Posts Tagged ‘U.S. Department of Energy’

I wrote this story for Grist, where it first appeared.

The federal energy efficiency cops are on the beat – finally.

For the first time in 35 years, the United States Department of Energy is moving to enforce decades-old energy efficiency and water conservation standards for products like refrigerators, light bulbs and shower heads.

On Monday, the Energy Department said it had filed enforcement actions against 27 companies for failing to certify their products comply with energy efficiency and water conservation regulations.

“As a part of its mission to help consumers purchase energy efficient products that will save them money, the Department sets energy efficiency standards for a vast array of consumer and commercial products,” wrote Scott Blake Harris, the Energy Department’s general counsel in a blog post Monday. “But when I arrived at DOE, I was stunned to discover that the Department had never systematically enforced DOE’s 35-year-old energy efficiency standards.”

“The problem, of course, is that lax enforcement of energy efficiency standards undermines the goal of increased energy efficiency,” he added. “When efficiency standards are not regularly enforced, bad actors soon learn that they can gain an unfair economic advantage over law-abiding competitors by falsely or improperly certifying the efficiency of their products. This not only distorts competition in the short-term, but it undermines the kind of long-term competition that drives innovation.”

The Energy Department filed complaints against companies ranging from ASKO, the Swedish maker of upscale appliances, to Duralamp.

But the enforcement actions announced Monday will hardly make chief financial officers tremble.

General Electric, for instance, faces a maximum fine of $252,140 for not certifying that some dehumidifier models comply with energy efficiency standards. But the Energy Department proposed a civil penalty of $36,500 and informed GE —  and other companies targeted for enforcement — that it would drop the case for $5,000 if the global conglomerate agreed to settle within 30 days and come into compliance.

Likewise,  Sanyo faces a maximum fine of $3.5 million for 58 violations involving its refrigerators and freezers. The proposed penalty is $316,333 but the Energy Department will settle for $10,000.

The Energy Department says that as a result of its enforcement program it has removed from the market 66 products that violated energy efficiency standards and filed a total of 75 enforcement actions to date.

“Before our effort, the number of products that had been removed from the market was zero,” noted the department’s general counsel.

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eSolar Sierra

photo: eSolar

The U.S. Department of Energy on Friday began accepting applications for at least $3 billion in direct funding of renewable energy power plant projects.

The funding, part of the federal stimulus package, is in lieu of a 30 percent investment tax credit that green energy developers can take on their projects. Given that most solar and wind developers carry no tax liabilities, they have relied on investment banks and other investors to front the hundreds of millions and billions of dollars in financing needed for their projects in exchange for the tax credits. But as the economy tanked along with investment banks, demand for so-called tax equity partnerships evaporated.  Big Solar projects stalled and wind developers delayed turbine orders.

Curiously, the Department of Energy said on Friday that the $3 billion would fund some 5,000 projects. That works out to about $600,000 per power plant. But a single 250-megawatt solar power plant alone can cost more than a $1 billion and would thus soak up $300 million or 10% of the funding pool.

The question is, will DOE end up funding a few large-scale green energy projects that could start to give, say, the solar thermal industry economies of scale, or will it spend the money on hundreds of smaller renewable energy facilities?

That’s a crucial issue for solar developers like Tessera Solar/Stirling Energy Systems, eSolar and BrightSource Energy, which is backed Google (GOOG), Morgan Stanley (MS) and VantagePoint Venture Partners as well as a clutch of oil giants – Chevron (CVX), BP (BP) and Norway’s StatoilHydro.

Also left unsaid in the DOE’s announcement was the fact that renewable energy projects need to break ground by the end of 2010 to qualify for the direct funding. Which is why BrightSource, Nextera Energy (a subsidiary of utility giant FPL Group (FPL) ) and Tessera Solar are eager to expedite the lengthy California licensing process and get their projects approved before New Year’s Eve 2010 so they can put shovel to dirt and start shoveling cash into their coffers.

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