Tuesday, September 02, 2008

The Economist Debater Series - Final Round-up.

In summary, the pro's beat the cons by 55% to 45%. A close match, but it seems to me that the two sides were never entirely in opposition, and there is much common ground. The stuff of a good debate. One comment summarised much of this alluding that through energy efficiency we could get by on one third of current U.S. energy consumption, but we do need to ensure future provision of that amount through new technologies. "New technologies" are not necessarily entirely new as in a hydrogen economy or accomplishing terrestrial nuclear fusion, but e.g. using heat from fossil fuels directly, rather than in its end-use as electricity which wastes two-thirds of it. Nonetheless, that would require a revamping of the way many homes and other buildings are heated.

The Proposition's closing statement:

Aug 27th 2008 JOSEPH J. ROMM

I think Mr Meisen and Ms Fehrenbacher are in complete agreement with me that “we can solve our energy problems with existing technologies today, without the need for breakthrough innovations."

The time has come for aggressive deployment of energy efficient and renewable energy technologies. Indeed it is long overdue.

Breakthroughs are nice, like winning the lottery, but in fact, breakthroughs in energy technology that fundamentally change how we use energy are considerably rarer than most people realise.1 In any case, breakthroughs certainly can't be counted on to save the day no matter how much money we throw at them–just look at hydrogen fuel cell cars.

After billions of dollars spent in public and private money over the past two decades, hydrogen technology has seen no game-changing breakthroughs, and the cars are still decades away from ever being practical.2 Honda’s new FCX Clarity, supposedly “the world’s first hydrogen-powered fuel-cell vehicle intended for mass production,” still costs “cost several hundred thousand dollars each to produce.” Mass production might bring that down to $100,000–and even that assumes people would buy a car for which there's no fueling infrastructure. The future in vehicles is good old fuel efficiency, hybrids, and batteries--all of which is quite old technology.

Having helped run the largest programme in the world for working with businesses to develop and deploy clean energy technologies – the US Department of Energy's Office of Energy Efficiency and Renewable Energy–I could not agree more that we must start with an aggressive push on energy efficiency. I am very glad to see that both Mr Meisen and Ms Fehrenbacher understand this.

Energy efficiency is the cheapest alternative. California has cut annual peak demand by 12 GW--and total demand by about 40,000 GWh—through a variety of energy efficiency programs over the past three decades. Over their lifetime, the cost of efficiency programs has averaged 2-3 cents per kW–five times cheaper than new nuclear, coal, or natural gas generation.3 If the world launched a nationwide effort to embrace efficiency and change regulations to encourage efficiency, then we could keep electricity demand flat in the rich countries well past 2020. And countries like China could cut their demand growth rates in half. That is particularly true if we include an aggressive effort to push combined heat and power.4

A May presentation of the California Public Utilities Commission (CPUC) modelling results shows that energy efficiency could deliver up to 36,000 Gigawatt-hours of “negawatts” by 2020 (that is the equivalent of more than 5 GW of baseload generation operating 80% of the time).5 At the same time, the state could build 1.6 GW of small CHP and 2.8 GW of large CHP. So that is nearly 10 GW of efficiency by 2020. If this were reproduced nationwide, efficiency would deliver more than 130 GW of efficiency by 2020, easily covering all of the expected demand growth.

While wind and solar photovoltaics get all the attention in the renewable energy arena because of their rapid growth, perhaps the most important renewable technology it is concentrated solar thermal power (CSP), which I call solar baseload. Recently, CSP has come roaring back after more than a decade of neglect with more than a dozen providers building projects in two dozen countries.6

Utilities in the American Southwest are already contracting for power at 14 to 15 cents/kWh. The modeling for the CPUC puts California solar thermal at 12.7 to 13.6 cents/kWh (including six hours of storage capacity)—and at similar or lower costs in the rest of the West. A number of players are adding low-cost storage that will make the power better than baseload (since it delivers peak power when demand actually peaks, rather than just delivering a constant amount of power 24/7). More importantly, baseload solar has barely begun dropping down the experience curve as costs are lower from economies of scale and the manufacturing learning curve. The CPUC analysis foresees the possibility that CSP could drop 20% in cost by 2020.

A 2006 report by the Western Governors Association “projects that, with a deployment of 4 GW, total nominal cost of CSP electricity would fall below 10¢/kWh.”7 And that deployment will likely occur before 2015. Indeed, the report noted the industry could “produce over 13 GW by 2015 if the market could absorb that much.” The report also notes that 300 GW of CSP capacity can be located near existing transmission lines. As an aside, wind power is a very good match with CSP in terms of their ability to share the same transmission lines, since a great deal of wind is at night, and since CSP, with storage, is dispatchable.

There is enough baseload solar potential in one 90-mile-by-90-mile grid in the American Southwest to power the whole country. A similar grid in North Africa could power all of Europe. India and China have equally large solar resources, more than enough to replace new coal.

And CSP is a decades old technology, that uses mostly commodity materials--steel, concrete and glass. The central component, a standard power system routinely used by the natural gas industry today, would create steam to turn a standard electric generator. Plants can be built rapidly, in two to three years. It would be straightforward to build CSP systems at whatever rate industry and governments needed, ultimately 50 to 100 gigawatts a year growth or more–if we got serious about global warming and technology deployment.

Once again, it is crystal clear “we can solve our energy problems with existing technologies today, without the need for breakthrough innovations."

1. http://climateprogress.org/2008/04/30/is-450-ppm-or-less-politically-possible-part-3-the-breakthrough-technology-illusion/

2. http://www.technologyreview.com/blog/guest/22087/

3. http://www.salon.com/news/feature/2008/07/28/energy_efficiency/

4. http://climateprogress.org/2008/04/24/recycled-energy-a-core-climate-solution/

5. http://www.ethree.com/GHG/E3_CPUC_GHGResults_6May08.pdf

6. http://climateprogress.org/2008/04/14/concentrated-solar-thermal-power-a-core-climate-solution/

7. http://www.westgov.org/wga/initiatives/cdeac/Solar-full.pdf

The Opposition's closing statement:

Aug 27th 2008 | PETER MEISEN

After reviewing all of the Energy Debate comments, many stated that it’s not either we deploy or focus on breakthroughs–it is and/both.

Michael Eckhart of ACORE rightfully states that

“we can begin to solve our energy problems with today’s technology, so there is no need for delay in getting started, but we will need breakthroughs across all of these technology arenas to have the tools for a carbon-free society that is sustainable.”

At last year’s World Energy Congress (WEC), one-quarter of the exhibiters featured renewable and efficient technologies. This was a tenfold increase from three years prior. For me, it was the most significant demonstration of these new technologies breaking into the energy establishment of coal, oil, gas and nuclear.

The Global Energy Network Institute prepared our participation by challenging the E8 (eight largest global utilities) with a proposition and set of questions that are worth repeating. The WEC daily news deemed them important enough to publish for the entire convention–and I offer them here so you can pose them to your own energy ministry and utilities:

“We are all interconnected today–linked across borders via gas pipelines, electric grids, telecommunication cable, and global finance. The new international factor facing our industry is carbon. Power production and the transport sector create two-thirds of global CO2 emissions, and the public is becoming vocal in their demand for cleaner energy and fuels. It seems certain that a 'market price per ton of carbon' will soon be enacted and will dramatically alter the cost equation for fossil fuels.

As a member of the E8, you are a global leader in how we produce electricity. The rules of the game are changing. In preparation for the 20th World Energy Congress, we put forward several questions for consideration by you and your staff:

1. Renewable Potential: What’s the potential capacity of all the renewable resources in your service territory, including your neighbours? Could you meet most of your electrical requirements from these non-carbon resources? (Five nations already do: Norway, Iceland, Brazil, Canada and New Zealand.)

2. Interconnection: How could these renewables be integrated into your electric grid and provide the reliability, security and immediate dispatch that your customers require?

3. Fossil Fuel Transition: As existing fossil fuel and nuclear plants need replacing in the coming years, could renewables meet that replacement capacity using the same criteria?

4. Design: In the coming carbon constrained world of the future, how would you strategically plan, engineer and build this out?”

Additionally, every business and citizen needs to ask a couple of personal questions. First, does my electricity come from clean or polluting energy? Second, what fuel powers your car, bus, truck, train or plane? These two choices, made by billions of people, will determine the future of our planet.

Undeveloped in this debate, but critically important, are government policies that provide the grease to accelerate this transition. Katie Fehrenbacher of Earth2Tech and Joseph Romm make the convincing case for California’s decoupling utility profits and energy efficiency programmes. This should be initiated by utility commissions across the nation. Global subsidies and incentives for fossil fuels and nuclear power are ten times that for renewable and clean tech. This is upside down in a world facing peak oil and climate change.

The proactive way to shift the direction of climate change is to shift our energy investments.

The International Energy Agency stated that $45 trillion will be required in the next few decades to meet the world’s growing energy demand and reduce CO2 emissions. To tackle climate change, it is essential that renewables, energy efficiency and future fuels receive the lion’s share of this investment.

Entrepreneurs, venture capitalists, pension funds and individual investors will fund this transition–and benefit handsomely. The opportunities are global, especially as India and China strive to raise the living standards of 2.5 billion people. Until recently, these two nations have followed the same energy path as the west. Solving climate change will require the West and East to co-operate, moving beyond carbon-based fuels and investing in the transition to renewables and clean technologies.

The commercialisation of these renewables has attracted multinational energy and engineering firms to initiate significant financial commitments. Yet solar, wind and geothermal remain less than 3% of the global energy mix. With market barriers removed, some experts forecast that renewables will supply 50% of our energy requirements in 2050. That would be a 1,700% increase from today’s market share, offering investors strong potential returns.

Efficiencies are coming from government policy and technical breakthroughs. Several countries and states are banishing the incandescent bulb for the more efficient compact florescent. Looking forward, the organic light-emitting diode is the next generation of energy efficient lighting, using just a fraction of today’s wattage-wasting bulbs. Gas-electric hybrid cars get 2-3 times the mileage of current automobiles, with the promise of plug-in hybrids getting over 100 miles per gallon. Promising second generation liquid fuels include algae, switch grass and jatropha curcas seeds. Breakthroughs will double solar cell efficiency and wind turbines have grown to six megawatt capacity. Smart grids, feed-in laws and net metering propel rooftop photovoltaics. Each of these new technologies is a huge business opportunity, creating new industries and jobs.

If we continue building and funding the world’s energy needs as we did in the last century, we deserve the consequences. If we embrace the energy technology revolution, investments in clean energy solutions will flourish and dominate the 21st Century. Climate change will be mitigated by shifting investments to solutions that de-carbonise the entire energy value chain. To track our progress, follow the Keeling Curve and the money.

Finally, I want to extend my thanks to Vijay Vaitheeswaran and the editors at Economist.com for hosting this debate, Joseph Romm for his thoughtful analysis, the featured participants and all those who took time to comment and engage in this critical issue of our time. It was an honour.


Yorkshireminer said...

The trouble is with alternative tech is that there is such a long lead in time. And we don't have the time we have left it too late. What gets up my nose is that the people who say we can change to renewables don't understand this. Let me give you just one example PV. The PV industry in America is growing at the rate of approximately 50% per year, sounds great bring out the marching bands hip hip horay good old Yankee technology and get up and go, we are saved. What the numb nuts don't realise is that PV produces only 0.1% of Americas total energy and if you were to double it every year for the next four years you would still not produce more than 1% of you energy, the same is for most of the other renewables and most of them have limits to growth, geothermal and hydro, only wind has any chance of success and that is hampered by the fact that it is intermittent and we have no cheap way of storing electricity, millions of Lithium Ion Batteries is just not on. The other thing that everybody seemed to have missed that when Oil declines whether it is linear or expotentional it will be at a rate far greater than our ability to replace it with renewables. The North Sea Oil is diminishing at 7% Chantrell at 14% 6 years at 7% means that you have lost over one third of you energy source for your industry which will have contracted most likely at a higher rate and with it a corresponding contraction in the money supply which will mean you will have even less capital and energy to fund the renewable program which will cost even more as you try and ramp it up quickly. The Government of a country like Britain will be faced with an even more insidious choice as the economy sinks into depression, millions will have been made redundant and living on Welfare, which will be competing for the limited resources of a diminished economy. It will be a choice between windmill or butter. That is without Murphy's law or chaos. Chaos it is easy to predict that it will happen, but certainly not when. I don't know if you have any memories of the miners strike in the 70s, I certainly do, smiling Joe Gormley didn't win because he had a better argument, he won because Teddy Teeth Heath had been told that if the country went from a three day week to a two day week it would collapse, into chaos. This time we wont be able to call off the strike to get industry moving. I think the technical term is positive feed back loop. I haven't even mentioned Murphy's law. I am thinking something on the line of Archduke, Sarajevo, idiot with a gun. If you have difficulty thinking about a scenario think middle east, Jews, idiot with an Atomic bomb. When that happens we will soon know how the feral brats of the Religion of the permanently offended will react. They wont likely be too pleased as the Government will have most likely cut down the size of their welfare tit beforehand to pay for the windmills, the Government will be jousting at in there PC addled minds . Have a nice day Chris , by the way have you decided where you are going you haven't got much time. By the way and now for something not completely different but I think you will find interesting and I think you will understand why I found it interesting. I downloaded an E-Book several weeks ago which I have just finished reading and I am going to include a quote, it is by a chap called Jeavons I don't know if you have heard about him he was writing in the middle of the Victorian era about the British Coal industry. It seems so relevant today.

Quote :- To say the simple truth, will it not appear evident, soon after the final adoption of Free Trade principles, that our own resources are just those to which such principles ought to be applied last and most cautiously ? To part in trade with the surplus yearly interest of the soil may be unalloyed gain, but to disperse so lavishly the cream of our mineral wealth is to be spendthrifts of our capital—to part with that which will never come back.

energybalance said...

Hi David!

"Jeavons' Paradox" right? Still and even more relevant today!

Trying to sort-out business arrangements etc. before that decision of where to go is made.

I can see the government struggling to pay the benefits bill, as they have been sanctioned by the EU for overspending and overborrowing (5.3% as opposed to the limit of 3%), 53 billion quid in real money.

Half the country is on benefits of some kind if you include pensions and when they can't afford to keep them all any more, all hell will break loose.

As always you make profound common sense, especially about the lead-in time! I've commented before that if the world had begun a serious search for alternatives 30-odd years ago when OPEC caused the first oil crises we might be realistically closer to some solutions now. But, as you say, we've left it too late.

In a nutshell, the service economy will begin to collapse )it's happening already), people will lose their jobs, there will be less tax going into the pot and more being taken out of it...

crash, disaster! At worst, anarchy!
And the liberal-thinkers let it all happen. People often blame socialism or conservatism but the pernicious force is liberalism, because it doesn't stand up for one thing or another, and simply lets the lowest common denominator yield the final sum.

...I think we can see what that it going to be in a social context.