Thursday, December 10, 2009

It's Just Good Engineering....

It's rather interesting that on the heels of the Climategate email controversy the World Meteorological Organization publishes a report stating that the decade from 2000 to 2009 was the warmest on record. No, I don't think that this was intended to deflect the public's attention from the controversy although it may seem that way to some. It is, however, seriously disappointing to learn that some climate scientists apparently suspended their belief in true scientific discourse in favor of manipulating data that conflicted with their advocacy.

One of the most cogent arguments that I have seen in favor of dealing with climate change was recently published in a New York Times op-ed column by Thomas Friedman entitled Going Cheney on Climate. Frankly, he could have made the point about the need to plan for low probability, high impact events quite well sans the Cheney analogy, but I suppose it made for a good headline. Aside from the fact that it is simply prudent to plan for such events, he notes that there are several benefits that society would realize from transitioning to clean energy, not the least of which would be greater innovation and energy independence.

But, beyond that, I look at it another way. My engineering training tells me that it is simply good engineering to make the most efficient use of the inputs to production. Why exhaust depletable resources for energy production when there are nondepletable alternatives available? What I'm suggesting here is that there may be a higher economic use of petroleum than setting fire to it (such as creating plastics and other high tech materials). This all comes back to the multiple reasons for promoting renewables and energy efficiency that seem to have been lost in the global warming debate: technological advance, economic development, conservation of scarce resources (including water), etc. This is not just about CO2, or shouldn't be.

In my last column, I noted that climate change was not the only serious issue facing society, and that is still true. But, it doesn't mean that we don't begin to work toward dealing with it, and whether or not there will be a catastrophe in 2050 or whenever is beside the point. We should be good stewards of the only planet we have to live on. That is just good engineering. But, in terms of the contradictory evidence, it is far from clear to me that there are not other natural events beyond our control that may suddenly raise or lower the temperature of the earth more than our actions. For instance, it has been theorized since the mid-1960s that sudden small changes in the orbit and tilt of the earth were the principal cause of successive periods of glacial advance and retreat. If true, all of our mechanations to strictly maintain the temperature of the earth at the levels known in the short time span of recorded history may be for naught. Perhaps adaptation would be a better strategy. Nonetheless, logic and good engineering should tell us that we cannot significantly alter the composition of the atmosphere without some impact. And, while it seems clear that human activities have resulted in a dramatic increase in CO2 within a relatively short time span, the presumed correlation between CO2 and temperature and the notion that it is irreversible is less clear. The fact that one of Kevin Trenberth's emails in the climate controversy noted that it is a "travesty that we can't account for the lack of warming at the moment" illustrates that point.

I have written previously about the religious fervor that permeates the debate on global warming, renewable energy development, and related issues. What I expect from scientists is that they will pursue new knowledge regardless of the direction it leads them. When scientific skepticism and inquiry is replaced by advocacy in pursuit of a largely political agenda, that is when scientists lose credibility. And, we cannot afford that because there are more than enough advocates of one agenda or another espousing their beliefs and publishing studies in support of their position.

One final thought about the continuing discussion of cap and trade and the supposed incentive that it provides as a mechanism to reduce greenhouse gases. This approach merely promises to enrich those that trade in allowances and offsets and the inevitable derivatives that some smart guys will devise to take advantage of the opportunities. In another op-ed piece in the New York Times entitled Cap and Fade, James Hansen identifies the problem well:
"Because cap and trade is enforced through the selling and trading of permits, it actually perpetuates the pollution it is supposed to eliminate. If every polluter's emissions fell below the incrementally lowered cap, then the price of pollution credits would collapse and the economic rationale to keep reducing pollution would disappear."
Let's come back to the basics of regulation. If greenhouse gases are to be considered a criteria pollutant, simply tax or restrict their emissions. Period. And, if you think that offsets are a helpful component of cap and trade schemes, you may be interested in a somewhat tongue and cheek website on this topic called Cheat Neutral.

So, in summary, the science is not settled and the proposed market based solutions are a wrong-headed approach to dealing with the issue. It comes down to just doing the right thing, and that is just good engineering.

Friday, December 04, 2009

Some additional thoughts on renewable energy and rationality

While taking a look back at some of the presentations from the Solar Power 2009 Conference in Anaheim last October, I started thinking about solar industry consolidation, recent issues with transmission, Climategate, and other matters. Overwhelmingly, there is far too much whining over who is getting what subsidy. If you get your costs down and become competitive, this issue goes away. As I've noted elsewhere, this is a matter of technology and economics, not religion. And, if nothing else, the recent issues with Climategate point out the dangers of turning it into a matter of religion. Certainly the revelations from the East Anglia emails demonstrate how the global warming theocracy and its ecclesiastical followers have subverted scientific inquiry and discourse.

Driven partly by the recession and partly by the competitive pressures that virtually all industries eventually experience, the solar industry is now experiencing significant consolidation. Thin film, which seemed destined to be the clear cost leader not so long ago, is now being challenged by cost reductions in crystalline silicon that threaten its growth. And, though it seemed unlikely only a short time ago, some PV manufacturers and suppliers are actually laying off workers. Others are moving production from the US offshore. This competition is precisely what is needed to make solar energy competitive and we should welcome it. Increase the value and everything else will follow.

Transmission is another area that has succumbed to a dogmatic theology. The argument that transmission is a limiting factor on renewable generation is simply a red herring. Virtually all states have some renewable energy potential, whether it be wind or solar or biomass, etc. -- some in more than sufficient quantities. But, do we really need to power the entire U.S. from a 75-mile square portion of the Mojave Desert or from mega wind farms in North Dakota? We need to analyze the trade off between the cost of high capacity factor resources that are dependent on transmission to move the energy and lower capacity factor local resources that don't require it. Moreover, we are now beginning to see resistance from some environmental groups and land owners who do not believe that high voltage transmission lines are necessarily the highest use of pristine land. Thank you.

But, while distributed generation (DG) has its place, it too is not the solution to all of our energy needs. There are tremendous opportunities for the creative and more efficient use of space to deploy renewables -- unused roof tops and awnings over parking lots to name just two. And these don't need to be unattractive if designed well. But the notion that we must deploy black panels along every highway right of way or wherever there are a few square feet of vacant land is also nonsense. The line of thought that if some is good, more is better has unfortunately become the canon of the solar theocracy. I am looking forward to more creative uses of thin films and new technologies in BIPV designs.

If nothing else, consolidation in the solar industry, the turmoil over Climategate, and debates over transmission lines and land use promise to return some balance and rationality to discussions of energy and climate change. That will be a welcome change.

Friday, August 28, 2009

Making a Case for Rationality in [Renewable] Energy Deployment

It has become increasingly evident that there is a serious need for some clear thinking in the energy debate. As I have often said, the sum total of all of the vested interests (utilities, environmentalists, renewable energy advocates, etc., etc.) does not equate to the public interest. In an earlier blog on the Western Wind & Solar Integration Study, I noted that we are becoming increasingly adept at operating the electric grid with greater amounts of intermittent renewable resources. But there are many proponents who are becoming positively irrational about this. It seems that some of the policy makers who are closest to the problem are the farthest from reality. To some I would grant the benefit of the doubt and suggest that they simply know no better. Other proponents would clearly subjugate the public interest to their own economic and/or political self interest. Unfortunately, the result is the same.

As anyone familiar with this field knows, California's renewable standard will likely soon require major utilities to provide one-third of their energy from renewable resources by 2020. It seems to matter little whether or not this is an attainable goal. And, I used to think that California was on the right track in requiring that these renewables actually deliver renewable power into the state in order to qualify. But as the likelihood of meeting this ambitious goal becomes increasingly problematic, the policy makers and stakeholders seem willing to make tradeoffs that will dilute the effectiveness of the goal.

Let's start with an article in the Sacramento Bee describing how the various stakeholders are debating the sourcing requirements for renewable energy to comply with the standard (see Utilities, groups at odds over sources for renewable energy). Utilities are now claiming -- perhaps rightfully so -- that they cannot meet this aggressive standard unless they are allowed to procure resources from out of state, and a California PUC analysis supports this contention. So, if you were in California, which would you find to be the more rational approach: a standard that cannot be met and which encourages utilities to procure out-of-state resources, often at exorbitant costs, or a more reasonable ramp-up in renewables that fosters in-state development at reasonable cost? Would California ratepayers benefit more from sending their utility dollars out of state to essentially purchase RECs or keep that money in state to develop local projects? They may as well propose to get solar energy from a satellite! Oh, sorry, they're proposing that too. And then everyone laments the high contract failure rate in renewable energy.

The lesson seems to be: Set a standard that you cannot achieve and then simply change the way you measure compliance to make it appear that you did. This situation has become so bizarre that Colorado's major utility has now hatched a scheme to combine brown power from unspecified sources with its excess RECs and sell the bundle to California utilities as green power to comply with the standard that they cannot otherwise meet. Of course, the Colorado utility in question hopes to profit handsomely from the sale of these RECs which, incidentally, were already paid for by Colorado ratepayers. What makes this possible from the Colorado utility's perspective is that it has acquired too many RECs, too soon, at too high a cost. This is beginning to look like a zero-sum game. The same amount of renewables will ultimately be developed, the only question is where? Call me old fashioned but how about a scenario in which each utility develops its own renewable resources to serve its own local needs?

I mentioned that the Colorado utility had acquired too many RECs, too soon, at too high a cost. I made this comment back in 2007 when I showed that the utility proposed to purchase more solar RECs than it needed for compliance in an environment where solar costs were projected to diminish rapidly, thereby saddling ratepayers with higher costs than they would otherwise have to pay. This prevented the utility from taking advantage of the inevitable cost reductions that were sure to result from technological advance and deployment experience. But it is this myopic belief that if some is good, more must be better that is responsible for the irrational behavior that is inflicting policy makers with regard to renewable energy. As stated in a recent op-ed piece on cap-and-trade by Paul Gerlach in the South Florida Sun-Sentinel, this "preoccupation with setting unrealistic targets for renewable sources has blinded policy makers to the almost unlimited opportunities for technological breakthroughs in the production and use of conventional fuels..." and, I might add, in the deployment of renewable energy technologies.

Tuesday, August 11, 2009

Geoengineering redux - aka Climate Engineering

Scroll down a bit in this blogspace and you'll find a blog I wrote on Geoengineering as a response to climate change (or, just click the link). It is nice to know that this potential fix is drawing increasing attention in legitimate research circles. Today's NY Times contains an article entitled The Earth is Warming? Adjust the Thermostat which provides an excellent concise discussion of this issue from both sides. The proponents of such solutions rightfully cite the decreasing likelihood of getting worldwide agreement on emissions reduction strategies and note that it may require affirmative action on the part of a few to avert the crisis. This is the assertion I made in my earlier blog post on this topic. Skeptics point to problem of unintended consequences that may result from such activities and they too are correct. Spraying aerosols into the atmosphere to simulate a volcanic winter is likely to have many other adverse effects. Pick your poison.

It is also true that simply adjusting the thermostat, so to speak, won't reduce the amount of CO2 in the atmosphere and thus problems with ocean acidification still remain. That is why I still believe that the best approaches to geoengineering (now referred to in some circles as climate engineering) are those that essentially scrub the atmosphere of CO2 rather than those that simply mask the problem by putting more junk into the atmosphere.

Interested readers should also consult work being done at the Copenhagen Consensus Center which is publishing a series of perspective and analysis papers on climate change and approaches to adaptation and mitigation. It is an excellent resource for those who wish to be more fully informed on the range of solutions that may exist. In my earlier post,
I noted that we should definitely take prudent measures now to avert a calamity in the future. But, I also noted that we must begin a serious investigation of the more active approaches to mitigating climate change and its first cousin, ocean acidification, now so that those technologies may be suitably developed if and when we need them.

Sunday, August 02, 2009

Corporate Right of Passage -- A Note to Techies

Today, I'd like to offer just a short mention and recommendation to read an interview in the Sunday NY Times with Cisco CEO John Chambers (see In A Near-Death Event, A Corporate Right of Passage). In this interview, Mr. Chambers discusses how Cisco's near brush with failure made it a better company. He also discusses how capitalizing on modern modes of communication -- video blogs, distributed communication, and relationship building -- is increasingly important to success in today's world.

Mr. Chambers also mentions something else that I found interesting. In this interview, he notes that "when there’s an accident happening, that’s when you’ve got to be the calmest. And yet that’s when most people are not." This made me think back to a blog I posted on July 15 (see Geoengineering) in which I questioned Eugene Kleiner's assertion that "There is a time when panic is the appropriate response." In contrast, Mr. Chambers goes on to say "So I’ve learned when something with tremendous stress happens, I get very calm, very analytical." Nice to know that I'm not alone in that regard.

There is one other important learning point in the Chambers interview and that is the ability to admit mistakes and failures. Unfortunately, such candor is anathema in the utility and regulatory environment that I am presently part of, especially with regard to renewable energy and public policy. Apparently it borders on sacrilege to question the all knowing legislature, Commissioners, and executive branch policy makers. But, we're learning as we go and their credibility would go much farther if they could only admit "Well, we screwed that one up. Let's fix it and move on." I'm hoping for too much.

Saturday, August 01, 2009

Western Wind & Solar Integration Study

On Thursday, July 30, NREL hosted the Western Wind & Solar Integration Study (WWIS) Stakeholder Meeting in Denver. Great attendance (probably 80 to 100 or so) and some really interesting updates on this work that began in 2007. If you're not familiar with this study, you can find more information on the NREL WWIS website. Generally, the goal is to assess the feasibility of adding as much as 35 percent wind and solar generation within the WestConnect footprint (WY, CO, NM, AZ, NV, and northern CA). Relying on some gi-normous datasets (e.g. 30,000 30MW wind sites in the footprint with data every 10 minutes for 3 years), this has been an extraordinarily computationally intensive exercise. Unfortunately the solar data has been considerably more sparse.

We'll talk about a few of the observations from this study -- some predictable and others not so much. The bottom line, however, is that having 35 percent renewable energy penetration (30% wind and 5% solar) appears technically feasible although operation of the electric grid would have to be dramatically different than it is now. Essentially, instead of the large number of small control areas that presently exist, it would require a larger, more geographically dispersed control area that could balance the intermittent contributions of wind and solar generators. And, as anyone familiar with this field is aware, transmission (or the lack thereof) is an issue. But the extent to which it is an issue appears to be a function of whether we rely on fewer megaprojects located in the best wind and solar resource areas or a larger number of smaller dispersed projects (albeit with lower capacity factors) sited throughout the footprint. Hence, there is a trade-off between transmission costs and the higher cost of renewable energy from lower quality resources.

One of the very interesting outcomes from the analyses conducted thus far is the relationship between total load and renewable generation. As the General Electric folks conducting the modeling noted, "The bad actor is the wind." There are times in the spring when the wind is high and there may be more total wind and solar on the system than load. This presents great operational difficulties for system operators. Alternatively, there are times in the early morning when load is ramping up sharply just when the wind is ramping down.

These types of issues highlight the importance of forecasting to system operators. From a market perspective, it was found that with a perfect forecast, increasing renewable penetration drives spot prices lower (since there is no fuel cost). But, with an imperfect forecast, the forecast error drives spot prices back up because operators would commit insufficient capacity and have to turn expensive peaking units back on. Furthermore, it was found that at renewable penetrations exceeding 20 percent, coal units would begin to be impacted. However, the greatest impact was found to be on combined cycle gas plants being backed down. Overall, the value of wind energy rose with a perfect forecast and dropped with an imperfect forecast. Not much of a surprise there, I suppose.

The study also found that generator total revenues fell with increasing renewable penetration (as noted above, spot prices decreased). But, the total revenues for nonrenewables fell at a steeper rate for two reasons -- they generated less energy and spot prices fell. There were two other particularly interesting outcomes presented. The first concerned the cost of unserved energy and the important role that demand response could play in mitigating this problem. The second was that the role that hydro, and especially pumped storage hydro (as well as other large scale storage), could play is less than commonly believed.

Researchers found that higher wind penetration also resulted in greater amounts of unserved energy, due largely to over-forecasting of the wind. But, discounting the wind forecast has the effect of driving spot prices down because you're carrying more gas, resulting in less unserved energy. Thus, there was a very high cost to reducing the unserved energy by discounting the wind forecast. It was found to be far more cost effective to get the load to be responsive rather have the system make up the shortfall to the extent that a couple of thousand MW of interruptible load was found to be cost effective.

Lastly, we discussed the operational impacts of increasing renewable penetration on hydro operation. Hydro needed to be scheduled in response to the wind forecast while increasing wind penetration also increased the variation in hydro scheduling. There was found to be a large operating cost increase if you did not shift hydro commitments in response to the wind forecast -- obviously hydro has the flexibility to move while wind does not.

With regard to pumped hydro, it was found that if you have it, the system will use it, but there was no incentive to add more. This seemed counter to the conventional wisdom so much of the ensuing discussion focused on this topic. The researchers reported that increasing pumped storage increased overall costs. As you increased renewable penetration, the storage ran more. As you forced the storage to run more, it drove costs up. It was found that, even with 30 percent wind penetration, the WestConnect footprint has sufficient pumped storage and no more is needed. Exploring this further, the group concluded that the pumped hydro may be more useful in a smaller footprint. In a larger area, it was preferable to use the system as storage. As part of this discussion, one participant from Ireland noted that studies on their system demonstrated a similar result and that pumped storage was not needed until renewable penetration reached as high as 50 percent. There, it was found that the capacity cost of pumped hydro displaced other capacity costs. But, it only provides capacity if you fill it. Thus, you need to reach the higher wind penetration levels before the pumped storage pays out.

So ended a valuable update to this important research initiative. The day concluded with some discussion of next steps and areas of focus as the project moves forward. One shortcoming, as noted earlier, is the dearth of solar data. To model increasing photovoltaic penetration, the project needs more one-minute PV data. Presently, the only one-minute PV data available to the project is from the 4 MW Springerville project in Arizona. Though there are two larger PV projects currently in operation -- notably Nellis AFB and Alamosa, CO -- this data is apparently not being made available to this study. Why?

Tuesday, July 28, 2009

Can Machines Outsmart Man? Human Intelligence vs. Artificial Intelligence

In an article in the New York Times on July 26 entitled Scientists Worry Machines May Outsmart Man, reporter John Markoff notes that a "group of computer scientists is debating whether there should be limits on research that might lead to loss of human control over computer-based systems..." He goes on to note that "Their concern is that further advances could create profound social disruptions and even have dangerous consequences." While I acknowledge that advanced technology creates many new opportunities for its malevolent use, I believe that the concern about machines taking over is overstated.

Ever since the dawn of the field of artificial intelligence, there has been speculation about machine intelligence surpassing human intelligence and somehow reversing the master-servant relationship. It is not that I have some overwhelming faith in humanity's ability to prevail (though for the most part I do). I believe that the problem is not one of technological capability but rather one of the inappropriate human exploitation of that capability. This makes it not a technological problem but a societal one.

The computer scientists mentioned in the article expressed the concern that "technological progress would transform the work force by destroying a widening range of jobs, as well as force humans to learn to live with machines that increasingly copy human behaviors." While I'm not certain about the copying of human behaviors, which if true could turn out to be AI's Achilles' heel, I fail to see how such human adaptation is any different from that which has occurred for hundreds if not thousands of years. Moreover, this concern sounds very similar to that once expressed about another emerging technology:
"_________________, if they succeed, will give an unnatural impetus to society, destroy all the relations that exist between man and man, overthrow all mercantile regulations, and create, at the peril of life, all sorts of confusion and distress."
What was this writer speaking about? Television? Radio? Internet? No. This quote was from an English magazine editor in 1835 discussing the coming of the railroad. Perhaps we haven't learned as much as we think we have. And, as great as our advances in computational ability have become, one should not confuse this with intelligence.

A simple definition of intelligence is the ability to acquire and utilize knowledge, especially toward some useful goal. In his Multiple Intelligences Theory, psychologist Howard Gardner identified seven different types of intelligence: Linguistic, Logical-Mathematical, Bodily-Kinesthetic, Spatial, Musical, Interpersonal, and Intrapersonal. AI researchers, on the other hand, have developed a completely different classification of intelligence types -- one based more on machine abilities. And while science has made great advances in these areas of machine hosted AI, the ability to mimic human behavior and intelligence is still limited.

Another recent NY Times article, In Battle, Hunches Prove to Be Valuable describes how the most high tech gear "remains a mere supplement to the most sensitive detection system of all -- the human brain." It describes how a soldier's experiential knowledge, depth perception, and focus creates an almost uncanny ability to perceive and respond to dangerous situations. In spite of the many advances in machine knowledge, AI still does not have the ability to mimic this sensory perception and decision making capability, partly because we cannot fully explain it either.

With that said, at the end of the day, the danger seems not so much that machines may outsmart man. Rather, the danger is that man may deploy technology inappropriately, thereby outsmarting himself.

Thursday, July 23, 2009

The Green Roadway Project IP Auction

No sooner does the federal government entertain serious climate change legislation in the form of the Waxman-Markey bill than some opportunistic entrepreneurs develop a way to capitalize on it. In this case, I am referring to The Green Roadway Project, a scheme by inventors Gene Fein and Ed Merritt to promote a portfolio of patents that purportedly will give the acquirer the rights to install and grid-connect wind, solar, and other technologies along thousands of miles of public right of way.

Perhaps you've already heard of this venture. It's been featured in a number of newspapers across the country including the New York Times. I first heard about it when I was contacted by representatives of the project who suggested that the state should submit a bid (reserve price of $500K for Colorado, $1.5 million for California). So, tomorrow, July 24, 2009, is auction day -- the day on which these entrepreneurs will attempt to auction off a license to their IP on a state by state basis for six figures plus... each.

I have to wonder if these folks seriously believe that state governments will bid on this IP. That simply isn't the way that states would promote such development. Moreover, the schemes that they are promoting (e.g. micro wind turbines turning in the breeze generated by passing automobiles, etc.) are years from being practical, if ever, save possibly for projects such as the Oregon solar highway which is really just conventional PV in an open area near a highway intersection (and which apparently does not infringe on these entrepreneurs' IP). Also, not mentioned is the small issue that not included in these auctions is the right to public rights of way, generally controlled by various state highway departments.

So, while some of these technologies are interesting, no one has yet shown that they will work either at scale or in the harsh, real-world environment (think winter snow storms, snow plows, etc.). We'll see what the auction brings tomorrow but I would guess that they would have greater success offering a nonexclusive license to all takers, that is if they really have IP that will be difficult to work around. But it could be that they simply hope to strike while the iron is hot and capitalize on the Zeitgeist.

Friday, July 17, 2009

Largest Green-Power Program Stumbles

So, from recent articles in the NY Times and the Austin American Statesman we now learn that Austin Energy's vaunted green power program is only 1 percent subscribed and that all ratepayers may have to shoulder the cost of the renewables added to the system for the program (See articles in the Austin American or in the NY Times).

They wonder why the program is so under-subscribed. Someone must be kidding. Has anyone looked at what they're offering? From the Austin Energy website:
“An average residential customer consuming about 1,000 kWh per month will pay about $43.50 per month more if opting for a 5-year subscription or $58.50 per month more if opting for a 10-year subscription.”
First, this is a huge surcharge for renewable energy. We're talking a 63% increase if you sign up for the 10-year plan. Second, the pricing is upside down. A higher unit rate for a longer subscription? The NY Times should try selling its newspaper with that type of pricing strategy and tell me how well they do. Moreover, with renewable portfolio standards expanding throughout the country, more ratepayers are beginning to pay the costs of adding renewables to the electric grid. But, at least they share this cost equally... and so far the percentage increase is only in the single digits. Done well, the cost of adding renewables to the electric system does not have to short circuit customers' wallets.

Wednesday, July 15, 2009


Among the topics that get lost in the debate about climate change and the measures that we must take to curb greenhouse gases (GHG) are 1) adaptation strategies and 2) the prospects that innovative technologies may be developed to a) cool the planet or b) scrub GHG from the atmosphere. Those innovative technologies are often collectively referred to as geoengineering, and I believe they will be equally important in helping us avert a planetary crisis. In no way do I mean to imply that we should not develop and deploy energy and transportation technologies that produce fewer GHG emissions, but I prefer to work the other side of the equation at the same time.

With respect to global warming, speakers often paraphrase Eugene Kleiner, cofounder of venture capital firm Kleiner Perkins, who said "There is a time when panic is the appropriate response." I'm sorry, but this is not true. It is never true. Respond with urgency, of course. But panic clouds one's thinking. It diminishes one's ability to accurately assess the nature of the situation and develop rational responses. It was a lack of foresight and reason that created the problem. Responding similarly is unlikely to solve it. Moreover, I take exception to those who imply that global warming is humanity's only, or even most pressing, problem (we have enough to fill up a blog).

Fortunately, there appear to be a number of researchers seeking to develop active geoengineering solutions in addition to the more passive strategy of simply reducing emissions. On July 13, the British newspaper The Guardian reported on the Manchester International Festival's search for Twenty Ideas That Could Save the World. Now, the top 20 were not all geoengineering solutions -- they included the often cited carbon-free renewable electrical generation technologies such as concentrated solar power and geothermal energy. But, they also included new methods to capture and sequester carbon such as biochar, creating algal blooms in the oceans to increase CO2 uptake, and schemes to increase the earth's reflectivity to cool the planet.

And, while it is certainly better to take prudent measures now to avert a calamity in the future, we should also begin a serious investigation of the more active approaches to mitigating climate change and its first cousin, acidification of the oceans, now. Otherwise, those technologies may not be suitably developed if and when we need them. And, given the Law of Unintended Consequences we need to discover what deleterious effects there may be before rolling them out on a grand scale.

So, invest in carbon-free energy technologies and energy efficiency, absolutely. But, let's look seriously at strategies to actively reduce GHG concentrations and mitigate their effects.

Tuesday, July 14, 2009

The Proposed Federal Renewable Energy Standard

One of the provisions in the Waxman-Markey climate change bill calls for a federal renewable energy standard (RES), often referred to as a renewable portfolio standard or RPS. Long favored by the renewable and environmental communities, a federal RPS has come up short several times in Congress in the past. And, former President Bush threatened to veto any legislation containing one.

Now, with the Dems in control of Congress and the White House, the prospects for passage are the best they’ve ever been. Colorado has a reasonably aggressive and generally successful RES that has successfully stimulated wind and solar electricity generation, at least in the investor owned utility (IOU) territories. And, while our experience has been largely positive, I have gone on record in the past, and continue to believe, that a federal RPS is NOT the way to go.

Presently, some 28 states have mandated RES requirements for at least their investor owned utilities. Some extend them to cooperative rural electric associations and municipal utilities and a few states have renewable targets or goals as opposed to mandates. Most of the resistance to renewable standards has come from the southeastern states although even some of the states with the best wind energy resources have no RPS (North and South Dakota have goals, Wyoming not even that).

In spite of the fact that I generally favor a transition toward more renewable energy, there are a number of reasons why I do not favor a federal RPS. First, most of the states with existing RPS already have more stringent targets than are contained in the Waxman-Markey bill. So, all the federal requirement would accomplish is force the recalcitrant states to make some progress toward producing clean electricity. What’s wrong with that you may ask? Nothing, per se. But it should be understood that each state with an existing RPS has tailored it to its own resources and needs. No two look alike. Each has different requirements for sourcing the generation, the vintage of facilities, the lifespan or bankability of renewable energy certificates (RECs), etc. Some even have different definitions of what constitutes a renewable resource (Pennsylvania, for instance, allows waste coal to count toward its RPS... we won't go there).

Now, along would come a federal RPS which would eliminate some of that discretion. It is generally acknowledged that a state may have a more stringent RPS (at least in terms of the target renewable percentages) but that in itself could create an administrative nightmare since we could have RECs that are retired with respect to one requirement and not the other. And, with both a state agency and the FERC to report to for RPS compliance, utility costs of compliance will only increase.

To avoid further confusion, states would (or should) harmonize their definitions of eligible resources and REC characteristics with the federal standard. And, while this could be a positive step (Colorado, for instance, presently has a ridiculous 6-year shelf life for RECs and accepts unbundled RECs for compliance from anywhere), the principal beneficiaries will be the REC marketeers who make a living in trading paper. This is no different from trading in problematic carbon offsets or financial derivatives. If you consider that renewable standards are sold to the public on the basis of clean energy, job creation, and other local benefits, shipping ratepayer money across the country for the purchase of unbundled RECs (that is, RECs without the associated green energy) helps those ratepayers exactly how?

So, what is the solution? Simple. Rather than have a federal RPS with utilities reporting to the FERC, mapped over the top of a cornucopia of different state standards, why not simply mandate that each state create its own state RPS and leave it to the individual states to administer. This is no different than was done years ago with the 55 mph speed limit and a number of other federally mandated, but state administered, programs. The feds could mandate a minimum set of requirements that each state program must meet and, once that state program is approved by the FERC, administration and compliance is left to the state. We get renewables across the country, each state gets to tailor its program to its own needs, the benefits accrue locally, and utilities report to only one task master. And given the weak RPS that is contained in Waxman-Markey, no one could argue that it would result in a weaker standard than we will see with the current proposal.

Sunday, July 12, 2009

Manipulating government

OK, so I hadn't really intended to turn this into a government blog, but Sunday's Denver Post contained a letter to the editor so relevant that I just felt compelled to comment on it. In a letter captioned "Conspiring to manipulate government?", Neil Powers of Colorado Springs laments a "dysfunctional legislative system" that permits various special interest groups to "educate" our legislators to their way of thinking.

In his letter, he goes on to say: "In theory, these legislators work for us, the citizens of Colorado. Unfortunately, this theory has become very polluted by the reality of paid lobbyists, heavy campaign contributions, and people representing organizations that produce agendas, scorecards and 'education' efforts." From where I sit, this problem is even worse than Mr. Powers describes. Over the past couple of years, the Colorado legislature has passed a cornucopia of legislation promoting renewable energy... some good, some bad, and some of little consequence. In every case, the legislators carrying this legislation are informed or "educated" by a variety of special interests each with their own agenda (yes, even the most altruistic-sounding environmental group is in reality a special interest lobby with its own economic agenda). And, unfortunately, even the sum of all the special interests that may participate in this process does not equate to the public interest.

As a paid state employee and subject matter expert in this field, one would think that these legislators would seek out the expertise that exists within its Staff, but sadly such is not the case. In fact, the system is so dysfunctional that, not only is our expertise not sought (presumably because it might conflict with the agenda of the favored lobbyist), but we are actually prohibited from offering it or suggesting improvements. What the legislature often ends up with is a compromise among competing special interests that appeases each of them but is still not in the public interest.

So, Mr. Powers, your observation is dead on. In my case, I know it to be true of some of the renewable energy legislation that was passed in the 2009 legislative session. I'm sure it extends to other fields as well.

Tuesday, July 07, 2009

State employees are expendable but renewable energy tax credits are not?

Diverging slightly from my usual focus on technological developments, it seemed appropriate to comment on one of the mechanisms that our state plans to employ to deal with with current fiscal crisis. Colorado, like several other states, is suffering from a budget crisis due to drastically depressed revenues as a result of the economic recession. This has led Governor Ritter to finally declare that expanded furloughs or even layoffs of state employees may become necessary but that the generous tax credits which contribute to the revenue decline are "off the table." In this case, the particular tax credits that I find most egregious are those reducing property taxes and eliminating sales taxes on the sale of renewable energy generating equipment, notably wind turbines and solar panels.

Now, I am all for incentivizing emerging technologies but neither of these technologies can any longer be considered emerging. Moreover, the major utilities in the state have far surpassed the requirements of the renewable energy standard approved by the citizenry and expanded by the governor and legislature. With that acknowledgement, do we still need to provide generous tax credits to the favored renewable industry in light of the current fiscal crisis, especially at the expense of state employees? Where is the shared sacrifice?

Colorado's renewable energy standard also includes a 2% rate impact limitation which purports to promise ratepayers that meeting the standard will not increase their electricity costs more than 2% over what they would be if there were no reenewables on the system. Unfortunately, this promise has been subverted by convoluted language compounded by rulings which allow utilities to manipulate the calculation to achieve the desired result. Personally, I would be willing to pay more than a 2% increase to migrate more of our electrical system to renewable energy, but a promise made is a promise that should be kept. Utilities, on the other hand, are guaranteed full cost recovery and a rate of return on "prudently incurred" expenses made to comply with the renewable standard. Unfortunately, this has been extended to expenses that allow the utility to go well beyond the standard. If the cost of the aforementioned tax credits were added to the true increased cost of adding renewables to the system, the actual cost of renewable energy would go well beyond the promised 2% increase. Given all of this, I cannot see how tax credits can be off the table while layoffs of those who provide services to citizens can be on the table.

Monday, July 06, 2009

Technology substitution in lighting

Long live the CFL and death to the incandescent light bulb! Or so it seemed. Those of you who know me from my earlier work in technology forecasting (I taught many a workshop in tech forecasting not all that long ago), may recall that one of the areas we often talked about was how to model the substitution of an incumbent technology by a new or emerging technology. You may also recall that there were many examples where the incumbent technology did not go out quietly (although many did). In these cases, the presence of the emerging technology stimulated new research and advancements in the incumbent which, at a minimum, slowed the penetration of the emerging technology. An article in the July 6 edition of the New York Times presents us with an outstanding example.

Not only have the energy efficiency pundits predicted the demise of the relatively inefficient incandescent light bulb, but federal legislation had dictated that it must be so (beginning in 2012). But new research promises to give the old favorite a fighting chance, or at least the opportunity to slow its demise. Reflective coatings around the bulb's filament offer the opportunity to reflect a portion of the heat energy that would otherwise be lost back to the filament where it can be transformed to additional light. Other incremental innovations in incandescents are sure to follow. And, light emitting diodes (LEDs) are staged to begin their push into the commercial and residential markets.

It is an interesting time to be a technology watcher. We've recently seen competing audio and video technologies all vying for market dominance. Now, with new flavors of incandescent lighting, CFLs, and LEDs all vying to capture their share, energy efficiency and consumers will ultimately benefit.

Competing analyses of climate change legislation

Competing analyses of the cost and effectiveness of pending federal climate change legislation could make skeptics of all but the most ardent supporters of cap and trade proposals. The estimates I've seen range from a low of only about $100 per family per year to thousands of dollars per family per year. Not surprisingly, the low ball figures come from proponents while the highest estimates come from opponents to the legislation. While it would be wonderful to believe that proponents and opponents alike are operating in what they consider to be the public interest, it would be gravely naive to conclude that either side is taking a position that is divorced from its own economic self-interest. (Note that while I do believe that climate change is a serious concern, I also do not believe that it is society's only or even most pressing one. There are many other problems that must be dealt with using our limited resources.)

There are also a number of folks who believe that, while rising greenhouse gases leading to anthropogenic global warming and other impacts (such as acidification of the oceans) is a serious concern, cap and trade is not the best solution. You can count me in that camp. I am far from convinced that the big winner in this scheme will be the environment. Rather, we are already seeing signs that we will be doing little more than creating a new market for traders and speculators in carbon credits and their derivatives. Just as the trading of renewable energy certificates (RECs) has done little to stimulate new investment in renewable energy, it is unclear that massive trading in carbon credits, offsets, and the like will really get us where we need to be. We did little to regulate the speculative financial instruments that helped lead to the current economic calamity, and it is unlikely that we will have the discipline to sufficiently regulate the secondary markets that will surely arise from GHG cap and trade. You don't have to take my word for it. Michelle Chan, senior policy analyst with Friends of the Earth recently wrote: "If we aren't careful, we could end up creating a massive, poorly regulated derivatives market that not only poses risks to the broader financial markets, but also undermines efforts to save the climate."

Moreover, there is some evidence that the carbon price necessary to induce a significant change in emissions will be far greater than we are likely to see in a trading market for GHG. And, now comes an article by Nathanial Gronewold in EE News that among the biggest winners from pending US climate legislation will be the Big Four accounting firms!

Just what are we trying to accomplish here? Perhaps the simplest and most effective approach would be to return to the age old paradigm of regulation: incentivize desirable behavior and tax undesirable behavior. Better still, if GHG are to be regarded as a criteria pollutant, quit messing around and just regulate it.