By Susan Kraemer

Under AB32, California is working on carbon market strategies to reign in emissions from all sources, not just electricity. The state already uses almost no coal, but is a major oil producer of oil and gas, and has industries like cement production that have high levels of emissions.

“We believe now is a good time to look at a broad greenhouse gas reduction strategy as an alternative to relying only on increasing renewable goals,” says Lynsey Paulo, spokeswoman for PG&E, which sees a need for a more coordinated and nimble policy framework around emissions reduction, that addresses not just the electricity market, but also other forms of energy.

According to the International Energy Agency (IEA), 67% of industrial civilization’s use of energy is in the form of heat, not electricity.

“Mechanisms like the RPS still leave almost two-thirds of the market without any policy,” GlassPoint vice president of business development John O’Donnell agrees. “The market for enhanced oil recovery is not affected by the RPS. The cap and trade and carbon policy are the only things that apply there.”

CSP for desalination

One of the most exciting developments in CSP is its use to reduce the carbon intensity of industrial processes that now rely on fossil fuels for heat or steam, by either replacing fossil fuels or at least reducing their use.

“The use of CSP for many industrial steam applications is an up and coming field. For many parts of the world, including California, inland desalination looks like a very big market,” says Alison Mason, marketing director at SkyFuel.

The Colorado-based company makes an economical CSP trough that is ideal for industrial uses - or combined with other energy generators. Their trough was used in Enel’s recent geothermal-solar hybrid project in Nevada.

SkyFuel also recently supplied their technology to WaterFX to supply a solar steam replacement for fossil energy, for a thermal desalination project in California’s parched Panoche Water District.

“A low-risk way to get started is to expand existing plants by heating additional steam, to desalinate additional water but without additional fuel,” says WaterFX founder Aaron Mandell. “If people aren’t yet comfortable with solar desalination, you can add just the solar troughs, and not have to build a whole plant,”

The need for solar desalination for California’s inland farming is only going to increase in California, due to increasingly dry conditions coupled with the carbon constraints of the AB32 carbon market.

Enhanced Oil Recovery

Another potential big market for CSP is enhanced oil recovery (EOR) for the oil industry. GlassPoint; which had been focused on the Middle East, has just in the last few months taken a new look at the California market for EOR, because of the new carbon market in the state.

Since solar steam is made without burning fossil energy; oil companies would not need to buy emissions allowances for burning natural gas.

“California produces about 45% of the oil that it uses,” says O’Donnell. “The state is a large crude producer, and about half of the oil production in the state is using thermal recovery methods which are continuing to grow substantially, and as a result, around 25-30% of all the natural gas in California is actually being used for steam for oil production. That is - more natural gas than is used for all residential electric power generation.”

“So a lot of our attention is directed to understanding the forward carbon market prices, because we think that as customers understand where these markets are going, it will become clear that solar EOR may well be of significant value to them. But we’re still at that first step of trying to understand where are the carbon policy is going.”

Cement industry?

California’s big cement industry would also seem to be an ideal candidate for solar heat to replace fossil fuels. Cement making requires both electricity and heat. Electricity; to grind up the raw materials to powder, and then heat to create a chemical reaction to make the new cement minerals.

“We’re in California, so it's definitely affecting us,” says Steve Regis, senior vice president of corporate services at CalPortland Cement.

“Starting in January of last year we had to start accruing credits for our emissions. Roughly 90% of our AB32 credits are allocated to us, and we have to go out into one of several different markets to purchase the credits to make up the difference.” Each metric ton of CO2 equivalent equals one credit.

Unlike the low temperatures used for EOR on oil fields, cement is made at a temperature of 2800°F and the flame temperature has to be even hotter.

Very high heat

“We are starting from dust, and we have to heat that up to 2800°F,” Regis explains. “And that's just the material temperature; the flame temperature from our coal approaches 4000°F.”

For CSP that could reach such temperatures, this industrial application would seem to be ideal - for reducing smokestack CO2 coming from burning coal or coke. But actually, 60% of a cement plant’s emissions come from the cement mix itself: the byproduct of the chemical reaction of the materials heated to produce cement is CO2.

CalPortland once tried a pilot plant to sequester the CO2 from the stack and concentrate it, because there is a market in California for CO2 - pumped into depleting oil fields for EOR.

“But it took so much power to extract and concentrate the CO2,” he says, “that we would’ve had to have built a 110 MW power plant there in the plant, to supply the power.”

Regis suggests that the biggest opportunity for the cement industry to reduce emissions is to use renewables to generate its electric power, as CalPortland Cement has done with a wind farm matched to its 24MW peak use.

But ironically, the way the emissions policy is in California; indirect emissions from electrical power don't count against each consumer - only the utility - so there is no policy to drive cement factories to switch.

“We conserve for other reasons. But not under AB32,” he says. “Under the climate change regime, our electrical emissions don't count.”

To comment on this article, please contact the author, Susan Kraemer.