Carbon regulation becomes the norm

Regulation of greenhouse gas emissions, including caps and prices, is spreading around the world.  Jurisdictions without something in place are becoming the exception.

Back in January I noted  that carbon pricing is in place or legislated in jurisdictions accounting for around a quarter of the world’s CO₂ emissions from energy and industry (with typically around half of emissions in these jurisdictions being priced).    This is a huge increase from ten years ago, just before the introduction of the EUETS, when the corresponding figure was less than 1%.  But this trend is now set to go much further as limits on carbon emissions spread nationally in China and the USA.  A national emissions trading scheme in China is expected before the end of this decade, following on from the provincial trial schemes already established.  (In practice such a scheme may be phased in over a few years.)  EPA regulation in the USA will introduce caps on emissions from the power sector to take effect from 2020.  These measures will mean that jurisdictions accounting for around two thirds of emissions will have some sort of cap or pricing in place.  (EPA regulation will be implemented at a state level.  It is likely to involve carbon pricing in some cases, although some states may pursue a more direct regulatory approach.  In either case emissions will be capped.)   This will have been achieved in only about a decade and a half.

With measures in place across the EU, the USA, and China, carbon caps and pricing will have become the norm rather than the exception.  This is likely to put pressure on other jurisdictions without such measures to act.  This trend is likely to be reinforced by agreement at the UNFCCC conference in Paris next year, even if, as expected, any agreement there stops short of legally binding emissions reduction targets.

The blue line represents the proportion of global emissions of CO2 from energy and industry occurring in jurisdictions with carbon pricing (i.e. excluding other sources of CO2 such as deforestation, and other greenhouse gases).  The green line represents the proportion of emissions actually priced, which is typically about half the total, because some sectors are usually excluded from pricing.

Looking at broader climate legislation, including not just carbon pricing but also other measures aimed at emissions reduction or adaptation to climate change, a similar pattern of rapid growth is evident.  The number of pieces of climate legislation introduced in the last ten years was nearly four times that in the previous ten years.  And legislation has been introduced in both developed and developing countries.

Source:  GLOBE study of climate change legislation (see notes)

There are, of course, many reasons to remain cautious about progress.  The outlook national scheme in China remains uncertain in the timing of its introduction (here assumed to be 2018), its stringency and its effectiveness.  US EPA regulation remains subject to legal challenge, although it seems likely to survive this.  Prices in the EUETS remain low.  And, even with all the present and prospective schemes in place, emissions reductions goals still fall short of what’s necessary to have a good chance of meeting the international commitment to limit the rise in average temperatures to 2 degrees (a goal which now looks extremely challenging in any case).

But there has been tremendous progress in a relatively short space of time.  Discussions on climate policy needs to recognise this context.  Any claims along the lines that either that “no-one’s doing anything” or “we’re the only ones doing something” are no longer valid.  There remains a pressing need to enhance this world-wide momentum, so that global emissions can peak and begin their ever more necessary downward track.  But acknowledging that should not obscure the remarkable progress that has been made.

Adam Whitmore –  30th September 2014

Notes

The spread of caps across the USA is shown as a single step on the above chart.  However the form of implementation of limits will in practice vary between states.  The caps under section 111(d) of the clean air act proposed by the EPA in the US are currently intensity based, with the conversion to mass based standards a matter of continuing discussion.  Implementation as the state level will vary, and it is likely that it will include pricing in some cases by not others.  Some states may join the Regional Greenhouse Gas Imitative (RGGI), others may include some kind of flexibility that in effect creates a carbon price in one state, or in a group, while others may pursue a more direct regulation of individual plants.

Japan and Mexico, which were deliberately excluded from the chart I posted in January as they have very low prices.  However they are included here.  The intention here is to give an indication of all the jurisdictions with action in some form.

The raw data for the chart showing the number of laws is here (see p.27):

http://www.academia.edu/6214974/The_GLOBE_Climate_Legislation_Study_A_Review_of_Climate_Change_Legislation_in_66_Countries._4th_Ed._Nachmany_Michal_Fankhauser_Sam_Townshend_Terry_Collins_Murray_Landesman_Tucker_Matthews_Adam_Pavese_Carolina_Rietig_Katharina_Schleifer_Philip_and_Setzer_Joana_  (see p.27)

Tranmission links to enable wind power

The availability of long distance transmission systems can help smooth out variations in availability of wind power, but helps solar less.  Policy needs to enable long-distance links to allow continuing increases in wind generation.

One of the challenges of moving to an electricity system running with a large proportion of wind and solar is that electricity output from these sources is variable, because the wind does not always blow and the sun does not always shine at any particular location.  With small proportions of these sources on the system this is not much of a problem.  However as a system becomes more dependent on these variable renewables, production is potentially curtailed in periods of high output, while there is a shortage of power at other times.  I’ll refer in this post to wind and solar photovoltaic (PV) power, which is by far the predominant form of solar electricity.  The issues with concentrated solar thermal power are different because there is some potential for storage in the power plant.

Difficulties with balancing supply and demand typically begin to become more severe as each type of variable renewable power, for example wind, begins to supply more than (very roughly) around 15% of annual electricity.  In practice the extent of the challenge of integration depends on a range of factors.  One influence is the amount of inflexible generating capacity such as nuclear on the system.  Another influence is the correlation between variable supply and demand.  For example, there is some seasonal correlation between electricity demand and wind output in Europe (in winter demand is higher and it’s windier), and there is some daily correlation between electricity demand and solar PV output in Australia (the demand peak is in the daytime).  Nevertheless, in any case there will be challenges in reliably meeting demand while accommodating very large amounts of variable supply.

To address this problem variable supply can be moved to different times, using storage, and to different places via transmission capacity.  Demand management can help, especially for a demand peaks, and some thermal back-up capacity is likely to be needed anyway in most cases.

The extent to which transmission links can help system balancing depends on the extent to which generation in different places is correlated.  If distant power sources tend to produce power at different times then transmission can greatly help smooth out variations in production, because when output is low in one location electricity can be moved there from another.  But if distant sources tend to produce power at the same time the advantages of long distance transmission will be reduced, because if output is low in one place there will be little electricity in the other place to move to fill the gap.  This is especially so if patterns of demand are also similar in the different places

Typically, correlations of output across regions for solar PV are much higher than for wind, especially as distances increase (see chart).  This is because solar output tends to depend strongly on time of day and season, which is quite similar even across an area as large as Western Europe, whereas wind varies with weather systems, which are less strongly related over distance of the order of 1000 miles or so.  Looking at the correlations between hourly output in different countries in Western Europe shows that the correlation between solar output in Germany and France is 88%, much greater than for wind at 44%.  Moving further away, the correlation between output in Germany and Spain is close to zero for wind, but still as high as 84% for solar.  The match of solar output is is actually greater than these figures imply due to the large number of times when solar output is zero for both countries.

Correlations of hourly output between different Western European countries are much greater for solar than for wind …

These factors mean that increasing interconnection will tend to enable higher proportions of wind more than it will enable higher proportions of solar.  (This is assuming transmission is for load balancing.  Interconnection to transport power from sunnier to less sunny regions may well be valuable.  Also, this conclusion would change if intercontinental of transmission of large amounts of power were possible, but this remains a distant prospect.)

Incidentally, the correlation between solar and wind output is negative (when it’s windy it tends to be less sunny and vice versa), so having some of each on the system tends to increase the combined total that can be accommodated, compared with a system only having either one or the other.

A recent study of the USA by the National Oceanic and Atmospheric Administration (NOAA) confirmed very large benefits from High Voltage Direct Current (HVDC) long distance transmission for systems with large amounts of variable renewables.   The study used very detailed weather and load data, and data on existing power plants.  It concluded that with optimistic projections of wind and solar costs it is possible to reduce CO₂ emissions by 82% with somewhat lower electricity costs, provided sufficient transmission capacity is in place.  The study emphasised the importance of the transmission network encompassing a large geographical area, such as the 48 contiguous US states, due to the large geographical scales over which weather is variable.

However, interconnectors are not always quick, cheap or easy to build.  They often link or cross different jurisdictions – US States, Chinese provinces or European countries – and will often link different types of electricity trading arrangement.  This can impose substantial barriers around permitting, and also around operation.  Policy can help the growth of wind by reducing these barriers and recognising the growing role of internconnection, although the precise policy measures necessary will be quite locally specific.  Enabling increased transmission is likely to be an important step in enabling the continuing growth of wind power in particular, and is likely to become increasingly urgent as growth continues.

Adam Whitmore – 16^th September 2014

References

Thanks to Mathieu Ecoifier for providing the correlation coefficients between wind and solar in Europe.  Correlation coefficients are a rough and ready indicator of independence.  Actual effects on system operation will depend on many factors.

For analysis of the inverse correlation of wind and solar see for example Correlations Between Large-Scale Solar and Wind Power in a Future Scenario for Sweden, Joakim Widén, IEEE Transactions on Sustainable Energy, Vol. 2, No. 2, April 2011

The US study mentioned is Alexander MacDonald et. al., NOAA Earth System Research Laboratory, Low Cost and Low Carbon Energy Systems Feasible with Large Geographical Size (2014) – Presentation at Imperial College London 27^th May 2014