This Day In History – Pearl Harbor
Remember the past because it instructs the future. From History Channel via YouTube
Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...
WEEKEND VIDEOS, December 7-8:
Remember the past because it instructs the future. From History Channel via YouTube
These scientists are screaming “DO SOMETHING!” in the calm rational tone of science speak. From YaleClimateForum via YouTube
Unlike history, the future has yet to be determined and this is an option. From Jaldeep Tipale via YouTube
Report: Prepare for climate tipping points
Andrew Restuccia, December 4, 2013 (Politico)
“Climate change isn’t just a problem facing future generations, a new scientific report warns, saying the planet could suffer serious and abrupt climate threats in the next few years or decades — leaving nations with a narrow window to adapt…[ Abrupt Impacts of Climate Change from the National Research Council] says even gradual climate changes that have unfolded over centuries will reach so-called tipping points that could result in abrupt impacts on everything from sea ice to ecosystems. The report calls for an ‘early warning system’ aimed at better predicting when those impacts will occur…[It] adds to the growing body of scientific research warning of dramatic fallout from unabated climate change…[and] echoes longtime warnings by activists and scientists that it is imperative to act quickly…” click here for more
One-Third of Tier 1 c-Si Module Supply Now Using Third-Party Cells
Finlay Colville, November 22, 2013 (SolarBuzz)
“Almost one-third of c-Si modules being shipped today by the leading (tier 1) c-Si module suppliers for solar photovoltaic (PV) installations are using c-Si solar cells made by third-party suppliers…[from below 10% in Q1’10, primarily due to] Chinese module suppliers…increasing their market share within the United States…[and the] U.S. end-market requires that Chinese PV modules use non-Chinese-made PV cells to avoid import duties…[Also, as] one of the leading countries for solar-cell manufacturing, Taiwan cell makers are only beginning to add meaningful levels of module capacity…[so they] still rely upon supplying cells to module manufacturers…Third-party module supply is also currently on the rise…[and the] c-Si value-chain from wafer-to-module remains largely a buyer’s market, with many tier-2 Chinese companies having no option but to act as OEM suppliers to tier-1 competitors…” click here for more
U.K. Wind Turbines Generate Record Power as Gas-Fed Plants Halt
Rachel Morison, November 29, 2013 (Bloomberg News)
"Wind power in the U.K. rose to a record, leading operators…to halt gas-fired power generation…Wind output rose to as much as 6,010 megawatts at 11:30 a.m. London time…beating a previous record on Sept. 15 and accounting for 14 percent of total supply…Generators halted 7,872 megawatts of gas-fired plants…The U.K. plans to almost triple the amount of wind capacity [to 18 gigawatts of offshore wind farms and 13 gigawatts of onshore turbines] by 2020 as it seeks to meet a target to get 15 percent of power demand from renewable energy sources. Wind and solar have no fuel costs, generally making them cheaper than coal or gas…” click here for more
Europe’s biofuels not guaranteed sustainable, finds new study
A WWF analysis has shown that the standards used to assess biofuel sources fall well short of ensuring that Europe’s push towards increased biofuel use is not contributing to environmental destruction and social exploitation…[It assessed] certification standards for biofuels accepted by the EU against a Certification Assessment Tool (CAT) developed by WWF…[The] study reveals the lack of binding requirements in several areas, such as: for the preservation and improvement of ground, water and air quality, including the lack of criteria for the use of agrochemicals. Furthermore, social standards such as a ban on slave or child labour are also left out…[and] found that while all schemes met the mandatory EU Renewable Energy Directive (RED) requirements, these were not enough to ensure sustainability…”click here for more
Renewable Energy Revolution: The Biggest Business Opportunity on the Planet (continues)
Billy Parish, November 26, 2013 (EcoWatch)
“…Energy, the world’s largest industry, is undergoing a tectonic shift. It’s time to stop hedging our bets. It’s time to embrace the idea that we have the power to transition the entire planet to 100% clean, renewable energy…The shift didn’t come out of nowhere. For decades, we’ve been developing better clean energy technologies, even as the fossil fuel industry has (literally) dug itself into a very deep hole…The biggest story is in solar. The cost for panels has fallen by more than 99% in the past three decades, from more than $75 per watt in 1977 to about 50 cents per watt today…” click here for more
Renewable Energy Revolution: The Biggest Business Opportunity on the Planet (continued)
Billy Parish, November 26, 2013 (EcoWatch)
“…The cost for wind turbines has declined dramatically [in the past three decades]…Meanwhile, as we’ve burned through the most easily accessible reserves, fossil fuel prices continue to rise. Coal prices have been steadily increasing…and oil prices have gone on a dramatic upward run…” click here for more
Renewable Energy Revolution: The Biggest Business Opportunity on the Planet (continued)
Billy Parish, November 26, 2013 (EcoWatch)
“…[E]ven accounting for the supply increases from fracking here in the U.S., natural gas prices across the world have still more than doubled in the last decade alone and the U.S. Energy Information Administration forecasts steady price increases over the next 30 years…All over the world, it’s starting to make more financial sense for people to power their lives with clean energy rather than dirty fuels…A common refrain is that renewables are too intermittent or too hard to integrate into the grid…[There are no technical barriers but] the task is huge. In [Stanford Professors] Jacobson and Delucchi’s model, we’ll need to build 3.8 million large wind turbines and 90,000 solar power plants...[W]e’ll need 1.7 billion rooftop solar arrays…[The necessart $100 trillion dollar global investment] may be the biggest business opportunity on the planet…” click here for more
Renewable Energy Revolution: The Biggest Business Opportunity on the Planet (completed)
Billy Parish, November 26, 2013 (EcoWatch)
“One hundred [percent renewable energy] is…fast becoming the new normal…Google, Apple, and Ikea have] publicly stated [their] intention to reach 100%...Walmart is now the United States’ single largest producer of renewable energy...San Francisco, Austin…Washington D.C... Evanston (IL) and Santa Barbara have already committed their municipal governments to purchasing 100% clean energy, and have programs to encourage their citizens to do so…In Germany, a sort of renewable energy arms race is breaking out among counties. Nordfriesland is at 260%, Prignitz at 261%, and Dithmarschen at 280%...The 900 person village of Kronprinzenkoog now meets 5,000% of its power demand with clean energy, and sells the rest back into the grid…100% is a movement about abundance and possibility…[and] driving forward the set of solutions we need so our children will inherit a healthier, happier and more prosperous world…” click here for more
The EU-China Deal; What We Know and Don't Know
August 2013 (Greentech Media Research)
After months of uncertainty, the standoff between the European Union and Chinese solar manufacturers has finally reached a resolution. An agreement consisting of a minimum price floor and a cap on import volumes was adopted with unanimous consent by the European Commission, and agreed to by 90 out of 140 of the Chinese companies covered in the initial complaint. The manufacturers included in the agreement will avoid paying hefty anti-dumping duties, which rose from 11.8 percent to 46.7 percent on August 6th, on all their exports to Europe that fall under the volume cap. The main findings regarding how the price undertaking will impact demand are as follows:
• The price floor and volume cap are dynamic arrangements that will enable Europe to take advantage of market-wide cost reductions and avoid supply shortfall. However, the means for adjusting these measures is not yet clear, and the exact price and amount is unconfirmed.
• The price floor will be set using publicly available data from pvXchange and Bloomberg. At the time of the price undertaking, the price on pvXchange for a Trina solar 240W polysilicon panel was €0.56/W($0.74/W). The floor will change with 5% fluctuations in price, likely adjusted on a quarterly basis.
• The volume cap is widely reported to be 7 GW, which would be consistent with comments from EU Trade Commissioner Karel de Gucht. The China Chamber of Commerce is assigning the allocation of the volume cap among the manufacturers who signed onto the agreement. Any shipment volume exceeding the cap will be subject to 46.7 percent import duties.
• A €0.56/W ($0.74/W) price floor would hurt the financial viability of larger projects across Europe already facing weakening policy support. However, residential demand is likely to stay stable- and may even grow as countries with an active developer base losing business from larger projects move to the residential segment.
• While shipments from Chinese companies to Europe in 2H13 will be low— likely between 0.5 and 1.5 GW — installations will be higher than in 1H13 as developers clear out inventory ahead of tariff cuts in 1H14.
There are still several open questions on the deal:
• How will the price floor be determined and communicated? How often will it be adjusted?
• Is the volume cap based on projected demand for Europe, and if so, what is the baseline? How will this be adjusted for higher or lower demand?
• How is the volume allocated among Chinese manufacturers?
• How will the EU Trade Commission monitor and enforce the price?
• Will residential consumers absorb increased costs for modules, and seek higher efficiency products? Or, will demand for lower efficiency products increase as customers strive for self-consumption?
The trade dispute stemmed from accusations that Chinese companies were selling solar products into the EU market at prices well below fair value. In the course of its investigation, which began in September 2012, the European Commission found that subsidies from the Chinese government enabled 140 companies to sell panels on average at 88 percent below cost—allowing these manufacturers to capture 80 percent of the EU market in 2012. This conclusion led to provisional tariffs of 11.8 percent starting in June, and prompted a two-month negotiating period between the European Union’s trade representative Karel De Gucht and the China Chamber of Commerce.
This is the largest market dispute in the history of these two countries, with total sales of solar equipment exceeding $28 billion in 2011. Although the new price undertaking will replace the 46.7 percent tariffs for the 90 companies who agreed to the terms, the investigation by the EU into unfair trade practices will continue.
Structure of the Deal
Remarkably few details on the deal have been released so far, but the broad contours are well-known: the agreement sets a minimum price for modules, cells, and wafers as well as a maximum volume that can be imported into the EU without invoking import duties of 46.7 percent. To date, neither party has specified the exact minimum price. It is known that efforts to peg it to the price of raw materials proved unsuccessful, so the commission will use available data from Bloomberg and pvXchange to set the price. The widely reported price floor of $0.74/Wis based in the spot prices listed on the pvXchange database at the time of the agreement. GTM Research sources confirm that the price floor will be updated about every 3 months, which meets expectations that the floor would be respond to market conditions so that Europe is not precluded from industry-wide cost savings. GTM Research sources also confirm that a 5 percent fluctuation in prices will prompt a change, although it has been reported that those adjustments could take up to 9 months to take effect. During the dispute, many European manufacturers requested tariffs of 80 percent and are unhappy with the alleged price floor of $0.74/W, which they believe to be far too low.
The annual volume cap, although widely reported at 7 GW, has also not been confirmed by either party. EU Trade Commissioner Karel De Gucht asserted the volume cap would be low enough to prevent Chinese companies from having the 80 percent market share they boasted last year, but high enough to prevent a supply shortfall since European companies cannot provide the full difference. Sources have posited that the allocation will be based 65 percent on historical shipping record and 35 percent by other factors— such as brand awareness, technological competitiveness, and product quality differentiation.
Others have stated that the tier one manufacturers have each been allocated 10 percent of the total volume. It is important to understand that while the quantity was set by the European Commission, the allocation to different participating companies will be set by the Chinese Chamber of Commerce. This allocation has not been revealed. Around 1.8 GW remains to be allocated after Chinese manufacturers reportedly shipped 6 GW throughout the year ahead of the settlement.
Finally, the European Commission has discussed options for preventing Chinese manufacturers from skirting the price floor and volume cap. Methods include selling products at the agreed price and then discounting inverters or mounting kits, issuing retroactive discounts, and setting up manufacturing plants outside of China in other low-cost Asian countries. Early in the dispute, Chinese companies shipped into Croatia to avoid tariffs. No clear method for ensuring the conditions of the agreement are met has been determined.
EU Market Implications
The impact of the minimum price floor on European demand varies by market segment. In 2H13 and 1H14, there will be reduced demand for large-scale projects as the combination of higher module prices and reduced policy support from EU governments kicks in. Alternatively, residential demand will likely remain stable or even increase.
Many large projects, certainly including systems over 1 MW and perhaps including systems over 100 KW, were on the edge of financial viability even with prices in the $0./W range and strong government incentives. As a result, cuts to feed-in-tariff programs across Europe and a presumed price floor of $0.74/W will significantly hurt demand. These developers may look at strong demand in Asia for new opportunities. For the residential and commercial market, the price floor is not likely to affect demand because these projects are still cost effective. However, it may actually lead to growth in some countries, such as Germany, the UK, and Italy, where well-established installer bases who are losing other local market segments may rush to the residential space.
Aside from the volume of residential demand, the price floor could also alter the nature of what systems are installed. The current trend towards self-consumption, resulting primarily from feed-in-tariffs dropping below retail rates, has altered the objectives of many residential consumers. Instead of seeking to produce the maximum amount of electricity in order to take advantage of the feed-in-tariff, consumers are now optimizing their systems for self-consumption. This will likely lead to a trend in smaller systems being installed.
Under these new circumstances, how will the price floor affect demand? It is possible that the price floor will lead to increased demand for higher efficiency systems, as companies seek to differentiate their products as prices approach the floor. This would not be a dramatic shift in markets like Germany but would represent a change in the imports of the UK, France, and Italy. If this occurs, there is speculation that the agreement could push lower efficiency products to other markets— such as the U.S.—as top tier companies’ look for new places to sell their products. On the other hand, consumers desire to use their systems for self-consumption means that they could seek to install a higher number of lower efficiency modules across their roof space.
Alternatively, some have questioned the value of higher efficiency modules given the trend towards self-consumption, as there is plenty of roof space for lower efficiency, cheaper modules. This would mean residential demand would shift more towards lower priced modules, perhaps from places other than China.
This lends credibility to the theory that competitors from Taiwan or Malaysia, who had module prices between $0.05/W and $0.10/W higher than Chinese companies before the imposition of tariffs, could seek to take advantage of the price floor to increase their market share. Overall, it remains to be seen how consumers will react, but we see increased demand for higher efficiency modules as more likely given that residential demand in Europe is somewhat inelastic, with the high rates for retail electricity creating more price tolerance from consumers.
The overall volume of 2H13 shipments to Europe from Chinese manufacturers is likely to be low. If the volume cap is in fact 7 GW, shipments to Europe in the first half of 2013 in anticipation of tariffs are reported between 5.5 and 6.5 GW, restricting second half shipments to between 0.5 and 1.5 GW. This artificial market constraint may be a forgone conclusion, however, as suppliers have already committed much of their second half shipment volume away from uncertainty in Europe and towards the strong demand in Japan, China, and India.
Despite lower shipments, European installations are likely to be higher in 2H13 than 1H13 as this backlog of shipments gets connected—particularly in key European markets such as Germany and the UK which are facing tariff cuts at the beginning of 2014. There are a few reasons that this surge will be qualitatively and quantitatively different, though, than end-of-year booms in the past. First, it is an increase of installations compared to the slow growth in the first half of the year, as opposed to 2011 or 2012 levels. Second, it will be concentrated mainly in the residential market—since the price floor has hurt the financial viability of large-scale projects. Since larger projects have typically driven most of the end-of-year demand in the past, this marks a shift in both the kind of installations and the total number of megawatts installed.
Ramifications on U.S. Module Pricing
There has been some discussion in industry circles about what impact, if any, the EU settlement would have on U.S. module pricing dynamics. A key determinant of the price of Chinese modules sold in the U.S. has been Taiwanese cell pricing dynamics (Chinese vendors have been using Taiwanese cells to avoid the U.S. import tariff), and a key factor behind the recent increase in Chinese module prices in the U.S. (from levels of low $0.60/W in Q1 2013 to &0.70/W-$0.72/W currently) has been a significant run up in Taiwanese cell ASPs in June and July of this year, to levels as high as $0.45/W in July. Part of the reason for this increase was the belief (or at least hope) that the EU import tariff would eventually be implemented; if so, this could have led to increased demand for Taiwanese cells from Chinese suppliers, who would then assemble them into modules in regions such as Eastern Europe or India.
With news of a negotiated settlement, Taiwanese cell pricing has fallen back to $0.40/W-$0.41/W in the past two weeks, leading some to suggest that these cost decreases for Chinese suppliers to the U.S. could be passed on in the form of module price declines.
While this makes sense in principle, we have yet to see any such trends materialize, and conversations with numerous Chinese suppliers have revealed that there are no plans to lower U.S. prices in the foreseeable future. On the contrary, U.S. module prices have continued their rise in the weeks following the tariff, and there is a shortage of tier-1 Chinese modules in the U.S. market for Q3 and Q4 2013. The primary driver for this phenomenon is the explosive growth in the higher-priced Japanese market, where Chinese-made modules are selling for as much as $0.85/W at a lower input cost (since internally-produced Chinese-made cells can be used for non-U.S. shipments). This has shifted allocations away from the U.S. for the time being, as suppliers have changed their strategic focus away from obtaining traction in high-potential markets like the U.S. and towards generating positive cash flow in the near term.
As shown below, our outlook on tier-1 Chinese module ASPs bound for the U.S. (cost, insurance, freight) sees ASPs rising to $0.72/W in Q3 2013 and staying firm in Q4 – a 16 percent increase from Q4 2012 levels. We anticipate relative stability in Q4, as lower-tier Chinese firms come in and attempt to steal share away from the top-tier firms and gains from lower cell pricing are factored in.
A COMING SOLAR-NAT GAS PARITY Solar to Become Competitive with Natural Gas by 2025; Solar electricity will reach cost parity in 10 major regions, accelerating adoption without subsidies, and will even benefit from abundant natural gas
December 3, 2013 (LUX Research)
"Far from being bulldozed by cheap natural gas, unsubsidized utility-scale solar electricity will become cost-competitive with gas by 2025, according to Lux Research. In fact, increased gas penetration actually benefits solar, by enabling hybrid gas/solar technologies that can accelerate adoption and increase intermittent renewable penetration without expensive infrastructure improvements…The levelized cost of energy (LCOE) from unsubsidized utility-scale solar closes the gap with combined cycle gas turbines (CCGT) to within $0.02/kWh worldwide in 2025…led by a 39% fall in utility-scale system costs by 2030 and accompanied by barriers to shale gas production – anti-fracking policies in Europe and a high capital cost in South America…” click here for more
PUBLICLY TRADED WIND COMPANY PAYS OFF Pattern Energy Rides Wind To Fuel Cash For Dividends
Marilyn Alva, November 25, 2013 (Investor’s Business Daily)
“…Pattern Energy Group (PEGI), a wind-power outfit that went public in early October, prides itself on its stability and predictability…Analysts say Pattern's structure is similar to a master limited partnership used for natural gas pipelines and other assets meant to generate cash flow to be paid out to investors as dividends…The company's six current wind-power projects in the U.S. and Canada operate under long-term fixed prices…[and sold to ‘highly creditworthy’ companies…” click here for more
$4.5BIL, 9X GROWTH IN DATA CENTER EFFICIENCY BY 2020 Data Center Energy and Infrastructure Management; Software and Services Market Trends, Key Functionalities, Supply- and Demand-Side Market Dynamics, Data Center Energy Efficiency, and Global Market Forecasts
4Q 2013 (Navigant Research)
“Data centers around the world are increasingly becoming economic hubs for all forms of businesses. This is driving significant growth in the need for data center capacity…As data centers’ importance and capacity have grown, so have their costs. One of the largest operational costs of a data center is energy consumption. Businesses are struggling to both understand and contain these costs…Data center infrastructure management (DCIM) software and services…are opening tremendous opportunities…[by] enabling deep visibility into all aspects of a data center’s operations…[and] many of the market hurdles (such as risk aversion by clients and awareness of DCIM capabilities) have dissipated…Navigant Research forecasts that global DCIM spending will grow from $663.2 million in 2013 to more than $4.5 billion in 2020…” click here for more
World Energy Outlook 2013
November 2013 (International Energy Agency)
Orientation for a fast-changing energy world
Many of the long-held tenets of the energy sector are being rewritten. Major importers are becoming exporters, while countries long-defined as major energy exporters are also becoming leading centres of global demand growth. The right combination of policies and technologies is proving that the links between economic growth, energy demand and energy-related CO2 emissions can be weakened. The rise of unconventional oil and gas and of renewables is transforming our understanding of the distribution of the world’s energy resources. Awareness of the dynamics underpinning energy markets is essential for decisionmakers attempting to reconcile economic, energy and environmental objectives. Those that anticipate global energy developments successfully can derive an advantage, while those that fail to do so risk making poor policy and investment decisions. This edition of the World Energy Outlook (WEO-2013) examines the implications of different sets of choices for energy and climate trends to 2035, providing insights along the way that can help policymakers, industry and other stakeholders find their way in a fast-changing energy world.
The centre of gravity of energy demand is switching decisively to the emerging economies, particularly China, India and the Middle East, which drive global energy use one-third higher. In the New Policies Scenario, the central scenario of WEO-2013, China dominates the picture within Asia, before India takes over from 2020 as the principal engine of growth. Southeast Asia likewise emerges as an expanding demand centre (a development covered in detail in the WEO Special Report: Southeast Asia Energy Outlook, published in October 2013). China is about to become the largest oil-importing country and India becomes the largest importer of coal by the early 2020s. The United States moves steadily towards meeting all of its energy needs from domestic resources by 2035. Together, these changes represent a re-orientation of energy trade from the Atlantic basin to the Asia-Pacific region. High oil prices, persistent differences in gas and electricity prices between regions and rising energy import bills in many countries focus attention on the relationship between energy and the broader economy. The links between energy and development are illustrated clearly in Africa, where, despite a wealth of resources, energy use per capita is less than one-third of the global average in 2035. Africa today is home to nearly half of the 1.3 billion people in the world without access to electricity and one-quarter of the 2.6 billion people relying on the traditional use of biomass for cooking. Globally, fossil fuels continue to meet a dominant share of global energy demand, with implications for the links between energy, the environment and climate change.
As the source of two-thirds of global greenhouse-gas emissions, the energy sector will be pivotal in determining whether or not climate change goals are achieved. Although some carbon abatement schemes have come under pressure, initiatives such as the President’s Climate Action Plan in the United States, the Chinese plan to limit the share of coal in the domestic energy mix, the European debate on 2030 energy and climate targets and Japan’s discussions on a new energy plan all have the potential to limit the growth in energy-related CO2 emissions. In our central scenario, taking into account the impact of measures already announced by governments to improve energy efficiency, support renewables, reduce fossil-fuel subsidies and, in some cases, to put a price on carbon, energy-related CO2 emissions still rise by 20% to 2035. This leaves the world on a trajectory consistent with a long-term average temperature increase of 3.6 °C, far above the internationally agreed 2 °C target.
Who has the energy to compete?
Large differences in regional energy prices have sparked a debate about the role of energy in unleashing or frustrating economic growth. Brent crude oil has averaged $110 per barrel in real terms since 2011, a sustained period of high oil prices that is without parallel in oil market history. But unlike crude oil prices, which are relatively uniform worldwide, prices of other fuels have been subject to significant regional variations. Although gas price differentials have come down from the extraordinary levels seen in mid-2012, natural gas in the United States still trades at one-third of import prices to Europe and one-fifth of those to Japan. Electricity prices also vary, with average Japanese or European industrial consumers paying more than twice as much for power as their counterparts in the United States, and even Chinese industry paying almost double the US level. In most sectors, in most countries, energy is a relatively minor part of the calculation of competitiveness. But energy costs can be of crucial importance to energy-intensive industries, such as chemicals, aluminium, cement, iron and steel, paper, glass and oil refining, particularly where the resulting goods are traded internationally. Energy-intensive sectors worldwide account for around one-fifth of industrial value added, one-quarter of industrial employment and 70% of industrial energy use.
Energy price variations are set to affect industrial competitiveness, influencing investment decisions and company strategies. While regional differences in natural gas prices narrow in our central scenario, they nonetheless remain large through to 2035 and, in most cases, electricity price differentials persist. In many emerging economies, particularly in Asia, strong growth in domestic demand for energy-intensive goods supports a swift rise in their production (accompanied by export expansion). But relative energy costs play a more decisive role in shaping developments elsewhere. The United States sees a slight increase in its share of global exports of energy-intensive goods, providing the clearest indication of the link between relatively low energy prices and the industrial outlook. By contrast, the European Union and Japan both see a strong decline in their export shares – a combined loss of around one-third of their current share.
Searching for an energy boost to the economy
Countries can reduce the impact of high prices by promoting more efficient, competitive and interconnected energy markets. Cost differentials between regional gas markets could be narrowed further by more rapid movement towards a global gas market. As we examine in a Gas Price Convergence Case, this would require a loosening of the current rigidity of liquefied natural gas (LNG) contracting structures and oil-indexed pricing mechanisms, spurred by accelerated gas market reforms in the Asia-Pacific region and LNG exports from North America (and an easing of costs for LNG liquefaction and shipping). There is also potential in some regions, notably China, parts of Latin America and even parts of Europe, to replicate at smaller scale the US success in developing its unconventional gas resources, though uncertainty remains over the quality of the resources, the costs of their production and, in some countries, public acceptance for their development.
A renewed focus on energy efficiency is taking hold and is set to deliver benefits that extend well beyond improvements in competitiveness. Notable policies introduced over the past year include measures targeting efficiency improvements in buildings in Europe and Japan, in motor vehicles in North America and in air conditioners in parts of the Middle East, and energy pricing reforms in China and India. As well as bringing down costs for industry, efficiency measures mitigate the impact of energy prices on household budgets (the share of energy in household spending has reached very high levels in the European Union) and on import bills (the share of energy imports in Japan’s GDP has risen sharply). But the potential for energy efficiency is still far from exhausted: two-thirds of the economic potential of energy efficiency is set to remain untapped in our central scenario. Action is needed to break down the various barriers to investment in energy efficiency. This includes phasing out fossil-fuel subsidies, which we estimate rose to $544 billion worldwide in 2012.
Enhancing energy competitiveness does not mean diminishing efforts to tackle climate change. The WEO Special Report: Redrawing the Energy-Climate Map, published in June 2013 identified four pragmatic measures – improving efficiency, limiting the construction and use of the least-efficient coal-fired power plants, minimising methane emissions in upstream oil and gas, and reforming fossil-fuel subsidies – that could halt the increase in emissions by 2020 without harming economic growth. This package of measures would complement the developments already envisaged in our central scenario, notably the rise in deployment of renewable energy technologies. Governments need, though, to be attentive to the design of their subsidies to renewables, which surpassed $100 billion in 2012 and expand to $220 billion in 2035. As renewables become increasingly competitive on their own merits, it is important that subsidy schemes allow for the multiple benefits of low-carbon energy sources without placing excessive burdens on those that cover the additional costs. A carefully conceived international climate change agreement can help to ensure that the energy-intensive industries in countries that act decisively to limit emissions do not face unequal competition from countries that do not.
Light tight oil shakes the next ten years, but leaves the longer term unstirred
The capacity of technologies to unlock new types of resources, such as light tight oil (LTO) and ultra-deepwater fields, and to improve recovery rates in existing fields is pushing up estimates of the amount of oil that remains to be produced. But this does not mean that the world is on the cusp of a new era of oil abundance. An oil price that rises steadily to $128 per barrel (in year-2012 dollars) in 2035 supports the development of these new resources, though no country replicates the level of success with LTO that is making the United States the largest global oil producer. The rise of unconventional oil including LTO) and natural gas liquids meets the growing gap between global oil demand, which rises by 14 mb/d to reach 101 mb/d in 2035, and production of conventional crude oil, which falls back slightly to 65 mb/d.
The Middle East, the only large source of low-cost oil, remains at the centre of the longer-term oil outlook. The role of OPEC countries in quenching the world’s thirst for oil is reduced temporarily over the next ten years by rising output from the United States, from oil sands in Canada, from deepwater production in Brazil and from natural gas liquids from all over the world. But, by the mid-2020s, non-OPEC production starts to fall back and countries in the Middle East provide most of the increase in global supply. Overall, national oil companies and their host governments control some 80% of the world’s proven-plus-probable oil reserves.
The need to compensate for declining output from existing oil fields is the major driver for upstream oil investment to 2035. Our analysis of more than 1 600 fields confirms that, once production has peaked, an average conventional field can expect to see annual declines in output of around 6% per year. While this figure varies according to the type of field, the implication is that conventional crude output from existing fields is set to fall by more than 40 mb/d by 2035. Among the other sources of oil, most unconventional plays are heavily dependent on continuous drilling to prevent rapid field-level declines. Of the 790 billion barrels of total production required to meet our projections for demand to 2035, more than half is needed just to offset declining production.
Demand for mobility and for petrochemicals keeps oil use on an upward trend to 2035, although the pace of growth slows. The decline in oil use in OECD countries accelerates. China overtakes the United States as the largest oil-consuming country and Middle East oil consumption overtakes that of the European Union, both around 2030. The shifting geography of demand is further underlined by India becoming the largest single source of global oil demand growth after 2020. Oil consumption is concentrated in just two sectors by 2035: transport and petrochemicals. Transport oil demand rises by 25% to reach 59 mb/d, with one-third of the increase going to fuel road freight in Asia. In petrochemicals, the Middle East, China and North America help push up global oil use for feedstocks to 14 mb/d. High prices encourage efficiency improvements and undercut the position of oil wherever alternatives are readily available, with biofuels and natural gas gaining some ground as transport fuels.
The great migration in oil refining and trade
Major changes in the composition of oil supply and demand confront the world’s refiners with an ever-more complex set of challenges, and not all of them are well-equipped to survive. Rising output of natural gas liquids, biofuels and coal- or gas-to-liquids technologies means that a larger share of liquid fuels reaches consumers without having to pass through the refinery system. Refiners nonetheless need to invest to meet a surge of more than 5 mb/d in demand for diesel that is almost triple the increase in gasoline use. The shift in the balance of oil consumption towards Asia and the Middle East sees a continued build-up of refining capacity in these regions; but, in many OECD countries, declining demand and competition in product export markets intensify pressure to shut capacity. Over the period to 2035, we estimate that nearly 10 mb/d of global refinery capacity is at risk, with refineries in OECD countries, and Europe in particular, among the most vulnerable.
The new geography of demand and supply means a re-ordering of global oil trade flows towards Asian markets, with implications for co-operative efforts to ensure oil security. The net North American requirement for crude imports all but disappears by 2035 and the region becomes a larger exporter of oil products. Asia becomes the unrivalled centre of global oil trade as the region draws in – via a limited number of strategic transport routes – a rising share of the available crude oil. Deliveries to Asia come not only from the Middle East (where total crude exports start to fall short of Asian import requirements) but also from Russia, the Caspian, Africa, Latin America and Canada. New export-oriented refinery capacity in the Middle East raises the possibility that oil products, rather than crude, take a larger share of global trade, but much of this new capacity eventually serves to cater to increasing demand from within the region itself.
The power sector adjusts to a new life with wind and solar
Renewables account for nearly half of the increase in global power generation to 2035, with variable sources – wind and solar photovoltaics – making up 45% of the expansion in renewables. China sees the biggest absolute increase in generation from renewable sources, more than the increase in the European Union, the United States and Japan combined. In some markets, the rising share of variable renewables creates challenges in the power sector, raising fundamental questions about current market design and its ability to ensure adequate investment and long-term reliability of supply. The increase in generation from renewables takes its share in the global power mix above 30%, drawing ahead of natural gas in the next few years and all but reaching coal as the leading fuel for power generation in 2035. The current rate of construction of nuclear power plants has been slowed by reviews of safety regulations, but output from nuclear eventually increases by two-thirds, led by China, Korea, India and Russia. Widespread deployment of carbon capture and storage (CCS) technology would be a way to accelerate the anticipated decline in the CO2 emissions intensity of the power sector, but in our projections only around 1% of global fossil fuel-fired power plants are equipped with CCS by 2035.
Economics and policies, in different doses, are key to the outlook for coal and gas
Coal remains a cheaper option than gas for generating electricity in many regions, but policy interventions to improve efficiency, curtail local air pollution and mitigate climate change will be critical in determining its longer-term prospects. Policy choices in China, which has outlined plans to cap the share of coal in total energy use, will be particularly important as China now uses as much coal as the rest of the world combined. In our central scenario, global coal demand increases by 17% to 2035, with two-thirds of the increase occurring by 2020. Coal use declines in OECD countries. By contrast, coal demand expands by one-third in non-OECD countries – predominantly in India, China and Southeast Asia -- despite China reaching a plateau around 2025. India, Indonesia and China account for 90% of the growth in coal production. Export demand makes Australia the only OECD country to register substantial growth in output.
Market conditions vary strikingly in different regions of the world, but the flexibility and environmental benefits of natural gas compared with other fossil fuels put it in a position to prosper over the longer term. Growth is strongest in emerging markets, notably China, where gas use quadruples by 2035, and in the Middle East. But in the European Union, gas remains squeezed between a growing share of renewables and a weak competitive position versus coal in power generation, and consumption struggles to return to 2010 levels. North America continues to benefit from ample production of unconventional gas, with a small but significant share of this gas finding its way to other markets as LNG, contributing – alongside other conventional and unconventional developments in East Africa, China, Australia and elsewhere – to more diversity in global gas supply. New connections between markets act as a catalyst for changes in the way that gas is priced, including more widespread adoption of hub-based pricing.
Brazil is at the leading edge of deepwater and low-carbon development
Brazil, the special focus country in this year’s Outlook, is set to become a major exporter of oil and a leading global energy producer. Based mainly on a series of recent offshore discoveries, Brazil’s oil production triples to reach 6 mb/d in 2035, accounting for one-third of the net growth in global oil production and making Brazil the world’s sixth-largest producer. Natural gas production grows more than five-fold, enough to cover all of the country’s domestic needs by 2030, even as these expand significantly. The increase in oil and gas production is dependent on highly complex and capital-intensive deepwater developments, requiring levels of upstream investment beyond those of either the Middle East or Russia. A large share of this will need to come from Petrobras, the national oil company, whose mandated role in developing strategic fields places heavy weight on its ability to deploy resources effectively across a huge and varied investment programme. Commitments made to source goods and services locally within Brazil add tension to a tightly stretched supply chain.
Brazil’s abundant and diverse energy resources underpin an 80% increase in its energy use, including the achievement of universal access to electricity. Rising consumption is driven by the energy needs of an expanding middle class, resulting in strong growth in demand for transport fuels and a doubling of electricity consumption. Meeting this demand requires substantial and timely investment throughout the energy system – $90 billion per year on average. The system of auctions for new electricity generation and transmission capacity will be vital in bringing new capital to the power sector and in reducing pressure on end-user prices. The development of a well-functioning gas market, attractive to new entrants, can likewise help spur investment and improve the competitive position of Brazilian industry. A stronger policy focus on energy efficiency would ease potential strains on a rapidly growing energy system.
Brazil’s energy sector remains one of the least carbon-intensive in the world, despite greater availability and use of fossil fuels. Brazil is already a world-leader in renewable energy and is set to almost double its output from renewables by 2035, maintaining their 43% share of the domestic energy mix. Hydropower remains the backbone of the power sector. Yet reliance on hydropower declines, in part because of the remoteness and environmental sensitivity of a large part of the remaining resource, much of which is in the Amazon region. Among the fuels with a rising share in the power mix, onshore wind power, which is already proving to be competitive, natural gas and electricity generated from bioenergy take the lead. In the transport sector, Brazil is already the world’s second-largest producer of biofuels and its production, mainly as sugarcane ethanol, more than triples. Suitable cultivation areas are more than sufficient to accommodate this increase without encroaching on environmentally sensitive areas. By 2035, Brazilian biofuels meet almost one-third of domestic demand for road-transport fuel and its net exports account for about 40% of world biofuels trade.
THE WORSENING METHANE THREAT FROM GASES U.S. Methane Emissions 50 Percent Higher Than EPA Estimates
November 26, 2013 (Harvard School of Engineering and Applied Sciences)
“Emissions of methane from fossil fuel extraction and refining activities in the South Central U.S. are nearly five times higher than previous estimates…Methane, a potent greenhouse gas, is produced through natural gas production and distribution, cattle farming, landfills, coal mining, manure management and many other anthropogenic and natural sources, though human activities are thought to contribute approximately 60 percent of the total…[Overall] total methane emissions in the U.S. appear to be 1.5 times and 1.7 times higher than the amounts previously estimated…Along with carbon dioxide, methane is one of the most important greenhouse gases in terms of its potential to raise global temperatures. It also encourages the formation of surface ozone in cities and affects other aspects of atmospheric chemistry…” click here for more
UTILITY PAYS FOR WIND TURBINES’ EAGLE TAKES Wind company pays fine over eagle deaths
Julian Hattem, November 22, 2013 (The Hill)
"A renewable power company has agreed to pay $1 million over the deaths of [14 golden eagles and 149 other protected birds at two wind farms in Wyoming within the last three years]…The settlement with Duke Energy is the first time the Obama administration, which has been a strong backer of wind power, has penalized a wind energy company for killing eagles…Golden eagles are not endangered species, but are protected under the Migratory Bird Treaty Act…[T]he facilities were developed…[when the wind industry’s understanding of eagle impacts at wind farms was still evolving…[During the Obama tenure, the wind] industry has grown by about 30 percent each year…The Fish and Wildlife Service grants [five year] permits to allow companies to build wind farms as long as they use ‘advanced conservation practices’ to protect the animals…” click here for more
THE $50 BIL FUTURE OF HIGH VOLTAGE TRANSMISSION High-Voltage Direct Current Transmission Systems; HVDC Converters, Cables, Submarine Interconnections, Multiterminal Grids, and Hybrid Breakers: Global Market Analysis and Forecasts
4Q 2013 (Navigant Research)
“Generally regarded as the most complex machine in the world today, the interconnected power grid started off with a centralized generator and a direct current (DC) transmission line in New York City in 1882. Since then, most grids have been built using alternating current (AC)…While AC transmission still dominates the transmission industry overall, doubts concerning the limited capability of classic [high voltage direct current (HVDC)] transmission have been removed by innovative voltage-source converters (VSCs)…Navigant Research forecasts that global cumulative HVDC converter revenue will amount to $56.6 billion between 2013 and 2020…” click here for more
Electric Vehicle Consumer Survey; Consumer Attitudes, Opinions, and Preferences for Electric Vehicles and EV Charging Stations
4Q 2013 (Navigant Research)
Alternative fuel vehicles, particularly battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), are a small but growing portion of the automotive market. First commercially available in 2010, the volume of BEVs and PHEVs has grown significantly during the last several years, with new auto manufacturers bringing models to market and existing manufacturers reducing prices. Navigant Research expects shipments of BEVs and PHEVs in the United States to reach 30,195 and 59,106, respectively, by the end of 2013. By 2020, shipments are expected to reach 130,641 and 210,772, respectively.
In order to better understand consumer attitudes toward BEVs and PHEVs, Navigant Research conducted a web-based survey of 1,084 consumers in the United States. The survey was executed in the fall of 2013 using a nationally representative and demographically balanced sample. The key findings of this survey are summarized in this report.
» Favorability ratings for alternative fuel vehicles remain high, with all three types of vehicles (hybrid, electric, and natural gas) above the 50% mark for favorability.
» The top five brands consumers would consider for an electric vehicle (EV) include Toyota (46%), Ford (45%), Chevrolet (45%), Honda (42%), and Nissan (30%).
» Consumers are most familiar with the Chevrolet Volt (44%) and the Nissan LEAF (31%). Familiarity with the Tesla Model S, Ford C-Max Energi, and the BMW i3 is below 25% for each.
» While 41% of survey respondents chose the gasoline-only engine as their preferred engine type, the hybrid engine was the most common second choice (20%). In terms of the top three engine preferences, there was a slight difference between gasoline and hybrid engines (64% vs. 63%).
» Two-thirds of consumers surveyed stated that EVs have unique features that stand out from their gasoline counterparts, and 6 out of 10 respondents agreed that EVs are much cheaper to own in the long run than gasoline cars.
» Nearly 50% of consumers said high fuel economy was the most important feature in a vehicle.
» While 41% of consumers were interested in public charging locations, only 16% were willing to pay more than $2 for a 15-minute charge at such locations.
» Consumers had a favorable opinion of all three types of alternative fuel vehicles. Favorability (very favorable or favorable) was highest for hybrid vehicles at 67%, followed by EVs at 61%. Natural gas vehicles (NGVs) also had a high favorability rating at 56%...
Summary and Conclusions
As more alternative fuel vehicles come to market, consumer favorability for hybrids, BEVs, PHEVs, and NGVs is strong. Respondents to Navigant Research’s survey held generally positive opinions of EVs, with the majority agreeing that they have unique features that make them stand apart from their gasoline counterparts. However, interest in BEVs and PHEVs remains moderate. Even under several different scenarios, interest in BEVs and PHEVs remains below 50%, indicating that consumers like the idea of EVs, but may not be won over by their features and price points.
With regard to specific models, consumers were most familiar with the Chevrolet Volt and the Nissan LEAF. Less than a quarter of respondents were familiar with the Tesla Model S, Ford C-Max Energi, and BMW i3. Consumers did not rank any BEV high in regard to being a good value for the price.
Engine, Body Type, and Option Preferences
Despite the growing number of alternative fuel vehicles, consumers rate gasoline-only engine vehicles as their most preferred engine type. However, when the top three preferences for engine type are added up, there is only a slight difference in favorability between the gasoline-only engine (64%) and the hybrid gasoline/electric engine (63%).
When viewed by self-identified technology adopter status, more than 70% of respondents who rated all-electric engines or plug-in hybrid electric engines as their first choice identified themselves as late majority or early majority. This indicates that the market for EVs is expanding beyond the early adopter stage.
Currently, most alternative fuel vehicles are small to midsize passenger cars, the body type consumers rate most desirable. This preference may be tied to fuel efficiency, as it was the top option consumers wanted. Roughly one-third of consumers preferred SUVs. This may be an area for auto manufacturers to explore as they build out their BEV and PHEV portfolios.
While consumers desire fuel efficiency, more than half said they also desire high performance, including acceleration and handling, as well as all-wheel drive capabilities. Environmental benefits of BEVs and PHEVs, such as zero emissions, as well as autonomous capabilities and the ability for the vehicle to provide remote electricity or backup household electricity, were less important.
It is possible that price points could hinder EV adoption, as the majority of consumers say they plan to spend less than $25,000 on their next vehicle. Although prices for some alternative fuel vehicles have declined, the majority remain above this price point.
Public Charging Stations
While interest in public charging stations is moderate, consumers do not appear to be willing to pay for the convenience. Only 40% of respondents were interested, while more than half stated they would only use a quick charge station if the cost were free or less than $1.
While the driving range of BEVs is still limited to a few hundred miles at best, the deployment of public charging stations will continue. Because consumers do not appear to be willing to pay for the convenience of charging BEVs, manufacturers will need to consider the cost of building these stations as part of the cost of doing business.
ALL NEW U.S. OCTOBER POWER WAS SOLAR Solar Energy Was America's Sole New Power Source in October; Get ready for a photovoltaic building boom.
Todd Woody, November 26, 2013 (The Atlantic)
“In October, power plants generating 530 megawatts of electricity came online in the United States. And every single electron put on the grid came from the sun…It’s possible to make too much of the fact…After all, the completion dates of power plants can be random…[particularly] for complex, multibillion-dollar, fossil fuel power stations…However, it is also possible to be too dismissive of this energy shift and the fact that solar supplanted coal and natural gas in October…[with 530, about] what a medium-sized natural gas-fired power plant would generate…[I]t’s a clear sign that solar is no longer a niche play – especially when you consider that the October’s numbers don’t include the installation of roof photovoltaic panels on homes and businesses. In California alone, for instance, 19.5 megawatts of rooftop solar was installed in the territories of the state’s three big utilities just in October…” click here for more
WIND’S KEY SUPPORT UNDER ATTACK Tax Credit for Wind Energy Is Truly Up in the Air
Clare Foran, November 26, 2013 (National Journal)
“…Leaders of the wind-power industry say they hope legislators will come together to save the credit, known as the PTC [set to expire at the end of this year], from disappearing…But opposition is fierce, and growing stronger, with conservative groups and oil and gas industry stakeholders…[A] series of tax-reform proposals [from the Senate Finance Committee], including a plan to end or scale back certain incentives frequently claimed by the oil industry…[made no mention] of renewable energy tax credits…[The House Ways and Means Committee] is also drafting a proposal but has not yet put forward a tax-reform plan…[T]here is no certainty that legislators will be able to find enough common ground necessary to pass a comprehensive [tax code reform] deal…A second option, and one which may be more likely, would be for the credit to be renewed as part of an extenders package…” click here for more
SMART BUILDINGS BIZ TO $100BIL+ BY 2021 Commercial Building Automation Systems; HVAC, Lighting, Fire & Life Safety, and Security & Access Control Systems and Building Management Systems: Global Market Analysis and Forecasts
4Q 2013 (Navigant Research)
“Commercial building automation systems (BASs) continue to evolve…Integrated by new building management systems (BMSs), the automation of HVAC, lighting, fire & life safety, and security & access controls is increasingly forming the foundational infrastructure…aimed at reducing the approximately 12% of total global energy end use by the commercial sector…[The global market] is driven in general by new and retrofit commercial building construction and more specifically by the energy efficiency requirements…New commercial construction has been suppressed by the financial crisis…with the exception of certain parts of Asia Pacific…[R]enewed economic growth…accelerating energy efficiency targets for commercial buildings…[and] computing, communications, sensing, and software technologies…[offer] risks and rewards…Navigant Research forecasts that global commercial BAS revenue will grow from $58.1 billion in 2013 to $100.8 billion in 2021…” click here for more
The people with the biggest stake speak out. From matt trapnell via YouTube
This new piece from Peter Sinclair tracks the connection, through Congressman Joe Barton (R-TX), between the “smoking doesn’t cause cancer movement” and the climate change denial movement. From greenman3610 via YouTube