In the early days of 2008, the "smart" money in big time investing was on mortgage-baked derivatives. In small-time investing, the "smart" money was in Bernie Madoff's funds. When both those markets blew up later that year, people wondered how the smart money was so dumb -- especially given that there was plenty of prior warning about mortgage-backed derivatives and Madoff. Today, the "smart" money in environmental investing is on renewable energy -- wind and solar. This though there is plenty of proof that wind and solar cannot reduce carbon pollution. In this provocative presentation, energy and environment expert Steve Aplin explains why the "smart" environment money today is as dumb as the "smart" money in 2008.

1. Gretzky and the carbon puck:
fighting carbon and climate
change in Ontario and the world
PRESENTATION BY STEVE APLIN, THE HDP GROUP INC.
HDP

2. Gretzky and the carbon puck: nuclear power in Ontario and the world
To chase or anticipate the puck
Groupthink: chase the puck
Gretzky: anticipate the puck
Groupthink: some noteworthy examples:
◦August 2008 (major financial investors): “mortgage­backed
securities are the wave of the future.”
◦August 2008 (small but well­connected investors): “get your
money into one of Bernie Madoff’s funds.”
Why not? Everyone says it, everyone’s doing it.
—2—
HDP

3. Gretzky and the carbon puck: nuclear power in Ontario and the world
Part 1: The United Nations
Climate Summit, the carbon puck
 Unprecedented public action on the issue of climate change: New York
and elsewhere, September 20.
 This followed years of growing public awareness.
 Climate change now a regular major focus of world media.
 Man­made carbon’s link to global warming “virtually certain”: IPCC
 Man­made carbon increasingly linked in public mind to storms in the
news.
—3—
HDP

4. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Unprecedented public awareness
of climate change as a global
issue
 Does this awareness translate into policy that can affect industries?
 Ask TransCanada.
 Ask Enbridge.
—4—
HDP

5. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
But awareness is wide, not deep
 Virtually no reportage on actual numbers.
 Very few members of the public know the carbon numbers.
 Carbon literacy lags awareness of the general problem.
—5—
HDP

6. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Highlights of the Climate Summit
 Reaffirmation of commitment to the Green Climate Fund, a
mechanism (Copenhagen) through which developed countries help
finance green projects in developing countries. Target size: US$15
billion.
 Reaffirmation to commitment to the 2° C temperature rise target, to be
reached by 2020.
 U.N. says this requires a global CO2 emission reduction of at least 6
billion tons by 2020.
 A renewed call to put a price on carbon emissions.
—6—
HDP

7. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Global emissions reduction of 6
billion tons by 2020?
—7—
HDP

8. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
It takes 7.8 billion tons of CO2 to
increase atmospheric
concentration by 1 part per
million
 So the 2020 target of 6 billion tons calls for a reduction of an amount
that is less than that required to raise global concentrations by 1 ppm.
 We’re already increasing concentrations by 2 ppm per year.
 Can we reduce CO2 emissions by even 6 billion tons by 2020?
—8—
HDP

9. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Nearly all energy
recommendations from Climate
Summit focused on renewable
energy
 i.e., electricity generation, by wind turbines and solar panels.
 Can wind turbines and solar panels make enough electricity to reduce
power generation CO2 emissions by 6 billion tons by 2020?
 ... let alone the electricity required to convert an appreciable portion of
the automobile fleet to plug­in electric?
 Ambitious, but let’s see what wind’s role was in the history of the grid.
—9—
HDP

10. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Grid 1.0 and 2.0: how the world
electrified
 Via the Central Station grid model: geographically huge grid, large
generators.
 Because electrical power was a social commodity.
 Only economically workable model: reliable, affordable, and viable for
the utility.
 Required large reliable generators: economies of scale.
 By mid­1900s, most countries had electrified on this model.
—10—
HDP

11. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Grid 2.0: mid-century demand
spike
 Again, central station (continued).
 Same social criteria: reliable, affordable, viable for utility.
 ... with a new kind of heat engine: nuclear­powered.
 Within ~25 years, nuclear entered electricity markets:
 Ontario, 20 reactors
 France, 58 reactors
 U.S., 104 reactors
 BUT NO WIND!
—11—
HDP

12. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Why no wind in Grid 1.0 and 2.0?
 Not because utilities were unaware of wind.
 Not because wind generation technology did not exist.
 Because wind is not efficient.
 In Ontario, wind capacity factor is ~30 percent.
 Wind’s poor capacity factor makes it inefficient at generating power
and a poor money maker.
 Wind does not fulfil the criteria for the social bargain for electricity: it
is not reliable, or cheap for customers, or cost­viable for the utility.
—12—
HDP

13. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Same as in merchant shipping
—13—
HDP

14. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Today, Grid 3.0: the Carbon
Criterion
 The U.N. Climate Summit in September.
 “Germany’s ... clean energy transition... has turned nearly one­third of
the country’s electricity production green in just over 10 years.”
 Really?
—14—
HDP

15. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Wind and solar power in the real
world: the case of Germany
 German electricity generation in 2011 was 602 billion kWh.
 Down from 622 billion in 2010.
 Carbon dioxide output from electricity generation was...
 ~ 325 million tons.
 37,100 tons per hour—enough to fill Rogers Centre 13 times PER
HOUR (at 25° C).
 Germany grid electricity CIPK in 2011: ~540 grams. Ontario’s right
now is ...
 ... that was AFTER unprecedented build­out of wind turbines and
solar panels.
—15—
HDP

16. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
—16—
HDP

17. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Value for money?
—17—
HDP

18. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
After 14 years of renewable
energy legislation, and
unprecedented wind/solar
investment, Germany has made
no progress on cutting CO2 from
power generation!
 In fact, has gone backwards.
—18—
HDP

19. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
Why are Germany’s electricity-
generation CO2 emissions going
up?
 Because Germany is phasing out nuclear power.
 Nuclear down, coal up.
—19—
HDP

20. Nuclear Power in the Age of Climate Change Part 1: The United Nations Climate Summit, the carbon puck
So the answer is NO: the world
cannot reduce CO2 by 6 billion
tons by 2020 through investments
in wind and solar
 The emphasis on “renewable” energy, wind and solar, is mistaken.
 The pack is chasing the puck.
 Where’s Gretzky?
—20—
HDP

21. Gretzky and the carbon puck: nuclear power in Ontario and the world
Part 2: Anticipating the puck—
the case of Ontario
 Ontario CO2 emissions in 2000 were 40 million tons.
 In 2013, CO2 emissions were less than 13 million tons.
 27 million ton annual reduction, the biggest in any sector anywhere in
North America.
 How was this achieved? By putting 4,000 megawatts of nuclear
generating capacity back into service.
 ... and displacing 6,000 MW of coal capacity.
—21—
HDP

22. Nuclear Power in the Age of Climate Change Part 2: Anticipating the puck— the case of Ontario
Ontario is now one of the cleanest
electricity jurisdictions in the
world
 CO2 Intensity per kilowatt­hour (CIPK) of grid electricity is about 80
grams.
 Annual CO2 emissions from ~150 billion kWh are less than 13 million
tons.
 ... and Ontario electricity is still (mostly) affordable.
—22—
HDP

23. Nuclear Power in the Age of Climate Change Part 2: Anticipating the puck— the case of Ontario
Ontario is an example of the
Social Bargain on Electricity
fulfilled, cleanly
 Power is reliable.
 It is affordable to (most) customers.
 ... and profitable for the companies that make most of the electricity.
—23—
HDP

24. Nuclear Power in the Age of Climate Change Part 2: Anticipating the puck— the case of Ontario
ECERP
Matrix
—24—
HDP
I. Dirty, cheap II. Dirty, expensive
IV. Clean, cheap III. Low carbon, expensive
Price
CO2intensity

25. Nuclear Power in the Age of Climate Change Part 2: Anticipating the puck— the case of Ontario
How does Ontario compare?
—25—
HDP

26. Nuclear Power in the Age of Climate Change Part 2: Anticipating the puck— the case of Ontario
Ontario is in Quadrant IV of the
Electricity Carbon Emission Retail
Price Matrix
 i.e., the clean, affordable electricity category.
 Along with France, Sweden, Switzerland, Finland...
 ... countries with significant amounts of nuclear contribution to the
grid.
 ALL countries should be in Quadrant IV.
 Only Quadrant IV fulfils the Social Bargain on Electricity in the Age
of Climate Change.
—26—
HDP

27. Nuclear Power in the Age of Climate Change Part 2: Anticipating the puck— the case of Ontario
Who’s the Gretzky player in this
game? We are!
 ... along with France, Sweden, Switzerland, Finland.
 But conventional—puck­chaser—wisdom says we are a bunch of
hapless peewees!
 Let’s stop chasing the puck and look at how the game is developing.
 What came out of the U.N. Climate Summit? GCF, two­degree limit
(i.e., 6 billion ton reduction by 2020), and a PRICE ON CARBON.
 A carbon price will hurt Q1 and Q2 jurisdictions.
 ... like the ones the puck­chasers say we should copy.
—27—
HDP

28. Gretzky and the carbon puck: nuclear power in Ontario and the world
Part 3: The Social Cost of Carbon
 Let’s use recently affirmed US$37 per ton ($35 Canadian).
 What does SCC do to QIV jurisdictions?
 Let’s look at August 25 31 in Ontario.‒
—28—
HDP

29. Nuclear Power in the Age of Climate Change Part 3: The Social Cost of Carbon
Gas-fired generation, Ontario, Aug
25 31 2014‒
—29—
HDP

30. Nuclear Power in the Age of Climate Change Part 3: The Social Cost of Carbon
CO2 emissions from <10 percent
of that week’s electricity would
have cost $5 million
 Would have added ~1.8 cents to the cost of each kWh of gas­fired
power.
—30—
HDP

31. Nuclear Power in the Age of Climate Change Part 3: The Social Cost of Carbon
What happens to QII jurisdictions
with an SCC of $37 per ton?
 For example, Germany and Denmark?
 In Germany, it adds 2 cents to the cost of electricity, so it increases to
~36 cents per kWh.
 In Denmark, pushes price to ~37 cents.
 ... and $37 is a conservative estimate of the SCC.
 An SCC of $109, the worst­case scenario, German household rates
push toward 39 cents.
 Danish, to ~40 cents.
 Would THAT get them to rethink nuclear?
—31—
HDP

32. Nuclear Power in the Age of Climate Change Part 3: The Social Cost of Carbon
Ontario in 2020
 Gas replaces Pickering for baseload.
 A hugely successful conservation campaign that results in 2,000 MW
reduction still produces more CO2 than now.
 A wind­gas grid, recommended by green lobby, generating 17 billion
less kWh than today, emits 51 million tons of CO2—38 million tons
more than today’s nuclear­dominated mix.
 Are we still in QIV, even without a price on carbon?
 NO—we’ll have moved to Quadrant II, with Germany.
 ... only much farther to the right­hand boundary.
—32—
HDP

33. Nuclear Power in the Age of Climate Change Part 3: The Social Cost of Carbon
Carbon dioxide concentration in
the global atmosphere, 2020









—33—
HDP

34. Nuclear Power in the Age of Climate Change Part 3: The Social Cost of Carbon
We must be realistic
 Global CO2 concentration is pushing 400 ppm now.
 At current rates of emissions, it will be ~412 ppm by 2020.
 If we keep chasing the puck, current rates will remain the same or
increase.
 ... unless we choose the proven route to people­friendly emission
reductions.
 Ontario electricity could be 100 percent carbon­free by 2020.
 ... if we just follow Gretzky’s example.
—34—
HDP