Sunday, August 21, 2016

Tol: The Structure of the Climate Debate

I can't recommend a paper from Richard Tol highly enough - I think on content, but communication style might be part of the appeal.
Abstract: First-best climate policy is a uniform carbon tax which gradually rises over time. Civil servants have complicated climate policy to expand bureaucracies, politicians to create rents. Environmentalists have exaggerated climate change to gain influence, other activists have joined the climate bandwagon. Opponents to climate policy have attacked the weaknesses in climate research. The climate debate is convoluted and polarized as a result, and climate policy complex. Climate policy should become easier and more rational as the Paris Agreement has shifted climate policy back towards national governments. Changing political priorities, austerity, and a maturing bureaucracy should lead to a more constructive climate debate.
The full paper (.pdf) is worth the full read. Some of my favourite sections (stripped of those clumsy references academics clutter papers with):
Economists have been reluctant, however, to write much about the climate debate itself and apply their tools of analysis to the question why participants in this debate behave the way they do. This paper makes a first attempt.
A number of things stand in the way of a reasonable debate on international climate policy

First, the presentation of climate change is often a discourse of fear... There is a demand for an explanation of the world in terms of Sin and a Final Reckoning... Although many Europeans are nominally secular, fewer are in practice. The story of climate change is often a religious one...: emissions (sin) lead to climate change (eternal doom); we must reduce our emissions (atone for our sins). This has led to an environmental movement (a priesthood) that thrives on preaching climate alarmism, often separated from its factual basis. Environmentalism further offers an identity..., a tribe to belong to, and an opportunity to feel better than outsiders. In order to maximize their membership and income, environmental NGOs meet the demand for scaremongering and moral superiority...

Tuesday, August 16, 2016

Bird deaths and ignorance

The big story of the day contains, as it so often does, nonsense from the Canadian Wind Industry - which I'd like to address, so...

Study calls for 18-km turbine setback | John Miner, London Free Press
The U.S. Fish and Wildlife Service has a standard that wind farms not be located within five kilometres of the shoreline. The Nature Conservancy recommends eight kilometres. The new evidence points to an 18-kilometre zone as appropriate, Hutchins said.
“These birds don’t just belong to Canada and the United States, they are a shared resource and they are worth billions of dollars,” Hutchins said, pointing to their role in controlling pests, pollinating crops and dispersing seed. “We can’t afford to lose these animals,” he said.
Ontario doesn’t restrict the proximity of wind turbines in relation to the Great Lakes, but does require wind farm developers to monitor bird and bat deaths for three years. For bats the acceptable mortality level is 10 per wind turbine each year, while the limit for birds is 14 birds annually per turbine.
Beyond those levels, the wind farm company may be required to take mitigating action.
Data released last month indicated wind turbines in Ontario in 2015 killed 14,140 birds, mainly songbirds, and 42,656 bats, including several species on Ontario’s endangered species list.
The U.S. Fish and Wildlife radar study found that migrating birds concentrate along the shorelines to refuel and rest before crossing the lakes. The researchers also found the birds make broad-scale flights along the shorelines to explore wind conditions and orient themselves for migration.

Thursday, August 11, 2016

Renewables and gas and Hinkley Point

I'd been thinking the discussion around the new May government's delay of a decision on EPR reactors at Hinkley Point was featuring well known voices tossing off half-cooked ideas as alternatives to the project, and am now inspired to say so by...

“All other things equal, a 1% percent increase in the share of fast reacting fossil technologies is associated with a 0.88% percent increase in renewable generation capacity in the long term,” the study reports. Again, this is over 26 separate countries, and more than two decades.“Our paper calls attention to the fact that renewables and fast-reacting fossil technologies appear as highly complementary and that they should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply,” the paper adds.
“When people assume that we can switch from fossil fuels to renewables they assume we can completely switch out of one path, to another path,” says Verdolini. But, she adds, the study suggests otherwise.
Verdolini emphasized this merely describes the past — not necessarily the future. That’s a critical distinction, because the study also notes that if we reach a time when fast-responding energy storage is prevalent — when, say, large-scale grid batteries store solar or wind-generated energy and can discharge it instantaneously when there’s a need — then the reliance on gas may no longer be so prevalent.
Ah the future - a country unknown to all but zealots.

The study seems to find what I'd expect. Renewables in much of the world (certainly Ontario) lack meaningful capacity value, so they are always additional generation. They do not replace other generators.
Thinking through the eternal promise of storage, I argue wind and solar should be viewed as fuels for the batteries (or other storage) which would be the generators.

It seems to me these issues have been around long enough, they should be obvious, and yet it remains common to see renewables presented as alternatives to actual generators - such as the proposed Hinkley C.

Tuesday, August 2, 2016

New York, South Australia, and U.K. messages on nuclear, and wind

The New York State Department of Public Service (NYSDPS) took a small, but significant step forward yesterday. By a vote of three yeses and one concur, the commissioners decided to implement a clean energy standard that includes zero emission credits for nuclear plants that are struggling in a market where the wholesale prices are too low to cover their fixed costs. - Rod Adams, Atomic Insights
It was nice to see my American pro-nuclear online acquaintances get something of a win yesterday with the passage of a plan I wrote on in New York bringing hope back to US nuclear operator. Now that I can't jinx it passing, I want to discuss issues revealed over the past 3 weeks by events including New York's Zero Emissions Credit (ZEC) initiative, an electricity supply crisis in South Australia, and a new government in the U.K. delaying signing off on a new reactor agreement.

Starting in New York...
Brad Plumer has a story at VOX that seems well regarded, so I'll recommend that while noting the title is highly questionable and the following section both important, and misleading (at best):
From Nuclear power and renewables don’t have to be enemies. New York just showed how:
Right now these reactors aren’t fully compensated for this climate benefit. So, the commission decided, let’s start with that $50 a ton and then subtract out what these reactors already receive from power markets, capacity markets, and RGGI, the Northeast’s cap-and-trade system. Then we’ll pay the reactors for the difference — call it a “zero-emission credit” (ZEC):

Friday, July 29, 2016

Ontario energy week: rural poverty and OEB ignorance

"The public policy objective of the Cap and Trade Program is to reduce GHG emissions"
I try to keep these posts dispassionate summaries of recent articles that interested me, but with requisite editorializing to connect the articles.

Let me start this post with what a statement that may be be more subjective than objective - and then I'll connect news and the reader can decide:
Rosemarie LeClair should be terminated, with cause, from employment at the Ontario Energy Board.
An example of the damage done by many entities, including the OEB, came this week from the United Way of Bruce Grey:

July 1 2015 – June 30 2016 Close to ¾ of a million dollars was spent by area social service agencies and charities helping people stay connected to their utilities as well as providing heat in the past 12 months. For the 2015-2016 winter (July 1-June 30) the United Way has gathered data from social services agencies and other charities who have provided support to people experiencing energy poverty...

The report notes monthly "delivery" charges associated with baseboard heating are $66/month.
The report also notes the impact of the global adjustment, without noting pricing has been so complex the system operator can't provide a coherent answer on the average rate they pay to generators. If they noted their third listed contributor to high costs in rural Ontario, conservation, would make more sense - if the IESO understood what was driving costs, and the "I" belonged in their name, they wouldn't be spending so much on conservation.

Tuesday, July 19, 2016

Killing Nuclear, ignoring emissions and avoiding carbon pricing

In Germany, where renewables have mostly replaced nuclear power, carbon emissions are rising, even as Germans pay the most expensive electricity rates in Europe. In South Australia, the all-wind strategy is taking its toll. And in California, the costs of renewables are also apparent. - Eduardo Porter - New York Times
Recently a multitude of exceptional articles have been written on the challenges facing nuclear power plants in the United States, mostly without mentioning an alternative to competing subsidies.

  • A $30/tonne CO2 equivalent price would equate to adding $12-$15 per megawatt-hour on the most efficient natural gas-fired generators. $30 is a familiar figure thrown about in Canada.
  • The United States Government's Interagency Working Group on Social Cost of Carbon has a complex methodology of working out values: using a 4% discount rate they provide a 2016 value of $38/metric ton CO2, but that's in 2007 dollars - it's about $44/t CO2e in 2016 dollars, putting the social cost  per megawatt-hour of natural gas-fired generation at $17.5-$22.5/megawatt hour.
now... to the news

A very educational read is Will Boisvert's Renewables Subsidies Are Killing Nuclear and Threatening Climate Progress, Bloomberg New Energy Finance Study Shows:
Why are nuclear plants going broke? The immediate reason is cheap gas. The plunge in natural gas prices caused a collapse in the price of natural gas-fueled electricity, which has slumped below the production costs of nuclear plants. Bloomberg predicts that in the sprawling PJM grid wholesale prices will be $28.50 per megawatt-hour in 2017, lower than average nuclear production costs of $35.50 per megawatt-hour. Facing losses like that, nuclear utilities are closing up shop.
But the impact of market forces has been worsened by public policy that neglects nuclear power and adds to the pressure it faces. Federal, state and local governments have massively intervened in energy markets to support renewable power with subsidies and mandates, but given virtually no support to existing nuclear plants. These biases tilt the playing field for commercial competitors of nuclear plants.
The $23 per megawatt-hour federal Production Tax Credit for wind farms, for example, can be larger than the total wholesale price nuclear plants get for their power in some regions, according to Bloomberg data. (It’s also larger than the $5-15 per megawatt-hour subsidies Bloomberg reckons nuclear plants need to break even.)
I'll read most anything by Will Boisvert -in English- but I don't see a link to the Bloomberg New Energy Finance Study (nor could I locate it), and there's no mention of carbon pricing.

Wednesday, July 13, 2016

New York bringing hope back to US nuclear operator

New York state is acting to keep existing nuclear generators operational in an important power play that's interesting for a number of reasons.

July 8th (Friday afternoon, as policy announced) NY regulators propose generous Upstate nuclear subsidies |
SYRACUSE, N.Y. – State utility regulators today released a proposal to subsidize Upstate nuclear plants with annual payments totaling an estimated $482 million a year.
The proposal from the Public Service Commission staff seems likely to please nuclear plant operators, who say their facilities deserve subsidies for providing carbon-free power, and to infuriate anti-nuclear advocates who want more resources devoted to wind and solar.
The public has a brief opportunity to comment -- until July 18 – an indication that the PSC is likely to rule on the proposal at its Aug. 1 meeting.
Exelon Corp., which owns three of the four Upstate nuclear reactors, recently told the commission that the oldest two facilities might close unless subsidies were approved by September.
Exelon had said similar things about a proposal put to the Illinois legislature to incent existing nuclear units there by guaranteeing a $42/MWh rate for the generators. Illinois' legislature didn't act, and Exelon announced the closure of Illinois units.

The initial story embedded Public Service Commission staff's recommendation - knows at POLITICO as Cuomo's nuclear subsidy plan. From the recommendation:
Replacement of the zero-emission attributes with equivalent amounts of fossil-fueled attributes would result in an increase of approximately 31 million metric tons of CO2 emitted into the atmosphere over the next two years, according to a report issued by The Brattle Group.
Staff is proposing to subsidize zero-emissions attributes from Zero Carbon Electric Generating Facilities when there is a public necessity to encourage their preservation. Payments for zero-emissions attributes would be based upon the U.S. Interagency Working Group’s (USIWG) projected social cost of carbon (SCC). This approach is consistent with the Commission’s approach in setting guidelines for Benefit-Cost Analysis. 
This may be the first payment scheme designed to price energy by the social cost of carbon. The formula is:
RGGI is the Regional Greenhouse Gas Initiative - so if it was trading carbon at what the USIWG considers the social cost of carbon the ZEC would be zero. If the combination of the RGGI credit costs, expected market pricing and capacity payments (in the "rest of state", or ROS zone) was equal to, or greater than, the USIWG's social cost of carbon, the price would be zero.

Tuesday, June 21, 2016

Diablo and the end of California nuclear

This morning Forbes posted Rod Adams' NRDC Announces PG&E Has Agreed To Kill Diablo Canyon:
The Natural Resources Defense Council (NRDC) has just issued a press release stating that they have signed a deal with [Pacific Gas and Electric Company], IBEW local 1245, the Coalition of California Utility Employees, Friends of the Earth, Environment California, and the Alliance for Nuclear Responsibility.
There is an implied quid pro quo. The groups will support PG&E’s request for an extension from the California Lands Commission of its land use permit that allows access to ocean cooling water at the Commission’s June 28 meeting. In return, PG&E will agree to withdraw its 20-year license extension application at the Nuclear Regulatory Commission . Instead, it will aim to retire the two-unit site when its current licenses expire in 2024 and 2025.
The involvement of the NRDC is noteworthy as it is the same special interest group that the New York Times credited with writing the Clean Power Plan - which I do not credit with being a plan for particularly clean power.
Outsourced government seems to be reality, as the agreement is basically opponents of nuclear power waving their ability to bring the power of government to bear upon the nuclear operator if the nuclear operation promises to disappear by 2025.

The President of the NRDC, Rhea Suh, formerly of the Department of the Interior within the Obama administration, wrote some strange things on the agreement in California’s Last Nuclear Power Plant:
For years, some have claimed that we can’t fight climate change without nuclear power, because shutting down nuclear plants would mean burning more fossil fuels to generate replacement electricity.
That’s wrong, of course, and now we have the proof.
Today, California’s Pacific Gas and Electric became the first power company toannounce plans to replace an aging nuclear reactor with sound investments that make us more energy efficient and help us get more clean power from the wind and sun.
 That's batshit crazy right there.

Economists opine on tools to reduce greenhouse gas emissions

I've noted a flurry of opining on pricing emissions, perhaps because I'm Canadian and the small, homogenous eco-econo group heard a blast that disturbed the herd, but two recent works from south of the border also caught my attention.

Carbon pricing under binding political constraints, by Jesse Jenkins and Valerie Karplus, provides an explanation of why a straight carbon tax is rarely implemented - and when it is, generally at very low levels.
...persistent political economy constraints motivate a search for climate policies that are politically feasible, environmentally effective, and economically efficient. As in many other domains of economic regulation, second best (and third and fourth best) climate policy mechanisms abound. By paying close attention to the distributional impacts of different climate policy instruments and their interaction with potentially-binding political constraints, economists, political scientists, and policy makers can help design climate policy responses that are both palatable enough to be implemented today and economically superior to alternative second-best instruments.
... we implement constraints of varying severity on:
  1. the maximum feasible CO2 price itself; 
  2. the maximum tolerable increase in final energy prices; 
  3. a maximum tolerable decline in energy consumer surplus; and 
  4. a maximum decline in fossil energy producer surplus.
The full paper contains many, many equations. The stated "main objective of this exercise was to put an analytical framework around," and I think that's achieved more in noting the contraints than in the attempts to measure them. The authors' conclusion invokes scenarios where public opinion could be moved towards increasing the price of CO2, as the first best option, but...

Meredith Fowlie delivers a warning that policies taken outside of pricing carbon have been to the detriment of carbon prices, in Time to Unleash the Carbon Market?

Thursday, June 16, 2016

Huron water level threatened again - by Toronto's Premier and its Environment (and Climate Change) Minister

The government of Toronto politician Kathleen Wynne issue a press release yesterday. I'll attempt to list the issue that caught my attention dispassionately.

Great Lakes and St. Lawrence Governors and Premiers Release First-Ever Regional Maritime Strategy:
Michigan Governor Rick Snyder and Ontario Premier Kathleen Wynne met today to discuss their ongoing partnership to grow the economy and create jobs. On behalf of the Great Lakes and St. Lawrence Governors and Premiers, they released the first-ever regional strategy to jumpstart the Great Lakes-St. Lawrence maritime transportation system. The strategy's objectives are to double maritime trade, shrink the environmental footprint of the region's transportation network, and support the region's industrial core. Once fully implemented, the strategy will help grow the region's maritime sector, which already contributes more than US$30 billion to the U.S. and Canadian economies and accounts for more than 220,000 jobs.
The strategy includes a blend of policies, programs and projects to rejuvenate the regional maritime system. Ten-year implementation of the strategy is estimated at US$3.8 billion based on preliminary analysis. The states and provinces will work with other levels of government, industry and other stakeholders to advance implementation of the recommendations over the longer term. Specific recommendations include:
  • Constructing a second "Poe Class" Lock in Sault Ste. Marie, Michigan, to ensure the movement of vital raw materials like iron ore and coal. The feasibility of a second hydropower plant should be examined, including the potential of using revenue for future lock maintenance and construction.
  • Clearing the system's dredging backlog to ensure transit for fully loaded vessels. 
  • Dredging the system's critical chokepoint--the St. Marys River--to its authorized depth of 27 feet, while a longer-term, system-wide analysis of bottlenecks is completed to make sure dredging dollars are used most efficiently.
Sounds wonderful - especially the shipping more coal part - but for the real environmentalists of Lake Huron (and particularly Georgian Bay), it seems likely to undermine decades of work getting the negative impacts of dredging the St. Clair river - to 27 feet - recognized.