Climate or rural development policy?

Being heavily energy dependent, it is not much of a surprise that Europe pays special attention to reducing the use of fossil fuels. Each one of the ten new member states is characterized by relatively low per capita energy consumption and relatively low energy efficiency, and the share of renewables in their energy mix tends to be low, too. The paper examines the problem when policy measures create a decrease in environmental capital instead of an increase. In this case it hardly seems justified to talk about environmental protection. The authors describe a case of a Hungarian rapeseed oil mill which would not be of too much interest on its own but given that almost all similar plants went bankrupt, there are some important lessons to learn from its survival. The enterprise the authors examined aimed at establishing a micro-regional network. They completed a brown-field development to establish a small plant on the premises of a former large agricultural cooperative. By partnering with the former employees and suppliers of the sometime cooperative, they enjoyed some benefits which all the other green-field businesses focusing on fuel production could not. The project improved food security, energy security and population retention as well

Mitigation Strategies and Costs of Climate Protection: The effects of ETC in the hybrid Model MIND

MIND is a hybrid model incorporating several energy related sectors in an endogenous growth model of the world economy. This model structure allows a better understanding of the linkages between the energy sectors and the macro-economic environment. We perform a sensitivity analysis and parameter studies to improve the understanding of the economic mechanisms underlying opportunity costs and the optimal mix of mitigation options. Parameters representing technological change that permeates the entire economy have a strong impact on both the opportunity costs of climate protection and on the optimal mitigation strategies, e.g. parameters in the macro-economic environment and in the extraction sector. Sector-specific energy technology parameters change the portfolio of mitigation options but have only modest effects on opportunity costs, e.g. learning rate of the renewable energy technologies. We conclude that feedback loops between the macro-economy and the energy sectors are crucial for the determination of opportunity costs and mitigation strategies.Endogenous technological change, Climate change mitigation costs, Integrated assessment, Growth model, Energy sector, Integrated assessment

Financial viability of offshore wind on the Texas Gulf Coast

Offshore wind is already a significant component of the electricity generation mix in Europe, and improvements in technology and cost are enabling increased offshore wind penetration in new markets around the world. Thus far, the US has struggled to materially participate in this industry, with only a single 30 MW offshore project in operation. Navigating a complicated regulatory framework, the lack of a coherent national policy, and facing local opposition, the industry has experienced some spectacular failures in recent years. However, the US now has an opportunity to take advantage of the lessons learned from years of (primarily) European development and combine them with excellent offshore wind resources close to transmission-constrained load centers. By far the leader of the US onshore wind industry, and with a long history of offshore oil and gas development, Texas has some major advantages when it comes to offshore wind. Wind resources in the Gulf of Mexico are more than adequate for economic production. With shallow depths and relatively calm seas, the Texas Gulf Coast is also well suited to offshore wind construction. These factors, coupled with a pro-development state regulatory scheme and extended jurisdiction over submerged lands, suggest that Texas is an ideal candidate for offshore wind development. With no currently active projects in the pipeline, this thesis examines the economic viability of offshore wind development on the Texas Gulf Coast at the project level. Using an ideal location and cost data from National Renewable Energy Laboratory (NREL), the Energy Information Administration (EIA), and industry sources, a hypothetical “test project” was developed and evaluated against three cost estimate cases and ten regulatory scenarios. These inputs were fed into a Discounted Cash Flow model to determine potential competitiveness in the Power Purchase Agreement (PPA) market in the ERCOT region. Results indicate that without significant cost reductions or major changes to either market conditions or federal/state incentive schemes, Texas Gulf Coast offshore wind cannot compete with other forms of onshore renewable generation. With ever-decreasing costs, it is not impossible that offshore wind could become viable at some point in the future, but given current conditions, it is not likely that any projects are on the near-term horizon.Energy and Earth Resource