Arizona Public Service Diversifies Generation Sources | Renewable Energy Project Finance

Arizona has decided to include externalized costs like water use and pollution in their utility resource planning process, with the predictable result that they’ve selected a resource portfolio heavy on renewables and energy efficiency, and light on coal.  Hopefully other states will follow their lead!

Energy Efficiency and Economics at Walnut Mews

Our condo HOA had a meeting last fall, and somebody brought up selling the flat plate collectors on the roof that are part of our defunct solar thermal hot water system.  The 750 gallon cylindrical storage tank rusted out in 2003 after 20 years of service.  The outbuilding that houses it was basically built over the tank, so swapping it out for a new one would have meant either chopping the thing up in place with a cutting torch and building a new one on site, or removing the roof, which nobody was keen on.  Some plumbing got re-routed and the tank sits there still, derelict.  It was also mentioned that the main boiler for our hydronic district heating might be nearing the end of its days.  I volunteered to look into whether it would make economic sense to repair the solar thermal system, and what the options were for the boiler.

Given that flat plate solar thermal collectors generate an average of about 1kBTU worth of heat per day per square foot (according to the US EIA), and given that we have about 250 square feet of collecting area (nine 28 square foot panels), the current system ought to collect something like 250kBTU/day.  Our current boiler consumes 520kBTU/hr worth of gas, meaning that the solar thermal system could at best displace a half hour’s worth of operation each day.  Gas costs about $8/million BTUs, so the boiler costs about $4/hr to run.  If we assume optimistically that system losses are negligible, and that the boiler runs at least half an hour a day 250 days a year (it was only hooked up to the baseboard heating, not the domestic hot water) then the solar thermal system is capable of displacing something like $500 worth of gas each year.  This is a best case scenario though, since the hydronic system needs water that’s hotter than the flat plate collectors can make it (so the boiler will have to do some work to boost the temperature) and because the system losses are almost certainly non-negligible.

Still, $500/year might be a significant savings.  To know whether it’s really worthwhile, we need to know how much it will cost up front to get this savings, and how long we ought to expect to be able to collect it (i.e. what’s the system’s expected lifetime).  I got wildly varying estimates of the cost to get the system up and running again.  At the low end it was $5000, to leave the rusty tank where it is and put a collapsible storage bladder in the crawlspace.  At the high end it was $20,000 to remove the old tank and build a new spray-foam insulated stainless steel one in its place.  I used this calculator to sanity check my energy numbers above (which don’t seem crazy), as well as the estimates.  It suggests that all in, the total system cost including installation would be something like $28,000.  I suspect that a plastic bladder in the crawlspace wouldn’t be as efficient or as durable as the new stainless tank.  For the sake of argument, let’s say the cheap option will only last 5 years, and the expensive one will last 30 years.  The original tank lasted about 20 years.  Here’s what it looks like today:

Derelict Solar Thermal Storage Tank

Continue reading Energy Efficiency and Economics at Walnut Mews

A dispatch from the future

A firsthand account of the floods in Queensland.  Australia has been living in the (climatic) future for some time, facing the prospect of desalinization plants and admitting that most of their agriculture is not viable, given soil both saline and infertile, and the decade long drought.  The government is buying up the water rights in the Murray Darling basin because it’s cheaper than agricultural subsidies, and the rural vote is given disproportionate weight in Australian law.  There is a dark poetry in the fact that Queensland’s export coal mines are underwater today.  None of this is to say that climate change is necessarily behind the floods or the drought or the bush fires from a few years ago, or the mad cold winter in Europe this year, or the forest fires in Russia this summer.  We won’t ever be able to attribute any particular weather event to anthropogenic CO2, but all this is the kind of thing one ought to expect if one opts to change the composition of the homeworld’s atmosphere:

German Passive House building robots

A short video from German home fabricator Hanse House.  They do both stock and custom homes, but both are fabricated off-site.  The video shows their production facility, and some of the techniques for putting together a building in pieces.  It’s pretty awesome.  Half robotic assembly line, and half humans, building to what’s essentially a CAD specification, with pipes and wires already laid in place within the structural elements before it gets loaded on the truck that takes it off to the building — or rather assembly — site, where the foundation awaits:

And here’s a time-lapse of one of their Passive Houses being assembled on-site:

I wonder if they do multi-family buildings too.  What it would take to get a facility like this operating in Boulder County?  Other than a rebound in the housing industry of course.

Boulder’s Passive Aggressive Building Standards

Usually when people say that “better is the enemy of good enough”, they’re pointing out that striving for perfection can be a distraction from just getting the job at hand done.  There are other dynamics that involve these concepts too.  As social animals, we tend to judge ourselves against those around us.  Once our basic needs have been satisfied, our relative wealth or deprivation often becomes more important to us than our absolute level of well being.  We have little concept of how much is enough.  This can lead to the familiar runaway acquisitiveness (keeping up with the Joneses) when there is a well established (or constructed…) social norm favoring consumption.  Less obviously, it can also lead to an inappropriate lack of ambition when faced with an objective task that is not supported by widespread social norms.

Over the last couple of years Boulder has upped its building energy efficiency standards.  The new permitting regime requires buildings to perform better — net of on-site generation like photovoltaics — than the 2006 international building codes (IBC).  Smaller dwellings (< 3000 square feet) have to use 30% less energy than the baseline.  Medium homes (3000-5000 sq ft) need to do 50% better, and large ones (> 5000 sq ft) have to beat it by 75%.  Obviously this is an improvement over the previous situation, but in comparison to what is possible, and what is necessary to combat climate change, it’s actually pretty unimpressive.  Homes of all sizes built to the Passive House standard use 80-90% less energy than the baseline code, and they do it without counting any on-site power generation against the building’s energy consumption, whereas the HERS index that is used in the Boulder code does count on-site generation.  This is an important distinction, because the atmosphere doesn’t cancel out your nighttime coal-fired emissions with the solar electricity that you sell onto the grid during the day.  All it cares about is the total amount of CO2 released.

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The Yeti Homeland Project

I’m not sure what to make of our willingness to participate in the terraforming of the Earth.  To explore it, I’ll consider an alternative history in which Antarctica was marginally habitable, and colonized a million years ago by woolly hominids who developed a Yeti civilization.  Our whaling vessels meet up with them in the 1820s, but it’s so cold down there that nobody feels the need to molest them except for few hardy anthropologists, the occasional overzealous missionary expedition, and the usual cohort of scientists who will study the ends of the Earth, no matter how inhospitable.  Inevitably, the Yeti spend some late nights with the scientists in their hot tubs watching the aurorae.

They get to talking about the magnetosphere, some atmospheric physics, and the geology of their ice-clad homeland.  One day they decide their lives would be better if they could inhabit the entire continent, instead of just clinging to the coastal fringe, and so with the help of some misguided sympathizers, they develop a vast clandestine industrial complex pumping long-lived fluorinated super greenhouse gasses like CF4, C2F6, and SF6 into the atmosphere to warm things up.  These compounds are vastly more powerful warming agents than CO2 and methane.  They are also long lived atmospheric species, sticking around for up to 50,000 years.  If a serious industrial complex were set up to produce and release them en masse, they would close a good chunk of the atmosphere’s thermal infrared window and radically alter the climate for tens of thousands of years.  This atmospheric engineering could be done over the course of an election cycle, especially if the Yeti bastards had help from the cold-hearted Canucks and Russkies.

Would the G-20, the OECD or the UN Security Council stand by while a rogue Yeti nation threatened the billions of people who live in coastal cities, or depend on glacial water supplies, all in the name of Manifest Destiny?  Of course not.  We’d be more likely to bomb their furry white asses back into the Ice Age.

Continue reading The Yeti Homeland Project

A Thousand Splendid Power Plants

Light Pollution

Xcel Energy’s Valmont East Terraforming Station in Boulder, CO. As a side effect, it powers all the lights you see in the background.

James Watt’s industrial revolution was fired by coal, is fired by coal, and shall be fired by coal under the current plan, until death do us part.  Anthracite, lignite and bituminous — it is all nearly pure carbon, sequestered in the shallow inland seas of the Carboniferous, scavenged from a powerful greenhouse atmosphere by the first macroscopic life to colonize the land, 350 million years ago.  It was into these scaly fern tree forests, club mosses, cycads, and giant horsetails that we tetrapods laboriously crawled so long ago, to gasp our first desperate breaths.

Industrial power, carbon and coal are deeply synonymous.  The SI unit of power is named for Watt, and the word “carbon” is derived from the Latin carbo, which means coal.  Many of the super-human abilities we are accustomed to wielding today are intimately bound up with this strange rock that burns.  Our purpose in burning it is to release usable heat, and we consider the release of carbon dioxide and other pollutants to be a side-effect of that process.  In the fullness of time I suspect we will come to see that relationship reversed.  When we look back at today’s coal fired power plants a few centuries from now, we won’t see them as electricity generators.  We will instead see them as components of a massive, coordinated and yet unintended climatic engineering project.  We are effectively terraforming the Earth, participating in the transformation of our planet as a new force of nature.  It’s not the first time life has done something like this.  The cyanobacteria began pumping oxygen into the atmosphere 2.5 billion years ago, incidentally making both fire and macroscopic organisms possible for the first time.  And also incidentally oxidizing away a lot of previously stable atmospheric methane, a powerful greenhouse gas, plunging the Earth into the deep freeze for three hundred million years.  I hope that we can be more mindful of the consequences of our actions than the blue-green algae were, but honestly I’ve got my doubts.

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For Richer or for Poorer: How Much is “Enough”?

I am wearing a sweater.  It was made in Italy, from some of the fuzziest sheepies on the planet.  New it cost more than $100; I know because it had the original tags on it when I bought it, never worn.  I got it for $3 at a thrift store, because it was irresistibly tasty to the ubiquitous keratin loving Tineidae moths — like some of my other woolens, it has a few holes.  That doesn’t mean it isn’t soft and warm.  Last night my friend Elana got a cute little Smartwool top for $6 that would have cost $60 across the parking lot at Neptune’s: another 90% discount courtesy of the insect world.  This is a repeatable exercise.  How do these things lose virtually all of their monetary value, while retaining so much of their sweatery goodness?  The answer I think, is that we have imbued many material things with powers beyond their physical existence.  A merino sweater is not just a way to stay warm and dry while riding your bike uphill.  It is also a way to signal to the other hairless apes that you are of a certain class, or even ideological bent.  Our things have become a means of communication, a way of transmitting information.  These are some very expensive bits and bytes.

I realize that this isn’t news.  We’ve been doing this kind of thing with shells and feathers for almost as long as we’ve been human.  I only bring it up because recently, I’ve found that the information these artifacts transmit to me has been turned on its head.  Having a thing only implies wealth if you have to pay for the thing ahead of time.  In a debt based economy, having a thing means you have promised your future labors to the Rumpelstiltskin thing-brokers far away in their tall sky scrapers.  Today, to have a thing more often implies a kind of indentured servitude.  A poverty of time and flexibility.  And what other kind of poverty is there, really?  What other kind of wealth besides the freedom to choose how you spend your few remaining days on Earth?

Continue reading For Richer or for Poorer: How Much is “Enough”?

Nils Gilman and Deviant Globalization: The Graying of the Markets

We watched a Long Now talk last night by Nils Gilman, entitled Deviant Globalization.  I first ran across Gilman in a shorter talk from a couple of years ago about the global illicit economy — black markets.  He describes deviant globalization somewhat differently.  Trade can be perfectly legal, and still deviant.  He used the example of US men arranging trysts with 14 year old girls in Canada… which amazingly could still be considered legal until 2008, since 14 was the nationwide age of consent.  Sure, it was legal, but who really thought it was okay?  So deviant globalization represents a kind of moral arbitrage.  Demand exists for goods and services which are proscribed in different ways, to different degrees, in different places.  Sometimes they’re socially taboo, and sometimes they’re outlawed, but in all cases there exists a kind of moral disequilibrium gradient that can be exploited.

What united all these extralegal commodity flows […] was the unsanctioned circulation of goods and services that either because of the way they are produced or because of the way they are consumed violate someone’s ethical sensibilities.

One of his main points is that the steepness of that moral or regulatory gradient translates pretty directly into profit margins.  Cocaine increases in value by 1400% when you bring it across the US border.  This creates incredible incentives to get around the rules, even at great risk.  This is why Prohibition rarely works as a policy.  Any attempt at eradication financially empowers those who are willing to continue taking the risks you’re able to impose.

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Empirical Investing

In my previous post I described the stock and bond markets by analogy with a casino, but you might reasonably question the validity of that analogy.  Are market returns really as unpredictable as coin flips?  The real payoff probability distributions obviously aren’t binary; what do they actually look like?

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