Category Archives: Energy

Morgan Stanley settles charges of price-fixing in NYC area electricity maret

In a settlement which doesn’t seem to have been much noticed by major media outlets, Morgan Stanley has agreed to pay $4.8 million to settle charges of acting, in concert with energy company Keyspan, in anticompetitive behavior affecting the NYC electricity market. Here’s the Department of Justice press release of September 30, 2011, with the caption Morgan Stanley Rigs NYC Electricity Bids Here’s an excerpt.

The Department of Justice today announced a settlement with Morgan Stanley that requires Morgan to pay $4.8 million for violating the antitrust laws by entering into an agreement with KeySpan Corporation that restrained competition in the New York City electricity capacity market. The department said the agreement likely resulted in a price increase for electricity retailers, which, in turn, led to increased electricity prices for consumers. The department’s Antitrust Division today filed a civil antitrust complaint in U.S. District Court for the Southern District of New York and submitted a proposed settlement that, if approved by the court, would resolve the lawsuit. The settlement provides for disgorgement of profits for a violation of the antitrust laws and requires Morgan to pay $4.8 million to the United States. The department previously entered into a settlement with KeySpan that required the company to disgorge $12 million in profits for its role in the agreement, which was approved by the court in February 2011. “This settlement with a major financial institution will signal to the financial services community that use of derivatives for anticompetitive ends will not be tolerated,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Disgorgement of ill-gotten gains, as was paid here, is an effective Antitrust Division tool to remedy harm to competition.” According to the complaint, in January 2006, KeySpan and Morgan executed a financial derivative for New York City capacity while Morgan simultaneously entered into an off-setting derivative with Astoria Generating Company, KeySpan’s largest competitor in the capacity market. The agreements effectively transferred to KeySpan a financial interest in Astoria’s capacity, thereby ensuring that KeySpan would withhold substantial output from the capacity market and increase prices. For its part, Morgan earned revenues by retaining the spread between the fixed prices of the two derivative agreements. The anticompetitive effects of the Morgan/KeySpan agreement lasted until March 2008, when regulatory conditions eliminated KeySpan’s ability to affect the market price of electricity capacity.

While we’re happy that the excellent attorneys in DOJ’s Antitrust Division brought this case, the press release leaves seval questions neither asked nor answered:

How much did Morgan Stanley and Keyspan make? Without knowing that, it’s impossible to determine whether the settlement is sufficient.
Did anyone at Morgan Stanley or Keyspan lose their job, receive a demotion, or lose a bonus?
Did the settlement negotiations include an agreement to issue a press release on a Friday, lessening the likelihood that major news organizations would see the release before it went stale?

Decison on Keystone XL Pipeline Delayed Until After Presidential Election

Tweet Via NPR‘s All Things Considered, from correspondent Richard Harris, Feds Delay Decision On Pipeline Project

The State Department is delaying a decision for at least a year on whether to approve the Keystone pipeline. The $7 billion pipeline would carry oil from the tar sands of Alberta, Canada, through the U.S. to Gulf of Mexico refineries. Nebraska’s state government and environmental groups have put intense pressure on the State Department and White House to reject the pipeline’s proposed route. NPR’s Richard Harris talks with Robert Siegel about the project.

Audio here (available after 1900 hours Eastern time, 10 November 2011).

Wikipedia’s entry Keystone XL Pipeline has a detailed – and, in our view, fair – account of the controversy. While on balance we do not support the Keystone pipeline, a very well-reasoned argument in favor of the pipeline can be foundon the blog of JEH Land Clearing, from which we’ve taken the following map of the proposed pipeline (route in red; other pipelines indicated are already in existence/operation).

The Texas economy will benefit from the increase in production. The area east of I-35 is consistently in economic hardship (Port Arthur’s unemployment rate is hovering around 15%), and the construction, land clearing, surveying and refinery jobs will help lower the staggering unemployment rate. It is estimated that the Keystone Pipeline will help create over 20,000 jobs. Texas alone will see over $2.3B in new spending and the US will see about $20B in new spending. The increase of personal income in the state will be about $1.6B and the US will see an increase of $6.5BB. Profits will be re-invested in the local economy improving the quality of life and increasing the number of business in the area. Regardless of where you stand on this issue, one fact remains; the only one way to get heavy crude from Canada to the Texas gulf coast is a pipeline.

Excerpted from Oil Pipeline Invigorates Texas Economy

We support public works projects as economic stimulus, particularly those which come with improvements to energy and other infrastructure; in our view a massive wind/solar public works project in Texas might have the same effective economic stimulus with a better energy outcome, with a significantly lower environmental impact

What JEH doesn’t mention are the costs in terms of environmental damage, water, and health effects. These are long term costs, which are, in the parlance of neoclassical economics, “externalized,”or pushed into the future, and pushed off the balance sheets, kind of like CDO’s, or Collatoralized Debt Obligations, made famous by the financial crisis. Ecological economics recognizes that these costs must be considered, just as recent economic history forces us to recognize the real value of mortgages and mortgage backed securities. As we are learning, ignoring risk is unwise. Put bluntly, the Keystone XL pipeline is kind of like a $1.0 Million “McMansion” sold for $25,000 down, with a $1.0 Million mortgage which is, of course, a negatively amortized interest-only note for the first 5 years – at which time the borrowers will have to pay $1.1 Million, plus interest. But in reality, the $5 billion pipeline is like an aggregated set of five thousand negatively amortizing $1.0 Million toxic McMortgages on McMansions built of radioactive materials on toxic waste sites below sea level.

We intend to elaborate on the costs, risks, and benefits of pipelines in future posts; as well as a series on the Bonneville Power Administration, which has been supplying electricity in the Northwest for almost 75 years, and which we think is a model for energy-related public works projects.

Matt Wald on Renewable Energy Surpluses

Tweet To paraphrase Bob Dylan,”The answer my friend, is storage of the wind.”

We have long been saying that the question is not:

“Can clean, renewable and sustainable energy power the grid?”

It is:

“How can we harness clean, renewable and sustainable energy systems to power the grid?”

As Matt Wald observed in Taming Unruly Wind Power, shattering the conventional wisdom, the critique of renewable-resource energy is that it’s “not enough;” turns out to be wrong. In some places on some days, it’s not only enough, it more than we need. When the winds blow and the rains fall, a power grid built on wind and big hydro turbines, i.e. the northwest grid built on the Grand Coulee Dam, pictured at left, and the wind farms in the Columbia Gorge, below left, can get overloaded. So while you can never, according to the conventional wisdom, be too thin or too rich, you can have too much energy.

The corresponding criticism, that wind and solar don’t work in a storm, also applies to nuclear power. As noted here, on Popular Logistics by Lawrence J. Furman, eight nuclear plants from North Carolina to Connecticut were shut down due to Hurricane Irene or the earthquake that preceded it. Wind and solar, however, unlike nuclear, come on automatically after the storm.

Excerpted from Matthew L. Wald: Taming Unruly Wind Power, published in the New York Times, on November 5th, 2011

For decades, electric companies have swung into emergency mode when demand soars on blistering hot days, appealing to households to use less power. But with the rise of wind energy, utilities in the Pacific Northwest are sometimes dealing with the opposite: moments when there is too much electricity for the grid to soak up.

In June 2010, for example, a violent storm in the Northwest caused a simultaneous surge in wind power and in traditional hydropower, creating an oversupply that threatened to overwhelm the grid and cause a blackout. As a result, the Bonneville Power Administration, the wholesale supplier to a broad swath of the region, turned this year to a strategy common to regions with hot summers: adjusting volunteers’ home appliances by remote control to balance supply and demand. When excess supply threatens Bonneville’s grid, an operator in a control room hundreds of miles away will now dial up a volunteer’s water heater, raising the thermostat by 60 more degrees. Ceramic bricks in a nearby electric space heater can be warmed to hundreds of degrees. The devices then function as thermal batteries, capable of giving back the energy when it is needed. Microchips run both systems, ensuring that tap-water and room temperatures in the home hardly vary.

“It’s a little bit of that Big Brother control, almost,” said Theresa Rothweiler, a teacher’s aide in the Port Angeles, Wash., school system who nonetheless signed up for the program with her husband, Bruce, a teacher. She said she had been intrigued by an ad that Bonneville placed in the local paper that asked consumers to help enable the grid to absorb more renewable energy, especially wind. “We’re always looking at ways to save energy, or be more efficient or green, however you want to put it,” said Ms. Rothweiler, who worries about leaving the planet a livable place for her 21-year-old daughter, Gretchen. Bonneville paid for the special technology, which runs around $1,000 per home. The initial goal of Bonneville’s pilot program is to gain experience in charging and “discharging” the water heaters and space heaters to see how much response operators can count on as the use of these thermal batteries expands.

Mark K. Lauby, director of reliability assessment at the North American Electric Reliability Corporation, which enforces standards on the grid, said that such storage innovations would be “the holy grail” as the nation shifts to greater reliance on renewable energy. While the threat of excess supply is most severe in the Pacific Northwest, other regions may land in the same situation in coming years because a surplus would threaten to destabilize the electric system as much as a shortage. California, for example, is committed to getting a third of its electricity from renewable sources by 2020. That would be harder if it had to turn off the wind machines on their best generating days to prevent the grid from being overwhelmed.

For decades, the Bonneville Power Administration rarely had a problem with excess supply. Its backbone is hydroelectric dams on the Columbia River, and while the operators must often run all of the falling water through its power-producing turbines for environmental reasons, the grid could adjust the supply by turning off fossil fuel plants. That balance began to shift over the last few years as entrepreneurs built hundreds of wind machines nearby in the Columbia River Gorge, an area that utility executives now call a “wind ghetto.” While the wind turbines produce electricity far below their capacity most hours of the year, they get busy when a storm rolls through, which is when river flows are highest, too.

Paul Krugman on fracking and renewable energy

$Schematic diagram of hydro fracking$ | Tweet As Paul Krugman points out, in the NY Times, “fracking” for hydrocarbons, , see pictures at left, would, in fact, be highly subsidized:

$Before and after images of hydrofracking$ Fracking — injecting high-pressure fluid into rocks deep underground, inducing the release of fossil fuels — is an impressive technology. But it’s also a technology that imposes large costs on the public. We know that it produces toxic (and radioactive) wastewater that contaminates drinking water; there is reason to suspect, despite industry denials, that it also contaminates groundwater; and the heavy trucking required for fracking inflicts major damage on roads.

Economics 101 tells us that an industry imposing large costs on third parties should be required to “internalize” those costs — that is, to pay for the damage it inflicts, treating that damage as a cost of production. Fracking might still be worth doing given those costs. But no industry should be held harmless from its impacts on the environment and the nation’s infrastructure.

Yet what the industry and its defenders demand is, of course, precisely that it be let off the hook for the damage it causes. Why? Because we need that energy! For example, the industry-backed organization energyfromshale.org declares that “there are only two sides in the debate: those who want our oil and natural resources developed in a safe and responsible way; and those who don’t want our oil and natural gas resources developed at all.”

So it’s worth pointing out that special treatment for fracking makes a mockery of free-market principles. Pro-fracking politicians claim to be against subsidies, yet letting an industry impose costs without paying compensation is in effect a huge subsidy. They say they oppose having the government “pick winners,” yet they demand special treatment for this industry precisely because they claim it will be a winner.

“Here Comes The Sun,” by Paul Krugman, on NYTimes.com, dated November 7th 2011.

Mr. Krugman also notes that, with respect to solar energy, there’s good news:

… [T]he price of solar panels is dropping fast…. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, “there’s now frequent talk of a ‘Moore’s law’ in solar energy,” with prices adjusted for inflation falling around 7 percent a year.

This has already led to rapid growth in solar installations, but even more change may be just around the corner. If the downward trend continues — and if anything it seems to be accelerating — we’re just a few years from the point at which electricity from solar panels becomes cheaper than electricity generated by burning coal.

And if we priced coal-fired power right, taking into account the huge health and other costs it imposes, it’s likely that we would already have passed that tipping point.

But will our political system delay the energy transformation now within reach?

Bob Gohn/Pike Research: The Class Warfare of Dynamic Pricing

Excerpted from The Class Warfare of Dynamic Pricing, by Bob Gohn, on the Pike Research Blog

Dynamic pricing for electricity has long been the holy grail of the smart grid, particularly for smart metering. The rationale is that if the retail price of electricity actually reflected the true time-based costs instead of a blurred monthly average, then consumers would become more efficient buyers, benefiting themselves, suppliers, the environment, and society. If we can choose to buy less during demand peaks when generation costs are highest, and buy more when the grid is underutilized, then overall electricity bills will go down, peak demand is reduced, and the associated environmental impacts are lessened. Everyone wins – so who’s to complain?

Well, quite a few consumer interest groups are complaining, ranging from the AARP to utility watchdog groups. While some complaints fit within the ongoing smart metering paranoia, there are legitimate concerns as well, including:

Low-income, elderly, and other disadvantaged groups may not be able to shift to off-peak use, and hence may face higher bills. Images of grandma turning off her oxygen, shivering in the cold or sweating out a heat wave because of smart meters are persuasive.

There is a general assumption that consumers will happily make “comfort vs. cost” tradeoffs in energy use. This is counter to the trend toward flat rate pricing elsewhere, including the telecom industry, heretofore the master of time-of-use pricing.

While there is little argument against “opt-in” dynamic pricing programs, most agree that dynamic pricing must be mandatory or implemented as an “opt-out” program to achieve the desired benefits. This muddles the message of enabling “consumer choice” via smart metering.

Underlying all these concerns is an assumption that for someone to win with dynamic pricing, someone else has to lose. The goal may be to reduce demand peaks and fill underutilized valleys, effectively lowering the average, but it is true that some will likely pay more with dynamic rates. The question is who?

Interestingly, opposition to dynamic pricing can be found on both ends of our politically polarized spectrum. Those toward the right fear Big Brother taking control of their thermostats and appliances (here, utilities = government). Those bent leftward see the social good of universal electricity being corrupted, leaving the vulnerable unprotected (here, utilities = big business). I am sure smart grid advocates would love to unite Tea Party and Occupy Wall Street folks, but not this way!

You can read the rest of The Class Warfare of Dynamic Pricing, by Bob Gohn, on the Pike Research Blog. We make only this observation – when uneven distribution of wealth is so extreme that the less-fortunate suffer morbidity and mortality for want of adequately efficient shelter, protection from extremes of temperature, the unevenness of that wealth distribution – it matters not whether we’re talking about housing stock and its efficiency, or energy to heat or cool it, we are inclined to set aside ideology, and find ways to insulate houses, provide clean and warm clothing and food, and prohibit energy companies from executing non-payment shutoffs absent a court order. We can then discuss ideology, or yell at each other, or do what passes for political discourse these days – later. If this makes me intellectually dishonest, I’ll take the weight for that.

In Upstate NY, Gas Drilling Debate Gets Local

Tweet Maria Scarvalone’s coverage illustrates how rapidly and intensely opposition to “fracking” has spread in communities in Upstate New York. Her coverage suggest that the fracking question

“It’s like playing Russian roulette with your water supply.”

has energized voters – against the “fracking” scheme. Scarvalone’s piece makes the probability of “fracking” coming to pass seem unlikely. Add to that other constituencies who are likely to oppose fracking: banks, property owners, title insurance companies, attorneys and real estate professionals will influence the ongoing debate over “Fracking.” Continue reading →

NPR: 3 million without power after relatively minor weather events

Tovia Smith reports that we’re not doing well in recovering from last weekend’s weather. What should be a minor event – with solar, wind, batteries, and even petroleum-based generators all at the ready – is a warning of deficiencies in planning and preparedness.

Residents of the northeast are still coping with a weekend storm that was more trick than treat. Schools are closed and utility crews are working overtime to restore power in several states. More than 3 million people were without power immediately after the storm.

via After Storm, Some Northeasterners Still In The Dark : NPR.

Saving the Economy, Numero Uno

Tweet “The United States,” according to Robert Barro, who teaches economics at Harvard and is a “fellow” at the Hoover Institution, “is in the third year of a grand experiment by the Obama administration.” This is inaccurate. Obama is the President, but the US Constitution provides a framework in which power is divided into three branches of the Federal government, and the power of the each of the branches is checked and balanced by the others, and “all power not expressly granted to the federal government is held by the states and the citizens. It would be more accurate to say that the United States is in the third year of a grand experiment by the Obama administration, the Congress, the Judiciary, the Republican Party, various special interests, and the citizens.

Barro published this flawed analysis in “How to Really Save the Economy, “an op-ed in the New York Times, published Sept. 10, 2011.

“How is the experiment going?” Barro asks rhetorically. “Not well,” he answers.

How could it? On January 16, 2009, a week before the Inauguration, Rush Limbaugh, one of the leaders of the right wing of the United States said, “I hope Obama fails.” (The text is on Limbaugh’s site. An audio is on You Tube.) As I wrote, on Popular Logistics, here, a hope that the President fails is hope that the United States fails.

As was reported, here, in the Washington Post on August 6, 2011, and here on Popular Logistics, on August 8, 2011, John Boehner, Eric Cantor, Paul Ryan, and the “Young Guns,” their Republican comrades in the House of Representatives, PLANNED as far back as January, 2009 to use the debt ceiling to create a political crisis. The Republicans have been trying to actualize Mr. Limbaugh’s hopes.

Barro is a professor of neoclassical economics, and a fellow of the Hoover Institution. What he doesn’t understand, and what President Herbert Hoover didn’t understand, is that under economic conditions such as we see today, while businesses and government are able to create jobs, business owners are risk averse, and won’t risk capital. The government MUST create jobs, because businesses won’t. Everyone who has a job and a 10 year old car, and is hesitant with regards to buying a new car, understands this. John Maynard Keynes understood this. Franklin Delano Roosevelt understood this. Herbert Hoover didn’t – which is why he lost to Mr. Roosevelt in 1932, and why, 36 years later, President Nixon said “We are all Keynesians now.” (Note that Mr. Nixon has been called many things. However, “Liberal” is not one of them.)

So how do we really save the economy? See Part Deux.

One of the best kept secrets in New York City is the existence of a 40 kilowatt (KW) photovoltaic solar array on the Whitehall Street terminal of the Staten Island Ferry, pictured above, and first covered in Popular Logistics in 2007, here.

There are 90,000 public schools in the United States. Suppose we were to install a 40 KW solar energy system on each of them. PV solar modules require very little maintenance over their 35 to 45 year life expectancy. At a cost of $5,000 per kilowatt of nameplate capacity, each of these 90,000 systems would cost $200,000. This 3.6 gigawatts of distributed daylight-only capacity would cost about $14.4 billion. The total costs would probably be less because PV Solar is subject to economic forces like Moore’s Law.

It seems to make sense to use taxpayer monies to finance these systems; taxpayer monies pay the electric bills for public schools and other public infrastructure.

Every public school in the country would have a power plant that generates power, during the day, with no fuel cost and no waste. And with no associated mining, processing, transportation, fuel costs and no waste management costs. At $5.00 per watt, or $5 billion per gigawatt, the capital costs are lower than the costs of new nuclear and significantly lower than the costs of coal with carbon sequestration, with none of the risks or hazards associated with the systems: no arsenic, mercury, lead, thorium, uranium, zinc, or carbon.

But what are the other implications? What would it give us? Again. see Part Deux

Electric Vehicle breaks 1000-miles, setting new distance record

Charis Michelsen, writing on GAS 2.0, reports that the Offenburg University of Applied Sciences (Germany) has broken the distance record for electric vehicles:

Electric vehicles records are dropping like flies these days, as more and more vehicles push the boundaries of what’s possible for electric cars, boats, and planes. The latest to fall: the record for longest drive ever in a battery-powered vehicle (no recharge) was broken last weekend by a new, experimental electric vehicle called “Schluckspecht” (“heavy drinker” in colloquial German).

Developed at the University of Applied Sciences in Offenburg, the car – which is not pretty – does a solid Energizer bunny routine, going and going and going for 1631.5km (1013.77 miles) without needing to recharge the battery.

The test drive took place in Boxberg at the Bosch corporate test track, where a team of four drivers made the record run alongside a camera-equipped pace car. The 36 hour and 12 minute drive (which didn’t exactly break any EV speed records) was also monitored by European testing agents from TÜV Süd.

This world record follows the team’s successful participation in the South-African Solar Challenge 2010, in which the Schluckspecht drove 626.6km (389.35 miles) on public roads – farther (at the time) than any other electric vehicle.

The Schluckspecht boasts little in the way of creature comforts, a fact which helped reduce overall weight and was no doubt helpful during its record-setting drive. However, the engineering behind its design also played a large part in its success, as the Schluckspecht was built from the ground up specifically to chase battery-powered vehicle records in a lab belonging to Ms. Sunmin Lee from Pforzheim University. The body was shaped with “pure aerodynamics” in mind, and – since the vehicle makes use of two wheel-mounted hub-motors – without the need to accommodate an internal engine or transmission.

Source: Gas 2.0 (http://s.tt/132cX)

"Beyond Fuel" at the Space Coast Green Living Festival

Green Living Festival

Tweet I am presenting “Beyond Fuel: From Consuming Natural Resources to Harnessing Natural Processes,” a discussion of the hidden costs, or “economic externalities,” of nuclear power, coal, and oil, and the non-obvious benefits of wind, solar, marine hydro and efficiency at the Sp ace Coast Green Living Festival, Cocoa Beach, Florida, Sept 17, 2011.

The festival is sponsored by the Cocoa Beach Surfrider Foundation and the Sierra Club Turtle Coast Group. It will be at the Cocoa Beach Courtyard by Marriott.

Continue reading →

Exxon Profits: $10,700,000,000 for the Quarter

The Associated Press via the Sacramento Bee reported that “Exxon Mobil Corp. earned $10.7 billion … its highest quarterly profit since the third quarter of 2008…. However, Exxon officials noted that sluggish business investment, lower consumer spending and high debt would continue to weigh on the economy.”

Let’s do some math – Exxon earned $10.7 Billion this past quarter. Yet Exxon and other big oil companies receives $2 Billion to $3 Billion per year in tax subsidies. If divided equally, then Exxon would get $400 to $600 million per year, $100 to $150 Million per quarter. The subsidies amount to 0.93% to 1.4% of Exxon’s profits of $10.7 Billion this quarter, and 0.108% to 0.16$ of Exxon’s annual revenues of $370 Billion for the year ended 12/31/10 (Google Finance). This is equivalent to giving someone earning $50,000 per year a gift of $54 to $81.

A lot of people need help: American college students need help paying tuition, Americans on Medicare and Medicaid need help paying their medical bills, and Americans on Unemployment need help paying for food, people trying to design and build a renewable sustainable energy infrastructure. But we are helping oil companies.Why?

Let’s look again at the numbers. For the year ending Dec. 31, 2010, Exxon’s Gross Revenues were $383 Billion. Gross Profits were $107 Billion, and Income Before Taxes were $53 Billion. Profit was 27.9% of Gross Revenues. Income before Taxes was 13.8% of Gross Revenues.

Exxon	12/31/10
Total Revenues	$383	B
Gross Profit	$107	B
Income before Taxes	$53	B

Gross Profit / Revenues	27.94%
Income BT / Revenues	13.84%

Period	Income	Nominal Tax
Year ending 12/31/2010	$53 Billion	$18.55 B
Quarter ending 6/30/2011	10.7 Billion	$3.745 B

And according to Valeri Vasquez, at the Center for American Progress, here, Exxon’s tax rate is 17.6%. The nominal corporate rate is 35%. With profits of $53 Billion last year, rather than receiving subsidies. Exxon should have paid $18.55 Billion in taxes last years. With profits of $10.7 Billion last quarter, Exxon should have paid $3.745 Billion.

Continue reading →

Clean Energy, Good Jobs, and a Vibrant Economy … But

courtesy NASA (our tax dollars at work)

Tweet It sounds too good to be true:

*   100 gigawatts of offshore wind, $300 Billion,
*   100 gw of landbased wind, $200 Billion,
*   75 gw of solar, $300 Billion,
*   75 gw of geothermal, $200 Billion.
*   200 gigawatt equivalents of efficiency – $200 Billion.
*   100 & Clean, Renewable, Sustaianble Energy: 1.2 Trillion.
*   2.7 Million New Jobs and a Healthy Economy: Priceless!

This is happening, slowly, inexorably, by the “invisible hand of the market.” But it will happen faster if the “invisible mind of the community” acts. This means the government!

Continue reading →

Power Line Policy Passed by Energy Regulatory Commission – NYTimes.com

Once again, Matt Wald of The Times explains what’s happening with our energy infrastructure:

WASHINGTON — Federal regulators laid down principles on Thursday for planning and paying for new power lines, part of a long-term policy effort to help the nation’s electricity grid grow enough to meet the demands of renewable energy and a competitive electricity market.

The rule, which has been in the works for several years, is intended to push the organizations that manage the grid into cooperating with one another, so that developers can build power lines across several states and multiple electrical jurisdictions.

Such cross-jurisdictional transmission lines are becoming more important as states seek to reach their goals of integrating large amounts of wind and solar power, generally available in remote deserts and mountaintops, into the energy mix.

While generators of power, including renewable energy advocates, generally praised the rule, others were wary and said it could impose big costs on people who get no benefits.

But it has long been clear to grid experts that the existing transmission lines will not allow for a free market in electricity in which generators can compete across vast distances to supply customers, or for meeting state renewable energy goals. Existing rules make it very difficult for a company seeking to build new transmission lines to establish how it will recoup its costs.

The new rule, passed unanimously on Thursday by the Federal Energy Regulatory Commission, does not specify what the formula should be for allocating costs, or precisely how new lines should be planned. But it does lay out general guidelines, including the notion that the costs should be borne by those who benefit.

The commission also issued an implicit threat: if grid organizations do not enable the construction of badly needed new transmission lines, federal regulators will do it for them.

Jon Wellinghoff, the chairman of the commission, cited a prediction that until 2019, 60 percent of new generating capacity will be wind and sun, often distant from population centers.

via Power Line Policy Passed by Energy Regulatory Commission – NYTimes.com.

BBC: Poor countries outspend wealthy countries 10:1 on renewables

Mark Kinver, BBC News Environment Reporter, writes that a study commissioned by the United Nations reports that less-developed nations invested in renewable energy tenfold the amount spent by developed countries. Viewed as an investment, assuming that the renewable energy infrastructure lasts long enough to pay for itself (a safe bet), the energy produced thereafter is essentially without cost. And the higher energy prices rise – and the faster they rise – the better the return on investment. The worst of the likely outcomes is that energy prices rise slowly – but the countries with the biggest investment in clean renewables will still have a direct economic advantage (lower energy costs), and such indirect advantages as lowered health and environmental costs. Taken to an extreme, this trend could reverse the standing of “less-developed” and “more-developed” countries within a generation or two. From “Green Energy Investment Hits Record High“:

Global investment in renewable energy sources grew by 32% during 2010 to reach a record level of US$211bn £132bn, a UN study has reported.The main growth drivers were backing for wind farms in China and rooftop solar panels in Europe, it said.It also found that developing nations invested more in green power than rich nations for the first time last year.The Global Trends in Renewable Energy Investment 2011 report was prepared for the UN by Bloomberg New Energy Finance.”The continuing growth in this core segment of the green economy is not happening by chance,” said Achim Steiner, executive director of the UN Environment Programme.”The combination of government target-setting, policy support and stimulus funding is underpinning the renewable industry’s rise and bringing the much needed transformation of our global energy system within reach.”In 2010, developing economies spent more on “financial new investment”, pumping $72bn into renewable projects compared with the $70bn outlay by developed economies.

via BBC News – Green energy investment hits record global high.

Dirtier Air and Higher Costs May Follow Indian Point Closing – NYTimes.com

The New York Times reports on some of the complexities associated with closing the Indian Point nuclear power plants. But what is missing from the story? Patrick McGeehan’s Dirtier Air and Higher Costs May Follow Indian Point Closing:

Shutting down the Indian Point nuclear power plant would lead to significantly dirtier air and higher electric bills for New York City residents, according to a report commissioned by the city that is circulating among state officials in Albany.

To read a further excerpt – and a discussion of other possible responses to closing Indian Point – see the rest of this post after the jump.

Continue reading →