It's seldom that there's much drama in the energy world, however, in the U.K., a report by that country's government electricity regulator touched off a swarm of responses, defensive statements and condemnations — in short, genuine electricity drama.
It started with a report from the Office of Gas and Electricity Market (Ofgem) that warned of power shortages in the coming few years. Since 2012, Ofgem reported in its June 2013 capacity assessment, the risk of blackouts in the U.K. has doubled. Energy margins could shrink to as low as 2 percent in 2015 and 2016, according to Ofgem.
Ofgem said power outages are by no means guaranteed, but the risk is growing and the government needs to act swiftly to address the problem. Ofgem is calling for more government investment in power generation, as it places the blame for the potential power shortfalls mostly on the power generation sector.
Some factors that could increase the risk of power interruptions include a particularly cold winter or a higher than expected level of industrial activity.
Also at issue is the size and speed of Britain's decarbonization efforts. To comply with E.U. carbon-cutting goals, the U.K. is shutting down coal-fired power plants.
Some numbers: Since last year, more than 2 GW in installed capacity has gone offline in the U.K., and further shut-offs and retirements are expected. The economic situation in Britain and the E.U. is making new investment in new generation sources difficult. No new power plants are expected to be built until 2016.
The same economic downturn that is making power plants difficult to
build is also making power plants less necessary — because of the
downturn and investments in energy efficiency, peak demand has fallen an estimated 5 GW.
With such few new power sources in the pipeline, Ofgem is working with transmission authority National Grid and the Department of Energy and Climate Change (DECC) to come up with ways to depress demand. National Grid has a scenario that anticipates power demand to fall an additional 3 to 4 GW by the end of the decade in part due to demand-side management.
This puts the U.K. government in the awkward position of having to root against an economic recovery. Because if factories start humming again, the country's power grid and its generation capacity will be that much more strained.
In 2008, the U.K. set its own greenhouse gas emissions limits and agreed to cut emissions by 80 percent by 2050. The U.K. is also a signatory to the E.U.'s 20/20/20 plan, which calls for a 20 percent reduction in E.U. greenhouse gas emissions from 1990 levels.
This month, members of Parliament debated the creation of quantitative targets for cutting carbon in the energy sector, effectively speeding up the country's decarbonization process. The proposal (an amendment to a wider energy policy reform bill) was struck down following a close vote, pushing energy policy into the headlines of U.K. news outlets.
Given the country's shrinking energy margins, rapidly approaching decarbonization goals, aging power generation fleet and the looming threat of power outages hanging over it all, the U.K. has some serious thinking to do on energy policy.
The country cannot expect to shut down multiple gigawatts of coal power and just expect the lights to stay on without a plan to maintain reliability. It's one thing to sign on to carbon-cutting treaties, but actually making a low-carbon power grid work is a more difficult trick.
An energy reform bill has passed through Parliament's lower house and is now being debated in the House of Lords. One hopes the debate will not have to be carried out by candlelight.
Showing posts with label energy policy. Show all posts
Showing posts with label energy policy. Show all posts
Thursday, July 11, 2013
Tuesday, June 25, 2013
One thing liberals and conservatives agree on
We're often told how far apart the red states and blue states are. Aside from the obvious stalemates and squabbles in Washington, conservative and liberal Americans watch different TV shows, eat different foods, drive different cars and listen to different music. But there is one thing lefties and right-wingers seem to agree on: Using less energy is a good thing.
Because when you inform an American about exactly how much energy they are consuming, it doesn't matter whether they voted for Barack Obama or Mitt Romney. Either way, they want to use less electricity.
Given the news stories about compact fluorescents vs. incandescent light bulbs or hybrid cars vs. sport utility vehicles, this might come as a surprise. However the evidence — as gathered by Opower — backs it up.
The survey examined the energy use habits of customers across party lines (conservative, liberal and unaffiliated) from several regions of the country. The differences between political ideologies and geographical locations were quite close. All saved energy, and it didn't much matter how they were affiliated politically.
In the Mountain West region, liberals saved a little more than others, but only by a single percentage point. In the Northeast and Southeast, conservatives saved a little more than the liberals or the unaffiliated. So, in the end, people will save energy when they participate in programs that inform them of their electricity use, but the exact percentages can vary a bit from place to place.
There is, however, a "backfire" effect the surveyors noticed that is exclusive to conservative users. It seems that when a customer learns they are using less energy than average, the liberal-minded customer will continue doing what they are doing. The conservative-leaning one, however, will sometimes increase their energy use — perhaps feeling they're off the hook. This behavior was not observed in liberals or the unaffiliated.
The reason for this backfire effect was not fully explained by the analysis, but it appears that providing detailed information on energy use to customers who are already energy efficient is still well worth it. The more information people have, the more behavioral changes they will make in the interest of using less energy.
When it comes to trying to encourage customers to make positive behavioral changes on energy use, tech firms and energy companies can leave politics out of the equation. This is good news because making human beings of any ideological bent change their behaviors is already difficult enough.
Because when you inform an American about exactly how much energy they are consuming, it doesn't matter whether they voted for Barack Obama or Mitt Romney. Either way, they want to use less electricity.
Given the news stories about compact fluorescents vs. incandescent light bulbs or hybrid cars vs. sport utility vehicles, this might come as a surprise. However the evidence — as gathered by Opower — backs it up.
The survey examined the energy use habits of customers across party lines (conservative, liberal and unaffiliated) from several regions of the country. The differences between political ideologies and geographical locations were quite close. All saved energy, and it didn't much matter how they were affiliated politically.
In the Mountain West region, liberals saved a little more than others, but only by a single percentage point. In the Northeast and Southeast, conservatives saved a little more than the liberals or the unaffiliated. So, in the end, people will save energy when they participate in programs that inform them of their electricity use, but the exact percentages can vary a bit from place to place.
There is, however, a "backfire" effect the surveyors noticed that is exclusive to conservative users. It seems that when a customer learns they are using less energy than average, the liberal-minded customer will continue doing what they are doing. The conservative-leaning one, however, will sometimes increase their energy use — perhaps feeling they're off the hook. This behavior was not observed in liberals or the unaffiliated.
The reason for this backfire effect was not fully explained by the analysis, but it appears that providing detailed information on energy use to customers who are already energy efficient is still well worth it. The more information people have, the more behavioral changes they will make in the interest of using less energy.
When it comes to trying to encourage customers to make positive behavioral changes on energy use, tech firms and energy companies can leave politics out of the equation. This is good news because making human beings of any ideological bent change their behaviors is already difficult enough.
Monday, May 13, 2013
Springtime for Tesla
In my past couple blog posts, I've written about the electric car market and inventor Nikola Tesla, but I'd be remiss if I didn't take a moment to talk about Telsa Motors and the very big waves the company has been making lately.
Tesla is having a very, very good May so far. Stock prices raised eyebrows on Wall Street, the company turned its first profit, and its first quarter sales have exceeded those of luxury competitors Mercedes-Benz, BMW and Audi.
The cars are not only seen as high-tech and cool, but increasingly they're also viewed as being a smart buy. Personal finance guru Clark Howard owns a Tesla car (he switched from a Nissan Leaf), and Consumer Reports gave the Tesla Model S a near-perfect score, calling it one of the finest cars made since 2007. To be widely accepted by prospective car buyers, electric cars must be seen as practical and reliable to justify their price tags.
So while stock prices might go up and down, the embrace of a magazine like Consumer Reports could be invaluable to Tesla — even more meaningful to the accolades given by Automobile Magazine and Motor Trend in 2012.
By Consumer Reports' math, owning a Tesla is like traveling back to the days when you could buy gas for $1.20 per gallon. The company itself, on its website, touts their vehicle's reasonable cost of ownership. Still, the vehicles themselves remain undeniably expensive (the Model S has a base price of about $62,000), and consumers that don't live in areas with plentiful charging stations still have justifiable concerns about range — even if the cars can take you more than 200 miles per charge, handily beating out other plug-ins that are limited to 75 to 80 miles per charge.
Elon Musk, Telsa's founder and probably the closest thing the planet has to a real-life Tony Stark (the alter ego of Iron Man), is a tech guy first and foremost. Not only did his space travel company SpaceX become the first privately funded company to send a cargo payload to the International Space Station, but Musk's renewable energy company SolarCity is also projecting growth. Going further back, he became a multimillionaire by selling his start-up company PayPal to online auction site EBay for $1.5 billion.
Given that Musk has sold his ideas at top dollar before, there have been rumblings that he might sell off Tesla to a cash-rich, tech-savvy company looking to get into the electric vehicle industry — perhaps even Apple, Inc. Musk, however, says he began Tesla with the goal of mass-marketing an electric car that is affordable. He adds that he will not step away from Tesla until this goal is reached.
What could be limiting factors in Tesla's rise? The loss of government subsidies is one and manufacturing capacity is another. Tesla benefits from manufacturing credits (state and federal) that give breaks to manufacturers of vehicles that produce zero emissions. Should these subsidies and tax breaks be cut or eliminated, Tesla's bottom line would suffer, and the now-soaring stock prices that were fueled by said profitability would likely fall as well.
Furthermore, there's the potential problem of production constraints. According to reports, Tesla is capable of rolling out about 400 cars per week. At this rate, demand is likely to outstrip supply. Now, this might actually be good for a company that markets its products as "cool" and "exclusive," but I don't think Musk has any interest in building EVs just for the super-rich. To succeed in his goal of making the "Model T of electric cars," he'll have to boost his production capacity at some point.
I remember when the Prius had a similar problem. People wanted them, but weren't able to buy them. There were waiting lists for the first couple generations of Prius hybrids, and I think the same thing happened with the Honda Insight. Then again, Tesla is a different kind of company than Toyota or Honda. Everything operates on a much smaller scale.
There is one more thing that could cause trouble for Tesla and other electric vehicle makers in the long term. What if the EV charging infrastructure simply doesn't materialize? Range anxiety remains a problem for people who are the target audience for buying this sort of vehicle, and it is a real problem. As is always the problem in the electricity delivery industry — somebody's got to pay for it.
For the time being, though, there are apparently a lot of people who are willing to pay for an electric car — enough for one company to beat the odds and stand out in a field that has seen so many recent bankruptcies and disappointing sales figures. That alone makes what is happening at Tesla Motors pretty big news, and for the moment at least the electric vehicle market's lone success story.
Tesla is having a very, very good May so far. Stock prices raised eyebrows on Wall Street, the company turned its first profit, and its first quarter sales have exceeded those of luxury competitors Mercedes-Benz, BMW and Audi.
The cars are not only seen as high-tech and cool, but increasingly they're also viewed as being a smart buy. Personal finance guru Clark Howard owns a Tesla car (he switched from a Nissan Leaf), and Consumer Reports gave the Tesla Model S a near-perfect score, calling it one of the finest cars made since 2007. To be widely accepted by prospective car buyers, electric cars must be seen as practical and reliable to justify their price tags.
So while stock prices might go up and down, the embrace of a magazine like Consumer Reports could be invaluable to Tesla — even more meaningful to the accolades given by Automobile Magazine and Motor Trend in 2012.
By Consumer Reports' math, owning a Tesla is like traveling back to the days when you could buy gas for $1.20 per gallon. The company itself, on its website, touts their vehicle's reasonable cost of ownership. Still, the vehicles themselves remain undeniably expensive (the Model S has a base price of about $62,000), and consumers that don't live in areas with plentiful charging stations still have justifiable concerns about range — even if the cars can take you more than 200 miles per charge, handily beating out other plug-ins that are limited to 75 to 80 miles per charge.
Elon Musk, Telsa's founder and probably the closest thing the planet has to a real-life Tony Stark (the alter ego of Iron Man), is a tech guy first and foremost. Not only did his space travel company SpaceX become the first privately funded company to send a cargo payload to the International Space Station, but Musk's renewable energy company SolarCity is also projecting growth. Going further back, he became a multimillionaire by selling his start-up company PayPal to online auction site EBay for $1.5 billion.
Given that Musk has sold his ideas at top dollar before, there have been rumblings that he might sell off Tesla to a cash-rich, tech-savvy company looking to get into the electric vehicle industry — perhaps even Apple, Inc. Musk, however, says he began Tesla with the goal of mass-marketing an electric car that is affordable. He adds that he will not step away from Tesla until this goal is reached.
What could be limiting factors in Tesla's rise? The loss of government subsidies is one and manufacturing capacity is another. Tesla benefits from manufacturing credits (state and federal) that give breaks to manufacturers of vehicles that produce zero emissions. Should these subsidies and tax breaks be cut or eliminated, Tesla's bottom line would suffer, and the now-soaring stock prices that were fueled by said profitability would likely fall as well.
Furthermore, there's the potential problem of production constraints. According to reports, Tesla is capable of rolling out about 400 cars per week. At this rate, demand is likely to outstrip supply. Now, this might actually be good for a company that markets its products as "cool" and "exclusive," but I don't think Musk has any interest in building EVs just for the super-rich. To succeed in his goal of making the "Model T of electric cars," he'll have to boost his production capacity at some point.
I remember when the Prius had a similar problem. People wanted them, but weren't able to buy them. There were waiting lists for the first couple generations of Prius hybrids, and I think the same thing happened with the Honda Insight. Then again, Tesla is a different kind of company than Toyota or Honda. Everything operates on a much smaller scale.
There is one more thing that could cause trouble for Tesla and other electric vehicle makers in the long term. What if the EV charging infrastructure simply doesn't materialize? Range anxiety remains a problem for people who are the target audience for buying this sort of vehicle, and it is a real problem. As is always the problem in the electricity delivery industry — somebody's got to pay for it.
For the time being, though, there are apparently a lot of people who are willing to pay for an electric car — enough for one company to beat the odds and stand out in a field that has seen so many recent bankruptcies and disappointing sales figures. That alone makes what is happening at Tesla Motors pretty big news, and for the moment at least the electric vehicle market's lone success story.
Wednesday, April 10, 2013
What is in Obama's budget for energy?
President Barack Obama's running mate Joe Biden is fond of saying
"show me your budget, and I'll show you where your priorities are."
Media outlets have already begun picking through the wording of the
president's $3.78 trillion 2014 budget to see what is being prioritized
at a time when seemingly every cent of spending results in overheated
press conferences on Capitol Hill and the threat of some catastrophic
government shut-down.
When you look at just one area of the budget, massive at it is, it gets a little easier. So let's see what the budget has to say about energy policy. Here are some highlights:
The budget provides $28.4 billion in discretionary funds for the Department of Energy (DOE) — an 8 percent increase about the 2012 enacted level. This is meant to position the U.S. as a leader in clean energy while boosting energy security.
The budget proposes for $615 million to promote wind, solar, geothermal and hydrokinetic energy.
The document calls for a "Race to the Top" program to promote grid modernization and energy efficiency, which is something Obama mentioned in his most recent State of the Union. The awards would support state-level policies that increase energy productivity and modernize the grid — with the goal of cutting energy waste in half over the next two decades.
Also in the budget is more than $5 billion — 5.7 percent more than 2012 — for energy sector research and development. The need to continue R&D even in difficult economic times is something the present has said repeatedly, so finding it in the budget is perhaps not unexpected.
About $153 million in research and development funding is proposed for grid modernization, cybersecurity and energy control systems. Advances in the technologies and tools for improved clean energy integration onto the grid through an $80 million coordinated effort within the Office of Energy Efficiency and Renewable Energy.
Part of this tranche would include $20 million for a new Electricity Systems Hub, which would explore the interface between transmission and distribution systems in the smart grid context. The budget would support hardware and modeling R&D to improve the integration of renewable energy into the distribution grid, distributed generation, electric vehicles and residential/commercial buildings loads behind the meter.
About $575 million will be invested in alternative vehicle technologies, according to this budget — presumably this goes further than electric vehicles and charging stations, but likely includes both. There is also mention of a $2 billion of proposed mandatory funding for an Energy Security Trust (also mentioned in the State of the Union), intended to transition cars, trucks and other vehicles off of oil (biofuels, hydrogen, natural gas and electricity are specifically mentioned).
The budget provides $735 million for the Office of Nuclear Energy, which includes funding for small modular reactors. There is also $379 million for the Advanced Research Projects Agency — Energy, or ARPA-E, which is the agency that investigates "long game" technologies.
Carbon capture and storage is mentioned in the budget breakdown, with $421 million for the Fossil Energy Research and Development program, including an investment of $266 million in fossil energy R&D primarily dedicated to carbon capture.
The budget eliminates $4 billion yearly in "unnecessary subsidies to the oil, gas and coal industries;" restructuring the plutonium disposition program; cutting low performing programs; and using existing facilities and infrastructure.
In another energy efficiency measure, the budget calls for funding of the president's Better Buildings Initiative, which is meant to help consumers and businesses save money through energy efficiency.
There is $16 million — up from $10 million — in enhanced energy infrastructure security and energy recovery capabilities.
Separate from the DOE funding, the Environmental Protection Agency budget is about $296 million lower than the 2012 level, with the president's budget allocating the EPA $8.2 billion.
When you look at just one area of the budget, massive at it is, it gets a little easier. So let's see what the budget has to say about energy policy. Here are some highlights:
The budget provides $28.4 billion in discretionary funds for the Department of Energy (DOE) — an 8 percent increase about the 2012 enacted level. This is meant to position the U.S. as a leader in clean energy while boosting energy security.
The budget proposes for $615 million to promote wind, solar, geothermal and hydrokinetic energy.
The document calls for a "Race to the Top" program to promote grid modernization and energy efficiency, which is something Obama mentioned in his most recent State of the Union. The awards would support state-level policies that increase energy productivity and modernize the grid — with the goal of cutting energy waste in half over the next two decades.
Also in the budget is more than $5 billion — 5.7 percent more than 2012 — for energy sector research and development. The need to continue R&D even in difficult economic times is something the present has said repeatedly, so finding it in the budget is perhaps not unexpected.
About $153 million in research and development funding is proposed for grid modernization, cybersecurity and energy control systems. Advances in the technologies and tools for improved clean energy integration onto the grid through an $80 million coordinated effort within the Office of Energy Efficiency and Renewable Energy.
Part of this tranche would include $20 million for a new Electricity Systems Hub, which would explore the interface between transmission and distribution systems in the smart grid context. The budget would support hardware and modeling R&D to improve the integration of renewable energy into the distribution grid, distributed generation, electric vehicles and residential/commercial buildings loads behind the meter.
About $575 million will be invested in alternative vehicle technologies, according to this budget — presumably this goes further than electric vehicles and charging stations, but likely includes both. There is also mention of a $2 billion of proposed mandatory funding for an Energy Security Trust (also mentioned in the State of the Union), intended to transition cars, trucks and other vehicles off of oil (biofuels, hydrogen, natural gas and electricity are specifically mentioned).
The budget provides $735 million for the Office of Nuclear Energy, which includes funding for small modular reactors. There is also $379 million for the Advanced Research Projects Agency — Energy, or ARPA-E, which is the agency that investigates "long game" technologies.
Carbon capture and storage is mentioned in the budget breakdown, with $421 million for the Fossil Energy Research and Development program, including an investment of $266 million in fossil energy R&D primarily dedicated to carbon capture.
The budget eliminates $4 billion yearly in "unnecessary subsidies to the oil, gas and coal industries;" restructuring the plutonium disposition program; cutting low performing programs; and using existing facilities and infrastructure.
In another energy efficiency measure, the budget calls for funding of the president's Better Buildings Initiative, which is meant to help consumers and businesses save money through energy efficiency.
There is $16 million — up from $10 million — in enhanced energy infrastructure security and energy recovery capabilities.
Separate from the DOE funding, the Environmental Protection Agency budget is about $296 million lower than the 2012 level, with the president's budget allocating the EPA $8.2 billion.
Tuesday, March 5, 2013
10 facts about Obama's new head of the DOE
After a lot of speculation, the official announcement has been made. Ernest Moniz will be President Barack Obama's main man at the Department of Energy pending approval by the Senate. Here are 10 things worth knowing about Moniz, who will run the DOE during Obama's second term.
1. Moniz is a nuclear physicist by training, and an advocate for the safe use of nuclear power as an energy source. In the aftermath of the Fukushima nuclear disaster, Moniz said it would be a mistake not to pursue a nuclear friendly energy policy in the U.S.
2. Obama is the second president Moniz has worked for. Moniz was President Bill Clinton's undersecretary of the DOE from 1997 to 2001. He also served as an associate director for science in Clinton's Office of Science and Technology Policy.
3. Moniz has a "wait and see" approach to new techniques in natural gas extraction, like "frakking." He says the risks of such techniques are challenging, but manageable. He has also referred to natural gas as a "bridge" fuel that can take the country to a future low-carbon energy portfolio (i.e. Away from coal).
4. Among the issues Moniz has handled at the DOE are: Oversight of science and energy policy, nuclear weapons proliferation and stockpile stewardship, nuclear fuel cycles (including waste disposal) and solar energy in a low-carbon world.
5. In a Washington Post story about carbon capture and storage, Moniz was quoted as saying in 2009 that there is no credible pathway to meeting greenhouse gas reduction targets without cutting carbon dioxide from existing coal-fired power plants.
6. As director of MIT's Energy Initiative, Moniz has some financial ties to the energy industry via the research group's $125 million in donations from the oil and gas industry since 2006, according to reports. Founding members of the organization include BP, Saudi Aramco and Shell.
7. Unlike his predecessor Steven Chu, Moniz will probably have less funding to work with. Chu's tenure at the DOE was marked by the early passage of the American Recovery and Reinvestment Act of 2009, which significantly expanded the department's operating budget.
8. Moniz's grandparents were immigrants to the U.S. who came from the Azores, an archipelago that is an autonomous region of Portugal. He grew up speaking some Portuguese.
9. Moniz serves in Chu's Blue Ribbon Commission on nuclear energy's future, which was tasked with finding new solutions for storing and disposing of nuclear waste. Moniz advocated transferring spent nuclear fuel from pools to dry casks.
10. On solar power, Moniz said he is "bullish," adding, "It just has so many features, including the fact that even though it's intermittent, at least it tends to be on when you want it." He adds, however, that fossil fuels like oil and gas will remain at the forefront of the world's energy picture for the foreseeable future.
1. Moniz is a nuclear physicist by training, and an advocate for the safe use of nuclear power as an energy source. In the aftermath of the Fukushima nuclear disaster, Moniz said it would be a mistake not to pursue a nuclear friendly energy policy in the U.S.
2. Obama is the second president Moniz has worked for. Moniz was President Bill Clinton's undersecretary of the DOE from 1997 to 2001. He also served as an associate director for science in Clinton's Office of Science and Technology Policy.
3. Moniz has a "wait and see" approach to new techniques in natural gas extraction, like "frakking." He says the risks of such techniques are challenging, but manageable. He has also referred to natural gas as a "bridge" fuel that can take the country to a future low-carbon energy portfolio (i.e. Away from coal).
4. Among the issues Moniz has handled at the DOE are: Oversight of science and energy policy, nuclear weapons proliferation and stockpile stewardship, nuclear fuel cycles (including waste disposal) and solar energy in a low-carbon world.
5. In a Washington Post story about carbon capture and storage, Moniz was quoted as saying in 2009 that there is no credible pathway to meeting greenhouse gas reduction targets without cutting carbon dioxide from existing coal-fired power plants.
6. As director of MIT's Energy Initiative, Moniz has some financial ties to the energy industry via the research group's $125 million in donations from the oil and gas industry since 2006, according to reports. Founding members of the organization include BP, Saudi Aramco and Shell.
7. Unlike his predecessor Steven Chu, Moniz will probably have less funding to work with. Chu's tenure at the DOE was marked by the early passage of the American Recovery and Reinvestment Act of 2009, which significantly expanded the department's operating budget.
8. Moniz's grandparents were immigrants to the U.S. who came from the Azores, an archipelago that is an autonomous region of Portugal. He grew up speaking some Portuguese.
9. Moniz serves in Chu's Blue Ribbon Commission on nuclear energy's future, which was tasked with finding new solutions for storing and disposing of nuclear waste. Moniz advocated transferring spent nuclear fuel from pools to dry casks.
10. On solar power, Moniz said he is "bullish," adding, "It just has so many features, including the fact that even though it's intermittent, at least it tends to be on when you want it." He adds, however, that fossil fuels like oil and gas will remain at the forefront of the world's energy picture for the foreseeable future.
Tuesday, January 15, 2013
China's 'airpocalypse' chokes Beijing
China is suffering industrial strength growing pains — particularly in its capital, Beijing, where the air pollution is so bad that the problem can no longer be ignored.
Even the People's Daily, a mouthpiece of the Central Committee of the Communist Party of China, is publicly asking in its editorials for answers to the pollution problem. This is remarkable given the Chinese government's reluctance to address the problem at all in recent years.
The air pollution level in Beijing in the past few days hit levels 25 times worse than what the U.S. government considers safe. In fact, one reason this story rose to a level beyond any government's control was that people started to notice the difference between the air pollution forecasts released by the Chinese government and those tweeted out by the U.S. Embassy in Beijing (see that information here).
(Above: A NASA image shows Beijing's smog is visible from space)
The first time people worldwide began to notice how embarrassed China was of its unfriendly skies was during the 2008 Beijing Olympic Games, when rumors of how the government was covering up its pollution problem abounded. According to some, they shut down power plants and rerouted all power to Beijing while leaving the outlying areas in the dark just to get a few clear-skied days. Others said the athletes had to move in early and practice doing their events while breathing Beijing's air, just to get used to it.
Beijing isn't even the worst-polluted place in China. Other cities reporting high levels of smog are Tianjin and Wuhan City. In total, some 30 major cities and their outlying areas could be affected.
In response to the air crisis, authorities have shut down several major construction projects. One Hyundai Motors plant shut down completely, while others are merely reducing their output. The Beijing Municipal Environmental Monitoring Center has encouraged the elderly, children and those suffering from respiratory ailments to stay indoors and avoid strenuous exercise.
The pollution in question is particulate matter less than 2.5 micrograms in diameter, or "fines," as they are sometimes called in the power generation industry. The primary causes of the smog include tailpipe exhaust, emissions from coal-fired power plants and even the coal-burning heaters that people in poorer areas use to keep warm in China's unusually cold winter this year.
What can China do other than what it has already done? Well, the country has made up its mind to continue building nuclear power plants, which can serve the needs of a power-hungry nation without polluting.
China's roads are filling up with cars, too, so perhaps the country could take a cue from another country that is also growing quickly. India's prime minister recently unveiled his plan to put 7 million electric vehicles on his country's roads. With China's famous manufacturing sector, the country could probably build 7 million cars before lunchtime. (In seriousness, the country only has 5 million vehicles and the process for getting a license to own a car can take years)
When it comes to designing cities, high-rises could be spread out and planners could focus on building greenbelts and planting more trees. More open air would mean more places for the wind to circulate and sweep away some of the smog.
The application of energy efficiency in older buildings could go a long way, as could the installation of scrubbers and other retrofits at coal-fired power plants.
Something has to give, though. What good can come from building huge, glittering cities that you can't safely power? What's the point of becoming an economic superpower whose people can't go outside?
China's government has long been mindful of dissidents, so it's hard to see them not taking this problem seriously. When nobody can breathe easily, it gets harder and harder to get people to look the other way.
As they say, the first step is admitting you have a problem.
Even the People's Daily, a mouthpiece of the Central Committee of the Communist Party of China, is publicly asking in its editorials for answers to the pollution problem. This is remarkable given the Chinese government's reluctance to address the problem at all in recent years.
The air pollution level in Beijing in the past few days hit levels 25 times worse than what the U.S. government considers safe. In fact, one reason this story rose to a level beyond any government's control was that people started to notice the difference between the air pollution forecasts released by the Chinese government and those tweeted out by the U.S. Embassy in Beijing (see that information here).
The first time people worldwide began to notice how embarrassed China was of its unfriendly skies was during the 2008 Beijing Olympic Games, when rumors of how the government was covering up its pollution problem abounded. According to some, they shut down power plants and rerouted all power to Beijing while leaving the outlying areas in the dark just to get a few clear-skied days. Others said the athletes had to move in early and practice doing their events while breathing Beijing's air, just to get used to it.
Beijing isn't even the worst-polluted place in China. Other cities reporting high levels of smog are Tianjin and Wuhan City. In total, some 30 major cities and their outlying areas could be affected.
In response to the air crisis, authorities have shut down several major construction projects. One Hyundai Motors plant shut down completely, while others are merely reducing their output. The Beijing Municipal Environmental Monitoring Center has encouraged the elderly, children and those suffering from respiratory ailments to stay indoors and avoid strenuous exercise.
The pollution in question is particulate matter less than 2.5 micrograms in diameter, or "fines," as they are sometimes called in the power generation industry. The primary causes of the smog include tailpipe exhaust, emissions from coal-fired power plants and even the coal-burning heaters that people in poorer areas use to keep warm in China's unusually cold winter this year.
What can China do other than what it has already done? Well, the country has made up its mind to continue building nuclear power plants, which can serve the needs of a power-hungry nation without polluting.
China's roads are filling up with cars, too, so perhaps the country could take a cue from another country that is also growing quickly. India's prime minister recently unveiled his plan to put 7 million electric vehicles on his country's roads. With China's famous manufacturing sector, the country could probably build 7 million cars before lunchtime. (In seriousness, the country only has 5 million vehicles and the process for getting a license to own a car can take years)
When it comes to designing cities, high-rises could be spread out and planners could focus on building greenbelts and planting more trees. More open air would mean more places for the wind to circulate and sweep away some of the smog.
The application of energy efficiency in older buildings could go a long way, as could the installation of scrubbers and other retrofits at coal-fired power plants.
Something has to give, though. What good can come from building huge, glittering cities that you can't safely power? What's the point of becoming an economic superpower whose people can't go outside?
China's government has long been mindful of dissidents, so it's hard to see them not taking this problem seriously. When nobody can breathe easily, it gets harder and harder to get people to look the other way.
As they say, the first step is admitting you have a problem.
Friday, January 4, 2013
Energy stats to remember
Every now and then I like to be able to raise eyebrows with an impressive, unexpected or otherwise ... well, eyebrow-raising fact about energy. The people over at OPower shared a list they compiled with me, and I wanted to pass them on to you. Maybe you'll find one or two of them worth passing on.
The increase in power generation capacity from natural gas-fired power plants in the U.S. between 2000 and 2012: More than 96 percent.
As previously predicted on this blog, the dash for gas is a trend many energy analyists expect to see continue into 2013 and beyond.
In April 2012, for the first time ever in the U.S., the amount of power generated from natural gas was equal to that generated from coal. Because of low prices and other factors, natural gas is on the rise and coal is on the decline. Even given all of that, this is a statistic I wouldn't have easily guessed.
The annual cost of charging an iPhone 5: $0.41
I'm kind of surprised that Apple doesn't talk about this. I would. Then again, when it comes to getting people to want to buy their stuff, Apple has never had a problem with that at all. But still, that's pretty impressive. You can't buy much for four dimes and a penny, so to find out that gives your iPhone a year's worth of juice for that amount is surprising.
The year that the United States will become the world's largest producer of oil: 2017
"Drill here, drill now" say the bumper stickers. Well, we actually do quite a bit of drilling here and now. So much so, in fact, that the U.S. is giving Saudi Arabia a run for its money. And America beating the Saudis at drilling oil is a bit like beating Canada at hockey. It's kind of their thing.
The consequences of this trend are obvious. The U.S. gets to brag that it is less reliant on foreign oil than ever before. This has been a goal of every president since Richard Nixon, and one it felt like we'd never make any real progress on. But we have managed already to become a net exporter of petroleum, and we did it with expanded drilling, new technology and energy efficiency.
2012's rank in the list of the warmest years ever recorded in the continental United States: No. 1
I am writing this blog from Tulsa, Oklahoma. And nobody knows this fact better than we Oklahomans. Except perhaps Texans. During the summer we were trapped in a cruel heat bubble, and we had a winter that wasn't a winter.
Me personally, I'd rather be hot than cold, and part of me enjoyed a winter that was more cool than cold, but it is creepy to see weather act this way. Especially when storm season rolls around. Watching the damaging hurricanes and hybrid "Frankenstorms" of the past year have made more people than yours truly wonder whether "once in a lifetime" weather is the new normal.
The average miles per gallon of new cars sold in the first half of 2012 in the U.S.: 23.8 MPG
Consumers rank fuel economy as the first question they ask a car salesman about, and no wonder with fuel prices being what they are. But high gas prices and consumer demand is only one factor. Government action is another. Congress passed new CAFE standards in 2007. The measures of this law are now taking effect and the average fuel economy of a car is expected to rise to 35.5 MPG by 2016.
The proportion of U.S. households that have a smart meter installed: 1 in 3
The number of smart meters deployed in the U.S. has increased fivefold in just five years. Utilities love them because they provide the two-way communication that helps them in so many different ways, and some consumers like them too because they can make billing easier and make sure they don't pay too much for the electricity they use.
By mid-decade, it's predicted that half of U.S. households will have a smart meter installed. Economists foresee that the world smart meter market could grow to $34 billion in spending from 2012 to 2020.
The number of new nuclear reactors in the U.S. that were granted licenses in 2012: 2
These were, of course, the first new licenses granted to any nuclear reactor in the U.S. since 1978. For fans of nuclear energy, this is an exciting number. Perhaps even more exciting than that is the number of new nuclear reactors currently under consideration by the Nuclear Regulatory Commission: 16 other plants across the country have applications with the NRC to build 25 new reactors.
The number of nuclear reactors that Japan has announced it will close by 2040: 50
Likewise, if you're not a fan of nuclear energy, here's a statistic that should be important to you. Japan is, by and large, getting out of the nuclear power industry when it used to be at the forefront of the science of nuclear energy. A surprising development that few would have predicted a few years back, when many were talking about a worldwide nuclear renaissance. If there is a nuclear renaissance, it doesn't look like it will be happening in Japan. It's not looking too good in Germany, Switzerland or France, either.
The percentage of energy that is wasted in the U.S. every year: 56.2 percent
That's right, the U.S. wastes more energy than it uses. Despite recent advances in the world of energy efficiency, we are still a deeply inefficient country when it comes to what we do with our energy once it's generated. Of the 97.3 quadrillion British Thermal Units of raw energy that the U.S. generates, only 41.7 were used constructively. Most of this wastage has to do with how we generate energy in the first place. Most power plants are inherently inefficient. As is our transportation sector, even though it is becoming more efficient.
Thanks again to OPower for helping gather these facts.
The increase in power generation capacity from natural gas-fired power plants in the U.S. between 2000 and 2012: More than 96 percent.
As previously predicted on this blog, the dash for gas is a trend many energy analyists expect to see continue into 2013 and beyond.
In April 2012, for the first time ever in the U.S., the amount of power generated from natural gas was equal to that generated from coal. Because of low prices and other factors, natural gas is on the rise and coal is on the decline. Even given all of that, this is a statistic I wouldn't have easily guessed.
The annual cost of charging an iPhone 5: $0.41
I'm kind of surprised that Apple doesn't talk about this. I would. Then again, when it comes to getting people to want to buy their stuff, Apple has never had a problem with that at all. But still, that's pretty impressive. You can't buy much for four dimes and a penny, so to find out that gives your iPhone a year's worth of juice for that amount is surprising.
The year that the United States will become the world's largest producer of oil: 2017
"Drill here, drill now" say the bumper stickers. Well, we actually do quite a bit of drilling here and now. So much so, in fact, that the U.S. is giving Saudi Arabia a run for its money. And America beating the Saudis at drilling oil is a bit like beating Canada at hockey. It's kind of their thing.
The consequences of this trend are obvious. The U.S. gets to brag that it is less reliant on foreign oil than ever before. This has been a goal of every president since Richard Nixon, and one it felt like we'd never make any real progress on. But we have managed already to become a net exporter of petroleum, and we did it with expanded drilling, new technology and energy efficiency.
2012's rank in the list of the warmest years ever recorded in the continental United States: No. 1
I am writing this blog from Tulsa, Oklahoma. And nobody knows this fact better than we Oklahomans. Except perhaps Texans. During the summer we were trapped in a cruel heat bubble, and we had a winter that wasn't a winter.
Me personally, I'd rather be hot than cold, and part of me enjoyed a winter that was more cool than cold, but it is creepy to see weather act this way. Especially when storm season rolls around. Watching the damaging hurricanes and hybrid "Frankenstorms" of the past year have made more people than yours truly wonder whether "once in a lifetime" weather is the new normal.
The average miles per gallon of new cars sold in the first half of 2012 in the U.S.: 23.8 MPG
Consumers rank fuel economy as the first question they ask a car salesman about, and no wonder with fuel prices being what they are. But high gas prices and consumer demand is only one factor. Government action is another. Congress passed new CAFE standards in 2007. The measures of this law are now taking effect and the average fuel economy of a car is expected to rise to 35.5 MPG by 2016.
The proportion of U.S. households that have a smart meter installed: 1 in 3
The number of smart meters deployed in the U.S. has increased fivefold in just five years. Utilities love them because they provide the two-way communication that helps them in so many different ways, and some consumers like them too because they can make billing easier and make sure they don't pay too much for the electricity they use.
By mid-decade, it's predicted that half of U.S. households will have a smart meter installed. Economists foresee that the world smart meter market could grow to $34 billion in spending from 2012 to 2020.
The number of new nuclear reactors in the U.S. that were granted licenses in 2012: 2
These were, of course, the first new licenses granted to any nuclear reactor in the U.S. since 1978. For fans of nuclear energy, this is an exciting number. Perhaps even more exciting than that is the number of new nuclear reactors currently under consideration by the Nuclear Regulatory Commission: 16 other plants across the country have applications with the NRC to build 25 new reactors.
The number of nuclear reactors that Japan has announced it will close by 2040: 50
Likewise, if you're not a fan of nuclear energy, here's a statistic that should be important to you. Japan is, by and large, getting out of the nuclear power industry when it used to be at the forefront of the science of nuclear energy. A surprising development that few would have predicted a few years back, when many were talking about a worldwide nuclear renaissance. If there is a nuclear renaissance, it doesn't look like it will be happening in Japan. It's not looking too good in Germany, Switzerland or France, either.
The percentage of energy that is wasted in the U.S. every year: 56.2 percent
That's right, the U.S. wastes more energy than it uses. Despite recent advances in the world of energy efficiency, we are still a deeply inefficient country when it comes to what we do with our energy once it's generated. Of the 97.3 quadrillion British Thermal Units of raw energy that the U.S. generates, only 41.7 were used constructively. Most of this wastage has to do with how we generate energy in the first place. Most power plants are inherently inefficient. As is our transportation sector, even though it is becoming more efficient.
Thanks again to OPower for helping gather these facts.
Monday, December 17, 2012
2013 trends for the power industry
Even if the Mayans are wrong about the world ending, there isn't much left of 2012. So before we all rush off to relatives' houses or office holiday parties, let's take some time to consider the year ahead and what it might hold for the electric utility industry.
I had the opportunity recently to ask a few quick questions to Andre Begosso, managing director of Accenture's Utilities North America strategy practice. Thanks to Andre's expertise, we can flesh out what might happen in the coming weeks and months.
Trend No. 1: The "Dash for Gas" will continue, but don't count coal out
This year, hydraulic fracking and other developments in fossil fuel extraction have tipped the scales in favor of natural gas, thus leading power companies to exploit the record low prices of natural gas-fired generation. Andre said he expects this trend to continue into 2013.
"The price of gas will continue to fluctuate and there is a reason for that," he said. "Price is driven by marginal demand, which in turn is driven mostly by the power generation sector."
Along with the Dash for Gas, another phrase that gained notoriety was the "War on Coal." Energy lobbyists and politicians from coal-producing countries have been among those who claim that the president, the EPA and Congress have it in for coal and are putting the industry at risk deliberately. For his part though, Andre said he doesn't buy this hype.
"The price of gas is the single biggest pressure on the coal sector," he said. "Worse than any regulation or legislation from the government."
Regardless of why coal is feeling the pinch, though, there will always be a need for the baseload power it provides, he said.
"Even in the best case scenarios, we don't have enough gas to completely replace coal," he said. "Not only that, but we have some upcoming technologies currently under development that will allow us to use less coal. Coal will never go away."
Trend No. 2: Utilities get back to their bread and butter
With the American Recovery and Reinvestment Act funding spent and Congress not in a spending mood, I wondered where smart grid pilot programs and smart meter rollouts were going to get their funding. "The ratepayers," predicts Andre.
"In terms of the smart grid, there was a wave of construction, and now people are getting better at applying the technology. We will continue to learn more about how to apply it and how to keep the technology viable," he said.
Some of the more exotic technologies, such as energy storage, that have yet to be firmly proven in the field, utilities will take a rain check on — waiting to see how the technologies evolve over time.
"Utilities will continue to invest in their bread and butter technologies, like AMI. There is no reason for them not to invest in those," he said.
Trend No. 3: Has renewable energy deployment hit a peak?
FERC announced what I thought were some surprising numbers about renewable generation. Biomass, geothermal, solar, wind and hydropower, taken together, accounted for more than 41 percent of new generation put online in the U.S. in 2012.
This is thanks to a variety of factors, Andre said. Government support, in the form of the production tax credit, is one factor, as are state-level renewable portfolio standards.
"A lot of states have a looming 2015 deadline to meet their portfolio standards. Michigan is one of them. So they needed to meet those standards," he said.
In the absence of some major advance in energy storage, Andre said, he expects that renewable energy installation will probably start to slow as its shortcomings become more apparent to utilities and power companies.
"I would not expect these trends to continue because of the tremendous limitation that renewable technologies have. You cannot break the laws of physics or the laws of chemistry. The wind doesn't blow all the time and it never will, and the sun doesn't always shine and it never will," he said.
Trend No. 4: Energy back on the agenda
In my last blog post, I speculated about what it might take to get energy policy back on the agenda. When I asked about this, Andre said energy already is back on the agenda.
"Over the next 3 years, over $220 billion in new infrastructure will be built. But the problem with infrastructure is Rome wasn't built in a day. It takes time," he said.
This new wave of infrastructure upgrades will require a level of patience and understanding on the part of ratepayers that Andre wonders whether the average person is capable of. During Hurricane Sandy, for example, Con Edison had one of the most sophisticated electric grids available — yet it still failed, and people wonder why.
"As much as people hate outages, I don't think they understand them," he said. "If we had to build everything to withstand every possible disaster that could happen, it would never be built. It would be too expensive."
As far as utilities are concerned in this, Andre compares adopting new infrastructure improvements to how consumers usually approach the release of flashy new electronic gizmos.
"Remember when BluRay players were $400? Some people did pay for them, but the average Joe looked at it and said, 'Well, I can still watch movies on my old DVD player.' The infrastructure problem isn't much different from that."
Trend No 5: Growth opportunities will come from new start-ups
Maybe one of the biggest long-term changes the utility industry has ever seen is the reversal of the status quo of energy use. Energy companies are realizing they have a vested interest in getting customers to use less of their product, and this trend in turn is leading to a market for all kinds of consumer gadgets that will help people use less energy.
"The regulatory model of the U.S. was built around capital. The underlying assumption was we'd always have growth and we'd always consume more energy," he said. "What we may see in the future is that assumption might not be true... If you have a good understanding of the way the market works, you will be successful."
Small start-up companies that have a good idea and a way to market it might make a bigger splash in the energy sector with it comes to growth than the older, more established players.
"I just got a new smart thermostat called the Nest, and it's one of the coolest things I've ever bought," he said. "I installed it myself and I'm not a very handy person."
My thanks to Andre Begosso for his help with this post. Andre is a managing director in the Accenture management consulting practice and is focused on the resources operating group. He has more than seventeen years of experience in the utility and energy industries and advises clients in the alternative energy, power generation and oil and gas sectors. Andre has a B.S. in industrial engineering from the university of Sao Paulo, Brazil and an MBA from the Ross School of Business at the University of Michigan.
I had the opportunity recently to ask a few quick questions to Andre Begosso, managing director of Accenture's Utilities North America strategy practice. Thanks to Andre's expertise, we can flesh out what might happen in the coming weeks and months.
Trend No. 1: The "Dash for Gas" will continue, but don't count coal out
This year, hydraulic fracking and other developments in fossil fuel extraction have tipped the scales in favor of natural gas, thus leading power companies to exploit the record low prices of natural gas-fired generation. Andre said he expects this trend to continue into 2013.
"The price of gas will continue to fluctuate and there is a reason for that," he said. "Price is driven by marginal demand, which in turn is driven mostly by the power generation sector."
Along with the Dash for Gas, another phrase that gained notoriety was the "War on Coal." Energy lobbyists and politicians from coal-producing countries have been among those who claim that the president, the EPA and Congress have it in for coal and are putting the industry at risk deliberately. For his part though, Andre said he doesn't buy this hype.
"The price of gas is the single biggest pressure on the coal sector," he said. "Worse than any regulation or legislation from the government."
Regardless of why coal is feeling the pinch, though, there will always be a need for the baseload power it provides, he said.
"Even in the best case scenarios, we don't have enough gas to completely replace coal," he said. "Not only that, but we have some upcoming technologies currently under development that will allow us to use less coal. Coal will never go away."
Trend No. 2: Utilities get back to their bread and butter
With the American Recovery and Reinvestment Act funding spent and Congress not in a spending mood, I wondered where smart grid pilot programs and smart meter rollouts were going to get their funding. "The ratepayers," predicts Andre.
"In terms of the smart grid, there was a wave of construction, and now people are getting better at applying the technology. We will continue to learn more about how to apply it and how to keep the technology viable," he said.
Some of the more exotic technologies, such as energy storage, that have yet to be firmly proven in the field, utilities will take a rain check on — waiting to see how the technologies evolve over time.
"Utilities will continue to invest in their bread and butter technologies, like AMI. There is no reason for them not to invest in those," he said.
Trend No. 3: Has renewable energy deployment hit a peak?
FERC announced what I thought were some surprising numbers about renewable generation. Biomass, geothermal, solar, wind and hydropower, taken together, accounted for more than 41 percent of new generation put online in the U.S. in 2012.
This is thanks to a variety of factors, Andre said. Government support, in the form of the production tax credit, is one factor, as are state-level renewable portfolio standards.
"A lot of states have a looming 2015 deadline to meet their portfolio standards. Michigan is one of them. So they needed to meet those standards," he said.
In the absence of some major advance in energy storage, Andre said, he expects that renewable energy installation will probably start to slow as its shortcomings become more apparent to utilities and power companies.
"I would not expect these trends to continue because of the tremendous limitation that renewable technologies have. You cannot break the laws of physics or the laws of chemistry. The wind doesn't blow all the time and it never will, and the sun doesn't always shine and it never will," he said.
Trend No. 4: Energy back on the agenda
In my last blog post, I speculated about what it might take to get energy policy back on the agenda. When I asked about this, Andre said energy already is back on the agenda.
"Over the next 3 years, over $220 billion in new infrastructure will be built. But the problem with infrastructure is Rome wasn't built in a day. It takes time," he said.
This new wave of infrastructure upgrades will require a level of patience and understanding on the part of ratepayers that Andre wonders whether the average person is capable of. During Hurricane Sandy, for example, Con Edison had one of the most sophisticated electric grids available — yet it still failed, and people wonder why.
"As much as people hate outages, I don't think they understand them," he said. "If we had to build everything to withstand every possible disaster that could happen, it would never be built. It would be too expensive."
As far as utilities are concerned in this, Andre compares adopting new infrastructure improvements to how consumers usually approach the release of flashy new electronic gizmos.
"Remember when BluRay players were $400? Some people did pay for them, but the average Joe looked at it and said, 'Well, I can still watch movies on my old DVD player.' The infrastructure problem isn't much different from that."
Trend No 5: Growth opportunities will come from new start-ups
Maybe one of the biggest long-term changes the utility industry has ever seen is the reversal of the status quo of energy use. Energy companies are realizing they have a vested interest in getting customers to use less of their product, and this trend in turn is leading to a market for all kinds of consumer gadgets that will help people use less energy.
"The regulatory model of the U.S. was built around capital. The underlying assumption was we'd always have growth and we'd always consume more energy," he said. "What we may see in the future is that assumption might not be true... If you have a good understanding of the way the market works, you will be successful."
Small start-up companies that have a good idea and a way to market it might make a bigger splash in the energy sector with it comes to growth than the older, more established players.
"I just got a new smart thermostat called the Nest, and it's one of the coolest things I've ever bought," he said. "I installed it myself and I'm not a very handy person."
My thanks to Andre Begosso for his help with this post. Andre is a managing director in the Accenture management consulting practice and is focused on the resources operating group. He has more than seventeen years of experience in the utility and energy industries and advises clients in the alternative energy, power generation and oil and gas sectors. Andre has a B.S. in industrial engineering from the university of Sao Paulo, Brazil and an MBA from the Ross School of Business at the University of Michigan.
Thursday, November 15, 2012
What will it take to get energy on the agenda?
The elections are over, the White House successfully defended by the incumbent and neither the House nor the Senate changed hands. Now reporters on the Hill and in the White House Press Corps are asking their questions about what will be on the agenda for the next four years.
Those of us in the utility and energy sector are wondering — and I hope we're not the only ones — whether energy policy will have any space at all on that agenda.
If you want to know what will be on the agenda, look at what the winner ran on. President Barack Obama and Gov. Mitt Romney's campaign was mostly about taxes, the economy and the role of government — although there were frequent detours into the realms of foreign policy, education and immigration reform.
Energy, when it was mentioned at all, was colored in extremely broad strokes. National politicians seldom get much more specific than the standard lines about energy independence, and the latest buzz phrase appears to be advocating for an "all of the above" energy strategy.
Talking in broad strokes, though, never seems to produce a broad-based, holistic energy strategy that addresses how we generate, deliver and consume electricity. If we want to address the problems we face in this area, we have to get specific.
A complete energy policy would need to take a stand on what our generation mix would be. Where would we get our power from, beginning with what we have work with in the first place? It would need to address the fact that we still use an energy delivery system that Thomas Edison would recognize, were he alive today. How can we improve on that? Finally, our energy policy would need to make investments in the future — not in a way that attempts to pick winners or losers, but instead makes educated guesses at where we could get the most bang for our buck from promising new research areas.
Those of us in the energy arena already know what we need to do, but our friends (if any) in the political arena would tell us it's a matter of political will and ability. As I said before, if you want to know what will be on the agenda, look at who won, consider how much they won by and remember what they talked about before they won.
In this case, Obama won. Again, and by more than 120 electoral votes and all but one or two of the swing states. And he won without talking about energy frequently or specifically. Apparently he (and voters) felt he didn't need to address that subject in any great depth. When his opponent, Gov. Romney, mentioned energy, it was to express his fondness for coal and nuclear energy, or else to name-check Solyndra. There isn't much sign from exit polls that people who didn't vote for Obama made that choice because he wasn't talking about energy issues.
In all likelihood, this means budget battles and possibly immigration reform will probably take the front seat for the next couple of years as Congress handles the fiscal cliff and Republicans and Democrats attempt to find a pathway to citizenship for illegal immigrants that everyone can live with. Or maybe I'm being too optimistic. One thing I'm less optimistic of is politicians spending much time on energy.
So what would it take? I'm trying to envision a scenario in which energy becomes the No. 1 issue in American politics and coming up short. We just had a major blackout scenario with Superstorm Sandy and that didn't do it. Neither did the worst nuclear disaster since Chernobyl. Nothing seems to get people talking about energy, even though this is such an exciting time to be talking about it.
As I was working on this blog, I saw a report that White House Press Secretary Jay Carney told reporters, "We would never propose a carbon tax." It wasn't too long ago that a cap-and-trade bill was working its way through Congress — it passed the House before languishing and dying in the Senate. Cap and trade, itself a Republican idea originally, lost its luster in the highly partisan, budget-preoccupied atmosphere of Obama's first term.
Are there still some brief flickers of hope for a dialogue on energy? Well, I thought it was telling that in his election night address in Chicago, President Obama made a pretty direct reference to climate change — no doubt still thinking about the previous week's storm recovery effort along the East Coast. Although few are willing to point to a single storm and say, "This is climate change," it's hard to watch a storm of Sandy's sheer scale unfold without wondering if this kind of weather is here to stay.
In the end, I'm not sure what it will take to get energy back on the agenda. There are plenty of worthy approaches and plenty of policies Congress, the EPA and others could look into, but it feels like the will just isn't there, or else it's gone anemic in the past few years.
Those of us in the utility and energy sector are wondering — and I hope we're not the only ones — whether energy policy will have any space at all on that agenda.
If you want to know what will be on the agenda, look at what the winner ran on. President Barack Obama and Gov. Mitt Romney's campaign was mostly about taxes, the economy and the role of government — although there were frequent detours into the realms of foreign policy, education and immigration reform.
Energy, when it was mentioned at all, was colored in extremely broad strokes. National politicians seldom get much more specific than the standard lines about energy independence, and the latest buzz phrase appears to be advocating for an "all of the above" energy strategy.
Talking in broad strokes, though, never seems to produce a broad-based, holistic energy strategy that addresses how we generate, deliver and consume electricity. If we want to address the problems we face in this area, we have to get specific.
A complete energy policy would need to take a stand on what our generation mix would be. Where would we get our power from, beginning with what we have work with in the first place? It would need to address the fact that we still use an energy delivery system that Thomas Edison would recognize, were he alive today. How can we improve on that? Finally, our energy policy would need to make investments in the future — not in a way that attempts to pick winners or losers, but instead makes educated guesses at where we could get the most bang for our buck from promising new research areas.
Those of us in the energy arena already know what we need to do, but our friends (if any) in the political arena would tell us it's a matter of political will and ability. As I said before, if you want to know what will be on the agenda, look at who won, consider how much they won by and remember what they talked about before they won.
In this case, Obama won. Again, and by more than 120 electoral votes and all but one or two of the swing states. And he won without talking about energy frequently or specifically. Apparently he (and voters) felt he didn't need to address that subject in any great depth. When his opponent, Gov. Romney, mentioned energy, it was to express his fondness for coal and nuclear energy, or else to name-check Solyndra. There isn't much sign from exit polls that people who didn't vote for Obama made that choice because he wasn't talking about energy issues.
In all likelihood, this means budget battles and possibly immigration reform will probably take the front seat for the next couple of years as Congress handles the fiscal cliff and Republicans and Democrats attempt to find a pathway to citizenship for illegal immigrants that everyone can live with. Or maybe I'm being too optimistic. One thing I'm less optimistic of is politicians spending much time on energy.
So what would it take? I'm trying to envision a scenario in which energy becomes the No. 1 issue in American politics and coming up short. We just had a major blackout scenario with Superstorm Sandy and that didn't do it. Neither did the worst nuclear disaster since Chernobyl. Nothing seems to get people talking about energy, even though this is such an exciting time to be talking about it.
As I was working on this blog, I saw a report that White House Press Secretary Jay Carney told reporters, "We would never propose a carbon tax." It wasn't too long ago that a cap-and-trade bill was working its way through Congress — it passed the House before languishing and dying in the Senate. Cap and trade, itself a Republican idea originally, lost its luster in the highly partisan, budget-preoccupied atmosphere of Obama's first term.
Are there still some brief flickers of hope for a dialogue on energy? Well, I thought it was telling that in his election night address in Chicago, President Obama made a pretty direct reference to climate change — no doubt still thinking about the previous week's storm recovery effort along the East Coast. Although few are willing to point to a single storm and say, "This is climate change," it's hard to watch a storm of Sandy's sheer scale unfold without wondering if this kind of weather is here to stay.
In the end, I'm not sure what it will take to get energy back on the agenda. There are plenty of worthy approaches and plenty of policies Congress, the EPA and others could look into, but it feels like the will just isn't there, or else it's gone anemic in the past few years.
Thursday, October 18, 2012
Obama, Romney talk about energy, with energy
President Barack Obama and former Gov. Mitt Romney faced off at New York
State's Hofstra University October 17 with polls tightening and each
man eager to make their appeals to the country's remaining undecided
voters still available in the 2012 election's last few weeks.
While the first presidential debate saw little mention of energy as an issue — with Romney briefly mentioning government subsidies to green energy firms, like the bankrupt Solyndra — this debate had the candidates talking energy both frequently and early on in the proceedings.
Last night, a member of the town hall audience broached the topic of energy costs with a question about gas prices and plans to lower them. He said Obama's secretary of Energy, Stephen Chu, has said it is not the policy of the DOE to help lower gas prices, and asked Obama directly if he agreed. Obama responded to this question by talking about the production of oil, coal and natural gas.
The president said that while production of fossil fuels is up, the country must also invest in wind power, solar power and biofuels, as well as make vehicles that burn less gas.
On natural gas, Obama said, "We've got potentially 600,000 jobs and 100 years worth of energy right beneath our feet with natural gas. And we can do it in an environmentally friendly way, but we have got to continue to figure out how we can get efficient energy because that is how we can reduce demand and that is what's going to keep gas prices lower."
Both candidates tried to claim the mantle of an "all of the above" energy policy, which has become a bit of a catchphrase for both parties of late. Obama said Romney's plan is not all-of-the-above because he would let "oil companies write the energy policies."
"So he's got the oil and gas part, but not the clean energy part," Obama said. "China and Germany are making these clean energy investments, and I'm not going to cede those jobs of the future to those countries. I expect those new energy sources to be built right here in the United States."
"I want to make sure we use our oil, our coal, our gas, our nuclear, our renewables. I believe very much in our renewable capabilities. Ethanol, wind, solar will all be an important part of our energy mix," Romney said. "But what we don't need is to have the president keeping us from taking advantage of oil, coal and gas."
Building a coal-fired power plant in specific, Romney said, is nearly impossible to do under current regulations — hinting that this is by the design of Obama's EPA.
Obama countered this charge by saying that as governor of Massachusetts, Romney "took great pride" in shutting down a coal plant.
"You stood in front of a coal plant and pointed at it and said, 'This plant kills,'" Obama said.
According to the Tampa Bay Times' PolitiFact, the plant Obama referred to was the Salem Harbor Power Station, which was then owned by Pacific Gas & Electric. The four-unit coal-burning plant had been ranked as one of the "Filthy Five" plants by an environmental group and as the newly elected governor, Romney decided not to support a plan to grant the plant an extension to comply with emissions rules. At a videotaped press conference, Romney said, "I will not create jobs or hold jobs that kill people, and that plant — that plant kills people."
Obama went on to say that his administration invested in "clean coal" technology.
CNN reporter Candy Crowley, who served as moderator, asked whether the price of gas be meaningfully addressed by an American president at all, or are per-gallon prices hovering around $4 the "new normal," Crowley wanted to know.
The subject went back to oil production, where Romney said production on public land had dropped by 14 percent this year, which sparked a testy exchange and back-and-forth denials.
Apparently both men decided that the sure-fire winner was talking about gas prices — with Obama defending his record and talking about production, and Romney in turn saying the strategy hasn't worked because of the price you pay at the pump.
While there was occasional name-checking of wind or solar, this debate's energy talk was almost limited to fossil fuels, though. The energy we feed into the grid by burning fossil fuels wasn't talked about much by either candidate, and nobody said a word about energy infrastructure, grid cybersecurity or the smart grid.
It wasn't too much to hope for either. I have heard this president say the words "smart grid" before, even though many voters might not yet know what it means. Romney, I'm sure, is aware of these technologies too, having helped manage the finances of high-tech companies in his private asset management days.
I wish "energy" in the context of a political debate could occasionally mean something more than "gas prices" though.
It was a town hall style debate, and time was limited however. According to at least one report, Crowley had a question on climate change in her pocket that she never got around to asking. That could have potentially yielded some thought-provoking statements. Maybe if there had been a bit less crosstalk on the floor, she could have gotten to it.
There is still one more debate, but it will primarily concern foreign policy. This debate, then, was probably the last time energy policy could conceivably have been brought up in any great detail — at least with both the president and the governor in the same room.
If you want to know where these candidates stand on energy issues, it looks like you're going to have to do a little digging.
For more on Romney and Obama's respective energy plans, see Jennifer Van Burkleo's story from the September-October issue of Electric Light & Power magazine.
And please, don't forget to vote — Nov. 6, or earlier if your state allows it.
While the first presidential debate saw little mention of energy as an issue — with Romney briefly mentioning government subsidies to green energy firms, like the bankrupt Solyndra — this debate had the candidates talking energy both frequently and early on in the proceedings.
Last night, a member of the town hall audience broached the topic of energy costs with a question about gas prices and plans to lower them. He said Obama's secretary of Energy, Stephen Chu, has said it is not the policy of the DOE to help lower gas prices, and asked Obama directly if he agreed. Obama responded to this question by talking about the production of oil, coal and natural gas.
The president said that while production of fossil fuels is up, the country must also invest in wind power, solar power and biofuels, as well as make vehicles that burn less gas.
On natural gas, Obama said, "We've got potentially 600,000 jobs and 100 years worth of energy right beneath our feet with natural gas. And we can do it in an environmentally friendly way, but we have got to continue to figure out how we can get efficient energy because that is how we can reduce demand and that is what's going to keep gas prices lower."
Both candidates tried to claim the mantle of an "all of the above" energy policy, which has become a bit of a catchphrase for both parties of late. Obama said Romney's plan is not all-of-the-above because he would let "oil companies write the energy policies."
"So he's got the oil and gas part, but not the clean energy part," Obama said. "China and Germany are making these clean energy investments, and I'm not going to cede those jobs of the future to those countries. I expect those new energy sources to be built right here in the United States."
"I want to make sure we use our oil, our coal, our gas, our nuclear, our renewables. I believe very much in our renewable capabilities. Ethanol, wind, solar will all be an important part of our energy mix," Romney said. "But what we don't need is to have the president keeping us from taking advantage of oil, coal and gas."
Building a coal-fired power plant in specific, Romney said, is nearly impossible to do under current regulations — hinting that this is by the design of Obama's EPA.
Obama countered this charge by saying that as governor of Massachusetts, Romney "took great pride" in shutting down a coal plant.
"You stood in front of a coal plant and pointed at it and said, 'This plant kills,'" Obama said.
According to the Tampa Bay Times' PolitiFact, the plant Obama referred to was the Salem Harbor Power Station, which was then owned by Pacific Gas & Electric. The four-unit coal-burning plant had been ranked as one of the "Filthy Five" plants by an environmental group and as the newly elected governor, Romney decided not to support a plan to grant the plant an extension to comply with emissions rules. At a videotaped press conference, Romney said, "I will not create jobs or hold jobs that kill people, and that plant — that plant kills people."
Obama went on to say that his administration invested in "clean coal" technology.
CNN reporter Candy Crowley, who served as moderator, asked whether the price of gas be meaningfully addressed by an American president at all, or are per-gallon prices hovering around $4 the "new normal," Crowley wanted to know.
The subject went back to oil production, where Romney said production on public land had dropped by 14 percent this year, which sparked a testy exchange and back-and-forth denials.
Apparently both men decided that the sure-fire winner was talking about gas prices — with Obama defending his record and talking about production, and Romney in turn saying the strategy hasn't worked because of the price you pay at the pump.
While there was occasional name-checking of wind or solar, this debate's energy talk was almost limited to fossil fuels, though. The energy we feed into the grid by burning fossil fuels wasn't talked about much by either candidate, and nobody said a word about energy infrastructure, grid cybersecurity or the smart grid.
It wasn't too much to hope for either. I have heard this president say the words "smart grid" before, even though many voters might not yet know what it means. Romney, I'm sure, is aware of these technologies too, having helped manage the finances of high-tech companies in his private asset management days.
I wish "energy" in the context of a political debate could occasionally mean something more than "gas prices" though.
It was a town hall style debate, and time was limited however. According to at least one report, Crowley had a question on climate change in her pocket that she never got around to asking. That could have potentially yielded some thought-provoking statements. Maybe if there had been a bit less crosstalk on the floor, she could have gotten to it.
There is still one more debate, but it will primarily concern foreign policy. This debate, then, was probably the last time energy policy could conceivably have been brought up in any great detail — at least with both the president and the governor in the same room.
If you want to know where these candidates stand on energy issues, it looks like you're going to have to do a little digging.
For more on Romney and Obama's respective energy plans, see Jennifer Van Burkleo's story from the September-October issue of Electric Light & Power magazine.
And please, don't forget to vote — Nov. 6, or earlier if your state allows it.
Thursday, September 13, 2012
Land of the rising sun runs increasingly on solar power
UPDATE: Shortly after this blog was written, Reuters reported
that Japan will shortly introduce a plan to wean itself off of nuclear
energy entirely by as soon as 2030. This development will doubtless
result in an entirely new energy policy and eventually an entirely new
generation mix for the country.
In many spots around the globe, power producers and utilities are looking to deconcentrate their grids away from large, centralized power generators and steer them more toward distributed generation. There are cons to this approach, but the benefits are attractive, at least in theory.
While some countries have the luxury of carefully weighing these pros and cons, there is one country that's being forced by current events to decentralize, and rapidly, just to keep the lights on.
New research indicates that post-Fukushima Japan is now the world's third-largest solar energy markets, with nearly 5 GW of installed solar capacity. Germany and Italy, respectively, are the first and second. In some ways, though, this is a return to form for Japan rather than a new development.
In the 1990s and the early 2000s, Japan was the world leader in solar. Due to the cancelation of programs that backed solar (as a result of the government response to the "Lost Decade" depression in that country) and an accompanying shift toward nuclear power, Japan took its eye off the ball when it came to solar energy.
Then, of course, came the earthquake, the tsunami and the Fukushima disaster.
(Photo credit: Shutterstock)
Since then, Japan's government has taken a second look at solar, and added more than 1 GW of solar capacity last year. The majority of this new generation is grid-connected, with all the benefits and drawbacks that adds.
With the adoption of new solar-friendly regulations and generous tariffs, companies across Japan's economic spectrum have announced plans to set up solar parks and install rooftop solar arrays on their properties. To boot, Japan is also one of the world leaders in manufacturing solar cells, modules and other key materials that support the solar energy supply chain.
Can a country replace a highly productive nuclear fleet with solar energy? That question raises further questions, but it's certainly a daring strategy and it will be interesting to watch unfold.
In many spots around the globe, power producers and utilities are looking to deconcentrate their grids away from large, centralized power generators and steer them more toward distributed generation. There are cons to this approach, but the benefits are attractive, at least in theory.
While some countries have the luxury of carefully weighing these pros and cons, there is one country that's being forced by current events to decentralize, and rapidly, just to keep the lights on.
New research indicates that post-Fukushima Japan is now the world's third-largest solar energy markets, with nearly 5 GW of installed solar capacity. Germany and Italy, respectively, are the first and second. In some ways, though, this is a return to form for Japan rather than a new development.
In the 1990s and the early 2000s, Japan was the world leader in solar. Due to the cancelation of programs that backed solar (as a result of the government response to the "Lost Decade" depression in that country) and an accompanying shift toward nuclear power, Japan took its eye off the ball when it came to solar energy.
Then, of course, came the earthquake, the tsunami and the Fukushima disaster.
Since then, Japan's government has taken a second look at solar, and added more than 1 GW of solar capacity last year. The majority of this new generation is grid-connected, with all the benefits and drawbacks that adds.
With the adoption of new solar-friendly regulations and generous tariffs, companies across Japan's economic spectrum have announced plans to set up solar parks and install rooftop solar arrays on their properties. To boot, Japan is also one of the world leaders in manufacturing solar cells, modules and other key materials that support the solar energy supply chain.
Can a country replace a highly productive nuclear fleet with solar energy? That question raises further questions, but it's certainly a daring strategy and it will be interesting to watch unfold.
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