CarbonSignal

Yesterday’s West Australian reported on the possible revival of Perth’s hydrogen fuel cell bus fleet.

A trial of three fuel cell buses began in 2004 and concluded in 2007. The Perth hydrogen buses were three out of a total global fleet of only 33 buses, and were the only hydrogen buses in the entire Southern hemisphere.

The buses and their associated hydrogen infrastructure proved the technical capabilities of the technology in Australian conditions.

Glen Head, a director of HAC and spokesman for the Sustainable Transport Coalition of WA, was quoted in the article:

“Glen Head said the technology, which was being used more in cities such as London and Vancouver, had promise.

Mr Head said though the fuel cells needed to be imported, cost issues would never be resolved until more governments invested in the technology.”

Could hydrogen transport technology return to the streets of Australia?

There are two key themes that are laced through all recent emissions trading coverage in The Australian:

Theme 1:  Emissions trading versus carbon tax

Saturday’s editorial is essentially saying that a debate is needed to determine if the ETS is the right policy mechanism to deal with climate change, as opposed to a carbon tax.  In today’s editorial, Penny Wong points out that,

“The Howard government’s task group on emissions trading covered this issue extensively and concluded that an emissions trading scheme is the best approach. A combined state government taskforce echoed these conclusions as did the Garnaut review.”

One of our previous posts discussed the basic swings and roundabouts of carbon taxes versus carbon trading.

Do we really need to open this debate in Australia, again?

Theme 2:  Houeshold efforts to reduce emissions “will make no difference”

The Australian points out that, under a fixed national emissions cap, any action that an individual household takes to reduce their greenhouse footprint will “make no difference to stopping climate change”.

For example, a family that installs expensive solar panels on their roof will reduce their household emissions, but under a cap-and-trade scheme the total national emissions will be equivalent to the predetermined cap anyway, so what’s the point?  The article goes on to point out that the family’s solar panels will reduce the overall demand for emission permits, thereby depressing the carbon price and making it cheaper for others to pollute.

This is technically correct, but this is only half the story.

The aim of the scheme is to reduce greenhouse emissions at least cost to the entire society.  At the moment, if every household were to install solar panels on their roof that would certainly reduce emissions, but probably not at least cost to society.

People who buy solar panels, or hybrid cars, are not doing so for the cost savings.  These people are willing to pay a premium in order to lower their emissions.  They are doing a good thing, but not everyone can afford to do the same.

The proposed ETS will add a premium to the electricity tariff, and a premium to the price of a litre of petrol, therefore the ETS will slightly shorten the already long payback period on green investments.

But the fundamental truth is that rooftop solar panels and hybrid cars are beyond the financial reach of the majority of households, and are therefore unlikely to yield substantial near-term emissions cuts across the nation.  If these options only have only a marginal impact on national emissions then they will have only a marginal impact on the permit price.

On the other hand, if a heavily-polluting company finds a cost-effective way to drastically reduce emissions then their actions will also reduce the demand for emissions permits, which will in-turn reduce the premium that households have to pay for electricity and petrol.

The Government’s intention to compensate households and neutralise any increase in the petrol price with a cut to the excise distorts these price incentives.  But that’s another story altogether.

The Government has re-confirmed that emissions trading will begin in the 2010/11 financial year, and the Treasurer has now requested that the ETS inquiry which he called last week be scrapped because the “inquiry’s terms of reference had become politicised and distorted”.

It is widely anticipated that firms with permit obligations will participate in a futures market well ahead of the official scheme start date.  Futures trading is one way a firm can build some certainty into their carbon costs during the first few years of the scheme.

A number of entities are preparing a futures trading platform for Australian Emission Units.  ASX Ltd, enVex, and other market operators are preparing draft futures contracts based on the Carbon Pollution Reduction Scheme White Paper.  It is anticipated that one dominant trading platform will emerge once trading gets underway.

At the moment all parties are held up waiting for the government to release its draft legislation, which is due later this month or early next month.

Over-the-counter futures contracts could be available by the middle of 2009.

Reuters has more.

The Australian government has launched a parliamentary inquiry into emissions trading.

The Committee will inquire into the choice of emissions trading as the central policy to reduce Australia’s carbon pollution

The proposed Carbon Pollution Reduction Scheme allows firms to import 100% of their carbon permits from overseas offset projects, therefore the price of Australian Emission Units (AEUs) will be linked to the price of Certified Emissions Reductions (CERs) created through the Clean Development Mechanism.

The price of CERs has tanked in recent months, therefore AEUs will likely sell at auction for a much lower price than the government had anticipated. A lower AEU price reduces the magnitude of the price signal, reducing the effectiveness of the scheme.

One alternative to emissions trading is a carbon tax, but with the government’s draft legislation due for release later this month, it is very late in the game to start questioning the emissions trading approach.

The parliamentary inquiry will accept submissions until March 20.  More information can be found at http://www.aph.gov.au/house/committee/economics/EmissionsTradingScheme/index.htm.

Amory Lovins recently wrote a guest opinion piece for the New York Times, entitled Does a Big Economy Need Big Power Plants? Lovins is the chairman of the Rocky Mountain Institute, author of many books, and one of America’s most outspoken experts on renewables and energy efficiency.

Written with Lovins’ typical style, the column makes for great reading and is full of brilliant little sounds bites, such as this one:

“Central thermal power plants stopped getting more efficient in the 1960’s, bigger in the 1970’s, cheaper in the 1980’s, and bought in the 1990’s.”

In the article Lovins essentially argues that microgeneration within the grid is more cost-competitive than big power plants supplying a completely passive grid.  He says that scattering very small generators (gas, diesel, wind, solar, whatever) throughout the grid is the way of the future.

central thermal power plants now cost less than the grid, and are so reliable that about 98 percent to 99 percent of all power failures originate in the grid. Thus the original architecture is raising, not lowering, costs and failure rates: cheap and reliable power must now be made at or near customers.

This argument could be fundamentally flawed. Engineers intuitively know that one way to increase efficiency in a complex system is to consolidate multiple “small widgets” into one “big widget”, because each individual “small widget” brings its own parasitic losses, control issues, breakdowns, maintenance issues, etc.  For example, a thousand small 100kW coal plants will never run as efficiently as one big 100MW coal plant.

The clean energy industry is going in the same direction.  The wind industry started with 50-100kW wind turbines that you could put in your backyard, but they now build gigantic 5MW turbines.  They are built using the tallest cranes in the world, and entire roads need to be blocked for the convoys carrying massive blades, hubs and towers.  The turbines could get even bigger if the manufacturers can find new ways to transport the parts to the construction site.  So the plan for wind is not to distribute microturbines throughout the grid - it is to set aside large swaths of the land and sea for hundreds or thousands of huge turbines.

The story is similar for hydroelectric, solar concentrators, wave power, and geothermal.  Solar PV is perhaps the only exception - it makes sense to distribute large number of small solar panels, because they are relatively easy to connect to the grid and efficiency does not necessarily improve with scale.

Lovins is staunchly opposed to nuclear power but, ironically, nuclear is one of the few technologies that has the power density to replace big power plants with small-scale distributed generation (if that is indeed what we want).  As one commentator remarks:

With nuclear, the energy produced from 500 square miles of windmills can be generated with a fuel assembly that would fit in the average living room.

Perhaps Lovins didn’t get it quite right this time?

In October we announced HAC’s philosophy on Exchanging Information for Energy.  Today Google announced a new tool that could help progress this transition - the Google PowerMeter.  Based on the iGoogle gadget, the PowerMeter will provide consumers with detailed real-time data on their energy usage, potentially enabling the emergence of a Smart Grid.

Unlike most Smart Grid technologies - which use proprietary communication protocols to transmit data directly to the utility companies - the PowerMeter is focused on providing information to the consumer, in a standard format, for free.

The PowerMeter is not yet publicly available - it is currently in beta testing.  Google projects that consumer-level access to this information could enable a reduction in energy use of 5-15% per household.

Read the announcement on Google’s official blog.