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1. Reconsidering US Nuclear Cooperation Agreements

Author:
Richard Nephew
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Despite having played a central role in the creation of the international nuclear commercial sector, today the United States is increasingly on the outside looking in when it comes to civil nuclear projects. The United States now accounts for a relatively small number of new reactor builds, both at home and abroad. There are a few rays of sunshine for the US nuclear industry, especially when it comes to new technology. In fact, many of the new reactor builds that are underway do involve US technology and intellectual property, even if others are performing the construction. To take advantage of a similar dynamic, US innovators are looking to both new and forgotten designs as a way of managing the challenges of nuclear fuel manufacture, safety, waste management, security cost, and proliferation. But these new technologies face an uncertain future (and so consequently does the US role), even notwithstanding the advantages nuclear energy would bring to managing climate change and the edge the United States may have in their development. Various factors account for the challenges facing the US nuclear industry, including the complex political, economic, scientific, and popular environment around nuclear technology and civil nuclear energy. Of the various problems potentially plaguing US nuclear energy policy, one remains both difficult to address and controversial: US requirements for nuclear cooperation, and in particular, the demand from many in Congress and the nonproliferation community that the United States insist on binding commitments from its cooperating partners to forswear developing enrichment and reprocessing technology. While this policy is not responsible for the decline of the US nuclear industry, it adds additional hindrance to US nuclear commerce abroad and may even be to the long-term detriment of US nonproliferation policy interests. If so, then the questions that arise are whether this is in the US interest and, if not, how the US ought to respond. If the government believes that having a role in international nuclear commerce is advisable on both economic and strategic grounds, then it needs to decide whether to commit resources to incentivize foreign partners to overlook the problems its nonproliferation policies may cause these partners or seek modifications to those policies. From a pure nonproliferation perspective, it would be preferable for the United States to invest in its nuclear industry to ensure it is competitive globally. But, this does not seem to be a likely course of action for the United States given the myriad political, legal, and budgetary complexities that would be involved. Consequently, this paper recommends several changes to how US nuclear cooperation agreements are negotiated as well as enhancements to overall US nuclear nonproliferation policies. In aggregate, they seek to rebalance and reformulate some aspects of US nuclear nonproliferation policy to make it more effective and efficient, particularly regarding engagement in civil nuclear commerce, but without compromising the core nonproliferation interests the current US diplomatic approach seeks to advance. With respect to nuclear cooperation agreements, the paper recommends the following: Relaxing the current US preference for a legally binding commitment to forswear all enrichment and reprocessing capabilities indefinitely for these agreements, while continuing traditional US policy to discourage these technologies development through various means. Relying on enhanced inspector access and improved verification tools, technology, and practices to provide confidence on the nondiversion of civil nuclear cooperation rather than assurances regarding enrichment and reprocessing that, in any event, are potentially revocable. Adopting a favorable view of “black box” transfers of nuclear power reactors and building this into policy as new, advanced reactor concepts are being explored, developed, and marketed. Creating a new sanctions regime to cover countries that pursue enrichment and reprocessing capabilities after concluding a 123 agreement. With respect to nuclear nonproliferation policy more generally, the paper recommends the following: Developing an annual nonproliferation indicators publication to identify trends in proliferation, including the kinds of goods that proliferators are potentially seeking. This document would also include a list of countries where there are presently enhanced concerns regarding national nuclear programs or concerns about transshipment and export control risk. Its objective would not be to serve as a proxy for future sanctions designations decisions but rather to give a broad perspective of the challenges that exist with particular jurisdictions even—and perhaps especially—if there is no need or justification for sanctions at present. Developing a warning system for sought-after goods. The United States should work with industry to develop a restricted database that identifies sensitive goods that are being sought. This database would be accessible to corporate compliance officers, who would be vetted for access to the information. Within it, the database could also include additional information about the sorts of tactics being employed by proliferators. Making greater use of end use verification as a means of facilitating monitoring of the nonproliferation commitments of countries, particularly regarding dual use technology. This could also be built out to include greater collaboration with partner countries and companies. Amending Executive Order 13382, which provides for sanctions against proliferators of weapons of mass destruction, to add a prong of “willful negligence.”
Topic:
Energy Policy, International Cooperation, United Nations, Infrastructure, Nuclear Power, and Nonproliferation
Political Geography:
United States

2. Powering the Globe: Lessons from Southeast Asia for China’s Global Energy Interconnection Initiative

Author:
Edmund Downie
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
China’s Global Energy Interconnection (GEI) initiative presents a transformational vision for meeting the world’s growing power demand with a globally interconnected electricity grid. The concept involves ultra-high-voltage transmission lines strung across vast distances and smart grid technology tapping large-scale renewable power sources. Chinese President Xi Jinping first touted GEI’s goal to “facilitate efforts to meet the global power demand with clean and green alternatives” at the UN General Assembly in 2015. The ambition of the GEI vision is enormous, especially since there is very little cross-border trade in electricity around the world today. Regional electricity integration initiatives championed by development banks and multilateral organizations have largely struggled against the formidable political, economic and technical complications that accompany interstate electricity trade. China has seen these challenges firsthand in its participation in the Asian Development Bank’s Greater Mekong Subregion electricity trade endeavor, which has progressed fitfully since the 1990s amid regional infrastructure gaps and uneven political support from member states. This report, prepared as part of the Belt and Road Initiative series published by Columbia University’s Center on Global Energy Policy, uses a case study of power trade in the Greater Mekong Subregion to assess the prospects for GEI in catalyzing energy integration around the world. It discusses why Greater Mekong Subregion integration has been slow, how GEI might help accelerate interconnection in the area, and what lessons the region offers for understanding the overall outlook for GEI. Based on this study, the author finds the following: Establishing a GEI-style global energy grid backbone by 2070 would require overcoming an extraordinary set of political challenges. The global grid outlined by GEI for the coming decades serves more as a demonstration of technical potential than a strict blueprint to be implemented. The limited scale attained thus far by the Greater Mekong Subregion project for grid integration and cross-border electricity trading demonstrates the headwinds such multinational efforts can face. Weak internal power sector development in recent decades has left some member states without the generation surpluses and robust power grids necessary to support meaningful levels of trade. In addition, power trade requires a strong degree of interstate political trust, motivated engagement by national utilities, and support from civil society players for the specific generation and transmission projects involved. Integration backers have historically struggled to build consensus across this diverse array of stakeholders. While enormous generation and transmission infrastructure projects are core components of the GEI vision and dovetail with the interests of China’s domestic proponents, considerable debate persists about their merits for fostering the renewables transition. Ultra-high-voltage transmission, a specialty of Chinese utilities, is a particular flashpoint. State interest in cross-border trade has been increasing across many regions in recent years, and more gradual gains in power trade around the world that can aid the renewable transition and bolster regional solidarity are possible. China can contribute greatly to this process: as an investor and contractor in grid projects abroad, as a member state of integration initiatives in Asia, and as an advocate of grid integration in international fora. GEI’s ultimate impact will depend in part on how advocates within China reconcile tensions between strengthening cross-border power trade and promoting domestic priorities, such as advancing the country’s own industrial policy objectives.
Topic:
Climate Change, United Nations, Infrastructure, Green Technology, and Electricity
Political Geography:
Global Focus

3. Electric Vehicle Charging in China and the United States

Author:
David Sandlow and Anders Hove
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
At least 1.5 million electric vehicle (EV) chargers have now been installed in homes, businesses, parking garages, shopping centers and other locations around the world. The number of EV chargers is projected to grow rapidly as the electric vehicle stock grows in the years ahead. The EV charging industry is a highly dynamic sector with a wide range of approaches. The industry is emerging from infancy as electrification, mobility-as-a-service and vehicle autonomy interact to produce far-reaching changes in transportation. This report compares EV charging in the world’s two largest electric vehicle markets -- China and the United States – examining policies, technologies and business models. The report is based on more than 50 interviews with industry participants and a review of the Chinese- and English-language literature. Findings include: 1. The EV charging industries in China and the United States are developing largely independently of the other. There is little overlap among the key players in the EV charging industries in each country. 2. The policy frameworks with respect to EV charging in each country differ. The Chinese central government promotes the development of EV charging networks as a matter of national policy. It sets targets, provides funding and mandates standards. Many provincial and local governments also promote EV charging. The United States federal government plays a modest role in EV charging. Several state governments play active roles. 3. EV charging technologies in China and the US are broadly similar. In both countries, cords and plugs are the overwhelmingly dominant technology for charging electric vehicles. (Battery swapping and wireless charging have at most a minor presence.) China has one nationwide EV fast-charging standard, known as China GB/T. The US has three EV fast charging standards: CHAdeMO, SAE Combo and Tesla. 4. In both China and the United States, many types of businesses have begun to offer EV charging services, with a range of overlapping business models and approaches. A growing number of partnerships are emerging, involving independent charging companies, auto manufacturers, utilities, municipalities and others. The role of utility-owned public chargers is larger in China, especially along major long-distance driving corridors. The role of automaker EV charging networks is larger in the United States. 5. Stakeholders in each country could learn from the other. US policymakers could learn from the Chinese government’s multiyear planning with respect EV charging infrastructure, as well as China’s investment in data collection on EV charging. Chinese policymakers could learn from the United States with respect to siting of public EV chargers, as well as US demand response programs. Both countries could learn from the other with respect to EV business models. As the demand for EV charging grows in the years ahead, continued study of the similarities and differences between approaches in China and the United States can help policymakers, businesses and other stakeholders in both countries and around the world.
Topic:
Science and Technology, Infrastructure, Green Technology, and Electricity
Political Geography:
United States, China, Asia, and North America

4. Rural Electricity Supply: Commodity or Entitlement?

Author:
Johannes Urpelainen, Brian Blankenship, and Jason Wong
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Quality of electricity service remains poor in many developing countries. Reforms to distorted pricing mechanisms involving citizens increasing their payments in exchange for better service must be done carefully to avoid political backlash and persistent theft. Are people not willing to pay for better electricity quality because they feel entitled to electricity provision, or is it because they do not trust one another to also do their part? In a survey conducted in rural Uttar Pradesh, India, we examine factors that influence stated willingness to pay for better service (i.e., more hours of power per day) among rural households. Our results indicate that the general levels of trust are low, and that entitlement plays less of a role as to whether households are willing or not to contribute to improved electricity quality. Low willingness to pay remains a major obstacle to pricing reform. Generalized trust is strongly associated with higher willingness to pay for better electricity. Delays in service improvements and a lack of community support for pricing reform reduce willingness to pay for better quality. To better foster public support for increasing payments in return for better service, we provide three recommendations as follows. Building trust within the community, across agents, and with utilities could help achieve better rural electricity outcomes. Citizens are unlikely to be willing to contribute or make efforts to participate if the background level of trust remains low. Utilities can help by making credible promises and reducing service delay, or first deliver service improvements before collecting increased payments, as to build upon the trust with the community members, who will in turn be more willing to pay. Properly reducing incentives for theft is important for rural electricity reform. 76 percent of the respondents reported theft as an important obstacle to proper electricity supply, and based on what is observable and on the survey results, we estimate a lower-bound usage rate of illegal night lines to be 20 percent. While proper enforcement can be difficult, a potential solution is to focus on the katiyamen and on the officials who check the villages for theft activities. To disincentivize katiyamen, perhaps a training conversion into a utility company position can reduce katiya spread and actually help convince local residents to join the legal grid system. With officials who neglect theft through night lines or meter tampering, a proper incentive scheme should be in place to prevent accepting bribes. Currently, the incentive structures are set up such that the offending households have an incentive to bribe or bypass the proper process, creating these collected rents—the gap between the willingness to accept illegal payments and the punishment for the resident. Further policy should properly reduce incentives for theft, not only from the household perspective but also from a systems perspective. Poverty alleviation must be taken into account in electricity reform policies. The average willingness to pay for extra hours of electricity tends to be very low—at 40 rupees for four more hours, on average. Continued poverty remains a significant obstacle for proper electricity reform in rural India, and national policy should take into account the impact of income when designing policies to improve electricity outcomes.
Topic:
Poverty, Infrastructure, Rural, and Electricity
Political Geography:
Global Focus

5. Low-Carbon Heat Solutions for Heavy Industry: Sources, Options, and Costs Today

Author:
Julio Friedman
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Recent studies indicate there is an urgent need to dramatically reduce the greenhouse gas emissions from heavy industrial applications (including cement, steel, petrochemicals, glass and ceramics, and refining). Heavy industry produces roughly 22 percent of global CO₂ emissions. Of these, roughly 40 percent (about 10 percent of total emissions) is the direct consequence of combustion to produce high-quality heat, almost entirely from the combustion of fossil fuels. This is chiefly because these fuels are relatively cheap, are widely available in large volumes, and produce high-temperature heat in great amounts. Many industrial processes require very large amounts of thermal energy at very high temperatures (more than 300°C and often more than 800°C). For example, conventional steel blast furnaces operate at about 1,100°C, and conventional cement kilns operate at about 1,400°C. In addition, many commercial industrial facilities require continuous operation or operation on demand. The nature of industrial markets creates challenges to the decarbonization of industrial heat. In some cases (e.g., steel, petrochemicals), global commodity markets govern product trade and price. Individual national action on the decarbonization of heavy industry can lead to trade disadvantage, which can be made acute for foundational domestic industries (in some cases, with national security implications). This can also lead to offshoring of production and assets, leading to carbon “leakage” as well as local job and revenue loss (with political consequences). In many cases, lack of options could lead to dramatic price increases for essential products (e.g., cement for concrete, an essential building material). Risk of carbon leakage, price escalation, and trade complexity limits the range of policy applications available to address this decarbonization need. To explore the topic of industrial heat decarbonization, the authors undertook an initial review of all options to supply high temperature, high flux, and high volume heat for a subset of major industrial applications: cement manufacturing, primary iron and steel production, methanol and ammonia synthesis, and glassmaking. From the initial comprehensive set of potential heat supply options, the authors selected a subset of high relevance and common consideration: Biomass and biofuel combustion Hydrogen combustion (including hydrogen produced from natural gas with 89 percent carbon capture (blue hydrogen) and hydrogen produced from electrolysis of water using renewable power (green hydrogen) Electrical heating (including electrical resistance heating and radiative heating (e.g., microwaves) Nuclear heat production (including conventional and advanced systems) The application of post-combustion carbon capture, use, and storage (CCUS) to industrial heat supply and to the entire facility, as a basis for comparison The authors focus on substitutions and retrofits to existing facilities and on four primary concerns: cost, availability, viability of retrofit/substitution, and life-cycle footprint. In short, the paper finds: All approaches have substantial limitations or challenges to commercial deployment. Some processes (e.g., steelmaking) will likely have difficulty accepting options for substitution. All options would substantially increase the production cost and wholesale price of industrial products. For many options (e.g., biomass or electrification), the life-cycle carbon footprint or efficiency of heat deposition are highly uncertain and cannot be resolved simply. This complicates crafting sound policy and assessing technical options and viability. Most substitute supply options for low-carbon heat appear more technically challenging and expensive than retrofits for CCUS. Even given the uncertainties around costs and documented complexities in applying CO₂ capture to industrial systems, it may prove simpler and cheaper to capture and store CO₂. CCUS would have the added benefit of capturing emissions from by-product industrial chemistry, which can represent 20–50 percent of facility emissions and would not be captured through heat substitution alone. Critically, CCUS is actionable today, providing additional GHG mitigation to industrial heat and process emissions as other options mature and become economically viable. Hydrogen combustion provided the readiest source of heat of all the options assessed, was the simplest to apply (including retrofit), and was the most tractable life-cycle basis. Today, hydrogen produced from reforming natural gas and decarbonized with CCUS (blue hydrogen) has the best cost profile for most applications and the most mature supply chain, and it would commonly add 10–50 percent to wholesale production costs. It also could provide a pathway to increase substitution with hydrogen produced by electrolysis of water from carbon-free electricity (green hydrogen), which today would increase costs 200–800 percent but would drop as low-carbon power supplies grow and electrolyzer costs drop. Hydrogen-based industrial heat provides an actionable pathway to start industrial decarbonization at once, particularly in the petrochemical, refining, and glass sectors, while over time reducing cost and contribution of fossil sources. However, substitution of hydrogen will prove more difficult or infeasible for steel and cement, which might require more comprehensive redesign and investment. Most of the other options appear to add substantially to final production costs—commonly twice that of blue hydrogen substitution or CCUS—and are more difficult to implement. However, all options show the potential for substantial cost reductions. An innovation agenda remains a central important undertaking and likely would yield near-term benefits in cost reduction, ease of implementation, and a lower life-cycle carbon footprint. Prior lack of focus on industrial heat supplies as a topic leave open many possibilities for improvement, and dedicated research, development, and demonstration (RD&D) programs could make substantial near-term progress. To avoid commercial and technical failure, government innovation programs should work closely with industry leaders at all levels of investigation. New policies specific to heavy industry heat and decarbonization are required to stimulate market adoption. Policies must address concerns about leakage and global commodity trade effects as well as the environmental consequences. These policies could include sets of incentives (e.g., government procurement mandates, tax credits, feed-in tariffs) large enough to overcome the trade and cost concerns. Alternatively, policies like border adjustment tariffs would help protect against leakage or trade impacts. Because all options suffer from multiple challenges or deficiencies, innovation policy (including programs that both create additional options and improve existing options) is essential to deliver rapid progress in industrial heat decarbonization and requires new programs and funding. As a complement to innovation policy and governance, more work is needed to gather and share fundamental technical and economic data around industrial heat sources, efficiency, use, and footprint.
Topic:
Climate Change, Energy Policy, Infrastructure, and Green Technology
Political Geography:
Global Focus

6. Electric Vehicle Penetration and Its Impact On Global Oil Demand: A Survey of 2019 Forecast Trends

Author:
Marianne Kah
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Columbia University’s Center for Global Energy Policy is undertaking a multiyear study on the prospects for and timing of peak oil demand. An essential piece of the puzzle is understanding what happens to global oil demand in the passenger vehicle sector, since it is the sector with the largest oil demand use today. Policy makers in a growing number of countries are supporting passenger vehicle electrification or a phaseout of fossil fuel passenger vehicles to reduce greenhouse gas emissions and improve urban air quality. To understand the trajectory of oil demand in this sector, it is important to comprehend the magnitude and timing of electric vehicle (EV) penetration. The pace of demand growth matters. If the world doesn’t move off oil at a rapid rate, it is important that policy makers recognize the need for investment in new oil supplies to prevent supply shortages and accompanying oil price spikes. Numerous studies analyzing the impact of EVs on oil demand have been published. It is difficult to compare these studies because they do not define the passenger vehicle sector the same way or provide underlying assumptions on a comparable basis. Last year, the author conducted a survey of all available global electric passenger vehicle penetration forecasts to compare underlying assumptions and the impact on oil demand. The author conducted a similar survey in 2019 to understand how views on EV penetration are changing. This report describes the results from the 2019 survey and indicates how views have changed since last year. Rationale for Studying the Passenger Vehicle Sector As shown in figure 1, the passenger vehicle sector is the largest sector of oil use, representing about one-quarter of the oil demand barrel. The passenger vehicle sector is a target for policy makers because full penetration of EVs could ultimately take nearly 25 million barrels per day of oil use out of the market. However, it is important to understand the other 75 percent of the oil demand barrel before assessing the prospects of peak oil demand. It should be noted that the passenger vehicle sector gets a disproportionate amount of attention from policy makers and the media because of the current focus on electrification and the greater ease of electrifying passenger cars versus other modes of transportation. For example, it is easier to electrify a passenger car than a heavy-duty truck, where the large and costly batteries required will reduce cargo carrying capacity due to weight limits on roads. It is also more challenging to electrify airplanes than passenger cars.
Topic:
Energy Policy, Oil, Science and Technology, Infrastructure, and Green Technology
Political Geography:
Global Focus