Three Bucks a Ton
You load 16 tons and whaddayou get? The late Tennessee Ernie Ford's answer to that was "Another day older and deeper in debt." But in the emerging carbon market, we now have a real answer: about $48.
At least that's how much you'd use up in carbon credits if you participated in the nation's first "cap-and-trade" auction for carbon emissions, which set the price for a ton of carbon in that particular market at $3.07. That auction last week was for RGGI, the Regional Greenhouse Gas Initiative, casually known as "Reggie." It's the carbon trading market set up by a group of ten northeastern states and it may give us a preview for when trading begins by the Western Climate Initiative, a consortium of eleven western states and Canadian provinces, including California. As I reported last week, the WCI just made public its general gameplan for carbon trading to begin in 2012. The first RGGI auction raised $40 million, which the states can now spend on developing low-carbon sources of energy (let's hope "Reggie" fares better in the long run than "Fannie" and "Freddie.")
Actually, 16 tons isn't even enough to get you noticed in these carbon markets. Burning a gallon of gas in your car typically releases less than 20 pounds of CO2. Only facilities that pump out 25,000 tons or more per year will have to comply with WCI, which has yet to decide what portion of its credits to give away or auction off.
On Friday, we expect staffers at the California Air Resources Board to release the last version of their "scoping plan," before it goes to the board for approval. It's the master plan for implementing the state's comprehensive law to combat the effects of climate change. Part of it hinges on California's participation in the WCI, so the successful first auction of credits by RGGI bodes well.
Another Climate "Summit"
Governor Arnold Schwarzenegger said today that he plans to host a major climate conference in November. Few details were offered for the planned Governors' Global Climate Summit–not even a date–but there is a goal and that's to "form a broad international alliance," to lay a "framework" for the next round of UN-sponsored talks, scheduled for December in Poznan, Poland. Schwarzenegger plans to invite every U.S. governor as well as provincial governors from around the world, including China.
At the conferences in Poznan and later, Copenhagen, negotiators will try to build momentum toward a meaningful international climate accord, before the Kyoto Protocol expires in 2012.
In his speech before members of the Commonwealth Club of California, at San Francisco's Fairmont Hotel, the Governor took U.S. leaders to task for being "asleep at the wheel" when it comes to taking action to mitigate global warming. "We are not waiting for the federal government," said Schwarzenegger, "We (will) continue on and push forward."
He also had some choice words for U.S. automakers, who he said "need to get off their butts" and start building greener cars. He applauded Tesla Motors for its decision to build electric cars in San Jose, a project touted to bring 1,000 new jobs to Silicon Valley.
The Governor sidestepped a question about Proposition 10, the natural gas initiative supported by Texas entrepreneur T. Boone Pickens, saying he'll take a position on that and other statewide ballot measures in the weeks to come.
Schwarzenegger said he would "review very carefully" SB 375, the anti-sprawl bill awaiting his signature. He said he "loves the idea" but that the bill would have effects almost as sweeping as the Global Warming Solutions Act of 2006.
The Governor's entire speech will be broadcast on KQED Radio tonight at 8 p.m., with re-broadcasts scheduled for Saturday and Sunday.
Wind and Solar Incentives Pass Senate
And speaking of solar power… After months of roadblocks, the extension on tax credits for renewable energy is one step closer to reality after the Senate yesterday approved the $17 billion package with a 93-2 vote. The credits for wind, solar, and energy efficiency projects are part of "The Renewable Energy and Jobs Creation Act of 2008," a larger tax bill (HR 6049) that has been stalled in Congress as legislators wrangled over how to fund the credits. If they are not renewed, the incentives will expire at the end of this year, undoubtably having a negative impact on future solar and wind innovation and expansion in the United States.
You can read more about of the current situation in a piece by Ben Gemen at E&E Daily, but to access the article directly, you must be a subscriber. For the rest of us, Climate Progess has posted the story here.
Solar Incentives May Be Uneven Across State
In response to our Solar Realities series, a Northern California listener raised an interesting point and sent us the following email, though he asked that we withhold his name:
As you likely already know, the CA Public Utility Commission's "California Solar Initiative" provides some very good rebates to give citizens, businesses, and public agencies an incentive to install grid-tied PV generating systems. However, one thing that might be worth noting is that the far northern portion of CA that is served by Pacific Power is not eligible for any of these rebates. The Pacific Power service area is all or part of Modoc, Siskiyou & Del Norte counties. So citizens in these counties cannot participate in the CA Solar Initiative! Apparently, the CA Public Utilities Commission has not yet gotten around to require Pacific Power to charge a fee to its CA customers to fund the rebate program. …2/3 of this of this area is prime territory for PV installations with a very high number of clear sky sunny days per year.
In Tuesday's Climate Watch piece, reporter Rachael Myrow explains how California's solar rebates and credits work for utilities customers in most of the state.
Solar Realities for the Rest of Us
These are Gold Rush days for solar advocates in the US. Molly Sterkel, who supervises the California Solar Initiative for the Public Utilities Commission, jokes that she lives in fear that private industry is looking to poach her staff:
There's a lot of people going to solar companies to work because it's a really exciting industry. It's growing so much in California, so it's attracting some of the best and brightest. I've told all of my staff that they have to sign 10-year contracts to work for me but so far most of them have stayed because it's a really exciting time to be in government, to be able to run the largest solar program in the country.
In 2002, California established its Renewable Portfolio Standard Program "…with the goal of increasing the percentage of renewable energy in the state's electricity mix to 20 percent by 2017." Then the Energy Commission bumped the deadline up to 2010, and the 2004 Energy Report Update further recommended increasing the target to 33 percent by 2020.
Whatever the deadline, numerous incentives and rebate programs funded by the state and utility ratepayers are fueling an explosion of solar. Sterkel says it's growing at a rate of 40-50% a year.
But installing solar is still not cheap. Even now, all the solar in California adds up to 350 MW (one big power plant generates about 500 MW).
In part, that's because most of the people taking advantage of the subsidies are residential utility customers, and most of those are installing systems of 4 KWs. That's not a bad thing, per se. Any kilowatt that home doesn't siphon off of the grid is a kilowatt that can be used elsewhere. But slow and steady is a little too slow and a little to steady for some. Never mind that California is way ahead of other US states. That just makes it easier to compare us to other countries, like Germany and Spain, that have invested even more in solar.
There's no argument it takes subsidies to make solar financial feasible. The question for advocates and regulators alike is how much subsidy helps solar thrive without spurring a ratepayer revolt? And how long should those subsidies last? A report from McKinsey & Co. concludes:
"…regulators must adjust incentive structures over time and phase them out when grid parity is reached."
Grid parity is the point at which there's no difference between the price of solar and the market price for (less environmentally preferable) "brown power."
Sterkel says:
(That) is the point at which everybody gets solar. Just like there was a moment when everyone got a cell phone and everyone got a car. And this year, we've already installed more megawatts than we did in all of 2007, and we're not even all the way through the year. The policies are all pushing towards solar. The businesses are growing. The venture capital is here. You know, all signs point to "yes" for solar here in California.
That's even though incentive levels in California have been dropping.
Where's it all going? Some say we could see a repeat of the 1980s, when oil prices tanked after spiking and green energy projects went "poof." It took them well over a decade to begin the long, slow climb back to economic and political viability. Oil prices appeared to be sliding after a long, hot summer in 2008–until yesterday, anyway. But green advocates say they won't be caught out in the cold this time around. That's because renewable energy advocates can point public attention to something that goes well beyond consumer price protection: climate change.
Rachael Myrow hosts The California Report. She reported on rooftop solar installations for Climate Watch on September 23, 2008. Listen to her story here.
Supersizing Solar
Monday begins the radio component of Climate Watch, with the first of a two-part series on "solar realities." (Click here for the second part of the series). Solar power is one of those renewable, low-carbon sources of energy that is enjoying a boom, as we scramble to reduce the state's carbon footprint and, with any luck, slow down the climate change train.
But one of the thornier realities of utility-scale solar is that it has its own footprint. In fact, in terms of the sheer real estate that it gobbles up, you could say it's the Sasquatch of renewables.
David Gorn begins our series on Monday morning's edition of The California Report. Here's a page from his reporter's journal:
My girlfriend couldn’t believe it. "You’re going WHERE? The middle of the Mojave Desert? In August?"
And she looked up the temperature out there in Kramer Junction, California. She’s so helpful that way. The web page said it would be a high of 121 degrees Fahrenheit. But the reality was much better; the area was going through a "cold snap" the week I went, and it was only 106.
Still, that’s hot enough to fry eggs on the hood of your car, and it’s hot enough to power some of the largest solar reflectors in the world. In fact, because of the dearth of cloud cover, the searing heat and the higher elevation (~2,500 feet), the Mojave is one of the best places on Earth for solar power generation.
Out at Kramer Junction, the solar power-generating plant uses solar troughs to collect the heat. There are about 10,000 of these modules, 20 mirrors to a module, spread out over a million square meters. That’s about 1,000 acres.
The new plant that’s proposed for the Mojave city of Ivanpah, near the Nevada border, will be about three times that size. The entire thing would cover about 5 square miles. When it’s built, it may be the largest solar power generating site in the world, depending on the pace of some other planned projects.
There are actually three other proposals for even larger solar plants in California, but those are not yet under review by the Bureau of Land Management. And one of them is out in the Imperial Valley, where there are currently no transmission lines in place.
You can peruse the major Mojave sites on our interactive map. The California Energy Commission has the complete list of existing and proposed large solar arrays.
Listen to David's story on super-sized solar sites here.
Gone: An Eloquent Voice on Climate Change
I was unaccountably saddened by the news today that Philip Clapp had died. I say "unaccountably" because I really didn't know the man. I had been in the same room with him exactly one time, when he spoke to a group of Knight Fellows in College Park, MD, right after Memorial Day.
But of all the nearly two dozen speakers paraded before us over the four-day climate change seminar, Clapp stood out. He was Deputy Managing Director of the Pew Environment Group, an outgrowth of the National Environmental Trust and to say that he knew his stuff would be an enormous understatement. He held an impressive–almost singular, it seemed to me–footing on the treacherous ground of climate science and policy. Speaking without a single note, he had a way of distilling the topic down to its stark realities. It was riveting–and a little scary. But listening to him, I didn't get the sense that Clapp was some sort of professional alarmist. I did get the sense that he could see our high-carbon future with unusual clarity–and I left the room glad that he was on the job.
Philip Clapp died in Amsterdam at the age of 54. David Roberts posted this obituary for Grist.
Net Zero Energy Future?
According to the Air Resources Board, about a quarter of California's (human-induced) greenhouse gas emissions come from buildings–or what planners like to call the "built environment."
My colleague Peter Jon Shuler was at today's meeting of the California Public Utilities Commission in San Francisco, when it rolled out its master plan for energy-efficient buildings throughout the state. Peter's notes:
The California Public Utilities Commission has taken the first steps in an innovative plan to eventually get all new construction in the state down to zero net energy use.
On Tuesday, the PUC adopted what it’s calling the Long Term Energy Efficiency Strategic Plan. More than 500 individuals and organizations came together to craft the ambitious plan – designed to save energy while growing the state’s population and economy. It’s still a little fuzzy on the details of how all this will happen.
The plan includes what it calls its four Big Bold strategies:
• All new residential construction in California will be zero net energy by 2020;
• All new commercial construction in California will be zero net energy by 2030;
• The Heating, Ventilation, and Air Conditioning (HVAC) industry will be reshaped to ensure optimal equipment performance; and
• All eligible low-income homes will be energy efficient by 2020.
Selling the Benefits of AB 32
Well-timed would be one way to describe the pair of rosy forecasts from the state's Air Resources Board today. For Californians beleaguered by the slumping economy, both reports were choc-a-bloc with good news. The only drawback is that we'll have to wait a while for the payoff.
The ARB is the "lead agency" for implementing California's comprehensive plan passed in 2006 to combat climate change, known affectionately as AB32. The primary objective is to get a 30% reduction in greenhouse gases statewide by 2020. The two reports released today attempt to gauge the long-term economic and public health benefits from fully implementing the plan.
Over time, the reports point to creation of more than 100,000 jobs and higher per capita income on the economic front. Estimated health benefits include fewer premature deaths (mostly related to heat waves) and asthma cases.
Some of the touted benefits are relatively small incremental improvements over programs already in place. For instance, ARB anticipates that by 2020, all the provisions of AB32 combined would mean 67 fewer hospital admissions per year (statewide) for respiratory conditions. That compares to the 770 admissions spared in 2020 that would result from existing air quality measures.
Where's My CW Radio?
Due to breaking news events in Sacramento and Los Angeles over the weekend, we had to reschedule the radio rollout of Climate Watch until next week. Please listen to our two-part series on "Solar Realities" (aired on September 15 and 16, 2009 on The California Report). Listen to Part 1 of the series here, and Part 2 here. In the meantime you can explore some of the supersized solar sites already built in the Mojave and see where utilities are planning to add one that would dwarf even these.
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