Block’s Indicator of Sustainable Growth

by Ray Block

By all accounts, geothermal resources in the world are immense. The Union of Concerned Scientists says that within 10 km (about 33,000 feet) of the Earth’s surface, the amount of heat contains 50,000 times more energy than all the known oil and natural gas reserves in the world.

Greater effort is now being made to exploit these resources, as the need to create low carbon economies becomes more urgent. Although there is a small volume of greenhouse gases involved, geothermal energy is available 24 hours a day, providing base load power at a price almost competitive with coal.

At September 2009, United States with the largest known geothermal resources in the world, is generating geothermal electric power in eight western states. California is the long time leader, with more than 40 geothermal plants providing nearly 5 per cent of the state’s electricity.

The state’s renewable energy requirement of 33 per cent by 2020 will spur more development. Nevada, the second largest geothermal producer has a 25 per cent renewable energy target by 2020, and this will also facilitate increased production. Soon another five states will also be generating electricity.

Total US installed geothermal capacity is currently 3.1 GW. Although representing less than 1 per cent of total US electricity capacity today, the aim is to reach at least 5 per cent of US power needs by 2020, and 10 per cent by 2030. The US Geothermal Energy Association says that 144 projects are now under development in 24 states, which could provide additional electricity capacity of 7 GW.

Up to $338 million in Recovery Act funding was allotted by the Obama Administration in 2009 for the exploration and development of new geothermal fields and research into advanced geothermal technologies. These grants matched on a one-for-one basis with private and non-federal cost share funds will support 123 projects in 39 states.

Conventional US geothermal resources on private and accessible public lands has a mean estimate of 33 GW, while the latest study by the US Geological Survey of geothermal resources in hot rock technology suggest an additional mean estimate of 518 GW available.

While the capacity factor in conventional geothermal production, (the amount of electricity produced) is at least 73 per cent, and may be only 30 per cent in hot rock technology, the overall resources are so large, that one day they may be able to supply much of the country’s electricity needs.

European geothermal resources are mainly in heating and cooling, directly exploiting the aquifers (Paris leads in low and medium energy resources), where the temperature ranges between 30 degrees C. and 150 degrees C. The second way is to produce heat using geothermal ground source heat pumps. The major European producers are Sweden, Italy, France, Hungary, Germany, Denmark.

The EU-27 country geothermal electricity target for 2020 is 6 GW, and for geothermal heating installed 39 GW. Outside the EU, Iceland with about 300,000 people is the geothermal standout,with 17 per cent of its electricity and 87 per cent of its direct heating from geothermal energy.

Everywhere on Earth, the deeper you go, the hotter it gets. Some of the regions are within the “Ring of Fire,” characterised by volcanoes, hot springs and fumaroles, (vents emitting hot gases), where the heat is close to the surface. These areas are around the rim of the Pacific Coast on the US and Canadian west coast – California, Nevada, Alaska, Hawaii, and down the Asian coast to include Japan, China, Philippines and Indonesia.

There is also the Mid-Atlantic Ridge, an underwater mountain stretching from Iceland and the Azores to Antarctica, the East African Rift Valley mainly around Kenya, the East Pacific Rise paralleling the west coast of South America, the Rio Grande Rift running up through New Mexico and Colorado and the Juan de Fuca Ridge (tectonic spreading centre off the coast of Washington state and the adjoining province of British Columbia.)

There are two additional levels of geothermal resources. One of these is a steady supply of milder heat available for direct space heating, at depths down to 200 metres or so, which is available in parts of Europe and North America.

There is also the very large resource at depths of 3 km to 10 km (about 2 to 10 miles), where enhanced geothermal systems (EGS), also known as hot rock technology, has opened up a virtual Pandora box of energy treasures. In addition to the US, Australia, France, Germany and Japan have R&D programs to make EGS commercially viable.

In the EGS process, a fractured reservoir is created at a depth where the rock is hot. Water is continuously injected down a well into the engineered fractures, where the water heats as it flows through. The water is then brought to the surface via production wells, and its heat is extracted to generate electricity in power plants. Finally, the water depleted of its heat, is re-injected to be heated again.

Susan Petty, President of AltaRock Energy, whose company is exploiting an EGS project in Oregon gave evidence to the US Senate Committee on Energy and Natural Resources in 2007.She discussed the economics of the cost of geothermal electricity at depths of 3 km, and temperature of 300 degree C.

Her experience is that EGS at current technology could be generated for a cost of about US$74 MWh. This price includes financing costs and amortising the capital investment of the well field, but before profit. With incremental technology improvement, the cost of power could be cut in half

Posted under Carbon Abatement Scheme, Climate Change, Economies, Global Warming, Low Carbon Economy, Renewable Energies, World Inflation, energy efficiency

by Ray Block

Australia represents only about 1.5 per cent of global greenhouse gases, but on a per capita basis, it ranks No 1 in carbon emissions.

The  carbon pollution reduction legislation, which has been subject to endless committee hearings, and purposedly delayed to start July 1 2012,  to avoid  the disruption of the global downturn, requires only a modest 5 per cent reduction in carbon emissions by 2020 from 2000 levels.

The legislation went through the lower House, but has been held up in the Australian Senate, by a determined rabble of global warming sceptics, despite getting significant legislative concessions by the Rudd government.

If you measure Australia against a significant grouping of carbon emissions targets by other countries, the lucky downunder country comes out poorly.

The Copenhagen summit, from December 7 to 18, will go a long way to an international agreement, which can be codified in 2010, and if need be 2011, so as to slot in when the Kyoto Protocol comes to an end in 2012.

Carbon emission targets so far promised:

*European Union 27-country bloc’s  longstanding commitment to a 20 per cent cut in carbon emissions by 2020 from below 1990 levels. A few of the country membership, such as UK, Belgium, Netherlands would like the EU to move to a unilateral 30 per cent cut.

However, the eastern European members, particularly Poland, which have  coal dependent economies oppose this move, and would like the 2020 target changed to 2030.

*President Obama’s promise for the US is a  17 per cent emissions reduction by 2020 from below 2005 levels, although the cap and trade legislation is held up in the US Senate. According to the WWF, this is equal to a 4 to 5 per cent reduction from below 1990 levels to have a meaningful comparison with the EU target.

President Obama also said his Administration’s overall goal is to reduce emissions 30 per cent below 2005 levels in 2025, 42 per cent below 2005 levels by 2030, and 83 per cent below 2005 levels by 2050.

* China, which is now the world’s largest carbon emitter, with the US the second largest is committed to a meaningful slowing in greenhouse gas emissions. The undertaking is to reduce carbon intensity by 40 to 45 per cent by 2020 compared with 2005 levels. Carbon intensity is the amount of CO2 for each unit of GDP (gross domestic product).

UN climate officials have said to Associated Press that the 40-45 per cent cut would put China on a path to reduce greenhouse gas emissions about 13 per cent from business- as- usual, the level emissions would have reached without any action. As part of its pollution control policy, China has announced that it plans to invest up to US454 billion in environmental protection in the five years to 2015.

  *Japan is committed to a 25 per cent cut in emissions by 2020 from 199o levels. The new Democratic Party government hasn’t spelled out how the emissions cuts are to be achieved. 

But the Japanese steel industry, which has the most efficient emission controls among world steelmakers, will provide their latest technologies for cutting CO2 emissions to Chinese steelmakers.

 In return, the Japanese can include the emissions reductions in their own quotas under the Kyoto Protocol’s clean development mechanism. If more of Japanese industry  follow the same approach, it won’t be too difficult to reach the Copenhagen target.

*Brazil will be tabling its commitment to cut greenhouse gas emissions by between  36.1 per cent and 38.9 per cent of their business-as-usual level by 2020. The country is the fourth biggest carbon emitter in the world, largely due to deforestation in the Amazon. Brazil is looking to international funding to help in the remediation process.

*Canada is undertaking to reduce carbon emissions 20 per cent by 2020 from 2006 levels, although legislation is yet to be introduced. Even so, its emissions would still be 24 per cent higher in 2020 from 1990 levels.

* India is yet to announce a reduction in either carbon intensity, or in emissions, but it will make its plans known at Copenhagen. A range of incentives is shortly  to be announced  for 714 of the nation’s most energy-intensive installations across nine sectors.

As with China, energy efficiencywill be the key, with a national registry for energy-efficiency certificates, which will have a one year tenure. It sounds like a type of cap and trade. Prime Minister Singh says that the government has “a very ambitious national plan to combat climate change.”

 *Indonesia, the third largest carbon emitter in the world is undertaking to  reduce greenhouse gas emissions 26 per cent by 2020. As with Brazil, a strong campaign to save the forests and more of the peatlands, which  provide the carbon sinks would greatly help to achieve the target reductions. 

* South Korea is committing to a 4 per cent reduction by 2020 from 2005 levels.  This is equivalent to a 30 per cent reduction on the business- as-usual projection for 2020.

POSCO, the world’s fourth largest steelmaker, accounting  for 10 per cent of Korea’s total carbon emissions is currently studying the brand new technology of the hydrogen steelmaking process. This technology  doesn’t emit CO2 emissions, which would be a tremendous achievement, if it can be done.

* Russian President Medvedev said his country “would try” to reduce greenhouse emissions by 25 per cent, and in the process seek to increase energy efficiency by 40 per cent. 

* The 5o African countries, which have no plans to cut carbon emissions are demanding that rich countries commit to deep cuts in carbon emissions that add to global warming. In a show of unity, African countries blame advanced economies for using fossil fuels to take the fast track to prosperity, but at the cost os unleashing today’s climate nightmare.

A similar attitude to Africans is likely to be taken by Central and South American countries.

On the table for consideration at Copenhagen is that the rich industrial countries will subscribe US$ 10 billion a year to help developing countries become equipped to cope with climate change, and to make available technology transfers and know how on renewable energy. 

 

*

Posted under Carbon Abatement Scheme, Climate Change, Commodity Prices, Economies, Food, Global Warming, Low Carbon Economy, Renewable Energies, World Inflation, energy efficiency

by Ray Block

For United States and China to collaborate on renewable energy is always  fraught with US politicians trying to outdo themselves, beating their chest, that it has to be made in USA.

A case in point involves the joint venture between A-Power Energy Generation Systems, a member of  the Shenyang Power Group, with two American companies, Cielo Wind Power of Austin Texas, and the US Renewable Energy Group.

The prominent US Democrat Senator, Charles Schumer of New York, is up in arms about the deal. An energy agreement to instal 240 2.5 MW wind turbines on a wind farm in west Texas to produce a total 600 MW of renewable energy at a cost of $1.5 billion is big news even in Texas, the dominant US wind state.

One of the two US companies involved, Cielo Wind Power is a wind energy specialist, having developed 1.15 GW (1,150 MW) of wind energy installations, largely in Texas. The other US firm, US Renewable Energy Group, is one of the largest US private equity groups focussed on investing in renewable energy.

The Chinese company, A-Power is one of the largest providers of distributed power generating systems in China, and although relatively new in wind turbines has a licensing agreement with the German wind  company, Fuhrlander AG and Norwin of Denmark, two long established wind turbine firms.

The US Department of Energy is making available loan guarantees authority for the rapid deployment of renewable energy projects, providing they are located in one of the fifty states, the District of Columbia, or a  US territory.

The Chinese are putting up the bulk of the funds, and this at a time when US banks are unwilling to finance renewable energy projects. Yet Senator   Schumer wants to block funds to projects, unless they use “high value components,” built in United States.

The Green Inc column of the New York Times (November 5 2009) reports a study by the Investigative Reporting Workshop at American University, finding that 84 per cent of green stimulus funding has thus far gone to foreign companies building renewable energy projects in the US.

The real problem is that American renewable energy companies are usually too small,  move  too slowly, and are often hampered by lack of funding , while Asian companies move more swiftly in this new exciting age of renewable energy development.

Reporting from China, New York Times correspondent, Michael Forsythe (November 18 2009) points to the excitement and sheer exhilaration in China, as regions seek to outdo each other in the race to develop alternative energy sources and reduce pollution.

The Breakthrough Institute and the Information Technology and Innovation Foundation in their report Rising Tigers and Sleeping Giant (November 2009) elaborate on this theme.

The speed in North Asia to become world leaders in elaborately transformed manufactures, and particularly in renewable energy, is very engaging, and yet quite worrying for the west, when compared to the much slower United States in gaining  first mover advantage in the new technologies.

The Breakthrough report says that China, South Korea and Japan will invest a total of US$509 billion in clean technology over the next five years (period through to 2013), while the US will invest $171 billion over the same period.

The Breakthrough report describes the exceptional incentives  in China at both the national, regional and local government level to develop clean technology and innovation clusters, including free land, low cost financing, tax incentives, and money for R&D.

In just over three years, Baoding in Central Hebei Province has been transformed into a second Silicon Valley, with nearly 200 renewable energy firms. The Christian Science Monitor’s Peter Ford (August 10 2009) describes the crusader Mayor Yu Qun’s determined stand to make his city a hub of renewable energy. An ancient city, but now a very modern one, proud of his “electricity valley” as the Mayor describes it.

Or take Ordos in Inner Mongolia, the centre of the most modern coal mine  in  the world. Jonathan Watts reporting for the London Guardian on the two faces of China’s coal industry (November 15 2009) says “China is trying to use science to clean up and expand coal production” at the same time.

“Dirty old steel factories are being upgraded or relocated. To rerduce smog, the low chimneys of small thermal power generators are being replaced by the towering smokestacks of more efficient supercritical plants.”

Ordos is also the location of one of the two major coal to diesel plants in China, which has pioneered a direct liquefaction technique, that cracks carbon with hydrogen extracted from water to produce clear diesel.

Ordos is also the centre of a 2GW solar photovoltaics panel array in the Mongolian desert. This is being developed by Arizona based First Solar, the largest solar company in the world, and the first one to join the Standard and Poor’s 500 index. In turn, the First Solar installations will be part of an even larger 12 GW solar project.

China’s fast moves ahead is obscuring to some extent, Japan’s many technologies in the clean energy space. Toyoto’s hybrid Prius and Honda’s hydrogen fuel cell Clarityare two prominent examples of world leadership.  Sanyo, now being acquired by Panasonic is the world’s largest rechargeable battery company, and about the third largest solar cell producer. Japan is also the centre of the exciting energy storage market.

The Chinese are providing the bulk of the finance, but Senator Schumer ants

Posted under Carbon Abatement Scheme, Climate Change, Economies, Global Warming, Low Carbon Economy, Renewable Energies, World Inflation, energy efficiency

by Ray Block

What does Brockovich, Darbee, and US Chamber of Commerce have in common?  The ingredients have all the hallmarks of high drama.

It started with the class action in Anderson v Pacific Gas & Electric, (as portrayed in the movie Erin Brockovich, with Julia Roberts in the lead role).

 Brockovich was the single mother paralegal in the office of Masry & Co, who did the leg work for the trial and subsequent arbitrated class action against PG&E, California’s largest gas and electric utility serving 20 million people.

The class action involved 77 residents in the Mojave desert town of Hinkley, who sued the utility for contaminating the ground water supply, with 370 million gallons of cancer causing chemicals in unlined ponds.

Hinkley on PG&E’s gas pipeline route from Texas to California is the site of  the company’s gas compressor station, where one third of the gas is compressed for the company’s customers in northern and central California.

Gas compression generates heat, and the gas and the compressors have to be cooled with circulating water, which in turn passes through cooling towers. Reducing the problem of corrosion, the company chose to use in the inhibitors, a known cancer causing toxin, chrome 6.

The eventual arbitrated settlement in 1987 was $333 million awarded to the plaintiffs in the class action.

The utility was also required to clean up the environment and stop using chromium.

Act 2 of the drama  involved  the deregulation of energy prices in California in the late 1990s. The manipulative energy rogue trader Enron and others created havoc, with the state’s three energy utilities held to ransom. Sharp price rises and electricity shortages leading in  2001 to blackouts, and eventual Chapter 11 bankruptcy. That was in April 2001.

After Chapter 11 bankruptcy and re-organisation in 2002, PG&E goes through an extended period of transformation.  The appointment of the self proclaimed conservative Peter Darbee in January 2005,  as chairman and chief executive intensifies the round of business and cultural tranformation,  with primary emphasis on customer service.

Peter Darbee had joined PG&E at a critical time in 1999, just before the electricity market was about to undergo radical change. He had worked for AT&T, when the monopoly phone company was trust busted, and did telcom deals for Goldman Sachs, before joining the gas and electricity utility. Like the old Ma Bell, PG&E was then a slow moving bureaucratic institution.

In 2006, Darbee and PG&E commenced a campaign of energy efficiency and choosing renewable energy sources to supplement power from traditional sources.

From their denier role in the 1980s, allowing  residents of Hinkley and other towns close by to die of cancer from contaminated ground water to a born again utility giant, now seen as the most green friendly utility in the US, takes a lot of doing and achieving.

Darbee,who has testified many times about the dangers of climate change is a notable supporter of solar and wind energy, with contracts for 1.3 gigawatts of concentrated solar thermal power and more than 800 megawatts of solar photovoltaics, along with wind energy, small hydro power and geothermal.

The latest solar venture is seeking approval from regulators to purchase 200 megawatts from stealth space solar power company Solaren over 15 years.

The concept of space-based solar power is to place solar panels on a satellite to generate electricity. The technology converts it to  radio frequency on board,  and it is then sent to a ground station in California. The receiver then converts the radio frequency to electricity. which is fed into the power grid. Sounds a bit like geo-engineering to me.

 The diversified energy resources will enable PG&E to reach the Californian requirement of 20 per cent renewable energy level by 2010. 

In August 2009, PG&E said that it is seeking $25 million in US government smart grid stimulus funds to build an underground compressed air storage facility.

This would allow the storage of as much wind energy, as a medium size power plant would produce for about 10 hours. The aim is to smooth out fluctuations on the grid from intermittent supplies of renewable energy. The company is also investigating the use of large lithium-ion batteries also for energy storage. 

PG&E is also spending $2.2 billion to instal about 10 million smart meters by 2011. The company has already installed 1.45 million electric meters and 1.9 million gas meters with two way communications so far. Of those,1.2 million electric meters and 1.8 million gas meters are now being billed through the utility’s network.

The last act of the drama involves PG&E  leaving the biggest business lobby in the world, the US Chamber of Commerce, over the lobby’s ”extreme” positions on climate change.

PG&E’s stand has been joined by three other large electric utilities- Duke Energy of North Carolina, Exelon Corporation of Chicago, and PNM Resources, the largest utility in New Mexico.

In PG&E’s letter of resignation, Peter Darbee wrote: “We find it dismaying that the Chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored. In our opinion, an intellectually honest argument over the best policy response to the challenges of climate change is one thing; disgenuous attempts to diminish or distort the reality of these challenges are quite another.”

 

 

 

 

 

 

Unlike

Posted under Carbon Abatement Scheme, Climate Change, Economies, Fuel & Gas, Global Warming, Low Carbon Economy, Renewable Energies, energy efficiency

by Ray Block

The UN Climate Change chief, Yvo de Boer sees China as the green frontrunner, the world climate change leader of the future.

Although China’s President Hu Jintao didn’t state the country’s emissions target by 2020 at the United Nations General Assembly meeting on climate change (September 22 2009), he confirmed that there would be  deep cuts in carbon intensity over the next decade.

Hu Jintao also confirmed that there would be a 15 per cent increase in renewable energy from 2005 levels by 2020. There would also be a substantial growth in forest coverage by 40 million hectares and in forest stock volume.

Carbon intensity is the amount of carbon dioxide emissions per unit of gross domestic product for each 1,000 yuan (US$147) of economic output.

For the five years to 2010, China set a goal of reducing energy consumption per unit of GDP by 20 per cent to 2010.

A big test for the Chinese will be the need to redouble efforts on carbon intensity from current levels. But the goals for the 12th and 13th Five Year Plans between 2010 and 2020 are still being kept secret.

It will need to be large to have a significant impact, given that between 2001 and 2005, energy consumption grew at 1.2-1.5 times the rate of GDP. As the blog, China Sustainable Energy Energy Program pointed out,”such a low efficiency development pattern is wholly unsustainable. It requires enormous energy input.”

In a report  “China sustainable development strategy report 2009- China’s approach towards a low carbon future,” the team leader Professor WANGI Yi, chief scientist of the CAS Sustainahle Development Strategy sets out a low carbon economic development target.

The recommended scenario is that by 2020, China’s low carbon target be set at 40 to 60 per cent reduction of energy consumption per unit of GDP over the 2005 level, and CO2 emissions per unit of  GDP   be decreasing by about 50 per cent.

The  strategy study group of the Chinese Academy of Sciences suggested that if more restrictive policy measures were adopted for energy saving and carbon reduction, “China’s carbon emissions could be expected to peak between 2030 and 2040, and then stabilise and start to decline afterwards.”

This would be a disappointing outcome for cutting global carbon emissions,as the climate scientists are very concerned that countries have a duty to ensure carbon emissions start to fall before 2020.

Posted under Carbon Abatement Scheme, Climate Change, Commodity Prices, World Inflation, energy efficiency