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2010 Renewable Energy Recap: Big Potential, Slow Progress

This year started with good news on the renewable energy front, with reports on impressive 2009 growth in wind power installations. 2010, though, wasn't quite as great a year in terms of the number of turbines and solar panels installed in the US and around the world. Instead, it was the year of potential: report after report showing just how much power the world really could get if all our renewable energy dreams are realized.

In May, we learned that the western portion of the US could be 35% renewable-powered if all the potential is realized, even without extensive (and expensive) transmission projects. And later, the National Renewable Energy Laboratory told us that the total offshore wind potential in the US is staggering -- greater than all the current electricity-generation capacity.

And speaking of staggering, other countries have amazing potential as well. One report demonstrated how Australia could be completely powered by renewables -- yes, 100 percent -- by 2020.

The potential isn't limited to wind and solar, either. In spite of West Virginia's coal-based economy, the state sits atop an enormous geothermal resource with potential to generate close to 19,000 megawatts. And moving even further from the traditional renewable sources, Spain even has the potential to get seven percent of its power from waste.

All this potential is encouraging, but at least in the United States the progress toward realizing it is still slow. The country lacks a renewable energy portfolio standard (though more than half the states have their own), and there are few indications that any major sea change in renewables construction is on the horizon. Still, there are good signs. Just in the past few weeks, major purchases of wind turbines have been reported for Iowa wind projects as well as in various spots around Europe. Solar power in the southwest is also looking up, with approvals for several projects coming toward the end of this year (though there is also some objection, which could slow progress).

It remains to be seen if 2011 will feature significant progress toward renewable energy goals, or just another year's worth of reporting on its potential.

(Photo via spg solar)

US Takes Trade Action Against China on Wind

Five years ago, on July 4, 2005, the Chinese government issued a regulation requiring 70 percent of the ingredients in newly built wind turbines to be home-manufactured. That, together with production subsidies, cheap credit, preferential orders from state-controlled entities, and a variety of advantages, rapidly engendered an industry that now controls almost half the $45 billion wold market for new wind installations. In the United States, though Chinese manufacturers have built only three turbines so far, companies like Goldwind USA are gearing up for an aggressive drive. Reacting to the circumstances, a U.S. labor and environmental coalition led by the United Steelworkers has been calling for trade action against China.

Yesterday, responding to that call, the Obama administration filed a trade complaint against China in the World Trade Organization, arguing that measures like the 70 percent local content rule flagrantly violate WTO rules. On the face of it, considering that just about every major country subsidizes wind and promotes home manufacturers, prospects for the Obama complaint may be dubious. Trade conflicts are notoriously complicated and drawn-out, and they often get settled long after the horse is out of the barn. In the case of wind--not to mention solar, nuclear, and high-speed trains, among other critical technologies--the big corporate players have been reluctant to join legal actions against China for fear of jeopardizing their long-term positions in the country.

Take the Spanish company Gamesa, the world's third largest wind manufacturer after G.E. and Vestas. As described in a recent New York Times feature, five years ago Gamesa supplied a third of the Chinese wind market, a fraction that has now dropped to 3 percent, the Spanish company having trained locals to go into competition with it. "Nearly all the component that Gamese assembles into million-dollar turbines here," said the Times, are made by local suppliers. . . . And these same suppliers undermine Gamesa by selling parts to its Chinese competitors." Yet Gamesa expresses no official regret, saying that if they had not trained the Chinese, some other company would have.

It's that kind of rationalization that time and again produces unfortunate or even tragic results.

Will Lower Solar Costs Revive Moore's Law Talk?

A recent report by researchers at Lawrence Berkeley Laboratory reports a rather sharp drop in photovoltaic installation costs in the first half of 2010, which may revive talk about a kind of Moore's law at work in solar energy. The report, however, does not find a steady decrease in costs, as the alleged law has predicted, and the reasons for the recent decline appear to have more to do with business cycles than with technological progress.

The authors found that in 2008 and 2009 costs held steady at about $7.50 per installed watt. Based on a study of the largest PV system incentive programs in the United States, they determined that installation costs dropped $1.20/W from 2009 to the first six months of this year. Surveying 78,000 grid-connected PV systems built between 1998 and 2009, they found an average annual reduction of $0.30 in real dollars, or 3.2 percent per year--good, but not earth-shattering.

Referring to the sharper decreases this year, one of the report's authors said that during the four previous years, costs stayed rather flat because a fast-growing global market put upward pressure on both module and non-module prices. "This dynamic has now shifted, as expanded manufacturing capacity in the solar industry, in combination with the global financial crisis, led to a decline in wholesale module prices." Though the lower installation costs are primarily associated with lower module prices, non-module costs--labor, marketing, overhead, inverters, and balance of system--also are important.

Curiously, the authors do not highlight the role of China, despite its conspicuously growing role as a low-labor-cost supplier of PV materials and modules in national and regional markets where solar is heavily subsidized. A year ago, Applied Materials--the leading supplier of PV panel manufacturing equipment--announced it was setting up its main solar R&D lab in China, reflecting that role.

Has the U.S. Passed Peak Gas (Demand)?

An interesting Associated Press article that's making the rounds asserts that the United States has actually passed the point of peak demand for gasoline, and instead of a continued rise in the coming years we will actually see a decline from 2006 onward. The data seem solid on that assertion, but the implications may be more complicated than at first glance. According to the article:

"Americans are burning an average of 8.2 million barrels — 344 million gallons — of gasoline per day in 2010, a figure that excludes the ethanol blended into gasoline. That's 8 percent less than at the 2006 peak, according to government data."

Also, Americans will burn 20 percent less gasoline in 2030 than they do today. However, as the AP article does note, this is far from a done deal. There have been declines in demand before, and there's no reason that shifts in the economy or marketplace in the future couldn't shift the demand trajectory as well. The Washington Post has a timeline of gas use and demand since the first gas station was built in 1905, and it highlights just how volatile -- over the long term, at least -- gas demand can be.

Also, there are caveats: as mentioned above, the 8.2 million barrels burned each day in 2010 does not include ethanol blended into the gasoline. If we're talking only about gas, fine, but if the point is to examine the impact of this declining demand then that note becomes important. The bulk of environmentalists, and some of the government at this point, believe that corn ethanol carries its own set of environmental risks and may not even have much of a greenhouse gas emission benefit over gasoline. With ethanol mandated to make up about a quarter of all gas bought at the pump in 2022, are we really sure that the resulting decline in oil-based gas demand is such a great thing?

Even aside from the ethanol questions, a decline in gas demand doesn't necessarily translate directly into greenhouse gas emissions savings. Improved fuel economy -- one of the factors involved in the anticipated demand decline -- can certainly lower emissions, but among the reasons for that improved fuel economy is the use of plug-in hybrid and electric vehicles. What electricity source is powering those vehicles? If it's coal, then we'll have traded one dirty energy source for another, limiting the greenhouse gas savings.

Declining gasoline demand is clearly better than increasing demand, but such issues are rarely completely straightforward when it comes to the impacts.

(Image via Daryl Mitchell/Wikimedia Commons)

Canada's Controversial Oilsands Get Top-Level Review

The Royal Society of Canada has issued a major report on the environmental and health impacts of oil sands development in northern Alberta, a subject that has huge economic implications for the province and country and big implications for North American fossil fuel supplies. The report will not be the last word on this immensely important subject.

The report, commissioned in October 2009, was prepared by a panel of well-qualified experts in environmental health, toxicology, land reclamation and ecological restoration, hydrogeology, integrative biology, economics, and engineering. It primarily addresses concerns articulated by environmentalists, representatives of indigenous peoples (the groups Canada calls its First Nations), and other local citizens. What it does not do is make a comprehensive cost-benefit analysis of whether, on balance, oil sands development is worth the prices paid in environmental degradation, scenic squalor, and human discomfort.

The Canadian oil sands are located in a relatively remote area that is sparsely inhabited and yet, to judge from photos, splendid in its vast isolation. It includes one major protected zone, the Buffalo National Park. So worries about oil sand development are not limited to just how it might affect this or that, here or there, but how it will transform the character of a whole region.

Thus, however authoritatively the report addresses the specifics, it remains open to the charge that it almost literally sees only the trees, but not the forests.

Among major findings of the report, Environmental and Health Impacts of Canada's Oil Sands Industry:

--no evidence of contaminant exposures at levels that could affect downstream populations adversely

--need for more frequent biological monitoring and more accessible research results

--enhanced regulatory capacities, with emphasis on acquisition of needed technical personnel

--more adequate provision of financial security, to cover projected costs of environmental reclamation and restoration

Given the critical edge of those recommendations, no reasonable person would accuse the Royal Society of whitewashing oil sands development. But the report nowhere adds up the total benefits expected to accrue from development and nowhere weighs such benefits against aggregate costs--including the costs that may in some sense be greater than the sum. And at times the report comes across as a little tin-eared, as in the first point above, where it says there's no evidence of contamination at levels that could hurt people. What is does not say is whether there's evidence of people being actually hurt.

Not surprisingly, First Nation representatives have reacted to the Royal Society report with skepticism, if not outright disdain.

At times the report expresses itself in a style bordering on the ludicrous: "Is the oil sands industry collectively Canada's largest emitter for air pollutants other than greenhouse gases?" "Is the oil sands industry the most environmentally destructive project on earth?" Such questions bring to mind, embarrassingly, the amusing Geico ads running these days on U.S. television--"Can Geico give you more for less money? Did the three little pigs squeal all the way home?"--except that in the Royal Society report the rote answer is no rather than yes.

No, oil sand development is not the most environmentally destructive project on earth. No, it is not Canada's largest emitter of air pollutants.

Given that style, it's not always easy to stay focused on Royal Society's technical specifics. But it's often worth the try. Take greenhouse gases. The report says that oil sands currently account for only about 5 percent of Canada's total emissions, compared to 17 percent from electricity generation and 27 percent from transportation. But sands also are the fastest growing share and therefore "create a major challenge for Canada to meet our international commitments for overall GHG reduction."

What are those international commitments? This too is a subject that requires a little extra concentration to correctly fathom. As the report notes, in the first Kyoto commitment period, 1990 to present, Canada's GHG emissions increased 24 percent, rather than decrease 7 or 8 percent, as the protocol required. As Canada, unlike the United States, is party to the protocol, it is in gross violation of it. Not surprisingly, then, it attempted earlier this month at Cancun--together with two other countries-- to have the Kyoto process canceled. But it failed after the Japanese leadership defected from the anti-Kyoto cause, having received personal phone calls from the leaders of the UK, Germany, and Mexico. .Accordingly, Canada ended up signing agreements in Cancun that in theory require it to do by 2020 even more than Kyoto asks, rather than much less.

To come anywhere close to conform to that obligation would be a Herculean task for Canada, and in fact, it might be flatly incompatible with oil sands development.

Solar Energy Zones: DOI, DOE, Announce Renewables Plan

A joint effort between the Department of the Interior and the Department of Energy has yielded a plan involving "solar energy zones," or massive tracts of public lands in the western United States deemed appropriate for industry-scale solar power development.

The eloquently named Draft Solar Programmatic Environmental Impact Statement outlines some of the best areas for solar power in six western states. It excludes a number of types of area: "those prohibited by law, regulation, Presidential proclamation, or executive order; lands with slopes of 5 percent or greater and/or sunlight levels below 6.5 kilowatt-hours per square meter per day; and areas with known resources, resource uses, or special designations identified in local land use plans that are incompatible with solar energy development."

That may seem like a lot of exclusions, but the Bureau of Land Management (part of the DOI) manages 120 million acres in the six western states alone. Even with all the exclusions, about 22 million acres are left over that could be suitable for development, and 677,400 acres have been included in the solar energy zones; the zones are in California, Colorado, Nevada, New Mexico, Utah and Arizona.

The government's aim to fast-track renewable energy development also means that the permitting processes for big solar projects are moving relatively quickly. Eight industrial-scale solar plants have been approved recently, which will eventually produce 3,572 megawatts of electricity. If all of the additional 104 applications currently on file with the BLM are built, that would mean another 60,000 megawatts.

These are lofty goals, no doubt, given that the total installed solar capacity in the US only climbed past 2,000 MW in 2009. However, it has become increasingly clear that solar installations have only begun to scratch the surface of both the US and worldwide potential. As discussed here earlier, some see the potential to jump as high as 980 gigawatts of solar power around the globe by 2020, so the joint DOI/DOE effort to get that started is certainly a good step.

(Image via DOE/DOI)

Unconventional Gas Revolution Goes Global

The revolution in unconventional gas, which began in Texas, Lousiana and other western states and now is transforming the energy picture in northeastern ones as well, is not just a North American phenomenon. Argentina's main energy company, YPP, announced a shalegas find that will guarantee the country adequate supplies for many decades to come; the company, controlled by Spain's Repsol, is teaming up with Brazil's Vale mining group in a $140 million deal to develop the Pataonian reserves, using advanced hydraulic fracturing techniques. Meanwhile, Norway's Statoil reportedly is "closing in on a deal" to undertake shalegas exploration in China, because of its extensive Marcellus shale experience and despite Nobel Prize tensions; Statoil already has agreements with Sinopec to evaluate shalegas prospects in the South China Sea and with Sinochem to do work in Brazil and elsewhere. It recently bought a big stake in Texas's Eagle Ford formation, and it's looking at opportunities in South Africa.

As the unconventional gas boom continues in the United States with no end in sight, many of the relatively small independent companies that have dominated exploration and development so far are selling non-essential assets to raise capital for further exploration--or they are letting themselves be acquired by the majors. Most recently, Chevron paid $3.2 billion for Atlas Energy, which owns Marcellus acreage in West Virginia, Ohio, Pennsylvania and New York. Earlier in the year, Atlas launched a $1.7 billion joint venture with India's Reliance Industries, for Marcellus work. Such lists go on and on . . .

The reasons include not just gas's relative abundance and cheapness, its cleanness, and its low carbon content compared with coal, but also its flexibility, as a recent Worldwatch report observes. Whereas baseload coal and nuclear plants are designed to run all the time and come generally only in large sizes, gas-fired plants "come in a variety of scales" and can be ramped up or down quickly. That makes them a nice fit with intermittent energy from wind and solar generators.

Assessing Cancun

The Copenhagen conference that ended this last weekend exceeded expectations and was a definite success, especially  by comparison with last year's Copenhagen Accord. That agreement really only papered over profound and sharp differences, which threatened to wreck the conference and derail the process of international diplomacy being carried out pursuant to the Rio Framework Convention on Climate Change of 1992 and the 1997 Kyoto Protocol.

The Cancun agreements were adopted almost unanimously, with just Bolivia rejecting them. Besides containing some important specifics, they may also provide a vehicle for further undertakings that do not depend on treaty making and treaty ratification. Though such agreements do not have the full gravity of treaties, they are generally considered binding on the states that sign them.*

The two important umbrella agreements adopted at Cancun concern long term cooperation and Kyoto followup. The Kyoto document addresses issues raised by the ending in 2012 of the first "commitment period" in which advanced industrial countries were to make scheduled cuts in greenhouse gas emissions, and the impending second commitment period, which is to run from 2012 to 2020. It is a compact two-page document that declares global warming to be an urgent problem, as described in the 2007  IPCC assessment report, and "urges" the industrial countries to make more aggressive efforts to curtail it than they have made so far. It calls on the world's climate diplomats to see to it in the coming year and at the next climate conference, to be held in Durban, South Africa, that there is no gap between the first and second commitment periods.

In signing onto that statement, the United States seems to be conceding implicitly that it needs to do more than it has promised to do so far to reduce its carbon emissions. Notably, the Japanese government, which came to Cancun wanting to ditch the Kyoto process, was dissuaded from that position by phone calls from the leaders of the UK, Germany, and Mexico. (The Mexican foreign minister, Patricia Espinosa, is credited especially with having worked skillfully to make Cancun a relative success.) The Kyoto Protocol to the Rio treaty took force in 2005, and 191 of the 194 parties to the treaty have ratified the protocol; the United States is one of three that have not.

The second Cancun statement, on long-term cooperation, calls on the developing countries to report regularly and verifiably their emissions, as sought by the United States, starting at Copenhagen. The document outlines and specifies how an institution will be established to channel climate aid from the rich countries to the poor--the Green Climate Fund--and, just as importantly for the Third World, specifies how countries can be rewarded for deforestation efforts.

The document on long-term cooperation puts the emphasis equally on greenhouse gas reduction and adaptation to climate change, an important provision for island countries and deltaic regions that are acutely and imminently threatened by global warming. But at the same time it "agrees" that parties should cooperate in achieving the peaking of global and national greenhouse gas emissions "as soon as possible," bearing in mind that "the time frame for peaking will be longer in developing countries." This provision implicitly points a finger at China, which refused to make a peaking commitment at Copenhagen. Like the United States, in signing onto the document, China implicitly concedes that it soon will be expected to do more than it has been willing to do in the past.


* According to the constitutional authority Louis Henkin (Foreign Affairs and the Constitution, Norton, 1972, pp. 184-7), the United States had entered at the time of that writing into thousands or even tens of thousands of executive agreements with foreign countries. While some held that such agreements could not be truly executed without action of Congress, there is no clear consensus on this point. In an important test case, which involved recognition of the Soviet Union by the Roosevelt Administration and the associated Litvinov Agreement, New York State challenged a provision enabling the Federal government to take control of assets held in New York banks to which the USSR laid claim; the Supreme Court held that with respect to "international negotiations and compacts . . . state lines disappear. . . . As to such purposes, the State of New York does not exist." Henkin attributes such reasoning mainly to the primacy the constitution affords the president in the conduct of international relations: If the president agrees to something in that realm, prima facie, it holds.

Save the Birds: Altamont Pass Wind Turbines to be Upgraded

The Altamont Pass wind farm has long been cited by conservationists as a primary reason why wind turbines can sometimes do more harm than good. The 5400-turbine site is so crowded with relatively small windmills that it kills thousands of birds every year, including about 70 federally protected golden eagles as well as other raptors. After decades of operation, though, the Altamont wind farm is finally getting a facelift.

NextEra Energy agreed to upgrade many of the 2,400 turbines it owns at Altamont; it will replace small turbines with fewer larger ones, resulting in a similar power generation capacity of about 240 megawatts. Having fewer turbines spaced slightly farther apart will theoretically reduce the risks for birds who fly through the migration corridor.

The agreement, which could see 80 megawatts of turbines upgraded by the end of 2011 if permitting happens fast enough, stems from a lawsuit filed by the Audubon Society aimed at protecting the birds of the Altamont area. “This agreement addresses the problem arising throughout the state: balancing the need for renewable energy generation with subsequent impacts to wildlife,” said Bob Power, Executive Director of the Santa Clara Valley Audubon Society, in a press release [pdf].

It will be interesting to see results from subsequent monitoring of wildlife impacts at Altamont. It does seem likely that fewer, bigger turbines will reduce bird fatalities, but what about bats? Bats most likely die around wind turbines not because of impacts but because of barotrauma: sudden drops in air pressure that exist immediately around the spinning turbine blades basically cause the bats' lungs to explode. Will bigger turbines create bigger pressure drops, and thus more bat fatalities?

It is difficult to predict, but at least one study [pdf] showed that higher turbines do increase bat fatalities. Still, it is undoubtedly progress to try and maintain the energy output of Altamont while minimizing an ongoing point of contention in renewable energy circles by reducing bird fatalities.

(Image via Xah Lee/Wikimedia Commons)

Russian Uranium Company Makes Major North American Acquisition

ARMZ, the uranium mining arm of Russia's state-owned atomic energy monopoly, Rosatom, is taking a 51 percent interest in Canada's Uranium One. The acquisition will make ARMZ the world's fourth largest uranium mining company, according to a report in the Financial Times,  and is part of the company's program of aggressive international expansion. It already has deals or is in serious discussion of deals with France, India, and South Korea, and hopes to be the world's second largest producer within a decade, trailing only Kazakhstan.

Evidently the deal is structured financially in a way that will enable the paired companies to boost production not only in North America and Russia but also Kazakhstan, Australia, and possibly South Africa. Mainly because of new nuclear plants coming online in East Asia, world uranium prices have climbed  about 50 percent this year, from $40 to $60 per pound, and ARMZ is guessing they might stabilize in the long run in the range of $70-80 per pound.

Acknowledging concerns about Russia's trustworthiness as a business partner and its growing role in the U.S. nuclear fuels market, ARMZ director general Vadim Zhivov conceded that the company has a "long hard road" to show Canadian investors that "a Russian state-owned company can . . . play by the rules of the modern developed world." ARMZ's proposed acquisition of Uranium One won the approval of the U.S. Committee on Foreign Investment in the United States last October, and last week the company's management was honored with an excellence award by Platts, the McGraw Hill energy speciailists.


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