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Bridging climate science, citizens, and policy


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Climate & Energy Links – Sep. 12, 2013

Here are some stories I found interesting this week:

California’s GHG emissions are already lower than the 2015 threshold established as part of California’s cap-and-trade policy.  The reasons emissions fell more than expected include the slow economy and relative widespread renewable energy deployment.  The problem with this is the lack of innovation.  We have seen what companies do with no incentive to innovate their operations: nothing that gets in the way of profit, which is the way companies should operate.  That’s why we need regulations – to incentivize companies to act in the public interest.  Should CA adjust future cap thresholds in light of this news?

No surprise here: Alter Net had a story detailing the US Department of Energy’s International Energy Outlook and the picture isn’t pretty (and I’m not talking about the stock photo they attached to the story – that’s not helpful).  Experts expect fossil fuels to dominate the world’s energy portfolio through 2040 – which I wrote about last month.  This projection will stand until people push their governments to change.

Scientific American’s latest microgrid article got to the point: “self-sufficient microgrids undermine utilities’ traditional economic model” and “utility rates for backup power [need to be] fair and equitable to microgrid customers.”  To the first point, current utility models will have to change in 21st century America.  Too much depends on reliable and safe energy systems.  The profit part of the equation will take a back seat.  Whatever form utilities take in the future, customers will demand equitable pricing schemes.  That said, there is currently widespread unfair pricing in today’s energy paradigm.  For example, utilities continue to build coal power plants that customers don’t want.  Customers go so far as to voluntarily pay extra for non-coal energy sources.  In the end, I support microgrids and distributed generation for many reasons.

A Science article (subs. req’d) shared results of an investigation into increasing amplitude of CO2 oscillations in the Northern Hemisphere in the past 50 years.  This increase is greater for higher latitudes than middle latitudes.  The increase’s reason could be longer annual times of decomposition due to a warming climate (which is occurring faster at higher latitudes).  Additional microbial decomposition generates additional CO2 and aids new plant growth at increasing latitudes (which scientists have observed).  New plant growth compounds the uptake and release of CO2 from microbes.  The biosphere is changing in ways that were not predicted, as I’ve written before.  These changes will interact and generate other changes that will impact human and ecosystems through the 21st century and beyond.

And the EPA has adjusted new power plant emissions rules: “The average U.S. natural gas plant emits 800 to 850 pounds of carbon dioxide per megawatt, and coal plants emit an average of 1,768 pounds. According to those familiar with the new EPA proposal, the agency will keep the carbon limit for large natural gas plants at 1,000 pounds but relax it slightly for smaller gas plants. The standard for coal plants will be as high as 1,300 or 1,400 pounds per megawatt-hour, the individuals said Wednesday, but that still means the utilities will have to capture some of the carbon dioxide they emit.”  This is but one climate policy that we need to revisit in the future.  This policy is good, but does not go far enough.  One way or another, we face increasing costs; some we can afford and others we can’t.  We can proactively increase regulations on fossil fuels which will result in an equitable cost comparison between energy sources.  Or we can continue to prevent an energy free market from working by keeping fossil fuel costs artificially lower than they really are and end up paying reactive climate costs, which will be orders of magnitude higher than energy costs.


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Recent Carbon Market News – April 2013

I wrote about some carbon market-related items I ran across last month. While I haven’t had time yet to read the RGGI report that Jason Brown linked to (research and family duties leaves very little time for anything else), I have read additional items since that post that I want to collect here for when I do have more time.  Let me state at the outset that I think carbon markets are one piece of a large puzzle.  From what I’ve read to date, I get the impression that most carbon markets are not set up in such a way (yet) that actually addresses what I think they’re supposed to address: a reduction in greenhouse gas emissions, especially CO2.  Part of the reason for this is the way the groups set up and managed markets.  This results from lack of appropriate policy that demands of and allows for organizations to set up and run an efficient market.  To close this introduction, I will observe again that most economists recommend a carbon tax if the true intent of a policy is to reduce emissions.  I was surprised to learn this since I don’t think most economists are bleeding-heart liberals; nor do I think they are part of the vast conspiracy to establish a one-world government that controls every aspect of our lives.  They base their recommendation on fundamental economic principles – a scary thought in today’s reactionary world, I know.

First, some news: “The European Parliament this week voted 334-315 (with 60 abstentions) against a controversial “back-loading” plan that aimed to boost the flagging price of carbon, which since 2008 has fallen from about 31 euros per tonne to about 4 euros (about $5.20). Since the vote, the price has fallen even farther, to 2.80 euros.”

What does “back-loading” mean?  Back-loading would have taken some allowances out of the European market for two years.  Without as many allowances, the price of carbon likely would have increased. How over-allocated is the market?  “The surplus is 1.5 billion-2 billion tonnes, or about a year’s emissions.”  There are varying opinions as to what the appropriate price should be to achieve behavioral change.  Back-loading might have increased the price to ~10 euros (1/3 its original price, which many people think is the minimum necessary).  As I wrote last year, one fundamental problem with the European market was the number of allowances was far too high.  But even if the price was “right”, would carbon markets work?  Probably not right away.  Another problem with them is intense lobbying by fossil fuel entities (to weaken the efficacy of the market; they abandon calls for “free market” support when it comes to carbon taxes/markets) as well as the corruption and non-transparency in the market.

The California cap-and-trade scheme establishes a floor and a ceiling for price, which might alleviate some of the problems the Euro ETS has.  The European scheme, by keeping carbon prices so low, sends the wrong signal.  Thus, power utilities are switching from natural gas to coal, despite the fact that burning coal releases twice as much carbon per unit of energy produced.  In that sense, the US energy market is acting correctly when falling natural gas prices encourage utilities to switch from coal to natural gas.  The European’s situation leads to an interesting dilemma.  They have admonished the US for decades on lack of climate action.  Yet Europe did not achieve the first round of Kyoto Protocol-inspired emissions targets and if they continue the switch from cleaner fuels to dirtier fuels, they will not hit the next round they set for themselves either.

Steffen Böhm’s Guardian article ends with this:

None of these will provide a one-fits-all solution. But we cannot afford to lose another 15 years in our quest to rapidly decarbonise our economies, businesses and societies. Carbon markets have given the appearance of us doing something about climate change, while actually legitimising the constant rise of emissions. We need to go back to the drawing board and come up with solutions that actually work in practice.

One solution could be the implementation of new cap-and-trade schemes in other countries, as this CleanTechnica article discusses.  If other planners examine the European scheme and make efforts to correct as many mistakes as possible, then include mechanisms to trade with other schemes around the world, the Europeans may not abandon their market.  That would also give the Europeans time to see what solutions are implemented around the world and eventually include them in their own program.  The Chinese, as is other energy-climate topics, are very important in this regard, not only because they are currently the largest global emitters.  The Chinese government can put programs in place that are not subject to the same kind of political pressures present in the US or Europe.

The US is also very important for the future of markets, emissions, and concentrations.  The US of course currently does not have a cap-and-trade scheme, thanks to the outsized political influence fossil fuel companies have.  Small schemes exist or are coming on-line however.  The Regional Greenhouse Gas Initiative (RGGI) has been in operation across the Northeast US for six years and has a mechanism to reduce allocations, which was beneficial with the recent coal-to-gas switch.  California’s system came online within the last year.  Given the size of the California economy, if this market is more successful than the European market, we can expect additional good news and participation.  If gruops connect existing these markets, and new ones, the prospect for emissions reductions is better than it looks today.  As Böhm wrote, the time for half-measures is long gone.  The world needs smart, aggressive action to avoid the worst global change effects at the end of the century.  Carbon markets are likely a part of the solution, so long as they’re planned and managed well.


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Can Carbon Emissions Be Reduced In Electricity Generation While Including Variable Renewables? A California Case Study

This is a class paper I wrote this week and thought it might be of interest to readers here.  I can provide more information if desired.  The point to the paper was to write concisely for a policy audience about a decision support planning method in a subject that interests me.  Note that this is only from one journal paper among many that I read every week between class and research.  I will let readers know how I did after I get feedback.  As always, comments are welcome.

40% of the United States’ total carbon dioxide emissions come from electricity generation.  The electric power sector portfolio can shift toward generation technologies that emit less, but their variability poses integration challenges.  Variable renewables can displace carbon-based generation and reduce associated carbon emissions.  Two Stanford University researchers demonstrated this by developing a generator portfolio planning method to assess California variable renewable energy penetration and carbon emissions (Hart and Jacobson 2011).  Other organizations should adopt this approach to determine renewable deployment feasibility in different markets.

The researchers utilized historical and modeled meteorological and load data from 2005 in Monte Carlo system simulations to determine the least-cost generating mix, required reserve capacity, and hourly system-wide carbon emissions.  2050 projected cost functions and load data comprised a future scenario, which assumed a $100 per ton of CO2 carbon cost.  They integrated the simulations with a deterministic renewable portfolio planning optimization module in least-cost and least-carbon (produced by minimizing the estimated annual carbon emissions) cases.  In simulations, carbon-free generation met 2005 (99.8 ± 0.2%) and 2050 (95.9 ± 0.4%) demand loads in their respective low-carbon portfolios.

System inputs for the 2005 portfolio included hourly forecasted and actual load data, wind speed data generated by the Weather Research and Forecasting model, National Climatic Data Center solar irradiance data, estimated solar thermal generation, hourly calculated state-wide aggregated solar photovoltaic values, hourly temperature and geothermal data, and approximated daily hydroelectric generation and imported generation.  They authors calculated 2050 load data using an assumed annual growth rate of 1.12% in peak demand and 0.82% growth in annual generation.

The Monte Carlo simulations addressed the uncertainty estimation of different system states.  As an example, the authors presented renewables’ percent generation share and capacity factor standard deviations across all Monte Carlo representations.  The portfolio mix (e.g., solar, wind, natural gas, geothermal, and hydroelectric), installed capacities & capacity factors of renewable and conventional energy sources, annual CO2 emissions, expected levelized cost of generation, and electric load constituted this method’s outputs.

A range of results for different goals (i.e., low-cost vs. low-carbon), the capability to run sensitivity studies, and identification of system vulnerabilities comprise this method’s advantages.  Conversely, this method’s cons include low model transparency, subjective definition and threshold of risk, and a requirement for modeling and interpretation expertise.

This method demonstrates that renewable technologies can significantly displace carbon-based generation and reduce associated carbon emissions in large-scale energy grids.  This capability faces financial, technological, and political impediments however.  Absent effective pricing mechanisms, carbon-based generation will remain cheaper than low-carbon sources.  The $100 per ton of CO2 assumption made in the study’s 2050 portfolio is important, considering California’s current carbon market limits, its initial credit auction price of $10.09 per metric tonne (Carroll 2012), and its a $50/ton price ceiling.  In order to meet the projected 2050 load with renewable sources while reducing emissions, technological innovation deserves prioritization.  More efficient and reliable renewable generators will deliver faster investment returns and replace more carbon-based generators.  Improved interaction with all stakeholders during the planning phase of this endeavor will likely reduce political opposition.

Carroll, Rory. 2012. “California Carbon Market Launches, Permits Priced Below Expectations.” Reuters, November 19. http://www.reuters.com/article/2012/11/19/us-california-carbonmarket-idUSBRE8AI13X20121119.

Hart, E. K., and M. Z. Jacobson. 2011. “A Monte Carlo Approach to Generator Portfolio Planning and Carbon Emissions Assessments of Systems with Large Penetrations of Variable Renewables.” Renewable Energy 36 (8): 2278–2286.

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