(Picture: Hole in Ozone Layer over Antarctica)
According to the World Energy Council (WEC), about a quarter
of the world’s population still does not have access to commercial energy. The
economist Intelligence Unit (EIU) reckons that world energy use has doubled
over the last forty years and will double again over the next forty years, even
allowing for increased energy efficiencies.
This coincides with the WEC prediction that India’s and China’s power
demand will continue to stress their in-place energy infrastructure. While internet and IT growth in general has grown in line with Moore’s Law,
electricity generating assets that come on stream stay on stream for 40 years
or so; not just until the next big thing comes along. And that means that we need to think long and
hard right now about what to put in place to deliver supply for the future.Meeting Demand with …..What Kind of Supply?
Right now about 80% of the world’s primary energy comes from
fossil fuels. That excludes
hydroelectricity and nuclear power generation.
So what do we fill the demand pipeline with in future decades?
Coal? Two-fifths
of the world’s electricity is currently produced by burning coal. The efficiency of a coal burning plant can be
as low as 30% and yet the low price of this fuel makes it attractive to those
who do not bear the cost of cleaning up its by-products.
Hydroelectricity?
Hydroelectricity generally requires
falling water – and that means a dam.
Dam infrastructure incurs its own environmental concerns and is unlikely
to be a high growth area in the future; especially given population growth in
the areas of the world where this technology is politically feasible.
Nuclear?
Fukushima may not have killed nuclear prospects but, combined with exploding
capital costs for new installations and European memories of Chernobyl, it has
severely curtailed nuclear growth rates.
Natural Gas? Hydraulic Fracturing, or ‘Fracking’ is a
technology that is enabling the capture of natural gas from deep in the
earth. Natural Gas is rapidly becoming a
replacement for other fossil fuels in the production of electricity but it is
not without its sins. Fracking is under
attack from environmentalists and others over concern for health and safety and
the environment and in fact is banned in some countries. Nevertheless, natural
gas is considered a viable source of relatively cheap energy, if you exclude
all the costs of extraction, not to mention the cost in GHG emissions.
The Transmission
Question? And to exacerbate the power generation quandary there are
electricity losses from transmission over long distances. ‘Line losses’ increase with distance
electricity must travel to get from supply to demand, and distance travelled
generally increases with size of generating plant.So What’s Left?
The Sun. Solar Energy in the form of biofuels,
geothermal, wind energy, photovoltaic and other technologies, most of which
need to drop in price in order to approach a price parity with current
electricity supplies. Technologies such
as these are increasing in power production efficiency and dropping in price with increasing
manufacturing sophistication.
The problem here is that these renewables currently account
for about 1% of current electricity generation and there simply isn’t the
infrastructure in place to allow them to fill the anticipated increase in
demand for electricity without sufficient policy assistance such as carbon
pricing. Combined with the forty year generator life average, the result is that fossil fuels will dominate energy infrastructure and
infrastructure growth for the foreseeable future unless the real cost to the
environment is written into the production of electricity by the use of fossil
fuels.
Energy poverty is a word that keeps popping up. A world of scarcity will increase the cost of
fossil fuels according to the law of supply and demand. But even so, the cost of renewables trickles
lower and lower as they strive to reach the holy grail of grid parity. In geographical locations with higher
marginal cost of electricity generation renewables will surpass fossil fuels in
cost efficiencies – within a decade if carbon pricing becomes more commonly
adopted.
Miles McDonald
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