Current technology is not the future

One thing that we can say for sure is that the current generation of clean energy technology is not the answer for the future.

Coal is the cheapest but is on the nose with the general public. Clean coal isn’t making it yet.

Gas, coal seam gas and shale gas are abundant energy sources and may be more efficient sources of energy in that less CO2 is emitted for each unit of electricity than coal. But it is still doesn’t provide a major reduction in CO2 given that the population is growing to 9 billion over the next 30-40 years.

Wind is reasonably cost effective, but it has limited application and is facing growing resistance.

Hydroelectric power could provide baseload power generation but is limited to suitable locations and depends on long term rain patterns. Many groups are opposed to new dams so it is hard to expand this to the scale required.

Solar holds a lot of promise and technology is improving. It is still not suitable to mass baseload power and won’t be until the costs drop dramatically, including the costs of augmenting the distribution network and storage.  Also, ideas  of connecting up countries on an east west alignment with a supergrid are destined to stay in the realm of science fiction due to the costs of building a transmission grid.

Nuclear power is a possibility for a transition – but it’s going to be very hard to get public acceptance and political buy in after Fukushima.

Cost effective geothermal remains a dream. Technology may solve some of the problems, but the technology is a ways off yet.

Wave and tidal power are on their way – but aren’t getting the funding they need to go the next step.

Fusion isn’t here yet, and may be a generation or two away.

So here we are in 2011 putting in carbon pricing in the hope that it will lead to a great future.  The idea seems good, but it won’t even support wind – which is the largest scale renewable energy source.

In other words, the answer hasn’t been invented yet. It may be a laboratory somewhere, it may be a result of 20 years of future effort, but it isn’t here.

Given some of the technologies I am seeing in the startup space I have no doubt that we will get there ( I just can’t tell you about them for legal reasons – but I am excited).

The only problem for all these new technologies is that private sector funds have all but disappeared, venture capitalists and angel investors are focussed on 5 year returns, large companies know that carbon pricing won’t support new technology costs and governments spend more time and effort worrying about education and then will only back commercial scale demonstrations of technologies which are by definition not the answer.

Hey government, what about dropping a few billion on fundamental research at universities and at government agencies. How about you create some excitement with invention and manufacturing of new technologies. How about you provide seed funding for all sorts of loopy ideas that could end up being the answer.

If this is the challenge of the generation start acting like it.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

Governments are bad at picking winners, losers are great at picking government

This is a great saying doing the rounds about some clean energy technologies – and unfortunately there is more than a grain of truth in it.

The fact is that for every success story in technology commercialisation there are hundreds of good ideas that have failed to make it to market. The two main reasons for failure are lack of good leadership and lack of cash.

We all know that we need to do something to clean up our energy supply and energy usage. Even if you don’t believe in climate change I’ll bet you want to do things more efficiently in you work and your daily life. We are all heading to the same destination.

Government realises that in the case of market failure that they need to step in and provide support to private sector efforts to produce the new technology we need. This seems sensible. However, in reality it mostly supports the incumbents (e.g. wind) and the celebrity technologies (i.e. solar PV – the Paris Hilton of the renewable world – looks good in any article).

What it doesn’t do is provide support for genuine breakthroughs or genuine innovation.

Where Government does actually provide major funding it is for commercial scale implementation of technologies which are basically uneconomic or technologically redundant at the time of construction. Even worse, a lot of taxpayer funding is used to replicate technology and research already completed in other countries.

I have a lot of respect for any entrepreneur that gets a new technology up. During the early stages, at least, the intent is about the new technology.  Later on organisations seem to reorganise themselves around getting money from government. And hey, a confession here, I am in the top 5 on the honour roll for people to get big dollars out of government and the private sector for new energy technologies.

What I am talking about here is a difference of intent. Sooner or later an organisation comes to exist solely to support itself and not the technology.

The private sector can’t provide all the answers, in a time of change such as this we need a genuine and sustained national effort. Carbon taxes and tokenistic clean energy funds won’t achieve much and policymakers know it.

There is an out.  I believe in providing solutions as well as pointing out the problems.

Yes, there is market failure and a carbon price will not support commercialisation for a long time to come. Yes, we need to do something sooner rather than later.

So how about really leveraging taxpayer’s funds instead of throwing it away. I am not talking about matching funding on a dollar for dollar basis. How about 5 cents for every dollar spent by the private sector?

For example, how about setting up prizes for technologies that meet certain criteria. You could have prizes for low temperature high output LED lights, cheap to install and easy to maintain tidal generation, more efficient batteries, more efficient electric motors, etc.

That way, you can get many people working on the same problem, all with private backing with an eye on a prize big enough to pay off initial investors and also provide enough cash to fund the next stage of commercialisation.

Another example would be to mandate that government owned power facilities be used to test new technologies such as carbon capture. Sure there are a lot of issues about operations, but if you provide permanent test facilities set up to allow technology vendors and universities to test their technology then you may advance the cause.

I meet with a lot of blank looks when I talk about these kind of things, and I think it comes down to the lack of business and commercial experience of people in government. Too many of them think that money to back ventures somehow magically appears.

Ancient farmers grew a whole field of grain and picked the best to continue the next year. In the same way Government needs to set up to maximise the amount of effort put into innovation and stop throwing money at large scale demonstrations, stop using the word commercial projects and put a limit on the funds that go into Solar PV and its variants.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

What about my grandmother?

Society is complex.

One of the calls to action on climate change is the emotive statement ,“But what about my grandchildren’s future?”

Fair point and I don’t argue that at all. We should be acting today to help  leave the world better for our grandkids.

But when it comes to the design of mitigation I think it is only fair to ask, “but what about my grandmother.”

Society’s ability to pay for solutions varies.

• Parents pay for their children until they have an income.
• Young adults generally speaking have more disposable income than couples with children.
• Younger people have an ability to earn more in the future to cover any losses.
• Older people have little if no ability to earn more money – so any loss is permanent.
• Better off people can afford to pay for more expensive solutions such as solar, and in industry this is referred to as being an analogue to the model for organic food. I.e. those who can afford it and care can take that option.

And so on. It is complex.

A carbon tax is elegantly simple in theory, but the real world issues will be complex as not everyone has the ability to adjust.

To bring our grandmothers back into the picture we need to think about what will happen after 2 or three years into the carbon tax regime when carbon credits will be bought on the open market and prices could conceivably go up, with less tax coming to the government to be able to subsidise our elderly.

We can’t model this right now, and the government of the day has put in a lot of wriggle room for their future actions.

My former elderly neighbours are my inspiration. They saved and scrimped their whole lives for their retirement. Inflation ran away in the 2000’s and their cost of living went up – and they suffered with stoic dignity. They had an air conditioner but could only afford to put it on for an hour or two on the very hottest days in Summer (remember that the elderly are more likely to die in a heat wave than other parts of society.) They couldn’t afford to buy a more energy efficient air conditioner, or even a more energy efficient fridge.

So, think about your grandparents as well as your grandkids when you come up with solutions.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

Let’s make nuclear power safe

Enough already with the problems with nuclear power.

Yes, we know there can be accidents. We know that humans will always be humans and that we have to monitor behaviours, etc. We also know that companies don’t like to make losses, so will delay on decisions.

Are we really saying that these aren’t solvable? Aren’t we really just using the ‘known’ problems with nuclear power as an excuse not to do it.

How about we flip the question on its head and ask how we can make it safe?

• How do we ensure containment in case of accident?
• How do we minimise the chance of a runaway reaction (i.e. make systems self-damping)?
• How do we deal with radioactive materials to minimise the chance of it falling into the wrong hands?
• How do we control nuclear proliferation?
• How do we dispose of, or store nuclear waste?

If we are serious about climate change and recognise the need to provide lower carbon energy to the world’s rapidly developing and growing population then we need to focus on solutions. Nuclear power is a solution - so let’s make it happen.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

The next 30 years will be amazing

If you look at history humanity it is only in the last 150 years that we have really improved our lives and society beyond the ancient Roman or Chinese Empires.

One of the key changes was the industrial revolution, which basically involved tapping into coal, and then oil as an energy source. And what a difference fossil fuels have made to everything. No longer bound by the amount of energy we and our animals could produce we as a species have taken off.

Earlier than that, agriculture taught us to build irrigation systems and dams in order to allow for climate changes.

Now that there are so many of us we have realised that we are making an impact on the global ecosystem in which we live in and we need to do something about it. This is what is so exciting.

Given that there will be 9 billion of us by 2050 we need to radically improve how we harvest and use energy. 

We aren’t going to take a step backwards in terms of living standards and expectations, but we can do the same things with a lower impact.

• Look at all the work being done on hydrogen as a substitute for fossil fuels.
• Look at all the improvements in renewable energy.
• Look at all the efforts going into high efficiency cars and other transport.
• Look at all the amazing news coming out of genetics. Maybe in a decade or so we will be able to tailor living organisms like they do in Sci Fi novels. Think about being able to plant a seed and watch your house grow.
• Manufacture on demand technology can not only make 3D objects on the spot, but is now being extended to ideas such as concrete printers that can actually build a house. Unbelievable.
• Modular or kit homes are a similar innovation that has major implications for cost, quality and timeliness of housing supply.
• Advances in medicine are incredible, and there seems to be a growing response to basic needs for the developing world at an affordable price too.
• China is poised to take over as the leading economy.
• India is industrialising – in fits and starts, but it is getting there.
• Africa is going through growing pains as it tries to introduce industrial thinking, but it will get there and will be a much bigger part of all our lives in the future.
• Technology in general is changing so rapidly it is always tempting to keep putting off new purchases as you know the next leap in technology is just 6 months away.
• Biotechnology, nanotechnology, material sciences, compound materials, communication technology, etc. They are all revolutionising our lives.

All in all, there has never been a more interesting time in human history and seeing the ingenuity of humanity keeps astounding. I can’t wait.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

I have complete faith in humanity

One of the great privileges I have had is to work in both the richest and poorest parts of this planet.

Humanity is, as far as I can tell, about 95% the same in overall attitudes regardless of who, where or how much. Consequently, I have complete faith in humanity. Here are some examples.

• Parents want their children’s lives to be better.
• Any system can be lived with as long as the rules don’t change in an arbitrary manner.
• Concern for family is most important, followed by friends, community and then nation.
• Striving for improvement in living standards is normal.
• Everyone wants a safe and clean working environment, it’s just that putting food on the table will take priority.

Let’s put this in context of dealing with global warming.

• Governments will take care of their own people first.
• Individuals, while concerned about the bigger picture, will put the welfare of their own children in front of the complete stranger’s children.
• The developing world will put progress in living standards, health, education and economic progress in front of helping global outcomes.
• Politicians can buy the votes of people by talking about what happens to their own wallet or purse.
• Businesses will take care of their own shareholders. Companies that don’t worry about this are called not-for-profits for a reason.
• Businesses taking care of their own needs will follow the rules and game the system where they can. They are not responsible for setting up or managing the system.
• Individuals going down the path of personal responsibility are role models, unfortunately, probably won’t reach the critical mass of 5% required to make larger change. The rest of us are just too wedded to our lifestyles.

Humanity is in many ways gloriously predictable – let’s try and work with it.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

Good for the goose, good for the gander

There are a lot of small scale, grid-connected electricity generation opportunities within major cities (otherwise termed embedded or distributed generation).  

There are also well documented benefits to the distribution and transmission systems from having embedded generation. So in theory by providing embedded generation you should also get paid for the benefits.

On the flipside distribution network service providers have recognised there are difficulties in providing such a service and have played hardball on paying for any benefits. This lack of pricing for the benefits has effectively sterilised a lot of embedded generation opportunities.

There is one major exception – Solar PV. The solar PV industry has been arguing for recognition of network benefits to be recognised and through feed in tariffs have effectively won, which is great as it is helping stimulate economies of scale in manufacturing and sponsoring expertise in design of systems and installation.

However, co-generation, tri-generation, and even simple diesel/petrol or gas reciprocating engines can also provide network benefits and probably at a lower cost than Solar PV.

If embedded generation is as much of the future as has been touted for a long time now then shouldn’t we be looking at a system that is agnostic about technology; after all the carbon tax will help sort them all out in a market based economy.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

The link between riots and clean energy

To be topical this week, it is interesting to look at what happens when a riot happens.

To create a fire you need a spark and the fuel.

The spark may be an event or an individual or two, but the fuel is the opinion of the masses.

The masses need to be primed for the event that will ignite them, and it is almost impossible for any individual to prime the masses – it is always reflective of an overall trend.

A couple of years ago we had ‘An Inconvenient Truth’, looming Copenhagen negotiations and a general feeling that we had to do something feeding our willingness for change.

We pretty much all expected an outcome, and rightly so.  We were the fuel ready to ignite to go down the path towards a cleaner energy future.

Then what happened – nothing- Copenhagen fizzled, and then we had the global financial crisis (or whatever you call it in your neck of the woods).

There is a lot of goodwill left in the general population, but it is not so blindly in favour of immediate change. It has cooled a fair bit.

People are looking for answers that make sense. Let’s face it, not many people really understand how things actually work at a system level, so they are looking for answers in their day to day lives.

This is why focus on clean energy technologies is now coming in fits and starts. People are chasing the next big thing that will make the difference, and then moving on rapidly.

This is pretty much the same attitude that they have for new restaurants. The high initial patronage is due to the novelty factor, but you can’t keep them all as many rapidly move on to the next new restaurant.

When the general public and the media are focussing on you and your technology my advice would be to raise all the funds you possibly can as you may not be so blessed again for years.

As the spark you can’t create a fire without fuel, no matter how bright you are.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

A cargo cult called innovation

Innovation will answer all our problems won’t it? That seems to be the message we get from government right now.

Somehow introducing carbon pricing equates to innovation. Sounds nice in theory but I don’t think that anyone in government truly understands what innovation actually is other than it is a magical word with which to soothe the public.

Too many years working in project development and technology commercialisation has taught me just how difficult it really is.

Here are a few key points I’d like to share.

1. Innovation needs to be planned for. Just hoping it happens through the invisible hand of the market only works when there is sufficient financial incentive to do so. A sufficient financial incentive to encourage large scale innovation in clean energy would bankrupt our economy.
2. It is industry not universities that are responsible for much of the actual innovation out there. Universities are very important, but it is industry that makes it happen. As a nation we are technology adopters much more than innovators.
3. Promoting large demonstration projects is not innovation. Full stop.  Government funding for large demonstrations is to make up for market failure not to really promote innovation. Much more bang for the buck can be gained from funding R&D in industry and in universities.
4. Schemes such as the Solar Feed-in-tariff are a recognition by government that by putting aside some of the public purse we can help encourage economies of scale in manufacturing to form in certain technologies. That is, we are helping amend the market failure that otherwise exists.
5. The current mantras of ‘user-pays’ and requiring commercially competitive financial returns for government owned corporations (GOCs or GBEs) is a fashion. The reason for their introduction was recognition that the costs of government are going up and that by making these 'businesses' stand on their own two feet was a way of freeing up funds to go towards other things. If we are serious about a genuine lower carbon future then the government should set up its own companies to do just this. After all government can borrow at a lower rate than anyone else and doesn’t need equity returns.

Innovation requires forethought and leadership. It requires willingness to take risks and being prepared to fail. It requires the skill and inputs of many. Most of all, it doesn’t just happen by itself.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

We live in interesting times

We live in an interesting time right now.

From a technology point of view our primary options are wind, gas and nuclear.

Secondary options are hydro and solar.

Future options include geosequestration, hydrogen, wave, geothermal and other technologies which need work to make them cost effective.

We need to remember a few big picture points here

1. The global population will increase to 9 billion or so by 2050
2.  The developing world demands the same rights to lifestyle and energy usage as the developed world.
3.  The developing world will have a limited capacity to provide all the carbon credits that the developed world is planning to buy.

Speaking for Australia I would say to the Government that actions speak louder than words.

For the $20 billion or so spent on the building the education revolution we could have installed about 5000 megawatts (MW) of wind power.

For the $43 billion planned for the National Broadband Network we could have much more.

Add in the $110 billion for a high speed rail network and we could be considerably lower carbon than we currently are.

All I can say by looking at their actions is that the Government is not serious about transforming energy.

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.

It works where it works

There is no one-size-fits-all energy solution out there (yet).

Commerciality is important. A technical solution that is unaffordable is not a solution.

Wind works where the wind blows.

Geothermal works where there is both heat and water close to surface.

Solar works as a replacement for expensive electricity supply.

Hydro works where dams can be built close enough to population centres.

Carbon geosequestration will work where there are good reservoirs in areas with few land owner issues, close enough to power generation to be economic.

Algae based fuel solutions work where the environment is just right for the algae to grow at an economic rate.

Energy efficiency works where it reduces costs.

The costs of installation of these systems, including supporting infrastructure is changing every day, but not enough to make all of it work everywhere. 

Note: I work as a project and energy economist with companies and governments on geosequestration,wind, geothermal, hydro, wave, transmission networks, coal seam gas, coal,and more. The views expressed in this blog are solely my own and do not represent the views of any organisation that I do work for.