Comments TomCasten has made

Super-grid fantasies

Energy is wasted in copious amounts because thermal energy will not travel economically. Period. End of story.

Add a fantasy superconducting grid with no losses (vs.actual 7.5% average and 25% on peak losses) and it does nothing to utilize the 66% wasted byproduct heat at remote electricity generation plants (fossil, nuc or biomass) and does nothing to capture energy from industrial exhaust or flare gasses.

But if we built generation at factories ...

Tom CastenOn Proposed renewable-energy bill is better than nothing posted 9 months, 3 weeks ago 26 Responses

Carol Browner on Carbon Caps

Or maybe Carol Browner is closer to economic truth than the card-carrying economic advisors.  What if apparently cheap but high carbon coal-fired power costs more than clean energy?  What if we add to the apparent price of coal power  the costs of premature deaths, pulmonary and other diseases, damage to forests and buildings and failed fly ash impoundments?  In our calculations, replacing coal with local generation that recycles waste energy provides clean energy that reduces total costs, before counting climate change costs.

Tom Casten

Tom Casten, Chair, Recycled Energy Development LLC

clean air act bad for environment

Sean replied about the problem of New Source Review.  I address how the metrics chosen to control criteria pollution ignore efficiency and thus encourage inefficiency.

The ideal pollution regulation, from a market point of view, is a specified allowance of each criteria pollutant per unit of useful output,  given equally to all generators of heat or power.  This levels the playing field, making every electric generator and every thermal generator buy allowances for all pollution above the amount allowed.  Every cleaner plant gains a source of revenue, thus encouraging clean plants.  The allowance can be adjusted down over time, lots of details, not important to your question of how CAA hurts the environment versus a better control methodology.

What CAA does is grant emission ceiling unique to each plant in PPM of exhaust concentration, which then applies until and unless the plant makes a major modification, in which case it must meet current BACT.  Problems? 1) No relationship in methodology to efficiency, 2)No credit for extracting more useful output than other plants, 3) if you come back later to improve energy productivity, you lose the permit, 4) the allowed pollution does not ratchet down over time, and 5) Each new plant must reduce the pollution from their plant to BACT, without regard to the cheapest way to lower emissions.

Now to results.  Over thirty years, every time we try to develop a new, cleaner power plant that recycles waste energy and achieves 65% to 95% efficiency, we must jump CAA hurdles.  The plant must be cleaner than all existing plants, but then sell its product in compeition with the old plants.  This often ruins the economics of a new plant, thus preserving and enhancing the value of the old plants.  When we find a way to recycle carbon black tail gas and produce 30 megawatts of power with no incremental fuel, no incremental CO2, the carbon black company is afraid the change will trigger NSR.  We fixed that with a special EPA MACT (May of 2002) but face the problem in other industries.

Finally, there are many opportunities to eliminate one ton of a criteria pollutant at old plants that would cost as little as 1% of the cost of removing one more ton from a new plant.  But the new plant cannot typically trade emissions,so must achieve the current BACT at its plant.  This has two bad results.  First, society pays $100 to remove a unit of pollution that could have been removed elsewhere for $1 dollar - bad use of resources.  But the bigger problem, and further answer to the question, is that the potential new plant, which would double the efficiency of the old plant, is simply not built, because of the excessive cost of removing the last unit of pollutant.  

If you were in the business of supplying large rocks, would you go screen beach sand, or would you go where the big rocks are found?  The CAA tells plant developers who are using prime movers with 3% of the emissions of existing plants that they must add end-of-pipe controls - screen for rocks - to reduce the emissions to 1% of the old plants.

We can do better!

Tom Casten, Chair, Recycled Energy Development LLC

McCain's Offsets

So fix the rules to completely avoid 'bogus offsets'.  If emitters cannot purchase carbon offsets, then clean plants cannot sell carbon allowances.  Unless the value that clean plants create by not emitting as much carbon per unit of output is available to the clean plants, those plants will not be built.

As Shaw said, be careful what you wish for.  Be especially careful about supporting a system of carbon penalties that does nothing to fix the underlying problem of excessive carbon per unit of output.

Tom Casten

Tom Casten, Chair, Recycled Energy Development LLC

Engaging Republicans in climate change

It is easy to score comedy points on our President's latest climate mitigation mumbling, but how best advance the ball?

Republicans typically lead with the economy and the party line is to frame this as a debate between cheap (dirty) energy and expensive clean energy.  Nice sound bite, wrong facts.

The debate is between expensive dirty energy and clean cheap energy.  The rising cost of fossil fuels without improved efficiency is strangling the economy. The sub-prime mortgage crises is not the only thing tanking the U.S. economy.  Rising costs of energy services are hammering everyone.

Can the economy afford to keep increasing the fossil fuel it burns for the next 17 years?  Whomever leads the way to reducing energy costs will gain an inside track to the White House.

Frame the issue for what it is.  Reducing GHG emissions is an economic imperative.

Tom Casten, Chair, Recycled Energy Development LLC

A better way to control carbon than tax

The key insight of Dr.Monica Prasad is the power of transfering payments from CO2 emissions to support the cleaner energy production.  She says Denmark's carbon tax worked better than other countries' carbon taxes because most of the tax revenue went support cleaner energy production approaches.

The better way is an output emission allowance standard, as follows.  Use delivered electricity or useful thermal energy as the metric.  Give every producer of heat or power the same allowance for every unit they deliver.  Require every producer to obtain and offset every ton of CO2 they produce with an allowance.  Make the allowances fully tradeable and exchangeable between heat and power.  Fine any producer who does not cover CO2 emissions with allowances 150% of the average cost of the CO2 emissions over the prior year.  True up annually.

Add two features.  Publish a schedule that reduces the allowance per unit of electricity and of heat each year to achieve a society wide drop of CO2 emissions.  Then adjust the scheduled alowance in future years for growth (or shrinkage) of economy-wide fossil CO2 emissions.  For example, to adjust the scheduled allowance of CO2 per MWh in 2012, multiply the original scheduled allowance by a fraction which has the 2008 base year economy-wide fossil CO2 emissions divided by the 2011 CO2 emissions.  This insures that the total allowances shrink as designed, withou regard to growth of fossil fuel use or economic growth.

Why is an output allowance system better?

1. The market sets the allowance price for CO2 and constantly adjusts.  There is no way even the wisest philosopher queen could ever set the right tax rate to accomplish desired CO2 reduction.  Pols set the desired reduction and the market discovers the price per ton of CO2.
   
2. There are no frictional losses.  Every dollar paid by the dirty electricity and thermal producers goes to the cleaner producers, avoiding the tempetation for politicians to divert CO2 revenues to other purposes.
   
3. Selling excess allowances immediately benefits clean energy projects and helps encourage deployment.  Although CO2 tax payments may discourage dirty energy production, the tax does not directly encourage clean energy production.
   
3. The output allowance system imposes no direct costs on the economy.  All payments from a dirty energy producers go to clean energy producers.  Either approach will redistribute wealth, but the allowance system transfers the dirty energy payment directly to clean energy projects.
   
4. The dynamic effect will reduce delivered energy costs.  Entrepreneurs will lay awake nights trying to deploy projects that profitably increase delivered fossil efficiency.
   
5. The output system lets the market select the technology of cleaner energy instead of a government such as Denmark selecting the favored technology.
   
6. Most importantantly, output is the correct metric for CO2 control.  The economy gains no direct benefit from burning fossil fuel, but that burning causes pollution.  Useful energy services have no direct impact on the environment, except to the extent their production caused pollution. The economy depends on the availability and cost of useful energy services.  Heat and power are the closest thing to useful energy services that are measured. (No one measures the light in the room, which is the truly useful 2% to 4% of the fuel energy that was spent to genrate and deliver electricity and then convert that power to light).  Success of any system depends upon measuring and rewarding the right metric. Output is the right metric to induce profitable greenhouse gas reductions.

Ditto the 17% or so of GHG from non-CO2.  Perhaps tax the same way as transportation.

Circuit Breaker? The government could have unlimited allowances to sell at a starting price deemed acceptable by the pols, say $10 per ton of CO2.  Then increase the price by 10% per year comppound or higher value.  This eases the transition problems from inefficient dirty production to cleaner and more efficient production and soon drives the price of government allowances out of reach.

Tom Casten
Chair, Recycled Energy Development

Tom Casten, Chair, Recycled Energy Development LLC

Plug in Hybrids

David cites studies showing electricity for cars saves pollution regardless of the fuel or generation method and concludes by describing plug in hybrid cars as, "one of the few climate change solutions that's an unambiguous positive." We agree this is one unambiguous positive, but would make three points:

First, there are other unambiguously positive solutions that are not being deployed in a remotely optimal fashion, and they do not require any new technology.

Second, all of us should expend more brain cells demanding "unambiguously positive solutions" to climate mitigation.  The "lazy" environmentalist that pushes for all possible renewable energy deployment with no regard for cost needs to think harder to find sources of clean power that are also cost effective, and not assume the world optimally produces energy services, beacuse it does not.  The "lazy" business person or economist that objects to all government programs to reduce GHG emissions because "these actions will damage the economy", needs to think harder to learn about clean energy sources that benefit the economy, and learn why those sources are not being optimally deployed.  All citizens should join in non-partisan efforts to deploy double bottom line solutions to climate change.

Finally, the largest opportunity for "unambiguously positive solutions" is to recycle currently wasted energy.  US industry vents energy streams that could generate nearly 10% of US power with no fuel and no incremental pollution.  Contrast this with the 2.6% of US power generated in 2005 from renewables, exclusing hydroelectricity.  Why not chase industrial waste energy recycling with the same vigor we are chasing renewable energy.  Bill McKibben wonders if the problem is that there aren't any folk songs about heat recovery.

The energy waste in U.S. electricity generation and delivery is even greater.  The US monopoly-dominated grid delivers only 33% of input energy as electricity and wastes the other 2/3's. This dismal efficiency has not improved in nearly 50 years.  Ouch!  By building all new power plants next to thermal users and recycling this presently wasted heat, the US could eliminate burning 13 quads of fuel per year -- 13% of the current 100 quads used by the entire economy.

We wrote in a new book* that recycling the current industrial and electric energy waste would save 17 quads of fuel and would, "reduce energy costs by $70 billion per year and cut U.S. fossil fuel use from 85.7 quads (in 2004) to 68.7 quads, roughly a 20% drop in fossil fuel and in associated CO2 greenhouse gas emissions."

Recycling waste energy, by halving the net fossil fuel used to generate electrity, would double the emissions impact of plug-in electric hybrid automobiles, and would reduce the cost of electricity for recharging -- a double double win.

David, happily there are other "unambiguously positive solutions;" society will benefit from rapid deployment of all double bottom line sollutions.

*"Energy and American Society -- Thirteen Myths", Springer, ed Marilyn Brown and Benjamin Sovocool

Tom Casten
Chairman, Recycled Energy Development LLC

Tom Casten, Chair, Recycled Energy Development LLC