Falling prices for European carbon emissions permits could stunt investment in the renewable energy sector both within and outside Europe, but the credit crunch continues to have a greater impact. ...A falling carbon price could worsen the economics of renewable energy further, as falling demand for carbon emissions permits in a deepening recession pulls down carbon prices, benefiting fossil fuels.

William Kovacs, at U.S. Chamber of Commerce, warns: "Anyone who thinks you can have a cap-and-trade system in which trillions of dollars of new securities will be traded is just not paying attention to what's happening on Wall Street." Meanwhile, prices in emerging carbon markets (Carbon Finance) globally have held up better than in other commodities markets, but financial analysts caution that these markets are too immature to provide a safe haven for investors (Reuters). Though sales of carbon emission offset credits--investment in green projects in lieu of direct emissions reductions--have been strong, some experts still express concern over the quality of oversight (WSJ) these projects receive.

Wind turbines generate electricity very irregularly, because the wind itself is inconsistent. Therefore wind turbines always need backup power from fossil fuels to keep the electricity grid in balance. Gas turbines are the best way to do this. They are able to respond quickly and push power production when wind generators stop suddenly. They can be turned on and off almost instantly, whereas traditional coal-fired plants need to be maintained in a very inefficient standby mode if they are to respond to large fluctuations in power demand. A proliferation of windmills, then, can become a windfall for gas sellers. Just look at the cases of Spain and Germany, Europe's leading producers of wind power.

The idea was that, in the intervening years, electricity produced with renewable energy technologies would grow to the point that the shift away from nuclear would hardly be noticed. That, though, is looking increasingly unlikely. Despite a decade of massive investment and generous programs established to promote wind, solar and biomass power generation, green energy sources make up just 14 percent of the country's energy supply. Even if that were to double in the near future, the lion's share of Germany's energy consumption would have to come from elsewhere. Without nuclear power, "elsewhere" in Germany necessarily means coal-fired power plants.

The German government wants to build up to 30 offshore wind farms in a bid to meet its renewable energy targets, Environment Minister Wolfgang Tiefensee said in an interview published Sunday. Tiefensee told the Welt am Sonntag newspaper that the wind farms would be built in the Baltic and North seas and said some 2,000 windmills should soon be producing 11,000 megawatts of electricity. The government is aiming to obtain "25,000 megawatts of energy from wind farms by 2030", Tiefensee said. ...European Commission head Jose Manuel Barroso weighed into the debate in an interview with the Bild am Sonntag newspaper, urging Germany to rethink its decision to phase out nuclear energy.

Sapec SA, the third-largest supplier of crop-protection products on the Iberian Peninsula, plans to raise cash for construction of U.S. wind farms by selling other alternative-energy projects after they are completed this year. ...The wind farm projects in the U.S. are facing delays amid uncertainty about the extension of renewable-energy tax credits and problems getting the turbines from Spain, according to Velge. Naturener, which had planned to install 210 megawatts of capacity in Montana this year, will complete only 107 megawatts of the Glacier Wind project this year. The first project in Canada will not be completed until 2010, rather than in 2009.

Central Government has extended an off-shore exclusion area in the Strait of Gibraltar. ...Central Government, acting on a request from the regional Junta de Andalucía, has ordered that there will be no new wind farms off the coast of Zahara or Barbate. A previous exclusion zone there has now been extended, prohibiting the windmills along the entire Strait of Gibraltar, from Algeciras to Trafalgar.

"Wind-mapping shows that ... Norway is among the (world's) most ideal locations for wind power, both on the coast and offshore," said Norwegian Deputy Petroleum and Energy Minister Liv Monica Stubholdt. Yet the Scandinavian country, one of the world's leading oil and gas exporters, today lags far behind others in taking advantage of this natural resource. ..."Of course, we don't want to fill our entire coast with wind turbines but even a fraction of that would be good," ...A major reason for the slow uptake is Norway's virtually unlimited access to renewable hydro power, which today covers about 99 percent of its domestic energy consumption, Deputy Minister Stubholdt explained.

It will cost every household in the UK at least £2,000 to comply with the new European Union target of producing 15 per cent of all energy from renewable sources by 2020, according to a report commissioned by the government. ...According to energy consultancy Pöyry, the bill for the UK to meet the target would be at least €5bn a year for more than a decade, compared with just over €3bn a year for France and Germany, and well under €500m for most other countries.

Spanish wind turbines provided record levels of power on Tuesday and the national grid said it had to order a cut in output to avoid becoming vulnerable to a sudden drop should the wind have stopped blowing. The national grid, REE (REE.MC: Quote, Profile, Research), said it would ideally compensate for abrupt falls in the unpredictable supply from wind parks by importing energy from France, but current power lines did not have sufficient capacity to do this. ..."If the drop in generation is greater than the capacity for interconnection of electricity with the European system, it entails a serious risk for the continuity of supply," an REE statement said.

Applications for wind farms that would generate more than 34,000 megawatts of electricity - almost three times the country's current generating capacity from all forms of energy - are being considered by the Regulatory Authority for Energy (RAE). At a time when the European Union is looking to strengthen its alternative energy policies and slash greenhouse gas emissions, Greece's energy regulators are apparently pinning their hopes on wind power to help meet ambitious energy targets. ...according to National Centre for Renewable Energy (CRES) president Yannis Agapitidis, within the land use plan are restrictions limiting the size of island wind farms to four percent of the area of that island. That would appear to make existing applications for farms on Skyros and Serifos, amounting to 330MW and 260MW, respectively, unviable.

GWEC figures wind power's capacity in 2005 was about 24%-that is, wind turbines spin 1 hour out of 4, year-round. That will improve, but slowly. Bigger and taller turbines, in more favorable locations-especially offshore-will make wind turbines more efficient. But it will be a long time before wind power's paper strength starts to be reflected in real electricity generation. GWEC's own figures point to wind power creeping toward 30% efficiency over the next twenty years. Wind power may be the most mature horse in the renewable-energy stable. But even a thoroughbred is going to have a tough time catching up with the supertanker that is the fossil-fueled energy establishment.

Renewable energy sources enjoy excellent prospects in Spain, but there are complaints about business practices in the energy sector and the lack of effective enforcement of environmental standards. ...The companies were allocated free permits by the state, under the European Union's Emissions Trading System (ETS), to emit up to 85.4 million tonnes of CO2 a year from 2005 to 2007. However, the energy companies passed the costs of the permits on to consumers, even though they had not paid for them. The government decreed that the companies involved should return the money, which in 2006 and 2007 amounted to 1.2 billion euros (1.68 billion dollars). In 2008 the companies will have to pay back 1.45 billion euros (1.83 billion dollars) in consumer surcharges. In the face of protests by the companies, the Spanish government replied that after the 2008 elections it will introduce a draft law to replace the decree-law of Dec. 21, 2007, now in force. This will allow in-depth debate and negotiations. The Spanish Electrical Industry Association (UNESA) immediately responded that it would not stand idly by if the proposed law upholds the demand that amounts charged for the free CO2 emission permits be repaid.

Shares in renewable energy companies with assets in the US could see further declines tomorrow on ongoing fears that the US energy bill might be passed this week without including tax incentives for generators and promoters of renewable energy, market sources said. ...Yesterday, website renewableenergyaccess.com reported that the Democrat house leaders in the US are preparing to cede to demands from Republicans and remove all tax breaks for renewable energy companies from the bill in order to push it through parliament before the Thanksgiving break on November 16.

A strong bias toward local producers and rigid price controls hinder European investors from making significant inroads into China's vast energy sector ... "Energy is sometimes also a national battlefield in Europe. But China is even more so." This nationalism, Wuttke said, was reinforced by an antitrust law passed last week that set rules to protect big state power firms from foreign acquisitions and to require potential international investors to meet strict national security criteria. Beijing also requires investors to use 70 percent Chinese equipment in foreign-invested wind farms, and a similar local content requirement was recently slapped on the booming petrochemical sector, which Wuttke said went against China's commitments in 2001 when it joined the World Trade Organisation.

"These facilities are disproportionate to the islands' energy needs, and the majority of turbines installed in the past no longer function anyway," charged Antonia Antonakis, head of the municipal council of Serifos island. Local authorities fear that since wind turbines are usually situated on isolated hills and mountain tops, new roads will have to be built through previously unspoilt countryside, Antonakis said. Though the project on Serifos would involve building 87 turbines, 150-feet high each, this would provide less than a tenth of the country's renewable energy. The Greek industrial group Mytilineos has put in a bid for the project, which is still under consideration by the government.

European power companies are making billions of euros in excess profits in the European Union's battle to beat global warming by cutting emissions of carbon gases, and consumers are paying for it, economists say. The electricity generators are given, free of charge, permits to emit millions of tonnes of carbon dioxide which are currently worth around 20 euros a tonne, but are then charging consumers as if they had been made to pay for the permits. Michael Grubb, Chief Economist at the Carbon Trust and Director of Climate Strategies, calculates that this practice which he says is economically justifiable gives the industry windfall profits of some 20 billion euros ($27.14 billion) a year. "It is free money," he told Reuters. "It's how you'd expect companies to behave, but politically and morally it is going to be hard to justify making so much money out of a scheme designed to reduce emissions - with consumers footing the bill."

The EU Commission remains confident that Britain will deliver on its commitments to increase the use of renewable energy sources, despite doubts expressed in London, a Brussels spokesman said Monday. British officials have told government ministers that the country has no chance of meeting its commitments under European Union plans to raise the proportion of energy made from renewable sources by 2020, a British newspaper reported.

Madrid has passed legislation to allow the installation of offshore wind parks along Spain's 4,000 kilometres of coastline. The move has been enthusiastically applauded by supporters of renewable energies but slammed not only by conservationists who fear the turbines will prove to be a chain of offshore eyesores, but by fishermen as well who are deeply concerned about the effect they will have on the local fishing industry.

A grandiose plan to link Europe's electricity grids may recast wind power from its current role as a walk-on extra to being the star of the show. Plug in your toaster-or your television or your vacuum cleaner-and the electricity that surges through it is an alternating current. The question of whether the world would be powered by direct current (DC), in which electrons flow in one direction around a circuit, or by alternating current (AC), in which they jiggle back and forth, was decided in the 1880s. Thomas Edison backed DC. George Westinghouse backed AC. Westinghouse won. The reason was that over the short distances spanned by early power grids, AC transmission suffers lower losses than DC. It thus became the industry standard. Some people, however, question that standard because over long distances high-voltage DC lines suffer lower losses than AC. Not only does that make them better in their own right, but employing them would allow electricity grids to be restructured in ways that would make wind power more attractive. That would reduce the need for new conventional (and polluting) power stations.