Monday, 10 August 2009

Energy Fight Heats Up for White House

The ambitious effort to redirect U.S. energy policy away from fossil fuels next faces a stiff fight over a plan to put a price on carbon-dioxide emissions.

The White House early on won $42 billion in the stimulus bill for a range of renewable-energy and efficiency projects. The Environmental Protection Agency declared carbon-dioxide emissions a threat to human health.
The administration also cut a deal with auto makers to increase the average fuel economy of automobiles sold in the U.S. to 35.5 miles per gallon by 2016, four years faster than current law requires.
The House narrowly passed a climate bill in June that puts a price on carbon-dioxide emissions, but also gives away pollution permits Mr. Obama wanted to sell -- a major concession. The legislation faces an uphill climb in the Senate.
A program to entice consumers to trade in gas-guzzling "clunkers" for more-efficient new vehicles has been a hit with consumers and has cleared thousands of old sport-utility vehicles from the highways -- though there were some administrative snafus and a failure to anticipate heavy demand.—Stephen Power

The Homely Costs of Energy Conservation

A Environmental Pioneer Raises the Bar on a Green-Energy Experiment, but Can His Latest Innovations Help the Rest of Us?
Snowmass, Colo.
A quarter-century ago, in the wake of America's first energy crisis, a young scientist named Amory Lovins came to the Rocky Mountains and built himself a radical house based on a radical idea. The country could save both energy and money, he believed, by combining common sense and unconventional technology.
Mr. Lovins did achieve substantial energy savings, and many of his innovations, from better insulation to multiple-pane windows to more-efficient refrigerators, eventually became familiar fixtures in American homes.
But on the second part of Mr. Lovins's ambition -- saving money -- the calculus has been more complicated. The advances that allowed him to create a roomy home with a tiny carbon footprint came with a hefty upfront cost.
Now, Mr. Lovins has completed a renovation that he hopes will demonstrate how much more energy-efficient houses can become. But the project also serves as a reminder of the still-enormous gulf between what is technologically possible and what society is able or willing to pay for.
The 4,000-square-foot structure Mr. Lovins and his then-wife completed in 1984 looked part-cave and part-spaceship. Its 16-inch-thick stone walls kept the interior temperature fairly constant. A book-lined interior was dimly lighted with electricity from solar panels on the roof. The greenhouse that formed the central living room let in light, and it stored heat in a small jungle of plants, from guavas to coffee to bananas.
The house, which Mr. Lovins dubbed the "Banana Farm," used one-tenth the energy of a typical U.S. house of its size. Lower utility bills quickly offset the higher construction costs, saving money on heating and cooling within a year.
Since then, Mr. Lovins has become perhaps the world's most famous apostle of energy efficiency. The recipient of a MacArthur Foundation "genius grant," he co-founded the Rocky Mountain Institute, an energy and environmental think tank that has consulted with companies including Wal-Mart Stores and Ford Motor.

Energy efficiency expert Amory Lovin is putting the finishing touches on a state-of-the-art green home that produces more energy than it consumes. Jeffrey Ball reports from Aspen, Colorado.
Having seen many features the Banana Farm helped pioneer trickle down to the consumer market, the 61-year-old Mr. Lovins hopes his latest efficiency moves eventually will find widespread acceptance as well.
Most studies suggest energy efficiency is the cheapest way to start meaningfully limiting pollution by curbing growth in fossil-fuel use -- far cheaper than generating more wind or solar power.
A report last month by McKinsey & Co. concluded that the U.S. could cut its energy use 23% below the projected U.S. demand level in 2020 by boosting efficiency, and save $1.2 trillion in energy costs. But that would require immediately making expensive investments in new equipment. Other countries have subsidized and mandated those steps, and the U.S. is beginning to follow suit. But a recession is a tough time to make big changes.
Mr. Lovins is "pushing the envelope of what's possible," but "that's probably a step too far for what's practical," says Scott Nyquist, head of the global energy practice at McKinsey, which has worked with Mr. Lovins on research projects.
Mr. Nyquist is renovating his own 1930s-era house in Houston, in part to test what energy-efficiency goals are feasible and affordable. He decided that some features championed by Mr. Lovins, such as light-emitting-diode lights, remain far too expensive. "I'm being disciplined," Mr. Nyquist says. "I'm trying a different approach than Amory is."
Banana Farm 2.0, as Mr. Lovins calls his updated digs, was renovated largely with equipment donated by individuals and companies eager to be associated with the project. Mr. Lovins says he doesn't know what the two-year renovation would have cost had he had to pay the full tab. But just a few of the major items would put the retail cost of the project well beyond $150,000.
On a recent afternoon, Mr. Lovins climbed up onto his home's flat roof, an easy task because the back of the house is built into the side of a hill to take advantage of the earth's insulating power.
Laid across the roof are devices designed to capture solar energy: photovoltaic panels that convert sunlight into electricity, thermal panels that use the sun's warmth to heat water, and clear plastic tubes that funnel sunlight down into the house, where it illuminates the central hallway.
A bank of new photovoltaic panels nearly doubles the amount of solar electricity the house produces, to 9.7 kilowatts, enough for the house's needs. The panels, which were donated to Mr. Lovins, retail for about $30,000, not including installation, though tax breaks cut that price significantly.
"We are making no economic claims for Banana Farm 2.0," he says. "We deliberately brought in a bunch of cutting-edge, even bleeding-edge, stuff." Instead, he thinks that with the right government policies to spur market demand, even the most advanced green modifications could make economic sense. His role, as he sees it, is to push the limits of technology.
"Demand is the sum of a lot of negligible individual actions," he says. "When there are a lot of individuals, it isn't negligible. It adds up."
Banana Farm 2.0 isn't combustion-free. A wood-burning stove still sits near Mr. Lovins' office -- a backup heat source he hopes to abandon if the house works as planned this winter. But the new solar panels have allowed him to get rid of two devices that burned gas: a stove and a water heater.
Some of his proudest advances stem from mundane changes. He installed an electric stove made by a Swiss company that is 60% more efficient than other models he found. The savings stem partly from pots designed specifically for the stove. The pots eliminate warping that typically occurs with copper cookware, wasting heat.
He also has shaved energy use by insisting on an unconventional plumbing design. Typically, residential pipes that carry water would be ½-inch wide and turn at right angles. But that builds up friction, requiring electric pumps to work harder to propel the water. So Mr. Lovins had ¾-inch-wide pipes installed that run diagonally across ceilings and walls to minimize friction.
"If it looks pretty," he says, "it probably doesn't save energy."
For now, Banana Farm 2.0 is a showcase of what is technologically possible. Adopting some of the house's innovations on a wide scale would require huge investment and sweeping changes to governmental policy.
Still, Mr. Lovins knows that some of the most effective ways to reduce fossil-fuel use don't require groundbreaking science. As he headed out to dinner in his hybrid car on a recent evening, the Banana Farm's owner did something decidedly low-tech: He turned off the lights.
Write to Jeffrey Ball at

Government's green energy plan may cost 17 times more than its benefits

The figures are buried deep in the Government's Renewable Energy Strategy paper produced last month.

By Edmund ConwayPublished: 12:15AM BST 10 Aug 2009
The Government's plans to increase the proportion of Britain's energy generated by "green" sources is set to cost between 11 and 17 times what the change brings in economic benefits.
The figures are buried deep in the Government's Renewable Energy Strategy paper produced last month.

According to the document, while the expected cost will total around £4bn a year over the next 20 years, amounting to £57bn to £70bn, the eventual benefit in terms of the reduced carbon dioxide emissions will be only £4bn to £5bn over that entire period.
The figures make up part of the Government's impact assessment of the policies, which include plans to raise the proportion of British electricity produced by renewable sources from 5.5pc today to 30pc.
It is the Government's assessment that the non-monetary benefits of the policies will compensate for the possible £65bn shortfall, but economists are sceptical as to how much of this sum such factors can make up.
The White Paper has also calculated that household gas and electricity bills will have to rise by up to £249 a year, although Energy and Climate Change Secretary Ed Miliband has insisted that new measures to improve consumers' energy efficiency would reduce the extra cost to an average of £92 a year per home.

Buick Bets On a Hybrid To Broaden Its Appeal

With a big hand from the government, General Motors Co. plans to launch a gas-electric hybrid Buick in 2011 that owners will be able to recharge by plugging into an electrical outlet.
GM originally intended to release the hybrid technology in a Saturn model, but it is selling that brand. Its decision to make the hybrid a Buick -- a brand that historically produced large sedans favored by older drivers -- illustrates the big challenge GM faces as it slims down after its exit from bankruptcy last month.
The crossover vehicle will use a gasoline engine aided by a battery and electric motor to boost its fuel-efficiency and -- unlike current hybrids -- should see a greater increase in gas mileage when owners charge up the battery pack, GM's new product chief, Tom Stephens, said Thursday. He declined to disclose a price for the new Buick or expected sales.
The technology is different from that GM is developing for the Chevrolet Volt, a compact car due next year. The Volt will be powered all the time by an electric motor and plug-in batteries, with a small gasoline engine used to recharge the batteries when they run down.
The Buick hybrid is expected to achieve in excess of 40 miles per gallon of gas, double the performance of a similarly sized model such as the Chevy Equinox in city driving.
The Volt, because it is supposed to drive up to 40 miles on battery power alone before the gas engine helps out, is expected to travel about 1,000 miles on a tank of gas.

To create the new Buick, GM said it will tap government funds aimed at jump-starting an electric-car industry. GM is 60% owned by the government after its bankruptcy reorganization.
The auto maker is in the process of shedding Pontiac, Hummer, Saab and Saturn and will go forward with Chevrolet, Cadillac, GMC and Buick.
To make the new formula work, GM will have to inject more excitement into Buick, expanding its appeal and widening its range of models to attract younger customers.
Along with the hybrid, which will be part of a new line of Buick crossovers, GM also now plans to produce an upscale compact car that will be sold as a Buick. The compact would put Buick into a segment of the market where it would compete with other premium small cars, such as the BMW 1 Series and Acura TSX.
Wondering what it's like to buy a luxury electric car? MarketWatch's Steve Gelsi heads to the Tesla showroom in New York City to find out.
The company plans to apply for a loan of about $500 million from the Department of Energy's $25 billion program to fund the production of more fuel-efficient vehicles. Most of that loan would be devoted to the Buick project, GM said. It will be GM's fourth application under the program and bring the total GM is seeking from the program to $11 billion.
The auto maker released a sketch of the new Buick at an industry conference in northern Michigan, and said the Energy Department would take the first 69 vehicles it produces.
GM and battery supplier Compact Power Inc. also plan to tap about $400 million in stimulus money the Obama administration has set aside for advanced battery production.
Mr. Stephens said government funding is "very important" to the production of the yet-to-be-named Buick and referred to the government as "our partner" on the project, saying the relationship will help minimize expected losses on the vehicle.
GM has offered hybrid systems on several models but none has generated significant sales. The Buick will go up against other plug-in hybrids and electric cars headed to the U.S. market.
Toyota Motor Corp. has been working on a plug-in version of its Prius hybrid. Nissan Motor Co. is aiming to launch an electric model called the Leaf that is also benefiting from federal loans.
Mr. Stephens and other GM managers are under pressure from the company's new board to rush the introduction of vehicles to try to halt a decades-long market share decline. He said GM's recent bankruptcy and the government's capital injection have allowed the company to speed up funding for new-product programs.—Sharon Terlep contributed to this article.
Write to John D. Stoll at

EDF power price curb could hit UK nuclear reactor plans

Robin Pagnamenta, Energy Editor
Nuclear reactors that are essential for Britain’s future energy needs are in jeopardy, according to analysts, because EDF will not be able to afford to build them.
Pierre Gadonneix, chief executive of EDF, wants electricity prices to be increased by 20 per cent over three to four years to fund investments. Last week, however, the French Government proposed a 2.3 per cent average increase in electricity prices on regulated tariffs over the next three years.
EDF’s four proposed British nuclear reactors, including Hinkley Point, Somerset, where work is due to start in 2013, could become casualties of the decision.
Peter Wirtz, European utilities analyst at West LB in Frankfurt, said: “If EDF cannot finance its investment programme they will have to think about cutting back some of their plans.”
Nick Campbell, an energy analyst at Inenco, said: “This could be extremely detrimental for the future security of UK energy and lead to an increase in wholesale prices. The effect could ripple across the English Channel and lead to a delay or mothballing of EDF’s four proposed UK nuclear reactors.
"If EDF is struggling to cover costs at home, it is unlikely they will have the funds to take on such large-scale projects abroad.”
EDF’s proposed reactors have been seen as crucial to counteract the loss of generation capacity in Britain from 2015 because of the decommissioning of nuclear reactors and coal-fired units due to be retired from service.
The French Government’s pricing proposal to the Commission de RĂ©gulation de l’Energie, the French regulator, could be agreed as early as August 15, according to French sources.
EDF, which operates 58 reactors in France, said that it needed to increase prices to finance planned investments of €7.5 billion (£6.4 billion) in 2009, €2.5 billion more than in 2008.
The group has already announced plans to sell €5 billion of assets by the end of 2010 to help to fund the programme.
Sofia Savvantidou, European utilities analyst for Citigroup, said that there were other options open to EDF: “If necessary, they could sell off stakes in their nuclear plants to financial investors or infrastructure funds. It’s not an immediate threat, but obviously if we don’t see an acceleration of the tariff changes then that becomes a problem.”
She said that the 2.3 per cent tariff increase would raise €560 million more for EDF, whereas a 20 per cent tariff increase would be worth up to €5 billion.
A spokeswoman for EDF said that the group’s activities in France were entirely separate from Britain. She said that planned nuclear investments in Britain would be “self-financing” but declined to comment further.

Welsh Assembly plans to impose charge for supermarket carrier bags

Ben Webster Environment Editor
Wales is to become the first part of Britain to ban free carrier bags after deciding that efforts by supermarkets to cut waste have proved ineffective.
All shops, market stalls and takeaways in Wales will be obliged from the end of next year to charge up to 15p each for plastic or paper bags.
Jane Davidson, the Welsh Environment Minister, told The Times that the revenue would go to a new independent body, which would spend the money on local environmental projects. She admitted that a small number of people might switch to shops in England, where there are no plans to charge for carrier bags.
She said that tough action was necessary, because many shoppers were failing “to embrace the environmental message”, despite incentives such as loyalty card points for bringing their own bags. Ms Davidson, a Labour member of the Welsh Assembly’s ruling Labour-Plaid Cymru coalition, hopes the ban will embarrass her counterparts in England, Scotland and Northern Ireland into similar action.
Wales is planning to use a little-known clause in last year’s Climate Change Act, which enables devolved governments to outlaw free bags.
Ms Davidson said: “Single-use bags are a legacy of the throwaway society from the 1980s. We want to encourage people to think about what they do. All the other ministers are still signed up to the voluntary agenda. You will see a different message from me.”
Last week The Times revealed that Tesco had published misleading figures giving the impression that it had a met a voluntary target to halve the use of plastic bags in three years. Seven supermarket chains reported last month that the total number of free bags they had issued had fallen by 48 per cent to 450 million a month in the three years to last May.
The figures masked that Marks & Spencer, the only chain to charge for bags, had made much faster progress than its rivals. It cut bag use by 83 per cent after introducing a 5p charge last year. Supermarkets have been lobbying furiously against a ban because they fear that compulsory charging would be the beginning of much tighter packaging restrictions.
Ms Davidson said that banning free bags would encourage a wider shift to a less wasteful society. She was considering a charge of between 5p and 15p, but hinted that she favoured the upper end of the range.
The Republic of Ireland cut the number of bags by 90 per cent — from 328 bags per person per year to 21 — after introducing a 15 cents (13p) charge in 2002. In 2007 it increased the charge to 22 cents after bag use rose to 31 per person.
Jane Milne, environment director of the British Retail Consortium, said that the industry had no deadline for reducing bags below the present level. “We have an aspiration to reduce them by 70 per cent [on 2006 levels], but we haven’t set a date.”
The Department for Environment, Food and Rural Affairs said: “All options are on the table, but we don’t think [charging] is right at this stage, particularly in the economic climate.”