Tuesday, May 30, 2006

Nuclear power and heavy industry in Ontario: McGuinty’s Kyoto opportunity, part II

Here’s a question. Should major industrial energy users use less energy?

Industry is the second-largest source of greenhouse gas (GHG) emissions in Ontario. Electricity generation is number three. Transportation, all those cars and trucks, is the biggest source category.

Bear in mind that “industry” is a pretty wide-ranging term. The numerous firms operating in this source category use huge amounts of energy, mainly in the form of electricity and fossil fuels. They also employ a lot of people, and pay a lot of taxes. This is why governments are reluctant to implement aggressive and punitive environmental measures against them, as many environmentalists advocate. Getting industrial emitters to reduce emissions means getting them to cut back operations. In other words, lay off employees.

So back to my question: should industrial energy users use less energy?

Almost every mainstream environmentalist would say yes. This is because many environmentalists, rather simple-mindedly, associate energy use with emissions—if energy consumption rises, then emissions, they think, automatically also rise by a corresponding degree.

Is the relationship really this automatic? Not necessarily. It depends entirely on the fuel. Take electricity in Canada. Alberta and Saskatchewan generate most of their electricity by burning fossil fuels, so heavy electricity use in those provinces does come with heavy emissions.

But it is totally different in other provinces. Quebec generates by far the most electricity in Canada, and emits by far the least generation-related GHGs: 8 tonnes per million kilowatt hours. Ontario, the next-largest generating province, emits around 272 tonnes for every million kWh. If that sounds high, remember that Ontario’s emission intensity of electricity generation is less than a third of Alberta’s or Saskatchewan’s.

So electricity use in Alberta or Saskatchewan, which generate most of their electricity with fossil fuel, has a radically higher environmental impact than similar use in Quebec or Ontario. The latter two generate most of their electricity with running water and uranium fission.

This has big implications for energy and environmental policies in Ontario (and across Canada). If major industrial energy users shifted more energy use from fossil fuels to hydro- or nuclear-generated electricity, this would dramatically reduce emissions. They would not need to curtail operations in order to curtail emissions. They just need to switch fuels.

This is why the current emphasis on electricity conservation—especially in Ontario—is so wrong-headed as a long term strategy. (It makes sense right now, since demand is so close to the limit of supply—we don’t really have a choice.) It is time to wean ourselves off the notion that increased electricity use is bad for our air.

We need more generation capacity. This means we need more nuclear.

I know—there are other zero-emission generation technologies, such as wind, solar, and micro-hydro. Could these play a significant role in Ontario or other provinces? I’ll deal with this question in upcoming posts. Stay tuned.

Other posts in this series

Nuclear power and hybrid vehicles in Ontario: McGuinty’s Kyoto opportunity, part I

Nuclear power and hybrid vehicles in Ontario: McGuinty’s Kyoto opportunity, part I (continued)

Friday, May 26, 2006

Nuclear power and hybrid vehicles in Ontario: McGuinty’s Kyoto opportunity, part I (continued)

My first post in this series (May 25) showed how a nuclear power expansion in Ontario would propel us to full Kyoto compliance in the electricity generation sector. The provincial government can accomplish this within the time it takes to refurbish and replace the laid-up reactors in the provincial fleet. I talked about how the resulting low-carbon electricity would be the basis for a major shift away from fossil fuel use in automobiles, via current and future hybrid-electric vehicle technology.

Here are some of the numbers.

Electricity generation is the third-largest source category for Ontario greenhouse gases (GHGs), behind transportation and industry. The generation sector emitted nearly 41 million tonnes of GHGs in 2003.

Nuclear generation emits no GHGs at all. Refurbishing or replacing the laid-up nuclear reactors would wipe out more than 20 million tonnes per year, bringing the generation sector down to just over 20 million tonnes. Kyoto requires a reduction to just over 25 million tonnes (i.e., six percent below the 1990 level of 26.6 million). Therefore, this would make Ontario electricity better than Kyoto-compliant.

Forgive me for blowing my own horn, but I have yet to see another plan that (a) is as specific, (b) results in GHG reductions that are even close to comparable in size, and (c) is as technologically and economically feasible.

(Some have suggested that Ontario’s coal phase-out will achieve a massive Kyoto reduction. That would be true if the plan were to just close down the coal stations and walk away. But everyone knows we have to replace their capacity. It would be technologically feasible to do that by building new natural gas–fired plants. But with gas four times as expensive as coal, such a move would not be economically feasible—in fact, it would be outright economy-hostile.)

Transportation-related emissions are currently by far the biggest source category for GHGs in Ontario (61 million tonnes in 2003). Greater consumer uptake of hybrid vehicles would begin to eat away at those 61 million tonnes. Plug-ins, when they become available, will accelerate this reduction.

Could hybrids reduce transportation emissions by 8 million tonnes per year? If they could, then Ontario, as a jurisdiction, would be totally Kyoto compliant.

“McGuinty’s opportunity, part II” is about chopping away at industrial emissions, the second-largest source category. Stay tuned.

Other posts in this series
Nuclear power and hybrid vehicles in Ontario: McGuinty’s Kyoto opportunity, part I

Thursday, May 25, 2006

Nuclear power and hybrid vehicles: McGuinty’s Kyoto opportunity, part I

Ontario is on the verge of becoming the very first North American jurisdiction to take a giant step to full Kyoto compliance.

Some time soon, energy minister Dwight Duncan will announce the provincial government’s plans for adding refurbished or new nuclear capacity to Ontario’s system. Even if Duncan limits his focus to just the laid-up Bruce units, he will give Ontario the ability to generate over 10 billion kWh of carbon-free power per year. That translates into an annual greenhouse gas reduction of over 10 million tonnes (because the nuke power will displace coal-fired power).

Replacing the laid-up Pickering units with new CANDUs (or even light water reactors) will add another 1,000 megawatts of capacity, and thereby annually displace a further 8–9 million tonnes of GHGs.

These moves would make Ontario’s generating sector totally Kyoto compliant, and bring the entire province within 8 million tonnes of full compliance.

How could we wipe out the remaining 8 million tonnes? My May 23 post talked about hybrid vehicles. Toyota, Honda, and Ford—all of whom build cars in Ontario—are expanding hybrid production. Ontario already offers a $2,000 sales tax credit to anyone who buys a hybrid vehicle in the province. The federal government should do the same, and include fleet purchasers.

If and when plug-in hybrids become available, Ontario will be well placed to accommodate them. And the power that recharges their batteries would be even less carbon-intensive than it is now. The carbon intensity of Ontario electricity is already pretty low: roughly 272 tonnes per million kWh—less than one-third that of Alberta’s system. (See Environment Canada’s greenhouse gas inventory, pp. 278–281 of the PDF).

Stay tuned for part II.

Tuesday, May 23, 2006

Renewable fuels: Harper goes on the (ethanol) wagon

Congratulations to the Prime Minister for taking a step to get ethanol into every gas tank in Canada. He’s addressing the right sector—transportation, which accounts for a quarter of Canada’s greenhouse gases (GHGs). Car and trucks are also the main man-made source of smog and other air pollution, so he’s on the right track there too.

(Don’t listen to groups like the Ontario Clean Air Alliance, who exaggerate the role of coal-fired power generation. Motor vehicles are a much bigger problem. See Environment Canada’s pollution emission summaries.)

Of course, Harper is stretching a bit when he touts ethanol’s GHG-reducing benefits. Ethanol won’t really make much of a dent in transportation-related GHGs, at least not a quantifiable dent. Comparing ethanol’s “well-to-wheel” emissions balance with gasoline’s is nearly impossible—each ethanol manufacturing plant is a unique nexus of feedstock and process, so you can’t generalize. What you can say is that exhaust emissions are cleaner from vehicles burning ethanol-blended fuel than from those burning straight gasoline or diesel.

Clean fuels like ethanol are one of the four pillars of the strategy for making cleaner cars.

The second pillar is next-generation catalytic converters that can catalyze harmful pollutants at low temperatures, something the current platinum-based ones can’t do. Also, engine heat causes platinum particles to accumulate unevenly, which reduces their catalytic effectiveness.

The third pillar is increased efficiency in current internal-combustion engine technology. Electronic controls that shut down some cylinders while the vehicle is at a cruising speed—already available in certain Chrysler and Chevrolet models—are one example.

The fourth pillar is the most important: using electricity to power cars. Manufacturers like Toyota, Ford, and Honda, to name a few, are already rolling hybrid-electric vehicles off assembly lines. This is a huge step in the right direction. But current hybrid technology has its limitations. It barely maintains the charge in a small battery, which means electric power doesn’t push current hybrid vehicles very far.

How to extend the electric car’s range? Enter the “plug-in hybrid.” Forward-thinking advocates like Andy Frank and Felix Kramer are urging automakers to build hybrids with bigger batteries that owners can recharge by plugging them into ordinary electric sockets, just like a block heater. Bigger batteries could move vehicles over 10 kilometers—a typical city trip—on pure electric power. (For more information on hybrid cars, see Bradley Berman’s newsletter.)

A plug-in hybrid vehicle burning ethanol blend, and equipped with an advanced catalytic converter, will be an environment-friendly vehicle. Experts predict there will be fifty vehicle nameplates with hybrid-electric powertrains by 2010. If Harper’s ethanol binge actually bears fruit, we’ll be two-thirds of the way to clean cars within five years.

And if the grid electricity that recharges the cars’ batteries is itself generated from low carbon sources—like water, wind, or nuclear—then emissions will drop even further. Stay tuned.

Harper and Kyoto: emissions trading in Canada?

In my May 19 post I harped on about the Emission Trading Scheme (ETS) in Europe. What does that have to do with Canada? The ETS covers companies roughly similar to what we in Canada call the Large Final Emitters (LFEs). With much prodding from activist Environment ministers in the former Liberal government, federal bureaucrats flirted with the idea of fining LFEs for excessive carbon emissions, instead of the ETS approach of making them trade carbon permits. They even put this into legislation (by adding CO2 and other GHGs to the CEPA in November 2005).

Stephen Harper’s Conservatives aren’t showing much interest in this approach. They want a made-in-Canada solution to the Kyoto impasse. At the same time, they’ve made favourable comments about the Asia-Pacific Partnership for Clean Development and Climate, a U.S.-led pact that includes most Pacific-rim countries that didn’t sign Kyoto (I know—so much for made-in-Canada). Recent comments by a senior non-elected NRCan official indicate that the federal bureaucratic aircraft carrier is heaving back into NRCan waters—i.e., away from Environment Canada, and away from regulating LFEs.

It is difficult to say how things will develop. The Conservatives have little interest in launching emissions trading in Canada. But they’re feeling the climate-change heat, especially after the Bonn conference last week. They have a precarious minority in Parliament, and probably won’t try to take CO2 back out of the CEPA. The Bloc or NDP might try to force the issue during upcoming ENVI (standing committee on Environment and Sustainable Development) hearings. If their members team up with the four Liberals on the committee, one of whom (Scott Brison) is trying to become leader, they could make this sessions’ ENVI hearings very interesting.

And we can’t ignore developments south of the border. Some high-profile U.S. lawmakers, like John McCain, are still interested in starting an emission-trading scheme. The Northeastern RGGI state-level initiative may look stillborn, but even if it dies something similar will re-emerge, like Obi-wan Kenobi, in a stronger form. Climate change is a growing issue. It is forcing its way up the agenda, and more American politicians are looking at it. They might try to put teeth into the Asia-Pacific Partnership.

Stay tuned, Canadian LFE.

Friday, May 19, 2006

The European emission trading scheme: market volatility teaches some early, hard lessons

There is a lot of flak and confusion surrounding the recent drama over the EU’s emission trading scheme (ETS). The price of carbon permits crashed last week when some market participants suddenly revealed they had more permits than expected. (For the scheme to be effective, permits must be scarce and therefore expensive enough to encourage emitters to invest in reduction technologies or processes.) The price then spiked when Germany announced it was rescinding its excess permits, thereby making permits scarce once again.

Meanwhile, a Scottish consultancy says that the ETS actually enabled Great Britain’s electric power generators—who make up the highest emitting sector in the country—to profit handsomely in the scheme’s first year of operation. Many believe the European Commission granted too many permits to this sector. As a result, utilities generated power using cheap, carbon-intensive coal rather than pricey, less-carbon-intensive natural gas. This allowed them to keep costs down, which, the consultants suspect, produced the alleged profits. If this is true, it will be an embarrassment for those who supported the ETS. The scheme is supposed to discourage business as usual, not reward it.

All of this points to problems in the way permits are allocated and reported. I have already mentioned the European Commission’s possible over-generosity in approving some countries’ emission forecasts (the so-called National Allocation Plans, or NAPs). Some feel permits should be allocated by auction rather than handed out for free, as they were in Phase 1 of the ETS. Others want an investigation into the late reporting of the excess permits.

This will produce a new round of political and bureaucratic wrangling, but these issues will be resolved. The fundamental problem is the yawning gulf between the (too-low) carbon price in the ETS-covered sectors and the carbon tax that will be required to reduce emissions in the non ETS-covered sectors. Many people feel existing taxes on gasoline are already too high. Over-generosity with the NAPs keeps the gulf wide. Look for the EC to tighten the allocation rules.