What do I think, What can I do?

Posts tagged ‘cost’

When Renewables reduce electricity bill


The following post mentions something that is repeated sometimes in the renewable energy debate.

How Maryland’s New Climate Plan Could Actually Lower Energy Costs

Depending on the regulations or feed-in-tariff, renewables can reduce the base cost as they can enter at 0 cost in the auction. This happens in Spain for example, but this does not mean that the final tariff is cheaper as renewable feed-in-tariff is added later. OK, the total amount maybe cheaper in the end or not (it was discussed here). Electricity cost definition is quite difficult to understand in many countries, in some too difficult. In my opinion, this is not the moment to discuss if solar energy or wind power are cheaper than gas or coal. Happily they have reduced their costs and are more and more competitive but they have been more expensive and will be in some places/cases for some time. I think that a much better and more clear message is to say that even if/when they are more expensive their costs will be much lower than a catastrophic climate change. Even when/if they are more expensive in the short-term, their long-term profitability will be evident. Otherwise, the pure current cost discussion can be quite disappointing, as in Kirguistan. So it is again a discussion between long-term and short-term, about our generation and the next ones.


Electricity prices and renewables

Electricity prices are a very important issue for climate change, as the main criticism, the only serious one, towards renewable energy sources is that they are more expensive. This is a really important question much discussed in many occasions. My opinion is: yes they are more expensive at first sight but they are cheaper in the long term considering a global point of view, for example with the new richness index proposed by the UN: IWI (Inclusive Wealth Index).

Certainly, this is something I should learn and write, but in this post I prefer to focus in one example and one interview. The example is spanish situation, going from leadership in renewables to full stop in feed-in-tarif and renewable industry. It seems a bad example but I think that can help to think and learn. The last chapter of this story is the sharp increase expected in electricity prices and blaming the renewables completely about it. I am not going to it thorougtly either, I just want to mention this interview with the regulatory system responsible. He is not pro-renewables in any way and mentions them as one of the causes of the price and this incredible thing called tarif deficit (another interesting pair of words), however he explains too that prices are difficult to understand, that there are many different renewables and that too many fossil fuel power stations have also been built expecting a great economy growth and energy demand, and nowadays both are shrinking.

Blaming renewables is easy and a widespread sport but Germany has made an even greater effort and the situation is very different, so it is not so determinant the global economy health seems also important. Two final thoughts:

1.- If Spain is in a bad situation due to too much power capacity this seems an oportunity for electric mobility, it could help reduce electricity costs.

2.- Maybe more expensive electricity is not so bad, if it happened in all places. Certainly it would help efficiency and would be more realistic.

Another small energy battle, this time in Bolivia

Two weeks ago Agentinian government decided to expropiate YPF, causing a bitter diplomatic dispute and showing once again the importance of fossil fuel control in current politics. This week another example, smaller but with some common points, was published: Bolivian government expropiated TDE, electrical distribution company owned by spanish REE. REE is the Spanish electrical distribution company, partially public and offers very detailed data about production and consumption of electricity. The difference with Argentinian case is fundamentally the size,  Repsol and YPF are the biggest companies in their countries while REE and TDE not; the calculated values of the assets is 100 times smaller for the later. And the attitudes between the governments not very aggressive. Besides, it is not the first case of expropriation from Evo Morales and at the same time it has assured Repsols position in Bolivia to sell gas to Argentina, closing this funny circle. The common ground is the claim from Bolivian government for more investment in the poor Bolivian electricity distribution.

Bolivia is a poor country, but rich in some resources as gas and lithium for batteries. I spent one summer there and remember that electricity was not found in every house. Bolivia was quite active in Durban talks asking for a stronger commitment by rich countries towards CO2 emission reduction, whereas Bolivian electricity production was %48 hydroelectric and the other %52 from fossil fuels in last year. It can be said that half of its electricity is renewable but it is also true that their effort in wind or solar energy has been null. Nevertheless, the important data is the CO2 per capita emissions, and Bolivia has a very low value: 1.4 tons per capita in 2008. It is also a gas seller, getting a very important income for the national economy.

So, once again I do not have a clear opinion about the fact and I do not intend to, however I have some thoughts about the context:

  • Bolivia is poor and has the right to improve its weak energy services. At the same time it is vulnerable to climate change and has the right to ask the main emitters for a strong commitment for CO2 reduction.
  • But at the same time Bolivia also has the great opportunity to built a low Carbon economy from the beginning and get a moral bonus this way. The straightforward use of their great fossil fuel resources is very tempting and will have to be done to some extent but a wise combination with renewables will be more reasonable in the long-term in spite of short-term higher costs, even more remembering the great amount of lithium in the Salar de Uyuni. Electric car industry is waiting for it.
  • I think that all have to make some effort, not the same, I agree. We do not have to remember climate change only in the great meetings;  Bolivian new energy strategy may be a good example of that, it is in their hands now.

Argentina wants to recover the control of its fossil fuels, another energy war

Argentinian map in South America, from wikipedia

The news was specially important in Spain and Argentina. Argentinian president, Cristina Fernández de Kirchner , announced the expropiation of YPF, Argentinian oil company, the biggest company in the country, controlled up to this week by Spanish company Repsol. The diplomatic conflict is served, with several strong words from the presidents, company CEO, YPF former leaders firing in Hollywood style, etc…

I am not going to comment the economic, ethic, moral or juridical aspects of this issue. Surely there are many other better sources for it. I just want to emphasize the huge impact fossil fuels have had, and still have,  in our economy. Two data:

  • The finding of great oil resources in vaca muerta has been mentioned by all parts in this conflict, so the perspective of new oil reserves itself is enough to provoke huge impact.
  • Both Repsol and YPF are the greatest companies in their country.

Consequently, the problem is created, too much power and money is concentrated in a sole resource. And this has been present in the whole history of oil industry and XX century industrial society. How many oil wars have the world suffered in XXth century?

Nevertheless, energy in Argentina is a complex issue, as in most of the world. In spite of having this important resource Argentina is suffering in the last years a kind of energetic crisis, it needs more oil than it produces, it has difficulties to meet the raising electricity demand (1 GWh more per year) and both fuel and electricity prices have increased dramatically (yes, this is possible even without renewables). Whereas, as explained in the 30th page of this magazine, Argentinian renewable investment has been low, very far from the modest 8% electricity target, in spite of having very abundant resources of wind, rivers and sun too.

Growing prices of fuel and electricity have been one of the main arguments for the expropriation, considering YPF was not making enough effort to invest in new wells (A fresh opinion in this sense came from GreenPeace), not so different from USA drill-baby-drill. I think this is a wrong approach. Energy costs are increasing in different parts of the world because all possibilities are getting more expensive, fossil fuels, renewables and, of course, nuclear. Pretending there is a magic solution for that is not only unrealistic, it is counteracting, because it creates false expectations in public opinion. And, even more, the more we trust in fossil fuels the more get in trouble as a society, because climate change is starting to show consequences, and will show more of them and more expensive ones. So it does not seem cheap in the long-term.

Three final small thoughts:

  • Energy resources, companies,… are never fully private, there is always a government interacting with them. It is logical as this is a key service in any modern society, but it is frequently forgotten.  This case is a clear example. So public participation in climate change policies and subsidies is not so different to public participation in many other energy related issues.
  • Many Argentinian are saying that Argentinian oil should be owned by Argentinians. It is an interesting argument, going a little further we could ask if the oil should only belong to this generation Argentinians or should they remember the future inhabitants too? And leave some oil for them?
  • In the media discussion about the price os the stocks to be paid by the government to Repsol, Argentinian government argued that the environmental negative consequences should be accounted and taken out from the price. So they want to discount the externalities. Perfect, but why not do it regularly, next year, and next, and next? And include it in the electrical bill? Or in the cost comparison with renewables (in this case the relative costs would change clearly)? And the last, why now and not last year?

Will carbon storage be an effective climate change strategy?

carbon capture and storage

One of the fields of active research related with climate change is CO2 storage. Some new findings are promising as read here. These technologies have the advantage that they can work on-site in the CO2 heavy production works and do not introduce the carbon in low mines.

Theoretically we could even close the carbon cycle, burn a fossil fuel, capture carbon, make another fuel, burnt It again,… The only problem is that it doesn’t seem possible to get so much efficiency, and even in that hypothetical case a good filtering of particles needed for public health combined with carbon capture could lead to a cost increment that could make solar energy really cheap in comparison. Because the great thing of fossil fuels is that they store a lot of energy in the chemical bindings among carbons, it doesn’t seem easy to bind them again without expending even a higher energy again.

Anyway, I have not reliable data about those hypotheses. It would be really great although really unlikely to enjoy the advantages of fossil fuels without altering our climate. We do not have to close any door because the problem is complex and there is no magic solution.

Nevertheless, sooner or later we will have think in some alternative to fossil fuels because as they are not renewable they will end someday. So maybe climate change is not only a great risk, it can be also the opportunity to begin this way.

Is my home like Durban?

A building in maintenance work

Last week we held a long meeting in my building home community to decide about some important and expensive maintenance works we should do and I remembered Durban COP17. Why? Lets find the common points:

1.- The decision is common,  we all have the share of the responsibility because the common parts of the building belongs to everyone, and we will all suffer the consequences of our decision. But not all to the same point.

2.- We are not in the same economic situation, although this is sometimes less clear than it seems.

3.- The works to be done are expensive in short term. But not doing them will be more expensive.

4.- We have serious difficulties to get agreements and sometimes we need several useless meetings for that.

5.- Some blame each other for not taking care of their part of the building.

But there are some notable differences too:

1.- In Durban it is accepted that Climate Change is occurring and that it is important. This seems basic but it is the beginning because at home some have some doubts about the need to make the maintenance works.

2.- At home we more or less know each share in the cost, even the ones that do not like it. In Durban this is a discussion.

3.- At home most accept that the problem is the age of the building in spite of some mutual criticism. In the world we know (most of us) that the problem has been created by us.

Will we reach an agreement? At home we are reaching some kind of it, maybe in the world too but it will be at time?

industrialize energy

Industrial figure from http://wallpaper.diq.ru

I recognize I have a positive opinion of industry, in spite of all the human suffering frmo the XVIIIth centuries to now, in spite of all the water, soil and air contamination. I still consider industry something that gave most humans access to many things that were just a luxury in preindustrial era. Many of those things have changes our lives, the cars, bicicles, washing machines, TV, phones, clothes, paper, … Of course another factor for this opinion is that I live in an industrial area and work in an industrial company.

Industry is really the transformation of standard raw materials in very interesting objects. And I think that this is the step we should also follow with energy: transform energy production in an industrial based process instead of a resource based one. With raw material as easy to find as wind, sun, water, geothermal heat,… Because this way instead of depending on the scarce resources that have been acumulated in the earth for millions of years and concentrate in few places, we would get this essential resource, the energy from very commong things and effort. I love this idea, I love it from the moment I first listened it, for this reason I love renewables.  I know this is not very important, the concept can be wonderful but it has to work, it has to be attainable. I am convinced it is and we will see it, if it is soon much better.

I almost forgot it, industry generates many more jobs than resources.

The risks: Why I believe in Climate Change (IV)


When you do not see too much and you still have to take decisions, basic approaches can be helpful

As explained before, I believe in climate change for several reasons, witch include the temperature data and the mechanism of greenhouse effect and CO2. But now I want to follow another approach: What if we did not have enough data either to accet or to refuse climate change?

It happens many times in our life, we have to make important decisions without having too much security about consecuences. I think it happens in economy a lot of times, different strategies are recommended for European debt crisis but the uncertainties are great for any of them. In those cases, for many, the straigthforward solution is the standard one: business as usual, it is actually a way to avoid the decision or to avoid the unbearable uncertainty.

However this business as usual not always works, how many companies have failed for not being brave enough to innovate when it was neccesary! I think it is the case about climate change. It is a new challenge for humankind, maybe the first global critical challenge and it requires new prespectives. If we had not enough data we should balance the risks of the two failure possibilities one is difficult but the other one is dreadful in my opinion:

1.- The difficult one is to believe in the risk and act consecuently but if climate was not a real problem. So, more or less: reduce our energy demanding activities, rationalize our transport needs, control our population, be much more efficient in energy use and transport, make a great effort in development of renewable energies, spend more money in our energy bill,… I am convince all this means sacrifice, personal, colective and economical. But the ultimate situation would be that we would start in advance something we would need to do someday, change our energy sources, beacause fossil fuels are not forever.

2.- The dreadful one is to continue our growing path of greenhouse gas emissions, to burn coal, oil and gas as fast as we can and provoke serius changes in our planet climate without doing nothing serious to avoid it. The consecuences would range: problems in our water supply, food security, sealevel, public health, extreme weather event frequency,… So not only more sacrifice than in option one, it also means many more unexpected problems.

So, even without reliable data making proactive sacrifice know seems more reasonable because the risk is lower and predictable. And, besides, we are lucky because we do not need to do such a sacrifie only for an hipothetical problem (it uses to be very difficult to make sacrifices and more when the drawback is not completely sure) because we have the data and they are clear, our fossil fuel consumtion is changing the climate drastically and fast.

Do we have to recalculate Fukushima’s bill?





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The atomic nucleus is an incredibly small place with exceedingly strong powers fighting each other. This power was first showed in Hiroshima and Nagasaki. Those people living there suffered terrible devastation from two small bombs and world vision of war and peace was never the same again. But at the same time many people started to dream about harnessing this incredible power, Asimov’s classic science-fiction novels are full of those examples, I think it was the hope of a generation and a really nice hope because unlimited cheap energy would be a wonderful thing to improve our lives.

In nuclear case, however, it was more complicated. I have posted before I am neither in favor nor totally against nuclear power. Climate change is a must and an urgent risk so we have to be careful with the MWh production we lose. I also believe that we have to consider the total bill of nuclear energy, including accidents, stronger safety measurements and waste disposal for a long time. And these not very commented news from beginning of this month may be important to recalculate those costs, because Japanese again have suffered the worst part of nuclear power and it seems that Fukushima’s issue is far for being solved and clarified for cost calculation updates.

And when we recalculate, it may happen that many renewables are not so expensive. I suspect that this is one of the reasons for most countries not to deploy nuclear power plants in the last 20 years.

Margin Call, how much margin we have?

Image from London city

Picture taken in Londons city, close to many financial companies

Today I have seen the film Margin Call. I have really enjoyed it, maybe because I do not go too much to the cinema, surelly because the film is absolutelly great. And even if it seems far from climate change issues, it has led me to think in those two aspects:

1.- Before 2008 some people were warning about toxic assets, or financial great risk. I do not know if they were reputed experts or solitary voices (in the film many of the managers say I told you). Nevertheless, we could be in the same position after a climate disaster, saying I told you but nobody did what had to be done. In some cases the risks are only understood by most of the people when it is too late and it looks evident.

2.-  Considering the financial turmoil we are in (in Europe specially) due to loses of values of some things we considered more valuables (houses, mortages, debts). What could happen if we suddenly realize that some cities might be under the water not very long? Or that some lands might not be so productive due to climate changes? Or that water supplies might be a real nightmare? I am not an economist, but I have the strong felling that some of the economic negative effects of climate change will become true just when enough people is aware of them even before happening. Because the fears spread out fast in society and economy. And some people still continue to focus on short term cost of carbon emission regulations