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October, 2011:

Process and technological aspects of municipal solid waste gasification. A review

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CLP unit plans two gas-fired plants in Australia

South China Morning Post 26 Oct. 2011

TRUenergy’s new stations may be funded by Sydney IPO of the country’s No 2 power utility

TRUenergy, the Australia-based energy flagship of electricity utility CLP Holdings (SEHK: 0002), plans to spend up to A$3.6 billion (HK$29.3 billion) building two gas-fired power plants in Queensland as the country moves towards greener energy sources.

Analysts said the projects could be funded by a potential initial public offering of TRUenergy on the Sydney stock exchange, which could take place next year or the year after.

CLP said yesterday TRUenergy, its biggest asset outside Hong Kong, was seeking government approval to build two high-efficiency gas-fired power stations in Queensland to meet demand in the northeastern Australian state in the next 10 years.

Each of the planned stations, which will use open-cycle or combined-cycle gas-fired technology, would have an initial capacity of 500 megawatts and up to 1,500MW eventually.

That would require an initial investment of A$400 million and a total investment of A$1.8 billion for each plant.

CLP said the application process would take a year and construction could start in 2013, at the earliest.

Some analysts said the proposed investments underlined TRUenergy’s commitment to expansion in Australia despite the country’s new carbon reduction regime.

“It has to build low-carbon-emission plants under the new regime,” an analyst at an Asian brokerage said.

“TRUenergy’s potential spin-off can offer funding for the massive investment plans.”

A CLP spokeswoman yesterday did not rule out the possibility of listing TRUenergy, saying a spin-off could be one of the ways to raise fresh funds.

Earnings at TRUenergy, Australia’s No2 power utility, fell 64 per cent to HK$373 million last year, including a HK$346 million provision for renewable energy arm Solar Systems as that company plunged into liquidation.

TRUenergy took A$3.41 billion in revenue last year, and supplies electricity and gas to 2.8 million customers in Australia.

CLP said the proposed power projects could emit 50 to 70 per cent less carbon than coal-fired stations of similar capacity.

The plants are planned at Ipswich, which is close to areas of projected population growth in southeast Queensland and areas of projected industrial growth in Gladstone in central Queensland.

CLP chief executive Andrew Brandler said the projects were part of the group’s plan to reduce its portfolio’s carbon emissions by 75 per cent by 2050.

TRUenergy stands to benefit from the Australian government’s carbon-tax policy to fight global warming, under which a package of transitional financial aid worth A$5.5 billion would be offered to polluters to help them migrate to a low-carbon regime. TRUenergy is entitled to 25 per cent, or about A$1.37 billion, of the package.

CLP shares fell 25 HK cents to HK$70.70 yesterday.

Here’s Why Coal’s True Cost Is Much Higher Than We Pay : TreeHugger

coal ship photo

photo: Jim Brickett/CC BY ND

Skeptical Science previous examined the fact that the market price of coal power is artificially low because we do not directly pay for all of its impacts, particularly on air quality and climate change.  People who feel these effects do pay them indirectly (i.e. through increased health care costs), but since their costs are not reflected in the market price of coal power, economists call them “externalities,” and view them as a major failing of the free market.

As Nobel Prize-winning economist Paul Krugman put it,

Consumers are paying much too low a price for coal-generated electricity, because the price they pay does not take account of the very large external costs associated with generation. If consumers did have to pay the full cost, they would use much less electricity from coal — maybe none, but that would depend on the alternatives.

At one level, this is all textbook economics. Externalities like pollution are one of the classic forms of market failure, and Econ 101 says that this failure should be remedied through pollution taxes or tradable emissions permits that get the price right.

In short, if the people paying for coal power aren’t aware of its full costs, then they can’t take those costs into account when making decisions regarding how much to consume. A new paper published in American Economic Review (a very prominent economics journal) from well-known (and somewhat conservative) economists Nicholas Muller, Robert Mendelsohn, and William Norhaus (MMN11) seeks to quantify these externalities. Krugman provides his analysis of the paper in the link above, and our analysis follows.

Gross External Damages (GED)
MMN11 present a framework to include the externalities associated with air pollution into a system of national accounts.  They estimate air pollution damages for each industry in the USA by quantifying the damages caused by air pollution, and multiplying those damages by the emissions per industry, which they call “gross external damages” (GED).  MMN11 propose that “air pollution becomes another cost of doing business,” as is the case for some pollutants.

GED/VA ratio by sector image

The paper also compares GED to the value added (VA) by a given industry “to determine whether correcting for external costs has a substantial effect on the net economic impact of different industries.”  MMN11 describe their modeling methodology to estimate GED:

This paper uses the Air Pollution Emission Experiments and Policy (APEEP) analysis model, which is an integrated assessment economic model of air pollution for the United States (Muller and Mendelsohn 2007). The APEEP model connects emissions of six major pollutants (sulfur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOCs), ammonia (NH3), fine particulate matter (PM2.5), and coarse particulate matter (PM10 -PM2.5)) to the physical and economic consequences of these discharges on society. The effects included in the model calculations are adverse consequences for human health, decreased timber and agriculture yields, reduced visibility, accelerated depreciation of materials, and reductions in recreation services. In addition, for the electric power generation sector, we include the damages from carbon dioxide emissions.

MMN11 provides an estimate of GED costs for various sectors in Table 1.  The largest GED/VA ratio comes from agriculture/forestry and utilities.

MMN11 break down the GED/VA ratio by industry, and show the 17 industries for which the ratio is at least 45%, or GED is greater than $4 billion per year in Table 2.  Petroleum-fired and coal-fired power generation have the second- and fourth-highest GED/VA ratios, respectively.  Note that the GED estimates in Tables 1 and 2 do not include CO2 emissions and their associated impacts on climate change. We will examine those costs later.

GED/VA ratio by industry image

What Does a High GED/VA Ratio Mean?
In short, the cost of the damage not accounted for in the market price from industries with GED/VA ratios greater than one (including petroleum and coal power generation) exceed the value they add through their products/services.  However, that doesn’t mean we would benefit from getting rid of them altogether, because if we internalized the external costs associated with their air pollution, then their GED would decrease.  As MMN11 put it (emphasis added),

If the external costs were fully internalized, prices would change, so the results do not imply that the US economy would be better off not having these industries at all…On a formal level, it signifies that a one-unit increase in output of that industry has additional social costs that are higher than the incremental revenues. At an intuitive level, it indicates that the regulated levels of emissions from the industry are too high.

MMN11 suggest a possible interpretation of the high GED/VA ratios is that these industries are not efficiently regulated – the damages associated with their pollution exceed the costs of abatement (through some form of emissions pricing). Another possibility is that ‘VA’ doesn’t fully account for the value added from a given industry.

Breaking Down Coal Damages
MMN11 delve into more detail regarding the GED associated with coal power generation.  They find that SO2 emissions are responsible for 87% of the damages associated with coal power emissions (excluding climate change), and 94% of the damages come in the form of increased mortality.  For those who claim that burning coal is safe and harmless, the numbers tell a very different story, even without including the effects associated with climate change.

The study also compares the figures for coal, petroleum, and natural gas power plants.  They find that coal accounts for 95% of GED in this sector (though it also accounts for the largest percentage of total power generation), and coal power has the highest GED per kilowatt-hour (kWh) of electricity generated (though as noted in Table 2, petroleum has a higher GED/VA ratio).  The GED per kWh for natural gas is 20 to 30 times lower than for oil and coal, respectively, because its (non-carbon) emissions are so much lower (Table 5).

electric power with CO2 damage included image

Climate Change Costs
MMN11 note that CO2 emissions are not yet available for all industries, but are available from electric power generation from the US Energy Information Administration (EIA). As Skeptical Science has discussed,  the costs associated with climate change impacts are calculated through the “social cost of carbon” (SCC), which is a very difficult value to estimate.  Estimates generally range from $19 to $68 per ton of CO2 emitted, but some “skeptic” economists put the value lower.  MMN11 use $27 per ton (from a previous study by Nordhaus, which is a rather conservative estimate) as their central SCC estimate, and also use $6 and $65 per ton as lower and upper bound estimates.

MMN11 incorporate climate change costs into GED for power plants, which they call “GED*” (Table 5).

Using the Nordhaus SCC best estimate ($27 per ton of CO2 emitted) increases the GED for coal power from 2.8 to 3.6 cents per kWh (29%), for example.  This means that CO2 emissions are responsible for approximately one-fourth of total air pollution damages from coal (and petroleum) power generation.  For coal, CO2 emissions cause an additional $15 billion in external damages per year which are not reflected in its market price. The total GED for coal power ranges from $57 to 90 billion per year, depending on the SCC value (central estimate of $69 billion).  MMN11 note how these values relate to electricity prices:

In 2002, residential consumers of electricity faced an average market price of 8.4 cents per kwh. Hence, the GED*/kwh associated with electric power generation using coal, oil, and natural gas represents 43, 33, and 7 percent of the average residential retail price of electricity in 2002. Note that residential electricity prices vary by the primary fuel type used in electricity production. In states that primarily rely on coal-fired power, residential electricity prices averaged 6 cents per kwh. The average GED*/kwh of coal-generated electricity is 60 percent of the average residential retail price of electricity in a state relying entirely on coal.

MMN11 note some of the largest sources of uncertainty in their cost estimates:

We note that the uncertainties are particularly large for four elements: the value of mortality risks, the relationship of this value to age, the mortality effect of fine particulates, and the social cost of CO2 emissions.  Sensitivity analyses using alternative values for these parameters change the magnitude of the results significantly.

Skeptical Science previously examined Epstein et al. (2011), which arrived at a much higher estimate of the external costs of coal combustion, mainly due to a higher estimate of (non-CO2) air pollution damages.  Their median estimate was 18 cents per kWh, as opposed to the median MMN11 estimate of 3.6 cents per kWh – obviously a very large difference.

Epstein et al. also accounted for several factors not included in the MMN11 analysis, such as public health in Appalachia related to mining, which by itself accounted for approximately 4 cents per kWh in their estimate.  However, the estimates of air pollution externalities varied greatly in the two studies, from 2.8 cents per kWh in MMN11 to approximately 10 cents per kWh in Epstein.  The median climate change impact estimate in Epstein (3 cents per kWh) was also larger than in MMN11 (0.8 cents per kWh) (Figure 1).

coal price external costs image
Figure 1: Average US coal electricity price vs. MMN11 and Epstein 2011 best estimate coal external costs (addedd to the Skeptical Science graphics page)

So there are clearly significant uncertainties in these estimates.  However, it’s important to bear in mind that uncertainties are expected in a Pigovian tax (a tax levied to address a market externality).  Finding the exact emissions price is not necessary, because once the external cost is internalized, the emissions price can be adjusted accordingly.  First we have to take the first step in attempting to internalize the GED.

Take-Home Messages
There are some very important points to take home from these economic studies.  The first is that while these assessments involve significant uncertainties, they agree that the true cost of coal is not accurately reflected in its market price.  In fact, the true cost lies somewhere between ~50% and 300% more than Americans are currently paying.  The two largest contributors to this discrepancy are SO2 emissions (impacting air quality and public health) and CO2 emissions (impacting climate change).  Therefore, regulating SO2 emissions more strictly, and putting a price on CO2 emissions, would benefit the US economy. As Paul Krugman put it, it’s “Econ 101.”

There is one final, very big message to get from this economic research.  Most, if not all of the candidates running for the 2012 Republican presidential nomination  (and in fact most Republican politicians in general) have been arguing that Environmental Protection Agency (EPA) regulations are too stringent and harming the economy.  Texas governor and current Republican presidential frontrunner Rick Perry has been the most vocal in these attacks on the EPA, but even relatively moderate Republicans like Senator Susan Collins of Mainehave joined in the attacks on “EPA over-regulation.”

These studies show that this is exactly the wrong approach.  Air pollution emissions (especially SO2 and CO2) are under-regulated, and increased environmental regulation of these pollutants would benefit the US economy (not to mention public health, both nationally and internationally). Unfortunately, as we’ve seen time and time again in recent years, scientific and economic research has little influence over today’s Republican politicians.

Poo power could clean up Accra’s acrid beaches

4 Oct.2011

Accra beach

A few minutes walk from Ghana’s most luxurious hotel, which has hosted Tony Blair and Queen Elizabeth in the capital city of Accra, stands a boy – probably no more than 10 years old – watching four pigs bathe in a stream of raw sewage running into the ocean.

He has walked 20 metres down to the sand from a cluster of huts perched on the bank, where he lives with other squatters, surviving with no access to running water or sanitation.

Despite the fact that locals regularly swim and surf in the water, Accra’s beach would no doubt fail any environmental health assessment.

Most of the sewage generated by nearly four million people in the city is untreated, leading to diseases such as cholera. Pieces of asbestos lay strewn across the sand from broken pipes, amid old clothes, shoes and discarded televisions. The bank behind the beach is woven so thickly with dirty plastic bags, that the earth is barely visible beneath it.

But now scientists at Columbia University hope that a new refinery opening this autumn will clean up the water supply through a green energy project, using a new waste-to-energy technology.

Kartik Chandran, an associate professor of earth and environmental engineering at Columbia Engineering, was awarded $1.5m from the Bill & Melinda Gates Foundation earlier this year to develop a bioprocess technology capable of transforming fecal sludge into biodiesel, creating what he describes as the “next-generation urban sanitation facility”.

Chandran explained that the technology converts organic compounds in fecal sludge to biodiesel and methane, using bioprocesses that could prove cheaper than current biodiesel refinery practices.

“Thus far, sanitation approaches have been extremely resource- and energy-intensive and therefore out of reach for some of the world’s poorest but also most at-need populations,” he said. “This project will allow us to move forward and develop practical technologies that will be of great value around the world.”

Accra has a poor sewage infrastructure, so the sludge will be collected by tanker trucks from the public latrines used by most residents and delivered to the refinery.

Chandran explained that the plant could produce up to 260 gallons of biodiesel daily, which will then be sold to a local oil company.

“That’s not quite enough to break even financially, but we should steadily increase our output as we fine-tune our technical design,” he told Columbia University’s magazine.

The grant from Bill & Melinda Gates Foundation will be used to build and operate the refinery for two years. After that Chandran hopes to set up a social enterprise to expand the use of bioprocess technology globally, especially in developing economies. He added that he hopes to encourage local entrepreneurs and investors to launch their own refineries.

“The model that we’re going to demonstrate could be beneficial anywhere in the world,” he said. “But in a country where sanitation projects are said to be unaffordable and impractical, it could literally save lives.”

Energy from waste: How the Gasplasma system works

Oct 1, 2011
As well as being able to convert refuse into power and empty out
existing landfill sites, releasing the land for reuse, the Gasplasma
process offers a significant benefit: its by-product is a building
material, not a waste.

As well as being able to convert refuse into power and empty outexisting landfill sites, releasing the land for reuse, the Gasplasmaprocess offers a significant benefit: its by-product is a buildingmaterial, not a waste.

Download PDF : APP-Waste-Planning-Journal-Article-Oct2011