Friday, March 31, 2017

World's largest battery installation

A huge $1bn solar farm and battery project will be built and ready to operate in South Australia’s Riverland region by the end of the year.  The battery storage developer Lyon Group says the system will be the biggest of its kind in the world, boasting 3.4m solar panels and 1.1m batteries.  The company says construction will start in months and the project will be built whatever the outcome of the SA government’s tender for a large battery to store renewable energy.  A Lyon Group partner, David Green, says the system, financed by investors and built on privately owned scrubland in Morgan.  “The combination of the solar and the battery will significantly enhance the capacity available in the South Australian market,” he said.

[Read more here  and some background here]

The hamlet of Morgan is on the Murray River, about 100 kilometres north-east of Adelaide.  Lyon Group has started building a similar installation at Roxby Downs, 300 or so kilometres north of Adelaide.


Source



A couple of points:


  • This will be the world's largest battery installation to date.
  • These two battery banks (Roxby Downs/Kingfisher and Riverland) will be in addition to any batteries installed as a result of the tender the South Australian government has initiated.
  • Combining wind and solar produces a more stable electricity output.  For example, wind often is stronger at night, when there is no sun.  Solar output is "smoother" during the day than wind, especially from a number of geographically spread solar farms.  South Australia gets 40% of its electricity from wind, and only 5% from solar.  Increasing the solar percentage would make the supply more even and the grid more stable, especially when there is strong demand on very hot days, when everybody's aircon is running.
  • This will take only a few months to complete.  Construction will be finished by the end of the year.  Compare this to conventional power stations.
  • The battery banks by themselves will not be nearly enough to provide for peak SA demand in the late afternoon.  But (a) they're a (small) step towards having enough stored power in the evening to dispense with gas peaking plants and (b) batteries can provide other very important grid services: frequency control (keeping the grid frequency at 50 hertz) and voltage stabilisation.  Unlike gas peaker plants which take 7 or 8 seconds to fire up, the response of batteries is virtually instantaneous.
  • Although the cost of solar panels is being reduced by the values of the Large Scale Generation Certificates created as part of the government' RET (renewable energy target) the battery banks are profitable in themselves.  This is the first time that's been true in Australia at this scale.
  • In future, probably all new wind and solar farms will have complementary battery storage because it will allow their owners to sell their electricity more profitably.  For example, now, there are times late at night when the wind is blowing strongly that wholesale electricity prices in South Australia go negative, and other times (late afternoon on a hot day) when the wholesale electricity price is 1000 times higher than the long-term average.
  • All these recent developments show conclusively that South Australia will easily be able to reach 100% renewables in their grid within 10 years (5% a year from now on.) 
  • This is the end of coal.  And of the dishonest story from the Right that only coal can provide us with energy security.  
  • Coincidentally, today the giant Hazelwood power station in Victoria is closing down.  It used to provide 25% of Victoria's electricity and 5% of the nation's and was the most polluting power station in the world (it burnt brown coal or lignite.)  Australia's solar resources are among the best in the world.  New solar PV plus storage will quickly fill the gap caused by Hazelwood's closure.



Tuesday, March 21, 2017

Extremes

Why would the number of extremely hot days rise by a much larger percentage than the rise in average temperatures?

It's to do with the shape of the statistical distribution.  Let's suppose that the average temperature for a season or a year is X, and that the observations are normally distributed.  That means that the number of times  the temperature is X-10, X-9, X-8 ...... X+8, X+9, X+10 (just as an example)  starts out with very few times it's X-10 (or X+10), a few more times when it's X-9 (or X+9), still more times it's X-8 (or X+8), in a shape which is reminiscent of a bell.  The normal distribution is often called the bell curve because of this.

There are other distributions which are skewed to one end of the curve or the other, which means that they are asymmetrical.  For example, wealth is very asymmetrically distributed: there are far fewer rich people who own most of the wealth, and lots of poor people who own little.  But observations for weather tend to be symmetrically distributed, but because of global warming, they have drifted over time.  The distribution is still bell-shaped but the mean  (the average) has shifted higher.  And that means that the "tails" of the bell shape have also shifted.  So whereas in the old days you had say 1 very hot day 3 days a year, 1 % of the time, now you have 2 or 3 or 4 times as many very hot days.  Similarly, in the old days you used to get 1 very cold day 3 days a year, now you get none.  The graphic below demonstrates this principle very nicely.


Source


Lots of people think that a rise of 1 degree C in average temperatures is small, because they are used to the shifts in temperature from day to night, and from winter to summer, which are obviously much larger.  But what global warming means is that we will have far more hot days in summer, with temperatures reaching and exceeding new highs more often and by more.  We have just seen this in our Australian summer, and they've just seen this in the US, where February heat has been at July levels,  If the mean, and its whole distribution shifts still higher the number of super hot days will double or treble or quadruple, with devastating consequences for us and for our world.

Monday, March 20, 2017

Society

I can't read the signature, so I can't tell you which cartoonist drew this marvellous cartoon.



Sunday, March 19, 2017

Hope and despair

Source



When I look at the problem of global warming I alternate between hope and despair.

There's hope,  because the costs of wind and solar and concentrated solar power and batteries and electric cars are all falling, some precipitously, and many are now cheaper than their fossil fuel equivalents, and if they're not, they soon will be.  The old argument by the Right was that renewables were so costly that if we installed them, the economy would suffer, and living standards would fall.  You can see the most cynical and dishonest version of this argument when they claim, with crocodile tears, that  the desperate millions of India/Africa/you name it are being consigned to further poverty because we Lefties want to stop using coal.  Just for the record, that's a feeble as well as a dishonest argument: the cheapest way to bring electricity to the 24% of India's population who don't have it now is via mini-solar panels with batteries and LED lights.   And anyway, utility-scale renewables are cheaper than coal in India, even leaving out the significant environmental and health costs of coal.  Almost everywhere, renewables are cheaper than coal and comparable to gas.  And renewables are still falling in cost, so the gap with fossil fuels will only widen.  In a rational world, we would be embracing them with joyous cries.

This year the sticker price of EVs will match the average price of petrol cars.   There will still be cheaper cars to buy than EVs: the cheapest new cars sell for around $16,000.  Electric cars with 200 miles/320 kilometres of range will still cost more than that in 2020.  But by 2025 even cheap petrol cars will be more expensive than EVs.  As EVs are already much cheaper to run, people will stop buying petrol cars and buy only EVs.  Which means that by 2030 or 2035 emissions from oil in transport will have fallen dramatically.

All good.  Except.

The rate of increase in global temperatures seems to be accelerating.  I know climate scientists will point out that we have too few data points, and they're right.  But if it were a share price or GDP, I would says that it was accelerating, because you can't wait for 100% confirmation in markets before you move.  And the same applies to policy:  governments can't wait either.  They need to accelerate the switch to renewables.  This summer in Australia, for the first time, I was really afraid of the heat.  It was relentless and unforgiving.  Fruit bats in South Australia died in their trees, from the heat.  The electricity grid across eastern Australia came close to failing several times because of the demand for power to run air conditioners.  The Great Barrier Reef started to die.  Even now, in late autumn, it is still over 30 degrees C in daytime.  And I was thinking this afternoon, it'll cool down as the earth radiates its heat back into space.  And I realised that that's exactly the problem.  Thanks to the rise in CO2 in the atmosphere, the earth can't radiate its heat away.  Oh, we will get winter, and soon, I hope, but even winter is warmer than it used to be.  What will next summer be like?  And the one after?

But still you meet denialists.  Our governing party, misleadingly called Liberal,  is in hock to dotty rabid right denialists and people who are clearly in the pay of coal and oil companies.  In the USA, Trump and the venal, dishonest politicians who have ascended to Congress and the Senate and the Administration on his coattails, are doing the best they can to stop this otherwise peaceful revolution.  Despite record heat in February.  Despite an Arctic which is several degrees centigrade warmer than normal.  I don't, when I'm rational, believe that they can stop this revolution, because it is driven by technological advances and plunging costs.  But we have seen the depths to which they will stoop.  And even if they don't stop it, they can slow it.  We can't afford that.  We need to speed up the switch to renewables, to electric cars and electric transport generally, not slow it down, because we are perilously close to runaway positive feedback processes which could raise the earth's temperatures by a degree over the next two decades.

One doom-loop feedback has already started, in the Arctic.  Less sea ice means the seas are darker so they absorb more sunlight, which makes them warmer, which means there's less sea ice, and so on and so on.  The same processes are happening on land in the Arctic too.

But there are other feedbacks: drought in the Amazon is causing the rain forest to die, which in turn is reducing water vapour in the atmosphere, which leads to further droughts and more rain forest dying and burning.  This isn't just potentially disastrous for global weather, it also means that the Amazon rain forest, a huge carbon sink, is releasing its carbon into the atmosphere which will drive global temperatures higher.

Then there are methane clathrates, in the Arctic and on shallow continental shelves in high latitudes.  Methane clathrates are essentially methane frozen into water, forming a crystal.   The trouble is, though the methane released when clathrates melt eventually decays into carbon dioxide, until is does it is a far more potent greenhouse gas than carbon dioxide.  Over 20 years, it is 86 times as potent as CO2.  The melting of methane clathrates 55 million years ago is thought to have caused the PETM (Paleocene-Eocene Thermal Maximum) when global temperatures were 5 to 8 degrees C higher than they are today.  There were no ice sheets, because they melted.  If the Greenland and Antarctic ice sheets melt now, sea levels will rise 70 metres (230 feet).  Of course, it won't happen overnight, but the risk is, with all the positive feedback processes, that it happens much faster than we're hoping for, that the one metre rise forecast by 2100 turns into 3 metres.

Yet despite the risks, I still find the gullible (who believe the lies spread by the right-wing press, media and twitterverse), the venal (who know it's true but want to still make money while they can), the ignorant (too busy focusing on celebrities and soap operas) and the plain stupid (who think fighting culture wars with the Left is more important than saving the earth and our civilisation.) I find too many of them. Too many who say, well, the earth's always had a variable climate, so why worry.  Too many who spread lies, saying renewables are more expensive than fossil fuels.  Too many who accuse scientists of "cooking the books", when in fact it's the planet that's cooking.  Too many people who say "we can always go to Mars" (at $500,000 per person!) when they won't support politicians and activists who urge the switch to renewables, "because it will be too expensive".  Duh.

I started this blog to talk about politics and economics, but it became obvious to me that the greatest danger we face is global warming.  And I, and all the others out there who are also trying to raise the alarm and encourage action, are just lone voices, crying out in the darkness, while venal, dishonest and dishonourable cretins hold public office, determined to slow and reverse the "Leftist", "greenie"  revolution which would save the world from runaway global warming, megadeaths, and the consequent collapse of our civilisation.

So I despair.

But I will not give up the fight.  I'm going to keep up the struggle to inform my readers.  I'm going to keep on urging you to vote for politicians and political parties who do not flat out lie about climate change.  I'm going to continue to urge you to discuss it with your friends, to call out denialism when you find it, to push and press and nag, until the great logjam of public opinion breaks up and we act,  to save ourselves and our planet.

Atlas shrugged

Via Paul Krugman


Frogs

From Wulff and Morgenthaler


Thursday, March 16, 2017

CSP gets dirt cheap

Source


Solar Reserve, the people behind the Crescent Dunes concentrated solar power (CSP) plant in Nevada, have bid just US$63/MWh in the reverse auction with the Chilean government for their Copiapó plant in Chile.  Here's part of an interview between CleanTechnica's Susan Kraemer and Kevin Smith, CEO of Solar Reserve:

SK: You bid Crescent Dunes in Nevada at 13.5 cents, then Redstone in South Africa at 12 cents. Your bid in Chile was 6.3 cents. How are you able to come down so low for solar that includes thermal storage so it can be dispatched any time — 24-hour solar for just 6.3 cents/kWh?  
KS: SolarReserve has made substantial advances in our technology that has increased efficiencies and brought down capital costs since our first project in Nevada.
But there are a number of other factors that influence power prices and the Chilean market appears to be ideally suited for solar thermal with storage. In addition to the best solar resource in the world, the country’s stable financial status along with US dollar denominated power contracts results in excellent financing and investment terms

SK: How do you ensure that you can deliver solar power around the clock? Does that require operating at something less than full capacity?  
KS: Our bulk storage capabilities utilizing molten salt give us tremendous flexibility, without having to consider the degradation issues associated with batteries or the replacement cost issues. 
We’re designing the projects in Chile for full capacity 24 hours a day. To do that we put in about 14 hours of storage. That will give us the full capacity of the project essentially 24 hours a day.

SK: Might you bid a Hybrid PV/CSP like Copiapó in Chile’s Next Round? 
KS: We permitted Copiapó for PV as well as CSP, but actually in the current situation, we’re not sure of the value of adding PV into the mix, because daytime power prices are low. We can take the PV out as we’re not required to include it. We could always come in later and add the PV in the future if it makes economic sense, but we think it has limited value in the Chilean sector right now: there has been an oversupply during the day because of all the PV. 
So in the last round we bid Copiapó purely as CSP with SolarReserve’s tower and molten salt storage technology. We had already made that decision that the PV wasn’t adding any value to the bid, so we did not include the PV, and we bid that at $63/MWh. 

[Read more here]

That's cheap.  What this means is that CSP can deliver power 24/7 at a lower price than coal or gas, without any CO2 emissions. 

Obviously it's cheapest in desert regions close-ish to the equator, like northern Chile, and in the mid-latitudes it will be 20 to 40%  more expensive, because there's less sunshine.  At high latitudes, wind plus storage remains the most attractive option--but it is also true that countries like Denmark could still get their power from CSP plants in Spain via HVDC lines.

Solar Reserve is planning two more CSP plants in Chile, each with three towers, has offered to build six in South Australia, and is planning on building a ten-tower complex in China.



Tuesday, March 14, 2017

Policy vs statistics



My last post was about how 2017 might actually be hotter than 2016.  So let’s look at the chart again, only, this time with two trend lines drawn in.  I haven’t used statistical methods to fit the trend lines, I’ve just drawn them in by eye, doing what I would for share prices or stock market indices.  And we don’t really have enough data yet to draw a new trend for the last 4 or 5 years.  But some points are instructive.  First, this is the biggest breakout above the 50-year trend in 50 years. Second, after the last big El Nino in 1998, temperatures in the subsequent year fell sharply.  This time, they might not.  A statistician or climate scientist would be cautious about forecasting a change in trend based on 5 years of data.  They’d point out that we need 25 or 30 years to be sure of the trend.  And they’d be right.

But what happens if you are a politician, entrusted with the welfare of your fellow citizens and of your country?  Indeed, what if you are a citizen, with just your vote, and you're concerned about the welfare of your children and grandchildren?  Do you wait for certainty?  Temperatures have on average risen a bit less than 0.2 degrees C per decade since the 1970s.  So that is very likely to be the minimum trend increase over the next 20 years, unless we stop pumping CO2 into the atmosphere.  But what if in fact the trend has possibly doubled, to 0.4 degrees per decade?  This makes action far more urgent than was agreed at the Paris conference.

The scientists would, rightly, say we don’t have enough data to forecast with any certainty that the trend increase in global temperatures has risen.  But policymakers have to face a different calculus.  They have to assess risk and the probability of worse-case scenarios.

Back in the 80s and 90s, global temps hadn’t risen a lot, and the costs of renewables were far greater than the costs of business as usual (BAU).  Taking action against relatively uncertain risks was expensive, especially for poor countries.  Only the countries most concerned about environmental risks, like Denmark and Germany, actually made any serious moves to green their electricity system.  And we thank them for it, because they pushed us down the renewables learning curve, making renewables cheaper for the rest of us.

But what is the position now?  Well, the evidence of the last 50 years is unambiguous. Remember, the chart isn’t from those “leftists” and “greenies” at NASA, NOAA etc.  It’s from Berkeley Earth, a totally reconstructed series going back 200 years.  And then there’s some credible risk that the trend has accelerated, based on the data, probably driven by malign doom-loop feedbacks from the rapid disappearance of Arctic sea ice to the melting of methane clathrates in the Arctic.  Meanwhile instead of being much higher, the costs of renewables are now lower than the costs of fossil fuels.  Batteries are plunging in cost too, and there are a whole plethora of new storage technologies popping up everywhere.

Whereas the costs of acting in the 80s and 90s relative to the certainty of rising temps was high, now it is extremely low.  The risk/cost equation has blown out dramatically.  Scientists might urge caution, but policy makers have to act now.

We can’t wait til 2050 to reach zero emissions.  We now need to try and get there in 15 or 20 years,  not in 35 years.  How?

  • Aim to increase the renewables percentage in generation by 5% a year
  • A carbon tax, starting low but increasing inexorably year by year, or a cap-and-trade program with the cap declining by 5% a year
  • Taxes on imports from countries which do not have similar initiatives
  • Subsidies for EVs funded by raising taxes on petrol and diesel
  • Encouraging behind-the-meter batteries for homes and businesses
  • An end to forest clearing and burning in the Amazon, Indonesia, etc.

Cost declines are already moving us towards a 100% green energy system.  My fear is that we'll be too slow; that vested interests will try to stop or slow that move.  We put a man on the moon in just 10 years -- an extraordinary technical and technological achievement.  We can de-carbonise our economies rapidly too, if we wanted to.  Do we want to?  Will the recent rises prompt a rethink?   What do you think, readers?


2017 hotter than 2016?

We've had two (or three, depending on who calculates it)  successive years of record global temperatures, and expectations were that 2017 would show a retreat from the 2016 highs.  But so far -- and yes, we've only had two months of data -- it looks as if 2017 could be another record.  Normally, after an El Niño ends, global temperatures fall back to or below the longer-term underlying uptrend.  This hasn't happened this time.  El Niño has ended but the temperature anomaly has actually risen.

Just a reminder: Berkeley Earth was set up by Richard Muller who doubted that global warming was happening.  He was even funded by the Koch brothers.  The denialists promised faithfully that they would accept whatever he found, convinced that the evidence of rising temperatures from everyone else was because they were biased and were cooking the books.  So Muller went away and totally reconstructed the temperature record down to the level of individual weather stations.  And came up with pretty much the same picture.  The denialists, needless to say, did not accept these results.  Muller also looked at correlations, and the only data which fitted the rising chart was the level of atmospheric CO2 (with positive sign) and volcanic eruptions (with a negative sign).

It's not statistical evidence (we'd need several more years of data to be sure) but it looks to me as if the rate of increase in global temps may be accelerating.  And that is very bad news indeed.



Source: Zeke Hausfather, Berkeley Earth

Monday, March 13, 2017

An amazing offer

It all started when Lyndon Rive (head of Energy at Tesla) visited Melbourne to launch the new Powerwall 2 here: 
They are only starting to gain a foothold in the Australian market, but could batteries provide a near overnight solution to the energy woes that have hit South Australia and risk spreading east? 
At least one company believes so. In an elaborate launch in a former power substation in suburban Newport, in Melbourne's west, Tesla Inc said its technology could provide a fix within 100 days. 
The Californian company's energy products vice-president Lyndon Rive said it could install up to 300 megawatt hours of grid-scale battery storage in that time frame at a cost of about $66 million per 100 megawatt hours. 
"If you had storage deployed during the blackout [in] South Australia you wouldn't have had the blackout," Mr Rive said.

[From Melbourne's The Age newspaper.  Read more here]

This news then provoked a Twitter conversation between the Ozzie billionaire Mike Cannon-Brookes and Elon Musk:


To which Musk replied:


What Musk and Rive and Cannon-Brookes have done is to break the logjam caused by the hysterical (and dotty) opposition  to renewables of Oz's right-wing ruling coalition.  The LNP coalition has (for political reasons) been extremely critical of the Labor party regime in South Australia, and has (falsely) blamed several blackouts in the state on the high percentage of renewables in its energy mix.  There is an election in SA next year.  So the SA government would be very glad to make this relentless assault from the LNP go away. 

All of the solutions mooted up to now, by either side, have involved lots of money and big delays, plus steps backward to gas and (ugh!) "clean" coal.  So this proposal -- cheap and fast -- really breaks the gridlock.  Reaction has been predictable: euphoria and praise from almost everybody, grumbles and nay-saying from the fossil fuel shills and rusted-on LNP supporters. 

Musk is determined to cause a global transition to a carbon-free economy.  It would be wonderful publicity to be able to say Tesla solved South Australia's electricity problems.  Better still, there are probably still millions of Ozzies who have never heard of Tesla cars, let alone Tesla batteries, and now suddenly Tesla is on the main pages of our newspapers and on TV.  So Tesla  wins.  But,  so does South Australia.  And so does the world, because this will conclusively show that it is possible to transition to a carbon-free economy, and that the variability of renewables can be dealt with, cheaply and efficiently.  It's a win-win for everybody except the coal dinosaurs.

What was really interesting is that Musk said the cost for one kWh of storage was now just US$250 for 100 MWh+ systems.  He means the capital cost, not the cost per kWh of output.  He's effectively more than halved the cost of storage utility-scale storage.  Again.  I said when I looked at the price declines announced for the home storage unit, the Powerwall 2, that a similar cost decline in wholesale storage hadn't been announced.  Well here it is, announced on Twitter no less.

Assuming each battery is discharged once a day, and lasts 10 years (though there should still be plenty of juice even after 15 years) I work out the cost per kWh of usage as 250/365/10 = US 6.8 cents, or US$68/MWh.  That doesn't mean you add $68/MWh to the cost per MWh of wind or solar.  You add 1/24th of that for each hour of storage.  So wind with 6 hours of storage goes from, say,$30- $40/MWh to $47 - $57/MWh.  Still far cheaper than coal.

The advantage of batteries is that they don't just store power.  They can provide grid stability.  Their extremely rapid response, within micro-seconds, is good for short term stabilisation of the grid, when for example, a major generator or a major power line goes down, and voltage and frequency "jerk". 

Daily SA electricity demand is 35.4 GWh. So one hour's demand would be 1.5 GWh, and battery storage for that one hour would cost US$375 million.   That works out at just $220 per inhabitant of South Australia.  Prolly, though, the power would be supplied by a PPA (power purchase agreement) or a reverse auction which would mean no capital outlay by the government.

My rule of thumb would be that for each 10% of renewables penetration in the grid we will need one hour of storage.  As we get to closer to 100% we will need 2 or more hours for each 10%, and to get from 80 to 100% we will likely also need long-term or seasonal storage.  The CSIRO has calculated that with a 100% renewables grid, 12 hours of storage would be needed, and the Australian National University thinks 18 hours would be enough.  South Australia has 45% renewables penetration, so it would need 5 hours of storage , but one hour would do very nicely to start with while the state builds another interconnector (with NSW this time) and also adds other forms of storage including pumped hydro and CSP.

I can't emphasise enough just what a game changer this is.  As RenewEconomy says:

Tesla founder and CEO Elon Musk has long predicted the imminent end of the fossil fuel era. But it took a couple of tweets between him and another billionaire, Australia’s Mike Cannon-Brookes, on Friday to highlight just how close this is. 

Australia’s fossil fuel “elite” – the industry, the politicians, the regulators and the media – have been kidding themselves that new battery storage technologies are “decades” away from being competitive with coal and gas. 

It’s what Australia’s energy ministers were told by the Australian Energy Market Operator at a COAG meeting last year, and US energy giant AES was stunned to find the same levels of ignorance when it spoke to ministers and regulators as recently as last November. 

As we reported last Thursday, Tesla announced that the inflection point wasn’t 20 years away. It was 100 days away. That, at least, was the time it would take to build a 100MW battery storage facility in South Australia, once planning approval and a contract had been signed.

As they say, now we're cooking with gas.

Saturday, March 11, 2017

The basic income

Although expanding free trade has been good for the world as a whole and for developing countries like China, India, Brazil, Mexico and so on, it has been bad for the working class in developed countries.  Real incomes for the already rich in rich countries have risen.  Real incomes in poor countries have risen too, by as much in percentage terms.  But the bottom half of the income pyramid in developed countries has had virtually no growth.  And these calcs were made before the GFC.  Since then, the real incomes of the bottom 2/3rds of the population in developed countries have stagnated, even as real GDP has risen, and the incomes of the top 3rd/quarter/one tenth have risen, extending the 1988 to 2008 trend.

You can see all this in the graphic  below.

Source

It is these people who voted for Trump, for Brexit, for Pauline Hanson's One Nation Party and will probably vote for right-wing populists in Europe's upcoming elections this year.

Opening up world trade has undoubtedly been good for world growth.  Higher growth in China, India, Brazil, Mexico etc., has lifted billions of people out of abject poverty, and that's a good thing.  But there have been losers, and they are angry.

So how do we make incomes more equal in developed countries, without tearing up trade agreements and without reducing growth rates?

One answer is the social wage or basic income.  I did my thesis on the negative income tax, which is pretty similar to the social wage.  How it works is simple.  The state pays everybody a monthly or fortnightly income.  This replaces the dole (unemployment benefit), the old age pension, disability pensions and family income supplements.  Everybody pays income tax, and income tax starts cutting in at zero income instead of having some tax-free minimum, so that for every dollar/pound/euro earned, the net payment (social wage less tax) declines.  Now in some developed countries, if you are receiving the dole (unemployment benefit)  this "clawback rate" is 100%.  In Australia it is 50%. In some cases, the cumulative loss of benefits can exceed 100% of earned income, and that's before you account for the cost of clothes to work in and transport fares to get to and from work.  This is a massive disincentive to work, especially when a lot of the work available these days is part-time.

Plus you need a whole department to administer the dole, the old age pension, disability benefits and family income support.  The rules of the negative income tax are simple, and most of the complex bureaucracy that is required to determine who is entitled to get support and how much they are entitled to can be eliminated.

How much would it cost?  In the analysis I did in my thesis 40 years ago, to lift all South Africans above the poverty line it would have cost 7% of GDP.  But in developed economies it would cost much less, because they already have a whole panoply of welfare measures, which it would replace.  And most of the analysts who have looked at the social wage reckon that its effect of incentives would actually increase output and incomes so that it paid for itself.

A basic income would be only one tool in the toolbox to reduce developed country inequality.  Others might be: a higher minimum wage, a wealth tax, greater educational equality, and in the USA, a decent public health system.  But a basic income would be a big first step on that road.

Some further reading (and watching)

Why we should give everybody a basic income:





Finland trials plans of basic income for the unemployed.

The basic income

Could Trump support a basic income?


Tuesday, March 7, 2017

This is getting boring!

How many headlines saying new record low costs for ________ does it take before it starts getting boring?  For me, not yet.  The news that renewables are continually getting cheaper is great news, because it means we will--we might--actually do something about global warming in time.  It's also one in the eye for the denialists who have shifted a little from denying the reality of global warming (for obvious reasons) to opposing the very idea of renewables (shows who's paying their way, to my way of thinking.)

The latest report is about wind power in India falling to new record lows of 5.2 cents per kWh ($52/MWh)  This is less than half the price of new coal.  And it's part of a global pattern.


Source



Why are costs falling so rapidly, and why is wind still more expensive in developing countries than in the USA?  

Costs are falling because wind turbines are becoming more efficient.  They're taller, and the blades are longer.  They can turn at low wind speeds and higher ones.  Second, everybody in the business of installing wind turbines, connecting them to the grid, using them to provide electricity, getting them and giving them permits, etc, is learning how to do it.  Rooftop solar in Australia is cheaper than in the USA even though our feed-in tariffs are so low because it's become bog standard: every electrician knows how to connect solar panels to the grid, every householder knows the benefits of solar.  The converse is true for large scale solar: in Oz, it's more expensive than in the USA because we haven't done much so far (though that's rapidly changing).  

Wind (and solar) remain more expensive in developing countries than in the USA because interest rates are higher. (except for the gulf oil states, which is one reason why solar is so cheap there)  Interest rates are higher partly because of higher inflation, and partly because of higher risk.  And because wind and solar have negligible operating costs, the rate of interest (the discount rate) is a critical variable in the cost equation, because almost all the cost of wind or solar is upfront cost, which is not the case with fossil fuels or nuclear.  But risk applies to funding coal power stations too.  In fact, the risk is higher, because the finances of coal are highly risky even before you consider developing country risk.  In fact the risk that a carbon tax is introduced and the certainty that the cost of renewables will go on declining is so high that I doubt any new coal power stations will be built, without government subsidy and support.

Friday, March 3, 2017

China and renewables

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I did a post on India and renewables a week ago.

Now, something on China and its renewables revolution.

Energydesk:

Carbon emissions from China’s energy sector stalled last year for the third year running — as coal use fell again and solar deployment nearly doubled. 
The newly released government figures, analysed by Greenpeace, also suggest that emissions are on track to fall this year by around 1%. 
That would make it the longest stretch of stable or falling emissions on record — with 2014 the first year that China’s CO2 emissions failed to rise, and 2015 the year in which they fell by the largest amount.

[Read more here]

IEEFA:

With official word this week from the China National Bureau of Statistics that the world’s biggest user of coal reduced its consumption in 2016 by 4.7 percent comes another signal that the Chinese electricity transformation continues apace. 
China installed 17.3GW of wind generation in 2016, down from a record 29GW in 2015, but still an expansion of 19 percent,  to 211TWh. In offshore wind, China’s Shanghai Electric Wind Power Equipment (Sewind) was the largest developer globally in 2015, commissioning 489MW of new capacity. 
China installed a world record 33.2 gigawatts (GW) of solar in 2016, double its record 15GW in 2015, which itself was double the highest ever annual record, set when German installed 7.6GW in 2012. On-grid utility solar in China grew 34 percent year over year to 39TWh in 2016. 
“The amount of solar that they did last year was more than the U.S. had done in the entire history of U.S. solar deployment,” said Jake Schmidt, the international program director for the Natural Resources Defense Council.  
China’s coal production declined an unexpected record 9 percent year over year to 3,410 million tonnes (Mt) in 2016. This brought the three-year average decline to 4.9 percent per annum, a decline of 564Mt in total. 


[Read more here and here]

There are still some who maintain that China and India aren't doing anything about reducing their CO2 emissions and their therefore impact on global warming,  That's false.  What is true is that reducing their emissions is hard for them, because their economies are still growing rapidly.  Which just shows up the failure of big developed countries even more!  If your electricity demand is stagnant, slashing CO2 emissions should be much easier than if your electricity demand is rising by 5% a year.

More records broken.

(source)


I've mentioned recent record temperature anomaly highs, in Australia and the US.

Here are two more.

Chicago hasn't had snow in January and February for the first time in 146 years.
Chicago—a city well known for its windy and snowy winters—is experiencing some unusually warm weather. For the first time in 146 years, there was no documented snow on the ground in January and February, according to the local National Weather Service. In fact, from Feb. 17-22, Chicago set new winter records with six consecutive days of temperatures in the high 60s to 70 degrees Fahrenheit.

[Read more here]

And Antarctica (autumn has just begun in the southern hemisphere) has just recorded a new temperature high:

The World Meteorological Organization announced Wednesday that Antarctica hit a new record high recorded temperature of 63.5 degrees F. 
The record, set at an Argentine research base in 2015 and just confirmed by the World Meteorological Organization, breezes past the previous record of 59 degrees. 
Meanwhile, real time data released from the National Snow and Ice Data Center showed only 2.131 million square kilometers of sea ice surrounding the continent on Feb. 28—about 159,000 square kilometers less than the record low set in 1997. The Antarctic ice sheet contains 90 percent of the world's freshwater, which would raise sea levels by 200 feet if it were to melt.

[Read more here]

And there are still people who deny the reality of global warming.  (On a side note: can you trust anecdotes or just one instance?  Yes, if they are consistent with the science and the trend in global data.  And yes, if they keep on happening.)