Climate Clock Ticking for Solar. Northwest BC Mines safe for Alaska salmon.

In News by wp_sysadmin


The lurking threat to solar power’s growth
James Temple, MIT Technology Review, July 14, 2021

Plummeting sunny day solar prices are undermining the economic case to build more solar farms – and putting climate goals at risk

A few lonely academics have been warning for years that solar power faces a fundamental challenge that could halt the industry’s breakneck growth. Simply put: the more solar you add to the grid, the less valuable it becomes.

The problem is that solar panels generate lots of electricity in the middle of sunny days, frequently more than what’s required, driving down prices—sometimes even into negative territory.

Unlike a natural gas plant, solar plant operators can’t easily throttle electricity up and down as needed, or space generation out through the day, night and dark winter. It’s available when it’s available, which is when the sun is shining. And that’s when all the other solar plants are cranking out electricity at maximum levels as well.

new report finds that California, which produces one of the largest shares of solar power in the world, is already acutely experiencing this phenomenon, known as solar value deflation.

The state’s average solar wholesale prices have fallen 37% relative to the average electricity prices for other sources since 2014, according to the Breakthrough Institute analysis, which will be published on July 14. In other words, utilities are increasingly paying solar plants less than other sources overall, due to their fluctuating generation patterns.

Wholesale prices are basically the amount that utilities pay power plants for the electricity they deliver to households and businesses. They shift throughout the day and year, edging back up for solar operators during the mornings, afternoons and other times when there isn’t excess supply. But as more solar plants come online, the periods of excess supply that drive down those costs will become more frequent and more pronounced.

Lower prices may sound great for consumers. But it presents troubling implications for the world’s hopes of rapidly expanding solar capacity and meeting climate goals.

It could become difficult to convince developers and investors to continue building ever more solar plants if they stand to make less money or even lose it. In fact, California construction has already been flat since 2018, the study notes. But the state will need the industry to significantly ramp up development if it hopes to pull off its ambitious clean energy targets.

This could soon become a broader problem as well.

“California is a little sneak peak of what is in store for the rest of the world as we dramatically scale up solar,” says Zeke Hausfather, director of climate and energy at the Breakthrough Institute, and author of the report.

That’s because while solar accounts for about 19% of the electricity California generates, other regions are rapidly installing photovoltaic panels as well. In Nevada and Hawaii, for instance, the share of solar generation stood at around 13% in 2019, the study found. The levels in Italy, Greece and Germany were at 8.6%, 7.9% and 7.8%, respectively.

The race

So far, heavy solar subsidies and the rapidly declining cost of solar power has offset the falling value of solar in California. So long as it gets ever cheaper to build and operate solar power plants, value deflation is less of a problem.

But it’s likely to get harder and harder to pull off that trick, as the state’s share of solar generation continues to climb. If the cost declines for building and installing solar panels tapers off, California’s solar deflation could pull ahead in the race against falling costs as soon as 2022 and climb upward from there, the report finds. At that point, wholesale pricing would be below the subsidized costs of solar in California, undermining the pure economic rationale for building more plants, Hausfather notes.

The state’s SB 100 law, passed in 2018, requires all of California’s electricity to come from “renewable and zero-carbon resources” by 2045. By that point, some 60% of the state’s electricity could come from solar, based on a California Energy Commission model.

The Breakthrough study estimates that the value of solar–or the wholesale average price relative to other sources–will fall by 85% at that point, decimating the economics of solar farms, at least as California’s grid exists today.

How do we fix it?

There are a variety of ways to ease this effect, though no single one is likely a panacea.

The solar sector can continue trying to find ways to push down solar costs, but some researchers have argued it may require shifting to new materials and technologies to get to the dirt-cheap levels required to outpace value deflation.

Grid operators can add more energy storage—although that approach gets extremely expensive once renewables provide the vast majority of electricity on the grid, study after study finds. States or nations could also boost subsidies for solar power; add more long-distance transmission lines to allow regions to swap clean electricity as needed; or incentivize customers to move energy use to times of day that better match with periods of high generation.

Grid operators can add more energy storage—although that approach gets extremely expensive once renewables provide the vast majority of electricity on the grid, study after study finds. States or nations could also boost subsidies for solar power; add more long-distance transmission lines to allow regions to swap clean electricity as needed; or incentivize customers to move energy use to times of day that better match with periods of high generation.

The good news is that each of these will help to ease the transition to clean electricity sources in other ways as well, but they’ll also all take considerable time and money to get underway.

The California solar market offers a reminder that the climate clock is ticking.


World’s Recoverable Oil Resources Shrinks By 9%
Rystad Energy, July 13, 2021

Every year and following the publication of the BP Statistical Review, Rystad Energy releases its own assessment to provide an independent, solid and clear comparison of how the world’s energy landscape changed last year. Our 2021 review deals a major blow for the size of the world’s remaining recoverable oil resources – but it also shows that oil production and consumption can align with climate goals.

Rystad Energy now estimates total recoverable oil resources at 1,725 billion barrels, a significant reduction of last year’s estimate of 1,903 billion barrels. Out of this total, which shows our estimate of how much oil is technically recoverable in the future, about 1,300 billion barrels are sufficiently profitable to be produced before the year 2100 at a Brent real oil price of $50 per barrel.

“In this scenario, global production of oil and natural gas liquids will fall below 50 million barrels per day by 2050. Exploring, developing, processing and consuming this amount of commercially extractable oil will lead to gross greenhouse gas emissions of less than 450 gigatonnes of CO2 from now until 2100. This is compliant with IPCC’s carbon budget for global warming limited to 1.8?C by 2100,” says Rystad Energy’s Head of Analysis, Per Magnus Nysveen.

US and China take the largest hit by the revision:

This year’s review of global recoverable oil resources is based on resources modelled at well level rather than field level. This more detailed approach has removed 178 billion barrels from the expected accounts as the confidence level for decline rates has increased with the amount of new information gathered.

Our updated report also includes revisions for proved reserves. Here Rystad Energy applies a consistent set of conservative probabilities, as opposed to official reporting by authorities which is deemed less consistent. Among other findings, we see significant differences among OPEC members on the longevity of proved reserves, ranging from well below 10 years for some members to almost 20 years for Saudi Arabia and the UAE.

In terms of absolute volumes removed from non-OPEC producers, remaining recoverable resources in the US are now reduced to 214 billion barrels, losing 30 billion barrels from last year’s estimate. China suffers the second-largest loss with its remaining recoverable resources now limited to 50 billion barrels, a downwards revision of 26 billion barrels. Mexico’s recoverable resources are third on the loss list, downgraded by 12 billion barrels to 26 billion barrels. Most of this year’s revisions are driven by lower upside potential from shale oil drilling due to complex geology and the need for extensive exploration campaigns and improved fracking technologies.

The remaining recoverable resources of OPEC countries are reduced by 53 billion barrels to 741 billion barrels. Iran and Saudi Arabia have the largest revisions, losing 11 billion barrels each, with Saudi recoverable oil volumes now calculated at 288 billion barrels and Iranian volumes at 101 billion barrels. Iraq follows in third place, seeing its recoverable resources shrink by 8 billion barrels to 110 billion barrels.

Related: Natural Gas Prices Still Have Room To Run

Who sits on the largest resources?

In this revision, Saudi Arabia keeps the throne as the producer with the largest volumes of recoverable oil resources (288 billion barrels). The US follows second (214 billion barrels), Russia third (149 billion barrels) and Canada fourth (138 billion barrels).

In Central and South America, Brazil remains first in recoverable resources, sitting on 83 billion barrels (down 2 billion barrels from last year’s update). In Europe, with 19 billion barrels (down by 1 billion barrels in this update), Norway remains ahead of the UK, whose volumes have shrunk by 2 billion barrels to 10 billion. In Africa, resource leader Nigeria lost 6 billion barrels and its recoverable resources are now estimated at 20 billion barrels.

Unlike most countries in our analysis, Australia’s estimated recoverable oil resources are now seen higher by 2 billion barrels at 23 billion barrels.

The time stamp of Rystad Energy’s newest resource assessment is 1 January 2021. In other words, our analysis illustrates where the remaining recoverable resources of each country stood at the beginning of this year.


Record Natural Gas Prices Give Power Markets a Jolt
Joe Wallace, The Wall Street Journal, July 13, 2021

A scramble for natural gas is creating pockets of scarcity in the global market, boosting prices for the fuel and for the electricity generated by burning it.

Rampant demand in China is sucking in chilled cargoes of gas from the U.S., after a year in which American energy companies throttled back production. A drought in Brazil has added to the competition by curtailing power output from hydroelectric dams.

Searing heat in Canada and the Pacific Northwest has also lifted gas demand. Some places are missing out, like Pakistan, where a shortage of gas and the delayed onset of the summer monsoon have prompted power outages.

Europe, in particular, is feeling the pinch. With vessels of liquefied natural gas heading to Asia, buyers on the continent have struggled to replenish tanks and caverns after a long and cold winter. Storage levels are the lowest for this time of year in a decade, said Natasha Fielding, a gas analyst at Argus Media.

The price of gas at a trading hub in the Netherlands shot to a record $13.10 per million British thermal units in July, according to S&P Global Platts data going back to 2004. Barring mild temperatures this winter, gas prices are likely to remain elevated globally for at least another year, according to Chris Midgley, head of analytics at the commodities-data firm.

“There just isn’t enough [liquefied natural gas] to supply Europe,” Mr. Midgley said. “The LNG, of course predominantly coming out of the U.S., is being pulled into Asia and also into Latin America.”

High prices for gas, coal and emission permits—the main input costs for power plants—have fed off each other to send electricity markets skyward too. In Germany, Europe’s largest economy, power prices in July jumped to about €83.67, equivalent to around $99.26, a megawatt-hour, according to Argus. That is close to their highest level in figures dating back to 2000. U.K., Spanish and Italian power prices have shot to record highs.

The moves are among the most extreme cases in a broader upswing in energy markets. U.S. crude prices have risen 54% this year to about $75 a barrel and Americans drivers are paying more for gasoline than they have done in almost seven years. Thermal coal hasn’t been as expensive in a decade.

For consumers and businesses, it is a painful reminder that energy bills can go up as well as down. The jump is driving a quicker pace of inflation, though central banks say that effect will wash out.

Lofty prices are taking the shine off a boom in demand for products made by energy-intensive companies. Profits are being squeezed in industries such as chemicals, according to Benedict De Meulemeester, chief executive of E&C Consultants, which advises firms on how to procure energy.

“Red lights start to go off and people ask ‘what is going on here?’” said Mr. De Meulemeester. Pharmaceutical and automotive companies that can’t readily raise prices for customers are among the most vulnerable, he added.

Evonik Industries AG , a German producer of specialty chemicals with factories world-wide, has largely been insulated because it locks in prices for gas and power years ahead of time, said Andreas Steidle, head of energy management. The rally is likely to start to bite next year, when Mr. Steidle expects the company’s energy bill to jump by 20%, taking it close to the long-run average. Rising prices for fuel, electricity and carbon permits have hastened Evonik’s push to procure power generated from its own new-build power plants and from low-cost renewable sources, Mr. Steidle said.

On the flip side, gas exporters including Russia’s Gazprom PJSC and Houston-based Cheniere Energy Inc. are poised to be among the big winners. Cheniere shares are up 40% this year, while U.S.-listed shares of Gazprom have risen 41%.

Higher energy bills have sharpened focus on the European Union’s proposals for policies to hit the bloc’s emission targets, due to be published Wednesday. Companies in energy-hungry industries, such as glass, worry that measures that could add to upward pressure on carbon prices will put them at a disadvantage against international competitors.

Munich-based chemicals manufacturer Wacker Chemie AG secures prices well in advance but will still see a significant rise in energy costs this year, said spokesman Christof Bachmair. For some products, the company automatically passes raw-material and energy prices through to customers. For products whose prices are set on global markets, Wacker will take the hit, he said.

For companies unable to pass energy prices onto customers quickly, the hit to profits could be sizable. Gas and power account for significantly more than half of input costs in manufacturing chlorine with electrolysis, said Jörg Rothermel, head of energy and climate at the German Chemical Industry Association.

“It’s already a problem now,” Mr. Rothermel said of rising energy prices.


Northwest B.C. mines safe for salmon, Alaska legislators told
Tom Fletcher, Saanich News, July 8, 2021

Projects developed in Stikine, Taku, Unuk River watersheds

The B.C. mining industry has responded to the latest criticism by Alaska state legislators on the province’s regulation of mining and protection of rivers that flow from northeast B.C. into Alaska waters.

Eight Alaska politicians wrote to B.C. Premier John Horgan in May, warning that the state is watching the decline of chinook and sockeye salmon runs in the Stikine, Taku and Unuk Rivers with alarm, and accusing B.C. of dragging its feet on regulation to require mine reclamation funds to be in place when projects are built. They described the current agreement between Alaska and B.C. as “non-binding” and “unfunded,” and referred to the construction of “massive tailings dams at the headwaters of these shared rivers.”

Mining Association of B.C. president Michael Goehring released a response this week, saying the Alaska letter and resulting media reports do not paint an accurate picture of B.C.’s efforts. He referred to the overhaul of B.C.’s Mines Act and reclamation code and creation of independent review boards for mine tailings management, put in place after the collapse of the tailings dam at Mount Polley Mine near Quesnel in 2014.

Goehring pointed to the B.C.-Alaska Transboundary Working Group on Monitoring, with Indigenous communities involved in water sampling, that found “overall aquatic conditions of the Taku, Stikine and Unuk trans-boundary rivers currently support and maintain aquatic life.”

Goehring acknowledged the need to complete remediation of the abandoned Tulsequah Chief Mine, which has been leaching acid rock drainage in the Taku River system since the 1960s. In July 2020, the B.C. government committed $1.5 million for site preparation and studies to prepare for reclamation of the Tulsequah Chief mine site.

“Reclamation and closure of this site is imperative,” Goehring said in a letter to the Alaska representatives.

An independent audit of tailings storage facilities (TSFs) “compared B.C.’s regulatory framework with similar regulations in other mining jurisdictions – including Alaska and Montana – on 13 elements of TSF management,” Goehring wrote. “The audit found B.C.’s regulator framework for TSFs is among the best in the world.”

B.C. has been working with the Tahltan Nation on shared management of the area they call the Sacred Headwaters, a mineral-rich territory where coalbed methane drilling was banned a decade ago and some new mines have been approved.

B.C. has temporarily complied with a demand from Tahltan Central Government president Chad Norman Day to stop issuing permits for placer and jade mining in the territory and put a stop to a “reality” TV show called “Jade Fever” that has run for seven seasons on Discovery Canada, a division of Bell Media.


Alaska governor brings back former aide as policy adviser
Associated Press, July 13, 2021

Alaska Gov. Mike Dunleavy has hired a former aide who managed his 2018 gubernatorial run to oversee efforts to push back against the federal government in disputes over states’ rights and land rights.

Brett Huber previously worked in the Republican Dunleavy’s administration as a director of policy and communications before leaving last year to run a campaign against a voter initiative that would overhaul Alaska elections, the Anchorage Daily News reported. The initiative prevailed.

The governor’s office recently announced Huber will work as a senior policy adviser for “statehood defense.” His work is to include coordinating efforts to “reassert control of lands and waters” and fight attempts from federal agencies to “overregulate Alaskans,” a statement from Dunleavy’s office said.

Disputes between the state and federal government aren’t new and have flared up during Democratic presidential administrations, such as the current one.

Dunleavy’s office earlier this month said it was suing the Interior Department over a delay of orders signed during the Trump administration that sought to open 28 million acres of land in Alaska to development.

Dunleavy has criticized other actions by President Joe Biden’s administration, including a proposal to “repeal or replace” a decision by the Trump administration to lift restrictions on logging and road building in a southeast Alaska rainforest.

Huber said he would work with the Biden administration when there are opportunities for agreement.

“You fight where you have to and work together where you can,” he said.

Lauren Giliam, a Dunleavy spokesperson, by email Tuesday told The Associated Press the governor’s office does not discuss personnel matters, including salaries, but said a records request could be made for Huber’s salary information.

This year’s budget included Dunleavy’s request for $4 million to help pay for litigation for the “defense of rights to develop and protect the state’s natural resources, to access land, and to manage its fish and wildlife resources.”


Democrats’ $3.5 trillion budget deal sets up next phase of climate push
Ben Geman, Axios, July 14, 2021

Senate Democrats’ new deal on a budget outline sets the stage for their fraught effort to seek unprecedented clean energy spending and incentives.

Driving the news: Majority Leader Chuck Schumer and Budget Committee members on Wednesday night announced an agreement to try to steer $3.5 trillion into Medicare, climate, education and other priorities.

Why it matters: The preliminary deal is a precursor crafting a “reconciliation” package of programs — such as expanded tax breaks for renewable power, new electric vehicle incentives and more — that’s immune from filibuster.

The intrigue: The $3.5 trillion figure is lower than the $6 trillion Budget Committee Chairman Bernie Sanders and other progressive Democrats wanted, Axios’ Alayna Treene reports.

Quick take: Initial comments last night from progressive Senate Democrats nonetheless praised the package — an early sign that the topline spending is enough to satisfy climate-focused Senate members. But specifics are still absent.

What they’re saying: Sanders pointed to extreme weather events in the west as he touted the compromise.

  • He warned that absent a transition from fossil fuels, “the planet we’re going to be leaving our children and our grandchildren will be increasingly unhealthy, and uninhabitable.”
  • “Today, we begin the process of having this great country lead the world in transforming our energy system,” Sanders added.
  • Sen. Sheldon Whitehouse signaled approval in a tweet that notes the combined tally for the Democrats’ plan and the bipartisan infrastructure framework.

What’s next: The uncertain process of getting moderate and progressive Democrats alike to vote for the budget outline and the substantive reconciliation package that will be crafted in multiple committees.