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Wind and gas

Wind turbines generate electricity very irregularly, because the wind itself is inconsistent. Therefore wind turbines always need backup power from fossil fuels to keep the electricity grid in balance. Gas turbines are the best way to do this. They are able to respond quickly and push power production when wind generators stop suddenly. They can be turned on and off almost instantly, whereas traditional coal-fired plants need to be maintained in a very inefficient standby mode if they are to respond to large fluctuations in power demand.

A proliferation of windmills, then, can become a windfall for gas sellers, as the cases of Spain and Germany, Europe’s leading producers of wind power, show.

By the end of 2007 Spain had 14,700 megawatts (MW) of installed wind capacity, according to Enagás, which manages the national gas network, producing 8.7% of the country’s total power supplies. Most of these wind generators are located in scarcely populated areas, while the power consumption is concentrated in big cities with their many air-conditioned buildings. The peak load of the Spanish power grid is thus in the hot summer months—but this is precisely the time of year when there usually isn’t much wind.

For this reason, more and more gas turbines are being installed near consumers in the suburbs of Spain’s cities. Only last year, Spanish power providers added 6,400 MW of gas-turbine power capacity, taking the total installed capacity of gas turbines to 21,000 MW. Natural gas has become the main source of electricity generation in Spain, and according to Enagás, 99.8% of the gas used in Spain is imported. Most of this comes via pipeline from Algeria, but the import of liquid natural gas (LNG) by ships will increase.

Germany has more than 20,000 wind turbines with a total capacity of 21,400 MW. Wind power’s share of total electricity generation has risen in line with that of natural gas since 1990. Germany’s gas consumption for power generation more than doubled between 1990 and 2007, and now represents 11.7% of the country’s total power generation. The country imported 83% of its natural gas supplies.

Source: WSJ, 11/09/08

Norway's tax on emissions

In 1991, Norway became one of the first countries in the world to impose a stiff tax on harmful greenhouse gas emissions. Since then, the country's emissions have risen by 15%.

By making it more expensive to pollute, carbon taxes should spur companies and individuals to clean up. Norway's sobering experience shows how difficult it is to cut emissions in the real world

Norway gave exemptions to some local industries, such as fishing, because it feared the tax would damage economic growth and hurt employment. On the other hand, it levied on the oil and gas industry a $65 tax per ton of carbon emitted. In contrast, the cost of a permit to emit the equivalent of one ton of carbon in Europe's current cap-and-trade system is $35.

After the tax was passed, domestic oil and gas giant StatoilHydro was forced to rethink nearly every aspect of its drilling cycle.

Around the time the tax was being debated, Statoil was developing a new gas field in the North Sea. At the Sleipner field, the natural gas Statoil extracts from under the sea bed contains 9% carbon dioxide. That's too high for Statoil's customers, whose power plants are designed to burn gas with only 2% carbon dioxide. Before Statoil can sell the gas, it has to separate and discard some of the carbon dioxide. Usually the excess carbon dioxide is spewed directly into the air.

Statoil spent two years and some $200 million on the project, which was launched in 1996. Since then, some 10 million tons of carbon dioxide have been buried, saving Statoil about $60 million on its carbon tax bill every year.

Other industries that were successful in negotiating exceptions for themselves have made little progress. Paper manufacturers were given a low tax rate of between $16 and $18.40 per ton -- less than a third what the oil sector pays. For the country's biggest paper company, Norske Skog, the carbon tax amounted to only about $200,000 a year, it didn't have a major influence on its investments or project decisions

The carbon tax's most glaring failure was in the transportation sector. The tax has also done little to quench Norwegians' thirst for automobiles. The number of registered cars has risen 27% in the past decade. Norwegians are used to paying high prices at the pump: a gallon of gasoline costs around $9 to $10, and about 6% of the price comes from the carbon tax. Yet since two-thirds of Norwegians live in the countryside, they pay up and keep driving.

Europe struggled with a similar dilemma as it set up its "cap-and-trade" system to reduce greenhouse gas emissions by utilities and heavy industry. Regulators cushioned industry in the early years of the system, giving them little incentive to improve. As a result, emissions have crept up 1% a year since 2005.

A few countries have cut emissions without injuring their economies. Sweden and Denmark, both of which introduced a carbon tax, have reduced their greenhouse gas emissions by 14% and 8% respectively since 1990 while maintaining growth. Their emission reductions can't be attributed to the tax alone, economists say. Additional moves to encourage energy efficiency and renewable energy, which are government-subsidized, played a part.

Norway's strong economic growth -- gross domestic product has swelled 70% since 1990 -- has far outstripped its 15% rise in greenhouse-gas emissions, according to the Norwegian government. Since the tax hasn't reduced emissions enough, the country voluntarily joined the bloc's cap-and-trade system earlier this year.

Source: WSJ, 30/09/08

Sanyo's air wash

On the sidelines of the Group of Eight summit, Sanyo Electric Co. displayed a washing machine, dubbed Aqua, that uses high-powered air, or ozone, to wash closes without a single drop of water. The process of ozonation, which disinfects bacteria on contact, can air-wash clothes removing about 80% of biodegradable stains without using any water, according to Sanyo.

The company says a full-cycle of air-wash uses about twice as much electricity as a regular wash but only one-fifth the energy of a comparable full cycle wash and dry in part because the air wash doesn’t need a drying system. The Aqua washer can also purify and recycle water that has been used for a bath use for a regular wash, reducing the amount of fresh water required to a half-bucket.

Source: WSJ, 08/07/08

Cellulosic biofuels

Currently there are two primary feedstocks for the production of renewable biofuels: sugar from sugar cane (primarily used in Brazil) and starch from corn (the source of most US-based ethanol).

Corn ethanol’s lack of scalability means that it will not be able to satisfy our fuel needs in the medium term. However, it is useful as a stepping stone by mitigating many of the early technological and capital risks associated with cellulosic ethanol and helping develop the infrastructure necessary for cellulosic ethanol.

Switchgrass, sorghums and miscanthus-like grasses as well as certain trees, such as poplar and willow are the most likely feedstocks to satisfy liquid fuel requirements in the long run. Other promising feedstocks are
• waste: municipal sewage and even municipal solid waste,
• excess forest product that is currently unused.

The most critical factor regarding cellulosic biofuels is land efficiency (tons of biomass per acre and hence gallons of fuels produced per acre – or more accurately, miles driven per acre). V. Khosla believes biomass yields per acre will improve 2-4 times from today’s norms by 2030.

This increase in yield will come from genetic optimization, as well as improvement of harvesting, storage and transport processes. Increasing yields while decreasing inputs will also come from a combination of:
1. Crop rotation, such as:
• 10 year energy and row crop rotation, which would improve the carbon content of the soil and decrease the need for inputs;
• Cover crops such as grasses, legumes or small grains between regular crop production periods
2. Polyculture plantation, since many processes can accept a mixture of biomass types
3. Perennials as energy crops, which require less nutrients because of their extensive roots and improve soil carbon since they do not need to be replanted each year
4. Better agronomic practices, such as no-till or minimum till farming

Regarding the food vs. fuel debate, it is worth noting that unless we dramatically reduce carbon emissions and stop global warming, millions of acres of land will be dislocated from their current uses and must be figured into the “net land use” equation.

Equally important, ethanol is compatible and complementary to other petroleum use reduction technologies like hybrids and plug-in electric hybrid cars. The high cost of hybrids and plug-in hybrids will limit their penetration in the coming two decades. In contrast, flex-fuel vehicles (FFV’s) capable of running on either gasoline or ethanol for a marginal cost of only $35 per car could see their penetration greatly increase. Moreover, as biofuel penetration grows, engines should be optimized for biofuels. Engines designed for ethanol first will operate at much higher compression ratios and thus get far more mileage per gallon of ethanol.

Source: V. Khosla

Biodiesel vs. ethanol

The primary feedstocks for classic biodiesel are vegetable oils such as rape seed, soybean and palm oil, as well as jatropha. Unfortunately, none of these sources have high enough yields per acre. Plus, food grains are well-optimized crops and should therefore, unlike cellulosic biomass, not see their oil yields increase significantly over time.

The two biodiesel feedstocks that might have more potential are jatropha and algae. Jatropha has the benefit of growing on non-food crop lands, limiting the food vs. fuel conflicts. Algae, which has not been optimised, could offer high yields. Enclosed bioreactors and synthetic biology could be used to improve yields but:
• raising capital and operating costs could undermine profitability,
• using genetically engineered organisms in oceans is controversial.

Other disadvantages of biodiesel are the following:
• Biodiesel from different feedstocks has different properties.
• Biodiesel cannot be customized to meet needs, where as it is possible to dictate the structure of hydrocarbons and thus control the properties of the fuel.

In contrast, ethanol is compatible and complementary to other petroleum use reduction technologies like hybrids and plug-in electric hybrid cars.

The high cost of hybrids and plug-in hybrids will limit their penetration in the coming two decades. In contrast, flex-fuel vehicles (FFV’s) capable of running on either gasoline or ethanol for a marginal cost of only $35 per car could see their penetration greatly increase.

Moreover, as biofuel penetration grows, engines should be optimized for biofuels. Engines designed for ethanol first will operate at much higher compression ratios and thus get far more mileage per gallon of ethanol.


Source: V. Khosla

Butanol vs. ethanol

The science to produce butanol from plants has been around for decades. Although today butanol is mostly produced from fossil fuels to be used as a solvent, it was first made in the early part of the last century by fermenting feedstock such as molasses.

But the traditional fermentation process is too inefficient to make biobutanol in the large amount that would be needed for it to be used as a biofuel. That’s because, aside from butanol, the fermentation also yields tow other products: acetone and ethanol. In comparison, the yeast that is used to transform feedstock into ethanol doesn’t create any byproducts. That means it takes more feedstock to producte butanol than ethanol. Additionally, butanol in high concentration is toxic for the bacteria that makes it, so at a certain point, they shut down production. The yeast that produces ethanol is more resistant.

Because of these limitations, making butanol with existing techniques is about 50% more expensive than the $1.75 to $2 it costs to make a gallon of ethanol. The key to changing those economics is bioengineering a more tolerant bug thant transforms feedstock more purely into butanol. DuPont has been working on such a butanol bug since 2004 and is said to be making headway.

Meanwhile BP has been conducting trials showing that gasoline blended with butanol behaves more like regular gasoline than ethanol. That is because ethanol, unlike gasoline and other oil-based fuels, mixes easily with water. So if ethanol finds any water residues in transit, it can separate from the gasoline it is blended with. This is a big advantage for butanol over ethanol, because it means that ethanol needs to be hauled by truck or train, which creates more logistical headaches than a fuel that can be piped.

BP also says it has been able to add up to 16% of butanol to gasoline without the need to modify car engines. Researchers generally believe higher concentrations than that may be possible. In contrast, according to the Alliance of Automobile Manufacturers, a trade group in the U.S., ethanol concentration in gasoline higher than 10% can corrode engine parts, except in flex-fuel vehicles, which are designed to tolerate higher ethanol content. About 2% of the cars on the road in the U.S. are flex-fuel vehicles, according to the trade group.

One major challenge is figuring out how to make butanol out of non-food feedstocks. Butanol can be made form any form of sugar and sugar comes in many forms. For example, Green Biologics, a British company, is testing feedstocks such as paper pulp derivatives and food waste.

Source: WSJ, 30/07/08

Pros and cons of REs

To replace conventional energy sources, a renewable energy would have to have to provide:
• Dispatchable power: power needs to be available when the primary customers (the utilities, and their consumers and industrial customers) need it. An energy source should therefore have a high capacity factor. Utility base load plants are designed to achieve power generation over 65% of the hours in a typical year.
• Cost effective power: To be as cost effective as a fossil source, a renewable source must produce power at about $0.10 per KWh. Peak load power can afford somewhat higher costs of around $0.12 - $0.15 per KWh.
• Reliable power: Any source vying to replace coal-based electric power should be as reliable as that technology.

Solar PV is not likely to scale up massively in the near future because of its high cost and variability. Wind power is also unlikely to scale beyond about 10% of our grid electricity needs partly because of its high variability.

Geothermal can provide another 10% and because of built in heat storage it can meet many utility requirements if it can be produced cost effectively. Enhanced geothermal energy is the solution to scalable geothermal power. Enhanced geothermal is simply an extrapolation of naturally occurring hydrothermal systems, using artificial geothermal wells. It operates as follows:
1. Drill a production-injection well into hot rock (the rock in question should have limited permeability).
2. Inject water into the well at a pressure high enough to cause fracturing, until fractures extend a significant distance from the initial well.
3. Drill multiple injection wells around the initial production well, with the intent of overlapping the fracture system
4. Circulate water to capture the heat from the rock, which can then be used to generate power.

Solar thermal concentrates the sun's rays to heat a fluid to generate steam that can then run a regular steam turbine. Its great advantage is that the heat can be stored cheaply either as steam, hot water, molten salt or hot oil and used when the sun's heat is not available. Storing this energy using batteries would be prohibitively expensive and battery technology costs are not declining very rapidly.

Advantages of solar thermal energy compared with other sources of renewable energy
• Low price-variability and supply-availability. CSP bears no transportation, supply or commodity price risk.
• Low land requirements and high siting potential. The total space required to power Europe would be equivalent to about 3% of the land of Morocco. The sun intensity constraint could be reduced by building a high voltage DC power grid for long distance electricity transmission.
• Decreasing cost. Capital and operating costs are both likely to be lower than nuclear. Solar thermal is about 75% cheaper than solar PV.
• Ability to reach capacity factors of 65% and hence supply base power needs.

Source: V. Khosla

Downside of coal

One of the common criticisms regarding renewables vs. coal is that the latter is cheap – a misguided perception, based, among other things, on not pricing in externalities like pollution.

A typical 500 MW coal plant generates 3.7 billion tons of carbon dioxide, as much as cutting
down 100 million trees. In 2004, coal accounted for around half of the electricity produced in the U.S. but produced roughly 83% of the resulting carbon dioxide emissions from electric power generation. Coal-fired power plants emit twice as much CO2 per KWH as any other form of power generation. According to the Union of Concerned Scientists, one 500 MW coal plant produces as much emissions as 600,000 cars.

Additional pollutants emitted by coal power plants include sulphur dioxide, nitrogen dioxide, as well as carbon monoxide, arsenic, lead mercury and cadmium. A coal plant can even generate uranium and thorium.

Should the cost of CO2 emissions be included using a conservative $20 per ton of CO2 emission, the price of coal would increase by 2-4X. Two technologies could help reduce the carbon footprint of coal – Integrated Gasification Combined Cycle (IGCC) and Carbon Capture and Storage (CCS).

IGCC technology involves two major processes:
• The gasification of coal, a process in which coal is reacted with steam and oxygen to form syngas, a combination of carbon monoxide and hydrogen. The syngas is then cleaned to remove pollutants.
• A combined cycle process to generate electricity. The produced syngas is then used as the main fuel for a gas turbine (which produces electricity), while the waste heat generated by the gas turbine is used to power an second, steam turbine (additional electricity production), thus increasing the energy efficiency of the plant as a whole.

In theory, IGCC produces less solid waste, lower emission levels (as a result of better efficiencies) as compared to pulverized coal. Aside from consistency and reliability issues, the key question is whether the capital costs of IGCC will be able to fall as projected with learning and increased economies of scale in manufacturing, engineering and so forth.

CCS brings its own host of problems and cost issues. In 2005, carbon dioxide emissions were at least 27.9 billion metric tons. Sequestering just 10% of the world’s fossil-fuel combustion CO2 would require an industry whose throughput would have to be 1.3 times that of the oil industry. Moreover, both the sheer scale and cost of the project remain unknown, as are the safety and operating reliability conditions.

Another approach could be to convert coal to an environmentally friendlier fuel, such as natural gas. Advantages of such a process include the ability to use the transportation infrastructure in place.

Source: V. Khosla

Nuclear power pros and cons

Pros and cons of nuclear energy

Nuclear power plants emit neither carbon dioxide, nor sulphur or mercury. Currently, the 104 nuclear power plants in the U.S. generate about a fifth of the nation’s energy. Wind accounts for about 1% and solar even less. Nuclear can meet power demand 24 hours a day, in contrast with solar and wind.

Nuclear power can help, even if it won’t solve the whole problem. In the short to medium term, it is probably too late for nuclear power to make a material difference in carbon emission, given nuclear power's slow political, legal and technological development cycle.

Critics argue that nuclear energy has significant capital and decommissioning costs. Those capital costs have risen significantly lately, and there is a debate as to whether nuclear energy is still economic.

The high cost of nuclear power may be ascribed to two factors: a lack of experience in building plants as well as shortage of parts and skills, both due to the fact that no new plant has been started in the U.S. since 1977. But if new plants are started, construction timing will become more predictable, bringing financing costs down as lenders become more comfortable. At the same time, the number of companies supplying parts and providing engineering will increase to meet the demand, lowering the price.

Most important, nuclear power appears economically uncompetitive primarily because the price of fossil fuels doesn’t reflect the high cost that carbon emissions pose for the environment. Should the price of environmental degradation be taken into account either through a direct tax based on the carbon content of a fuel or a so-called cap-and-trade system, fossil-fuel would look much less competitive compared with low-carbon sources, such as nuclear, wind and hydropower. It is estimated that a carbon price of between $25 and $50 a ton makes nuclear power economically competitive with coal.

By far the greatest risk it the possibility that an expansion of nuclear power will contribute to the proliferation of nuclear weapons. Plants that enrich uranium for power plants can also be used to enrich it for bombs. The dangers of nuclear proliferation would be heightened if a nuclear revival turned to reprocessing of spent fuel to reduce the amount of high-level waste that builds up and to maintain adequate fuel supplies. Reprocessing is a problem because it can produce separated plutonium – which is easier to steal or divert for weapons production, than plutonium contained in highly radioactive fuel.

Source: WSJ, 30/06/08

CSP technologies

Algeria’s government is building an experimental solar-thermal power station at Hassi R’mel, about 400 km south of Algiers, which if all goes well will open next year. In April, work started on a similar project at Aïn Béni Mathar, in Morroco.

There are four competing solar thermal power designs:
• Parabolic-trough mirrors,
• Parabolic-dish mirrors
• “power towers” which use an array of mirrors to focus to sun’s rays on to an elevated platform,
• Fresnel systems, which mimic a parabolic trough using (cheaper) flat mirrors.

All four of these designs are now either operating commercially or undergoing pre-commercial trials. Although the total capacity at the moment, according to Cambridge Energy Research Associates, is a mere 400 megawatts, this will grow tenfold over the next four years if all projects now scheduled come to fruition.

Source: The Economist, 19/06/08

Carbon capture technology

Fossil fuels make up two-thirds of the global energy mix and would still make up almost half by midcentury - even under scenarios where annual emissions are kept at the same level as today. That is why many experts say developing carbon capture technologies is critical in the fight against climate change.

Statoil of Norway is already pumping under the seabed significant quantities of unwanted carbon dioxide from a natural gas field. Sonatrach, the Algerian natural gas and oil company, has a similar project to store unwanted carbon dioxide at its In Salah field. In Canada, EnCana, an energy company, injects unwanted carbon dioxide piped from a coal gasification plant in the United States into its Weyburn, Saskatchewan, field to make it easier to recover hard-to- reach oil.

These and other experiments show that carbon dioxide can be trapped underground with little or no leakage. But commercial-scale facilities to capture and bury the carbon emitted by utilities and installations like refineries still do not exist. Two high-profile projects - one in Scotland led by the British oil company BP, and another in Illinois led by a consortium called FutureGen that includes the coal giant Xstrata - were dealt setbacks over the past year because of ballooning costs and shortfalls in public funding.

Source: IHT, 23/07/08

Nuclear power in Germany

Conservatives in Chancellor Angela Merkel’s coalition want to freeze its current phase out of nuclear power plants, which was decided in 2000 by a government of Greens and Social Democrats. But Ms. Merkel’s coalition partners, the left-leaning Social Democrats, are insisting she upholds a pact to shut down the country’s last nuclear power plants by 2021.

Germany gets around 22% of its electricity supply from nuclear energy, compared with around half from coal, and the rest mostly from natural gas and renewable sources such as wind.

The country is investing heavily in wind and solar power and is drawing up laws that require higher energy efficiency in buildings and transport. But many experts doubt wind and solar power can both compensate for lost nuclear energy and meet Germany’s ambitious carbon-cutting goals at the same time.

Replacing nuclear power would probably entail more use of coal and gas. Natural gas is getting costlier along with oil, and greater use will make Germany even more reliant on supplies from Russia. Coal-fired power stations emit the most greenhouse gas – especially the ones using lignite or brown coal, which Germany has in abundance, unlike oil, natural gas or sunshine.

Social Democrats say they might agree to prolong the life of the most modern nuclear reactors by a few years, if conservatives agree to a constitutional amendment banning the construction of any new reactors.

Source: WSJ, 10/07/08

Cost of electric cars

Recent cost comparisons by Deutsche Bank’s auto analysts suggest electric cars will be cheaper to operate than conventional vehicles. Fuel costs per mile for gasoline-fuelled cars are $0.27 in Germany, $0.24 in Britain, $0.17 in Brazil and $0.11 in the United States, with differences driven by fuel taxes.

For electric vehicles, the cost per mile is a mere $0.02. If one adds in the cost of a battery amortised over the life of the car, the cost is still only $0.10. Batteries will be expensive, at least in the early years, but electric cars won’t need costly engines or complex transmissions like today’s autos. With fewer moving parts, reliability will increase.

Obviously, it would take a while to replace the existing transportation fleet made up of cars that last 15 years.

Source: WSJ, 08/07/08

G8 summit conclusions

On July 9, 2008, leaders of the Group of Eight nations plus others including the biggest developing economies agreed to “combat climate change in accordance with common but differentiated responsibilities”.

But the statement – on the final day of the annual G-8 summit – contained no jointly agreed-to numerical targets for reducing emissions that contribute to global warming. Poorer nations said they wouldn’t sign up to greenhouse gas reduction targets until richer ones did more, while the richer countries as a group will commit to more only when the developing world signs up for targets.

Unlike the U.S., the E.U. and Japan have both offered significant reductions in greenhouse gases. The E.U. has said it will reduce emissions by 20% from 1990 levels by 2020. Japan has a goal of a 14% reduction from 2005 levels by 2020 and a long-term goal of a 60-80% reduction by 2050.

Source: WSJ, 10/07/08

CDM and coal-fired plants

In September 2007, the U.N.’s Clean Development Mechanism board opened the door to subsidizing new coal-burning plants. U.N. official strongly defend their approach, arguing that since the world is widely expected to get most of its energy from fossil fuel for decades, it is entirely appropriate for the program to subsidize plants that burn fuel more cleanly.

Among the plants seeking subsidies under the U.N. program is a $4 billion plant currently under construction in the Western Indian state of Gujarat. When it is finished in 2012, it will be one of the biggest coal-fired plants in the world.

Tata says the plant will emit an average 26.7 million tons of carbon dioxide annually during its first decade of operations. That’s 2.8 million fewer tons that the plant would discharge if it used the less-efficient coal-fired technology prevalent in India today. So Tata is asking the U.N. to let it sell 2.8 million carbon credits annually. Given that such credits are selling for about $13 apiece, U.N. approval would translate into about $36 million at current market price.

Tata Power’s application to sell carbon credits is being reviewed on behalf of the Board by a Norwegian auditing firm, Det Norske Veritas. The firm has its doubts about Tata’s bid, arguing that the project has already received funding and is part of an electrification push by the Indian government.

In the past year or so, the CDM board has also approved the sale of carbon credits by 13 big plants in India and China that burn natural gas. Based on projects that have applied to sell carbon credits through 2012, when the Kyoto treaty’s emission caps expire, fossil-fuelled power plants account for only about 7% of the carbon credits market.

The architects of the CDM program hoped it would spark a renewable-energy revolution, prompting a shift away from fossil fuels towards renewable energy. In fact, renewable energy accounts for only about a third of the carbon credits proposed to be issued by 2012, according to U.N. figures.

Concern about the program is spreading in the U.S. Doubts about the validity of some pollution-cutting project in the developing world were one factor in the Senate’s rejection last month of a bill that would have capped U.S. greenhouse-gas emissions.

Source: WSJ, 15/07/08

A second EPR

On Thursday 3 July, 2008, President Nicolas Sarkozy announced that France will build a second of its new-generation nuclear reactors. A decision about where to build the second French EPR will be made in 2009, with construction expected to begin in 2011.

France has been construction its first European Pressurized Reactor, or EPR, on the Normandy coast, with the unit expected to go into service in 2012. The Normandy site is one of only two EPRs in the world currently under construction: the other is in Finland.

Source: WSJ, 04/07/08

Carbon savings rating service

Lord Nicholas Stern put his imprimatur on a carbon-ratings service that analyzes whether emissions-reducing efforts are likely to achieve their targets.

The service was launched on June 25, 2008, by IDEAcarbon, a consultancy on carbon finance and part of IDEAglobalGroup, a Singapore-based research company, where Lord Stern is vice chairman.

The service is an attempt to draw mainstream investment to the carbon market by increasing transparency. Concerns have been raised that a significant proportion of the greenhouse gas saving projects will not deliver the savings that they have claimed.

IDEAcarbon rates projects from AAA to D depending on the likelihood that they will deliver the promised emissions reductions within the stated time period. The ratings take into account five risks: the project’s size and complexity, the participants’ experience, the local and market context, implementation factors and the regulatory framework.

Source: WSJ, 26/06/08

Impact of rising gasoline prices

Five years after the price of gasoline started climbing, Americans are finally beginning to spend less time at the wheel and drive smaller cars.

Federal Highway Administration figures show that that in March U.S. drivers logged 18 billion fewer kilometres than a year earlier. That is a 4.3% drop and the biggest-ever year-over-year reduction in kilometres driven.

As a percentage of total U.S. auto sales, sales of light trucks – a category that includes SUVs – peaked at 55% in 2005. So far this year, light trucks have accounted for 47% of auto sales.

The persistence of high energy prices plays a role. It take time for consumers to make changes that substantially lower energy use such as buying a more efficient refrigerator, a smaller house or car.

Source: WSJ, 18/06/08

Hungary's unconventional gas reserves

Located in Southeastern Hungary near the Romanian border, the Mako Trough’s reserves are widely thought to be massive.

But the gas is trapped in a rock that isn’t porous and permeable to let molecules flow through it easily. Until now, such unconventional oil-and-gas reserves were viewed as too difficult and expensive to exploit. But soaring energy prices and advances in technology such as “fraking” have made gas locked in coal, sandstone or shale economically and technically viable to extract.

Though Mako is tougher than other gas plays, it has one big advantage. Most of the large gas finds left in the world are far from global markets. By contrast, Mako is in the middle of the existing European gas-pipeline grid. That would make it easy to export the gas to Hungary’s neighbors.

Source: WSJ, 26/06/08

Chinese energy prices

The Chinese government announced on June 19, 2008 that it will boost retail prices for gasoline, diesel and electricity.

China is the world’s second-largest oil consumer, after the U.S. With the sharp run-up in oil in recent month, Beijing’s longstanding policy of fixing retail prices for gasoline, diesel and electricity has been widely criticised.

The logic behind the criticism of that policy is straightforward: By keeping down the prices that its companies and consumers pay for fuel, China is impending the normal market mechanisms that would cause demand to soften as global prices soar.

Another effect of China’s price controls has been to make it unprofitable for Chinese refiners to make gasoline and diesel, since they have to buy crude oil at global prices but sell their products at controlled local prices. Those producers have been pulling back from the market, creating widespread fuel shortages.

Similarly, power plants’ losses have been mounting as they burn coal bought at market prices to sell electricity at a low state-set price, and power shortages have been spreading.

But because of that unsatisfied demand, the increase in price should actually cause a surge in oil use that could exacerbate price gains in the near term.

The Chinese government also indicated that will not dismantle the system of government-set prices but will seek to change it. With the country facing the highest inflation in more than a decade – more than 8% since this year – officials seem unwilling to expose Chinese consumers to the full brunt of global oil price swings.

Source: WSJ, 20-22/06/08

U.S. offshore wind power

There are already more than 20 offshore wind farms in Europe, as opposed to none in the U.S. Opponents, including beachfront homeowners, claim that such installations would threaten avian and aquatic life and ruin scenic vistas.

Onshore, U.S. wind-power capacity is growing fast, thanks to federal tax credits and state laws encouraging the production of energy form renewable sources. In 2007, U.S. wind-power generating capacity grew by 45% to nearly 17,000 megawatts per hour, second only to Germany.

Wind turbines in the U.S. are expected to generate about 48 billion kilowatt hours of energy this year, or enough to power about 4,5 million homes. Even so, that is only about 1.2% of the nation’s demand for electricity. By comparison, wind already meets about 20% of Denmark’s needs and about 12% of Spain’s.

Because of favourable wind conditions, much of the U.S. construction to date has been in areas far from big population centres. In many cases, transmission systems lack the capacity to move all of the resulting electricity to where it is most needed.

Building offshore would allow developers to produce electricity closer to big cities, particularly along the East Coast. The downside is that it would also boost construction costs by 30% or more.

Another key benefit of offshore wind power is the lower rate of wind turbulence at sea vs. on land. Sunlight penetrates the water evenly, resulting in a more even range of temperature directly above the water surface, thus reducing irregularity in the flow of the wind.

Less wind turbulence means that the height of the offshore wind turbines can be lower than similar models on land, as well as potentially longer lifetime for the turbine.

Source: WSJ, 20/06/08

Shaky economics of wind power

Royal Dutch Shell PLC said it will sell its stake in the world’s largest planned offshore wind-power station by generating capacity, illustrating the shaky economics of wind power.

The project, known as the London Array, involves Shell, E.On U.K. and Denmark’s Dong Energy A/S, with each holding a one-third stake. It plans to put 341 large wind turbines in the River Thames Estuary to generate 1,000 megawatts, or enough electricity to power as many as a quarter of the homes in the greater London area.

Commenting on the decision, Paul Colby, chief executive of E.On U.K. said: “The current economics of the project are marginal at best, with rising steel prices, bottlenecks in turbine supply…”.

The cost of the project is estimated at between £2 billion and £3 billion. The current cost of an offshore wind project is three to four times as much as building a gas-fired power plant, according to Centrica PLC.

Source: WSJ, 02-04/05/08

Africa's fraying power grid

Africa has the capacity to generate about 63 gigawatts of power for roughly 770 million people – about what Spain produces for its population of 40 million. Accordingly, just a quarter of Sub-Saharan Africa’s population has access to electricity.

In recent years, the situation has worsened because of the global commodities boom. With the power-hungry mining sector booming, and the economy humming along, the strain on an already fraying electricity grid has intensified.

Diamond mines in Botswana, a big diamond producer, are sucking up roughly half of the country’s overall electricity consumption. In South Africa, the mining industry, responsible for 7% of the country’s economic output, draws 17% of the country’s electricity production.

According to the World Bank, power outages plague 35 of Sub-Saharan Africa’s 53 countries and outages are costing African economies as much as 2% of their gross domestic product. Also at risk are government-funded electrification efforts aimed at bringing power to the countryside.

Source: WSJ, 18-20/04/08

U.S. GHG emissions stabilisation

On 16 April 16 2008, U.S. President George Bush pledged to halt the growth of greenhouse-gas emissions in the U.S. by 2025. In contrast, the EU is aiming to cut emissions 20% by 2020 compared with 1990 levels; the cut would go to 30% if other rich countries do the same.

The U.S. goal to halt emissions growth by 2025 is far below what the IPCC has said is needed to stop rising global temperature from causing massive damage to the environment. The IPCC estimates that carbon emissions must start to fall within the next 15 years and be cut by 50% by 2050 from 1990 levels to prevent the most severe impacts of climate change.

Source: WSJ, 18-20/04/08

IMF cost of emission reductions

In its semi-annual World Economic Outlook released on 3 April 2008, the International Monetary Fund forecast that sharply reducing greenhouse-gas emissions would slow global growth, but only minimally provided that policies are well designed.

The policies needed to reduce emissions by 60% from 2002 would leave the global economy about 2.6% smaller than it otherwise would be in 2040. Even so, the global economy would grow to about 2.3 times its current size between 2007 and 2040.

The IMF study said that all countries need to agree to climate-change mitigation policies because a large percentage of emissions will come from big developing countries.

A global price for emissions should be set, the IMF said. The study didn't choose between a cap-and-trade system and a carbon tax, arguing that the effects of both are similar - they raise the price of carbon emissions. The pricing policies must be “long-term and credible” in order to convince businesses to make necessary investments.

Source: WSJ, 04-06/04/08

The Clean Development Mechanism

The carbon credits market is a product of the Kyoto Protocol Clean Development Mechanism, or CDM. Under this mechanism, companies in rich countries can buy credits that let them avoid cutting their own GHG emissions by paying companies in poorer countries to do it.

A CDM credit, which allows a company to emit a ton of CO₂, fetches around €15. But before a project can earn the right to sell credits for GHG emissions, it needs to be approved by a U.N. body overseeing the CDM program. In 2004 and 2005, the U.N. board automatically approved 95% of projects proposed to it. These days, the U.N. is rejecting projects at a greater rate. Last year, the U.N. board gave automatic approval to only 57% of projects. Overall, it rejected 9% of proposed projects last year, more than double its rejection rate in 2006.

The issue centers on the principle of “additonality” or whether projects would have been built anyway without financial assistance from selling credits. If so, credit buyers wouldn’t be fulfilling their obligations to reduce GHG outputs. This issue is especially relevant as the U.S. mulls a carbon-trading system.

In total, the carbon market last year was valued at €40.4 billion, according to Point Carbon, aNorway based industry consultant. Of that total, Western companies and governments invested €6 billion in 2007 in credits from projects in the developping world.

Source: WSJ, 14/04/08, 15/04/08, 23/04/08

Réduire les émissions de GES

Eviter un réchauffement climatique important supposerait de réduire drastiquement les émissions de gaz à effet de serre. A titre d'exemple, limiter l'augmentation de la température de +2°C à +2,4°C par rapport à son niveau préindustriel supposerait de réduire d'ici à 2050 les émissions de CO₂ de 50% à 85% par rapport à leur niveau en 2000.

Une telle démarche requérait a priori d'importants efforts car elle représenterait une rupture avec les tendances récentes en matière d'émission. En effet, les émissions de gaz à effet de serre ont connu une importante progression au cours des dernières années. A titre d'exemple, les émissions de CO₂ ont augmenté de 80% entre 1970 et 2004.

Cette diminution des émissions devrait être engagée promptement car le réchauffement climatique connaît une inertie importante en raison, notamment:

• de la longue durée de vie :

o d'une large part des infrastructures responsables des émissions de gaz à effet de serre. A titre d'exemple, les infrastructures de production d'énergie et les bâtiments ont un taux de remplacement qui est d'environ 1 à 3% par an.

o des émissions de CO₂ dans l'atmosphère. Ainsi, la concentration atmosphérique en CO₂ ne diminuerait que d'environ 10% d'ici à la fin du XXI^e siècle si les émissions de ce gaz étaient totalement éliminées dès à présent.

• de la capacité des océans à emmagasiner d'importantes quantités de chaleur avant de les restituer dans l'atmosphère.

Ainsi, la Terre connaitrait un réchauffement d'environ de +0,3°C à +0,9°C au cours du XXI^e siècle même si la concentration en gaz à effet de serre demeurerait au cours de cette période au niveau qu'elle a atteint en l'an 2000.

Source : GIEC, 2007

Le réchauffement climatique

Le phénomène de réchauffement climatique est désormais avéré, la température mondiale moyenne ayant augmenté, au cours des 100 dernières années, d'environ 0,74°C. De surcroît, ce phénomène va en s'accélérant depuis les années 1970. Ainsi, sur les 12 années les plus chaudes que la Terre a connues depuis que les températures sont enregistrées, c'est-à-dire depuis 1850, 11 ont eu lieu entre 1995 et 2006.

Ce phénomène, qui ne saurait être dû uniquement à des facteurs naturels, est exceptionnel au regard de l'histoire climatique récente, les températures moyennes enregistrées dans l'hémisphère Nord pendant la seconde moitié du XX^e siècle étant :

• très probablement plus élevées que durant toute autre période de 50 ans depuis 500 ans,

• probablement les plus élevées depuis au moins 1 300 ans.

Le phénomène de réchauffement climatique va s'accentuer si la concentration atmosphérique en gaz à effet de serre continue de croître. Ainsi, la température moyenne de la planète devrait augmenter, selon les scénarios envisagés, de 1,1°C à 6,4°C au cours du XXI^e siècle. Ce réchauffement aura des effets très probablement plus importants que ceux observés au cours du siècle passé.

Source : GIEC, 2007

EU GHG emissions

According preliminary information collected by Point Carbon, a carbon market-research and consulting firm, EU GHG emissions from sectors covered by the EU’s Emission Trading Scheme rose last year by 1.1% to 1.914 billion metric tons.

Some 11,500 factories, oil refineries, steel mills and other installations are covered by the EU scheme, accounting for about half of Europe’s total emissions. There is still no limit on the other half, produced by everything from cars and planes to buildings and retail outlets.

Europe’s cap-and-trade system has been plagued with design and implementation problems from the start. Chief among them: national government issued too many carbon permits to regulated industries. As a result, companies had no real incentive to limit their emissions.

As a result, instead of shrinking as was originally envisaged, emissions in these industries have increased by about 1% per year since the program began. Regulators have tried to get the scheme back on track by forcing governments to ratchet down the number of permits they issue during the program’s second phase, from 2008 to 2012.

Source: WSJ, 03/04/08

Land Clearing and the Biofuel Carbon Debt

Executive summary

Carbon dioxide (CO2) emissions from fossil fuels make switching to lowcarbon fuels a high priority. Biofuels are a potential lowcarbon energy source, but whether biofuels offer carbon savings depends on how they are produced. Converting rainforests, peatlands, savannas, or grasslands to produce food-based biofuels in Brazil, Southeast Asia, and the United States creates a ‘biofuel carbon debt’ by releasing 17 to 420 times more CO2 than the annual greenhouse gas (GHG) reductions these biofuels provide by displacing fossil fuels. In contrast, biofuels made from waste biomass or from biomass grown on abandoned agricultural lands planted with perennials incur little or no carbon debt and offer immediate and sustained GHG advantages.

Excerpts

Demand for alternatives to petroleum is increasing the production of biofuels from food crops such as corn, sugarcane, soybeans and palms. As a result, land in undisturbed ecosystems, especially in the Americas and Southeast Asia, is being converted to biofuel production and to crop production when agricultural land is diverted to biofuel production. Such land clearing may be further accelerated by lignocellulosic biofuels, which will add to the agricultural land base needed for biofuels unless biofuels are produced from crops grown on abandoned agricultural lands or from waste biomass.

Soils and plant biomass are the two largest biologically active stores of terrestrial carbon, together containing ~2.7 times more carbon than the atmosphere. Converting native habitats to cropland releases CO2 due to burning or microbial decomposition of organic carbon stored in plant biomass and soils. After a rapid release from fire used to clear land or from decomposition of leaves and fine roots, there is a prolonged period of GHG release as coarse roots and branches decay and as wood products decay or burn.

We call the amount of CO2 released during the first 50 years of this process the ‘carbon debt’ of land conversion. Over time, biofuels from converted land can repay this carbon debt if their production and combustion has net GHG emissions that are less than the life-cycle emissions of the fossil fuels they displace. Until the carbon debt is repaid, biofuels from converted lands have greater GHG impacts than the fossil fuels they displace.

Our analyses suggest that biofuels, if produced on converted land, could, for long periods of time, be much greater net emitters of greenhouse gases than the fossil fuels that they typically displace. All but two, sugarcane ethanol and soybean biodiesel on Cerrado, would generate greater GHG emissions for at least half a century, with several forms of biofuel production from land conversion doing so for centuries:

• The biofuel carbon debt from biofuels produced on converted Brazilian Cerrado is repaid in the least amount of time of the scenarios we examined. Sugarcane ethanol produced on Cerrado would take ~17 years to repay the biofuel carbon debt.
• Converting lowland tropical rainforest in Indonesia and Malaysia to palm biodiesel would result in a biofuel carbon debt of of CO2 that would take ~86 years to repay.
• Ethanol from corn produced on newly converted US Central grasslands results in a biofuel carbon debt repayment time of ~93 years.
• Converting lowland tropical rainforest in Indonesia and Malaysia to palm biodiesel would result in a biofuel carbon debt that would take ~86 years to repay.
• Converting tropical peatland rainforest to palm production incurs a similar biofuel carbon debt from vegetation, but the required drainage of peatland causes an additional sustained emission which would require ~420 years to repay.
  
• Soybean biodiesel produced on converted Amazonian rainforest would require ~320 years to repay compared with GHG emissions from petroleum diesel.

At least for current or developing biofuel technologies, any strategy to reduce GHG emissions that causes land conversion from native ecosystems to cropland is likely to be counterproductive.

Additional factors may influence biofuel impacts on GHG emissions, including the following:

• biofuel production can displace crops or pasture from current agricultural lands, indirectly causing GHG release via conversion of native habitat to cropland elsewhere.
• greater biofuel production might decrease overall energy prices, which could increase energy consumption and GHG release.

If biofuels are to help mitigate global climate change, our results suggest that they need to be produced with little reduction of the storehouses of organic carbon in the soils and vegetation of natural and managed ecosystems. Degraded and abandoned agricultural lands could be used to grow native perennials for biofuel production, which could spare the destruction of native ecosystems and reduce GHG emissions.

Biofuel production that causes land clearing and GHG release may be favored by landowners who receive payments for biofuels but not for carbon management. To accurately incorporate the costs of carbon emissions in market signals, emerging policy approaches to GHG emissions must be extended to the full life-cycle of biofuels including their net GHG emission or sequestration from land-use change. Moreover, it is important that international policy negotiations to extend the Kyoto Protocol beyond 2012 address emissions from land use change due to increased demand for biofuels.

Joseph Fargione¹ Jason Hill^2,3 David Tilman² Stephen Polasky^2,3 Peter Hawthorne^2
1The Nature Conservancy

²Department of Ecology, Evolution, and Behavior, University of Minnesota

³Department of Applied Economics, University of Minnesota

Published: Science, 07/02/08

Cap-and-trade in the U.S.

Sens. John McCain, Hillary Clinton and Barrack Obama have endorsed putting into place a cap-and-trade system to reduce carbon emissions though they differ on how that system should be structured.

Sens. Clinton and Obama both say they would cut emissions 80% by the year 2050. Sen. McCain aims for a lower 65% target. Sens. Clinton and Obama have rejected calls from utilities and other businesses to allocate the initial polluting rights based on a company’s current emissions. Instead, they want to auction off all the pollution rights. Sen. McCain is less clear on this point.

Moreover, the impact of such scheme on the economy may not be substantial. According to an analysis prepared by the U.S. Environmental Protection Agency (EPA), published on March 14 2008, the leading congressional proposal to control greenhouse-gas emissions could be implemented without significantly harming U.S. economic growth over the next two decades.

According to the analysis, if the U.S. were to implement the bill, GDP growth over 2010 – 2030 would be one percentage point less than in the absence of the bill. However, it projects that the proposal would cause electricity prices to increase by 44% by 2030.

The proposed bill would cap greenhouse-gas emissions from power plants, factories, oil refineries and other polluters. EPA also declared that, if it determines that greenhouse-gas emissions human health or well fare, it could have to impose costly new permitting requirements on a range of relatively small emitters of carbon dioxide, including large apartment buildings, schools, hospitals and retail stores.

Source: WSJ, 18/03/08

Preventing deforestation through carbon credits

Just two countries—Indonesia and Brazil—account for about ten per cent of the greenhouse gases released into the atmosphere. Neither possesses the type of heavy industry that can be found in the West, or for that matter in Russia or India. Still, only the United States and China are responsible for greater levels of emissions. That is because tropical forests in Indonesia and Brazil are disappearing with incredible speed. And when forests disappear, the earth loses one of its two essential carbon sponges (the other is the ocean).

Paying farmers or governments to prevent deforestation in countries like Indonesia would be one of the best investments the world could ever make. From both a political and an economic perspective, it would be easier and cheaper to reduce the rate of deforestation than to cut back significantly on air travel. It would also have a far greater impact on climate change and on social welfare in the developing world. Possessing rights to carbon would grant new power to farmers who, for the first time, would be paid to preserve their forests rather than destroy them.

The easiest way to finance such a plan would be to use carbon-trading allowances. Anything that prevents carbon dioxide from entering the atmosphere would have value that could be quantified and traded. Since undisturbed farmland has the same effect as not emitting carbon dioxide at all, people could create allowances by leaving their forests untouched or by planting new trees.

Source: The New Yorker, 25/02/08

Food miles and carbon footprint

It is a widely held assumption that the ecological impacts of transporting food—particularly on airplanes over great distances—are far more significant than if that food were grown locally. Yet the relationship between food miles and their carbon footprint is not nearly as clear as it might seem. In fact, many factors besides freight emissions influence the carbon footprint of a product.

Last year, a study of the carbon cost of the global wine trade found that it is actually more “green” for New Yorkers to drink wine from Bordeaux, which is shipped by sea, than wine from California, sent by truck. The study found that “the efficiencies of shipping drive a ‘green line’ all the way to Columbus, Ohio, the point where a wine from Bordeaux and Napa has the same carbon intensity.”

The environmental burden imposed by importing apples from New Zealand to Northern Europe or New York can be lower than if the apples were raised fifty miles away. New Zealand has more sunshine than in the U.K., which helps productivity. That means the yield of New Zealand apples far exceeds the yield of those grown in northern climates, so the energy required for farmers to grow the crop is correspondingly lower. It also helps that the electricity in New Zealand is mostly generated by renewable sources, none of which emit large amounts of CO₂.

Researchers at Lincoln University, in Christchurch, found that lamb raised in New Zealand and shipped eleven thousand miles by boat to England produced six hundred and eighty-eight kilograms of carbon-dioxide emissions per ton, about a fourth the amount produced by British lamb. In part, that is because pastures in New Zealand need far less fertilizer than most grazing land in Britain (or in many parts of the United States).

Similarly, importing beans from Uganda or Kenya—where the farms are small, tractor use is limited, and the fertilizer is almost always manure—tends to be more efficient than growing beans in Europe, with its reliance on energy-dependent irrigation systems.

The Natural Resources Department of Cranfield University, in England recently completed a study that examined the environmental costs of buying roses shipped to England from Holland and of those exported (and sent by air) from Kenya. In each case, the Department made a complete life-cycle analysis of twelve thousand rose stems for sale in February—in which all the variables, from seeds to store, were taken into consideration. It even multiplied the CO₂ emissions for the air-freighted Kenyan roses by a factor of nearly three, to account for the increased effect of burning fuel at a high altitude. Nonetheless, the carbon footprint of the roses from Holland—which are almost always grown in a heated greenhouse—was six times the footprint of those shipped from Kenya.

Source: The New Yorker, 25/02/08

EPOBIO report on the potential of micro- and macro-algae for industrial applications

The purpose of EPOBIO, a Science to Support Policy Consortium funded by the European Commission, is to realise the economic potential of sustainable resources – non-food bioproducts from agricultural and forestry feedstocks.

This final report from EPOBIO addresses emerging opportunities presented by phototrophic organisms of the aquatic environment. Of net primary production of biomass, it is generally accepted that 50% is terrestrial and 50% aquatic. Policies of governments have focussed almost exclusively on the use of land plants, with little consideration so far of the non-food applications and utility of macro- and microalgae and their products.

The limitations of agricultural land and the impacts of global climate change on agricultural productivity are factors of increasing relevance in the decisions that must be taken on land use for food, feed, chemicals and energy.

Various estimates for the production costs of algal biomass in photobioreactors range from US$ 30 – 70 kg, which is almost three orders of magnitude more expensive than waste biomass from conventional agriculture. The cost of producing algal biomass in raceway ponds, about US$ 10 kg, is about 2 orders of magnitude higher than that of biomass produced in conventional agriculture.

The major conclusion of the cost analysis is that the cultivation of algae solely for biofuels and CO2-mitigation is not cost-competitive by 1 – 2 orders of magnitude. Only if the algal biomass is a by-product of wastewater treatment systems, or high value compounds such as astaxanthin or β-carotene, commercially viable processes become feasible. However, this limits the scale of energy production and GHG abatement from algae by default to the amount of algal biomass produced to support the profitable applications, which is quite small.

Source: EPOBIO, Anders S Carlsson, Jan B van Beilen, Ralf Möller and David Clayton, 09/07

Hazards of wind power

A recent grid problem in Texas illustrates the potential shortfalls of wind power. The grid problem unfolded on Feb. 26 after a cold front blowing through West Texas temporarily lifted wind production.

When it subsided, wind speeds dropped and the productivity of wind turbines dropped by 80% from 1,700 to 300 megawatts. The problem was exacerbated by energy demand that was greater than forecast and by lower availability of some fossil-fuel units. The result was an electricity shortfall.

Shortages do more than degrade reliability; they push up prices. Wholesale power prices surged to $1,055 a megawatt hour in West Texas on Feb. 26, versus $299 elsewhere in the state.

To get the system back in balance, the grid operator declared an emergency and paid big customers to temporarily curtail electricity use. The problem illustrated the need for better wind forecasting tools.

Currently, the Electric Reliability Council of Texas, operator of the state’s high-voltage transmission system, accepts estimates of energy generators without second-guessing their accuracy. That is about to change. Texas is working on a method integrate more robust wind forecasts to make sure it doesn’t rely on resources that won’t materialize.

Source: WSJ, 06/03/08

Airline biofuel test

On February 24 2008, Virgin Atlantic Airlines flew a Boeing 747 from London to Amsterdam with one of the four engines burning a mixture of 80% jet fuel and 20% plant oil. The first commercial airline test of biofuel went without a hitch.

The fuel was produced by Imperium Renewables Inc., a four-year old Seattle manufacturer of biodiesel fuels. The company solved a problem many fuel experts had thought might be insurmountable – making a biofuel for jets that wouldn't freeze in low temperatures at flight altitude. Imperium came up with a process that yield fuel that won't freeze at minus 44 degrees Celsius.

The future for viable biofuels won't likely be coconuts and babassu nuts, whose oil were used for the test, however, because enough oil from those plants, which are both used in cosmetics, can't be produced to power the world airlines.

John Plaza, founder of Imperium, says its technology can make biofuels out of just about any renewable crop, and the substance that may hold the most promise is algae. Sewage treatment plans offer an ample source, and algae-produced fuel wouldn't use up food crops.

Source: WSJ, 26/02/08

Qu'est-ce que l'effet de serre ?

L'effet de serre est un phénomène naturel qui rend possible la vie sur terre telle qu'elle existe actuellement. En effet, notre atmosphère comprend naturellement des gaz, dits "à effet de serre", qui exercent une action similaire à celle des vitres d'une serre. Ceux-ci laissent ainsi pénétrer une partie de l'énergie solaire mais empêchent la chaleur qu'elle génère de s'échapper, entraînant un réchauffement de la surface de la planète. Sans cet effet de serre, la température moyenne à la surface de la Terre serait en-deçà du point de congélation de l'eau.

Toutefois, les activités humaines, au premier rang desquelles l'utilisation de combustibles fossiles, tels que le pétrole, le gaz et le charbon, ainsi que le déboisement, sont à l'origine d'une augmentation de la concentration atmosphérique en gaz à effet de serre. A titre d'exemple, la concentration atmosphérique en dioxyde de carbone (CO₂) a augmenté de 35% depuis la révolution industrielle pour atteindre un niveau bien supérieur à celui des 650 000 dernières années. Or, l'ajout de gaz à effet de serre dans l'atmosphère, intensifie l'effet de serre, réchauffant ainsi le climat de la Terre. Au total, l'effet de serre est un phénomène naturel, qui connaît actuellement une intensification en raison d'activités humaines, entraînant ainsi un réchauffement climatique.

EU emission caps

The European Union announced a new plan last week to combat global warming that would set firm caps on emissions by 27 countries. Europe first imposed caps on emissions three years ago; this plan toughens them.

Between 2013 and 2020, the E.U. plan would reduce greenhouse gas emissions to 20 percent below 1990 levels. Gone are the national action plans that saw countries adopt schemes that protected local industries. Instead, the European Union would set individual national caps to meet the overall goal. The reduction would be bumped up to 30 percent if the United States and China signed binding climate change agreements.

The plan would correct the faults of the previous cap-and-trade system, which gave away carbon emissions allowances and led to windfall profits for polluters while producing little in reductions. The new proposal would put a price on carbon by auctioning 60 percent of the emissions permits initially and all of them by 2020. There is a mandatory target that 20 percent of E.U. energy be derived from renewable sources, including 10 percent from biofuels. Overall, 60 percent of the European Union's total greenhouse emissions would be covered by the plan.

The E.U. plan is a long way from implementation; the hurdles include approval by the European Parliament. European Commission officials say their new carbon proposals assume a truly global agreement would be in place by the time their new rules take effect in 2013. If not, one option, similar to the proposal pending in Washington, would be to require that competing industries in countries without caps meet emission-reduction targets for goods they export into Europe. That could force them to buy emission credits on the European market -- thus boosting their costs.

But imposing tariffs on imports from countries like China would be fraught with practical problems, including determining how to levy the tariff on a finished product like a car, whose parts are built in multiple countries.

Source: Washington Post, 28/01/08; WSJ, 23/01/08

EU renewable-energy use targets

The European Commission set individual country targets for renewable-energy use, a critical step in an ambitious plan, approved last year, to have 20% of the European Union energy come from renewable sources, such as wind, solar and biofuels, by 2020. The targets could change as the proposal works its way through the EU's legislative system.

According to the Commission is most recent data, only 8.5% of the EU energy consumption in 2005 came from renewable sources. Some of the EU's' biggest countries will have to make substantial leaps thanks to a mechanism that puts a greater burden on countries with higher per capita gross domestic product. Britain-at 1.3% renewable in 2005, according to the Commission's figures-must reach 15%. Germany must go from 5.8% to 18%.

Of particular concern is the extent to which countries should be able to meet their benchmarks by trading renewable certificates instead of investing in renewable energy on their own soil. Under the current proposal countries can stop producers from selling their certificates abroad.

Source: WSJ, 24/01/08

Biodiesel in Europe

In 2003, the EU set an ambitious goal of replacing 10% of transportation fuel with nonfossil fuels by 2020. To achieve this goal, the bloc agreed that its governments would phase in tax breaks and rules to encourage their production and use.

But the bloc currently uses nonfossil fuels for less than 2% of transportation fuel consumed and now has a glut of biodiesel. By last year, Europe's annual capacity to make the fuel had climbed to 10 million metric tons from two million tons in 2003. The world consumed only nine million tons of biodiesel last year. Europe's producers found buyers for just five million tons.

The industry is in trouble, under pressure from soaring costs, disappearing tax breaks, less-costly imports and waning public support. However, scientists say it's likely to be at least 2010 before any breakthroughs are made on costs, or on producing a biodiesel than can run in regular diesel engines effectively at a much higher blend than the current standard of 5% per gallon of diesel sold at the pump.

U.S. ethanol producers are facing some similar problems. Buoyed by $7 billion a year in subsidies and a tariff on foreign imports, U.S, farmers planted a quarter more corn this year, most of it going toward making ethanol. But supply of ethanol is outstripping demand, mainly because of the difficulty and cost of transporting ethanol, which needs special pipelines, unlike biodiesel which can be mixed with regular diesel fuel and, when blended, doesn't need any special pumps or engine design changes. Some U.S. ethanol producers are idling production and a debate has begun over whether the pressure that ethanol production puts on agricultural land is worth the modest cuts in carbon-dioxide emissions it yields.

Source: WSJ, 27/12/07

Kyoto treaty

The Kyoto treaty sets emissions limits for industrialized countries and for the EU, which decided itself how to divide the burden among member countries. It requires the countries that ratified it to reduce their overall emissions by 5% from 1990 levels. The caps, which expire in 2012, won't go into effect until 2008.

It is up to each participating nation to determine which companies to slap restrictions on. After a government sets an emissions limit for a company, it gives that company just enough permits to cover it. Companies that reduce emissions below their caps can sell excess credits to companies that don't have enough. Each company must decide how much to cut emissions and how many permits to buy from others.

Developing nations face no caps. Diplomats decided it wasn't fair to burden their economies right away with pollution controls, given that the industrialized world had faced no restrictions during decades of growth. However, the treaty includes a unique mechanism for involving the developing world in the process. Carbon reduction projects in developing nations generate emissions permits, or credits, which can be sold to companies in industrialized nations facing emissions caps. In effect, these companies can fulfil some of their emission-reduction obligations by financing pollution-control projects in the developing world.

The Kyoto Protocol was supposed to harness market forces to solve global warming. But industry has proved adept at fulfilling its obligations without cutting down much on fossil fuels such as oil, coal and natural gas. It is doing this largely by funding projects in the developing world that destroy potent but uncommon greenhouse gases.

Under the treaty, projects targeting more potent gases generate more credits than projects targeting carbon dioxide. The treaty covers six kinds of greenhouse gases. At one end of the spectrum is carbon dioxide. It accounts for 77% of all man-made greenhouse-gas emissions the U.N. says, but it is also the weakest gas. At the other end is HFC-23, a by-product of the manufacture of a common refrigerant. Every ton of it is 11,700 times as damaging to the atmosphere as a ton of carbon dioxide the U.N. says. But despite its high potency, the gas accounts for less than 1% of the effect of man-made greenhouse-gas emissions, the U.N. says. Under the Kyoto trading system, each credit represents one carbon dioxide-equivalent ton of avoided emissions, so a project that eliminates one ton of carbon-dioxide emissions generates one sellable credit. A project that gets rid of one ton of HFC-23 emissions generates 11,700.

Installing machinery on refrigerant plant to incinerate HFC-23 is inexpensive. According to the World Bank, generating one carbon credit through an HFC-23 project typically costs less than $1. Generating a credit from a renewable-energy project erecting a wind turbine or a solar panel-can cost $5 to $10, the World Bank says. Such credits currently sell for as much as €12 or about $25. So the economic incentives to undertake HFC-23 Projects have far exceeded those for fossil-fuel reduction projects.

Between 2002, when credits generated in developing countries began trading, and the end of 2006, HFC-23 Projects accounted for 46% of all developing-world credits traded-by far the biggest chunk of that market, according to the World Bank. AII told, at least 70% of developing-world credits traded during that market's first five years came from projects targeting gases other than carbon dioxide, the World Bank says. At present, most eligible plants that emit HFC-23 have been signed up for carbon-credit projects. As a result, projects targeting less-potent gases are getting more funding. Programs to reduce the burning of fossil fuels - a far bigger environmental problem - accounted for less than one-third of the developing-world credits traded between 2002 and last year the World Bank says. But they have begun getting more attention.

Some investors in the carbon market cite another reason for the scarcity of clean-energy projects: a panel of U.N.-sanctioned officials who meet periodically in Bonn, Germany, and decide which proposed carbon-reduction projects will get to sell credits. The panel approves only environmental projects it determines wouldn't happen without the sale of the credits. Clearing that bar can be difficult for clean-energy projects. Those related to potent gases such as HFC-23 and methane have an easier time, because they rarely make economic sense without the carbon-credit revenue. U.N. officials say that to keep the system honest, it is important not to subsidize projects that would happen anyway.

The broader question is whether a cap-and-trade system targeting industry is enough to meaningfully curb greenhouse gases. Some favour the introduction of carbon-emission taxes, saying that would push consumers to trim their energy use. Others say blunter tools are needed, such as tougher government rules on the energy efficiency of cars and buildings. Industry has long resisted such steps.

Source: WSJ, 05/12/07