/PRNewswire/ -- Analysis of public data by Forisk Consulting indicates a 67% success rate for announced wood-using bioenergy projects in the continental US. Projects with the highest probability of success share two requirements. One, they employ currently viable and scalable technology. Two, they demonstrate verifiable progress in planning and executing bioenergy project development. As of July 29, 2010, Forisk screened 363 announced and operating wood-consuming bioenergy projects. These projects represent potential, incremental wood use of 121 million green tons per year by 2020. Based on Forisk's screening methodology, projects representing only 68.4 million green tons per year pass basic viability screening.
"Why is this important? Because assessments of emerging wood bioenergy markets in the US that assume all projects succeed overstate likely wood use for energy by nearly 77%," says Brooks Mendell, President of Forisk. Clearly, tracking and screening bioenergy projects challenge those interested in renewable energy investments, economic development, and timberland markets. Wood Bioenergy US and Wood Bioenergy shapefiles for GIS mapping applications, two new subscription products from Forisk, solve this challenge.
"In Wood Bioenergy US, we continuously confirm, in a systematic way, that each project is moving forward and getting closer to being operational," says Amanda Lang, Managing Editor. The current issue indicates that bioenergy projects in the South comprise the largest volume of potential wood use of the three US regions, but the lowest pass rate through Forisk's screening. Southern projects representing 24 million tons - a 40% pass rate based on volume - appear viable based on current analysis. Alternately, the US North - which includes Appalachia, the Lake States and the Northeast - has the largest number, with 153 projects announced.
Wood Bioenergy US is published ten times per year. For more information, visit www.foriskstore.com and click on "Bioenergy." A monthly, complimentary Wood Bioenergy US summary is available by signing up for the Forisk News at www.forisk.com.
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Showing posts with label analysis. Show all posts
Showing posts with label analysis. Show all posts
Wednesday, August 11, 2010
Thursday, June 17, 2010
Friends of the Earth: Billions of Dollars in Tax Breaks for Each New Reactor Under Kerry-Lieberman Wipe Out Risk for Utilities Already Benefiting From Massive Loan Guarantees
/USNewswire/ -- The nuclear industry could end up facing no risk under massive tax break subsidies in the Kerry-Lieberman climate bill, according to an important new analysis conducted for Friends of the Earth by the research organization Earth Track. These tax breaks totaling $9.7 billion to $57.3 billion (depending on the type and number of reactors) would come on top of the Kerry-Lieberman measure's lucrative $35.5 billion addition to the more than $22.5 billion in loan guarantees already slated for nuclear power.
Friends of the Earth President Erich Pica said: "Doling out an additional $1.3-$3 billion in tax breaks per new reactor means the industry would be at the table playing almost entirely with taxpayer money. Industry will have little to lose when a reactor goes belly up. While taxpayers are bankrolling the industry's nuclear gamble they would share in none of the reactor's financial returns. In fact, all taxpayers will receive if the reactors are built is responsibility for disposing of the waste. By contrast, investors stand to make billions with no risk should their reactor gambit goes belly up and enter bankruptcy."
Earth Track Founder Doug Koplow said: "These substantial tax breaks for new reactors greatly impede market access for competing energy sources and worsen the already substantial risks to taxpayers from a nuclear build-out. As has clearly been shown in U.S. mortgage markets, the likelihood of bad financial decisions rises sharply if only other people's capital is at risk. Kerry-Lieberman's nuclear tax breaks do just this by replacing investor equity with taxpayer money, and allowing investment tax credits to be claimed even before the reactor is operating. The provision to recover credits in the event a reactor is cancelled or suspended is unlikely to be effective in the most likely cause of termination - a bankruptcy due to poor economics."
The memo evaluates three tax break subsidies, describing how they work and estimating their subsidy value to recipients in the nuclear power sector:
-- 5-year accelerated depreciation period for new nuclear power plants
(Kerry-Lieberman section 1121).
-- Investment tax credit (ITC) for nuclear power facilities (K-L section
1122) and the related grants for qualified nuclear power facility
expenditures in lieu of tax credits (K-L section 1126).
-- Modification of credit for production from advanced nuclear power
facilities (K-L section 1124).
According to the Earth Track analysis:
-- The K-L tax breaks would be worth billions per reactor. The new
subsidies will be worth between $1.3 billion and nearly $3.0 billion
on a net present value per new reactor. This is equivalent to between
15 and 20 percent of the total all-in cost of the reactors, as
projected by industry. In fact, the new nuclear tax break subsidies
would be worth 15 to more than 50 percent of the expected market value
of power the plants will produce. This is over and above the many
other subsidies the nuclear projects would already receive.
-- The new K-L tax breaks will undermine equity requirements of the
nuclear loan guarantee program. In theory, the current rules require
investors to hold a 20 percent equity stake in the new project. A key
goal of this requirement is to ensure investors have a strong interest
in the long-term success of the venture. However, the K-L bill would
in effect allow investors to recover funds equal to this equity share
within the first few years of plant operation. Financial risks from
project failure would then rest almost entirely with taxpayers.
-- Total tax subsidies to new reactors could reach tens of billions of
dollars from K-L's two main tax breaks alone. The national cost of
K-L's tax provisions can be benchmarked by evaluating two build-out
scenarios: six reactors, matching the number likely to be supported
under K-L's expanded nuclear loan guarantee pool; and 22 reactors,
matching the number going through NRC licensing as of May 2010. As not
all reactors will be the same type, the calculations assume half are
AP1000s and half Areva EPRs. Under a six-reactor scenario, K-L will
add $9.7 billion to $15.6 billion in tax subsidies to nuclear power.
Under a 22-reactor scenario, the net present value of subsidies on
offer just through 5-year depreciation and ITCs reaches $35.7 billion
to $57.3 billion. Neither of these other subsidies have any national
caps under Kerry-Lieberman.
-----
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Friends of the Earth President Erich Pica said: "Doling out an additional $1.3-$3 billion in tax breaks per new reactor means the industry would be at the table playing almost entirely with taxpayer money. Industry will have little to lose when a reactor goes belly up. While taxpayers are bankrolling the industry's nuclear gamble they would share in none of the reactor's financial returns. In fact, all taxpayers will receive if the reactors are built is responsibility for disposing of the waste. By contrast, investors stand to make billions with no risk should their reactor gambit goes belly up and enter bankruptcy."
Earth Track Founder Doug Koplow said: "These substantial tax breaks for new reactors greatly impede market access for competing energy sources and worsen the already substantial risks to taxpayers from a nuclear build-out. As has clearly been shown in U.S. mortgage markets, the likelihood of bad financial decisions rises sharply if only other people's capital is at risk. Kerry-Lieberman's nuclear tax breaks do just this by replacing investor equity with taxpayer money, and allowing investment tax credits to be claimed even before the reactor is operating. The provision to recover credits in the event a reactor is cancelled or suspended is unlikely to be effective in the most likely cause of termination - a bankruptcy due to poor economics."
The memo evaluates three tax break subsidies, describing how they work and estimating their subsidy value to recipients in the nuclear power sector:
-- 5-year accelerated depreciation period for new nuclear power plants
(Kerry-Lieberman section 1121).
-- Investment tax credit (ITC) for nuclear power facilities (K-L section
1122) and the related grants for qualified nuclear power facility
expenditures in lieu of tax credits (K-L section 1126).
-- Modification of credit for production from advanced nuclear power
facilities (K-L section 1124).
According to the Earth Track analysis:
-- The K-L tax breaks would be worth billions per reactor. The new
subsidies will be worth between $1.3 billion and nearly $3.0 billion
on a net present value per new reactor. This is equivalent to between
15 and 20 percent of the total all-in cost of the reactors, as
projected by industry. In fact, the new nuclear tax break subsidies
would be worth 15 to more than 50 percent of the expected market value
of power the plants will produce. This is over and above the many
other subsidies the nuclear projects would already receive.
-- The new K-L tax breaks will undermine equity requirements of the
nuclear loan guarantee program. In theory, the current rules require
investors to hold a 20 percent equity stake in the new project. A key
goal of this requirement is to ensure investors have a strong interest
in the long-term success of the venture. However, the K-L bill would
in effect allow investors to recover funds equal to this equity share
within the first few years of plant operation. Financial risks from
project failure would then rest almost entirely with taxpayers.
-- Total tax subsidies to new reactors could reach tens of billions of
dollars from K-L's two main tax breaks alone. The national cost of
K-L's tax provisions can be benchmarked by evaluating two build-out
scenarios: six reactors, matching the number likely to be supported
under K-L's expanded nuclear loan guarantee pool; and 22 reactors,
matching the number going through NRC licensing as of May 2010. As not
all reactors will be the same type, the calculations assume half are
AP1000s and half Areva EPRs. Under a six-reactor scenario, K-L will
add $9.7 billion to $15.6 billion in tax subsidies to nuclear power.
Under a 22-reactor scenario, the net present value of subsidies on
offer just through 5-year depreciation and ITCs reaches $35.7 billion
to $57.3 billion. Neither of these other subsidies have any national
caps under Kerry-Lieberman.
-----
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Thursday, October 15, 2009
Climate Change Bill Needs State Roles, Says Emory's Buzbee
The Boxer-Kerry bill on climate change now making its way through Congress moves in the right direction, says environmental law expert William Buzbee, but some critical improvements are needed to make the legislation effective.
Buzbee's analysis of the bill, one of a series from the Center for Progressive Reform (CPR) by their member scholars, appears on the CPRBlog.
One unintended consequence of the bill's many implementation steps and corrective mechanisms, writes Buzbee, "is an avalanche of obligations." A big question, he says, is whether this "will lead to implementation delays."
A big risk in Boxer-Kerry, says Buzbee, "is that the federal law could prove too lax, but that the federal legislative and regulatory venues would be gridlocked and hence unable to set new, lower emissions caps or take other actions to lower emissions levels."
If that happens, he writes, "states might once again want to reassume the climate change leadership role they exhibited over the past decade and take actions to reduce emissions."
The bill does have provisions to preserve states' ability to require lower emissions than federally mandated, and provisions to prevent polluters from "simply turning and selling emission allowances or credits outside the jurisdiction."
Boxer-Kerry also retains the power of the federal EPA "to take action to supplement a cap-and-trade scheme if that proves necessary," writes Buzbee. "In reality, the mere threat of such supplemental action could nudge polluters into supporting implementation of the cap-and-trade regime."
Yet the bill is less than clear on whether "state supplemental roles are meant to be preserved under all the bill's provisions," writes Buzbee. A second important but missing element "is a citizen suit provision authorizing citizens to sue regulators, polluters, or other players in the cap-and-trade market for violations of the law."
With a law this complicated, writes Buzbee, "a multiplicity of enforcers is needed."
He concludes that "retention of state roles in combating climate change and adding a citizen suit provision" are near necessities "if a cap-and-trade market is to become a well policed reality."
Buzbee is professor of law and director of the Environmental and Natural Resources Law Program at Emory Law School. He is also a director of Emory’s new Center on Federalism and Intersystemic Governance.
-----
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Buzbee's analysis of the bill, one of a series from the Center for Progressive Reform (CPR) by their member scholars, appears on the CPRBlog.
One unintended consequence of the bill's many implementation steps and corrective mechanisms, writes Buzbee, "is an avalanche of obligations." A big question, he says, is whether this "will lead to implementation delays."
A big risk in Boxer-Kerry, says Buzbee, "is that the federal law could prove too lax, but that the federal legislative and regulatory venues would be gridlocked and hence unable to set new, lower emissions caps or take other actions to lower emissions levels."
If that happens, he writes, "states might once again want to reassume the climate change leadership role they exhibited over the past decade and take actions to reduce emissions."
The bill does have provisions to preserve states' ability to require lower emissions than federally mandated, and provisions to prevent polluters from "simply turning and selling emission allowances or credits outside the jurisdiction."
Boxer-Kerry also retains the power of the federal EPA "to take action to supplement a cap-and-trade scheme if that proves necessary," writes Buzbee. "In reality, the mere threat of such supplemental action could nudge polluters into supporting implementation of the cap-and-trade regime."
Yet the bill is less than clear on whether "state supplemental roles are meant to be preserved under all the bill's provisions," writes Buzbee. A second important but missing element "is a citizen suit provision authorizing citizens to sue regulators, polluters, or other players in the cap-and-trade market for violations of the law."
With a law this complicated, writes Buzbee, "a multiplicity of enforcers is needed."
He concludes that "retention of state roles in combating climate change and adding a citizen suit provision" are near necessities "if a cap-and-trade market is to become a well policed reality."
Buzbee is professor of law and director of the Environmental and Natural Resources Law Program at Emory Law School. He is also a director of Emory’s new Center on Federalism and Intersystemic Governance.
-----
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