1 Megawatt Powers 778 Homes!

A one-megawatt electric plant running continuously at full capacity can power 778 households each year, according to the U.S. Department of Energy. There are 1,000 kilowatts in a megawatt. Solar technology has lower capacity because its power generation is constrained by availability of the sun.

Source: Forbes

Combined Renewable Energy Powerplant

PG&E Gives Away 1 Million CFLs

PG&E Gives Away 1 Million Energy Efficient Light Bulbs
October 3, 2007 -- By Todd Woody, Green Wombat

In the U.S.' biggest compact fluorescent light bulb giveaway, California utility PG&E began handing out 1 million energy-efficient CFLs today. The bulbs use 75 percent less electricity than conventional incandescent lighting and they've become something of an icon in the fight against global warming given that lighting accounts for a big chunk of greenhouse gas emissions. Wal-Mart (WMT) in particular has jumped on the CFL bandwagon, announcing Tuesday it had already exceeded its goal of selling 100 million bulbs by the end of 2007.

The PG&E (PCG) giveaway is part of its efforts to push 20 million CFLs into customers' homes by the end of the year. PG&E spokesperson Keely Wachs told Green Wombat that the utility will spend $1.25 million on the freebies. Or more accurately, PG&E customers will spend that as the giveaway comes under the utility's state-mandated energy efficiency efforts whose costs regulators permit to be recouped through electricity rates. "The benefits of handing these out and the energy efficiency that will be realized far outweigh our costs to customers," Wachs says.

PG&E estimates over the lifetime of the 1 million bulbs - if they're installed in California homes - will save more 400,000 megawatts of electricity and eliminate 200,000 tons of greenhouse gases. Tomorrow PG&E will announce a deal with Safeway (SWY) grocery stores to sell CFLs at a discount.

Avoiding Collapse in Modern Civilization

THE NATURE OF THE NEW WORLD
October 2, 2007 -- By Lester R. Brown, Earth Policy Institute

Plan B 2.0 Book Byte:

We recently entered a new century, but we are also entering a new world, one where the collisions between our demands and the earth’s capacity to satisfy them are becoming daily events. It may be another crop-withering heat wave, another village abandoned because of invading sand dunes, or another aquifer pumped dry. If we do not act quickly to reverse the trends, these seemingly isolated events will occur more and more frequently, accumulating and combining to determine our future.

Resources that accumulated over eons of geological time are being consumed in a single human lifespan. We are crossing natural thresholds that we cannot see and violating deadlines that we do not recognize. These deadlines, determined by nature, are not politically negotiable.

Nature has many thresholds that we discover only when it is too late. In our fast-forward world, we learn that we have crossed them only after the fact, leaving little time to adjust. For example, when we exceed the sustainable catch of a fishery, the stocks begin to shrink. Once this threshold is crossed, we have a limited time in which to back off and lighten the catch. If we fail to meet this deadline, breeding populations shrink to where the fishery is no longer viable, and it collapses.

We know from earlier civilizations that the lead indicators of economic decline were environmental, not economic. The trees went first, then the soil, and finally the civilization itself. To archeologists, the sequence is all too familiar.

Our situation today is far more challenging because in addition to shrinking forests and eroding soils, we must deal with falling water tables, more frequent crop-withering heat waves, collapsing fisheries, expanding deserts, deteriorating rangelands, dying coral reefs, melting glaciers, rising seas, more-powerful storms, disappearing species, and, soon, shrinking oil supplies. Although these ecologically destructive trends have been evident for some time, and some have been reversed at the national level, not one has been reversed at the global level.

The bottom line is that the world is in what ecologists call an “overshoot-and-collapse” mode. Demand has exceeded the sustainable yield of natural systems at the local level countless times in the past. Now, for the first time, it is doing so at the global level. Forests are shrinking for the world as a whole. Fishery collapses are widespread. Grasslands are deteriorating on every continent. Water tables are falling in many countries. Carbon dioxide (CO2) emissions exceed CO2 sequestration.

In 2002, a team of scientists led by Mathis Wackernagel, who now heads the Global Footprint Network, concluded that humanity’s collective demands first surpassed the earth’s regenerative capacity around 1980. Their study, published by the U.S. National Academy of Sciences, estimated that global demands in 1999 exceeded that capacity by 20 percent. The gap, growing by 1 percent or so a year, is now much wider. We are meeting current demands by consuming the earth’s natural assets, setting the stage for decline and collapse.

In a rather ingenious approach to calculating the human physical presence on the planet, Paul MacCready, the founder and Chairman of AeroVironment and designer of the first solar-powered aircraft, has calculated the weight of all vertebrates on the land and in the air. He notes that when agriculture began, humans, their livestock, and pets together accounted for less than 0.1 percent of the total. Today, he estimates, this group accounts for 98 percent of the earth’s total vertebrate biomass, leaving only 2 percent for the wild portion, the latter including all the deer, wildebeests, elephants, great cats, birds, small mammals, and so forth.

Ecologists are intimately familiar with the overshoot-and-collapse phenomenon. One of their favorite examples began in 1944, when the Coast Guard introduced 29 reindeer on remote St. Matthew Island in the Bering Sea to serve as the backup food source for the 19 men operating a station there. After World War II ended a year later, the base was closed and the men left the island. When U.S. Fish and Wildlife Service biologist David Kline visited St. Matthew in 1957, he discovered a thriving population of 1,350 reindeer feeding on the thick mat of lichen that covered the 332-square-kilometer (128-square-mile) island. In the absence of any predators, the population was exploding. By 1963, it had reached 6,000. He returned to St. Matthew in 1966 and discovered an island strewn with reindeer skeletons and not much lichen. Only 42 of the reindeer survived: 41 females and 1 not entirely healthy male. There were no fawns. By 1980 or so, the remaining reindeer had died off.

Like the deer on St. Matthew Island, we too are overconsuming our natural resources. Overshoot leads sometimes to decline and sometimes to a complete collapse. It is not always clear which it will be. In the former, a remnant of the population or economic activity survives in a resource-depleted environment. For example, as the environmental resource base of Easter Island in the South Pacific deteriorated, its population declined from a peak of 20,000 several centuries ago to today’s population of fewer than 4,000. In contrast, the 500-year-old Norse settlement in Greenland collapsed during the 1400s, disappearing entirely in the face of environmental adversity.

Even as the global population is climbing and the economy’s environmental support systems are deteriorating, the world is pumping oil with reckless abandon. Leading geologists now think oil production may soon peak and turn downward. Although no one knows exactly when oil production will peak, supply is already lagging behind demand, driving prices upward.

Faced with a seemingly insatiable demand for automotive fuel, farmers will want to clear more and more of the remaining tropical forests to produce sugarcane, oil palms, and other high-yielding biofuel crops. Already, billions of dollars of private capital are moving into this effort. In effect, the rising price of oil is generating a massive new threat to the earth’s biological diversity.

As the demand for farm commodities climbs, it is shifting the focus of international trade concerns from the traditional goal of assured access to markets to one of assured access to supplies. Countries heavily dependent on imported grain for food are beginning to worry that buyers for fuel distilleries may outbid them for supplies. As oil security deteriorates, so, too, will food security.

As the role of oil recedes, the process of globalization will be reversed in fundamental ways. As the world turned to oil during the last century, the energy economy became increasingly globalized, with the world depending heavily on a handful of countries in the Middle East for energy supplies. Now as the world turns to wind, solar cells, and geothermal energy in this century, we are witnessing the localization of the world energy economy.

The world is facing the emergence of a geopolitics of scarcity, which is already highly visible in the efforts by China, India, and other developing countries to ensure their access to oil supplies. In the future, the issue will be who gets access to not only Middle Eastern oil but also Brazilian ethanol and North American grain. Pressures on land and water resources, already excessive in most of the world, will intensify further as the demand for biofuels climbs. This geopolitics of scarcity is an early manifestation of civilization in an overshoot-and-collapse mode, much like the one that emerged among the Mayan cities competing for food in that civilization’s waning years.

You do not need to be an ecologist to see that if recent environmental trends continue, the global economy eventually will come crashing down. It is not knowledge that we lack. At issue is whether national governments can stabilize population and restructure the economy before time runs out.

In addition, here is a synopsis of Jared Diamond's book entitled Collapse:

Diamond lists eight factors which have historically contributed to the collapse of past societies:

1. Deforestation and habitat destruction
2. Soil problems (erosion, salinization, and soil fertility losses)
3. Water management problems
4. Overhunting
5. Overfishing
6. Effects of introduced species on native species
7. Human population growth
8. Increased per-capita impact of people

Further he says four new factors may contribute to the weakening and collapse of present and future societies:

1. Human-caused climate change
2. Buildup of toxic chemicals in the environment
3. Energy shortages
4. Full human utilization of the Earth’s photosynthetic capacity

Biofuels May Raise GHG Emissions, says Nobel Laureate Paul Crutzen

Biofuels could boost global warming, finds study
September 21, 2007 -- By Zoe Corbyn, Chemistry World

Growing and burning many biofuels may actually raise rather than lower greenhouse gas emissions, a new study led by Nobel prize-winning chemist Paul Crutzen has shown. The findings come in the wake of a recent OECD report, which warned nations not to rush headlong into growing energy crops because they cause food shortages and damage biodiversity.

Crutzen and colleagues have calculated that growing some of the most commonly used biofuel crops releases around twice the amount of the potent greenhouse gas nitrous oxide (N2O) than previously thought - wiping out any benefits from not using fossil fuels and, worse, probably contributing to global warming. The work appears in Atmospheric Chemistry and Physics and is currently subject to open review.

'The significance of it is that the supposed benefits of biofuel are even more disputable than had been thought hitherto,' Keith Smith, a co-author on the paper from the University of Edinburgh, told Chemistry World. 'What we are saying is that [growing many biofuels] is probably of no benefit and in fact is actually making the climate issue worse.'

Crutzen, famous for his work on nitrogen oxides and the ozone layer, declined to comment before the paper is officially published. But the paper suggests that microbes convert much more of the nitrogen in fertiliser to N2O than previously thought - 3 to 5 per cent or twice the widely accepted figure of 2 per cent used by the International Panel on Climate Change (IPCC).

For rapeseed biodiesel, which accounts for about 80 per cent of the biofuel production in Europe, the relative warming due to N2O emissions is estimated at 1 to 1.7 times larger than the quasi-cooling effect due to saved fossil CO2 emissions. For corn bioethanol, dominant in the US, the figure is 0.9 to 1.5. Only cane sugar bioethanol - with a relative warming of 0.5 to 0.9 - looks like a viable alternative to conventional fuels.

Some previous estimates had suggested that biofuels could cut greenhouse gas emissions by up to 40 per cent.

Global picture

The IPCC's N2O conversion factor is derived using data from plant experiments. But Crutzen takes a different approach, using atmospheric measurements and ice core data to calculate the total amount of N2O in the atmosphere. He then subtracts the level of N2O in pre-industrial times - before fertilizers were available - to take account of N2O from natural processes such as leguminous plants growing in forests, lightning, and burn offs.

Assuming the rest of the N2O is attributable to newly-fixed nitrogen from fertilizer use, and knowing the amount of fertilizer applied globally, he can calculate thecontribution of fertilizers to N2O levels.

The results may well trigger a rethink by the IPCC, says Smith. 'Should we go along the road of adding up the experimental evidence for each of the processes or are we better off using the global numbers?'

Critical reception

But other experts are critical of Crutzen's approach. Simon Donner, a nitrogen researcher based at Princeton University, US, says the method is elegant but there is little evidence to show the N2O yield from fertilized plants is really as high as 3-5 per cent. Crutzen's basic assumption, that pre-industrial N2O emissions are the same as natural N2O emissions, is 'probably wrong', says Donner.

One reason he gives is that farmers plant crops in places that have nitrogen rich soils anyway. 'It is possible we are indirectly increasing the "natural" source of N2O by drawing down the soil nitrogen in the world's agricultural regions,' he explains.

Others dispute the values chosen by Crutzen to calculate his budget. Stefan Rauh, an agricultural scientist at the Instituteof Agricultural Economics and Farm Management in Munich, Germany, says some of the rates for converting crops into biofuel should be higher. 'If you use the other factors you get a little net climate cooling,' he said.

Meanwhile, a report prepared by the OECD for a recent Round Table on Sustainable Development questions the benefits of first generation biofuels and concludes that governments should scrap mandatory targets.

Richard Doornbosch, the report's author, says both the report and Crutzen's work highlights the importance of establishing correct full life-cycle assessments for biofuels. 'Without them, government policies can't distinguish between one biofuel and another - risking making problems worse,' said Doornbosch.

Carbon Tax, CAFE Standards and Cap-and-Trade: An Economist's View

One Answer to Global Warming: A New Tax
September 16, 2007 -- By N. Gregory Mankiw, The New York Times

In the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.

The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.”

Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes.

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal.

Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don’t expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.)

More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make — how far from work they choose to live and how often they carpool or use public transportation.

A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

Another popular proposal to limit carbon emissions is a cap-and-trade system, under which carbon emissions are limited and allowances are bought and sold in the marketplace. The effect of such a system depends on how the carbon allowances are allocated. If the government auctions them off, then the price of a carbon allowance is effectively a carbon tax.

But the history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers.

The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade. Any long-term approach to global climate change will have to deal with the emerging economies of China and India. By some reports, China is now the world’s leading emitter of carbon, in large part simply because it has so many people. The failure of the Kyoto treaty to include these emerging economies is one reason that, in 1997, the United States Senate passed a resolution rejecting the Kyoto approach by a vote of 95 to zero.

Agreement on a truly global cap-and-trade system, however, is hard to imagine. China is unlikely to be persuaded to accept fewer carbon allowances per person than the United States. Using a historical baseline to allocate allowances, as is often proposed, would reward the United States for having been a leading cause of the problem.

But allocating carbon allowances based on population alone would create a system in which the United States, with its higher standard of living, would buy allowances from China. American voters are not going to embrace a system of higher energy prices, coupled with a large transfer of national income to the Chinese. It would amount to a massive foreign aid program to one of the world’s most rapidly growing economies.

A global carbon tax would be easier to negotiate. All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to change hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best.

Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.

Methane Hydrates (Clathrates) Could Power The World

The great submarine burp
August 27, 2007 -- The Economist

Methane from the oceans could power the world

Much effort is quietly going into the pursuit of what is probably the world’s greatest store of fossil fuel—caches of methane, the primary component of natural gas, stored in structures called methane hydrates, or clathrates (a general term for gas molecules trapped by water molecules). Looking just like ice, they are methane molecules trapped within tiny cages of water molecules. They form where temperatures are low and pressures are high, which is to say, on the sea-floor at the continental shelves, and within the permafrost at the Earth’s poles.

As with all fossil-fuel resources, it is hard to estimate just how much methane is trapped in clathrates worldwide. But there is a lot. One litre of clathrates can hold more than 150 litres of methane. Numerous deposits have been identified off the coasts of all of the continents. Even a few of the lakes in Central Asia are just frosty enough to support clathrate formation. Some guess that clathrate methane reserves could equal twice the rest of the world’s fossil fuel supplies combined.

America's National Energy Technology Laboratory put together a consortium of other government agencies and petroleum companies to drill for clathrates with some success in the Gulf of Mexico; they were promptly hired by India to perform the trick there. A Japanese government collaboration has drilled about 30 wells, with a timeline to start production and distribution of methane from hydrates by 2016. In June China reported having pulled up some first methane-bearing samples from the South China Sea.

All of this might sound like the beginnings of the solution to the world’s energy problems. And it may yet be. But, as always, there are some daunting details to sort out first. Many deposits will yield just a fraction of the hoped-for methane, and harvesting even that will be difficult. The little cages of water around the methane are dangerously delicate, so that collection has to take place on the sea-floor. Much work is now under way on adapting conventional drilling equipment for large-scale deep-sea methane recovery.

Clathrates are suspects in a number of geo-crimes great and small. Mixed with sea-floor sediment, they can constitute vast unstable deposits prone to underwater landslides. Such a landslide 8000 years ago in the North Sea created a tsunami that flooded much of coastal Scotland and Norway.

And, given their delicate nature, clathrates tend to release their methane bounty during these landslides. Methane is the cleanest of the fossil fuels when burned; but released directly into the atmosphere, it is a “greenhouse gas” significantly more potent than carbon dioxide. Vast releases of methane from clathrates are widely thought to have played a part in two global temperature spikes that led to mass extinctions about 250m and 55m years ago.

Because the icy slush left over after methane removal is less structurally stable than the clathrates, stripping the seafloor of some of its methane might result in frequent landslides that release much more methane. Many clathrate deposits sit atop grand reservoirs of free gas, so that drilling might unleash a methane burp of enormous size, with environmental impacts to match.

One brilliant-sounding idea, now being studied, calls for pumping carbon dioxide into the clathrates. The carbon dioxide would make the clathrates more stable; and, its presence would case them to give up their methane, sequester the carbon dioxide, and let off a little heat that kept the reaction going.

The technological challenge is vast, but no more so than the potential economic rewards. The trick is to get the gas, without the pains.

AC, DC and Wind Power

Where The Wind Blows
July 26, 2007 -- The Economist

Plug in your toaster—or your television or your vacuum cleaner—and the electricity that surges through it is an alternating current. The question of whether the world would be powered by direct current (DC), in which electrons flow in one direction around a circuit, or by alternating current (AC), in which they jiggle back and forth, was decided in the 1880s. Thomas Edison backed DC. George Westinghouse backed AC. Westinghouse won.

The reason was that over the short distances spanned by early power grids, AC transmission suffers lower losses than DC. It thus became the industry standard. Some people, however, question that standard because over long distances high-voltage DC lines suffer lower losses than AC. Not only does that make them better in their own right, but employing them would allow electricity grids to be restructured in ways that would make wind power more attractive. That would reduce the need for new conventional (and polluting) power stations.

AC/DC/PC

Wind power has two problems. You don't always get it where you want it and you don't always get it when you want it. According to Jürgen Schmid, the head of ISET, an alternative-energy institute at the University of Kassel, in Germany, continent-wide power distribution systems in a place like Europe would deal with both of these points.

The question of where the wind is blowing would no longer matter because it is almost always blowing somewhere. If it were windy in Spain but not in Ireland, current would flow in one direction. On a blustery day in the Emerald Isle it would flow in the other.

Dealing with when the wind blows is a subtler issue. In this context, an important part of Dr Schmid's continental grid is the branch to Norway. It is not that Norway is a huge consumer. Rather, the country is well supplied with hydroelectric plants. These are one of the few ways (but not the only way, see article) that energy from transient sources like the wind can be stored in grid-filling quantities. The power is used to pump water up into the reservoirs that feed the hydroelectric turbines. That way it is on tap when needed. The capacity of Norway's reservoirs is so large, according to Dr Schmid, that should the wind drop all over Europe—which does happen on rare occasions—the hydro plants could spring into action and fill in the gap for up to four weeks.

Put like this, a Europe-wide grid seems an obvious idea. That it has not yet been built is because AC power lines would lose too much power over such large distances. Hence the renewed interest in DC.

Westinghouse won the battle of the currents in the 1880s because it is easier to transform the voltage of an AC current than of a DC current. High voltage is the best way to transmit power (the higher the voltage, the smaller the loss), but high voltage is not usually what the user wants. Power is therefore transmitted along high-tension AC lines and then “stepped down” to usable voltages in local sub-stations.

Edison was right, however, to argue that DC is the best way to transmit electricity of any given voltage. That is because the shifting current of AC runs to earth more easily than DC does. To avoid this earthing, AC lines have to be built a long way from the ground—and the higher the voltage, the farther away they need to be. At 400 kilovolts, a standard value for long-distance transmission, an alternating current 30 metres (100 feet) from the ground has a fortieth of the loss of a similar cable at ground level. But even at this height an overhead DC line will beat an AC line at distances more than 1,000km (600 miles), while ground-level DC will beat AC at distances as short as 30km.

Dr Schmid calculates that a DC grid of the sort he envisages would allow wind to supply at least 30% of the power needed in Europe. Moreover, it could do so reliably—and that means wind power could be used for what is known in the jargon as base-load power supply.

Base-load power is the minimum required to keep things ticking over—the demands of three o'clock in the morning, or thereabouts. At the moment, this is supplied by traditional power stations. These either burn fossil fuel and thus contribute to global warming, or use uranium, which brings problems such as how to get rid of the waste, as well as political opposition.

Though wind power has its opponents, too, its environmental virtues might be enough to swing things in its favour if it were also reliable. Indeed, a group of Norwegian companies have already started building high-voltage DC lines between Scandinavia, the Netherlands and Germany, though these are intended as much to sell the country's power as to accumulate other people's. And Airtricity—an Irish wind-power company—plans even more of them. It proposes what it calls a Supergrid. This would link offshore wind farms in the Atlantic ocean and the Irish, North and Baltic seas with customers throughout northern Europe.

Airtricity reckons that the first stage of this project, a 2,000 turbine-strong farm in the North Sea, would cost about €2 billion ($2.7 billion). That farm would generate 10 gigawatts. An equivalent amount of coal-fired capacity would cost around $2.3 billion so, adding in the environmental benefits, the project seems worth examining. Such offshore farms certainly work. Airtricity already operates one in the Atlantic, and though it currently has a capacity of only 25 megawatts, increasing that merely means adding more turbines.

Nor is this the limit of some people's vision. The Global Energy Network Institute, based in San Diego, California, reckons high-voltage DC lines could be used to bring solar energy to market from places such as the Sahara. Wind and geothermal power could be gathered from as far afield as South America and Siberia. Such a globalised market has its attractions. Whether the world is ready for the Organisation of Electricity Exporting Countries to take over from OPEC, though, remains to be seen.

Compressed Air and Wind Power

Trapped Wind
July 26, 2007 -- The Economist

Compressed air might help to make wind power more reliable

Pumping water into the reservoir of a hydroelectric power plant may be a good way of storing energy captured by wind farms—but what if there are no such plants to hand and no high-tension lines to reach them? One answer is to use the energy to compress air, which can be squirrelled away in hermetically sealed underground caverns. Then, when electricity is needed, the air can be released and used to turn a generator.

At the moment, however, there are only two compressed-air energy-storage plants in the world (one in America and one in Germany), and neither was built to make use of wind power. Instead, they are designed to take advantage of variations in the price of electricity. When power is cheap, it is used to run their compressors. When it is expensive, the valves are opened and the generators turn.

Compressed-air plants are inefficient, and so they are commercially viable only in places where the price of power varies dramatically. But the intermittent nature of wind power can cause just that sort of variability. At any rate, a group of municipal power companies in the American Midwest reckon that building a wind-powered compressed-air plant to take advantage of the blustery Great Plains will be worthwhile. They have just selected a site in Iowa, and hope to be operational by 2011. BP, a British energy firm, is also looking into the concept.

Meanwhile, General Compression, a small firm based in Attleboro, Massachusetts, is taking another approach. Its windmill compresses air directly. This has the advantage of eliminating two wasteful steps: the conversion of the mechanical power of a windmill into electricity and its subsequent reconversion into mechanical power in a compressor. But an air-compressing windmill, while fine for storing energy, cannot transmit electricity directly to the grid. The firm will not produce its first prototype until 2009, but sceptics already worry that what it gains on the swings, it will lose on the roundabouts—or, in this case, on the turbines.

Production and Consumption

The revolution of production and consumption
May 29, 2006 -- By Timo Mäkelä, Sitra

Growing numbers of decision-makers, scientists and economists believe that the world economy is heading towards a crisis because of diminishing natural resources and their consequently high prices. What is more, the race after energy and natural resources will lead to ever wider and more acute environmental problems. The climate will change while storms and draughts will become commoner and the environment impoverished and polluted. The Earth simply cannot long support the accelerating rate of production and consumption.

We do not need to look far for an example. At its current growth rate, the amount of grain and paper that China would need in 25 years’ time equals 70% of all grain production in the world and 200% of paper production. More oil would be consumed than the global oil production of today put together.

The UN and the World Bank issued recently an extensive report on the state of the world. It did not make for an amusing read.

Out of the 25 natural resources sustaining life on Earth, nearly 20 are endangered. If every single person in the world consumed like Europeans do, it would take more than two Earths to sustain it. The Americans consume even more, at a rate that according to the same calculation would require four Earths.

Some companies and investors are beginning to worry. A sustainable development classification will be gradually introduced and required of companies as evidence that their ethics are high and the environmental risks under control. In fact, we are moving towards a new industrial revolution, this time directed by the limits of our planet and environmental risks.

Part of this revolution is the rapid growth of global markets for new environmental technologies and services. According to estimates, the markets have already exceeded €500 billion, which is close to those of pharmaceutical and aviation industries. The annual growth rate is 5–10%. As much as 15% of new risk investments in the world are made in the production of renewable energy sources, environmentally friendly technologies and cleaner production. Here, Japanese and American companies are striving for market leadership.

The largest corporation in the world, the American General Electric, has recently revamped its strategy and launched its “Ecomagination” programme. The company will focus in the future on producing more sustainable and environmentally friendlier technologies.

Japan, on the other hand, is ahead of Europe in the efficient use of both energy and natural resources. Japanese products and technologies are taking markets by storm.

Europe is still the leader in environmental technology markets. The German recycling industry produces technologies and innovations for global markets, and Spain is one of the leading utilisers and producers of wind and solar energy. In Denmark, wind energy has surpassed meat products as an export.

But time is running out. That is why Europe is keen to seize this new opportunity. Ecological innovations and the more efficient use of natural resources and energy are an integral part of the EU’s growth and jobs strategy, the Lisbon strategy.

EU’s new environmental technology programme promises research and risk funding for companies investing in environmental technologies. The programme also aims to improve the pull and functionality of the markets. Public procurement, financial steering mechanisms and new product regulations and standards play a key role. Many of the EU Member States, including Finland, have issued their own national environmental technology programmes.

The new and more efficient technologies and methods that save natural resources and energy are a rational choice now and in the future. More efficient production decreases environmental damage but is also financially justified, as it simply saves money.

The industrial revolution geared towards sustainable development will mean efficient recycling of natural resources, extensive use of renewable energy sources, innovative production, materials and technologies, as well as new concepts of how we should move from one place to another. Nothing less will suffice, and as long there is a will, there are plenty of ways. New companies and innovations are in great demand.

Sustainable Development: A 21st Century American Vision?

As I watched E.O. Wilson speak on BookTV today I was reminded once again of how finite the world's resources are for ourselves and future generations. If every human consumed at equal rates to Americans, it would require four Earths to sustain it. This somber statistic persuaded me to post this snippet I read during a recent BART ride.

Excerpts from:
Learning from History: U.S. Environmental Politics, Policies, and the Common Good
November 2006 -- By Richard N.L. Andrews, Environment

In 2005, the United Nations commissioned Millennium Ecosystem Assessment reported that over the past 50 years, rapid and extensive change in human ecosystems has resulted in a substantial and largely irreversible loss in the diversity of life on Earth. More land has been converted to cropland since 1945 than in the eighteenth and nineteenth centuries combined, and water withdrawals from rivers and lakes have doubled since 1960. Since 1750, atmospheric concentrations of carbon dioxide, the major contributor to global warming, has increased, with 60 percent of that increase happening between 1959 and the present. Fifty percent of all the synthetic nitrogen fertilizer ever used has been applied since 1985; flows of biologically available nitrogen in terrestrial ecosystems have doubled since 1960 and may increase by two-thirds more by 2050. An estimated 10 to 30 percent of all mammal, bird, and amphibian species are currently threatened with extinction.

These changes have contributed to substantial gains in human well-being and economic development at growing costs to the essential services that ecosystems provide to human societies: providing food, water, fuel, wood, and fiber, supporting and regulating natural processes that are necessary for human life and health (nutrient cycling, soil formation, water purification, the climate system, and the control of disease organisms), and providing spiritual and recreational values. These damaging trends are substantially reducing the availability of these services for future use.

U.S. environmental policies have been prominent causes of these damaging trends and must be part of any solution. Throughout American history, the United States' dominant policies have been to promote the economic exploitation of natural resources, first nationally and now globally...

At times throughout this history, U.S. environmental policies also have included initiatives to manage and protect the natural environment...

The net effect of these policies has been to provide unprecedented levels of material comfort to many people and extraordinary affluence to a few and to reduce and even repair some environmental damage.

It would be a mistake to attribute the vast environmental changes in the United States entirely to public policies. Policies tend to lag behind economic and social trends, because government typically acts only in response to a buildup of pressure for collective action...

The enduring challenge for U.S. environmental policy is to build, maintain, and constantly renew public support for effective environmental governance, at home and worldwide. To meet that need, U.S. environmental policy today must recover an essential missing element: a broadly shared vision of the common environmental good. Such visions have emerged at several points in the past. Examples include the sanitation movement of the nineteenth century; the City Beautiful movement of the 1890s; the Progressive civic reform and conservation movements that followed it; the New Deal vision of combining ecological, social, and economic recovery; and the vision of a modern society in harmony with its natural environment that was articulated in NEPA and widely voiced by the American public on Earth Day in 1970...

The closest current approximation to such a vision is perhaps the idea of sustainable development, as articulated by the United Nations' World Commission for Environment and Development in 1987 and in the Agenda 21 document endorsed by the 1992 United Nations Earth Summit in Rio de Janeiro. The commission envisioned sustainable development as a pattern of development that would meet the needs of human communities today without jeopardizing those of the future, and its vision specifically included economic development, ecological sustainability, and social equity as essential and interdependent elements...

Barring some new defining crisis or leadership commitment, the future of U.S. environmental policy will be shaped by the reemergence--or failure to emerge--of a new broad-based national coalition for an ecologically sustainable economy and inclusive and democratic society.

Wind Energy Market Outpacing Manufacturing Capacity

Via Peak Energy
Excerpt from:
Despite Rising Costs, Wind Industry Thriving Worldwide
July 26, 2007 -- By Stephen Lacey, Renewable Energy Access

The wind industry is undergoing temporary growing pains similar to the silicon shortage experienced by the solar photovoltaic (PV) industry: there are simply not enough materials or manufacturing capacity to keep up with the increasing demand for wind turbines. The need for steel, copper, concrete and other materials has driven up project costs, restricted turbine supplies and created a difficult market for smaller wind developers.

But despite a two-and-a-half year stretch of materials shortages and rising costs, the global wind industry is experiencing steady growth worldwide and increased acceptance by utilities, governments and citizens.

"Between 2004 and 2005, the global wind turbine market experienced a rapid period of escalation...Within the span of just that year the global demand for wind turbine components and supply jumped to a new plateau and a new rate of growth," says Joshua Magee, senior analyst for Emerging Energy Research's (EER) North American Wind Advisory Group.

Much of that new demand was caused by the two-year extension of the production tax credit (PTC) in the U.S., which provided certainty for wind developers and encouraged a slew of new projects. In addition, China and India emerged as major players in the wind market, further straining supply of materials.

As the global market expanded rapidly starting at the end of 2004, the manufacturing capacity was not in place to handle demand. Since 2005, manufacturers have been playing catch-up and pumping out turbines as quickly as developers can put them into the ground. However, because it takes about 20 months to ramp up manufacturing capabilities, the cost increase and turbine shortage is not expected to level out until sometime in 2009, says Magee.

"Given that the global wind turbine industry is an inherently capital intensive industry, manufacturers have spent the last two years making the necessary investments to begin to regain parity with this new level of global demand," Magee says.

The point of parity couldn't come soon enough for some developers. Over the last two years, project costs have risen 50% in some cases, according to American Wind Energy Association Executive Director Randall Swisher. But the industry shouldn't be worried, says Swisher. The long-term economics of wind energy are still very attractive to utilities and their customers. While the price of fossil energies continues to rise, the cost of wind will always stay the same—free.

Energy Efficiency Index from Merrill Lynch

Merrill's Efficiency Index
July 30, 2007 -- By Cassandra Vinograd, WSJ: Energy Roundup

Merrill Lynch announced a new Energy Efficiency Index, currently comprised of 40 companies, to identify industry sectors that it says should benefit from the growing drive to improve energy efficiency.

“While there has been a clear shift of resources and investor attention into renewable energy, energy efficiency remains an area that is relatively under-explored,” said Asari Efiong, Merrill Lynch SRI/ Renewable Energy equity analyst. “We believe that energy efficiency represents a significant market opportunity for investors, as policy changes look set to force a structural shift in demand.”

Merrill analysts say they think the global manufacturing industry could improve its energy efficiency by between 18% to 26% overall, while cutting the sector’s CO2 emissions by 19-32%. The four sectors most exposed to this theme, according to Merrill, are the automotive industry, capital goods, semi-conductors and building materials.

Among the companies in the index are those with technologies that boost automotive fuel efficiency; building-insulation companies; power-semiconductor makers and efficient-lighting companies.

Climate Change and Energy: 2008 Presidential Policy Directors

Campaign 2008
May 24, 2007 -- Environment & Energy TV

Click here for the video.

Panelists include, James Kvaal of John Edwards for America, Denis McDonough of Obama for America, John Raidt of McCain 2008 and Todd Stern of the Hillary Clinton for President Exploratory Committee. They discuss the candidates’ goals for climate and energy, whether nuclear and coal to liquids will play a part in future energy policy and whether or not the United States should wait for an international agreement on climate policy.

Banning Incandescent Light Bulbs: Economic Rationality

BAN THE BULB
May 9, 2007 -- By Lester R. Brown, Earth Policy Institute

ECO-ECONOMY UPDATE:
BAN THE BULB: Worldwide Shift from Incandescents to Compact Fluorescents Could Close 270 Coal-Fired Power Plants

On February 20, 2007, Australia announced it would phase out the sale of inefficient incandescent light bulbs by 2010, replacing them with highly efficient compact fluorescent bulbs that use one fourth as much electricity. If the rest of the world joins Australia in this simple step to sharply cut carbon emissions, the worldwide drop in electricity use would permit the closing of more than 270 coal-fired (500 megawatt) power plants. For the United States, this bulb switch would facilitate shutting down 80 coal-fired plants.

The good news is that the world may be approaching a social tipping point in this shift to efficient light bulbs. On April 25, 2007, just two months after Australia’s announcement, the Canadian government announced it would phase out sales of incandescents by 2012. Mounting concerns about climate change are driving the bulb replacement movement.

In mid-March, a U.S. coalition of environmental groups—including the Natural Resources Defense Council, the Alliance to Save Energy, the American Coalition for an Energy-Efficient Economy, and the Earth Day Network—along with Philips Lighting launched an initiative to shift to the more-efficient bulbs in all of the country’s estimated 4 billion sockets by 2016.

In California, the most populous state, Assemblyman Lloyd Levine is proposing that his state phase out the sale of incandescent light bulbs by 2012, four years ahead of the coalition’s deadline. Levine calls his proposed law the “How Many Legislators Does It Take to Change a Light Bulb Act.” On the East Coast, the New Jersey legislature is on the verge of requiring state government buildings to replace all incandescent bulbs with compact fluorescents by 2010 as part of a broader statewide effort to promote the shift to more-efficient lighting. (See additional initiatives.)

The European Union, now numbering 27 countries, announced in March 2007 that it plans to cut carbon emissions by 20 percent by 2020. Part of this cut will be achieved by replacing incandescent bulbs with compact fluorescents. In the United Kingdom, a nongovernmental group called Ban the Bulb has been vigorously pushing for a ban on incandescents since early 2006. Further east, Moscow is urging residents to switch to compact fluorescents. In New Zealand, Climate Change Minister, David Parker, has announced that his country may take similar measures to those adopted by Australia.

In April, Greenpeace urged the government of India to ban incandescents in order to cut carbon emissions. Since roughly 640 million of the 650 million bulbs sold each year in this fast-growing economy are incandescents, the potential for cutting carbon emissions, reducing air pollution, and saving consumers money is huge.

At the industry level, Philips, the world’s largest lighting manufacturer, has announced plans to discontinue marketing incandescents in Europe and the United States by 2016. More broadly, the European Lamp Companies Federation (the bulb manufacturers’ trade association) is supporting a rise in EU lighting efficiency standards that would lead to a phase-out of incandescent bulbs.

At the commercial level, Wal-Mart, the world’s largest retailer, announced a marketing campaign in November 2006 to boost its sales of compact fluorescents to 100 million by the end of 2007, more than doubling its annual sales. In the U.K., Currys, Britain’s largest electrical retail chain, has announced that it will discontinue selling incandescent light bulbs.

Switching light bulbs is an easy way of realizing large immediate gains in energy efficiency. A study for the U.S. government calculated that the gasoline equivalent of the energy saved over the lifetime of one 24 watt compact fluorescent bulb is sufficient to drive a Prius from New York to San Francisco. While a worldwide phase out of the inefficient incandescents would reduce world electricity use by more than 3 percent, shifting to more-efficient street lighting and replacing older fluorescent tubes with newer, more-efficient ones might double this reduction in power use.

Although highly efficient compact fluorescent bulbs have been around for a generation, they have until recently been on the fringe, used only by environmentally-minded consumers and typically sold in hardware stores, but not in supermarkets. One reason consumers lacked interest was that the new bulbs can cost five times as much as incandescents. Only the more knowledgeable consumers knew that a compact fluorescent bulb uses only one fourth as much electricity as an incandescent bulb, lasts 10 times as long, and easily saves $50 during its lifetime.

One disadvantage of compact fluorescents is that each bulb contains a small amount of mercury, roughly one fifth the amount in a watch battery. This mercury is only a small fraction of that released into the atmosphere by the additional coal burned to power an incandescent.

Mercury released by coal-fired power plants is the principal reason why 44 of the 50 states in the United States have issued mercury intake advisories limiting the consumption of fish from freshwater streams and lakes. Nonetheless, worn-out compact fluorescents, watch batteries, and other items that contain mercury still need to be recycled properly. Fortunately, this is possible, whereas the mercury spewing from coal smokestacks blankets the countryside, ending up in the water and food supply.

Shifting to the highly efficient bulbs sharply reduces monthly electricity bills and cuts carbon emissions, since each standard (13 watt) compact fluorescent over its lifetime reduces coal use by more than 210 pounds. Such a shift also substantially reduces air pollution, making it obviously attractive for fast-growing economies plagued with bad air like China and India.

In the United States, an ingenious website called 18seconds.org (the name derives from the time it takes to change a light bulb), provides a running tally of compact fluorescents sold nationwide since January 1, 2007. As of early May, it totaled nearly 37 million bulbs, yielding a reduction in carbon emissions comparable to taking 260,000 cars off the road. Sponsored by Yahoo! and Nielson, the site also provides data on how many dollars are being saved and how much less coal is burned. Data are available on the website for each state, providing a convenient way of monitoring local progress in replacing incandescents.

The challenge for each of us, of course, is to shift to compact fluorescents in our own homes if we have not already. But far more important, we need to contact our elected representatives at the city, provincial, or state level and at the national level to introduce legislation to raise lighting efficiency standards, in effect phasing out inefficient incandescent light bulbs. Few things can cut carbon emissions faster than this simple step.

In a world facing almost daily new evidence of global warming and its consequences, there is a need for a quick decisive victory in the effort to cut carbon emissions and stabilize climate. If we can engineer a rapid phase-out of incandescent light bulbs it would provide just such a victory, generating momentum for even greater advances in climate stabilization.

Related post: Economic Irrationality

Economic Irrationality

Irrational Incandescence
May 31, 2007 -- By The Economist via Energy Bulletin

Some ways of cutting carbon are cheaper than others. So, at different carbon prices, different sorts of methods of abatement become worthwhile. Vattenfall, a Swedish power utility, has tried to quantify which ones would be worth undertaking at what price (see chart 3).

The result is a testament to economic irrationality. The measures below the horizontal line have a negative abatement cost—in other words, by carrying them out, people and companies could both cut emissions and save money. At a macroeconomic level they would boost, rather than reduce, economic growth.Lighting, for instance, accounts for some 19% of the world's electricity use. A standard incandescent light bulb costs around €1, says Theo van Deursen, chief executive of Philips Lighting, and uses €15-worth of electricity a year. A low-energy one costs €5-6 and uses €3-worth. The payback on investing in a compact fluorescent bulb, therefore, is less than a year. Yet low-energy lighting makes up only 30% of Philips's sales. Mr van Deursen admits to being disappointed. Sales are rising faster in the developing world: there, people pay more attention to electricity bills than they do in the rich world.

Economists trying to explain this apparent irrationality suggest that the savings are too small and the effort involved in change too large. People find their electricity bills too boring to think about; within companies, those responsible for keeping bills down may not have the authority to spend the necessary capital. Another explanation is the agency problem: that the developer who would have to pay higher capital costs up front will not be forking out for the electricity bills. Besides, people buy houses not because they have good insulation but because they have pretty views.

Compared with pursuing greater energy efficiency, the abatement measures into which so much money is now being poured look rather expensive. Carbon capture and storage and wind and solar power, for instance, all have positive, and relatively high, abatement costs.

But the cheapest sources of abatement are difficult for policymakers to get at. Billions of different actors are involved. They cannot be targeted in the way that a few hundred factories can. What is more, a moderate carbon price is not likely to be effective, since people clearly do not care enough about cost.

One policy option is to decouple the utilities' revenues from the amount of electricity they sell. That gives them an incentive to increase the efficiency of power usage rather than to produce and sell extra power. California is already doing this, which is presumably why electricity prices there are among the highest in America, while consumption is relatively low.

Energy-efficiency standards, such as building regulations, are another option. Economists generally prefer to avoid rules that specify what companies can produce and how, because they require governments, rather than markets, to allocate resources, and markets tend to do a better job. But if, as in this case, a public as well as a private good is involved, and the market does not seem to be doing its job properly, there is an argument for governments giving it a nudge.

There are lots of energy-efficiency regulations in place already, and they are being tightened. Incandescent light bulbs are the top target at the moment. Both the European Union and Australia said earlier this year that they are planning to ban them. But the man in the vanguard of this green revolution is Fidel Castro, who started phasing them out two years ago.

~~~~~~~~~~~~~~~ Editorial Notes (Energy Bulletin) ~~~~~~~~~~~~~~~~~~~

Nice piece by The Economist (UK). Another good one from the Economist: The truth about recycling. Conservatives and libertarians in search of an intelligent way to approach environmentalism might have a good role model in the (conservative) Economist...

The Vattenfall website has a big section on climate change.

The chief executive of Vattenfall, Lars Josefsson, was recently profiled: Hero or villain? A carbon critic relies on coal (International Herald Tribune).

Europe seems to be further along than the USA in its sense of urgency about conservation. Der Spiegel had a long series about it: Why Conservation Is the World's Best Energy Source.

UPDATE (June 13)
Two posters at The Oil Drum found source documents for the striking graphic in the article. The graphics in those documents are more readable and more complete than the graphic in the above article.

Marco located a bigger and better version of the figure on page 7 or 8 of Vattenfall’s Global Climate Impact Abatement Map (25-page PDF).

Peaknik located another version of the graphic on page 10 or 11 of Global Mapping of Greenhouse Gas Abatement Opportunities (54-page PDF).

David Jeffery's response to Irrational Incandescence:
Cheap ways to reduce greenhouse emissions
June 28, 2007 -- By David Jeffery, Oikos

An interesting article in The Economist last month took a look at the cost of various options for reducing greenhouse emissions (summarised in the graph above).

Two things are particularly notable:

* There are a number of options that have a negative cost. In other words, not only would they reduce emissions, they’d also save us money. The biggest one is insulation and low-energy lighting is also up there.

* The solutions we hear a lot about – such as wind, solar and carbon capture – are among the most expensive options.

So why are we not voluntarily making decisions that would not only reduce emissions but also save us money?

The Economist identifies a couple of possible reasons, the most compelling to my mind is that the people who make the choices are not the people who pay the costs of those decisions. For example, property developers have to pay for insulation but they won’t get the benefits of lower electricity bills, so their incentive is to go cheap on insulation. If the property is to be rented out, it’s not even the buyer who pay those bills – it’s a tenant.

How to solve this? In theory, awareness of the issue should be enough: if tenants and buyers of new houses (or other buildings) are aware that good insulation can save them substantial amounts of money, they should demand it and be prepared to pay more for it – in the same way they’d be prepared to pay more for a good bathroom or kitchen.

So why isn't this happening? And seeing as it doesn’t seem to be happening, is there a role for government in mandating it in building standards or requiring developers and sellers to at least provide understandable information (eg, energy efficiency ratings)?

The Road To Clean Energy Starts Here, by Jeffrey D. Sachs

The Road to Clean Energy Starts Here
May 2007 Issue -- By Jeffrey D. Sachs, Scientific American

Realizing crucial energy technologies will take more than just research and development

The key to solving the climate change crisis is technology. To accommodate the economic aspirations of the more than five billion people in the developing countries, the size of the world economy should increase by a factor of four to six by 2050; at the same time, global emissions of greenhouse gases will have to remain steady or decline to prevent dangerous changes to the climate. After 2050, emissions will have to drop further, nearly to zero, for greenhouse gas concentrations to stabilize.

The overarching challenge is to make that transition at minimum cost and without economic disruption. Energy-saving technologies will play a pivotal role. Buildings can save energy at low capital cost, and often net overall savings, through improved insulation, efficient illumination and the use of heat pumps rather than home furnaces. Automobiles could, over time, reach 100 miles per gallon by a shift to plug-in hybrids, better batteries, lighter frames and other strategies. Of course, technologies such as heat pumps and plug-in hybrids partly reduce direct emissions by shifting from on-site combustion to electricity, so that low-emission power plants become paramount.

Low-emission electricity generation will be achieved in part through niche sources such as wind and biofuels. Larger-scale solutions will come from nuclear and solar power. Yet clean coal will be essential. New combustion techniques, combined with carbon capture and sequestration (CCS), offer the prospect of low- or zero-emission coal-fired thermal plants. The incremental costs of ccs may well be as low as one to three cents per kilowatt-hour.

All these technologies are achievable. Some will impose real added costs; others will pay for themselves as lower energy bills offset higher capital outlays. Some estimates suggest that, as of 2050, the world will have to negate around 30 billion tons of carbon dioxide emissions a year at a cost of roughly $25 per ton, or $750 billion annually. But with a world economy by then of perhaps $200 trillion, the cost would be well under 1 percent of world income and perhaps under 0.5 percent, a true bargain compared with the costs of inaction.

Achieving these technological solutions on a large scale, however, will require an aggressive global technology policy. First, there will have to be market incentives to avoid emissions, in the form of either tradable permits or levies. A reasonable levy might be $25 per ton of emitted carbon dioxide, introduced gradually over the next 10 to 20 years. Second, there will have to be ample government support for rapid technological change. Patents can help spur private market research and development (R&D), but public funding is required for basic science as well as for the public demonstration and the global diffusion of new technologies. In sum, we need a strategy sometimes described as RDD&D.

In the past two years, the Earth Institute at Columbia University has hosted a Global Roundtable on Climate Change, involving leading corporations from around the world. These companies, including many of the largest power producers, are ready to reduce carbon emissions. They know that CCS must be a high priority. A new Global Roundtable Task Force on CCS seeks to promote the required RDD&D. Fortunately, the European Union has already pledged to build at least a dozen CCS demonstration projects in Europe by 2015. But we will also need such centers in the U.S., China, India, Australia, Indonesia and other highly significant coal-power producers. In the low-income countries, this will require a few billion dollars; that is where the RDD&D investments of the high-income countries will be essential. The CCS Task Force aims to break ground on one or more demonstration plants by 2010 in every major coal region. By 2015 this crucial technology can be proved and added to the bid to avert climate disaster. This model of RDD&D won't stop there. Harnessing technology to achieve sustainable energy will involve much of the global economy for decades.

Polysilicon Costs and Solar Companies

Global warming sparks polysilicon crunch
May 14, 2007 -- By Matt Andrejczak, Marketwatch

Raw-material price spikes, leaving solar-panel makers scrambling

Global warming is juicing the price of a key ingredient used to make solar panels, raising questions about what the longer-term impact of the current shortage will be.

Polysilicon is an essential raw material in the production of solar cells for panels that convert sunlight to electricity for homes, businesses and farms.

Since 2004, average contract prices for securing long-term supplies of polysilicon have skyrocketed, more than doubling to $70 per kilogram.

Not lucky enough to have a long-term contract? Spot-market prices for polysilicon are daunting: Expect to pay $200 per kilogram on the spot market, compared with the $150 paid in 2006, according to industry watchers.

The supply crunch has thrust the polysilicon business -- once the all but exclusive territory of semiconductor makers -- into high gear. Novel financing deals and new partnerships are afoot, with solar-module makers scrambling to secure long-term deals and chemical manufacturers scrambling to boost factory output by 2008 and beyond.

To ensure a steady supply of polysilicon, JA Solar Holdings (JASO) , SunTech Power Holdings (STP) , Canadian Solar Inc. (CSIQ) and others have dedicated much of their IPO proceeds to purchases of the raw material.

The deals, called "pre-payments," are being used by polysilicon makers to boost production.

The situation is more acute for some solar companies than others.

Faced with escalating prices and tight supplies, two companies have swapped equity for polysilicon in pacts to help future sales. Those deals have raised eyebrows.

South Korea-based DC Chemical Co. acquired a 15% stake in Massachusetts-based Evergreen Solar Inc. (ESLR) in a supply pact that runs through 2014. In another deal, China-based SunTech Power inked a 10-year supply pact with MEMC Electronics Materials Inc. (WFR) , which received a warrant equal to a 4.9% stake in SunTech.

The Evergreen-DC Chemical deal, in particular, carried a "steep price to pay for polysilicon supply," said Jeff Osborne, an analyst at CIBC World Markets, which has helped take a number of solar companies public.

In mid-April, Evergreen agreed to issue 4.5 million shares of restricted common stock and 625 shares of restricted preferred stock to DC Chemical, which bought 3 million shares of Evergreen at $12.07 each. Under the supply deal, Evergreen is to receive enough polysilicon to make roughly one gigawatt of photovoltaic solar panels through 2014.

Supply crunch

The supply crunch is exerting collatetal pressure on the semiconductor industry, which has long been the primary buyer of polysilicon, the chief material used to make the wafers onto which microchips are stamped.

"Global warming is not good for the semiconductor industry. The solar industry is growing very rapidly. ... It's really created demand in past several years that wasn't there before," said Tom Linton, who negotiates polysilicon deals for Freescale Semiconductor, one of the world's larger chip manufacturers.

This has changed the chip-making business's mindset

Before the solar companies came onto the scene in a big way, chip firms usually inked three- to six-month supply contracts with polysilicon producers. Now "you've started to see that elongate towards one- or multi-year contracts," said CIBC's Osborne.

The solar market's big polysilicon push came in 2006. For the first time ever, solar-panel makers consumed as much polysilicon as did the chip manufacturers, purchasing more than 50% of the silicon wafers produced in 2006 -- up from 10% in 2000, according to industry sources.

Polysilicon prices weigh more heavily on solar-panel makers, with the raw material making up 40% to 45% of the cost of goods per solar cell, compared with just 3% to 7% for a microchip. For that reason, solar-panel makers typically seek six- to 10-year supply contracts, Osborne reported.

On the solar horizon

The polysilicon shortage has stunted the growth of the solar industry, keeping it from expanding faster than the 20% pace it set in 2006, based on the number of installations worldwide. Yet a long-running supply-demand imbalance cannot be assumed, with forecasting polysilicon-market dynamics tricky and growing trickier.

For solar-panel manufacturers, future needs hinge on a number of questions:

How fast will solar take off in the U.S., Spain and other countries beyond Germany and Japan, the world's two biggest solar-installation markets?

How fast will solar-panel prices drop versus the price of electricity?

Will other solar technologies challenge the primacy of polysilicon?

"You have some questions there," said Jesse Pichel, an analyst at Piper Jaffray, which has helped raise money for solar-panel makers. "No one is really sure how it will play out."

Such factors and others make it "difficult to accurately estimate polysilicon demand for photovoltaic production," agreed Gartner Inc. analyst Takashi Ogawa, who forecasts worldwide polysilicon demand.

Alternatives in alternative energy

MEMC, Hemlock Semiconductor, Renewable Energy Corp. and DC Chemical are all building or expanding manufacturing sites in a bid to relieve supply pressure. Meanwhile, new entrants are also moving into the market, as 88% of the polysilicon supply is currently controlled by five players.

It takes at least two years to construct a polysilicon factory, which cost between $500 million and $1 billion. "The reality is [that] some of these plants may be significantly delayed, and some of the polysilicon makers maybe overstating their plans," Pichel said.

By 2010, global polysilicon available for sale is expected to reach 99,500 metric tons, up from 35,400 metric tons in 2006, according to CIBC's latest forecast, issued in late April, which estimates 25% more polysilicon will be available in 2010 than its prior projection.

CIBC estimated an "acute shortage" through 2008. Relief could come in 2009 at the earliest, in CIBC's view.

But the supply shortage has inspired exploration of alternative solar technologies that don't rely on polysilicon, such as thin-film panels. Whether such alternatives demonstrate efficacy and whether the most ambitious polysilicon-capacity buildouts come to fruition will ultimately have a great deal to do with whether the polysilicon crunch tightens or turns into a glut.

We Need to Bring Climate Idealism Down to Earth

Excerpts from:
We Need to Bring Climate Idealism Down to Earth
April 30, 2007 -- By Larry Summers, commentary, Financial Times via Economist's View

With the accumulation of scientific evidence and its persuasive presentation to the public, the global warming debate has reached a new stage. ...

The real question for debate is not whether something should be done – that debate is over among the rational. The crucial question now is what should be done so as to leave our descendants with the highest possible quality of life. ...

There is a very real danger that the global cap and trade approach ... enshrined in the Kyoto protocol – now favoured by most European governments – could be ineffective or even counterproductive by substituting for more realistic approaches to the problem. Kyoto is now the only game in town for those who do not want to be ostriches with respect to global climate change and so one has to hope for its ultimate success. But it is surely useful to try to be clear about the potential pitfalls...

First, the Kyoto approach depends on the questionable premise that nations will, in fact, be bound by binding targets or penalties for not meeting them. It is instructive in this regard to consider the history of the Maastricht Treaty within the European Union. It addressed fiscal targets ... within a group of countries that had already achieved a high degree of cohesion. It broke down almost immediately when it looked like the targets would not be binding for big countries, with the goals abandoned and no payment of even the modest penalties.

There is to date little evidence that Kyoto is driving behaviour. Whatever evidence there is of impressive emissions reductions comes from countries such as the UK, Germany and the former communist states, where coal use was being phased out for other reasons. The limited impact of Kyoto is evinced by the fact that carbon permits are now selling in the range of a negligible one euro a ton.

Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars. While in principle emission permits could be auctioned, in practice they are always allocated administratively. ...[In addition]..., the clean development mechanism has resulted in substantial payments for emissions reductions that would have occurred anyway or could have been achieved at negligible cost. There is even reason to think that certain industrial gas emissions may have been increased so that credit could be claimed for their abatement.

Third, the most serious problem with the Kyoto framework is that it is unlikely to generate substantial changes in developing country policies. ...[D]eveloping country policymakers are not likely to accept binding targets ... that fall way short on a per-capita basis of emissions levels in the industrial world. ...

The truth about climate change policy is that developing countries are where most of the future action has to be. They will account for 75 per cent of the increase in emissions over the next quarter century and are now making the infrastructure investments that will shape their future economies. ... The 1997 vote cast by all the Democrats in the Senate suggests that approaches that do not involve the developing world are unlikely to command political support in at least some parts of the industrialised world.

Perhaps these problems and others, like the difficulty of establishing emissions targets given the magnitude of economic uncertainties, can be overcome with goodwill and extensive thought. But next month I shall suggest approaches that, while less dramatic in their immediate claims for emissions reductions, may over time provide a more secure foundation for the progress that the world must have.

Costs Shrinking For Solar Thermal

Shrinking the costs for solar power
May 11, 2007 -- By Michael Kanellos, CNET News via Peak Energy

One of the big problems with solar power has been that it costs more than electricity generated by conventional means. But some experts think that, under certain circumstances, the premium for solar power can be erased, without subsidies or dramatic technical breakthroughs. A sufficiently large solar thermal power plant (also called concentrated solar power, or CSP) could potentially generate electricity at about the same cost as electricity from a conventional gas-burning power plant, experts say.

It's not easy. The plant would also have to come with a large energy storage system, be built next to others and be located close to users. To date, no one has completed a facility that comports to all of these parameters, said Fred Morse, an energy analyst who has studied the issue. "Solar thermal is available at much more attractive prices than solar photovoltaic. The land mass isn't huge, but it does take a while to build these," said Stephan Dolezalek, a managing partner and co-head of the clean tech practice at venture firm Vantage Point Venture Partners, an investor in Bright Source Energy, which builds solar thermal plants and components.

Both Dolezalek and Jiang Lin, who heads up the China Energy Group at the Lawrence Berkeley National Laboratory, said that solar thermal is likely the most promising technology in the entire alternative-energy field right now. When asked when solar thermal can hit parity, Lin responded "now." Conventionally generated electricity ranges between 5 and 18 cents per kilowatt hour (the amount of money to get a kilowatt of power for an hour) but in most places it's below 10 cents, according to the Energy Information Agency. Solar thermal costs around 15 to 17 cents a kilowatt hour, according to statistics from Schott, a German company that makes solar thermal equipment.

A solar thermal plant would need a facility to store the heat harvested in the day by its sunlight-concentrating mirrors so that the heat could be used to generate electricity at night. "You need the kind of system that can run in the evening," Morse said. At some sites, such as Nevada Solar One, excess heat is stored in molten salt and released at night to run the turbine. The plant, ideally, should be capable of generating about 300 megawatts of electricity. Those plants can churn out electricity at about 13 cents a kilowatt.

That's still a relatively high price, so utilities would need to group two, three or more 300-megawatt plants together to share operational resources, Morse said. "They could share control rooms or spare parts," he said. That would knock the price closer to 11 cents a kilowatt hour. "Under 10 cents is sort of the magic line," he said.

Dolezalek puts it another way: the plants need to be around 500 megawatts in size. Most solar thermal plants right now aren't that big. The 22-year-old thermal plant in California's Mojave Desert is 354 megawatts. Utility company Southern California Edison is erecting a 500-megawatt plant scheduled to open in 2009. By 2014, solar thermal plants located in the Southwest could crank out nearly 3 gigawatts of power, estimated Travis Bradford of the Prometheus Institute for Sustainable Development, a nonprofit based in Cambridge, Mass. That's enough for about 1 million homes.

Costs can then be reduced further by building the plants close to consumers. It costs about $1.5 million per mile for transmission lines, according to statistics from Acciona Solar Power, which owns solar thermal plants. Solar thermal plants work best in arid deserts that get little rainfall. Since some of the fastest-growing cities in the world are located in sun belts, that's less of a problem than it used to be. ...

Even if all of these factors could be completely optimized, solar thermal power plants would likely not produce electricity at a level that would compete with coal plants. Coal plants, however, will likely be hit with carbon taxes in the near future, which will make solar thermal more competitive. Still, at less than 10 cents a kilowatt, solar thermal would be competitive with electricity from gas-powered plants.

Utilities will also likely work hard to lower the costs of solar thermal in the coming decades, Morse added. Utilities are under mandates to increase their renewable energy sources. Citizen groups often complain about wind turbines and the wind doesn't blow at a constant, predictable rate. Several companies are intent on tapping heat from under the surface of the earth to generate power. Geothermal power, however, works best only in certain locations.

"There is an enough flat, unproductive land in the U.S. to power the U.S.," Morse said. "We just don't have the wires to get there. Eisenhower built the national highway system. Some president will build the national grid."