Preparing for Peak Oil
Business people and individuals will need to implement robust systems and products in anticipation of peak oil. By robust, I mean systems or products that can substitute one raw material for another with relative ease, and still achieve a given function.
It is natural to think of transportation systems whenever we think of oil, and indeed plug in electric cars and flexible fuel vehicles are more robust than a standard car, in that several different raw materials (many fuels/materials can be used to generate electricity, various mixes of ethanol and types of ethanol can be used to power FFVs) can be used interchangeably from the consumers perspective.
But peak oil will require more than just robust transport, and by the way rail and water based shipping could prove a much stronger link than air or truck transport at least for goods. The principle applies to energy systems themselves, shorter supply chains are good but being able to use multiple fuel sources or readily switch between fuel sources is even better. Robust energy systems tend to be smaller distributed energy systems rather than big centralized systems. We currently dismiss smaller systems because they are less efficient (at least to manage) than a centralized system, but people and businesses should also consider how a system under stress will behave. The NY power outage from a few years ago illustrates the consequences of a relatively brief system collapse, while California’s rolling black-outs from a couple years before that show that even stress that doesn’t collapse a system can cause noticeable trouble/damage.
Corporate global logistics chains will have to be revamped to make them more robust, not just because peak oil will increase transportation costs, but also because peak oil will result in hard to predict delays sporadic shortages/outages not only of fuels but of the numerous other systems these supply chains rely on today. I feel that we are beginning to see such shortages/outages ironically enough in oil company supply chains as the relative value of fuel stores increases the incentives for governments (Russia, Venezuala) to play a more active roll in their distribution, as well as non-government/sectarian forces/criminal elements (Nigeria, Iraq) trying to extract a greater portion of the existing fuel store value.
Companies most sensitive to outages, or at least public concern about outages, such as global banks may be furthest along in implementing robust systems. Both 9/11 and the SARS virus scare of a few years ago tested/reinforced the message that robust exchange/trading and record keeping systems and flexible staffing arrangements during a transport/health crisis pay off big time when the unexpected (or at least unpredictable) happens.
At the beginning of the Solar Century.
It may drive some economists and people in the ‘big energy’ business crazy (i.e. fossil + nukes), but solar energy is about more than just dollars and cents. Solar is about independence on an individual scale. In the same way that the automobile changed life in the 20th century, solar panels will become so dominant in the coming decades that by mid-century it will touch everyone’s daily lives in dozens of ways.
Never mind the EIA forecasts that predict less than 1% of our energy supply coming from solar in 2030 (or whatever time frame they adopt), within the next two decades solar will become the cheapest source of energy. And that change will radically alter how we power our lives.
My view differs radically from the way existing big energy firms look at the picture, so let me explain the reasons for it. First of all, we don't have to worry about running out of sunlight. Every fossil source, even coal and nuclear will run out in a couple centuries, if not sooner. Yeah an individual solar panel may die after 20 or 30 years but it can be replaced (hopefully recycled) with a better version. Secondly people love solar power...I think its almost hardwired in our genes. Other than cost (and a few grumbles about the industrial processes used to make it--which is improving all the time), I don't think I've ever heard an objection to solar. A few stick-in-the-muds complain about nighttime and clouds, but a bit of storage (i.e. batteries, thermal, hydro) will generally solve this objection.
I see a direct analogy between solar panels and personal computers (compared to power plants and mainframes). There is the distributed versus centralized aspect which is well understood. And both solar and PCs (especially 20 years ago, in the early days) represent a considerable upfront capital outlay. But both solar panels and PCs also offer convenience and ownership benefits which I believe amounts to independence on an individual scale.
The analogy is not perfect since solar panels simply provide power, while PCs have clearly enabled an information revolution, but 20 years ago computers were really just glorified typewriters/high priced calculators. Even 10 years ago the web of connected PCs that we now call the Internet was slightly more than a curiosity, although PCs had demonstrated their worth in the workplace. Solar panels are well placed to come down in price in the coming decade (indeed they have fallen in price by a factor of 4 over the past 14 years), and as they continue to fall in price their uses (the number of power market niches they cost effectively fill) will multiply much like PCs. Solar panels today cost only 2x grid delivered power.
Solar will also allow developing countries to leapfrog (to a large degree) the developed worlds energy infrastructure. In a dozen years it is likely a citizen in Africa will find it cheaper to buy an electric vehicle and a set of solar panels to power them (possible even a portable set allowing refueling anywhere) than to buy an internal combustion engine and maintain the supply chain needed to get gasoline where s/he needs it.
With every doubling of solar panel manufacturing capacity, the cost of solar has fallen by 20%. [Going from 100 MW capacity to 200 MW capacity is a doubling.] By 2010 the world wide solar panel capacity is expected to increase by a factor of 4 (i.e. two doublings) which means costs should fall by over 35%. Even if the rate of cost decline slows in the future (i.e. drops to 15% per doubling), the cost of solar panels will still fall by 50% within about 4 capacity doublings. If we get 2 doublings in 4 years, we should easily reach 4 doublings in 10 years.
The industry is in the midst of a silicon capacity squeeze (the price of silicon, the main ingredient, and about 50% of cost of a solar panel increased by ~2.5x in the past 3-4 years) which has prevented prices from falling at historic rates the past couple years (indeed prices have risen about 10-15%) but that will be resolved over the next year or so as 2x the current silicon capacity comes on line.
Global capacity is almost 2 GW today and should easily reach ~25 GW in the next ten years. At that point solar panels will reach grid parity. No subsidies will be needed. Solar will be the least expensive power option (power markets with above average costs will reach this point sooner). This will represent a ‘tipping point’ in the power markets and demand for solar panels will go through the roof. Literally.
Companies will form simply to lease roof space from homeowners who can't afford the upfront cost of solar and install it for them. Companies like this already exist, but they pay the homeowner with a stable electricity rate, instead of cash upfront. Imagine when every homeowner can get paid a couple thousand dollars a year (for 20+ years) to let someone cover their house with solar. Within fifty years time I think utilities will cease to exist in their electron broadcast model, they may retain a niche as electron traffic cops shuttling energy around the country/grid as needed, but the revenues they generate from producing non-renewable electrons will evaporate.
Solar panel manufactures will be able to sell as many panels as they can make until solar exceeds 100% of annual capacity additions. Which could happen if old power plants are shut down b/c they are no longer economically competitive. Compound annual capacity growth rates will shoot up from ~50% today to over 100% and stay there for years (hopefully panel makers/silicon suppliers will be able to manage the growth better as a result of our current squeeze). While costs of manufacturing panels continues to drop b/c of capacity doubling, prices to consumers will likely stay at about grid parity for several years while more expensive sources are displaced. Solar panel manufactures will make huge (and growing) amounts of money at this point. Eventually supply will exceed demand and prices could fall even further as panel makers play musical chairs with their margins.
A significant benefit of solar power that will become apparent (rather soon) is their predictable performance over long time periods. Businesses like predictability…and homeowners like predictability too. Even today, despite the relative high cost of solar, because it is a long lived (20-30 year) asset, buying a home with solar panels installed reduces your power/utility bill more than the extra cost of the panels increases your mortgage payment. Remarkably then, if you are buying a new house in many US markets, buying one with solar panels improves your cash flow (i.e. saves you money) from day one. Plus you don’t need to worry about energy prices rising (at least the part your solar panels supply) for the next 20-30+ years.
Point Rolling Stone
I can't at the moment remember if I commented on Rolling Stone's recent 40 year anniversary issue which was chock full of great interviews with music icons, movie icons and politicians involved in the late 1960s. Anyway it was well worth a read.
This week's Rolling Stone does a wonderful job of advancing the debate on what we can do about global warming. In one article RS interviews
Al Gore to get his analysis of how America can respond to the looming climate crisis. In another RS explores the Bush Administrations actions to stall/obfuscate/deny our understanding of global warming. The expose lays bare the fact that ideology has trumped science in 'W's White House, honestly the article makes you wonder who our government works for. In an essay
Robert Kennedy considers several actions that our country can (indeed must--in one form or another) take to transition away from fossil fuels, while strengthening our economy and enhancing our environment.
Playing to sunlight's strengths
A couple ways to use direct solar energy to improve lighting systems.
The first is a
hybrid system where the sunlight it brought to traditional lighting fixtures and the standard/fluorescent bulbs are adjusted to compensate for solar interruptions to provide consistent ambient lighting with lower energy bills. This system just looks cool and will probably be widely adopted for new construction if it delivers even a fraction of what it promises.
The second system is a combination
skylight + solar tracker. In this case the skylight contains a system for reflecting (while tracking) added sunlight into the workspace. These solar tracking skylights are also integrated with the existing lighting fixtures to deliver consistent lighting by adjusting electric lights up or down as needed. While perhaps not as sexy as the hybrid system above, the solar-track can easily be integrated into an existing warehouse facility. In fact, I'd guess that many warehouse operations might prefer the solar track system assuming it works as advertised because of its simple intuitive design. In a lot of places high-tech may be interpreted as high-cost rightly or wrongly.
Either way, it is great to see new innovative ways of using solar power to offset fossil power.
Musings on the "cost" of switching to climate friendly energy
I keep seeing people refer to major economic costs of reducing CO2...and it got me wondering about these costs. How major are they? are they being purposefully overblown?
Will a doubling or a tripling of the cost of energy over the next 30 years end our way of life?
Clearly not, it would simply restore the proportion of our GDP spent on energy to where it was 30 years ago.
At worst 2-3x is what it will cost to switch to renewable sources of energy. Since renewable sources (minus hydro) make up less than 1% of our energy use, we can expect the average price of energy from renewable sources to fall as the various technologies reap greater economies of scale.
Solar PV is widely accepted to be one of the most expensive zero-carbon energy sources and that only costs twice the delivered cost of electricity from other sources. Wind is clearly competitive with fossil fuel sources (+/- 20%) depending on location. Both of these sources will benefit from an investment in energy storage (many methods are available to store energy) which could add anywhere from 0-50% to the price of energy.
Consider that the cost of oil has already quadrupled within the past decade and in the US oil comprises 40% of our total energy use. On average this means our energy costs have more than doubled during the past decade alone. Certainly not fun, but hardly the end of our way of life.
Furthermore even a modest 2.5% energy price inflation rate will double average costs in 30 years. Energy prices have been rising much faster than this in recent years. If you consider the likely future increases in energy prices, renewable sources represent an inflation hedge which could negate any “perceived” upfront premium. For example if energy prices rise much faster than we expect, today's investment in renewable sources may turn out to be no more expensive than continuing to use CO2 spewing fossil fuels.
Of course once society understands/admits/recognizes that energy will cost more in the future, we will use it more efficiently. Greater energy efficiency means that we will learn to use less of it to do what we want, which means that we won't end up spending so much more for energy in the future as (perhaps) we currently fear.
Death's a beach!
Better think twice about your next relaxing trip to the beach.
That hot sand/burning sensation could be from more than just the sun.
"The Army now admits that it secretly dumped 64 million pounds of nerve and mustard agents into the sea, along with 400,000 chemical-filled bombs, land mines and rockets and more than 500 tons of radioactive waste - either tossed overboard or packed into the holds of scuttled vessels."The maps supplied with the article/posting show dumps (virtually) everywhere.
How naive it is (of me) to be upset about mercury levels in the fish we eat...when there could be
WMDs in them?
Makes you wonder what/where we are dumping our crap these days.
This kinda shit makes me sick. I wonder how the fish feel?
Al Gore gets it right again
I spent the weekend reading Al Gore's book
Assault on Reason. It looks like it is pretty high on amazon's best seller list so he obviously doesn't need me to plug it, but THANK YOU AL.
The book is excellent. Obviously Gore thinks
America has been hijacked by ideologues over the past 6 years and he doesn't hold back enumerating the many flaws of the Bush administration. Still the
argument that he focuses on is how media, most especially television, has changed the way the public at large consumes news and information. Reading and writing is/was a many to many format that encourages thinking and rational debate, but radio and more especially TV are inherently one to many (i.e. broadcast) and one direction communication media that while providing a richer (full sensory) entertainment experience, actually discourage rational thinking. And let there be no doubt
Americans watch a lot of TV (I was astonished to learn that 4.5 hours/day is the norm!). His hope lies in the possibility that the
internet is a technology that can enable us to return to the many to many format which fosters rational debate.
The one to many format of TV, especially when very few massive conglomerates control the broadcasting
infrastructure creates conditions where a select few are able to control the flow of information to the public and with uncanny sophistication and precision manipulate the public using lots of 30 second advertisements. We are all in one sense aware of this, but nevertheless still fall prey to the many tricks advertisers employ. This manipulation is especially useful in election
campaigns, which means all successful campaigns use the tricks, which require lots of ads, which in turn require raising lots of money which in turn means that politicians must be especially attentive to wealthy campaign contributors/well funded special interests rather than the voters.
But the really effective parts of the book show the efforts of the secretive Bush Administration to
deceive the
American public about going to war in
Iraq, by scaring the public half out of its wits and on the flimsiest of pretexts wrest unchecked power (indeed virtually unlimited power) from the other branches of government. The unrestrained power grab by the executive has not only
diminished our standing in the world, but threatens the future of our republic. Gore enumerates many instances where Bush's contempt of the law is undermining the credibility and effectiveness of a system that has served us rather well for 230 years.
We must all hope (and work to ensure) that the next president is willing and able to bring our country back to a more historically consistent and stable relation between the branches of government at home, and willing to work internationally to establish frameworks where we work together with our allies on the many inter-related pressing problems of the new century.
Updates on big wind and solar
There have been a couple happy news stories about
wind energy installations and a
solar energy installation recently.
The high level take aways on wind:
1) Over 4,500 MW of wind power projects are in the process of being built for completion this year and early next year.
2) At the end of the first quarter, total installed wind power capacity was 11,699 MW.
That still represents less about 0.8% of US power production, but we will pass the 1% threshold by early 2008. Germany gets 7% of its power from wind and Denmark 20%...so we have lots of room to increase our wind capacity.
The 64 MW solar thermal installation, Nevada One started producing power today, after just 16 months of construction. It is nice to have multi-tens of megawatt scale solar projects to point to. And this is a super quick installation for the energy industry. Way to go parabolic troughs!
The cost of the plant was right around $4/W installed from the article and is expected to generate up to 134 million kilowatt-hours (kWh) of electricity per year. While this is a large plant for the solar world, it is small from the utility standpoint. If one builds plants 5x, 10x, 20x larger than this, people expect the cost per Watt to fall markedly due to economies of scale.
