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  • PM Kevin Rudd takes control of mining talks

     

    The report to the MCA forecasts that the tax would cause significant loss of value in investments and is “likely to result in mining companies deferring or cancelling Australian projects in the short to medium term”.

    The government’s political standing and Mr Rudd’s leadership support has been rocked during the month-long dispute over the new profits tax on mining. The latest Newspoll surveys show Labor’s primary vote at just 35 per cent and more people opposed to the new tax than supporting it.

    The MCA has run a series of advertisements accusing the government of misleading the public over the taxes miners pay and arguing the new tax would hurt all Australians. Wayne Swan has responded by calling the mining leaders liars or ignorant.

    Mr Rudd said yesterday in parliament that “the bottom line is they can pay more tax” and the government would not accept “propaganda by the MCA”.

    But the Prime Minister is preparing to meet individual mining leaders, who argue that the government’s process in introducing the tax has been faulty, that there has been insufficient consultation and that there should be detailed negotiations beyond the tax consultation panel headed by a deputy secretary of Treasury.

    The government is insisting the proposed 40 per cent tax rate is non-negotiable but is prepared to consider other major concessions on the tax threshold, loss provisions and the exemption of quarry products.

    “We believe this 40 per cent rate is right and we’ve said we will consult with the industry on detail and on implementation and on transition,” Mr Rudd said yesterday.

    “That’s the framework in which we’re having these consultations and negotiations, but what I do know about consultations with very big – very big – mining companies who sometimes hunt in packs is that it’s far better that these negotiations are conducted direct rather than through the media.”

    The Prime Minister also warned that the negotiations with the mining leaders would take a long time and that he refused to be held to any timetable in relation to the election, which is expected by October.

    “Anyone out there expecting that there’ll be some magic deal at midnight tomorrow night is wrong,” Mr Rudd said in reference to the MCA annual dinner in Parliament House tonight.

    “That’s not how it’s going to be. Furthermore, this is going to be quite a long and protracted negotiation over quite a long period of time. And there I speak of weeks, at least, if not beyond.

    “I wish to emphasise that the government remains fully committed to a resource super-profits tax.”

    Mr Rudd said the 40 per cent tax rate was fundamental, as was the commitment to be able to fund “other elements of tax reform as well”, such as small business and company tax cuts.

    The RSPT is forecast to raise $9 billion in 2013-14 and is essential to the government’s projections for tax cuts, low-income earners’ superannuation concessions and return to budget surplus.

    Tony Abbott said: “Mr Rudd’s great big new tax is not just something that’s going to impact on BHP and Rio. It’s going to impact on everyone who is doing something around his or her house.

    “Everything that comes out of the ground is subject to Mr Rudd’s great big new tax. That means your sand, your gravel, it means everything that goes into the steel, the concrete, the roof tiles, all of this is going to be subject to Mr Rudd’s great big new tax and this is a tax on everyone.”

    Resources Minister Martin Ferguson backed the Prime Minister’s claims saying: “Contrary to what the Leader of the Opposition is saying, this is not a tax on extraction. We should also not forget that the industry itself has argued for tax reform.

    “What we’re about is bedding down the detail and putting in place certainty, which ensures that we get a fair return for the Australian community for their resources during the good times but I also remind you that during the bad times there is also some relief for the mining industry.”

    The Treasurer said the government was not surprised that it was meeting “fierce resistance from some of the biggest companies in the country, and indeed, some of the biggest resource companies in the world”.

    “It is naive for anybody to expect that it would be different because they will have to pay a bit more tax,” Mr Swan said.

    47 comments on this story

  • Finally: Obama halts new offshore leases and stumps for climate bill

     

    “This disaster should serve as a wake-up call that it is time to move forward on this legislation,” he said. “I call on Democrats and Republicans in Congress, working with my administration, to answer this challenge once and for all.”

    He also spoke about pushing for an energy-climate bill in a closed-door meeting with Senate Republicans yesterday. Notably, he didn’t say whether they expressed willingness to cooperate. They’re still the crucial barrier to progress on the issue.

    Obama’s comments echo his message yesterday at a solar-panel plant in California, where he said, “I’m going to keep fighting to pass comprehensive energy and climate legislation in Washington.” But today’s D.C. presser should give the message more media attention.

    He also stressed that his administration is trying really hard to find a way to stop the Gulf leak and cope with the mess it’s created.

    “Those who think we were either slow in our response or lacked urgency don’t know the facts. This has been our highest priority since this crisis occurred,” he said.

    “We are relying on every resource and every idea, every expert and every bit of technology to work to stop it. We will take ideas from anywhere but we are going to stop it. I know that doesn’t lessen the enormous sense of anger and frustration felt by people on the Gulf and so many Americans.”

    Now — with encouraging signs that the “top kill” might finally be plugging up the Gulf gusher — Obama needs to make the larger energy crisis his administration’s highest priority, tapping every resource and every expert and every bit of technology to move the nation to a clean energy economy. There’s still time to make use of this crisis.

  • The Times’ EU climate targets ‘exclusive’ is gibberish

     

     

    It’s all gibberish, but where Europe is concerned, anything goes. Of all the myths published about the EU, I wish the one on the front page of today’s Times were true.

     

     

    It reports – “exclusively” – that the European commission will raise its target for greenhouse gas cuts today, from 20% by 2020, to 30%:

     

     

    “The European commission is determined to press ahead with the cuts despite the financial turmoil gripping the bloc, even though it would require Britain and other EU member states to impose far tougher financial penalties on their industries than are being considered by other large economies.”

     

    The “surprise new plan”, it says, commits “Britain and the rest of the EU to the most ambitious targets in the world.”

     

     

     

    I phoned the commission this morning. I was told that the story is “totally wrong. The position is exactly the same as it was.” This means that the EU will stick to its 20% target until there’s a legally binding global agreement to replace the Kyoto protocol. At this point the target will be raised to 30%. This was all reported in a Guardian story two weeks ago and the FT has covered it before too.

     

    It was the plan long before the Copenhagen summit in December. But as no legally binding agreement was struck then, and as it’s unlikely to happen in Mexico at the end of this year either, there’s no immediate prospect of the EU’s target being raised.

     

     

     

    All the EC has done is to write an analysis paper looking at what the consequences – for European industry, trade policy and other matters – would be if such a target were to be adopted. This is the routine business of any civil service: produce analyses and impact statements for possible policies, before they are adopted. The only surprise is that it hasn’t been done before.

     

     

     

    But as the Times story shows, there are good reasons why the tougher target should be adopted, regardless of whether a global deal is struck. The recession, or stagnation, or whatever it is now, has already slashed emissions in Europe. A tougher target would bank those accidental cuts and prevent them from making a mockery of the Emissions Trading Scheme, as they do today. The decline in greenhouse gas production ensures that the carbon price remains so low that it won’t stimulate investment in energy saving and alternative technologies. Unless the targets are tightened, the EU emissions cap will remain so loose as to be all but useless.

     

     

     

    And while the tougher target waits on a binding global treaty, to some extent a binding global treaty waits on a tougher EU target. When the world’s biggest economic block shows that it means business, poorer nations will be more inclined to follow.

     

     

     

    Anyway, we dream on, assisted by the Times’s nonsense.

     

     

     

    monbiot.com

  • EPA’S ”Tailoring Rule’ and the Biomass Industry

     

    Including biomass power plants under the EPA’s tailoring rule is a clear policy shift and may imply a change in position for future policy.  The lack of distinction between renewable biomass as an alternative fuel to traditional fossil fuels like coal, oil, and natural gas means that biomass may no longer be considered more attractive as an option for increasing the nation’s alternative energy portfolio from a carbon emissions perspective.  In the New York Times article, “Biomass Industry Sees ‘Chilling Message in EPA’s Greenhouse Gas Emissions Rule” policy analyst for the Natural Resources Defense Council, Franz Matzner  points out his view that there is an important difference between biomass that increases greenhouse gas emissions (such as trees in a forest) and biomass that leads to reductions such as waste biomass (i.e. agricultural crops, wood waste).  The environmental sustainability of widespread use of forest trees for energy production has been questioned by some policy advocates in recent years and is being actively debated in many policy circles.

    Using biomass waste for energy production offers significant environmental benefits.  Real reductions in CO2 emissions occur when waste is used to replace fossil fuels, instead of being left to decompose in landfills or on fields. When wood waste is left to decompose in landfills, the decaying wood releases methane which is 21 more potent a greenhouse gas than CO2.  Failing to make the distinction between different types of biomass for energy production threatens to deter efforts to reduce fossil fuel usage for energy production that also have positive benefits for carbon emissions. 

    When issuing the final statement on the “tailoring rule,” the EPA stated that it does not have enough evidence to exclude CO2 emissions from biogenic sources at this time, but that they recognize the issue warrants further explanation, and they plan to seek further comments on addressing the issue.  It is important that the EPA examine this issue further.  Retaining the carbon neutral status of biomass and exempting biomass from the tailoring rule may help to decrease the nation’s reliance on fossil fuel by making use of a domestic renewable resource.  Policymakers must be careful not to create maligned incentives in carbon policy that would stem this transition toward increased renewable fuel use in our nation’s energy mix.

  • Co-firing Biomass with Coal

     

    About half of the electricity in the United States is generated from coal. At the same time, the increasing focus on energy and climate change policy in the U.S. has introduced significant regulatory uncertainty in generation planning and operations. This uncertainty around where U.S. carbon policy is headed and when-along with the nature of modern utilities’ complex planning-requires a long-term, forward-looking strategy, one that fully integrates generation portfolio management with changes in demand behavior.

    An integrated asset and fuel optimization approach can help the energy industry create a robust strategy set that will stand the tests imposed by constantly changing regulatory requirements, market dynamics, evolving environmental policies and uncertainties regarding timing, funding levels and rate recovery mechanisms.

    Co-firing may indeed make sense, from cost and environmental perspectives, for many coal-based electricity producers. Co-firing makes use of existing power generation assets and infrastructure with the lowest cost of generation for renewable energy, while providing a means to mitigate the future cost of carbon. It offers renewable energy generation with low capital costs and takes advantage of the latest technologies and the high efficiencies of today’s coal power plants.

    Many national governments provide tax and financial incentives to encourage electric producers to adopt co-firing. In the U.S., where biomass is recognized as a renewable fuel, replacing coal fuel with biomass results in a substantial credit reduction in coal-based carbon dioxide emissions.

    Biomass co-firing has been used in Europe for over a decade. Full-scale commercial co-firing of at least 10 percent biomass-based on heat input-is common practice, with a wide variety of bio-fuels and co-firing configurations. The European biomass co-firing market has advanced to the point where the EU is implementing a new certification process for sustainably produced biomass for energy generation purposes. KEMA is assisting in establishing this biomass certification based on the chain of custody-from producer to processors to end-user.

    Often electricity producers opt to conduct trials first, to prove the viability, reliability, sustainability and cost-effectiveness of biomass co-firing in their plants. KEMA has been actively engaged in supporting biomass co-firing initiatives already underway in Europe for over a decade, and this technology has been demonstrated in many boiler types. The U.S. can leverage the experience gained in Europe to fast-track implementing biomass co-firing. Complete conversion to 100 percent biomass in a specific unit at multi-unit stations has already proven to be viable and sustainable in certain circumstances. The challenges in the U.S. are around reliable fuel supply and quality, a lack of incentives and a general reluctance by plant operations to introduce new fuels into existing boilers.

    We are seeing biomass co-firing on the rise in North America. KEMA has performed feasibility studies on co-firing for a number of large North American utilities looking to assess and quantify the risks, review fuel supply surety and obtain a detailed techno-economic assessment and conceptual design for co-firing of biomass in coal-fired plants. Utilities planning on co-firing between 5 and 10 percent biomass (by heat input) initially have also been interested in knowing what it takes to move towards a 100 percent fuel switch to biomass.

    In considering the full fuel switch, utilities are looking to ensure a mix of interrelated considerations, including minimal unit de-rating, no severe adverse operating conditions, no degradation of ash quality, no increase in emissions, compliance with regulation and legislation, broad initial fuel scope and competitive economics/favorable internal rate of return. By using proprietary co-firing control model software, we have been able to facilitate efficient and effective assessment process-providing utilities immediate quantitative insight into the risks associated with firing a mix of fossil and/or biomass fuels in existing coal-fired power plants along with specific guidance to optimize combustion.

    As co-firing biomass has become a recognized option in the U.S. electric generation market, biomass co-firing can be a real option in a utility’s portfolio-based approach to climate planning. We have worked with a number of U.S. and European utilities in defining their long-term carbon strategies, the majority of whom are asking to include biomass co-firing as a portfolio option within our sustainable integrated energy modeling tools being employed. This portfolio-based carbon planning process offers another avenue for utilities to assess the impact of biomass co-firing on profit and loss and on the balance sheet along with risk-based scenarios.

    Kevin Sullivan is senior vice president with KEMA Inc. and Ronald Meijer is managing principal Clean Fossil Power with KEMA Nederland B.V.

  • Integrating Solar: CSP and Gas Turbine Hybrids

     

    In a combined cycle plant, the high temperature exhaust gas from the turbine is passed through a heat recovery steam generator from which high-pressure steam is used in a steam turbine. Such installations are now operating at above 50% efficiency and the technology is well proven. In ISCC installations, additional thermal energy from the solar collector field is effectively injected into the heat recovery steam generator (HRSG) of a conventional combined cycle plant. This boosts steam production and consequently electrical output. It also potentially allows CSP to be easily integrated into conventional fossil-fired thermal plants at relatively low extra cost.

    Technology Requirements

    As a relatively mature technology with a proven track record, ISCC installations currently under development have utilized parabolic trough reflectors. However, while the technology is relatively straightforward, in order to install solar combined cycle hybrid plants, there are certain requirements associated with any such development, including a large site and suitable topography.

    (Left: Solar power can supplement steam production. Credit: Schott Solar)

    Obviously for any solar installation, the direct normal insolation should be as high as possible, plus there is also a requirement for cooling water as part of the condensing cycle of the thermal power island. A final, though fundamental, requirement is the availability of suitable electricity transmission infrastructure to convey the solar generated power to load centres.

    Given a suitable site, however, ISCC does offer some unique advantages for utilities and other power supply interests. Primarily, electricity from CSP technology is generated exactly like conventional electricity, except solar power is used to provide heat to the boiler instead of fossil fuels. CSP is also becoming increasingly suited to changing power demand characteristics. Largely due to the increasing use of air conditioning, in some regions peak electricity demand has been far greater during recent summers than the peak winter demand. And, CSP plants deliver their maximum output during these peak hours, potentially offering opportunities to sell into the more attractively priced spot market at such times. Furthermore, although the current generation of ISCC installations have not included thermal storage capacity, this technology does allowing CSP to extend its operational range.

    (Left: The power block and some of the solar collector field of the world’s first operational ISCC plant, Ain Beni Mathar in Morocco. Credit: Abener)

    Nor is the integration of solar thermal capacity limited to new-build gas-fired combined cycle installations. In August 2009 Abengoa Solar announced that it is to build the first CSP installation integrated with a coal-fired plant.

    Owned by Colorado-based US utility group Xcel Energy, the demonstration project is planned to increase output at the Cameo coal-fired plant, near Grand Junction, Colorado, by 4 MW.

    ‘If this demonstration works, we may be able to implement this type of technological advance in other coal-fired power plants to help further reduce carbon dioxide emissions in Colorado and possibly other areas of our service territory’, said David Wilks, president of Energy Supply for Xcel Energy. Meanwhile, Ken May, director of Abengoa Solar IST, emphasized the high potential of large-scale applications of the industrial solar installation technology, saying: ‘Proper use of the solar thermal energy produced at these facilities can improve plant efficiency while lowering CO2 emissions. The successful integration of solar and coal technologies will encourage more widespread use throughout the utility sector.’

    And, later this year, US utility group Florida Power and Light (FPL) plans to open the world’s first hybrid solar thermal facility to connect to an existing fossil fuel plant at its Martin Next Generation Solar Energy Center in Indiantown, Florida. At 75 MW the CSP installation will be the largest of FPL’s solar facilities and will consist of approximately 180,000 mirrors over roughly 500 acres (200 ha) at the existing plant location, which currently produces up to 2.8 GW.

    A Step Into the Light

    The world’s first ISCC plant is being constructed by Spanish engineering firm Abener at Ain Beni Mathar, In Morocco. This 470 MW plant is under development for state utility group Office National de l’Electricité (ONE) and uses parabolic trough technology to provide additional solar thermal component to a conventional gas-fired power island. The solar component will supply 20 MWe, leaving some 450 MW coming from the conventional thermal plant or an expected annual net production of 3538 GWh per year. The solar output is estimated at 1.13% of the annual production or some 40 GWh per year.

    The installation features a 180,000 m2 solar field, using 224 solar collector assemblies in 56 loops. The thermo-oil heat transfer fluid within is pumped to the power block at about 400ºC.

    Abener, in collaboration with Abengoa Solar and Teyma, the construction company of Abengoa, has engineered, designed and built the plant under the terms of a turnkey contract with Moroccan state energy company ONE. Rioglass manufactured the mirrors while the 8064 heat collector elements came from Schott. The EPC contractor is Abener Energia, which will also operate the plant together with 100% owner ONE.

    Algeria Making Second Solar Move

    The world’s second ISCC plant is being constructed in Algeria again by Abener, in collaboration with Abengoa Solar (both are subsidiary companies of Abengoa), which is providing the design and will act as the technician of the solar part. The 150 MWe Hassi R’Mel Project, located near the town of the same name, is being lead by the project company Solar Power Plant 1 (SPP1) – majority held by engineering group Abener with a 51% stake. The project will adjoin an existing Sonelgaz power station at Tilghemt located at the country’s largest natural gas field, Hassi R’Mel, in northern Algeria.

    Bidding on the build-own-operate contract launched in June 2004 and saw close to 10 companies bid, including General Electric, Lavallin, Siemens, Alstom and Black & Veatch.

    Subsequently, the construction contract was signed in December 2006. The plant is to be developed on behalf of New Energy Algeria (NEAL), a joint venture set up by state-owned oil and gas and electricity majors, Sonatrach and Sonelgaz respectively, and an agro-industrial firm Semouleries Industrielles de la Mitidja (SIM), to carry out renewable energy projects. NEAL has a 20% equity holding in SPP1. Sonatrach (through its subsidiary Société de Valorisation des Hydrocarbures, SVH) holds a further 14%, and Compañía Española de Financiación del Desarrollo S.A (COFIDES), a Spanish state and privately owned company that provides medium and long-term financial support for projects in foreign countries where there is a Spanish interest, has a 15% holding.

    At some 180,000 m², the two parabolic solar fields for the CSP component use Solucar TR troughs with galvanized steel framing, designed by Abengoa Solar NT, and again using glass mirrors manufactured at Abengoa Solar’s Rioglass Solar factory. The solar fields will comprise 224 parabolic collectors in 56 loops and the solar contribution to the total output is estimated at some 20 MWe. It will work in conjunction with a 130 MW CCGT plant comprising two 42 MW SGT-800 gas turbines supplied by Siemens and a 80 MW SST-900 steam turbine supplied also by Siemens.

    The EPC contractor is formed by Abener and Teyma, which in April 2009 awarded the contract for the electrical balance of plant to ABB. The order, worth $14 million, includes design, engineering, supply, erection and commissioning of the medium- and low-voltage switchgear, auxiliary transformers, generator circuit breakers, isolated bus-ducts and emergency diesel generators. The project is expected to be completed by August 2010. Technical assistance was provided by Lahmeyer International while the lead bank behind the approximately €320 million scheme is Banque Extérieure d’Algérie (BEA).

    Outlook: Broadly Sunny

    With ISCC facilities in Morocco and Algeria currently in final commissioning, the technology is now in a position to demonstrate the essential track record of reliability for widespread acceptance.

    (Left: A Siemens SST-900 steam turbine rotor lies at the heart of Hassi R’Mel. Credit: Siemens)

    Certainly, the Middle East and North Africa (MENA) region offers considerable scope for such developments with its ideal climate and ample space. Perhaps recognising this, national governments in the region are introducing measures that support such developments. The Hassi R’Mel development, for example, follows the introduction of a national programme for the development of renewable energy, the so-called Algerian Sustainable Energy Development Plan for 2020, together with a feed-in tariff scheme which has been in place since March 2004 and which offers elevated tariffs for renewable power production such as that coming from solar thermal capacity.

    On the broader scale, ultimately it is envisaged that energy from such installations will be exported to the key demand centres of continental Europe via under-sea HVDC interconnection cables. Tewfik Hasni, ex-chief executive of NEAL has already reportedly proposed a 3000 km transmission line stretching from the Algerian town of Adrar to the German city of Aachen.

    Egypt has also proposed an ISCC development at Kuraymat, about 95 km south of Cairo, on the eastern side of the river Nile, with the country’s New and Renewable Energy Authority (NREA) tendering – in 2005 – for a 150 MW ISCC plant with a solar power island consisting of a parabolic trough solar field. On completion, the plant will generate some 20 MWe from its solar capacity, producing around 33 GWh anually.

    And, Iran is expected to commission an ISCC installation in the desert Yazd region featuring a solar thermal component of some 17 MW. The second of the two gas turbines planned at this 478 MW development is reportedly now operational and the plant is due for final commissioning this year. The contractor for the US$170 million project is the Iran Electricity Development Organisation.

    Meanwhile, the longer-term prospects for ISCC development were given a major boost in October 2009, when the Desertec Industrial Initiative (DII) – a project born under the auspices of the Club of Rome and other institutions – was launched. This project seeks to develop renewable energy production in the desert regions of the MENA for both local use and for export to Europe.

    Indeed, Abengoa Solar became a founding partner of the DII project, joining ABB, Deutsche Bank, EON, RWE, Schott Solar, Siemens, Solar Millennium/MSM and others.

    This initiative is aimed at meeting 15% of Europe’s energy needs, and a substantial part of the demand in Northern Africa and the Middle East, via concentrated solar plants and other renewable sources of energy by 2050. And, for example, DII is already collaborating with the ‘Mediterranean Solar Plan’, an initiative that was approved by the European Union in 2008 to promote large-scale solar power projects in Northern Africa.

    Reinforcing this positive outlook, Santiago Seage, CEO of Abengoa Solar has pointed out that: ‘Northern Africa and the Middle East are undoubtedly areas with a tremendous solar energy potential, for both the region’s own use as well as exporting as soon as we have the necessary infrastructure in place. This initiative should bring us closer to making this vision come true.’

    (Right: Under plans set out by the Desertec Industrial Initiative (DII), subsea cables will transmit solar energy from the MENA region to demand centres in continental Europe. Credit: ABB)