Energy Economics & Policy – Page 7

The Clean Coal Paradox

My informed knee-jerk on the U.S. Department of Energy’s decision to bag FutureGen — the poster child for its clean coal program — endures with followup reporting. That’s what I’m asserting today on TechReview.com in “The Future of Clean Coal” with its deck: “The DOE’s decision to abandon FutureGen could accelerate clean-coal technology.” The bottom line is that over 50 commercial projects using coal gasification put the lie to DOE and the coal industry’s earlier suggestion, through FutureGen, that carbon capture represents next-generation technology.

That said, FutureGen would not be without value. It sought to improve the integration of coal gasification and carbon capture and thus reduce the “energy penalty” associated with carbon capture.

Today’s coal gasification power plants–so-called IGCC plants–cut the energy penalty relative to conventional coal plants roughly in half, cutting the cost of carbon capture from about $40/metric ton to about $20/m.t. (See Table 3.5 in MIT’s 2007 Future of Coal report for representative stats.) FutureGen’s goal was to test novel equipment such as hydrogen-burning turbines to deliver as much as possible on DOE’s clean coal target: $10/m.t.

Reducing the cost of carbon capture would speed up adoption of the technology. However, as Carbon-Nation has argued before, it isn’t a precondition for cleaning up coal. Carbon capture from coal already pays its way regardless. Carbon reductions are trading at close to $30/m.t. under Europe’s carbon cap and trade program (50% higher than the cost of carbon capture from today’s IGCC technology). And the estimated cost of electricity from IGCC with carbon capture–about 6.5 cents/kilowatt-hour according to the MIT report–is well below the average price for electricity in the U.S.

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February 7, 2008February 22, 2008 by pfairley

IPCC Affirms the Economists: Action Needn’t Terminate Growth

We’ve all read plenty about the IPCC this year as the U.N.-organized scientific body rolled out the tomes that constitute its fourth assessment of climate change research. This weekend the IPCC delivered its summation, and the results are both disturbing and heartening.

Disturbing because it reaffirms that the climate is changing and we are the unwitting drivers. Heartening because its synthesis affirms economic research showing that action against climate change is affordable. The IPCC estimates that aggressive action to stabilize atmospheric concentrations of greenhouse gases would, at worst, slim annual global GDP growth by 0.12%.

For a sharp précis of the report, Carbon-Nation recommends you to Joseph Romm on Climate Progress: “Absolute must-read report: IPCC says debate over, further delay fatal, action not costly”

November 18, 2007December 6, 2008 by pfairley

Who Killed the EV Part II: Can California’s ZEV rules deliver an energy revolution?

The award-winning 2006 documentary Who Killed the Electric Car? chronicles the controversial history of California’s Zero Emissions Vehicle mandate. As the movie tells it, the rules prompted major automakers to produce pathbreaking EVs until 2003, when the automakers got the upper hand and crushed both the EVs and the ZEV mandate itself.

In fact, as I show in the November issue of IEEE Spectrum, the program is back and entrepreneurs, car companies and interest groups are scrambling to exploit its incentives to favor their respective automotive visions (see “California to Rule On Fate of EVs”). Far from a failure, the ZEV program’s prodding exposed automakers to the potential of electric propulsion — insights that Toyota applied in its market-leading Prius hybrid — and it may well accelerate the arrival of further innovations.

The ZEV program shows that mandating innovation is a messy process full of unintended consequences. But it may be just what we need to drive adoption of the technologies currently available to slow the growth of greenhouse gases. In his provocatively titled book Sustainable Fossil Fuels Canadian energy economist Mark Jaccard identifies the ZEV program as the forerunner of the renewable portfolio standards adopted by the EU and many U.S. states that are helping to drive installation of wind turbines, large-scale experimentation with new forms of solar power, small-scale hydropower and other renewable sources of electricity. (This summer Congress rejected a proposal to require 10% renewable energy across the U.S. by 2020.)

Jaccard believes that “niche market regulations” such as the ZEV mandate and renewable portfolio standards will be key policy tools to force real change, second only to a cap-and-trade program regulating CO2 emissions (Jaccard would prefer energy taxes to both, but believes they are not politically feasible). In other words, targeted programs like the ZEV mandate that force major industries to try new approaches may be just the thing to deliver meaningful change in the way we use energy.

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October 31, 2007November 2, 2007 by pfairley

Buckle Down: Climate solutions won’t come at the push of a button

The message of the day seems to be Get real: Reversing, stopping or even just slowing climate change is going to take a little more effort than some newcomers to the problem hoped.

Kicking it off was the report one week ago that atmospheric concentrations of CO2 grew 35% faster than expected since 2000. Climate trackers at the University of East Anglia estimate that Earth’s plants and oceans scrubbed 18% less CO2 from the air, largely due to stronger winds in Antarctica’s Southern Ocean that bring deep CO2 up and thus prevent more CO2 from being absorbed. Greater than expected CO2 releases from the boom in coal-fired power generation and a dearth of technological advances contributed the balance of the CO2 speed-up.

I’m throwing a little more warm water on our melting optimism today with a story on the newly relaunched web portal MSN Green. “Does Daylight Saving Time Really Save Money?” is really an accounting of the energy savings Congress promised when it extended DST by three weeks in March and one week in the fall (this week in fact). When Congress passed the Energy Policy Act of 2005, it predicted that springing forward earlier and falling back later would trim the use of lighting, saving the equivalent of 100,000 barrels of oil per day. Extending DST probably did just the opposite, boosting energy use by giving us all more time to consume.

The shortfall is grave given that extended DST was one of the only energy efficiency measures in the 2005 law, which focused mostly on boosting fossil fuel production and nuclear power. Remember Vice President Dick Cheney’s famous comment dissing energy efficiency as a “lifestyle choice”? Well, Congress went along for the ride.

The take home message is not that a smarter, climate-friendly energy system is impossible. Rather, we need to get beyond hopeful quick fixes such as DST and begin implement the real solutions that those East Anglia researchers found to be under-exploited — from true energy efficiency measures such as hybrid vehicles to renewable energy sources such as wind and solar power and even smarter use of fossil fuels whereby CO2 is captured and stored away underground. Let’s get real.

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October 30, 2007July 3, 2019 by pfairley

BC Premier Shows the Political Climate Can Also Change

British Columbia’s generally conservative Liberal Party premier, Gordon Campbell, earned my respect this winter when he banned new coal-fired power plants from releasing CO2 — in effect mandating the use of carbon sequestration (or, as my coverage at TechReview.com indicated, driving planned coal plants to instead burn renewable wood). Now Campbell has gone much further — at least on paper.

Campbell announced this past weekend that his government will propose legislation this fall to mandate a 33% cut in greenhouse gases from current levels by 2020; a still to be announced Climate Action Team representing environmental organizations, business, science and First Nations is to set binding midterm targets for 2012 and 2016 by July 31, 2008.

Here are a few of the measures BC intends to launch over the coming year to get there:

Setting hard caps on greenhouse gases to be used in an emissions cap and trade system under development by five Western U.S. states and BC.

Requiring all provincial entities, including the power utility BC Hydro, to be carbon neutral by 2010. Government agencies must purchase carbon offsets at $25 per ton of CO2 released or otherwise find a way to make their travel carbon neutral starting this year. The offsets cash will fund projects in B.C. that enhance energy efficiency, generate renewable energy or reforestation.

Building all new government buildings to green-building certification equivalent to at least Gold level LEED certification.

Phasing in California’s strict tailpipe emission standards (still stymied by auto industry litigants in the U.S.) by 2016 and adopting California’s low carbon fuel standards.

Spending more on public transit.

“I could barely believe my ears,” is what one climate activist here in Victoria told me. Journalists like me will be busy tracking to see if Campbell and crew actually deliver on all this. But I’d say hope springs a bit more eternally this week thanks to his detailed promises.

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October 3, 2007October 22, 2007 by pfairley

Rethinking Energy Deregulation’s Green Dividends

The European Commission proposed new rules today to break up Europe’s energy monopolies and I must say it makes me wonder whether they aren’t trying to fix something that isn’t broken–at least as far as the environment is concerned.

Commission President José Manuel Barroso told reporters today that: “We need a common European response to combat climate change, to achieve greater energy security and provide abundant energy at a fair price for citizens. This is only possible if we have a competitive gas and electricity market.” But that assumed connection between responding to climate change and competition is worth questioning.

Certainly, the EC’s proposal to take control of power transmission grids out of the big utilties’ hands seems a good bet, giving innovative new players such as wind farm developers a better chance of gaining access to the grid. In fact, the European Wind Energy Association says the EC should go farther and force utilities to sell their interest in power transmission. “Allowing power generation companies to own the transmission grid makes as much sense as allowing an airline company to own the sky,” comments EWEA CEO Christian Kjaer in a press statement issued today.

However, one of my conclusions from reporting on China and the U.S. is that the increasing drive towards deregulation–in particular the conversion of utilities from state-owned entities into profit-focused firms–can make it more difficult to drive change in energy technology. As I reported in Part II of my feature for Technology Review, China’s Coal Future, China’s move to a more open economy hampered efforts to deploy that countries first gasification coal-fired power plant.

In 1993, China’s leading power engineering firm, China Power Engineering Consulting in Beijing, began designing the country’s first gasification power plant for the monopoly utility of the era, the State Power Corporation. This demonstration plant was to be the beginning of a transition to cleaner coal technology. Instead, the plant went on a roller-coaster ride to nowhere. The project was delayed by cost concerns in the mid-1990s and then revived in the late 1990s, only to be cut adrift after 2002 by the breakup of the State Power Corporation.

Anyone who’s breathed the air in China recently knows that was an immense lost opportunity.

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September 19, 2007September 19, 2007 by pfairley

Cleaner Coal is Cheap, But So Are Renewables

When the U.S. Energy Department under an adminstration like Bush/Cheney tells you cleaning up our energy system is cheap, you know the walls are coming down. This summer Carbon-Nation made the case that Cleaning Up Coal is Cheap thanks to affordable technology for capturing and sequestering carbon dioxide. Now the Energy Department’s Energy Information Administration (EIA) is projecting that the cleanest energy option available — renewable energy such as biofuels and wind power — should also fit nicely in our budgets. Ironically the EIA analysis responds to a request by Republican environment critic James Inhofe, a Senator from Oklahoma.

EIA’s analysis examines how mandating 25% renewable power and fuels by 2025 would change U.S. energy consumption and economic growth (see Energy and Economic Impacts of Implementing Both a 25-Percent Renewable Portfolio Standard and a 25-Percent Renewable Fuel Standard by 2025). They conclude that such a mandate would significantly cut U.S. greenhouse gas emissions: In 2030 carbon dioxide emissions would be 14% lower than 2005 levels, with emissions from electricity production specifically dropping 22%. drop in emissions from the electricity sector and a 14-percent decrease in the transportation sector.

Yet the cost is negligible: a projected GDP hit of one-eighth of one percent and a rise in expense to consumers of one-tenth of a percent. Plus EIA’s analysis assumes that the mandate would spur fairly modest improvements in energy technology, a highly conservative assumption that one can hope Will prove false.

Cause for even greater optimism: the U.S. Senate’s version of the energy bill currently being negotiated in Congress establishes a 25% renewables mandate by 2025 as a national energy goal. Renewable energy is not perfect — as our recent discussion of Wind Energy’s Problem Child in the Bay Area shows — but it sure beats the status quo.

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September 18, 2007September 18, 2007 by pfairley

Peter Fairley

Category: Energy Economics & Policy

The Clean Coal Paradox

IPCC Affirms the Economists: Action Needn’t Terminate Growth

Who Killed the EV Part II: Can California’s ZEV rules deliver an energy revolution?

Buckle Down: Climate solutions won’t come at the push of a button

BC Premier Shows the Political Climate Can Also Change

Rethinking Energy Deregulation’s Green Dividends

Cleaner Coal is Cheap, But So Are Renewables