Alternative Energy Companies in Houston by bpn93372

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									Houston Marine Insurance Seminar 2007
“Wind & Renewable Energy:
Past, Present and future challenges for Operators
and Insurers Offshore”
  Alternative and Renewable Discussion Framework


• Alternative sources of electric power

• Alternatives to petroleum based fuels

• Two major issues
   – Reduction of CO2 emissions
   – Reduction of dependence on foreign oil
                              Alternative Energy



Alternative Energy                      Renewable Energy
•   Waste to Energy                     •   Wind
•   Biomass                             •   Solar
•   Landfill Gas                        •   Geothermal
•   Fuel Cells                          •   Hydro
•   Coal                                •   Biofuels
     – Gasification                         – Ethanol
     – Liquefaction                         – Biodiesel
     – Carbon Sequestration
• Recycled Energy
Companies involved in the manufacture, assembly, construction and operation of
the equipment, projects or plants utilizing these technologies.
                                          AIG and Alternative Energy

•   AIG Global Marine and Energy Insurance Products
     –   Operational Insurances
     –   Construction
     –   Marine
     –   Loss Control Consulting
     –   Claims

•   AIG Insurance
     – Environmental
     – D&O
     – A&H

•   AIG Financing and Investments

•   Consulting
     – Sindicatum Carbon Capital Ltd
     – Solomon Associates
AIG Global Marine and Energy Current Involvement - US


• Waste to Energy
   – Insure > 70% of the operational US waste to energy capacity
• Geothermal
   – Insure > 60% of the operational US geothermal capacity
• Wind
   – Insure almost 50% of the operational US wind capacity
• Ethanol
   – Insure > 30% of operational US capacity
• Bio-diesel
   – Insure >15% of the operational US capacity
U.S. Energy Flow 2005
            U.S. Power Generation




               Other, 5%   Hydro, 7%




                                        Nuclear, 20%


                                                          Hydro
                                                          Nuclear
                                                          Natural Gas
                                                          Coal
                                                          Other
Coal, 51%


                                       Natural Gas, 17%
U.S. CO2 Emissions
    Alternative and Renewable Sector Growth Potential

•   Continued growth in the demand for electric power

•   Energy independence

•   Legislation enacted or planned at federal, regional and state levels
     – Carbon Cap & Trade or Carbon Tax
     – State Renewable Portfolio Standards,
     – Production Tax Credits, Government Grants,
     – Ethanol replacing MTBE

•   Response to Global Pressures on GHG emissions and Climate Change

•   Expansion of existing Alternative/Renewable technologies

•   Development of new technologies
                Federal Legislation (2007)



• Global Warming Pollution Reduction Act
• Safe Climate Act
• Global Warming Reduction Act
• Climate Stewardship Act
• Climate stewardship and Innovation Act
• Electric Utility Cap and Trade Act
• Bingaman Proposal
World Renewable Portfolio Standards




        LEGEND
      Renewable Energy Targets
      Renewable Energy Targets
      by State/Province
      No Renewable Energy
      Targets
US Renewable Portfolio Standards




                  State RPS

                  State Goal

                  Pending
Renewable Generation
                                      U.S. Alternative Energy Present and Future


                                                 Installed                             Planned New & Expansions
                                          Number         Capacity                      Number          Capacity

BioDiesel                                     105             864 mgy                       85           1,700 mgy

Ethanol                                       110           5,493 mgy                       85           6,130 mgy

Geothermal                                     59           2,823 MW                        62           2,250 MW

Solar
  Photovoltaics                            10,239             120 MW                       N/A             N/A
  Concentrating Solar Power                     1               1 MW                         7           2,339 MW

Wind                                          358          11,679 MW                        93           8,031 MW


Sources: National Biodiesel Board, Renewable Fuels Association, Geothermal Energy Association, Solar Energy Industries Association,
American Wind Energy Association.
                      U.S. Revolutionary Growth Goals



                                                     2025
                           Current (GW)        New Capacity (GW)    Total (GW)
Wind                                  10.5                    248            258.5
Geothermal                             0.5                    164            164.5
Hydro                                 75.0                     23             98.0
Solar                                  3.1                    100            103.1
Biomass                               10.0                    100            110.0
                                      99.1                    635            734.1

Source: American Council on Renewable Energy

• 20 by 20 – Union of Concerned Scientists
• 25 by 25 – Energy Future Coalition
• 30 by 30 – American Solar Energy Society
                                                                                    Alternative Energy Scenario - World

                  Global Increase in Renewable Energy
                                                                            2004            2030   Approximate Increase (%)



Electricity Generation (TWh)                                                3179            7775           140%
   Hydropower                                                               2810            4903            70%
   Biomass                                                                   227            983            330%
   Wind                                                                       82            1440          1660%
   Solar                                                                       4            238           5850%
   Geothermal                                                                 56            185            230%
   Tide and Wave                                                             0.5             25           4500%
Biofuels (Mtoe)                                                               15            147            880%
Industry and Buildings (Mtoe)*                                               272            539            100%
   Commercial Biomass                                                        261            450             70%
   Solar heat                                                                6.6             64            870%
   Geothermal heat                                                           4.4             25            470%

TWh = TeraWatt hours = Trillion Watt hours          Mtoe = Million Tons of Oil Equivalent
* Excluding traditional biomass

Source: World Energy Outlook 2006, OECD/IEA 2006.
   Wind Energy – World Capacity and Predicted Growth

          World Wind Energy - Total Installed Capacity (MW) and Prediction 1997 - 2010
                                                                                         160,000
     160,000
     140,000                                                                        132,000
     120,000                                                                   109,000
     100,000                                                               90,000
       80,000                                                         73,904
                                                                59,004
       60,000                                              47,686
                                                      39,290
       40,000                                    31,164
                                            24,320
       20,000                          18,039
                                  13,696
                7,475 9,663
            0
                  7         8    0    9 1 2 3   4    5      6    7     8   9     0
            199       199    200 200 200 200 200 200 200 n 200on 200on 200on 201
                                199
                                                        ctio cti cti cti
Source: WWEA member survey and research
                                                  P redi Predi Predi Predi
Wind Energy
Wind Energy
                                    Why Offshore?


• Availability of open land areas

• Better wind resources
   – Higher mean speeds
   – Steadier wind


• Aesthetics

• Increased transmission options
             U.S. Offshore Resource Estimates (MW)


                 5 -20 Nautical Miles      20 – 50 Nautical Miles
Region           < 30m           => 30m    < 30m           =>30m

New England      9,900           41,600    2,700           166,300


Mid Atlantic     46,500          8,500     35,500          170,000


California       2,650           57,250    0               238,300


Pacific NW       725             34,075    0               93,700



Total            59,775          141,425   38,200         668,300
             US Offshore Wind Developments


• Estimated Potential 900,000 MW

• Possible to reach 70,000 MW by 2025

• Current operating in US       none

• Current under construction in US     none

• Current planned in US     3
   – Cape Wind; MA; 130 units; 420 MW
   – Long Island Offshore Wind Park; NY; 40 units; 140 MW
   – Galveston: TX; 50 units
         Worldwide Offshore Wind Development (end of 2006)



• 16 Wind Farms Operating (North Sea)
   – 587 units; 587 MW
   – Denmark, Sweden, Holland, UK, Ireland


• Under Development/Construction
   – UK Round 1
       • 13 Projects announced in 2001
       • 3 Operating, 1 under construction, 2 indefinite hold, 7 delays

• 11 GW of Projected, Planned, Predicted and Proposed Projects by
  2010

• Mostly shallow water deployment (4 – 18 meters)
• Monopile and gravity base foundations
          Example of Issues with Offshore Wind


• Horns Rev; Denmark; 2002
    – 80, 2 MW units
• 1st two years of operation, 75,000 maintenance trips
• 2 per unit per day
• Reliance on Helicopter
• By 2004; 20-30% of transformers affected
       • Offshore weather conditions
       • Manufacturing problems
• Numerous broken gears (wave and wind action)
• As of this year all Transformers have been replaced
                                                   Issues


• Costs are at least double onshore facilities

• Costs to build have increased 33%

• Exposure to elements (turbines, transformers)

• Technology challenges increase in deeper water
                                         Issues


• Cable Damage
• Accessibility
    – Availability of adequate vessels
    – Reliance on Helicopters
•   Mobilization/ Demobilization Costs
•   Substation platforms
•   Weather related delays
•   Transport / Towing
•   Heavy Lifts
•   Ship Collision
                                        US Offshore Wind Issues


• Deeper water technology
• Siting Issues
   – Shipping lanes
   – Private aircraft flight patterns
   – Commercial and recreational fishing areas
• Environmental Impact Studies
• Grid connections
• Harsher wave and weather conditions
   – Hurricanes
Framework for Offshore Wind Energy Development findings


 • Offshore systems are in early years of design stages

 • New Technologies will emerge to meet the challenges
    – Larger MW turbines
    – Deep water platform concepts


 • These new technologies need to be fully tested

 • The new technologies need to be successfully
   demonstrated
                             Summary


• Offshore wind development presents unique challenges

• Government support and incentives needed to make the economics
  work

• Technology improvements will be made over time

• Early stages of development with a long term horizon

• Competition for financing from other energy sources in the near term

• Part of an overall Energy Plan
Thank you

								
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