Prime Minister Malcolm Turnbull may be about to “drive a stake through the heart of the fossil fuel generation industry in Australia” with a decision to fund a two-gigawatt, A$2-billion pumped storage scheme in the Snowy Mountains in New South Wales.
“By promoting pumped hydro, Turnbull is effectively [sounding] the death knell for any new coal- or gas-fired generation built by the private sector, and is paving the way for a 100% renewable energy grid, driven mostly by wind and solar,” RenewEconomy reports. The move “also makes a reported and belated push for nuclear energy from members of his Coalition entirely redundant, because it would remove the need to rely on baseload generation over the medium to long term.”
A final decision on the scheme will hinge on a feasibility study by the Australian Renewable Energy Agency and funding from the federal, New South Wales, and Victoria governments.
“Assuming this does go ahead at the scale advertised, the conversation around energy delivery will now shift from ‘baseload’ to flexibility, and gas and coal will no longer be able to compete, on either cost or utility, over the medium to long term,” notes RenewEconomy’s Giles Parkinson. “The biggest beneficiary of this push into pumped hydro could well be solar PV and wind energy, which are now the clear leaders in energy costs, with further sharp falls ahead.”
Last month, Prof. Andrew Blakers, foundation director at Australian National University’s Centre for Sustainable Energy Systems, calculated that a mix of solar, wind, and pumped hydro could bring the country to 100% renewable energy at a cost of $75 per megawatt-hour, less than the current wholesale price for power. He told Parkinson the latest project in the Snowy Mountains—where Australia already has 2 GW of pumped storage in operation—would get the country more than half-way to a grid run entirely on solar and wind.
“A 100% renewable energy grid will require around 450 gigawatt-hours of storage,” he said. “Pumped hydro is by far the cheapest in the wholesale market,” although about half of the total would have to come from behind-the-meter batteries and demand management.
With Turnbull’s announcement this week, however, “it’s game over for gas, it’s game over for nuclear. Solar PV and wind have won the race,” Blakers said. The project could also be a challenge for solar thermal and storage technologies, except in locations that are unsuitable for pumped storage.
While British Columbia’s biggest wind farm, the 180-MW Meikle Wind project north of Tumbler Ridge, has just gone online, there is little celebrating in a province where the massive Site C hydro dam is expected to wipe out any demand for further wind development for the foreseeable future.
The 25-year project, build under a power purchase agreement with BC Hydro, will deliver $70 million in property tax revenue, Crown lease payments, wind participation rent, and other community benefits, DeSmog Canada reports. The project had the support of Treaty 8 First Nations and the nearby towns of Tumbler Ridge and Chetwynd, used more than 500,000 person hours of labour, according to a company release, and let more than 30% of its contracts to regional companies and First Nations-affiliated service providers.
But “despite wind power’s state-of-the-art technology and increasing affordability, B.C. is unlikely to see more such projects in the near future because construction of the Site C dam means BC Hydro is not looking for additional power,” DeSmog notes. Even though career civil servant Harry Swain, who chaired the federal-provincial review for the $9-billion, 1,100-MW hydro megaproject, says the province won’t need the power it produces for decades.
“If there was a need, we could meet it with a variety of other renewable and smaller-scale sources,” Swain said almost two years ago. “Then the wind industry would be well-positioned to succeed because wind energy is as inexpensive…as any other source of electricity generation, with the possible exception of natural gas. And with carbon pricing coming in, that will change fairly soon.”
The Canadian Wind Energy Association withdrew from the province last year. “BC Hydro has publicly stated that there would be no need to procure any additional power until at least 2030,” noted President Bob Hornung. And at a time when B.C. already has an electricity surplus, “it’s a tough time from the development point of view,” said Paul Kariya, executive director of Clean Energy BC.
“We should be doing everything we can to electrify, and there should be longer-term work on an export strategy,” but “we don’t have a strategy in B.C.,” Kariya told DeSmog. “The previous premier (Gordon Campbell) was keen to champion it but, since then, there has been no interest.”
The Ontario Crown corporation that generates more than half of the province’s electricity may be driven into bankruptcy by Premier Kathleen Wynne’s decision last week to order a 17% reduction in electricity prices, on top of an earlier cut of 8%, the Ontario Clean Air Alliance warns in a blog post.
The move may ease criticism of Wynne’s Liberal government for higher power prices, but flies in the face of recent requests by Ontario Power Generation for dramatic rate increases to cover the cost of its nuclear operations.
Wynne who faces a provincial election next year, is trailing the Progressive Conservative opposition by double digits in polls. Power prices, largely traceable to botched reforms of the energy market when the Conservatives were last in office, have been a big factor in her government’s unpopularity.
“Everywhere I go, I hear from people worried about the price for hydro,” the premier said in announcing the cut, promising that prices will now go down, “stay down, and everyone will benefit.” Wynne said the lower rates would be achieved mainly by rescheduling payments on the utility’s debt.
But while the move has clear political advantages, the Clean Air Alliance warns, Wynne is defying the laws of economics. Last September, OPG, which operates the Pickering and Darlington nuclear stations on the shores of Lake Ontario, asked regulators for a startling 11% rate increase per year over 10 years. Rates would need to nearly triple in all, the nuclear operator said, to keep its fleet of aging reactors working, “maintain its investment-grade credit rating, and ensure sufficient cash flows.”
Instead, Wynne’s action will slash OPG’s revenues and force the utility to “take on billions of dollars of additional debt to ensure that Ontario’s electricity rate increases for the next four years will be held at the rate of inflation,” the OCAA observes.
The environmental non-profit took the opportunity to renew its warnings that OPG could “go bankrupt if the [ongoing] Darlington rebuild goes over budget and our demand for electricity continues to fall.” It said Wynne should instead order the utility to close its oldest nuclear station, at Pickering, when its current licence expires next year, and cancel planned refits of additional reactors at Darlington.
The nuclear stations’ output, the OCAA has long argued, could easily be replaced by cheaper, renewable hydroelectric power imported from Quebec. In October, the Ontario government signed a seven-year purchase agreement with Quebec Hydro-Québec to import 14 terawatt-hours (TWh) of hydropower.
Now, the Alliance warns, Wynne’s decision to cut rates while sticking with nuclear generation “once again raise the larger question of whether we are running our electricity system for the benefit of ratepayers or the nuclear industry.”
British Columbia’s Liberal government, under investigation for alleged pay-to-play influence peddling and facing a general election in early May, should drop plans for its contentious and unneeded Site C hydroelectric dam, a former premier says in a video interview.
British Columbia’s Liberal government, under investigation for allegations of pay-to-play influence peddling and facing a general election in early May, should drop plans for its contentious and unneeded Site C hydroelectric dam on the Peace River in the province’s northeast, a former premier says in a video interview.
B.C. Hydro, a crown corporation, has begun land-clearing for the project, on the Peace River in the province’s northeast. But “the cost of dams worldwide over the last 70 years has averaged 90% over [initial estimates],” former premier Mike Harcourt told DeSmog.ca in an interview. “So you can assume Site C is going to cost, probably, $15 to $17 billion. I think economically it’s just not going to cut it.”
Harcourt points to the absence of any apparent demand in the province for the extra power the dam will produce. “Demand for electricity in B.C. has been flat over the last 11 years,” Harcourt said. “You don’t need it. Economically, you’re going to be bankrupting BC Hydro and seriously harming the credit of British Columbia.”
Altogether, the project “is going to be a disaster, economically, environmentally, culturally for First Nations,” the former premier charged.
Harcourt has also spoken out forcefully against Kinder Morgan’s proposed Trans Mountain pipeline expansion, warning that the federal government faces “insurrection” if it forces the line—approved by the National Energy Board in a sharply-criticized decision—on residents of the B.C. Lower Mainland. (B.C. Premier Christy Clark also approved the line in January.)
As for Site C, the planned dam “is 18 months into construction on what is projected to be an eight-year timeline,” DeSmog reports. “So far, a worker’s camp has been built and a small section of river valley has been cleared. Ultimately, more than 100 kilometres of river valley, including valuable farmland, will be cleared to make way for the dam’s reservoir.”
“It’s not too late” for the province to give up on the flawed hydro project, Harcourt asserted. “It’s never beyond the point of no return.”
Norway’s US$900-billion sovereign wealth fund is at an “historic crossroads” as national legislators consider a mandate requiring it to invest 5% of its funds in “unlisted” holdings.
That provision would be the trigger for the Government Pension Fund Global (GPFG) “to capture value and reap stable returns especially from the fast-growing global renewable energy sector,” the Institute for Energy Economics and Financial Analysis states, in a news item on its own more detailed research report. Moreover, “the fund would be joining an investment trend that is gaining momentum—62% of sovereign of wealth funds held infrastructure investments in 2016, and an additional 7% were considering doing so.”
In an accompanying op ed, the Institute’s finance director, Tom Sanzillo, notes that “infrastructure is a long-established asset class embraced by many of the world’s leading investment funds, and it is expected to keep growing,” with estimated demand of US$3.3 trillion over the next several years. Renewable energy, which accounts for nearly half of all unlisted infrastructure transactions, “has practically becoming a separate investment vehicle unto itself.”
Some funds are delivering returns of 10 to 20% per year, he adds, and “the renewables sector is no longer the experimental space it once was, having entered a long-term growth cycle with a strong outlook driven by low costs, competitive prices, policy advances, and rapid uptake.”
Although fund manager Norges Bank first asked for the Parliamentary mandate a decade ago, Norway’s finance ministry sees it as a risky move, and “skeptics may very well argue that renewable energy comes with too much risk,” Sanzillo notes. But “while renewable energy is no more immune to regulatory and political risks than investments that include telecommunications and transportation holdings, these risks can be mitigated, as has been demonstrated for quite some time now by well-managed funds that have developed robust methods do just that.”
The IEEFA report recommends that Norway set the 5% mandate, boost GPFG’s in-house analytic expertise to match other top institutional investors, set partnerships with other funds that have experience with unlisted infrastructure, place a portion of its investments with listed utilities that already have a track record in renewable energy, and make a “firm and prudent commitment” to invest in emerging markets.
While the keystone power of the western hemisphere retreats into an isolationist stance, the rising power of the east is reaching out—literally as well as figuratively—to plan joint, renewable-friendly, continental-scale electricity grids with regional neighbours.
“The key to promoting energy transition in Asia lies in the massive development opportunity to develop and distribute clean energy,” Liu Zhenya, chair of China’s state-backed Global Energy Interconnection Development and Cooperation (GEIDCO), told a meeting of the UN Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok last month. The event brought together policy-makers from more than 30 mainly Asian countries.
Liu offered a vision of renewable and zero-carbon energy scaled up across Asia, balanced and distributed across regional transmission and distribution networks that ignore borders. He described his idea for a Global Energy Interconnection, “a platform to create a new energy development pattern and connected infrastructure, to deliver energy via transboundary power grids for sale to other countries,” the Bangkok Post reports.
Year-old GEIDCO, the Post states, “plans to create a series of trans-border energy grids linking renewable energy projects in China with other power generators in the region.” To date, grid weaknesses have hobbled the nation’s massive expansion of renewable generation, preventing its clean power from reaching customers.
Not all of the power travelling the envisioned transnational mega-grids will be clean, however. “Electricity is expected to come from hydropower dams on rivers in Yunnan, thermal, coal-fired, wind, and solar projects in Xinjiang, hydroelectric dams in Tibet, and a coal-fired power plant in Kazakhstan,” the Post notes.
China has “already signed memoranda of understanding for power interconnections with companies in South Korea, Japan, and Russia,” the Bangkok outlet reports. Russia appears especially enthusiastic about what it calls an “energy super ring” integrating the grids of eastern Russia, Japan, South Korea, China, and Mongolia.
“ASEAN, South Asia, and Central Asia as well as China, Russia, and Mongolia are already embracing cross-border energy connectivity,” ESCAP Under-Secretary-General Shamshad Akhtar commented. Cross-border grid interconnections already under construction, she added, “will allow low-carbon energy from gas, hydropower, solar, and wind to be traded across borders.”
Last week’s near miss and mass evacuation at California’s 770-foot Oroville Dam was being portrayed as a result of climate change and an example of neglected infrastructure last week, as the state braced for another round of storms amid assurances that the country’s tallest dam would hold.
“Lake Oroville is as full as it has ever been, and remains vulnerable: We’re still in the peak of the rainy season, and more rain is on the way,” reported meteorologist Eric Holthaus. “And it’s not just Oroville. Major reservoirs ring the Central Valley, and nearly every one is full, or nearly so,” he notes. “Several levees statewide are seeping, and workers intentionally breached one along the Mokelumne River in Northern California over the weekend to relieve pressure. The levee system was simply not designed to be this stressed for extended periods of time.”
While “California’s climate has always been extreme,” Holthaus adds, “what’s happening right now is just ridiculous. We are witnessing the effects of climate change play out, in real time.” Writing last Thursday, he warned that a series of five major storm waves in the course of a week could dump another foot of rainfall on the region.
And that’s a marker for climate change.
“Climate science and basic physics suggest we are already seeing a shift in the delicate rainfall patterns of the West Coast,” Holthaus explains. “A key to understanding how California’s rainy season is changing lies in understanding what meteorologists call ‘atmospheric rivers,’” which already cause about 80% of the state’s flooding. While those patterns are changing, “we’ve built dams based on old weather patterns, not for the extremes we’re now seeing. A clear problem emerges when we manage society for how things were, not how things are.”
The Washington Post reports that the U.S. government received but downplayed warnings that Oroville’s emergency spillway was unsafe, while the New York Times editorial board sees the episode as a “parable on infrastructure” and “the latest wake-up call that American public works are crumbling after decades of neglect.” It notes that the American Society of Civil Engineers gave the country an average grade of D in its most recent infrastructure report card, adding that “the average age of the country’s 84,000 dams is 52 years, and 70% of them will be more than a half-century old by 2020. Groups like American Rivers argue that many of these dams should be removed in the interest of public safety.”
“We are not maintaining the water infrastructure adequately,” agreed the Pacific Institute’s Peter Gleick, in an interview with the Times. “We are not maintaining it in Flint, Michigan, and we are not maintaining it at our big dams in California.”
But on Grist, Holthaus warns that “this is about more than just spending money to fix up our aging dams. The entirety of our country’s infrastructure needs to be reevaluated with the understanding that we have a unique opportunity to reimagine our shared future. If things are rapidly changing anyway, we might as well build a future consistent with our new weather reality.”
A relatively rare risk of large-scale hydroelectric generation forced nearly 200,000 people north of Sacramento, CA from their homes over the weekend, as tons of water being spilled from the United States’ tallest dam eroded spillways and threatened their integrity.
The evacuees were permitted to return home late yesterday. “But now, a fresh worry,” the Washington Post reports. “As families began going home to a place that just days before was under threat of catastrophic flooding, they were suddenly unsure whether the infrastructure that nearly failed will continue to hold back a trillion gallons of water.”
An evacuation was ordered in the town of Oroville at 4:45 in Sunday afternoon, after authorities determined that both the Oroville Dam’s primary and emergency spillway had been damaged by the enormous volume of water being released to relieve pressure on the main dam structure.
Dam operators had begun draining water down the seldom-used backup spillway on Thursday when erosion opened a hole in the reservoir’s main spillway. “We determined we could not fix the hole,” Bill Croyle, acting director of the state’s Department of Water Resources, told reporters late Sunday. “Once we have damage to a structure like that, it’s catastrophic. You don’t just throw a little bit of rock in it.”
But then, the rushing water opened a large hole in the emergency spillway, as well, which threatened to take out more of the reservoir’s concrete containment. “Its collapse would have sent a ‘30-foot wall of water’ crashing out of the lake reservoir,” The Atlantic reported. At that point, authorities ordered the last-minute evacuation downstream, and redirected some of the water being spilled back to the damaged main spillway.
By late Sunday night, flows down the spillways had been reduced, but evacuees had yet to be told when they could go home. At no point, officials underscored, was the main dam itself compromised. However, the damaged spillways will soon be tested again. The state expects additional rainstorms will add to the coming springtime flow of melted snow from the high sierras.
In 2005, the outlet reports, “three environmental organizations—the Friends of the River, the South Yuba Citizens League, and the Sierra Club—warned federal officials that the earthen emergency spillway wasn’t capable of handling extreme flooding. But on the recommendation of state officials who balked at the cost of paving the emergency spillway, the feds tabled the matter.”
The same report observes that repairing the Oroville Dam doesn’t “fit neatly into [U.S. President] Trump’s $1-trillion prescription for infrastructure spending.” As the Atlantic analyses it, “Trump’s plan largely means privatizing infrastructure development through the use of tax credits. Armouring the Oroville Dam’s emergency spillway isn’t the kind of investment likely to lure profit-minded private developers.”
One of humanity’s oldest ways of storing renewable energy, dams to create reservoirs for hydroelectric generation or other purposes are prone to a number of downsides. Research last year found that reservoirs generate more greenhouse gases than previously calculated. Tree clearing for the 824-megawatt Muskrat Falls hydro reservoir in Newfoundland and Labrador is likely to release a pulse of toxins, including mercury, downstream. And last October, North Carolina experienced a brush with the same threat as Oroville, when heavy rain in the wake of Hurricane Matthew threatened for a time to breach a 1.2-billion-gallon coal ash pond at a retired thermal power station.
“The dam crisis has a number of implications,” blogs Ethan Elkind, an attorney who directs the climate program at the Center for Law, Energy and the Environment at UC Berkeley. “It reminds us once again that U.S. infrastructure is badly in need of repair and replace. The big wave of projects following World War II are now reaching the end of their useful lives, as the dam now symbolizes.”
As seriously for the future role of lower-carbon hydro energy, Elkind suggested, a “dam failure could undermine the case for more dam projects going forward. What Fukushima did to nuclear power could now be happening to dams.”
Back in Oroville, more rain was forecast for as early as Wednesday and through Sunday, according to the National Weather Service.”
The bad news: investment in clean energy in Canada “tumbled by 46% last year,” to $3.16 billion, the lowest figure in more than a decade, the National Observer reports. The good news: it’s partly because our grid is so green already. And electrifying transportation may change the investment equation.
Citing data released by Bloomberg New Energy Finance, the Observer says the drop in new investment in Canada far exceeded a more general global decline. “Bloomberg’s analysis shows new investment in clean energy [not including large-scale hydro] was down 18% per cent worldwide last year. Investment heavyweights like China and the U.S. experienced investment declines of 26% and 7%, respectively, in 2016.”
Analysts saw both cyclical and structural reasons for the big drop in new Canadian commitments.
The expiry of a feed-in-tariff program in Ontario, and Quebec’s completion of planned wind energy additions, “appear to be the main reasons for the investment decline,” the Observer notes.
“Those policies have, for the most part, run their course,” said Amy Grace, BNEF’s head of North American research. “The better way to look at it from Canada’s perspective,” she added, “is that the last couple of years have been an anomaly, based essentially on a bunch of projects coming through the pipeline all at the same time. No other region in Canada will supplant Ontario and Quebec’s recent build.” The two provinces account for three-quarters of Canada’s electricity production and half of its consumption.
The other hurdle to investment in the sector, the Observer concedes, “is actually a good problem to have. Canada has less electricity to decarbonize than its peers in the G8.”
As Robert Hornung, president of the Canadian Wind Energy Association, observed, “the challenge is that 80% of our electricity is already non-emitting.” By contrast, half of Germany’s electricity and 67% of the United States’ is generated from fossil fuels.
Most of Canada’s clean power comes from large-scale hydro, but the country is also seventh in the world for installed wind capacity and tenth in solar. It also has significant non- emitting nuclear generation in Ontario, and one nuclear station New Brunswick. As a result, electricity generation represents only 11% of national greenhouse gas emissions. That will fall further by 2030, the federal government’s target date to eliminate most remaining coal generation from the national mix.
Meanwhile, much of the country has only limited need for new generation. Natural Resources Canada and the National Energy Board both foresee nearly flat, 1% annual growth in Canadians’ power consumption through 2040. In major power-exporting provinces like Quebec and British Columbia, projected electricity supply far exceeds anticipated demand. B.C., in fact, is in the processing of adding further unneeded capacity, in the low-carbon but highly controversial Site C hydroelectric project on the Peace River, in the province’s northeast.
Nonetheless, Canada is also “the eleventh-biggest GHG-emitting country in the world,” the Observer notes, citing the World Resources Institute. “The oil and gas and transportation sectors account for more than half of the country’s emissions.”
Addressing that problem could also address the slump in clean energy investment, said John Gorman, president and CEO of the Canadian Solar Industries Association. Once that remaining 20% of Canadians’ power supply is greened, “the only thing you can do is electrify the transportation, buildings, and industrial processes of your country.”
Although the Observer didn’t expand on the point, other outlets have projected that a breakout of electric vehicle sales in mainstream markets within the next half-decade could provide an answer to flat electricity demand and stubborn transportation sector emissions.
Wind, solar, and bioenergy production under Ontario’s Green Energy Act only accounts for about one-eighth of the electricity prices that have been hitting ratepayers’ pocketbooks and roiling the province’s politics ahead of an election scheduled for next year, according to analysis released last week by Toronto-based Environmental Defence.
In fact, a close look at ED’s numbers shows that, at a cost of $20 per household per month, renewables consume 12% of the power generation costs built into the average Ontario power bill and deliver 13% of the electricity, according to the supply mix reported by the province’s Independent Electricity System Operator. Nuclear represents the largest share of the cost, at 24%, followed by natural gas at 8%, hydro at 7%, wind at 6%, solar at 5%, conservation at 3%, and biogas at 1%.
(Delivery costs account for 31% of the bill, and the full list of admin costs comes in at 48%—but those system-wide expenses would apply to any and all forms of electricity.)
“Renewable energy is being unfairly and inaccurately scapegoated,” writes Environmental Defence Programs Director Keith Brooks. “Yes, wind and solar power installations have grown significantly over the past decade and, today, Ontario has more installed solar generation than anywhere in North America save for California and Arizona. The province is a leader in wind power, too. Yet, these sources of power are currently only responsible for a small fraction of what we pay for electricity.”
Ontario’s electricity costs are in line with other provinces and “very low by European standards”, he adds. And ED weighs the $460-million annual premium Ontario pays for renewable energy, according to the provincial auditor-general, against $4.4 billion per year in avoided health and environmental costs resulting from the province’s coal phase-out.
That move “reduced GHG emissions by approximately 34 megatonnes, the equivalent of taking seven million cars off the road,” according to an Environmental Defence backgrounder. “The coal phase-out also caused a dramatic reduction of nitrous oxides, sulphur dioxide, mercury. and particulate matter, all of which are serious air pollutants that have adverse effects on health and the environment.”
On the horizon, ED notes that Ontario Power Generation is angling for an 180% increase in its nuclear rate to cover the cost of rebuilding the Darlington generating station. “Spoiler: Prices for wind and solar are falling, while prices for nukes are projected to rise,” Brooks writes. “Renewables will win the future on cost alone.”