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Thursday, August 5, 2010

Why Renewables

Presented to the NZ govt. in response to her request for comments on the 2010 energy policy document.

Why Renewables


The reasons for increasing the portion of our energy which comes from renewable sources and decreasing our dependence on imported and domestic fossil fuels has been hashed over so many times that it is almost redundant to write such a paper. However, it is useful sometimes to have a check list and there may be an idea or two in the following which hasn't occurred to the reader. Most of this paper can be skimmed over, just reading the headlines. Please feel free to add any other reasons for renewables that occur to you. If you put them in comments, I will incorporate them into the article.

When we produce liquid fuel from, for instance, wood waste, we put CO2 back into the atmosphere that has been recently removed. We create a carbon cycle but introduce no new CO2 into the atmosphere. When we produce electricity from wind or sunshine we completely displace the use of fossil fuel and the production of CO2. It is true that if New Zealand completely ceased to release sequestered (fossil) Carbon, we would have very little effect on the world emission of green house gas. However, there are two reasons we should make the effort. First, we are citizens of the world and should do our part as a population of 4.3m. In fact, since we are part of the industrialized world and arguably produce 10 times the CO2 per capita as the average resident of this planet, perhaps we should be making the same effort as 43 million other people. The second reason is that the world is tightly connected in many different ways and any innovations we come up with can spread to other jurisdictions. People are by and large sheep. They follow innovations from others. Kiwis are innovators

Improvement of our Balance of Payments
As individuals and as a nation, we borrow in order to spend about 10% more than we earn. A portion of this is due to our import of fossil fuels. With the advent of electric cars which can be charged 'when-power-is-available' rather than 'on-demand', there will be a continuous steady reduction in our import of fossil fuels as the domestic fleet switches over to electricity. This will greatly improve our balance of payments. Even now, before the advent of electric cars, renewables could allow us to heat, run our stoves and so forth with electricity displacing fossil fuels(natural gas). To gain the full effect on our balance of payments from the uptake of electric cars, we want to be generating our electricity from renewable sources. Curiously,though, it has been reported that even if the electricity for charging electric cars was produced by coal fired power stations, there would be a small net reduction in carbon emissions. This seems hard to believe but probably has something to do with efficiencies of large power generators.

Reduction in the price of Fossil Fuels
Supply and demand is a hard task master for suppliers. As the demand for fossil fuels decreases around the world, the price of fossil fuels will decrease. We will have need of some liquid fuels for some time to come, even if our domestic fleet completely converts to electricity. Liquid fuel will be needed for non electrified trains, for heavy trucks, for earth moving machinery and so forth. Everything we can do to reduce the demand for fossil fuels will reduce its price. As with the previous argument, while our direct influence may be small, our example is large.

While at present, at least, we are at the low end of the scale with respect to our vulnerability to terrorist attacks, we are at the high end with respect to our vulnerable to natural disasters*. If Huntley** and/or a couple of our hydro dams was disabled tomorrow, we would be hard pressed. Renewable energy in most of its forms tends to be diffuse rather than concentrated in one geographical location. As such it benefits from the Internet effect. A distributed electrical generating network is very hard to knock out either by man made or natural disasters.

*Since the writing of this blog, we have had the Christchurch Earthquake.
** New Zealand's only coal fired power station.

Stabilization and Reduction of Electricity Prices
The cost of generating electricity using fossil fuels is going one way. At the same time, the cost of generating renewable energy is coming down as we mount the technological learning curve and as large scale production cuts in. It makes sense to steadily replace our use of fossil fuels with renewables.

Improvement of our Export Competitiveness
Energy is a large part of the cost of every product we export, whether agricultural or industrial. Countries which continue to obtain most of their energy and fertilizers from fossil fuels will become less and less competitive while the converse is true for countries which adopt renewables. If we do nothing we will fall behind. If we innovate rapidly we could be ahead of the pack with a continuing competitive advantage. Being just ahead of the pack is hugely different in economic terms than being just behind the pack

Reduction of our Kyoto Expense
For better or worse, we have committed ourselves to Kyoto and an ETS. This will cost us money which comes from the taxes of Kiwis. Every Kwh we produce renewably is that much less CO2 produced and that much less money flowing out of New Zealand to no purpose.

Safety from a World Economic Meltdown
Despite the pundits trying to talk us into an economic recovery, the indicators are that the world is still well and truly immersed in deep doodoo. Worse still, economists are all talking about getting us back to a 2 to 3% growth mode. At 2% our economies double every 35 years. At 3%, every 23 years. Doubling our economy results in the use of twice the water (actually more than twice in most countries), twice the wood, twice the minerals and so forth. A doubling of the economy also produces twice the pollution and garbage. How many countries do you know that could find twice the water or harvest twice the wood without destroying their Giya support system. New Zealand is one but there aren't many others. This suicidal quest for continuous growth is very likely to lead the world again and again into more and more severe economic downturns. With globalization, we are extremely vulnerable to economic quakes in other parts of the world. This recent mini eco-quake gave us a taste of how this works. Being totally energy-independent is one of a number of vital measure to make us resilient in the face of overseas economic meltdowns.

Enhancement of our Clean Green Image
A hard to measure but undoubtedly a significant part of our export industry depends on our clean green image. For northern tourists who come from crowded, polluted environments, a vision of clean green New Zealand stays with them when they return home. This can include solar panels on house roves, wind turbines on ridges and on rail easements with wind turbines powering electrified trains. Despite what we might think of such things, spoiled as we are by our wild and wonderful country, tourists see these generators of renewable energy as the signs of responsible, thoughtful, clean citizen of the world.

If you look at the above reasons, most have to do with the good of New Zealand, not of the world and that is how it should be. True, they contribute to the good of the world, but our primary goal should be the long term welfare of New Zealand. Our focus should be on decades and even centuries rather than election cycles.

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