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Mon, Dec 31, 2007
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Aim: Fuel Efficiency
Solar Cost Declining
Variety of Resources Essential

Aim: Fuel Efficiency
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In November, sales of Toyota's Prius, the most popular hybrid in the US, jumped 109 percent, compared with a 5 percent drop in sales of trucks and sport utility vehicles.
The energy bill President Bush signed mandating tougher fuel-economy standards sent a simple message to automakers: lighten up.
According to AP, the new rules certainly give makers of aluminum, carbon fiber and other lightweight materials something to smile about, analysts say, though the steel industry’s piece of the auto-industry pie is likely to shrink.
Auto shoppers, meanwhile, can expect to pay a premium at dealerships when the new rules kick-in--but the impact will be mitigated somewhat by fuel savings.
The bill mandates a 40 percent increase in fuel efficiency for new cars and light trucks by 2020, for a fleet-wide average of 35 miles per gallon
“With new standards, historically the auto industry has responded by lowering the weight, which meant less steel and more aluminum, rubber and plastic,“ said Mary Deily, a professor of economics at Lehigh University in Bethlehem, Pa., who has studied the steel industry.
A 10 percent drop in weight yields roughly a 6 percent improvement in fuel economy, automakers and analysts said.
“In order to fully achieve the energy bill’s fuel-economy goals, however, automakers are looking at enhanced engine and transmission efficiency--which already can be found in gas-electric hybrid vehicles--reduced tire resistance and improved aerodynamics,“ says Alan Taub, executive director of research and development at General Motors Corp.
“The question is how to deliver this fuel economy with the best combination of technologies to deliver the highest value to customers,“ Taub said.
Today, steel accounts for about 60 percent of an average vehicle’s weight in the US, down from a generation ago when much more of the metal was used, executives and analysts said. Still, the popularity of trucks, minivans and SUVs has caused the average vehicle weight to rise by more than 25 percent, to about 4,100 pounds, over the past 20 years, helping steel providers.
Even so, the percentage of aluminum in cars has been on the rise for decades since the last boost in fuel economy standards. Alcoa Inc., the country’s largest aluminum maker, sees an even greater opportunity ahead.
Hexcel Corp., Zoltek Cos. and other carbon fiber makers also stand to benefit from tougher fuel-economy rules. Their lightweight composite materials, which are significantly more expensive than steel, already are used in some Mercedes, BMW and Audi vehicles and in GM’s new Corvette, as well as in the aerospace industry, which is looking to drive down its jet-fuel expenditures.
While Europe favors small cars, manual transmissions and diesel engines to offset high fuel prices, US automakers believe they can make cars lighter, and more energy efficient, without sacrificing size.
For example, Ford Motor Co. last month said state-of-the-art engines and power-steering systems will help it meet a portion the fuel efficiency mandates, and that greater use of aluminum and high-strength steel could help shed 250 pounds to 750 pounds per vehicle.
Still, the tiny market for hybrids in the US is growing at a rapid clip. In November, sales of Toyota’s Prius, the most popular hybrid in the US, jumped 109 percent, compared with a 5 percent drop in sales of trucks and sport utility vehicles.
The American Iron and Steel Institute, whose members include Nucor Corp. and United States Steel Corp., said the fastest growing material being built into new vehicles is advanced high-strength steel, which was developed to help automakers meet current fuel economy standards without compromising safety. It is more expensive than traditional low-carbon steel, but lighter--and not as costly as aluminum or carbon fiber.
The transition to high-strength steel started 10 years ago and today is “cost neutral“, Taub said, because automakers can use less of the material per vehicle for an overall 25 percent reduction in weight. Using a similar amount of aluminum provides up to a 45 percent weight reduction, compared with a decade ago, while magnesium and carbon fiber offer weight drops of up to 60 percent--but carry significantly higher costs.

Solar Cost Declining
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A big solar water heating system in India
When Internet search major Google Inc. decided to power its ’Googleplex’ in Mountain View with one of the largest solar panel installations in the world last year, it was a big vote for solar energy, which presently provides less than 1 percent of the energy generated worldwide, Rediff.com reported.
Though the capital expenditure required for solar energy--estimated at Rs 24 crore (Rs 240 million) per megawatt (MW)--is almost six times higher than that for conventional sources of energy, there is no fuel cost. Sunlight is free.
Google, therefore, managed to slash its electricity bill by a third and also earn brownie points from the green activists. The solar power installation at Google’s head office can produce up to 1.6 MW electricity, enough to power around 1,000 Californian homes.
If the US companies can do it, there is a strong case for India to opt for it, given that it’s one of the most sun-rich countries in the world.
“Of course it will happen in India within a couple of years because the cost of solar photovoltaic technology is coming down and big corporate firms are showing interest in this form of renewable energy,“ says Akanksha Chaurey, associate director, Centre for Distributed Generation at The Energy and Resources Institute (TERI).
Incidentally, the annual solar energy received on every square mile is approximately equivalent to 4 million barrels of oil. To capture that efficiently enough to make it commercially viable, however, requires technologies that do not exist today.
Recently, companies like Mukesh Ambani’s Reliance Industries and Moser Baer Photo Voltaic (MBPV) announced their plans to set up 10 MW and 15 MW solar plants, respectively.
While Reliance Industries has decided to set up a 10-MW solar plant in Maharashtra, MBPV has signed a pact with Rajasthan Renewable Energy Corporation to set up a 15-MW solar power plant in Rajasthan.
“This is an encouraging news in a country where there’s not even a single solar plant of 1 MW,“ said Chaurey.
The government is also in the process of making policies to give incentives to grid-connected large power plants based on solar energy.
“Electricity generation from solar energy is prohibitively expensive and so it is not viable for utilities. It is imperative that prices come down,“ says a senior official of the Ministry of New and Renewable Energy (MNRE).
Agreed an official of Indian Renewable Energy Development Agency Ltd (IREDA), and said that a technological breakthrough is required to bring the cost down.
Incidentally, the cost per megawatt in case of solar power comes around to Rs 24 crore (Rs 240 million) while in case of wind power it is Rs 5 crore (Rs 50 million) and Rs 4 crore (Rs 40 million) in case of thermal power.
Also, the per unit cost of generation is also high at Rs 15 in case of solar power plant as compared to Rs 3 per unit in conventional electricity consumption. “Who would pay such a high cost?“ asks the IREDA official. Since it is very expensive to generate power from solar energy, the government prefers to invest money in other conventional and non-conventional sources like wind, biomass and coal, adds the IREDA official.
However, Chaurey is optimistic as she says it is a question of time as more and more companies would realize the importance of green power on the economies of scale would come into play and cost would surely come down.
But there are limitations to solar power too. Strong sunlight would be available for not more than five hours a day, which is why it is best suited for distributed generation where the power is fed to the load dispatch centers.
Currently, around 7.7 percent of the country’s total energy generation comes from renewable sources, mostly from wind energy, biomass projects and mini hydel projects.
The country has an installed renewable generation capacity of 10,622.45 MW and the Center is targeting the addition of another 14,000 MW of renewable energy capacity during the Eleventh Five-Year Plan.

Variety of Resources Essential
The Southern Alliance for Clean Energy recently criticized Southern Company for opposing a one-size-fits-all federal renewable portfolio standard that would mandate power companies to produce a percentage of their electricity from alternative sources such as wind, solar and biomass. (Southern Alliance for Clean Energy is a nonprofit, nonpartisan organization that promotes responsible energy choices that solve global warming problems and ensure clean, safe and healthy communities throughout the Southeast.)
According to Ajc.com, renewable energy and efficiency programs will play a role in meeting current and future energy needs, and Southern Company will continue to invest in research as well as programs for customers and the environment.
However, because there are differences from state to state in the availability of renewable resources like wind and solar, there are significant differences in what these technologies will cost in different regions of the country.
A federal mandate ignores this critical fact. Wind energy, for example, is one of the most economical renewable sources in states where there is a lot of wind. While solar is expensive wherever it is used, there’s simply a lot more solar capacity in states with arid climates. As a result, a one-size-fits-all approach penalizes certain regions because it doesn’t consider the impacts on consumers and economies in states where these resources are
not as economic.
In reality, a federal mandate could drastically raise electricity prices for consumers in states such as Georgia, and result in a significant transfer of wealth from consumers in renewable energy-poor regions to distant suppliers and the federal government.
Southern Company is not alone in its opposition to this federal mandate. Dozens of other organizations, including consumer groups, utilities and trade unions also believe that good energy policy encourages development of a variety of clean resources, including nuclear power, clean coal technologies, increased conservation and energy efficiency and, when it’s cost-effective for consumers, practical and economic renewable energy options.
Under the proposed federal mandate, companies would be forced to make so-called “alternative compliance payments“ to bridge the difference between what they could generate using renewable sources and what’s needed to meet the mandate. For Southern Company, these payments, at 3 cents per kilowatt-hour, amount to roughly $5.6 billion in today’s dollars. Adjusted for inflation, by 2030, the payments would total roughly $20 billion.
Southern Company estimates it may be able to identify 900 megawatts of renewable capacity in the Southeast by 2020, while a 15 percent federal mandate would require 6,000 megawatts. The estimates are based on realistic potential for future projects, not pie-in-the-sky potential figures.
Here in the Southeast, biomass is an option that shows practical and economic promise. But providing 15 percent of the power needed in our region by 2020 with biomass would require about 5,800 square miles of land for growing and harvesting the sources--or an area roughly the size of Connecticut.
In a two-year study, Southern Company and Georgia Tech identified some technical potential for wind generation off the Georgia coast. However, the high costs of off-shore facilities and regulatory issues still need to be resolved. Therefore, offshore wind simply doesn’t offer a reliable, cost-effective solution at this time.
Georgia Power and Southern Company are, however, taking steps to bring as much economic renewable capacity to the market as possible. At Georgia Power, residential and business customers can participate in the company’s Green Energy Program. And the company is currently developing a renewable energy program for large customers.