China is expected to overtake the US as the world's biggest emitter of carbon dioxide this year.

Rapid economic growth in China and India will have devastating consequences for the world’s energy supply if governments in those emerging countries do not ramp up efforts to curb demand and greenhouse gas emissions, the International Energy Agency said.
The IEA said that the two countries will account for around 45 percent of the increase in global primary energy demand through 2030, when the world’s energy needs are expected to be well over 50 percent higher than they are today, AP reported.
“How China and India respond to the rising threats to their energy security will also affect the rest of the world,“ the Paris-based agency said in its 2007 World Energy Outlook, which concentrated on the implications of energy developments in those two emerging economies for the rest of the world.
The IEA--an energy policy adviser for its 26 member countries, including the United States, Canada, Australia and 19 European nations including Germany and Britain--said that China and India are transforming the global energy system by dint of their sheer size.
China is expected to overtake the United States as the world’s biggest emitter of carbon dioxide this year--that’s three years earlier than the agency had forecast in its annual report last year. India will become the third-biggest emitter around 2015.
IEA Executive Director Nobuo Tanaka said that rapid economic growth in China and India was a “legitimate aspiration“ that would improve the quality of life of more than 2 billion people and that needed to be supported by the rest of the world.
“Indeed, most countries stand to benefit economically from China and India’s economic development through international trade,“ Tanaka said ahead of the report’s release in London.
However, the agency said that growing participation in international trade highlighted the importance of the pair’s contribution to collective efforts to enhance global energy security.
“We need to act now to bring about a radical shift in investment in favor of cleaner, more efficient and more secure energy technologies,“ Tanaka said.
The IEA also warned that an “abrupt escalation“ in oil prices is possible before 2015 amid increased demand and shorter supply as oil output becomes more concentrated in a few Middle Eastern countries.
The agency said that crude oil import prices, a proxy for international oil prices, could rise to $108 in nominal terms by 2030 when it forecasts oil demand to have reached 116 million barrels per day. Oil demand was 84 million per day in 2006. On Nov. 7, crude prices jumped to a new trading record above $98 a barrel.
“Although production capacity at new fields is expected to increase over the next five years, it is very uncertain whether it will be sufficient to compensate for the decline in output at existing fields and meet the projected increase in demand,“ the IEA said.
To maintain growth in production capacity, the oil industry needs to invest some $5.4 trillion between now and 2030, it said.

Higher oil prices will raise the cost of production and put upward pressure on the aggregate price level.

With prices nudging record highs, the recent oil spike has received a lot of media attention. On November 2, the average petroleum spot price (APSP) set a new high, closing at over $91. The three main benchmark prices for oil also reached record highs during the same week, with West Texas Intermediate closing at almost $96, Brent at more than $92, and Dubai at more than $85. Measured in euro and SDR terms, however, the surge has not been as stark, reflecting the depreciation of the dollar.
As of early November, futures and options markets indicate that the APSP will average over $87 per barrel in the fourth quarter of 2007 and over $86 per barrel in 2008, with a more than one in four chance that Brent crude prices could be above $100 by early 2008, IMF.org said.
The recent oil price surge was sparked by heightened geopolitical concerns about growing tensions along Iraq’s border with Turkey and bad weather in the Gulf of Mexico. Increasingly tight oil market conditions also played a role, as did the weakening dollar, according to analysts at the IMF.

Demand Outstripping Supply
Oil demand growth is expected to remain robust throughout the rest of 2007, supported by strong growth in emerging markets, particularly China and the Middle East.
But supply has lagged behind and inventories are falling. During the first nine months of 2007, world oil supply declined moderately by 0.1 millions of barrels per day (year on year), reflecting a decline in the output of the Organization of Petroleum Exporting Countries (OPEC) and limited output growth in oil-producing countries that are not members of OPEC. As a result, commercial inventories in OECD countries fell in the third quarter, a period normally marked by inventory accumulation.
Supply is unlikely to catch up with demand growth because of the increasing technological and economic challenges for oil production. As a result, tight market conditions are expected to persist and possibly intensify, assuming strong GDP growth continues in emerging markets

Weakening Dollar
The oil price surge is not an isolated event. Many other commodities--including precious metals, industrial metals such as lead and nickel, and foods such as wheat and edible oils--have all set record highs during 2007. Indeed, the dollar depreciation has amplified the oil price surge in dollar terms. While the APSP rose by almost 55 percent in dollar terms during the year ending October 2007, it rose only by about 36 percent in euro terms.
Apart from this “accounting effect,“ some market analysts suggest that the weakening of the dollar, combined with the financial turbulence linked to the subprime mortgage market in the United States, may have induced investors to diversify away from dollar-denominated financial assets toward commodities as “alternative assets.“

Macroeconomic Impact
Rising oil prices will likely boost headline inflation in the months ahead, but only slightly. The direct effect of the recent oil price rise on headline consumer price index (CPI) inflation in the United States is estimated to be about 0.1 percentage points by the end of the year. Overall, the impact should be manageable, because greater monetary policy credibility has anchored inflation expectations more securely, particularly in advanced economies, according to an IMF analysis.
The situation may be more challenging in some emerging market and developing countries where overheating pressures are of greater concern and rising fuel costs may put pressure on household budgets and external balances, particularly in low-income oil-importing countries.
The impact on global economic activity should also be limited. First, the depreciation of the dollar has softened the impact of the oil price surge on other major consuming countries. Second, the price rise has been driven by sustained strong demand growth rather than supply shortfalls. Third, compared with the oil price surge in the late 1970s, economies today are much less energy intensive. Fourth, in the case of the United States, the low season of gasoline consumption during September-October has so far kept retail gasoline prices comfortably below the highs set in May 2006.
That said, a supply-driven spike to oil prices caused by a serious deterioration of security conditions in the Middle East could have a significant impact on global growth. The April 2007 World Economic Outlook simulated the impact of a supply-induced oil price hike using the IMF’s “Global Economy Model.“
The findings suggested that a sharp supply-induced rise in oil prices could result in a global slowdown, as income is redistributed to oil-exporting economies, which have a lower propensity to spend than oil-importing economies. Higher oil prices would also raise the cost of production and put upward pressure on the aggregate price level. This would cause central banks to increase interest rates. Together with the direct impact on production costs, higher interest rates would then further dent economic activity in the short run.

Current fever for solar power in the world may not be sustainable and could be a bubble, an executive at Japanese silicon maker Tokuyama Corp said on Nov. 5.
According to Reuters, Tokuyama, the world’s No. 2 maker of polycrystalline silicon after US firm Hemlock Semiconductor Corp, is still gauging long-term demand for silicon used in solar cells, Managing Director Yukio Muranaga said.
“Demand for solar power will grow, but we really don’t know by how much,“ Muranaga said. “It’s too early to commit to more investment at this stage.“
The global solar market, which some of Tokuyama’s clients expect will grow by as much as 40 percent a year, depends on uncertain factors including how much governments such as Germany are willing to subsidize solar energy use, Muranaga said.
Investors have criticized Tokuyama for falling behind in a capacity race against its rivals, who are betting that demand for clean energy and semiconductors in zippy gadgets will boost demand for polysilicon.
Polysilicon prices are now 15 percent to 20 percent higher than a year ago.
Hemlock, nearly two-thirds owned by Dow Corning Corp, plans to more than triple annual capacity by 2010 to 36,000 tons of polysilicon, while Germany’s Wacker plans to more than double capacity to 14,500 tons.
That would mean the two companies would outpace Tokuyama, which plans to raise annual capacity by 60 percent to 8,200 tons in the spring of 2009.
Until then, Tokuyama’s sales of silicon, are capped by capacity, even while prices of raw materials such as coal surge, limiting growth.
The company, which forecasts 0.8 percent growth in operating profit this year, sometimes has to turn down orders for 500 or 1,000 tons, said Muranaga.
Its shares have fallen 16.7 percent since January, compared with a 5.6 percent fall in the benchmark Nikkei average.
But Tokuyama, which supplies silicon to wafer makers such as SUMCO Techxiv Corp, is not about to rush into expansion.
Unlike Kyocera Corp or Sharp Corp, which are expanding solar cell production after spending decades developing solar technology, recent entrants don’t understand how variable the market can be, Muranaga said.
Burned when the IT bubble burst in 2000, the company still remembers having to halt production at its newly built plant as polysilicon prices fell by half.
“That’s a trauma that is going to make them very, very cautious,“ said Yoshihisa Toyosaki, president of IT consulting firm J-Star Global Inc.
The company is now concentrating on developing a new production process that would slash costs and allow it to undercut its rivals in solar-use silicon, if successful.

The scientific community is progressively experiencing a greater interest in environmentally friendly energy generation technologies, and their suitable applications, such is the case of hydrogen fuel cells applied to aeronautics.
This contamination free technology has taken a crucial role in the development of modern aeronautics and the present objective is the realization of fully electrical planes. Hydrogen fuel cells are currently being tested as propulsion system in Unmanned Aerial Vehicles by companies like Boeing, where all the advantages it could offer are being taken into consideration, from its efficiency to the possibility to recycle the water generated as by-product, maybe for use in the plane’s toilets, FuelClessWorks.com reported.
The application of this technology as propulsion for large commercial planes is far fetched, since at present time, fuel cells do not provide enough energy, but this technology could be implemented as an auxiliary power unit (APUs) that could start the engines in the plane, power the air conditioning, the lights, cabin pressureÉ etc.
The European project “power optimized aircraft“ aims to further develop fuel cell technology applied to high efficiency APUs. This project involves several European private companies and different public organisms from different countries.
There are different approaches towards how the hydrogen needed to fuel the cells is to be obtained. To this date, most experimental designs include high pressure storage tanks for the hydrogen, but this presents serious risks. It would call for changes to the plane designs and refueling logistics, all added to the fact that the light density of hydrogen implies a fast consumption rate that would only allow for short flights. All these inconveniences have favored the study of other sources of hydrogen, such as its on board production from kerosene already present in the plane as engine fuel, therefore eliminating the need for any major modification.
Two different procedures to reform the kerosene into hydrogen are being studied; one involving preparing the kerosene by a previous process to obtain richer hydrogen flow. And the second option would be a fuel cell capable of transforming the hydrocarbon directly into electric energy.
This new system would be lighter and more compact, reducing the weight of the equipment, but the technology to achieve this is currently at the evaluation phase.

Wind power industry can deliver on its soon-to-be unveiled vision for 20 percent wind penetration by 2030, but it’s going to take sound policy, an inflow of plenty of talent into the industry, a lot of consensus building, and getting the word out like the industry has never done before, said panelists at the opening session of the AWEA 2007 Wind Energy Fall Symposium in Carlsbad, California.
According to Renewableenergyaccess.com, currently, said Clipper Windpower Senior Vice President of Commercial Operations Bob Gates, who is AWEA’s board president, “The rules and the structures don’t allow for [20 percent wind].“ But, he said, “One of the things we get to do is change those structures.“
As for specific structures that inherently pose challenges, Horizon Wind Energy Chief Development Officer Michael Skelly pointed out that the current power grid largely grew out of a system of local utilities building to serve local demand, with little broad-scale planning--something that wind will need in order to achieve its potential. In the absence of federal planning, said Skelly, “The way we are going to get there is by articulating it and then getting consensus.“
Xcel Energy Utilities Group President Paul Bonavia offered a utility perspective on 20 percent wind, fully embracing the vision. “We’re committed to making it happen, and we believe it needs to occur,“ he said.
Bonavia cited several issues that should be addressed in order for wind to provide 20 percent of the nation’s electricity needs. Among them: larger geographical control areas to allow for more diversity of load and more generation resources, better forecasting, continued improvements in technology, and development of current transmission infrastructure.
AWEA Policy Director Rob Gramlich provided a glimpse of the 20 percent vision technical report that is due to come out soon. The vision, which Gramlich emphasized assumes “stable and long-term policy,“ calls for a ramp-up in deployment of wind power capacity form the current 3,000-4,000 megawatts (MW) annually to 16,000 MW per year at peak.
Gramlich also showed the conceptual map developed by American Electric Power of a grid that can efficiently accommodate 20 percent wind (as well as benefit all of the electric industry). The map calls for up to 15,000 miles of new transmission lines.
Wind penetration of 20 percent will have tremendous economic benefits, Gramlich reported. It would reduce total US natural gas demand by 11 percent and save $128 billion in net present value through 2030.
Moreover, with much of new natural gas capacity needing to come from overseas (in the form of liquefied natural gas), “There’s an energy security story here,“ said Gramlich. Along those lines, several panelists said that going forward, it is absolutely imperative to get the wind and renewables message out to the general public as a whole--a public that will continue to be increasingly receptive to that message, said Gates.
Getting to 20 percent penetration by 2030, of course, means taking action now, and so AWEA Executive Director Randall Swisher outlined AWEA’s five-year action plan, which was developed with the 20 percent vision in mind.
The six primary barriers that the industry will need to tackle, according to the five-year plan, include the need for long-term and stable policy support, transmission, siting policies that will allow for 15,000 MW a year to be installed, wind’s variability, value chain constraints associated with the rapid ramp-up, and wind’s ability to compete on cost.