I was going to use Mitch's quote to set up my feature in TIME this week. But while I was reporting out my story, I (almost literally) stumbled upon a piece of junk that I used instead. Still, Mitch's quote is a killer.

One of the manufacturers actually offers a "Downgrade to Windows XP" feature. I am not making this up. "You can easily uninstall Windows Vista, and install XP," the spokesman assured me. (This stuff was embargoed, otherwise, I'd tell you who.) He pointed out that this was a big problem for business users: They get a new lappy, take it to their IT guy for the corporate build, and the first thing he does is rips out Vista and replaces it with XP. The user has to then go and figure out how to get all the drivers to work with his new, fab, laptop. But now, with the new Uninstall Vista feature? You can automatically replace all your drivers. That new laptop will be as good as old!

It's a terrific point of competitive differentiation between this laptop maker and others. As I said yesterday, these are hard times for Mister Softie.

So where's video dial tone?

[Read the rest of my TIME Magazine column here.]

Technology put a man on the moon, but it has yet to enable the average Joe to make a perfect shot of espresso. Scores of websites are devoted to this topic. For my money, none is better than Coffeegeek.com which I scoured some years back to come up with my current rig: a Rancilio Silvia. I adore Miss Silvia and use her daily while my dog Sticky sits at my feet. But the machine is for people who like to fiddle--and not everyone wants to grind beans, pre-heat demitasses, tamp at just the right pressure, "temperature surf" and do all the other hoo-ha necessary to produce a perfect shot (or "God shot," as they call it on Coffeegeek). Even the lazy have a right to God shots at home, I suppose.

(Read the rest of my column here.)

Stuff I didn't have room for in the magazine: One disadvantage of the Francis Francis X7 is, you must use Illy's coffee capsules. Not that the coffee is bad—it's delicious, if you want a classic cup of Italian espresso. But it limits you.

Indeed, for the past few years, I've been using Miss Silvia to make my version of Cuban-style, cafe con leche. I buy delicious, whole beans, from a site in Miami, Java Cabana. My pick: Pilon Gourmet Espresso beans, by the case. It's cheap--only $6.60 a pound--and shipping is free. I grind the beans every morning in my Mazzer Mini burr grinder and make triple espresso shots, which I mix with a lovely combo of milk and evaporated milk. It doesn't get any better than that.

Upping the stakes in its ongoing battle with the popular social network, Google announced today that it was getting into the "social plumbing" business — giving every website a way to add a limitless number of applications and a means for those sites' users to communicate among themselves.

The initiative is called Friend Connect and it begins tonight when any site can apply to be in the Google pilot program (they call it a "preview release") here. Note: that site won't be live until Monday night. During the next few days, Google will choose one or two dozen sites to participate. Over the course of the next several months, the company will collect site, user and developer feedback on how the program is working. Then, if all goes well, in a few months Google will open up Friend Connect to any website or blog that wants to participate.

Here's how it'll work. (And forgive me for using my blog as an example; we need the traffic.)

(The rest of my time.com story is here.)

Facebook Wants to Friend You

Last night, I was in New York for the Time 100 dinner, and arrived at the same time as Craig Newmark. There was a long, red carpet out front and people lined up at the curb to see the celebs. (Robert Downey Jr., Rupert Murdoch, John McCain, Mariah Carey & etc.) Mike Arrington, Jay Adelson, Jeff Bezos, and Mark Zuckerberg were among the geeks honored this year.

One of the things about the 100 is, once you're inducted, you can return to future Time 100 dinners—which is why Craig was there. As we walked in, he told me he'd been to three so far. I trotted along behind him but stopped when we had to go through a kind of chute that was lined with with photographers. "Who are you?" one of them yelled. "Craig Newmark," said his publicist. I hung back with her as Craig sauntered onto the firing line.

You would have thought Paris Hilton had just arrived. The paparazzi went nuts, blasting away at old Craig. I figured he'd be mortified, but no, he was clearly enjoying himself and even pulled out a Coolpix and snapped some shots of the shooters shooting him. "For my blog!" he explained. I wish everyone were sa sweet as that guy.

Immortalized in Episode Two of Sn4tchbuckl3r's's Second Chance. Thanks, guys!

Two words: Marc Andreessen. I suspect he'd never join Facebook's board if he thought that selling out to Microsoft was an option. (I love taking  one rumor to debunk another.)

He's the artist whose "Chrome Tulips" decorated Google's minimalist search box yesterday morning. Lovely stuff. Beneath the empty box was a link to something called iGoogle Artist Themes ("What happens when great art mixes with your homepage?") Users who clicked on the link got to choose from among 70 artists' "themes." From the likes of such commercial artists as Marc Ecko, Diane von Furstenberg, NIGO, Michael Graves and Dolce Gabbana, users could select a theme and personalize their iGoogle page, a place that Google dearly hopes will quickly become your start page.

It seems pretty sweet. More free stuff from Google! And, by the way, raise your hand if you never used iGoogle or even knew it existed.

Read more on Time.com

[Image]

From David Carr's column today on Rupert Murdoch's gut renovation of the Wall Street Journal:

There is certainly no evidence that Mr. Murdoch has turned the newspaper into a tool of his business or political interests — something that had been widely feared and predicted. But there are clear signs that a sui generis business paper is fast becoming a very common general-interest paper, albeit one with a really dynamite business section.

Hmmmm, hang on a second... You mean the Journal might be veering more directly into competition with Carr's employer, the New York Times? Carr continues:

Mr. Murdoch has a few more billions to his credit than I do, but the paper looks to me to be surrendering much of its fundamental value. In order to make The Journal a first-read, Mr. Murdoch and Mr. Thomson are toying with the interest of those of us who have always thought of it as a can’t-miss second read.

Right, it'll never work. Better to keep the Wall Street Journal exactly what it was... Oh wait, this just in:

Circulation numbers for the six-month period ending March 31, 2008:
* New York Times down 9.2% on Sunday, 3.8% daily
* Wall Street Journal up 0.3%
(From Editor & Publisher)

As you may know, Green Wombat moved to Fortune Magazine some months ago. I have been mirroring the Fortune posts here on the old Business 2.0 site until Fortune added e-mail subscriptions and other features.

That now has all been done and I will no longer be updating this version of the blog, which will be shut down soon. So please bookmark the Fortune Green Wombat, where you'll find the entire Wombat archive.

cheers,

Green Wombat

California utility PG&E on Tuesday announced contracts to buy up to 900 megawatts of electricity generated by solar power plants to be built in the Mojave Desert by BrightSource Energy. It’s one of the biggest solar deals to date -- enough to power some 600,000 homes -- and is another sign that that the shift from fossil fuels to carbon-free energy is well underway, at least in California.

But is it too late? PG&E (PCG) first announced it was negotiating a power purchase agreement with BrightSource, then called Luz II, on Aug. 10, 2006. Around that time, the United States’ leading climate scientist, NASA’s James Hansen, warned that the world had only a decade to take drastic action to cut carbon emissions and avert a global catastrophe from global warming.

It took nearly two years alone to just hammer out the PG&E-BrightSource deal and the world now has eight years left to radically ramp up alternative energy sources. By the time the first BrightSource 100-megawatt solar power plant (image above) goes online it will be 2011 and the last one will begin generating electricity for PG&E just as the climate change alarm clock goes off. If you believe Hansen, hitting the snooze button will not be an option.

Of course, there’s no guarantee the BrightSource plants will actually be built — it will take billions to construct them and the investment climate is not exactly sunny these days, clouded by Wall Street’s meltdown and the looming expiration of a crucial solar investment tax credit. (Personally, Green Wombat is betting BrightSource pulls it off — though April Fool’s Day probably was not the best date to unveil such a deal. The Oakland, Calif.-based company was founded by solar pioneer Arnold Goldman, its CEO, John Woolard, hails from Silicon Valley and the startup is backed by Morgan Stanley (MS) and some savvy venture capitalists.)

Given the moral and regulatory imperative — California utilities must obtain 20 percent of their electricity from renewable sources by 2010 and a third by 2020 — why is large-scale solar proceeding at the pace of a Mojave Desert tortoise? (Almost three years ago, for instance, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) unveiled agreements with Phoenix’s Stiring Energy Systems to buy up to 1,750 megawatts of solar electricity. Ground has yet to be broken on any of the planned power plants.)

Partly it’s because the years-long negotiations between utilities and solar power plant companies is something of a black box. Details of these power purchase agreements are kept confidential but are estimated to be worth billions — if a recent $4 billion dealstruck by utility Arizona Public Service with solar power plant builder Abengoa Solar is any indication. Regulated utilities are by their nature big and bureaucratic and can be expected to be extra-cautious when they’re placing bets on untried solar technology from companies like BrightSource and Ausra.

“Transactions of this magnitude require a fair amount of time to negotiate and due diligence must also be performed,” PG&E spokeswoman Jennifer Zerwer told Green Wombat in an e-mail. “The original [BrightSource agreement] announced in August 2006 was for 500 megawatts; the final agreement expanded on the original . . . and culminated in the execution of five separate power purchase agreements for up to 900 MW.”

Another factor is a regulatory structure that is an artifact of the fossil fuel age. California requires extensive environmental review of new power plant projects — be they clean and green or down and dirty — a process that can take a 18 months or more. And the best solar sites often are on federal land in the Mojave — securing a lease for that land is another 18-month-long process.

Still, when the United States faced a threat of a different kind in World War II, it retooled its factories in a matter of months to produce planes and tanks. The fight against global warming will require a similar agility.

The clock, after all, is ticking.

Southern California Edison plans to install 250 megawatts’ worth of solar panels on commercial rooftops, generating enough electricity to power 162,000 homes.

It’s a potentially game-changing move, one that could lower the cost of solar cells as manufacturers ramp up production to meet the utility’s schedule of installing a megawatt-a-week of arrays until it reaches the 250-megawatt target. That alone is more than United States’ entire production of solar cells in 2006 and will produce as much electricity as a small coal-fired power plant, albeit with no greenhouse gas emissions. “This project will turn two square miles of unused commercial rooftops into advanced solar generating stations,” said John Bryson, CEO of the utility’s parent company, Edison International (EIX), in a statement Wednesday night.

The $875 million initiative also marks the first big move into so-called distributed energy by a major utility. Instead of building a centralized power station and the expensive transmission system needed to transmit electricity to the power grid, Edison will connect clusters of solar arrays into existing neighborhood circuits. A significant hurdle for the massive megawatt solar power plants planned for California’s Mojave Desert is the need in some cases to build multi billion-dollar transmission systems through environmentally sensitive lands to bring the electricity to coastal metropolises.

Solar arrays of course only generate electricity when the sun is shining, but they produce the most power during the hottest part of the day when Southern Californians crank up their air conditioners. The arrays could help spare Edison from having to fire up a fossil-fuel power plant when demand peaks.

Edison spokesman Gil Alexander told Green Wombat that the utility expects the project’s scale to allow arrays to be placed on roofs at half the cost of a typical installation. Edison’s ambitions could prove a boon for solar cell makers like SunPower (SPWR) and Suntech (STP) as well as solar installation companies such as Akeena (AKNS). One unknown is whether the demand created by Edison will drive up costs in the short term, given ongoing shortages of polysilicon, the base material of solar cells. The Edison project could also help jump-start the market for thin-film solar panels, which typically use far less silicon than conventional solar cells.

Alexander says Edison is already negotiating with solar panel makers and installers. Needless to say, the project will be a boon for green collar workers.

Here’s how the solar roofs initiative will work: Edison will lease warehouse rooftop space from building owners. (The target area is the fast-growing “Inland Empire” of Riverside and San Bernardino counties.) The utility will contract for the installation of the arrays and will retain ownership of the solar systems. California regulators appear inclined to approve the project, which will be financed by a hike in utility rates.

“This will be a utility-scale solar power plant, if one thinks of the 100 or so buildings on which the two square miles of solar panels will be installed,” Alexander wrote in an e-mail. “One advantage of this project is that we will tap unused rooftop real estate directly in areas we serve where demand is growing rather than securing a major plat of land in a remote area and then building transmission lines to bring the power to those areas of rising demand.”

Anyone who has driven through Los Angeles can attest to the endless acres of big-box stores, warehouses and strip malls and the potential to generate green power from sun-baked suburban sprawl.

Edison’s solar roof ramp up is likely to put pressure on California’s other big utilities, PG&E (PCG) and San Diego Gas & Electric (SRE), to follow suit. Like Edison, they face a state mandate to obtain 20 percent of their electricity from renewable sources by 2010 and 33 percent by 2020. California’s global warming law requires the state’s greenhouse gas emissions to be rolled back to 1990 levels by 2020.

The Governator himself gave a not-so-subtle nudge to Edison’s competitors. “These are the kinds of big ideas we need to meet California’s long-term energy and climate change goals,” said Gov. Arnold Schwarzenegger in a statement. “I urge others to follow in their footsteps. If commercial buildings statewide partnered with utilities to put this solar technology on their rooftops, it would set off a huge wave of renewable energy growth.”

Utility giant FPL has filed plans with California regulators to build a $1 billion, 250-megawatt solar power plant in the Mojave Desert. The move marks the first time that a major player — in this case a Fortune 500 company — has jumped into the nascent Big Solar market.

Juno Beach, Fla.-based FPL’s renewable energy arm, FPL (FPL) Energy, will operate the Beacon Solar Energy Project, which will connect to the transmission system operated by Los Angeles’ municipal utility, the Los Angeles Department of Water and Power. FPL Energy spokesman Steve Stengel declined to say whether the company had struck a deal with LADWP to buy the electricity produced by the Beacon project. “We are currently in discussions with a potential customer on a power purchase agreement for this project,” he wrote in an e-mail. “However, due to confidentiality considerations, I cannot elaborate at this time.”

California law requires the state’s investor-owned utilities — PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) — to obtain 20 percent of their electricity from renewable sources by 2010 and 33 percent by 2020. But public utilities like LADWP only have to set green energy targets, 13 percent by 2010 and 20 percent by 2017 in Los Angeles’ case. Under California’s global warming law, the state’s greenhouse gas emissions must be reduced to 1990 levels by 2020.

Those renewable energy mandates have been driving the market for large-scale solar power plants, but so far California’s Big Three utilities have placed their bets on startups like Ausra, BrightSource Energy and Stirling Energy Systems.

FPL Energy, however, is no stranger to the California solar market. It currently operates seven of nine “solar trough” power plants that were built by Israeli solar pioneer Luz International in the 1980s and early ’90s in the Mojave at Kramer Junction and Harper Dry Lake.

The plants use long rows of parabolic mirrors to focus the sun’s rays on tubes of synthetic oil suspended above the arrays. The hot oil is used to create steam which drives electricity-generating turbines. The company’s new power plant (artist rendering above) will built on 2,012 acres of former farmland near California City and will also use solar trough technology.

FPL tends to be tight-lipped about its plans but in a recent interview with Green Wombat, FPL Energy senior vice president Michael O’Sullivan acknowledged the company is bidding on contracts with utilities throughout the Southwest. “We do not develop through the issuance of press releases,” he says, “and there’s a lot of thinly capitalized solar developers trying to get attention by running around the Southwest announcing projects.” Unlike competitors developing new solar technology, FPL is sticking with the tried and true. “One reason we’re focused on solar trough technology like we have out at Kramer is that it’s a proven, financeable technology,” O’Sullivan says.

In a letter accompanying the Beacon Solar application to the California Energy Commission, O’Sullivan estimated the project would create 1,000 jobs during the two-year construction phase and 66 permanent positions once it goes online in 2011.

It is an article of faith these days that any company worth its public relations budget must proclaim loudly and frequently its good green intentions. So it was rather refreshing to hear one of Richard Branson’s top lieutenants – Will Whitehorn, chief of Virgin Galactic – cast his company’s enviro-friendly initiatives as strictly business.

“We’re not doing this to be environmentally kosher,” declares Whitehorn, referring to Virgin’s efforts to develop greenhouse-gas free biofuels for its jets and forthcoming spaceship, “we’re doing this to ensure our company’s survival.”

The occasion for Whitehorn’s remarks was one of those “green salons” that have become popular in San Francisco of late. You know, gather a group of so-called thought-leaders – executives, environmentalists, venture capitalists, journalists – in a chi-chi restaurant and let the ideas and sauvignon blanc flow. Easy enough to skewer, particularly when the well-compensated are dining on ahi tuna skewers, but you never know where the conversation will go, and in this case it strayed interestingly off-topic. The subject du jour was a white paper on corporate greenwashing from Bite Communications, the public relations firm that organized the recent lunch. Among those on hand were Whitehorn and exes from Chinese solar panel maker Suntech (STP), fuel-cell maker Bloom Energy, utility PG&E (PCG), and VantagePoint Venture Partners, investor in electric car startup Tesla Motors and solar power plant builder BrightSource Energy.

Whitehorn held center court, tracing Virgin’s trip down the green path back a decade when the company forecasted a dramatic rise in oil prices and tried to gauge the impact on its airline and new railway business. As a result, he says, Virgin spent big bucks on energy-efficient locomotives to hedge against future fuel cost spikes.

“This is not really a question of being green,” says Whitehorn, who expresses annoyance that Branson’s pledge last year to invest $3 billion in biofuels research and development was portrayed in the media as a charitable deed. “We’re doing this to make money and we’re creating a more sustainable economy in the process.”

“We’ve got to get away from this idea of doing these things as good works,” he adds. “We’re doing what we’re doing to create a profitable business for the future.”

It’s a meme increasingly being advanced by some environmentalists, most notably by the black sheep of the movement, Ted Nordhaus and Michael Shellenberger, whose 2004 essay, “The Death of Environmentalism” riled the green elite. The Berkeley duo’s new book, Break Through: From the Death of Environmentalism to the Politics of Possibility, calls for reframing global warming from a doom-and-gloom scenario to an opportunity for unbridled economic prosperity by investing in green technologies. Their central argument: only when people and societies achieve a certain level of material wellbeing do they have the luxury of supporting environmental preservation. In other words, greed is green.

Whitehorn also took aim at companies that proclaim themselves carbon neutral, scorning the notion that corporate greenhouse gas emissions can be offset by merely buying carbon credits. “We’re not going to be carbon neutral – it’s impossible,” he says of Virgin. “You need to get out and do something other than buy someone else’s carbon problem.”

Still, Kristina Skierka, director of Bite’s cleantech practice, wanted to know just how green can Virgin Galactic be, given its business model of ferrying the rich into outer space for a couple hundred grand a pop. “If we use biofuels we will get the emissions down to near zero,” Whitehorn claims. “This is about a new type of launch system; the carbon impacts will be negligible.

He says space tourism is just the launching pad, as it were, for a host of space-based ventures. “If you look at space as an industrial place to conduct human activities, it has huge advantages.”

Virgin’s next frontier is the deep blue sea. According to Whitehorn, the company recently created a skunk works to develop a “radical” new submarine technology for a startup to be called, what else, Virgin Oceanic.

Abu Dhabi is not content to just sell you the oil that fuels your SUV; now its going to sell you sunshine to keep your lights on and power your electric car when the internal combustion engine goes the way of the buggy whip. Masdar, the oil-rich emirate’s $15 billion renewable energy venture, and Spanish technology company Sener on Wednesday announced a joint venture called Torresol Energy to build large-scale solar power plants in Australia, Europe, the Middle East, North Africa and the United States.

Torresol initially will invest $1.2 billion in three solar power plants to be built in Spain but the company is targeting the global “sunbelt” for future expansion. Masdar will take a 60 percent ownership stake in Torresol with Sener holding a 40 percent stake. A Torresol spokesman declined to reveal the dollar amount of the investment. A prime market for Torresol will be the U.S. desert Southwest, where companies like Ausra, BrightSource Energy, Solel and Abengoa Solar are competing for contracts with utilities PG&E (PCG), Arizona Public Service (PNW) and Southern California Edison (EIX). Torresol potentially could shake up that market, given its very deep pockets and ability to independently finance billion-dollar solar power plants.

The venture is just the latest move by Abu Dhabi to control what Masdar CEO Sultan Ahmed Al Jaber described to Green Wombat recently as “the whole value chain” of renewable energy, from research and development to manufacturing silicon for solar cells to the large-scale deployment of green technology.

The irony is too rich to leave unsaid: A leading oil producer invests billions in carbon-free energy while a leading consumer of fossil fuels - the United States - continues to subsidize Big Oil while while offering only tepid support for green technology. It is inevitable that climate change will foster the rise of renewable energy - the only question is which countries and companies will profit from the new energy economics. It is entirely possible that the U.S. will trade energy dependence of one kind - on Middle East oil - for another - on Middle East and European solar technology - in the era of global warming. It’s no coincidence that most of the solar energy companies with contracts to build utility-scale power plants in California and the Southwest have overseas roots - Ausra hails from Australia, BrightSource was founded by American-Israeli pioneer Arnold Goldman, Solel is based in Israel and Abengoa is headquartered in Spain.

Torresol plans to build solar power plants using a technology it calls a Central Tower Receiver system. It’s similar to technology used by competitors like BrightSource in that fields of mirrors called heliostats focus the sun’s rays on tower that contains a receiver. In this case the receiver is filled with salt which when heated vaporizes water to create steam that drives an electricity-generating turbine. The company says it intends to have 500 megawatts of solar electricity online by 2012.

Green Wombat caught up with the ever-cheerful Willums over coffee Wednesday (unlike his American counterparts he meets the press without the PR minders that seem to accompany every exec everywhere). A day earlier on a panel about alternative transportation he dropped something of a bombshell: At the Geneva Auto Show on Tuesday Think will unveil its next-generation car, a sleek five-seat sedan.

Willums, who has raised $93 million from U.S. and European investors, was keeping mum on the identity of its big-league partner until Tuesday but did say that new model was not just a concept car. "We have designed a five-seater show car but it really is much more than that," says Willums (photo above). "It is very much a car that can be produced and it looks like the car that will produced." The plan is to offer the next-gen Think in 2011 as an all-electric as well as well as a so-called series hybrid that uses a small engine to charge the battery and extend its range. (The current Think City has a range of 180 kilometers --112 miles.)

The drawing Willums briefly displayed on the panel showed an stylish aerodynamic four-door sedan. He says Think is planning to later produce a crossover SUV and coupe version of the car. Silicon Valley electric car startup Tesla's next car also is a five-seater sedan, code-named White Star. "We won't compete with Tesla," says Willums. "The Tesla will be more a BMW; we'll be more the Volkswagen."

In the meantime, the two-seater Think City is rolling off the production line at the company's factory outside Oslo and the first 500 cars are set for delivery to customers in March. (For the Think back story and my 2007 Business 2.0 magazine feature on the company and its innovative business model click here.) Production will be fully ramped up by the end of 2008 and Think aims to produce 10,000 cars a year.

Willums also tells Green Wombat that Think later this week will introduce the City to London and Paris. Think's strategy is to pursue urban markets that offer incentives for electric vehicles. For instance, for electric cars London waives the $15 congestion "congestion fee" charged for driving into the city and offers free parking. France gives EV buyers a $7,500 rebate. Think plans to begin selling the City in those markets in early 2009. Think has also established a subsidiary in Denmark

The company's North American plans are still in flux. "We hope to have a plant in the U.S. in 2009," he says. As with Europe, Think will target urban markets in the U.S., such as San Francisco and New York.

Think has markedly picked up the pace since I last met Willums in Oslo. That's due in part, he says, because of the big automakers' more aggressive moves to get into the electric car market, such as General Motors (GM) with its Chevy Volt electric hybrid.

It also seems increasingly clear that innovative startups like Think will survive by making strategic partnerships with bigger players and moving nimbly into select and potentially profitable markets. Whether Think will be a drive-away success remains to be seen but its clear Willums is hitting the accelerator.

While the United States Congress hems and haws over extending relatively modest tax incentives to encourage renewable energy development, Abu Dhabi is spending $15 billion in a drive to make the oil-rich emirate an epicenter of green technology. Called the Masdar Initiative, it’s best known for plans to build Masdar City, a “zero-carbon, zero-waste” urban center.

But Abu Dhabi’s ambitions extend far beyond making Masdar City a showcase for sustainable development, as Masdar Initiative CEO Sultan Ahmed Al Jaber made clear when Green Wombat sat down with him on Tuesday when he was in San Francisco to accept the “Cleantech Leader of the Year” award at the annual Cleantech Forum. “We have decided to establish the Silicon Valley of renewables in Abu Dhabi,” says Al Jaber. “We want to cover the whole value chain - from research to labs to manufacturing to the deployment of technologies.”

To that end, Masdar is collaborating with European and U.S. universities - including MIT and Columbia - to develop a research institute. The Masdar Clean Tech Fund has invested $250 million in renewable energy ventures and Al Jaber says a second fund is in the works. “We’ll invest wherever the opportunity goes,” he says. “We’re keen on developing renewable energy infrastructure in California; we’re just looking for the right opportunity.”

Masdar City will be a tax-free zone in a bid to lure makers of photovoltaic equipment and other green energy manufacturers. When Al Jaber says Abu Dhabi wants to own the whole supply chain, he means that literally, beginning with polysilicon, the basic building block of solar cells. “We’re looking at manufacturing polysilicon, thin-film for photovoltaics, wind energy components,” he says. “We’re no longer interested in only being a consumer of technology or an off-taker of specific equipment. We want to transform ourselves into a more knowledge-based economy. “

He expects the renewable energy and waste-reduction technologies developed to build Masdar City - its expected population is 50,000 - to be exported to help retrofit existing cities. “A city of this size would require 820 megawatts of power, but we will reduce energy requirements to 220 megawatts from integrating new designs from day one.”

“This city is going to literally re-engineer urban planning,” he claims.

Abu Dhabi’s ambitions will create opportunities for U.S., European and Asian green tech firms and Al Jaber acknowledges that forming the right partnerships will be the biggest challenge in fulfilling the emirate’s green dreams.

But he says he sees no irony in one of the world’s biggest oil-exporting nations going green. The bottom line: it’s all about power and markets.

“Abu Dhabi recognizes that the global energy markets are evolving and are evolving with substantial growth in alternative energy,” Al Jaber says. “It’s only going to go up. Does that make it a threat or an opportunity? It’s a great opportunity if we invest in it now.”

Arizona Public Service, Arizona’s largest utility, announced plans Thursday for a 280-megawatt solar power plant to be built 70 miles southwest of Phoenix by Spanish company Abengoa Solar. What’s striking about the deal is that it offers a rare glimpse inside the economics of Big Solar. And as the renewable energy industry pushes Congress to extend crucial green tax credits, the jobs that will be spawned by the Solana Generating Station and the economic ripple effect of the huge construction project is Exhibit A in why fighting global warming can be a win-win when it comes to the economy and the environment.

All the previous contracts for 100+ megawatt solar power plants have been in California, where utilities PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have shrouded power purchase agreements in secrecy.

APS (PNW), on the other hand, has lifted the green veil a bit, giving some indication of the current cost of producing utility-scale solar electricity and the larger economic impact. According to APS, the utility will pay around $4 billion over 30 years for the greenhouse gas-free electricity generated by Solana that will light 70,000 homes. That comes to about $133 million a year for the life of the power purchase agreement.

Abengoa spokesman Peter Kelley told Green Wombat that the exact kilowatt per hour rate the company is paying APS is confidential. No doubt though that the utility will pay a premium per kilowatt/hour for its first large-scale solar energy deal compared to electricity produced by a coal or natural-gas fired power plant. That cost disparity is likely to evaporate when the United States moves to price carbon — either through a carbon tax (unlikely) or a cap-and-trade system that requires fossil-fuel power plants to pay if they exceed limits on CO2 emissions. And the cost of financing carbon-spewing power plants will grow in coming years as Wall Street shies way from projects that carry climate change risks. And as solar power plant components and systems go from being one-off prototypes to mass-produced commodities, the cost of solar electricity is expected to drop even further.

Abengoa and APS are not revealing the construction cost of Solana but solar power plants of that size can run half a billion dollars or more. Of course, once built their operating costs are significantly lower than conventional power plants; the fuel — the sun — after all is free.

In the meantime, the Solana Generation Station is expected to inject about $1 billion into the Arizona economy as Abengoa hired 1,500 workers to build the power station and 85 others to operate it, according to APS. The utility estimates that the ripple affect will create another 11,000 to 15,000 jobs.

Abengoa is using a solar trough design for the plant. A tried and true technology, solar trough plants deploy long rows of parabolic mirrors to heat liquid-filled tubes to produce steam that drives electricity-generating turbines. The Solana plant will also store heat in silos of molten salt. The heat can be released when the sun is not shining to run the turbines. “The molten storage will extend the operating hours of the plant both during cloud cover and when sun goes down,” Kelley says. That means Solana can continue to generate electricty as long as six hours after sunset.

The big “if” for Solana is the 30 percent investment tax credit that expires at the end of 2008. If Congress fails to extend the credit, the cost of such solar power plants will jump, jeopardizing their economic viability

Solana is likely to be just the first big solar power plant in Arizona. Utilities there must obtain 15 percent of their electricity from renewable sources by 2025 and with little wind or geothermal available in Arizona, the state is likely to place a big bet on Big Solar.

The United States could lose more than 116,000 green collar jobs and forgo $19 billion in green tech investment in 2009 if Congress fails to extend two tax credits crucial to the renewable energy industry, according to a new study.

One red flag about this report: It was commissioned by the American Wind Energy Association and released by the Solar Energy Industries Association -- two trade groups pressing for extension of the investment tax credit and the production tax credit. Green Wombat tends to look askance at studies paid for by business and whose conclusions support the sponsors' political agenda. But a review of the research conducted by Navigant Consulting indicates that it is solid, based on federal labor data and employment models as well as Navigant's own market analysis.

Some background. The ITC provides a 30 percent tax credit for the installation of solar arrays and other equipment. Homeowners can claim a 30 percent tax credit for solar arrays up to a maximum of $2,000. There's no cap for commercial solar arrays and the tax credit has been a key to attracting financing for large solar installations that can cost millions of dollars. (Several states, most notably California, offer even more lucrative incentives, which should help prop up demand.) The production tax credit provides a subsidy for the generation of electricity by solar, wind, geothermal and other renewable energy systems and has driven the construction of massive megawatt wind farms.

Both credits expire at the end of 2008 and the renewable energy industry and their allies in Silicon Valley and on Wall Street are pressing Congress for a long-term extension -- five to eight years -- to provide a stable investment climate for green projects. (Last week, executives from Google (GOOG), Hewlett-Packard (HPQ), Applied Materials (AMAT) and Credit Suisse (CS) were among those that signed a letter urging Congress to take action by March 1.)

The Navigant study projects that without the investment tax credit installations of solar arrays will fall from a projected 790 megawatts to 325 megawatts in 2009, eliminating 39,400 potential new jobs.

A couple of points to consider about those numbers. Navigant only considered the impact on the photovoltaic industry that manufactures and installs rooftop solar arrays. It did not calculate the consequences for the solar thermal business, which builds large-scale solar power plants that use mirrors to focus the sun's rays on liquid-filled tubes or boilers to create steam to drive electricity-generating turbines. The solar thermal industry is in its infancy but utilities like PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have signed several contracts for solar power plants and negotiations for gigawatts more of solar electricity are ongoing.

The first solar power plants in California won't go online until around 2010 but the construction and operation of those projects are expected to create thousands of jobs. Like the PV industry, solar thermal companies are dependent on the investment tax credit to attract the big money it takes to finance the construction of billion-dollar power plants. The loss of the investment tax credit would hit California particularly hard.

While rooftop solar companies worry about losing business in the future if the investment tax credit is not renewed, the more immediate concern among solar execs Green Wombat has talked to recently is finding enough workers to keep up with demand, especially in California.

Navigant projects an even bigger crash for the wind industry should the production tax credit expire, with installations falling from 6,500 megawatts to 500 megawatts in 2009 with the lose of 76,800 jobs. The wind industry has been continuously buffeted in recent years as Congress has allowed the production tax credit to expire repeatedly only to resuscitate it. In the past, the expiration of the tax credit has resulted in a 73% to 93% drop in the wind market, according to Navigant.

Now the American Council on Renewable Energy is bringing out its big green guns. Representatives from Silicon Valley tech giants, Wall Street investment banks and utilities signed a letter sent to the congressional leadership late Wednesday urging the long-term extension of the 30 percent investment tax credit as well as the production tax credit for the electricity produced by solar, wind, geothermal and other renewable energy systems. Among the signers urging action by March 1 are executives from Google (GOOG), Hewlett-Packard (HPQ), Applied Materials (AMAT), Credit Suisse (CS), Wells Fargo (WFC), venture capitalists Kleiner Perkins Caufield & Byers and utility San Diego Gas & Electric, a subsidiary of energy giant Sempra (SRE).

Interestingly, the phrases “climate change” and “global warming” never appear in the letter. In a savvy move, the council has forsaken doom and gloom for a purely economic message: American jobs, competitiveness and innovation are at stake, the signers argue, and the tax incentive will spark a green tech boom at relatively little cost to the taxpayers. It’s a Silicon Valley mindset and its no surprise that while the signers represent companies from all over the United States, most hail from California.

The tax credits expire at the end of 2008 and proponents argue that a five-to-eight year extension is needed to create a stable investment climate, given that it can take three to five years for a large solar power plant to be permitted and built.

“The United States is in a historic position to lead in innovation and competitiveness in the renewable energy sector,” wrote the council’s three co-chairs, which include Dan Reicher, Google.org’s director of climate and energy initiatives. “As with all energy markets and in plans for growth in any businesses, certainty and continuity in public policy provides the confidence needed for stability in investments. We must ensure we are not creating an environment for boom and bust cycles in renewable energy and that we are not tying the hands of business owners in the sector looking to scale their technologies to meet demand and price points.”

Without an extension of the tax credits, the council warns that renewable energy projects in the pipeline that would produce 42 gigawatts of greenhouse-gas free electricity — enough to power tens of millions of homes — could grind to a halt, giving competitors in Europe and Asia the upper hand when it comes to green tech innovation.