A giant underwater turbine which could form the world's first tidal power array has been deployed off Orkney. The 100ft-high 1MW (megawatt) Hammerfest Strom HS1000 device was installed by the European Marine Energy Centre (EMEC). It will now undergo tests in preparation for larger-scale production and deployment.
Scottish Power Renewables (SPR) hopes to use the design for a planned array in the Sound of Islay. The device has been developed by Hammerfest Strom, a company partly owned by SPR parent firm Iberdrola. Its substructure was constructed in the Arnish Yard, near Stornoway, in Lewis.
SPR intends to develop a 10MW tidal array in Islay after receiving planning consent from the Scottish government in March this year.
The HS1000 device, which SPR said could power the annual electricity needs of 500 homes, is expected to be fully operational in early 2012. The tests will also help to finalise the timetable for the Islay project, with machines being installed "as early as feasible" between 2013 and 2015.
Afghanistan's cabinet cleared the way for the war-torn state to sign a deal with China National Petroleum Corporation (CNPC) for the development of oil blocks in the Amu Darya basin, the president's office said yesterday. ...
The deal covering drilling and a refinery in the northern provinces of Sar-e Pul and Faryab will be the first international oil production accord by the government for decades. It marks the second major deal for China, after Metallurgical Corporation of China signed a contract in 2008 to develop the huge Aynak copper mine south of Kabul, due to start producing by 2014-end.
State-owned CNPC and joint venture partner Watan Group, a diversified Afghan company, will explore for oil in Kashkari, Bazarkhami and Zamarudsay, which are estimated to hold around 87 million barrels of oil. ...
Indian and Chinese bidders have been front-runners to develop Afghanistan's vast mineral deposits, valued at $3 trillion, worrying Western firms that have hesitated to invest.
While that Arizona-California relationship guarantees full employment for battalions of water lawyers, a far bigger problem looms: climate change. Models for the Southwest have been predicting a 4ºC (7.2ºF) increase in mean temperature by century’s end, and events seem to be outpacing the predictions.
We have already experienced close to 1º C of that increase, which accounts, at least in part, for last summer’s colossal fires and record-setting temperatures -- and it’s now clear that we’re just getting started.
The simple rule of thumb for climate change is that wet places will get wetter and dry places drier. One reason the dry places will dry is that higher temperatures mean more evaporation. In other words, there will be ever less water in the rivers that keep the region’s cities (and much else) alive. Modeling already suggests that by mid-century surface stream-flow will decline by 10% to 30%.
Independent studies at the Scripps Oceanographic Institute in California and the University of Colorado evaluated the viability of Lake Mead and eventually arrived at similar conclusions: after about 2026, the risk of “failure” at Lake Mead, according to a member of the Colorado group, “just skyrockets.” Failure in this context would mean water levels lower than the dam’s lowest intake, no water heading downstream, and the lake becoming a “dead pool.”
If -- perhaps “when” is the more appropriate word -- that happens, California’s Colorado River Aqueduct, which supplies water to Los Angeles, San Diego, and the All-American Canal, which sustains the Imperial and Coachella Valleys, will go just as dry as the Central Arizona Project aqueduct. Meanwhile, if climate change is affecting the Colorado River’s watershed that harshly, it will undoubtedly also be hitting the Sierra Nevada mountain range.
The aptly named Lester Snow, a recent director of California’s Department of Water Resources, understood this. His future water planning assumed a 40% decline in runoff from the Sierras, which feeds the California Aqueduct. None of his contemplated scenarios were happy ones. The Colorado River Aqueduct and the California Aqueduct make the urban conglomerations of southern California possible. If both fail at once, the result will be, as promised, the greatest water crisis in the history of civilization.
Only Patricia Mulroy has an endgame strategy for the demise of Lake Mead. The Southern Nevada Water Authority is, even now, tunneling under the lake to install the equivalent of a bathtub drain at close to its lowest point. At a cost of more than $800 million, it will drain the dregs of Lake Mead for Las Vegas.
Admittedly, water quality will be a problem, as the dead pool will concentrate pollutants. The good news, according to the standard joke among those who chronicle Sin City’s improbable history, is that the hard-partying residents and over-stimulated tourists who sip from Lake Mead’s last waters will no longer need to purchase anti-depressants. They’ll get all the Zoloft and Xanax they need from their tap water.
And only now do we arrive at the third act of this expanding tragedy.
The Age of Thirst: Act III
Those who believe in American exceptionalism hold that the historical patterns shaping the fate of other empires and nations don’t apply to the United States. Be that as it may, we are certainly on track to test whether the U.S. is similarly inoculated against the patterns of environmental history.
Because tree rings record growing conditions year by year, the people who study them have been able to reconstruct climate over very long spans of time. One of their biggest discoveries is that droughts more severe and far longer than anything known in recent centuries have occurred repeatedly in the American Southwest. The droughts of the Dust Bowl in the 1930s, of the 1950s, and of the period from 1998 to 2004 are remembered in the region, yet none lasted a full decade.
By contrast, the drought that brought the civilization of the ancestral Puebloans, or Anasazi, centered at Chaco Canyon, to its knees in the twelfth century, by contrast, lasted more than 30 years. The one that finished off Mesa Verdean culture in the thirteenth century was similarly a “megadrought.”
Jonathan Overpeck, a climate scientist at the University of Arizona who played a major role in the Nobel-Prize-winning work of the Intergovernmental Panel on Climate Change, tells me that the prospect of 130° F days in Phoenix worries him far less than the prospect of decades of acute dryness. “If anything is scary, the scariest is that we could trip across a transition into a megadrought.” He adds, “You can probably bet your house that, unless we do something about these greenhouse gas emissions, the megadroughts of the future are going to be a lot hotter than the ones of the past.”
Other scientists believe that the Southwest is already making the transition to a “new climatology,” a new normal that will at least bring to mind the aridity of the Dust Bowl years. Richard Seager of Columbia University, for instance, suggests that “the cycle of natural dry periods and wet periods will continue, but… around a mean that gets drier. So the depths -- the dry parts of the naturally occurring droughts -- will be drier than we’re used to, and the wet parts won’t be as wet.”
Drought affects people differently from other disasters. After something terrible happens -- tornados, earthquakes, hurricanes -- people regularly come together in memorable ways, rising above the things that divide them. In a drought, however, what is terrible is that nothing happens. By the time you know you’re in one, you’ve already had an extended opportunity to meditate on the shortcomings of your neighbors. You wait for what does not arrive. You thirst. You never experience the rush of compassion that helps you behave well. Drought brings out the worst in us.
After the Chacoan drought, corn-farming ancestral Puebloans still remained in the Four Corners area of the Southwest. They hung on, even if at lower population densities. After the Mesa Verdean drought, everybody left.
By the number of smashed crania and other broken bones in the ruins of the region’s beautiful stone villages, archaeologists judge that the aridifying world of the Mesa Verdeans was fatally afflicted by violence. Warfare and societal breakdown, evidently driven by the changing climate, helped end that culture.
So it matters what we do. Within the limits imposed by the environment, the history we make is contingent, not fated. But we are not exactly off to a good start in dealing with the challenges ahead. The problem of water consumption in the Southwest is remarkably similar to the problem of greenhouse gas pollution. First, people haggle to exhaustion over the need to take action; then, they haggle over inadequate and largely symbolic reductions. For a host of well-considered, eminently understandable, and ultimately erroneous reasons, inaction becomes the main achievement. For this drama, think Hamlet. Or if the lobbyists who argue for business as usual out west and in Congress spring to mind first, think Iago.
We know at least one big thing about how this particular tragedy will turn out: the so-called civilization of the Southwest will not survive the present century, not at its present scale anyway. The question yet to be answered is how much it will have to shrink, and at what cost. Stay tuned. It will be one of the greatest, if grimmest, shows on Earth.
The efficiency of conventional solar cells could be significantly increased, according to new research on the mechanisms of solar energy conversion led by chemist Xiaoyang Zhu at The University of Texas at Austin.
Zhu and his team have discovered that it's possible to double the number of electrons harvested from one photon of sunlight using an organic plastic semiconductor material. "Plastic semiconductor solar cell production has great advantages, one of which is low cost," said Zhu, a professor of chemistry. "Combined with the vast capabilities for molecular design and synthesis, our discovery opens the door to an exciting new approach for solar energy conversion, leading to much higher efficiencies."
Zhu and his team published their groundbreaking discovery Dec. 16 in Science.
The maximum theoretical efficiency of the silicon solar cell in use today is approximately 31 percent, because much of the sun's energy hitting the cell is too high to be turned into usable electricity. That energy, in the form of "hot electrons," is instead lost as heat. Capturing hot electrons could potentially increase the efficiency of solar-to-electric power conversion to as high as 66 percent.
Zhu and his team previously demonstrated that those hot electrons could be captured using semiconductor nanocrystals. They published that research in Science in 2010, but Zhu says the actual implementation of a viable technology based on that research is very challenging.
"For one thing," said Zhu, "that 66 percent efficiency can only be achieved when highly focused sunlight is used, not just the raw sunlight that typically hits a solar panel. This creates problems when considering engineering a new material or device."
To circumvent that problem, Zhu and his team have found an alternative. They discovered that a photon produces a dark quantum "shadow state" from which two electrons can then be efficiently captured to generate more energy in the semiconductor pentacene.
Zhu said that exploiting that mechanism could increase solar cell efficiency to 44 percent without the need for focusing a solar beam, which would encourage more widespread use of solar technology.
Despite all the talk of Solyndra and Chinese solar companies dumping their products onto the US market, the development of projects in the US continues apace. Driven by falling costs for photovoltaics and California's Renewable Portfolio Standard, many utility-scale projects are in the works in the southwest United States. These seven mega projects were culled from Solar Energy Industries Association research on all the major projects completed, under construction, or under development in this country.
Looking over that list, there are two large questions outstanding.
1) Will concentrated solar power projects, which work like normal power plants but substitute solar heat for fossil fuels to generate steam, remain competitive with PV projects? CSP projects will be able to accommodate energy storage easier than PV, but PV costs are falling faster. Keep an eye on that going forward.
2) Will utility-scale projects out in the desert make sense, generally, going forward? Right now, all kinds of models are springing forth for getting solar onto the roofs of individual homes and businesses. While the cost to install the solar panels is lower out in the desert and the solar resource is better, the plants have to compete at wholesale prices. Solar panels on roofs are competing with the retail price of electricity, which is considerably higher.
What's certain is that all of these kinds of projects have powerful backers and so in the near-term, we're likely to see many different experiments trying to find what works best.
For all of the chatter about smart meters, the conversation rarely wanders far from the realm of electricity. But action is starting to heat up in the smart gas meter market, and water isn’t far behind.
Last week, consulting group Capgemini announced it was chosen by Southern California Gas Company (owned by Sempra) to install more than six million smart meters in the next five years, the largest gas-only utility smart meter project in the U.S. SoCalGas’s project is part of a nearly three-fold increase in the penetration of smart gas meters worldwide estimated by Pike Research between 2010 and 2016.
“The gas grid is certainly a different animal,” said David DuCharme, vice president of Utility and Smart Energy Services at Capgemini. “The largest issue is safety and management.”
In Europe, there is already more activity in the gas market; the U.K. government has mandated dual gas and electric smart meters for every home and business by 2020. Italy will install smart meters for all of its commercial gas customers and most residents by 2016.
Yet in the U.S., gas metering has not received as much attention -- or as many federal dollars -- as electric smart metering. However, the challenge of managing gas smart grid data can be less complex than electric meter data management, according to DuCharme. As prices continue to drop for the smart meter market, this will benefit the gas market, as well.
Like their electric brethren, gas utilities have struggled with integrating IT and OT when implementing the new metering systems. Capgemini, which has doubled its accounts in the smart energy space to 40, is finding increasing success with gas utilities. In the case of SoCalGas, about 30 different vendors will provide the meters; Aclara is providing the MDM system.
Water is also on the horizon. “The cost of efficiently managing infrastructure in the gas and water industry is extremely important,” said DuCharme. For those who think the electric grid in the U.S. is aging, the water infrastructure in much of the world is downright elderly. One study from Frost & Sullivan estimates the European smart water meter market will be worth $20 billion by 2020 and will see double-digit growth in the next decade.
People grow a lot when they are faced with their own mortality. I learnt never to underestimate someone's capacity for growth. Some changes were phenomenal. Each experienced a variety of emotions, as expected, denial, fear, anger, remorse, more denial and eventually acceptance. Every single patient found their peace before they departed though, every one of them.
When questioned about any regrets they had or anything they would do differently, common themes surfaced again and again. Here are the most common five:
1. I wish I'd had the courage to live a life true to myself, not the life others expected of me. ...
2. I wish I didn't work so hard.
This came from every male patient that I nursed. They missed their children's youth and their partner's companionship. Women also spoke of this regret. But as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence. ...
3. I wish I'd had the courage to express my feelings. ...
4. I wish I had stayed in touch with my friends. ...
Energy Minister Martin Ferguson’s long-awaited energy white paper — released yesterday in draft form — adopts a peculiar approach to domestic nuclear power.
As befits the product of a Labor government, it makes clear nuclear power is off the agenda for the time being. “The Gillard government unambiguously does not support the use of nuclear energy in Australia, noting that at present there is no necessary social consensus over this technology nor is there currently a compelling economic case …” the draft says.
If you subscribe to all those theories about how Ferguson is a secret agent of the uranium industry, you might almost see in that phrasing an attempt to suggest that, but for the lack of a “social consensus”, nuclear power would be on the table for consideration.
But there’s more: the draft goes on to suggest that, in the event “new low‐emissions baseload energy or energy storage technologies” can’t be commercialised over the next 15 years, a long-term switch to nuclear might need to be reconsidered. And in doing so, the draft is realistic:
“Given the long lead times for plant approval and construction and for development of appropriate regulatory frameworks, this would necessitate a decision to move ahead considerably in advance of expected deployment — lead times would be at least 10 years, with 15 years more probable. If this were the case, such a decision would need to be taken by the latter part of this decade if deployment was required by 2030 or 2035.”
That is, to get a domestic nuclear power industry up and running by the 2030s we’d have to be making decisions in the next few years about developing a skills base and a regulatory framework and starting construction on reactors that on average take nine years — but can take up to 20 — to build.
But there are some flaws and inconsistencies in the draft’s analysis of the issue.
It uses International Energy Agency data to argue that global use of nuclear power will increase from 6% to 7% over the next 25 years. “The Fukushima nuclear incident in Japan in 2011 is not expected to significantly affect nuclear growth in the medium to long term, although some countries may be prompted to diversify their energy base with natural gas, coal and renewables,” the draft concludes. But as we pointed out back in May, Fukushima has prompted several countries, including India and China, to pause and review their nuclear industry development plans, or in some cases abandon nuclear power altogether.
Moreover, nuclear power will actually decline as a source of power in the overall global energy mix because most of the world’s 439 nuclear reactors were built decades ago and are now nearing the end of their life cycles. In January, there were 60 new reactors under construction worldwide — nowhere near enough to replace the reactors that will be shut down over the coming decade. Nuclear power is an ageing, shrinking energy source globally.
That’s a mere detail, though, compared to the strange twist in logic the draft uses about nuclear power. The draft commendably urges state governments to privatise energy generation and distribution assets:
“The Australian government notes that government ownership of energy assets may act as a barrier to effective competition, particularly where new entrants may not have sufficient certainty around their ability to compete with public businesses in the energy markets. This can arise from private investors not being certain that the decision‐making by government businesses is fully commercial and that the projected returns are in line with the risks they are bearing, or from the potential for governments to intervene to deliver particular budget or reliability outcomes. An appropriate focus should be given to ensuring competitive neutrality in the interim, with continued privatisation remaining the preferred policy goal.”
Well put. This elicited the odd sight of the notionally free-market Labor Queensland and Liberal NSW governments angrily rejecting the idea of privatisation. But that logic vanishes when it comes to its proposals regarding nuclear power. Nuclear power is so astonishingly expensive to construct — it is easily the most expensive possible form of power generation, with sources such as Moody’s rating agency and The Wall Street Journal estimating construction costs at $7000-8000 per kilowatt-hour — and reactors take so long to build and are so prone to cost blowouts that nuclear power is beyond the capacity of the private sector to fund. Instead, either direct government funding or government loan guarantees for billions of dollars are critical to reactor construction.
That is, while the draft paper urges governments to get out of power generation and distribution, its “fallback” option of nuclear power requires a massive intervention by government in the power generation sector.
This is why it’s particularly amusing to see federal Coalition types such as Greg Hunt spruiking nuclear power when the two things critical to it — a carbon price, to make coal-fired power more expensive, and a heavy government role in power generation — are anathema to them.
Subsidies or loan guarantees aren’t the only form of state intervention when it coms to nuclear power. The costs of cleaning up the aftermath of a nuclear catastrophe are potentially huge and the subject of greater focus since Fukushima. “What is changing is our view of the sheer magnitude of liability associated with an event risk occurrence,” Moody’s concluded in April this year, while noting that the industry had an overall strong safety record. Moody’s had already issued a warning about the financial risks associated with nuclear power in 2008. Governments are ultimately the ones who will pick up the bill for cleaning up after nuclear accidents.
And none of that factors in the cost of storing nuclear waste securely for tens of thousands of years.
There’s one other flaw in the draft’s reasoning on nuclear power. Nuclear power has lower operating costs once it is built than many other forms of power generation — at least assuming the cost of uranium doesn’t get out of hand. That means the overall costs of nuclear power — combining construction and operation — are more competitive than would be the case based on construction alone.
But according to a 2008 US analysis by financial advisers Lazard, nuclear power overall is more expensive in megawatt-hour terms than wind, biomass, geothermal and gas combined-cycle, and about the same cost as solar thermal. Of these, geothermal and biomass are both baseload power sources, and baseload solar thermal (which also high construction costs, but even lower operating costs than nuclear) is already in operation in Spain. The draft’s carefully-constructed scenario in which renewable baseload capacity can’t be commercialised at a cost below that of nuclear power already looks highly improbable.
All of which begs the question of exactly why the draft makes such an effort to propose a backstop role for nuclear energy?
Having a few electric vehicle charging stations here and there isn't a big deal. But if they ever become common in cities, they'll be an eyesore, with their long, tangled black cords clumped onto their sides or sprawling across parking spaces to the outlet on the side of a car. Charging stations could also be a tempting target for vandals.
A much more elegant solution would be to bury inductive chargers under parking spots, a concept that Daimler has started testing. The chargers could be invisible and protected from vandals. And they could make charging easier—just pull into a parking spot, and the car can start charging.
Daimler, along with Conductix-Wampfler, a company based in Germany, has only recently started testing cars equipped with the inductive charging coils. But the initial results look positive.
The system is 90 percent efficient, which isn't as good as charging with a cable, but is better than some other inductive charging systems. The companies say that when you count efficiency losses within the car, the system is almost as good as plugging in.
In initial tests, after two or three practice runs, drivers have been able to successfully park their cars so that they're centered over the charging coils.
An object detection system is supposed to avoid the potential problem of the buried coils heating up a piece of metal left on the road. The prototypes are based on a wireless charging system developed for electric buses that has been operating since 2003.
It will be interesting to see how the cost of the system compares to conventional chargers, and whether it will still be necessary to install a post for communications gear, to allow drivers to pay for the charge with their credit cards, for example. Ultimately, cities will have to decide whether the better looks and convenience are worth the sacrifice in energy efficiency.
Australia needs around A$240 billion ($243 billion) invested in the next two decades in the gas and electricity sectors for generation, transmission and distribution to meet future energy demand requirements, Minister for Resources and Energy Martin Ferguson said Tuesday, as he released a draft of a "white paper" on energy policy.
"Over the next two decades, Australia will require massive investment in the gas and electricity sectors," Ferguson said. "We need sound regulatory frameworks and confidence from investors to ensure that the necessary investment is delivered, and the white paper seeks to deliver this stable framework."
The draft will now go through a period of public consultation running to mid-March, with the government intending to release the final energy white paper around the middle of 2012.
Along with the draft on the nation's new energy policy, the government also released the 2011 National Energy Security Assessment and its Strategic Framework for Alternative Transport Fuels.
The government is also proposing that a strategic review of national energy policy be undertaken every four years, with a review of national energy security every two years.
The previous energy policy paper was released seven years ago, and since then Australia's energy exports have increased from A$24 billion a year to around A$69 billion, Ferguson said. He also noted that investments in the energy export sector have grown "at an unprecedented scale in the last seven years, with over A$140 billion committed to LNG projects alone since 2007."
That along with developments in the coal and uranium sectors, as well as increased investments in electricity networks that have resulted in rising electricity costs, all point to the need for a new national energy policy and procedures to keep it resilient and up-to-date, he said.
Along with the policy papers, the government also said it would no longer proceed with the introduction of emissions standards or carbon capture and storage requirements for new coal-fired power stations.
THE Gillard government has dumped an election promise to introduce rules to limit greenhouse gas emissions from new power plants. Launching a long-awaited energy policy paper, Energy Minister Martin Ferguson said the proposed emissions standards - which Prime Minister Julia Gillard said would mean an end to the building of ''dirty'' coal power plants - had become redundant, given Australia was introducing a carbon price. ...
Climate Institute chief executive John Connor called the decision to dump the emissions standard ''short-sighted.'' Energy Supply Association of Australia acting chief Clare Savage welcomed the focus on encouraging the states to deregulate retail prices.
The energy road map came as the owners of the Latrobe Valley based brown-coal fired Yallourn power station wrote down the generator's value by $350 million as a result of Labor's carbon price. Yallourn - previously valued at $1.7 billion - has been put forward for the first stage of the scheme to pay to shut heavy-emitting power plants.
The federal government will lead a renewed push for the privatisation of state electricity assets after warning the country urgently needed energy market reform and huge investment to meet power demand at home and abroad.
Energy Minister Martin Ferguson, unveiling a draft energy paper, said the government would also focus on developing the country's vast energy resources - particularly gas - and speeding clean energy projects after the recent passage of the largest carbon price scheme outside Europe. "Over the next two decades, Australia will require massive investment in the gas and electricity sectors, around $240 billion in generation, transmission and distribution," Mr Ferguson said today.
"The White Paper also focuses on the next round of energy market reform, including further privatisation of energy assets and the removal of retail price regulation to increase efficiencies and remove distortions in markets that deter private sector investment."
To help drive fresh investment to replace Australia's ageing coal-fired power stations - many of which date back to the 1960s - Ferguson also announced the government would no longer apply emissions standards for new coal power stations following the passing of carbon price laws last month.
Australia is one of the world's worst per capita polluters, due to its reliance on coal-fired power for 80 percent of its electricity needs. Privatisation efforts have stalled in the face of resistance from consumers and state governments.
The conservative government in New South Wales state, which has an economy larger than South Africa and Thailand and is responsible for a third of the country's GDP, said last month it would proceed with a controversial privatisation of power assets expected to reap $5 billion, but would retain ownership of the transmission network.
Ferguson complained ahead of the white paper that construction of new power stations had plunged, blaming investment uncertainty on threats by resurgent conservative rivals to unravel the carbon scheme if they won 2013 elections.
Bureau of Resources and Energy Economics figures show just two wind projects worth $488 million have been completed in the past year. In 2009, 17 projects worth almost 10 times that amount were finalised.
Ferguson ruled out domestic development of nuclear power, although he said the debate would continue as long as Australia remained committed to reducing carbon emissions.
The ABC reports that the Greens don't think much of the paper or Ferguson's constant pushing of fossil fuels and nuclear power (not matter what the cost) over renewable energy - Government pushes states to privatise power.
Prime Minister Julia Gillard has consistently said the Government would not embrace nuclear power, but Mr Ferguson continues to argue Australia may one day need to consider it. "Nuclear for Australia is always there as an option. We don't have to invest in research and development and innovation on that front, other nations are the specialists," he said.
Greens senator Christine Milne says she is not surprised but is disappointed by Mr Ferguson's stance.
She says the white paper focuses too much on coal and gas and not enough on renewables. "Martin Ferguson is a big supporter of nuclear, he's the one who's pushed the ALP to change its policy on uranium exports to India," she said. "He keeps saying that if renewable energy was to fail then we'd need nuclear and we need to make that decision in the coming decade, but the fact of the matter is he talks down renewables at every turn."
Giles Parkinson at The Climate Spectator has some thoughts on the white paper (unlike the rest of the media, the CS actually interprets the announcement and makes some sensible commentary) - Australia's great big energy challenge.
The biggest weakness of the draft energy white paper released this morning by the federal government is not immediately obvious – it’s found on page 269 of the 291-page report. It reveals that the data used by the Department of Resources and Energy for its energy modelling is already out of date.
In a world that is preparing for a dramatic shift in energy sources, a transformation to renewables, smart grids and electric cars – scenarios not invented by green-spinning NGOs, but by the International Energy Agency and the world’s leading industrial groups – Australia’s energy bodies cling grimly to the belief that not much will change, that fossil fuel and its attendees (carbon capture and storage) will continue to dominate.
The white paper acknowledges the existence of the IEA and other international reports, but relies on modeling provided by the likes of Treasury, the Australian Energy Market Operator and its own Bureau of Resource and Energy Economics, which predicts that Australia will have between 20.5 per cent and 22.2 per cent of renewables by the year 2030, barely more than its 20 per cent target in 2020.
How does it get this so wrong? By relying on modeling that predicts technologies such as solar PV will fall to a cost of around $220/MWh by 2035. Little wonder, then, that it thinks that solar will account for just 1.3 per cent of generation by 2030. The IEA, however, notes that the cost of solar PV has already fallen to between $160-$230/MWh, and will fall to $50-$100 by 2035, when it expects solar to be producing one fifth of the world’s energy. China thinks solar PV will be as cheap as coal by 2021 and its growth will boom. Australia’s white paper predicts small-scale solar PV will cease to grow after 2030.
This is important, because the inability to get a grip on the rapidly changing price of technology and their developments has been at the core of some of the lousiest energy policy decisions in this country in recent years – notably the NSW solar feed-in tariff, and the structure of the solar multiplier by the federal government. Given that these cost declines are accelerating, and now reaching a point where they compete with other technologies, it seems that there is a huge risk of more blunders when planning for the future. Given that minister Martin Ferguson says that more than $200 billion will be spent in the next two decades on Australia’s energy needs, there is much at stake.
That’s the negative part of the white paper – so just ignore their forecasts. However, it's the assessment of the current state of the energy industry which is more interesting, and has the potential to change the nature of the energy debate in this country, which it clearly seeks to do: for the first time the government has put together a significant document that underlines some of the home truths about the energy industry that many in the sector try to hide and many in the media choose to ignore. The most significant of these statements, particularly in the context of the current popular debate, is that the cost of cleaner energy will impose only “marginally” higher energy costs on consumers in the short to medium term. And, it says, the industry will create jobs, offer commercial opportunities for Australian researchers and support our export industries. As Ferguson repeated on several occasions, Australia will never compete in clean energy manufacturing, but it has the potential to be among the world leaders in developing new technology and exporting that knowledge and IP.
The second important point is that the cost of network upgrades are underpinning the rise in retail costs, particularly in meeting peak demand, and Ferguson made a point of emphasising the cost of Australia’s growing dependence on air conditioning. He noted that for each $1,500 air conditioner (2kW) that was installed, a cost of $7,000 is imposed on to the electricity system which has to be cross-subsidised by other users. This subsidy is at a scale far beyond anything that exists for renewables, yet it is rarely mentioned.
The white paper also recognises the growing importance of distributed generation – such as solar PV – that is located close to demand and will have an impact on the local grid management and require greater flexibility in the distribution network. And Ferguson says demand management, the ability to shave the tops off peak load, will be a critical component of future energy requirements.
Indeed, one of the big themes of this paper, and a welcome one, is the attempt to switch the focus from energy supply to energy demand. That will require much greater focus on energy efficiency, and customer education and engagement, particularly as network upgrades impose significantly higher costs, and consumers have greater exposure to rooftop solar, smart meters, and even electric vehicles.
The white paper talks of the “significant long-term transformation” that needs to occur in the way Australia produces and consumes energy. “This transformation will be a massive challenge,” it writes, and adds that this transformation could also be dramatic. Although it relies on forecasts a coal and gas based future, it canvasses the potential for significant changes to the way energy is produced and the fundamental building blocks of the grid. “We cannot predict with any certainty future cost reductions and technical breakthroughs, or even how the market may ultimately deploy technologies,” the paper says. But it emphasises that this uncertainty needs to be managed with a flexible approach.
Energy modeling: The white paper acknowledged the work done by the International Energy Agency on technology and policy scenarios, and future cost curves, and then ignores them. The three scenarios relied on by RET are based on data that is at least two years old, and ignores the huge declines achieved in solar PV, for instance, in that time frame. According to the Bureau of Resource and Energy Economics, more than half of the country’s brown coal generators, and two thirds of the black coal generators would still be in operation by 2030 – with no carbon capture and storage. No model predicts solar at more than 1.3 per cent by that date, or 3.3 per cent by 2050. (Most industry modeling puts it at least one third by then). One model has geothermal at 8.4 per cent by 2030 and 22.9 per cent by 2050. The final version of the white paper is due in 2012, and will then be repeated every four years: let's update the technology costs, it might change the picture.
Feed-in tariffs: Ferguson again railed at the “dog’s breakfast” of state-based feed-in tariffs, but would not bite at the prospect of a national tariff, preferring instead to see some “harmonisation” of state-based schemes. He said state and territory governments would be held accountable for the rises in electricity costs that overly generous schemes produce. He was particularly scathing of NSW and the ACT. This latter is a little ironic, as it is just about to hold its first tender for a large-scale solar tariff, allowing the market to set the lowest possible price. That may prove embarrassing to the federal government’s own stalled schemes.
Clean energy costs: One important aspect of the white paper was its statement on the costs of clean energy. The Australian government acknowledges that cleaner energy will impose marginally higher energy costs on consumers in the short to medium term. However, it will also offer commercial opportunities for innovative Australian researchers and businesses through the creation of new jobs and skills and regional development opportunities, and potentially support our export industries. It said this was the case for CCS, as well as large-scale solar, geothermal and energy storage technologies.
Electric Vehicles: The white paper predicts only a "modest" uptake of EVs, particularly in the short to medium term, due to cost and the relatively slow speed of fleet turnover. But it recognises that it has the potential to be a "disruptive" technology if current barriers can be addressed, including limitations in battery technology, establishing charging and battery infrastructure, managing impacts from recharging on the grids, and increasing consumer awareness. It says, however, that even a high level of EVs would result in only a moderate increase in energy demand, and with new metering and pricing structures could reduce the need for more expensive peak generating capacity.
Privatisation: Ferguson is not in a position to impose electricity privatisation on the remaining states, but he says the experience in Victoria, which has had demonstrably lower increases in network tariffs, has proved their worth. This goes back to the “gold plating” argument, raised by Professor Ross Garnaut, that so upset some of the utilities. Privatisation, however, is not the only answer; regulatory change is also key. The Australian Energy Regulator is seeking to have its power boosted so it has the ability to resist the bullying tactics of the network operators. Right now, it says it is not a fair contest. Regulations that govern the deployment of distributed energy are also needed, as they are for interconnectors.
Peak demand: There have been numerous estimates of the cost impact on the electricity network from the widespread deployment of air conditioners, but Ferguson has produced the highest figure yet: $7000 of costs for each $1,500 air-con unit. This is based on new Queensland government data that estimates it costs $3.5 million for each megawatt of incremental network and generation capacity to meet peak demand growth. A 2kW unit therefore adds $7,000 to the cost. Demand swings can range as high as 65 per cent from day to day in the Brisbane area, and network operators are obliged to build infrastructure to meet that demand, even if it is only used for a few days, or even hours, a year.
Energy efficiency: The easiest and cheapest response to peak demand increases. The white paper says measures such as energy efficiency regulation on appliances will save 19.5 million tonnes of Co2e at a negative cost to the community of $56/tonne (That is, it saves money). It also speaks of the importance of incorporating distributed generation and direct load management, and forcing networks to seek demand-side alternatives, rather than just erecting more poles and wires.
Will the lights go out? As part of the white paper, the government released an update of its National Resource Security Assessment. One of the scenarios it considered was a sudden loss of capacity from Australia’s largest coal-fired generator, the Loy Yang A power station. What would happen? Well, not a lot actually. Australia has an excess of baseload capacity, and if Loy Yang went offline, other generators would come online. The lights wouldn’t go out, although prices would, inevitably, rise. This would even be the case after the proposed buyout of 2000MW of capacity (but expect even higher prices). The closure of Loy Yang may actually reduce network constraints, the study concluded.
Gas: Ferguson is firmly convinced about the “golden age” of gas, even in the IEAs grim 450 scenario when I posed the question to him. Indeed, the government appears poised to release a significant upgrade of Australian gas reserves following a new survey by Geoscience Australia – presumably, this is centred around the potential of shale gas, which in the US has proved even more contested than coal-seam gas in this country.
Nuclear: The support for nuclear in Australia is based on the premise that renewables, or other clean energy technologies such as carbon capture and storage, cannot deliver. Ferguson, possibly thanks to ALP politics, is obliged at least to give renewables a go at proving their worth, and the white paper notes that there is no compelling energy security argument now in support of nuclear, given Australia’s diverse energy resource base. However, the white paper says a future government may wish to review the nuclear question, if technologies such as “low emissions base-load” energy or energy storage cannot deliver by 2025. But it says a decision may need to be taken earlier, because deployment would be required by 2030-35 and it would take 10-15 years to roll out, even if, as Ferguson suggested, Australia could buy “off the shelf” nuclear technology.
Dramatic and unprecedented plumes of methane – a greenhouse gas 20 times more potent than carbon dioxide – have been seen bubbling to the surface of the Arctic Ocean by scientists undertaking an extensive survey of the region.
The scale and volume of the methane release has astonished the head of the Russian research team who has been surveying the seabed of the East Siberian Arctic Shelf off northern Russia for nearly 20 years.
In an exclusive interview with The Independent, Igor Semiletov, of the Far Eastern branch of the Russian Academy of Sciences, said that he has never before witnessed the scale and force of the methane being released from beneath the Arctic seabed.
"Earlier we found torch-like structures like this but they were only tens of metres in diameter. This is the first time that we've found continuous, powerful and impressive seeping structures, more than 1,000 metres in diameter. It's amazing," Dr Semiletov said. "I was most impressed by the sheer scale and high density of the plumes. Over a relatively small area we found more than 100, but over a wider area there should be thousands of them."
It is a beguiling idea - harvest sunshine, and a little wind, from the empty deserts of North Africa and the Middle East, and use it to produce clean power for the region and for Europe.
Desertec, a group based in Germany with heavyweight commercial backers including Siemens and Deutsche Bank, says the scheme would also bring the regions around the Mediterranean closer together, while providing jobs and stability for the countries in the south.
It has chosen Morocco, which is embarking on its own ambitious solar programme, for its first "reference" project - a plant meant to show that its grand vision is feasible.
Desertec expects to see the first electricity flowing through undersea cables from Morocco to Spain as early as 2014.
But its stated goal - using desert power to supply up to 100% of local needs and up to 15% of European demand by 2050 - has attracted critics who question whether such a vision is possible, or even necessary.
No-one doubts the physical potential of the desert to generate renewable power.
According to a study by the German Aerospace Centre (DLR), a state agency that provided data used by Desertec, less than 1% of suitable land in the North Africa and the Middle East would be needed to cover the current electricity consumption of the region, as well as Europe.
Many countries with intense sunshine also have large tracts of uninhabited land.
But creating a power network presents a series of formidable problems, from nomads stealing solar components to the technological and political challenges of transporting and delivering electricity over such a vast area.
Paul Van Son, the Desertec Industrial Initiative's chief executive, stresses that his group has no detailed blueprint, but aims instead to create the broad conditions for a solar network to be developed.
"There is nothing which is unrealistic," he says.
"It's already happening today, there are installations in the deserts, solar installations, wind parks - it all works.
"There are electrical grids from Tunisia, Algeria for instance and Morocco to Spain and Europe. It's possible to transport electricity over long, long distances."
Desertec points to a pair of cables already installed between Morocco and Spain - though for now these are carrying power from north to south.
It says it will work closely with Medgrid, a French scheme to enable the construction of a Mediterranean transmission system.
In a first, federal environment officials today scientifically linked underground water pollution with hydraulic fracturing, concluding that contaminants found in central Wyoming were likely caused by the gas drilling process.
The findings by the Environmental Protection Agency come partway through a separate national study by the agency to determine whether fracking presents a risk to water resources.
In the 121-page draft report released today, EPA officials said that the contamination near the town of Pavillion, Wyo., had most likely seeped up from gas wells and contained at least 10 compounds known to be used in frack fluids.
“The presence of synthetic compounds such as glycol ethers … and the assortment of other organic components is explained as the result of direct mixing of hydraulic fracturing fluids with ground water in the Pavillion gas field,” the draft report states. “Alternative explanations were carefully considered.”
The agency’s findings could be a turning point in the heated national debate about whether contamination from fracking is happening, and are likely to shape how the country regulates and develops natural gas resources in the Marcellus Shale and across the Eastern Appalachian states.
Some of the findings in the report also directly contradict longstanding arguments by the drilling industry for why the fracking process is safe: that hydrologic pressure would naturally force fluids down, not up; that deep geologic layers provide a watertight barrier preventing the movement of chemicals towards the surface; and that the problems with the cement and steel barriers around gas wells aren’t connected to fracking.
The peak oil world seems to have (thankfully) mostly moved from viewing the defining aspect of the peak of oil production as a function of oil in the ground to being a function of the price it takes to produce new oil - David Strahan has a good example of this at his blog - HAS THE WORLD REACHED ECONOMIC PEAK OIL? .
Whisper it. Oil production in the US is increasing. The country where output peaked in 1970 and then shrank by 40 per cent over four decades, has turned some kind of corner. Between 2008 and 2010, production rebounded by 800,000 barrels per day to 7.5 million barrels per day, and analysts forecast more growth to come. Goldman Sachs predicts that by 2017 production in the US could reach almost 11 mb/d, just shy of its all-time high, restoring the country to its former glory as the world’s biggest producer. ...
Indeed, if the world is suddenly awash with oil, somebody forgot to tell the oil market. Oil remains stubbornly above $100 per barrel of Brent crude, the main international benchmark. Most analysts agree this is because supply is struggling to keep pace with demand, despite weakening western economies. But if all this extra oil is coming on-stream, how come?
Part of the reason is down to short-term unforeseen disruptions, such as the Deepwater Horizon disaster in theGulf of Mexico last year which delayed many drilling projects, and the Libyan revolution which cut global supply by almost 1.6 mb/d. The impact of these events should fade in time but there are clearly deeper forces at work. Producing oil is getting harder.
Not that it was ever easy. The amount of oil produced by existing fields is always in decline because as oil is extracted, pressure in the reservoir falls and the oil comes out more slowly. As a result, every year the industry must drill new wells capable of supplying around 3 mb/d – or 30 per cent of Saudi Arabia’s production – just to stand still. Satisfying the growth in global demand, at least when the economy is expanding, requires roughly another 1.5 mb/d annually.
Filling these holes gets more difficult as the “easy oil” gets scarcer. Companies are now exploring to the ends of the earth – from the Falklands to the Arctic– and are drilling reservoirs that are deeper, hotter and higher pressure than ever, all of which raise new engineering challenges. That has pushed costs up massively, with effects that have yet to be widely understood.
Offshore, companies are working at ever greater depths. During the 1980s and 1990s, for instance, Petrobras, Brazil’s state oil company, made most of its offshore discoveries beneath about 3 kilometres of sea and rock. In 2007, it found the Lula field, about 7 km down. Drilling Lula needed 4 km more specialist steel pipe at a time when steel prices were soaring because of higher energy costs.
Even onshore, costs are rising. Shale-oil fracking wells typically run horizontally and need four times as much steel as a vertical well. According to analysts at JPMorgan, such inflation is rampant throughout the industry. Exxon’s production investments, for instance, soared from $15 billion per quarter in the 1990s to more than $100 billion in the second quarter of 2008 – while the amount of oil and gas it produced scarcely changed.
Some of the most costly oil comes from the tar sands of Canada, with its vast open-cast mines and energy-intensive production processes. According to investment bank Barclays Capital, new projects here need to earn as much as $90 a barrel just to break even. Saudi Arabia, the only country with meaningful spare production capacity, could have produced oil more cheaply a few years ago, but not now. It has increased public spending following the Arab Spring, and now needs $95 per barrel to balance its budget. These pressures, says Paul Horsnell, director of commodities research at Barclays, mean that oil prices are unlikely to fall below these levels unless the economy collapses. He forecasts $137 per barrel in 2015, and $185 in 2020.
So if there is lots of oil down there but it is much more costly to produce, can we have as much as we want if we are prepared to pay for it? Well, that depends on what you judge to be enough and who you mean by “we”, says Steven Kopits, US managing director of energy consultants Douglas Westwood.
The trouble is, high oil prices don’t just encourage oil companies to innovate, they also damage national economies – although some countries are more resilient than others. A penetrating analysis by Kopits found that historically theUSgoes into recession whenever it spends more than about 4.5 per cent of its GDP on oil. Today, that would equate to $90 a barrel. That level also holds for others in the OECD club of wealthy nations, says Kopits. But the evidence suggests thatChinais willing to pay more; it only cuts back on oil purchases when they account for more than 6 per cent of its GDP, equivalent to about $110 per barrel.
The disparity, says Kopits, arises because Chinese society assigns more value to a barrel of oil. Gaining a barrel can transform the lives of Chinese people – allowing them to travel by car for the first time, for example. In the west, losing a barrel merely means trading in a gas-guzzler for a more fuel efficient model.
But oil is so useful that nobody cuts back voluntarily, meaning prices must rise to excruciating levels to force rich western consumers to economise. The first “peak oil recession” started in 2009, says Kopits. It took oil at $147 a barrel and the deepest recession since the 1930s to prise oil from the grip of consumers in OECD countries. Since early 2008, OECD oil consumption has fallen by 4 mb/d, while non-OECD consumption – mainly inChina– has gained 6 mb/d. Global oil production rose 2 mb/d during that period, so developing countries have consumed all the additional supply plus that given up by industrialised economies. “China is bidding away the OECD oil supply,” says Kopits, “and recessions are the mechanism by which that oil is being transferred from weaker economies to faster growing economies.”
With China embarking on rapid “motorisation” – car sales in China leapfrogged those in the US in 2010 – the outlook is for repeated oil price spikes and recessions. We appear now to be entering the second peak oil recession, says Kopits, and others will follow. For the time being this is a problem for the west, but prices could rise to levels that are unsupportable even for China. On this view, peak oil is as much an economic construct as a geological one.
Analysts at Deutsche Bank are more optimistic, and predict that a final oil price spike to $175 in 2015 will lead to rapid electrification of transport and relieve pressure on the oil supply. But Kopits is doubtful that we can escape so easily. “Buckle up,” he concludes, “we’re in for a bumpy ride.”
But despite all this backdrop of chicanery and tomfoolery, the real USA is in deep trouble. The number of people living with the help of US government food handouts has risen to 46 million ‘ a new record.
And figures from Credit Suisse’s World Wealth Report show that the typical American is a lot poorer than generally believed. The report compares average wealth to the median wealth. For the benefit of Dear Readers who have forgotten the distinction, average is what you get when you add all the wealth together and divide by the number of people. Put in a few super-billionaires and everyone looks rich. The median, on the other hand, is what you get when you separate the people into two groups...those above and those below. At the center is the “median"...or what we usually refer to as the “typical" American.
In Britain, for example, the average wealth is $258,000. Not bad. But it’s not what most people have. It’s just what you get when you average all those rich people ‘ with their very expensive houses in London ‘ along with everyone else. Few people in Britain actually have $258,000 net worth.
The median net worth is not even half that amount ‘ $121,000. That’s what the typical fellow has. And even that amount depends heavily on real estate prices that have still not come down in Britain.
But get this. In the US, the average wealth figure is a little less than in Britain ‘ $248,000. But the median figure ‘ what most people actually have ‘ is much less, only $53,000.
What this means, says our Bonner Family Office chief economist, Rob Marstrand, is that “wealth in America is heavily skewed to the rich, with a lot of adults with very little net worth."
Compared to the typical Japanese or European, the typical American is only half as rich. Half the people in the US have less than $53,000 net worth. You can imagine what the bottom 20% have.
This is a devastating and grim insight. It explains why so much of America seems, well, so poor. Because it is poor. People don’t have any money. They dress poorly. Eat poorly. Live poorly.
Compared to Britain and Europe, much of the difference can be explained by the housing bubble, and subsequent housing crash in America. If we remember correctly, the US housing stock was valued at about $20 trillion in ’07. It lost 33% of its value, putting a quarter of mortgaged houses underwater and wiping out about $7 trillion of “wealth."
This explains why there are so many reports of people living in motels...and, according to a recent CNBC report...in automobiles. Yes, families have taken to living in trucks and cars.
Crikey also includes this data in a recent article, noting the gulf in economic performance (and income growth) between Australia and other OECD nations - Australian exceptionalism on an eight-lane highway. I’d always wondered why the typical American seems so poor in comparison with the ordinary Australian or European given the country is so rich - but I never would have guessed the average (median) Australian is 4 times better off...
We’ll often laugh at the cognitive dissonance displayed by our American cousins when they start banging on about American exceptionalism — waxing lyrical about the assumed ascendancy of their national exploits while they’re forced to take out a second mortgage to pay for a run-of-the-mill medical procedure. That talk of exceptionalism has become little more than an exceptional disregard for the truth of their own comparative circumstances.
But in truth, we both share that common ignorance — we share a common state of denial about the hard realities of our own accomplishments compared to those of the rest of the world. While the Americans so often manifest it as a belief that they and they alone are the global benchmark for all human achievement, we simply refuse to acknowledge our own affluence and privilege — denialists of own hard-won triumphs, often hysterically so.
Never before has there been a nation so completely oblivious to not just their own successes, but the sheer enormity of them, than Australia today.
In some respects, we have a long-standing cultural disposition towards playing down any national accomplishment not achieved on a sporting field — one of the more bizarre national psychopathologies in the global pantheon of odd cultural behaviours — but to such an extreme have we taken this, we are no longer capable of seeing an honest reflection of ourselves in the mirror.
We see instead a distorted, self-absorbed cliché of ourselves bordering on parody — struggling victims of tough social and economic circumstances that are not just entirely fictional, but comically separated from the reality of the world around us.
So preoccupied have we become with our own imagined hardships, so oblivious are we to the reality of our privileged circumstances, that when households earning more than $150,000 a year complain about having government welfare payments scaled back, many of us treat it as a legitimate grievance.
Somewhere along the highway to prosperity — and an eight-lane highway it has been — far too many of us somehow managed to confuse cost of lifestyle with cost of living. We managed to confuse government assistance as a means to enable the less well off to achieve a better standard of living and greater opportunity, with government assistance being a God-given right to fund the self indulgences of aspirational lifestyle choice beyond our income means. Too many of us have demanded our dreams be handed to us on a plate, and if our income couldn’t provide for them, we demanded that government should give us handouts to make up the difference. So let us take a hard look at our economic reality.
Over the medium term, our broader economic performance has been nothing short of astonishing. Before the resources boom was even a twinkle in the eye of Chinese poverty alleviation, our performance was world beating — that is worth keeping in your thought orbit. Big Dirt has a bad habit of propagandising about its own contributions and the Australian public has a bad habit of believing it when it comes to our own national development of late.
Imagine if, in 1985, all OECD economies had exactly 100 units of GDP each. If we then tracked the growth of that GDP (using OECD data) over time with the actual growth rates achieved during that period (creating a basic index) this is how economies changed:
Only Turkey, Israel, Ireland and Korea have experienced more growth — with Turkey and Korea pursuing the change from developing to developed status, Israel partially so as well and Ireland recovering from the economic lethargy of civil war, we are the highest growing country that can be remotely called a developed country with no unusual circumstances. Putting this into context, let’s trace that growth over the last 25 odd years with some of the countries we are often compared to.
… “What about the distribution of that growth", I hear you ask. “The poor missed out" you might also be tempted to add.
Using data from the freshly minted OECD report on international comparisons of income distribution and inequality, where the average income growth per year was measured among countries between the mid 1980’s and the late 2000’s, what we find is that Australia left just about everyone else for dead. Not just at the average, or total household income level, but also with the size of the income growth among the poorest 10% of our households *and* the richest 10% of our households.
First up, total population income growth in blue, bottom decile income growth (the poorest 10% of households) in red and the top decile income growth (the wealthiest 10%) in green for all OECD countries.
It’s interesting to note that the only countries where the poorest 10% of households experienced faster income growth than Australia was 4 of the five PIIGS countries – the current basket cases of Europe. Something might be said there about false growth and swings and roundabouts.
Looking at how our growth here compared to the usual suspects:
It is true that the income of the wealthiest 10% of households in Australia grew faster than the income of the poorest 10% of households – the income of Australia’s wealthiest 10% of households grew faster than any other cohort in the OECD. But it’s also true that our poorest 10% of households experienced faster income growth than any country other than Spain and Ireland (who are now quickly reversing that growth with their economic woes) , and faster income growth than the top 10% of wealthiest households in *every other country*.
The income of our poor grew faster than the income of everyone else’s rich. Just chew on that reality for a bit. Let it roll around in your head. ...
We have the highest minimum wages in the OECD. Worth noting too that despite the incessant whinging from the usual business lobbies in Australia, it hasn’t done our economic activity any harm. Now if we compare the ratio of these minimum wages to the average wage for each country, giving us a simple glance at the distribution of wages for each country (which the OECD also fortuitously provides, saving us time), what we find is that Australia, again, sits on top.
Our minimum wage is a lot closer to our average wage than comparable nations. So our economy has grown faster than nearly all others, our household income has grown faster than nearly all others (including our poor having income growth higher than everyone else’s rich) and we have the highest minimum wages in the world. But wait, there’s more!
“It’s unsustainable" I hear the skeptics say – “it’s fuelled by debt!" Well, let’s have a quick look at government debt as a percentage of GDP. Here’s all OECD countries – I’ve thoughtfully pointed out Australia in the chart because it’s easy to miss:
… Now let’s talk about wealth – not income, which we’ve mostly looked at so far, but wealth – the value of our accumulated assets – housing, super, savings etc etc. Here, we’re going to use the The Credit Suisse 2011 Global Wealth Report.
Not only did this find that Australia has the second highest average wealth in the world at $397,000 US dollars per adult (with Switzerland ranked first), but we have the highest median wealth in the world – the wealth of the middleth adult in Australia – coming in at $222,000 US dollars.
The report also gives a number of stats among selected countries which is worth taking a good, long look at.
Bruce Sterling, the science-fiction author and futurist whose book Distraction foreshadowed the Occupy Wall Street movement, spoke about the “melancholy and tiresome reality” of climate change at the 2011 Art + Environment Conference in Reno, Nevada this October. Sterling described the catastrophic drought and wildfires that have consumed his home state of Texas. He went on to explain how we now live in the Anthropocene, a term first coined in 2000 by Paul Cruetzen to describe a new geologic era in which the predominant factor on the Earth’s surface is human activity. Sterling’s 30-minute talk is a must-watch tour-de-force of sober acceptance of the world we have created, and what the future holds:
A few quotations from Sterling’s speech:
Climate change has lost all its sci-fi tinge in my lifetime and is now a melancholy and tiresome reality.
There hasn’t been a year when I haven’t written about climate change. It’s one of the most obvious things to predict.
It’s just kind of a blunt reality that the fossil-fuel enterprise has done a regulatory capture of the entire planet, and we’re involved in a war for oil, and it’s the curse of oil, and it’s a war for a curse that’s endless and happening. You know, it gets boring running around being a Cassandra. Starting Earth Day in 1970 was a pretty late start considering the multicentury scope of this problem.
I will pass the rest of my lifetime in the shadow of climate change. It’s not about warning people in 2011, or trying to avert or defuse a misfortune. The wolf is beyond the door. The wolf is in the living room. This is the anthropocenic condition. This is how we live. This is force majeure. It’s here. It’s very obvious.
There are no national forests. You cannot protect a forest with a nation. There are forests that protect nations.
The global climate crisis is the climate crisis and it’s global because the globe is an externality. “Don’t pollute you, don’t pollute me, pollute that fellow behind me.” Just throw that into the atmosphere because the atmosphere is somebody else’s problem.
The thing that encourages me or sort of offers daylight is there’s no pro-climate crisis party. There’s no government that actually likes the idea of wrecking the climate. It doesn’t really benefit anybody. It really is an externality. It’s just something that’s entropic.
Ethiopia isn’t a country that comes up often when discussing renewable energy, but the Ethiopian Electric Power Coroporation (EEPCO) this past week announced it’s starting construction of six wind power projects and one geothermal power plant. In total, electricity generation capacity for the renewable energy projects totals more than one gigawatt (1 GW), Ethtiopian news service NewsDire reported.
The renewable energy projects are part of EEPCO’s plans to increase national electricity generation capacity five times by 2015, from a current 2000 megawatts (MW) to about 10,000 MW. Increasing electricity generation, in turn, is key to the government’s broader economic development plans.
Ethiopia’s considers itself a “powerhouse of Africa.” Comprising three climate zones, it ranks second in Africa in terms of hydropower potential, after the Democratic Republic of Congo, and exports significant amounts of electricity to its East African neighbors. Ethiopia’s Water and Energy Minister in March announced a plan to add 5,250 MW of electricity generating capacity by building the Grand Millennium Dam of Ethiopia, which would dam the Nile River near the border with Sudan.
EEPCO views wind power as a clean energy complement to its hydropower generating capacity. Ethiopia has substantial wind power resources. Wind power potential in the East African country totals some 10,000 MW, EEPCO has estimated, which has noted that wind energy is higher in the dry season, when hydropower resources are at their lowest.
The six wind power projects announced this past week include the 300 MW Aysha Wind Farm near the Djibouti border, the 100 MW Debre Birhan Wind Farm north of Addis Ababa, the 100 MW Assela Wind Power Project southeast of the capital, and the 153 MW Adama II Wind Power Project. Also slated to start construction are the 250 MW Galema I Wind Power project 42 MW Mesebo Harena Wind Farm and the 42 MW Mesebo Harena Wind Farm.
Ethiopia’s electric utility also intends to start construction of the 70 MW Aluto Langano Geo Thermal project. Rich in geothermal resources, the East African Rift Zone runs through eastern Ethiopia, though the country has thus far been much less active in exploiting it than has neighboring Kenya, which in September announced its intention to generate 30% of its electricity needs from geothermal resources by 2030.
PETRATHERM wants to differentiate itself from other geothermal explorers as it moves toward becoming a working electricity supplier.
Announcing an upgraded resource statement for the flagship Paralana project, Petratherm managing director Terry Kallis said yesterday the company had the right projects, partners and people to deliver results soonest.
After tests, Paralana's potential has been independently assessed, recording an inaugural "measured" resource and with almost half of the total 38,000 petajoules resource moving into the higher confidence "indicated" bracket from the "inferred" category.
The upgrade was a major step forward for Petratherm and partners Beach Energy and TRUenergy, Mr Kallis said.
"It is estimated we have enough geothermal resource potential for about 1300 megawatts of power generation for 30 years, which equates to more than one-third of South Australia's power use," he said.
A GEOTHERMAL energy project near Geelong has landed a $25 million state government grant to help develop a 12-megawatt pilot power plant. Greenearth Energy, which secured the money yesterday, says its plans for the demonstration plant could power up to 8000 homes.
The grant follows two years of negotiations with both Labor and Coalition governments to secure the funds under the state's Energy Technology Innovation Strategy, first promised in 2009. The first $5 million will go towards drilling a four-kilometre deep well to test the geothermal resource at one of the company's exploration sites. Greenearth holds exploration licences for Gherang, Wensleydale and Anglesea, and a preferred site will be announced in three months.
The International Energy Agency has outlined, in detail, its vision of how solar energy technologies could form the backbone of the world’s electricity network, providing half its electricity needs by 2060.
The scenario, outlined in the IEA’s Solar Energy Perspectives, released last week, was first canvassed in late August. Essentially, it looks at the options available to the world if it took decisive, but belated action, on climate change, and alternative technologies such as nuclear and carbon capture and storage failed to deliver as promised.
And, for the first time, it also recognises a future where baseload power may no longer provide the bedrock of the world’s energy needs, as it has done for a century or more, but is replaced by a system of flexible and inflexible energy sources, where intermittent sources such as wind and solar PV are complemented by “dispatchable" and flexible sources such as solar thermal with storage, hydro, and gas.
The IEA has been canvassing a range of scenarios over how the energy systems of the future may look under various climate and energy policy responses. Under its 450 scenario, where the world holds true to its political target of limiting global warming to an average 2°C by capping greenhouse gas emissions at 450 parts per million, solar accounts for less than 20 per cent of total generation by 2050, rising to 25 per cent of generation in its “high renewable" scenario, where renewables need to account for 75 per cent of the world’s generation to make up for the lack of nuclear or CCS.
However, in its “Testing the Limits" scenario, the IEA considers what would happen if the world made a belated but sharper change in its energy policy – whether for security, economic or climate reasons, as seems increasingly likely given the nature of the international climate talks – and if many countries decided to abandon nuclear power and carbon capture and storage was found to be costlier, more limited or not as safe as hoped, which it concedes is quite possible.
In this scenario, the IEA says, solar energy could become the backbone of a largely renewable energy system worldwide. The make-up of energy sources varies from region to region, thanks to climate variations, but most of the estimated nine billion people will live in warmer climates, and areas with strong solar radiation (such as north Africa and the Middle East to Europe, and Australia to Indonesia), and become net exporters of solar energy. In colder climates such as Europe, wind and solar PV match the seasonal demand peaks.
Globally, the IEA scenario has solar thermal accounting for 28 per cent of total electricity generation by 2060, with some 6,000GW of capacity with storage (it has around 1GW now). Solar PV accounts for 20 per cent of generation, with 12,000GW of installed capacity (about 40GW now), and solar fuels add a further 2 per cent of generation.
Of the other technologies, wind power also makes up 28 per cent of generation, with 10,000GW of capacity, hydropower provides 10 per cent, and baseload – a mixture of geothermal, nuclear and biomass with CCS – provides 11 per cent of generation with around 1,200GW of capacity. Natural gas has capacity of around 3000GW, but is used sparingly as a balancing fuel and accounts for just 1 per cent of total generation.
The IEA does not break down the energy contributions in individual regions, but it should be noted that in its “high renewable" 450 scenario, the IEA says 40 per cent of the energy in regions such as Australia, central Asia, parts of India and south-western US, and the Middle East, could come from solar thermal alone.
As for costs, the IEA says, it is simply a matter of planning ahead. “Renewables in general, and solar energy in particular, may not always offer the lowest cost options to meet our energy needs, nor even the cheapest way of doing so while reducing global carbon emissions," it notes. But because of the risk that other options may fall short, solar technologies offering “indigenous, inexhaustible resources", are more secure, less likely to experience price volatility once the technologies are mature, are environmentally sustainable, and “the cheapest known antidote to catastrophic climate change, even if they are or appear to be higher-cost options in other ways."
It says that by 2060, the world is four times richer, but only consuming 50 per cent more energy because of energy efficiency measures. “Even if the cost of one energy unit were twice as much as today, the total energy expenditure would be proportionally smaller than today. It is thus conceivable to prefer an energy future that provides security, economic stability and preserves the sustainability of ecosystems and the environment, even if it is not the least-cost option when such considerations are ignored."
But it may not be that expensive. The IEA notes that solar PV is already competitive with “bulk power" in many areas, particularly islands, off-grid locations, and where PV is competing with oil. Solar thermal is also likely to fall substantially – a recent tender for a 50MW solar thermal plant in Mongolia was bid at $140/MWh. It says that solar thermal will be competitive with intermediate and peaking plant by 2020, and by 2030, solar costs will range from $50/MWh in the best solar regions, to $150/MWh in the worst. Other technologies will be grouped north or south of $100/MWh. It notes that, in the case of building integrated solar PV, where solar will be crucial to the value, “the cost of PV would almost vanish in the market segment where it currently costs the most."
Plans to build more than 3.5GW of renewable energy capacity in South Africa have taken a major step forward after 28 wind and solar power projects were approved as part of a government tender round that should serve to burnish the host country's green credentials as the Durban Summit enters its final few days.
The government yesterday awarded preferred bidder status to projects totalling 1,416MW of capacity, split between wind power, solar photovoltaic and concentrated solar power projects. The 28 winners were selected from a total of 53 bids and now have until June 2012 to secure financial close and then begin construction.
The government awarded preferred bidder status to 18 solar PV projects totalling 632MW, and eight wind power projects, totalling 634MW. Two concentrated solar projects totalling 150MW, including the 100MW Abengoa-led KaXu Solar One also got the green light.
David Crane, CEO of NRG Energy: The fundamental issue of our day [is] climate change…. The people who were opposed to climate change legislation used one of two tactics. They either said, “Well, we don’t believe it’s happening.” Which, of course, is just a bald-faced lie.
Or the second part of the one/two punch is, “We can’t afford to do anything about it because a synonym for the word “green” is “expensive.” But looking forward, electric vehicles will be far cheaper to operate than internal combustion engine vehicles. And solar panels on the roof will provide power more cheaply than taking power from the grid.
That’s from a Yale Environment 360 Interview of David Crane, the CEO of one of America’s’s largest electric utilities. It produces power for some 20 million U.S. households, and over 90% of NRG’s power comes from natural gas and coal. But Crane says the future — the near future — will be different.
Climate Progress has written a number of articles on the sharply declining cost of solar photovoltaics (see “Solar is Ready Now: ‘Ferocious Cost Reductions’ Make Solar PV Competitive“). It’s good to hear from a leading utility executive that the facts on the ground bear our analyses out.
Here are more excerpts from this remarkable interview, including his discussion of “democratization of customer choice” and the key role of electric vehicles:
e360: What can you do as a major power generator to nudge the country toward a renewable energy future?
Crane:I think the most important thing is to make the American public aware that now they have energy choices in a way that they never really did. You don’t just have to settle for using electricity in your house that is supplied by coal-fired power plants on the grid. And you don’t just have to put oil that comes from the Middle East in your gas tank. You can buy an electric car. You can put solar panels on your roof. You have choices now…..
e360: Could you talk about NRG’s move into utility-scale solar, and also your vision long-term of large-scale solar, versus distributed [smaller-scale] solar power?
Crane: So far most of our business has been utility-scale solar — gigantic plants in the desert. The biggest solar [project] we have is 295 megawatts. That’s something like 6 million solar panels. Those projects are really dependent on two things, because they cost over a billion dollars: the Department of Energy (DOE) Loan Guarantee Program and California’s 33 percent Renewable Portfolio Standard, and the fact that the two largest California utilities have been willing to sign long-term agreements in order to meet their requirements [to obtain 33 percent of their electricity from renewables by 2020] under the Renewable Portfolio Standards. We have over 800 megawatts of projects out there, which is a huge number for solar. But our view is that because the DOE Loan Guarantee Program is going away and the California utilities are coming close to putting themselves in a position to satisfy the requirement, there will be fewer of those projects in the future.
We expect to continue to pursue that business and to do well, but that’s not going to be the explosive-growth part of the industry. The explosive-growth part will be between distributed solar power, which is like 1 to 10 megawatt size, and then residential, which is measured in kilowatts. We have so many parking lots and warehouse rooftops and residential locations where people want to reduce their monthly electric bills and that is just an enormous area of growth….
e360: Can you explain your three-pronged approach to transforming the country’s electricity system.
Crane: Democratization of customer choice in our sector begins with two things. One is the electric car and the other is the solar panel on the roof. I think it actually starts with the electric car. You put the electric car in your garage and you really have a mini power plant because these batteries that drive electric cars are quite substantial pieces of equipment. The average car in the United States is sitting still about 22 hours a day. Those are hours where the car can either be accepting power from the grid or selling power through the grid in a phenomenon we refer to as V2G, vehicle-to-grid. That leads to the third leg of the trilogy, which is the smart meter, because between a smart meter in your house, combined with time and use pricing, you essentially want that electric car to be charging between midnight and four in the morning. And you want to have it available to basically drain itself a little between 2 and 6 o’clock in the afternoon. But someone has to tell it what’s going on with the grid at that point. And that’s what the smart meter does.
Right now around the country people are trying to introduce smart meters as just another information device. In our view, no one wants to pay for another information device, particularly when the information being given is about something that people don’t care about, which is their electricity use. So smart meters will only be accepted by the American public when they do something of value. And the first thing that they’ll do of value is they will sense when it’s expensive to run electricity and they’ll turn appliances off around the house. But the next thing they’ll do, which is the most valuable thing that will actually put dollars in your pocketbook, is that when the smart meter recognizes that the wholesale system is getting tight and there is good pricing, it will actually sell into the grid from the car battery. Or if power from the grid is getting really expensive, the smart meter might just turn the house off from the grid and then run the key appliances in the house off the electric car in the garage.
Then you have the solar panels on the roof. If you tie in a rooftop solar panel with a smart meter, then it’s exactly analogous to the electric car battery. The smart meter could turn off the house from the grid at 3 in the afternoon and rely exclusively on the power that’s coming from the solar panels on the roof, saving the customer a lot of money on their bill from the grid. And if the person puts a big solar panel on their roof, they could sell power from that. ...
There have been so many other temporary emergencies in the world over the past few years that it's easy to overlook a permanent one:
Oil prices.
Right now, much of the global economy is weak... and oil is still over $100 a barrel! A few years ago, when oil prices first hit this level, the news came as an absolute shock. And soon, when gas hit $4 a gallon, the entire national conversation changed.
(It didn't change so much internationally, because, thanks to gas taxes, other countries already charge way more than $4 a gallon for gas, so oil price moves don't have so huge and visible an impact on driving costs).
Specifically, $100+ oil caused many Americans to buy different cars and drive less. And it put a choke chain on the economy, throttling growth. And, shortly thereafter, the economy tanked. And then, of course, oil prices followed the economy down, allowing everyone to focus on other more pressing emergencies.
But then, with even a crappy economic recovery from the depths of the financial crisis, oil prices soared again. And now they're back to near-emergency levels, even with the global economy sputtering. ...
Yes, if the global economy goes back into recession, oil prices will drop again. But the drop will be temporary. And if the economy ever threatens to start growing at its full potential, meanwhile, oil prices will likely keep right on going up. Until they choke off growth again.
And so on.
It has gotten to the point, in fact, that oil prices may start to act as a natural Central Bank on the world economy--raising costs when the economy starts to heat up and cutting them when it cools. And that would be fine...if we could maintain reasonable oil prices when the economy was running at a healthy rate.
But the economy is not running at a healthy rate right now, at least not in Europe and the United States. And oil prices are already over $100 a barrel.
So we hate to think what will happen if and when we finally do see a vigorous economic recovery.
McKinsey Quarterly has a look at ways companies can prepare for an era of high oil prices - Another oil shock? (free subscription required to read the whole article).
It’s been a while since the world has been truly preoccupied with the threat of sustained high oil prices. The global economic recovery has been muted, and a double-dip recession remains possible.
But that dour prospect shouldn’t make executives sanguine about the risk of another oil shock. Emerging markets are still in the midst of a historic transition toward greater energy consumption. When global economic performance becomes more robust, oil demand is likely to grow faster than supply capacity can. As that happens, at some point before too long supply and demand could collide—gently or ferociously.
The case for the benign scenario rests on a steady evolution away from oil consumption in areas such as transportation, chemical production, power, and home heating. Moves by many major economies to impose tougher automotive fuel efficiency standards are a step in this direction.
However, fully achieving the needed transition will take more stringent regulation, such as the abolition of fuel subsidies in oil-producing countries, Asia, and elsewhere, as well as widespread consumer behavior changes. And historically, governments, companies, and consumers have been disinclined to tackle tough policy choices or make big changes until their backs are against the wall.
This inertia suggests another scenario—one that’s sufficiently plausible and underappreciated that we think it’s worth exploring: the prospect that within this decade, the world could experience a period of significant volatility, with oil prices leaping upward and oscillating between $125 and $175 a barrel (or higher) for some time. The resulting economic pain would be significant.
Economic modeling by our colleagues suggests that by 2020, global GDP would be about $1.5 trillion smaller than expected, if oil prices spiked and stayed high for several years.
But like any difficult transition, this one also would create major opportunities—for consumers of energy to differentiate their cost structures from competitors that aren’t prepared and for a host of energy innovators to create substitutes for oil and tap into new sources of supply.
Furthermore, if we endured a period of high and volatile prices that lasted for two or three years, by 2020 or so oil could face real competition from other energy sources.
Mr Dudley said that US consumers were on track to spend $200bn more on oil in 2011 than they had done last year, due to the higher crude prices. He said that US consumers would be the first to feel the effects of rising crude prices because fuel taxes in the country were so low, leaving only limited potential to lower prices at the pumps through tax cuts.
Oil prices were pushed up at the start of 2011 by instability resulting from the Arab Spring and have remained above $100 for most of this year.
Strong demand from Asian countries, which Mr Dudley said was "holding up", has helped to keep the prices high, despite the eurozone crisis threatening economic slowdown.
However, if oil prices did negatively affect the US economy, the impact would reverberate globally, he warned. "A downturn in the US affects goods and services from China, India and indeed this region [the Middle East], particularly if energy demand is affected."
Mr Dudley said that the energy industry needed to add the equivalent of one large oil producer like Saudi Arabia every five years if it were to offset the decline in output from existing fields.
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