Weekly Resource for December 16, 2011
'Climate-Smart' Agriculture Includes Accelerating Renewable Energy
Debate continues over just what was accomplished at the latest global climate change talks in Durban, South Africa over the previous two weeks. However, for the first time during these annual talks, agriculture was cited as a major player in the dynamics of mitigating and adapting to climate change.
In fact, "climate-smart" agriculture was a recurring theme during the talks. The concept promotes agriculture in addressing a changing climate, whether it’s sequestering carbon in the soil through specific crop management practices, or through the development of renewable energy sources that replace and reduce dependence on fossil fuels that contribute to changes in climate. As for the latter course, agriculture and forestry stakeholders have a variety of ways they can produce clean energy, either directly to provide energy on-site or indirectly by integrating this energy into the existing conventional energy supply system. Renewable energy sources – biomass, wind, solar, geothermal, hydro-electric, among other technologies – tend to be widely dispersed throughout rural areas and the potential for further growth and deployment is enormous. As the Durban talks well demonstrate, world leaders are slowly but surely coming to the realization that agriculture and forestry delivers multiple solutions. That recognition is all the more reason for lawmakers here to retain critically important energy funding programs and tax incentives for U.S. renewable energy technologies that produce economic, national security and environmental benefits. Read more…

News of Note


Section 1705 Funds to be Eliminated Under 11th-Hour 'Omnibus' Appropriations Bill

Unallocated funds tied to a DOE loan guarantee program for renewable energy projects that was criticized earlier this year would be stripped from a $1 trillion appropriations bill that is undergoing 11th-hour negotiations in Congress.

Passage of the "omnibus" measure, which would guide spending for the remainder of fiscal 2012 by the DOE, EPA and Interior departments, among others agencies, is being sought to avoid a government shutdown looming with the expiration at midnight tonight of a continuing resolution adopted by Congress last month to keep the government afloat.

DOE officials say that even if Congress eliminates the $181 million left in the Section 1705 loan guarantee program – an initiative that drew fire when one recipient, solar technology company Solyndra, failed last summer and took with it a $535 million federal loan guarantee – the program remains active. The administration continued to issue loan guarantees under the 1705 program even after news of Solyndra broke, up through its expiration Sept. 30. The fiscal 2012 rescission language would not affect day-to-day operations and program employees who will continue to monitor and work with the ongoing 28 projects in a portfolio of some $16 billion in loan guarantees.

The money to be rescinded reportedly comes from 2009 stimulus funding carried into fiscal 2012. Lawmakers like Rep. Cliff Stearns (R-FL), who headed oversight committee hearings on Solyndra, insisted on the rescission language in the DOE appropriations measure, stating the government’s role in loaning money or guaranteeing loans made through a third-party lender poses too great of a financial risk in the face of a huge national deficit.

Proponents say the program is essential to encourage new technology development that can lead to new industries, new jobs and an improved economy. They also say the program's default rate compares favorably with a nearly 9-percent default rate reported by both the Education Department and the Federal Housing Administration.

Renewable Energy Industries Seek Tax Credit Extensions

As the 112th Congress wrestles with last-minute payroll tax deduction and unemployment benefits legislation before recessing for the holidays, renewable energy stakeholders are urging lawmakers to extend key tax incentives before they go, including one facing expiration Dec. 31.

The biodiesel industry is calling on lawmakers to convert to a producers' credit and extend an existing $1-per-gallon blenders' credit that expires in a little more than two weeks. The 111th Congress allowed the credit to lapse for much of 2010, before a last-minute reprieve both extended the credit through 2011and made it retroactive for biodiesel blended in all of 2010.

However, the extension did not come before dozens of biodiesel plants shut down in 2010, causing the loss of thousands of a jobs and a drop in production down to 315 million gallons. With the incentive, production shot up to a record in excess of 800 million gallons. Trade officials say the incentive is critical for the industry to meet a federal Renewable Fuel Standard requirement of 1 billion gallons in 2012.

Meanwhile, advanced and cellulosic ethanol producers are seeking this year an extension of tax benefits that expires at the end of next year. In a
letter sent to congressional leaders, the Advanced Ethanol Council (AEC) pressed for the extension of the $1.01-per-gallon Cellulosic Biofuels Producer Tax Credit (PTC) and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property.

AEC Executive Director Brooke Coleman said the incentives "are vital to the ongoing development of the domestic advanced ethanol industry. To ensure stability in the marketplace, and prevent unnecessary job losses, Congress should provide long‐term extensions of these provisions." He called for an extension of at least five years.

The AEC emphasized the importance of consistent federal policy to a multi-billion dollar investment in new ethanol biorefineries that are now beginning construction. "The advanced and cellulosic biofuels industry is now in the process of building new plants, innovating existing production facilities with emerging technologies, and introducing new product streams that will allow the renewable fuels sector to become more profitable, diversified and efficient," wrote Coleman. "Several billion dollars have been invested in advanced biofuels development with the expectation that Congress will stay the course with regard to its commitment to the industry. A tax increase on advanced biofuels at this time would curtail investment and undercut an industry just starting to close deals and break ground on first commercial plants."

Other renewable energy industries are also seeking the congressional extension of other production tax credits that expire in a year, including a credit of 2.2-cents per kWh for wind energy currently applies only to those facilities placed “in service” by the end of next year. Similar per-kWh production tax credits for geothermal, closed-loop biomass, open-loop biomass and other technologies are currently available only for those facilities place in service by the end of 2013.

Even though many of the credits do not expire until next year or 2013, the industries are asking Congress to extend incentives this year as a matter of timing. They say the mere prospect of the credits expiring in 2012 or 2013 will affect projects that take 18 months to build, driving the sector into fits and starts that have dampened clean energy investment for decades.

Solar Energy Industry Records Best Quarter Ever
The U.S. solar industry installed a quarterly record for new solar electric capacity in the third quarter with 449 megawatts (MW), says the Solar Energy Industries Association. The trade group said more U.S. solar electric capacity came online in the third quarter than all of 2009 combined, and that the fourth quarter is predicted to be even larger.

Industry officials cited utility-scale project completions, a strong residential market, effective policies and the plummeting price of solar panels.

According to the SEIA and a report from GTM Research, through the third quarter of 2011, the U.S. solar market has installed more than 1,000 megawatts (MW) of solar capacity on the year, already surpassing the 2010 annual total of 887 MW. The 449 MW installed in the third quarter represents 140 percent growth over the same quarter last year.

However, solar industry officials say much of the growth is due to the Department of Treasury's 1603 program, which, absent a congressional extension, is set to expire on Dec. 31. With no extension of the program, the report predicts that there will be a tax equity bottleneck for projects in 2012, leading to a possible slowdown in installations in late 2012 and into 2013.

"The U.S. solar industry is on a roll, with unprecedented growth in 2011," said Rhone Resch, president and CEO of SEIA. "Solar is now an economic force in dozens of states, creating jobs across America. But our industry needs stable policy on which to make business decisions, and unfortunately an underlying mechanism for financing solar projects is scheduled to expire on December 31. To keep the industry growing and creating jobs in the U.S. we need Congress to extend the 1603 program."

Resch said the 1603 program "has done more to expand the use of renewable energy than any other policy in U.S. history. Our country is not in a position to have Congress turn their back on American industries, and it is critical that Congress extend the 1603 program in the few days left before the end of the year." For more information, click
HERE.

USDA Funds More Flex-Fuel Pumps Through REAP

USDA this week announced another round of Rural Energy for America Program (REAP) loans and grants, including some $1.3 million for the installation of flex-fuel pumps in eight states. The funding is also targeting energy efficiency and renewable energy systems on farms and livestock operations, and at rural businesses.

"Stable energy costs create an environment for job growth in rural America," Vilsack said. The program, he said, "is helping agricultural producers and business owners reduce their energy costs and consumption – and by doing so is helping preserve our natural resources, protect the environment and strengthen the bottom line for businesses, ranchers and farm operations."

Collectively, these REAP-funded projects announced this week, along with those announced earlier by USDA, are expected to lower energy usage by 2 billion kilowatts and prevent nearly 2 million metric tons of emissions from being released into the environment.

This week's announcement is the last for the REAP awards cycle for 2011. The program, authorized through the 2008 Farm Bill, provides loans and grants for farmers, ranchers and rural small business owners to purchase and install renewable energy systems and make energy-efficiency improvements. These federal dollars are leveraged with other funding sources for the projects.

Through fiscal 2011, which ended Oct. 31, USDA Rural Development provided through the REAP program a total of $23.2 million for energy efficiency projects, $20.9 million for biodigesters, $20.3 million for solar energy projects, $8.2 million for hydroelectric systems, $7 million for biomass energy projects, $4.28 million for flexible fuel pump projects, $3.9 million for wind energy projects, $1.4 million for geothermal installations.

For more information and access to a list of this week's funding recipients, click
HERE.

Headlines of Note for the Week Ending December 16, 2011

News of interest to our 25x'25 Partners and advocates for a clean energy future:


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