In light of my recent studies into transportation energy efficiency I’ve learned a lot more about the energy budget of the USA and the world.

One conclusion from those investigations is that if you are serious about greening the world, there are really only a few areas worthy of serious effort. Yes, you can make a difference anywhere, and if all you’re going to make is a personal difference there are scores of things you can change in your life to reduce your own footprint. But if you want to make a real difference, by affecting groups of people and whole sectors, the choices are few and clear.

Cars

The footprint of cars and light trucks is so large — 63% of transportation energy — that I am tempted to say that if you’re not working on cars, you’re not working on being green. Freight trucks are another 17% of transportation energy. Transit is in the noise — it only has bearing in that it can, in the rare cases it is done well, take people out of cars to make their travel greener. These numbers are huge, so of course differences can be made in the other transportation areas, but if the question of cars and trucks is not fixed, the rest of transportation barely matters in comparison. The one exception is jet airliners, which at 9% take the next largest shot of the energy budget.

However, transportation is “only” 28.5% of the total U.S. energy budget, so it’s not quite the only place to go. However, adding the energy cost of manufacturing cars bumps them up to around a third.

Electricity Generation

The rest of the energy budget is split 32% industrial (including making cars,) 18% commercial and 21% residential. But 70% of residential energy, 78% of commercial energy and 34% of industrial energy comes from electricity. (Just .3% of transportation energy does, but that will change if we move to electric cars.)

All these energy uses are quite diverse. There are many targets to attack, all worthy within their own scope but there’s only one truly big target, and that’s electricity generation. In the USA that’s currently 50% coal and 20% natural gas. So if you’re working to fix this — with renewable energy or nuclear — then you’re working on one of the big problems. Right now hydro and nuclear are the largest non-fossil power generators. All the other renewables are currently in the noise.

Agriculture

One of the biggest commercial users of energy is agriculture. It’s estimated that the equivalent of 400 gallons of gasoline per person in the USA is used to grow our food. Part of that is that 5% of all natural gas goes into making fertilizer. This makes this a particularly large non-electrical target. In addition, most of the methane we emit comes from livestock. I need to do more research but currently agriculture looks like another big target.

So it’s not quite true that if you’re not working on cars, you’re not working on being green, but it does suggest that projects like the Automotive X-Prize and DARPA Grand Challenge are among the most important projects in the world for going green.

As part of my research into robotic cars, I’ve been studying the energy efficiency of transit. What I found shocked me, because it turns out that in the USA, our transit systems aren’t green at all. Several of the modes, such as buses, as well as the light rail and subway systems of most towns, consume more energy per passenger-mile than cars do, when averaged out. The better cities and the better modes do beat the cars, but only by a little bit. And new generation efficient cars beat the transit almost every time, and electric scooters beat everything hands down.

I encourage you to read the more detailed essay I have prepared on whether green U.S. transit is a myth. I’ve been very surprised by what I’ve found. It includes links to the sources. To tease you, here’s the chart I have calculated on the energy efficiency of the various modes. Read on, and show me how these numbers are wrong if you can!

I have added a follow-up post on the comparison between lots of small personal ultralight vehicles and larger shared transit vehicles.

Note: If you want to comment on the cyclist figure, there is different thread on the fossil fuel consumption in human food which details these numbers and invites comments.

A subject of debate in environmental circles revolves around whether the successful 70s opposition to nuclear power was a wise idea. At the time, it was never thought of as a choice between nuclear and coal, it was thought of simply as fear of the dangers of nuclear. Unexpectedly, it ended up being a push for coal, which of course kills far more people and emits more radiation than U.S. nuclear plants ever have.

But today, the big question remains of what to do with the waste. As I wrote earlier, if you accept the most dire global warming predictions, the worst waste predictions are quite tame by comparison.

But here’s another way to examine the question, in terms of moral duty. Nuclear power has a serious waste concern, and it is as yet uncertain how best to deal with it. But now, fossil fuels also have a serious waste concern from both particulates and CO2, and it is also uncertain how to deal with it. However, in many circles, there is very high confidence that there are extreme dangers from CO2.

Here’s the difference: What is done by the CO2 we emit is done to the whole world. The problems caused by it will be borne by the whole world. In fact, there are good arguments that while the USA and developed world produce most of the CO2 emissions, they will suffer a minority of the damage. The problems of nuclear power, however, largely remain within the country. If there is a nuclear waste problem, it’s our problem. If there is a meltdown, it’s our land that is ruined, our people killed. (At least in places like the USA where there are not foreigners living near/downwind from most nuclear reactors.)

Both choices, nuclear and fossil have predicted risks. But very different sets of people who pay the price. This makes it hard to say that the moral choice is fossil fuel over nukes.

Well, of course, the even more moral choice is to cut back on energy use and develop cleaner power. And both of those tasks are being worked hard upon. But it would be foolish to just assume we will reach quick success on this, and not still have to make the nuclear vs. coal/fossil choice for a few decades. Perhaps we won’t, but can we bet on it?

As always, there are some complicating issues. Nuclear power sometimes begets nuclear weapons, so it can’t be used everywhere. And it can certainly be argued that the problems of nuclear waste are visited not upon foreigners, but upon our descendants. But again, they are our descendants, and will still have more right to foist problems on them than we do on remote peoples. This argument could also apply to environmentally destructive hydro power, which again destroys our river valleys and animals, not somebody else’s.

It is, of course, for this very reason that fossil fuels have had some advantages. Almost all pollution has been driven by the fact that you can foist your waste problems off on somebody else. If they lived in the same legal jurisdiction, they eventually got power to stop you, but it always took a while.

It was good to see a major newsmagazine like Time do its cover story on the corn ethanol scam this week. I’ve been worried about corn as a source of biofuel for some time. So far, it makes no sense, and is only used because of the power of the corn lobby and senators from agricultural states. I’ve read various arguments (all with political agendas) about just how much petrofuel is burned in order to make corn based ethanol. Some figures calculate it takes more petrofuel than you get ethanol out — in other words, by putting ethanol in your car, as we all do 10% during the summer in California, you’re actually burning more fossil fuel than you would otherwise. E85 (85% ethanol) is even worse. Other figures, supported by the corn ethanol lobby, say it is not nearly that bad, but even with their best numbers they can only make it a modestly positive gain.

It’s hard to work out who to believe, but the most telling fact I learned was this: None of the corn-ethanol producers run their whole system — tractors, trucks and ethanol conversion plants — on their own product. Since they should be able to get their own product at a discount, this makes no sense.

Adding to the confusion is that a gallon is not a gallon. In particular, a gallon of ethanol has only 70% of the energy of gasoline, so you’ll only get 70% of the mileage. (Diesel has 12% more energy per gallon than gasoline, which is the real reason why diesel cars get better mileage. They aren’t really much better per kg of carbon burnt.)

The only ethanol source that’s provably positive is sugar cane. More on that later. There are a lot of worthwhile efforts to develop ethanol from cellulose (like switchgrass) or algae, and they could make a real difference. The corn lobby is not that excited about those.

In spite of this, we watch ads describing E85 cars as green, when they are anti-green. People see E85 priced 19% cheaper than gasoline (national average) and think it’s some bargain. It isn’t.

Corn for ethanol is driving up the price of corn. That make more land get converted to corn. In turn, Time found, that was making shifts in land use in Brazil, and the result was that more land in the rainforest is being cleared (often by burning) than ever before. But now there’s a horrible irony — all this is happening because people imagine they are doing something green by using corn based ethanol. (Brazil uses sugarcane for its own ethanol production.)

Now on to sugar. In the USA, sugar costs more than twice as much as the rest of the world. That’s why Coke from Mexico has real sugar, because sugar is cheap there. In the USA it has — surprise, surprise — high fructose corn syrup.

Sugar is expensive in the USA because there are import taxes and quotas that benefit a fairly small number of families who are really sugar agribusinesses. Those families love their little monopoly on sugar production of course, and fight to defend the laws that provide it. But the corn lobby joins in to help of course, to sell more high fructose corn syrup. (Though now HFCS has dropped in price to be closer to the world sugar price so we would not entirely get rid of it.)

We need to:

• Immediately remove laws that require the addition of ethanol to gasoline. Find something besides MTBE or ethanol if need be.
• Clearly label corn based ethanol and E85 as lower mileage and non-green, punishing those who advertise it as green. Or make them run their machines on their own ethanol and publish the numbers.
• Put more into research of truly net-positive biofuels that don’t use existing crop-lands or involve clearing of forested land, and use them only if we can show they are net-green.
• Abandon sugar quota and sugar tarrifs
• Consider growing more sugar cane if we want biofuels, but again, factor in the cost of the crops displaced or land cleared.

Biofuels are a hard problem. Using recycled veggie oil is great, and we’ve run our Burning Man camp on that, but there is only so much of that out there. Even if we converted all our croplands to biofuels, we would only modestly dent our fuel consumption. This suggests that only solutions like algae or wild grasslands could work.

Note to new readers: This article explores the consequences of using so much fuel to produce our food. If you come out of it thinking it’s telling you to drive rather than get some exercise, you didn’t read it! But if you like surprising numbers like this, check out the rest of my Going Green section and other sections.

In my growing research on transportation energy economics, I’ve come upon some rather astonishing research. I always enjoy debates on total cost analysis — trying to figure out the true energy cost of things, by adding in the energy spent elsewhere to make things happen. (For example, the energy to smelt the metals in your car adds quite a bit to its energy cost.)

Humans are modestly efficient. Walking, an average person burns about 100 Calories per mile at 3mph, or 300 per hour, while sitting for the same hour burns around 80 Calories just keeping you warm. In other words, the walking 3 miles uses about 220 extra Calories. Calories are kilocalories, and one Calorie/kcal is about 4 BTUs, 4200 joules or 1.63 watt-hours.

While walking 1 mile burns an extra 74 Calories, on a bicycle we’re much better. Biking one mile at 10mph takes about 38 extra calories over sitting. Again, this is the extra calories.

A gallon of gas has about 31,500 Calories in it, so you might imagine that you get 815 “mpg” biking and 400 “mpg” walking. Pretty good. (Unless you compare it to an electric scooter, which turns out to get the equivalent of 1200 mpg from pure electricity if you allow the same perfect conversion.)

But there’s a problem. We eat, on average about 2700 Calories/day in the USA, almost all of it produced by agribusiness. Which runs on fossil fuels. Fossil fuels provide the fertilizer. They run the machines. The process and transport and refrigerate the food. In many cases our food — cows — eats even more food produced with very high energy costs.

I’ve been digging around estimates, and have found that U.S. agriculture uses about 400 gasoline-gallon equivalents per American. Or 1.1 gallons per day, or about 10 Calories (40 BTU) from oil/gas for every Calorie of food. For beef, it’s far worse, as close to 40 Calories of oil/gas (160 BTU) are used to produce one Calorie of beefy goodness.

You can see where this is going. I’m not the first to figure it out, but it’s worth repeating. Your 3 mile walk burned 220 extra Calories over sitting, but drove the use of 2,200 Calories of fossil fuel. That’s 1/14th of a gallon of gasoline (9oz.) So you’re getting about 42 miles per gas-gallon of fossil fuel.

If you eat a lot of beef or other livestock, and want to consider your incremental food as having come from beef, it’s around 10 miles per gallon. A Hummer does better!

So yes, if you drive your Prius instead of walking it’s going to burn less fossil fuel. If 2 people drive in a more ordinary car it’s going to burn less fossil fuel than both of them walking.

Biking’s better. The average-diet cyclist is getting 85 miles per gallon of fossil fuel. Still better for 2 to share a Prius. The beefeater is, as before only 1/4 as good. At 21mpg he’s better than a Hummer, but not that much better.

This is a fuel to fuel comparison. The fuel burned in the cars is the same sort of fuel burned in the tractors. It has extra energy costs in its extraction and transport, but this applies equally to both cases. And yes, of course, the exercise has other benefits than getting from A to B. And we have not considered a number of the other external costs of the vehicle travel — but they still don’t make this revelation less remarkable. (And neither does this result suggest one should not still walk or bike, rather it suggests we should make our food more efficiently.)

And no, picking transit isn’t going to help. Transit systems, on average, are only mildly greener than cars. City buses, in fact, use the same energy per passenger mile as typical cars. Light rail is sometimes 2 and rarely even 3 times better than cars, but in some cities like San Jose, it uses almost twice as much energy per actual passenger than passenger cars do. Taking existing transit vehicles that are already running is green, of course, but building inefficient lines isn’t.

Many people take this idea as a condemnation of cycling or exercise. It isn’t. Cycling is my favourite exercise. It is a condemnation of how much fossil fuel is used in agriculture. And, to a much lesser extent, a wakeup call to people who eat the average diet that they can’t claim their human-powered travel as good for the planet — just good for them. What would be good for the planet would be to eat a non-agribusiness diet and also walk or bike. How your food is farmed is more important though, than where it comes from. It’s the farming, not the shipping, that’s the big energy eater.

Obviously if you were going to need the exercise anyway, doing it while getting from A to B is not going to burn extra oil. Human powered travel well above the need to exercise is the only thing that would hurt, if fueled by U.S. agriculture. And eating a high calorie diet and not exercising would be just as bad.

Happy eating!

What’s not wrong with these numbers

As I note, since most of us need to exercise anyway, this is not at all a condemnation of walking and cycling, but rather of the amount of fossil fuel that agriculture uses. However, a lot of people still find faults with this analysis that I don’t think are there.

• No, it doesn’t matter that making the fuel costs energy. It’s (roughly) the same fuel going into the tractors as going into the gas tanks. We’re comparing fuel in tank to fuel in tank. But if you really want to factor that in, about 82% of well energy makes it to the gas tank of the car or tractor.
• Yes, I do account for the fact that just eating or sitting consumes calories. This calculation is based on the extra calories that biking or walking take, compared to sitting in a car. The base “keep you alive” calories are not counted, but they do require more fossil fuel to create.
• I don’t include the energy required to make a car, which ranges from 25% (Prius) to 7% (Hummer) of its lifetime energy usage. However, most cyclists and pedestrians still own cars, so this is still spent if it sits in the garage while you walk. And while a 2000lb car may take 60-100 times as much energy to make as a 30lb bike, this is not so large a difference if expressed per lifetime vehicle-mile.
• This is based on the USA averages. Of course different food means different results, but doesn’t change this story, which is about the average eater.
• I don’t include the energy needed to build roads for bikes, cars and food delivery trucks. The reality is, we’re not going to build fewer roads because people take some trips walking for exercise. Nor are people going to not buy a car because they do that.

Burning gasoline is ruining the world. It accounts for 40% of greenhouse emissions, and a large percentage of other nasty emissions including the particulate matter that kills millions each year. Getting it has driven the world to wars. When you burn it, you pollute my air, hurting me, and you owe me something for it, which is a reason that gasoline taxes make sense even in a libertarian context.

So while gas should be taxed to $5 or $6/gallon, the public won’t stand for it. So here’s an alternate idea. Tax gasoline up to $6/gallon in a revenue neutral way. That is to say, figure out how much tax revenue that raises per adult. Americans consume 140 billion gallons/year, so a $3 tax raises 420 billion (before consumption drops.) There are about 200 million adults, so this works out to just over $2,000 per adult. As such, each person (regardless of how much oil they burned) would receive a $2,000 tax credit — a refundable credit payable even if they owe no taxes.

Update: The core idea here came from an earlier comment on this blog, which I forgot about (See comments below for references.)

For people who ride transit or walk or otherwise don’t use cars, this turns into a $2,000 windfall, offset by an increase in the cost of taxis and transit. In theory, for the average gasoline user, it works out to a wash — pay about $2,000 more per year for your gasoline, but get a $2,000 tax refund. At most it’s an enforced savings program.

For heavy gasoline burners — those taking very long commutes, those electing to buy Hummers and Suburbans — it means paying lots more, and subsidizing those who don’t. Those who buy a Prius would be well rewarded, as would those who switch to transit or anything more fuel efficient.

The consequences of this would be:

• A giant and popular win for non-drivers, and for transit systems, which would get many more passengers to offset their increased costs.
• Everybody would file a tax return now, even those making little or no money. This would cost the IRS more, but they would probably love it for making everybody file. Not filing would become remarkably suspicious. This is both good and bad, of course.
• There would probably be some identity theft to try to steal the refunds, this would need to be watched for.
• It creates a major issue for illegal immigrants. Those who want to cause them trouble would like it for this, as these immigrants would now pay large fees for gas but have no means to get the refund, unless they file tax returns, which of course they are scared to do — and they have no SSNs.
• Fuel efficient technologies would become very popular and competitive, and the market would immediately start sorting out winners.
• Fuel consumption would drop, reducing the amount of the credit — or requiring an increase in the tax.
• Poor people with very long commutes could face serious problems, possibly forcing them to change jobs or homes, or try to carpool.
• People would drive into Canada and Mexico to get tanks of gas. There would also be a black market in gas smuggled from those countries.

This could be applied to all fuel use, including power plants and factories. In that case many products would increase in price, all offset by the credit.

Aside from the immigrant problem, it is also important to note how bad governments are at restraint, and there would be much temptation to not make the tax revenue neutral, and just make it a tax increase.

Would voters vote for this? Well, designed properly, if we assume that 50% of the gas is used by fewer than 50% of the people, then this is a win for more than 50% of the people, probably more than 70%. And of the top 30% of gasoline users, many of them would intellectually agree with it though it costs them more money. If people realized they would pay less, not more, under the tax, this could win voter support.

This could also be done on a state by state basis in some states. However, it would create problems on the state borders. Border gas stations would die, and need compensation. There would be a lot of smuggling from the other states. More people would risk using purple gas, as well. Enforcing is tough without some draconian system we wouldn’t like so much. It thus would be possible only in states that have few people living on their borders, mostly western rural states. California is not out of the question. It has no large cities on state borders, but does have some decent sized towns.

The positives of this idea are many, as are the negatives. But those positives are pretty valuable. In particular, this system would drive the market to work hard at producing technologies that really reduce fuel consumption, resulting in perhaps the biggest benefits of all.

I’ve been writing a lot about self-driving cars which have automatic accident avoidance and how they will change our cities. I was recently talking again with Robin Chase, whose new company, goloco attempts to set people up for ad-hoc carpools and got into the issues again. She believes we should use more transit in cities and there’s a lot of merit to that case.

However, in the wealthy USA, we don’t, outside of New York City. We love our cars, and we can afford their much higher cost, so they still dominate, and even in New York many people of means rely strictly on taxis and car services.

Transit is, at first glance, more energy efficient. When it shares right of way with cars it reduces congestion. Private right of way transit also reduces congestion but only when you don’t consider the cost of the private right-of-way, where the balance is harder to decide. (The land only has a many-person vehicle on it a small fraction of the time compared to 1-3 passenger vehicles almost all the time on ordinary roads.)

However, my new realization is that transit may not be as energy efficient as we hope. During rush hour, packed transit vehicles are very efficient, especially if they have regenerative braking. But outside those hours it can be quite wasteful to have a large bus or train with minimal ridership. However, in order to give transit users flexibility, good service outside of rush-hour is important.  read more »

This year’s theme for Burning Man is “the Green Man.” It represents a lot of things. For many it just is an inspiration for art centered on nature or the environment. Others are taking it as a signal to try to be better environmentally. That’s going to be a very tough road for a festival centered on building a temporary city far from everything and pyrotechnic art.

So I wrote up some thoughts on the challenges involved. The toughest problem is that transporting an entire city to the desert and then taking it back is a great personal and artistic endeavour, but not one that can be considered green. All efforts to reduce the pollution at the event are dwarfed by the fuel burned to get there. So what can be done?

Read about the problems of having a green man.

In light of my recent threads on CitizenRe I built a spreadsheet to do solar energy economic calculations. If you click on that, you can download the spreadsheet to try for yourself. If you don’t have a spreadsheet program (I recommend the free Gnumeric or Open Office) it’s also up as a Google Solar Spreadsheet but you may need a Google account to plug in your own numbers.  read more »

Recently I opened up a surprising can of worms with a blog post about CitizenRe wondering if they had finally solved the problem of making solar power compete with the electrical grid. At that post you will see a substantial comment thread, including contributions by executives of the firm, which I welcome. At first, I had known little about CitizenRe and the reputation it was building. I thought i should summarize some of the issues I have been considering and other elements I have learned.

CitizenRe’s offer is very appealing. They claim they will build a plant that can make vastly cheaper solar. Once they do, they will install it on your roof and “rent” it to you. You buy all the power it produces from them at a rate that beats your current grid power cost. Your risks are few — you put down a deposit of $500 to $1500 depending on system size, you must cover any damage to the panels, and they offer removal and replacement for a very modest fee if you need to reroof or even move. You lock in your rate, which is good if grid rates go up and bad if grid rates go down or other solar becomes cheaper, but on the whole it’s a balanced offer.

In fact, it seems too good to be true. It’s way, way cheaper than any offering available today. Because it sounds so good, many people are saying “show me.” I want to see just how they are going to pull that off. Many in the existing solar industry are saying that much louder. They are worried that if CitizenRe fails to deliver, all their customers will have been diverted to a pipedream while they suffer financial ruin. Of course, they are also worried that if CitizenRe does deliver, they will be competed out of business, so they do have a conflict of interest.

Here are some of the things to make me skeptical.  read more »

In the SF Bay Area, there are carpool lanes. Drivers of fuel efficient vehicles, which mostly means the Prius and the Honda Civic/Insight Hybrids can apply for a special permit allowing them to drive solo in the carpool lanes. This requires both a slightly ugly yellow sticker on the bumper, and a special transponder for bridges, because the cars are allowed to use the carpool lane on the bridge but don’t get the toll exemption that real carpools get.

I think this is good, as long as there is capacity in the carpool lane, because the two goals of the carpool lane are to reduce congestion and also to reduce pollution. The hybrids do the latter. (Though it is argued that hybrids do their real gas saving on city streets, and only save marginally on the highway, comparable to some highly efficient gasoline vehicles.)

However, oddly, the government decided to allocate a fixed number of stickers (which makes sense) and to release them on a first-come, first-served basis, which makes no sense. After the allocation is issued, new buyers of these cars, or future efficient cars can’t get the stickers. (Or so they say — in fact the allocation has been increased once.)

The knowledge that time was running out to get a Prius with carpool privileges was much talked about. And it’s clear that a lot of people who buy a hybrid rush to get one of the scarce carpool permits simply because they can, even if they will almost never drive on the highways at rush hour with them.

Society seem to love first-come-first-served as a good definition of “fair” but it seems wrong here. At the very least there should be a yearly fee, so that people who truly don’t need the stickers will not get them “just in case.” I would go further and suggest the annual fee be decided by dutch auction. For those not familiar, in a dutch auction, all those who wish to bid submit a single, sealed bid. If there are “N” items then the Nth highest bid becomes the price that the top N bidders all pay. There may be a minimum below which the items are not sold.

This can be slightly complex in that you can do this one of two ways. The first is everybody pays their real bid, and losers and overbidders get a refund. This assures all bidders are serious. The other is to set the price, and then bill the winners. The problem here is people might bid high but then balk when they see the final price. You need a way of enforcing the payment. Credit cards can help here. As can, of course, being the government, which can refuse to licence your car until you pay the agreed fees.

Carpool lanes are a hot topic here, of course. The mere mention of the subject of kidpooling (Counting children to determine if a car is a carpool) makes the blood boil in the local newspapers. People feel remarkable senses of entitlements, and lose focus of the real goals — to reduce congestion and pollution. Emotions would run high here, too.

(Note: I have posted a followup article on CitizenRe as a result of this thread. Also a solar economics spreadsheet.)

I’ve been writing about the economics of green energy and solar PV, and have been pointed to a very interesting company named CitizenRe. Their offering suggests a major cost reduction to make solar workable.

They’re selling PV solar in a new way. Once they go into operation, they install and own the PV panels on your roof, and you commit to buy their output at a rate below your current utility rate. Few apparent catches, though there are some risks if you need to move (though they try to make that easy and will move the system once for those who do a long term contract.) You are also responsible for damage, so you either take the risk of panel damage or insure against it. Typically they provide an underpowered system and insist you live where you can sell back excess to the utility, which makes sense.

But my main question is, how can they afford to do it? They claim to be making their own panels and electrical equipment. Perhaps they can do this at such a better price they can make this affordable. Of course they take the rebates and tax credits which makes a big difference. Even so, they seem to offer panels even in lower-insolation places like New England, and to beat the prices of cheaper utilities which only charge around 8 cents/kwh.

My math suggests that with typical numbers of 2 khw/peak watt/year, to deliver 8 cents/kwh for 25 years requires an installed cost of under $2/peak watt — even less in the less sunny places. Nobody is even remotely close to this in cost, so this must require considerable reduction from rebates and tax credits.

A few other gotchas — if you need to re-roof, you must pay about $500 to temporarily remove up to 5kw of panels. And there is the risk that energy will get cheaper, leaving you locked in at a higher rate since you commit to buy all the power from the panels. While many people fear the reverse — grid power going up in price, where this is a win — in fact I think that energy getting cheaper is actually a significant risk as more and more money goes into cleantech and innovation in solar and other forms of generation.

It’s interesting that they are offering a price to compete with your own local utility. That makes sense in a “charge what the market will bear” style, but it would make more sense to market only to customers buying expensive grid power in states with high insolation (ie. the southwest.)

Even with the risks this seems like a deal with real potential — if it’s real — and I’ll be giving it more thought. Of course, for many, the big deal is that not only do they pay a competitive price, they are much greener, and even provide back-up power during the daytime. I would be interested if any readers know more about this company and their economics.

Update: There is a really detailed comment thread on this post. However, I must warn CitizenRe affiliates that while they must disclose their financial connection, they must also not provide affiliate URLs. Posts with affiliate URLs will be deleted. Some salient details: There is internal dissent. I and many others wonder why an offer this good sounding would want to stain itself by being an MLM-pyramid. Much stuff still undisclosed, some doubt on when installs will take place.

While I’ve written before about the trouble in making solar competitive with grid power, this is not true when the grid is being blown up by geurilla fighters on a regular basis. Over the past couple of years, Bechtel has been paid over 2 billion dollars, mostly to try to rebuild the Iraq electrical infrastructure. Perhaps it’s not their fault that power is only on in Bagdadh for 2 hours a day after these billions have been spent — but their might have been a better way.

Imagine if that billion had been directed at building a solar power system, with a lower-power grid for night power. A billion would have provided major stimulus to the solar industry, of course, and helped the companies that are working at making PV cost-effective. But it also would have generated a power infrastructure that was much harder to destroy in a civil war. Yes, they might take down sections of the grid, but these would only have been there for night and brownout power. Without them, people would still have had more power. And not just during the day. Mini “neighbourhood grid” systems could allow small areas to have backup diesel generators. Not quite as efficient as the big generators but much more difficult to take down. The “value” targets would still see their local panels and generators under attack, but that’s the way of it.

It seems odd to think of this in a country with so much oil. But doing this would have also had a major effect on greenhouse gas emissions. Putting solar into Iraq would have made the US responsible for major emission cuts. Cutting emissions there so we don’t have to cut them here.

Something to think about next time your country goes and destroys a foreign country’s power grid and then works to rebuild it. (Of course, ideally that’s never.)

Just on the heels of my prior post on the bad math often found around alternative energy, I see a Google Blog post on Google’s solar installation. It claims Google with save money with their 1.6 megawatt solar installation.

I would be very interested to see Google’s numbers — what are they paying for this PV system, and what do they pay the power company for their grid power? Did they get rebates on the PV install? Rebates can help a single customer save money but they do it at taxpayer expense which makes it a wash, other than as a means to try to increase the market for solar and bring down the price.

Now, I’m not in any way saying that it’s bad for Google to go solar. Large grid-tie solar arrays are quite green, with minimal emissions (only those from their manufacture, shipping and install) and so it’s good to have them, even if they are more expensive than non-green grid energy.

But I want to know, is my math bad, or is Google’s? If companies can really save money with a PV array they should be springing up like weeds.

Today I also read announcements of companies hoping to bring to market new solar panel technologies with thin films that are vastly cheaper than existing tech. When that happens, the panels really should sprout everwhere, and to very positive effect.

Update: The press releases say the system is 1.6MW, and provides 2.6 million khw/year for a saving of $393K per year (about 15 cents/kwh which is about right in California.) The press release also says the system will pay for itself in 7.5 years, which at 7% interest rate means its total cost was $2.2M. (Truth is Google is able to make far better than 7% with its money, I suspect.)

This means an astounding $1.38 per watt for installed solar. I’ve never heard of anything remotely like this. Even with a bad-math 0% interest rate, 7.5 year payoff is $1.84/watt so it’s not just bad math here. Even with the California rebates of $2.60/watt and 30% federal tax credit, it’s still amzingly cheap — and almost all the savings are coming from the taxpayer.

The release also suggests that 393K per year will result in 15 million saved over a 30 year lifespan. I can’t figure the math in this number. The bad-math 30*393 is under 12 million. The real saving over 30 years at 7% interest has a present value of 4.8 million. The future value, in 30 years time, of $393/year is well over 30M at 7%. You need an interest rate of 1.5% to have a FV near $15M. I suspose the risk-free-rate-above-inflation might correspond to this but it’s not typical in expressing these numbers.

So what are the real numbers?

I think it’s important that we stop burning petrofuels or indeed any fuels and get energy from better sources.

But there’s a disturbing phenomenon I have seen from people who believe the same thing too much. They want to believe so much, they forget their math. (Or I may be being charitable. Some of them, trying too hard to sell an idea or a product, may be deliberately forgetting their math.)

I see this over and over again in articles about photovoltaic solar, wind and other forms of power. They suggest you could put in a PV panel array for $20,000, have it provide you with $1,000 worth of electicity per year and thus “pay for itself” in 20 years. Again and again I see people take a series of payments that happen over a long time and just divide the total by the monthly or annual amount.  read more »

I’ve been thinking more about environmental economics since I blogged about retail carbon credits. I was surprised about how cheap (some would say unrealisticly cheap) wholesale credits are — about $2.20 per tonne of CO2. (Update: This price keeps changing. The U.S. price is clearly out of whack down to just 25 cents per tonne in 2009. The European price has declined too, from $20/tonne when I wrote this to $14/tonne in fall 2009.)

Today, many of my friends have bought a car like the Toyota Prius, feeling they are doing their bit to help the environment by burning less gas. The Prius costs around $3,000-$6,000 more than a comparable old-style engine car (in part because high demand keeps the price high), and the savings on gasoline don’t justify it on a financial basis unless you do nothing but drive all day. So the main reason to buy it is to help the environment and to make a statement before your peer group. The Camry Hybrid, which gets 32mpg instead of 23mpg costs about $5,000 more than the regular Camry.)

Problem is, there’s an argument that you’re hurting the environment, counterintuitive as that sounds. And no, it’s not just the unanswered questions about recycling the fancy batteries in the Prius when they fade, where fairly positive results have been returned so far. Read on…  read more »

You may have heard of the idea of pollution credit trading. I’ve been pointed to two firms that are selling CO2 credits on the retail level for individuals, to offset the output from driving a car, heating a house etc.

I’ll get into the details on how it works a bit below, but if you have a car like mine that is putting out 5 metric tons of CO2 each year, you can for a low price (about $50, which includes a whopping markup) pay a factory somewhere to cut their own output by 5 tons, meaning that net, you are causing zero emissions. Which means you are reducing total emissions by a lot more than you would by switching to a Prius, and you are doing it at a vastly lower cost. (This doesn’t mean you shouldn’t drive a Prius, it just means this is a lot more effective.)

Normally pollution credits are traded only by the big boys, trading contracts with hundreds or thousands of tonnes of emissions. The retail firms are letting small players get in the game.

This is a fabulous idea, in theory at least, and also a great, if sneaky gift idea. After all, if you buy the gift of not polluting for your loved one all they get is a bumper sticker and a good feeling. At least it’s better than giving to The Human Fund in their name.

Here’s the catch. I went and priced the credits, and while www.certifiedcleancar.com wanted $50 to credit my car, the actual price of credits on the Chicago Climate Exchange is about $2.16 per tonne of CO2, or about $8 for my actual output as they calculated it. One expects some markup, of course, and even some profit for the company selling the retail credits, but this is nuts. I called the other company, Terrapass and got reasonably frank answers. First of all, they claim they invest more in wind power and other truly non-polluting forms of energy more than they just buy carbon credits. Secondly, this is still a small volume thing, and most of the costs are not the credits, but the $20,000 or so to become a member of the exchange, or so I was told. And of course, in small volumes, administrative costs can swamp the real costs.

Another outfit I found is carbonfund.org which is non-profit and cheaper. In some sense since people buy these out of guilt rather than compulsion (they were meant to be forced on polluters to give money to non polluters and make a market) non-profit might make sense, but they are also supposed to be a real market.

Still, if I pay $50, I would love for my $50 to mostly go to reducing pollution, not mostly to administration. Usually when exchanges are expensive there are members who will trade for you at much more modest markups. The folks at Terrapass said they were not yet profitable at the current prices.

And it is such a good idea. Read below for more on pollution credits.  read more »