Michael’s Abstracts 1-38 – Michael STAVY, Advisor on Renewable Energy Finance

1. Stavy, Michael, Financing Renewable Energy Projects in Iowa. Iowa All Energy Expo, Cedar Rapids,Iowa, September 24, 1999.

ABSTRACT–Discussed methods that Iowa project owners can use to finance their renewable energy projects. Analyzed the Iowa Energy Center’s”Alternative Energy Revolving Loan Program”.

2. Stavy, Michael, An Analysis of the Policies Required to Earn Carbon (CO2) Emissions Credits When Generating Electricity at Wind Power Plants, American Wind Energy Association,Washington, DC, AWEA Annual Meeting WINDPOWER 2000, Palm Springs, CA., May 2, 2000

ABSTRACT–In addition to being a possible source of NOx and SO2 emission credits, wind power can be a source of carbon (CO2 ) emission credits. Burning fossil fuels (coal, natural gas or heavy fuel oil) is combustion and creates CO2. The wind community and its friends accept the fact that carbon emissions is a cause of global warming.

This paper helps identifies what policies have to be put in place to allow the sale of carbon credits”created” in the generation of electricity from wind power. While this paper focuses on the United States, the polices identified here should have application beyond our borders. All carbon emission reductions depend on the United States’ emissions regulating authority (the EPA) setting a ceiling for the quantity of carbon that the United States can emit. This paper discusses the two basic policy methods of reducing carbon emissions: the cap and command system a carbon ceiling and the cap and trade carbon ceiling with a carbon credit market.

The paper shows that under an carbon credit market, there is the same level of reduction in carbon emissions as in a command system, but at a lower cost to the economy. A wind plant’s source of carbon credits is, in a strict physical sense, its replacement of a carbon emitting source of electricity with a non-carbon emitting source of electricity. This paper studies the “carbon replacement value”.

Wind power’s carbon replacement value is high, because unlike NOx and SO2 emissions, fossil fuel plants find it very hard to reduce carbon emissions. The author’s position is that the carbon replacement value of wind is a function of the United States’ current and future electric generation and capacity mix. After the carbon replacement value is developed, the paper covers specific wind power carbon credit issues so that the carbon credit can be made into a marketable financial security. The specific issues are the EPA’s recognition of carbon credits in carbon emission compliance, the time span used to generate the carbon credit, carbon credits from currently operating verse new wind projects and the physical non-performance by a wind plant seller of carbon credits.

The paper concludes by pointing out that when the wind power carbon credit becomes a marketable financial security, wind plant operators cansell the carbon credits to reduce the cost of electricity generated at windplants.

3. Stavy, Michael, A Quantitative Analysis of Financial Techniques for Reducing The Cost of (US¢/kWh) and at Grid Connected Photovoltaic (PV) Plants, American Solar Energy Society, Boulder,CO, ASES Annual Meeting SOLAR 2000, Madison, WI., June 20, 2000.

ABSTRACT–Non-polluting grid connected Solar photovoltaic (PV) electric power plants do not generate electricity that is cost competitive with the electricity generated at polluting fossil fueled (coal, natural gas, oil) plants. Given the current capital cost of grid connected PV power plants, utilities, independent power producers (IPP) and self-generators have no financial incentive to develop and operate these PV plants. This paper presents a levelized cost approach to compute the cost (¢/kWh) of PV generated electricity. The effect of reductions in the capital cost of PV plants is presented. Next five financial techniques (government agency buydowns on capital costs, PV production tax credits,government agency below market interest rates, green lending/investing and selling CO2, SO2 and NOX pollution allowances) are analyzed to see if these financial techniques can reduce the cost of PV electricity. Three revenue enhancing financial methods; green pricing, PV-renewable portfolio standard and net metering are also analyzed.

4. Stavy, Michael, An a priori Analysis of How Solar Energy Production Will Effect the Balance of Payment Account in a Model Developing Latin American Country, International Solar Energy Society, ISES Conference Millennium Solar Forum 2000, Mexico City, Mexico, September 19, 2000.

ABSTRACT– The model latin American country is Hyoptheria, with a weak currency (the hypo is the monetary unit), a trade deficit (including being a net importer of fossil fuels) and a sensitive balance of payments situation. There is an a priori analysis of the effect of domestic solar energy production on Hypotheria’s Balance of Payment (BoP) account. This a priori “observed” positive effect is the BoP Value of domestic solar energy. Many forms of solar energy are not cost competitive with fossil fuels. Because solar energy production does not emit greenhouse gases, it a energy source which has a Green Value. The Green Value and the BoP Value of solar energy should be used to reduce the cost of solar energy projects in Hypotheria and to make the solar energy cost competitive with fossil fuels.

Keywords: Fossil fuel; balance of trade; balance of payments; current account balance; GDP; greenhouse gases; solar energy; energy production; foreign exchange rate; energy cost

5. Stavy, Michael, Computing the Cost (¢/kWh) of Electricity Generated at Grid Connected Photovoltaic (PV) Generating Plants, American Solar Energy Association, Boulder, CO, ASES Annual Meeting SOLAR 2001, Washington, DC, April 21-25, 2001.

ABSTRACT–In my Solar 2000 paper, A Quantitative Analysis of Financial Techniques for Reducing the Cost (¢/kWh) of Electricity Generated at Grid Connected Photovoltaic (PV) Generating Plants, I developed an Excel worksheet to compute the levelized cost (¢/kWh) of PV generated electricity. This paper first discusses the technical, financial and economic principles underlying the worksheet. The paper then analyzes the organization of the worksheet and its parameters: constants, inputs (variables)computational methods and outputs (computed values). Topics covered include: capacity-Wp, capital cost-$/Wp, PV panel size and efficiency, physical life,solar radiation, levelized cost method, interest rate, return on investment,taxes, fixed and variable operating and maintenance costs.

At the end of the paper is a copy of the”Levelized Cost Worksheet for a 1 kWp PV Electric Generating Plant”for you to refer to. The benchmark values are for a model plant assumed to be located in Chicago, IL.

6. Stavy, Michael, Computing the Levelized Cost (BR¢/kWh [US ¢/kWh]) of Solar Electricity Generated at a Brazilian Grid Connected Photovoltaic (PV) Generating Plant, RIO’02 – World Climate & Energy Event, Rio de Janeiro, Brazil, January 6-11, 2002

ABSTRACT–A simple worksheet (spreadsheet) has been designed to compute the levelized cost (in BR¢/kWh [US ¢/kWh]) of grid connected PV generated electricity. A previous version of this paper was presented at the American Solar Energy Association’s SOLAR 2001 (# 6 above) .

This paper presents an updated version of this levelized cost worksheet for a new international audience in Brazilian Reals (BR$). The paper first reviews the technical, financial and economic basis underlying the worksheet. The technical analysis involves the physical life and electric production of the PV plant. The financial and economic analysis involves using financial annuities to cost account for the capital recovery (depreciation and amortization) of the initial capital and for the financial expense (interest and return on equity) of using the initial capital throughout the predicted physical life of the PV plant. The cost accounting also involves computing the plant’s yearly fixed and variable operating and maintenance expenses.

The paper then analyzes, in more depth, the specific inputs (capacity-kWp, capital cost-BR$/kWp [US$/kWp], efficiency, physical life, solar radiation, capital recovery method, interest rate, return on investment, tax adjustments, fixed and variable operating and maintenance expenses) used in the worksheet. Near the end of this paper is a printed copy of the “Levelized Cost Worksheet for a 1 kWp PV Electric Generating Plant”. The worksheet has benchmark values in BR$for a model solar electric plant located in Rio de Janeiro, Brazil and in US$ for a model solar electric plant located in Chicago, IL

I presented my paper at 16:20 on 10 Jan 2002. Download my paper at http://www.ri o 12.com/rio02/

7. Stavy, Michael, The Effect That the Kyoto Protocol Will Have on the Cost of Wind Power in the Signatory Countries, 2002 Global Windpower Conference, Paris, France, April 2-5, 2002

ABSTRACT–Green House Gases (GHG) emissions are causing global warming. This paper focuses on carbon dioxide (CO2) emissions, the major GHG. The paper discusses the effect that the Kyoto Protocol will have on the cost of wind electricity in signature countries. Burning fossil fuels to generate electricity creates CO2 air emissions. Wind generated electricity has no CO2 emissions. At the 1992 “Earth Summit” in Rio, the UNFCCC was adopted by the earth’s nations. At the 1997 COP-3 in Kyoto, a Protocol to the FCCC was adopted. The Kyoto Protocol sets a time period (commitment period) by which certain signature (Annex I) nations must reduce the amount (assigned amounts)of GHG emissions that they can emit. The paper first studies the Kyoto Protocol provisions for international bubbles, international emissions trading, joint implementation (JI), the clean development mechanism (CDM), and wind electricity. The Kyoto Protocol allows each Annex I nation to design its own GHG emission control system. The paper next discusses wind and the major GHG emission architectures; cap and command, cap and trade and carbon tax. At the end of the paper is a summary of the effect that the Protocol will have on the cost of wind power.

8. Stavy, Michael, The Effect That the Kyoto Protocol Will Have on the Cost of Renewable Energy in the Signatory Countries, Northern California Sun, June, 2002, Vol. 26 Issue 1, A Publication of the Northern California Solar Energy Association, Berkeley,CA.

ABSTRACT–Read the above abstract (#7) for my Global Wind Power 2002 Conference Paper. This paper is a revision of my Paris paper.

9. Stavy, Michael, A Financial Worksheet for Computing the Cost (¢/kWh) of Solar Electricity Generated at Grid Connected Photovoltaic (PV) Generating Plants, Journal of Solar Energy Engineering (JSEE), August, 2002, Vol. 124, Page 319.

This article was one of the top 10 articles downloaded from the JSEE in the following months: November, 2006; December, 2007; February, 2008; October, 2008.

ABSTRACT–This paper discusses the technical, financial, and economic principles underlying the levelized cost method of computing the cost of solar electricity.

Topics include the levelized cost method, solar radiation, solar panel efficiency, depreciation, cost of capital, fixed and variable operating and maintenance costs, and taxes.

The paper includes the worksheet, ‘‘Levelized Cost Worksheet for a 1 kW Solar Electric Generating Plant.’’ Its benchmark values are for a model solar plant located in Chicago, IL. The paper discusses these benchmark values as it analyzes the worksheet’s constants (capacity-1 kW, 8,760 hr/yr), independent variables (capital cost-$/kW, cost of capital-%, physical life-yr, standard sun hours, fixed and variable O & M expense), and dependent variables (capital amortization expense, capacity factor, cost of solar electricity).

You must order this paper directly from the publisher. https://tinyurl.com/yatsour7

10. Stavy, Michael, Inflation and the Cost (¢/kWh) of Solar Electricity Generated at Grid Connected Photovoltaic (PV) Electric Generating Plants , American Solar Energy Society, Boulder, CO, Annual Meeting SOLAR 2002, 15-20 June, Reno, NV

What goes on in Reno stays in Vegas except that Michael’s hope that his Solar 2002 Paper does not stay in Vegas. You can ask for a copy of his paper even if you do live in Reno! It is FREE.

ABSTRACT–An engineering economics study of how inflation (deflation) effects the price received and generating cost of electricity at a model Chicago net meter grid connected solar electric generating plant. The study uses an inflation adjustable version of the Excel worksheet that I presented in my Solar 2001 paper (# 7 above), Computing the Cost (¢/kWh) of Electricity Generated at Grid Connected Photovoltaic (PV) Generating Plants. The paper first discusses monetary and market inflation (deflation). Then it reviews the general measurement of inflation; the consumer price index and the percent change in the CPI. Both compound and annualized rates of inflation are discussed, as are nominal and real prices. The end of the paper analyzes how inflation effects the worksheet parameters; revenue, capacity-kW, capital cost-$/kWP, efficiency, physical life, solar radiation, capacity ratio, capital recovery method, interest rate, return on investment, tax adjustments, fixed and variable operating and maintenance expense and the levelized cost of electricity.

11. Stavy, Michael, A Financial Worksheet for Computing the Cost (US¢/kWh) of Electricity Generated at a Grid Connected Hydrogen Fuel Cell Electric Generating Plant, National Hydrogen Association, 14th Annual US Hydrogen Meeting, 4-6 March 2003, Washington, DC

ABSTRACT–In my August, 2002, Journal of Solar Energy Engineering paper (#9 above) , A Financial Worksheet For Computing the Cost (US¢/kWh) of Electricity Generated at Grid Connected Photovoltaic (PV)Generating Plants, I developed a simple levelized cost worksheet to compute the levelized cost (US¢/kWh) of solar electricity. This paper presents a hydrogen fuel cell electric generating plant version of the JSEE solar electric worksheet to compute the levelized cost (US$/kWh) of generating electricity ata grid connected hydrogen fuel cell plant.

This paper discusses the technical, financial and economic principles underlying the levelized cost method of computing the cost of hydrogen fuel cell generated electricity. Topics include the levelized cost method, hydrogen fuel cell power plant capacity (kW), hydrogen fuel cell capacity cost (US$/kW), physical life of a hydrogen fuel cell plant-yr, plant availability (%), the plant capacity factor (%), electric energy generated per year-kWh/yr, hydrogen fuel cost (US$/mmBtu, €/GJ in Europe), fuel cell efficiency (kWh/mmBtu), depreciation, cost of capital-%, fixed and variable non-fuel operating and maintenance costs and taxes.

The paper includes the worksheet, “Levelized Cost Worksheet for a model 1 kW Hydrogen Fuel Cell Electric Generating Plant” with benchmark values for a model plant located in Chicago, IL.

The paper discusses these benchmark values as it analyzes the worksheet’s algorithm, constant (capacity-1 kW), independent variables (capital cost, cost of capital, physical life, availability factor,capacity factor, hydrogen fuel cost, fixed and variable non-fuel O & M expense) and dependent variables (capital amortization expense, electric energy generated, levelized cost of fuel cell electricity).

12. Stavy,Michael, A Financial Worksheet for Computing the Levelized Cost(US$/gasoline gallon Equivalent) of Hydrogen “Vehicle Fuel” generated at a Model Wind Electric Powered Hydrogen Electrolyzer Plant , at the American Solar Energy’ Society, SOLAR 2003 Convention, 21-26 June, Austin,TX

ABSTRACT as a mini-Paper–This paper discusses the technical, financial and economic principles underlying the levelized cost method of computing the cos of hydrogen vehicle fuel produced by a wind electric powered hydrogen electrolyzer plant. Topics include the conventional methods of generating industrial hydrogen, carbon free hydrogen generation, hydrogen generation efficiency,gasoline gallon equivalent, levelized cost method, depreciation, capital cost,cost of capital, fixed and variable operating and maintenance costs.

The paper discusses these benchmark values andthe worksheet algorithm as it analyzes the worksheet’s constants: 1 MW electrolyzer power rating, energy conversion constant of 36.65 kWh/gasoline gallon, 100% plant availability factor; independent variables: electrolyzer capital cost-US$/MW, cost of capital-%, physical life-yr, electrolyzer hydrogen generation efficiency-%, fixed and variable O & M cost; and the dependent variable: levelized cost (US$/gasoline gallon equivalent) of hydrogen vehicle fuel generated. The number of gasoline gallons equivalent of hydrogen generated per year equals the quotient of the MWh per year that the electrolyzer consumes divided by the constant, MWh per gasoline gallon equivalent, times the electricity to hydrogen electrolyzer efficiency per cent. The cost of the wind electric energy used to generate one gasoline gallon equivalent of hydrogen equals the product of the cost of the wind electricity per MWh times the constant, MWh per gasoline gallon equivalent, divided by the electricity to hydrogen electrolyzer efficiency per cent.

In this paper, the financial worksheet from my August, 2002 Journal of Solar Energy Engineering paper, A Financial Worksheet for Computing The Cost (¢/kWh) of Solar Electricity Generated at a Grid Connected Photovoltaic (PV) Generating Plant has been reorganized to compute the levelized cost per gasoline gallon equivalent of hydrogen vehicle fuel generated from wind electricity.

The paper includes the worksheet, “Levelized Cost (US$/gasoline gallon equivalent) of Hydrogen Vehicle Fuel Generated by aModel 1 MW Rated Wind Electric Powered Electrolyzer Plant” with benchmark values for the independent variables. The benchmark values are for a model plant located in Iowa.

The benchmark values for the paper’s model electrolyzer are: US$ 800,000 per MW (US$ 800/kW) electrolyzer capital cost,10% cost of capital (interest/ROI), $35 per MWh wind electricity cost, 25 year physical life, 70% electricity to hydrogen electrolyzer efficiency, US$ 24,000a year annual fixed O & M cost (3% of the electrolyzer capital cost) and 10 cents per gallon equivalent variable O & M cost. The benchmark values result is a levelized cost of US$ 2.60 a gasoline gallon equivalent for hydrogen vehicle fuel verse a December 9, 2002 spot wholesale price of US$0.80/gallon for unleaded premium gasoline. The benchmark values are optimistic to encourage Kreith and Isler’s goal of “serious R&D effort on reducing the cost of producing hydrogen vehicle fuel from solar sources that produce less greenhouse gases than fossil fuels”

13. Stavy, Michael, A Financial Worksheet For Computing the Levelized Cost of Wind Electricity (US$/MWh,€/MWh) Stored in a Hydrogen Storage System, American Wind Energy Association, WIND 2003 Convention, 18-21 May, Austin, TX

ABSTRACT–Wind is an intermittent source of electricity.If, in the future, wind electricity could be economically stored, it would increase the market value of the wind electricity. This increase in the market value of wind energy could be realized in:
1. Capacity payments
2. No out of balance payments for the transmission of wind electricity.
3. Extra revenue earned by selling the wind electricity at the premium price ina time of day pricing tariff.

In the electric energy storage cycle, a Hydrogen Storage System (HSS) must first use the wind electricity to produce hydrogen in order to charge (fill) the hydrogen storage facility, second, store the hydrogen until the energy is needed and third, discharge (empty the hydrogen from the storage facility) and convert it back into electricity for sale to the grid. This paper presents a worksheet that computes the levelized cost of stored wind energy (US$/MWh, €/MWh). The paper compares the cost of the stored wind electricity with the premium price of electricity in a time of day pricing tariff.

This paper discusses the technical, financial and economic principles underlying the levelized cost method of computing the cost of wind electricity stored in a HSS. Topics include the electric energy storage cycle (charging, storage, discharge), hydrogen storage verse pumped storage (and verse other future electric storage technologies), the levelized cost method,storage cycle efficiency, depreciation, cost of capital, fixed and variable operating and maintenance costs.

The paper includes the worksheet, “Levelized Cost of Wind Electricity Stored in a 1 MW Hydrogen Storage System”. Its benchmark values are for a US model plant located in Colorado. The worksheet converts the benchmark US$ values into € values.

The paper discusses these benchmark values as it analyzes the worksheet’s;
1. Constant, a HSS with a 1 MW rating;
2. Independent variables, electricity spot price-US$/MWh, electricity time of day premium spot price-US$/MWh, cost of wind electricity for charging(filling) the HSS-US$/MWh, number of storage cycles per year, discharge time per cycle-%, storage cycle efficiency, number of MWh stored, capital cost of HSS-$/MWh, cost of capital-%, physical life-yr, fixed and variable O &M expense, €/US$;
3. Dependent variable, levelized cost (US$/MWh, €/MWh) of wind electricity stored.

The reader can use the worksheet to do their own computation of the levelized cost of stored wind electricity. The worksheet allows the reader to use their own values for the independent variables. The worksheet also allows the reader to convert the US$ values into € values at the reader determined exchange rate (€/US$). The worksheet HSS is rated at 1 MW,but the reader can scale up the system. The reader can use the worksheet to compare the levelized cost of hydrogen-storage electricity with the levelized cost of pumped-storage electricity (and with the levelized cost of other future electric storage technologies).

14. Stavy, Michael, A Financial Worksheet For Computing the Levelized Cost of Wind Electricity(US$/MWh, SEK/MWh, €/MWh) Stored in a Hydrogen Storage System, International Solar Energy Society, SOLAR WORLD CONFERENCE 2003, 14-19 June , Göteborg, Sweden.

ABSTRACT--Wind is an intermittent source of electricity.If, in the future, wind electricity could be economically stored, it would increase the market value of the wind electricity. This increase in the value of wind energy could be realized in:

Capacity payments.
No out of balance payments for the transmission of wind electricity.
Extra revenue earned by selling the wind electricity at the premium price in a time of day pricing tariff.

In the electric energy storage cycle, a Hydrogen Storage System (HSS) must first use the wind electricity to produce hydrogen in order to charge (fill) the hydrogen storage facility, second, store the hydrogen until the energy is needed and third, discharge (empty the hydrogen from the storage facility) and convert it back into electricity for sale to the grid. This paper presents a worksheet that computes the levelized cost of stored wind energy (US$/MWh, SEK/MWh, €/MWh). The worksheet compares the stored wind electricity cost with the time of day premium price.

This paper discusses the technical, financial and economic principles underlying the levelized cost method of computing the cost of wind electricity stored in a HSS. Topics include the electric energy storage cycle (charging, storage, discharge), hydrogen storage verse pumped storage (and verse other future electric storage technologies), the levelized cost method, storage cycle efficiency, depreciation, cost of capital, fixed and variable operating and maintenance costs.

The paper includes the worksheet, “Levelized Cost of Wind Electricity Stored in a 1 MW Hydrogen Storage System”.

Benchmark values are for a US (Chicago, IL) and a Swedish model plant.

US$ Results: $68.32/MWh stored levelized cost with Benchmark values; 365 storage cycles per yr, 8 hrs discharge per cycle,75% efficiency, $35/MWh wind electricity cost, $59,700/MWh HSS cost, 10.0%interest, 25 yr physical life, 1% of HSS capital cost fixed OM cost, $2.00/MWh variable OM cost.

revised: 11 March 2003

15. Stavy, Michael, Worksheets for Computing the Levelized Cost(US$/gasoline gal equivalent; €/gasoline L equivalent) and Carbon Content (lb-CO₂/gasoline gal equivalent; kg-CO₂/L gasoline L equivalent) of Hydrogen Vehicle Fuel Produced at a Model Wind Electric Powered Hydrogen Electrolyzer, Monthly Luncheon of the NCAC-USAEE, Friday, 19 December 2003, Montpelier Dining Room, Library of Congress, Washington, DC

ABSTRACT–This paper is a response to Kreith and Isler’s August, 2002 Journal of Solar Energy Engineering Discussion Note, Comments Dealing with Fuel Cell Energy Policy and Renewable Energy. This paper first discusses the technical and economic principles underlying the levelized cost method of computing the cost (US$/gal-HVF; Euro/L-HVF) and carbon content (lb-CO₂/gal-HVF;kg-CO₂/L-H₂) of a gallon of hydrogen vehicle fuel (HVF)produced by a wind (grid) electric powered hydrogen electrolyzer (HE). Topics include global warming and greenhouse gas (GHG) emissions, the conventional methods of producing industrial hydrogen (H₂),HE technology, CO₂ emissions from internal combustion engine vehicles (ICEV) and fuel cell vehicles (FCV), CO₂ emissions from H₂production, gasoline gallon equivalent (GGE) of agal-HVF, HE capacity (MW, gal-H₂/yr; L-H₂/yr;), HE efficiency-%, HE capacity cost-US$/MW; Euro/MW, physical life of a HE-yr, HE availability-%, HE capacity-%, electric energy(wind, grid) cost (US$/MWh; Euro/MWh), gal-HVF/yr (L-HVF/yr)produced, levelized cost method, depreciation, capital cost-%, cost of capital,fixed and variable non-electric energy operating and maintenance (O&M)costs and taxes. The paper then compares the carbon emissions(lb-CO₂/100mi; kg-CO₂/100km) of the current US passenger ICEV Fleet with a proposed US passenger FCV fleet

The paper includes two worksheets, “Levelized Cost (US$/gal-H₂; Euro/L-H₂) and Carbon Content (lbs-CO₂/gal-H₂; kg-CO₂/L-H₂) of HVF Produced at a Model Wind Electric Powered 1 MW HE with Benchmark Values for a Model Plant Located in Iowa next to a Model 1 MW Wind Plant” and “A Comparison of the Carbon Emissions (lb-CO₂/100mi; kg-CO₂/100km) and Fuel Costs (US$/100mi; €/100km) of the Current US Passenger ICEV Fleet with a Proposed US Passenger FCV Fleet”. There is also a list of nomenclature.

This paper was presented at the American Solar Energy Society (ASES) Solar 2003 Conference,June 21-25,2003, Austin, TX. I presented another version of this paper with Euro and SI units (kg, km, L) at the 2003 European Wind Energy Conference, 16-20 June 2003, Madrid, Spain. On October 18,2003 I presented this paper to the 33^rd Annual Illinois Economics Association Meeting.

This paper has now been submitted to the Journal of Solar Energy Engineering (JSEE). I would like to get some more professional and academic feedback during the December 19^th NCAC-USAEE Monthly Luncheon. Reader comments are welcome. Benchmark values have not been up dated since June 21, 2003.

16. Stavy, Michael, The Use of the Kyoto Protocol’s Clean Development Mechanism (CDM) to Help Finance Wind Projects in Developing Countries, 2004 Global Wind Power Conference, 28-31 March, Chicago, IL

ABSTRACT–The Kyoto Protocol was created to reduce global warming by reducing greenhouse gas (GHG) emissions. The Protocol measures GHG in metric tons (t_m) of carbon dioxide (CO₂),the major GHG. The Protocol sets the first time period by which the developed signature nations (OECD-Annex I) must reduce the amount of CO₂ that they can emit. The non-Annex I (developing) countries are not required to reduce emissions in the first time period but may do so using the Protocol’s clean development mechanism (CDM). The paper discusses the sections of the Protocol that could effect the cost of wind electricity in CDM projects. Topics include the Protocol’s emission control architecture, international emissions trading,Annex I nations’ emission control architectures, the CDM, the protocol’s AAUand CER emission units, the computation of wind’s avoided emissions (t_m-CO₂/MWh)and the reduction in the cost of wind electricity (US$/MWh; €/MWh). Worksheets with benchmark values and a list of abbreviations are provided. Even with optimistic benchmark values, the CDM does not make wind cost competitive with coal or gas plants.

17. Stavy, Michael, THE CARBON CONTENT OF HYDROGEN, National Hydrogen Association,2004 Convention, April 26-30, Los Angeles, CA

ABSTRACT–Carbon dioxide [CO₂] is the major green house gas that is causing global warming.The US fleet of fossil fueled (coal, oil, natural gas) electric power plants (steam turbine, combined cycle gas turbine, etc) has increased the atmospheric concentration of CO₂. A proposed US fleet(fuel cell, CCGT, etc) of hydrogen fueled electric power plants does not emit any significant CO₂ as it operates.

H₂ does not occur in nature and must be produced. Current US industrial H₂ production technologies (reformation of natural gas, coal and oil gasification) are all hydrocarbon based and all emit CO₂ as a by-product of the H₂ production. H₂ production at an electric powered (renewable, carbon content grid, nuclear) hydrogen electrolyzer (HE) does not emit any CO₂ as a by-product of the H₂ production.

Any carbon emitted in the production of H₂ must be attributed to the proposed power plant fleet. A H₂power plant fleet that uses hydrocarbon based H₂ does not operate carbon free when the CO₂ emissions from the H₂ production are included in the computation of the fleet’s CO₂emissions.

H₂,produced as an industrial gas, has traditionally been measured by mass: lb (SI; kg) or volume: standard cubic foot (SCF) (nominal cubic meter [Nm³]). H₂,produced as a fuel, should be measured in units of energy: mmBtu, GJ.

This paper presents a set of benchmark CO₂emission values for the major industrial hydrocarbon based H₂ production technologies and for HE production. These benchmark carbon values are required to compute the CO₂ emissions attributable to the proposed H₂ fleet. The proposed H₂ fleet’s CO₂ emissions can then be compared with the current fossil fleet’s CO₂ emissions.

The benchmark H₂ carbon values are complied from published sources. The availability and variability of published H₂ carbon content values are noted.

This paper presents the worksheet, Benchmark CO₂ Emission Values (lb-CO₂/mmBtu-H₂;kg-CO₂/GJ-H₂) for Different Hydrogen Production Technologies.

18. Stavy, Michael, THE CARBON CONTENT OF HYDROGEN VEHICLE FUEL, California Energy Commission, 1st Annual Climate Change Conference, June 9-10, 2004, Sacramento, CA

ABSTRACT–Carbon dioxide (CO₂)is the major green house gas that is causing global warming. The US fleet of gasoline fueled auto vehicles (GV) has increased the atmospheric concentration of CO₂. A proposed US fleet of hydrogen fueled vehicles (fuel cell, ICE, etc) (HV) does not emit any significant CO₂ as it operates.

H₂ does not occur in nature and must be produced. Current US industrial H₂ production technologies (reformation of natural gas, coal and oil gasification) are all hydrocarbon based and all emit CO₂ as a by-product of the H₂ production. H₂ production at an electric (renewable, carbon content grid of fossil electricity) powered hydrogen electrolyzer (HE) does not emit any CO₂ as a by-product of the H₂ production.

Any carbon emitted in the production of H₂ must be attributed to the proposed hydrogen vehicle fleet. A HV fleet that uses hydrocarbon based H₂ does not operate carbon free when the CO₂ emissions from the H₂ production are included in the computation of the HV fleet’s CO₂emissions.

H₂produced as an industrial gas, has traditionally been measured by mass: lb (SI; kg) or volume: standard cubic foot (SCF) (nominal cubic meter [Nm³]). H₂,producedas H₂vehicle fuel (HVF), should be measured in the standard units of measurement for gasoline: gal-H₂; L-H₂.These are equivalent units of energy, not volume.

The benchmark carbon values for GVF and HVF are required to compute the CO₂ emissions from the GV and HV fleets. The paper presents a set of benchmark CO₂emission values for HE production and for steam methane reformation (SMR), the major industrial hydrocarbon based H₂ production technology. A benchmark value for the carbon content of gasoline vehicle fuel (GVF) is also presented. The benchmark carbon values for gasoline and H₂ are complied from published sources. The availability and variability of published H₂ carbon content values are noted.

The fuel efficiencies of the GV fleet and the HV fleets are also required. Vehicle fuel efficiency is measured in mpg; (L/100km). The availability and variability of published fuel efficiency values for the GV and the HV fleets are noted.

The carbon emissions from the GV and HV fleets are measured in gm-CO₂/mi; gm-CO₂/100km.The GV and HV fleet CO₂ emission values are computed presented and compared.

The paper presents the worksheet, A Comparison of the CO₂ Emissions (gm-CO₂/mi;gm-CO₂/L-H₂) for a GV and HV Fleet using GVF and HVF from Different Hydrogen Production Technologies. A paper will be provided.

19. Stavy, Michael, A Worksheet for Computing the Cost (US$/MWh; €/MWh) of Electricity Generated at a Model 1 MW Grid Connected Colorado USA Wind Turbine, World Renewable Energy Conference-VIII, August 29-September 3, 2004, Denver, CO

ABSTRACT–This paper presents a worksheet to compute the levelized cost of electricity(US$/MWh) generated at a model 1 MW grid connected Colorado sited wind turbine. The worksheet converts US$ monetary values into €. This paper briefly reviews the technical and economic basis for measuring the cost of wind electricity. The technical analysis involves predicting the physical life and electric production of the model wind turbine. The economic analysis involves using a financial annuity to cost account for the capital recovery(depreciation) of the initial capacity cost and for the financial expense(interest) of using the financial capital during the predicted physical life of the turbine. Th paper discusses the worksheet’s computational algorithm, benchmark inputs and computed outputs

Based on the computed Total Levelized Cost and an assumed 20% mark-up at retail on the current cost of Colorado’s regular household grid electricity, wind electricity is cost competitive. Readers entering different input variable values might reach a different conclusion.

20. Stavy, Michael, The Carbon Content of Hydrogen Vehicle Fuel Produced By Hydrogen Electrolysis, February, 2005 Journal of Solar Energy Engineering, Vol 127, Page 161.

ABSTRACT--This paper discusses the four points in Kreith and Isler’s August, 2002 Journal of Solar Energy Engineering Discussion Note, Comments Dealing with Fuel Cell Energy Policy and Renewable Energy. The paper compares the carbon emissions (gm-CO₂/mi) of the current US passenger gasoline vehicle (GV) fleet with a proposed US passenger hydrogen vehicle (HV) fleet. The paper uses the efficiency method to compute of the carbon content (gm-CO₂/gal-H₂) of hydrogen vehicle fuel (HVF) produced by a hydrogen electrolyzer (HE). The carbon content of the electricity (gm-CO₂/kWh) used to power a HE is used to compute the carbon content of the HVF. The fuel efficiency (mpg) of the current US GV fleet and of the proposed HV fleet are used to compute the carbon emissions of the two fleets.Kreith and Isler’s four points are demonstrated for H₂ from a HE. Equations and a list of abbreviations are provided.

You must order this paper directly from the publisher. https://tinyurl.com/yca6tp36

21. Stavy, Michael, Reporting the Wind Story, Reporting Energy Issues in the Midwest Seminar, September 14, 2006, Champaign/Urbana News Gazette offices, Urbana, IL. Sponsored by the Foundation for American Communications (FACS), the News/Gazette,the Society of Professional Journalists and the S. D. Bechtel Jr. Foundation.

ABSTRACT–This paper is a PowerPoint presentation on the basics of generating electricity with Midwestern wind power. It is prepared for Midwestern journalists who will be covering the wind story in the region. The presentation will review the technical and economic basis for generating electricity at utility sized wind turbine plants. The presentation will list the parameters that journalists can use to describe utility sized wind plants in their news articles. At the end of the presentation I will answer the reporters’ questions.

22. Stavy, Michael, The Levelized Cost of Using Hydrogen to Store Wind Electricity (US$/MWh, € /MWh), POWER-GEN Renewable Energy & Fuels 2007 Conference March 6-8, Mandalay Bay Conference Center, Las Vegas, NV

What goes on in Vegas stays in Vegas except that Michael’s hope that his Power-Gen 2007 Paper does not stay in Vegas. You can ask for a copy of his paper even if you do live in Vegas! It is FREE.

ABSTRACT–Wind is an intermittent source of electricity. If the electricity from a wind plant could be economically stored, it would increase the value of the electricity. The storage of wind electricity as hydrogen (H₂) has been proposed.Based on the author’s previous work, this paper updates the discussion of the technical and financial principles underlying the levelized cost method of computing the cost of wind electricity (WE) stored in a model Hydrogen Storage System (HSS)located next to a model Nevada, USA Wind Plant (WP). Topics include wind intermittency, the HSS technology, the electric energy storage cycle(charging, storage, discharge), the levelized cost method, sizing the HSS for a specific WP, HSS storage cycle efficiency, US$/€ exchange rate, WE cost, HSS capacity cost, depreciation, cost of capital, fixed and variable operating and maintenance costs. This paper computes values for the levelized cost of storing the wind electricity by using two worksheets with benchmark input values;“Computing the Capacity (MW), Capacity Factor-%, Capacity Cost (US$/MW) andStorage Cycle Efficiency (SCE-%) of a Model HSS” and a “Computing the Levelized Cost (US$/MWh) of Wind Electricity Stored in a Model HSS”. This paper discusses these benchmark input values as it analyzes the worksheets and the worksheets’ computed output values. Readers can use the worksheets with their own input values to compute the levelized cost of storing wind electricity. This paper concludes that, even though it is technically possible,based on the current HSS capacity cost and storage cycle efficiency,storing wind electricity as H₂would increase the after storage cost of the wind electricity 4.26 times.

23. Stavy, Michael, The Current Technology and Economics of Storing Wind Electricity as Hydrogen, 2007 European Wind Energy Conference, 7-10 May, Milan, Italy

ABSTRACT Wind is an intermittent source of electricity. If the electricity from a wind plant could be economically stored, it would increase the value of the electricity. The storage of wind electricity as hydrogen (H₂) has been proposed.Based on the author’s previous work, this paper is another updated discussion of the technical and financial principles underlying the levelized cost method of computing the cost of wind electricity (WE) stored in a model Hydrogen Storage System (HSS). In this paper the model HSS is located next to a modelItalian Wind Plant (WP) and the € is the monetary unit. Topics include wind power intermittency, the HSS technology, the electric energy storage cycle (charging,storage, discharge), the levelized cost method, sizing the HSS for a specific WP, HSS storage cycle efficiency, €/US$ exchange rate, WE cost, HSS capacity cost, depreciation, cost of capital, fixed and variable operating and maintenance costs. This paper computes values for the levelized cost of storing the wind electricity by using two worksheets with benchmark input values;“Computing the Capacity (MW), Capacity Factor-%, Capacity Cost €/MW) andStorage Cycle Efficiency (SCE-%) of a Model HSS” and a “Computing the Levelized Cost (€/MWh) of Wind Electricity Stored in a Model HSS”.This paper discusses these benchmark input values as it analyzes the worksheets and the worksheets’ computed output values. Readers can use the worksheets with their own input values to compute the levelized cost of storing wind electricity. This paper concludes that, even though it is technically possible,based on the current HSS capacity cost and storage cycle efficiency,storing wind electricity as H₂would not be cost effective.

24. Stavy, Michael, The Current Technology and Economics of Storing Wind Electricity as Hydrogen, WindPower 2007,3-6 June, Los Angeles, CA.

ABSTRACT–Wind is an intermittent source of electricity. If wind electricity could be economically stored, wind would quickly become American base load generating capacity. Based on the author’s previous work, this paper updates the discussion of the technical and financial principles underlying the levelized cost method of computing the cost of wind electricity (WE) stored in a model California Hydrogen Storage System (HSS) located next to a model California Wind Plant (WP). Topics include WP intermittency, the HSS technology, the electric energy storage cycle (charging, storage,discharging), the levelized cost method, sizing the HSS for a specific WP, HSS storage cycle efficiency, US$/€ exchange rate, WE cost, HSS capacity cost,depreciation, cost of capital, fixed and variable operating and maintenance (O& M) costs.

The paper computes values for the levelized cost of storing the wind electricity by using two worksheets with benchmark input values

1. Computing the HSS Capacity (MW), Capacity Factor-%, Capacity Cost (US$/MW)

2.Storage Cycle Efficiency (SCE-%)Computing the HSS Levelized Cost (US$/MWh) of Stored Wind Electricity.

The paper discusses these benchmark input values as it analyzes the worksheets and the worksheets’ computed output values. Readers can use the worksheets with their own input values to compute the levelized cost of storing wind electricity. This paper concludes that, even though it is technically possible, based on the current HSS capacity costand storage cycle efficiency, storing wind electricity as H₂would increase the after storage cost of the wind electricity 4.4 times (US$40.00→ US$175.64/MWh).

Computing the HSS Capacity (MW), Capacity Factor-%, Capacity Cost (US$/MW) and Storage Cycle Efficiency (SCE-%) and Computing the HSS Levelized Cost (US$/MWh) of Stored Wind Electricity. The paper discusses these benchmark input values as it analyzes the worksheets and the worksheets’ computed output values. Readers can use the worksheets with their own input values to compute the levelized cost of storing wind electricity.

This paper concludes that, even though it is technically possible, based on the current HSS capacity costand storage cycle efficiency, storing wind electricity as H₂would increase the after storage cost of the wind electricity 4.4 times (US$40.00→ US$175.64/MWh).

25. Stavy, Michael, An Analysis of Whether the Kyoto Protocol is Reducing the Cost Advantage of EU Fossil Electricity Over EU Wind Electricity, 2008 European Wind Energy Conference. 31 March- 03 April, Brussels, Belgium.

ABSTRACT–This paper discusses the affect that the Kyoto Protocol and the EU’s chosen carbon emission control architecture (EU Emission Trading Scheme) is having on the reducing the relative cost of wind electricity in the EU Annex I nations during the Protocol’s first commitment period. The paper then makes suggestions for designing Kyoto-II to improve the relative cost of wind electricity in the EU during the second commitment period. Carbon emissions are causing global warming. The Kyoto Protocol has been set up to reduce carbon emissions. This paper covers the EU electric power industry. Burning fossil fuel to generate electricity creates carbon emissions. Wind generated electricity has no carbon emissions. Wind energy is, however, more expensive than fossil electricity. The Protocol has set a time period by which the EU Annex I nations, organized under the common ETS emissions bubble, must reduce the maximum amount (cap) of carbon emissions that they can emit. The Protocol adds the cost of carbon emission reductions to the cost of generating fossil fuel electricity. The Protocol is,therefore, a great benefit to EU wind plants because it will reduce the relative cost advantage of EU fossil electricity.

This paper examines the Protocol’s prototype carbon emission reduction architectures (cap and control,cap and trade, carbon tax) to determine which architecture most efficiently reduces the EU power industry carbon emissions to their assigned amount (AAU). The paper then discusses which architecture causes the greatest reduction in the relative cost advantage of EU fossil electricity. The paper examines each architecture’s significant structural components (“the details”). Each architecture must have clearly defined penalties for non-attainment. This means that cap and command is the foundation on which the other architectures are constructed. For cap and command, the details are the setting up of a well organized efficient administrative structure. The cap and trade architecture is used by the EU in its ETS. The ETS details are auctioning verse assignment of carbon emission units (AAU), allowing ETS offsets (JI- ERU, CDM- CER,CDM additionality), banking, unit price limits and the setting up of a well organized and efficient commodity market to clear all AAU, ERU and CER trades.For the carbon tax, the details are the definition of the tax base (t_m-CO₂/t_m-fossil fuel vs. t_m-CO₂/MWh), the tax rate and the setting up of a well organized and efficient taxing authority. The result is a detailed comparison of the three architectures for use in the EU and a determination of which architecture gives the greatest reduction in EU fossil electricity’s cost advantage. The paper also examines the positive (Protocol is EU treaty) and negative (politics may not lead to a carbon minimizing architecture) consequences of the Protocol architecture having been chosen in the EU Annex I national capitals and in Brussels.

26. Stavy, Michael, Mandatory US Carbon Emissions Ceiling (Cap) Will Reduce the Cost Advantage of Fossil Electricity Over Wind Electricity, WINDPOWER 2008 Conference , 1-4 June, Houston, TX.

ABSTRACT –Burning fossil fuel (coal, natural gas, fuel oil) to generate electricity creates carbon. Wind generated electricity has no carbon emissions. Carbon missions are causing global warming. The implantation of a “Kyoto Protocol like” mandatory US carbon emission reduction program will reduce global warming by reducing US greenhouse gas (GHG) emissions.

A US carbon reduction program will add the cost of carbon emission controls to the cost of generating fossil fuel electricity. A mandatory US carbon reduction program is, therefore, a great benefit to the wind industry because it will reduce the relative cost advantage of fossil electricity.

This paper examines the potential US carbon emission reduction architectures (cap and control, cap and trade, carbon tax) to determine which architecture will cause the greatest reduction in the relative cost advantage that fossil electricity now has over wind electricity and which architecture has the greatest chance of being accepted in Washington. The paper examines each architecture’s significant structural components (the details). For the carbon tax, it is the definition of the tax base;t_m– CO₂/t_m-fossil fuel or t_m– CO₂/MWh. For cap and trade, the most popular architecture, they are auctioning verse the assignment of carbon emission units and banking. For cap and command, it is setting up of an efficient command structure.

The result is a“fact sheet” comparing the three emission control architectures and a determination of which architecture gives the greatest reduction in fossil fuel’s relative cost advantage. A mandatory US carbon emission reduction program increases wind electricity’s position. “

27. Stavy, Michael, The Use of the Kyoto Protocol and its Clean Development Mechanism (CDM) to Help Finance Wind Plants in Latin American Countries, 2008 Latin American Wind Energy Conference and Expo, 6 November, Guadalajara, MX

ABSTRACT–This presentation discusses the effect that the Kyoto Protocol and one of its development mechanisms, the Clean Development Mechanism (CDM), is having in financing Latin American wind plants during the Protocol’s first commitment period. The Kyoto Protocol was created to reduce global warming by reducing greenhouse gas (GHG)emissions. The Protocol measures GHG in metric tons (t_m) of carbon dioxide (CO₂), the major GHG. The Protocol sets the first commitment period (2008-2012) by which certain developed nations (Annex B) must reduce the amount of CO₂ that they can emit. The Latin American (LA) countries being non-Annex I (developing) countries are not required to reduce emissions in the first time period but may do so using the Protocol’s clean development mechanism (CDM).

The paper discusses the sections of the Protocol that could affect the cost of wind electricity in Latin American CDM projects. The paper is both global carbon cap and LA wind centric.Topics include the Protocol’s AAU and CER emission units, Protocol’s emission control architectures, international emissions trading, the European Union Emissions Trading Scheme (EU ETS), the CDM, CDM additionality, Annex B nations ’emission control architectures and their relationship to the CDM, the EU ETSCER linkage, the effect of the CDM on global carbon emissions, the market price of AAU (CER) emission allowances (€/CER; MX$/CER; US$/CER), the efficient market hypothesis (EMH) and the CDM’s reduction in the cost of Latin American wind electricity (€/MWh; MX$/MWh; US$/MWh). The CDM will make LA wind electricity cost more competitive with coal or gas plants that pay market prices for fossil fuel, but not with LA hydroelectric plants. Unfortunately the CDM has been used to finance the burning of NO_x and HFC instead of wind plants.

The paper concludes with two suggestions that will both reduce global carbon emissions and improve the relative cost of wind electricity in Latin America during the Kyoto-II commitment period. 1. Latin American Countries should improve their utility regulations to make them more wind friendly (i.e. a wind-feed-in tariff; a smart grid with hydro storage at existing dams; wind access to transmission). 2. “Kyoto-II” should define additionality more precisely and should list some LA countries in Annex B.

This presentation is the 5^th paper in the author’s series of papers/presentations on carbon caps and wind electricity. His first paper was presented at Wind Power 2000.

28. Stavy, Michael, A Mandatory US Federal Carbon Emissions Program (Kyoto-II) Will Reduce the Cost Advantage that Michigan Fossil Electricity has over Michigan Wind Electricity, 2009 Michigan Wind Conference, 3-4 March, Cobb Hall, Detroit, MI

ABSTRACT–Burning fossil fuel (coal, natural gas, fuel oil) to generate Michigan electricity creates greenhouse gas (GHG) emissions. Michigan wind generated electricity has no GHG emissions. GHG emissions are causing global warming. The Kyoto Protocol (Kyoto-I) was created to reduce global warming by reducing GHG emissions. The implementation of a Kyoto Protocol like mandatory US federal carbon emissions reduction program under President Obama’s new Administration (Kyoto-II) will reduce global warming by reducing US GHG emissions. Kyoto-I measures GHG in metric tons (t_m)of carbon dioxide (CO₂), the major GHG. The Protocol sets the first commitment period (2008-2012) by which certain signatory developed nations(Annex B) must reduce the amount o fCO₂ that they can emit. A mandatory US federal carbon reduction program will add the cost of carbon emission controls to the cost of generating fossil electricity. Kyoto-II is, therefore, a great benefit to the Michigan wind industry because it will reduce the relative cost advantage of Michigan fossil electricity. Protocol sections relevant to the US electricity utility industry are discussed. The paper is both US federal carbon cap and Michigan electric centric.

Topics include the Protocol’s AAU emission unit, Protocol’s three emission control architectures (cap and control, cap and trade, carbon tax), the European Union Emissions Trading Scheme (EU ETS), the effect of Kyoto-I on global carbon emissions, the current market price of AAU emission allowances (€/AAU; US$/AAU) and the reduction in the higher relative cost (theΔ) of wind electricity (€/MWh; US$/MWh) over fossil electricity. The three Protocol architectures are analyzed to determine which architecture will cause the greatest reduction in the relative cost advantage that fossil electricity now has and which architecture has the greatest chance of being accepted in Lansing/Obama’s Washington. The significant structural components of each architecture is examined. For the carbon tax, it is the definition of the tax base; t_m– CO₂/t_m-fossil fuel or t_m-CO₂/MWh. For cap and trade, the most popular architecture, it is auctioning verse the assignment of carbon emission units and banking. For cap and command, it is setting up of an efficient command structure. Kyoto-II will make wind electricity cost more competitive with coal or gas plants that pay market prices for fossil fuel. The presentation concludes with non-Protocol suggestions that will both reduce global carbon emissions and improve the relative cost of wind electricity in Michigan during the “Kyoto-II” commitment period. Michigan should improve its utility regulations to make the more wind friendly (i.e. a wind-feed-in tariff; a smart grid with hydro storage at existing dams; wind access to transmission on a non-discriminatory basis). 27 January 2009

27 January 2009

29. Stavy, Michael, The Effect that President Obama and the new Congress Will Have on the American WindMarket, 2009 European Wind Energy Conference, 16 – 19 March, Parc Chanot, Marseille, France

ABSTRACT–Wind is currently doing well in the US. The first 10 GW of wind was installed by mid 2006 [1]. By September 2008 the US exceeded 20 GW of wind. 20 GW, at an average capacity, is 1.5% of current US electrical generation (GWh).

A policy based expansion of the US wind market will continue to increase US windelectrical generation (GWh). One US Department of Energy forecast [2] is to have wind expand to 20% of US electrical generation(GWh) by 2030.

The American Recovery and Reinvestment Act of 2009 was signed into law in Denver, CO by President Obama [3] on February 17, 2009. This paper will discuss how this act will effect the US wind market.

The US energy policy drivers to expand the wind industry are:
1.  increasing US energy independence
2.  reducing the US effect on global climate change
3.  improving the US balance of trade
4.  expanding US industrial employment

The major wind friendly federal energy policies that the President Obama and the new Congress can use include:

an increased wind friendly federal control (verse state) of the electric industry
mandatory carbon emission caps on the electric industry
greater transmission access for wind, a smart national electric grid with energy storage (first hydro storage at existing dams)
feed-in-tariffs (invented in the USA)
renewable portfolio standard
federal production tax credits (PTC)
other federal tax incentives
regulatory directives and “incentives”
mandatory electric generation attribute disclosure

This presentation is the 8th paper in the author’s series of papers/presentations on carbon caps and wind electricity.His first paper [4] was presented at WindPower 2000.

FOOTNOTES

American Wind Energy Association Factsheets, “US Wind Energy Installations Top 20,000MW”, September, 2008
US Department of Energy, Energy Efficiency and Renewable Energy, “20% Wind Energy by 2030; Increasing Wind Energy’s Contribution to US Electric Supply”, July, 2008
New York Times On Line Edition, Obama Signs Stimulus Packed with Clean Energy Provisions, 17 February 2009
Stavy, Michael An Analysis of the Policies Required to Earn Carbon (CO₂) Emissions Credits When Generating Electricity at Wind Power Plants, American Wind Energy Association, Washington, DC, WINDPOWER 2000, Palm Springs, CA, 2 May

30. Stavy, Michael, The Effect that a US Signature on a Kyoto-II Climate Change Mitigation Treaty(or an Equivalent US Domestic Climate Mitigation Policy) will Have on the US Wind Industry, 2010 European Wind Energy Conference, 20-23 April, Warsaw, Poland

The Icelandic Volcano did not stop Michael. Click the Poster Presentations Link at the EWEC 2010 website https://tinyurl.com/ltowa56 Michael’s paper is PO #40. It is listed in the Poster Topic: “Carbon Prices, Emissions Trading other climate Change Policies and Investment Decisions”.

ABSTRACT–Expanding US industrial employment and a US climate change (carbon) mitigation scheme under the Copenhagen Protocol are the two major drivers that will expand the US wind industry. Increasing national energy security and reducing the US balance of trade deficit are not major wind industry drivers because very little oil is used to fuel US power plants. At the time that this abstract was written, both the Copenhagen Protocol design and the US carbon mitigation scheme architecture under the Copenhagen Protocol were not known. The paper will be written when the Copenhagen Protocol design and the US carbon mitigation scheme architecture become known.

First, this paper presents an overview of the Copenhagen Protocol. The author expects that the Copenhagen Protocol will have a global carbon cap (ceiling), assigned national caps, base year from which emission reductions are measured, compliance year by which the emission reduction cap must be reached, timetables, monitoring, verification and compliance procedures and country lists (Annex I, non-Annex I, Annex B) to differentiate the treaty obligations of different countries under the Protocol.

Second, the paper describes the US climate change mitigation scheme. The author expects that the US carbon mitigation scheme will use the cap and trade emission control architecture. The architectural details include a standard emission allowance, offsets, carbon market organization, base year, compliance year, US national cap, economic sector caps, emitter compliance procedures and the initial allocation mechanism for allowances.

Third, the paper concludes that the US cap and trade scheme expands the wind industry because it will reduce the relative cost advantage of fossil electricity. The author expects that this cost reduction will not be adequate to enable the wind industry to expand enough to reduce the US gird’s carbon content down to its assigned cap and to sufficiently expand US industrial employment. Until 2009,the US wind industry was doing quite well in the US. In 2009 the effects of the Great Recession hit the wind industry.

In his EWEC 2008 paper (#25 above), the author forecast that 2009 new installed capacity will be 28% less than 2008. The US cap and trade scheme will require additional US power industry policies. The author suggests that these additional policies include greater transmission access for wind, a smart national electric grid with energy storage, a wind friendly grid operator,feed-in-tariffs, a 20% by 2030 federal renewable electricity standard (RES) and US tax incentives. 08 March 2010

31. Stavy, Michael, The Increase in Global Solar Power Caused by Extending the Kyoto Protocol Until 2030, Solar Power International 2013, 21-23 October, Chicago, IL USA

ABSTRACT--The Kyoto Protocol, a treaty between nations, was created to reduce global warming by reducing carbon emissions. Fossil electric generation emits carbon. Solar electricity does not. There is a cost to reduce carbon emissions. A Protocol carbon cap expands solar power capacity by reducing fossil electricity’s cost advantage. During the first commitment period, the US was not a signatory and the BMIIC nations (Brazil, Mexico, India, Indonesia and China) were not capped.Because it was not extended with a second commitment (2013-2017) period, the Protocol ended on 12/31/12.

This paper presents the counterfactual case that the US becomes a second period signatory at 2015 COP 21 in Paris and that the Protocol is extended. All first period signatories sign up again. The BMIIC agree to be on a new Annex II. South Korea and South Africa are on Annex II. Non-Annex nations remain uncapped. At COP 21, the Protocol is coordinated with the WTO. The WTO now allows for carbon taxes on imports. Carbon has no place to go. 1990 remains the base year. 385 ppm becomes the third period carbon cap.Cap reporting and verifying are strengthened. Current emission control architectures remain. Carbon becomes a global commodity.

The counterfactual case presented requires US grid electricity to be much less carbon intensive and reduces the cost advantage of fossil over solar electricity. Because the US will now be a signatory to the Protocol, US carbon markets, EPA and FERC regulationsnow assure that US solar power capacity is greatly expanded.

32. Stavy, Michael, A Financial Algorithm for Computing the Levelized Cost of Storing Solar (PV) Electricity (LCOS), Solar Power International 2017 (SPI-17), 10-13 September, Las Vegas

What goes on in Vegas stays in Vegas except that Michael’s hope that his SPI-17 Energy Storage Paper does not stay in Vegas. You can ask for a copy of his paper even if you do live in Vegas! It is FREE.

Abstract—This paper discusses the financial and technical principles underlying the levelized cost method of computing the cost of storing solar (PV) electricity (LCOS). The paper presents a levelized cost (LC) algorithm. The algorithm uses nine recognized energy storage system (EES) specifications to compute the levelized cost of the stored electricity. The algorithm equations are presented.Published ESS specifications are cited. For rapid computation, a worksheet is provided. The goal of this paper is to present a standard computational algorithm for financial analysts to use. A financial analyst can do a levelized cost computation based on paper’s LC algorithm and on the algorithm’s nine ESS specifications. The paper’s algorithm gives the analyst who has an ESS specifications, a quick “back of the envelope” verification of a developer’s(utility-scale), manufacturer’s (C & I; residential), or researcher’s(prototype) value for the cost (US$/MWh; €/MWh) of energy storage. This paper also has a case study that demonstrates how to obtain/develop the nine ESS specs. Published specs for the Eos Aurora® (a utility-scale [1 MW│ 4 MWh] DC battery ESS manufactured by Eos Energy Storage) and Cabin Creek(a utility-scale [300 MW │ 1,450 MWh] Pumped Hydro ESS in Clear Creek County, CO owned by Xcel Energy) are used in the case study. Because the ESSCapEx is a required spec, the LC algorithm can also be the basis for an ESS financial (forensic) valuation. A second paper will compute the LC of using anESS to provide ancillary services (frequency and voltage stabilization plus VARS). A Poster handout was provided. The paper has now been revised (Version 2.00) to take into account the suggestions of the SPI-17 attendees.

Michael is not new to the technology and finances of energy storage! He has 14 years of experience. His first energy storage paper was, Financial Worksheet for Computing the Levelized Cost of Wind Electricity(US$/MWh; €/MWh) Stored in a Hydrogen Energy Storage System, WindPower 2003, 18-21 May, Austin. TX. He presented a European version of my paper at the International Solar Energy Society’s SolarWorld 2003, 14-19 June, Göteborg, Sweden (The European version was not that hard to write as the rules of physics and chemistry are the same in Europe as they are in the US).

33. Stavy, Michael, A Financial Algorithm for Computing the Levelized Cost (US$/MWh; €/MWh) of Storing Wind Electricity (LCOS), WindPower 2018, 7-10 May, Chicago

ABSTRACT–This paper discusses the financial and technical principles underlying the levelized cost (LC) method of computing the cost of storing wind electricity (LCOS). The paper presents a CL algorithm. The algorithm equations are presented. The algorithm uses nine recognized energy storage system (ESS)specifications (specs) to compute the levelized cost of the stored Wind electricity. Published specs for the Eos Aurora® and Cabin Creek Pumped Storage ESS are used in case studies to demonstrate the algorithm. Other case studies are provided. For rapid computation, an Excel worksheet is provided. The goal of this paper is to present a standard computational algorithm for financial analysts to use. A financial analyst can do a LC computation based on the paper’s LCOS algorithm and on the algorithm’s nine ESS specs. The paper’s LCOS algorithm gives the analyst who has the nine ESS spec values, a quick “back of the envelope” verification of a developer’s (utility-scale), manufacturer’s (C& I; residential), or researcher’s (prototype) value for the levelized cost($/MWh; €/MWh) of the stored electricity (LCOS).

34. Stavy, Michael, A Financial Algorithm for Computing the Levelized Cost (US$/MWh; €/MWh) of the Bulk Storage of Wind Electricity (LCOS), WindEurope 2018 Conference, 25-28 September, Hamburg, Germany.

This link will take you to Michael’s WindEurope BIO: https://tinyurl.com/y9d6puss

ABSTRACT—this paper discusses the financial and technical principles underlying the levelized cost (LC) method of computing the cost (US$/MWh; €/MWh) of storing wind electricity (LCOS) in bulk. The paper presents a CL algorithm. The algorithm equations are presented. The algorithm uses nine recognized energy storage system (ESS) specifications (specs) t compute the levelized cost of the stored wind electricity. Published spec values for the Eos Aurora® ESS and for the Cabin Creek Pumped Hydro Storage Plant are used in case studies to demonstrate the algorithm.Other examples are provided. An addendum case study for the proposed San Vincent Pumped Storage Plant is also presented. For rapid computation, an Excelworksheet of the LC algorithm is presented. The goal of this paper is to present a standard computational algorithm for financial analysts to use. A financial analyst can do a LC computation based on the paper’s LCOS algorithm and on the algorithm’s nine ESS specs. The paper’s LCOS algorithm gives the analyst who has the nine ESS spec values, a quick “back of the envelope”verification of a developer’s value for the levelized cost of bulk stored wind electricity. A complication arises in using this paper’s LC algorithm. The complication is that “published ESS spec values” are limited and that internalspec values must be confirmed.

This link will take you to Michael’s video of a wind turbine in Hamburg Harbor. He took this video while he was at WindEurope 2018 . https://tinyurl.com/y6u4ywd5

35. Is Hydrogen Energy Storage Ready for Prime Time on the European Grid?, WindEurope 2019, 2-4 April, Bilbao, Spain

Abstract—A bulk energy storage plant can be used on the European (North American) electric grid for ancillary services, diurnal, weekly or seasonal wind energy storage.

The goal of this WindEurope-19 (WEU-19) paper is to determine whether hydrogen (H2) energy storage is ready for prime time on the European (North American) grid.

To determine this, the author developed a hydrogen storage plant (HSP) levelized cost of storage (LCOS) Financial Algorithm. This paper discusses the hydrogen storage (HS) technology, focusing on the three phases of all HSP; one, the production of the hydrogen, two, the storage of the hydrogen, and three, the use of stored hydrogen as the fuel to regenerate electricity.

The WEU-19 HSP LCOS Algorithm uses “project accounting” to compute separate a LCOS for each HSP phase; charging, storage and discharging. To compute the LCOS, the author’s WEU-19 HSP LCOS Algorithm requires 22 energy storage plant (ESP) specifications (specs; metrics).

These 22 HSP specs (metrics) are defined with a set of standard H2 units.

Based on the author’s computed LCOS values and the inability to locate in the literature, any actual bulk HSP on the European (North American) grid, the author’s conclusion is NO, H2 energy storage is not yet ready for prime time on the European (American) grid.

This paper is based on the author’s eight published paper’s on the finances of hydrogen energy storage, his three paper’s on the carbon content of hydrogen, his two papers on the cost of producing hydrogen by electrolysis and his one paper on the cost of electricity generated by a hydrogen powered fuel cell.

36. Is Hydrogen Energy Storage Ready for Prime Time on the North American Grid?, WindPower 2019, 20-23 May, Houston, TX

ABSTRACT–A bulk electric energy storage plant can be used on the North American electric grid for the daily, weekly or seasonal storage of wind electricity (energy) and/or to provide ancillary services. The goal of this paper is to determine whether hydrogen (H2) energy storage is ready for prime time on the North American grid.

To determine this, the author has developed a H2 storage plant (HSP) levelized cost of storage (LCOS) financial algorithm for a model HSP. This LCOS algorithm is used for sensitivity analysis and to confirm published HSP specifications (specs). This paper discusses H2 storage (HS) technology, focusing on the three phases of all HSP; one, the production of the H2 from wind electricity, two, the storage of the H2, three, the use of the stored H2 as the fuel to regenerate the wind electricity. The LCOS Algorithm uses “project accounting” to compute a separate LCOS for each HSP phase; charging, storage and discharging. To compute the LCOS, the paper’s HSP LCOS Algorithm requires 22 HSP specifications (specs) [metrics]. These 22 HSP specs (metrics) [independent variables] are defined using a standard set of H2 SI units.

Based on the author’s computed LCOS values and the inability to locate in the literature, any actual bulk HSP on the North American grid, the author’s conclusion is NO, H2 energy storage for wind is not yet ready for prime time on the North American grid.

37. Is Hydrogen Energy Storage Ready for Prime Time on the North American Grid? Solar Power International 2019, 23-26 September, Salt Lake City, UT

ABSTRACT–A bulk electric energy storage plant can be used on the North American electric grid for the daily, weekly or seasonal storage of solar electricity (energy) and/or to provide ancillary services. The goal of this paper is to determine whether hydrogen (H2) energy storage is ready for prime time on the North American grid.

To determine this, the author has developed a H2 storage plant (HSP) levelized cost of storage (LCOS) financial algorithm for a model HSP. This LCOS algorithm is used for sensitivity analysis and to confirm published HSP specifications (specs). This paper discusses H2 storage (HS) technology, focusing on the three phases of all HSP; one, the production of the H2 from solar electricity, two, the storage of the H2, three, the use of the stored H2 as the fuel to regenerate the solar electricity. The LCOS Algorithm uses “project accounting” to compute a separate LCOS for each HSP phase; charging, storage and discharging. To compute the LCOS, the paper’s HSP LCOS Algorithm requires 22 HSP specifications (specs) [metrics]. These 22 HSP specs (metrics) [independent variables] are defined using a standard set of H2 SI units.

Based on the author’s computed LCOS values and the inability to locate in the literature, any actual bulk HSP on the North American grid, the author’s conclusion is NO, H2 energy storage for solar is not yet ready for prime time on the North American grid.

Now that you know about Michael’s Solar Power International 2019 Paper, it is a good time to schedule an appointment with Michael. Call Michael at 312-523-8328.

**Solar Power and Storage Northeast 2020**

38. A Financial Algorithm for Computing the Levelized Cost (US$/MWh) of the bulk Storage of Solar (Wind) Energy (LCOS); An Algorithm for Bankers and Investors, Solar Power and Storage Northeast 2020, 19-20 February, Boston, MA USA

ABSTRACT–this paper discusses the financial and technical principles underlying the levelized cost (LC) method of computing the cost (US$/MWh; €/MWh) of the bulk storage of solar (wind) electricity (LCOS). The paper presents a LC financial algorithm. The algorithm equations are presented. A glossary is presented. For rapid computation, an Excel LC Financial Algorithm Workbook is presented. The financial algorithm uses nine recognized energy storage plant (ESP) specifications (specs) to compute the levelized cost of the stored solar (wind) electricity. Published (assembled) spec values for the proposed Highview/Encore Liquid Air Energy Storage (LAES) Plant (Vermont), for the upcoming Tesla Moss Landing Li-ion Battery ESP (California) and the actual Cabin Creek Pumped Hydro Energy Storage Plant (Colorado) are used as case studies to demonstrate the algorithm. The emphasis in this paper is on cost; not revenue. Revenue is discussed when reconciling the LCOS with GAAP accounting. The goal of this paper is to present a standard computational financial algorithm for bankers and investors to use. Bankers (investors, financial analyst’s) can do a LC computation based on the paper’s LCOS algorithm and on the algorithm’s nine required ESP specs. The paper’s LCOS algorithm gives the reader who has the nine ESP spec values, a quick “back of the envelope” verification of a developer’s (manufacturer’s; promoter’s) value for their EPS’ LCOS. A complication arises in using this paper’s LC algorithm. The complication is that “published ESP spec values” are limited and that developers (manufacture’s, promoter’s) spec values must be confirmed by the banker (investor, financial analyst) using this paper’s Excel LC Algorithm Workbook to compute the ESP LCOS. The paper has three case studies which discuss how to assemble the nine specs for an ESP when the specs are not all publicly available. In finance, having good numbers is always a challenge.

39. Is Wind “Power to Gas” Ready for Prime Time on the North American Grid? CLEANPOWER 2020, 1-4 June, Denver, CO

ABSTRACT–

The reader will learn if wind power to gas (WP2G) is ready for prime time on the North American (NA) electric and natural gas (NG) grids. The paper discusses the two phases of a model wind power to gas plant (WP2GP). First, wind power (electricity) from the grid is converted into hydrogen (H2) gas using a H2 electrolyzer (HE). Second, a Sabatier reactor (SR) is used to convert the H2 into synthetic NG [methane (CH4)]. The synthetic NG is then injected into the grid. The paper discusses both the HE and SR technologies.
The author developed a levelized cost of gas (LCOG) financial algorithm for a model WP2GP. The LC financial principles are discussed. The LCOG Algorithm uses “project accounting” to compute a separate LCOG for both WP2GP operating phases. This LCOG algorithm is used for sensitivity analysis and to confirm published WP2GP specifications (specs).

To compute the LCOG, the financial algorithm requires 18 (subject to revision) WP2GP specs [metrics]. The algorithm 18 (subject to revision) WP2GP specs (independent variables) and 30 (subject to revision) dependent variables are defined using U.S. “English” units. The H2 industry practice is to measure H2 production in Kg-H2 (Nm^3-H2) and to price H2 in US$/Kg-H2 (US$/Nm^3-H2). The North American NG industry practice is to measure NG production in ft^3 and to price NG in US$/mmBtu. For this presentation, both H2 and NG production (mmBtu-H2; mmBtu-NG) and price (US$/mmBtu-H2; US$/mmBtu-NG) are measured in mmBtu.

The author did sensitivity analysis. He found that low round trip WP2GP efficiency (η) and high WP2GP CapEx do not allow a WP2GP to operate commercially in North America. The cost of capital was not a factor. The computed HE H2 LCOG is greater than the current price of NG at the Henry Hub (NYMEX). Using this H2 as feed stock for the SR phase would produce an even higher LCOG for synthetic NG.

Abstract 40 and beyond are on the next menu item called Abstract 40 and Beyond

Category: Michael’s Abstracts 1-38

ABSTRACTS–Michael’s Published Papers 1-38