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Phasing Out Fossil Fuels for Renewables May Not Be a Straightforward Swap

renewables photo Daniel ParksTo have any chance of preventing dangerous climate change, the world needs to reduce greenhouse gas emissions to net zero or even negative by mid-century. Many experts suggest this means we need to completely phase out fossil fuels and replace them with renewable energy sources such as solar and wind. But according to Anthony James, lecturer with the National Centre for Sustainability, Swinburne University of Technology in Australia, new modelling shows that things are not that simple: complementary  approaches, including greatly reducing energy demand, will be needed.

Several studies have concluded that 100% renewable energy supply systems are technically and economically feasible. This informs the widespread view that fossil fuels can be more or less “swapped out” for renewables, without significant economic consequences.

We are strongly sympathetic to the need for a rapid global shift away from fossil fuels. But new modelling conducted independently and made publicly available by my colleague at the Understandascope, Josh Floyd, suggests that such a transition may face significant challenges.

Future energy

Analyses of how to get to 100% renewable energy typically look at how future energy sources can supply enough energy to meet a given future demand.

This is what’s known as an “energy balance”. The high-quality work of Mark Diesendorf and his colleagues on the transition of Australia’s electricity supply to 100% renewables typifies such modelling.

But this approach doesn’t tell us what will happen to overall energy supply during the transition.

A rapid, large-scale energy transition creates extra demands for energy services. This demand will compete with other economic activity

This new modelling suggests a significant decline in availability of overall energy services during the transition phase. This reflects the increased energy demand associated with the transition task itself.

Such an energy “trough” would significantly impact the economy during the transition. This has flow-on consequences for how to maintain the massive renewables roll-out.

What are net energy services?

To investigate what might happen to energy availability during transition, the model looks at “net energy services” at a global scale.

Net energy services are the total work and heat that energy sources – for instance solar photovoltaic (PV) systems or petroleum – make available to end users, minus the energy services required to provide that supply.

Petroleum requires energy services to find, produce, transport and refine it. Solar PV systems require energy services for mining raw materials, manufacturing, installation, replacement and so on. The net services are what remains available for all other purposes, such as heating buildings and moving goods and people.

A rapid, large-scale energy transition creates extra demands for energy services. This demand will compete with other economic activity.

The speed of transition matters

To start with, the model assumes that fossil fuels are phased out over about 50 years. Biomass, hydro and nuclear contributions are assumed roughly to double.

The model then attempts to maintain the net energy services to the global economy at the maximum level before the fossil fuel phase-out. To do this it uses electricity from onshore wind turbines and large-scale solar PV plants, buffered with lithium ion batteries.

The findings show that the faster the transition rate, the greater the energy services required by the transition task, and the lower the services available for other uses

If less energy services are available, then energy transition will come at the expense of other economic activity. That may impact the collective will to continue

This is because of the time lag between energy investments and returns. It is exacerbated for sources where up-front energy investment is a relatively high proportion of the total life cycle, particularly so for solar PV.

A 50-year fossil-fuel phase-out represents a relatively modest transition rate. Even so, in the model’s baseline scenario, net energy services decline during that transition period by more than 15% before recovering.

And that recovery is not certain. The model doesn’t consider how this decline in energy services might affect the transition effort. If less energy services are available, then energy transition will come at the expense of other economic activity. That may impact the collective will to continue.

The cost of transition

In the model’s baseline scenario – phasing out fossil fuels over 50 years – wind and solar plants need to be installed at eight to ten times current rates by 2035.

Financially, this corresponds with capital investment in wind and solar PV plants plus batteries of around US$3 trillion per year (in 2015 dollars) and average lifetime capital cost in the order of US$5 trillion to US$6 trillion per year.

For comparison, in 2014 the International Energy Agency forecast global investment for all energy supply in 2035 at US$2 trillion per year.

This implies that total expenditure on energy supply will increase its share of world spending, reducing scope for other expenditure. Compounding the decline in energy services during transition, this has potential to apply contractionary pressure to the global economy. This has implications in turn for financing and maintaining the political will for the renewables rollout.

What if it were possible to roll out renewables even faster? This could reduce the depth and duration of the decline, but not eliminate it. Again, due to the time lags involved, accelerating deployment in the short term takes energy services away, rather than adding them.

What does this mean?

Of course, this is “just” modelling. But good models can tell us a lot about the real world. If this modelling is right, and energy services fall and costs rise, we’ll have to complement building cleaner energy supply with other approaches.

The other key aspect of transition that we have control over is how much energy we expect to use. Usually discussions of transition focus on maintaining energy supply sufficient for a growing economy much like we see today – just with “clean” energy. But this is changing.

This is about more than efficiency. It is about a shift in our collective priorities and how we define progress, wellbeing and quality of living

Growing numbers of analystsbusiness leaders and other prominent figures are calling for broader cultural change, as it becomes clearer that technological change alone is not enough to avoid climate catastrophe and myriad other consequences of energy-intensive consumer societies.

This is about more than efficiency. It is about a shift in our collective priorities and how we define progress, wellbeing and quality of living. Reducing energy demand within these redefined aspirations will markedly improve our prospects for successful transition.

This article was co-authored by Josh Floyd, advisor on energy, systems and societal futures at independent research and education organisation the Understandascope, and founding partner of the Centre for Australian Foresight. It was first published on The Conversation and is republished here with permission.

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Nathan Wilson's picture
Nathan Wilson on May 6, 2016

“…it becomes clearer that technological change alone is not enough to avoid climate catastrophe…”
That is certainly true when the only energy technology options are renewables. The nuclear-rich option does not have this problem. Because nuclear plants can provide electricity and low cost heat anytime we want them, and make reasonably priced fuel when power demand is low, nukes can allow the entire world population to enjoy the same energy-rich lifestyle that we in developed countries have taken for granted. All without polluting the air or water.

Conservation and sacrifice are certainly noble goals. But let’s not gamble the planet on that strategy.

Hops Gegangen's picture
Hops Gegangen on May 8, 2016

“… the entire world population … ”

But there’s the trouble with nuclear as presently conceived. There are places we consider too extremist to have nuclear such as Iran, and places that are too unstable to trust that a government collapse won’t leave nuclear materials in the hands of terrorists.

I think a paradigm change is needed to move away from putting reactors everywhere and near population centers to putting them on ships to generate hydrogen or methane for delivery around the world. Then you can lower safety standards and avoid legal and regulatory hangups.

If methane could be generated from water and CO2 then used in something like that fuel cell Exxon is investing in and the CO2 sequestered, it could even be carbon negative. You can also use the existing methane delivery infrastructure.

Roger Arnold's picture
Roger Arnold on May 9, 2016

Conservation and sacrifice are certainly noble goals. But let’s not gamble the planet on that strategy.

Well I can certainly agree with that statement. Not just the statement itself, but the outlook behind it. Hedging bets, when possible, is good, and so is diversity!
Which is why I get impatient with a lot of the “X is the only way” commentary here. There are almost always multiple options and complex trade-offs among them. It usually comes down to issues of economics.

It’s disingenuous, in my opinion, to flatly state that “nuclear plants can provide electricity and low cost heat anytime we want them”. Nuclear plants have almost the same need for energy storage and an array of tools for balancing generation and demand that wind and solar have. Not because of the bugaboo that “nuclear is baseload only and can’t do load following”; that’s false, as I’m sure you (Nathan) appreciate. But curtailing output from a nuclear plant to match demand has economic consequences. They’re not fundamentally different than the consequences of curtailing surplus output from wind and solar resources. In either case it involves operating a resource at a lower capacity factor than it could otherwise deliver. That translates to higher capital cost per kilowatt-hour of output. That’s not a fatal problem, it just needs to be recognized and factored in as part of the analysis.

Similar considerations apply to other strategies. Operating a nuclear plant at its full rated capacity and using surplus power to make synthetic fuel when demand is low is a fine strategy. It should probably be encouraged. But electrolysis units have their own rather high capital cost, and operating them at a low CF when power happens to be available increases the capital cost for the fuel produced.

All I’m saying is that there are no magic bullets, and no free lunch. Some bullets do cost less than others or have fewer negative consequences. It’s important to understand as much as possible what the trade-offs are, and to recognize that we are sometimes wrong and can’t foresee all contingencies. And that gets us back to the virtue of hedging bets and embracing diversity.

Engineer- Poet's picture
Engineer- Poet on May 9, 2016

It’s disingenuous, in my opinion, to flatly state that “nuclear plants can provide electricity and low cost heat anytime we want them”.

Eh, what?!  “Disingenuous”?  Nuclear power can supply heat at any time of day, under any climactic or weather conditions, period.  Conversion to electricity depends on the specifics of the heat engine.  This is a provable fact.

Nuclear plants have almost the same need for energy storage and an array of tools for balancing generation and demand that wind and solar have.

Is that so?  Tell me, can nuclear power go away for hours or days at a time at the whim of natural ebbs and flows?  Can all the nuclear plants over a range of several states simply quit producing for a couple of weeks because the atoms stop fissioning?  That’s what the wind over the entire BPA service area did, and will do again.

To believe that nuclear energy is subject to the same vagaries is beyond silly, it is delusional.  Nobody who believes such should receive a response other than derisive laughter.  That is the BEST you deserve.

Roger Arnold's picture
Roger Arnold on May 10, 2016

To believe that nuclear energy is subject to the same vagaries is beyond silly, it is delusional. Nobody who believes such should receive a response other than derisive laughter. That is the BEST you deserve.

Hmm, I don’t know if the phrase is even used any more, and I’m perhaps showing my age in using it — but it sounds to me like somebody woke up on the wrong side of the bed this morning.

Where exactly did I assert that nuclear energy “is subject to the same vagaries” as wind and solar? All I said is that it has “almost the same need” for energy storage or other tools for balancing generation and demand.

In one case, the need derives from the vagaries of supply, in the other, the vagaries of demand. But in either case, the system needs similar provisions for balancing. The same options for doing so are in the tool kit: overbuilt capacity with curtailment, load regulation, energy storage, and dispatched generation from stored fuel. “Stored fuel” can include water stored in the reservoir behind a hydroelectric dam, or the chemical potential energy in a charged storage battery. Each option has its own costs and issues that go with it. The choices that are appropriate will depend on local considerations and resources.

I’m certainly not saying that there’s no difference at all between accommodation of variable demand given a reliable supply, and accommodation to a variable (but reasonably predictable) supply. If one stupidly insists on a “monoculture” for carbon-free power generation, then a monoculture of nuclear power is obviously easier to manage than a monoculture of wind and solar. For one thing, you don’t have to deal with large, long duration seasonal variations of supply. But we don’t have a power generation monoculture, and why should we seek to create one?

What I consider disingenuous is to portray nuclear power as if it disposes of balancing issues at no added cost. Power and low grade heat “whenever you want it”? Sure, but if you want that feature from the nuclear plant alone, you’ll pay a high price for it. You’ll have to build twice the capacity you might otherwise need. Since nuclear power is dominated by the cost of capital, insensitive to the cost of fuel, that approach would nearly double the cost of electricity.

Obviously there are better approaches. From an economic perspective, what one wants are dispatchable loads, for applications dominated by the marginal cost of electricity. But dispatchable loads that work for nuclear also work for wind and solar.

Engineer- Poet's picture
Engineer- Poet on May 11, 2016

Where exactly did I assert that nuclear energy “is subject to the same vagaries” as wind and solar? All I said is that it has “almost the same need” for energy storage

The first is implicit in the second.  For nuclear, you need a few hours of storage to capture most of the daily demand cycle without throttling the reactor.  For wind, you need weeks.  Calling this “almost the same” is ridiculous; believing it is delusional.

In one case, the need derives from the vagaries of supply, in the other, the vagaries of demand.

The vagaries of demand don’t go away just because the RE supply is unreliable.  Often they track opposite to each other, such as the demand for space heat.

Power and low grade heat “whenever you want it”? Sure, but if you want that feature from the nuclear plant alone, you’ll pay a high price for it.

One of the design applications of the SLOWPOKE reactor was space heat and DHW for larger facilities, like apartment buildings.  The reactor controls its own power output passively; stop removing heat and the chain reaction stops.  “Whenever you want it” is accurate.

What I consider disingenuous is to portray nuclear power as if it disposes of balancing issues at no added cost.

Whereas anyone who proposes “renewables” as a solution to balancing costs must be considered a bare-faced liar.  The evidence is so conclusive that anyone holding that position cannot claim even the benefit of the doubt.

From an economic perspective, what one wants are dispatchable loads

Oh, indeed.  I suggest thermal rather than electrical loads.  Sub-critical hot water has a great many uses, but the hydrothermal cracking of lignocellulose to simple sugars and oligomers seems like one of the best.  Stripping most of the organic stuff out of municipal solid waste would stabilize it and perhaps allow recycling of much more of it than currently.  Once you have a bunch of sugars and short polysaccharides, you can ferment them.  Heat again comes into play to distill weak alcohol solutions.  Voila, dispatchable load… that converts a waste disposal problem into a “renewable fuel”.

Neither wind nor PV can do anything like this.  They are objectively less capable of addressing our true environmental issues.

Nathan Wilson's picture
Nathan Wilson on May 12, 2016

Roger, I agree with your observation that nuclear, wind, and solar share a need to ” balancing generation and demand”. However, the extent of that need is so different that I reject your conclusion.

I gave the brief version of “nuclear is easier”, but the longer version I often use is that for a given amount of storage, transmission, demand response, and dispatchable load (all of which increase cost and/or incur public resistance), a wind rich grid will have double or triple the fossil fuel consumption and resulting emissions compared to one which is rich in nuclear (e.g. 50% non-fossil with wind+solar+hydro or 80% non-fossil with nuclear+solar+hydro).

It is not one source of variation or the other, demand only varies modestly from baseload; renewables have variation in generation in addition to demand, plus wind power is usually anti-correlated with demand both for day/night and seasonally. In contrast nuclear is seasonally correlated with demand (due to scheduled maintenance). In all northern areas, solar is seasonally anti-correlated with demand.

I agree that a mixed portfolio is technically preferable to a mono-culture. However, it seems politically impossible to deploy one unit of renewable energy generation without locking-out 2 or 3 units of nuclear energy (and locking-in 2 or 3 units of fossil fuel energy), i.e. via market & subsidy design plus the PR benefits to anti-nuclear advocacy.

Bob Meinetz's picture
Bob Meinetz on May 13, 2016

Hops, though China is in the process of testing your nuclear-ships hypothesis for the islands it’s building in the South China Sea, as a source of electricity for developing countries that approach will be punished by cost – governments won’t care enough about climate change to abandon coal on its behalf.

I remain unconvinced that Exxon-Mobil cares enough about climate change to generate synfuel with nuclear energy, even with their existing distribution infrastructure. Their existing extraction infrastructure makes it too costly in comparison..

We’ve only scratched the surface of ways to generate electricity from nuclear fission. Molten salt breader reactors could make proliferation attempts unjustifiably dangerous/effort-intensive, and largely unexplored are ways to use suburanic, radioactive isotopes as fuel – ones entirely capable of generating low-grade heat to boil water, but entirely unsuitable for bomb design.

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