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ECON 225 > Chapter 18: Energy Policy and the Environment > Flashcards

Chapter 18: Energy Policy and the Environment Flashcards

1
Q

What are energy systems?

A

Energy Systems present major environmental challenges:

  • Heat and power
  • Transport

What are CT Options ⇒ I. Heat and Power Options & II. Transport Options

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2
Q

What are Heat and Power Options (1)?

A

Heat and Power

> Energy Efficiency: Often the cheapest way to meet system power needs

  1. Coal (27%)
  2. Nuclear (19%)
  3. Natural Gas (35%)
  4. Renewables (10%) [wind, solar, geothermal, biofuels]
  5. Hydroelectric Power (7%)
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3
Q

What is demand-side management?

A

Demand-Side Management: (DSM) Promote technologies use energy more efficiently (or at most efficient times of the day)

“Produce” energy by freeing up supply:

  • Weatherization
  • Cogeneration
  • Energy efficient lighting, industrial motors and cooling and cleaning appliances
  • Peak shifting

Most efficient time of the day: not use energy during peak time

  • Reduce need new time
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4
Q

Heat and Power

Coal

A
  • Decreased energy consumption from 48%-27%
  • Common poorer countriesWhy?(1) competition from natural gas and renewables;(2) aging plants facing new environmental regulations;(3) fear of future CO2
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5
Q

Heat and Power

What are the historical advantages and problems with coal?

A
  • Historical advantage:
    1. relaible, low-priced fuel - cheap and easy to mine
    2. well-developing tech
    3. abundance domestic resources
  • Problems:
    • Primary source global pollution
    • Criteria air pollutant (plus mercury)
    • Acid rain
    • Mining pollution and occuptational illness
    • impact transport on roads
    New tech: coal gasification (requires less energy) ⇒ Carbon capture
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6
Q

Heat and Power

What is Nuclear Economics?

A
  • 110 in US; only few new ones since mid-1970s

Is it cost-competitive? Is it clean? Is it “safe?

Nuclear Economics:

  • Expensive: ~$10 billion produce plant (but cheap to run)
    • High upfront cost but cheap marginal cost
    • Must access government funds
    People bad accessing risk and politics: RISK AVERSATION (overestimate odds nuclear meltdown)
    • Therefore, underbuild safe num plants
    • Government not willing spend money
    Existing plants: subsidized stay open fro greenhouse gas and job benefits
  • Two new reactors under construction:
  • Subsidize with:
    1. Loan guarentees
    2. Caps on accient damage liability

Tech risk: What if solar power rends more uneconomical? then big loss

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7
Q

Heat and Power

Environmental Impacts of Nuclear Power:

A

Benefits:

  • Low carbon source power (+)
  • Low air pollution (+)

Costs:

  • Radiation release and meltdowns {Chernobyl, Fukishima) (-)
  • Waste disposal (-)
  • Uranium mining impacts (-)
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8
Q

Heat and Power

Waste disposal for nuclear power:

A

High-level Waste:

  • Toxic hundreds thousands years
  • Spent fuel rods
  • Waste from weapons production

Storage:

  • Burial geologically stable formations or underground
  • Above-ground storage in pools on site in current situation
    • Lots concrete required & increase risk terrorism

Political oppotions of sitting in largely halted nuclear power

Low-level Waste:

  • Toxic for decades
  • Contaminted clothing
  • Medical and pharmaceutical waste
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9
Q

What are the challenges for nuclear power?

A

High centralized tech(in a words moving towards distributing, small scale (lower risk), decentralized energy production)

  • China: only country building lots new plants → drive tech advances - could make competitive

Where to locate plant?

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10
Q

Heat and Power

Natural Gas

A

Increase 20% to 35% energy share

Cleanest fossil fuel?

  • Cleaner coal - terms criteria pollutants
  • Yields 70% more energy each unit CO2

But,

(1)“fugitive emissions” of methane at drilling sights

(2) Fracking controversy: local water quality and other impacts (clean but unsafe)

(3) Natural gas hydrates: losts in the artic - hard to acess and not safety protected

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11
Q

Heat and Power

Hydroelectric Power

A

7% nation’s energy mix

  • Half nation’s potential hydro sites been developed
  • Dam projects have significant environmental impacts:
    1. Glooding ecologically valuable lands
    2. Negative impacts aquatic life
    3. Methane from flooded lands
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12
Q

Heat and Power

Active vs. Passive Solar

A

Active Solar:

  • Photovoltaic Power: produces electricity directly from solar cells
  • Solar thermal Power: focuses sun’s energy to heat liquid and drive stream turbine

Passive Solar:

  • Produces heat: mostly used heat houses and pre-heating water
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13
Q

Heat and Power

Solar Economics:

A
  • PV Panels seen rapid cost declines last decade ⇒ crossed threshhold from early-stage clean technology
  • Utility scale solar PV and utility scale solar thermal → cost-competitive many parts of the world.
    Rooftop (distrubtion) still expensive - cheaper fast

Issue: Intermitency

  • What do you do at night?
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14
Q

Heat and Power

Wind Power

A

Grow rate ~20% year

  • Cost competitive
  • Major environment impact is noise and aesthetics (Bat issues but not birds anymore)
  • Similar problem: Intermitency

Type: On-shore and off-shore

a. On-shore
1. Ugly
2. Loud

b. Off-shore:
Places greatest wind-potential → where tourists go

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15
Q

Heat and Power

Geothermal

A

Commercial scale: large amounts at little costs

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16
Q

Heat and Power

Geothermal

A
  • Burning mass
  • Releases CO2 but it is there - cost zero
17
Q

Heat and Power

How does distribution with wind and solar work?

Why is this an issue?

A

Wind and Solar Power: Storage and Transmission

  • Major obstacle utility scale: transportation, storage, and siting opposition
    • Storage needed as wind and solar produce power intermittent basis
    • Rapid declining battery prices are leading utility scale battery shortage facilities.

Cost-competitive solar+wind+storage portfolio prodive power 24/7

A Disruptive Energy Transition?

  • If distributed rooftop solar + batteries see continuations in cost declines → cheaper than grid power by 2025

Possible Result: rapid, disruptive change

  • Local siting opposition could slow down this move to “solar dominance”
18
Q

Steps for Policy Options?

What are the steps for policy options?

A
  1. Pick clean, low-cost tech
  2. Increase CT profitability by eliminating subsidies and/or internalizing social costs
  3. Promote tech directly
19
Q

Policy Options

Step 01: Pick clean, low-cost tech

Other:

Step 02: Increase CT profitability by eliminating subsidies and/or internalizing social costs
Step 03: Promote tech directly

A
  • Late-stage low-hanging fruit are efficiency, wind poweer, and utility scaler solar
  • Different for different regions
  • Early-stage CTs include rooftop solar, battery and other storage tech, geothermal, wave energy and other distribution power options
20
Q

Policy Options

Step 02: Increase CT profitability by eliminating subsidies and/or internalizing social costs

Others:

Step 01: Pick clean, low-cost tech
Step 03: Promote tech directly

A
  1. Cut Dirty Industry Subsidies
    • Tax breaks
    • Cash subsidies
  2. Internalize externalities through regulation
    • Largely done for coal if Obama era regulations are reinstated
    • Natural gas externalities, especially from fracking (still very unregulated)

Highlights of Subsidy Policy:

Energy markets not free market
- Substantial government intervention exists
- Current energy mix not “natural outcome”

21
Q

Policy Options

Step 03: Promote tech directly

Others:
Step 01: Pick clean, low-cost tech
Step 02: Increase CT profitability by eliminating subsidies and/or internalizing social costs

A

(1) Direct Promotion of CTs

Promoting energy Cts like rooftop photovoltaics done 3 ways:

  1. Develop better tech through R&D
  2. Capture cost saving through economies of scale
  3. Smooth path to adoption creating local siting and other regualtory policies favorable to CTs

(2) Direct Subsidy Policies

  • Subsidiy policy designed encourage CTs face followings problems:
    • Equity issues
    • Strategic benhavior
    • Free-riding
    • Rebound effects
  • Requiring recipients to pay at least a portion of the cost should reduce problems

(3) Price Policies

  1. Feed-in-tariff: electric companies must buy back electricity produced by households and business at set rate
  2. Purchase power agreement: Long-term contracts for power negotiated with small producers
  3. On-Bill-Recovery program and PACE: (Property accessed clean energy) Supports innvestment by property owners in effeciency and distributed solar
22
Q

Transportation

How does oil affect transportation?

A
  • Main driver transportation

Social Costs:

  1. Taxpayer subsidies
  2. Environmental externalities
  3. Energy Security
  4. US monopsony power in oil market
23
Q

What is the solution to transportation?

A
  1. Increase fuel efficiency
  2. Fuel switching
  3. Mode-switching
24
Q

Transportation

How to increase fuel efficiency:

A
  • Late stage CTs:
  • Concerns fuel-efficient cars: (safe, preformance, rebound effect)
25
Q

Transportation

What is fuel switching?

A

Fuel switching: encourage use other sources

Example: subsidies purchase electric cars or biofuels

26
Q

Transportation

What is mode-switching?

A

Mode-switching: stop driving essentially

How: taxes
1. Gas taxes
2. Auto emission tax
3. Feebates
4. Pay-by-the-mile auto insurance

Pay as you go: charge based on how much you drive and when and how fast you drive
Essentially the concept of a taxi

- Congestion pricing
- Zoning laws

Environmental beneftis of urban mass transit:

- Energy-efficient
- Reduce both local and globa air pollutants
- Slows grwoth total miles traveld by creating denser neighborhoods

How?

1. Remove subsidies for private transport
2. Internalize externalities 
3. Congestion or peak-load pricing
4. Dedicated traffic lanes
27
Q

What are the optimistic and pessimistic views on if “rapid energy transition from fossile fuels are posssible?”

A

Optimists

Renewable energy + batteries + electric vehicles + efficiency measures cheap and getting cheaper.

Reduce global warming at profit to both society and to private business

Pessimists

Renewable energy and EV options and limited promise

Easy efficiency measures will soon exhaused

Governemnt fail effectively promote technologies

28
Q

What are other issues?

A
  1. Equity issues
  2. Rebound effect
  3. Strategic behavior
  4. Free Riding

ECON 225 (22 decks)

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