Climate News Live
August 2008 Archives
http://ap.google.com/article/ALeqM5gV7z6TGMMJP4J2L4KWix9DADnEiAD92Q55801
It might sound like a lesson plan for an Intro to Macroeconomics course; the conclusion that subsidies can cause fiscal havoc in the markets. But in addition, popular energy subsidies are a growing threat to preventing global warming. According to a new U.N. report, governments around the world are ignoring basic economic theories and environmental hazards that result from the presence of these subsidies. The report, just released by the United Nations Environmental Programme (UNEP), details the impacts that have occurred due to the establishment of numerous energy subsidies by countries including Russia, Iran, China, Saudi Arabia, and India. By serving as an incentive for the continued use of fuel by consumers and the current methods of producers, the subsidies are discouraging energy conservation and efficiency. They also hamper the implementation of renewable energy development by protecting the status quo.
"In the final analysis, many fossil fuel subsidies are introduced for political reasons but are simply propping up and perpetuating inefficiencies in the global economy," said UNEP director Achim Steiner, who also is a U.N. undersecretary general.
In a statement released with the report, Steiner advised governments to "urgently review their energy subsidies and begin phasing out the harmful ones."
Several countries have felt the consequences of cutting subsidies. Last year, riots erupted In Myanmar when cash-strapped authorities raised fuel prices as much as 500 percent. In the last few months, India, China, and Indonesia have all trimmed their fuel subsidies, unable to keep pace with the rapid rise in oil prices.
The U.N. report said money could be redirected into programs that support low income families more directly and should be targeted to promote green energy, such as wind or solar.
Cutting off the subsidies would be good for the environment as it would reduce carbon emissions by as much as 6 percent, said Zahedi.
Free market advocates and environmentalists agree that these subsidies for modern energy use are hurtful, based on the detrimental effect the subsidies have on economic equilibrium and environmental preservation that both groups desire most. But since there are numerous types of subsidies and different approaches to providing energy, it is hard to determine what should be done. Creating new subsidies that are directed at renewable energy practices is a promising solution, although economists will stress the importance to preserving quality market conditions as well.
The Associated Press; August 27, 2008
Submitted by K. Rutherford
A recent newspaper article [Arizona Republic 06/30/08 - Cost Impediments Remain to AZ's use of solar power] summarized a lot of questions people are asking about the solar power industry in addressing the affinity people are developing for renewable energy technologies in this era of climate change, but decrying the costs of installation. The article was focused on the state of Arizona which would seem to be a very favorable climate and terrain for solar power, and questioned why there weren't more solar power installations. The reason for the lack of installations was given simply as cost: solar power plants are expensive propositions in a state where electricity is fairly inexpensive right now. In contrast, California with its relatively high electricity costs, was pointed to as a place where solar is doing better and solar photovoltaic (PV) technology was particularly singled out for its potential. But given the high energy costs currently plaguing consumers and the attention energy policy is receiving from Congress and the Presidential candidates, the time for renewable energy to finally reach its potential seems to be now. The issue is how this can be accomplished?
B&D Consulting put these and other questions to Mr. Jigar Shah, Chief Strategy Officer and founder of the SunEdison Corporation. SunEdison builds commercial to utility-scale PV installations, and has taken a different approach to providing solar-based electricity to its customers by owning, operating and maintaining the solar installations it builds on its customer's premises, and selling the electricity generated back to the customer who contracted for the plant.
How would you respond to those that say High Costs are the major obstacle to the more widespread deployment of solar power?
Most central station energy projects have a five to ten year "build-out", which represents the total time from planning to commissioning of the plant. When you consider the costs of a five to ten year duration for a build-out, solar PV costs the same or less than other peaking sources. The main obstacle to solar PV is the reluctance of some utility companies to empower their customers to take advantage of on-site instead of central-station power.
What's the payback period for a "typical" solar PV installation?
A more relevant question solar may be: "what is the risk adjusted cost of solar vs. grid power?" Over the 40-year life expectancy of a solar PV system, solar is projected to be between 5-25% cheaper than the grid alternative for peak power. Recent price hikes have pushed the predicted savings in future years to the higher end of the range.
What's on the horizon for future solar photovoltaic technology that will make it more efficient, or help with the intermittency issue?
The cost of solar PV has consistently declined 5% per year over time. Some short-term material shortages have increased price, but cost has continued to come down. Some of those reductions come from thinner silicon wafers, high efficiency, thin-film technologies, and other innovations. While we are seeing PV technology cost continuing its 5% annual cost reduction, we do not see dramatic improvements accelerating that trend.
Regarding the intermittency issues, these are really only relevant for wind power. Solar is very coincident with air conditioning loads. European utilities that have solar capacity installed love the technology. Combined with basic demand response which utilities are already investing in, distributed solar PV is a firm resource meaning that it can be counted on to reduce demand on utility systems during peak usage times.
Storage technologies are said to be key to solar's future; do you agree? Will new utility-scale storage battery technologies help with non-peak applications?
No, I don't agree. Storage is a technology for the utility to create a more robust grid, and is not tied to or essential for solar reaching a high penetration rate.
Would a discrete ten year program of declining federal government subsidies be enough to finally establish solar PV as a competitor to fossil electric power?
Absolutely. This was true for nuclear in the 60s & 70s ($66B invested), natural gas in the 80s, and wind in the 90s. This is the decade for solar PV where the government can serve the national interest for energy security and cleaner air by investing in the technology as it reaches scale. Once this scale is reached, the government incentives will just have to be normalized to the other energy technologies on a BTU basis. If the government is finally able to reduce coal, nuclear, natural gas, and oil subsidies to zero given their high profit margins, solar can also live without subsidies.
With a number of state governments moving towards renewable portfolio standards or requirements, will this help the industry finally be competitive?
Solar is a distributed generation technology. Forcing utilities to buy renewable energy will still not incentivize nor empower their customers to install renewable energy.
If costs are a major obstacle to solar PV in Arizona, would it work in less sunny states like Massachusetts or Indiana?
If utility companies were to pay the exactly the same peak power premium for distributed solar PV as they are paying for central station solar thermal, solar PV would be more cost effective. The problem is that utility companies are afraid of distributed generation technologies, just like the traditional phone companies were afraid of distributed cell phones.
Given the concerns over Climate Change and the role of developing countries, what would you say are the prospects for solar power internationally?
Solar PV markets have grown over 40% per annum over the past 5 years. On an absolute dollar basis, the industry is bigger than the wind industry in 2007. Prospects are good.
Are the economics of solar PV more amenable to developing country markets and applications (i.e., with higher numbers of sunnier days in developing world markets, is PV more useful than for peaking applications)?
Solar PV is ideal for places all around the world from remote areas in Alaska with limited sun and high diesel fuel prices, to the deserts of Africa where there is ample Sun and little access to other energy sources.
While SunEdison is focused on commercial markets, what would you say to residential customers that would want to take advantage of solar PV technology to lower their energy costs?
For consumers interested in solar, they should advocate for local city officials and utilities to deploy a more cost effective centralized solar solution for their communities as a whole. It’s aggregation benefits the entire community and immediately helps the local environment.
It would seem that the next President and Congress will have the opportunity to help Solar PV and other renewable energy technologies to firmly and finally establish themselves. If a program of tax credits for renewables can be designed over a longer-term but discrete time frame, we may finally see renewables as a significant, self-sustaining contributor to US power needs and a new, greener economy for years to come. The end game is to provide one of many needed bridges away from high-carbon content fuels.
Submitted by R. Campbell; August 27, 2008
http://www.nytimes.com/2008/08/26/nyregion/26wind.html?ref=environment
In the race to become the premier alternative energy source, wind power seems to have a new selling point. While different stakeholders disagree about the best way to approach the problem of energy efficiency, advocates of wind turbines have a new technology to leverage their case. The new strategy to encourage wind power relies on air storage, which allows the energy to be stored for peak use and not necessarily only when there is a lot of wind to generate it. By compressing the air and then keeping it underground, the system prevents the fear of running on empty when the wind ceases to be present.
“This is a game-changing technology,” said Stephen C. Byrd, the president of P.S.E.G. Energy Holdings, which will invest $20 million over three years. “There is a desire for energy independence, and this will reduce the need for oil and natural gas.”
The venture has met with utilities that might buy the storage technology. Compressed air can be produced by a variety of fuels. But the new venture hopes to put wind power generated during off-peak hours to use during peak hours — typically 9 a.m. to 5 p.m. — and especially on hot days.
One of the main challenges to using wind power is that the wind, in general, is unpredictable, which makes it harder for utilities to rely exclusively on it since they prefer to buy energy a day or more in advance.
While the new feature for wind power sounds promising, the debate continues as to whether it is necessary, or if it is the best choice to reduce the dependency on oil. But with Mayor Bloomberg and T. Boone Pickens staking their claims behind the technology, their influence and financial stamina may be enough to blow the competition away.
The New York Times; August 26, 2008
Submitted by K. Rutherford
According to the Science Daily, it appears that soil scientists have managed to kill two birds with one stone - or more optimistically put - solve two problems with one solution. Field research by the scientists has shown that a new method for restoring wetlands can sequester carbon dioxide at a rate of three to eight tons per acre per year. By pumping dirt and sediment from the bottom of shipping channels and spreading the dredged material over the wetlands, new marsh grasses are produced. Since the decomposition of the marshes is a very slow process, the revitalized wetlands capture carbon dioxide and keep it there. With the carbon dioxide trapped in the marshes instead of being released into the atmosphere, the marshes help assist in the prevention of the greenhouse effect, a trend that continues to threaten the Earth's ecosystems. Along with fighting global warming through carbon sequestration, the restoration will also contribute to recovering the benefits of marshes, including habitats for wildlife and shoreline storm protection.
Science Daily; August 25,2008
Submitted by K. Rutherford
http://www.sciencenews.org/view/generic/id/35181/title/Carbon_sequestration_frustration
Sir Isaac Newton postulated that in a perfect world, every action would have an equal and opposite reaction. The same would appear to be true when it comes to some postulated solutions to Climate Change. The machines and processes meant to deal with carbon emissions, or more specifically, sequestering those carbon emissions, can emit gaseous carbon and other airborne pollutants on a scale that may not be negligible in comparison. It all brings to mind the old story about bringing in snakes to kill the rats, then importing the mongoose to kill the snakes, and so on. We must take time to understand and consider the implications of the solutions that we propose for global warming, or the solution may prove to be just as big a problem.
ScienceNews.com; August 13, 2008
Submitted by R. Campbell
While Climate Change mitigation discussions in the US are focused on a "Cap and Trade" mechanism, the Canadian province of British Columbia has moved to implement a carbon tax. By focusing primarily on fossil fuel usage, the province intends to reduce carbon emissions in 2020 to a level some 33 percent below 2007 levels. The plan is intended to be "revenue neutral", but even so, the introduction of the effort in July 2008 has not been without controversy. The Trucking industry in British Columbia have been one of the more outpsoken critics, noting that their drivers are paying out more than they receive back in taxes. Economists generally say that a carbon tax is probably the most efficient way to reduce carbon emissions, but regardless of whether a Cap and Trade market mechanism or an outright tax is chosen, a price on carbon is essential and must be high enough to elicit changes in behavior for any measure to be effective.
Canada.com; August 7, 2008
Submitted by R. Campbell
With party leadership on both sides digging themselves in on energy issues, the only hope for a legislative solution to cope with increasing energy prices may fall with two bi-partisan groups that have formed in both the House and Senate. Each of these groups has developed a "compromise" proposal that attempts to increase production and conservation while boosting funding in renewable and alternative energy sources...
After two months of fever-pitch debate over how to deal with the soaring price of oil, Congress left town yesterday without doing anything on energy. The final day featured a group of raucus Republicans who remained on the House floor after an adjournment vote was passed, the microphones turned off and the lights dimmed, demanding that Democratic leaders return and take action on comprehensive energy legislation.
On the Senate side, a bipartisan group of senators known as the "group of 10" yesterday outlined a possible $84 billion compromise bill including new "targeted" offshore drilling opportunities and a $20 billion program to get 85 percent of new U.S. vehicles off petroleum-based fuels in 20 years. But the group left unresolved some of the toughest issues -- such as how to fully pay for the bill. The group called for a bipartisan summit to be held after the August recess, but by early afternoon different pieces of the plan were being picked apart. Sen. Mel Martinez (R-Fla.) criticized the offshore drilling portion, and the liberal Center for American Progress said the group deserved "an A for effort, but their proposal is unsatisfactory and needs many improvements." Red Cavaney, president of the American Petroleum Institute, said he hoped small bipartisan groups in the House and Senate could spur legislative action in September. "Though there is not a lot of time, maybe we'll see some vote on those bills or some version thereof," he said.
The Washington Post; August 2, 2008
Submitted by J. Andrews
