cogeneration

Parsing Section 451 of the House stimulus package

Here are some thoughts on the American Recovery and Reinvestment Act recently unveiled by House leaders -- specifically, the appropriation of Section 451 (aka "Subtitle E") from the 2007 Energy Bill.

For obvious reasons, we've been following this bill very closely, which not only provides $10 per MWh to waste heat recovery and high-efficiency cogeneration projects, but it also provides a nice suite of carrots to induce the states to reform their paleolithic electricity regulatory laws. Often these laws have long been perhaps the biggest barrier to reducing the carbon footprint of U.S. electricity generation and distribution.

For less obvious reasons, it's hard to get programs like this through the Congress. This is the result of some peculiarities of the way the federal government makes decisions to spend money:

1. Tax bills require one vote to enact (OK, technically three, since they have to be approved by both houses and then signed by the President, but it is a single vote on a single decision throughout). All other fiscal bills require two votes: the first authorizes the funding, and the second appropriates the money through the budget process. Since no vote is certain, this makes it much easier for regulators to get things done by tinkering with tax policy than through any other measure. In no small part, this is why the tax code is so full of complexity, loopholes, and social-engineering run amok. But I digress.


2. Any appropriation process must be "scored." This is the process by which the Congressional Budget Office estimates the cost of the legislation to the Treasury for the purpose of figuring out whether we can afford it. That's quite reasonable, but the nature of the process is such that it tends to ignore most of the upside because it does not readily differentiate between good and bad investments. (It is as if you made a decision to buy a stock based on the price per share without any consideration of whether it was likely to rise or sink in the future.) This becomes especially problematic when the economy sours, as the stimulative effects of investments are not readily quantified or evaluated precisely at the time when they are most needed.

Frustrating as this may be, the good news is that the limitations are well-understood by those inside the Beltway. Setting aside what the scoring rules say, here is what Section 451 will actually do for the U.S. economy ... with lessons broadly applicable to investments in all flavors of enhanced resource efficiency.

End of year musings on coal and its competitors

Some thoughts as we get closer to a new energy policy. Our total U.S. electric grid has a peak capacity of just over 1,000 GW. (That’s 1 billion kilowatts or, if you prefer, enough to power 10 billion hundred-watt light bulbs.) Of that total, here’s what we’ve installed just since 1995: ~200 MW of solar […]

CNN on energy efficiency and waste-energy recycling

The coolest thing about this story? They called us. The word is getting out there!

A roundup of reports I ought to read but in reality have only skimmed

So many reports, so little time! Greenpeace: The True Cost of Coal It’s well-known that coal’s price is artificially low, since many of its costs — health maladies, climate change, polluted water, etc. — are externalized. But how much do those externalized costs add up to? This report delves into that subject in great detail. […]

Castens on TV

The Chicago NBC affiliate recently interviewed Tom Casten about waste heat recovery.  Granted, they chose the second-most attractive member of the Casten family for the eye-candy … but other than that, I think it’s a decent video.

How current GHG policy distorts capital allocation

As we think about how to price GHG emissions, it’s often (and accurately) cited that having a meaningful conversation about GHG pricing first requires that we remove all the existing subsidies so that we can stop irrationally allocating capital. Clearly, we can’t provide insurance liability waivers to nuclear and ratepayer guarantees to regulated utilities and […]

Solar PV + waste heat

Cool. The pursuit of usable waste heat is one of the great unheralded stories of the green shift.

Castens and Recycled Energy Development featured in Forbes magazine

Don’t miss this profile of Tom Casten and his company, Recycled Energy Development, in the latest issue of Forbes. (Of course Tom spawn and Gristmill contributor Sean gets off some zingers, but they’re about ethanol, so don’t read them! I know how you people get.) Recycled energy — otherwise known as cogeneration, or combined heat […]

Cleveland brewery attempts energy recyling yet is foiled by regulation

Last week Cleveland Scene wrote about a local brewery that is recovering its waste heat. They set out to convert the heat into electricity and useful steam for their brewery. In a great quote, the owner Patrick Conway says: “When our engineer explained this technology to us,” says Patrick, “it was like putting wheels on […]