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On Renewable Wood Fuels, Part 1: Environmentally Beneficial or a Chronic Problem?

Edward, agreed most natural biomasses have optimal dispositions that can be beneficial to the environment and mankind.  Wood and raw wood wastes tend to be more ideally suited as heating fuels for Residential structure/indoor heating applications or Commercial/Industrial steam/power generation applications.  Ideally the energy conversion technology or facility should be reasonably close to the source of wood fuels supplies to avoid the transportation costs that can make its full lifecycle consumption economically unattractive.  This of course requires reasonable management to ensure permanent deforestation (parts of Europe/Asia for example) does not occur.

As far as waste biomass, which can often be contaminated with hazards chemical and metals (cardboard, magazines, packing materials, etc.), these fuels can be much more plentiful in Urban settings and can be much more cleanly consumed in Commercial/Industrial facilities with adequate environmental controls to capture and prevent the exhaust/venting of more hazardous combustion smoke (compared to seasoned/processed wood pellets) into often more densely populated regions.

April 24, 2014    View Comment    

On One Weird Trick To Power Your City with 100% Renewable Energy

Since Illinois’s total annual retail power sales are about 145 million MWh (3.5% of U.S. total) and the U.S. total annual non-hydro renewable power net generation is about  255 million MWh (6% of U.S. total) that means (in theory) the entire state of Illinois could achieve being operated on 100% of (U.S. REC based) renewable power.   This of course assumes that the REC’s are valid/verified to ensure no significant redundancy occurs for available (real) national REC’s that face growing Consumer competition from ‘municipal aggregates’ across the country.

Unfortunately many States have ‘Renewable and Alternative Energy Portfolio Standards’ that make the feasibility of Illinois achieving 100% renewable power in the near future less than possible.  In addition, as multiple States increasingly compete for available, but somewhat limited existing renewable power, the competition will very likely make non-hydro renewable power REC costs soar to increasing record highs in the future.  In a Free Market, this should also help encourage the future expansion of addition U.S. renewable power capacity. 

April 22, 2014    View Comment    

On Why a Climate Treaty or Carbon Tax Is Unlikely

If politicians were successful in negotiating and getting an International climate treaty, carbon tax or more effective energy policies approved by most Governments (including the U.S.), the likelihood of stabilizing and significantly reducing total world carbon emissions within our and our children’s lifetimes appears to be relatively small.  Even if the OECD (Developed) Countries achieved the goal of the original Kyoto Protocol (80% reduction of 1990 levels), the probability of non-OECD (Developing) Countries controlling, let alone reducing their carbon emissions, and stabilizing world total carbon emissions by mid-century is highly uncertain.  Refer to a past TEC Post, fourth graph (“Carbon Emissions Based on Reducing OECD Emission by 80% of 1990 Levels”).

The feasibility problem statement begins with China; the number one source of world carbon emissions since 2005 and growing.  Unless lower carbon energy sources truly become competitive with fossil fuels in overall World Free Markets, the ability of Developing Countries (with their continuously growing populations and directional standards’ of living improvements) to switch from currently more economic fossil fuels to higher cost renewables, will be extremely challenging.

April 22, 2014    View Comment    

On IPCC Working Group III Recommends Nearly Quadrupling Nuclear Energy

Willem, we can only hope that sanity will develop one day in organizations such as the IPCC on the reality of how to feasibly-cost effectively & sustainably replace higher carbon power generation technologies with the benefits of zero carbon nuclear power.

April 22, 2014    View Comment    

On The Losing Economics of Investing in Aging Coal Plants: Part 2

It may be a little premature to count out coal during 2014 within the U.S.  The net power generation from coal actually increased by 72 thousand GWhr during 2013, while non-hydro renewable power only increased by 35 thousand GWhr.  The EIA projects (AEO 2014 early release) that coal power generation will remain relatively flat over the next 5 years and only decline briefly thereafter.  Investors beware; coal production and power generation may be under strong regulatory assault by various Government Agencies, but even with the recent new EPA required U.S. stack emission control costs it may be premature to assume that alternative new power generation production facilities will enjoy substantially greater investor returns in the near future.  One of the biggest risks to alternative renewable power investment is the loss of the PTC subsidies recently and the likely low probability that Congress will once again extend the subsidies any time soon.

April 21, 2014    View Comment    

On How to Really Disrupt the Retail Energy Market With Solar Energy

Another factor to consider in the actual impacts of increased solar PV installations are the average net generation capacity factors.  Average solar PV capacity factors vary from the low 20% range in sunnier states such as Arizona, California and Hawaii, and down to about 10% in less sunny states including New Jersey and Massachusetts.   Colorado is somewhere in between.  This performance factor directionally makes new solar PV power generation capacity less expensive in south western states vs. north eastern states.

April 21, 2014    View Comment    

On IPCC Working Group III Recommends Nearly Quadrupling Nuclear Energy

If fossil fuel power 'carbon capture and sequester' options were truly viable alternatives to zero/low carbon baseload power generation capacity, then the expansion of nuclear would be the obvious most cost effective solution.  However, nuclear still faces the political opposition over all technological, economic and practical feasibility factors that keep directing most Government’s policies primarily towards much more costly and generally less sustainable renewable options.  If the IPCC truly supports the reality that to substantially reduce the need for fossil fuels (primarily coal) requires nuclear, they need to make this position much more obvious than their latest report, which still buries the required nuclear option within a huge document that few people (other than individuals like yourself) are willing to read, analyze and summarize-publish in a much more transparent form; for the more general Public’s reasonable clarity-understanding.

April 20, 2014    View Comment    

On Energy Quote of the Day: ‘We Will Create Our Own Oil Company’

The level of Oil Company Upstream (Oil & Gas production) and Downstream (Refining, Distribution & Marketing volumes) changes normally go through longer term cycles.  In the case of ConocoPhillips, I spent a significant part of my career working for these companies.  I started my career in the mid 1970’s at a West Coast Phillips 66 Refinery.  A couple years later Phillips sold the Refinery to an Independent Downstream Company; Tosco.  Tosco purchased numerous refineries from other Major Oil Companies (BP, Mobil, Unocal, etc.) over the following 20 years, then Phillips bought Tosco.  A couple years later Phillips merged with Conoco, followed by ConocoPhillips separating their Downstream assets to Phillips 66 in 2011.

Historically, Major Oil Companies Upstream assets are more profitable on average then Downstream assets (based on world wholesale market oil & gas prices vs. wholesale-retail markets for petroleum and gas products).  Downstream Refining & Marketing profit margins are generally much more volatile and subject to more indirect price controls such as ‘price gouging’ then Upstream production.  Even though U.S. Oil Companies have been accused and investigated dozens of times over the past several decades for accusations of price gouging, guess how many times they were found legally guilty of manipulating market prices?  Zero.  But, due to this constant government/political oversight factor/risk, integrated Major Oil Companies tend to be much more aggressive with Upstream market pricing/profit margins than Downstream Refining & Marketing markets; and associated Downstream profit margins are proportionally-downwardly affected.

So what should the average investor do?  Implementing a more balanced Upstream + Downstream approach to the overall oil & gas market structure is normally the safest strategy in the longer term.  During years of world-regional oil & gas supply shortages (or perceived risks to supply), Upstream generally does better then Downstream, and during years of high demand and limited Refining and Marketing capacities, Downstream will do better.

April 20, 2014    View Comment    

On Will Utilities Control Behind-the-Meter Solar Batteries?

The issue of who controls ‘behind-the-meter’ supply (batteries) or net demand is more about voluntary ‘demand response’ vs. the costs to reliably supply ‘uninterruptable power’ to all customers.  Sure, Homeowners/Commercial interests who invest in solar PV with backup batteries want to maximize their returns on investment by being credited the highest peaking power price levels each day.  As long as the penetration levels of the Residential/Commercial solar PV/batteries are small, the actual impact of this uncontrollable Power Grid balancing variable is directionally more political than economics based.  However, as the level of variable-uncontrollable demand response and solar PV/batteries supply become more significant the impacts on Power Grid costs can become significantly negative.  This situation will develop as variable-unpredictable power supply or demand negatively impacts the level of hot spinning reserve power than must be operated (on-line) to reliably balance power grid’s 24-7.

So why would Utility Companies or Power Grid operators want to increasingly control behind-the-meter demand or supply from batteries?  To properly optimize power grid efficiencies (minimize costs) by minimizing the level of power reserves required to reliably maintain supply-demand balances for the 'uninterruptable service' all Customers normally expect or have grown to be accustom to and reliant on.

April 20, 2014    View Comment    

On Climate One: Overselling the Fracking Boom

And further not so positive news is that despite the current Administration’s increasingly aggressive policies to restrain coal power generation, reduce petroleum consumption, increase Consumer’s efficiencies and the less than full support for natural gas production, total U.S. carbon dioxide emissions from fossil fuels consumption actually increased by 122 million metric tons per year (+2.3%) 2012-2013.  The largest source of this increase (over half the total) is surprisingly due to increased coal consumption.  Could the major contributing factor be inadequate clean energy policies, just another temporary increase as was experienced in 2009 or due to a significant increase in the level of GDP growth and economic recovery?  Your guess is as good as mine at this time.  We will all find out in the next couple years, assuming the slow and consistent growth in the economy continues and if future clean energy/efficiency gains can successfully outpace the energy consumption from further increased GDP and population growth.  

April 20, 2014    View Comment    

On Report Challenges EIA's Renewable Energy Projections

The EIA has a history of being relatively conservative in their (AEO) projections of renewable power growth.  Part of the reason has to do with predicting the future subsidies which must be routinely reapproved by Congress.  Since wind power accounted for 88% of average annual non-hydro renewable power increases in U.S. net generation over the past 10 years, the impact of Congress not extending the ‘production tax credit’ (PTC) is likely a major contributing factor to the EIA not more aggressively projecting growth in future wind power generation 2015-2025.

Review of the SUN DAY's projection indicates assumptions to the extreme in the opposite direction of the EIA AEO 2014 (early release).  The more obvious examples are their assumptions for hydrokinetics, biomass and geothermal.  While these renewables could definitely someday substantially increase their contribution to total renewable power generation (depending on the economics), recent performance histories’ are not that optimistic compared to actual wind and even solar power.  Wind and solar’s growth of course have been very strongly supported by various Government subsidies over the past 10 years.  Another factor not apparently addressed very much in the SUN DAY projection is the impact of increased penetration levels of variable wind & solar or other renewables that require increased levels of spinning reserves to properly maintain power grid balances and reliabilities.  The EIA routinely uses power grid standards developed by North American Electric Reliability Corporation. 

The bottom line, all analyses have their pluses and minuses.  The accuracy is almost always conditional on the assumptions used to develop the projections.

April 18, 2014    View Comment    

On ABCs of LNG

Edward, natural gas is by far the cleanest burning fossil fuel.  It does, however, contain up to a few ppm’s sulfur.  This level of sulfur content is much lower than all other fossil fuels; particularly coal and most petroleum vehicle/marine fuels.

April 16, 2014    View Comment