WITHOUT AN ENERGY/CLIMATE BILL - DETAILS OF A VERY REAL NEW ENERGY FUTURE

What If There Is No Climate/Energy Bill? Civil Society Institute Report From Synapse Shows Clean Energy Future Still Possible For U.S.; With Uncertainty Mounting About Climate/Energy Bill, Major New Study for CSI Details Path for Breaking Away From "Business As Usual" in the Electric Power Sector.
May 11, 2010 (PR Newswire)

THE POINT
If there ever was any promise of agreement on federal energy and climate legislation, it withered on the vine in Spring’s perfect storm of fossil fuel disasters. The just-released Kerry-Lieberman bill, 1,000 pages long and promising something for everybody, is now unlikely to ease the impending deadlock.

Fossil fuel supporters are dug in for the duration, desperately working to spin the greed-driven neglect that produced a coal mine human atrocity and an offshore oil rig human and environmental atrocity into some kind of perverse learning experience. The most vociferous environmental advocates are ready to respond: Hitler’s holocaust was a perverse learning experience, too, and the lesson was “Never again!”

While only the most adamant at the ends of the spectrum will raise a loud clamor in these days of Arizonan xenophobia and Wall Street-inspired class-based fury, but many will find things to oppose in the just unveiled American Power Act, an attempt at bipartisanship on federal energy and climate legislation from Senators John Kerry (D-Mass) and Joe Lieberman (I-Conn) that lost its Republican sponsor - Senator Lindsey Graham (R-SC) - over the immigration issue before it was finished. There will be protests about its provisions, be they benefits for or protections from the fossil fuel industries.

This week's Senate and House hearings on the Gulf oil spill revealed the divide: Conservatives condemned the disaster, said environmentalists cannot use this as an excuse to stop oil exploration and called for getting on with drilling. Liberals condemned the disaster, called for a moratorium, New Energy and Energy Efficiency and insisted that getting on with offshore drilling as the fossil foolish demand is unacceptable.

Although political vicissitudes are often surprising, this debate likely precludes compromises on the American Power Act that might otherwise have seen the creation of a first-ever national Renewable Electricity Standard (RES) requiring regulated U.S. utilities to obtain a specific portion of their power from New Energy (NE) and Energy Efficiency (EE) by a specified year, as well as a first-ever effort to put a cap and a price on U.S. greenhouse gas emissions (GhGs).

So it is worth noting a new study that examines what is possible without such legislation. Surprisingly, Beyond Business As Usual; Investigating a Future without Coal and Nuclear Power in the U.S., from Synapse Energy Economics, Inc. (Geoffrey Keith, Bruce Biewald, Kenji Takahashi, Alice Napoleon, Nicole Hughes, Lauri Mancinelli, and Erin Brandt) for the Civil Society Institute, concludes that a phased, long-term transition away from the dangers of coal and nuclear energy is both practical and economically feasible.

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The paper’s "Transition Scenario" calls for a renewed emphasis on EE as a means to make NE practical and the dangerous Old Energies unnecessary. The U.S. could retire all its coal plants and 28% of its nuclear capacity. This would cost an estimated $10 billion more per year than "business as usual" (BAU) in 2020 but it would save $5 billion per year by 2040 and $13 billion per year by 2050 (not counting the savings from reduced GhGs and public health costs). The typical residential consumer would pay ~$2.20 per month more in 2020 but save ~$1.50 per month in 2040 and ~$4.00 per month in 2050.

Not only would such a transition have a profoundly favorable impact on global climate change but it would rid the air of much toxic coal plant spew (mercury, nitrogen oxides, NOX, and sulfur dioxide, SO2) and eliminate the environmental devastations of coal ash, mountaintop removal (MTR) coal mining and nuclear power plant radioactive waste.

Although fossil foolish fatalists might describe the non-partisan Civil Society Institute’s ideas as slightly utopian, the paper limits itself to existing technologies and assumes none of the windfalls to NE and EE that would come from legislation like the American Power Act. Its cost data is based on actual project costs. Its estimates of transmission costs are based on the building of comparable wires. And it includes in its NE cost data the latest information on grid integration of variable generation.

The fossil foolish would surely also complain that higher levels of dependence on “intermittent” energies would risk calamitous power outages - but they would be wrong. The New Energies are not intermittent, they are – like all forms of power generation – variable. By increasing EE, streamlining transmission and removing the most inflexible forms of power generation (coal and nuclear) from the power mix, more wind and other types of variable generation could be integrated into the grid supply at minimal cost in conjunction with the equally reliable firming of natural gas and biomass generation.

The study describes in detail the regional impacts of the Transition Scenario changes. It would utilize the Midwest’s massive wind assets for Midwestern power and South Central winds to generate electricity for the Southeast. The Northeast and California would exploit local resources and import less power. The Northwest would be a net New Energy exporter. The immense solar energy assets in the Southwest would be developed, as would nationwide biomass and geothermal assets.

Because of the development of local assets and the aggressive development of EE, less transmission infrastructure would be required.

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It is a simple and incontrovertible fact, discovered over and over again by study after study, that the nation’s New Energy assets – deployed in conjunction with available Energy Efficiency practices and technology – are more than adequate for the U.S. to transition from a polluted, energy-dependent part of the world’s problem to an emissions-free, domestically-driven New Energy economy that would be a part of the world’s solution.

Any other conclusion about what is possible is part of the misdirection and spin from those with vested interests in Old Energy. The American Power Act is a noble effort to reach a compromise between those with vested interests in the past and those who are struggling toward the future with all their might.

Even if election year politics defeat it, the ineluctable future looms in the facts: While 29 coal miners were killed in a single cave in and 11 oil workers were killed and the Gulf brought to the edge of devastation by a single offshore oil rig explosion, somebody somewhere complained about the noise from wind turbines and a solar system installer banged his ankle hard on a rooftop panel. It is not hard to identify the disasters.

Money is going to be spent in regenerating the U.S. energy infrastructure. What remains is the choice of whether to spend that money on expensive efforts to rehabilitate Old Energy - like the follies of "clean" coal and affordable nuclear - or to spend it on New Energy - like the sun, the wind, and this good earth's flowing waters and deep heat - and the infrastructure of energy's future.

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THE DETAILS
American Power Act, Objectives: (1) transform the economy, (2) move toward energy independence, (3) improve air quality, (4) create millions of good domestic jobs, (5) move the U.S. toward leadership in the future’s New Energy economy.

American Power Act, Method: (1) set an achievable national GhG-reduction goal (17% by 2020 and 80+% by 2050) and refund the revenues earned from implementing and enforcing it to consumers and businesses.

American Power Act, the 5 principles: (1) Consumers benefit, getting two-thirds of all revenues raised from requiring major emitters to buy permits and fining them if they emit beyond permitted levels, while the rest go to (a) reducing the deficit, (b) keeping U.S. business competitive during the transition, and (c) investing in NE and EE projects. (2) Invest in domestic power supplies to reduce dependence on foreign oil. (3) Invest in NE and EE technology innovation to keep the U.S. competitive, create millions of jobs and reinvigorate the manufacturing base. (4) Cut emissions while protecting all industries, including power plants, heavy industry and transportation. (5) Make the GhG-cutting method – a secure, well-functioning permit-trading market system – simple, stable and secure.

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The Transition Scenario plan to replace the U.S. coal fleet is timely: Many are 40+ years old and in need of upgrades. The nation’s transmission system is also in need of renovation. And global climate change, of course, urgently demands changes in power production.

Plans to utilize “abundant” U.S. coal reserves by implementing “clean” coal technology entail enormous expenditures and do not solve the environmental problems of mercury, SOX, NOX, coal ash and mining. Plans to shift to nuclear power overlook the cost burden of new nuclear technology, the absence of a solution for the radioactive waste and the small but imponderably profound risk - especially in light of the Gulf oil spill from supposedly safe offshore drilling - of nuclear accidents.

The goal of the Civil Society Institute study: A transparent and objective analysis of the cost of moving away from coal and nuclear and toward NE and EE. Conclusion: The U.S. could retire all its coal plants and 28% of its nuclear capacity at an estimated cost of $10 billion more per year than "business as usual" (BAU) in 2020 and a saving of $5 billion per year by 2040 and $13 billion per year by 2050 (not counting the savings from reduced GhGs and public health costs). The typical residential consumer would pay ~$2.20 per month more in 2020 but save ~$1.50 per month in 2040 and ~$4.00 per month in 2050.

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The plan would also cut GhGs and other kinds pollutants and eliminate the environmental hazards associated with coal and nuclear energy such as coal ash, mountaintop removal mining and radioactive waste.

Cost data is based on real world projects and it includes the costs of variable generation grid integration.

The reductions in energy consumption included in the paper are based on the assumption that by 2021, through the deployment of EE technology and practices, the nation would begin reducing its electricity consumption 2% per year. This is a growth in EE that has been demonstrated to be entirely practical in states like California and Massachusetts.

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Such EE deployment would reduce electricity used from 2010’s terawatt-hours (TWh) to 3,600 TWh in 2050. Coal use would be cut by ~1,800 TWh (100%) between 2010 and 2050. and nuclear power use would be cut 220 TWh below 2010 to become only 17% of total generation in 2050. Natural gas use would fall 37 TWh.

More data from the paper:
(1) EE cuts demand an average of 1.3% per year from 2010 to 2050, from a predicted 5,900 TWh to 3,600 TWh in 2050.
(2) Retiring all coal plants cuts ~320,000 megawatts (MW) from BAU in which 22,000 MW of new coal capacity would be added and coal generation would increase by 670 TWh (37%).
(3) ~30,000 MW of nuclear capacity would be retired, and nuclear generation would fall by 240 TWh (30%).
(4) Natural gas generation would be 26% greater than in 2010, which is 230 TWh and 18% less than BAU.
(5) Wind would grow to 26% of the national electricity production and ~220,000 MW of onshore wind capacity would generate 810 TWh in 2050.
(6) On the east coast, 27,000 MW of off-shore capacity would produce 3.4% of U.S. power.
(7) Biomass would produce 9% (34,000 MW) of U.S. electricity by 2050.
(8) Solar PV would supply 3.3% of U.S. electricity (53,000 MW) in 2050.
(9) Solar power plants and other forms of solar heating would be 1.5% (14,000 MW) of the U.S power mix.

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A key form of EE that must be added going forward is combined heat and power (CHP). The plan calls for up to 42,000 MWe of CHP capacity by 2050. ~7,900 MWe of it from biomass-generated biogas. To add this much CHP, an effort must be made to identify potential CHP host schools, hospitals, shopping malls, office parks, and other commercial and industrial facilities, especially those near biomass feedstocks.

The study carefully assesses the capability of U.S. natural gas and variable generation New Energies to meet current reliability and cost standards of electricity production. Natural gas reserves were found to be adequate. Existing state EE programs already produce the improved levels of peak load efficiency assumed. Total wind and solar installed capacities were derated to 15% to allow for extreme variability.

By removing most of the inflexible generation from coal and nuclear energy, the flexibility of gas and the New Energies, given higher levels of peak load EE with demand response schemes and larger transmission balancing areas, could readily preserve U.S. reliability at affordable prices. This transition is already ongoing. The plan merely embraces the future that is inevitably coming and avoids wasting time and energy trying to preserve the Old Energies with expensive but ineffective technologies.

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The paper’s detailed analysis of regional capacities and consumption points to a new system of energy balances. Rebalancing the use of U.S. resources would make more complete use of the nation’s New Energy assets. The Midwest’s massive wind assets would be used for Midwestern power. South Central wind resources would be used to generate electricity for the Southeast. The Northeast and California would exploit local resources and import less power. The Northwest would be a net New Energy exporter. The immense solar energy assets in the Southwest would be developed, as would nationwide biomass and geothermal assets.

The improvements in EE and local balancing would lead to a significantly reduced need for new transmission but the nation’s power grid is hopelessly antiquated and vulnerable now and BAU necessitates an $8 billion per year investment for upgrading it. The plan’s requirements add a further $3.1 billion per year investment by 2050 for a total Transition Scenario cost by 2050 of ~$20-to-$60 billion.

The paper includes a detailed assessment of changes in air and water pollution that would come with the Transition Scenario.

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The net increased cost of the Transition Scenario to the nation is quite modest through 2020 and then begins saving money for electricity consumers. Overall, the savings through 2050 are significant. But the paper’s calculations do not include the benefits from dramatically reduced externalities. The Beyond Business As Usual environmental and health impacts from reduced GhGs, mercury, nitrogen oxides (NOX) and sulfur dioxide (SO2) would significantly cut the $62 billion per year in health care costs associated with power plant air pollution.

The total increased cost ~$10 billion in 2020 is ~0.25 cents/kWh, ~2.5% above the current average retail price of electricity of 10 cents/kWh. This is a ~$2.20 per month increase in the typical residential consumer’s electricity bill. By 2040, the same customer would be saving ~$1.50 per month and ~$3.90 per month by 2050.

The BAU/Reference Case is based on the 2010 Annual Energy Outlook (AEO) from the U.S. Department of Energy (DOE) Energy Information Administration (EIA). The AEO nis a 25 year forecast and its data was extrapolated to 2050 for the paper.

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QUOTES
- Pam Solo, president, Civil Society Institute: "The electric power industry in the U.S. is at a crossroads. While the industry remains obsessed with such dirty and needlessly expensive 19th and 20th century 'business as usual' solutions as coal-fired and nuclear power, there is an opportunity today to make the transition without multi-billion dollar gambles on unproven carbon capture and sequestration technology and risky nuclear loan-guarantee bailouts. What elected officials and other Americans need to understand is that, even if the climate bill falters, we can still make the move to dramatically cleaner and healthier electricity generation."

- Bruce Biewald, president of Synapse Energy Economics Inc.: "This study…finds that a future built on more efficient use of electricity and development of the nation's renewable resources would pose modest near-term costs but would cost less than 'business as usual' over the long term."

- Grant Smith, executive director, Citizens Action Coalition of Indiana: "…Given the substantial financial, public health and environmental risks posed by coal-fired and nuclear power, there is a moral and ethical imperative to eliminate these resources from the electric generation mix."

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- From the paper: “This work is motivated by a simple realization. The need to reduce CO2 emissions will force a major retooling of the electric industry. If we retool around coal and nuclear energy, we will exacerbate a number of environmental, health, and safety problems. If we retool with efficiency and renewable energy, we will largely eliminate those problems. Moreover, the traditional arguments against renewable energy are no longer valid. Energy efficiency and several renewable technologies now cost less than new coal and nuclear plants in terms of direct costs—ignoring the externalized costs of coal and nuclear energy. Additionally, efficiency and renewables are already in commercial operation, so the technology development and commercialization challenge of retooling with these technologies appears smaller than the challenge of developing low-carbon coal technologies and a new fleet of nuclear plants. Moreover, there is no rush to build additional capacity. Surplus generating capacity in every region of the country provides us the time to carefully and systematically increase investment in renewables and energy efficiency while we reduce investment in coal-fired and nuclear power.”

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- From the paper: “This is a high-level study, and working out the details of a transition like the one envisioned here would be challenging. However it would certainly be no more challenging than working out the details of a carbon cap and trade program, a program to retrofit the nation’s coal plants with new emission controls and a new generation of nuclear power plants. Moreover, energy efficient and renewable technologies are already in widespread use in our power sector. Carbon capture and sequestration remains speculative and no “new generation” nuclear plant has yet been completed. The decisions we make now about how to remake our electric power industry will affect the lives of generations to come. We hope that this study contributes to a careful comparison of the options.”