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Hambach Forest: the front line of Germany’s Energiewende

18 September, 2018 - 12:00

While the German government is supposed to set a coal phase-out date, energy utility RWE is putting the breaks on the Energiewende. Police are swarming the ancient forest which sits atop lignite resources, ending a six-year occupation. L. Michael Buchsbaum reports from Hambach forest.

Police in Hambach Forest are forcing activists to leave (Copyright L. Michael Buchsbaum)

The late afternoon mood at Thursday’s S&P Platts European Energy Summit, held in the grand ballroom of the upscale Renaissance Hotel in Düsseldorf, was dull.

The gathering of international industry executives touched upon the transition away from fossil fuels. But by 5pm, no one had mentioned RWE AG’s struggle against demonstrators defiantly occupying the Hambach Forest.

Less than 100 kilometers from the conference lies the Hambach lignite open-pit mine, the largest in western Europe. It is due to expand into the Hambach Forest, which has been occupied for six years by environmentalists. But while executives spoke about dropping demand for coal, thousands of police supported by tanks, helicopters, drones, and water cannons were forcing the removal of roughly 100 activists living in makeshift treehouses.

To save the remaining 200 hectares of the Hambach woods, an international group of activists created a fairytale-like canopy community. Hosting workshops and curious visitors from around the world, they transformed the forest into an international symbol of resistance against fossil fuel extraction and burning.

By midweek, following the peaceful confiscation of activist’s fire extinguishers after determining they could be used as weapons, the police deemed the treehouses a fire hazard and, in the interest of protecting the same forest slated to soon be torn down, ordered the occupiers out of the trees. To simplify the process, they drove tanks through the brush, clearing a bigger path, enabling them cut through the treehouses with chainsaws.

But on Thursday evening, with the chaos far away from the dim conference light, Henry Edwardes-Evens, Editorial Director for Power at Platts, was moderating a panel entitled “The transition to clean energy in Europe.” Sitting next to Katja van Doren, RWE Generation’s Chief Financial Officer, he opened the session by asking her what the main challenges and policies were towards the reform of the coal sphere.

She responded by boasting about the RWE’s embrace of clean energy, stating “we really believe renewables will guarantee a successful transition in Europe and worldwide.” While concerned about “growing nationalism”, she called for a “clear and reliable regulatory framework to ensure that structural energy transformations were shaped in an economically and socially acceptable way.” Citing the Coal Commission’s focus on employment and smooth economic transitions, she underlined her confidence that by mid-December “they will come up with meaningful results…that allow for planning clarity.”

After a banal discussion around capacity market mechanisms and auctions, this reporter finally asked van Doren to make an economic case for why the Hambach Forest has to be destroyed now, even if in doing so, RWE splits the coal commission apart and creates an international backlash against it in the process.

Shuffling her papers to find the proper prepared talking points, she responded by stating that the on-going police intervention was initiated by the local NRW government, not at RWE’s request. Nor was this the beginning of a forest clearing, “which will be done in mid-October and is necessary to maintain production at the Hambach open cast mine.” Indeed, “for us, this is a business model that cannot depend on symbolic politics. We have to take care for our employees at the power plant and the mine. The plan was agreed to long ago.” And that was that. No further comments allowed. Just back to market efficiencies.

By the following morning, the New York Times, the Guardian, and scores of international and German news outlets were reporting on the struggle in the forest which they said “highlighted the disparity between Germany’s pledges to reduce its carbon emissions and uphold its commitments to the Paris climate accord” against its “heavy use” of lignite.

On the second day of the destruction of the tree houses, with the sounds of breaking glass, roaring chainsaws and the defiant cries of the locked-in treesitters behind us, one forest occupier, named “Moses,” spoke to this reporter. He believes that the police were now there precisely because of the pressure of the demonstrators, he said: “while the Coal Commission is meeting in Berlin, we are here putting our bodies directly in RWE’s way.”

Clearing the tree houses (Copyright L. Michael Buchsbaum)

Commenting that the increasing international attention is helping energize the populace, he reminded “You don’t have to sit down in your chairs in despair. You can stop climate change, but it requires a radical change, both economically and politically.” Though the attempt to clear-cut the forest and bypass political decisions is a symbol of what is wrong in this world, he says “we can stop it. We can organize. We can make our voices heard.”

Ironically, the police claim to be acting in the protesters’ best interests. As media poured into the forest, police stated that “in order to protect the lives and bodies of the protestors,” they had designated the forest a “dangerous area” where they were now maintaining a round-the-clock presence to facilitate tearing protestors out of the trees.

Framing the situation as another example “that politics and economics are too close together,” Maryann Timon, Campaigner at Greenpeace and a former Heinrich Böll Stiftung scholar, gave a series of interviews to on-the-scene reporters. “Here we see that the police decided to implement what the corporation decided to create,” she said.

With the protest cries from the locked-in tree sitters echoing behind us, she reminded us that “Even now various NGOs … are suing RWE to stop them from destroying this forest. In the past, RWE and other companies have actually lost similar court decisions, but only after the trees or towns in the way of their expanding mines were already destroyed. That,” she said referring to the tree-sitters, “is why this tactic was chosen.” Though the full logging of the forest is scheduled for mid-October, this delaying action and the media attention “could allow a judgment saving the forest before that time.”

Protesters are putting their bodies directly in RWE’s way (Copyright L. Michael Buchsbaum)

Late on Friday night, as the growing media presence beamed the struggle around the world, the 4,000-strong police force closed the forest to reporters. But the following Sunday over 7,000 demonstrators flocked to the nearby town of Buir to show their support. After the march, some demonstrators broke through police ranks to hide themselves deep in the Hambach, while others tried to get into the mine pit itself. Across Germany, solidarity actions including the occupation of other power plants took place as thousands marched in dozens of cities, including over 700 in Freiburg.

Undeterred, police vowed to clear the remaining treehouses by the end of the week even as more protestors arrived in the area in preparation for larger demonstrations to come. Both sides are digging in ahead of the mid-October date RWE has set for the forest’s final judgement.

Categories: Blogs

South African cities: battleground for a just transition

17 September, 2018 - 14:00

South Africa has finally released its climate change bill. The legislation could strengthen municipalities in their transition to renewable energy, argues science writer Leonie Joubert.

Local governments should earn their income from the distribution of electricity (Photo by Anagoria, CC NY-SA 3.0)

Electricity supply across South Africa is the task of the national government, but local municipalities are responsible for the last leg of energy distribution and sale. Two out of three South Africans now live in cities. This means that local government is key to meeting the daily energy needs of the majority of our citizens.

Many cities in South Africa use a Robin Hood approach to tackling the challenge of bringing free or affordable basic electricity and water services to poorer urban communities: they take from the rich and give to the poor. Cities use tiered pricing structures, charging higher tariffs for large-volume consumers, and using this revenue to cross-subsidize the free or cheaper basic services they are responsible for delivering to lower-income households.

Not only does the revenue earned from the middle-class and businesses help address a city’s development obligations for poorer neighborhoods, but it also means the city’s basic income is dependent on selling as much electricity and water as it can.

This puts cities in a bind: they need to put policies and technologies in place that reduce their region’s carbon emissions; and they need to encourage water savings to better manage this over-stretched resource. But they also need to keep their coffers full. This is one of the main reason they’re reluctant to push for lower energy or water-use behaviour amongst consumers.

This municipal funding model comes into the spotlight in South Africa again as the country – the biggest carbon emitter on the continent – put a significant piece of legislation forward for public comment last month: the national Climate Change Bill.

South Africa has various domestic policies that indicate the country’s willingness to join the global effort to cut emissions. At Copenhagen, we signalled to the international community our willingness to have our emissions ‘peak, plateau, and decline’, and by when. Our National Development Plan affirms our intention to reduce emissions below a baseline of 34 percent by 2020, and by 42 percent by 2025. From 2035, emissions need to start dropping.

What the country has lacked until now is a clear direction of which institutional need to implement these policies, and how. The Climate Change Bill is an attempt to put that in place, by assigning the right government bodies to the task.

How good the bill is, in its current draft form, depends on who you speaks to, although the nitty-gritty isn’t really relevant to this column.

So how will the Climate Change Bill impact municipalities and their role in SA’s development agenda?

Restructuring SA’s energy sector

The National Planning Commission (NPC) is developing a consensus of what a ‘just transition’ means for this country, through a series of stakeholder dialogues with different tiers of government, along with business, civil society and labour unions.

Belynda Petrie is chief executive officer with OneWorld Sustainable Developments, which, with Sustainable Energy Africa,  is overseeing the social partner dialogue process for the NPC. She says it’s too early to give any ‘headline’ messages from the workshops they’ve held so far. But there’s clearly a growing awareness that there needs to be ‘systemic change of the energy sector in South Africa’, if we want to decarbonise the energy grid, which is the basis of the economy.

‘At the moment, our grid is a vertically-integrated, centralised system,’ she explains.

Eskom, South Africa’s national utility, has the monopoly on electricity provision in the country. It is the main generator, transmitter, and distributor of the country’s power.

‘The question from stakeholders is how do we restructure the sector to be decentralised,’ Petrie says.

One approach could be for the utility, Eskom, to outsource much of the electricity generation to private companies, and free itself up to play more of a developmental, oversight role. It would be responsible for keeping track of global trends and coordinating other institutions, laws, and infrastructure decisions within the energy system.

This could also involve supporting other institutions or firms that are responsible for generating or distributing power.

Municipalities are key. One alternative to the current municipal revenue model is for local governments to earn their income from the distribution of electricity, rather than the sale of the energy itself. Users would pay for the grid infrastructure along which the electricity flows, rather than for the energy coming out the plug at the end of the grid.

‘If Eskom took an oversight role, it would then need to support local municipalities in this, and help change the laws that currently govern how municipalities are required to deliver on services,’ explains Petrie.

But South Africa’s municipalities aren’t necessary functioning well, according to columnist Ralph Mathekga, writing in one of our national papers recently. He reflects on how, if municipalities collapse because of failing finances and political instability, this could be one of the biggest threats to democracy: ‘(it) will create an institutional vacuum that… may allow the emergence of lawlessness and chaos as society battles to find ways in which to survive in a situation where government is nowhere to be seen.’

Meanwhile the results of the NPC’s stakeholder dialogue process to map this ‘just transition’ roadmap will likely be presented at a summit in April 2019.

‘There’s still a lot of consideration to be given around what municipalities can and can’t do, as governance structures, and how this will allow for a low carbon, climate resilient economy,’ says Petrie. The outcome won’t be something legally binding, but will take the shape of a social compact.

Categories: Blogs

Stricter CO2 standards for vehicles are not the reason for job losses

13 September, 2018 - 15:00

Despite negative media reports, environmental regulation cannot be blamed for the coming upheavals in the automobile sector. It’s the failure of the auto industry to react to the transition to electric vehicles that spells disaster, Daniel Rieger explains.

German car manufacturers will go under if they don’t adapt (Public Domain)

Recently, media reports across the continent have covered the alleged negative effects of tighter CO2 standards for cars and a shift towards e-mobility on jobs.

report by Fraunhofer IAO for the German workers union IG Metall has been reported on prominently – despite the fact that the full report is still not public. Apparently, this didn’t stop high-ranking union officials from travelling the country with a shocking figure: Up to 70,000 jobs in the German automotive sector may be threatened in 2030 due to stricter CO2 limit values.

No wonder that the message hits the target and delegates of all parties have started to wonder if they should better waive the transport sector’s climate goals for employment in their home countries.

After he had been visited by work councils, German minister of finance Olaf Scholz announced the 50% reduction target which was previously declared by minister of environment, Svenja Schulze.

Car lobbyists meanwhile rub their hands as the union – not encumbered by dieselgate or manipulated fuel consumption figures – is doing their job to water down the CO2 limit values. What a coincidence that the Association of German Car Manufacturers (VDA), BMW, VW, Bosch and others helped IG Metall to prepare their study.

Despite these conditions, the IG Metall report’s findings are much more nuanced than has been reflected in the headlines. Its rather differentiated statements correspond much more with other reports on socio-economic and particularly job impacts.

Creating blunt headlines may be suited to evoke the intended political effects but everybody who really cares about the future of the car industry is well advised to also face the less spectacular details and consult additional reports and their key findings:

  1. Environmental regulation is not the reason for job losses. Automation is the key driver.
  2. Stricter CO2 limit values will lead to additional jobs in the short- and mid-term.
  3. Without an accelerated uptake of emobility, the European automotive sector will be affected much worse from job losses.

It seems only natural that the car industry is trying to blame job losses which are about to happen anyway on “excessive” climate protection legislation in order to prevent stricter standards. However, the majority of reports suggest changes in moderate net employment or even conclude significant job increases over the next 15 to 20 years.

The European Commission’s impact assessment expects 22,000 additional jobs when implementing a 30% reduction of CO2 limits in 2030. However, it also shows that a 40% reduction would lead to significant long-term employment uptakes of up to 334,000. Same for the European Climate Foundation’s “Fuelling Europe” and its Germany specific follow-up report: The authors expect up to 670,000 extra jobs in Europe whereas 145,000 would be in Germany alone with 10,000 in the car industry.

Both assessments have been prepared taking into account the views from the IG Metall, as well as manufacturers but also environmental, consumer and motorists associations. It is striking that scenario assumptions here appear much more balanced compared to those solely based on industry specifications.

The National Platform for Electric Mobility (NPE) which is dominated by industry expects a total of 30,000 additional jobs in the wake of an e-mobility uptake.

Also, net job effects can vary a lot depending on the assumed share of hybrid vehicles. These cars need conventional and electric drive trains and are therefore more labour intense. As manufacturers are expected to comply with ambitious CO2 limit values by an increasing degree of electrified models e.g. hybrids, this fact rather suggests that stricter standards will help create jobs or overcompensate for jobs that may be lost otherwise.

Likewise, battery manufacturing facilities in Europe and Germany are suitable to soften negative job impacts and therefore create room for political leeway. After the Chinese battery manufacturer CATL announced its plans for a battery plant in Thuringia, these ideas are no longer thought experiments.

Much more significant however is a clear distinction between the effects of increased efficiency requirements for cars and a transition to e-mobility on the one hand, and trends that will affect the working world anyway on the other. All too often it is omitted in the public debate that a major share of attested job losses cannot be attributed to the lower labour intensity of electric motors but are a general consequence of increased digitisation and specifically automation along the production chain.

The car industry too will change a lot due to these developments and as a consequence fewer workforces will be needed. A substantial share of decline in employment can be explained with this factor and must not be attributed to stricter environmental standards.

Finally one should also respect developments on key markets and in cities all around the world: Diesel cars are banned, the phase-out of combustion engines has been agreed on and the Chinese government sees e-mobility as a perfect chance to surpass both the European and U.S. competitors as a leading car nation. Consequently, the demand for conventional cars (not only diesel) can be expected to decrease in the next decades.

Neither the desire to expand the lifetime of this successful business model nor the employees’ high level of qualification will be immune to the transport sector’s transformation. Instead of defending, it is high time to embrace the new technologies and to invest in workforces’ respective training and education.

National governments, especially the German government but also Members of the European Parliament should not fall for biased alarmism initiated by the car industry and parts of the unions but should rather check against the facts and develop viable solutions for the European economy that also contribute to the Paris Agreement.

Climate protection and economic success are not mutually exclusive.

Daniel Rieger is a transport policy officer with the Nature and Biodiversity Conservation Union Germany (NABU).

This article has been republished from Euractiv.

Categories: Blogs

Will Freiburg go even greener?

11 September, 2018 - 15:05

Green cities aren’t just good for the environment – they’re good for the people who live in them. Freiburg, Germany has a great quality of life with its parks, public transit and clean air. But will the city keep pushing environmentalism or rest on its laurels? Paul Hockenos takes a look.

Eco-friendly neighborhoods are great for young families, where children can play outside without fear of traffic (Photo by Claire7373, CC BY-SA 1.0)

Strolling through the city of Freiburg, tucked into Germany’s southwestern-most corner and near the Black Forest, an out-of-town environmentalist could think they had died and gone to heaven.

The Vauban area of Freiburg is particularly sustainable. It’s full of “solar neighborhoods”: the rows of modernist, wood-paneled, Rolf Disch-designed homes with thin solar PV panels for roofs are called “plus energy” houses. That’s because they generate more energy than they consume by means of passive solar heating (architecture that collects, stores, and distributes solar energy in the form of heat), state-of-the-art insulation, and electricity-producing solar photovoltaics.

Solar neighborhoods in Freiburg are completely carbon-neutral, and even produce extra energy (Photo by Mangan02, CC BY-SA 4.0)

Other buildings are climate neutral with “green roofs,” namely urban gardens atop the structures that, among other things, capture rain water that is then re-used. There are no parking spaces anywhere in view of the forest-lined streets where kids play football: cyclists, joggers, and football players have right of way there, not automobiles.

So many years after the last of the anti-nuclear-energy battles, I hadn’t expected the 1970s-hippie vibe with yellow and red Atomkraft? Nein Danke flags hanging from balconies and old caravan wagons propped up on cinder blocks behind some buildings. The kindergartens and schools are brightly painted with alternative cartoon characters and funky playgrounds dot the spacious yards between buildings. Any city kid would be envious.

Pictured here, the Susi project: collective, eco-friendly and affordable living (Photo by AndreasKlug, CC BY-SA 3.0)

One surmises that more than a few of the region’s early renewables pioneers live here, and obviously take a keen interest in keeping Vauban sustainable and livable – and thus attractive even to those who may not once have manned the barricades. So sought-after is living space in Vauban, there’s a long waiting list that just gets longer.

Vauban though is just one of Freiburg’s gems, another being the brand new city hall that is also “plus energy”, supplying all the power it needs and then some generated from 800 solar panels on its facades and roof. Freiburg, a city of 225,000, has chalked up accolade after accolade in years past for its green solutions and sustainable urban planning. Only one city in Germany has more kilometers of bike lanes, and Freiburg’s standards for the energy efficiency of new housing is a league more ambitious that the federal government’s minimum standards.

For over a decade Freiburg has been sinking its CO2 emissions, even though its population and economy has grown non-stop. Newcomers want to live there because sustainability increases the quality of life – not, necessarily, because climate change is breathing down our necks and cities like Freiburg show a way forward.

Yet the Freiburgers with whom I talked shared the impression that their city “didn’t play in the first league anymore,” as one woman told me, referring to the European soccer leagues. It has rested on its laurels, she told me, rather than keeping up with trailblazing, environmentally progressive cities such as Copenhagen. Cycling is as precarious as ever with cars and bikes vying for space, say critics. And after 16 years in office, Freiburg’s Green Party mayor (an Australian who returned to Australia) was replaced by a Social Democrat just this year, whose priorities are affordable housing and childcare.

In the bright, new offices of the city hall, Iris Basche, head of the city’s environmental planning, says that there’s a grain of truth to the accusations – better is always possible — but that Freiburg is still in the top tier of Europe’s green cities. “We’ve already accomplished the big-ticket items that were easier to do, such as greening all of the city’s buildings, including schools and the university,” she says, also mentioning the expansion of Freiburg’s public transportation to every part of the city. Now the city is taking on the sectors that are harder to crack, one at a time, like the private sector.

Freiburg, for example, has finally — after more than a decade of trying — convinced Freiburg’s manufacturing sector to go green, which means covering rooftops and empty spaces with solar panels and introducing combined heat and power (CHP) technology to capture heat generated from the production processes, which will heat thousands of homes. The plan itself is vast, covering all of the bases – mobility, energy management, efficiency, renewable energies – and includes a nationwide PR campaign to tout Freiburg’s environmentally friendly brand.

A perk that keeps Freiburg on the cutting edge is the 25% share on concessions that the city is paid yearly from Badenova, the dominant regional utility company, which pays the city around 3 million Euro annually that is spent on climate protection. Last year alone, the money went to a solar PV feasibility study for urban households, nine combined heat and power units for schools and buildings, mini urban solar parks, the Green Industry Park (see above), and others.

The new city administration’s first hurdle will be passing a new climate protection plan for Freiburg, which is currently being formulated. One version is “climate light,” an improved, updated plan that won’t ruffle many feathers, while a second version would bite deeper, upsetting and perhaps alienating constituencies like car and home owners.

The way the city administration leans might point to whether Freiburg will return to the first league, or just put on a good show among the also-rans.

Categories: Blogs

Climate change insurance is not a silver bullet

10 September, 2018 - 14:00

Developing countries have contributed the least to climate change, yet they are the most vulnerable to climate catastrophes. Now rich countries are championing the “solution” to climate catastrophes in the form of premiums for insurance schemes. Liane Schalatek and Julie-Anne Richards explain why insurance hasn’t worked in Dominica and Malawi.

Despite insurance, the costs for climate catastrophes fall mostly on citizens of vulnerable countries (Photo by Arie Kievit NLRC, CC BY-NC 2.0)

A new report from the Heinrich Böll Foundation North America highlights that developed countries advocate insurance as the main response to climate disasters to distract from their moral and legal responsibility to pay for the environmental damage they have caused.

It’s an egregious injustice: vulnerable countries are paying the majority of direct costs of climate disasters, and are also being forced to pay for the “solution” of insurance for climate catastrophes.

The report examines three case studies in detail: Dominica, the US, and Malawi.

Hurricane Maria is now regarded the worst natural disaster on record to affect Dominica and Puerto Rico and was the deadliest Atlantic hurricane since 2004. The catastrophic loss and damage as a result of Hurricane Maria in Dominica has been estimated at US$1.37 billion (or 226 percent of Dominica’s GDP).

Sovereign insurance under the Caribbean Catastrophe Risk Insurance Facility (CCRIF) provided just US$19.3 million or 1.5 percent of the cost of loss and damage incurred. While CCRIF funding had the advantage of arriving quickly, it was vastly overshadowed by traditional international assistance provided by other governments.

Source: Julie-Anne Richards and Liane Schalatek “Not a silver bullet”

The vast majority of the costs for the loss and damage and recovery will be paid for by the people of Dominica. There is no way to scale up insurance to deal with loss and damage of this size – the premiums would be prohibitive.

In comparison, the impact of Hurricane Harvey on Texas was largely covered by the government. Interestingly, the United States is one of the most heavily insured countries on earth, yet as damage from climate-related events increases, paying for loss and damage is being shifted from the private to the public sector: the exposure of the US federal government grew more than four times the rate of private sector insurance exposure. It is the public sector that is coming to the rescue of Americans in the face of climate extremes. The US and other developed countries should acknowledge that the same will be necessary for developing countries.

The study also analyses the experience of Malawi with sovereign-level drought insurance from the African Risk Capacity (ARC). ARC served as Malawi’s primary source of risk financing to address the devastating impacts from extreme weather events. In 2015, Malawi faced both a once-in-500-years flood and then an extended drought, causing US$365.9 million in loss and damage.

Source: Julie-Anne Richards and Liane Schalatek “Not a silver bullet”

ARC initially challenged that an insurance claim payout had been triggered, but ultimately paid out US$8.1 million nine months after Malawi declared an emergency. But this was not only too little too late, it also undermined the chief advantage of climate insurance—an immediate payout to address urgent needs post-disaster.

Even a doubling or tripling of insurance coverage for poor countries would have only scratched the surface of the loss and damage associated with the major climate events analyzed. In fact, insurance cannot be scaled up to the point where it would provide a viable disaster response. In each case, the bulk of support came from other sources of public finance.

In the future, developing countries will have to rely on international finance. Selling disaster insurance as a panacea, when it is at best only capable of playing a small supporting role, is not helpful.

The report shows that there is little evidence that climate insurance is a cost-effective approach. Rather, evidence shows that other options – providing governments with public funds to build up social safety nets, alternative livelihood programs, relocation funds, national contingency funds, and concessional credit – are a better solution.

However, there are ways for climate insurance to work. For example, a global solidarity fund could be established through new and innovative, polluter-pays sources of finance.  A Climate Damages Tax (on fossil fuel extraction) could be implemented equitably, and generate a significant portion of the $300 billion which will be needed by 2030 due to climate disaster losses and damages.

Liane Schalatek and Julie-Anne Richards are the authors of the report Not a silver bullet: Why the focus on insurance to address loss and damage is a distraction from real solutions.

 

Categories: Blogs

When will battery storage take off?

6 September, 2018 - 14:00

Energy industry professionals and commentators agree that industrial-scale battery storage will play a pivotal role in future energy systems. But will the battery business take off, just like solar PV, or will batteries remain a great opportunity which will never materialize? Jan Ondřich takes a look.

A Tesla gigafactory manufactures batteries that power electric vehicles (Photo by Planet Labs Inc, CC BY-SA 4.0)

Optimists point out to great success of solar PV in cutting costs down which enabled global growth in PV installations. Over the years, solar energy has gone from being a costly environmental choice to making economic sense.

Indeed, there are many similarities between solar PV and battery storage. Both battery and PV projects are easy, cheap, and quick to develop. Neither battery nor PV projects require complicated lengthy and expensive environment assessments. Entry barriers into both battery and PV project development are thus minimal.

There is however one fundamental difference between the two technologies in terms of their commercial roll-out which makes this simple analogy problematic.

The key issue inhibiting faster roll-out out of battery storage is lack of a market design that would reduce reliance of returns on volatility of electricity prices. Solar PV industry could benefit from feed-in tariff schemes which provided motivation to developers to build early to lock in higher tariffs as most of the schemes included decreasing tariffs over time for new installations.

The fact that regulated tariffs were dropping at a slower pace than solar PV prices led to developers piling into the business. This rush into the solar business then created further efficiencies in both production, installation and financing of plants which led to further price decreases. As a result, PV solar prices are on par with wholesale power prices in many countries with good solar irradiation.

On the contrary, batteries do not benefit from any scheme which would allow developers to lock in returns over a certain payback period. Inevitably the battery business turns into a race to zero as costs of batteries are coming down.

Unlike in the PV solar business, in which developers were motivated to build early as tariffs were decreasing, in the battery business it pays off to be the last one to be connected to the grid. The later a developer orders a battery the more they benefit from lower investment costs. They can then bid for better prices than those who had installed more expensive systems earlier.

The fact that industrial-scale battery projects are fully exposed to changing market prices acts as another barrier to further development of battery projects. Investors who are able to accept full merchant risk exposure require corresponding returns on their investment in exchange for shouldering such risk, which makes capital-intensive battery projects uneconomical. Banks and infrastructure funds which can provide reasonably priced capital to make battery projects viable cannot invest or lend to projects with high degree of merchant risk. As a result, many technologically sound projects are left unfunded. The European Battery Alliance, funded by the European Commission, is one effort to increase investment.

One possible way of unlocking investment into battery storage would be to introduce long-term capacity contracts. This would eliminate merchant risk exposure and attract project finance and reasonable-priced long-term equity into the projects.

Another possible solution would be to treat batteries as grid-related infrastructure rather than a kind of power generation. Under this scenario, transmission system operators (TSOs) and
distribution system operators (DSOs) could tender battery storage capacity they need to balance their grids. The cost of such balancing would then be passed on to consumers via regulated grid tariffs.

In any case, battery storage will need the right market design to replicate the success of the solar industry.

Categories: Blogs

“These trees must not die for coal”: the fight to save Hambach Forest

5 September, 2018 - 14:00

Germany’s coal industry is a stain on its reputation as a climate leader. A group of determined activists are fighting back to keep the Hambacher Forest from becoming a lignite mine. L. Michael Buchsbaum takes a look.

Coal mining in the Hambacher Forest, pictured here (Copyright L. Michael Buchsbaum)

Perhaps nothing symbolizes the struggle over Germany’s energy future more than the Hambach Forest and the adjacent Hambach lignite mine.

Comprised mainly of oaks and hornbeams, the 12,000 year-old forest is home to 18th century trees and over 140 endangered species. Previously covering over 5,500 hectares, beginning in 1978, the Essen-based RWE AG power company began cutting it down to excavate and burn the vast amounts of brown coal lying beneath. Now less than a tenth of the original canopy survives, with a core of only 200 hectares remaining.

In its place lies one of the largest holes in Europe. Between 370 to 450 meters deep, the mine stretches across an 85-square kilometer moonscape and workers annually extract some 40 million tons of brown coal.

Lignite from this and two other nearby mines are burned by five adjacent power plants that generate about 15% of the electrical needs of the German state of North Rhine-Westphalia. Lignite from this and two other nearby mines are burned by five adjacent power plants that generate about 15% of the electrical needs of the German state of North Rhine-Westphalia. But since lignite is so filthy, these plant’s combined carbon emissions alone were responsible for roughly ten percent of Germany’s total CO2 output.

Though RWE publicly states that one of their aims is to lower overall CO2 emissions, there is no escaping that their current business model’s health fundamentally relies upon generating pollution.

Symbol of a Green Movement

As Germany’s movement to stop coal has grown, so too have efforts to preserve Hambach. Over the last six years, deeply committed activists have occupied parts of the forest, building “houses” in the tallest trees along with a network of above-ground walkways in an effort to prevent the woods from being cut down.

Activists attempt to keep RWE from destroying the forest (Copyright L. Michael Buchsbaum)

On the surface, volunteers have led hundreds of nature walks, environmental education camps and tours, introducing tens of thousands of people to “Hambi,” as they’ve nicknamed the woods. Meanwhile, RWE’s massive mining machines churn closer.

Several weeks ago, RWE sent a letter to the Chancellor’s Office and the Ministry of Economic Affairs detailing their intent to mine through the rest of the forest beginning this October. It was then forwarded to the 28-member federally convened Commission on Growth, Structural Change and Employment, popularly known as the “Coal Commission” and mandated to develop a “coal exit” plan for the nation by the end of the year.

The panel, which includes representatives from politics, science, industry, trade unions, environmental organizations and citizens’ initiatives, follows upon the German democratic tradition of collective decision-making, one which successfully helped create the nation’s on-going nuclear wind-down (the last plants are on track for closure by 2022). However, by publically declaring their intent, RWE has thrown down the proverbial gauntlet.

The company’s statement created a split within the Commission. Six Commissioners including representatives of Friends of the Earth Germany (BUND), Greenpeace, the initiative “Buirer for Buir,” the Greens, and others announced their intent to resign in protest if RWE clears the Hambach.  In response, Frank Weigand, RWE’s CEO reminded them that the company is legally allowed to continue mining through 2045, stating “that the clearing measures are simply an operational necessity” that has nothing to do with discussions currently underway by the Commission.

Just the same, following a weekend of demonstrations and clashes with the police, the six Commission members expressed their support for environmental activists occupying the Hambach by joining protesters on site. Members hung wooden panels on trees with the inscription: “This tree must not die for coal”.

“Save Hambacher Forest and protect the climate,” demand activists (Copyright L. Michael Buchsbaum)

Under the forest canopy, Martin Kaiser, Executive Director of Greenpeace stated that “the hot summer of 2018 has finally reversed the perspective: the Hambach Forest does not block the excavators, but the excavators block climate protection.”

Commission member Antje Grothus, who lives in the town of Buir—once a quiet village on the edge of the Hambach Forest who’s future will be the enlarged coal pit on its doorstep, criticized the company stating “RWE escalates conflicts while creating facts: Forced relocations, compulsory expropriation. The destruction of the Hambach Forest must finally cease.”

While condemning the violence committed on both sides, the members demanded a moratorium on any and all further lignite expansion in Germany, particularly as the Commission meets.

Trying to prevent an unbearable situation

Back in Berlin, the Greens sent Federal Minister of Economics Peter Altmaier (CDU) and Environment Minister Svenja Schulze (SPD), who are jointly tasked with overseeing the Coal Commission, a letter demanding they intervene directly against the planned clearing. “If, as the responsible ministers, you take the work of the Coal Commission seriously, then now is the time to work hard for the RWE management as well as for the state government of North Rhine-Westphalia to ensure that the chainsaws remain switched off in the Hambach Forest” wrote Green Party leader Annalena Baerbock.

Surprisingly, Minister Schulze herself publically entered the dispute by joining calls for such a moratorium. She said logging activity in the embattled Hambach Forest would create an ‘unbearable’ situation” that threatens the ability of the commission to come to an agreement. “If a social consensus is to be organized, then no fait accompli may be created during such a phase.”

Back among the trees, activists from across Europe are answering a call to arms to prevent further destruction. Just as the modern Green Party developed out of demonstrations against nuclear power in the 1970s, the Hambach Forest may also become a turning point in the fight against coal.

“The crux is we have to get it right,” said Brandenburg Prime Minister Dietmar Woidke, whose region also depends on jobs within the Lausitz mining district. “There are 40 coal regions in the EU and they’re all watching what Germany does. Get it wrong and we’ll be a role model for none.”

Following a fourth meeting in Berlin in late August, the Commission will travel to the Lausitz in late September for its first external meeting. They have also been invited to tour the Hambach Forest, as long as it still stands.

Categories: Blogs

Will energy efficiency stall climate disruption?

4 September, 2018 - 14:00

The world could hit its sustainable development goals if we invest in energy efficiency. But energy efficiency must be coupled with reduced consumption to be effective, argue David Suzuki and Ian Hanington.

Energy efficiency could play a major role in reducing greenhouse gas emissions (Photo by Jakob Nilsson-Ehle, CC BY-SA 2.0)

In the race against the increasingly widespread and devastating consequences of climate change, solutions tend to focus on products and technologies. Renewable energy, electric vehicles, biofuels, carbon capture and storage and geoengineering get much of the attention, in part because they lead us to believe we can continue acting as usual. Those technologies must be part of the solution, but we must also consider our wasteful behaviours.

Conserving energy means consuming less, which isn’t a hallmark of our consumption-based economic system. Technology also comes into play with cutting energy use. Many experts argue that energy efficiency could play a major role in reducing greenhouse gas emissions, especially in industrial nations like Canada and the U.S., where we tend to waste a lot. Others point to a paradox whereby climate gains from efficiency are offset by reduced costs that increase energy demand.

One third of the world’s energy is consumed by buildings, but most are inefficient. According to Jennifer Layke, global director of World Resources Institute’s Energy Program, “Just implementing today’s best practices could cut global energy demand by one-third by 2050.”

A study in Nature Energy concluded that energy efficiency without expensive (and so far commercially unproven) technologies like carbon capture and storage could help the world limit global average temperature rise to 1.5 C above pre-industrial levels.

It seems simple. So, what’s holding us back? The desire of people to go on consuming as we’ve been encouraged to do since at least the end of the Second World War is one factor. Layke argues we also need to boost energy efficiency’s “cool factor.”

She and the scientists behind the Nature Energy study outline the many benefits of energy efficiency beyond reducing climate impacts. They also offer examples of technologies that will boost energy efficiency, including multi-use smart phones, programmable thermostats and electric autonomous vehicles.

“Improving the energy efficiency of buildings is a fast, cost-effective way to manage carbon pollution, spur economic development and enhance local air quality,” Layke wrote. It’s also a way for individuals and businesses to save money by reducing energy costs.

The authors of the Nature Energy study say a global push to energy efficiency would have the side benefit of helping the world meet sustainable development goals, including reducing hunger, increasing good health and well-being and providing affordable clean energy for everyone.

Not everyone is convinced. Energy writer Andrew Nikiforuk argues in the Tyee that efficiency often spurs increased demand and does little to cut overall energy use. It’s known as the Jevons Paradox, after English economist William Stanley Jevons, who noticed in the mid-1800s that as coal-fired steam engines became more efficient and inexpensive, their use became more widespread, leading to increased coal burning.

“Oil-fired and electrical driven technologies have honoured the paradox with panache,” Nikiforuk writes, noting that efficiency caused aircraft fuel costs to drop, which led to cheaper fares and more passengers, and thus more flights. As boilers in Britain became more efficient, people started increasing temperatures in their homes.

According to Nikiforuk, “The only way to reduce total energy consumption levels, say in the aviation industry or any other sector, is to limit the number of planes, travellers and airports. Higher energy prices and higher taxes will do that. But that means a shrinking economy and a radical rethink about the dominant role of technology in our decision-making.”

Carbon pricing, through carbon taxes or cap-and-trade systems, can create disincentives for using fossil fuel energy while encouraging clean energy, and regulations can also help with the shift from dirty to clean energy and energy conservation and efficiency. But energy efficiency must be coupled with reduced consumption to be effective.

What’s really needed is a radical shift in our way of thinking. Making buildings more energy efficient is good, but people in those buildings still have to use energy wisely. Consuming, flying and driving less doesn’t necessarily mean living a poorer life. Focusing on relationships with family, friends and community and spending time in nature rather than accumulating stuff and constantly being on the move bring greater well-being and happiness.

Addressing climate change means heeding scientists’ warnings that climate change threatens civilization, and confronting the crisis with every tool available, from renewable energy to efficiency to wasting less food, energy and other goods.

This article was written by David Suzuki with contributions from Senior Editor Ian Hanington. It has been republished from the David Suzuki Foundation.

Categories: Blogs

Grassroots solar energy in South Korea

3 September, 2018 - 14:00

Korea’s citizens have been organizing their own energy cooperatives, and the new feed-in tariffs could encourage even more investment. Yi hyun Kang talks to stakeholders about their role in the energy transition.

Solar and Wind Energy Cooperative members in front of their 4th power plant (Photo by Won-gook Kim, Solar and Wind Energy Cooperative)

Last July, there was good news for citizen energy cooperatives in South Korea. The government introduced Feed-in-Tariffs (FIT) for plants of less than less than 100kW built by cooperatives, farmers or fishermen to encourage small scale solar PV plants. Although the FIT is limited to small scale power generation, this can boost more initiatives by citizens.

However, a grassroots movement for the energy transition had already begun. The very first energy cooperative was established in Seoul in January 2013. Now there are more than 100 energy coops officially registered across the country. Local NGOs and environmental groups have been particularly active in organizing energy cooperatives, but more diverse actors are emerging. For example, there are energy coops by churches, Buddhist temples and other religious groups.

Two main factors are said to contribute to the emerging of Korean energy cooperatives: shock from the Fukushima disaster, and the Cooperative Act enacted in 2012 which made the establishment of cooperatives much easier than before.

Won-gook Kim is the general manager of the ‘Solar and Wind Energy Cooperative’, which is one of the pioneers among Korean energy cooperatives.

“The Fukushima disaster influenced a lot. One year after the accident occurred, local groups including consumer coops, environmental NGOs and progressive parties organized a group called ‘Citizens’ Solidarity for Making Nuclear-free World’. I joined the group as the representative of the local Green Party members. After a while, one person suggested building a citizen’s solar PV plant. That’s how we began the project.”

Established in the Eunpyeong district of Seoul in 2013, they now have 330 members, running five solar PV power stations built in leased public space in the local area. The overall capacity is 332.33 kW. They are planning to build six or seven plants until next year, adding 600-700kW.

Besides energy generation, they are running five ‘Energy Supermarkets’ in local shops such as a bookstore or consumer cooperatives. In these ‘supermarkets’, they provide information on the energy transition and energy efficiency, as well as selling energy-saving products. The long term plan is to open their own ‘supermarket’ where they can run various programs. This is the way they try to meet local citizens directly and talk about renewable energy.

The Korean government policies were not always favorable for energy coops. The first FIT policy was adopted in 2001 but repealed was after ten years. Instead, Renewable portfolio standard (RPS) was adopted. The main reason of the change was concerns over electricity price increases. The lack of acknowledgment about citizen energy made their activities difficult. However, Kim says that their democratic decision making structure in a cooperative is very helpful to overcome difficulties.

“We had a hard time in 2015. Without FIT, we had to sell generated electricity through either Renewable Energy Certificates (RECs) or System Marginal Price (SMP) scheme. But the price fell down dramatically around that time and deficit was expected if we have built more plants. However, we discussed thoroughly about the issue with our members and decided to build plants, because our business is not for profit, rather for energy transition.”

Besides citizen energy cooperatives, some local governments actively promote renewable energy and energy efficiency. For example, Seoul has promoted ‘energy self-reliance towns’ as part of its campaign to reduce nuclear power in Korea.

The aim of this policy is to encourage citizens in finding solutions collectively for energy saving, energy efficiency and energy transition. Now there are more than 75 energy self-reliant towns. However, government-led projects still have a relatively low rate of active participation.

The Solar and Wind Energy Cooperative participates in local events. (Photo by Won-gook Kim, Solar and Wind Energy Cooperative)

Young-ran Kim is the chairman of the Gangnam Solar Power Cooperative in Seoul and the executive director of the National Association of Solar Power Cooperatives. She says that “compared to big projects by major companies, small scale community energy projects are not actively supported by the national and local governments. The policy should promote citizens’ participation with a more detailed plan.”

Won-gook Kim points out that energy cooperatives themselves need to make an effort to encourage citizens’ participation.

“The number of energy coops in Korea is increasing for sure. But I am worried because many energy coops in Korea are not really following the cooperative principles. If they don’t engage their members, they can’t be called ‘citizen energy coops’. There is room for improvement.”

South Korea has a long tradition of cooperative organizations within communities even before the cooperative concept was introduced in the 20th century. The knowledge and experience of community engagement still exist in the society. If the new FIT can be combined well with such tradition, the Korean energy transition can boost the energy democracy.

Categories: Blogs

Argentina, between fracking and the takeoff of renewables

31 August, 2018 - 14:00

Argentina has incredible solar and wind potential. So why is the government pushing fracking in the Vaca Mauerta field isntead of decarbonizing? Maximiliano Proaño takes a look.

Right now, Argentina relies heavily on fossil fuels – can renewables change that? (Photo by Alena Grebneva, CC BY-SA 4.0)

While other countries decarbonize, Argentina has stagnated: 86% of its energy mix comes from gas and oil. In 2017, non-conventional oil production grew by 30% and unconventional gas by 22.2%.

Everything indicates that the production of non-conventional hydrocarbons through fracking will continue to grow due to the current government’s interest in the Vaca Muerta field. At the same time, average electricity bills have skyrocketed: adjustments and elimination of subsidies have caused electricity bills to spike in Buenos Aires by 562% between 2015 and 2017.

The takeoff of renewable energy in Argentina has turned out to be more complex than expected. By 2017 only 2% of the electricity mix was composed of renewable energies, but some estimates indicate that 2018 is the year renewables will take off in Argentina. The recent update of the regulatory framework has made the county more interesting to energy investors. Argentina aims to generate 8% of its energy mix from renewable energy by the end of 2018. This percentage will increase to 12% in 2019, 16% in 2021, 18% in 2023 and 20% in 2025.

Image via Norton Rose Fulbright LLP

There has been a massive decrease in total installed cost of renewable energies: between 2010 and 2017, prices for solar PV projects fell by 73% and the installed costs for newly commissioned onshore wind projects fell by 22%. But rather than taking advantage of this trend, Argentina’s government has pushed to develop Vaca Muerta, the world’s second-largest shale gas and fourth-largest shale oil reserves, as a ‘solution’ to Argentina’s dependence on fossil gas in its energy mix.

President Macri claims that developing Vaca Muerta is “the country’s way to have energy and grow.” In the past three years, drilling activity has increased, and shale gas production is projected to triple this year: in 2015, the country produced 3.3 million cubic meters per day, and in 2018 it will produce 12.6 million cubic meters per day.

Nevertheless, a new report presented to the UN highlights the adverse economic, social, and cultural rights impacts of fossil fuel extraction at the Vaca Muerta shale formation on local residents and indigenous Mapuche communities.

It also highlights the project’s massive contributions to climate change. Lucy McKernan, Geneva Representative for the Global Initiative, says: “Argentina’s oil and gas development in Vaca Muerta is trampling on the rights of the indigenous peoples of the Neuquén province, polluting the environment, and impacting the health, water, housing, and cultural rights of these people, without effective consultation or obtaining their prior consent to the development”.

But despite the risks, the government decided to subsidize the price of gas and oil for companies until 2020, fixing it in US$7.5 per BTU million and US$72 per barrel of oil. Furthermore, the government committed the construction of infrastructure to reduce costs for companies.

While fracking goes forward in Argentina with Vaca Muerta, renewable energies in neighboring countries such as Uruguay and Chile are growing rapidly. During the last years after some successful tenders, it is possible to observe that the take-off of renewables has begun.

In 2016, Argentina also carried out a renewable energy tender called RenovAr, seeking to contract 1 GW of renewable energy. The tender was technology-specific, with capacity allowing for 600 MW of wind and 300 MW solar PV (although individual projects were limited to 100MW each). In addition, the tenders allowed for 65 MW biomass, 15 MW biogas and 20MW small hydropower. RenovAr resulted in 1,109 MW of awarded power purchasing agreements, far above the original goal.

The second tendering round, RenovAr 2, was awarded in November 2017  and offers for 228 projects for 9,391.3 MW in 21 provinces, compared to the initial target of 1,200 MW of capacity.  Prices fell compared to the last tender, going from a 55 to 57 US$/MWh for wind and solar to values that today are between 40 and 42 US$/MWh respectively. In total, the project involves 147 projects awarded in 21 provinces for a total of almost 4500 MW, where 41 are solar, 34 wind, 18 biomass, 14 small hydroelectric, 36 biogas and 4 biogas landfill.

Argentina has the potential to recover its energy autonomy through renewable energies, such as solar, biogas and wind, and to stop relying on fossil fuels. The northwest region of Argentina is one of the top four locations in the world with the greatest potential for thermal solar energy generation.

Moreover, solar measurements throughout the country show that 11 provinces in Argentina have high potential for the installation of photovoltaic panels. Around half of the country, specially the southern región (Patagonia) but also some central regions (Buenos Aires and Santa Fe), offers a potential capacity factor of 40% or more.

With Argentina’s enormous potential for renewables, it makes no sense for the government to subsidize a project like Vaca Muerta. It is is socially, environmentally and economically unviable to choose fossil fuels over renewable energies and citizen and cooperative energy projects.

Categories: Blogs

European carbon trading drives up fossil fuel prices

29 August, 2018 - 15:29

The price of pollution across Europe is about to rise atmospherically, says Lee Michael Buchsbaum. And for the first time, new onshore wind and solar can compete directly with the short-term costs of generating electricity from existing coal and gas plants.

There’s no reason for new coal to be mined in the Hambacher Forest, pictured here (Copyright L. Michael Buchsbaum)

By the third week of August, the European carbon trading price or European Emissions Allowance (EUA) hit and exceeded €20 for a metric ton of carbon pollution, the highest prices seen in over a decade.

But beyond the EUA prices, the actual costs of generating electricity from both coal and gas have also surged since the beginning of 2017 as imported coal and gas prices have risen. Measured together, over the last 18 months, the UK energy think-tank Sandbag reports that average year-ahead coal generation costs have increased by 72% to €46/MWh, and gas generation costs have increased by 43% to €49/MWh.

Facts now apparently underscore an inherent economic weakness in fossil generation compared to solar and wind: rising fuel and delivery costs that are tied to depletion, speculation-based commodity markets, and now speculation-based pollution markets that drive up prices.

Conversely, over the last 18 months, wind and solar generation costs have been trending in the opposite direction. In Germany’s two most recent renewable auctions, the lowest wind and solar bids were around €38/MWh, almost €12 lower than current gas prices. Thus, according to Sandbag, rising carbon, coal and gas prices now mean that for the first time new onshore wind and solar can compete directly with the short-term costs of generating electricity from existing coal and gas plants.

BREAKING: New Wind & Solar now competes even with existing Coal & Gas:
€20 carbon and rising coal & gas prices creates new EU tipping point
https://t.co/V07lnpk8XU #EUETS #renewables pic.twitter.com/rOB6xB8oE7

— sandbag.org.uk (@sandbagorguk) August 24, 2018

But that’s just at today’s prices. Since May 2017, the price of EUAs has gone up over 310 percent–over 120 percent just since the beginning of 2018. Driving them higher is the fact that there are only five months to go before the Market Stability Reserves (MSR) start to be reduced by another 24 percent of the outstanding cumulative surplus each year through 2023.

Indeed, the market is now counting down to the biggest supply squeeze since the European Trading System began. And because all utilities and industrial polluters need certificates to cover the greenhouse gas emissions they produce, the price of pollution across Europe is about to rise atmospherically, economically speaking.

Going forward, a recent analysis by Carbon Tracker posits that carbon prices will jump from €25 per ton by the end of this year to €35/ton next year as reforms kick in, jolting fossil generation costs higher. “This is an important milestone for the EU emissions trading system and something that seemed like an impossibility just a year ago,” said Jahn Olsen, an analyst at Bloomberg New Energy Finance. “There was a feeling that the recently finalized reform was the ‘last chance saloon’ for the ETS. The recent price movement is a strong indicator that the EU finally got it right.”

But prices won’t stabilize anytime soon. Carbon Tracker predicts the MSR measures will send them between €35 to €40 a metric ton on average by 2023 with rates spiking towards €50 over the winters of 2021 and 2022.

Moreover, according to an estimate by Berenberg Bank, the foreseeable long-term shortage for CO2 allowances could cause prices to skyrocket to even €100 per ton in 2020. While certainly bad news for consumers locked into buying electricty from coal-dependent utilities, those numbers are terrible for firms like RWE AG, the worst polluter in Europe. Beyond €50 per ton, many lignite-fired power plants (of which RWE has a fleet of over 20 in Germany alone), will in most cases no longer be profitable to operate.

Of course, RWE is doubly wedded to lignite. Beyond burning highly polluting brown coal, it extracts almost 100 million tons of it from its three German mines including the giant Hambach Mine. There, according to RWE, every day, workers can extract 240,000 tons of coal or cubic metres of overburden as the mine’s machines creep ever closer to the ancient, “occupied” Hambacher Forest, site of on-going protests both against RWE and lignite usage in general.

0n a meadow kitchen roof with cops all around needing outside support not for us but for the forest destroyed towns, climate and the Planet Earth itself the gov and state has more than failed us pic.twitter.com/NhgWTUpNXQ

— Hambacher Forst (@HambiBleibt) August 28, 2018

While actively battling protesters in court and delaying any proposed coal exit, RWE, like many European producers, has likely stocked up on emission allowances to forestall their affects. Die Welt newspaper reports that RWE has probably bought enough EUA (at around €7 per unit) to last through 2022. But afterwards, Frank Peter, vice-president of Agora Energiewende, predicts that a rapidly rising CO2 price could swiftly render Germany’s lignite sector unreasonable economically.

One solution for utilities is to switch to gas instead of coal-fired generation since it produces roughly half as much CO2 pollution and only requires about half the allowances needed. But increasing gas demand is already reducing constricted supplies, prices of which are currently trading at the highest level for this time of year in at least two decades. Since January, the year ahead gas price has climbed over 28 percent (coal has also risen 30%).

According to the UK Telegraph, prices in the UK for winter gas are already spiking 50 percent higher than this time last year and prices may rise further. Dutch and German traders are also paying €25.58/MW for winter gas compared to €17.02/MW this time last year. After being depleted from last winter’s “Beast from the East,” replenishing reserves has become more difficult and expensive because North Sea production is dwindling.

In addition, production and fracking in the Netherlands is due to fall by 25 percent compared year-over-year after the government agreed to wind down output from the giant Groningen gas field following earthquakes. While certainly there’s no shortage of fossil gas available worldwide, many suppliers would rather sell into Asia where returns are up to 25% higher for LNG cargoes. Meaning in order to buy fracked LNG gas from the US or conventional supplies from elsewhere, Europeans are going to have to pay ever more.

Categories: Blogs

Nord Stream 2 pipeline flies in the face of the Paris Accord

28 August, 2018 - 15:00

Why is Germany still planning on building another pipeline for Russian gas? Investing money in new gas infrastructure makes no economic sense, as falling costs for renewables could cut gas consumption in half by 2030. Paul Hockenos takes a look.

Nordstream 2 will be a costly millstone around Germany’s neck by the 2020s (Photo by Kremlin.ru, CC BY 4.0)

It’s nothing short of dumbfounding that the furious debate over Nord Stream 2 – the controversial natural gas pipeline that will run beneath the Baltic Sea from Russia to Germany – completely ignores Europe’s commitment to transition to renewable energy and lower greenhouse emissions.

The debate over the gas conduit has raged in Europe and across the Atlantic as if the 2015 Paris climate accord, the purpose of which is to keep global temperatures beneath a two-degree Celsius rise, never happened – and as if natural gas has nothing to do with global warming.

It’s such a farce – the environmental arguments against the Gazprom cash cow so overwhelming – it makes one wonder whether Germany and its peers take their renewed pledges to protect the climate seriously at all.

The very best reason to nip Nord Stream 2 in the bud – the construction of which has begun, though key construction permits are outstanding – is that it’s already obsolete, and will be a very costly millstone around Germany’s neck by the 2020s when it’s supposed to be operational. Europe and Germany, the latter Nord Stream 2’s primary client, simply don’t need another gas source: they have access to more than enough gas from Russia and other suppliers. And in the near future Germany will need less, not more, as it weans itself off fossil fuels (which natural gas is, despite the industry’s deceitful campaigns to convince us to the contrary.)

Natural Gas Supply: No Need for Another Baltic Sea Pipeline.  Anne Neumann, Leonard Göke, Franziska Holz, Claudia Kemfert, Christian von Hirschhausen In: DIW Weekly Report 8 (2018), 27, page 241-248

There’s already one Nord Stream pipeline, which boasts an annual capacity of 55 billion cubic meters (bcm), alone more than half of Germany’s annual consumption. But it and other sources thoroughly satisfy European demand, as recent reports (in English) from the German Institute for Economic Research and environmental think tank E3G conclude.

Indeed, back in 2006 and 2009 there were gas crises in Europe (let’s not forget, caused by Russia) but conditions now are very much changed. The EU has addressed the over-reliance on Russian natural gas by diversifying sources and expanding gas infrastructure.

“The European gas market at the end of 2019 will not be anything like the market in 2009,” writes Siobhan Hall, EU energy editor at Platts, a media outlet for the energy sector. “It will be vastly more resilient to gas supply shocks from any direction, thanks to the EU’s efforts to tackle the vulnerabilities exposed by the 2009 crisis.” Other experts, including the EU’s Court of Auditors, underscore that the figures regularly used in the debate for projected natural gas consumption in Europe are dramatically inflated and have been for years.

Moreover, new scenarios show that even if Russia cut off gas exports in the thick of an arctic winter, Europe could switch to other sources – not least highly diversified liquified natural gas (LNG) deliveries — and survive the icy climes while cozy in their living rooms. In fact, the studies show that Europe, and Germany on its own too, now has abundant extra capacity on tap: mostly in terms of LNG, which could be tripled upon demand, if necessary, as well as plentiful gas in storage facilities.

And then there’s the scandalously unspoken climate protection goals: Europe’s consumption of gas is scheduled to diminish, steadily, between 2020 and 2050 when Europe will run almost exclusively on renewables. Simulated models show that globally between 2020 and 2030, natural gas consumption will drop by half, and then by 2050 be nearly zero as renewable energies, including organic bio-gases, take over.

As for Europe, which has pledged to cut in greenhouse gas emissions compared to 1990 levels 40%, some models also show that in light of the falling price of renewables, a 50% reduction of gas consumption is possible by 2030.

In Germany, natural gas is responsible for 20% of carbon emissions – it’s not climate friendly. And, furthermore, there are renewable gas alternatives that are being expanded: biogas, power-to-gas, other synthetic fuels. The latter are in their infancy and will, in part, replace the natural gas we need as energy efficiency and electrification reduce consumption.

Of course, the gas industry underscores that gas is (or was) foreseen as a bridge technology. As coal and nuclear dwindle in energy supplies, wind and power must be balanced out. But neither does Europe need yet another source of natural gas to do this nor is there a consensus anymore on gas’s importance to the global Energiewende.

The DIW report charges that “in the long term, the importance of fossil natural gas will decrease in Germany’s energy supply.” It concludes that, “In view of low electricity prices for the foreseeable future, high overcapacities in the conventional power plant sector, and rapid progress in the development of renewable energies and storage technologies, fossil natural gas will no longer have any significance in the electricity industry as a bridge technology.”

This battery of arguments should lead the way in killing off Nord Stream 2 – it’s not too late. There are other good reasons too: the pipeline’s high cost to European consumers, the concerns of the Eastern Europeans, the geopolitics of reliance on Russia, Russia’s pariah status since annexing Crimea in 2014, and the vast environmental damage caused by its construction.

But sometimes the most compelling reasons are those closest to hand: we simply don’t need the gas from Nord Stream 2. And, scandalously, it flies in the face of the Paris accord after a sizzling summer that has only heightened its urgency.

Categories: Blogs

No longer a novelty, clean energy technologies boom all across the US

27 August, 2018 - 15:00

Today, the U.S. has about six times as much renewable energy as it did ten years ago, and some states aim to be 100% renewable by 2050. Julia Pyper explores a new report about the American democratization of renewables, energy storage and electric vehicles.

It’s easy to forget how much has changed in a relatively short period of time (Public Domain)

It was 1997, and stakeholders were working hard to help craft the first renewable energy standard in the State of Massachusetts, which ultimately passed as part of an electric utility restructuring act. At that time, the notion that Massachusetts would be one of the top solar states in the country was almost laughable, recalls Rob Sargent, who currently leads the energy program at Environment America.

Today, renewable energy is taking off in virtually every state in the nation.

A new report and interactive map released this week by Environment America takes stock of U.S. clean energy progress to date. It finds that leadership is no longer concentrated in select parts of the country, but that it is distributed across states with varying economic and democratic makeups.

“You’re seeing an evolution that’s happening everywhere; and it will be interesting to see what will happen 10 years from now,” Sargent said.

The Renewables on the Rise report highlights how much has changed in a relatively short period of time, which can be easy to forget.

Today, the U.S. produces nearly six times as much renewable electricity from the sun and the wind as it did in 2008, and nine states now get more than 20 percent of their electricity from renewables.

Last year, the U.S. produced a record amount of solar power, generating 39 times more solar power than a decade ago. In 2008, solar produced 0.05 percent of electricity in the U.S. But by the end of 2017, solar generation reached more than 2 percent of the electricity mix — enough to power 7 million average American homes.

Wind has also seen dramatic growth over the last decade. From 2008 through 2017, American wind energy generation grew nearly fivefold. Last year, wind turbines produced 6.9 percent of America’s electricity, enough to power nearly 24 million homes. And the forecast shows even more growth as America’s offshore wind industry begins to take off.

Meanwhile, the average American uses nearly 8 percent less energy today than a decade ago, thanks in large part to energy efficiency improvements.

The U.S. transportation fleet is also transforming. Last year, all-electric vehicles broke past 100,000 annual sales for the first time, with 104,000 units sold. As recently as 2010, the number of EVs on American roads numbered in the hundreds, even including plug-in hybrid vehicles. Now there are more than 20 pure-electric models on the market, ranging from affordable commuter cars to ultra-fast luxury vehicles.

On the energy storage front, nine of the 10 states that have added the most battery storage capacity to date had zero utility-scale battery capacity in 2008. California, Illinois and Texas are among the battery storage state leaders. In one benchmarking development, a bid to build solar-plus-storage in Arizona beat out competing bids for new natural-gas peaker plants.

Environment America’s state-by-state breakdown offers a handy way to track clean energy deployments across the country. To view progress on solar, wind, electric vehicles and energy storage by state, explore the interactive map below.



The report leverages data from the U.S. Energy Information Administration, the American Council for an Energy-Efficient Economy, the Auto Alliance and the Solar Energy Industries Association, among others.Thanks to policies like the renewable portfolio standard Sargent and others helped to pass, the report shows Massachusetts saw 247-fold growth in solar generation over the last decade, with an increase from 10 gigawatt-hours in 2008 to 2,554 gigawatt-hours in 2017. Massachusetts is now a top 10 state for solar growth.

California is the clear U.S. solar leader, but solar market expansion isn’t limited to politically progressive states. Georgia, for instance, is also on the top 10 list. The Southern state produced just 1 gigawatt-hour of solar in 2008. A decade later, Georgia generated 2,364 gigawatt-hours of solar — just shy of the production in solar-incentive-friendly Massachusetts.

Source: Environment America

In other parts of the country — and Texas, Oklahoma, Kansas, Iowa and North Dakota in particular — strong wind resources have made wind power the predominant renewable energy source.

Source: Environment America

Announcements such as Xcel Colorado’s proposal to retire two coal plants and deploy 1,800 megawatts of solar and wind, paired with 275 megawatts of battery storage, and NV Energy’s plan to build more than 1,000 megawatts of new solar and 100 megawatts of battery storage, seem to indicate the U.S. clean energy boom will continue.

But that’s not a guarantee. Distributed energy resources are facing pushback as utilities figure out how to integrate and manage new technologies on the grid. Large-scale renewables are also coping with opposition as these resources compete head-to-head against conventional energy sources, including coal, nuclear and even natural gas.

“People are starting to notice that renewables are happening, but they still think of it as a niche part of our energy mix — and it is a small fraction of it,” Sargent said. “But if renewable energy keeps growing at the rate it’s grown over the past 10 years, the notion that you could meet all our current electricity needs with renewable energy is not that far-fetched.”

Getting all the way to 100 percent renewable energy is controversial, though, both technically and politically. Even in California, where there’s widespread support for renewables, a 100 percent renewable energy proposal failed in the state legislature last year. And while the bill (SB 100) is now moving through the legislature once more, lawmakers have had to loosen up the language around “100 percent renewable energy” to also include “eligible zero-carbon resources.”

Still, Sargent is generally optimistic about the future.

“There are very, very few places where someone adopts a clean energy policy and then says, ‘That was stupid; let’s get rid of it,’” he said. “Partly because once you do it at scale, it’s cheaper. Also because people see it and like it and want more of it — there’s growing public acceptance of it.”

The challenge he sees is that while clean energy is growing substantially in states across the nation, there will ultimately need to be some form leadership at the top, at the federal level — which he said doesn’t exist right now.

“It’s frustrating to have one foot on the accelerator and one on the brake,” Sargent said. “We’d go a lot faster if we weren’t doing that.”

This article has been republished from GreenTech Media.

Categories: Blogs

Devil in the detail of Europe’s 2050 transport model

21 August, 2018 - 14:00

As the EU puts together a mid-century climate strategy, Carlos Calvo Ambel explains how the Commission’s choice of modelling could be severely underestimating what emission cuts can be gained from the transport sector.

Electric trucks are not included in the Commission’s models, despite the fact that some have already come onto the market come onto the market (Photo by Spielvogel, CC0 1.0)

Three years ago, EU climate Commissioner Miguel Arias Cañete was delighted with the outcome of the Paris Agreement. Years of negotiations had finally paid off. Now the Commission is finally about to undertake work that will determine what Europe needs to do to meet these goals.

By December, the Commission needs to prepare a strategy outlining options for the future. Crystal balls are unreliable so instead the Commission will be relying on modelling. This may sound like a technicality but it’s actually very important as the assumptions and the working of the Commission’s model will be central to the whole decarbonisation strategy.

Unfortunately the Commission’s chosen model, PRIMES, is a black box veiled in secrecy. And here, the devil is in the detail.

For the last couple of years we have all been running around Brussels trying to get a decent 2030 policy in place. We now have 2030 targets but are still battling over how to achieve these.

For example, as part of discussions on CO2 standards for cars, vans and trucks. But in the climate world, 2030 is literally just around the corner. 2050 is the next step.

No econometric model is perfect. In the case of PRIMES, it is used to estimate what is expected to happen in the absence of policy, and the most cost-effective way to achieve specific goals.

Choices need to be made on what to input and, by and large, these are made off the back of extensive research.

But given the importance of this exercise that will shape European economic policy for decades, we cannot afford to repeat the mistakes made in previous modelling exercises.

Transport & Environment has analysed the details of how transport is dealt with in PRIMES and we did not like what we found.

PRIMES is a conservative model that is unable to envision disruptive changes. Transport has the potential to reach zero emissions by mid-century but the Commission repeatedly under-evaluated this in previous modelling and attributed, for example, two times more emission reductions for buildings than transport in the 2030 strategy.

As the model finds what are, theoretically, the most cost-effective options, transport is not expected to reduce emissions much because it seems too expensive. There has always been reduction in transport that are cost effective.

The issue here is that the model should reflect the fact that potential cost-effectiveness in transport has considerably improved compared to the past, and it should allow for the sector to reach zero emissions by 2050.

In another example, PRIMES was used in the 2018 heavy-duty vehicle CO2 emission standard proposal, but despite some electric trucks already being on the road with many more planned and production lines being built as we speak, PRIMES does not foresee a single battery electric truck coming to market by 2030, and the electric truck’s potential impacts have to be calculated outside the model.

These are just two obvious examples. But the list of what PRIMES misses isn’t short: its electric vehicle battery prices were insanely high, with values for 2030 and 2050 above current market values.

It also suggests using fossil gas as a way to bring emissions down in ships or trucks, when by definition a fossil fuel cannot decarbonise; it penalises electric vehicles, as range would discourage buyers, when in reality ranges of above 500 km are around the corner.

Moreover, it does not consider the sustainability constraints on biofuel production; it expects surprising efficiency gains in aviation… It went as far as not even considering transport-specific technologies during a stakeholder consultation on technology cost assumptions.

However, our main concern is its opaqueness. Our analysis of PRIMES required plenty of desk work, looking into hundreds of pages from many different sources and trying to guess what is included.

When we don’t know the details of what goes in, it is impossible to ensure that what comes out is a good reflection of a sustainable future transport sector.

We don’t ask the Commission to predict how people and goods will move around the continent in 30 years time.

But we do ask them to consider all existing and potential decarbonisation options in the sector. Include the wrong assumptions and the challenge will look both unbearable and unaffordable.

This will mislead many to once again postpone major changes in the sector that is the largest source of greenhouse gas emissions on the continent.

Better the devil you know than the devil you don’t. Without the details, the 2050 strategy will be the latter, and an opportunity to clean up transport will have been lost. Europe should lead again on renewable energy, smart solutions and clean transport technologies.

This article has been republished from Euractiv.

Carlos Calvo Ambel is climate and analysis manager at Transport & Environment.

Categories: Blogs

A Climate-Friendly Response to Trump’s Protectionism

20 August, 2018 - 14:00

Rather than allowing itself to be dragged into Donald Trump’s destructive trade games, the European Union should turn them on their head, by introducing a CO2 levy, including border adjustment. Such a response would help protect the environment and boost the EU’s own international clout. Barbara Unmüßig and Michael Kellner take a look.

A duty could be imposed on emissions-intensive imports like steel at the EU border (Photo by Mathijs Huis, CC BY-NC-ND 2.0)

As US President Donald Trump translates his “America First” strategy into import tariffs, and the European Union prepares to adopt countermeasures moving the global economy toward a trade standoff, the real challenge facing the two economies – indeed, the entire world – is being ignored. That challenge is to shape the global economy, including trade, so that it finally respects the planet’s natural boundaries.

Trump’s trade agenda is putting progressives into a paradoxical position. For many years, they have been denouncing the current trade system as both unjust and ecologically destructive. But in the face of Trump’s nationalist protectionism, with its echoes of the fatal mistakes of the 1930s, some feel obliged to defend the current system.

Neoliberal defenders of the status quo now see a political opportunity. Lumping progressives together with Trump as “protectionists,” they are denouncing the justified wide-ranging protests of civil society against mega-regional deals like the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada, and the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the United States.

In order for progressive politics to succeed, its proponents need to go beyond defending the existing trade system against Trump. They need to go on the offensive, which means pressing for reforms intended to create a just, equitable, and rules-based international trade order. Otherwise, Trump-style economic nationalism will continue to resonate with a large share of the population, in the US and elsewhere.

For starters, with the EU debating countermeasures to US tariffs of 10% on aluminum and 25% on steel, it is worth looking beyond the economic significance of the dispute, to the ecological aspects of the commodities in question. For example, steel production, which uses metallurgical or “coking”coal, accounts for roughly 5% of global CO2 emissions.

This is not inevitable. Steel can be replaced by less emissions-intensive alternative materials. It can also be produced with much lower emissions. Swedish producers are researching virtually CO2-free steel production using electricity and hydrogen acquired from renewable energy sources. And the German multinational thyssenkrupp is developing a process using exhaust fumes from steel production as a feedstock for chemical products and synthetic natural gas, lowering carbon pollution.

But these alternatives will not be viable as long as the established steel industry is permitted to use the atmosphere as a free dump for CO2 emissions. Economists across the political spectrum agree that one key to limiting greenhouse-gas emissions is to make it more expensive for companies to produce them – so expensive that climate-friendly options become cheaper in comparison, and thus competitive. That is why the German Green party is calling for a floor price on CO2 emissions to be established as part of the EU’s Emissions Trading System. The state of California has already done so in its trading scheme. We want to lead the way, together with France, in Europe.

Such proposals have met with strong resistance. Many argue that a high price for emissions in Europe would give foreign producers a competitive edge in the EU market. Moreover, because production would simply move abroad, the logic goes, the environment would ultimately be no better off overall.

Despite its weaknesses, this argument has impressed European policymakers. But there is an obvious workaround: a duty could be imposed on emissions-intensive imports – like steel, cement, and aluminum – at the EU border. This would be an important step toward a just, climate-responsive trading system. The duty would be fair, because environmental rules would apply equally to European and foreign products. And as long as the same levies were imposed on locally produced goods, such “border carbon adjustment” would not violate World Trade Organization rules.

By enabling countries committed to environmental protection to push back against those that are not, this strategy would help align the global trading system more closely with ecological imperatives. Policies such as border carbon adjustment are not narrow-minded national protectionism, but a necessary reaction by countries committed to climate protection. Nor is it a new idea: every climate bill that failed in the US Congress in 2009 included such a mechanism.

Rather than allowing itself to be dragged into Trump’s destructive trade games, the EU should introduce border carbon adjustment in order to foster a climate-friendly system. French President Emmanuel Macron is already a vocal supporter. A group of researchers representing MIT, the German Institute for International and Security Affairs, and other leading institutions, has already developed a set of concrete proposals regarding how to implement such a program. By doing so, the EU would make the case for fairer and cleaner trade.

By demonstrating that a lack of commitment to climate protection comes with a price, such a response could spur change elsewhere, including the US. For example, it might encourage the Trump administration to reconsider its withdrawal from the 2015 Paris climate agreement, particularly if European actors reached out to likeminded progressives in, say, California or New York. Even if Trump remains unmoved, a CO2 levy might deter his potential imitators elsewhere.

With such a calibrated and forward-thinking response to Trump’s narrow-minded protectionism, the EU would cement its role as a trailblazer in the quest for a fairer, more sustainable trading system. In doing so, it would not only help protect the environment on which we all depend, but also boost its own international clout. That, not a trade war, is what the world needs now.

This text is copyrighted by Project Syndicate.

Categories: Blogs

Blockchain and Energy: We Sifted Hype from Reality So You Don’t Have To

16 August, 2018 - 14:00

As we move away from coal and nuclear to renewable energy, the electrical grid will need to adapt. Varun Sivaram and Madison Freeman go in-depth on how blockchain could help.

Blockchain could play an important role in managing complex electric power systems (Photo by Davidstankiewicz, CC BY-SA 4.0)

This blog post is adapted from a new discussion paper from the Energy Security and Climate Change Program:  “Applying Blockchain Technology to the Electric Power Sector,” by David Livingston, Varun Sivaram, Madison Freeman, and Maximilian Fiege.

Electric power systems around the world are rapidly changing. For over a century, these systems have relied largely on centralized, fossil fuel plants to generate electricity and sprawling grids to deliver it to end users. Utilities had a straightforward objective: provide electricity with high reliability and at low costs. But now, governments have new ambitions for electric power systems. Many are requiring these systems to rely heavily on volatile wind and solar power; several are also aiming for a high share of electric vehicles (EVs), which can strain grids. Further complicating the matter, customers are installing their own equipment—from solar panels to batteries and smart appliances—to control their production and consumption of electricity.

As utilities struggle to sustain reliable service, meet new policy objectives, and cope with rising complexity, innovators are peddling a putative solution: blockchain technology. Proponents of blockchain technology liken its potential to that of the internet three decades ago. And in 2017, start-up companies raised over $300 million to apply blockchain technology to the energy sector. But so far, little of this potential has been realized.

Our new discussion paper aims to add some order to the chaos of blockchain mania. We assembled the largest publicly available dataset of initiatives applying blockchain to the electric power sector. We interviewed dozens of startups, nonprofits, and established firms. And we dove deep into three case studies of leading startups with pilot projects across multiple continents.

We had to sift a lot of hype from reality, but we ultimately concluded that blockchain could indeed play an important role in helping manage increasingly complex electric power systems, thanks to its ability to enable swift, frictionless, secure, and transparent transactions (of all sorts—not just transactions of cryptocurrencies such as Bitcoin). Now, most blockchain ventures aim to replace today’s centralized power system with decentralized, peer-to-peer energy trading, for example enabling owners of rooftop solar PV systems to trade with one another in a microgrid configuration. But that is definitely not the application we found most compelling.

Categories of Blockchain Applications to the Electric Power Sector

Rather, we determined that the ventures most likely to achieve commercial traction in the coming years will largely work within the existing system and partner with incumbents such as utilities. Overall, the applications we discovered fell into the following five major categories:

Electricity Trading Markets: While the original application of blockchain was to facilitate the trading of cryptocurrencies, the technology can also be used to facilitate the trading of electricity. Within this category, two camps have emerged: some initiatives aim to use blockchain to fundamentally reimagine the existing electric power system while others seek to incrementally improve it.

  • Peer-to-Peer Transactions: Peer-to-peer applications are perhaps the most intuitive way to integrate blockchain technology, which has been touted as a way to enable peer-to-peer transfers of information without the need for a central authority. Ambitious startups have launched blockchain initiatives which aim to fundamentally revolutionize the mechanisms of the electric power sector by creating a transparent, immutable ledger to conduct virtual transactions and allow individual homes or businesses to sell electricity generated by distributed batteries or solar panels. Even though this is the most popular application, we expect it to be among the least successful, because it seeks to upend centralized electric power systems rather than managing the complexity of these systems in new and valuable ways.
  • Grid Transactions: A range of other electricity trading applications that relate to electricity trading in the existing electric power system are more likely to gain commercial traction and support from incumbent utilities and regulatory authorities. These include projects to reform existing wholesale electricity markets by helping to validate transactions more quickly and cheaply, and to underpin new markets for distributed energy resources to operate in concert as “virtual power plants.” These large-scale grid transactions, in which the power grid remains integral, even if its form and function changes substantially, will probably ultimately be more meaningful to the future of the electric power sector and its ever-increasing complexity.

Energy Financing: Some startup initiatives have proposed applications for blockchain which have involved using cryptocurrencies to raise funds for energy projects, overwhelmingly in the clean energy space. Blockchain networks may make it easier for renewable energy projects to raise funds by broadening the pool of potential investors. However, it is unclear whether such a decentralized network is actually necessary to supply the funds needed for renewable energy generation to grow briskly.

Sustainability Attribution: One of the most immediate applications of blockchain to the electric sector is its use to record and trade attributes of sustainability, including whether a unit of electricity is renewable and how much emissions resulted from its production. This could help reduce friction, fraud, and errors while expanding the size of regional trading markets for attributes like renewable energy credits or carbon offset credits. If these projects can be scaled up, governments might become better equipped to regulate carbon emissions and encourage the deployment of renewable energy.

Electric Vehicles: The rising popularity of electric vehicles (EVs) is blurring the line between the electric power and transportation sectors. However, EVs still face substantial barriers to customer adoption, including the scarcity and complexity of public charging infrastructure. Blockchain networks that enable private owners of charging infrastructure to sell charging services, and initiatives that help streamline and reduce costs of charging, could help enable greater adoption of EVs. In addition, smart contracts could also enable EVs to charge or discharge based on the needs of the electric grid, enabling the vehicles to act as mobile batteries and to help stabilize the grid.

Others: Other applications of blockchain technology have included efforts to manage a range of internet-connected appliances to the grid to help balance the load on the grid during periods of peak demand. Some utilities are seeking to use blockchain networks to better manage their grid infrastructure assets. Regulatory initiatives seek to enable swift and seamless transactions between customers and the electricity retailers of their choice. Finally, other initiatives have sought to apply blockchain technology to enhance the cybersecurity of electric power systems.

We concluded the paper with policy recommendations. Because the electric power sector is highly regulated, policymakers will play a crucial role in determining how much of blockchain’s potential can be realized. Unfortunately, blockchain is a foreign concept for many policymakers in the electricity sector – so investing in understanding the technology and its applications is an important first step to effectively creating effective regulation. Policymakers should also support the development of technical standards, and should make it possible for blockchain ventures to set up small-scale demonstration projects through regulatory sandboxes.

This blog post was originally published by the Council on Foreign Relations. It is co-authored by Varun Sivaram and Madison Freeman, research associate for energy and U.S. foreign policy at the Council on Foreign Relations.

This blog was adapted from a new discussion paper from the Energy Security and Climate Change Program: “Applying Blockchain Technology to the Electric Power Sector,” by David Livingston, Varun Sivaram, Madison Freeman, and Maximilian Fiege.

Categories: Blogs

Southeast Asia’s sustainable development path under threat

15 August, 2018 - 14:00

The latest hydropower dam collapse raises questions about the proliferation of large-scale energy projects. With extreme weather from climate change, what is the future of hydropower for southeast Asia? ask Lars Blume from GreenID Vietnam and Michael Simon from International Rivers.

Dams won’t be able to handle the flooding and droughts from climate change (Photo by Tycho, CC BY-SA 3.0)

A dam in south-eastern Laos collapsed on July 23rd, flooding six villages and leaving more than 6,000 people homeless. Downstream in neighboring Cambodia, thousands of people were affected; so far, at least 36 people have died in the catastrophe.

The structure was part of the Xe-Pian Xe-Namnoy hydroelectric power project, which was being developed by a consortium of Thai, South Korean and Laotian companies. Known as “Saddle Dam D” and located at the border to Cambodia, it was part of a network of two main dams and five subsidiary dams on the Xepian River.

In Southeast Asia, many large-scale power plants are being planned or constructed, including hydro and coal power plants. While a growing electricity demand is forecast for the entire region, many energy experts are challenging this assumption. Evidence from within the region and elsewhere points to the high risk of stranded assets and of over-supply of electricity in some markets. In addition, large hydro projects regularly underestimate environmental costs and often have long construction times with systematic cost overruns (PDF).

Large dams are highly vulnerable to climate change, as extremes in rainfall patterns make river flows increasingly unpredictable. Too much rain means flooding and the increased risk of dam failures. And more frequent droughts compromise the performance of hydro dams, rendering them economically nonviable. The World Bank has noted that “heavy reliance on hydropower creates significant vulnerability to climate change” for many countries, which “may require a policy decision to diversify away from hydropower.”

Most governments see domestic electricity production as the ultimate way to ensure energy security and independence. For Laos, one of East Asia’s poorest countries, the situation is a little different. The Lao model relies on a vision for regional integration of supply. Laos began opening up to the world in the 1990s, but despite economic reforms, the country remains poor and heavily dependent on foreign aid and investment.

Laos has an official electrification rate of 92% of households, and a total of 42 power plants (39 hydropower plants, 1 coal plant, and 2 sugarcane-powered plants). The country has 4,984 MW of installed hydropower capacity that generated an estimated 22.7 TWh in 2017. The per capita average consumption of energy is 627 KWh, while the overall energy consumption is 4,239 GWh per year.

Laos could provide itself completely with self-produced electricity.  However, there are an additional 53 hydropower plants that being planned or constructed. If all are finalized, by 2020 there will be more than 90 hydropower plants in Laos with a combined installed capacity of almost 14,000 MW, increasing the country’s electricity surplus even more.

But this energy boom is not driven by domestic markets.  Steered by the nation’s economic development strategy, the Lao government intends to be a regional net exporter of electricity to neighboring countries. The government anticipates that by 2025, hydropower will become the country’s biggest source of revenue.

This development path is high-risk from an economic perspective. Most countries in the region still prioritize domestic generation, and electricity imports are not a part of future power plans. Besides, the global success of solar PV and wind power are still bringing electricity costs down, challenging the economics of existing production units. Laos has a high untapped potential of solar PV and wind power: more sustainable alternatives for producing electricity for export are already available.

The latest dam incident is a strong reminder that profit is not everything, and that dams come with a high risk for the local population and the environment. The companies involved must be held accountable for the disaster, and the reparations.

Hydropower plants, current and projected, have been shown to have dire impacts on the future of the Mekong, one of the world’s longest, largest, and most resource-rich rivers. These rivers are the lifeline of rural communities and local economies, but they are being blocked, diverted and decimated by dams.

Fish stocks will be especially hard hit, with an estimated loss of 30% to 40% of current fisheries by 2040. By that date, there will also be an almost total loss of sediment flow to the Mekong Delta in Vietnam, the Mekong River Commission warned in April.  For many years, concerns have been raised that dams are expected will reduce food security and agricultural productivity – contributing to increased poverty, loss of connectivity for rivers and aquatic ecosystems, and heightened climate vulnerability.

Those affected by the latest disaster must remain the first priority of the companies and government agencies responding to the humanitarian crisis caused by the dam break. But it is also time to reconsider the energy sector, and put new value on rivers and water resources.

A rethinking of the current approach presents an opportunity for Laos to invest in safer, cheaper and more reliable renewable energy options.  Now a regional effort is needed to support Laos in turning this latest hydropower disaster into a catalyst for more decentralized and participatory development path.

Lars Blume works for GreenID, a Vietnamese non-profit organization that works to promote sustainable development in Vietnam and the larger Mekong region.

Michael Simon manages the International Rivers Asia teams in South and South East Asia and China, as well as providing leadership in key policy and program areas.

Categories: Blogs

Under pressure from Trump, Germany plans to import fracked gas

13 August, 2018 - 14:00

While Europe swelters through unprecedented heat, Germany has agreed to build its first terminal for liquefied natural gas. Probably because of pressure from Washington, says L. Michael Buchsbaum.

Will Germany bow to pressure from Trump and build fracked gas infrastructure? (Photo by Jan Arrhénborg, CC BY-SA 3.0)

Instead of standing behind the ideals of the Energiewende, German politicians are lining up to announce their support for the construction of the nation’s first liquefied natural gas (LNG) terminal.

Designed to accept US-mined fracked gas, it likely will be constructed in Brunsbüttel, on the North Sea near Hamburg. Without major opposition, the €450 million facility may become operational by 2022. Though it lags behind other sources as an electricity generator, Germany remains the biggest overall fossil gas consumer in Europe.

The terminal’s announcement comes just days after European Commission President Jean-Claude Juncker and Trump declared a semi-truce to the latter’s threatened trade war after the EC agreed, among other things “to import more liquefied natural gas (LNG) from the United States to diversify its energy supply.”

Boasting that Europe would soon become a “massive buyer” of US fracked-LNG, Trump’s victory follows on the heels of his claim that Germany depends on Russian energy. This has allowed supporters of the proposed terminal to sell it as helping Germany’s energy independence.

However, the EC’s appeasement strategy with the increasingly despotic Trump has only further emboldened him to threaten additional economic penalties over issues such as Germany’s trade with Iran.

Lost in the headlines, however, are the true costs of fracked gas production. While burning it generates roughly 50% less CO2 than coal, when one accounts for the large amounts of heat-trapping fugitive methane that escapes along production and transit routes, its alleged environmental advantage completely disappears.

Moreover, considered holistically, US-fracked gas is the absolute antithesis of clean energy. Fracked gas is largely exempt from key measures of the U.S.’ Clean Water and Clean Air Acts; it uses and permanently despoils billions of liters of fresh water; releases untold amounts of volatile organic compounds (VOCs) and other airborne pollutants; fouls and depletes aquifers and other water sources; causes earthquakes; kills animal life; sickens humans living and working around wells; and myriad other problems.

Though mainstream environmental groups once accepted the notion of natural gas as a bridge fuel (over coal) to renewables, from the Sierra Club to the WWF, no credible organization holds to that false assumption any longer.

While the fracking push began under George W. Bush and Dick Cheney and only accelerated under Obama, since taking office, Trump and his EPA have virtually eviscerated any lingering environmental oversights. In June they repealed the fugitive methane regulations announced at the tail end of the Obama Administration, initiated under pressure from environmental groups and scientists. Germany, however, has placed a moratorium on fracking because of its environmental consequences.

Reportedly hailing the EC agreement with Trump as a “breakthrough,” Handelsblatt reports that Germany’s economy minister Peter Altmaier has insisted several times that his government is not opposed to shipments of American LNG.

Not surprisingly, German and global environmental groups are not as enthusiastic. Stating that the expansion of gas infrastructure – including LNG terminals – “does not serve climate protection and the energy transition,” many fear that increasing the availability of cheap gas will only encourage the use of it as a raw material for the cheap production of plastics, petrochemicals and artificial fertilizers. A coalition of ten North German citizens’ initiatives and the organization Food & Water Europe have vowed to fight the LNG project.

Globally, groups such as Friends of the Earth, 350.org, the Center for Biological Diversity and dozens of other local community groups are fighting gas infrastructure worldwide. Collectively they dispute a recent US study supporting LNG because it fails to take into account the growing economic costs of fossil fuel-driven climate chaos, including mass heating events (see for example this summer). Nor did the study realistically compare the costs of natural gas production and shipment against the swiftly decreasing costs of clean energy power sources such as wind and solar plus storage.

Nevertheless, according to a new study commissioned by RWTH Aachen University on behalf of the German natural gas industry, gas-fired power plants could reliably replace their coal-fired counterparts without endangering the power supply. Without mentioning fugitive methane or its CO2 equivalent, the study states that replacing lignite-based power generation with gas-fired power plants beginning in 2020 could save roughly 70 million tons of carbon dioxide emissions every year.

“With the substitution of lignite with natural gas, Germany comes closer to its climate protection targets with relatively low economic costs,” said the CEO of the German Association of Gas and Water (DVGW), Gerald Linke. Days later, once again citing gas’ alleged climate change benefits, a coal-fired power plant in Herne, North Rhine-Westphalia, announced its plans to be redeveloped as one of Germany’s largest natural gas fired plants, Handelsblatt Online reports.

However, according to the developers, construction of the Brunsbüttel facility depends in large part on public support. German LNG Terminal, the company promoting it, is a consortium bringing together Gasunie, a Dutch gas supplier, Oiltanking GmbH, a German oil and gas transporter, and Vopak, a Dutch tank storage firm. But despite the supposed economic and climate change benefits of LNG, “the company was reluctant to speak to Handelsblatt about the project: Industry sources say it is worried about being publicly associated with natural gas sourced from US fracking.”

Andy Gheorghiu, Policy Advisor and Campaigner for Food & Water Europe, sees the new project as part of a “confusing and corrosive strategy that Germany has regarding gas, energy security and diversification” which depends on the narrative that the country depends on Russian gas.  In an email exchange with the author, Gheorghiu argued that “if the German and European people don’t start to force Germany to seriously question its gas addiction, the European Union as a whole won’t be able to reach the urgently needed climate targets according to the Paris Agreement.”

If Germany were serious about energy independence and climate change, it would invest in energy efficiency, transport and renewables – not bow to pressure from Trump.

Categories: Blogs

Six charts show mixed progress for UK renewables

8 August, 2018 - 14:00

The UK’s energy transition picks up speed: onshore and offshore wind power rose by 34% last year in the UK compared to 2016, new government statistics show. Jocelyn Timperley takes an in-depth look at the data.

Offshore wind generation in the UK has increased by 175% since 2012 (Photo by Andy Dingley, edited, CC BY-SA 3.0)

The latest Digest of UK Energy Statistics (DUKES), published by the Department for Business, Energy and Industrial Strategy (BEIS), also shows that coal supplied just 5% of UK energy in 2017. Only five years earlier, it supplied 20%.

But the report also reveals a tailing off in the expansion of solar electricity. This increased by 38% in 2016, but only rose 11% last year.

Carbon Brief has produced six charts to illustrate the changes occuring in the UK’s energy mix.

Coal descent

The UK’s sources of energy have changed significantly over the past half century, as the chart below show.

Top: UK primary energy use by source, millions of tonnes of oil equivalent (Mtoe), 1970-2017. Bottom: Shares of UK energy use (%). Source: DUKES 2018 Table 1.1.1. Chart by Carbon Brief using Highcharts.

These figures show primary energy use – or, in other words, inputs into the UK’s energy system. Therefore, it is worth noting that these exaggerate fossil fuels’ contribution to useful final energy services, because much of the primary energy is wasted during combustion.

As the lower chart above shows, fossil fuels supplied 80% of the UK’s primary energy in 2017, a drop of one percentage point compared to 2016. This is the lowest ever share in the modern era. Even just 10 years earlier, the share stood at 91%. Meanwhile, the overall proportion of renewables in the primary energy mix reached 11.3% in 2017, its highest ever share. This was a rise of 1.2 percentage points compared to 2016 levels.

The fall in fossil fuel share is largely driven by the continuing descent of coal supply. This dropped by 19% in 2017 compared to 2016, following a historic 51% drop in 2016. Coal supplied just 5% of UK energy last year, down from a 6% share in 2016, 20% share in 2012 and 47% share back in 1970.

Gas supply also fell slightly in 2017 by 2%. This followed a 13% rise in 2016, as gas rose to replace, in part, the record reduction in coal.

In 2017, the fall in coal was replaced by increasing renewables supply, driven, in part, by a 14% rise in renewable energy capacity to 41 gigawatts (GW). Wind, solar and hydro energy supply together increased by 26%, compared to the previous year. Bioenergy also increased by 5%.

All these figures should also be seen in the context of falling energy demand. This dropped 1.5% in 2017, a 19% fall from the 2005 peak.

Sector use

Final use of energy across the UK economy also fell slightly last year, after an increase the year before. However, demand from the transport and industry sectors still increased within this, as the chart below shows.

UK energy use by sector (Mtoe), 1970-2017. Source: DUKES 2018 Table 1.1.5. Chart by Carbon Brief using Highcharts

Transport energy use has now increased for four years running, rising by 0.5 million tonnes of oil equivalent (Mtoe). Most of the increase was due to rising demand in air transport, which rose by 3.5%, or 0.4 Mtoe, and now accounts for 23% of transport energy use. Road transport energy use also rose very slightly by 0.1%, while rail energy use remained unchanged from the previous year.

Energy demand from industry also increased, due to consumption increases in the chemicals, construction, vehicles, and food, drink and tobacco sectors. As the chart above shows, however, the slight rise comes in the context of a gradual decline in demand from the sector over the past few decades. Demand sat at 24 million tonnes of oil equivalent (Mtoe) in 2017, 38% lower than the 39Mtoe used in 1990.

Domestic energy use, on the other hand, fell by 4% – the first reduction in two years. This continues a general decline in home energy demand over the past decade. The reduction comes after warmer average temperatures in 2017, particularly during the winter, led to lower home energy use compared to 2016 and 2015. Home energy consumption has fallen by 19% since its peak in 2010.

Low-carbon majority

Narrowing in on the UK’s electricity supply, this fell by 0.7% last year, as demand for electric heating decreased compared to the previous two years.

Renewable electricity generation in the UK reached a record 99.3 terawatt hours (TWh) in 2017. This pushed up the proportion of electricity supplied by renewables to 30%, up from 25% in both 2016 and 2015, as the chart below shows.

The increase was driven by a large boost to wind generation from rising capacity and wind speeds, as well as smaller increases in solar and hydro generation.

Top: UK electricity generation by source, terawatt hours (TWh), 1996-2017. Bottom: Shares of UK electricity generation (%). Source: DUKES 2018 Table 5.6. Chart by Carbon Brief using Highcharts.

Meanwhile, coal-fired generation fell for the sixth consecutive year in 2017, reaching just a 7% share of overall electricity supply. This follows a huge reduction in coal-generated electricity the year before, when it fell from a 23% share in 2015 to a 9% share in 2016. The drop in 2017 means coal-generated electricity fell to below a third of its 2015 level.

Electricity supplied by gas also fell by 5% last year, while the contribution of nuclear to the electricity mix remained steady.

Combined, these changes mean that the low-carbon share – including renewables and nuclear – of the UK’s electricity supply topped 50% for the first time last year, as first reported by Carbon Brief back in January. The low-carbon share sat at 46% a year earlier.

Wind advance

The progress in renewable electricity compared to 2016 was due to higher wind speeds, as well as a 14% increase in overall renewables capacity. The increase in electricity supplied by both onshore and offshore wind is clear in the chart below.

UK renewable electricity by source (TWh), 1990-2017. Source: DUKES 2018 Table 6.1.1. Chart by Carbon Brief using Highcharts.

Onshore wind, in particular, showed a large increase, rising by 40% compared to 2016 (although this comes after a small fall in 2016 due to lower wind speeds that year). Altogether, onshore wind electricity has now risen by 139%, or close to two-and-a-half times, since 2012.

Offshore wind generation also saw a significant rise in 2017, increasing by 28% compared to 2016. Overall, offshore wind generation has increased by 175% since 2012.

In contrast, the figures show progress in solar generation tailing off to some extent. While it increased by 11% compared to 2016, far larger rises have been seen in recent years.

A similar story is seen for biomass power. This increased dramatically between 2011 and 2015 as Drax, formerly the UK’s largest coal plant, converted half its units to burn wood pellets. Now the conversion is complete, the past two years saw much smaller increases. However, Drax is now in the midst of converting a fourth unit to biomass, which it aims to reopen in late 2018.

Fossil extraction

Fossil fuel extraction in the UK fell slightly by around 2% last year, driven by a fall in coal and gas extraction. This came after a rise in extraction over the previous two years.

Coal extraction fell for the sixth year in a row, dropping by 27% compared to 2016. This followed a 51% reduction the year earlier and an overall 93% drop since 1998.

However, the decrease this year was mainly a result of one of the UK’s large surface mines stopping production due to care and maintenance issues, BEIS said.

UK fossil fuel extraction by source (Mtoe), 1998-2017. Source: DUKES 2018 Table 1.1-1.3 Chart by Carbon Brief using Highcharts.

The UK produced 3m tonnes of coal last year and imported 8.5 million tonnes. Russia was the UK’s largest supplier of coal imports with a 46% share, followed by the US which supplied 28% of imports.

It is worth noting, though, that the Banks Group recently began extracting a planned half million tonnes of coal from its controversial open cast coal mine in Durham.

Meanwhile, North Sea oil production decreased by 2% in 2017. UK oil production now sits at around a third of the peak in 1999.

Coal fall, renewables rise

The animation below, produced by Carbon Brief from DUKES energy flow charts for 2012-2017, provides a snapshot of the recent changes in the UK’s energy inputs and outputs.

On the left, the chart shows the energy inputs to the UK economy from coal, oil, gas, nuclear, renewables and bioenergy. For coal, oil, gas and bioenergy, lighter shades indicate imports and darker shades domestic supplies. Nuclear is light pink, while electricity imports and renewables are dark pink.

As highlighted above, the falling prominence of coal in the UK’s primary energy supply is clearly visible in the shrinking width of the black lines. The rise of biomass and other renewables are also particularly prominent.

This article has been reposted from Carbon Brief.

Categories: Blogs

Can tenders help democratize the energy transition in Latin America?

6 August, 2018 - 14:00

Throughout Latin America, tenders and auctions have been a particularly popular mechanism to push the development of renewables. But communities who could benefit from local renewable energy projects are often excluded, says Maximiliano Proaño.

Large-scale renewables are a good start, but everyone should be able to participate in the energy transition (Photo by Abengoa Solar, CC BY 1.0)

The distinction between an auction and a tender is that the latter format factors in other issues besides pure price calculations when awarding a contract. Nevertheless, the tendering boom has largely excluded small scale actors, including cooperatives, communities, indigenous people, municipalities, small business, and farmers. So why should the participation of these actors in renewable energy projects be desirable throughout Latin America?

The recent REN21 report “Renewable Energy Tenders and Community [Em]power[ment]: Latin America and the Caribbean” gives us some reasons why community energy projects are desirable:

“Renewable energy sources, with their inherently distributed nature, modularity and adaptability, offer new avenues for community participation in the energy arena. Community-driven renewable energy projects usually involve local residents where (depending on the structure) they can own, participate in or control the production and/or use of sustainable energy. Typically the majority of the projects’ direct benefits are distributed locally. Also important is the protection of social and cultural identity and strengthened relationship between communities and their land. Local developed projects reduce dependence on a limited number of energy producers, broader distribution of assets and influence within the energy system. It also increases economic resilience of community members through diversified sources of income”.

Currently, tenders in Latin America are used primarily in the power sector, and the successful bidders typically are awarded long-term power purchase agreements (PPAs). Elements considered in the design of tenders include aspects such as technologies, guarantees, capacity (MW) vs. energy (MWh), and the reliability of supply.

Governments have been pushing tenders and auctions mainly because, unlike feed-in tariffs, these limit the quantity of renewables to be deployed and largely avoids the risk of over-deployment. In addition, tenders, as well as feed-in tariffs, provide certainty in long-term income revenue, which makes projects bankable.

Auctions can also be designed to result in procurement of a specific quantity of electricity (or capacity to be built) at a strike price. Renewable procurement schemes can also be designed with a fixed budget, allowing quantity to be determined by the market.

While in Europe tenders tend to be complementing and integrating design elements from other renewable energy policy instruments such as feed-in tariffs, net metering and distributed generation, in Latin America this does not happen.

Today, 12 Latin American countries are applying tender or auction mechanisms: Argentina, Belize, Brazil, Chile, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Panama, Peru and Uruguay. Of these countries, only a few have brought significant changes.

In 2013, Mexico initiated a major energy reform, and energy markets were opened to private actors. As a result, of the first three tenders between 2015-2017, 70 projects were to be developed and 67 of them had to come from clean energy sources. The fourth tender is currently in progress and has an estimated production of 13.000 MW in 2021. Tenders are signed for 15-20 years and are technology-neutral, although they are intended mostly for clean energy sources according to Mexico’s Electricity Industry Act (mainly renewables and efficient cogeneration). Where in 2012 the energy generated from renewable sources was only 4%, with the last projects awarded, this percentage will increase to 11%. Nevertheless, the disapproval of the population to the reform has been a majority, mainly because the privatization process has benefited large companies but the citizenship has not experienced any benefits yet.

Main renewable energy tenders in Latin America and the Caribbean, 2006-2017

Source: REN21, 2017. Renewable Energy Tenders and Community [Em]power[ment]:
Latin America and the Caribbean (Paris: REN21 Secretariat).

 

In Latin America, the great growth of renewable energies in recent years has been achieved through auctions and tenders almost without incentives for the generation of people or community. However, there are some examples in Argentina and the Dominican Republic where the legislation facilitates performance of community energy. In Bolivia, Colombia and Costa Rica, there are some policies in place to push cooperatives.

Costa Rica, for instance, has a old cooperative history. Nowadays there are four rural electric cooperatives: COOPELESCA R.L, COOPESANTOS R.L, COOPEGUANACASTE R.L, COOPEALFARORUIZ R.L. In 1989, they together founded a new cooperative: The National Consortium of Electric Companies of Costa Rica R.L (CONELÉCTRICAS R.L). The memberships of each cooperative differ among 5.000 and 10.000. The National Institute for the Promotion of Cooperatives (Infocoop) provides credits for renewable energy projects by cooperatives, and the National Electricity Institute (ICE), a public company and a major energy utility, has service agreements with rural electric cooperatives to allow their operation in exclusive areas. Overall, these four cooperatives are responsible for 9% of the national distribution and 6% of Costa Rican electricity generation.

In Argentina, energy cooperatives go back to the 1990s and already cover 16 percent of the national electricity market. According to figures from the Argentine Federation of Cooperatives and Electricity and other Public Services, there are around 500 electric cooperatives with more than a million members who almost all focus on the distribution of electricity. In 2016, the government of the northern province of Santa Fe created the so-called Prosumers Program, which finances citizens who transit from being only consumers, to generating electricity selling their surplus to the network.

In conclusion, one might say that Latin American countries need a series of incentives for small and medium-scale renewable energy projects. Policies that would help include feed-in tariffs, net metering and an active promotion of energy cooperatives. In addition, tenders need to be modified in order to favor a diversity of actors and community-driven renewable energy projects. These can then contract the cheapest electricity from renewables while at the same time promoting the participation of a diverse set of actors.

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