Started Hosted Blog

Started Hosted Blog

Recently my blog that I hosted myself at k-lenz.name/LB for close to 20 years went down with a database error.

I considered investing some time to find and fix the error. Then I decided I would rather use that time to start over with this new hosted blog.

Leave the technical side to people who know what they are doing and pay a small amount of money.

I will probably figure out how to point the old address to this new one. I will also need to figure out how to deal with all the old content.

Altmaier Proposal

German Economy Minister Peter Altmaier just published a short paper on climate change policy. His portfolio includes energy, so he does have some influence in these matters.

I used to blog about him when he was Environment Minister in 2012 and estimated the cost of the feed-in tariff system as one trillion Euro until 2040 to justify a proposal for stepping on the brakes. So for the old times, here are some observations on that new paper.

I agree completely with the basic idea that climate hawks and industry need to work together. My most basic idea on this blog (phaseout profit theory) asks for exactly that. Work with the fossil fuel industry. Make that happen by getting to higher prices with less production.

I also think the idea of a “Clean Products Made in Germany” label might have some merit. I recall that the “Made in Germany” label was intended to reduce sales of the products it was attached too, making sure that consumers know they are buying from another country.

But that proposed label seems a bit long and complicated. And why should consumers care about the country? I for one care about CO2 emissions, not where some piece of green steel was made. Why not just have a world wide label like “Green”, with variants like “Green Steel”? Altmaier later recommends more world wide coordination, so that would fit better.

The idea of this proposal is to get a general consensus on climate before the next election season starts next year. I am not convinced the Green party (now the major rival of the CDU, which Altmaier belongs to) are interested in having their main competitive advantage removed by this sort of thing.

I am also skeptical of the motivation of getting long-term stability in climate policy over such a mechanism.

One reason is that ambitions will have go go up, as they are doing right now with the EU adjusting its 2030 goal upwards. More and more people see the world burning and will ask for more radical measures. Long-term stability would work against more ambitious goals and for more business as usual.

And the mechanism for a democratic society to decide about these questions is voting. If the CDU loses voters to the Green party over their climate record (as well they should), the new government should not be shackled in their policy options by any consensus like the one Altmaier wants.

I think the way to get long-term stability would be to have a long-term predictable mining schedule for fossil fuels modeled on the Bitcoin mining schedule. Once that is in place, everything else just follows automatically. Don’t burn more fossil fuel than is compatible with climate goals. Don’t mine more fossil fuel than you can burn.

I am not sure how to get to a world with such a mining schedule. The German government may have a role to play there. But just like the Bitcoin model, it would need to be based on a global consensus.

Neom Helios Desert Energy Project

Desertec Industrial Initiative recently held a web seminar featuring Paul Van Son and Driss Beraho.

The first short presentation by Son was about what the Desertec Industrial Initiative is up to lately. We learn that the vision now exceeds green electrons and has expanded to include green molecules. That is hydrogen made from renewable energy projects. I recall having an interest in hydrogen from the Mongolian Gobi desert 10 years ago. So I was excited to hear about these developments, especially the fact that the European Green Deal program will try to help getting this started too.

The other presentation gave some basic facts about the Neom Helios project.

I was not familiar with Neom. It is the name of a future city in Saudi Arabia where the government intends to invest $500 billion in an area of 26,500 km2 in the North West corner of Saudi Arabia, close to the Red Sea. The Neo part is easily understood as “new”, while M is short for “future” in the Arabian language.

The Neom Helios project will be the largest green ammonia project in the world. The presentation mentioned a scale of gigawatt renewable energy generation. Investments should be around $5 billion to produce renewable ammonia. Ammonia has been chosen over hydrogen because there is more experience with shipping it.

The presentation explains that Saudi Arabia has experience with energy exports and is located conveniently on established shipping routes to key markets. Saudi Arabia and the Neom area in particular has excellent renewable resources. Prices for renewable energy are way down now making it possible that such a project may be online in 2025.

The key market will be the mobility market, saving CO2 emissions in the process.

The water needed for the electrolysis will be provided by desalination. At scale this kind of energy system will use less water than the existing system which needs water to cool power plants.

What can the EU do to make this kind of project a success?

One idea coming to mind is to have feed-in tariffs for green hydrogen. As long as this kind of energy is more expensive than oil, that might help. On the other hand with the prices for the original solar electricity being as low as they are now, maybe there is not so much need for that.

One already existing regulation is the fuel efficiency for cars in place. That is calculated by the average of all sales of a car maker. If you use hydrogen as a fuel, the cars burning that will enter the calculation reducing the average.

Another idea would be to restrict and reduce oil and gas imports to the EU by a long-term predictable schedule. If the EU reduces fossil fuel imports, green molecules will naturally fill the gap.

Desertec not Outdated

I just heard about Mr. Abdelmadjid Attar, since the North Africa Post reported about his views on the Desertec project.

He is quoted like this: “The Desertec project is outdated. Let’s forget it,”

Being of the opinion that the world is in urgent need of massive solar projects, including in the North African deserts, I disagree.

So I was interested in finding out who Mr. Attar is. Turns out that he is a geologist who has spent most of his career looking for oil and gas in the fossil fuel industry. He recently was appointed to the post of Algerian energy minister, which means that he will also lead OPEC meetings coming up, since it is Algeria’s turn at the bat there.

Another background article explains that Algeria has substantial oil and gas resources and is interested in striking up new deals with international oil companies on developing them.

With such ties to the fossil fuel industry, it makes sense that Minister Attar would play down solar potential. But is he right? Is the Desertec idea outdated?

Actually the reverse is true. Projects like Desertec make much more sense now than ten years ago.

For one, prices for solar energy are way down now compared to then.

Next, action on global warming is much more urgent than ten years ago. One of the international oil companies Minister Attar wants to invite recently announced their intent to massively increase their renewable investments for exactly this reason.

So the outdated model is that of digging out ever more oil and gas. The outdated model is to rely on fossil fuel for income. The outdated model is business as usual.

Fossil fuel is on its way out. OPEC should lead the change by agreeing on a long-term reliable world wide production schedule with the quota distributed over a blockchain-based market mechanism.

Forget about new fossil fuel exploration. That way of thinking is outdated, not Desertec.

For anyone interested in what the Desertec project is up to lately, I recommend looking at their website. Turns out that they agree with the idea that the original concepts have evolved. The latest development is the MENA hydrogen alliance, which aims at adding green molecules to green electrons.

Democrat Report on Fossil Fuel Industry Influence

Emily Holden reports in the Guardian on the Democrats plan to release a 200 page report about how the fossil fuel industry bought policy over the decades to delay climate measures.

I have not read that report, which may not be published yet. But I know the story already from other sources.

Politics in the United States is sold to the highest bidder. There is nothing wrong with that if the highest bid is for sensible policy. But with climate, the fossil fuel industry felt threatened and poured billions of lobby money into deny and delay.

This particular report will shed some more light on these developments, which many Americans are not aware of.

And I agree in part. Lobby money does have massive influence. And the fossil fuel industry did deny and delay.

But I am not sure about he remedy. Getting the corruption of climate lobby money from the fossil fuel industry out of the picture leaves us with zero. Better than the massive minus described in the article.

But I would prefer to keep the fossil fuel money in the system, but have them start advocating for predictable production restriction plans with strong enforcement.

I leave it as an exercise for the reader to find out why they would be interested in reversing course. The category of this post is a massive hint for that.

“Reverse OPEC” Proposal by Kamela Harris

I was thrilled to read this post by Aimee Barnes at the Columbia University Earth Institute.

It explains that Kamela Harris (recently nominated for Vice President of the USA) wants international coalitions of countries trying to reduce fossil fuel production. The blog post calls this “reverse OPEC”.

I think this is a great idea, though I called the thing “OCIC” instead before, which would stand for “Oil Consuming and Importing Countries”.

On the other hand, I disagree with the idea that fossil fuel companies might not be interested in joining. Of course they want less oil on the market. They have been doing this first, starting with the Texas Railroad Commission ages ago and continuing with OPEC. Beside the valid reasons of climate policy and conserving more of the treasure for future generations, they profit from higher prices, which naturally follow from less production.

Anyway, that is another good reason to vote for Harris in the upcoming election.

Could BP Coordinate Their Move to Less Production?

BP announced last week that they plan to reduce oil production by about 40 percent over the next decade, which is “at least one million barrels of oil equivalent a day”. They also announced to increase low carbon investment by a factor of ten to $5 billion a year. The plan is to develop from an International Oil Company (IOC) to an integrated energy company (IEC).

I applaud these plans. Every drop of oil that BP will not produce under this policy of reducing supply will not be burned. That will reduce emissions. Oil left in the ground does not emit CO2.

On the other hand, checking present oil supply, it sits at 80.6 million barrels per day. BP reducing their supply by one of those 80.6 million will not have any major impact on the big picture, if other oil companies don’t follow this move.

And the additional $5 billion in investment is nice to have, but the EU just decided to spend EUR 750 billion as their answer to the corona crisis, with 30% of that going to the European Green Deal effort. That works out to an additional EUR 225 billion in green investments, so the BP extra $5 billion does not change the big picture here either.

So what if the whole oil industry looked at the Bitcoin mining schedule and decided to reduce production by half every four years? Why restrict this very sensible move to one company (BP) as opposed to everyone around?

Of course, if oil companies right now held a meeting and decided to extend the BP move to the whole industry, they might actually be in violation of antitrust law.

As far as EU antitrust law is concerned, that is one way in which current EU policy is useless and harmful to the European Green Deal effort. That effort states that it is the most important policy of the EU Commission to finally do something about the climate crisis. And when the oil industry decides to actually go ahead and do something to limit emissions, they potentially get hit with a billion Euro antitrust fine?

I happen to think that the European Green Deal effort needs to update current antitrust policy to make sure it does not stand in the way of supply-oriented solutions. Antitrust should be abolished completely before it is allowed to harm climate efforts.

I may write some more about this…

Nothing Wrong With EEG Payments Running Out After 20 Years

The German Law on Priority for Renewable Energy started out 20 years ago. The basic concept was paying a fixed price for renewable energy for 20 years. That price was calculated to make sure people could make a profit over those 20 years.

Now that the first installations under that law are falling out of the scheme, people are calling for some kind of follow-up system. See this Handelsblatt article.

I am not sure that is necessary. The owners of these installations have been paid in full over those 20 years. They got what they were promised.

And since the installations are paid for in full, now their cost of operation is basically zero. There are no fuel costs with renewable energy.

If you can’t find a way to use zero cost energy, I don’t think someone else should pay for that. You can always mine Bitcoin with that zero cost electricity if you don’t find any other idea.

But the really interesting point is that more and more installations will fall into this category over the next decade. There is nothing to stop a solar panel from producing electricity for longer than 20 years.

That in turn means that all those calculations of cost are off by whatever electricity will be produced after the installation is paid off. That doesn’t matter much, with only small amounts of renewable electricity coming from that category. Now.

But that will change, as over the decades, people will find out that more and more electricity comes out of that category.

Solar is already very cheap now. My dream a decade ago, when I was blogging about hydrogen from desert locations, is coming true right now. Kees van der Leun estimates the cost of 1 MWh of green hydrogen as about $20 right now.

That does not include the long term effect of all those hydrogen production solar panels working long after they have been fully paid for.

20 Gigaton is 50 btc

The solution to the global warming emergency is to radically reduce fossil fuel production by a long term production schedule modeled on the Bitcoin schedule.

That one started out with 50 bitcoins every 10 minutes, which is now down to 6.25 after the third halving in May of this year.

Since this is my proposal and my blog, I get to decide on the fossil fuel production schedule. I want to start from 20 gigatons of CO2, which would be the equivalent of the 50 bitcoins when the system started.

I will take a moment to explain that number. Then I will write a bit about how to distribute the production quota.

In 2018, global CO2 emissions were around 36.6 gigatons of CO2.

Around 55 percent of that was absorbed by carbon sinks like forests and oceans, leaving only about 45% to accumulate in the atmosphere and raise the record to 417 ppm in late May.

That means a little over 20 gigatons were absorbed by sinks. So if we start out with that number, we emit exactly as much as was absorbed in 2018. That in turn would mean avoiding to dig the hole deeper and increase the ppm value.

I also note that starting with 20 in 2020 is easy to remember, just like the three goals of the EU for 2020 (reduce CO2 emissions and energy use by 20 percent and get a 20 percent share for renewable).

Then it would be fun to do exactly the same as Bitcoin. Go to 10 gigatons 4 years later and keep going down by 50% every four years.

That would be a long term production schedule which would enable people to plan ahead.

And it would be the kind of radical change that would be required. Sorry, but the “solutions” tried until now just fall way short of having any chance of working.

This would also give a large boost to fossil fuel prices. Imagine a world where oil production is guaranteed to go down by half every four years. It does not take any financial genius to understand that the oil would be worth way more in such a world.

That of course leaves the small problem of who would be in charge of issuing and distributing the production quotas. If this problem is impossible to solve, I might as well be talking about creating a second moon for my new world (hello 1Q84).

I think that this problem can be solved by looking at what Bitcoin did. Just model the production quota issuing and distributing on Bitcoin.

Volker Quaschning Wrong

That is a “man bites dog” headline. Stop the presses, I found a point where I disagree with his opinions. Does not happen often.

Quaschning recently blasted the new German hydrogen strategy, saying it is only done in order to misdirect people away from the government’s renewable energy policy failures, that hydrogen is extremely expensive and has no chance to reach the climate goals.

I think that is a bit too harsh. Like Jakob Schlandt here.

This is a new policy that will invest 9 billion Euros. That is much closer to the kind of money people should throw at the climate emergency. Of course orders of magnitude too small amounts, but it is a good start.

I agree that the renewable energy policy in Germany in recent years was a disaster. But these 9 billion certainly will not be invested in glossy PR brochures. They will start moving things. And I for one root for their success.

I am reminded of nuclear fans 10 years ago objecting to renewable energy with insightful comments like “the sun does not shine at night”, being mainly motivated by the fact that renewable energy is in competition with nuclear. This feels like Quaschning does not like hydrogen because he thinks it detracts from the renewable energy policy he favors.

And it is true that green hydrogen is expensive now. But so was solar in 2000. Wait a couple of years and see what those 9 billion in initial investment can do.

I think hydrogen will be needed a lot in a renewable energy future. Mainly for the time slots and areas where demand of the grid is not enough to use all of the supply. If your grid does not exist yet or the power line capacity is not enough to transport all the renewable energy, it will be very useful to be able to store the energy. And it does not matter much how high the cost is, because the alternative is always to just throw away the electricity.

I also disagree with the idea that hydrogen will not help solving the climate emergency. It won’t be able to do so alone, of course. All green hydrogen will always need renewable capacity built.

But it may very well be an important piece of the puzzle.

If this hydrogen strategy is as successful as the 2000 Law on Priority for Renewable Energy, Germany will have scored the second decisive goal in this match against the climate emergency.

I for one hope that happens as one part of the European Green Deal.

German Hydrogen Strategy

According to this Handelsblatt article by Klaus Stratman, the German Cabinet will approve the Hydrogen Strategy that has been discussed for some time now tomorrow.

I have been writing lots of posts about hydrogen on this blog over the years. So I welcome the fact that Germany will put some effort in getting green hydrogen to scale.

Green hydrogen is of course hydrogen made from electricity that is generated from renewable sources. Once you have massive amounts of that, you can forget about the problem of having not enough electricity on a windless winter night. You can also displace fossil fuel from industrial processes like making steel.

There are lots of ideas floating around. Most of them seem to try again to make the auction model work that has failed so clearly in the renewable energy sector.

But anyway, there will be some substantial money flowing into this direction. The article mentions 7 billion Euro for hydrogen in Germany and another 2 billion for “international partnerships”.

I wonder if the latter might include some cooperation with Japan. Japan is also interested in solutions to the climate emergency. Japan also has some interest in hydrogen. Japan is also spending massively to restart the economy after the Corona crisis.

One interesting thing about hydrogen is that you can ship it around the globe. While there are no power lines connecting Japan and Germany, you could easily ship hydrogen in either direction over that distance.

So if you meet in the middle, say in the Mongolian desert, start some massive wind energy investments and start splitting some water, you could ship the resulting hydrogen to both Germany and Japan from there, even without any power lines available yet.

Anyway, it will be interesting to see what gets actually adopted tomorrow.