April 30, 2010

Germany has established itself as a beacon for green energy development. Other countries have been advised to try and emulate its strategies. While national policies can and should be idiosyncratic, Germany is directly financing its renewable sector as well as providing subsidies for operational costs, or feed-in tariffs.

Government backing is critical to the expansion of renewable energy around the globe. It provides the appropriate incentives and mandates that give developers the certainty they need to take risks. In the case of Germany, such a plan has propelled the nation to the forefront of international wind and solar development. As such, it is now projected to invest annually $37 billion into the green economy there by 2020, all to produce 27-30 percent of its electricity from such sources by then.

April 28, 2010

Long opaque, hedge funds are now in the spotlight. The focus: curbing the number of natural gas and oil contracts they can hold so as to prevent market abuses.

At the heart of the matter is the Commodity Futures Trading Commission (CFTC), which until recently has also been inconspicuous. Now, though, that's changed with all the attention given to unregulated financial instruments called derivatives and swaps as well as all the hoopla over limiting market speculation.

April 26, 2010

Big banks may get reined in. But will that harm the utility sector, which benefits from the capital that those lenders bring?

Congress is now considering legislation to ban those financial institutions from participating in speculative activities that are not tied to the basic and federal-backed services that they offer. So, those investment banks that trade commodities for their own advantage so as to increase their revenues would be barred from doing so. But those that trade on behalf of their industrial clients would be allowed to continue.

April 23, 2010

Coal producers are trying to refurbish their image. But the current hardship in which 29 miners died in underground explosion in West Virginia is making it difficult.

A critical question to arise from that accident is the long-term affect it will have on coal production and specifically whether it will force regulators to enact stricter laws. Tougher oversight, of course, would tend to require not just more safety standards but also stronger pollution controls, all of which would add costs. Utilities would then have to incorporate those new rules into their long-term planning decisions.

April 19, 2010

Natural gas has been riding high ever since the most recent estimates say that it can feed the country's electric generators for another 100 years. But it got an even bigger boost when President Obama vowed to end a two-decade long ban on drilling throughout much of the Outer Continental Shelf.

The proposal is part political and part economic. The administration came to office on the promise that the offshore energy reserves would play a part in the country's energy picture but that the oil and gas found there would be sensible -- not a pedal to the metal strategy. As such, it reasons that the newfound supplies could held erode the country's dependence on foreign sources as well as raise money from offshore leases.