Inside Sustainability: Facts, Figures, Bullshit - Part II: Alternative Energy
Global demand for energy is inexhaustible. In developed countries, populations continue to rise putting pressure on water, sanitation and other requirements. A growing taste for comfort and convenience demands air conditioning and heating systems, transport solutions, entertainment activities and a range of other related energy-hungry luxuries. The less developed world is also becoming more sophisticated and more populous and demand is growing from the BRIC nations, South Africa and other areas to place even more pressure on natural resources.
Renewables such as solar, wind and tidal options present an alternative to traditional fossil energies, but these are expensive and still largely in their infancy. This means the world must continue to look to oil and gas for the immediate solution. Existing oil fields in the more accessible regions are now mature, so the options are to improve techniques to squeeze the remaining reserves from these fields or to explore more remote parts of the world.
Going farther afield into deeper and less accessible offshore oil fields presents a range of challenges. Not least is the remoteness itself. Drilling in the Brazilian Basin involves using difficult deepwater techniques, but these fields have an established network of support facilities to hand. Exploring in the polar regions, the Falkland Islands or East Africa may offer no such support. Establishing an offshore operation requires support vessels, port facilities, warehousing, workshops, a supply chain and, of course, facilities for the workers themselves. And when the product is extracted, a shore-side production and transport infrastructure will also be needed. This support infrastructure comes at an enormous cost which is, itself, increased if the region in question lacks basic services such as a road network or any domestic facilities. With an offshore operation costing anywhere up to US$ 15 billion, the added cost of building the initial shore-side infrastructure is often enough to make some fields uneconomical to exploit.
Questions of investment
This raises the question of who pays. In general, the asset holder – the entity developing the field – pays for the offshore infrastructure required to extract the energy. But is it fair that they also pay to create the shore facilities required to support the offshore work, particularly if local services are non-existent? The answer is complex and involves many issues including the local government’s ability, or willingness, to invest. But without such investment, an offshore operation can either be stifled or hampered by costly delays, particularly if the supply base is some days sailing away.
With billions spent on developing and installing an offshore facility – and, perhaps, shore-side infrastructure as well – the asset holder must be assured that they will be allowed to continue their work without interference or significant increases in tariffs and taxes. Less stable regimes are sometimes a cause for concern.
Political implications present their own particular challenges. Oil majors have less clout than in years gone by and national oil companies and local governments are exerting more influence. Governments issue contracts, set tariffs, impose taxes and can even force mergers, partnerships or nationalisation. Political tensions between countries can cause difficulties and delays with nations competing with their neighbours to provide optimum operating environments in return for a slice of the action. But less experienced governments might insist on a price that makes extraction just too costly. Read on...
Famous as the source of the Blue Nile, which flows from Lake Tana in the Ethiopian highlands, this East African country is far less well-known for its promising groundwater potential.
But the Ethiopian government is now planning to tap into its largely unexploited groundwater resources, both to sustain a population of over 90 million – many of whom suffer from water shortages - and to alleviate the impacts of climate stresses.
The Ministry of Water and Energy (MoWE) hopes to increase potable water coverage to 98.5 percent of households nationwide by the end of next year, from 68.5 percent in 2013. And for that it will need new water supplies.
Scientists from the British Geological Survey and University College London estimated in a 2012 study on Africa’s underground water reserves that Ethiopia has groundwater storage of 12,700 km³, much less than some of its northern neighbours.
Large sedimentary aquifers in North Africa contain a considerable proportion of Africa’s groundwater, with Libya, Algeria, Sudan, Egypt and Chad having the biggest reserves, the researchers noted. But many of these Saharan aquifers are not actively recharged, having been filled more than 5,000 years ago when the climate of the area was wetter, they added.
According to Zebene Lakewe, a hydrologist at Ethiopia’s MoWE, studies show the country’s groundwater is recharged by 36 billion m3 per year thanks to precipitation and other surface water – a substantial amount compared with other less rainy countries in the region, such as Sudan and Egypt.
Pastoralists are among Ethiopia’s main users of groundwater, mainly in lowland areas where there is a scarcity of surface water. They sink small boreholes for subsistence herding and agriculture.
But the government still doesn’t know much about this natural resource. It is currently undertaking a survey of groundwater, hoping to cover 22.7 percent of the total area thought to have underground reserves by 2015, up from just 3 percent surveyed in 2010.
While the ministry has yet to fully assess Ethiopia’s groundwater potential, Seifu Kebede, head of the School of Earth Sciences at Addis Ababa University, believes the benefits are already clear.
“If there were no rainwater in Ethiopia for eight consecutive years, we have the potential of our groundwater to sustain us through that period, and this can act as a climate buffer,” Kebede said.
Groundwater can be depleted through overuse, but it has the potential to outlast surface water sources for some time, as aquifers are less exposed - and thus more resilient - to extreme weather like drought. Read on...
From Texas to California, drilling for oil and gas is using billions of gallons of water in the country's most drought-prone areas.
America's oil and gas rush is depleting water supplies in the driest and most drought-prone areas of the country, from Texas to California, new research has found.
Of the nearly 40,000 oil and gas wells drilled since 2011, three-quarters were located in areas where water is scarce, and 55% were in areas experiencing drought, the report by the Ceres investor network found.
Fracking those wells used 97bn gallons of water, raising new concerns about unforeseen costs of America's energy rush.
"Hydraulic fracturing is increasing competitive pressures for water in some of the country's most water-stressed and drought-ridden regions," said Mindy Lubber, president of the Ceres green investors' network.
Without new tougher regulations on water use, she warned industry could be on a "collision course" with other water users.
"It's a wake-up call," said Prof James Famiglietti, a hydrologist at the University of California, Irvine. "We understand as a country that we need more energy but it is time to have a conversation about what impacts there are, and do our best to try to minimise any damage."
It can take millions of gallons of fresh water to frack a single well, and much of the drilling is tightly concentrated in areas where water is in chronically short supply, or where there have been multi-year droughts.
Half of the 97bn gallons of water was used to frack wells in Texas, which has experienced severe drought for years – and where production is expected to double over the next five years.
Farming and cities are still the biggest users of water, the report found. But it warned the added demand for fracking in the Eagle Ford, at the heart of the Texas oil and gas rush, was hitting small, rural communities hard.
"Shale producers are having significant impacts at the county level, especially in smaller rural counties with limited water infrastructure capacity," the report said. "With water use requirements for shale producers in the Eagle Ford already high and expected to double in the coming 10 years, these rural counties can expect severe water stress challenges in the years ahead."
Local aquifer levels in the Eagle Ford formation have dropped by up to 300ft over the last few years.
A number of small communities in Texas oil and gas country have already run out of water or are in danger of running out of water in days, pushed to the brink by a combination of drought and high demand for water for fracking.
Twenty-nine communities across Texas could run out of water in 90 days, according to the Texas commission on environmental quality. Many reservoirs in west Texas are at only 25% capacity.
Nearly all of the wells in Colorado (97%) were located in areas where most of the ground and surface water is already stretched between farming and cities, the report said. It said water demand for fracking in the state was expected to double to 6bn gallons by 2015 – or about twice as much as the entire city of Boulder uses in a year.
In California, where a drought emergency was declared last month, 96% of new oil and gas wells were located in areas where there was already fierce competition for water. Read on...
India and China are in a race to build a presence in the energy-rich Arctic region.
After a lengthy courtship, China and India formalized their relationship with the Arctic Council in May 2013 by gaining admission as official observer states. In the months since, both countries have been actively seeking influence with the Council’s permanent members to further establish footholds in a region certain to emerge as a central arena of 21st century geopolitics, scientific research and commerce. But while public statements out of Beijing and New Delhi since May have often cited climate change research as the primary driver of the two countries’ Arctic engagement, the real underlying motive remains securing access to the region’s greatest natural treasure: energy.
In recent years, the U.S. Geological Survey has estimated that the polar north may hold up to 13 percent of the world’s undiscovered oil reserves—potentially as many as 160 billion barrels—and as much as 30 percent of the world’s untapped natural gas supplies.
With climate shifts in the Arctic raising temperatures and reducing sea-ice coverage, the region has become increasingly accessible with each passing year, heightening the potential for commercial development. This has raised the prospects for not only maritime shipping across Eurasia’s northern rim, but also seabed energy-drilling operations on the continental shelves of the Arctic littoral states, where much of the oil and gas reserves are thought to lie.
As a result, since gaining observer status China and India have spent considerable time cultivating ties with key energy-rich Arctic littoral states, including Iceland, Norway and Russia. (In the case of Norway, China’s path has been somewhat tricky; Beijing is inching closer to reconciliation with Norway after a diplomatic row triggered by the award of a 2010 Nobel Peace Prize to Liu Xiaobo, a well-known Chinese dissident, and the two countries have been tentatively considering a joint venture to explore for oil in the waters between Norway and Iceland.) With a significant portion of the Arctic’s projected seabed energy reserves located within these states’ respective exclusive economic zones, China and India are pursuing closer diplomatic and private-sector relationships with these countries as a means to put themselves in a favorable position to receive future Arctic energy exports, and assist where applicable in the development and shipment of offshore oil and gas supplies.
The urgency of the mission that China and India feel stems from the fact that each faces significant energy shortfalls in the years ahead that threaten to decelerate the economic growth they have enjoyed in recent decades. Despite recent headline-earning investments in their domestic renewable energy industries, Beijing and New Delhi view Arctic fossil fuels as key elements in their strategies to diversify energy import supply lines, reduce reliance on Middle Eastern oil, and strengthen energy security at home. At the same time, both countries are aware that energy resource extraction in such a harsh and environmentally sensitive location will have to be undertaken carefully. The Arctic North possesses a variety of coastal and maritime ecosystems that support wildlife and fisheries upon which many of the Arctic littoral’s indigenous populations depend for sustenance and livelihoods. Oil spills in this part of the world could prove particularly harmful as a result, since no local infrastructure exists to conduct effectively and timely clean-up operations. Such spills could also be damaging from a public relations perspective. Given that environmental accidents in the Arctic Circle linked to Chinese and Indian energy development would threaten significant damage to local and international perceptions of these two countries as responsible Arctic stakeholders, both China and India will be keen to ensure that any energy-development ventures they engage in are undertaken with the necessary precautions and designed to leave as small an environmental footprint as possible.
In its early stages as Arctic Council observer state, India has eschewed developing close energy ties with Europe’s Arctic states in favor of hitching its wagon firmly to Russia, which has taken an early lead among Arctic littoral states in offshore commercial development of oil under the Arctic seabed. In December 2013, the Russian energy firm Gazprom started pumping oil from a platform in the Pechora Sea for the first time, a considerable achievement given that similar efforts launched by Royal Dutch Shell off the Alaskan coast in 2012 were called off due to logistical difficulties. When Prime Minister Manmohan Singh visited Russia less than two months before Gazprom’s landmark operation, the two countries released a joint statement stating that the international arm of India’s Oil and Natural Gas Corporation (ONGC) had “interest in participating along with Russian companies in exploration for hydrocarbons in the Arctic region.” With ONGC possessing more than 40 years’ worth of offshore drilling experience and Gazprom owing drilling rights for some 30 Arctic oil and gas fields, the stage for potentially significant bilateral private sector collaboration is set. Read on ...
European Union governments and the bloc’s executive arm are splitting over how to guarantee electricity supply as the region builds more renewable power.
Germany, France and the U.K. are following nations from Spain to Greece in developing programs called capacity mechanisms to pay utilities to keep plants on standby from as early as 2016. The European Commission instead plans a single market by the end of the year. Supply and demand in 15 markets was for the first time linked today through a daily auction.
Europe’s power market relied on intermittent wind and solar output for a record 7.4 percent of generation in 2012, a share poised to reach 18 percent by 2020, according to Energy Brainpool GmbH & Co. KG., a Berlin-based consultant. The renewable energy boom cut profitable hours at coal and gas-fired plants and IHS Inc. estimates that as much as 60 percent of the region’s gas capacity isn’t covering costs and may be at risk of closure by 2016.
“Capacity mechanisms are popping up like mushrooms all over Europe,” David Viduna, head of long-term origination at Prague-based utility CEZ AS, said in an interview in Vienna on Jan. 29. “The point is that all those efforts need to be harmonized” because payments in one country affect the competitiveness of plants in neighboring countries, he said.
Nations are seeking to prevent blackouts as utilities plan the biggest-ever wave of shutdowns of unprofitable power plants. As much as 110 gigawatts of gas-fired capacity probably will shut in the next three years, according to IHS, a researcher based in Englewood, Colorado. One gigawatt is enough to power about 2 million European homes.
U.K. utilities from Centrica Plc to SSE Plc will be able to bid in an auction this year to offer backup power plants from 2018 at the lowest possible cost, according to the Department for Energy and Climate Change.
“We need more generation,” Michael Fallon, U.K.’s energy minister, said Jan. 21 in an interview. “We’re losing a fifth of our capacity over the next 10 years.”
Even with 58 nuclear reactors designed to operate 24 hours a day, France doesn’t have enough capacity to meet peak winter demand. Europe’s second-biggest power user may have to import almost 3,600 megawatts during cold snaps this winter, according to RTE, Electricite de France SA’s grid unit. There’s a “moderate risk of supply shortages,” the network manager said in a Nov. 7 report.
“France is convinced of the need” to take action to prevent blackouts, Robert Durdilly, president of the Union Francaise de l’Electricite, which represents power producers and distributors, said Jan. 29 in an interview.
From 2016, suppliers without enough capacity to meet the highest peak in demand from their customers must purchase certificates from generators guaranteeing backup supply, according to Commission de Regulation de l’Energie, the Paris- based regulator.
Germany, Europe’s biggest market, is paying plants deemed essential for power supply stability, including EON SE’s Irsching gas-fired plant in Bavaria, on an individual basis. Details have not yet been agreed to for a longer-term measure, according to a text adopted at a meeting of Chancellor Angela Merkel’s cabinet in Meseberg that ended Jan. 23. Read on...
In a rare display of regional cooperation, representatives of Israel, Jordan and the Palestinian Authority signed an agreement on Monday to build a Red Sea-Dead Sea water project that is meant to benefit all three parties.
The project addresses two problems: the acute shortage of clean fresh water in the region, especially in Jordan, and the rapid contraction of the Dead Sea. A new desalination plant is to be built in Aqaba, Jordan, to convert salt water from the Red Sea into fresh water for use in southern Israel and southern Jordan — each would get eight billion to 13 billion gallons a year. The process produces about the same amount of brine as a waste product; the brine would be piped more than 100 miles to help replenish the already very saline Dead Sea.
Under the agreement, Israel will also provide Amman, the Jordanian capital, with eight billion to 13 billion gallons of fresh water from the Sea of Galilee in northern Israel, and the Palestinians expect to be able to buy up to eight billion gallons of additional fresh water from Israel at preferential prices.
The agreement was signed at the Washington headquarters of the World Bank, a sponsor of the project.
The water level in the Dead Sea, an ancient salt lake whose shores are the lowest dry places on the earth’s surface, has been dropping by more than three feet a year, mainly because most of the water in the Jordan River, its main feeder, has been diverted by Israel, Jordan or Syria for domestic use and irrigation; very little now reaches the lake. Potash industries on either side of the lake have also had a detrimental impact. About 25 miles of the Dead Sea’s shoreline lie in the Israeli-occupied West Bank and are claimed by the Palestinians as part of a future state.
Israeli officials said that proposals would soon be solicited internationally from private companies to build and operate a desalination plant in Aqaba, which is meant to operate on a commercial basis, selling the potable water to Jordan and Israel. A brine pipeline to the Dead Sea, estimated to cost at least $240 million, would be financed by donor countries and organizations, with the World Bank providing a bridge loan.
The brine pipeline will run through Jordanian territory, because the planning process in Jordan is quicker and less liable to be slowed by the objections of environmentalists and other opponents, according to Israeli officials. They said that the added brine’s effects on the Dead Sea would be carefully monitored. Read on ...
From California to the Middle East, huge areas of the world are drying
up and a billion people have no access to safe drinking water. US
intelligence is warning of the dangers of shrinking resources and
experts say the world is 'standing on a precipice'
On 17 January, scientists downloaded fresh data from a pair of Nasa satellites and distributed the findings among the small group of researchers who track the world's water reserves. At the University of California, Irvine, hydrologist James Famiglietti looked over the data from the gravity-sensing Grace satellites with a rising sense of dread.
The data, released last week, showed California on the verge of an epic drought, with its backup systems of groundwater reserves so run down that the losses could be picked up by satellites orbiting 400km above the Earth's surface.
"It was definitely an 'oh my gosh moment'," Famiglietti said. "The groundwater is our strategic reserve. It's our backup, and so where do you go when the backup is gone?"
That same day, the state governor, Jerry Brown, declared a drought emergency and appealed to Californians to cut their water use by 20%. "Every day this drought goes on we are going to have to tighten the screws on what people are doing," he said.
Seventeen rural communities are in danger of running out of water within 60 days and that number is expected to rise, after the main municipal water distribution system announced it did not have enough supplies and would have to turn off the taps to local agencies.
There are other shock moments ahead – and not just for California – in a world where water is increasingly in short supply because of growing demands from agriculture, an expanding population, energy production and climate change.
Already a billion people, or one in seven people on the planet, lack access to safe drinking water. Britain, of course, is currently at the other extreme. Great swaths of the country are drowning in misery, after a series of Atlantic storms off the south-western coast. But that too is part of the picture that has been coming into sharper focus over 12 years of the Grace satellite record. Countries at northern latitudes and in the tropics are getting wetter. But those countries at mid-latitude are running increasingly low on water.
"What we see is very much a picture of the wet areas of the Earth getting wetter," Famiglietti said. "Those would be the high latitudes like the Arctic and the lower latitudes like the tropics. The middle latitudes in between, those are already the arid and semi-arid parts of the world and they are getting drier."
On the satellite images the biggest losses were denoted by red hotspots, he said. And those red spots largely matched the locations of groundwater reserves. Read on...
China’s continuing drive to reduce the share of coal in the nation’s energy mix is boosting the prospects for natural gas and renewable energy sources, according to analysis just published by IHS Energy Insight. Beijing-based analyst Olivia Boyd comments that while the 2014 energy targets and policy priorities recently announced by the National Energy Administration (NEA) “do not contain any significant deviations from past policy announcements” they do “in some cases reflect an intensification of previously announced targets”.
One example of this intensification is the target to reduce the share of coal in the energy mix from 67% in 2012 to 65% in 2014. This, says Boyd, “represents an acceleration of previous plans, which envisioned coal coming down to 65% of total energy consumption by 2015”. Reducing coal consumption growth has become a priority for the government because it has come under increasing pressure to address the negative environmental effect of coal use, particularly air pollution.
“In the wake of record-breaking air pollution levels in major coastal cities such as Beijing and Shanghai in 2012/13,” says Boyd, “the government has stepped up its programme of switching coal-fired capacity to natural gas, with priority sectors including residential heating, industrial boilers, and power generation.”
In addition to capping coal consumption, China has enacted among the world’s strictest nitrogen oxide, sulphur dioxide, and particulate emissions limitations for the electricity sector and industry.
Confronting natural gas shortages
“These policies,” says Boyd, “aimed at controlling environmental pollution, have accelerated both the growth of natural gas consumption and the need to ramp up domestic supply, pipeline and LNG imports, and gas transmission infrastructure, as natural gas shortages have recently forced the government to temporarily scale back some of its coal-to-gas switching ambitions.”
In the upstream sector, the target is to increase gas production to 131 Bcm, up by an ambitious 12% on 2013, with a focus on increasing exploration activity and ramping up production from China’s northwest and the Erdos Basin, Bohai Bay, Sichuan and new offshore developments, such as CNOOC’s deep-water developments in the Pearl River Basin.
The government hopes that shale gas will contribute a growing share of production, but its original shale gas target of 6.5 Bcm of production in 2015 is unlikely to be achieved. “The government clearly expects 2014 to be the year that China’s shale gas programme sees a significance breakthrough,” says Boyd. “The NEA has set a shale gas production target of 1.5 Bcm, far higher than 2013 production levels of just over 200 MMcm.”
Even 1.5 Bcm would represent only a tiny proportion of China’s current gas demand – around 1%. That said, BP, in its recent Energy Outlook 2035, comments that it sees China as “the most promising country for shale growth outside North America, accounting for 13% of world shale gas growth . . . by 2035”. Read on...
Global installed wind power capacity increased by 12.4 percent to more than 318 gigawatts in 2013 led by China and Canada, industry figures showed on Wednesday.
Capacity rose from around 283 GW at the end of 2012, data from the Global Wind Energy Council (GWEC) showed.
However, installations slowed in 2013 to about 35.5 GW, almost 10 GW less than a year earlier mostly on a drop in the United States.
"Outside of Europe and the U.S., the global market grew modestly last year, led by China and an exceptionally strong year in Canada," GWEC Secretary General Steve Sawyer said in a statement.
"China is a growth market again which is good news for the industry. The government's commitment to wind power has been reinforced once again by raising the official target for 2020 to 200 GW, and the industry has responded."
China's installed wind capacity was 91.4 GW at the end of 2013, up from 75.3 GW at the end of 2012.
Some 16 GW of new capacity was added in 2013, the largest amount anywhere in the world.
Canada installed 1.6 GW of new capacity, more than the United States.
Emerging markets also showed a steady stream of installations in Africa, Asia and Latin America, the data showed, while Europe's growth was more sluggish.
Europe's installed wind capacity rose to almost 121.5 GW from nearly 110 GW. Read on...
For decades large-scale hydropower developments have been viewed as something of a pariah within the renewable energy sector. Indeed, despite an acknowledged contribution to sustainable energy development — hydropower’s global kWh contribution dwarfs all other renewable technologies — it has largely been excluded from considerations that benefit other forms of renewable power generation and has weathered widespread criticism over projects deemed unsustainable.
In 2012, according to Pakistan’s Board of Investment, the 147-MW run-of-river Patrnid Hydropower Project was set as an Independent Power Producer (IPP) development. Backed by Korea’s K-Water and Star Hydro Power Limited (SHPL), 25 percent of the US $400 million cost of the development on the river Kunhar will come from them, while 75 percent will be financed by banks, including Export Import Bank of Korea, Asian Development Bank, International Finance Corporation and Islamic Development Bank.
Following this deal a consortium of Korean companies — again including K-Water but this time with Korean Midland Power and Posco Engineering and Construction — signed memorandums of understanding for US $3 billion worth of deals for two hydropower plants on the Indus in the Kohistan-Khyber Pakhtunkhwa district of Pakistan: the 665-MW Lower Pallas Valley and the 496-MW Spat Gah plants.
Africa is also benefitting from this type of trans-national infrastructure investment. In the country’s largest private sector investment to date, 2012 saw the commissioning of Uganda’s 250-MW Bujagali hydro station, which meant electricity production exceeded demand for the first time.
Subsequently, in mid-2013, the country signed a deal with China’s Sino-Hydro Group Ltd for the construction of the $1.65 billion Karuna hydropower project on the White Nile. This 600-MW installation is backed by Chinese credit worth a reported 15 percent of the total cost.
In September 2013 Uganda's President, Yoweri Museveni, launched construction of Karuma, which is due for completion in 2018.
The U.S. is also reportedly getting in on the action, considering financing some of the Democratic Republic of Congo’s $12 billion Inga 3 hydropower project. According to an interview with Bloomberg, Rajiv Shah, the head of the U.S. Agency for International Development, reportedly said, the U.S. may add the project to a $7 billion U.S. government energy program known as Power Africa.
Along with these types of trans-national investment deals supporting large-scale development opportunities that were previously out of reach, private sector investment is also seeing growth.
This development has often been accompanied by renewable energy support policies.
With interest and investment in hydro picking up, investment in technology research and development has followed suit. Of particular note is the increased investment in tidal and marine kinetic technologies, environmentally benign and fish friendly architecture and pumped storage.
IHA estimates that some 516 MW of tidal and ocean hydropower was installed by the end of 2012, with a pipeline of at least 3 GW in the longer term.
Variable speed pumped storage turbines have also been a particular focus in light of their role in supporting variable output renewable energy technologies such as wind and solar.
For instance a paper published recently by Stanford University researchers examined the cost effectiveness of energy storage systems, finding that pumped-storage hydropower offers not only one of the highest ratios in terms of "Energy Stored on Invested" of any storage system examined, but also provides a number of ancillary benefits that make it an attractive means of capturing excess energy. Read the entire article...