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Arctic Oil Geopolitics

Shell Oil is expected to get permission from the U.S. government to begin exploratory drilling in the Beaufort Sea north of Alaska next summer. The Shall news is being interpreted as an easing of the Obama administration's policy toward offshore drilling, but it also is a reminder of the big oil and gas stakes increasingly disputed in the Arctic Ocean area.

Russia, which has coasts going about halfway around the ocean, is of course the big gorilla in the room. Three years ago, on August 2, 2007 to be exact, it got the world's attention when one of its submarines planted a Russian flag on the seabed at the North Pole. No doubt the main purpose of the expedition was to assert a point, but it also had a quasi-scientific purpose--to gather evidence to bolster Russia's claim to continental shelf reaching out to the Pole.

According to the U.S. Geological Survey, the Arctic may hold about one fifth of the world's remaining oil and gas reserves. Some Russian planning takes the Arctic to be crucial to the country's economic strategy and prospects, starting as early as 2020. Already, Russia's Gazprom is involved with France's Total and Norway's Statoil in developing the Shtokman field, on Russia's northern coast.

Until recently, areas along that coast were considered barely accessible, but with the summer ice thinning radically, ships are now able to traverse the fabled Northeast Passage, linking the North Atlantic to the northern Pacific. As one recent report noted, “A Norwegian cargo ship has already traversed the Northeast Passage faster than expected and without encountering any major challenges." As the Earth continues to warm, the cost of extracting Arctic oil and gas will fall, even as the need for it mounts. No wonder we're hearing some overheated rhetoric comparing the Arctic race that's shaping up to the "scramble for Africa" and the California gold rush. There's also loose talk of developing a Kennan-style containment doctrine for the Arctic, to push Russia back and give NATO a new mission.

However inflated that kind of language may be, the stakes are not trivial. Norway and Russia are maneuvering for position in the Barents Sea, where Statoil recently made its biggest find in decades, advancing their claims at the United Nations Commission on the Limits of the Continental Shelf. Denmark is engaged in the same kind of struggle with Russia over seabed north of Greenland.

Canada, which is increasingly concerned as much about control of newly opening sea routes as it is over resource claims, is purchasing eight new armed ice-breaking patrol ships, has been conducting Arctic military exercises, and is constructing a base on Ellesmere Island. The European Union is bidding for a seat on the Arctic Council, consisting of Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States. 

Nuclear Implications for China's High Speed Train Wreck

The hand-wringing over China's high-speed train wreck last month may have just begun if the government's current explanation for the crash bears out. At present, official fingers are pointing to a failure in the trains' signaling system. The firm that installed them, it now appears, provides similar equipment for the nuclear reactors that China is building just as fast as it is adding rail lines.

Beijing-based Hollysys Automation Technologies provided the control systems for the two high-speed trains wrecked in the July 23rd accident near the southern city of Wenzhou, according to a report late last month by business news site iChinaStock. In a follow-up report the site says Newport Beach, CA-based investment banking firm Roth Capital had downgraded Hollysys's stock, arguing that "fallout over the tragic incident could have far-reaching policy implications and affect the overall railway industry."

As of last year China had over 6500 kilometers of high-speed rail, more than any other country, and plans were to double that by next year. But Roth Capital argues that the crash and the removal of China's railways minister, accused of corruption this spring, are likely to delay ongoing high speed rail projects and thus hurt Hollysys revenues.

The disquieting link to China's nuclear expansions appears as an aside in iChinaStock's followup report. Hollysys is the "only certified domestic automation control systems provider to the nuclear industry in China," according to iChinaStock. China's nuclear industry shares two dangerous characteristics with its high-speed rail network: explosive expansion and strong whiffs of corruption.

According to a recent statement by China's Ministry of Environmental Protection the country had 13 reactors operating as of June, 28 more under construction, and 100 expected to be generating power by 2020. And, as with the rail network, a leading nuclear official was recently sacked under suspicion of corruption. Kang Rixin, head of the state-owned nuclear plant operator China National Nuclear Corporation, was sentenced to life in prison last November for accepting 6.6 million Yuan (US $1 million) in bribes from an equipment vendor.

The stakes, however, are incomparable. Last month's train crash killed an estimated 40 people and dented China's national pride. An accident in a Chinese reactor could be truly catastrophic. Millions could be injured or killed and, in the process, China could lose a key alternative to heavy dependence on coal.

Let's hope that China's leaders recognize the threats and insist on a more transparent approach to nuclear safety than has been exhibited with the rail crash. Official reports first blamed lightning; the burial of a twisted train car during the rescue operations was widely interpreted as a clumsy attempt to hide evidence; and state censors ordered Chinese publications to toe the rail ministry's lines.

In a hopeful sign for safety, many news outlets refused.

Solar After Dark: BrightSource Adding Molten Salt Storage for Power Plants

BrightSource Energy announced yesterday the launch of SolarPLUS, a combination of its solar tower technology and a way to store the power it generates using molten salts. Storage of solar energy has long been a sticking point, given that a solar plant can't generate power when the sun isn't shining.

Molten salt storage has been proven in other countries in recent years, as described by our own Peter Fairley in a story on the Andasol 1 plant in Spain. Like the Spanish facility, BrightSource will use a combination of sodium nitrate and potassium nitrate in its system. Basically, the salts are heated during the day when the sun is shining using a heat exchanger, and the process is reversed at night when power is needed but no sun is available.

BrightSource's solar technology involves the solar tower concept, in which a huge array of thousands of mirrors -- known as heliostats, because they track the sun across the sky -- concentrates the sun's rays on to a centralized tower. Inside the tower, steam is generated from the heat, and the steam is used to run a turbine just as in a standard power plant. The molten salt storage will allow the turbines to turn after dark. Though possible to keep them turning all night, the company says a two- to six-hour window is optimal. BrightSource is currently building the Ivanpah Solar plant in the Mojave Desert, a 392-megawatt project that has generated controversy for its use of public lands and the potential environmental harm involved.

(Image via BrightSource Energy)

Solar Slump

One of the confusing problems with the so-called Moore’s photovoltaics law, which predicts a steady decline in PV production costs, is that costs are easily confused with prices. From the point of view of solar energy's long-term commercial viability, lower prices and costs are both a good thing, of course. But from the producer's point of view,  low costs are not a good thing if they only reflect weak markets.

That unfortunately is the situation today. Since the beginning of the year, solar cell prices have dropped about 40 percent, as some government subsidies have been phased out just as production capacity has sharply increased. Prices "are now below the cash cost for many manufacturers," the Financial Times reports today--meaning presumably that prices are below production costs. The situation suggests, the British paper continues, that there will be considerable consolidation in the photovoltaics industry in the coming year.

To be sure, there are still many bright spots in what the FT can't resist calling a "cloudy" outlook with "dark days." A big one is that China has just unveiled a feed-in tariff for solar projects, Taking a cue from similar laws in Germany, Denmark, and Spain, among others, China will guarantee the price of electricity generated by solar cells. For any projects completed before 1 July this year, the price is 1.15 yuan--nearly 18 U.S. cents per kilowatt-hour--and for projects completed thereafter it will be 1 yuan.

That's great news for China's solar manufacturers but not, admittedly, for all others. Chinese producers already dominate the world market, and the feed-in tariff will help them cement their hold. 

Renewable Europe: Wind Power in EU to Triple by 2020

The European Wind Energy Association (EWEA) estimates that the wind energy capacity in the EU will nearly triple by 2020, bringing the total installed capacity up to about 230 gigawatts. At the end of 2010, the EU had about 84 GW installed.

If EWEA's "conservative estimates" prove correct, the EU will get about 16 percent of its total power supply from wind energy by the end of the decade. According to the EWEA press release today:

Electricity production from wind power is expected to increase from 182 Terawatt hours (TWh) or 5.5% of the total EU demand in 2010, to 581 TWh or 15.7% of the total demand in 2020. By 2020 the electricity production from wind energy will be equivalent to the total electricity consumption of all households in France, Germany, Poland, Spain and the United Kingdom together.

The biggest gains in wind power capacity are projected for Finland (9.6-fold increase), Poland (9.5-fold increase), and Bulgaria (8-fold increase), though none of these countries are currently among the leaders in absolute or proportional capacity. Denmark, which already gets about 25 percent of its power from wind, will see only a 1.6-fold increase, but this will bring the total to 38 percent of its power needs. Germany and Spain, which lead the way in absolute capacity, are also projected to less than 2-fold increases, but will arrive in 2020 at 17 percent and 27 percent of their total power supply, respectively.

One of the biggest growth sectors of the European renewables landscape -- and that which clearly sets it off from the United States -- is offshore wind. As of the end of June, the EU has 1,247 offshore wind turbines for an installed capacity of 3,294 MW; 101 offshore turbines were connected to the grid in just the first half of this year. The US, at last count, has zero.

(Image via Vattenfall/Flickr)

FERC Issues Major Rule to Encourage Grid Expansion

Considering its import, the Federal Energy Regulatory Commission’s Order 1000, issued on July 21, has attracted remarkably little notice. Together with its precursor, Order 890, promulgated in 2007, it represents the most important U.S. power grid reform since the system was opened to wholesale competition with Order 888 in 1996. 

FERC’s objective with Order 1000 is to remove bottlenecks that have impeded expansion of the grid, expedite long-term planning, and make the power system more friendly to intermittent renewable sources of energy. The order mandates development of regional transmission plans and introduces the principle that such plans should take consideration of public policy requirements (such as state renewables portfolio standards).

It also sets out principles for allocation of transmission investment costs. As spelled out in the statement by FERC Chairman Jon Wellinghoff, those include: that costs should be commensurate with benefits; that no costs should accrue to those receiving no benefits; and that no costs may be imposed on an adjacent region without that region's consent.

Expanding on the need for the order and the rationale for the new rules, Wellinghoff cited NERC's 2010 Long-Term Reliability Assessment, saying that 60 percent of additions to the power grid to 2019 will be made to accommodate wind and solar generation. "Strengthening and expanding the system for the reliable integration of these resources will require significant investment in transmission," said Wellinghoff, with some understatement.

The type of project that could get a boost from FERC 1000 is the Atlantic Wind Connection, the plan for an sub-sea transmission cable to link up offshore wind turbines with onshore grids in Virginia, Delaware, and New Jersey. As an analysis by the liberal think-tank Center for American Progress notes, "The AWC will be expensive with a cost of more than $5 billion, which is not surprising for a project this ambitious. This project may not make sense if only the traditional economic and reliability benefits are considered because the sum of those benefits may not outweigh the costs."

Though FERC squares nicely with the Obama Administration's emphasis on green energy, in terms of its inspiration and history, it can safely be characterized as nonpartisan. The work that led to it straddled the Clinton and George W. Bush administrations, and members of the current board, including the current chairman, took office under Bush.

Bloomberg Foundation Donates $50 Million to Anti-Coal Campaign

Electrical engineer Michael Bloomberg, who also happens to be mayor of New York City, founder of Bloomberg LLC, and the rich uncle behind the Bloomberg Philanthropies, doesn't play by the usual rules. Not content as mayor to adopt an ambitious greenhouse gas reduction program and to foster green technology, he also has taken charge of the C40 group of mayors dedicated to combating climate change. (In the photos, he's seen unveiling an electric car charging station and the city's latest greenification plan.) Now, through his personal foundation, he's donating $50 million to the Sierra Club's campaign to shut down as many of the nation's aging and dirty coal plants as possible by 2020.

It's a strikingly bold move, considering that Bloomberg is a member of the Republican Party, most of whose other members very probably oppose the Sierra Club's campaign. And that's not to mention the nation's coal-stage Democrats and union leaders, who also don't have much use for it.

The strategic objective of the campaign is to replace the old coal plants with "clean energy," meaning, as the Sierra Club sees it, wind, solar, and conservation. Bloomberg personally is somewhat pro-nuclear and has expressed skepticism about Governor Cuomo's objective of closing the Indian Point nuclear power plant north of the city.  But that's not exactly the Sierra Club's position. It opposes current generation nuclear power and worries, with good reason, about the environmental ramifications of natural gas fracking.

Can a large number of coal plants be closed without greater resort to natural gas and perhaps more nuclear energy as well? Not likely. But it will be an interesting game to watch. 

New Opacity in Global Warming Slowdown

A group led by top atmospheric geochemist Susan Solomon has found that higher aerosol levels during the first decade of this century may account at least in part for why global warming has been slower than climate models predicted on the basis of greenhouse gas buildup. Aerosols, which can be projected into the atmosphere from both natural sources like volcanoes and human sources like coal-fired power plants, shield the Earth from incoming solar radiation. They wash out of the atmosphere quickly, however, compared with most greenhouse gases, and so their effect is relatively short-lived.

An earlier paper by another Solomon group found that lower concentrations of stratospheric water vapor have been another factor in slowing the rate of global warming. That paper, which appeared early last year, indicated that concentrations probably increased between 1980 and 2000, on the other hand, adding to the warming trend.

The Solomon paper, published in this week's Science magazine online, estimates the radiative impact of higher aerosol levels in the last decade at minus 0.1 watt per square meter. That is enough to reduce the amount of expected warming by 25 percent. The findings are based on direct atmospheric measurements, and the paper makes no attempt to determine the natural versus human sources of the recent aerosol buildup. Its main message indeed is that aerosol levels are "persistently variable."

To put the findings in a very long perspective, during the Cretaceous period—120 to 90 million years ago, when Earth turned into a "hothouse," as the current issue of Scientific American puts it—warming took place at an average rate of 0.00025 degrees C per 100 years. During the Paleocene-Eocene Thermal Maximum, about 56 million years ago, the warming rate was 1,000 times as abrupt, at 0.025 per 100 years. The current rate is 1–4 degrees per 100 years, at least 400 times as high as in PETM.

Rooftop Solar Panels Double as Cooling Agents

Energy Secretary Steven Chu has famously touted the energy-saving benefits to painting rooftops white. This works by reflecting the sun's energy away from a building, helping to keep it cool and requiring less energy to do so. It turns out, though, that it isn't just white paint that can cool your roof. Solar panels can do it too.

Research published recently in Solar Energy suggests that daytime ceiling temperatures under rooftop solar photovoltaic systems are lower than under exposed rooftops. In the buildings the researchers studied in San Diego, it was 2.5 degrees K cooler (about 4.5 degrees F). At night, this situation was reversed, with ceiling temperatures under the solar panels registering higher than under exposed rooftop, which the authors said suggests "insulating properties" of PV systems.

Though the study's measurements occurred over a few days in April, modeling suggested that the overall reduction in cooling load would be 38 percent. In the winter, there would be no advantage or disadvantage to the panels in terms of heating load.

This seems to be one of the rare occasions where ancillary effects of a positive technology are also positive. We install solar panels on rooftops to help lessen carbon emissions, and it appears that we actually reduce energy needs at the same time.

And if we start combining some of this knowledge, there is some amazing potential here. The white roof idea that Secretary Chu espouses would, in ideal circumstances, save enough energy to equal taking the world's cars off the roads for 18 years. Then, consider some recent work in New York: about two-thirds of city rooftops could accommodate solar panels, with potential to generate an incredible 5,847 MW of power. If you mix in the cooling potential given New York's well-known heat island effect, and rooftop solar starts to look better and better.

(Image via murphyz)

What's the Score in Utility-Scale Solar?

Among the two or three people who follow this blog closely I'm probably known as a skeptic about utility-scale solar--that is to say, about when "grid parity" will be reached in the United States, Europe, and Asia, and electricity from photovoltaics will be able to compete, without subsidies, with natural gas, nuclear, and wind.

When I visited a small PV generating plant on the Pennsylvania-New Jersey border several years ago, the economics of the project turned out to be so dubious, its designers refused to tell me how much the plant had actually cost to build. Executives at Applied Materials convinced me that making and selling PV manufacturing machinery is a very good business as long as subsidies last, but left me unconvinced it will be a viable business without subsidies any time soon.

That said, it seems only fair to note, 18 months later, that a lot of utility-scale projects are being built in the United States and that a great many more are on the books. According to a list compiled by the Solar Energy Industries Association, PV plants with a combined capacity of close to 200 MW have come into operation since the beginning of 2010, and plants totaling another 356 W are under construction. Some of the utility-scale generating plants such as Florida Power & Light's 25-MW DeSoto Solar Energy Center (above) are quite large indeed. The biggest so far is Pacific Gas and Electric's 55 MW plant in Boulder City, Nevada.

Looking to the future, utility-scale PV projects with a combined capacity of 18 GW are in development, and there are plans for concentrating thermal projects adding up to more than 9 GW. To put that in perspective, even allowing for the fact that solar plants generate electricity only about a third of the time, if all the utility-scale solar were to be built, combined central solar capacity would be equivalent to about 10 nuclear power plants--not trivial.

But it seems to me a fair guess that most of those plants will not actually be built. In many cases environmental considerations--land use, availability of water to clean panels, transmission connections--will doom them. At both the Federal and state levels subsidies may be erratic. By one recent count, 29 states and the District of Columbia have adopted Renewable Portfolio Standards,  20 with special requirements for solar. But in many cases those solar "carve-outs" or "set-asides" include caps on permissible costs, which utilities and their contractors have been unable to meet. PV costs remain very high compared to competitors, and of course the competition--above all natural gas, selling at record-low prices--is a moving target.

The papers are full of stories quoting experts to the effect that PV is on the cusp of a technological breakthrough and near grid parity. I still don't see it.


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