What the Federal ITC Extension Means for the US Energy Storage Market

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Some analysts expect energy storage deployments to reach ~1.7 GWh by 2020

Some analysts expect energy storage deployments to reach ~1.7 GWh by 2020

GTM Research expects an additional half a gigawatt of storage paired with renewables between 2016 and 2020. Though storage alone doesn’t qualify for the federal Incentive Tax Credit (ITC), if installed with solar PV or wind, energy storage systems historically have been able to claim tax credits, as long as they meet certain requirements. Both the Department of the Treasury and the IRS are deliberating over whether storage should automatically qualify for the ITC. If renewables-paired storage does become explicitly eligible, there is an even more significant upside for projected deployment in the coming years.

Read: What the Federal ITC Extension Means for the US Energy Storage Market

Big oil to cut investment again in 2016

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Trailing 5-year change in percent value of WTI crude (orange) and the S&P Oil & Gas Exploration and Production Index.

(Bloomberg) Trailing 5-year change in percent value of WTI crude (orange) and the S&P Oil & Gas Exploration and Production Index (blue).

With crude prices at 11-year lows, the world’s biggest oil and gas producers are facing their longest period of investment cuts in decades, but are expected to borrow more to preserve the dividends demanded by investors.

Over $1 trillion in shareholder value has vaporated from the balance sheets of some of the largest oil and gas companies in the last 18 months. See spreadsheet compiled on 3 Jan 2016 of Equity Erosion in Oil & Gas Sector for lower-bound estimate based on market data from companies doing business in Houston, TX.

Read more: http://www.reuters.com/article/us-oil-companies-investments-idUSKBN0UH0AB20160103

Equity erosion has cost Houston energy companies $448 billion in the last 6 months

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Over $448 billion has eroded from the market capitalization of energy companies doing business in Houston, TX, as falling oil prices have eaten into shareholder value over the last 6 months.

A survey of large oil & gas companies with headquarters and major offices in Houston, TX–the “Energy Capital of the World”–reveals the impact of falling crude oil prices on equity markets. In the last 6 months, over $USD 448 billion in shareholder value has been wiped off the balance sheets of these businesses.[1] Given the Energy Capital is home to over 5,000 such carbon fuel companies, this equity erosion figure is a conservative estimate of the total financial impact that could ripple through the local Houston economy within the coming months.

These estimates come just days after senior research economists at the the Federal Reserve Bank of Dallas projected over 249,700 jobs are at stake in eight US states, of which 128,000 are at risk of disappearing in Texas alone.[2]

[1] Data obtained from Google Finance (day-end quotes: 30 December 2014)

[2] “Oil crunch could cost Texas 128,000 jobs, Fed model shows”. http://fuelfix.com/blog/2014/12/18/oil-crunch-could-cost-texas-128000-jobs-fed-model-shows/

Correction: Article understated equity erosion figure. Using P*C2/(1+P) = C2 – C1 = D method, equity erosion figure was revised from $315 billion to $448 billion (where P denotes percent change in value between -1.00 and 1.00, C2 denotes market cap on Dec 2014, and D represents the change or delta in market cap since market cap C1 recorded in Jul 2015)

Finis enim prope est

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What we’re seeing in the Middle East / North Africa today and of recent is likely a glimpse into the future of human history. Our fate: hegemony over survival?

drought-fertile-crescent

The era [of civilization] opened almost 10,000 years ago in the Fertile Crescent, stretching from the lands of the Tigris and Euphrates, through Phoenicia on the eastern coast of the Mediterranean to the Nile Valley, and from there to Greece and beyond. What is happening in this region provides painful lessons on the depths to which the species can descend.

http://billmoyers.com/2014/09/09/noam-chomsky-are-we-approaching-the-end-of-human-history/

 

The new “smart grid” is now the “internet of things”

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The “internet of things” surpassed the “smart grid” in December 2013 as the more popular search phrase. That following month, in January 2014, Google coincidentally announced their acquisition of Nest Labs for $3.2 billion in cash. Now let’s see what major deals will accompany GE’s “industrial internet”–if it ever takes off.

A Summer in India

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Hundreds of millions of people across India were left without power on Tuesday in one of the world's worst blackouts, trapping miners, stranding train travelers and plunging hospitals into darkness when grids collapsed for the second time in two days.

India’s electricity distribution and transmission is mostly state run, with private companies operating in Delhi, Mumbai and Kolkata. Less than a quarter of generation is private nationwide.

The Great Green Fuel Debate

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A member of the U.S. Navy watches the USS Roosevelt as it passes the Statue of Liberty in New York Harbor, while arriving for the 25th annual Fleet Week celebration in New York, May 23, 2012. Credit: Reuters/Brendan McDermid

The U.S. Navy angered Republicans by spending $26 a gallon for biofuels for this week’s Great Green Fleet demonstration, but the Air Force received little attention when it paid twice as much per gallon to test synthetic jet fuel last month.

Despite all the heat Navy Secretary Ray Mabus has been receiving from the more fiscally austere members of Congress, I think it would be insightful to remind ourselves of the high costs and risks the federal government placed on building out the interstate highway system or the infrastructure for the Internet and the social/economic benefits we’ve accumulated since they days when a dial-up connection once cost $35,000 a month.

It’s a worthwhile investment.

The Global Food Crisis: more evidence

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The research coming from the New England Complex Systems Institute (NECSI) this month reflects previous concerns I’ve made in earlier articles[1],[2],[3],[4],[5] about the relationships of biofuels and commodities market speculation with food prices and the mechanisms driving these prices upward. Although the evidence doesn’t unequivocally confirm these concerns, this NECSI research paper is a stepping stone toward a general theory of what I’d like to call “ecodynamics”: namely, the study of the interactions of capital flows with natural resources. The abstract of the paper summarizes the fundamental argumentative thread which is worthy of peer-reviewed investigation:

In a previous paper published in September 2011, we constructed for the first time a dynamic model that quantitatively agreed with food prices. Specifically, the model fi t the FAO Food Price Index time series from January 2004 to March 2011, inclusive. The results showed that the dominant causes of price increases during this period were investor speculation and ethanol conversion.

Timothy A. Wise (director of the Research and Policy Program at the Global Development and Environment Institute — Tufts University) posted this very informative article on his “Triple Crisis” weblog (6 March 2012) regarding the NECSI data and food price model. A year earlier, he wrote another succinct piece on food price volatility that initially captured my interest and led me to the NECSI paper mentioned above.

A Possible PhD Economics Thesis

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United Nations Food and Agricultural Organization's world food price index from 1990-2012 (accessed 13 March 2012). Observe the coincidence of real and nominal food price peaks with civil unrest.

I used to be fascinated with economics until I started learning about banking and reserve ratios, and that’s when I started to fall asleep in my high school classes. But if I could teach economics my way, I would have started off drawing a production possibilities curve (one of the first graphs we learned) using wheat on the horizontal axis and guns on the vertical axis. And instead of leading my students down an a priori path that preaches free market capitalism, I’d introduce them to worlds where free market capitalism has failed and life has indeed become a matter of choosing between feeding your children or taking up arms.

This is the dire economic reality for the growing number of people living on the economic margins, and I’m concerned about what lurks around the corner of our future. If I’m lucky enough to one day get into a top-notch graduate economics program, I would dedicate all my time and energy looking into relationships between access to healthy food and basic resources and the incidence of civil unrest. There is a more general theory that guides this work however: income inequality has the potential to exacerbate pre-existing economic conditions. This chart that I pulled from the UN FAO makes my point on a very cursory level.

Food and water, to me, are sacred. And so it hurts me on a very profound level knowing there are people in this world being deprived of such basic sacred rights due to S/E/P machinations. Hopefully, if my prayers are answered, I’ll one day have a platform to speak up on these issues in order to raise greater awareness.

Closing the Gap: Part 3

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Rough Cut: Closing the Gap Intro 1 from Michael Mira on Vimeo.

My friend put together the rough cut of what we envisioned for our project. This is loosely based on the conversation in Closing the Gap: Part II and an ongoing conversation highlighted in his blog 40C. The end goal is to do on-the-ground work in countries where our families originated while spreading awareness into the root social, economic, and political inequalities that cause such plights as highlighted in our conversations.