The Stuttering Energy Transition: Fishing in Maine

As we approached the new year, I started to describe the global energy transition that’s been taking place, which we hope will take us away from fossil fuels and closer to non-carbon-based energy sources. My plan was to study the efforts of a few key countries, each of which serves as a potential example from which the rest of us can learn; I started that series of blogs with a look at Germany’s main steps  (December 9 – 30, 2014). All of these efforts are largely targeted toward the meeting that will take place in Paris, in December of 2015, where a global agreement regarding such approaches will be discussed. As often happens with any plan, however, reality interfered, so I am pausing from that train of thought – in this case the distraction came, in the form of a short New York Times article about a conflict between two groups of people in the state of Maine.

PORTLAND, Me. — In the vast gulf that arcs from Massachusetts’s shores to Canada’s Bay of Fundy, cod was once king. It paid for fishermen’s boats, fed their families and put their children through college. In one halcyon year in the mid-1980s, the codfish catch reached 25,000 tons.

Today, the cod population has collapsed. Last month, regulators effectively banned fishing for six months while they pondered what to do, and next year, fishermen will be allowed to catch just a quarter of what they could before the ban.

But a fix may not be easy. The Gulf of Maine’s waters are warming — faster than almost any ocean waters on earth, scientists say — and fish are voting with their fins for cooler places to live. That is upending an ecosystem and the fishing industry that depends on it.

Regulators this month canceled the Maine shrimp catch for the second straight year, in no small part because shrimp are fleeing for colder climes. Maine lobsters are booming, but even so, the most productive lobster fishery has shifted as much as 50 miles up the coast in the last 40 years. Black sea bass, southerly fish seldom seen here before, have become so common that this year, Maine officials moved to regulate their catch. Blue crab, a signature species in Maryland’s Chesapeake Bay, are turning up off Portland.

In decades past, the gulf had warmed on average by about one degree every 21 years. In the last decade, the average has been one degree every two years. “What we’re experiencing is a warming that very few ocean ecosystems have ever experienced,” said Andrew J. Pershing, the chief scientific officer for the Gulf of Maine Research Institute here.

Joe Orlando, 60, who fishes from a Gloucester, Mass., base, said the effect of the ban was terrifying. “It’s completely, completely over,” he said. “I got a house, kids, payments.”

But many other fishermen do not blame climate change. They blame the regulators, calling the moratorium cruel and needless, because they say their latest cod catches are actually better than in recent years. More than a few talk of a conspiracy between scientists and environmentalists to manufacture a fishing crisis that will justify their jobs.

Scientists say the truth is more prosaic: Although the gulf is generally warming — 2012 was the hottest year on record — the last year was cooler, and kinder to cod. Moreover, the gulf’s remaining cod have congregated in deeper, colder waters in southern Maine and Massachusetts, where their abundance masks their scarcity elsewhere.

“A fisherman’s job isn’t to get an unbiased estimate of abundance. It’s to catch fish,” said Michael Fogarty, the chief of the ecosystem assessment program at the Northeast Fisheries Science Center of the National Oceanic and Atmospheric Administration, the federal agency that monitors sea life. “The world they see is a different world than we see in the surveys.”

Two weeks later, another article appeared in the New York Times in the form of an Op-Ed that expanded the issue:

PORTSMOUTH, N.H. — IN November, regulators from the National Oceanic and Atmospheric Administration shut down recreational and commercial cod fishing in the Gulf of Maine, that enchanting arm of the coastal sea stretching east-northeast from Cape Cod. They did not have much choice: Federal law requires action to rebuild fish stocks when they are depleted, and recent surveys revealed cod populations to be at record lows, despite decades of regulations intended to restore them.

The fishery resources of the western Atlantic once seemed virtually limitless, with fish supposedly as numerous as grains of sand in the Sahara. And yet the current emergency effort to restore cod populations is simply the latest chapter in a 150-year saga in which fishermen, scientists, industrialists and politicians have consistently confronted emptier nets and fewer fish.

As early as the 1850s, fishermen from Maine and Massachusetts began to pester their governments to do something about declining cod catches. Those men fished with hooks and lines from small wooden sailboats and rowboats. Fearing “the material injury of the codfishing interests of this state” by increased fishing for menhaden, a critical forage fish for cod, fishermen from Gouldsboro, Me., implored the Legislature in 1857 to limit menhaden hauls.

Yet annual cod landings in the Gulf of Maine continued to slide, from about 70,000 metric tons in 1861 to about 54,000 metric tons in 1880, to about 20,000 tons in the 1920s, to just a few thousand metric tons in recent years. There have been a few upticks along the way, such as one bumper year in the mid-1980s when the cod catch reached 25,000 tons (due, in part, to an unnecessarily large expansion of the fishing fleet), but for the most part the trend has been noticeably downward since the era of the Civil War. There have been plenty of warnings along the way. Maine’s fishery commissioner, Edwin W. Gould, spoke out plainly in 1892. “It is the same old story,” he said. “The buffalo is gone; the whale is disappearing; the seal fishery is threatened with destruction.” For Mr. Gould, the path forward was clear: “Fish need protection.”

Maine is a small state (in terms of population and economic activity) with about 0.4% of the US population and 0.3% of its GDP. A reported clash between fishermen and regulators should not be big news. It might be big news if served as a laboratory for resolution of similar clashes in much larger setting.

I have two academic friends, both of whom are retired professors of history; they now split their lives between teaching in New York and vacationing in a cabin situated on the shores of a beautiful lake in Maine. The cabin is not connected to the electrical grid, but gets its electrical power from a small generator supplemented by a solar panel. When I was making a the movie, “Quest for Energy,” about a community of people living in the Sundarbans in India and their quest to transition their access to electrical power, I invited myself over to my friends’ cabin for a few days so I could learn the intricacies of living off the grid. Since then I have tried to visit for fun – instead of just for reasons relating to my work. My wife and I simply love their place (and their company) and we have great time there. Recently, I met up with them and showed them the article. I asked them what they think can be done to bridge the gap between the fishermen and the scientists (regulators); they told me to forget about it – such a thing will never happen. According to them, the fishermen want to keep guys like me (an academic from NY) as far away as possible from Maine and more specifically from Maine’s precious shoreline.

Maine is not indifferent to climate change. Here is what the Energy Information Administration (EIA) writes about environmental activities in Maine:

Quick Facts

  • The Port of Portland receives crude oil shipments that are transported by pipeline to refineries in Quebec and Ontario.
  • Maine is the only New England state in which industry is the largest energy consuming sector; the industrial sector accounted for 34% of energy consumed in 2011.
  • Maine had the lowest average electricity retail prices in New England at the end of 2013.
  • Virtually all of Maine’s net electricity generation comes from nonutility power producers.
  • In 2013, over half of Maine’s net electricity generation came from renewable energy resources, with about 29% from hydroelectricity, 25% from wood, and 7% from wind.

Maine: Profile Analysis

Hydroelectric dams and biomass from wood products provide almost half of Maine’s net electricity generation, the largest share from renewable sources in the eastern United States. Biomass alone accounts for more than one-fifth of generation, the largest share by far of any state, placing Maine among the top U.S. producers of electricity from wood and wood waste-derived fuels, such as wood pellets. The state has the highest generation per capita in the nation of electricity from biomass. Use of wood for home heating has grown in rural Maine as the price of home heating oil has risen.

Hydroelectric turbines produce nearly one-fourth of Maine’s net electricity generation, the largest share of any state east of the Mississippi. Water-powered mills were built on Maine’s numerous rivers to run its earliest industries, and when electricity became available in the late 1800s, small hydroelectric dams were built all over the state. By the mid-1980s, the state was home to 782 dams. A few have since been removed to restore natural river flows and fish migrations. Recently, Maine hydroelectric dam owners and conservationists have reached agreements to increase turbine generating capacity at some dams while tearing down others.

In 1999, as part of electricity market restructuring, Maine regulators set a Renewable Portfolio Standard (RPS) requiring that at least 30% of retail electricity sales come from renewable sources, although state electricity distributors had already surpassed that goal. Since then, the legislature has added a second, separate RPS that requires new renewable resources to supply increasing shares of electricity sales, topping out at 10% in 2017. New hydroelectric generators must be smaller than 100 megawatts to qualify under the second RPS. The state legislature has debated lifting that limit to allow more hydroelectricity imports from Canada.

Most new renewable generating facilities planned in New England are wind-powered. Maine has significant wind resources along crests of Appalachian ranges in the state’s northwest and along its Atlantic coastline. The Maine legislature has set goals of installing 2,000 megawatts of wind capacity in the state by 2015; 3,000 megawatts by 2020, with at least 300 megawatts offshore; and 8,000 megawatts by 2030, with at least 5,000 megawatts offshore. Wind energy has been gaining net electricity generating share in Maine rapidly in recent years, with more than a dozen projects coming on line. The state leads New England in wind generation. The first application for wind turbines in federal waters off Maine was filed in 2011. Also on the Maine coast is the first U.S. tidal power generating facility to produce electricity, a pilot project in Cobscook Bay. Because of concerns about the cost of new technologies, New England governors are exploring regional procurement of renewable resources, primarily wind, to meet state RPS goals more economically.

So what can be done to make the fishermen and scientists talk with each other? My first thought was of Katherine Hayhoe. I wrote about her efforts in my April 22, 2014 blog when I described the TV program “Years of Living Dangerously.” Don Cheadle, who narrated the first episode of the program, showed the difference in response to the droughts in both Texas and California. In California, common belief seems to be that climate change is an important contributor to the cause, while in Texas they believe that the droughts are an act of God. Cheadle went to Texas to interview Katherine Hayhoe, an atmospheric scientist and devout evangelist, who joins the evangelists in their prayers but explains that there is no contradiction between believing in both God and science (The Pope is now strongly presenting the same view). Through her efforts, much of the audience was listening and starting to believe that anthropogenic climate change has something to do with the drought and that we can do something to mitigate it.

How could a similar experience help in Maine? Any ideas? Stay tuned!

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The Stuttering Energy Transition and the Sharp Drop in Oil Price

Economically, the recent global event that has attracted everybody’s attention is the sharp and major decline in oil prices. Figure 1 shows the decline. I am writing this blog on Friday, January 9th, and the price of Brent Crude is $47/barrel – a drop of almost 60% in only six months! Consumers in many parts of the world are happy to pay much less for gasoline and heating oil; meanwhile, producers in countries such as Russia, Venezuela and Iran, which are heavily dependent on oil exports for balancing their budgets, are in bad shape.

Graph of Brent Crude Oil Prices for End of2014Figure 1 – The recent sharp drop in oil prices

Figure 2 shows the break-even prices for producing oil in various countries and regions. Countries such as Saudi Arabia, the United Arab Emirates and Kuwait are still making money, while shale producers in the US are losing money.

Crude Oil Cost of Production

Figure 2

Figure 3 shows the recent decline within the framework of oil price changes from 1947. However, almost all the arrows point to triggers for price increases, not decreases. Among such rapid price increases are those in the 1970s and ‘80s, which were triggered by major political changes such as the Yom Kippur War oil embargo, the Iranian Revolution and the Iran/Iraq War. The most recent increase, which started around the beginning of this century, was triggered mostly by economic forces; China’s increase in demand played a major role.

Oil Price Timeline starting 1947Figure 3

My main interest is on the effects the sharp decline in price has on the ongoing energy transition from fossil fuels to more sustainable energy resources. To evaluate the possible impact on the transition I have to introduce a new concept that I haven’t mentioned before: price elasticity of demand. Here is what I wrote about it in my book (Climate Change: The Fork at the End of Now; Momentum Press (2011)):

Price Elasticity:

Raising prices does not guarantee decreased use. The concept of price elasticity deals with the correlations between prices of products and services and the corresponding demand. Numerically it indicates the extent to which a 1% increase in price would affect the demand for a good or a service (measured in % compared with the base level). Estimates for gasoline price elasticity are widely, but in the United States they converge to a short- term elasticity at – 0.26 and a long- term elasticity at – 0.86. Based on these numbers, a 10% increase in price results in a 2.6% short- term decrease in the use of gasoline and an 8.6% decrease in long- term use. There are also indications that the elasticity varies between periods of rising and declining prices. Customers adapt faster in times of increasing prices as compared to periods of falling prices. The adjustment of consumers and industry to rising energy prices is one of the main driving forces to an increase in energy efficiency and a decrease in energy intensity, which plays such an important role in our attempt to maintain and increase our collective well- being during the transition period. Most differences in the short- term and long- term price elasticity result from the capital expenditures needed to adapt. As a business we will not invest heavily in research, development, or implementation of energy- saving policies if we believe the high prices are not here to stay, and as consumers we will not try to change our lifestyle through relocation to places with shorter commuting time and greater availability of public transport unless we assume the high prices are here to stay.

Most alternative energy power industries are targeting manufacturing to an expected oil price range that is in the $80 – $100/barrel bracket. In the case of major price changes, inertia plays an important role that reflects itself in price elasticity – in other words, before they are willing to change their business models to adapt, buyers have to be convinced that the price change will last a long time.

There are some economic forces that help prolong the price reduction. As Figure 3 shows, the most recent major rise in price was triggered by a series of OPEC cuts in supply. Presently, Saudi Arabia and other Middle Eastern countries refuse to repeat the exercise, hoping that the low price will force American producers to cut production and thus alleviate the glut. However, since countries such as Venezuela, Russia and Iran badly need the money to balance their budget, they increase production to generate more revenue, and thus exacerbate the oversupply.

Beliefs in future trends will largely determine the impact on the energy transition. If we strictly follow market forces, the market for the future oil prices should be a good indicator: the price of Brent Crude Oil will return to around $80/barrel toward the end of 2021. This is a rise of about 7% per year – a long-term rate that is far slower than the decline of 60% in half a year (Source – Thomson Reuters; CME Group; Nymex through The Economist Espresso 1/8/2015).

One anecdotal example of the market’s estimate that the decline might be short-term is that oil traders are renting supertankers in which to store surplus oil for later sale at a higher price. Right now, said rental period is only for one year. On the other hand, those banking on a longer term decline include American companies that have started idling oil rigs, and two utilities’ cancellation of a power purchase agreement with Cape-Wind, a $2.6 billion wind power project off the coast of Massachusetts.

We will be closely following these developments.

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Assessment: Winter 2015

In my July 8, 2014 blog, I promised to check in with four self-assessment reports throughout the year, at the following times:

  • The commemorations of the American and French Revolutions (first two weeks of July)
  • The Jewish religion’s holy day, Yom Kippur – a day in which Jews are advised to take accounts of their deeds and misdeeds (beginning of October)
  • New Year’s Day (January 1st)
  • Earth Day (April 22nd)

Well – it’s time for that New Year’s report.

Over the course of the last three months, a slew of important global developments in energy transition took place, leading many of us to think that 2014 was the start of a breakthrough in the worldwide attempts to mitigate anthropogenic climate change. That doesn’t necessarily mean that such a breakthrough is imminent, but efforts are underway, and the “skeptics” subset of deniers (September 3, 2012) have increasingly fewer branches to hang their arguments on.

These developments include the recent US-China agreement (signed November 12, 2014) regarding the two countries’ specific targets and tactics to mitigate climate change, and the call Pope Francis issued to the 1.2 billion Catholics worldwide to tackle the issue. Though many will consider this out of place in this list, I am also including the recent sharp drop in global energy prices, which was spearheaded by the more than 50% drop in oil and gas prices over the last six months. The common opinion right now is that the drop is good for consumers but bad for most producers and countries that heavily rely on oil to balance their budgets. Many also consider the abrupt change to be an obstacle to efforts to mitigate climate change through a global energy transition to more sustainable sources. I believe that’s an over-simplification. Next week I will discuss the matter, and will examine some of the aspects of the price drop that may be friendlier to the energy transition.

No one has specifically raised this as a concern, but since this post is part of my periodic assessment reports, I would like to use it as a self-assessment of the ethics of my style of writing.

In other words, could my style of writing for this blog be labeled as plagiarism or worse – intellectual theft?

Let’s start with a definition of plagiarism: Meriam Webster Dictionary defines plagiarism as:

The act of using another person’s words or ideas without giving credit to that person : the act of plagiarizing something

Plagiarism is a big issue in academia. Everybody is vigilant against it, trying to make sure not only that our students aren’t trying to present the work of others as their own, but also that faculty cannot enhance their accomplishment portfolios by borrowing other people’s work and hoping that no one notices. Among the measures against such practices are the very sophisticated anti-plagiarism programs that can now scan literature for unaccredited pieces of work. The other side of this culture is that most of our intellectual work is constructed on the broad shoulders of our predecessors.

I myself am hyper-aware of the issue, as it pertains to my own writing and that of others. In fact, the issue was broad enough that I found myself collaborating with an English professor at my institution to write an article for a professional journal summarizing our collective experiences on the issue. I am citing here the introductory paragraph to this article, which was mostly written by the editors of the journal:

In response to a pamphlet on ways to avoid plagiarism published by their university, a science professor and an English professor reflect on their own writing practices. They also explore such topics as electronic plagiarism detectors, the history of “imitation” in literature, the Popperian formulation of the scientific method, the postmodern notion that “everything is already written,” the problem of “unconscious plagiarism,” Foucault’s “author function,” and the different assumptions about truth made in the “objective” work of science and the “subjective” work of the humanities. They reflect on some reasons why teachers’ guidelines may foster plagiarism among students, and they suggest ways to frame assignments that help students to do their own work.

I am a scientist that was trained to do scientific research. I am an old guy with a tenured university position and a Wikipedia profile (see the right column of this blog). I am also an experimentalist, so most of my work is based on experimental findings – whether they are mine, my students’ or collaborators’. No plagiarism there. However, in my long time of doing so, I have acquired enough experience and enough of a reputation to be asked to write review articles and books that are based on other people’s work. Every finding that I present is properly attributed and, when necessary, permission has been granted from the authors and/or publishers. No plagiarism there either.

I was recently invited to write a review article for a professional journal on the topic of climate change. My practice in writing any scientific paper or presenting a talk on any scientific topic is to start with the data, describe it in detail, and then discuss the ramifications.

When writing the blogs, I follow a similar routine. I focus on climate change and my objective is to try to establish a connecting line between the relevant science, my students, and members of the general public that don’t have a science background. I am using the blog in a few of my courses, and routinely welcome comments from my students. Another important objective for me is to frame my own thoughts on a range of diverse, yet interconnected issues that – without the blog – would likely stay separate in everyone else’s minds. I put my thought process in writing in part so that I can spur my readers to think and (hopefully) react/provide feedback.

As I often mention here, with more than 7 billion people in the world and growing, humans are an increasingly important part of the physical environment; discussions are under way to label the present era as Anthropocene. Climate change deals with the past, present, and an extrapolated near future. Mitigation and adaptation on scales that vary from local to global are ongoing, as are the fluctuations in politics and money flow aimed at influencing discussions on these topics.

The dispensation of information is now changing as well. Some of the information comes the old-fashioned way, through reporters who are paid by news organizations to probe, investigate and document. The role of aggregators that collect various news reports on select topics is also growing.

As a “lone wolf” with no organization and no budget, I am relying on the news infrastructure.

I have a combination of paid and free subscriptions that I follow on a daily basis. These include: the New York Times, The Economist, National Geographic, Scientific American, Science Daily, and Renewable Energy World. In addition, my computer facilities come with their own aggregators that I follow regularly. If I find something relevant that I want to use, my subscription through my college library usually allows me to download the original publication.

Following the same practice I use for my scientific papers, I don’t ask readers to agree with me blindly; I make sure to cite and wherever possible link to any reference that I use, in addition to including the relevant paragraph(s) that clarifies the story that I am trying to tell. If I need picture or graph that I regard as pertinent to the story, I often go to Google Images and use the available links. I do not ask permission to do that because my timing does not allow for the usual lag that such requests often entail.

My basic assumption is that if information is posted sans a warning against its use without permission, it’s fair game. I don’t pay anybody for the information that I post; I don’t have the resources for that and again, the time element in such transactions is prohibitive. In a sense, I am acting here as an aggregator on the particular topics that I wish to write about. I have no idea how commercial aggregators work, especially in this age of the internet, but so far I have not been warned by anybody to cease and desist.

So – following the original dictionary definition, I do not plagiarize, but my practice of direct use of data and paragraphs from original publications without permission for doing so may be questionable. I have justified these practices to myself in various ways – none of them to my complete satisfaction. It would be nice to have some feedback. Please let me know what you think!

In my last assessment, I included an update on my readership/ social media progress, so I will do so again here. Again, most of my efforts have focused on Twitter. In the last 60 days, I have gained 91 followers (bringing my total to 300). I also had 961 link clicks, 93 mentions and 78 retweets. This is all readily accessible information. On Facebook, in the same time period, my page got an additional 6,075 impressions from 1,769 users.

On my blog itself I’m happy to report that I’ve had had 1,655 visits from 902 unique computers, 700 of them new visitors. To those of you reading, I thank you and (as always) welcome your comments.

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Stuttering Energy Transitions: Germany – Storage

As I have mentioned before, electric utilities must necessarily store electricity in order to keep up with the fluctuations in consumer demands (July 29 – August 12 blogs). For example, all around the world (where people are connected to electrical grids) people use considerably less electricity in the middle of the night compared with that used at dinner time. The process is known as load leveling; it is essential when the generation of electricity is steady but consumption is not. There is an increasing need for such a process when the generation of electricity is intermittent – as is the case with solar energy use in forms such as photovoltaics (solar cells) and wind. The enhanced need for storage in the use of such intermittent sources was the trigger for the contentious series of blogs in November that followed John Morgan’s guest blog on EROI. I came to know John Morgan through an exchanged series of tweets (August 8, 2014 blog) about David MacKay’s article on the “ultimate” need for storage in a virtual, fully sustainable, England. Here is what I wrote in that short blog:

Thank you Dadiva for directing my attention to this important article. It is a significant quantitative contribution to the requirements necessary for a global energy transition to decarbonized energy sources based on solar energy conversion in all its forms. It makes the key point that although globally there is plenty of energy coming in, locally there are imbalances that require separating energy production from consumption. The emphasis in the paper is on sovereign states (with Britain as a focal point), but in-state disparities – especially between dense populations of urban consumers and equally dense rural production areas – require extensive investments in storage and smart grids capable of covering a large area.

MacKay’s emphasis was on global need, but he used his native England as a virtual case in point. Meanwhile, Germany is probably the best example of what shape such a transition will take: it’s a large (population 80 million), rich, developed country that has taken a top-down approach, and its decision to move the energy transition full speed ahead has met with support from most of the population. The issue of the storage requirements in the transition is under active discussion. The head of Agora Energiewende, a German think tank focusing on the German energy transition gave his position:

‘We don’t really need new storage devices in the next 10 to 20 years’ as cross-border power trade, demand management and intelligent steering of fossil-fired power plants can ensure flexible electricity flows at less money, Patrick Graichen, head of Agora, told reporters today in Berlin

 Below are some significant parts of Paul Hockenos’ article in Renewable Energy World that summarizes the debate and Agora’s thoughts on this issue:

… this autumn, one of Germany’s leading energy think tanks, Agora Energiewende (financed by the Stiftung Mercator and the European Climate Foundation), dropped a small bombshell on the Energiewende community. In a study carried out by Agora and other high-profile, independent research institutes, it concluded that significant storage capacity for renewably generated electricity would not be needed for another 20 years — until Germany has at least a 60 percent share of renewables in its power sector. The study is a hot potato that has, so far, incurred considerable critique from peer institutes and lobby groups.

‘The key insight here,’ explains one of the authors, Daniel Fürstenwerth of Agora Energiewende, ‘is that the Energiewende can continue investing massively in renewable power right now. We will need to invest in power-to-power storage capacity in the long term, but not today. We have to keep the Energiewende cost-efficient or the German people, industry, and the political establishment won’t go for it.’

The essence of Agora’s argument is that Germany’s energy system can maintain the flexibility it needs even as renewables expand by other, less costly means than new power-based storage technology. These alternative options include demand-side management, flexible conventional power plants, and grid expansion both in Germany and across its borders.

Demand management is an idea central to the work of Agora Energiewende, a young think tank that burst onto the scene in Germany two years ago. ‘It’s about making the electricity demand flexible so that it meshes better with a fluctuating power supply,’ explains its website, as well as ‘making the power system as a whole more flexible in order to ensure security of supply.’ Agora’s analysts argue that energy demand management can be spurred by market incentives, regulatory guidelines and new technology that will reduce investment costs in the Energiewende and help ensure supply security.

Load control, load shifting, energy efficiency and conservation, for example, are all ways to manage demand. One Agora study shows that Germany’s industrial producers can shift more than a gigawatt of their power demand for short periods, a phenomenon that on a larger scale could go a long way to ensure security of the regional power supply. Pilot projects in Bavaria and Baden Wurttemberg have already brought encouraging results.

Moreover, inflexible conventional power plants like Combined Heat and Power (CHP) plants can be made more flexible by adding hot water towers. In Germany today there are already CHP plants in places like the German cities of Flensburg and Nuremburg that turn surplus power into hot water, opening the way for renewables to provide supply when the weather dictates. ‘It’s a relatively cheap solution,’ says Fürstenwerth.

The other cornerstone of Agora’s argument is that Germany’s current grid and the expansions underway — an additional 2,650 kilometers of new high-voltage grid is currently being laid — will provide the flexibility necessary to accommodate more renewables. Agora assumes that grid construction will proceed as planned — in Germany as well as in neighbor countries — which will better enable grid operators to match supply and demand. And the better Germany is linked to its neighbors, the more it can balance by trading on the European market.

The people at Angora emphasize flexibility – different sustainable sources have corresponding intermittency periods, but if they can match certain ones with peak usage times, they can partially stabilize the energy supply and thus decrease the need for storage.

As the following figure shows, wind power and solar cell power in Germany correlate negatively throughout the year:

solar-pv-and-wind-power-complementary-570x388As we will discuss when we look at the energy transitions of other countries, such combinations of sustainable sources with different intermittency are now starting to permeate globally, becoming an important element in the global transition.

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Stuttering Energy Transitions: Germany – Producers

As I discussed in the in the last blog, the feed-in tariff that was introduced as a key element in the German energy transition has resulted in the Germans paying among the highest electricity rates in the world. It was designed to basically subsidize the producers of the new alternative energy.  The graph below shows the results:

Photovoltaics productionFigure 1 – Recent Market Share of Photovoltaic Cells

This shift to total domination of Chinese solar manufacturing over almost everybody else was due to the Chinese ability to drastically reduce their prices of the cells. This is shown in Figure 2:Price Trend Crystalline Photovolatic Panels in EURO, Main Port Europe (net price w/o value tax)

Figure 2 – Prices of Crystalline Modules of Chinese Made Photovoltaic Systems

With wind, the situation is a bit better:

German Wind EnergyFigure 3 – Wind Power in Germany 1990-2011: Installed capacity (MW) in red and average power generated (MW) in blue.

Wind Power ShareFigure 4 – Wind Power Share

Not surprisingly, the emerging dominance of Chinese photovoltaic cells has caused major stress in the manufacturing of solar cells in the rest of the world, including Germany. But is this good, bad or irrelevant for the world as a whole? In terms of global energy transition, it has to be good. The plunge in prices makes the holy grail of bringing down the cost of nonpolluting energy alternatives an ever more reachable reality. The claim that the switch to alternatives generates jobs may be true globally but it becomes questionable on a local scale. As I have written before, the local scale, in the form of sovereign countries, makes the rules. Both the US and the European Union are currently fighting the Chinese dominance claiming that the Chinese government is subsidizing the export of solar panels, an act forbidden by the rules of WTO (World Trade Organization). In addition, there are strong indications that many Chinese manufactures are selling the panels below cost. This is always a controversial issue in trade between developed and developing countries in which the components of the cost structure differ mainly because of differential labor costs. The sharp cost decline was a major factor in the bankruptcy of many American and European manufacturers – perhaps the most famous one (at least on this side of the Atlantic) was the bankruptcy of the American manufacturer Solyndra, which defaulted on a half billion dollar loan secured by the American government. Recently, the plunging prices have started to affect Chinese firms as well, mainly because of rising labor costs in China. This is shifting some of the production to other developing countries such as Malaysia (see Figure 1 for the recent stabilization of market share of China coupled with the rise in the Malaysian share). Individual countries have tools to fight such trends. As of 2012, the US has imposed stiff duties of about 30% on Chinese imports of solar panels, while the European Union imposed a quota for import of the panels. The US is expected to broaden the impact of the duties. These combined actions will most likely result in the stabilization of the prices, possibly even reversing the decline. Even within the European Union there are strong voices that claim that the German policy of high feed-in tariff amounts to an illegal subsidy of German producers. Here is what the Financial Times writes about the issue:

Joaquín Almunia, the EU competition chief, contradicted Mr Gabriel’s claim that one outstanding issue – forcing Germany to treat imported energy on the same terms as domestic producers – was never before raised in six months of talks. In a statement issued on Thursday, Mr Almunia argued the discrimination was potentially illegal, a risk that had been “made clear to the German authorities back in December 2013”. ‘There is nothing new in the need to address possible discrimination of imported electricity by Germany,’ he said. ‘If consumers have to pay a surcharge on their consumption of both domestic and imported electricity but revenue from the surcharge is used to only finance domestic electricity producers, there is a risk that imported electricity is disadvantaged and made comparatively more expensive.’

There is no question in my mind that the rules for international trade in alternative energy sources will, at some point, emerge as an important issue to be discussed as part of the global mitigation policy for climate change. Hopefully, this will lead to establishing more effective rules of trade that can facilitate a global energy transition in a timely way. The next blog will be focused on the necessity for storage infrastructure in Germany and thus will be directly connected to the November discussions about the role of storage in the EROI considerations in the transition.

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Stuttering Energy Transitions: Germany – Consumers

The German Renewable Energy Act (German: Erneuerbare-Energien-Gesetz, EEG) was designed to encourage cost reductions based on improved energy efficiency from economies of scale over time. The Act came into force in the year 2000 and was the initial spark behind a tremendous boost of renewable energies in Germany.

The three main principles of the EEG are:

a) Investment protection through guaranteed feed-in tariffs and connection requirement: Originally, every kilowatt-hour generated from renewable energy facilities received a fixed feed-in tariff. The system has recently been modified to now also include a market premium system. Network operators are required to preferentially feed-in this electricity into the grid over electricity from conventional sources (nuclear power, coal and gas). Renewable energy plant operators in principle receive a 20-year, technology-specific, guaranteed payment for their electricity generation. Small and medium enterprises have been given new access to the electricity market, along with private land owners. The Federal Ministry for Environment, Nature Conservation and Nuclear Safety argued that anyone producing renewable energy could sell his ‘product’ for a 20-year fixed price.

b) No charge to Germany’s public purse: The promotion of renewable electricity continues to be necessary up until now. The EEG rates of remuneration show what electricity from wind, hydro, solar, bio- and geothermal energy actually cost. Compared to fossil fuels, there are lower or no external costs, such as damage to the environment, the climate or human health. The remuneration rates have until recently been considered not to be subsidies as such, since they are not paid for by taxes and are paid for by every consumer as an EEG surcharge (EEG-Umlage) that is included in the electricity bill. The polluter pays principle a.k.a “whoever consumes more, pays more” is in effect passed on to consumers. In 2013, the total EEG surcharge amounted to EUR 20.4 billion. In 2014, the EEG surcharge was set at 6.24 ct/kWh. Certain reductions of the EEG surcharge apply for energiy intensive industries (so-called special equalisation scheme).

c) Innovation by decreasing feed-in-tariffs: Feed-in tariffs in Germany decrease in regular intervals to exert cost pressure on energy generators and technology manufacturers. The decrease (called “degression”) applies to new plants. Thus, it is hoped, technologies are becoming more efficient and less costly.

The prices of electricity over this time period behaved as the figure below shows:

German Electricity Costs

Figure 1 – electricity prices in Germany since the EEG was introduced. The green line above is the price of electricity on the German electricity exchange. The red line is the average price of electricity for households. The other lines are for commercial clients and special customers (notably, their prices have also risen).

The price of electricity in Germany was high relative to other countries, as can be seen in Figure 3.

Average Price of Electricity Cost by Country

Figure 3 – The relative price of German electricity in 2011

 

 

As I mentioned in last week’s blog, more than 60% of the Germans were happy with the new energy policy. This, of course, leaves plenty of unhappy people. Any transition of this magnitude produces many winners and losers. They, in turn, keep the conversation going and serve as an excellent example for other countries, who can take notice, learn and adapt – thus pushing forward the global energy transition that will mitigate destructive changes in the physical environment.

Of the many aspects mentioned above, the feed-in tariff is key. Since its inception, some important changes have taken place, including:

  1.  Purchase prices were based on generation cost. This led to different prices for wind power, solar power, biomass/biogas and geothermal and for projects of different sizes.

  2. Purchase guarantees were extended to 20 years.

  3. Utilities were allowed to participate.

  4. Rates were designed to decline annually based on expected cost reductions, known as “tariff degression”.

Since it was the most successful, the German policy (amended in 2004 and 2008) often was the benchmark against which other feed-in tariff policies were considered.

Other countries followed the German approach. Long-term contracts are typically offered in a non-discriminatory manner to all renewable energy producers. Because purchase prices are based on costs, efficiently operated projects yield a reasonable rate of return.

This principle was stated as:

‘The compensation rates…have been determined by means of scientific studies, subject to the proviso that the rates identified should make it possible for an installation – when managed efficiently – to be operated cost-effectively, based on the use of state-of-the-art technology and depending on the renewable energy sources naturally available in a given geographical environment.’

—2000 RES Act

Feed-in tariff policies typically target a 5–10% return.

Feed-in tariffs (REFIT) supported growth in solar power in Spain, Germany and wind power in Denmark.

The success of photovoltaics in Germany resulted in an electricity price drop of up to 40% during peak output times, with savings between €520 million and 840 million for consumers. Savings for consumers have meant conversely reductions in the profit margin of big electric power companies, who reacted by lobbying the German government, which reduced subsidies in 2012. Energy utilities lobbied for the abolition, or against the introduction, of feed-in tariffs in other parts of the world, including Australia and California. Increase in the solar energy share in Germany also had the effect of closing gas- and coal-fired generation plants.

Some of the important losers over the years were the German utilities. An article by Leon Mangasarian and Stefan Nicola from Bloomberg that was published in Renewable Energy World summarized some of the important issues that they were facing. I am including few paragraphs below:

BERLIN — Germany’s biggest utilities face dwindling market shares as the shift to renewable energy spurs regional power generation and storage technology, a senior member of Chancellor Angela Merkel’s party said.

Electricity companies are ‘fighting something of their last stand,’ Christine Lieberknecht, the Christian Democratic Union premier of Thuringia state, said in an interview. ‘In a few years, nobody will even talk about it anymore because the technology for decentralization of power production and energy self-determination will make such strides.’

That vista suggests a deepening crisis for EON SE and RWE AG, Germany’s biggest utilities, whose profits are slumping as Merkel pushes plans to close all 17 German nuclear reactors by 2022 in response to the Fukushima meltdown in Japan in 2011. Both companies produce mostly conventional energy.

Germany’s energy landscape is shifting as renewable sources grab revenue while consumers and companies criticize rising power costs that are three times higher than in the U.S., in part due to taxes and subsidies to promote renewable energy. Merkel plans to more than triple Germany’s renewable share to 80 percent by 2050 from about a quarter now.

Essen-based RWE generated 6.4 percent of its power from alternative energy sources last year, compared with almost double that at Dusseldorf-based EON, Germany’s biggest utility by market capitalization.

As mentioned earlier, the feed-in tariff is destroying the business model of the electric utilities and serves also as a vehicle to subsidize the alternative energy producers. This will be further explored in the next blog, where I will shift to the producers.

In my last blog, I ended with a look at one at of the most fascinating recent developments of the German adaptations to these change – the splitting of the largest utility, E.ON into two companies. One of these will continue to be focused on fossil fuels while the other one will completely shift to the new alternative energies and integrating consumer demands with energy supply. This will be fascinating to watch and, if successful, could be a great basis for all of us to learn from.

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Stuttering Energy Transitions: Germany

2015 is knocking at the door. I just got The Economist’s “The World in 2015” special issue both in print and digital form. It’s full of numbers, predictions and stories. Most of its numbers and predictions are optimistic extrapolations of the present. The majority of the Science and Technology section includes information that is on the brink of public announcement. There also is a section by a science-fiction writer (Alastair Reynolds) that discusses which elements of fiction might soon become fact. The piece includes flying cars, talking to robots, new stuff from the Large Hadron Collider, etc., but it makes no predictions about what will happen to the planet as a whole. After all, there is no profit in trying to upset readers.

I will try to welcome 2015 a bit differently. On November 11th, the US and Chinese presidents came to a landmark agreement: the US will accelerate the speed of its current reduction of greenhouse gas emissions so that its level by 2025 will be close to 30% below its level in 2005 (double the pace of reduction it targeted for the period from 2005 to 2020). Meanwhile, China’s emissions will peak by 2030 – by which time sustainable sources should constitute at least 20% of its energy supply. People around the world saw this agreement by the two worst polluting countries as a good framework upon which to base a global agreement – one which will be discussed at the United Nations Climate Change Conference scheduled be held in Paris, France in December of 2015. Many eyes are now turning to India to see if it will follow. I will try to follow the global preparations for the December 2015 Paris meeting and include updates in this blog.

One of my main recurring themes on Climate Change Fork has been trying to follow the global energy transition from fossil fuels to a more sustainable mix. That mix must necessarily avoid changing the chemistry of the atmosphere, since any modification to the planetary energy balance could drastically affect the global climate. I have just ended a series of blogs (see all four November blogs) trying to make the case that such a transition is indeed possible, despite the many voices that disagree. Up to now I have discussed energy transition as a global phenomenon (see December 24, 2012 blog) with anecdotal references to individual countries. I think that it’s high time to change gear and address a few individual countries’ efforts in some more depth, as well as better defining the stuttering process that attempts at such transition entail. I have chosen six countries to follow, with the hope that their experiences can teach us all. These countries are China, US, India, Australia, France and Denmark. I have rearranged my computer’s filing system that is set to mimic my book’s chapter with updated information, to reflect on what takes place in these countries, in addition to (not instead of) the global picture. I plan to sustain my focus on the energy transitions that take place within these countries – at least until the Paris conference. That said, I fully expect that this focus will be interrupted frequently to reflect on important current events that I will wish to comment on.

I’ll start here with Germany and an article written by Justin Gillis in The New York Times. The article is focused on Germany’s energy transition and some of the important issues that it is raising. Below are some of the key paragraphs:

A reckoning is at hand, and nowhere is that clearer than in Germany. Even as the country sets records nearly every month for renewable power production, the changes have devastated its utility companies, whose profits from power generation have collapsed.

… Taking full advantage of the possibilities may require scrapping the old rules of electricity markets and starting over, industry observers say — perhaps with techniques like paying utilities extra to keep conventional power plants on standby for times when the wind is not blowing and the sun is not shining. The German government has acknowledged the need for new rules, though it has yet to figure out what they should be. A handful of American states are beginning a similar reconsideration of how their electric systems operate.

‘It’s pretty amazing what’s happening, really,’ said Gerard Reid, an Irish financier working in Berlin on German energy projects. ‘The Germans call it a transformation, but to me it’s a revolution.’

… The shifting economics can largely be traced to China, by way of Germany. Over the past decade, the Germans set out to lower the cost of going green by creating rapid growth in the once-tiny market for renewable power.

Germany has spent more than $140 billion on its program, dangling guaranteed returns for farmers, homeowners, businesses and local cooperatives willing to install solar panels, wind turbines, biogas plants and other sources of renewable energy. The plan is paid for through surcharges on electricity bills that cost the typical German family roughly $280 a year, though some of that has been offset as renewables have pushed down wholesale electricity prices.

… In Germany, where solar panels supply 7 percent of power and wind turbines about 10 percent, wholesale power prices have crashed during what were once the most profitable times of day. ‘We were late entering into the renewables market — possibly too late,’ Peter Terium, chief executive of the giant utility RWE, admitted this spring as he announced a $3.8 billion annual loss.

The big German utilities are warning — or pleading, perhaps — that the revolution cannot be allowed to go forward without them. And outside experts say they may have a point.

The Achilles’ heel of renewable power is that it is intermittent, so German utilities have had to dial their conventional power plants up and down rapidly to compensate. The plants are not necessarily profitable when operated this way, and the utilities have been threatening to shut down facilities that some analysts say the country needs as backup.

The situation is further complicated by the government’s determination to get rid of Germany’s nuclear power stations over the next decade, the culmination of a long battle that reached its peak after the 2011 Fukushima disaster in Japan. As that plan unfolds, shutting down a source of low-emission power, Germany’s notable success in cutting greenhouse gases has stalled.

So, what is happening in Germany? The German program for energy transition is summarized in a document titled “Energy Transition – the German Energiewende.”

The government-approved program objectives were set in 2010 and are summarized in figure 1. As the site mentions, the history of the program didn’t start with the present government or with the realization that an energy transition is needed to mitigate anthropogenic climate change. Instead, it started as an anti-nuclear effort, and has developed and gained public support throughout the years.  Government Approved Objectives of the German Energy Transition

Figure 1 – Government Approved Objectives of the German Energy Transition

According to German sources, the program enjoys wide public support (60%) but since there are winners and losers in the program, there is no shortage of public disagreements.

The distribution of primary energy resources, as of shortly after the adoption of the program, is summarized in figure 2.

Primary Energy Consumption in Germany - 2011

Figure 2 – Primary Energy Consumption in Germany – 2011

The program is evolving. As Justin Gillis mentioned in his article, the Fukushima nuclear disaster in Japan has left a serious mark on Germany’s policy makers. Shortly after the disaster, on May 29, 2011, Merkel’s government announced that it would close all of its nuclear power plants by 2022. Eight of the seventeen operating reactors in Germany were permanently shut down following Fukushima. Energy supply had to adjust, and coal and other fossil fuels have filled much of the gap.

On December 4th, the government announced the following adjustment:

BERLIN — Germany has fallen behind in its ambitious goals for reducing carbon emissions. It is burning more coal than at any point since 1990. And German companies are complaining that the nation’s energy policies are hurting their ability to compete globally.

But on Wednesday, Chancellor Angela Merkel’s government said it was redoubling its efforts, proposing new measures to help it reach the emissions-reduction target for 2020 it set seven years ago when it undertook an aggressive effort to combat climate change.

However, something else happened the same day, as reported in a piece by Paul Hockenos that appeared on “Renewable Energy World”:

BERLIN — Germany’s biggest utility E.ON — long a pillar of the country’s fossil fuel and nuclear industry — dropped a bombshell on Europe’s business world with the announcement that the multinational was exiting the conventional energy market in favor of a new business model based on renewables, intelligent grid systems, energy management and other services. Indeed, the company seems finally to have drawn the logical consequences from the Energiewende, Germany’s renewable energy transition, after years of resisting the ambitious transformation of the nation’s energy supply.

‘This is part of a transformation that almost all of Europe’s major utilities are currently undergoing in response to fundamental changes in their energy markets,’ says Toby Couture, director of the Berlin-based consulting firm E3 Analytics. ‘They’re endorsing different adaption strategies. E.ON’s seems to be the boldest, the most far-reaching so far.’

A few days later, an article in The Economist provided some more details:

FOR many Germans, E.ON, the country’s biggest utility, is a symbol of stability. But on November 30th it surprised by announcing it would split itself up. In 2016 it will float a new company which will include its power generation from nuclear and fossil fuels, as well as fossil-fuel exploration and production. The rump—which will keep the E.ON brand—will make money from renewable energy, distribution and ‘customer solutions’, a grab-bag of offerings such as advice, smart-metering and the like. The firm’s boss, Johannes Teyssen, said that as a sprawling integrated utility E.ON could only be ‘mediocre’. Two focused ones would do a much better job.

As Justin Gillis’ piece made clear, the majority of German utilities fought tooth and nail against the new program. In the next blogs I will try to explore the reasons for their opposition and the role of the intermittent nature of sustainable sources in the energy transition. Meanwhile, it is interesting to see that Germany’s largest utility is sort of switching sides by splitting not only its focus but also its entire organization.

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The Price of Wobbling

Thanksgiving is around the corner (at the time of writing – by the time this is posted it will be a few days after) and the semester is just about over. This time of the year the students are focusing on the finals. For the climate change course that I teach, my routine for the final exam is to have the students refute the arguments made by climate change deniers. I take the arguments from extensive deniers’ literature such as the list compiled by the Heartland Institute or that compiled by Skeptical Science. The students know that it’s challenging to make an effective argument. In a previous blog (March 25, 2014), which I posted toward the end of last semester, I wrote that my main goal is to improve their ability to argue. This is a continuing challenge.

A few weeks ago, an Op-Ed in the New York Times, titled “Wobbling on Climate Change” and written by Piers Sellers, brought me back to the issue in an important way. I didn’t respond in a timely way because I was busy until recently with the series of blogs on EROI (all four November blogs). Now is the time to return to this issue. I will start by quoting directly from the Op-Ed:

GREENBELT, Md. — I’M a climate scientist and a former astronaut. Not surprisingly, I have a deep respect for well-tested theories and facts. In the climate debate, these things have a way of getting blurred in political discussions.

In September, John P. Holdren, the head of the White House Office of Science and Technology Policy, was testifying to a congressional committee about climate change. Representative Steve Stockman, a Republican from Texas, recounted a visit he had made to NASA, where he asked what had ended the ice age:

‘And the lead scientist at NASA said this — he said that what ended the ice age was global wobbling. That’s what I was told. This is a lead scientist down in Maryland; you’re welcome to go down there and ask him the same thing.

‘So, and my second question, which I thought it was an intuitive question that should be followed up — is the wobbling of the earth included in any of your modelings? And the answer was no…

‘How can you take an element which you give the credit for the collapse of global freezing and into global warming but leave it out of your models?’

That ‘lead scientist at NASA’ was me. In July, Mr. Stockman spent a couple of hours at NASA’s Goddard Space Flight Center listening to presentations about earth science and climate change. The subject of ice ages came up. Mr. Stockman asked, ‘How can your models predict the climate when no one can tell me what causes the ice ages?’

I responded that, actually, the science community understood very well what takes the earth into and out of ice ages. A Serbian mathematician, Milutin Milankovitch, worked out the theory during the early years of the 20th century. He calculated by hand that variations in the earth’s tilt and the shape of its orbit around the sun start and end ice ages. I said that you could think of ice ages as resulting from wobbles in the earth’s tilt and orbit.

The time scales involved are on the order of tens of thousands to hundreds of thousands of years. I explained that this science has been well tested against the fossil record and is broadly accepted. I added that we don’t normally include these factors in 100-year climate projections because the effects are too tiny to be important on such a short time-scale.

And that, I thought, was that.

So I was bit surprised to read the exchange between Dr. Holdren and Representative Stockman, which suggested that at best we couldn’t explain the science and at worst we scientists are clueless about ice ages.

We aren’t. Nor are we clueless about what is happening to the climate, thanks in part to a small fleet of satellites that fly above our heads, measuring the pulse of the earth. Without them we would have no useful weather forecasts beyond a couple of days.

The question that Representative Stockman asked John Holdren, is a legitimate question related to climate change. The issue of how Earth got into and out of the ice ages and the nature of the Milankovitch cycles that explain it are standard topics in my course and in any other course that focuses on climate change. Representative Stockman’s question appears frequently on tests in these courses. If a student had given me the answer that John Holdren gave to Representative Stockman, I would have strongly suspected that he Googled it and only had enough time to read the first line or so. If student had asked me that question during class and I had given him this answer, the student would have rightly thought that I was being completely dismissive of him and probably would have used the first opportunity to drop my class.

Representative Stockman is more powerful than my students. He can actually be instrumental in the legislative efforts to either facilitate the mitigation of climate change or to erect obstacles to doing so. He doesn’t fit into any of the stereotypes of deniers (September 3, 2012) that I have previously discussed. He also feels strongly that he needs to educate himself in order to contribute to the legislative effort to face this issue. We need more policy makers like him.

If my students feel that I am denigrating them, their reactions are limited to trying to drop the course or trying to learn the answers to their questions on their own if they are strongly motivated. If a policy maker feels that he is being disparaged by a science adviser to the president (especially one that also happens to be among the top climate scientist in the country) his reaction can be much more destructive. Instead, in this instance, according to the Op-Ed, Representative Stockman was more productive. He used the response from Dr. Holdren to ask NASA scientists if they are using the wobbling in their present modeling to predict the long term impact of climate change. It took a bit of effort on his part to go through the hoops, and he ended up discussing the issue with Dr. Sellers to learn why the wobbling is not very relevant in the modeling of the climate through the end of the century.

Most policy makers are not that persistent. They are constantly subjected to various, often conflicting, pressures and are being asked to weigh the information given to them and to try to convert it into productive policy decisions.

On a different level, all voting-age citizens are being subjected to similar such multiple, often conflicting, pressures – we are charged with voting in a government whose priorities we agree with and voting out governments with which we disagree. This puts all of us into a position to be both teachers and students at the same time. To educate informed citizens is a major effort; to educate informed, important policy makers is an urgent task – one for which we pay a very dear price if we fail.

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Yes We Can 3: The Alcohol Debate

This will be the last in the series of blogs on EROI that started with John Morgan’s guest blog (November 4). The set of data in all three blogs was based on a paper by Weißbach et al. that suggested an economic threshold below which sustainable energy sources cannot be used in the substitution of fossil fuel, thus calling into question the whole issue of a feasible energy transition to non-carbon-based energy sources. One of these sustainable energy sources is biomass, as exemplified by ethanol (drinking alcohol) fermented from corn. Its EROI value (buffered or un-buffered), as put forward in the Weißbach paper, was 3.5 – well below the stated economic threshold. I have decided to focus this blog on the debate around this value, which started as soon as the United States legislated a requirement to include a statement of the amount of alcohol in all automotive fuels being sold within the country.

Some of the characteristics of the alcohol (biomass in the figure) are not obvious, but they are both interesting and important in the climate change debate. Many of the characteristics, once the details are explored, also shed considerable doubts (at least in my mind) on the main EROI issues that we discussed in the last three blogs.

Why is biomass among the assortment of sustainable energy sources?

The burning of ethanol generates 6,743Btu per 1Lb of emitted carbon dioxide, while the burning of natural gas generates 8,751Btu for the same amount of emitted carbon dioxide – these figures are not much different yet one is regarded as sustainable while the other is regarded as a polluting fossil fuel. The reason for this is that the designation refers to the full cycle of production and burning. The ethanol is fermented from a biological crop grown annually; as with all plants, the corn uses a solar-powered photosynthetic process that sequesters the carbon dioxide from the atmosphere. The burning process returns the same amount of carbon dioxide to the atmosphere while releasing the stored energy. That means over the full cycle, the energy used actually all comes from solar energy, and presents no changes to the chemistry of the atmosphere.

In the case of natural gas, a similar process takes place – except that fossil fuels were formed hundreds of millions of years ago from the decomposition of dead plants and animals. This time lag completely separates the sequestration process from the combustion process, thus making it unsustainable.

If the energy that we use in the combustion of biomass comes from solar energy why it is not considered an intermittent source of energy like the other solar energy forms (solar PV, wind, solar CSP and hydro) which require storage (the difference between the buffered and un-buffered in the graph)?

This is an excellent question with a somewhat hazy answer. The main reason is that in a place like the United States the alcohol is made mostly by fermenting (bacterial digestion of the sugar) corn. Corn is also used to feed people and animals. This forms a tight connection between the food supply and the energy supply. In a sense, the food supply acts as the storage component of the energy supply. Unfortunately, it creates major issues for the food supply, which are especially notable since the majority of the world’s population is much more dependent on food supply than those who live in rich, developed countries such as our own. This brings us back to ancient times and the biblical story of how Joseph got to such a high position in the Egyptian hierarchy because of his ability to regulate the intermittency of the seven bad years and seven good years (I previously explored this in the context of fresh water supply in my April 8, 2014 blog).

The idea of using ethanol as a partial replacement for fossil fuels didn’t start because of awareness of climate change. As I have mentioned before (October 29, 2012), soon after World War II, it became evident that dependence on fossil fuels as the main source of energy would have to end sooner or later (remember the Hubbert Peak theory). The main reasons at that time were our finite supply and the limited reliability of foreign suppliers. So the thought was that it would be great to be able to grow our energy supply. This move would be especially great for the agricultural sector, which would be charged with increasing supply, thus giving them leave to raise prices and increase their profits. There were fierce debates that took place on this issue, many of which focused on the EROI that was calculated for this new energy supply.

The debate started following some EROI measurements that showed that it takes more fossil fuels to produce the same amount of energy that can be extracted from the ethanol – in other words, it’s an EROI smaller than 1. In 2002 the US Department of Agriculture (USDA) took its own measurements and summarized them in a report on the topic.

I am quoting three short introductory paragraphs from the report and including a detailed table that summarizes the results:

Ethanol production in the United States grew from just a few million gallons in the mid-1970s to over 1.7 billion gallons in 2001, spurred by national energy security concerns, new Federal gasoline standards, and government incentives. Production of corn-ethanol is energy efficient, in that it yields 34 percent more energy than it takes to produce it, including growing the corn, harvesting it, transporting it, and distilling it into ethanol.

Growth in ethanol production has provided an economic stimulus for U.S. agriculture, because most ethanol is made from corn. The increase in ethanol demand has created a new market for corn, and agricultural policymakers see expansion of the ethanol industry as a way of increasing farm income and reducing farm program payments, while helping the U.S. economy decrease its dependence on imported oil. Increasing ethanol production induces a higher demand for corn and raises the average corn price. Higher corn prices can result in reduced farm program payments.

Today’s higher corn yields, lower energy use per unit of output in the fertilizer industry, and advances in fuel conversion technologies have greatly enhanced the energy efficiency of producing ethanol compared with just a decade ago. Studies using older data may tend to overestimate energy use because the efficiency of growing corn and converting it to ethanol has been improving significantly over time. The estimated net energy value (NEV) of corn ethanol was 21,105 Btu/gal under the following assumptions: fertilizers are produced by modern processing plants, corn is converted in modern processing facilities, farmers achieve normal corn yields, and energy credits are allocated to coproduces.

The table is long and detailed, but I think that it is crucial to gaining some understanding of the complexity and subjectivity involved in the calculations of a concept such as EROI before accepting claims that such calculations prove or disprove the viability of doing things that we regard as essential.

Ethanol EROI Big Table

Summary of abbreviations in the table: LHV-Low Heat Value, HHV – High Heat Value (the difference between LHV and HHV is often a source of confusion and it originates with exclusion or the inclusion of the water vaporization energy in the process; the difference amounts to about 10% in most cases), Bu – bushel, NR – not reported.

The debate started to have a wider audience after Congress passed the Renewable Fuel Standard (RFS) law in 2005. Here is how the EPA summarized this law and the mandated steps to be taken:

EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The Renewable Fuel Standard (RFS) program regulations were developed in collaboration with refiners, renewable fuel producers, and many other stakeholders.

The RFS program was created under the Energy Policy Act (EPAct) of 2005, and established the first renewable fuel volume mandate in the United States. As required under EPAct, the original RFS program (RFS1) required 7.5 billion gallons of renewable- fuel to be blended into gasoline by 2012.

Shortly after the law was passed (January 2006) a detailed article appeared in Science Magazine on the issue (“Ethanol Can Contribute to Energy and Environmental Goals”; Alexander E. Farrell,1* Richard J. Plevin,1 Brian T. Turner,1,2 Andrew D. Jones,1 Michael O’Hare,2 Daniel M. Kammen1,2,3 ; Science 311, 506 (2006)).

I am attaching the key figure from this article below.

Science Magazine Net GHG Ethanol Energy Graph

Net energy and net greenhouse gases for gasoline, six studies, and three cases. (B) Net energy and petroleum inputs for the same. In these figures, small light blue circles are reported data that incommensurate assumptions, whereas the large dark blue circles are adjusted values that use identical system boundaries. Conventional gasoline is shown with red stars, and EBAMM scenarios are shown with green squares…

 

 

 

 

 

 

 

 

A few months later (June 23, 2006 – Vol. 312) an extensive comments section which focused on the article appeared in the magazine. The comments included both the issue of the competition with the food supply that I mentioned earlier and EROI calculations. Farrell et al. calculated the EROI of ethanol from corn as 1.2. This value means that the use of ethanol as an energy source leaves a replacement value of about 20% for other uses of fossil fuels aside from running the production of ethanol. This value was in agreement with the value that the Department of Agriculture quoted earlier and remains the most quoted value until today. The value that was given in the Weißbach paper, on the other hand, is 3.5.

These two values are not the end of the story. If you google the term “ethanol fuel,” you will find a Wikipedia entry that provides us with the following table:Ethanol Energy Balance Mini Table

These values are taken from an October 2007 article in National Geographic (“Green Dreams: Making fuel from crops could be good for the planet—after a breakthrough or two”; Joel K. Bourne, Jr., Robert Clark; National Geographic Magazine October 2007 p. 41). Everybody now realizes that the future of biomass – both in terms of the EROI and its disconnect from the food – supply rests in fermentation from cellulosic ethanol, which is defined as “biofuel produced from wood, grasses, or the inedible parts of plants.”

In the meantime, the production of corn-based ethanol in the United States went from 6.4 billion gallons in 2007 to 13.9 billion gallons in 2011. Not surprisingly, attempts to adjust the requirements are being met with considerable difficulties.

In the meantime, Happy Thanksgiving – I appreciate your continued readership.

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Yes We Can 2: The Weißbach Paper

A few weeks ago, John Morgan wrote a guest blog here (November 4, 2014) called “The Catch-22 of Energy Storage and EROI.” My conversation with him started by way of a Twitter discussion of David MacKay’s paper on the long term storage requirements for any energy transition from fossil fuels to solar-based, more intermittent, sustainable sources such as wind and solar. The posting was heavily based on a recent paper written by a set of scientists, listed with D. Weißbach as the first author (Energy 52 (2013) 210). Because of the importance of the issues that Dr. Morgan raised, I promised to comment on the Weißbach paper directly in this blog.

With regards to the global energy transition that is necessary to mitigate anthropogenic (man-made) climate change, politics is often not far removed from the science. Germany is on the global forefront of the transition, but its efforts are not proceeding without an intense public debate. The issue of storage and the use of nuclear energy are in the forefront of the debate (see the excellent discussion on Germany’s efforts in this area in Justin Gillis’ article in the New York Times). All the authors of the Weißbach paper are affiliated with the Institut für Festkörper-Kernphysik, which translates to “The Institute for Solid-State Nuclear Physics,” however, said institute is part of an international group, which also includes scientists who are affiliated with Polish and Canadian institutions. The article was titled and authored as follows:

Energy intensities, EROIs (energy returned on invested), and energy payback times of electricity generating power plants

D. Weißbach a,b,*, G. Ruprecht a, A. Huke a,c, K. Czerski a,b, S. Gottlieb a, A. Hussein a,d
a Institut für Festkörper-Kernphysik gGmbH, Leistikowstraße 2, 14050 Berlin, Germany
b Instytut Fizyki, Wydział Matematyczno-Fizyczny, Uniwersytet Szczeci_nski, ul. Wielkopolska 15, 70-451 Szczecin, Poland
c Institut für Optik und Atomare Physik, Technische Universität Berlin, Hardenbergstraße 36, 10623 Berlin, Germany
d Department of Physics, University of Northern British Columbia, 3333 University Way, Prince George, BC V6P 3S6, Canada

The article does not confine itself to storage, but also deals with the generation of electric power based on the EROI (Energy Return on Investment) – the ratio of the energy delivered by a process to the energy used directly and indirectly to fuel that process. Here is how the article starts:

The economic efficiency and wealth of a society strongly depend on the best choice of energy supply techniques which involves many parameters of quite different significance. The “energy returned on invested”, EROI (often also called ERoEI), is the most important parameter as it describes the overall life-cycle efficiency of a power supply technique, independent from temporary economical fluctuations or politically motivated influence distorting the perception of the real proportions. The EROI answers the simple question “How much useful energy do we obtain for a certain effort to make this energy available” (the terms “effort”, “useful”, and available will be specified below).

Both Dr. Morgan’s guest blog and my own the following week presented the end results in the form of the same graph, but for the sake of convenience, I will show it again here:

Buffered - Unbuffered EROIIn last week’s blog I quoted the Weißbach paper as to the origin of the economic threshold to show that it has nothing to do with physics but is instead based on economic criteria. The paragraph below describes the origin of their data. They came from LCA analysis, and as the article mentions, they are controversial.

In this work, based on several LCA (life cycle assessments) studies, EROIs will be calculated by using a strictly consistent physical definition thus making the energy producing techniques comparable to each other. Energy input with the highest quality difference, i.e. thermal energy and electricity, are listed separately (given in percentage electrical of the total energy input), so the factor of interest, either the EROI or the EMROI can easily be determined and compared.

For the purpose of deciding which energy sources are suitable for global energy transition as replacement for reliance on fossil fuels, reliance on LCA has serious problems. The problems can be summarizes in terms of two main drawbacks:

  1. The necessity to draw subjective boundaries to define the scope of the analysis
  2. Great dependence on the particular set of technologies that are in use.

The two main inventories that are included in most analyses are energy and water. Both inventories suffer from the same broad range of values as measured in different facilities. I just recently returned from a conference in Iceland in which I presented our work on water stress (“The Many Faces of Water Use” by Gurasees Chawla and Micha Tomkiewicz; 6th International Conference on Climate Change, Reykjavik, Iceland (2014)). One of the issues that we discussed there was the concept of virtual water:  the “sum of the water footprints of the process steps taken to produce the product” – an idea that constitutes part of the LCA analysis of products. For instance, the typical virtual water of fruits is 1,000 m3/ton. To remind us all, the weight of pure water in these units is 1ton/1m3, so the weight of the virtual water is 1,000 times the weight of the product itself. Where did the extra water go? For the most part, it either became waste water or evaporated.

Yes they are blaming the US for the depletion of Mexican water but  in fact they should blame themselves because they are subsiding the Mexican strawberries growers by not charging them anything for the water that they use so that they will be able to better compete  against the American growers.

Here’s one example of the concept of virtual water, as given in an article in a Mexican science magazine: when the US imports strawberries from Mexico, the imported strawberries conceptually “carry” with them all the virtual fresh water that is so greatly needed in both countries (Camps, Salvador Penische and Patricia Ávila García, Revista Mexicana de Ciencias 3:1579 (2012)); this equates to the US “stealing” water from the Mexicans. As a result, some are blaming the US for the depletion of Mexican water, and charging our country with immoral economic capitalism.

Meanwhile when proper water management is being used (mainly waste water treatment), the virtual water can be reduced by 90%.

Let’s get back to energy storage with this section from the Weißbach paper:

4. Usable energy, storage, and over-capacities

Power systems provide exergy (electricity), but they must do it when this exergy is required, the second quality factor of usability. For the energy output, although the term “available” is easy to implement by defining the connection point to the network (as done here) or to the consumer, the term “usable” is more complicated. It implies that the consumer has an actual need for the energy at the moment it is available. It also means the opposite, that energy is available when the consumer needs it. There are only three possibilities to make the energy output fit the demand.

  • Ignoring output peaks and installing multiple times of the necessary capacity as a backup to overcome weak output periods.
  •  Installing storage capacities to store the peaks, with reduced over-capacity plant installations (short: buffering).
  • Adapting the demand to the output at all times.

The third point is obviously not acceptable, because one becomes dependent on random natural events (wind and PV solar energy). A developed and wealthy economy needs predictably produced energy every time, especially the industry needs a reliable base-load-ready output to produce high quality goods economically. So only the first two points are acceptable, whereof the second one is the economically most promising. Some energy generation techniques need more buffering (wind energy, photovoltaics), some less (solar CSP (concentrating solar power) in deserts, hydro power) and the fuel based ones almost no buffering (the fuel is already the storage). Technologically, this can only be solved by storage systems and over-capacities which are therefore inside the system borders, “replacing” the flexible usage of mined fuel by fuel-based techniques. In opposite to that, the IEA (International Energy Agency) advises to consider the backup outside the system borders without any scientific justification [6].

There is no argument that synchronization of electricity supply and demand is required – and not only with use of intermittent, sustainable sources such as wind and solar. Synchronization is also is required now to adjust for the peak and trough in use, but it is considerably smaller than the need with intermittent resources. However, the use of batteries is not the only option. Similar to proper water management, movement of electrical power from places of excess capacity to places of excess need by the use of smart grids, is an important option. In addition, many places combine different forms of energy, with different variability, to adjust for the intermittency of the sources. There is no question that these options reduce the EROI as well. By how much – I have no idea. Similarly to the water management case, it will depend critically on the boundaries set in the modeling.

This posting is getting to be too long. I will finish off with two short comments on the actual EROI calculations and expand in the next blog on the biomass calculations that demonstrate the close correlation between the science and politics.

As to limiting the analysis of photovoltaics to Silicon, here is the quote from the Weißbach article:

7.2. Solar photovoltaics (PV)

So far, only Silicon (Si) based PV technologies are applicable on a large scale, so only those have been evaluated here. CIGS- or CdTe based cells are no option since there is not even a fraction of the needed Indium or Tellurium available in the Earth crust and organic cells are still far from technical applications

We obviously cannot cover the planet with enough CIGS (Copper Indium Gallium Selenide) or CdTe to satisfy our energy needs, but they can and will be part of the spectrum of technologies that we use to replace fossil fuels. Si based cells are currently the overwhelming majority of active devices but once we are raising “in principle” arguments to stop development of alternative energy sources, we’d better be as inclusive as possible.

Looking at the figure above, the only two viable alternatives to fossil fuels are nuclear and hydro. The number of hydroelectric sites available is quickly diminishing, however, which leaves us with nuclear energy. Germany recently reacted to the 2011 Fukushima nuclear plant’s meltdown by completely discontinuing development of nuclear power, and it is far from the first time people have expressed fear of the energy source’s possible repercussions. So nuclear power might have other issues beside EROI. As seen from the graph above, the Weißbach paper lists nuclear power as having the highest value of EROI. The scientific community is full of literature arguing other opinions. A paper in Scientific American that summarizes EROI literature data (Mason Inman. April 2013) illustrates the discrepancy regarding nuclear energy – from values smaller than 1 (not an energy source) to the cited EROI to be between 40-60 for centrifuge-enriched uranium. Wikipedia, in its piece about EROI, gives the value for nuclear energy to be 10 for a diffusion-enriched plant (reference not provided). All of this provides enough information to show us more research is needed on the EROI of future energy sources. What it certainly does not do is guarantee with full security that we can currently predict the unique energy mix that will be necessary to displace or replace the use of fossil fuels.

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