Friday, December 30, 2011

Counting DownThe Biggest Energy & Environment Facts of 2011

Facts can be ignored but stubbornly shape our world.  Here are the first 6 of this year's 11 Biggest Energy and Environment Facts.  I will post the next 5, plus the Biggest Fact of 2011 tomorrow.  Let the Countdown begin:

11. The number 11 Fact of 2011 is one that did not happen--Electricity Rate Shock in Pennsylvania, when the last electricity rate caps ended as of January 1, 2011.  Despite gloom and doom predictions, no rate shock or broad energy shock took place during 2011, in large part due to shale gas production crashing the price of gas. Instead electricity prices are down 10% to 50% in inflation adjusted dollars, compared to 1996 levels.

As part of implementing its 1996 Electricity Competition and Customer Choice Act that ended state granted monopolies for electricity generation, Pennsylvania capped generation rates at essentially 1996 levels.  Many of those rate caps ended effective January 1, 2011. Why no rate shock?   First, shale gas production crashed the price of natural gas and also
shaved as much as 5 cents per kilowatt-hour of the price of electricity.  Second, approximately 10,000 megawatts of new electricity generation capacity were built in the last 10 years in Pennsylvania alone.  Most of it was natural gas but it included about 1,000 megawatts of renewable generation.  Third energy efficiency and demand response boomed in Pennsylvania and the PJM wholesale market, jumping to 15,000 megawatts in the PJM 2011 capacity auction.  These three reasons added up to no electricity rate shock in 2011 when rate caps ended, the big story that did not happen.

10.  Owners of coal-fired power plants have announced the closure of 231 coal-fired units or 48,000 megawatts by 2022, according to a list maintained by the Edison Electric Institute. Plants on the list comprise about 15% of the nation's coal fleet. The EEI listing stated that the reasons for the closings were low-priced gas, declining demand, age of plant as well as EPA tightening air rules.  The EEI listing is the single most authoritative tracking of coal plant closings and documents the transition from coal to natural gas that is on-going in the power industry.  Natural gas now supplies 25% of US electricity power, while coal falls to approximately 43% in 2011.

9. President Obama announced on July 29, 2011 an agreement to raise the Corporate Average Fuel Economy standards to an average of 54.5 miles per gallon by 2025 for passenger vehicle fleets.  The existing CAFE standard was set in 2009 and calls for the fleet average to be 35.5 mpg by 2016, up from the current level of 27.5 mpg.  The 54.5 miles per gallon will cut oil consumption by about 2.2 million barrels per day or more than 10% of current consumption and reduce foreign oil imports by more than 20%. from current levels.  As Vice President Biden might say, a truly big deal for our economy, environment, and national security.

8. California raised on April 13th, 2011 its Renewable Portfolio Standard for electricity production from 20% to 33% by 2020.  California by itself is one of the 10 biggest economies in the world and is about one-eighth of everything in the USA. It is so big that it matters a lot. Extending its commitment to renewable energy will transform power production in California and beyond.  Its massive demand for solar is helping to create the economies of scale that is driving down the global solar price.  California is on the way to becoming the first state that sources all of its electricity from natural gas and renewable energy.  It looks like it may get there by 2020.

7. In reaction to the Fukushima nuclear disaster, Germany announced it would close all its nuclear reactors by 2022 and get 35% of its elecricity from renewables by 2020. The 35% goal represents a doubling of renewable energy in Germany, the world's 4th largest economy.  The German decision to jump to 35% renewable energy will impact more energy technologies and markets than its decision to exit nuclear power. It confirms the global boom in renewables.

6. In 2011, US Greenhouse Gas emissions will likely decline to 1998 levels and by about 0.7% compared to 2010.   The 2011 decline will be the 4th year out of the last 6 when US  Greenhouse Gas emissions declined.  Rising energy efficiency, increasing renewables, and low-priced natural gas displacing coal generation are the major reasons why US emissions have been falling.  EIA projects a further decline in 2012 from fossil fuel sources.  Remarkably this trend to lower US emissions has drawn very little media or awareness.  Instead most reporting focused on the misleading 2010 increase over the 2009 level that was depressed by the near depression experienced in the USA from September 2008 to June 2009.

Check the blog tomorrow for the top 5 Facts of 2011!

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