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On Green Economic Patriotism: The Need to Invest in America's Clean Energy Sector

I'd suggest reading the post a little more closely. It's about opening up renewable energy to more private investment, not to more government investment (which the authors make clear).

If you think the government doesn't know how to invest, wouldn't you support allowing the market to decide what to invest in? 

Best,

Adam James

November 3, 2013    View Comment    

On How a Capacity Market Works

That's a great question.


The short answer is that capacity markets do not have an inherent resource preference. They acquire the lowest cost resources needed to meet demand. If renewables are the lowest cost, then those would "clear" the market over moe expensive fossil fuels. If a coal plant is cheaper, it would clear instead.

What has played out, though, is that efficiency is often the lowest cost resource and so it will have a price suppression effect- since it clears in the market and brings down the total clearing price. The same thing happens with wind power in electricity (not neccesarily capacity) markets.

Renewables have zero fuel costs and higher capital costs, whereas fossil fuels tend to be the opposite. Basically, this means that older fossil fuel plants will likely be more competitive than new renewables, but that as renewables mature they get more competitive.

So in sum, it's a little complicated. Capacity markets certainly make payouts to fossil fuels, since they are required to meet reliability. However, renewables are also receiving payments in the market and it gives another revenue stream to their projects (which is a good thing).

There are some structural problems with capacity markets- and I think capacity markets *could* be used to direct investment much more into renewables, but that's probably enough for a whole 'nother post.

Adam (@adam_s_james)

June 17, 2013    View Comment    

On How a Capacity Market Works

Well that is certainly an interesting view. 

The point of having efficiency bid into the market isn't that demand reductions can provide electricity (obviously). It's that if you have more efficient HVAC, you get the same results in your building while using less energy. That means a power plant doesn't need to provide that energy.

As far as I know, the Center for American Progress doesn't have any particular opinion on capacity markets. They are just a widely used tool across the country that ensure reliability on the grid. Calling efficiency bids in capacity markets a Ponzi scheme means I must not have explained them very well, or you don't understand what a Ponzi scheme is. 

Real capital also goes into efficiency, and creates more jobs than equivalent investments in fossil fuels. After all, most efficiency upgrades are made in the Unites States. So not only are jobs created for installation, but also in the manufacturing of the products.

June 14, 2013    View Comment    

On How a Capacity Market Works

Actually renewables just get a percentage of their bid accepted (I'll check on the exact formula). Something like if 100 MW bids in then 30 clears. I believe it has to do with on-peak capacity projections.

June 14, 2013    View Comment    

On Bill McKibben Gets the Math Wrong on Fracking

Not a defense of the McKibben report, but one thing to note:


Emissions come from both combustion of fossil fuels and natural gas systems (including pipelines). The dramatic emissions reductions you note have come primarily from fuel switching (the combustion part) but if emissions have increased from natural gas systems, it is possible that has cut into the emissions reductions.

This is similar to the Twitter conversation I had with people yesterday about increased production of natural gas. The fugitive emissions across the lifecycle of natural gas (from well to stove, in this case) will increase as production and/or use increases.

I don't have anything to add on the magnitude of the offsets, but the fact that natural gas combustion and heating are different doesn't make the emissions leakage from pipelines not a contributor to overall emissions.


Best,


Adam

@adam_s_james

April 5, 2013    View Comment    

On Bill McKibben Gets the Math Wrong on Fracking

Not a defense of the McKibben report, but one thing to note:


Emissions come from both combustion of fossil fuels and natural gas systems (including pipelines). The dramatic emissions reductions you note have come primarily from fuel switching (the combustion part) but if emissions have increased from natural gas systems, it is possible that has cut into the emissions reductions.

This is similar to the Twitter conversation I had with people yesterday about increased production of natural gas. The fugitive emissions across the lifecycle of natural gas (from well to stove, in this case) will increase as production and/or use increases.

I don't have anything to add on the magnitude of the offsets, but the fact that natural gas combustion and heating are different doesn't make the emissions leakage from pipelines not a contributor to overall emissions.


Best,


Adam

@adam_s_james

April 5, 2013    View Comment    

On Department of Energy Launches New Clean Energy Manufacturing Initiative

Good piece Jesse.

I think the coolest potential aspect of this program is having Institutes for Manufacturing Innovation anchoring clusters of universities, SME's, and manufacturing operations. Since they have grantmaking capacity, it could be a new pipeline for getting early-stage tech through to commercialization.

Someone at DOE also pointed out to me theres a lot of benefit to domestically sourcing these goods, because the positive feedback loops with manufacturing industry and design operations can make cleantech products better.

Anyways, I wrote a little on this here and will have it up on TEC later this week:

https://www.greentechmedia.com/articles/read/Do-Clean-Energy-Innovation-Clusters-Work

Best,

Adam

March 26, 2013    View Comment    

On U.S. Natural Gas Capacity Must Peak Soon To Achieve Sustainable Pathway

You mean just because it's published it doesn't mean it's true?

Both sides would do well to heed that advice!

December 19, 2012    View Comment    

On U.S. Natural Gas Capacity Must Peak Soon To Achieve Sustainable Pathway

Haven't read the paper, so I won't weigh in on that. But just for clarity, are you saying that PV plays absolutely no role in providing energy during peak hours? I am pretty sure that is incorrect.

My contention isn't that PV will constitute all needed supply during peak hours (obviously, since you cannot ensure that the sun will shine at those moments and I wouldn't want to assert storage will enable that to happen). However, it is my contention that PV can provide energy supply during peak hours- which by its nature means you wouldn't be firing up a peaking plant to supply that energy.

Wind and solar aren't interchangeable, because they are intermittent or variable resources. I get that. As I mention in some other comments, intermittency is decreased by wider geographical dispersement, transmission, storage, and DR. However, some baseload is needed- and that is why coal, natural gas, and nuclear power can play a small role in the supply mix (until we develop an amazing, cost-effective energy storage technology- fingers crossed!).

But really, dismissing those very real technological and management tools as "hand waving" and then alluding to a perpetual motion machince doesn't really engage that point on its merits. The notion that the current high-carbon system is somehow sustainable seems much more like the belief in a perpetual motion machine to me, insofar as it assumes we can continue along this path while not incurring climate costs that will eventually force a transition and make the entire economy grid to a halt.

Thanks for reading, and for your thoughtful comments!

Adam

December 18, 2012    View Comment    

On U.S. Natural Gas Capacity Must Peak Soon To Achieve Sustainable Pathway

These are all good points, and well taken.

Having solicited feedback about the post, I think #1 and #3 in your comment reflects the part of my argument I could do a better job on. As a few others have pointed out, we can probably retire coal much faster than I imply. I do stand by the fact (as you allude to regarding government intervention) that actually shutting down those coal plants is politically troublesome enough that, while I may be dead wrong about the reliability piece, it is still unlikely to happen.

On the other hand, I have also spent more time with the projections and analyzing the capacity factors- and I think that if I were to rewrite (or add) to my argument I would do it this way:

1) We are adding 100GW of natural gas capacity by 2030

2) Projected capacity factors are staying constant, at ~25-30%

3) As coal goes offline (which it has to if we want to hit climate targets, as you note) what is more likely to happen, that we ramp up existing natural gas capacity (from 30% to 70%, or whatever is needed to maintain a capacity margin buffer) or that we build new renewables?

I think that we should just be aware of the dangers of setting ourselves up for that situation later on. I agree that natural gas (plus some EPA regs) have made the construction of new coal obsolete, and that is a great thing. But looking ahead, natural gas really can't constitute more that 35% (tops) of our energy supply in 2030, so lets not create the kinds of hurdles I mention in point (3) here.

That all said- your #2 point is well taken. I rarely give CCS and natural gas explicit credit- and I am open minded to that. I think we view it similarly (although I may be misreading you) that natural gas::CCS as renewables::storage. It is a supporting technology that changes the role that resource will play in the energy mix- and it shouldn't be counted out. But we can still make projections based on current technology and then leave the door open for those kinds of changes. It important to outline the risks and be realistic about what influences decisions down the road.


Thanks for reading, and for your thoughtful comments.

December 18, 2012    View Comment    

On U.S. Natural Gas Capacity Must Peak Soon To Achieve Sustainable Pathway

I'm not a skeptic, I just don' think it's actually the debate needed at the moment.

For starters, climate change has to be the starting point- otherwise this conversation is an arbitrary dialogue about preferred energy sources. If you believe the science, though, a high carbon pathway is entirely unsustainable. The costs of inaction, the price imposed by a BAU path, will have an incredible toll on the economy AND on personal living standards.

That's why it is always strange to try to use the economic lens as a justification for inaction. The costs of not doing anything about climate change (which can include everything from the increased health costs from pollution, response to extreme weather events, and just the general costs of the 7C increase in temperature we are on track for) are massive. 

That would be enough to justify action, even extreme action that has costs. But further supporting the argument for low carbon alternatives is that low carbon economic growth is entirely possible. Is every policy under that guise a good one? No. But it's important to remember that economically speaking, there is an underexplained cost of inaction and a real argument for wealth creation via action. 

Also, I think the time horizons are relevant. The risks associated with climate change are primarily paid by future generations. This makes it much easier to reject proposals that raise short term costs (or don't, but are portrayed as doing so) while abating long term risk. Most policymakers are currently making decisions based on a shorter time horizon, but younger folks like myself are unwilling to accept those same risks. The same applies to the benefits. Incumbents primarily benefit from the status quo, whereas the newer generation stands to gain the most from innovative business models and new approaches that begin when the status quo is shaken up.

Anyways, it is a good discussion to have. Building a clean energy economy both offsets future risks and costs, while acting as a down payment on future benefits. It is an exciting proposition- and one that really shouldn't play second fiddle to short-term fears. 

December 17, 2012    View Comment    

On U.S. Natural Gas Capacity Must Peak Soon To Achieve Sustainable Pathway

See discussion below.

December 15, 2012    View Comment