Miami Renewable Energy Conference Report1[1]

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  • 1. adopted a Climate Protection Plan, which calls for greener EXECUTIVE SUMMARY transportation and infrastructure for the immediate future. Prosperous opportunities abound for UK and Florida investors Sir Alan Collins, Director-General for UK Trade & Investment in the and developers willing to tackle global climate change. USA reaffirmed the UK’s commitment to combat climate change and to lead by example whilst analyzing how the debate over climate change UK Trade & Investment at the British Consulate-General in Miami, has transitioned from science to policy and, now, to investment. The Greater Miami Chamber of Commerce and Enterprise Florida, hosted a conference on Renewable Energy in Miami, Florida. The Matthew Partridge, Senior Biofuels Consultant for Wood Mackenzie conference, “Trends in Global Innovation and Finance: The Tools Inc., addressed concerns surrounding biofuels and discussed key of Technology Meet the World’s Energy Challenge,” addressed issues for their development. Analyzing the various drivers that are how recent developments in the industry are creating business pushing biofuels forward as an alternative to fossil fuels, Mr opportunities for the UK and Florida and influencing global Partridge argued that the best strategy for bringing the next finance systems. generation of biofuels to market is through small, incremental steps. The UK and Florida’s shared commitment to address climate The panel on Trends in Next Generation Biofuels, examined industrial change, coupled with each region’s comparative advantages and biotechnology trends and new research developments in biofuels and innovations, highlighted the conference’s objectives of promoting low carbon power generation. The speakers agreed that there is a the continued innovation of renewable energy sources through great need to identify as many Second-generation biofuels as possible international cooperation. Climate change is a global issue that whilst allowing market forces to dictate the eventual winners. requires a global solution. As a result of geographical and innovative core competencies, Miami is poised to position itself at The next panel, Power Generation from Renewable Sources, explored the epicentre of the global renewable energy market. Coupled with broad trends in emerging technology areas such as marine, wind, London’s determined policies to reduce global warming, the UK photovoltaic, solar and clean coal energy. The presentations and Florida promise to lead the movement to seek and discover the emphasized the importance of partnership and collaboration in newest and cleanest energy technologies. developing a large number of alternatives to satisfy present and future energy needs. The UK believes that climate change is the greatest long-term challenge facing the world today. Further, recognizing that the UK Michael O’Sullivan, Senior Vice President of FPL Group, discussed is facing a decline in indigenous energy supplies and is the current state of wind and solar projects in the US. Whilst FPL transitioning towards becoming a net energy importer, London Group understands that wind is not a silver bullet, investment in the intends to produce 20 percent of electricity through renewable sector has increased steadily, and particularly so during the 2007 energies by 2020. calendar year. At the “Serve to Preserve Florida Summit on Global Climate The following panel addressed Greenhouse Gas Mitigation Change,” held on 23 July, 2007, Florida Governor Charlie Crist Strategies: Links to Policies and Markets. The speakers offered and UK Special Representative for climate change, John Ashton, insights into policy and regulatory frameworks and their effects as signed a partnership to tackle global climate change. Additionally, they spur innovation and technology adoption. Carbon emissions Florida Governor Charlie Crist signed three executive orders trading has emerged as a profitable endeavour for companies, directing cuts in GHG emissions from energy consumption in investors, and industries and is a necessary step for national and state Florida. The governor will request the state adopt a 20 percent by governments as well as the wider international community. 2020 Renewable Portfolio Standards (RPS) with a focus on solar and wind energies. The partnership is expected to increase sector- The fourth panel presented on clean energy finance trends and related trade between Florida and the UK. examined the characteristics of viable clean energy projects and future growth opportunities. The presentations focused on HM Consul-General Keith Allan welcomed the conference investment and development potential in Latin America and the participants and recognized the efforts and leadership of Florida Caribbean. Governor Charlie Crist and Miami Mayor Manny Diaz in addressing climate change. Mr Allan also paid tribute to recent Jorge L. Arrizurieta, Chair of the International Policy Group and developments in Florida, such as Citrus Energy’s plan to convert Governmental Consultant at Akerman Senterfitt, presented on citrus waste into biomass feedstock for ethanol production, and Florida’s role in the development of biofuels for the hemisphere and FPL’s plan to develop a massive solar plant in the state. beyond. Stressing Florida’s geographic advantage and other competencies, as well as the solid UK-Florida commercial Florida Energy Secretary Michael W. Sole cited examples of how relationship, Mr Arrizurieta emphasized the state’s unique Florida is proactively addressing global warming based on opportunity to be at the epicentre of biofuel research and Governor Crist’s executive orders. Addressing the potential development. impact of renewable energies on Florida’s economy and businesses, Mr Sole made a comparison to the dotcom era, calling Throughout the conference, the presenters expressed confidence in this a “Second Industrial Revolution,” whilst claiming that there market forces. The conference demonstrated that market-sensible will be no shortage of profitable ventures for those with vision and developments are being made and that profitable investment an entrepreneurial spirit. opportunities exist. As demand for biofuels and clean energy solutions continues to rise in the UK, Florida, and the world, UK Miami Mayor Manny Diaz detailed how Miami has taken the lead Trade & Investment, The Greater Miami Chamber of Commerce, and as a green city of the future. Miami is one of the original signators Enterprise Florida will help encourage the market to strengthen and of the “U.S. Mayor’s Climate Protection Agreement, and has mature and will continue to strive to identify best prospect solutions.
  • 2. Governor Crist also signed three executive orders directing cuts in REPORT GHG emissions from energy consumption in Florida. Further, the governor will request the state adopt a 20 percent by 2020 TRENDS IN GLOBAL INNOVATION AND Renewable Portfolio Standards (RPS) with a focus on solar and wind FINANCE: THE TOOLS OF TOMORROW energies. The partnership is expected to increase sector-related trade MEET THE WORLD’S ENERGY CHALLENGES between Florida and the UK. Background The UK enjoys the largest wind source in Europe. Capitalising on UK Trade & Investment at the British Consulate-General in Miami, this comparative advantage, as well as on attractive tariffs and an The Greater Miami Chamber of Commerce and Enterprise Florida, expanding supply chain, the UK wind energy sector is rapidly hosted a conference on Renewable Energy in Miami, Florida. The developing. Whilst the UK wind energy capacity currently sits conference, “Trends in Global Innovation and Finance: The Tools behind several European nations---Germany, the world’s leading of Technology Meet the World’s Energy Challenge,” addressed wind energy nation has over 20 gigawatts (GWs) of wind energy how recent developments in the industry are creating business capacity; 10 times as much as the UK 5---the Government deems this opportunities for the UK and Florida and influencing global sector vital to achieve the UK’s energy goals. A concentrated focus finance systems. on funding is aimed at ensuring that policies are in place to attract private investment, assist project finance through long-term power The UK and Florida’s shared commitment to address climate purchase agreements and stimulate activity through capital grants. change, coupled with each region’s comparative advantages and The Offshore Wind Capital Grants Scheme has provided a total of innovations, highlighted the conference’s objectives of promoting £117 million to fund the early development of offshore wind farms. On the continued innovation of renewable energy sources through December 10, 2007 Energy Secretary John Hutton announced plans international cooperation. Climate change is a global issue that to expand Britain’s offshore wind power generation. The draft plan requires a global solution. As a result of geographical and could allow companies to produce up to 33 GWs of wind energy 6 . innovative core competencies, Miami is poised to position itself at the epicentre of the global renewable energy market. Coupled with Florida ranks third nationally in total energy consumption, with 8.6 London’s determined policies to reduce global warming, the UK million gallons of gasoline per annum. Currently, there are countless and Florida promise to lead the movement to seek and discover the solar energy businesses, separated by solar product type such as newest and cleanest energy technologies. solar electric power systems, solar water heating systems and photovoltaic (PV) modules; 7 biomass energy businesses; 2 The UK believes that climate change is the greatest long-term renewable energy investment and financial services; and 21 wind challenge facing the world today 1. Further, recognizing that the energy businesses. Juno Beach, Florida based Florida Power & UK is facing a decline in indigenous energy supplies and is Light (FPL), the principal subsidiary of FPL Group, Inc., operates transitioning towards becoming a net energy importer, London the largest wind farm in the world. Horse Hollow Wind Energy in intends to produce 20 percent of electricity through renewable Texas runs 421 wind turbines and has a capacity of 735 megawatts energies by 2020. Additionally, the UK requires that electric (MW). companies obtain “Renewables Obligation Certificates (ROCs), meaning that renewable energy companies have two sources of HM Consul-General Keith Allan welcomed the conference income in high demand---the sale of energy and the sale of ROCs 2. participants and recognized the efforts and leadership of Florida Moreover, under the Renewable Transport Obligation (RTFO), the Governor Charlie Crist and Miami Mayor Manny Diaz in addressing UK has established a goal whereby 5 percent of total transport fuel climate change. Mr Allan also paid tribute to recent developments in must be from renewable sources 3. In 2005, transport accounted for Florida, such as Citrus Energy’s plan to convert citrus waste into around a quarter of UK energy consumption and for 27 percent of biomass feedstock for ethanol production, and FPL ’s plan to greenhouse gases (GHGs) 4. develop a massive solar plant in the state. Further, Mr Allan noted that 75 percent of all CO2 emissions are generated by the largest At the “Serve to Preserve Florida Summit on Global Climate cities in the world, and commended London’s green efforts leading Change,” held on 23 July, 2007, Florida Governor Charlie Crist up to the 2012 Summer Olympic Games and beyond. and UK Special Representative for climate change, John Ashton, signed a partnership to tackle global climate change. The state will Representing Florida Governor Charlie Crist, Florida Secretary for exchange delegations with the UK and Germany to share public Environmental Protection and Chairman for the Governor’s Action policy experiences, to exchange science and technology Team on Climate Change, Michael W. Sole, praised Florida’s efforts concerning renewable energy sources and energy efficiency, and to to address the issue with actions rather than words 7. He stressed the discuss and promote initiatives that broaden the Kyoto Protocol. importance of international cooperation in dealing with environmental challenges, as well as the value of learning from experience. In that regard, he credited the UK, thanked Mr Allan, and 1 HM GOVERNMENT, CLIMATE CHANGE: THE UK PROGRAMME 2006, available at www.defra.gov.uk/ENVIRONMENT/climatechange/ 2 “Why wind power in the UK? Wind Energy Fact Sheet 2. www.berr.gov.uk/files/file17775.pdf 3 5 “All cars will run on “biofuel mix by 2010” By Ben Webster. “UK wind power reaches milestone” BBC News. 9 Feb. 2007. Nov. 2005. The Times Online. http://news.bbc.co.uk/2/hi/science/nature/6344215.stm 6 http://www.timesonline.co.uk/tol/news/article585544.ece “UK govt unveils plans to expand offshore wind energy.” 4 Banister, David. “Reducing energy use in UK transport.” www.forbes.com/markets/feeds/afx/2007/12/10/afx4422734.html 7 Transport Studies Unit Oxford University Centre for the Florida Department of Environmental Protection’s Action Team Environment. Sep. 2007. reports can be found at http://www.dep.state.fl.us/climatechange
  • 3. REPORT commended the knowledge gained from discussing cap-and-trade in the UK and the EU, along with carbon markets, with Head of UK International Emissions Trading, Jill Duggan, as the state contemplates adopting a European-style carbon trading system in conjunction with California and other proactive states. Further, Mr Sole cited examples of how Florida is proactively addressing global warming based on Governor Crist ’s executive orders: more energy efficient new buildings; a concerted plan to incrementally reduce GHGs by 2025; a more fuel-efficient government vehicle fleet; the installing of solar panels at the Governor’s Mansion; and, pending expected Environmental Protection Agency (EPA) approval, the adoption of vehicle emission standards. Addressing the potential impact of renewable energies on Florida’s economy From left to right: HM Consul-General Keith Allan, Director-General and businesses, Mr Sole made a comparison to the dotcom era, UK Trade & Investment USA, Sir Allan Collins, Miami Mayor Manny Diaz, calling this a “Second Industrial Revolution,” whilst claiming and Florida Energy Secretary Michael W. Sole. that there will be no shortage of profitable ventures for those with vision and an entrepreneurial spirit. Matthew Partridge, Senior Biofuels Consultant for Wood Mackenzie Inc. addressed concerns surrounding biofuels and discussed key Miami Mayor Manny Diaz thanked Governor Crist and the drivers for their development. His presentation, “Biofuels: Energy event’s sponsors and called for greater action on global warming Security, Climate Risk and Oil & Gas Markets,” began with a by Washington. Recognizing that the issue must also be discussion of whether biofuels are a “panacea” or a “Pandora’s addressed at the city-level, Mayor Diaz detailed how Miami has box.” Key benefits of biofuels include lower GHG emissions; taken the lead as a green city of the future. Miami is one of the biodegradable and non-toxic qualities; and improved vehicle original signators of the “U.S. Mayor’s Climate Protection performance. Key concerns include water scarcity; competition for Agreement 8, and has adopted a Climate Protection Plan 9, which food; deforestation; and toxic-run off from agriculture. Despite these calls for greener transportation and infrastructure for the immediate concerns, key drivers, such as the environment, tenuous energy future. The city is replacing 200 fleet vehicles with flex-fuel supply security, and government policies are pushing biofuels models and now requires all new buildings over 50,000 sq ft to be forward as an alternative to fossil fuels. Mr Partridge noted that due LEED certified at the silver level 10. The presentation concluded to current infrastructure, the US is expected to demand substantially with a call for individuals to assist governments by taking more ethanol whilst Europe will continue to demand biodiesel. initiatives to reduce carbon emissions. Further, Mr. Partridge argued that the best strategy for bringing biofuels to market is through small, incremental steps. Sir Alan Collins, Director-General for UK Trade & Investment in the USA reaffirmed the UK’s commitment to combat climate The panel on Trends in Next Generation Biofuels, examined change and to lead by example. Citing the Stern Review 11, Sir industrial biotechnology trends and new research developments in Alan analyzed how the debate over climate change has biofuels and low carbon power generation. Sean O’Hanlon, transitioned from science to policy and, now, to investment. The Executive Director of the American Biofuels Council, chaired the Stern Review, a report conducted by economist Sir Nicholas Stern panel. He cautioned that the transition to biofuels will not be for the British government, concluded that GHGs could be smooth and that there is no single biofuel that will meet all energy reduced cost-effectively and that the price of inaction was far too needs. The speaker suggested that the closest prospect could be great to justify. Further, the Stern Review concluded that biobutanol, which is 13.5 times less evaporative than gasoline and enormous business opportunities will be generated out of six times less evaporative than ethanol, and can be transported on tackling the issue. current US infrastructure. The panel concluded overwhelmingly that there is a great need to identify as many Second-generation biofuels Noting that the UK has a promising track record of reducing as possible while allowing market forces to dictate the winners. harmful emission whilst stimulating economic growth and that the 2006 Florida Energy Act is promoting capital investment and Raul Parisi, Vice President for Dynamotive Latinoamerica, briefly accelerating utilization of renewable energies in the state, Sir introduced and described “BioOil,” which the company claims is Alan called for entrepreneurs and businesses on both sides of the the only Second-generation industrial biofuel in the market. Atlantic to forge partnerships and relationships in order to meet According to his presentation, “Industrial Fuels from Biomass: the challenges posed by global warming. Redefining the Energy Matrix,” BioOil is produced by converting organic residues such as forest and agricultural wastes through a pyrolysis process—the decomposition of residue caused by a thermal reaction. BioOil can currently be used for power and heat 8 For more information, please visit: generation and is expected to be used for transportation in the near http://www.seattle.gov/mayor/climate future. Dynamotive Energy Systems is headquartered in Vancouver, 9 www.miamigov.com/cms/mayor/4060.asp Canada with offices in the UK, the US and Argentina. 10 For more information, please visit: http://www.miamigov.com/msi/pages/GreenBuildings/default.asp Dr Jose R. Moreira, Senior Advisor for MGM International, 11 HM TREASURY, STERN REVIEW ON THE ECONOMICS discussed the challenges in bringing Second-generation biofuels to OF CLIMATE CHANGE (2007), market. His presentation began with a discussion of First- available at http://www.sternreview.org.uk
  • 4. biobutanol’s potential as a a sustainable and environmentally REPORT friendly biofuel that is expected to become a leading road transportation solution within 5-10 years 12. Biobutanol has a generation successes such as sugarcane ethanol usage in Brazil higher energy density than ethanol, and is also less corrosive, less and corn ethanol in the US. Developing countries, however, are volatile, and closer to gasoline and diesel. Further, it more closely largely unable to compete using feedstock crops. Additionally, fits existing fuel infrastructure and can be blended with gasoline, agricultural prices have proven to be historically volatile. diesel as well as ethanol and biodiesel. Cost reduction challenges Despite solid gains made by First-generation biofuels, demand for facing biobutanol’s ascent to market include reducing feedstock fossil fuels is up. Second-generation sources are needed to costs and improving fermentation efficiency. Dr. Green concluded compensate for the competitive shortcomings of the present array that the winners in the current attractive biofuel investment climate of market-ready biofuels. will be those companies that can fill a supply chain in collaboration and partnership. The market cost of Second-generation biofuels is expected to be one of the bigger challenges facing the sector. It is unlikely that The next panellist, Dr Larry Lemanski, Vice President for Research at prices will be below those for sugarcane and corn ethanol. Dr Florida Atlantic University (FAU), presented on “Florida’s Ocean Moreira concluded by reaffirming that there is room for, and a Energy.” Oceans, which cover more than 70 per cent of the earth, are necessity for, all biofuels in order to tackle climate change. the largest and best solar collector on the planet and absorb the energy equivalent of 250 billion barrels of oil each day. Florida is The next panellist, David Stewart, CEO of Florida-based Citrus the closest major load centre to the Gulf Stream, the most energy Energy, praised the efforts to connect US businesses with dense ocean current with a power potential equivalent to 4-8 European experience in addressing climate challenges. Further, he nuclear power plants (4-8 GWs). Dr Lemanski noted that ocean commended the enthusiasm shown by Florida’s businesses and thermal energy holds great potential for Florida’s large coastal the support provided by the state. His presentation, “Live Green population as it can help reduce energy consumption through cold Go Orange: Producing ethanol and co-products from citrus water based air conditioning and can be used to generate large residue,” detailed how Citrus Energy has been working on the volumes of potable water. development and commercialization of citrus waste from Florida’s citrus industry as a biomass feedstock for ethanol production. The Within 10 years, ocean energy could begin to be provided in company has also partnered with FPL Energy to build a $10 commercially meaningful amounts.. Within 20 years, ocean- million commercial scale citrus waste-ethanol plant. Mr Stewart generated electricity could significantly offset and help replace added that he envisioned the potential development of a dozen fossil generation. Moreover, ocean energy could enhance the state’s similar plants in Florida attached to factories that produce citrus energy independence by replacing imported hydrocarbons with juices. Eventually, citrus peel ethanol could replace 1 percent of Florida’s ocean current energy while establishing a vibrant new Florida’s fuel consumption. industry for Florida and the nation. Ocean energy has the potential to eliminate tens of millions of metric tons of CO2 gas production Recognizing that citrus waste ethanol is a niche rather than a per annum. With the UK firmly entrenched as a world leader in tidal wide-ranging solution, Mr Stewart reaffirmed the panel’s belief and wave power research, and in the spirit of partnership and that there are no silver bullets in solving our energy needs cooperation, Dr Lemanski led a delegation to the UK in late October through biofuels, and that all options are welcomed. Comparing 2007 to meet with UK counterparts. the current state of biofuels to the rise of the computer industry, Mr Stewart called for more commercially viable alternatives to Cindy Tindell, Executive Director of Development for FPL Energy, come to market. presented on why “We need more renewable energy.” With most of the state’s population living within 10 miles of the 1,200-mile Sam Shepherd, Director of Eco-Solids International, an Anglo- coastline, Florida faces a grave challenge to reduce its carbon American technology development company, discussed the footprint and develop renewable energies to offset global warming. prospects for algae oil. All algae plants are carbon neutral or While precipitous and rash actions would be extremely costly, there negative. Algae production captures CO2 and converts it into oil are technologies that are proven, tested, and reliable. Ms Tindell for bio-diesel feedstock. Further, algae can produce all the oil recounted FPL Group’s various investments in 18 states, ranging needs of the US in a non-arable area the size of Maryland. Whilst from wind to solar to renewable energies, such as Citrus Energy’s solid gains are being made, currently, the high cost of production ethanol plant. Currently, only a negligible percentage of ethanol is has prevented algae oil from entering the marketplace. used as transport fuel in Florida. Statewide adoption will only occur if and when consumers, along with industry and business suppliers, The next panel, Power Generation from Renewable Sources, demand it. explored broad trends in emerging technology areas such as marine, wind, photovoltaic, solar and clean coal energy. The panel was chaired by David Day, Director of Technology Licensing for the University of Florida. Mr Day announced that with the world’s fuel usage on the cusp of change, tomorrow’s challenges can be met with technology being developed today. In addition, he stressed that profitable renewable fuels can be produced from biomass. The University of Florida has a working profitable cellulosic plant in Japan that converts waste wood from deconstruction of homes into ethanol. 12 For more on biobutanol and the BP-DuPont partnership to Dr Edward Green, CEO of UK-based Green BioLogics, commercialize biobutanol, please refer to: Hargreaves, Steve. highlighted the attributes of biobutanol in his presentation “Re- “Better than ethanol.” CNNMoney.com. Apr. 3, 2007. commercialising the butanol fermentation.” Dr Green reaffirmed www.money.cnn.com/2007/04/02/news/economy/biobutanol/index. htm
  • 5. tax incentives for clean energy. A key concept is whether carbon- reducing credits can be considered “additional.” Additional, REPORT determines whether carbon credits are the main motivation behind a given project. The Executive Board in Kyoto also interpreted renewable energies as an additionality. Dr David Hunter, Director of US Policy for the International Emissions Trading Association, IETA presented on the prognosis of the American Congress adopting cap-and-trade legislation. Recognizing that GHG trading schemes provide the most efficient means of achieving environmental objectives, that long-term policy certainty is necessary to achieve cost-effective reductions, and that the broad use of offsets and linkages to a global carbon market are the best ways to contain costs, Dr Hunter expressed optimism that cap-and-trade legislation would eventually be approved by Congress. On December 6, 2007 the Senate Environmental and Citrus Energy’s Mark Stewart with FPL’s Publics Work committee passed America’s Climate Security Act of Cindy Tindell. 2007, which would create a cap-and-trade system for carbon emissions and mandate a 70 percent cut in GHG pollution by 2050 13. Michael O’Sullivan, Senior Vice President of FPL Group, discussed the current state of wind and solar projects in the US. The next panellist, Dr Alex Rau, Principal for the Climate Wedge and Whilst FPL Group understands that wind is not a silver bullet, Cheyne Carbon Fund, discussed the opportunities presented by investment in the sector has increased steadily, and particularly GHG emission reduction. Noting that a cap-and-trade scheme so during the 2007 calendar year. The 2007 US wind market is essentially creates property rights for emitting carbon into the expected to approach 4,000 MW capacity, equalling $6-8 billion atmosphere, Dr Rau mentioned that any investment and/or strategy in invested capital. Currently FPL Group’s wind investment total which leads to manufactured, verifiable reduction in GHG emissions nearly $6 billion. Despite all the investment gains, only 0.6 has an intrinsic value in the form of “carbon assets.” There are four percent of US energy comes from wind. general types of carbon assets: allowances; carbon credits; project finance; and technology. Allowances refer to the reductions in One of the fastest growing trends in the wind energy sector, overall emissions of a regulated entity under a carbon cap, whilst particularly in the Northwest and Midwest US, is rate-based credits refer to reductions from specific projects. wind, where utilities build wind farms and operate them in their own service territories without external contracting. Further, Mr Moreover, Dr Rau highlighted how the GHG credit market has O’Sullivan stated that solar energy does not currently enjoy the proven to be the main international driver for carbon reduction in popularity of wind energy because it is costlier and more time developing countries. The Clean Development Mechanism (CDM), consuming to initiate a given project. For instance, a modest an arrangement under the Kyoto Protocol, allows industrialised output 250 MW solar facility’s building cost can range from countries to invest in projects that reduce emissions in developing $700-900 million. Further, solar facilities require a far more countries as an alternative to more expensive emission reductions in complicated supply chain that can take years to consolidate. their own countries. Further, carbon reduction projects worldwide Nevertheless, FPL Group runs and operates a 310 MW solar have enjoyed a rapid growth in investment fund allocation, facility in the American Mojave Desert, which is the largest solar particularly since the 2005 inception of the EU Emissions Trading installation in the world. Mr O’Sullivan concluded his Scheme. presentation by reiterating FPL ’s mission to provide low-cost power in Florida and to make investments outside the state that Next, Ted Michaels, President of Integrated Waste Services make economic sense—citing this as one of the main reasons why presented on “Waste-to-energy: converting garbage into clean, FPL is not bullish on photovoltaic (PV), a solar power green power and reducing greenhouse gas emissions.” Currently, technology that uses solar cells to convert sunlight directly into most municipal waste is buried in landfills around the country. electricity. Whilst landfill gas can be captured and used to produce electricity, modern incineration technology is a more productive method. Mr Following Mr O’Sullivan’s discussion, the next panel addressed Michaels noted that for every ton of municipal waste, it is possible Greenhouse Gas Mitigation Strategies: Links to Policies and to generate 20kw hours of electricity from landfill, compared to Markets. The speakers offered insights into policy and regulatory 520kw hours from a waste energy plant. Further, one ton of waste frameworks and their effects as they spur innovation and burned through a waste energy plant saves one ton of C02 technology adoption. John Mackle, Chief Financial Officer for emissions. The waste disposal sector burns 29 million tons of trash MGM International, chaired the panel and discussed the merits of per annum. a cap-and-trade scheme that allows for market flexibilities, rather than the movement of capital through political means, to promote Mr Michaels highlighted how waste-to-energy (WTE) provides a clean air. Carbon emissions trading has emerged as a profitable net GHG benefit. WTE avoids harmful methane emissions from endeavour for companies, investors, and industries and is a landfills, avoids CO2 emissions from fossil fuel combustion, and necessary step for national and state governments as well as the avoids CO2 emissions from metals recycling. The only downside to wider international community. As a financial commodity, carbon WTE is that, compared to landfill waste disposal, plants are emissions represent a growing $30 million international market. Further, Mr Mackle noted how the Kyoto Protocol is a good example of a working market mechanism. A major issue is how such mechanisms will work in the US given current substantial 13 http://www.govtrack.us/congress/bill.xpd?bill=s110-2191
  • 6. Next, Matt Cole, partner with Northbay Equity Partners, presented REPORT on the characteristics of renewable energy projects that potentially attract equity investors. Mr Cole suggested that investors generally expensive to build. The cost is mitigated, however, once carbon favour banking projects with management teams with relevant emissions are factored in. industry experience and a strong track record in the industry. Further, equity investors look for companies with proprietary With 11 WTE plants, Florida has more than any other state. At competitive advantages, such as technology, that allow renewable present, there are 87 such plants total in the U.S. 30 percent of all energy to become more cost efficient. Further, Mr Cole noted the waste in the U.S. is recycled, 60 percent is sent to landfills, and 8 importance of a business plan that focuses on exit prospects by percent goes to waste energy. identifying the terminal value of the project. Ian Waller, Managing Director with FiveBarGate Consultants Regulatory risks, such tariffs and subsidies to local producers, are Limited, presented on the UK’s Renewables Transport Fuel common challenges for renewable energy in many markets. Building Obligations programme (RTFO). Recognizing that there are a business plan that is highly dependent on a regulatory-driven different cost profiles to saving carbon in different sectors, the UK profit stream, places the project at the whim of government volatility. Government has implemented individual sector-specific Mr Cole also warned against swings in commodity prices and mechanisms similar to cap-and-trade schemes. RTFO obliges fuel explained that biofuels are subject to double exposure as a result of suppliers to include a proportion of biofuels within their oil and energy prices and agricultural cycles. Nevertheless, many supplies. Certificates are then issued to suppliers below the cap, European and North American mega-fund firms have been willing to and can then be traded to those over the cap. Thus, a trading commit capital in partnership with local investors, for renewable market for transport fuel certificates is established. RTFO also energy projects in riskier markets such as Latin America. Per Mr requires suppliers to report on the carbon savings of the fuel as Cole’s recollection, around USD$800 million have been invested in well as the sustainability of the fuel. Mr Waller also discussed the Brazilian renewable energy projects in the past 18 months. likelihood that the UK will move away from target volume to carbon-based caps by 2010 14. In his presentation “Capitalizing on Green Energy Opportunities,” Rodrigo Cordova, President and CEO of Canada-Chile Investments The fourth panel presented on clean energy finance trends and Inc., provided tips on dealing with investors and developers of examined the characteristics of viable clean energy projects and renewable energy projects. Echoing the panel’s belief that future growth opportunities. Chris Walker, US Director for The establishing strong local relationships is of paramount importance Climate Group chaired the panel and highlighted Florida’s rapid for foreign investors and developers wishing to do business in ascension as a top player in the global clean energy economy. Mr Latin America, Mr Cordova highlighted how higher energy prices Walker opined that Florida has moved faster on the issue in the have promoted investment in new projects in the region. Whilst last six months than the EU has in the past seven years. Further, noting that today’s market is not keen on paying higher energy Mr Walker explained that, although investment in clean energy prices to preserve the environment, Mr Cordova explained that the has increased dramatically worldwide, swift acceleration, trend is changing, particularly in Latin America. The panel generally particularly from the financial community, is needed to meet the agreed that Latin America is some five years behind Europe and explosive demand and opportunities available today. Further North America in renewable energy development, and that alluding to the idea that the clean energy economy is a successor narrowing this gap is an area where companies from the UK and to the IT industry of the 1990s, Mr Walker showed the large Florida can capitalize, number of prominent Silicon Valley players who have invested in green technology companies. Presenting from an automaker’s perspective, Luis M. Kolster, Director of Public Policy for General Motors Latin America, Africa Alain Castro, Partner with Uruguay-based Energias Renovables and Middle East, discussed how GM is counting on ethanol to del Sur provided a practitioner’s perspective on investing and reduce dependence on foreign oil and improve the environment. In developing renewable energy projects in Latin America. Whilst “ E thanol Infrastructure, Partnering and Marketing Initiatives,” Mr the region was not as proactive as Europe in addressing clean Kolster explained that GM believes that E85 ethanol has the energy issues, investment has picked up recently. Mr Castro potential to reduce oil imports if 50 percent of all US vehicles were showcased his company’s investment in a close-loop ethanol and flex-fuel. To that end, GM has around 2.5 million flex-fuel vehicles electricity renewable energy plant in Uruguay that is likely to be on US roads and is planning to expand to 50 percent of total the first integrated renewable energy project in Latin America. The production by 2012. plant’s projected output is 150 million litres of ethanol and 10 MW of renewable energy. Although the auto industry has doubled fuel economy in the last 30 years, demand for oil has also increased yearly. GM believes that Mr Castro also presented on some of the challenges faced in widespread adoption of ethanol will reduce GHG emissions by 20 establishing a renewable energy project in the region. Calling for percent for grain-based ethanol and 80 percent for biomass ethanol a consistent set of laws that provide clear incentives for renewable that could be produced in Florida. Applying lessons learned from energy generators, accelerated permitting, and a simpler, faster Brazil’s progressive ethanol market, Mr Kolster explained that process for obtaining carbon credits, Mr Castro nevertheless successful producers need to have customer acceptance, competitive expressed great optimism for the sector-related equity investment pricing, and availability to consumers through infrastructure. in Latin America. Juan Pablo Bonilla, Coordinator for the InterAmerican Development 14 Per Mr Waller’s example: this shift would mean that Bank’s (IDB) Sustainable Energy and Climate Change Initiative companies would be issued certificates based on their carbon (SECCI) introduced the bank-wide contribution to meet Latin savings rather than by their use of a standard percentage of America’s and the Caribbean’s request for an expanded role in biofuels (i.e., 20% by 2020). sustainable energy projects and climate change issues. The region
  • 7. bringing products to market will create exciting opportunities for REPORT both investors and producers. faces increasing demand for energy, along with grave challenges Throughout the conference, the presenters expressed confidence in over the rising cost of energy and supply reliability. Mr Bonilla market forces. The conference demonstrated that market-sensible explained that SECCI intends to support the region in their quest developments are being made and that profitable investment to find economically and environmentally sound energy solutions opportunities exist. As demand for biofuels and clean energy by providing loans that stimulate and promote the development solutions continues to rise in the UK, Florida, and the world, UK and use of renewable energy sources, energy efficiency Trade & Investment, The Greater Miami Chamber of Commerce, and technologies and practices, carbon finance, and climate change Enterprise Florida will help encourage the market to strengthen and adoption strategies aimed at reducing the region’s climate mature and will continue to strive to identify best prospect vulnerability. Building on the panel’s position that regional solutions. governments may impede project development, one of SECCI’s priorities is to minimize policy barriers by integrating policy reform with targeted policy and project financing for market transformation. SECCI is funded through a specific IDB SECCI fund and a multi-donor SECCI fund, for which the UK is the first contributor. With vast experience in promoting South Florida’s role as the gateway to the Americas both nationally and internationally, Jorge L. Arrizurieta, Chair of the International Policy Group and Governmental Consultant at Akerman Senterfitt, presented on Florida’s role in the development of biofuels for the hemisphere and beyond. Stressing Florida’s geographic advantage and other competencies, as well as the solid UK-Florida commercial relationship, Mr Arrizurieta emphasized the state’s unique opportunity to be at the epicentre of biofuels research and development. Akerman-Senterfitt’s Jorge Arrizurieta. Close in proximity, culture, and commerce with countries in Latin America and the Caribbean, South Florida will play a pivotal role in meeting the region’s evolving energy needs. In that spirit, Mr Arrizurieta mentioned the struggle to ratify a US-Brazil Free Trade Agreement and the 54 cents-a-gallon tariff on the country’s ethanol exports to the US, as policies that need to give way to deeper cooperation. Whilst ethanol can play a key part in reducing demand for fossil fuels, the amount that would be needed to replace total consumption is far greater than Florida, or the country, can supply due to the economic reality of highest and best use of land. The challenge, Mr Arrizurieta explained, is for suppliers and consumers to organize and motivate an investment-friendly economic climate. Further, Mr Arrizurieta informed that, unless biofuels become a commodity, they will always be subject to external-factor volatilities. Unlocking the cellulosic code and