CleanTechnica is the #1 cleantech-focused
website
 in the world. Subscribe today!


Clean Power agora-market

Published on December 10th, 2013 | by Giles Parkinson

130

What Happens When Energy Prices Are Zero?

Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

December 10th, 2013 by  

Originally published on RenewEconomy.

Numerous studies tell us that 100% renewables is possible, and cost-effective. But how to structure an energy market where there is no fuel cost? Germany is already grappling with this dilemma, and the world is watching with interest. This is part of a series of articles on Germany Energiewende. More can be found in our Insight section.

One of the big questions about scenarios for 100 per cent renewable energy production is how to structure the energy market. We now know that having electricity supplied to a major economy entirely by renewable energy sources is possible, and most likely no more expensive than building new fossil fuel generation.

What we don’t know is how to structure the energy market so it provides the right incentives: If the marginal cost of solar and wind energy is close enough to zero (because there is no fuel cost), then the energy price in a 100 per cent wind and solar market is going to be zero – at least in the current market structure. But who would invest?

Electricity lines in Germany. Image Credit: Shutterstock

Image Credit: Electricity lines in Germany via Tanee Nomai/Shutterstock.

This is one of the major questions being put to regulators and policy makers around the world, but the country most in the firing line is Germany, one of the world’s most successful industrial nations.

It’s not that Germany is about to arrive at 100 per cent renewables any time soon. But the penetration of renewables (now above 25 per cent) is getting to the point where the current energy market, based around the cost of fuels, is no longer functioning as it used to. And by the time the country gets to 40 per cent by 2020, and close to 60 per cent soon after 2030, this will be a critical issue.

Some analysts, such as Macquarie Bank, have described the energy market as already broken, and there is no doubt that fossil fuel generators are screaming in pain because their coal- and gas-fired plants no longer make the profits they once did. German regulators and policy makers concede that their energy markets need to be redesigned.

How they do that is going to be one of the big tests for Germany’s Energiewende, the transition from a largely centralized base-load generation system, with lots of nuclear, to one based around renewables. And it is going to be one of the big challenges of the new “grand coalition” between Angela Merkel’s centre right CDU, and the left of centre SPD, which has its base in the coal-rich regions of northern Germany.

And what is decided, and is achieved in Germany, will likely have a significant impact on the pace, and ambition, of renewable energy schemes in other major economies.

Still, despite the clamouring of the incumbent industries to have capacity mechanisms introduced into the market, the German policy makers appear to be in no hurry to indulge them. The recent treaty between the two main parties provides for no capacity mechanism before 2018, by which time the share of German renewables may well be close to one-third of total demand.

It could be that Germany is looking for the survival of the fittest. “I would be very, very careful not to jump into capacity markets too early,” says Andreas Loeschel, who heads a government appointed expert committee looking into the energy transition process. Loeschel is also based at the Centre for European Economic Research (ZEW), and is also professor of economics at the University of Heidelberg.

“We don’t need them (capacity markets) at the moment,” he says. “We have excess capacity, but maybe it is something for the future.”

Rainer Baakea former permanent secretary to Germany’s Minister of the Environment and now head of an energy industry think tank called Agora Energiewende, says some form of capacity market in the future is inevitable, but it is likely to be a mechanism that allows maximum flexibility, and so encourages not just “baseload” generators but other enabling technologies such as energy storage, demand management, smart grids, or whatever else is needed to deliver flexibility in a market with high renewables penetration, and the potential for large amounts of “pro-sumers”, households and businesses that can generate their own electricity.

“We need a market where different answers to the problem are able to compete with each other, and we need more flexibility in the system,” Baake told RenewEconomy in a recent interview in Berlin.

“A few years ago, we thought we would have an energy only market and everything would be fine. Now we are looking at what sort of market we should introduce and when the right time to introduce it will be.”

(And it won’t be a simple capacity market, where generators receive payments simply for the ability to provide output on demand, even if it is rarely used, as is the case in Western Australia. It is more likely to be a sort of “capabilities” market, a more refined version that reflects environmental and other qualities. It’s just the name “capabilities” market hasn’t caught on yet).

This transition seems to be accepted by the two biggest generation groups in Germany, RWE and E.ON, who are both now talking of a move away from centralized generation and towards distributed systems, where consumers do produce a lot of their own energy, and the role of utilities is to provide security of supply, added value and services to those “pro-sumers”. (Please read today’s interview with E.ON’s chief executive, and the recent insight into RWE’s new strategy).

Of more immediate concern, however, to the German regulators is how to manage the cost of this energy transition, and the cost of what has already occurred in the form of feed-in tariffs. Although it is important to note that a lot of nonsense gets written about this issue.

Loeschel says Germany – as a whole – is paying the same percentage of GDP (2.5 per cent) on electricity costs as it did 20 years ago. The problem is how these costs are distributed. The retail consumer has borne the brunt of the EEG, the tariff assigned to support green energy support schemes, because many industries are exempt.

The irony is that as the amount of wind and solar has increased, the price of wholesale electricity, on which many energy intensive industries costs are based, has fallen by nearly half. And because of the way the EEG has been structured, a fall in the wholesale price results in an increase in the EEG tariff paid by consumers. This, says Loeschel, has allowed complaints about rising electricity bills to be exploited by those who want to slow the Energiewende down.

But as Baake points out, no party that had an Energiewende slowdown as its official policy got any seats in parliament in the recent elections. And the grand Coalition has rejected any talks of retrospective changes in tariffs. Indeed, it has actually increased and expanded the renewable energy targets out to 60 per cent by 2035 – although some people say the country could achieve more, and this in fact represents a slowdown!

Still, these costs need to be capped. One of the causes of the scare campaign against the Energiewende is that industry fears it will lose its recent favourable treatment and energy discounts. “The people who are complaining the most are actually better off than they were a few years ago,” Loeschel says.

Baake’ Agore Energiewende has come up with its own solution, as illustrated by this graph below, although it probably requires a bit of explanation, particularly as it is in German.

agora market

The diagram is designed to illustrate how to get to 40 per cent renewables with minimum cost. This requires a total of 240Twh of renewable production – out of total grid demand of 600TWh. The vertical box on the left, EEG 1.0, represents the costs of tariffs already committed. Baake says this is around 17 euro cents/kWh. That, he says, was the cost of Germany’s learning curve, and it is locked in until 2020, when it will start to decline as the first tariffs expire. There is no talk of retrospective cuts, so the big question is what to do in the future.

Baake proposes something called EEG 2.0. Having installed 160TWh of renewables at an average of 17c/kWh, he suggests a cap of 8.9c/kWh for new renewable installations. This is nearly half the cost of EEG 1.0 and is highly significant, because from now on it means that whatever Germany invests in, be it fossil fuels or renewables, the energy costs will be the same. “We are at a turning point in the cost debate,” he says.

However, to encourage enough fossil fuel or balancing capacity to remain in the market, Baake proposes the capacity measures mentioned above. Right now, wholesale power prices are at 3c-5c/kwh, many plants need higher returns to ensure positive cash flows. This could come from some form of capacity premiums.

Of course, the incumbent fossil fuel industry would like that light blue rectangle to be bigger and broader, but Baake says it is important for this part to be controlled. Many see this as the biggest threat to the development of the Energiewende.

Loeschel is happy to see a shakeout in the market. “The wholesale price has probably dropped a little too far. But this will change if we allow capacity to go out of the market. The larger companies try to bribe policy makers by telling them going to shut down power plants. We should now allow that.”

But, he conceded, changes are needed. His proposal is to create “mini markets” that would result in capacity being installed where it is most needed, and maybe overcome Germany’s principal problem of having a lot of generation away from the main areas of demand.

“I’m very confident about the future of the Energiewende,” he says. “This is a long-term project and an important one for Germany. We should not throw this whole thing out just because we have some problems in the first few years.”

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.



Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

Tags: , , , , , , , , , , , , , , ,


About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • rlhailssrpe

    This article saddens me; the comments are even worse. People who do not have a clue about energy engineering, do not even comprehend the function of engineering, are pontificating about a very complex technology which sustains life.

    In the real world, the cost of energy is skyrocketing, both in Germany and the US. The reason is that both nations are attempting to expand green energies which are not cost effective, due to inherent characteristics, i.e can not be altered by man.

    Costs can be broken down into direct costs (costs of production) minus subsidies (which is the portion charged to somebody else), plus taxes, and profits. To me, it is obscene to subsidize the purchase of a green car by giving the US owner $7500, and charging it to his children, via federal debt. His new born, and every child, carries $60,000 in federal debt , which no one has a plan to pay off. This is the only way energy costs will go to zero.

    For bulk supply of the grid, there are two cost effective options (both are needed), the fission of uranium and the combustion of carbon. Any nation which chooses an alternate energy for bulk supply will cease being an advanced nation, within decades.

    I spent forty years engineering energy systems, including a score of nukes and two score fossil fueled power plants and held a handful of PE licenses. I welcome rebuttal by peers but ignore nonsense.

    • Bob_Wallace

      Please explain how the cost of energy is skyrocketing in Germany when the wholesale cost of electricity has dropped to half over the last four years. (Graph at bottom of comment.)

      http://www.welt.de/wirtschaft/article119026760/Warum-die-Regierung-bald-Atomkraftwerke-rettet.html

      And when the price of industrial electricity in Germany peaked in 2009 and has fallen each year since.

      http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=ten00114

      As for this – “For bulk supply of the grid, there are two cost effective options (both
      are needed), the fission of uranium and the combustion of carbon.”

      No, there are other cost effective options. And neither or your favorites are needed. You may have spent 40 years engineering energy systems but you clearly did not keep up with developments in your field.

      Do this, go to the “100% Renewable” section linked on the upper right of the page and do some reading. Start with the Jacobson and Delucchi paper so that you’re up to speed on resource availability. Then read the Budischak paper to see how it would be possible to run a very major grid on (almost) nothing but wind and solar. (No one is suggesting a solar/wind/nothing else grid.)

  • ralfyman

    The problem isn’t so much monetary investment as availability of resources, including petrochemicals needed for various components used for renewable energy.

    • Bob_Wallace

      Did you not think before you wrote or are you trolling?

      Petrochemical availability for renewable energy when we burn through the better part of a million barrels a day for transportation?

      • ralfyman

        Money is not a problem because in terms of credit we’ve created over a quadrillion dollars of that in notional value, in the form of unregulated derivatives. Only a fraction of that was needed to cause the global economy to crash in 2008. We should expect more.

        We need petrochemicals in the form of plastics and other products to manufacture components needed for renewable energy. That’s because much of our manufacturing and even food production are heavily dependent on fossil fuels both for energy and for petrochemicals.

        We need bunker oil to transport the same components via cargo ships to different parts of the world. And JIT systems have to stay in place in order to keep costs down.

        Renewable energy has limited energy returns, but “business as usual” requires a lot more, i.e., the equivalent of one Saudi Arabia every seven years just to meet an oil demand increase of 2 pct per annum, something which has been taking place for three decades.

        We are now forced to use unconventional oil because conventional oil production has barely risen to meet demand. And a growing global middle class in BRIC and emerging markets has led to rising global oil consumption and demand.

        There’s an energy trap involved in renewable energy, i.e, the energy cost of manufacturing and using components needed for renewable energy (including oil needed for petrochemicals, delivery, etc.) which is paid for through lower energy returns for the latter. See, for example,

        http://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/

        Thus, we face a combination of predicaments: increasing population, increasing resource and energy demand, manufacturing and food production that are heavily dependent on fossil fuels, lag time in the decades to transition to renewable energy while dealing with a decline in oil production, and the use of military forces bulked up by significant armaments production to control oil and other resources in different parts of the world.

        FWIW, the IEA argues in its Outlook 2010 report that this transition will require a drop in oil demand increase per annum by 70 pct, oil and gas production operating at maximum depletion rates, and replacement of the demand not met with renewable energy through strong government policies and cooperation between countries.

        The last part–cooperation and coordination–will be critical because we have countries that need to consume more energy and resources, including oil, to maintain economic growth, while hardly agreeing with each other on preparing for peak oil or dealing with global warming, let alone environmental damage.

        • Bob_Wallace

          Much of what we now do with oil can be done with renewable energy and with non-petroleum feedstocks.

          At this time we do need liquid fuels for some applications. Over time we can substitute biofuels to some extent.

          Please, no Tom Murphy stuff. That guy is an embarrassment to an outstanding university.

          Let’s jump ahead a bit. Those of us who spend some time here are more than aware of the problems we face. We don’t need a lecture on those issues.
          You are worried about oil supplies? Fine.

          Give the auto industry five years to adjust their factories so that they produce nothing but EVs and PHEVs. We’ll cut personal transportation use by 75%. This is technology in hand and on the road.

          Create regulation that moves more of our freight from highway to rail, using trucks for ‘the last mile’.

          Start transforming rail from oil to electricity as was done with the Trans-Siberian railway. Many of our engines are already electric hybrids.

          • ralfyman

            The problem isn’t ensuring that the auto industry can manufacture EVs and PHEVs, it’s manufacturing EVs and PHEVs using less oil:

            http://www.businessinsider.com/131-years-to-replace-oil-2010-11

            And not just less oil but other resources, from rare earth elements to uranium to coal, etc.:

            http://au.ibtimes.com/articles/262646/20111207/shortage-rare-earths-tragedy-waiting-explode.htm

            http://www.theguardian.com/environment/earth-insight/2013/jul/02/nuclear-energy-crunch-uranium-peak-blackouts

            http://www.bloomberg.com/news/2013-10-30/peak-coal-passed-in-2008-as-mining-costs-rise-group-says.html

            Put simply, it’s not just oil used for personal transport but oil used to extract resources, and manufacture and deliver components needed for renewable energy, among other things.

            In addition, our energy return requirements are high:

            http://www.scientificamerican.com/article.cfm?id=eroi-charles-hall-will-fossil-fuels-maintain-economic-growth

            That is, for a middle class lifestyle that involves using EVs and PHEVs for personal transport, we will need an energy return of 10:1 or better, and probably even higher as a global middle class grows. And then we will also require more resources, especially minerals needed to manufacture various necessities as well as resources such as phosphates for planting.

            Given such a lifestyle (i.e., business as usual, but with more use of renewable energy), the global population will need the equivalent of one Saudi Arabia every seven years, something that renewable energy will not be able to fulfill in the long term.

            With that, we will be forced to use renewable energy because of peak oil and global warming, and hopefully it will be enough to meet the basic needs of a growing global population facing increasing resource demand coupled with environmental damage and long-term effects of global warming.

          • A Real Libertarian

            2010?

            Outdated.

            P.S. We will have a massive amount of oil from the Electric-Cars-Don’t-Burn-Oil field.

          • ralfyman

            You’re free to prove your point by discussing the 2013 report.

          • A Real Libertarian

            What 2013 report?

            Again, we will have a massive amount of oil from the Electric-Cars-Don’t-Burn-Oil field.

          • ralfyman

            By 2010, I am referring to the IEA Outlook 2010 report. I have no access to the 2013 report, so I do not know what evidence you used to argue that the 2010 report is outdated. My guess is that you read the 2013 report, which is why I wrote that you are free to prove your point by discussing the latest report.

          • A Real Libertarian

            2010 is outdated because it’s before the massive price drop in renewables.

          • ralfyman

            The problem isn’t prices but energy returns. Read the IEA Outlook 2010 report and

            http://www.theoildrum.com/node/3786

            for details.

          • Bob_Wallace

            Ralf – explain why we need a high EROEI from a solar panel if 100% of that panel is sourced from solar panels.

            Let’s assume a factory which mines the raw material for silicon, aluminum, etc. with electric powered machinery. The ores are melted in electric furnaces. The factory runs with electricity, no oil. The panels are shipped from plant to site with electricity.

            Given a 100% electric system what role does the concern of EROEI fill? (Other than cost.)

          • Bob_Wallace

            Our manufacturing is done mainly with electricity. Even much of what is done in terms of mineral extraction and transportation could be done with electricity.

            We use almost no oil to produce electricity.

            We don’t need an EROI of 10:1 with renewables (even though we have more than that now). We aren’t using up a limited supply source of energy when we use wind and sunshine. It’s limited supply fossil fuels where EROEI becomes important.

            “Given such a lifestyle (i.e., business as usual, but with more use of renewable energy), the global population will need the equivalent of one Saudi Arabia every seven years, something that renewable energy will not be able to fulfill in the long term.”

            Here you telegraph the fact that you did not read the Jacobson and Delucchi paper. If you wish to be taken seriously then you need to get up to speed on renewable energy.

          • ralfyman

            Oil has around a 50 pct input in manufacturing:

            http://www.businessinsider.com/energy-is-a-small-input-in-manufacturing-2013-4

            and is an important component in food production:

            http://rstb.royalsocietypublishing.org/content/365/1554/2991.full

            http://www.resilience.org/stories/2005-04-01/why-our-food-so-dependent-oil

            with more energy needed for food meat and dairy products:

            http://www.treehugger.com/green-food/energy-required-to-produce-a-pound-of-food.html

            It has been a significant component of energy for various economies:

            http://www.mhi-global.com/discover/earth/issue/history/history.html

            which is why even as oil consumption is dropping in the U.S., EU, and Japan due to economic crises, it is rising for the rest of the world:

            http://ourfiniteworld.com/2013/04/11/peak-oil-demand-is-already-a-huge-problem/

            We don’t have an EROI higher than what we need, which is why oil prices have tripled and conventional production can no longer meet demand, and the energy returns for renewable energy are not very high:

            http://www.theoildrum.com/node/3786

            The problem isn’t energy available from wind and sunshine but the materials needed to store and deploy that energy. Doing so will require a manufacturing system that’s heavily dependent on oil, especially given increasing resource and energy demands from most of the world due to a growing middle class:

            http://www.bbc.co.uk/news/business-22956470

            It’s not just energy but resources that are needed to sustain a world of personal transport and leisure via EVs, much higher than what biocapacity can allow:

            https://en.wikipedia.org/wiki/List_of_countries_by_ecological_footprint

            Thus, in order to sustain the current world, we will need the equivalent of one Saudi Arabia every seven years, or more than 2-pct increase in oil consumption, as seen in the last three decades. To transition to other energy sources, to meet a growing global middle class and a growing population, and to adjust to environmental damage, we will need even more.

            Finally, many of these points were discussed in the IEA Outlook 2010 report, but the requirements are extensive. The regulation that you referred to earlier won’t be enough, as strong government policies coupled with major cooperation and coordination between countries will be needed. And that will involve countries that have hardly cooperated with each other, let alone agree on what to do concerning global warming, or even acknowledge peak oil.

          • A Real Libertarian

            “Oil has around a 50 pct input in manufacturing:”

            Most of which is in the oil business.

            “Thus, in order to sustain the current world, we will need the equivalent of one Saudi Arabia every seven years, or more than 2-pct increase in oil consumption, as seen in the last three decades. To transition to other energy sources, to meet a growing global middle class and a growing population, and to adjust to environmental damage, we will need even more.”

            How does that make sense? It’s like “intermittent renewables can’t power the world, only nuclear can” it’s not a statement of fact, it’s a statement of faith.

          • ralfyman

            I’m not sure how the oil business accounts for the 50 pct input.

            I don’t understand why the statement I gave has to make sense or is a statement of faith, as I am simply describing to you what has been taking place the last three decades, according to the IEA. The IEA assumes that the oil demand annual increase will not only remain but might even increase due to a growing global middle class. I did not refer to nuclear power.

            The next step is for you to explain how renewable energy sources will scale and meet that increasing demand.

          • A Real Libertarian

            “I’m not sure how the oil business accounts for the 50 pct input.”

            See Chart 17? See how big it is compered to the rest?

            Also note that isn’t “Oil [having] around a 50 pct input in manufacturing”.

            It’s Oil and Coal having around a 50 pct input in Energy-Intensive manufacturing.

          • ralfyman

            I’m not referring Chart 17 but Exhibit 7 and the quote that comes after it. Take a look at what makes up energy-intensive manufacturing. Many of these components are used not just for renewable energy but even the infrastructure and consumer goods that will use the energy produced.

          • A Real Libertarian

            So you admit that it isn’t “Oil [having] around a 50 pct input in manufacturing”.

            It’s Oil and Coal having around a 50 pct input in Energy-Intensive manufacturing?

          • ralfyman

            Obviously. Read my previous message on that in relation to renewable energy.

          • Bob_Wallace

            A number of organizations make “put a ruler on what has happened to date and draw a straight line forward” predictions.

            The probability of adequate range, affordable EVs is quite high. And if they don’t appear we have hydrogen fueled FCEVs backing them up.

            We have emerging disruptive technologies which will almost certainly cause petroleum and coal use to plummet. Slow at first and then accelerating.
            How does renewable energy scale? Like a house on fire.

            Remember, wind and solar have just recently become two of the least expensive ways to generate electricity. Installation is growing at incredible rates. There are no roadblocks (materials, etc.) which will slow their growth.

          • ralfyman

            I’m not referring to adequate range or affordability but multiple factors that are not considered in these predictions. Hence, my previous message.

            Petroleum and coal use are not plummeting but going the other way round. Read my previous messages for details.

            Renewable energy does not scale like “a house on fire,” at least within the timeframe we expect:

            http://theenergycollective.com/gail-tverberg/201576/renewables-good-some-things-not-so-good-others

            And I’m not referring to roadblocks that will slow the growth of the use of renewable energy but that will not allow for “business as usual,” e.g., EVs as personal transport for almost everyone. For more details, try the IEA Outlook 2010 report:

            http://www.iea.org/publications/freepublications/publication/name,27324,en.html

            The most critical will involve global coordination and cooperation between economies. What is the possibility of that occurring given the fact that these economies have barely done so the last few decades (the IEA adds that we should have started the transition to renewable energy more than a decade ago), that they are not doing so right now (where are the major agreements on dealing with global warming, and why aren’t they talking about peak oil? these are two critical motives for using renewable energy), and that they appear to be going the other way round (e.g., attacks on Iraq and Afghanistan, destabilization of Libya, Egypt, and Syria, and threats against Iran coupled with tension in Asia and elsewhere)?

          • Bob_Wallace

            Let me be more clear.

            We seem to be developing attractive alternatives to petroleum powered personal transportation.

            We could, right now, cut our personal petroleum use by over 50% by switching to PHEVs. Possibly more than 75%.

            We are likely to get EVs that totally eliminate our need for petroleum for personal transportation.

            If EVs don’t adequately progress it appears that H2 FCEVs could perform the same function, but at a higher price.

            There is no oil peak. There is only the fact that it costs more and takes more energy to extract oil than it did earlier. And the price to acquire oil, in dollars and energy, will continue to increase until we drastically reduce our use.

            Wind and solar have only recently reached the point at which they easily compete with traditional energy sources. Installation rates are rapidly growing around the world. There is nothing that should cause the increase in installation rate to slow.

            There will be no “world law” that deals with climate change. Most of the countries that are responsible more most of the emissions are working to reduce their levels of emission. Some have already peaked and lowered. Some are working on peaking.

            Some countries may never do the right thing. At least intentionally. However they may come along reluctantly. Renewables are becoming too cheap to not use.

          • ralfyman

            The problem isn’t developing alternatives to ICE vehicles, it’s the energy returns provided by renewable energy vs. what is needed for business as usual, which involves personal transport. Put simply, as the IEA puts it, we need the equivalent of one Saudi Arabia every seven years just to maintain current economic growth. To meet a growing global middle class, even more.

            The increase in energy cost for extracting oil is peak oil.

            Wind and solar are competing with fossil fuels because the energy returns for the latter have dropped due to peak oil. The problem is that the energy returns for a growing global middle class is high and growing. Read the article by Charles Hall for details.

            There will definitely be no “world law” not just for climate change but even for energy and resource use. The problem is that in order to transition to renewable energy we will need precisely that. In fact, you even referred to regulation in your previous message, which is what the IEA argues is strongly required for the transition.

            Global emissions are not going down. Oil and coal consumption are going up. Emissions from unconventional production are making things worse.

            Countries are moving to renewables because of peak oil. The problem is that a transition to that for the global economy involves a lag time, an energy trap, and the need to meet increasing energy increase. Again, the IEA explains this clearly in its 2010 report.

          • Bob_Wallace

            We do not need one new Saudi Arabia every seven years.

            We simply need to move off oil. Which we are doing.

            We now produce more electricity per year with solar panels than we use to manufacture solar panels.

            We now produce more electricity per year with wind turbines than we use to manufacture wind turbines.

            Oil is simply an energy source of convenience. We could substitute electricity.

            You certainly don’t need “One World Order” to transition the world to renewable energy. In fact, “order” is breaking down within countries as individuals and businesses install renewables on their own.

            Global emissions are not going down. I did not say they were.

            The EU27 peaked in the early 1990s and their emissions have been dropping since. The US peaked in 2005 and our emissions have been dropping. China calculated that they would peak in 2030, since then they have lowered that date to 2025.

            In the last year CO2 emissions grew at 50% the previous ten year rate. It’s dangerous to try to make a statement on a single data point, but it appears emissions are slowing. And we have to slow the rate of increase before we stop the rate of increase, before the reverse the rate of increase.

            Countries, companies and individuals are moving to renewables because renewables are cheaper than fossil fuels.

          • ralfyman

            See, this is what I mean: we don’t “simply” move off oil. There’s a transition period and energy trap involved in that. Renewable energy components do not appear magically in manufacturing processes that suddenly involve no fossil fuels, not just for energy but even for petrochemicals.

            The problem isn’t producing energy with solar panels, wind turbines, etc., it’s manufacturing and delivering these and more through a massive industrial system that’s heavily dependent on fossil fuel use. The transition period to remove most fossil fuel use from the system, not to mention food production, will take decades:

            http://www.businessinsider.com/131-years-to-replace-oil-2010-11

            The IEA argues that incredible levels of coordination and cooperation between economies has to take place for this to happen, not to mention oil and gas production operating at maximum depletion rates because of increasing energy and resource demand worldwide:

            http://www.iea.org/publications/freepublications/publication/name,27324,en.html

            All of these points were explained to you carefully in previous messages, and yet you cannot comprehend these realities.

            Global emissions are not going down:

            http://www.epa.gov/climatechange/ghgemissions/global.html

            EU27 the World.

            The U.S. World.

            Finally, the problem isn’t that renewables are cheaper than fossil fuels, it’s that both no longer provide energy returns that a growing global middle class needs:

            http://www.bbc.co.uk/news/business-22956470

            http://www.scientificamerican.com/article.cfm?id=eroi-charles-hall-will-fossil-fuels-maintain-economic-growth

            http://www.theoildrum.com/node/3786

            which is essentially the point that I’ve been raising all along: you need to look at the use of petrochemicals for renewable energy components, fossil fuel inputs, an energy trap and a lag time involved in a full transition, the coordination between countries required, and how much more energy and resources are needed to fulfill a middle class lifestyle, e.g., EVs for personal transport, among others, for most of the world’s population.

            Now, you already addressed a few of these points by admitting that there won’t be coordination between economies (so, no regulation), no cooperation (which means not only CO2 emissions but even pollution will increase), and no coordination (which means what would have been used for renewable energy components will instead be used for luxury items such as EVs for personal use). What now?

          • Bob_Wallace

            You’re replowing old ground Ralph.

            We have technology to drastically cut our use of fossil fuels.

            It cannot be done overnight, it will take at least two decades and likely more.

            World CO2 emission growth is slowing.

            There. Now will I need to tell you the same things again or do you think you can take them onboard and move on to things more interesting?

          • ralfyman

            The problem isn’t technology that can cut down use of fossil fuels. It’s the lag time and energy trap needed to do that, etc. Read my previous messages for details.

            World CO2 emission growth appears not to be slowing down.

            http://co2now.org/

          • Bob_Wallace

            Ralf, you seem to be unable to consider a world that would use almost no oil.

            You seem to be unable to comprehend anything that doesn’t fit your belief system.

            I can’t see any reason to continue.

            You have a nice day….

          • ralfyman

            Actually, I can, but the problem is that there’s a lag time, an energy trap, and heavy coordination involved in such a scheme. Also, why are you limiting yourself to oil? Just think of the oil, chemicals, and minerals that go to the production not only of an EV, but of a computer, various components needed for renewable energy (from copper in small fans in solar systems to concrete for hydroelectric dams), and more. Even the delivery systems which involve large cargo ships require bunker oil.

            For some reason, you are unable to comprehend any of these, as if a renewable energy world will appear miraculously, quickly, and continue the current global capitalist system.

            Good luck with that fantasy.

          • Bob_Wallace

            Oil that goes into products can already be phased out with substitutes. And oil that is embedded in products can either be recycled or sequestered in a landfill.

            We can reduce the amount of bunker fuel we use by manufacturing closer to markets. As the world’s labor costs flatten the cost of shipping will cause manufacturing to move to market areas.

            We may not be able to eliminate all liquid fuel requirements. But we can reduce them by a huge percentage.

            Of course it can’t be done overnight. No one has made that claim.

          • ralfyman

            You can phase out fossil fuel, but the transition requires decades, an energy trap, and strong coordination and cooperation between countries. You’ve acknowledged the first point, cannot disprove the second, and argued that the third cannot take place.

            The argument that it cannot be done overnight has been my point from the beginning. But that’s not the only point to consider.

          • Bob_Wallace

            It took us decades to install a lot of fossil fuel generation. We’ll likely move off FF much faster than we got on.

            Is there some rule that change has to happen overnight?

            “strong coordination and cooperation between countries” is not required. Each country will likely do its own thing. All countries will likely be motivated by the same things.

            There’s no energy trap other than the one you seem unable to think your way around.

          • ralfyman

            According to the sources I shared with you previously, it will likely take decades. Even some of the articles you use refer to full implementation by 2050.

            Strong coordination and cooperation is heavily required because many of the components used for renewable energy is shipped from country to country. The same goes the heavy industry needed for manufacturing of EVs for personal transport. Even you referred to regulation in your previous posts, and that requires government intervention.

            About the energy trap, your argument was already debunked several times via Charles Hall’s reports and other sources.

            Finally, I think you need to revise your messages carefully because they are filled with contradictions. For example, the first sentence refers to decades needed to use fossil fuels fully. The second sentence counters that by arguing that the same infrastructure will easily transition to renewable energy, but the third sentence implies it won’t happen overnight, which is my point.

            Strong coordination and cooperation won’t be needed, but if all countries are motivated by the same things, then that makes coordination and cooperation possible. But if each will “do its own thing,” then they won’t be doing “the same things.”

          • Bob_Wallace

            Yes, Ralf. We will not transition to renewable energy overnight.

            Yes, Ralf. If countries cease trading with each other then it will be difficult.

            Yes, Ralf. We will use some petroleum and even some coal while we build a renewable grid.

            Yes, Ralf. If all countries worked together it would be easier to get the job done sooner.

            Now, Ralf. No one has claimed anything different.

          • Bob_Wallace

            Now, Ralf, the “energy trap” that seems to so concern you…

            Here’s how Tom Murphy describes it…

            “In brief, the idea is that once we enter a decline phase in fossil fuel availability—first in petroleum—our growth-based economic system will struggle to cope with a contraction of its very lifeblood. Fuel prices will skyrocket, some individuals and exporting nations will react by hoarding, and energy scarcity will quickly become the new norm. The invisible hand of the market will slap us silly demanding a new energy infrastructure based on non-fossil solutions. But here’s the rub. The construction of that shiny new infrastructure requires not just money, but…energy. And that’s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term—effectively steepening the decline—for a long-term energy plan? It’s a trap!”

            http://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/#sthash.daQ9Ac6B.dpuf

            Here’s where Tom (once again) falls on his butt.

            We are now creating more energy with installed wind and solar than we are using to manufacture turbines and solar panels. We have already bootstrapped our way into sustainability using fossil fuels and we no longer need their energy input in order to keep increasing production.

            Yes, we do use some oil when it is a more convenient form of energy. For transporting hardware, for example. But the wind/solar we aren’t using for transporting wind/solar hardware is going elsewhere and displacing fossil fuel.

            Now, are we in danger of running out of oil, coal or natural gas in the next 20, 30, 50 years? Almost certainly not. We might get a bit tight on NG.

            But as each year goes by we will install more renewable capacity and cut our use of fossil fuel.

            I think you understand what that means, Ralf. If we cut our use of fossil fuels we extend the time at which we actually run out. Using half as much makes them last twice as long.

            Tom and others are arguing that ramping up our building of renewables will cause a risk of running short of energy. Just the opposite happens. If we ramp up building renewables and bring them on line at a faster rate we add capacity that will be permanent. It will create the energy that will create its own replacement. Fossil fuels drop away with the first generation.
            In fact, long before the first generation is in place.

            Ralf, the energy payback time for a wind turbine is 3 to 9 months.

            Can you not see if a wind turbine pays all its energy back in about 6 months that during the second half of the year it can give us the energy to build another wind turbine?

            And then it goes on to replace the fossil fuel energy that went into making it for another 30 – 40 years. Avoiding 60x to 80x as much fossil fuel as went into it.

            The second turbine and all subsequent turbines have zero fossil fuel input.

          • Bob_Wallace

            Let’s approach this energy trap a different way.

            Let’s say in 2014 we build and install a wind turbine.

            In its first six months (on average) it will generate as much energy as it took to manufacture it. We’ll use that energy to build a second turbine.

            During the first half of 2015 the energy from those two turbines will build two more turbines and the second half of 2015 the energy from those four turbines will build four more turbines.

            During the first half of 2016 the energy from those eight turbines will build eight more turbines and the second half of 2015 the energy from those sixteen turbines will build sixteen more turbines.

            During the first half of 2017 the energy from those thirty two turbines will build thirty two more turbines and the second half of 2015 the energy from those sixty four turbines will build sixty four more turbines.

            January 1, 2014 no turbines.
            January 1, 2015 2 turbines.
            January 1, 2016 8 turbines.
            January 1, 2017 32 turbines.
            January 1, 2018 128 turbines.
            January 1, 2019 512 turbines.

            January 1, 2020 2,048 turbines.
            January 1, 2021 8,192 turbines.
            January 1, 2022 32,786 turbines.
            January 1, 2023 131,144 turbines.

            Ten years, 131,144 turbines. Total fossil fuel input = 1 turbine worth.

          • Bob_Wallace

            Now, let me add one more bit.

            Murphy specializes in setting up flawed arguments in order to demonstrate why renewable energy will never work. His solution? Nuclear energy.

            He says that renewables won’t work because they have too low an EROEI. Obviously that would be a problem if the EI was a finite and disappearing supply, but we know that not to be the case.

            But what if one could not build renewable or nuclear capacity without fossil fuels? Why don’t we look at payback time and see which is the best way to spend our precious and disappearing fossil fuels?

            Solar panels with a 0.5 to 1.8 year payback?
            Wind turbines with a 0.25 to 0.75 year payback?
            Nuclear with a 6.5 to 14 year payback?

            Using the sort end of each range solar gives a 13x better and wind gives a 26x better EROEI.

            Using the long end of each solar gives an 8x better and wind gives a 19x better EROEI.

            Some danged big multipliers there.

          • ralfyman

            It’s not just a matter of a lengthy transition but a drop in conventional oil production during the process. Couple that with growing energy and resource demand from a growing global middle class.

            It’s not a matter of countries ceasing trade that will make things difficult but the opposite.

            It’s not just some petroleum or coal that will be needed, but some of it together with manufacture of other goods.

            Coordination and cooperation will be critical, but you acknowledged earlier that that won’t take place.

          • Bob_Wallace

            Well, Ralf, you’ve made your predictions.

            We’ll have to wait to see if you were right. I suspect you won’t fare very well as you seem to not understand some of the basics. But, we’ll see….

          • ralfyman

            You’re contradicting yourself. First, you confirmed all of my arguments in your previous message, and now you’re implying the opposite.

            Also, about predictions, the sources you refer to state that renewable energy will be fully implemented for the global economy in several decades. This supports my arguments.

          • Bob_Wallace

            OK, Ralf.

            Very clearly list the ways in which I am contradicting myself.

            Clearly there is nothing in my last two comments which stands in opposition with what I’ve posted earlier.

          • ralfyman

            In your earlier message, you acknowledged four things that I argued: that the transition will not take place quickly, that countries will not cooperate with each other, etc.

            In your next message, you argued that I do not understand the basics, but prior to that you just acknowledged my whole argument.

            Finally, I never contradicted your argument that technology is available. What I’ve been referring to is implementation.

          • A Real Libertarian

            No Ralf.

            Those four things are true.

            But it doesn’t matter.

            They won’t stop renewables, they’ll just slow them down.

          • ralfyman

            That’s my point.

          • A Real Libertarian

            What is your point?

            What are you claiming?

          • ralfyman

            The four points I gave explain why full implementation of renewable energy for the global economy will be slow.

            Finally, I raised additional points: the amount of energy and resources that will be needed by a growing global middle class, the rate of increase in energy demand needed by the global economy during the next three decades, and the effect of lower oil production, if not availability of various resources, during the transition phase.

            If you need more details, try the IEA Outlook 2010 report. From what I remember, the report concludes that during the next two decades we will need oil and gas production at maximum depletion rates, major cooperation and coordination between countries, and energy production equivalent to putting one Saudi Arabia online every seven years.

          • A Real Libertarian

            See, what you’re doing is repeating well know minor problems with implementing renewable energy and then blathering on about needing massive increases in oil production.

            Basically it’s “2+2=4, 5+5=10, therefore algebra is a lie!”.

            There’s no logical connection between them.

          • ralfyman

            Those aren’t minor problems. Read the links I provided for details.

          • ralfyman

            Actually, I referred to major problems.

          • ralfyman

            Read my previous message.

          • Bob_Wallace

            No, Ralf.

            That wasn’t your point. You’re tap dancing. You showed up here with some poor quality analysis.

          • ralfyman

            No, that was my argument, and you acknowledged it by agreeing with my four main points. You even added that no one has claimed otherwise.

            That contradicts the claim that I am “tap dancing” or that I did “poor quality analysis.”

          • Bob_Wallace

            Ralf, believe whatever you wish.

            I read what you wrote.

            Now, I’m done with you. Have a nice day.

          • ralfyman

            Try not to read what I wrote. Rather, read what I referred to, including the IEA Outlook 2010 report, reports from Charles Hall, and others.

          • Bob_Wallace

            OK, so you were able to find no places where I contridicted myself.

            Thanks, I couldn’t think of any myself.

            Now, were you 100% wrong from the get-go? No. You were right in saying that we wouldn’t transition off fossil fuels overnight (however you worded that).

            You were wrong about peak oil, the “energy trap”, and the need for high levels of cooperation between countries.

          • ralfyman

            I did, and explained it in my previous message. You confirmed the four points of my arguments and even added that no one else is disagreeing with me. But after that, you argued that I don’t know the basics, which contradicts the fact that you agree with me.

            Now, you’re contradicting yourself again my agreeing that the transition will not take place overnight, which is essentially the basics of this issue.

            I was never wrong about peak oil. I gave you the evidence and you did not respond since.

            You are wrong about the absence of an energy trap as well, as that’s part of the reason why a transition cannot take place overnight.

            The same goes for your last point, as the lack of cooperation (which you acknowledged) is another reason why the transition cannot take place overnight.

            You are now contradicting yourself multiple times in each post, saying one thing, then the opposite, then back to your first point.

          • A Real Libertarian

            This why you are wrong.

            1. There is no peak oil in production, there’s peak oil in cost effective production.

            There’s trillions of barrels of unconventional oil worldwide. The problem is it would require $600/barrel oil before it’s profitable, at which price you can say bye-bye to the economy

            2. We don’t need oil to make electric cars. Or much of anything outside of fuel for a few niche vehicles. So no energy trap.

            You apparently believe having 99% of car miles run on electricity won’t lower oil consumption at all.

            Needless to say, that’s stupid.

            3. If by “Coordination and cooperation” you mean massive worldwide coordination and planing, nope, not needed.

            If on the other hand “Coordination and cooperation” means countries trading with each other, then how is that supposed to be stopped? Seriously, how?

            4. We don’t need to be off fossil fuels 100% completely in a year, or five, or ten. We just need to make a dent.

            No one ever won a war by saying “buying time and imperfect solutions are pointless”, people win wars by buying time until enough resources and solutions have been put into action to defeat the enemy.

            If your demands are “silver bullet or nothing”, you’re going to get nothing, because silver bullets only exist in the minds of those who don’t solve problems.

            You need to comprehend this if you want to be taken seriously.

          • ralfyman

            1. That’s the same thing. In fact, that’s one of the main points of my argument. See references to EROEI and others for details.

            2. You need oil to make electric cars, and not just electric cars but much of manufacturing, delivery systems, and even food production. And it’s not just oil but also fresh water. Sources are given in my previous messages.

            Theoretically, it’s possible to move away completely from fossil fuels, but the transition period will take decades, full coordination and cooperation between economies, and max. depletion rates for oil and gas. If you want more details, read the IEA Outlook 2010 report. Also, see the report referred to in the Business Insider article.

            Also, it’s absurd to argue that cars running on electricity will lower oil consumption as there is a growing global middle class, which means one should expect oil, gas, and coal consumption not to drop but to rise, together with demand for fresh water, various minerals needed for alternative energy sources, and more. For more details, see IEA charts for global oil consumption, etc.

            3. That cooperation will be very critical for obvious reasons. See the IEA Outlook 2010 report for details.

            In fact, what we are seeing now are results of that lack of cooperation: conventional oil production in plateau, oil production for the six major players dropping, renewable energy efforts not being pushed significantly, oil, gas, and coal consumption rising worldwide, military forces and governments acting in a more belligerent manner towards control of various resources, from oil in Iraq to minerals in Afghanistan, the financial elite speculating on more than a quadrillion dollars (notional value) of unregulated derivatives, etc.


            4. This looks like an example of hedging, i.e., the transition can take place easily and quickly, but in case that can’t take place, then we don’t have to do things easily and quickly.

            The second point is precisely mine. The only way to “win wars” is to understand how oil and other resources are used, the rising demand for them globally, etc.

            My demands are not “silver bullet or nothing” but “understanding that there’s no silver bullet” for this issue. Your next point makes no sense at all as it implies that all solutions are silver bullets.

            If you want to be taken seriously concerning this topic, you need to understand these points very well: EV cars and many components needed for renewable energy do not appear miraculously and without the use of fossil fuels. They are not made with infinite resources and energy, and energy returns (which is ironically for you your first point) have to be considered, together with global demand.

          • A Real Libertarian

            “1. That’s the same thing. In fact, that’s one of the main points of my argument. See references to EROEI and others for details.”

            No. It. Isn’t.

            Money is not energy. It can buy energy, but it isn’t the same thing.

            “2. You need oil to make electric cars, and not just electric cars but much of manufacturing, delivery systems, and even food production. And it’s not just oil but also fresh water. Sources are given in my previous messages.”

            No. No. No. Yes to powering some of the machinery, otherwise… No.

            “Theoretically, it’s possible to move away completely from fossil fuels, but the transition period will take decades, full coordination and cooperation between economies, and max. depletion rates for oil and gas. If you want more details, read the IEA Outlook 2010 report. Also, see the report referred to in the Business Insider article.”

            I did. It said 50% of Americas energy-intensive industry is dependent on coal and oil at the present time.

            “Also, it’s absurd to argue that cars running on electricity will lower oil consumption as there is a growing global middle class, which means one should expect oil, gas, and coal consumption not to drop but to rise, together with demand for fresh water, various minerals needed for alternative energy sources, and more. For more details, see IEA charts for global oil consumption, etc.”

            No, what’s absurd is you’ve been shown that’s bullshit, yet you persist in repeating “there is a growing global middle class” as if it’s a magic incantation that can make all evidence against you disappear.

            “3. That cooperation will be very critical for obvious reasons. See the IEA Outlook 2010 report for details.”

            “obvious reasons” being deniers are incapable of acknowledging their errors.

            P.S. I can has page number please?

            “In fact, what we are seeing now are results of that lack of cooperation: conventional oil production in plateau, oil production for the six major players dropping, renewable energy efforts not being pushed significantly, oil, gas, and coal consumption rising worldwide, military forces and governments acting in a more belligerent manner towards
            control of various resources, from oil in Iraq to minerals in
            Afghanistan, the financial elite speculating on more than a quadrillion dollars (notional value) of unregulated derivatives, etc.”

            So it’s hopeless and we should give up? No. Your FUD doesn’t fool us.

            “4. This looks like an example of hedging, i.e., the transition can take place easily and quickly, but in case that can’t take place, then we don’t have to do things easily and quickly.”

            Somebody doesn’t understand math. Or how if you need the work done faster, you work harder.

            “The second point is precisely mine. The only way to “win wars” is to understand how oil and other resources are used, the rising demand for them globally, etc.”

            No it isn’t. If it was, you’d start working at understanding rather then repeating Thought terminating clichés.

            “My demands are not “silver bullet or nothing” but “understanding that there’s no silver bullet” for this issue. Your next point makes no sense at all as it implies that all solutions are silver bullets.”

            You refuse to support renewables because they’re not perfect.

            “If you want to be taken seriously concerning this topic, you need to understand these points very well: EV cars and many components needed for renewable energy do not appear miraculously and without the use of fossil fuels.”

            Yes they do.

            Oh, you disagree? Then evidence please.

            P.S. If electric cars cost oil to make, how much? Is it less or more then they save? If less, how much do they save?

            “They are not made with infinite resources and energy, and energy returns (which is ironically for you your first point) have to be considered, together with global demand.”

            And you don’t, you just assume it’s impossible and tell everyone to give up.

          • ralfyman

            1. The fact that money is not energy is my point. Your argument implies that with more money you can produce more oil. That is completely wrong and goes against the physical reality of peak oil.

            The cost in peak oil is energy return, not oil price. You can drive up the price of oil as high as you want, but that won’t lower the energy cost of extracting oil that is too deep or that requires more processing.

            2. Your argument is wrong. Manufacturing is energy-intensive. Are you implying that EV cars aren’t manufactured?

            The global middle class is growing:

            http://www.bbc.co.uk/news/business-22956470

            leading to increasing consumption of oil, gas, and coal worldwide. As explained earlier, the energy increase demand is around 2 pct a year, which has been the case the past three decades:

            http://www.worldenergyoutlook.org/publications/weo-2010/

            which means the world will need the equivalent of one Saudi Arabia every seven years just to maintain economic growth:



            Evidence against me? I’ve not seen evidence raised against my views, except for news of developments in renewable energy.

            3. Pp. 46 onward.

            Also, I didn’t argue that we should give up. And since you did not deny what I wrote, then how can I be accused of fooling others?

            4. Math? Your point has nothing to do with math. It’s common sense: either you think the transition will take place quickly, or it won’t. You can’t play both sides by arguing that it will, but that in case it won’t, then we should not worry because the problem is non-existent.

            No, the second point is mine. In order to use resources properly, we have to understand the reality of energy traps, energy returns, etc. Otherwise, we will argue that we can use resources in any way we want and a renewable energy world economy will miraculously appear.

            I didn’t argue that we should not use renewable energy because it is not “perfect” or that I don’t support it. Where did you get this idea?

            My argument is that renewable energy is not a silver bullet. In fact, there are no silver bullets for this issue.

            Wait, you actually believe that EV cars appear miraculously? Would you like to explain that?

            About the energy and resource cost of manufacturing EV cars and every consumer good that’s part of a renewable energy future with “business as usual,” surely you can help yourself by conducting research, such as consulting reports and articles by Ted Trainer:

            http://www.countercurrents.org/trainer240411.htm

            Charles Hall on required energy returns (mentioned earlier), the CO2 emission cost of manufacturing electric car batteries:

            http://www.deathbycar.info/2011/06/ev-batteries-co2/

            fossil fuel backups as one of the hidden costs of renewable energy:

            http://articles.latimes.com/2012/dec/09/local/la-me-unreliable-power-20121210

            and more.

            In short, consider the expected resource and energy demand in the long term, the amount of fossil fuels and other resources (such as minerals and fresh water) needed to extract, process, manufacture, and deliver components and consumer goods needed to desired economic growth and a particular middle class lifestyle (such as personal transport by EV cars for almost everyone worldwide).

            Now, I’ve given enough evidence in almost all of my posts, I leave it to you to study the matter carefully.

            Finally, I didn’t argue that it is impossible to replace fossil fuels with renewable energy. Please read all of my posts very carefully. I argued that it will take decades. Unfortunately, that’s also the problem:

            http://www.businessinsider.com/131-years-to-replace-oil-2010-11

            That is why renewable energy is not a silver bullet.

          • A Real Libertarian

            1. If it’s from before January 1st 2012. I won’t read it, because it’s outdated.

            That’s how science works, discarding falsified studies.

            2. What is “quickly”?

            If you’re going to argue “It’s common sense: either you think the transition will take place quickly, or it won’t.” You need to explain what timeframe “quickly” means.

            How many years from January 1st, 2014 is “quickly” defined as by you?

            3. “You can’t play both sides by arguing that it will, but that in case it won’t, then we should not worry because the problem is non-existent.”

            Yes you fucking can.

            “If the Manhattan Project pays off, then Japan surrenders immediately. If it fails, Operation Downfall goes into effect. Either way, the Axis will lose the war.”

            See how that works? You can’t argue with that logic, because it’s valid.

            That’s how problem-solvers work in real life, we have backup plans.

            4. You need to understand: Oil =/= Energy. We don’t need massive oil production because oil isn’t a magic salve that the world requires.

            Manufacturing uses very little oil outside of chemicals and oil production.

            5. Coal is dead. Any manufacturing Co2 “estimate” that assumes large amounts of coal is wrong.

            6. Renewable energy doesn’t require any appreciable amounts of fossil fuel backup. Those claims are propaganda.

            If you actually have a solution besides repeating long-debunked talking points. I’d like to hear it.

            With your answers to the rest of course.

          • ralfyman

            1. How’s that? Did massive changes in manufacturing start before 1 Jan 2012? Did physical realities concerning oil suddenly change then? Did EROEI for renewable energy soar? Please give links to explain the date.

            2. That question was answered in my previous message. Read the study referred to in the Business Insider article and IEA Outlook 2010 for details.

            3. The analogy is wrong because you didn’t give an alternative to the problem of a slow transition.

            4. That makes absolutely no sense at all. Energy and petrochemicals are derived from oil. In fact, the very computer that you are now using was manufactured and delivered using oil and many other resources.

            http://peakoilmatters.com/2010/07/01/peak-oil-impact-5-laptopscomputers/

            http://www.spe.org/twa/print/archives/2013/2013v9n2/06_Forum_FINAL.pdf

            5. Coal is dead? Not even close.

            http://www.eia.gov/todayinenergy/detail.cfm?id=4390

            The same goes for many other resources.

            6. It does. Three sources referring to studies have already been presented to you.

            For solutions, I don’t see any. As revealed in the IEA report, at best we will be able to meet only basic needs using renewable energy and fossil fuels. To meet continuous economic growth equivalent to a 2-pct increase in energy demand per annum, I don’t think that is possible.

          • A Real Libertarian

            “1. How’s that? Did massive changes in manufacturing start before 1 Jan 2012? Did physical realities concerning oil suddenly change then? Did EROEI for renewable energy soar? Please give links to explain the date.”

            Price came down a lot in 2011-12. That you don’t know shows you’re concern trolling.

            P.S. EROEI is irrelevant, it’s much better then fossil fuels.

            “2. That question was answered in my previous message. Read the study referred to in the Business Insider article and IEA Outlook 2010 for details.”

            Refusing to define your terms? You’ve proven it’s just a rhetorical sleight of hand to libel renewables.

            “3. The analogy is wrong because you didn’t give an alternative to the problem of a slow transition.”

            Work harder. Take longer. Still solves problem.

            “4. That makes absolutely no sense at all. Energy and petrochemicals are derived from oil. In fact, the very computer that you are now using was manufactured and delivered using oil and many other resources.”

            Fallacy of composition. Energy is derived from oil =/= All energy is derived from oil.

            You are wrong.

            “5. Coal is dead? Not even close.”

            Pay attention to what’s happening now, not what happened decades ago. Coal is a dead man walking.

            “6. It does. Three sources referring to studies have already been presented to you.”

            Liar.

            “For solutions, I don’t see any.”

            Then GTFO of the way and let people with a clue of what’s going on fix it.

          • ralfyman

            1. Oil prices did not go down. It’s currently at around $100, with conventional oil production peaking at 75 Mb/d. Before 2005, it was predicted that the price would plummet to less than $30 and that production would soar to 100 Mb/d by 2010.

            Thus, oil prices tripled since 2005.

            BTW, you do realize that your argument works against you? If oil prices go down, then that makes renewable energy less attractive.

            About your PS, it doesn’t make sense because the two clauses contradict each other. That is, EROEI is irrelevant, but the EROEI for renewable energy is better than fossil fuels, which makes EROEI relevant.

            Finally, the issue isn’t which EROEI is better. Rather, it’s the EROEI needed to maintain the current global economy. Read previous posts, including reports by Hall, for details.

            2. No, I didn’t refuse to define terms. Rather, I defined them using the two reports given earlier. To recap:

            http://www.businessinsider.com/131-years-to-replace-oil-2010-11

            Renewable energy to replace fossil fuels in 2040, with full use of renewable energy by 2140.

            In addition, see

            http://www.sustainablebusiness.com/index.cfm/go/news.display/id/17018

            http://eiumedia.com/index.php/latest-press-releases/item/357-renewable-energy-decades-away-from-replacing-fossil-fuels-according-to-new-report

            http://wwf.panda.org/what_we_do/footprint/climate_carbon_energy/energy_solutions22/renewable_energy/sustainable_energy_report/

            The argument is that fossil fuels will remain the primary source of energy even after 2030, with renewable energy dominating only between 2040-2090. But total oil and gas production may drop before 2030.

            In addition, global population might reach 9 billion, with more damage to the environment and long-term effects of global warming.

            Some argue that the transition has to start quickly due to climate change:

            http://www.theguardian.com/environment/2011/nov/09/fossil-fuel-infrastructure-climate-change

            and because of peak oil should have started at least a decade ago:



            3. Only if we can assume that we will “work harder.” Do you have any reports that reveal that?

            4. I did not argue that all energy is derived from oil.

            5. Decades ago? What I presented refers to current and past coal consumption. As for the future, try

            http://in.reuters.com/article/2013/10/14/coal-demand-idINDEE99D03720131014

            6. The three sources referring to studies:

            http://www.theguardian.com/environment/blog/2012/oct/05/electric-cars-emissions-bad-environment

            http://www.bbc.co.uk/news/business-19830232

            http://articles.latimes.com/2012/dec/09/local/la-me-unreliable-power-20121210

            Finally, if you are looking for those who know what’s going on, then consider in addition to what has been presented the IEA Outlook 2010 report concerning oil, renewable energy, and climate change:

            http://www.worldenergyoutlook.org/publications/weo-2010/

            The Energy Watch Group and others concerning peak oil:

            http://www.energywatchgroup.org/Mitteilungen.26+M5d637b1e38d.0.html

            the IPCC report on renewable energy:

            http://srren.ipcc-wg3.de/report

            and more.

          • A Real Libertarian

            “BTW, you do realize that your argument works against you? If oil prices go down, then that makes renewable energy less attractive.”

            Renewables came down in price, renewables came down in price.

            The fact you can’t grasp that shows you are too stupid to have this conversation.

            P.S. No fossil fuels by 2040 is entirely likely.

          • Guest

            Renewable energy became more attractive because EROI for oil dropped to the same level as those of the former:

            http://www.theoildrum.com/node/3786

            The reason for the drop is peak oil.

            The sources do not refer to fossil fuels no longer available by 2040 but no economically accessible fossil fuels by that time.

          • A Real Libertarian

            So, if we’re entirely off fossil fuels by 2040 and everything is run off of superior renewables, what is the problem?

          • ralfyman

            Oil price went up because the energy return for oil dropped to the same level as various sources of renewable energy:

            http://www.theoildrum.com/node/3786

            See also

            https://en.wikipedia.org/wiki/Energy_returned_on_energy_invested

            The drop in energy return is the reason for a tripling of oil prices.

            If, following your argument, oil prices drop to less than $30 a barrel or even more, then that will mean the energy return for oil has gone up considerably, higher than that of renewable energy.

          • A Real Libertarian

            Oil price is never coming down, so irrelevant.

            Oil is not necessary, energy is.

          • Guest

            It’s good to see you agree with me.

          • ralfyman

            It just went down.

          • ralfyman

            You need oil even for components for renewable energy. On top of that, energy returns for renewables are low.

          • Bob_Wallace

            Just because we use oil in the manufacturing and installation of wind and solar does not mean that we must have oil.

            We can mine and transport with electricity. We already process ores and manufacture mostly with electricity.

          • ralfyman

            1. The price went down because of a glut in production. Energy returns are still low.
            .
            2. Explain how the article and the report are wrong.
            .
            3. No, it doesn’t, because the solution has to involve maintaining economic growth.
            .
            4. Petrochemicals.
            .
            5. Global coal consumption is rising.
            .
            6. Three sources were presented to you.
            .

          • ralfyman

            I’m sharing these in a separate post in light of the question of the resource, energy, and environmental impact of electric cars:

            “Are electric cars bad for the environment?”

            http://www.theguardian.com/environment/blog/2012/oct/05/electric-cars-emissions-bad-environment

            “Electric cars ‘pose environmental threat'”

            http://www.bbc.co.uk/news/business-19830232

            They refer to studies which readers may consult, and both articles also have many comments.

            Does this mean that I think it’s impossible to use renewable energy? No. That I want renewable energy that is perfect? No. That I prefer fossil fuel-powered vehicles? No. That we should give up? No.

            The point is that renewable energy systems plus the infrastructure and the consumer goods that will be used with them require combinations of fossil fuels, minerals, even fresh water, and petrochemicals (for the plastics, etc.) throughout the process.

            There may be differences from region to region, but since we’re talking about a global economy, where even several components will involve minerals that have to be extracted in one country, processed in another, then shipped to a third country for processing and manufacturing, then shipped to the end user via large cargo ships running on bunker oil, then we should look at the situation as whole.

            Coordination and cooperation will also be needed, because if some countries decide to export less oil, then the delivery cost of some raw materials or components may go up. It can get worse if a country attacks another over oil, uranium, or rare-earth minerals, leading to disruption of the economy and supply chains. Thus, the claim that cooperation and coordination aren’t necessary is highly questionable, as industrialized economies are currently coupled to each other.

            Unfortunately, as already acknowledged earlier, there is little good news in terms of cooperation, and if any, we may expect more disruption as resource wars coupled with the debt crisis and lack of conventional oil set it. Add to that increasing number of people worldwide now needing the middle class and demanding better food, advanced health care, electricity, fresh water, consumer goods, etc., then we see multiple factors affecting a very complex global system:

            http://www.feasta.org/2011/10/08/on-the-cusp-of-collapse-complexity-energy-and-the-globalised-economy/

            It is the idea of this highly complex and vulnerable system which serves as the source of my first remark on considering the use of petrochemicals and many other resources in the manufacture of components needed for renewable energy.

          • A Real Libertarian

            “Are electric cars bad for the environment?”

            No.

            Any “study” that assumes a 100% coal grid is conducted by ignoramuses, morons, or frauds.

            “Coordination and cooperation will also be needed”

            What is “Coordination and cooperation”?

            A central worldwide planing office?

            An international clearinghouse for renewable energy products?

            Countries continuing to trade with each other?

            What do you define “Coordination and cooperation” as?

            “then we see multiple factors affecting a very complex global system”

            So? Complexity doesn’t mean you can give up trying to understand it and still be taken seriously by people who put in the time and effort when you make grand pronouncements with no depth or comprehension.

            Do you really expect your mechanic to listen when you say “the engine is very complex so you can’t pretend that pushing in the spark plugs will fit it”?

          • ralfyman

            Either study does not assume a 100-pct coal grid. And you missed other components discussed, such as manufacturing and the environment.

            About cooperation, please read the IEA Outlook 2010 report. See also references mentioned here:

            https://en.wikipedia.org/wiki/Renewable_energy_commercialization

            I am not referring to giving up. Rather, I am arguing that the silver bullet you envision is questionable.

            Also, I am not making “grand pronouncements.” Rather, my arguments are based on studies and reports, all of which have been presented to you. What have you shown in return?

            The last point is incorrect. It should be, “Don’t assume that the spark plugs are the only things needed to make the engine work.”

          • ralfyman

            Study the mining, manufacturing, and maintenance process for EVs.
            .
            Read the IEA report mentioned earlier.
            .
            You are free to try, but you still have not countered any of my arguments.
            .
            Your last statement proves my point: don’t bother finding out what type of spark plugs are needed. Just buy several and see which fits.

          • ralfyman

            1. Industries may face higher debt due to rising capital expenditures, and that’s connected to low energy returns.
            .
            2. “Some” is a lot. You even need oil for petrochemicals.
            .
            There is actually a growing global middle class. That’s why oil consumption is rising for the rest of the world.
            .
            3. Read the executive summary of the report.
            .
            4. It’s the other way round: one hedges when he doesn’t know his math.
            .
            I never argued that I don’t support renewables.

          • Bob_Wallace

            You simply wish to lecture, eh?

          • ralfyman

            All I am doing is providing you with more information on the matter.

            To recap, I do not disagree with the need to use renewable energy. In fact, I am counting on it due to peak oil.

            However, I do not think the transition will take place easily. My reasons are:

            1. fossil fuels still needed for various components of renewable energy, and dealing with that coupled with the threat of a decline in fossil fuel production and an increase in energy demand due to a growing global middle class;

            2. lower energy returns not just for renewable energy but also for oil in contrast to high energy returns that we need for a middle class lifestyle, including using EVs for personal transport

            3. a lag time for full implementation that will take decades versus oil supply issues that will take place soon;

            4. possible shortages for other materials needed for renewable energy (explained previously); and

            5. lack of cooperation and coordination between countries needed for strong regulation, etc.

            Given these, renewable energy will be mostly used to meet basic needs. Whether or not that will be enough should be studied, but I do not think it will meet wants such as EVs for personal transport.

          • Bob_Wallace

            Let me start by stating that I think we are short years away from an affordable EV that can be driven long distance, all day, with no more than two modest (~20 minute) stops for recharging.

            There is no reason I can determine that the cost of these vehicles won’t drop to that of current vehicles or even lower. The simplicity of manufacturing hundreds of battery cells vs. the hundreds of parts of an ICE should lead to EVs being cheaper to purchase once economies of scale kick in. Cost of driving EVs is well less than 50% as much per mile.

            As range increases and prices drop people will switch to EVs (and PHEVs) and our oil use will plummet. I am not worried about a shortage of oil. The world has plenty oil. It’s just that we’ve run out of cheap oil and that will drive use down.

            Now, let’s separate the current use of petroleum with renewables from the absolute need for petroleum (oil) with renewables. Where is oil absolutely needed for renewable energy? I can’t think of anything in the manufacturing and installation of solar panels and wind turbines that absolutely requires oil. Yes, we use oil but if the price rose to $500 per barrel we could, with some effort, switch to other energy source.

            By lower energy returns I assume you are talking about “energy density”? That’s not an important metric. The important metrics are 1) cost of usable energy, 2) time of delivery, and 3) long term sustainability.

            Shortages for renewable energy? Don’t know of any. We’re already building EVs and wind turbines without rare earth minerals. And progress is being made in the lab with ‘artificial’ super magnets. We’ve got a number of ways to manufacture solar panels, we aren’t dependent on any single limited occurrence mineral.

            Most countries understand very well that we have to deal with climate change. The US trails many countries, many are much more oriented on the problem than we are. We are very unlikely to see any sort of “one world government law” solution. What will happen, is happening, is that most countries will find their own route and later on those countries that are lagging will feel pressure from other countries.

            Energy for EVs is amazingly easy. First, onshore and offshore the wind blows at night when other demands for electricity are low.

            EVs spend a lot of time parked at night.

            Wind farms currently have a depressed market for their late night wind. Charging EVs at night will be a new market for wind farms. Their profits will increase, and more investment money will flow into wind farms. More wind farms will be built and that will mean more wind available during the day which will bring down the cost of our electricity.

            EVs are perfect dispatchable loads for utilities. They spend 90% of their time parked and need, on average, about 1.5 hours per day of charging (on a 240vac outlet). With 200 mile range EVs many drivers will be able to skip one or more charging days which will allow utilities to cut demand on low wind nights/cloudy days and give them a place to dump supply spikes.

  • technotard

    There is no question that
    zero cost solar is feasible. The same applies to significant reduction in the
    energy needs of structures. Because of pressure from a DOE director, we have
    developed a BIPV system that will cost the same as a new conventional non-solar
    residential roof and half that of a large structure roof BEFORE tax
    credits/incentives/rebates. Upon seeing a mock-up of the system, 4 NREL
    technicians projected it will increase the output per cell/array on average
    about 25+ times. They also projected that the typical residence will be able to
    produce 4 to 10 times the electricity they need and thus able to serve their
    neighbors. Plus, a study by Oregon DOE showed that a home without PV but built
    with one of our transformational methods of construction will need but 24% of
    the energy that the same plan built to the Model Energy Code will consume. Compare
    that with the energy gobbling way most of our structures are built today. Thanks
    to being guests of DOE’s ARPA-e, we are working to create an inexpensive
    non-battery method to store all the excess electricity and bring it back
    24/7/365 as you need it. Imagine this in a car that you and a companion could
    drive clear across the country and back and the only stop for fuel you would need
    would be fuel to feed the two of you. You can learn more at http://www.enlighten.us.

    At utility conventions here
    in America and away from the public eye, there have been discussions as to the
    future based on large subdivisions providing their excess and the utilities
    serving as the distributors such as is being discussed in Germany.

    technotard

    • http://zacharyshahan.com/ Zachary Shahan

      Please keep me up to date on any big news you all have.

    • Wayne Williamson

      Sorry, technotard. There is no way physically possible to get 25 times from a solar panel. The median panel is around 15 to 20 percent efficient. The best possible you could do in a perfect universe is a 5x increase….

  • Marion Meads

    i don’t think energy business redesigning is needed until we have saturated everyone’s energy needs from wind and solar, and that is still a long way off. We just zeroed out one tiny component, which is the cost of fuel to generate electricity. We still have to pay for the capital recovery in terms of amortization, we have to pay operational costs to maintain the panels and other equipments, we still have to pay the property taxes that the panels sit on, plus the infinitely plenty more creative taxes that the politicians will come up with and impose on future energy output from the renewables. The cost of fuel to generate electricity would be literally no longer a factor, but the electric energy output will never become zero.

    • Bob_Wallace

      The utility business model is failing. We saw five nuclear reactors closed/scheduled to close in 2013 because the wholesale cost of electricity is now below their operating costs.

      The midday demand peak has disappeared in Germany. That will be happening in the US as well as we add more solar. The standard operating model has been sell for just enough to stay in business during off-peak and make profits during peak demand hours.

      • Marion Meads

        What prevented the utilities from spearheading the installation of all the solar PV that will supply the peak demand? They could have continued the fleecing and business as usual had they owned these panels. Was it missed business opportunity because of know-it-all pride, or afraid to change what currently works, or the philosophy that they are required to destroy the environment to make a profit, or simply because they are morons?

        • A Real Libertarian

          Capitalism and Paradigm-breaking are mortal enemies.

          • Bob_Wallace

            Not at all. New industry will shove aside old industry if there’s money to be made.

            The typewriter companies went under when computers showed up.

          • A Real Libertarian

            But that upheaval results in fortunes being lost as the as the industry the wealth is based on disappears.

          • Bob_Wallace

            Happens all the time.

            Metal points destroyed the flint knapping business.

            The sail making industry was destroyed by steam power.

            The Pony Express was destroyed by the telegraph. Which was destroyed by the telephone. Which has been largely destroyed by cell phones.

            Cars and airplanes largely wiped out passenger trains which had wiped out the stagecoach business.

            Some people fight the change and lose their wealth. Some figure out how to adapt and stay wealthy.

          • A Real Libertarian

            Wouldn’t it be easier to sabotage and stop advancement?

          • Bob_Wallace

            That’s what the Koch brothers have been attempting to do.

            We’ve seen legislation at the state level designed to stop/slow renewables.
            Of course people who are in the position to be harmed by a technological shift are likely to fight it. We’re seeing that right now in Europe and Australia.

          • A Real Libertarian

            That’s what any good capitalist would do.

            Do anything to keep their filthy lucre.

          • Bob_Wallace

            I have no problem with capitalism as long as it is adequately regulated.
            Capitalism gives us problems when it is under regulated and the selfish/greedy among us try to grab too large a share.

        • Bob_Wallace

          How should one respond to that?

          We have a declining demand for electricity. Why should one expect utilities to install solar, at their expense, and strand assets they have already paid for?

          Businesses are in the business of making money.

          • Marion Meads

            They should have at least done the accounting and have done similar models such as that of SolarCity, that way, they won’t strand some of their assets, as the customers still has to buy the electricity from their solar installed on customer’s roof. If SolarCity makes a killing, why won’t they? After a few examples of SolarCity and several projections, I wasn’t surprised that they did not take on it as quick as reality sets in. Now they are in danger of truly being stranded.

            As to wholesale solar farms, there are independent companies right now that can sell wholesale prices of electricity from solar, that is now at parity with natural gas power plants.

        • Matt

          This is in fact why the PV support in US was as tax credits, and not as FITs. It is tilled toward large corp verses small people. Notice that most of the solar on people roof in CA is no solar lease (which adds $0.40/W to the cost) and most of the savings goes to a large corp, not the home owner as in Germany or down under.

          • http://zacharyshahan.com/ Zachary Shahan

            But the question I still have: is that because homeowners really can’t get a loan and collect the tax credits themselves, or is that simply because $0 down marketing attracts them like honey attracts flies? There is a $0 down loan available nationwide. Individuals can get the tex credits (as long as they can make use of them). But I’m genuinely asking: do you know if a lot of the customers of these leasing companies wouldn’t be able to make use of the tax credits and wouldn’t qualify for the loans? http://cleantechnica.com/2013/10/25/solar-loan-admirals-bank-vs-solar-lease/

          • Matt

            Zac, it kind of like the EV car several posts later that has a low up front cost and a monthly fee. Where the total is more that similar EV when you calculate the total cost. Many people think very short term. Now there are groups non-profits, schools, local governments, that can’t use the credit. If I don’t have enough taxes to use the credit, I don’t think it coverts to a cash refund does it? But I think it is mostly the $0 down that gets people, they don’t look the other options and do the math. But when I look at the soft cost US verse Germany and see the big portion that goes to solar lease I have to question that it is the correct way for most people.

          • http://zacharyshahan.com/ Zachary Shahan

            Exactly my thoughts. I’m just constantly thinking that there’s some important variable that is missing or gets under-covered. Otherwise, it’s just a shock how much people are averse to math. (As far as the nonprofits, etc: yep, they have no way of getting that tax credit themselves.)

  • Tomáš Hluska

    Main renewable electricity sources were in first half of 2012: Wind energy 36.6%, biomass 22.5%, hydropower 14.7%, photovoltaics (solar) 21.2% and biowaste 3.6%.

    from http://en.wikipedia.org/wiki/Energy_in_Germany#Renewable_energy
    which means that those “free” energy sources make only about 15% of the total energy.

    BTW if they are really so free, why do they need donations to operate?

    • Bob_Wallace

      First, all electricity is subsidized.

      Second, fossil fuel and nuclear energy have received massively more subsidies than have renewables.

      Third, most of the subsidies for renewables have gone not to wind and solar but to large corporate corn growers who supply the ethanol plants.

      Fourth, wind and solar subsidies will soon be ending. Subsidies for fossil fuels and nuclear will continue.

      Finally, you’re confusing “energy” and “electricity”. What is free is the energy, the “fuel” for solar panels and wind turbines.

    • A Real Libertarian

      “BTW if they are really so free, why do they need donations to operate?”

      Wat?

      • http://zacharyshahan.com/ Zachary Shahan

        @areallibertarian:disqus: i don’t know where you came in from, but i’ve been loving your comments. the fun ones (like this) and the detailed responses. keep it up, please! :D

  • Steeple

    We’re a long way from zero electricity costs, but it is nice to think that is is possible.

    Utilities must be scrambling to figure out ways to recover their stranded costs. Capacity markets make no sense in this scenario as they are designed to incent capital to invest in sufficient spare capacity, of which Germany seems to have plenty.

    The market will work and the less efficient capacity will fall off over time, and it will become more clear as to what fossil fuel capacity will be needed to provide system stability.

    What might be a useful exercise is to understand what stress case scenarios exist where renewable power production declines due to poor weather conditions, and what that means for the amount of backup capacity that would be required.

    • Bob_Wallace

      People have sort of jumped from “free energy” – sunshine, wind, falling water and deep Earth hot water – to “free electricity”.

      It will always cost something to transform sunshine and wind into electricity (solar panels/turbines) and to distribute and store that electricity.

      What we’re probably headed toward is cheaper electricity. Along with a more efficient system that uses less electricity (and, especially, petroleum). Once we arrive in Renewable Land we will likely spend a much smaller percentage of our incomes on electricity and energy.

  • Benjamin Warr

    the marginal cost of the electricity can never be zero until the 2nd law efficiency of the conversion device is 100% because an additional unit of efficiency reduces the ‘operational cost’ which makes up most of the energy. So if it can be lowered it is not zero. Improved efficiency of the capex has an effect even if the capex is small compared to the opex savings of say for example solar. I think…

  • Dave2020

    There never can be a ‘market’ solution for this dilemma. It will have to be a technology fix. As OPEC will tell you, if you don’t control the supply you lose control of your pricing. The law of supply and demand.

    Every time nature delivers a glut of power, the market enters queer street. The only way to control that (other than switching the excess off) is to deploy less total installed capacity AND build your renewables with before-generator energy storage.

    “The retail consumer has borne the brunt” – Yes, but that is only one aspect of this monumental market failure. This is infrastructure we need to build. That calls for international, cross-border co-operation and a joined-up planning strategy, not the whims of market speculation and government decreed market incentives. Everybody agrees that we need (at least some!) energy storage to run an efficient future grid, but there’s NO incentive to deliver it and no motivation to develop it.

    The capital investment should come entirely from taxation. Money-lenders should have no role to play. This is no time to allow ourselves to again become hostage to yet more mindless ‘free-market’ ideology, such as that which infected the global financial ‘services’ industry.

    Do we really want ‘gamers’ speculating on how the weather might affect the price of electricity – tomorrow, next month or next year? What a nightmare!

    Research quoted here:- http://www.truthdig.com/report/item/giant_battery_ensures_renewable_energy_supply_20131209
    claims that 18GWs would be, “enough to provide adequate backup” for Northern European offshore wind. This is not very helpful, since we need to know the GWh figure! But, more to the point, “backup” is a fundamental misconception.

    The EWEA has its sights on – “by 2030 it is predicted that there will be a total installed capacity of 150 GW of offshore wind power producing over 550 TWh of electricity.” I have my doubts that PHS could provide adequate, or cost-effective, backup for that volume, so remove, at source, the need for ‘backup’.

    The UK is projected to need a total installed capacity 2.5 times peak demand in order to run the future grid with the expected renewables’ content, based on orthodox (no BGES) designs. On the face of it, I’d say that will prove to be an expensive mistake. With BGES 1.5 times would do the job better.

  • Altair IV

    I’ve long thought that the future will eventually lead us to a distributed electric supply that is steady, cheap, and level; where supply is capable of matching demand at any time of day without any serious adjustments. I believe we truly can reach a point where it’s almost too cheap to measure, if we just allow it.

    In this scenario (and perhaps in any case) I think that the best option is to break up the existing grid system and transform it into a mesh of locally-controlled and interconnected micro-grids. Each community would finance and administer its own systems in whatever way they feel is best (with “community” being a flexible term accommodating anything from a neighborhood to a city), and some kind of simple credit or payment system would be used when electricity needs to be passed between microgrids. The bulk of the costs should be in maintaining the grid itself, however, and so most communities would probably use some form of flat fee or public ownership.

    I admit though that I’m no expert, so it’s all just a bit of speculation on my part.

    • Bob_Wallace

      Breaking up the grid into micro grids is likely to make electricity more expensive for most.

      Cheaper for those micro grids which end up with the big hydro projects in their area. They will be able to use hydro alone or a mixture of renewables and hydro. Micro grids without hydro or wind farms are going to have to use a lot more storage and gas peakers which means paying more.
      If anything, we need to make our grids larger. Solar is getting cheap. Think about the ability to ship early morning East Coast solar to the West Coast to supply their morning demand peak and West Coast solar to the East Coast to deal with their late afternoon peak demand.

      Imagine using Pacific Northwest and eastern Canadian hydro as a fill in for Midwest and offshore wind allowing everyone to build less storage. Bringing solar-electricity up from the Mexican deserts.

      The smaller the grid, the more redundancy has to be built. Better to go large and share.

  • Jouni Valkonen

    Two most important aspect:

    We can recycle everything.

    We can grow food at vertical greenhouses. This reduces humanity’s ecological footprint to 1.5 % of land area of Earth.

    I think that the price of solar electricity is zero (i.e. too cheap to meter) around 2030 to 2040.

    (Next I will read the article….)

    • Altair IV

      I doubt very highly that FITs are the “always bad” thing you claim them to be, instead of being good tools to use in some situations and not so good in others. You also appear to be overlooking the possibility of adjusting them over time to encourage the exact technological balance desired. I certainly haven’t seen any of the problems you mention in Germany and most other places that are already operating FITs.

      • Bob_Wallace

        I agree. FiTs have been excellent ways to bring down the cost of solar. Sometimes the FiT is poorly designed and doesn’t scale back quickly enough, but that’s not a flaw with FiTs, just a problem of proper use.

      • Jouni Valkonen

        In Australia there is no FIT for Wind and wind power gives as high as 45 % capacity factors and produces world’s cheapest windpower (using German windmills). In Germany there is a FIT and average capacity factor is less than 19 % and produces at least twice if not trice as expensive electricity as in Australia.

        Clearly the Australian model is superior to German model. At least with wind power.

        With solar Germany got better start due to FIT than Australia, because storage technology was not available in 2010. In Australia roof-top solar systems were often too small, because subsidy system did not encourage for feeding electricity back to the grid.

        Anyway, as today storage is competitive enough, there is no longer rationale for solar FIT.

        Solar FIT is also bad for utilities, because it encourages into wrong design of centralized solar plants. West facing solar panels produce less total electricity, but they are better at displacing peak load.

        • Bob_Wallace

          If wind resources are richer in one area then it would take less subsidy/support to bring new capacity on line.

          Australia’s solar success was made possible by German’s and Spain’s FiT programs which made panels cheap.

          FiTs are neither good or bad for utilities. Or both good and bad. FiTs bring new technologies on line. We have to pay a bit (invest) up front to get new technologies that give us cheaper electricity from then on out.
          It’s like replacing your 15 MPG clunker with a 50 MPG hybrid. Some upfront cost but more than pays for itself over time.

          • Jouni Valkonen

            There is not that big difference in wind resources between Australia and Germany that it would explain the cost difference.

          • Bob_Wallace

            “In Australia there is no FIT for Wind and wind power gives as high as 45 % capacity factors and produces world’s cheapest windpower (using German windmills).

            In Germany there is a FIT and average capacity factor is less than 19 % and produces at least twice if not trice as expensive electricity as in Australia.”

            You just said there was and I took you at your word.

            If hardware/labor/land costs are roughly equal and the CF is 2.4x greater that would make the electricity produced half as much or less.

  • Marion Meads

    If the price of fuel is high, many complain, and when the price of fuel is zero, they still complainin. I dont understand some people here.

    • Altair IV

      Just who here is complaining? I’m sure everybody would just love to see electricity at zero cost. Putting some thought into the possible ramifications of such a situation is not the same as complaining about it.

    • Kyle Field

      It’s not complaints…just the realization that this changes EVERYTHING in the energy market and thus, requires a redesign vs business as usual :)

      • Bob_Wallace

        Not only a redesign of the utility business model is required, there’s the problem of “stranded assets”.

        Someone owns those coal mines and plants and the nuclear reactors which are getting pushed aside. The owners are certainly not happy with the idea of losing their investments and they will not go under without a fight.

        We’ve seen fossil fuel interests fight renewable energy for years, attempting to delay the obvious. Now we’re starting to see plants and mines closing and their fighting is likely to increase.

        • Kyle Field

          That’s a very good point Bob. It’s easy to dismiss them saying “you’re not good for the environment and your business is no longer relevant” but the reality is that they represent real investments and more importantly real jobs. This is similar to what happened to many newspapers when since the internet came on the scene. The world changed and businesses must evolve or face the inevitable and die off.

          • Bob_Wallace

            At one point in time the US generated most of its electricity with petroleum. Then we moved to coal and petroleum was mostly pushed off the grid. The “energy”, the fuel, for coal was cheaper. The price of natural gas fell and NG took some of the market away from coal, dropping it from a 54% to a 40% share.

            Now new technologies are emerging which have even cheaper energy/fuel costs and will almost certainly push both coal and NG aside.

  • agelbert

    Well, consider this. Without artificial scarcity or price shocks from fossil fuels, two things happen:

    1) The power to buy politicians and undermine democracies is lessened which, in turn, saves trillions of dollars in war profiteering and human misery.

    2) A world at peace has a much more reliable infrastructure and investment climate. Stability attracts investors for a predictable, stable yield for Renewable Energy infrastructure bond issues.

    The two factors above translate to the yield on the investment being a function of the price people pay for the infrastructure that brings them the energy, period. All this machinery has MTBF cycles and can be depreciated in a thirty or forty year accounting cycle.

    People will pay for service, not the energy itself, even though, of course, the target for all of us is to be carbon-neutral so the environmental consideration will always affect the pricing structure to possibly penalize high energy cost based purely on environmental considerations, not the energy cost or the infrastructure.

    I bring this up because Homo Sapiens is smart enough to set up a 100% renewable energy economy and proceed to overwhelm it through over use of this “free” energy. There is a biosphere out there we can no longer neglect. This time the environmental cost, and there always will be one, must be paid as we use that energy. We do not want a repeat of the greed gluttony of the fossil fuel industry and utility company “investor” profits that encouraged polluting energy and overuse of energy as well.

    Just my two cents.

    Remember what Thomas Edison said in 1931. He was a wise man but we did not do what he proposed because of greed, not because we couldn’t develop the technology. We must look at energy as a part of life, to be used prudently, not as an unlimited “fuel” to be used willy nilly.

    1931: Edison Advocates for Solar Energy over Fossil Fuels

    In a conversation with fellow inventors and entrepreneurs Harvey Firestone and Henry Ford, Thomas Edison says of renewable energy sources: “We are like tenant farmers chopping down the fence around our house for fuel when we should be using nature’s inexhaustible sources of energy—sun, wind, and tide.… I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” [US History, 2013; About Thomas Edison, 8/19/2013]
    It’s time to stop chopping the fence around the house of ALL the earthlings we share this planet with. As self aware beings responsible for 100% of the environmental degradation, if we keep putting ourselves first, we are guilty of criminal negligence.

    http://renewablerevolution.createaforum.com/fossil-fuel-folly/how-the-promise-of-chemurgy-was-dashed-by-big-oil/msg530/#msg530

    • Bob_Wallace

      A world without big oil and big coal. I can see that being a more peaceful place.

      Most areas/regions can generate the electricity then need. No other political power can screw with them by threatening to cut off gas or petroleum.

Back to Top ↑