Middle class eager to buy cars in congested China; automakers try to keep up with demand

By Alisa Priddle

Detroit Free Press 

BEIJING -- Juan Lu and her husband, Jun Gao, can't suppress their new-car grins. The young Chinese couple have taken delivery of their first car, a Ford Mondeo midsize sedan, from a Ford dealership in western Beijing. They are part of a burgeoning middle class that wants to trade in their subway tokens for their own wheels to get Lu to work at the hospital and Gao to his government job, and also take them away for a weekend holiday.

Automakers like Ford and Fiat-Chrysler are racing to establish themselves in China to meet this growing demand while dominant players such as General Motors, Volkswagen and Hyundai invest to maintain their leadership.

While growth has slowed in the world's largest market, the sheer volume and sales potential mean no one can afford not to compete in China. There has always been wealth in China. With a population of 1.3 billion, there are more than a million millionaires and the number keeps growing, making it a target-rich environment for large luxury vehicles with hired drivers and sumptuous backseats.

Driving is a harrowing experience

China is a country where driving is not for the faint of heart, especially in major cities, but that has not curbed consumer appetite for vehicles. The congestion -- it can take hours to travel a short distance in Beijing -- has bred precision driving skills on roads where pedestrians, bikes, scooters and odd three-wheeled minicars give way to larger luxury cars and alpha buses that blare their horns incessantly to warn everyone to move aside.

The overarching rule: first is right, meaning the vehicle closest to a gap in traffic goes for it. Lane markings and red lights are mere suggestions. Against all logic, left-hand turns are executed from the far-right lane in an asphalt dance where the spaces between vehicles and their surroundings are measured in inches. Near-misses are constant, actual accidents surprisingly rare.

Into this mix now wade an excited Lu and Gao, both 30, who live frugally and have saved for their first car for as long as they can remember. They bought a Mondeo because it cost less than the Volkswagens, Hondas or Buicks they researched online. "Our friends bought a Mondeo and recommended it," Lu said. "We picked Ford because the Mondeo price is affordable and the car is very big, safe, spacious and good for family use."

Word of mouth and Internet comparisons are as important in China as in any mature market.

They paid 150,000 yuan, or renminbi (RMB) in cash, about $23,834. Credit is available in China, but less than 20% trust or use it. Lu and Gao got financial assistance from their parents instead.

Lotteries for licenses

The couple won the lottery in February -- the one that gave them a license plate. Megacities like Beijing and Shanghai with populations of about 20 million and 23 million, respectively, are addressing traffic gridlock and smog by restricting license plates.

Beijing issues 20,000 new plates a month. Would-be car buyers stand a 1-in-32 chance of securing a plate that allows city driving six days a week. The last number on the plate determines the days the car can enter the city. Driving on the unauthorized day can be punished by a fine or even imprisonment. In Shanghai, 8,000 plates are auctioned monthly and sell for an average price of 45,300 RMB or $7,200.

Lu and Gao beat the odds and won a license plate in the February draw. They ordered their new Mondeo in April from Zhangqi Furui Ford. "Furui" means lucky, said sales manager Wen Gao Jiang. The model they wanted was not among the roughly 100 vehicles in stock so they waited 10 days for it to arrive. Delivery day provided a joyous excuse to be late for work.

Both have their driver's licenses -- no small feat in China where there is a series of about 10 stations to pass, including written and driving examinations, as well as sight, hearing, strength and flexibility tests, involving squats and other calisthenics that may take westerners by surprise.

But Lu said she might leave most of the driving to Gao."I'm not good at it," she said with a shy smile. Zhangqi Furui is one of about 400 Ford dealerships in China. That will grow to 700 by 2015.

"Overall, Beijing car sales are down more than 50%," said Jiang, who has sold cars for almost six years. He insists the Ford dealership is not down as much as the competition and hopes to see sales double in the next few years with the new Focus and four utility vehicles in the lineup.

Spinning wheel in service department

Customers who spend 1,000 RMB (about $160) on service at Zhangqi Furui can spin a wheel for a chance to win a prize or gift to show customer appreciation. Jiang said service brings in 70% of revenue. When between 60% and 70% are first-time buyers in China, first impressions are crucial. That is why Ford doesn't want to add more than two dealerships a week, to ensure it is done right, said Joe Hinrichs, president of Ford Asia-Pacific and Africa. But he knows 400 dealers in a country of 1.3 billion people means accessibility is limited.

At a flagship Buick dealership in the eastern part of Beijing, the showroom and service areas are massive. The dealership sold 1,200 vehicles in 2011 with about 11 salespeople and another 77 staffing the 45 service bays and paint shop that service about 36,000 vehicles a year.

Tea and massages

Common waiting areas have room for extended families, including grandparents, who pick up the new car or spend part of the day waiting for their car to be serviced. There are VIP lounges for elite business clients with formal tea service areas and high-end massage chairs to work muscles from head to toe.

There are 3.7 million Buick owners in China and 60% of sales are high-end, said Jean Liu-Barnocki, brand director for Buick China, which has 114 dealerships offering full coverage in larger tier 1 and 2 cities and 50% coverage in smaller tier 3 cities. "We try to standardize the sales process from the way we welcome them into the showroom to the sales process and even the walk through the dealership," Liu-Barnocki said.

GM will expand its retail network from 2,900 in 2011 to 3,500 this year, including the Buick, Chevrolet, Cadillac and the new Chinese Baojun brand, said Kevin Wale, president of GM China. To meet demand, CEO Dan Akerson said GM is on track to boost production capacity in China to 5 million vehicles a year by 2016.

Growth will come from smaller cities

GM is determined to hang onto its No. 1 sales status in the country by expanding into midsize cities in China's interior to make up for a drop-off in cities like Beijing because of the license restrictions.

An Ernst & Young report said the restrictions will continue to dampen vehicle sales. Large cities like Beijing could see half their dealerships go out of business with smaller domestic Chinese automakers taking the brunt of the pain. But it has to be done, said Yale Zhang, managing director of Automotive Foresight in Shanghai.

Beijing now has 70 cars for 1,000 people and almost total gridlock. In the U.S., there are more than 700 cars per 1,000 people. But that density is just not feasible in China's megacities. "Beijing's congestion can't handle it," Zhang said.

http://www.freep.com/article/20120506/BUSINESS01/205060429/1014/business01

Energy audits may be beneficial for both home buyers and sellers

Energy audits can save buyers thousands of dollars in future operating costs. One real estate broker says they help sell houses — even raise prices — rather than wrecking deals.

By Kenneth R. Harney

May 6, 2012

WASHINGTON — It may be the best-kept secret in residential real estate: For a couple of hundred dollars, a potential buyer bidding on an existing house can ask for a formal energy audit along with the standard inspection clause. That audit, in turn, can save the buyer thousands of dollars in future operating costs and pinpoint the specific features of the house that need correction to improve efficiency. It might also be a tipoff to a sobering reality: This house is an energy guzzler. Either the asking price comes down, the seller fixes the problems or I walk.

Though energy audits have been available to consumers for years — the best known is the Home Energy Rating System — virtually nobody in the real estate field promotes them to buyers. Of the 120,000 HERS audits completed last year in the country, according to experts, just 12,000 were done on existing houses — a trivial number in a market with 4.5 million resales. The rest were performed on newly built homes.

Since energy costs rank high on the list of ongoing expenses for many homeowners, and multiple studies have demonstrated that energy-efficiency renovations more than pay for themselves in utilities savings, why aren't more audits performed? In an era of $4-a-gallon gas and autos that are marketed on the basis of their low fuel consumption, shouldn't buyers know about the operating costs of the houses they are bidding on? Shouldn't energy audit contingency clauses in purchase contracts be as commonplace as home inspection clauses?

June Gardner, an EcoBroker with the Evers & Co. realty firm in Washington, D.C, says "it's not on people's minds really. They're much more worried about mold or radon and lead paint" — the sort of defects that standard home inspections turn up.

Even real estate agents who carry the "EcoBroker" green designation don't necessarily push the subject. Frances Vernon, an EcoBroker with Dilbeck Real Estate Real Living in La Cañada Flintridge, said that she's "never been asked by a buyer or seller" to order a HERS energy audit on a house. "It's just not done here. It's not a pressing issue."Realty agents who primarily list houses and represent sellers say buyers almost never ask for them. Nor do sellers, who prefer to avoid giving purchasers ammunition to make costly demands for repairs before closing.

Of four EcoBroker designees randomly selected for interviews around the country, only one said he regularly recommends energy audits to both sellers and purchasers, and finds that they help sell houses — even raise prices — rather than wrecking deals.

Leland DiMeco, owner and principal broker of Boston Green Realty, said although not all clients opt for an energy audit, "I do bring it to the table" with everyone. "It just makes sense. Most buyers want to feel comfortable that they've done their due diligence and know what they're getting." Even sellers are warming to the idea.

DiMeco recently made the energy audit pitch to a seller of an 87-year-old New England colonial that had significant energy leakage and efficiency problems. The seller agreed to do a HERS audit, then spent money putting spray cellulose insulation in the attic, replacing the leakiest windows, upgrading interior lighting and replacing some low-efficiency appliances.

The result: Shoppers loved seeing the energy audit, the upgrades and the seller's full disclosures. The house sold six days after listing for $50,000 more than nearby, energy-wasting comparable homes. Doing the HERS audit "turned out to be a great marketing benefit for the sellers," said DiMeco, even though they needed some convincing upfront.

Steve Baden, executive director of the Residential Energy Services Network, the organization that trains and certifies inspectors conducting HERS audits, says that although the "adoption rate" on existing homes "has been low," builders of new homes have been enthusiastic. Forty percent of homes constructed in the country now get HERS audits and scores, he said.

About 4,000 auditors are certified to conduct HERS studies. They can be found, along with information on contractors to do energy-efficiency improvements, at http://www.RESNET.us. Equally important to home buyers, said Baden: RESNET has negotiated agreements with two of the largest home inspection networks to begin offering lower-cost energy-efficiency surveys and performance audits as add-ons to standard inspections. Once this becomes commonplace, there may be little need for separate contract contingencies for an energy audit: Energy efficiency will just be part of the package.

http://www.latimes.com/business/realestate/la-fi-harney-20120506,0,7456238.story

Greening New York's most iconic skyscraper

By Nick Zieminski

NEW YORK | Sun May 6, 2012 7:03am EDT

(Reuters) - The Empire State Building has long been a signature feature of Manhattan's skyline. But owners of the iconic edifice, planning a $1 billion initial public offering, hope to convince investors and tenants that it's what's on the inside that really counts.

The 81-year-old New York tower has undergone a massive, 3-year makeover designed to cut energy use, modernize office suites, and attract tenants willing to shoulder higher rents. Building owners and key suppliers on Monday will detail the energy savings they've achieved so far.

While the new One World Trade Center has claimed the title of New York's tallest from the Empire State, the 102-floor Art Deco building towers over many others when it comes to the world of building retrofits.

The Empire State is the highest-profile project in a growing collection of renovations that are becoming big business for industrial conglomerates and electrical service firms.

As America's towers show their age, especially in the Big Apple, where nearly half of office space was built before 1945, companies like Honeywell International Inc, Johnson Controls Inc, Siemens AG and United Technologies Corp are eyeing a retrofit market predicted to generate $16 billion in annual revenue by 2020, up from about $5 billion last year.

Johnson Controls, a building efficiency systems supplier based in Milwaukee whose contract for the Empire State is worth about $20 million, estimates six jobs are created for every million dollars spent. By that measure, the retrofit industry will provide almost 100,000 jobs, a meaningful number for a U.S. construction industry in which unemployment remains high after the housing bust and financial crisis.

To be sure, not everyone can afford the tens of millions of dollars needed for a sizable retrofit. Financing is scarce and investments can take years to pay off.

But for those who can pull off the upfront payment, a renovation can boost rents, lead to longer leases, lower vacancy rates and attract larger, higher quality tenants.

The U.S. Department of Energy has estimated the return on investment of the Empire State Building's renovations at 4 percent, but other less famous buildings have returns in the triple digits.

HIGHER RENTS, LOWER COSTS

Seeds for the Empire State project date back to the 2006 launch of the Clinton Foundation's Climate Initiative. Anthony Malkin, president of the Malkin Group that controls the Empire State Building, was at a cocktail party at the just-completed "green" Hearst Tower when he offered another building he owned at 35th Street and Broadway as a retrofit test case.

But the Clinton Foundation was keen for something more iconic and pushed for the Empire State Building.

In 2008, Malkin's team started the project in secret, initially unsure whether a retrofit could deliver double-digit energy savings. More than 60 possible fixes were considered before the team settled on eight with the best payoff. They weighed factors like carbon dioxide emissions, expected pay-back and whether the scheme could be marketed to tenants.

In fixing the building, there were two things that could not change: the landmark's Art Deco exterior and the 86th-floor observation deck, a cash cow for the business. The deck and the building's tenants were not disrupted, which forced much of the work to be done at night.

The retrofit was launched the following year as part of a more than $550 million capital investment plan. The upgrade promises a steady pay-back, as building owners expect to shave $4.4 million a year off energy costs. Johnson Controls expects the redo to deliver the promised 38 percent energy savings by next year.

And tenants are already paying more, especially as the 2.85 million-square-foot, 1,454-foot-tall building has replaced small renters with large organizations such as LF USA, part of Li & Fung Ltd, the Federal Deposit Insurance Corp and French cosmetics company Coty Inc.

"I get a competitive advantage when big tenants come in here," Malkin said, adding that average office rents in August 2006 were $26.50 per square foot, compared to the high $40s to high $50s nowadays.

While the building is still leasing below comparable properties in Midtown, the gap has narrowed such that the Empire State's average rent is now a third under market, compared with two-thirds below in 2006, according to data supplied by Studley, a real estate services firm representing tenants.

WINDOW FACTORY

The way Americans work has changed and this forces offices to evolve. Many jobs that involved coming in and sitting at a desk in an enclosed space for eight hours can now be done from home. There is less need for hat racks, but more for open floor plans and collaborative spaces for talking face-to-face.

And mobile workers need electrical power, servers and high-speed networks - which means equipment to cool all the equipment. A high-tech tenant, or anyone concerned about image, is willing to pay a premium for space assigned a government Energy Star rating or the related, third-party LEED rating.

The updated Empire State Building ranks in the top 10 of all buildings in terms of efficiency and won a Gold LEED rating. It mixed quick-pay back measures, such as new lighting and new ventilation systems, with a host of longer-term fixes, such as replacing or modernizing boilers and chillers.

A retrofit of the basement chiller plant was initially budgeted at $22 million but ended up costing far less once the team realized the giant chillers, resembling submersibles, could be rebuilt rather than replaced.

Engineers took over one floor for a factory to upgrade the building's 6,500 windows. These were remanufactured with suspended coated film and gas fill to boost insulation, then reinstalled. The windows and radiative barriers account for a hefty chunk of expected energy savings.

On many floors, engineers removed dropped ceilings that had been installed in various stages over the years, which blocked out part of the light.

"It felt stuffy," said Johnson Controls project engineer Paul Rode. He is currently overseeing 10 retrofits, up from the one or two in a typical year.

Tenants can go online to access information on their energy use thanks to 25,000 sensors that dot the walls and feed data into a central management system. Like an eco-friendly big brother, the system knows when someone is in the room and when to adjust the temperature.

"PROGENITOR" FOR JOBS

The Empire State Building is hardly alone in the world of Manhattan retrofits. Google Inc's recent takeover of a sprawling art deco Port Authority facility in Chelsea is another. Near Central Park, Sir Norman Foster's celebrated Hearst Tower rose atop a 1928 Art Deco building, whose insides were gutted. JP Morgan renovated its 1960s Park Avenue tower with such amenities as an 11th floor herb garden.

"For the next 50 years, the majority of architects' work will be on projects that are already built," said Bill Worthen, who directs sustainability efforts at The American Institute of Architects.

Johnson Controls estimates the current market for retrofits of public sector buildings, such as schools and courthouses, alone is around $5 billion to $6 billion a year.

"The opportunity on the commercial side is probably double that," said Dave Myers, head of the company's building efficiency segment, who noted that the Empire State Building's experience is now discussed on every project.

Nevertheless, hurdles remain to wider adoption of retrofits. Financing is difficult as few lenders have ventured into loans for capital-intensive commercial projects. And even if capital can be raised, building owners are often skeptical about a pay-back that can take years.

Malkin plans to publish an unfiltered diary of costs and savings for others to emulate, saying he wants to be a "progenitor" for jobs created by the energy efficiency movement.

Other buildings may take ideas from the project's performance contracting, in which a service provider guarantees certain energy savings, as by Johnson Controls did for the Empire State. This method has been mainly visible in the municipal, university, schools and hospitals, or "MUSH", market.

Some owners are put off by a long planning process, or by the split incentive between building owners, who bear the cost of investment, and tenants, who benefit from lower operating costs.

Johnson Controls' engineer Rode is frustrated when he sees retrofit projects stall for no good reason, but he subscribes to the notion of a tipping point in the industry.

"If we figure it out here, we can do it anywhere," Rode said, chuckling at his own riff on Frank Sinatra's "New York, New York," a song as iconic as the Empire State Building.

http://www.reuters.com/article/2012/05/06/us-usa-construction-retrofits-idUSBRE84505S20120506?feedType=RSS&feedName=topNews&rpc=71&google_editors_picks=true

Con Edison and ThinkEco Launch Window Air Conditioner Energy Savings Program Device Allows Customers to Control Their Window A/C Power Usage

NEW YORK, NY, Apr 26, 2012 (MARKETWIRE via COMTEX) -- As temperatures begin to climb this summer, Con Edison and ThinkEco have partnered to launch a window air conditioner program that will allow customers to use less energy, protect the environment and help maintain reliable service during times of peak demand in New York City. Con Edison and ThinkEco plan to create smart A/C control through modlets on 10,000 New York City air conditioners, resulting in five megawatts of demand reduction, enough power for 5,000 homes. Con Edison plans to distribute the modlets this summer in large apartment buildings throughout New York City, working with building owners and tenants to install the energy saving devices. The modlet ( http://themodlet.com/demo.html ) is a simple plug-in smart outlet that can be controlled by a smart A/C thermostat and a user's online modlet account, allowing customers to control the temperature setting of any window air conditioner. Customers can remotely turn on/off their A/C from any smart phone or browser, and set the temperature. In addition, users can preset schedules through any web browser, so that their window air conditioners only turn on when needed, transforming the stand-alone window air conditioner into a smart, networked device that gives users enhanced convenience and control. Customers who participate in the program will also be alerted when a peak usage event is called, and Con Edison will adjust the unit's temperature. With over six million window air conditioner units in Con Edison's service area -- which sometimes run unnecessarily when residents are not home -- the ability for Con Edison to adjust air conditioner temperatures remotely during a heat wave could help to manage peak summer demand. "Con Edison continues to increase engagement with our customers by introducing new technologies that help them save energy, save money, and protect the environment," said Rebecca Craft, Director of Energy Efficiency Programs of Con Edison. "Our work with ThinkEco is forging a new way to help reduce the energy waste associated with window air conditioners, while keeping city residents comfortable during heat waves." The coolNYC program ( www.coolnycprogram.com ), created by ThinkEco and Con Edison, is a new approach to managing residential peak usage by combining ease-of-use in controlling window air conditioner thermostats with an incentivized program that uses real-time energy tracking capabilities. Con Edison can use the ThinkEco system to reduce strain on the grid by sending signals to participating customers' air conditioner units when demand peaks. The program technology allows Con Edison to focus on any geographic area of high priority during an emergency. "The coolNYC program is proving how New York City residents are highly receptive to using smart consumer-oriented products that save energy and enhance personal convenience," said Erik Katz, CEO of ThinkEco. "As electrical demand continues to increase, we need to ensure a way to relieve pressure on the grid in the absence of new capacity." Visit www.thinkecoinc.com to purchase a modlet and checkout http://themodlet.com/demo.html to see how easy they are to use. Participating residential customers receive the modlet smartA/C kit, which integrates Con Edison's intellectual property with ThinkEco's modlet platform. The smartA/C kit includes a modlet, a remote-control thermostat and access to a web-based application. ThinkEco is a former tenant of the New York City Accelerator for a Clean and Renewable Economy (NYC ACRE at NYU-Poly) the NYSERDA-funded clean-tech incubator helping transition New York to a low-carbon future. About ThinkEco, Inc. New York City-based ThinkEco Inc. is a leading provider of easy-to-use energy efficiency solutions for homes and businesses. Its patented modlet system is a networked and scalable smart-plug platform that wirelessly connects any plug load to ThinkEco's robust cloud solution, powered by proprietary algorithms. The modlet provides the remote metering of plug-load power consumption in real time, and enables users to set savings schedules to better control their energy use and quantify savings. 

  http://www.marketwatch.com/story/con-edison-and-thinkeco-launch-window-air-conditioner-energy-savings-program-2012-04-26

The Challenge(s) of Energy Planning in Chinese Cities

A Competitor Emerges for Solar Panels

By KATE GALBRAITH

NY Times

Published: April 4, 2012

AUSTIN, TEXAS — Of all the types of energy embraced by the green community, “combined heat and power” probably has the clunkiest name. But proponents hope that C.H.P. systems, which can be installed in homes, will one day compete with better-known technologies like solar panels.

The idea is to capture two forms of energy at once, namely heat and electrical power (which is why the technology is sometimes called cogeneration). Large systems exist on college campuses like the University of Warwick in England and also at hospitals, chemical factories and even airports. These systems use the heat left over from generating electricity to produce either hot water, which circulates through pipes to nearby buildings to provide heat, or steam, which can be used for industrial purposes.

Because the process of making electricity wastes a lot of energy, combining heat and power generation leads to greater efficiencies, said Jürgen Weiss, head of the climate practice at the Brattle Group, a consulting firm based in Cambridge, Massachusetts.

“The idea of C.H.P. is to make electricity and not waste the heat that gets generated in the process, but rather to use it for something useful,” Mr. Weiss said. That means lower utility bills and fewer greenhouse gas emissions.

In recent years, engineers have started designing more residential-scale systems. These may be about the size of a refrigerator and can fit into a basement. In Britain, a system run by a Stirling engine may cost more than £6,000, or $9,500, including installation, and in Germany — where heating systems are generally more expensive — a C.H.P. system may run from €15,000 to €20,000, or $19,800 to $26,400, according to Delta Energy & Environment, a research company based in Edinburgh. Delta said it would often take homeowners 10 years to make back the cost, in the form of lower utility bills. Getting prices down will be critical, experts say.

The small systems work best in cold climates, where homes need plenty of heat. They are often fueled by natural gas and make a bit of noise, but the extra electricity they produce can be sold into the power grid. Big-name automakers like Honda Motor and Volkswagen have applied their technology to help develop small-scale systems, sometimes known as micro C.H.P.

Small systems are gaining traction in Japan after the nuclear disaster last year, which led officials to order that nearly all of the country’s reactors be taken offline. Orders have “increased dramatically” since that event and are likely to rise even more sharply in the future, according to a recent report by Pike Research, a research and consulting group in Boulder, Colorado. Honda has sold micro-C.H.P. systems in Japan since 2003 and said last year that about 108,000 households were using its units, called the Ecowill.

The home systems in Japan tend to be much smaller than those in Germany or the United States, according to Kerry-Ann Adamson, a research director for smart energy who is based in London for Pike.

Elsewhere in the world, the picture is mixed. In the United States, a basic obstacle is lack of knowledge, said Daniel Bullock, director of the Gulf Coast Clean Energy Application Center, a U.S. Department of Energy group based in a Houston suburb that promotes C.H.P. and related sources of energy.

“Most people don’t even know about C.H.P.,” Mr. Bullock said. As a result, he added, “People are willing to pay a lot more money for solar panels than what a C.H.P. system would cost.”

The low price of natural gas in the United States — a result of the plentiful supplies created by the hydraulic fracturing boom — may make the systems more appealing, Mr. Bullock said, though homeowners, lacking the negotiating power of large industrial users, may not reap the full benefit of the lower gas prices.

In Europe, Delta Energy & Environment forecasts that 40,000 to 70,000 units a year will be sold by 2015, but “an outcome with substantially lower sales is possible,” said Jon Slowe, a director for the company, adding that Britain and Germany are using incentives to push the hardest for micro-C.H.P. technology.

Germany has a target of getting 25 percent of its power from C.H.P. systems of all sizes by 2020. A draft proposal now under consideration would increase incentives for the systems, although Ulrich Fikar, a spokesman for the industry group Cogen Europe, said it was “not ambitious enough for micro-C.H.P.”

The Netherlands used to be a promising market, but the new government sharply cut spending and incentives, according to Mr. Slowe. Belgium, too, is cutting spending.

“It’s a really tough time in Europe, with governments trying to tighten their belts,” Mr. Slowe said.

The United States has even fewer incentives for micro-C.H.P., as it does for most alternative energy sources.

“Look at the difference between the U.S. and, say, Germany,” Mr. Bullock said. In Germany, “you’ve got feed-in tariffs, a much more active regulatory environment, you have programs that support financing and implementation.”

At least one U.S. company has struggled to introduce the technology. Freewatt, a micro-C.H.P. unit developed by ECR International in Utica, New York, was installed by some U.S. customers. But “it’s unavailable commercially right now,” said Maggie Reed, a representative for the company.

Nonetheless, some analysts view the United States, with its large number of buildings and potential for energy-efficiency gains, as a sleeper market.

“The Japanese market is a given,” said Ms. Adamson, the researcher for Pike. “What will change the face of the residential C.H.P. market is if the U.S. wakes up to this.”

http://www.nytimes.com/2012/04/05/business/global/a-competitor-emerges-for-solar-panels.html?_r=1&src=rechp

LIPA prepares to heat up solar incentives

by Claude Solnik

Long Island Business News

Published: March 6, 2012

Just days after the reducing existing incentives for companies installing solar power, the Long Island Power Authority is gearing up to launch a new, far-reaching incentive program in which it will pay customers based on the solar power they produce.

LIPA Chief Operating Officer Michael Hervey described the program, which could be in place as early as this summer, during his speech at the Hauppauge Industrial Association’s annual energy update on Tuesday.

The authority hopes to formally announce a feed-in solar tariff rate in April, paying customers based on solar energy they generate, although the program wouldn’t launch immediately. Feed-in tariffs have been used in states such as California and Florida, where solar energy has caught on rapidly.

Although the tariff would apply to both residential and commercial customers, Hervey said it could make bigger installations, in particular, more economical.

“It’s more of an incentive for medium-to-larger solar installations,” Hervey said. “It allows medium-to-larger solar installations to feed directly into the grid and get paid a fixed price for selling into the electric grid.”

Hervey announced the broad outlines of the program, but not the rates or details, days after the authority cut its commercial solar rebate from $1.75 per kilowatt to $1.50, matching the rest of the state.

“It was so successful that just last week we had to drop the rebate amount,” he said. “We had a very high subscription rate for the commercial program in December and January. We’re well on our way to using our whole year quota for commercial solar.”

LIPA hopes the feed-in tariff could generate a new burst of interest in larger projects, further fueling solar power on Long Island. Hervey said the tariff would supplement existing programs, such as solar installation rebates that are driving a shift to solar.

“It’s all about policy,” said Neal Lewis, executive director of the Sustainability Institute at Molloy Collegeand a LIPA board member. “You can train people to install solar panels. But if you don’t have the right policy, they won’t get a job. We’re expanding.”

Solar contractors said small solar installations already caught on in this region, but a feed-in tariff could prompt a new generation of projects.

“The market is very driven by regional policies, such as LIPA’s program,” said Gentry Rouse, director of business development for Clermont, NY-based Premier Power. “In New York, we’ve seen a market for smaller systems. This feed-in tariff opens up the opportunity for larger systems.”

Supporters of feed-in tariffs point out that systems are reimbursed based not on cost, but generation, so efficient systems are rewarded at a higher rate.

“When you look at large commercial systems, you can get the price per installed solar down,” Rouse said. “The paybacks are there really for larger systems.”

A National Renewable Energy Laboratory study of feed-in tariffs described various types, including some that are constant, while others vary based on energy cost.

Utilities in Florida, Hawaii and Vermont have adopted feed-in tariff policies based on the cost of generation, while Maine adopted a cost-based tariff with a cap. California, on the other hand, adopted a feed-in tariff based on “avoided cost” related to market prices.

LIPA also is developing a remote net metering tariff in which companies that install solar power away from their facilities will be able to reap benefits of solar programs.

“That opens up some real possibilities, being able to use property in less dense areas to net meter usage against a building in a higher density area,” Hervey said.

Hervey said the authority hopes the feed-in tariff as well as streamlined and standardized permitting will lead to a new crop of solar projects as more medium-sized businesses get on board. “It certainly opens up another market,” Hervey added of the tariff. “We’ll have to see what it brings. It’s meant to be a whole new market.”

The feed-in tariff is part of several changes in the works for solar programs, for which LIPA has about $25 million set aside for incentive programs. There are currently about 70 megawatts of solar power on Long Island.

LIPA, meanwhile, has led a push for towns to sign on for a uniform solar code, in which standard regulations and costs govern installation.

http://libn.com/2012/03/06/lipa-prepares-to-heat-up-solar-incentives/

Projects to Add Wind Power for City Gain Momentum

By MIREYA NAVARRO

New York Times

February 28, 2012

Despite Mayor Michael R. Bloomberg’s long-expressed dream of putting wind turbines on skyscrapers and bridges, the constraints of an urban landscape have so far proved too challenging for reliable wind power in the city, energy experts said. As a result, New York City has been largely inactive — and behind the national curve — in embracing wind power.

But that is about to change. This spring, the city’s Department of Environmental Protection will solicit plans for the first major wind project, the installation of turbines atop the Fresh Kills landfill in Staten Island. And city planners are working on zoning changes, now under review by the City Planning Commission, to allow turbines up to 55 feet high on the rooftops of buildings taller than 100 feet, and even taller turbines on commercial and industrial sites along the waterfront.

But the biggest potential for supplying wind power to the city lies offshore, where the Bloomberg administration is supporting an application filed last September by a coalition led by the New York Power Authority to lease a swath of the ocean floor for a wind farm 13 miles off the coast of the Rockaways in Queens.

City officials say they are ready to take advantage of their coastal proximity to seek bigger renewable-energy projects and quicken the pace toward cleaner air and the jobs and economic benefits that would accompany those projects. A study commissioned by the city last year said wind farms could play a major role in replacing power now generated by the Indian Point nuclear power plant in Westchester County. The plant supplies up to 25 percent of consumption in Consolidated Edison’s service area, including New York City.

“When you’re talking about huge wind, offshore is really a unique opportunity,” said Farrell Sklerov, a spokesman for the city’s Department of Environmental Protection.

The proposal for the offshore wind farm, which is scheduled for a public hearing before the federal Bureau of Ocean Energy Management next month, is considered a game changer in that it would start at 350 megawatts but have the potential to double its capacity — eventually generating enough electricity to power a half-million homes in New York City and Long Island.

The plans are in the initial stages, but they are part of a push by states along the Eastern Seaboard to make wind power a significant staple of their energy mix. The region lags behind the West and Midwest, where flat, open spaces are plentiful and wind turbines already supply up to 20 percent of electric power in some states.

“We certainly have an ocean in our backyard that can host these turbines,” said Katherine Kennedy, clean-energy counsel at the Natural Resources Defense Council. “If we can develop wind and solar, all of a sudden we look like a European city.”

Through most of the last decade, turbines have been springing up all over the country, including in dairy farms in upstate New York. As a result, New York State, which has set a goal of deriving 30 percent of its energy from renewable sources by 2015, now ranks 12th among the states in wind power installations, with 1,400 megawatts, or enough to meet 2 percent of the state’s electricity demand, says the American Wind Energy Association, a trade group.

Some states got a lift this month when federal officials from the Department of the Interior cleared the way for companies to seek federal leases in wind-energy areas off New Jersey, Delaware, Maryland and Virginia, speeding the process to approve wind projects.

Environmental groups say New York has been less focused on tapping into wind than some of these neighboring states but this year the New York Department of State is expected to identify the most viable locations for offshore wind farms with an eye toward protecting shipping, commercial fishing and ocean habitats — an approach that experts say should save time and red tape and help attract developers looking to begin such a project.

Long processes to win approvals and the higher cost of wind compared with less sustainable sources of electricity are not the only obstacles to developing wind installations. The projects must also withstand public scrutiny. Despite support from environmental groups, the only federally approved offshore wind project to date, Cape Wind in Nantucket Sound off the coast of Cape Cod, has been stalled, in part by opposition over aesthetics and the impact on American Indian artifacts and burial grounds, among other issues.

Bonnie Brady, executive director of the Long Island Commercial Fishing Association, opposed a proposed wind farm three-and-a-half to five miles off Jones Beach in Long Island over concerns about the potential harm to fish. The project was ultimately derailed in 2007 by high costs. Ms. Brady said the proposal off the Rockaways, while farther offshore, was still worrisome. It calls for at least 70 wind turbines that could each soar 430 feet above the water.

“The biggest problem we have is that there’s really no science to either support or negate wind power as something that wouldn’t affect the fish negatively,” she said. “If there’s a problem, once you’ve done the damage, who’s responsible?”

While more expensive to produce than wind power, solar energy is more suited to cities, energy experts said, because it can be harnessed more discreetly from thousands of rooftops. New York City has so far grown its solar production to seven megawatts, a modest amount but well over its practically nonexistent wind production. This runs counter to what is occurring in the rest of the state and the country, where wind installed capacity, 46,000 megawatts, vastly outpaces the 3,800 megawatts of solar.

Some New York buildings are already experimenting with private wind production, like the Eltona apartments in the Melrose section of the Bronx. But they have found that they do not get enough wind to make turbines a reliable source of power. City planners are revising zoning regulations to allow more private turbines, but still concede that wind turbines may not thrive here unless they are on or near the shore.

City officials say the former environmental wasteland known as Fresh Kills is an ideal location. The Department of Environmental Protection will, in the next two months, ask for wind and solar proposals to develop 75 acres of the landfill, with the goal of adding 15 megawatts of energy, enough to power 3,300 homes. Officials said at least a third of the production would be wind power.

The Fresh Kills plan could double the city’s solar output, but it is the wind turbines that excite the Staten Island borough president, James P. Molinaro, who has lobbied for a wind farm for years, and persuaded the state to finance a study that showed the site could support seven 400-foot turbines.

City officials say it has taken them this long to evaluate the challenges of installing wind turbines on the landfill’s unique subsurface.

Fresh Kills closed as a landfill handling the city’s residential garbage more than a decade ago and is now undergoing a transformation into a 2,200-acre park.

“It’d change the biggest tragedy that ever happened to Staten Island and convert it to something wonderful,” Mr. Molinaro said. “Windmills that would give us clean energy in a beautiful park. It’d be a model for the rest of the world to look at.”

http://www.nytimes.com/2012/02/29/nyregion/new-york-to-renew-push-for-wind-power.html?pagewanted=print

CHICAGO NEWS COOPERATIVE

Power Station’s Closing Could Create Problems

Jose More Photography/Chicago News Cooperative

In March, Dominion Resources is closing the coal-fired State Line Power Station in Hammond.

By KARI LYDERSEN

Published: February 11, 2012

For years, environmental and health organizations have called for the closing of the 83-year-old coal-fired State Line Power Station, one of the Chicago area’s top polluters.

Now the plant, which is in Hammond, just across the Indiana border on Lake Michigan and adjacent to Calumet Park, is burning through its last stores of coal. It will stop generating electricity by March 31. Federal air quality regulations that take effect in coming years and — more immediately — competition from inexpensive natural gas make it uneconomical to run the plant, according to Dominion Resources, the Richmond, Va., company that bought it in 2002.

While many environmentalists are cheering the closing, it raises new environmental and land-use challenges. It will also be an economic blow to Hammond, and to about 100 employees, most of them members of the United Steelworkers union and many who have worked there for decades.

“It’s not a good thing for the city economically, but at the same time the air we breathe will be a little cleaner — what’s that worth financially?” said Mayor Thomas M. McDermott Jr. of Hammond.

Similar situations are playing out nationwide as aging coal plants close, including a Dominion plant in Salem, Mass.; six Midwestern and Eastern coal plants owned by FirstEnergy Corp.; and, potentially, the Fisk and Crawford plants in Chicago in coming years.

Lower natural gas prices from the increase in hydraulic fracturing, or fracking, of shale gas deposits have made it much less profitable to produce electricity from coal. This is especially true for facilities like State Line and the Chicago coal plants, which sell electricity on a highly competitive short-term wholesale market rather than through long-term contracts.

“These companies bought coal plants based on certain assumptions about the price of natural gas,” said William Boyd, a professor of energy law at the University of Colorado. “Shale gas turned their world upside down, and retrofitting old coal plants to meet new environmental regulations doesn’t make sense anymore.”

Some coal plants elsewhere in the country have been retrofitted to burn natural gas. But Dominion and Midwest Generation, which owns the Chicago plants, said converting would be too expensive.

Doug McFarlan, a spokesman for Midwest Generation, said, “We will continue to evaluate numerous factors — including the capital expenditures required to comply with environmental regulations and market conditions that impact our ability to recover costs — in making decisions about future investments in any of our power generating units.”

Dominion had planned to close State Line in 2014, but last summer the company said the plant would be shut down by March.

Environmental advocates have long said the sooner the better, since medical studies link emissions from coal plants to higher rates of asthma attacks, cardiac disease and premature death among surrounding residents.

Old coal plants like State Line — the current boilers date to 1955 and 1963 — have not had to meet the same environmental regulations as new plants. Environmentalists have portrayed State Line as a justice issue because three-quarters of nearby residents are minorities and almost one-fifth live below the poverty line.

Even so, the closing will have serious economic consequences for the already struggling area. State Line is the biggest property tax payer in Hammond, at about $4.5 million a year.

At Pucci’s Restaurant and Pizzeria, which for decades has delivered food to overtime workers and served beer and pizza to men dropping by after their shifts, the prospect of cleaner air does not count for much.

“It’s almost a tragedy,” said Frank Pucci, an owner of the restaurant. “Some of my best customers are losing their jobs. I’ve been in the area all my life, and nobody ever talked about the so-called pollution from State Line.”

Moving up the closing date is a major frustration for about 30 workers who turn 55 between now and 2014. Employees who are 55 and older when laid off can continue to purchase moderately priced health insurance through Dominion, but younger workers cannot.

“With our exposure to coal dust, mercury, welding gases — I don’t know what my medical future will be,” said Jeff Kuzma, 52, a welder who has worked at the plant for 33 years.

Dan Genest, a spokesman for Dominion, said other employers had called wanting to hire their workers, and the company is hosting a job fair on Thursday. But workers are skeptical.

“We all know age discrimination is against the law, but realistically these companies are going to want someone who can put in a lot more years,” said David Weaver, president of Steelworkers Local 12502, who started as a janitor at State Line 30 years ago and worked his way up to control room operator.

As the shutdown nears, urban planners, environmental leaders and elected officials are envisioning new uses for the property, including transforming it into a park that would connect existing Chicago and Indiana bike trails or making it the site of a wind or solar farm. There have also been calls to preserve the plant’s Renaissance revival architecture, with its intricate brickwork.

Environmentalists, however, fear the site may be contaminated with toxins and heavy metals, which could potentially run into the lake during rains or leach into the groundwater.

Jim Norvelle, another Dominion spokesman, said the company currently had no plans to test the site for contamination, or to sell or develop it for recreational, commercial or alternative-energy uses.

Officials at the United States Environmental Protection Agency and the Indiana Department of Environmental Management said they had no information indicating that the site was releasing hazardous waste. Unless new information comes to light, there are no government mandates for testing or cleanup.

Howard A. Learner, the executive director of the Environmental Law & Policy Center, a Midwest environmental advocacy organization, has called for an independent evaluation of the site.

According to Environmental Protection Agency records, chemicals released into the air by the plant in 2010 included nearly 30,000 pounds of sulfuric acid, 1,180 tons of hydrochloric acid and 143 pounds of mercury. It released a total of about 44,000 pounds of copper, barium, zinc and lead into Lake Michigan, the federal records said.

“We don’t know what’s there, but there are some red flags,” Mr. Learner said. “This is the tip of the iceberg of a broader problem as more old coal plants shut down.”

klydersen@chicagonewscoop.org

http://www.nytimes.com/2012/02/12/us/closing-of-state-line-power-station-on-illinois-indiana-border-is-expected-to-leave-problems-behind.html?_r=1&src=rechp&pagewanted=all