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Southeast Asia: hotspot for renewables or dumping ground for coal?

23 February, 2018 - 15:00

In the Association of Southeast Asian Nations (ASEAN), renewables contributed 8% to final energy consumption in 2014. Since then, the share renewable energy has only slightly increased whereas fossil fuel-powered generation is the main source for new power plants. Lars Blume and Nguyen Thi Hang illustrate why momentum in Southeast Asia is changing.

Bangui Wind Mills in Philippines (Photo by Ignacio Malapitan, edited, CC BY-SA 3.0)

North America went from being one of the biggest oil importing countries to a net exporter thanks to its shale gas revolution. As a result, coal was gradually pushed out of the market by abundant and cheap gas and increasingly cost-efficient renewables. Fortunately, under the Trump Administration’s policy only the framework has so far changed and a significant renaissance of coal is not happening in the US.

Europe, with a generally lower growth perspective on the one hand, and a decoupling of GDP growth and energy demand on the other hand, new renewable capacity enters a predatory competition with existing, mostly fossil fueled powered plants and infrastructure. Thus, the energy transition in Europe is a systemic transformation from coal to renewable energy sources.

The situation in the ASEAN region is different. The population of the region will increase significantly from 615 million in 2014 to 715 million in 2025. The economy is growing by more than 5% per year, resulting in an expeditious rise in energy demand. Much investment into energy infrastructure is therefore needed, and the next years will be decisive in determining the energy path forward: clean or dirty. So far, the installed coal generation of 68,319 MW is still in a developing stage. This opens the great opportunity to leapfrog coal-based energy systems and invest in a sustainable and renewable energy future.

The region receives funds from the European Union, and Canada to shift its energy system towards one that is based on renewables. Only countries like South Korea, Japan and China are pushing for more coal in the region. However, former US Secretary of State John Kerry is now working with Vietnamese authorities on an alternative to their coal plan; one that provides the same amount of electricity but focuses on renewable instead of fossil fuel generation.

Solar and wind technologies are still not regarded as clean alternatives to coal. Instead of benefiting from the global reduction in technology costs for wind and solar and taking note of the impressive renewable targets in China and India, south east Asia seems as if it is becoming the next booming market for the global coal industry. ASEAN coutnries are likely to be receive coal from China, which has decided to transition to renewables and now needs to place its coal in other markets. Should the region fall for this strategy, it would lock coal in for another 30 to 40 years of consumption.

This is a shame in a region that is so well placed to invest in renewables, especially wind and solar. Solar irradiance in the region is very strong, averaging over 1,500-2,000 kWh per m2 annually. Wind resources are more modest, but there are regions along the coast and inland with reasonable wind speeds. Parts of Vietnam, Thailand, Indonesia and Myanmar offer average wind speeds between six and seven meters per second, enabling capacity factors well into the high 30s or beyond. Furthermore, the bioenergy supply potential is very large across the entire region (according to an IRENA assessment, there will be a total supply potential of 155-265 Mtoe per year in 2025).

Most ASEAN member states have set targets for renewable energy technologies and implemented measures to encourage their development, though challenges remain in making these policies effective and efficient. In most countries, monopoly or oligopoly structures as well as wasted interest are slowing down a market shift while maintaining barriers that are protected by myths and misconceptions around renewable energy. Regulations and framework conditions are not always clear, and changes in support mechanisms are increasing the risk premium for investors. In some countries bankability issues still keep away private investors.

ASEAN has set out to make 23% of its primary energy renewable (more than double the current share). Yet 76% of this amount is to come from hydropower. The installed capacity of new renewables that are not hydro is 6%, of which 1 GW is wind power and 2GW is solar PV.

The various national power development plants (PDPs) do not yet adequately reflect the renewable future yet. The current plans see the dominance of hydropower remaining at 55% of added renewable capacity in the region until 2025. Despite this, non-renewables (mostly coal) will account for 65% of the total new-built capacity in the region. However, the PDPs are currently under revision in most of the countries, so the window of opportunity for a renewable future is now as the proposed coal infrastructure is not yet in place

Economics will also help push development in renewable energy. The region will stop investing in expensive and dirty solutions as state budgets are getting tighter. In addition, the decreasing cost of renewable technologies compared with fossil energy will have a significant impact on their growth in Southeast Asia. The coal infrastructure is not yet installed, so switching to the renewable system is still possible.

Lars Blume and Nguyen Thi Hang work for GreenIDa Vietnamese non-profit organization that works to promote sustainable development in Vietnam and the larger Mekong region.

Categories: Blogs

It’s always windy somewhere: balancing renewable energy in Europe

22 February, 2018 - 14:45

There are many steps we can take to deal with the flexibility of renewable energy: better storage, smart meters, lowering demand via efficiency. But what about getting wind to help balance out the grid in Europe? John Timmer of ArsTechnica looks at harnessing weather patterns for the energy transition.

The North Sea has some of the best wind resources in Europe, but to balance the grid, we’ll need turbines in the Balkans too (Photo by Hans Hillewaert, edited, CC BY SA 4.0)

Renewable power sources’ intermittency could eventually cause problems as our electric grids become increasingly reliant on them. While it’s always sunny somewhere, and always windy somewhere (often somewhere else), relying on weather variations for generating consistent power means integrating power sources across a large geographic region. Many countries, including several leaders in renewable power, don’t have that luxury.

A Swiss-UK research team has now looked at what this means for Europe, where renewable energy has boomed primarily among countries with access to the wind resources of the North Sea. They’ve found that certain weather patterns leave the North Sea region underproducing for over a week. But those same patterns would boost production relatively nearby—in the Balkans, Spain, and Scandinavia. While that would be enough to offset the North Sea’s power slump, it won’t do much to help until Europe integrates its grids.

Regime change

The authors focus on what they call “weather regimes,” periods of similar weather that tend to stick around for five days or more. Most weather services recognize a handful of distinct European regimes, like having a low-pressure system parked south of Iceland, or high pressure just to the west of Ireland. The authors consider seven of these, nearly twice as many as most weather services recognize, because the relatively subtle differences among them can make a big difference to wind power generation.

The wind speeds and cloud cover generated by these weather regimes were then plugged into a model that tracks the aggregate capacity of wind and solar in each country in Europe. With current installations, the different weather regimes could mean a production of anywhere from 22 to 44 gigawatts in Europe. In the North Sea alone, production could range from half its mean value when the weather’s bad, up to 1.5 times the mean when the weather locks high winds in place.

Plans are also in place to boost renewables to cover 25 percent of Europe’s electricity needs by 2030, which would exacerbate the problem. Right now, the difference between high- and low-production regimes is 22GW; the authors estimate that in 2030, the difference would be over 50GW.

Since it’s always windy somewhere, the researchers decided to figure out where that somewhere is. And it turns out there were several options. One of them is northern Scandinavia, where wind production went up under any of the weather regimes under consideration (presumably, it’s lower during more variable weather). Another is the western Mediterranean near Spain, where production varied among the seven regimes with no clear pattern.

But the key potential is in southeast Europe—the Balkans. Here, the activity was nearly a mirror image of that in the North Sea, meaning when it was calm there, the Balkans would produce 1.5 times the typical amount of wind power.

Renewing the grid

There are two small problems with this finding. One is that northern Scandinavia and the Balkans have almost no wind generation installed at the moment. And, even if there were, you’d run into issue two: there’s not much transmission capacity between there and the countries that border the North Sea.

Still, since the authors had a model, they decided to see what would happen if Europe installed the transmission lines and built their future wind power outside the North Sea region. With the right installation plan, by 2030, the mean generation would be similar to what you would get out of continued development in the North Sea area: a mean of a bit over 75GW of power. But, instead of varying by as much as 25GW above or below that, the variability dropped to a third of that (±8GW). The minimum amount of renewable power produced would also be shifted upward, allowing renewables to be managed more like a source of baseline power.

While the report mostly focused on wind, there’s some good and bad news for solar. In many locations, solar and wind are anti-correlated, meaning when one’s low, the other tends to produce more. That’s the case for Europe, where you tend to get more solar power when wind speeds are low. But solar is also far less variable than wind, and there’s a lot less of it right now. As a result, for solar to balance out the variability of wind, European countries would have to install ten times the existing capacity.

The authors consider that level of expansion unlikely, which is why most of the analysis is focused on wind. Of course, getting wind to help balance out the grid in Europe would require a significant expansion of the transmission capacity from Scandinavia and the Balkans.

It would also require a different approach to planning. Right now, economic forces and national priorities are dictating that most new installations are going into the North Sea, because that’s where the best wind resources are. Installations in the areas identified by this study have value not because they produce as much power, but simply because they produce power when the North Sea region goes quiet. At the moment, there’s no obvious way to make wind installations in other countries a national priority for places like the UK and Germany and little market inducement to install hardware where it would produce less overall.

This article has been republished from Ars Technica.

John Timmer is Ars Technica’s science editor. He has a Bachelor of Arts in Biochemistry from Columbia University, and a Ph.D. in Molecular and Cell Biology from the University of California, Berkeley.

Categories: Blogs

Life After Coal

20 February, 2018 - 15:00

In Germany’s Appalachia, the last coal mine is closing. Local residents were skeptical at first, but jobs in technology and renewables, as well as social cohesion are helping the energy transition move forward. Amelia Urry writes about the German struggle to move beyond coal.

If the rest of the country could follow Bottrop’s example, Germany could leave coal behind (Image via Grist)

It’s a sunny October day on the outskirts of the west German town of Bottrop. A quiet, two-lane road leads me through farm pasture to a cluster of anonymous, low-lying buildings set among the trees. The highway hums in the distance. Looming above everything else is a green A-frame structure with four great pulley wheels to carry men and equipment into a mine shaft. It’s the only visible sign that, almost three quarters of a mile below, Germany’s last hard coal mine lies beneath this spot.

Bottrop sits in the Ruhr Valley, a dense stretch of towns and suburbs home to 5.5 million people. Some 500,000 miners once worked in the region’s nearly 200 mines, producing as much as 124 million tons of coal every year.

Next year, that era will come to an end when this mine closes. The Ruhr Valley is in the midst of a remarkable transformation. Coal and steel plants have fallen quiet, one by one, over the course of the last half-century. Wind turbines have sprung up among old shaft towers and coking plants as Germany strives to hit its renewable energy goals.

But the path from dirty coal to clean energy isn’t an easy one. Bottrop’s Prosper-Haniel coal mine is a symbol of the challenges and opportunities facing Germany — and coal-producing states everywhere.

Around the world, as governments shift away from the coal that fueled two ages of industrial revolution, more and more mines are falling silent. If there’s an afterlife for retired coal mines, one that could put them to work for the next revolution in energy, it will have to come soon.

The elevator that carries Germany’s last coal miners on their daily commute down the mine shaft travels at about 40 feet a second, nearly 30 miles an hour. “Like a motorcycle in a city,” says Christof Beicke, the public affairs officer for the Ruhr mining consortium, as the door rattles shut. It’s not a comforting analogy.

The brakes release and, for a moment, we bob gently on the end of the mile-and-a-half long cable, like a boat in dock. Then we drop. After an initial flutter in my stomach, the long minutes of the ride are marked only by a strong breeze through the elevator grilles and the loud rush of the shaft going by.

When the elevator finally stops, on the seventh and deepest level of the mine, we file into a high-ceilinged room that looks like a subway platform. One of the men who built this tunnel, Hamazan Atli, leads our small group of visitors through the hall. Standing in the fluorescent light and crisp, engineered breeze, I have the uncanny sense of walking into an environment that humans have designed down to the last detail, like a space station or a submarine.

A monorail train takes us the rest of the way to the coal seam. After about half an hour, we clamber out of the cars and clip our headlamps into the brackets on our hard hats. It is noticeably warmer here. There is a sulfurous smell that grows stronger as we walk down the slight incline toward the deepest point of our day, more than 4,000 feet below the surface, and duck under the first of the hydraulic presses that keep the ceiling from collapsing on us.

Because this seam is only about five feet high, we have to hunch as we move through the tunnel of presses, stepping through deep pools of water that swallow our boots. The coal-cutting machine is stalled today, otherwise it would be chewing its way along the 310-yard-long seam, mouthparts clamped to the coal like a snail to aquarium glass. The coal would be sluiced away on a conveyor belt to the surface, and the hydraulic presses would inch forward, maintaining space for the miners to work.

Instead, the mine is eerily quiet. Two miners, their faces black, squeeze past us. As we sit, sweating and cramped under the hydraulic presses, the bare ceiling above the coal seam gives up an occasional gasp of rock, showering down dust and debris.

Later, in a brightly lit room back on the surface, Beicke from the mining consortium asks me what I thought of the mine. I tell him that it seems like an extreme environment for humans. “Yes,” he nods, “it is like an old world.”

An old mine car sits as an exhibit in the former Zollverein Mine Complex. Amelia Urry

A few days earlier, Beicke and I had trekked to the top of a hill outside the long-shuttered Ewald Mine in Herten, a half-hour drive from Bottrop. We climbed a set of stairs to a platform with a view over the whole region, the fenced-off or leased-out buildings of the old mine sitting below us.

The Ruhr Valley encompasses 53 cities of Germany’s once-formidable industrial heartland, including Essen, Bochum, and Oberhausen. The whole region was once low-lying riverland, but these days large hills rear above the landscape. These are the heaps of rock removed from the mines, tons of slag excavated with the coal and piled up. It’s a stark visual reminder of what’s been emptied out from underneath.

As the mines have closed down, most of these heaps have been covered with grass, and many have been crowned with a statue or other landmark. On one hill outside Essen, there’s a 50-foot steel slab by the sculptor Richard Serra; on another, atop other heaps, wind turbines stand like giant mechanical daisies.

Germany has been hailed as a leader in the global shift to clean energy, putting aside its industrial past for a renewable future faster than most of the industrialized world. The country has spent more than $200 billion on renewable energy subsidies since 2000 (compare that to the United States, which spends an estimated $20 billion to subsidize fossil fuel production every year).

In 2011, Chancellor Angela Merkel’s government announced the beginning of a policy of “Energiewende” to wean Germany off fossil fuels and nuclear power. In 2016, wind, solar, and other renewables supplied nearly 30 percent of the country’s electricity. The goal now is to hit 40 percent in the next 10 years, while slashing carbon emissions 40 percent below 1990 levels by 2020.

Amelia Urry

That transition has happened alongside attempts to restore the Ruhr Valley’s landscape. For every hill raised above ground level, there is an accompanying depression where the land subsided as coal seams were emptied out. The land here sank as the coal seams closest to the surface were emptied out. Overall, the region has sunk about 80 feet.

Streams that enter the Ruhr Valley are no longer able to flow out the other side, Beicke explains, and now water pools in places it never used to. The mining company is responsible for pumping that water away, as well as pumping groundwater across the region, to keep the water table below the level of the existing mines. Any contaminated water in the old mines must be removed and treated to keep it from polluting the groundwater.

These are just a few of the mining company’s “ewigkeitsaufgaben” — literally, eternity tasks.

“As long as 5 or 6 million people want to live in this area, we will have to do that,” Beicke tells me, of the expensive water management. “Maybe 2,000 years in the future that will change, but until that happens, well.” He shrugs.

The government gives the mining consortium 220 million euros a year in subsidies to deal with all the consequences of coal mining. Unlike in the United States, where aging coal companies often sell off their assets or declare bankruptcy to dodge clean up bills, here the mining company will be pumping and treating water long after it has stopped being a mining company at all.

Despite a national commitment to a broad energy transition, many now think that Germany will fall short of its renewable energy targets, thanks to a number of confounding economic and social factors, including the continued use of a coal alternative called lignite, also known as “brown coal.” Germans have the highest electricity costs in Europe, and the rise of the country’s extreme right-wing party in the last election has been pinned, in part, on those high bills.

If Germany does continue to progress toward its climate goals, much of the new energy is sure to come from wind power. Germany has more wind turbines than any other country in Europe, many of them installed in the last six or seven years. But wind doesn’t blow consistently, so this shift has been a challenge for the electrical grid. Even slight disruptions in the power supply can have wide-ranging consequences.

As more wind turbines are turned on, and more coal plants are retired, this problem will only get bigger, and the challenge of storing all that intermittent energy will be even more important. Here’s where the country’s retired coal mines might prove useful again — as giant batteries for clean energy.

To turn a coal mine into a battery, all you need is gravity.

OK, you also need a lot of money (more about that later), but the basic principle is gravitational. When you lift a heavy object, it stores the power used to lift it as potential energy until it’s released and falls to the ground.

Let’s say the heavy object you’re lifting is water. When you want to store energy, you just have to pump the water uphill, into a reservoir. When you want to use that energy, you let the water flow back down through a series of turbines that turn the gravitational rush into electricity.

A shaft tower above the Prosper-Haniel coal mine. Amelia Urry

This is the basic plan André Niemann and Ulrich Schreiber conceived when they were dreaming up new ways to use old mines. It seemed intuitive to the two professors at the University of Essen-Duisburg: The bigger the distance between your upper and lower reservoirs, the more energy you can store, and what’s deeper than a coal mine?

Schreiber, a geologist, realized it was theoretically possible to fit a pumped storage reservoir into a mine, but it had never been done before. Niemann, a hydraulic engineer, thought the proposal was worth pursuing. He drummed up some research money, then spent a few years conducting feasibility studies, looking for a likely site in the Ruhr Valley and running the numbers on costs and benefits.

After studying the region’s web of fault lines and stratigraphic layers, Niemann’s team settled on the closing Prosper-Haniel mine. Their underground reservoir would be built like a massive highway tunnel, a reinforced concrete ring nine miles around and nearly 100 feet high, with a few feet difference in height from one side of the ring to the other to allow the water to flow, Niemann explains.

At max storage, the turbines could run for four hours, providing 800 megawatt-hours of reserve energy, enough to power 200,000 homes.

The appeal of pumped storage is obvious for Germany. Wind and sun are fickle energy sources — “intermittent” by industry lingo — and energy storage can help smooth out the dramatic spikes. When the wind gusts, you can stash that extra power in a battery. When a cloud moves over the sun, you can pull power back out. It’s simple and, as the grid handles more and more renewable energy, increasingly needed.

The only problem: It’s expensive.

As wind turbine and solar technologies have become cheaper, energy storage costs have stayed high. Pumped hydro, especially, requires a big investment up front. Niemann estimates it would cost between 10,000 and 25,000 euros per meter of tunnel just to build the reservoir, and around 500 million euros for the whole thing. Right now, neither the government nor the energy companies in the Ruhr Valley are willing to make that kind of investment.

“It’s not a business, it’s a bet, to be honest,” Niemann says with a shrug.

In spite of the increasing unlikelihood of the proposal becoming reality, delegations from the United States, China, Poland, France, South Africa, and Slovakia, among others, have visited Niemann and Schreiber in Essen to learn about mine pumped-storage. Virginia’s Dominion Energy has been studying the idea with the support of a Republican state senator, and a group from Virginia Tech paid a visit the week after I did.

Here’s where any attempt to draw comparisons across the Atlantic gets complicated. In the United States, the federal government has been relatively hands-off in helping coal-dependent regions move on from the industries that fueled their way of life. In Germany, by contrast, there’s a broad agreement about the need to shift to renewable sources of energy. And yet, even with all that social, political, and economic foresight, important and necessary innovations remain stalled for lack of investment.

The Ruhr Valley is not Appalachia. And yet the two regions share key similarities that offer some important lessons about the a path to a cleaner, more sustainable future.

The view over the Ruhr Valley today. Amelia Urry

Dying industries take more than jobs with them. Towns built around a single industry, like coal mining, develop a shared identity. For many workers and their families, it’s not as simple as picking up and finding a new line of work when the mine closes. Mining is seen as a calling, an inheritance, and people want their way of life back.

That’s how residents of the Ruhr responded when coal jobs started to decline.

“For a long time, people thought the old times would come back, the old days would return,” says Kai van de Loo, an energy and economics expert for a German coal association in Essen. “But they can never come back.”

In the United States, of course, calls to bring back the old days often works wonders as a political sales pitch. Donald Trump campaigned for president on promises to stop the “war on coal” and revive the dying industry, and mining towns across the Rust Belt supported him.

In Pennsylvania’s Mon River Valley, home to a once-thriving underground mining complex bigger than Manhattan, mining continues to exert an oversized influence. Some 8,000 people work in coal in the state, a portion of the 50,000 coal jobs left in the United States. That’s a far cry from the 180,000 people who worked in the industry 30 years ago.

And the legacy of coal mining on the landscape is hard to miss. Bare slag heaps rise above the trees, dwarfing the towns beside them. Maryann Kubacki, supervisor of East Bethlehem in Washington County, says that during rainy spells the township has to shovel the gritty, black runoff from their storm sewers.

But without the federal government leading the way with financial support as it has in Germany, getting these former coal towns on a new track is a daunting task. Veronica Coptis, director of the Center for Coalfield Justice in Pennsylvania, says that organizing people to put pressure on mining companies is a delicate matter. People don’t want to hear that coal is bad, or that its legacy is poisoned. “We want an end to mining,” she says, “but we know it can’t happen abruptly.”

Back in Germany, the mayor of Bottrop, Bernd Tischler, has been thinking about how to kick coal since at least the early 2000s, long before the federal government put an end date on the country’s mining. An urban planner by training, Tischler has a knack for long-range strategy. After he took office in 2009, Tischler thought Bottrop could reinvent itself as a hub of renewable energy and energy efficiency. He devised heating plants that run off methane collected from the coal mine, and made Bottrop the first town in the Ruhr with a planned zone for wind energy.

In 2010, Bottrop won the title of “Innovation City,” a model for what the Ruhr Valley cities could become. Bottrop now gets 40 percent of its energy from renewables, Tischler said, 10 percentage points above the national average.

Describing this transformation, Tischler makes it almost sound easy. I explain that the issue of coal seems to track larger divisions in the United States, and so discussions inevitably turn heated, emotional.

“In Bottrop, the people of course feared for the process of the end of the coal mining,” he said. But Tischler believes mining towns have an advantage that can help them adapt to change: They’re more cohesive. In the mines, people are used to working together and looking out for each other. Distrust is dangerous, even deadly.

The Ruhr cities absorbed waves of Polish, Italian, and Turkish laborers over the years. And they’ve managed to get along well, knitting a strong social fabric, Tischler said. In the past few years, Bottrop, a town of 117,000 people, has resettled thousands of Syrian refugees in new housing.

A strong social fabric isn’t enough to survive the loss of a major industry, of course. Some promising industry — technology and renewables in Bottrop’s case — has to be found to replace it.

“I think the responsibility of the mayors and the politicians is to change the fear into a new vision, a new way,” he says. “You can’t do it against your people; you have to convince your people. You have to work together with institutions and stakeholders that don’t normally work together, [so that] we are sitting in the same boat and we are rowing in the same direction.”

This article has been republished from Grist.

Reporting for this story was supported in part by the Heinrich Böll Stiftung Foundation.

Categories: Blogs

Cape Town in crisis

19 February, 2018 - 16:00

Energy from wind, water from a spring: these resources are part of ‘the commons.’ No single person has a special right to them; they should be managed by the collective, for the benefit of the collective. The South African city of Cape Town is dealing with what looks like one of the biggest climate change-linked water crises to face a modern city. This is an opportunity for society to transition to a new, shared way of organising around increasingly stretched resources, writes Leonie Joubert.

When Cape Town’s taps run dry, they run dry for all. (Public Domain)

Threatened with thirst, Cape Town feels like it has gone a little mad.

Late on the night of February 16th, a man – a doctor, according to the eye witness – pulled a gun in a small crowd of people in line to collect spring water in a wealthy neighbourhood at the foot of Table Mountain. The city is facing emergency water rationing, so even the wealthiest are beginning to top up their limited municipal supply by collecting water from springs that tumble naturally from the ground around the base of this iconic mountain.

It started simply, as arguments do, but quickly escalated. This particular spring is on private property, but the homeowners decided to pipe an outlet into the street, and invited anyone to come along and collect water.

One man came to join the queue at about 10pm, but started moaning at a woman in the line about how tired he was of waiting to get ‘his’ water. She voiced her objection; things got heated; the man, who seemed ‘unstable’, pulled out a knife; someone else pulled out a gun. Apparently a ‘bohemian’-type woman stepped in and diffused the situation.

Cape Town residents now have to keep their daily water use to a maximum of 50l per person per day, as the dams run dangerously low following three years of unprecedented drought. Things are so bad now that the city has warned it may cut off water to homes and businesses in June, so it can trickle-feed what’s left in the dams to critical services like hospitals, and to the communal taps in the slum settlements. People in the ‘suburbs’ will have to collect a daily ration of 25l per person from 200 temporary water distribution sites around the city. Going on current dam levels, ‘Day Zero’ may arrive on 4 June, and could last three months.

When the city first warned that Day Zero was a ‘thing’, it notified the public that the military and police would be on standby to deal with any civil unrest that might result as people queued for water.

No one expected conflict to arise so soon, though, even before Day Zero came.

Sharing the ‘commons’

Cape Town, like Sao Paulo, Melbourne  and California in recent years, is at the frontline of crisis-managing water, as climate change threatens this resource. If taps really do run dry in June, Cape Town will, quite literally, shut down.

What this crisis, and the incident in the queue for the spring water both highlight, is the opportunity they present for society to find new ways of viewing and managing resources in these days of ‘late capitalism’.

Sacred Economics author Charles Eisenstein writes about how capitalism has conditioned us to believe that we live in a world of scarcity, and that each of us is a solo agent, competing with everyone else for scarce resources. The behaviour at the spring water queue demonstrates some of the worst manifestations of human behaviour when that belief takes root.

The environmentalist and thinker George Monbiot has been writing for years about the opportunity presented to us, as the system begins to fail and the environmental and health costs of extractive capitalism start to manifest themselves in so many forms (think about climate change, the hunger-obesity crisis, environmental degradation, the rise in mental health issues – all examples of the externalities of the modern, industrialised, capitalist world starting to count themselves into our accounting books).

The water coming from that spring, which now has even relatively well-off people coming to blows, comes from a natural water system that no single Capetonian owns. It’s a common resource that needs to be managed by the wider community, for the benefit of everyone.

The tricky thing with the city’s utility systems, is that while the water in it is a basic human right, as upheld by our Constitution, installing and maintaining the infrastructure that delivers that water to citizens still has to be paid for. While the city is obliged to make sure that every household receives a minimal free amount of water in order to be healthy. Once water demands in a household exceed that, it’s usually the wealthy who can afford to buy more than they need and, in times of such scarcity, can eat into reserves that should be fairly distributed to everyone.

The same applies to energy. The wind and solar energy that moves through the city each day should be freely available to everyone. But the technology to capture, store, and distribute that energy has to be paid for by someone. How will the state, and the wider society, organise itself so that even the poorest, who can’t pay, get the energy they need to not just survive, but thrive?

As the dams here run dry, there are still many homes in wealthy neighbourhoods that have water in their swimming pools, and are using well beyond their daily 50l ration, seemingly unaware or unconcerned that every litre squandered today, is a litre removed from the system when the taps run dry four months from now. And when they run dry for one, they run dry for all.

How the city decides to discipline wasteful users, and whether or not citizens choose to cooperate with each other to share water in these desperate times, only time will tell.

Categories: Blogs

Negative power prices: good or bad?

15 February, 2018 - 15:00

The New York Times says they are “positive for energy users.” But Germany’s newspapers Handelsblatt and Der Spiegel say that Germans are paying neighboring countries to take excess power off their hands. Who is right? Craig Morris investigates.

German power exports are more valuable than its imports, but that situation is likely to change for good soon (Public Domain)

There aren’t too many goods or services that you get paid to consume. So how do power prices go negative?

Basically, electricity is a rare commodity in two respects. First, it has no shelf life and is therefore consumed immediately. Second, power plants can’t always be easily stopped and started again like some other production lines. It may be cheaper for a power plant to pay you to consume more power than to ramp up and down.

But “you” probably don’t get paid to consume power. Negative prices only occur on the wholesale exchange. Retail customers, such as households and small businesses can’t buy there, so they don’t benefit. You only benefit if you are a large power consumer and can purchase wholesale power – and even then, only if you can use it at those times when prices are negative.

So when the New York Times writes that negative power prices are “positive for energy users,” that’s not really accurate. Indeed, Handelsblatt and Der Spiegel are perhaps more correct because ideally you want to keep hours with negative prices to a minimum. Paying people to take electricity raises costs overall.

More generally, however, all of these analyses fall short. Negative prices are useful as a market signal for demand shifting and storage, and they will become more common as shares of intermittent wind and solar power grow. More importantly, what matters is not a few hours, but the annual balance. And that looks quite different.

Because Germany still has so much excess generation capacity (too many conventional power plants), it is still able to export power when neighboring countries need it. Power demand in and around Germany is generally higher in the winter and lower in the summer. The chart below showing commercial power trading reveals more exports during the winter – at times of higher demand – than in the summer.

The table below, with power trading statistics for 2016 (the last year available) from the German Statistics Office DeStatis, shows the price impact. (Germany does not trade electricity with Belgium, though they share a border, and only exports to Luxembourg.) Germany not only exports some three times more electricity than it inports (78.3 TWh out, 27.4 TWh in), but the average price of a kilowatt-hour exported is slightly greater at 2.84 cents than of a kilowatt-hour imported at 2.70 cents.

I have marked the lower price averages in red. The only country Germany has a negative trade volume with (more kilowatt-hours imported than exported) is Sweden, but the average kWh price is slightly higher for exports than imports in this case – 2.36 versus 2.30 cents, respectively. The average value is positive for trading with Denmark, Austria, Poland, Sweden, and Switzerland. It is negative for France, the Netherlands, and the Czech Republic. The difference is less than 0.1 cents in each negative case, while it nearly reaches 0.9 cents in the positive case of Switzerland and is more than a cent with Denmark.

The French outcome is noteworthy. At the end of 2016, a third of its reactors were off-line, and the country was having trouble meeting its own domestic power demand. Just a few years ago, French power sold to Germany was much less valuable per unit than what Germany sold to France, largely because the French dump nuclear power at low prices on neighboring countries when demand is low to avoid having to ramp down its fleet further. Now, the price difference between the two countries has leveled off, with French prices slightly higher on average, but the volume of electricity Germany sells to France more than tripled, while imports from France to Germany were cut in half since 2014. The numbers for 2017 will be all the more interesting; how did the French shortfall impact trading with Germany?

Overall, German power exports are thus still more valuable than its imports, but that situation is likely to change for good soon. The nuclear phase-out will remove nearly 10% of dispatchable generation capacity by the end of 2022, and the push for a coal phase-out will take off even more.

Critics of the Energiewende view these hours of negative prices as evidence that Germany is dumping excess renewables on the neighboring countries, on whom it allegedly relies for grid stability. Clearly, the opposite is currently the case. But there may be more truth to that reading five years from now.

Categories: Blogs

Katowice: A European coal capital goes green

14 February, 2018 - 15:00

Nowhere in the EU is smog more suffocating than in southern Poland. This year, the polluted Polish mining city Katowice will host the COP24 climate conference. Ahead of that, change is in the air — and on the ground. Richard Fuchs takes a look.

This sniffer drone floats about the city’s roofs and chimneys and maps air quality. (Photo by Richard Fuchs, All rights reserved)

Talk to anybody in Poland about Katowice and you’ll hear the words mining, coal and steel. The city of around 300,000 in the southeast of the country sits in the heart of the Polish rust belt. It hosts the mining industry’s largest trade fair and is home to Europe’s largest coal producer.

On top of this, almost half of the 82,000 jobs in Poland that rely on coal production are found in Katowice’s wider metropolitan region of Upper Silesia. Little wonder then that coal is seen as the backbone of the Polish economy — even though mining has long since become a financial graveyard for taxpayers.

A climate conference in the heart of the coal lobby?

In Poland, coal is “not just something that you burn,” said Andrzej Ancygier from the think tank Climate Analytics. “Coal is to a large extent part of the Polish identity.” That is especially true in Katowice. Eyebrows were raised after the COP23 world climate conference held November 2017 in Bonn, Germany, when the Polish coal capital was chosen to host the next climate summit (COP24) in 2018.

Critics questioned if an end to fossil fuel energy could genuinely be negotiated in a region that has inspired coal production like no other in the country. Many environmentalists doubt that a climate conference held in the midst of the powerful Polish coal lobby can succeed. But Katowice is worth a second look. The city is changing at a rapid pace. It is becoming greener and more sustainable — in some surprising ways.

When researchers get active

Marcin Glodniok and his colleagues from Katowice’s Central Mining Institute are part of the shift. They are tackling one serious side effect of the coal economy: smog. Between November and April, a heavy veil of hazy smog often hangs over the city. It is, quite literally, a homemade problem. More than 80 percent of private households are heated with outdated coal ovens, sending dangerous particulate matter and soot into the air unfiltered.

The burning of low-quality coal and even household waste is common, further exacerbating air pollution. The result for residents, according to activists from Katowice Smog Alarm, is that every citizen breathes the equivalent of 1,711 cigarettes a year — involuntarily. Environmental engineer Glodniok and his team have developed a sniffer drone to help combat this.

Armed with sensors and cameras, it floats about the city’s roofs and chimneys and maps air quality. The flying patrol’s mission is to expose the worst pollutors. The goal is to “build awareness about the types of fuel that should be burned in their households, and how to prevent smog,” explains Glodniok.

When citizens get active

Change isn’t only happening in the air: others have decided to plant it in the ground. One environmentalist, a street artist who goes by the name Guerilla Partisan Witold, wanders through the metropolitan region almost every day, planting trees, bushes and flowers — wherever and whenever he wants.

The guerrilla gardener is particularly fond of orphaned green areas or bald-swept sidewalks. He calls himself a “garden partisan.” In the middle of the market square in Chorzow, a suburb of Katowice, he picks up his shovel, digs out a hole, and places a small spruce tree in the ground.

“I have no document to say that this ground is mine … so it is illegal,” says Witold during the digging. “But I see how plants grow up, I think it is good.”

“Not everything that is illegal is bad,” he adds.

The artist — lanky, in his mid-forties, sporting a goatee and beret — digs because he doesn’t want to wait for domestic or global politics. He knows more than a dozen citizens who are also active in the underground green movement. He believes there are more, and points out that a neighbor has followed suit.

Witold believes they are all working together for the greater good. “I do it for myself, because every day I cross this area three or four times, and I don’t like how it looks.”

“I have a real impact to an area where I live.”

When campaigners get active

Patryk Bialas is convinced that an energy transition in Katowice can be triggered by telling stories. He works at the Euro-Centrum technology park advising local companies on how to invest in energy-efficient and renewable technologies when constructing new buildings. He has become one of the faces of the energy revolution in Katowice.

Jobs are a central theme of his post-coal credo. The green electricity specialist believes the renewable energy sector in Poland could provide employment for 186,000 people in 2030. “If we compare that with the 82,000 jobs in the mining industry, it means there’s a concrete alternative for the already well-prepared miners.” Such stories are being told in many Western European countries.

But in Poland, skepticism over renewable energy continues to dominate. Critics say they are too expensive, or unreliable. Energy from wind, sun or biomass is often talked down — in part because it is praised so much in neighboring Germany.

As the mood in Poland has more more hostile to the European Union, the national conservative ruling party Law and Justice (PiS) has encouraged a nationwide mood against a fossil fuel phase-out. The Polish government wants to meet European climate targets with new “clean” coal plants. In spite of this, Bialas thinks the front against renewables is crumbling.

Interest in green technology has risen sharply. At the last regional economic forum, the number of exhibitors in the field of renewable energy cleanly doubled in a single year. Meetings for adapting to climate change are being held in Katowice’s town hall, and there is a subsidy program for replacing old coal-fired heaters with newer systems — preferably powered by renewable energy.

According to Bialas, all this represents the first steps toward an energy turnaround. “Hopefully, the change will go much quicker than in Germany — but we do need a little more time.”

Model for coal regions

The mayor of Katowice, Marcin Krupa, is grateful for these changes — even if he may not officially express sympathy for the guerrilla gardeners. Krupa is convinced that the former coal-mining area can become a city for congresses and cultural events, comparing development in Katowice to that of Germany’s industrial Ruhr region.

Inside a special cultural zone sits the International Congress Center, where the COP24 summit will take place. “This venue has been created to change the image of Katowice,” Krupa said. Marek Rosicki from the environmental consulting firm Atmoterm in Opole sees the whole affair as less ambitious.

Katowice is a model city for a simpler reason, Rosicki thinks. “The carbon economy in this region is the reality — and will be over the next couple of years. So it’s a good place to discuss what to do with coal-based regions.”

Richard Fuchs is a freelance reporter in Berlin and specializes energy, environment and climate policy.

Research for this story was supported by a grant from the Heinrich Böll Foundation. The article was first published at Deutsche Welle and then at the Böll Foundation website.

Categories: Blogs

France to close five nuclear reactors?

12 February, 2018 - 15:00

Without any official announcement having been made, French nuclear reactor operator EDF seems poised to close up to five reactors next year. What will this mean for the French energy market? Craig Morris investigates.

Nogent and four more plants will only be restarted “if economically justified” (Photo by François Goglins, edited, CC BY-SA 4.0)

You would think, given French plans to transition from nuclear to renewables, that the sudden possibility of five reactors closing in a single year would draw some attention. The country has 58, so the closure of all five would equal 9% of the total. And although the original transition plan was adopted in 2015, not a single reactor has yet been closed – making five at once all the more striking.

Over at EDF’s website, downtimes are published. For Flamanville 2, Golfech 1, Nogent 1, and Tricastin 2, there are announcements of “modulation weeks” scheduled for the beginning of 2019. So far, so normal – but then there is the following sentence:

The positioning of this modulation week is provisional: it will be reassessed and the plant will be restarted if economically justified.

This sentence is highly unusual and probably unprecedented. Apparently, EDF is considering keeping these four nuclear reactors closed because of economics.

That doesn’t mean they will close; it’s possible that the company is just jockeying for better terms. In 2017, wholesale futures prices for baseload in 2020 came in at around 35 euros per megawatt-hour; extending the service lives of France’s aging fleet from 40 to 50 years has been estimated to require a price of at least 55 euros.

By declaring these reactors economically unfeasible, EDF could pull some generation capacity off the market, thereby boosting wholesale prices for the remaining fleet. This step could then also be spun as part of the country’s energy transition to renewables. But nothing at all has been reported about this matter. In the only relevant coverage on the web, Platts merely states that the French nuclear power production fell “to a record low” in the fourth quarter of 2017, and that the four reactors mentioned above will be taken off-line it this summer for “additional fuel-saving outages.” No mention is made of possible permanent closures in 2019. I could find no reports at all in French.

The fifth EDF reactor in question is Paluel 2. During an upgrade, when the facility was off, a 465-ton generator fell off a crane within the facility in March 2016, causing an earthquake. Reuters reports that the reopening scheduled to take place in April has now been postponed to June 2018, but EDF’s message leaves even that prolonged date open: “The duration of unavailability revised and may change according to multiple assessments and ongoing works.”

By law, French reactors automatically close permanently if they have been down for two years. In the case of Paluel 2, the postponement would put it beyond that deadline. But the French government saw this mess coming; last April, the (former) Environmental Minister Royal extended the deadline by another two years in a decree (in French). The law currently allows an extension of up to three years. As the French press reported (in French) at the time, the reactor was originally to be put back into operation in March 2017 – the month before the decree – but the date had been postponed to August and then subsequently to November 2017. The restart of Paluel has thus been postponed four times.

That report calls the accident “spectacular and unprecedented” and adds that postponing the deadline for reopening a reactor in order to prevent a permanent shutdown – the report was published a month before the decree – would also be “unprecedented.”

A sixth reactor is also in question. This one, Fessenheim, was expected – six years ago – to be the first one to be closed, but only in exchange for a new EPR reactor at Flamanville (which has yet to open). But even without Flamanville, the closure of Fessenheim is proving difficult. In January, French President Macron appointed Ecology and Solidarity Undersecretary Sébastien Lecornu to decide on the matter (report in French), a sign that the decision is highly political.

In official statements, EDF remains adamant about keeping all reactors open. At the end of January, it announced that no other reactor should be closed after Fessenheim until 2029 (report in French). But just days later, it quietly volunteered to shut down four reactors on economic grounds in 2019.

EDF did not respond to requests for comments for this report.

Craig Morris (@PPchef) is the lead author of Global Energy Transition. He is co-author of Energy Democracy, the first history of Germany’s Energiewende, and is currently Senior Fellow at the IASS. Hat tip to Juri Hertel for story.

Categories: Blogs

Hawaii recognizes constitutional right to safe climate and environment

9 February, 2018 - 15:00

Hawaii’s highest court took an important step in December to hold the state’s agencies accountable for transitioning away from fossil fuels as it affirmed the state’s constitutional right to a clean environment. The ruling cheered environmental activists at the end of an otherwise stressful year, writes Dana Drugmand.

The Department of the Navy, Pacific Energy Solutions, Hawaiian Electric Company and the Hawaii State Energy Office celebrated the completion of a 14.3 megawatt (MW) direct current (DC) solar facility. (Photo by NAVFAC, edited, CC BY 2.0)

In deciding a case involving a power purchase agreement (PPA) between Maui Electric Company and Hawaiian Commercial & Sugar Company, the Hawaiian Supreme Court not only handed a a victory to the Sierra Club of Hawaii, which claimed that the state’s Public Utilities Commission had ignored citizens’ environmental rights, it gave teeth to a statute requiring the state to transition to 100 percent clean energy by 2045.

“It is vital that citizens have a seat at the table as Hawaii advances toward 100 percent clean energy,” saidEarthjustice attorney Kylie Wager Cruz, who brought the case on Sierra Club’s behalf. “The Court provided much-needed confirmation that the Commission can’t simply rubber-stamp utility deals without considering and protecting the public’s constitutionally protected environmental rights.”

The dispute arose over a 2015 decision by the Public Utilities Commission that allowed continuation of an existing PPA with the sugar company, which operates a fossil-fuel burning power plant in Puʻunene, Maui. The plant, which sourced approximately 25 percent of its fuel from coal and petroleum, was found to be liable for over 400 violations of the Clean Air Act.

The Sierra Club asserted a due process right to a hearing, which the commission twice denied, and the state’s Intermediate Court of Appeals initially ruled against it. The state Supreme Court overturned that ruling in December.

The high court found that the Sierra Club had asserted a valid property interest in a clean environment as guaranteed by Article XI, Section 9 of Hawaii’s constitution, and had a due process right to a hearing. In its opinion, the court notes that a healthy environment “is a substantive right guaranteed to each person,” and that “this substantive right is a legitimate entitlement stemming from and shaped by independent sources of state law, and is thus a property interest protected by due process.”

The court also affirmed the utilities commission’s responsibility to act in accordance with a state law amended in 2011 that makes it “mandatory for the Commission when exercising its duties to recognize the ‘need’ to reduce reliance on fossil fuels and to ‘explicitly consider’ the levels and effects of greenhouse gas emissions. Hawaii also later passed a law in 2015 that commits the state to transition to 100 percent renewable energy by 2045.

The ruling also resolves a long-running battle  by environmental groups to take part in commission proceedings.

“The Commission can no longer ignore us. We will continue to oppose dirty fossil fuels and push for a just transition to clean, renewable energy in our state,” said Sierra Club of Hawaii Director Marti Townsend.

Constitutional Environmental Rights – Growing Trend?

Hawaii is one of a handful of states with environmental rights provisions in their constitutions. Internationally, those are much more common, with more than 170 countries guaranteeing some form of a safe environment. A recent decision by Ireland’s highest court recognized for the first time a personal constitutional “right to an environment that is consistent with the human dignity and wellbeing of citizens.” High courts in several U.S. states have issued rulings affirming those states’ constitutional environmental rights as well.

“There have been very strong decisions from Hawaii, Pennsylvania and Montana,” said Jack Tuholske, a Montana-based lawyer and law professor with Vermont Law School. In Montana, he explained, the case involved discharge of cyanide-tainted water from a mining project.

In the Pennsylvania case, the court overturned the state’s pro-fracking law, which prevented local governments from regulating the practice, based on the right to a clean environment. That 2013 decision issued was a legal victory for the Delaware Riverkeeper Network, led by activist and author Maya van Rossum. Inspired by her work with the Delaware Riverkeeper Network, van Rossum calls for constitutional amendments at the state level to protect the environment, enshrine our rights for clean water and clean air, and hold polluters and fossil fuel companies accountable.

“My work in advancing a Green Amendment movement is very much focused on encouraging all states to include the right to a healthy environment in the declaration of rights section of the constitution so that it cannot be a toy to the politics of the day,” van Rossum told Climate Liability News via email.

Securing environmental rights through state constitutions may be one way to push back against the federal government’s rollback of climate policies and environmental regulations. “States are taking their own stands on climate change, and the state constitution is something that Donald Trump can’t undo, or the Congress can’t change it,” said Tuholske.

Landmark Ruling, or Important Step?

Amending a state constitution to include the right to a clean and healthy environment is just the first step in the process. Courts have to uphold that right in order to make it enforceable and meaningful. Then there is precedent to guide decisions.

“Once you give this environmental constitutional right meaning, and strength, then it can be applied in a variety of new and different contexts,” Tuholske explained. Constitutional rights and their meaning evolve over time, he noted. “So decisions like the one in Hawaii are another important step.”

Michael Burger, executive director of the Sabin Center for Climate Change Law at Columbia University, said the Hawaii decision has a narrower meaning.

“It’s not one of these holdings that broadly stands for the proposition that there’s a constitutional right to have climate change considered in state decision-making,” he said. “It’s more of a narrow procedural decision specific to Hawaii than a broad declaration of the nature of constitutional rights. But it’s certainly a critical decision for Hawaii and for that state’s energy policy moving forward.”

While it may not be a landmark ruling, Burger, van Rossum and Tuholske agree that the Hawaiian Supreme Court’s interpretation of the state’s constitutional environmental right is nonetheless notable.

“Rather than use its power to limit the use of the state constitutional provision for definition and protection of environmental rights, the state Supreme Court took the opportunity to strengthen it,” said van Rossum.

“It’s a very important decision,” Tuholske added. “Citizens and judges look to see what other courts are doing. Hawaii is, I think, in some ways way out in front and is a leader for environmental constitutional provisions.”

This article was originally published at Climate Liability News.

Dana Drugmand is a freelance journalist and reporter for Climate Liability News. She recently earned a Master of Environmental Law and Policy degree, with a certificate in Climate Law, from Vermont Law School. See more of her writing at https://www.clippings.me/ddrugmand.

Categories: Blogs

Share of German citizen renewable energy shrinking

7 February, 2018 - 15:00

Unexpectedly, Trend Research have updated their controversial study from 2013. The share of citizen investments in renewables remains high but has clearly fallen. So what was the controversy? Craig Morris investigates.

Citizen’s projects began the German Energiewende, but times are changing (Photo by MrRenewables, edited, CC BY-SA 3.0)

Let’s go ahead and start with the new data up to 2016 in Trend Research’ study published in December 2017. You can get it here for a mere 2,500 euros. One industry insider told me that no one contracted the study, and I have found no one who saw it coming; Trend Research merely had the data and were able to produce an update after four years – hence the price tag.

We see here that citizens (households and farms) still made up 42.5% of investments in renewables up to 2016 (the numbers are not for 2016 alone). Utilities, which made up around 90% of investments in energy generation infrastructure just two or three decades ago, now make up less than a sixth (15.7%). And the “Big Four” German utilities who used to cover 75% of the market only account for 5.4% of investments in renewables. Indeed, the very term “Big Four” is increasingly outdated not only because of this small share of investments, but also because the two biggest ones, RWE and Eon, have each split into two separate companies: one with renewables and the grid, and the other with conventional fossil and nuclear assets.

The “business sector” is another newcomer one might consider adding to an extended definition of “citizen energy.” These companies can be everything from family-owned local shops to grocery store chains that have added solar roofs (such as Aldi, also known as Trader Joe’s in the US) – or BMW’s four utility scale wind turbines on the side of the production plant that manufactures one of its electric vehicles.

Four modern wind turbines installed at BMW’s electric car manufacturing plant in Leipzig (2013). Photo by Christoph Busse

But if businesses outside the energy sector might also be considered citizen energy, what about project developers? In recent auctions, they won 90% of the capacity tendered under the new definition of “citizen projects.” But here’s where the problem starts: no one was happy with that outcome. Other developers felt disadvantaged by the new rules, and true citizen projects complained that project developers had merely put together a group of strawmen as a front organization for eligibility under the rules for citizen projects – they weren’t considered genuine.

And that’s just the beginning: international comparisons are practically impossible – at least, I haven’t seen any attempts at similar charts outside Germany. But in all likelihood, more than 40% citizen ownership (however defined) is probably one of the highest levels anywhere.

The original study from 2013 with data from 2012 was somewhat controversial from the beginning. The chart circulated at the time (our rendition of it is below) backfired for some campaigners. At a time when German energy policy began to favor big players and sideline citizen energy, they appealed to the European Union for greater support – only to be told, as one insider told me back then, “what are you complaining about? Half of the renewable energy in Germany is owned by citizens!”

We see that the share of citizen energy has fallen from 47% at the end of 2012 to 42.5% at the end of 2016 (again, cumulatively, not for those years alone). In 2016, we attempted – based on quite limited data – to show the pushback against citizen energy. In the chart below, we compare the Trend Research data for all years up to the end of 2012 with 2015. Citizen energy had fallen to 25% that year.

Unfortunately, no one at Trend Research responded to my query for this report. But once this data gets circulated, the impact will probably be the same: foreign onlookers will be amazed at how much renewables belong to citizens in Germany even as that share rapidly decreases.

The attempt to protect citizen wind projects had the unintended outcome of project planners setting up groups of strawmen, so the preferable treatment of such projects in auctions is to be done away with. At the beginning of February, the German Bundesrat (the upper chamber of parliament) officially advised the Bundestag (the lower chamber) to lift this preferable treatment for the next year and a half (report in German).

In terms of power generation, the only remaining legal support for citizen energy projects is the new law allowing households to sell electricity to each other – a topic so complicated it would need its own blog post (or you can start with CLEW’s overview here).

Categories: Blogs

High German power prices, low monthly bills?

5 February, 2018 - 15:00

According to the most recent data, German retail power rates are the highest in the EU along with Denmark’s. The monthly power bill is, however, exaggerated in reports. Craig Morris investigates.

Average German power bills are consistently overestimated (Public Domain)

After years of coming in second behind Denmark, Germany has apparently closed ranks and is now tied with the Danes in the unpopular competition for the highest retail power rates in Europe. According to “Strom Report” (based on Eurostat data), Danish and German retail consumers paid 30.5 Euro cents for a kilowatt-hour of electricity in 2017.

Source: Strom Report

However, the numbers are estimates; slightly different ones are also circulated. Consumer portal Verivox, for instance, put the average price in 2017 at 28.18 Euro cents (in German). Whatever the exact number is, Germany is certainly near the top.

Estimates for the average power bill are also circulated but seem systematically exaggerated. For instance, the German article linked to above comes to a monthly power bill of 93.93 euros based on 4,000 kWh of consumption annually. That figure is even higher than the usual 3,500 kWh annually for a “three-person household” – the metric usually used by German utility umbrella organization BDEW (in German).

Both estimates are significantly too high

Germany has an estimated 41 million households and a population of 82 million people, putting the average number of people per household at exactly two. A three-person household is larger than the average.

More importantly, the number of kilowatt-hours consumed in residential buildings is also considerably lower. In the chart below, we see that German households consume some 130 TWh of electricity annually. Divide that by 41 million households, and you get 3,171 kWh. At 30.5 Euro cents per kilowatt-hour, the average German household thus spends 967.07 euros on electricity annually – and 80.59 euros monthly.

Now here’s the fun part: the EU does not gather statistics on monthly residential power bills, so we cannot easily compare. “Strom Report” tries to put the matter into context using the data available, so we see that German retail power prices (not bills!) are in the middle of the field once account is taken of purchasing power. But even that comparison does not take account of actual spending – the bills, not just the prices. I have also written here about households not being able to pay their energy bills, and once again Germany does not perform so poorly. And note that “energy bills” concern more than just electricity: heating oil, natural gas, etc.

For comparisons of average German power bills with those in other countries, you would therefore have to perform the entire calculation above for each country: find out the amount of electricity consumed by households, divide that by the number of households, and then multiply that amount by the price.

It’s rather exhausting work – more suitable for a complete study than a blog post – so I merely refer you to our comparison of German and US power bills with data from 2013. With generally the same creature comforts, German power bills are roughly in line with those in the US after an adjustment is made to remove consumption for air-conditioning, which German households don’t have (or need).

Why is all this so important?

The distinction between prices and costs (bills) is crucial because high prices are an incentive for efficiency and conservation, both of which are integral to the energy transition. Obviously, the debate about retail power rates in Germany is contentious. Specifically, energy-intensive industry is partly exempt from grid fees and the renewables surcharge, leaving households to shoulder more of the burden. The design of power prices in Germany is not ideal, and there are good arguments to be made for lowering the retail rate in particular.

But high prices are not the end of the world either, at least not in wealthy countries like Germany. For instance, roughly three quarters of the price paid for gasoline in many European countries is taxes. High prices at the pump have steered consumers towards more efficient cars, as a comparison with the US shows. Likewise, Germans pay more attention to power consumption when purchasing appliances because they know that their power prices are high.

However you come down on the issue of how high electricity rates should be, I think we can agree on one thing: German media and utility organizations should stop overestimating the average monthly power bill in Germany.

Categories: Blogs

When is the grid “full”?

31 January, 2018 - 08:03

The new governing coalition taking shape in Germany aims to build a lot more solar and wind “if the grid can absorb the electricity.” Craig Morris spoke with German experts, and no one could tell him what that means.

How do you tell if the grid can take more renewable energy? (Public Domain)

Recently, I wrote about the latest negotiation results for a new German government. On Sunday, the Social Democrats adopted the proposal for a new grand coalition – a repeat with the Christian Democrats – albeit with a lukewarm 56% of voting members. The country is now set to get a continuation of the old coalition that few seem to want, including the coalition partners themselves.

But the new grand coalition will not be the same as the old; the platforms differ. The ambitions for renewables and climate protection are greater than before, though details are still lacking. For instance, an additional 4 GW of solar and 4 GW of wind are to be added by 2020 “if the grid can absorb the electricity.” How do you tell whether the grid can take more?

Negative prices and “EinsMan”

There are two potential starting points: negative power prices and curtailment of renewable electricity. The latter is referred to in German as “EinsMan,” which is short for “feed-in management.” Let’s take each of these in order.

The number of hours with negative power prices has been on the rise over the past few years, as shown below. But this metric only indirectly pertains to grid capacity; it more precisely shows cases when demand for power from conventional plants drops so low that it becomes cheaper (because of technical constraints) for these plants to pay customers to off-take electricity to avoid ramping down further.

Source: Energiewende 2017 State of Affairs

Furthermore, negative prices apply in the entire price zone for both the German and Austrian grids. There is only one price signal then for this entire area, but grid congestion occurs locally, not across all of Germany and Austria at once. Here, we need to revert to a more precise metric: “EinsMan”. Grid operators are allowed to curtail electricity from wind, solar, biogas, cogeneration, and mine gas when specific sections of the grid are endangered.

The amount of renewable electricity curtailed skyrocketed from 2013 to 2015. After falling in 2016, it rose again slightly in 2017 according to preliminary figures.

The green line represents the total amount of renewable electricity curtailed; it never reached 1% of total German power generation (around 6,000 GWh). Most of the curtailed electricity is on shore wind power (blue line); little solar is curtailed (yellow line) probably because much of it is connected at the low-voltage distribution level, whereas curtailment occurs at the high and medium-voltage levels. Schleswig-Holstein is the state where most curtailment occurs (dotted line). Source: Ubimet.

Ubimet, a service provider, already visualizes the EinsMan data, which are available by postal code, and combines them with weather data, renewable power forecasts, standard load profiles, grid topology, and load flow calculations to produce a forecast. Policymakers don’t even need the forecast, which wouldn’t be available for a whole year anyway; the data for the previous year could be used to show where grid congestion occurs, and wind farms could be excluded from auctions within that postal code unless the grid had been expanded in that area.

But no one I spoke with expects this to happen. Angela Pietroni of think tank Energy Brainpool says the requirement for grid capacity could just be “a loophole to limit the auction volumes.” To make matters worse, Andreas Jahn of the Regulatory Assistance Project (RAP) says that there is a lack of transparency in grid data in general, including with re-dispatches – when the grid operator requests that a conventional plant change its output immediately to stabilize the grid. (See our previous report entitled Blacked out German grid.) But he also points out that most wind and solar are connected at lower voltage levels on the grid; re-dispatches take place at higher levels.

The question of transparent grid data is entering the foreground in Germany. Over at Energy Post, Jahn sums up the main issues, including a ruling by the German Constitutional Court last year that revenue from the grid must be more open. The case was brought by green power provider Lichtblick, which points out that grid fees are now the biggest single part of retail power prices – and it’s hard to verify these fees independently. Grid operators are considered natural monopolies; as such, they propose prices to regulators, who need transparent data to confirm proposed fees. “Withholding relevant data is a violation of EU law,” he adds.

In other words, Germany could make the construction of new renewable energy projects more advanced by discouraging, if not ruling out, new builds in areas with a defined level of grid congestion – we have the data. Alternatively, policymakers could use grid congestion to incentivize local electricity-to-heat; the excess green power would then not be curtailed, but used as a heat source. Section 13, para 6a of the 2017 Energy Management Act (in German) is a starting point but doesn’t yet apply to wind and solar.

Whether the current debate over the transparency of grid data will help or hamper such advances is anyone’s guess at present.

Categories: Blogs

Community choice energy drives renewable growth in California

29 January, 2018 - 15:15

Community choice aggregation, a tool to encourage greater choice and local control, is coming into its own in California and driving significant growth in clean energy.  In other states, it’s a different story. Ben Paulos takes a look.

Workers from RichmondBUILD install solar panels (Photo by MCE Clean Energy)

As communities across America seek to take climate action into their hands, they are finding that community choice aggregation can be a powerful tool – though not all towns are willing to use it, and not all willing towns have access to it.

California is at the vanguard of the community choice movement, and it is driving major growth in clean energy.

Community choice aggregation, or CCA, is a process where locals form a group to buy their own energy. It was authorized by the legislature in 2002, but was delayed by years of wrangling. Marin County was among the first to start the process of creating a CCA, but was hindered by the utility PG&E.  In 2010, PG&E spent $46 million on a ballot initiative to weaken the law, and lost.  Marin Clean Energy launched the same year.

There are currently nine active CCAs in California with another dozen in the works, but the number could rise as high as eighty, according to state officials.

Most are motivated by a desire to go green faster than state policy dictates.  Current state law requires utilities to reach 33% renewables by 2020 and 50% by 2035, but currently active CCAs already exceed those targets.  Silicon Valley Clean Energy, serving towns like Cupertino and Mountain View – home of Apple and Google – is the first to be 100% renewable.

Silicon Valley Clean Energy – Your New Community Electric Provider from SVCE on Vimeo.

San Diego

The biggest battle currently is in San Diego.  The city adopted a Climate Action Plan in 2015 that calls for a 50% cut of all greenhouse gas emissions by 2035, 100% renewable electricity, and various efficiency, waste management, and transportation measures.

Local activists have pushed both the City and the County to use CCA to meet the renewable energy goal, arguing that San Diego Gas & Electric (SDG&E) couldn’t be trusted with the task.

“There doesn’t exist another viable way for the city of San Diego to get to 100% other than to be in control, and community choice offers this proven model,” said Nicole Capretz with the Climate Action Campaign.

The County declined in February to launch a CCA program, but the City is still considering it.

Long a laggard on clean energy, SDG&E has changed its ways, becoming the first investor-owned utility in the state to reach the 33% landmark (five years ahead of the 2020 schedule under state law).  The utility is now at 43%, not counting the 36,000 rooftop solar systems installed by their customers, making San Diego one of the biggest solar cities in the US.  By 2021 SDG&E expects that 52% of the energy received by San Diegans will come from renewables.

In late October SDG&E filed a proposal with the City to meet San Diego’s 100% renewable energy goal. Under SDG&E’s plan, the utility would work with civic leaders to shape their renewables procurement, and let customers choose different levels of renewables, above the state-mandated level, just as CCAs do.

Capretz was not impressed.  “This is not a serious proposal, much less a viable, vetted or feasible plan,” she told the San Diego Union-Tribune. “It’s just another delay tactic to deny San Diegans choice and keep us tethered to an outdated monopoly.”

Thirteen other companies have also expressed an interest in working with the City.

One big wildcard for CCAs is the size of an exit fee that utilities are able to charge departing customers to cover the cost of past contracts. State regulators are pondering the charge now.  If it is high, it will undermine the economics of CCAs, eroding their ability to deliver more renewables at a lower cost.  While California consumers are certainly green, they are also price sensitive, and may balk at a big bill increase.  SDG&E points out that no exit fees would be necessary under their proposal to San Diego.

Meanwhile, the state legislature is considering a bill (SB 100) that would increase the RPS goal to 60% by 2030, and to 100% from renewables and zero-carbon resources by 2045.

The combination of higher exit fees and higher mandatory state renewable energy goals, plus SDG&E becoming more aggressive in pursuing renewables, could undermine the rationale for a San Diego CCA.

Other states with CCAs

California is currently the hot spot for CCA, but six other states offer it.

Illinois has been the most active, where at one time 80% of the residential load was served by over 600 CCAs.  The rapid uptake in Illinois was due to a brief window of time where CCAs could guarantee savings compared to the default utility rate.  But as the default rate fell, the savings evaporated and most CCAs shut down, sending their customers back to the utility or to choose from a competitive power supplier.

CCA is growing in Massachusetts, where 128 cities and towns have authorized it.  The largest, Boston, authorized CCA in October through a vote of the City Council.  But Mayor Walsh’s office expressed some doubts about it, saying CCA is “a very powerful tool” but “it can be a very expensive tool.”

Unlike in California, renewables are only part of the push for CCAs in Massachusetts. While many towns let consumers choose an all-green option, only a handful of towns have opted for slightly higher levels of renewables in their basic plan, due to fear of higher costs. “Five percent is the magic number,” according to the Mass Energy Consumers Alliance, an advocacy group. “It supports more renewable energy on our power grid while keeping the new aggregated supply rate competitive with what the electric utility is offering.”

States without CCAs find it tough

CCA offers an easy way for communities to take control of their energy use without the trouble of creating a municipal utility.  Under this “muni-lite” approach, a CCA does not own or operate the equipment needed to generate or deliver the power, but does choose the fuel sources and set some policies.

In states without a CCA option, communities pushing for greater local control are finding it difficult.

The poster child is Boulder, Colorado.  Frustrated by the heavy reliance on coal of their investor-owned utility, Xcel Energy, and inspired by the Kyoto Protocol, Boulder has been working to create a municipal utility since 2002.  The effort barely survived a referendum on November 7, when voters approved another $16.5 million in funding for legal and engineering fees by a margin of only 1000 votes.

Another Colorado city, Pueblo, is finding itself on a similar path. In February the city, home to a major wind turbine manufacturing plant, pledged to go 100% renewable by 2035.  But they are served by a monopoly utility, Black Hills Energy, that has repeatedly raised rates in recent years.

“We thought Black Hills was going to be a good corporate citizen of Pueblo,” Councilman Larry Atencio said at a September 25 City Council meeting. “They have not been.  They have gouged us. They have taken advantage of us. They have gone over and above being a corporate robber of the citizens of Pueblo.”

With the city’s franchise agreement with Black Hills expiring in 2020, the City Council voted unanimously to start looking into municipalization, with a $250,000 budget for research.

William McEwan, the city’s energy advisor, told the Council, “I truly believe the long-term solution for Pueblo ratepayers is a municipal utility, but its a tough, tough process.”

Categories: Blogs

Is the UK a better role model than Germany for carbon reduction?

25 January, 2018 - 15:00

More than Germany, the UK has reduced coal power and carbon emissions in recent years. Should we be talking more about the British model and less about the German one? More specifically, does Germany missing its 2020 carbon target put the country’s 2030 target completely out of reach? By Craig Morris.

The sun is setting on coal in the UK – what about Germany? (The joy of all things, edited, CC BY-SA 4.0)

Back in 2008, both Germany and the UK pledged an 80% reduction in carbon emissions by 2050 in the run-up to COP15 in Copenhagen. The British have performed better since then. An excellent overview of the UK’s power sector in 2017 by Carbon Brief shows that coal power dropped from 143 TWh in 2012 to a meager 23 TWh last year – a reduction of 84% – primarily due to the country’s floor price for carbon, which reached 23 pounds per ton last year. Germany only reduced coal power by 13% from 277 TWh to 242 TWh during the same timeframe.

Source:  Energiewende 2017: state of affairs

And while Germany continues to phase out coal gradually and without a roadmap, the British government announced this month that all remaining coal plants in the country would be closed by 2025. As of 2016, the UK had reduced its carbon emissions by 36% relative to 1990. Germany is likely to come in closer to a 30% reduction by 2020, far behind its 40% target. To reach 55% by 2030, the country would therefore need to lower emissions by 2.5 percentage points annually throughout the next decade.

But there are reasons to be skeptical of British progress – and more optimistic about Germany. For the UK, the story starts with this take from Carbon Brief: “The 84% coal reduction over the past five years accounts for around 80% of the fall in overall UK carbon emissions over the same period.” In other words, like Germany, the UK has made too little progress outside the power sector. Put differently, the British have already picked their low-hanging fruit, while Germany’s is still on the branch. Consider the following:

  • The economic case for the British transition from coal to gas: The UK imported coal but had affordable domestic gas reserves, still covering more than half of demand. Germany has coal, not gas.
  • No jurisdiction with a coal phaseout has significant domestic coal reserves. As Canadian Prime Minister Trudeau put it, “No country would find 173 billion barrels of oil in the ground and just leave them.” Germany has lignite reserves that, depending on the estimate, could provide a fifth of German electricity at less than four cents for the rest of this century. Leaving that in the ground is a political challenge.
  • Manufacturing makes up 23% of German GDP but only 11% in the UK. Energy-intensive business interests that oppose a coal phaseout are thus smaller in the UK, which helps explain the British success in implementing a carbon floor price.

Looking ahead, British and German plans also differ considerably. While Germany has made up its mind to go with renewables, the British still consider nuclear – including new reactors – to be necessary and have not given up on carbon storage. 2018 is also expected to be a breakthrough year for fracking in the UK. Potential conflicts between these options, especially inflexible nuclear to complement fluctuating wind and solar, are not addressed in the British debate but will become unavoidable.

In addition, Scotland is not playing along with Westminster; the Scots have banned fracking and aim to meet 100% of gross power consumption with renewables by 2020. The British thus lack a common vision, so expect a political back-and-forth. Most importantly, what’s missing from all of these plans is a massive renovation scheme in the building sector along with, for mobility, the construction of charging stations for EVs and a focus on walkable cities.

Germany is also doing too little with buildings and mobility but should make considerable progress in the power sector by 2030. The nuclear phaseout will remove all nuclear reactors by the end of 2022, thereby drawing down the surplus capacity causing record exports. (In 2017, British wholesale power went for 5.2 cents compared to 3.4 cents in Germany.) Coal power will immediately plummet without exports, and the further growth of renewables will push it back even more.

Germany could reduce its power generation from brown coal (lignite) by 38% from 134 TWh to 83 TWh if electricity exports and imports would be balanced like in 2011.
50 TWh less electricity from brown coal would save 60 million tonnes of CO2. pic.twitter.com/QWxHYS4xND

— Bruno Burger (@energy_charts) January 9, 2018

The 2020s will therefore see the beginning of Germany’s coal phaseout with or without an official policy. That decade, German emissions are likely to drop faster than the UK’s – unless the British come up with a plan to pick the higher fruit of buildings and mobility. A 55% carbon reduction in Germany by 2030 will be hard to reach but not impossible – even with the nuclear phaseout.

Finally, let’s not forget that climate change is not the only issue, as important as it is. Prime Minister Thatcher devastated coal communities decades ago, and those in northern England just voted for Brexit. The UK is divided not only in the energy sector; the British still debate who they are. While it was bad for the climate, Germany’s commitment to coal regions in the past few decades was at least good for social cohesion, without which no energy transition is possible.

Categories: Blogs

Local Energy Unions can reconnect Europe

24 January, 2018 - 15:00

The European Union’s energy policies have favored national providers and structures for too long. For Europe to re-connect and meet its Paris goals, the European Union must empower citizens to build cross-border local energy unions.  Anna Leidreiter and Radostina Primova explain.

Increased efficiency targets are a good step, but it’ll take more than that to reunite European citizens (Public Domain)

As part of the negotiations on the Clean Energy Package for All Europeans, the European Parliament (EP) voted to increase the EU´s 2030 renewable energy and energy efficiency targets to at least 35%. The EP also backed a long term target of achieving ´net zero´ carbon emissions by 2050.  By January 2019, Member States are now expected to develop long-term strategies on how to reach the target of net zero GHG emissions by 2050.

We already know today that this requires a massive transformation of Europe’s economy, with much more ambitious decarbonisation trajectories than those currently in place. The crisis-stricken continent needs to come together again and reunite its citizens for the European vision.

For this, a European Renewable Energy Union with regions, cities, municipalities, and citizens at its core can be the only way forward. We need a strong, inclusive and ambitious EU energy policy that enables cities, regions, and small actors to play their part in the energy transition and harvest its benefits. The idea of regional cooperation can play a significant role in realizing this, if it included sub-national actors.

Empowering cities and municipalities

While the EU’s proposals support national collaboration between member states, they overlook the potential for cross-border collaboration for municipalities, citizens and regions to set up local renewable energy infrastructure. An example that illustrates this potential is the Smart Energy Union Emmen Haren. The Dutch municipality Emmen and its German neighbour Haren will build a cross-border connection between their local renewable energy markets. A direct exchange of electricity between the two regions could be the first step towards a new type of electricity market, where communities and small producers trade their own energy via digital platforms.

Such local cooperation could bring various advantages for European citizens: community-owned energy sources, keeping profit in the region, reducing transport costs through local production and consumption, cheaper energy, and the emergence of new businesses.

One of the greatest challenges that local energy unions like Emmen and Haren face are conflicting national regulations on energy interconnections. According to European law, only the national transmission system operator can to transport electricity across borders on the high-voltage grid. The current legislative proposals do not allow local operators to build interconnections on the medium-voltage grid between two countries.

This shows that current European and national energy legislation have a long way to go to meet the challenges of the modern energy sector and reflect the idea of a united Europe. It is still based on centralized, large-scale, and often nationalized power systems. However, enhanced regionally or locally distributed generation and better demand-side response is needed to integrate renewables. With the rise of microgrids, regional cooperation is crucial for keeping pace with technological innovations in the energy sector.

Making national and local policies click

In fact, the largest impediments to local networks are the contradictory and divergent national regulations. The autonomy of the distribution system operators varies from country to country. And different support schemes, permission procedures, and administrative rules on either side of borders are obstacles to cross-border collaboration. Despite European funding for cross-border projects, these funds are in most cases out of reach for local actors and entities.

However, these are exactly the change makers that need support. Cities such as Madrid, Paris, and Copenhagen are driving the development of new low-carbon solutions in the transport sector. Meanwhile, small towns and municipalities lack political and financial support, even if they push national governments to be more ambitious in their targets. This is the case of the Polish town of Karlino, which envisions more ambitious green energy policies at the local level, but would need stronger support from Europe to make them a reality.

With the new regulation, European parliamentarians aim at establishing a permanent energy dialogue platform, gathering regional and local authorities, civil society actors, the business community, and investors to discuss different energy scenarios and shape national energy and climate plans.

This is already a step in the right direction—now Member States must institutionalize this dialogue. The market integration of smaller actors such as energy cooperatives must be further strengthened in the new package through better access to EU funding for small and medium towns, and special exemptions, as well as priority grid access and dispatch, for citizen cooperatives and small renewable energy producers.

Making regional cooperation a reality

A useful tool to support local actors in border regions is the European Grouping of Territorial Cooperation. This legal entity can be set up by Member States, associations, or regional and local municipalities to enable them to team up and deliver joint services across borders, without requiring an international agreement.

In the context of renewable energy, this kind of group can provide regions with the flexibility they need to adopt a specific regulatory framework for a cross-border territory. Municipalities and regions could set up this legal entity to attract funding for cross-border areas and bring benefits directly to local communities.

Aiming to strengthen regional development, Luxembourg launched proposals to improve the European Grouping of Territorial Cooperation tool by allowing cooperating cross-border regions to set legislation for a specific area or project.  Municipal entities can negotiate agreements across borders, which are then reviewed by national governments before they become binding. This lets states keep their sovereignty, while regions can “pull legislation from one side of the border to the other” and become “living laboratories”. The European Commission is starting to recognize the tool as an innovative solution – but for these suggestions to bear fruit, they must be turned into a legislative proposal.

Because if we are serious about a united Europe,  we need to re-connect the people. And for this, the EU cannot be just as a regulator, but rather an enabler for people across nations to work and live together.

Anna Leidreiter is Director for Climate and Energy for the World Future Council, where she carries out policy research and develops advocacy campaigns with the climate energy team. 

Radostina Primova is the Director of the Climate and Energy Programme at the Heinrich Böll Foundation office in Brussels. Prior to this, she worked as an EU Affairs Consultant at Hinicio, specialising in EU sustainable energy projects, in particular in relation to the development of renewable energy, hydrogen storage and energy efficiency technologies. 

This article has been republished from the Green European Journal and shortened from its original version. It has been updated to reflect the new EU policy. It was published in cooperation with Heinrich-Böll-Stiftung European Union and the World Future Council.

Categories: Blogs

Can the Brooklyn Microgrid project revolutionise the energy market?

22 January, 2018 - 15:00

A New York-based energy project built on blockchain is currently attempting to create peer-to-peer marketplaces for distributed energy. As the global energy market is still trapped in a previous era and needs an urgent and thorough redesign, the Brooklyn Microgrid could be a game changer. Urszula Papajak explains.

People are energized, very willing to learn and participate in energy markets (Public Domain)

Prosumers’ efforts not valued by the current market

For years now, citizens around the world have been leading the way by producing renewable energy on their own roofs or organising renewable energy projects within their local communities.

According to CE Delft’s report The Potential of Energy Cities in the European Union, by 2050 almost half of all EU households could be involved in producing renewable energy, about 37% of which could come through involvement in an energy community. If demand response and energy storage are included, about 83% of households could become active.

The notion of an ‘energy customer’ is no longer all encompassing, now the role of a prosumer is increasing within the global market.

Whether it’s producing or storing energy or being able to use energy in a smart way, prosumers’ work adds an incredible amount of value to our energy system. The problem is that the outdated design of the current energy market doesn’t recognize that value. In simple words, the market still hasn’t caught up with reality.

After years of monopolies dominating the energy market, the 21st century system is in dire need of restructuring to become one that values citizens’ efforts.

A peer-to-peer community energy project in Brooklyn is experimenting with a new local market design, and it could pave the way for a global evolution.

Buying energy from the roof next door

“More and more people around the world are producing their own renewable energy,” explains Scott Kessler, Director of Business Development at LO3 Energy, the company that designed the Brooklyn Microgrid project.

The energy market, in terms of generation, is organically becoming fragmented but the trading mechanisms are still quite centralised, so there is no outlet for prosumers to trade that energy in a decentralised manner. This is where the Brooklyn Microgrid project comes in.

Brooklyn Microgrid is a demonstration project where citizens can buy and sell locally produced PV power from one another. The project started in early 2015, and in April 216 the first community activity took place when three residents of President Street in Park Slope participated in the first ever peer-to-peer energy transactions. Now neighbours can go to an app and say how much are they willing to spend on solar panel and they can find other neighbours who are producing energy.

A new marketplace is created where local energy transactions are welcome.

“A few years ago,” continues Kessler, “our founders realized that the technology to trade energy available out there wasn’t really very efficient.”

This is where blockchain came into play.

BMG street team with Gowanus Kids.

The blockchain promises

Blockchain, being a distributed ledger (a database), resides with the market participant and so it has a potential of removing the middleman — be that a bank, energy utility or any other centralised institution.

The way we do transactions today is through central entities. We all go to a bank and ask it to send us €5. The bank has to confirm that we have these €5, that we own an account and that we can receive that €5. It’s the same for energy — a utility keeps track of how much energy we are using and how much energy is being generated by someone else.

The question is whether instead of doing that in a central location, can we do all of that in a distributed, peer-to-peer manner? Can we have that information saved simultaneously among all the users in the network, so there is no central location? LO3 is experimenting to try and find the answer.

“The first blockchain to ever do a non-financial transaction was Ethereum, so that’s where we started.” explains Kessler. “We quickly realized that a public blockchain wouldn’t be the best solution for us. We therefore use our own private blockchain. Eventually, once we have solidified the technology, we plan to go open-source in two to three years.”

About a year ago the platform also started communicating with other devices.

“Besides allowing for transactions between users, we now convert the transaction into a physical activity”, elaborates Kessler. “Let’s say I would like to buy energy from you and that energy is stored in your battery. We need to tell your battery to discharge, in other words to release that energy. There has to be a way to communicate to that battery: person A got to do a transaction, you need to release 5 kWh of energy onto the grid”.

What does that look like from a physical point of view? The meters serve a few purposes. Firstly, they measure energy information (like our traditional meters, they read energy production and consumption). Secondly, they communicate with one another and they form the blockchain where these transactions are taking place. Each of these meters is contributing a small amount of computation necessary for that. And lastly, they communicate with other smart devices.

Do people only care about cheap energy?

Blockchain technology and its vast potential is easy to get hyped about. A future in which utilities disappear and the grid is just a network of wires is a scenario that lots of young entrepreneurs are often quick to get overly excited about. The reality is much more mundane. Things won’t happen overnight. The maturity of the blockchain technology, its security, transactive power and speed are still very serious obstacles. Overcoming them is a much more complicated process that anyone can even imagine.

That doesn’t mean that the potential for a move towards energy democracy isn’t there.

“One thing I found most surprising is how engaged people have gotten”, notes Kessler. “I come from the electric industry and there is a common wisdom there that people don’t really care about energy, they only care about cheap energy and being there when they need it. I now understand this assumption is wrong. People are energized, very willing to learn and participate.”

Urszula Papajak is a Climate & Energy Transatlantic Media Fellow and a community energy enthusiast. She researches the intersection of grid modernisation and the rise of a new end-to-end energy system. Passionate about innovative communication tools. She was previously part of the WiseGRID and the 350.org teams.

This article has been republished from Medium.

Research for this article was made possible with the support of the Heinrich Boell Foundation’s Transatlantic Media Fellowships.

Categories: Blogs

Costa Rica drives for a new green goal: electric transport

19 January, 2018 - 15:00

Greening the transportation sector is crucial, but it often takes a backseat to renewable energy. In Costa Rica, legislators are increasingly pushing better public transit to try and meet Paris Agreement goals, Sebastian Rodriguez reports.

A view of street traffic in San Jose, Costa Rica, Nov. 2017. Thomson Reuters Foundation/Sebastian Rodriguez (Thomson Reuters Foundation/Sebastian Rodriguez)

SAN JOSE (Thomson Reuters Foundation) – Last year, this greenest of Central American nations broke the world record for the most consecutive days running on renewable energy – 300.

But there’s one area where Costa Rica is still struggling to meet its Paris Agreement commitment to cut emissions, experts say: the transport system.

“We’ve kept a very clean electrical grid running. Where Costa Rica is still underperforming – and it’s typical of most developing countries – is in transport. That’s where our Achilles heel is,” said Christiana Figueres, a Costa Rican and the former head of the U.N. climate secretariat.

According to the country’s National Meteorological Institute, 64 percent of Costa Rica’s climate-changing emissions come from energy use, and more than two thirds of those come from transport.

Marcela Guerrero, a Costa Rican national legislator, said the country’s outdated and inefficient public transport system has led people to instead rely heavily on cars and other personal vehicles.

“If Costa Rica does not prioritize an increase in the use of public transport, I think we’ll be very far from achieving our Paris Agreement commitments,” Guerrero said in an interview with the Thomson Reuters Foundation.

But cleaner individual vehicles also will be important, she said. To reduce car and truck emissions, Guerrero in 2015 proposed providing financial incentives for adopting electric vehicles.

Those could include exemption from a range of fees – including parking meter costs and driving permits – to lower import taxes and vehicle transfer fees.

Such incentives would need to last just five years – long enough to give a new industry a boost, she predicted.

“Costa Rica has unmatched conditions (for adoption of electric transport) in comparison with the rest of Latin America” because its electrical grid relies on renewable energy, she said – meaning electric vehicles would have near zero emissions, “an important piece of the puzzle” for the country to hit its climate goals.

More cars

Meanwhihle, vehicle ownership is soaring in Costa Rica. According to data from the country’s National Registry, there are twice as may cars registered each year as babies born.

Most are individual vehicles – no surprise, Guerrero said, when public transport remains “deficient”.

Pedestrians cross a street in San Jose, Costa Rica, Nov. 2017. Thomson Reuters Foundation/Sebastian Rodriguez

The train system, for example, offers only four routes nationwide, with just 19 trains on the tracks – a measure, in part, of the country’s small size, according to the Costa Rican Railway Institute.

Buses, in turn, have seen little in the way of modernization of routes and stops, in part because bus company owners sit on the bus regulatory board, and are reluctant to make changes that could increase operating costs, Guerrero said.

The result is that 30 percent of Costa Ricans say they don’t use public transport because of its inefficiency, according to the country’s 2017 State of the Nation report.

Modernizing public transport with better routes and more electric buses and trains could help lower Costa Rica’s dependency on individual vehicles and cut emissions, Guerrero said.

But pushing for cleaner cars is also key, she said, since even with a better public transport system not everyone will opt to use it.

Clean Electricity

Jairo Quirós, an electrical engineer at the Universidad de Costa Rica, said the country is well suited to electric cars, and not just because the country’s electric power is low carbon.

More than 90 percent of people that own cars also have a garage where they could charge their electric vehicles without the need for large-scale public investment in charging stations, he said.

Because Costa Rica is a small nation, limitations on the range of electric vehicles also are not a significant problem, Quirós said.

He agreed with Guerrero that, with the right incentives, Costa Rica could have a competitive electric vehicle market in five years.

The push for electric transport has met some criticism, including that the country’s clean power grid couldn’t stand up to the increased demand for electricity.

But “we have studied how many electric vehicles our renewable grid can hold and with the amount of vehicles projected from now to 2025, the grid holds just fine,” Quirós said.

For now, the biggest barrier to putting Costa Ricans in the seat of electric cars – or buses – is price, Guerrero said. But with electric vehicles becoming more popular around the world – and with financial incentives to buy one proposed at home – that barrier is unlikely to last, she said.

“There are a perfect series of conditions for this change to happen,” she said.

Reporting by Sebastian Rodriguez; editing by Laurie Goering.

This article has been republished from the Thomas Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit news.trust.org/climate

Categories: Blogs

Analysis: How developing nations are driving record growth in solar power

18 January, 2018 - 15:00

Emerging markets now account for the majority of growth in solar power, according to new data from Bloomberg New Energy Finance (BNEF). Led by China and India, these developing economies are behind dramatic recent growth in solar capacity, which expanded by 33% in 2016. Zeke Hausfather of Carbon Brief takes an in-depth look.

India was the fourth largest source of new solar capacity this past year (Photo by Epagemakerwiki, edited, CC BY-SA 4.0)

China alone installed 27 gigawatts (GW), around 40% of the world’s new solar last year. Brazil, Chile, Jordan, Mexico and Pakistan all at least doubled their solar capacity in 2016.

In total, solar accounted for 19% of all new generating capacity in the emerging markets tracked by BNEF.

However, solar still only accounts for 5% of capacity and 1.3% of electricity generation globally. But its exponential growth in recent years has been driven by national policies and a combination of photovoltaic module prices falling more than threefold.

Exponential growth

Over the past decade, solar capacity has increased exponentially, driven by falling module prices and national commitments to reduce greenhouse gas emissions or expand access to electricity.

While Europe, the US and Japan led the way in early solar installations, over the past few years most growth has been driven by developing countries, with China in particular starting to dominate the solar sector.

The figure below shows total global solar capacity installed each year from 2003 through to 2016 by region.

Cumulative solar photovoltaic capacity by region and year from 2003 through 2016. Based on data from BNEF/Climatescope and the BP Statistical Review of World Energy. Chart by Carbon Brief using Highcharts.

Europe drove much of the early solar capacity growth – and cost reductions. In 2016, however, Asia became the dominant region. North America has also ramped up its solar capacity considerably. While still relatively small, solar capacity in Africa and South and Central America also experienced rapid year-over-year growth from 2013 onwards.

Mapping solar use and new installations

Carbon Brief combined the new Climatescope BNEF data for emerging markets with data from the BP Statistical Review of World Energy, to show the growth of solar over recent years in a wider range of countries.

Total solar capacity, shown in the bar charts below, are dominated by high-population countries, such as China and the US. China alone accounts for 26% of the world’s solar installations, with Japan, Germany and the US each accounting for around 13%. The UK has the sixth largest installed solar capacity of any country, larger than India, France, Spain and Australia.

Total solar photovoltaic capacity by country, both cumulative (top chart) and added in the year 2016 (bottom chart). Based on data from BNEF/Climatescope and BP Statistical Review of World Energy. Chart by Carbon Brief using Highcharts.

In 2016, China added around 27GW of total solar capacity, more than any other country and about 40% of all solar capacity installed globally that year. The US was the second largest, at around 15GW. India was the fourth largest source of new solar capacity, installing more than 4GW in 2016. The UK installed around 2GW in 2016.

To normalise by a country’s population, the map below shows the total amount of solar power capacity per-capita. A per-capita metric allows comparisons across countries without large population countries overshadowing rapid changes elsewhere.

Cumulative solar photovoltaic capacity per capita by country in 2016. Based on solar capacity data from BNEF/Climatescope and BP Statistical Review of World Energy and population data from the World Bank. Countries in grey have no data available. Chart by Carbon Brief using Highcharts.

Germany has the largest installed solar capacity per person, at nearly 500 watts per person. It is followed by Japan at 337 watts, Italy at 318 watts, Belgium at 302 watts, Greece at 243 watts and Australia at 228 watts. Other European countries round out the top 11, with the UK at number 9 with 179 watts. The US has the 12th largest installed solar capacity per person at 125 watts, while China is the 24th largest at 56 watts solar per person.

While European countries have some of the highest solar capacities per person, their growth has slowed in recent years. The map below, which shows new solar installed in 2016 per-capita, paints a somewhat different picture.

Solar photovoltaic capacity per capita by country added in the year 2016. Based on data from BNEF/Climatescope and BP Statistical Review of World Energy and population data from the World Bank. Countries in grey have no data available or no new solar in 2016. Chart by Carbon Brief using Highcharts.

In 2016, Japan had the most new solar installed per person, at 68 watts. The US was near the top at 46 watts, while the UK and Australia had 31 watts. China installed more solar per-person than Germany in 2016, which has capped the rate of renewable additions and moved to auctions for new capacity.

While per-capita installations across Africa are relatively low, the region’s growth is still noteworthy. According to BNEF, more than 1.5m households in Africa now use solar home systems, with mobile-money enabled financing plans resulting in a nearly 300% increase in cumulative installations relative to 2015.

Conclusion

While Europe, Japan, Australia and the US drove early installations of solar power, in recent years developing countries led by China have taken the lead and now account for more than half of new solar installations globally.

Solar power accounts for only 5% of capacity and 1.3% of electricity generation globally today, but is growing rapidly. Solar is widely expected to continue its rapid growth as prices continue to fall and climate policies and national solar targets drive adoption at scale.

The International Energy Agency suggests that by between 2020 and 2025 solar will be cheaper than coal in the US, India and China. However, there are still challenges associated with variable generation and the need for flexible backup or battery storage, which will become increasingly important as solar contributes a larger share of the electricity mix.

This article has been republished from Carbon Brief.

Zeke Hausfather covers research in climate science and energy with a US focus. Zeke has masters degrees in environmental science from Yale University and Vrije Universiteit Amsterdam, and is completing a PhD in climate science at University of California, Berkeley. He has spent the past 10 years working as a data scientist and entrepreneur in the cleantech sector.

Categories: Blogs

New Germany energy commitments take shape

16 January, 2018 - 16:29

On Friday, a 28-page text covering the main policy fields cursorily was published after a previous draft had been leaked. For energy policy, the changes are encouraging, but a lot of question marks remain. Craig Morris takes a look.

Can the new German government kick the Energiewende into gear? (Photo by Bayern Greens, edited, CC BY-SA 2.0)

The two largest German parties, the Christian Union and Social Democrats are negotiating a continuation of their “grand coalition.”  At the beginning of last week, the energy section of the text being negotiated was leaked. It indicated that the new German coalition would give up on the 2020 carbon target: “It appears unlikely today that the short-term target for 2020 will be reached,” the draft stated. There was less reporting about the follow-up sentence, however: “We will adopt a strategy to close the gap as much as possible and reach the goal at the beginning of the 2020s.”

Perhaps because of the public backlash, the final version of the document (PDF in German) now reads, “We are committed to the climate targets for 2020, 2030, and 2050. We aim to close the gap towards reaching the 2020 target as quickly as possible, and we aim to reach the 2030 targets on time in any case.” The public debate now focuses on the leeway that “as quickly as possible” opens up. Indeed, the document raises as many questions as it answers.

One rare specific number is a new target for renewable electricity: 65% by 2030. The old goal for that year was 50%. The new one makes sense; Germany reached its 2020 target this year and is progressing at a pace to be 100% renewable by 2030, so greater political ambition is needed to keep up with market realities. Now, an additional 4 GW of onshore wind and 4 GW of solar are to be auctioned in addition to an unspecified additional amount of offshore wind – “half of it in 2019 and half in 2020.”

This change comes out of nowhere; I haven’t found anyone yet who saw this coming. The previous coalition of the same parties started switching to auctions in 2014 specifically to slow down the pace.

It will be impossible to build more offshore wind by 2020, so it remains unclear what that passage means. Solar should be easy enough to build within that timeframe, which is more challenging for onshore wind, however. Perhaps the politicians hope that the large number of projects that lost in previous auction rounds can just reactivate their efforts so that projects can be completed on time.

For coal power, the paper is both encouraging and uncommitted. On the one hand, 1.5 billion euros is to be set aside for structural change in coal regions. But no date is given for a coal phaseout. Rather, a commission on “growth, structural change, and jobs” consisting of “politicians, business people, environmental organizations, labor unions, and affected regions” shall propose a plan to “gradually reduce and end coal power.” Whatever date the commission proposes, it will only be a recommendation, which the government can still ignore. It’s also unusual for a commission to formulate such important policy details; usually, politicians want such high-visibility items for themselves – but this potato seems too hot.

What’s missing from the list of proposed commission members is researchers and engineers. Someone needs to remind politicians that 65% renewable power – which will be 55% wind and solar in Germany – will practically mean the end of coal power by 2030 anyway. Rather than formulate a phaseout like the nuclear one, with specific deadlines for each reactor, the politicians apparently prefer to expand renewables (with priority dispatch!) so quickly that the market will become unprofitable for coal power, and companies will voluntarily shut down facilities.

Power generation in Germany in April 2017. Germany had 22% wind and solar last year. Increase the amount of wind and solar by 150% to reach the proposed new 2030 targets, and all conventional capacity will have to ramp like gas turbines. There will be no space for inflexible coal, and load factors will be so low that most coal facilities will run at a loss. (Source: Energy-Charts.de)

Mobility – an overlooked field – is dealt with 17 pages earlier under “infrastructure,” not under climate for the Energiewende. Expect this blind spot to persist. In the building sector, the paper vaguely commits itself to increasing the share of renewables, but no target is provided.

Overall, the document encouragingly shows that German politicians take the embarrassment of missing a carbon target as an incentive to do more. As Stefan Gsänger, Secretary-General of the Bonn-based World Wind Energy Association, put it, “I don’t think this paper is as bad as the one four years ago.”

Finally, it’s important to note that climate and energy take up only one of the document’s 28 pages, and the preamble mentions neither. Some press reports on the paper (like this one in German) don’t mention those topics either. It’s important for climate hawks to remember that issues like health insurance, the job market, immigration and the state social support system are bigger concerns for most people.

New German coalition agreement allows 180,000-200,000 refugees to enter Germany each year … that’s 4 times the number Trump set for the US this year for a country with a population ¼ the size of US.

— Ivo Daalder (@IvoHDaalder) January 13, 2018

On Sunday, 235 Social Democrat party delegates will vote on the proposed coalition agreement. If it passes, a grand coalition is likely. No other German party presents coalition agreements to a delegation for approval. Some Christian Union politicians have criticized the SPD’s policy, saying that they want to speak with negotiating partners who can actually make decisions.

Categories: Blogs

German energy consumption grew in 2017, emissions stable

15 January, 2018 - 15:00

Despite the further decrease in coal power generation, Germany probably failed to reduce its carbon emissions last year, largely because of backsliding outside the power sector. Which source of energy makes up the biggest piece of the pie in Germany? Craig Morris has the answers.

Energy consumption – including heating and transportation – rose this past year (Photo by Christian Eckhardt)

Just before Christmas, the AGEB – a group of economists and energy sector representatives – produced its estimate (press release) of German energy consumption for the year. Obviously, the numbers are estimates – but also a reliable starting point until the official numbers are produced this summer.

Fossil energy still makes up more than 80% of German energy consumption. Oil is by far the biggest source of energy at more than a third, followed at some distance by natural gas at just below a quarter. Even taken together, lignite and hard coal come in only third slightly behind gas.

For the second year in a row, energy consumption is expected to have increased, this time by 0.8% “primarily due to the positive economic trend.” (GDP probably grew by more than 2% and hence more than expected.) Still, the consumption level last year was roughly on par with the economic crisis year of 2009 and a good 10% below the record year of 2006. As previously reported, renewable electricity grew by a record amount and percentage, while both coal and nuclear shrank.

But natural gas grew not only within but also outside the power sector – by 5.2%, in fact. The AGEB says the main driver was demand in cogeneration units, which produce both power and heat. Likewise, oil consumption grew by 3%, mainly as gasoline and diesel in cars.

The share of renewables in the primary energy consumption reached 13.1% last year. If that number seems low, remember that most renewable energy is found in the power sector, which only makes up around a fifth of German energy consumption, roughly half of which is heat, with mobility making up the remaining third. Germany has an official target of 18% renewable energy (not just electricity) by 2020, but those targets for EU member states are defined in terms of final, not primary energy. The share of renewables in final energy is generally higher (see this blog post), but that number will not be known until later this year. It is likely to be around 16%.

No official figure for carbon emissions is yet available either; the AGEB merely speaks of “stagnation.” But the lack of progress comes at a bad time: Germany only has three years left for an additional 10% carbon reduction to reach its 2020 goal (which, for what it’s worth, no one ever considered realistic).

Nonetheless, things are happening to reduce coal power. Municipal utilities closed six hard coal power plants in 2017 for economic reasons, and a number of lignite plants were retired in a reserve (in German). While more progress is needed towards a coal phaseout – coal is the main source of carbon emissions although it is “only” Germany’s third-largest energy source – experts are now focusing more on aspects outside the power sector.

For instance, think tank Agora Energiewende, which produced a useful slide deck overview in English of the power sector in 2017, listed three reasons for continued high emissions in a press release. The third was coal power, but the first two were the transport sector and industry.

At present, the Christian Union and the Social Democrats are negotiating a new governing coalition. Reducing emissions by more than three percentage points annually over the next three years would be extremely hard, though proponents of renewables do have a few suggestions.

By shutting down its 20 dirtiest coal power plants, Germany could cut emissions by 50M tons and reach its 2020 climate target. More important, this 130-year-old heritage church could have been saved from bulldozers of King Coal. pic.twitter.com/pzsYQhNNzH

— ArneJJ (@Arne_JJ) January 9, 2018

Little has leaked from the coalition negotiations aside from an energy paper. Most reports focused on how the politicians have abandoned the 2020 target altogether, but there was actually a lot of substance to the proposals. Top decision-makers may now finally admit that the goal is out of reach, but they remain committed to shrinking the gap.

Interestingly way German coalition talk paper was leaked (incl. headlines abt #climate goals) overshadow some pretty interesting suggestions in it. e.g. end-date for #coal exit & ramped up #renewables target https://t.co/XLgleW4Iie @climatemegan pic.twitter.com/dHX4iPolrZ

— Sven Egenter (@segenter) January 9, 2018

In the coming weeks, we may see a coalition come about along with specific proposals. There will be much to review in 2018.

Craig Morris (@PPchef) is the lead author of Global Energy Transition. He is co-author of Energy Democracy, the first history of Germany’s Energiewende, and is currently Senior Fellow at the IASS.

Categories: Blogs

5 things to know as China launches the world’s largest carbon market

12 January, 2018 - 15:00

China has announced the launch of a national emissions trading system that will become the world’s largest and most consequential environmental program, fulfilling a commitment of President Xi Jinping and setting up China to meet or even exceed its commitment to the Paris climate agreement. Diane Regas of Environmental Defense Fund explains how the program works, and how EDF is supporting the plan.

Golmud, China: Solar is increasingly replacing coal, and the carbon market will help enforce this transition (Photo by Vinay Kumar, edited, CC BY-SA 4.0)

China is moving deliberately, gradually phasing in and ramping up this carbon market, a proven way to limit and reduce climate pollution. It’s expected to eventually be 10 times larger than the successful emissions trading system in California, which took more than six years to develop and launch.

China is stepping into a leadership void after the Trump administration decided to withdraw the United States from the Paris climate accord. There is still much to be done in the coming months to ensure China’s program succeeds, including synhronizing it with other needed policies. But if it does, it could position the country of 1.4 billion to exceed its goals – and bring the rest of the world along.

When the first phase of the system is fully implemented, it’s expected to cover 3.5 billion metric tons of carbon pollution from more than 1,700 companies in the power sector. That is roughly 39 percent of China’s total emissions, making it the largest carbon market in the world.

Here are five things you should know about China’s market, and why it’s such a huge deal for our climate.

1: China is motivated

China’s current Five-Year Plan, which guides the country’s economic and social development between 2016 and 2020, specifically calls for this carbon market. It also sets new targets for carbon and energy intensity for the economy – as well as the first-ever targets for total energy consumption.

By planning for moderate economic growth and by shifting the economy away from heavy industry – while at the same time capping greenhouse gases – China may, in fact, be able to peak emissions well ahead of its 2030 goal if it continues to ramp up these efforts.

The country is also motivated by a crippling air pollution problem. In addition to cutting climate pollution, the carbon trading system will reduce particulate matter and other pollutants that contribute to 1.6 million deaths annually.

2: China is learning from earlier markets abroad

With several large carbon markets already up and running in other countries, China is taking good notes. The nation’s leaders understand that safeguards designed to protect market integrity must be in place for the market to perform, something Europe’s now-successful market had to learn the hard way.

It must be functional, transparent, efficient and subject to strict oversight. But China also still needs to nail down a host of specific program design elements.

A partial list of the most pressing questions include the geographic scope of the market, which sectors will be covered, how the allocations will be made, the nature of the monitoring and verification system, the role of offsets and the nature of the enforcement mechanisms.

In an effort to support the Chinese government, Environmental Defense Fund will continue to offer practical recommendations on how China can harvest the lessons, seize opportunities and overcome challenges associated with the new market – all while slowing energy demand and accelerating the transition to cleaner energy sources. EDF brings insights from decades of work helping to design, implement and evaluate emissions trading systems in the United States and the European Union – as well as from 25-plus years on the ground in China.

By taking advantage of best practices, China will have a leg up as it designs its own, unique market.

3: China’s pilot markets gave nation a jumpstart

China’s seven carbon trading pilots, which EDF continues to assist, are in full operation. These markets are already capping more than a billion tons of carbon dioxide in areas covering 250 million people.

Pilot participants have been learning from each other’s experiences in anticipation of the national roll-out. The pilots’ experiences will help inform the development of an innovative and efficient national system, for example when it comes to guiding government intervention to manage price volatility.

4: China understands that enforcement is key

Strengthening enforcement and transparency is critical for building confidence in the market and in the country’s ambitious climate goals. That’s why EDF has helped train more than 39,000 Chinese environmental enforcement officers in recent years.

EDF has mounted an accelerated effort on the ground in China with a mission to provide technical assistance, analysis, training and support to those who will build, administer and manage the new carbon market. They are also working with the Chinese government to improve the regulatory enforceability of market regulations.

5: China will hold polluters accountable

An effective trading system offers enterprises flexibility on how to comply. It also makes it abundantly clear that violations will result in penalties that make non-compliance cost-prohibitive.

When these signals are clear, financial and environmental objectives come into alignment – prompting industry to minimize fines, invest in reduction measures and monetize green investments.

EDF’s China team is working with Chinese partners to evaluate the effectiveness of penalties under the nation’s new environmental law and translate those lessons to the new carbon market.

Notwithstanding the work that remains to be done, this new mechanism can reduce emissions from the world’s most populous nation, delivering on and surpassing its commitments under the Paris climate accord.

China is showing positive action – and the rest of the world is watching.

This article has been republished from Environmental Defense Fund (EDF).

Diane Regas is executive director of Environmental Defense Fund. She is responsible for developing EDF’s overall strategy, as well as driving and delivering on the organization’s vision. Her areas of expertise include climate, energy, water and air pollution, toxics, natural resource management and waste issues.

Categories: Blogs

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