economics of energy
TransCanada kills controversial Energy East Pipeline project.
TransCanada Corp. has pulled the plug on its controversial $15.7-billion Energy East Pipeline proposal, after slowing oil sands growth and heightened environmental scrutiny raised doubts about the viability of the project.
TransCanada kills controversial Energy East Pipeline project
Open this photo in gallery:REUTERS
TransCanada President and CEO Russ Girling announces the new Energy East Pipeline during a news conference in Calgary, in this August 1, 2013 file photo.
TODD KOROL/REUTERS
SHAWN MCCARTHY AND JEFF LEWIS
OTTAWA/CALGARY
45 MINUTES AGO
OCTOBER 5, 2017
TransCanada Corp. has pulled the plug on its controversial $15.7-billion Energy East Pipeline proposal, after slowing oil sands growth and heightened environmental scrutiny raised doubts about the viability of the project.
In a terse statement Thursday morning, TransCanada said it has reviewed the "changed circumstances" and would be informing the National Energy Board that it would no longer proceed with the project, including the related Eastern Mainline, a natural gas pipeline that complemented the crude-carrying Energy East.
The west-to-east pipeline was planned to deliver 1.1-million barrels per day of western Canadian crude to refineries in Quebec and Saint John, N.B. as well as an export terminal in New Brunswick which was to be built by Irving Oil Ltd.
Read also: Energy East is a pipe dream in a carbon-constrained world
The project was strongly supported by governments in Alberta and New Brunswick – as well as federal Conservative politicians – who touted it as a means for increasing crude exports, replacing imported oil in Eastern Canada and created thousands of short-term construction jobs. However, it drew fierce opposition from municipalities and Indigenous leaders in Quebec, and from environmentalists, who worried it would lead to increased production of carbon-intensive bitumen and could spill crude into critical waterways.
Last month, TransCanada asked the National Energy Board to put its regulatory review hearings on hold while it reviewed the board's decision to include an assessment of the proposed pipeline's impact on greenhouse gas emissions, both in the production side of the business and in the refining and use of the oil.
The company did not specify the reasons for its decision in Thursday's announcement.
But AltaCorp Capital Inc. analyst Dirk Lever said he was not surprised by the move. There is more optimism around TransCanada's once-moribund Keystone XL pipeline, which would deliver Alberta crude to big refineries on the U.S. Gulf Coast. Producers would be reluctant to commit to both projects, especially given shrinking growth prospects in the oil sands, he said.
"I don't think really anybody in Calgary thought Energy East was actually going to go ahead," he said. "It was a Plan B."
In a statement, TransCanada chief executive officer Russ Girling thanked the supporters of the project, and said the company will now turn its attention elsewhere. The company expects to take an estimated $1-billion charge on its pre-tax fourth-quarter earnings. "We will continue to focus on our $24-billion, near-term capital program, which is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an 8– to 10-per-cent range through 2020," he said.
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After it announced the review, New Brunswick Premier Brian Gallant urged TransCanada to proceed with the project, and sought assurances from the federal government that the process would be a fair one.
Federal Natural Resources Minister Jim Carr insisted at the time that the proposal would get a fair hearing from the board and the government. He noted that the Liberal government had approved other oil and gas projects, including Kinder Morgan Inc.'s Trans Mountain pipeline expansion, after conducting similar climate-change-related assessments.
Some industry analysts questioned how much support existed among producers for the Energy East project, particularly after U.S. President Donald Trump revived and approved TransCanada's Keystone XL project that would carry 830,000 barrels per day from Western Canada to the massive refining hub and export terminals on the U.S. Gulf Coast.
The company is now seeking to firm up commitments from shippers on the Keystone XL line, while seeking final approval for its route through Nebraska from the state's public utilities commission.
Growth in oil sands production is expected to slow considerably as international oil companies retreat from Alberta and major projects that had been planned are either cancelled outright or deferred.
The industry is also supporting expansions of two other pipelines, the Trans Mountain line to Vancouver harbour, and Enbridge Inc.'s rebuild of its Line3 export line to the U.S.
Alberta Premier Rachel Notley said she was disappointed over TransCanada's decision to kill the project, which her government had actively supported as a "nation-building project."
"We understand that [the decision] is driven by a broad range of factors that any responsible business must consider. Nonetheless, this is an unfortunate outcome for Canadians," Ms. Notley said.
The premier said the government needs to provide greater certainty regarding the regulatory review process, which the Liberal government is currently working to update. With the west-to-east proposal now dead, Ms. Notley said there is an even greater urgency in completing the Trans Mountain project in order to diversify the industry's export markets beyond the United States.
In a statement, the Canadian Energy Pipeline Association blamed TransCanada's reversal on Ottawa's "unclear decision-making process" regarding pipeline projects in Canada.
"TransCanada was forced to make the difficult decision to abandon its project, following years of hard work and millions of dollars in investment," the association said in a statement. "The loss of this major project means the loss of thousands of jobs and billions of dollars for Canada, and will significantly impact our country's ability to access markets for our oil and gas."
However, Mr. Gallant said Thursday he had received assurances from Ottawa that the GHG assessment did not represent an insurmountable hurdle for TransCanada.
"Given the positive signals the federal government has sent to TransCanada over the last weeks . . . we believe it is clear that TransCanada is not proceeding with its application for the Energy East pipeline because recent changes to world market conditions and the price of oil have negatively impacted the viability of the project," Mr. Gallant said.
"We believed if TransCanada continued with the process, the project would be approved. We still believe that."
Natural Resources Minister Jim Carr said TransCanada made a "business decision" that was driven by changes in the market.
He said Ottawa had long signalled it would require climate change-related assessments of pipeline projects, and noted previous federal approvals after such reviews in other projects.
And he insisted that "Canada is open for business."
However, Conservative Party deputy leader Lisa Raitt slammed the Liberal government for imposing a climate test on Canadian producers that foreign competitors do not face.
She said the Liberals are sending negative signals to investors and creating a "double standard" to the detriment of Canadian companies and workers.
Mr. Carr said Ottawa's job is to regulate in Canada. He added the Liberals are not prepared to engage in a "race to the bottom" to match environmental regulations in Venezuela or Saudi Arabia.
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New Jersey’s solar sector is thriving: Now let’s fix it.
The New Jersey Board of Public Utilities is set to launch an industry study to assess whether or not the current structure has outlived its usefulness.
By almost any measure, New Jersey’s solar sector is thriving, but that isn’t preventing many folks from thinking it just may need some big fixes.
The New Jersey Board of Public Utilities is the latest to weigh in by announcing a broad examination of the industry and exploring whether the current structure that has served it so well may have outlived its usefulness — or at the very least needs some significant changes.
In a decision reached Friday at their regular monthly meeting, the BPU commissioners voted to launch a proceeding to study the current system, including whether the existing financial incentives that have made the state one of the nation’s leaders in solar need to be pared back, or replaced with something else.
A matter of timing
The action, as well as the timing, left some solar advocates privately scratching their heads given that the undertaking and scope of the effort are sure to spill over well into the next year, when a new governor and Legislature take over. It also occurs at a time when parts of the solar sector already have offered up their own template for overhauling the current structure with a bill in the Legislature (S-2276).
Despite its success — more than 80,000 solar panels have been installed in New Jersey — there is growing discussion among clean-energy advocates, legislators, and policymakers about whether the progress is being achieved at too high a cost, which is ultimately mostly shouldered by ratepayers.
The current system gives credits — dubbed Solar Renewable Energy Credits (SRECs) — to owners of solar systems for the electricity they produce. The credits are financed by a surcharge on a customers’ bills, but as prices for solar have declined and systems become more efficient, critics have questioned why subsidies are still needed.
Since the state deregulated the energy sector 18 years ago, the solar industry has received billions of dollars in subsidies from ratepayers, initially in the form of rebates to those who installed systems. New Jersey ranks fourth in the nation in the number of solar systems installed, and the sector employs thousands here.
Subsidies too high?
“The New Jersey solar market continues to evolve,’’ said BPU President Richard Mroz. “In the past, we have heard that the current solar subsidy is more than it needs to be.’’
The commissioners directed the BPU staff to scrutinize the entire suite of solar-incentive policies for cost-effectiveness, equity, and efficiency. Furthermore, staff will review rate impacts on residential and business customers, and environmental benefits of solar generation reducing the generation and consumption of electricity produced by conventional sources.
The board also is expected to focus on the price differential between residential projects and utility-scale solar systems, which are much cheaper. As part of the review, the staff plans to examine whether different incentives should be designed for grid-scale projects than what business and residential customers obtain.
In addition, the board decided to suspend approving any new-grid supply projects. Certain sectors of the industry have argued that grid-scale projects could threaten the stability of the market by squeezing out competitors for solar credits.
The move is not a surprise, but left some solar developers miffed.
“Many companies, including mine, spent a large amount of money developing these project and met silence,’’ said Lyle Rawlings, president of Advanced Solar Products in Flemington. “It was money literally down the drain.’’
Rawlings is part of a diverse group of solar developers who joined forces to help cobble together a bill to revamp the solar sector. The legislation, introduced right before lawmakers broke for their summer recess, is not expected to come up until a new governor is inaugurated and a new legislative session begins in January.
The measure proposes significant changes in how the solar market would work, proposing to gradually phase out the existing SREC system, although what would replace it is still undetermined. It also would ramp up how much solar electricity suppliers would have to buy, a step designed to keep the market stable while a new system is developed.
“We believe it will be a new administration that will move forward where renewable energy will be a majority of our electricity supply,’’ Rawlings said.
Besides the solar bill, there also is a push by clean-energy advocates to enact legislation requiring 80 percent of the state’s electricity come from renewable sources. It is expected to be taken up early next year.
Jeff Tittel, director of the New Jersey Sierra Club, welcomed the move to revamp the solar sector. “If we want to expand solar, we can’t keep the same model,’’ he said. “It’s too expensive.’’
By chance, the board’s action came on a day when the International Trade Commission ruled that imported solar equipment has hurt American companies, a ruling that could push prices of solar higher, according some experts in the industry.
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Businesses need the certainty that RGGI's renewal provides.
Given immense opportunity for economic growth through the deployment of clean energy, it is encouraging to see RGGI-state governors step up and lead the way.
The Obama administration is pressing for reductions of carbon dioxide from power plants, the largest source of greenhouse gas in the U.S. Florida utilities are divided in their response to the initiative.
Anne Kelly
Today, representatives from nine Northeast and Mid-Atlantic states are meeting in Baltimore to discuss how they will further cut carbon pollution. This decision will send a strong signal to the private sector that these states are committed to embracing the clean energy transition and will prove that lawmakers can work together to protect their economic future.
Amid a wave of climate dissent and rollbacks at the federal level, state and private sector leadership is needed now more than ever to find a way forward. The recent decision by nine governors to double down on cutting carbon is a win not only for the planet but also for the economy.
After more than a year of deliberation, leaders of the nine-state Regional Greenhouse Gas Initiative (RGGI) have announced plans to extend and strengthen their carbon cap-and-trade program through 2030. The updated proposal would cut carbon pollution an additional 30 percent between 2020 and 2030.
Since the program’s inception in 2008, RGGI states have already achieved an impressive 40 percent reduction in carbon emissions at relatively low cost.
The program has garnered widespread support because of its market-friendly approach to cutting emissions and because it has proven invaluable in fostering economic growth. Over the past nine years, RGGI states have seen their carbon emissions decline more than other states while electricity prices have dropped and their economies have grown. By embracing the clean energy economy, RGGI states can attract new investments, good-paying jobs, and well-meaning businesses.
As a nonprofit organization that works with leading investors and businesses to build a more sustainable economy, Ceres’ members recognize the value of RGGI and have supported the states’ decision to extend and strengthen the program. The private sector seeks policies that provide certainty and predictability in the face of volatile fossil fuel prices and disruptions from climate change — and the strong market signal sent by RGGI’s extension is just what businesses need.
The RGGI program began under bipartisan leadership, and it continues today with more than half of the member states led by Republicans. Gov. Larry Hogan and others demonstrate what the business community has known all along: that tackling climate change and fostering clean energy investments are good for the economy and our future.
In Maryland, RGGI is estimated to have created more than $240 million in net economic value. Quarterly RGGI auctions have generated more than $573 million for Maryland alone, which supports programs like EmPOWER Maryland that help businesses, low- to moderate-income households and others make energy efficiency upgrades to reduce their energy costs.
Timberland, a member of Ceres’ Business for Innovative Climate and Energy Policy (BICEP) Network, is investing in clean energy because it’s good for the economy and their bottom line. “Forward thinking policies like RGGI empower businesses to invest in our future while reducing costs and caring for our planet,” says the company’s sustainability director, Colleen Vien.
RGGI states are at the leading edge of a trend of state, regional and private sector leaders stepping up to fill the void of U.S. climate leadership. In California, lawmakers recently voted to extend their landmark cap-and-trade program, which has had immense success in achieving strong, cost-effective carbon reductions and is a model policy. Meanwhile, more than 2,300 cities, universities, businesses and investors have reaffirmed their commitment to reducing carbon emissions by pledging “We Are Still In" for achieving the goals of the Paris Climate Agreement.
The governors’ decision to extend and strengthen RGGI deserves to be lauded. RGGI’s success sets an example to neighboring states, such as New Jersey and Virginia, who can grow their own clean energy economies by joining up with RGGI. This pricing model can also prove exemplary for other sources of emissions such as the transportation sector, which has now surpassed electricity in carbon emissions.
Given immense opportunity for economic growth through the deployment of clean energy, it is encouraging to see RGGI-state governors step up and lead the way. The private sector will continue to stand behind states choosing to lead the transition to a low-carbon economy.
Anne Kelly is senior director of policy and the BICEP Network at Ceres, a sustainability nonprofit organization working with investors and companies to build leadership and drive solutions throughout the economy. Her email is kelly@ceres.org.
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Chicago town hall urges communities to take advantage of solar incentives.
Almost a year after Illinois enacted a sweeping energy bill, Chicago-area developers, advocates, and government agencies are hustling to prepare local communities to take full advantage of state incentives coming in the next few years.
Almost a year after Illinois enacted a sweeping energy bill, Chicago-area developers, advocates, and government agencies are hustling to prepare local communities to take full advantage of state incentives coming in the next few years.
Many are eyeing grants and other opportunities to develop community solar in underserved neighborhoods, and see it as a chance to bolster the local economy, create jobs, all while reducing emissions.
The Future Energy Jobs Act calls for 2,700 MW of solar in Illinois by 2030, including 400 MW of community solar through a state mandated adjustable block program. That figure is nearly double the amount of community solar that existed across the entire U.S. in 2016.
“There is a big pot of money to support solar in Illinois,” Jon Carson, managing partner with developer Trajectory Solar, told a crowd of Chicagoans gathered at a clean energy town hall in the Pilsen neighborhood of Chicago on Monday night.
Still, he said, there’s no geographic guarantee of where the money will go, and he said the residents of Pilsen should be involved in the production of clean energy. But they must organize and apply. “We want to make sure the public sector is supported by these funds,” he said.
“I promise you, there is someone in Bentonville, Arkansas who is making sure as much of that money as possible is used to put solar on top of every Walmart in Illinois,” Carson said. His solar startup focuses on behind-the-meter and community solar projects.
Statewide, the production of community solar is projected to produce over 10,000 construction period jobs, generate $1.39 billion in construction benefit money, and offset the equivalent greenhouse gas emissions of about 350,000 homes per year.
Illinois utilities have started designs for community solar programs under the new energy law, and officials in Cook County are also hurrying with their own preparations.
Last month, Cook County officials published an economic and environmental analysis of community solar in the area and will soon release 15 case studies for local projects that include engineering reports, solar designs, and financial plans tailored for the site owner, developer, and subscribers.
“We have been doing a lot of work to get ready for this,” said Deborah Stone, Cook County’s chief sustainability officer. Each business model is designed to be replicated. Cook County looked at how community solar could work on public housing, at parks, landfills, and other locations.
Still, she acknowledged that there are “advantages and challenges in terms of siting community solar.” Land, space, and labor are more expensive in Cook County then elsewhere in Illinois, she said. “But we think that providing some of the tools and financial analysis, we can overcome some of these obstacles.”
State Rep. Theresa Mah, a Democrat whose district includes Pilsen, helped organize the town hall. She said she wanted her constituents to hear how they can take advantage of the resources that are available to them through the Future Energy Jobs Act.
While per capita income is high for Chicago, there is still widespread inequality in the city.
“My personal view is that clean energy and green energy shouldn’t be limited to communities with resources or higher levels of education that have knowledge of these topics,” Mah said. “I represent a very diverse district. It’s working class immigrants that live in the districts that I represent and I want to make sure they don’t get bypassed.”
Elba Aranda-Suh, executive director of the National Latino Education Institute, also spoke and encouraged residents to get involved in the energy sector. Her organization was one of the six business and social institutions that won funding to conduct job training programs as part of the Future Energy Jobs Act. A total of $30 million was allocated for solar training programs, apprenticeships, and multicultural training for individuals.
“On the business side and the technical side, there are so many different levels [of opportunity],” she told the crowd. “But underserved communities are not yet accessing the opportunities.”
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100 percent wishful thinking: The green-energy cornucopia.
The 100-percent dream has become dogma among liberals and mainstream climate activists. Serious energy scholars who publish analyses that expose the idea’s serious weaknesses risk being condemned as stooges of the petroleum industry or even as climate deniers.
100 Percent Wishful Thinking: The Green-Energy Cornucopia
By Stan Cox, originally published by Resilience.org
September 19, 2017
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Ed. note: A slightly different version of this article previously appeared on Green Social Thought. This version appears on Resilience.org with permission of the author.
At the People’s Climate March back last spring, all along that vast river of people, the atmosphere was electric. But electricity was also the focus of too many of the signs and banners. Yes, here and there were solid “System Change, Not Climate Change” – themed signs and banners. But the bulk of slogans on display asserted or implied that ending the climate emergency and avoiding climatic catastrophes like those that would occur a few months later—hurricanes Harvey and Irma and the mega-wildfires in the U.S. West—will be a simple matter of getting Donald Trump out of office and converting to 100-percent renewable energy.
The sunshiny placards and cheery banners promising an energy cornucopia were inspired by academic studies published in the past few years purporting to show how America and the world could meet 100 percent of future energy demand with solar, wind, and other “green” generation. The biggest attention-getters have been a pair of reports published in 2015 by a team led by Mark Jacobson of Stanford University, but there have been many others.
A growing body of research has debunked overblown claims of a green-energy bonanza. Nevertheless, Al Gore, Bill McKibben (who recently expressed hope that Harvey’s attack on the petroleum industry in Texas will send a “wakeup call” for a 100-percent renewable energy surge), and other luminaries in the mainstream climate movement have been invigorated by reports like Jacobson’s and have embraced the 100-percent dream.
And that vision is merging with a broader, even more spurious claim that has become especially popular in the Trump era: the private sector, we are told, has now taken the lead on climate, and market forces will inevitably achieve the 100-percent renewable dream and solve the climate crisis on their own. In this dream, anything’s possible; Jacobson even believes that tens of thousands of wind turbines installed offshore could tame hurricanes like Katrina, Harvey, and Irma.
The 100-percent dream has become dogma among liberals and mainstream climate activists. Serious energy scholars who publish analyses that expose the idea’s serious weaknesses risk being condemned as stooges of the petroleum industry or even as climate deniers. Jacobson has even suggested that he might take legal action against NOAA scientist Christopher Clack and twenty coauthors whose critical evaluation of his work was published by the Proceedings of the National Academy of Sciences in June.
Jacobson’s team and others cling to the idea of 100-percent conversion because they (rightly) want to eliminate fossil and nuclear energy, and they foresee that any future supply gap left by a shortfall in renewable generation is going to be filled by those dirty sources. That is indeed stated or implied by many of the opposing analyses, including the Clack study.
But the two sides also share other basic assumptions. They both seek to satisfy all future demand for energy solely through industrial production, technological improvements, efficiency, and markets, without any strict regulatory limits on the total quantity of energy consumed in production and consumption. The 100-percenters believe such a scenario is achievable while their critics conclude that it is not, but they agree on the ultimate goal: a permanent high-energy economy.
That part of the dogma, not the “100-percent” part, is the problem. America does need to convert to fully renewable energy as quickly as possible. The “100-percent renewable for 100 percent of demand” goal is the problem. Scenarios that make that promise, along with the studies that dissect them, lead me to conclude that, at least in affluent countries, it would be better instead to transform society so that it operates on far less end-use energy while assuring sufficiency for all. That would bring a 100%-renewable energy system within closer reach and avoid the outrageous technological feats and gambles required by high-energy dogma. It would also have the advantage of being possible.
Waking up from the dream
The pursuit of the 100-percent dream didn’t start with the 2015 Jacobson et al. papers, and critiques of it didn’t start with Clack et al. For example, there was a 2015 paper by Peter Loftus and colleagues that critically examined 17 “decarbonization scenarios.” Then earlier this year, a study by a group of Australian researchers led by B.P. Heard rated the feasibility of 24 published studies that describe 100-percent renewable scenarios.
The Heard group concluded that among the research papers they evaluated (which included several with Jacobson as lead author), none “provides convincing evidence that these basic feasibility criteria can be met.” They found a wide range of technical flaws in the proposed systems. Most scenarios assumed unprecedented and deeply unrealistic improvements in energy efficiency (in terms of kilowatt hours consumed per dollar’s worth of output). Because the chief renewable technologies, wind and solar, fluctuate continuously in their output and regularly drop to zero output, they must be backed up with large supplies of “base load” electricity if all demand is to be met without interruption; no studies managed this without ecologically destructive levels of biomass burning or wildly unrealistic estimates of hydroelectric output.
Scenarios did not account for the overcapacity and redundancy that will be needed if a high-energy economy is to function in an increasingly unpredictable global climate. (This year, the people of Texas, Florida, and the West in particular can attest to the deep impacts of that unpredictability.) Studies did not account for the expected four- to five-fold expansion of the power transmission infrastructure that will be required to accommodate renewable energy. And they did not address the difficulties of maintaining voltage and frequency of alternating current within extremely tight limits (a necessity in technologically dependent societies) when a large share of the supply is from wind and solar. This all adds up, writes the Heard team, to a systemic “fragility” that will render futile all attempts to deliver the promised output of electricity when it is needed.
The Loftus group found several of the same weaknesses in the studies they examined. But they singled out scenarios in papers by Jacobson and Delucchi, the World Wildlife Fund, and Worldwatch. Those scenarios had in common two assumptions that Loftus and colleagues regarded as out of the realm of reality: efficiency improving at as much as 3 to 4 times the historic rate, and buildup of renewable generation capacity at many times the rate at which today’s total electric generation capacity was built up in past decades. They concluded that it would be “premature and highly risky to ‘bet the planet’” on the achievement of scenarios like those.
Unrepealable limits
In their PNAS publication, the one that prompted Jacobson to hint at a lawsuit, Clack et al. critically examined two papers from 2015, one of which was a widely hailed “roadmap” for plentiful, 100-percent renewable energy in all 50 United States. In addition to “modeling errors,” much of the Clack critique is aimed at the Jacobson group’s assumed ubiquitous deployment of technologies that either don’t yet exist or are only lightly tested and can’t be scaled up to the huge scales envisioned. They include underground thermal energy storage for virtually every building in the country, a full air transportation system run entirely on hydrogen(!), wind farms covering 6 percent of the entire land surface of the 48 contiguous states, an outrageous and unrealistic increase in ecologically harmful hydroelectric power, and a buildout of electricity generation capacity that hurtles along at 14 times the average rate of capacity expansion in the past half-century.
But even if it were physically possible to achieve all of those scaleups, and even if Congress found a way to repeal and replace Murphy’s Law, the full-blown 100-percent dream could not be realized. In a series of papers published since 2010 (e.g., a 2016 paper in Energy Policy), Patrick Moriarty and Damon Honnery of Monash University in Australia have identified several crucial factors that will limit the total global output of renewable electricity. For example, renewable technologies exploit the windiest or sunniest locations first, and, as they expand, they move into less and less productive territory. There, their construction and operation will require as much energy input as before, but their output will be lower.
Furthermore, because of inherently intermittent generation, much of the electric power from wind and solar will have to be stored using batteries, hydrogen, compressed air, pumped water, or other means. It will then have to be reconverted to electricity and transmitted from often remote regions to places where people and businesses are concentrated. The result is a severe shrinkage of the net energy available to society, because much energy is expended or lost during both conversion and transmission. Finally, all production of wind, solar, geothermal, biomass, and especially hydroelectric energy has an ecological impact on the landscapes where it occurs. So if we are to halt our degradation and destruction of the Earth’s natural ecosystems, it will be necessary to declare large areas off-limits to the energy sector.
Moriarty and Honnery show that given all of these factors, expansion of renewable energy will hit a brick wall, a point at which as much energy is required to install and operate electric facilities as they will end up generating in their operating lifetimes. But even before that point is reached, it will have become pointless to expand generation capacity that has lower and lower net output. They conclude that as a result, future renewable output “could be far below present energy use.”
What are we hoping for?
A generally overlooked but crucial point about high-energy, 100-percent renewable proposals is that they seek to meet future demand patterns in a way that would leave in place today’s great distortions in access to energy and other resources. The American economy would carry on uninterrupted with its overproduction, overconsumption, and inequality, while billions of people in poorer regions and countries would not get the access to energy that’s required for a minimally good quality of life.
The 100-percent scenarios themselves, as well as the critiques of them, hold one especially valuable lesson. Unintentionally, they show in stark terms why rich countries need to start planning to live in the renewable but lower-energy world envisioned by Moriarty and Honnery rather than the high-energy world that the mainstream 100-percent scenarios envision. The world that the latter scenarios would create, one focused on maintaining current profligate consumption levels, would not be a green and pleasant one. Herculean quantities of physical and mental labor power will have been expended, boundless physical resources (including vast tonnages of fossil fuels) will have been consumed, and countless entire ecosystems across the Earth’s surface will have been sacrificed to generate more electricity. All of that would make for a pretty grim world. With society having zeroed in singlemindedly on acquiring enough energy to keep driving, flying, and overproducing as much as we want, there’s no reason to expect that other problems, including enormous distortions in economic and political power and quality of life, along with racial and ethnic oppression, would have been solved.
Some in the climate movement believe in the 100-percent dogma and the dream it holds out: that the (affluent) American way of life can keep running forward in time and outward in space without breaking stride. There are others who know that to be an impossibly rosy vision but urge the movement to limit public discussion to such green dreams anyway, because talking about a regulated, low-energy economy would crush hope and enthusiasm at the grassroots.
The debate about hope ignores the relevant question: what are we hoping for? If our hope is to deploy solar and wind capacity that maintains indefinitely the current throughput of energy in the world’s affluent societies, then, yes, the situation is hopeless. But there can be other hopes that, although they’re looking dim for now, are at least within reach: that greenhouse warming can be limited sufficiently to allow communities around the world who are currently impoverished and oppressed to improve their lives; that access to food, water, shelter, safety, culture, nature, and other necessities becomes sufficient for all; or that exploitation and oppression of humans and nature be brought to an end.
There’s always hope, as long as we don’t confuse dreams with reality.
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Tags: building resilient societies, cornucopians, renewable energy transition
Stan Cox
Stan Cox and Paul Cox are the authors of “How the World Breaks: Life in Catastrophe’s Path, From the Caribbean to Siberia,” coming in July from The New Press. Write them at [email protected]
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Advocates say Iowa utility’s proposal could lead to fee for solar customers.
An Iowa utility that failed earlier this year to impose new constraints on solar customers is making another attempt in its currently pending rate case.
An Iowa utility that failed earlier this year to impose new constraints on solar customers is making another attempt in its currently pending rate case.
Interstate Power & Light has asked the Iowa Utilities Board to allow it to create two new rate classes for “partial requirements” customers — those who generate some of their own energy.
The utility has not requested a new rate for solar customers, but clean energy proponents suspect it will be coming if the Iowa Utilities Board approves the proposed new rate classes.
In another move that would tend to impinge on efforts to reduce energy use, the utility has asked for a $3 increase in the fixed monthly fee for residential customers. The utility wants to raise the fixed fee by $6.20 for small business customers.
Both proposals have stirred up criticism from proponents of clean energy as well as the state office that serves as a watchdog for consumers in the state.
“The proposal to create new rate classes seems to aim to discourage solar investment,” Karl Rabago said in some testimony submitted to the regulators this summer. Rabago is a former utility commissioner who now consults on utility and energy matters.
The creation of new rate classes “is the first step in discouraging distributed generation,” said Josh Mandelbaum, a lawyer for the Environmental Law & Policy Center who has been involved in the rate case. “We are very concerned.”
‘Accurately reflect the cost’
Interstate spokesman Justin Foss did not indicate whether a rate hike is in the future for members of the new classes, provided they are approved.
“We are gathering and presenting data so that we can ensure future customer rates accurately reflect the cost to serve them,” he said in an e-mail. The company’s broader mission in a rate case, he said, is “to balance out customers’ need for reasonable rates with our responsibility to provide services in a safe and reliable manner, recover costs of supplying energy and earning a reasonable return to remain financially strong.”
Mandelbaum called the attempt to create two new rate classes “part of a pattern of hostility towards distributed generation that we’ve seen from IPL for a number of years. They’ve taken multiple bites of that apple, and this would be one of them.”
Earlier this year, Interstate proposed a pilot tariff for solar customers that several solar installers and advocates said would make solar far less economically viable. Regulators approved a modified version of the initial proposal. It’s not yet clear what the repercussions may be on the pace and scale of solar installations.
Three months ago, Interstate asked state regulators to approve a “green tariff” that, according to some solar proponents, would levy an additional fee on willing customers without actually increasing the amount of solar energy in Interstate’s system.
In Interstate’s current rate case, it proposed one class that would encompass residential customers who generate some of their own power. The other class would cover small businesses with solar panels or another renewable technology.
Foss said that Interstate is moving ahead with its own company-owned solar energy, with the development of a 5 megawatt array in Dubuque – the largest community solar project in the state.
Interstate contends that solar customers should be in their own class because their power use is distinctly different from non-solar customers. And in fact, according to data submitted in the rate case, the power demand of solar customers tends to peak a couple hours later than customers who rely on Interstate for all of their power.
Included in the rate case is a graph that illustrates one difference between the 1,200 customers with solar panels and the 400,000 customers without them: the solar customers’ peak demand on Interstate’s grid occurs two to three hours after the peak demand of the other 400,000.
Rabago challenged the idea that a distinct pattern of energy use constitutes a reason to segregate a group of customers for different treatment. Any number of such groups could be identified, he said.
“Firemen, people who work the night shift, senior citizens with limited income, dual-income couples who both work outside the home. We have to ask, ‘Why do these 1,200 people get a separate rate class? What is this exercise for? Especially when (Interstate) refuses to consider the benefits these customers might also be providing.’”
Although 1,200 solar customers do not at this point make much impact of any sort on the grid, Rabago said that if and when their numbers grow, the graph suggests that their impact on the grid could be beneficial.
“They’re making use of the system at a time when it’s not fully loaded. That’s a dream for utilities.”
Fixed charges
In the rate case, Interstate also has requested increases in both the fixed monthly fee and the energy charge, but with an emphasis on the former. It is seeking to raise the fixed fee for residential customers from $10.50 to $13.50 per month. That amounts to a 29 percent increase, compared to a requested 12 percent overall residential rate increase.
The company proposes increasing the fixed fee for General Service (most commercial) customers from $17.80 to $24 per month. That would be a 35 percent increase, compared to an overall rate increase of 11 percent for General Service customers.
As sales of electricity have stagnated in recent years, utilities across the country have been pursuing hikes in their fixed rates to compensate for flatlining or falling revenues from energy charges.
Fixed charges “are discriminatory against low and moderate-income households,” Andy Johnson, director of the Winneshiek Energy District in Decorah, wrote in a statement he submitted to state regulators. “They deny customer control and responsiveness, and they discourage customer initiative for energy efficiency and renewable energy.”
But opinions vary as to what constitutes a fixed cost. To Rabago, it’s only the costs associated with adding a customer to the system – probably no more than $5 or $10 a month.
To Interstate, many of the costs of the distribution system are fixed. And while Rabago agrees that those costs are fixed – over the short term – he contends that over the long term, they become variable, depending on how much demand is put on the system.
Further, in its rate case, Interstate is essentially assigning costs without sufficient facts about which customers impose which costs on the system.
In contrast to earlier directives from the Iowa Utilities Board, Rabago said that Interstate “is not following a data-driven approach. That’s the most frustrating thing about this proposal.”
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Could papayas help Hawaii become energy independent?
A plant pathologist and her team of researchers have been gathering leftover papayas from local packing houses and turning them into a fuel that’s used to produce biodiesel.
BY SARA NOVAK | SEP 12 2017
Papayas are big business in Hawaii. In 2016, the islands produced nearly 20 million pounds of the tropical melon valued at an estimated $10 million. The Hawaiian papaya is also highly controversial. After the papaya ringspot virus decimated the island’s crop three decades ago, much of the fruit grown there today has been genetically modified to be resistant.
For Hawaiian farmers, selling the papayas can be difficult. Countries are often reticent to import genetically modified crops. They also face an uphill battle because of the high cost of imported fertilizers. But even more problematic is waste. Approximately a third of the Hawaiian papaya crop is discarded because it’s bruised or misshapen. Farmers throw out these otherwise saleable crops when margins are already thin.
Lisa Keith, a plant pathologist with the USDA in Hilo, Hawaii, may have a solution. Keith and her team of researchers have been gathering leftover papayas from local packing houses and turning them into a fuel that’s used to produce biodiesel. It’s a surprisingly simple process that includes adding algae to large tanks that contain a sterile pureed papaya solution, where a process called heterotrophic growth takes place—in the absence of sunlight, algae feed on the sugar in the papaya. When the algae becomes starved of nitrogen after depleting the nutrients in the puree, it stimulates lipid production, which causes the lipid cells to balloon up with oil in just under two weeks’ time. These oils can be used for biodiesel production after the glycerol present in the cells is extracted.
The entire process takes less than a month. It’s an entirely waste-free endeavor because, says Keith, the leftover algae can be added to fish meal and the glycerol can be added to feedstock. This makes the algae/papaya combination a practical solution to another major island issue. In Hawaii, almost 90 percent of the island’s energy is imported. Producing local, sustainable energy through solar, wind, and other methods like biodiesel makes economic sense for the islands, which have set a 2045 deadline for producing 100 percent of their energy from sustainable sources. What’s more, biodiesel production could also be another reliable stream of income for farmers struggling to survive in a difficult market.
The main obstacle that Keith and her team have encountered in their attempt to scale the energy source has been oil extraction. “Removing the oil from the algae cells is still a challenge,” says Keith, and they’ve yet to come up with a means for extracting oils from algae cells at an economically sustainable rate. But, she says, “This is an ongoing problem with the industry as a whole.”
Currently, there are two main methods for oil extraction: mechanical and chemical. Often they’re combined depending on the type of algae used in production. Mechanical involves physically crushing the cells similar to crushing olives or soybeans to extract the oil. The other involves using chemical solvents to disrupt the cells.
In the lab, Keith and her team are using a combined method of mechanical disruption and the use of solvents. Algae are added to test tubes and the samples are mixed at high speeds to break open the cells. The oil is then extracted by adding hexane, a chemical solvent often used in food processing. The hexane evaporates, leaving behind the algae oil.
Even though the project isn’t yet fully scalable, Keith says that the research is promising. She’s currently working with the Hawaii Department of Agriculture’s Agribusiness Development Corporation and Bib Island Biodiesel to optimize the complicated process so that it can become a viable energy source on the island. Production has increased much faster than she thought it would.
In the future, her team plans on researching other Hawaiian crops that can be used in biodiesel production like Okinawan sweet potato, guava, banana, and cacao pulp.
While algae biodiesel production isn’t going to make Hawaii energy independent in the short term, it’s a big step in the right direction—a win for farmers looking for another viable stream of income, and a win for those sick of the high cost of unsustainable energy on this isolated archipelago.
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