Category Archives: fossil fuels

New Energy Economy: An Exercise in Magical Thinking Part 6 Batteries Cannot Save the Grid or the Planet


This is part 6 of the serialization of Mark Mills’ report, New Energy Economy: An Exercise in Magical Thinking.

A discussion  of batteries being proposed as backups for renewables is an important topic.  So, I have chosen to bring together that which Mills has written about them in one posting, making it somewhat long.  Consider the recent threat by the Chinese that they would withhold, from the US,  the mined products that are necessary to make these batteries. 

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 Batteries Cannot Save the Grid or the Planet    

Batteries are a central feature of new energy economy aspirations. It would indeed revolutionize the world to find a technology that could store electricity as effectively and cheaply as, say, oil in a barrel, or natural gas in an underground cavern.47 Such

Jump-starting Frankenstein’s monster

electricity storage hardware would render it unnecessary even to build domestic power plants. One could imagine an OKEC (Organization of Kilowatt-Hour Exporting Countries) that shipped barrels of electrons around the world from nations where the cost to fill those “barrels” was lowest; solar arrays in the Sahara, coal mines in Mongolia (out of reach of Western regulators), or the great rivers of Brazil.

 But in the universe that we live in, the cost to store energy in grid-scale batteries is, as earlier noted, about 200-fold more than the cost to store natural gas to generate electricity when it’s needed.48 That’s why we store, at any given time, months’ worth of national energy supply in the form of natural gas or oil.

 Battery storage is quite another matter. Consider Tesla, the world’s best-known battery maker: $200,000 worth of Tesla batteries, which collectively weigh over 20,000 pounds, are needed to store the energy equivalent of one barrel of oil.49 A barrel of oil, meanwhile, weighs 300 pounds and can be stored in a $20 tank. Those are the realities of today’s lithium batteries. Even a 200% improvement in underlying battery economics and technology won’t close such a gap.

Nonetheless, policymakers in America and Europe enthusiastically embrace programs and subsidies to vastly expand the production and use of batteries at grid scale.50 Astonishing quantities of batteries will be needed to keep country-level grids energized—and the level of mining required for the underlying raw materials would be epic. For the U.S., at least, given where the materials are mined and where batteries are made, imports would increase radically. Perspective on each of these realities follows.

 How many batteries would it take to light the nation? A grid based entirely on wind and solar necessitates going beyond preparation for the normal daily variability of wind and sun; it also means preparation for the frequency and duration of periods when there would be not only far less wind and sunlight combined but also for periods when there would be none of either. While uncommon, such a combined event—daytime continental cloud cover with no significant wind anywhere, or nighttime with no wind—has occurred more than a dozen times over the past century—effectively, once every decade. On these occasions, a combined wind/solar grid would not be able to produce a tiny fraction of the nation’s electricity needs. There have also been frequent one hour periods when 90% of the national electric supply would have disappeared.51

 So how many batteries would be needed to store, say, not two months’ but two days’ worth of the nation’s electricity? The $5 billion Tesla “Gigafactory” in Nevada is currently the world’s biggest battery manufacturing facility.52 Its total annual production could store three minutes’ worth of annual U.S. electricity demand. Thus, in order to fabricate a quantity of batteries to store two days’ worth of U.S. electricity demand would require 1,000 years of Gigafactory production.

Wind/solar advocates propose to minimize battery usage with enormously long transmission lines on the observation that it is always windy or sunny somewhere. While theoretically feasible (though not always true, even at country-level geographies), the length of transmission needed to reach somewhere “always” sunny/windy also entails substantial reliability and security challenges. (And long-distance transport of energy by wire is twice as expensive as by pipeline.)53

Building massive quantities of batteries would have epic implications for mining.  A key rationale for the pursuit of a new energy economy is to reduce environmental externalities from the use of hydrocarbons. While the focus these days is mainly on the putative long-term effects of carbon dioxide, all forms of energy production entail various unregulated externalities inherent in extracting, moving, and processing minerals and materials.

Radically increasing battery production will dramatically affect mining, as well as the energy used to access, process, and move minerals and the energy needed for the battery fabrication process itself. About 60 pounds of batteries are needed to store the energy equivalent to that in one pound of hydrocarbons. Meanwhile, 50–100 pounds of various materials are mined, moved, and processed for one pound of battery produced.54 Such underlying realities translate into enormous quantities of minerals—such as lithium, copper, nickel, graphite, rare earths, and cobalt—that would need to be extracted from the earth to fabricate batteries for grids and cars.55 A battery-centric future means a world mining gigatons more materials.56 And this says nothing about the gigatons of materials needed to fabricate wind turbines and solar arrays, too.57

Even without a new energy economy, the mining required to make batteries will soon dominate the production of many minerals. Lithium battery production today already accounts for about 40% and 25%, respectively, of all lithium and cobalt mining.58 In an all-battery future, global mining would have to expand by more than 200% for copper, by at least 500% for minerals like lithium, graphite, and rare earths, and far more than that for cobalt.59

Then there are the hydrocarbons and electricity needed to undertake all the mining activities and to fabricate the batteries themselves. In rough terms, it requires the energy equivalent of about 100 barrels of oil to fabricate a quantity of batteries that can store a single barrel of oil-equivalent energy.60

Given the regulatory hostility to mining on the U.S. continent, a battery-centric energy future virtually guarantees more mining elsewhere and rising import dependencies for America. Most of the relevant mines in the world are in Chile, Argentina, Australia, Russia, the Congo, and China. Notably, the Democratic Republic of Congo produces 70% of global cobalt, and China refines 40% of that output for the world.61

China already dominates global battery manufacturing and is on track to supply nearly two-thirds of all production by 2020.62 The relevance for the new energy economy vision: 70% of China’s grid is fueled by coal today and will still be at 50% in 2040.63 This means that, over the life span of the batteries, there would be more carbon-dioxide emissions associated with manufacturing them than would be offset by using those batteries to, say, replace internal combustion engines.64

Transforming personal transportation from hydrocarbon-burning to battery-propelled vehicles is another central pillar of the new energy economy. Electric vehicles (EVs) are expected not only to replace petroleum on the roads but to serve as backup storage for the electric grid as well.65

Lithium batteries have finally enabled EVs to become reasonably practical. Tesla, which now sells more cars in the top price category in America than does Mercedes-Benz, has inspired a rush of the world’s manufacturers to produce appealing battery-powered vehicles.66 This has emboldened bureaucratic aspirations for outright bans on the sale of internal combustion engines, notably in Germany, France, Britain, and, unsurprisingly, California.

Such a ban is not easy to imagine. Optimists forecast that the number of EVs in the world will rise from today’s nearly 4 million to 400 million in two decades.67 A world with 400 million EVs by 2040 would decrease global oil demand by barely 6%. This sounds counterintuitive, but the numbers are straightforward. There are about 1 billion automobiles today, and they use about 30% of the world’s oil.68 (Heavy trucks, aviation, petrochemicals, heat, etc. use the rest.) By 2040, there would be an estimated 2 billion cars in the world. Four hundred million EVs would amount to 20% of all the cars on the road—which would thus replace about 6% of petroleum demand.

In any event, batteries don’t represent a revolution in personal mobility equivalent to, say, going from the horse-and-buggy to the car—an analogy that has been invoked.69 Driving an EV is more analogous to changing what horses are fed and importing the new fodder.

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I like the last paragraph as it puts batteries in perspective.

Part 7 will be “Moore’s Law Misapplied”

cbdakota

New Energy Economy: An Exercise in Magical Thinking—Part 5 The Hidden Costs of a “Green” Grid


Continuing the serialization of Mark Mills’ report titled New Energy Economy: An Exercise In Magic Thinking:

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The Hidden Costs of a “Green” Grid      

Subsidies, tax preferences, and mandates can hide realworld costs, but when enough of them accumulate, the effect should be visible in overall system costs. And it is. In Europe, the data show that the higher the share of wind/solar, the higher the average cost of grid electricity (Figure 3).

 Germany and Britain, well down the “new energy” path, have seen average electricity rates rise 60%–110% over the past two decades.37 The same pattern—more wind/ solar and higher electricity bills—is visible in Australia and Canada.38

Since the share of wind power, on a per-capita basis, in the U.S. is still at only a small fraction of that in most of Europe, the cost impacts on American ratepayers are less dramatic and less visible. Nonetheless, average U.S. residential electric costs have risen some 20% over the past 15 years.39 That should not have been the case. Average electric rates should have gone down, not up.

 Here’s why: coal and natural gas together supplied about 70% of electricity over that 15-year period.40 The price of fuel accounts for about 60%–70% of the cost to produce electricity when using hydrocarbons.41 Thus, about half the average cost of America’s electricity depends on coal and gas prices. The price of both those fuels has gone down by over 50% over that 15-year period. Utility costs, specifically, to purchase gas and coal are down some 25% over the past decade alone. In other words, cost savings from the shale-gas revolution have significantly insulated consumers, so far, from even higher rate increases.

The increased use of wind/solar imposes a variety of hidden, physics-based costs that are rarely acknowledged in utility or government accounting. For example, when large quantities of power are rapidly, repeatedly, and unpredictably cycled up and down, the challenge and costs associated with “balancing” a grid (i.e., keeping it from failing) are greatly increased. OECD analysts estimate that at least some of those “invisible” costs imposed on the grid add 20%–50% to the cost of grid kilowatt-hours.42

 Furthermore, flipping the role of the grid’s existing power plants from primary to backup for wind/ solar leads to other real but unallocated costs that emerge from physical realities. Increased cycling of conventional power plants increases wear-and-tear and maintenance costs. It also reduces the utilization of those expensive assets, which means that capital costs are spread out over fewer kWh produced— thereby arithmetically increasing the cost of each of those kilowatt-hours.43

 Then, if the share of episodic power becomes significant, the potential rises for complete system blackouts. That has happened twice after the wind died down unexpectedly (with some customers out for days in some areas) in the state of South Australia, which derives over 40% of its electricity from wind.44

After a total system outage in South Australia in 2018, Tesla, with much media fanfare, installed the world’s single largest lithium battery “farm” on that grid.45 For context, to keep South Australia lit for one half-day of no wind would require 80 such “world’s biggest” Tesla battery farms, and that’s on a grid that serves just 2.5 million people.

Engineers have other ways to achieve reliability; using old-fashioned giant diesel-engine generators as backup (engines essentially the same as those that propel cruise ships or that are used to back up data centers). Without fanfare, because of rising use of wind, U.S. utilities have been installing grid-scale engines at a furious pace. The grid now has over $4 billion in utility-scale, enginedriven generators (enough for about 100 cruise ships), with lots more to come. Most burn natural gas, though a lot of them are oil-fired. Three times as many such big reciprocating engines have been added to America’s grid over the past two decades as over the half-century prior to that.46

All these costs are real and are not allocated to wind or solar generators. But electricity consumers pay them. A way to understand what’s going on: managing grids with hidden costs imposed on nonfavored players would be like levying fees on car drivers for the highway wear-and-tear caused by heavy trucks while simultaneously subsidizing the cost of fueling those trucks.

The issue with wind and solar power comes down to a simple point: their usefulness is impractical on a national scale as a major or primary fuel source for generating electricity. As with any technology, pushing the boundaries of practical utilization is possible but usually not sensible or cost-effective. Helicopters offer an instructive analogy.

The development of a practical helicopter in the 1950s (four decades after its invention) inspired widespread hyperbole about that technology revolutionizing personal transportation. Today, the manufacture and use of helicopters is a multibillion-dollar niche industry providing useful and often-vital services. But one would no more use helicopters for regular Atlantic travel— though doable with elaborate logistics—than employ a nuclear reactor to power a train or photovoltaic systems to power a country.

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Only recently did I become aware that  recips are often used as the backup to renewable energy.   Click here to read a little about the recips .

Part 6 will be titled Batteries Cannot Save the Grid or the Planet.

cbdakota

New Energy Economy: An Exercise in Magic Thinking: Part 4 Ensuring Energy Availability and Grid Parity


This part is a little longer than the previous posting but I think believe it conveys the message.

 

 

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

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The high cost of ensuring  energy availability

Availability is the single most critical feature of any energy infrastructure, followed by price, followed by the eternal search for decreasing costs without affecting availability. Until the modern energy era, economic and social progress had been hobbled by the episodic nature of energy availability. That’s why, so far, more than 90% of America’s electricity, and 99% of the power used in transportation, comes from sources that can easily supply energy any time on demand.18

 In our data-centric, increasingly electrified, society, always-available power is vital. But, as with all things, physics constrains the technologies and the costs for supplying availability.19 For hydrocarbon-based systems, availability is dominated by the cost of equipment that can convert fuel-to-power continuously for at least 8,000 hours a year, for decades. Meanwhile, it’s inherently easy to store the associated fuel to meet expected or unexpected surges in demand, or delivery failures in the supply chain caused by weather or accidents.

It costs less than $1 a barrel to store oil or natural gas (in oil-energy equivalent terms) for a couple of months.20 Storing coal is even cheaper. Thus, unsurprisingly, the U.S., on average, has about one to two months’ worth of national demand in storage for each kind of hydrocarbon at any given time.21

Meanwhile, with batteries, it costs roughly $200 to store the energy equivalent to one barrel of oil.22 Thus, instead of months, barely two hours of national electricity demand can be stored in the combined total of all the utility-scale batteries on the grid plus all the batteries in the 1 million electric cars that exist today in America.23

For wind/solar, the features that dominate cost of availability are inverted, compared with hydrocarbons. While solar arrays and wind turbines do wear out and require maintenance as well, the physics and thus additional costs of that wear-and-tear are less challenging than with combustion turbines. But the complex and comparatively unstable electrochemistry of batteries makes for an inherently more expensive and less efficient way to store energy and ensure its availability.

Since hydrocarbons are so easily stored, idle conventional power plants can be dispatched—ramped up and down—to follow cyclical demand for electricity. Wind turbines and solar arrays cannot be dispatched when there’s no wind or sun. As a matter of geophysics, both wind-powered and sunlight-energized machines produce energy, averaged over a year, about 25%–30% of the time, often less.24 Conventional power plants, however, have very high “availability,” in the 80%–95% range, and often higher.25

 A wind/solar grid would need to be sized to meet both peak demand and to have enough extra capacity beyond peak needs in order to produce and store additional electricity when sun and wind are available. This means, on average, that a pure wind/solar system would necessarily have to be about threefold the capacity of a hydrocarbon grid: i.e., one needs to build 3 kW of wind/solar equipment for every 1 kW of combustion equipment eliminated. That directly translates into a threefold cost disadvantage, even if the per-kW costs were all the same.26

Even this necessary extra capacity would not suffice. Meteorological and operating data show that average monthly wind and solar electricity output can drop as much as twofold during each source’s respective “low” season.27

The myth of grid parity  

How do these capacity and cost disadvantages square with claims that wind and solar are already at or near “grid parity” with conventional sources of electricity? The U.S. Energy Information Agency (EIA) and other similar analyses report a “levelized cost of energy” (LCOE) for all types of electric power technologies. In the EIA’s LCOE calculations, electricity from a wind turbine or solar array is calculated as 36% and 46%, respectively, more expensive than from a natural-gas turbine—i.e., approaching parity.28 But in a critical and rarely noted caveat, EIA states: “The LCOE values for dispatchable and non-dispatchable technologies are listed separately in the tables because comparing them must be done carefully”29 (emphasis added). Put differently, the LCOE calculations do not take into account the array of real, if hidden, costs needed to operate a reliable 24/7 and 365-day-per-year energy infrastructure—or, in particular, a grid that used only wind/solar.

 The LCOE considers the hardware in isolation while ignoring real-world system costs essential to supply 24/7 power. Equally misleading, an LCOE calculation, despite its illusion of precision, relies on a variety of assumptions and guesses subject to dispute, if not bias.

 For example, an LCOE assumes that the future cost of competing fuels—notably, natural gas—will rise significantly. But that means that the LCOE is more of a forecast than a calculation. This is important because a “levelized cost” uses such a forecast to calculate a purported average cost over a long period. The assumption that gas prices will go up is at variance with the fact that they have decreased over the past decade and the evidence that low prices are the new normal for the foreseeable future.30 Adjusting the LCOE calculation to reflect a future where gas prices don’t rise radically increases the LCOE cost advantage of natural gas over wind/solar.

 An LCOE incorporates an even more subjective feature, called the “discount rate,” which is a way of comparing the value of money today versus the future. A low discount rate has the effect of tilting an outcome to make it more appealing to spend precious capital today to solve a future (theoretical) problem. Advocates of using low discount rates are essentially assuming slow economic growth.31

A high discount rate effectively assumes that a future society will be far richer than today (not to mention have better technology).32 Economist William Nordhaus’s work in this field, wherein he advocates using a high discount rate, earned him a 2018 Nobel Prize.

An LCOE also requires an assumption about average multi-decade capacity factors, the share of time the equipment actually operates (i.e., the real, not theoretical, amount of time the sun shines and wind blows). EIA assumes, for example, 41% and 29% capacity factors, respectively, for wind and solar. But data collected from operating wind and solar farms reveal actual median capacity factors of 33% and 22%.33 The difference between assuming a 40% but experiencing a 30% capacity factor means that, over the 20-year life of a 2-MW wind turbine, $3 million of energy production assumed in the financial models won’t exist—and that’s for a turbine with an initial capital cost of about $3 million.

U.S. wind-farm capacity factors have been getting better but at a slow rate of about 0.7% per year over the past two decades.34 Notably, this gain was achieved mainly by reducing the number of turbines per acre trying to scavenge moving air—resulting in average land used per unit of wind energy increasing by some 50%.

 LCOE calculations do reasonably include costs for such things as taxes, the cost of borrowing, and maintenance. But here, too, mathematical outcomes give the appearance of precision while hiding assumptions. For example, assumptions about maintenance costs and performance of wind turbines over the long term may be overly optimistic. Data from the U.K., which is further down the wind-favored path than the U.S., point to far faster degradation (less electricity per turbine) than originally forecast.35

 To address at least one issue with using LCOE as a tool, the International Energy Agency (IEA) recently proposed the idea of a “value-adjusted” LCOE, or VALCOE, to include the elements of flexibility and incorporate the economic implications of dispatchability. IEA calculations using a VALCOE method yielded coal power, for example, far cheaper than solar, with a cost penalty widening as a grid’s share of solar generation rises.36

One would expect that, long before a grid is 100% wind/solar, the kinds of real costs outlined above should already be visible. As it happens, regardless of putative LCOEs, we do have evidence of the economic impact that arises from increasing the use of wind and solar energy.

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Part 5 will be The Hidden Costs of a “Green” Grid.

cbdakota

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.

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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.

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

cbdakota

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.

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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.

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

cbdakota

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


INTRO  MAGIC

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 Forbes.com 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.

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INTRODUCTION

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.

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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.

cbdakota

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.

cbdakota

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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.

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