Recently in alternative energy Category

It was recently reported in several papers that the oil price shock of 2009 was caused
by a drunk oil futures trader who bought 7 million barrels of oil. Almost instantaneously, the clean/renewable energy sector was brought back to life worldwide.

Imagine that. It had to take a drunk oil trader to rescusitate this industry. Sadly, the
rescusitated renewable energy sector is in danger of crashing back to earth
every time the price of oil drops back to normal levels. Most users will try to seek
the cheapest source of energy available - in general these are the fossil fuels. Never
mind if climate change is an issue. Between environmental benefit and cost, the latter
often always wins out. People always speak in favor of clean technologies, but when it
comes time to pull out the checkbook, well wait a minute...(also known in Tagalog as "teka muna.")

This is not the first time this has happened. Renewable energy's growth is correlated
with the price of oil. In other words, when oil prices go up, the renewable energy
sector becomes a growth sector. Inversely, when oil prices drop, renewable energy
becomes a last priority.

A few years after the end of the first OPEC oil crisis, the Reagan administration removed the solar panels from the roof of the White House, signaling the end of a short love affair with renewable energy. With oil prices more or less at normal levels, many industries and customers are again rethinking the rationale for investing in renewable energy. The same story happens over and over again. Oil prices shoot up. Renewable energy becomes hot again. Oil prices revert to normal levels. Renewable energy becomes yesterday's trend again.

Something has to happen to break this cycle. Because renewable sources like wind and solar are currently more expensive, investors want to make sure that the return will be higher than investments in fossil fuel based sources. Some Asian countries have started to legislate measures like Feed-in-Tariffs and Renewable Portfolio Standards that try to guarantee a market for renewable energy investors with a slightly higher return than fossil sources to make it attractive to investors.

The way it is typically done (e.g. the 2008 Philippine Renewable Energy Act) is to softly introduce a 1% requirement for utilities to source their electricity from renewable energy sources (called a Renewable Portfolio Standard) and allowing a higher price to be charged for it (called a Feed-in-Tariff). These measures are often easy to introduce at the start. This percentage by law is often increased annually, often to a 10-20% renewable energy percentage at the end of a decade.

The hope is that a guaranteed market that increases annually, and is decoupled with oil's price, will assure investors, entrepreneurs and technologists that their investments and efforts will not be in vain. With a guaranteed market that increases, economies of scale and spurts in innovation will happen that will hopefully lead to cheaper and more efficient renewable energy equipment, much like the increased adoption of PC's and chips led to better, faster and cheaper growth for these industries.

But therein lies the challenge. By increasing that renewable energy percentage annually, customers will at some point notice that the more expensive renewable energy sources are pulling up the average cost of power, particularly with sources like wind and solar.

They may not notice it at the start with a 1% percentage, but see what happens with
increasing percentages. Hopefully the technologists can discover cost breakthroughs
that will not make this necessary, but there is a chance that they will not be that fast,
especially if the investment climate for renewables seems to swing back and forth like
a pendulum.

Here is the challenge for governments, media, and concerned citizens. How do we make customers happily pay for the increased average cost of electricity when mixed with increased renewable energy sources? By convincing citizens to bite the bullet for a few years, we ensure the steady growth of renewable energy, that will lead to a faster pace of investment, innovation, efficiency and cost savings. It's all about getting citizens to commit to renewable energy, regardless of the price of oil.

It has happened in the cellphone industry - there are cheap cellphone calling plans, but there are also more expensive calling plans. With citizen commitment, a Green Option (sort of like a special calling plan, but for electricity) can succeed where certain customers happily pay for slightly more expensive power that comes from renewable energy sources.

The alternative if we do nothing, is to wait for another drunk oil trader to shoot up the
price of oil every few years just to keep the renewable energy sector alive.

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Dennis Posadas is the author of Jump Start: A Technopreneurship Fable (Singapore:
Pearson Prentice Hall, 2009) and has a new business fable on clean energy.

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By Dennis Posadas

The cover story in the November issue of Scientific American contends that renewable energy can already theoretically power 100% of energy needs, and totally replace carbon emitting sources by 2030. The article authors, Stanford University Professor Mark Jacobson and University of California Davis researcher Mark Delucchi, charted a roadmap to shift the power and transport sectors to renewable energy by 2030. Jacobson, who heads Stanford's Energy Program, and Delucchi say this is possible by combining wind, concentrated solar, geothermal, tidal, solar photovoltaic, wave and hydropower and linking them together in an intelligent manner, using information available from meteorological sources for example,. Both authors base their arguments on a 2008 paper published in the Journal of Energy and Environmental Science, arguing that shifting vehicles from liquid fuels to electricity and cutting energy losses would make possible a global energy demand reduction of 30%.

Detractors argue that initial capital costs for some renewable sources are still expensive, and that some sources of renewable energy like wind and solar, are intermittent. The wind doesn't always blow when you want it to and the sun doesn't always shine, in a particular location, they argue.

However, these issues are slowly being solved both financially and technically. Cost considerations are now being offset by financing mechanisms like the Carbon Development Mechanism (a.k.a. "carbon credits") and incentives like the feed-in-tariff popularized in Europe and in Asian laws like the Philippines Renewable Energy Act of 2008, which seeks to grow renewable energy from 1% in 2008 to 10% by 2018.

Technical intermittence issues are also surmountable with proper planning and coordination with weather forecasting agencies. Averaged over a large area and connected together through the grid, there is always a place where the wind and sun are available at any given moment. Storage mechanisms such as batteries, elevated lakes, and old salt caverns (through compressed air storage) can store excess energy for use when needed. Most intermittent renewable energy generators simply connect these power sources to the electric grid, and act as a source when available. Issues with connecting increasingly intermittent generating sources to the grid is increasingly being researched, along with the use of smart appliances with built in chips that can adjust their demand depending on the power situation at a given moment.

But we all know that what is theoretically possible, even in the face of scientific argument, is not always what happens. Take the Beta versus VHS, or even the Windows versus Linux argument, there will always be advocates and detractors of a particular technology.

Notwithstanding the fact that climate change skeptics still abound, on the question of large-scale adoption of renewable energy itself, the main barriers now are cost and practical considerations, whether these be technical or business related. To speak of 100% renewable energy is still to say the least, quite radical at this time, even among technologists. It is somewhat akin to John F. Kennedy's challenge in the early sixties to the American scientific community, to send a man to the moon before the end of that decade. Theoretically possible yes. Practical? Maybe not for a while but if we make it a goal, it can be. We know where Kennedy's gauntlet took us, and sometimes it simply takes the right challenge to go into a particular direction.

Don't get me wrong. Aiming for a 100% renewable energy future will be fraught with challenges, and will take a lot of money, time, energy, and will have many failures along the way. The electric grid itself has to evolve, from generation to transmission, to distribution, to even the appliances to become smart so that all become intelligent and talk to each other just like the Internet, before we can even consider this as a practical possibility.

But let us begin.

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Dennis Posadas is the Editor of Cleantech Asia Online, and the author of Jump Start: A Technopreneurship Fable (Singapore: Pearson Prentice Hall, 2009). He is currently working on a new business fable on clean energy and climate change called Green Thinking.

by Dennis Posadas Coal is cheap and plentiful. Unlike oil, majority of which is controlled by OPEC states, coal can be found in many areas of the world, including the Philippines. As such, it has formed a significant portion of electric power generated worldwide, despite recent inroads by nuclear and renewable energy. Majority of those coal plants belch CO2 into the atmosphere, which is why NASA chief climate scientist Jim Hansen and many other experts say publicly that there should be a moratorium on the building of coal plants worldwide. Last April, the US Environmental Protection Agency (EPA) declared that six greenhouse gases were a threat to human health and welfare. Chief among the six greenhouse gases was carbon dioxide (CO2). One of the largest emitters of carbon dioxide in the world is the electric power industry, particularly those that operate coal plants. The US alone emits around a billion-and-a-half tons of CO2 annually from electric power generation through coal. Try telling that to fast growing China and India, or the US. Or even to developing economies around the world like the Philippines. This needs to be discussed widely, because frankly, while clean energy is a great topic for discussion, there are still technical and economic issues in getting from where we are now to the point where we can replace coal totally. Jim Rogers, CEO of Duke Energy, one of the largest electric utilities in the US, said in an interview in an episode of 60 Minutes (a popular U.S. television show) earlier this year, that Hansen’s proposal to stop the building of new coal plants cannot be done. While Rogers was one of the first electric utility CEOs who used coal plants to acknowledge the problem of global warming from coal, he says that the industry will arrive at a solution, but not at the pace that Hansen is recommending. When asked if his company had already made the investments towards so called clean coal technology, he said that they are in the process of studying the alternatives. In reality, clean coal technology is really a way to capture the CO2 and store it underground. The technical term for the technology is called Carbon Capture and Storage (CCS). One way to implement CCS is to pass the CO2 emission through a group of compounds called amines. This mixture is then pumped about one kilometer deep underground, into rock formations which have a lot of cracks that can absorb the mixture. The intense pressure underground causes the CO2 to liquefy, where it is hoped that the CO2 will stay underground forever. The solid form of CO2 is dry ice, which most of us have seen. But the long-term effectiveness of CCS is still unknown. If despite the expense to implement, it will still leak CO2 into the atmosphere, then the exercise will be a gargantuan waste of resources. There are a limited number of sites around the world that have built CCS facilities but a study on the long term effectiveness of CCS has yet to be conducted. A coal expert who I spoke to, but declined to be identified surmised that one possible scenario is a leak caused by an earthquake in the vicinity, although he said that it was a hypothesis. Aside from this, the scale of CCS is mindboggling. Unlike the nuclear power industry which can take nuclear wastes and store it in distant centralized repositories like Yucca Mountain in the US, each coal plant will need to have access to a CCS facility nearby. The US alone emits more than a billion- and-a-half tons of CO2 a year, not counting China and India, which gives an idea of the undertaking. In the end, it could all boil down to costs. In 2004, the Massachusetts Institute of Technology (MIT) released a study called "The Future of Coal" which discussed the outlook for CCS technology. It estimated that to make CCS competitive, carbon emissions will have to be charged at around $30/ton. Recently, the US House of Representatives, through the Democrat sponsored Waxman-Markey bill, looks like it has arrived at a compromise, but will this be enough to justify CCS in new coal plants? Even if the US signs a treaty in Copenhagen later this year, it will be very hard to get private industry to support CCS if the economics doesn’t make sense. At this point theoretically CCS looks like a way to make coal a potentially non-environmentally threatening energy source. However, unless the technology and economics is brought up to speed and more research is done, it will remain simply a public relations tool brought up by the coal industry to fend off attacks against it for the moment.  _____ Dennis Posadas is the Editor of Cleantech Asia Online, a newly launched site devoted to opinions and insights about the Asia cleantech economy. He is also the author of Jump Start: A Technopreneurship Fable (Singapore: Pearson Prentice Hall, 2009)