Archive for Energy efficiency

Stock Analysts See the Light Emitting Diodes

This week’s AltEnergy Stocks column is about the recent, and well deserved attention the LED stocks are getting, especially one of my long-time facorites, Cree, Inc. (A stock I and many of my clients own a lot of.)

I think (and hope) that this is the beginning of a new trend of the market starting to recognize that Energy Efficiency technologies, such as LEDs are the first step to reducing our carbon footprint. If you think so too, I have a few suggestions in the column of stocks that might benefit (as well as Cree, which may have a lot farther to run.)

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Colorado Renewable Energy Conference, June 8-10, 2007

CREC logo Next month is the annual Colorado Renewable Energy Conference, held this year from June 8- 10, 2007 at the Steamboat Grand Hotel in Steamboat Springs, Colorado. Keynote speakers are Dr. Chuck Kutscher and Patty Limerick.

CREC is a great place to fnd out what’s happeninging renewable energy in Colorado, and to network with people in the business here.

If you’re really desperate for something to do Saturday Evening from 4-5pm, you can go to a panel led by some guy named “Dr. Tom Konrad” on “Investing in Renewable Energy Stocks.” If you’re lucky, it will be dark in the back of the room and you can take a nice nap.

CREC 2007 Flyer
More info

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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?

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    A Demand Response IPO

    I have written another article for on the IPO of a company specializing in Demand Response.

    Another way of thinking of Demand Response as “dispatchable demand.” In general, the electic utility matches supply and demand of electricity by controlling supply and trying to keep it in sync with demand from customers. But the other side of this coin is to allow customers to respond to price signals from the utility to allow them to choose to use electricity when it is easier and cheaper for the utility to supply. I see the widespread use of demand response (along with energy storage) as essential if we are going to meet our energy needs with intermittent resources such as solar and wind.

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    Don’t Bogart That Volt!

    The winner is in for my Best Energy Efficiency Headlines contest.

    Runners up are:

    Preston from Jetson Green for “A Killowatt Saved is a Killowatt Earned”


    Chris Baskind, with “Don’t Bogart that Volt”, (I really like this one, but I used it on a couple people, and they said “Huh?” Apparently you either have to be an ex-hippie, slang-o-phile, or old movie fan to get the reference.)

    and the winner is…. [drumroll]
    Read the rest of this entry »

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    Visual Comparison of Electricity Generation Technologies

    I just put together a couple graphs for a talk I’m giving on Monday to give people a visual feel of the various technologies for generating electricity.  These come with a gigantic caveat: the numbers are far from precise.

    With changing technologies, it’s impossible to represent any of this with a single number anyway.  I’m trying to show how the technologies compare to each other, and I used four parameters:

    • Cost ($/MWh),
    • Availability (better the closer the profile of the technology matches a normal demand curve (wind is bad, baseload is okay, dispatchable is best, solar),
    • Emissions (and I count waste storage when it comes to nuclear),
    • Bubble sizes represent the size and durability of the resource (I’ve tried to combine in one number how much power we can get from the resource, but also how long supplies of fuel will last.) 

    In both charts, the “best” technologies are in the upper left (low cost, low emissions, and available when we need them.)

    I know that I’m going to upset a lot of people because I was too harsh with their favorite technology, so feel free and comment on the numbers I’m using, but also please provide references for where you get your numbers.  Most of these are off the top of my head, so their accuracy is admittedly questionable.   Here are the numbers I used to make the graphs.

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    Contest: Best Energy Efficiency Headlines

    On my Psychology of Energy Efficiency post yesterday, Marc Gunther (columnist for Fortune and CNNMoney) left a comment as to another reason Energy Efficiency gets so much less attention than it deserves:

    Compared to wind, solar or nuclear, [Energy Efficiency] is boring–and therefore gets less media attention than it should. It’s rarely controversial. And just try writing a headline that will grab people for a story about efficiency. I have. It’s not easy.

    I’d like to open up the comments on this post to a challenge: come up with an attention grabbing headline for a story on energy efficiency.   Entries will be judged by me and Marc (who was kind enough to volunteer) and I’ll post the best entries on my blog on  March 5th.   The best entry will win a Kill-a-Watt appliance tester, or a half hour investment consultation by phone from me (your choice.) 
    Feel free to submit headlines from published articles as inspiration for other contestants, but please tag them as such.   Part of the goal here is to come up with catchy titles Marc can use in the future.  Only new headlines will be eligible to win (and I will check.)
    Let the games begin!

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    The Psychology of Energy Efficiency

    Efficiency is unquestionably the largest, cheapest, and cleanest wedge among the many we need decarbonize our energy economy.  Energy efficiency tends to cost just 1 to 3 cents per kWh saved, far less than even coal-fired generation.   Every renewable technology, from wind to solar, to biomass, has trade-offs.  At the very least, we have to decide if the energy we are using for one purpose is not better used for something else.

    Energy efficiency is the exception to this rule: you can not use a kilowatt-hour or a BTU over and over again.  Given these advantages over generation, it’s amazing that energy efficiency is nevertheless so extremely cheap.  Given an even moderately efficient [pun intended] market, you would expect that all the cheap energy efficiency measures would long ago have been taken until the marginal price of the next efficiency measure was above the marginal price of added electricity generation.

    So why hasn’t it? 

    Why is TXU trying to build a half dozen coal fired power plants in the face of broad opposition from the community when, for a fraction of the cost, they could instead pay to help people insulate their homes, change to more efficient air conditioners, and replace energy efficient lighting and save as much power as they plan to generate with the coal plants without any cost for fuel and harm to the environment from mining and emissions?

    For that matter, why don’t TXU’s customers (and the rest of us) take these steps ourselves, when the internal return on investment is many time what we can rationally hope to achieve in the financial markets, and in many cases is even higher than the interest borrowers with the worst credit ratings pay on their credit cards.  (Like most financial advisors, I hate debt, especially credit card debt, but even if you’re drowning in $30,000 of credit card debt at 25% APR, it still makes sense for you to buy a pack of CFL’s at $3 each on that high-interest credit card, and replace every incandescent light bulb in your house that you use more than 2 hours a day.)

    Here’s a blog which does a good job outlining the usual answers: lack of financing, perverse incentives, and disinterest on the part of people for whom energy is only a tiny part of the budget (all of which are true.)  He goes on to outline perscriptions that will undoubtably help to break down the barriers to the adoption of many Energy Efficiency measures.

    I see other barriers that lie behind these.  Not just a failure of normal market forces, but conceptual problems.   While energy in general is a fuzzy concept to most people, using less energy is even less tangible.  You just can’t drop energy efficiency on your foot.  You’re not even at risk of electricution from it.

    The pernicious consequence of systems of measurement is always that things we can’t measure go unnoticed.  If you have a hammer, everything looks like a nail, but even more insidiously, things that will never look like nails no matter how hard you squint dissappear from your vision altogether.  It is this psychological quirk that makes energy efficiency go unnoticed.

    What image comes to your mind when I say “wind power”?  If you’re anything like me, you probably had a image of a forest of giant wind turbine blades turning gracefully on the horizon like ballet dancers.  Or, you might be like my wife, who would also have an image of a wind farm, but thinks they are ugly (although not so ugly as the haze from a distant coal plant) despite recognizing their necessity.  She wishes they were painted to camouflage them into the background.   Whatever your attitude towards wind power, you probably saw an image.

     Now try “energy efficiency.”  It’s a lot trickier, isn’t it?  I think about energy efficiency all the time, the way a teenage boy thinks about sex (okay, maybe not quite that much), and even I can’t settle on an image.  My mind flashes from the act of replacing an incandescent bulb with a compact fluorescent lightbulb (CFL) to an industrial scale combined heat and power facility, to closing the blinds at night to keep the heat in.

    Not only is energy efficiency hard to picture, it’s also hard to measure.  To compute the energy savings from any activity, you have to establish a baseline: how much energy would you have used if you had not changed your methods.   Even in the simplest case of replacing a CFL, we don’t really know that the bulb we replace would really have stayed in the socket until the CFL breaks: A CFL can easily last 10 years, and by that time, we may be replacing all our bulbs with LEDs.  And that does not even begin to account for the effects on our HVAC systems.

    Is your mind spinning?  That’s my point.  It can be so hard to get our minds around all the impacts of energy efficiency that, for most people, the most people, it may actually be rational to waste a little energy in order to avoid the headache that trying to get their mind around efficiency may entail.

    The problem is, that decades of conserving brain power has left us as a society that wastes energy egregiously.

    My prescriptions, designed to make thinking about efficiency easier:

    1. Measure energy use at every opportunity.  Many Prius drivers report that the real-time MPG gauge on the dash causes them to change their driving habits to grive more efficiently.  Getting a Kill-a-Watt energy meter makes us think more about our next electronics purchase.   Getting to know your electric meter can also motivate you to track down wasted energy.  A radical idea: on new homes, the electric meter should be inside, along with the circuit breakers.  New meters can be read (and even turned on and off) remotely, so there is no reason any longer to have them on the side of the house where we never see them. 
    2. Another thing we need to measure is when we use our electricity, not just how much.  Wholesale electricity prices can vary from a few cents per kWh to 30 cents or more during peak consumption.  As we move to a grid based on renewable energy supplies, most of which are intermittent and non-dispatchable, we need to get used to paying the real-time price of the energy we’re using.  Wide-spread adoption of time of use metering will drive the invention and adoption of appliances that can adapt themselves to changing prices.  There are direct, immediate benefits to the system by shaving peak loads, but the real benefits will come when people adopt new ways of doing things and new devices that will cause our appliances to run and our devices to charge when electricity is plentiful, and runonly the most essential uses of electricity when it is scarce.   Xcel is currently doing a pilot study on Time of Use Pricing in Colorado.  The preliminary result are that the right pricing scheme encourages customers to change their energy use much more than they had anticipated… but it still would not be “economic” to change out meters for more sophitocated models capable of handling this sort of billing.  Their definition of “economic” almost certainly does not include the benefits of the creativity which realistic pricing would unleash. 
    3. Allowing utilities to profit from selling less rather than more.  This concept, known as decoupling, is covered well here.  It’s important to remove (or even reverse) the incentive of utilites to sell us more electrons when we really want them to help us use less.

    Finally, I do call this blog EE/RE Investing, so here are the sectors that I see benefiting from these recommendations as they are adopted:

    1. Companies selling advanced metering devices, and control systems that adapt to changing electric rates.
    2. Companies that sell building management systems.
    3. Energy storage technologies, such as as advanced batteries, flow batteries, and compressed air energy storage.
    4. Broadband over power lines technology, to handle the increased flow of information.

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    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

    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:

    Win-Win Transportation Solutions

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    Bill Ritter Inaugural address

    Colorado’s new Democratic Governor, Bill Ritter was sworn in today.  For environmentalists, it is a moment of rejoicing.  Sticking to his themes from the campaign, Ritter outlined his agenda, and the very first item was:

    “Let’s start by being bolder than any other state when it comes to renewable energy. Let’s commit right now to making Colorado a national leader … a world leader … in renewable energy. Let’s create a New Energy Economy right here in Colorado.”

    I couldn’t ask for anything more. 

    He also had some other quite sensible agenda items, such as health care for all Coloradans, something that I think is worth paying for, but which I simply hope does not end up exhausting his political capital.

    Here’s to a breath of fresh air (in more ways than one!)   

    The full text of his inaugural address follows the break.

    Read the rest of this entry »

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    Wal-Mart pushes CFLs: Update

    A month ago I wrote about Wal-Mart’s plan to sell 100 Million Compact Fluorescent Lightbulbs (CFLs) in 2007.  Yesterday, there was an excellent article in the NYTimes with some updates about their plans and early efforts. 

    My favorite parts:

    • In 2005, Wal-Mart sold 40 Million CFLs.  Sales in August 2006 were 3.94 million in 2006 vs. 1.65 million in 2005, so if the 40 million/ per year grew at the same ratio as August sales, total CFL sales at Wal-Mart in 2006 were 95 million.  I’ll guess that 2006 sales were more likely around 80 million, because the August month was probably chosen for the press because the growth rate was the most impressive.  However, that still makes 2007 sales of 100 million not a stretch, as the article implies.  My prediction: Wal-Mart will sell around 130-150 million CFLs in 2007, and they’ll be able to make another big PR splash by greatly exceeding their goal.  (I didn’t have these numbers when I wrote the other entry)
    • A GE exec was quoted anonymously as having said “Don’t go too fast. We have all these plants that produce traditional bulbs.” (This was in 2005, likely before GE’s touted EcoMaginationpush under Jeffrey Immelt)
    • The GE story also underlines Wal-Mart’s market power… GE will probably go along in the end, or Wal-Mart will just get their CFLs elsewhere, and undermine GEs sales of incandescents anyway.
    • Wal-Mart’s market power is also shown in the fact the Phillips, simply because WM requested it, renamed their line fo CFLs from “Marathon” to “Energy Saver.”  This involves a real sacrifice for Phillips, because they have probably invested millions of dollars in the Marathon brand, as well as having to change their packaging.

    Thanks to Stephen McNally for forwarding me the NYT article.

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    Top Ten Technologies for an Alternative Energy Future

    Note: These are just my favorites… if your favorite isn’t on the list, leave a comment… 

    10. Combined Heat and Power

    The muscle car of energy efficiency.  Combined heat and power isn’t sexy… it’s just using the “waste” heat from your powerplant for some useful purpose.  Like cooking your lunch on you car radiator, but using every bit of waste heat you can…  Combined heat and power can use 90% of the power in your fuel source for useful work.  And now you can have it in your home.

    9. Solar Chimneys

    They’re tall, they’re low-tech, and they’re baseload power.  They don’t pollute, and the fuel is free.  What’s not to like?

    8. Molten salt thermal storage

    It’s cheaper to store heat than electricity, and molten salts can store a ton of BTu’s very cheaply.  And concentrating solar power can produce a ton of heat… without pollution or fuel.

    7. Light Emitting Diodes (LEDs)

    More lumens per watt… now that’s energy efficiency. 

    6. Vehicle to Grid

    Our energy efficient cars can make the electric grid work better.

    5 & 4.  Cellulosic Ethanol and Biodiesel from Algae

    The two technologies that have real hope of replacing gasoline and diesel as liquid fuel for our cars…  We’ll still need massive efficiency gains and Plug-in-Hybrids to reduce our total fuel use, but even with those, corn ethanol and biodiesel from traditional oil crops just can’t produce enough volume. 

    3. Time of Use pricing and Demand Side Management.

    Sometimes the best ideas are the simplest.  To make the best use of wind power, we can store power until it is needed, or we can give people incentives to use it when it is available. 

    Time of use pricing is also a great boon for solar, because solar energy tends to be available near times of peak demand.

    Finally, time of use pricing shaves peak demand, which means that we can delay building new fossil fired generation, while renewables get cheaper by the year.

    2. Terra Preta

    Discovered by aboriginals in Brazil, thousands of years before Columbus, mixing carbon into unproductive soils can make them much more productive… and the carbon stays there for thousands of years.  Using charcoal dust as a fertilizer not only holds the hope of a replacement for fertilizer based on fossil fuels, but it is also an easy way to sequester carbon.

    1. Compact Fluorescent Lightbulbs

    Where else can you get a 1000% payback with little or no risk?

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    Conversation with a wind skeptic

    I’ve been having a long conversation with a wind skeptic who responded to my Gust Ceiling entry.    While the rest of us are thinking about ways to overcome the intermittentcy problem with wind, this Rucio is dismissing it out of hand because of that problem. 

     See the comments for our conversation.  We RE enthusiasts need people like this Rucio/Eric Rosenbloom to make sure that we’re not the ones in la-la land.  To paraphrase Paul Newman, if you look around and can’t tell who the lunatic fringe is, you’re it.

    I’d like to point out that I jumped to a couple of conclusions myself, which he points out… I left these comments in, even though they do not make me look great.  They are there because I want people who are trying to make up their mind to know that I have not just invented myself a straw man in order to look good.

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    LED lamps still need work

    A study from the Department of Energy compared the claims of LED downlights from four undisclosed manufacturers.  (See article in EERE Network News)  Although there is no question that individual LEDs perform better in terms of light emitted per watt, these downlights which incorporated them actually performed worse than fluorescents.

     LEDs are one aspect of energy efficiency that I think has a ton of potential, mainly because people aren’t nearly as excited about them as they are about renewable energy.  I think LEDs are much closer to being truly economic without subsidies than is PV, and the fact that they don’t get nearly as many subsidies, and have to stand on their own makes for much healthier companies.

    In combination with photovoltaics, they are already economic in off grid outdoor lighting applications such as those solar garden lights we started seeing a few years ago.  They are also in use in many bus and train shelters… as well as flashlights, traffic signs, and stoplights(which are on so much they don’t have to be off-grid.  They also take advantage of the fact that LEDs are much better for color than white light.) 

     And, ‘Tis the season, so we shouldn’t forget about LED Christmas lights!

     But even in the most economic sectors, there are always hiccups when developing new technology, and it’s often the problems no one thought to anticipate.  That’s why it’s important to diversify, and only invest cautiously in new technology.   There are at least ten public companies I know of working on LEDs in one form or another… and some will inevitably fail, either in commercialization, or in cut-throat competition.  China is producing a lot of cheap LEDs now, which has caused problems for a lot of domestic LED companies.

    In short, while I’m as bullish about LEDs as any other clean energy technology I can think of, it’s worth using the opportunity of studies like this one out of DOE to remind ourselves that there will be inevitable bumps along the way.


    1/4/7: I just ran across a very interesting survey on Treehugger (via EcoGeek) on the lumens/watt of all sorts of electrical lighting.   Turns out that the best light depends on your application, and neither CFLs nor LEDs are the most energy efficient forms of lighting out there… they’re not even second.  I won’t  spoil it, take the quiz, and read some intersting comments after.

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    Clean Coal?

    Coal powered utilities have a “solution” to global warming caused by carbon dioxide, and they call it “Clean Coal” and “Carbon Sequestration.”  To many environmentalists, clean coal is simply an oxymoron.

     Also known by its technical name, Integrated Gasification Combined Cycle or IGCC, this new type of electric generator heats coal in the presence of oxygen, producing carbon dioxide and hydrogen gas, and leaving a bunch of the nasty stuff found in coal (mercury, sulfur, etc.) which would be released into the air in ordinary coal combustion plants stays (mostly) put.  The hydrogen is separated off by absorbing the carbon dioxide with an amine solution (other methods are in the works, but this is the only one in use now), and the hydrogen is burnt in a modified turbine to produce electricity.

    Compared to conventional pulverized coal plants, this is an elegant solution.  There is much less of a problem with the traditional pollutants associated with coal (mercury, particulates, etc.), the whole process is slightly more efficient than pulverized coal, producing slightly more electricity per ton of coal burned (and carbon dioxide produced), and there is the theoretical possibility of capturing the carbon dioxide and putting it somewhere where it won’t enter the atmosphere and heat our planet (i.e. “sequester” it.)

    On the downside, in the three IGCC plants currently in existence, there has been no attempt to capture CO2, for the simple reason that we don’t have any place good to put it, and any attempt to do so would require a significant portion of the energy output of the plant (I’ve heard numbers ranging from 10% to 30%), meaning that a lot more coal would have to be burnt just to deal with the carbon dioxide emissions.

    FutureGen proposed design renderingXcel Energy, is with grants from the federal govenrment and other partners, is planning a 300 to 350 MW IGCC plant in Colorado, which will be the first in  the United States, as well as the first anywhere in the world to attempt carbon sequestration (most likely by taking some of the carbon dioxide and injecting it down old oil wells, a practicepioneered at the Wyburn oil field in Canada.  Some other methods of sequestering carbon dioxide, such as injecting it in brine formations, have shown the potential to form acid, leading to worries that the acid will breach the geologic formation, leading the carbon dioxide to escape.

    In addition, according to an interesting article Can Coal be Clean? in the Nov 30 Economist, IGCC plants are also much higher maintenance than the old pulverized coal plants.  So is it any surprise that among the 150 new coal plants now being planned, only one or two are IGCC, and of those, only FutureGen is actually planning to test all the technologies that the utilities are holding up as the “solution” to carbon dioxide emissions, while the rest are just more business as usual.

    Should we hold out much hope for IGCC with carbon sequestration?  Maybe in 30 years, after all the kinks have been worked out.  Carbon sequestration today is at a similar level of technological maturity as wind was in 1980.  Now that wind and solar have been generating electricity for 30 years, and are proven to work well, that’s where we should be focusing our efforts. 

    I applaud FutureGen as a research project, but if we’re looking for a carbon neutral place to get our electricity today, IGCC with sequestration is a distraction.  However, if it can be made to work, I hope to be around when we have IGCC with carbon sequestration, fuelled by biomass, for a net carbon-negative power source.

    Some numbers:

    According to this testimony before the US house of Represnetatives, cost of electricity from IGCC without sequestration is $46 to $49 per MWh, and cost to sequester CO2 is estimated at $3-$10 a ton, depending on method an geology.  At treehugger, I found an article which implied that IGCC produces about 1 ton of CO2 per 5 MWh, which would make the cost of sequestration between $.60 and $2.00 per MWh, or .6 to 2 cents per kWh.   We do need to consider the fact that some of that $3-$10 per ton cost comes in the form of cost of electricity, so the calculation of cost of energy becomes depends on the source of electricity for sequestration, and how much of that carbon is sequestered.  None of this includes the cost of carbon capture, which would likely be low if only a fraction of the CO2 were captured, but become more expensive as the 90% or so theoretical limit is approached.  60% capture seems to be a number that the people who study this think would not be onerous in terms of cost.

     There is an incredible pile of information to sort through at

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    Wal-Mart pushes CFLs

    A few months ago I blogged about Wal-Mart‘s energy efficiency push.  I predicted that Wal-Mart would be one of the first mass distributors of E85 ethanol, and I have since noted that compact fluorescent lightbulbs (CFLs) have been given increasingly prominent displays in their stores, and that they have an excellent selection of styles.  (When I moved into an new office a couple months ago, one of the first things I did was tell my landlord about how much money he could save by switching to CFLs (about $25 a month for a $70 investment in this case.)  He later asked me where he could find the candelabra bulbs (the ones with the tiny bases shaped like a flame,) and I immediately told him: Wal-Mart.  He’s an employment lawyer, and does not shop at Wal-Mart as a matter of principle… He still has not replaced the candelabra bulbs, so I’m going to give him a pack for Christmas (bought somewhere else.)

     Since I wrote the blog, Wal-Mart has announced that they’re exploring selling E85 (admittedly not the greenest renewable fuel, when made from corn, but rolling out distribution for E85 will make cellulosic ethanol easier to introduce.)

    Now they’ve annouced that they are going to try to sell 100 Million CFLs in 2007.  Considering that replacing wasteful incandescent lightbulbs with CFLs is the best financial investment I know (the money saved on electricity pays for the bulbs many (as much as 25) times over), as well as being the most effective way most people can reduce pollution and greenhouse gas emissions (#2 is using energy efficient transport), I sincerely hope they beat their goal.

    I’m particularly pleased by the fact that they will be introducing interactive displays and educating employees about how to choose.  The number of types and wattages (as well as color temperatures) of CFLs can be baffling to the unitiated, and people should be guided towards buying Energy Star bulbs for their greater reliability (If you have ever had anyone tell you that they tried CFLs but then switched them out because they stopped working, you can be almost certain that they weren’t using Energy Star bulbs.)

    So it sounds like great news.  How great?  It’s hard to know because they’re not saying how many CFLs they were selling before.

     Thanks to Phil van Hake for sending me this article.

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    Vision of a sustainable energy future

    I’ve been meaning to write an article outlining a vision of a sustainable energy future, where biomass is converted into fuel and electricity through pyrolysis and the waste product, carbon is used as a fertilizer a-la terra preta to produce more biomass.  The good news is I don’t have to.  The Engineer Poet did, and it’s just part of a much broader vision you’ll find here.   He also goes into a great discussion of transportation technologies and efficiency which would never have made it into the article I’d write.  I like it when other people crunch numbers, so I don’t have to.

    Give yourself a half hour to read the whole article.  It’s worth it.

    ( Terra Preta: I got a comment from Erich J Knight on terra preta here that went into a lot of depth, but I deleted it by mistake.  Forturnately, he says pretty much the same thing in his blog.  I first heard about terra preta from Ron Larson, chair of the American Solar Energy Society, who is very active in the local (Denver) renewable energy scene.  If you haven’t heard about terra preta, and are concerned about globabl warming or soil fertility without fertilizers from fossil fuels, it’s worth looking into.)

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    Five minutes with Xcel’s Dick Kelley

    Richard C. Kelly

    Dick Kelley, the President, CEO, and Chairman of the Board of Xcel Energy spoke to the board and invited guests of Western Resource Advocates last Friday.  I was invited as a supporter of WRA.


    His speech was widely reported in the press because he called for national regulation of greenhouse gas emissions.  The AP story emphasized Kelly’s shift from being an environmental skeptic to calling for national Carbon emissions regulation.  This is a big shift, and a giant step for a utility, but Kelly is not so much of an environmental advocate as he might sound.


    I had a short conversation with him before dinner.  After we introduced ourselves, I told him I’d been making his life harder recently at the Colorado PUC.  Like anyone who’s been successful in business, he didn’t miss a beat, and told me that it was great, and the more people’s input we had, the better.


    He said that Xcel had been opposed to Amendment 37 because of the cost of the solar set-aside, a position I’m actually sympathetic with.   After all, is it better to have 1 MW of solar photovoltaics on people’s roofs, or 20 MW of Wind?  When you look at the subsidies needed to get people to install PV (which is an Amendment 37 requirement), we could probably get 20x as much wind energy onto the grid for the same cost.   It’s not that wind cost 1/20 as much as solar, but since the price of electricity from wind is comparable to the price of coal, it does not take much to get a lot of wind, while solar needs to be heavily subsidized.


    What I really would have liked in A37 was an allocation for Demand Side Management (DSM) and energy efficiency.  If the same incentives could have gotten us 20 MW of wind or 1 MW of solar, it could also have gotten us 40 MW of DSM and energy efficiency.  (none of these numbers are precise… it’s hard to tell what an incentive will accomplish until it is implemented, but we do know that DSM is cheaper than wind is cheaper than solar.)  But energy efficiency was not on the table when A37 was being written… polling data said that adding “energy efficiency” to the bill dropped popular support by so much that we couldn’t have gotten it passed.


    Dick Kelley also told me that Comanche 3 (a new 750 MW coal plant) would be the last conventional coal plant that Xcel would build.  I told him Comanche 3 would be fine with me, if they’d just shut down Comanche 1 and 2 (a couple old, less efficient plants at the same site.)  That was an option that’s clearly off the table, but he did say Xcel needed to find a way to clean up the emissions of those plants.  I suggested wood chips, like Aquila is doing at their  Clark Generating Station in Canon City.  By co-firing wood and pine needles from necessary forest thinning, Aquila is able to reduce net CO2 emissions, as wel as NOx, SOx, and Mercury.

    I mentioned the option of hybridizing concentrating solar thermal power (CSP) with existing coal plants.  He didn’t really understand the concept, and thought I was talking about photovoltaics.  I’m not sure I was able to explain myself well.  Put simply, when heat is available from the sun, it can be used to displace heat from coal (or natural gas) in an existing generator.

    Kelly also said he’d like to raise wind to 20-25% of generation, but after that they’d have to see what the effect on reliability of the grid would be.  I brought up the idea of Pumped hydro or CAES.  He didn’t seem familiar with the fact that Colorado’s Big Thompson Project could be adapted for pumped hydro fairly easily.  As he said, new big hydro is not going to happen.  Which is all the more reason for adapting out existing reservoirs for energy storage with pumped hydro.

    I was encouraged that he has recognized that Carbon Emissions are a massive problem, and that the utilites, who are the biggest emitters of carbon, are going to have a big part in the solution, but discouraged that he knew so little about several pieces of the solution that have great potential to be quickly viable.

    Xcel likes wind, but is not looking at new ways to increase how much they can put on their system… they’ll just go to 20-25% and see what happens.  They’re pursuing IGCC (Internal Gasification Combined Cycle a.ka. “Clean Coal”) with carbon sequestration in a pilot plant, which many environmentalists feel is just a distraction from renewable energy, pointing out that no one has ever done any sort of sequestration on a large scale.  To me, that is an argument for IGCC with Carbon Sequestration, on a small scale: let’s give it a try and see if we can make it work or not.

    IGCC is a lot better than one of the other ideas that Kelly brought up in his speech: he thinks that part of the solution will be nuclear power.  Nuclear power is indeed carbon neutral, but it requires diminishing uranium supplies, or the use of breeder reactors which make plutonium, an element which is not only extrememly toxic, but also an excellent material for making nuclear bombs.  We still haven’t figured out what we’re going to do with the waste from our existing reactors… until we do that, I think it’s crazy to look into building more.  And considering the real threat of terrorism, a nuclear reactor or wastepile makes a much better target than a solar array or wind farm.

    When it comes to Kelly’s call for national regulation of carbon emissions, it’s a great step in the right direction, but it was a far cry from calling for a carbon tax (which economists think would be the most effective method of carbon regulation.)  Kelly knows global warming is real, and he knows that our politicians are going to do something about it.  By calling for national mandatory regualtion (but not a tax) he’s trying to shape the debate to come out in a way that Xcel will find easier to deal with. 

    With a little more education about alternatives such as CSP, and ways to make the grid able to accept more intermentent resources (Time of use pricing, DSM, and energy storage), he may come to realize that Xcel has lots of ways to live in a carbon taxed or carbon limited world.  And he seems willing to listen; so if you get his ear for five minutes, try to make the most of it.

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    I spent much of the last week at the 25x’25 “Twenty-Five by Twenty-Five” second implementation planning meeting.  25x’25 is a coalition advocating the vision that “By 2025,
    America’s farms, forests and ranches will provide 25 percent of the total energy consumed in the
    United States, while continuing to produce safe, abundant, and affordable food, feed and fiber.”   That’s at least 25% of our energy from renewable sources.

                25x’25 is an open alliance; the participants are the organizations who have endorsedthe 25x’25 vision outlined above.  These include 18
    US Senators, 91 Congressmen, 18 state governors, 4 state Legislatures (including
    Colorado).  I attended the conference as the representative of the
    Colorado Renewable Energy Society. 

                I highly encourage my readers to endorse 25x’25 (you can endorse as an individual, or as an organization, or both.)  Your endorsement helps them demonstrate that a broad swath of Americans support the 25x’25 vision, and will help convince the US House and Senate to pass the concurrent resolutions for 25% of the nation’s energy supply to come from renewable sources.

    We are currently in the process of coming up with our vision of how
    America can achieve 25x’25.  Any endorsing individual or organization can participate.  The goal is agree on a series of recommendations (the Implementation Plan) as to how we can achieve the 25x’25 vision.  When the Implementation Plan is complete, which we plan to achieve by January, in time for the next congressional session, all partners will have a chance to endorse the plan.

    Since the whole process is by consensus, and the 25x’25 goal is an ambitious one, it would be easy to believe that the Implementation Plan will turn out to either be watered down to the point where it does not say anything, or end up endorsing so many points of view that it would be ludicrous to call it a plan at all.

    Having now participated in two conference calls and two days of face-to-face meetings, I’m happy (and somewhat surprised) to report that we’re actually managing to form a consensus among a large group of people and organizations you would not expect to get along under ordinary circumstances.  For this, I can only shake my head in wonder at the diplomacy and perseverance of the Steering Committee.  They managed, though two days of what could have turned into a verbal free-for-all, to keep us all focused on the need to work together to reach the very ambitious goal we’ve all agreed upon.  (In that same spirit, and understanding that many of the participants have been willing to voice their true opinions and step away from the party line, I will not name any names here.  This also has the advantage of covering for my lousy memory for names.)

    How do they do it?  By keeping us focused on the fact that we all agree on the goal: 25% of our nation’s energy from renewable sources by 2025, and reminding us that we’re never going to get there by half measures.   The second thing they did was keeping the discussion focused on “Yes, if…”: continually reminding people to stay in the mode of working together, and instead of thinking about all the reasons that something was impossible to accept, to instead say “I could accept that if it were this were also to happen.”

    So my kudos to the people I met on the steering committee.  I was impressed.

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    You Can’t Hide from Peak Oil in Big Oil

    Last week, Russian Natural Resources Minister Yuri Trutnev signed an order to cancel part of Shell’s Sakhalin-2 license on environmental grounds.  Russia is also pressuring Exxon about cost overruns in a related project.  A triumph for environmentalists over Big Oil?  Hardly.

    shell.jpgMost analysts agree that this is an attempt by the Russian government to renegotiate an oil and gas deal struck when prices were low.  Thinking back on what Russia did to Yukos, and Chavez forcing foreign oil firms to renegotiate contracts in Venezuela, the trend is clear:  Countries rich in fossil fuels are increasingly re-writing the rules to their liking, with little regard to the desires of foreign capital.

    Given that 90% of the world’s oil and gas is controlled by state owned firms, private companies have little bargaining power, yet desperately need access to new reserves. 

    Big Oil needs Russia more than Russia needs big oil: they’re going to have to settle for a much smaller take than they negotiated 10 years ago.  As oil prices rise in response to the peaking of world oil output, realpolitik will continue to trump contracts.  Western, publicly held oil firms will be the losers, as will their investors.

    How can we invest to protect ourselves from rising energy prices, if Big Oil is at the mercy of every oil-rich dictator around the world?   I see two choices: fossil fuel reserves in western countries: coal mining companies and tar sands, or renewable energy sources.

    Tar sands and coal both have the problem of causing high greenhouse gas emissions.  The process of extracting oil from tar sands releases 80kg of greenhouse gasses per barrel of oil extracted (and that is before the oil is used.)  The extraction of tar sands has caused Canada’s greenhouse gas emissions to increase 24% since 1990, despite the fact that they are obligated under the Kyoto protocol to reduce emissions by 6%. 

    Coal is also carbon intense.  So while both coal and tar sands are relatively safe from political risk due to opportunistic regimes, both are likely to become relatively less economic in the face of possible restrictions on greenhouse gas emissions. 

    Oil Shale is a boondoggle, and requires even more energy to extract than tar sands. 

    This brings us back to investing in renewable energy and energy efficiency companies, both of which will benefit from rising energy prices and restrictions on greenhouse gas emissions.  The problem here is that many of them are start-ups with little or no revenues, let alone earnings.  Right now, I like energy efficiency best, since many renewable technologies have been the subject of a feeding frenzy over the last year.  Although things have calmed down over the last couple months, energy efficiency is still more economic than most renewables, and subject to a lot less hype.

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