Energy analytics firm WegoWise buys Melon Power

By Derek Top

Published December 19, 2012

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More Stories On:Buildings, Energy Efficiency, More...Buildings, Energy Efficiency, Intelligent Buildings, VERGE

Finding tools and software for energy management can be challenging as building owners have to navigate an ever-growing market to track and analyze energy use in commercial buildings.
The latest vendor is WegoWise, which offers a Web-based platform to analyze water, gas and electricity data, mainly targeting multi-tenant apartment building owners. The Mass.-based company has acquired Melon Power, a startup that leverages Green Button and other utility data to help commercial buildings target Energy Star benchmarking.
The pairing makes sense as Melon Power, a recent winner at the U.S. Department of Energy's contest to build apps for energy efficiency, helps commercial building managers input their energy usage to benchmark against other buildings.
WegoWise CEO Andrew Chen says adding Melon Power's benchmarking analytics brings domain and technical expertise best suited for the commercial and industrial market.
"Our approach is focused on the value of data and capturing a lot of business intelligence from property management," says Chen. "It was a natural decision to combine our collective innovations and target the commercial market."
But making a dent in the ever-growing commercial market for energy software and services will be a challenge. Chen points to key differentiators in WegoWise's more "universal solution" -- the platform tracks water and natural gas data as well as electricity -- and the company's sizable database of 165 million square feet of property from more than 11,000 buildings.
WegoWise, which raised $1.9 million in Series A funding round last year, plans to make the commercial building offering available in the first quarter of 2013.

How smart buildings become radically efficient

By Casey Talon

Published December 19, 2012

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Tags:Buildings, Energy Efficiency, More...Buildings, Energy Efficiency, Facilities, Intelligent Buildings, Renewables, VERGE

At last month's VERGE conference, a clear message stood out: Data has the power to transform the future of sustainability.
Data, however, is only as transformative as the tools that make it actionable. If data is to define the future of sustainability, then the future of information technology will define how facilities become radically efficient (i.e. true smart buildings).
IDC has projected that social business, big data analytics, cloud computing and mobility are coming together in an unprecedented way to create solutions with entirely new business value. Indeed these pillars of future information technology will enable intelligent industries, solutions and, most importantly, innovation. These are the characteristics of intelligent IT tools that can transform facilities into smart buildings and directly align with the VERGE message of data-enabled market transformation.
Social Business: At the conference, Facebook's Bill Weihl spoke to the reality that energy efficiency and conservation efforts go largely unseen, and furthermore, he suggested social networks can be the mechanism to "surface largely invisible behavior to make it part of the social norm."
An afternoon panel on platforms for energy efficiency took this question to the test. It became apparent that social networking, whether on a peer-to-peer community or customized building management forum, can help decision-makers tackle the big questions that hinder smart building technology adoption. These forums can be the engine to accelerate the industry by showcasing case studies, best practices and the value proposition of these emerging technologies.
Big Data Analytics: The VERGE theme on "big data" fueled further discourse around the future of buildings and again highlighted a parallel with the future of IT. VERGE explored the opportunities for smart buildings as resources, looking to a future vision in which facilities have integrated mature energy management solutions and become effective nodes on the smart grid. This reality will require the utilization of big data analytics.
As suggested by Kyle McNamara from Verizon, demand response could be the "killer app" of the smart grid as utilities will rely on big data analytics to leverage buildings as energy resources. With the growth of automated demand response programs, smart buildings will provide dynamic response to utility feedback when high demand puts constraints on the grid. In this scenario, the utility must be able to process and utilize real-time data to call on the resources that will most effectively support grid stability and reliability.
Next page: Cloud computing as a VERGE enabler
Cloud Computing: The vast majority of the innovative energy management solutions showcased at the VERGE conference offer lower upfront costs aiming for early adoption because of their "software-as-a-service" design. The optimization of a smart building relies on adaptive building management directed by the insight from analytics and data management. As seen at Hack City, a hackathon hosted the weekend prior to the conference, third-party applications, such as those found in Johnson Controls' Panoptix app marketplace, demonstrate the importance of cloud computing for the future of smart buildings.
Mobility: The fact that facilities managers are widely offline is one of those central personnel challenges hindering the development of smart buildings. If the industry is to succeed in transforming facilities into smart buildings, not only will facilities managers need to build skillsets around using information technology but vendors will need to bring mobility into their solution design.
An optimized smart building will have not only a smaller environmental footprint but the tools to enable sustainability executives to monitor and verify the impact of their business objectives in a way that can be economically quantified. This ability to translate actions into dollars makes the sustainability message resonate far beyond corporate marketing and communication and up the C-Suite to the topline enterprise decision-makers. This new level of transparency and measurability will reshape the future of sustainability and generate the radical efficiency envisioned by VERGE.
This article is a brief overview of an analysis published to IDC Energy Insights' Smart Building Strategies Program. More information about this program and report can be found here.

On-Site Windpower Generates Electricity for Manufacturer

December 18, 2012 by Energy Manager Today Staff

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SC Johnson, a maker of household cleaning products, today activated two new wind turbines at its Waxdale manufacturing facility in Mt. Pleasant, Wis.
The wind turbines will produce about 8 million kWh of electricity annually. Combined with two cogeneration turbines that have been in place since the mid-2000s, the facility is now able to produce an average of 100 percent of its electrical energy onsite.
The 415-foot wind turbines at Waxdale support 135-foot-long blades. Each turbine features a permanent magnet, gearless generator which means less maintenance and higher energy yields than the more traditional gearbox-type system.
In the mid-2000s, two cogeneration systems were put in place that use waste methane gas from a nearby public landfill and clean burning natural gas to generate 85 percent of the facility’s electrical energy. The new wind turbines will provide the remaining 15 percent.
A 262-foot-tall wind turbine in the Netherlands helps power the SC Johnson European manufacturing facility, in addition to SWIFT mini turbines at its Racine, Wis., headquarters and Lowell, Ark., sales office.
Since 2000, SC Johnson has worked to cut greenhouse gas emissions by more than 26 percent. In Bay City, Michigan, nearly half of the electricity needed to operate the SC Johnson plant now comes from offsite wind power.
At the SC Johnson plant in Medan, Indonesia, waste palm shells are used as a replacement for diesel fuel. It transfers a waste product back into the value chain with minimal impact and has reduced local diesel fuel use by 80 percent.
In May 2012, the company launched a new biofuel initiative at its factory in Surabaya, Indonesia using waste husks from rice grains as a fuel source. Consuming rice husks rather than diesel fuel, the Surabaya boiler is expected to generate about 6,000,000 kcal per hour to heat water used in mosquito coil production.
Several solar projects are helping provide hot water heating for the company’s facility in Shanghai. One provides hot water for food service and other office needs. Solar- heated waste water from the facility’s steam piping network aids aerosol production.

AN ANGLE ON SOLAR AND WIND VARIABILITY

AN ANGLE ON SOLAR AND WIND VARIABILITY
Victor Diakov

It wasn’t that long ago that solar and wind energy were perceived as exotic supplements to our usual electricity consumption. Yet NREL (National Renewable Energy Lab) research shows that we can realistically generate 20 percent (U.S. DOE, 2008) to 80 percent (Hand et al., 2012) of electricity from renewable sources — mostly wind and solar. The computer models simulating solar and wind variability effects on balancing the electric load with generation are extremely complex. For example, to account for hourly variations in wind generation, literally millions of inputs are used. My colleagues at NREL and I have developed an approach that simplifies the complexity.

The concept involves vectors representing data arrays and is supported by computer model results. The quadratic1 load-matching model was proposed by W. Short (Short and Diakov, 2012). Our work focuses on generic features of load matching with wind and solar resources, and is based on the hour-to-hour variations of demand and generation at tens of thousands of potential wind and solar sites throughout the year in the United States.

As the share of wind- and solar-generated power increases, flexible generation2 will have to cover the difference between variable load and the aggregate “traditional” baseload plus wind and solar generation. We can reduce our reliance on flexible generation by taking advantage of geographic diversity for wind and solar resources3 (NERC 2009;Milligan et al. 2009).

As our calculations show, aggregating wind and photovoltaic (PV) sites reduces the resource variability from 45-50 degrees to about 20 degrees. If we represent the load, average PV generation and average wind generation as vectors, we find that based on the angle between the aggregated generation profile and the load, the required amount of dispatchable generation is no more than 20 percent of the total electric load. Considering that these numbers (20 degrees and 20 percent) hold in our study for both the Western Electricity Coordinating Council (WECC) region and the United States as a whole, it is likely that they are similar for other geographic regions as well. Taking transmission limitations into consideration (Diakov, Short, Gilchrist, 2012) doesn’t change the amount of PV and wind by much: For WECC, the existing large-scale transmission limitations reduce the amount of PV and wind from 80 percent to 70 percent of the electric load.

APPROACH
Our model (Short and Diakov, 2012) answers the following question: What is the best match to U.S. loads that could be achieved with wind power and photovoltaics? (Specifically, we examined the wind, solar resources and loads in the United States as a whole and in the area of the WECC. Our primary decision variables are where and how much resource Wi (wind and/or photovoltaic) should be built at each wind and PV site i. Over all 8,760 hours in a year, the model minimizes the sum of the squared difference between loads (lt) and the generation from the selected wind and solar sites:

The sum of all the positive ?t is the total amount of generation required from dispatchable generators. Similarly, the sum of the negative ?t is the total amount of all energy curtailed or sent to storage. The wind and solar generation are traded off solely on the basis of how well they meet load, not their relative economics.

INPUT DATA
For the wind resource, we are using NREL data developed for the Western Wind and Solar Integration Study (WWSIS) (Potter et al. 2008) and the Eastern Wind Integration and Transmission Study (EnerNex 2011). The data include three years of generation information, 2004–2006, for 32,000 potential wind sites in the western United States and about 6,000 potential wind sites in the eastern United States.

For the photovoltaic resource, we are using hourly insolation data for the same years for 949 U.S. sites found in the National Solar Radiation Data Base (Wilcox et al. 2007) and converting that to power generation from a south-oriented PV panel with a 10-degree tilt using the PVWatts calculator (nrel.gov/rredc/pvwatts). To prevent unreasonable overuse of the sites that have generation profiles best matching the load profiles, we limited the PV capacity at any single site to 1 gigawatt (GW).

We aggregated the load data from Ventyx’s Velocity Suite product, which is based on hourly historical demand for the same years from FERC Form 714 Part III Schedule 2.

It is convenient to represent hourly data (PV, wind generation or load) for the year as vectors, each vector having 8,760 components (representing hours in the year). Three vectors — load, average PV generation4 and average wind generation — are used to build a 3-D representation of input data (see figure 1, page 31). The three axes on figure 1 are i) the load, ii) the combination of average PV and load (the combination is chosen in such a way as to make the second axis perpendicular to the first one), and iii) the combination of average wind generation with the other two axes (again, the third axis is perpendicular to the other two).

MODEL RESULTS
To demonstrate the effect of scaling up wind and PV resources, we compare three loadmatching cases: A) the WECC load with only one wind and one PV generation profile, i.e., no geographic diversity; B) the WECC load with available WECC-area wind and PV resources; and C) the full U.S. load with available U.S. wind and PV resources. None of the cases demonstrates exact load matching, which tells us that in order to balance the load, the wind and PV resources have to be at least partially backed up by flexible generators and/or energy storage. As evident in figure 2a, the renewable sources overproduce significantly in early spring, before experiencing a large production shortfall during late summer months.

The table on this page compares these three cases. For case C (continental United States), the model built 950 GW of wind capacity and 580 GW of PV. We would need another 472 GW of dispatchable capacity to meet all loads. To ensure that no energy was wasted, we’d also need 461 GW of storage charging capacity. The shortfalls occur for 5,387 hrs and would need to be made up by 723 terawatt-hours (TWh) from dispatchables. Overproduction occurs in 3,372 hours and totals 324 TWh.

The data from the table show that the overall shortfall for the year consistently exceeds the total overproduction, and more so for a poor load-matching case A. This property of the quadratic load matching allows for a straightforward geometric explanation. The hourly load (or generation) profile for the year is considered as a vector in an 8,760-dimensional space (figure 2b). Expression 1 of the formula on page 31 essentially minimizes the distance between the tip of the wind-plus-PV generation vector and the tip of the given load vector.

Let’s consider first case A with just one wind and one PV site, with no constraints on how much capacity can be built on each of them. Between building wind (43.6-degree angle with load) and PV (52.2-degree angle with load) capacity, the model chooses the combination that minimizes the angle between combined (wind plus PV) production and load (37.2 degrees), figure 3a. Figure 3b schematically shows both the load and the combined production (line “one PV and one wind site”). The distance between vector tips is minimal when vector ? closing the gap is perpendicular to the generation vector. A larger angle between the generation and the load (which means a worse load match) results in a larger overall shortfall (figure 3b vs. 3c).

Based on the angle between load and the combined wind/PV generation (note that this is just one number), one can determine the length of the mismatch ? and estimate the overall shortfall as fractions of yearly load. Thus, this angle is an important characteristic of renewable generation.

As seen in the table on page 32, combining numerous wind and PV resources from the WECC area significantly decreases the variability of the aggregated generation profile. Respectively, the angle between the latter and the load (load^production) is reduced to 20.5 degrees. Broadening the area from WECC to the entire continental United States results in a slightly smaller “variability” angle, 18.9 degrees. The angle between generation and ? is exactly 90 degrees for the case A in the table. The same angle for case B only approximately equals 90 degrees, because the generation capacity of the sites involved is limited. The fact that this angle is close to 90 degrees demonstrates that the vector approach represents a valid approximation. Further, based on close load^production angle values, only marginal improvement in load matching is possible when expanding the geographic region from WECC to the entire United States.

Figure 3d helps illustrate how the variability angle characterizes the balance between load and its best matching variable generation. The length of the load vector serves as the unit length. As long as the angle between and generation vectors is close to 90 degrees, the length of is given by sin(a) (equals 0.35 for a=20 degrees), and the overall shortfall is approximately sin2(a) (equals 0.12 for a=20 degrees). Notably, the width of the distribution of is also determined by the variability angle a, as sin(a). cos(a) (equals 0.32 for a =20 degrees). Assuming a normal distribution of (the result does not change much for a bi-modal distribution) with standard deviation 0.32 and a 0.12 average, gives us a total shortfall of 19 percent of the total load and a surplus of 8 percent of the load (766 TWh shortfall and 305 TWh surplus for the continental United States — these are remarkably close to the numbers obtained from the detailed model and given above in connection with the case C in the table).

Sustainability issues among top 10 global concerns

By Sunmin Kim

Published November 15, 2012

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More Stories On:Climate, Energy & Climate, More...Climate, Energy & Climate, Resource Efficiency

The teetering Eurozone and the unstable global economy are the biggest issues facing the world today, said business, academic and governmental leaders this week.
Following close behind, however, was resource scarcity, which ranked No. 4 among the top 10 global trends leaders named in the Global Agenda Survey, run by the World Economic Forum Network of Global Agenda Councils, and released Tuesday. Although the list was mostly dominated by political and economic concerns, some key sustainability issues were at the top of leaders’ minds.
Climate change also made it into the top 10, although the timing of the survey – which was taken before Hurricane Sandy hit New York City – may have kept climate issues from climbing higher on the list, which captures the opinions, insights and expertise of the 900 global experts here in Dubai for the Summit on the Global Agenda.
Resource scarcity is the most controversial topic.

As the embedded excerpt above shows (you can also view it directly on the website), resource scarcity is both one of the most underestimated and overestimated issues today.
These two seemingly paradoxical observations suggest two messages. The first is that resource scarcity in conjunction with an ever-growing population is still proving to be a major unsolved global challenge that should require more attention. Second, there is another group who may still be skeptical of this threat, perhaps in line with climate change skeptics, who continue to make up a significant part of the population in several countries, namely the U.S., Britain and Japan.
Following the trend from Rio+20, NGOs and the private sector are most worried about resource scarcity. The fact that respondents overwhelmingly identified the top consequence of such scarcity as “social and/or political unrest” underlies the assumption that resource scarcity will primarily hit the developing nations.

Capstone Microturbines Power Through Hurricane Sandy

Capstone Microturbines Power Through Hurricane Sandy
CHATSWORTH, Calif., Nov. 2, 2012 (GLOBE NEWSWIRE) -- Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST), the world's leading clean technology manufacturer of microturbine energy systems, announced today that its microturbine systems continued to operate during and after Hurricane Sandy slammed into the eastern seaboard this week.
News agencies reported on Tuesday morning that a peak total of over eight million electrical utility customers were in the dark. The Northeast was hardest hit, but significant outages occurred in northern Ohio, and sporadic outages occurred as far away as northwest Indiana and northern Georgia. In some regions, power failures were nearly total. Governor Andrew Cuomo said that 90% of Long Island families were without power Tuesday. One of New Jersey's utilities reported that 86% of its 1.1 million customers were without power Tuesday morning, and that figure was still 86% early Wednesday.
On the contrary, all indications that Capstone Turbine has received from its customers and local distribution partners are that installed Capstone systems continued to operate seamlessly during and after the worst storm to strike the East Coast in decades. Capstone applications that weathered the storm ranged from shale gas installations to luxury hotels, office buildings, data centers, health care facilities and industrial customers from Virginia to New Jersey and New York to Massachusetts.
Some installations played critical roles during the crisis that downed power lines and left millions of people without power for days. Salem Community College in Salem County, New Jersey is a Red Cross Disaster Relief Shelter. The site consists of three Capstone C65 microturbines that provide heating, cooling and emergency power to the critical facility. During Hurricane Sandy, the shelter was fully operational as it was continuously powered and heated by the on-site microturbines.
Capstone Mid-Atlantic distributor E-Finity Distributed Generation, LLC was able to continue its critical operations during Hurricane Sandy despite losing utility power for close to 24 hours utilizing a Capstone C65 liquid fuel turbine. The unit was able to maintain E-Finity's remote monitoring system and data center to help dozens of customers monitor and control their Capstone systems during the storm.
E-Finity was able to continue to support Capstone users like Solers, Inc., an innovative information technology software solutions provider for the U.S. government in Arlington, Virginia whose technical experts partner with the Department of Defense, intelligence community and other federal agencies. The site utilizes five C65 Secure Power turbines that provide dedicated power to its data center. "Despite multiple power outages at the facility, the data center never lost power and was able to seamlessly continue its critical business mission," said Jeff Beiter, E-Finity Distributed Generation's Managing Partner.
It was the same story in the oil and gas shale plays where Capstone microturbines have been installed as emergency power or standalone power for various natural gas production and transmission facilities throughout the Marcellus and Utica Shale Plays. With the impending storm, several critical gas utility sites switched away from their local utility feed to their Capstone microturbines to ride out the storm, while other sites, where Capstone microturbines are their sole source of electric power, were left un-phased during the event. "The reliability of Capstone microturbines prevented these facilities from being taken offline and allowed the gas suppliers to continue to serve their customers uninterrupted throughout the height of the storm," added Beiter.
Cory Glick, President of Reliable Secure Power Systems (RSP Systems), Capstone's distributor for New York and Connecticut, indicated that all Capstone units in his area were performing as designed with several customers continuing to conduct business despite experiencing heavy storm damage. "One very critical site that was hit hard by the storm was a data center on West 17th Street in New York City known as Public Interest. Public Interest has a C65 dual mode microturbine that worked perfectly by seamlessly picking up the data center load when the utility suddenly blacked out. The servers never went down, and the site is still running today thanks to the Capstone turbine. Another very critical site that performed flawlessly was the Christian Health Care Center located in Wyckoff, New Jersey, which is a 292-bed assisted living facility that never lost power thanks to the onsite Capstone product," added Glick.
"RSP Systems' Capstone business had been gaining momentum in recent months before this week's storm, with several new installations under construction for marquee customers like DHL and the Palace Hotel in midtown Manhattan," stated Glick. I fully anticipate that this terrible storm will only add to customers' interest in onsite distributed generation as a way to not only save on their annual energy bills but also to protect them against prolonged utility outages like we are seeing right now as many people in the area will be without power for a week or more," added Glick.
Joel R. Wilson, CEO of OP Energy Systems, a company that currently owns and operates two Capstone installations for Class A office buildings in Manhattan, reported that both sites were fully operational and without incident. "The Capstone microturbine product continues to be our most reliable distributed generation solution. We have experience with both reciprocating engines and other microturbine brands over the years", said Wilson. "In fact, we recently closed another round of growth capital and are in the process of replacing our older less reliable distributed generation equipment with new Capstone product. OP Energy is currently in the process of installing nine C65s at a 37-story office building located at 110 E. 59th Street and five C200s at a 41-story office building located 666 5th Avenue," added Wilson.
"Users around the world continue to adopt Capstone microturbines because they want the high reliability and low emission benefits of our distributed generation products," said Darren Jamison, Capstone President and Chief Executive Officer. "Hurricane Sandy is a tragedy that has had a terrible loss of life and property, but I'm proud of the performance of our Capstone product that successfully kept our customers in business during this crisis. It's unfortunate that in many cases it takes a major event like this to get people to start to think differently about how to reliably deliver their energy needs and change traditional utility buying habits," said Jamison.
"This storm is a great example why buying energy the way your parents did and your grandparents did may not be the best solution from both a cost and reliability perspective as customers who have embraced on-site distributed generation technologies like microturbines were much better prepared to weather this storm than customers that continue to rely solely on traditional centralized power plants, sub-stations and poles and wires," added Jamison.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST) is the world's leading producer of low-emission microturbine systems, and was the first to market commercially viable microturbine energy products. Capstone Turbine has shipped over 6,500 Capstone MicroTurbine(R) systems to customers worldwide. These award-winning systems have logged millions of documented runtime operating hours. Capstone Turbine is a member of the U.S. Environmental Protection Agency's Combined Heat and Power Partnership, which is committed to improving the efficiency of the nation's energy infrastructure and reducing emissions of pollutants and greenhouse gases. A UL-Certified ISO 9001:2008 and ISO 14001:2004 certified company, Capstone is headquartered in the Los Angeles area with sales and/or service centers in the New York Metro Area, Mexico City, Nottingham, Shanghai and Singapore.
The Capstone Turbine Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6212
This press release contains "forward-looking statements," as that term is used in the federal securities laws, about the reliability of our products, the performance of our products in crisis situations, reduced costs and increased sales of our products. Forward-looking statements may be identified by words such as "expects," "objective," "intend," "targeted," "plan" and similar phrases. These forward-looking statements are subject to numerous assumptions, risks and uncertainties described in Capstone's filings with the Securities and Exchange Commission that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. Capstone cautions readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Capstone undertakes no obligation, and specifically disclaims any obligation, to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
"Capstone" and "Capstone MicroTurbine" are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners.
CONTACT: Capstone Turbine Corporation
         Investor and investment media inquiries:
         818-407-3628
         ir@capstoneturbine.com
Capstone Turbine Corporation

Policy Shifts Signal Growth Ahead for Advanced Biofuels

Mackinnon Lawrence, Contributor

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This has been a tough year for the U.S. biofuels industry: drought curtailed corn starch ethanol production and investment in the industry shrank to its lowest level in nearly a decade. Headed into 2013, though, industry momentum appears to be regaining steam. Led by advanced biofuels, the potential for expanding biofuels production has improved dramatically as Washington offers clarity on key policy issues.
Last week, in a vote on partisan lines, the U.S. Senate extended support for the military’s efforts to scale up advanced biofuels production. As reported in Biofuels Digest, it approved an amendment offered by Senator Kay Hagan of North Carolina to repeal a section of the annual Defense appropriations bill that would have prohibited “the Secretary of Defense or any other official from the Department of Defense (DoD) from entering into a contract to plan, design, refurbish, or construct a biofuels refinery or any other facility or infrastructure used to refine biofuels unless such planning, design, refurbishment, or construction is specifically authorized by law.”
Over the past year, the U.S. military has emerged as a key torchbearer leading the commercialization of advanced biofuels. Spearheaded by the Navy, which signed a Memorandum of Understanding (MOU) with the U.S. Department of Agriculture (USDA) and Department of Energy (DOE) to develop cost-competitive advanced biofuels, the DoD has been a lone bright spot for an industry that has suffered from press blowback and investor retrenchment in recent years.
Only $84 Billion to Go
Prior to the Hagan amendment, the Senate approved another amendment, offered by Senator Mark Udall of Colorado, to repeal section 313 of the annual Defense appropriations bill. Offered by Republican Senator James Inhofe of Oklahoma, Section 313 would have prohibited the DoD from procuring alternative fuels if they cost more than their conventional counterparts. The section was introduced in response to the U.S. Navy’s highly criticized purchase of advanced biofuels from firms like Solazyme and Dynamic Fuels for its “Great Green Fleet” exercises off the coast of Hawaii, at an estimated price-tag of $15 per gallon.
These bills are expected to facilitate public-private partnerships and funnel much-needed capital to support advanced biorefinery construction within the United States. In our Industrial Biorefineries report, Pike Research forecasts that at least 13 billion gallons of advanced biorefinery production capacity will come online over the next decade in the United States. Although that falls short of the 21 billion gallons of advanced biofuels carved out under the EPA’s Renewable Fuel Standard (RFS), more than $60 billion will be invested over that same period.
With the minimum cost of scale-up to meet the advanced biofuel production mandate estimated at $84 billion, the industry still has significant ground to make up. Although continued federal support will help assuage investor fears, uncertainties around feedstock supply and production profitability persist, translating into high levels of risk for investors.
Advanced biofuels, which address these concerns at least in part, have enjoyed a rising tide of policy support in recent months from Washington. In August, Congress allocated $170 million to support the development of military biofuels and other defense initiatives, voted to extend key tax credits for advanced biofuel producers, and granted algae producers tax credit parity with other feedstock pathways. Meanwhile, the recent commissioning of first-of-kind facilities from advanced biofuel producers KiOR and INEOS Bio are strong indicators of a maturing cellulosic biofuels industry.