Air pollution and health impacts of oil & gas production in the United States

Abstract

Oil and gas production is one of the largest emitters of methane, a potent greenhouse gas and a significant contributor of air pollution emissions. While research on methane emissions from oil and gas production has grown rapidly, there is comparatively limited information on the distribution of impacts of this sector on air quality and associated health impacts. Understanding the contribution of air quality and health impacts of oil and gas can be useful for designing mitigation strategies. Here we assess air quality and human health impacts associated with ozone, fine particulate matter, and nitrogen dioxide from the oil and gas sector in the US in 2016, and compare this impact with that of the associated methane emissions. We find that air pollution in 2016 from the oil and gas sector in the US resulted in 410 000 asthma exacerbations, 2200 new cases of childhood asthma and 7500 excess deaths, with $77 billion in total health impacts. NO2 was the highest contributor to health impacts (37%) followed by ozone (35%), and then PM2.5 (28%). When monetized, these air quality health impacts of oil and gas production exceeded estimated climate impact costs from methane leakage by a factor of 3. These impacts add to the total life cycle impacts of oil and gas, and represent potential additional health benefits of strategies that reduce consumption of oil and gas. Policies to reduce oil and gas production emissions will lead to additional and significant health benefits from co-pollutant reductions that are not currently quantified or monetized. 

https://iopscience.iop.org/article/10.1088/2752-5309/acc886

by Jonathan J Buonocore5,1, Srinivas Reka2, Dongmei Yang2, Charles Chang2, Ananya Roy3, Tammy Thompson3, David Lyon3, Renee McVay3, Drew Michanowicz4 and Saravanan Arunachalam2
1 Boston University School of Public Health, Boston, MA, United States of America jjbuono@bu.edu
2 Institute for the Environment, University of North Carolina, Chapel Hill, NC, United States of America
3 Environmental Defense Fund, Washington, DC, United States of America
4 Physicians, Scientists, and Engineers for Healthy Energy, Oakland, CA, United States of America
Environmental Research: Health https://iopscience.iop.org/journal/2752-5309 via IPO Science https://iopscience.iop.org/
Volume 1, Number 2; Published 8 May 2023 

Why did renewables become so cheap so fast? And what can we do to use this global opportunity for green growth?

Summary

...

Fossil fuels dominate the global power supply because until very recently electricity from fossil fuels was far cheaper than electricity from renewables. This has dramatically changed within the last decade. In most places in the world power from new renewables is now cheaper than power from new fossil fuels.

The fundamental driver of this change is that renewable energy technologies follow learning curves, which means that with each doubling of the cumulative installed capacity their price declines by the same fraction. The price of electricity from fossil fuel sources however does not follow learning curves so that we should expect that the price difference between expensive fossil fuels and cheap renewables will become even larger in the future.

This is an argument for large investments into scaling up renewable technologies now. Increasing installed capacity has the extremely important positive consequence that it drives down the price and thereby makes renewable energy sources more attractive, earlier.... Falling energy prices also mean that the real income of people rises. Investments to scale up energy production with cheap electric power from renewable sources are therefore not only an opportunity to reduce emissions, but also to achieve more economic growth – particularly for the poorest places in the world.

...

Today fossil fuels – coal, oil, and gas – account for 79% of the world’s energy production and as the chart below shows they have very large negative side effects. The bars to the left show the number of deaths and the bars on the right compare the greenhouse gas emissions. My colleague Hannah Ritchie explains the data in this chart in detail in her post ‘What are the safest sources of energy?’.

This makes two things very clear. As the burning of fossil fuels accounts for 87% of the world’s CO2 emissions, a world run on fossil fuels is not sustainable, they endanger the lives and livelihoods of future generations and the biosphere around us. And the very same energy sources lead to the deaths of many people right now – the air pollution from burning fossil fuels kills 3.6 million people in countries around the world every year; this is 6-times the annual death toll of all murders, war deaths, and terrorist attacks combined.1

It is important to keep in mind that electric energy is only one of several forms of energy that humanity relies on....2

What the chart makes clear is that the alternatives to fossil fuels – renewable energy sources and nuclear power – are orders of magnitude safer and cleaner than fossil fuels.

...

Fossil fuels dominate the world’s energy supply because in the past they were cheaper than all other sources of energy. If we want the world to be powered by safer and cleaner alternatives, we have to make sure that those alternatives are cheaper than fossil fuels.

The price of electricity from the long-standing sources: fossil fuels and nuclear power

The world’s electricity supply is dominated by fossil fuels. Coal is by far the biggest source, supplying 37% of electricity; gas is second and supplies 24%. Burning these fossil fuels for electricity and heat is the largest single source of global greenhouse gases, causing 30% of global emissions.3

The chart here shows how the electricity prices from the long-standing sources of power – fossil fuels and nuclear – have changed over the last decade.

To make comparisons on a consistent basis, energy prices are expressed in ‘levelized costs of energy’ (LCOE). You can think of LCOE from the perspective of someone who is considering building a power plant. If you are in that situation then the LCOE is the answer to the following question: What would be the minimum price that my customers would need to pay so that the power plant would break even over its lifetime?

How Large Are Global Fossil Fuel Subsidies? - ScienceDirect

Highlights

• Fossil fuel subsidies are large, amounting to 6.5% of global GDP in 2015.

• Mispricing from a domestic perspective accounts for the bulk of the subsidy.

• Coal subsidies account for the largest part (about half) of global subsidies.

• In absolute terms, subsidies are highly concentrated in a few large countries.

• The environmental, fiscal, and welfare gains from subsidy reform are substantial.

Summary

This paper estimates fossil fuel subsidies and the economic and environmental benefits from reforming them, focusing mostly on a broad notion of subsidies arising when consumer prices are below supply costs plus environmental costs and general consumption taxes.  Estimated subsidies are $4.9 trillion worldwide in 2013 and $5.3 trillion in 2015 (6.5% of global GDP in both years). Undercharging for global warming accounts for 22% of the subsidy in 2013, air pollution 46%, broader vehicle externalities 13%, supply costs 11%, and general consumer taxes 8%. China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion). Eliminating subsidies would have reduced global carbon emissions in 2013 by 21% and fossil fuel air pollution deaths 55%, while raising revenue of 4%, and social welfare by 2.2%, of global GDP. 

A version of this paper is available free of charge at https://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf

http://www.sciencedirect.com/science/article/pii/S0305750X16304867

World Development http://www.sciencedirect.com/science/journal/0305750X via Science Direct www.ScienceDirect.com

Volume 91, March 2017, Pages 11-27

David Coady 1, Ian Parry, LouisSears 2 and BaopingShang 1

1. International Monetary Fund, Washington, DC, USA

2. University of California, Davis, USA

Keywords: energy subsidies global warming air pollution efficient taxation deadweight loss revenue

ScienceDirect

Global wind and solar costs to fall even faster, while coal fades even in China and India | Bloomberg New Energy Finance

This year’s forecast from BNEF sees solar energy costs dropping a further 66% by 2040, and onshore wind by 47%, with renewables undercutting the majority of existing fossil power stations by 2030.

Renewable energy sources such as solar and wind are set to take almost three quarters of the $10.2 trillion the world will invest in new power generating technology over the years to 2040, according to a major independent forecast published today.

New Energy Outlook 2017, the latest long-term forecast from Bloomberg New Energy Finance, shows earlier progress than its equivalent a year ago towards decarbonization of the world’s power system – with global emissions projected to peak in 2026 and to be 4% lower in 2040 than they were in 2016.

“This year’s report suggests that the greening of the world’s electricity system is unstoppable, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including those in electric vehicles, in balancing supply and demand,” said Seb Henbest, lead author of NEO 2017 at BNEF.

NEO 2017 is the result of eight months of analysis and modelling by a 65-strong team at Bloomberg New Energy Finance. It is based purely on the announced project pipelines in each country, plus forecast economics of electricity generation and power system dynamics. It assumes that current subsidies expire and that energy policies around the world remain on their current bearing.

Here are some key findings from this year’s forecast:

• Solar and wind dominate the future of electricity. We expect $7.4 trillion to be invested in new renewable energy plants by 2040 – which is 72% of the $10.2 trillion that is projected to be spent on new power generation worldwide. Solar takes $2.8 trillion and sees a 14-fold jump in capacity. Wind draws $3.3 trillion and sees a fourfold increase in capacity. As a result, wind and solar will make up 48% of the world’s installed capacity and 34% of electricity generation by 2040, compared with just 12% and 5% now.

• Solar energy’s challenge to coal gets broader. The levelized cost of electricity from solar PV, which is now almost a quarter of what it was just in 2009, is set to drop another 66% by 2040. By then a dollar will buy 2.3 times as much solar energy than it does today. Solar is already at least as cheap as coal in Germany, Australia, the U.S., Spain and Italy. By 2021, it will be cheaper than coal in China, India, Mexico, the U.K. and Brazil as well. (For definition of levelized costs, see note below.)

• Onshore wind costs fall fast, and offshore falls faster. Offshore wind levelized costs will slide a whopping 71% by 2040, helped by development experience, competition and reduced risk, and economies of scale resulting from larger projects and bigger turbines. The cost of onshore wind will fall 47% in the same period, on top of the 30% drop of the past eight years, thanks to cheaper, more efficient turbines and streamlined operating and maintenance procedures.

Figure 1: Global electricity generation mix to 2040

• China and India are a $4 trillion opportunity for the energy sector. China and India account for 28% and 11% of all investment in power generation by 2040. Asia Pacific sees almost as much investment in generation as the rest of the world combined. Of this, just under a third goes to wind and solar each, 18% to nuclear and 10% to coal and gas.

• Batteries and new sources of flexibility bolster reach of renewables. We expect the lithium-ion battery market for energy storage to be worth at least $239 billion between now and 2040. Utility-scale batteries increasingly compete with natural gas to provide system flexibility at times of peak demand. Small-scale batteries installed by households and businesses alongside PV systems will account for 57% of storage worldwide by 2040. We anticipate renewable energy reaching 74% penetration in Germany by 2040, 38% in the U.S., 55% in China and 49% in India.

• Electric vehicles bolster electricity use and help balance the grid. In Europe and the U.S., EVs account for 13% and 12% respectively of electricity generation by 2040. Charging EVs flexibly, when renewables are generating and wholesale prices are low, will help the system adapt to intermittent solar and wind. The growth of EVs pushes the cost of lithium-ion batteries down 73% by 2030.

• Homeowners’ love of solar grows. By 2040, rooftop PV will account for as much as 24% of electricity in Australia, 20% in Brazil, 15% in Germany, 12% in Japan, and 5% in the U.S. and India. This, combined with the growth of utility-scale renewables, reduces the need for existing large-scale coal and gas plants, the owners of which will face continued pressure on revenue despite some demand growth from EVs.

• Coal-fired power collapses in Europe and the U.S., continues to grow in China, but peaks globally by 2026. Sluggish demand, cheap renewables and coal-to-gas fuel switching will slash coal use by 87% in Europe by 2040. In the U.S., coal use in power drops 45% as old plants are not replaced and others start burning cheaper gas. Coal generation in China grows by a fifth over the next decade but reaches a peak in 2026. Globally, we expect 369GW of planned new coal plants to be cancelled, a third of which are in India, and for global demand for thermal coal in power to decline by 15% over 2016-40.

• Gas is a transition fuel, but not in the way most people think. Gas-fired power sees $804 billion in new investment and 16% more capacity by 2040. Gas plants will increasingly act as one of the flexible technologies needed to help meet peaks and provide system stability in an age of rising renewable generation, rather than as a replacement for ‘baseload’ coal. In the Americas, however, where gas is plentiful and cheap, it plays a more central role, especially in the near term.

• Global power sector emissions peak in just over ten years, then decline. CO2 emissions from power generation increase by a tenth before peaking in hit a high in 2026. Emissions then fall faster than we previously estimated, lining-up with China’s peak coal generation. We expect India’s emissions will be 44% lower than in our NEO 2016 analysis as it embraces solar and invests $405 billion to construct 660GW of new PV. Globally, emissions will have dropped to 4% below 2016 levels by 2040, not nearly enough to keep the global average temperature from rising more than 2 degrees Celsius. A further $5.3 trillion investment in 3.9TW of zero-carbon capacity would be consistent with keeping the planet on a 2-degrees-C trajectory.

In the U.S., the Trump administration has voiced support for the coal sector. However, NEO 2017 indicates that the economic realities over the next two decades will not favor U.S. coal-fired power, which is forecast to see a 51% reduction in generation by 2040. In its place, gas-fired electricity will rise 22%, and renewables 169%.

One of the big questions for the future of electricity systems is how large amounts of variable wind and solar generation can be accommodated, and yet keep the lights on at all times. Skeptics worry about ultra-cheap renewables depressing power prices and squeezing out base-load coal, gas and nuclear plants.

Elena Giannakopoulou, lead analyst on the NEO 2017 project, said: “This year’s forecast shows EV smart charging, small-scale battery systems in business and households, plus utility-scale storage on the grid, playing a big part in smoothing out the peaks and troughs in supply caused by variable wind and solar generation.”

Jon Moore, chief executive of BNEF, said: “NEO reflects the understanding our team has built up over more than a decade of how technology costs and system dynamics have evolved, and are evolving. This year’s NEO shows an even more dramatic low-carbon transition than we have projected in previous years, with steeper drops in wind and solar costs and faster growth for storage.”

Note: Levelized cost of electricity covers all lifetime expenses of generation from a new plant. These costs include site development, permitting, equipment and civil works, finance, operations and maintenance and feedstock (if any).

An executive summary of NEO 2017 and related materials can be downloaded from the micro-site on this link.

Source: Bloomberg New Energy Finance, New Energy Outlook 2017

Bloomberg New Energy Finance (BNEF) www.BNEF.com

Press Release dated June 15, 2017

Economic and Social Impact Assessment of China's Multi-Crystalline Silicon Photovoltaic Modules Production

It is well known that solar photovoltaic technologies provide significant environmental, economic, and social benefits over conventional energy sources. One study in the Journal of Industrial Ecology investigates the economic and social impacts of China's multi-crystalline silicon photovoltaic modules production stages. The main cost of these modules lies in raw materials and productions, with the greatest cost being the production of the multi silicon photovoltaic cells. Social impact analysis in the report shows that the employment contribution index is 0.72 - this is to say that module production in China greatly contributes to employment. However, the labor civilization degree and labor income contribution indexes are both at around 0.6, meaning that multi silicon PV production has a relatively small labor level and income contribution. Further, the modules contribute very little to GDP, as the report concludes that the production capacity contribution index is 0.183. With this, there is new support for research on more efficient ways to produce the raw materials, as well as support for the upgrading of manufacturing facilities in order to improve the labor civilization degree. 

http://www.mkc.com.eg/images/photovoltaic_plant.jpeg

Report by Beijia Huang, Juan Zhao, Jingyang Chai, Feng Zhao, and Xiangyu Wang
5/4/2017

For full report, see   http://onlinelibrary.wiley.com/wol1/doi/10.1111/jiec.12576/abstract

The Cost of Wind Energy: The Impact of Dropping Prices

As the race for clean energy becomes increasingly competitive, the cost of wind energy across the United States continues to fall. Massive investments into clean energy technology have allowed for an increase in the amount of energy harvested from wind. Average hourly clearing prices in several regions are under $30 per megawatt-hour (MWh) due to low marginal generating cost of wind energy. Falling prices combined with the intermittent nature of wind pose a real challenge for grid operators. Because of the intermittent nature of wind, conventional resources, namely fossil fuels, must be ready to back up wind power, and low wind energy prices means that gas companies must lower their prices in order to stay competitive. Because of this, the role of fossil fuels within the energy market is fundamentally shifting; fleet operators must change the way that they manage fossil fuels in order to adapt to the market.

https://upload.wikimedia.org/wikipedia/commons/thumb/b/ba/Windmills_D1-D4_%28Thornton_Bank%29.jpg/220px-Windmills_D1-D4_%28Thornton_Bank%29.jpg

For full story, see the following story 

by Peter Kelly-Detwiler

May 25, 2017

Report on Global Energy by 2040

According to a report by Bloomberg News Energy Finance, of the $10.2 trillion that is expected to be invested in new power by 2040, 72%, or $7.2 trillion, is expected to go to renewables. Renewable energy investment is expected to increase by 2-3% annually. The cost of new electricity from solar PV will drop by 66% by 2040, meaning that a dollar would be able to buy 2.3 times as much solar energy than it does today. Onshore wind will fall 47%, but offshore wind will decline by 71% because of competition, reduced risk, and larger projects and turbines. China and India are reported to lead energy investments, with each country taking up 28% and 11% of global energy investments by 2040. Wind and solar energy are estimated to take up a third of these of investments. The report says that European investment in renewables will increase by 2.6% annually until 2040, which means that total investments in renewables across Europe will reach almost 1$ trillion over the 2017-2040 period. In the Americas, it is estimated that there will be a $1.5 trillion investment in renewable energy by 2040, and in the US specifically, coal consumption is expected to drop by 45%. In Mexico, renewables are expected to make up 80% of total electricity by 2040, which is four times what it is today. The nation will become 29% more efficient in its electricity consumption by that time. The report predicts that global power sector emissions will peak by 2026 and decline by 1% annually until 2040. 

http://www.electricalindia.in/uploads/2253/ancillary-services-large.jpg

Bloomberg News Energy Finance 

June 15, 2017

For the full story, click here

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. 

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

https://thinkprogress.org/budget-fossil-fuel-taxpayers-interior-164d4e7d9ed7

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

June 25, 2017

Fossil fuel subsidies undermine carbon pricing in Canada, new study shows

On November 14, 2019, four prominent Canadian environmental groups released a study that shows how billions of taxpayer dollars in federal and provincial subsidies for oil and gas companies greatly undermine climate action in Canada.

Fossil fuel subsidies to oil and gas producers in Canada total $3.3 billion annually. This amounts to paying polluters $19/tonne CO2 to pollute. These subsidies drastically undercut the goal of the pan-Canadian carbon price that Prime Minister Justin Trudeau will introduce in 2018. Unless these subsidies are eliminated, more money will flow annually from government to oil and gas companies in Canada than the money collected through carbon pricing between now and 2020.

“This system is like taxing consumers when they buy cigarettes while giving massive tax breaks to tobacco companies that encourage them to produce more cigarettes. It doesn’t make sense,” said Alex Doukas of Oil Change International.

“Unless Canada phases out massive subsidies to oil and gas companies, Trudeau’s carbon price will do little to encourage polluters to cut carbon emissions,” said Dale Marshall of Environmental Defence. “The three billion dollars in annual subsidies could be put to much better use by investing in climate action, healthcare, or other initiatives.”

Canada and other G20 countries committed to phasing out fossil fuel subsidies back in 2009. This commitment was reiterated by Prime Minister Trudeau at the G7 meeting last March and through a commitment in Finance Minister Bill Morneau’s mandate letter.

http://wikimapia.org/4281769/U1-U2-Oil-Sands-Plant-Suncor

“In light of Minister McKenna’s participation in the Carbon Pricing Leadership Coalition at the COP22 meeting in Marrakech, we take the opportunity to remind Canada that leadership requires coherent fiscal policies” stated Annie Bérubé, Director of Government Relations at Équiterre. “Finance Minister Bill Morneau must announce a predictable phase-out of all remaining preferential tax treatment to the oil and gas sector starting in Budget 2017.”

Environmental Defence, Oil Change International, Équiterre, and Climate Action Network Canada, who released today’s study, urge the Canadian government to finally complete the phase-out of all federal subsidies to oil and gas producers by 2020, not 2025 as currently planned.

Download the study in English here and in French here.

Rapid, affordable energy transformation possible - NOAA, CIRES study: Wind, sun could eclipse fossil fuels for electric power by 2030

The United States could slash greenhouse gas emissions from power production by up to 78 percent below 1990 levels within 15 years while meeting increased demand, according to a new study by NOAA and University of Colorado Boulder researchers.

The study used a sophisticated mathematical model to evaluate future cost, demand, generation and transmission scenarios. It found that with improvements in transmission infrastructure, weather-driven renewable resources could supply most of the nation’s electricity at costs similar to today’s.  “Our research shows a transition to a reliable, low-carbon, electrical generation and transmission system can be accomplished with commercially available technology and within 15 years,” said Alexander MacDonald, co-lead author and recently retired director of NOAA’s Earth System Research Laboratory (ESRL) in Boulder.

A high-resolution map based on NOAA solar irradiance data shows a snapshot of solar energy potential across the United States.

(Credit: Image by Chris Clack/CIRES)

The paper was published online in the journal Nature Climate Change.

Although improvements in wind and solar generation have continued to ratchet down the cost of producing renewable energy, these energy resources are inherently intermittent. As a result, utilities have invested in surplus generation capacity to back up renewable energy generation with natural gas-fired generators and other reserves.  “In the future, they may not need to,” said co-lead author Christopher Clack, a physicist and mathematician with the Cooperative Institute for Research in Environmental Sciences at the University of Colorado Boulder.

Since the sun is shining or winds are blowing somewhere across the United States all of the time, MacDonald theorized that the key to resolving the dilemma of intermittent renewable generation might be to scale up the renewable energy generation system to match the scale of weather systems.

So MacDonald, who has studied weather and worked to improve forecasts for more than 40 years, assembled a team of four other NOAA scientists to explore the idea. Using NOAA’s high-resolution meteorological data, they built a model to evaluate the cost of integrating different sources of electricity into a national energy system. The model estimates renewable resource potential, energy demand, emissions of carbon dioxide (CO₂) and the costs of expanding and operating electricity generation and transmission systems to meet future needs.

(Credit: Flickr Commons)

The model allowed researchers to evaluate the affordability, reliability, and greenhouse gas emissions of various energy mixes, including coal. It showed that low-cost and low-emissions are not mutually exclusive.  “The model relentlessly seeks the lowest-cost energy, whatever constraints are applied,” Clack said. “And it always installs more renewable energy on the grid than exists today.” 

Even in a scenario where renewable energy costs more than experts predict, the model produced a system that cuts CO₂ emissions 33 percent below 1990 levels by 2030, and delivered electricity at about 8.6 cents per kilowatt hour. By comparison, electricity cost 9.4 cents per kWh in 2012.  If renewable energy costs were lower and natural gas costs higher, as is expected in the future, the modeled system sliced CO₂ emissions by 78 percent from 1990 levels and delivered electricity at 10 cents per kWh. The year 1990 is a standard scientific benchmark for greenhouse gas analysis. A scenario that included coal yielded lower cost (8.5 cents per kWh), but the highest emissions.

At the recent Paris climate summit, the United States pledged to cut greenhouse emissions from all sectors up to 28 percent below 2005 levels by 2025. The new paper suggests the United States could cut total CO₂ emissions 31 percent below 2005 levels by 2030 by making changes only within the electric sector, even though the electrical sector represents just 38 percent of the national CO₂ budget. These changes would include rapidly expanding renewable energy generation and improving transmission infrastructure.

In identifying low-cost solutions, researchers enabled the model to build and pay for transmission infrastructure improvements — specifically a new, high-voltage direct-current transmission grid (HVDC) to supplement the current electrical grid. HVDC lines, which are in use around the world, reduce energy losses during long-distance transmission. The model did choose to use those lines extensively, and the study found that investing in efficient, long-distance transmission was key to keeping costs low.

MacDonald compared the idea of a HVDC grid with the interstate highway system which transformed the U.S. economy in the 1950s. “With an ‘interstate for electrons’, renewable energy could be delivered anywhere in the country while emissions plummet,” he said. “An HVDC grid would create a national electricity market in which all types of generation, including low-carbon sources, compete on a cost basis. The surprise was how dominant wind and solar could be.”

The new model is drawing interest from other experts in the field. 

"This study pushes the envelope,” said Stanford University’s Mark Jacobson, who commented on the findings in an editorial he wrote for  the journal Nature Climate Change. “It shows that intermittent renewables plus transmission can eliminate most fossil-fuel electricity while matching power demand at lower cost than a fossil fuel-based grid - even before storage is considered." 

U.S. National Oceanic and Atmospheric Administration (NOAA) www.NOAA.gov

Press Release dated January 25, 2016

http://www.noaanews.noaa.gov/stories2016/012516-rapid-affordable-energy-transformation-possible.html

Science and the stock market: Investors' recognition of unburnable carbon

Abstract
This paper documents the stock market's reaction to a 2009 paper in the Nature journal of science, which concluded that only a fraction of the world's existing oil, gas, and coal reserves could be emitted if global warming by 2050 were not to exceed 2 °C above pre-industrial levels. This Nature article is now one of the most cited environmental science studies in recent years. Our analysis indicates that this publication prompted an average stock price drop of 1.5% to 2% for our sample of the 63 largest U.S. oil and gas firms. Later, in 2012–2013, the press “discovered” this article, writing hundreds of stories on the grim consequences of unburnable carbon for fossil fuel companies. We show only a small negative reaction to these later stories, mostly in the two weeks following their publication. This limited market response contrasts with the predictions of some analysts and commentators of a substantial decline in the shareholder value of fossil fuel companies from a carbon bubble. Our paper discusses possible reasons for this discrepancy.

https://www.ucc.ie/en/eri/news/fullstory-543289-en.html

http://www.sciencedirect.com/science/article/pii/S0140988315002546
by Paul A. Griffin 1, Amy Myers Jaffe 2, David H. Lont 3 and Rosa Dominguez-Faus 2
1. Graduate School of Management, University of California, Davis, USA; Tel.: + 64 3 479 8119.
2. Graduate School of Management and Institute of Transportation Studies, University of California, Davis, USA
3. Department of Accountancy & Finance, University of Otago, Dunedin, New Zealand
Energy Economics via Elsevier Science Direct www.ScienceDirect.com
Volume 52, Part A; December, 2015; Pages 1–12; Available online 25 September 2015
Keywords: U.S. energy companies; Unburnable carbon; Stranded assets; Nature journal; Media attention; Event studyby Paul A. Griffin 1, , Amy Myers Jaffe 2, , David H. Lont 3 and Rosa Dominguez-Faus 2,
1. Graduate School of Management, University of California, Davis, USA
2. Graduate School of Management and Institute of Transportation Studies, University of California, Davis, USA
3. Department of Accountancy & Finance, University of Otago, Dunedin, New Zealand
Energy Economics via Elsevier Science Direct www.ScienceDirect.com
Volume 52, Part A; December, 2015; Pages 1–12; Available online 25 September 2015

http://priceofoil.org/2013/01/29/bankers-warn-oil-is-unburnable-carbon/

Wind and solar boost cost-competitiveness versus fossil fuels

This year has brought a significant shift in the generating cost comparison between renewable energy and fossil fuels, according to detailed analysis by technology and region, published this week by Bloomberg New Energy Finance.

The research company’s Levelised Cost of Electricity Update for the second half of 2015, based on thousands of data points related to individual deals and projects around the world, shows that onshore wind and crystalline silicon photovoltaics – the two most widespread renewable technologies – have both reduced costs this year, while costs have gone up for gas-fired and coal-fired generation.

The BNEF study shows that the global average levelised cost of electricity, or LCOE, for onshore wind nudged downwards from $85 per megawatt-hour in the first half of the year, to $83 in H2, while that for crystalline silicon PV solar fell from $129 to $122.

In the same period, the LCOE for coal-fired generation increased from $66 per MWh to $75 in the Americas, from $68 to $73 in Asia-Pacific, and from $82 to $105 in Europe. The LCOE for combined-cycle gas turbine generation rose from $76 to $82 in the Americas, from $85 to $93 in Asia-Pacific and from $103 to $118 in EMEA.

















Seb Henbest, head of Europe, Middle East and Africa at Bloomberg New Energy Finance, commented: “Our report shows wind and solar power continuing to get cheaper in 2015, helped by cheaper technology but also by lower finance costs. Meanwhile, coal and gas have got more expensive on the back of lower utilisation rates, and in Europe, higher carbon price assumptions following passage of the Market Stability Reserve reform.”

Levelised costs take into account not just the cost of generating a marginal MWh of electricity, but also the upfront capital and development expense, the cost of equity and debt finance, and operating and maintenance fees.

Among other low-carbon energy technologies, offshore wind reduced its global average LCOE from $176 per MWh, to $174, but still remains significantly more expensive than wind, solar PV, coal or gas, while biomass incineration saw its levelised cost stay steady at $134 per MWh. Nuclear, like coal and gas, has very different LCOE levels from one region of the world to another, but both the Americas and the Europe, Middle East and Africa region saw increases in levelised costs, to $261 and $158 per MWh respectively.

Among the country-level findings of the BNEF study are that onshore wind is now fully cost-competitive with both gas-fired and coal-fired generation, once carbon costs are taken into account, in the UK and Germany. In the UK, onshore wind comes in on average at $85 per MWh in the second half of 2015, compared to $115 for combined-cycle gas and $115 for coal-fired power; in Germany, onshore wind is at $80, compared to $118 for gas and $106 for coal. 

In China, onshore wind is cheaper than gas-fired power, at $77 per MWh versus $113, but it is much more expensive still than coal-generated electricity, at $44, while solar PV power is at $109. In the US, coal and gas are still cheaper, at $65 per MWh, against onshore wind at $80 and PV at $107.

Luke Mills, analyst, energy economics at Bloomberg New Energy Finance, said: “Generating costs continue to vary greatly from region to region, reflecting influences such as the shale gas boom in the US, changing utilisation rates in areas of high renewables penetration, the shortage of local gas production in East Asia, carbon prices in Europe, differing regulations on nuclear power across the world, and contrasting resources for solar generation.

“But onshore wind and solar PV are both now much more competitive against the established generation technologies than would have seemed possible only five or 10 years ago.”

Bloomberg New Energy Finance www.bnef.com

Press Release dated October 6, 2016

How Large Are Global Energy Subsidies?

http://www.imf.org/external/pubs/cat/longres.aspx?sk=42940.0

Summary: 

This paper provides a comprehensive, updated picture of energy subsidies at the global and regional levels. It focuses on the broad notion of post-tax energy subsidies, which arise when consumer prices are below supply costs plus a tax to reflect environmental damage and an additional tax applied to all consumption goods to raise government revenues. Post-tax energy subsidies are dramatically higher than previously estimated, and are projected to remain high. These subsidies primarily reflect under-pricing from a domestic (rather than global) perspective, so even unilateral price reform is in countries’ own interests. The potential fiscal, environmental and welfare impacts of energy subsidy reform are substantial.

...

The key findings of the study are the following:

• Post-tax energy subsidies are dramatically higher than previously estimated—$4.9 trillion (6.5 percent of global GDP) in 2013, and projected to reach $5.3 trillion (6.5 percent of global GDP) in 2015.
• Post-tax subsidies are large and pervasive in both advanced and developing economies and among oil-producing and non-oil-producing countries alike. But these subsidies are especially large (about 13–18 percent) relative to GDP in Emerging and Developing Asia, the Middle East, North Africa, and Pakistan (MENAP), and the Commonwealth of Independent States (CIS).
• Among different energy products, coal accounts for the biggest subsidies, given its high environmental damage and because (unlike for road fuels) no country imposes meaningful excises on its consumption.
• Most energy subsidies arise from the failure to adequately charge for the cost of domestic environmental damage—only about one-quarter of the total is from climate change—so unilateral reform of energy subsidies is mostly in countries’ own interests, although global coordination could strengthen such efforts.
• The fiscal, environmental, and welfare impacts of energy subsidy reform are potentially enormous. Eliminating post-tax subsidies in 2015 could raise government revenue by $2.9 trillion (3.6 percent of global GDP), cut global CO2 emissions by more than 20 percent, and cut pre-mature air pollution deaths by more than half. After allowing for the higher energy costs faced by consumers, this action would raise global economic welfare by $1.8 trillion (2.2 percent of global GDP).

 

http://tinyurl.com/krgtkug