Cleantech

Most Americans now agree that something needs to be done to reduce our greenhouse gas emissions. Hopefully most Americans now appreciate that this is not a small, but even more so, not a simple problem. I am a big believer that the playing field for our low carbon future should start level, and the market should be structured to allow our major power and energy companies a chance to lead the way, instead of simply dishing out punishment for our combined historical choices. Carrots and sticks work well together, but sticks alone are not going to solve our global carbon problem. I think it is also important to ensure that our carbon legislation does not result in a higher cost to consumers in middle America, just because the Midwest happens to have been historically coal fired, than the cost to those of us living on the coasts. Jim Rogers of Duke Energy puts this much more eloquently than I do.

Duke Energy (NYSE:DUK), one of the largest power companies in the U.S., has been a long supporter of energy efficiency, and known for being forward looking when it comes to a low carbon future, smart metering, and advanced energy technologies, despite having a generation fleet that is 70 percent coal fired. Cleantech Blog is delighted to welcome Jim Rogers, CEO of Duke Energy, to give us his thoughts on the devil in the details from their perspective. It is heartening to see a major power company take on the carbon issue full force, and like Duke has done, push energy efficiency in a big way.

- Neal Dikeman, Cleantechblog.com

By Jim Rogers Chairman, President and CEO of Duke Energy

As we debate our differences on how to address the challenge of global climate change, surely we can agree on the end-goal--a secure, sustainable and affordable supply of energy now, and for future generations.

Most Americans also agree that we must act now--and begin building a bridge to an energy-efficient, low-carbon economy.

As the third-largest coal consumer in the United States, and one of the largest greenhouse-gas emitters, Duke Energy has a responsibility to be part of the solution. That means looking at not only how climate change affects our business today, but also the implications for the future.

We support federal legislation to address global climate change by putting a cap-and-trade system in place. The U.S. Senate is in the process of vetting a cap-and-trade bill introduced by Senators Lieberman and Warner in October. This bill is well-intended, contains some good points, and appears to have bipartisan support.

But on closer examination, questions arise. Who really stands to gain, and who stands to lose? What are the real costs to average Americans?

You would expect the bridge to a low-carbon economy to have a cost, just as you might pay a toll to cross any bridge. But should some of us have to pay twice? With the Lieberman/Warner approach, that's exactly what would happen.

Lieberman/Warner proposes to auction a large number of emissions allowances to the highest bidder. In effect, an auction becomes a carbon tax, levied on consumers in the 25 states that depend on coal for electric power--primarily the Midwest, the Great Plains, and the Southeast.

Electric power customers in those regions would have to pay for the auctioned allowances upfront, and then pay again later to upgrade power plants, or build new ones, as carbon-control technologies become available.

A better approach is to allocate allowances at no cost to generators who emit greenhouse gases--and reduce the number of allowances over time, while new carbon-control technologies are being developed and put in place.

Some say that an auction is the only way to take action to reduce emissions, but history tells us otherwise. Allowances were not auctioned under the 1990 Clean Air Act Amendments; nearly 97 percent of them were allocated at no cost. Since then, new technologies to reduce sulfur dioxide and nitrogen oxide emissions have been developed and implemented. Those environmental controls have reduced emissions by more than 40 percent since 1990, and they continue to decrease, without dramatic rate hikes. In fact, the nation's average electric rates have declined.

In contrast, some estimates put the Lieberman/Warner bill's cost to the average family at more than $1,000 per year, while emissions traders would stand to profit greatly from a volatile market for carbon allowances. According to Bloomberg, the Lieberman/Warner bill would create a potential $300 billion annual carbon-trading market by 2020.

So the question comes down to this--are we interested in protecting consumers or enriching emissions traders?

Customers who live in the Midwest, the Great Plains, and the Southeast did not choose to get a large portion of their electricity from coal--it was a matter of economics, geography, and geology. They should not be punished for decisions made decades ago, in good faith, using the best and lowest-cost technology of the time, with regulatory approval--and long before anyone knew about the impact of carbon emissions on climate change.

And before we dismiss coal as a viable energy source for the future, consider this: The U.S. is sitting on more than 250 years of coal reserves, more than any other nation in the world. This rich natural resource has untapped potential for ensuring our country's energy security. The challenge is primarily technological--to find smarter and cleaner ways to use it, such as carbon capture and storage. Until those technologies are available, we must continue to use our existing coal resources and protect the interests of consumers who rely on coal.

The goal for carbon legislation should not be to punish utilities for building coal plants to keep the lights on in the past. It should be to create the incentives to put new clean technologies in place for the future--not just clean coal, but also nuclear and renewable energy, natural gas and the fifth fuel--energy efficiency.

Under the Lieberman/Warner approach, electric power customers in half of our states will carry a disproportionate share of the burden. We need to pass climate legislation that is fair to all consumers and protects the economic interests of all states and regions. Our climate is at stake, and so is our economy. By allocating most allowances, following the precedent set by the successful Clean Air Act, we believe both can be protected.

Jim Rogers is the CEO of Duke Energy, writing as a guest columnist on the Cleantech Blog.

Is Microsoft Vista global warming friendly? Could Vista be the best-selling clean-tech product in the world? I was thinking about this question the other day, and started e-mailing the Microsoft press relations folks looking for an answer.

The Microsoft answer--yes, it is. They have a recent release titled "Windows Vista Power Management Features Can Help U.K. Companies Reduce Their Carbon Footprint" on some independent research they had done by PC Pro Labs in the U.K.

Here's their quote:

"Windows Vista is Microsoft's most energy efficient operating system to date with its power management system, functionality, reliability and default settings focused on helping to reduce overall PC energy consumption. The key areas where the Sleep mode in Windows Vista has been improved compared to the equivalent Standby mode in Windows XP include:

• Enter Sleep mode after being inactive for 60 minutes
• In Windows Vista, it is much easier for users to change the power management settings themselves
• The Sleep mode is more reliable than Windows XP's Standby mode, both in terms of entering the mode and safely resuming back into Windows
• Windows Vista is much quicker at resuming from Sleep, now taking two to three seconds compared to five seconds for Windows XP."

They also published a white paper titled "Windows Vista Energy Conservation". Reading through it all, Vista does seem to be an energy efficiency masterpiece.

But I wonder--the description of these tests seemed to quite fairly compare the XP and Vista operating systems running through a series of different scenarios--but it's not a survey of real world conditions.

So I'm probably convinced that if you run the same computer post-Vista the exact same way you ran it on XP, that you'd use less power. Vista itself may actually be the best-selling clean-tech product in the world. But in the real world, we don't work that way. Each year we add a whole lot of new features and programs that suck down power, and buy more powerful PCs to run them on with every upgrade. And part of the promise of Vista is to enable even more such goodies--possibly offsetting the energy savings.

So are Windows users who have upgraded to Vista running the same programs in the same way, and the same (or more energy efficient PCs) and therefore using less power? Or are they actually using more or different features, or on a more powerful energy hog PC, and despite Microsoft's energy efficiency efforts, using more power on a daily basis anyway after the upgrade? That might not be something Microsoft could control--but I'm sure curious as to the answer from a carbon standpoint.

As a matter of full disclosure, I run XP at the office, Vista at home, own a small amount of Microsoft stock (and am a very big fan) and have a very bad habit of leaving my computer and monitor on--but I'm working on that.

It's been said before, but can't be said enough. This is not a technology problem. When it comes to fighting global warming, it's the little things we do that will make the difference.

The average American consumer is responsible for about 9-10 tons of carbon emissions per year.

The big three culprits for us consumers: 1) Car miles driven and car size; 2) Power used; 3) Airline miles flown

Here are my favorite little things:

1) When you have the option, drive the family car with the best gas mileage and drive together--no more three-car families driving to church in three separate cars. And my favorite, which I will harp on until the consumer gets it: when you buy that next car, don't worry about the hybrid or no-hybrid decision, just buy one size smaller than you were planning. It IS all about the size.

2) Look to your AC and heating bill--whether it's electric or gas, this is a biggie. Shorter (or colder) showers, adjusting the thermostat (or off during the day while you're gone), washing half your laundry in cold water, and for the love of grief, close the blinds during the day in the summer, and open them in the winter. We can make a difference.

The general rule of thumb is that if you just pay attention to your power bills, you can make small changes that save 10-20 percent.

And 3) When planning who's going where for Christmas and vacation, we now generally factor in price. Why not compare all the trips on carbon, too? Shorter is better, and the fewer of us who have to travel, the better off the planet is.

So why not do it? It's not just energy bills anymore; now it's all about the carbon.

Where in the world is the global warming solution? Well, as usual, it still rests with us, the consumer.

When we care enough to vote with our ballot AND our wallet, industry and government follow.

Food for thought:

On us -

Cars - I live in the San Francisco Bay Area, and we have oodles of pretty hybrids on the road. But the payback on a hybrid is about 9 to 11 years for the average diver (longer than the automakers say the "rated life" of the car is). Not a pretty picture. But if we all simply bought our next car 1 car size smaller (a Civic instead of an Accord) - we'd save thousands up front AND hundreds per year on our gas bill. Which sounds smarter and greener?

Houses - It's 90 degrees outside today. I came home at 4 pm. I had mistakenly left all my curtains open. The house was 92 F. I promptly closed them - and have been running my AC for the last hour and half, just to knock 8 degrees off in one room. Generally 10-20% of our utility bill can be cut, not by technology, but just by paying attention. Are we?

On industry -

- Pepsi just recently announced they were taking their US operations green and carbon free - and bought enough green power to back that up.

- General Motors is in the process of rolling out a hybrid version of every Saturn make they have.

- Dell has launched a campaign to let consumers plant a tree to offset the carbon emissions from a computer they buy.

- BP, one of the world's largest energy companies, had a higher market share in world solar production than it does in world oil production.

Why? Because they think we, their customer, cares.

Global warming solutions are not an area where our traditional environmental model - having regulators beat up on companies whom we blame for selling us the products we ask for - will work. We as consumers need to be a part of this solution. Stop complaining it's industry's fault. It's not. Vote with your wallets, and your feet.

Next week, why China and the US hold the future of global warming in our hands.