Riding the green wave to stay competitive.

Being "green" and environmentally friendly are more than buzzwords these days. Now that alternative energy has caught the attention of Silicon Valley, investors are pumping cash into a wave of technologies-some better known than others, but all indicative of a shift from the norm. Despite the sluggish economy, alternative energy start-ups received a record $2 billion in venture capital funding in the second quarter of 2008, a 58 percent increase from the previous year, according to Cleantech Group, a market research firm. Today, clean energy accounts for 20 percent of all venture capital funding and continues to attract interest.

Wind Energy
In 2007, the United States' energy demands were met primarily by petroleum, coal and natural gas. Renewable energy sources accounted for only 7 percent. Of the renewable energy sources, hydroelectric power generated the lion's share of electricity. At the end of March 2008, the United States had an installed wind power capacity of 18,302-MW, accounting for only about 1 percent of the country's total usage. As small as that percentage may be, this clearly indicates a shift in the direction in which we are moving in energy usage.

Installed wind power grew a staggering 45 percent in 2007, and that growth is poised to continue. In a recent report, the Department of Energy said if a series of challenges were met, then the United States should be able to derive a full 20 percent of its electric demand from wind power alone by 2030.

Research and investments are being poured into this technology, which is helping fuel its rapid growth. In a recent research paper in the International Journal of Global Energy Issues, engineers in Greece examined the total cost of various "green" technologies to see how they stacked up to fossil fuels once construction, maintenance and disposal were considered. They found that wind power, along with geothermal energy, were the greenest alternatives to fossil fuels, so the boom in wind power is not only good for U.S. energy independence, but it is also good for the planet as it reduces our dependence on fossil fuels.

With the credit crisis, worldwide recession and reduction in energy prices dampening near-term demand for renewable energy and capital for those projects, there continues to be a surge in wind power demand and also a similar surge in demand for the equipment needed for capturing the wind. In April, turbine manufacturers confirmed that a wind turbine shortage exists, and is growing. In a conference call to analysts, General Electric reported that they currently had a $12 billion backlog of orders booked but not shipped-more than double that of just one year prior.

While the latest available data shows that the United States has a long way before it will reach some of its lofty renewable energy goals, the surge in wind interest alone suggests that significant changes are underway. Currently, many states have large amounts of wind energy production facilities in the construction pipeline. Once the planned projects are built, four states will produce more wind power than the entire country did in 2007. However, improved national electricity transmission will be required for industrial customers to realize the market benefit for these renewable energy projects. For example, if the wires to move the power from a Wyoming wind farm cannot be built, the power cannot get to the large, electricity-using markets.

Solar Power
Not to be outdone by wind power, solar is making large leaps in terms of installed projects. In California, companies have almost completed construction on a pair of massive solar plants that together will generate more than 800-MW of power - more than 12 times the power than that of the next largest plant currently in operation. The plants, when completed, will cover more than 12.5 square miles in sunny, central California. The scale of these plants is significant, as previous studies have shown that small solar installations are not actually an efficient alternative to other power sources. Only when the scales are large enough does solar become a cleaner and greener alternative to fossil fuels. Additionally, the newer solar technology is concentrating solar power where large "farms" of solar mirrors collect and concentrate the sun's rays to create electricity.

Energy Considerations for Companies
Today, energy companies are becoming increasingly global in their operations. They are also comprehending energy issues and compliance and taking advantage of situations. Developing a carbon strategy, understanding the approach for carbon regulations, assessing greenhouse gas emissions, generating or purchasing renewable energy and measuring the financial impact of carbon issues are all essential to progressing in the evolving energy movement and employing the best business practices.

Last summer, energy costs skyrocketed to levels not seen in decades. While cost is a motivational factor for industrial customers when it comes to making decisions regarding an energy purchase, brand image is something that many mid-size to large energy consumers consider. Some energy companies will spend more this year on renewable energy because they not only think it is good for their brand, but they also know it is important to a large part of their client base.

To stay ahead of this changing energy market, it is paramount to stay abreast of regulations in the works. Last summer, the Lieberman-Warner Leading Climate Change Bill failed in the Senate, but many key regional and state initiatives will most likely be implemented to cap greenhouse gas and carbon emissions from large corporations. Canada has already implemented some measures. A smart energy consumer is well informed and cognizant of proposed legislation that could affect any current energy programs.

Another topic to be addressed is demand response. Although this is not exactly a green initiative, it helps a company cut its energy spending by paying close attention to real time usage and current consumption. Demand response uses real-time meters to track energy usage. A demand response program gives businesses the opportunity to earn money by making itself available to reduce electricity when needed. This typically occurs during rolling blackouts, or on hot summer days when energy consumption is at higher levels than normal. This method provides more current information than the standard method utilized by most electric companies-reading total usage once a month. Added benefits of such a program include an additional source of revenue, improved emergency preparedness and data to help better manage energy costs-not to mention recognition as a conscientious industry leader.

Conclusion
Most world energy needs are currently met through the combustion of fossil fuels. With projected increases in global energy needs, more sustainable methods for energy production and storage will need to be developed, and production of greenhouse gases will need to be reduced. By leading rather than following the pack, companies can make the best use of technology to remain competitive in the ever-changing energy market. Certainly not just a fleeting trend, the green movement is definitely here to stay. The best advice is to ride the wave. Going green can help attract customers, cut down long-term costs, enhance reputation and avoid supply concerns-not to mention ensure regulatory compliance.

Dan Black has more than 20 years of experience in the energy and environmental sectors and is currently manager, sustainable energy, at Delta Energy, LLC, 2674 Federated Blvd., Columbus, OH 43235, 614-339-2600, Fax: 614-339-2700.

Pumps and Systems, April 2009