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Energy Efficiency Is Best Policy

OK. it's special pleasing by an organization that has a stake in the outcome. But still, the results of the ACEEE study released yesterday are plausible and important to always bear in mind, as the United States contemplates how to reduce dependence on fossil fuels and cut carbon emissions. Generally the cheapest way to do that, says ACEEE, is to improve the efficiency with which energy is used throughout the economy rather than increase the amount of energy delivered. In the electricity sector, it says, the cost of acquiring an added widget of efficiency has held fairly steady during the last five years  at about 2.5  cents per kilowatt-hour, while costs for new coal- or nuclear-generated electricity have gone up, along with virtually all other generating costs.

Generally, claims ACEEE, new generation will cost three or four times as much as improved  conservation.

If you want to know precisely how ACEEE arrives at those figures don't ask me. Read the report.

Big Solar Project Collides with Conservationism

BrightSourceEnergy Inc is dropping plans to build a 500 MW thermal solar generating plant in the Mojave Desert. The plant, consisting of reflectors and a central tower that would have covered 5,130 acres, was slated for a remote area that President Clinton had promised to protect in perpetuity but which his successor President Bush offered to open to developers. Though Brightsource and its thermal concentrating technology have supporters among environmentalists, California Sen. Dianne Feinstein has been pushing to declare the area affected by the project a national monument.

The area became the property of the Federal government, as it happens, only after the Wildlands Conservancy raised forty million dollars to purchase it and then donated it to the government. Until recently, other solar developers reportedly also were eyeing the property, including Stirling Energy Systems, Solel, Nextlight, and Cogentrix Energy. Brightsource still hopes to build a 400 MW thermal solar plant elsewhere in the Mojave, with Bechtel as prime contractor.

On Sept. 22, barely a week after its shelving the 500-MW Mojave project, BrightSource announced it has reached preliminary agreement with Nevada's Coyote Springs Land Company providing sites for up to 960 MW of solar thermal energy for the California and Nevada markets. The expanded site northeast of Las Vegas will cover 12 square miles and include residential and commercial elements, besides concentrator arrays. It expands on an earlier land agreement between BrightSouce and Coyote allowing for 600 MW of thermal solar generation.

According to BrightSource, the Nevada site and solar projects already have received environmental permits from the federal Bureau of Land Management and the U.S. Fish and Wildlife Service. The 400 MW Ivanpah project in the Mojave is under final review by t he California Energy Commission and the Bureau of Land Management, and construction could begin as early as 2010. 

Those Natural Gas Image Ads

If you're a reader of U.S. newspapers, you may be wondering why you're seeing full-page ads sponsored by the natural gas industry telling you that "the success of wind and solar energy depends on natural gas." (It's because when the sun goes down and the wind stops blowing we need some other relatively low-carbon fuel to generate our electricity.) But you already knew that, right?

When listening to a Yankees game in New York City you'll find the action is often interrupted by plugs for the Indian Point Nuclear Power plant. That makes sense. We all know that reactors can melt down or even blow up, that their waste stays radioactive for hundreds of thousands of years, that terrorists could extract weapons material from waste to make an atomic bomb or just use the waste raw to make a dirty bomb, and that wayward states like Iraq or Iran might build supposedly peaceful reactors for sinister military purposes. So the industry has an obvious stake in reminding us that nuclear energy can still be useful and a net plus under some circumstances.

The same goes for coal. Emissions from its combustion kill an estimated 30,000 people in the United States each year. At both the front end and back end of the fuel cycles coal creates enormous physical quantities of waste, which are often not adequately contained. Strip mining lays waste to West Virginia mountaintops and Montana vistas.  Though there aren't a lot of people engaged in deep sub-surface mining any more, some of them still die every year. And generating electricity with coal accounts for two-fifths of U.S. carbon emissions. So it's scarcely surprising that the coal industry has been saturating the airwaves in recent years with ads telling us that dirty coal is really clean.

But natural gas? Why does the natural gas industry need to remind us that it's relatively clean and low-carbon?

The reason, I gather from scattered news commentaries and a barrage of direct communications from the natural gas industry, is that gas feels it is not getting a fair enough shake in prospective U.S. climate & energy legislation. Why does it feel that way? Don't ask me. I simply can't stand the thought of delving into the details. This is because, to manipulate a phrase of Bismarck’s that was once memorably mangled by former president George W. Bush, I've seen too much of what goes into the sausage of climate policy to voluntarily inspect any more.

That is, I'm fed up with policy that reflects a balance of contending vested interests rather than recognized national imperatives and proved best practices.

Once upon a time, back in the days when many Americans began to wonder what kind of president would succeed the younger Bush, I dreamt we might be blessed with one who had JFK’s knack for getting in front of a microphone and saying to the American public: This is what the situation is, and this is what the situation requires; and so this is what we are going to do, and this is how we're going to do it.

I dreamt the new president might say something like: "The evidence is in, the science is real. [Obama actually did say that shortly after taking office.] To protect the world and get into step with international efforts, we need to cut U.S. carbon emissions 50 percent by 2050. [That actually is the administration's stated policy.] To do that, we need to start cutting emissions sharply right now, so that they'll be 20 percent lower by 2020, in line with what Europe is doing. [Ouch! Is this getting too specific?] Accordingly, we are going to enact a carbon tax that will make the cost of coal-generated electricity about 50 percent more expensive and average retail electricity prices about 25 percent  higher. [What??] Everybody will have an incentive to use energy more sensibly. Generators will switch from high carbon fuels like coal to low carbon fuels like natural gas and zero-carbon electricity sources like nuclear, hydro, solar, and wind. [Well, that could make sense.]

"We will recognize [the new president continues] that some regions and lower-income groups will be adversely affected, and so we shall take measures to protect them. But we will not make any special deals with industry groups or specific companies. The energy business has had a decade and a half to see this coming, and in many cases shareholders have told corporate directors to get ready. So industry groups need not use proceeds from energy sales to buy image ads. They can use that money, instead, to adjust to the new realities of the world."

Of course life is never so simple. Even in country like France, with its Napoleonic tradition of rational, scientific management, when its president introduced a carbon tax recently, instead of its being greeted as a logical conclusion from first principles, it was universally condemned as either too much or too little. Sarkozy, instead of reaping the credit he expected from environmentalists, was chewed to pieces by everybody from left to right.

Still, wouldn't it be nice if, just once and a while, we could make policy strictly on the basis of recognized ends and more efficient and effective means?

Largest Offshore Wind Farm Is Inaugurated

Denmark last week officially opened the world’s largest offshore wind farm, Horns Rev 2, which is in the North Sea just west of the Jutland peninsula. It is a collaboration of Denmark's Dong Energy and Siemens Renewable Energy, which provided the 91 turbines that together have a capacity of 209 MW. Covering 35 square kilometers of ocean water, it is the first offshore wind farm to be permanently staffed, by a 24-person contingent based on a platform.

Horn Revs 2 represents a significant step forward in offshore wind, the Danes having overcome some troubles with Horns Rev 1, as described several years ago in a Spectrum news report. In October 2002 Spectrum provided a vivid account of how the first farm was built, including an exciting climb up one of the turbine towers by the magazine's intrepid reporter.

What are the implications of Denmark's pioneering work in offshore wind? They're far reaching but also controversial. Germany wants to expand reliance on North Sea and Baltic winds in order to avoid having to negotiate an exit from its scheduled nuclear exit; that is, it would prefer not to build any new nuclear power plants and to dismantle those in operation as soon as possible.

But why replace nuclear reactors with wind when one could just as well replace dirty coal?

Texas oilman T. Boone Pickens would like to build out wind in order to replace natural gas in power generation, so as to free up gas for vehicular propulsion; he would tap the north-south "wind spine" running down the U.S. plains states. This blogger, however, would replace coal--not natural gas--with wind, because coal is two or three times as carbon intense as natural gas. To do that, I'd tap into the offshore winds prevailing on the Great Lakes, which also are among the country’s windiest regions.

The advantage of the Great Lakes, which for some reason nobody ever mentions in this context, is that they're smack dab in the heart of the U.S. industrial heartland, right where most of the country's coal is burned at present. Added costs of building wind turbines offshore would be recovered in lower transmission costs.

French Nuclear Model Called Into Question by French Expert

To a great extent U.S. nuclear energy policy in the last two decades has been driven by the premise that standardization of designs and construction procedures will bring down reactor costs. France's almost all-nuclear electricity sector, built basically by a single national company, is the model. But yesterday a French nuclear energy expert called that model into question. Speaking to reporters in an event sponsored by the Physicians for Social Responsibility, Yves Marignac pointed out that the country’s recent experiences with nuclear construction have not been exemplary. In a sense that's stating the obvious. Delays in building a nuclear power plant in Normandy and a similar one Finland, and a 75 percent cost overrun on the Finnish plant, have been widely reported. But Marignac says France's record building its four previous plants was not much better: They were connected to the grid only 12.5-15.5 years after construction began—a far cry from the four or five years in which Areva claims it can build new plants.

Asked what accounts for chronic construction delays, Marignac said it often is a matter of rather rudimentary problems such as failure to pour concrete or do welding to (admittedly exacting) standards. Why is pouring concrete harder for a reactor than, say, for a bank vault? For one thing, he said, because a containment's double walls have to be able to withstand hydrogen pressure and prevent hydrogen leakage in the event of an extreme meltdown accident.

Marignac, executive director of WISE-Paris, an information service, has contributed to blue-ribbon energy reports for the French government and European parliament. His views represent a significant challenge to the U.S. nuclear industry and its promoters because, if valid, they suggest the French model doesn't work well even in a country whose institutions favor it—a country with highly centralized planning, traditions of precise administrative procedure, a single administrative entity, and a single builder and single client,.


China's Grid-limited Wind Energy Potential

China's wind power industry barely noticed the international financing crisis, doubling installations in 2008  for the fifth year in a row. Readers of Spectrum shouldn't be surprised, as we documented the state and market share-driven industry's insensitivity to quaint financial targets such as profitability last May. What may ultimately check China's seemingly unstoppable wind power surge is the capacity of its power grids to absorb the resulting energy.

That conclusion emerges when one examines a report in Science last week by researchers at Harvard's Kennedy School of Government and Beijing's Tsinghua University, which combines meteorological and engineering models to predict that wind farms could meet all new electricity demand in China through 2030 at reasonably low cost. My coverage of the report, published yesterday by MIT's Technology, concludes that China's grid is the key hurdle to realizing this bold prediction, noting hopefully that China is already leading the world in the development of high voltage direct current (HVDC) transmission technology -- the sort needed to share variable renewable energy sources such as wind power on a trans-continental scale, thereby minimizing the power supply's vulnerability to regional weather patterns.

Projected Capacity Factors for China. Credit: Michael McElroyAnalysts, however, doubt that China can build such renewables-ready supergrids fast enough to replace anticipated additions of coal and nuclear power, as projected by the Harvard-Tsinghua report. Caitlin Pollock, who prepares Asia wind market forecasts for Cambridge, MA-based consutancy Emerging Energy Research, says grid challenges make the growth level proposed "unfeasible and unlikely." She notes that grid integration already lags wind-farm installation: "While China’s wind market has indeed doubled for the past two years, approximately 30% of this new capacity remained unconnected to the grid at the end of each year."

Pollock says the Chinese government's ambitious Wind Power Base initiative, which calls for at least 10 GW of new wind capacity in seven provinces/regions through 2015, is actually "an effort to regulate wind growth." The projects involve grid operators at an early stage, thus aligning build-out of the wind farms with coordinated grid expansions.

And she points out that the government still perceives a need to balance new wind development with new baseload plants fed with coal and nuclear, to ensure there's a button to press when power demand is high. For example, western Gansu province's massive Wind Power Base project, whose 20-gigawatt proposed capacity for 2020 would exceed the entire country's current wind power base, is accompanied by an equally monstrous coal-fired power complex. The latter, which commenced construction last month, could be generating up to 13.6 gigawatts by 2020 -- the equivalent of 17 of the world-scale coal-fired power plants under construction in Germany.

The bottom line: Don't count coal out yet. And hope for climate's sake that carbon sequestration pans out.

Gigascale Solar

The Wall Street Journal and The New York Times report this week what could be another first for First Solar: a preliminary agreement with the Chinese government to build a 2-gigawatt photovoltaic farm in Inner Mongolia. If the plant is actually built, it will be in stages over a decade,  to cover eventually as much as 25 square miles. But "much of the deal hasn't been worked out yet," says the Journal with some understatement--minor details such as how  much First Solar might be paid have yet to be settled. The company's plan is to sell the plant to a Chinese operator upon its completion, but the plant's profitability will depend on the size of the subsidies it would be eligible for. That's another detail to be worked out, as China right now is trying to decide whether to adopt a feed-in tariff that would guarantee returns on investments in renewables.

If the plant were built today in the United States, it would cost $5-6 billion, according to First Solar. Costs may be lower in China, however, and they should decrease as the plant is built in increments. First  Solar will likely build a production plant in China to supply panels for the generating plant, which is to be part of much large renewables complex in Ordos City, Inner Mongolia. The whole complex is to have a generating capacity of nearly 12 GW, with 6,950 MW coming from wind, 3,900 from photovoltaics, 720 MW from thermal solar, and 310 MW from biomass. 

Let's not make any assumptions about the destiny of the deal sketched out in this week's memorandum of understanding with First Solar. Note, however, that the Ordos plant is not the only nuclear-scale solar facility on the books. The Clinton Climate Initiative is considering a project in India that could be even bigger, and BrightSourceEnergy has power-purchase agreements with California utilities for solar plants with a combined capacity of 2.6 GW, the Journal reports. First Solar’s Topaz plant in California is to be 550 MW, notes the Times.

Normally our practice would be to contact First Solar to confirm the various details of the Journal and Times accounts. But the company has a long-standing and deeply ingrained policy of not talking directly with the press, as discussed last year in a Spectrum magazine feature.


Boulder SmartGridCity Claims to Be Fully Functional

Xcel Energy issued a press statement this week saying that its pioneering smart grid experiment in Boulder, Colorado, is now complete--that SmartGridCity is the "first fully functioning smart city in the world." What that turns out to mean is that the aspects of the experiment bearing on electric reliability and more effective and economical maintenance are up and running: fully automated substations, the ability to re-route power around overloaded or blocked lines, fast detection of localized outages, and early detection of blackout risks. What it does not mean is that customers can now closely monitor home or business usage, find ways to use electricity more frugally, and seek greener sources of power. That will happen only in the fourth quarter of this year, when "Xcel Energy plans to launch an in-home energy management Web portal provided by GridPoint that will  give all Boulder customers with a smart meter the ability to review their in-home energy usage."

Xcel "will soon be seeking customers for testing of in-home energy management devices," the press release continues. So don't bother staying tuned. Rather, tune back in, say, six months from now.

The Perils of Climate Initiative

France’s Nicolas Sarkozy proposed this week that the country impose a 17 euro/tonne tax on carbon emissions, in order to further its stated objective of cutting the country’s emissions 25 percent by 2050. Considering that France’s carbon emissions are already relatively low because of its strong reliance on nuclear power and low auto usage, you'd think that environmentalists would be hailing his initiative. But to judge from local and international reports, most of the country’s environmental leaders have denounced the proposed tax as too limited and too low--while everybody else considers it an annoying addition to what is already a very heavy tax burden.

The tax would not apply to the electricity sector, because four-fifths of the country’s power is generated by zero-carbon nuclear reactors already. It would mainly affect industrial use and, for consumers, home heating and automotive fuel. Set initially at a level that is roughly equivalent to where carbon is currently selling in the European cap-and-trade system, the tax translates to about five or six cents per liter of gasoline. Sarkozy argues, quite reasonably one would think, that consumers should not expected to pay a higher fee for carbon emissions than big industrial emitters pay.

Why does that argument not satisfy Sarkozy's critics? Probably, it seems, because the initiative is widely considered a political ploy. In the most recent elections, France’s environmentalists have been making gains, while the country’s democratic socialists--despite the recession--have been squeezed. So Sarkozy's move is dismissed as a transparent effort to outflank the socialists and build bridges to environmentalists, who normally tend to be allied with the socialists.

President Obama may be finding cap-and-trade a tough sell in the United States, but at least he can take comfort that he is not accused of being insincere and Machiavellian. If, despite the opposition, Sarkozy gets the French parliament to approve the tax, France will be the first major power to adopt a carbon tax. Finland has had one since 1990 and Sweden since 1991; Switzerland has taxed all imports of fossil fuel since the beginning of last year. One thing that's clear from such experience: very successful economies can put a pretty stiff fee on carbon without suffering unduly. Sweden's carbon tax is more than five times as high as what Sarkozy is proposing--and Sweden, with an electriicity sector that is virtually carbon free, also has relatively low national emisions.

Agreement Imminent on Gigantic Australian Gas Project

Chevron, ExxonMobil, and Royal Dutch Shell will finalize agreement next week on development of an enormous Australian natural gas field, the Wall Street Journal and the Financial Times reported today, The Gorgon field is thought to contain on the order of 40 billion cubic feet of natural gas, the equivalent of 6.7 billion barrels of oil, and will cost in excess of $40 billion to exploit. Together with about a dozen other major gas projects in Australia, Gorgon may soon make the country the world’s leading exporter of LNG—and its exports will help a number of major Asian economies somewhat lesson their dependence on dirty, carbon-intense coal. According to Chevron, leader of the Gorgon project, long-term contracts already have been secured with customers in China, Japan, South Korea, and India, and more such contracts are in the works.


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