Archive for June, 2009

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Power Trip documentary to be aired

June 10, 2009

Michael Giberson

Power Trip - film by Paul Devlin

Power Trip - film by Paul Devlin

From the inbox comes word that Paul Devlin’s documentary, Power Trip, will be aired this weekend on BBC World and in the PBS World Voices program.  The film tells the story of the efforts of AES Corporation to succeed as the owners of the newly privatized (in January 1999) electric utility in Tbilisi, the capital of the former Soviet Republic of Georgia.

Several years ago, in a post on politics and documentary film, I called Power Trip “one of the best documentaries I’ve seen.” I said:

The film offers a perspective on capitalism and corporations hard to get in the Western world, because in the West so much of the institutional framework is taken for granted. In the beginning only 10 percent of Tbilisi customers were paying their electric bills, because they were used to power being “free” (i.e. provided by the government). Of course, electric power was also unreliable (unless you had good political connections). In Power Trip you can get a flavor of such abstract phrases as “institutional framework,” and why they might matter to making the world a better place.

Should be required viewing for international development professionals and students of comparative economic systems, development studies, or the economics of institutions. Actually, everybody should go see it.

Links to broadcast times June 13 and 14 are available on the Power Trip “Screenings” page.

Posted in Electricity, Film, Politics | Tagged | 1 Comment »

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Estimated wind power output in ERCOT for Summer 2009

June 9, 2009

Michael Giberson

Here are a couple of quick-and-dirty wind power forecasts for the ERCOT market for Summer 2009:

Estimate 1 – Total 4,832,900 MWh

  • June – 1,980,600 MWh
  • July – 1,529,600 MWh
  • August – 1,322,700 MWh

Estimate 2 – Total 4,572,500 MWh

  • June – 1,873,900 MWh
  • July – 1,447,200 MWh
  • August – 1,251,400 MWh

By “quick-and-dirty” I mean these estimates should not be mistaken for high quality commercial grade projections. The estimates are just two easy calculations based on a handful of publicly-available data from ERCOT that I happen to have handy. For comparison, during June-August 2008 wind power generated 3,358,500 MWh in ERCOT.

Estimate 1 was produced by comparing the wind energy output during January-April of each year to June-August of the same year. Over the period of 2002 to 2008, the energy output during the three summer months has averaged about 68 percent of the energy output during the first four months of the year.  Since during the first four months of 2009 a total of 7,102,757 MWh of wind energy was generated, the method yields an estimate of 4,832,900 MWh for summer 2009.

Estimate 2 was produced by comparing an approximate number for wind power capacity during the summer to the amount of wind energy generated during each summer for the  2002-2008 period. On average over this period, a MW of wind power capacity produced about 562 MWh of energy during the summer months. Currently there are 8135 MW of wind power capacity in ERCOT, and 8135 x 562 yields an estimate of 4,572,500 MWh for summer 2009.

[Note that I am rounding in presentation of estimates. In fact, given the roughness of the methods, rounding to 4.8 million MWh and 4.6 million MWh would be reasonable. The monthly break outs in both estimates are based upon the historical average distribution of energy over the three summer months: 41 percent in June, 31.6 percent in July, and 27.4 percent in August.]

I haven’t tested these methods to see how well they would have performed in the past, I don’t offer confidence intervals or other guidance on how much variance might be expected. Note that no meteorological data was involved in this wind power forecast. It may be possible to do better as a forecast; it is certainly possible to produce a more professional forecast, with defensible methods, high quality data, sophisticated modeling and solid data analysis.

But the professional forecast will cost you something, while today’s “blogger’s special” is available free of charge.

ERCOT_Generation_by_Technology_2002_2009

[And speaking of the ERCOT data I happened to have handy, the chart above shows monthly output levels by fuel (or non-fuel generating technology) for ERCOT from January 2002 to April 2009. Natural gas and coal are the big deals, nuclear next, and then wind power - shown by the orange line - growing strong.]

Posted in Electricity | Tagged , | 8 Comments »

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What does Waxman-Markey have to say about kites?

June 8, 2009

Michael Giberson

The answer to the title question is “nothing,” according to Marc Gunther (though he admits of the difficulty of being certain when the bill is 932 pages and still in process). The kind of kites he has in mind are high-altitude solar power collectors, under development by the Makani Power company. That Waxman-Markey has nothing to say on kites is a good thing, says Gunther, since no one knows whether the idea is practical or likely to become economical.

Gunther then contrasts that silence to the many mentions of coal, cars, battery technology, financial services, wood stoves, and so on, and stumbles onto the conclusion that it all adds up to a heavy-handed attempt to manage the energy economy via central government industrial policy.

After quoting the bill’s elaborate conditions for coal plants to gain federal assistance for carbon capture and storage, and terms by which the plant’s could lose access to federal assistance, which may or may not be under an accelerated timetable, and for which the EPA might or might not grant extensions to particular non-complying generators, Gunther observes:

This is the kind of thing that worries me about Waxman-Markey in particular and about the willingness of the Obama administration more generally to manage so much of the economy—energy, autos, financial services. It’s hard, nay, impossible to know if CCS is a smart, workable and affordable technology or when, if ever, it should be deployed. Maybe kites are a better idea. Maybe not. But should the government decide?

It’s not just clean coal. As I wrote last week, Obama & Co. are ready to place bets on which companies and regions are likely to develop battery technology for electric cars.

[...more quotes on geothermal heat pumps and wood pellet stoves...]

Do you see the problem here? Just to be clear, I don’t have a position on biomass stoves and geothermal heat pumps. I just don’t think the government should have a position either.

To be sure, we need an energy revolution. … But how do we get from here to there? With clean coal? Electric-car batteries? Heat pumps? Wood stoves? Kites?

The unfortunate answer is no one knows. Not the president, not Congress, not Nobel laureate and energy secretary Chu, not venture capitalists or energy company CEOS or Fred Krupp or Jeff Immelt or Joe Romm. Our energy and climate problems are knowledge problems, too. And the best way to solve knowledge problems – which is to say the best way to spur technology change – is to create conditions that get lots of scientists and engineers to work on them, invite lots of investors to place their bets on which ones will work and then test those ideas in the marketplace. By aggregating thousands of decisions, markets will help us figure out which of today’s technologies or which ones yet to be invented get us closer to the clean energy economy we need.

Did you notice the felicitous phrase embedded twice in that last paragraph, “knowledge problems”?

[Via the Energy Collective.]

Posted in Energy markets, Environmental policy, Politics | Tagged , , | 2 Comments »

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Stay in school

June 8, 2009

Michael Giberson

A few years ago I attended a free concert in the park in Arlington, Virginia by The Grandsons. Between songs lead guitarist Alan MacEwen observed that the bass player had a gig in Atlantic City, New Jersey the night before and had barely arrived at the park moments before the concert was to begin. The bass player – I don’t recall who it was at the time – offered an explanation that ran something like this:

I haven’t actually had any sleep yet, so I hope I can keep up. But it was a lot of fun to play with [name of band leader since forgotten]. Actually we played the early show at [casino name forgotten], we opened for [band name forgotten] and were done by 10:30 or so last night. But [other person's name] and I decided to gamble, and had a few drinks. Then we met [members of some other band] and drank some more and gambled some more. This continued until we got hungry, and went for breakfast. It was light outside and I said, “Hey, I’ve got to be back in Virginia by noon,” so we grabbed some food and hopped in the car and drove like madmen down I-95. And [musicians name] was in the back feeling sick, and I’m saying to hold it in because I got to get back to Virginia, and …

At this point the bass player stops the story and looks out at the crowd. It is a sunny Sunday afternoon, a few clouds in an otherwise bright blue sky. Families have picnic blankets spread out. Kids are frolicking.

He blinks a few times, and then sums up:

So, kids, remember: [with emphasis] stay in school, take your vitamins, and always listen to your parents!

Okay, so I wasn’t taking notes, the story might not be exactly as depicted. Given the bass player’s demeanor that day, I’m not sure his account was reliable in the first place. But I remembered the moral of the story.

I was reminded of the episode by Derek Thompson’s post at the Atlantic Business Channel, Go to college, in which he makes his point by reference to unemployment statistics.

Probably a better argument, even if less memorable.

Posted in Education | Tagged | Comments Off

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Waxman-Markey is really a command-and-control energy bill? No, say it ain’t so!

June 8, 2009

Lynne Kiesling

While we’re on a carbon note … [sarcasm] yeah, I’m shocked, really, totally shocked that, as Virginia Postrel notes, the 946-page Waxman-Markey House energy bill proposal is really a piece of command-and-control legislation.[/sarcasm]

The WaPost notes that the “cap-and-trade” bill sponsored by Henry Waxman and Edward Markey is, in fact, loaded with all sorts of direct federal regulation of a decidedly dictatorial command-and-control nature.

Virginia goes on to point out the most disturbing thing, which is the idea that provisions are being inserted into the bill with the expectation that most members of Congress will not read what they are going to vote on. And this Washington Post article provides some more details on how much lobbying and special interest money is being directed at modifying, crafting, and word-smithing the bill to ensure that the economic effects go to those interests who expend resources to develop political capital:

But as the legislation’s chances improve, corporations, environmentalists and other interest groups have worked to put their imprint on the bill. The Center for Public Integrity said its review of Senate disclosure records showed that more than 880 businesses and interest groups have registered to lobby on climate change in the first quarter of 2009 — up more than 14 percent over the same time last year.

The groups include coal companies, investment banks, wind and solar firms, state governments, auditing firms and technology companies that might be part of the proposed trading system for carbon. An item inserted at the behest of Rep. John D. Dingell (D-Mich.) would give the auto industry $1.4 billion worth of extra allowances starting in 2012 when the cap-and-trade system takes effect, according to an estimate by the Union of Concerned Scientists.

[sarcasm]Yeah, I feel really confident in political processes. I’m sure that this political process will serve the interests of science, economic efficiency, and the environment. And I feel really, really well-represented in this process.[/sarcasm]

Posted in Economics, Environmental policy, Politics | Tagged , , | 3 Comments »

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The economic and environmental value of forests

June 8, 2009

Lynne Kiesling

The New York Times has an interesting article on how the growth of carbon markets enables us to quantify the environmental value of forests.

The researchers found that paying to conserve the forest was more valuable than plantations as long as poorer nations could earn $10 to $33 for each metric ton of CO2 saved. Currently a credit representing a metric ton of CO2 sells for about $20 in the European Union, which has the world’s largest greenhouse gas trading system.

In addition, the researchers found that peat forest areas, where stored carbon is most abundant and thus cheapest to manage, contained almost twice the mammal species density as other areas of forest.

Of course, anyone who has followed the development and the membership of the Chicago Climate Exchange will not be surprised by that finding; note the number of forestry members of the CCX. The CCX also illustrates the value of having private parties come together voluntarily to determine mutually beneficial use rights in the common-pool resource that is the climate system, even without a bureaucratically-determined cap.

Posted in Economics, Environmental policy | Tagged , , , | Comments Off

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On ethanol’s subsidy and related

June 7, 2009

Michael Giberson

Robert Rapier explains a few ins and outs of ethanol.  For example, he observes that ethanol producers like to claim that it is the oil company which blends ethanol into gasoline that is subsidized, not the ethanol producer itself (since the blender gets a credit against federal taxes — in fact, I just heard this claim at a Lubbock chamber of commerce energy program two days ago.) Not so fast, says Rapier:

The way the blender’s credit works is that gasoline blenders get a credit – recently reduced to $0.45/gal – against the federal gasoline taxes they have to pay for each gallon of ethanol blended into the gasoline pool. However, it is not true that this subsidy actually benefits the oil companies. Ethanol proponents like to make that claim, but any time there is talk of getting rid of the credit, they are the ones who scream loudly. You won’t hear oil companies lobbying to keep it. Thus, it should be clear who really benefits.

Rapier also explains one of the economic traps that bedevils corn-based ethanol – its heavy reliance on fossil fuel imputs for fertilizer and process heat. As a partial substitute for gasoline, when gasoline prices go up, ethanol prices also go up. But at gasoline prices are generally correlated with natural gas prices, ethanol producers find their costs going up at the same time, limiting the benefit they gain from higher ethanol prices.

(Natural gas supply conditions in the U.S. have pushed domestic natural gas prices to the low end of the traditional relationship between natural gas and oil prices, perhaps offering some temporary breathing space to ethanol producers.)

Also check out Rapier’s recent review of a book on the potential for algae-based biofuels.

Posted in Energy markets, Politics | Tagged , | Comments Off

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Expectations driving gas prices

June 5, 2009

Lynne Kiesling

Tim Haab did it, so Mike and I don’t have to!

Yep, gas prices are creeping up again (Click graph to the right).  Why?  Here’s one possible explanation from Bloomberg:

Apparently, non-OPEC suppliers are likely to see their supplies decline over the next year, and OPEC suppliers don’t have the capacity to make up the difference. Improvements in the economy will lead to rising demand, and consequently to rising oil prices, through 2010, and prices today are reflecting expectations of this future relative scarcity. These expectations exacerbate the usual spring price increase due to emissions-driven changes in fuel formulation and seasonal increased demand for driving.

Click through to Tim’s post to see his spiffy gas price graph.

ETA: One of our recent KP posts on gasoline prices was Mike’s post on the subject from February, and back in 2006 I wrote this reprise of some of my earlier posts on the subject.

Posted in Economics, Energy markets | Tagged , | Comments Off

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Mankiw on the B-School Economist

June 4, 2009

Michael Giberson

Mankiw speculates on the differences between Econ department economists and business school economists. Among his suggestions, self-selection by the faculty member, the kind of research rewarded in each place, and this remark about the focus of students:

Faculty who teach PhD students are used to being asked, “How did you derive that first-order condition? How can you prove that the equilibrium exists and is unique?” Faculty who teach MBA students are used to being asked, “Is that really how it works?”

I wonder how economists in law schools differ from economists in Econ departments and business schools?

Posted in Economics, Education | Tagged , | 2 Comments »

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A century of Benny Goodman

June 4, 2009

Lynne Kiesling

Last Saturday was the centenary of the birth of Benjamin J. Goodman, otherwise known as Benny, the King of Swing. His music, and his signature virtuoso clarinet work, changed music forever. To riff off of something my favorite musician said about Buddy Rich, I defy any sentient being not to be moved by hearing “Sing, Sing, Sing”! Especially the original 1938 Carnegie Hall concert recording, for which I have a great fondness, because it was also a breakout event for one of the other most transformative musicians ever, drummer Gene Krupa. Coincidentally, the centenary of Krupa’s birth was January 15, 2009. Any of you who appreciate the crisp backbone that the hi-hat adds to music should thank your lucky stars for Gene Krupa, the inventor of the hi-hat.

I was reminded of how fantastic Goodman and Krupa (and when they played with Teddy Wilson and Lionel Hampton as the Benny Goodman Quartet) remain to this day by this truly outstanding NPR story from last Wednesday on Goodman. I encourage you to click through and listen to the whole commentary if you missed it; it’s a wonderful tribute to Goodman and his century.

Posted in Music | Tagged , , , | 1 Comment »

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