It’s the Infrastructure, Stupid

McCain vs. Obama on Energy – Who Wins this Battle?

So, we have heard a lot from both of the presidential campaigns on energy this week, but have either of the candidates delivered knockout punches on the issue?  In my opinion, neither candidate has done that – but for now I would score the fight in favor of McCain, only because he is not loading up his plan with more spending.  Take a look for yourself, and make your decision.

 

What Does John McCain Say About Energy?

www.johnmccain.com

ü      Expanding Domestic Oil And Natural Gas Exploration And Production

ü      Taking Action Now To Break Our Dependency On Foreign Oil By Reforming Our Transportation Sector

ü      Investing In Clean, Alternative Sources Of Energy

ü      Protecting Our Environment And Addressing Climate Change: A Sound Energy Strategy Must Include A Solid Environmental Foundation

ü      Promoting Energy Efficiency

ü      Addressing Speculative Pricing Of Oil

ü      Does Not Support A Windfall Profits Tax

 

What Does Barack Obama Say About Energy?

www.barackobama.com

ü      Reduce the Burden of Rising Gas Prices on Working Families

ü      Reduce Carbon Emissions 80 Percent by 2050

ü      Invest in a Clean Energy Future

ü      Support Next Generation Biofuels

ü      Set America on Path to Oil Independence

ü      Improve Energy Efficiency 50 Percent by 2030

ü      Restore U.S. Leadership on Climate Change

Do We Really Want to Stop Global Warming?

There were a couple of stories yesterday about cities having small carbon footprints…  The San Diego Union Tribune carried one and so did The San Jose Mercury News – both good stories, but how do these cities fair when we keep hearing that the state will not achieve it’s 20% renewables target by 2010 (as is mandated under current law)?

 

Let’s assume that we could not only meet that target, but better yet, we exceeded that target…  How would these cities then be impacted (on a global scale) by events such as the eruption of the Chaiten volcano in Chile last month that spewed lava and blasted ash more than 12 miles (20 kilometers) into the sky or the devastating earthquake that rocked China this month?

Seems to me, that we will really need to step up efforts around the globe if we really hope to impact global warming…  But back to my question, and closer to home (at least as far as generation is concerned), how will we accomplish this without the infrastructure to allow us to deliver the low emission generation? 

California really needs to re-evaluate our views on this matter and allow for creative thinking.  Do we really want to have a lasting impact on global warming?  I mean in the positive sense…  Since the answer is a resounding "yes," I would submit that we had better allow for the infrastructure to be developed, including transmission, solar, wind, hydro, natural gas (we need the gas generation to run when the wind is not blowing) and yes, even rethink nuclear generation.  Admittedly, nuclear is not in the cards anytime soon, but we need to begin that dialogue today.  How can it be that France and Japan are doing so well with nuclear and we can barely even say the word? 

Last month I wrote about the comments that Governor Schwarzenegger made at the Yale Climate Change Conference .  He’s right – we all need to take a deep breath and get out of the way and allow the infrastructure that is needed to be built to actually be built.  Otherwise we should be honest and admit that we really don’t want anything to change.  The more we stand in the way of the infrastructure development that is needed, the harder it will be to turn global warming around.

CAISO Summer 2008 Outlook: Clean Energy Presents New Benefits and Challanges

CAISO has issued the Summer 2008 outlook and in it they say that the clean energy future we are moving toward will present new benefits -- but also new challanges. While the summer outlook looks good, the grid operator will have continued reliance on conservation and demand response (demand response: this is a program that allows the utilities/CAISO to shot down participating businesses when the grid is stressed for electric capacity -- when we are short electricuty -- typically on really hot days or when the grid experiences disruptions -- like fires near transmission).

The challanges that California will face as we transition to the new cleaner energy sources is exactly that "the transition." How to get to greener from the existing mix of supply? I think it will require a bridge -- earlier I called it a blue bridge (referring to clean burning natural gas). The blue bridge will be in the form of new state of the art generation that will provide grid support and reliabilty as the new green generation is developed and interconnected by new transmission. So I am back to my old song and dance: we need everything--new transmission, new gas fueled generation, conservation, demand response, and renewables of all kinds. Guess what? The CAISO agrees. They also agree there needs to be a delicate balance for how we bring these resources ton-line.

As for the summer... well, I am not as confident as the CAISO, I think that when the temperatures hit the century mark, all bets are off and folks just do not conserve. The demand response programs are grossly under subscribed, so I would not lean on those too much. Having said that -- the reserves look good, but that means that all the conservation that can occur and all the demand response that can occur, will occur. It also means that we get all of the transmission flowing without interruption (the energy imports from other part of the West) and that we have no major, fires or hydro disruptions. That's a lot of if's.

So, until we build the infrastructure we desperately need, we will be counting an many moving parts and leaning on hope to keep our lights from flickering. Good luck to us all this summer!

To see the CAISO release, go to: www.caiso.com

Governor Schwarzenegger Message to Republicans, Democrats and Environmental Activists: “Let things Move Forward”

On Friday last week, Governor Schwarzenegger delivered a very important keynote Address at the Yale Climate Change Conference. In his speech, the Governor speaks bluntly and basically tells environmentalists to get out of the way and let important projects that can bring environmental benefits move forward. The Governor states very clearly Democrat’s and environmentalists need to do the right thing and move out of the way:

“But the important point I want to make is that environmental activists and Democrats many times are just as much an obstacle in moving forward. Rhetorically, of course, they love to talk about renewable energy and geothermal and wind all those kind of things. But many times we have seen they are trying to slow down the approval process. It's kind of a schizophrenic behavior. They say that we want renewable energy but we don't want you to put it anywhere, we don't want you to use it.”

In what I see as the second time that the Governor has essentially endorsed the Sunrise Powerlink, the Governor says:

“San Diego Gas & Electric wants to develop solar geothermal fields in Imperial Valley and build 150 miles of transmission lines to go and take this power right into San Diego, but it faces opposition even though it would replace an old carbon based power plant.”

With the Renewable Portfolio Standard requirement looking like a failure (the in state utilities will not meet the 20% renewable energy portfolio requirement by 2010), it seems that the Administration has realized that the emperor wears no clothes and that the real problem in getting to the green future lies at the doorstep of the opposition. The Governor here calls on everyone to again do the right thing:

“So the point I'm making is it's not just businesses that have slowed things down, it's not just Republicans that have slowed things down, it's also Democrats and also environmental activists sometimes that slow things down.”

“So as one of my environmental friends and advisers said: There are no silver bullets, only silver buckshot. We need to find creative ways to overcome those obstacles. There's no two ways about it. Neither business nor environmentalists nor Republicans nor Democrats can be set in their ways. I suggest to them: Relax, exhale, just exhale and relax and let things move forward.”

If you have read my posts on this issue, this will all sound familiar. The Governor is absolutely correct in this instance. If we really want a green future, we all need to “relax and exhale and let things move forward.”

Happy Earth Day! Now, How Will We Get to the Green Future?

OK, first let me hug the planet with my public service announcement for EARTH DAY 2008 -- so lets start with my basic message: do the right thing.

And now, my commercial:

Did you know that electric demand for lighting could be cut in half if every household replaced its five most commonly used incandescent light bulbs with compact fluorescent bulbs? Earth Day 2008 is a great chance to start thinking about small, everyday decisions that can have a big impact on the environment. For example, turn your lights off when they are not in use and replace incandescent light bulbs with newer, efficient models.

While Earth Day comes just once a year, protecting and preserving our environment for future generations is something to think about every day.

There, I feel greener already.

But how will we really get there? Last week I attended a meeting of the California Foundation for the Environment and the Economy. The conference concentrated on the role that natural gas will play in getting us to a green future -- basically how natural gas could be the bridge to that new green future -- the transition form carbon to clean.

Natural gas is an excellent clean fuel source that can allow us to bridge to green -- a blue bridge to a green future.

New state-of-the-art clean-burning natural gas facilities are going to be needed in order to really afford us the ability to sustain and support a transition to green. In the last year, over 7500 MWs of new coal generation facilities have been cancelled. But what will replace them as the consumption continues to grow?

My suggestion: conservation, efficiency, new renewables, new transmission and new gas fired generation. Again, we need it all. And lots of it. Even if we are even moderately successful in curbing our apetite for more energy, we will need to need to secure the new infrastructure that will replace the current aging system -- something I will go into on another post.

So, do your part -- and Happy Earth Day!

Big Announcement In San Diego Today... Foreign Investment Steps In on California Renewables

Some time ago, I posted "Renewable Power for Sale – But Who’s Buying?" a post in which I discussed the possibility of foreign capital entering the California renewables market. Well, later today we will hear a major announcment from a company called National Toll Roads (NTR) -- an Irish company that is investing in renewable energy companies in the US and worldwide.

Our connection to NTR will liekly be via the Sunrise Powerlink -- or at least will play a potential roll in its future success. You see, they are investing in the Stirling Solar company. This is the company that in recent months has had financial struggles -- well they now have a partner with deep pockets that may make the solar dish engine project work.

The success of the project will mean a potential 900 MWs of solar generation for the San Diego region -- assuming that the Sunrise Powerlink is built -- this because the Stirling project would connect to the Southern end of the Powerlink.

More information will be coming from the announcement that is scheduled for later today -- Balboa Park if my information is correct -- will be the site of a press conference -- at which the new partnership will be announced.

SUNRISE POWERLINKLIVE BLOG UPDATE 3: HEARINGS CONTINUE IN SF THIS WEEK...

After a brief break, the witness continued... more on the use of land -- BLM and Forrest Service Land (more federal land use designation issues). I think we are driving toward the bigger questions on what route the line might actually take -- are the hounds driving the prey to the hunters? Maybe. The guess here is that you drive to create a problem for the current route -- sensitivities to specific land use on the proposed route vs. an alternative route?

Obviously the better outcome for the opposition here is to present all potential routes as "too sensitive," but at the end of the day, I believe the CPUC will use the testimony to identify a "less sensitive" route -- the much written about "Southern route." That too has become interesting, as there is Indian Nation land that will come into play. Not sure how the CPUC will deal with that -- and by the way, no one has actually talked about that to date.

In reviewing the last few hours -- the hearing just broke for lunch -- I had expected more witnesses to have gone by now... not the case, this is dragging on.

See where we are after lunch -- maybe they return with more energy to power trough this!

Sunrise Powerlink Hearings: How Much Are You Willing to Pay for Green Energy?

Did we learn anything during this week’s hearings? Sure we did, we learned a lot about costs. Delivering energy, green or otherwise is expensive – but if you have read my previous posts, you know that already and also know that I expect green energy costs to soar and that you and I will not be shielded from those costs.

On day one of the reinitiated hearings, SDG&E revealed that the cost of the line has gone up by a factor of $126 million. No surprise to me – everything has gone up (materials in particular have had a huge run up). But it’s the regulatory cost that is also rising. That should not surprise us either.

On day three, the biggest number we heard was the actual cost of the much celebrated Smart Energy 2020 Report that was written by Bill Powers. The report, until now had been playing “hide the ball” on the cost to construct the 900 megawatts of photovoltaics (PV) that te report proposes. In cross examination, Mr. Powers finally admitted that the fully burdened cost of building his 900 megawatts of PV would be around $13 billion.

So, on the one hand we have the Sunrise Powerlink that could provide access to green energy for an initial cost of construction of $1.3 billion (this number will go up because we will have to add on the cost of the litigation that is sure to come – but I am thinking it will likely not go much over $2 billion when it is all said and built – and yes it will have ongoing maintenance costs) – on the other side we have the Smart Energy 2020 proposal that at full tilt will cost $13 billion (and yes, this will also go up because you will encounter delays with entitlements and permitting – trust me, not everyone will be happy and someone will sue and you will have delays here as well – oh, and this too has ongoing maintenance costs).

Q: What have we learned? A: A green future will be expensive and the only way to get there is through new infrastructure. But a better question is how much are you willing to pay for it? If our flying habits are any indication of where the majority will come out on this issue, we’ll all be flying coach. I’ll take the peanuts and Diet Coke, and sign me up for the Sunrise Powerlink, please.

Renewable Portfolio Standard Task Force Coming Soon?

A senior California Public Utilities Commission official recently shared that Governor Schwarzenegger will soon announce a task force that will seek to secure renewable generation for the grid beyond the current 20% threshold. The current requirement is that utilities achieve 20% renewable energy for their customers by 2010 - an issue which I have written several posts on and by the way, a mandate which utilities will likely not meet. Not because they are unwilling, but because the ability to get the renewable energy to the customers does not really exist.

A great example is the delay we are seeing with the Sunrise Powerlink. Regulatory stumbling blocks and snares will continue to delay the 20% renewable energy goal, but maybe the task force will take this on? Maybe they can figure out a way to streamline the process? Well, if I understand it correctly, the intent is to figure out how we can get beyond 2010 - and to a 33% renewable energy requirement.

My suggestion would be to secure the 20% requirement first - but that's just me. If we can't get to 20% -- how will we get to 33% and what's so special about 33%?!

These are questions I intend to explore and educate myself on - when I get answers, I will share them.