Sun Shining Brightly In Masdar And California  

Technology Review has a long report on the Masdar sustainable city project (primarily using solar power) explaining why the rest of the world should care about this "green metropolis" and the inovations it will be acting as a testbed for - A Zero-Emissions City in the Desert.

The first hints of the project are visible. A white wall stretches through the desert, like a chalk line on a dusty playing field. A bus with darkened windows stirs a low cloud, ferrying workers past a cluster of steel cranes, two portable drilling rigs, and a stand of concrete columns sprouting rust-colored rebar. A tall wire fence guards rows of solar panels mounted on concrete pads.

The construction is the start of a vast experiment, an attempt to create the world's first car-free, zero-carbon-dioxide-emissions, zero-waste city. Due to be completed in 2016, the city is the centerpiece of the Masdar Initiative, a $15 billion investment by the government of Abu Dhabi, which is part of the United Arab Emirates. The new development, being built on the outskirts of Abu Dhabi city, will run almost entirely on energy from the sun and will use just 20 percent as much power as a conventional city of similar size. Garbage will be sorted and recycled or used for compost; sewage will be processed into fuel. Concrete columns will lift the city seven meters off the ground, creating space underneath for a network of automated electric transports that will replace cars. Planners predict that the development will attract 1,500 clean-tech businesses, ranging from large international corporations to startups, and--eventually--some 50,000 residents.

The city will be an oasis of renewable energy in a country of five million, made rich by oil, that consumes the most natural resources per capita in the world. Seen one way, it's just the latest ostentatious project in a country that's been defined by them. Indeed, the UAE is already home to the world's tallest building and an enormous indoor ski facility that features a 200-meter-long black-diamond slope. Real-estate developers have dredged coral and sand from the sea floor, piling it up in the Persian Gulf to create islands in the shape of palm trees and a map of the world.

Yet many experts are optimistic that the city can become a test bed for new approaches to the engineering and architectural problems involved in creating environmentally sustainable cities. Although architects have already designed and builders constructed many small zero-emissions residences and commercial buildings, projects involving large, multi-use commercial buildings have fallen short of expectations, using too much energy or failing to generate enough. Part of the problem is the growing complexity that comes with scale, says J. Michael McQuade, senior vice president of science and technology at United Technologies in Hartford, CT; today's design software hasn't been able to handle it. But Masdar City, itself developed with the help of extensive modeling, will be wired from the beginning to collect data that could prove valuable for developing better models. That information could make future zero-emissions cities cheaper and easier to build.

And the development is meant to make money, not just introduce new technology. "We want Masdar City to be profitable, not just a sunk cost," said Khaled Awad, the project's director of property development, at a huge real-estate exhibition in Dubai last fall. "If it is not profitable as a real-estate development, it is not sustainable." Yet if it is, it may be replicable.

"If environmental engineers, by gaining experience from building this wild city, become much more productive at building the next city, this starts to move from being science fiction to something Houston would adopt," says Matthew Kahn, a professor of economics at the University of California, Los Angeles. Gil Friend, CEO of Natural Logic, a sustainable-design company based in Berkeley, CA, agrees. "I see Masdar on the one hand as a playground for the rich," he says, "and on the other hand as an R&D opportunity to deploy and test out technology that, if things go well, will show up in other cities."

Of course, much of what's learned from Masdar won't apply outside the incredibly hot and sunny coast of the Persian Gulf. A site in Germany, which wouldn't get as much sunlight, couldn't rely as heavily on solar energy. A site in San Francisco might not need air conditioning, making information about advanced cooling systems less relevant. But if the project reaches its environmental goals, it will at the very least show that such cities can be built. "People say, 'Gee, that would be great. That would be a good idea, but obviously it's not possible,'" Friend says. "Once you can point at something, it takes away a lot of those arguments."

The Masdar Initiative is part of an ambitious plan to transform a resource-based economy--the third-largest exporter of oil in the world--into one based on knowledge and expertise. The name Masdar comes from the Arabic word for "source," and the plan is to make Abu Dhabi the Silicon Valley of alternative energy: a source of talent, patents, and startups in the very industry that could one day challenge the supremacy of oil. It's a daunting challenge to say the least, especially for a region that, according to Awad, "hasn't been known for innovation for a thousand years."

Tech Review also reports that "after months of gloom, the U.S. stimulus package could kick-start some solar power projects" - Solar Firms Pray for a Stimulus Bump.

The solar industry, overcast in recent months by the credit crunch and the wider economic downturn, is hoping for a few rays of sunshine after the passage of the U.S. stimulus package last week.

The months since October have been challenging for the industry, and recent news has reinforced a sense of gloom.

Yesterday, First Solar, a leading maker of solar-power modules, reduced its revenue projections for 2009 to around $1.8 billion, a drop of about $300 million. It also said that it would start to invest in some of its customers' projects, perceived as a move to keep those projects going. In January, Ausra, a California company that had plans to build several large-scale solar-power plants, announced that it would scale back to become primarily a reseller of solar equipment, and that it would also lay off 11 percent of its staff. Earlier in the same month, OptiSolar, a startup that makes thin-film solar technology and had plans for a photovoltaic power plant, said that it would have to lay off half of its staff, citing difficulties getting funding for the project.

Even before the turn of the year, many projects had run into problems. Back in October 2008, BP Solar scrapped plans for a $97 million expansion of a major solar plant in Frederick, MD. Around the same time, Evergreen Solar, a company that manufactures photovoltaic modules and solar cells, delayed an $800 million plant in China.

"The market had pressed 'pause,'" says Ethan Zindler, head of North American Research at U.K.-based analyst firm New Energy Finance.

The market capitalization of the solar industry has dropped from $200 billion at the start of 2008 to just $60 billion now, says Michael Rogol, managing director of PHOTON Consulting, a solar-industry research firm based in Boston. Rogol estimates that, out of around 700 solar-power firms that his company monitors, 200 are facing serious cash-flow problems, while another 140 may run into problems. He believes that "a thinning of the herd" is already happening.

But the passage of the U.S. economic stimulus bill (the American Recovery and Reinvestment Act of 2009) has provided a ray of hope for a beleaguered industry.

One provision, in particular, gives solar companies cause for optimism. It changes the rules on how investment tax credits are awarded, allowing companies that are building power plants to take 30 percent of the cost as a tax break in a project's first year. This could prove vital because, in the last quarter of 2008, 10 out of 14 tax-equity providers stopped doing business in the solar market.

Earlier in February, Southern California Edison said that it will purchase 1.3 gigawatts of power from BrightSource. The company will not finish its permitting phase until later this year, and therefore will not need project financing for months to come. The company is also one of 16 that have been approved for loan guarantees from the Department of Energy--a process that has been accelerated by the stimulus plan. A BrightSource spokesman says that it is not yet clear what the terms of these loans will be, and thus whether the company will take the money, but such guarantees will clearly help make project financing available for renewable-energy firms. ...

Another factor that, ironically, could help kick-start some solar projects is the plummeting cost of solar equipment caused by the downturn. The Solar Energy Industries Association estimates that the price of solar panels has dropped 25 percent from last summer, and that it may fall another 10 percent by this summer. Some industry observers expect that prices could fall by as much as 50 percent from last year.

Alain Harrus, a partner at Crosslink Capital, a venture-capital firm that has funded First Solar, among other renewable-energy firms, argues that these price drops could have "a huge impact on total cost of capital to start a project."

Fortune's Green Wombat has more on Californian utilities and their efforts to restart solar power plant construction - PG&E chief: We’ll be solar’s ‘green knight’.

With the financial crisis dimming solar’s prospects to become a significant source of renewable energy, utility giant PG&E on Tuesday said it will spend $1.4 billion over five years to install 250 megawatts’ worth of photovoltaic panels in California while contracting with private developers for another 250 megawatts. PG&E chief executive Peter Darbee said the utility is also prepared to be a “green knight,” rescuing distressed big centralized solar power plant projects by providing financing so they can get built.

“We have contracted for 24% of our energy to be renewable and we’re concerned whether our [developers] will have access to capital,” Darbee said at PG&E’s San Francisco headquarters during a press conference. “We think financing for these projects may be in jeopardy. PG&E is well-positioned with its $35 billion balance sheet to step up and help.”

PG&E’s (PCG) move to take a direct role in obtaining the renewable energy it needs to comply with California’s global warming laws could be big business for solar module panel makers and installers like SunPower (SPWRA), Suntech (STP) and First Solar (FSLR). The action was prompted in part by a change in the tax laws that lets utilities claim a 30% investment tax credit for solar projects.

Fong Wan, PG&E’s vice president for energy procurement, said most of the 500 megawatts of solar panels will be installed on the ground in arrays of between one and 20 megawatts at utility substations or on other PG&E-owned property. (The utility is one of California’s largest landowners.) A small portion may be installed on rooftops, he said.

PG&E said the solar initiative will generate enough electricity to power 150,000 homes and will provide 1.3% of the utility’s electricity supply.

“There’s no or little need for new transmission and these projects can plug directly into the grid,” said Darbee. “Given our size and our credit ratings and our strength, we can move forward where smaller developers may not be able to do so.”

The California Public Utilities Commission must approve PG&E’s solar initiative, which Wan estimated would add about 32 cents to the average monthly utility bill. An $875 million program unveiled by Southern California Edison (EIX) last year to install 250 megawatts of utility-owned rooftop solar panels has run into opposition from solar companies that argue it is anti-competitive and from consumer advocates who contend the price is too high. The state’s third big utility, San Diego Gas & Electric (SRE), has also proposed a rooftop solar program.