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The economics of power plant construction

A brief primer on variable vs. fixed costs

For those of us in the power industry, media discussions of the economics of power generation reveal an almost complete misunderstanding of how power is priced. Depending on our vested interests, we may find this either frustrating or beneficial -- but in all cases, it's false. Herewith I attempt to explain from whence the confusion arises -- and why it is so critical for the clean energy community to understand this math and its consequences ... and to more accurately articulate the economics of those options we prefer. Costs, prices, and pro-formas The cost of power, the price of power, …


Nice gigawatt if you can get it

Low-carbon energy solutions in India may depend on Tata

Amid analysis of the G8's latest climate pronouncement, the announcement of India's first national climate action plan received less attention than it otherwise might have. Even in the Indian media, the plan was also overshadowed by the release of a McKinsey & Co. report that projects massive power demand growth in the country -- 100 gigawatts more demand in the next 10 years than previously estimated. Yet the very same day, the government's Investment Commission called the "Ultra-Mega" coal plants that are central to India's strategy to meet that demand a "main reason for persistent capacity shortfalls." As reported by …


Aviation industry is into greening, to an extent

The aviation industry talked up greenness Wednesday at the world's biggest air show in Farnborough, England. At a sustainability summit, Giovanni Bisignani of the International Air Transport Association called climate change an "emergency situation" and said airlines are the best suited to address it: "No other industry is as responsible, united, and ambitious." Indeed, the industry is gung-ho about designing more fuel-efficient aircraft; the Airbus A380 and Boeing 787, both coming down the pike, are being touted as the most fuel-efficient airplanes yet. But Big Air remains unenthusiastic about a European Union plan to include airlines in its emissions-trading scheme, …


Wal-Mart, mining companies team up to trace path of jewelry supply chain

Retail giant Wal-Mart is joining with Conservation International as well as mining companies Rio Tinto and Newmont Mining to launch a pilot project that lets customers trace the path of their jewelry from mine to mega-store. Marketed as Wal-Mart's "Love, Earth" brand jewelry, the items stand out from others in that once they're purchased, customers can go to the Love, Earth website, plug in the tag number from their jewelry item and see what mine it came out of and the path it traveled from refiner to manufacturer to retailer. Wal-Mart has been marketing Love, Earth items as more eco-friendly, …


New business coalition wants cheaper energy, stat

A group of businesses has kicked off a new campaign with the goal of making energy cheaper by whatever means possible. The new Coalition for Affordable American Energy -- not to be confused with, ahem, the existing Coalition for Clean Affordable Energy or Coalition for Affordable and Reliable Energy -- is backed by various business associations, including the Business Roundtable, National Association of Manufacturers, and U.S. Chamber of Commerce. "It is not our intention to enter the debate on specific policies at the 'micro' level in great detail," said a letter sent to business associations last week. But the group …


Some school fundraisers start hawking greener products

Some school and nonprofit fundraisers recently have turned to greener options to generate needed cash. Instead of sending youngsters out into the community to hawk items of questionable greenness like candy, magazines, and virgin-forest wrapping paper, some schools have instead turned to greener wares such as fair-trade coffee, metal water bottles, hand-made soaps, and recycled-content wrapping paper. The trend is not just about having kids sell items their parents might actually want to buy (though that's part of it), it's also aimed at avoiding contradictory messages to impressionable minds. "We're telling the kids about obesity and selling cookie dough," said …


Nuke-power company Exelon announces big emissions cuts by 2020

Nuclear-power company Exelon today launched a program it says will reduce greenhouse-gas emissions by over 16 million tons a year by 2020 -- more than the company's current total annual emissions. The company's plan calls for buying renewable-energy credits to offset some of its emissions, generating a small amount of electricity from alternative sources such as landfill gas, wood, or crop waste, and complying with recently passed legislation in Illinois requiring the company to help customers reduce their electricity consumption through smart-metering and other measures. The company's largest emissions reductions would come from making some of its natural-gas-burning power plants …


Rental-car companies struggling to meet demand for smaller cars

Consumer demand for smaller cars is putting car-rental companies in a bit of a bind. Until recently, American automakers were glad to unload overstock to Hertz, Avis, and Thrifty at a discount, then guarantee a price to buy the cars back used. But with demand for hulking American cars dropping, Detroit has cut back production and is finding the arrangement with Big Rental less to its liking. Car-rental companies are now paying as much as 40 percent more for cars, and finding it more difficult to unload the used ones. And rental lots full o' SUVs aren't meeting customers' needs: …


Big Oil CEOs are drinking our milkshake

Paychecks growing fatter for Big Oil execs

Everyone is acutely aware that the price of oil is surging and gas prices break a new record almost daily. Less well-reported -- yet completely unsurprising -- is that the paychecks of Big Oil CEOs are also reaching new heights, according to a report by Equilar, as reported by MSN Money. Median S&P 500 CEO compensation: $9.9 million. Big Oil CEO pay range: $15-$21.7 million (!) Rex Tillerson, CEO of ExxonMobil, raked in an astonishing $21.7 million and is sitting on nearly $78 million of unvested stock options. (Though this is chump change compared to the obscene $500 million golden …


As the ground shifts under their feet, food giants experiment with new strategies

When you smile, the food world smiles with you ... maybe. Photo: Original by heatkernel For more than a generation, the major corporations that process and sell the vast bulk of our food have had it pretty easy. They've had access to cheap energy to ship food over globe-spanning distances and run giant food-processing plants; reveled in cheap inputs like corn and soy, transforming them into everything from breakfast cereal to chicken nuggets; and relied on low-paid, abundant, and politically disenfranchised workers to do the dirty jobs. Together, these elements formed a kind of tripod propping up the industry's enormous …