Block’s Indicator of Sustainable Growth

by Ray Block

It’s becoming readily accepted in the community that energy efficiency is important. But it isn’t really understood that the No1 priority on the road to a low carbon economy is achieving energy savings.

Investment in energy savings in buildings, industry and transportation ranks above investment in new energy sources including wind, solar, biomass and biofuels. The International Energy Agency (IEA), in its World Energy Outlook November 2009, says that end-use efficiency is the biggest contributor to the cutting back of CO2 emissions.

The agency also said that energy efficiency investment has a short payback period in fuel cost savings. Expressed as a fuel source in its own right, the American Council for an Energy-Efficient Economy (ACEEE), says in its report on the cost of saved energy September 2009, that energy efficiency would cost the equivalent of 1.6 cents/kilowatt hour (kWh) to 3.3 cents per kilowatt hour kWh, averaging 2.5 cents/kWh.

This compared with pulverised coal at 7 cents/kWh to 14 cents/kWh, combined cycle natural gas 7 cents/ kWh to 10 cents/kWh, and wind energy 4 cents/kWh to 9 cents/kWh.

This led the authors of the ACEEE report to say that “energy efficiency is by far the least cost resource option. They went on: “it appears to be a resource that continues to renew itself- the more energy efficiency opportunities we look for, the more we find.”

The biggest area for energy savings is in buildings, adding together industrial, commercial and residential, which collectively amounts to 38 per cent of energy use.

This is one and half times energy use in transportation. The figures are derived from a four year international survey by the World Business Council for Sustainable Development (WBCSD.

Energy codes and standards are largely ineffective, and safety standards are not much better. So how do you bring about change? A price on carbon, with appropriate tax incentives helps. There is a big role for research and development. But no matter how much is achieved in R & D, both with new technology and incremental change, the biggest problem remaining is the overwhelming tendency of inertia, clinging to traditional ways of doing things.

George David, chairman of the privately funded Peterson Institute for International Economics in Washington (September 2009) said that “higher carbon costs and improved efficiency technologies will increase the attractiveness of investments and lessen the economic drag of otherwise lower returns. But we still need the stimulus of regulation to get us started”

Two ways of achieving energy savings provide a transformational way of approach.

The first example comes from George David. He quoted the example of newer elevators, which recapture and make available for re-use the energy on descent that was expended on ascent. Reducing energy consumption by 75 per cent for the same speed and load, compared to older models, with non-regenerative elevators.

The other example comes from Green Inc, the environmental blog of the New York Times. It involves the installation of a stationary fuel cell in a 69,000 sq ft supermarket in upstate New York, which has largely supplanted the electricity grid supply for the store’s lighting, heating and cooling requirements.

As the fuel cell supplier, UTC Power says fuel cells don’t have the energy waste of traditional power generation, where more than half of the energy goes up the stack as greenhouse gas. By contrast, fuel cell systems convert heat exhaust into cooling and heating, turning potential waste into usable energy, with an energy conversion efficiency exceeding 85 per cent.

 

 

 

 

 

by Ray Block

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

by Ray Block

Despite the global recession, solar PV (photovoltaics) continued to grow in calendar 2009, increasing by an estimated 5 per cent. However, it largely took to the fourth quarter before the market became revitalised.

Global market estimates from forecaster Solarbuzz, is for an expected 6.37 GW PV in calendar 2009, with European demand accounting for 71 per cent of the market. Germany’s third quarter (July-September) demand of 980 MW was eclipsed by a more robust 1680 MW fourth quarter.

Germany regained the world lead from Spain, after losing the top spot in.2008, with an estimated 2.5 GW installed. After a record Spanish demand of 2.5 GW in 2008, with the inducement of an exceptional level of feed- in-tariff (FIT), the government capped demand for 2009 at 500 MW and reduced the FIT subsidy. As a result, solar companies downsized their staff from 40,000 to 4,000. With a reduced FIT, demand in 2009 fell to only 150 MW.

The Italian government has set a goal of 3 GW PV by 2016, with 2009 demand expected at 400MW. France wants to achieve PV demand of 1GW a year by 2013, with an installed capacity of 5.4 GW by 2020.

US PV demand for calendar 2009 is estimated by Solarbuzz at 556 MW up from 290 MW in 2008. Enterprise Florida and Greentechmedia, in a study of emerging trends in the US market point to the beginnings of a cost based feed-in-tariff, with California supporting a FIT of up to 750 MW total demand. A major growth factor is the enthusiasm for power utility scale PV systems. 16 states currently have a renewable portfolio standard, with specific provisions for support to solar power.

In the next four years, the utility-scale market will begin to rise markedly, outdistancing the residential market. Enterprise Florida and Greentechmedia expect with falling PV system prices to see the “gradual achievement of price convergence between utility-scale PV and wholesale peak electricity prices.” The study suggests that price convergence could occur as early as this year, initially in the No1 PV market in California.

The most remarkable solar PV company so far is First Solar of Tempe, Arizona, with its outstanding success in thin fim cadmium telluride (CdTe) modules, challenging the traditional dominance of crystalline silicon. CdTe modules don’t have the energy efficiency of silicon, but First Solar makes up for that with the ability to decrease radically the cost of solar cells per unit of generated power.

In 2009, First Solar was able to reduce the cost of solar cells to 85 cents (US) per watt, which had been never before achievable.  2009 module production was 1.1GW, almost catching up to industry leaders Q-cells of Germany and Sharp of Japan.

iSuppli forecasts that the thin-film PV module share of the overall market will rise from the 2008 global level of 14.2 per cent to an impressive 34.5 per cent by 2013. First Solar, with nearly 28 per cent of the global market in 2009 is well placed to benefit from this expected growth.

Japan, which had an installed PV capacity of 2.1 GW in 2009 aims to have 28 GW of installed PV by 2020. The government introduced a FIT taking effect on November 1 2009, requiring power utilities to purchase PV generated electricity at Y48/kWh for 10 years.

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

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, energy efficiency, Global Warming, Low Carbon Economy, Renewable Energies, World Inflation

 Wind energy is by far the largest renewable energy source in the world, and its leadership over solar and other renewables is likely to continue in coming years. The implications for the industry including wind turbines, the electricity generating companies, the high voltage transmission lines yet to be developed, and the long term infrastructure investors to be involved in wind farms and wind parks is becoming very big business in the 21^st Century. There is a competitive race for world leadership. This note sets the scene.

 

During calendar year 2009, the extremely disruptive year of very low economic growth world-wide, when venture capital was scarce, at least 26 GW (26,000 MW) of new wind energy was installed in the big three economic blocs- United States, European Union and China. The year set up a new challenge, with China- the country which had doubled new wind energy installations each year over the previous five years to December 2008, almost doubling it again in 2009, and for the first time exceeding new wind energy installations in United States.

 

Preliminary figures for country totals from the global wind energy council (GWEC) and the two country group associations, AWEA in the US, and EWEA in the 27 country- EU, are still being assessed. China stole a march on its economic rivals adding about 10 GW (10,000 MW) in new wind energy installations in 2009 to reach a total capacity of 22.2 GW.

 

United States added only a disappointing 7 GW in new wind energy capacity in 2009 to reach a cumulative installed capacity of 32.2 GW. The first quarter started very strongly, but the financial crisis led to a sharp fall in the second quarter, followed by some growth in the third quarter, and finally a retreat towards the end of the year.The American wind energy history in recent years is marked by a ziz zig pattern of strong growth followed by low or even no growth. This disruptive pattern is associated with periods when the US Congress didn’t renew the production tax credits. This occurred three times in seven years, between 1999 and 2006.

 

Understandably, the wind energy industry needs tax certainly, as a means of encouraging long term infrastructure capital to invest in costly large scale wind farms. The largest wind farm in the world consisting of 627 wind turbines with a total capacity of 781.5 MW opened in Roscoe Texas in October 2009. Significantly, the developer is the German energy supplier, E.ON, and some of the turbines predictably came from Siemens.

 

In 2009, the equally hard hit European Union added about 8.6 GW in new wind energy installations to reach a cumulative capacity of 73.5 GW.Looking forward to 2020, the EU is forecasting installed wind energy capacity of 230 GW, which would comprise 190 GW in onshore installations and 40 GW in offshore installations. This would represent between 14.3 per cent and 16.6 per cent of total electricity consumption in the 27 country community.

 

Denmark, the original home of the modern wind energy industry opened the world’s largest offshore wind park, Horns Rev11, 30 km from its shoreline in September 2009.

For 2030, the EU is forecasting installed capacity of 400 GW, made up of 250 GW onshore and 150 GW offshore. In this scenario, wind energy would represent between 26.2 per cent and 34.3 per cent of total EU electricity consumed.

 

China is currently aiming for 150 GW of cumulative installed capacity by 2020. But it is more than likely that China will continue to surprise, with substantially higher levels of installed capacity. Its six wind bases are mainly located in the north west of the country, with the best wind resources, and where the population is relatively sparse. The National Energy Administration chose Xinjiang, Inner Mongolia, Gansu, Hebei, Jiangsu as the most suitable locations. No estimate for installed capacity in 2030 has yet been released.

 

The US Department of Energy (DOE) report “20% Wind Energy by 2030” was released in July 2008. The 20 per cent refers to the assumption that US wind energy installed capacity by 2030 would be more than 300GW, which would deliver 20 per cent of total electricity consumed.

 

The race for wind energy leadership goes on unabated. It is best seen in the highly competitive market for wind turbines, with Vestas of Denmark hanging on to a slight lead over GE Wind Energy (US). Gamesa (Spain) is in third place, followed by Evercon (Germany), and Suzlon (India) in fifth place

 

Suzlon is the largest offshore wind supplier. No 6 spot goes to German giant, Siemens, and bringing up the rear are three very ambitious Chinese turbine suppliers, destined to be in the top tier – Sinovel,Goldwind and Dongfang.

 

 

 

 

 

 

 by Ray Block

Wind energy, a race for long term leadership

 

By Ray Block December 28 2009

 

Wind energy is by far the largest renewable energy source in the world, and its leadership over solar and other renewables is likely to continue in coming years. The implications for the industry including wind turbines, the electricity generating companies, the high voltage transmission lines yet to be developed, and the long term infrastructure investors to be involved in wind farms and wind parks is becoming very big business in the 21^st Century. There is a competitive race for world leadership. This note sets the scene.

 

During calendar year 2009, the extremely disruptive year of very low economic growth world-wide, when venture capital was scarce, at least 26 GW (26,000 MW) of new wind energy was installed in the big three economic blocs- United States, European Union and China. The year set up a new challenge, with China- the country which had doubled new wind energy installations each year over the previous five years to December 2008, almost doubling it again in 2009, and for the first time exceeding new wind energy installations in United States.

 

Preliminary figures for country totals from the global wind energy council (GWEC) and the two country group associations, AWEA in the US, and EWEA in the 27 country- EU, are still being assessed. China stole a march on its economic rivals adding about 10 GW (10,000 MW) in new wind energy installations in 2009 to reach a total capacity of 22.2 GW.

 

United States added only a disappointing 7 GW in new wind energy capacity in 2009 to reach a cumulative installed capacity of 32.2 GW. The first quarter started very strongly, but the financial crisis led to a sharp fall in the second quarter, followed by some growth in the third quarter, and finally a retreat towards the end of the year.The American wind energy history in recent years is marked by a ziz zig pattern of strong growth followed by low or even no growth. This disruptive pattern is associated with periods when the US Congress didn’t renew the production tax credits. This occurred three times in seven years, between 1999 and 2006.

 

Understandably, the wind energy industry needs tax certainly, as a means of encouraging long term infrastructure capital to invest in costly large scale wind farms. The largest wind farm in the world consisting of 627 wind turbines with a total capacity of 781.5 MW opened in Roscoe Texas in October 2009. Significantly, the developer is the German energy supplier, E.ON, and some of the turbines predictably came from Siemens.

 

In 2009, the equally hard hit European Union added about 8.6 GW in new wind energy installations to reach a cumulative capacity of 73.5 GW.Looking forward to 2020, the EU is forecasting installed wind energy capacity of 230 GW, which would comprise 190 GW in onshore installations and 40 GW in offshore installations. This would represent between 14.3 per cent and 16.6 per cent of total electricity consumption in the 27 country community.

 

Denmark, the original home of the modern wind energy industry opened the world’s largest offshore wind park, Horns Rev11, 30 km from its shoreline in September 2009.

For 2030, the EU is forecasting installed capacity of 400 GW, made up of 250 GW onshore and 150 GW offshore. In this scenario, wind energy would represent between 26.2 per cent and 34.3 per cent of total EU electricity consumed.

 

China is currently aiming for 150 GW of cumulative installed capacity by 2020. But it is more than likely that China will continue to surprise, with substantially higher levels of installed capacity. Its six wind bases are mainly located in the north west of the country, with the best wind resources, and where the population is relatively sparse. The National Energy Administration chose Xinjiang, Inner Mongolia, Gansu, Hebei, Jiangsu as the most suitable locations. No estimate for installed capacity in 2030 has yet been released.

 

The US Department of Energy (DOE) report “20% Wind Energy by 2030” was released in July 2008. The 20 per cent refers to the assumption that US wind energy installed capacity by 2030 would be more than 300GW, which would deliver 20 per cent of total electricity consumed.

 

The race for wind energy leadership goes on unabated. It is best seen in the highly competitive market for wind turbines, with Vestas of Denmark hanging on to a slight lead over GE Wind Energy (US). Gamesa (Spain) is in third place, followed by Evercon (Germany), and Suzlon (India) in fifth place

 

Suzlon is the largest offshore wind supplier. No 6 spot goes to German giant, Siemens, and bringing up the rear are three very ambitious Chinese turbine suppliers, destined to be in the top tier – Sinovel,Goldwind and Dongfang.

 

 

 

 

 

 

 

by Ray Block

Posted under World Inflation

by Ray Block

 Although the Chinese were downright difficult and even hostile in the Copenhagen Accord fizzer, showing off their defiance to impress the allies in the E7 (India, Brazil, Russia, Indonesia, Mexico and Turkey), there is a serious race going on between United States and China over leadership.

 The fact that China would not commit to emissions reductions and to international inspectors doesn’t mean that much. What China has been doing in a flat out campaign extending back to 1978 is to keep on increasing energy efficiency. As Julian Wong said in his blog, GreenLeapForward by 2000, Chinese GDP output required two thirds less energy than it did in 1978.

 From the beginning of 2006 to the end of  2010, the headline target has been to reduce energy intensity, that is the amount of primary energy per unit of GDP by 20 per cent. Now the big goal is to further reduce energy intensity per unit of GDP by 40 to 45 per cent by 2030.

 The Chinese have caught up to the Americans in modernization of plant and equipment, and at this rate of growth will leave them behind in the time range 2020-2030.

 A report in China Daily, and further circulated by Reuters dated August 18 2009, says that a panel from the chief planning body, the National Development and Reform Commission (NDRC) and the Development Research Center of the State Council, are saying that with the right policies, emissions could slow after 2020, with a peak around 2030.

 The emphasis is to invest significantly in low carbon technology R&D, and this is what the Chinese are doing.

 I believe that once China’s emissions peaks, the next step is that they will move quickly to be carbon neutral at least by 2050, if not before. Carbon neutral is to achieve net zero carbon emissions by balancing the carbon generated with an equivalent amount sequestered (that is stored underground), or offset.

 Norway is expecting to be carbon neutral by 2030, which given the export commodity base of oil resources, and 80 per cent of its energy usage coming from hydro power makes it understandable, that they can move relatively quickly.

 Industrialised Sweden is aiming to be carbon neutral by 2050, with renewable energy levels at 50 per cent by 2020. Sweden made a u-turn in 2009, having voted decisively in 1980 to ban expansion of its 10 nuclear power stations, and pledged to close them all down by 2010. Now Sweden is embracing nuclear technology with a new excitement, and so too are a number of other European countries.

 If China as probably the largest superpower by the mid century can reach carbon neutrality by 2050, that will be a giant step forward.

 

 

 

   

 by Ray Block

Zero emissions by 2050?

By Ray Block December 23 2009

 

Although the Chinese were downright difficult and even hostile in the Copenhagen Accord fizzer, showing off their defiance to impress the allies in the E7 (India, Brazil, Russia, Indonesia, Mexico and Turkey), there is a serious race going on between United States and China over leadership.

 

The fact that China would not commit to emissions reduction and to international inspectors doesn’t mean that much. What China has been doing in a flat out campaign extending back to 1978 is to keep on increasing energy efficiency. As Julian Wong said in his blog, GreenLeapForward by 2000, Chinese GDP output required two thirds less energy than it did in 1978.

 

From the beginning of 2006 to the end of  2010, the headline target has been to reduce energy intensity, that is the amount of primary energy per unit of GDP by 20 per cent. Now the big goal is to further reduce energy intensity per unit of GDP by 40 to 45 per cent by 2030.

 

The Chinese have caught up to the Americans in modernization of plant and equipment, and at this rate of growth will leave them behind in the time range 2020-2030.

 

A report in China Daily, and further circulated by Reuters dated August 18 2009, says that a panel from the chief planning body, the National Development and Reform Commission (NDRC) and the Development Research Center of the State Council, are saying that with the right policies, emissions could slow after 2020, with a peak around 2030.

 

The emphasis is to invest significantly in low carbon technology R&D, and this is what the Chinese are doing.

 

I believe that once China’s emissions peaks, the next step is that they will move quickly to be carbon neutral at least by 2050, if not before. Carbon neutral is to achieve net zero carbon emissions by balancing the carbon generated with an equivalent amount sequestered (that is stored underground), or offset.

 

Norway is expecting to be carbon neutral by 2030, which given the export commodity base of oil resources, and 80 per cent of its energy usage coming from hydro power makes it more meaningful, that they can move relatively quickly.

 

Industrialised Sweden is aiming to be carbon neutral by 2050, with renewable energy levels at 50 per cent by 2020. Sweden made a u-turn in 2009, having voted decisively in 1980 to ban expansion of its 10 nuclear power stations, and pledged to close them all down by 2010. Now Sweden is embracing nuclear technology with a new excitement, and so too are a number of other European countries.

 

If China as probably the largest superpower by the mid century can reach carbon neutrality by 2050, that will be a giant step forward.

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