March 20, 2017
ENERGY WATCH #1
Bio-energy: to be or not to be
March 20, 2017
When 125 academics “with globally recognised expertise in biomass production, carbon accounting and sustainability of biomass … from both sides of the Atlantic” – sign a letter protesting what they call an inaccurate report on the sustainability of bio-energy, I get a little suspicious. Methinks thou protests too much is what crosses my mind in a case like this.
What is going on? UK think thank Chatham House came out with a report in February, Woody Biomass for Power and Heat – Impacts on the Global Climate, written by Duncan Brack, which provided a critical analysis of the climate effects of biomass, in particular wood and wood pellets, which are the most used type of feedstock.
On 13 March, the International Energy Agency (IEA) Bioenegy Technology Collaboration Programme (IEA Bioenergy) published a response to this report (summary here), arguing that it contained “misleading statements in the context of EU discussions about [bioenergy’s] future”, and sent a letter of protest to the think tank urging “Chatham House to reconsider its flawed policy recommendations”.
“Our Technology Collaboration Programme would welcome the opportunity to explain the background of our arguments and to engage in a technical dialogue on this very complex topic”, says the letter, signed by Kees W. Kwant, Chairman of IEA Bioenergy. No less than 125 “academics”, “of which 84 Professors”, signed the letter.
Poor Duncan Brack. With such massive criticism one would think that the man had delivered some kind of idiotic ideological attack on biomass. Now I hasten to say that I am not a Professor and can’t evaluate all the arguments made on both sides about this “complex topic”, but I did read both the report and the response, and it does seem to me that the huge effort put behind the response is a bit over the top.
Brack in his paper does not say that wood should not be used to produce energy. He does raise a number of issues. First, he asks, is biomass carbon-neutral? He notes that “at the point of combustion burning wood for energy usually emits more greenhouse gases per unit of energy produced than fossil fuels.”
This is incontrovertible of course – burning wood in fact produces more CO2 than burning coal – but proponents of bioenergy argue that the CO2 that is emitted was first sequestered by the same trees. Since the wood that is harvested is replaced by new growth, overall carbon emissions are neutral (if we disregard processing, storage and transport).
Brack puts a number of question marks behind this contention. He points out that “the impacts on the climate will … vary …with the type of woody biomass used, with what would have happened to it if it had not been burnt for energy and with what happens to the forest from which it was sourced.”
On the energy foodstocks that are used, Brack notes that:
- “The use of sawmill residues for energy has lower impacts [than the use of whole trees] because it involves no additional harvesting … The impact will be most positive for the climate if they are burnt on-site for energy without any associated transport or processing emissions. However, mill residues can also be used for wood products such as particleboard; if diverted instead to energy, this will raise carbon concentrations in the atmosphere.”
- Black liquor, a waste from the pulp and paper industry, can also be burnt on-site for energy and has no other use; it is in many ways the ideal feedstock for biomass energy.”
- The use of forest residues for energy should also imply no additional harvesting, so its impacts on net carbon emissions can be low … This depends mainly on the rate at which the residues would decay and release carbon if left in the forest, which can vary substantially. If slow-decaying residues are burnt, the impact would be an increase in net carbon emissions potentially for decades. In addition, removing residues from the forest can adversely affect soil carbon and nutrient levels as well as tree growth rates.”
Brack also notes that “evidence suggests that [rather than forest residues] various types of roundwood are generally the main source of feedstock for large industrial pellet facilities. Forest residues are often unsuitable for use because of their high ash, dirt and alkali salt content.”
On the forest carbon cycle, Brack argues that it is “not credible” to argue that biomass emissions are climate neutral, since this “ignores what happens to the wood after it is harvested (emissions will be different if the wood is burnt or made into products) and the carbon sequestration forgone from harvesting the trees that if left unharvested would have continued to grow and absorb carbon.”
He adds that “another argument for a positive impact of burning woody biomass is if the forest area expands as a direct result of harvesting wood for energy, and if the additional growth exceeds the emissions from combustion of biomass. Various models have predicted that this could be the case, but it is not yet clear that this phenomenon is actually being observed.”
He further writes that the time it takes for “forest regrowth” can mean that in the short or medium term, impact on the climate is negative, even if it is neutral in the long term.
None of this seems very unreasonable. Brack also criticizes current accounting methods and has some critical notes about the “sustainability criteria” that have been adopted by some EU member states.
So what does IEA Bioenergy has to say about Brack’ report?
Concerning climate effects and carbon neutrality, they identify “several flaws” in the report:
- “Misplaced focus on emissions at the point of combustion”
“It is critical to distinguish between release of CO2 that has been locked up for millions of years and the cycling of carbon between the atmosphere and the biosphere. The report blurs this distinction between fossil carbon and biogenic carbon, which is misleading.”
Frankly, I don’t know in what sense Brack “blurs” this particular distinction. A quote from Brack’s report would have helped.
- “Inaccurate interpretation of impact of harvest on forest carbon stock”
“The large fluctuations observed at the stand level, from net carbon sequestration to net carbon emissions at harvest, are not observed at the landscape level due to staggered harvest, which delivers a constant supply of timber while maintaining or increasing wood volume in the forest. Impacts of bioenergy on forest carbon stock should be assessed as impact on long-term average forest carbon stocks at a landscape scale.”
I presume this means that CO2 effects depend on how the forest is managed, which Brack does not deny. It is not clear to me what the “flaw” is that is being identified here.
- “Unrealistic counterfactual scenario”
“When the impacts of bioenergy are quantified by comparing with a reference “no-bioenergy” scenario that describes the fate of residues and forests in the absence of the bioenergy market, the definition of this reference scenario has a strong influence on the outcome. In most cases, it is implausible to suggest that the forest would remain unharvested and continue to grow if no biomass was used for bioenergy.”
I don’t think that Brack argues that the forest would necessarily remain unharvested, though it clearly could if we decided that we would leave it unharvested.
- “Misguided focus on short-term carbon balances”
“It is the cumulative emissions of CO2 that largely determine global warming by the late 21st century and beyond. The critical question is whether increasing use of forest biomass for energy leads to systematic decreases or increases in the forest carbon stocks.”
This may be true, but Brack simply points out that there is a difference in short-term and long-term effects, which is not a “flaw”.
- “Overstated climate change mitigation value of unharvested forests”
“The climate change mitigation value of forests sustainably managed for production of timber and bioenergy is greater than the mitigation value of unharvested forests, which have declining mitigation value over time because carbon sequestration rate diminishes as forests approach maturity.”
Yes, well, clearly if forests are “sustainably managed”, this is fine, which I don’t think any one would deny.
The IEA Bioenergy academics have another interesting point of criticism. They reproach Brack for “failure to identify the benefits of bioenergy in supporting energy system transition”. They write that “the report largely overlooks the role bioenergy can play in supporting the urgently-needed energy system transition, including provision of grid stability to facilitate expansion of intermittent and seasonal wind and solar resources. It neglects the important question of how uptake of bioenergy influences investment in fossil fuel-based technologies and infrastructure, which has implications for future carbon emissions. This is a serious shortcoming, as it is essential to consider the effects on the current and future energy system when developing energy and climate policy.”
This is a peculiar criticism. Brack did not indeed discuss how bioenergy compares with fossil-fuel based technologies, because it was not the focus of his report, but then why only look at fossil-fuel alternatives? Why not compare bioenergy to renewables plus storage, or nuclear power? Indeed, since bioenergy is at best “carbon-neutral”, it is only beneficial to the climate if it replaces fossil fuel energy and does not lead to a reduced use of renewables or nuclear power. IEA Bioenergy may be convinced that this is so, but it is for them to prove. That’s more useful than writing letters on stilts.
The bioenergy discussion is a lasting strife and methinks there is no offence in some critical analysis from outside spectators.
ENERGY WATCH #2
Rosatom aims to become “top global technology company”
March 20, 2017
While in the OECD (Japan, the US, France), the nuclear industry is in a deep crisis (or simply being phased out, like in Germany), in other countries nuclear power is still advancing. China is the best example, although the Chinese nuclear program is also beset with difficulties. According to blogger Dan Yurman, China will “restart its inland nuclear power program” within the next four years, after halting its construction plans in the wake of the Fukushima disaster.
Another leader is Russia, led by state-owned Rosatom, which has for many years been announcing impressive export activities, although in many cases the projects never materialised. Now World Nuclear News has published a fascinating interview with the new Director-General of Rosatom, Alexey Likhachov, who unfolds a hugely ambitious vision to turn Rosatom into “one of the three most successful global technology companies by the 2040s”. Likhachov does acknowledge that “I know some will be skeptical about this, as if it’s a fantasy,”, but says “I believe it’s possible.”
Likhachov, who took over the helm from Sergey Kirienko in October last year (Kirienko was appointed first deputy head of the Presidential Administration by president Putin), describes in detail how bureaucratic and inefficient Rosatom was, before Kirienko started turning the company around. Now Likhachov intends to complete this job – and more.
According to Likhachov, the Russian nuclear industry was saved by president Putin’s “active and deep participation” in the implementation of a plan designed by Kirienko to allow the sector to grow again. Now, however, the company is entering a new phase: “the state’s ability to support the nuclear industry is not unlimited, especially in the current economic climate, Likhachov said, and by 2020, state support for the construction of nuclear power plants will be completed. In this situation, commercial projects will be the driver of the corporation’s progress and of its research, innovation and technological renewal. In other words, we must learn how to earn money independently. At the same time, if we want to be a truly global company, we must learn how to earn money in the world market. Moreover, the domestic market alone won’t be enough to ensure development, or even to maintain the current size of the corporation.”
This is not an entirely new ambition. As WNN notes, “in 2014, Rosatom set three long-term strategic goals out to 2030: to increase its share in international markets; to reduce the cost and schedule of production; and to create new products for the Russian and international markets.” But Rosatom has a bit of a credibility problem, Likhachov acknowledges. “I’m aware that these strategic goals are often perceived simply as slogans that do not directly affect the daily lives of people. To overcome this misunderstanding, we need to do two things. First, turn strategic declarations into medium-term and totally concrete plans of action that are understandable to each and every employee. And secondly, to realise the seriousness of the challenge that is thrown at us: either we achieve the goals set out in the strategy, or we lose and return to that uncertain state in which the Russian nuclear industry found itself 15 to 20 years ago.”
The Rosatom chief “warned that competition in the market for construction of nuclear power plants abroad will get tighter. ‘New, rapidly developing and potentially powerful players with large financial resources and the considerable support of projects at the inter-governmental level are emerging. It is expected that South Korea will achieve a reference for its [latest technology] as soon as this year, while China will follow one year after that. Toughening global competition is a huge challenge for Rosatom,’ he said.
Likhachov notes that “in the global market, there is no place for triumphalism, and this is clearly demonstrated by the history of our closest competitors. France’s Areva was the undisputed world leader just 15 years ago, but today 75% of its nuclear power plant construction business is absorbed by EDF, and the state is forced to pull the reactor designers out of a financial hole with billions in cash injections. It is hard to imagine what French nuclear scientists can do to restore their reputation.”
But Likhachov’s ambitions with Rosatom go further than just being a supplier of nuclear power plants. He sees the company as becoming one of the world’s leading “technology companies”. “Today, we must answer the question, what technologies will become the basis of our competitiveness in 20-30 years. The nuclear industry has long cycles of development and implementation of innovations. If we want to preserve and increase what has been accumulated, then we need to start building for the future today, ideally even before today.”
He refers to Rosatom’s ‘Proryv’, or Breakthrough, project “to enable a closed nuclear fuel cycle. The ultimate aim of this is to eliminate production of radioactive waste from nuclear power generation. ‘We took a punt on the Breakthrough project, on fast reactor technologies, and today we are leading in this field. It’s necessary to make this leadership absolute and to deprive our competitors of their hopes of overcoming the gap in the technological race.”
But “is this enough to form the future image of Rosatom for 2040-2050? Obviously not. We need several equally ambitious projects, based on the best competencies of the industry. The search for these is the main challenge for the corporation’s management.”
In this context, Likhachov refers to the “fourth industrial revolution” and the activities of companies like GE and Siemens: “The speed and scale of change among our global competitors is incomparably higher. For example, GE and Siemens have set a course for digitalisation of their business and are now experiencing the largest transformation in their history. GE develops the printing of jet engine parts on 3D printers, uses artificial intelligence technologies in the production of aircraft engines, while optimising technical indicators and the location of wind parks. By 2021, GE plans to enter the top 10 of the world’s software developers with revenues of more than $15 billion.”
Clearly it remains to be seen whether Likhachov’s dreams will be turned into reality, but it will be fascinating to watch where Rosatom will be going in the next few years.
ENERGY WATCH #3
United States between “advanced energy” and fossil fuel world power
March 20, 2017
Will the US become the world’s global oil and gas leader – or a leader in “advanced energy” – or perhaps a combination of both?
It is one of the key strategic considerations for the US government, but also for state governments, investors and businesses. Recently, eight major business associations active in “clean energy”, including a group called Advanced Energy Economy, which includes companies like Microsoft, Siemens, Schneider Electric and many others, held a daylong social media event at which more than 900 companies, organizations, and individuals sent out messages, infographics, videos, and photos “extolling life on the job in clean energy”.
They did this “to amplify a bit of powerful economic news: based on the latest data from the U.S. Dept. of Energy (2017 Energy and Employment Report), clean energy now supports more than 3 million U.S. jobs – equal to the employment provided by retail stores, and twice as many as building construction.”
AEE notes that “in the report, DOE did not offer a definition of ‘clean energy,’ and the trade associations representing different portions of the industry have their own ways of defining what it represents. But the groups all agreed that, in the aggregate, these jobs add up to more than 3 million nationwide.
When it comes to what technologies, products, and services we consider to be advanced energy, we can get a bit more specific:
- Nearly 2.2 million workers making buildings, appliances and other products more energy efficient, saving money for families and businesses.
- More than 650,000 workers involved with advanced electric power generation, including biomass, biogas, fuel cells, geothermal, hydropower, nuclear, combined cycle natural gas, solar, waste-to-energy, and wind.
- 100,000 workers in advanced grid technologies, including energy storage, and another 100,000 workers in biofuels.
- 250,000 jobs in advanced transportation, including hybrid, electric, natural gas, and fuel cell vehicles.
In all, that adds up to 3.3 million jobs supported by advanced energy.”
That’s a powerful (political) argument right there.
But the US shale gas (and oil) industry is also positioning itself as one of the great benefactors of the US economy. Writing on the website Natural Gas Now, Tom Shepstone even argues that “US shale gas industry is, with new LNG export capacity, in a position to dominate a new world order in energy with benefits for us and emerging nations.”
Make the world safe for US shale gas! “There’s something new and beautiful happening as a result of the US shale gas industry”, writes Shepstone. “Our nation is now in position to dominate a new world order in energy with huge benefits to rural America and nations around the world who are emerging from poverty. It’s a story of exports, something we’ve not done so well at it in a very long time. It’s about shale gas produced in Pennsylvania, Ohio and Texas that is being converted to LNG and sold to Egypt, Mexico and Japan. It offers a demonstration of just how important energy infrastructure is to this country if we want to maximize the benefits of the shale revolution.”
The author notes that US LNG exports that were expected to go to Europe have been going to different markets instead: Mexico, Chile, China, South Korea, Japan – even to countries in the Middle East, such as Jordan and Egypt.
According to Shepstone, “None of this can happen [without] the pipelines and LNG ports fractivists have so vigorously opposed. They are, as we’ve noted here many times before, poverty-keepers. While styling themselves as protectors, they are destroyers. But, the new world order with respect to energy is here. A world needing our inexpensive clean energy will not be denied. It’s too important.”
The new shale gas world order does come with at least one disadvantage, though: earthquakes. Researchers at the US Geological Survey have just published a have produced “a one-year seismic outlook that takes into account both natural and human-caused earthquakes, mainly those generated by the underground disposal of oil and gas wastewater and, to a lesser extent, by fracking itself”, reports Zahra Hirji at Inside Climate News.
According to Hirji, “in recent years, there has been a surge in quakes linked to oil and gas activity, including a massive 5.8 event last September in Pawnee, Okla. Some have caused damage to homes, buildings and roads across Oklahoma and elsewhere, sparking public concern and prompting regulators to begin restricting local energy company activities.”
The good news is that according to the USGS, “the region’s overall risk went down compared to last year, which was the first year of the seismic report. The 2016 forecast had indicated up to 7 million people had a chance of facing damage from a moderate man-made earthquake. The 2017 forecast was lower because the total number of earthquakes were lower in the study area in 2016 compared with 2015. The scientists said the drop in earthquakes last year suggests man-made earthquakes can be controlled by reducing the fracking and/or wastewater disposal activity.”
But with the US on the point of leading a new world in shale gas, and a president who wants to abolish the regulations that the USGS says helped to reduce earthquakes, limits on fracking are not very likely for now.
ENERGY WATCH #4
Australian blackouts and the lessons for Europe
March 20, 2017
You will probably have heard about the problems with electricity supply in South Australia last month. These are by many blamed on the high incidence of solar and wind power in that State. In reality the situation was much more complex than that.
For a gripping account of the blackout on 8 February, I recommend this article by Hugh Saddler of the Centre for Climate Economics and Policy of Australian National University.
The immediate cause of the blackout was the unavailability of 20% of the generation capacity of the gas-fired Pelican Point power station – owned by French energy giant Engie, Saddler writes. According to Engie, the high cost of gas – partly caused by the strong growth of exports of LNG from Australia to Asia – has made it unprofitable to run the plant at full capacity. Solar panels supplied 9% of South Australia’s power around 5 p.m., but when the sun went down, this power was no longer available and could not be compensated by Pelican Point.
But what this shows, writes Saddler, is not “the failure of renewables”, but rather the failure of market design in Australia. He explains this in a fascinating follow-up article, “Australia’s electricity market is not agile and innovative enough to keep up” on The Conversation.
In Australia, writes Saddler, “electricity is [today] generated mainly by private-sector companies, while the grid itself is managed by federally appointed regulators. State governments’ role is confined to one of shared oversight and high-level policy development, through the COAG Energy Council.”
“This market-driven, quasi-federal regime is underpinned by the National Electricity Rules, a highly detailed and prescriptive document that runs to well over 1,000 pages. This is necessary to ensure that the grid runs safely and reliably at all times, and to minimise opportunities for profiteering.
The downside is that these rules are inflexible, hard to amend, and unable to anticipate changes in technology or economic circumstances.”
According to Saddler, “the rules are not agile and innovative enough to keep up. When they were drawn up in the mid-1990s, electricity came almost exclusively from coal and gas. Today we have a changing mix of new supply technologies, and a much more uncertain investment environment. Neither can the rules ensure that the closure of old, unreliable and increasingly expensive coal-fired power stations will occur in a way that is most efficient for the grid as a whole, rather than most expedient for individual owners.”
Another problem, notes Saddler, is “that one of the biggest drivers of change in the National Electricity Market (NEM) over the past decade has been the construction of new wind and solar generation, driven by the Renewable Energy Target (RET) scheme. Yet this scheme stands completely outside the NEM rules. The Australian Energy Markets Commission – effectively the custodian of the rules – has been adamant that climate policy, the reason for the RET, must be treated as an external perturbation, to which the NEM must adjust while making as few changes as possible to its basic architecture.”
Saddler argues that “a fundamental review [of NEM rules] is surely long overdue. The most urgent task will be identifying what needs to be done in the short term to ensure that next summer, with [coal power plant] Hazelwood closed, peak demands can be met without more load shedding. Possible actions may include establishing firm contracts with major users, such as aluminium smelters, to make large but brief reductions in consumption, in exchange for appropriate compensation. Another option may be paying some gas generators to be available at short notice, if required; this would not be cheap, as it would presumably require contingency gas supply contracts to be in place.”
Capacity mechanisms – market design – they’re the same issues the EU is faced with today….
Following upon the heels of the South Australia’s power outages, a remarkable piece of news came from the Australian government: prime minister Malcolm Turnbull, not known for his ambitious climate policies, announced this week that Australia will spend no less than $2 billion on a 2 GW pumped hydro scheme in the Snowy Mountains.
According to Giles Parkinson of the Australian website Reneweconomy, the move “will potentially drive a stake through the heart of the fossil fuel generation industry in Australia”.
By promoting pumped hydro, “Turnbull is effectively signing the death knell for any new coal or gas fired generation built by the private sector, and is paving the way for a 100 per cent renewable energy grid, driven mostly by wind and solar”, writes Parkinson. “By adding pumped hydro, and distributed battery storage (in homes, buildings and in EVs), Australia can reach a 100% renewable energy target, possibly within a few decades.”
He quotes Australian National University’s Andrew Blakers, who last month wrote an analysis that shows Australia could reach 100 per cent renewable energy with solar, wind and pumped hydro, at a cost of around $75/MWh – cheaper than current wholesale prices – and who describes Turnbull’s move as a game changer.
“It’s game over for gas, it’s game over for nuclear. Solar PV and wind have won the race,” Blakers says.