NewEnergyNews: ASIA, THE U.S. AND THE NEW ENERGY RACE

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

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YESTERDAY

  • THE STUDY: WHY THE OIL & GAS INDUSTRY BACKS AN ALL-OF-THE-ABOVE ENERGY POLICY
  • QUICK NEWS, July 22: U.S. DOE FORESEES NEW ENERGY; THE BEST CITIES FOR NEW ENERGY; ENERGY STORAGE TO BE $50BIL MRKT
  • THE DAY BEFORE

  • THE STUDY: THE COST OF ADDING SOLAR TO A UTILITY’S OPERATIONS
  • QUICK NEWS, 7-21: U.S. WIND, SOLAR TO GROW THROUGH 2020; NEW GEOTHERMAL RISING; CHINESE HAVE RIGHTS IN OREGON WIND BUY
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    THE DAY BEFORE THE DAY BEFORE

  • Weekend Video: Colbert Gets Into Coal Rolling
  • Weekend Video: How Solar Power Plants Store And Use Solar Energy
  • Weekend Video: A Story About People And Wind Energy
  • THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-THE CLIMATE CHANGED WORLD IS NOW 5 TIMES MORE DANGEROUS
  • FRIDAY WORLD HEADLINE-THE MONEY IN SOLAR, Q2 2014
  • FRIDAY WORLD HEADLINE-EU STILL GROWING OCEAN WIND
  • FRIDAY WORLD HEADLINE-$109MIL FROM GERMAN BANK BACKS KENYA GEOTHERMAL
  • AND THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, July 17:

  • TTTA Thursday-THE PREMATURE EVACUATION FROM CLIMATE CHANGE EXCITEMENT
  • TTTA Thursday-NEW ENERGY TO SUSTAIN BIG GROWTH – EIA
  • TTTA Thursday-SOLAR’S COST TO UTILITIES
  • TTTA Thursday-HOW UTILITIES CAN EVOLVE IN A NEW ENERGY WORLD
  • THE LAST DAY UP HERE

  • THE STUDY: HOW TO PROTECT A CAP AND TRADE PROGRAM
  • QUICK NEWS, July 16: 88% OF NEW U.S. POWER IN MAY WAS NEW ENERGY; THE FIGHT FOR WIND IN OHIO; U.S. CRITICAL SYSTEMS REGULARLY BREACHED
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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  • Tuesday, November 24, 2009

    ASIA, THE U.S. AND THE NEW ENERGY RACE

    Asia Beats U.S. 3-1: Major New Report on US vs. Asian Competitiveness in Clean Energy Technology
    November 18, 2009 (Breakthrough Institute)

    SUMMARY
    Asian powers are winning the competition to dominate New Energy, a 21st century version of the Space Race in which the U.S. beat the USSR to the moon. And the governments of China, Japan and South Korea are aggressively outspending the U.S. on research, development and deployment by at least 3-to-1 to extend their superiority while the U.S. stumbles over policy inaction and fades.

    Even if the best proposals now working their way through Congress become law, the U.S. will invest no more than $172 billion in the next 5 years while China alone will invest $397 billion.

    Those are the findings of Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate the Clean Energy Race By Out-Investing the United States, by Breakthrough Institute and the Information Technology and Innovation Foundation. It presents 5 core findings:

    click to enlarge

    (1) The U.S. is already losing the new Space Race-like competition and the 3-to-1 Asian spending advantage planned for the next 5 years will set them up to lure trillions in private sector investments. The U.S. may grab some joint venture fruits of their growth but the Asian powerhouses will reap the largest bounty in jobs, tax revenues, and indirect benefits.
    (2) The government spending for New Energy research, development and deployment (RD&D) in Asia will generate economies of scale, learning-by-doing, and innovations that will spawn new infrastructure and new economic leverage.
    (3) If the U.S. allows the New Energy “spending gap” to continue, it will lose the equivalent of a new Space Race and become a New Energy importer which will, in turn, hamper its short-term economic recovery and its long-term competitiveness.
    (4) The present House and Senate energy and climate bills are inadequate to get the U.S. back into the Race, lacking funding for RD&D to match the rising Asian New Energy powers.
    (5) If the U.S. hopes to remain competitive, it must not rely on the private sector and “small, indirect and uncoordinated incentives” but must commit to “large, direct and coordinated” federal investment.

    click to enlarge

    COMMENTARY
    The Asian government investment has spanned a spectrum from RD&D, private innovation, scaling up manufacturing capacity, and building infrastrucuture and domestic markets. Where governments spend, the private sector sees less risk. Confidence grows and economies of scale emerge.

    U.S. energy and climate policy has been inadequately aggressive to attract private scaling up.

    Global private New Energy (NE) and Energy Efficiency (EE) investment is estimated to be $450 billion per year by 2012 and $600 billion by 2020. Without a commitment from the federal government, the U.S. will not reap the largest share of the benefits of that explosion of spending and building.

    click to enlarge

    Instead, Asia’s New Energy “tigers” will extend their “first-mover advantage.”

    In 2009, the first Chinese-manufactured wind turbines will be transported for use in a U.S. wind project, a $1.5 billion installation. Though U.S. installed wind capacity is growing, most of its turbines are manufactured outside the country.

    Plans for new U.S. high-speed rail projects will require Asian hardware because there are no domestic manufacturers. China, Japan and South Korea all have more new nuclear plant-building capacity. The U.S. builds less than 10% of its solar cells. And it is behind and falling back in battery electric vehicle (BEV) technology.

    click to enlarge

    To now, the U.S. has attracted the largest part of private sector investment in NE and EE but a shift toward investment in Asia is ongoing. From 2000 to 2008, $52 billion in private capital went into U.S. NE and EE and $41 billion went to China. But China’s share increased each year and it passed the U.S. in 2008. On the basis of incentives and policies, a recent Deutsche Bank study rated China and Japan "low-risk" places to invest in NE and EE and it rated the U.S. a "moderate risk" place.

    China, South Korea and Japan will invest a total of $509 billion in NE and EE from 2009 to 2013, the largest part coming in China. The U.S. will invest $172 billion in the same period.

    South Korea’s “Green New Deal” will invest $46 billion, 1% of its GDP, in the 2009 to 2013 period, with a focus on solar, LED lighting, nuclear, and hybrid car technologies.

    click to enlarge

    Japan will have $33 billion in targeted incentives, focusing on the deployment of solar, hybrid-electric vehicles, and EE technologies. It already has plans for an additional $30 billion in NE and EE spending from 2013 to 2018.

    The Asian strategy is to support start-up companies with low-interest loans, RD&D to favored whole industries, government procurement to generate markets, and subsidies to drive the buying of NE and EE technologies.

    Asian spending sets deployment as its goal. By 2012, China, Japan, and South Korea intend to produce 1.6 million BEVs per year. North America is expected to be producing 267,000 BEVs that year.

    click to enlarge

    Japan reportedly has a plan to boost its installed solar capacity 20 times over by 2020 and has committed to obtaining 20% of its power from New Energy sources by 2020. Feed-in tariffs guaranteeing above-power-market returns is driving rapid deployment of wind and solar.

    China has committed to obtaining 15%-to-18% of its power from New Energy sources by 2020 but its growing momentum suggests it will get to 20% by then.

    With these strategies and policies, Asia will create economies of scale, learn-by-doing experience, supply chain efficiencies and market power advantages that will solidify their leverage. This will make it possible for them to resolve technology obstacles, streamline production and product performance and cut prices. The result will be a structural competitive advantage.

    click to enlarge

    Pending Congressional legislation is entirely inadequate to the challenge and will not recapture NE and EE private investment before 2020. It sets greenhouse gas emissions prices too low and its RD&D funding is too low.

    The goal of federal investment should be to break down the barriers to private investment. Those barriers include: (1) High capital costs; (2) Uncertainty and risk; (3) A lack of enabling infrastructure like transmission and New Energy storage; (4) Low public RD&D funding; (5) Inadequate protections for intellectual property and spillover risks leading to low private RD&D spending; (6) Competitive disadvantages for New Energy in established energy markets giving default advantages to the Old Energies.

    The result: The energy sector defeats innovation and remains dependent on century-old technologies.

    click to enlarge

    Government incentives can work. There are many examples of past U.S. public sector investments that spawned private sector investment and ended up creating new economic blessings: Agriculture, railroads, radio, the Internet, aerospace, IT and pharmaceuticals, as well as the invention of nuclear, wind, and solar energy technologies.

    Denmark became the leader in wind technology when government subsidies guaranteed a market for wind energy-generated electricity in the 1980s and 1990s. As result, Denmark’s Vestas is the world’s top wind turbine manufacturer.

    The U.S. has been behind before and caught up. Europe led in aerospace technology until sustained federal military-related funding of innovation and deployment in aviation technology turned the U.S. into a civil and military aviation leader.

    click to enlarge

    The USSR’s Sputnik was the first satellite to orbit the earth but President Kennedy set U.S. sites higher and 12 years later U.S. astronauts were the first to walk on the moon – as tbe result of direct federal investment in innovation and technology.

    What is necessary now is a real public commitment. Because of the building advantage in Asia, the U.S. needs more than a price on emissions, New Energy standards and other indirect incentives. They are necessary but no longer sufficient.

    Only an aggressive, direct and targeted effort to strengthen research and innovation, manufacturing capacity, and domestic markets will get the U.S. back in the New Energy Race.

    click to enlarge

    The report suggests 3 key necessities for the U.S:

    (1) A significant increase in New Energy innovation in the form of major and sustained spending on RD&D. If this does not happen, the next generation of NE and EE will be invented and commercialized in Europe and Asia where spending, policies and roadmaps are in place while the U.S. lags in all 3.

    (2) A focus on developing innovative manufacturing processes and investing in them to build economies of scale in manufacturing. The U.S. NE and EE manufacturing sector is seriously disadvantaged. Only a special focus on providing secure low-cost financing, incentives and technical assistance for retooling can make it competitive and bring the tax revenues, jobs, and supply chain of related industries and businesses back to the domestic economy.

    (3) Targeted public policy and spending aimed at accelerating NE and EE deployment and creating markets for it. Only accurately targeted polices can effectively and quickly bring down the price and spread adoption widely.

    click to enlarge

    Finally, to be very specific, policies must be targeted to provide:

    (1) Meaningful technology-specific production incentives;

    (2) Concrete and large-scale promises of government procurement; and

    (3) Permanent and long-term lines of credit in the form of

    -(a) low-cost financing and

    -(b) credit guarantees.

    click to enlarge

    QUOTES
    From the report: “Nations that establish an early lead in key industries can more easily retain that advantage at a lower cost over the long-term. Direct government investments by Asia’s clean tech tigers will help them form industry clusters, like Silicon Valley in the United States, where investors, manufacturers, suppliers and others can establish dense networks of relationships that can provide cost and innovation advantages…In order to avoid ceding "rst-mover advantage to Asia’s clean tech tigers, U.S. support for the nation’s already lagging domestic industries must be robust. Unfortunately, according to the Environmental Protection Agency (EPA), the climate and energy bill passed by the U.S. House of Representatives in June 2009 is not sufficiently aggressive to significantly increase the deployment of renewable and other low-carbon energy generation technologies or advanced vehicle technologies, particularly in the near-term.”

    click to enlarge

    From the report: “…ACESA directs relatively little public funding to support research and development, commercialization and production of clean energy technologies within the United States. Furthermore, the legislation is unlikely to trigger significant private investments in clean energy development and deployment before 2020, if not much later, largely because carbon prices established by the bill’s cap and trade program are projected to remain relatively low…Renewable energy deployment standards contained in ACESA are also insufficient to require additional deployment beyond business-as-usual projections…”
    From the report: “Dollar for dollar, the direct and targeted public investments of China, Japan, and South Korea are likely to attract substantial private investment to clean energy industries in each country, perhaps more so than the market-based and indirect policies of the United States…As trillions of dollars are invested in the global clean energy sector over the next decade… investors will invest more in those countries that offer support for infrastructure, R&D, a trained workforce, guaranteed government purchases, deployment incentives, lower tax burdens, and other incentives…”

    click to enlarge

    From the report: “The United States has consistently been a leader in inventing new technologies and creating new industries and economic opportunities. It remains one of the most innovative economies in the world, and is home to the world’s best research institutions and most entrepreneurial workforce. The challenge will be for the United States to aggressively build on these strengths with robust public policy and government investment capable of establishing leadership in clean technology development, manufacturing, and deployment, and to do so before China, Japan and South Korea fully establish and cement their emerging competitive advantages.”

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