LCOE for Hydro Projects – Pick a number, any number!

Posted in Uncategorized at 10:52 pm by Administrator

One of my pet peeves has been a metric with the glamorous acronym LCOE which stands for Levelized Cost of Electricity. This is the “go to” number when evaluating electricity generation sources and comments about solar and wind reaching “grid parity” relate to this measure.

My annoyance comes from comparisons of LCOE for solar (PV and thermal), wind, and hydro which truly is like comparing apples to zebras. In a recent publication by the respected Energy Information Agency the following figures for Total System LCOE were presented in Table 1b;

Wind: $64.50
Solar PV: $84.70
Solar Thermal: $235.90
Hydroelectric: $67.80

These figures are similar to others I have seen published in many places and they have never made any sense to me.

My parents had a cottage on Lake Agnew in Ontario which was formed by the building of the Big Eddy dam in 1929. There are 5 other smaller dams within a short distance and I know that they are all still operating and producing significant value for their owners. Several are more than 100 years old and will not be decommissioned in the foreseeable future.

So it is clear to me that these dams produce the least expensive electricity that can be generated from any source. Why then is it that LCOE values for hydro are not dramatically less than other renewable sources?

After some investigation it has become clear that this is an issue that has a lot more to do with politics and “spin” than it does with anything meaningful. And the same problem applies to any capital intensive project that has a very long service life (for example, solar thermal with molten salt storage which has a major advantage over solar PV because it can generate electricity 24 hours a day to meet peak demand).

In this post I will focus on the “Site C” dam in British Columbia, currently under construction. For this particular project is is possible to say that the LCOE is $150/MW-Hour or $28/MW-Hour – neither statement is factually wrong but one is more realistic and more likely than the other. This is a large discrepancy and demands an explanation.

The major factors underlying this wide variation in values for LCOE are the cost of capital, the time period being considered, and the forecast capacity factor for the dam.

Anyone that has purchased or has considered purchasing a house understands that the longer the amortization period the more you will end up paying for your house. If you paid your mortgage off in 20 years at a 6% interest rate you would end up paying about 1.8 times the purchase price (the total interest paid would amount to about 80% of the purchase price). If you paid the mortgage over 35 years at a 6% interest rate you would end up paying almost two and a half times the purchase price (note that I use 6% as the interest rate = discount rate because that is the BC Government mandated rate for assessing large capital projects).

Given that reality why would anyone choose a 35 year amortization period rather than a 20 year amortization period? Why? – because longer amortization periods require lower monthly payments. As a result there is always a trade-off between what a house purchaser can afford to pay each month and how much they will spend in total to purchase the house.

So imagine if you paid off your house over 70 years. Most houses are still being used for at least that length of time. Many houses in Europe are hundreds of years old. Choosing a 70 year amortization period would reduce your monthly payments even further but at a 6% interest rate you would end up paying over 4 times the purchase price for your house. That doesn’t make sense and banks don’t offer mortgages for more than 35 years.

But that amortization period is exactly what is used in the most commonly published LCOE values for Site C.

Now you might wonder why BC Hydro would choose that approach when it clearly results in the highest total cost for the Site C dam. Well, if you need to present the lowest LCOE during the amortization period then longer amortization periods give you lower numbers. That doesn’t make sense but the optics are better.

For example, if you used a more realistic amortization period of say 30 years the LCOE during that 30 year period would be around $125/MW-Hour. That is not a very attractive number. It also does not reflect the true cost of electricity that will be produced from this dam.

In order to understand the true long-term LCOE it is necessary to consider the period of time after the capital cost for the dam has been paid off (end of the amortization period) until the end of life for the dam.

How long will the Site C dam be in operation? There are many hydro dams in the world that are more than 100 years old and operating just as efficiently as when they were constructed. Personally, I think most of these dams will be in operation in a thousand years. Why wouldn’t they be? (the Cornalvo dam built by the Romans is over 1,800 years old!).

However, projecting service life beyond 100 years is a bit speculative so let’s leave it at 100 years. That’s what BC Hydro has done in published materials for Site C.

If a 70 year amortization period is used then the only costs for the dam over the last 30 years are operating and maintenance expenses which are very small compared to the capital cost. Although it is again highly speculative to try and forecast O&M expenses 70 years from now reasonable guesses result in LCOE values of $5-10/MW-Hour. Combining the costs during and after the amortization period for the Site C dam results in LCOE values of around $75-90/MW-Hour.

But what if a more realistic amortization period of 30 years is used? BC Hydro could easily borrow that amount on capital markets or issue bonds with that type of maturity. In that case the LCOE during the first 30 years (assuming 6% interest/discount rate) would be $125 but the LCOE taken over the full 100 years would be about $41/MW-hour. That’s a much more attractive number.

It will likely even be better than that.

The LCOE values quoted so far have been based not only upon 6% interest rate but also using a capacity factor of 55%. That is to say that the dam would only produce 55% of the electricity that it is capable of producing. The capacity factor will depend upon demand and water conditions. Within the next 100 years all automobiles will almost certainly be electric drive which will significantly increase electricity demand in the province. If Alberta follows through on its commitment to eliminate burning coal to generate electricity then there will also be additional demand on BC hydro power as a balancing resource for wind farms. Barring a drought it is conceivable that the capacity factor for the site C dam could increase to as much as 75%.

And what about interest rates for a large loan? BC Hydro would be able to obtain capital at the most attractive rates possible for a loan of the size required for Site C. BC Hydro could issue a Site C 30 year bond at a rate of 4.5% which would be competitive with other high quality debt instruments.

Using an interest/discount rate of 4.5%, an amortization period of 30 years and a capacity factor of 60% would yield LCOE of about $32/MW-hour over 100 years. In my opinion that is the most realistic and likely LCOE for the Site C dam.

The tables below provide other values which indicate the sensitivity to amortization period, interest/discount rate, and capacity factor.

It it clear to me that hydro, amortized over a reasonable period, is by far the least expensive renewable resource available. More importantly, hydro power is available when it is needed each and every day because of its ability to follow system load. The only other renewable technology that can do that is geothermal and it is not available in most geographic areas (hydro-kinetic turbines would also be able to provide that kind of reliability and that technology deserves R&D funding and other financial supports).

For solar PV and wind it would only be reasonable to add a significant additional cost for energy storage or some other reliable generation source to provide power on calm nights. Those critical additional costs are conveniently ignored when comparing LCOE values for solar, wind, and hydro. As a result claims of “grid parity” for solar PV and wind are nonsense. Solar thermal with molten salt storage, on the other hand, is becoming a reliable and cost effective generation source in subtropical regions as demonstrated by a recent project by Solar Reserve being built in Chile.

One final note. It can be argued quite reasonably that those of us who will “shuffle off this mortal coil” before the Site C dam has been paid for will never see the benefits of the low cost power this dam will generate for decades or perhaps centuries in the future. So be it. We have, without question, enjoyed and will continue to enjoy some of the world’s lowest electricity rates because of the investments made in dam construction decades ago. As far as I am concerned I can imagine no greater legacy for our children and grandchildren than a source of clean, renewable energy that will last for their lifetimes and beyond.


If it ain’t a lie it sure ain’t the truth

Posted in Uncategorized at 5:24 pm by Administrator

I have complained previously about the misrepresentations published about renewable energy. In most cases the authors just seem to be so overcome with excitement about some new milestone achievement so that they lose sight of the big picture. But I recently ran into a post from 2016 that demonstrates more clearly than anything else I have read just how foolish these articles are.

The title of the article is

The German conundrum: renewables break records, coal refuses to go away

The article opens with the following statement:

“Renewable energy sources, taken together, covered 32.5% of German electricity consumption in 2015, while lignite provided only 26%. Since 1990 the electricity output from renewables has risen tenfold to last year´s level of 194 TWh. The year-on-year increase was also the highest on record – a staggering 31.6 TWh.”

The above statement is not true but it is not exactly a lie either.

A few paragraphs later there is another statement which only confuses matters further.

“This undisputed success was, however, muted by the fact that production from lignite and bituminous coal hardly declined (a decrease of a mere half-percent or 1.4 TWh). This is a problem since the German plan to battle climate change includes renewables replacing dirty coal-fuelled sources, thus lowering greenhouse gas emissions.”

The article goes on to state that German consumption has been flat for a number of years and that in 2015 exports reached a new high of 60 TWh, an increase of … wait for it … 31 TWh – almost exactly the same amount as the increase in renewables in 2015. That is not a coincidence. The last paragraph of the article speculates that the exports are from coal-fired plants when renewables are generating a lot of electricity. That happens primarily mid-day in the spring and on windy nights.

Attributing all exports to coal-fired plants is nonsense. An electron is an electron regardless of how it was generated.

The reality is that exports take place not because Germany’s neighbours need or want German electricity – up until now they haven’t had any choice but to deal with excess power dumped onto the regional grid by Germany’s uncontrollable renewables. That situation is changing as Germany’s neighbours begin to install devices to limit the flow of electricity between countries. Upon completion of those projects it could well be that German wind producers are forced to curtail the generation of electricity. That is already happening in Denmark where wind farms are paid not to produce power.

To my way of thinking there is some irony in the fact that within the Euro zone there is free movement of people but soon electrons will have to show their passports to cross national borders.

Considering the export situation it would be accurate in the first paragraph of the article to state that renewables represented 32.5% of German electricity production. To say that it represents the same percentage of German consumption is, at best, misleading because exports increased in lock step with renewable electricity generation.

The article also implies that coal-fired generators are “hanging on” by turning to the export market. The fact of the matter is that Germany’s coal-fired plants have to keep running so that they can provide power when wind generation disappears, which happens often. Utilities would actually prefer to operate their super efficient, low CO2 emissions Combined Cycle Natural Gas plants but they can’t afford to. Given that Germans already pay some of the highest retail prices for electricity in the world (largely because of levies to support the development of renewables) there is no appetite for the introduction of more expensive generating sources.

It is clear from developments over the past several years that increasing wind capacity in Germany further is literally pointless. When winds are blowing strongly there is already far to much electricity being generated and when winds are calm Germany has no choice but to burn coal – a lot of coal.

Given that the amount of coal burnt has actually increased over the past 6 years even as Germany built out the lion’s share of its solar and wind capacity, it is obvious that Germany has not managed to reduce its dependence upon reliable fossil fuel based thermal plants. It seems highly unlikely that the planned decommissioning of nuclear plants can continue unless there is a corresponding increase in coal-fired or natural gas-fired generation which would completely blow up Germany’s CO2 emission reduction goals (see this very comprehensive review of the situation for more details).

The lesson of the Energiewende is that some solar and wind can be introduced into the grid without causing too many problems as long as reliable generating assets are all maintained. But at some point the costs of adding more renewable generation far outweigh any possible benefits.

The situation reminds me of the iconic cartoon “The Sorcerer’s Apprentice”.

Getting one enchanted broom to help out with the chores is awesome. But having an army of out-of-control brooms doing the same thing just leads to a lot of spilled water. That’s where Germany is at. Just not as entertaining to watch.

For some ideas on how we actually can make the transition to a future powered by renewables check out my Sustainable Energy Manifesto.


The Trendline is not good

Posted in Uncategorized at 6:09 am by Administrator

Going on 4 years ago I wrote two blog posts outlining what I thought were the best case and worst case scenarios for the five years from 2013-2018 in terms of developments in renewable energy. Given recent events in the United States I thought it might be interesting to revisit those posts and see where we stand at the 80% mark.

In terms of the “best case” scenario I think it is fair to say that essentially none of the good things I had hoped for have come to pass.

I wish I could say the same about the “worst case” scenario.

2013: I was concerned that there would be a major grid failure in Texas because of the variability of wind generation. That didn’t happen and the Texas grid has been remarkably stable despite some growing pains and the necessity to build a lot of new transmission capacity. The 18 GW of wind capacity in Texas has been stabilized by more than 5 GW of new Natural Gas generation commissioned since 2013, a lot of it in the form of Peaking plants that can respond to the variability of wind generation.

However, the situation did come to a head in South Australia in the fall of 2016 where a large regional blackout was blamed (rightly or wrongly) on a rapid change in wind generation. Independent System Operators such as AEMO and ERCOT in Texas are very concerned about grid stability and continue to take steps such as authorizing the building of new natural gas fired plants to address any concerns. However, that stability will become ever more difficult to protect as more and more renewables are added to the mix. This article by Gail Tverberg provides one of the most comprehensive summaries of current and predicted problems that I have come across.

2014: I suggested that the defeat of Angela Merkel in the general elections could result in a serious slowdown of the Energiewende. As it turned out Merkel was re-elected but the slowdown is happening regardless. Solar panel installations have slowed dramatically as shown by the graph below.

Limitations have also been put on further development of wind energy and there is even the possibility that a significant number of existing turbines will be scrapped by 2020.

In my worst case scenario I warned that the development of solar energy technology in Spain was at risk. Very sadly in my opinion the advances made by Spain with Concentrated Solar Power installations, which can provide power in the late afternoon and into the night using molten salt storage, have come to a halt. The burden of subsidies that were used to support this development as well as the deployment of a large amount of wind generation have simply become too great. Although Spain continues to generate an impressive percentage of total electricity demand from Wind and Solar very little new capacity is being added as of 2017.

The last issue I discussed for 2014 was the probable closure of many coal-fired plants in the U.S. Moth-balling of coal-fired plants has taken place at a steady pace since 2013 due to concerns about CO2 emissions and the cost of meeting MACT regulations. Firm reserve capacity has not declined as quickly as I feared because there has been a “dash to gas” with the prolonged period of low natural gas prices.


In my “worst case” post I stated that even relatively minor levels of roof-top solar panel generation would cause so many problems in Hawaii that measures would be taken to end net metering which would effectively end the solar “boom” in the Aloha State. Those concerns have largely been realized. Solar permits have continued their downward trend, reaching new lows in January and February, 2017. Net metering has been stopped which I believe was necessary. There is the potential for roof-top solar installations in Hawaii to stagnate or actually decline as roofs have to be replaced and the economic value of solar panels in Hawaii does not justify the cost of re-installation.


In 2013 I felt that the cumulative impact of the short-sighted development of wind and solar would lead to major grid issues throughout North America by 2016 and would force major policy changes and the rapid development of natural gas fired peaking plants. That hasn’t happened yet. What I failed to take into account was that there was already enough firm capacity in the system to meet peak electricity requirements including a healthy reserve before the development of renewables began. As a result adding wind and solar has just produced a situation where generation far exceeds demand at mid-day and during very windy conditions in many areas.

That cannot continue.

As Germany has demonstrated so well, coal-fired plants and natural gas-fired plants cannot be run profitably if they are only able to sell electricity when winds are calm and there is little sunshine. Economic pressures will mount, plants will close, reserves will reach critically low levels.

The path taken by Denmark and Germany has also effectively “poisoned the well” for the rest of Europe. Germany and tiny Denmark use the European grid as a dumping ground for renewable energy at mid-day in the spring and summer and anytime when winds are strong. Conversely, Denmark and Germany import energy like there’s no tomorrow when winds are calm at night. Germany’s neighbours are now moving to build a technological “wall” around the country that was once part of the stable foundation of energy generation for the continent.

What’s the Bottom Line?

Unfortunately I would have to conclude that we are measurably closer to the situation pictured above. The German Energiewende is grinding to a halt despite the constant greenwashing and attempts to minimize the growing problems. Solar is near its deathbed in Hawaii and other states such as Arizona and Nevada are following the same path.

Energy storage is the problem. Energy storage has always been the problem. That’s why rural electrification wiped out the windmills that were once commonplace on prairie farms.

But the good news is that energy storage is the only problem. With reasonably priced energy storage we could save up solar and wind energy when it is available and use it when we need it.

Energy storage should have been the first problem we tackled, not left as a “homework” assignment to be completed at a later date. And I believe there is still plenty of time to develop workable energy storage solutions. But to do that we have to stop this senseless outpouring of public funds to support further wind and solar developments. And to get politicians and funding agencies to make the necessary policy changes the general public has to come to understand that the current approach has absolutely zero chance of being successful.

The lobbyists for the wind and solar industries are not being truthful. Very sadly they have many allies in the form of well-meaning green energy advocates who fail to acknowledge that the development of wind and solar without energy storage is a fool’s errand. It will certainly make a lot of people rich but it will not transition our economy to use sustainable energy.

There are a few voices that are saying, in effect, the renewable “emperor has no clothes”. Euan Mearns, Gail Tverberg, Paul-Frederik Bach – I would like to think that I myself am on that list. We are not pro oil & gas, we are not anti-renewables. Quite the opposite. We are simply trying to point out, through thoughtful, objective and evidence based analyses, that renewable energy development is not headed in the right direction.

In 1881 French engineer Ferdinand de Lesseps, emboldened by his successful construction of the Suez Canal, initiated excavation of the Panama Canal. Eight years later the company sponsoring the project went bankrupt. About $400 million (in 1881 dollars!) vanished, poured into the muddy channels of the Culebra Cut and Gatún. Far more devastating were the deaths of more than 22,000 workers.

Twenty-five years later the Americans successfully completed the project. Better equipment and organization were important factors that led to that positive result. But the key to the successful completion of the Panama canal came in the form of simple metal cannisters strapped to the backs of 4,000 members of the “mosquito brigades”.

The French had not been defeated by engineering difficulties. They were overcome by a tiny but lethal enemy.

The Americans correctly identified the single most difficult problem they had to overcome in order to complete the Panama Canal. They had to keep their workers healthy.

Before the steam shovels started working a year-long war was waged against the mosquito. Buildings were fumigated, ditches and ponds were sprayed repeatedly or filled in. When work finally began there were still cases of malaria and yellow fever but not to the extent that the project was ever in jeopardy.

“Start off the development with the most difficult elements of the design” – Elon Musk.

Such a simple and logical statement. And yet we keep ignoring it.

Making the transition to a sustainable energy environment will not be cheap and it will certainly not be easy. But it is absolutely necessary.

When will we start spraying the mosquitoes?


The $US 134 Trillion, 100 Year Challenge

Posted in Uncategorized at 7:32 am by Administrator

As anyone who has read some of my blog posts knows I do not believe that we should be basing our transition to a sustainable energy environment on the need to moderate climate change. I’m not convinced that eliminating the burning of hydro-carbons altogether would make a huge difference to what our planet is doing.

But having worked in the oil & gas industry for more than 25 years and despite the current glut of oil on world markets there is one thing I am quite sure of. We will run out of hydro-carbons that can be economically extracted in less than 100 years – I might even see a significant shortfall of world production and as a result much higher prices within my lifetime.

It would be reasonable to argue that predictions of “peak oil” have consistently been incorrect as higher prices and more sophisticated technologies have helped maintain production levels. But hydro-carbons, and crude oil in particular, are finite resources and they will eventually run out. As a result I have done some analysis of how much of a problem that could be and how quickly we need to address the problem.

First things first. How much energy is the world currently using and what fuels are meeting energy demand?

Trying to find accurate and consistent numbers on global energy consumption is much more difficult than it should be. I was struck more than once by the obvious bias towards inflating the impact of renewables and their role in meeting global energy demand. This is a phenomenom that I have identified in a previous post.

One good source that provides an overview of global energy use is the U.S. Energy Information Agency. Figure 1-5 from the International Energy Outlook 2016 provides data from 1990 onwards with forecasts to 2040.

The table below displays the data from this report for 2015, converted from Quadrillion BTU to TW-Hours.

Coal Natural
Renewables Nuclear Total

55,599 47,116 37,673 20,548 7,689 168,625

I always like to have multiple sources for information, especially when there are unit conversions involved. The following sources provide confirmation for the EIA report figures.

Oil: Bloomberg quoted an International Energy Agency figure for demand in 2015 of about 94 million barrels/day (bpd) which translates into about 58,293 TW-Hours which is within 5% of the figure provided by EIA. BP pegged the average amount as 92 bpd which would amount to 57,066 TW-Hours, even closer to the EIA figure.

Coal: Enerdata lists 2015 coal production as 7,800 Megatons which translates into 46,084 TW-Hours, very close to the EIA figure.

Natural Gas: BP listed Natural Gas production as 3,500 Billion Cubic Meters in 2015 which translates into 36,606 TW-hours. This figure is also close to that presented by EIA.

Combining these figures yields a figure of 139,742 TW-Hours for hydro-carbons compared to the EIA figure of 140,387.

Nuclear: Multiple sources including the World Nuclear Association and the Shift Project list global nuclear power production at about 2,400 TW-Hours rather than the 7,689 TW-Hours presented by the EIA. The EIA report itself presents 2,300 TW-Hours as the proper figure for nuclear generation for 2012 in Figure 1-7.

The source of the discrepancy is the difference between “Total Primary Energy Supply” and “Total Final Consumption”. “Total Final Consumption” discounts the energy used in generation, distribution, and conversion before reaching its final end user. Because hydro, wind, solar, and biomass all deliver electricity or heat to end users these sources are not impacted. Fossil fuel energy sources and nuclear are very significantly impacted. For example, in burning coal or consuming uranium fuel in a nuclear reactor to generate electricity more than 60% of the energy content of the fuel is lost as heat and through the limitations of thermodynamic engines. Therefore 7,689 TW-hours of uranium derived energy are consumed in nuclear plants to deliver 2,400 TW-hours of electricity to consumers.

Renewables: This is the category which has the most confusing and difficult to confirm backup data.

The best source of information regarding the complexities involved with renewables is the Ren21 network. The Global Status Report published by the group in 2016 and weighing in at 272 pages, is a great reference document although it also confuses matters a bit. The confusion comes because this report uses percentages of Total Final Consumption rather than actual consumption.

Using a global Total Final Consumption figure of 102,000 TW-Hours for 2015 (implied by the percentages for hydro and nuclear and roughly confirmed by the figure of 9,300 Mtoe on page 28 of the IEA Key World Energy Statistics) figure 1 of the Global Status Report can be reworked to present actual consumption rather than percentages, as shown below.

The aggregate figure of 19,692 matches the figure presented for renewables in the IEA report (20,548) quite closely. From the REN21 report almost half of this “renewable” energy is in the form of “Traditional Biomass” which represents the “use of fuelwood, animal dung, and agricultural residuals in simple stoves with very low combustion efficiency” (Note 12, page 201), primarily in undeveloped regions. Although this energy source is technically renewable it is certainly not one that we would want to increase or even maintain decades into the future. In fact the REN21 report points out that as the economic circumstances of a population improves these “Traditional Biomass” energy sources are replaced by the burning of hydro-carbons.

The largest category under “Modern Renewables” is “Biomass, Geothermal, Solar Heat” a large portion of which is produced in Combined Heat and Power (CHP) installations such as those common in Denmark. The economics of CHP plants are being under-mined by subsidized wind and solar power in many jurisdictions and as a result growth in this energy source will be severely constrained in the future.

The second largest category under “Modern Renewables” is hydro. Hydro has many very positive attributes including very low generation costs over many decades. It is a fact that almost all of the large installations developed in the last 100+ years continue to operate efficiently and reliably today. However, increasing environmental scrutiny and few remaining sites with significant potential will severely limit hydro growth in the developed world. There is significant potential in the developing economies but any new hydro power sources in those countries will be used to serve increasing domestic demand.

So in the end the job of replacing fossil fuels will come down to wind and solar (and hydro-kinetics and geothermal if they ever get the support they deserve).

The hype around wind and solar is amazing and very deceptive. It was extremely difficult to find reliable figures regarding actual generation from these sources although there was no problem finding hyperbolic statements about additions to wind and solar capacity. But commonsense tells us that because a solar panel can deliver 1 KW of energy between noon and 1 pm that does not mean that it can produce 1 KW of energy 24 hours a day, 365 days a year. Germany, with the second largest build-out of solar power in the world reports that solar generation over the course of a year is about 11% of installed capacity. Worse still, generation in the peak demand periods during the winter is almost zero.

Things are not much better with wind – maybe worse. Although wind generation continues to grow, availability of wind at peak demand times is unpredictable and inconsistent. On a cold, calm night in Northern latitudes (where more than 50% of the world’s population live) we will continue to be 100% reliant on fossil fuels until cheap and reliable energy storage solutions are developed.

But let’s assume that energy storage solutions can be developed sometime in the next few decades. How much wind and solar generation will be needed and how much will the development of those sources cost?

From the figure above wind and solar currently represent about 1.4% of the “Total Final Consumption” or about 1% of the “Total Primary Energy Supply”. According to REN21 the contribution of Fossil Fuels towards the “Final Total Consumption” is over 78%. A transition to 100% renewables will inevitably involve significant transmission and energy storage losses but for the moment lets ignore those. Therefore in the best case scenario wind and solar will have to increase by a factor of 78/1.4 = 55.7.

The development of wind and solar generation has been taking place aggressively since about 2004 when Germany started providing significant financial support for its Energiewende. Since then the world has invested more than $US 2.4 trillion in the development of renewables.

While it is true that the cost of renewable generation has decreased significantly during that time I would argue that the need to provide energy storage solutions and vastly upgraded transmission systems will more than make up for those savings. There will also be difficult challenges around replacing transportation fuels and finding new source materials for plastics and the many other products based upon petroleum feedstocks.

As a result the probable cost for the energy transition in constant 2017 dollars will be on the order of 2.4 * 55.7 = $US 134 Trillion. I think it will actually be much higher than that. That scale of investment would require that the world triple its current level of investment in renewables and maintain that higher level of investment for the next 100 years.

The next question is, do we have a hundred years to make this transition? I don’t think so. Peak oil is coming. That is inevitable. The date that peak oil will happen is the subject of heated debate. Some argue that oil production will start declining within a decade, others that production declines will not begin for many decades. Many major oil producing countries are already well past “peak oil” production.

Personally, I believe that a growing resistance to “fracking”, the rapid decline rates of tight reservoirs, and increasing demands for oil in developing economies will result in a permanent shortfall in oil production vs. demand by the middle of the century.

In a very thoughtful and I believe accurate article Robert Rapier postulates that peak oil is dependent upon price to a large extent. Higher prices allow the use of more expensive exploration and production techniques which bring to market supplies that were previously uneconomic. A graph from a 2008 publication serves to illustrate how unconventional sources may begin to play an important role in future years.

However, there will come a time when the input costs required to bring new production on stream exceed the value of that production. After that point in time oil production will decline monotonically.

In the decades leading up to that milestone event it will become more and more expensive to find and develop oil and gas resources which will lead to higher prices for fossil fuels. That reality will provide more incentive to develop renewables but it will also consume more and more of the world’s GDP to keep the hydro-carbon based economy functioning. So at a time when the world will need to spend ever increasing amounts to develop renewables and potentially on climate change mitigation measures rising energy costs will become a serious problem.

What’s the bottom line?

In order to transition away from a hydro-carbon based economy before oil and Natural Gas either run out or become prohibitively expensive the following must happen;

1) Investment in the development of renewables must ramp up to approximately triple what it was in 2016 and stay at that level for the next 100 years.

2) One or more very inexpensive and reliable (for decades) energy storage systems must be invented and deployed at a scale completely unimaginable today. To get an idea of how challenging that may be I invite you to read Euan Mearn’s analysis of the storage requirements to backstop wind in the U.K.

3) Peak Oil must occur after a significant percentage of the needed renewable generation is in place. It has taken 15-20 years to get to 1.5% of “Total Final Consumption”.

4) Global “Total Final Consumption” cannot increase or at worst must increase very slowly so that additions in renewable generation can displace fossil fuels. Inevitable increases in the energy consumption in developing economies must be offset by reductions in the energy consumption of developed economies.

Sounds tough, doesn’t it? But who among us doesn’t like a challenge?

And it could be worse. Consider the scenario described in this clip from Ghostbusters!

I think I will sign on to be one of Elon Musk’s first Martian colonists.

Unit Conversions

Oil: 92 BOE per day -> 33.58 billion BOE per year -> 57,066 TW-hours

Coal: 7,800 Megatons coal * 20.16 Million BTU/ton = 157.248 Quadrillion BTU -> 46,084 TW-hours

Natural Gas: 3,500 BCM * 35,687,347 Million BTU/BCM = 124.905 Quadrillion BTU -> 36,606 TW-Hours

Total Final Consumption: 9,300 Megatons Oil Equivalent -> 768.769 Quadrillion BTU -> 108,075 TW-Hours


Hydrokinetics – The Renewable “Silver Bullet”

Posted in Uncategorized at 10:37 pm by Administrator

In searching for technologies that can aid in the transition to a low carbon environment the following characteristics would define the ideal new energy source;

Characteristic Wind PV Solar Large
Requires no fuel for operation
Reliable at peak demand times including winters in middle latitudes
Does not negatively impact the environment in a significant way1
Available in most geographic areas

1Of course some would argue that wind turbines and utility scale solar have negative environmental impacts but those are not severe compared to the environmental advantages of transitioning away from a hydro-carbon based economy.

From the table above the clear winner is hydro-kinetics which captures the energy of water flowing in a river without using a large reservoir.  And yet this is the least developed renewable source on the planet.  I would suggest that this ideal energy source faces challenges which are not technical but rather are political and regulatory.  This posting will discuss the state of hydro-kinetic developments and suggest a path forward towards wide-spread deployment (this post focuses on river hydro-kinetics technologies deployed successfully in North America – there are other projects underway overseas but these face many of the same issues discussed here).

Hydro-kinetics – An Attractive But Elusive Technology

 A number of companies have spent the last two decades attempting to commercialize hydro-kinetic turbines in one form or another.  These companies have consumed, in aggregate, well over $100 million in Research & Development funding, have overcome many technical challenges and have staged numerous successful trial installations.  However, despite the best efforts of talented and dedicated teams none of these companies have achieved a commercial deployment of a single hydro-kinetic turbine.

Free Flow Power

Free Flow Power developed a 40 KW turbine unit which was deployed in a test configuration in the Mississippi River near Baton Rouge for six months in 2011.  The results of the tests were encouraging and the company undertook detailed site evaluations and identified more than 3 dozen locations on the Mississippi where turbines could be installed.  A serious drought and low water levels in 2012 called into question the viability of many of the sites and the company decided to focus on retrofitting conventional turbines in existing dams that did not already have electrical generation facilities.

In late 2014 the company was split into a non-operating entity holding the Intellectual Property rights for the SmarTurbine and a new company, Rye Development was formed to pursue the dam retrofitting.


Hydro Green Energy

Hydro Green developed a 100 KW hydro-kinetic turbine unit which was deployed near Hastings Minnesota in 2009 in what is claimed to be the first licensed hydro-kinetic generating facility in the U.S.  This turbine operated until 2012 when Hydro Green Energy, like Free Flow Power, decided to focus on dam retrofit.


Clean Current

Clean Current was a Hydro-kinetic company that developed several versions of turbines for use in both saltwater and freshwater environments.  They conducted several tests of the technology, most recently at the Canadian Hydrokinetic Test Centre on the Winnipeg River in Manitoba from September, 2013 to May, 2014.  At the end of May, 2015 it was announced that the company was being wound down after 15 years of Research & Development work.


RER Hydro

With substantial funding from the Quebec Government RER Hydro developed a technologically advanced hydro-kinetic turbine unit which was deployed in the St. Lawrence River near the city of Montreal in 2010.  It functioned as designed for more than 4 years.

Based upon the success of this initial test the Boeing Corporation entered into a global marketing and distribution agreement for the TREK turbines in November, 2013.  Phase II of the RER Hydro business plan involved the production of 6 additional turbine units in a brand new manufacturing facility in Becancour Québec opened to great fanfare November 11, 2013.

On April 7, 2014 the Parti Québecois lost the Provincial election.  The new Liberal majority government immediately halted payments to RER Hydro that had previously been confirmed.

With turbine construction for Phase II well underway and purchase agreements being in place with suppliers RER Hydro was immediately short of funds. Shortly thereafter the company made a court application for the Issuance of an Initial Order under the Companies’ Creditors Arrangement Act which was granted.  All RER Hydro staff were laid off in July, 2014 and after several further court applications what remains of RER Hydro is the Intellectual Property, some inventory related to the turbines being constructed and the contracts with the Boeing Corporation.  The company was declared bankrupt at the end of 2015.


Verdant Power

Verdant has been working on tidal power turbines in the New York City area for more than 15 years. From 2006-2009 KHPS (Gen4) turbines were installed in the East River in a grid-connected configuration as part of the Roosevelt Island Tidal Energy (RITE) project. In 2012 Verdant was awarded the first commercial license for tidal power issued in the U.S. There is no indication that any turbines have been deployed or power generated in regards to this license.

Turbines developed by Verdant Power have been proposed to be installed as part of the Cornwall Ontario River Energy (CORE) project with $4.5 million in funding from various government agencies and utilities. The project has been ongoing since 2007 but it appears that in 2013 the project was abandoned.

In the spring of 2016 Verdant announced the formation of a partnership that will focus on hydro-kinetic projects in Ireland.


Instream Energy

Instream was formed in Vancouver in 2008.  In 2010 the company, in partnership with Powertech Labs, deployed an array of 4 25 KW turbines near the Duncan Dam in British Columbia, Canada.

In August, 2013 a second demonstration site was established near Yakima, Washington State, U.S.  As of August, 2016 the company has plans for 2 more demonstration sites in the U.S. and anticipates a project in Wales, U.K. in 2019.


Hydro-Kinetics vs. Wind and Solar

It seems clear from the number of successful demonstration projects that have been undertaken over the past decade that the engineering problem of manufacturing a hydro-kinetic turbine that can reliably generate electricity has been largely solved.  It also seems clear that by combining the engineering expertise and learnings from several of the existing designs any residual problems can be resolved quickly and new designs that minimize fabrication costs could be developed.

The barriers to the implementation of hydro-kinetics are no longer technical.

Hydro-kinetics generation, like large-scale hydro and geothermal is qualitatively different from wind and solar power because it is reliable and dispatchable.  As a result, a backup power source (natural gas-fired plants being the most popular alternative in the current low gas price environment) is not required.  This is a very significant advantage which is not reflected in the various economic analyses that are used to justify regulatory and financial support for renewable energy.

In order to fully transition away from a hydro-carbon based economy it is necessary to have access to reliable electricity generation at times of peak demand.  In the middle and northern latitudes (north of about 35 degrees) peak demand occurs in the late afternoon and evening as the requirements for light and heat reach their maximum.  Obviously there is no solar power available at that time.  Wind energy is highly variable and generally speaking cannot be relied upon to generate electricity during a specific time period.

The most valuable measure of the contribution of wind generation would be the amount of wind available during peak demand times.  Very few organizations are willing to investigate that important metric because it would be hugely detrimental to the case for subsidizing wind energy.

MISO’s Independent Market Monitor (Potomac Economics) noted in a June, 2013 report on page 39 that

“wind resource output is negatively correlated with load and often contributes to congestion at higher output levels, so hourly-integrated prices often overstate the economic value of wind generation”

The report states that the MISO practice of counting 13.3% of wind as reliable is much too high.  They recommend instead that a value of 2.7% would be more appropriate (page 16 of the report).

If anyone was inclined to make a truly fair comparison of generation costs for wind and solar there would have to be a very large additional cost to maintain a reliable backup generation source for when wind and solar were not available.  This would probably come close to doubling the true cost of wind and solar generation.

Hydro-kinetics sources do not suffer from this problem.  They are reliable and predictable and can scale up to any degree without causing problems on the grid.  No backup generation sources are required.

Hydro-kinetics generated electricity is much more expensive per kw-hour of nameplate capacity than wind and solar – probably on the order of $8-10/kw of capacity.  But when reasonable capacity factors for wind and solar are considered (30% and 15% to be on the generous side) then the costs are not significantly different.  But the very important advantage of hydro-kinetics is that it is reliable during times of peak demand.

As long as a KW-hour of electricity is judged to be of equal value no matter the source then wind and solar PV appear to be much lower in cost than hydro-kinetics.


The Value of a Hydro-kinetics Partnership

The barrier to wide-spread implementation of hydro-kinetic generation is not technical.

The primary barrier is the perception, widely held amongst renewable energy advocates, government officials, politicians, and funding agencies, that wind and solar PV are the best options to fight climate change.

Utilities, that have a deeper understanding of generation issues and understand the problems associated with wind and solar PV generation, are not actively engaged in the debate.  This is because they largely see renewable generation as a nuisance that they have to deal with, like environmental regulations.  They continue to build out new natural gas fired plants and even a few nuclear plants to provide reliable generation.  They also are learning to manage rapid cycling of their plants in response to fluctuations in renewable generation.

Utilities do not own the majority of wind and solar farms and of course have no financial interest in distributed sources such as roof-top solar.

Finally, because they are either publicly owned, or earn an agreed upon return regulated by Public Utility Commissions, utilities are not particularly concerned about any additional costs associated with unreliable and unpredictable wind and solar PV generation.  Whatever costs they have to incur, including maintaining a duplicate fleet of generation assets that can be available when wind and solar are not, will ultimately be born by the rate-payers, not the utilities.  Consequently, utilities are not advocating for sensible options like hydro-kinetics.

The other perception, which is unfortunately firmly grounded in reality, is that hydro-kinetic generation has not been proven to be a really viable option at this time.

All of the hydro-kinetic companies discussed in this post are relatively tiny, privately held firms that are generally under-staffed and under-capitalized.  That statement is not meant as a criticism – these firms have achieved remarkable engineering accomplishments and have overcome very difficult technical challenges.   But it would not be much of an exaggeration to say that all of these companies are about one failed grant application or unsuccessful project away from bankruptcy.  Several have already succumbed.

This situation lacks “critical mass” in every dimension – economic, political, regulatory.

The only way to overturn the perception that wind and solar PV are better options than hydro-kinetics is through a very significant lobbying and public relations effort focused not only on national politicians in the U.S. and Canada, but also on regulatory agencies and utilities.  Hydro-kinetics is a superior option.  No exaggeration is needed to make the case.  But the case does need to be made.  Regulatory agencies and even utilities need to be strong advocates.

Politicians need to believe that additional support in the form of production tax credits or feed-in-tariffs as well as increased R&D funding are justifiable based upon the superior value of hydro-kinetics as compared to wind and solar PV.

At the moment a number of small companies are advocating different approaches and technologies using staff resources that have limited time and money to tell their stories.  Decision makers are faced with trying to choose a “winner” which leads to no decision at all in many cases.

A partnership of these firms could fund a professional and credible full-time lobbying effort.  As unsavory as that might seem to leaders focused on the development of hydro-kinetic technology the reality is that wind and solar PV already have entrenched and vocal proponents at all levels of government.

A partnership of these firms could also fund resources dedicated to interfacing with various regulators to understand their concerns and educate them with regards to hydro-kinetic technology.

Rye Development and Hydro Green Energy have extensive experience with the complexities of licensing facilities on the Mississippi, which has to be one of the primary targets for hydro-kinetic development.

Instream Energy, as well as former staff members from Clean Current and RER Hydro, have knowledge and contacts within the Canadian regulatory establishment.  The Fraser and St. Lawrence rivers also have great potential for hydro-kinetic development.

Verdant Energy has had success with regulators with regards to tidal energy development.

The pooled expertise of these firms with respect to regulatory and environmental matters would represent a very significant resource to aid in the advocacy of hydro-kinetics in North America.

Would a partnership of hydro-kinetic firms require that some technologies be abandoned?  Only if it made sense.

It is likely that collaboration on engineering issues under mutual non-disclosures would be beneficial to all parties, each of which would retain the Intellectual Property for their particular implementations.

Rationalization of the supply chain for major components and consolidation of some fabrication would reduce costs by increasing volumes even if the final products were quite different.

Centralization of some non-core administrative functions such as web site maintenance, legal services, and grant application preparation could be explored in order to reduce costs.

The “outside world” would benefit from having a single communications channel and a single core message representing hydro-kinetics.   The various technologies being offered by partner companies would be presented as options to address a particular opportunity.

It would be possible to have competing solutions proposed for a particular project in some circumstances but that would not be ideal.  It should be kept in mind that the real competition is wind and solar PV, not other hydro-kinetic technologies.  It would be preferable for the partnership to advocate one technology for a particular opportunity based upon the geographic location and availability of support staff and resources.  The possibility of supplementing staff at one organization with knowledgeable and experienced staff from one of the other partners would enhance the credibility of a response to any particular opportunity.


In Conclusion

Hydro-kinetics should be one of the most important foundations for a transition to a sustainable energy environment; more environmentally benign than large scale hydro, more reliable than wind or solar PV, and vastly scalable with every large river offering development potential.

Given the amount of investment and engineering effort that has been undertaken to date without attaining commercialization it seems clear that the current decentralized approach is not very effective.  A hydro-kinetics partnership would allow the technology to attain critical mass without compromising the technical achievements that have been made or will be made in the future by partner companies.


The Revolution is Being Televised

Posted in Uncategorized at 8:37 pm by Administrator

This post isn’t directly related to alternate energy but discusses what I believe is a serious issue with the way that we govern ourselves. Problems translating the “will of the people” into political action will impact all policy decisions including those related to attaining a sustainable energy environment.

Political leaders, captains of industry, and ordinary citizens around the world are debating how it is that Donald Trump was elected President of the world’s greatest democracy and what impact that vote will have on a variety of issues, most notably International Trade and action on Climate Change.

Regardless of what Donald Trump may or may not do as President I feel that his election demands that we as citizens of the world ask ourselves a couple of very important questions. What is wrong with our democratic institutions and how can they be repaired?

The general consensus is that 2016 saw one of if not the most devisive and depressing U.S. Presidential campaigns ever. It made me recall the spoken-word song by Gil Scott-Herron from 1975. Unfortunately – very unfortunately – it turns out that he was wrong. The Revolution is being televised.

What we are witnessing is no less than the transformation of a very important exercise of citizen rights and responsibilities into a very bad reality TV show.

It started with a primary race that lacked focus on the Republican side, with more than a dozen contestants vying for the nomination trophy. Contrast that with a race on the Democrat side that pitted pure (perhaps naive) principle against a single-minded quest for power by an establishment politician with more than a few skeletons rattling around in her closet.

During the primaries Donald Trump’s schoolyard taunts alienated millions. But millions of people that feel alienated and manipulated by the “elite” applauded him for his lack of political correctness. Trump’s utter disdain for everything and everyone associated with “politics as usual” was a major factor that helped him win the primaries and the election.

Bernie Sanders, at the age of 75, tapped into the youthful desire for something to believe in. Young people in the U.S. and many other countries also feel alienated from a political system that seems sadly out of touch with their concerns and has been remarkably immune to their influence (consider the extremely short-lived impact of the ‘occupy’ movement).

Citizens of other countries (including my own Canada) might be tempted to characterize what went on during the 2016 U.S. Presidential race as a grotesque anomaly, something that could only happen in an electoral environment where candidates need close to a billion dollars to be “competitive” (2012 estimated spending by Obama/Romney was $2.6 billion). But I don’t think we need be so smug. The bigger issue, and in my opinion the reason that money has become such an important factor in elections, is the lack of engagement by the electorate.

If you truly believe that all politicians are power-hungry, unscrupulous, self-serving partisans, then why not vote for the one you find the most physically attractive, or the one that says that one thing in a TV ad that you relate to, or repeats one nasty allegation about their opponent that you find credible?

To me this is the fundamental problem that undermines the legitimacy of our democratic institutions. There have been too many cases where politicians campaign on a specific issue only to completely ignore it once elected. There have been far too many policy flip-flops, post-election priority adjustments, and “unexpected” financial revelations that prevent the successful candidate from keeping promises made during the election campaign.

The most troubling manifestation of this lack of engagement is the declining participation rates in the mature democracies. Routinely, about one in three eligible voters stays home. That was the case even in the hotly contested Brexit vote. Recent U.S. Presidential elections have experienced participation rates as low as 49%.

Citizens are not to blame. They are not lazy, stupid, or gullible. But they find themselves having to choose between politicians who all owe huge financial debts to the same group of wealthy backers. They also know that any politician they elect will be virtually invulnerable to popular opinion or voter dissatisfaction until shortly before the next election, if at all. For many people, far too many, the conclusion is that their vote really cannot make a difference so why bother.

In a world where societal changes come as fast as Donald Trump tweets and many people are unable to hold the same job for more than one election cycle our current form of democracy just doesn’t make sense.

Having one opportunity to express a political preference every 4 or 5 years is not enough to engage the electorate. That is especially true when the only way to express that preference is to physically travel to a polling station, wait in line for an indeterminate period of time and mark a piece of paper with a pencil.

Having to choose one political party that will necessarily represent a broad spectrum of positions on all manner of issues means that it is impossible for many citizens to feel totally comfortable with any of the available choices.

For the past 10-15 years most successful electoral campaigns have promised “change”. But after several sequential change agents have been elected voters continue to crave more change. Perhaps what is needed is not a change in policy or a change in the party in power but rather a change in the system itself.

Representative democracy is probably still the best hope to have a government “of the people, by the people, for the people” to quote Abraham Lincoln. It is not possible for even the most engaged citizen to obtain a deep enough understanding of every issue facing government to allow for direct democracy on a daily basis. So it does still make sense to choose representatives who can be tasked with the operation of government as a full-time job.

However, there are issues that arise on a regular basis that represent significant inflection points in the trajectory of the economy, care for the environment, civil rights and other issues of National importance. I would contend that for decisions being made on those issues there is a role for direct citizen input.

Many state legislatures make quite extensive use of citizen propositions which represent a kind of direct democratic input. As valuable as these propositions are they suffer from many of the same problems as general elections. Campaigns for or against propositions are conducted largely through Television advertising that attempts to summarize often complex issues into 15 or 30 second sound bites. And being associated with general elections, votes on propositions require that trip to the polling station that many electors find archaic.

I would suggest a different approach to the implementation of direct democracy in our political system. What follows are some ideas regarding how this might work.

What the Public Could Vote On

First, direct citizen input would be requested on motions put forward by elected representatives. The public would not have the authority to initiate votes. The process to do that would be overly complex and drafting legislation is complicated enough as it is.

So which votes would be subject to direct democratic input?

I would suggest that in Parliamentary democracies the Official Opposition could request public voting on Government motions. Sponsors of Private members bills could request public voting if they could attract the support of no less than 25% of all members.

In Congressional systems public voting on a Bill could be requested with the support of 25% of members in either the House of Representatives or the Senate (or equivalent bodies in other countries).

How Would the Public Vote?

Direct Democracy voting would be done on-line or by telephone over a 24 hour period. There are sufficient identity management and verification systems available today to ensure that the rule of one person, one vote is maintained. We already have secure access to bank information and even border security systems such as Trusted Traveler in North America. Voting on-line or by telephone can be made safe, secure, and reliable.

Implementing on-line and telephone voting will disenfranchise some citizens and that is unfortunate. Before such a system was implemented the extent of this problem should be quantified. With the ubiquitous use of mobile devices it may be an acceptably small number when considering the potentially significant expansion of participation that on-line and telephone voting could generate.

What Would be the Impact of a “No” Vote

A “Yes” vote by the public would have no impact other than to confirm that the motion being considered had public support.

A “No” vote would have implications and for that reason there should be some qualifications and limitations built into the system.

First, public votes should be “informed” votes to the greatest extent possible. I would suggest that a short (10 minute?) audio and video presentation be prepared that provides both proponents and opponents of the motion the opportunity to make their case. The presentation should include critiques of these arguments by at least 1 or 2 trusted non-political sources agreed upon by the proponents and opponents of the motion.

Citizens would be required to watch the video or declare that they were well enough informed by other means to cast a vote.

A “No” vote would only be considered valid if at least 10% of the electorate participated.

It might offend some people’s sensibilities regarding the definition of “democracy” but I do not believe that 50% + 1 is a reasonable measure of public will, particularly with regards to blocking a vote sponsored by the elected representatives of that same public. I would suggest that anything less than 55% “No” would have no impact other than letting elected representatives know that there was significant public opposition to the motion.

A 66% “No” vote would mean that the motion was defeated and could not be reconsidered for a specified period of time – perhaps 6 months or a year.

A “No” vote between 55% and 66% would automatically trigger a second public vote within a specified period of time – perhaps 2-4 weeks. A second public vote with a “No” greater than 55% would mean that the motion was defeated and could not be reconsidered for a specified period of time (treated as a 66% “No”).

In a Parliamentary system a public “No” vote would not bring down the government even if on a budget vote or other motion of confidence. Special rules regarding this type of motion would need to be implemented.

These specific recommendations are only meant to stimulate thoughtful consideration of options. The key goal of these proposals is to make democracy relevant to a greater number of citizens and consequently to encourage greater engagement in the democratic process. Without significant reforms to current practices liberal democracies run the risk of greater disenchantment with elections and elected governments.

I end by quoting Winston Churchill’s comments to the British Parliament in 1947.

Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried …

I agree that it is the best form of Government but the way it is implemented could benefit from some fundamental reforms.


Four Policies to Quickly and Significantly Reduce Canada’s Carbon Footprint

Posted in Uncategorized at 4:35 pm by Administrator

The road to a sustainable energy environment in Canada will require complex and politically untenable policy changes and will take decades to implement – right?

Maybe not! Here are four government policies that can be implemented in short order that would begin a radical de-carbonization of the Canadian economy. And none of them involve a carbon tax or huge government investments.

Policy: Update building codes to require that all new commercial/industrial buildings and all new residential housing developments implement geoexchange. Provide low-interest loans for retrofitting existing buildings with this technology.

Impact: All impacted buildings would use approximately 50% as much electricity as compared to traditional HVAC (Heating, Ventilation, Air-Conditioning) systems.

Cost: Essentially no cost. The increased up-front cost to developers would be repaid through lower utility bills over the life of the building.

Policy: Impose a fee for single-occupancy vehicles entering the downtown cores of major Canadian cities (similar to the London, England congestion fee). At the same time create a government vetted registry for car-pooling and expand funding for public transit.

Impact: Substantial reduction in congestion and commute times recovering lost productivity as well as resulting in lower taxi fares and reduced pollution and related health issues.

Cost: The initial cost of setting up the system will be recovered within a few years of operation and will then generate revenues going forward based upon the London experience.

Policy: Establish a Federally funded “regional grid balancing” initiative that will coordinate large-scale hydro developments with expansion of wind generation. For example, Site “C” in BC as well as potential hydro projects in Northern Saskatchewan and Manitoba could provide balancing services for vastly expanded wind development in the prairies. Implement “Unpumped Storage” to increase the ability of the hydro projects to support wind.

Impact: Expanded wind generation with reliable hydro backup will result in the reduction and eventual elimination of coal-fired generation in Alberta and Saskatchewan.

Cost: These projects can be self-financing through a combination of modest electricity rate increases and direct Federal and Provincial support through long-term, low interest loans for construction of the projects.

Policy: Provide support for the development of energy storage solutions through the elimination of grid transit fees for electricity going into storage and by providing a feed-in-tarrif for electricity retrieved from storage.

Impact: This policy will attract private capital to large-scale storage projects by supporting viable business cases. Utility-scale storage would support further expansion of wind energy which will be the primary source of energy in a de-carbonized Canadian economy. Canada will become a world leader in the development of energy storage technologies.

Cost: Minimal cost. The introduction of higher cost (because of the FIT) energy from storage will be offset by the declining wholesale cost of electricity that is associated with introducing large amounts of wind generation.


The Black Swan Blog Index

Posted in Uncategorized at 12:19 am by Administrator

Hawaiian Transformation to Renewable Energy Sources (3 posts)
The German Energy Transformation (2 posts)
The Problems With Roof-Top Solar Panels (4 posts)
Concentrated Solar Power (3 posts)
Unconventional Solar Generation and Applications (3 posts)
Battery Technology (2 posts)
The Transition to Electric Cars (2 posts)
Demand Response, Conservation and Geoexchange (4 posts)
The Sharing Economy (4 posts)
Why Energy Storage Should be the #1 Priority (2 posts)
Energy Storage Projects and Proposals (5 posts)
Wind Energy (4 posts)
Hydro, Hydro-kinetics and Dam Conversions (4 posts)
Editorials (10 posts)
Just For Fun (4 posts)


The Black Swan Blog Abstracts

Posted in Uncategorized at 9:37 pm by Administrator

Hawaiian Transformation to Renewable Energy Sources

Hawaii Renewables facing Cross-currents and Headwinds
Hawaii represents perhaps the most important case study when it comes to integrating solar energy into the generation fleet. My first post on the topic reviewed significant obstacles and unrealistic plans for this transformation. I make some recommendations regarding the expansion of geothermal on the Big Island as well as the establishment of CSP plants.

Hawaiian Electric Company’s Integrated Resource Plan – Welcome to Fantasy Island!
The second in the series was a fairly harsh criticism of the Integrated Resource Plan put forward by the Hawaiian Electric company in June, 2013. This plan has subsequently been abandoned and NextEra proposed purchasing HEI. That deal fell apart in 2016 and so HEI is essentially back to square one.

There is a movement in Hawaii to convert the different operating units of HEI into a community owned co-operative.

Renewable Energy Highlights for the 2nd half of 2014 – Few and Far Between
This post discusses an evaluation of the effectiveness of wind generation in Texas in terms of how much generation can be relied upon in Winter and Summer for onshore and offshore wind farms.

The second part of the post discusses the rapidly declining permits to install roof-top solar in Hawaii and the success of the Kauai Island Utility Co-operative’s utility solar farm developments.

The German Energy Transformation

Germany At The Crossroads
This 2013 post discusses some of the challenges being faced by Germany as it builds out its renewable energy portfolio. In particular, the commitment to decommission the remaining nuclear power stations in the country, that currently represent about 15% of the electricity generation in the country, will make it very difficult for Germany to meet its long-term obligations to reduce CO2 emissions.

The German Energiewende – Modern Miracle or Major Misstep
This 2015 post discusses the considerable achievements of the German Energiewende but also identifies the problems with the way renewable energy has been developed in Germany. It points out that Germany is burning more hydro-carbons today to generate electricity than it was 25 years ago and that coal consumption has declined very marginally. It concludes by examining the financial health of utilities in Germany and predicts that further development of renewable energy in Germany will be constrained by grid security and economic issues.

The Problems With Roof-Top Solar Panels

Roof-top Solar Panels – Who Pays? Who Saves?
This post documents the financial inequities associated with tax-payer and/or rate-payer subsidization of roof-top solar. This inequity results from the significant capital expense required to install the solar panels and the fact that renters and those living in multi-family apartments cannot benefit from such subsidies.

No “Soft Landing” for PV solar industry
This post argues that the economics of roof-top solar panels ultimately do not work. Solar generation curves are compared to typical load curves resulting in the conclusion that as more and more solar power is developed the value of roof-top solar panel output decreases. The post predicts a rapid decline in the installation of roof-top solar panels once solar generation becomes a significant fraction of mid-day demand. This decline is already evident in Hawaii and Germany.

Why roof-top solar panels really don’t make sense
This post describes more problems with roof-top solar and compares roof-top solar to utility-scale solar farms. A link to a comprehensive study by the Brattle Group is provided.

Dark Days Ahead for Roof-top Solar
This post describes how the pace of photo-voltaic roof-top solar panel deployment has slowed dramatically in jurisdictions that were former leaders with this technology, Germany and Hawaii. The conclusion of the post is that as roof-top solar power generation becomes a significant fraction of total generation it becomes more and more difficult to accommodate additional deployments. The last section of the post discusses the successful efforts of the Kauai Island Utility Co-op in developing utility-scale solar farms.

Concentrated Solar Power

We should use Concentrated Solar Power ONLY after sunset
This post discusses how utility-scale photo-voltaic solar farms could be combined with a Concentrated Solar Power facility in order to provide 24×365 electricity generation only from solar power.

Solar Power 24 hours a day, 365 days a year – Believe It Or Not
This post discusses the Gemasolar power plant in Spain that utilizes molten salt thermal energy storage to generate electricity 24 hours a day, 365 days a year powered only by solar energy.

Arnold Goldman – A living, breathing “Black Swan”
This post presents a short biography of Arnold Goldman, one of the pioneers of the Concentrated Solar Power industry. From his development of the first utility-scale plants in the 1980’s to his recent involvement with Brightsource Energy, Arnold has demonstrated a commitment to innovation while always addressing practical considerations.

Unconventional Solar Generation and Applications

Non-Thermal Concentrated Solar Power (CSP)
This post discusses some unconventional technologies used to capture solar energy. Two companies (Stirling Energy Systems and Infinia) developed and deployed technology using parabolic disks to concentrate solar energy onto a Stirling Engine which then generated electricity. Both companies have subsequently gone bankrupt.

Another company, based in Australia, developed a highly efficient solar power receptor which also used parabolic disks to concentrate solar energy. It ceased operations in July, 2015.

The take-away from this post is that true innovation is both difficult and risky. While billions of dollars are spent on subsidizing wind turbines and photo-voltaic solar panels very little Research and Development funding is available for other innovations in alternative energy.

Solar Updraft – Inefficient but Effective
This post discusses a technology that makes use of temperature differences caused by solar heating to generate electricity 24 hours a day. A pilot project ran successfully in Spain in the 1980’s and there are proposals for much larger implementations. As with all new technologies there is significant “first mover” inertia as well as economic and technical challenges that need to be overcome in order to achieve commercialization of this technology.

Solar Power – From Rooftops to the Oceans and the Sky

This post briefly mentions some developments with Concentrated Solar Power. The bulk of the discussion focuses on very unconventional applications for solar panels including powering large sea-going vessels and aircraft.

Battery Technology

The Good, the Bad, and the Ugly Truth about Batteries
This post discusses several of the largest utility-scale battery deployments that have taken place around the world in the last ten years. The failure of any of these projects to replace non-renewable generation assets is documented. The post concludes by identifying some of the very significant financial and technical challenges that need to be overcome in order for battery technology to be a significant factor back-stopping renewable energy sources such as wind and solar.

How Much Battery Storage is Enough for Roof-Top Solar Panels?
This post describes some of the complications associated with calculating the amount of solar insolation that will be received at any point on earth on a particular day. It also describes how a smart micro-grid could control the ebb and flow of electricity between a set of rooftop solar panels, a battery array, and the local utility grid. I provide a link to a calculator that I built that can be used to determine the amount of battery storage required to reduce or eliminate the need to connect to the grid.

The Transition to Electric Cars

Electric Vehicles – The Promise and the Problems
This post from 2012 discusses the rationale behind a transition from cars powered by internal combustion engines to electric cars. It also identifies the environmental issue posed by potentially millions of very large batteries that no longer charge well enough to be used to power those cars. A research project by the University of Western Michigan that proposes using those batteries for utility-scale storage is described.

How Quickly will the Electric Vehicle Revolution Come?
This post from 2014 discusses the lack of progress in the transition to electric cars and some of the difficulties that continue to prevent the widespread adoption of this technology. The experiences of two individual electric car owners (a Tesla owner in Vancouver, Canada and a Nissan Leaf owner in Anaheim, California) are described.

Demand Response and Conservation

Can we control our addiction to electricity? Should we?
This post discusses the strategy referred to as “Demand Response” which involves having businesses and residential energy users voluntarily reduce their requirements for energy at times of high demand. Some early programs have not lived up to expectations but there is clearly a huge upside to successful implementations of this type of program.

Your Speed – 32 mph – Slow Down
This post discusses the importance of consumer awareness when it comes to energy use. The example sited is regarding flashing traffic speed lights which have been shown to change driver behaviour in a positive way that actually becomes increasingly effective with the passage of time. A similar approach has been used with regards to energy use and conservation in Japan since the Fukushima nuclear disaster.

Creating a True Partnership between Consumers and Utility Companies
This is another post discussing the potential effectiveness of Demand Response programs. A J.D. Powers study of consumer behaviour is sited and the success of the program instituted by Oklahoma Gas & Electric is described in detail.

Harvesting the Energy Stored in the Ground Below Us
This post discusses the huge advantages to implementing geoexchange for heating and cooling buildings. An explanation of how such systems work is provided as well as examples of successful implementations.

The Sharing Economy (4 posts)

Imagine no possessions – I wonder if you can?
This post discusses the growing phenomenon of the “sharing economy” and what a positive impact it will ultimately have on energy consumption in modern society.

Bike Share/Rent in Northern Europe – a sampler
This post describes my experiences with bike sharing in a number of Northern European countries. I identify some issues with the various programs but overall I endorse the concept very enthusiastically.

Car Pooling Part I: Treading Water
This post discusses the state of car-pooling in North America. This very effective way to reduce traffic congestion, pollution and energy consumption has not been widely adopted and adoption rates have been essentially static for many years. The post describes some of the psychological and technical challenges that need to be overcome.

Car Pooling Part II: Going for Gold
In this second post in the series a number of suggestions are put forward that might significantly reduce single-occupancy vehicles in urban areas.

Why Energy Storage Should be the #1 Priority (2 posts)

It’s time to do the right things “not because they are easy but because they are hard”
This post discusses two difficult engineering projects – lunar landings during the Apollo Program and the building of the transcontinental railway in Canada. In both cases the most difficult challenges were the first ones to be worked on. These are valuable lessons that need to be applied to the development of renewable energy resources.

“Start off the development with the most difficult elements of the design” – Elon Musk
On September 29, 2016 Elon Musk made a presentation on his proposal to colonize Mars. While the concept is definitely “out there” the attention to detail in terms of addressing engineering challenges is admirable. And as with the other projects I have blogged about SpaceX is tackling the most difficult engineering challenges first.

Energy Storage Projects and Proposals (5 posts)

Funicular Power – Newton’s Apple to the rescue
This post discusses an approach to energy storage that involves lifting a large weight (railway cars filled with ballast) using excess energy from wind in most cases at night and releasing that energy the next day. A link is provided to a company attempting to commercialize this technology.

Hydraulic Energy Storage – Another Way to Use Gravity
This post discusses a method of storing energy using a large gravity piston which moves up and down inside a reservoir. A link is provided to a company attempting to commercialize a variation of this technology.

Compressed Hydrogen – A Viable Solution for Long-term Energy Storage
This post discusses a number of projects that aim to use compressed hydrogen as a long term energy storage mechanism. Although compressed hydrogen represents one of the only viable methods to achieve long-term energy storage commercialization of the technology faces numerous economic and technical challenges.

Unpumped Storage
This post discusses a proposal to build additional capacity into existing hydro-electric facilities in order to provide short duration generation in excess of what the reservoir can deliver over the long term. This approach would be used to counter-balance variations in wind generation.

The Panama Canal, Apollo 11, ISS … Energy Storage
This blog post suggests that a coordinated and well-funded international effort will be required in order to develop economical and reliable energy storage solutions at the scale required to support the transition to a sustainable energy environment.

Wind Energy

Wind Energy Headlines Need Scrutiny
This post discusses some of the very common misrepresentations promoted by Greentech writers about wind energy. The point of the post is that by exaggerating the value and achievements of wind energy and minimizing the significant technical problems yet to be overcome these statements lead to complacence and undermine efforts to obtain appropriate levels of Research and Development and financial support.

Alberta – A Case Study in Wind Energy Management
This post discusses some of the challenges being faced by Alberta, Canada as it integrates wind energy generation into the provincial grid.

The Wind Production Tax Credit should not be renewed
This October, 2013 post argued that the PTC had reached the end of its useful life and that the funds allocated to the PTC should be redirected towards energy storage research and financial support mechanisms for energy storage projects. In December, 2015 the U.S. Congress approved an extension of the PTC until 2020 at a cost of tens of billions of dollars to American taxpayers. No additional funding has been provided for energy storage projects.

The California Electrodox
In this post I discuss the Electricity Paradox that is happening in California (and elsewhere). The paradox is that electricity imports and retail prices increase at the same time as total generation capacity is also going up so that there is an over-abundance of available electricity most of the time. A surplus of any commodity normally drives prices down but not in the case of the Electrodox.

Hydro, Hydro-kinetics and Dam Conversions

LCOE for Hydro Projects – Pick a number, any number!

This post discusses the various component of Levelized Cost of Electricity for hydro projects and concludes that the figures presented in most publications are very unrealistic and will vary by almost an order of magnitude based upon different assumptions about the cost of capital, amortization period, and capacity factor. The post concludes that large scale hydro is, by far, the least expensive and most effective form of renewable electricity generation that we have availble.

An Ancient Energy Source Re-Imagined
This post discusses the potential of river flows to generate electricity. Subsequent to publishing that post I researched the topic thoroughly and found that there have been more than half a dozen successful pilot projects demonstrating the viability of this technology. Unfortunately, there has yet to be a successful commercialization of hydro-kinetics and several very promising companies have gone bankrupt.

Dam Conversion and Hydro-Kinetics – 25 GW of potential to be tapped
This post describes the very significant potential of hydro-kinetics in North America as well as a number of promising pilot projects that have demonstrated that this renewable and reliable technology can play a significant role in our transition to a sustainable energy environment.

Hydro-kinetics – the Renewable “Silver Bullet”

This post describes the current state of hydro-kinetic developments in North America as well as the financial and regulatory challenges faced by the companies involved in this sector.  The post concludes that without a partnership which can pool resources the remaining participants will not survive.  Some have already succumbed.

Editorials (7 posts)

Introducing the Black Swan blog
This post from September, 2012 explains why I decided to start the Black Swan Blog. Although it has not garnered even a tiny fraction of the interest shown in the latest Hollywood wardrobe malfunction it has been read by tens of thousands of people. From the feedback I have had from readers all over the world I feel it has made a useful contribution to the conversation about renewable energy.

A Sustainable Energy Manifesto
This post summarizes what I believe would be the most effective policies to achieve a sustainable energy environment.

Imagine a World of Abundant Inexpensive Energy
This post discusses the very positive consequences of attaining a sustainable energy environment. This includes shifting a significant amount of agricultural production to greenhouses in Northern areas and providing plentiful fresh water through water desalination.

The $US 134 Trillion, 100 Year Challenge
Transitioning away from a hydro-carbon based economy will be a $US 134 Trillion, 100 Year Challenge. In this blog post I run the numbers on replacing the fossil-fuel based energy we all consume in modern society with renewables. Having spent $US 2.4 Trillion over the last 15+ years we are now 1.4% of the way to our goal. If the earth were a car the low fuel light would be blinking and we would be 100 miles from the next gas station. This is not going to be easy.

COP21 – Turning Good Intentions into Concrete Actions
This post discusses the measures that need to be put in place to meet the commitments made by world leaders as part of the COP21 agreements made in Paris in November, 2015.

Lights Out: The coming crisis in electricity generation
This blog highlights some structural issues in the electricity generation industry that are being introduced by the integration of renewables. Ignoring these issues may put the stability of the electrical grid at risk.

The Future Ain’t What It Used To Be
This blog post builds upon some observations by keynote speakers at a technology conference held in May, 2014. They described a shift in the way people gather information as well as which sources of information are trusted by the public. They also pointed out the desirability, perhaps even the responsibility of people like myself that distribute information on the Internet to be thoughtful, respectful, and as accurate as possible. They also suggested that some level of “digital curation” should be practiced by authors in order to help readers find information quickly. That blog post provided the motivation for me to (eventually) create this page of abstracts.

BC’s Electricity Conundrum – Politics, Profits, and Potential Partnerships
This post discusses the confusing state of electricity supply and demand in British Columbia. The complexities arise from the fact that BC is entitled to electricity actually produced in the U.S. under the Columbia River Treaty, as well as the significant amounts of private power generation that exists in the province with Fortis BC, Alcan, and PPP’s. Questionable forecasts of demand growth and the existence of the Burrard Generating station as a peak demand supply make it very difficult to definitively state that BC needs the Site C dam. However, using Site C as backup for Alberta wind generation might make sense.

Green Energy, Schmeen Energy – Nobody Cares!
This rather facetious post that suggests that although the majority of the inhabitants of Spaceship earth have a vague desire to treat the planet better there are many other interests and issues that bubble up to be attention grabbers – some trivial, some serious. The post discusses a psychological study that investigated communications and actions taken during “Demand Response” events and the conclusions are encouraging.

Reflections on one year of blogging
Written in 2013, these were my observations after my first year of blogging.

Just For Fun

Scary Energy Scenarios (Hallowe’en 2012)
In the spirit of trying to scare the dickens out of readers this post identifies 3 hypothetical disasters related to energy development. Thankfully none have come to pass.

Hallowe’en 2013: Nightmare on Main Street
OK – so this was supposed to be scary but in hindsight is a bit comical. The post speculates about the possibility of skyrocketing oil prices and the geopolitical ramifications. Of course, just the opposite has happened and the collapse of oil prices has had different global implications. I must say that I still think we have passed “peak oil” at least in an economic sense and a future oil price crisis may still be on the horizon.

The Fright Before Christmas
This has been consistently one of my most popular blog postings. It describes a scenario where there is a dead calm across much of North America on Christmas eve.

Doing the “Green” thing on 2 wheels for the environment and for charity
This post describes my personal experiences with an electric bicycle. It has allowed me to commute more using both it and my road bicycle.


“Start off the development with the most difficult elements of the design” – Elon Musk

Posted in Uncategorized at 9:01 pm by Administrator

Until September 29, 2016 I was not a big fan of Elon Musk. Not that I had anything against him. But I put him in the same camp as Eric Schmidt and Mark Zuckerberg – guys that had made a fortune in tech and were doing some interesting things with electric cars, self-driving cars, and delivering internet service to rural and remote areas.

But when I listened to Elon’s talk on the colonization of Mars my perspective changed (I have put together a transcript of the presentation with his slides embedded and extra graphics and uploaded it to the Black Swan Blog Library).

Not that I think colonization of Mars is the most important goal for the human race at this time. As a Geophysicist I acknowledge the possibility that there could be a large asteroid or comet heading for earth right now and that there is nothing that we could do to stop it and avoid a possible extinction event. So from that perspective becoming a multi-planet species makes sense. However, I think that possibility is quite remote and I feel that there are big problems to solve here on earth before we start exporting our issues to other planets.

So the end goal of Elon’s talk is not what impressed me. What impressed me was the precision of the logic that he used to attack every potential barrier to the success of his mission. In essence he has taken all the lessons learned from more than a hundred years of development in the air travel industry and intends to apply all those lessons to Martian colonization in less than a decade.

What is the relevance of Elon’s talk to the development of a sustainable energy environment? I would site one statement that epitomizes the approach that is required to achieve that desirable end result.

“To talk about some of the key elements of the interplanetary spaceship and rocket booster, we decided to start off the development with what we think are probably the two most difficult elements of the design.”

These are not just words. The two elements Elon is referring to are the development of an extremely powerful rocket motor that is fueled by a methanol based fuel (which could be produced from resources available on Mars) and a carbon fibre fuel tank that is impervious to gas and extremely cold, liquefied methanol fuel.

Without the Raptor engine SpaceX could not build a ship that can return from Mars by creating fuel in situ. And without a lightweight yet incredibly strong carbon fibre fuel tank the inter-planetary ship would be too heavy to make the journey possible.

Neither of these elements are helping SpaceX achieve its near-term goals. In fact, quite the opposite. Key engineering staff resources and enormous sums of money are being diverted from near-term goals to demonstrate the feasibility of manufacturing the Raptor engine and carbon fibre fuel tank.

But the harsh reality is that if you cannot solve the most difficult engineering problems there is no point to working on anything else. This is exactly the issue I raised in a blog post more than three years ago.

The most difficult task we have before us with regards to sustainable energy is energy storage. Once we solve that issue everything else becomes easy. Without storage no amount of renewable energy development can wean us off the burning of hydrocarbons. It’s really that simple.

And yet, politicians and regulators continue to put up roadblocks to the development of energy storage systems.

There is no financial support available for stand-alone energy storage systems and politicians and even academics continue to debate the need for such support. There is no debate. As demonstrated by Denmark, Germany, and Hawaii, the development of renewables hits a wall when it becomes a significant percentage of total generation.

The 2013 California mandate requiring 1.3 GW of storage was met with hyperbolic excitement within the Greentech community. But what does it really mean?

By intentionally not specifying the mandate in GW-Hours the California Public Utilities Commission made it clear that this was not a mandate to take energy storage seriously as a generation source. A few large battery complexes like the Notrees complex (where all the batteries have to be replaced after less than 3 years of service) in Texas or the facility planned for the Alamitos Power Center could provide 1.3 GW for anywhere from 15 minutes to four hours. That might be useful for the purposes of grid stabilization but it will not make any significant contribution to the generation of electricity in California.

The California mandate will in all likelihood result in less than 2 GW-hours of energy storage by 2020. That’s about the same amount of storage that is built into one Concentrated Solar Power plant in Arizona.

Building energy storage with a capacity of 1 GW-hour is hard. There is no battery complex, flywheel facility, Compressed Air Energy Storage System, or any other type of energy storage technology facility in the world that has a capacity close to that. But if California really wants to be powered by renewables at some point in the future the energy storage requirement would be more than 170 GW-Hours based upon the California “duck curve”.

Maybe someday we will get serious about energy storage. The enormous benefits to people all over the world that would result should be motivation enough.

However, I worry that at the rate we’re going Elon will have established a thriving Mars colony before we have an economical and reliable energy storage system.

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