Beyond that challenge, though, is another one that doesn’t always get as much public attention: how to incorporate the impact of renewables into energy trading markets.

Making our power grids “smarter” and cleaner can affect energy trading markets in a number of ways. For one, by creating so-called “supergrids” that connect many smaller and more local grids, energy buyers and sellers will have a wider, more competitive market open to them … with all sorts of new implications for prices.

For example, the Tres Amigas SuperStation project being developed in the southwestern US will link three regional grids that until now have operated as virtual energy islands, with little electricity exchanged among them. Once in place (the project is set to begin early operations in 2015), those links have the potential to “revolutionize” US power markets, according to Tres Amigas LLC.

“The SuperStation’s ability to transmit, for the first time ever, significant amounts of power across the three main US interconnections will increase the value of regional transmission investments, both in place and planned, due to the newly created enhanced ability to use those assets,” the developer says.

Managing and selling all that power through a single hub will also make it possible, for instance, for energy-hungry cities on the East Coast to purchase electricity generated by solar farms in the Southwest. That could encourage more development of wind and solar in areas where local demands alone aren’t enough to justify further building.

Enabling such wider-reaching, more competitive energy markets will take wider-reaching, more advanced data sharing and analytical capabilities as well. Tres Amigas, for example, is partnering with Mitsui to help ensure its smart-grid system is backed with plenty of smart computing as well.

As Tres Amigas president, chairman and CEO Philip Harris has said, “Apart from the purely electrical engineering aspects of the project, the commercial operation of the SuperStation requires intensive use of information systems and technology, as well as management of large-scale infrastructure.”

The giant energy and infrastructure company Siemens also sees opportunity in support for smarter, more nimble energy markets. It announced today that it’s collaborating with IT services provider Atos to together develop integrated software for optimizing both power generation and energy trading. The joint development is “designed to significantly boost the profitability of power generation and trading by optimizing the bid creation and by providing a seamless data flow at IT level. This furthermore saves costs for integration and reduces the project risks.”

“The cooperation with Atos puts us in a position to offer our customers an IT solution that covers their entire value chain,” said Jan Mrosik, CEO of the smart-grid division in Siemens’ Infrastructure and Cities Sector. “At the same time, a single source of supply reduces the project risk significantly when introducing or exchanging tools of this type.”

The Siemens-Atos “joint Resource Optimization and Scheduler” (jROS) “offers a seamless data flow between generation planning and energy trading, allowing faster decisions to be made in the bidding process on energy exchanges and for bilateral trading.”

For all the challenges the clean-power sector has faced in the past year — fast-dropping prices for solar panels, stiff competition from Chinese manufacturers and a number of high-profile bankruptcies — renewables have not only proven themselves in the market, but in some cases (as with solar) are coming close to price parity with traditional fossil fuels. That’s good for the environment and consumers  … if not always for the companies that make and install clean-energy technologies.

The market has now clearly moved into the maturing stage, with lots of action in mergers and acquisitions last year: a record $53.5 billion in deals in 2011, according to PwC. That’s 40 percent more than in 2010 ($38.2 billion). Of all the deals last year, one out of three involved solar energy.

If renewables were already enjoying good momentum, they got an extra boost following the March 2011 Japan earthquake and tsunami, which set in motion the Fukushima nuclear reactor disaster that’s still ongoing. In the wake of the nuclear plant disaster, countries like Germany and multinationals like Siemens have both announced plans to abandon nuclear power.

Nor are continued economic uncertainties, especially in Europe, likely to dampen development of the clean-energy industry into 2012 and beyond. By now, there’s enough big money in the sector to keep the renewables ship moving forward despite financial headwinds.

“Staying out of the markets in the hope things will improve cannot be assumed to be the right strategy,” said Paul Nillesen, a partner at PwC renewable. “The potential for further destabilization domestically, or at an inter-governmental level cannot be ruled out, but if a deal is highly strategic, and mission critical, then parties will still feel it is worth doing on the right terms.”

Such a program — called on-bill repayment — could hold the secret to finally getting more homeowners to invest in household energy-efficiency improvements. The Environmental Defense Fund (EDF), which has outlined just such a plan for the state of California, says the system could overcome the biggest obstacles currently facing home-focused energy-efficiency projects:

• Penny-pinching homeowners find it hard to shell out upfront cash for efficiency improvements, even if those more than pay for themselves over time. Owners of apartment buildings and commercial structures are also reluctant to make such investments, since their tenants are the ones who would reap the benefits of lower energy bills.
• On-bill repayment would make improvements with longer-term returns — rooftop solar panels, for example — more palatable by spreading out payments over a longer-term as well.
• Attaching the cost of energy efficiency work to utility bills gives building owners, as the EDF says, “a very strong incentive” to repay … as most people don’t enjoy having their electricity cut off for non-payment.

The California Public Utility Commission believes the idea is promising and has set a public comment period and workshops to explore the program. With a commission decision possible this April, a statewide program for on-bill repayment could begin as early as 2013, according to the EDF.

That’s the bottom-line message in “Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication,” the latest report from the United Nations Environment Programme. The study also finds that a large number of countries — from China and Armenia to South Korea and Ukraine — are promoting that message through a wide variety of green initiatives.

“With the world looking ahead to the Rio+20 UN Conference on Sustainable Development in June 2012, the UNEP Green Economy report challenges the myth that there is a trade-off between the economy and the environment,” said UN Secretary General Ban Ki-moon. “With smart public policies, governments can grow their economies, generate decent employment and accelerate social progress in a way that keeps humanity’s ecological footprint within the planet’s carrying capacity.”

The report, based on three years of research involving hundreds of experts from around the globe, underwent a three-month public review before its release. Its key finding is that an investment of just 2 percent of global GDP, distributed across 10 sectors, would be enough to kick-start a worldwide green economy. Furthermore, such a green economy would likely grow at least as quickly — if not more quickly — than the current business-as-usual economy.

Other findings highlighted in the report:

• A global green economy would produce per capita incomes higher than those under current economic models, while reducing the ecological footprint by nearly 50 percent by 2050.
• While some short-term job losses in some sectors — fisheries, for example — are inevitable, the number of “new and decent” green jobs created over time will offset those losses.
• China has become the world’s top investor in renewable energy, spending $49 billion in 2010. It’s also committed to more than doubling that over the next five years, with a commitment to spend $468 billion on renewable energy, clean technologies, waste management and other industries.
• Other countries — including Barbados, Cambodia, Indonesia, South Korea and South Africa — already have national green economy plans that reflect the recommendations of the UNEP report. And many — among them, Armenia, Azerbaijan, Egypt, Kenya, Jordan, Malaysia, Mexico, Nepal, Senegal and Ukraine – are focusing on greening priority sectors such as agriculture, renewable energy, tourism and clean technologies.

“The elements of a transition to a green economy are clearly emerging across developing and developed countries alike,” said Achim Steiner, UN Under Secretary General and executive director of UNEP. “There are now some nations going further and faster than others which is in many ways generating a ‘pull factor’ that, if maintained, may bring others along over the coming months and years.”

Citing both the dramatic drop in prices for solar photovoltaics (PV) and the rapid pace at which British homeowners took advantage of the tariffs to install solar panels on their homes, Climate Change and Energy Minister Greg Barker today announced a proposal to slash PV feed-in tariffs from 43.3 pence per kilowatt-hour to 21 pence per kilowatt-hour. The tariffs, which provide payments to homeowners for the solar energy they generate, apply to installations up to four kilowatts in size.

Introduced just a year-and-a-half ago, in April 2010, the feed-in tariffs were designed to encourage residents and businesses to install a variety of renewable energy technologies, from solar panels to anaerobic digestion systems. The tariffs for photovoltaics generated the greatest number of responses by far, resulting in more than 100,000 solar installations — more than three times as much as the government had initially projected — with a total capacity of over 400 megawatts.

That response threatens to drain available funding at current rates, Barker said.

“My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust,” he said today in announcing the proposed rate cutes. “The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.”

Jeremy Leggett, CEO and founder of Solarcentury, is among the solar energy business leaders who are railing against the government’s decision. He has called the move a “debacle” that poses an “existential threat” to the country’s nascent solar industry.

“Thousands will be out of work … ,” he said, though, “not without much, much noise.” He also noted with some irony that, on the same day the government announced the FiT cuts, it also gave approval for two new new power plants — one waste- and biomass-to-energy, the other a combined-cycle gas plant — with a total construction tab of nearly £1 billion.

Members of Britain’s Solar Trade Association have launched a “Cut Don’t Kill” campaign in favor of less biting subsidy cuts, and are planning to stage public protests at government offices.

The “restructuring” aimed at increasing corporate efficiency and lowering manufacturing costs calls for the cutting of some 750 full-time positions, the sale or closure of six of the company’s 31 manufacturing facilities and the reduction of operations at “several” other plants. All told, the measures are expected to save Itron about $15 million in the second half of 2012, for an annualized cost savings of around $30 million.

LeRoy Nosbaum, Itron’s president and CEO, cited increased market competition and changing operation needs as reasons for the change.

“This is a difficult but necessary decision that will better position Itron to succeed in today’s increasingly competitive market and create value for stockholders,” Nosbaum said.

Set to take place over the next 15 to 18 months, the changes will also include the disposition of “certain non-core businesses.”

“We are confident that our disciplined approach to increasing manufacturing utilization will simplify our operations and lower our costs,” Nosbaum said.

The announcement came on the same day Itron released its third-quarter 2011 financial results, which showed quarterly revenues of $616 million and a GAAP net loss per share of $12.70. Its financial report also showed a $540 million non-cash “goodwill impairment charge” related to its 2007 acquisition of European metering firm Actaris. Some of the facilities set to be closed were those acquired through the Actaris purchase.

In releasing its third-quarter results, Itron also announced plans to repurchase $100 million in common stock over the next 12 months.

And, believe it or not, there’s some big money behind that support, too.

To bring that message home, three climate-focused investor groups put out a statement today urging governments and policy-makers to take “new and meaningful steps in the fight against climate change.” Together, those groups – the US-based Investor Network on Climate Risk (INCR), the European Institutional Investors Group on Climate Change (IIGCC) and the Investors Group on Climate Change (IGCC) in Australia and New Zealand — include 285 investors representing more than $20 trillion in assets.

The statement, which sets out recommendations for both domestic and international policies, concludes:

“Investment-grade climate change and clean energy policy will provide substantial economic benefits. Those countries that succeed in attracting private capital into low-carbon growth areas such as cleaner and renewable energy, energy efficiency and decarbonisation will enjoy multiple benefits, including new jobs, new businesses, new research and technology innovation, more resilient and secure energy systems and, ultimately, more sustainable economies.

“Private investment can and must play a critical role in addressing the risks and opportunities posed by climate change. However, private sector investment will only flow at the scale and pace necessary if it is supported by clear, credible and long-term domestic and international policy frameworks — ‘investment-grade climate change and energy policies’ — that shift the balance in favor of low-carbon investment opportunities.”

Also signing on to the statement were the United Nations Environment Programme Finance Initiative (UNEP FI) and the Advisory Council of the Principles for Responsible Investment (PRI).

“Climate change will transform economies throughout the world, creating new opportunities for investors,” said Wolfgang Engshuber, chair of the Advisory Council of PRI. “However, these will gain traction only if governments play their part in laying down well-designed and effective climate change policies. Without such a supportive regulatory environment, we will not see the level of investment that is needed to transform the world’s energy supplies and transport systems.”

The level of backing behind the statement indicates just how much support for a greener economy has grown, despite the ongoing economic weakness. A similar pronouncement issued in November 2008 represented just 150 investors with less than half the assets ($9 trillion).

Sent to the G20 and other governments in advance of the United Nations Framework Convention on Climate Change starting in Durban, South Africa, late next month, the statement recommends the following:

• Governments should define clear short-, medium- and long-term greenhouse gas emission goals and targets, along with comprehensive and enforceable legal mechanisms and timelines.
• Lasting financial incentives should be created that shift the risk-reward balance in favor of low-carbon assets.
• Lasting and comprehensive policies need to be designed to accelerate the deployment of energy efficiency, cleaner energy, renewable energy, green buildings, clean vehicles and fuels, among others.
• Governments worldwide need to keep working toward a binding international climate change treaty that includes all major emitters and sets short-, mid- and long-term greenhouse gas emission reduction targets.
• Leaders need to support the development of the Green Climate Fund and other comparable funding mechanisms.
• Governments need to speed up their efforts to reduce emissions from deforestation and forest degradation.

“The type of smart finance we are calling for, one that clears the way for the low-carbon economy’s vast business opportunities, could prompt the reversal of the current climate of economic insecurity,” said Paul Clements Hunt, head of UNEP FI. “It holds the potential to act as a major driver of growth and job creation.”

The global organization’s new customer agreements indicate that, contrary to the currently popular mainstream media meme, the green-energy economy is real and continues to grow. That doesn’t mean, though, that fossil fuel power is suffering.

GE Energy’s latest customer deals include:

• More than $800 million in new commitments for wind and gas turbines for projects in Brazil targeted to produce 1.4 gigawatts (GW) of electricity, including at least 378 megawatts (MW) of wind power and more than 1 GW of power from natural-gas-driven, combined-cycle technology.
• Potential contracts of up to $230 million to provide subsea and surface oil and gas development equipment to Brazil’s OGX Petróleo e Gás Ltda.
• Two contracts valued at $300 million for gas-turbine equipment for two new combined-cycle power plants near Cairo. The projects are expected to add 2,250 MW — 10 percent of Egypt’s total capacity — to the country’s power grid.
• An agreement to provide Australia with technology for what’s expected to be the world’s largest floating liquefied natural gas (FLNG) platform.The project brings to $1 billion the total value of LNG contracts awarded globally to GE by different companies in the first nine months of 2011.
• More than $1.5 billion in new commitments for GE’s 1.6-100 wind turbine, with 750 new turbines headed for wind farms in North and South America over the next two years.
• A first-ever agreement in the food and beverage sector. Under its new partnership with global brewer Anheuser-Busch InBev, GE will help to develop manufacturing solutions for energy efficiency and water savings in more than 35 existing and “greenfield” Anheuser-Busch InBev facilities across China.
• A $40 million deal to provide technology for enhanced oil recovery operations to increase production in BP Iraq-N.V.-British Petroleum’s Rumaila oil field of southern Iraq.
• A multi-year agreement to help Mass Global Investment Company maintain the performance of 18 GE gas turbines at power plants in the Kurdistan region of northern Iraq.
• A deal to provide on-site power and water treatment solutions for Queensland Gas Company’s Australian coal seam gas-to-LNG project. Queensland Gas is developing the world’s first LNG project based on gas from coal seams.
• An agreement to install advanced gas-turbine technology at a new power plant in Indonesia.
• A $50 project to provide gas engines and waste heat recovery technology to Gruppo AB, which aims to provide a packaged solution in Europe based on biogas from manure, corn and other crops.
• A 25,000-smart-meter installation in Ecuador.
• An evaporative technology deal to treat and recycle wastewater at Grizzly Oil Sands ULC’s Algar Lake project near Fort McMurray, Alberta, in Canada.

“Energy technologies — from exploration to power generation — are in high demand by our customers, particularly in emerging markets,” said GE Vice Chairman John Krenicki. “Our investments in technology development and recent acquisitions are enabling us to bring advanced products to help our customers improve their energy-intensive processes.”

Senate Bill 1652 would have allowed Illinois utility companies to impose annual, automatic rate hikes for the next decade to pay for grid improvements. Quinn and other opponents said the legislation would have eroded “more than a century of consumer protections.”

Ironically, the same argument many electric companies have used to promote development of a smarter grid — the need for more resilient, responsive and self-healing energy systems — backfired in Illinois, with foes of the bill pointing to major power outages this summer as a reason to question the capabilities of the state’s utilities.

“More than 1.5 million people and businesses have had to deal with power outages and services disruptions this summer,” Quinn said upon vetoing the measure. “Now these same utilities are trying to change the rules to guarantee themselves annual rate increases and eliminate accountability. I will not support a bill that contains sweetheart deals for big utilities, which could leave struggling consumers to pick up the tab for costs such as lobbying fees and executive bonuses. We can ensure innovation and investment in our electric grid, and create new jobs, without compromising core safeguards for Illinois consumers.”

Earlier this summer, Illinois utility ComEd cited the results of an analysis by Black & Veatch that found smart metering could save its customers $2.8 billion over 20 years over and above the savings from more efficient electricity use. ComEd president and chief operating officer Anne Pramaggiore said the proposed utility bill — known as the Energy Infrastructure Modernization Act — could pave the way for such smart metering improvements to begin being deployed starting in 2012.

“As other states are building more efficient and reliable electric grids, Illinois is in danger of falling behind,” Pramaggiore said in August. “The jobs and economic development opportunities generated by this investment will provide a much-needed push to our state’s economy. Coupled with new pricing options and opportunities for customers to lower their electricity bills, this legislation will positively benefit every one of our customers.”

The bill vetoed by the governor had been approved by both houses of the Illinois General Assembly in May.

Quinn and other opponents of the legislation voiced support for smart-grid improvements, though not as financed in the bill. Upon exercising his veto, the governor said he backed the grid-improvement reforms proposed by the Illinois Commerce Commission and detailed in an amended bill under consideration by the state House of Representatives.

The financing round was led by Foundation Capital, with participation from Kleiner Perkins Caufield & Byers, Advanced Technology Ventures and TriplePoint Capital. Aquion had previously received funding from Kleiner Perkins Caufield & Byers and the US Department of Energy.

The new investment comes at the same time that Steve Vassallo of Foundation Capital and Bill Wiberg of Advanced Technology Ventures join the Aquion board of directors.

Aquion has developed a sodium-ion, aqueous electrolyte battery designed to support renewable energy technologies and improvements to the existing electrical grid. Its technologies and products — which feature no hazardous materials, corrosive acids or noxious fumes — originated from research at Carnegie Mellon University.

The company expects to begin shipping its first pre-production energy storage systems to outside test facilities and certain partners this fall. It’s also in the process of choosing a site for its manufacturing facility, which is expects to open in 2013.