Monthly Archives: May 2019

New Energy Economy:An Exercise in Magic Thinking–Part 3 The Physics-Driven Cost Realities of Wind and Solar

Continuing with the serialization of Mark Mills report titled New Energy Economy: An Exercise in Magic Thinking.


The Physics-Driven Cost Realities of Wind and Solar   Part 3

The technologies that frame the new energy economy vision distill to just three things: windmills, solar panels, and batteries.10 While batteries don’t produce energy, they are crucial for ensuring that episodic wind and solar power is available for use in homes, businesses, and transportation.

Yet windmills and solar power are themselves not “new” sources of energy. The modern wind turbine appeared 50 years ago and was made possible by new materials, especially hydrocarbon-based fiberglass. The first commercially viable solar tech also dates back a half-century, as did the invention of the lithium battery (by an Exxon researcher).11

Over the decades, all three technologies have greatly improved and become roughly 10-fold cheaper.12 Subsidies aside, that fact explains why, in recent decades, the use of wind/solar has expanded so much from a base of essentially zero.

Nonetheless, wind, solar, and battery tech will continue to become better, within limits. Those limits matter a great deal—about which, more later—because of the overwhelming demand for power in the modern world and the realities of energy sources on offer from Mother Nature.

With today’s technology, $1 million worth of utility-scale solar panels will produce about 40 million kilowatt-hours (kWh) over a 30-year operating period (Figure 2). A similar metric is true for wind: $1 million worth of a modern wind turbine produces 55 million kWh over the same 30 years.13 Meanwhile, $1 million worth of hardware for a shale rig will produce enough natural gas over 30 years to generate over 300 million kWh.14    That constitutes about 600% more electricity for the same capital spent on primary energy-producing hardware.15

The fundamental differences between these energy resources can also be illustrated in terms of individual equipment. For the cost to drill a single shale well, one can build two 500-foot-high, 2-megawatt (MW) wind turbines. Those two wind turbines produce a combined output averaging over the years to the energy equivalent of 0.7 barrels of oil per hour. The same money spent on a single shale rig produces 10 barrels of oil, per hour, or its energy equivalent in natural gas, averaged over the decades.16

The huge disparity in output arises from the inherent differences in energy densities that are features of nature immune to public aspiration or government subsidy. The high energy density of the physical chemistry of hydrocarbons is unique and well understood, as is the science underlying the low energy density inherent in surface sunlight, wind volumes, and velocity.17 Regardless of what governments dictate that utilities pay for that output, the quantity of energy produced is determined by how much sunlight or wind is available over any period of time and the physics of the conversion efficiencies of photovoltaic cells or wind turbines.

These kinds of comparisons between wind, solar, and natural gas illustrate the starting point in making a raw energy resource useful. But for any form of energy to become a primary source of power, additional technology is required. For gas, one necessarily spends money on a turbo-generator to convert the fuel into grid electricity. For wind/solar, spending is required for some form of storage to convert episodic electricity into utility-grade, 24/7 power.


Coming up next is  Part 4   The High Cost of Ensuring Energy Availability


New Energy Economy: An Exercise in Magical Thinking—Part 2 Moonshot Policies and the Challenge of Scale

Continuing the serialization of the Mark Mills report, “New Energy Economy: An Exercise in Magical Thinking.


Moonshot Policies and the Challenge of Scale

The universe is awash in energy. For humanity, the challenge has always been to deliver energy in a useful way that is both tolerable and available when it is needed, not when nature or luck offers it. Whether it be wind or water on the surface, sunlight from above, or hydrocarbons buried deep in the earth, converting an energy source into useful power always requires capital-intensive hardware.

Considering the world’s population and the size of modern economies, scale matters. In physics, when attempting to change any system, one has to deal with inertia and various forces of resistance; it’s far harder to turn or stop a Boeing than it is a bumblebee. In a social system, it’s far more difficult to change the direction of a country than it is a local community.

Today’s reality: hydrocarbons—oil, natural gas, and coal—supply 84% of global energy, a share that has decreased only modestly from 87% two decades ago (Figure 1).[3] Over those two decades, total world energy use rose by 50%, an amount equal to adding two entire United States’ worth of demand.[4]

The small percentage-point decline in the hydrocarbon share of world energy use required over $2 trillion in cumulative global spending on alternatives over that period.[5] Popular visuals of fields festooned with windmills and rooftops laden with solar cells don’t change the fact that these two energy sources today provide less than 2% of the global energy supply and 3% of the U.S. energy supply.

The scale challenge for any energy resource transformation begins with a description. Today, the world’s economies require an annual production of 35 billion barrels of petroleum, plus the energy equivalent of another 30 billion barrels of oil from natural gas, plus the energy equivalent of yet another 28 billion barrels of oil from coal. In visual terms: if all that fuel were in the form of oil, the barrels would form a line from Washington, D.C., to Los Angeles, and that entire line would increase in height by one Washington Monument every week.

To completely replace hydrocarbons over the next 20 years, global renewable energy production would have to increase by at least 90-fold.[6] For context: it took a half-century for global oil and gas production to expand by 10-fold.[7] It is a fantasy to think, costs aside, that any new form of energy infrastructure could now expand nine times more than that in under half the time.

If the initial goal were more modest—say, to replace hydrocarbons only in the U.S. and only those used in electricity generation—the project would require an industrial effort greater than a World War II–level of mobilization.[8] A transition to 100% non-hydrocarbon electricity by 2050 would require a U.S. grid construction program 14-fold bigger than the grid build-out rate that has taken place over the past half-century.[9] Then, to finish the transformation, this Promethean effort would need to be more than doubled to tackle nonelectric sectors, where 70% of U.S. hydrocarbons are consumed. And all that would affect a mere 16% of world energy use, America’s share.

This daunting challenge elicits a common response: “If we can put a man on the moon, surely we can [fill in the blank with any aspirational goal].” But transforming the energy economy is not like putting a few people on the moon a few times. It is like putting all of humanity on the moon—permanently.


I like that last paragraph.    Next up is The Physics-Driven Cost Realities of Wind and Solar.  Part 3.


New Energy Economy: An Exercise in Magical Thinking–Part 1— Introduction


This posting will provide the Introduction to Mark Mills report titled “New Energy Economy: An Exercise in Magical Thinking”.

Mills is a scientist.  Most of the reports that say it is possible to eliminate fossil fuel’s use and replace them with wind and solar, seem to be written by economists.  I have nothing against economists as my daughter and son are economists.  It is just that I fear that the authors accept the alarmists visions then hang some economic words on that skeleton.  Let’s look at Mills’ VC:

Mark P. Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science, where he co-directs an Institute on Manufacturing Science and Innovation. He is also a strategic partner with Cottonwood Venture Partners (an energy-tech venture fund). Previously, Mills cofounded Digital Power Capital, a boutique venture fund, and was chairman and CTO of ICx Technologies, helping take it public in 2007. Mills is a regular contributor to and is author of Work in the Age of Robots (2018). He is also coauthor of The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy (2005). His articles have been published in the Wall Street Journal, USA Today, and Real Clear. Mills has appeared as a guest on CNN, Fox, NBC, PBS, and The Daily Show with Jon Stewart. In 2016, Mills was named “Energy Writer of the Year” by the American Energy Society.

Earlier, Mills was a technology advisor for Bank of America Securities and coauthor of the Huber-Mills Digital Power Report, a tech investment newsletter. He has testified before Congress and briefed numerous state public-service commissions and legislators. Mills served in the White House Science Office under President Reagan and subsequently provided science and technology policy counsel to numerous private-sector firms, the Department of Energy, and U.S. research laboratories.

Early in his career, Mills was an experimental physicist and development engineer at Bell Northern Research (Canada’s Bell Labs) and at the RCA David Sarnoff Research Center on microprocessors, fiber optics, missile guidance, earning several patents for his work. He holds a degree in physics from Queen’s University in Ontario, Canada.



A growing chorus of voices is exhorting the public, as well as government policymakers, to embrace the necessity— indeed, the inevitability—of society’s transition to a “new energy economy.” Advocates claim that rapid technological changes are becoming so disruptive and renewable energy is becoming so cheap and so fast that there is no economic risk in accelerating the move to—or even mandating—a post-hydrocarbon world that no longer needs to use much, if any, oil, natural gas,  or coal. Central to that worldview is the proposition that the energy sector is undergoing the same kind of technology disruptions that Silicon Valley tech has brought to so many other markets. Indeed, “old economy” energy companies are a poor choice for investors, according to proponents of the new energy economy, because the assets of hydrocarbon companies will soon become worthless, or “stranded.”1 Betting on hydrocarbon companies today is like betting on Sears instead of Amazon a decade ago. “Mission Possible,” a 2018 report by an international Energy Transitions Commission, crystallized this growing body of opinion on both sides of the Atlantic.2 To “decarbonize” energy use, the report calls for the world to engage in three “complementary” actions: aggressively deploy renewables or so-called clean tech, improve energy efficiency, and limit energy demand. This prescription should sound familiar, as it is identical to a nearly universal energy-policy consensus that coalesced following the 1973–74 Arab oil embargo that shocked the world. But while the past half-century’s energy policies were animated by fears of resource depletion, the fear now is that burning the world’s abundant hydrocarbons releases dangerous amounts of carbon dioxide into the atmosphere. To be sure, history shows that grand energy transitions are possible. The key question today is whether the world is on the cusp of another. The short answer is no. There are two core flaws with the thesis that the world can soon abandon hydrocarbons. The first: physics realities do not allow energy domains to undergo the kind of revolutionary change experienced on the digital frontiers. The second: no fundamentally new energy technology has been discovered or invented in nearly a century—certainly, nothing analogous to the invention of the transistor or the Internet. Before these flaws are explained, it is best to understand the contours of today’s hydrocarbon-based energy economy and why replacing it would be a monumental, if not an impossible, undertaking.


The next installment of Mills’ report will be “Moonshot Policies and the Challenge of Scale”. That will be followed by “The Physics—Driven Cost Realities of Wind and Solar.

The numbers that appear at the end of some sentences  are references.  I will publish all those at the end of serialized report.


Can Wind and Solar Sources Replace Fossil Fuels by 2050?

Can wind and solar sources replace fossil fuels by 2050?   Beginning with today’s positing, I will let Mark Mills answer that question.  I plan a series of posting on this topic beginning with  a summary of Mills’ views. The summary is a condensation of his report titled “THE “NEW ENERGY ECONOMY”: AN EXERCISE IN MAGICAL THINKING “.  I plan to serialized the report as a follow-up for those who want to dig deeper.  I bet you will find the serialized posting to be enlightening and what little math is used is  limited to multiplication, addition and subtraction.



Want an Energy Revolution?

by Mark Mills

Throughout history, some 60 percent to 90 percent of every nation’s economy has been consumed by food and fuel costs. Hydrocarbons changed the way that humans organize their productive capacity. The coal age, followed by the oil age, and now by the ascendant age of natural gas, has (at least for developed nations) driven the share of GDP devoted to acquiring food and fuel down to around 10 percent. That transformation constitutes one of the great pivots for civilization.

Many analysts claim that yet another such consequential energy revolution is upon us: “clean energy,” in the form of wind turbines, solar arrays, and batteries, they say, is about to become incredibly cheap, making it possible to create a “new energy economy.” Polls show that nearly 80 percent of voters believe that America is “capable of creating a new electricity system.”

We can thank Silicon Valley for popularizing “exponential change” and “disruptive innovations.” The computing and communications revolutions that have transformed many industries have also shaped both expectations and rhetoric about how other technologies evolve. We hear claims, as one Stanford professor put it, that clean tech will follow digital technology in a “10x exponential process which will wipe fossil fuels off the market in about a decade.” Or, as the International Monetary Fund recently summarized, “smartphone substitution seemed no more imminent in the early 2000s than large-scale energy substitution seems today.” The mavens at Singularity University tell us that with clean tech, we’re “on the verge of a new, radically different point in history.” Solar, wind, and batteries are “on a path to disrupt” the old order dominated by fossil fuels.

Never mind that wind and solar—the focus of all “new energy economy” aspirations, including its latest incarnation in the Green New Deal—supply just 2 percent of global energy, despite hundreds of billions of dollars in subsidies. After all, it wasn’t long ago that only 2 percent of the world owned a pocket-sized computer. “New energy economy” visionaries believe that a digital-like energy disruption is not just possible, but imminent. One professor predicts that we will see an “Apple of clean energy.”

As it happens, energy does have something to do with the fact that today’s smartphones are much cheaper and more powerful than a room-size IBM mainframe from the 1980s. The essential feature of that transformation is that engineers collapsed the energy appetite and size of transistors, consequently increasing their number per chip roughly twofold every two years. In other words, computing power per energy unit doubled five times per decade. The compound effect of that kind of progress—formally dubbed Moore’s Law, after Intel cofounder Gordon Moore—has indeed caused a “disruptive” revolution. A single iPhone at 1980 energy efficiency would require as much power as a Manhattan office building. Similarly, a single data center at 1980 efficiency would require as much power as the entire U.S. grid. But because of efficiency gains, the world today has billions of smartphones and thousands of datacenters.

A similar transformation in how energy is produced or stored isn’t just unlikely: it’s impossible. Drawing an analogy between information production and energy production is a fundamental category error. They entail different laws of physics. Logic engines don’t produce physical action or energy; they manipulate the idea of the numbers one and zero. Silicon logic is rooted in simply knowing and storing the position of a binary switch—on or off.

But the energy needed to move a ton of people, heat a ton of steel or silicon, or grow a ton of food is determined by properties of nature, whose boundaries are set by laws of gravity, inertia, friction, and thermodynamics—not clever software or marketing. Indeed, the differences between the physical and virtual are best illustrated by the fact that, using mathematical magic, one can do things like “compress” information to reduce the energy needed to transport that information. But in the world of humans and objects with mass, comparable “compression” options exist only in Star Trek.

If, in some alternative universe, the performance of silicon solar cells followed Moore’s Law, a single postage-stamp-size solar cell could fuel the Empire State Building. Similarly, a single battery the size of a book would cost 3 cents and power a jumbo jet to Asia. Such things happen only in comic books because, ultimately, physics, not policies, dictates the possibilities—and thus the economics—for energy technologies, regardless of subsidies and mandates.

Spending $1 million on wind or solar hardware in order to capture nature’s diffuse wind and sunlight will yield about 50 million kilowatt-hours of electricity over a 30-year period. Meantime, the same money spent on a shale well yields enough natural gas over 30 years to produce 300 million kilowatt-hours. That difference is anchored in the far higher, physics-based energy density of hydrocarbons. Subsidies can’t change that fact.

And then batteries are needed, and widely promoted, as the way to convert wind or solar into useable on-demand power. While the physical chemistry of batteries is indeed nearly magical in storing tiny quantities of energy, it doesn’t scale up efficiently. When it comes to storing energy at country scales, or for cargo ships, cars and aircraft, engineers start with a simple fact: the maximum potential energy contained in hydrocarbon molecules is about 1,500 percent greater, pound for pound, than the maximum theoretical lithium chemistries. That’s why the cost to store a unit of energy in a battery is 200 times more than storing the same amount of energy as natural gas. And why, today, it would take $60 million worth of Tesla batteries—weighing five times as much as the entire aircraft—to hold the same energy as is held in a transatlantic plane’s onboard fuel tanks.

For a practical example of the physics-anchored gap between aspiration and reality, consider Florida Power & Light’s (FPL) recently announced plan to replace an old gas-fired power station with the world’s biggest battery project—promised to be four times bigger than the current number one, a system Tesla installed, to much fanfare, last year in South Australia. The monster FPL battery “farm” will be able to store just two minutes of Florida’s electricity needs. That’s not going to change the world, or even Florida.

Moreover, it takes the energy equivalent of about 100 barrels of oil to manufacture a battery that can store the energy equal to one oil barrel. That means that batteries fabricated in China (most already are) by its predominantly coal-powered grid result in more carbon-dioxide emissions than those batteries, coupled with wind/solar, can eliminate. It’s true that wind turbines, solar cells, and batteries will get better, but so, too, will drilling rigs and combustion engines. The idea that “old” hydrocarbon technologies are about to be displaced wholesale by a digital-like, clean-tech energy revolution is a fantasy.

If we want a disruption to the energy status quo, we will need new, foundational discoveries in the sciences. As Bill Gates has put it, the challenge calls for scientific “miracles.” Any hoped-for technological breakthroughs won’t emerge from subsidizing yesterday’s technologies, including wind and solar. The Internet didn’t emerge from subsidizing the dial-up phone, or the transistor from subsidizing vacuum tubes, or the automobile from subsidizing railroads. If policymakers were serious about the pursuit of the next energy revolution, they’d be talking a lot more about reinvigorating support for basic science.

It bears noting that over the past decade, U.S. production of oil and natural gas has increased by 2,000 percent more than the combined growth of (subsidized) wind and solar. Shale technology has utterly transformed the global energy landscape. After a half-century of hand-wringing about import dependencies, America is now a major exporter. Now that’s a revolution.

Want an Energy Revolution?