9th December 2013

Exploring the Future of Energy

Energy, the short view

In the long term, we want a sustainable, efficient energy economy, one that lets all of the Earth’s population enjoy a high standard of living without burning through finite resources or causing severe climate change. But, as I explained in my previous post, we also want to get there without any dramatic disruptions, through a series of soft landings. So the question becomes what we can do in the immediate future that will help begin key transitions before we’re committed to a rough landing. A solution like that involves working with the technologies we have now.

Among those technologies, focusing on coal seems the simplest, since it’s bad in so many ways. It’s incredibly cheap right now, but only because its externalities aren’t priced in: burning it releases lots of toxic metals, creates a huge particulate load, and entails massive carbon emissions per unit energy. There are also significant environmental degradation and health problems where it’s mined. Factor these in, and coal is nowhere close to being cost-competitive. Natural gas is much, much better in almost every respect, and it’s already playing an important role in lowering global carbon emissions where it’s available.

But we do need to manage a transition to renewables. Among the renewables, hydro is probably close to its limits, as most of the best sites for power generation are already in use. What we might see more of is pumped-hydro energy storage, which can help smooth over some of the problems with the intermittent generation of other renewable sources. Geothermal energy, which requires drilling and forced circulation of water, is great in the sites where it’s available, but we haven’t made it very far in terms of finding out whether it can work as an energy source further from the geologically active locations. So, it’s hard to judge just how significant a source of energy it will be.

Tidal and wave power are currently far too expensive for anything other than investing in trying to make them cheaper. So, although they may play a role in our future, they won’t be a major factor in the transitions we need to do now.

Well-sited onshore wind energy is nearly cost-competitive with fossil fuels in most countries. Offshore wind isn’t there yet, but the costs are coming down, just as they are for on-shore—it will be a factor in countries where on-shore sites aren’t available. The variability associated with wind was once thought to be a serious liability once it neared 20 percent of a grid’s energy supply; that’s turned out not to be the case, and it’s not clear where wind’s upper limit is.

Solar has dropped in price dramatically. Although it’s still a way from cost-competitiveness with current fossil fuel prices, lots of solar is being installed to meet government mandates and consumer demand for renewable power. And, in many situations, it’s extremely effective. Its energy payback time in good sites can be under two years, and it can be installed in lots of places where we already have infrastructure—warehouse roofs, parking areas, even utility poles. So solar is going to continue to be incorporated into the grid, and it behooves us to figure out how to do so effectively.

All these forms of renewable power will be more effective when coupled with a grid that draws power from large areas to ensure a minimum amount of power generation, includes some storage, and is smart enough to balance demand and available power a bit better. Putting those pieces in place now, while prices for wind and solar are still dropping, will leave us better prepared for when power from these sources gets even cheaper.

For the intermediate term, however, we still need baseline power. And there’s a large role to be played there by nuclear power. Unfortunately nuclear plants are the exact converse of wind and solar: they require enormous up-front investments and take years to start delivering power. In the current environment—with no carbon tax and cheap wind power—there’s very little reason to spend that money in most countries. Meanwhile, the public in many countries doesn’t accept nuclear because of past instances of regulatory capture and complacency.

There are lots of ideas for making nuclear safer—small modular reactors, thorium, and other passively safe designs—but none of them have made it beyond the testing stage. Reprocessing fuel has been tested, and it’s turned out to be prohibitively expensive. It has since been dropped by almost every country that tried it. So, in many ways, it seems that one of the most essential sources of power for the next few decades is the one that faces the greatest hurdles to adoption. I’m hoping to find out whether that’s still the case during one of the sessions planned for Gothenburg.

I’m willing to admit I am probably wrong on some of these. I’ll be anxiously waiting for the Dialog to help me find out which ones.



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