Alternative Energy Sources

San Jose State UniversityFX Rongère

January 2009

Introduction

The Time is now

San Jose State UniversityFX Rongère

January 2009

Renewable Energies: the Time is now

What has changed?1. Global Warming2. China and emerging countries3. Technology4. Risk Management5. Oil and Natural Gas tensions

Renewable Energies in power mix

Stronger driver

Weaker driver

1. Global Warming

Global Warming

A wise assumption

Wikipedia.orghttp://en.wikipedia.org/wiki/Image:Instrumental_Temperature_Record.png Dan Cayan

ETCC Summit 2007luncheon_cayan.pdf

Global Warming Evidences

Glacier retreat:

Whitechuck Glacier in North Cascades National Park has retreated 1.2 miles since 1973

1973 2006

Artic ice-pack shrinking

Global Warming Evidences

Ocean are more acidic

Global warming impact in California

Source: CEC 500-2006-077

Global warming impact in California

Potential impact in California

Dan CayanETCC Summit 2007luncheon_cayan.pdf

Source: CEC 500-2006-077

Global Warming

Sector contributions in the USA: 6,000 M Tons (metric) in 2006

CO2 Generation USA 2006

Transportation

31%

Electricity

Generation

39%

Industrial

14%

Commercial

4%

Non-Energy

use

7%

Residential

5%

Kyoto Protocol Reduction of GHG emissions by 5.2% for

industrialized countries (Annex1) in 2008-2012 compared to 1990

Signed and ratified

Signed ratification pending

Signed not ratified

Not signed

California AB 32

Signed on September 27, 2006 Goal: reduce California GHG emissions to 1990

levels by 2020: 427 MM tons of CO2 California Air Resources Board (CARB) is

leading the effort Executive Order S-3-05 proposed to reduce the

GHG emissions to 20% of 1990 by 2050 Means by 2020:

Energy Efficiency RPS to 33% Cap and trade with other

western states (WCI) Restrictions for

Transportation emissions

Targets for AB32

Source: Climate Change, Proposed Scoping Plan, CARB, October 2008

2. China and Emerging Countries

China is building 2 large power plants per week

China and emerging countries

Carbon intensity of developed economies

$ 50

,000

GDP/c

/y

$ 25,000 GDP/c/y

$ 12,500 GDP/c/y

Source: CECIntensity (Tons of CO2 per 1,000 US$ )

China and emerging countries

Carbon intensity of India and China

$ 12,500 GDP/c/y

China (2007)

China passed the USA for CO2 emissions in 2006 with 6,200 MM Tons/year

Intensity (Tons of CO2 per 1,000 US$ )

China and Emerging Countries

Most of the CO2 emission increase is due to developing countries

Carbon foot print

Action is required

3. Technologies

Technologies

Major technology improvements

Wind turbines

Bigger is better

Growth of wind turbines

Technologies

Solar cells: efficiency is everything

4. Risk Management

Risk Management

Electricity generation has moved from optimization to risk management

Hig

h i

nv

estm

ent

cost

-

Hig

h o

per

atio

n c

os

t

Time of operation per year

Base line

Peakers

Traditional portfolio

Risk Management

Typical cost variability

Investment cost ($/kW)

Ope

ratio

n co

st (

$/kW

h) Gas

Coal

Nuclear Hydro

Wind

Solar

5. Oil & Gas Tensions

From: www.dfo-mpo.gc.ca/oceans-habitat/oceans/oap-pao/img/hudsonrig.jpg

Oil and Gas Tensions

Oil Price1 barrel = 42 Gallons July 12, 2008

$147.27

January 16, 2009$36.51

Oil Price over 2008

Source: Crude Oil Price NYMEX, http://www.wtrg.com/daily/crudeoilprice.html

Weak dollar currency impact

Oil and Gas Tensions

Source: Federal Bank of Texas – Quarterly Report (2nd Quarter 2008)

Oil and Gas Tensions

Crude oil peak (M. King Huppert 1956)

Crude Oil Peak

Non OPEC countries

Oil and Gas Tension

The USA have been increasingly dependent on foreign oil

Oil and Gas Tensions

Natural Gas Price Volatility

Renewable in Energy mix

Electricity generation in the world

Power Generation in the USA

U.S. Power PlantsThe size of each circlerepresents the quantity of emissions in 2002

24 million tons

15 million tons 4 million tons Coal Gas Oil

Source: MJ Bradley and Associates

Nuclear19%

Hydro7%

Coal50%

Gas19%

Petrol3%

Renewables2%

USA Power Generation

CO2 Emissions in the USA and in California

In 2006, the USA emissions were 6,000 MM tons of CO2, they were 480 MM tons in California

Source: EPA, Inventory of U.S. Green House Gas Emissions and Sinks 1990-2006 February, 2008CARB, Climate Change Proposed Scoping Plan, a framework for change October, 2008

CO2 emission per capita

0.0

5.0

10.0

15.0

20.0

25.0

USA California

ton

s/ca

pit

a

Non Energy use

Comm.&Resid.

Industrial

Electricity

Transportation

California Energy Mix

California Gross System Power for 2006 (GWh)

Fuel Type In-State NW Imports SW Imports GSP GSP PercentageCoal 17,573 5,467 23,195 46,235 15.70%Large Hydro 43,088 10,608 2,343 56,039 19.00%Natural Gas 106,968 2,051 13,207 122,226 41.50%Nuclear 31,959 556 5,635 38,150 12.90%Renewables 30,514 1,122 579 32,215 10.90%

Biomass 5,735 430 120 6,285 2.10%Geothermal 13,448 0 260 13,708 4.70%Small Hydro 5,788 448 0 6,236 2.10%

Solar 616 616 0.20%Wind 4,927 244 199 5,370 1.80%

TOTAL 230,102 19,804 44,959 294,865 100.00%

Source: CEC http://www.energy.ca.gov/electricity/gross_system_power.html

Renewable Portfolio Standards

28 states have RPS

*Four states, Illinois, Missouri, Virginia, and Vermont, have set voluntary goals for adopting renewable energy instead of portfolio standards with binding targets.

State Amount Year

Arizona 15% 2025

California 20% 2010

Colorado 20% 2020

Connecticut 23% 2020

District of Columbia 11% 2022

Delaware 20% 2019

Hawaii 20% 2020

Iowa 105 MW  

Illinois* 25% 2017

Massachusetts 4% 2009

Maryland 9.50% 2022

Maine 10% 2017

Minnesota 25% 2025

Missouri* 11% 2020

State Amount Year

Montana 15% 2015

New Hampshire 16% 2025

New Jersey 22.50% 2021

New Mexico 20% 2020

Nevada 20% 2015

New York 24% 2013

Oregon 25% 2025

Pennsylvania 18% 2020

Rhode Island 15% 2020

Texas 5,880 MW 2015

Vermont* 10% 2013

Virginia* 12% 2022

Washington 15% 2020

Wisconsin 10% 2015

Renewable Portfolio Standard

Source: http://www.eere.energy.gov/states/maps/renewable_portfolio_states.cfm#map

Fast growing Renewable Energy Sector

Wind is booming in the USA

Fast growing Renewable Energy Sector

1999

2007

Total 16,819 MWAs 12/31/07

Source: awea

World wide

94,000

Solar is booming

Cumulative Solar Power Worldwide

0

2,000

4,000

6,000

8,000

10,000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Cum

ulat

ive

Inst

alle

d PV

pow

er (M

W)

Ethanol is booming

Historic U.S. Fuel Ethanol Production

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Millions

of Gal

lons

Ethanol plants (2007)

Biodiesel is booming

Historic U.S. Biodiesel Production

0

100

200

300

400

500

1999

2000

2001

2002

2003

2004

2005

2006

2007

Million

s of

Gal

lons

Bio-diesel plants (2008)

CleanTech Venture Capital

VC Investment in Clean Energy in North America

-

500

1,000

1,500

2,000

2,500

3,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

$MM

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Investment in Clean Energy

Renewable Energy: the Time is now

“The use of vegetables oils for engine fuels may seem insignificant today but such oils may become in the course of the time as important as the petroleum and the coal tar products of the present time”

“The fuel of the future is going to come from fruit like sumac out by the road, or from apples, weeds, sawdust-almost everything”

“I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that”

Rudolph Diesel 1912

Henry Ford 1925

Thomas Edison 1931

Our Nation will then have a major conservation effort, important initiatives to develop solar power, realistic pricing based on the true value of oil, strong incentives for the production of coal and other fossil fuels in the United States, and our Nation's most massive peacetime investment in the development of synthetic fuels. Jimmy Carter “State of the Union” 1980

Renewable Energy: the Time is now

Even if it was not the Time then

References “Our Changing Climate – Assessing the risk for California”,

CEC-500-2006-077 July 2006 www.awea.org www.ethanolrfa.org www.nbb.org “2006 Net System Power Report”, CEC-300-2007-007 April

2007 http://www.eia.doe.gov/ www.nrel.gov “INVENTORY OF U.S. GREENHOUSE GAS EMISSIONS AND

SINKS: 1990 – 2006”, EPA 430-R-08-005, April 5, 2008 “Carbon Dioxide Emissions from the Generation of Electric

Power in the United States”, DOE, July 2000 “Climate Change - Proposed Scoping Plan - A framework for

change”, CARB, October 2008