Nat’l Debt Grows, Energy Costs Rise

Americans have had some recent relief at the pump but it may be short-lived. According to State of the World 2015, long-term energy costs are on the rise. Why? America’s, along with other countries’ growing debt. Author John Screen Shot 2015-06-04 at 8.05.27 AMHagens a former hedge fund manager who now teaches human macro-ecology at University of Minnesota, said nations are papering over these costs with debt. He continues that higher energy costs are leading to continued recessions, excess claims on future national resources, and more-severe social inequality and poverty.

State of the World finds that the relatively low cost of energy extraction of oil, coal and natural gas, compared to the benefits seen from fossil fuels may be the most important factor in the industrialized world’s economic success. Historically, the report continues, large quantities of inexpensive fuels were available even after accounting for the energy lost to extract and process them. But, as remaining fuels become less accessible, higher energy costs will have ripple effects through economies built around continued large energy-input requirements. Rising costs, the report states, will endanger highly energy-intensive industries and practices—including the energy sector itself—as well as widen and deepen poverty as everything becomes more expensive.

“Despite having ‘plenty of energy,’ higher physical costs [of extraction] suggest that energy likely will rise from a historical average of 5 percent of GDP [gross domestic product], to 10–15 percent of GDP or higher,” writes Hagens.

State of World 2015 coverIn the short term, Hagen notes nations are taking on growing debt to avoid losses in GDP—an indicator of the economic health of a country. Since 2008, the Group of Seven nations (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) have added about $1 trillion per year in nominal GDP, but only by increasing their debt by over $18 trillion.

However, Hagens argues, continued use of credit to mask the declining productivity of energy extraction is unsustainable. For each additional debt dollar, less and less GDP is generated, and, at the same time, our highest-energy-gain fuels are being depleted. Energy is becoming more expensive for the creditor in the future than for the debtor in the present.

“We have entered a period of unknown duration where things are going to be tough,” writes Hagens. “But humanity in the past has responded in creative, unexpected ways with new inventions and aspirations.” While policy choices such as banking reform, a carbon and consumption tax, and moving away from GDP as a proxy for well-being are good long-term ideas, “we urgently need institutions and populations to begin to prepare…for a world with the same or less each year instead of more.”

EIA Unveils Updated Global Energy Portal

EIA International Energy PortalThe U.S. Energy Information Administration (EIA) has gone live with its updated International Energy Portal to improve access for people seeking information on international energy data and trends.

“With most of the future growth in energy consumption expected to occur outside of the United States and with increasingly interconnected world energy markets, a clear perspective on the international energy landscape is critically important, and EIA’s redesigned International Energy Portal makes it easier to gain insight into global energy developments,” said EIA Administrator Adam Sieminski.

According to EIA, the expanded International Energy Portal provides:

  • Increased access to data. The International Energy Portal includes a powerful new data browser that includes historical information on country-level energy use dating back, in many cases, more than 30 years.
  • New user-driven customization. The International Energy Portal introduces many features that enable users to customize their experience with EIA’s international data.
  • New data visualization features. These features include summary graphics of the world’s top energy producers and consumers broken down by energy source. Users can also generate a variety of data visualizations to quickly see how energy production, consumption, reserves, imports, exports, and carbon dioxide emissions have changed over time.
  • Improved access to international analysis. The International Energy Portal links to EIA’s international forecasts and projections such as EIA’s Short-Term Energy Outlook and International Energy Outlook. It also provides access to EIA’s entire library of international reports and analysis.
  • Enhanced data downloads. The International Energy Portal incorporates a complete application programming interface (API) that provides access to EIA’s historical international data.

Book Review: The Power Surge

As I write about energy each day, I often wonder what the trade-offs or consequences will be if a technology takes off, or even if it fails. How will it, if at all, alter America’s energy landscape? From my point of view, we are a country in fear of change and in fear of taking The Power Surgeaction. We are a country that spends more time worrying about what celebrities wore to an award show and when the next iPhone will be hit the streets, then worrying about the underlying causes of recessions (many economists blame oil prices) and what the consequences are of the decisions made, or more often than not, not made, by our elected officials.

So I was very excited when I read, “The Power Surge: Energy, Opportunity, and the Battle for America’s Future,” by Michael Levi who is the Senior Fellow for Energy and Environment and Director, Center for Geoeconomic Studies and Council on Foreign Relations. I have never read a book that does a better job of presenting various energy scenarios and the intended and unintended consequences of them and written and presented in a way based on research, economics and trends and not based on emotions.

There is no argument that there is a battle afoot over America’s, and quite frankly, the world’s energy future.

Our entire life is dependent on energy. We as a society can not function in our current “lifestyle” without energy. Period.

And despite what you personally believe, there are economic, security and environmental consequences and/or benefits to all decisions made and not made as eloquently demonstrated by Levi (and this includes those who believe climate change is a hoax). Levi begins the book with a three very probative and questions and one that he uses against all scenarios he presents in the book. In other words, how does the technology, legislation, or action fare against these three pillars?

  1. Does each energy source that has recently thrived offer important opportunities to improve the U.S. economy, strengthen national security or mitigate climate change while not causing intolerable damages on any of those fronts?
  2. Is is possible to seize those opportunities simultaneously- or would pursuing some of them severely undermine others?
  3. And can the United States take advantage of these opportunities without fundamentally altering the role of government in America?

The book begins with an in-depth discussion of all things oil and touches upon renewable energy sources such as biofuels. He also covers electricity and the role of natural gas in our current and energy future as well as technologies like wind and solar. He also points out that all sides of the issue overstate some of their claims and it was refreshing to see someone who doesn’t only call out claims on the side he/she is against. He writes, Continue reading

Solar Plant Opens in Northern Cape Province

Abengoa and state-owned financier, the Industrial Development Corporation (IDC), together with KaXu Community Trust have launched a 100 MW solar plant – KaXu Solar One – near the town of Pofadder (Northern Cape Province). The new solar facility will power 80,000 homes in South Africa. The Department of Energy of South Africa awarded Abengoa the project. The power will be sold to the utility Eskom under a 20-year power purchase agreement.

Representatives of the South African government, IDC and Abengoa during the grand opening of Kaxu Solar One.

Representatives of the South African government, IDC and Abengoa during the grand opening of Kaxu Solar One.

Minister of Economic Development, Mr Ebrahim Patel, officially inaugurated the solar power plant. He was accompanied by Deputy Minister of Public Enterprises, Mr. Bulelani Magwanishe, Premier of the Northern Cape, Silvia Lucas, executives of Abengoa and IDC and representatives of the local community.

Manuel Sanchez Ortega, Vice President and CEO of Abengoa, said of the project, “We are proud of the role we are playing to help South Africa meet its ongoing energy demands. This project will leave a legacy that will benefit the community of Pofadder, Northern Cape and the entire country. This would not have been possible without the leadership of the South African Department of Energy.”

KaXu Solar One, the first Solar Thermal Electricity (STE) power plant in South Africa, incorporates a storage system that enables production of 100 MW for 2.5 hours after sunset or before dawn. The project will result in approximately USD 891 million direct and indirect investment inflows to South Africa, generate approximately USD 516 million in taxes over the next 20 years.

Fadiel Farao, the Chairperson of the KaXu Community Trust, said KaXu Solar One will be a catalyst for economic development in the Khai Ma municipality in the Northern Cape. “The project has stimulated the local economy and will go a long way toward helping to generate much-needed economic opportunities for people in this area.” KaXu Community Trust is comprised of members of the local community.

Abengoa is building in the region Khi Solar One, a 50MW solar plant using tower technology and has already started the construction of a third project, Xina Solar One, a 100 MW parabolic trough plant. Xina Solar One will shape with KaXu Solar One the largest solar platform in sub-Saharan Africa.

Study- Clean Power Plan Won’t Affect Reliability

The second study in a few days has been released that finds that implementing the Environmental Protection Agency’s (EPA) Clean Power Plan will not negatively affect grid reliability. Analysis Group’s report, “Electric System Reliability and EPA’s Clean Power Plan: Tools and Practices,” addresses the impact of ongoing changes in the energy industry for stakeholders and offers recommendations to ensure reliability.

The report shows that “the industry, its reliability regulators, and the States have a wide variety of existing and modified tools at their disposal to help as they develop, formalize, and implement their respective State Plans.” In particular, it notes that, “These two responsibilities – assuring electric system reliability while taking the actions Screen Shot 2015-02-19 at 3.32.08 PMrequired under law to reduce CO2 emissions from existing power plants – are compatible, and need not be in tension with each other as long as parties act in timely ways.”

The report was a response to concern raised around the Clean Power Plan specific to grid reliability, or that adding more renewable energy such as wind and solar to the electric grid would create energy output issues especially during peak times. With this is mind, the report authors note “[A] recent survey of more than 400 utility executives nationwide found that more than 60 percent felt optimistic about the Clean Power Plan and felt that EPA should either hold to its current emissions reduction targets or make them more aggressive.”

To date, more than 4 million comments have been submitted to the EPA, many around reliability concerns. Groups have begun studying potential impacts of the U.S. grid should the Clean Power Plan be implemented as proposed. This report, along with others, have found that the energy industry’s past experience and ongoing efforts should address concerns.

However, the report highlights what should be a concern, that has historically been ignored, and that is the “reality” of public policy and industry action” “many of these comments tend to assume inflexible implementation and present worst case scenarios, with an exaggerated cause-and-effect relationship. Moreover, many comments … tend to assume that policy makers, regulators, and market participants will stand on the sidelines until it is too late to act. The history of the electric system and its ability to respond to previous challenges including industry deregulation and previous Clean Air Act regulations … prove that this is highly unlikely.”

Analysis Group previously released two other reports examining the ability of states to implement the EPA’s Clean Power Plan and implications for electric reliability: “EPA’s Clean Power Plan: States’ Tools for Reducing Costs and Increasing Benefits to Consumers,” and “Greenhouse Gas Emission Reductions From Existing Power Plants: Options to Ensure Electric System Reliability.”

2015 Energy Industry Update Released

ScottMadden Energy Industry UpdateThe 2015 edition of The Energy Industry Update has been released by ScottMadden, an energy consulting firm. The report points out as market changes, regulatory processes, and technology evolution unfold, energy and utility companies will face them and adapt. Themed “Changes: Turn and Face the Strange,” this issue surveys a broad array of strategic issues, including:

  • Insights drawn from a first-hand look at developments and lessons learned in Germany. The Solar Energy Power Association and ScottMadden recently partnered to lead a fact-finding mission to uncover the story behind the headlines;
  • A review of the U.S. Environmental Protection Agency’s proposed Clean Power Plan designed to reduce greenhouse gas emissions from existing power plants. The report examines its timeline, implications, and issues in the wake of ongoing political and regulatory activity and a groundswell of comments from all sides; and
  • A view of how utilities are looking with interest at electric vehicles, hoping to increase energy sales and burnish their brands. The report examines customer and vehicle characteristics and some generic business models being tested in this growing market.
  • A review of natural gas prices and gas production from shale formations. The report considers the latest dynamics in this market, including what (if any) impact low oil on which prices are having.

“For months, indeed years, we have been anticipating major changes in the industry from a number of factors—low natural gas prices, technology advancement, and profound regulatory changes,” said Greg Litra, partner and energy, clean tech, and sustainability research lead at ScottMadden. “After being in the distance, they are now on the doorstep, and energy and utility companies are responding to these changes by testing new business models and adapting to or embracing new technologies.”

Tanzania Action Roadmap for Energy Access

A recent two-day workshop held in Tanzania and hosted by the United Nations Foundation’s Energy Access Practitioner Network and the World Wide Fund for Nature (WWF) gathered support of the UN’s Sustainable Energy for All initiative’s (SE4ALL) 2030 objectives delivering access to modern energy services for all. If the goal is met, it will double the rate of energy efficiency and also double the share of renewables in the global energy mix.

Screen Shot 2015-02-11 at 10.46.15 AMHon. George Simbachawene, Minister for Energy and Minerals, urged participants to discuss best practices and ways to meaningfully engage all stakeholders to achieve sustainable energy for all in Tanzania. “SE4ALL initiatives provide a working partnership with governments, parliamentarians, private sector companies, industries, and civil society towards a sustainable future free of poverty,” he urged.

Tanzania, one of SE4ALL’s 14 African current priority countries, is working to overcome challenges in providing access to energy for its entire population. According to the International Energy Agency’s World Energy Outlook 2014, 36 million people, some 76 percent of Tanzania’s population, do not have the benefits of electricity to power their homes, support education, deliver health care services, or drive economic development across commercial, agricultural and industrial sectors.

“The UN Sustainable Energy For All consultation provides a valuable opportunity to bring energy innovators and government to focus jointly on policy and implementation solutions to bring affordable and reliable energy services to Tanzania,” explained Richenda Van Leeuwen, executive director, Energy Access, UN Foundation. “It showcases how decentralized renewable energy solutions such as solar home systems and community micro-grids complement efforts underway on conventional grid extension.”

WWF Conservation Manager Amani Ngusaru notes that Tanzania will not achieve it vision of securing a middle income country status by 2025 and other goals unless the energy equation is solved. “Access to clean, safe and affordable sources of modern energy is critical for improving people’s livelihoods, and the Government is keen to adopt a mix of solutions to achieve Universal Access.”

USDA Announces REAP Funding

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack has announced new funding under the Rural Energy for America (REAP) program under the 2014 Farm Bill. The more than $280 million in funds are open to rural agricultural producers and small business owners to install renewable energy systems or make energy efficiency improvements.

“Developing renewable energy presents an enormous economic opportunity for rural America,” Vilsack said during a press call this morning. “The funding we are making available will help farmers, ranchers, business owners, tribal organizations and other entities incorporate renewable energy and energy efficiency technology into their operations. Doing so can help a business reduce energy use and costs while improving its bottom line. While saving producers money and creating jobs, these investments reduce dependence on foreign oil and cut carbon pollution as well.”

USDA Secretary Tom VilsackUSDA is offering grants for up to 25 percent of total project costs and loan guarantees for up to 75 percent of total project costs for renewable energy systems and energy efficiency improvements. USDA will now accept and review loan and grant applications year-round through an REAP application expansion.

Eligible renewable energy projects must incorporate commercially available technology. This includes renewable energy from wind, solar, ocean, small hydropower, hydrogen, geothermal and renewable biomass (including anaerobic digesters). The maximum grant amount is $500,000, and the maximum loan amount is $25 million per applicant. Energy efficiency improvement projects eligible for REAP funding include lighting, heating, cooling, ventilation, fans, automated controls and insulation upgrades that reduce energy consumption. The maximum grant amount is $250,000, and the maximum loan amount is $25 million per applicant.

USDA is offering a second type of grant to aid organizations that help farmers, ranchers and small businesses conduct energy audits and operate renewable energy projects. Eligible applicants include: units of state, tribal or local governments; colleges, universities and other institutions of higher learning; rural electric cooperatives and public power entities, and conservation and development districts. The maximum grant is $100,000.

Application deadlines vary by project type and the type of assistance requested. Details on how to apply are on page 78029 of the December 29, 2014 Federal Register or are available by contacting state Rural Development offices.

Listen to the press conference that includes Secretary Vilsack’s remarks as well as comments from Jennifer Womble, owner of James’ Supersave Foods and Jeffrey Marstaller, owner of Cozy Acres Greenhouse, here: USDA Announces REAP Funding

REAP Funds Still Available

The U.S. Department of Agriculture (USDA) is soliciting funds for the Rural Energy for American Program (REAP).  The funding notice releases mandatory funding for both FY2014 and FY2015, as well as discretionary funding recently made available in the “Cromnibus.” The program provides grants and loan guarantees to rural small businesses, farmers and others in the ag community. However, some new changes have been usda-rd-logoimplemented including a new simplified “three tiered” application process, more frequent solicitations, and priority points for specific policy priorities such as the advancement of distributed wind power.

According to USDA, with two years of funding released at the same time, this notice of solicitation of applications (NOSA) sets a record for the largest REAP funding notice in program history, of $101.35 million. Program demand has decreased in recent years due to decreased program funding, so competition may be reduced.

“The REAP program has always been a very good one, strongly supported on a bi-partisan basis to help expand development of rural America’s abundant renewable energy resources,” said Jennifer Jenkins, executive director for the Distributed Wind Energy Association (DWEA) who has participated in the rule making. “Now it’s an even better program helping ensure distributed wind power’s continued role in bringing clean, affordable and homegrown electricity to rural America. I am pleased to see the efforts of the USDA for it’s great work on the program.”

DWEA President, Mike Bergey, added, “This program helps farmers and rural businesses lower their operating costs and become more competitive by installing American-made small wind turbines. Recent improvements to the program have made it more accessible to family farms and small businesses and we are very appreciative of the streamlining of the application process.”

Bergey is participating in the USDA webinar, “USDA Rural Energy for America Program Webinar: National Stakeholder Forum,” today from 12 pm – 2:00 pm EST.  The webinar will detail the Rural Energy for America Program (REAP) and the program changes.

Geothermal Data System Steams Into New Entity

The National Geothermal Data System (NDGS) has been spun off into a new non-profit company: USGIN Foundation, Inc. The company will commercialize the technology and infrastructure at the national and international level. The project was launched through funding from the U.S. Department of Energy (DOE) with the grant period ending December 31, 2014. The project was developed by Arizona State Geologist (AZGS) on behalf of the Association of American State Geologists.

NGDSLogoBigAccording to AZGS, the NDGS system is intended to increase geothermal exploration and development across the country by providing free, open source access to any digital data that can help, not just limited to traditional geothermal data.

The project was officially launched by DOE Secretary of Energy Ernest Moniz at the White House Datapalooza earlier this year. To date the database has more than 65 sources located in the 50 US states serving more than 10 million data records including information on 3 million oil and gas wells, over 700,000 well logs, up to a million water wells, and tens of thousands of maps, documents, and reports. In Arizona specifically, every oil, gas, geothermal, and CO2 well is online in the NGDS, along with numerous other datasets.

The International Renewable Energy Agency (IRENA) will be streaming NGDS data into their online Global Renewable Energy Atlas with contributions from AZDS’ content models and interchange formats to the National Data Repositories coalition that has created a new online Business Rules Library for data management in the global upstream petroleum industry. Anyone can set up their own node in the network using free, open source software at the NGDS website as well as stream data to their own portal.