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The Dangers of Green Technology-Forcing

Highlights:

  • Current technology-forcing policies imply that wind/solar power combined with battery electric vehicles represent our only viable energy future.
  • Given the fundamental limitations of these technologies, this is a very dangerous notion.
  • The costs of forcing deployment of these technologies can be especially high in developing nations.
  • A shift to technology-neutral policies is sorely needed. 

Introduction

It is undeniable that wind/solar power and battery electric vehicles (BEVs) will play an important role in the energy system of the future. They are, however, fundamentally limited regarding the speed and extent to which they can grow. Despite these fundamental limits, current policy frameworks imply that they are essentially our only options for a clean energy future – a very dangerous notion indeed.

This article will discuss the dangers associated with current green technology-forcing in more detail, outlining why it can easily hurt much more than it helps. A follow-up article will then detail some of the other options at our disposal together with some musings about how these options will respond in a more intelligent technology-neutral policy scenario.

Before we start, here is a quick clarification on what I mean by technology-forcing and technology-neutral policies. Technology-forcing promotes certain technologies over others through mechanisms like subsidies, tax breaks, mandates, portfolio standards, low-interest financing, accelerated depreciation, guaranteed prices, etc. Technology-neutral policies target the real issue and alter the competitive landscape in favour of any technology that can address this issue. Examples include a carbon tax to combat climate change, fuel taxes to limit congestion and oil dependence, and vehicle/plant emissions taxes to improve air quality.

Fundamental limitations

Let’s start by revisiting the fundamental limits to the growth of wind, solar and BEV technology. If these limits did not exist and there really could be a tipping point beyond which these green technologies would mercilessly sweep aside fossil fuels for good, I’d be all for it. But unfortunately, this is not the case.

The fundamental limits that will restrict wind and solar to moderate market shares include the following:

As a practical illustration of the growth limitations faced by wind and solar power, the graph below compares primary energy growth in China. Clearly, despite massive technology-forcing, combined wind and solar output is increasing at about a 10x slower rate than coal grew a decade earlier. This large difference is even more striking when considering that the productive capacity of the Chinese economy was almost 3x smaller during the coal growth period than the wind/solar growth period.

It is also noteworthy that grid integration issues are already hampering wind/solar scale-up even at the current low market share, whereas pollution concerns of coal started limiting deployment at much higher market shares.

Data (1, 2) showing China’s impressive recent wind & solar scale-up relative to coal growth from a decade earlier.

The fundamental limits that will restrict BEVs to moderate market shares include the following:

Drivetrain and fuel costs for BEVs and hybrids employing assumptions consistent with commuter cars on the left and highway cars on the right of the graph (previous article).

However, the most important issue to me is the fact that all of these green technologies are highly capital intensive. Furthermore, commitment to an energy future dominated by these technologies also demands a wide range of complex and capital-intensive supporting investments. This complex front-heavy investment requirement makes these technologies fundamentally unsuitable for supporting rapid economic development, which is a much higher priority than sustainability for about 80% of global citizens.

Contour lines showing the welfare-optimized wind/solar market share under different discount rates (WACC) and CO2 prices (discussed in detail earlier). Developing nations will generally fall towards the bottom-right of the graph.

What can go wrong?

But so what if we continue current technology-forcing policies, but eventually have to concede that we cannot push these technologies beyond about a quarter of final energy demand. What harm would be done? Surely it is better than doing nothing. Well, not quite…

Firstly, the policy-driven growth of these technologies attracts a lot of capital and initiative that would have gone to the myriad of alternative sustainability options under a technology-neutral framework. Given the typical multi-decade development pathway from concept to fully cost optimized commercial-scale deployment, putting all of our eggs in one basket is a very risky ploy.

Solar PV illustrates the time required to go from concept to commercial reality (image source).

Secondly, the enormous supporting infrastructure buildouts required by this pathway will impose a massive cost if things don’t work out as expected. For example, getting anywhere close to 20% of our final energy from wind and solar will require a total redesign of the power system with heavy investments in flexible power plants, long-distance transmission lines, demand response and energy storage. If we eventually realize that the required deep decarbonization is not possible through this pathway, switching to an alternative pathway will be incredibly costly (both in terms of time and money).

Large value declines of solar PV in a high carbon tax scenario when changing from policies excluding nuclear and CCS (green line) to policies including all options (orange line).

Thirdly, forced deployment of these capital-heavy technologies at a scale that will actually make a difference will divert unacceptable amounts of capital away from other infrastructure investments capable of stimulating compounding economic development in the developing world. Such development is critical to increase life expectancy and quality of life, and impeding this development can have massive humanitarian costs (below). As a quantitative illustration, I previously estimated the net cost of this effect at $750/ton of CO2 avoided.

An important omission from the enormous cost mentioned above is that rapid economic development directly shields people against the effects of climate change. Improved housing, sanitation, utilities, medical care, international trade connections and general productivity will all greatly reduce the impacts of a more hostile climate on the lives of developing world citizens. Ironically therefore, CO2 released to maximize the speed of this massive infrastructure buildout will actually lower the climate impacts experienced by the majority of global citizens.

Economic development offers excellent protection against climate change (image source).

Finally, we should acknowledge that rapid increases in global productivity will make it much easier to balance our carbon budget by the end of this century. As a simple example, it is now finally becoming more generally accepted that broad deployment of carbon negative technologies will be required to achieve our climate goals. Let’s consider a worst-case scenario where we eventually need to extract a massive 2000 Gt of CO2 from the atmosphere via bio-CCS, direct air capture and reforestation at a high average cost of $150/ton.

Currently, the enormous total cost of $300 trillion is more than double global GDP (PPP). However, if we can bring the developing world up to developed world productivity, the total cost suddenly reduces to less than 6 months of global production (1% of output spread over 50 years) – certainly a manageable number if we consider what is at stake.

Illustration of rapidly growing emission gaps that will enforce carbon negative solutions later this century.

Thus, any economically inefficient decarbonization effort in the developing world will result in a broad range of costs totalling far more than the $750/ton CO2 estimate given above. And yes, technology-forcing is per definition economically inefficient.

Conclusion

Technology-forcing policies promoting wind/solar power and BEVs may do much more harm than good in the long term. This is especially true for the developing world where about 90% of economic and energy growth will take place over coming decades.

It is crucial that people concerned about our great 21st century sustainability challenge stop bickering about which technology class is best. This time and initiative can be invested much more productively in advocacy for technology-neutral policies levelling the playing field for all clean energy technologies.

Such policies will unleash a broad range of creative sustainability solutions, some of which will be covered in the second part of this article. Given the urgency and magnitude of our global sustainability challenge, we can no longer afford to persist with inefficient technology-forcing of the most ideologically attractive solutions.

Content Discussion

wind smith's picture
wind smith on April 23, 2018

Do you consider a carbon tax a subsidy?

John Miller's picture
John Miller on April 23, 2018

Schalk, as I am sure you are aware, technology forcing government policies have developed very significantly in most Developed Countries for over 40 years and become a growing bureaucratic or dictatorial role in major Developing Countries in recently years. Yes, governments can definitely influence the development of technologies, but this should normally be done in supporting clean energy R&D. As you clearly state, wind & solar with backup storage will definitely play a significant role in mitigating future rates of carbon emissions increases, but not likely significant reductions without sufficient time to avoid the excessive/wasteful costs and significant social/living standards penalties likely to occur in most Developing Countries.

A better solution to reasonably addressing climate change is a more cost-effective balance of clean energy solutions, in addition, more aggressively addressing needed/required ‘adaptation’. The likelihood of actually controlling future temperature increases is highly uncertain, so an important and effective strategy/solution is to adapt to the changing climate, beginning with moving or modifying all structures well above rising sea levels and growing flood zones.

Roger Arnold's picture
Roger Arnold on April 23, 2018

Following captures the key issue:

However, the most important issue to me is the fact that all of these green technologies are highly capital intensive. This complex front-heavy investment requirement makes these technologies fundamentally unsuitable for supporting rapid economic development, which is a much higher priority than sustainability for about 80% of global citizens.

I strongly agree.

Note, however, that the same applies to nuclear power in its current forms. Highly capital intensive, and as such not all that helpful for developing nations. It can certainly be argued that the high capital cost and protracted construction schedules that now hold are the result of burdensome regulatory processes and overhead deriving from baseless paranoia about the hazards of radiation levels well below natural background levels. Be that as it may, it doesn’t alter the fact that drastic change is needed before nuclear power is able to effectively deliver for developing economies.

It’s time we acknowledge that clean energy solutions are not limited to conservation / efficiency vs. variable renewables vs. nuclear power. Unpopular as it is, we also need to recognize the potential of fossil energy with CCS. There are also non-variable renewables like OTEC and advanced geothermal that technology-neutral policies would facilitate.

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 23, 2018

Thanks for the graph on emission gaps re Paris Treaty. Here in Finland the media is full of stories how people cut their carbon footprint by cycling, using canvas bags and becoming vegetarian. Looking at this graph, it compares to a weight-loss plan based on cutting your hair shorter.

Bas Gresnigt's picture
Bas Gresnigt on April 23, 2018

There are no fundamental limits that will restrict wind and solar to moderate market shares!
With:
– the continued declining costs of wind & solar towards <2cnt/KWh, which allow over-provisioning; and
– the increasing capacity factor of wind (now expected to reach 60% in ~2025); and
– the decreasing costs of storage (batteries and PtG for seasonal storage);
wind & solar will penetrate towards very high levels. Such that 100% renewable is reached.
In Germany, ~ 90% as hydro generates ~3% and biomass+waste ~7%.*)

… variable and non-dispatchable nature that leads to sharp value declines and a perpetual subsidy dependence.

New solar / wind are now below 3cnt/KWh in areas with high insolation / steady wind and no longer subsidized.

Even in areas with moderate winds auction start to deliver unsubsidized wind bids, check the recent offshore wind auctions in Germany and NL.
Due to the continued price decreases of wind & solar, more an more unsubsidized wind & solar will be installed.

The poor correlation between wind/solar resource availability and population density.

?? Even in dense populated Netherlands at latitude of ~52 degrees, wind + solar can easily generate all energy (not only all electricity) without occupying important land (rooftop solar can produce enough to deliver all electricity).

they only supply electricity, which currently accounts for only 22% of final energy

That is easily solved with technologies such as PtG…

______
*) There is a chance that geothermal will really take off once remote sensing technology is improved such that it can predict hot water amounts in basins deep below the surface, as well as the quality of the water and the hot water amount that can be withdrawn (replacing it with cold water). Though we may need quantum computers to reach that situation.

Sean OM's picture
Sean OM on April 23, 2018

One glaring issue with your India graph is they saved I believe 100B dollars in their efforts to electrify all of India by choosing a distributed model vs the centralized model. You need far less infrastructure for the distributed model.

You seem to ignore both china and india are also experiencing heavy pollution, so their policy isn’t all about CO2 reductions, it is about reducing particulate matter as well.

What you are saying amounts to, if you put a catalytic converter on your car, and have higher emissions standards, you can reduce smog. Ask LA if that worked.

Bob Meinetz's picture
Bob Meinetz on April 23, 2018

Schalk, from a glance at Wal-Mart’s balance sheet, it’s obvious the world’s largest corporation earned that distinction by aggressively selling consumers what they want, at the cheapest possible cost, without any accounting of the costs to society of all that consumption. And when I hear others talk about the economics of solar, wind, coal, nuclear, or any other form of energy, carbon cost is studiously ignored – it really makes no difference to the average consumer. It seems green technology is fundamentally at odds with free-market capitalism – if we allow individual buying habits to take control of how we generate our electricity, we are lost.

In response to the 1974 Arab Oil Embargo, France began a vast technology-forcing program known as the Messmer Plan, named after its Prime Minister. Announced suddenly and enacted without parliamentary or public debate, its goal was simple – to generate all of France’s electricity from nuclear power. Its slogan was “In France, we do not have oil, but we have ideas,” and 45 years later it is the most effective green policy idea in world history, dwarfing the results of solar, wind, biomass, and geothermal combined.

So I will disagree – the Messmer Plan was an unqualified success, entirely dependent on an intelligent leader having the vision to force a very specific technology on his countrymen because it was best for France. And in the end, best for the world too.
http://thorium-now.org/images/french_nuclear.png

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 23, 2018

Even in dense populated Netherlands at latitude of ~52 degrees, wind + solar can easily generate all energy (not only all electricity) without occupying important land (rooftop solar can produce enough to deliver all electricity).

Then why do the Dutch cling to fossil fuels? 90% of their energy is derived from fossil fuels, 80% of their electricity is generated with fossil fuels. When all this incredibly cheap, easily commissionable renewable energy is there for the taking?

Contrast this with Finland. In 2016, 78% of electricity generation was carbon-free, share of fossil fuels in total energy consumption was 36% in 2017. Emissions have come down 40% since their peak in 2003. Despite being officially the coldest country in the EU.

Of course, the numbers will only get better once much-maligned Olkiluoto 3 NPP comes online.

Schalk Cloete's picture
Schalk Cloete on April 23, 2018

No, a reasonable carbon tax will ensure that the market internalizes real externalized costs of energy. Implementing such a mechanism would therefore improve economic efficiency. Subsidies (technology-forcing) are generally economically inefficient.

Schalk Cloete's picture
Schalk Cloete on April 23, 2018

Yes, it really is quite simple: climate change will require a huge amount of extra work from the economy, both to limit future damages and to deal with those limited future damages. We simply cannot afford to do this work in a highly inefficient manner by focusing all our attention on only some of the wide range of possible solutions. We will need to efficiently apply every available solution in the market segment most suitable to its particular strengths.

The topic of climate change adaptation is an important one. I think this can become especially controversial with regard to large developing world damages caused by a century of unabated CO2 emissions from the developed world. This climate equity issue is one of the primary reasons why I’m so concerned about developing nations slowing their economic development for the sake of curbing CO2 emissions. Rapid economic development is the best way for developing nations to limit future climate damages experienced by their populations.

Schalk Cloete's picture
Schalk Cloete on April 23, 2018

Yep, true that. I have previously quantified the cost of forcing capital-intensive nuclear to be about half of the cost of forcing capital-intensive solar into a rapidly growing economy, but the cost is still very large. The long construction times of nuclear reactors is a significant drawback in such scenarios where the time-value of money is very high.

I have pretty much resigned to the scenario where the world pushes forth on its current highly inefficient carbon mitigation pathway, while emissions gaps gradually widen towards 2030. By that time, climate change effects may become large enough to directly impact the lives of a large portion of the electorate, resulting in a rapid shift in the willingness to pay for CO2 reductions. With this high global motivation, a meaningful carbon tax can finally be implemented and a broad range of solutions will rapidly enter the market.

CCS will be the technology that does best in such a scenario, which is why I’m working in this field. In the meantime though, I continue to write these kinds of articles trying to pull forward the time when meaningful technology-neutral policies are implemented so that we will need less CCS and other reactive climate mitigation strategies in the future.

Schalk Cloete's picture
Schalk Cloete on April 23, 2018

Well, every bit helps. I think intelligent lifestyle choices like cycling instead of driving and cutting out red meat are very important. If only a small country like Finland does this, the effect will be small, but if this philosophy keeps on spreading through the developing world so that the rapidly growing developing world middle class can strive for such more sustainable lifestyles rather than wasteful and unhealthy consumerism, the global CO2 saving can really become enormous.

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 24, 2018

Schalk,

Rapid economic development is also the most effective way to curb population growth. It is not only the size of the footprint but how many footprints we have on this planet.

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 24, 2018

Well…. The economic growth in the developing world you are looking for is partly driven by consumerism in the developed world. It is a global economy today. The Maledives is complaining about rising emissions and sea levels at the UN but are also building a new airport to support their tourism industry, fervently hoping that we will not stop flying.

Also, the awareness of climate change is most visibly manifested not in sustainable lifestyle changes – but as support for green technology-forcing that you wish to avert. The Germans love to drive their Beemers and Porsches on autobahns without speed limits, gazing at roofs adorned by solar panels and forests of wind turbines, assuring that they are doing their bit.

Bas Gresnigt's picture
Bas Gresnigt on April 24, 2018

The post wrongly assumes:
– “that all of these green technologies are highly capital intensive.”
That was true until some years ago. Nowadays the capital investment per KWh is less than half that for nuclear. And it’s becoming lower than for fossil (a.o. coal) too.

Furthermore regarding green technologies:

commitment to an energy future dominated by these technologies also demands a wide range of complex and capital-intensive supporting investments. This complex front-heavy investment requirement makes these technologies fundamentally unsuitable for supporting rapid economic development…

It’s opposite. The decentralized distributed nature of wind, solar, some storage (batteries) and the fact that those don’t emit radiation or other toxins, facilitate installation near population centers. Even in population centers in countries with little NIMBY.

The simple fact is that in many development countries, solar & wind are now becoming cheaper than other methods… So they will take the market.

Below a picture of a cheap power plant which in combination with an old truck battery supplied our hotel ‘New York’ in Pang, Kashmir (100% availability) where we stayed during our cycling tour. It was installed by the then 12yrs old son of the land lady on the picture:

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

I’m sorry, but this comment exhibits clear signs of someone who has made up his mind about a predefined conclusion and then proceeds to assemble any information that can support this subjective bias. We are talking about global issues here. Citing numbers like levelized costs below €20/MWh and 60% capacity factors that are only possible under very special circumstances is simply meaningless in this conversation.

Costs of less than €20/MWh require essentially free capital. This is only possible in developing nations with negative benchmark interest rates where strong technology-forcing policies guarantee investment returns. Such artificially low interest rates is a form of subsidy because it does not eliminate risk, but simply displaces risk from investors to taxpayers.

More importantly, the time-value of money is very high (>10%) in the developing world where about 90% of new energy capacity will be installed in future decades. With such discount rates, the cost of solar PV stays around €50/MWh even if fully installed capital costs fall to €500/kW. The same goes for all the capital-intensive, low-utilization solutions required for integrating high shares of solar PV.

60% wind capacity factors may be possible in isolated cases. However, the global average wind capacity factor remains about 25% with a very weak increasing trend of about 2%/decade (BP Statistical Review). Major growth markets like China achieve only 20% capacity factor (due to integration challenges leading to substantial curtailment even at current very low market shares).

Regarding integration challenges, I’m not saying that it is technically impossible to achieve 100% renewable energy, just like it is not technically impossible to go 100% coal, 100% natural gas, 100% oil or 100% nuclear. All I’m saying is that the fundamental characteristics of wind/solar listed in the article will naturally restrict it to moderate market shares in an open market. Forcing renewables far beyond natural market forces may be possible in a special case like Germany, but it will be totally impossible in the developing world where 90% of future energy buildouts will occur.

I always emphasize that wind/solar will be important players in the future energy system. There are many places on Earth where these technologies can be deployed profitably. However, forcing these technologies as the dominant global solution, especially in the developing world where discount rates are above 10% and real world capacity factors are 20% for wind and 13% for solar (China numbers from BP Statistical Review), just makes no sense.

Helmut Frik's picture
Helmut Frik on April 24, 2018

OK, some basic omissions I can see: the limits of the deployment of wind and solar are connected to the size and strength of the grid in which they are installed, and in a really large and strong grid there are no real limitations. Most of such argumentations are being done on the assumptions that a grid ends at the border of the contry (or similar) which is in reality usually not the case.
nother big omission: For example the EEG gave all technologies which looked like to have a chance to provide a useful contribution to bring down their costs in mass production to see which technology would have the real world potential to do so. (And CCS also got a support to do the same). Tho outcome – and not the entry condition were that Wind and solar were the best option. The initial guess did not include Solar, and for biomas and geothermal systems a better development than it did happen in reality was expected.
It is often forgotten that cost reductions to a huge degree do not come from research, but from the economys of scale. The economy of scale again creates a hen and egg problem, in which existing techologies with a lower potential of development have a huge advantage over new technologies with a higher potential, often big enough that a change from the older, less good technologie to a newer, better technology does not happen without external trigger. (Or the change happens extremely, extremely slow)
The disadvantage of the front loading of costs of wind and solar is compensated by the fact that especially solar can be started with tiny planning times and delivers output just weeks after installation. Another benefit is that the systems can be expanded incremental according to the developing needs in small increments. Both aspects fit very well to the needs of developing countries, and both reduce risks of the projects, which again directly reduces financing costs (interest rates) for these systems.

donough shanahan's picture
donough shanahan on April 24, 2018

In a centralised industry (and we have been centralising industry for two centuries to back this up) such as electricity, your have large central plants with relatively simple distribution systems from plant to user.

In distributed systems, not only does each generator have its own set of wires, there must also be a facility to transfer in multiple directions when one user node has too much electricity and another has shortfall. In most schemes envisaged for distributed (current grids are distributed BTW), super grids, beyond currently deployed intercontinental, are also a requirement.

India adopted to provide some electricity provision using a distributed system. This worked to an extent as in small amounts, it is fast to deploy and gives communities with zero electricity some electricity. That is a far different case to electrified countries moving to an inherently less reliable that has more points of failure.

Bob Meinetz's picture
Bob Meinetz on April 24, 2018

Bas, that someone might consider a decrepit 1m2 solar panel with a 12V battery charged by fossil fuels a “power plant” is evidence of the obscene arrogance which dooms residents in developing countries to energy poverty.

Stay at your “Hotel New York” in Kashmir for a year or two. Try ordering room service. Then, get back to us with how solar can do it all for people in these remote areas of the world, with some experience to back up your entitled, first-world opinion.

Bas Gresnigt's picture
Bas Gresnigt on April 24, 2018

@Jarmo,
Because wind & solar only recently became competitive.
Last year we had the first wind auction with bids that did not require subsidies.
Solar still need some, though not much anymore so we move forward with that too nowadays,

All thanks to the major investments of the Germans with their Energiewende.
They installed many GW’s of wind & solar in the first decade of this century due to their system of 15-20 years guaranteed high (up to 62cnt/KWh) Feed-in-Tariffs (FiT’s). It created the mass market about which their scientists predicted in the nineties that it would make wind & solar competitive, even much cheaper than fossil.
We should applaud their courage.

Bas Gresnigt's picture
Bas Gresnigt on April 24, 2018

@Schalk,
It won’t be needed to force renewable. Due to the continued price decreases renewable will take the market anyway in next decade.
You can see that it’s starting to happen: Last year the world invested more in solar alone than in coal, gas and nuclear combined… Add that the world also expands investments in wind and other renewable technology…

Btw.
You forgot a major factor regarding wind & solar in developing countries:
The simplicity of solar and wind.
Especial regarding solar as illustrated in the picture in my comment below.

That simplicity causes that those countries with their relative low educated population, can expand electricity faster.
Those countries don’t have to put their few capable engineers in power plants in order to keep those running. They can utilize those for activities which produce export, etc. and make the population more rich.

Bas Gresnigt's picture
Bas Gresnigt on April 24, 2018

Bob,
Apparently France no longer consider it to be a success. They targeted in new 2015 laws, an extreme fast reduction of nuclear towards 50% in 2025, which target was impossible as it would imply a much faster transition than the German Energiewende (about which many here predicted that it would stall).

Though at a slower more realistic pace, they will reduce nuclear and increase renewable.
As you can also see when you realize that they are not starting with the construction of new nuclear plants, while their existing nuclear fleet shows many signs that they are at the end of life…

Btw.
Why did you exclude more recent years from your graph?

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 24, 2018

For example the EEG gave all technologies which looked like to have a chance to provide a useful contribution to bring down their costs in mass production to see which technology would have the real world potential to do so.

EEG in German is Erneuerbare-Energien-Gesetz, in other words it concerns only renewable technologies, nothing else. And the whole point of the so-called Energiewende has been to eliminate nuclear power.

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

Yep, that is a good summary of the problem. I do feel the beginnings of a subtle cultural shift though. More and more people are looking to simplify and declutter their lives by avoiding needless purchases, improve their general health through lower calorie plant-based diets and more travelling by walking/cycling, and change their careers to work for creative expression instead of making money to sustain a consumerist lifestyle.

Predicting the rate at which this new philosophy will spread is impossible, but I am optimistic that a person living an elegantly simple, healthy and creative life in a relatively small flat without owning a car will one day be perceived as being much cooler than a stressed and unhealthy person trying to keep up with the Jones’. Once this perception properly takes hold, I think the change can be surprisingly quick.

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

I can certainly see how distributed solar can be a quick fix to rural electrification, although I have seen several recent reports about problems with rural electrification in India. It will be interesting to see a source for your $100 billion savings figure.

The problem with the distributed model of course is the unstoppable trend towards massive urbanization. There is no way that you will power a developing world megacity with the distributed model. If we were only 1 billion people on the planet, a quiet rural lifestyle with distributed electricity may have been possible for the majority of the global population, but this is simply not feasible for a world filled with 10 billion people. We have no chance at meeting global development and sustainability goals without the economic efficiency and specialization afforded by massive urbanization.

I clearly acknowledge that pollution concerns will eventually impede coal scale-up, although this happens much later than the integration challenges facing wind and solar power. See the discussion around the third figure in the article.

Well, all the trend graphs of LA smog I quickly looked up now show a rapidly improving trend, so I don’t really get your final point.

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

A carbon tax is the most important of the technology-neutral policies I argue for here. Such a tax is all that is needed to deploy the full might of free market capitalism to decarbonize the economy. Essentially everyone agrees that it is the most efficient pathway at our disposal.

I sincerely hope it is clear by this stage that advocacy for a carbon tax has a much higher chance of actually getting results than advocacy for nuclear technology-forcing. There are two things that all broadly recognized global energy roadmaps have in common: nuclear will make only a small medium-term contribution and a large carbon tax is mandatory for achieving the 2 deg C carbon budget.

On a related note, what was the philosophy behind building a massive nuclear fleet because France does not have oil? Nuclear does not help to alleviate oil dependence.

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

It is always interesting how some wind/solar proponents highlight the modular simplicity of distributed systems, while others promote the construction of massive international supergrids. I don’t think we need to repeat the usual cost/complexity trade-off arguments of the HVDC supergrid solution here though.

Did CCS really get the same feed-in tariff opportunity as solar? I was not aware of that. This would be surprising because I am sure that a €500/MWh feed-in tariff would have stimulated a lot of CCS deployment.

About economies of scale, I feel that technology-neutral policies can achieve the necessary cost reductions at least as efficiently as technology-forcing. Today’s large energy corporations have hundreds of billions in cash and equity reserves that can be deployed to scale up and optimize new technologies that have a high likelihood of paying back this investment in the future. As soon as a strong technology-neutral policy framework makes it clear that clean energy will be profitable in the medium-term future, a very wide range of clean energy technologies will be deployed and scaled-up at a very impressive rate using these cash reserves and massive equity inflows from capital markets.

I agree about the advantage of short construction times and the modular nature of wind and solar. This is especially an important advantage over nuclear. But still, for the same up-front investment, a rapidly growing developing country can get 3-5x more electricity in a given year from coal/gas than from solar/wind. This is of critical importance when the electricity supply must be rapidly expanded to support economic development. And yes, the simplicity of wind/solar expansion only lasts until 10-20% market share when large and complex grid expansion projects become mandatory.

Bas Gresnigt's picture
Bas Gresnigt on April 24, 2018

60% wind capacity factors may be possible in isolated cases. However, the global average wind capacity factor remains about 25%

That 60% will be in the North Sea near the place where older wind farms have capacity factors of less than 30%.
No special steady wind, as in the plains in USA or at the Maroc coast, involved.

It’s a matter of improving wind turbine / wind farm technology.
– The involved wind turbines are bigger; 12-16MW, hence also higher = more and more steady wind.
– Relative to the power they deliver the blades are longer, so they reach max. output earlier.
– Better measurements & controls at wind farm level and outside, imply that turbines can anticipate on wind changes.

Bob Meinetz's picture
Bob Meinetz on April 24, 2018

Schalk, whether advocacy for a carbon tax has a much higher chance of getting results is pure speculation. A true revenue-neutral carbon tax would be effective in the U.S., but here the full might of free market capitalism doesn’t care whether energy comes from gasoline, from nuclear, from solar, from coal, or from hamster wheels, as long as it’s cheap. Since the Great Depression, self-interest has predictably hobbled any attempt to benefit long-term, public interest if it will cost the selves who are paying for it one thin dime more than they’re paying now.

There are two things that all broadly recognized global energy roadmaps have in common: nuclear will make only a small medium-term contribution and a large carbon tax is mandatory for achieving the 2 deg C carbon budget.

The Intergovernmental Panel on Climate Change disagrees with you You’ll note IPCC’s AR5 assigns to nuclear energy the most prevalent role in zero-carbon electricity generation, in 2050, for both high- and low-energy demand mitigation scenarios which are “at least about as likely as not to limit warming to 2°C above pre-industrial levels”:
http://thorium-now.org/images/ipcc_ar5_nuclear.jpg

In 1973 most French electricity was generated by burning imported oil. So yes, nuclear did help to alleviate oil dependence, and will continue to do so as electric vehicles replace internal-combustion models.

Engineer- Poet's picture
Engineer- Poet on April 24, 2018

I sincerely hope it is clear by this stage that advocacy for a carbon tax has a much higher chance of actually getting results than advocacy for nuclear technology-forcing.

Yes and no.  It’s a good stealth approach for the public, but the fossil lobbies are acutely aware of the lifeline that a carbon tax throws to nuclear energy and they will fight it tooth and nail.  Citizens Climate Lobby has been pushing it for years and gotten nowhere AFAICS.

A moderate carbon tax would have increased the price of gas-fired power enough to save all the US plants which have closed in the last 10 years, with the possible exception of San Onofre.  It would guarantee a floor price under gas-fired power and make AP1000 builds much more attractive.  Regardless of what the players say, they act as if nuclear is the threat and carbon taxes are its enabling power; Shell has been fully clued-in for 3 decades and it’s certain everyone else was and is too.

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

Well, if you simply add up the numbers in the IPCC graph, you will see that the median estimates give 14% nuclear in the low energy demand scenario and 18% nuclear in the high energy demand scenario. From current levels, this implies a very slow growth rate of 1-2% of electricity share per decade. This is exactly what I meant by small (albeit not negligible) contribution. For perspective, wind and solar currently supply half of the electricity from nuclear, but the expectation is that wind and solar will supply double the electricity from nuclear by 2050 – a rather dramatic turnaround.

Ah, thanks. That is good to know about French oil-fired electricity in the old days. Makes sense.

Schalk Cloete's picture
Schalk Cloete on April 24, 2018

True, technology-forcing has achieved impressive investment rates in renewables. Despite these trends though, fossil fuels again quietly accounted for 70% of energy growth last year. This is how it is. Wind and solar make all the noise, but, in the absence of technology neutral policies, fossil fuels will just keep on growing quietly in the background.

It is certainly true that wind and solar are simple to expand for the first couple of percentage points of market share. I’m fully supportive of low penetration wind and solar deployment in regions with good resources. After that, however, efficient integration requires grid expansion and management projects of scale and complexity that dwarfs the construction and connection of centralized power plants.

Engineer- Poet's picture
Engineer- Poet on April 24, 2018

I sincerely hope it is clear by this stage that advocacy for a carbon tax has a much higher chance of actually getting results than advocacy for nuclear technology-forcing.

Yes and no.  It’s a good stealth approach, but the fossil lobbies are acutely aware of the lifeline that a carbon tax throws to nuclear energy and they will fight it tooth and nail.  Citizens Climate Lobby has been pushing it for years and gotten nowhere AFAICS.

A moderate carbon tax would have increased the price of gas-fired power enough to save all the US nuclear plants which have closed in the last 10 years, with the possible exception of San Onofre.  It would guarantee a floor price under gas-fired power and make AP1000 builds much more attractive.  Regardless of what the players say, they act as if nuclear is the threat and carbon taxes are its enabling power; Shell has been fully clued-in for 3 decades and it’s certain everyone else was and is too.

what was the philosophy behind building a massive nuclear fleet because France does not have oil? Nuclear does not help to alleviate oil dependence.

Have you no knowledge of history?  The French grid ran largely on oil immediately before the OPEC price shocks (as did about 15% of the US grid in 1975).  The rapid nuclearization (both French and US) eliminated that dependency.  France made a mistake by not taking it to the next level and going PHEV (which was feasible even with lead-acid batteries), but that detail wasn’t so easy to foresee 40+ years ago.

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 24, 2018

Bas,

The point is that Germans are failing to cut emissions. As are the Dutch. And they will miss targets in the future for exactly the reasons Schalk pointed out in his article.

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 25, 2018

Bas,

There is a considerable gap between what you say and what is happening. Take the Netherlands for example, situated at the North Sea.

The Dutch have around 1 GW of off shore wind. They have plans to have 11 GW by 2030. It will cover probably 30-40 % of the electricity consumption if built. No capacity for PtG there… the Dutch will still depend on fossil fuels for backup and the rest of their electricity supply.

Of course, electricity covers only 20% of Dutch energy consumption. The rest is covered by fossil fuels.

As far as the published strategies go, both Germany and the Netherlands will remain climate laggards, thanks to their plans to depend on wind, solar and fossil fuels.

Helmut Frik's picture
Helmut Frik on April 25, 2018

It did not get the same feed in tarif, because this would not have made any sense because CCS is not about developing a whole coal power plant supply chain, but to develop the component CCS for Coal power plants. So they received project related funds, to see how it works and if it works. It worked much worse than expected, and expectations have been already low. It is out of question now, because today even new coal power stations without CCS are not competitive any more on the market, so coal power stations with CCS are even lesss competitive. It was prooven to be a dead end, and abandoned. But it received a fair chance to proove it works.

Abot CO2 pricing: I think after removing the hen and egg problem produced by the economy of scale, CO2 pricing is a very good tool to accelerate the development of CO2 neutral technologies. But it is unable to remove the henn and egg problem at the beginning of new technologies which do more or less the same as existing technologies.

About building Coal / Gas power stations in developing countries: Do not forget that to build a coal power station in the middle of africa, you also have to build railroads, channels, roads, water pipelines and a hell of other infrastructure before the power plant can start operation. Which excludes this technologies in the most places away from the coast. To start producing powerwith solar panels, connected to the main grid with 20kV, in the worst case access with a mule will do. To produce power with a second hand wind turbine from Europe access by a dirt road with a 4×4 truck (20t) will do as well. Imagine how much more places in developing countries are accessible by dirt tracks than by full blown main railroad lines able to carry many million tons of coal per year.

Large and “complex” grid expansions are not complex. They are mainly just big – and not big in comparison wih the build up of a fossil fuel based power generation. Main power lines can easily be built in areas with access only by 4×4 all terrain trucks every few hundred meters, this has been proven in all countries so far. To build this no other transportation infrastructure is needed than dirt tracks. Only the main transformer stations need a good transportation infrastructure, but they are located at bigger cities, where this transportation infrastructure (full blown roads so the transformers can be transported) exists in such places even in developing countries, and this infrastructure is still mucch much smaller than the infrastructur needs to get a coal power station running.
Because of this the developing countries where I have been the recent years have abandoned the build out of fossil fuel plants. (not all developing countries did so so far, but there is a clear tendency everywhere to do so)

Bas Gresnigt's picture
Bas Gresnigt on April 25, 2018

These power plants forced diesel generated electricity out of the villages of Kashmir and, I presume, near all India.*) Those operate so well that some villages no longer wanted to be connected to the grid…
They had/have their own micro-grid which cost them substantial less.

They are the basis for the decision of Mody (the prime minister) to slash the expansion of nuclear and to pursue less coal (coal is becoming more expensive in India than wind & solar).
______
*) I was ~6 weeks in the area ~1990. Then villages had a noisy diesel generator which started at dark (18.00hrs) and ran until ~22hhrs. When I traveled there again ~5yrs ago, those were all gone. Replaced by solar.

Btw.
Truck batteries are 24V.
Don’t understand how you came to your idea “charged by fossil fuels”?
It was charged by the small solar panel you see on the picture. The land lady had no fossil generator.

There is a paradigm change regarding electricity generation ongoing!

Helmut Frik's picture
Helmut Frik on April 25, 2018

Here example for Africa: http://www.zda.org.zm/?q=content/zambia-triple-power-generation-two-years-solar
Look in the article if you can find any plans for “coal” “gas” or “oil”.

Bas Gresnigt's picture
Bas Gresnigt on April 25, 2018

My problem with CCS:
What is stored somewhere (deep in the ground) will come out again in the future.*)

So we shift the burden to our grand-/grand-children.
Not a decent way to handle things.

_____
*) Recently demonstrated by the nuclear waste store 600meter below the surface in the old salt mine “Asse 2”, which would have extreme stable salt layers according to the “experts”.

Bas Gresnigt's picture
Bas Gresnigt on April 25, 2018

Your 70% refers to all energy. The next field that cheap renewable (mainly wind & solar) will crush.

You can see the fist moves in that direction when you study the German pilots described in the project map to which you can link via this page.

Integration cost restricting expansion wind & solar?
There is a lot of debate about the integration costs of high shares of wind & solar with extreme points of view. The topic played already a role in the discussion about the Energiewende in the nineties. Recently German think tank Agora organized expert discussion rounds in Berlin and Paris. Resulting in this report.*)

It indicates that total integration costs for the German power system with a 50% share of wind & solar could range between 5 to 20 EUR/MWh. While it didn’t consider coming offshore wind with its extreme high CF’s.
So no stumbling block for high shares of wind & solar.
_____
*) Note that one of the biggest champions of your point of view, Lion Hirth, was invited for the expert discussion rounds and advised about the report (stated at page 2).
As Vattenfall employee Lion Hirth published simulation studies which support Vattenfall’s business.

Mark Heslep's picture
Mark Heslep on April 25, 2018

As of 2018, the French government has no plans to close a single nuclear reactor for policy reasons.

Jarmo Mikkonen's picture
Jarmo Mikkonen on April 25, 2018

Helmut,

your piece of news is funny. Zambia, which has 2000 MW of generating power, will add 4000 MW of solar in two years. No investors named, no sites, no companies, no suppliers.

Try this one instead:

Indian solar engineering, procurement and construction contractor Sterling and Wilson has been selected by French renewables developer Neoen to build a 54.3-MWp solar park in Zambia.

The project, which is being developed under the World Bank Group’s Scaling Solar programme, will be Zambia’s first utility-scale solar power plant.
https://www.lusakatimes.com/2018/02/08/sterling-wilson-build-zambias-largest-solar-plant/

Mark Heslep's picture
Mark Heslep on April 25, 2018

“…From current levels, this implies a very slow growth rate of 1-2% of electricity share per decade. …”

This is a politically driven figure and the earlier history of nuclear power in the US shows a much higher growth rate is possible. In the early years of the US industry, nuclear obtained 10% of US generation over a sub decade with no urgency. The French nuclear industry grew faster still.

Mark Heslep's picture
Mark Heslep on April 25, 2018

As of this year, 13 coal plants are under construction in Africa, most of them in S. Africa and Botswana. Another 50 or 60 are planned or permitted, with Tanzania planning the most.

The political cost to more coal emissions is reduced with every false, ‘there-is-no-coal’ narrative like yours above.

Mark Heslep's picture
Mark Heslep on April 25, 2018

New coal by country:

https://docs.google.com/spreadsheets/d/1JKJJa-jwK6YpkEQKP2bcENHR2yoS40ur8baQnIXHtIU/edit?usp=sharing

Bas Gresnigt's picture
Bas Gresnigt on April 25, 2018

Your conclusion is probably right for Netherlands but for sure not for the Germany. Everybody is enjoying the price decreases they reached by forcing a mass market for solar and wind.

Of course they also had their failures such as their stimulation of biomass in the hope it would become cheaper, which didn’t work.

On the other side my govt does it even more stupid.
They just started with high subsidies to burn US wood in a few of our coal plants. We have only 5 left.
The most modern plants use the circulating fluidized bed process which allow to burn also wood.
So the utilities lobbied at govt. in order to give their plants some future. And my govt acted chicken like…

Bob Meinetz's picture
Bob Meinetz on April 25, 2018

“Replaced by solar?” Bas, please, The idea any diesel generators in Kashmir were replaced by solar is absurd.

The 3 sqft solar panel in your photograph, under ideal conditions, is capable of generating 15 watts of DC power. Or, with a generous, Californian capacity factor of 20%, 3 watts. Charging a 24V, 120Ah truck battery using a 3-watt source of DC power would take 5 weeks.

If your “land lady” was lucky enough to have a 1,500-watt hot plate to cook food for her family, her fully-charged truck battery would power it for roughly 2 hours – maybe, four meals. Four hot meals every five weeks, with no lights, no cellphones, no refrigeration, no electric pumps to bring her family fresh water should keep ‘em happy. Shouldn’t it?

Again – go stay at the “Hotel New York” for a year or two, then get back to us with how useful intermittent, unreliable, meager solar PV can be. Because right now you have no clue.

Bas Gresnigt's picture
Bas Gresnigt on April 25, 2018

Jarmo,
Germany makes good progress with their Energiewende while its prime target is to move all nuclear out! German emissions:
year ; renewable share; emissions
1990 ; 4% ; 761 gCO²/KWh
2000 ; 7% ; 640 gCO²/KWh
2010 ; 17%; 558 gCO²/KWh
2017 ; 33%; 510 gCO²/KWh*)

Of course emission reduction will go much faster when all nuclear is out, which occurs at the end of 2022. It’s a matter of priority, the most dangerous should be removed first.
________
*) Extrapolation based on renewable increase, etc.
Figures from AGEB and UBA

Schalk Cloete's picture
Schalk Cloete on April 25, 2018

The cost of hydrogen from PEM electrolysis (Capital cost: €700/kW, average off-peak electricity cost €20/MWh, capacity factor: 20%, discount rate: 6%, total efficiency: 65%, lifetime: 20 years) would be €66/MWh of H2 (more with O&M costs and H2 storage costs). Cost of natural gas: about €20/MWh. Please explain to me how PtG from off-peak wind & solar will “crush” fossil fuels in an open market.

Whenever I get frustrated with the scientific peer-review system, it is nice to see this kind of report to remind me why the system exists. The biggest integration cost of wind/solar is the utilization effect, which the report acknowledges was a point of significant disagreement between experts, but then proceeds to make quantifications based on rather simplistic hand calculations anyway.

Lion Hirth’s quantification of integration costs is based on a peer-reviewed full system model of the North European power system. His work follows the full system cost approach recommended (but not actually utilized) in the report. His peer-reviewed papers are therefore much more trustworthy than this report.

Besides, thus far the real-world data from Germany is matching his modeled value decline predictions very well. This was verified up to 2013 in his paper I used in my previous article on wind/solar value decline (figure 4 here). The 2016 value factor datapoints continue to line up well (slide 17 here).

Schalk Cloete's picture
Schalk Cloete on April 25, 2018

Do you have some links with detail about the early support for CCS? Obviously, it is much more difficult to prove that CCS “works” than to prove that solar PV “works”, so I would like to see how this decision was made.

Initial coal plants in a poor country will naturally be built close to the local coal mining operation to minimize practical challenges. One such plant can provide 3x the power from a similar investment in wind/solar and do so on demand, while neighbouring coal-fired iron/steel and cement plants provide the building blocks for economic development.

Note that the low-tech rural model based on distributed renewable generation is simply not a viable option for most developing nations, especially Africa. The African population is set to quadruple over the course of this century, and it already struggles to feed itself. If Africa cannot achieve a China-like productivity boom, this will end very badly.

Germany seems to be having some problems with the “not complex” task of grid expansion to accommodate wind & solar. As a result, grid-related costs are rising rapidly (already €13/MWh). See how Germany is lagging grid expansion and interconnections in this Energiewende tracker. If Germany is having problems with this, imagine the issues in an underdeveloped economy. Even mighty China continues to battle with large wind/solar curtailment due to grid weaknesses even though wind/solar market shares are still very small.

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