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The Forum > Article Comments > The cost of a green economy > Comments

The cost of a green economy : Comments

By Arthur Thomas, published 17/2/2010

Developed countries have benefited from China's cheap solar panels and insulation but at what cost to the environment?

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I think we have to seriously question whether Australia's dependence on China makes us vulnerable in the long run. Politicians seem inordinately pleased with coal and LNG export deals to China but that CO2 further imperils the Murray Darling and the Great Barrier Reef. One day there will be holes in the ground where rich mineral deposits used to be. Perhaps we can fill the holes with the discarded cheap junk we bought with the proceeds. Future generations will have to solve this problem with no help from us.

Some analysts believe China's southern cities will run short of coal by 2015. Australia will not be able to supply enough in spite of recently announced deals. There is also the glaring inconsistency that Australians will have to pay CPRS carbon charges on coal at home but the Chinese get to burn Australian coal with impunity. For a few lousy bucks in export income we greatly increase global pollution, diminish our resource base for future generations and amuse ourselves with cheap nick knacks.
Posted by Taswegian, Wednesday, 17 February 2010 9:03:47 AM
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An interesting article, Arthur- for the number of important issues that it raises. It's a pity that your frequent use of (negative) hyperbole isn't backed by any numbers or analysis or meaningful references.

I used to spend a lot of time debating economic multipliers with Treasury officials. It's surprising, seeing it is the key issue all politicians fret about, that clearer analyses of job multipliers aren't available. There is no reason to believe that green jobs cost more to create than any other job that has a similar mix of capital and labour. The key issues with job creation and multipliers are 1) the leakage of money out of the economy- ie to imports that aren't matched by export. Solar panels are a bit of a worry for us, as about two-thirds of the cost is from imported goods. I don't know how much of a gas-fired power station would be made in Australia, but I suspect not much more. 2) The return on investment- in the case of energy producers it is the energy return(EROI) that is important. At this stage, PVs arent as good as coal or gas, but there are many predictions (see www.eere.energy.gov/solar/solar_america/ for example) that PV prices will match gas by 2015- and that comes off long term trends, not short-term aberrations.

Like all other innovations, solar has to go through the "valley of death" of early high-cost demonstrations. After all, it is still at less than 5% of most country's electricity. Given that, it is interesting to note that Obama had to give a loan guarantee of $10 billion to restart the US nuclear manufacturing industry. Has anyone done an employment multiplier analysis on that?
Posted by Jedimaster, Wednesday, 17 February 2010 2:01:44 PM
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Very interesting and informative article. I share much of your sentiment.
Posted by Chris Lewis, Wednesday, 17 February 2010 6:52:12 PM
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Informative article Arthur however, I would like to have seen either some conclusions and recommendations or at least a process by which readers could draw their own. Given that many of the issues to which you refer are hot topics, we really do need to cut through to action.
Kepner and Tregoe offer one such analytical and decision making process and I’ve used this to try to give context to your copious information.
As I see it the “Situation” is this; the world (developed, developing and undeveloped) needs to secure sustainable, scalable and affordable energy. These need to be achieved in such a way that there is no further damage to our environment and that available resources are not depleted before they are replaced.
The “problems” are that whilst we have the engineering skills to evaluate and implement a raft of possible alternative and transitional technologies, the world has gone in “analysis paralysis” due to vested interests pulling policy and debate in opposite directions and proposing a confusing range of non-validated and often emotive solutions.
The “decision analysis” examines options. For example, what are the potential technologies, when will they be available, how long will they be available for, what can each contribute in percentage terms and what are the true “amortized” costs of each and by direct comparison with each other?
The first three stages are inputs to the next logical step which is “potential problem or opportunity analysis”. Risks, cost benefits, implementation timeframes, validation against goals (situation), competitors (such as China) and opportunities (such as green jobs, industrial and economic advantages) and finally, planning and action. This is where the content of your article steps in, right at the end of the process.
We have masses of information available; articles like yours and the internet ensure that we are more informed now than ever before. The problem is that “information” is not something we can execute or implement, that takes knowledge
Cont’d
Posted by spindoc, Thursday, 18 February 2010 12:01:19 PM
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Cont’d
Some good work has been done in Europe (See www.withouthotair.com.) on what the maximum, practicable contribution might eventually be from all possible alternative energy sources, which for the UK is 20.7%. Australia might be able to improve on this and generate more green jobs as a bonus.
The problem is that we just don’t know because our government has so far not addressed the first three vital stages, and therefore cannot produce the risk/cost benefit analysis or a viable plan.
If we had, in the public domain, all the required information related to every possible green energy option, we would be able to determine the precise mix of alternative energy available, which best suits Australia, how much each would contribute, how much each would cost, when each could be made available, what jobs would be created, how we might gain competitive advantage against key competitors. More important than anything else, this would give us the basis for a plan that will break the nexus of indecision and confusion by enabling actions to be put in place.
At the moment we are in “information overload”, this is confusing, divisive and emotive. Each vested interest has either political, economic, emotive preferences or objections to the wide range of available technologies. It serves no purpose to prefer for instance, “clean coal”, when we need to be informed as to when it will be invented, available, its contribution and at what cost? It seems to me, at this stage, that “clean coal” is a contradiction in terms?
If we want industry and commerce to invest and compete in such technologies, they will need not only all the data suggested so that they can plan, they will also need policy certainty before they risk stakeholder interests.
Or we can keep using public money to chase populist tokenism until it’s too late or the money runs out
Posted by spindoc, Thursday, 18 February 2010 12:02:33 PM
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Jedimaster
The word limit on articles and the number of references are inhibiting factors.

Another is my hope the articles will motivate contributors to utilize their own resources and initiative to check the claims and broaden their knowledge of the matter at hand in so doing.

With your background in analysis, you will be fully aware that most results are rarely based on assumptions from single sources such as media or government statements, books etc (reference). Sound analysis however is usually the result of due diligence in sourcing and assessing reliability and relevance of multiple inputs that when combined produce a realistic end result. Referencing that alone would turn articles into reference libraries.

There is always a case for return on investment, but that has to be balanced against the national interest in addressing the loss of jobs, skills and downstream benefits due to off-shore manufacturing to increase corporate bottom lines.

Australia is a resource export reliant economy and the need to offset imports with more exports plays a critical role in future planning and balance of payments.

The problem with off-shoring potential strategic industries from a country of only 22 million, is that the anticipated green jobs will increasingly relate to installation and maintenance rather than increasing the multiplier of research and development.

Multiplier analysis is a very useful tool, but only when all potential inputs are addressed and assessed. Omissions lead to erroneous results.

While you refer to PVs, have you been following progress and projected solar energy pricing of the Desertec Industrial Initiative and involvement of the MENA countries?

A
Posted by Arthur T, Thursday, 18 February 2010 1:40:45 PM
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Arthur
One of the best articles yet and comments are thought provoking.
I would like to see more from you soon.

Very thought provoking.
Posted by examinator, Thursday, 18 February 2010 3:23:33 PM
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Arthur: an incomplete list of your hyperboles includes:"trumpeted", "rash","massive", "devastating","massive", "blatantly","large","immense","vast arrays","vast areas","horrific", "primitive", "mammoth". etc.

While OLO is not the medium for fully referenced, peer reviewed articles, some references or comparative data would give credibility to your assertions. You provide none, in what appears to be a conflation of several themes- the limitations of renewable energy, Chinese manufacturing prowess and Chinese OH&S. There is plenty of evidence to indicate that there is some substance to these issues, but adjectives imply comparison: "Vast" compared with what? "Massive" compared with what? "Immense thirst" compared with what? There has been massive investment in China in everything from plasma TVs to fluffy toys- how do they compare? Nuclear power plants are problematic because of their cooling water demands- how do they compare? I could go on.

My last post refers to a graph showing historic cost reductions of PVs. The downward path has been going on for 30 years- long before China got into the game, with the exception of the past few years where costs stabilised because of demand bottlenecks and a shortage of refined silicon. Bottlenecks are clearing and the prices are now trending down on their old path. That's a common phenomenon.

If economists are to believed, then comparative and competitive advantage are sovereign. We are exporting ores and importing PV panels- as well as plasma TVs and fluffy toys. Our cheap iron ore is undoubtedly helping to make cheap towers for wind generators as well as nuclear power plant structures.

Jobs in renewable energy are no different from any other jobs- unless the PVs and wind generators are net energy producers. That will happen if they are made efficiently- ie Chines labour and Australian raw materials.

I am familiar with the Desertec Concept- The Economist had an article several years ago- this is why Germany and Japan have provided such heavy subsidies to renewables- to build up their manufacturing competence for "the big game". Australia is too far behind now to hope to compete with the big guys. The best we can do is import wisely and export competitively.
Posted by Jedimaster, Friday, 19 February 2010 8:59:10 AM
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I agree with Jedi about this article being pretty hard to take seriously. And I too would like some actual data instead of hyperbole.

And I suppose I should point out that photovoltaic solar panels do NOT consume water- at all- contradicting the rather generalized statements of solar panels needing huge amounts of water.
The only resources are in the initial creation of the device itself.

Seriously Arthur at least try to be subtle when implying that the only form of solar-electric generator is a steam turbine that uses heat from the sun instead of a nuclear energy generator.

And I don't really feel like commenting much on some of the other points about costing jobs (in an age where there is industry desire for a larger population to substantiate the workforce- as according to government reports)- or the "but you will mine for these materials doing environmental damage"- apparently only renewable energy generator materials (which do not need a constant supply of materials to generate their power) do damage to the environment around the mining sites.

All in all I'm baffled that so many people are impressed with this article- I'm not.
Posted by King Hazza, Friday, 19 February 2010 10:16:58 AM
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King Hazza
Power towers do use cooling water as do concentrating PV systems, and while closed or dry loops, where incorporated, do restrict cooling water demand, cost is often the limiting factor.

As for water demand for PVs. The ideal location for large-scale PV power generation is the areas of flat dry land with optimum solar conditions. These locations are also subject to windy conditions that deposit dust onto the collectors, reducing efficiency.

Water is crucial to maintain the efficiency of both concentrating and non-concentrating PV systems.

Mirrors and PV panels for power tower and PV systems require quality water for cleaning that leave no residues or smears on the surface that reduces generating efficiency.

While each collector may only use a few litres, these few litres become substantial when considering the area of collectors on major arrays.

BrightSource Energy's Ivanpah dry cooled system in California consumes 95,000 m3/yr of water primarily for mirror wash down.

Spain’s Abengoa Solar system, is a wet cooled system, half the size of Ivanpah, consumes 2.7M m3 a year for cooling and wash-down.

Germany's relatively small 5mW Leipzig plant incorporates 33,500 solar panels.

China is currently constructing PV arrays in the 100mW capacity range.

You may wish to research PV array projects rejected in the US for further information.

AT
Posted by Arthur T, Friday, 19 February 2010 12:09:18 PM
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Thankyou for the data- although I would like to point out that PVs can also be installed in any area and independently of traditional stand-alone power stations- including areas with less desert/grassland dust exposure and thus considerably lowering the need to clean off the panels- including suburbia and metropolitan.
The desert dust storms in Sydney illustrate the significant difference a location can make to the cleanliness of the outdoor equipment.
Posted by King Hazza, Saturday, 20 February 2010 9:54:39 AM
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Jedi master
the hyperbole aside the article does raise some point that need consideration. Let,s not "baby and bathwater" yet.

KH
Your point is noted but
Locating a PV in or near cities merely changes the type of pollution that inhibits the power collection. Having said that more research is clearly needed.
Posted by examinator, Saturday, 20 February 2010 2:20:03 PM
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Examinator- HARDLY.
The pollution in the cities (let alone the suburbs where most of the houses are) is hardly enough- nor of the actual concentration to frequently coat the panels of sun-blocking particles and render them unusable without frequent water rinses- practical experience of my own (feel free to judge it for what it's worth)

But nice try.
Posted by King Hazza, Saturday, 20 February 2010 3:50:23 PM
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Arthur, a number of points.
Regarding rare earths being used in magnets.
Where they are used in motors or generators that implies DC generation.
I suspect from what I have read elsewhere that wind generators are DC
and that choppers are used to get 50 cycle.
However if the rare earths are not available then AC alternators or
DC generators with wound fields could be used instead.
The same applies with cars and in any case AC motors in electric cars
are much better anyway.

The manufacture of PV systems for export to the rest of the world
will cease in the next few years as oil prices rise making container
shipping uneconomical and uncompetitive.
Chinese exports of steel and furniture has already moved back to the USA.

I have just finished reading Jeff Rubin's book;
"Your World is About to get a Whole Lot Smaller"
He is a Canadian economist.

The world is about to undergo a major shift in manufacturing and
everything else as fuel prices escalate.
Posted by Bazz, Monday, 22 February 2010 1:54:47 PM
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