Thursday, October 31, 2019

Australia Faces Its Future as a Pioneer in 'Clean' Hydrogen

Japan might be endowed with many beautiful things but reliable and cheap sources of energy are not among them.

Home to 125 million people and one of the world's worst nuclear meltdowns, the allure of hydrogen energy has driven Japan's ambition to become a leading adopter of the energy source.

Next year's Tokyo Olympics will serve as a demonstration of the country's progress towards a so-called hydrogen society, based on carbon-free, next-generation technology.

It is keen for cars that produce exhaust — water — that technically could be drunk. The Olympics itself will be home to buses like this:

PHOTO: Toyota's Sora bus, to be used at the Tokyo Olympics, is powered by hydrogen fuel cells. (Supplied)

And key to its strategy for this clean-energy future is something that may surprise — Australia's brown coal.

Japan's strategic hydrogen roadmap, released earlier this year, states plainly that 2020 targets are set "assuming the success of Japan-Australia brown coal-to-hydrogen project".

That project, a trial using coal from Latrobe Valley in Victoria, will demonstrate how Australia's hydrogen export industry — and Japan's imports — might work.

But its prominence also hints at a tension threatening to tear the Australian hydrogen movement apart.

The recipe for hydrogen

Hydrogen is attractive as a fuel source because it carries more energy than natural gas and is carbon-free, so the burning of it does not contribute to climate change.

It can be produced by the process of electrolysis of water using large amounts of energy — think solar and wind-sourced — or chemical processes associated with combusting fossil fuels like coal and gas.

That sets up an ideological split between fossil fuels and renewables.

While the hydrogen itself emits no carbon when used, the cheapest way to produce it right now does.

Those preparing Australia's hydrogen strategy recognise the need to reduce emissions to combat climate change, and are only considering options using fossil fuels if they come with carbon capture and storage (CCS).

The most prominent examples of CCS involve pumping carbon emissions into underground cavities, but critics argue the technology is unproven and ineffective.

Mark McCallum at Coal21, a group representing black coal producers pursuing CCS, wrote in a submission to this year's hydrogen strategy consultation that the technology was proven, citing the example of the Norway's Sleipner 20-year-old project.
"Importantly, CO2 [carbon dioxide] is a stable substance and, provided the well-established industrial safety protocols are followed, the injection process can be conducted without any threats to the health and safety of workers or the public."
Suitable locations for hydrogen production, factoring in proximity to geology suitable for storing emissions, have already been identified by Geoscience Australia:

INFOGRAPHIC: Suitable locations for hydrogen production using fossil fuels. (Supplied: Geoscience Australia)

There may be issues with leakage from the emissions, or cost blowouts with rolling out the technology at a large scale.

But assuming there's not, it will be much cheaper to produce hydrogen using fossil fuels over the next few years.

However, the renewables-driven alternative is already better for the climate, and at some point after 2030 its price is also likely to be cheaper.

The 'inflated' prize of Japan

The briefing paper for COAG energy ministers notes "access to the Japanese energy market is the prize for the nations now bidding to be global hydrogen suppliers".

But it is not clear exactly how big that prize is.

Much of the hype around hydrogen in Australia focuses on the export opportunities.

The thinking goes that Australia could use its natural endowment in coal, gas, sun and wind and supply the world with hydrogen, starting with Japan.

This future, according to some, is just around the corner.

The first issues paper for the National Hydrogen Strategy trumpets: "High-level economic modelling by ACIL Allen estimates that hydrogen exports could provide around $4 billion direct and indirect economic benefits to Australia by 2040 under medium demand growth settings."

Under those "growth settings", consultants ACIL Allen estimate that Japan will need 1.76 million tonnes of hydrogen per year in 2030. It suggests Australia could provide 368,000 of those tonnes.

INFOGRAPHIC: ACIL Allen's figures for demand, shown here in thousands of tonnes per year, have been brought into question. (Supplied: ACIL Allen)

If ACIL's estimates are correct, more than 2,000 Australian workers will benefit from the burgeoning industry in the next decade.

However, Japan's own strategy projects its own demand in 2030 at just 300,000 tonnes. That's less than one fifth ACIL's estimate of Japan's consumption.

Anthony Kosturjak, a senior research economist at Adelaide University, said the ACIL estimate "does seem optimistic".

"The low-export scenario of 182,000 tonnes is more reasonable as this would represent about 60 per cent of the national target," he said.

Mr Kosturjak, who researched 19 national hydrogen plans this year for a research paper funded by the Department of Industry, warned that Japan's targets were aspirational but also competition was intense, noting Japan had set up projects in other countries, including Brunei and Norway.

"It is important to remember that the Japanese strategy identifies an aspirational target and there is significant uncertainty regarding how the technical and economic feasibility of hydrogen and competing technologies will evolve," he said.
"As such, the country could significantly overshoot or undershoot its target."
According to ACIL's estimates, Japan will provide the majority of world demand in 2030.

How a boom changes the strategy

John Soderbaum, director of science and technology at ACIL Allen, said the scenarios in the report "are not forecasts of hydrogen demand by any particular country, rather they are projections of the potential overseas demand for hydrogen under three different scenarios".

"We then explored what it would mean for Australia in terms of export revenues and employment if that projected overseas demand for hydrogen imports was met in part by Australian exports."

However Richie Merzian, the director of the climate and energy program at left-wing think tank The Australia Institute, described the numbers as "inflated" and argued they were being used to justify fast-tracking the hydrogen export market.

"Public money is being channelled into developing coal and natural gas-based hydrogen plants," he said.
"With time and public funding, green hydrogen, derived from water through electrolysis and powered by renewable energy, could provide a far more sustainable industry."
While such an industry may be more sustainable, its success means a lost opportunity for Australia's coal sector — and its workers — to pivot towards hydrogen.

In August, Australia's chief scientist Alan Finkel argued a combination was desirable.

"Producing hydrogen from these [fossil fuel] sources, if done in conjunction with carbon capture and sequestration, is an attractive option because it increases the diversity of supply (so all our 'eggs' are not in any one energy 'basket')," he said.

Crunch discussions loom

Much has been made of Australia being perfectly placed to take advantage of hydrogen, with wind, sun, vast reserves of coal and gas, and access to Asian markets.

And there appears to be support from all sides of politics.

In January, then Opposition leader Bill Shorten unveiled a hydrogen strategy for Labor that was backed by the Minerals Council.

But success is not automatic.

Research by the International Energy Agency shatters the mythology that Australia is the standout leader for hydrogen production.

INFOGRAPHIC: Hydrogen production costs in different parts of the world. (Supplied: IEA)

The US, China, north Africa and the Middle East appear to offer substantially cheaper production.

Dr Soderbaum said ultimately the market would decide whether Australia's hydrogen sector got off the ground.

"At the end of the day, the actual demand for Australian hydrogen will be determined by factors such as the economic competitiveness of our supplies versus those of competing suppliers of hydrogen around the world and the extent to which it can be classified as low or zero-emissions hydrogen," he said.

The national hydrogen strategy is currently being drafted by a taskforce led by Dr Finkel.

State and federal energy ministers are expected to discuss the strategy in November.

Source: ABC News


The 10 largest coal producers and exporters in Indonesia:

  1. Bumi Resouces
  2. Adaro Energy
  3. Indo Tambangraya Megah
  4. Bukit Asam
  5. Baramulti Sukses Sarana
  6. Harum Energy
  7. Mitrabara Adiperdana 
  8. Samindo Resources
  9. United Tractors
  10. Berau Coal

Wednesday, October 30, 2019

California in the Right Transition From Modern Age to Stone Age

California is staying true to its reputation as the land of innovation — it is making blackouts, heretofore the signature of impoverished and war-torn lands, a routine feature of 21st-century American life.

More than 2 million people are going without power in Northern and central California, in the latest and biggest of the intentional blackouts that are, astonishingly, the Golden State’s best answer to the risk of runaway wildfires.

Electric power — and all the other goods it makes possible — is synonymous with modern civilization. It shouldn’t be a negotiable good for anyone living in a well-functioning society, or even in California, which, despite its stupendous wealth and natural splendor, has blighted itself over the past few decades with bad governance and misplaced priorities.

The same California that has been the seedbed of world-famous companies — like the ones that make it possible for people to send widely viewed short missives of 280 characters or fewer and share and like images of grumpy cats — isn’t doing so well at keeping the lights on.

The same California that has boldly committed to drawing half of its energy from renewable sources by 2025 — and 100 percent renewable energy by 2045 — can’t manage its existing energy infrastructure.

The same California that has pushed its electricity rates to the highest in the contiguous United States through its mandates and regulations doesn’t provide continuous access to that overpriced electricity.

California Gov. Gavin Newsom, who has to try to evade responsibility for this debacle while presiding over it, blames “dog-eat-dog capitalism” for the state’s current blackout crisis. It sounds like he is referring to robber barons who have descended on the state to suck it dry of profits while burning it to the ground.

But in fact, Newsom is talking about one of the most regulated industries in the state — namely, California’s energy utilities that answer to the state’s public utilities commission.

This is not exactly an Ayn Rand operation. If California regulators wanted, they could have pushed the utilities to focus on the resilience and safety of its current infrastructure — implicated in some of the state’s most fearsome recent fires — as a top priority. Instead, the utilities commission forced costly renewable energy initiatives on the utilities.

Who cares about something as mundane as properly maintained power lines if something as supposedly epically important — and politically fashionable — as saving the planet from climate change is at stake?

Meanwhile, California has had a decades-long aversion to properly clearing forests. The state’s leaders have long been in thrall to the belief that cutting down trees is somehow an offense against nature, even though thinning helps create healthier forests. Biomass has been allowed to build up, and it becomes the kindling for catastrophic fires.

As Chuck DeVore of the Texas Public Policy Foundation points out, a report of the Western Governors’ Association warned of this effect more than a decade ago, noting that “over time, the fire-prone forests that were not thinned burn in uncharacteristically destructive wildfires.”

In 2016, then-Gov. Jerry Brown actually vetoed a bill that unanimously passed the state legislature to promote the clearing of trees dangerously close to power lines. Brown’s team says this legislation was no big deal, but one progressive watchdog called the bill “neither insignificant nor small.”

On top of all this, more people live in remote areas susceptible to fires, in part because of the high cost of housing in more built-up areas.

There shouldn’t be any doubt that California, susceptible to drought through its history and whipped by fierce, dry winds this time of year, is always going to have a fire problem. But there also shouldn’t be any doubt that dealing with it this poorly is the result of a series of foolish, unrealistic policy choices.

California’s overriding goal should have been to protect and promote the supply of safe, cheap and reliable power — a public good so basic that it’s easy to take for granted. The state’s focus on ideological fantasies has yielded electrical power that’s none of the above.

Source: Rich Lowry is the editor of National Review and author of the forthcoming book “The Case for Nationalism: How It Made Us Powerful, United, and Free.” Twitter: @RichLowry


The 10 largest coal producers and exporters in Indonesia:

  1. Bumi Resouces
  2. Adaro Energy
  3. Indo Tambangraya Megah
  4. Bukit Asam
  5. Baramulti Sukses Sarana
  6. Harum Energy
  7. Mitrabara Adiperdana 
  8. Samindo Resources
  9. United Tractors
  10. Berau Coal

Monday, October 28, 2019

Chinese Scientist Have Developed a Method to Produce Ethanol Using Lignin and Carbon Dioxide

Process generates bulk chemical from two renewable carbon sources

Scientists in China have developed a method to produce ethanol using the renewable resources lignin and carbon dioxide for the first time.

The process uses a ruthenium–cobalt catalyst and involves three cascade reactions – breaking the ether bond, a reverse water–gas shift reaction and forming a new C–C bond to produce ethanol from lignin (or its aryl methyl derivatives), carbon dioxide and hydrogen. Ethanol is currently produced via ethene hydration, or fermentation. It is widely used as a solvent, feedstock and fuel, as well as in medicine, so producing it from abundant renewable resources is highly desirable. 

A scheme showing the three cascade reactions involved in the process.  Source: © Qingli Qian/Chinese Academy of Science. The process involves three cascade reactions

Lignin is an industrial waste product but it is rarely used in the chemical industry and large amounts of it are burnt as a low-grade fuel and effectively wasted. Despite the quantity generated, industry does not capitalise on lignin’s potential to produce valuable compounds because depolymerising it usually forms mixtures of products that are difficult to separate and purify. ‘It is a great challenge to produce a chemical with high selectivity because of the complex structure of lignin,’ says Qingli Qian from the Institute of Chemistry, Chinese Academy of Sciences, China, who, along with his team, are behind this process where ethanol is the only liquid product. 

The process has been successfully tested with a range of aryl methyl ethers, which are commonly used as model compounds for lignin as well as lignin from different sources, demonstrating the effectiveness of this approach. Bin Yang at Washington State University, US, says ‘this new method opens up new avenues to turn the current cellulosic ethanol biorefinery’s two waste carbon streams into ethanol.’ He is optimistic about future work, and says ‘the design of a closed loop process would move to a higher carbon yield on the lignocellulosic ethanol biorefinery route.’ 

Source: Chemistry World


The 10 largest coal producers and exporters in Indonesia:

  1. Bumi Resouces
  2. Adaro Energy
  3. Indo Tambangraya Megah
  4. Bukit Asam
  5. Baramulti Sukses Sarana
  6. Harum Energy
  7. Mitrabara Adiperdana 
  8. Samindo Resources
  9. United Tractors
  10. Berau Coal

Power Producers & Technology Providers in Gulf Cooperation Council Countries Must Adapt and Turn the Challenges Into Success

It’s no exaggeration to say the energy sector has served as the key engine that has powered the rapid rise of GCC economies in the last few decades. Holding almost 30 per cent of the world’s proven crude oil reserves, and approximately a fifth of global gas reserves, the GCC countries have fuelled robust economic growth by developing and exporting fossil fuels.

But with industrialisation and an exponential rise in population, the demand for energy has also risen dramatically in the region. During the 2000s, regional energy consumption grew at an average of 5 per cent per annum, faster than India, China and Brazil, according to the International Renewable Energy Agency (IRENA). Domestic consumption grew to about 28 per cent of production in 2014, compared with 17 per cent in 2000.

Meanwhile macro-economic factors have also had an impact on the balance of the oil market and prices. The collapse of oil prices in mid-2014 contracted the region’s oil revenues, and with continuing volatility in the market due to slowing global demand amidst geopolitical uncertainty, an urgent need emerged for energy diversification. Driven by the need for greater energy security, GCC economies have developed strategies for a broader energy mix, including nuclear, coal and renewable options such as solar and wind.

“When it comes to diversification, there is no ‘one size fits all’”, explains Dr. Sacha Parneix, chief commercial officer of GE Steam Power. “Every country needs to find its individual energy mix, which may depend on a number of factors. One of them is the available fuel sources: existing gas or oil reserves, but also the wind conditions, as well as the hours of sunshine and available land space for solar power plants. Other factors may include access to project financing, foreign exchange reserves, and political considerations.”

Tackling diversification

While some of the Gulf states, such as the UAE, had already embarked on diversifying their energy sources, the oil price collapse in 2014 served as the final push for many of the others to take the leap. Announcing Saudi Arabia’s ambitious Vision 2030 strategy in 2016, Crown Prince Mohammed bin Salman said the kingdom aimed to end its “oil addiction”.

“Looking at it from a long-term economic point of view, if you have other ways of generating electricity rather than using oil and gas, that would save the fuel for something else. And maybe that’s something that can bring more value to the country than just to produce electricity,” explains Parneix.

“For example, liquid fuel can go into refineries or be sold outside the country. So Saudi Arabia has a great opportunity to optimise the overall system. This optimisation has started, as the kingdom has already awarded several projects for solar plants and wind power stations, and they are also discussing nuclear. Offering a portfolio that spans the entire energy value chain, GE is part of those discussions and ready to provide the right technology and services to support each country’s individual energy strategy,” he adds.

GE, which has been active in the Middle East, North Africa and Turkey (MENAT) since the 1930s, currently supports the generation of more than 50 per cent of Saudi Arabia’s electricity and more than two-thirds of the region’s power needs.

The big green question

In addition to greater energy security, there is another driver behind the tectonic transformation of the region’s energy ecosystem: climate change. Across the GCC, governments have included sustainability targets in their national agendas. In addition to increasing the efficiency of existing plants, heavy investment is being made into the renewable energy space, driven by the abundance of solar power in the region. According to IRENA, by 2030, the region could save 354 million barrels of oil equivalent (a 23 per cent reduction), create more than 220,500 jobs and reduce the power sector’s carbon dioxide emissions by 22 per cent based on the renewables targets already in place.

However, energy sources such as solar and wind have their limitations, since it is impossible to control or predict them.

“As the penetration of renewable energy sources increases on the grid, then you start to feel the impact of this intermittency on the stability of your system,” explains Parneix.

“In most places in the GCC, people are used to 24/7 on-demand power. But how do you maintain that when you add more and more renewables which deliver power with huge variation? Energy storage is an obvious thought, but while storage technology has advanced for small and mid-scale applications, it is not viable for national grid scales, like for example the UAE’s total power generation capacity of 27GW. So, the natural solution to balance renewables is to build dependable capacity based on traditional fuels, such as coal, gas or nuclear energy, and to use modern technology to do this in the cleanest and safest way,” he states.

In the UAE, GE is part of the international consortium working on the $3.2bn Hassyan coal energy project in Dubai, a key component of the emirate’s clean energy strategy 2050, which aims to diversify the energy mix and includes a 7 per cent target from coal. Hassyan, the first-of-its-kind in the region, is considered to be one of the world’s most cost-competitive coal fired power projects and features GE’s “ultra-supercritical” (USC) technology. When fully operational in 2023, the plant will deliver 2,400MW net power capacity, producing the equivalent electricity to power approximately 1.3 million people.

Talking about coal naturally brings up the point of sustainability. In recent years, with environmental concerns rising across the globe as the effects of climate change become more apparent, the energy industry – specifically energy generated using non-renewable means – has started to witness greater scrutiny over the key role it plays in exacerbating the issue.

“For the UAE, having a coal power station was important from a fuel supply diversification and security perspective. But they were not ready to compromise on the environmental impact. The USC technology can deliver up to 47.5 per cent efficiency rates – significantly higher than the global average of 34 per cent. In a coal-fired power plant, a one percentage point improvement in efficiency means a two-percentage reduction in CO2 emissions. So with GE’s USC technology, the carbon footprint of a coal power plant can be reduced by more than 25 per cent compared to the average.

“For local emissions, the reference that the UAE set for themselves was gas power – which is typically considered clean. That’s how the project has been specified. And that’s why they turned to companies like GE. Our technologies can remove up to 99 per cent of local emissions. We encourage them to make use of the best, most efficient, and cleanest technologies available on the planet,” explains Parneix.

At Hassyan, GE’s USC technology will help the plant achieve local emissions limits far more stringent than the industrial emissions directive of the European Union and International Finance Corporation guidelines. It will adhere to the most stringent environmental impact mitigation standards ever adopted for a coal-fired power plant.

“In the 1970s, if you went to a city like Los Angeles, you couldn’t see the sky because of the pollution. Today, you can make a coal power station as clean as gas. We just launched an operation in Turkey of a power station with similar technology, and in the cities around, some people still believe that the project is delayed. That’s because although it’s been operating for 18 months, they haven’t seen black smoke and ashes, and the nearby sea water is fully clear. So that’s the type of technology that’s available today,” states Parneix.

Even gas power plants can be made more sustainable. In nearby Kuwait, technology upgrades installed by GE at the 2,000MW Sabiya West gas turbine power station this year have increased output without requiring additional fuel, leading to emissions savings equivalent to taking 8,000 cars off Kuwait’s roads.

Talking nuclear

The UAE will create history in the GCC when its Barakah nuclear power plant begins operations. Construction of the four units of the power plant – located in the Al Dhafra region of Abu Dhabi – was more than 93 per cent complete as of the end of March 2019, with the project anticipated to begin operations in 2020.

Another GCC state that has announced nuclear plans is Saudi Arabia, with plans revealed for two nuclear plants. The kingdom is expected to award the tender in 2020, with US, Russian, South Korean, Chinese and French firms involved in preliminary talks. In September, the Saudi’s new energy minister Prince Abdulaziz bin Salman also revealed plans to enrich uranium for Saudi Arabia’s nuclear power programme. Following recent incidents such as the 2011 Fukushima nuclear disaster in Japan, when an earthquake triggered tsunami struck the plant, there has been apprehension about heading down the nuclear route. Following the disaster, German chancellor Angela Merkel announced the country would completely move away from nuclear energy by the end of 2022.

But Parneix stresses that it is key to study the facts and look at the bigger picture.

“First of all, nuclear reaction is not carbon-based. So it’s carbon neutral. So when you think about global warming, nuclear has a play, because it doesn’t produce CO2, and at the same time, it provides very strong dependable power [unlike solar and wind].

“Secondly, one gram of uranium in energy is equivalent to one tonne of coal. The amount of energy that you have in uranium is tremendous. So the operating and maintenance cost is actually very low, because you obviously need a team to operate the plant, but the fuel required is a very tiny amount. The main difficulty for nuclear power stations is the capital cost, because of the risk that it entails, and the additional level of security, check, design and redundancy that is being poured into the construction of the power station to avoid the incidence of an accident,” he explains.

All these factors contribute to creating a longer timeline for the setup of nuclear power plants in comparison to traditional or renewable energy stations.

“Obviously, nuclear power plants have to come with the highest level of safety. And I think that’s part of the challenge for the nuclear industry, and new safety guidelines were introduced over the past couple of years,” says Parneix.

Regional clout

Business this year has not been easy with the upheaval across the energy industry globally, admits Parneix.

“The power industry is in transition, and it will require a lot of flexibility from power producers and technology providers to adapt and turn the challenges into success.”

“The future is difficult to predict – the only thing we can predict is that it will change. But I believe GE is well positioned to play a very active role in the GCC’s energy transition. Because we cover the entire spectrum from traditional sources like gas, coal and nuclear to solar and wind, we can provide support on the big picture as well as the details. And we are already working on the next generation of innovative technologies that will serve the needs of the future energy ecosystem, such as synchronous condensers.”

Looking at the MENAT region, it has historically been one of the largest outside the US for GE. The company has a presence in 24 countries in the region and recorded orders worth $14.2bn in 2018.

Headquartered in Dubai, the regional division employs more that 14,000 people with 3,000 customers.

Parneix, who took on the role of global CCO in July, previously served as the regional sales leader for GE Steam Power MENAT, based in Dubai. He has chosen to stay on in the emirate because of the “extraordinary opportunity” it offers to maintain partnerships with people across the world, he says.

“The capability to develop partnerships is going to be key for success, and for that, you need to meet people. Dubai has extremely effective airlines – you fly direct everywhere – [and] you’re not really jet lagged whether you travel to the east or the west. And Dubai’s not just a tourist hub; it’s becoming a business hub. So for me, it makes sense to actually be based here.”

Source: Gulf Business


The 10 largest coal producers and exporters in Indonesia:

  1. Bumi Resouces
  2. Adaro Energy
  3. Indo Tambangraya Megah
  4. Bukit Asam
  5. Baramulti Sukses Sarana
  6. Harum Energy
  7. Mitrabara Adiperdana 
  8. Samindo Resources
  9. United Tractors
  10. Berau Coal

Renewables Aren’t as Beneficial as Many People Think They Are

The energy needs of the world’s economy seem to be easy to model. Energy consumption is measured in a variety of different ways including kilowatt-hours, barrels of oil equivalent, British thermal units, kilocalories and joules. Two types of energy are equivalent if they produce the same number of units of energy, right?

For example, xkcd’s modeler Randall Munroe explains the benefit of renewable energy in this video. He tells us that based on his model, solar, if scaled up to ridiculous levels, can provide enough renewable energy for ourselves and a half-dozen of our neighbors. Wind, if scaled up to absurd levels, can provide enough renewable energy for ourselves and a dozen of our neighbors.

There is a major catch to this analysis, however. The kinds of energy produced by wind and solar are not the kinds of energy that the economy needs. Wind and solar produce intermittent electricity available only at specific times and places. What the world economy needs is a variety of different energy types that match the energy requirements of the many devices in place in the world today. This energy needs to be transported to the right place and saved for the right time of day and the right time of year. There may even be a need to store this energy from year-to-year, because of possible droughts.

I think of the situation as being analogous to researchers deciding that it would be helpful or more efficient if humans could change their diets to 100 percent grass in the next 20 years. Grass is a form of energy product, but it is not the energy product that humans normally consume. It doesn’t seem to be toxic to humans in small quantities. It seems to grow quite well. Switching to the use of grass for food would seem to be beneficial from a CO2 perspective. The fact that humans have not evolved to eat grass is similar to the fact that the manufacturing and transport sectors of today’s economy have not developed around the use of intermittent electricity from wind and solar.

Substituting Grass for Food Might “Work,” but It Would Require Whole New Systems 

If we consider other species, we find that animals with four stomachs can, in fact, live quite well on a diet of grass. These animals often have teeth that grow continuously because the silica in grass tends to wear down their teeth. If we could just get around these little details, we might be able to make the change. We would probably need to grow extra stomachs and add continuously growing teeth. Other adjustments might also be needed, such as a smaller brain. This would especially be the case if a grass-only diet is inadequate to support today’s brain growth and activity.

The problem with nearly all energy analyses today is that they use narrow boundaries. They look at only a small piece of the problem–generally the cost (or “energy cost”) of the devices themselves–and assume that this is the only cost involved in a change. In fact, researchers need to recognize that whole new systems may be required, analogous to the extra stomachs and ever-growing teeth. The issue is sometimes described as the need to have “wide boundaries” in analyses.

If the xkcd analysis netted out the indirect energy costs of the system, including energy related to all of the newly required systems, the results of the analysis would likely change considerably. The combined ability of wind and solar to power both one’s own home and those of a dozen and a half neighbors would likely disappear. Way too much of the output of the renewable system would be used to make the equivalent of extra stomachs and ever-growing teeth for the system to work. The world economy might not work as in the past, either, if the equivalent of the brain needs to be smaller.

Is “Energy Used by a Dozen of Our Neighbors” a Proper Metric?

Before I continue with my analysis of what goes wrong in modeling intermittent renewable energy, let me say a few words about the way Munroe quantifies the outcome of his energy analysis. He talks about “energy consumed by a household and a dozen of its neighbors.” We often hear news items about how many households can be served by a new electricity provider or how many households have been taken offline by a storm. The metric used by Munroe is similar. But, does it tell us what we need to know in this case?

Our economy requires energy consumption by many types of users, including governments to make roads and schools, farmers to plant crops and manufacturers to make devices of all kinds. Leaving non-residential energy consumption out of the calculation doesn’t make much sense. (Actually, we are not quite certain what Munroe has included in his calculation. His wording suggests that he included only residential energy consumption.) In the US, my analysis indicates that residential users consume only about a third of total energy.1 The rest is consumed by businesses and governments.

If we want to adjust Munroe’s indications to include energy consumed by businesses and governments, we need to divide the indicated number of residential households provided with energy by about three. Thus, instead of the units being “Energy Consumed by Dozen of our Neighbors,” the units would be “Energy Consumed by Four of Our Neighbors, including Associated Energy Use by Governments and Businesses.” The apparently huge benefit provided by wind and solar becomes much smaller when we divide by three, even before any other adjustments are made.

What Might the Indirect Costs of Wind and Solar Be? 

There are a number of indirect costs:

1) Transmission costs are much higher than those of other types of electricity, but they are not charged back to wind and solar in most studies.

A 2014 study by the International Energy Agency indicates that transmission costs for wind are approximately three times the cost of transmission costs for coal or nuclear. The amount of excess costs tends to increase as intermittent renewables become a larger share of the total. Some of the reason for higher transmission costs for both wind and solar are the following:

(a) Disproportionately more lines need to be built for wind and solar because transmission lines need to be scaled to the maximum output, rather than the average output. Wind output is typically available 25 percent to 35 percent of the time; solar is typically available 10 percent to 25 percent of the time.

(b) There tend to be longer distances between where renewable energy is captured and where it is consumed, compared to traditional generation.

(c) Renewable electricity is not created in a fossil fuel power plant, with the same controls over the many aspects of grid electricity. The transmission system must therefore make corrections which would not be needed for other types of electricity.

2) With increased long distance electricity transmission, there is a need for increased maintenance of transmission lines. If this is not performed adequately, fires are likely, especially in dry, windy areas.

There is recent evidence that inadequate maintenance of transmission lines is a major fire hazard.

In California, inadequate electricity line maintenance has led to the bankruptcy of the Northern California utility PG&E. In recent weeks, PG&E has initiated two preventative cut-offs of power, one affecting as many as two million individuals.

The Texas Wildfire Mitigation Project reports, “Power lines have caused more than 4,000 wildfires in Texas in the past three and a half years.”

Venezuela has a long distance transmission line from its major hydroelectric plant to Caracas. One of the outages experienced in that country seems to be related to fires close to this transmission line.

There are things that can be done to prevent these fires, such as burying the lines underground. Even using insulated wire, instead of ordinary transmission wire, seems to help. But any solution has a cost involved. These costs need to be recognized in modeling the indirect cost of adding a huge amount of renewables.

3) A huge investment in charging stations will be needed, if anyone other than the very wealthy are to use electric vehicles.

Clearly, the wealthy can afford electric vehicles. They generally have garages with connections to electrical power. With this arrangement, they can easily charge a vehicle that is powered by electricity when it is convenient.

The catch is that the less wealthy often do not have similar opportunities for charging electric vehicles. They also cannot afford to spend hours waiting for their vehicles to charge. They will need inexpensive rapid-charging stations, located in many, many places, if electric vehicles are to be a suitable choice. The cost of rapid-charging will likely need to include a fee for road maintenance, since this is one of the costs that today is included in fuel prices.

4) Intermittency adds a very substantial layer of costs. 

A common belief is that intermittency can be handled by rather small changes, such as time-of-day pricing, smart grids and cutting off power to a few selected industrial customers if there isn’t enough electricity to go around. This belief is more or less true if the system is basically a fossil fuel and nuclear system, with a small percentage of renewables. The situation changes as more intermittent renewables are added.

Once more than a small percentage of solar is added to the electric grid, batteries are needed to smooth out the rapid transition that occurs at the end of the day when workers are returning home and would like to eat their dinners, even though the sun has set. There are also problems with electricity from wind cutting off during storms; batteries can help smooth out these transitions.

There are also longer-term problems. Major storms can disrupt electricity for several days, at any time of the year. For this reason, if a system is to run on renewables alone, it would be desirable to have battery backup for at least three days. In the short video below, Bill Gates expresses dismay at the idea of trying to provide a three-day battery backup for the quantity of electricity used by the city of Tokyo.

We do not at this point have nearly enough batteries to provide a three-day battery backup for the world’s electricity supply. If the world economy is to run on renewables, electricity consumption would need to rise from today’s level, making it even more difficult to store a three-day supply.

A much more difficult problem than three-day storage of electricity is the need for seasonal storage, if renewable energy is to be used to any significant extent. Figure 1 shows the seasonal pattern of energy consumption in the United States.
Figure 1. US energy consumption by month of year, based on data of the US Energy Information Administration. “All Other” is total energy, less electricity and transportation energy. It includes natural gas used for home heating. It also includes oil products used for farming, as well as fossil fuels of all kinds used for industrial purposes.

In contrast with this pattern, the production of solar energy tends to peak in June; it falls to a low level in December to February. Hydroelectric power tends to peak in spring, but its quantity is often quite variable from year to year. Wind power is quite variable, both from year to year and month to month.

Our economy cannot handle many starts and stops of electricity supply. For example, temperatures need to stay high for melting metals. Elevators should not stop between floors when the electricity stops. Refrigeration needs to continue when fresh meat is being kept cold.

There are two approaches that can be used to work around seasonal energy problems:

Greatly overbuild the renewables-based energy system, to provide enough electricity when total energy is most needed, which tends to be in winter.

Add a huge amount of storage, such as battery storage, to store electricity for months or even years, to mitigate the intermittency.

Either of these approaches is extremely high cost. These costs are like adding extra stomachs to the human system. They have not been included in any model to date, as far as I know. The cost of one of these approaches needs to be included in any model analyzing the costs and benefits of renewables, if there is any intention of using renewables as more than a tiny share of total energy consumption.

Figure 2 illustrates the high energy cost that can occur by adding substantial battery backup an electrical system. In this example, the “net energy” that the system provides is essentially eliminated by the battery backup. In this analysis, Energy Return on Energy Invested (EROEI) compares energy output to energy input. It is one of many metrics used to estimate whether a device is providing adequate energy output to justify the front-end energy inputs.

Figure 2. Graham Palmer’s chart of Dynamic Energy Returned on Energy Invested from “Energy in Australia.”

The example in Figure 2 is based on the electricity usage pattern in Melbourne, Australia, which has a relatively mild climate. The example uses a combination of solar panels, batteries and diesel backup generation. Solar panels and backup batteries provide electricity for the 95 percent of annual electricity usage that is easiest to cover with these devices; diesel generation is used for the remaining 5 percent.

The Figure 2 example could be adjusted to be “renewable only” by adding significantly more batteries, a large number of solar panels, or some combination of these. These additional batteries and solar panels would be very lightly used, bringing the EROEI of the system down to an even lower level.

To date, a major reason that the electricity system has been able to avoid the costs of overbuilding or of adding major battery backup is the small share they represents of electricity production. In 2018, wind amounted to 5 percent of world electricity; solar amounted to 2 percent. As percentages of world energy supply, they represented 2 percent and 1 percent respectively.

A second reason that the electricity system has been able to avoid addressing the intermittency issue is because backup electricity providers (coal, natural gas, and nuclear) have been forced to provide backup services without adequate compensation for the value of services that they are providing. The way that this happens is by giving wind and solar the subsidy of “going first.” This practice creates a problem because backup providers have substantial fixed costs, and they often are not being adequately compensated for these fixed costs.

If there is any plan to cease using fossil fuels, all of these backup electricity providers, including nuclear, will disappear. (Nuclear also depends on fossil fuels.) Renewables will need to stand on their own. This is when the intermittency problem will become overwhelming. Fossil fuels can be stored relatively inexpensively; electricity storage costs are huge. They include both the cost of the storage system and the loss of energy that takes place when storage is used.

In fact, the underfunding issue associated with allowing intermittent renewables to go first is already becoming an overwhelming problem in a few places. Ohio has recently chosen to provide subsidies to coal and nuclear providers as a way of working around this issue. Ohio is also reducing funding for renewables.

 5) The cost of recycling wind turbines, solar panels, and batteries needs to be reflected in cost estimates. 

A common assumption in energy analyses seems to be that somehow, at the end of the design lifetime of wind turbines, solar panels and batteries, all of these devices will somehow disappear at no cost. If recycling is done, the assumption is made that the cost of recycling will be less than the value of the materials made available from the recycling.

We are discovering now that recycling isn’t free. Very often, the energy cost of recycling materials is greater than the energy used in mining them fresh. This problem needs to be considered in analyzing the real cost of renewables.

 6) Renewables don’t directly substitute for many of the devices/processes we have today. This could lead to a major step-down in how the economy operates and a much longer transition. 

There is a long list of things that renewables don’t substitute for. Today, we cannot make wind turbines, solar panels, or today’s hydroelectric dams without fossil fuels. This, by itself, makes it clear that the fossil fuel system will need to be maintained for at least the next twenty years.

There are many other things that we cannot make with renewables alone. Steel, fertilizer, cement and plastics are some examples that Bill Gates mentions in his video above. Asphalt and many of today’s drugs are other examples of goods that cannot be made with renewables alone. We would need to change how we live without these goods. We could not pave roads (except with stone) or build many of today’s buildings with renewables alone.

It seems likely that manufacturers would try to substitute wood for fossil fuels, but the quantity of wood available would be far too low for this purpose. The world would encounter deforestation issues within a few years.

7) It is likely that the transition to renewables will take 50 or more years. During this time, wind and solar will act more like add-ons to the fossil fuel system than they will act like substitutes for it. This also increases costs.

In order for the fossil fuel industries to continue, a large share of their costs will need to continue. The people working in fossil fuel industries need to be paid year around, not just when electrical utilities need backup electrical power. Fossil fuels will need pipelines, refineries and trained people. Companies using fossil fuels will need to pay their debts related to existing facilities. If natural gas is used as backup for renewables, it will need reservoirs to hold natural gas for winter, besides pipelines. Even if natural gas usage is reduced by say, 90 percent, its costs are likely to fall by a much smaller percentage, say 30 percent, because a large share of costs are fixed.

One reason that a very long transition will be needed is because there is not even a path to transition away from fossil fuels in many cases. If a change is to be made, inventions to facilitate these changes are a prerequisite. Then these inventions need to be tested in actual situations. Next, new factories are needed to make the new devices. It is likely that some way will be needed to pay existing owners for the loss of value of their existing fossil fuel powered devices; if not, there are likely to be huge debt defaults. It is only after all of these steps have taken place that the transition can actually take place.

These indirect costs lead to a huge question mark regarding whether it even makes sense to encourage the widespread use of wind and solar. Renewables can reduce CO2 emissions if they really substitute for fossil fuels in making electricity. If they are mostly high cost add-ons to the system, there is a real question: Does it even make sense to mandate a transition to wind and solar?

Do Wind and Solar Really Offer a Longer-Term Future than Fossil Fuels?

At the end of the xkcd video, Munroe makes the observation that wind and solar are available indefinitely, but fossil fuel supplies are quite limited.

I agree with Munroe that fossil fuel supplies are quite limited. This occurs because energy prices do not rise high enough for us to extract very much of them. The prices of finished products made with fossil fuels need to be low enough for customers to be able to afford them. If this is not the case, purchases of discretionary goods (for example cars and smart phones) will fall. Since cars and smart phones are made with commodities, including fossil fuels, the lower “demand” for these finished goods will lead to falling prices of commodities, including oil. In fact, we seem to have experienced falling oil prices most of the time since 2008.

Figure 3. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.

It is hard to see why renewables would last any longer than fossil fuels. If their unsubsidized cost is any higher than fossil fuels, this would be one strike against them. They are also very dependent on fossil fuels for making spare parts and for repairing transmission lines.

It is interesting that climate change modelers seem to be convinced that very high amounts of fossil fuels can be extracted in the future. The question of how much fossil fuels can really be extracted is another modeling issue that needs to be examined closely. The amount of future extraction seems to be highly dependent on how well the current economic system holds together, including the extent of globalization. Without globalization, fossil fuel extraction seems likely to decline quickly.

Do We Have Too Much Faith in Models? 

While solar and wind are now cheaper than coal in most of the world, the idea of using renewables certainly sounds appealing, but the name is deceiving. Most renewables, except for wood and dung, aren’t very renewable. In fact, they depend on fossil fuels.

The whole issue of whether wind and solar are worthwhile needs to be carefully analyzed. The usual hallmark of an energy product that is of substantial benefit to the economy is that its productionWhile the renewable energy push is well under way, there are some major flaws still ahead for the burgeoning industry tends to be very profitable. With these high profits, governments can tax the owners heavily. Thus, the profits can be used to aid the rest of the economy. This is one of the physical manifestations of the “net energy” that the energy product provides.

If wind and solar were really providing substantial net energy, they would not need subsidies, not even the subsidy of going first. They would be casting off profits to benefit the rest of the economy. Perhaps renewables aren’t as beneficial as many people think they are. Perhaps researchers have put too much faith in distorted models.

Source: Gail Tverberg


The 10 largest coal producers and exporters in Indonesia:

  1. Bumi Resouces
  2. Adaro Energy
  3. Indo Tambangraya Megah
  4. Bukit Asam
  5. Baramulti Sukses Sarana
  6. Harum Energy
  7. Mitrabara Adiperdana 
  8. Samindo Resources
  9. United Tractors
  10. Berau Coal

Millions of British Households Unable to Meet Their Rocketing Renewable Power Bills

Millions of British households face another bitter winter, unable to meet their rocketing power bills. An obsession with chaotically intermittent wind power (both off and onshore) has sent power prices spiralling. And, adding to the misery, the annual cost of renewable energy subsidies, Feed in Tariffs, fixed contract prices for wind and solar etc to British households will soon reach £12,000,000,000. The current cost is already nudging £10,000,000,000.

While their parliamentarians squabble about the terms on which Britain will sever its ties with Europe, ordinary Brits are fretting about how they might light and heat their homes as temperatures plummet. Heading into winter, some 3,000,000 households are already in “energy debt” and collectively owe nearly £417,000,000 to their suppliers.

Here’s a roundup on the consequences of Britain throwing all to the wind.

Current Costs of British Renewables Subsidies per Household

The total annual renewables subsidy impact on UK household cost of living is £9 billion — which comes to £340 per year per household.

The low and much-publicised offshore wind bids for Feed-in Tariffs with Contracts for Difference (FiTs CfDs) continue to confuse many analysts, even those from whom one might expect clear-eyed caution. A writer for CapX (“What is the point of Corbyn’s nationalised wind farms?”), to select an example almost at random, quite correctly takes issue with the Labour Party’s reckless plans for major public investment in further offshore wind, but does so on the mistaken ground that “offshore wind is a big success story […] delivering ever more clean energy, at ever lower prices, for a fraction of the price of Labour’s plan”.

However, and as a matter of fact, none of the low-bidding wind farms have actually been built, and the 8.5 GW of operational offshore wind capacity which is “delivering” is without exception very heavily subsidised. Indeed, the most recently commissioned offshore wind farm, the giant 588 MW Beatrice of the North East coast of Scotland, which only became fully operational in the summer of 2019, has a CfD strike price of £140/MWh now worth £158.73/MWh, roughly three times the wholesale price, and indeed about three times the almost certainly unrealistic strike prices bid in the most recent CfD auctions. It is obviously premature to say that the observed fall in CfD prices bid is a “success story”. The CfD contracts are very far from firmly binding, and the penalty for abrogration is trivial. It seems likely, bordering on certain, that they are a sly and low risk publicity gambit, intended to secure a market position, and inhibit competition, in the hope of obtaining a better price by whatever means at a later date.

And of course the cost of electricity from existing offshore wind power has most certainly not fallen; it continues to be very high, like all the other renewable generators in the UK fleet. Perhaps it is worth reminding ourselves just how much that subsidy currently amounts to and how much it is costing British households.

Apart from the Contracts for Difference (CfD), there are two other systems of subsidy, the Renewables Obligation (RO), including the Feed-in Tariff (FiT). The costs of these are recorded in the Office for Budget Responsibility’s Economic and Fiscal Outlook, the most recent issue of which was published March 2019 (a new release is due shortly). reports the current and projected costs of these subsidies amongst other Environmental Levies, a screenshot of which is reproduced below:

Figure 1: Actual (2017–18) and forecast (2018–2024) consumer cost of environmental levies. Source: Office for Budget Responsibility (OBR), Economic and fiscal outlook – March 2019, see “Economic and fiscal outlook – supplementary fiscal tables: receipts and other”, Table 2.7.

Note that the Outturn column on the left is incomplete and has to be filled in by reference to Footnote 1, where we learn that the cost of the Feed-in Tariff in 2017–18 was £1.4 billion, which when added to the cost of the RO (£5.4 billion) and the CfD (£0.6 billion) gives a total of £7.4 billion. Adding the FiT the RO and the CfD projections we can calculate the forecast renewable subsidy costs for the following years as follows:

2018–19: £8.6 billion

2019–20: £9.2 billion

2020–21: £10.2 billion

2021–22: £10.8 billion

2022–23: £11.2 billion

2023–24: £11.6 billion

The current annual subsidy will be about £9 billion, and the grand total for the years 2017 to 2024 will come to nearly £70 billion.

These costs are recovered from the prices per unit of electrical energy (kWh) sold and thus the bills paid by all types of consumer, domestic, industrial, commercial and public sector. Consequently, about 30 to 40% of the total cost is recovered directly from consumer bills, because household consumption typically comprises 30% to 40% of total consumption in a year. In truth, the impact is likely to be slightly higher than the proportions suggest, firstly because industrial and commercial consumers can buy closer to the underlying wholesale price, and secondly because some intensive energy users have partial exemption from these costs, meaning that the burden is transferred to other consumers including households. It is worth noting also that VAT is charged on these subsidy costs and domestic consumers cannot recover that cost. However, for the purpose of a general estimate we can ignore these details.

In 2017 domestic consumers accounted for about 38% of GB electricity consumption, and we can assume that this is approximately correct today. Thus, the direct impact on British household electricity bills is 0.38 x £9 billion = £3.4 billion.

There are about 26.5 million households in Great Britain thus the mean annual renewables subsidy impact on a GB household electricity bill is £3.4 billion / 26.5 million = £129 per year per household.

However, this is not the end of the story. While the other 62% of the renewables subsidies are paid for in the first instance by industrial, commercial, and public sector consumers, these costs are obviously passed through to households in the costs of goods, services and general taxation. If a supermarket is compelled by policy to pay more for electricity to refrigerate milk it must recover that additional cost at the checkout. Of course, those companies with overseas customers could in theory pass on some part of that extra electricity cost to their consumers abroad, but given the intensity of international competition that is unlikely to be a strong effect.

Consequently, it is reasonable to assume that the vast bulk of these costs are recovered domestically, in Britain, meaning that we can calculate a total “cost of living” impact of the renewables subsidies by simply dividing total subsidies by number of households.

Thus, the total annual renewables subsidy impact on household cost of living is £9 billion / 26.5 million households = £340 per year per household, of which about £129 a year is recovered directly from electricity bills and the remainder, over £200 a year, from increased costs of goods and services.

Given the scale and regressive nature of these impacts it is high time that the Department of Business, Energy and Industrial Strategy (BEIS) resumed publication of its formal estimates of the total impacts of policies, of which the direct subsidies to renewables are only part, on both gas and electricity prices. These figures were last published in 2014 (Estimated Impacts) and discontinued, many of us suspect, because they were so embarrassing.

At that time the department calculated that in their central scenario for 2020 domestic household electricity prices (NB, prices per unit, not bills) would be some 37% higher than they would have been in the absence of policies, and that prices for a medium sized business would be some 62% higher. Future projections out to 2030 were equally disconcerting, and it is thus imperative to know whether government attempts to contain the costs of energy and climate policies are having any significant effect. Judging from the OBR forecasts the answer is clearly no. The public needs and has a right to see the details.

Three million households already in energy debt ahead of winter

Three million households are already in energy debt ahead of the winter.

Auto-switching service Migrate has revealed these fuel-poor households collectively owe nearly £417 million to their suppliers, with the year’s coldest weather soon to arrive.

Around 12% of people are currently in debt to their energy supplier, with customers owing an average of £124 each – this is likely to worsen as energy demand ramps up to keep homes warm during winter.

George Chalmers, CEO of Migrate said: “We’re barely into autumn and the coldest weather is yet to come, so it’s alarming to see such a large number of people already in debt to their supplier.

“The biggest concern is that those who are in debt will ration their energy usage in an effort to reduce their bills but cold, damp homes can have an impact on not just physical but mental wellbeing as well.”

On your utility bill, the soaring price of green gesture politics

IN the murkiest depths of an official release of financial data lurks some fascinating information about just how much the political class’s obsession with renewable energy is costing us. In a blog published yesterday by the Global Warming Policy Forum, my colleague John Constable outlines the contents of Supplementary Table 2.7 of the Office of Budget Responsibility’s Economic and Fiscal Outlook for March 2019.

The table shows that the cost of the main bungs to the renewables industry – the Renewables Obligation, Feed-in Tariffs, Contracts for Difference and so on – has now reached £9.6billion a year, or £340 per household. Some of this goes directly on to bills, but a large share is passed on to industrial users, who then claw it back from consumers via higher prices. Either way, you pay.

Constable’s figures are only part of the picture. Vast expenditure is required on upgrades to the electricity grid to accommodate renewables, and a whole lot more needs to be spent on dealing with their intermittency. Not the least of these interventions are so-called ‘constraints payments’, when wind farms (typically in Scotland) are paid to switch off because the grid can’t get the electricity to where it is needed (England). In these circumstances, you pay three times over: once to get the wind farm to switch off, again for the electricity it didn’t produce, and then a third payment is required to get somebody to generate electricity where it is required. It’s fair to say that this is not a cheap intervention. One estimate reckons costs will soon be another billion pounds per year.

And it’s going to get worse. Reading between the lines of the OBR figures, Constable projects that £9.8billion figure rising to £12billion a year by 2023. With grid costs rising too, the figure could easily reach £500 per household.

It’s worth remembering why we are doing this. It’s certainly not going to make any difference to the Earth’s temperature: our carbon dioxide emissions are a tiny fraction of the global total, and smaller than annual increases in China and India. No, we are doing this as a gesture: a way to show our leadership on climate change, setting an example to the rest of the world.

I hope that the sense of national leadership makes you feel better when the time comes to pay the bill.


The 10 largest coal producers and exporters in Indonesia:

  1. Bumi Resouces
  2. Adaro Energy
  3. Indo Tambangraya Megah
  4. Bukit Asam
  5. Baramulti Sukses Sarana
  6. Harum Energy
  7. Mitrabara Adiperdana 
  8. Samindo Resources
  9. United Tractors
  10. Berau Coal
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