future clean tech

Australia’s left-leaning New Matilda yesterday published a piece asking, Is Geothermal The Baseload Alternative? It reminds me that I want to get around to publishing my own calculations of price per megawatt for various energy sources in both Australia and the US. Geothermal could be crucial to the energy mix over the next few years but there are too many figures floating around out there. So more on that soon.

The author, David Hollier, provides a neat summary of how geothermal works:

To harvest geothermal energy, you need to drill four to five kilometres below the surface, where the rock temperatures are 200 degrees or more, hot enough for the liquid they heat to drive turbines. The first challenge is to get wells down into this layer to check that the rocks are hot enough. If they are, you can pump water into the rock at a pressure high enough to fracture the rock, and to allow the water to move through the fractures, forming a reservoir. Then other wells are drilled, and the hot water is pumped back up to surface where it drives the turbines.

Once the system is up and running, this hot water can be constantly recycled. There are no other inputs into the process. Unlike wind and solar, it does not rely on specific weather conditions. And apart from the wells, there is no “mine” as such: minimal demands are made of the land. Geothermal is a renewable energy source that taps the ceaseless heat production at the earth’s core as it radiates towards the surface.

He raises an issue that I’ve mentioned a few times recently here:

So if all this is true, why have we heard so little about geothermal? If it’s a solution to the clean energy crisis, why hasn’t industry development been accelerated before now? Is it a victim of coal industry resistance — or a PR failure? Or might it have something to do with the fact that there are now more lobbyists than credible climate change scientists doing the rounds in Canberra?

Too bloody right. As Al Gore has noted many times, the lack of political will is the chief obstacle to action on global warming:

A couple of minor points. First, geothermal is not totally GHG-neutral. There are some emissions, primarily associated with the construction of the plant. Also, I take issue with David’s point here: “Solar and wind. Wind, tidal and solar. We all know that these can’t yet deliver baseload.” This is not true and I’ve written about it before.

Yesterday I wrote about an email exchange I had with a friend of mine back in Sydney about global warming science. Ultimately, he agreed that it would be prudent to stop burning fossil fuels, if only because the particulate matter they leave in the atmosphere is self-evidently harmful to human health. I find that there is usually common ground with even the most hardened climate skeptics (which my friend insists he is not, as he believes that “the climate is changing, but it is natural.”)

The conversation turned to the challenges facing clean energy in replacing energy from fossil fuels. He wrote:

The problem is that at the moment we don’t have an energy source which is as efficient and as reliable as coal for base-load power, i.e. power for industrial use.

Solar, hydro, nuclear are all fine for residences, but none of them will be able to replace coal at the industry level. You would need to cover the entire state of NSW in solar panels in order to supply enough energy to run our industries.

My reply:

I don’t agree with you about base load. I don’t know why this myth persists. It is true that you can simply keep feeding coal or gas into a traditional plant and keep it running at all times, but there are loads of ways to mitigate renewable intermittency.

One is by spreading the energy receptors across a broad footprint. A recent study showed that Europe could be fully powered just by wind, without any additional energy sources, because when it’s not blowing in Sweden it is blowing elsewhere. People with the training and disposition of actuaries are able to work these kinds of things out to a high degree of accuracy. We even know what percentage of the year a certain site gets wind – with astonishing levels of accuracy – even though we don’t know precisely when the wind will blow.

And then of course you have tidal, which is nascent but does not suffer from any intermittency; geothermal which is constant; and you can augment any of the intermittent sources with other intermittent sources. Wind by itself would do just fine if you located it over a broad area, as I’ve mentioned, and you could always have backup coal plants to fire up when needed; but you could easily have a 100% renewable grid by using an appropriate mix of solar, wind, tidal and geothermal.

And then you have additional measures like demand response and load shedding to manage demand; energy storage using large battery banks… the possibilities are endless.

8 cents per kilowatt for solar from space?

The Japanese redefine the future of cleantech.

Yesterday, I attended the New York Society of Security Analysts’ “Future of Energy Investing: Exploration, Production and Clean Technology Conference.” The email reminders advertised it as simply NYSSA’s “Energy Conference: Exploration and Production,” which was indicative of the fact that this is the first time NYSSA has included cleantech as part of its energy mix. To my knowledge, anyway.

After the oil and gas players presented in the morning, Sanjay Shrestha of Lazard Capital Markets gave the lunch presentation. He gave a basic overview of the history of the clean energy space to a crowd which mostly seemed to be composed of fossil fuel types. He noted that meaningful growth began when Germany passed its renewable energy law, and went through the growth of each sector, expressing doubt about the efficacy or clean-ness of “clean coal”, a position I identify strongly with and on which more in a post next week. Sanjay regards grid services opportunities as where the big growth will be in coming years. Overall, he says that he remains “bullish” on the prospects for the sector which he believes will be the “next industrial revolution.”

The three cleantech companies that presented were Juhl Wind (a community/distributed wind energy firm), PureSpectrum (lighting/energy efficiency), and Axion Power International (lead-acid batteries). Community wind seems to me to be more of a hassle than it’s worth – too many landowners to negotiate with, and for limited return. I am also unexcited about compact fluorescent lights (CFLs); PureSpectrum seems to be very excited about “a dimmable CFL that works” but, honestly, I can’t stand CFLs and I can’t imagine a scenario in which I’d install one that needed to be dimmed, short of the government forcing me.

On the other hand, energy storage seems to be a sector that will be increasingly important. I don’t know whether Axion’s technology is particularly special – something about eliminating lead from the negative electrode, which means about as much to me as it does to you – but its customer list is impressive. In the automotive market alone they have BMW, Fiat, Ford, Renault, Suzuki, Toyota and VW – and then there’s the industrial/motive power market, wind energy storage, utility grid support, PV storage, and other markets. It’s a huge area, and the growth in it will be explosive. The electric vehicle market is about to explode, and grid energy storage support will inevitably be one of the big winners in the growth in grid services opportunities that Sanjay Shrestha predicts. I can’t see any player in this sector losing.

It was interesting to see clean technologies dispassionately put in the context of the broader energy sector to which they belong. This was not a conference designed to drum up interest in some new snake oil industry; NYSSA has no reason to talk up cleantech for its own sake. If any further proof were needed that clean energy will remain a serious part of the energy mix, inclusion at a conference like this is it. But it was also clear that renewables are still a very small part of the sector, and that it will take some time to entrench them as serious rivals to oil and gas.

At least, that seemed to be the view of some of the attendees I spoke to when we broke for lunch. The oil and gas people were confident and brash, but I saw no real reason for them to be – if anything, the way oil and gas are explored for and dug up is a less attractive business proposition than the intermittency and other issues surrounding renewables. Oil and coal and gas are relatively cheap today because they’ve been around for so long and because the government subsidises them simply for being the incumbent technologies. But if fossil fuels were dispassionately compared with clean energy without the former having the advantage of incumbency, I see no reason, with today’s technology, why cleantech wouldn’t win an easy victory.

Very interesting. Essentially, Peter says that while there may be a finite amount of oil on the planet, we haven’t nearly reached peak oil yet. New technologies are enabling us to go deeper and further offshore for oil. The catch is that the further and deeper you go, the more expensive it is. “It’s climate change and more expensive oil, not the fact we’re running out of oil, that will drive change.” Watch:

Fairfax is reporting, “Deal struck on renewable energy“. Finally, Australia has a renewable energy target (RET): 20% by 2020. Politicians seem to like targets that sound good when you say them. Anyway, by 2020, retailers will be forced to buy at least 20% of their energy from renewable sources.

This target will be enough to give clean energy a big boost. This is actually an unfortunate state of affairs, because it means that the bar was already set too low. Truth be told, the bar wasn’t set anywhere and it will only kick in on January 1, 2010. I maintain that we are perfectly capable of reaching 80% sometime in the 2020s. There is no reason to maintain coal-fired power plants much beyond 2030. I mean, nobody is financing the construction of them today anyway.

That’s because the market anticipates the Emissions Trading Scheme which the Coalition is still dithering over. Now, nobody can say that this Labor Government has a surplus of vision, but the Coalition is another story entirely. It has stalled the introduction of a trading scheme, and contributed to the dilution of this RET:

The Coalition has secured more exemptions for industry from the cost of the RET in the deal struck today. That means households will pay a greater share.

Mr Hunt said heavy-polluting, trade-exposed companies would be exempt from paying either 60 per cent or 90 per cent of the cost of the RET. That’s more of a free ride than the Government originally offered.

The fact that there is now a mandatory 20% renewable target is certainly good news. But a pure RET would not only act as a mandate for renewable energy production, it would also act as a disincentive to dirty, polluting corporations. The Coalition has softened the blow even more for these companies. Any government assistance should be diverted to build the renewables industry – not provide welfare to old dirty anvil industries.

And then there is this nugget from Opposition Environment spokesman, Greg Hunt:

Before today’s deal, the Government had already bowed to some Coalition demands, agreeing to treat coal gas as “renewable”, and separating the RET from the failed ETS.

Mr Hunt said the new deal was “a victory for common sense and a victory for the environment”. It was also a victory for Opposition Leader Malcolm Turnbull, he said.

Of course, if the Opposition thinks that treating coal gas as “renewable” is a “victory” for anything or anyone but the carbon mafia, they are sadly mistaken. Voters will continue to note the Opposition Leader’s reluctance to confront the conservative rump of his own party and its coalition partner. And businesses are even more keenly aware of the undue consideration politicians are giving to the rich, dirty energy industry. This comes off as nothing if not another failure for a beleagured opposition leader.

Over the last couple of years, Australia’s territorial waters were quietly expanded for one reason and one reason only: the discovery of liquefied natural gas (LNG) off the Western Australian coast. A few stories have been seen and heard on the ABC and in the press over the past 18 months, hinting at vast, untold wealth lying within Australia’s newly extended borders, but now our new golden goose has begun to lay eggs.

Yesterday, a $50 billion deal was done to supply China with gas for the next 20 years. And this is certainly not the end of it: according to the Sydney Morning Herald, “the resources boom is far from over”.

While this is very good news for Australia, and while gas is the least dirty of the fossil fuels, the implications for the renewables industry remain unclear. The much-hyped “end” of the resources boom was a shot in the arm for renewable energy, an industry which suddenly had new relevance in an economic downturn as Australians were mourning the end of the gold rush.

But now, gas is challenging coal as king of Australia’s dirty fuels industry. With all this cash flowing in from China, there will be less of an incentive for the government to pump money into clean energy. Why put dollars into a hard sell like solar thermal plants when you can make billions by siphoning LNG out of the continental shelf?

Last week, Terry McCrann – “Australia’s foremost business commentator” – published a piece entitled The enormous cost of hot air. It would be charitable to call the title of the article ironic.

Terry McCrann, allegedly "Australia's foremost business commentator"

McCrann parrots the rest of the world’s skeptics in citing a Spanish paper whose most outrageous claim is that each green job created leads to the destruction of at least 2.2 jobs in the wider economy.

This is, of course, utter nonsense. The Spanish article makes this spurious claim simply by dividing the amount of renewables subsidies per worker (€571,138) by the average amount of resources the private sector employs per worker (€259,143). Voila, 2.2. The problem with this calculation are many, including, but not limited to, the following:

• No account is taken of the amount of subsidies given to the dirty energy sector, or any other economic sector for that matter.
• While government subsidies represent an opportunity cost, it is a stretch to call the use of those resources “job destruction” when no actual jobs are being destroyed.
• State subsidies are always going to be higher for nascent industries. Afterwards, economies of scale will accrue.

Here’s Terry McCrann’s credulous take on it:

While it would be inappropriate to translate Spain’s experience directly to the US, the Obama Administration’s claim that “green energy” could create 3-5 million jobs is likely to directly wipe out 6.6 million to 11 million jobs elsewhere.

Why? Because of the costs to production and employment, principally in metallurgy, non-metallic mining and the food processing, beverage and tobacco industries.

It is not clear whether the study factors in the jobs that would be lost from reduced consumer spending because of the higher power costs.

But don’t panic. Because none of this is real. It’s fiction in the mind of a skeptic. In reality, yes, some jobs will be lost. And that is no bad thing – jobs are in a constant state of destruction and creation. Punch-card computer operators were reskilled. Asbestos workers had to find other work when we finally figured out how toxic asbestos is. And now, as we finally acknowledge what we’ve known for a long time – that dirty industry is killing us and our planet – jobs in dirty industries will be lost.

But jobs will be created in clean industries, and they will far outweigh the number of jobs that will be lost in dirty old industries – no matter how much tricky mathematics some heretofore unheard-of academic and “Australia’s foremost business commentator” try to spring on the unsuspecting public. You simply can’t say that 2.2 jobs will be lost for every green job created on the basis that significant government expenditure is going into the clean energy space right now. Much of that is capital spending. To say that this initial spend is “destroying jobs” is to compare apples and oranges. It is doing nothing of the sort. The fuel costs of renewable energy are generally zero, and so in the long run, we’ll be saving money on energy and freeing up resources to create even more jobs.

Frankly the illogic is enough to give a man a seizure. But it is so silly that it has been taken seriously by the kinds of elements that take silly things seriously (to wit: the Washington Post (which deigned to sneer at the president’s press secretary for calling the premise of the article “weird” and “simply flat wrong”), the New York Post, and “Australia’s foremost business commentator”, among others) that I just had to take it on.

There’s more to say about this, but I’ll leave it for next time, because there will surely be a next time.

Excellent article in today’s New Matilda – The Unavoidable Green Future (will open in new tab/window). It’s an interview of Ben McNeil, author of The Clean Industrial Revolution. Here’s my favourite bit:

“Right now we’re in the same position in Australia as GM was in the 1990s. We’re protecting high-carbon assets. We’re protecting coal, we’re protecting oil and we are looking at carbon price, a carbon cost in the future. There is no doubt that the world is going to value carbon, and that means higher carbon costs. So how the hell is coal going to survive in a world moving to low carbon? It’s not going to.”

McNeil points to research by Chris Reidy at the University of Technology Sydney which estimated a public subsidy of $9-10 billion on 2005-06 figures for the transport and electricity industries alone.

“When people say let’s do nothing, let’s just play that scenario out,” McNeil continues, “if we do nothing in terms of emissions, it’s essentially saying let’s rely on these old relics for our future prosperity in terms of economic growth. But Japan and the EU, who buy most of our coal, are de-carbonising their economies. Why would they be buying coal? They’ll be getting gas, they’ll be getting renewables, they’ll be getting more nuclear, they’ll be doing other things. So someone who says this will be devastating to our economy — it doesn’t make sense.”

But what about the argument, often voiced by the Opposition, that Australia should wait until the rest of the world puts a price on carbon before it acts?

“It’s funny. When someone says there is no current price for carbon they’re just living in la-la land. There’s a very strong shadow price for carbon right now, irrespective of the Government. Last year, 45 coal-fired power stations went off the books in terms of planning. They didn’t go off the books because of coal technology — we’ve had coal for a long time. They [were cancelled] because of the financiers, the Wall St bankers. They said ‘Actually, in a carbon constrained world, where you’ve got a 50-year asset, the carbon price could go from $20 a ton to $200 a ton within 10 or 20 years, so we’re talking about huge carbon liabilities here.’”

“These guys in the coal industry are just delusional, completely delusional.”

To read more, click here.

A postscript to this post from a little while ago about distributed power generation: the press recently reported that foreign spies had compromised the security of the US electric grid.

Two things emerge from this. First, I would argue that any move toward decentralising power generation inevitably increases the security of the system. Wind turbines on city streets and solar cells on residential and business roofs will manifestly reduce the load on our presently centralised power generation infrastructure. There are a plethora of ways in which this power generation infrastructure can be radically decentralised, as I’ve previously touched on, which I think will impact positively on our energy security.

Secondly, the article suggests that smart grids, which are a clean technology, increase the risk in the system by opened up more nodes for malevolent actors to infiltrate. I want to qualify this suggestion. While it is certainly true for the current, centralised system that smart grids increase the security risks, it is probably far less true for a more decentralised system. At the present time, if the grid fails in any particular region, all power is lost. However, should we decouple each local council area, even partially, from the main grid – that is, should we reduce our local reliance on the power generated by distant energy generation stations – we reduce the risks that attach to smart grid technology.

It’s my belief that eventually, clean energy technology will allow us to build multiple redundancies into the system. For instance, if your local urban wind turbines run into trouble, backup energy generated by wind farms or other technologies will be available from a broader grid. And vice versa. If the grid goes down in your area, you may still be able to use locally- or individually-generated and stored power – and a smart system may be able to allocate that power on a priority basis until the main grid comes back online. Ultimately, then,  I see cleantech as a potent tool for increasing our energy security.