Utah poised to begin transition to alternative energy - Deseret News

Currently, Utah only receives roughly 10 percent of its energy from renewable sources

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Even the most ardent defenders of fossil fuels are forced to concede that the energy they provide comes at a steep environmental cost. That's why many activists insist that we leave fossil fuels behind entirely and switch to greener energy sources like wind and solar power. The problem with making that switch is that none of the alternatives to fossil fuel have been economically viable. Furthermore, such alternatives have not been available on the scale necessary to replace traditional fuel sources.

The good news is that there are promising signs that this may be changing.

SolarCity, which established a presence in Utah with its installed solar panels at the Utah National Guard Building and the Olympic Skating Oval, announced that it is establishing a regional headquarters in the Beehive State that is expected to create 4,000 new jobs over the course of the next 10 years. In addition, VivintSolar, a similar company that operates out of Lehi, anticipates adding another 3,000 jobs in the solar industry over the same time frame.

Brendon Merkley, SolarCity's executive director of customer operations, praised Utah's "wonderful business climate" and noted that not only will this expansion have a positive environmental impact, it will also "save money at the same time," which he rightly notes is "the best of both worlds."

It's also a frank acknowledgement that a move away from fossil fuels is far more likely when the transition is in the economic best interests of the public at large. Currently, Utah only receives roughly 10 percent of its energy from renewable sources, mainly because such energy is far more expensive than fossil fuels, and often requires government subsidies in order to make it affordable for consumers.

Indeed, the state of Utah is providing almost $37 million in tax credits for these two solar companies as incentives to create these jobs. That's a bargain, since it won't require any direct revenue from state coffers and will increase economic activity that will result in greater tax receipts down the road. But while tax credits are not direct subsidies, they are evidence of the reality that renewable energy sources still aren't quite ready to stand on their own.

Debate over energy use usually includes a good deal of vilification of "Big Oil" or other such forces. Such demonization is designed to shame people into abandoning traditional fuel sources, and, for the most part, it's both ineffective and unnecessary. The vast majority of people would be more than happy to use alternative fuels if they were both abundantly available and cost effective. When it comes to green energy, people respond to the carrot much better than the stick.

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Alternative-energy stock funds have grown up - The Denver Post

Even as the tumble in oil prices pummels the industry, one small â€" and perhaps surprising â€" group of energy stock funds has held up better than its peers: those investing in solar, wind and other alternative-energy sources.

It's an unexpected bright spot because alternative-energy stocks long have been known as some of the riskiest in an area that's already prone to big swings. The group historically has shown flashes of promise, only to plummet in disappointment. Alternative-energy stocks often have struggled when the price of oil was falling. The S&P Global Clean Energy index plunged 66 percent in 2008, more than the broad stock market or the price of oil.

In the past year, though, alternative-energy stocks generally have proved to be the steadier ride. An exchange-traded fund tracking the S&P Global Clean Energy index is down about 4 percent in the past 12 months, a milder drop than the 54 percent plunge in oil or 18 percent for Exxon Mobil. It's the latest sign of maturation for alternative-energy stocks.

"The whole industry feels like it's about to move to being a grown-up, real industry, where we won't have such high volatility," says Edward Guinness, portfolio manager of the Guinness Atkinson Alternative Energy fund. His fund has lost roughly 6 percent in 2015, but that's better than 91 percent of the other energy funds in its category.

To be sure, investing in alternative-energy funds still can be risky. The industry largely remains dependent on subsidies and government support to drive growth, and a key U.S. tax credit for solar power is set to curtail sharply in 2017.

Clean energy is also a global industry, as much as it's a global issue. That means funds often keep the bulk of their portfolios abroad, opening up U.S. investors to fluctuations in foreign-currency values.

Alternative-energy stocks also remain far below their peaks before the worst of the Great Recession. The S&P Global Clean Energy index, for example, is more than 80 percent below where it was in late 2007.

Still, alternative-energy fund managers remain optimistic, and some say they're not satisfied with just beating other traditional energy stock funds over the past year.

"Yes, we've outperformed the rest of the energy market," says Colm O'Connor, portfolio manager at the Calvert Global Energy Solutions fund. "But we've underperformed the rest of the market, and I think that's unwarranted."

Among the reasons for optimism:

Oil doesn't matter much. For years, alternative-energy stocks often would rise and fall with the price of oil. The thinking was that higher-priced oil would mean more demand for alternative energy, while cheap oil would mean less pressure to develop solar and other new sources of energy.

But that mind-set started to break down a few years ago, for a simple reason: Oil doesn't compete with wind or solar power to fuel U.S. power plants.

Costs are coming down.The alternative-energy industry is getting closer to the point where the electricity that it produces is the same price as power generated from traditional sources. When prices are comparable, the industry won't need subsidies and can become a much healthier competitor. In some areas of the world, that's already beginning.

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Alternative-Energy Funds Are Better at Absorbing Oil's Spill - ABC News

Even as the tumble in oil prices pummels the industry, one small -- and perhaps surprising -- group of energy stock funds has held up better than its peers: those investing in solar, wind and other alternative-energy sources.

It's an unexpected bright spot because alternative-energy stocks have long been known as some of the riskiest in an area that's already prone to big swings. The group has historically shown flashes of promise, only to plummet in disappointment. Alternative-energy stocks also have oftentimes struggled when the price of oil was falling. The S&P Global Clean Energy index plunged 66 percent in 2008, more than the broad stock market or the price of oil.

Over the last year, though, alternative-energy stocks have generally proven to be the steadier ride. An exchange-traded fund tracking the S&P Global Clean Energy index is down about 4 percent over the last 12 months, a milder drop than the 54 percent plunge in oil or 18 percent for Exxon Mobil. It's the latest sign of maturation for alternative-energy stocks.

"The whole industry feels like it's about to move to being a grown-up, real industry, where we won't have such high volatility," says Edward Guinness, portfolio manager of the Guinness Atkinson Alternative Energy fund. His fund has lost roughly 6 percent in 2015, but that's better than 91 percent of the other energy funds in its category.

To be sure, investing in alternative-energy funds can still be risky. The industry largely remains dependent on subsidies and government support to drive growth, and a key U.S. tax credit for solar power is set to curtail sharply in 2017. The U.S. is the world's second-largest solar market, which means any decline in demand will be significant for the industry.

Clean energy is also a global industry, as much as it's a global issue. That means funds often keep the bulk of their portfolios abroad, opening up U.S. investors to the risk that fluctuations in foreign-currency values can eat into returns.

Alternative-energy stocks also remain far below their peaks before the worst of the Great Recession. The S&P Global Clean Energy index, for example, is more than 80 percent below where it was in late 2007.

Still, alternative-energy fund managers remain optimistic, so much that some say they're not satisfied with merely having beaten other traditional energy stock funds over the last year.

"Yes, we've outperformed the rest of the energy market," says Colm O'Connor, portfolio manager at the Calvert Global Energy Solutions fund. "But we've underperformed the rest of the market, and I think that's unwarranted."

The Calvert fund is nearly flat this year -- down less than 1 percent -- making it the top fund in the energy category, according to Morningstar. But the broad S&P 500 index has returned 3 percent over the same time. The Calvert fund holds everything from solar-equipment makers to wind-farm managers to companies that help customers get more energy efficient.

Among the reasons for optimism:

â€" OIL DOESN'T MATTER MUCH.

For years, alternative-energy stocks would often rise and fall with the price of oil. The thinking was that higher-priced oil would mean more demand for alternative energy, while cheap oil would mean less pressure to develop solar and other new sources of energy.

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Utility execs see shift to more natural gas, worry about alternative energy ... - Kansas City Star

Changing regulations and technologies are big concerns for electric utilities, according to an annual survey of utility executives released Tuesday. But utilities also are embracing the challenges of alternative energy sources, electricity generated by their customers’ home systems and a changing fuel mix that includes more natural gas.

Those were among the findings in the ninth annual “Strategic Directions: U.S. Electric Industry Report” by Black & Veatch, the global engineering and design firm based in Overland Park.

The release of the report, based on responses from mid-May to early June from 435 respondents, comes on the heels of President Barack Obama’s announcement Monday of the final version of his Clean Power Plan, which is designed to reduce carbon emissions from U.S. power plants.

Some key points of the Black & Veatch report:

▪ Although respondents hadn’t seen the final rules, they agreed that natural gas “will take market share away” from coal and nuclear plants “to meet emissions goals under the Clean Power Plan.” But the responses were mixed on whether natural-gas production would increase enough to meet demand without price increases.

▪ Nearly two-thirds of utilities said they would increase their investment in renewable generation, such as solar and wind, in the next five years. Only 2.4 percent said they would decrease it. The rest would keep it the same or weren’t sure.

▪ Almost 80 percent of respondents said distributed generation â€" such as home solar power â€" was a serious business challenge. But nearly 75 percent said they were investing in, or were likely to invest in, technologies to accommodate or encourage such generation.

The area also is complicated because such generation, outside a utility’s control, could alleviate the need to build a new generating plant, or it could leave costly generating capacity idle.

▪ Just more than 51 percent of those responding said “balanced regulatory treatment between utility and consumer” was a top need for their utilities in the next five years. Regulatory issues that were much the same for decades now are complicated by the shift to alternatives, in part because solar and wind don’t generate constant power. That means more transmission lines, storage capacity and backup power can be needed, and how to compensate utilities â€" and charge customers â€" for those costs is an issue.

Nearly 60 percent also said they were reviewing their “net metering” policies, which include compensating customers who in effect sell power to the utility when their solar units generate more electricity than the customer needs.

▪ Thirty percent were planning investments in so-called behind-the-meter technology such as microgrids and energy storage and distributed generation. More than 40 percent were weighing the value of such investments.

▪ Utilities say they want customers’ help and plan to do more to reach out to them. More than half planned to invest more in social media in the next five years.

▪ Utilities’ responses on threats from hackers were mixed. More than half said they were ready to meet new cybersecurity requirements that take effect next year. But more than a quarter said they didn’t know how they would meet those requirements.

Dean Oskvig, the president of Black & Veatch’s energy business, summed up the situation for many U.S. utilities: “Today’s policies are based on a fixed-grid operator selling power to its customers. Times are changing. Customers can now generate their own power and put it back on the grid. At the same time, host utilities must maintain their complex infrastructure to meet government mandates for reliability. Utilities must continue engaging stakeholders and regulators in ways that harness technology gains and support environmental goals. They must do so while maintaining the reliable grid that consumers rely on.”

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