From December 16: 2009, THE FIGHT FOR NEW ENERGY AND WHY WIND WINS IT

Update 12-31: The post below sums up the year and the MORE NEWS stories that follow expand on the summary. There is only 1 thing to add:

This is surely one of the best cartoons of the year. (click to enlarge)


Wind Turbine Sound and Health Effects; An Expert Panel Review
December 2009 (American Wind Energy Association and Canadian Wind Energy Association)
and
The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis
December 2009 (Lawrence Berkeley National Laboratory)

SUMMARY
2009 will be remembered as the year the New Energy industries fully joined the rising grassroots movement that is now really beginning to stand back the Old Energies.

The new administration came in this year with a rush and with a New Energy-boosting Recovery Act that is still having reverberations and driving growth in revenues and jobs.

In Chicago, in the spring, WindPower 2009 was the biggest New Energy conclave ever. The wind industry hosted a coterie of Midwestern governors who stumbled over themselves prevailing on wind to build in their states. And the industry brought oil & gas billionaire-turned-wind developer T. Boone Pickens to the convention as a keynote speaker to show the fossil fuels they are yesterday’s party.

At Solar Power International 2009, in Anaheim in the fall, solar association President Rhone Resch unveiled a Solar Bill of Rights and declared the coal industry an “opponent” and keynote speaker/environmental hero Robert Kennedy, Jr., described America’s New Energy industries as the cutting edge in a 21st century arms race.

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The geothermal, hydrokinetic and algae biofuel associations fought harder than ever in 2009 for recognition on the national stage, joined the solar and wind associations in the struggle against recalcitrants in the U.S. Congress and helped push a groundbreaking energy and climate bill through the House of Representatives.

But by far the biggest story of 2009 was that the No-New-Coal movement, born of grassroots activists in 2005, defeated its 100th proposed coal plant and took on unprecedented momentum. The "there’s no such thing as clean coal” media campaign found spokesmen in Jon Stewart, Steven Colbert and other late night comedians and it won adherents from YouTube audiences around the world.

The floundering economy has slowed New Energy’s progress. And the Old Energies won’t roll over without a brutal struggle, as evidenced by the vulgar tactics of the blowhard American Coalition for Clean Coal Energy (ACCCE). But what the events of 2009 demonstrated is that even the staunchest of fossil fools can’t hold back history.

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The triumph of the U.S. wind industry – the U.S. has built more wind power to date than any other country in the world – is a tribute to a particular way of fighting for New Energy. It is a 2-part approach.

The first part is to keep building, no matter what. The wind industry has developed unimpeded by any criticism and has slowed only when the federal government pulled the carpet out from underneath it.

The second part is to look directly at criticism with a cold hard scrutiny. If there is truth in it, what is there to learn? If there is not, how can the real truth be effectively told?

2009 is exemplary of the first part. The wind industry saw the economy unraveling and the capital for project finance disappearing and went into action. Along with the solar industry, it led New Energy’s fight for revised federal benefits and, as a result, is coming out of the recession still building.

Wind intends to keep on building until it is supplying 20% of U.S. power in 2030. (click to enlarge)

December has seen the release of 2 highly substantial studies exemplifying the second part of wind's victory plan, a frank response to criticism. Wind Turbine Sound and Health Effects; An Expert Panel Review is a panel of experts’ highly researched negation of unsubstantiated claims, circulated for years and reiterated in a recent, poorly documented book, that the noise of wind turbines causes health impacts and something called “wind turbine syndrome.”

The panel of experts negates the unsubstantiated claims with old-fashioned facts demonstrating there is no basis for such a syndrome or any other harm to human health from properly sited wind turbines.

The doctors and other health professionals on the panel concluded:
(1) The sounds and vibrations emitted by wind turbines have no unique endangering quality.
(2) Knowledge about sound and health is substantial.
(3) That substantial accumulated knowledge offers no evidence the audible or subaudible sounds from wind turbines have “any direct adverse physiological effects.”

The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis is a thoroughly documented paper from researchers at the Lawrence Berkeley National Laboratory (LBNL) that negates long-muttered suggestions by wind’s enemies that nearby projects somehow diminish home values with thoroughly calculated statistics showing there is absolutely no such harm to real estate prices.

The researchers identified 3 ways a nearby wind project could impact home values:
(1) Area Stigma is a concern that the general area surrounding a wind energy facility will appear more developed;
(2) Scenic Vista Stigma is a concern that a home’s otherwise scenic vista might be compromised by the view of a wind energy facility;
(3) Nuisance Stigma is a concern there could be factors like sound and shadow flicker that close proximity to wind turbines could impose.

They concluded that there is no evidence that any of the 3 stigmas having “any consistent, measurable, and statistically significant effect” on home values.

WindPower (click to enlarge)

COMMENTARY
The study of the health impacts of wind turbines was conducted by a multidisciplinary scientific advisory panel made up of medical doctors, audiologists, and acoustical professionals from the U.S., Canada, Denmark, and the UK that was established by the American and Canadian Wind Energy Associations (AWEA and CanWEA) to create a definitive reference for legislators, regulators and anybody else seeking to resolve the conflicting information about wind turbine sound and health.

The panel analyzed the extensive body of peer-reviewed literature on sound and health effects in general, and on wind turbine sound in particular. The conclusions on which there was consensus were:
(1) “There is no evidence that the audible or sub-audible sounds emitted by wind turbines have any direct adverse physiological effects.”
(2) “The ground-borne vibrations from wind turbines are too weak to be detected by, or to affect, humans.”
(3)”The sounds emitted by wind turbines are not unique. There is no reason to believe, based on the levels and frequencies of the sounds and the panel’s experience with sound exposures in occupational settings, that the sounds from wind turbines could plausibly have direct adverse health consequences.”

Wind Turbine Syndrome, as chronicled anecdotally by UK physician Nina Pierpont, is, according to the scientific panel, based on 2 assumptions: (1) that low levels of sound from wind turbines, 1-to-2 Hz, impacts the human vestibular system; and, (2) that low level turbine sound, 4-to-8 Hz, enters human lungs through the open mouth and vibrates the diaphragm, which vibrates the internal organs.

Thanks to the miracle of YouTube, readers can draw their own conclusions. From videomarkHD129 via YouTube

According Dr. Pierpont, the combined effect of these sound frequencies confuses the body’s position and motion detectors and leads to the range of symptoms associated with the “syndrome.”

While Dr. Pierpont’s study offers little authoritative documentation for her explanations of clinical incidences, the panel members’ multiple specialties (audiology, acoustics, otolaryngology, occupational and environmental medicine, and public health) allowed an authoritative and well-informed review of a wide expanse of practical, laboratory and clinical documentation.

The 3 key points of agreement by the panel: (1) (1) Wind turbine sounds and vibrations have no unique or harmful qualities; (2) There is ample knowledge about how sound impacts health; and (3) Nothing indicates the audible or subaudible sounds from wind turbines have “any direct adverse physiological effects.”

The panel noted there is great complexity in human reactions to sound, especially the incessant swish of wind turbine. It pointed out that the sound levels are comparable to ambient noise in urban environments. This sound is annoying to a small minority of people exposed to turbines, as urban noise is annoying to some. There are some physical and psychological variables that could cause or enhance such adverse reactions.

The panel concluded that “wind turbine syndrome” is a misinterpretation of physiologic data. It is, the doctors found, a subset of annoyance reactions.

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Vibroacoustic disease (tissue inflammation and fibrosis associated with sound exposure) is, according to the doctors, highly unlikely at the levels of sound produced by wind turbines.

The implication is that Dr. Pierpont’s book fails to meet the level of epidemiologic evidence necessary to prove the existence of the syndrome she claims to describe. Case reports and uncontrolled observations need to be confirmed through controlled studies. For wind turbine health effects, no case-control or cohort studies have been done so allegations of harmful effects remain unproven and there are not nearly enough case reports of adverse health effects to even advocate for funding further studies.

The paper’s conclusions:
(1) "Sound from wind turbines does not pose a risk of hearing loss or any other adverse health effect in humans."
(2) "Subaudible, low frequency sound and infrasound from wind turbines do not present a risk to human health."
(3) "Some people may be annoyed at the presence of sound from wind turbines. Annoyance is not a pathological entity."
(4) "A major cause of concern about wind turbine sound is its fluctuating nature. Some may find this sound annoying, a reaction that depends primarily on personal characteristics as opposed to the intensity of the sound level."

In the paper on home values, the researchers identified 3 ways a nearby wind project could impact home values:
(1) Area Stigma is a concern that the general area surrounding a wind energy facility will appear more developed;
(2) Scenic Vista Stigma is a concern that a home’s otherwise scenic vista might be compromised by the view of a wind energy facility;
(3) Nuisance Stigma is a concern there could be factors like sound and shadow flicker that close proximity to wind turbines could impose.

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The LBNL researchers studied Area Stigma by evaluating whether the sales prices of homes anywhere beyond a mile and within 5 miles of a wind project were different from the sales prices of homes beyond the 5 mile perimeter. They found no statistically significant differences in sales prices.

Scenic Vista Stigma was studied by assessing whether homes near wind projects with minor, moderate, substantial, or extreme views of wind turbines had different sales prices from other homes with such views. They found no statistically significant differences.

For Nuisance Stigma, they examined whether the sales prices of homes within a mile of the nearest wind energy project had measurably different prices from homes beyond the 5 mile perimeter. They found no statistical evidence of an impact on sales prices from proximity to the wind project.

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Previous studies that suggested the proximity of wind projects detrimentally affects property values were found by the LBNL researchers to be flawed in several ways:
(1) They relied on surveys of homeowners or real estate professionals instead of doing real market data quantifications;
(2) They relied on simple and limited statistical techniques too easily affected by small numbers of transactions or survey respondents;
(3) They used small datasets and/or only a single wind project, making their wide applicability questionable;
(4) They failed to report the statistical significance of their findings, compromising their meaningfulness;
(5) They focused on Area Stigma, and ignored the Scenic Vista and/or Nuisance Stigmas;
(6) They neglected field visits when doing Scenic Vista Stigma; and
(7) There are only 2 peer-reviewed studies published in academic journals.

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The researchers used the hedonic pricing model, one of the most well-known, well-accepted and reliable methods for quantifying residential property value facts. They calculated a base hedonic model and 7 alternative hedonic models for each of the 3 Stigmas. Some limitation is unavoidable but the LBNL hedonic pricing model produced what they describe as “the most comprehensive and data-rich analysis to date” of wind project impacts on proximal property values.

Previous studies collected a large quantity of residential transaction data from communities surrounding a wide variety of wind power facilities, spread across multiple parts of the U.S. This study visited each residence on which it did evaluations to obtain visual and other essential data. Area, Scenic Vista, and Nuisance Stigmas were studied.

The results were strongly consistent. None of the models showed conclusive evidence of any of the 3 property value stigmas.

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Bottom line: There is no evidence that home prices for residences near wind facilities are “consistently, measurably, and significantly” affected by (1) the view of wind facilities, (2) the nearness of wind facilities or (3) the affects of being near wind facilities.

Where further work is needed:
(1) More data is necessary on homes closest to wind facilities;
(2) More transactions should be evaluated, especially for homes particularly close to wind facilities;
(3) The cumulative impact in communities where there have been multiple developments should be studied;
(4) More needs to be known about sales volume impacts;
(5) The impact of wind projects on the length of time homes are on the market before they sell is not clear;
(6) A study should made of homeowners living close to wind projects, especially those who buy and sell after construction to understand their decision-making process.

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QUOTES
- From the study on health and wind: “People have been harnessing the power of the wind for more than 5,000 years. Initially used widely for farm irrigation and millworks, today’s modern wind turbines produce electricity in more than 70 countries. As of the end of 2008, there were approximately 120,800 megawatts of wind energy capacity installed around the world…Wind energy enjoys considerable public support, but it also has its detractors, who have publicized their concerns that the sounds emitted from wind turbines cause adverse health consequences…In response to those concerns, the American and Canadian Wind Energy Associations (AWEA and CanWEA) established a scientific advisory panel in early 2009 to conduct a review of current literature available on the issue of perceived health effects of wind turbines. This multidisciplinary panel is comprised of medical doctors, audiologists, and acoustical professionals from the United States, Canada, Denmark, and the United Kingdom. The objective of the panel was to provide an authoritative reference document for legislators, regulators, and anyone who wants to make sense of the conflicting information about wind turbine sound.”

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- From the study on health and wind: “The mission of the American Wind Energy Association (AWEA) is to promote the growth of wind power through advocacy, communication, and education. Similarly, the mission of the Canadian Wind Energy Association (CanWEA) is to promote the responsible and sustainable growth of wind power in Canada. Both organizations wish to take a proactive role in ensuring that wind energy projects are good neighbors to the communities that have embraced wind energy.
Together AWEA and CanWEA proposed to a number of independent groups that they
examine the scientific validity of recent reports on the adverse health effects of wind turbine proximity. Such reports have raised public concern about wind turbine exposure. In the absence of declared commitment to such an effort from independent groups, the wind industry decided to be proactive and address the issue itself.”

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- From the study of the impacts of wind projects on property value: “Wind power development in the United States has expanded dramatically in recent years. If that growth is to continue it will require an ever-increasing number of wind power projects to be sited, permitted, and constructed. Most permitting processes in the U.S. require some form of environmental impact assessment as well as public involvement in the siting process. Though public opinion surveys generally show that acceptance towards wind energy is high, a variety of concerns with wind power development are often expressed on the local level during the siting and permitting process. One such concern is the potential impact of wind energy projects on the property values of nearby residences.”

MORE NEWS, 12-31: WIND TRENDS 2010; AUGHTIES MOMENTS TO REMEMBER; EMISSIONS TRADING 2009; A SOLAR SOLUTION FOR THE NEXT DECADE

WIND TRENDS 2010
Wind Power Trends to Watch for in 2010
Shawna Seldon, December 28, 2009 (American Wind Energy Industry)

"As the nation looks ahead to 2010, renewable energy will be central to the economic and energy issues that dominate the political agenda. The American Wind Energy Association (AWEA) has identified some trends and indicators…

"…[1] Wind Power: Second-largest Source of New U.S. Power Generating Capacity for Sixth Year…While wind makes up only about 2% of total electricity supply, it is [expected in 2010 to continue to be] one of the largest sources of new power generation…second only to natural gas…[2] The most important job creation policy that Congress can enact is a national [Renewable Electricity Standard (RES)] which provides the long-term certainty that companies need to invest in new facilities and train workers to make the 8,000 components that go into a modern wind turbine….Whether it is in job legislation or in comprehensive energy and climate legislation…a strong RES is urgently needed…"

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"…[3] With shop floors working single shifts or sometimes idling altogether for lack of contracts, U.S. wind turbine component manufacturing lagged in 2009. If an RES is passed early on in the year, however, it will work in synergy with the short-term [Recovery Act (ARRA)] incentives and provide the long-term signal that companies are waiting for in order to invest in new and expanded facilities…[4] With climate and energy legislation or regulation looming, the stakes are higher than ever for the energy sector. Tighter limits on emissions reveal true cost, so efforts to pad climate and energy legislation with subsidies to ensure the survival of the more polluting technologies will continue. Lobbying efforts and spending could surpass [2009] record levels…[A]nti-renewable energy communications campaigns [may] try again to use bogus studies funded by fossil fuel-backed groups…[and] other tactics.

"…[5] Wind Turbines Get Even More Powerful…Over 1,000 wind turbines larger than 2 megawatts (MW) are already in commercial operation…and the year-end [2.5-MW turbine orders are] the harbinger of a shift [toward even larger turbines]…This forecast assumes [exhausted inventories]…a growing market…[and] a national RES. The trend toward larger turbines is driven by economics: taller turbines…produce more power at a lower cost per kilowatt-hour…[6] While federal transmission policy is under heated discussion as part of pending energy legislation, states and regions are where key decisions are made…Texas and the Southwest Power Pool are beginning to see investment in new transmission lines and infrastructure [because of good policy]…[T]he Midwest Independent System Operator…[may adopt] similarly favorable cost allocation policy."

Good question. (click to enlarge)

"…[7] As wind penetrations grow higher in the U.S. and Europe in 2010, utilities and grid operators should become more comfortable with [it]…Several major wind integration studies slated for release in 2010 are expected to add further evidence that wind can be reliably integrated with the grid at low cost…[T]he wind industry will be keeping its eye on…fossil fuel competitors [who may try to] impose new and unfair costs on wind plants…[8] Another year of record growth is expected for the small wind market in 2010 due to a federal Investment Tax Credit that has been expanded to provide an 8-year, uncapped 30% tax credit for small wind systems for homeowners and small businesses…[A new] safety and performance standard will…help consumers compare turbines.

"…[9] [T]he completion of the Wind Turbine Guidelines Advisory Committee process (discussions on wind turbine siting held under the Federal Advisory Committee Act with the U.S. Fish and Wildlife Service and a broad range of stakeholders) [will] provide the industry with greater clarity on wildlife surveys…the siting process for wind farms…[and the] industry continues cooperative research programs with the Bats & Wind Energy Cooperative, the American Wind Wildlife Institute, and other organizations…[10] Operational and Safety Guidelines…[are being] put in place…and AWEA is doing so on a number of fronts, including workplace safety…[in conjunction] with the Occupational Safety and Health Administration (OSHA)…to promote safety and health within the wind industry. AWEA will also develop best practices and safety awareness training programs…"


AUGHTIES MOMENTS TO REMEMBER
Top 10 environmental moments of the decade
Constance Cheng, December 28, 2009 (CNN)

"What a difference a decade makes. Since [2000, there has been]…a marked shift toward all things green in politics, technology and perhaps most importantly, society…[There is a wide] understanding of climate change…[and has] started to change the way more us live our lives…10 environmental developments…defined this…green decade…

"…[1] In 2001, the Toyota Prius became the first mass-produced hybrid vehicle to be sold worldwide. It heralded the beginning of an era…Industry insiders called it a game-changer…[M]ore than one million Priuses have been sold worldwide, and other major manufacturers [are developing] their own hybrid and electric-only vehicles…[2]
December's U.N. summit on climate change held in Copenhagen, Denmark garnered unprecedented attention…[T]he accord that was reached fell short of the expectation of nearly every interested party…"

The 2001 Toyota Prius changed the game forever. (click to enlarge)

"…[3] Al Gore's 2006 "An Inconvenient Truth" has its place in history. The film was instrumental in spreading the message of climate change…[and] was one of the highest grossing documentaries of all time…[I]t has been maligned by some critics for "fear-mongering." …Yet despite its doomsday scenarios, it explained the basics of climate change to an audience that till then had no access…[and] brought Al Gore…the Nobel Peace Prize…[4] Compact Fluorescent Lightbulbs (CFLs) brought environmentalism into the home…[Producers overcame initial objections and early technical problems] and in 2007, sales of CFLs reached record heights worldwide. Australia has already implemented a ban of traditional incandescent light bulbs while the European Union and Canada are also phasing out the old bulbs…[T]he average CFL uses 75 percent less energy…a $30 saving which would pay for itself in 6 months. It was an important coup for the environmental movement, but green groups now say much more needs to be done…

"…[5] Hurricane Katrina in 2005, a string of deadly hurricanes devastating Haiti in 2008 and the heat wave in Europe in 2003, just some examples that this decade was plagued by wild weather…[C]limate change may…[make] ordinary [or extreme] weather events…more extreme…Recently, the U.N.'s weather agency said that this decade was the hottest on record…[6] Growing awareness for the environment meant that noughties vocabulary included words like "carbon footprint," "carbon neutral" and "greenwashing." Perhaps the most significant step was when they were accepted into the Oxford English Dictionary in 2007…"

About the time "September 11" is taking its place in history alongside Pearl Harbor and Custer's Last Stand, global climate change may be reaching anthropological proportion. (click to enlarge)

"…[7] In 2007…in Paris…The Intergovernmental Panel on Climate Change (IPCC) issued the first scientific consensus on climate change, which included an unprecedented acknowledgement that it was "very likely" that climate change was caused by human activity. The report went on to project a temperature rise of 1.8 to 4 degrees Celsius and a sea-level rise of between 28 to 43 cm by the end of the century…[8] [A] healthy mix of existing technologies especially in the renewable energy sector will [likely] be enough to significantly cut emissions. Wind, solar, hydro all saw significant support in the past ten years…In 2008, global power capacity from renewables topped 280,000 MW…That is three times more than what nuclear power plants in the United States currently produce…India and China are now among the leaders in the installation and manufacture of renewable energy. In 2008, China's wind power capacity doubled for the fourth year running…[S]olar technology had a few key breakthroughs including improved energy yields (it now tops 20 percent) and the creation of ultra-thin solar panels…

"…[9] In 2006, [British economist Sir Nicholas Stern and] former vice president of the World Bank issued a 700-page report calculating the cost of climate change to the world's economy. Green groups called the report a wake-up call for governments…The report estimated that climate change would cost at least 5 percent of global GDP annually, now and forever. The worst case scenario would be 20 percent a year ($7 trillion)…The UN Framework Convention for Climate Change suggests that climate change could cost between $70 to $100 billion by 2030..[10] Carbon trading, also known as "cap and trade," became a hotly debated policy that many hope will help counter climate change. Using free-market principals and government regulation, participants in cap and trade schemes buy and sell permits to emit carbon dioxide. Governments limit the amount of emissions allowed and slap heavy fines on those who exceed those limits. Reducing the amount of permits issued over time should then reduce pollution levels…There are also questions over regulation and accounting…It's a complex and controversial issue but one that looks set to a key feature of mainstream climate change solutions…"


EMISSIONS TRADING 2009
Carbon Prices Reflect an Uncertain Year
Matthew Berger, December 29, 2009 (Inter Press Service via Reuters/AlertNet)

"As what was supposed to be a breakthrough year for action on climate change comes to a close, one indicator of the disappointment surrounding an anti-climactic outcome in Copenhagen and stalled U.S. Senate legislation can be seen on the European Climate Exchange. The main exchange for the carbon emissions allowances that are traded as part of the European Union's Emissions Trading System saw carbon dioxide emissions drop to a six-month low of 12.4 euros in Copenhagen's aftermath and remain around that level since.

"Prices have been volatile throughout the ETS's first five years, but this year they dropped to an all-time low of eight euros in February, following a record high of just under 30 euros the previous July…For cap and trade approaches to greenhouse gas regulation to achieve their ends and provide the incentives that will push companies to invest in cleaner technologies, prices will need to be much higher…The International Energy Agency's World Energy Outlook for 2009 said carbon prices should be at 50 dollars (35 euros) a metric tonne in 2020 and 110 dollars (67 euros) in 2030 in order to stimulate investment…"

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"A major reason for the downturn in prices this year versus last is the economic recession, which has meant lower production, and thus lower emissions and less need for emissions allowances…But there are other factors at play as well. The price of carbon, as with that of any commodity, is seen as a function of demand…[Current low demand was also brought on] by the lowered expectations for carbon dioxide regulation following the disappointing summit in Denmark and the stalling of climate legislation in the U.S. Senate…

"…[T]here is growing pressure to allow more [normally lower-priced] offsets into the carbon trading system…[This could show] businesses expect carbon emissions prices to rise…Offsets include the Certified Emissions Reduction credits of the Kyoto Protocol's Clean Development Mechanism, which allow emitters in rich countries to invest in clean tech ventures in developing countries in exchange for credits to put toward their emissions cuts tallies, as well as programmes where emitters can pay for forests to be conserved or replanted…"

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"The U.S. House of Representatives passed a climate change bill…setting up a cap-and-trade system in the U.S. Like the ETS, the proposed U.S. system would limit industries' emissions and eventually force companies to pay for allowances to offset their emissions - or allow them to sell excess allowances if their emissions are lower than expected…The EU system and any future U.S. system are supposed to encourage a movement away from dependence on high-emitting, fossil-fuel[s]…But for businesses to be sufficiently motivated to reduce their emissions they need a price incentive.

"The non-binding international accord announced by the U.S., China, India, Brazil and South Africa and "taken note of" by the other countries is not likely to raise demand enough…[P]rices in the Regional Greenhouse Gas Initiative, which caps emissions in 10 northeastern U.S. states, dropped to around two dollars…[S]upply is easily overpowering demand…The EU ETS also faced the early problem of having allocated too many allowances at its start…But low prices…may simply be the unavoidable growing pains…[that] allowed emitters and markets time…[to learn to] operate under a cap…As for the future of cap and trade, currently low prices are not expected to, by themselves, slow the momentum toward a cap-and-trade system in the U.S. or elsewhere…"


A SOLAR SOLUTION FOR THE NEXT DECADE
Solar Energy Could Meet 15 Percent of US Electricity by 2020
December 16, 2009 (Solar Energy Industries Association)

"Leaders representing the U.S. solar energy industry reported the potential of solar energy to meet 15 percent of U.S. energy needs by 2020…The “Expanding Solar Energy in the United States” briefing was hosted by the Solar Energy Industries Association (SEIA) and featured U.S. solar industry leaders outlining the Solar Bill of Rights legislation needed to rapidly deploy solar energy to fight climate change and create jobs…

"In a report released jointly with solar industry groups representing more than 90 countries around the world, SEIA presented an accelerated solar deployment scenario for the United States to meet 15 percent of electricity needs by 2020. Twelve percent would come from solar electric power generated by photovoltaic solar panels and concentrating solar power plants. Another 3 percent of electricity would be offset by solar thermal (solar water heating) systems."

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"The report also noted the key policies needed for the industry to scale up and compete effectively…conveyed in the Solar Bill of Rights…[which] lays out eight basic rights that give the solar industry equal access to the electricity marketplace and levels the playing field with the fossil fuel industries…

"…[1] The right to put solar on our homes and businesses…[2] The right to connect our solar energy systems to the grid…[3] The right to net meter and receive at least full retail rates…[4] The right to a fair competitive environment…"

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"…[5] The right to equal access to public lands…[6] The right to build and interconnect new transmission lines…[7] The right to buy solar electricity from utilities…[8] Consumers have the right to the highest ethical treatment from the solar industry…

"The industry estimates that by 2020 more than 880,000 new solar jobs would be created in the US while reducing total energy emissions by 10 percent (nearly 600 million metric tonnes of CO2-equivalent emissions would be avoided annually)…"

From November 11, NEW ENERGY WILL SAVE MILITARY LIVES - STUDY

Update 12-30: War drives innovation and the wars of the 21st century have begun to drive innovation in New Energy. It is a simple equation: Innovate or die.

There is no longer any basis for indifference to better battery powered vehicles or more efficient solar and small wind power. Some may want them because of climate change and some may want them because of economics and some may want them because they cut down on battlefield losses but, as the post below demonstrates, one thing is clear: It is time for everybody to want them and contribute to the effort of having them.

Energy Security – America’s Best Defense; A study of increasing dependence on fossil fuels in wartime, and its contribution to ever higher casualty rates
November 9, 2009 (Deloitte)
and
Pentagon could save lives by cutting fuel use-study
Andrea Shalal-Esa, November 10, 2009 (Reuters)

SUMMARY
Commanders in Iraq have been saying for several years now that the military's dependence on oil is a crippling weakness that is getting U.S. troops killed.

Energy Security – America’s Best Defense; A study of increasing dependence on fossil fuels in wartime, and its contribution to ever higher casualty rates, by General Charles F. Wald (USAF Ret) and Tom Captain (Deloitte Vice Chair), documents the 175% increase in fuel consumption by the military in the decades since the Vietnam War, at a rate of 2.6% per year. It demonstrates how implementing New Energy and Energy Efficiency can reduce the numbers of convoys needed to deliver to fuel in battle theaters and other dangerous places and thereby reduce the lives lost and bodies maimed in service to feeding this nation's unnecessary oil addiction.

A key conclusion of the study is that the effort in Afghanistan could see a 124% increase in U.S. casualties through 2014 if the military does not move to New Energy and Energy Efficiency.

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COMMENTARY
The Deloitte study examined energy use by the military from World War II to the current wars in Middle Asia. The 2.6% increase in consumption per year and 175% increase since the Vietnam War has resulted in the military’s present use of 22 gallons of fuel per day per soldier due to:
1-increased mechanization of war technology,
2-increased expeditionary operations using mobility over long distances, and
3-irregular operations in rugged terrain.

The military has adopted more efficient internal combustion and jet engines and for its armored vehicles, tanks and planes, as well as nuclear power for aircraft carriers and submarines but the sheer multiplying of vehicle and operation numbers has outstripped the advances in old technologies.

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Convoys must often traverse long distances over treacherously hostile IED- and roadside bomb-compromised ground to deliver vital fuel. Only the introduction of methods to reduce dependence on these convoys will prevent casualties in Afghanistan and Iraq from increasing 17.5% per year for a cumulative increase of 124% through 2014.

But New Energy and Energy Efficiency technologies offer the opportunity to change the game in the military’s favor. The report mentions wind and solar energies, alternative fuels from algae and biomass, the use of battery electric vehicles and experimental concepts such as fission, fusion and fuel cells. Such technologies offer the opportunity not only to save lives but to help move the world to emissions-free energy and improve the economics of the military equation as well.

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From statistics on the military’s use of oil, the study moves to the world’s increasing dependence on oil, citing International Energy Agency predictions that world oil use will rise from today’s 85 million barrels per day to 94.4 million barrels per day in 2015 and 106.4 million barrels per day in 2030. This dependence is leading to the exhaustion of economically extractable oil reserves and driving the cost of fuel to unaffordable levels.

With its consumption of nearly 20 million barrels per day, the U.S. makes itself dependent on countries that are largely “unstable or prone to conflict” and expends enormous reserves of its blood and treasure protecting its supply. As the single biggest user of oil in the U.S., the Department of Defense (DoD) is the most vulnerable of all to the costs. In 2008, DoD spent $16 billion for 120 million barrels of oil, a million barrels every 3 days.

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The Air Force uses the most. Weapons and war tools use an ever bigger portion. In 2008, 2.1 million barrels of fuel per month (90 million gallons) went to Iraq and Afghanistan.

Dependence on oil makes the U.S. and the U.S. military vulnerable along a specific set of “lines of communication (LOC)” at a specific set of “chokepoints:”
1-the Straits of Hormuz in the Persian Gulf (the most important chokepoint in the world because it sees 17 million barrels of oil go through every day),
2-the Strait of Malacca near Indonesia in the Indian Ocean,
3-the Suez Canal leading from the Red Sea to the Mediterranean Sea,
4-the Panama Canal connecting the Pacific Ocean, through the Caribbean Sea, to the Atlantic Ocean,
5-Bab el-Mandeb on the West Coast of Africa, and
6-the Bosporus/Turkish Straits connecting the Mediterranean to Central Asia and Russia.

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2008 costs due to Improvised Explosive Devices (IEDs), enemy attacks, rough weather, traffic accidents and pilferage: 44 trucks, 220,000 gallons of fuel. IEDs caused 43% of U.S. deaths in Iraq from July 2003 to May 2009. For much of the 2005 to 2008 period, IEDs caused more than half of all U.S. deaths in Iraq.

From 2005 to 2009, IEDs caused 38% of U.S. deaths in Afghanistan and the numbers are climbing with the level of activity. In July and August 2009, numbers were 50% higher than all of 2007.

The military is paying between $2 and $3 per gallon for fuel but when the cost of getting it to in-theater destinations is included, the cost is about $15 per gallon and when the cost of protecting it is included, the cost is about $45 per gallon.

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The 2008 Energy Security Strategic Plan from DoD’s Energy Security Task Force set 4 goals:
1-Maintain/enhance operational effectiveness while cutting total energy demand,
2-Increase strategic resilience with alternative and assured fuels and energy,
3-Enhanced operational/business effectiveness with institutional energy policies and solutions in DoD planning and business practices, and
4-Implement DoD-wide metrics with electric metering by 2012 and natural gas and steam metering by 2016.

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The Report of the Defense Science Board Task Force on DoD Energy Strategy, subtitled “More Fight – Less Fuel,” made 5 recommendations:
1-Increase efficiency and use the full fuel cost to make every decision,
2-Reduce the risk of power interruptions on critical missions and in national infrastructure,
3-Establish DoD-wide metrics and goals,
4-Spend on New Energies and Energy Efficiencies at levels matching their high value,
5-Set policies and incentives to achieve near-term opportunities.

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Goals:

For Mobility
1-Turbine engine efficiency
2-UAV and generator efficiency
3-Vehicle efficiency

For Facilities
1-Solar
2-Geothermal
3-Other New Energies (such as ocean energies)

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Alternative fuels, power generation and energy strorage
1-Synfuels, limited by the 2007 energy law to those with lower greenhouse gas emissions (GhGs) than oil,
2-biofuels,
3-algae fuels, especially those that can be refined into jet fuels,
4-tactical power systems and generators, including hybrid engines,
5-fuel cell technologies,
6-nuclear fission technologies, and
7-batteries and other energy storage technologies.

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Using stimulus fund money and other financial resources, DoD has almost $2 billion invested in over 2,300 projects.

The Deloitte study recommendations, based on opportunities for accelerated deployment:
1-Common biofuels for aircraft and big engines, including plant and algae biofuels.
2-Hybrid electric/biofuel engines for ground transport, with built-in multiuse generators.
3-Solar technologies that are lightweight and durable for permanent and tent-like structures.
4-Engine/propulsion technologies that require the highest level of innovation.

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QUOTES
- Tom Captain, vice chair/Global and U.S. Aerospace & Defense (A&D) leader, Deloitte LLP/report co-author: “It is clear that our dependence on oil and other fossil fuels puts our fighting men and women at risk…We need to find ways to incorporate renewable energy sources to improve conservation and develop new fuels so that our soldiers are as safe as possible.”
- General Charles Wald (USAF Ret), director/senior advisor to the Aerospace & Defense Industry, Deloitte LLP/ co-author: “If the military can reduce its dependence on fossil fuels, it will help solve the strategic vulnerability that results from having such an oil-intense force…Many people in various sectors of the economy are realizing that energy efficiency, conservation and the use of alternative fuels are not just good for the environment, but good for business as well. In this case, it’s the business of protecting American lives.”

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- From the report’s conclusion: “As has been the case throughout history, all of these technologies will be applicable far beyond military use. The entire nation is on course for a new energy future, and the DoD is committed to working with existing and new partners to lead the way…First and foremost, energy security is essential to reduce wartime casualties. With the significant numbers of U.S. soldiers supporting the transport, logistics, and deployment of fossil fuel to the front lines, there is a call to action to reduce dependence on oil in war. Energy security is America’s best defense.”

MORE NEWS, 12-30: THE YEAR IN CLIMATE SCIENCE; A MARKET LOOK AT SOLAR’S YEAR; PLUGGING IN THE POST OFFICE; NEW ENERGY/GREEN DEGREES

THE YEAR IN CLIMATE SCIENCE
Roundup: Climate science in 2009; For climate science, the year 2009 brought significant discoveries and startling controversies
Kurt Kleiner, 29 December 2009 (UK Guardian)

[click through to source article for complete scientific journal references]

"…The year started out with some sobering, if not altogether surprising, news: overall, the Antarctic continent is warming…[The] studies provided the necessary evidence to show that human-induced warming is happening globally…[A]lthough temperatures rose overall during the twentieth century, distinct periods of warming and cooling of about 30 years each were superimposed on the warming trend…We might have entered such a phase in 2001–2002…[but] the Natural Environment Research Council and the Royal Society in the UK issued a statement that the previous ten years were the hottest on record.

"…In its 2007 report, the Intergovernmental Panel on Climate Change (IPCC) estimated a maximum sea level rise of 59 centimetres by 2100, but noted it was a low estimate…In March a Climate Change Congress in Copenhagen reported that sea levels could rise as much as one metre by 2100…In September…[researchers reported] that both ice sheets are melting much more rapidly than expected…[and] it's possible that sea levels could rise even higher than one metre by 2100…But the case on sea level rise isn't completely closed…"

There is no longer any doubt -- both poles are melting. (click to enlarge)

"Amidst continued discussions on…whether to stabilize atmospheric carbon dioxide concentrations at 450 or 350 parts per million, and whether peaking global emissions by 2015 or 2020 will be enough…a group of scientists suggested it would be easier to concentrate on…One trillion tonnes…the limit…on our cumulative carbon dioxide emissions if we are to have a reasonable chance of avoiding warming above 2 °C…[W]e've already released more than half a trillion tonnes since the year 1750…At current emissions rates, we'll reach that number in 40 years…[but] decision-makers [may use this as an excuse to]…put off action…

"With carbon emissions still rising, and political foot-dragging continuing, some scientists began to consider what the world will look like if we miss the target of limiting global temperature increase to 2 °C above pre-industrial levels…Even if emissions peak in 2015 and decrease by three per cent per year, there's an even chance we'll exceed 2 °C…As a precaution, we should begin planning now to adapt to 4 °C…[which could cause] the destruction of US$1 trillion worth of gross domestic product and displacement of 146 million people if sea levels rise a metre…"

The weight of climate change will soon come down on us. (click to enlarge)

"During 2009, geoengineering took a few steps away from science fiction and towards reality. The idea that we ought to consider actively taking control of the climate has previously seemed fanciful, if not downright dangerous. But as emissions have continued to rise, the idea has become less marginalized…In August the UK Royal Society released a report that said geoengineering might soon be our only hope…Man-made aerosols have been thought to counter global warming by reflecting solar radiation…[but research] concluded that they have different effects depending on the types of clouds and regions in which they form…The jury is still out on the overall influence…[A report said] glaciers in the Himalayas are not melting…[and another found] that glaciers are in fact rapidly dwindling…Changes in glaciers seem to vary depending on location and elevation, and there's not enough data to draw a general conclusion…

"…[T]housands of e-mails and documents were stolen from a server at the University of East Anglia Climatic Research Centre in the UK…'Climategate'…caused delight among climate change deniers and major embarrassment for some climate scientists…What the e-mails do not show, however, is a grand conspiracy to concoct global warming. Instead, they show sincere researchers struggling to do good work in a highly politicized environment — and sometimes losing their tempers…[but as NASA climatologist Gavin Schmidt said,] 'Science doesn't work because we're all nice...Newton may have been an ass, but the theory of gravity still works.'"


A MARKET LOOK AT SOLAR’S YEAR
The Real Story Behind Solar Energy in 2010
David Fessler, December 28, 2009 (Money Morning)

"By the time 2009 is in the books, the record will show that solar energy stocks endured a tough year…Analysts also expect the carnage to continue into 2010…

"…Analysts first suggest that a "huge" oversupply of polysilicon (the raw material used to make silicon-based panel assemblies)…[But] panel sales are rapidly eating into this oversupply…They [shortsightedly also] predict companies producing panels based on the new thin-film designs [can’t compete] because the oversupply of polysilicon will keep poly-based panel prices too low…[S]ome solar-energy companies will lose money in 2010. Others won't make it at all…[But the] market for solar photovoltaic panels (those that produce electricity) is increasing rapidly. It certainly isn't about to replicate the 1980s, when 400 solar panel manufacturers got whittled down to just five…"

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[Ron Kenedi, vice president of the Solar Energy Solutions Group, Sharp Corp:] "We're seeing growth in all segments of solar, starting in the last few months…We've seen growth in the residential sector and new ways for projects to be financed. Utility-scale projects are starting and even mainstream solar is starting. All segments of the solar industry are getting stronger."

[Zhengong Shi, chairman and chief executive officer, Suntech Power Holdings Co.:] "Last year, the Spanish market was almost half of the global market. Apart from the Spanish market, all other markets grew at 50% to 100%. That's a positive sign…We're excited about the U.S. market because the new administration is positive and supports rules for renewable and solar and there is increased awareness in the general public. We see our market share continuing to gain in the U.S."

Suntech, one of the powers in the solar industry, is planning on growth. (clikc to enlarge)

[Jerry Wolfe, CEO groSolar:] "The technology is in place and improving every year…We're finding that residential and commercial buildings are less expensive (with solar panels) than (if powered only by) a utility. People don't understand that. Our biggest problem is that solar requires a cultural change and acceptance. That's our biggest hurdle."

"…Resistance to change and the adjustment(s) that change requires is part of human nature…It only takes one word to sum up the one real force that is driving the solar industry, both now and in the future: Innovation. It's something that the United States has always prided itself on and that hasn't changed…One year from now, when many solar analysts are stuffed full of crow, the solar industry will still be introducing new products. And many solar companies will be well on their way to continued profitability in this promising sector of the alternative energy space."


PLUGGING IN THE POST OFFICE
Time for Postal Service fleet to go green, lawmaker says
Ed O’Keefe, December 17, 2009 (Washington Post)

"From horse-drawn wagons to stage coaches, trains and 18-wheelers, the U.S. Postal Service has used virtually every mode of transportation to deliver the mail. But a New York lawmaker says it's time for the mail service to start using at least 20,000 electric vehicles to stamp out the agency's environmental waste.

"The Postal Service said it operates the largest civilian fleet of vehicles in the world, with about 220,000 vehicles traveling more than 1.2 billion miles each year. The agency's entire fleet consumed 121 million gallons of fuel in 2008, costing it [approximately a billion dollars]…[V]ehicles average 10.4 miles a gallon since most drive slowly and make frequent stops between mailboxes."

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"Rep. Jose E. Serrano (D-N.Y.) wants to put the postal fleet to use during off-hours to help alleviate the nation's overworked power grids…[His bill] would give eventually give $2 billion to the Energy Department and Postal Service to convert current mail trucks or manufacture new ones that use vehicle-to-grid [V2G] technology…The technology allows electricity to flow from plug-in electric or battery-powered vehicles to power lines, feeding excess electricity to the vehicles when they're not in use. In this case, postal vehicles would become temporary storage units for electricity. When necessary, power grids could retrieve electricity from the vehicles…[Delaware compensates V2G users] for electricity sent back to the grid at the same rate they pay for electricity they consume.

"An August report by the Postal Service inspector general said Serrano's proposal would be feasible if the government provided funding. The start-up cost for the project would be $65 million…[The idea has also gotten a nod from organized labor]…The Postal Service knows firsthand about the effect of the "green" movement. Revenue and mail volume have dropped significantly in recent years as Americans opt for eco-friendly, paperless online options…"

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"The Postal Service first experimented with electric vehicles in 1899 as it started to phase out the horse and buggy, spokeswoman Sue Brennan said. Serrano's proposal is one of several that would make the postal fleet more eco-friendly, and the Postal Service is testing several electric or hybrid vehicles, Brennan said.

"Thirty electric vans transport the mail to processing facilities near Serrano's district in New York City. More than 43,000 mail vehicles can run on alternative fuels, and 584 ethanol-powered trucks are in use in Minnesota…Some mail carriers in Arizona and Florida use bicycles to make deliveries, while other carriers in those states, California and the District have tested three-wheel electric vehicles. The T3 battery-powered vehicles can reach speeds of 12 miles an hour and carry a maximum 450 pounds of mail. Mail carriers have also tested hybrid vans produced by Ford and General Motors…"


NEW ENERGY/GREEN DEGREES
As colleges add green majors and minors, classes fill up
Julie Schmit, December 28, 2009 (USA Today)

"…Nationwide, more than 100 majors, minors or certificates were created this year in energy and sustainability-focused programs at colleges big and small…That's up from just three programs added in 2005.

"Two factors are driving the surge: Students want the courses, and employers want the trained students…[T]he Global Institute of Sustainability at Arizona State University… started an undergraduate program in sustainability studies — with a focus on solar — a year and a half ago. It now has about 600 students who've declared sustainability a major…Other schools are also seeing big demand..."

The President of the University of Arizona explains the importance to the greater community and the nation of their Sustainability program. From gpecgreaterPhoenix via YouTube

"…Illinois State University in Normal, Ill…[has] 21,000 students [and] 65 majors in renewable energy, a program started in 2008 with help from a $1 million Department of Energy grant. The program has…[more demand than capacity.] Nearby employers, including those in wind energy, hope to hire future graduates…

"…Massachusetts Institute of Technology… launched a minor in energy studies [in September]. A student survey said 43% of freshmen and sophomores were very or extremely interested in it…MIT's student energy club has 1,700 members, vs. several hundred a few years ago…"

Professor Kammen explains why students should get into energy studies. From OLLIBerkeley via YouTube

"…University of California-Berkeley…has seen student interest in its introductory energy class explode. Ten years ago, it attracted 40 or so students. Now, the class runs 270, says Daniel Kammen, director of the school's Renewable and Appropriate Energy Laboratory.

"The Obama administration has estimated that jobs in energy and environmental-related occupations will grow 52% from 2000 through 2016, vs. 14% for other occupations. That's partly why budget-strapped schools are adding energy and sustainability programs even while cutting other majors…"

From July 26: EMISSIONS TRADING, A FLAWED BUT FIXABLE CAP&TRADE SOLUTION

Update 12-29: Cap&Trade will be THE New Energy controversy in the first half of 2010. It is at the heart of the energy and climate legislation the Obama administration hopes to get through the Senate in the spring. And it is resented, mistrusted and discredited on the Right AND the Left.

Because of the controversy, the perhaps superior revenue-neutral carbon tax might get a sounding, though many consider any legislation that includes the word “tax” dead on arrival.

This post summarizes the findings of a progressive group in the UK that concluded cap&trade is not a lost cause but can be made to work. That is also the contention of the most forward-thinking elements of U.S. big business and of the Democratic political leaders who will be carrying the banner of energy and climate legislation for the President.

The fates of the U.S. New Energy economy and the world’s climate hang in the balance.


Carbon emissions trading system 'seriously flawed'; Report by campaign group Sandbag critical of scheme/Hot air carbon credits preventing actual emissions cuts
Damian Carrington, 20 July 2009 (UK Guardian)
and
EU soft on polluters, greens say
Laurence Peter, 22 July 2009 (BBC News)

SUMMARY
The European Union (EU) Emissions Trading Scheme (ETS), the world’s biggest and most established greenhouse gas emissions (GhGs) trading system, is once again being attacked.

The criticisms and responses are especially important right now as the U.S., Australia, Japan and China are all in various stages of designing their own trading systems and the international community will meet at the end of this year to finalize plans for a (hopefully) worldwide effort to fight climate change and the GhGs that are driving it.

ETS S.O.S.:Why the flagship ‘EU Emissions Trading Policy’ needs rescuing, from UK climate change and emissions trading specialist group Sandbag, reports that Europe’s biggest emitters are taking advantage of the continent’s cap&trade marketplace and making a killing at the expense of EU utility ratepayers and the world’s climate.

More significantly, flaws in the ETS design threaten to allow the EU’s worst spewers to go unrestrained for the coming 7 years.

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Opponents of cap&trade jumped at the opportunity to use the Sandbag findings to their advantage but the report is not intended as a condemnation of the ETS.

The report, authored by Anna Pearson and Bryony Worthington, is an attack on how the ETS is currently being implemented but is offered in support of reaching an agreement at the December international summit on climate change in Copenhagen to make the cap&trade system work better, not to imply the system should be abandoned.

The report describes the ETS as “a central plank” the EU’s effort to deal with climate change where 2 billion permits are traded yearly. Though the ETS could potentially be a sharp tool at cutting GhGs, it is currently blunted by 2 major flaws: (1) Too many permits are available. (2) The market has no provision to manage falling demand for permits.

The ETS, according to Sandbag’s report, did not set strident enough emissions cutting goals and then issued too many permits to big emitters in the early stages of the system. The result was that permits were too abundant and therefore too cheap. It was too easy and too cheap to pay to spew.

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The assumption was that over time caps could be ratcheted down and excess permits would be used up. That was about to happen in 2008. The permit value had begun to stabilize. Then the worldwide economic downturn occurred. Emitters’ productivity fell off. They were generating fewer emissions and needed fewer permits.

The ETS presently may have as many as 700 million surplus permits available for use through 2020.

To make matters worse, the market was designed with the assumption there would be no need for a mechanism to cope with falling demand. Energy demand was expected to grow while caps were tightened.

There was a mechanism designed into the system to protect the big emitters from demand that became too great and threatened to drive the price of generating emissions too high too fast. It was the availability of Certified Emissions Reductions (CERs) through the United Nations (UN) Framework Convention on Climate Change (FCCC) Clean Development Mechanism (CDM).

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Should ETS permits become scarce and drive the price up high enough to inhibit industrial activity in the EU, the designers reasoned, emitters could offset their spew by buying CERs for emissions reducing projects in emerging economies and undeveloped nations. Competition between the CER and ETS permits markets would keep both manageable.

When the recession set in, there were not only excess ETS permits but there were 265 million approved CERs, of which only 82 million were purchased. This grossly further diminished the value of the excess ETS permits.

There could be as many as 900 million CERs available through 2020.

That’s a total of 1.6 billion permissions to emit going forward over the coming decade.

There is now no need for the big emitters to obtain new permits and the permits they now own make it possible for them to continue doing business without any cuts in GhGs through 2020. What’s more, the rules allow them to hold up to 40% of current permits for use through 2020, so they may be able to continue spewing without penalty, according to Sandbag, for approximately the next 7 years, especially if market demand remains constrained and productivity remains reduced.

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The worst short-term consequence is that the EU’s ability to provoke action by the international community at Copenhagen is now profoundly compromised. Its “central plank” in the climate change fight shows little effect and shows little promise of having an effect.

The even worse long-term consequence is that, with too many permits sellers and too few buyers, the price of emissions is very low and is likely to remain so. The cap&trade system therefore is generating and will go on generating few revenues to invest in New Energy infrastructure. And it will not price emissions at a cost that will give big emitters any reason to invest. Without present investment in New Energy, there will be little New Energy in the future and GhGs will be the same devastating reality at the end of the 2nd decade of the 21st century that they are at the end of its 1st decade.

The price of permits is currently ~14 euros per tonne of GhGs. The generally accepted rule is that the cost of emissions must be ~25 euros per tonne to drive a large-scale transition to New Energy. (Interestingly, it is estimated that industry is unlikely to invest in carbon capture and sequestration technology until the price on emissions reaches 40-to-50 euros per tonne.)

Sandbag says the only solution is a sharp increase in required emissions reductions, from the present 20% goal to 30% below 2005 levels by 2020. It also suggests that a revised plan must be much more stringent with the big emitters. It wants the excess permits in the system cancelled.

Should the international community reach a deal at Copenhagen to cap world emissions, Sandbag wants the EU to boost its GhG cuts goal for 2020 to 40% below 2005 levels.

The good news: As a result of the economic downturn and reduced productivity, EU emissions are down despite the limited effectiveness of the ETS.

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COMMENTARY
Funny story: Sandbag reports that 10 European plants account for ~60% of all ETS industrial surplus permits and 3 of the 10 plants, accounting for 15% of the surplus permits, are operated by Arcelormittal, a steel maker. A spokesman for Arcelormittal said that, well, yeah, the company did make some money from the 1st phase but, heck, they didn’t design the system…

The 2nd phase of the EU ETS began in 2008 and runs through 2012. Its 1st phase, from 2005 to 2008, was marred by the tribulations of a just-initiated system in which provisions for big emitters were generous, to allow them to transition to new business circumstances in which emissions had a cost. The ETS had been widely perceived to be stabilizing in early 2008. Then the economic downturn presented unforeseen circumstances.

The 2nd phase of the ETS extended caps to more of the EU’s worst emitters, including power plants and energy-intensive industries (cement, steel and glass manufacturers), and covered around 50% of all EU GhGs.

Although the big emitters took advantage of the benefits they were given in the 1st phase, the financial profit-taking was seen as compensation against the costs of transition.

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When the big emitters realized they would not need a large part of the permit supply they held for the 2nd phase because of decreased productivity and associated reduced spew resulting from the economic downturn, they dumped the permits on the ETS for capital.

That would not be so problematic if there were not still such an excess of permits. If the companies had sold permits that they would soon once again need, the market would act to rationally discourage spew through a climbing price for permits. As long as the need for permits remains restrained, though, the price will not climb. Diminshed demand for permits will remain the case as long as the big emitters’ productivity is low. Unfortunately, Sandbag and many other forecasters see the conjunction of excess permissions to emit, in the form of both ETS permits and CDM CERs, and low productivity to characterize the coming years.

Some ETS observers are not yet convinced the situation is quite so dire. When the permits were dumped, at the end of 2008 and in the early part of 2009, ETS prices dropped below 10 euros/tonne. In recent months, as the world economy has stabilized, the price has climbed back to thye 14 euros per tonne level and held steady. It could be an indication of the potential of the market to respond.

One BBC report says power companies do not have excess permits but are running short and buying from cement and steel manufacturers.

This is good news and bad news. It means energy is being consumed and that could translate into economic activity. It also means EU utility ratepayers are subsidizing the losses of manufacturers in the bad economy.

The best outcome would be that companies take some short-term profits during the worst of the downturn but hold a significant enough portion of their excess to protect themselves against returning demand and productivity. In a very good sign, that is reportedly exactly what Arcelormittal, which did so well in the 1st phase, is doing.

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That is also the pattern observed by watchers of the ETS central emissions bank.

Emissions trading worldwide in 2008 reached a 92 billion euro (£79 billion, $130 billion) value on a volume of 5 billion tonnes of GhGs.

QUOTES
- Tim Yeo, chair, UK parliament environment audit committee: "These findings confirm what many have begun to suspect. Although emissions trading remains conceptually valid, in practice the EU ETS has not succeeded in driving investment in low-carbon technology [and]… Concern remains about the extent to which British companies can purchase credits overseas instead of cutting emissions at home "
- Barbara Helfferich, environment spokesperson, European Commission: "Let's not panic about it yet…[The EUA price has remained] relatively stable over the past few months [at 14 euros/tonne]… The best measure is the market - if there were an over-allocation of permits you would see the price radically drop…"
- Jean Lasar, spokesman, Arcelormittal: "We haven't sold any permits in this trading period... we are keeping them, we might need them at a later stage…We can't be expected to shape our carbon strategy on what is happening now in the market. The long-term strategy is to significantly reduce emissions…"

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- Bryony Worthington, founder/report co-author, Sandbag: "With too many rights to pollute in circulation, the scheme is in danger of being rendered irrelevant…At a time when other countries are looking to set up their own trading schemes and the world is set to debate a global deal on how to tackle climate change, [this] flagship policy urgently needs rescuing – starting with much tougher caps."
- From the Sandbag report: “Despite its difficulties, the EU Emissions Trading Scheme still has enormous potential to cut carbon emissions by enabling the market to do what it does best, uncover the most cost efficient abatement opportunities. It is vital that debate starts now on how to improve the Emissions Trading Scheme.”
- Guy Turner, director of analysts, New Carbon Finance, predicting market forces would eliminate the surplus permits, bring the emissions price back up and drive emissions cuts: "The 21% target will look tight by 2020."
- Rajendra Pachauri, head, Intergovernmental Panel on Climate Change (IPCC): "[An international agreement at Copenhagen] may change the whole dynamic. That is my feeling, though I may be wrong."