Tag Archives: greenhouse gases

Why the CPUC has it wrong on the PCIA

Nick Chaset is the CEO of East Bay Community Energy which is a community choice aggregator (CCA) that serves Alameda County. He also was Commission President Michael Picker’s chief advisor until last year when he left for EBCE. He explains in this article how two proposed decisions that the CPUC is considering are fundamentally wrong and will shift cost onto CCA customers. (I testified on behalf of CalCCA in this proceeding. I’ll have more on this before the Commission’s scheduled vote October 11.)

Figure 1 – CPUC’s Proposed Resource Adequacy Value vs. True Market Values

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Figure 2 – GHG Premium Value Missing from CPUC Proposed Decision

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Figure 3 – Falling Utility Rates as Customers Depart Filed in Their ERRA Rate Applications

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MIT tries to resurrect nuclear power

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I received a notice of a new MIT study entitled “The Future of Nuclear Energy in a Carbon-Constrained World” which looks at the technological, regulatory and economic changes required to make nuclear power viable again. A summary states

The findings are that new policy models and cost-cutting technologies would help nuclear play vital role in climate solutions. Progress in reducing carbon emissions requires a broad range of actions to effectively leverage nuclear energy.

However, nothing in the summary reveals the paradigm-shattering innovation that will be required to make nuclear power competitive with a diverse fleet of renewables plus storage that would achieve the same goals. The cost of a solar plant plus storage with today’s technology still costs less than a current technology nuclear plant. That alternative fleet would also provide better reliability by diversifying the generation sources through smaller plants and avoid any radiation contamination risk.

The nuclear industry must clearly demonstrate that it can get past the many hurdles that led to the recent cancellation of two projects in the southeast U.S. Reviving nuclear power will require more than fantasies about what might be.

Views on a sustainable Davis

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Two board member of the Valley Climate Action Center, Gerry Braun and Richard Bourne wrote two articles on making building energy use in Davis sustainable and resilient. VCAC board members, including myself, had input into these articles. They reflect a vision of getting to a zero-net carbon (ZNC) footprint while being economically viable. Both were published in the Davis Enterprise.

Paying off coal miners to improve the environment

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Finally, a real world example of how benefit-cost analysis should be used in practice. Alberta takes the revenues that represent a portion of the society wide benefits and distributes those to the losers from the policy change. Economists have almost always ignored the problem of how to compensate losers in changes in social policy, and of course those who keep losing increasingly oppose any more policies. Instead of dreaming up ways to invest carbon market revenues in whiz bang solutions, we first need to focus on who’s being left behind so they are not resentful, and become a key political impediment to doing the right thing.

Trivializing the risks of climate change

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I follow Matthew Kahn’s, USC economics chair, blog posts. He expresses a libertarian view. He also writes about climate adaptation. He makes an important point that civilization is not static and we will be able to adapt the human ecology to a range of climate change. But his latest post on how climate change might affect marathon performances raised an important issue for me.

Kahn fails to acknowledge that adaptation to small, incremental climate change is not the concern. It’s the large, catastrophic changes with unknown (and unknowable) probability–deep uncertainty–that is of concern–collapsing ice sheets or ecosystems. He is not addressing the problem of what happens if the climate passes a tipping point. These types of articles and blog posts produced by Kahn and his colleagues trivialize the real risks and consequences, as though we’re just trying to adapt to a change in the weather while ignoring the potential systemic changes.

Lomborg has it wrong about California’s cap and trade program. 

Bjorn Lomborg, a Danish political scientist who has pushed for focusing spending on other pressing world needs over reducing climate change risk, has criticized the extension of California’s cap and trade program in the LA Times. I found two serious flaws in Lomborg’s analysis that undermine his conclusions.

The study that Lomberg cites about the electricity market impacts has not been reproduced since such extensive “contract reshuffling” can’t occur in the Western Electricity Coordinating Council (WECC) region or in the CAISO market. That’s just a simplistic modeling exercise not tied to reality. The fact is that thousands of megawatts of coal plants are retiring across the WECC at least in part in response to the cap & trade and renewables portfolio standards (RPS) adopted by California.

And then Lomberg writes “A smarter approach to climate policy — and one befitting California’s role as one of the most innovative states in the country — would be to focus on making green energy cheaper. ” Has Lomberg noticed that new solar and wind installations are now cheaper than new fossil-fueled plants? Contracts are being signed for less than 5 cents per kilowatt-hour–PG&E’s average cost for existing generation is close to 9 cents.

It’s as though Lomberg hasn’t updated his understanding of the energy industry since 2009 when the Copenhagen climate accord was signed.

Analyses of California’s extended cap and trade program

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I believe that California’s passage of the extended cap and trade program was a generally good compromise. Most importantly, it decoupled the cap and trade market from separate legislation to regulate local emission impacts. As I wrote earlier, earlier proposals failed on this aspect.

Here’s the two best analyses I’ve seen so far, one legal and the other economic (by a former Michigan classmate), of the legislation.