Block’s Indicator of Sustainable Growth

It is very encouraging at a time of international recession that President Elect Barack Obama will quickly after his inauguration as President on January 20 2009 seek agreement of the Democratic controlled Congress for quick action to ratify the Kyoto Convention.

 

A US federal cap and trade system to reduce CO2 emissions can be anticipated soon after, which will be a much needed boost to the waning international support for carbon abatement at a time of continuing financial crisis. Although not widely reported on November 18 2008, Obama in a video speech to a bipartisan group of US governors on climate change promised quick action after his Administration assumes office. He said in part:

 

“My presidency will mark a new chapter in America’s leadership on climate change that will strengthen our security and create millions of new jobs in the process. This will start with a federal cap and trade system. We will establish strong annual targets that set us on a course to reduce emissions to their 1990 levels by 2020 and reduce them an additional 80 per cent by 2050.

 

“Further, we will invest $15 billion each year to catalyse private sector efforts to build a clean energy future. We will invest in solar power, wind power and next generation biofuels. We will tap nuclear power, while making sure it’s safe. And we will develop clean coal technologies.

 

“This investment will not only help us reduce our dependence on foreign oil, making the United States more secure. And it will not only help us bring about a clean energy future, saving our planet. It will also help us transform our industries and steer our country out of this economic crisis by generating five million new green jobs that pay well and can’t be outsourced.

 

“But the truth is, the United States cannot meet this challenge alone. Solving this problem will require all of us working together. I understand that your meeting is being attended by government officials from over a dozen countries, including UK, Canada and Mexico, Brazil and Chile, Poland and Australia, India and Indonesia. And I look forward to working with all nations to meet this challenge in the coming years.”

 

“Stopping climate change won’t be easy. It won’t happen overnight. But I promise you this. When I am president, any governor who’s willing to protect clean energy will have a partner in the White House. Any company that’s willing to join the cause of combating climate change will have an ally in the United States of America. Thank you.”

 

The head of the UN Climate Change Secretariat Yvo de Boer at a climate change conference in Africa responded: “I think that will have a very positive influence on the negotiations. He (President Elect Obama) indicated that he intends to show national and international leadership. I think that statement will be seen as a huge signal of encouragement to the international community.”

 

De Boer said US emissions of greenhouse gases stood at 14 per cent above their 1990 levels, but it was possible to get volumes down to that target within the deadline. “I think it’s feasible. It’s a challenge, but it’s doable.”

 

International financial crisis and recession we may all have, but it’s too late to turn the clock back on carbon abatement and vigorous encouragement to renewable energy. Now is the time to act.

 

 

Posted under Carbon Abatement Scheme, Climate Change, Global Warming, Low Carbon Economy, Renewable Energies

By Ray Block

Australia with 75.5 per cent of electricity production derived from coal fired power stations is the largest coal exporter in the world. Although the country emits only 1 per cent of world greenhouse gas (GHG), per head of the 21 million population it generates the greatest concentration of CO2.

 

With this background, the Australian Government, which has already made a commitment to reduce Australia’s GHG emissions by 60 per cent on 2000 levels by 2050 is about to announce its short term emissions target for 2020. The emissions trading scheme is to commence in 2010.

 

The Government is expected to adopt one of the two scenarios prepared by its climate change adviser, Professor Ross Garnaut. One scenario would see Australia reduce its carbon emissions by 25 per cent below 2000 levels by 2020, and 90 per cent below 2000 by 2050. This would be on the basis of international agreement that CO2 in the atmosphere be stabilised at 450 parts per million (pmm).

 

The alternative assumes CO2 in the atmosphere would be stabilised at 550 pmm, in which case the recommendation is for an emission reduction target of 10 per cent below 2000 levels by 2020 and 80 per cent below 2000 levels by 2050. The case for a 10 per cent reduction below 2000 levels by 2020 seems overwhelming at least in political terms, and my money is on this alternative.

 

Australia has a renewable energy target of reaching 20 per cent by 2020. Mandatory Renewable Energy Targets originated in 2002, when the renewable level was set at 1,100 GWh. This was increased in incremental steps to reach 4,500 GWh in 2006 and 6,800GWh in 2008. The mandatory renewable target for 2010 is 9,500 GWh, which is where the current scheme stays at a static 2010 level. But new regulations are being drafted to increase this in incremental steps to reach 45,000 GWh in 2020.

 

The latest statistics for Australian renewable energy levels is for calendar year 2006. The Office of Renewable Energy Regulator (ORER) says that the renewable level in 2006 was 8.54 per cent, but if you discount for the approximate 15 per cent of electricity lost in transmission and distribution, the net renewable level was 10 per cent. The 2007 figures are not yet available, but based on new installed capacity added in 2007, it would be considerably higher.

 

There are approximately 100 hydro power stations in Australia, but only two are of significant size. By far the major hydro scheme, the Snowy Mountains Hydro, which generates about 50 per cent of the total hydro electric capacity of 7,050 MW in the country has seven power stations, of which two are underground, and the generating capacity is about 16,000 GWh.a year. There are 145 km of tunnels and 16 large dams. The other hydro power of size is the Tasmanian Hydroelectric Corporation in the island state. Faced with a drought, the worst in more than 100 years in south eastern Australia, the ability to expand hydro power are limited, unless there was a number of dams built in northern Australia to take advantage of the summer monsoon rains. However, a further 310 MW of hydro power is either under construction or planned.

 

Biomass in Australia is widely utilised, with an overall generating capacity of about 808 MW. While the overall impact in increasing renewable energy is still quite modest, the prospects ahead are very promising. Biomass energy comes either directly from burning bagasse, the fibrous residue after sugar cane is crushed and the juice extracted to produce sugar, or in the form of methane, a biogas derived from the breakdown of organic matter. Burning bagasse in the sugar mills of Queensland and Northern NSW to generate electricity is about 50 years old, and is estimated to contribute about 1 percentage point to renewable electricity.

 

Camphor laurel, which can be grown the whole year is a new source of biogas. Noxious weeds such as mimosa pigra (prickly mimosa), which infest large areas of Australia has been trialled for harvesting and compressing into briquettes. Mallee eucalypts are being developed to produce woody crops for Western Australian wheatbelt farmers as a valuable secondary income source for biogas production.

 

Western Power is working with local farmers to plant two million mallee trees. The mallee root allows the tree to regrow itself, when the above ground branches are removed, and this resprouting ability of harvesting branches every second year can proceed indefinitely.  The deep mallee roots have the added virtue of soaking up the ground water to keep the salt at bay in the endless battle combating salinity.

 

Still another source of bioenergy, Sydney based EarthPower Technologies is constructing a facility that will recycle 82,000 metric tons of industrial and commercial food and other biomass wastes to produce biogas, and a liquid effluent stream containing raw fertiliser.

 

Development is under way of a micro gasifier turbine system to generate electricity from green or dry fuelwood. The green gasifier generator (GGG) is the result of a collaboration between Australia’s leading scientific organisation CSIRO with the local JC Smale & Co, a commissioning engineering company and the US based Capstone Turbine Corporation The green gasifier generator creates electricity outputs of 25 to 200 MW according to the size of the microturbine. The GGG is greenhouse neutral, provided the wood resource is from sustainable production.

 

The expectation is that by 2010, electricity production from GGG units installed nationally could be 950GWh, 10 per cent of Australia’s 9,500 GWh renewable energy target.

 

In Biofuels, bioethanol and biodiesel are still in their infancy in Australia, unlike the situation in Brazil, the US and European Union. The only government encouragement to bioethanol as a motor spirit to lessen the demand for gasoline is a producer subsidy equivalent to fuel excise until 2011. At that point, the producer subsidy diminishes in value until finally cutting out in 2015.

Bioethanol is currently produced by two companies. Manildra, the largest industrial user and processor of Australian wheat for industrial and food purposes at its plant at Bomaderry in the south coast of NSW has the most advanced starch based ethanol distillery in the world. The company is the largest local producer of ethanol for transport fuel producing about 100 Mgy (million gallons a year).

 

CSR at its distillery at Sarina in North Queensland produces ethanol from molasses, a by product from sugar milling. Current production is about 10 Mgy, but will be scaled up to 14 Mgy.  A third producer Dalby Bio Refinery, whose distillery is currently being constructed in Queensland’s grain growing district of the Darling Downs is to produce ethanol from sorghum. Expected production will scale up to 21 Mgy.

 

A third facility planned for the Rocky Point sugar mill, near Beenleigh in Southern Queensland will provide the balance of fuel to meet the expected increase in Queensland state demand for ethanol blended motor spirit by 30 Mgy as a result of the state’s E5 target for 2010.

 

There is no subsidy for biodiesel production in Australia, with the companies in the market struggling to keep going.  Indeed, one of the companies, Natural Fuels Australia was placed in voluntary administration in 2008, with the Darwin biodiesel plant which was importing Malaysian RBD palm olein abandoning production, while the search for a buyer proceeds.

 

The Australian Academy of Technological Sciences and Engineering (ATSE), which commissioned a major report on Biofuels in November 2008 recommended that a national Biofuels Institute be created. This would be along the lines of the soon to be created Australian Solar Institute, where Australian researchers could come together far more effectively than through the fragmenting competitive grant driven step-by-step processes than characterise  much of Australia’s research and development.

 

ATSE is particularly keen to see development of generation 2 biofuels, where non-foods are prolific in lower value resources, which Australia has in abundance. Such as woody crops, (lignocellulosics), for conversion into ethanol and specialised algae strains to biodiesel.

 

 

 

 

Posted under Carbon Abatement Scheme, Climate Change, Global Warming, Low Carbon Economy, Renewable Energies

by Ray Block

Good as wind and solar energy can be to provide peak power, they are no substitute to coal fired or nuclear as base load power to provide electricity 24 hours a day. The increasing evidence is that planet earth needs a sharp reduction in carbon pollution, if the disastrous consequences of global warming are to be avoided. The question then arises can geothermal energy become an economic substitute to provide base load energy?

 

Earth Policy Institute (www.earth-policy.org) says a loud Yes. While carbon capture and storage (CCS) can be a large boon allowing a new and vigorous life for a low pollution coal industry. But practical application of this technology is about 10 years away.

 

Even with the likelihood of low carbon coal power, now is the time for geothermal energy to come into its own. Earth Policy Institute says geothermal energy “originating from the earth’s core and from the decay of naturally occurring isotopes such as uranium, thorium and potassium, the heat energy in the uppermost six miles of the planet’s crust is 50.000 times greater than the energy content of all oil and natural gas resources.”

 

Chile, Peru, Mexico, United States, Canada, Russia, China, Japan, Philippines, Indonesia, Papua New Guinea, New Zealand, and other countries with high volcanic activity, encircling the basin of the Pacific Ocean are rich in geothermal energy. The Great Rift Valley of Africa including Kenya and Ethiopia is another geothermal hot spot. As Earth Policy Institute says 39 countries with a combined population of over 750 million have rich geothermal energy resources sufficient to meet all their electricity needs.

 

Outside these countries, where shallow volcanic systems exist and are relatively cheap to exploit, the more expensive hot rock technology in the form of drilling very deep wells up to five Km (three miles), where water is pumped underground, then heated, and the heat energy used to generate power opens the door to many more countries to tap geothermal resources.

 

The “hot rocks” are needed to be 150 degrees Celsius to produce electricity, with temperatures rising the deeper the drill goes into the earth’s crust. In all there are over 70 countries with the capacity to develop geothermal resources for conversion into electricity.

 

Iceland is the model country for renewable energy, with 70 per cent of its energy coming from renewables. Currently, there is 420 MW electricity capacity from two geothermal power stations, sourced from hot rock technology. 27 per cent of the country’s electricity comes from geothermal energy, with the balance coming from hydro power. Iceland has been a pioneer in hot rock technology, and is now the first country in the world to establish a public hydrogen power station, aimed at introducing a hydrogen-based pollution-free traffic system. Hydrogen buses have been extensively tested as an integral part of the Reykjavik public transport system, with Iceland close to its goal of being entirely carbon free.

 

United States has the largest known geothermal resources in the world. The US Geological Survey released in September 2008, the first national geothermal resource survey in more than 30 years, shows an estimated 9,057 MWe of power generation potential from conventional identified geothermal systems. There is also 30,033 MWe of power generation potential from conventional undiscovered geothermal resources.

 

Finally, there is a further 517,800 MWe of power generation potential from unconventional (high temperature, low permeability) enhanced geothermal systems (EGS). The conventional geothermal resources are in the north western part of the US-California, Nevada, Idaho and Oregon, Hawaii, and parts of the north east of New England. The unconventional resources, where hot dry rock or deep geothermal/EGS can be used in almost all of the US, but is particularly applicable in the southern and eastern parts of the country.

 

According to Earth Policy Institute at August 2008, the US had 2,960 MW geothermal installed capacity, with California dominating with 2,555 MW. Most of this capacity is in the Geysers, a geologically active region north of San Francisco. In addition to installed capacity, there are up to 4,000 MW of capacity under development in 13 US states.

 

Outside the US, Philippines ranks No2, generating 23 per cent of its electricity from geothermal resources, and plans to increase it 60 per cent to 3,130 MW.by 2013. Ranking No 3 is Indonesia, which aims to have 6,870 MW of geothermal energy capacity by 2020, at which stage geothermal energy would represent 30 per cent of all energy installed.

 

Europe has little installed capacity, except for Italy, which has 810 MW, and this is expected to double by 2020. Iceland as reported before has 420MW, and Germany an insignificant 8 MW, but is now showing renewed interest in geothermal resources in Bavaria.

 

The disappointing part of this story is that with all the potential that geothermal resources could become as a major part of the globe’s carbon free energy future, it is still largely being pushed aside. Will this change when many more countries introduce an emission trading scheme, and start effectively taxing carbon? That remains to be seen.

 

In countries like the US, where a large part of the geothermal resource is located, geothermal energy from conventional geothermal resources is price competitive with natural gas, and is carbon pollution free. This is not the case with hot rock or deep geothermal/EGS, where a lot of research and money is still needed to bring down the costs of drilling deep wells, where the costs are currently too high.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Posted under Carbon Abatement Scheme, Climate Change, Global Warming, Low Carbon Economy, Renewable Energies

by Ray Block

The surge in world recession as America, Europe including the UK and Japan move deeper into recession is now spreading further. Even the rapidly growing Asian countries, such as China and India and the raw material supplier countries are being lashed with the buffeting winds spreading the overall mood of pessimism.

 

The impact on the growth of renewable energy has been to slow down the whole process to a crawl, and in a great number of cases to a dead stop. Despite the overall mood of gloom, there are still a few rays of sunshine.

A positive note of optimism came from Drax plc of the UK. Drax is the owner of Western Europe’s largest coal-fired power station, which on October 23 2008 announced that it planned to build three 300 MW power plants that would burn biomass, including energy crops and agricultural or forestry waste. The plants will be in partnership with the German electrical group Siemens. Drax will own 60 per cent of the project, with Siemens having the balancing 40 per cent. The investment cost 2 billion pounds (US$3 billion.)

 

 Financial Times (October 24 2008) reported that Drax is the UK’s biggest single emitter of CO2. The finance director Tony Quinlan said that as a result of subsidies for renewable energy, the plants would produce a return of about 15 per cent and pay for themselves over six years. Construction is timed to start in 2010, with power generation to start in 2014.

 

The contrast between the future for the company and the past reinforces the benefits of new investment in renewable energy. In its latest year to June 2008, Drax’s current 4,000 MW coal fired plant was responsible for cutting almost a half of its previous net profit, due to the need to buy sufficient CO2 emission allowances to cover its carbon pollution.

 

Another positive for the UK comes from Scotland. Ed Crooks (Financial Times October 31 2008) says that Scotland’s renewable electricity, almost all of it wind and hydro power, which represent 1,380 MW installed capacity can now power 60 per cent of Scottish homes. The Scottish government has set a target of deriving 31 per cent of the country’s electricity from renewables by 2011, and 50 per cent by 2020.

 

Less positive is the outlook in the European Union’s emission trading scheme, where the mood has deteriorated, as reported by the environmental capital blog of the Wall Street Journal (October 24 2008). The price of carbon credits fell by 15 per cent in recent weeks to reach an eight month low of 20.15 euros.

 

With the fall in European output of the major industrial polluters, such as in steel and cement, some heavy industrial enterprises are selling permits they originally received on a free basis. The buyers are the power utilities, particularly the coal fired power stations where the permits will allow them to have sufficient offsets to reduce their immediate need to install costly low carbon equipment.  

In the US, there is some good news, and equally some less positive. Despite the international credit crunch which commenced in August 2007, the accounting firm Ernst and Young’s clean tech venture capital scorecard showed September quarter 2008’s investment rose 55 per cent to US$1.6 billion. For the year to September, clean tech  raised $3.3 billion, a 71 per cent rise over the year.

 

Wall Street Journal’s blog (October 30 2008), which covered the Ernst & Young’s report highlighted the rise in solar energy, with the September quarter’s stellar performance showing a rise of 55 per cent. The American Wind Energy Association says that 1,389 MW wind power was installed in the September quarter, and for the year to December 2008, the 2008 total will be about 7500 MW. This would generate sufficient generating capacity to power the equivalent of about 2.2 million homes.

 

This will be the fourth year in a row that new wind capacity installations have set records. Texas, the US state with the largest wind power installed added 693 MW in the September quarter, which propels it into the ranks of global leaders. Only Germany, India and Spain had more wind energy capacity installed at the end of 2007.

 

The negative news in wind power came principally from T Boone Pickens, the billionaire oil man, who has been the biggest apostle of wind power. His wind farm, which eventually will have the world’s largest wind power installed is on hold. Pickens (Wall Street Journal October 31 2008) says that the now much cheaper natural gas price over recent weeks puts wind power at an increasing disadvantage. There will be “no new wind,” Pickens says until gas prices rebound.    

 

                                                                         

 

 

Posted under Carbon Abatement Scheme, Climate Change, Economies, European Emission Trading Scheme, Global Warming, Low Carbon Economy, Renewable Energies