Princeton University
Undergraduate Task Force on
Energy for Sustainable Development
Generation, Efficiency, Development,
and Implementation
Commission on Sustainable Development
United Nations
May 12, 2006
About the Task Force
o Composed of nine undergraduate students of public policy
at Princeton University
o Directed by Prof. Denise Mauzerall
o Consisted of one semester of research and collaboration
o Informed by individual research and presentations from
outside experts
o Focused on the generation, efficiency, development, and
implementation of energy services in India, China, and the
U.S.
Global Energy Consumption
Total Carbon Emissions from
Energy Consumption, 1880-2002
7000000
Thousand metric tons carbon
6000000
Global
United States
China
India
5000000
4000000
3000000
2000000
1000000
0
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
Year
Figure created from data available at http://cdiac.ornl.gov/ftp/trends/emissions
2010
Per Capita Carbon Emissions
(1950-2002)
6
Metric Tons Carbon
5
4
USA
Global
China
India
3
2
1
0
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Year
Figure created from data available at http://cdiac.ornl.gov/ftp/trends/emissions
Objectives of the Task Force
o Address the question, how can access to
increased sources of sustainable energy be
achieved?
o Consider the need to balance increased
energy services with environmental
concerns, specifically climate change and
air quality
Structure of the Presentation
Generation
Development
– Clean Coal
– Wind Power
Efficiency
– Green Building
– Improving Vehicle
Fuel Efficiency
– Public Transportation
– Slum Electrification
– Energy Services for
Rural Areas
Implementation
– Mandated Market
Systems
– Financing Renewable
Energy
Questions and Comments
STRENGTHENING HEALTH, SECURITY, AND
ENVIRONMENT
Towards a Sustainable Coal-based
Development Strategy for China
Coal
Oil
Gas
Uranium
W. Ulysses Fowler
Coal Power Plant Growth Leads to Carbon Lock-in
Natural
Current Status and Growth
Gas
Coal
China
World
Natural
o Abundant reserves
24%
70%
Gas
Coal
o Electricity demand
3%
26%
rising at 15%
o Electricity generation 77%
Oil
Nuclear
NonHydro
39%
dependent on coal
Hydro
8%
Hydro
Oil Nuclear
2%
2%
RE
o China responsible for 75% of
24%
1%
1%
current global coal growth
Annual Carbon Emissions in 2025 from New
o Coal electricity generation
Chinese Coal Power Plants Exceed Proposed
capacity projected to triple by
McCain-Lieberman CSA Reductions
2020
MMTCe,
o If installed, this new capacity
682.3
will lock-in enormous carbon
emissions, due to long lifetimes
MMTCe,
of power plants and infeasibility
851.5
of retrofits
Coal modernization required now to avoid carbon lock-in.
Coal Gasification to Avoid Carbon Lock-in
What is it?
o Process that converts any
hydrocarbon into a synthesis
gas composed of hydrogen and
carbon monoxide
Allows production of:
o Electricity
o Liquid fuels
o Petrochemicals
Provides a pathway to:
o Reducing air pollution
o Enhancing energy security by
providing alternative to foreign
oil and natural gas imports
o Potential lower-cost route to
reductions in carbon emissions
Barriers to Coal Gasification
(1) Environmental Policy
o Environmental regulations are poorly enforced and not tough enough to justify
investment in clean technology
(2) Institutional Capabilities
o The innovation system is weak and fragmented
(3) Intellectual Property Rights Protection
o Intellectual property rights protection for coal gasification technology is poor,
hindering acquisition and diffusion of the technology
(4) Investment and Trade Rules
o Ownership restrictions and complex approval processes for foreign investments
restrict access to Chinese market for advanced coal technologies
(5) Finance and Economics
o Coal gasification relies on expensive imported technology that is unfamiliar to the
energy sector and not affordable without strong financial incentives
Policy Recommendations
(1) Environmental Policy
o Enforce existing environmental regulations to reward clean technologies.
o Require installation of monitoring equipment to enable enforcement
(2) Institutional Capabilities
o Reform the innovation process to allow coordinated research, development,
demonstration, and commercialization of gasification technologies
(3) Intellectual Property Rights Protection
o Strengthen intellectual property rights protection for advanced coal technologies
(4) Investment and Trade Rules
o Streamline the approval process for large gasification-related foreign investments
o Define priority channels for technology transfer, favoring technology acquisition
through foreign direct investment (FDI) and licensing over simple equipment import
(5) Finance and Economics
o Encourage gasification-based electricity generation demonstration projects with loan
guarantees, capital subsidies, and grants
Wind Power: A Clean and Renewable
Supplement to the World’s Supply of
Energy
Michael Treadow
How Much Will Wind Help?
 The answer to this question depends on several
factors:
1) Pace of technological advancement in wind
industry
2) Ability of wind-generated electricity to compete
cost-wise with traditional energy sources
3) Extent of support wind industry receives from
governments and policymakers via legal, financial
and environmental channels
 Though wind currently generates less than 1% of
the global electricity demand, new installations are
increasing worldwide wind capacity at a rate of 3040% per year
Key Points on U.S. Wind Power
• Currently ranks 3rd in the world in terms of installed wind
capacity at 9.149 GW
• Financing is vital for wind industry’s growth, but many in
U.S. still regard wind power as a novel and risky
endeavor
• Part of this perception stems from on-again/off-again
nature of federal production tax credit (1.5-1.8 cents per
kilowatt-hr)
• Remoteness of wind in U.S. poses a hurdle to its ability to
compete cost-wise with established energy sources; it
makes transmitting wind-generated electricity more
expensive
• There is an enormous potential for U.S. wind power in the
offshore setting which is estimated at over 1000 GW
Key Points on Chinese Wind Power
• Ranks 8th in the world in terms of installed wind
capacity at 1.260 GW but had laid out ambitions plans
for expansion of its wind industry: 4 GW by 2010, 20
GW by 2020
• Currently generates over 70% of its energy from coal
• Overly reliant on imported equipment for wind
industry and thus sees higher costs for wind-generated
electricity
• Antiquated grid system in China incapable of
automatically rerouting power to match supply and
demand
• Control over wind energy policy decisions is not vested
in a single government agency which can give rise to
bureaucratic delays in implementing reforms
Policy Recommendations
United States
1) Ensure fair grid access rules
regarding electricity
transmission system
2) Promote partnerships
between wind industry and
offshore oil/gas sectors to
expand offshore capacity
3) Expand Renewables
Portfolio Standard to all 50
states and stabilize Federal
Production Tax Credit
China
1) Renovate aging grid
system to enable wind to be
integrated efficiently
2) Drive down wind power’s
cost through tax incentives
and policy measures which
promote renewable sources
3) Encourage homegrown
wind industry
Reducing Climate Change through
Green Building
Andrew Turco
Picture: Energy Star, 2006
Current Consumption and Future
Strategies
o Buildings = 39% of energy use in the US
(Energy Information Administration, 2004)
o Long lifetime / lasting influence
o Peak electric loads: lighting and cooling (Tester et al., 2005)
o Heating/Cooling & Lighting = 2 largest energy uses in
buildings (Energy Star, 2006)
o
o
o
o
Make buildings more efficient
Internalize energy costs
Push-pull policies to reduce energy use
Factor in life cycle
Technologies and Approaches
o Energy Star certified equipment: 30% energy
savings
o Better windows, insulation, site orientation
o Geothermal heat pumps
- Can reduce energy consumption by 63%-72%
- Available everywhere
- High Initial Investment but payback: 5-10 yrs
(US Department of Energy, 2005)
Advantages & Policy Models
Advantages:
• Reduced operating costs – payback on higher investments is
quick
• Reduced need for new power plants
• Increased property values
(David, 2006)
Policy Models:
• US Green Building Council / Leadership in Energy and
Environmental Design (LEED) / Energy Star
• NYC LEED certification requirements
• Grants, rebates, & tax credits for sustainable energy
infrastructure
• Fannie Mae and Freddie Mac mortgages
Policy Recommendations
1) Implement a carbon tax, paid by consumers, on electricity
purchased from non-renewable sources
2) Provide larger subsidies for the initial investment in geothermal
heat systems, with funding from the “dirty electricity tax”
3) Partner with programs such as Fannie Mae and Freddie Mac in
devising a mortgage program targeted at energy efficient homes
4) Incorporate estimated life-cycle energy operating costs on labels
of all energy consuming equipment
5) Mandate a renewable energy component for a portion of the
energy used in buildings over a certain size
6) Through Type II partnerships, provide the framework for
business alliances that seek to reduce their carbon footprints
Raising Automobile Fuel Efficiency:
Policy Recommendations
Ben Steiner
Convergence of Rationale for Higher Standards
1.
Climate Change


2.
3.
4.
Transportation responsible for 33%
of US CO2 emissions and 23% of
emissions worldwide
Developing world demanding more
personal automobiles
Energy Security


US oil imports at new high
Hubbert’s Peak
Environmental Effects

Air pollution major problem in
India and China
Feasibility


Shorter lifecycle than other fossil
fuel burning infrastructure
Bipartisan political support
Current Situation in US:
CAFE Standards
•
•
History


Rules



•
Established in midst of Arab Oil Embargo
in 1975
Standards stagnant since mid-1980s
Separate standards for light truck and
passenger car fleets
Light trucks to be split into 5 “footprint”
groupings in 2009
Current regulations: 27.5 mpg for cars,
22.5 mpg for light trucks
Opportunity

Great chance to improve fuel efficiency
while rectifying market failure
•
•
Current Situation in China:
New Fuel Efficiency Standards
History

Rules



•
China set fuel efficiency standards in
2004, above US but below EU and
Japanese levels
Separate standards for 16 vehicle
weight classes
Each model meets standard
Current regulations: between 19 and 38
mpg by 2005, and between 21 and 43
mpg by 2008
Opportunity


Chinese car market to be largest in
world by 2020
China will set global standard for fuel
efficiency
Policy Recommendations
1.
Raise and reform CAFE standards and suggest improvements in
Chinese standards




2.
Follow McCain-Kerry plan to raise standards 40% by 2015
Create one fuel efficiency standard for entire vehicle fleet
Make credits tradable
Most politically feasible option
Increase gas tax to $1.20 a gallon in US and suggest higher gas tax
rates in China


Eliminates “rebound effect” of 1 extra mile driven for every 5 mpg
improvement in fuel efficiency
Economically cheapest solution, but least politically feasible
3. Implement feebate system that subsidizes high efficiency vehicles
with fees collected on low efficiency vehicles



Eliminates market failure by bringing total lifecycle costs to foremarket
Program is revenue neutral if pivot point is set properly
Provides constant incentive to improve fuel efficiency
Promoting Public Transportation for
Sustainable Development
Nikki Laffel
The Problem
• Personal vehicle use is increasing  increasing emissions
• Vehicle emissions have two negative effects
– Global climate change
– Air pollution
• United States
– World leader in carbon emissions
• China
– World’s second leader in carbon emissions
– Projected to become top emitter by 2020
• India
– Current carbon emissions are low
– National population growth rate exceeds global rate which
means increasing global share of emissions
Existing Public Transportation
o General trends: road based and rail based transit
– Some public transit systems exist, other locations lack
– Private vehicle use
• more convenient/appealing due to independence/flexibility
• Increase with increasing wealth
o United States
– In 2000: 88% use private vehicles for commuting
– New York, Chicago, Atlanta: good public transportation systems
o China
– Guangzhou: 18 % use public transportation
– Shanghai: impressive magnetic-levitation rail link
o India
– Delhi: 34% use public transportation (effective bus transit)
– Mumbai: 86% commuter trips by bus system and suburban rail
– Calcutta: impressive 17 km metro
The Problem (continued)
o Public transportation systems are not ubiquitous in nature
o Current systems cannot meet increasing commuter demand
o % annual change in per capita vehicle ownership 1990-2020
– US: 0.1%
- China and India: 7.5%
1999
2005
2010
2015
2020
20
15
20
1998
20
1990
10
0
20
100
05
200
20
300
99
400
19
500
98
600
60
50
40
30
20
10
0
19
700
90
800
China and India Per Capita Vehicle
Ownership
19
Vehicles/1000 population
Vehicles/1000 Population
900
US Per Capita Vehicle Ownership
Policy Recommendations
• Allocate more money to build new subway and bus systems and
expand or improve old systems
• Encourage citizens to use public transportation systems
– subsidize mass transit fees for employees
– reward carpooling
– educate citizens to dismantle negative stigmas of public
transportation
• Discourage citizens from using personal vehicles for travel
– increase the price of personal vehicle travel
– reduce the number of vehicles allowed in urban areas
• Change urban plans and city designs
– build more walking and biking paths and bike racks
– build cities to link resident zones to business zones
Clean Distributed Generation for
Slum Electrification:
The Case of Mumbai
David A. Schaengold
Current Situation
o
o
o
Electrification is important: Better worker
productivity, increasing wealth, air quality, and
empowering
Unsafe, expensive electricity widely available,
due to theft from power lines
Three kinds of barriers to traditional electricity
service in poor urban areas:
1.
Sociological: unfamiliarity with traditional payment
methods, anti-slum sentiments
2. Infrastructural barriers: poor access for vehicles, no
legal rights or existence, no property rights
3. Economic barriers: extreme poverty, not costeffective for most utility companies
Distributed Generation (DG) is a
possible solution
o Can be a small investment, compared to
expanding traditional service
o Flexible - parts reusable
o Low transmission costs, and hard to steal
o Empowering for residents - DG can allow
slum-dwellers to control their own power
sources
Renewable DG best option
(solar and wind, specifically)
o Photovoltaic (PV) and Wind have no fuel costs
– reduces recurring expenses
– no need for fuel distribution network, which would be
difficult in slums
o Adverse health effects of non-renewable DG, such
as diesel generators
o Climate conditions in Mumbai ideally suited for
wind and PV
o If necessary, can be combined with diesel generator
for increased reliability (useful for refrigeration)
Financing & Implementation
o Micro-credit to local actors through existing banks or new subbank of Indian Renewable Energy Development Agency
(IREDA)
o Allow for entrepreneurship (eg if one slum-dweller can pay,
allow him/her to establish generators and charge others)
o Utility companies can be a source of capital for loans, since they
have a financial incentive
o Variety of non-traditional payment options (for instance,
upfront)
o Gender-conscious — women have most to gain from
electrification, and are traditionally more reliable investors
o Community-focused
Off-grid Energy in Rural India
Antonio I. Lacayo
Rural Energy
Electric Connectivity in Rural Areas
o World: 1.6 billion, 1.3 in rural areas (80%)
o India: 580 million, 400 in rural areas
– Too expensive, poor people, difficult terrain.
Dependence on traditional biomass
o 2.4 billion people worldwide
– Negative effects: time spent finding fuel, wood, indoor air
pollution, other hazards, environmental degradation
– Energy for development: wellbeing, education, health,
income.
– Energy ladder: biomass is free, use of electricity selectively,
moving up is dependent on three factors.
Government of India’s Goals
o Government of India’s Goals
– Extend electricity grid to every village by 2008 and every household
by 2012 (Rural Electricity Act 2003).
• Necessary yearly investments: $ 15 billion.
• Current energy investments: $ 350 million.
– Over-ambitious, too expensive.
– No coordination between institutions (3 ministries).
– Does not attend end-uses, just focuses on access.
o Off-grid Alternatives Focusing on End-use
• Efficient wood fueled cookers, solar thermal cookers.
• Biogas digesters for fuel, wind power for water pumping, photovoltaic
panels for stand-alone systems.
• Small hydropower and biomass gasifiers for electricity micro-grids.
Policy Recommendations
o Renewable Energy Technologies (RETs)
– Offer a variety of direct-end uses, lower costs for transmission
and distribution, environmentally friendly, and low operating
costs.
1. Focus on micro-credit to overcome high capital costs.
2. Provide consultancy to families.
o Targeting Women’s Energy Needs
– Women suffer the most from energy scarcity, provide higher
benefits to the household, and 70% of the world poor are
women.
1. Focus to women’s energy needs, like cooking and water.
2. Provide financing for women’s businesses, like baking and
pottery.
Policy Recommendations
o Capacity Building and using Local Resources
– Allow community members to operate, maintain and repair
energy technologies to foster self sufficiency and overcome
cultural barriers.
1. Form partnerships with community members for energy
provision.
2. Include capacity building on all projects.
o Energy through micro-enterprise
– Use energy as a means to increase income and reduce reliance
on subsidies and hand-outs.
1. Provide financing for energy-dependent businesses and
energy service providers.
2. Promote the creation of micro-enterprise zones.
Building Markets
for Renewable Energy in China
Renewable Portfolio Standards, Feed-In Tariffs, and Tendering
Sabina Sequeira
AP Multimedia Archive
China’s Capacity for Renewables
Wind
Solar Photovoltaic
•253 GW onshore capacity, 1000
GW offshore
•Majority of materials imported
•Has 1.2GW; 20GW planned by
2020
• 2,000 hours of sunlight/year , 170
Btce annual solar insolation
•Vibrant PV manufacturing industry:
85% exported
•In 2003, had 50MW
Barriers to RE Growth
http://www.agu.org/journals/jd
/jd0512/2004JD005462/
•High initial costs for
developers
•Nascent industries: investor
http://grid2.cr.usgs.gov/ms_dem
uncertainty
o2/swera/china/template.html
•High market prices:
79cents/KWh wind,
42cents/KWh solar PV
•Supply/demand alignment
 Policy: engage private sector, expand development
Mandated Market Share Policies
• Renewable Portfolio Standards
- Gradually increasing purchase obligation for
electric utilities, Tiers, credit multipliers, credit
trading system
 Competition, innovation drive down price
• Feed-in Tariffs
- Fixed cost of RE (subsidized), Optional
purchase
 Set price lessens investor uncertainty
• Tendering
- Competitive bidding process
 Economies of scale, competition,
promote lower prices
Wiser et al, 2004
Key Considerations
- Market development stage of
technology, presence of
competition
- Costs, Market distortions
- Efficiency, results
Renewable Energy Policy in China
• Goal-setting: Five-Year plans and growing energy concerns
• Tenth Five-Year Plan and 2005 Renewable Energy Law: First
target set: 15% RE by 2020
• Many organizations, lack of coordination
- Agencies, programs, province, local, and village governments
- Currently under National Reform and Development Commission,
National Energy Leading Group
• Still, lack of concrete implementation processes
• Steps toward MMS: Wind Resource Concession Program,
province-level feed-in tariffs, considering national feed-in
tariff or RPS
Recommendations
• Policy Design
- Carefully Consider renewable energy capacity and market conditions
- RPS in urban areas, feed-in tariffs for rural, tendering for high capacity rural
sites, separate purchase obligations for solar PV and wind
• Transparency and Coordination
- Create a department of energy, require monthly energy reports from provinces
- Compliance incentives for provinces
• Supply and Demand
- Nationwide credit trading: allow urban electric utilities to purchase rural credits
- Restructure transmission system, develop with R&D
• Costs
- Spread costs of across all energy consumers: fund initiatives through electricity
surcharge, public benefits fund, reductions of fossil fuel subsidies
- China pledged to spend $1.84 Billion by 2020 on renewable energy, can be used
on MMS policies to promote rapid private sector expansion of renewable energy
Financing Renewable Energy
Karis Anne Gong
The Export-Import Bank of the
United States
o An independent agency of the United States,
chartered by the U.S. Congress
o An export-credit agency, a “financial institution
whose purpose is to promote the exports of their
respective countries by providing loans, guarantees,
insurance, technical assistance, and more with the
backing or approval of the national government”
– ECAs directly finance 1/8 dollars of world trade
(Gianturco)
o The Export-Import Bank of the U.S. (ExIm Bank)
finances $10-13 billion of U.S. exports per year
Ex-Im Bank Energy Financing
o 98% of energy financing (~ $1-3 billion/year) is authorized
for the export of fossil-fuel based energy projects,
including generation and extraction
o Climate Change contribution: by 2012, the Bank’s power
project will contribute to at least 450 million tonnes of
CO2 emissions annually; this is on par with Mexico and
Canada. In addition, its extraction projects financed from
1989-1999 in their lifetimes will generate about 14.1
billion tonnes of CO2 emissions. (ExIm Bank)
Policy Recommendations
• Partnerships between the ExIm Bank and private
banks should be established to support sustainable
energy technologies in developing countries
• These partnerships should be accompanied by
reduced subsidies for fossil-fuel based
technologies
• Financing programs should be designed to support
renewable energy technologies
Overall Recommendations
Energy Generation
o Promote advanced technology to decarbonize fossil fuels
o Increase the proportion of energy generated from renewable
sources
o Internalize all costs associated with energy generation
Energy Efficiency
o
o
o
o
Internalize the costs of energy inefficiency
Promote green building, from construction to operation
Reform and raise fuel efficiency standards
Improve public transportation services
Overall Recommendations
Development
o Finance renewable technologies that facilitate electricity
generation and cooking fuels close to end-users in slums and rural
areas.
o Focus on women and capacity-building projects for community
empowerment.
o Use micro-credit to support local entrepreneurs who could either
benefit from energy access or supply their communities with
energy services.
Implementation
o Implement market systems where appropriate administrative
infrastructure exists
o Use existing public finance institutions to provide incentives for
renewable energy exports
for an online version of this presentation and copies of
complete student reports please see:
http://www.wws.princeton.edu/mauzerall/dlm_teaching
.htm/WWS402d_reports_S2006