Category: Energy Matters

The twentieth century way of life has been made available, largely due to the miracle of cheap energy. The price of energy has been at record lows for the past century and a half.As oil becomes increasingly scarce, it is becoming obvious to everyone, that the rapid economic and industrial growth we have enjoyed for that time is not sustainable.Now, the hunt is on. For renewable sources of energy, for alternative sources of energy, for a way of life that is less dependent on cheap energy. 

  • China invests half a trillion in smart grid

    The “smart grid” is the merging of electricity infrastructure with information technology. The purpose is to add monitoring, analysis, control and communication capabilities to any national electrical delivery system to maximize efficiency while reducing energy consumption. Creating a unified power grid and upgrading aging power systems will increase productivity, reduce carbon dioxide emissions and increase national security.

    The Need for a “Smart Grid” in China

    In 2002, China established five independent electricity generating companies and several transmission companies. The five generators have an equal share of the assets — China Huaneng, China Datang, China Huadian, Guodian Power, China Power Investment — and compete to sell electricity.

    The State Grid Corporation of China (SGCC), the Southern Power Grid Corporation and the Eastern China Grid Corporation are among China’s transmission companies. The largest utility in the world, SGCC serves 26 provinces and 1.08 billion people with a peak load of 343 gigawatts (GW) and total investment in grid construction valued at US $31.8 billion in 2007. China’s second largest utility, China Southern Power Grid, is ranked 226th in Fortune Magazine’s Global 500 listing with revenues exceeding US $30 billion.

    Throughout China, the existing regional grids have weak interconnections between provinces and largely non-existent interconnections between grids. In order to solve this deficiency, the Chinese government has plans to create a unified national power grid network by 2020.

    The plans include what is known as the “West-East Electricity Transfer Project,” which requires the construction of three major west-east transmission corridors: North, Central and South. The transmission capacity of each corridor is expected to reach 20 GW by 2020. While planning for such major infrastructure investments, the government would be well-positioned to lay the foundation for “smart grid” capacity across the country.

    The Eastern China Grid Corporation initiated a feasibility study of “smart grid” technology in October 2007. Shi Junqing, the General Manager of Eastern China Grid Corp. described the findings earlier this year. In terms of the large load on its grid, the assets that it has built into its system, the necessity of continuing to build out the network and the increasing environmental, safety, reliability and efficiency pressures that it faces, Eastern China Grid Corp. believes that the conditions are now ripe for it to put in place a smart grid system; to that end the company has established a goal of gradually putting in place the elements of a “smart grid” over the coming years.

    Smart Grid” Accommodates Breakthrough Technology

    The State Grid Corporation of China (SGCC) has plans to create a nation-wide electric-vehicle charging network with charging stations currently installed in Shanghai, Beijing, and Tianjin to name a few. It was recently announced that General Motors is collaborating with the SGCC to meet Chinese market demand for the Chevy Volt.

    However, without aggressive investment in “smart grid” technology, this initiative may stumble as it attempts to expand across the country. The plug-in electric vehicle will depend on network improvements as much as today’s car depends on petrol stations, which will require sophisticated appliances to communicate oscillations in energy supply and demand.

    Exporting Smart Grid Technology to Other Asian Countries

    In addition to creating a “smart grid” infrastructure, China also has the opportunity to export “smart grid” best practices. Recently it was reported that the State Grid Corporation of China won a US $3.95 billion bid for a 25-year contract to manage the Philippines’ electricity grid (arguably the largest privatization deal in Philippines’ history). A significant opportunity exists for China to collaborate with the rest of the world on investing in the grid of the future.

    China is in a unique position to develop the world’s most advanced power distribution network by adopting smart grid technologies as it further develops and enhances its power grid. The question is whether China is willing to take the lead and be at the forefront of the “smart grid” revolution that is surely the future of worldwide power distribution.

  • Cuba joins big league oil nations

    If confirmed, it puts Cuba’s reserves on par with those of the US and into the world’s top 20. Drilling is expected to start next year by Cuba’s state oil company Cubapetroleo, or Cupet.

    “It would change their whole equation. The government would have more money and no longer be dependent on foreign oil,” said Kirby Jones, founder of the Washington-based US-Cuba Trade Association. “It could join the club of oil exporting nations.”

    “We have more data. I’m almost certain that if they ask for all the data we have, (their estimate) is going to grow considerably,” said Cupet’s exploration manager, Rafael Tenreyro Perez.

    Havana based its dramatically higher estimate mainly on comparisons with oil output from similar geological structures off the coasts of Mexico and the US. Cuba’s undersea geology was “very similar” to Mexico’s giant Cantarell oil field in the Bay of Campeche, said Tenreyro.

    A consortium of companies led by Spain’s Repsol had tested wells and were expected to begin drilling the first production well in mid-2009, and possibly several more later in the year, he said.

    Cuba currently produces about 60,000 barrels of oil daily, covering almost half of its needs, and imports the rest from Venezuela in return for Cuban doctors and sports instructors. Even that barter system puts a strain on an impoverished economy in which Cubans earn an average monthly salary of $20.

    Subsidised grocery staples, health care and education help make ends meet but an old joke – that the three biggest failings of the revolution are breakfast, lunch and dinner – still does the rounds. Last month hardships were compounded by tropical storms that shredded crops and devastated coastal towns.

    “This news about the oil reserves could not have come at a better time for the regime,” said Jonathan Benjamin-Alvarado, a Cuba energy specialist at the University of Nebraska.

    However there is little prospect of Cuba becoming a communist version of Kuwait. Its oil is more than a mile deep under the ocean and difficult and expensive to extract. The four-decade-old US economic embargo prevents several of Cuba’s potential oil partners – notably Brazil, Norway and Spain – from using valuable first-generation technology.

    “You’re looking at three to five years minimum before any meaningful returns,” said Benjamin-Alvarado.

    Even so, Cuba is a master at stretching resources. President Raul Castro, who took over from brother Fidel, has promised to deliver improvements to daily life to shore up the legitimacy of the revolution as it approaches its 50th anniversary.

    Cuba’s unexpected arrival into the big oil league could increase pressure on the next administration to loosen the embargo to let US oil companies participate in the bonanza and reduce US dependency on the middle east, said Jones. “Up until now the embargo did not really impact on us in a substantive, strategic way. Oil is different. It’s something we need and want.”

  • Local power generation saves regions and economy

    For many years, rural economies have depended upon the land: agriculture and forestry, minerals and fossil fuel resources, beautiful landscapes. But not everyone can farm. Minerals and fossil fuels vary widely in price and are finite. Beautiful landscapes may remain pristine, but tourism is a fickle business.

    Renewable energy development may be the catalyst for changing the rural economy. The boom in corn ethanol and soy biodiesel has provided many farmers with a market price above the cost of production for the first time in a generation. Large wind projects are providing steady lease payments to farmers who surrender a small portion of their land to the turbines.

    These benefits are sustainable because the resource is limitless. Wind will blow no matter how many turbines harness its energy and the sun will shine on rooftops and fields whether they’re bare or lined with solar panels. Simply put, the rural renewable resource is vast: the wind in just the Dakotas could supply 80 percent of U.S. electricity, the sun in Nevada could power the entire country. We could fuel half the nation’s cars with biofuel made of non-food biomass.

    This renewable resource can be harnessed in a centralized fashion or a decentralized one. But the rewards of harnessing it will mirror the style of development. A massive wind farm in the Dakotas and a big solar plant in Nevada may provide enough electricity to power the nation, but they will do so only with a massive investment in long-distance power transmission and use of eminent domain. The beneficiaries of this development will not be rural residents and farmers, but instead will be the same big investors that dominate existing electricity markets.

    If our vision is grand — to get to 100 percent renewable power — some centralized power production is inevitable. But a decentralized network of modest wind farms and biorefineries can harness the vast renewable resource of rural areas and bring home the economic benefits as well. The success of homegrown renewable energy lies in two key findings. Very large renewable power plants and biorefineries cannot be locally owned past a certain size because the capital costs are beyond the community’s wherewithal. Typically this occurs when the facilities have reached a scale such that the cost savings of “bigness” are minimal. But the rewards of local ownership are significant, delivering anywhere from 25 to 300 percent more economic impact to rural communities from identically sized absentee owned facilities.

    Federal renewable energy policy tends to disregard these facts. Renewable power tax credits limit the opportunities for local ownership by requiring investors to have significant tax liability and hampering the ability of cooperatives, nonprofits, units of government and other aggregators of average people from becoming investors. Some incentives, such as accelerated depreciation, are only provided to commercial projects, with no comparable incentive for residential projects. The result is few locally owned projects, except in states with strong policies favoring such development. It’s as though the federal nutrition programs were designed to fight hunger with McDonald’s coupons – providing plenty of calories – when supporting home cooked meals would do a lot more for nutrition and the overall health of the nation.

    There are policy alternatives that do much more for energy and economic security. Renewable energy payments (also known as feed-in tariffs) provide stable, long-term incentives without bias against local ownership. They also wouldn’t expire regularly, as federal tax credits are threatening to do yet again.

    The coming US $1 trillion investment in rural renewable energy will help secure America’s energy future, but it also requires a choice. Will we build large, centralized power plants and biorefineries that bypass the rural communities whose resources we tap? Or will we change our policies to disperse the development of renewable energy and its financial benefits more broadly, securing our economic future, as well?

    Readers can find more on confluence of rural economic development and renewable energy policy in ILSR’s latest report: Rural Power: Community-Scaled Renewable Energy and Rural Economic Development.

    John Farrell is a research associate at the Institute for Local Self-Reliance, where he examines the benefits of local ownership in renewable energy. His latest paper, Wind and Ethanol: Economies and Diseconomies of Scale, uncovers why bigger isn’t necessarily better. He’s a graduate of the University of Minnesota’s Humphrey Institute of Public Affairs and currently resides in Minneapolis, Minnesota.

  • GM imports electric car

    From the Australian

    ONE vision for the the future of motoring in a carbon challenged world has gone on display at the Australian International Motor Show in Sydney, with GM Holden revealing the Volt electric car.

    General Motors recently confirmed plans to sell the Volt in the United States from late 2010.

    It can travel up to 64km purely on electric power and can then switch to a small petrol engine.

    The car’s batteries can be recharged from a standard outlet in about three hours.

    The car is yet to be confirmed for the Australian market but GM Holden chairman and managing director Mark Reuss today said its appearance at the Sydney show gave local motorists an early view of one of the most important technologies shaping the future of sustainable transport.

    “It’s a reflection of the importance of the Australian market for General Motors that a vehicle as significant as Volt has been provided for this show,” Mr Reuss said.

    “This technology is potentially the most exciting addition to GMs’ range of alternative fuels on the horizon.

    “As we move forward, it will be innovative solutions such as Volt that will sustain global motoring by reducing our dependence on foreign oil.”

  • EU plans coal phase out

    The new rules require final approval from the European parliament and EU member states. If granted, they would transform the economics of burning coal to generate electricity.

    The move came despite fierce resistance from power industry lobbyists, who said the EU’s aggressive emissions-cutting targets should be weakened because of the global financial crisis.

    Avril Doyle, an Irish MEP on the committee, said: “For all the trouble we have, the single greatest challenge facing us is climate change.”

    The committee backed proposed changes to the EU emissions trading scheme, a program in which the bulk of permits are handed out to companies for free. Members voted in favour of auctioning all emissions permits after 2013 for power companies.

    The committee proposed that other polluting industries, such as steelmaking, should pay for 15per cent of permits in 2013, rising to 100 per cent by 2020.

    It had been unclear how the ETS program would evolve after 2012. The committee also offered to plough $14 billion from the scheme into carbon capture and storage research, an untried technology designed to strip out greenhouse gases at source and store them underground.

    The bill is a key plank of the EU’s plan to cut Europe’s carbon dioxide emissions by 20 per cent by 2020.

    The CBI welcomed the scheme yesterday, saying it would provide greater clarity for businesses.

    Europe’s renewable energy industry endorsed the decision. “This new target underlines the urgency of action to deliver clean, sustainable energy now if we are to keep global temperatures within acceptable limits,” said Maria McCaffery, of the British Wind Energy Association.

    A vote before the full European parliament is likely in December, although opposition is expected from some heavily coal-dependent countries, such as Poland. France, which has the EU presidency at the moment, wants to enshrine the bill in law by the end of the year.

    Democratic leaders in the US House of Representatives yesterday proposed to reduce by 80 per cent in the next 42 years the gases from power plants, transportation and factories. The draft legislation would begin slowly, capping emissions of heat-trapping gases released by transportation and power plants first, then moving to other sectors of the economy.

  • Danish island performs energy miracle

    Jorgen Tranberg looks a farmer to his roots: grubby blue overalls, crumpled T-shirt and crinkled, weather-beaten features. His laconic manner, blond hair and black clogs also reveal his Scandinavian origins. Jorgen farms at Norreskifte on Samso, a Danish island famed for its rich, sweet strawberries and delicately flavoured early potatoes. This place is steeped in history – the Vikings built ships and constructed canals here – while modern residents of Copenhagen own dozens of the island’s finer houses.

    But Samso has recently undergone a remarkable transformation, one that has given it an unexpected global importance and international technological standing. Although members of a tightly knit, deeply conservative community, Samsingers – with Jorgen in the vanguard – have launched a renewable-energy revolution on this windswept scrap of Scandinavia. Solar, biomass, wind and wood-chip power generators have sprouted up across the island, while traditional fossil-fuel plants have been closed and dismantled. Nor was it hard to bring about these changes. ‘For me, it has been a piece of cake,’ says Jorgen. Nevertheless, the consequences have been dramatic.

    Ten years ago, islanders drew nearly all their energy from oil and petrol brought in by tankers and from coal-powered electricity transmitted to the island through a mainland cable link. Today that traffic in energy has been reversed. Samsingers now export millions of kilowatt hours of electricity from renewable energy sources to the rest of Denmark. In doing so, islanders have cut their carbon footprint by a staggering 140 per cent. And what Samso can do today, the rest of the world can achieve in the near future, it is claimed.

    Last year, carbon dioxide reached a record figure of 384 parts per million – a rise of around 35 per cent on levels that existed before the Industrial Revolution. The Intergovernmental Panel on Climate Change has warned that such changes could soon have a dramatic impact on the world’s weather patterns. Already, Arctic sea ice is dwindling alarmingly and scientists say the world has only a few years left to make serious carbon-output cuts before irreversible, devastating climate change ensues. Samso suggests one route for avoiding such a fate.

    Everywhere you travel on the island you see signs of change. There are dozens of wind turbines of various sizes dotted across the landscape, houses have solar-panelled roofs, while a long line of giant turbines off the island’s southern tip swirl in the wind. Towns are linked to district heating systems that pump hot water to homes. These are either powered by rows of solar panels covering entire fields, or by generators which burn straw from local farms, or timber chips cut from the island’s woods.

    None of these enterprises has been imposed by outsiders or been funded by major energy companies. Each plant is owned either by a collective of local people or by an individual islander. The Samso revolution has been an exercise in self-determination – a process in which islanders have decided to demonstrate what can be done to alleviate climate damage while still maintaining a comfortable lifestyle.

    Consider Jorgen. As he wanders round his cowsheds, he scarcely looks like an energy entrepreneur. Yet the 47-year-old farmer is a true power broker. Apart from his fields of pumpkins and potatoes, as well as his 150 cows, he has erected a giant 1 megawatt (mw) wind turbine that looms down on his 120-hectare dairy farm. Four other great machines stand beside it, swirling in Samso’s relentless winds. Each device is owned either by a neighbouring farmer or by a collective of locals. In addition, Jorgen has bought a half share in an even bigger, 2.3mw generator, one of the 10 devices that guard the south coast of Samso and now help to supply a sizeable chunk of Denmark’s electricity.

    The people of Samso were once the producers of more than 45,000 tonnes of carbon dioxide every year – about 11 tonnes a head. Through projects like these, they have cut that figure to -15,000. (That strange minus figure comes from the fact that Samsingers export their excess wind power to mainland Denmark, where it replaces electricity that would otherwise be generated using coal or gas.) It is a remarkable transformation, wrought mainly by Samsingers themselves, albeit with the aid of some national and European Union funds and some generous, guaranteed fixed prices that Denmark provides for wind-derived electricity. The latter ensures turbines pay for themselves over a six- or seven-year period. After that, owners can expect to rake in some tidy profits.

    ‘It has been a very good investment,’ admits Jorgen. ‘It has made my bank manager very happy. But none of us is in it just for the money. We are doing it because it is fun and it makes us feel good.’ Nor do his efforts stop with his turbines. Jorgen recently redesigned his cowshed so it requires little straw for bedding for his cattle. Each animal now has its own natty mattress. Instead, most of the straw from Jorgen’s fields is sold to his local district heating plant, further increasing his revenue and limiting carbon dioxide production. (Carbon dioxide is absorbed as crops grow in fields. When their stalks – straw – are burned, that carbon dioxide is released, but only as a gas that has been recycled within a single growing season. By contrast, oil, coal and gas are the remains of plants that are millions of years old and so, when burned, release carbon dioxide that had been sequestered aeons ago.)

    Samso’s transformation owes its origin to a 1997 experiment by the Danish government. Four islands, Laeso, Samso, Aero and Mon, as well as the region of Thyholm in Jutland, were each asked to compete in putting up the most convincing plan to cut their carbon outputs and boost their renewable-energy generation. Samso won.

    Although it lies at the heart of Denmark, the nation’s fractured geography also ensures the island is one of its most awkward places to reach, surrounded as it is by the Kattegat, an inlet of the North Sea. To get to Samso from Copenhagen, you have to travel by train for a couple of hours to Kalundborg and then take one of the twice daily ferries to Samso. A total of 4,100 people live here, working on farms or in hotels and restaurants. The place is isolated and compact and ideal for an experiment in community politics and energy engineering – particularly as it is low-lying and windswept. Flags never droop on Samso.

    The job of setting up the Samso experiment fell to Soren Harmensen, a former environmental studies teacher, with thinning greyish hair and an infectious enthusiasm for all things renewable. Outside his project’s headquarters, at the Samso Energiakademi – a stylish, barn-like building designed to cut energy consumption to an absolute minimum – there is an old, rusting petrol pump parked on the front steps. A label on it says, simply: ‘No fuel. So what now, my love?’ Step inside and you will find no shortage of answers to that question.

    Soren is a proselytiser and proud of his island’s success. However, achieving it was not an easy matter. It took endless meetings to get things started. Every time there was a community issue at stake, he would arrive and preach his sermon about renewable energy and its value to the island. Slowly, the idea took hold and eventually public meetings were held purely to discuss his energy schemes. Even then, the process was erratic, with individual islanders’ self-interest triggering conflicts. One Samsinger, the owner of a cement factory, proposed a nuclear plant be built on the island instead of wind turbines. He would then secure the concrete contract for the reactor, he reasoned. The plan was quietly vetoed.

    ‘We are not hippies,’ says Soren. ‘We just want to change how we use our energy without harming the planet or without giving up the good life.’

    Eventually the first projects were launched, a couple of turbines on the west coast, and a district heating plant. ‘Nothing was achieved without talk and a great deal of community involvement,’ says Soren, a message he has since carried round the planet. ‘I visited Shropshire recently,’ he says. ‘A wind-farm project there was causing a huge fuss, in particular among the three villages nearest the proposed site. The planners would soothe the objections of one village, only for the other two to get angry – so local officials would turn to them. Then the first village started to object all over again. The solution was simple, of course. Give each village a turbine, I told them. The prospect of cheap electricity would have changed everyone’s minds.’ Needless to say, this did not happen.

    On another visit – this time to Islay, off the west coast of Scotland – Soren found similar problems. ‘I was asked to attend a public meeting to debate the idea of turning the island into a renewable energy centre like Samso. But nearly all the speakers droned on about ideals and about climate change in general. But what people really want is to be involved themselves and to do something that can make a difference to the world. That point was entirely lost.

    ‘Later I found that a local Islay distillery was installing a new set of boilers. Why not use the excess water to heat local homes, I suggested. That would be far too much bother, I was told. Yet that was just the kind of scheme that could kick-start a renewable-energy revolution.’

    Of course, there is something irritating about this Scandinavian certainty. Not every community is as cohesive as Samso’s, for one thing. And it should also be noted that the island’s transformation has come at a price: roughly 420m kroner – about £40m – that includes money from the Danish government, the EU, local businessmen and individual members of collectives. Thus the Samso revolution cost around £10,000 per islander, although a good chunk has come from each person’s own pockets. Nevertheless, if you multiply that sum by 60m – the population of Great Britain – you get a figure of around £600bn as the cost of bringing a similar revolution to Britain. It is utterly impractical, of course – a point happily acknowledged by Soren.

    ‘This is a pilot project to show the world what can be done. We are not suggesting everyone makes the sweeping changes that we have. People should cherry pick from what we have done in order to make modest, but still meaningful carbon emission cuts. The crucial point is that we have shown that if you want to change how we generate energy, you have to start at the community level and not impose technology on people. For example, Shell heard about what we were doing and asked to be involved – but only on condition they ended up owning the turbines. We told them to go away. We are a nation of farmers, of course. We believe in self-sufficiency.’

    Jesper Kjems was a freelance journalist based in Copenhagen when he and his wife came to Samso for a holiday four years ago. They fell in love with the island and moved in a few months later, although neither had jobs. Jesper started playing in a local band and met Soren Harmensen, its bassist, who sold him the Samso energy dream. Today Jesper is official spokesman for the Samso project.

    Outside the town of Nordby, he showed me round its district heating project. A field has been covered with solar panels mounted to face the sun. Cold water is pumped in at one end to emerge, even on a gloomy day, as seriously hot water – around 70C – which is then piped to local houses for heating and washing. On particularly dark, sunless days, the plant switches mode: wood chips are scooped by robot crane into a furnace which heats the plant’s water instead. The entire system is completely automated. ‘There are some living creatures involved, however,’ adds Jesper. ‘A flock of sheep is sent into the field every few days to nibble the grass before it grows long enough to prevent the sun’s rays hitting the panels.’

    Everywhere you go, you find renewable- energy enthusiasts like Jesper. Crucially, most of them are recent recruits to the cause. Nor do planning rows concerning the sight of ‘eyesore’ wind turbines affect Samsingers as they do Britons. ‘No one minds wind turbines on Samso for the simple reason that we all own a share of one,’ says electrician Brian Kjar.

    And that is the real lesson from Samso. What has happened here is a social not a technological revolution. Indeed, it was a specific requirement of the scheme, when established, that only existing, off-the-shelf renewable technology be used. The real changes have been those in attitude. Brian’s house near the southern town of Orby reveals the consequences. He has his own wind turbine, which he bought second-hand for £16,000 – about a fifth of its original price. This produces more electricity than his household needs, so he uses the excess to heat water that he keeps in a huge insulated tank that he also built himself. On Samso’s occasional windless days, this provides heating for his home when the 70ft turbine outside his house is not moving.

    ‘Everyone knows someone who is interested in renewable energy today,’ he adds. ‘Something like this starts with a few people. It just needs time to spread. That is the real lesson of Samso.’