a refinery. According to the Wall Street Journal, "Valero Energy Corp., which has the capacity to process more crude than any other U.S. refiner, recently installed 33 windmills to supply a refinery here with green electricity to produce gasoline and diesel."

The WSJ also pronounced, "The marriage is one of convenience."

It's also why Big Oil is scooping up biofuel assets that now have a recession discount.

Valero just bought seven Midwestern ethanol plants from now-bankrupt VeraSun. Marathon Oil has taken large stakes in two ethanol plants with a capacity of a million gallons each. Sunoco bought one, too. And just like that, Big Oil controls 7% of total U.S. ethanol capacity.

Yes, after a long abstention, Big Oil is finally coming to the cleantech party. It was only a matter of time, and it's a huge affirmation for those of us with skin in the game.

But be warned, they're going to do this Big Oil style, on their terms. That means employing patience, looking for high returns, and only pursuing projects with guaranteed payoffs—hence buying ethanol assets for pennies on the dollar.

So don't expect Big Oil to start producing thin film solar or trying to improve wind turbine design. But appreciate that they're finally coming to the table and the incredible validity it brings to clean energy.

—Nick

A new survey conducted by market research firm, Synovate has shown that about six in ten people would choose an environmentally-friendlier car over a gas-powered one.

The survey asked the 13,500 respondents to make their decision without thinking about cost. Here are some of the results...

• 40 percent of respondents said green would be their preferred purchase.

• 20 percent said green cars were their dream car.

• More than 70 percent of Chinese respondents said they would buy a green car, compared to 42 percent of Americans.

• At about 40 percent, it was the Chinese who were most likely to take public transportation more often in the next year. Americans were among the least, at 2 percent.

• Germans were most likely to choose green cars over conventional gas-powered cars.

• South Africans and Indians, who typically view cars as status symbols, were least likely to choose a green car.

The survey was conducted three months ago in Australia, Brazil, Canada, China, Egypt, France, Germany, Greece, India, Japan, Korea, Malaysia, South Africa, Thailand, Turkey, the United Arab Emirates, Britain, and the U.S.

It should be noted that the survey targeted city-dwellers - where public transportation tends to be more readily available, and traffic congestion tends to be significantly worse than in rural areas.

Jeff

MENA solar resources could, according to the European Commission, fulfill all of Europe's electricity needs with just 0.3% of the sunny region's annual solar radiation.

And by focusing on concentrating solar power (CSP), which is already in use in U.S. states like California and Nevada, Desertec would not be reinventing the wheel, or the panel.

The question of utmost importance, with the world of renewable energy finance still reeling from the credit crunch, is where the money will come from to finance such a massive project...

To that end, international commercial mammoths like Siemens (NYSE:SI) and E.ON (OTC:EONGY) are leading a German consortium that can make Desertec a reality.

For them it's a matter of business sense, getting the jump on other European and global power players while pleasing European governments and the European Commission, all of which are eager for an alternative to Russian natural gas. Not only solar but wind, biomass, and geothermal will all be part of Desertec's Trans-Mediterranean energy mix.

In July, we'll see the first concrete steps by 20 top German companies to get the 400 billion-euro ($561 billion) project up and running. A meeting is set for July 13 in Munich.

You can read more about Desertec's geographic and political basis here on our sister site, Energy and Capital.

Sam Hopkins

The Canadian province of Ontario announced yesterday that it has suspended a plan to build two new nuclear reactors.

The reason?

According to government officials, concerns about pricing and uncertainty regarding the future of Atomic Energy Corporation (the favored bidder for the nuclear projects), prevented Ontario from continuing with the procurement.

But the Globe and Mail newspaper reported the following...

"Canadian nuclear safety regulators say they have underestimated the seriousness of a design feature at the country's electricity-producing reactors that would cause them to experience dangerous power pulses during a major accident.

If reactors are not shut down quickly, their ability to keep radioactivity from escaping would be put to the test, according to an internal commission document.

The document says Canada's seven nuclear stations, which all use Candu technology, have a feature known as 'positive reactivity feedback,' in which their atomic chain reactions automatically speed up if the water pumped into the reactors to cool them leaks, one of the worst accidents possible at a nuclear station. If reactors aren't immediately shut down during this type of incident, positive reactivity leads to a quick snowballing in the pace of nuclear reactions, which in turn could cause potentially damaging overheating.

The fear is that with a large loss of coolant, such overheating could put the nuclear facilities' containment features - the concrete domes and other protective mechanisms around reactors that are the last-ditch defences to stop the spread of radioactivity into the environment - to a dangerous test.

The commission is monitoring the problem closely because positive reactivity could lead to 'severe core damage and early challenge of containment integrity if not arrested in time' during a severe loss of coolant accident, the document said."

Now I'm not a nuclear engineer, and I don't pretend to understand much about nuclear power generation. But I am your typical consumer. And no matter how many times I hear from pro-nuclear types that nuclear is safe, it's stuff like this that makes me realize we're probably a lot better off spending our time and money expanding our renewable energy and smart grid infrastructure.

Of course, I'll probably get quite a few hostile comments to that statement. But the fact is, if a bunch of solar panels or wind turbines overheat - I don't need to be worried about radioactivity issues. And that makes all the difference.

Jeff

"It's never been better and it's never been worse."

That was the line ACORE President Michael Eckhart used to open the sixth annual Renewable Energy Finance Forum Wall Street.

ACORE is the American Council on Renewable Energy, a well-respected member-based organization that has been pushing renewable energy in DC for nearly a decade.

It was the perfect line to convey the current market climate.

The REFF Wall Street

Whenever I return from a conference, I always like to pass on what I've learned.

This is my third year attending the REFF, and it's grown to be one of my favorite cleantech events. Not because I learn about public companies—there are only a few there, and the conference is about finance—but because I walk away with a clear picture of the internal state of the industry from top to bottom.

Ormat (NYSE: ORA) and SunPower (NASDAQ: SPWRA) were there, but only to talk about access to capital from the public perspective. It's really all about where we are now, where we need to be, and where the hell all the money is going to come from to get us there.

Here's what I learned.

The Best of Times

There's a new, clean energy focused administration. Finally.

Green sentiment is growing to a boil both at the consumer and corporate level, with even behemoths like Wal-Mart greening their supply chain and giants like GE, Google, and IBM leveraging their know-how to get in on the action. This thing is real. We knew that.

The American Recovery and Reinvestment Act (the stimulus) has dedicated $56 billion to clean energy and efficiency via grants and tax benefits, and offered clear tax policy guidance for the industry.

There is meaningful and significant energy and climate legislation in front of Congress (passed the House since writing). For possibly the first time ever, the energy bill at hand seriously considers its environmental implications.

Indeed, for those of us with skin in this game, much ground has been covered in just a short time. It wasn't long ago when we were distraught over whether or not the investment tax credit (ITC) and production tax credit (PTC) would be extended.

Now, as was noted at the forum, that seems like ancient history. And we have much bigger issues than whether or not we're going to get tax break extensions.

Yes, the congressional majority and president are on our side. Yes, the stimulus money is going to help out in a big way. Yes, it looks as though the social sentiment is finally starting to shift.

But more importantly, with banks still unwilling to lend, where, exactly, is the money coming from to build the next solar plant? To get the financing for the next wind farm?

And for Green Chip investors, how is that going to affect the valuations of stocks?

The Worst of Times

Financial crisis. Recession. Withdrawal of lending. Loss of tax equity. Slow closing of deals. Stimulus money not being spent yet.

For all the things going for us, there are an equal amount going against.

For starters, banks are unwilling to lend until the government releases detailed guidelines about how the stimulus money is to be spent, because included in that money are loan guarantees.

The rules for those loans are still being written, and the financing structures and mechanisms still being devised. And the banks aren't willing to lend until all that's figured out.

So you can see the stalemate emerging. The banking industry is counting on government guidance before it lends to clean energy energy projects. This is because the government has thrown so much money out there that it's now a de facto lender, and its actions must be taken into account by banks when financing projects.

Neil Auerbach of Hudson Clean Energy Partners had the following questions, just to name a few:

• Do grant proceeds count as equity?

• Will grant proceeds serve as security?

• Can project developers use both grants and loan guarantees for construction financing?

• Can one JV partner in a clean energy project apply for a loan guarantee and not the other?

And his sentiment was echoed by top brass from numerous other global banks. They had many other questions like these revolving around senior debt, subordinated debt, tax equity and how the government's stimulus spending rules will affect lending practices.

So here's the concern. The procurement and construction timeline for cleantech projects can be long: 4-6 months for rooftop solar, 6-10 months for utility scale solar, and 9-15 months for wind.

The rate of new projects has already slowed dramatically because of current capital restrictions. Is the industry going to be able to survive the wait while the government hashes out lending details? How long can the industry tread water while capital continues to be choked off?

With several government officials in attendance, there were more than a few calls to speed the process or risk dying on the vine.

Cautious Optimism

From Under Secretary of Energy Kristina Johnson to Senior Advisor to the Secretary for the Recovery Act Matt Rogers (the man in charge of spending energy stimulus dollars), bureaucrats in attendance recognized the need for urgency and assured they are doing their best to speed the spending of stimulus funds.

By all accounts, Q4 2009 is looking like the release of government rules for treasury regulations and DoE loan guarantees from the stimulus. Financing and procurement for clean energy projects can resume in a big way at that time, provided the rules meet the needs of all parties. Q1 2010 to Q3 2010 is looking like the construction period for the resultant projects with operation seen in Q4 2010.

It's fair to say that a significant clean energy stock recovery will not happen until the capital begins flowing and investors see increasing revenue on the horizon.

For starters, we're locking in easy gains. This helps keep our total portfolio buoyant while freeing up cash for the next play. We've closed 27 winning positions so far this year by using broad market volatility to pick-off familiar stocks.

We're also building positions in less capital intensive industries that can expand without access to large amounts of capital.

And the smart grid fits right in this sweet spot because most of the solutions are software driven. Companies that pursue demand response, like Comverge (NASDAQ: COMV) and EnerNOC (NASDAQ: ENOC) can make innovations with the click of a mouse, not with construction of a new turbine or panel production facility.

Perhaps that's why smart grid stocks have been on such an aggressive path recently:

It's certainly why I've been intensively covering them for the past month or so.

If you haven't taken a position in the smart grid yet, this report will show you how to get started. Not only will these stocks prosper while capital remains tight, but the sector is also slated to receive a good chunk of stimulus dollars when they start flowing.

It's a win-win.

Call it like you see it,

Nick

It may not have made as many waves as the Michael Jackson story, but last week, after the House passed the cap-and-trade bill, the media response was overwhelming. Not that anyone should be surprised. This is a huge issue.

However, it seemed that much of the earliest coverage stirred up an awful lot of hostility and opposition. And it was everywhere. From the most conservative blogs to the most liberal social media sites - those who oppose any kind of effective climate change legislation were not pacing back and forth in the waiting room. They were hitting up every possible media outlet to express their opinions and outrage.

Now I have no intention of opening up the global warming debate here. Those who believe global warming is some kind of scam are not going to change the minds of those who believe there's something to it. And vice-versa.

However, one thing that I'm finding increasingly frustrating is the amount of manipulated data that's being disseminated all over the internet...and mainstream media.

Let's first take a look at the data that was debunked earlier in the year - but was used as a rallying cry on Fox & Friends last Friday.

You've likely heard it before — that cap-and-trade will cost consumers an extra $3,100 a year. This is the figure that a handful of bureaucrats in D.C. came up with after massaging some data found in an MIT study.

John Reilly, one of the study's authors told House Minority Leader, John Boehner that the MIT study had been misrepresented in press releases distributed by the National Republican Congressional Committee. Reilly stated that it was misleading and simplistic to only look at the impact on energy prices, as it didn't account for the proposals that have been designed to offset the energy cost impacts on middle and lower income households.

Of course, it wasn't just Boehner's office that pumped out the press releases about the supposed high costs associated with cap-and-trade.

The Heritage Foundation chimed in with their analysis of the bill which they claim adds little more than a massive energy tax in disguise that promises job losses, income cuts and a sharp left turn toward big government.

Their cost estimate is $1,500 a year.

On the other side of the coin, we have John Reilly's estimate of about $800 a year. . .an EPA analysis which estimates a cost of between $98 and $140 a year. . .and a Congressional Budget Office estimate that puts the total at $175 a year.

I suspect all of these numbers have already been run through the opposition's spin mill, rejected thoroughly, and blasted back out on the internet.

Either way, no matter how accurate or manipulated the data - the truth will only be realized in practice.

Listen: Certainly no one wants to spend more money for electricity. Especially during these rough economic times. And this is what opponents of climate change legislation are banking on - telling us that energy will cost more because it will cost more to produce. But isn't this really just an illusion - like the "cheap" energy we consume today?

I would argue that energy production would not cost more. The price we pay to the utilities for that energy, however, would. And there's a very important difference between the two.  

What we're really talking about here is attaching an environmental cost to the production of electricity. But that cost has always been there. It's just that you and I never see that cost on our bill.

Bottom line: There is a definite environmental cost associated with the production and combustion of fossil fuels. And that cost is the deterioration of natural capital (water, minerals, fish, trees, oil, soil, air, and living systems, including wetlands, estuaries, coral reefs and rainforests)

Now before you write this off as some kind of random environmental agenda, hear me out...

As explained in the book Natural Capitalism (which is an absolute must-read for environmentalists, economists and business leaders), natural capital has never really been valued appropriately. Rather, it has constantly been liquidated, thereby further enabling the deterioration of ecosystem services that really represent the most important type of capital - things like the regulation of atmosphere and climate, the cycling of nutrients and water, pollination, control of pests and diseases, and the maintenance of biodiversity. While the value of these free, natural, and self-regulating services are worth trillions annually, this value has never really been reflected on balance sheets.

Instead, the costs associated with the loss of natural capital have long been externalized onto the environment. i.e.) you, me and every single thing that lives around us.

And the truth is, we're only talking about CO2 with this cap-and-trade bill. As far as I'm concerned, there's still the mercury issues associated with coal, the waste issues associated with nuclear, and the security issues associated with our reliance on oil. These aren't included in the bill. But throw those on your tab, and you'll see an even higher cost per kWh (or higher cost per gallon of gas when referring to oil being used primarily as a transportation fuel)

The price we pay for energy today does not reflect the true cost of producing that energy. An effective climate change bill could at least begin to enable a more accurate cost structure.

I know, I know. No one wants to shell out a penny more for anything. And I'm no different. But if we truly believe in a free market system, than we should not resist a fair and accurate cost analysis of energy. Because the truth is, it's never really existed.

Now understand, I'm not saying cap-and-trade is the answer. To be honest, this thing is so politically-motivated, it's hard to figure out the most effective, and honest solution. Seems to me, the best way to do this is simply to charge consumers the REAL price. I'm confident that if no subsidies existed (direct or indirect) for any kind of power generation (fossil fuel or renewable), and ALL natural capital costs were figured into the equation - the market would dictate the rapid expansion of renewable energy and smart grid development, which would thereby enable a decrease in fossil fuel consumption, and ultimately a decrease in CO2 emissions.

Jeff

The goal is to help keep cars cooler so less air conditioning will be needed. This will increase fuel efficiency and prevent about 700,000 metric tons of CO2 from entering the atmosphere. That's the equivalent of taking 140,000 cars off the road for an entire year.

There are two types of glass technology that are likely to be used...

• Infrared Reflective Glass - which uses a coated film placed between two pieces of glass.

• Solar Absorbing Glass - which is laminated using a solar absorbing material that limits solar energy going into the vehicle.

Compared to the cars available today, these new windows will block 33% more heat-producing rays from the sun, thereby cooling the vehicle's cabin by about 14 degrees Fahrenheit.

As side benefits, these windows will also reduce upholstery fading and dashboard cracking.

The new regulation goes into effect in 2012.

CARB also announced another new regulation yesterday that requires more than a dozen landfills in the state to install equipment that captures methane gas.

I don't have the details, but I'm assuming that much of this methane will be used by waste management companies to generate electricity. This is actually becoming more and more of a common practice. In fact, according to the DOE, in 2005, there were roughly 400 operational landfill gas projects in the United States delivering 9 billion kilowatt hours of electricity - or enough to power more than 725,000 homes, and heat close to 1.2 million homes.

In 2007, Waste Management, Inc. reported that there were 427 operational projects in the U.S. delivering 1,275 megawatts, as well as 550 candidate landfills identified by the EPA. Combined, these projects would amount to 2,595 megawatts, or enough to power more than 2.3 million homes.

To put that in perspective, based on the 2006 U.S. Census, which estimated housing units data, this is enough juice to power every housing unit in the states of Delaware, Wyoming, Vermont, South Dakota, North Dakota, and the District of Columbia, combined.

Methane (which is about 50 percent of landfill gas), is 23 times as potent as CO2, and has more than doubled its atmospheric concentrations over the last two centuries.

Jeff

"Thank God the accident involved two trains heading into town that were sparsely populated. If it had been two rush hour direction trains, fatalities would have easily exceeded 100."

While investigations into the incident itself are continuing, Maryland Congressman and House Majority Leader Steny Hoyer knows that moving millions of people a day on outdated infrastructure is an ongoing gamble with stakes far too high to fudge.

So Hoyer has just proposed an additional $3 billion in Metro transit improvements.

That's a positive move, but it's too much of a response to problems that have been allowed to develop. Forward-thinking investment is what systems like DC's need, before disaster strikes.

$13 billion are set to pour into America's high-speed and commuter rail systems before 2014, including $8 billion in 2009 alone.

That money will be put to best use by investing in companies that make efficiency and safety their top priority. And since the U.S. is playing catch-up to countries like France and Japan that already have high-speed rail, there's a world's worth of examples and listed firms to choose from.

In our new report, High-Speed Rail: Getting Back on Track, we detail the potential economic benefits of advanced nationwide rail infrastructure as well as highlighting the very real costs of underinvestment and inaction.

The only international companies that deserve our public dollars are ones who will get the job done right.

And when it comes to where you should invest, the same tough standards apply.

You can check out the report here.

Until next time,

Sam

According to a new University of Michigan report, a successful turnaround for Detroit automakers could hinge on a rapid cultural transformation. What's that mean, exactly?

Well, the report, "Fixing Detroit: How Far, How Fast, How Fuel Efficient," noted that the existing culture within the domestic auto companies systematically underestimates the value of fuel economy - which has crippled profitability.

Here's what Rob Leinbaum, former GM employee and report co-author had to say...

"For years it has discounted consumer research results when calculating the benefits of improving fuel economy, often by as much as two thirds. If GM had followed its own market research results over the last three decades, they would not be in Chapter 11 today."

And here's an excerpt from the report that discusses fuel economy standards...

"To address the questions of speed and scope of change, we looked at the actions of other large corporations that have managed successful turnarounds. There is extensive literature on this subject, both academic studies and interviews with corporate leaders. In order to address the question of fuel economy standards, we model the impacts of different fuel economy standard increases (30%-35 miles per gallon (MPG), 40%-37.7 MPG, 50%-40.4 MPG) on the profitability and sales of the industry and separately for the Detroit 3, the Japan 3, and all others. The model captures the cost of fuel economy improvement on suppliers, its impact on pricing, and the resulting changes in demand. The inputs to the model are the most recent and accepted estimates of all the key parameters, but since there is debate on many of these values, we conduct an extensive sensitivity analysis on the results.

Findings

The lessons from successful turnarounds are very clear:

• Implement Broad, Deep, Fast Change: All successful efforts addressed the fundamental issues that drove them into crisis and they did it as quickly as possible.
• Replace Management Team: In addition to changes in strategy and structure, in all cases there were widespread changes in management.
• Transform Culture: All of the successful companies considered changing culture a critical requirement and made it a top priority for success.
• Build a portfolio of excellent products: The path to long-term financial health for any company rests on having a great product portfolio. Our domestic auto industry, in its modern incarnation, has never been able to execute an excellent portfolio, only isolated successes.

The impact of higher fuel economy standards on industry profits is also very clear:

• An industry-wide mandated increase in fuel economy of 30% to 50% (35 MPG to 40.5 MPG) would increase the Detroit 3's gross profits by roughly $3 billion per year, and increase sales by the equivalent of two large assembly plants
• The Detroit 3 gain profits over base in all scenarios, with the largest profits gained from pursuing more aggressive fuel economy.
• Japanese automakers profit gains are smaller than the Detroit 3, with the smallest profits gained from pursuing 50% increase (40.4 MPG) in fuel economy.
• At 50% increase, the Japanese industry loses sales while the domestics continue to gain in sales and profitability, a result driven by the different starting points.

The value given to fuel economy by automakers has critical impact moving forward:

• There is compelling evidence that the Detroit 3 have systematically underestimated the value of fuel economy to customers.
• Because Detroit 3 automakers have long underestimated the consumer value of fuel economy, raising fuel economy standards will not cost more than consumers would be willing to pay.
• In every scenario, the average cost-per-vehicle (direct plus indirect) is less than what consumers would be willing to pay."

This particular report built on an earlier University of Michigan Transportation Research Institute study that predicted the Detroit automakers could lose billions in profits and thousands of jobs in the event of an oil spike. The study predicted that when gas crossed the $3 a gallon market, losses could reach $11 billion.

Ford and GM had combined losses of more than $57.2 billion by the time gas hit $4 a gallon last year.

Once on the sidelines, cleantech is now a marketing and social magnet. Companies and factories are going green. So are homes and individuals. Cars are now eco-friendly.

The use of renewable energy is not only doubling and tripling, it's being forced to grow by the government. Well over half the states have laws that mandate the use of renewable energy must expand several times over. A bill currently circling Congress would do the same for the entire country, as well as put a cap on carbon emissions.

Of course, the adoption of the smart grid and energy efficiency is marching right in step.

And I'm not just talking about the U.S. I'm talking about the entire world. Even countries you've never heard of have renewable energy targets.

With so much happening so quickly, I figured it was time to offer a green report card of sorts.  And as a Green Chip Review member, you can access this report - absolutely free - right here: http://www.greenchipstocks.com/report/alternative-energy-a-2009-report-card/449.

Nick

In an effort to capitalize on President Obama's plan to get electric and plug-in hybrid electric vehicles on the nation's highways, Nissan is seeking to invest more than a half billion dollars to begin the production of electric vehicles at a manufacturing plant in Smyrna, Tennessee.

The Japanese automaker expects to produce between 50,000 and 100,000 "eco-friendly" vehicles per year at the Smyrna plant by 2012. Of course, the term "eco-friendly" can be read many ways. In other words, "eco-friendly" can describe more fuel-efficient, conventional vehicles, just as easily as it could describe vehicles that don't use a drop of gasoline. And according to reports from Reuters and a number of other sources, Nissan is expected to first produce a small passenger vehicle at the Smyrna plant.

Still, Nissan is also planning to construct a production facility (with NEC Corporation) that will pump out high-performance lithium-ion batteries. Clearly those are destined to power Nissan's electric offerings.

But in the meantime, it would be nice to get some clarification as to when Nissan plans to produce these electric vehicles in Smyrna. After all, the company has applied for a low-interest loan from the U.S. government. And it should be understandable that we want some kind of clarification on the details going forward. Especially since we're now talking about our tax dollars at work. But I'm optimistic we'll get those details soon.

Also worth noting today is Mitsubishi's announcement that it plans to cut the price of the i MiEV electric car to $21,000. This does include tax breaks and subsidies, but the end result is a discount of more than half.

The i MiEV will only be available in Japan this year, but the company plans to bring the vehicle to North America in 2010.

Jeff

Readers Give Their Reasons for High-Speed Rail

Hey Washington, need a business reason? How about electrical outlets by the seats and access to ground-based Internet? Reader Brek remarked that he has even "looked for real estate near a station" while taking the train in the Los Angeles region. But, Brek laments, land "probably doesn't carry any premium for being near a station."

Aren't we trying to raise home values in this country? Commuters want easy access to fast transportation, and they'll pay for proximity. Simple as that.

Philip S. highlights the pain-in-the-neck factor that would lure millions of drivers nationwide to an advanced train system. In Chicagoland specifically, "a monorail from Joliet to Chicago would save considerable commute time, avoid traffic delays, save fuel, and save lives." Yet, Philip's glasses aren't rose-colored. He points out the fact that many rail riders in the middle of the U.S. need a way to get to and from train hubs. . . Well, a park-and-ride system paired with smaller regional shuttles could go a long way.

Joe J. thinks high-speed rail is "long overdue in the U.S." And if there's one chord your responses struck over and over, it was frustration.

"Learn from the success of others," says one reader who wants to electrify and restore the train system, and get away from diesel-powered locomotives.

Stephanie I. learned how transformative a sophisticated rail system could be when she traveled on Japan's shinkansen, the world's busiest high-speed system.

Traveling at 130 miles per hour, Stephanie learned to love high-speed rail while watching the Japanese countryside whiz by.

That was in 1965, just a year after the shinkansen began operation. Fast-forward 44 years and 9 presidents, and Stephanie "can't believe how backward" the U.S. is. You've got plenty of company, Stephanie!

And it's not just about the need for speed. Stephanie's got a bad back and can't travel by plane. "Hence, I never travel. But I'd love to. Tourism would get a huge boost from older people. We'd go everywhere."

So, there we see a clear benefit to Americans with a variety of physical conditions (not to mention fear of flying), as well as an influx of new money into sightseeing and such.

Comfort is a major component of the rail travel experience. Listen to your iPod, read the paper, or nod off. It's up to you. (I usually try for the first and end up doing the last.)

In much of the world, train service includes the same kind of aisle service flight attendants provide. Believe it or not, the air industry got that idea from the choo-choo!

Which brings us to a strange pivot point between the status quo and the simmering potential. . . maglev (magnetic levitation) rail between airports and city centers.

Maglev Moves Faster

I rode the maglev line from Shanghai's international airport right to Longyang Road in the city and watched the digits tick up, up, and way past any speedometer I'd ever seen before.

The Shanghai maglev goes from 0 to 220 mph in just 2 minutes! Expect to rocket over 280 — cruising speed — and complete the 19-mile trip in 7 or 8 minutes.

With millions of new drivers hitting the road every year, the Shanghai maglev helps prevent congestion on the way to China's 3rd busiest airport.

Is maglev viable here in the U.S.? Many of you voiced your support, including WB's suggestion for a "maglev incorporating superconductor technology" as a means of transmitting electricity while running rail lines.

Smart grid meets smart rail. . . now there's an idea!

A maglev line from Anaheim, California to Las Vegas, Nevada has been on the drawing board for decades, as an attempt to pull traffic off the I-15 highway corridor.

But just since the beginning of June, Nevada senator and Senate Majority Leader Harry Reid seems to have given up on maglev in favor of a conventional (probably diesel) high-speed train called the DesertXPress. Instead of running on a cushion of air like maglev, the latest proposal is back to wheels and aims for around a 150 mph peak speed — just above what the Japanese achieved over a generation ago.

"Maglev is not a priority for me anymore," the Leader said on the subject. "We need to get people moving."

Well, at least we agree on that.

Regards,

Sam Hopkins

P.S. Employing high-speed rail on a large-scale basis will meen numerous new electricity requirements.  This is where the synergies of cleantech come into play.  Soon, we could have high-speed trains being powered by clean energy.  But none of this will happen without the smart grid, the technology that's tying it all together.

The biofuel blend was a mix of traditional jet fuel and a biofuel derived from algae and jatropha - two feedstocks that are gaining in popularity with both environmentalists and biofuel producers.

Algae-based biofuels are still relatively new, with mostly demonstration plants in operation now. But the outlook is promising.

One advantage to algae is its potential oil yield per acre. Early research indicates that there is a significant increase in oil yield compared to the traditional feedstocks we use today, like palm and soy. Also, unlike a lot of other biofuel feedstocks, algae offers less water waste. In fact, it can grow in brackish, saline and wastewater - thereby reducing fresh water for growth. Incidentally, the nutrients in wastewater actually feed algae, making it possible to cultivate at any one of the 5,100 wastewater treatment facilities operating in the U.S.

Additional benefits include...

• No one country has a monopoly on algae production or algae production equipment.

• Algae can grow in temperatures ranging form below freezing to 158 degrees Fahrenheit.

• It does not compete directly with food crops.

• Algae biofuels offer value-added byproducts, such as syngas, high-protein animal feeds, and biopolymers.

• The algae growth cycle can actually be used as a carbon sequestration mechanism, because CO2 is the primary input required for algae to grow.

Of course, since we are in the earliest stages, algae-based biodiesel is also cost prohibitive right now. But as with anything. . . if there's potential, those costs will come down.

Jatropha is also quite popular these days, as this is also not a food crop. In fact, it's actually poisonous if eaten. Jatropha also grows extremely fast, and can be grown on virtually barren land with little rainfall. It can survive up to three years of consecutive drought conditions, and live for up to 50 years.

Jeff

Tianjin Lishin Battery is supplying the batteries for this particular vehicle. You may be familiar with Tianjin, as this is one of the world's largest manufacturers of lithium-ion cells and a key supplier to Apple, Motorola, and Samsung.

Coda is expected to have about 2,700 vehicles available in 2010, with production capacity set to reach 20,000 by 2011.

Of course, Coda's electric car is just one more option in an ever-growing line of higher mpg (or mpg equivalent) vehicles. Truth is, from the smallest suburban garages to the biggest automakers, these next generation, fuel-efficient vehicles really are being developed quite rapidly compared to where we were just a few years ago...

• GM's still committed to getting the Volt out next year.

• Ford will be pumping out new electric vehicles in just two years.

• Mitsubishi recently announced that it will begin leasing its i-MiEV electric car in Japan, next month.

• Subaru's new Stella EV is expected to be available to consumers this summer

• Daimler has invested in Tesla Motors (maker of the electric vehicle sensation, the Tesla Roadster), and will use Tesla's batteries in its Smart electric car...which is expected to hit later in the year in a testing phase.

And don't forget the guys (and gals) that are converting conventional and hybrid vehicles to Plug-In Hybrid Electric Vehicles (PHEVs)...right now. While conversion are nothing new, the momentum behind conversions is definitely growing and developing.

We recently saw Raser Technologies (NYSE:RZ) show off its electric Hummer (with a 40-mile all-electric range) in Washington. And a small California company - Plug In Conversions Corp. - has just completed a new software upgrade that enables all-electric driving at speeds of up to 70 miles per hour in a converted Prius.

Building Tomorrow's Vehicles...Today

A new generation of engineers is also being groomed to take on the personal transportation challenges of tomorrow. In fact, last Friday, students from Ohio State University took first place in the EcoCAR Challenge - an advanced vehicle technology competition run by the DOE, GM and the Argonne National Laboratory.

Essentially, this challenge requires students to design and build advanced propulsion solutions, utilizing a variety of clean vehicle options. These include...

• All-electric

• Range-extended electric

• Hybrid

• Plug-in hybrid

• Fuel cell

The students also incorporate lightweight materials, improve aerodynamics and use alternative fuels, like ethanol, biodiesel and hydrogen.

Interestingly enough, Ohio State also announced a 2,000 mpg-equivalent solar car just last month. It's not a practical vehicle you could drive to work everyday. But the technology that these college students are developing is exactly the kind of technology that so many car manufacturers ignored , or simply denied for decades. Of course, that all changed when gas hit $4.00 a gallon.

Nonetheless, we're certainly excited to see what the future holds for a new generation of fuel-efficient vehicles. And while I am partial to electric and plug-in hybrid electric vehicles (particularly because these vehicles more than meet my needs, as well as the needs of more than half the daily commuting population), there are dozens of potential options coming down the pike. From electrification to advanced biofuels to new designs of old ideas - the race is on to take us out of the stone age of vehicle development...and into the 21^st Century.

Which do you think will take the lead?

Let us know your thoughts in the comments section below.

To a new way of life, and a new generation of wealth...

Jeff

Keep up with Green Chip for the real deal on FutureGen and where America's energy future lies.

Sam Hopkins

In an effort to capitalize on the growing demand for renewable energy in the U.S., Ireland's Mainstream Renewable Power is developing new wind sites - from greenfield through construction - with the intention of selling the projects to the utilities down the road. This is a winning prospect for the utilities, as it takes a big chunk of the development risk out of the equation. It essentially becomes a much more attractive investment.

Mainstream recently bought three wind farms in Illinois that will now be ramped up to a capacity of 787 megawatts. It will come at a cost of $1.7 billion, and take about 4 years to complete.

This deal is Mainstream's second North American deal in just three months. The first was a a $742.4 million joint venture with Alberta Wind Energy Corporation to build about 400 megawatts of wind energy in Alberta.

Jeff

High-speed rail would lessen commute times between close-together cities like Washington and Baltimore, and it would let business travelers get from Boston's city center to the nation's capital in under 3 hours.

Baseball fans in Baltimore know the bittersweet boost the local economy gets each year from Amtrak, as Red Sox and Yankees fans flood down for games against the Orioles. It turns out that it's cheaper for Boston and New York natives to catch the train down and catch a game than it is to buy a ballpark seat in their hometowns!

Going Back to Cali

Some of the security hassles of air travel may be replicated as rail lines get more packed, but times to and from far-flung airports would be eliminated. What's more, you can book a train ticket for a reasonable price at any train station and often without an attendant. There's no comparison when it comes to the run-around.

There's also a huge savings to be had at the state level, as California makes clear.

California's state government says a statewide high-speed rail network would eliminate the need for 5 runways and 90 boarding gates to be built by 2020, and construction crews alone would employ 160,000 workers.

By 2035, all jobs associated with expanding railway infrastructure in the Golden State could come to 450,000!

That's in addition to saving on traffic congestion, pollution, and health care costs for citizens (3000 lane-miles of freeway would also be cut out by rail), and creating a billion dollars in revenue surplus for Sacramento, where state legislators are perennially locked in budget strife.

You know what, though? It's right to doubt the government's ability to get rail done right.

The 'Big Dig' Bogeyman

As some politicians in Washington push for an "all of the above" approach to energy that includes more oil drilling in the U.S., do they also stand behind giving Americans the best options in efficient intercity travel?

Boston's "Big Dig" highway project became a laughing stock for time and cost overruns in a government-led project. The boondoggle even cost a life when temporary patchwork crushed a vehicle.

NJ Transit doesn't want the ARC (Access to the Region's Core) tunnel to become "Big Dig, Part 2." And in the southern part of the state, we're seeing an example of how rail projects can grow from more than one root.

The Delaware River Port Authority (DRPA) failed to get approval recently for its own diesel-fuel light-rail line towards Philadelphia's New Jersey suburbs.

DRPA couldn't get stimulus funding because the project didn't meet federal criteria on "ridership, cost-effectiveness, and commuter time savings."

"It's extremely difficult to meet the marks they put down," DRPA CEO John Matheussen told the port authority board.

How many proposals like DRPA's from around the country get federal funding, according to the CEO? Only 2 out of every 100 projects. That leaves room for states to act more quickly, he says, which can bring a time and cost advantage as the race for regional high-speed rail heats up.

We're tracking companies like ABB (NYSE:ABB), which has played a major role in creating light-rail systems around the world.

Next week, a look at what other countries are already doing with high-speed.

What's your experience with rail travel, and how do you think the U.S. should move forward on the issue?

Let us know in the comments below.

Regards,

Sam Hopkins