How to Build Efficient Renewable Energy Systems Without Carbon Taxes


Building an Efficient Renewable Energy System Without Raising Taxes, Cap and Trade Schemes or Rate Hikes

An exchange between William Nordics and global warming skeptics such as Roger Cohen, former Exxon Director of Strategic Planning, leads to a quest for a different solution. The question we need to ask is – what could be done about the enormous financial and political power of the fossil fuel barons and the delaying tactics they use to protect trillions of dollars of future profit from their fossil fuel reserves?

Rob Bradley, CEO of Energy Research says the problem with the so-called “free energy” from sun and wind is that it is “diluted” in comparison to the massive concentration of energy from fossil fuels. Bradley is the author of seven books, including “Edison to Enron: Energy Markets and Political Strategies.”

Bradley points out that to turn wind and solar systems into a concentrated product (Energy) takes a lot of finance, steel and concrete.

If we also ask the question : is there a way to make a complete switch to an efficient renewable energy system, starting now, without mandating carbon taxes or cap and trade schemes, without jacking up utility rates, and by using market finance, rather than public finance?

Advanced Energy Performance Contracting (AEPC) combines the proven global methods of Energy Performance Contracting, where private capital finances energy improvements in exchange for a share of the energy savings, and a Competitively bid feed in tariff, as now being used in California’s Renewable Energy Auction Mechanism (RAM) program. The use of an efficiency power plant was developed by the Asian Development Bank in 2005 and first implemented in Jiangsu in China.

Advanced Energy Performance Contracting works by combining the savings stream from efficiency investment with the installation of renewable energy and energy storage resources in a package (of roughly 3 parts efficiency to one part renewables) where the high savings from efficiency allows the combination to be financed at market rates.

AEPC Optimizes Efficiency and Renewables

The aim of AEPC is more than just substituting renewables for fossil fuels, it optimizes a combination of efficiency and renewables to achieve, and far transcend, the International Energy Agency “BLUE Map scenario.” The BLUE Map scenario sets a goal of halving global energy-related CO2 emissions by 2050 (compared to 2005 levels) and sets out the least-cost pathway to achieve that goal through the deployment of existing low-carbon technologies.

Under AEPC, electric and gas utilities would periodically, every 3 to 12 months, issue RFPs for a combination of efficiency and renewables. The winning bidder would receive a contract for the installation of the bundle of efficiency and renewable measures that they could take to the bank. The measures would go into the utility rate base with income collected from rates, from kilowatt sales of renewable power, and megawatt sales of efficiency charged to energy users by rate class.

The AEPC model is not based on individual contracts with property owners that has characterized many utility efficiency programs. Rather, it more closely resembles the successful efforts of Efficiency Vermont that runs programs financed by a charge included in utility rates.

This enables both large scale and coordinated efforts. For example, MIT has developed technology that has taken thermal scans of all buildings in the City of Cambridge and transferred this data to three dimensional maps that can allow mass insulation and weatherization as appropriate. Under AEPC this can be combined with other efficiency measures such as heat pump installation and cogeneration, that takes advantage of second law of thermodynamics savings, and installation of roof top and back yard solar domestic hot water and photovoltaics and electric car charging stations that allow both charging and use of car batteries to supply power to grid in peak load times.

The goal of Advanced Energy Performance Contracting is to provide efficient renewable energy not simply for current uses but to expand renewable electricity energy use to replace fossil fuels for electric and hybrid vehicles, and for space heating and cooling through heat pumps.

Dr. Gregor Czisch designed and simulated a cost optimized 100% renewable energy system

The enormous increases available in cost-effective efficiency measures are well known, as are the enormous availability of renewable resources. Current average cost of electricity is $.105 per kilowatt. I can save a kilowatt at the average cost of under $.03 per kilowatt. What is less well known, is the ability of renewables on a continental scale to cost-effectively meet all our power needs on a yearly 8,760 hour basis. Dr. Gregor Czisch of Transnational Renewables Consulting, in his most detailed “Scenarios for a Future Electricity Supply” (English translation, 2011) has designed and simulated a cost optimized 100% renewable energy system for Europe and North Africa.

Czisch demonstrates, in great detail, how the intermittent problem of some renewables is overcome, through large enough geographic scale, when the winds are calm in the east, for example, they are blowing in the west. High voltage direct current (HVDC) power lines can move power efficiently from where generated to where needed, and available storage hydro can provide necessary balance. Czisch’s “Scenarios for a Future Electricity Supply” deserves attention on the highest level.

Advanced Energy Performance Contracting, as a competitively bid large scale process, will progressively help to drive down costs from both efficiency and renewables.

It is already much cheaper on average to invest in saving a kilowatt hour than to generate a kilowatt hour, even when fossil fuel power does not pay full cost for externalities, that is, for pollution it produces and its consequences. The cost of renewables is dropping rapidly. I am working on building solar farms. The installed cost per watt for PV just in the last year has dropped from $5.00 per watt to $3.50, and continues to plunge as every aspect of the systems, from cells, to panels, to mounts, to cabling, to junction boxes, to inverters, continues to improve.

No Act Of Congress Needed

We don’t need to wait for an act of congress, and we don’t need to go cap-in-hand to ask permission from Exon-Mobil. We can just ignore them if we want to lead an efficient renewable energy transformation. There are entities tht could lead the way, right now. There are Cooperative Utilities and Public Power Authorities that could lead the way, such as the Long Island Power Authority (LIPA), and progressive states such as California.

We just have to recognize that Advanced Energy Performance Contracting is a market-based way to use market-based finance, and that would start a comprehensive transformation to efficient renewable energy. It wouldn’t take long to see positive results.

The time to start is now.

Roy Morrison is Director of Office for Sustainability, Southern New Hampshire University. His latest book is /Sustainability and Liberation.

By Roy Morrison

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