Archive for Carbon Dioxide Emissions

Economics of Carbon Capture and Storage

Both Carbon capture and storage (CCS) and Enhanced Geothermal Systems need research and development to reach their full pormise of baseload power without significant emissions. What will be the costs of this research, and what will be the costs of the eventual elctricity production?

I take a look at these questions in my AltEnergyStocks column. Given limited funding, what would you choose?

Advertisements

Comments off

TXU goes Nuclear- (rant)

A Wall Street Journal article today reports that TXU is planning on using nuclear power to replace the coal plants which they shelved recently.

This drives me batty. I do think that nuclear power is better than coal, and even better than IGCC, but basically substituting nuclear power for coal power is just replacing one nasty externality (CO2 emissions) with another: adding to the risk of nuclear terrorism and waste disposal problems.

When expected costs of CO2 are factored in, the price of nuclear power does looks good. But I ask the same question people are finally asking about global warming: “What’s the business case for destroying the planet?”

Here’s what we should be thinking for our baseload energy needs:

  • Energy Efficiency…. 1-3 cents per kWh
  • Concentrating Solar Power with thermal storage…. 10-15 cents per kWh (and dropping)
  • Wind power, combined with pricing mechanisms to shift demand…. 4-6 cents per kWh
  • And for peaking power:

  • Demand Response
  • Time of Day Pricing
  • Concentrating Solar Power with large scale thermal storage and an oversized turbine
  • Eight steps forward… six steps back. Do we really need to dig up mountains for uranium instead of decapitating them for coal?

    Comments (5)

    MIT Study: IGCC may not be better for Carbon Sequestration

    There’s a new study out from MIT which questions the received wisdom that IGCC or “Clean Coal” plants “will make it easier and cheaper to capture carbon dioxide, compared with collecting it from the smokestacks of conventional power plants.” The study calls for “large-scale demonstration programs that would, for the first time, capture carbon dioxide from coal plants, transport it, and store it at a large scale.”

    While I disagree with the assertion that “coal… will continue to be a major source of electricity,” the reason I think that coal will not make the cut when the true costs of the associated emissions and environmental damage from mining are taken into account, the reason I believe this is that the costs of carbon capture and sequestration are likely to be much higher in reality than they are in theory, especially when we are attempting to sequester a “volume of compressed carbon dioxide … similar in scale to the amount of oil consumed in the United States,” and so we will no longer be able to use it only in places where it is actually useful, such as in enchanced oil recovery.

    For this reason, I totally concur with the conclusion that we need to start doing large scale CO2 sequestration now, so we can decide if there is any hope of it working before we throw tons more money at cola plants (either conventional pulverized or IGCC) in the hope that some time in the future we’ll figure out some economic way to shove the carbon that we should have left underground in the first place back underground.

    On the bright side, it looks like American Electric Power (NYSE: AEP) is trying large scale carbon capture and sequestration (CCS). I hope they can get it to work at reasonable cost… if CCS could be made to work cheaply, we could start capturing CO2 from biomass power plants, and have carbon-negative electricity.

    Comments off

    How Your Money Made the TXU deal happen

    Most of the readers of this blog are not investors in the Texas Pacific Group or KKR, but you did have a role in making the private equity deal that has everyone in the environmental community (not to mention the private equity world) talking.

    Here’s what you did: You didn’t invest in TXU Corporation (NYSE:TXU). As any regular reader of this blog knows, I’m a big proponent of putting your money where your mouth is, especially when it comes to staying away from companies whose operations would increase the severity of climate change. And, until a couple weeks ago, TXU with their 11 planned pulverized coal plants was public enemy #1 when it came to future carbon emissions.

    My readers, socially responsible mutual funds, other like minded people, and other investors who were worried about carbon risk stayed away from TXU in droves, and because of that, the stock was lower (how much we’ll never know,) which made it easier for Texas Pacific and KKR to offer a 25% premium, which in turn should be enough to entice current TXU investors to give up their stock in the buyout.

    It’s easy to see this deal is a back room affair between a bunch of filthy rich folks, TXU management, and the leaders of a couple national environmental groups, with the little guys (like the New York Times, who originally saw the merger as a private equity endorsement of TXU’s high-carbon generation strategy left in the dark.

    The greatest risk for those of us fighting climate change is despair. Climate change is a giant problem, but we can make big changes if we all pitch in to help. To all of you who did your little part to make the deal happen (even if there are still some doubts as to the final results), I want to say,

    “Thanks, and keep up the good work.”

    Comments (6)

    Holistic Approaches to Energy Problems

    H. L. Mencken said, “For every human problem, there is a neat, simple solution; and it is always wrong.”  When it comes to solving the problems of peak oil and global warming, I also think that the loudest barking is up the wrong tree.  We look for the quick fix, trying to find a substitute energy source that allows us to change the way we do things little as possible, when the real problem is actually what we’re doing, not how we’re doing it.   We need holistic solutions, not quick fixes.

    Too abstract?  Here are some concrete examples:

     Problem: Peak Oil

    Quick fixes: Ethanol and slight increases in vehicle efficiency standards.

    Holistic solutions: Change our driving culture and infrastructure, by changing the way car use is priced from fixed charges to a per mile basis (“Pay as you drive”).   Removing subsidies to use cars when other forms of transport are available, and redesigning our cities to make them easier to get around on foot, bike, and public transport.  Like other holistic solution, all these steps increase safety and reduce congestion, reduce obesity and associated health problems, as well as reducing the use of gasoline.

    Problem: Wind and Solar are intermittent resources, but coal produces too much CO2 and natural gas prices are rising rapidly.

    Quick Fixes: Nuclear power and “Clean” Coal.

    Holistic Solutions: Shift our demand for electricity to times when it is available, by using time of use pricing, energy storage and demand alignment, and distributed energy storage such as plug in hybrid vehicles.

    Investing opportunities:On thing that’s striking about these examples is it’s much easier to find investment opportunities in the quick fixes than in the holitistic solutions.  To invest in ethanol, you can just buy ADM or one of the multitude of ethanol stocks that have been going public recently, but I have yet to come up with a satisfactory way to invest in better urban planning (except buy a house in a walkable community, which is something I’m planning on doing this summer.   Stapleton is the community.  I currently live there, but I’ve been renting and waiting for the end of the housing bubble.  I actually don’t think that housing is going to go up again any time soon, but I’m tired of waiting.) 

    The investment landscape is a little better when it comes to energy management.  Itron and Siemens both have divisions that help utilities manage their grids better, and there are many battery and other energy storage companies to choose from.  Still, it’s a lot harder to pick through battery companies than to just buy a nuclear powered utility or uranium miner.

    Holistic solutions, by their nature, have weak boundaries… the benefits tend to be diffuse, and spread over society as a whole, so it is difficult to charge fairly for them.  This, I think, is why there are so few companies pursuing them when they can pursue a quick fix that they can charge for up front.  

    Companies have an obligation to their shareholders to make money.  It’s our job, as human beings, to work towards regulations that make it easier for companies to make money with holistic solutions that actually solve the problem than it is to make money with quick fixes that just cover the problem up.

    Comments (3)

    The Economist on America’s Green Shift: The States Lead

    The greening of America

    I’m compelled to share the cover image of this week’s Economist magazine.   The cover story is on the shift of the US’s shift towards greenery.   It’s an overview article, covering many of the recent political developments.  Their main point is that the current greenery is bottom-up, not top-down imposed by the federal government.

    They feel that the drivers of the political shift are:

    1. Voter reaction to increasingly frequent intense weather events, especially hurricane Katrina.  Climate researchers expect violent and erratic weather due to global warming.
    2. Self preservation on the part of Republicans.  The only Republican who weathered the November elections well was the quite green Governator.
    3. Energy security worries (a two edged sword.)
    4. Businesses, who recognize the inevitability of climate controls, and so want to be part of the process of designing them.

    They seem to expect rapid change due to this state-driven momentum.  Here’s hoping. 

    Comments (2)

    Win-Win Auto Insurance

    On Thursday, I attended NREL’s Energy Analysis seminar, which this week featured Todd Littmann of Canada’s Victoria Transport Policy Institute, on Win-Win Transportation Solutions.

    As an economist focused on policy, Todd Littman Photo of Todd Littmanhas done a lot fo thinking about what are the costs to society of transport, and what sorts of perverse incentives are there that are making these costs much higher than they would be otherwise.  He has a ton of extremely interesting ideas which will be useful to reduce transportation energy use for little or no cost, by simply removing perverse incentives.  I’m only going to go into a couple that I thought were most surprising or innovative here, so I urge you to read the whole paper on which his talk was based on VTPI.org.

    One surprising result for me was that the greatest costs to from driving may not be the costs of gas, pollution, or global warming, but the cost of accidents, which are infrequent, but can be extremely expensive.  Even before adding in additional costs of congestion, wear on roads, etc., you do not need to be concerned at all about global warming to want to reduce vehicle miles traveled.

     And reducing vehicle miles a is far more effective and quick way of reducing transportation energy use (as well as vehicle accidents) than improving vehicle efficiency.

    He has many ideas on cost neutral ways to reduce vehicle mileage, from broadly discussed ones such as smart growth, price shifting fuel taxes, and road and congestion pricing, and he does analysis on how cost effective all of these are.

    What really got me to sit up and pay attention was an I dea I had heard no where else, which was all the more interesting because he feels it is the most cost effective (in fact, cost-negative: it pays more than it costs) method of reducing vehicle use: Pay-As-You-Drive pricing.  The idea is simple: instead of paying vehicle registration and auto insurance based on how long we have the car, we should pay based on how far we drive it.  

    Since the safest place for out vehicle is in our garage (including theft and hail damage) this makes more economic sense than the current monthly payments for auto insurance, and since the costs we place on the transport system also increase the more we drive, it also makes sense for vehicle registration fees.   Because rich people with fancy cars not only tend to drive more than the poor, but because their registration fees are also already higher than those for inexpensive cars, this may even make the fees more progressive than they currently are, but some fine-tuning may be needed.

    Since this is a purely regulatory reform, costs of implementation are minimal, consisting of only an annual odometer audit after the system is set up; an audit which could easily be combined with other scheduled service to minimize the cost.

    According to his numbers, pay as you drive insurance and registration would average about 21 cents a mile for most people (about twice the cost of gasoline,) which I can easily see as enough to make most people think harder about how to maximize how efficiently they drive, or even consider public transport where it is an option… most public transport would become much more cost effective for people, without adding to their financial burden.

    You might worry that people with long commutes and no public transportation might be unduly burdened by this shift, but we need to remember that they already pay more for auto insurance, because these are questions the auto insurance company asks.  The big difference is that there would be an increased marginal cost of driving, and it is the marginal cost of an activity that has the greatest effect on behavior, not the average or total cost.

    The Vattenfall Institute recently found that the cost of stabilizing the United States’s share of CO2 concentrations at 450 ppm by 2030 would actually be negative, and it’s innovative solutions like those coming out of VTPI that let us get paid to cut emissions.

    What are we waiting for?

    Links: Victoria Transport Planning Institute: www.vtpi.org

    Win-Win Transportation Solutions

    Comments off

    « Newer Posts · Older Posts »