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Metrics for evaluating energy and environmental sustainability: How to improve the current index systems?
sustainability

By Joohee Lee
April 21, 2015

Often times, it is not easy to assess performance of energy and environmental policies because it take a long time for the effects to be observed and some of them are simply difficult to quantify. A variety of efforts have been made by intergovernmental organizations, research institutes, and individual scholars to develop global indices for energy and environmental sustainability which enable users to compare relevant policy performance at a country level.

A good environmental index can serve many roles. First, it allows policy makers to fathom a changing trend of the country’s environmental performance over time and navigate future discourses over sustainability issues. It can also encourage countries to take into account trade-offs between different dimensions and develop more balanced policies. In addition, researchers can take advantage of the index by using it as a variable in empirical models and analyses. In this article, two existing indices – the Environmental Performance Index and the Energy Sustainability Index – will be introduced and reviewed in attempt to understand how they are dealing with difficulties assessing a wide spectrum of energy and environmental policies.

Environmental Performance Index
Designed by the Yale Center for Environmental Law and Policy partnered with other academic and intergovernmental entities, the Environmental Performance Index (EPI) is a metric to measure how well countries implement and perform on environmental policies. The index focuses on two broad policy objectives: protection of human health from environmental risks and protection of ecological systems [1]. The ‘environmental health’ dimension consists of three categories related to human security – health impacts, air quality, and water & sanitation. The ‘ecosystem vitality’ dimension includes categories directly related to environmental integrity – water resources, agriculture, forests, fisheries, biodiversity & habitat, and climate & energy [1]. Each category of the index is scored by one to four quantifiable indicators which reflect the level of execution and accomplishment of relevant national policies. For instance, the ‘Climate and Energy’ category is evaluated based on three indicators – trend in carbon intensity, change of trend in carbon intensity, and trend in CO2 emissions per kWh. In order to make the index fair and comparable, data for each indicator are standardized and weighted to create a policy issue score ranging from 0 to 100 (with 100 being closest to the policy target) [2]. With the overall scores integrating two objectives, the 2014 EPI indexed 178 countries having Switzerland at the top of the list same as the 2012 EPI result.

Energy Sustainability Index
With more focus on energy issues, the World Energy Council (WEC)’s Energy Sustainability Index, also known as the Energy Trilemma Index, is constructed to measure each nation’s energy policy and performance from three perspectives – energy security, energy equity, and environmental sustainability. According to the 2014 Energy Trilemma Index, Switzerland was ranked in the top place obtaining a high evaluation on the environmental sustainability category, followed by Sweden and Norway [3]. Similar to the EPI, it uses country-level data and ranks 129 countries with aggregate scores of the three dimensions. In this way, the index reveals the extent to which the country balances energy demands to deliver more sustainable energy systems [3]. A notable feature of the WEC’s index is the inclusion of ‘energy equity’ issues by measuring energy affordability and accessibility. Finding proper indicators for energy equity can be challenging because goals for energy equity are not usually quantitative and are often not on the priority list of policy makers. The WEC’s index incorporates country’s average cost of electricity (USD per kWh) and population with access to electricity (%) as indicators for energy affordability and accessibility, respectively [4].

For a more comprehensive index system
Both the Environmental Performance Index and the Energy Sustainability Index built on very comprehensive approaches for evaluation of energy and environmental performance. However, as the EPI developers point out by themselves, there is still room for improvement. For example, the current index systems do not address the environmental and social impacts of controversial policies such as nuclear power and carbon capture and storage. Although the relationship between GDP and CO2 emissions (i.e., carbon intensity) is included in both the EPI and the WEC’s index, it does not necessarily capture inequality in burden-sharing of carbon reductions across the population and countries.

By expanding the scope of the current index systems in such a way as to embrace the social equity dimension, the indices will be able to provide more meaningful insights on a country’s performance on energy and environmental policies and projects.

Notes
[1] Environmental Performance Index (EPI). (2014). 2014 Environmental Performance Index: Full Report and Analysis. Retrieved from http://epi.yale.edu/files/2014_epi_report.pdf
[2] EPI. (n.d.). The 2014 EPI Framework & Calculating the EPI. Retrieved from http://epi.yale.edu/our-methods
[3] World Energy Council (WEC). (2014). 2014 Energy Trilemma Index: Benchmarking the sustainability of national energy systems. Retrieved from http://www.worldenergy.org/wp-content/uploads/2014/11/20141105-Index-report.pdf
[4] WEC. (n.d.). The Index Methodology. Retrieved from http://www.worldenergy.org/wp-content/uploads/2013/10/Country-profile-how-to-read.pdf

Photo credit: Amy Weinfurter: Yale/CityGreen

Unconventional truth about nuclear power and technological society
Japan Nuclear

By Jeongseok Seo
April 16, 2015

It was four years ago that a single event changed the lives of people in Fukushima completely. The explosion of three nuclear reactors at the Fukushima Daiichi Nuclear Power Station forced most of the residents to abandon their long-held livelihoods. Sadly, they may not be able to return to their homes soon due to the radiation levels near the power plants which are still well above the allowable limit [1][2]. Concerns have grown further as an increasing number of young children in the region are suffering from thyroid cancer, which is considered a primary health effect from radiation exposure [3][4]. In spite of ongoing and growing problems, however, the Japanese government has been pushing to restart idled nuclear reactors, and the country’s nuclear watchdog has recently approved the restart of two reactors in south-west Japan [2].

Across the East Sea, the regulators in South Korea have also made a similar decision recently. They approved an extension in operation of a 32-year-old reactor at the Wolsong Nuclear Power Complex in southeast region of the peninsula. This reactor, the second oldest among 23 reactors in the country, has been out of operation for the last three years after having completed its design lifespan of 30 years [5]. According to the Nuclear Safety and Security Commission, the Korean government’s nuclear watchdog agency, the restart decision is based on comprehensive evaluations by experts, and the reactor passed stress and other safety tests to see if it could resist disasters, such as earthquakes [5]. However, some local residents and civic groups oppose the decision, citing its closed-door decision process and the failure of the government to disclose vital information [6].

In spite of the consequences of the reactor meltdown in Fukushima and the safety concerns about the Wolsong reactor, the decisions by the Japanese and Korean governments illustrate a characteristic of modern ‘technological society.’ According to Jacque Ellul, who analyzed the phenomenon, technological society is governed by technique, which does not just mean machines or technology but is “the totality of methods rationally arrived at and having absolute efficiency (for a given stage of development) in every field of human activity” [7]. It is built and maintained based on the principle of rationality and efficiency, and generates a belief that continuous technological advances lead to social progress. In modern societies like as Japan and South Korea, belief in the social benefits of technique is widespread, technical activities often regarded as superior to nontechnical activities, even ones intended to reflect social preferences for constraints on technical progress [9].

One anecdote illustrates how technological society operates. There was no social and economic reason to strive for nuclear power in the 1960s when the technology began use in several countries. In fact, cheaper sources of electricity supply existed with lower social risks. Nonetheless, technological societies, often without social consent, adopted nuclear power. J. Robert Oppenheimer’s remark captures modern thinking on this score: “When I saw how to do it, it was clear to me that one had to at least make the thing. The [hydrogen bomb] program … was technically so sweet that you could not argue about that” [8]. In many ways, the rise of nuclear power has been seen as a logical step in technological progress, too “sweet” at least for experts and political elites to ignore.

Supporters of nuclear power frequently rely on acclaimed values of technique, making nuclear energy an imperative rather than choice. Recent negotiations with Iran, the U.S., China, Russia, the UK and France reinforce the message: nuclear power is to be regarded as a proper desire to modernize a country’s energy system and the challenge is how to accomplish this without also realizing the ability to advance capabilities to produce nuclear weapons. A distinctly modern discourse on progress!

Notes
[1] U.S. Nuclear Regulatory Commission. Radiation Dose Limits for Individual Members of the Public. Accessed on March 11, 2015. http://www.nrc.gov/reading-rm/doc-collections/cfr/part020/part020-1301.html
[2] The Guardian. Japan remembers the 18,000 victims of 2011’s triple disaster. March 11, 2015. http://www.theguardian.com/world/2015/mar/11/japan-remembers-the-18000-victims-of-2011s-triple-disaster-fukushima
[3] Kim I.J. 2015. Child thyroid cancer increases by 200 times. March 11, 2015. http://www.ohmynews.com/NWS_Web/Tenman/report_last.aspx?CNTN_CD=A0002088659
[4] US EPA. Radiation and Health. Accessed on March 11, 2015. http://www.epa.gov/rpdweb00/understand/health_effects.html
[5] Korea Nuclear Safety and Security Commission. Accessed on March 11, 2015. http://www.nssc.go.kr/nssc/notice/report.jsp?mode=view&article_no=16871
[6] Business Korea. Growing Opposition to Decision to Re-operate Wolsong-1 Nuclear Power Plant. March 3, 2015. http://www.businesskorea.co.kr/article/9334/nuclear-power-controversy-growing-opposition-decision-re-operate-wolsong-1-nuclear
[7] Jacque Ellul. The Technological Society. New York: Vintage Books (1964)
[8] Langdon Winner. Autonomous Technology: Technics-out-of-Control as a Theme in Political Thought (Cambridge, MA: The MIT Press, 1977)
[9] Byrne J. and Hoffman M., “The Ideology of Progress and the Globalization of Nuclear Power,” in J. Byrne and S. Hoffman eds. 1996. Governing the Atom: The Politics of Risk (New Brunswick, NJ and London: Transaction Publisher)

Smart ideas: Jeju island smart grid test-bed to optimise energy usage through the use of renewable energy
jejus

By Soojin Shin
April 14, 2015

Widespread deployment of smart grids could play a valuable role in achieving a more secure and sustainable energy future. Smart grids are able to handle fluctuations from sources such as solar and wind while also improving demand-side efficiency [1]. Also, smart grids are an important element for expanding the use of a number of low-carbon technologies, including electric vehicles [2].

South Korea’s state-run transmission operator, Korea Electric Power Corporation (KEPCO)’s new campaign “Global Top Green and Smart Energy Pioneer” signals its intention to redefine its business model [3], and one reflection of the new model is the development of a smart grid project that can assist KEPCO in expanding its use of new and renewable energy and encourage use of electric energy efficiency.

KEPCO has set a goal of establishing a national smart grid by 2030. In order to achieve this goal, the company has built successfully and is operating a smart grid test-bed complex on Jeju Island. The project is intended to provide a next-generation power grid that maximizes energy efficiency by incorporating IT in grid operation. Five sectors have been tested to improve power system efficiency and develop output-stabilization technology for renewable energy [4].

Jeju Island is an ideal project area because it is served by a self-contained grid. As well, it was the only site for the company’s installation of smart meters, intelligent power transmission and distribution equipment, and configuration of digital transformation systems which were undertaken in late 2011. Currently it is introducing a real-time pricing system and has installed an electric vehicle charging station, enabling the company to study integration of renewable energy generation and electric vehicle operations into the power network [5].

KEPCO is focusing on four key areas: peak load reduction, reduction in power transmission and distribution losses, integration of renewable energy into the grid and strategies to reduce the number and length of blackouts. The Jeju island test-bed results have led KEPCO to explore new opportunities in overseas markets, offering tailored package product combining standard technologies with intelligent electric power options and business models.

The state-run transmission operator is also preparing a global super grid project for the peninsular to be launched in future. With the successful and widespread development of the smart grids, societies can expect high-quality electric power service, better system reliability and quality of service which maximizes efficiency of energy use and energy savings, and higher penetration and acceleration of the use of renewable to capture environmental benefits.

Notes
[1] Kaygusuz K. (2011). Energy services and energy poverty for sustainable rural development, Renewable and Sustainable Energy Reviews, 15 (2011) 936–947
[2] IEA, available from http://www.iea.org/topics/electricity/subtopics/smartgrids/
[3] Korea Joongang Daily, available from http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=2978780
[4] Korea Electric Power Corporation, available from http://cyber.kepco.co.kr/kepco/KE/I/htmlView/KEIAHP00112.do?menuCd=FN010203
[5] Korea Smart Grid Institute, available from http://www.smartgrid.or.kr/09smart2-1a.php

Photo: Zpryme, Smart Grid Insights. South Korea: Smart Grid Revolution: zpryme

Mobilizing public and private capital for clean energy financing
alternative-21761_1280

By Joseph Nyangon
April 9, 2015

The energy market in the United States is undergoing a dramatic transformation, driven by technological advancement, market dynamics, and better policies and laws—none of which was a decade ago. Venture capitalists made huge profits from the computing boom of the 1980s, the internet boom of the 1990s, and now think the next boom will happen on the back of energy. These past booms, however, were fed by cheap energy: coal was cheap; natural gas was low-priced; and apart from the events following the 1973 Arab oil embargo and the 1979 Iranian Revolution, oil was comparatively cheap. However, in the space of the past decade, all that has changed. New resource finds, primarily shale resources from states such as Texas, Oklahoma, North Dakota, and Pennsylvania, exert pressure on the prices of oil and gas. At the same time, there is a growing concern of negative externalities associated with these fossil fuels.

Hybrid vehicles are doing more to fulfill their technological promise. Wind-and-solar powered alternative no longer looks so costly by comparison to natural gas—whose low prices due to increased shale production have shaken up domestic and global energy markets recently. Coal remains relatively cheap, however, its extraction damages ecosystems by destroying ecological habitats. Additionally, combustion of fossil fuels pollutes the air by emitting harmful substances into the atmosphere, such as carbon dioxide, methane, and nitrous oxide that contribute to global warming.

Oil spills, such as the 2010 Deepwater Horizon spill in the Gulf of Mexico and leakages at exploration and extraction points destabilize marine ecosystems, killing aquatic life. Utility firms seeking to avoid political and capital costs of the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan and Mercury and Air Toxics Standard on existing plant performance have began to invest more in energy efficiency and low-carbon technologies that guarantee less harmful emissions. As a result, the industry is accelerating modernization of their generation fleet. These underlying factors, including innovative financing options, increased capital investment, and market incentives, have opened up a capacity gap from conventional plants and an opportunity especially for solar, wind, and other low-carbon technologies.

Innovative financing options: A key driver of recent renewable energy gains is cost. As a mass market develops and the technology improves solar and wind power have become more competitive. In California and New York, a surcharge paid by utility customers to help finance clean energy projects in the two states has generated substantial sums of money, which is being invested in energy efficiency and renewable projects. In Connecticut, the Clean Energy Finance and Investment Authority (CEFIA), a successor of Connecticut Clean Energy Fund (CCEF) has funded over $150 million of clean technology projects and awareness programs statewide.[1] As more states adopt these kinds of programs, they continue to subsidize investment in clean energy programs. Financing clean energy projects, nevertheless, continues to face stiff competition from non-renewable sources. The cost of fossil fuels is still relatively low, mostly because social costs and the price of ecological damage are not factored into existing market prices. Renewable energy development also continues to experience high transactions costs, such as in negotiating power-purchase agreements which can make them more risky to investors.

Capital costs: In the long run, however, real gross domestic product and carbon emissions are likely to be the primary drivers of clean energy consumption, because governments will try to prevent the price of energy from rising too fast or decreasing overly quickly as it can have negative effect on overall economic growth. Thus the price of fossil fuels could have only a small negative effect on the demand for clean energy. The main barrier to large-scale wind and solar projects is obvious—high upfront capital costs. Accordingly, some investors in certain parts of the country continue to demand high premium lending rates to offset the upfront capital risked up to fund clean energy projects than other conventional energy projects. At the same time, technology improvements, especially with regard to solar, and promising much lower future capital costs, which explains why solar energy is the fastest growing source of new energy simply in the U.S. and worldwide.2

Secondary effects: According to the Energy Information Administration (EIA) Short-Term Energy Outlook February 2015, utility-scale solar power generation in the U.S. will increase by more than 60% between 2014 and 2016, averaging almost 80 GWh per day in 2016.[2]  Half of this new capacity will be built in California. The World Energy Outlook 2014 estimates a 37% increase in the share of renewables in power generation in most OECD countries by 2040.[3] However, growth in renewable energy generation in non-OECD countries, led by China, India, Latin America and Africa, will more than double, according to the report. A change in energy policy or regulations in these markets could have even wider secondary effects on energy supply: positive impacts on emission reductions, accelerated substitution effects, and improved cost-competitiveness of renewable energy.

Market incentives and carbon tax: In the absence of fossil-fuel subsidies, which in 2013 alone totaled $550 billion, renewable energy technologies would be competitive with fossil power plants.[4] The effect of fossil-fuel subsidies on renewable electricity generation is fourfold: they weaken the cost competitiveness of renewable energy; boost the incumbent advantage of fossil fuels; lower the costs of fossil-fuel-powered electricity generation; and make investment in fossil-fuel-based technologies favorable over renewable alternatives. For instance, a phase-out of coal subsidies could further limit new construction and use of least-efficient coal-fired plants, thus incentivizing investment in clean energy.

Finally, if new policy causes the marketplace to internalize the risks of climate change, there would be no need for renewable energy subsidies and mandates in order for these sources to reach market parity.

Notes
[1] Connecticut Clean Energy Finance and Investment Authority: http://www.ctcleanenergy.com/Default.aspx?tabid=62
[2] Energy Information Administration’s (EIA) Short-Term Energy Outlook February 2015: http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf
[3] World Energy Outlook (WEO) 2014: http://www.iea.org/publications/freepublications/publication/WEO_2014_ES_English_WEB.pdf
[4] Ibid, WEO, p.4

Powering Africa: Opportunities for renewable energy investment in sub-Saharan Africa
powering africa

By A.L. Smitt
April 6, 2015

In the most recent issue of Ernst and Young’s Renewable Energy Country Attractiveness Index, there is an interesting feature article on “Powering Africa.” [1] It is interesting not only because it describes the investment opportunities and risks in sub-Saharan African (SSA) renewable energy and electricity markets, but also hints at a different approach to development in the region than has been pursued in the past.

Opportunities and Risks. In the next 25 years, nearly one billion people will gain access to electricity in SSA, but, because of forecasted population growth, the number of people who have no access to electricity will only drop from the 600 million now to about 530 million. With all the advantages electrification offers in health care, education, business operations, communications, and agriculture, if the subcontinent were to become fully electrified, it could support a cycle of investment and job growth that might help lift millions of people from the deepest depths of economic deprivation and disease.

Perceptions are starting to change regarding investment opportunities in Africa. Astute entrepreneurs are realizing that Africa is huge, that there is not just the one “African” market, but 54 different ones in as many countries, and situations are not the same everywhere. “Since 2001, SSA has been home to 6 of the top 10 fastest-growing economies in the world” (p.19). Renewable energy resources are vast – wind, geothermal, biomass, and, of course, solar. In fact, SSA’s underdeveloped electricity grid offers huge potential for distributed solutions to meet the needs of the area’s farmers and rural populations who compose 60% of the total population and 70% of those in poverty. Once the process starts, microgrid communities could spread like mushrooms, sprouting where conditions are right and spurring regional and national development. How smart policy can plant the seeds of this growth is the second major focus of the article.

Development Reimagined. The most interesting thing about this article is how it approaches the idea of development in the region. It describes how President Obama’s Power Africa Initiative is different from government investment schemes of the past.[2] Take, for example, the case in which Western multinational corporations supplied the inputs and foreign aid preferred alien farming techniques. Infertile second-gen seeds of the industrialized ‘dependent’ development as farmers were forced to continue purchasing inputs from Western companies.

In contrast, the Obama plan actively seeks local expertise and energy sources to design and implement the new energy era. The investment numbers so far are not minor: The US has used $7 billion to leverage another $20 billion from private investors and the World Bank, African Development Bank, and Sweden have combined for another $9 billion to fund the program. The program’s project goals are all field driven. That is, “In addition to capital, PA is providing critical advisory and collaboration services via its on-the-ground transaction advisors, engaging in policy reform efforts, helping to identify roadblocks, coordinating information flows among different stakeholders, and galvanizing the required support from the appropriate US agencies or other parties.” [3]

This initiative realizes that in the varied and sometimes difficult investment world of SSA, local knowledge and participation is key to achieving success and it is why PA Coordinator Andrew Herscowitz says that “banks and private equity funds are tripping over themselves to try and get in on these kinds of investments” (p.24). There is plenty of opportunity in Africa and many people want to get involved in this potentially explosive sector of the economy.Investors in the developed world can take part in this opportunity to make a high return on their investments while not exploiting impoverished nations.

At least that is the hope: build a more secure, safe, and economically viable Africa on the regional and international stage by enabling an energy system designed by and for the continent’s people and businesses. Let’s hope it works better and differently for SSA than the experiment of the (first) “Green Revolution.”

Notes
[1] Renewable energy country attractiveness index (RECAI): Issue 43, March 2015
[2] Fact Sheet: President Obama Power Africa Initiative
[3] RECAI, p.22.

Photo credit: RECAI

Four point plan for promoting renewable energy in South Korea
renewables in Korea

By Soojin Shin
April 5, 2015

According to the Korea Energy Economic Institute (KEEI), January 2015 monthly review, energy production totaled 3,821 thousand tons of oil equivalent, representing a 10.2% increase compared with the level of production one year earlier [1].

While both hydro and renewable energy production increased, both accounted for only 28% of total production in October 2014 [1]. To reduce the country’s dependence on fossil fuels including petroleum products, coal, and natural gas in order to comply with the country’s national and international commitment to a low-carbon future there is need for more rapid development of renewable energies. This requires significant and continued investment in low-carbon options.

The government of South Korea announced the Fourth Basic Plan for New and Renewable Energy plan in September 2014 [2]. The plan identifies and sets a specific target of providing 11% of the country’s total primary energy supply with new and renewable energy by 2035. It begins with increasing the mean annual growth rate of renewables to 6.2% from 2014 to 2035 from the current 0.7%.

The plan seeks to invest in energy efficiency in buildings and residential in order to reduce energy wastage. The blueprint focuses on expanding public and private partnerships in new and renewable energy sector by building market base for renewable and reducing over-emphasis on government-led financing of clean energy projects.

Finally, the plan seeks expand the domestic renewable energy value chain by actively engaging and investing in foreign clean energy market. The plan sets ambitious priorities for the renewable energy market, covering areas such as investment, infrastructure, technology development and programs.

However, although the government has promoted the plan, with an initial investment of $150 billion, this has had little impact on the composition of renewable energy mix in the energy production. And there is a larger problem with the plan—increasing renewable energy from its current 2% to 12% by 2030 handling seems significantly low compared to the targets in the EU (27%), US (27%) and Japan (21%) [3][4][5].

Considering the current limited energy resource endowment in the country and inadequate technologies, a more comprehensive renewable energy strategy supported by advanced technology roadmaps is required.

Notes
[1] Korean Energy Economics Institute (KEEI), Energy Review Monthly – January 2015 (Summary). Available from http://www.keei.re.kr/main.nsf/index_en.html?open&p=%2Fmain.nsf%2Fmain_en.html
[2] Ministry of Trade, Industry and Energy (MOTIE), Available from http://www.motie.go.kr/motie/ne/presse/press2/bbs/bbsView.do?bbs_seq_n=79320&bbs_cd_n=81
[3] International Energy Agency(IEA), Energy Policies of IEA Countries
[4] Available from: http://ec.europa.eu/clima/policies/2030/index_en.htm
[5] Available from: http://www.irena.org/remap/REmap_Report_June_2014.pdf

Photo credit: A view of a solar power plant of Korea South East Power Co. (KOSEP) in Incheon. Reuters/ Jo Yong-Hak

Don’t make it history: Four years after Fukushima nuclear accident
Fukushima

By Joohee Lee
April 5, 2015

The fourth anniversary of the Fukushima Daiichi nuclear accident was observed about a month ago. This catastrophic accident captured global attention for many months but recently has garnered only sporadic media coverage. Yet, small and large earthquakes near the accident site remind us that the risk is far from over.

Last year when I visited Osaka to attend a conference, the city looked quite peaceful and not much different from what I remembered before the accident. I learned that people living hundreds of miles away from the epicenter of the accident would not let it change their day-to-day activities. During my stay, the only occasion that allowed me to learn of the ongoing nuclear debate in the country was a brief conversation with an anti-nuclear citizen group I encountered in front of the headquarters of the Kansai Electric Power Company, a major electric utility serving Japan’s second largest industrial areas. They were protesting against the company’s recent moves to restart nuclear power plants in the area. One of the participants lamented that public support for demonstrations had waned compared to the mass protests at its peak that followed the meltdown. In particular, this protestor was deeply concerned about the dwindling crowds especially the younger generation.

Shinzō Abe, the Japanese prime minister, has continued to strongly support nuclear power arguing that the technology is essential to boost the country’s economic growth and energy security. Large utility companies have also shown strong interest in restarting idle power plants. And the desire to return to the country’s reliance on the technology might be fulfilled soon – for the first time since the shutdown of all 48 nuclear reactors after the meltdown, the central and local governments recently approved two reactors in Kyushu to come back online (although the Kyushu Electric Power Company still needs to go through more operational safety checks) [1]. If this plan goes ahead, additional proposals could follow despite the public’s mixed feelings about sustaining the path for nuclear power.

Another important aspect of this debate is the ongoing cleanup process of the Fukushima Daiichi accident site. In cooperation with the central government, the Tokyo Electric Power Company has been responsible for decommissioning the troubled nuclear reactors. However, in practical terms, the plan and deadlines they proposed are unlikely to be met due to the delays in timely treatments of contaminated water [2, 3]. During this delay, leakage of radioactive water into the ocean can possibly threaten the marine ecosystem as well as human health. Moreover, unburied debris of the power plants has been linked to radioactive substances detected in local food and air.

Anti-nuclear advocates argue that Japan has shown the possibility and feasibility of a non-nuclear society since all plants were closed in September 2013. Going back to the nuclear option might seem an easier choice for Japan, but that means the entire society once again has to embrace the same risks and uncertainties that exposed the country to serious health and environmental consequences. Life must go on no matter what – but society needs to learn from mistakes and turn them into an opportunity to identify and implement alternatives. And citizens should have the power to require and realize such change even if it takes time.

Notes:
[1] “Japan nuclear plant gets approval to restart, over three years after Fukushima,” Reuters, October 28, 2014, http://www.reuters.com/article/2014/10/28/us-japan-nuclear-idUSKBN0IH0CH20141028
[2] “Tepco Set to Miss Target for Fukushima Radioactive Water Cleanup,” Bloomberg, August 4, 2014, http://www.bloomberg.com/news/articles/2014-08-04/tepco-set-to-miss-target-for-fukushima-radioactive-water-cleanup
[3] “Fukushima Daiichi NPS Prompt Report 2015”, Tokyo Electric Power Company, January 23, 2015, http://www.tepco.co.jp/en/press/corp-com/release/2015/1247689_6844.html

Photo credit: Fukushima Nuclear Plant – ABC News

Energy dilemma of ethical cities and the solar city’s promise
solarcity

By Job Taminiau, Jeongseok Seo and Joohee Lee
April 3, 2015

No one in large cities would want to have a nuclear or a coal-fired power plant in their residential boundaries. Recognizing environmental and health risks of conventional power plants, it becomes increasingly unthinkable to propose the construction of such power plants near populous areas. Instead, remote locations are sought, often at the expense of local populations, and the produced electricity is then transferred to the areas of demand.

Here ‘ethical’ cities, who are concerned about detrimental impacts of their electricity consumption on supplier communities, are faced with a dilemma: either they have to build some fossil-fueled or nuclear power plants in their cities to supply electricity they need; or they have to live with shifting health or environmental consequences of such power plants to others. Besides, building large power plants in urban centers can be uneconomical as the capital cost will likely be more expensive than remote rural areas largely due to higher property prices and O&M costs will also be greater due to higher transportation costs for fuel sources, such as coal, natural gas or uranium.

Researchers at CEEP have investigated this dilemma and proposed a reorientation of the energy supply focus to include the possibilities and opportunities that are available within city boundaries. This idea has taken shape in the form of the ‘solar city’, putting forth the notion that cities can capitalize on the incoming solar energy that is collected daily but remains unused unless it is ethically and economically captured. While solar electricity is ready-made for this purpose, other energy technology options or energy saving measures can also be considered. In effect, rather than relying on the construction of additional capacity outside the municipal boundaries, the urban fabric is transformed to become a power plant itself, empowering citizens as ‘prosumers’ through a strategic and collective application of the solar city concept. Calculations performed by CEEP researchers have shown that megacities have great potential to address the economic and inequity problems of energy supply through this strategy: for example, a carefully implemented solar city strategy can account for 66% of Seoul’s energy need during daylight hours [1]. And its supply can be affordably provided to all [2].

Now, a recent study investigating the application of the solar city model has identified a viable financing strategy that allows for the gigawatt scale deployment of solar capacity [3]. Using Amsterdam, London, Munich, New York, Seoul, and Tokyo as case studies, the results show that over 300 million square meters of rooftop area could be available for PV installation and that the city-wide deployment of PV on this rooftop real estate would yield substantial energy, economic, and system benefits. The US$ 10 billion financing cost to install PV on approximately 30% of the commercial and public buildings in these cities—the building types primarily studied in the investigation—could, meanwhile, be addressed by approaching the capital markets through bond offerings.

The investigation does show, however, that city-specific policy, market, and finance conditions influence the viability of the strategy. For instance, Seoul’s low commercial retail electricity price set by the national regulator complicates the business case for a solar city strategy and can only be bridged by a more supportive policy framework, continued falling PV system prices, and/or by increasing electricity retail prices. Similarly, the investigation shows how London would need to rely on some level of policy support to allow for a cash flow capable of providing the foundation for the investment. Importantly, however, the study finds that New York City, Tokyo, Amsterdam, and Munich are all able to already implement a solar city strategy without additional policy support which returns its debt in 10 years or less.

These results are promising and can provide an alternative path that cities can take to solve their energy dilemma. Moreover, these six cities have options available to them to further improve the business case for a PV solar city application by modifying policy frameworks or, perhaps, through collaborative bond structuring. In any case, if the PV system price patterns of the past few years continue into the future, payback periods could be under ten years for most cities without any policy support.

Now, ethical cities have an option. One is to stick to the current path, that is, they consume electricity generated from fossil-fueled or nuclear power plants at the expense of supplier communities who must shoulder the risks. Or they can choose a strategy of leadership and start construction of a distributed solar power infrastructure within their own boundaries and contribute to the sustainable energy transition. The Mayor of Seoul, Mr. Park Won-Soon, has offered an interesting name for his city – “One Less Nuclear Power Plant” [4].

Notes
[1] Byrne, J., Taminiau, J., Kurdgelashvili, L., & Kim, K. (2015). A review of the solar city concept and methods to assess rooftop solar electric potential, with an illustrative application to the city of Seoul. Renewable and Sustainable Energy Reviews, 830-844. http://dx.doi.org/10.1016/j.rser.2014.08.023
[2] Byrne, J. and Yoon S-J. 2014. Sustainable Energy for All Citizens of Seoul. Presentation at the Seoul International Energy Conference 2014. http://freefutures.org/videos/channel/seoul-2014
[3] Byrne, J., Taminiau, J., Kim, K., Seo, J., Lee, J. (forthcoming). A solar city strategy applied to six municipalities: integrating market, finance, and policy factors for infrastructure-scale PV development in Amsterdam, London, Munich, New York, Seoul, and Tokyo.
[4] Seoul Metropolitan Government. (2014). One Less Nuclear Power Plant, Phase 2: Seoul Sustainable Energy Action Plan

Photo credit: Forbes

Eskom’s infrastructure woes create role for renewable energy in South Africa
Eskom

By Benjamin Attia
April 1, 2015

As the state-owned utility of one the fastest growing economies in the world, Eskom is struggling to meet demand in South Africa. Speaking at the World Economic Forum last month, South African President Jacob Zuma said that the country’s grid infrastructure was simply not designed to serve the “expanded citizenry,” of which now only 82.7% have access to electricity. [1,2,3] Eskom’s aging and insufficient grid infrastructure cannot keep up.

To make matters worse, the fully integrated state utility with 95% of South Africa’s total generation has added seven million new customers since 1994, but, without sufficient generation, the utility has been forced to overextend the operation of 27 older power plants. The result is poor system reliability and the reintroduction of load-shedding procedures, or controlled power cuts to prevent demand from outpacing supply. [4] Recommended by the South African Chamber of Commerce and Industry, the load-shedding plan is designed to introduce predictability into the blackouts to try to contain the economic losses felt by producers and suppliers. In the long term, the plan calls for the conversion of Eskom from a state-owned, vertically integrated monopoly to a privatized utility with an open market for foreign investment in clean generation technologies, especially solar.

The South African Department of Energy claims the country has one of the highest technical potentials for renewable energy of any country in the world. [5] A 2010 UN Environment Programme report published by researchers at the University of Cape Town estimates South Africa’s technical solar potential at 1000 TW, but advocated for policy changes in order to make renewable technologies such as solar PV economically viable. [6] In order to capitalize on this potential, the South African government, renewable energy associations, and partner countries joined in December 2011 to form the South African Renewable Energy Initiative (SARi).[7] SARi is “dedicated to enabling the large-scale ramp-up of the renewable energy industry in South Africa” and seeks to “establish financing arrangements to allow a critical mass of renewables to be developed, without incurring unacceptable domestic cost burdens.” [6]

This partnership supplements South Africa’s existing renewable energy program, called the Renewable Energy Independent Power Producer Procurement Program (REIPPP), a competitive tender auction program creating a public-private partnership for private investment in renewable energy technologies in South Africa. [8] By creating a framework through which renewable energy projects could secure financing and be expedited through the regulatory pipeline, South Africa installed 600 MW of wind projects and 1 TW of solar PV projects in 2014, with net annual savings of $69 million, according to a 2015 report by the South African Council for Scientific and Industrial Research. [9, 10]

Renewable generation has a larger role to play as the country implements its carbon tax in 2016. [11] Eskom’s struggles to meet peak demand could be softened by distributed renewables providing a buffer for business and industry during load-shedding times. Renewable capacity will also act as an offset when the carbon tax is implemented. New infrastructure projects ought to be designed with the intention of capitalizing on the country’s renewable energy potential in order to wean consumers off reliance on Eskom’s insufficient centralized grid.

South Africa’s efforts are an important bellwether for continental efforts to combine financing and incentive programs in order to capture South Africa’s plentiful endowment of renewable energy.

Photo credit: Eskom Company Information

Notes
[1] Eskom buying private power. (2015, January 22). Retrieved February 23, 2015.
[2] Arcangeli, G. (2015, February 12). Could Solar Be the Answer to South Africa’s Utility Woes? Retrieved February 23, 2015.
[3] Access to electricity (% of population). World Bank. 2014.
[4] Fripp, C. (2015, February 16). SA Chamber of Commerce submits loadshedding plan to Eskom. Retrieved February 23, 2015.
[5] Renewable Energy, Department of Energy, REPUBLIC OF SOUTH AFRICA. (n.d.). Retrieved February 23, 2015.
[6]Edkins, M., Marquard, A., & Winkler, H. (2010). Assessing the effectiveness of national solar and wind energy policies in South Africa. Energy Research Center, University of Cape Town: United Nations Environment Programme Research Project.
[7] “The Launch of the South African Renewables Initiative in Durban during the UNFCCC COP 17 climate change conference.” Press Release. South Africa Department of Energy. 7 December 2011.
[8] Eberhard, A., Kolker, J., & Leigland, J. (2014). South Africa’s Renewable Energy IPP Procurement Program: Success Factors and Lessons. PPIAF.
[9]Chadha, M. (2015, February 17). South Africa Saved $69 Million From Solar, Wind Energy In 2014. Retrieved February 23, 2015.
[10] Bischof-Niemz, T. (2015). Financial benefits of renewables in South Africa in 2014. CSIR Energy Centre.
[11] Cohen, M. (2014, February 26). South Africa Delays Carbon Tax, Plans Levies on Acid Mine Water. Retrieved February 24, 2015.

Reducing soft costs of renewable energy deployment can accelerate their cost-competitiveness
12

By Benjamin Attia
February 23, 2015

Despite the dramatic dip in oil prices in recent weeks, the cost of renewable generation technologies has reached an unprecedented level of competitiveness with traditional fossil fuel generation. Lazard Investment Bank and IRENA recently reported that several renewable energy technologies have either already reached what is called ‘grid parity,’ or will do so in the near future. [1,2]

‘Grid parity’ occurs when an alternative energy source can produce electricity at a cost equivalent to retail prices for electricity delivery from fossil fuel technologies. Unpredictable fossil fuel markets will not stand in the way of these advances, according to a new report by Bloomberg New Energy Finance[3], which predicts growth in global annual renewable energy investment in the neighborhood of 2.5 to 4.5 fold by 2030. The result of predicted investment is a 70 percent share of new power capacity belonging to renewable generation sources in 2030.3 These encouraging projections indicate a shift away from reliance on fossil fuel sources of electricity generation and towards greater use of renewables.

The competitiveness of renewables can be affected by geography, infrastructure, institutional, and especially policy factors. The policy environment can significantly impact the rate of diffusion, price competition, etc. But new studies from Germany identify an especially important role of policy in lowering so-called ‘soft costs.’ [4] These include siting, permitting, installation, interconnection, and daily operation and maintenance of the generation system. Especially in residential-scale systems, which in many areas have enormous technical potential, these soft costs can drive the lifecycle cost of renewables higher than those for conventional utility investments.

With rapid increases in renewable energy investment projected for the future, policymakers would do well to streamline processes affecting soft costs as much as possible in order to improve investment readiness and reduce time in the pipeline. In this way, policymakers can create a win for jobs and economic growth, a win for the cost of electricity, a win for the environment, and a win for future generations.

Notes
[1] Taylor, M., Daniel, K., Ilas, A., & So, E. Y. (2015). Renewable Power Generation Costs in 2014. International Renewable Energy Agency (IRENA).
[2] Lazard. (2014). Lazard’s Levelized Cost of Energy Analysis – Version 8.0. September 2014.
[3] Isola, J. (2013, April 22). Strong growth for renewables expected through to 2030. Retrieved February 18, 2015, from http://about.bnef.com/press-releases/strong-growth-for-renewables-expected-through-to-2030/
[4] J. Seel, G.L. Barbose, and R. Wiser. 2014. “Analysis of Residential PV System Price Differences between the United States and Germany. Energy Policy. V.69: 216- 226.

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