Below are a few letters received at EnergyBiz Insider on topics that appeared in the past few weeks. They capture the essence of how many readers say they feel.
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Utility Interests Varied - January 20, 2010
It would require the investment of "x" dollars to reduce carbon emissions by about 2 percent in the first year of a cap and trade program with a declining cap leading to a reduction of about 83 percent of annual carbon emissions by 2050. The investment required in the second year would be "x" plus something, assuming that the least expensive reduction steps would be implemented first.
If emissions allowances must be purchased, the allowances required by the emitters would cost "y" dollars per allowance.
Therefore, the price impact of the cap and trade program is the sum of the return on the investment of "x" dollars in low/no carbon emissions facilities PLUS the purchase price "y" of the allowances required for the residual emissions.
In the case of a power generator installing a nuclear generation facility to replace existing carbon emitting facilities, the investment would likely be made over a period of several years, during which there would be no emissions reductions since the new plant would not yet be in service producing zero emissions power.
The cost of purchasing allowances adds to the generator's cost of producing power, which costs would be passed on to the consumers of the power.
It is conceivable that the government could make better use of the revenues collected from the allowance sales than those purchasing the allowances could have, or than the customers paying the higher prices could have; but, it is highly unlikely.
Edward A. Reid, Jr.
President
Fire to Ice, Inc.
In regard to the Regional Greenhouse Gas Initiative's (RGGI) auction proceeds being "[invested] in energy efficiency programs" and to "promote clean energy technologies," I offer the following information.
In a September 21, 2009, presentation by the director of Maryland's Energy Administration, the MEA reported that it had reaped approximately $85 million from Maryland's participation in RGGI and had funded its "Strategic Energy Investment Fund" with these proceeds. Of that amount, 23 percent had been used for "residential rate relief" and another 50 percent had been applied to "low income energy assistance." In other words, nearly three-quarters of the funds collected were applied to rate relief.
I fail to understand how providing rate relief can be construed as an "energy efficiency investment" or a "promotion of clean energy technologies." I further submit that there is nothing "strategic" about reinforcing a person's bad energy usage habits by paying his or her power bill. As for Maryland, RGGI participation has been demonstrated to be little more than a money-grabbing scheme enabling politicians to buy votes.
Steven M. McLain, P.E.
Letters from Readers - January 21, 2010
How many of your readers / letter writers are still willing to consider man-made global warming a hoax when almost every respected climate scientist in the world agrees that man-made global warming is a reality? And a dangerous reality. It seems to be only people for whom the reality of global warming will cost money or preclude the opportunity of making more money, who are willing to listen to those few who refuse to look at the evidence that real scientists and the planet itself are providing.
Alan Tabachnikov
Facilities Assessment Services
Google's Quest - January 22, 2010
I always enjoy your perspective, but I hope you can see this is more about press than substance.
Sure, other large customers seek permission to act as power marketers, but they know a lot about the power business and have significant ability to shape their loads in response. Air separators are natural power markets as are steel mills. Data centers? Oh, please. Run the emergency generators to load manage? Sure, that is illegal in many EPA jurisdictions.
This is all about press image.
Joel Gilbert, P.E.
Chief Software Architect
APOGEE Interactive
It's not at all clear to me why one particular retail consumer of electricity, like Google, should get a special dispensation from FERC or the state utility commissions. When large energy consumers have the ability to shop around, you open up a Pandora's Box of things that can go wrong, not just things that can go well. The large consumers will make their energy source selections based on their preferences, rather than on optimization of overall power system economics, emissions, or security. What happens when some of Google's energy suppliers go bankrupt? Is the local utility supposed to rescue Google from their misfortune? What if the local utility doesn't have enough capacity available because they were not expecting this load to become their responsibility again? We don't need more subsidies or bailouts of large enterprises that want to do risky things.
Also, if we let Google buy 100 percent wind or other renewable power, what legal, moral, or logical basis is there to not let another large consumer opt for 100 percent coal-derived power?
Regarding the matter of residential energy consumption, I don't understand how having "smart" meters would yield significant energy savings. If I pop a pizza into the oven, and see that my consumption has suddenly gone from 500 watts to 6000 watts, what am I going to do? Turn off the oven? I don't think so. Significant energy use reductions are much more likely to be achieved by increased insulation, improved windows and doors, and more-efficient furnaces and air conditioners.
Finally, most people have better (more profitable or pleasurable) things to do with their time than do real-time monitoring of their energy usage. If you spend 5 hours per month monitoring your "smart meter" and then tracking down the offending appliance or family member, in order to reduce your energy consumption by $10, congratulations, you earned $2 per hour. If it's illegal to pay an employee this magnitude of wage, why do we expect many of our citizens to think this is a good deal? Wouldn't they be better off using this time at a minimum-wage job?
Richard (Rick) Gonzalez, P.E.
Chief Engineer, Transmission Planning
Excel Engineering, Inc.
Bucking Up for Biofuels - January 25, 2010
Ken, you are really off target with this article. Whether it is referencing the 2005 Energy Bill requiring 4 billion gallons of renewable fuel in 2006 (since it is now 2010, the 2005 bill was expanded with the 2007 energy bill), or saying BP likes ethanol -- they hate ethanol and are pushing butanol, to any number of other things. Ditto for the Administration which is ready to bail on ethanol. We follow ethanol and biofuels 24/7 and I would love to give you my insights on what is really going on in the ethanol world, and it's a mess.
Doug Durante
Executive Director
Clean Fuels Development Coalition
I'm in the architecture/construction business and hear that the use of wood chips and sawdust is seriously increasing the cost of construction materials, such as particleboard, which is made of those "waste" materials. It's more important than ever to look at all fuels/energy systems from a whole systems perspective, something that is not being done well. We should not be looking at emissions or food or fuel in isolation or narrow context; we do need to look at all of the consequences of any decision and any technology from a larger perspective.
Helen J. Kessler, FAIA, LEED A.P.
HJKessler Associates, Inc.
"When burned, however, the biomass material releases the carbon back into the atmosphere."
On the other hand considering a tree for example, when sawed into a board or plank and put into a home or a pier, or made into a piece of paper to be placed in a filing cabinet or end up in a landfill, carbon is sequestered.
Mike Watkins
Heat Exchanger Engineer
LMS100 Intercooler
GE Energy
Great idea, the only problem is that the entire biomass industry is the stepchild of the renewable industry. As you alluded to, biofuels are expensive and no one at present appears to be willing to pony up the money necessary to produce biomass generation to any great degree. There are a great many more benefits than your article alluded to, however with the revenues offered for biomass generation etc. lenders are loath to provide finance for new construction.
Joseph Langenberg
Disclosing Carbon Risks - January 29, 2010
I am not sure whether you read the text of the SEC's press release or the transcript of the announcement of the policy by SEC Chair Mary Schapiro (both of which are available at www.sec.gov). It appears to me that the SEC is merely highlighting climate change disclosures. It is not changing any existing requirements or creating any new ones. If no legislation is pending, most companies will not likely include such disclosures in their financial reports. Many companies may choose to make disclosures only after legislation is passed and signed into law. For many companies, such disclosures may take the form of including another paragraph or two in the Risks Factors section of their 10-Ks and 10-Qs. Most companies would have recognized the need to make such disclosures when they become material anyway. The SEC's announcement does not change that.
Steve Percoco
I wonder why the mirror risk of stranded assets is not also required reporting. You know -- spending millions or billions on carbon reducing technology or equipment, only to find there's no real market in the trading of carbon. What about the realized risk (loss) of those who bet heavy and long in the E.U. market that tanked late last year?
Thomas Tanton
President, T2 & Associates
Sr. Fellow, Energy Studies, Pacific Research Institute
Obama's Challenges - February 01, 2010
Well, you certainly have written a "charged" article that will ensure lots of comments! I understand you are simply reporting what the President and others have said so I am not taking issue with you but rather commenting on what others have said.
I disagree that the voters always become disenchanted during the second year of a Presidents term. Obama has taken on too many issues too soon and too costly and that is why American voters are disenchanted. Just like the Republicans did during the last administration, they misused their majority rather than using it wisely. I take issue with Obama's statement that now is the time for us to be promoting clean energy on the basis of climate change. This is a very expensive undertaking and there needs to be a national consensus that the change is so urgent that this is one of the highest priority issues. I'm not convinced that this is the case and I try to be neutral on climate change. There is still more than ample time for the U.S. to maintain a global leadership position. There are ample clean energy (i.e. natural gas) reserves and nuclear development opportunities to provide a bridge until the climate change issues are resolved.
There is no need for any coal plant with a capacity of over 150Mw to ever need to be retired because it is reaching the end of its productive life. That has been held up as a limitation but simply is not correct. Coal plants can be upgraded and their productive lives can be extended for 50 or more years. Giving tax credit to wind and solar is a good process now but eventually they need to be able to stand on their own without such subsidy and that target date needs to be established now.
Jim Lanier
The problem with all such political analyses is that they fail to take into account scientific reality. Obama (and other politicians) are used to suspending reality in order to achieve political compromise. This is fine when they are dealing among themselves about human institutions. However, the earth's climate system is not an entity with which one can strike a deal. She sets the terms and they are both final and non-negotiable.
Joe Schiller
Respond to the editor.
