Wednesday, August 27, 2014

Geothermal Power Approaches 12,000 Megawatts Worldwide

In 2013, world geothermal electricity-generating capacity grew 3 percent to top 11,700 megawatts across 24 countries. Although some other renewable energy technologies are seeing much faster growth—wind power has expanded 21 percent per year since 2008, for example, while solar power has grown at a blistering 53 percent annual rate—this was geothermal’s best year since the 2007-08 financial crisis.

Geothermal power’s relatively slower growth is not due to a paucity of energy to tap. On the contrary, the upper six miles of the earth’s crust holds 50,000 times the energy embodied in the world’s oil and gas reserves. But unlike the relative ease of measuring wind speed and solar radiation, test-drilling to assess deep heat resources prior to building a geothermal power plant is uncertain and costly. The developer may spend 15 percent of the project's capital cost during test-drilling, with no guarantee of finding a viable site.

Once built, however, a geothermal power plant can generate electricity 24 hours a day with low operation and maintenance costs—importantly because there is zero fuel cost. Over the life of the generator, geothermal plants are often cost-competitive with all other power sources, including fossil fuel and nuclear plants. This is true even without considering the many indirect costs of fossil- and nuclear-generated electricity that are not reflected in customers’ monthly bills.

The top three countries in installed geothermal power capacity—the United States, the Philippines, and Indonesia—account for more than half the world total. California hosts nearly 80 percent of the 3,440 megawatts of U.S. geothermal capacity; another 16 percent is found in Nevada.

Despite having installed more geothermal power capacity than any other country, the United States currently generates less than 1 percent of its electricity from the earth’s heat. Iceland holds the top spot in that category, using geothermal power for 29 percent of its electricity. Close behind is El Salvador, where one quarter of electricity comes from geothermal plants. Kenya follows at 19 percent. Next are the Philippines and Costa Rica, both at 15 percent, and New Zealand, at 14 percent.

Indonesia has the most ambitious geothermal capacity target. It is looking to develop 10,000 megawatts by 2025. Having only gained 150 megawatts in the last four years, this will be a steep climb. But a new law passed by the government in late August 2014 should help move industry activity in that direction: it increases the per-kilowatt-hour purchase price guaranteed to geothermal producers and ends geothermal power’s classification as mining activity. (Much of Indonesia’s untapped geothermal resource lies in forested areas where mining is illegal.) Even before the new law took effect, geothermal company Ormat began construction on the world’s largest single geothermal power plant, a 330-megawatt project in North Sumatra, in June 2014. The plant should generate its first electricity in 2018.

Indonesia is just one of about 40 countries that could get all their electricity from indigenous geothermal power—a list that includes Ecuador, Ethiopia, Iceland, Kenya, Papua New Guinea, Peru, the Philippines, and Tanzania. Nearly all of them are developing countries, where the high up-front costs of geothermal development are often prohibitive.

To help address this mismatch of geothermal resources and funds, the World Bank launched its Global Geothermal Development Plan in March 2013. By December, donors had come up with $115 million of the initial $500 million target to identify and fund test-drilling for promising geothermal projects in the developing world. The Bank hopes that the experience gained from these projects will lead to lower costs for the geothermal industry overall. This would be good news on many fronts—simultaneously reducing energy poverty, air pollution, carbon emissions, and costly fossil fuel imports. More


Sunday, August 10, 2014

Natural Gas in the Palestinian Authority: The Potential of the Gaza Marine Offshore Field

Summary: Although in strict legal terms its status is ambig-uous, a 25-year exploration license for the marine area off the Gaza Strip was awarded by the Palestinian Authority in 1999.

The Gaza Marine field was discovered the following the year though its natural gas has yet to be exploited. Politics as well as failure to agree on commercial terms have been the principal reasons for the delay.

Exploitation of the field would provide the Palestinian Authority with an important revenue stream. Using Gaza Marine gas may also reduce the need of Israel to consume its own natural gas to generate electricity for the Palestinians. Ultimately the decision will be political, but, in economic terms, the case for the exploita-tion of Gaza Marine is strong. Download PDF


Peak Energy: Solar Power Installations Jump to a New Annual Record

Peak Energy: Solar Power Installations Jump to a New Annual Record

WorldWatch has a report on the global solar power market - Solar Power Installations Jump to a New Annual Record.
The year 2013 saw record-breaking growth for solar electricity generation as the photovoltaic (PV) and concentrated solar thermal power (CSP) markets continued to grow. With over 39 gigawatts installed worldwide, the PV solar market represented one third of all newly-added renewable energy capacity, write Worldwatch’s Max Lander and Climate and Energy Intern Xiangyu Wu in the Worldwatch Institute’s latest Vital Signs Online trend (
Solar PV installations nearly matched those of hydropower and, for the first time, outpaced wind additions. Even though photovoltaics continue to dwarf CSP capacity, the CSP market also had another year of impressive growth. By the end of 2013, a total of 19 countries had CSP plants installed or under construction.
Consumption of power from PV and CSP plants increased by 30 percent globally in 2013 to reach 124.8 terawatt-hours. Europe accounted for the majority of global solar power consumption (67 percent), followed by Asia (23.9 percent) and North America (8.1 percent). Worldwide, solar consumption equaled 0.5 percent of electricity generation from all sources. ... In July 2014, global PV module spot prices reached an all-time low of $0.63 per watt. For the first time, Asia overtook Europe as the largest regional market.
While global PV module production increased by only 3 percent over 2012, module shipments jumped by 24 percent, signaling an easing of oversupply problems.
Prospects are bright for solar development as prices continue to fall and approach grid parity in an increasing number of contexts. Rooftop solar is already less expensive per megawatt-hour than retail electricity in Australia, Brazil, Denmark, Italy, and Germany. Estimates now also show that PV has become price-competitive without subsidies in 15 countries. For2014, solar installations are estimated to reach 40–51 gigawatts.

Wednesday, August 6, 2014

Why Morgan Stanley Is Betting That Tesla Will Kill Your Power Company

There’s a reason that power companies are attacking rooftop solar across the nation: They see those silicon panels as nothing short of an existential threat.

As the cost of solar continues to fall, and more people opt for the distributed power offered by solar, there will be less demand for big power plants and the utilities that operate them. And one major investment giant has now released three separate reports arguing that Tesla Motors is going to help kill power companies off altogether.

Earlier this year, Morgan Stanley stirred up controversy when it released a report that suggested that the increasing viability of consumer solar, paired with better battery technology—that allows people to generate, and store, their own electricity—could send the decades-old utility industry into a death spiral. Then, the firm released another one, further emphasizing the points made in the first. Now, it’s tripling down on the idea with yet another report that spells out how Tesla and home solar will “disrupt” utilities.

“There may be a ‘tipping point’ that causes customers to seek an off-grid approach,” the March report argued. ”The more customers move to solar, the [more the] remaining utility customers’ bills will rise, creating even further ‘headroom’ for Tesla’s off-grid approach.”

Yes, Tesla Motors, everyone’s favorite electric car company. And that’s where the controversy comes in. Morgan Stanley breathlessly pegged Tesla as “the most important auto company in the world” in part because its electric car business was pushing it to develop better energy storage technology, and then mass manufacture said batteries. That’s exactly what Tesla CEO Elon Musk and company will be doing at its forthcoming Gigafactory, which it is building in the Southwest with Panasonic.

With the new manufacturing facility, Morgan Stanley reasons, Tesla stands to double its business (adding another $2 billion in revenue) by selling the lithium ion batteries it typically ships under the hood of a Model S to homeowners with solar panels, too. If consumers can store energy the panels generate during the day for use at night, it would ostensibly render the need for utilities to pipe in faraway power—and their electric bills—obsolete.

Energy storage, when combined with solar power, could disrupt utilities in the US and Europe to the extent customers move to an off-grid approach

Musk is also the chairman of Solar City, a company that leases rooftop solar setups to homeowners, and one that would benefit from the battery tech. Now, the shadiness here is that Morgan Stanley released the report trumpeting Tesla’s crossover energy storage potential—causing Tesla’s stock to rise—right before it underwrote a fundraising round for… Tesla.

So the whole thing is very incestuous, and it does render some of the projections a little suspect, but the bottom line here is that private solar and battery companies are viable enough that they’ve attracted the backing of one of the world’s biggest financial services companies—over the multi-trillion dollar utility industry.

“Energy storage, when combined with solar power, could disrupt utilities in the US and Europe to the extent customers move to an off-grid approach,” Morgan Stanley writes in its third report this year emphasizing the prospect. ”We believe Tesla’s energy storage product will be economically viable in parts of the US and Europe, and at a fraction of the cost of current storage alternatives.”

In other words, Morgan Stanley has Tesla’s back, big time. It’s betting that Musk is going to make the best solar energy batteries money can buy.

Ironically enough, however, even staunch clean energy advocates are wary about Morgan Stanley’s finding that utilities are going the way of the buffalo. “Barring extraordinary circumstances, the economic case for grid defection is still very weak for US consumers,” Stephen Lacey, the senior editor of Greentech Media, wrote of the Morgan Stanley report. ”The electricity system offers valuable backup in case a customer over- or under-invests in an on-site system.”

It’s more likely, then, that people will still buy home solar—by the tens of millions, Greentech suggests—but not unplug from the grid entirely. Utilities will be diminished, but not broken. This process is underway in Europe already, where countries like Germany have powerful incentives for consumers to switch to solar.

Last year, the Economist called the sharp decline of European utilities “startling,” noting that together, they lost half their value—$600 billion—in just five years. Here in the states, utilities and conservative politicians are fighting solar tax credits to prevent the same thing from happening. For the most part, the utilities are losing.

All of this is, ideally, what needs to happen. Climate change is accelerating, and we need to transition away from those massive, fossil fuel-slurping power plants. Distributed solar is an increasingly powerful force behind that weaning process.

And even if some of Morgan Stanley’s calculations are shaky, the trends that Tesla is helping to amplify are anything but—clean, personalized (or community-wide) power will play a major role in shaping our energy future.

The fact that a greed-driven titan of finance like Morgan Stanley recognizes as much, and is willing to triple down on its bets on battery storage and distributed power, is a promising sign that the energy revolution is underway. More


Tuesday, August 5, 2014

Energy Efficiency Simply Makes Sense

What simple tool offers the entire world an extended energy supply, increased energy security, lower carbon emissions, cleaner air and extra time to mitigate climate change? Energy efficiency. What’s more, higher efficiency can avoid infrastructure investment, cut energy bills, improve health, increase competitiveness and enhance consumer welfare — all while more than paying for itself.

Maria van der Hoeven - IEA

The challenge is getting governments, industry and citizens to take the first steps towards making these savings in energy and money.

The International Energy Agency (IEA) has long spearheaded a global move toward improved energy efficiency policy and technology in buildings, appliances, transport and industry, as well as end-use applications such as lighting. That’s because the core of our mandate is energy security — the uninterrupted availability of energy at an affordable price. Greater efficiency is a principal way to strengthen that security: it reduces reliance on energy supply, especially imports, for economic growth; mitigates threats to energy security from climate change; and lessens the global economy’s exposure to disruptions in fossil fuel supply.

In short, energy efficiency makes sense.

In 2006, the IEA presented to the Group of Eight leading industrialized nations its 25 energy efficiency recommendations, which identify best practice and policy approaches to realize the full potential of energy efficiency for our member countries. Every two years, the Agency reports on the gains made by member countries, and today we are working with a growing number of international organizations, including the European Bank for Reconstruction and Development, the Asian Development Bank and the German sustainable development cooperation services provider GIZ.

The opportunities of this “invisible fuel” are many and rich. More than half of the potential savings in industry and a whopping 80 percent of opportunities in the buildings sector worldwide remain untouched. The 25 recommendations, if adopted fully by all 28 IEA members, would save $1 trillion in annual energy costs as well as deliver incalculable security benefits in terms of energy supply and environmental protection.

Achieving even a small fraction of those gains does not require new technological breakthroughs or ruinous capital outlays: the know-how exists, and the investments generate positive returns in fuel savings and increased economic growth. What is required is foresight, patience, changed habits and the removal of the barriers to implementation of measures that are economically viable. For instance, as the World Energy Outlook 2012 demonstrates, investing less than $12 trillion in more energy-efficient technologies would not only quickly pay for itself through reduced energy costs, it would also increase cumulative economic output to 2035 by $18 trillion worldwide.

While current efforts come nowhere close to realizing the full benefits that efficiency offers, some countries are taking big steps forward. Members of the European Union have pledged to cut energy demand by 20 percent by 2020, while Japan plans to trim its electricity consumption 10 percent by 2030. China is committed to reducing the amount of energy needed for each unit of gross domestic product by 16 percent in the next two years. The United States has leaped to the forefront in transportation efficiency standards with new fuel economy rules that could more than double vehicle fuel consumption.

Such transitions entail challenges for policy, and experience shows that government and the private sector must work together to achieve the sustainability goals that societies demand, learning what works and what does not, and following the right path to optimal deployment of technology. Looking forward, energy efficiency will play a vital role in the transition to the secure and sustainable energy future that we all seek. The most secure energy is the barrel or megawatt we never have to use.

Maria van der Hoeven is the Executive Director of the International Energy Agency, an autonomous organization which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. This commentary appeared first this month in IEA Energy, the Agency’s journal.


Sunday, August 3, 2014

The High Cost of Gas Exports - Australia

The impact of LNG exports, particularly of coal seam gas, on Australian industry continues to be the topic of debate, with one recent report warning that there it will further destroy the local manufacturing industry (already reeling from Dutch disease) - High gas prices threaten thousands of jobs, billions of dollars: industry.

A new report warns the riches promised by exporting Australian gas may have a devastating impact on local industries, particularly manufacturing. A coalition of half-a-dozen industry groups commissioned the report by Deloitte Access Economics.

The report says domestic gas prices are rapidly rising as the market links in with international prices. It warns that, if the rise goes unchecked, the manufacturing sector alone will contract by as much as $118 billion by 2021, with nearly 15,000 jobs lost. The report also finds that mining might contract by $34 billion and agriculture by $4.5 billion.

Peak Energy: The high price of gas exports