Sunday, May 6, 2012

The End of Clean Energy Subsidies?

The federal government has given generously to the clean energy industry over the last few years, funneling billions of dollars in grants, loans and tax breaks to renewable power sources like wind and solar, biofuels and electric vehicles. “Clean tech” has been good in return.


During the recession, it was one of the few sectors to add jobs. Costs of wind turbines and solar cells have fallen over the last five years, electricity from renewables has more than doubled, construction is under way on the country’s first new nuclear power plant in decades. And the United States remains an important player in the global clean energy market. 
 
Yet this productive relationship is in peril, mainly because federal funding is about to drop off a cliff and the Republican wrecking crew in the House remains generally hostile to programs that threaten the hegemony of the oil and gas interests. The clean energy incentives provided by President Obama’s 2009 stimulus bill are coming to an end, while other longer-standing subsidies are expiring.
If nothing changes, clean energy funding will drop from a peak of $44.3 billion in 2009 to $16 billion this year and $11 billion in 2014 — a 75 percent decline. 
This alarming news is contained in a new report from experts at the Brookings Institution, the World Resources Institute and the Breakthrough Institute. It is a timely effort to attach real numbers to an increasingly politicized debate over energy subsidies. While Mr. Obama is busily defending subsidies, the Republicans have used the costly market failure of one solar panel company, Solyndra, to indict the entire federal effort to encourage nascent technologies. 
The Republican assault obscures real successes that simply would not have been possible without government help. Wind power is a case in point. By spurring innovation and growth, a federal production tax credit for wind amounting to 2.2 cents per kilowatt-hour has brought the cost of electricity from wind power to a point where it is broadly competitive with natural gas, sustaining 75,000 jobs in manufacturing, installation and maintenance. 
But the tax credit is scheduled to expire at the end of this year, with potentially disastrous results: a 75 percent reduction in new investment and a significant drop in jobs. That is just about what happened the last time the credit was allowed to lapse, at the end of 2003. 
This is clearly the wrong time to step away from subsidies. But it may be the right time, the report says, to institute reforms, both to make the programs more effective and to make them more salable to budget hawks. One excellent proposal is to make the subsidies long term (ending the present boom or bust cycles) but rejigger them to reward lower costs and better performance. 
The idea is not to prop up clean tech industries forever. It is to get them to a point where they can stand on their own — an old-fashioned notion that, one would hope, might appeal even to House Republicans.

The End of Clean Energy Subsidies?

Friday, April 6, 2012

Origin to Develop Cleaner Electricity for City of Sydney


Origin Energy Limited today announced an agreement with the City of Sydney which will see it lead the development of low-carbon, cost efficient trigeneration precincts across central Sydney, contributing to a cleaner energy supply for Australia's largest city.

Under the terms of the Heads of Agreement, Origin's wholly owned subsidiary Cogent Energy, will invest $ 100 million over a 10 year period to build trigeneration precincts in four zones across central Sydney.

Trigeneration involves using natural gas-powered engines to generate on-site electricity. It is a highly efficient process, as the waste heat from the engine is captured and re-used to provide heating, or for conversion to chilled water for cooling through an absorption chiller. Using gas as the fuel source offers the potential for a significant reduction in carbon emissions.

Origin General Manager Retail Markets, Mr Jim Galvin said, 'Origin is committed to meeting customers' energy needs today, and investing in the energy solutions for tomorrow. This means finding and developing new energy solutions which can provide Australians with a cleaner, reliable and affordable supply of energy.

'Working in partnership with large organizations like the City of Sydney, Origin is actively installing smarter technology including trigeneration systems, which use energy more efficiently, reduce carbon emissions and also deliver economic benefits to customers.

'As a leader in the installation of trigeneration in Australia, Origin is already demonstrating these savings with customers. In 2011, Origin worked with Investa Property Group to develop Australia's first open commercial trigeneration precinct in Sydney. Origin is also building a groundbreaking trigeneration precinct in Melbourne,' Mr Galvin said.

Trigeneration is a compelling, alternative energy solution that helps lower carbon emissions and network demand, while increasing energy efficiency and power security and reducing costs for large energy users, for example commercial buildings.

Trigeneration solutions offers owners of commercial buildings the opportunity to attain high standards of energy efficiency. Commercial buildings account for approximately 10 per cent of Australia's greenhouse gas emissions, according to Climateworks' Low Carbon Growth Plan for Australia. The success of this initiative and the proliferation of similar initiatives in Australia's central business districts could help drive material reductions in greenhouse gas emissions.

Precincts and customers for the first stage of the trigeneration project are currently being negotiated, including City of Sydney's own sites. It is expected that the plants will be constructed from 2013, as customers are identified and secured. Origin will be responsible for the ongoing operation and maintenance of the plants.



Origin to Develop Cleaner Electricity for City of Sydney

Saturday, February 11, 2012

Clean-Tech's Surge Masking Troubled Times


SOMETHING very unusual has been happening in the Australia sharemarket. In each of the past three months and for the last quarter as a whole, Australian clean-tech stocks have outperformed the broader index by a ratio of about two to one.
In January, the ACT Australian CleanTech Index, which comprises 77 local stocks with a combined market cap of $8 billion, recorded a 10 per cent gain, double the rise of the Australian sharemarket's benchmark S&P/ASX 200.

Over the last three months, the CleanTech index has enjoyed a gain of 5.5 per cent, compared with a 1.9 per cent loss in the broader index.

Clean-Tech's Surge Masking Troubled Times

Tuesday, January 31, 2012

Realities of Scale Cast Doubts on Gillard’s Carbon Tax and Clean, Green Future


Viewed from a practical background as an electronics trouble-shooter, it seems to me that the Gillard Government’s “clean energy future” is just a document of hope and uncertainty with a glossy cover.
Overblown expectations of wind and solar power sit at the heart of its plans, and it doesn’t take an Einstein to spot the exaggerated claims and glaring errors of scale.

The Gillard Government would have you believe that it is very simple. “Big Polluters”—500 of them—are to be “supertaxed” creating a simple cost incentive to reduce CO2 emissions.

In Victoria, the Latrobe Valley‘s coal-fired electricity generators can do little to change their ways. Paying the tax is their only real option, and consumer tariffs will rise accordingly. Low income households are to be compensated, emissions will stay the same, and nothing will be gained, except some tax revenue for government coffers.

Many people seem to be under the delusion that this carbon tax will fund the replacement of dirty coal with clean, green power. They assume that the much hyped “clean energy future” sold by Gillard and Brown has it all worked out and under control: the “big polluters” are to pay, and any additional costs to consumers will be minimal. A little research into the detail and the realities of scale uncovers the hidden jumbo amongst the glib tossings of our wry-smiling government.

Consider the situation in Victoria.

Any attempt to supply the state’s peak electricity demand of about 10,000 MW from wind and solar will cost tens of billions of dollars, a cost that will inevitably be passed on to consumers. A current submission to the Victorian Government with cost estimate for our wind-powered future offers a clue to the direction some would have us take, the scale of expenditure involved and what it will do to the industries on its hit list. It is available here.

Cost is only part of the problem. The other, bigger issues are those of scale and nature itself, which, in my opinion, also fail to add up.

Averaged over a month or so, a typical 90-metre diameter wind turbine in Victoria, rated at 2MW, generates only about 30 per cent of its 2MW rating, about 0.6MW, due to wind variability. This is known as capacity factor. Capacity factors of some Australian turbines are listed here.

Ten thousand such turbines would be needed to supplant the 6000MW output of the Latrobe Valley’s coal fired plant on a day of average wind speed. Latest figures from the US Department of Energy list the average “overnight” construction cost of wind generators in the US at US$2438 per kW. (See Table 2, line 26 wind, available here.)

On these figures 2MW turbines would cost US$4.87 million each. Ten thousand of same, for Victoria alone, would cost the Australian taxpayer $US 48.7 billion, though economies of scale would no doubt reduce that figure somewhat.

Ignoring secondary technicalities, such as environmental impact, the enormous costs and electrical losses incurred in lengthy transmission lines, made necessary by wind power’s need for “geographical dispersion” a hypothetical string of ten thousand 90-metre diameter turbines, spaced 100 metres apart in the prime location, along the Victorian coast, would stretch all the way from South Australia to the NSW border.

Even then there is no guarantee that large, slow-moving weather systems would not sometimes create circumstances where supply couldn’t meet demand for periods of hours, perhaps days. Nature will always have the final say in matching supply to demand, and we will be the ones who must make the alternate arrangements.

Full baseload back up from other sources will always be required if outages are to be avoided. Who wants to get stuck in a lift, or walk home, when public transport grinds to an untimely halt due to catastrophic load-shedding?

There are also lessons available from the experience of others, which should serve as a warning to our decision makers. (See ‘A problem with wind’ and ‘Wind power failing to deliver the energy Scotland needs’.)
Wind turbines provide a clean, but costly and intermittent adjunct to baseload power, they are not the answer for cities full of industry, mass transport, factories, with shopping centres, street lighting, and millions of power-dependant consumers. Many, it seems, are pinning their hopes on wind power, but promoting it beyond its capabilities can only lead to very expensive failure.

So where will our 24-7 baseload power come from?

Solar-thermal with storage is the other green answer we hear a lot about in latte-land.

In the sunny desert climes of Spain and the US, solar/storage plants certainly can produce power from stored heat even after sunset, but output fizzles after 12-16 hours. We could no doubt draw intermittent power from a source such as this, but not without full baseload back-up for all those days/weeks of cloudy weather we live with in southern Australia.

Once again realities and matters of scale spoil the fairytale. The total construction cost of a solar/storage plant such as the 110MW Crescent Dunes project in Nevada, is estimated at US$1billion, or about US$9.1 million per MW.

To replace the Latrobe Valley’s 6000MW coal-fired installation with this technology would call for 54 such plants at US$1 billion each, a total of US $54 billion. Scaled up from Crescent Dunes, a 6000MW complex would cover 392 sq kilometers and need unfailing sunshine, often a rare commodity in southern Australia.
Maintenance, including maintaining peak reflectivity of some 900,000 computer controlled heliotats (mirrors) permanently exposed to the elements, would very likely present formidable practical problems.

Back in the real world, southern Victoria’s July sunshine averages 3 hours per day and is sometimes zero for days. Our remote desert areas fare better, but not well enough for the standard of reliability required. Long distance transmission once again becomes a limiting factor.

Put kindly, our green energy future is positive thinking on steroids. The technological miracles upon which it is predicated, are not on the cusp of discovery as many believe. They are already here, and they are inherently problematical. No amount of taxpayer-funded research into wind and sunshine will tame the natural perversity of nature, which condemns the exploitation of its elements to accessory status, regardless of well intentioned hopes and dreams

A baseload capability virtually equal to peak demand is still necessary if power outages and chaos are to be avoided at all hours, and in all weathers. Having ruled out the nuclear option, burning gas instead of coal remains the only 24-7 generating option for Victoria’s largely urbanized population. If we really do have more gas than common sense, we just need a large pipe, a generating site or two, and a willingness to pay at least double for a ‘bandaid’ solution.

Compared to “renewables” construction of gas-fired power stations is relatively inexpensive, typically about $1.2million per MW, though “carbon capture” now on the horizon, may eventually add significantly to that cost. The cost of a typical plant can be seen on fact sheet A.

Even the Greens don’t dispute Victoria’s peak power need of 10,000MW. While the Latrobe Valley can supply 6000MW, Snowy Mountains hydro. and other sources can be imported into the mix to meet the occasional 10,000 MW demand.

A 10,000 MW gas-fired plant would be required to cover Victoria’s needs, at a bare bones cost of around $12 billion. Added to this is a long list of ancillaries, which are difficult to quantify, these include pipelines, distribution terminals, transmission towers, access roads, switching yards, land acquisitions, environmental management, legal costs maintenance, price blow-outs, and of course some “showcase renewables” The final outcome would most likely include all three, wind solar and gas, and the price – enormous.

There will be a scramble for dwindling funds from Canberra’s carbon tax fund, extracted from the 500 big polluters, but this revenue stream has been predicted by many to last about as long as their taxi ride to the airport.

One thing seems certain. If big green power gets its way, the taxpayer/consumer will end up with the bill, regardless of whether he/she voted to receive it. It is hard to see how multi-billion dollar projects such as these can be funded without huge increases in energy tariffs, which are likely to soar by two or three hundred percent to service the vast capital costs.

Measured out by ‘smart’ meters, the future price of electricity may depend literally on the price of gas, the time of day, and the weather forecast .

If anyone believes that Victoria’s share of the carbon tax extracted from a mere 500 targeted businesses will deliver us all nice green power at “little extra cost” they’d believe that little green pigs can fly. To believe it, you’d need to disregard the realities of scale, the limits of technology, the huge capital costs, and switch off any remnants of human intelligence.

But lots of people just swallow it whole … just ask around, it’s a worry!


Realities of Scale Cast Doubts on Gillard’s Carbon Tax and Clean, Green Future