Solar Offers Bright Future

Thursday, November 06, 2008
Sarah Ruppenthal

Expert explores successful development of solar technology on the Valley Isle. “A sustainable future starts with solar power… It’s just so cool.”

As the glow of the afternoon sun faded into the evening sky, more than 100 residents arrived at the Kihei Community Center on Tuesday, Oct. 28, for a “Public Meeting for a New Solar Energy Future.”

Eager to learn more about harnessing the sun’s rays to energize Maui’s homes and businesses, audience members settled into their chairs to hear Abengoa Solar Inc. Chief Operating Officer Scott Frier discuss the development of solar technology on the Valley Isle. As he introduced the evening’s guest speaker, Sierra Club Maui Chapter Chairman Lance Holter reiterated the mounting energy challenges facing island residents, asking all in attendance to take a moment and recognize, “All of what we see around us is because of the sun… the sun is the energy that gives us the power to live.”

As he took the stage, Frier echoed Holter’s sentiments. “A sustainable future starts with solar power,” he said. “I see an enormous opportunity for energy independence here on Maui.”

Heralded as the world’s leading developer of solar technologies, Abengoa Solar Inc. has been building and managing Solar Electric Generating Systems (SEGS) for more than two decades. Based in Spain, but operating worldwide, Abengoa is currently developing the 280-megawatt (MW) Solana Generating Station project in Southwestern Arizona. When completed, it will be the largest solar facility in the history of mankind.

And given the company’s impressive record of success, Abengoa may very well be the optimistic ray of sunshine that Maui’s energy-conscious residents have been waiting for. While he admitted there is a lot of misinformation circulating about solar technology, Frier reminded audience members that solar power has been a trusted source of energy for “a very long time,” as the ancient Greeks used the sun to ignite the first Olympic torch. It is a stable, reliable resource, he said, which not only produces clean, renewable energy, but also stems the tide of imported fossil fuels and “harnesses local resources while retaining local wealth.” If Maui were to utilize a large installation of SEGS, Frier assured it would be a steady and “rock solid” investment that would create lasting environmental and economic solutions to our current energy woes. Calling his initial discovery of Hawai‘i’s electric rates and power grid structures “a jawdropper,” he encouraged audience members to consider solar as a viable alternative to the volatile economic and environmental impacts of fossil fuels.

Traveling to Maui last week on a “reconnaissance mission,” Frier said he thoroughly examined the lay of the land, including the present energy infrastructure, topography and weather patterns, in addition to the “political will and the will of the people.”

Following his in-depth assessment, he overwhelmingly gave a stamp of approval for developing and operating a solar facility on Maui. “I see a healthy nexus here,” he said.

Simply put, solar power plants convert sunlight into deliverable thermal energy by capturing the heat of the sun’s rays in parabolic mirrors and sending it along a pipeline where, at elevated temperatures, it drives a set of steam turbines to generate electricity. The end result, called concentrated solar thermal power, can provide energy to thousands of homes and businesses, and at a significantly lower rate than a fossil fuel burning electrical plant.

According to Frier, “You can craft a solar system to meet specific needs,” customizing facilities according to variables such as fossil fuel hybridization, energy storage and managing output for peak times and seasons.

For Maui, Frier said parabolic troughs would be the most suitable system; parabolic troughs are sleek, mirror-like structures that look like props from a science fiction movie—but offer a quiet, unobtrusive and low-profile collection system. “They are elegant in their simplicity,” he said. “And they easily maintained… and durable and resilient under wind stresses.”

So, where would Maui’s solar facility be located? Frier said an ideal site for a 50-MW solar power plant would be a 250-acre (five acres for every megawatt) stretch of land between Kaupo and ‘Ulapalakua, a veritable “hot spot” that would maximize the output of solar power. And as for the price tag, a 50-MW solar power plant would cost around $320 million. While the amount may seem staggering, Frier said a 50-MW facility would generate enough electricity to power one-fourth of the island, or 50,000 people, for nearly half of the current per-kilowatt hour cost—and save our precious natural environment in the process.

But the advantages don’t stop there—in addition to powering Maui’s homes and businesses, Frier said the construction of a solar generation facility could also jumpstart the local economy. “When you’re building solar, you’re building jobs,” said Frier. “You’re looking at creating hundreds of jobs during the construction phase of the power plant, and dozens of full-time jobs afterwards.” But the first step, he said, is encouraging government officials to see the light—literally. Faced with a plethora of alternative energy sources, legislators have encountered difficulty in narrowing it down to one choice for our renewable energy future.

Frier said he believes the lasting benefits of solar technology will speak for themselves, citing a proven track record, an ability to produce clean, renewable energy, immunity to price volatility and a boost to local economies.

But above all, he said, “It’s just so cool.”

For more information, visit http://www.abengoa.com/ or email abengoasolar@abengoa.com.

Calls for oil price reform as world prices fluctuate

By Ding Qi (chinadaily.com.cn)

Volatile oil prices may be in for further rises in the future, and experts are now suggesting the pricing system of oil in China be reformed.

At the Energy and Finance World Forum in Beijing over the last two days, economists from around the country gathered to consider China's next steps to safeguard energy security as unstability in oil prices and financial markets continues.

Uncertainty remains in oil prices
Oil futures traded in the New York Mercantile Exchange dropped nearly 33 percent in October, the largest monthly loss in history. Despite the plunge, economists said it was still too early to say the crude price had hit bottom, nor to assume a cheap oil supply in the coming years.

According to them, the trend of oil price currently is largely affected by two uncertain factors: demand and dollar.

"The global economic slowdown caused by the financial crisis has greatly cut oil demand worldwide," said Dong Xiucheng, professor and an oil expert at China Petroleum University. He added the trend will continue for a certain period as economic indicators of major industrial nations show no signs of quick recovery.

On the other hand, the swinging exchange rate of the US dollar also adds to the uncertainty of the oil price. "In the short term, it's difficult to reshape the existing international monetary system which takes the US dollar as a major denomination and settling currency. Therefore, the dollar factor is always considered in the estimation of oil prices," said Xia Bin, director of the Financial Research Institute of the State Council's Development Research Center, a government think tank.

Although the exchange rate of the greenback has rallied some 20 percent since July, both experts doubt whether the strong dollar could last given the huge capital release in the unprecedented US financial bailout plan.

In addition, Dong worried part of the bailout money may sneak into resource and commodity markets, which will revive speculation and push the oil price higher.

Based on above factors and the benefits of oil producing nations, Dong predicted that the oil price will be likely to run between $80 to $100 a barrel next year, although any extra factor could lead to unexpected scenario

Multiple efforts to carry out energy strategy

According to Chen Ji, professor from Capital University of Economics and Business, the financial crisis has helped squeeze most speculative bubbles out of the crude oil price. As part of the nation’s energy strategy, he suggested the country seize the opportunity to reform the pricing system of oil and other resources and make the prices reflect actual market demand and supply.

At present, domestic prices of refined oil were mainly under government control. With the diving of international crude price, the price gap between domestic and overseas market is waning, which analysts said is a good chance for China to mobilize its energy prices.

"I believe the authority will deal with the oil pricing issue before the financial crisis ends," said professor Dong.

To function efficiently, the new marketized system should adopt an improved price linking mechanism and speed up the frequency of price adjustments according to the international oil price, he said.

In terms of overseas oil trading, Xia suggested the country seek multi-currency settlement for oil deals and possible currency swap between China and oil producers to avoid the impact of dollar fluctuation.

In addition, a diversified foreign exchange reserve would also be beneficial to the country's financial and energy security.

"Among all the reserve options, oil reserves can be very important one," he added.

Obama's The Candid Candidate On Energy

Jerry Taylor and Peter Van Doren 11.03.08

Back in January of 2008, Barack Obama met with the editorial board of the San Francisco Chronicle and had this to say on the topic of climate change and electricity prices:

"Under my plan of a cap and trade system, electricity rates would necessarily skyrocket . Even regardless of what I say about whether coal is good or bad. Because I'm capping greenhouse gases…they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.

"They--you--you can already see what the arguments will be during the general election. People will say, 'Ah, Obama and Al Gore, these folks, they're going to destroy the economy, this is going to cost us eight trillion dollars,' or whatever their number is."

Well, it didn't turn out that way. Until Gov. Sarah Palin brought it up yesterday, nobody seemed to notice that Sen. Obama had said any such thing. While one can wonder why the Chronicle didn't play up Obama's rather bracing statement more than it has--or why what was in plain sight on the Internet for nine months didn't attract more attention from the blogosphere, print media outlets, or even the McCain campaign itself--one thing is clear: Barack Obama is at least (sometimes) intellectually honest. Sen. McCain--at least on this issue--is not.

Sen. Obama's frank confession about what his climate change policies will mean to electricity consumers is one very good reason why so many conservative and libertarian intellectuals are gravitating toward his candidacy. It's not that right-wing thinkers necessarily endorse his climate change policies. It's that right-wing thinkers are increasingly tired of Republican hypocrisy and make-believe policy fights.

Sen. Obama supports cutting emissions by 80% by 2050. Sen. McCain, on the other hand, proposes a 60% cut in emissions by that same date. It is hard to say what those programs will actually cost because we lack concrete details, and the cost of reducing greenhouse gas emissions both now and in the future is uncertain. But we know they will cost something.

A reasonably good stab at quantifying likely costs can be found in an analysis performed last April by the U.S. Energy Information Administration. In that exercise, the EIA looked at a bill sponsored by Sens. Joe Lieberman and John Warner to reduce greenhouse gas emissions by 70% by 2050. EIA concluded that the Lieberman-Warner bill would increase annual household energy costs by somewhere between $30 and $325 by 2020 and between $76 and $723 by 2030. Gasoline prices in particular would be between 22 and 49 cents per gallon higher than otherwise would have been the case in 2020 and between 41 cents and $1.01 higher in 2030.

EIA's analysis, however, did not look at costs between 2030 and 2050 given that too much is uncertain regarding mitigation costs and emission trends. Separate analysis of the bill by the Environmental Protection Agency found that gross domestic product would, as a consequence, be reduced by somewhere between 1% and 3.8% by 2030 and between 2.4% and 6.9% in 2050.

Of course, there are plenty of other analyses of Lieberman-Warner and similar greenhouse gas bills out there--some predicting higher costs, some lower--but before you default to the argument that of course the Bush administration reports greenhouse gas emissions reductions will prove costly, be aware that the EIA has a well-earned reputation for politically unbiased analysis and the Bush EPA has, if anything, been more-than-friendly to the case for reducing greenhouse gas emissions.

It's also worth noting that lead author Joe Lieberman was quite happy with both the EIA and EPA analyses. "Two separate government analyses have now come to the same conclusion," he said in a press release when the EIA report came out. "Our bill curbs global warming without harming the U.S. economy."

Let's return, however, to the present campaign. If you're outraged over the costs associated with Barack Obama's climate change program (which would be a bit more costly than the Lieberman-Warner bill), voting for John McCain won't do you much good. Sen. McCain's program, which is only a bit less costly than the Lieberman-Warner bill, would hit you in the wallet nearly as hard as Sen. Obama's program, and he would probably bring more Republican office holders along for the legislative ride to boot.

If your job is tied to the coal industry and you worry about Sen. Obama's statement (also in that audio tape), "If somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted," then you're right to worry … about either candidate (Gov. Palin's promise to the contrary notwithstanding).

If you're disturbed by the fact that hardly anyone is aware of--or prepared for--the higher energy costs that would hit them if Sen. Obama or Sen. McCain were to translate their climate change programs into reality, note that the problem is political candor and, on this score, Barack Obama has more of it than John McCain.

If, on the other hand, you're excited by Sen. Obama's climate change plan, ask yourself this: How much would global temperatures go down if we put this plan in place? Computer models suggest that the answer is only a small fraction of one degree Fahrenheit.

Would the economic benefit of reducing global temperatures by that virtually immeasurable amount exceed $238-983 billion by 2030 (EPA's estimate of the cost of Lieberman-Warner that year)? If not, then your legislative enthusiasm is misplaced.

If you're sick of substantive issues like this getting lost in the national roar regarding tracking polls, campaign strategy and the like, welcome to the club.

Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute in Washington, D.C.