May 21 (Bloomberg) — A unit of Nippon Steel & Sumitomo
Metal Corp., Japan’s largest steelmaker, expects annual sales of
5 billion yen ($49 million) from its geothermal business as
early as 2015.

Nippon Steel & Sumikin Engineering Co. plans to expand its
business in Japan and in countries such as Indonesia, Ryuichi
Kageyama, general manager for the geothermal power business,
said at a briefing today. It also plans to enter plant
operation, maintenance services and power retailing, he said.

The company doesn’t have a comparative figure for current
geothermal sales as there has been little development in Japan
over the past several years, he said. The country’s last
commercial geothermal plant was built in 1999 on Hachijo island,
about 287 kilometers (178 miles) south of Tokyo.

Nippon Steel & Sumikin, based in Tokyo, has supplied steam
production equipment and pipelines for nine of the 17 geothermal
stations currently running in Japan, including the Hachijo
island plant, according to the company.

Japanese companies are renewing their interest in
geothermal energy after the March 2011 nuclear crisis shut down
reactors for safety checks and the introduction of an incentive
program for clean energy encouraged investment.

To contact the reporter on this story:
Chisaki Watanabe in Tokyo at
cwatanabe5@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

May 21 (Bloomberg) — SoftBank Corp. will review solar
projects it’s planning for Japan’s northernmost island because
Hokkaido Electric Power Co. hasn’t approved applications for
power sales, Kyodo News agency reported today.

SoftBank may even consider halting plans for three solar
stations, two in Abira Town and one in Yakumo, Kyodo said. The
three plants were to have a combined capacity of more than 180
megawatts, the agency reported, citing unidentified officials.

The company is considering what to do in the future,
Kenichi Yuasa, a spokesman, said by phone today, adding that
SoftBank isn’t the source of the Kyodo report. SoftBank has
announced two projects in Hokkaido, a 110-megawatt plant in
Abira and a 2.7 megawatt station in Shiraoi, the spokesman said.

Hokkaido, with its availability of cheap land, has drawn
more applications for solar projects than its grid can handle
after Japan began an incentive program for clean energy in July.

Hokkaido Electric has said that it may become difficult to
provide grid connections once connected capacity for solar
plants 2 megawatts or larger reaches about 400 megawatts,
according to a company statement on April 17.

To contact the reporter on this story:
Chisaki Watanabe in Tokyo at
cwatanabe5@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

May 21 (Bloomberg) — The Obama administration is engaged
in preliminary talks with the European Union and China to settle
a dispute over trade in solar-energy equipment and avoid a
conflict among the world’s largest economies, according to
people familiar with the discussions.

The effort is focused on setting a quota on Chinese exports
and a minimum price for solar-energy equipment, in exchange for
suspending U.S. duties on the goods, according to two people
familiar with the U.S. position who asked not to be identified
to discuss private deliberations.

“After expressing our intentions to the White House, we
are very encouraged that these long-needed negotiations appear
ready to proceed,” said John Smirnow, vice president of trade
and competitiveness for the Solar Energy Industries Association.
“It’s time for everyone to work together toward a fair
resolution of these cases.”

Representatives from the Washington-based solar group and
the Singapore-based Asia Photovoltaic Industry Association met
last week in China to discuss the trade disputes, Smirnow said.
A policy resolution by the groups urged the U.S., China, EU and
other nations to enter multilateral talks to quell rifts over
solar-energy goods, he said yesterday in a statement.

Tensions over China’s policies flared in recent months and
each of the partners has either imposed or is considering duties
to limit imports of solar-energy goods. Government support for
renewable-energy products including solar panels has led to
disputes as the price of polysilicon, the main ingredient in
solar cells, has dropped 64 percent since December 2010.

Froman Briefing

Michael Froman, a White House adviser and President Barack Obama’s nominee to head the U.S. trade office, informed senators
in recent weeks that the U.S. is exploring talks with China and
the 27-nation EU, according to a Senate aide, who asked not to
be identified in describing the matter.

The New York Times reported yesterday that the trading
partners are weighing settlements to end the solar-energy cases.

“Our goal is to support a healthy global solar industry in
conditions that foster the adoption of renewable energy and
continued innovation and a level playing field for all,” Carol Guthrie, a spokeswoman for the U.S. trade representative, said
in an e-mail. “We will continue to work with industry and our
trading partners to explore ways to resolve concerns. Active
negotiations have not yet begun.”

Chinese Embassy

John Clancy, a spokesman for EU Trade Commissioner Karel De Gucht, declined to comment. Calls to the Chinese embassy in
Washington weren’t answered. The press office of the Chinese
consulate in New York requested submission of questions by e-mail and hadn’t responded.

The U.S. wants to coordinate with the EU, which is a larger
market and hasn’t yet imposed final duties to block Chinese
goods from being sold in the EU below cost, according to an
industry official. The U.S. wants to avoid giving Chinese
producers a way to bypass a deal with the EU by sending
partially finished equipment to the U.S. for final assembly and
export — duty free — to Europe, the person said.

The manufacture of photovoltaic modules in China grew
sixfold from 2009 to 2011, making China the world’s dominant
producer and leading to a worldwide oversupply and prices below
marginal costs for producing most modules, according to an
annual factbook by Bloomberg New Energy Finance. While that has
pushed down U.S. production, “oversupply on the manufacturing
side has been a boon for developers, as it has contributed to
lower equipment costs,” according to the analysts.

Chinese Production

China, the world’s largest maker of solar panel, has
determined the U.S. and the EU are subsidizing polysilicon and
is preparing to set anti-dumping duties on imports of the
material used in solar panels, according to two people with
direct knowledge of the matter cited by Bloomberg News May 16.

The EU also may set levies of as much as 67.9 percent on
imports of Chinese solar panels to prevent dumping, according to
an EU official who spoke on condition of anonymity May 8.

The U.S. Commerce Department in October set anti-dumping
duties ranging from 18.32 percent to 249.96 percent on solar-energy cells from China, reducing preliminary penalties imposed
on Trina Solar Ltd. and increasing them on Suntech Power
Holdings Co. The duties followed a complaint by the American
unit of Bonn-based SolarWorld AG.

To contact the reporters on this story:
Brian Wingfield in Washington at
bwingfield3@bloomberg.net;
Mark Drajem in Washington at
mdrajem@bloomberg.net

To contact the editor responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net

May 21 (Bloomberg) — Exxon Mobil Corp., which has invested
more than $100 million to develop algae-derived biofuels, is
refocusing its research with Synthetic Genomics Inc. after
almost four years of work failed to produce economically viable
results.

Exxon, the world’s biggest maker of gasoline and diesel,
and Synthetic Genomics “have gained significant understanding
of the challenges that must be overcome to deliver scalable
algae-based biofuels,” Exxon spokesman Charles Engelmann said
yesterday by e-mail. The company, based in Irving, Texas, began
the program in 2009 and said it would invest $600 million to
develop fuels within a decade. It has already spent more than
$100 million, Engelmann said.

Exxon and Synthetic Genomics have been exploring algae as a
source of oil that could be converted in existing refineries to
conventional transportation fuels such as gasoline, diesel and
jet fuel. Algae cells produce lipids, or oils, as they grow that
can be harvested to make fuels. The companies have collected
thousands of wild algae strains that thrive on sunlight and
carbon dioxide and optimized them for oil production using
biotechnology in the lab, though that work has had limitations,
said Synthetic Genomics’ Chief Technology Officer James Flatt.

Results since 2009 have indicated that “simple
modifications of natural algae would not provide a level of
performance that we believed would be economical or viable for a
commercial solution,” Flatt said yesterday by telephone.

The companies currently are placing greater emphasis on
“basic science” to develop algae strains that can reproduce
quickly, yield large concentrations of oils and survive in
varying conditions, Synthetic Genomics said May 16. The next
phase of research will include “more comprehensive changes to
algae metabolism so that they can realize economical levels of
oil production,” Flatt said.

‘Synthetic Cell’

Synthetic Genomics has narrowed down more than 20,000 algae
strains in nature to less than 10 that “we think have the best
potential,” and it will alter their genetic makeup using the
discoveries of its pioneering co-founder, J. Craig Venter, he
said. Venter’s nonprofit institute in May 2010 announced that it
had copied a bacterium’s entire genome and transplanted it into
a related organism, where it functioned normally, becoming the
first life form created entirely with man-made DNA.

Synthetic Genomics can “apply much of what we’ve learned
in developing the synthetic cell to making similar types of
changes to algae,” Flatt said. That differs from changing only
one or two genes at a time, and the “large pieces of DNA” that
are added will program the cells to maximize oil production, he
said. “The ultimate benefit of all that is to speed up the
process.”

Exxon Chief Executive Officer Rex Tillerson said March 7 on
PBS television’s “Charlie Rose” show that its investments in
algae biofuels may not succeed for at least another 25 years.
Engelmann reiterated similar expectations yesterday.

To contact the reporter on this story:
Andrew Herndon in San Francisco at
aherndon2@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

May 21 (Bloomberg) — Hareon Solar Technology Co. led a
rally for Chinese solar companies on speculation the U.S. and
China are seeking to resolve a dispute over trade in solar-energy equipment that could lead to soaring tariffs.

Hareon, a Chinese solar module maker based in eastern
Jiangsu province, jumped by the 10 percent daily limit to 8.02
yuan at 9:45 a.m. local time, adding to a 39 percent rally this
year. Shanghai Chaori Solar Energy Science & Technology Co.
advanced 3.1 percent to 3.61 yuan. Zhejiang Sunflower Light
Energy Science & Technology Co. increased 3 percent to 9.68
yuan. The Shanghai Composite Index retreated 0.2 percent.

The Obama administration is engaged in talks with China and
the European Union, according to people familiar with the
discussions. The preliminary negotiations focus on setting a
quota on Chinese exports and a minimum price for solar-energy
equipment, in exchange for suspending U.S. duties on the goods,
according to two people familiar with the U.S. position who
asked not to be identified to discuss private discussions.

“If trade talks are successful, it would give Chinese
solar companies a chance for a breather,” Xifeng Pan, an
analyst at Northeast Securities Co., said in a phone interview
in Shanghai. “It will be bad if both U.S. and Europe impose
regulations on Chinese companies. If there’s an agreement, at
least the impact is reduced and not so abrupt.”

The U.S. began a probe against Chinese manufacturers in
2011 and the EU in September 2012 after falling solar equipment
prices led to the collapse of companies including Fremont,
California-based Solyndra LLC. The EU plans to levy tariffs of
as much as 67.9 percent on solar panels from China, with the
measures to be announced by June 6, a commerce official from the
bloc, who asked not to be identified, said this month. China
responded by starting probes against the U.S. in July last year
and the EU in November to determine if producers of polysilicon
from those regions were dumping the material.

To contact the reporter on this story:
Weiyi Lim in Singapore at
wlim26@bloomberg.net

To contact the editor responsible for this story:
Darren Boey at
dboey@bloomberg.net

May 21 (Bloomberg) — Japan’s Ministry of Economy, Trade
and Industry plans to provide low-interest loans to companies
that borrow residential rooftop space for solar power
generation, the Nikkei newspaper reported today.

The ministry plans to make loans available through
government financial institutions such as Development Bank of
Japan Inc., the newspaper cited Trade Minister Toshimitsu Motegi
as saying. Motegi will announce the plan tomorrow in a meeting
on industrial competitiveness, according to the paper.

Under the proposal, companies will sell electricity
generated from solar panels set up on homeowners’ rooftop
spaces, according to the paper. Homeowners will receive 10,000
yen ($97) to 20,000 yen a year for renting out their roofs, it
said.

To contact the reporter on this story:
Chisaki Watanabe in Tokyo at
cwatanabe5@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

May 21 (Bloomberg) — Andy Triggs Hodge, a gold medal-winning rower at the Beijing and London Olympics, stopped
training on Britain’s most famous river when it turned out water
wasn’t his biggest obstacle: raw sewage on the Thames was.

The capital’s sewer network, built by Victorian engineers
after the “Great Stink” of 1858, can’t cope. Too many people,
too much waste. Thames Water Utilities Ltd. apologized in
January after London properties were damaged by sewage overflow.

Help is on the way. A 4.1 billion-pound ($6.2 billion)
“super-sewer” is on the drawing board, the longest and deepest
tunnel ever to be built in mainland Britain and set to follow
the Thames for 20 miles, passing such landmarks as Buckingham
Palace. Kemble Water Holdings Ltd.’s Thames Water unit, with 14
million customers in the London area, hired UBS AG to help raise
as much as 3.5 billion pounds for the works.

“Once you explain to people that the river banks their
children are playing in are not actually mud at all, they
support the project,” Michael Gerrard, managing director of the
Thames Tideway Tunnel project, said in an interview.

The existing sewer network’s tunnels and arched caverns
were constructed to serve half the current population. This
means at least 30 million tons of excrement and waste spill into
the river every year, sometimes remaining in the water as long
as three months before washing out to sea.

No wonder the English rower Triggs Hodge, 34, took his
training to Reading. Powering oars through toilet paper,
effluent and other unmentionables while practicing on the Thames
took a toll on the double World Champion.

“In the summer when things warmed up, the sewage and
debris that collected on the riverbanks got pretty smelly,” he
said. “The effects on our health became a major concern.”

Laws Breached

That’s exposed the U.K. to potential fines for breaching
European law on treatment of wastewater. Penalties could amount
to 620,000 pounds each day Britain is deemed in breach, or as
much as 226 million pounds a year, according to Thames Tideway.

The European Court of Justice in October ruled the U.K.
failed to meet its obligations. The commission said it’s too
early to speculate how much any fine may be.

The complexities of building a 7.2 meter-wide (24 feet)
concrete tunnel extending west to east along the course of the
river will require a new type of funding solution, according to
the project’s financial adviser KPMG LLP.

Tight government pockets, and the late Prime Minister
Margaret Thatcher’s 1989 privatization of the industry, point to
a privately financed plan. The problem is finding investors for
such project risks, said Richard Threlfall, head of the firm’s
U.K. infrastructure, building and construction unit.

‘Sheer Amount’

“It’s about the sheer amount of finance required and the
risk of tunneling 100 meters underneath the Thames,” he said.
“When you get to that scale, it’s impossible for even the
biggest international contractors to take the risk on balance
sheets.”

To lure investors, Thames Tideway proposes to separate out
the tunnel as a single asset, concentrating risk in one vehicle.
That company will raise debt and equity in the markets and from
sovereign wealth and pension funds, according to Threlfall.

Plans for the tunnel that would intercept overflow points
along the river and shunt excess sewage to treatment plants are
being finalized, with construction to begin as early as 2016
amid a wider government effort to secure investment in its aging
infrastructure.

Investor Returns

The government agreed to give contingent financial support
to cover “exceptional risks” in its 2011 National
Infrastructure Plan. The model will receive special treatment by
Britain’s water regulator, giving investors certainty of no
changes during their investment period.

The plan is unprecedented, ripe for replication elsewhere
for similarly scaled or high-risk projects, Threlfall said.

The financing model will help drive returns to investors in
line with the water industry, or about 10 percent, according to
Thames Tideway’s Gerrard.

Infrastructure and pension funds, current investors in U.K.
water, are likely to avoid those construction risks, said
Christopher Gasson, publisher of Global Water Intelligence in
Oxford, England.

The project will need a “reasonably sizable” government
guarantee, he said. “If you are a sewer rat, you will probably
have to make do with your current accommodation.”

Improvements couldn’t come soon enough for Triggs Hodge.

Changing weather patterns mean short, sharp downpours are
more frequent and overflows are increasing, according to Triggs
Hodge and the Friends of the Earth group.

Sewage Spills

As little as 2 millimeters (0.08-inch) of rain can cause
some London sewer tunnels to reach capacity and spill untreated
waste into the Thames from 57 overflow points.

Raw industrial, animal and human sewage in the river that
fermented in a warmer-than-usual summer spurred creation of the
current sewer system after Parliament drapes were doused in a
mix of chloride and lime in 1858 to negate the stench and
lawmakers debated relocating upsteam to cleaner air.

As it is, about once a week untreated sewage overflows into
the river. “People have no idea how bad the situation is,”
Thames Tideway’s Gerrard said.

The lack of a system large enough to cope with London’s
rising population is hampering growth as the city seeks to add
new homes and businesses to revive Britain’s economy, according
to Thames Water, the U.K.’s largest water supplier that’s
proposing the “super sewer” to expand capacity.

Singapore Example

Tunnel program manager CH2M Hill Inc. is working on similar
projects in Doha, Abu Dhabi and Singapore, which is investing
more than $2.4 billion digging tunnels to collect and treat its
waste. Cities including Helsinki and Washington have similar
projects, and Paris has a 3.4 billion-pound program to invest in
upgrading its network.

“The European water utility industry is facing significant
challenges in these uncertain times,” said Jonathan Refoy, a
spokesman from CH2M. “Many of these change drivers — workforce
shortages, customer demands, financial constraints, aging
infrastructure, security and emergency response, population
growth, climate change, regulatory compliance — have been
around for some time but many are new or emerging.”

It’s time for change, said Jenny Bates of Friends of the
Earth. “Having raw sewage entering the Thames untreated is
unacceptable in the 21st century.”

Fish Deaths

As many as 125 species of fish have been documented in the
Thames, including salmon, sea trout and eel, and there have been
several “really bad” incidents when large numbers died due to
sewage overflows, Bates said. In June 2011, overflow into the
river after heavy rains caused the loss of as many as 26,000
fish, according to Thames Water.

The Tideway tunnel is designed to help. It’s the largest of
three projects being developed by Thames Water to boost network
capacity. The utility is investing 675 million pounds to upgrade
five of the city’s main sewage treatment plants by 2014 and is
also building the Lee Tunnel to deal with spills into the Lee
River, a Thames tributary.

The cost won’t be insignificant. London residents can
expect to see annual wastewater bills, which at about 123 pounds
are the lowest in the country, rise about 70 pounds to 80
pounds, or 57 percent. This would bring them in line with the
national average, according to Thames Water.

The project’s latest plan involves 24 construction sites
across London. With work expected to start within three years,
the tunnel should be operating by 2023.

A planning application for the project that will capture
untreated waste from 34 of the river’s most polluting overflow
points was submitted in March.

Meanwhile, Triggs Hodge rarely rows on the Thames except
for one or two race events.

“Literally what you flush out of your toilet will appear
in the river and just because the pipes aren’t big enough and
there isn’t the capacity,” he said. “The bottom line is the
river is an excellent venue for rowers. Its potential is huge
and it’s such a shame.”

To contact the reporters on this story:
Louise Downing in London at
ldowning4@bloomberg.net;
Sally Bakewell in London at
sbakewell1@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

May 20 (Bloomberg) — Ecopower SAC, a Chilean renewable-energy developer, filed for permits to develop a $250 million
wind farm in the country’s Los Lagos region.

Work on the 100.8-megawatt Chiloe project is expected to
start in January 2016, the Santiago-based company said today in
a filing with environmental licensing agency Servicio de
Evaluacion Ambiental.

The wind project will include 42 turbines, each with a
capacity of 2.4 megawatts, and a 28.1-kilometer (17.5-mile)
power line, according to the statement.

To contact the reporter on this story:
Stephan Nielsen in Sao Paulo at
snielsen8@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

May 17 (Bloomberg) — Water service will be restored today
after a three-day outage in parts of Caracas, capital of South
America’s biggest oil producer, the Venezuela state news agency
AVN said.

A water pipeline failure that the state company
Hidrocapital said was caused by valves at La Gauirita treatment
plant cut supplies to southeast and northeast areas of the
nation’s most populous city for much of the weekend, AVN said on
its website. Water supplies yesterday were 37 percent lower than
normal, Hidrocapital said in a website statement.

To contact the reporter on this story:
Nathan Crooks in Caracas at
ncrooks@bloomberg.net

To contact the editor responsible for this story:
Randall Hackley at
rhackley@bloomberg.net