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Posts from — October 2010

Peeling Away the Onion of Denmark Wind (Part IV – CO2 Emissions)

[Editor's note: Parts I-III provided insight into the complexities involved in any analysis of the Danish electricity system, showing (1) how unique the Denmark situation is, (2) that the details of electricity exports and imports must be understood for each of Denmark’s trading partners, (3) the likelihood that most of Denmark’s wind production is exported, and (4) an indication that the upper limit for manageable wind penetration is in the mid-single digits as a percent of domestic demand. Part IV now looks at the impact on CO2 emissions.]

Figure 1 is a simple look at CO2 emissions and wind electricity production, which explains the claims made by wind proponents based on a superficial examination of the information. Figure 1 shows what the Danish Energy Agency (DEA) reports based on an “adjustment” of actual CO2 emissions. 2007 was a windy year and 2006 was a notably low wind year.

Figure 1 – Wind-generated electricity and CO2 emissions from electricity production in Denmark for the period 1990-2008. 1990 is the base year for Kyoto performance measurement. CO2 emissions are adjusted based on net exports of electricity.

This looks convincing on the surface, but is not substantiated by closer examination. There are many reasons not to look to the relationship between wind electricity production, or any electricity production, and CO2 emissions as evidence of cause and effect, and these will be covered later.

But first, it is important to understand what the actual (or “observed” using the DEA terminology) CO2 emissions in Denmark are before “adjustment”. [Read more →]

October 29, 2010   9 Comments

Peeling Away the Onion of Denmark Wind (Part III – Wind Electricity Used in Denmark)

[Editor's note: Parts I and II set the stage for the development of some conclusions about how much wind electricity Denmark exports, which will be provided in this post. The impact of wind on CO2 emissions  is addressed in Part IV]

To further reduce the total amount of information to a more manageable level, the following is a look at this from the point of view of Denmark’s electricity import/export flows for the most recent “normal” year (2004), dry year, (2006), and a wet year, (2007), these conditions being the main driver of exports. This is shown graphically in Figures 1-3, starting with a normal year. In these charts numbers may not exactly balance due to rounding. Note in particular the net export levels, which are typical for each type of year.

It must be remembered that most of these activities can take place at different times during the year, month or day. For example wind generation is usually strongest at night so Norway and Sweden could be taking Danish wind at night and delivering hydro-generated electricity during the day. Alternatively, Nordic hydro-generated electricity could be being used extensively to balance the remaining large amount of Danish wind for domestic consumption within Denmark or export to Germany.

As Figure 1 shows, in normal years, the flow through Denmark is relatively balanced between imports and exports with its electricity trading partners.

Figure 1 – Danish imports and exports of electricity in 2004, in a normal year, that is when there are not significantly wet or dry conditions in the Nordic region.

Here there is ample opportunity for the export of Danish wind to Norway/Sweden. Bach calculates that about 60% of wind from West Denmark, which has about 80% of total Danish wind capacity, is exported. Wind exports from East Denmark are typically less than that for West Denmark, and Andersen notes that there is more clearly an export of fossil fuel generation from East Denmark. [Read more →]

October 28, 2010   2 Comments

Peeling Away the Onion of Denmark Wind (Part II – Details of Exports and Imports)

[Editor's note: Part I explained the unique character of the Denmark electricity situation as background to a more detailed look at Danish exports/imports of electricity and CO2 emissions. This post and Part III will focus on exports/imports to show the larger role that wind is having in exports. Part IV will then address CO2 emissions, providing the conclusion to this series.]

There is a range of views on the amount of Denmark wind-generated electricity that is exported. Any that rely on annual net exports should be very suspect. Table 1 provides a summary of notable analyses, all of which at least use hourly net exports. All must be read for any comprehensive understanding.

Table 1 – Summary of Notable Analyses of the Amount of Wind-Generated Electricity Exported by Denmark.

Bach and Andersen firmly dispute the CEESA critique of CEPOS, and both show substantial wind exports. Bach makes an interesting comment in his paper:

“Based on these observations it could be said that Germany and Denmark together have solved the integration problems for about 7% wind energy, but only due to the common access to the regulation capabilities of the other Nordic countries, notably hydro power in Norway.”

The case is strong for substantial exports of Denmark wind production as shown by Bach and Andersen, and supported by others such as Sharman. [Read more →]

October 27, 2010   3 Comments

Peeling Away the Onion of Denmark Wind (Part I)

[Editor’s note: This series is an extensive technical analysis of wind electricity in Denmark. The intent is to develop: (1) plausible conclusions without resorting to extensive mathematics (except that provided by others) , and (2) a framework within which to evaluate other claims of emissions relating to wind backup from fossil plants.]

According to wind proponents, Denmark is a model of wind energy use for electricity generation to be emulated. It is claimed or suggested that:

  • Denmark gets about 20% of its electricity from wind. [Note: This number is generation, not usage, which is a crucial distinction with negative implications for the wind lobby's argument.]
  • Reduction in CO2 emissions is due in large part to increased wind electricity production.

These conclusions are superficial at best and invalid at worse. The analysis required to show this, however, is extensive and technical because the Denmark power market is very unique and wholly unlike the market in the U.S. or the UK.

A Note on Sources

Recently the American Wind Energy Association (AWEA) has made claims about Denmark, based on data from the U.S. Department of Energy (DOE). This is at least one step removed from the source for most of the information in this series, the Danish Energy Agency (DEA). Its report 2008 Energy Statistics, and associated Excel worksheet tables, is one of the best sources of comprehensive information on the Denmark electricity situation.

There is another source with very detailed information, Energinet.dk, which is the Danish national transmission system operator for electricity and gas. It has been used for some more extensive mathematical analyses that are referenced here, for example Bach. As will be seen, even these have limitations because of the unique and complex nature of the Denmark electricity system.

As a result, this analysis purposely based more on logic than precise mathematical treatments, but building on the mathematical work of others. The limitations in both cases are the complexities, which will be explained, but both approaches provide insights into the Denmark case. In the final analysis, all available evaluations of the wind-generated electricity (this will frequently be referred to as just “wind”) realities in Denmark are speculative, but some more plausible than others, and readers are left with having to draw their own conclusions.

Claims based on a quick reference to a few selected statistics should be seriously questioned, and this series provides a context within which all claims can be evaluated. [Read more →]

October 26, 2010   8 Comments

Can the Endangered Species Act Compel America to Abandon Fossil Fuels?

Can the Endangered Species Act (ESA) compel America to abandon fossil fuels?

My colleague William Yeatman alluded to this question last week after attending a symposium at the Heritage Foundation entitled, “Saving the Polar Bear or Obama’s CO2 Agenda?”

The short answer is yes and no. Yes, because once the Fish and Wildlife Service (FWS) listed the polar bear as a “threatened species” on the supposition that carbon dioxide (CO2) emissions are melting the bear’s Arctic habitat, the ESA logically requires that people stop engaging in CO2-emitting activities. The potential for mischief is vast. Carbon dioxide emissions come from fossil energy use, which in turn derives from economic activity. There is hardly any economic activity in the modern world that does not, directly or indirectly, produce CO2 emissions. Hence, almost any economic activity can be deemed to threaten the polar bear and, thus, violate the Act!  

On the other hand, there are political limits to how far eco-activists can push this logic. The American people will not tolerate being regulated into joblessness and penury. Al Gore and his allies know this, which is why they continually dress up their growth-chilling agenda as a “green jobs” program.

But this means that, at a minimum, the ESA is a specter haunting our economic future, its dark powers held in check only by the vigilance of citizens and the political calculus of regulatory zealots.  

On May 14, 2008, when the FWS listed the polar bear as threatened, then Secretary of Interior Dirk Kempthorne claimed the agency’s action “should not open the door to use the ESA to regulate greenhouse gas emissions from automobiles, power plants, and other sources.” Why not? Well, Congress never designed the ESA to be a framework for climate policy, and never voted for it to be used for that purpose. The same can be said about the Clean Air Act, yet that  did not stop five Supreme Court Justices, in Massachusetts v. EPA, from authorizing and, indeed, pushing EPA to regulate greenhouse gases (GHGs). EPA is now setting climate policy for the Nation based on a law enacted in 1970 – years before Al Gore ever heard of global warming. 

So unless courts acquire a newfound appreciation for congressional intent, I have to conclude that Secy. Kempthorne was whistling past the graveyard. From day one, regulating GHGs via the ESA was the objective of the eco-litigation groups who petitioned and sued the FWS to list the polar bear. How do I know? They said so. [Read more →]

October 25, 2010   5 Comments

Dear Peak Oilers: Please Consider Erich Zimmermann’s ‘Functional Theory’ of Mineral Resources

The peak oil movement, now trying to turn itself into a pro-government-intervention political movement, draws the wrong conclusion by logically progressing from the wrong assumption.

This post revisits this wrong assumption: fixity. From mineral fixity, it is concluded that every act of production and consumption leaves less supply. In this Harold Hotelling world, costs must go up and prices must go up….

But going from the natural science, perfect knowledge, hypothetical world to the real world, just the opposite is true. There is not a fixed supply, known or unknown, from which extractions leave less supply for the future. Costs do not have to go up, and neither do prices.

Try answering this question to see how the peak oilers have it wrong for the business/economic real world. Do we have more or less oil today than when the nation was founded in 1776? Does the world have more or less oil in 2010 than in 1910?

The natural-science answer is that in a physical sense, there is less oil today that then by the amount of extraction. But in a social science sense, we have much more oil today than in 1776 or in 1910 because today’s supply is inventoried and produced from known reservoirs. The same promises to hold true in the future in a consumer-driven, entrepreneur friendly world. [Read more →]

October 22, 2010   41 Comments

Free-Market Solar: The Real Opportunity (this solar executive tells the feds and Arizona to cool the subsidies)

[Editor note: David Bergeron is president of SunDanzer Development, Inc., a solar energy company located in Tucson. His first post at MasterResource was titled Economic/Environmental Assessment of Grid-Tiered Photovoltaics: Arizona Lessons for the U.S.  More information on Mr. Bergeron and SunDanzer is provided at the end of this post.]

It’s Saturday. I’m testing a new solar powered vaccine refrigerator that uses ice packs rather than batteries to store energy and maintain cold temperatures. This is a key component of the distribution chain for vaccines and part of a global effort to eradicate polio and other preventable diseases.

Solar energy is my passion, field of study, and occupation. It started when I was 13 years old, a time of the Arab oil embargo and gasoline lines at the pump. Only later did I realize that the long lines were caused by misguided government price controls, not a tiring mineral-resource base.

Today, our government is again engaged in misguided energy activism, policies that mandate inappropriate solutions to real and imagined problems.

Such is the case with grid-tied solar panels, an energy alternative which fails to effectively address either energy security or environmental concerns. Although unintended by state and federal lawmakers, preferences and mandates for political correct energies will ultimately stifle creativity and generate false solutions to our energy dilemma.

Sunny Arizona–Cost-Prohibitive Solar

Solar Photovoltaic (PV) electric panels are far too expensive to provide a sustainable energy alternative to homes and businesses already connected to the electric utility grid.  The on-grid solar industry and associated jobs are artificial and only exist because of special government favor.

The solar industry today is a bubble ready to burst. It is similar in many ways to the housing market bubble created by easy mortgages enabled by government favor.  When the subsidies end, the solar bubble will burst, and much of the industry and jobs therein will vanish overnight. [Read more →]

October 21, 2010   16 Comments

Solar Cheaper than Grid Nuclear? Think Again!

Several months ago, a study by the anti-nuclear group North Carolina Waste Awareness Network (NC WARN) gained worldwide exposure by concluding that solar power is cheaper today than  nuclear power.

The New York Times ran an article highlighting the findings, but the article was so criticized that the newspaper’s editors responded with what amounted to an apology.

NC WARN’s startling, untenable conclusion is the subject of this post, which is based on a longer paper.

The group’s central graph (Figure 1), which took the media hook, line, and sinker, shows a steep decreasing cost curve for solar over time coupled with a pronounced increasing cost curve for nuclear.

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Figure 1. Generation costs from solar and nuclear power according to Blackburn and Cunningham (2010).

But nuclear power is less, not more, expensive than solar power. It is also reliable, or in industry terms, dispatchable, which adds value that is not reflected in simple cost comparisons.

Flawed Methodology

NC WARN estimates the cost of nuclear power by increasing the estimates from one single piece of literature (Cooper 2009). (We will discuss this later.) With regard to the costs of solar power, they employ the following formula: [Read more →]

October 20, 2010   14 Comments

The All-Electric Car: Think 132-Year Payback (DOE’s Sandalow shows us what not to do)

“When David Sandalow writes about energy and the environment, we should all pay close attention.”

- Al Gore endorsement, 2007

The term energy encompasses a plethora of technologies, and each attracts the gimlet eye of Big Brother.

In recent years environmental groups have been very successful in insinuating themselves into the halls of government so that today there is a revolving door between government and the environmental movement. And it’s just like the revolving door between the government and other key industries, such as banking and the military-industrial complex.

Government would have us believe that a new regulation is the result of some great, objective, and careful investigation. But mostly these regulations and spending programs are foisted upon us by the people who only yesterday were nothing more than lobbyists for some fervently held cause. There has been no new data, but yesterday’s lobbyists are today carrying the mantle of great authority and prestige because they have become high-level government bureaucrats.

Rent-Seeking

We economists call such lobbying “rent seeking” and those who engage in it are “rent seekers.” Rather than seeking the cooperation of other men in the free market, a rent seeker lobbies government to impose some special privilege. The cost of the rent seeker’s efforts is greatly reduced because he need convince only a few elected officials or government bureaucrats rather than the entire market. His job is made all the easier by the knowledge that the elected official or government bureaucrat can grant the privilege with no cost to himself.

When a rent-seeker gets a job in government itself, well, the fox is in the henhouse. Officials move billions of dollars and coerce millions of people with no responsibility whatsoever. If a program fails to achieve its grand design, no government official suffers the consequences. Furthermore, failed regulations are seldom repealed, because, despite the net burden to the economy, a few new constituents do benefit and lobby mightily to keep them in place.

A Revolving-Door Lobbyist for the All-Electric Car

Such is the case, as recently reported by AP, of a lobbyist for an all-electric car.

Leading the Charge” glorifies Mr. David Sandalow, Assistant Secretary for Policy and International Affairs at the U.S. Department of Energ, and former EVP at the World Wildlife Fund, and an avid advocate for the all-electric car. Hybrid cars usually recharge their batteries only while operating on their gasoline-powered engines, but Mr. Sandalow has converted his Toyota Prius hybrid into a plug-in hybrid at the cost of $9,000. Now he can recharge his car’s battery from his home electrical outlet. [Read more →]

October 19, 2010   13 Comments

AB 32′s “Political Symbolism with Consequences” (Will California vote for recovery?)

Many Californians are concerned about the continuing economic viability of the Golden State, especially with the impending implementation of the California Global Warming Solutions Act, also known as AB (Assembly Bill) 32. The goal of the act is to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020, through a program administered and enforced by the California Air Resources Board (CARB).

Almost all economic modeling of GHG emissions regulations find that the costs of such programs outweigh their benefits. The estimates have come from a wide spectrum of organizations, including the U.S. Environmental Protection Agency, U.S. Energy Information Administration, Brookings Institution, consulting-firm Charles River Associates, and others.

Contrary to the economic consensus, CARB has gone the other direction and argues that command-and-control and cap-and-trade will so increase the efficiency of energy use that Californians will benefit substantially by 2020. But CARB’s self-interested study is flawed as a new study by economist Robert Michaels explains.

CARB’s Suspect Economic Modeling

Recently, the San Francisco Chronicle exposed CARB’s overestimate of pollution from diesel trucks of 340 percent, an error that has caused independent truckers to leave the business rather than bear the costs by CARB. And now Professor Michaels of California State University, Fullerton (website here) explains the many ways in which CARB’s economic modeling of AB 32 is fatally flawed and how CARB threatens California’s economic welfare: [Read more →]

October 18, 2010   2 Comments