Friday, May 31, 2013

It’s all about the demographics

Almost 2 billion extra human beings will be on planet Earth in the next 35 years. Our global population has just passed 7 billion souls and will reach over 9 billion souls in 2050.
Much of the growth in population will occur in those developing countries that already represent most of the population.
What we do know is that people everywhere want a better standard of living. They want their kids to go to school, get an education and have a better life than they do. They want better health care, they want better infrastructure, they want better schools, they want better jobs, they want better government.
One thing most people agree on is that the luxury of the lifestyle those in developed countries will unlikely to be fully extended to developing countries. The planet simply doesn’t have the resources.
So we are facing monumental challenges.
We need a food revolution
There is only so much farmable land in the world. We need the most productive crops, we need intensive farming techniques, we need to reduce reliance on chemicals for farming, we need more crop cycles per year.  Better cropseed will be produced by genetic modification, epigenetic forcing and cross breeding.  We need all efforts to work.
We need fish farming on a mass scale. We cannot rely on the oceans, lakes and rivers to feed us all from wild stock. Fish farming was common hundreds of years ago, and we are rediscovering it now. It will go large scale and will require techniques that minimise the damage on the environment.
Don’t forget we need extra feed for the livestock that provide us with meat. That will take a lot of extra land too.
We need more fresh water
Access to water is a growing issue, especially for countries that rely on river systems flowing across multiple countries. Climate change could change the equation for water poor and water rich regions and countries. Where the uncertainties of climate are too much we need a much cheaper form of desalination than the current energy and capital cost intensive reverse osmosis plants.
We need an energy revolution
Coal remains the most efficient and compact way to harvest, transport and use energy. Demand for coal is going up for the near future. Demographics and industrialisation are driving this trend. However, the demand for coal will decrease sooner or later. Liquid and gas fossil fuels are following the same trend as coal.
Biomass is great in theory and while it is growing in use in Europe to meet carbon emissions targets, given the growing need for farmable land to be used for growing food crops and forestry plantation requirements, this is not sustainable.
Wind is good, solar is good, but on a large scale they fail the reliability requirements for most human endeavour at the current time. Cheap forms of electricity storage are required to solve this – whether it is batteries or something else like hydrogen. Efficiency also needs to improve as too much land area is required to provide large scale wind and solar power compared to other technologies. Available land will become scarcer in the future.
Nuclear power is going to be vital in the future. Whether Generation IV Uranium reactors or newer Thorium type reactors, it is going to be part of our future. However, in most countries there is a real wariness about it. We need to make nuclear safe and preferably find a way to make smaller reactors more cost effective. The good thing about smaller reactors is that they can be designed to be self-dampening, which means if something goes wrong the nuclear reaction slows down instead of speeding up. The roll out of nuclear is likely to be slow.
Fusion has been considered to be the way of the future for 50 years, it is still a way off commercial reality – perhaps by as much as 30-50 years. This area needs as much work done on it as possible, however, governments are reluctant to drop the billions of dollars needed on this now when their own economies are hurting.
We are facing a dilemma in energy right now. Nuclear is not palatable, coal demand is growing, gas demand is growing, renewables are expensive and fusion isn’t here yet. Hopefully someone will come up with a new solution in the next decade or so.
We need cheaper and more effective healthcare
Effective drugs cost a lot of money to develop and get approved. Companies that develop those drugs want to recover their costs through high prices, meaning that most in the developing world cannot afford newer and better drugs. Put that another way, the majority of humanity cannot afford the medicines they require.
Misuse of antibiotics is leading to drug resistance in bacteria and viruses, so its no good saying we can use cheap and proven medicines as they are no longer as effective. How do we provide new medicines cost effectively?
Healthcare professionals (doctors, nurses, laboratory technicians, x-ray technicians, etc.) are in short supply, and there is a known flight of trained professionals from the developing world to the developed world. More healthcare professionals need to be trained and incentivized stay in their own communities.
Medical diagnostic tools need to be made more portable and effective. What about suitcase sized MRI or catscan units.  How about handheld computers with laboratory diagnostic attachments. What about portable operating theatres to provide a sterile environment. All these and more are in the works and we need as much of this as we can get.
Given that many medical costs come at the end of life, with many countries having a population with a longer life expectancy and a rapidly growing aged population, healthcare costs are going to grow rapidly. We need to provide solutions effectively and cheaply.
We need to sustainably produce household goods
Wood, metal, earth, leather and plastic make up most of our household goods.
Tableware remains ceramic. We aren’t running out of the clay, silica or other components to make plates, cups, etc. in the near future. However, with growing demand driven both by population and fashion (i.e. changing your dining set every few years) we are going to make a bigger impact on the natural environment. Can we do something about this? Can we do something about the energy and water wasted to produce and clean our tableware? Some studies show that using disposable plastic plates and cups may in fact have a lower carbon emissions intensity than using traditional flatware, however, that comes with a considerable physical pollution problem.
Plastic is a major part of our lives and will increasingly be so. With the amazing advances in 3D printing it is easily foreseeable that plastic will be more common around our hoses. This will even have an impact on manufacturing and global transport as we can make what we want where we need it, buying a design from a company rather than the physical good.
Plastic needs to be biodegradable and it needs to be sourced from molecules other than fossil based hydrocarbons. We could get it from foodcrops as the easiest source of the right molecules however, given the food revolution required it is unlikely that this will be the major source. Some people are looking at large scale algal farms to produce synthetic hydrocarbons which is exciting for the future, but not yet commercially viable, and as some people point out, would require ridiculously large areas of the planet to be converted over to algae production. The challenges here are to produce highly productive algal species that can be compactly grown and harvested in advanced algal reactors.
Wood needs to come from fast growing and sustainable plantations. Speeding up the time to harvest is a key focus to enable better productivity from the same amount of land. A year or two shorter growing cycle to get a mature sized tree is key. And, don’t forget increased forest plantation requirements will be at loggerheads with demands for more land for farming food crops. Genetic modification of plants, epigenetic forcing of plants and breeding programs all play a big part of the future. Some people are even looking at synthetic woods constructed of other forms of plant lignins which may lead to 3D printable woods in the future.
The design life of furniture is also critical. Most furniture is designed to last 3 to 5 years and is made of chipboard or plywood of some sort. Cost effectively improving the useful life of furniture by another year or two will take the edge of wood demand. This increase in useful life also requires recognition of the need for longer lasting finishes, fabrics and foam.
Leather comes primarily from cattle, but some other sources. There is a minor crisis in the leather industry at the moment due to Chinese demand. Chinese like leather goods, but they don’t eat much beef. As leather is a byproduct of beef production the demand for leather is outstripping supply. While livestock numbers will increase with population growth the challenge is on to produce leather like synthetics that feel, endure and behave like leather. There have been a number of attempts over the years and many a good sofa uses Pleather in those areas such as the back and sides where there is not much wear and tear.
The above is a tour through the challenges we face and the amazing opportunities we have to make a difference in the next 35 years.
For those of you interested, I have included the UN Population Projection Data sets in the Excel Web App below. The data tells an interesting story.

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.

Monday, May 6, 2013

The AEMO 100% Renewable Study isn’t a green light to 100% Renewables

Reading some of the headlines about the viability of switching to 100% renewables in the 2030 to 2050 period, you could be forgiven for thinking that it is cost effective and imminent. That is not what the report says.

Reading the draft report issued to the Department of Climate Change (the client) on 28 March 2013 provides a different take.

In essence, they are saying that technically it is possible, but a lot of the costs were not included, they weren’t even sure about all the included costs, and they don’t even know if all the technology is viable.

The most interesting bits are the exclusions – in particular land acquisition costs (5000 km) and distribution system augmentation.

Land acquisition costs are important, but less of an issue than distribution system augmentation.

For example, the study assumes that a large amount of the power will come from rooftop solar PV. This is will require some seriously expensive distribution system augmentations, as well as spare capacity/back up, etc. Just think on how much our electricity bills are going up at the moment due to so called ‘gold plating’ of the distribution network. Multiply that by an order of magnitude or two and you get that these costs will be high.

To be fair to the AEMO team, it makes sense to exclude distribution as it would be exceedingly difficult to scope out, let alone estimate those costs. It is one of those how long is a piece of string exercises, probably years in the making.

However, for a real understanding of the transition we need to talk about the entire energy system, not an isolated part of it.

Such a comprehensive future study should take the transition path, transition costs, plus the opportunity costs of retiring old cost effective but polluting fleet compared to forecast carbon prices. Don’t forget storage costs for time shifting renewable generation to provide peak load either.

And, don’t forget global warming too. For example, as it gets hotter we will rely on air conditioning more and more, meaning that the peak load capacity of the transmission and distribution system may actually go up – even with all the demand side participation measures mentioned.

In other words, the study is saying, yes, it’s technically possible with a lot of caveats, but we really don’t know how much it will cost or if the technology is viable or how we could actually do it.

It is a good start, unfortunately, too many journalists and pro-renewable punters have been reading what they want into the headlines.

I work on renewable projects and will push the technology wherever I can. However, my fear is that with the misleading cheerleading surrounding reports such as these we end up avoiding the real and difficult conversations we need to have in order to go to a carbon reduced future by jumping on the bandwagon with every bit of good news for renewable.

Just to keep you happy, please find a few extracts from the Draft Executive Summary (dated 28 March 2013)

AEMO state the following in the introduction in the Executive Summary Document:

Given its exploratory nature, this study should be regarded as a further contribution to the broader understanding of renewable energy. The findings are tightly linked to the underlying assumptions   and the constraints within which the study was carried out. Any changes to the inputs, assumptions and underlying sensitivities would result in considerably different outcomes.\
1. The results indicate that a 100 per cent renewable system is likely to require much higher capacity reserves than a conventional power system. It is anticipated that generation with a nameplate capacity of over twice the maximum customer demand could be required. This results from the prevalence of intermittent technologies such as photovoltaic (PV), wind and wave, which operate at lower capacity factors than other technologies less dominant in the forecast generation mix.
2. The modelling suggests that considerable bioenergy could be required in all four cases modelled, however this may present some challenges. Much of the included biomass has competing uses, and this study assumes that this resource can be managed to provide the energy required. In addition, while CSIRO believe that biomass is a feasible renewable fuel , expert opinion on this issue is divided.
3. The costs presented are hypothetical; they are based on technology costs projected well into the future, and do not consider transitional factors to arrive at the anticipated cost reductions. Under the assumptions modelled, and recognising the limitations of the modelling, the hypothetical cost of a 100 per cent renewable power system is estimated to be at least $219 to $332 billion, depending on scenario. In practice, the final figure would be higher, as transition to a renewable power system would occur gradually, with the system being constructed progressively. It would not be entirely built using costs which assume the full learning technology curves, but at the costs applicable at the time.
It is important to note that the cost estimates provided in this study do not include any analysis of costs associated with the following:
1. Land acquisition requirements. The processes for the acquisition of up to 5,000 square kilometres of land could prove challenging and expensive.

2. Distribution network augmentation. The growth in rooftop PV and demand side participation (DSP) would require upgrades to the existing distribution networks.
3. Stranded assets. While this study has not considered the transition path, there are likely to be stranded assets both in generation and transmission as a result of the move to a 100 per cent renewable future.
Costs for each of these elements are likely to be significant.

This report is not to be considered as AEMO’s view of a likely future, nor does it express AEMO’s opinion of the viability of achieving 100 per cent renewable electricity supply.


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.