Friday, June 23, 2017

State Level Electric Energy Efficiency Potential Estimates

Abstract

This report reflects work performed under contract with the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. The research focused on applying the result of EPRI’s 2014 US Energy Efficiency Potential Study which was conducted at the Census division level and developing a method to apply the division level results to the state level by customer class and by end-use. The state allocation shows that every state has a large amount of electric energy efficiency potential that can be utilized as a cost-effective energy resource. This cost-effective electric potential grows over time as equipment reaches the end of its useful life and is replaced by a cost-effective efficient replacement. In total gigawatt-hours (GWh), this energy efficiency economic potential in 2035 ranges from 901 GWh in Vermont to 87,336 GWh in Texas, reflective of the both electric loads and the types electric services in each state. Finally, to understand the potential to bring additional technologies to market and the impact that added incentives can have on energy efficiency potential, the national model and state allocations were re-run with differing levels of incentives. These results, which vary by state, show both the direct impact of incentives as well as potential opportunities to increase energy efficiency through cost reductions.

Overview

The EPRI's 2014 study found 790,639 GWh of cost-effective electric energy efficiency available from 2012 to 2035, which represents 17.5% of baseline retail sales in 2035. Immediately following the study, stakeholder's expressed interest in state level energy efficiency potential analysis to aid in more localized energy planning. Updated analysis shows an estimate of 740,985 GWh of cost effective electric-energy efficiency economic potential from 2016 to 2036 with significant savings across residential, commercial, and industrial sectors.
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The report concludes that every state has a large amount of electric energy efficiency potential that can be utilized as a cost-effective energy resource. As equipment reaches the end of its useful life and is replaced by cost-effective energy efficient replacements, the cost-effective electric potential grows over time. The study estimates that state-level energy efficiency potential ranges from 12% in Missouri to 21% in Florida relative to adjusted baseline sales, with twenty six states showing more than 15% savings available cost-effectively between 2016 and 2035. Another important conclusion of the study is that there are numerous states that do not completely achieve their energy efficient economic potential (EP). Only twenty two states have developed programs that would be on track to achieve 100% of the model's cost savings by 2035. This is to say that there is still significant underinvestment in energy efficiency; in fact, 18 states would have captured less than 50% of the energy efficiency potential estimated by the EPRI model if they were to continue on the same historical trajectory. The role of incentives in energy efficiency potential was also analyzed. With $20/MWh, the EE economic potential increases by 102,848 GWh, which is a 13% increase over the case with no incentives involved.

The full report can be found here:
Project Manager: C. Holmes  and S. Mullen-Trento

Chinese Tesla rival is planning to launch a $7,800 ‘ultra-compact’ electric car in 2018 with changeable batteries

Chinese start-up CHJ Automotive is the newest company looking to enter the rapidly growing electric car market, which has been historically led by Tesla. The new player is currently developing a compact electric car and a hybrid SUV. The "ultra-compact" electric car, at 2.5 meters long and 1 meter wide,  is set to be launched in March 2018. It is equipped with Google's in-car operating system and runs on two swappable batteries. Kevin Shen, CEO of CHJ, said that "In China, there are 340 million people (who) daily commute with e-scooters, but there is a strong demand for them to upgrade to something. But we cannot imagine all of them driving cars, so we want to give them something else, which is an ultra-compact car." China is not the only target market - the company will launch the compact car in Europe as part of ride sharing projects. CHJ has partnered with car-sharing platform Clem. The partnership has already begun trialing in Paris, where the project is expected to ease traffic. In 2016, Tesla sold $1 billion worth of vehicles. But Shen is not worried saying that China sells in excess of 25 million cars each year with just a small fraction being electric vehicles. "There is a very big market for everybody," said Shen. 


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For full story see  
by Arjun Kharpal, CNBC
June 16, 2017

Thursday, June 22, 2017

As Interior pivots to fossil fuel extraction, reports shows it costs taxpayers bigly - Taxpayers lose $7 billion a year due to U.S. subsidies for fossil fuels. The Trump administration might increase that.


In the months since he took office, President Donald Trump has taken steps to uphold some of his campaign promises, namely by deregulating oil, gas, and oil extraction. The Trump administration's newly proposed budget includes new steps in the process of deregulation, specifically by removing significant mechanisms of polluter oversight and boosting the production of fossil fuels on public lands. Despite claims of fossil fuel leasing having a net-negative impact, the Department of the Interior is expecting to find ways to increase government revenue from fossil fuel leases. A new study from Oil Change International reported that current subsidization for fossil fuel production on public lands costs taxpayers more than $7 billion. Interior Secretary Ryan Zinke said that the newly proposed budget is intended to bring in more money for the public.

Democrats in Congress have vowed to oppose the increase in fossil fuel extraction on public lands. “Once again, the Trump Administration has turned its back on Teddy Roosevelt-style conservatism and is instead trying to allow special interests to pillage our natural resources so a wealthy few can make themselves even wealthier,” Senate Energy and Natural Resources Committee ranking member Maria Cantwell (D-WA) said in a statement. “We won’t let him.” The Trump administration is taking other steps to forming a better partnership with industry. The Department of Interior, which is able to issue permits for pipeline right of ways through public lands, has been given a $16 million increase to its oil and gas programs as part of the proposed budget. The budget document, which relies on opening up the Arctic National Wildlife Refuge, also states that "onshore energy mineral leasing" will bring in $330 million more in 2018 than 2017 and that offshore mineral leasing will bring in $450 million. 
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https://upload.wikimedia.org/wikipedia/commons/c/ce/Oil_well.jpg
However, it is unclear as to how the Trump administration will be able to reach these goals, and Zinke has stated that testing still needed to be done. The increased revenues was another example of “crazy math in the budget,” said David Turnbull, a spokesperson for Oil Change International. “Those sorts of increases in the royalties received are definitely not attributed to raising the royalty rate, but rather… a totally unrealistic expectation of opening up new oil and gas drilling that will wreck the climate.” The Oil Change International report, which concludes in the $7 billion cost only looks at direct costs to taxpayers. Then, health and climate impacts would merely add on to the existing costs. According to the report, fossil fuel companies are ripping off taxpayer in several ways, including undervaluing leases.“For example,” the report says, “the BLM set rates for ‘renting’ federal lands for oil and gas leases in 1987 to $1.50 per acre, or a fraction thereof, for the first five years of the lease term and $2 per acre, or fraction thereof, for any subsequent year. This rate has not been raised in 30 years — not even to reflect inflation.” In 2011, around 20 percent of offshore leases for oil and gas development completely avoided royalty payments, the report found. The government's decision to support the industry greatly impacts the climate as well -- the report found that “cutting off subsidies to Big Coal in Wyoming would save the same carbon emissions over 20 years as shutting down 32 coal-fired power plants.”


FOR FULL STORY GO TO


by Samantha Page, Climate Reporter at ThinkProgress www.thinkprogress.org

June 25, 2017

Wednesday, May 24, 2017

Arizona utility signs game-changing deal cutting solar power prices in half - Tucson Electric Power to buy new solar power at under 3 cents per kWh, a “historically low price.”

Remarkable drops in the cost of solar and wind power have effectively turned the global power market upside down in recent years.

We’ve seen prices for new solar farms below 3 cents per kilowatt hour (kwh) in other countries for over a year now, but before this week, not in the U.S. That changed on Monday when Tucson Electric Power (TEP), an Arizona utility company, announced that it had reached an agreement to buy solar power at the same game-changing price.

TEP says that this is a “historically low price” for a 100-megawatt system capable of powering 21,000 homes — and that the sub-3-cents price is “less than half as much as it agreed to pay under similar contracts in recent years.”

For context, the average U.S. residential price for electricity is nearly 13 cents per kwh, and the average commercial price is 10.5 cents.

NextEra Energy Resources will build and operate the system, which also includes “a long duration battery storage system” (whose price is not included in the 3 cents/kwh). Also worth noting: The sub-3-cents contracts that have been signed in other countries such as Chile, Dubai, and Mexico are unsubsidized, whereas U.S. prices include the 30 percent Investment Tax Credit.
https://www.tep.com/avalon-solar-ii/ Arizona solar array. CREDIT: Tucson Electric Power

PV Magazine reports “this is the lowest price” they’ve seen for solar yet in this country. And Bloomberg New Energy Finance chair Michael Liebreich explained last month that thanks to recent price drops, “unsubsidized wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world — sometimes by a factor of two.”

...
by Dr. Joe Romm, Founding Editor of Climate Progress, “the indispensable blog,” as NY Times columnist Tom Friedman describes it.
May 23, 2017

Saturday, May 13, 2017

Putting a value on injuries to natural assets: The BP oil spill

Summary:
When large-scale accidents cause catastrophic damage to natural or cultural resources, government and industry are faced with the challenge of assessing the extent of damages and the magnitude of restoration that is warranted. Although market transactions for privately owned assets provide information about how valuable they are to the people involved, the public services of natural assets are not exchanged on markets; thus, efforts to learn about people's values involve either untestable assumptions about how other things people do relate to these services or empirical estimates based on responses to stated-preference surveys. Valuation based on such surveys has been criticized because the respondents are not engaged in real transactions. Our research in the aftermath of the 2010 BP Deepwater Horizon oil spill addresses these criticisms using the first, nationally representative, stated-preference survey that tests whether responses are consistent with rational economic choices that are expected with real transactions. Our results confirm that the survey findings are consistent with economic decisions and would support investing at least $17.2 billion to prevent such injuries in the future to the Gulf of Mexico's natural resources.
...
The federal judge in an initial phase of the lawsuit involving BP determined that the best estimate of the amount of oil released was 134 million gallons, making it the largest maritime oil spill in U.S. history. On behalf of the trustees of the Gulf's natural resources and under the guidance of the lead agency for this process, the U.S. National Oceanic and Atmospheric Administration (NOAA), we estimated the monetary value of the natural resource damage from the spill, as specified by the Oil Pollution Act (OPA) of 1990. Such estimates can inform settlement negotiations between the government and the responsible parties, be entered as evidence at trial, and contribute to choosing projects to restore injured environmental resources (1). Trustees undertook a number of studies to quantify ecological impacts and economic damages caused by the spill, including what we describe here. The natural resource–damage case was settled in April 2016. The Consent Decree called for total payments of $20.8 billion, $8.8 billion of which was for natural resource damages. Decisions related to the settlement details are confidential.

Economic measures of the damages to natural resources consider the effects on use (or active use) and nonuse (or passive use) values (2). “Use values” arise when an individual derives satisfaction from using a resource (e.g., fishing or visiting a beach), either now or in the future. “Nonuse values” arise when an individual derives satisfaction from the existence of a resource, even though that individual would not visit or use it. The OPA regulation specifies that damage measures include both use and nonuse or the total economic value lost. Private claims by those engaged in commercial fishing or in operating hotels are handled separately.

After the 1989 Exxon Valdez oil spill and controversy over assessing monetary damages with stated-preference surveys, an expert panel (3) recommended criteria for conducting these studies. Research has since established ways to ask stated-choice questions that induce truthful responses and meet these proposed criteria. Subsequent criticism of stated-preference research has focused on how large the change in the average person's value should be with changes in the size of injuries to natural resources. The research we discuss here identified what can be expected on the basis of a conventional economic model of an individual's choices, with minimal assumptions. It also offers evidence that the average individual's likelihood to vote for a program to avoid injuries is causally linked to a consistent understanding of the severity of the injuries.
...
The study interviewed a large random sample of American adults who were told about (i) the state of the Gulf before the 2010 accident; (ii) what caused the accident; (iii) injuries to Gulf natural resources due to the spill; (iv) a proposed program for preventing a similar accident in the future; and (v) how much their household would pay in extra taxes if the program were implemented. The program can be seen as insurance, at a specified cost, that is completely effective against a specific set of future, spill-related injuries, with respondents told that another spill will take place in the next 15 years. They were then asked to vote for or against the program, which would impose a one-time tax on their household. Each respondent was randomly assigned to one of five different tax amounts: $15, $65, $135, $265, and $435.
The final questionnaire was administered to a random sample of households in the contiguous United States that included at least one English-speaking adult. Face-to-face interviews were completed between October 2013 and July 2014 by nearly 150 trained interviewers. A total of 3,656 people completed the survey for a weighted response rate of 48%. A nonresponse followup (NRFU) survey involved mailing paper questionnaires to households at which no main study interview had been completed. NRFU questionnaires were received from 1492 households, representing a NRFU household response rate of 51% (see SM for details of weighting and nonresponse)....

For each injury description, support for the program declines as the tax increases, consistent with the first test for consistent decisions. For each tax amount, support for the program increases as the set of injuries increases, consistent with the second test.
The estimate for the lower-bound mean WTP for the smaller set of injuries is $136 (standard error $6.34) and for the larger set is $153 (standard error $6.87). The aggregate estimate reported at the outset—$17.2 billion—uses the WTP lower-bound estimate for the larger set of injuries ($153) multiplied by the number of households (112,647,215) represented by the sample.
...
by Richard C. Bishop, Kevin J. Boyle, Richard T. Carson, David Chapman, W. Michael Hanemann, Barbara Kanninen, Raymond J. Kopp, Jon A. Krosnick, John List, Norman Meade, Robert Paterson, Stanley Presser, V. Kerry Smith, Roger Tourangeau, Michael Welsh, Jeffrey M. Wooldridge, Matthew DeBell, Colleen Donovan, Matthew Konopka, Nora Scherer
Volume 356, Issue 6335;  21 Apr 2017; pages 253-254

Methane Rule: unnecessary costs?

From Environmental Economics http://www.env-econ.net - Time Haab and John Whitehead's "Cromulent Economics Blog" at http://www.env-econ.net/2017/05/methane-rule-unnecessary-costs.html:

Timothy Cama and Devin Henry via thehill.com:
Three Republicans joined Senate Democrats on Wednesday to reject an effort to overturn an Obama administration rule limiting methane emissions from oil and natural gas drilling.
Only 49 senators voted to move forward with debate on legislation to undo the Bureau of Land Management (BLM) rule, short of the 51 votes needed.  ...
The failure of the resolution is a loss for congressional Republicans, who had targeted the methane rule as one of the main Obama regulations they wanted to reverse. Opponents of the rule argue that it unnecessarily adds costs to oil and natural gas drilling on federal land. 
"Unnecessarily adds costs" suggests that the benefits are less than the costs, right? I hadn't been paying much attention to the methane rule ... so I wondered what the benefit-cost analysis concluded. I used ... Google and found all the anti-methane rule stuff. If you want to read one with the industry funded criticism..., go here: http://westernwire.net/social-cost-of-methane-garbage-in-garbage-out/. Here is an example: 
NERA Economic Consulting took a look at [social cost of methane] models to evaluate EPA’s methane rule. NERA corrected the flawed assumptions regarding the discount rate, radiative forcing rates, geographic inconsistencies in the analysis, and inappropriate extrapolations about future mitigation policy. ...
NERA's study can be found here [PDF]. [Don't try the link in the excerpt because it is broken.] NERA didn't really correct anything, because who says that NERA is correct? They're paid to say that they are correct, sure, but that payment sniffs of bias in their analysis.  The study was funded by the American Council for Capital Formation which has funding from Exxon and the Koch Brothers. Here is one thing that the ACCF says about the methane rule on their website right now:
The rule is expected to cost producers up to $297 million per year to comply, while BLM estimates it would reduce global greenhouse gas emissions by only 0.0092 percent.
Comparisons of benefits and costs are a red flag. For example, did you know that the benefits are $360 million per year and the costs are only 0.0018% of annual GDP? My bias radar is flashing (and why does this stuff play ... does it only play with already biased people? [note*]). 
Disgusted, I realized that Resources for the Future probably had an unbiased review of the government study. They did (The agency vs Industry: Who's got it right on methane?). Alan Krupnick:
Last week, the US Environmental Protection Agency (EPA) issued its proposed rules for reducing methane from new and modified oil and natural gas wells, processes, pipelines, and storage facilities. The agency’s goal is to cut emissions of methane, a greenhouse gas, from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. These rules, however, were attacked out of the gate by the American Petroleum Institute (API). The charges: they are duplicative of ongoing industry practices, costly, and unnecessary. ...
The top-level question that should be asked is whether these rules offer society greater benefits than costs. According to EPA’s regulatory impact assessment (RIA), net benefits are positive. Note that I restricted my purview to the New Source Performance Standard (NSPS) rules. The RIA counts the benefits of methane reduction from reducing greenhouse gas emissions (valued at around $45 per ton based on the potency of methane as a greenhouse gas relative to carbon dioxide (CO2, termed CO2e) and the administration’s social cost of carbon), subtracts out the engineering costs of the rules over an estimate of what the industry would otherwise be doing, and adds the value of any natural gas the industry would capture that would otherwise have leaked away. Overall and on a per ton basis, according to the RIA, the rules cost $40 per ton whereas the benefits are a bit higher, so net benefits are around $8 per ton of CO2 emissions. Excluded from the calculation are the reductions of emissions of volatile organic compounds, which could fairly be allocated some of the costs of the rule. These are also important because these reductions would help lower the costs of meeting ozone standards. Also not counted are ancillary benefits from reducing hazardous air pollutants. So, the rules benefit society.
*For example:
  1. The oil and gas industry doesn't like a regulation that adds costs
  2. Pays a consulting firm money to write a report criticizing a study that finds the benefits of the regulation exceed the costs
  3. The oil and gas industry makes big campaign contributions to politicians who waive the study around and try to get rid of the legislation
Yes, that's how it works. The wonder is why anyone pays attention to any such study? And I'm looking at you (with a stupid grin) Exxon and BP funded economists who critique the CVM and DCE

Environmental Economics http://www.env-econ.net - "The Cromulent Economics Blog"
Posted by John Whitehead on May 12, 2017