Geothermal energy is the Earth’s own internal heat. It’s a huge potential resource, but so far it’s seen only very limited use. Traditional geothermal power can only work where there are naturally existing hydrothermal systems that bring the heat of the interior to the surface. A new technique called enhanced (or engineered) geothermal systems (EGS) may make geothermal power much more widely available. If it can be scaled up commercially, EGS will enable us to create hydrothermal systems anywhere there’s hot rock not too deeply buried — which includes a large swath of Colorado. This is potentially significant in the context of creating a zero-carbon electrical system because like hydroelectricity, and unlike wind and solar, geothermal power can be dispatchable: you can turn it on and off at will. This makes it a great complement to intermittent renewable power, as it can be used to fill in the gaps then the wind’s not blowing or the sun’s not shining. It remains to be seen whether it’s technically feasible, and if so at what price, and on what timeline, but it’s certainly worth investigating.
Passive Passion is a good 20 minute long film introduction to the German Passivhaus energy efficiency standard, which reduces building energy use by 80-95% (depending on what existing code you compare it to). It looks at the roots of the design standard in Germany, and gives a few examples from the tens of thousands of Passivhaus certified buildings in Europe, including single family homes, row houses, apartment buildings, public low income housing, and office buildings. They talk about what makes the standard work: airtight building envelopes, super insulation, no thermal bridging, heat recovering ventilation. The film also looks at a few builders and designers in the US trying to popularize the cost effective implementation of these methods. It’s clearly possible. The examples are out there today. We just have to decide to do it! If we’re going to get to carbon zero, someday our buildings will all have to function something like this.
The American Legislative Exchange Council (ALEC) is at it again, trying to roll back state renewable energy standards nationwide. The argument behind their model bill, entitled the Electricity Freedom Act, is that renewable energy is simply too expensive. The Skeptical Science blog offers a good short debunking of this claim, based on the cost of electricity in states with aggressive renewable energy goals, and how those costs have changed over the last decade. And this is before any social cost of carbon or other more traditional pollutants is incorporated into the price of fossil fuel based electricity.
- States with a larger proportion of renewable electricity generation do not have detectably higher electric rates.
- Deploying renewable energy sources has not caused electricity prices to increase in those states any faster than in states which continue to rely on fossil fuels.
- Although renewable sources receive larger direct government subsidies per unit of electricity generation, fossil fuels receive larger net subsidies, and have received far higher total historical subsidies.
- When including indirect subsidies such as the social cost of carbon via climate change, fossil fuels are far more heavily subsidized than renewable energy.
- Therefore, transitioning to renewable energy sources, including with renewable electricity standards, has not caused significant electricity rate increases, and overall will likely save money as compared to continuing to rely on fossil fuels, particularly expensive coal.
But really, go read the entire post for more detail.
Passive Passion is a great 20 minute long documentary about the German Passive House energy efficiency standard. It looks at the roots of the design standard in Germany, and gives a bunch of examples of implementations in Europe, from single family homes to row houses, apartment buildings, public housing, office buildings, etc. Talks about what makes the standard work: airtight building envelopes, super insulation, no thermal bridging, heat recovering ventilation. Also looks at a few builders and designers in the US trying to popularize these methods, and do it cost effectively. Clearly it’s possible, we just have to decide to do it!
The Empowerhouse is an affordable, net-zero Passivhaus design, that came out of the Solar Decathlon competition. In collaboration with Habitat for Humanity, the team as built a duplex in the Washington DC area that is site net-zero, despite having the smallest solar array of any of the homes entered in the competition. It was able to do this because it took a Passivhaus approach, aggressively minimizing all loads first, sealing the building nearly airtight, and super-insulating it. They also integrated a rooftop garden and terrace. By sharing the heat management equipment between the two relatively small units, they were able to reduce costs substantially. All this means the low income residents will spend much, much less on energy over the lifetime of the building. We need more affordable housing that looks like this.
The NRDC has a plan that would allow the EPA to regulate GHG emissions from existing power plants, without either capitulating to the power sector, or banning coal outright immediately (which would be politically… uh, difficult). The trick is to use fleet-based target, as we do with vehicle emissions standards. The natural (regulatory) unit is the state, so each state could have its own carbon intensity targets or degression pathway, tailored to its initial generation mix. The carbon intensity would decline over time, eventually squeezing coal out of the mix, and could allow energy efficiency improvements to count toward the goal, at least initially. It really amounts to a kind of back-door cap-and-trade for the power sector, and it can be implemented by Obama, all on his lonesome, without any help from the intransigent congress. The hard part here will be setting stringent enough long term targets. 40% reduction by 2025? 90% reduction by 2050?
The LA Times is reporting on the impacts of utility-scale solar power plants in SoCal’s desert counties. What do you get when you start building multi-billion dollar solar installations? Solar land-men, in three piece suits, leaning on your local politicians for favorable tax treatment? Solar astro-turf campaigns, with corporate sponsored buses bringing solar supporters to public meetings? Yeah. Of course you do. How else could it be, within our system? If we do the responsible thing for the climate, and create a wholesale shift away from fossil fuel to renewables like wind and solar, we will have replaced one trillion dollar industry with another, and trillion dollar industries all behave badly. At some level, what we’re fighting for is to create a trillion dollar climate advocate. An incumbent corporate interest, invested in not breaking the sky. And when we’re done, we’ll still have all the greater governance issues lying around, waiting to be dealt with.
The Union of Concerned Scientists has gone through the catalog of America’s coal plants, and found hundreds of mostly small, old, polluting, inefficient generating units that just aren’t worth operating any more, even on a purely economic basis. They looked at several different sets of assumptions, including different natural gas prices going forward, a price on carbon, whether or not the competing natural gas fired generation would need to built new, or whether it existed already with its capital costs paid off, and whether or not the production tax credit for wind ends up being renewed. In all of the scenarios considered, they found substantial coal fired generation that should be shut down on purely economic grounds, above and beyond the 288 generating units that are already slated for retirement in the next few years. They also found that some companies — especially those in traditionally regulated monopoly utility markets in the Southeast — are particularly reluctant to retire uneconomic plants, perhaps because they can effectively pass on their costs to ratepayers, who remain none the wiser.
Risk isn’t free; it’s a traded commodity with a price. Most prudent financial entities with a lot of exposure to the prices of natural resources try to manage unpredictable fluctuations in those prices by trading in risk. Producers worry about prices being too low; consumers need to protect against prices being too high. Risk trading (hedging) allows the two types of parties to share these risks, and so create a more stable market overall. Stable prices are good for business. You can plan around them in the long term, even if they end up being a bit higher on average.
In regulated electricity markets like we have in Colorado, fuel price risk often ends up being borne primarily by the rate payers rather than by the utility companies. In theory, state regulators ought act on behalf of the public (energy consumers) to accurately represent their tolerance of or aversion to risk in the resource planning process. Historically, the implicit assumption has been that the rate paying public is fairly risk tolerant, i.e. very little has been done from a regulatory point of view to avoid the potential detrimental effects of future fuel price volatility. This is a historical accident. Until recently, we didn’t have much choice in the matter. Of all the major sources of power available a century ago when we began electrifying society, only hydroelectric is similar in terms of its capital and operating structure to distributed renewables like wind and solar. All three have relatively large up front capital costs, and low ongoing operating and maintenance expenses. But for most of the time we’ve had electricity, most of that electricity has necessarily been dependent on fossil fuels, and so the question of whether or not customers wanted to take on the risk of future fuel cost fluctuations was immaterial. Fuel was the only option for expanding our electricity supply once we’d tapped the easily accessible hydro — if you wanted lots of power, it simply came with fuel price risks. This is no longer the case. Today, we have options that trade off between cost and risk, but so far as I can tell we haven’t done a good job of talking about the entire spectrum of possibilities. Broadly they seem to fall into four categories:
- Traditional fossil fuel-based power, that exposes rate payers to the full range of future price fluctuations.
- Capital intensive, fuel-free power like wind, solar, enhanced geothermal and hydro which have a range of prices, that are very predictable over the 20+ year lifetime of the capital investment.
- Fossil fuel-based power that is aggressively hedged, in order to protect rate-payers against future fuel price fluctuations.
- Fuel-free power with predictable future costs, combined with someone else’s fuel cost risks, which rate-payers would be paid to take on.
The first two options are the most commonly discussed. The third — hedged fossil fuels — is becoming somewhat more common, with some public utility commissions requiring the utilities they regulate to dampen fuel cost fluctuations. However, they generally do not require the utilities to hedge to the point where the risk profile of the fossil fuel option is similar to that of fuel-free power sources. This is what makes the fourth option interesting.
Minneapolis is Xcel’s home town, and a much bigger market than Boulder. The city is now talking about allowing their franchise agreement to lapse, in order to pursue more aggressive renewable energy policies than state law will allow if they’re served by the monopoly utility. The article gives a nod to Boulder’s votes over the last two years to explore the alternatives to franchise agreements, including the formation of a municipal utility. It’s great to see another much larger city looking at its options, and as far as pushing the overall utility business model to change, it’s great to see this happening within Xcel’s service territory. There’s a threshold out there somewhere, beyond which the current arrangement is no longer stable, and even the utility will start begging for something different. The faster we can get there, the better.