Cap & Trade

[Bruce551]

Severin Borenstein on Cap-and-Trade

http://www.greentechmedia.com/articles/read/severin-borenstein-on-cap-and-trade/

“There is a ticking time bomb under these cap-and-trade models.â€

Dr. Severin Borenstein is an outspoken economist and thought leader in carbon economics and energy matters. He serves as the Director of the University of California Energy Institute as well as in a number of other distinguished roles.

His talk at the CalCEF Angel Network monthly meeting was a viewpoint on cap-and-trade policy and its impact on Green House Gases (GHGs) and the price of oil, coal, and natural gas. He summed up his speech last night with these words: "What a downer."

For a bit of background on cap-and-trade you can go here. Note that there is already a market for GHG permits - The EU has been trading GHG permits for 4 years, RGGI in Eastern US is a carbon market and California has passed legislation in this regard.

But according to Borenstein, "There is a ticking time bomb under these cap-and-trade models. Most studies ignore the supply elasticity of fossil fuels." "Analysis to date hasn't focused on resource price change in response to cap-and-trade -- resource scarcity and price changes are likely to be central."

Here is the argument:

Pricing GHG permits at $30 per ton does not impact coal usage.

"If GHG permits are at $30 to $40 per ton - will that cut down coal production or oil production? The answer is almost certainly "no"" according to Borenstein.

He adds that, "At $60 per ton, coal usage goes down but the cost of coal actually gets cheaper. It's a pretty disturbing result."

According to Borenstein, it may take GHG permits priced at $80-$100 per ton to drive coal out of the market.

"You have to drive coal out of the market. You have to drive the price of coal down until it isn't worth mining anymore," adding "Or you drive the price of natural gas so high that it is not competitive with other renewable sources."

Strikingly for an economist, Borenstein essentially punted on the value of cap-and-trade - he abandoned the value of cap-and-trade and carbon taxes and suggested that the main instrument in reducing GHGs is going to have to be technological change. He added that we probably need more money channeled to energy R&D and that we need more technological "hail mary passes."

Here are some choice quotes from his speech:

* "The numbers we hear for tradable permits are substantially too low."

* "If you don't get China and India on board - none of this works."

* "None of the current technologies can compete with fossil fuels."

* "It's worse to subsidize Green than to tax Brown."

* "Subsidizing green power essentially taxes energy efficiency."

* "We're going to have to have higher prices to have any impact on GHGs."

* "None of this changes if you are talking taxes instead of cap-and-trade."

He concluded by saying that $80-$100 per ton GHG prices, whether by cap-and-trade or taxes, is "so politically unpalatable" that only a technological fix might work to lower GHGs.

Comments:

Ski Milburn 01/12/10 4:13 PM "

I attended a conference in Brussels a year ago where a senior OPEC official said essentially the same thing regarding carbon prices, ie $80-100 / ton if you really want to impact oil imports. A major German automaker client of mine had done an independent analysis and come to pretty much the same conclusion. Neither thought the US had the political will to impose something this tough. They’re right.

It’s politically easier to subsidize an upstart (like PV) than to tax an incumbent (like coal), but I’ve dealt with the perverse disincentive of “taxing energy efficiency†in my own work. The effect is real.

But here’s one difference between Cap & Trade and Carbon Taxes worth considering. I might work pretty hard to get a Carbon Tax instituted, but I will work equally hard against a Cap & Trade regime that will just give Goldman Sachs another slug of our GNP.

gotmercury? 01/12/10 4:53 PM "

To implement effieicny on a massive scale (which is necessary) we need to decouple utility revenues from the incentive to sell more kWh. Why is there so little talk about this issue from energy/climate experts? All of the US should reformulate tariffs for utilities to allow for market competition for efficiency. Until this is done the system can not change.

I think safe to say that Energy prices are going keep rising, maybe doubling or tripling within the 10 years. Buy energy efficient stuff and plan your life accordingly.

One more thing, bend over and your kiss ass good bye unless we get miracle. Obama the only miracle I've seen in my life time, but the human race starting wear him down, to many selfish assholes in this world

[luckyphil247]

So buy energy stocks ???

[Bruce551]

Thin Flim PV players

Key Players

Private Companies:

Nanosolar — The five-year-old company started to manufacture and ship panels this week.

Miasole — The company, which has over $100 million in funding and named a new CEO back in September, is having difficulty getting their CIGS cells scaled up.

Konarka — Using polymers to make their so-called “power plastic,†the Lowell, Mass., company has raised $105 million. Ex-CEO Berke told us they hope to get product to market by late 2008.

Uni-Solar — A wholly owned subsidiary of Energy Conversion, Uni-Solar makes about 28 MW of thin-film, peel-and-stick triple junction amorphous silicon PV a year from their one production plant.

HelioVolt — Another startup with over $100 million in capital, the Austin, Texas-based company plans to start production of its CIGS solar technology in late 2008.

SoloPower — New to the game, SoloPower raised $30 million this summer. They plan on using a proprietary electrochemical process to manufacture their CIGS PV at a lower cost compared with other CIGS and silicon-based methods.

PowerFilm Solar — With its various integrated PV systems, this company is trying to put their solar in everything, from metal roofs to membrane systems to architectural fabric. They’re even working with the U.S. to make solar-powered tents. They appear to be using a rather first generation thin film technology, and according to their website they use silicon for the panels. The company was founded back in 1988.

Solexant — Dubbed a “secretive solar cell developer,†by VentureBeat, Solexant raised $4.3 million this summer for its nanostructured solar cells, which are said to collect energy from the entire solar spectrum and will be manufactured via roll-to-roll methods.

PrimeStar Solar — General Electric recently took a minority interest in this company, which uses the more mature technology of cadmium telluride (CdTe) to make its cells.

Innovalight — The company’s technology uses silicon nanoparticles in a liquid silicon ink; it has raised $28 million for its silicon ink printing technology.

Public Companies:

First Solar (FSLR) — First Solar’s panels are modular and are aimed at large-scale installations. Shares of the company, which has led the way in proving the scalability of CdTe technology, have skyrocketed since their IPO in November of 2006, ending Wednesday’s session at $247.98.

DayStar Technologies (DSTI) — DayStar pulled in nearly $68 million in October from a follow-on offering of 15 million shares of common stock. The company is using the money to build a 25MW manufacturing line for its CIGS solar cells.

Ersol (ERSLF) — With four manufacturing plants in the U.S. and Germany, Ersol just signed an agreement with Wacker Chemie for silicon production.

Venture Firms:

* Benchmark Capital – Nanosolar

* Convexa Capital – Innovalight and SoloPower

* Angeleno Group – Konarka

* Draper Fisher Jurvetson – Konarka

* Mohr Davidow Ventures – Nanosolar

* New Enterprise Associates – Konarka, HelioVolt

* SAC Capital – Nanosolar

* OnPoint Technologies (the U.S. Army’s Private Equity Fund) – Nanosolar

* Sequel Venture Partners – Heliovolt

* Noventi Ventures – Heliovolt

* Passport Capital – Heliovolt

* GLG Partners – Nanosolar

Also, add

Cylindrical CIGS-based thin-film PV specialist Solyndra has passed the US$2 billion in sales backlog with the signing of a new long-term sales agreement with German systems integrator Umwelt-Sonne-Energie GmbH, worth US$238 million through 2013. Unlike other thin-film producers, Solyndra is specifically targeting only rooftop installations, due to its unique solar system technology that is claimed to generate more electricity on an annual basis, compared to other technologies from typical low-slope commercial rooftops. In October 2008, Solyndra’s backlog stood at US$1.2 billion, and the company has since secured over US$800 million in long-term contracts.

“Solyndra’s revolutionary technology redefines performance for large roofs compared to conventional PV technologies in terms of installation cost, non-penetrating wind performance, rooftop loading, and energy production per roof,†commented Arnold Berens, Managing Director of Umwelt-Sonne-Energie.

http://www.solyndra.com/

How Big is the Market?

The solar industry as a whole is expected to grow to $51 billion in 2015 from $11 billion in 2005, according to a projection by Clean Edge Inc., a market research firm focused on clean technology — and the thin-film solar market is forecast to grow to account for 20 percent of the overall solar market in 2010 from just 8 percent in 2006, according to GreenTechMedia. Thin-film PV alone is expected to grow to $7.2 billion by 2015 from just over $1 billion today, according to research firm NanoMarkets.

[Bruce551]

Obama: Fed’s GHG Emissions Must Drop 28% by 2020

A national cap-and-trade program for greenhouse gasses might be in limbo, but that hasn’t stopped President Obama from announcing on Friday an emissions reduction target for federal operations. The president, fulfilling an executive order signed in October, said the federal government will reduce its emissions by 28 percent by 2020 over a 2008 baseline year.

“Our goal is to lower costs, reduce pollution, and shift federal energy expenses away from oil and towards local, clean energy,†Obama said in a statement.

The federal government – occupying nearly half a million buildings, operating more than 600,000 vehicles and employing more than 1.8 million civilians – spent more than $24.5 billion on electricity and fuel in 2008 and is the largest energy consumer in the U.S. economy.

Federal departments and agencies will achieve emissions reductions by measuring their current energy and fuel use, becoming more energy efficient and shifting to clean energy sources like solar and wind, the statement said.

The announcement should be welcome news for the growing number of firms, such as Kleiner Perkins-backed Hara and German software giant SAP, developing products and services that help organizations track and manage their carbon emissions.

Companies that help building owners reduce energy use through efficiency measures, as well as renewable energy developers, also stand to gain from the new federal mandate.

While the new target is limited to federal departments and agencies, private businesses are increasingly looking to track and understand their carbon emissions across their operations.

Earlier this week, the Security and Exchange Commission issued guidelines on what publicly traded companies must disclose to investors about climate-related effects on their businesses. One issue they must consider is the potential risk to profits from environmental protection laws, such as those mandating a reduction in green house gas emissions.

In related news, the Obama administration yesterday gave notice to the United Nations that the U.S. will aim for a 17 percent emissions cut by 2020 over 2005 levels. The Copenhagen Accord agreed by the U.S. and other countries at U.N. talks in December calls for governments to submit non-binding climate plans by the end of this month. But the final U.S. 2020 emissions goal depends on Congress passing a climate bill.

Besides calling for reduced emissions, the executive order signed last fall requires federal agencies to meet other sustainability goals.

Those goals include a 26 percent improvement in water efficiency by 2020, a 50 percent recycling and waste diversion by 2015, and the implementation of a net-zero-energy building requirement by 2030.

The government said agencies are already taking actions toward these goals. The Central Intelligence Agency, for example, has recently opened two LEED-certified buildings that reduce energy and water use over conventional construction, and the Environmental Protection Agency is upgrading its fleet over the next decade to hybrid-electric and plug-in vehicles.

Getting things done despite Republicans

[Bruce551]

Asia is the fastest growing market for liquid natural gas (LNG). Currently, Japan is the largest buyer. Japan and South Korea together make up 53% of current global regasification capacity. (That is, the ability to import LNG and turn it back into a gas for consumer and industrial use.) But demand elsewhere in Asia is catching up:

Asia's Apetite for Natural Gas

"So how will the market meet this surge in Asian demand? That's where LNG from nearby Australia comes in. The amount of money going here is just staggering. The Gorgon project alone - a joint venture between Exxon Mobil, Chevron and Shell in Australia - will cost some $50 billion. It already has supply contracts from India and China worth $60 billion and will surely get more before it opens in 2014.

When demand for a commodity is high the price rises.

According to EGAT, Thailand will not able to meet Natural Gas demand by 2020. This is EGAT's justification for building a Nuclear Plant.

Another option from National Renewable Energy Laboratory (NREL) USA.

The placement of PV in a single location also ignores one of PV’s greatest assets: the ability to place PV generation at or very close to load. By deploying photovoltaics on building rooftops, there is little to no cost associated with land, and the system is deployed at the point of use, which minimizes transmission and distribution requirements and losses.

Consulting data, which assumes 22% availability of roof area for residential buildings in cool climates, and 27% in warm/arid climates (due to reduced tree shading). For commercial buildings, the availability is estimated at 60% for warm climates and 65% for cooler climates.

The total rooftop supply is estimated at 348 GW for residential rooftops and 313 for commercial – or a total of about 661 GW for the buildings sector.

Power generation in the USA is about 1,000 GW

The total annual resource is about 400 terawatt hours (TWh) for commercial and 419 TWh for residential buildings.

For example, the typical annual output of a flat-mounted 1 kW system in San Diego, California, is about 1,310 kilowatt hours (kWh), while the same system in Seattle, Washington, would produce about 850 kWh.1 As a result, the LCOE of the Seattle system is about 1.5 times greater than the San Diego System, ignoring any differences in financing and incentives.

LCOE = annualized cost/annual energy production

The bottom line is Thailand has huge resource in solar energy, many many Gig-a-Watts of solar power potential from PV RoofTop installed on malls, warehouses, and factories.

From the Post bag:

Not ready for nuclear

How can a country, with corruption as a mode of everyday life, even consider thinking about building nuclear power plants? The GT200s for 550,000,000 baht purchased before it was tested: incompetence? Without a doubt. And Map Ta Phut... an environmental nightmare, and Thailand considers building NPPs.

The country is an environmental disgrace, with trash thrown everywhere, trash burned, rice fields and roadside brush burned on a daily basis. Construction debris dumped in remote areas or even on major roads.

The sad scenario is that not one politician, responsible company or individual will stand up and say, ''Every citizen has a responsibility to make the environment healthy.'' And nobody has the vision to step forward and speak out!

RFCM

Do Thailand's citizens have a vision for the future?

[LakeGeneve]

Crap and Raid!?! (Sorry but I am pessimistic about such models)

Do Thailand's citizens have a vision for the future?

What is the answer to the query, " do most Thais think about the long term in their day to day decision making"?