Comments by Adam Whitmore Subscribe

On Development of Carbon Pricing Could Benefit from a Two Hundred Year Old Idea

Jim,

At the moment we're not doing a great job of fully pricing the externalities.  The question is whether this kind of scheme can help further this - I think maybe yes.  As note other uses for revenue, which will include supporting low carbon technologies, also have good arguments.

 

Adam

 

 

September 16, 2015    View Comment    

On Development of Carbon Pricing Could Benefit from a Two Hundred Year Old Idea

Jim,

 

You make a very good point.  I was hinting at the problem you raise with my reference to elasticities in the post.  At the moment citizens have no direct incentive to seek greater reductions and higher prices.  My expectation is that tighter caps would lead to increased revenue for quite a while because of increased prices more than offseting decreased volumes (a 20% tightening of caps would  likely result in a more than 20% price rise), aligning incentives to some degree.  It certainly seems more likely that citizens will accept prices at around a realistic estimate of the social cost of carbon if they receive a portion of the revenue.  However it is possible that there would be an incentive to sell too much carbon at some point if this raised more revenue, which I think is the problem you are referring to.  If this problem does arise it is likely to be because some can impose costs on others.  This in turn argues for wider coverage, but this does not solve the problem due to the costs imposed on future generations and ecosystems.  So while I think it is a step forward, this type of scheme does not necessarly get you to a social optimal.  Equally it's not clear from current practice how else you might get there.  The question is whether it helps move in that direction from where we are now, which I think it potentially does.

Thanks once again for raising a very good point.

 

  

 

September 15, 2015    View Comment    

On Development of Carbon Pricing Could Benefit from a Two Hundred Year Old Idea

Hops,

 

My understanding is that revenue under AB32 must by used for climate related purposes, but does not return money directly to citizens.  

Adam

September 15, 2015    View Comment    

On Extrapolating Deployment Trends for Solar PV

Putting in the data you quote for 2013 and 2014 reduces the gradient to 6.16 and the total for 2030 to just over 1700MW.  Also, with this data it is easier to interpret the data as showing some signs of slowing rather than constant acceleration, which would bring the total down further.

April 2, 2015    View Comment    

On Extrapolating Deployment Trends for Solar PV

Data is quite similar for 2013: 37.6 GW from BP and 40.0 GW from Bloomberg New Energy Finance.  The main difference is for 2014, where I do not have data from BP and use Bloomberg's figure of 46.3 GW.  If you think Bloomberg's number is badly out it may be worth discussing the reasons for the discrepancy with them.  

March 31, 2015    View Comment    

On The IEA's Central Projections for Renewables Continue to Look Way Too Low

The wind capacity additions for 2014 are taken from Bloomberg who estimate 49.3 GW.  The Global Wind Energy Council estimate is a little higher at 51.5 GW.

I did not neglect the issue of retirements in suggesting a contraction.  It's simply that the levels of installation in the 1980, 1990s and very early 2000s were so low in comparison with today's levels that there is very little retirement relative to today's installation rates - a bit of repowering for wind almost the only thing happening - and this remains so for many years.  This is indeed shown on your charts.  It's certainly nowhere near making up the shortfall between the IEA's projections and the current installation rates until around 2030.  Hence there would be a contraction in the industry lasting a decade and a half or so under the IEA's projections.  After that replacement requirements for wind will begin to become more material and help recovery, though not for solar.

March 3, 2015    View Comment    

On The Continuing Spread of Carbon Pricing

Hi Simon,

I don't know the answer to this, but I think most don't price emissions from biofuels as they are considered renewables and in principle carbon neutral, although of course most are not.  Also many carbon pricing schemes exclude the power sector, so would exclude transport biofuels on those grounds anyway.  If I find out more I'll get back to you.

Regards,

Adam

January 27, 2014    View Comment    

On The Continuing Spread of Carbon Pricing

Hi Simon,

I don't know the answer to this, but I think most don't price emissions from biofuels as they are considered renewables and in principle carbon neutral, although of course most are not.  Also many carbon pricing schemes exclude the power sector, so would exclude transport biofuels on those grounds anyway.  If I find out more I'll get back to you.

Regards,

Adam

January 27, 2014    View Comment    

On The UK Needs to Take a More Serious Look at Importing Renewable Electricity

Nathan,

Thanks for your comment.  To be clear, I am not suggesting the UK should avoid building new nuclear.  As I say, it does look like the UK needs new nuclear.  Rather, at these sorts of prices (even if the £80/MWh DECC projects is achievable for nuclear), imports of renewables also appear worth a closer look as part of a portfolio of low carbon generation that includes nuclear.  But as yet they do not seem to have received the focus they warrant. 

The cost comparison between nuclear and imported renewables is largely unaffected by the cost of other new UK generation.  The only place the price of other UK generation features in the calculations is in the contract premium, where I have assumed a lower market price for electricity than the cost of new gas plant that DECC estimates, in part because I have, as noted, assumed that it will prove difficult in practice to raise the carbon price to their assumed level of over £70/tCO2.   The additional value of the longer contract may be higher or lower than I have estimated, but if the longer contract did not have value the case the owners would presumably not have sought such a long contract.

There is, as always, a range of assumptions you can adopt in making these kind of adjustments.  For example I noted the potential decrease in the daytime price premium in future.  But provided solar costs fall significantly over the next decade (this is the most critical assumption) it does not appear that changes to other assumptions would invalidate the conclusion that imported renewables look potentially quite cost effective as part (but by no means all) of a programme to decarbonise the power UK power sector.

 

Regards,


Adam

November 19, 2013    View Comment    

On Solar Deployment: Are There Limits as Costs Come Down?

Josh,

 

Thanks.  You make some good points.  I think in particular the point at the end of your first paragraph is critical.  If the cost advantage of solar becomes large enough to finance the load balancing then it's difficult to see what would stop solar becoming predominant.  But that's still some way off.

Also I suspect you will find changes to pricing structures with a move away from mainly per kWh pricing, especially for distriubtion networks.

September 29, 2013    View Comment    

On Solar Deployment: Are There Limits as Costs Come Down?

Thanks Jesse, glad you liked it.

September 29, 2013    View Comment