The Jewish Press presented us with the dilemma of an energy deficient country that suddenly strikes it rich.  What is its optimal energy policy going foward?  Do you sell off your resources quickly and take the money or do you conservatively manage them for the long term? In the last couple of years Israel struck an energy bonanza with the discovery of two large natural gas fields off its Mediterranean shores. In 2009 Tamar, located approximately 80 kilometers off the coast of Haifa, endowed the Middle East nation with over 9 trillion cubic feet of natural gas. Shortly thereafter Leviathan, 40 kilometers farther offshore, shocked the nation and the world with estimated reserves double that of Tamar. From a nation without any petroleum resources in the heart of the world’s oil belt, Israel suddenly has almost 25 trillion cubic feet of natural gas at its command. This led to a debate within the country over whether to hold onto the resource for domestic use or to export it to obtain quick wealth. Before the government could complete an investigation into this dilemma the companies that discovered the gas fields “made a quiet deal with Russia, agreeing to sell the superpower gas for the next 20 years at a fixed price – amounting to half the output of the Tamar field.” This turned out to be against a recommendation to the government to conserve more of Israel’s natural gas to meet domestic demand.  At the same time some Israeli scientists question whether the finds are as large as initially projected. Now there are concerns that the deal with Russia, despite the new tax revenues, could exact a heavy price on the country in future years and limit the benefits to the Israeli people.

The Globe and Mail told us natural gas is winning the race for energy efficiency. “Energy conversion data in the U.S. electrical power sector is showing dramatic improvements in gas-fired power plant efficiency. In other words, it’s taking less natural gas to light up a bulb or dry someone’s hair…Increasing efficiency in its use makes natural gas a doubly compelling fuel from a social and environmental standpoint.”

adelaidenow said Australia will experience an “energy transformation” in the next decades with profound effects on electricity networks and energy distribution. A new report measuring electricity generation costs says that until 2020, renewable technologies – with the exception of bio-gas and on-shore wind – will have higher costs. However, by the mid-2030s, photovoltaic solar power and on-shore wind will offer the lowest costs of electricity generation, and will be accompanied by an overall decline in the cost gap between fossil-fuel and clean-technology electricity generation. Among non-renewable-based generation sources, combined natural gas and nuclear power will offer the lowest costs over most of the projection period and will remain cost competitive with the cheapest renewable technologies until 2050. You can access the report here. See also The Register Solar, wind, landfill to make cheapest power by 2030.

According to Seeking Alpha, the economics of syngas to liquids are finally favourable due to the shale revolution in North America. “…the economics of synfuels production has historically not been favorable enough to merit large-scale production. The recent boom in U.S. shale gas production and subsequent fall in natural gas prices have had a drastic impact on the economic feasibility of gas-to-liquids [GTL] pathways, and the synfuels industry is poised for U.S. expansion on an unprecedented scale.” This article is the first of a three-part series on synfuels production in the US, and examines how a long-term shift in energy prices is paving the way for gas to liquids production on an unprecedented scale. The second and third articles will look at the economics of coal-to-liquids and the long-term impact on syngas feedstock prices. Synfuels are synthetic transportation fuels produced from fossil fuels other than petroleum.

Mother Nature Network asked the question: How affordable is alternative energy?

The UK has decided to reduce taxes for natural gas drilling while cutting subsides to wind, solar and biomass. Big News Network reported the government announced a 10% cut in subsidies for onshore wind projects, reduce financial support for biomass, and additional cuts in incentives for solar power projects. Another energy policy reviews this fall could  impose additional cuts to incentives for onshore wind farms and solar farms. Meanwhile, a report by one of the UK’s leading energy economists says that electricity prices for the average home will go up 58% by 2020 because of the cost of wind turbines. The Daily Mail referred to a stark warning by Professor Gordon Hughes who believes the government’s green energy plans for the next eight years are a £124 billion ‘blunder’ that will hit every UK household hard. ‘The average household electricity bill would increase from £528 per year at 2010 prices to a range from £730 to £840 in 2020 ‘ he said. Professor Ian Fells, Professor of Energy Conversion at Newcastle University, agreed that wind farms are the most expensive form of generating electric energy. He added that combined gas cycle plants could produce the same amount of green energy for £13 billion – nearly 10 times cheaper than wind power.

Bloomberg informed us the Philippines has approved feed-in tariffs for alternative energy sources. The country’s Energy Regulatory Commission approved feed-in tariff rates for hydroelectric, biomass, wind and solar energy sources, lower than what the nation’s renewable energy board asked for. Hydroelectric power sources will enjoy a 5.90 pesos a kilowatt-hour tariff, biomass 6.63 pesos, wind 8.53 pesos and solar 9.68 pesos, The tariff for ocean thermal energy conversion resource is delayed pending further study. The Commission hopes the tariffs will cushion the impact of the incentive mechanism on electricity rates, while attracting investments in renewable energy.

Reuters reported that electricity finally comes to an impoverished Mozambican island. The author visits the remote Ibo Island in the Quirimbas Archipelago in northern Mozambique to find that modern grid electricity arrived for the first time this spring. For many decades the East African island was dependent on very old and unpredictable generators. Mozambique is one of the poorest countries in the world but the country is optimistic about a better future with the recent discovery of large natural gas reserves offshore.

India’s massive electricity blackout last week attracted a lot of attention.  Over one half of the country’s population went without power for a few days – some 600 million people. energydigital posted India’s Grid Failure Sparks Fears of Country’s Future as an unreliable infrastructure struggles to keep up with a rapidly expanding population and economy. The Economic Times explained what led to the failure of the electric grid in 9 states in northern India and New Civil Engineer added Rapid growth triggers massive Indian power cuts. The eurasia review put it bluntly: India’s Blackout: A Case Of Rotten Infrastructure. The Detroit Free Press noted that in India as much as 40% of electricity is not paid for. “As much as 40% of the power generated in India is not paid for. The bulk of it is stolen. If that seems unsustainable, it is.” The Huffington Post asked What Can We Learn From India’s Massive Blackouts? while gulfnews concluded India’s energy sector needs private capital and ieee spectrum performed a post-mortem on the blackouts.

A new report on electric grid infrastructure from SBI Energy was summarized at EcoSeed. Recent blackouts in India and the US stress the need for smart grids in a world of insatiable electricity demand. The report says service disruptions put stress on the global economy as they produce economic losses through lost business and added costs to energy. Smart grid technologies are a less costly complement to additional power plants, as well as transmission and distribution infrastructure expansion and rebuilding. They add system flexibility by way of real-time, two-way communications and the use of microgrids that can enable load shaving, additional electricity generation, and voltage regulation. The cost of service interruptions in the United States alone is forecasted to reach $71 billion by 2020. SBI Energy says that the country’s smart grid market would represent less than 10% of that cost that year, and would be an “excellent investment” over more costly grid infrastructure replacements or expansions.

 

 

 

 

 

 

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