Triple Crunch Log
The triple crunch log
…a log compiled by Jeremy Leggett emphasising matters relevant to the energy-, climate-, and financial crises, and issues pertinent to society’s response to this triple crunch
This log represents one person’s reading experience of the unfolding dramas that most preoccupy him, among the all-too numerous dramas inherent in the human condition. I have compiled it while pursuing a full time day job in a solar energy company, and further part-time roles as a director in a private equity fund (throughout) and trustee of a charity (since 2006). Accordingly, there is far more source material from newspapers than academic journals and books, most of it culled and processed in evenings, weekends, and journeys. Magazine and journal reports are on the day of publication, some time (days) after the actual events referred to. Entries from monthlies appear on the first of each month. After the creation of the website (June 2009), references use url format where available.
boe: barrels of oil equivalent; CCS: Carbon capture and storage; CTL: Coal to liquids; mbd: million barrels per day; mcf: million cubic feet (bn: billion; tn: trillion etc); L: author’s library copy for further detail (either digital or paper); mcm: million cubic metres; oe: oil equivalent; p.a. per annum.
1.1.10.Head of FSA says next UK government must tax “bads” and spend on green stimulus. Adair Turner says “If we have to raise taxes – and we will to some extent – we can deliberately design those to tax bad environmental things, like overuse of fossil fuels, rather than good welfare-enhancing things, like employment for people.”1
Arup heads industry consortium aiming to retrofit UK homes with energy efficiency and create tens of thousands of jobs. GE and EDF are among the 25 companies involved in the Thames Gateway Institute for Sustainability, which plans to use the Thames Gateway as a showcase for what can be done. Funding is a big part of the project and the group is in “advanced talks with pension funds.”2
Oil company bosses will have to solve riddles to find success in 2010, a Petroleum Review editorial asserts. Opec has more than 3 mbd of spare capacity, nearly 80% in the GCC, and if they can maintain discipline €75 oil is here for a long while. So what do you do if your incremental cost of production is higher, as so much IOC production is? And when exploration and development costs doubled between 2005 and 2008, only falling back 20% in 2009? And when investment in the oil sector as a whole fell 19% in 2009, according to the IEA?3
Total has completed Europe’s first complete CCS system at Lacq. The 30 MW capacity plant targets sequestration of 60,000 tonnes of CO2 pa from a gas-fired power plant in a nearby depleted gas field. It uses oxycombustion (where the fuel is burned pure oxygen rather than normal air) to see if the CO2 emissions can be cut in half. The plant is intended to run for two years, at a rate of 200 tonnes captured per day (i.e. 120,000 tonnes in all). France has perhaps 400 mt of stored CO2 capacity in depleted oil and gas fields, and 1-25 billion tonnes of capacity including saline aquifers.4
Vattenfall’s Schwarze Pump CCS plant one year on has had a better than 90% capture rate in a 30MW capacity plant. Extracted gas is shipped 350km by lorry to a Gaz de France field for use in enhanced gas production. Vattenfall’s head of communications does not reckon the plant can be commercial if scaled up to service the 1 GW Schwarze Pumpe plant.5
Photon forecasts saturation in one or more key PV markets by 2013. This will cause an earthquake for the industry bigger than the capping of the Spanish market and the illiquidity in H2 2008. Prices will collapse, margins will fall, installation volumes will drop. Photon has identified seven potential interconnected drivers, including emerging impact on the profit of utility business, causing massive resistance to PV. This could happen as soon as 20 GW installed (2010 in Germany) and is likely by 50 GW (2012 in Germany).6
VC funding for solar plummets 62% to $1.45bn in 2009. That was 85 deals. 2008 saw $3.85bn in 92 deals. The biggest 2009 deal was Solyndra’s $100m.7
3.1.10.World Bank accuses Shell of walking away from solar PV module warranties in Sri Lanka, leaving thousands with no maintenance service as many Shell-manufactured modules display problems. Damian Miller of Orb Solar: “in Sri Lanka, poor customers with average earnings of $1,500-$2,000 a month have bought Shell's solar systems. The system is equivalent to 30% of their annual income,” he added. “They could only afford a system because they could get a loan from microfinance institutions or other banks. But now there are reports of thousands of Shell's [branded] solar panels failing in the field and Shell seemingly is not replacing them.”8
UK manufacturing sector refutes UK Chancellor’s claim of a British "green" jobs revolution, thanks to government support. Rather, the UK is in danger of “missing the boat”, the industry body, the EEF, says. Over 90% of the €2bn earmarked for the London Array, the UK’s biggest project, is being spent abroad. A Department of Business spokesperson says it is unfair to pick one project, albeit the world’s bigggest: "British companies are successfully competing for work on schemes around the world such as the Masdar city project