Climate Change and Alternative Energy Program – Part 6

This is the final entry from the trip, and thanks to a hectic final day in Washington State, it’s been written on my first day back in the office in the UK.

An early start to the day as we were bundled into our van at 08.00 to drive across to the Washington State capital, Olympia. Our first meeting was with State Senator Karen Fraser, which was held in the magnificent State Capital building. Karen was kind enough to give us a US politics 101 class at the start of the meeting which helped clear up some things that had been confusing me (that’s not me saying I now understand everything by the way!). I’ll not delve into this here, but it is worth noting that each US State has its own Constitution, and that any law passed must be in line with the Constitution or it can face legal challenge. It’s also worth noting that States have freedom to act where there is an absence of a National initiative; the emergence of State level GHG initiatives (such as cap and trade schemes) is an example of this. Washington State has not yet passed a cap and trade initiative, although one is in the legislative pipeline (it has been knocked back once already).

In a wide ranging discussion, a number of interesting points arose. The first is that people are feeling oppressed by the level of US debt and therefore there is a pushback on new spending programmes. Action on climate change is being directly affected by this. It is easier to deal with water and air quality issues as these are more tangible to the public.

Washington State is somewhat distrustful of nuclear power, due to a rather chequered history. The State has one of the most contaminated nuclear sites in America, and there is a perception of significant feet dragging at Federal level over clean up of the site. It was noted that a failed bond scheme for new nuclear build has further soured public opinion.

Regarding other power sources, I’ve already mentioned that the State derives around 60% of its power from hydro. Coal is unfavourable in the State and in fact there is only one coal power station in Washington. Natural gas is less disfavoured than coal. I’ve also mentioned previously the existence of NIMBY opposition to wind power as well as issues of grid connection. The fact that certain power sources are disfavoured is important because elected Representatives and Senators tend to represent their districts more strongly than there parties (because elections come around so frequently), so a strong local bias is likely to be reflected in the voting on Bills.

Our next visit was to the Washington Department of Ecology (DoEc), where we had an interesting discussion on climate change adaptation. Washington has 2200 miles of coastline and is already experiencing erosion problems and models are predicting further pummelling through storms and waves. Currently the DoEc is hoping to incorporate some forward planning into a forthcoming State Act (I missed the title) to help mitigate against these impacts.

In Colorado we heard that there are potentially serious problems relating to water availability and I asked if the same was true in Washington. From models, it appears that the overall quantity of freshwater will not change appreciably; but there less snow melt and more rainwater as things warm up. Additionally there may earlier low river flow in summer, which is bad news for salmon, which are already in trouble in the State.

We heard that the DoEc is being encouraged to save energy, as are other Departments within the State. What was interesting was that the DoEc will be allowed to keep up to 50% of the savings as long as they reinvest into energy efficiency. All Departments have targets, but there isn’t really a penalty of missing them - other than the shame factor.

Dave Sjoding, from Washington State University, described some of the DoEc energy from waste projects. As with many places, the State is running out of landfill space and is therefore examining options to reduce waste being buried. What I liked about this CHP proposal was that it was more holistic than simply burning rubbish; co-products were considered, such as phosphorus and nitrogen for fertiliser.

We headed back to Seattle for the final formal meeting of the day, which was with Kevin Schneider, a smart grid expert from the Pacific North West National Laboratory. Kevin gave an absolutely fantastic overview of the US power system and noted that idea of a smart grid is somewhat of a misnomer. He suggested that it is more likely that a smart grid will be a way to operate the electricity system in a more flexible way utilising communications and information technology. He suggested that such a grid would have more information on how electricity is consumed, would have better utilisation of assets and would integrate renewables.

He noted an experiment in the Olympic Peninsula – a community that is served by a single power line that is rather congested. Smart devices were deployed to each dwelling that relayed information to a central computer and had the ability to control certain household devices, such as hot water, heating systems, fridges and dryer loads. Consumers were supplied with a simple dial that allowed them to set it to “more comfort” or “more saving”. Each dwelling had an account set up into which a portion of their previous energy bill was placed, and were told that any money remaining in the account at the end of the project would be theirs (i.e. there was a fiscal incentive to save energy). The master computer then conducted real time auctions between the dwellings, based on the dial settings. At times of peak, dwellings set to "more saving" could have applicances turned of briefly to flatten the demand. The result of the one-year trial was threefold:

1. There were no interrupted load complaints
2. Peak load was reduced by up to 30%
3. The power demand was much smoother – in fact during one 12-hour period it was almost completely smooth, which is virtually unheard of!

Kevin noted that Smart Grids may not necessarily cut bills, but they can make a difference in power quality and infrastructure use efficiency. He also noted that it is expensive to install such technologies in the house and perhaps in the short term better gains might be had through smart control of the T&D infrastructure.

Hype and overselling has been a key feature of Smart Grids and fears about invasion of privacy (e.g. the Government is controlling your AC unit) or overstated benefits (e.g. a report estimated vehicle to grid technologies could earn EV owners up to $6,000 per annum, when the figure is likely to be closer to $50) have set its reputation back somewhat.

Our final appointment was a social engagement in the hotel bar with Craig Gannett , a local lawyer working in the field of renewable energy.

All in all a fantastic trip with some great highlights! Many thanks to the US Embassy in London and the US State Department (and ultimately the US tax payer) for hosting us and to the various local bodies in Washington, Denver and Seattle who arranged the programme. I’m absolutely sure that all I’ve learned will be useful in the future, although right now I haven’t quite worked out what to apply it to!

Climate Change and Alternative Energy Program - Part 5

Our first of four meetings was with Climate Solutions (CS). They are a not for profit organisation seeking practical solutions to climate change in the Pacific North West (Washington, Idaho, Oregon and Montana). CS is funded by Foundation money and contributions from other organisations such as industry.

NOTE: Whilst Idaho is included, they are not active because they have a staunch Republican Governor - it was quite obvious to us that they are only included because they border with Montana and therefore it would be odd if they were excluded.

CS reiterated many of the points we have already heard regarding the state of play of climate legislation and also the fact that much of the recovery funds is going to large companies rather than SMEs.

CS are engaged in a number of activities in partnership with others. An example is a recently launched report "Carbon free prosperity 2025" which highlights opportunities for the NW alongside a refreshingly honest approach to capacity to deliver.

CS are engaged with an organisation, New Energy Solutions, to develop energy efficiency strategies bespoke to different communities. For example they are working with high end (middle class) and lower end (manufacturing) communities to understand and implement measures that will be most effective in efficiency gains. For example, in the high end communities, people prefer a whole house service, delivered by trusted tradesmen.

CS also work at the Federal level also, keeping up to date on current policy. They have found that the best mechanism to have impact is to cultivate relationships with stakeholders who can access Senators. One such group is Business Leaders for Climate Change which comprises over 100 business leaders.

Interestingly CS had a better handle on policy impacts than I am used to seeing. For example, their work contributed to Republican Senators voting for the Waxman - Markey Bill.

Our next visit was to an SME - Bionavitas. The company specialises in technology to grow algal biomass. Their basic technology is to use fibre optic cables to permeate light through algae growth tanks resulting in a greatly enhanced (factor of 10) yield per unit light.

The company is founded and funded by a board of business angels, of which there are many in Washington (for example Microsoft started here).

Whilst Bionavitas is interested in biofuels, their core business is remediation. Washington State has a number of phosphorus mines which are leaching selenium into water sources causing downstream problems. Bionavitas are growing algae that remove and fix selenium and filtering the water.

Another profitable line is to grow astaxanthin producing algae. Astaxanthin is the nutrient that turns salmon flesh pink (it's found in shrimp etc) and is a valuable commodity for fish farms.

The CEO noted that it is difficult to raise funds from Federal money as the application process is complicated and long (100 page plus proposals). Some recovery money is slightly easier to access.

Our final meeting was with Democratic State Representative John McCoy.

Washington State has 49 districts and each or these has two Representatives (98 total) and one Senator. The legislative system is similar to Congress in that legislation must pass through both houses. There is a Governor who signs off the final bill. Don't get confused here with the 2 senators and several representatives who sit in Congress in DC and represent Washington…we did!

John is Chair of the Committee on Transport, Energy and Climate Change and was therefore knowledgeable on all the issues we had previously heard about. He agreed with us that the numerous utility companies did not make for easy application of legislation and initiatives in energy and climate change and hinted he would like a single state utility to do everything. Of course, as a realist, he was sceptical about this ever happening, but has commissioned some university research to examine the possibility.

There is interest in a feed in tariff type mechanism, which is often called a Standard Offer Contract. The idea is to enter into a contract for say 20 years with a price of unit electricity delivered based on the technology and with allowance for a small profit by end of contract. There are a large number of issues with this proposal at both federal and state level, so I wouldn't expect to see any movement soon.

We also learned that the utility penalty of $50 per MW for missing RPS is to be paid to State funds and will be used to deploy new renewable technologies or energy efficiency measures.

Washington State has a silicon business providing materials for solar PV and is interested in bringing other aspects of the supply chain to the State. There is also interest from Boeing on biofuels and wind power. There is also interest in electric vehicles and there is ongoing work on the recharging infrastructure.

Our final appointment of the day was dinner with Joe McDermott, a State Senator, who was kind enough to answer all my questions about the political system. I’ll not summarise this here, but feel free to ask me about it.

Climate Change and Energy Program - Part 4

Tuesday 2nd November

On Tuesday we spent a day at Tacoma Power (TP), a municipal (public) owned energy company established in1893. TP serves 160,000 customers and proved to be an interesting model to explore what we previously learned at FERC.

TP is a very low carbon company, deriving the majority of their energy from hydro power - a commodity that Washington State is blessed with. TP only produces half the energy it requires, the rest it buys from Bonneville Power Administration - a large DoE agency based in the Pacific North West that runs a number of Federal hydro dams and also a nuclear power plant.

Stepping back for a minute, it is clear that Washington State is a good example of the complexity of the US electricity system. It has numerous Public Owned Utilities (POUs) and Investor Owned Utilities (IOUs) and also Rural Cooperatives. The T&D infrastructure is owned by numerous players (including all of the above) and there is significant inter-company energy trading. As we have heard previously there is a Renewable Power Standard (RPS) in place in the State, which requires 15% electricity to be derived from Renewables by 2020_on top_ of what is already produced. Energy efficiency measures do count toward this, although as discussed below, some measures do not.

As already noted, TP portfolio is almost exclusively hydro power and already they have a surplus, so building additional renewable power is uneconomical. Therefore TP propose, in the most part, to achieve the RES through efficiency measures, which they call conservation. They also see this strategy as a means to avoid building significant new power in the future. They noted that current demand grows about 2% per year.

A quick aside here - Washington State has considerable wind resources and these are being exploited by other companies to meet RES. Already this has resulted, on windy days, in an excess if power on the market. Hydro companies must generate to moderate river flow, and in this situation it has resulted in them paying customers to accept power that they need to dump on the system. This is something that we might expect to see in the UK as wind power levels come up.

Returning to conservation, TP has a conservation pathway to meet their RPS obligation which boils down to monthly aspirations. They have three broad initiatives ongoing which are industrial, domestic and NEEA. Broadly speaking the first two include efficiency measures we have previously heard about such as low energy lights, reduced cost for efficient HVAC equipment, work with large companies on efficiency projects and preferential customer rates on energy star whites goods. NEEA (the North West Energy Alliance) is a Trade Association that numerous energy utilities pay fees to in return for a share of their large energy efficiency projects (such as hospital energy efficiency). Broadly speaking it seemed that TP were on track to meet the RPS. A good job as there is a $50 per MW fine for missing the target! They were aware that they are hitting the low hanging fruit and that more difficult things will have to be examined in the future.

Curiously, behavioural measures, such as advertising campaigns, even if they result in lower energy usage, do not count toward the RES target, which to me seemed completely perverse. I’ve asked a few people about this and it turns out that this is a consequence of the poorly written Public Bill that passed into legislation. It appears that Bills can only be changed after two years, and the first time they tried to change this bill in the State it failed to pass through the legislative process (in other words it didn’t get the majority vote). This means it’ll have to wait until next year.

TP have a smart meter project ongoing and have rolled it out to 16,000 customers. Communication is based on fibre optics and they have actually started a cable and broadband company to take advantage of the fact they are laying the cable anyway. This system has enabled a pay as you go tariff for customers on the poverty line (which comprise 40% of their customer base!). The system allows customers to buy credit (as little as $5 at a time) and then warns them when it's time to top up (they will be cut of off if they don't pay). In contrast to the UK system, this system works out cheaper for customers, as service charges are based on how much power is used.

We also had the opportunity to visit one of TPs hydro projects, which was great fun. We learned that in some of the dam systems where you might have five dams in a cascade on one river, it may be the case that each project is owned by a different company, meaning that there has to be close collaboration to regulate river flow (e.g. one company cannot generate flat out if others don't want the flow).

A final point - as a POU, TP are not supposed to make a profit. It's OK for them to have a surplus as long as the money is reinvested into necessary projects. This means that potentially investment in infrastructure is possible, albeit at a slow rate. Obviously this isn't necessarily the case for IOUs.

Climate Change and Alternative Energy Program - Part 3

Finally Denver is living up to its reputation as a 300 sunny days a year city – it’s a beautiful morning. Yesterday we had three great meetings, starting at the Governors’ Energy Office.

Colorado’s Governor, Bill Ritter, is a fan of renewable energy, and there are good reasons for him to be so in Colorado. The State has good wind and solar resources and is also a farming and forestry State. The presence of a number of national laboratories, including NREL, and a number of Universities, means that there is a highly educated and motivated workforce and good support for cleantech businesses. Colorado has a Climate Change Plan (20% GHG reduction by 2020 based on 2005 levels) and also a Renewable Energy Standard (RES, 20% renewable power by 2020). Interestingly the RES was then result of a populous movement – a bottom-up demand rather than a top-down one.

In case it’s not clear, Standards in America, like the RES, are targets that must be met. In the case of Colorado, consumers are protected from steep price hikes by a cap on the maximum increase on energy bills of 2%. If measures would take the price above this, the obligation on suppliers is removed.

Colorado, like all States, has received Recovery Funds. In this case the annual energy budget has risen from $10M to $90M. The majority of this fund is being deployed towards weatherisation of homes (insulation and the like). The increase means that up to $6K can be spent on homes (up from $2K) and the qualifying income bracket has been increased so that more homes can be refurbished. Also energy companies have schemes such as low-carbon design assistance for new buildings and also price reduction on best in class technologies for business such as fridges.

Colorado is aggressively promoting itself to companies and has had major success in attracting wind companies (including Vestas) and solar companies. Companies are offered tax incentives and help with staffing if they move to Colorado.

There is a forthcoming Renewable Energy Deployment Initiative which has mapped out Colorado’s energy priorities, which are essentially:

• More investment in wind and solar
• Greater emphasis on energy efficiency
• Improved HV transmission infrastructure
• Coal power (Colorado has significant coal resources)
• Natural gas development and its integration in a high RE grid

After the Governors’ office we moved a couple of blocks over to meet with the Western Governors’ Association (WGA). As you are probably aware, in the absence of National action on global warming, individual States, such have California, have taken it upon themselves to commit to action. Additionally, groups of States have cooperated, and the WGA is an example of this.

WGA represents 19 Western States, including Colorado, Washington (which we visit on Monday) and California. Such associations are a good way to “beat up on” Federal Government and are also a route to explore climate change measures such as GHG cap and trade schemes. Currently a number of Western States and also four Canadian Provinces (who have autonomy to set law) are exploring setting up such a system, although it’s unlikely to be operational until 2012. There are two other State collaborations in the US, a mid-West group (comprising 5 States) and a North East (comprising 13 States) how are active in developing cap and trade systems and in fact the NE market is active, although the carbon price is low (a couple of dollars per tonne).

The WGA noted the problems in building new transmission and distribution (T&D) infrastructure that we heard about in Washington DC; citing particular issues around habitats, water, NIMBYISM – all of which are typically dealt with by different authorities at both the State and Federal level. WGA are looking to carry out a project to examine the Western energy resources (and limits such as water availability) and then map out a potential transmission system to move the power around (at a size commensurate with the resource rather than the initial development). They are hoping to get around $20M to carry out this work. Once again the problems with bringing renewable electricity from the resource (i.e. the north for wind) to the demand (i.e. California) through numerous States was emphasised – there is no good model to work how pays/benefits.

We discussed the possibility of a National policy on Climate Change and once again it was apparent that this is still a ways off. One opinion was that it could be 3-5 years before there is such a policy, which means that the emphasis remains very much on State level initiatives. I should also say that WGA has an agreement on climate adaptation as a number of States, including Colorado are already seeing significant impacts, such as reduced water and forest degradation. It was noted that the rather conservative water utilities are already leading the way on adaptation measures.

Interestingly we also learned that there have been no new coal power stations built in the US since the 80’s, nor any nuclear new build. Most new power has been derived through natural gas, which there have recently been new finds nationally, improving security of supply.

I have to say that this was a really interesting meeting – lots of knowledge exchange and some opportunities for further discussions. Good luck to the WGA!

Out final meeting was with the Colorado Cleantech Industry Association (CCIA), which is a relatively new body (8 months old). The CCIA already has 115 members, 90% of which are SMEs, with clusters around smart grids, biofuels, transportation and solar. A key role of the CCIA is to keep track of policy at both the Federal level and State level, which is a pretty tough task considering so far there are only two employees!

A key priority for CCIA is investment in innovation, particularly for small companies; the State tends to prefer relationships with large companies. It was noted that the Waxman-Markey Bill contains a proposal for innovation hubs, one of which (solar, wind or energy efficiency) might well come to Colorado. It was also clear from the meeting that a there is a shortage in the executive workforce (e.g. business savvy directors etc) particularly for SMEs, which is a similar situation to the UK. There are some interesting programmes in the US to encourage skilled people into the sector, although the schemes are quite small currently.

CCIA will also be active in networking its members and encouraging technology transfer between them.

Climate Change and Alternative Energy Program Part II

Our last meeting in Washington was with the Federal Energy Regulation Commission (FERC). FERC is essentially responsible for regulating the following industries:

• Electric power
• Natural gas
• Oil pipeline
• Hydroelectric

In a jam packed meeting, we learned a huge amount. Firstly, the American energy system is completely and utterly different to the UKs. Nowhere is this more apparent than in electricity, but let me start with the simple example of natural gas. FERC tend to own and regulate the national infrastructure, such as gas stores, LNG stores and the pipelines that take these into the different States. They don’t own the infrastructure for extracting and processing the gas nor do they own or regulate the infrastructure within the State; that is regulated by the State itself. The price of gas used to be set be FERC, but is now deregulated as there is sufficient competition in the system. So the lesson here is that it’s up to individual States to distribute the gas, once it’s been delivered. This lessons, crudely, applies to most energy services – they are managed and regulated at the State level.

So, gas is fairly simple, electricity, however, is not. In fact it’s so complicated I’m going to really struggle to explain it. The role of FERC is to regulate sales from generators to distributors. Distributers then sell power to customers (which might be other distributors, in which case FERC regulates again), which is regulated by the individual States. Electricity price has never been deregulated, so the role of FERC is to ensure a “just and reasonable price” to consumers, which I think means agreeing a reasonable price for sale from the generator (and assuming that mark-ups down the chain aren’t too high).

In the whole electricity system, FERC owns virtually nothing. Almost all power plants and transmission and distribution infrastructure is either privately or State owned, and there are literally thousands of companies involved. There are basically three sorts of arrangements:

• Investor owned utilities – these date back to the days of Edison where the Federal Government allowed monopolies in return for a guarantee of universal, safe, reliable service. Curiously, the power companies did not receive payment per unit electricity, but rather had a profit based on sunk capital meaning they were encouraged to build. Apparently the rate of return was set at a rather healthy 10-11%!
• Cooperatives – These formed in low-population areas, such as farming States, where it would be expensive to lay power lines. Essentially the Federal Government offers a low cost loan (the “Rural Utilities Service”, which is paid back over time by the co-ops. The co-ops are run by a board of directors, which has in some instances lead to corruption.
• Municipal/Public Authorities – is where the State has invested in the supply and transmission and distribution infrastructure. These bodies are essentially self-regulating.

I should also mention that there are a number of Regional Transmission Organisations, where the States or private owners have pooled resources to service a number of States (so that the mnost efficient system can be developed).

Overall, the infrastructure in America is as old as it is in the UK, and it’s very difficult (because of the number of different players) to incentivise new build. Also the private/State ownership of land and T&D networks means that it is extremely difficult to put new power lines down that cross through different States as each one will want to negotiate and have the power to block progress. This means it is difficult to move wind power down from where the resource is, in the North of America, to the demand (typically on the coasts).

The market for electricity is somewhat complicated. It’s regional/local and is typically divided into 24 1-hourly slots per day (where people bid for the next day). Both supply and demand sides bid for power (e.g. supply says I have 200MW available at 13.00 for $X, demand wants 200MW at 13.00 for $Y). Bids are matched, with cheapest dealt with first. This process continues until the gas power is reached (the most expensive/volatile) and at this point the price is set for the next day’s generation at that hour (which can make it very profitable for cheaper technologies). This sort of made my head spin!

The way the market works means that certain areas, such as New York City, which have high demand, little supply and suffer transmission congestion, can face very high spot prices. This is dealt with to a certain extent through demand management. Big users of power will get paid by suppliers if they cut back their demand within 30 minutes of a reliability warning. FERC would like to roll this out more broadly whereby users could get the market price per unit of power not used during crunch times.

It follows that there great interest in smart grids. We saw a strategy that estimated up to 20% of peak demand could be avoided through active demand management of technologies including air conditioners, fridges and electric vehicles. There are some very big plans for smart grids and FERC is currently writing a Strategy paper for Congress. NIST is currently consulting on standards for smart meters, and are open to international collaboration so if this is something you are interested in I can probably get you a contact.

Microgeneration, such as PV, have to be accepted back into the grid with the consumer typically being credited for the power exported (i.e. the meter runs backwards). I didn’t get a feel for whether there is any incentive other than this for consumers to invest in microgeneration (for example capital loans). I think probably not.

So, I’ve mainly learned that the electricity system is hugely complicated. It's a mix of state and private level companies with some cross-State relationships. Federal Government has little power over the system, other than in protecting consumers from excessive prices. If new capacity is required States have to demand and incentivise the producers to do this. Nimbyism is potent in America and is a real problem for upgrading T&D infrastructure. There are extremely ambitious plans for smart grids but it is unclear how these would be deployed.

I am writing this blog on my iPhone as we hurtle west towards Denver. I think the whole group is really looking forward to this part as not only are we visiting national laboratories but we are also going to be celebrating Halloween with American families. I'm glad I bought the Harrods chocolate with me now! We are also looking forward to a visit to the rocky mountain national park on Sunday.

UPDATE

Snowed in!

Denver is under a foot of snow! It's a real shame as it means that we can't visit NREL or indeed the Smart Grid house that we had planned.

Am currently sat in a coffee shop inside a giant sports store writing this after a chilly and slushy walk through a rather beautiful Denver.

Our hotel, the Brown Palace is magnificent, it's 120 years old (which is old over here) and features a superb cigar bar (not that I've been in there, honestly) and a superb, but jaw droppingly expensive breakfast.

Hopefully the weather will clear tomorrow so that we can visit the State energy team at the state.

UPDATE 2

Weather looks much better today (Friday), so the visits are on. This should be really interesting to see how the individual State deals with energy policy. More to follow...

Climate Change and Alternative Energy Program Part I

Wednesday 27th October

Greetings from Washington DC!

I’ve been here since Sunday 25th, but thanks to a rather busy business and social programme I am only just able to commit some text to this blog I promised to deliver. My brain is a bit fried so I apologise if this doesn’t make perfect sense (not that I often make perfect sense…). If you remember, I am here on the Climate Change and Energy Program, which is sponsored by the US State Department. Our intrepid band of travellers comprises seven people representing DECC, UKERC (that’s me by the way), Edinburgh University, Sustainable Development Commission, the Welsh Assembly, the Nuclear Industry Association and House of Commons ECC Select Committee. We’re here, as reasonably early career people, to learn about how things get done here in America. The Washington DC programme is focussing on Capitol Hill and on the passage of the various Climate Change Bills through the two Houses and also to some extent on how the recovery funds are being deployed.

So far we have met with policy think tanks, the Department of Energy, staff for a Republican Senator and the Environment Protection Agency. I haven’t got time to delve into the details, and I don’t want to get in trouble for attributing comments, so I’m going to keep this extremely high level and make just a few observations. The fact that it’s 30 minutes until dinner has nothing to do with it at all…

1) Don’t get your hopes up about Copenhagen. The strong message is that there won’t be a global deal at Copenhagen – I’m sure that this isn’t a massive surprise to most. There are a number of reasons, but key is that no domestic US Climate Change Bills will be ready in time. Currently, there appear to be three documents circulating:

• The Waxman-Markley Bill, which has been passed by the House of Representatives (you need to get through both Houses before something can become law, like in the UK).
• The Boxer-Kerry Bill, which is the new Bill, which is currently being discussed at the Senate.
• The Bingaman Bill, which is also being discussed in the Senate

I daren’t get into details on these as they are all extremely complicated (the first runs to 1400 pages or so), but in essence most rely on a cap and trade system with permits (to emit GHGs) either allocated (e.g. current EU ETS) or 100% auctioned (e.g. future EU ETS). At the moment, allocation is favoured in the Bills, but many people we have talked with would prefer 100% auctioning. In the meantime, EPA is starting to collect data on GHGs from the relevant industries (those emitting more than 25,000 tonnes per year), which is compliant with Kyoto reporting. The main point is that there isn’t any hope of any of these Bills getting through the system before December, and without a domestic policy there isn’t a hope of signing up to a global agreement.

It’s not wholly negative as there is optimism that some of the really tricky elements that could lead to a global agreement could be cracked in Copenhagen, paving the way for agreement.

2) There is a lot of recovery money sloshing around. For example we have learned that the DoE budget for low carbon technologies in 2009 was $5.5bn – that is some serious cash. I did a back of an envelope calculation and I reckon that this (on a per capita basis) is the equivalent of an injection of £611M into the UK. Remember that the budget of the ETI is around £600M over 10 years; so this, for example, would represent a 10-fold increase for a given year, and likely the same again the following year.

There are some interesting issues over how the money can be spent, since it all needs to be spent (or committed) over 2-years. From what I’ve seen, there will be numerous big projects, kind of similar to ETI projects, with a focus on delivering products to market within 3-5 years. I think we’ll find out more about these when we visit the National Renewable Energy Laboratory (NREL) in Denver on Thursday.

3) There is a Plan B. If none of the Climate Change Bills pass the Houses, then the EPA does have the power to regulate GHGs under the Clean Air Act, because they represent a hazard to human health. Because this approach would be clunky, bureaucratic and prone to legal challenges, it is far from ideal, but there is work ongoing to set it up as a fall back.

I do hope in a later post to touch upon a “Green Bank” proposal and also the way in which things seem to get done in the Senate, but haven’t the time right now.

We fly out to Denver today where we will see some of the national research laboratories and also learn about State level policy and politics.

UKERC Energy 2050 report launched

This week I honestly thought there was no going to be no chance for me to get a newsletter out as today is the only day I've been in the office. However, there has simply been too much going on for me not to broadcast it.

Of course the most important event was the launch of the UKERC 2050 Energy report yesterday. Nearly 350 people were registered for the event and over 200 attended. The audience were thrilled by a succession of talks by the authors and insightful commentary by invited guests. The audience were provoked by a series of electronic polls an there were some very interesting answers. In due course we'll put these on the website, but as taster we found that 72% of our audience thought that the UK would achieve only a 60% or lower reduction in carbon emissions by 2050, despite the fact that 31% believed that a >90% emissions reduction was technically and economically feasible. There was also a full and frank discussion between the audience and speakers and I know that we have gleaned a number of excellent ideas for research in Phase II.

I'm sure some of you are interested in what the report actually says, so I have repeated the key messages, summarised by Professor Jim Skea, below:

• Achieving a resilient low-carbon energy system in the UK is technically and economically feasible at an affordable cost
• There are multiple pathways to a low-carbon economy. A key trade-off is the speed of reduction in energy demand versus the decarbonisation of energy supply
• Driving down energy demand plays brings multiple benefits. It insures against: The possible failure of key technologies to deliver; Social resistance to the use of certain supply side technologies; and Price shocks and import dependence
• Aggressive promotion of energy efficiency and conservation technologies is the least cost means of driving down energy demand

For the detail I strongly recommend that you read the full report.

In addition to the launch event there was also a media briefing event on Wednesday organised through the Science Media Centre. This event registered a huge amount of interest and a number of stories in the popular media. I've dedicated the news section of NERN to this but for those interested the pieces in the Times (and also here), Reuters and the FT were all good.

In addition to the UKERC 2050 report launch (and the following celebrations) this week also saw the last workshop of Carbon Crucible. Our participants worked on their project proposal in a workshop in Oxford and have generated 14 ideas so far. At UKERC and NESTA we are now turning our attention to how we might continue Carbon Crucible in the future. If anyone has any ideas for UK, EU or international funding schemes that we might tap into then please them to me. You can also post me large bags of money as well if you feel so inclined…

Elsewhere in the news I'm sure many of you will have seen the press release from DECC regarding carbon capture and storage. The intent can be summarised as follows - No new coal without CCS demonstration from day one. Alongside the Government's ongoing competition to build a post-combustion demonstrator, up to three further projects including pre-combustion technology, will be funded by a new levy mechanism. This strikes me as a major new development and a very clear message about the future of coal.