Jan 15, 2015
By: Louise Downing Clean energy investment rose for the first time in three years in 2014, overcoming a […]
Jan 15, 2015
By: Louise Downing Clean energy investment rose for the first time in three years in 2014, overcoming a […]
If we do switch to renewables and our CO2 production falls, we will still have excess CO2 in the atmosphere and climate change will continue. What do we do about that?
Exciting (and somewhat controversial) technologies are being studied as a means to actually reverse global warming. Known as Geoengineering or Climate Engineering, scientists are learning how to reflect solar radiation before it can warm the earth. This is just one possibility that is being investigated.
Our freight industry relies heavily on diesel trucks, which are not ready to switch from diesel, right?
When the carbon fee & dividend is implemented trucking companies will pay the gradually increasing price on diesel until a solution is found. In 20 years truckers in the US will pay almost as much as truckers in Europe do now ($6/gallon). The market will predictably adjust to that slow change, and entrepreneurs, seeing billions in sales, will invent clean energy solutions. Bio-jet fuel is already being tested by most airlines and similar options can decrease the future costs of diesel in the trucking industry.
Batteries are the biggest bottleneck for EV technological advancement, mass EV adoption and solar and wind power replacing other forms of baseline power generation (like coal or nuclear).
The advancement in energy storage technologies over the past few years is profound. Spain has just built the world’s first 24/7 solar-thermal generation facility. Molten Salt Energy Storage (MSES) allows a solar thermal plant using traditional steam generation to store excess heat energy created in the daytime for use overnight. Lithium-Ion technology has advanced dramatically as well and emerging technologies are appearing daily.
We end up with an incremental solution which costs much less than we are spending on fossil fuels now, and which saves 13,000 lives per year in the US alone due to reduced pollution.
Global energy consumption in the transport sector accounted for approximately 2,300 Mtoe in 2009, with 10 % of it consumed by global aviation (figure 1, AMF 2011). In the EU (2011) intra-EU air transport accounted for 13.9 % of final energy consumption in transport sector, which corresponds to 50.5 Mtoe (EC 2013).
Figure 1: Global view on transport modes 2009 (AMF 2011)
Air transport is more important for transporting passengers than for goods. In 2011, intra-EU air transport contributed to passenger transportation with 8.8 % or 575.1 billion pkm. In comprison, only 0.1 % of freight was transported via intra-EU air traffic (EC 2013).
Alternative fuels for air transportation
Traditional jet fuel is a hydrocarbon, almost exclusively obtained from the kerosene fraction of crude oil. Two types of fuels are used in commercial aviation: Jet-A and Jet A-1. Fuel specifications for aviation fuels are very stringent.
For aviation, advanced liquid biofuels are the only low-CO2 option for substituting kerosene, as they have a high specific energy content. Gaseous biofuels and electrification are definitely no option for air transportation. Advanced biofuels for aviation should use a sustainable resource to produce a fuel that can be considered as substitute for traditional jet fuel (Jet A and Jet A-1), while not consuming valuable food, land and water resources.
A big challenge facing the use of biofuels in aviation is the high quality standards requirements. Safety and fuel quality specifications are of tremendous importance in the aviation sector, however, these are not limiting the use of biofuels. The technical requirements for aviation biofuels are: a high performance fuel, that can withstand a range of operational conditions; a fuel that does not compromise safety; a fuel that can directly substitute traditional jet fuel aviation; a fuel that meets stringent performance targets (ATAG 2009).
ASTM-certified biofuels represent no technical or safety problem in flights. Currently, the following fuel categories are approved by the standard:
Globally, various sustainable feedstocks and conversion technologies for production of biofuels for aviation are currently being developed by research organisations, airlines, fuel producers and aircraft manufactuers. In the short term, HEFA appears to be the most promising alternative to supply significant amounts of biofuel for aviation. In the medium term, the most promising alternative is drop-in FT-fuels.
The aviation industry is unlikely to rely on just one type of feedstock. Aircrafts will be powered by blends of biofuels from different types of feedstocks along with jet fuel. Biomass sources for advanced bio-jet fuels include oil crops such as Jatropha and Camelina, waste fats and oils, and, in the longer term, biomass sugars, algae and halophytes (IEA Bioenergy 2012, ATAG 2009, EBTP 2014).
Testing of biofuels is crucial to determine suitability for aviation. In the testing process, which aims to maintain the highest standards in safety, biofuels must undergo dozens of experiments in the laboratory, on the ground and in the air (ATAG 2009). Many major airlines and air forces have been involved in some kind of test flights with biofuels and the number of these demonstration flights continues to grow and indicate the increasing interest in biofuels for aviation. Biofuels have been used in commercial passenger flights since the Autumn of 2011, and several subsequent biofuels test flights are included on this page.
Future perspectives for biofuels in air transport
Aviation is one of the strongest growing transport sectors and this trend will continue. In the period up to 2030, global aviation is expected to grow by 5 % annually according to International Air Transport Association IATA (See IATA Fact Sheet on Alternative Fuels). The demand for aviation fuels is expected to increase by approximately 1.5-3 % per year. (IEA Bioenergy 2012). For the EU, aviation transport is expected to grow at an average rate of 3 % annually until 2050, with a fuel consumption growth of 2 % annually (EC 2011 Update 2013).
There is policy at EU level for the production and use of biofuels in the aviation sector and several initiatives established:
The White Paper – Roadmap to a Single European Transport Area (COM (2011) 144) aims to reach a share of 40 % use of sustainable low carbon fuels in aviation by 2050.
The High Level Group on Aviation Research sets ambitious goals including a 75 % reduction in CO2 emissions and a 90 % reduction in NOx emissions per passenger kilometer in 2050 (EUR 098 EN 2011). The same document also claims that Europe should be established as a centre of excellence on sustainable alternative fuels, based on a strong European energy policy.
The International Air Transport Association is committed to achieve carbon-neutral growth starting 2020 and a 50 % overall CO2 emissions reduction by 2050 (EUR 098 EN).
The EC, in coordination with Airbus, leading European airlines (Lufthansa, Air France/KLM, & British Airways) and key European biofuel producers (Neste Oil, Biomass Technology Group and UOP), launched an initiative to speed up the commercialisation of aviation biofuels in Europe. The European Advanced Biofuels Flight path is a roadmap with clear milestones to achieve an annual production of two million tonnes of sustainably produced biofuel for aviation by 2020. The Biofuels Flight Path initiative is a shared and voluntary commitment by its members to support and promote the production, storage and distribution of sustainably produced drop-in biofuels for use in aviation.
Drivers with potentially the greatest impacts on the development of biojetfuels use in the medium term might be (IEA Bioenergy 2012):
At present several hurdles prevent commercial deployment of advanced biofuels: lack of reliable overall biofuel policy, lack of policy incentives for aviation biofuels, lack of long term off-take agreements between the biofuel producers and the aviation industry, and lack of financing.
To help address this, a number of EC-funded R&D projects and initiatives have been initiated to map a way forward for the introduction of sustainable biofuels to help reduce dependence on fossil fuels in air transport and reduce GHG emissions by the air industry.
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The adequacy of the U.S. science and engineering workforce has been an ongoing concern of Congress for more than 60 years. Scientists and engineers are widely believed to be essential to U.S. technological leadership, innovation, manufacturing, and services, and thus vital to U.S.programs to support the education and development of scientists and engineers. Congress has also undertaken broad efforts to improve science, technology, engineering, and math (STEM) skills to prepare a greater number of students to pursue science and engineering (S&E) degrees. In addition, some policy makers have sought to increase the number of foreign scientists and engineers working in the United States through changes in visa and immigration policies.
Policy makers, business leaders, academicians, S&E professional society analysts, economists, and others hold diverse views with respect to the adequacy of the S&E workforce and related policy issues. These issues include whether a shortage of scientists and engineers exists in the United States, what the nature of such a shortage might be (e.g., too few people with S&E degrees, mismatched skills and needs), and whether the federal government should undertake policy interventions to address such a putative shortage or to allow market forces to work in this labor market. Among the key indicators used by labor economists to assess occupational labor shortages are employment growth, wage growth, and unemployment rates.
In 2012, there were 6.2 million scientists and engineers (as defined in this report) employed in the United States, accounting for 4.8% of total U.S. employment. Science and engineering employment was concentrated in two S&E occupational groups, computer occupations (56%) and engineers (25%), with the rest accounted for by S&E managers (9%), physical scientists (4%), life scientists (4%), and those in mathematical occupations (2%). From 2008 to 2012, S&E employment increased by 352,370, a compound annual growth rate (CAGR) of 1.5%, while overall U.S. employment contracted at 0.9% CAGR. Viewed only in aggregate, the increase in S&E employment masks the varied degrees of growth and decline in detailed S&E occupations.
In 2012, the mean wage for all scientists and engineers was $87,330, while the mean wage for all
other occupations was $45,790. Between 2008 and 2012, the nominal mean wages of the S&E
occupational groups grew between 1.4% CAGR (life scientists) and 2.2% CAGR (physical
scientists, S&E managers, mathematicians). Inflation-adjusted wage growth for each of the S&E
occupational groups was less than 0.6% CAGR, and in the case of life scientists was negative.
Nominal wage growth for all occupations in the economy was 1.1%; real wages declined 0.5%.
Compared to the overall workforce, the S&E occupational groups had significantly lower
unemployment rates for the 2008-2012 period. In general, though, the professional occupations
(of which the S&E occupations are a part) historically have had lower unemployment rates than
the workforce as a whole. In 2012, the overall S&E unemployment rate of 3.6% was higher than
for other selected professional occupations, including lawyers (1.4%), physicians and surgeons
(0.8%), dentists (1.5%), and registered nurses (2.6%).
The Bureau of Labor Statistics (BLS) projects that the number of S&E jobs will grow by 953,200
between 2012 and 2022, a growth rate (1.3% CAGR) that is somewhat faster than that of the
overall workforce (1.0%). In addition, BLS projects that 1.3 million scientists and engineers will
be needed to replace those projected to exit S&E occupations. The number of scientists and
engineers needed to meet growth and net replacement needs between 2012 and 2022 is 2.3
million, including 1.2 million in the computer occupations and 544,300 engineers.
By Nancy Pfund and Ben Healey, DBL Investors, September, 2011
This paper frames the ongoing debate about the appropriate size and scope of federal subsidies to the energy sector within the rich historical context of U.S. energy transitions, in order to help illuminate how current energy subsidies compare to past government support for the sector. From land grants for timber and coal in the 1800s to tax expenditures for oil and gas in the early 20th century, from federal investment in hydroelectric power to research and development funding for nuclear energy and today’s incentives for alternative energy sources, America’s support for energy innovation has helped drive our country’s growth for more than 200 years.
Using data culled from the academic literature, government documents, and NGO sources, in this paper we examine the extent of federal support (as well as support from the various states in pre-Civil War America) for emerging energy technologies in their early days. We then analyze discrete periods in history when the federal government enacted specific subsidies. While other scholars have suggested that the scope of earlier subsidies was quite large, we are—as far as we know—the first to quantify exactly how the current federal commitment to renewables compares to support for earlier energy transitions. Our findings suggest that current renewable energy subsidies do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy.
(click to enlarge in another window)
These charts clearly demonstrate that federal incentives for early fossil fuel production and the nascent nuclear industry were much more robust than the support provided to renewables today.
To download the full report from DBL Investors, click here.
If we internalize the costs that fossil fuel companies have externalized for the last century (such as health costs associated with pollution and the use of fossil fuel), we can add 14 to 35 cents to the cost of each kilowatt-hour of fossil fuel electricity that we use. Therefore, we should be willing to spend that much more for renewable energy.
Summary by Danny Richter, Ph.D.
Citizens' Climate Education Corporation (CCEC) and Citizens' Climate Lobby (CCL) contracted a third party, Regional Economic Modeling, Inc. (REMI) to do a nation-wide macroeconomic study on the impact of its Fee and Dividend (F&D) policy. The policy modeled is not a perfect representation of F&D (most obviously, F&D begins at $15 per ton whereas the study began at $10 per ton), but it is quite close, and accounts for the impact F&D's border tariff adjustment would have on the US economy.
REMI used three models to do the study:
(1) The Regional Energy Deployment System (ReEDS) built by the National Renewable Energy Laboratory and run by Synapse Energy Economics;
(2) the Carbon Analysis Tool (CAT); an enhancement of the open-source CTAM model and populated by data from the US Energy Information Administration (EIA); and
(3) REMI PI+, a proprietary dynamic model of subnational units of the United States’ economy whose methodology and equations are peer-reviewed and available to the public. Output included impacts on 160 industries, nationally and regionally for the 9 “U.S. Census” regions commonly grouped together in a number of federal data sources and in the energy market forecasts from the EIA.
Model results were able to estimate the effects of the policy on GDP, personal income, employment, prices, carbon dioxide emissions, mortality due to NOx and SOx emissions, revenues, monthly dividend amount, energy generation capacity by technology, energy generation by type, investment in power, population, and economic migration on both a regional and national level. Income and employment figures for each of 160 industry categories considered are included. These 160 industries encompass the entire economy.
The results are all relative to a baseline case where there is no carbon tax (modeled by using the exact same set-up, with a $0/ton value for the carbon tax). In other words, all three models were run two times. Both times, the set-up was identical except for one thing: the price of carbon was either $0 from 2016-2035 (the baseline), or was $10 per ton in 2016 and increased by $10 every year after that (F&D).
CCL hired REMI because we are committed to quality data free of ideological taint that you might get from some think tanks. As its name suggests, REMI models regional economics. It does this well. Dr. George Treyz founded REMI in 1980, after working as an academic with Nobel Prize-winner Lawrence Klein and other pioneers in the field of econometric modeling. REMI's modeling products grew from Dr. Treyz's work on one of the first regional macroeconomic models ever created: the Massachusetts Economic Policy Analysis (MEPA) model. Close links to the upper echelons of academia have persisted throughout REMI's 3+ decades of experience, resulting in several academic publications in journals such as the American Economic Review, the Review of Economics and Statistics, and the Journal of Regional Science.
This experience and expertise is why private and public entities from all across the political spectrum have entrusted REMI to do their analyses, and paid them well for that expertise. These former clients include, but are not limited to: the American Gas Association (AGA), the Nuclear Energy Institute (NEI), the National Federation of Independent Business (NFIB), the National Education Association (NEA), the International Brotherhood of Teamsters, Booz Allen Hamilton, EY (formerly Ernst and Young), PWC (formerly Price Waterhouse Coopers), and ICF International. Like CCL and CCEC, REMI is truly nonpartisan.
In that same spirit, CCL and CCEC did not attempt to influence the outcome of the report in any way. In fact, we were excited when we saw that not all the results were positive for every region, because that speaks to the integrity of the analysis. Our first priority is a livable world, and we can't get there without an honest and clear-eyed view of the facts.
• CO2 emissions decline 33% after only 10 years, and 52% after 20 years relative to the baseline, $0/ton of CO2 case (Figure 1).
• National employment increases by 2.1 million jobs after 10 years, and 2.8 million after 20 years. This is more than a 1% increase in total US employment we don't get without a carbon tax (Figure 2)!
• 13,000 lives are saved annually after 10 years, with a cumulative 227,000 American lives saved over 20 years (Figure 3).
• $70-$85 billion increase in GDP from 2020 on, with a cumulative increase in national GDP due to F&D of $1.375 trillion (Figure 4).
• Size of monthly dividend for a family of 4 with two adults in 2025 = $288, and in 2035 = $396. Annually, this is $3,456 per family of 4 in 2025 ($1152 per capita--children get ½ dividend) (Figure 5).
• Electricity prices peak in 2026, then start to decrease.
• Real incomes increase by more than $500 per person in 2025. This increase accounts for cost of living increases (Figure 6).
• Maximum cost-of-living increase by 2035 is 1.7-2.5%, depending on region (Figure 7).
• Electricity generation from coal is phased-out by 2025.
• Biggest employment gains in healthcare, retail, and other services (excluding public administration). This is because people have more money in their pockets to spend, and these industries are labor-intensive, responding to increased consumer spending by creating more jobs.
• Regional Gross Product is steady or rising in 8 of 9 regions.
The majority of previous reports considering a carbon tax have not modeled a completely revenue-neutral carbon tax, do not envision a policy with such an aggressive rate of increase, do not have the same detail as REMI can provide, do not consider a 100% dividend, and do not
report health benefits. Where revenue-neutrality was modeled, a “double-dividend” was often discovered in which carbon emissions were reduced and economic output grew. As these previous studies have highlighted, including a May 2013 study by the Congressional Budget
Office (CBO), a carbon tax without revenue- recycling is a completely different policy from a carbon tax that does recycle revenue. The two policies, revenue-neutral carbon tax and a carbon tax without revenue returned, should not be confused in terms of their effect on the economy.
Failing to consider such a rapid rate of increase in the carbon tax has prevented previous studies from realizing the magnitude of emissions reductions and scale of economic benefit reported in this study. Often, this was because such rates of increase were not considered
politically feasible. Most other models, run by academics or think tanks, do not have the detail provided by REMI. Over the past 3 decades, REMI's regional modeling techniques have been refined, detail has been added, and functionality improved. Three decades of such work and
refinement in the private sector are what have given it an unmatched level of detail and reliability difficult to replicate.
Despite these differences in conception, the results of REMI's work are largely consistent with previous studies in terms a benefit to the economy, industry effects, and emissions reductions. For example, the May 2013 CBO study also stated that a well-designed carbon tax could increase economic output and found a hypothetical $20 per ton carbon tax scenario would result in an 8% reduction in emissions at the national level. If held at that level, REMI's model setup would have found comparable results.
The biggest take-home from this study is that there is no economic argument against Fee and Dividend. It creates jobs, grows the economy, saves lives, and makes Americans richer. It does this while also reducing CO2 emissions to 31% below 1990 levels by 2025, and to 50%
below 1990 levels by 2035.
F&D therefore sets the new standard for climate and economic policy. Other policies must now compare their climate and economic impact against F&D. To be against doing anything is to be against jobs, against a larger economy, and against saving American lives. We know of no politician who wants to be against these things, and so we hope that this study will clear the way to rapid passage of F&D.
How Much Do Health Impacts From Fossil Fuel Electricity Cost The U.S. Economy?
Justin Gerdes | Forbes | [link]
How much would electricity cost in the United States if the retail price reflected the health impacts of burning fossil fuels? A paper recently published by researchers at the Environmental Protection Agency finds that accounting for such costs would add an average of 14 to 35 cents per kilowatt-hour to the retail cost of electricity. Nationwide, these hidden health costs add up to as much as $886.5 billion annually, or 6% of GDP.
The peer-reviewed study, titled “Economic Value of U.S. Fossil Fuel Electricity Health Impacts,” was published online last December in Environment International by Sarah Rizk* and Ben Machol of the Clean Energy and Climate Change Office, U.S. EPA Region 9, in San Francisco. (In an interview, Rizk and Machol noted that views expressed in the paper are theirs alone. Rizk recently left the agency to attend business school.)
“There are a lot of reports out there that quantify the total health costs and the total health impact values from fossil fuel energy in the U.S.,” said Rizk, “but there are fewer of them that put it into a dollar per kilowatt-hour metric, which is what you see on your utility bill. We wanted to present it in a way that was digestible to the average consumer of electricity.”
To do so, Rizk and Machol gathered data based on state electricity profiles, fuel type, and national averages for the benefits per ton of emissions. The economic value of the health impacts was based on premature mortality, workdays lost, and other direct costs to the healthcare system resulting from emissions of PM2.5, NOx, and SO2. The health impacts valuations presented in the study come from national benefit per ton figures developed from a Community Multi-scale Air Quality (CMAQ) model, which is regularly used in EPA Clean Air Act rulemaking.
“We knew the methodology the EPA traditionally uses in rulemaking, and it hadn’t been applied in the way we did here,” said Machol. “Where we took a step deeper,” he explained, “is that the analyses that we used were based on studies that use photochemical modeling, which allows you to get a deeper picture of what those health impacts will be.”
Rizk and Machol found that the dollar value of improved human health from avoided emissions from fossil fuel-fired power plants ranges from a low of a half penny to 1.3 cents per kilowatt-hour in California to a high of 41 cents to $1.01 per kilowatt-hour in Maryland. (When accounting for imported fossil fuel electricity, California’s figures increase to 3 cents to 7 cents per kilowatt-hour – illustrating the importance of the City of Los Angeles’ recent decision to divest from coal-fired electricity.)
Rizk and Machol found a similarly wide range for the valuations for health impacts by fuel type: 19 to 45 cents per kilowatt-hour for coal, 8 to 19 cents per kilowatt-hour for oil, and 1 to 2 cents per kilowatt-hour for natural gas. “For coal and oil,” Rizk and Machol write, “these costs are larger than the typical retail price of electricity, demonstrating the magnitude of the externality.” (The average retail rate for electricity for all sectors in the United States, as of January 2013, was 9.66 cents per kilowatt-hour.)
Combine the average retail cost of electricity to the health impacts from fossil fuels, said Rizk and Machol, and “on average, U.S. consumers of electricity should be willing to pay $0.24–$0.45/kWh for alternatives such as energy efficiency investments or emission-free renewable sources that avoid fossil fuel combustion.” They suggest that pricing recognition of these hidden costs could take the form of a so-called “health adder” policy “to more fully account for adverse climate and health impacts associated with fossil fuel usage.”
A paper recently published by researchers at the EPA finds that accounting for the health impacts of fossil fuel combustion would add an average of 14 to 35 cents per kilowatt-hour to the retail cost of electricity. Credit: U.S. Department of Energy, Office of Science
Why $886.5 billion is a likely underestimate
Rizk and Machol make clear that future analyses will likely find their estimate of the economic value of health impacts from fossil fuel electricity, $361.7 to $886.5 billion annually, to be an underestimate. Their study, they note, “does not attempt to include all externalities,” nor do they “attempt to complete a full life cycle assessment of all externalities associated with fossil fuel electricity or its alternatives.”
They omit impacts resulting from extraction and transportation of fossil fuels and impacts on climate change and human welfare. Their findings also do not include other pollutants resulting from fossil fuel combustion: O3 precursors, NO2, greenhouse gases, residual or hazardous waste products, and water-borne pollutants.
Rizk and Machol nevertheless expressed confidence that the national estimate of economic impacts, despite the limitations, is sound. “What we have the most confidence in,” Rizk said, “is our national estimate because they’re using that national benefit per ton and emissions are taking place at the national level.” She repeated the estimate for economic impacts: between 14 and 35 cents per kilowatt-hour. “The mid range of that is more than double what people pay for electricity today. We found that quite striking.”
“Our real hope in putting out this data is getting people to realize how significant the health costs are, and that they can be much more significant than some of the numbers people are putting to carbon dioxide cost valuation methods, and they are potentially higher than the retail cost depending on what your geographic scope is,” Rizk said.
A bright spot amid the gloom is that health costs should fall as coal-fired power plants are taken offline. “As older units are retired, and as facility owners in eastern states make strides to address EPA’s Cross-State Air Pollution Rule [on March 29, the U.S. Solicitor General petitioned the Supreme Court to review the August 2012 D.C. Circuit Court ruling that vacated the CSAPR] , health impacts should decrease, often significantly,” write Rizk and Machol.
Growing body of research on the cost of health impacts
Rizk and Machol’s study joins a growing body of research dedicated to quantifying the health impacts connected to fossil fuel combustion. On March 7, the Health and Environment Alliance, a European NGO, released a report which found that emissions from Europe’s coal-fired power plants cost the continent’s citizens up to €42.8 billion ($54.9 billion) in health costs annually.
The authors say the study provides the first-ever calculation of the health costs associated with air pollution from coal-fired power plants in Europe. The ledger includes costs associated with premature deaths, medical visits, hospitalizations, medication, and reduced activity, including working days lost.
And on March 27, the International Monetary Fund (IMF) released a report [PDF] calling for the end of $1.9 trillion in annual global energy subsidies. The Washington Post’s Brad Plumer provides a helpful overview of the report here. The tally includes $480 billion in direct subsidies to consumers and $1.4 trillion in what the IMF calls the “mispricing” of fossil fuels. Why mispriced? Because polluters are not forced by governments to pay the full costs associated with fossil fuel combustion on climate change and public health.
*Disclosure: Sarah Rizk recently completed an assignment with the EPA Region 9 Environmental Review Office, the same office where my brother works.
Justin Gerdes | Forbes | [link]
Fossil industry is the subprime danger of this cycle
The cumulative blitz on energy exploration and production over the past six years has been $5.4 trillion, yet little has come of it
09 Jul 2014 [Link]
The epicentre of irrational behaviour across global markets has moved to the fossil fuel complex of oil, gas and coal. This is where investors have been throwing the most good money after bad.
They are likely to be left holding a clutch of worthless projects as renewable technology sweeps in below radar, and the Washington-Beijing axis embraces a greener agenda.
Data from Bank of America show that oil and gas investment in the US has soared to $200bn a year. It has reached 20pc of total US private fixed investment, the same share as home building. This has never happened before in US history, even during the Second World War when oil production was a strategic imperative.
The International Energy Agency (IEA) says global investment in fossil fuel supply doubled in real terms to $900bn from 2000 to 2008 as the boom gathered pace. It has since stabilised at a very high plateau, near $950bn last year.
The cumulative blitz on exploration and production over the past six years has been $5.4 trillion, yet little has come of it. Output from conventional fields peaked in 2005. Not a single large project has come on stream at a break-even cost below $80 a barrel for almost three years.
"What is shocking is that upstream costs in the oil industry have risen threefold since 2000 but output is up just 14pc," said Mark Lewis, from Kepler Cheuvreux. The damage has been masked so far as big oil companies draw down on their cheap legacy reserves.
"They are having too look for oil in the deepwater fields off Africa and Brazil, or in the Arctic, where it is much more difficult. The marginal cost for many shale plays is now $85 to $90 a barrel."
A report by Carbon Tracker says companies are committing $1.1 trillion over the next decade to projects that require prices above $95 to break even. The Canadian tar sands mostly break even at $80-$100. Some of the Arctic and deepwater projects need $120. Several need $150. Petrobras, Statoil, Total, BP, BG, Exxon, Shell, Chevron and Repsol are together gambling $340bn in these hostile seas.
Martijn Rats, from Morgan Stanley, says the biggest European oil groups (BP, Shell, Total, Statoil and Eni) spent $161bn on operations and dividends last year, but generated $121bn in cash flow. They faces a $40bn deficit even though Brent crude prices were buoyant near $100, due to disruptions in Libya, Iraq and parts of Africa. "Oil development is so expensive that many projects do not make sense," he said.
There are, of course, other candidates for the bubble prize of the current economic cycle, now into its 22nd quarter and facing the headwinds of US monetary tightening. China's housing boom has echoes of the Tokyo blow-off in 1989, and is four times more stretched than US subprime in 2006, based on price-to-incomes.
The 2007-era vogue for Club Med sovereign bonds comes despite surging debt ratios, made worse by incipient deflation. This gamble is based entirely on the premise that Germany will let the European Central Bank print money a l'outrance, a political calculation that borders on wishful thinking.
Yet the sheer scale of "stranded assets" and potential write-offs in the fossil industry raises eyebrows. IHS Global Insight said the average return on oil and gas exploration in North America has fallen to 8.6pc, lower than in 2001 when oil was trading at $27 a barrel. What happens if oil falls back towards $80 as Libya ends force majeure at its oil hubs and Iran rejoins the world economy?
A large chunk of US investment is going into shale gas ventures that are either underwater or barely breaking even, victims of their own success in creating a supply glut. One chief executive acidly told the TPH Global Shale conference that the only time his shale company ever had cash-flow above zero was the day he sold it - to a gullible foreigner.
The Oxford Institute for Energy Studies says the Eagle Ford Dry Gas field, the Marcellus WC T2 and "C" Counties, Powder River, Cotton Valley, among others, are all losing money at the current Henry Hub spot price of $4.50. "The benevolence of the US capital markets cannot last forever," it said.
This does not mean shale has been a failure. Optimists still hope it will reach a "positive inflexion point" in five years or so, the typical pattern for a fledgling industry. Some drillers have switched to tight oil projects that are much more more profitable because crude is closely linked to global prices. Yet the low-hanging fruit has been picked and the costs are ratcheting up. Three Forks McKenzie in Montana has a break-even price of $91.
Nor does it mean that America has made a mistake. Shale has been a timely shot in the arm, helping the US economy achieve "escape velocity" from the Great Recession, unlike Europe, which lurched back into a double-dip recession.
It has whittled down the US current account deficit, now just 2pc of GDP. Cheap gas costs - a third of EU prices and a quarter of Asian prices - has brought US industry back from near death, perhaps for long enough to give America another two decades of superpower ascendancy. But making money out of shale is another matter.
Even if the fossil companies navigate the next global downturn more or less intact, they are in the untenable position of booking vast assets that can never be burned without violating global accords on climate change.
The IEA says that two-thirds of their reserves become fictional if there is a binding deal limit to CO2 levels to 450 particles per million (ppm), the maximum deemed necessary to stop the planet rising more than two degrees centigrade above pre-industrial levels. It crossed 400 ppm threshold this spring, the highest in more than 800,000 years.
"Under a global climate deal consistent with a two degrees centigrade world, we estimate that the fossil fuel industry would stand to lose $28 trillion of gross revenues over the next two decades, compared with business as usual," said Mr Lewis. The oil industry alone would face stranded assets of $19 trillion, concentrated on deepwater fields, tar sands and shale.
By their actions, the oil companies implicitly dismiss the solemn climate pledges of world leaders as posturing, though shareholders are starting to ask why management is sinking so much their money into projects with such political risk. This insouciance is courting fate. President Barack Obama's new Climate Action Plan aims to cut US emissions by 30pc below 2005 levels by 2030. His Clean Air Act is a drastic assault on coal-fired power plants, "industrial sabotage by regulatory means" in the words of the industry lobby.
China too is trying to break free of coal after anti-smog protests across the cities of the Eastern Seaboard. It is shutting down its coal-fired plants in Beijing this year. There is a ban on new coal plants in key regions.
The Communist Party's Five-Year Plan aims to cap demand at 3.9bn tonnes a year up to 2015. Since the country consumes half the world's coal supply, this has left Australia's coal industry high and dry, Exhibit number one of assets stranded by a sudden policy change. Peak coal demand is in sight.
In any case, staggering gains in solar power - and soon battery storage as well - threatens to undercut the oil industry with lightning speed, perhaps in a race with cheap nuclear power from a coming generation of molten salt reactors. The US National Renewable Energy Laboratory has already captured 31.1pc of the sun's energy with a solar chip, but records keep being broken.
Brokers Sanford Bernstein say we are entering an era of "global energy deflation" where gains in solar technology must relentlessly erode the viability of the fossil nexus, since it goes only in one direction. Deep sea drilling will become pointless. We can leave the Arctic alone.
Once the crossover point is reached - and photovoltaic energy already competes with oil, diesel and liquefied natural gas in much of Asia without subsidies - it must surely turn into a stampede. My guess is that the world energy landscape will already look radically different in the early 2020s.
Cheuvreux's Mr Lewis compares the big oil companies with European utilities caught off-guard 10 years ago by the switch to wind and solar, their survival in doubt, their share prices slashed by two-thirds since 2008. "The utilities told us that renewables would have no impact on their business models, and now they are facing an existential crisis," he said.
BP's Lord Browne was derided for embracing solar and rebranding his company "Beyond Petroleum" in 2000. His successors repudiated his vision, famously going back to basics. He may have his moment of sweet vindication after all.
09 Jul 2014 [Link]
Solar at Scale [link]
By Elon Musk, Peter Rive and Lyndon Rive June 16, 2014
SolarCity has signed an agreement to acquire Silevo, a solar panel technology and manufacturing company whose modules have demonstrated a unique combination of high energy output and low cost. Our intent is to combine what we believe is fundamentally the best photovoltaic technology with massive economies of scale to achieve a breakthrough in the cost of solar power. Although no other acquisitions are currently being contemplated, SolarCity may acquire additional photovoltaics companies as needed to ensure clear technology leadership and we plan to grow internal engineering significantly.
We are in discussions with the state of New York to build the initial manufacturing plant, continuing a relationship developed by the Silevo team. At a targeted capacity greater than 1 GW within the next two years, it will be one of the single largest solar panel production plants in the world. This will be followed in subsequent years by one or more significantly larger plants at an order of magnitude greater annual production capacity.
Given that there is excess supplier capacity today, this may seem counter-intuitive to some who follow the solar industry. What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing. Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed.
SolarCity was founded to accelerate mass adoption of sustainable energy. The sun, that highly convenient and free fusion reactor in the sky, radiates more energy to the Earth in a few hours than the entire human population consumes from all sources in a year. This means that solar panels, paired with batteries to enable power at night, can produce several orders of magnitude more electricity than is consumed by the entirety of human civilization. A cogent assessment of sustainable energy potential from various sources is described well in this Sandia paper: www.sandia.gov/~jytsao/Solar%20FAQs.pdf.
Even if the solar industry were only to generate 40 percent of the world’s electricity with photovoltaics by 2040, that would mean installing more than 400 GW of solar capacity per year for the next 25 years. We absolutely believe that solar power can and will become the world’s predominant source of energy within our lifetimes, but there are obviously a lot of panels that have to be manufactured and installed in order for that to happen. The plans we are announcing today, while substantial compared to current industry, are small in that context.
Solar at Scale [link]
By Elon Musk, Peter Rive and Lyndon Rive June 16, 2014
Certain statements in this blog post, including statements regarding our plans to build manufacturing facilities in New York and potentially other states, our interest in future acquisitions, our proposed targeted capacity, our plans to acquire additional photovoltaics companies and grow our internal engineering capabilities, our ability to achieve projected cost reductions, forecasts concerning manufacturing production targets, cell efficiencies and costs, potential financial and various benefits of the transaction and demand for solar power, are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations. Various important factors could cause actual results to differ materially, including the risks identified in our SEC filings. SolarCity disclaims any obligation to update this information.
Even though the major wind markets of the past few years have slowed, overall global growth of wind energy will remain solid for the foreseeable future.
Jennifer Runyon, Chief Editor, RenewableEnergyWorld.com
April 10, 2014
New Hampshire, USA — Led by Asia and other developing regions, the global wind market will grow at an annual cumulative capacity rate of more than 10 percent over the next five years, according to the Global Wind Energy Council (GWEC). The group released its annual report yesterday and discussed its findings on a press call.
The Wind Market in 2013 — An “Off” Year
The past year was a rough one for wind enegy due to the fact that for the first time in history less wind energy capacity was installed in 2013 than was installed in 2012. From 1996 through to 2012, annual installed capacity for wind grew at an average rate of more than 20 percent but that percentage dropped dramatically in 2013 “caused by political uncertainty surrounding the tax laws in the U.S.,” according to Steve Saywer, GWEC Secretary General. The U.S. only installed about 1 GW of wind power in 2013, compared to more than 12 GW the year before. The chart below shows global annual installed wind capacity (courtesy GWEC).
In terms of annual markets for wind power, China is the leader and will remain in that spot for the foreseeable future, said Sawyer. “Germany had a very strong year as did the UK but probably for the first time in history, Canada installed more wind energy than the United States,” he said. Sawyer said that in 2014 Brazil could have a very good year. “It could be third next year.” The charts below (courtesy GWEC) show the top 10 countries for cumulative installed wind power today and the top 10 countries for annual installations of wind power in 2013.
When we look at cumulative installed capacity for wind power, however, a much brighter picture emerges, according to the GWEC report. In total, installed wind power capacity grew by 12.5 percent in 2013. “Not bad growth in cumulative terms,” said Sawyer, who added, “actually if you exclude the U.S. from the equation, we had modest growth in most parts of the world last year.” The chart below(courtesy GWEC) shows cumulative installed capacity for wind power. Today the world’s installed capacity for wind power sits at about 318 GW.
The Road Ahead – A Steady March into Emerging Markets
Looking at the top 10 countries in terms of cumulative installed capacity, China is way out in front, followed by the U.S., Germany, Spain, India and the UK. Sawyer sees this changing with more emerging markets installing more wind power capacity going forward. “India will overtake Spain in the relatively near future and probably by the end of this year we’ll have Brazil displace Denmark in the top 10,” he said. Sawyer added that “a number of emerging markets [will start] slowing moving up the top 10 chart as the years go by.”
One of the upsides of 2013 being a down year for annual installations is that 2014 is expected to be an excellent year for wind. GWEC predicts an annual growth rate of 34 percent in 2014 and a cumulative growth of 14.9 percent for this year with a total annual installed capacity of 47 GW. “After that we are projecting that things will return to more normal rates of growth,” said Sawyer. The chart below (courtesy GWEC) shows the market forecast for 2014 – 2018. Note that by the end of 2018, GWEC predicts that there will be just about 600 GW of installed wind power capacity, almost double where the industry is today.
Wind Around the World
Markets around the world will continue to install wind capacity with the biggest regions – Europe, North America, and Asia – still installing the lion’s share. In North America, Sawyer said that Mexico is a hot market for wind power. Sawyer explained that Mexico’s new energy reform legislation basically challenges the country to install about 2 GW of renewable energy capacity per year from now until 2024 to reach the target of 35 percent renewables by 2024 “and most of that is going to be wind,” he said.
Brazil is expected to double its wind power installed capacity in 2014, according to Sawyer. The country has a total installed capacity of 4 GW now and plans to install that much wind power in 2014. “The cumulative impacts of auctions and the build-out of the grid that is happening now is going to facilitate some fairly dramatic growth in Brazil over the next couple of years,” he said, adding that depending on what happens in the country’s elections and if Brazil can bring more stability to its economy, “it could be much larger.”
Another hot market for wind power is South Africa, according to GWEC. There is almost 1.2 GW of wind power either under construction or ready to start construction right now and another 800 MW that has been awarded a contract and is awaiting funding. “We expect [those 800 MW] to get financial close during the first half of this year,” said Sawyer. Sawyer said that the South African government has called for 9 GW of wind energy to be installed by 2030.
Sawyer mentioned other African markets such as Tanzania, Kenya and Ethiopia as poised for good growth in wind power. Ethiopia, in particular, has “some of the best wind resources in the world and has a fully developed plan to get up to about 7 GW by 2030,” he said.
Moving into Asia, Sawyer believes that there are many “potentially substantial” markets besides China, India and Japan. Even though it is one of the smallest in terms of population and electricity demand, Mongolia could be a very big wind market, said Sawyer. “There are tremendous opportunities for not only powering the growth in the country with the highest GDP growth rate in the world, but also exporting that power to China and through China to other countries in Asia,” he explained.
Vietnam, Pakistan and Sri Lanka all have excellent wind resources, a need for power, and projects coming online in the near future, according to Sawyer. In addition, Thailand has “a very good regime” for wind power, he said.
GWEC is watching the elections in India and remains optimistic that the country could end up with a much more “activist” government in terms of “developing the infrastructure that is necessary to spur significant growth in that very dynamic and growing economy,” said Sawyer.
In Latin America, beyond Brazil GWEC is seeing positive signs in Chile, Uruguay, Nicaragua, Panama, Costa Rica and some of the smaller Caribbean islands. The charts at the bottom of the page (courtesy GWEC) show the annual and cumulative market forecasts by region from 2013-2018.
Considerations for Manufacturers
Downward price pressure on wind turbines will continue, according to GWEC. The drive to be more competitive than “the incumbents” and the continued oversupply of turbines will keep pressure on manufacturers, straining margins and forcing them into new markets. Sawyer said that many companies were “hurt over the last several years” because their domestic markets took a hit. “They are realizing that being based in a single home market is a dangerous strategy,” he said.
Finally, unless and until there is a global carbon price, wind power won’t reach its maximum potential, said Sawyer. The 2015 climate meetings could result in such an agreement however even if one were to be put in place “we can’t expect that to have a major impact until sometime after 2020,” he said.
Without a global climate agreement, GWEC will remain focused on regional markets and legislation. The drivers that brought wind to where it is today remain in place, he said. Energy security, cost stability, local economic development and job creation are still some of the benefits that wind energy offers. These are “increasingly prominent” said Sawyer.
“And so we look forward to a strong signal from governments about our efforts to protect the climate but in the meantime we have to get on with it on a market-by-market basis,” he concluded.
Read the original article here.
WORLD SOLAR POWER 2014: COUNTRIES INSTALLING EQUIVALENT OF 12 NUCLEAR POWER PLANTS WORTH OF SOLAR CAPACITY
International Business Times
October 08 2014 [Link]
Global solar panel installations are expected to hit 45.4 gigawatts of capacity for 2014, fueled largely by robust development in China, the United States and the U.K., IHS Technology said Wednesday. Put into perspective, America’s largest nuclear power plant near Phoenix, Arizona, has a capacity of 3.7 gigawatts and provides power to 4 million people in the Southwest and Southern California.
The numbers illustrate the steady rise of solar and other forms of renewable energy as nuclear power’s share of energy output continues to decline in the aftermath of the 2011 Fukushima Daiichi nuclear disaster in Japan.
“With China installing more than 5 GW and the United States installing 2.3 GW in the fourth quarter of 2014, these two countries will account for more than 50 percent of global installations during this period,” Ash Sharma, senior director of solar research at IHS, said in an email.
After a sluggish start to the year, thanks in part to a slowdown in solar installations in Germany and Italy, fourth-quarter global photovoltaic (PV) solar installations will hit 14.4 GW, or about 32 percent of the total for 2014. The U.K. made significant advances this year to become the world’s fourth-largest solar power producer, after China, Japan and the United States. The country is expected to complete about 3.1 GW of solar power capacity by the end of the year.
IHS says it expected global PV installations to slow from over 20 percent annual growth in 2013 and 2014 to 16 percent next year, or 53 GW. TheInternational Energy Agency (IEA) estimates the total global solar power capacity will grow from 98 GW in 2012 to 308 GW in 2018. In 2000, the global solar capacity was just 1.5 GW, according to the IEA.
Meanwhile, nuclear power capacity has declined as countries grow increasingly wary of the current risks and expenses in maintaining modern, safe plants. The Fukushima nuclear disaster spurred Germany to announce it would phase out nuclear sources of energy, opting instead to aggressively expand into wind and solar.
“Nuclear energy’s share of global power production has declined steadily from a peak of 17.6 percent in 1996 to 10.8 percent in 2013,” said a report released in September by the Worldwatch Institute, a green energy advocacy group. “Renewables increased their share from 18.7 percent in 2000 to 22.7 percent in 2012.”
Read the original article here.
The United States Energy Information Administration provides a wealth of tools and deep data resources. Among them, the international energy statistics Energy Consumption Calculator.
You'll have to click below to visit their site if you'd like to use it:
Wind and solar are much less financially risky than other power projects
By David Roberts on 11 Dec 2014 | GRIST.ORG [link]
Here in Seattle, we are in the midst of a truly epic fustercluck. We’re trying to build a huge tunnel beneath our downtown and it is not going well, to put it mildly. If only someone had warned us! (Like, I don’t know, a mayor.)
Our own Nate Johnson has written about the propensity of transportation megaprojects to blow past their projected budgets. But what about my own personal obsession, power projects? Think, for instance, of the Kemper power plant in Mississippi, which is still under construction and already several billion dollars over budget and several years behind schedule.
Is this kind of thing inevitable? If large power projects — or certain kinds of large power projects — reliably go over budget, then it may be that we’re systematically mis-predicting energy scenarios and misallocating investment dollars. How much do we really know about which power projects go over budget and why?
Nerds to the rescue! As it happens, energy researcher Benjamin Sovacool and colleagues recently released a pair of peer-reviewed studies (one, two) that dig way, waaay into this subject. Some of the results are surprising, going against widespread assumptions and my own hunches. Some are just what you’d expect. (Spoiler: Smaller, more modular power projects see cost overruns less often and therefore represent less financial risk.)
Let’s quickly walk through the results and then consider a few broader points.
Sovacool et al. began by assembling a database of “401 electricity projects built between 1936 and 2014 in 57 countries.” There were six categories: big hydro dams, nuclear plants, thermal (coal/natgas/oil/biomass) plants, wind farms, solar farms (PV or CSP), and high-voltage transmission lines. “In sum,” they write, “these projects required roughly $820 billion in investment, and amounted to 325,515 MW of installed capacity and 8495 km of transmission lines.”
They took this database and ran all kinds of regression analyses on it. As to the basic question of which kinds of projects suffer cost overruns and how big those overruns are, this is what they found:
CHEAPEST SOLAR EVER? AUSTIN ENERGY BUYS PV FROM SUNEDISON AT 5 CENTS PER KILOWATT-HOUR
An unprecedentedly low price for a large solar project
Greentech Media, March 10, 2004 [Link]
Texas utility Austin Energy is going to be paying 5 cents per kilowatt-hour for solar power, and it could mean lower customer rates.
City-owned Austin Energy is about to sign a 25-year PPA with Sun Edison for 150 megawatts of solar power at “just below” 5 cents per kilowatt-hour. The power will come from two West Texas solar facilities, according to reports in the Austin American-Statesman. According to reports, around 30 proposals were at prices near SunEdison’s. Austin Energy has suggested that the PV deal will slightly lower rates for customers.
This is one of the lowest, if not the lowest, reported prices for contracted solar that we have seen. Last year, First Solar (FSLR) entered a 25-year PPA in New Mexico for 50 megawatts of solar power at 5.79 cents per kilowatt-hour. That number included a significant PTC from the state. The Macho Springs project, the Austin project and most solar projects of this nature rely on the 30 percent federal Investment Tax Credit.
Austin Energy’s net sub-five cent price does not include any state PTC, according to Monty Humble of energy development firm Brightman EnergyLLC. He said that the utility was “to be commended” for this solicitation. Humble added, “Based on our analysis, it can be done. There’s not a whole lot of profit in it, but it’s not a loss leader. It’s a legitimate bid.”
GTM Solar Analyst Cory Honeyman points out that “new PPAs signed in North Carolina fetched prices for less than 7 cents per kilowatt-hour” citing a report by the Charlotte Observer.Like Macho Springs, those projects could also take advantage of an in-state tax credit to make the economics work. Honeyman said that none of the projects in Georgia or North Carolina were larger than 20 megawatts, so 5 cents does seem like “an unprecedented low for large-scale projects.”
Bret Kadison, COO of Austin-based Brazos Resources, an energy investment firm, said this was “a highly competitive solicitation.” Although historically, “Texas hasn’t been a hotbed of solar, you’re starting to see that change. ERCOT needs the generation.”
He expects to see more solar activity “not just as a green source of energy, but as an affordable source of energy. Texas is seeing economic growth, but the power grid has not kept pace.” Kadison added, “When you think about the volatility of natural gas, a 25-year PPA starts to look pretty attractive.”
Kadison notes, “This is below the all-in cost of natural gas generation, even with low fuel prices and before factoring in commodity volatility and cost overruns.” He also points out that the original RFP was for 50 megawatts, but the utility ended up buying 150 megawatts “in a red state where hydrocarbons dominate the political landscape.” Kadison suggests that “one of the biggest cost reduction drivers that allowed solar to reach this parity came from the massive reduction in financing costs.”
The 5-cent price falls below Austin Energy’s estimates for natural gas at 7 cents, coal at 10 cents and nuclear at 13 cents. The utility points out that it approved a 16.5-cent price for the Webberville solar plant in 2009.
Austin Energy has a 35 percent renewable energy resource goal by 2016 and a solar goal of 200 megawatts by 2020. The utility is currently at about 25 percent, much of it made up by its 850 megawatts of wind.
Humble of Brightman Energy said, “I expect that this will force a lot of players to reexamine their approach and get far more aggressive. Because of the size of the ERCOT market and the size of the state, Texas is potentially the largest solar market in the country.” According to GTM Research’s 2013 U.S. SMI report, Texas ranked 8th in the nation with 75 megawatts installed in 2013.
GTM’s Honeyman notes, “This is the second major announcement in which a utility has stated plans to procure more than 100 megawatts of solar PV based on its cost-competitiveness with natural gas, as opposed to RPS-driven demand.”
If developers continue to bid in at these prices — it won’t be the last.
Link to the original article by GreenTech Media
A Chevrolet Volt electric vehicle, front. Consumers so far have been slow to buy electric cars.
U.S. SETS HIGHER FUEL EFFICIENCY STANDARDS
By BILL VLASIC, New York Times
Published: August 28, 2012
DETROIT — The Obama administration issued on Tuesday the final version of new rules that require automakers to nearly double the average fuel economy of new cars and trucks by 2025.
The standards — which mandate an average fuel economy of 54.5 miles per gallon for the 2025 model year — will increase the pressure on auto manufacturers to step up development of electrified vehicles as well as sharply improve the mileage of their mass-market models through techniques like more efficient engines and lighter car bodies.
Current rules for the Corporate Average Fuel Economy, or CAFE, program mandate an average of about 29 miles per gallon, with gradual increases to 35.5 m.p.g. by 2016.
The new rules represent a victory for environmentalists and advocates of fuel conservation, but were attacked by opponents, including the Republican presidential nominee Mitt Romney, as too costly for consumers.
While the regulations have been in development for more than a year, the White House’s decision to make them final on the first full day of the Republican National Convention seemed intended to highlight one of President Obama’s proudest accomplishments at a time when Mr. Romney has laid out a different energy and environmental agenda.
The administration called the new rules “historic,” and estimated that Americans would reduce their oil consumption by 12 billion barrels over the course of the program. “Thesefuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” Mr. Obama said in a statement.
But the Romney campaign has criticized the new rules as “extreme” and said the standards would limit the choices when consumers shop for a new car. “The president tells voters that his regulations will save them thousands of dollars at the pump, but always forgets to mention that the savings will be wiped out by having to pay thousands of dollars more upfront for unproven technology that they may not even want,” said Andrea Saul, a spokeswoman for the Romney campaign.
The transportation secretary, Ray LaHood, said the standards would save Americans $1.7 trillion in fuel costs, resulting in an average savings of more than $8,000 a vehicle by 2025.
The fuel savings, he said, would easily exceed the estimated $2,000 to $3,000 that the more efficient vehicles would cost consumers to buy.
“You put better technology in the car and the price is going to go up,” Mr. LaHood said in a conference call with reporters. “But it goes up a fraction of what you save on gas.”
The administration also said the rules would cut greenhouse gas emissions in half by 2025, eliminating six billion tons over the course of the program.
Proponents of the rules contend that they could also generate hundreds of thousands of jobs by increasing the demand for new technologies.
“Our nation will be more secure, our environment will be cleaner, and consumers will have more money in their pockets as a result of the new rule,” said Phyllis Cuttino, director of the Pew Clean Energy Program, an environmental organization based in Washington.
Thirteen major automakers, including General Motors, Ford and Chrysler, endorsed the new standards during lengthy negotiations last year.
The companies fought for and won inclusion of a critical midprogram review period in the final rule. The review, to be conducted at the end of the decade, is meant to assess the progress made toward achieving the 54.5 m.p.g. goal. The standard could then be altered if the manufacturers are struggling to meet the new guidelines.
One industry trade group, the Alliance of Automobile Manufacturers, said a “rigorous midterm review” was necessary to determine how consumers reacted to new models that had better mileage but might be more expensive.
“Compliance with higher fuel-economy standards is based on sales, not what we put on the showroom floor,” the alliance said in a statement.
Auto dealers also expressed concern that higher prices for new cars might exclude some consumers from the market. “This increase shuts almost seven million people out of the new car market entirely,” said Bill Underriner, chairman of the National Auto Dealers Association.
Auto companies are expected to take different approaches to meeting the more stringent guidelines.
Some, like the Japanese automaker Nissan, are counting on consumers gravitating to all-electric models like its Leaf. Others, like Chrysler, will focus their efforts on improving engines and transmissions on traditional gasoline-powered cars.
Ford is offering its new Focus compact car with a variety of power sources, ranging from an electric version to a regular gas engine.
Still, American consumers have so far been slow to buy electric cars, despite gas prices that are near $4 a gallon. General Motors is planning to shut down production temporarily of the Chevrolet Volt plug-in hybrid to reduce a backlog of unsold inventory.
For the most part, automakers will have to accelerate their efforts to improve mileage by reducing the weight of vehicles, using more aerodynamic designs and decreasing engine size without sacrificing power.
“The vast majority of vehicles will be more efficient without using electric or hybrid powertrains,” said Daniel F. Becker, director of the Safe Climate Campaign, a Washington-based environmental advocacy group. “These cars won’t look any different than today unless you check under the hood.”
Even if the 54.5 m.p.g. goal is reached, most cars and trucks will get lower mileage in real-life driving. Credits for air-conditioning units in vehicles will reduce the average mileage to about 49 m.p.g., and actual driving conditions could reduce it further.
John M. Broder contributed reporting from Washington.
The long-term transformation of how the US produces and consumes energy continues…
Wind - An Encyclopedia Entry
Wind power is typically generated by large-scale wind farms where they are connected to power grids that distribute their electricity. Though wind power has increased substantially since 1970, it constitutes only a small fraction of U.S. electricity supply.
Historically, harnessing the power of the wind as an energy source has freed man from manual labor for centuries. Windmills were first broadly used to mill grain by turning stones, and later as an efficient means of pumping water into storage for later use on demand. Today, wind power is turned into electricity by converting the rotation of turbine blades on windmills into electrical current.
Wind power is typically generated by large-scale wind farms which are located either on land or just off shore where they are connected to power grids that distribute their electricity to end users. Some small consumers of power also employ wind power where construction of transmission lines is expensive or prohibited.
Today, wind power provides 1.6 percent of all the energy consumed in the United States. Though wind power has increased substantially since 1970, it constitutes only a small fraction of U.S. electricity supply. In 2013, wind power accounted for 4 percent of all electricity generated in the U.S.
Wind power can be viable for companies in areas where prevailing conditions are favorable, especially if the government compels the production of renewable energy.
However, sufficient wind for economically generated power is not always available. For example, according to the Energy Information Administration, relatively few areas in the eastern half of the United States are rated as having “class six” winds—15.7 mph at a height of 33 feet—or “superb” for wind power generation. Other areas of the country hold great promise for expanding wind power generation, but in many instances opposition has grown just as the industry has approached commercial viability.
Like solar power, wind power requires an extensive amount of land or, in the case of near-shore power generation, sea. For comparison purposes, and taking into account capacity (or load factors), the land area covered by a wind power station of the same energy output as a nuclear power station would be about 2,000 times as great.
Recent technological and efficiency gains have led to more sophisticated wind units, capable of producing over 3 megawatts each, and trading surface disturbance for the larger, higher and more visible newer units.
Though wind farms release no emissions into the air, they have their own set of environmental problems. Rotating wind turbines can injure or kill birds and bats. They also strike some individuals as aesthetically degrading to the landscapes and seascapes they occupy. Some complain of noise. Others have objected to the transmission lines necessary to transmit electricity from remote locations to the electricity consumers.
Wind power has seen substantial growth in recent years, aided by tax subsidies and state government mandates to purchase renewable energy through establishment of “renewable portfolio standards,” or RPS. Many utilities mandated by the government to sell a certain amount of their electricity from renewable sources have turned to wind power as one of the less expensive renewable power sources.
The Federal Government has extended the production tax credit (PTC) for wind several times since it was first introduced as part of the Energy Policy Act of 1992. Most recently, the American Taxpayer Relief Act passed on January 1, 2013 extended the production tax credit through 2013, but with definitional differences that make the tax credit more expensive for taxpayers than its original incarnation. While the original PTC stipulated that the wind unit must begin operation in the year of the credit, the extension that was passed indicates only that the project must begin construction in 2013 with no specific date for beginning operation. It is therefore a significant expansion of the current law. Further, the Internal Revenue Service upped the credit from 2.2 cents per kilowatt hour to 2.3 cents per kilowatt hour. It is paid on electricity generated for the first 10 years of operation of the wind unit.
In lieu of the production tax credit, President Obama’s economic stimulus signed into law in February 2009 made a 30 percent investment tax credit available to wind farms. Previously, wind farms were allowed under the section 1603 grants to take that 30 percent as an immediate rebate of their investment cost instead of taking the 30 percent over time as a tax credit. The 1603 program expired at the end of 2011.
Besides the subsidies that wind power receives, more than half the states have renewable portfolio standards requiring a certain percentage of their electricity to be generated from qualified renewable energy technologies. These standards have helped to develop onshore wind energy as it is the least expensive qualifying renewable technology. No offshore wind farms have been built to date, though there are proposals for offshore wind farms along the Atlantic coast and in the Great Lakes. Offshore wind is more than 2.5 times more expensive than onshore wind, according to the Energy Information Administration.
Trends In The Cost Of Energy
The cost of electricity US cents/kWh for different technologies for the period 1980-2030
The cost of thin film modules per watt has always been substantially lower (about 50%) than crystalline Si of the same efficiency. The efficiency of cSi was at any given time about 5% higher than thin film PV [note Figure2] because the development of cSi has preceded those of thin films by five years.
The reason for the lower costs of thin films are cost difference are;
i) the thickness of the semiconductor material is much thinner, (2 microns compared to 300 microns)
ii) the interconnections of the monolithically integrated module was part of the manufacturing process resulting in substantially lower assembly costs,
iii) the electrode structures and the high currents in crystalline Si technology require additional costly materials and processes not needed for thin films.
There is an existing high volume mature industry that can guide us in estimating the terminal cost expectations of glass-to-glass encapsulated thin film PV modules. Car windows and low-e windows are a very similar structure and cost to the thin film PV product. The estimated production volume for these products is over 1 billion square meters per year. This volume would generate over 200GW of PV electricity. In this volume the manufacturing cost of the laminated glass is about $20 per square meter. This can be expected to be the terminal cost of glass-to-glass PV modules. If we assume thin film module efficiency by 2050 of 40%, one square meter will produce 400 Watts. This gives a terminal cost for this type of modules of $0.05 per watt. We double this terminal cost for PV (as a conservative contingency), with $0.10 per watt module prices a system can be installed at $0.20 per watt, with resulting cost of PV electricity of about $0.01 per kWh. The $0.10 module cost is equivalent to $40 per square meter of the laminated glass industry product, still twice the existing terminal cost reached in the glass industry.
Source: Bloomberg New Energy Finance, EIA, FERC / Factbook [Download PDF]
Note: In Figure 6, numbers for official capacity additions for non-renewable energy not yet available. New natural gas build also includes oil-generating capacity; the EIA does not differentiate between the two, but the vast majority is devoted to natural gas generation.
In Figure 7 below, numbers include utility-scale projects of all types, small-scale solar, and small- and medium-sized wind.
Providing all global energy with wind, water and solar
Part 1: Technologies, energy resources, quantities and areas of infrastructure, and materials
Mark Z. Jacobson, Mark A. Delucchi
Climate change, pollution, and energy insecurity are among the greatest problems of our time. Addressing them requires major changes in our energy infrastructure. Here, we analyze the feasibility of providing worldwide energy for all purposes (electric power, transportation, heating/cooling, etc.) from wind, water, and sunlight (WWS). In Part I, we discuss WWS energy system characteristics, current and future energy demand, availability of WWS resources, numbers of WWS devices, and area and material requirements. In Part II, we address variability, economics, and policy of WWS energy. We estimate that 3,800,000 5 MW wind turbines, 49,000 300 MW concentrated solar plants, 40,000 300 MW solar PV power plants, 1.7 billion 3 kW rooftop PV systems, 5350 100 MW geothermal power plants, 270 new 1300 MW hydroelectric power plants, 720,000 0.75 MW wave devices, and 490,000 1 MW tidal turbines can power a 2030 WWS world that uses electricity and electrolytic hydrogen for all purposes. Such a WWS infrastructure reduces world power demand by 30% and requires only 0.41% and 0.59% more of the world’s land for footprint and spacing, respectively. We suggest producing all new energy with WWS by 2030 and replacing the pre-existing energy by 2050. Barriers to the plan are primarily social and political, not technological or economic. The energy cost in a WWS world should be similar to that today.
A solution to the problems of climate change, air pollution, water pollution, and energy insecurity requires a large-scale conversion to clean, perpetual, and reliable energy at low cost together with an increase in energy efficiency. Over the past decade, a number of studies have proposed large-scale renewable energy plans. Jacobson and Masters (2001) suggested that the U.S. could satisfy its Kyoto Protocol requirement for reducing carbon dioxide emissions by replacing 60% of its coal generation with 214,000–236,000 wind turbines rated at 1.5 MW (million watts). Also in 2001, Czisch (2006) suggested that a totally renewable electricity supply system, with intercontinental transmission lines linking dispersed wind sites with hydropower backup, could supply Europe, North Africa, and East Asia at total costs per kWh comparable with the costs of the current system. Hoffert et al. (2002) suggested a portfolio of solutions for stabilizing atmospheric CO2, including increasing the use of renewable energy and nuclear energy, decarbonizing fossil fuels and sequestering carbon, and improving energy efficiency. Pacala and Socolow (2004) suggested a similar portfolio, but expanded it to include reductions in deforestation and conservation tillage and greater use of hydrogen in vehicles.
More recently, Fthenakis et al. (2009) analyzed the technical, geographical, and economic feasibility for solar energy to supply the energy needs of the U.S. and concluded (p. 397) that ‘‘it is clearly feasible to replace the present fossil fuel energy infrastructure in the U.S. with solar power and other renewables, and reduce CO2 emissions to a level commensurate with the most aggressive climate-change goals’’. Jacobson (2009) evaluated several longterm energy systems according to environmental and other criteria, and found WWS systems to be superior to nuclear, fossil-fuel, and biofuel systems (see further discussion in Section 2). He proposed to address the hourly and seasonal variability of WWS power by interconnecting geographically disperse renewable energy sources to smooth out loads, using hydroelectric power to fill in gaps in supply. He also proposed using battery-electric vehicles (BEVs) together with utility controls of electricity dispatch to them through smart meters, and storing electricity in hydrogen or solar-thermal storage media. Cleetus et al. (2009) subsequently presented a ‘‘blueprint’’ for a clean-energy economy to reduce CO2-equivalent GHG emissions in the U.S. by 56% compared with the 2005 levels. That study featured an economy-wide CO2 cap-and-trade program and policies to increase energy efficiency and the use of renewable energy in industry, buildings, electricity, and transportation. Sovacool and Watts (2009) suggested that a completely renewable electricity sector for New Zealand and the United States is feasible.
In Jacobson and Delucchi (2009), we outlined a large-scale plan to power the world for all purposes with WWS (no biofuels, nuclear power, or coal with carbon capture). The study found that it was technically feasible to power the world with WWS by 2030 but such a conversion would almost certainly take longer due to the difficulty in implementing all necessary policies by then. However, we suggested, and this study reinforces, the concept that all new energy could be supplied by WWS by 2030 and all existing energy could be converted to WWS by 2050. The analysis presented here is an extension of that work.
Table 1 compares and summarizes several other recent largescale plans. While all plans are ambitious, forward thinking, and detailed, they differ from our plan, in that they are for limited world regions and none relies completely on WWS. However, some come close in the electric power sector, relying on only small amounts of non-WWS energy in the form of biomass for electric power production. Those studies, however, address only electricity and/or transport, but not heating/cooling.
More well known to the public than the scientific studies, perhaps, are the ‘‘Repower America’’ plan of former Vice-President and Nobel-Peace Prize winner Al Gore, and a similar proposal by businessman T. Boone Pickens. Mr. Gore’s proposal calls for improvements in energy efficiency, expansion of renewable energy generation, modernization of the transmission grid, and the conversion of motor vehicles to electric power. The ultimate (and ambitious) goal is to provide America ‘‘with 100% clean electricity within 10 years,’’ which Mr. Gore proposes to achieve by increasing the use of wind and concentrated solar and improving energy efficiency (Alliance for Climate Protection, 2009). In Gore’s plan, solar PV, geothermal, and biomass electricity would grow only modestly, and nuclear power and hydroelectricity would not grow. Mr. Pickens’ plan is to obtain up to 22% of the U.S. electricity from wind, add solar capacity to that, improve the electric grid, increase energy efficiency, and use natural gas instead of oil as a transitional fuel (Pickens, 2009).
There is little doubt that the large-scale use of renewable energy envisaged in these plans and studies would greatly mitigate or eliminate a wide range of environmental and human health impacts of energy use (e.g., Jacobson, 2009; Sovacool and Sovacool, 2009; Colby et al., 2009; Weisser, 2007; Fthenakis and Kim, 2007). But, is a large-scale transformation of the world’s energy systems feasible? In this paper and in Part II, we address this question by examining the characteristics and benefits of wind, water, and solar (WWS)-energy systems, the availability of WWS resources, supplies of critical materials, methods of addressing the variability of WWS energy to ensure that power supply reliably matches demand, the economics of WWS generation and transmission, the economics of the use ofWWS power in transportation, and policy issues. Although we recognize that a comprehensive plan to address global environmental problems must also address other sectors, including agriculture (Horrigan et al., 2002; Wall and Smit, 2005) and forestry (Niles et al., 2002), we do not address those issues here.
2. Clean, low-risk, sustainable energy systems
2.1. Evaluation of long-term energy systems: why we choose WWS power
Because climate change (particularly loss of the Arctic sea ice cap), air pollution, and energy insecurity are the current and growing problems, but it takes several decades for new technologies to become fully adopted, we consider only options that have been demonstrated in at least pilot projects and that can be scaled up as part of a global energy system without further major technology development. We avoid options that require substantial further technological development and that will not be ready to begin the scale-up process for several decades. Note that we select technologies based on the state of development of the technology only rather than whether industrial capacity is currently ramped up to produce the technologies on a massive scale or whether society is motivated to change to the technologies. In this paper and in Part II, we do consider the feasibility of implementing the chosen technologies based on estimated costs, necessary policies, and available materials as well as other factors.
In order to ensure that our energy system remains clean even with large increases in population and economic activity in the long run, we consider only those technologies that have essentially zero emissions of greenhouse gases and air pollutants per unit of output over the whole ‘‘lifecycle’’ of the system. Similarly, we consider only those technologies that have low impacts on wildlife, water pollution, and land, do not have significant waste-disposal or terrorism risks associated with them, and are based on primary resources that are indefinitely renewable or recyclable.
The previous work by Jacobson (2009) indicates that WWS power satisfies all of these criteria. He ranked several long-term energy systems with respect to their impacts on global warming, air pollution, water supply, land use, wildlife, thermal pollution, water–chemical pollution, and nuclear weapons proliferation. The ranking of electricity options, starting with the highest, included: wind power, concentrated solar, geothermal, tidal, solar photovoltaic, wave, and hydroelectric power, all of which are powered by wind, water, or sunlight (WWS). He also found that the use of BEVs and hydrogen fuel-cell vehicles (HFCVs) powered by the WWS options would largely eliminate pollution from the transportation sector. Here, we consider these technologies and other existing technologies for the heating/cooling sectors, discussed in Section 2. Although other clean WWS electric power sources, such as ocean or river current power, could be deployed in the short term, these are
not examined here simply because we could not cover every technology. Nevertheless, we do cover related although slightly different power sources (e.g., wave, tidal, and hydroelectric power).
Finally, Jacobson (2009) concluded that coal with carbon capture, corn ethanol, cellulosic ethanol, and nuclear power were all moderately or significantly worse than WWS options with respect to environmental and land use impacts. Similarly, here we do not consider any combustion sources, such as coal with carbon capture, corn ethanol, cellulosic ethanol, soy biodiesel, algae biodiesel, biomass for electricity, other biofuels, or natural gas, because none of these technologies can reduce GHG and air-pollutant emissions to near zero, and all can have significant problems in terms of land use, water use, or resource availability (See Delucchi (2010) for a review of land-use, climate-change, and
water-use impacts of biofuels.) For example, even the most climate-friendly and ecologically acceptable sources of ethanol, such as unmanaged, mixed grasses restored to their native (nonagricultural) habitat (Tilman et al., 2006), will cause air pollution mortality on the same order as gasoline (Jacobson, 2007; Anderson, 2009; Ginnebaugh et al., 2010). The use of carbon capture and sequestration (CCS) can reduce CO2 emissions from the stacks of coal power plants by 85–90% or more, but it has no effect on CO2 emissions due to the mining and transport of coal; in fact it will increase such emissions and of air pollutants per unit of net delivered power and will increase all ecological, land-use, air-pollution, and water-pollution impacts from coal mining, transport, and processing, because the CCS system requires 25% more energy, thus 25% more coal combustion, than does a system without CCS (IPCC, 2005).
For several reasons we do not consider nuclear energy (conventional fission, breeder reactors, or fusion) as a long-term global energy source. First, the growth of nuclear energy has historically increased the ability of nations to obtain or enrich uranium for nuclear weapons (Ullom, 1994), and a large-scale worldwide increase in nuclear energy facilities would exacerbate this problem, putting the world at greater risk of a nuclear war or terrorism catastrophe (Kessides, 2010; Feiveson, 2009; Miller and Sagan, 2009; Macfarlane and Miller, 2007; Harding, 2007). The historic link between energy facilities and weapons is evidenced by the development or attempted development of weapons capabilities secretly in nuclear energy facilities in Pakistan, India (Federation of American Scientists, 2010), Iraq (prior to 1981), Iran (e.g., Adamantiades and Kessides, 2009, p. 16), and to some extent North Korea. Feiveson (2009) writes that ‘‘it is well understood that one of the factors leading several countries now without nuclear power programs to express interest in nuclear power is the foundation that such programs could give them to develop weapons’’ (p. 65). Kessides (2010) asserts, ‘‘a robust global expansion of civilian nuclear power will significantly increase proliferation risks unless the current non-proliferation regime is substantially strengthened by technical and institutional measures and its international safeguards system adequately meets the new challenges associated with a geographic spread and an increase in the number of nuclear facilities’’ (p. 3860). Similarly, Miller and Sagan (2009) write, ‘‘it seems almost certain that some new entrants to nuclear power will emerge in the coming decades and that the organizational and political challenges to ensure the safe and secure spread of nuclear technology into the developing world will be substantial and potentially grave’’ (p. 12).
If the world were converted to electricity and electrolytic hydrogen by 2030, the 11.5 TW in resulting power demand would require 15,800 850 MW nuclear power plants, or one installed every day for the next 43 years. Even if only 5% of these were installed, that would double the current installations of nuclear power worldwide. Many more countries would possess nuclear facilities, increasing the likelihood that these countries would use the facilities to hide the development of nuclear weapons as has occurred historically.
Second, nuclear energy results in 9–25 times more carbon emissions than wind energy, in part due to emissions from uranium refining and transport and reactor construction (e.g., Lenzen, 2008; Sovacool, 2008), in part due to the longer time required to site, permit, and construct a nuclear plant compared with a wind farm (resulting in greater emissions from the fossil-fuel electricity sector during this period; Jacobson, 2009), and in part due to the greater loss of soil carbon due to the greater loss in vegetation resulting from covering the ground with nuclear facilities relative to wind turbine towers, which cover little ground. Although recent construction times worldwide are shorter than the 9-year median construction times in the U.S. since 1970 (Koomey and Hultman, 2007), they still averaged 6.5 years worldwide in 2007 (Ramana,
2009), and this time must be added to the site permit time (3 years in the U.S.) and construction permit and issue time (3 years). The overall historic and present range of nuclear planning-to-operation times for new nuclear plants has been 11–19 years, compared with an average of 2–5 years for wind and solar installations (Jacobson, 2009). Feiveson (2009) observes that ‘‘because wind turbines can be installed much faster than could nuclear, the cumulative greenhouse gas savings per capital invested appear likely to be greater for wind’’ (p. 67). The long time required between planning and operation of a nuclear power plant poses a significant risk to the Arctic sea ice. Sea ice records indicate a 32% loss in the August 2010 sea ice area relative to the 1979–2008 mean (Cryosphere Today, 2010). Such rapid loss indicates that solutions to global warming must be implemented quickly. Technologies with long lead times will allow the high-albedo Arctic ice to disappear, triggering more rapid positive feedbacks to warmer temperatures by uncovering the low-albedo ocean below.
Third, conventional nuclear fission relies on finite stores of uranium that a large-scale nuclear program with a ‘‘once through’’ fuel cycle would exhaust in roughly a century (e.g., Macfarlane and Miller, 2007; Adamantiades and Kessides, 2009). In addition, accidents at nuclear power plants have been either catastrophic (Chernobyl) or damaging (Three-Mile Island), and although the nuclear industry has improved the safety and performance of reactors, and has proposed new (but generally untested) ‘‘inherently’’ safe reactor designs (Piera, 2010; Penner et al., 2008; Adamantiades and Kessides, 2009; Mourogov et al., 2002; Mourogov, 2000), there is no guarantee that the reactors will be designed, built, and operated correctly. For example, Pacific Gas and Electric Company had to redo some modifications it made to its Diablo Canyon nuclear power plant after the original work was done backwards (Energy Net, 2010), and French nuclear regulators recently told the firm Areva to correct a safety design flaw in its latest-generation reactor (Nuclear Power Daily, 2009). Further, catastrophic scenarios involving terrorist attacks are still conceivable (Feiveson, 2009). Even if the risks of catastrophe are very small, they are not zero (Feiveson, 2009), whereas with wind and solar power, the risk of catastrophe is zero. Finally, conventional nuclear power produces radioactive waste, which must be stored for thousands of years, raising technical and long-term cost questions (Barre´, 1999; von Hippel, 2008; Adamantiades and Kessides, 2009).
‘‘Breeder’’ nuclear reactors have similar problems as conventional fission reactors, except that they produce less low-level radioactive waste than do conventional reactors and re-use the spent fuel, thereby extending uranium reserves, perhaps indefinitely (Penner et al., 2008; Purushotham et al., 2000; Till et al., 1997). However, they produce nuclear material closer to weapons grade that can be reprocessed more readily into nuclear weapons (Kessides, 2010; Adamantiades and Kessides, 2009; Macfarlane and Miller, 2007; Glaser and Ramana, 2007), although some technologies have technical features that make diversion and reprocessing especially difficult—albeit not impossible (Hannum et al., 1997; Kessides, 2010; Penner et al., 2008). Kessides (2010) writes, ‘‘analyses of various reactor cycles have shown that all have some potential for diversion, i.e., there is no proliferation-proof nuclear power cycle’’ (p. 3861).
A related proposal is to use thorium as a nuclear fuel, which is less likely to lead to nuclear weapons proliferation than the use of uranium, produces less long-lived radioactive waste, and greatly extends uranium resources (Macfarlane and Miller, 2007). However, thorium reactors require the same significant time lag between planning and operation as conventional uranium reactors and most likely longer because few developers and scientists have experience with constructing or running thorium reactors. As such, this technology will result in greater emissions from the background electric grid compared with WWS technologies, which have a shorter time lag. In addition, lifecycle emissions of carbon from a thorium reactor are on the same order as those from a uranium reactor. Further, thorium still produces radioactive waste containing 231Pa, which has a half-life of 32,760 years. It also produces 233U, which can be used in fission weapons, such as in one nuclear bomb core during the Operation Teapot nuclear tests in 1955. Weaponization, though, is made more difficult by the presence of 232U.
Fusion of light atomic nuclei (e.g., protium, deuterium, or tritium) theoretically could supply power indefinitely without long-lived radioactive wastes as the products are isotopes of helium (Ongena and Van Oost, 2006; Tokimatsu et al., 2003); however, it would produce short-lived waste that needs to be removed from the reactor core to avoid interference with operations, and it is unlikely to be commercially available for at least another 50–100 years (Tokimatsu et al., 2003; Barre´, 1999; Hammond, 1996), long after we will have needed to transition to alternative energy sources. By contrast, wind and solar power are available today, will last indefinitely, and pose no serious risks. Note that our reasons for excluding nuclear are not economic. A brief discussion of the economics of nuclear power is given in Appendix A.
For these reasons, we focus on WWS technologies. We assume that WWS will supply electric power for the transportation, heating (including high-temperature heating and cooking)/cooling sectors, which traditionally have relied mainly on the direct use of oil or gas rather than electricity, as well as for traditional electricity-consuming end uses such as lighting, cooling, manufacturing, motors, electronics, and telecommunications. Although we focus mainly on energy supply, we acknowledge and indeed emphasize the importance of demand-side energy conservation measures to reduce the requirements and impacts of energy supply. Demand-side energy conservation measures include improving the energy-out/energy in efficiency of end uses (e.g., with more efficient vehicles, more efficient lighting, better insulation in homes, and the use of heat exchange and filtration systems), directing demand to low-energy use modes (e.g., using public transit or telecommuting instead of driving), large-scale planning to reduce energy demand without compromising economic activity or comfort (e.g., designing cities to facilitate greater use of non-motorized transport and to have better matching of origins and destinations, thereby reducing the need for travel), and designing buildings to use solar energy directly (e.g., with more daylighting, solar hot water heating, and improved passive solar heating in winter and cooling in summer). For a general discussion of the potential to reduce energy use in transportation and buildings, see the American Physical Society (2008). For a classification scheme that facilitates analyses of the potential gains from energy efficiency, see Cullen and Allwood (2009).
Read the full study here.
The last ten years of the graph pictured above are consistent with the first ten years of the Roadmap graph you see below. Technological, financial and political conditions now allow faster technology transitions than from 1850-2000.
Click on either image for an even larger picture (opens new window).
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German utility E.ON to split to focus on renewables, grids
BY CHRISTOPH STEITZ, REUTERS
FRANKFURT Mon Dec 1, 2014 11:00am EST
The headquarters of German utility giant E.ON
CREDIT: REUTERS/INA FASSBENDER
(Reuters) - Germany's top utility E.ON (EONGn.DE) said it would split in two, spinning off power plants to focus on renewable energy and power grids, in a dramatic response to industry changes that could trigger similar moves at European peers.
Europe's power sector has been hit by weak energy demand in a sluggish economy, low wholesale power prices and a surge in demand for cleaner renewable energy which is replacing gas and coal-fired power plants.
The move is the boldest by a German company since Chancellor Angela Merkel's 'Energiewende' in 2011, a policy that encouraged cleaner energy and a move away from fossil and nuclear fuels, disrupting business models for utilities.
E.ON, whose market value plunged by near three quarters since 2008, said it would focus on renewables, distribution networks and tailor-made energy efficiency services to embrace changes in energy markets, technology and customer demand.
"We have seen the emergence of a new energy world," Chief Executive Johannes Teyssen said on Monday.
"E.ON's existing broad business model can no longer properly address these new challenges."
E.ON said existing provisions for the dismantling and disposal of nuclear and conventional assets would be fully covered in the new company's balance sheet, adding that unit would have a positive net financial position and an investment grade rating.
All outstanding bonds as well as all debt are to remain with E.ON, which said it was working hard to avoid its credit rating from getting downgraded by more than one notch as a result.
Standard & Poor's is putting E.ON's long-term credit rating at "A-". Moody's sees it at "A3".
E.ON's shares jumped 6.3 percent then settled back a little to be up 4.4 percent by 1542 GMT, the biggest gainer among European utilities .SX6P.
"From an investor perspective, the spin-off would be desirable as it would give E.ON two clear-cut business models that are easier to assess than the conglomerate," said Thomas Deser, senior fund manager at Union Investment, E.ON's seventh-largest shareholder.
E.ON said it would prepare next year for the listing of the new company created by its breakup, with the spin-off taking place in the second half of 2016.
JP Morgan is acting as the sole advisor in the group's spin-off, a source with knowledge of the matter told Reuters.
E.ON said about 40,000 of its employees would remain with the parent group, while the remaining 20,000 would join the new company.
"We see this as an extremely brave but progressive move by E.ON," RBC Capital Markets analyst John Musk wrote in a note to clients, keeping an "outperform" rating on the stock.
"The question now becomes if other integrated utilities will follow suit."
E.ON's new focus on its regulated grids and its renewables business - which is quasi-regulated, as it depends largely on state subsidies - has the potential to boost its valuation.
In the Stoxx European Utilities index, .SX6P regulated grid operators like Spain's Red Electrica (REE.MC), Britain's National Grid (NG.L), and Italy's power grid Terna (TRN.MI) and gas grid operator Snam (SRG.MI) are among the most highly valued stocks, with price/book ratios ranging between 4.5 and 2.4.
Utilities with large thermal power generation assets such as E.ON, France's GDF Suez (GSZ.PA), Italy's Enel (ENEI.MI) and Spain's Iberdrola (IBE.MC) are at the bottom of the valuation ranking, with price/books around or below 1.
In a study last month, Credit Suisse analysts said GDF Suez - whose business is similar to E.ON - suffered a "conglomerate discount" of 5 to 40 percent and suggested GDF could restructure and list its French networks separately.
E.ON's main German peer RWE (RWEG.DE) on Monday said it had no intention of following E.ON's example.
SPIN OFF, WRITE DOWN
E.ON said it would transfer a majority of the new company's capital stock to its shareholders, avoiding the sale of new shares on the open market as is the case during an initial public offering (IPO).
Instead, investors in E.ON will receive shares in the new company in addition to holding shares in the parent company, much in the same way that Bayer (BAYGn.DE) shareholders received shares in speciality chemicals unit Lanxess (LXSG.DE).
E.ON, which has 31 billion euros ($38.7 billion) in net debt, said it would dispose of its minority stake in the new company over the medium term to bolster its finances.
Spinning off power generation will rid E.ON of a sector that has been hard hit by Germany's decision to encourage renewables such as wind and solar power with tariffs that discourage the use of gas, coal and nuclear power plants.
E.ON also said it would post a substantial net loss for 2014 due to additional charges of about 4.5 billion euros in the fourth quarter, citing its assets in southern Europe as well as loss-making power plants.
The supervisory board had approved a proposal to pay a dividend of 0.50 euro per share for 2014 and 2015, down from 0.60 euro paid for 2013, E.ON said.
It also said it had agreed to sell its businesses in Spain and Portugal to Australian energy infrastructure investor Macquarie (MQG.AX) for 2.5 billion euros, adding that it was considering selling its business in Italy and would conduct a strategic review of its North Sea business.
(Additional reporting by Geert de Clercq in Paris, Emma Thomasson in Berlin and Daniela Pegna and Vera Eckert in Frankfurt; Editing by Anna Willard and Sophie Walker)
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Assuring Real Progress on Climate
23 December 2014
In the “Lima Accord”, adopted a week ago in reasonably congenial negotiations in Peru, nearly 200 nations agreed to reduce their fossil fuel emissions from burning of coal, oil and gas. Nations are to define their specific plans prior to a final agreement in Paris in December 2015. No country will be legally bound to a specific reduction, but the hope is that peer pressure will result in both ambitious targets for the general good as well as good faith efforts at compliance. So, are we on the verge of real progress in the fight to stabilize climate and help assure a good future for young people, future generations, and other life on the planet?
Nothing in the Accord assures that. If Paris produces only another attempt to “cap” emissions nation by nation, as suggested above, that will be a huge loss of valuable time. We should not despair though. Key players in the discussions know that a rising carbon fee or tax is essential, if global fossil fuel emissions are to decline rapidly. What is unclear is how much leadership and courage exist, so two vastly different outcomes are possible for the Paris Protocol...