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Tue, Oct 16, 2007
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China, India Biofuels Could Threaten Food Output
Easing Hurdles for Hydrogen Cars
Malaysia: Subsidized Gas for Private Power
North Sea to Get 200 Wind Turbines
Ethanol Rush May Harm US Water Supplies

China, India Biofuels Could Threaten Food Output
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China and India might ease the projected water shortages by developing new biofuel technologies
or boosting rain-fed crops such as sweet sorghum.
Plans by China and India to raise biofuels production from irrigated maize and sugarcane could aggravate water shortages and undermine food output, an international report said on Oct. 12.
According to ENN.com, the two countries, the most populous on the planet, might ease the projected water shortages by developing new biofuel technologies or boosting rain-fed crops such as sweet sorghum, the International Water Management Institute (IWMI) said.
“China and India, the world’s two largest producers and consumers of many agricultural commodities, already face severe water limitations in agricultural production,“ the Colombo-based scientific research group said.
“Domestic production of biofuels derived from crops will put greater stress on these countries’ water supplies, seriously undermining their ability to meet future food and feed demands,“ it added.
It said China aimed to quadruple biofuel output to around 15 billion liters (3.30 billion Imp gallons) by 2020, or 9 percent of the nation’s gasoline demand. To achieve that goal, China would have to raise maize output by 26 percent, it said.
India was reviewing similar biofuel targets to help offset global warming, widely blamed on greenhouse gases released by burning fossil fuels such as oil and coal, and raise domestic energy output. That would mean far more sugarcane plantings.
“They have to scale down considerably,“ said Charlotte de Fraiture, an IWMI scientist and lead author of the study. She gave some preliminary findings at a Stockholm conference in August.
The report did not take account of climate change that could disrupt rainfall and flows in many Asian rivers linked to a projected melting of Himalayan glaciers.
Alternatives to irrigated maize and sugarcane included developing new technologies that would exploit enzymes to break down cellulose, the woody walls of plants, into biofuels.
In the shorter term, nations could also exploit dry land rain-fed crops such as sweet sorghum, Jatropha or Pongamia. That could help small-scale farmers and curb rural poverty.
The report said that it took 2,400 liters of irrigation water to produce one liter of ethanol from maize in China. For the same amount of ethanol from Indian sugarcane, 3,500 liters of water was needed.
By contrast, it took just 90 liters of irrigation water to produce a liter of ethanol in Brazil from mainly rain-fed sugarcane.
Outside India and China, the study said that biofuels would only have a “modest impact“ on water use and food systems around the world. Biofuels now account for only about 2 percent of annual gasoline output.
De Fraiture said that more biofuels could be produced in large parts of Latin America and Africa, for instance, without stoking water shortages.

Easing Hurdles for Hydrogen Cars
Hydrogen-powered cars will be cleared for sale in a uniform way throughout the European Union under new rules proposed by the European Commission on Oct. 12.
The EU executive also announced it would help fund a program of hydrogen research and development called the Fuel Cells and Hydrogen Joint Technology Initiative with 470 million euros ($664 million) over six years, a sum that would be matched by European industry, Reuters said.
It said the program would “accelerate the development of hydrogen technologies to the point of commercial take-off between 2010 and 2020.“
But the Greens party in the European Parliament said the Commission was wasting its time as the technology would not be viable any time soon.
The Commission said hydrogen cars that are ready for the market should be included in the EU’s “type approval“ system, which determines whether vehicles meet required standards.
The move would simplify approval for hydrogen vehicles and ensure uniform standards were in place throughout the 27-nation bloc, the Commission said.
The proposals require approval from the European Parliament and EU governments before they can enter force.
Industry Commissioner Guenter Verheugen told reporters he did not expect to see many hydrogen cars on European roads in the next ten years, but said petrol-powered vehicles would someday be replaced by models with fewer polluting emissions.
“The car of the future will be different from what we know today. It will not be driven by petrol or diesel,“ he said.
The Commission is expected to unveil legislation later this year laying out how car companies must reduce emissions of greenhouse gas carbon dioxide (CO2).
The rules will require average CO2 emissions from new cars across the European fleet to come in at 120 grams per km by 2012.
Verheugen said that if the rules were designed to set limits based on an average of individual car makers’ fleet emissions, then having clean hydrogen vehicles would be an advantage to producers.
The Greens party was not convinced.
“It is regrettable that the European Commission is still wasting time flogging the dead horse of hydrogen cars when even the car industry itself has abandoned the dream that the technology will be viable in the near future,“ Claude Turmes, a Greens party member, said in a statement.
“There are clear solutions to the environmental damage caused by vehicle emissions that will deliver real results in the short-term.“

Malaysia: Subsidized Gas for Private Power
A staggering 27.6 billion ringgit (8.2 billion US dollars); that’s the amount the Malaysian public has incurred through gas subsidies given out over the years to private power producers by national petroleum corporation Petronas.
With oil and gas prices now soaring, the government--and Petronas--is feeling the pinch of higher fuel and gas subsidies. Petronas has proposed a removal of gas subsidies for electricity production, but much of the attention has focused on the impact it would have on state power firm Tenaga Nasional Berhad, IPSNews.net said.
Tenaga faces a double whammy: from higher gas prices and from higher fuel costs being passed on to it by the privately owned, and from hugely profitable, independent power producers (IPPs). The IPPs sell power to Tenaga under lucrative power purchase agreements (PPAs). Tenaga also generates its own electricity through its network of power plants.
The earliest of these lopsided agreements were signed with well connected firms in the early 1990s under the administration of then premier Mahathir Mohamad. They have about eight years left to run.
The power sector is the biggest consumer of gas in the country consuming 62.5 percent of gas distributed. For the financial year 2007, Petronas supplied 762 million standard cubic feet per day (or 36 percent) of subsidized gas to the IPPs out of a total of 2,128 mscfpd of gas delivered. In contrast, Tenaga received just 27 percent of total deliveries.
Petronas sells gas to Tenaga and the IPPs at 6.40 ringgit (1.90 dollars) per million British thermal units (Btu) whereas the current market price is around seven dollars per million Btu. That’s a 70 percent subsidy.
Since 1997, out of 58.2 billion ringgit (17.2 billion dollars) that Petronas has dished out in gas subsidies, 27.6 billion ringgit or 47 percent has benefited the IPPs, 21.2 billion ringgit (6.2 billion dollars) has gone to Tenaga, while small industrial, commercial and residential users received 9.4 billion (2.8 billion dollars). IPPs have thus benefited more from subsidized gas than Tenaga has.
That’s not all. Tenaga is forced to buy electricity from the private producers under terms widely seen as favorable to the IPPs--even though the country has a 40 percent spare capacity out of a total 19,000-megawatt generating capacity. In effect, Tenaga, which needs a reserve of only 15-20 percent, has to buy electricity it does not need, reportedly paying 3 billion ringgit annually in capacity charges.
The IPPs thus win both ways, leaving TNB squeezed in the middle, with extra costs eventually passed on to consumers. Over the years, the IPPs, especially the earlier ones, have collectively raked in billions of ringgit in profit--higher than initially anticipated.
When the first generation of IPPs came online, Tenaga’s profits plunged by 30 percent in 1995. “When the generous terms were given to the IPPs, all my other peers around the world asked what was happening,“ former TNB executive chairman Ani Arope told the media last year. “They said (the contracts to IPPs) were ’too darn generous’. (The terms) were grossly one sided.“
Some of the earliest power purchase agreements are due to expire in 2015, but reports have suggested that these could be extended by perhaps five years in exchange for lower capacity payments for the IPPs’ older plants.
“The IPPs are getting high returns for very little risks,“ says economist Subramanian Pillay, pointing out there were no open tenders for these plants. Moreover, he said the loans they obtained were indirectly guaranteed by the government through the capacity payments that Tenaga has had to pay. A couple of the IPPs plants were even built on sites that Tenaga had identified and done the ground work for, “but for mysterious reasons they were offered to IPPs,“ he claimed.
As a result of the lucrative PPAs, “the IPPs would continue to enjoy the subsidised gas price as it is shielded from any increase in fuel cost through the pass-through clauses in the agreement signed with Tenaga,“ noted Azam Aris, group executive editor of The Edge business weekly in a commentary published last month. “Subsidies, for all their good intention, will only be meaningful if they are targeted at those who need them, notably the low-income group.“
He said Petronas would not have minded providing subsidy to a government firm such as Tenaga Nasional, but the gas subsidy has gone to privately owned IPPs, “most of which belong to billionaires in this country“.

North Sea to Get 200 Wind Turbines
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Offshore wind farms cost more to build than onshore wind farms but produce more electricity because they usually stand in open, windier spots.
Engineers last week unveiled the largest wind turbines ever connected to the UK national grid: two massive generators that tower 300ft over the North Sea 15 miles from the Scottish coast. Now the project’s backers say they are preparing plans to construct 200 of these huge turbines, creating a gigantic wind farm with the capacity to provide power for an entire city.
Both the devices erected in water 150ft deep in the Beatrice oil field are fitted with three 200ft blades and can generate 5 megawatts of power, enough to supply a village with electricity, Guardian reported.
“We have shown this deep-water wind technology works, that it could be made to operate economically, and that it could be used to generate a significant amount of power far from shore and shipping lanes,“ said Allan MacAskill, director of the Beatrice Wind Farm Project.
The project--backed by Scottish and Southern Energy and Canadian oil exploration company Talisman--has pushed wind technology to its limits. Designing the huge lattice jackets on which the turbines stand, and fastening these to the ocean floor, provided engineers with major headaches that took months to overcome.
“The turbines are German but the technology involved in fastening them to the sea bed, and making them work in deep water, comes from Scottish expertise gained from its North Sea oil work,“ said Paul O’Brien, a renewable energy expert with Scottish Development International. “We are good at putting things in the water and keeping them there.“
Developing wind farms far offshore may prove crucial in helping Britain cut its carbon emissions, as onshore wind farm projects are finding it increasingly difficult to get planning approval because opposition to them is becoming more entrenched and better organized.
Offshore farms cost more to build but produce more electricity because they usually stand in open, windier spots. However, current offshore farms can encroach on shipping lanes, affect seabird sanctuaries and disturb marine life, limiting the number of suitable sites.
Shallow-water offshore farms--such as the Kentish Flats farm in the Thames Estuary--miss out on some of Europe’s strongest winds: those that howl across the North Sea’s northern stretches. “With the expertise we have gained with the Beatrice project, we can exploit winds that simply cannot be tapped by offshore turbines at present,“ added O’Brien.
However, wind energy farms are not a simple panacea for the country’s energy problems. Last week the Beatrice turbines were being serviced but, if they had been operational, they would not have been turning. The North Sea’s winds were virtually non-existent, meaning no power would have been generated.
Opponents say such variability of output is a drawback of wind energy. But O’Brien insisted: “If we can build big turbines far away from the shore, they will cause minimum upset and disruption. This is their future and that is why the Beatrice project is so important.“

Ethanol Rush May Harm US Water Supplies
The US ethanol rush could drain drinking water supplies in parts of the country because corn--a key source of the country’s alternative fuel--requires vast quantities of water for irrigation, the National Research Council reported on Oct 11.
US President George W. Bush has called for production of 35 billion gallons per year of alternative motor fuels including ethanol by 2017, as part of an effort to wean the country from foreign oil. US capacity to make the fuel, believed to emit low levels of greenhouse gases, has spiked about 28 percent this year to nearly 7 billion gallons, according to Reuters.
But the use of more corn to make ethanol could drain water supplies like the Ogallala, or High Plains, aquifer, which extends from west Texas up into South Dakota and Wyoming.
“The aquifer is already being mined to the extent that recharge of precipitation into it is much less than withdrawals, and that would be exacerbated by any increase in corn or any increase in irrigated agriculture in the region,“ Jerald Schnoor, a professor of environmental engineering at the University of Iowa, told reporters on a conference call about the report. Schnoor chaired a committee set up to develop the report.
Large portions of Ogallala show water declines of more than 100 feet, said the report from the Council, which advises Congress and the federal government on scientific matters.
Corn requires more irrigation than other crops like soybeans and cotton in the Plains states across the middle of the country, the report said. Much of the water used to irrigate corn, the main source of ethanol in the United States, is lost to the ecosystem as it evaporates from the plant and from the ground.
Schnoor said poor water supplies in some parts of the US Midwest have already stopped a few ethanol refineries, also heavy water users, from being built in Iowa and Minnesota. If they had been built, water supplies to a few towns there may have suffered, he said.
In addition, fertilizers used to produce corn could increase the runoff of oxygen-starving nitrogen into streams that run down the Mississippi River into the Gulf of Mexico. Such runoff has been blamed for forming “dead zones“ in the Gulf where many forms of marine life cannot survive.
Schnoor said each gallon of ethanol made from corn can leave behind about 8 grams, or about the weight of three pennies, of nitrogen that can wind up in water supplies.
A similar report from nonprofit group Environmental Defense this summer said ethanol could increase demand for scarce water supplies by 2 billion gallons a year.
Ethanol industry sources have said concerns about ethanol’s impact on water supplies are overblown and that ethanol plants will not be locating where water availability is a question.
The NRC report said technological developments could help protect water supplies. Ethanol producers are learning to recycle water in refineries that make the fuel, and an emerging fuel, called cellulosic ethanol, could lead to reliance on feedstocks like switchgrass, which may require less irrigation than corn.