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.