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Cash for (Coal) Clunkers

Preparing a recent talk for the New England section of IEEE's Power and Energy Society ("How Can We Best Achieve Deep Cuts in Carbon Emissions?"), a lightbulb lit up over my head: Instead of encouraging energy companies to switch from coal to low-carbon or zero-carbon energy sources such as nuclear fission, natural gas, or wind by imposing a carbon trading system or a carbon tax, why not just pay them to switch? The dirtiest U.S. coal plants, besides being responsible for about two fifths of U.S. greenhouse gas emissions, are also blamed for about 10,000 premature fatalities each year. Admittedly, the thought of bribing parties to stop causing early deaths may stick in the craw a bit. But if that's the most effective way of getting the job done, hey, why not?

There's a very deeply ingrained notion that the United States just can't afford to shut down half its coal plants because the country's coal is so plentiful and cheap. But that's wrong. The comparison I've often made is to the feelings one has about a very good, very cheap, and very reliable car that also happens to be very old—one of the classic great cars, like the 1951 Plymouth or the Dodge Dart of the 1960s and the Oldsmobile Omega of the Seventies and Eighties. Consumers hung on to those cars because they were so inexpensive to maintain and operate. But was a 1951 Plymouth, with no seatbelts, catalytic converter or electronic diagnostics, still a great car in 1981? Obviously not. And nor are the country’s dirtiest coal plants, which are churning out electricity using technology that's not too different from what it was generations ago, good plants today.

You think you can't afford to replace that dirty and unsafe old car; but actually you can easily afford to. You just need a little nudge.

So that's why, contemplating the difficulties the United States has had agreeing on a carbon trading system or carbon tax, it occurred to me that it might just be easier to pay utilities to pour concrete into their aging coal plants the same way we just paid consumers to disable their car clunkers. After all, the cash for clunkers program gave the economy a distinct little boost, and quite a few families ended up with better cars that were smaller, more fuel-efficient, and less polluting.

Of course there was always the sour puss who called cash for clunkers a clunker of a concept, ourselves included. Maybe you're in trouble when you have to call upon Jeffrey Sachs, the Columbia Earth Institute's controversial leader, when you need to be brought back down to earth. Writing in the current issue of Scientific American, Sachs argues that the car program was a clunker of a climate policy: He reckons the cost of each metric ton of carbon saved at about $140--seven or eight times the level at which carbon has been trading.

That's a compelling argument. But remember: Cutting carbon was not the only reason or even the main reason for cashing in car clunkers; and nor would cutting carbon be the only compelling reason to cash in coal clunkers. 

 

Angry Mermaid

Taking their cue from the famous mermaid in Copenhagen's harbor, and anticipating the global climate meeting that will convene in Copenhagen in December, a handful of European environmentalist and corporate watchdog groups have established a mock award to "recognize the perverse role of corporate lobbyists, and highlight those business groups and companies that have made the greatest effort to sabotage the climate talks and other climate measures."

The prize brings to mind a recent blog post in which I complained about the excessive role that corporate lobbying has come to play in U.S. climate policy. As the post was widely misconstrued as an attack on nuclear energy or natural gas, which I favor, let me take this occasion to clarify my position: My gripe is exclusively with legislative strategy that tries to make good things happen by giving incentives to particular industrial sectors; my view, widely shared by economists and conservative political writers like David Brooks of the New York Times, is that policy should confine itself to penalizing carbon-intense energy sources. (To the extent that I part ways with people like Brooks it's over the degree of penalizing; my personal view is that the carbon penalty should be draconian.)

In singling out ads placed by the natural gas industry for attention, I may have been slightly unfair to the natural gas industry. After all, the industry has valid points to make about the role gas can play as a bridge from fossil fuels to greener energy. For example, as Robert F. Kennedy also has noted, a lot of gas-fired generation currently lies idle most of the time and could, with appropriate rule changes, replace coal generation without new plants having to be built. In the final analysis, however, the natural gas industry is indeed hoping that it will benefit from special incentives in the upcoming U.S. climate bill and it has been lobbying Congress to that end.

This is how Rod Lowman, president and CEO of the American Natural Gas Association, put it in an interview when asked about gas language in the Kerry-Boxer climate bill:  "It is definitely a beginning point. In our discussions with staff and senators, everyone agrees that this is a natural gas title with language there as a placeholder to start discussions about taking advantage of lower-carbon natural gas to generate power. The placeholder outlines the direction to take in helping to incentivize the use of natural gas to generate power, and it talks about appropriations of funds to make that happen."

To echo language favored presidents from Nixon to Obama, let me be clear: As long as nuclear energy, solar energy and wind are benefitting from special incentives in climate and energy legislation, there's indeed nothing wrong with the natural gas industry's getting such incentives too; what I object to is anybody's getting incentives.

 

 

 

Very Bad News on Climate Front

Not long ago it was our distinct pleasure to transmit a piece of rare good news from the climate front, the discovery by British researchers that microorganisms living in Antarctic waters are taking up a small but significant amount of atmospheric carbon. Now comes the bad news, and unfortunately it's a lot worse--evidence that our oceans' ability to absorb carbon may be dropping sharply.

It's been long known from direct measurements that the seven seas are sopping up a large fraction of the carbon dioxide that humans are pumping into the atmosphere. Scientists have worried that the fraction might drop as atmospheric levels rise and the oceans become saturated. Now comes a report, published this week in Nature and reproduced on the Lamont Doherty Earth Observatory's website, saying that even though the oceans are continuing to absorb ever larger quantities of carbon dioxide, the fraction of human emissions they've taken up may have dropped by as much as 10 percent since 2000.

 

"The study reconstructs the accumulation of industrial carbon in the oceans year by year, from 1765 to 2008," explains the Earth Institute’s Kevin Krajick, in a lucid press release. "[Lamont Doherty's Samar] Khatiwala and his colleagues found that uptake rose sharply in the 1950s, as the oceans tried to keep pace with the growth of carbon dioxide emissions worldwide. Emissions continued to grow, and by 2000, reached such a pitch that the oceans have since absorbed a declining overall percentage, even though they absorb more each year in absolute tonnage. Today, the oceans hold about 150 billion tons of industrial carbon, the researchers estimate--a third more than in the mid-1990s."

Khatiwala and his co-researchers developed techniques to infer quantities of industrial carbon in the oceans, working backwards from contemporary levels, and sought to identify the locations of its uptake and its sub-sea transport. They estimate that about 40 percent of the carbon dioxide absorbed by the oceans is taken up in frigid waters near Antarctica, to be carried northwards by ocean currents.

At the uppermost part of the globe, ironically, waters are under-calcified because of freshwater from melting ice streaming into them. A report in this week's Science (appearing tomorrow, Nov. 20) finds that in 2008, in the words of its abstract, “surface waters were undersaturated with respect to aragonite, a relatively soluble form of calcium carbonate found in plankton and invertebrates.” This effect was expected but is showing up about a decade earlier than predicted. It endangers marine organisms that depend on water saturated with calcium carbonate to build their shells and skeletons.

 

 

South Korea Emerges as Global Player in Nuclear

It's been obvious for a long time that South Korea is the Sweden of Northeast Asia--a modest-size country that is so high-tech-savvy and business-smart that it consistently punches way above its weight. But it still comes as a surprise that a Korean nuclear construction group is entering the ring to slug it out with France's Areva and a GE-Hitachi team for a reactor construction contract in the United Arab Emirates, as the Wall Street Journal reports. The group, led by Korea Electric Power Co., includes Samsung and Hyundai, as well as Japan's Toshiba-Westinghouse. With six reactors under construction, Korea plans to build a dozen more by 2030.

China to Build Wind Turbine Plant in United States

China's A-Power Energy Generation Systems, together with its North American partner the U.S. Renenewable Energy Group, have reportedly announced their intention to build a wind turbine factory in the United States. This is the second such announcement from a Chinese green tech company this week. Earlier, China's Suntech disclosed that it will be the first Chinese solar manufacturer to build a PV factory in the States.

A-Power Energy and U.S. Renewable came under attack a couple of weeks ago when Charles Schumer, the very powerful Democratic Senator from New York, criticized their plan to draw on U.S. stimulus money to build a $1.5 billion wind farm in Texas.

 

 

Green Electrons

The New York Times's Kate Galbraith has a nice article this week, "Shorted," in which she talks about how electricity consumers can find themselves paying more to get green energy only to find that their monthly checks to the utility are financing ads trying to persuade even more customers to send checks to pay for ads to persuade  even more customers to send checks to finance ads to . . . Galbraith cites a report finding that overall in the United States, about a fifth of the money consumers put into green energy programs goes for advertiising and marketing. Some specific cases are much worse than average, of course. A Florida utility saw regulators disallow its program because it was so late delivering promised electrons from renewable sources.

Austin Energy, reports Galbraith, sells the most green power of any utility in the country.  Yet earlier this year the Texas utility was able to sell only 1 percent of a wind-power package it offered customers—an offer that would have cost the average taker an extra $58 per month!

That may be warning sign not just for green electron programs but for wind power too. Early indications are that the average global cost of new wind installations rose rather than fell last year, which could merely indicate excessively fast development, but also suggests that the best wind sites have been cherry-picked and that it will be harder now to deliver wind ever more cheaply. 

China's Suntech to Build Its First U.S. Plant

It's another first for China's top solar company. Last year Suntech moved into the Number Two position among global photovoltaics manufacturers, and according to the analysts at iSupply, it's expected to take the Number One spot this year. That puts it ahead of its closest competitors, Japan's Sharp and Germany's Q Cells. In late August, Suntech announced that it had achieved a record-high conversion efficiencies in multicrystalline silicon PV of 15.6 percent, surpassing the 15.5 percent record set 15 years earlier by Sandia National Labs. Now Suntech has announced it will build a module manufacturing plant in Arizona, the first such factory to be erected by a Chinese company in the United States.

Relying on imported PV material from China, by being located near its markets the plant will economize on module shipping costs while--at the same time--helping the Chinese fend off concerns about export of U.S. jobs to their country.

U.S. Lighting Competition Status

So far there's still just one contestant for the U.S. Energy Department’s L Prize, as DOE announced on Sept. 24: Philips Lighting. The award, authorized by Congress in 2007, seeks to stimulate rapid replacement of two very widely used and very energy-inefficient lamps, the 60-watt incandescent bulb, and the Par 38 halogen. DOE says that if the four-hundred-million-plus 60-W bulbs currently used in the United States were replaced by LED lighting, enough electricity would be saved to illuminate more than seventeen million households, with five million fewer tons of carbon emitted annually.

Philips reportedly has delivered 2000 prototype bulbs to DOE for testing, claiming they meet all contest requirements: the same amount and colors of a 60-W bulb but for 10 watts, a 25,000-hour lifetime, etc. However, Congress has been dragging its feet on actually appropriating the money needed to reward the winner or winners, and no additional contestants have entered or even expressed firm interest in competing.

In a way it may not matter. A company like Philips doesn't really need the $10 million that would go for the 60-W-incandescent replacement or the $5 million for a successor to the PAR 38. And even if there never is another competitor, the award is made to the first company over the line, so Philips can still win fair and squarely. What really matters, points out DOE's Christina Kielich in an e-mail, is that 27 U.S. companies have partnered with the L Prize program to drive the winning product or products out into the marketplace.

“For example," she says, "PG&E and Southern California Edison might elect to do a bill stuffer, rebate, or other incentive to get the product into the hands of millions of electricity customers. The partners are ramping up plans for field testing next spring, so a number of them will have hands-on experience too."

Latest IEA Energy Report

The latest annual report from the International Energy Agency is well worth consulting directly: Though it's received wide coverage in the general press, that coverage tends to be slanted and unbalanced by comparison with the IEA's own executive summery or even just the excellent press release the agency issued with the report.

The IEA sees itself frankly as setting the stage for the Copenhagen climate conference next month, and contrasts what it calls a reference scenario--what's generally called business as usual--with a 450 scenario. In the reference scenario, temperatures could rise by as much as 6 degrees celsius by comparison with pre-industrial times, whereas the scenario in which carbon concentrations in the atmosphere are limited to 450 ppm would keep the cumulative rise to about 2 degrees.

In the reference scenario, global energy demand increases 40 percent in the two decades to 2030 and fossil fuels continue to dominate supply, with 90 percent of the increase in world demand occurring in the fast-industrializing less-developed countries. In the 450 scenario, fossil fuel demand peaks in 2020, and carbon emissions in 2030 are slightly lower than they were in 2007. Improved energy efficiency would account for more than half the carbon abatement in the 450 scenario, but greater reliance on zero-carbon electricity generation also would play a big role: renewables would account for 37 percent of electric power production in 2030, nuclear reactors 18 percent, and clean coal--coal with carbon capture and storage—5 percent.

The IEA estimates that these adjustments would cost the world $10.5 trillion over two decades, but these expenditures would be largely offset by savings in variety of benefits, including public health. "The challenge for climate negotiators [at Copenhagen] is to agree on instruments that will give the right incentives to ensure that the necessary investments are made and on mechanisms to finance those investments,” said IEA Executive Director NobuoTanaka.

 

Alternative Energy Plan for China

An international task force is presenting today, Nov. 12, a proposed low-carbon five-year plan to the China Council for International Cooperation on Environment and Development in Beijing. Sir Gordon Conway, co-chairman of the task force, describes some its findings in today's Financial Times. He notes that the Chinese leadership is acutely concerned about the climate problem because of the country's vulnerability to adverse warming effects, its fear of being locked into outdated technologies that will be a liability in a lower-carbon world, and indeed a desire to be global leaders in developing green technology.

The  CCICED task force outlines three carbon-emissions scenarios, and the pessimistic ones are more than a little disconcerting. The business-as-usual scenario has China emitting 13 billion tons of carbon per year in 2050, which is almost twice as much as the whole world is emitting right now. A lower-carbon scenario reduces the country's emissions to 9 billion tons by 2050, which is still almost 30 percent higher than the world's today. A third "enhanced low-carbon scenario" gets China's annual emissions down to 5 billion t/y by mid-century, 30 percent below the present-day world's.

According to Gordon, "the Chinese believe significant reductions can be achieved by decoupling growth from greenhouse gas emissions, as Sweden has done."  Their plan, he says, "is to reduce energy consumption per unit of GDP by 75-85 percent by 2050," by means of industrial restructuring and efficiency gains. The energy mix will become steady greener, with 50 percent of power coming from low-carbon sources by 2030 and all new electricity generation being low-carbon by 2050. But even so, if the enhanced low-carbon scenario is to be achieved, "it will require innovation and technology sharing on a global scale."

It may be startling to hear--even hard to believe--that China's leaders are considering policy changes of this magnitude. But a decade ago, when I was privileged to spend ten days in China looking into the dilemmas posed by coal-fired power generation for an IEEE Spectrum special report (November-December 1999), I was startled by the openness with which Beijing officials were willing to address concerns. I would not have been the first to remark on the country anomalies: a communist government getting set to restructure its electricity system and introduce competition, as if Margaret Thatcher herself were in charge; mid-level officials discussing sensitive and embarrassing issues of pollution and public health in a more relaxed manner than a reporter typically finds in Washington, Paris, or London.

This doesn't mean the Chinese will necessarily succeed in meeting carbon goals, of course. But it would be a mistake to assume they are insincere in setting such goals, or that they are just humoring other countries' negotiators.

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