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Rethink the Grid: Personal Power Stations

personal power packs

Rethinking the grid is quickly emerging as one of the hottest topics. The concept of our own personal power stations can be seductive, and just might save us a whole lot of money too.

“Get big or get out!” Those were the famous, and controversial, words of Earl Butz, Secretary of Agriculture in the seventies. Considering the combination of renewable technology and battery storage, a new popular mantra may emerge: get small and be free.

Much ado about all things renewable together with the objections that technologies can never fully replace fossil fuel generation is popular among a certain set. Here in Texas, among arch conservatives, Solyndra lives on…and on…and on. But the truth is that Solyndra is ancient history. New technologies are ramping up and have been highly successful and may change the way we use the grid forever. Perhaps most interesting of all, however, is the way in which new ways to think about the grid and electricity are prompting entrepreneurs worldwide to rethink, remake and reuse. For instance, what if we all had the ability to transform our homes into micro personal power stations?

The grid is an interesting beast. It typically operates using several different power options together with some back up reserve. Oddly, it runs with virtually zero storage capacity because large amounts of electricity are difficult to store. So nobody really addressed that problem. Until now.

What if we decided to think outside our box and imagine that instead of myriad wires joining each of our houses, there were solar panels on the roof. These in turn pumped electricity into an array of batteries in our garages next to the work bench. Or into our EV which could also act as a storage vehicle. No pun intended.

Large scale storage is a problem because it is large scale. The needs of a utility are vastly different than the needs of an individual home. So tackling the problem of storage would seem to make the most sense if done on a small scale. GTM Research expects home battery storage to grow into a billion dollar a year money generator by 2018. That’s only three years away. Solar City, a large solar installer, is already offering battery storage for home use. They describe their system as:

“…a cost-effective, wall-mounted storage appliance that is small, powerful and covered by a long lasting full 10 year warranty.”

So our homes become a micro-grid. Having said all this, there will still be a need for large scale utility generation. Industrial users for instance would probably be better off using the grid system. This is where the larger scale storage solutions currently being tried and offered are coming into their own.

Electricity supply is never constant. It fluctuates throughout the day. To use renewable energy on a large scale, battery storage is needed. While lithium ion batteries have taken center stage, other less sexy technologies are being employed with success. If lithium ion batteries are the Tesla’s of the energy storage world, then flow batteries are the pick up trucks: hard working and reliable. Lead acid batteries too are gaining traction. All of these technologies perform different functions which are critical to grid reliability.

Navigant Research stated:

“Flow batteries have been shown to excel at long-duration energy storage applications and advanced lead-acid batteries have proven to be excellent performers in power-intensive applications.”

Further, these markets are expected to grow quickly. Navigant forecasts:

“…the annual revenue of cell sales for advanced batteries for utility-scale applications will grow from $221.8 million in 2014 to $17.8 billion in 2023.”

And equally interesting, Navigant projects:

“…the annual energy capacity of advanced batteries for utility-scale energy storage applications will grow from 412 megawatt-hours (MWh) in 2014 to more than 51,200 MWh in 2023, at a compound annual growth rate of 71 percent.”

Other aspects of storage are also being proactively addressed. One of the most common arguments heard is “what do we do with the spent automotive batteries”? Interestingly enough, BMW, and others, are working on that. Apparently an EV battery can have as much as 70% of its storage capacity still intact after its automotive life. So BMW has partnered up with Bosch and Vattenfall, a Swedish company, to repurpose used battery packs into grid storage. Home storage is also a possibility. So rethink, remake and reuse is really happening.

Another example of rethink is the recent announcement by Nissan that they have entered into a deal with Endesa, a Spanish utility behemoth. This arrangement would allow motorists to sell the unused power stored in their EV’s back to the grid. Such access to additional power could potentially provide extra stability for the utility and thereby the grid.

The grid doesn’t have to be run the way it has always been run. We can innovate. And innovation is precisely what is occurring. Perhaps the most important “rethink” of all is in our own heads as we learn to open our minds to using the grid in a whole new way.

Personal pizzas, personal computers, personal trainers…and now our own personal power stations.

The post Rethink the Grid: Personal Power Stations appeared first on Energy Policy Forum.

Photo Credit: Individual Power and the Grid/shutterstock

Deborah Lawrence's picture

Thank Deborah for the Post!

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Bob Meinetz's picture
Bob Meinetz on March 21, 2015

Deborah, small-scale storage is not the problem. The problem is that there are very few places in the world where it’s practical for households or apartments to store enough energy, and not run out during a week of cloudy weather. That makes the grid necessary even for residential customers, and a home storage system unnecessarily redundant.

There are some individuals who consider the right to attach to the grid for free a God-given one, even though 80% of the U.S. grid is the result of private investment. I’m not sure why – perhaps it’s related to the misperception it’s acceptable to download and enjoy others’ intellectual property for free. The cultural phenomenon equating availability with generosity is a modern one – one that creates a business model at odds with profitability, as well as ethics.

The utility owned-and-operated grid has no need at all for distributed generation, and the idea that wind or solar promotes “stability” or provides any reliable peak power reduction is nonsense. But what utilities do not do is stifle anyone’s freedom. There’s no place in the U.S. where residents are forced to sign up for utility electrical power. Nearly everyone does so because it’s so extraordinarily useful.

Bruce McFarling's picture
Bruce McFarling on March 21, 2015

“Large scale storage is a problem because it is large scale. The needs of a utility are vastly different than the needs of an individual home. So tackling the problem of storage would seem to make the most sense if done on a small scale.”

This would only be true if (1) the need for storage scales up linearly as you add more homes together and (2) there is no substantial scale economies in storage.

But of course, both of these are false, which is why “would seem to make the most sense” ought to be followed by the statement, “but this surface appearance goes away when you dig more deeply into the issue”.

One reason that the need for storage does not scale up linearly as you collect homes together into a grid is that, even for solar distributed across a local area, the production of solar panels distributed across an area is more stable than the production of solar by each individual home.

A second reason is that as you collect homes together into a grid, you provide a collection of consumers that are large enough to provide energy with windfarms, where on average the onshore wind in strong wind resource areas tends to blow most strongly at night, and is on average weakest during hot, clear days which tend to offer the best solar generation, so that combining wind energy production over the grid with solar generation at the home reduces the total need for energy storage. And the windpower is less expensive per delivered kWh than the solar power, so it reduces average cost of renewable energy at the same time as it reduces the total energy storage task.

And of course the most capital and energy efficient energy storage options that we have available today are hydropower, including the harvest of hydropower energy in dams which store the power to allow it to be generated at different rates at different times of day, based on need, and PHS, which remains more economical than battery storage.

Another emerging economical energy storage option is the battery capacity of electric vehicles, where the fact that a vehicle must be equipped with the highest capacity that one might wish to have on hand, and which in many cases will include a surplus capacity for one’s needs “tomorrow”, means that we may see a growing amount of distributed energy storage capacity that is bought and paid for with one purpose in mind but which is available for use in the energy production and distribution system. However, the very fact that this is a secondary use of a capacity purchased for another use means that the availability is far more secure if a large number are connected to a common grid, since at the household level, that particular battery will frequently be entirely removed from the household system, while at the grid level the amount of that capacity that is connected to the grid be less volatile, and much of the time when it is away from the house, it will be parked somewhere, and if it can be connected to the grid there, will be available to the grid for more hours of the average day than it is available to a given household.

Schalk Cloete's picture
Schalk Cloete on March 21, 2015

For the other side of this story, I wrote two articles earlier on the potential for distributed generation and distributed storage & demand response. Here are the main conclusions:

“In comparison to the utility scale alternative, distributed generation (primarily solar PV) has a fairly low potential and, in the vast majority of cases, will be unnecessarily expensive and complex.

This does not mean that distributed generation will not be deployed. Niche markets exist and the ideological attractiveness of this energy option remains very high and extremely marketable. What it does mean, however, is that distributed generation will most probably not make more than a minor contribution to the clean energy revolution that will have to take place this century. Headlines claiming that distributed solar will soon overthrow utilities everywhere should be patiently ignored until reality sinks in. As an example, the highly optimistic hi-Ren scenario in the PV Technology Roadmap from the IEA which has received broad PV-positive press lately forecasts about 8% of electricity from distributed PV by 2050. The vast majority of the remaining 92% will remain utility scale. It should also be mentioned that electricity accounts for only about 40% of primary energy consumption. 

The final conclusion from these two articles is twofold: 1) distributed generation is affordable, but far from economic and 2) distributed generation can contribute, but only to a minor degree. For these reasons, the ideological attractiveness of distributed generation presents a particularly difficult problem: we simply cannot afford to aggressively pursue uneconomic solutions with very limited potential when it comes to the energy and climate issues we face today. The time has come to leave ideology at the door and get pragmatic about the challenge before us.”

Clayton Handleman's picture
Clayton Handleman on March 21, 2015

The computer on my desktop has more power than supercomputers of not so long ago.  The computing power on my smartphone is more than was available to the entire Apollo program.  My hard drive has more terrabytes than were used to run entire fortune 500 companies just a short time ago.  Should we chuck the Internet and go it alone.  Of course not.  Why is is that now that we have Terrabytes of storage in our homes off site storage is booming.  Its the network effect and that holds true with the grid as well.  There is value in working together.

The smartgrid can allow us to monitize everything from storage to load shift to reliability.  Then the market can shake out what the best approach is.  And regulation should be focused on assuring that happens in a way that does not disrupt service.  However, the chicken little’s that are attached to single solutions such as nuclear power should be given little credence.  Just as the phone system didn’t break when users were permitted to have their own devices, the grid can transition without disaster.  And in 10 years it will likely look different than anyone on this board imagined. 

So yes, distributed storage and generation are good things.  However autonomy is not the ideal scenario.  As has already been pointed out, aggregating storage and load shift opportunities brings far more value to all who are on the grid.  Lets focus on synergistic market making not adversarial balkanism.

Deborah Lawrence's picture
Deborah Lawrence on March 21, 2015

From my perspective, I think one of the most challenging aspects is not going to be the engineering solutions but simply getting people to think about power usage in a completely different way. That is why discussions like this are so helpful. We need to turn ideas on their head.

Bob Meinetz's picture
Bob Meinetz on March 21, 2015

Deborah, I agree with you – the challenge is to get people to think about power usage in a completely different way. That way would be, “Making the energy I use is causing permanent damage to the environment. I need to use less of it.”

If we could get everyone to use less energy, our problem is solved. But few people understand distributed generation, capacity factors, net metering, and atmospheric carbon – or even want to. They want to know they can use their iPhone tomorrow if they plug it in tonight, that their DVR will record the latest episode of their favorite program, and after they watch they can get on Facebook to tell their friend about it. That’s their problem.

I think you would agree that counting on people to voluntarily use less energy – a lot less – stands little chance of success, as does rationing or limiting access to it. With that given, our problem becomes one dependent on viable engineering solutions which can deliver a lot of energy cleanly. I’m not an engineer, but fortunately we have professional engineers commenting here on TEC every day – Nathan, Joris, Engineer – Poet, others. Overwhelmingly, their position is that distributed generation and renewables will not significantly improve our chances of addressing global warming. 

Whether it’s climate change or generating clean energy, I’ll defer to the experts.

Bruce McFarling's picture
Bruce McFarling on March 21, 2015

It should also be mentioned that electricity accounts for only about 40% of primary energy consumption.”

Quite: while this share will go up as we phase out the use of petroleum for transport, distributed electricity production is only part of the distributed story, since in the US about 3/4 of residential energy use is for space heating, water heating, and air conditioning.

Passive thermal solar collection for solar heat and cooling by design, and active thermal solar collection for active solar heat and cooling and water heating likely have a lower ceiling in terms of year on year percentage growth rates, due to the greater complexity of retrofitting these systems versus installing solar panels on roofs … but they quite possibly having a higher ceiling in terms of total energy contribution.

Clayton Handleman's picture
Clayton Handleman on March 22, 2015

It is also significant that the EV storage is free for use by the grid.  Not as a source but as a sink.  By using real time price signals to shift the demand side, there is no degradation of the battery yet renewable intermittency can be managed to reduce wind curtailment allowing for larger capacity additions. 

For example, Texas has a night peaking wind resource but load peaks during the day.  This puts heavy demand on storage or requires an alternative source such as gas.  Solar can fill some of the daytime peak but at high CF sites in TX, wind is very inexpensive so is the preferred source.  Cars will be sold with excess battery capacity to cover the unusual longer trips rather than the daily / typical commutes and around town driving.  In aggregate this offers a lot of idle storage capacity.  If EVs charge at night then they shift load to night time.  That night time charging will shift demand to night time allowing for a larger build out of wind power to meet that night time demand.  However, for the most part, wind does not stop blowing during the day, it is simply reduced.  So increasing the capacity for night charging also raises the floor of production during the day.  This reduces demand for FF sources.

However that only gets to part of the benefit.  If real time pricing is developed, EV drivers can set algorythms to arbitrage power purchase.  This will further reduce the cost of energy for EVs, reducing the cost of operation thus accelerating adoption.  At the same time it will smooth out demand peaks and troughs and thus mitigate the wind’s intermittency.

As an example, an algorythm could be set to charge the vehicle to 50% by 6:00am but to go as high as 85% if power can be purchased below a set threshold.  During wind peaks, the cost of power would drop and more cars would charge.  During lulls, the real time price of power would rise and many of the EVs would switch offline.  More complex algorythms would allow optimization.  This would moderate the intermittency of the renewable resource and have the effect of adding free storage.  It would make driving EVs more economical thus accelerating their adoption. 

 

Deborah Lawrence's picture
Deborah Lawrence on March 22, 2015

I could not agree more that EVs will eventually prove a great energy storage sink. And software which allows us to arbitrage power purchase just makes sense. I don’t agree that the only way out of this problem is to use less. Firstly, Bob, as you rightly mention that will not be a popular message so it will almost certainly have little resonance. In other words, we will be pushing that cart up a very steep hill. Secondly, I think there ARE engineering solutions: smart grid, energy efficient appliances, etc. which will allow us to use power more efficiently. Thirdly, using renewables will also allow greater economic growth as the inflationary pressure of FF pricing is removed from economies. Economic growth globally has slowed in developed countries since about 2005 right about the time FF production peaked and CAPEX exploded. Moving away from pricing volatility and indeed price pressure will have beneficial impacts.

Bob Meinetz's picture
Bob Meinetz on March 22, 2015

Clayton, of all the EV activists I’ve met over the years, not a one of them would be interested in setting “algorythms” to arbitrage power purchase, They wouldn’t understand how to do so, care about learning how to do so, nor care about the $.74 they could save by excusing themselves from a meeting at work to run down and plug in their car because the wind picked up (I know, there will be an “app” to handle that, and they wouldn’t bother with that either).

These are fictions invented by renewables activists to plug the gaping holes in their vision.

Nathan Wilson's picture
Nathan Wilson on March 22, 2015

One of the biggest challenges I see in the clean energy discussion is putting ideology aside and staying grounded in the science. It is easy for us to accuse the global warming deniers of this error, but we environmentalists will often ignore science when advocating our favorite energy source.

The science/engineering still says we should minimize our CO2 emissions using a combination of efficiency, renewables, nuclear, and fossil fuel with CC&S.

Variable renewables work fine, as long as they are complimented with fossil fuel with CC&S.  So when I see advocacy of the renewables without any mention of the CC&S, I’m terrified that we will never have public support for a full solution (especially given the widespread mis-understanding of the hidden costs of the renewable-rich solutions).  It is possible that smart-grids will empower people to use energy when it’s available and go without during scarcity; but this strikes me as extremely likely to fail (it mimics the worst features of a third world power grid).  It is also possible that a revolution in grid-energy storage is coming, but I don’t see how such solutions can compete with fossil fuel.  On the other hand, switching from fossil fuel to nuclear reduces the amount of waste to be managed by six orders of magnitude, and gets rid of essentially all of the health and environmental effects, all without requiring any breakthroughs in energy storage or consumer behaviors.

It breaks my heart to see advocacy of decentralized pathways, since these inevitably make the whole system cost more (which further undermines public support), restricts use of the most potent solutions available, increases the distinction between the haves and have-nots, as well as making the whole solution more dependent on individual action.

Our problem is not just a dependence on fossil fuel as an energy source, we use fossil fuels for energy carriers as well.  Using electricity to power our cars is a step in the right direction, but we must also adopt the other carbon-free energy carriers:  hot-water from district heat networks for domestic space and water heating, ammonia fuel for heavy duty trucks and other difficult-to-electrify applications, and hydrogen for industrial uses.

It’s not ideas for specific solutions that we need more of, it’s advocacy for acceptance of all of the science (including the science that says that nuclear is much safer than we’ve been told).

Engineer- Poet's picture
Engineer- Poet on March 22, 2015

of all the EV activists I’ve met over the years, not a one of them would be interested in setting “algorythms” to arbitrage power purchase,

They’ll use it if it comes with no work on their part.  My Fusion Energi, now 2 years old, has an option to schedule charging for off-peak hours.  I don’t use it because I don’t have time-of-day billing, but I could if I wanted to.  Sooner rather than later this will be something that gets set up by your utility when you install a charger, or by the dealer when the car is purchased or maintained.

The status consumer will go for this first and biggest.  The total number of Teslas on the road isn’t large enough to be a major player, but the status of being able to claim your car is run on 100% RE will attract quite a few.  If the car’s charger is controlled by an aggregator who manages load to soak up surges from wind and PV (and perhaps sell other V2G-related services at the same time), there would even be money to be made.  Feed this back to the customer as a page in the car’s display and the smart-phone app that shows fraction of RE used, and you’ve got something people will buy.

That said, the biggest potential for electrified powertrains in the next 10 years is in PHEVs, hybrids and mild-hybrids.  The PHEV often needs as much energy as it can get as fast as it can get it, so most potential for DSM is during stops lasting hours (the work day or at home overnight).  I think there’s untapped potential in conventional hybrids and even mild hybrids.  If these are ever connected to the grid at all (there have been no announcements of plug-ins for mild hybrids that I know of) they could be managed as down-regulation for the grid, likely by the same aggregator handling Teslas.  If your hybrid battery can take 300 watt-hours to top it off and you’re parking somewhere for an hour, a 30% duty cycle on the charger will do it and you get a gas-free mile of range (and likely a warm feeling); you could add services like pre-conditioning the cabin to make it attractive to the driver.  I don’t know what second-by-second controllable demand is worth to the grid operator, but it might be enough to get power very cheaply.

These are fictions invented by renewables activists to plug the gaping holes in their vision.

To be more accurate, the notion of EVs as mass storage for the grid is a fantasy which can only be held by the innumerate or willfully ignorant.  If all of the 250 million-odd light-duty vehicles in the USA had a 24-kWh battery pack like the Leaf, the total of 6 TWh of capacity would be able to serve the US grid’s 450 GW of average load for just over 12 hours… assuming it (a) started fully charged, and (b) had nothing else to do, like powering cars.  That’s obviously a fantasy.  In reality, there are worthwhile uses for grid-connected vehicles that need no other justification.  250 million Leafs could do a wonderful job of levelling the grid’s daily load swings, eliminating most peaking generation and allowing a vast expansion of base-load generators like nuclear.

Engineer- Poet's picture
Engineer- Poet on March 22, 2015

I think one of the most challenging aspects is not going to be the engineering solutions but simply getting people to think about power usage in a completely different way.

You don’t spell out what you mean by this.  Many Greens view energy usage as an intrinsic evil; see Bob Meinetz below for an example.  That’s certainly different, but not in a productive way.

I’m with Nathan on this one.  Energy consumption relates directly to standard of living, and people aren’t going to accept a policy of poverty if they have any way to fight it.  As we’ve seen in Greece, people will deforest areas if they can’t afford heating fuel; this was a predicted outcome, so there’s no excuse to claim ignorance.  Knowingly steering society toward an ecological disaster in the name of the environment has got to be one of the most twisted and cynical things I’ve ever seen.

This is why I’m such a staunch advocate of nuclear power.  Even the worst nuclear power disaster in the world created… a thriving wildlife preserve.  Nuclear has the smallest footprint of any source of energy we have.  If we want to live lightly on the earth, we have no alternative but to rely on the atom.

Nathan Wilson's picture
Nathan Wilson on March 22, 2015

Cars will be sold with excess battery capacity to cover the unusual longer tripsidle storage capacity

I doubt it.  I think the biggest priority will be having enough capacity to cover times when the user forgets to plug-in and/or takes unexpected excursions after work.  This means most EV owners will expect their cars to be fully charged every morning, wind or calm.

For the small fraction of EV owners who do opt for the larger batteries, how much financial incentive can you offer them to not charge on windless/cloudy days?  They are only buying about a dollar’s worth of electricity per day to begin with, if you offer them 20% off, that’s not very presuasive compared to an increased car payment for the premium model.  You can’t economically justify a much larger premium due to the low cost of fossil fuel, even with a very large cost on carbon emissions.

On the other hand, a nuclear solution would offer reliable off-peak electricity every night.  And instead of over-producing in the spring and fall when electrical demand is lowest (like wind), the nuclear fleet has lower average output in spring and fall, due to scheduled maintenance & refueling.  The seasonal energy demand match in a nuclear-rich grid gets even better with a little solar added for the summer, and gets much better in winter if the nukes operate in combined-heat-and-power mode delivering waste heat to district heating networks. 

Clayton Handleman's picture
Clayton Handleman on March 22, 2015

Thanks for your thoughts Nathan.

Bolt claims that they will be 200 miles per charge and Tesla’s mass market vehicle will be pretty capable as well.  The Gigafactory is claimed to be designed to produce batteries for 500,000 cars and to be able to assemble 50GWhr of batterypacks.  So it would appear that they intend to go to even higher battery sizes i.e. that math works out to 100kwhr per car.  Remember that the larger the battery, the longer it lasts since it is the cycles that kill them over time.  So if the choice is buy two batteries over the lifetime or one and benefit from the longer range then seems like the choice is pretty clear.

It is also clear that Tesla is using the high margins of the S and X to develop technology that can be built out into high volume vehicles.  And Tesla is already talking to their cars remotely and providing software upgrades etc.  And Musk is pretty clear about where he is going.  I am sure that the smarts for grid arbitrage are already well beyond the concept phase.  Probably all they need is the price signal and they can take it from there.  After all, the Tesla already has charging algorythms available to the user such as when to start and how full to charge the battery. 

In any event, its all very speculative and I agree that it will not solve all of the issues such as the rare multiday lulls.  But it is a great way to address short term fluctuations (hours and less) and avoid curtailment and short bursts from peaking plants.  If the grid operators are forced to monetize the intermittency then we may see higher spreads for flexible loads.   

Bob Meinetz's picture
Bob Meinetz on March 23, 2015

Clayton, I can’t respond to most of this until you learn what “algorithm” and “arbitrage” mean. The way you’re using them makes no sense at all.

And I’m sorry you feel persecuted by utilities. It’s nothing personal – they just don’t have much use for what you’re trying to sell. But instead of relying on utility-owned wires and utility-generated energy and $billions of utility investment to broadcast delusional conspiracy theories, wouldn’t it be just a bit less hypocritical to go off-grid and walk the walk – demonstrate the value of renewable energy from the position of self-sufficiency of which you claim it’s capable?

Maybe you already have. Have you?

Clayton Handleman's picture
Clayton Handleman on March 23, 2015

Utilities are regulated monopolies.   Not competitive entrepreneurial ventures in the traditional sense.  So the general public has a vested interest and a legal right to impact how they are run.  Good try though.  Is someone paying you to come up with this silliness?

 

 

Joris van Dorp's picture
Joris van Dorp on March 23, 2015

“Overwhelmingly, their position is that distributed generation and renewables will not significantly improve our chances of addressing global warming.”

For what it’s worth, my position is simple. There are a million different ways to address global warming, but none of them have a credible chance of success unless they offer the energy services we currently get from fossil fuels at a competitive price.

I have no problem imagining EV cars providing storage to a grid dominated by distributed renewable generation. Technically, it is certainly feasible. But economically it is a no go. Such a system will cost far more (several times more) than the conventional fossil-fuel dominated system.

There are three ways to switch to a more expensive energy system:

1. Subsidize the new system, or pass laws which force people and businesses to implement it at any cost.

2. Penalise the existing system, making it unaffordable or even illegal to use it.

3. Get the people to develop an emotional or philosophical attachment to the new system, in effect increasing the utility of the new system beyond merely the provision of energy services, to include the provision of emotional or philosophical pleasure.

A lot has been said about options 1 and 2 here and elsewhere. The problem with those options is that this will only work at the scale of individual countries which are rich enough to extract the required extra funds from the public without running into political problems along the way. Germany, Denmark and some other rich countries are going this route, though is not easy. Spain also tried this, but they failed catastophically when the financial crisis eliminated that country’s rich-country status. Spain is now a renewable energy wasteland of anger, debt and broken dreams. Spain is thus a terrible warning of what can happen when the money runs out before a clean energy plan along the lines of option 1 and 2 is completed. Countries which pursue options 1 and/or 2 will do so only as long as they remain rich countries. As such, there a permanent risk that such a country will turn back to dirty energy sooner or later.

Option 3 would seem to be what Deborah is getting at: If society can develop emotional or philosophical attachment to a particular clean energy system, then that system is in fact providing a very real additional value to society, which could in principle offset the additional cost of the particular system. How much are people willing to pay extra for a kWh of clean energy? If people are willing to pay an additional 10 to 20 ct/kWh for clean energy, then that would plausibly be enough to switch to a (non-nuclear) clean energy system. Assuming 10.000 kWh of electricity consumption per capita in a rich, industrialised and electrified country, this translates to an annual additional cost for clean electricity of 1000 to 2000 dollars per capita. (warning: per capita heat energy and liquid fuels energy demand is not included and will cost perhaps a few thousand per capita more per year to be clean and non-nuclear!)

So my question to Deborah would be: do you think it is possible to convince a majority of people – globally – to gladly sacrifice 1000 to 2000 dollars per year in order to get non-nuclear clean energy and thusly a solution to climate change?

In rich countries, I like to believe that it is indeed possible to convince a majority of people to pay such a premium. But I don’t think it is likely, which is why I don’t believe this is credible solution to climate change. Moreover, I don’t think it is possible at all to get this option to work in developing countries, where people typically don’t have thousands of dollars of expendable cash to burn per capita, purely for emotional or philosophical reasons.

Bruce McFarling's picture
Bruce McFarling on March 23, 2015

I doubt it.  I think the biggest priority will be having enough capacity to cover times when the user forgets to plug-in and/or takes unexpected excursions after work. “

You doubt that cars will be bought with excess capacity over the average mileage between charging by citing two examples of greater mileage between charging?

In any event, thanks for offering a couple of specific examples of longer “maximum trips” between charging, since the language used in the EV market often confuses people into thinking that its a matter of a vacation drive to Grandma’s house in the country.

There are likely to continue to be a limited number of battery options offered with each model, due to the combination of economies of scale in production of a small number of distinct options for each model and economies of scope in distributing and marketing a small number of distinct options for each model. And a substantial portion of the population will elect to buy the option that gives them “range to spare” than will buy the option that gives them “normally enough range, except if I have to stop by the supermarket after work”. And there is a thumb on the scale in that decision, since selling them into that is part of the car salesman’s job.

And since some share of the market will surely opt for the “range to spare” choice, the discussion not around the availability of spare capacity (both dispatchable demand and also dispatchable storage) but around the dispatchable demand factor and the storage capacity factor as a percentage of total fleet EV storage capacity.

“Only charging at home because there aren’t any charging options at work” is a scenario in an immature market which would become less common if the market matures around predominantly individual vehicles.

The scenario which may results in the steepest reduction of dispatchable demand and distributed storage is a market that does not mature around predominantly individual vehicles, as in some conceivable driverless car scenarios (though I do not know whether I would characterize them as plausible) the private motor vehicle share would drop substantially, which implies a smaller of vehicles providing equivalent transport service, and so implies a smaller aggregate fleet battery capacity.


donough shanahan's picture
donough shanahan on March 23, 2015

Nathan

And not only that but you have the energy losses in distribution, storage and redistribution. 

Jeffrey Miller's picture
Jeffrey Miller on March 23, 2015

Joris, 

While sympathetic to your larger points, I am not sure I completely agree with your analysis. It is certainly true that the extremely inefficient and convoluted system of subsidies and command and control regulations that various countries have implemented both increase the cost of energy and – more relevant – are a drag on the economy and thus impose costs that people may refuse to shoulder, especially in countries that are not wealthy. 

However, as you know, economists have devised ways to increase the cost of carbon without imposing a drag on the economy, and this is true even if countries act unilaterally. The simplest way to do this is by a carefully designed, revenue neutral, carbon tax. The key words here are ‘revenue neutral’. A carbon tax without offsetting other, even less efficient forms of taxation, would indeed be a drag on the economy (as are subsidies and command and control); if however this kind of pollution tax were levied instead of even more inefficient forms of tax, the economy would benefit or at least not be harmed (carbon intensive industries would of course be harmed, by design). With a well designed, gradually implemented carbon tax, we could eat our cake and have it too – efficiently eliminate emissions while not damaging economic growth. 

 

Of course, finding a political consensus to implement a rational, Pigouvian tax may be more than our species is capable of. 

Engineer- Poet's picture
Engineer- Poet on March 23, 2015

economists have devised ways to increase the cost of carbon without imposing a drag on the economy

I’m not sure this is really the case.  A tax shift to taxing carbon would be revenue-neutral… but only until people’s behavior changed.  As people substituted more expensive energy for the cheaper (but taxed) energy, tax revenues would go down while total energy spending would go up.  Net result, lower standard of living.

Engineer- Poet's picture
Engineer- Poet on March 23, 2015

It is also significant that the EV storage is free for use by the grid. Not as a source but as a sink.

It’s only “free” if you have more time to charge it than the time it’s parked; otherwise it needs to charge at maximum, and it is not a schedulable load.  Energy supplies which go AWOL for hours or days can’t handle such needs.  This is why fossil fuels were developed in the first place; ignoring that fact won’t make it go away.

for the most part, wind does not stop blowing during the day, it is simply reduced.

Wind can drop below the threshold of zero output over broad areas for days and weeks at a time.  There are multiple examples of this from the BPA in 2014 alone.  Again, pretending this isn’t an issue won’t make it go away.  If your plans fail to deal correctly with reality, they WILL fail.

Engineer- Poet's picture
Engineer- Poet on March 23, 2015

the production of solar panels distributed across an area is more stable than the production of solar by each individual home.

Not appreciably, and the “outages” from clouds and night are highly correlated.  Or are you claiming that we need—and must build—inter-continental grids?  That’s not a “micro-grid”; it’s a great deal more “macro” than anything currently in existence.

A second reason is that as you collect homes together into a grid, you provide a collection of consumers that are large enough to provide energy with windfarms

Wind farms using modern turbines create dangers from thrown ice and high-velocity rotor parts; they cannot be located in residential developments as the minimum safe distance is too great.  Also, the wind over small areas (even whole US states) is highly correlated and cannot provide the stability you imply is necessary to reduce storage requirements to something affordable.

the onshore wind in strong wind resource areas tends to blow most strongly at night, and is on average weakest during hot, clear days which tend to offer the best solar generation

So what do you do during the 16 hours a day when the sun is low or absent and there’s a high-pressure area suppressing the wind?

the most capital and energy efficient energy storage options that we have available today are hydropower, including the harvest of hydropower energy in dams which store the power to allow it to be generated at different rates at different times of day, based on need, and PHS, which remains more economical than battery storage.

It may have been Schalk Cloete (I can’t find a reference right now) who concluded that any form of storage was uneconomic with wind power, compared to spilling the excess; PHS was economic with solar because of solar’s high cost (low EROI), but no other type of storage.  Neither has an EROI high enough to continue the industries which create solar panels and wind farms.

Another emerging economical energy storage option is the battery capacity of electric vehicles

I really wish that people would (or could) learn to do simple arithmetic.  You know, multiplication and division?  Almost all calculators can handle large numbers, there’s no excuse for getting them wrong (or ignoring them in the first place).

There are approximately 250 million light-duty vehicles in the USA.  If every one of them carried a Nissan Leaf-sized battery pack (24 kWh), they would be able to store an aggregate of 6 terawatt-hours (6 TWh).  The average grid load of the USA is about 450 GW, so the storage capacity of such a fleet would be able to supply said average load for a whole… 13.3 hours.  That is assuming that the batteries start full, end dead, and don’t have anything else to do in the mean time (like driving people around).

Ignoring the numbers won’t make them go away.  Trying to serve the electric load (let alone other energy requirements!) of an industrial society using unreliable sources like wind and solar requires staggering amounts of storage.  There is literally no way to provide so much storage with the technology we have on hand using the energy that such intermittent sources can supply.  It is a textbook definition of both “unsustainable” and “unachievable”.

the very fact that this is a secondary use of a capacity purchased for another use

But using said capacity to buffer the grid makes it unavailable as a buffer against unanticipated need for extra mileage driven—the precise use for which the driver would supposedly buy it in the first place.  You have not thought this through.  Rather, I suspect that you cannot think this through, because the inevitable conclusion is opposite to what your dogma insists you must believe.  Dogma is the enemy of reason, and reason is essential to solving the problems of human existence.

Deborah Lawrence's picture
Deborah Lawrence on March 23, 2015

Actually, Joris, I see this a bit differently. Firstly, companies ARE being “taxed” on carbon as we speak in the US and elsewhere. In the US, company valuations are suffering pro rata to their carbon emissions. The markets are implicitly “charging” ~$28/ton for emissions against company valuation. This needs to rise but at least the market sees that there is a problem and thank God we don’t have to wait around for the Imhoffe’s of the world to find the last of the melting snow or perhaps even more unlikely, pass a law! Secondly, if you look at non-OECD countries something surprising is happening. They are electing to leapfrog hydrocarbons altogether. Why spend billions on hydrocarbon infrastructure, which they don’t currently have much of, and then lock yourself into the vagaries of fuel costs for decades. You know you have to spend money so why not spend it on a technology with no fuel. In my opinion, this will help long term growth in their economies because they will avoid many of the inflationary pressures which energy costs place on growth. And lastly, I am not advocating for an “emotional response” to drive the market. I see enough good economic and business reasons to make a switch. I talk about this all the time in presentations: we are on the cusp of one of the greatest wealth creation events we will ever see. There are myriad opportunities to make a lot of money as we transition to a cleaner economy. And once investors figure this out, they will divest of hydrocarbon assets and pour into renewables. And it won’t really matter if it is the perfect engineering solution. Remember VCR vs. Beta? The dollars will drive this. There is already good indication that this is occurring because renewable stocks have pummeled shale stocks for the past five years in spite of the “shale revolution”. And this outperformance has picked up considerably over the past two years. Markets are leading indicators and it would appear that the markets see potential and wealth creation in the new world energy order.

Engineer- Poet's picture
Engineer- Poet on March 23, 2015

Taking into account that the cost price (LCOE) estimates of IEA for PV electricity in 2050 are ~100% higher than those of Agora (2-4cnt/KWh), you may expect that the 2014 IEA PV prediction (PV’s share of global electricity reaching 16% by 2050) is still far too low.

LCOE is a faulty figure of merit for intermittent, non-dispatchable generators.  What you need is LACE (Levelized Avoided Cost of Energy), which takes the entire system into account.  LACE for PV is much higher than LCOE and escalates with increasing penetration.

Bob Meinetz's picture
Bob Meinetz on March 23, 2015

Clayton, that’s the most sensible comment you’ve made on this thread thus far (apart from the conspiratorial nonsense at the end). Recommended.

You and I do have a right to regulate utilities, and it’s a good thing too. We didn’t always have that right, and it resulted in situations which were, if not exploitative, less than beneficial to societal as a whole. Utilities continue to abuse the public – right now in California it’s looking like the the president of the public utilities commission, who just happened to be an ex-president of Southern California Edison, conspired with the company to prematurely close San Onofre Nuclear Generating Station (SONGS), profit on the building of new natural gas power plants, and send the public a $13.6 billion bill – when fixing the plant would have cost $800 million. The company was only too happy to enlist renewables/antinuclear activists as unwitting tools.

There’s no doubt the system failed the public. This looks to be a clear case of corporate influence in government, on which utilities certainly have no monopoly. But this has been the situation since the 1930s, a give-and-take which attempts to prevent abuse while still giving utilities the right to profit on their investment. There are a lot of upsides to tapping the power of the profit motive, and contrary to rumor American utilities have been responsible for innovative, industry-changing strides in power generation.

Ironically, you decry “Soviet-era” utilities when that’s exactly the model for which you’re advocating – essentially, remove the profit motive by making those decisions for the companies themselves, and nationalize the grid. That’s not going to happen – it relies on too much wishful thinking, and there’s too much at stake. Have you ever wondered why greedy utilities haven’t jumped into renewable energy with both feet if it was so immensely profitable?

Jeffrey Miller's picture
Jeffrey Miller on March 23, 2015

“Firstly, companies ARE being “taxed” on carbon as we speak in the US and elsewhere.” 

This drastically misreads the current situation. If there were a real $28 dollar a ton tax on CO2, the energy landscape would look vastly different than it does now does. There is a reason why the carbon emitters are dead set against any kind of carbon tax – it would hit their bottom line, while the pseudo-“tax” you refer to does not. 

 “In the US, company valuations are suffering pro rata to their carbon emissions. The markets are implicitly “charging” ~$28/ton for emissions against company valuation.”

What is your evidence for this claim?  Even if this were true, and I am far from convinced that it is, a lower market valuation for a company does not have the same effect at all as an increase in the price of carbon emissions. The former is basically irrelevant for reducing emissions, the latter is all important. 

 

To see this, suppose a company is being valued as if there were a carbon tax. In that case, someone can buy the company (at this reduced valuation) and if a real carbon tax were implemented down the road, they will make ordinary profits, and if not, they will make make extraordinary profits. In either case the cost of carbon emissions does not change and does not propagate to the wider economy. On the other hand, if a real carbon tax is implemented, then carbon costs would immediately and correctly be reflected in the prices of all products; and in all corporate investment decisions, and consumers and businesses would optimize their behavior to reduce their carbon emissions. 

To summarize, for a carbon tax to work without damaging the economy, it needs to be real (as in emitters pay real dollars for their emissions) and it needs to be revenue neutral. 

 

Deborah Lawrence's picture
Deborah Lawrence on March 23, 2015

Jeffrey, company valuations are important because they impact a number of key metrics. Metrics in turn impact a company’s ability to access the capital markets. Given that oil and gas now accounts for the largest sector of high yield debt and also given that equity issuance for oil and gas has exploded in Q1 2015 it becomes clear that these companies cannot keep this game up without access to the capital markets. Now they can be huge emitters and limit this access or they can rein in emissions and gain better access. I agree with you that there is a need for a carbon tax but I persoanlly think it has about as much chance as that proverbial snowball in Imhoffe’s hand in the US congress.

As as for who did the study, it was KPMG and titled “Carbon Footprint Stomps on Firm Value”.

Bob Meinetz's picture
Bob Meinetz on March 23, 2015

EP, at least with British Columbia’s revenue-neutral tax it’s not panning out that way. There’s no harm to the overall economy – and although gasoline consumption is up lately because of low crude prices, it’s because B.C. missed a golden opportunity to raise the tax.

There’s no theoretical limit to how high it could go as people consume less fossil fuel and the tax becomes less effective. If tax increases are reasonable and spread out over time, higher prices at the pump needn’t correspond to a lower standard of living. The price is already being paid in the effects of AGW and deaths from carbon pollution.

Jeffrey Miller's picture
Jeffrey Miller on March 23, 2015

Deborah, I am familiar with how capital markets work. Major fossil fuel companies have no difficulty whatsoever in raising capital and short of a real and significant carbon tax or huge technological innovations are very unlikely to have any such problems in the forseeable future. Exxon Mobil is not short of capital or cash. Smaller, less well capitalized companies are hurting now but only because of the extremely low price of oil and gas. This has nothing to do with a putative implied tax. 

The statement that a real carbon tax is not currently politically viable – which I agree with – is tantamount to the statement that we are not serious about avoiding climate change. People don’t like to admit this, but I believe it to be true. 

Jeffrey Miller's picture
Jeffrey Miller on March 23, 2015

EP, I’m not sure I follow your argument. Obviously a tax like this would need to be phased in gradually so that people have time to adapt their behavior (as Bob notes in his comment). Also, as you indicate, care would need to be taken to keep the whole program revenue neutral through time (by adjusting the rates of other, more distortionary, taxes to ensure this) but that is not an insurmountable problem. 

Nathan Wilson's picture
Nathan Wilson on March 23, 2015

You doubt that cars will be bought with excess capacity over the average…”

No, I doubt that the excess capacity will be available to the grid; my point was that “excess” capacity is a benefit to the car owner, that he/she won’t give away for free (it’s a safety net).  I believe that for a modest incentive, people will accept delaying charging until midnight, at least when the car is less than half drained (i.e. to accomodate baseload power), but the incentive required to induce people to delay charging for a whole day would be prohibitive.

“”Only charging at home because there aren’t any charging options at work” is a scenario in an immature market…

Public chargers for outdoor use must be much more rugged and vandlism-resistant that home chargers.  Electricity is expensive enough that once a few percent of people have EVs, I expect the free-charging to go away (even simple 120V outlets can put out hundreds of dollars worth of electricity each year).  This means that chargers will continue to need computer network access to do billing.  This means that they will always be very expensive machines, hence the cost must be much higher than home charging.  So the only people who will plug-in during the day are those who definitely need the charge. The expectation that more than a few percent of EVs will be plugged-in and ready to take advantage of plentiful day-time solar power, on an as-available basis, strikes me as very unrealistic.

Paul O's picture
Paul O on March 23, 2015

Can we just stop salivating over Vapor Ware EV batteries? When will we eventually have enough EV’s for their battery capacity to matter, in 10yrs, 20 yrs. 30yrs? Does anybody know?

How come some of us are banking on a Battery utopia, like a Hen counting her chicks before they are hatched?  What makes us think that EV owners will actually potentially sacrifice range for the common good?

Bruce McFarling's picture
Bruce McFarling on March 24, 2015

No, I doubt that the excess capacity will be available to the grid; my point was that “excess” capacity is a benefit to the car owner, that he/she won’t give away for free (it’s a safety net).  I believe that for a modest incentive, people will accept delaying charging until midnight, at least when the car is less than half drained (i.e. to accomodate baseload power), but the incentive required to induce people to delay charging for a whole day would be prohibitive.”

They are not “giving away” the capacity by not using it when they don’t need it … the capacity is still there for when they do need it. And there’s no particular reason to expect them to have to be willing to “give it away for free” … different rates would be charged for “charge it now until its fully charged” than for “have it at least 80% charged by 5pm”.

And why would there by any reason to try to induce people to delay charging for a whole day? One of the strongest benefits of having that battery storage as a dispatchable demand is the ability to ramp it quickly, so its natural market niche is in the unpredictable component of the hour to hour through to five minute to five minute variance in output. There is no clear rationale for planning to use it for multi-day swings, and so pointing out difficulties in its use for that market niche, that it is less well suited for in any event, does not seem like a very serious critique.

This means that chargers will continue to need computer network access to do billing.  This means that they will always be very expensive machines, hence the cost must be much higher than home charging.  So the only people who will plug-in during the day are those who definitely need the charge.”

Those who definitely benefit from having the charger will include a large portion of PHEV owners, who will prefer plugging in to filling up, and PHEV owners are going to be a substantial share of the market relative to pure EV over the coming decade.

I was surprised to hear that the need for a public charge station to be robust and have access a data network is a significant cost factor, and would appreciate a reference for that, as other discussions I had read suggested that installation costs tend to dominate the costs of the public charge station hardware itself, which places the public charge stations in the position of declining per-station costs if demand for units increase.


Engineer- Poet's picture
Engineer- Poet on March 24, 2015

I’m not sure I follow your argument. Obviously a tax like this would need to be phased in gradually so that people have time to adapt their behavior

Time doesn’t have anything to do with it, it’s the return of energy per dollar.  Let me see if I can come up with a good illustration.

Suppose you have a major source of carbon-based energy costing $10 per million BTU.  The carbon tax eventually raises this to $20/mmBTU to the consumer, but half of that comes back through tax rebates or reductions elsewhere so nothing is lost; people still have the same net amount of energy and money.

Now posit a new energy supplier, not paying the carbon tax, sellng for $15/mmBTU.  People will flock to this supplier as it’s 25% cheaper to them… but the $10 in tax is no longer coming back.  Government has to make up the lost revenue elsewhere, and there’s a deadweight loss to the economy because energy that once took $10 out of the economy now takes $15.

You get similar results if people take measures that cost $15/mmBTU to save energy.  The only way this works is if the extra tax gets people to take energy-saving measures or start new energy suppliers that cost the same or less than $10/mmBTU, but they ignored/could not start before.  That’s the only path which yields a positive return.

Engineer- Poet's picture
Engineer- Poet on March 24, 2015

at least with British Columbia’s revenue-neutral tax it’s not panning out that way.

Probably the changes thus far have been along the lines of altering driving habits, saving energy/carbon at minimal or negative cost.  That’s all to the good.  But perverse incentives always cause problems.  I recall a tale from the Soviet Union, where bread was subsidized so farmers bought it to feed their pigs instead of grain.  You see the same in Venezuela where so many commodities are subsidized; vast amounts are smuggled to neighboring countries for profit.  If you create incentives steep enough to enable economically-destructive ways to get them, you’ll regret it.

I have looked into Citizens Climate Lobby, and something I have noticed is that they have no advocacy for actual low-cost, carbon-free energy.  They seem to assume that it will magically appear if people have an incentive to buy it.  I don’t think we can make that assumption; we must have policy and plans.  De-carbonizing the heat and DHW of a city like New York isn’t going to happen with individual incentives, it’s going to be a huge infrastructure project.

Clayton Handleman's picture
Clayton Handleman on March 24, 2015

200 mile range to be the new normal for EVs by 2018. 

Nice to see this information aggregated in one place confirming the trend to reasonable levels of excess EV storage.  This article does a nice job of pulling together the tea leaves that I have been reading and seems to support the notion that EVs will have considerably more than the range needed for day to day such as typical commute.  That is 2 to 3 times the range of the Nissan Leaf and, presumably 50kwhrs or more. 

Clayton Handleman's picture
Clayton Handleman on March 24, 2015

As you point out EVs solve a major storage problem, that of grid intermittency over periods of a day or less.  That will dramatically increase the available penetration of renewables on the grid.  Are there any situations where storage would be called upon to power the entire grid for 24 hours or longer?  I can’t imagine one.  Here are a few reasons:

1) Solar will always produce during the day. 

2) Roughly 10% of US capacity is hydro which could be called upon to output at higher levels during an unusual emergency load event.

3) I plotted ERCOT data as a function of percent of total nameplate over an entire year.  I could find no time when capacity went below 10% for more than a day.  And there is very little TX wind power deployed in the areas of 50% CF.  So it is likely that they could raise the floor.  With partially decorrelated wind such as Atlantic off shore and other 50% CF regions such as NE, ND and SD, less than 10% of capacity for 24 hours would be highly unlikely.   

4) Great Plains wind is night peaking and solar is, of course, day peaking so they are complementary.

5) With demand based load shifting, the occasional lulls would be addressed through real time pricing signals that would lower demand.  The demands could be substantial and thus very much able to influence behavior.  They would be amortized over the high production times when the wind is blowing. 

6) Solar correlates well with peak air conditioning demand.  While there is a partial time shift, with a supergrid, East Coast peaks occur while Western solar is at high production.  Further, if there were real time pricing there would be an increase in west facing PV arrays further addressing peak load.  This dramatically decreases the load that would need to be serviced by storage.

So no, EV storage will not be a panacea solving the storage problem completely, or making so we can go to 100% wind power.  However they offer a path to much higher useful penetration of windpower onto the grid.  And by acting as a sink rather than a source they can do so at no capital cost to the utilities beyond making the grid smart.  And this should happen anyway as it will lead to more efficient grid operation.

Joe Deely's picture
Joe Deely on March 24, 2015

“200 mile range to be the new normal for EVs by 2018. “

300 by 2022 and 400 by 2026.

Engineer- Poet's picture
Engineer- Poet on March 24, 2015

They are not “giving away” the capacity by not using it when they don’t need it … the capacity is still there for when they do need it.

The capacity’s not there against need if it isn’t charged up.  If it’s ever discharged, it is unavailable until it is recharged.  If you have to wait to charge it you might as well have had the smaller, cheaper battery in the first place.

why would there by any reason to try to induce people to delay charging for a whole day?

Because fossil fuel has been taxed out the wazoo or just plain rationed, your wind farms are idled by a high-pressure area, and it’s dark out.

All these issues essentially disappear if the carbon-free generation is mainly nuclear, but that is an ideological no-no for too many people.

Joris van Dorp's picture
Joris van Dorp on March 25, 2015

Exactly.

I would love the popular promotors of the ‘revenue neutral carbon tax/dividend’ to respond to your comment. I’m thinking specifically about Dr. James Hansen, whom I admire greatly, but who – it seems – has not properly thought through the second-order consequences of any kind of carbon tax – revenue-neutral or not – as you finely illustrate in your comment here

A carbon tax will shift consumption away from carbon energy. That much is obvious. But if it causes a switch to more expensive energy, society suffers. If society suffers, laws change, including carbon tax laws. Spain is the terrible example of how such (predictable) law changes occur.

There is no free lunch. Which is why – and I wish it would be otherwise  – I have no faith at all in the ability of a revenue-neutral carbon tax to provide much of a real solution to climate change. It is simply old wine in new barrels. It is merely a continuation of the run-down ideology that maintains that taxing carbon and/or subsidizing renewables will solve climate change sooner or later. It hasn’t and it won’t, whatever way you package it.

The only credible solution to keeping cheap fossils in the ground, globally and permanently, is to put cheap nuclear on the ground. All else is a tragic, excruciating illusion!

Engineer- Poet's picture
Engineer- Poet on March 25, 2015

Hansen is consistent in this matter; he is a strong advocate of nuclear energy.

Jeffrey Miller's picture
Jeffrey Miller on March 25, 2015

 

EP, Joris, I’m putting this on top for the usual reason. 

EP, you write:

“Now posit a new energy supplier, not paying the carbon tax, sellng for $15/mmBTU.  People will flock to this supplier as it’s 25% cheaper to them… but the $10 in tax is no longer coming back.  Government has to make up the lost revenue elsewhere, and there’s a deadweight loss to the economy because energy that once took $10 out of the economy now takes $15.”

And Joris, you write: 

“A carbon tax will shift consumption away from carbon energy. That much is obvious. But if it causes a switch to more expensive energy, society suffers.”

You both make the general point that a revenue neutral carbon tax has beneficial first order effects, but may have deleterious second order effects. The idea is that a tax may shift energy consumption toward more expensive forms of energy and that this is a dead weight loss to society. 

Your points are well taken. In response I would simply note:

1. When economists study the effect of a tax, they don’t just arm wave and talk about the direct, first order effects. They use models that try to correctly capture all of the much more complicated cascade of interactions and higher order effects of the kind you indicate. These models are obviously imperfect, but they are far better than arm chair theorizing. So when economists almost universally support a carbon tax, they are explicitly considering the kinds of second order effects you outline and are already taking them into account (as best they can; note too that taxes on income and capital also impose dead weight losses).

2. The alternative to a carbon tax is not “do nothing” and is not “start building thousands of new nuclear plants and invest heavily in nuclear research” (my personal preference, perhaps yours as well). The alternative is an even more inefficient regime of subsidies and command and control regulations of the kind that we have now. That is the standard by which a carbon tax needs to be measured. 

 

All that said, I agree that a carbon tax is not a panacea and should not be sold as such. It is however one of the most powerful tools we have available to efficiently reduce carbon emissions and should be deployed for that reason. 

 

Bruce McFarling's picture
Bruce McFarling on March 25, 2015

The capacity’s not there against need if it isn’t charged up.”

But how does that change the fact that there will be often be surplus capacity against current need, and if there is a large share of private vehicles, even more often slack in the timing of charging.

“”why would there by any reason to try to induce people to delay charging for a whole day?”

Because fossil fuel has been taxed out the wazoo or just plain rationed, your wind farms are idled by a high-pressure area, and it’s dark out.”

You also have to assume policies to restrict renewable roll out to only solar PV and wind and, in the particular scenario, prevent roll-out of long haul transmission.

All these issues essentially disappear if the carbon-free generation is mainly nuclear, but that is an ideological no-no for too many people.”

The ongoing failures of nuclear advocates to win those ideological fights is an important reason not to bet the future of the US as a national society and economy on nuclear being allowed to roll out fast enough to do what has to be done all on its own. And straw-man arguments in which renewable portfolios are assumed to contain no energy sources other than solar PV and wind don’t offer much direct reassurance that the critical and strategic capacity of nuclear advocates to win ideological fights is on an upward path.



Joris van Dorp's picture
Joris van Dorp on March 25, 2015

Jeffrey, i fully agree with your response, with the following notes.

In my experience, economists almost universally have zero understanding of energy engineering, making them utterly dependant on others for their information on relative energy technology costs. I would further guess that economists almost universally believe such things as the ridiculous and tiresome ongoing claptrap about ‘grid parity’ of renewable energy. Assuming economists almost universally buy the RE-will-save-us koolaid presented in the popular ‘sciency’ literature on RE economics gives me zero confidence that their projections of the second-order effects of a carbon tax are reliable. I would have to see their calculations with my own eyes before placing any trust on them.

That said, I do know one economist in my own network who convinced me he understood that an RE energy system would be far more expensive that fossil or nuclear. But, he said, the fully RE system would ‘only’ cost about 15% of GDP and in his opinion ‘humanity would be better off if it reduces consumption by spending more on energy.’ That warned me that even if economist DO understand the serious cost implications of an RE future, that does not mean that they will refuse to go along with the asinine ‘renewable energy is free energy’ meme. Economists cannot be relied on to project energy costs. Only engineers can do that, i suspect.

Mark Heslep's picture
Mark Heslep on March 25, 2015

So when economists almost universally support a carbon tax,”

The Brookings reference cited does not claim unequivocal “support”.    Instead, the survey finds broad agreement on a comparative statement: “A tax on the carbon content of fuels would be a less expensive way to reduce carbon-dioxide emissions than would a collection of policies such as ‘corporate average fuel economy’ requirements for automobiles.”

That proposal is a bit of a red herring, because the elimination of fuel  economy requirements  in the US is not on the politics table, with or without a carbon tax.  More detailed treatments of a carbon tax can be found below:

Jeff Miron, CATO, U Michigan, MIT, Harvard.

 

Prof John Cochrane. U Chicago.



Mark Heslep's picture
Mark Heslep on March 25, 2015

‘”Spain is thus a terrible warning of what can happen when the money runs out before a clean energy plan along the lines of option 1 and 2 is completed.”

Yes.  Spain’s desperate approval of a tax on solar panels which it subsidized is like Orwell’s 1984 switch from Eurasia as the enemy state to Eastasia. 

Spaniards Gird for Solar-Power Fee

“…By generating much of his own electricity [via rooftop solar PV], the 55-year-old auto mechanic thought he could lower his shop’s energy bills enough to recoup the €42,000 ($57,000) investment within eight to 10 years….But that was before the government in July decided to levy a fee on renewable-energy production for personal use. The measure, which is expected to win parliamentary approval and take effect Jan. “

Joris van Dorp's picture
Joris van Dorp on March 26, 2015

Deborah, I don’t see this wealth creation effect of switching from fossils to renewables. Specifically, I don’t see it concerning coal. Coal is death and must be competed of the market, globally, for the climate to have a chance of maintaining a semblance of normalcy. Renewables which compete with oil and gas when the sun shines or the wind blows are useless in the battle against coal. This lesson is being learned in Germany:

http://notrickszone.com/2014/12/09/energiewende-takes-a-massive-blow-top-green-energy-proponent-concedes-blunder-with-ugly-consequences-huge-blow-to/#sthash.kDHe788Z.dpbs

(Be warned, that website hosts cockamamie climate science denial articles regularly, but they occassionally have some good stories on cockamamie energy policy as well, as in this case)

Bob Meinetz's picture
Bob Meinetz on March 25, 2015

Bruce – renewables are being rolled out “all on their own”? I had no idea.

And what renewable technology – anything – is capable of replacing even 10% of the fossil fuels we burn for energy (numbers, please – it was renewables pixie-dust promises which resulted in 8 million tons of increased carbon emissions in California)?

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