Michigan Energy Forum - February 6, 2014 - A Pragmatic Approach to Climate Change

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  • Fig. 5 Cumulative changes in the mass of (left axis) the EAIS, WAIS, and APIS (top) and GrIS and AIS and the combined change of the AIS and GrIS (bottomAlso shown is the equivalent global sea-level contribution (right axis). 360 Gt of ice corresponds to 1 mm of sea-level rise.
  • Renewable energy is rapidly becoming cheaper than conventional energy. Here we focus on electricity, which is moving faster than liquid fuels.Latest contract entered into by the City of Holland – starts at $45 per MWH (4.5 cents a kilowatt hour) and slowly rises to $60 per MWH by 2022. $45/MWH is far lower than what it costs Consumers and Detroit Edison to generate electricity with OLD conventional generation and purchased power - CMS $74.40/MWH and DTE $68.60/MWH. Expiration of the Production Tax Credit will add $7/MWH to the cost of wind power contracts – Holland would be $53/MWH.Some renewables, especially wind and biomass gasification, are now competitive with conventional electricity generation, and utility-scale solar is expected to be competitive in Michigan before the end of this decade. These resources are primarily rural and compatible with farming, so this is a significant business opportunity for farmers and rural communities.Generation by independent power producers reduces utility profits, so generally requires mandates or competition policy or will be choked off by utilities. Michigan currently mandates 10% renewables by 2015 of which half must be obtained from independent power producers. Proposal 3 would increase that mandate to 25% renewables by 2025. If it doesn’t pass, then this market opportunity will depend on either a legislative mandate or very aggressive competition policy.
  • Michigan Energy Forum - February 6, 2014 - A Pragmatic Approach to Climate Change

    1. 1. Michigan Energy Forum: A Pragmatic Approach to Climate Change January 6, 2014
    2. 2. Ann Arbor Spark Michigan Energy Forum Henry Pollack University of Michigan 6 February 2014
    3. 3. Four central questions: • • • • Is the climate changing? What is causing it? What will be the consequences? What should we be doing about it?
    4. 4. The 2013 IPCC Assessment “Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, sea level has risen, and the concentrations of greenhouse gases have increased.”
    5. 5. Relative to 1951-1980 mean Global surface temperature anomalies 5
    6. 6. September 1979
    7. 7. Jakobshavn Glacier and Greenland Ice Cap Circa 2003
    8. 8. Jakobshavn Glacier circa 2003 10 km
    9. 9. 40 m/day
    10. 10. Observed Antarctic Warming Trend (°C/decade) from 1957-2006 Steig, E. J. et al., Nature 457, 459-462, 2009
    11. 11. Pine Island Glacier West Antarctica 25 km 2012 2012
    12. 12. A. Shepherd et al. Science 2012; 338:1183-1189
    13. 13. Robert Rhode: Global Warming Art
    14. 14. The 2013 IPCC Assessment This evidence for human influence has grown since AR4. It is extremely likely (>95% probability) that human influence has been the dominant cause of the observed warming since the mid-20th century. century.
    15. 15. Global Anthropogenic Carbon Dioxide Emissions Boden et al., CDIAC, Oak Ridge National Laboratory (2010)
    16. 16. > 2 ppm/yr 1.5 ppm/yr < 1 ppm/yr
    17. 17. End of century The big inadvertent human experiment with Earth’s climate Today
    18. 18. Solar Cycles
    19. 19. 80 Observed Observed Scenario Projections 60 40 20 0 inches above 1992 level centimeters above 1992 level Global Mean Sea Level Rise Scenarios National Oceanic and Atmospheric Administration (2012)
    20. 20. 1 meter rise
    21. 21. 1 meter rise
    22. 22. If you do not change direction, you will likely end up where you are heading. Lao Tzu, Chinese philosopher, 6th century B.C.E.
    23. 23. 2000 2050 2100
    24. 24. A Pragmatic Approach to Climate Change Skip Pruss, Principal, 5 Lakes Energy pruss@5lakesenergy.com www.5lakesenergy.com
    25. 25.  The EIA and IEA forecast that world energy consumption will grow by over 50 percent between 2010 and 2040  2010 ◦ 500 “quads”  2040 ◦ 770 “quads”
    26. 26.      Agreement to reduce greenhouse gas emissions 192 countries are parties (United States, Canada, Andorra, South Sudan) Developed countries generally have target of 80 percent reductions by 2050 Developing countries do not have prescribed targets Capitalization of the Green Climate Fund will begin in 2014.
    27. 27. 1. 2. 3. 4. 5. 6. 7. 8. NREL, Renewable Energy Futures Study (4 Vols) 2012 - Renewable energy sources, accessed with commercially available technologies, could adequately supply 80% of total U.S. electricity generation in 2050. http://www.nrel.gov/docs/fy12osti/52409-1.pdf Deng, et al, Transition to a Fully Sustainable Global Energy System, 2012 - Sourcing 95% of global energy needs by 2050 from sustainable energy systems is technically feasible. http://www.wrec2011.com/docs/Keynote_paper-Blok.pdf RMI, Reinventing Fire 2012 - A $4.5-trillion investment would save $9.5 trillion, for a 2010net-present-valued saving of $5 trillion during 2010–2050. http://www.rmi.org/ReinventingFire United Nations IPCC, Special Report on Renewable Energy Sources and Climate Change Mitigation 2011- Multiple options exist for lowering GHG emissions from the energy systems while still satisfying the global demand for energy services. http://srren.ipccwg3.de/ International Energy Agency- Clean Energy Progress Report 2011 – A clean energy revolution is achievable through a comprehensive policy approach. http://www.iea.org/publications/freepublications/publication/name,3973,en.html WWF ECOFYS The Energy Report: 100% Renewable Energy by 2050 2011 – Global transition to clean energy sources technically feasible and economically advantageous; cost saving equilibrium by 2040; $6.5 trillion in annual savings by 2050. http://www.google.com/url?sa=t&rct=j&q=& Google – The Impact of Clean Energy Innovation 2011 – Reductions of GHG emissions by 55 – 63% with positive effects on the economy and job growth. http://www.google.org/energyinnovation/The_Impact_of_Clean_Energy_Innovation.pdf Jacobson and DeLucchi, WWS (Wind, Water, Solar) Plan (2 Vol), 2010 - Produce all new energy with WWS by 2030 and replacing the pre-existing energy by 2050. Barriers to the plan are primarily social and political, not technological or economic. http://www.sjsu.edu/people/dustin.mulvaney/courses/envs133/s2/JDEnPolicyPt1.pdf
    28. 28.  Replacement of fossil fuels for electricity, transportation, heating & cooling, and industry ◦ ◦ ◦ ◦ ◦ ◦   Technical feasibility Cost (economic feasibility) Economic impact Job creation Reliability and resiliency of power supply Availability of resources; commodity impacts Not included: Innovation, future cost reductions, political and social barriers Not included: Stranded costs
    29. 29.    80 percent by2050 renewable electricity penetration requires renewable energy capacity additions of 20–45GW per year Can be achieved with existing technologies – innovation and future cost reductions were not modeled Costs for transmission, distribution and smart-grid deployment are in line with recent expenditures ◦ Needed: $5.7 – $8.5 billion per year ◦ Actual (1995-2008) $2 – $9 billion per year   Supply chain is adequate to meet technology demand Adequate supply and demand side resources to meet hourly demand in every region under all modelled scenarios
    30. 30. • • • • • • • 3,800,000 wind turbines – 5 MW 49,000 solar thermal plants – 300 MW 40,000 solar PV plants – 300 MW 1,700,000,000 rooftop PV – .003 MW 490,000 tidal turbines – 1 MW 5,350 geothermal plants – 100 MW 900 hydroelectric plants – 1,300 MW http://www.stanford.edu/group/efmh/jacobson/Articles/I/DJEnPolicyPt2.pdf
    31. 31.         Geographical dispersion of variable distributed energy resources Use non-variable energy resources to smooth loads Demand response management to shift flexible loads Utility scale energy storage EV storage Deploy additional renewable generation resources Produce fuel sources from excess electrical resources Improved forecasting systems
    32. 32. International Energy Agency forecast in 2000: ◦ Wind capacity by 2010: 34 GW ◦ 2010 actual capacity: 200 GW World Bank China forecast in 1996: ◦ 2020: ◦ 2020:  9 GW wind 0.5 GW solar 2011 actual capacity: ◦ Wind: ◦ Solar: 62 GW 3 GW EIA Annual Energy Outlook in 2005: Projected Wind Capacity: ◦ 2025 reference Case: 11.3 GW ◦ 2025 PTC Case: 63 GW ◦ 2012 actual capacity: 60 GW Projected Solar Capacity: ◦ 2025: 400 MW ◦ 2012 actual capacity: 7.3 GW
    33. 33.     By 2020, up to 700,000 MWs of unsubsidized solar energy will be at retail price parity with grid-delivered electricity. (McKinsey & Company) Wind energy, already at wholesale cost parity in many parts of the nation, will be at or below the cost of all other new electric generation resources. Over 700 U.S. companies are now deriving 100 percent of their electricity from green power sources, including Intel, Kohl’s and Staples. (2013 EPA Green Power Partnership) A survey of 100 U.S. companies with revenues in excess of $1 billion found that 60% are implementing energy efficiency measures and 51% intend to increase company-owned renewable generation. (Ernst and Young 2012)
    34. 34. CE non-renewable $74.40 DTE non-renewable $68.60 City of Holland wind $45.72 www.5lakesenergy.com
    35. 35. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Market opportunities and investment trends Fossil fuel costs and market volatility Energy economics Standards and codes – ZNE Stockholder concerns Insurance and finance Distributed generation Resiliency Sustainability Environmental concerns Water availability Energy security Climate change
    36. 36.      Distributed energy resources, demand-side management technologies, and energy efficiency measures pose an existential threat to today’s utility business models. Customer adoption of DER and EE reduce utility sales and spread fixed costs among declining base of ratepayers. Investment community may react restricting access to capital in the future. Investor owned utilities (IOUs) face a “Kodak moment” IOUs must identify new business models and service paradigms Edison Electric Institute 2013
    37. 37. • • • • • • 380,000 clean energy jobs 26% of electricity generation from renewables today 40% by 2020 Most solar deployment in the world Successfully “reindustrialized” the German economy Cost of wholesale electricity going down (17% in 2012) • Bloomberg
    38. 38. www.5lakesenergy.com
    39. 39. Next Michigan Energy Forum Program: The Michigan Energy Entrepreneurial Ecosystem Moderator: Todd Nelson

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