Polluting Power Plants Can’t Escape the Eyes in the Sky

(Bloomberg Opinion) -- This week, the technology nonprofit WattTime announced that, thanks to a $1.7 million grant from Google.org, it will use satellite technology to measure air pollution from every large power plant in the world. This effort, which will combine data “from a variety of sensors operating at different wavelengths,” will also use artificial intelligence to analyze and calculate carbon emissions, according to David Roberts at Vox. The company plans to make these data available to the public.

That public aspect is very important because, as WattTime’s executive director Gavin McCormick rightly points out, “Far too many power companies currently shroud their pollution in secrecy.” It’s not just companies that shroud emissions in secrecy. Countries do as well, even if not deliberately. “Shockingly few countries, essentially only the U.S. and China,” actively disclose emissions from power plants in real time, as Lauri Myllyvirta of Greenpeace noted on Twitter. The European Union doesn’t, nor does Japan. And cheating on emissions reporting is rampant in many places, while some countries don’t require emissions measurements at the smokestack level at all.

WattTime’s initiative is potentially quite significant. A world with granular, real-time data on the most significant contributors to planet-warming emissions is one that can be better managed. That management could take many forms, too — including making companies and countries aware of things they’d like to clean up or make more efficient to naming and shaming those that don’t follow rules. Roberts lays out some of the benefits of WattTime’s plans for citizens, too, such as enabling them to put pressure on the biggest carbon emitters.

I’ll add two other thoughts.

The first is that there are plenty of possible market applications for this information. Precise data on plant emissions are also precise data on plants’ utilization rates and revenues, and it’s quite possibly data that will be available before companies disclose it in regulatory or financial filings. BloombergNEF’s U.S. power markets team, for instance, uses hourly data from Environmental Protection Agency continuous emission monitoring systems to calculate power generated by plants — but those data are only reported quarterly, and it’s spotty, too.

The second is that WattTime’s methods can probably be extended to other large emitters outside the power sector, in particular petrochemical facilities, which are already the subject of intense trader scrutiny. Global oil trading is a $40 trillion market, and one in which geolocation can offer clues to refinery operations.

It’s not hard to imagine energy and equity traders casting their eyes toward a new stream of data for some of the world’s biggest physical assets and doing their best to find an edge with it.

With assistance from Nicholas Steckler

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.

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