NewEnergyNews: TODAY’S STUDY: THE ENERGY TRILEMMA

NewEnergyNews

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

Every day is Earth Day.

YESTERDAY

  • THE STUDY: NEW ENERGY POSSIBILITIES – THE MICHIGAN EXAMPLE
  • QUICK NEWS, April 16: THE RACE AGAINST CLIMATE CHANGE; THE FAST RISING POTENTIAL OF U.S. NEW ENERGY; BIG TEXAS WIND SHRINKS ELECTRICITY MRKT PRICE
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    THE DAY BEFORE

  • THE STUDY: THE MONEY IN NEW ENERGY
  • QUICK NEWS, April 15: WORLD WIND TO BOOM THRU 2014; NAT GAS AND SOLAR WERE 75% OF U.S. 2013 NEW POWER; MAINE OFFICIALLY AFFIRMS SMART METERS’ SAFETY
  • THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: THIS COULD BE THE REAL VALUE OF SOLAR
  • QUICK NEWS, April 14: DE-RISKED RENEWABLES HAVE MORE INVESTORS THAN DEALS; THE MYTH OF CONSOLIDATION IN SOLAR; TEXAS BREAKS MORE WIND RECORDS
  • THE DAY BEFORE THAT

  • Weekend Video: Bill Maher On What’s Happening In The Oceans
  • Weekend Video: The Human Disharmony In The Climate System Symphony
  • Weekend Video: A Few Thoughts About Solar 2.0
  • AND THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE- THE CLIMATE CHANGE FIGHT MOVES DOWNTOWN
  • FRIDAY WORLD HEADLINE-SHIFTING AND GROWING AMONG GLOBAL SOLAR LEADERS
  • FRIDAY WORLD HEADLINE-UK OFFSHORE WIND SETTING RECORDS
  • FRIDAY WORLD HEADLINE-MICROGRIDS RISING AROUND THE WORLD
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT THURSDAY, April 10:

  • TTTA Thursday-FOX NEWS ON CLIMATE – FAIR AND BALANCED BUT MISLEADING
  • TTTA Thursday-RECORD SOLAR GROWTH GOES ON
  • TTTA Thursday-WIND’S DROPPING COST MEANS SAVINGS ON U.S. POWER BILLS
  • TTTA Thursday-EFFICIENCY SCORING BIG ACROSS THE COUNTRY
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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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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • Wednesday, December 12, 2012

    TODAY’S STUDY: THE ENERGY TRILEMMA

    World Energy Trilemma: Time to get real – the case for sustainable energy policy

    December 2012 (World Energy Council)

    Executive Summary

    You can see it in the faces of the 670 million people who recently suffered through blackouts in India, or sense it from the frustrations expressed by three million Americans forced to live without power in the middle of a record heat wave. After decades of work to advance sustainable energy solutions, an energy gap is growing as energy systems around the world buckle under significant strain.

    Policymakers and the energy industry urgently need to work together to correct this mismatch by making the hard decisions necessary to realize sustainable energy systems on a much broader scale. If the supply of sustainable energy continues to lag behind rapidly rising demand globally, billions of people could be forced to live without reliable electricity and economic growth could be put in jeopardy. Already, 1.3 billion people live without access to electricity. This number could rise if demand continues to jump by as much as 30% over the next two decades.

    Goals supported at The United Nations Conference on Sustainable Development (Rio+20) in June 2012 could also remain out of reach. Unless action is taken now, it will be difficult to double the rate of energy-efficiency improvement, ensure universal access to modern energy, or to double the share of renewable energy in the global energy mix by 2030.

    To assist policymakers and the energy industry with pressing forward sustainable energy systems, the World Energy Council, in collaboration with global management consulting firm Oliver Wyman, has prepared the report World Energy Trilemma: Time to get real – the case for sustainable energy policy. This first of a two-part series of reports examines the drivers and risks preventing the development of sustainable energy systems. It then recommends actions to address these risks and to accelerate a global transition to a low-carbon future which will present new opportunities for economic growth.

    The 2012 report describes what senior energy industry executives believe they need from policymakers to advance sustainable energy systems. It is based on interviews with more than 40 energy industry CEOs and senior executives and the 2012 Energy Sustainability Index built on an analysis of 22 indicators across 93 World Energy Council member countries. The 2013 World Energy Trilemma report will focus on what policymakers need from the energy industry.

    Three dimensions of energy sustainability

    The World Energy Council’s definition of energy sustainability is based on three core dimensions - energy security, social equity, and environmental impact mitigation. The development of stable, affordable, and environmentally-sensitive energy systems defies simple solutions. These three goals constitute a ‘trilemma’, entailing complex interwoven links between public and private actors, governments and regulators, economic and social factors, national resources, environmental concerns, and individual behaviours

    Energy industry recommendations

    CEOs and senior executives from leading energy companies have three main recommendations for how policymakers must expedite the development of sustainable energy systems: 1) Design coherent and predictable energy policies, 2) Support market conditions that attract long-term investments, and 3) Encourage initiatives that foster research and development in all areas of energy technology.

    Recommendation 1: Design coherent and predictable energy policies

    Policymakers must establish coherent, long-term, accessible, predictable, and transparent policies that rise above narrow interests to respond to energy needs holistically. Contradictory and ad hoc policies developed in isolated ‘silos’ hinder energy investments. Sound and coherent policies that are oriented toward results rather than around the types of energy or technology used to achieve them can - and should - enable the world to achieve energy sustainability.

    A master plan must be developed that connects energy policies on two fronts. First, national energy policies must complement and link together national industrial, financial, environmental, transportation, and agricultural goals and policies. Second, policies concerning energy resources, infrastructure, environmental issues, and regulations must be regionally coordinated. Sharing resources across borders enables countries to increase regional energy security, reduce power costs, and attract investments by creating greater market scale to interest investors, optimise natural resources, and develop common infrastructure.

    To make sure that these policies are predictable for industry, governments must develop regulations that are consistent, clear, and simple, in spite of the complexities that they address. Equally important, policymakers should separate energy policies from short-term politics to guarantee that they reflect a well-defined, long-term view. A significant hurdle to policy longevity, as perceived by industry, is the conflict between the long-term nature of energy investments and the comparatively short-term nature of politics.

    Consumer education and awareness is also crucial. To encourage energy efficiency, for example, governments must not only establish environmentally responsible construction and manufacturing standards, but can also set a regulatory framework for progressive energy tariffs to make consumers more aware of energy efficiency as a means to reduce overall national energy costs, introduce tax reductions on energy efficient equipment (on VAT or on import duties), or on energy-efficiency investments (reduction in VAT rate).

    Recommendation 2: Support market conditions that attract long-term investments

    With consistent and committed regulatory approaches, policymakers must encourage the development of attractive markets to stimulate long-term private investments in energy infrastructure and technologies. Simultaneously, they must support the development of new investment mechanisms that can reduce risks and stimulate greater private sector investment in the energy sectors. Such mechanisms can include green banks, a green bond market, and public private partnerships. These efforts must be underpinned by a stable and predictable carbon price necessary to drive the transition to a low carbon energy system.

    Huge investments are required to improve access to energy worldwide, develop new energy technologies, and to build new and replace ageing infrastructure. Cash-strapped governments have limited funds to support a shift to a low-carbon future. Unfortunately, capital from the private sector and from investment funds remains largely on the side lines. Less than 1% of pension investment funds worldwide, for example, are invested in infrastructure projects designed to improve the supply of electricity.

    The use of subsidies should be minimised, since they increase political and regulatory uncertainty. This distorts competition and erodes investor confidence. If used, subsidies must be focused on achieving a specific outcome, and have a clear sunset built-in from the start.

    Recommendation 3: Encourage initiatives to foster research and development in all areas of energy technology

    To drive innovation further in all areas of energy technology, policymakers should implement goal driven policies rather than prescriptive policies. New renewable energy and fossil fuel technologies can bring the world much closer to attaining sustainable energy systems and potentially spur economic growth. For this to happen, however, policymakers need to leave it to the market to decide which types of technology should survive so that they can remain competitive in the long term.

    ‘Technology-neutral’ research and innovation policies should be supported with economic incentives and appropriate accountabilities. Intellectual property rights must also be strongly enforced for the private sector to invest in environmentally responsible and energy-efficient technologies.

    Finally, governments must support the research, development, and demonstration of new technologies to boost investor confidence. Policymakers will encourage companies to invest in developing new technologies if they establish a strong research-oriented environment that promotes national and international collaborative research and funds large-scale demonstration projects that support companies' efforts to bring their technologies to market.

    Energy Sustainability Index

    The 2012 Energy Sustainability Index shows that developed countries such as Sweden, Switzerland, and Canada are closest to achieving sustainable energy systems. This is in large part because a higher share of their energy mix comes from low carbon energy sources, such as hydro power and from nuclear power. These countries are leaders in terms of energy security largely because of their diversified energy mixes.

    The top three performers also have a significant advantage when it comes to mitigating their energy systems' environmental impact because they have long-term programs in place. Sweden, for example, has significantly reduced its greenhouse emissions even though its GDP is rising mainly because it has set long-term sustainable energy and climate policies and goals for 2020.

    Nevertheless, developing sustainable energy systems overall remains a challenge. Countries at all stages of development still have trouble balancing the trade-offs involved in providing secure, affordable, and environmentally-sensitive energy. Developing countries, for example, struggle to use cleaner forms of energy as they industrialise.

    Sound policy making determines to what extent a country will be able to develop a sustainable energy system. The energy industry and policymakers should assist in helping nations to forge an alternative path of energy development.

    As Figure 1 shows, the top ten performers all have high GDPs per capita. They are OECD member countries with predictable and strong political, societal, and economic frameworks. However, there are also key differences between them, underscoring that there is not one single solution. France is a significant user of nuclear power. Canada is a net energy exporter. By contrast, Japan is a net importer.

    Conclusion

    Energy systems around the world remain at vastly different stages of development. But all countries share a common problem: They are far away from achieving sustainable energy systems.

    To make affordable, secure, and environmentally sensitive energy systems a reality, policymakers urgently need to develop interconnected, lasting, and coherent energy policies. Policymakers and energy industry executives must develop a common understanding of what energy sustainability is, its importance for economic growth, and the steps necessary to achieve it. Only then can they work together to build on clearly defined sustainability goals that will encourage all forms of energy in every nation’s energy mix by taking a technology-neutral approach. With clearly defined, coherent, and predictable energy policies, the energy industry will be able to mobilise the natural and human resources, finances, and technologies necessary to realize sustainable energy systems. Without them, billions of people will continue to live without secure, affordable, and environmentally-sensitive energy. Global prosperity could also be threatened. There is no time to waste.

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