BNP Paribas Fortis North American energy monthly - Virtual Metals

14 | BNP Paribas Fortis North American energy monthly | October 2009 BNP Paribas Fortis/VM Group
Power
News
• Sept 28 th : Canadian Hydro bought the rights to develop a 4,400 MW offshore
windfarm in Lake Ontario from Wasatch Wind. No terms were disclosed.
• Sept 17 th : BrightSource Energy said it has abandoned plans to build a
controversial solar power plant in the eastern Mojave Desert.
• Sept 17 th : Sempra Energy bought a half share in BP’s 200 MW Fowler
Ridge 2 windfarm in Indiana.
Analysis
• EPA gathers its carbon data
From next New Year’s Day, 10,000 industrial facilities in the US will have to
collect data on greenhouse gas emissions and submit the information to the
Environmental Protection Agency (EPA). “This is a major step forward in our
effort to address the greenhouse gases polluting our skies,” said EPA
Administrator Lisa Jackson. The new program, details of which were announced
in late September, will cover about 85% of the emission sources in the US and
will be an important stepping stone in creating a nationwide verifiable databank
to combat climate change. The data will also allow individual businesses to track
their own emissions, compare them with similar facilities elsewhere in the
country, and provide guidance on identifying cost-effective ways to reduce
future emissions.
Market manipulation is one of those things that can be easy to suspect but
difficult to prove. Well, the Federal Energy Regulatory Commission (FERC)
went out of its way in mid-September to dispel any doubt that it would pursue
parties involved in the practice when it approved a record $30m settlement
against Energy Transfer Partners (ETP) over allegations that it had manipulated
physical wholesale natural gas prices at Houston Ship Channel over a two-year
period starting in 2003. Under the settlement, ETP will pay a $5m civil penalty
and establish a $25m fund to pay alleged unjust profits to entities that file claims
within a 60-day period after publication in the Federal Register. Any funds left
over after that period will be paid to the US Treasury. Sounding like a vintage
TV crime-fighter, Norman Bay, director of FERC's Office of Enforcement, said
his agency would “investigate, punish and deter manipulation of the energy
markets.”
Since its inception in 2007, the annual GridWeek conference on the future of the
smartgrid has become an essential venue for policymakers, regulators and
utilities alike. This year’s gathering was no exception with Energy Secretary
Steven Chu giving the keynote speech and announcing $144m in government
funding for training a new generation of grid workers. Of the total, $40m will be
available to develop training programs devised by utilities, universities, trade
schools and labor organizations, with a further $60m set aside to actually train
new employees and retrain existing staff about the use of the smartgrid. On top
of this, an additional $44m has been earmarked for training within state public
utility commissions. The government message to this conference was that the
smartgrid had already become an essential part of federal policy aspirations and
that it was prepared to invest heavily to bring it about. With 1,500 delegates
from 22 countries, the conference looked at early smartgrid applications in
Texas, Colorado and California, leaving few doubts that the US has already built
up an enviable lead in this new grid development.
Outlook
The upturn in the economy and the improved prospects of the power sector
are evident if you want to look for them. With the federal government
prepared to pump money into power infrastructure, private investors will
inevitably follow. Next year will prove to be an important watershed.