Nick's Energy FAQ

Will EVs and hybrids take off quickly? (part 2)

2012-01-12T18:34:00.006-06:00

Probably not soon. Even though hybrids and EVs are competitive with conventional ICE vehicles, they won't sell well until until they're clearly cheaper. Hybrids and EVs are much cheaper, if we include all of the external costs of oil - oil wars, pollution, etc, etc. But that's not priced into the vehicles:

Hybrids:

"The challenge with selling hybrids is that gasoline engines have become more efficient and the cost of hybrids haven't come down fast enough to justify the added expense for many buyers, said David Champion, senior director of the Auto Test Center at the Yonkers, New York, magazine Consumer Reports.

He pointed to Honda Motor Co.'s Civic, which gets 32 mpg in combined city and highway mileage, and the Civic hybrid, which gets 44 mpg. The hybrid version of the car saves a consumer $322 in fuel a year, according to the Environmental Protection Agency. Given the added sticker price, it would take more than six years to get the money back on a similarly equipped car at today's fuel prices.

Mike Jackson, chief executive of Fort Lauderdale, Florida auto retail chain AutoNation Inc., said that 75 percent of customers come into his showrooms and want to talk about hybrids. Only about 2.5 percent of AutoNation sales are hybrids. "What happens from the 75 percent consideration to the 2.5 percent commitment?" Jackson said in an interview. "They look at the price premium for the technology, which is already subsidized and discounted, and say 'the payback period is too long; not for me.' It's a back-of-the envelope conversation on the part of the American consumer."

EVs

"The battery in an electric car still adds $10,000 to the price of a car at current technology costs and it will be difficult to reduce that penalty in the near future, he said."

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/01/10/bloomberg_articlesLXK78V6K50XT.DTL&ao=all

Change is difficult: for most people to move to something new requires a strong incentive, not something that seems roughly as good as what they have now.

An EV will save about $2,000 per year over the average US vehicle - the $20,000 savings over 10 years is clearly worth it, but a 5 year payback just feels too long for the average consumer.

What should energy books convey?

2012-01-09T12:15:00.007-06:00

They should spend some time discussing markets.

Market critics need to be reminded of the virtues of markets: they're decentralized and can start working very quickly; they process an enormous amount of information into a simple price signal; with time to work, and with proper regulation they're extremely powerful, increasing supply, reducing consumption and implementing alternatives and substitutes; and they prevent the shortages, hoarding and misallocation of investment that can come from price controls, subsidies and rationing.

Market enthusiasts need to be reminded of the failures and shortcomings of unregulated markets: they don't include externalities like pollution (including climate change) and security concerns ($2T oil wars, anyone); price signals can take time to bring a response (i.e., short-term elasticity can be very low, and capital expenditure and turnover takes time); and poor consumers are affected by ability to pay.

Pigovian taxes (like a carbon, or fuel tax) are a marvelous compromise between the extremes of stifling regulation and the excesses of unbridled big business: they use price signals to direct investment where it needs to go.

Unfortunately, Pigovian taxes effectiveness means that the legacy industries that they would hurt fight against them desperately. They much prefer subsidies, and Cap and Trade's slowness and labyrinthian complexity and susceptibility to manipulation suits them just fine.

We need more democracy, to lessen the power of entrenched minorities that fight change behind the scenes. We need better media (internet?) to fight the misinformation broadcast by these minorities and their allies (Fox news, anyone?).

Markets sometimes seem to not work because market participants don't have good information: if communication about energy does nothing else but convince people that high oil prices are here to stay, and that they should move from short-term non-responses to long-term aggressive adaptation, it will have succeeded.

Can the US raise oil production enough to make N. America oil independent?

2011-12-18T11:18:00.011-06:00

Yes, that's very likely (although the most important factor, by far, is declining consumption) But, that's not good enough. The whole world needs to kick it's addiction to oil:

1) N. American oil independence isn't nearly good enough: imports from Canada and Mexico hurt the balance of trade just as much as Saudi imports.

2) US oil independence isn't nearly good enough:

a) import dependence for many other countries makes their economies vulnerable to oil shocks - that leaves the US almost as vulnerable as it is now.

b) import dependence for many other countries makes them militarily vulnerable - that's unacceptable to the US (that's realpolitik).

c) The US would still be vulnerable to the disruption of oil shocks in the form of high prices.

3) oil is too expensive, even if it's domestic.

4) oil is polluting.

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That said, I think intellectual rigor/honesty demands that we acknowledge that US oil production is rising due to price incentives.

The Bakken oil's production peaked in 1992, and reached a low point in 2004. Anyone looking at that and looking no further than 2004 would see a classic peak. It hasn't peaked, like gold mining for instance: the current level is far above the peak, which the gold analogy wouldn't predict. https://www.dmr.nd.gov/oilgas/stats/statisticsvw.asp

Just as important, Bakken production is very profitable.

One might ask: "Haven't Bakken production increases only taken up the slack created by declines in Alaskan production? I'd say that it's misleading to pair those two things. It's a way of saying that we can't raise US production, and that's not realistic. Overall US liquids production has risen pretty significantly from it's bottom several years ago.

The lesson here: prices and market responses are still important, even for oil. it's not all geology: if the price rises, supply will respond in a significant way.

Again, we need to transition away from oil ASAP. Recent increases in domestic production don't change that at all.

Will developing economies get greater value from oil, and therefore out-bid the US?

2011-11-09T12:56:00.004-06:00

Not really. Consumption of marginal value is...of marginal value. The US doesn't really lose much if it cuts down on fuel consumption that doesn't benefit the user very much.

For example, if people use a Prius instead of a Chevy Tahoe (reducing fuel consumption by 75%), they may have lost a little bit of status, comfort, acceleration and crash safety, but...they get to work just fine.

Similarly, if they move from a Prius to a Volt (reducing fuel consumption by another 75%, to the point that ethanol could provide all of the non-electric miles), they may pay a bit more upfront, but over the Volt's lifetime they'll come out ahead. A little frontloading of expenses seems like a pretty small price to pay, especially when a Volt (like EVs in general) has much better road performance.

There are many more examples: shipping companies may lose a tiny bit of flexibility by moving from trucks to rail; water freight may have to retrofit skysails, reduce speed a little (a 20% speed reduction gives a 50% fuel consumption reduction), and eventually go to specialized batteries which might require more stops in port for battery switching; makers of packaging may have to find ways to maintain structural strength while reducing plastic content; chemical companies may have to add a process step or two to use non-oil sources of hydrocarbons; middle income shoppers may go online, and consolidate a few trips while they're waiting for their Prius to arrive; lower income drivers will have to go to lower-status higher-mileage older small cars (whose depreciation cost is so low that it offsets higher repair costs) while they wait for Priuses to arrive in used car lots; telecommuting would make managers uncomfortable.

None of these are a really big deal - their development diverts R&D away from other productive uses, and slow the economy down a bit during the transition, but it's not TEOTWAWKI.

In the long-term, oil consumption will be strongly non-linear. Above about $80, investment grows in alternatives, especially batteries. As both R&D and manufacturing volumes increase, innovation and economies of scale are creating disruptive competitors whose costs will reasonably soon start to fall well below the old oil-based price norms - at that point oil consumption will continue to fall even if oil prices start falling.

At that point, oil exporters will be in deep trouble, and wish they had saved as many of those T-bills as they could....

Are electric vehicles fun to drive?

2011-09-29T17:56:00.002-05:00

Yes. It looks like they're much more fun than conventional gas vehicles. The technical details: Power equals torque. ICE engine ratings traditionally are for peak torque. For EVs, we see that immediate torque is more important (both at zero speed and at mid-range speeds). That instant power just makes EVs more fun to drive.

Plus, they're quieter, have less vibration, and the battery weight lowers the center of gravity and provides great traction:

"There are many reasons why we call the Chevrolet Volt the best car in the world, but the fact that it can handle 1,100 miles driven at or near 73 MPH in flawless comfort and yielding close to 37 MPG, is one of them. The marketing folks at Chevrolet need to stop comparing the Volt to only the Prius, and focus just as much comparing it against other types of premium cars such as the Volvo C30, Audi A4, Mercedes C-class and BMW 3-series -- but with the fuel economy for long trips only 10 MPG behind the Prius, instead of 20 MPG for the others.

What is the bottom-line verdict of this review? If you are okay with a modestly sized four-seat car with modest cargo space, the Volt is the market's best premium car today. With tax incentives, the car may cost you close to $40,000, which compares reasonably with other performance/luxury sedans in its class.

I give it a perfect 10 out of 10 -- a verdict I have never given to any other car, ever. It's all about superior, and in this case unique, technology."

http://www.thestreet.com/story/11253286/1/testing-chevy-volts-endurance.html

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"The car is so pleasant to drive that I can’t imagine finding early adopters to be a problem. But after that, I’d like to see the Volt become available to the rest of us. Which is why we should hope for a kind of EV arms race, for a significant drop in battery prices and a rapid expansion of plug-in infrastructure. Because after putting a couple dozen highway miles on a vehicle like the Volt, plenty of people simply won’t want to go back to a conventional car."

http://www.popsci.com/cars/article/2010-10/never-mind-naysayers-chevy-volt-excellent

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"The revelation of driving the Tesla is that electric cars make really fun toys. The Tesla uses electric motors and software instead of pistons and displacement to generate its super-torquey, race-car performance. But behind the wheel, you don't miss the gasoline. "

http://online.wsj.com/article/SB10001424052748704201404574589900770542192.html

"The experience was exhilarating. "

http://energyoutlook.blogspot.com/
Monday, January 25, 2010
"910 Miles Per Gallon*"
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Consider how much time, capital, and engineering brainpower was invested to get the Porshe 911 to 0-60 in under 4 seconds: the first model rolled out in 1963 and they broke through the 4 sec barrier around 2005.

Tesla was founded in 2003. By 2009 it released the first roadsters which also did 0-60 in less than 4 seconds.

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In November 2010 DESIGN NEWS an article by Sr. Technical Editor Charles J. Murray, Electronics entitled ‘Chevy Volt Goes Beyond Green’ reports GM engineers saying VOLT OUTPERFORMS gasoline burning vehicles. The story line underscores Pamela Fletcher’s experience with testing VOLT across the Rockies.

Murray writes: “Clearly though, its [VOLT] much more than that” ...here’s the point, VOLT comes out as being another whole driving experience, a dimension unlike anything ICE.

What kind of car should we buy?

2011-09-24T16:00:00.000-05:00

It seems to me that some kind of a variation on an EV (hybrid, plug-in hybrid, extended range EV, or pure EV) is the sensible answer to reducing and then eliminating oil consumption for personal transportation.

Consumer Reports said that a Prius was cost competitive at $3 gas; Kiplinger just said that the 5 year Total Cost of Ownership of a Chevy Volt is within $1,500 of a much inferior Chevy Cruze.

I only drive about 1,000 miles per year - I mostly use electric trains. Otherwise, I'd invest in something new and electric.

What do you drive?

Are we in overshoot?

2011-07-23T15:37:00.015-05:00

Kind've.

What the heck do I mean by that? Well, to my mind "overshoot" suggests that humanity has exceeded the earth's carrying capacity for long enough and by a large enough margin that recovery from ecological and economic disaster is impossible.

It's not clear that overshoot as an ecological concept applies directly to modern human civilizations: humans do many things for the short term that are not sustainable, but which will be replaced when needed. For instance, the English were in overshoot in the 17th century when they over-used wood - then they switched to coal; coal has been partially replaced by natural gas, and a transition to wind is now beginning.

So, I think it's certainly possible to recover from our exceeding of earth's carrying capacity.

There's an enormous difference in difficulty between analyzing what can be done, and forecasting what is likely to happen.

It's very useful to know that there exist, with very, very little doubt, workable and affordable solutions¹ to our fossil fuel problems. Humanity could, if it chose, eliminate it's carbon emissions and start pulling carbon out of the atmosphere moderately quickly. Removal of carbon from the atmosphere by agricultural and mineral sequestration is doable - just not practical as long as it's overwhelmed by new CO2 inputs.

Whether we will use them properly or, like the Vikings of Greenland, choose not to, will be up to our collective choices. As best I can tell, the primary barrier to better collective choices is resistance to change from the minority that will be hurt (car companies, oil companies, coal companies, etc, etc). This has little to do with the solutions, and is a problem for change of any kind at all.

*Edit: Personally, I'm not optimistic that humanity will choose to prevent Climate Change. As far as I can tell, the consequences of that will be pretty painful. I think it's likely that almost of humanity will survive it. The main consequence will be economic loss and migration for a minority and stagnation of living standards for the majority, while we focus most of our investments and innovation resources on managing and solving the problem.

¹electrification such as electric vehicles and heat pumps; low/zero carbon sources of electricity from some combination of wind power, solar, tidal, nuclear, geothermal, etc, etc.

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We can't be over confident - we should challenge all of our assumptions, evaluate all credible risks, and prepare a diverse set of options.

I think, however, that neither running out of energy due to resource limitations nor lacking the technical means to deal with climate change are credible risks. I come to that conclusion after treating resource limitations as a credible risk over 30 years ago, and looking at the issue quite carefully. I started this blog in great part to share that information with you, anyone who cares to read.

What is "BAU"? Should we change it?

2011-07-22T12:00:00.004-05:00

Isn't the effort to replace fossil fuels with renewable energy just Business as Usual? Shouldn't we be more ambitious about preventing growth that is destroying our environment?

I don't think so. We need to stop harming the environment.

Energy production per se doesn't harm the environment, Green House Gases do. Wind, solar, nuclear don't emit GHGs.

Industrial production per se doesn't harm the environment - careless mining and waste disposal do. Careless mining and waste disposal aren't essential to industrial production.

Economic growth doesn't harm the environment, careless expansion into wild areas does. Overfishing does. Over extraction of water does. Poaching in protected areas does. None of these are essential to economic growth.

I'm saying that

1) decoupling economic growth from environmental harm is possible;

2) decoupling is vastly preferable to deliberate reductions in overall economic activity intended solely to reduce environmental harm, and

3) decoupling is infinitely more politically possible than deliberate reductions in overall economic activity intended solely to reduce environmental harm.

Don't we want to move past simple consumerism?

Our benign management of our environment depends on our affluence and our total resources (technical, social, etc).

As countries and communities begin to be sufficiently affluent that they really "have enough", they begin to stop acting out of being scared for themselves, their families and communities, and start acting out of compassion for others, including other species.

They begin to expand the circle of "family", "tribe" and "community" to include other countries and religions, and other species.

They start to climb the Maslow hierarchy, and find fulfillment in people, life and ideas rather than consumption.

Affluence doesn't guarantee this kind of emotional/spiritual growth, but poverty certainly will prevent it.

Fear and poverty have very little silver lining.
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Beware of false trade-offs. If we're in overshoot, and TEOTWAWKI is inevitable, then it's important to say so. But if "overshoot" is unrealistic, or overly simplistic, then suggesting that Peak Oil (and Peak FF, and peak other things) will cause TEOTWAWKI is only giving ammunition to those people who are desperately attempting to prevent change away from oil and FF (and other things that are counterproductive).

I would argue that "overshoot" is way too simplistic: there's no question in my mind that we've way overshot some things: the amount of CO2 we can put in the atmosphere; the habitat we can take from other species; the harvests we can take from certain natural systems, especially fish; but the idea that we're in overshoot in energy terms is highly unrealistic.

The fact is that we could replace oil and FF in general quite affordably, if we chose to.

If we only chose to...

And that choice is affected by what we say here - we need to get it right. If we say that PO will cause disaster - how can we argue with an Exxon saying the solution is purely "drill, baby, drill"?? If we say that we're about to run out of coal, how do we argue with those who suggest that we don't have to reduce our use of coal because we're going to run out fairly quickly anyway?

Is infinite exponential growth possible?

2011-07-21T12:01:00.019-05:00

Infinite growth in energy consumption on a finite planet is impossible. At some point, won't industrial society start crumbling and free trade begin to disintegrate?

No. This is framing the question in the wrong way.

Thinking about this is kind've fun, but a bit misleading. It suggests that very long-term growth in energy consumption/production is a tenet of mainstream economics. This is highly unrealistic. the volume of goods production levels off in a form of the logistics curve. For example, US car sales (cars & light vehicles) plateaued in the 1970's. Appliance and other durable goods have plateaued in the the same way. Like the demographic transition for population growth, resource consumption does not show an infinite exponential pattern. Instead, it follows an S-curve, levelling off at some point.

Now, goods aren't the only thing an economy produces. Goods production can flatten out, while services continue to grow indefinitely. We need quite a bit more of things like healthcare, engineering, education, the arts, etc.

Besides this basic problem with this idea, there are a number of lesser problems:

1) growth in goods production could continue indefinitely, if desired: the value of goods is a function of both quantity and quality. For instance, the US car industry is still growing in inflation adjusted dollar terms because they keep adding features: anti-lock brakes, electronic stability control, low-energy tires, etc, etc.

2) Energy efficiency wasn't a priority in a low-energy cost environment - energy efficiency could be increased by 2x-10x in general. growth in energy consumption per unit of hard goods could be eliminated permanently - energy efficiency growth could continue at the rate of growth of goods production for as long as needed for the plateau in point 1.

3) large categories of energy consumption could be eliminated entirely, as a practical matter: cars and most other portable times (electronics, etc) could run entirely on ambient solar power, if necessary (yes, I know, that would be inconvenient - don't get distracted by that - it's a theoretical point which is addressing a very theoretical Original Post). Homes can be made zero-energy.

The fact is that wind, solar and nuclear can provide far more energy than we'll ever need. We have more than enough resources for indefinite economic growth, though I'm not optimistic about preventing some of the terrible consequences of our neglect of the environment, like species extinction and climate change.

Can services really grow indefinitely?

Well, until we had all of the services we needed. Knowledge workers like doctor and programmers mostly need a solar powered laptop.

in the end: service would have to comprise essentially the entire economy

On a percentable basis, perhaps, but not on an absolute basis. Everyone would continue to have the same level of goods as they had when production plateaued, and that would work just fine. Think of cars: production levelled off because demand was satisfied. Consumers were happy. There was no deprivation.

Once we are on board that physical resources cannot grow forever, does that impose a restriction for economic activity in general in the long run?

Not at all. Again, we only need a certain level of goods - once we have them, we're fine. Then growth continues for those services we need more of.

Don't services require goods?

Take hospitals, for instance - Much of the their goods consumption is related to the activities of daily living: food, etc. That consumption would take place wherever the patient was.

Arguably some of health care is specialized goods, not services: drugs, medical devices and some treatments. We could spend some time analyzing that, but I'd say the discussion above about goods applies to them: they don't take much energy to manufacture, and their volume is limited - most of healthcare costs are highly skilled services by doctors, nurses, etc.

Radiology requires some equipment, but that equipment is durable. It doesn't grow so much as change: CT and MRI develop increased speed, resolution, etc. Actually, radiology consumes a lot fewer resources than it did 40 years ago, as it converted from silver-based film to digital imaging.

Wouldn't demand for services eventually be satisfied?

Yes, I imagine service growth would eventually end.

A good problem to have.

This, of course, raises a larger question: don't services require a base of hard goods to operate?

Basically.....no. Education requires only people and an IT infrastructure. The same applies to most services.

Doesn't IT require energy?

Sure, but not much in the grand scheme of things, and PC/tablet/smart phone/server energy consumption are declining even as their functionality increase. Infrastructure investment peaks and then declines - highways, churches, homes, etc. That's why we saw a cathedral building bubble in the late Gothic high period, a railroad bubble in the 1880's, an electrical generation bubble in the 1920's, and an internet bubble in the 1990's. IT infrastructure has already peaked and leveled off.

Is the delivery of services subject to productivity gains?

Sure. A lawyer can spend 4 hours drafting a brief with a pencil, or 2 with a word processor, or 1 with software with canned phrases and automated bibliography. He or she can spend an hour presenting a motion in open court, or 5 minutes filing it online. A doctor can handwrite a radiology report, or word process it, or dictate it into software that automatically transcribes it.

I think the price of services is ultimately included in the price of goods.

Healthcare is partially a corporate cost in the US, but not anywhere else in the world. How is education included in the price of goods?

Is it even possible to have a service only economy?

No - no one is suggesting that .

what you are describing is a paradigm shift? you are talking about optimizing consumption and economic management to some boundary?

I think so.

Replacing fossil fuels with renewables; taxing mineral consumption instead of subsidizing it to reduce mining and increase recycling; moving from consumerism to quality of life; etc, etc.

Pretty conservative stuff most of my readers, I hope.

Why insist on using the word 'growth'?

Because that's what most people call it. That's what economists call it.

Growth is generally considered to mean "improvement in our daily lives". Why fight that? Why tell people their lives have to get worse, if it isn't true? That will just destroy any hope of communicating to them that we need to make changes in the way we do things.

Is aviation sustainable?

2011-06-24T18:39:00.009-05:00

Yes, it is.

Air transport is the most difficult area in which to eliminate fossil fuels, but on the other hand:

We're going to have fossil fuels for many decades, should we want them, albeit at lower levels than today - we have time to find the cheapest and most convenient way to replace aviation FF consumption.

In the long run, 3x greater efficiency is possible, and synthetic FF-free fuel is unlikely to be more than 3x as expensive per gallon.

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First, while jet fuel is probably the hardest use for oil to replace, there are a number of ways to use it more efficiently. Short term changes include replacing or reducing use of older, much less efficient planes; filling planes more fully (increasing load factor); longer and more gradual descents, reducing powered flight time; reduced time in the air waiting to land; electric "tugs" on the ground); slightly slower flying speeds; and a long list of others - ( http://www.nytimes.com/2010/10/09/business/09air.html?_r=1&th&emc=th ). A lot of the changes are operational, so they're very fast. Others, like the Boeing Dreamliner, are being delivered pretty much right now. This might be expected to reduce fuel costs by roughly 1/3.

2nd, fuel is only very roughly 40% of airline costs, and oil is only part of the cost of fuel (jet fuel is higher quality, and therefore more expensive). Combined with the efficiencies discussed above, this means that if oil prices were to rise by 100%, airline ticket prices would only go up by 25%. That's not going to stop people from flying.

3rd, it's very unlikely that oil prices will rise by 100% in a sustained fashion. First, oil prices above $150 would slow down economic growth (if not stop it entirely). 2nd, all of the major uses for oil have substitutes that are cheaper when oil rises above roughly $80. If oil prices went to $150 and stayed there for any length of time, consumers would move to carpooling, mass transit, hybrids, EREVs, EVs, rail, heat pumps, etc, etc, very very quickly. Both of these effects would keep prices from rising further, and probably reduce them from that peak.

4th, in the long term, design changes can reduce fuel consumption by 70%:

"CAMBRIDGE, Mass. — In what could set the stage for a fundamental shift in commercial aviation, an MIT-led team has designed a green airplane that is estimated to use 70 percent less fuel than current planes while also reducing noise and emission of nitrogen oxides (NOx). http://web.mit.edu/press/2010/green-airplanes.html

and

"the team has found that the SUGAR Volt concept (which adds an electric battery gas turbine hybrid propulsion system) can reduce fuel burn by greater than 70 percent and total energy use by 55 percent when battery energy is included. Moreover, the fuel burn reduction and the ‘greening’ of the electrical power grid can produce large reductions in emissions of life cycle CO2 and nitrous oxide. Hybrid electric propulsion also has the potential to shorten takeoff distance and reduce noise. "

http://www.boeing.com/Features/2010/06/corp_envision_06_14_10.html

5th, fuel can be synthesized from electricity, seawater and atmospheric CO2 right now, but the costs are high - roughly $10/gallon. The Green Freedom project promises synthetic fuel for $4.50 per gallon, pretty close to where we are today, but if they never fulfill that promise we can still synthesize fuel, albeit at higher cost.

30 years is enough time for aviation to become more efficient - that will keep it going another 20-30 years. 50-60 years is enough to develop and streamline substitutes like biofuels, synthetics liquid fuels (from renewable electricity, hydrogen from seawater electrolysis and atmospheric carbon), or liquid hydrogen.

Green Fredom is probably a very, very long-term thing. Things like CTL, GTL and syncrude will continue for a very long time. It would require a very strong commitment to get rid of fossil fuels.

The actual balance between efficiency improvements and reductions in synthetic fuel costs remain to be seen, but it's highly likely that we'll see synthetic fueled jets with operating costs equal to those of today's airlines.

Does US production follow a Hubbert's Peak model?

2011-05-26T17:48:00.017-05:00

Yes. Kind've. Not quite.

Here's US oil production:

We see that the curve isn't symmetric: it rises a bit in 1985, drifts lower, then starts clearly rising in 2009.

Here's oil prices:

http://www.wtrg.com/prices.htm

This illustrates an important assumption in the Hubbert model: substitution. Hubbert drew his model from his experience with individual oil fields, where depletion of the field wouldn't affect the overall market for oil. The US as a whole is larger, but when oil production in the US peaked, it could still import oil, so prices didn't rise.

Of course, it's a little more complicated: world prices rose due to the oil embargo in 1973, but price increases in the US were suppressed by price controls. Then the Iran debacle raised them in 1979, and we started to see a response by 1985, but then prices fell again. Price feedback didn't happen again until 2005 when world prices started rising - then US lower 48 production started rising again (with a several year lag).

Could this just be random variation?

Well, we have to account for 2M bpd from Bakken-type oil shale. That level of production isn't a sure thing, but it's pretty likely. If it happens, that's definitely not going to fit into random variation of a Hubbert type bell-shaped curve.

Again, the increase from the Bakken (and other fields like it, like the Eagle Ford and the Niobrara) is not due to random variation in discovery. The Bakken increase is due to a change in technology/techniques/engineering - the field has been known for decades, but up to 400B barrels have been out of reach until lately (That's the total theoretical resource. The official estimate of recoverable oil was about .1% of that up to about 3 years ago, then it went to about 1%. Now we're seeing industry estimates of 24B being recoverable - a 6x increase over just 3 years ago).

A Hubbert Linearization of the Lower 48 (using only production data through 1970) showed estimated URR of about 200 Gb, through 1970 the Lower 48 had produced about 100 Gb. Doesn't that suggest that it's unlikely that the Lower 48 will produce much more than another 100GB?

Well, the Lower 48 produced 91.3 Gb from 1971 through 2011, and production is at 1.8Gb per year and rising. I'd say it's pretty clear we'll exceed 100 GB post-1970 by a wide margin.

Will these shale plays will make a really material difference?

The latest estimate is for about another 24 GB from the Bakken alone. "Production results for the Bakken formation in the Williston basin continue to improve with technological advances, prompting Continental Resources Inc. to estimate potentially recoverable reserves of 24 billion boe." http://www.ogj.com/index/article-display.articles.oil-gas-journal.volume-109.issue-23.general-interest.focus-unconventional-oil-gas-sliding-sleeve-fracs.html.html

The Eagle Ford is also important: The Eagle Ford is also important: "With the Eagle Ford Shale alone now expected to eventually deliver 750,000 to 800,000 b/d of oil, industry leaders repeated their growing enthusiasm Monday for a newfound focus on US oil plays over natural gas."

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6162878

It seems to me that analysis of our historical experience leaves out two key things: technical change, and price feedback.

Much of our historical experience is based on periods where there wasn't a great deal of technical change, and on a field-by-field and country-by-country analysis, where depletion doesn't cause a price signal feedback. In our current situation we have permanently high prices, which is a new thing. As a result, US production is increasing, and that increase appears likely to continue for a while.

I wouldn't want US domestic drilling to distract from the important thing, which is kicking the addiction to oil - the more we do so, the better off we'll be, in many, many ways. OTOH, we have to be realistic: US production is looking less and less like a Hubbert peak shape, and on the whole that's probably good.

Is Jeremy Grantham right about Peak Everything?

2011-05-02T14:54:00.011-05:00

Jeremy Grantham, co-founder of money manager GMO with $106 billion under management, has developed an interest in resource limitations as obstacles to economic growth. See his article on GMO's web site http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf .

Grantham's analysis is almost entirely about Peak Oil, and I'd say it's spot on: The US will face reduced growth during a transition away from oil, and many poorer countries will be in deep trouble.

The idea that we face Peak Everything is unrealistic on it's face: most of our other resources, like sun, wind, uranium/thorium, iron (5% of Earth's crust), aluminum (8.1% of Earth's crust), silicon, carbon, (etc, etc) are effectively unlimited, and will be substituted for the small minority of non-fossil fuel commodities that truly face limits, like copper. It's not hard to find good ores for these things, and the energy needed is small. The harder part is building the facilities.

Oil and copper are important, and it will take quite a bit of work to wean ourselves from oil in particular, but it can and will be done.

He talks about the move away from the trend line being too large to be random - well, that kind of technical chart analysis is silly. We know the fundamentals of what happened...China happened. Just because China dramatically raised the price of iron ore, cement, gold and silver doesn't mean that iron ore or cement supplies face any kind of limit.

It's an old fashioned short term boom and bust commodities cycle: prices rise sharply because current production capacity is exceeded. The boom has little to do with long-term trends for things like iron and aluminum, and it will go bust when China can no longer sustain 50% of it's economy going into capital investment. They're close now, with a lot of underutilized real estate sitting around waiting for buyers/tenants that aren't coming any time soon. Japan did the same thing.

China is a lot more important than any other country, as far as I can tell - it's bigger than anyone besides India, and building much more. China is consuming more right now in the way of iron, cement, etc than it ever will in the future, in order to catch up. This will end abruptly, and it's hard to imagine how that can be a quiet event.

In January of 2008 his fund's assets were $157B.
http://www.financialarmageddon.com/2008/01/another-permabe.html

In October of 2008 Grantham was vindicated by the 2008 crash, and his fund's assets had shrunk to $120B. That's entirely understandable. But despite the bottoming and recovery of capital markets since then, his fund's assets shrank again, to $106B. He seems to be losing his touch...

http://www.businessweek.com/magazine/content/08_44/b4106048104130.htm

Is our current monetary system sustainable?

2011-04-21T11:10:00.007-05:00

This is a very complicated topic. I've been thinking about it (and things related to it) for a long time, and I still don't know what to think. I'd be delighted to talk about it for quite a long time - it's important and interesting. Here's some of my thinking - let me know what you think!

Here are my thoughts at this moment:

I think that the last 60 years have been quite exceptional - a real golden age. Can it be sustained? I tend to think so, but there are certainly a lot of risks.

I think the great majority of economists think that "fiat" money is a much better way to manage an economy. If you look at the years 1800-1940, you see a lot of deep recessions, like the one from about 1870-1890, which appear to have been at least partly caused by the gold standard. I think that the "establishment" (central banks, governments, big private banks, most economists, etc) isn't even considering going back to it, and would fight it tooth and nail. I suspect they'll succeed at that fight.

The fact that gold is in limited supply guarantees that under a gold standard periodic deflations will happen, most of them very painful and recessionary. A "fiat" currency can be expanded along with the economy, and a small amount of inflation (maybe 2%) can be maintained to encourage people to keep their money out of mattresses.

Hyper inflations of fiat currencies certainly have happened in the past. The biggest example I know of, Weimar Germany, was caused not by government incompetence or avarice, but more or less by fundamentals: France was taking revenge for the reparations that followed the 1870 war by demanding huge reparations from Germany after WWI, and Germany blew up their currency rather than comply and be impoverished.

The conventional explanation for the large increase in M1 is that the velocity of money dropped dramatically, so that the overall money supply (which more or less depends on "velocity x bank deposits") didn't really expand. That seems to make sense to me. Ufortunately, velocity is very hard to measure, so I'd say that the Fed is navigating by the seat of their pants. I'd say some inflation in the next few years (roughly 3-4%) is a good possibility. On the other hand, wage earners have no leverage at all, so a wage-price inflationary spiral seems very unlikely.

The level of US debt depends on what happens to oil prices and imports. Will we be smart, and move ASAP to hybrids, extended range electric vehicles like the Volt, EVs like the Leaf? Will shale-oil (like the Bakken, not Green River) production expand? We can only hope. Oil imports have dropped by 25% in the last 3 years - if we can keep that up, the US will be much stronger economically.

Regulation of the financial markets is lax, and this laxness caused the Great Recession. I'm afraid we're likely to see future bubbles and blow ups, though I'm not sure where or when. If we could figure that out, we could be rich! On the other hand, we've survived an awful lot of bubbles in the past - see "This time is different - eight centuries of fiscal folly" for proof.

How much do batteries cost? - part 7.

2011-04-02T16:38:00.003-05:00

I've been arguing for quite a while that battery costs, like the cost of any manufactured item, depend heavily on volumes. That means that any analysis of battery costs depends on the production volume that one assumes.

Here's an article that helps clarify that:

"One carmaker willing to share a number is Coda Automotive, a small California-based electric car startup. Dan Mosher, the company’s chief financial officer, also spoke at Electric Car 2.0. “The $375 price might be fiction, but it’s a fact that the costs are coming down quite dramatically. Today, we might still be around $1,000 to $1,200 per kilowatt-hour,” Mosher said. He expects the price to reach $375 per kilowatt-hour in the next five to 10 years.

Mosher cited advantages that Coda might have, because the company manufactures offshore (in China)—but that benefit pales to the advantage enjoyed by major carmakers. Nissan, by virtue of its joint venture with Japan’s NEC Corp., has decades of experience in mass-producing lithium ion batteries. The company is projecting first year global production of the Nissan Leaf at 50,000 units.

“Can somebody really build a vehicle where they pay $375 per kilowatt-hour in 2010, I would say that’s pushing it,” Duvall said. “What they may see is forward pricing and they know their 50,000th or 100,000th vehicle will have that pricing. There’s no physical reason, based on materials and price of production, why that can’t happen.”

See the rest of the article: http://www.plugincars.com/electric-car-battery-costs-don%E2%80%99t-believe-what-you-read.html

Resistance to Change: #7 in a Annoying Series

2011-03-12T16:50:00.004-06:00

"Poor Exxon. They used to be the oil company that everybody loved to hate. This spawn of the Standard Oil breakup had it all: Obscene profits, the Exxon Valdez, a mean CEO who sneered at clean energy, blatant funding for climate deniers.

But now, the new ExxonMobil is just not that special anymore.

It turns out that all the big oil companies are buying elections, paying front-groups to spread lies about climate change and dumping their tiny investments in clean energy while continuing to put out soft-focus ads touting how green and socially responsible they are. And they just don’t seem to care that much about preventing oil spills either.

In these days of peak greed, you have to drill pretty deep in the oil patch to find the worst of the worst.

A real gusher

Well, after coming up with a bunch of dry holes, the environmental and government-reform movements seem to have found the activist equivalent of Old Spindletop: Charles and David Koch."

See http://transitionvoice.com/2011/02/more-reasons-to-hate-the-koch-brothers/

How much do batteries cost? - part 6

2011-01-12T12:52:00.016-06:00

Battery costs, like the cost of any manufactured item, depend heavily on volumes.

We see that here:

""If (Tesla's battery structure) works, we won't have to wait for a breakthrough in battery technology to develop a relatively cheap electric vehicle," Executive Vice President Takeshi Uchiyamada, who heads Toyota's research and development, told Reuters in an interview at the Detroit auto show on Tuesday.

"It could be as low as one-third of the cost of batteries being developed by car makers, because (laptop) batteries are produced in massive volumes." Source

That 67% cost reduction includes a sophisticated liquid cooling and battery management system, and extensive internal thermal isolation, which should be at least as expensive as the Volt's battery systems, and rather more expensive than those of the much simpler Leaf systems.

The batteries being developed for vehicles should cost less than laptop batteries very soon, because it's much less expensive to manufacture larger batteries than the equivalent in the form of hundreds of tiny laptop batteries. EV volumes will grow to the point of economies of scale very quickly: if an EV like the Leaf uses the equivalent of 3,100 laptop batteries¹, it only takes 85,000 EVs², to equal the volume of about 260,000,000 laptops...

¹ the Tesla has 6,813 batteries for about 53kWh - that suggests about 3,100 for the 24kWh Leaf!
² The planned deliveries for the Volt and Leaf in 2011

Why isn't trucking moving faster to electric vehicles?

2010-12-13T10:36:00.002-06:00

Companies with large local delivery operations, like Staples, UPS and others, are moving to electric trucks, but they're doing so very slowly, despite clear savings:

"The trucks, which have a top speed of about 50 mph and can carry 16,000 pounds, cost about $30,000 more than a diesel, but Staples expects to recover that expense in 3.3 years because of the savings inherent in the electric models, Mr. Payette said.

Staples said the annual maintenance cost of a diesel delivery truck is about $2,700 in most years, including oil, transmission fluid, filters and belts. For an electric truck—which has no transmission and needs no fluids, filters or belts—the cost is about $250."

http://online.wsj.com/article/SB10001424052748704584804575644773552573304.html?mod=googlenews_wsj

On the other hand, the volumes are very small:

"FedEx is using 19 all-electric vehicles in London, Paris and Los Angeles made by Modec of Great Britain and Navistar International Corp. FedEx Chief Executive Officer Fred Smith has been outspoken about his desire to see electric vehicles proliferate, in part to cut the U.S. dependence on imported oil."

Why so slowly?

One problem: achieving economies of scale. The manufacturer received a grant to help get past that hurdle:

"Bryan Hansel, Smith's CEO, said his company is on track to lower its costs enough to not raise prices after its federal grant is used up. "We don't think there is a need for ongoing support," Mr. Hansel said. "

In comparable production volumes, electric vehicles are much cheaper than ICE vehicles, both to manufacture (without the battery) and to maintain. The cost of the battery will be more than paid for with fuel savings, leaving the other savings as profit.

Note the short-term orientation, which makes any kind of innovation difficult:

"One impediment to wider adoption of electric trucks: few finance companies offer leases on them. That's because finance companies are unsure about how to value the lease "residual," a truck's worth after a few years of use. "

The leasing companies are risk-averse. The larger problem: the operating companies are risk-averse, which is why they're leasing in the first place:

"Many large companies, including Staples, prefer to lease trucks to avoid the large capital requirements of an outright purchase, Mr. Payette said."

Can we reduce CO2 emissions from concrete?

2010-12-08T17:27:00.003-06:00

Yes, it looks likely. We're seeing a large number of new chemistries that would allow this. The real question - how quickly we can get a very conservative building industry to test and adopt one or more of these solutions:

"Making cement for concrete involves heating pulverized limestone, clay, and sand to 1,450 °C with a fuel such as coal or natural gas. The process generates a lot of carbon dioxide: making one metric ton of commonly used Portland cement releases 650 to 920 kilograms of it. The 2.8 billion metric tons of cement produced worldwide in 2009 contributed about 5 percent of all carbon dioxide emissions. Nikolaos Vlasopoulos, chief scientist at London-based startup Novacem, is trying to eliminate those emissions with a cement that absorbs more carbon dioxide than is released during its manufacture. It locks away as much as 100 kilograms of the greenhouse gas per ton.

Vlasopoulos discovered the recipe for Novacem's cement as a grad student at Imperial College London. "I was investigating cements produced by mixing magnesium oxides with Portland cement," he says. But when he added water to the magnesium compounds without any Portland in the mix, he found he could still make a solid-setting cement that didn't rely on carbon-rich limestone. And as it hardened, atmospheric carbon dioxide reacted with the magnesium to make carbonates that strengthened the cement while trapping the gas. Novacem is now refining the formula so that the product's mechanical performance will equal that of Portland cement. That work, says Vlasopoulos, should be done "within a year."

Other startups are also trying to reduce cement's carbon footprint, including Calera in Los Gatos, CA, which has received about $50 million in venture investment. However, Calera's cements are currently intended to be additives to Portland cement rather than a replacement like Novacem's, says Franz-Josef Ulm, director of the Concrete Sustainability Hub at MIT. Novacem could thus have the edge in reducing emissions, but all the startups face the challenge of scaling their technology up to industrial levels. Still, Ulm says, this doesn't mean a company must displace billions of tons of Portland cement to be successful; it can begin by exploiting niche areas in specialized construction. If Novacem can produce 500,000 tons a year, Vlasopoulos believes, it can match the price of Portland cement.

Even getting that far will be tough. "They are introducing a very new material to a very conservative industry," says Hamlin Jennings, a professor in the Department of Civil and Environmental Engineering at Northwestern University. "There will be questions." Novacem will start trying to persuade the industry by working with Laing O'Rourke, the largest privately owned construction company in the U.K. In 2011, with $1.5 million in cash from the Royal Society and others, Novacem is scheduled to begin building a new pilot plant to make its newly formulated cement."

http://www.technologyreview.com/energy/25085/

And, another form of zero-CO2 paving:

"... instead of paving with asphalt, why not use stone — sandstone to be exact, sandstone that is manufactured in place using a biological process.

Two prominent American designers, Thomas Kosbau and Andrew Wetzler, have taken an idea from a scientific paper published in 2006 and run with it. The system they devised for paving with stone has just won top prize in a South Korean design competition. And the competition was stiff — 4034 entries from 95 countries.

The stone they use is not just any stone. Instead they refer to “a biologically treated and processed paving material that uses a common microbe to alter the properties and behaviour of loose grains of sand into stabilized sandstone.”

The team says that mixing common sand, which is one of the planet’s most abundant resources, with a solution containing the microorganism Bacillus Pasteurii results in a cementing process that turns the mix into biologically engineered, hardened sandstone. "

http://www.dcnonl.com/article/id41858

What if something can't compete? "viability" vs "competitiveness"

2010-11-28T11:27:00.006-06:00

Chemical companies use oil as a feedstock to make plastics, glues, etc because it is still cheaper than alternatives. British coal has mostly been replaced by cheaper imports. Won't migration to alternatives raise prices and lower living standards?

Yes, but how much? There is a basic paradigm that's useful here: "viability" vs "competitiveness". In most industries a very small cost difference can make you uncompetitive. That means that slightly higher cost solutions will be avoided, which can give the impression that those solutions are higher cost than they are. OTOH, if changes in the business environment (or natural environment!) change the costs of alternatives for everyone, suddenly alternatives can become acceptable in that industry.

There is an analogy in sports: "winner takes all". Tiger Woods and Pete Sampras get all of the publicity and a lion's share of the prize money. The 200th best player in either sport gets no publicity or prize money. On the other hand, the 200th best player will mop the field/court with you or me just as fast as would Tiger or Pete.

So, for instance, recycled materials are in general slightly more expensive than virgin materials, plastic included. But, if oil becomes more expensive then recycled materials could suddenly become the standard. If something could be recycled with only 10% loss at each generation, that would reduce the consumption of virgin materials by 90%, with only a very small additional cost for the industry.

As another example, high sulfur Illinois Basin coal costs perhaps 2 cents per kWh to scrub. That's an enormous margin to power plant consumers, who are willing to pay for long-distance transport of lower-quality Powder-River coal. The net difference in cost might be only half of one penny per kWh, which is still an enormous margin to power plant consumers. On the other hand, let's assume power prices rise by one half penny around the globe (to eliminate questions of regional competition) - how much difference would it make to consumers to add a half penny per kWh? Sure, they'd notice it, but would the difference cause any factories to close their doors, or homeowners to not be able to pay their mortgages? No.

Is the average voter helpless over energy policy?

2010-11-19T17:32:00.003-06:00

No. If voters were to usher in a government that made dramatic changes to our energy polices, I don't believe that the corporations that were affected would try to overthrow the government. And, if such a government campaigned on the basis of dramatic change, and therefore had a mandate to implement them, I don't think that lobbyists behind the scenes would succeed in preventing them.

On the other hand, I think it's clear that corporations try to manipulate voters in order to get their short-sighted way. And, it seems pretty clear that most voters aren't very good at resisting the disinformation and appeals to emotion that corporations use to achieve their goals:

"...The Tea Party movement, which is threatening to cause an upset in next month's midterm elections, would not be where it is today without the backing of that most traditional of US political supporters – Big Oil.

The billionaire brothers who own Koch Industries, a private company with 70,000 employees and annual revenues of $100bn (£62bn), used to joke that they controlled the biggest company nobody had ever heard of.

Not any more. After decades during which their fortune grew exponentially and they channelled millions of dollars to rightwing causes, Charles and David Koch are finally getting noticed for their part in the extraordinary growth of the Tea Party movement.

The two, 74-year-old Charles and David, 70, have invested widely in the outcome of the 2 November elections."

http://www.guardian.co.uk/world/2010/oct/13/tea-party-billionaire-koch-brothers

Resistance to Change - Yet More...

2010-11-15T14:43:00.003-06:00

Corporations, focused on their fiduciary duty to their investors to maximize profit, are attacking government's ability to charge for external costs like pollution. "Pigovian" taxes just became much more difficult in California:

"It was the "sleeper" ballot initiative of California's election season: Few paid heed to Proposition 26, besides the oil, tobacco and alcohol companies that funneled millions of dollars into promoting it in the final weeks of the campaign.

Now, from the Capitol in Sacramento to the boardrooms of county supervisors and city councils, lawmakers and lobbyists are scrambling to assess the fiscal and political effects of the measure, one of the most sweeping ballot-box initiatives in decades. Proposition 26 reclassifies most regulatory fees on industry as "taxes" requiring a two-thirds vote in government bodies or in public referendums, rather than a simple majority.

Approved by voters 53% to 47% on Nov. 2, it is aimed at multibillion-dollar statewide issues such as a per-barrel severance fee on oil and a cap-and-trade system for greenhouse gases. It's also aimed at local ordinances that add fees on cigarettes to pay for trash pickup and on alcohol to fund education and law enforcement programs.

Last week, the American Chemistry Council warned Los Angeles County supervisors that a proposed ordinance banning plastic grocery sacks and imposing a 10-cent fee on paper bags falls under the voting requirements of Proposition 26.

"We think it was a fair way to go," said Allan Zaremberg, chief executive of the California Chamber of Commerce, the biggest contributor to the Proposition 26 campaign. "It clarifies what is a tax and what is a fee. Right now, the public doesn't want any taxes."

Some simple charges are exempt, such as fees for marriage and fishing licenses, restaurant health inspections and property assessments.

But environmentalists and health advocates said the initiative makes it nearly impossible in the current political climate to boost industry fees for cleaning up air, water and toxic waste pollution; for curbing smoking and alcohol abuse; or for enacting new programs.

"California just got a lot harder to govern," said Bill Magavern, California director of the Sierra Club.

Proposition 26's TV campaign attacking "hidden taxes" caught many public interest groups unprepared. Hyper-focused on Proposition 23, the unsuccessful effort to suspend the state's global warming regulations, they were unable to pivot in time.

Environmentalists, unions and the Democratic Party scrambled to raise $6.6 million to fight Proposition 26, but proponents outspent them by 3 to 1."

http://articles.latimes.com/2010/nov/14/local/la-me-prop26-impact-20101115

Do we need oil? - short form

2010-11-02T17:17:00.029-05:00

Nah.

Again, there is this puzzling assumption that oil can't be replaced, that it is somehow magically necessary for industrial/modern civilization. Oil has been cheap and convenient for the last 100 years, but the industrial revolution started without it, and modern civilization certainly will continue without it.

• 130 years ago, kerosene was needed for illumination, and then electric lighting made it obsolete. The whole oil industry was in trouble for a little while, until someone (Benz) came up the infernal combustion engine-powered horseless carriage. EVs were still better than these noisy, dirty contraptions, which were difficult and dangerous to start. Sadly, someone came up with the first step towards electrifying the ICE vehicle, the electric starter, and that managed to temporarily kill the EV.

Now, of course, oil has become more expensive than it's worth, what with it's various kinds of pollution, and it's enormous security and supply problems.

• 40 years ago oil was 20% of US electrical generation, and now it's less than .8%.

• 40 years ago many homes in the US were heated with heating oil - the number has fallen by 75% since then.

• US vehicles reduced their fuel consumption per mile by 50% from about 1978 to about 1990.

• 50% of oil consumption is for personal transportation - this could be reduced by 60% by moving from the average US vehicle to something Prius-like. It could be reduced by 90% by going to something Volt-like. It could be reduced 100% by going to something Leaf-like. These are all cost effective, scalable, and here right now.

I personally prefer bikes and electric trains. But, hybrids, EREVs and EVs are cost effective, quickly scalable, and usable by almost everyone.

Sensible people won't move to a new home to reduce commuting fuel consumption. That would be far, far more expensive than replacing the car. It makes far more sense to buy an EV and amortize it over 20 years at a cost of less than $2k per year (about the amount they'd save on fuel), versus moving to a much higher cost environment (either higher rent or higher mortgage).

• As Alan Drake has shown, freight transportation can kick the oil-addiction habit relatively easily.

We don't need oil (or FF), and we should kick our addiction to it ASAP.

The only reason we haven't yet is the desperate resistance from the minority of workers and investors who would lose careers and investments if we made oil and other FFs obsolete.

Some might ask, what about our current debt problems?

Debt is a symbol, a marker - what matters is the underlying productive capability of our economy, which will be just fine. Could we screw up the management of our economy, and go into a depression? Sure. But it's not likely.

Don't these transitions take 50 years?

The transition from kerosen to electricity for illumination took roughly 30 years. The US transition away from oil-fired generation took very roughly 20 years. The transition away from home-heating oil was also faster than 50 years (though uneven).

The fast transition from steam to diesel locomotive engines is illustrative. There were a few diesel locomotives in use in the U.S. during World War II but steam dominated in 1945. However, the steam locomotives had been very heavily used during World War II, and they all wore out at approximately the same time the first few years after 1945. When steam locomotives wore out, they were invariably replaced by diesel in the mid 1940s. By 1949, almost all steam locomotives were gone. There were still some steam locos made in the late 40's, and they were still in service in the 50's but dwindling. The RR's also relegated the steamers to branch line and switcher use - replacing the most used lines with diesel first as you would expect. Cn rail retired its last steam engine in 1959.

Other, very slow transitions are not a good guide to the future. For instance, the transition from coal to oil could be very slow, because there was no pressure - it was a trade up, not a replacement of a scarce resource. Many transitions occurred because something new & better came along - but the older system was still available and worked just fine. Oil may become very expensive very fast and that would provide us an incentive to switch over much more quickly.

On the other hand, we can point to many energy transitions that were sideways or down. The early transition from wood to coal in the UK was a big step down: harder to find and transport, dirtier - a pain in every way. Coal's only virtue was it's abundance. The transition from EVs to ICEs took a while - only when ICEs started to electrify did they become competitive. And, of course, we hid the external costs of oil from consumers: freeways (built by "engine" Charley Wilson after he went from President of GM to Secretary of Defense), pollution, overseas wars, etc. I'd argue that ICEs were never better than EVs - they just appeared that way.

On the other hand, EVs are better right now. They have better driving performance (better acceleration, better handling), and lower total lifecycle costs.

Unfortunately, we have more than 50 years worth of things we can burn for electricity. Fortunately, it doesn't look like we will. For instance, coal consumption in the US dropped 9% last year, about half of that due to loss of market share.

The transition from heating with wood to heating with coal took a lot more than fifty years. Electrification of the U.S. from small beginnings in the late nineteenth century to finishing rural electrification during the Great Depression took at least forty years.

Sure. These involved an enormous amount of infrastructure. On the other hand, EV/EREV/HEVs are manufactured on the same assembly lines as ICE vehicles, and roughly 75% drivers in the US have access to an electrical plug where they park.

If we mobilized all our resources as we did in World War II with the single objective of getting off fossil fuels as fast as possible, wouldn't the transition still take at least twenty years, and probably longer than that?

It would be much easier than that. A transition to EVs requires only a change within the automotive industry (for most drivers).

But are we actually seeing any replacements of oil?

Consumption in the US has fallen by 10% in the last 3 years (while GDP has recovered to the point it reached when oil consumption peaked in 2007), and it continues to fall. Production has risen (both C&C and all liquids), and net imports have fallen by 25%.

Didn't past transitions occur in a environment of growth, when making new investments was a good idea, and banks would lend?

The transition from horses to rail occurred mostly during the Long Depression from 1873-1890. The move from horses to tractors and automobiles continued at a very good speed during the depression, as did general electrification. The transition away from oil for electrical generation accelerated during the 1979-1981 recession(s), and CAFE standards rose.

More Resistance to Change....

2010-10-25T17:28:00.001-05:00

"The oil, coal and utility industries have collectively spent $500 million just since the beginning of 2009 to lobby against legislation to address climate change and to defeat candidates, like Mr. Hill, who support it, according to a new analysis from the Center for American Progress Action Fund, a left-leaning advocacy group in Washington.

Their message appears to have fallen on receptive ears. Of the 20 Republican Senate candidates in contested races, 19 question the science of global warming and oppose any comprehensive legislation to deal with it, according to a National Journal survey. "

http://www.nytimes.com/2010/10/21/us/politics/21climate.html?_r=1

"BP and several other big European companies are funding the midterm election campaigns of Tea Party favourites who deny the existence of global warming or oppose Barack Obama's energy agenda, the Guardian has learned.

An analysis of campaign finance by Climate Action Network Europe (Cane) found nearly 80% of campaign donations from a number of major European firms were directed towards senators who blocked action on climate change. These included incumbents who have been embraced by the Tea Party such as Jim DeMint, a Republican from South Carolina, and the notorious climate change denier James Inhofe, a Republican from Oklahoma.

The report, released tomorrow, used information on the Open Secrets.org database to track what it called a co-ordinated attempt by some of Europe's biggest polluters to influence the US midterms. It said: "The European companies are funding almost exclusively Senate candidates who have been outspoken in their opposition to comprehensive climate policy in the US and candidates who actively deny the scientific consensus that climate change is happening and is caused by people."

http://www.guardian.co.uk/world/2010/oct/24/tea-party-climate-change-deniers

Are Electric Vehicles cost effective?

2010-10-15T10:41:00.002-05:00

Yes. Here's a Leaf price comparison:

First, you have to decide whether you're looking at out of pocket costs, or trying to look at underlying "real" costs. If we look at market prices paid by buyers, we have to include the credit. If we want to look at actual system-wide costs, we have to include external costs like pollution, supply security, etc. For our purposes today, let's look at out of pocket prices.

2nd, you have to decide what vehicle to compare it to. Here's what Wired magazine says:

"A nicely appointed five-door, five-passenger compact—equivalent to, say, a Honda Civic or Toyota Corolla. But it’s electric, so it’s fairly torquey—the measly 107-horsepower motor hustles like it’s got double the ponies up to 40 mph. The ride is soft but surprisingly sure-footed thanks to a 600-pound air-cooled battery under the floorboard."

http://www.wired.com/magazine/2010/09/ff_electriccars/all/1

So, a comparable vehicle would be a Corolla at minimum. Other useful analyses might be: comparison with a Prius, which Consumer Reports tells us is cost competitive with a comparable car; and overall affordability, which might need a comparison with the average US vehicle.

3rd, you have to do your cost calculations.

Now, the average driver drives about 13,000 miles per year in the US. Total Vehicle Miles Traveled is 2,982,532,000 http://www.fhwa.dot.gov/ohim/tvtw/tvtpage.cfm and total number of vehicles is 238,314,692 http://www.bts.gov/publications/national_transportation_statistics/html/table_01_11.html for an average of 12,515 miles per year. The current price is before taxes is $2.29 - with taxes, that's about $2.80 http://tonto.eia.doe.gov/dnav/pet/PET_PRI_ALLMG_A_EPM0_PTC_CPGAL_A.htm . The Corolla gets about 30 MPG per http://www.toyota.com/corolla/trims-prices.html , so the Corolla costs about $1,168 per year for fuel.

The Leaf should use about .25kWh per mile, and night time power should cost about $.055/kWh ( The average retail rate for power in the US is $.11 (the coasts have more expensive power), and night time rates should be about 50% of that (often it is much lower, occasionally wholesale rates even go negative)), for an annual cost of $172.

Other factors: less maintenance, due to a much simpler drive train and the elimination of many support systems, fluids, belts, etc, etc. An important example: brake costs will be much lower, due to regenerative braking.

Insurance costs? Insurance costs are based on many things, including theft rates, collision rates, repair costs, anti-theft system and owner behavior. A taxi owner I just interviewed told me that a Prius would cost him 40% more than the usual Crown Vic-type workhorse, but that insurance would cost no more. BTW, the extra cost of the Prius is paid for in 10 months by the fuel savings... The Prius might be a guide: anyone seen a good source?

A Corolla, financed over 10 years, would cost $23,991 ($16,850 XLE, 7% interest) + 11,680 gas costs for $35,671.

A Leaf, financed over 10 years, would cost $35,993 ($32,780 minus $7,500 rebate, 7% interest) + 1,720 gas costs for $35,714.

So, a conservative comparison gives out of pocket costs which are almost identical. Other comparisons would look even better: including state rebates (CA-$5K, TN-$2K, GA-$5k?); comparing to a more expensive Corolla; to the average US vehicle; to a Prius; or using real costs (eliminating the rebate and including the external cost of oil).

In countries like Israel or Denmark, the Leaf will be a 1st car, supported by Better Place. OTOH, I don't expect Better Place to have a big impact on the US soon. On the 3rd hand, it's worth noting that: they are trying, in places like San Francisco; many places (e.g., Tennessee!) are installing charging stations on critical paths, and that a relatively small number can make a disproportionate difference; and the Leaf has a clever built-in app that finds efficient routes and charging stations.

Even more resistance to change

2010-10-07T10:15:00.007-05:00

"What has Gov. Arnold Schwarzenegger of California incensed is the fact that two Texas oil companies with two refineries each in California are financing a campaign to roll back California’s landmark laws to slow global warming and promote clean energy innovation, because it would require the refiners to install new emission-control tools. "

“It is very clear that the oil companies from outside the state that are trying to take out A.B. 32, and trying to take out our environmental laws, have no interest in suspending it, but just to get rid of it,” Governor Schwarzenegger said at an energy forum ... They’re not interested in our environment; they are only interested in greed and filling their pockets with more money.

“And they are very deceptive when they say they want to go and create more jobs in California,” the governor added. “Since when has [an] oil company ever been interested in jobs? Let’s be honest. If they really are interested in jobs, they would want to protect A.B. 32, because actually it’s green technology that is creating the most jobs right now in California, 10 times more than any other sector.”

No, this is not about jobs. As ThinkProgress.org, a progressive research center, reported: Two Texas oil companies, Valero and Tesoro, “have led the charge against the landmark climate law, along with Koch Industries, the giant oil conglomerate owned by right-wing megafunders Charles and David Koch. Koch recently donated $1 million to the effort and has been supporting front groups involved in the campaign.”

source

More resistance to change

2010-08-31T13:59:00.002-05:00

We can eliminate our dependence on oil, but how quickly will we do so? The tools are here: Hybrids like the Prius, EREVs like the Volt, and EVs like the Leaf have been engineered and are for sale. Wind power has grown to the point where it can provide whatever we need (and yes, nuclear and solar are important too). So, what's left is the pace of cultural change, and the small matter of politics - how we deal with the minority that wants to block change:

"The billionaire brothers Charles and David Koch are waging a war against Obama. He and his brother are lifelong libertarians and have quietly given more than a hundred million dollars to right-wing causes."

http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?currentPage=all

Will farm equipment, like tractors & large combines, survive Peak Oil?

2010-08-25T00:03:00.042-05:00

Sure.

First, diesel will be around for decades for essential uses, and in a transitional period commercial consumption will out-bid personal transportation consumers for fuel. Most farmers are small and suffering, but most farm acreage is being managed by large organizations, and is much more profitable. Those organizations will just raise their food prices, and out-bid personal transportation (commuters and leisure travel) for fuel, so they'll do just fine. As farm commodities are only a small % of the final price of food, it won't make much difference to food prices.

For example, "beanfarmer" tells us that diesel is less than 10% of his costs, so that if diesel prices double, and food prices rise by 10%, he'll be better off http://www.theoildrum.com/node/6871/708181 . The distribution system, too, will outbid personal transportation for fuel. Given that overall liquid fuel supplies are likely to only decline 20% in the next 20 years, that gives plenty of time for a transition.

Second, farm equipment isn't optimized for efficiency, and optimization of fuel useage combined with electrification of the drive train could probably double fuel efficiency. For example, GE expects to reduce freight train fuel consumption by 44% with expanded electrification of the drive train. Here's a terminal tractor that reduces fuel consumption by 60%.

Farm tractors can be electric, or hybrid . Here's a light electric tractor . Farm tractors are a fleet application, so they're not subject to the same limitations as cars and other light road vehicles(i.e., the need for small, light batteries and a charging network). Providing swap-in batteries may be easier and more practical: batteries could be trucked to the field in swappable packs, and swapping could be automated, a la Better Place. Zinc-air fuel cells can just be refuelled. Many sources of power are within the weight parameters to power modern farm tractors, including lithium-ion, Zebra batteries, ZAFC's and the latest lead-acid from Firefly Energy, and others.

It's very likely that an electric combine would be an Extended Range EV: it would have a small onboard generator, like the the Chevy Volt. Such a design would be 50-100% more efficient than a traditional diesel only combine, and would allow extended operation in a weather emergency.

The combine described here http://www.theoildrum.com/node/6871 used about 73.5 gallons in a 12 hour day. That's about 450 kWhs (assuming 15% conversion efficiency*), or about 37.5 kW (or about 50HP on average). 450kWhs in a li-ion battery would weigh about 4 tons (at about .125kWh per kilo). Now, the combine we're talking about can carry 60,000 lbs of wheat, or 30 tons. If we reduce it's carrying capacity by 13% (inconvenient, but certainly doable) we can a days' worth of batteries.

On the other hand, we could choose to swap batteries once during the day, and only carry 2 tons of batteries.

Li-ion batteries cost about $350 per kWh these days (online sources range from $440/kWh to is about $2,000, but they're not selling large-format, high volume, purpose built industrial equipment), , so a 450kWh pack will cost about $160k (that's the wholesale price these days, and will be the retail price in 5 years). Over 30 days per year, we'll use 73.5 x 30 = 2,205 gallons, and use 13,500 kWh. If we want a 10 year payback, then we need to save $16k per year. The power will cost about $1,000 (night time power is cheaper, so the average cost/kWh might be $.07), so we need to save $15k on fuel. $15k / 2,205 = $6.80. gallon.

So, when fuel prices rise above about $7/gallon (timing?), or batteries get cheaper than $450/kWh (probably about 5 years out) electric combines will become competitive.

Or, we might get creative with strategies like cheaper shorter-lived chemistries: lead-acid costs roughly $100/kWh: LA would be competitive with diesel at $2/gallon. Now, LA weighs more: about 80 lbs per kWh (at 35 wHrs per kilo and 80% depth of discharge), so 450kWh would be 18 tons. That might mean swapping batteries every two hours to limit the pack to 3 tons. One advantage: with 4 hour fast charging, we'd only need two packs, which would reduce our cost by 2/3!

How fast do they recharge?

Depends on the chemistry: some li-ion chemistries can recharge to 80% in 30 minutes. OTOH, you might charge overnight. 450kWhs over 12 hours would be about 40kW: that's not that bad. That's a 440V, 100A load.

Most rural power grids are old and close to their load limit now, and many farms don't have large power services or transformers.

True. OTOH, their peak load is during the day, and battery charging would be mostly at night. The farm we discussed would need about 450kWh per day. A 15kW service could provide 1/3 of that in 10 hours: that's not bad. An EREV combine could be 1/3 powered by the grid, 2/3 by fuel.

*The conversions are very straightforward: diesel fuel contains about 40kWh, assuming 100% efficiency of burning. That means that our 73.5 gallons for the day can produce a maximum of about 3,000 kWhs. Now, even the most efficient marine diesels (2 stories high) only get to about 50% efficiency, and that's with a 2 story high 100,1000 HP engine running at the sweet spot of about 80% of rated capacity. A combine engine at best is unlikely to do better than 33%:

Two sources (hat tip to Paul Nash) back this up:

we see from http://www.dieselserviceandsupply.com/Diesel_Fuel_Consumption.aspx that a generator with 150KW output capacity (roughly 200HP) consumes 5.9 gallons per hour at 50% capacity (75KW output). That gives roughly 32% efficiency (75kWh divided by 236 potential kWh (40kWh potential kWh per gallon x 5.9 gallons)).

Another good source for a real world estimate is well known and published naval architect Dave Gerr. If you google Dave Gerr engine fuel consumption, it wil come up with the Google books link to his 2009 book "boat mechanical systems", and on p90, he has his formulas for fuel consumption. For diesel engines, gal/hr = 0.054xhp, so 1 gal/hr =18.5hp or 13.8kW, and for 6gal/hr = 84 kW, so pretty close. A boat engine is a good comparison to a tractor because they tend to run at fairly constant speed for long periods, and often at or near the optimum fuel efficiency point.

The inefficiencies built into the overall mechanical system likely reduce overall efficiency to maybe 15%. I'm really combining several forms of efficiency: engine thermal efficiency, drive train efficiency (including low utilization periods).

Examples of EREV efficiency in large equipment include GE's latest diesel train EREV work) and this new Caterpillar dozer, with diesel electric drive: http://www.cat.com/D7E .This is a production model you can buy today. The electric motor small compared to the engine and generator that power it. They claim a 25% improvement in fuel per ton of earth moved.

I strongly suspect that farm equipment hasn't been optimized for fuel efficiency (note that the majority of the Prius efficiency gains come from outside the hybrid drive train). Sources of inefficiency include hydrostatic transmission & torque converters etc, equivalent of a car automatic; accessory loads powered by always-on mechanical linkages (A/C, brakes, etc); tire and suspension flexing; and aerodynamics (yes, combines move very slowly, but everything adds up).

So, 15% of 3,000 kWhs is 450kWhs for the day.
--------------------------------

Can we really electrify such large pieces of equipment?

Mining gives us a lot of examples of really large electrical equipment: electrical mining equipment. Caterpillar manufactures 200-ton and above mining trucks with both drives. Caterpillar will produce mining trucks for every application—uphill, downhill, flat or extreme conditions — with electric as well as mechanical drive. Here's an electric earth moving truck. Here's an electric mobile strip mining machine, the largest tracked vehicle in the world at 13,500 tons.

A battery pack can fail via a dead short or, for some chemistry types a puncture - in both cases the dense energy can be released in a FAR shorter period of time.

Doesn't this seem a bit alarmist? Doesn't it seem like something the owner of a horse and buggy would have said about those dangerous horseless carriages?

To answer the question directly: the newest li-ion designs are mighty safe, and even the older designs never exploded.

What about just using a very long cable?

An alternative (courtesy of Paul Nash): go mining style, and do it with cable, not batteries. You woul need to have one cable (the A cable) on a reel and trailer, which starts from the SW(say) corner, and will run up the W side of the field. the combine has a B cable, connected to the A cable, and this is started laid out to halfway along the S edge of the field and back to the combine at the corner. The combine moves west to east along the south side, and drags the cable behind it, in the just harvested area. When it gets to the east side, the cable is now at full length, and the combine turns around and comes back, so the cable will be back to being halfway along the field. The A cable is then moved forward two combine widths, so it is behind the next run and you go again.

This is similar to how traveling irrigators (the big gun type, not centre pivot) drag their supply hoses. You then pick up the whole thing , move it over to the next line, and go again.

This might be easier, and cheaper, than messing with batteries. You just need to find an armoured cable to drag along, but those do exist. http://www.generalcable.com/NR/rdonlyres/3F3084D7-6B80-4FA8-9E99-A832A93B620A/0/PG03TypeWPwr.pdf

These are designed to be dragged behind mining equipment, so they can take some punishment, and being driven over etc.
For 100kW, and three phase, 480V, you would be looking at about 150amp/leg, so the #1 sized cable would do it. Not light at 3kg/m, but much lighter than any battery pack, and cheaper too.

Taking the wired concept a step further, you could set up the field in lanes, and run overhead wires for each pair, and use a trolley bus style pickup. Drive to the south side of the wires on the way out, U turn at the end, and come back on the north side, then switch over to the next set of overhead wires for the next lane.

They wouldn't even have to be over head, they could just be at chest height, like a normal farm fence, with a side pick up from the tractor/combine - think a heavy duty, two cable electric fence, and you just energise each length as you go.

Won't we just stay with fuel?

We might. Diesel farm tractors can run on vegetable oil, with minor modifications. Ultimately, farmers are net energy exporters (whether it's food, oil or ethanol), and will actually do better in an environment of energy scarcity.

Battery costs will continue to decline, and liquid fuel costs will likely rise at least a little. At some point those lines will cross, but it may well be long after most of the rest of the economy is electrified.

A grid-sourced approach might work best, in farm areas close to the (Many) new windfarms that are rising in the MidWest. This isn't just to hang the loads on that windpower, but to take advantage of the Grid improvements that the Windfarm brings along with it.

We really don't need one-size fits all solutions: we need a diverse portfolio.

Climate Change denial

2010-08-01T21:18:00.010-05:00

"A dark ideology is driving those who deny climate change. Funded by corporations and conservative foundations, these outfits exist to fight any form of state intervention or regulation of US citizens. Thus they fought, and delayed, smoking curbs in the '70s even though medical science had made it clear the habit was a major cancer risk. And they have been battling ever since, blocking or holding back laws aimed at curbing acid rain, ozone-layer depletion, and – mostly recently – global warming.

In each case the tactics are identical: discredit the science, disseminate false information, spread confusion, and promote doubt. As the authors state: "Small numbers of people can have large, negative impacts, especially if they are organised, determined and have access to power."

http://www.guardian.co.uk/commentisfree/2010/aug/01/climate-change-robin-mckie

Does pollution reflect environmental limits?

2010-07-14T11:53:00.002-05:00

Yes, it's crucial to realize that there are limits to the ability of the earth to absorb pollutants, such as CO2. On the other hand, I'd draw a distinction between pollution, and the kind of limits to growth discussed by the Club of Rome.

Sometimes pollution problems are framed as a "limit to environmental sinks" problem - in which the earth is thought to provide environmental services which have a limit. This is accurate, but it's not a "limit to growth".

Commodity resource consumption is different from pollution:

Pollution is a destructive and undesired side effect. It's magnitude isn't necessarily related to the size of the polluting activity (pollutants can be extremely destructive or only mildly destructive, like the warming effects of methane vs CO2); and pollution can and should be eliminated, while resource consumption generally is intended, and has value.

CO2 in particular is difficult to separate from energy production, but it's very doable, by electrifying energy consumption and producing renewable electricity.

Could we use solar power for transportation?

2010-06-23T15:56:00.023-05:00

I often hear that installing wind and solar power doesn't help with our oil import problems, because we don't use oil for electrical generation anymore. I think that's not thinking far enough "outside the box".

So, do renewables help with our problems with oil?

Yes, solar power should be an important part of our transportation solution portfolio.

Transportation needs to be electrified, and all forms of existing transportation have power-hungry electrical systems, which draw power from the engines. PV can provide electricity more cheaply than can gasoline/diesel engines functioning as generators¹.

We could reduce transportation fuel consumption by aggressively deploying PV on planes, trains, ships and automobiles. Let's discuss the hardest case, flying.

1st, Manned non-commercial planes that run on PV² exist right now, and PV can certainly provide "hotel" electrical consumption (lighting, instruments, etc) on commercial aircraft. Planes travel above the clouds, and mostly during the day, which raises the "capacity factor" - the % of time the PV would generate power. The surface area of a plane could be maximized with trailing surfaces and longer wingspans. Taking the surface area of a large existing plane, one might generate 5% of overall energy needs using 20% efficient current commercial technology.

PV efficiency is likely to rise to something close to it's theoretical 66%, tripling the % that it can provide, while energy requirements are likely to fall: In the long term, design changes can reduce fuel consumption by 70%: "CAMBRIDGE, Mass. — In what could set the stage for a fundamental shift in commercial aviation, an MIT-led team has designed a green airplane that is estimated to use 70 percent less fuel than current planes while also reducing noise and emission of nitrogen oxides (NOx). source

The combination of 3.3x the PV output and 1/3 the energy requirement brings the PV % up to perhaps 50% of energy needs.

Finally, the remainder of the power could come from fuel (SOFC, hydrogen, etc) cells, which make much more sense for aviation than for personal transportation because infrastructure requirements are much easier to deal with (there are a relatively small number of airports). It's perfectly possible aviation will go to fully electric drivetrains.

Lets look at shipping, starting with the Emma Mærsk . With a length of 397 metres, and beam of 56 metres, it has a surface area of 22,400 sq m. At 20% efficiency we get about 4.5MW on the ship's deck at peak power. Now, as best I can tell it probably uses about 10MW at 12 knots (very roughly a minimum speed), 20MW at 15 knots, and 65MW (80% of engine rated power) at 25.5 knots (roughly a maximum). So, at minimum speed it could get about 45% of it's power for something close to 20% of the time, for a net of 9%. Now, if we want to increase that we'll need either higher efficiency PV, or more surface area from outriggers or something towed, perhaps using flexible PV. You could add a roof, or you could incentivize 10% of the containers to be roofed with PV - they could power ships, inter-modal rail, inter-modal trucks...

Here' a fun example of a boat that's 100% PV powered, and here's another.

Rail would be relatively easy, as most trains are driven by electric motors. A straightforward solution would be to build PV into the roofs of shipping containers, which could be plugged into ports on both trains and container ships.

¹ $3 gasoline in a car translates to $.30/kWh (there are about 35kWh in a gallon, of which the most efficient generators can extract about 10), which PV can beat handily. $2 diesel or jet fuel translates to $.10/kWh (there are about 40kWh in a gallon, of which the most efficient diesel engines can extract about 20). That would require PV that cost $2 per peak watt, which the best existing PV modules can provide. Balance of System costs (structures, wiring, inverters, installation) would be greatly reduced by building panels into rolling stock as part of the manufacturing process. Inverters wouldn't be needed, as power would feed directly into vehicle electrical systems.

We can expect diesel to rise in price, while PV will continue to fall.

² This may look very far from a practical solution, with it's small single-person manned capacity and it's very wide wingspan, but these guys are trying something very hard: continous powered flight during the night. They're trying to solve a problem that's much harder than commercial daytime aviation from Chicago to New York.

How quickly will we move to electric vehicles?

2010-06-13T20:39:00.006-05:00

As you probably know, I think we should find replacements for oil ASAP. In particular, we should move to electric vehicles. Lately we've seen solid progress towards EVs, in the form of the Nissan Leaf and Chevy Volt. OTOH, GM plans to ramp up the Volt slowly to not get ahead of demand, and other car manufacturers are moving more slowly.

So - why aren't we moving more quickly to EVs?

I think there are a few things going on:

Oil's price has been higher than the price for substitute fuels for most of the last 40 years, but the margin has varied enormously, and it has only been clearly very high just in the last several years;

Industrial/commercial users are more price sensitive than residential/personal users;

Substitution takes a while ("capex lag");

Transportation is harder to replace than stationary uses, due to the secondary cost of energy storage (mostly in the form of batteries);

EVs are competitive with $80 oil, and far cheaper when you include external costs (security, "conventional" pollution, CO2, etc, etc) , but external costs are only internalized for a small minority of consumers, who are willing to recognize and factor in those costs even without subsidies, credits, fuel/carbon taxes, etc. External costs are extremely important: If those things weren't a problem, we wouldn't be worrying about HEV/PHEV/EREV/EVs. Heck, web sites like The Oil Drum etc wouldn't exist;

OPEC knows they face dangers from substitutes, and will keep prices in their current range as long as they possibly can. Effective fuel prices will stay moderate unless there is another price breakout, or governments rustle up the courage to internalize costs; and

A substitute needs to be much better than the status quo (rather than just competitive) to replace it quickly;

So.....the transition to EV/PHEV/EREVs will be kind've slow for a while.

Won't another wave of high gas prices cause a recession, that will prevent people from buying EVs?

EREVs are here now. Suggesting that high gas prices will cause recession, and that no one will notice and do anything about it, seems highly unrealistic to me. You may object that's already happened, and I'd reply that's only partially true. OTOH, the part that is true is why we're seeing a CAFE that's rising sharply; the Volt and Leaf vehicles; and an EV credit of $7,500.

If we were to see another oil price shock, I think we could expect to see the transition from ICE to EV accelerate very considerably.

Keep in mind that one of the major causes of oil-shock induced recessions is consumer uncertainty, as they delay their purchase, and wait to decide whether to buy something with better mileage. Well, I think another oil shock will push people off the fence: they'll start buying EREVs and EVs, and they'll have a much better reason to replace their old vehicles than they've had for a very long time.

Will energy alternatives be too expensive? Feasibility vs Competitiveness:

2010-04-27T13:40:00.010-05:00

Chemical companies like Dupont still use oil as chemical feedstock to make plastics, glues, etc because it is still cheaper than alternatives. Won't alternatives raise prices and therefore lower living standards?

Yes, but not much. There is a basic paradigm that's useful here: "feasibility" vs "competitiveness". In most industries a very small cost difference can make you uncompetitive. That means that slightly higher cost solutions will be avoided, which can give the impression that those solutions are higher cost than they are. On the other hand, if changes in the business environment (or natural environment!) change the costs of alternatives for everyone, suddenly alternatives can become acceptable in that industry.

So, for instance, recycled materials are in general slightly more expensive than virgin materials, plastic included. But, if oil becomes more expensive then recycled materials may suddenly become the standard. If something can be recycled with only 10% loss at each generation, that can reduce the consumption of virgin materials by 90%, with only a very small additional cost for the industry.

Similarly, electric vehicles cost more than internal combustion engines fueled by dirt cheap gasoline. But, they don't cost any more than ICEs when gasoline reaches $3 per gallon, a level we only reached relatively recently.

Another example: Observers of the coal indutry sometimes think that "The cheapest and best coal is gone." But the US has a lot of Illinois Basin coal, and it's both high quality, and from a larger perspective only slightly more expensive to handle due to it's sulfur content. In a competitive environment, it's winner takes all, and only slightly more costly sellers lose out completely.

So, we have to "think outside the box", and consider that we could have whole industries that eliminate oil entirely, at a cost which is surprisingly affordable.

Why didn't we do that a long time ago, then?

Because, change is painful, and we don't do it if we don't have to, as I talked about in my last post.

Will we prevent climate change?

2010-04-22T16:05:00.004-05:00

I see huge amounts of disinformation in the media that discourage recognition of the seriousness of Climate Change. Most people seem to be in denial, and polls show that in the US that action to prevent CC is losing support.

Will we prevent climate change in time?

No, I'm pessimistic that we will. Basically, those who stand to lose because of change (either jobs, careers, or investments) fight change very, very tenaciously. They buy media outlets, they create think-tanks, they buy advertising, they buy politicians, etc, etc. The potential losers fight change with an intensity that is much, much stronger than the energy that comes from people who want change.

I see dramatic change to prevent AGW as pretty unlikely. OTOH, I'm a bit encouraged by this article:

"If you looked merely at the realm of politics, it would be easy to believe that the question, “Is climate change really happening?” is still unresolved....A spring Gallup study found that Americans’ concern over global warming peaked two years ago, and has steadily declined since.

But there’s one area where doubt hasn’t grown — and where, indeed, people are more and more certain that climate change is not only real, but imminent: The world of industry and commerce.

Companies, of course, exist to make money. That’s often what makes them seem so rapacious. But their primal greed also plants them inevitably in the “reality-based community.” If a firm’s bottom line is going to be affected by a changing climate — say, when its supply chains dry up because of drought, or its real estate gets swamped by sea-level rise — then it doesn’t particularly matter whether or not the executives want to believe in climate change. Railing at scientists for massaging tree-ring statistics won’t stop the globe from warming if the globe is actually, you know, warming. The same applies in reverse, as the folks at Beluga Shipping adroitly realized: If there are serious bucks to be made from the changing climate, then the free market is almost certainly going to jump at it.

This makes capitalism a curiously bracing mechanism for cutting through ideological haze and manufactured doubt. Politicians or pundits can distort or cherry-pick climate science any way they want to try and gain temporary influence with the public. But any serious industrialist who’s facing “climate exposure” — as it’s now called by money managers — cannot afford to engage in that sort of self-delusion. Spend a couple of hours wandering through the websites of various industrial associations — aluminum manufacturers, real-estate agents, wineries, agribusinesses, take your pick — and you’ll find straightforward statements about the grim reality of climate change that wouldn’t seem out of place coming from Greenpeace. Last year Wall Street analysts issued 214 reports assessing the potential risks and opportunities that will come out of a warming world. One by McKinsey & Co. argued that climate change will shake up industries with the same force that mobile phones reshaped communications.

More here: http://www.wired.com/wiredscience/2010/04/climate-desk-corporations-risk

Are Electric Vehicles inevitable?

2010-04-10T18:20:00.002-05:00

Yes, says Eric Kriss (and I agree).

"A hundred years from now, historians may view the early evolution of the automobile as something of a happy confluence of unlikely events that could never be sustained; the electric car was completely inevitable, notwithstanding the gas-powered blip of the 20th century.

“You may find it remarkable,” a professor in 2108 might tell her (virtual) classroom, “but in 2008 everyone drove cars powered by petroleum engines so hot they could boil water and so poisonous they could kill you within the hour if left running in your closed garage.” But let's start at the beginning: 127 years ago.

The beginning

The first automobile, introduced at an 1881 exhibition in Paris, was – surprisingly – an electric one. But the internal combustion engine quickly eclipsed the electric motor due to the unique physical qualities of gasoline, refined in Russia for the first time in the 1860s. A German mechanical genius, Karl Benz, conceptualized the gasoline engine in the late 1870s, and just four years after the first electric car's premiere in Paris, the first gaspowered vehicle – a Benz, naturally – was introduced to the public, and the fledgling automotive industry never looked back."

See the rest here: http://fairislepress.com/dl.php?file=InevitableElectrics.pdf

Why do people resist change?

2010-04-07T20:38:00.007-05:00

The coverage of the coal mining accident in West Virginia made me think about the fight to eliminate coal, and the resistance that has stirred up. Sometimes people suggest that resistance to change is just a lack of enlightened leadership and a reluctant-to-change populace, due to ignorance.

So, why do people resist change?

People are afraid of change, and with good reason. When new tech arrives, companies move staff, companies shrink, whole industries shrink and shift. Old careers become obsolete. People lose jobs, or their careers stagnate. Other people gain jobs, and do better, but there are winners and losers.

Change is good overall, but some people know they'll be hurt, and others are afraid.

Just one example: I recently read that coal mining jobs pay 3x as much as anything else available in the area. Despite the risks, and the environmental devastation, you won't convince most West Virginians that shrinking coal mining is a good idea.

Does that mean we shouldn't fight to eliminate coal? No. But it does mean we should be realistic about some people fighting back. We need to be compassionate, see their realistic fears, and find ways to help them, and convert them to...not allies, perhaps, but at least something other than enemies who will fight to the death with any weapon (votes, lies, etc).

Can we really transition from oil fast enough to deal with Peak Oil?

2010-03-16T16:44:00.036-05:00

Sure. We need to be clear: we have two separate problems: climate change, and liquid fuels, not a general problem of peak energy. If wind and natural gas are inadequate, we have more than enough coal to keep the lights (and whatever else we want to power with electricity) on during a transition (for better or worse). See Are we running out of coal? and Are we running out of coal? - part 2

You might ask:

During a transition to what?

Wind would be the biggest, with (in rough descending order) nuclear, solar, hydro and others.

how long it would take?

However long we choose - we could do it in 20 years if we want, or we could do it in 50. 50 years would be no more expensive than BAU, but terrible for AGW mitigation.

What would be the cost of both producing those renewables

For wind: about $7/average watt capex, giving about $.07/KWH wholesale cost, or about $.12/KWH retail. That's a little more expensive than old, dirty coal plants, but it's competitive with any form of new generation (including new coal, even without sequestration). We can see in Germany and Japan that $.12/KWH is more than cheap enough to support a strong economy.

What would be the cost of converting everything that now uses oil to use those renewables?

Very little, if we did it through attrition. An EREV like the Chevy Volt will cost about the same as the average new US vehicle, with large volume production, and reduce liquid fuel consumption by 90% (that's the range that biofuels can scale to - ethanol production is about 10% of gasoline volume right now).

Don't you have to add in the cost of all those batteries and inverters?

Like the Prego commercial, "that's in there". In other words, wind power costs include inverters and transmission, and EREV costs include batteries.

The wind doesn't blow all the time

Actually, it does, somewhere. It just takes some geographic diversity to take advantage of that fact, and a moderate amount of long-distance transmission.

the sun shines only in the daytime.

Isn't it convenient that's when we use the most?

The transition target has to be vastly scalable

Which wind is.

but cost less than existing energy sources, else the effort to switch alone will cause significant disruption.

Not if the transition is long enough. We could transition over 30 years, and that's more than enough time to amortize the capex of existing generation. Personal vehicles, of course, last a much shorter time: we can replace about 10% of VMT per year with no pain at all.

How could we replace about 10% of VMT per year - wouldn't that require new car sales of 25M per year (50% more than the all time record)?

The thing you have to keep in mind is that some vehicles travel many more miles than other: Commercial vehicles like taxis drive much more, and newer personal vehicles drive more. Vehicles less than 1 year old account for roughly 10% of US Vehicle Miles travelled.

An aggressive transition to electric would accelerate that tendency, both in terms of sales and in terms of preferential usage of new vehicles. After all, what difference is there between current new vehicles and those from 50 years ago, when automatic transmissions were introduced? Sure, electronic stability control and ABS are nice, but 95% of new vehicle sales come from a desire for the latest fashion - that's part of why people can so easily defer purchases during times of uncertainly, like the last 2 years.

Any transition to more expensive energy, which is the only reasonable expectation, will cause significantly greater pain.

A little, but we see in Japan and Germany that electricity twice as expensive as that in the US can easily support a strong economy.

Can renewables really make up the difference?

There's at least 5x as much easily usable wind resource as we need, and 1,000x as much solar.

But a great acceleration would be necessary.

That's the thing - it wouldn't. First, wind is already "here" - it provided 42% of new generation in the US last year. 2nd, we have enough coal to cover any transition (unless, of course, we want to do something about climate change, as we should - but that's a different problem).

can we afford wind?

An investment of about $2.6k in wind power per vehicle could provide all the "fuel" needed for personal transportation (13k miles per year/4miles per KWH/8760 hours per year x $7 per watt = $2,597). For 100k miles, that's about $.03/mile, much less than gas or diesel. It will be easy and cheap to power EREV/EVs (either bicycles or Volts). As this article stresses, that's the big kahuna.

That assumes $2 per nameplate watt, at 30% capacity factor. The US has more than enough of that, at that price, to supply 200% of our current electricity consumption. Heck, either N. Dakota or Texas alone could provide 30-50%.

What role do you see conservation, efficiency and simple doing without playing in your future scenario?

Really, we haven't converted to a renewable electricity economy already because it would hurt the careers and investments of too many people. When we get to the "tipping point" where the overall society demands solutions to AGW and PO, we'll move very quickly to EREV/EVs and wind power - there will be some temporary personal conservation on the way, but that won't be the primary thing.

Heck, why do without when you can just buy an EREV/EV?

if we put all our energy into producing enough solar and wind energy to power a world of Prius cars and don't have enough resources to upgrade the grid or supply charging stations we have wasted our remaining fossil fuel resources.

So manufacturing wind/solar might use so much resources that we wouldn't have enough to upgrade the grid or supply charging stations? The answer: we have more than enough energy to do both. First, manufacturing (of solar panels, wind turbines, grid equipment or charging stations) mainly uses electricity, and we have plenty of that from coal (see how useful it is to deal with things one at a time?), if needed. 2nd, wind has a very high E-ROI, meaning that it will pay for itself. 3rd, HEVs don't need grid upgrades or charging, and the grid is just fine as it is for a pretty large buildup of EREV/EVs.

Isn't the statistic that matters how much of our current FF fired electrical generation has been replaced by wind or any other source?

No, it really doesn't. Nobody's retiring generation at the moment, unless it's seriously functionally obsolete. People often get confused by that point, but it's a red herring.

There is a difference between having enough power, and decarbonizing our power. We should decarbonize our power, but that's very different from the premise that we're running out of energy.

We are at least as dependent upon FF for for energy today as we were 5 years ago. And possibley more so. Isn't that the big issue?

That's the issue for decarbonizing. But it's not the issue for our economy running out of power We have plenty of coal - enough to bake the planet. Will we do so? I'm afraid we probably will...but we won't run out of electricity.

But isn't our economy going to grind to a halt because of oil scarcity?

No. The food-and-goods freight transport network of the modern world uses about 25% of oil consumption in the US. Light vehicles overall account for 45% of oil consumption: their utilization could be doubled with carpooling in a matter of months, freeing up whatever fuel was needed by the freight network.

What about historical examples of societies that didn't recover well from economic transitions, like the US South after the Civil War?

I don't think the South is a very useful model for most of the world. It might be a good model for oil exporters.

First, it needs to be said that the South had just lost the first modern war of total destruction. 30% of all white males aged 18-40 were killed (http://en.wikipedia.org/wiki/American_Civil_War) - there are usually more injuries than deaths. Very likely only 20% of the white adult males were left healthy at the end of the war. Both ex-masters and ex-slaves were left without financial, industrial or technological capital with which to rebuild. Transportation, industry and even agriculture were laid waste - think of Sherman's march to the sea: everything was systematically destroyed.

The impact on human capital may have been the worst: slavery left a cultural heritage of passivity and violent authoritarianism (classism, racism, sexism, domestic violence, etc, etc) for both ex-masters and ex-slaves that cannot be underestimated (as discussed above regarding West Point traditions). To work (expecially with your hands) was dishonorable for ex-masters, and to think and take responsibility for oneself was terrifying for people who had been publically tortured and killed for centuries, and who now faced a similar lynching campaign. The lack of more practical human capital can't be underestimated: ex-slaves didn't know how to read and write, how to run their lives (handling money, land titles, etc), how to raise their children or relate to spouses, etc, etc.

2nd, the South was a commodity exporter, like Russia and Saudi Arabia today. It was devastated by the "resource curse". "During the time of the Civil War, there was a dramatic slowdown in British cotton demand. As the textile industry matured, its rapid replacement of traditional methods naturally slowed. While the industry was still growing, its rate of growth slowed to match the relatively natural growth of population and incomes. The drop in demand growth, coupled with the tremendous cotton supply coming from the Southeastern states, led to falling prices. As poor conditions persisted for South Carolina’s cotton producers, no viable alternative crop could be found. The now relatively stagnant cotton economy remained until the end of the 19th century, as industrialization reached the state."
http://www.strom.clemson.edu/teams/ced/lgp-reports/Economy.PDF

All in all, the South had a uniquely frozen culture, due to the violence, abuse and misinformation required to maintain a slave society, and the "resource curse" created by it's dependence on a single export commodity (cotton) in a single industry (agriculture). Despite the availability of capital from the North, the South was in a uniquely unfavorable position for adaptation to a new world. It may be a model for oil exporters like Russia and KSA, but not for dynamic, educated countries in the OECD.

Wouldn't affluent people used to a consumerist lifestyle have comparable problems to face new realities?

OECD economies show a much greater ability to change. Look at Japan post 1870. Look at Germany and Japan post-WWII. Look at the US post-WWII. Look at the world car industry, which is gearing up to produce EVs, something which they found anathema only 5-15 years ago.

----------

Didn't it take a couple of generation for horse transportation to be replaced by street cars and ICE vehicles?

Yes, and difficulty of the transition contributed at least a bit to the Depression. The difference: hybrids, EREVs and EVs are being built by the same companies that built ICE vehicles, operate the same way, cost the same over their life-cycle, and need very little new infrastructure (90% of US vehicle owners have access to off-street parking, and more than 50% have private garages). The difficulty of the transition is orders of magnitude smaller.

--
Doesn't an energy transition require heavy investment which is not easily forthcoming under crisis conditions?

On the one hand, that's assuming the premise that Peak Oil will cause economic crisis. On the other, it's precisely under crisis conditions when investment is easiest - look at WWII: the US Depression ended because the war provided a good excuse for massive governmental spending and investment.

---------------------

The most important element of a transition from oil is the electrification of transportation. Surprisingly, the first part of the EV revolution has been here for years, in the form of the Prius. The Prius cuts fuel consumption by 50% (50MPG vs the US fleet average of 22MPG), in the US hybrids are 3% of new sales, and there are more than 1,000,000 on the road.

And now, the Leaf and the Volt are coming out, and it is really clear that we have all the technology we need, we just need to use it.

What is the real cost of electricity?

2010-02-04T11:33:00.007-06:00

Recently Robert Rapier compared the pricing of various forms of energy.

He noted "I have included the cost of electricity, although it is important to note that the efficiency of electric motors is higher than for internal combustion engines."

Why did he think that was important, and what does that mean for the real cost of electricity?

Robert was talking about the dramatically greater efficiency of electric motors when they power a vehicle, when compared to internal combustion engines. Let's start with the best engineered electric vehicle on the road, the Chevy Volt¹.

On the one hand, the 1st-generation Volt gets at least 40 all-electric miles on both the EPA city and highway cycles, and does it using an effective battery capacity of 8 KWHs (50% of the nominal 16 KWHs). That gives us .2 KWH/mile, battery to wheel. On the other hand, GM's engineers tell us that doesn't include the charge-discharge losses, which are usually 7-10% for li-ion, or AC-DC conversion losses: the wall-to-wheels power is .25 KWH/mile.

Efficiency is likely to improve with later generations - especially aerodynamics (the most important factor with an electric drivetrain, where regenerative braking greatly reduces acceleration/braking losses, and thus greatly reduces the importance of weight), but also peripheral loads. The importance of aerodynamics can be seen with the ultra-streamlined Aptera, which is expected to use only .07 KWH per mile. On the other hand, efficiency improvements could easily go to larger vehicle size (though not to acceleration: one of the nice things about electric motors is that they get more efficient as they get larger, unlike infernal combustion engines).

Electricity costs $.10 per kilowatt-hour, at retail and on average, without taxes. Now, one advantage of electric vehicles is their ability to charge at night at lower rates, on average less than $.06/KWH. A rough average of $.08/KWH gives us 2 cents per mile to run an EV.

Gasoline costs about $1.75 currently, without taxes. A very efficient compact conventional car might get 35 MPG, which gives us 5 cents per mile. So, in Robert's framework, electricity costs only 40% as much as gasoline, when actually used to drive a vehicle.

Of course, real-world drivers pay taxes, and on average the conventional vehicles they drive aren't very efficient. Add 10% taxes for electricity, use $2.75 for pump prices, and 21 MPG vehicle for comparison, and we get 2.2 cents per mile for an EV, and 13 cents/mile for a gas-powered car: electricity costs less than 20% as much per mile!

We shouldn't forget that using electricity directly for home heating is also a waste of power: a heat pump (either air or ground based) will take advantage of the much higher quality of electricity BTU's, and slash the cost of power for home heating by 60-70%.

¹ Tesla deserves credit for a very good car, and for jump starting a movement to EVs. But, we can compare their ramp-up delays (design delays, manufacturing problems, transmission problems, etc, etc), to GM's flawless execution (a 3 year time-frame, which is very, very short in the car world, with not even a week's slippage in the schedule); their battery has an older chemistry with a much shorter lifespan; and much of their design and supply chain is out-sourced, which leaves them vulnerable to the kind of disruption they recently announced - they're likely to not be able to sell cars for about a year during the transition from their current models to the next!.

I'm back!

2010-02-04T11:25:00.003-06:00

Well, we have a resolution of the guest blogging question. It looks like Forbes is going to link to selected posts, rather than use my posts directly.

I like to stay behind the scenes, and Forbes preferred that I present more information about myself. I understand that - it's traditional for mainstream columnists to be publicly available to their readers. So - we'll work this way instead, which will work just fine.

Are posts on hold?

2009-12-31T01:20:00.003-06:00

Yes, for the moment.

This blog is being considered for inclusion in a major magazine, and while I'm waiting to hear from them I'm filing new ideas to ensure that I have material if and when that starts.

Hang in there...

Is climate change real? Part 2

2009-12-04T12:02:00.002-06:00

Insurance companies seem to think so.

"The insurance industry, including reinsurers, who distribute risk around the sector, has traditionally been the main way to hedge against hurricanes, floods and other natural disasters.

But climate change could increase the scale and frequency of these disasters so drastically in coming years that traditional insurance might become unable to handle the burden.

Much of the risk would have to be shifted into the capital markets, where financial instruments such as catastrophe bonds and hurricane futures may boom, and increasingly exotic instruments are being developed to spread the burden further.

"In a more volatile risk landscape, as might be produced by climate change, the need for risk transfer instruments quickly increases," said John Seo, managing principal at Fermat Capital Management."

source

Has photovoltatic solar reached grid parity?

2009-11-19T10:57:00.005-06:00

It looks like it has.

Daytime grid power sells for more than $.20 per KWH in Southern California. PV has to sell for less than $4 per peak watt to beat that price.

Well, First Solar has been selling it's panels for less than $2.50 per Wp - with Balance of System costs (wiring, inverter, structural supports, installation) that allows installation near the magic $4/Wp.

Now we hear that panel pricing has fallen by more than 50% in the last year:

"China Sunergy’s average selling price of $1.32 per watt was down from $3.48 a year earlier and $1.44 in the second quarter. Wafer costs declined to 87 cents per watt from 96 cents the previous quarter. "

That should allow full installations below the $4/Wp parity point, at least on the large industrial/commercial roofs for which PV works best.

Here's the source.

Have EVs and plug-in hybrids reached the tipping point?

2009-11-11T18:18:00.007-06:00

I'd say so.

Look at the Volt, around which GM is centering it's future. Look at the dozens of vehicles coming in the next 3 years, like the Nissan Leaf http://energyfaq.blogspot.com/2009/08/how-good-is-new-ev-leaf.html . Look at the explosion of development around them:

"...here is where the dots connect and the news turns good. For the technical challenge of greening electric cars means entering a commercial landscape that mirrors the transformative industries of the 1980s and '90s: computers and software, switching and networking, consumer electronics converging with cellular technology. This landscape is full of start-ups and medium-size supplier businesses that play to American strengths: entrepreneurship, originality, comfort with the virtual. We ought to stop thinking about the auto industry as a handful of great manufacturing companies superintending large, dependent suppliers -- or, for that matter, cars as standalone objects. Rather, the electric car will be a kind of ultimate mobile device, produced in expanding networks for expanding networks; a piece of hardware manufactured by a burgeoning supplier grid and nested in an information grid interlacing the electrical grid. Building out these three networks will be more profitable, and a greater engine of economic growth, than building the cars themselves."

See: http://www.inc.com/magazine/20091101/the-connected-car.html

Is energy innovation slowing down?

2009-10-27T17:47:00.004-05:00

I'd say no, judging from some new grants awarded by the Dept of Energy.

The DOE created a new section which is intended to do for energy what the DOD's DARPA did for many things, including the internet. These awards were the best of a much, much larger number of submissions. This is the first round of projects funded under ARPA-E, which is receiving $400 million under the American Recovery and Reinvestment Act.

If even a few are successful, the effect would be dramatic.

Take a look: http://www.energy.gov/news2009/documents2009/ARPA-E_Project_Selections.pdf

Which is better for energy - regulation or free markets?

2009-10-26T18:00:00.007-05:00

I'd prefer free markets. For instance, if you want to reduce carbon emissions quickly and simply, use a simple carbon tax. Or, if you like things that are slower and more complex (and therefore easier to sell politically), go to cap and trade.

Why do I prefer free markets? Because they're easier. If you're going to run things by central planning instead of by free markets, then the central managers have to manage them. Command economies require a lot of good management in a small circle of bureaucrats. That requires a lot of local talent, and a lot of good luck. They have to stay on top of things, and adjust as they go, or things will fall apart.

Two examples.

First, the automobile Corporate Average Fuel Efficiency regulation. It originally contained a light truck loophole, which made sense because light trucks were working vehicles. Gradually, car makers moved to SUV's, because the lower MPG level allowed greater engine power. Detroit stymied an update to the regulations, as Detroit needed SUV's to compete with Asian manufacturers. That meant the growth of absurdly over-powered military vehicles, wasting gasoline and making the roads less safe overall (the occupants of SUVs are safer, but only because greater size means that when they hit a smaller vehicle, that smaller vehicle absorbs most of the kinetic energy, and therefore is much less safe).

Second, China mandated that utilities build wind power, but not that they use it, so they don't spend the extra money for transmission!

Also, China mandated "Buy Chinese", and the domestic manufacturers can't build turbines that can keep running!

Source http://www.forbes.com/2009/07/20/china-wind-power-business-energy-china.html

Just goes to show - you've got to keep on top of regulations...

Volt battery costs, part 6

2009-10-25T14:12:00.002-05:00

How likely are large reductions in lithium-ion battery costs?

Highly likely, according to their manufacturers.

"During a panel discussion at a plug-in vehicle conference in Detroit, several speakers said dramatic cost cuts are possible once the advanced batteries reach high-volume production...

Johnson Controls-Saft Advanced Battery Systems aims to reduce the cost of a lithium-ion battery pack by 50 per cent, said Michael Andrew, the venture's director of government affairs and external communications for hybrid electric battery systems....

Ric Fulop, vice-president of business development for A123 Systems Inc, said he believes the cost of battery packs could come down 9 per cent per year as the industry matures....

Ramanathan...said initial costs may be too high because car manufacturers are over-engineering cars and battery packs to ensure there are no mechanical glitches that could sour consumers on the technology."

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10605008&pnum=0

Will Chinese fossil fuel consumption grow? Part 3

2009-10-24T17:02:00.010-05:00

As I've noted before - many are concerned that growing fossil fuel consumption in China will necessarily dramatically increase world CO2 emissions, while competing for oil with western importers, and setting the stage for economic volatility when it's coal runs out.

So, what's China doing?

"China has also begun to see energy efficiency and renewable energy as ingredients for the type of modern economy it wants to build, in part because it would make the nation's energy sources more secure.

"We think this is a new business for us, not a burden," said Gan Zhongxue, who left a job as a top U.S. scientist for the giant ABB Group to head up research and development at ENN, the Langfang company that made its fortune as the dominant natural gas distributor in 80 Chinese cities. "
---------------
"China has taken significant steps in the past five years. It removed subsidies for motor fuel, which now costs more than it does in the United States; its fuel-efficiency standard for new urban vehicles is 36.7 miles per gallon, a level the United States will not reach for seven years. It has set high efficiency standards for new coal plants; the United States has none. It has set new energy-efficiency standards for buildings. It has targeted its 1,000 top emitters of greenhouse gases to boost energy efficiency by 20 percent. And it has shut down many older, inefficient industrial boilers and power plants. "

source

Will Chinese oil demand grow? Part 2

2009-10-23T11:48:00.004-05:00

The concern is often heard that growing oil consumption in China will necessarily cause demand for oil to skyrocket, regardless of supply or pricing, such that other countries will be forced to settle for a smaller share of the oil production pie. So, what does the Chinese history of oil consumption tell us?

Average oil consumption in China in 2007 was 7.29 million b/d. In 2008, when oil prices peaked, Chinese consumption fell to 6.92 b/d. When prices fell again in 2009, consumption rose to 7.84 b/d. Source: http://www.peakoil.nl/wp-content/uploads/2009/10/2009_October_Oilwatch_Monthly.pdf

So, we see that Chinese oil demand does indeed respond to supply and demand.

Will Chinese oil demand grow?

2009-10-20T12:46:00.007-05:00

The concern is often heard that growing vehicle sales in China will necessarily cause demand for oil to skyrocket. So, will Chinese oil demand grow?

No, not necessarily. According to the well -respected Industrial Engineering consulting firm McKinsey & Co.:

"China is quietly laying the foundation to become a global contender in the development of hybrid and electric vehicles....The Chinese government has been actively promoting the development of the electric vehicle industry..."

They estimate that EV market penetration will be roughly 3-4 as great in China, compared to the world market.*

http://www.mckinsey.com/clientservice/ccsi/pdf/the_electric_vehicle_opportunity.pdf

*Their estimate of EV market penetration in 2030 are very conservative: 5-10% for the world, and 20-30% for China. They do not attempt to evaluate whether Chinese oil consumption can grow to the level found in simple growth projections, which they indicate is 17M bbl/day in 2030. I think we can expect EV market penetration to be much larger, based on growing shortfalls in oil production.

Will oil prices stay high?

2009-10-14T16:12:00.008-05:00

No, not in the long-term, due to lower price of substitutes for oil. As I have discussed on this blog, the fundamentals here are quite clear.

Substitutes are roughly in the same cost range as oil currently: PHEVs like the Volt¹ become economic at about $3.35/gallon gasoline ($90 oil?). In the longer-term (the time it takes to ramp up PHEVs) this also puts a cap on prices.

In roughly 5 years economies of scale will reduce the cost of PHEVs to the range of $80 oil, and we'll see a race between oil depletion and EV growth.

http://energyfaq.blogspot.com/2009/07/volt-battery-costs-part-3.html

¹Pure EVs are cheaper, but much less convenient.

Are battery prices really this predictable?

The price-performance improvement of batteries has been very consistent for quite some time, and it's accelerating. Those improvements are based in new tech (lower cost materials in newer chemistries), larger formats (which eliminate the overhead of packaging and controls per cell), improved manufacturing, and economies of scale.

I've been using such batteries on laptops for a long time - they're not very long-lived.

You're using out-dated battery chemistry, with inadequate temperature and charge-discharge management. Look into the newer li-ion chemistries being used by A123systems and LG (and many others).

If I'm so confident on price of substitutes for oil, why don't I get rich in the futures market?

I am quite confident about the price of substitutes - I called the oil price peak last year (as you can also see in earlier entries here) as did Richard Rainwater looking at much the same data.

I'm not so confident about the time before another price peak ends - the next peak is likely to be longer and lower. Things depend as much on the willingness of oil exporters to recycle petrodollars, and the willingness of oil importers like China and India to subsidize their price controls, as they do on the speed with which substitutes replace oil.

If exporters get as smart as China and Japan, they'll finance exports just as long as exports exist: that could support much higher prices for quite a while, if the US was stupid enough to continue borrowing to support it's addiction to oil. OTOH, if China, India and other importers with price controls wise up and eliminate price controls & subsidies (or, even better, replace them with taxes and import controls), the price could drop sharply.

EV/PHEV substitution will happen incrementally. Lifestyle substitution, especially carpooling, could happen quickly with the proper "victory-garden" promotion (although it's hard to see that kind of realism in US politics at the moment).

What if world oil production declines more than a few percent per year? Wouldn't balancing supply and demand be very difficult without a worldwide economic depression?

Not because of a lack of BTU's. See http://energyfaq.blogspot.com/2008/09/can-everything-be-electrified.html . OTOH, the trade imbalances it would create would indeed be very difficult to manage. I haven't seen a good model for what might happen - I would guess we'd see economic stagnation for a good 10 years. Eventually I would hope to see an aggressive response in the US, which could dramatically reduce oil consumption quickly.

Emergency measures could easily reduce consumption by 25% in 6 months by conservation (just make all highway lanes HOV, strictly enforced), and drilling (in ANWR and off the coasts) and large-scale CTL could both be done in 3 years under truly emergency conditions.

We have more than enough energy to build new electric vehicles. For that matter, we can carpool and telecommute during the transition. We really can. I'm often baffled by the lack of awareness of the potential of carpooling: the US could cut it's oil consumption by 25% in 3 months, if it chose to. It would be inconvenient, and require an emergency to do, but everyone would still get to work.

How important is the energy to manufacture vehicles?

2009-10-14T11:00:00.002-05:00

Not as important as the fuel they use.

This is analyzed here ( http://www.scientificamerican.com/article.cfm?id=green-is-a-mirage ). It's an interesting article.

Here's the relevant quote for EVs:

"An LCA reveals that in terms of global warming effluents, for example, everything in the car's life cycle from manufacture to getting scrapped pales when compared to the emissions while it is driven."

So, it really is the fuel used for driving that matters.

How do we overcome resistance to change?

2009-09-29T17:58:00.007-05:00

There's been a lot of discussion of how to overcome resistance to change, especially to the changes needed to deal with climate change. I think a lot of it's been pretty unrealistic.

We need to stop butting our head pointlessly against those who will be hurt by a transition to renewables (and other new ways of doing things) - that's the path to the paralysis we see now. We need to find ways to buy out/compensate those who will be hurt.

This applies especially to coal consumption: there isn't any country in the world that will let the lights go out, if coal is available (This means that we don't face Peak Energy: we face Peak Oil and Climate Change).

With luck, we'll start building out wind and solar even faster. When it starts hurting revenues for investors in coal, we'll need to find a a way to buy them out to maintain the pace of the transition.

-------------

We need to stop butting our head pointlessly against those who will be hurt by a transition to renewables - that's the path to the paralysis we see now. We need to find ways to buy out/compensate those who will be hurt.

A classic story: Manhattan needed more cab drivers, but faced resistance from the current drivers, who would face more competition. The solution? Giving the licenses to the old drivers, so they could sell them and get the benefit of the new resource. It accomplished the result, and yet the existing drivers were happy.

We need creative ways to enlist the investors, and employees, in existing industries, so that they become enthusiastic partners. Otherwise, they'll fight change forever, in the exhausting trench warfare we see today.
----
The Cash For Clunkers program was a good example.

Criticism of CFC seems a bit "hindsight is 20/20" ish. While it's always good to identify where something could be improved, it seems we should acknowledge that

1) it did what it was intended to do - primarily to stimulate auto sales and the economy, amd secondarily to improve efficiency,

2) it was an improvement over the European programs from which the US got the idea (they had no efficiency provisions), and

3) CFC got intense criticism during the drafting process for the efficiency provisions, as many people thought they would limit the program too much.

Sure, it was expensive: that's the point of stimulus programs, to put money into the economy.

Efficiency regulations are cheap for the government, and great in theory, but the difficulty is that you're creating costs for those who are regulated, so that they'll fight the regulations tooth and nail. We have to acknowledge the costs in delay created by a parsimonious approach. We may need to compensate people for their costs in order to get things moving.

Shouldn't Cash for Clunkers have had much stronger efficiency requirements?

Sure.

The problem here is that the political context in which such legislation is crafted doesn't contain the PO/CC awareness needed to support more aggressive action. CAFE requirements should be much higher; we should have stiff carbon/fuel taxes; we should be doing many other things such as cap and trade in addition to regulatory efficiency improvements such as CAFE and carbon taxes (not to mention building efficiency).

Of course, we have most of the information we need to take action. Much of the reason for delay is resistance in the form of disinformation ("FUD") from those who would lose careers and investments. That's one good feature of "C4C": it overcomes such resistance by paying people to give up their inefficient capital investments (rather than just making them obsolete by regulation).

Finally, we learn by doing and trial & error. There was much speculation that the efficiency requirements were too stiff, and that as a result the program would fail for lack of participation. Instead, there was so much demand that they expanded the program substantially.

Does sustainability mean less complexity?

2009-09-26T14:12:00.005-05:00

A popular theory about the challenges of dealing with resource limitations suggests that resource limits may force us to simplify (Tainter).

Probably not. Here's an example: bricks that use less energy, recycle pollutants, and cost less..but rely on more precise (read complex) manufacturing.

"Bricks have been made pretty much the same way for 3,000 years, until Calstar's scientists came up with their new technique, said Chief Executive Michael Kane.

Ordinary bricks are fired for 24 hours at 2,000 degrees F (1,093 C) as part of a process that can last a week, while Calstar bricks are baked at temperatures below 212 F (100 C) and take only 10 hours from start to finish, Kane said.

The recipe incorporates large amounts of fly ash -- a fluffy, powdery residue of burned coal at electric plants, that can otherwise wind up as a troublesome pollutant.

"Ours is a precise product" that relies on getting the chemistry right, said Amitabha Kumar, Calstar's director of research and development."

http://www.reuters.com/article/wtUSInvestingNews/idUSTRE58K47220090921

Is Climate Change real?

2009-09-16T18:23:00.001-05:00

Sure looks like it. Here's a report that was signed off on by old-fashioned management consulting firm McKinsey:

"The study looked at eight areas, both rich and poor, around the world seen as high risk from more droughts, hurricanes, floods and rising sea levels that climate change may cause.

In the worst-case scenario, global warming could trigger severe flooding in Guyana, costing the South American country over 19 percent of its annual GDP by 2030, the report said.

The hurricane-prone U.S. state of Florida could see weather-related costs knock 10 percent off its GDP each year.

The group that produced the report is made up of the United Nations, insurer Swiss Re, management consultancy McKinsey, the European Commission, the Rockefeller Foundation, Standard Chartered Bank and environmental network ClimateWorks."

source

How expensive is the wind power needed to eliminate Chinese coal??

2009-09-11T17:05:00.006-05:00

Previously, I asked How expensive is the wind power needed to eliminate coal in the US??

Well, China's emissions are just as high.

What would it cost in China?

It turns out: not much, in the grand scheme of things. Only about 7.5 cents per KWH http://www.technologyreview.com/energy/23460/

“Sept. 11 (Bloomberg) -- Barren, windy stretches of the Tibetan plateau and grasslands in northeastern China hold untapped value in a country searching for more energy and cleaner air.

China, the biggest polluter from burning fossil fuels, has enough wind-energy potential to generate seven times its current power consumption, said Michael McElroy, a researcher at Harvard University. To develop that capacity and meet rising demand would cost about $900 billion, he wrote in a study published yesterday in Science.”

This is only $90B per year for 10 years, which really isn't much, expecially given that other power sources wouldn't be much cheaper.

Volt battery costs, part 5

2009-09-11T16:12:00.004-05:00

Are li-ion battery costs really dropping?

Yes. here are some retail costs: http://www.evcomponents.com/SearchResults.asp?Cat=34

We see that current Lithium cells are about $350/kWh for individual purchases. We can expect that an OEM can get them for around 50% of that (no more than $200/kWh), which places GM's wholesale cost for the Volt pack in the neighborhood of $3,200.

The range in the Volt is electronically limited in order to avoid any warranty issues with pack replacement (due to California Air Resources Board requirements). Essentially, GM's only letting the pack discharge to about half, so when capacity drops with age/cycling, as it does with all batteries, they can get more mileage out of it compared to going with a smaller pack and having the range drop below 40 miles within twenty+ thousand miles.

Going by specs for the retail batteries above, 5000 cycles before they hit 70% capacity would be at least .7(40 miles)5000 = ~140,000 miles until the pack capacity degrades to 70%, and probably ~200,000 miles before it degrades to 50% and drivers can't go a full 40 miles on all electric power w/ something like the Volt.

GM had to, in effect, de-rate their battery pack because the California Air Resources Board requirements for PHEVs are very stringent. Pure EVs don't have these requirements, so manufacturers can get away with using the whole pack.

Would we have been better off without oil?

2009-09-08T16:45:00.011-05:00

Probably.

We would have gone to Electric Vehicles. In 1899 EVs outsold everything else (1,575 electric vehicles, 1,681 steam cars and 936 gasoline cars were sold). By 1912 there were thousands of EVs on the road, and electric trucks were also selling well. Here's some interesting history and analysis.

Ferdinand Porsche
designed an extended range EV like the contemporary Chevy Volt in 1904*. Given that an ErEV uses 10% as much liquid fuel as a contemporary US ICE vehicle, it could have run on our limited supplies of ethanol - the Model T was built to run on ethanol. where the Volt is today, roughly

The lack of oil would have slowed down personal transportation only slightly.

Isn't oil irreplaceable?

Electricity successfully replaced oil in the late 1800's for lighting - the Edison bulb was superior in every way to kerosene. If gasoline for automobiles hadn't come along, the oil industry would have been in real trouble.

Now it's time for electricity to do the same for transportation. Electric motors are superior in every way to infernal combustion engines. Now that oil is no longer dirt cheap, and batteries are finally good enough to power hybrids and plug-ins, the transition is under way.

“I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that.” —Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931

That's a great quote, isn't it?

I read a conspiracy theory once, that claimed that Edison was developing an improved battery and planning an EV in cooperation with Henry Ford, but that all of his labs were attacked by arson to prevent it. I have no idea if this theory is credible**.

In the long run, of course, Edison was right. In the meantime, we have a solar derivative in the form of wind as our cheapest source of renewable power.

*Many ErEVs have been designed, including production models in 1916, and concept models later in the 1960's, 70's and 80's. The EV-1 engineers built a rough version, in order to simplify vehicle testing. The Renault Elect’Road was the first ErEV sold, in 2003. It was discontinued after 500 were sold. It uses a manually controlled 21hp genset to extend the range of its 13kwh nimh battery pack. Electric only range is 50 miles, 60mph max speed, and the 10 liter gas tank allowed perhaps another 100 mile range. See here.

**Here's a quote from an enthusiastic reviewer of a book that discusses it:

"His new book, an exposé of the confluence of corrupt forces that killed the growth of nonfossil transportation fuels, the trolley system and what is now called "alternative energy," is presented in the context of history stretching over a millennium, back when wood was man's primary fuel and horses were the main form of conveyance.

"Quite the gripping Gilded Age saga. Black documents the machinations of the coal industry as well - back to the 13th century or thereabouts, the Royal Foresters and proscriptions against the commonry taking so much as a twig out of the woods; this evolving into use of coal far before the Newcome engine. Exactly how much of this is suitable stuff for Art Bell I'm not sure and don't care; the material on the decades of half-measure attempts to market crude EVs is where the story really hits its stride. " (source of quote)
http://www.internalcombustionbook.com/

Could race cars go electric?

2009-08-28T14:43:00.017-05:00

From Wikipedia:

http://en.wikipedia.org/wiki/Criticism_of_NASCAR

"According to NASCAR, about 6,000 U.S. gallons (~22,700 litres) of fuel are consumed during a typical Sprint Cup weekend.[9] For the 2006 season, which includes 36 points races, the total for the season would be 216,000 U.S. gallons (818,000 litres). One environmental critic recently estimated NASCAR's total fuel consumption across all series at 2 million U.S. gallons (7.57 million liters) of gas for one season;[10] however, the methodology used has been a point of dispute."

Electric motors have better torque, so how long before they go electric?

Pretty soon!

Here's a nice description of that electric torque, vs a Porsche:

"Zero-to-60 mph acceleration is less than 4 seconds, which is Ferrari quick. Around a tight, technical racetrack, the Tesla will beat the pants off your garden-variety supercar." LA Times

The Chevy Corvette, with a monster 6.2 liter, eight cylinder, 430 horsepower engine takes 4.6 seconds. The Tesla accelerates faster than the Porsche 911. Faster than the Ferrari Spider....I can say with certainty, now, that if anyone doubts whether all-electric cars can compete: they can. Scientific American

"The all-electric sports car is faster than Porsche 911 or Audi R8 yet is six times as efficient as conventional sports cars." Tesla achieved overall corporate profitability in July, thanks to strong demand for the Roadster. http://green.autoblog.com/2009/10/27/tesla-roadster-runs-313-miles-on-a-charge-in-global-green-challe/

Here's a 0-60 in 3.5 seconds electric Ford Pinto dragster! allcarselectric.com
and opb.org

Here's a discussion of low-CO2 Formula One: http://www.independent.co.uk/sport/motor-racing/formula-zero-carbon-motor-racing-without-the-emissions-1775819.html

Here's a good discussion of EV racing.

**Edit

See http://www.nedra.com/

How quickly can Plug-in hybrids grow?

2009-08-27T17:53:00.003-05:00

I was struck by a recent EPRI Projection of 100M PHEVs by 2030. EPRI is the technical arm of the electrical utility industry - clearly they take PHEVs seriously.

Some people wonder if GM is serious about the Volt, and whether it can increase production quickly. Here's a hint: GM is building a dedicated battery assembly plant, with a capacity of about 100,000 battery packs per year, to be finished in time for the planned unveiling in November of 2010.

But won't most people wait until a recession, or some crisis, before they do something like buying an electric vehicle?

I think that the most important way to prepare for Peak Oil is electric transportation. This includes hybrids and plug-in hybrids (including Extended Range EVs like the Chevy Volt and Plug-in Hybrid EVs like a plug-in Prius) of various sorts.

It looks to me like the US and China are doing moderately well in ramping up hybrids and EREVs and PHEVs: the Chevy Volt will be ready for large production volumes in 2011, and a wide range of PHEVs and EVs is coming in the next several years, from almost all of the major car makers. Also, I think enough early-adopters are out there to allow these vehicles to ramp up to pretty large production volumes, putting them only a few years away from being the primary mode. So, I think that when mainstream buyers are ready, the electric vehicles will pretty much be there.

What about an emergency?

Production can be increased very quickly in an emergency. The Classic Example is World War II airplane production, which grew in 4.5 years from 6,000 per year to 9,000 per month! http://www.globalsecurity.org/military/systems/aircraft/world-war-2.htm

How's wind doing?

2009-08-14T16:40:00.005-05:00

Very well.

Wind was 42% of new capacity in 2008, and there's an enormous backlog of projects in the pipeline (about 300GW!). See here.

An interesting note - local grids are handling up to about 16% in wind market penetration without problems. The DOE report says: "Recent wind integration studies continue to show that wind integration costs rise with higher levels of wind penetration, but are below $10/MWh – and often below $5/MWh – for wind capacity penetrations of as much as 30% of the peak load of the system in which the wind power is delivered."

I understand that to mean the following: for a system with 100GW average load, and 150GW peak load (as a wild guess), wind capacity could rise to 45GW and still have low integration costs (well below one cent per KWH). The report indicated that capacity factors were around 35% for recent projects, so that gives us 15.75GW average, or 15.75% market penetration of KWH production.

This study doesn't say we can't get well above 16%. It just says that with current grid engineering, we can achieve at least 16% without a problem.

And that's pretty good. It's consistent with a lot of such studies: none of them found a maximum for renewables. I've seen some that showed that something in the range of 20% was possible just for wind, but weren't testing the hypothesis that more than that could be done. IOW, most of them said it was the minimum that could be done, based on current grid technology. They didn't test such things as expanded long-distance transmission, greatly expanded Demand Side Management, a large fleet of PHEV/EVs providing demand buffering and V2G; greatly expanded storage; etc.

Here's a good example: This modelling study* says that given current tech and some modest assumptions on price change, that 20% wind penetration is likely in 2050. It doesn't say that it's a maximum, and it doesn't take into account the effect of an aggressive policy push toward wind, and new conditions, such as 230M PHEV/EVs.

There's enormous potential out there.

*The study just gives a result of 300GW of wind power, so we have to do some calculations.

The DOE reports that new farms in the last several years are achieving an average of 35% capacity factor. The modelling study doesn't give the total generation in 2050, so we have to guess that it assumes something like DOE projections of 1200 GW system capacity. That gives us 11.6% growth (1200/1075 currently).

If we use 35% and 11.6% growth that gives 20.1%.

Can a plug-in hybrid compete on price?

2009-08-13T12:15:00.008-05:00

Sure.

But aren't vehicles like the Volt expected to sell for $40,000 due to a very expensive battery?

Well, first, we should be clear that most of that $40K is not due to the battery.

First, a simple EV, without a battery, should sell for less than a comparable Internal Combustion Engine (ICE) vehicle. Electric motors don't cost any more than ICEs, and EV powertrains are simpler than ICE powertrains (no transmission, muffler, catalytic converter, fuel pump, air filter, oil filter, etc, etc). There are basic sedans out there priced for $15K, so a basic EV should be less than $15K.

Second, GM says the ICE backup on the Volt costs about $2k, and their battery supplier says the battery cells cost right now about $5,600 ($350 per KWH x 16 KWH). There is another $2,400 for the power electronics and battery management system - that's a cost that will mostly go away with very large volume production - so let's allocate 500 for that. 25% markup of those additional pieces ($8,100 x %25) would add about $10,250.

So, the basic pricing should be around $25,000. The rest of the Volt 1st-gen pricing is due to R&D, low-volumes and upper-market options.

You've said battery prices will drop. How do we know?

Here's a good discussion for this (and a lot of other Volt battery information):

"From a historical perspective over the past 17-18 years the cost has come down by a factor of 15x. In the next 5-10 years we should be able to come down by an incremental 2-4x and we will have to do that to accelerate the penetration of the technology."

From http://www.greencarcongress.com/2009/02/profile-li-ion.html

How good is the new EV, the Leaf?

2009-08-10T17:21:00.005-05:00

Pretty good.

Some sources say that the Nissan Leaf ( http://www.nissanusa.com/leaf-electric-car/#/car/index ) will cost around $25K-$33K without the battery (you lease the battery, which is supposed to be cheaper than gas). Others that it will be priced in the same range as the Altima. With the battery, it's likely to be about $10K more.

The Leaf has a battery capacity of 24KWH. This is 8KWH larger than the Volt's 16 KWH, and the Volt adds an internal combustion engine. The extra 8KWH of battery capacity likely costs about $4k, while the ICE costs about $2k. So, the Volt should be cheaper.

The Volt's pricing hasn't been announced, but it's executives have talked about something close to $40k. It sure looks like they're going to price it just as high as they can (taking into account the $7,500 tax credit) to capture the early-adopter premium. If the Leaf is very competitive, you can be sure the Volt price will drop.

We're seeing a continuum of capital cost, electrification and operating costs: hybrids like the Prius are cheapest and least electrified; PHEVs like the Volt (40 mile electric range, with gas engine backup) are in the middle; and EV's like the Leaf (70-100 mile range)are most expensive. Which you choose depends largely on your economic situation and in the short-term, how much you're willing to pay to reduce your oil consumption (IOW, your personal pricing of oil's externalities).

When PHEVs and EVs hit very large production volumes, their overall cost will be lower than conventional cars, but not before.

Volt battery costs, part 4

2009-08-07T17:56:00.003-05:00

A recent study from the University of Michigan suggested that it will take a very long time for PHEVs to gain a significant share of the car market.

"Annual sales of plug-in hybrid electric vehicles (PHEVs) in the US could reach 2% – 3% with fleet penetration of around 1% by 2015, according to a new study by researchers at the University of Michigan Transportation Research Institute (UMTRI). By 2020, sales could reach around 4% – 5% with fleet penetration a little more than 2%. And in 30 years, they could be around 20% of sales with a fleet penetration of about 16%. " And...these are the high-end estimates!

So, is this correct?

Fortunately, no. The study makes several very, very odd assumptions. First, it assumes that current gasoline prices are $2 per gallon, and that they will never rise above $4 in the next 30 years.

Second, they assume that a PHEV-40 (a plug-in hybrid with a 40 mile electric range) would cost $50,000 both now, and 30 years from now.

Given these assumptions, a PHEV could never pay for itself with gasoline savings. Fortunately, PHEV-40s are likely to be priced below $30,000 in 5 years (and certainly in less than 10), and will pay for themselves quite nicely.

Is there enough wind resource to provide all of our electricity?

2009-07-30T17:22:00.005-05:00

Yes.

A peer-reviewed study in the Proceedings of the National Academy of Sciences indicates that "a network of land-based 2.5-megawatt (MW) turbines restricted to nonforested, ice-free, nonurban areas operating at as little as 20%of their rated capacity could supply >40 times current worldwide consumption of electricity, >5 times total global use of energy in all forms.

Resources in the contiguous United States, specifically in the central plain states, could accommodate as much as 16 times total current demand for electricity in the United States. "

This study doesn't address changes to the grid that would be needed to supply all of our electricity from wind and solar:

"...Wind power accounted for 42% of all new electrical capacity added to the United States electrical system in 2008 although wind continues to account for a relatively small fraction of
the total electricity-generating capacity [25.4 gigawatts (GW) of a total of 1,075 GW] ...Short et al. , using the National Renewable Energy Laboratory’sWinDs model, concluded that wind could account for as much as 25% of U.S. electricity by 2050 (corresponding to an installed wind capacity of 300 GW). "

But 25% is a good start.

See here the full study in PDF form.

Should we expect climate scientists to cut their carbon footprint?

2009-07-29T12:29:00.009-05:00

I saw an article by someone who talked to climate scientists, and found they were planning to take long plane trips. Trips like that create a lot of CO2 - doesn't that say they aren't serious about climate change?

No. This kind of analysis is misleading.

First, air travel is a relatively small contributor to CO2, and that the marginal cost of CO2 reductions from other sources is very likely much larger. Air travel isn't really the place to start. This is a good example of why public policy is better than random, ill-considered individual action. Better is a society-wide program like carbon taxes and/or cap-and-trade, which unleash the power of markets to find the easiest and cheapest ways to cut CO2 emissions.

Markets are nice and simple, in many ways. Unfortunately, institutional resistance (primarily the car makers, but also the oil & gas industry) has killed any chance of a gas tax, and is working hard (joined by other fossil fuel producers, primarily coal) on killing a cap-and-trade market approach, so all that's left is regulation, such as CAFE and the efforts of CARB.

Second, people don't want to be the only ones doing making sacrifices: they know that their individual contribution is tiny, and their personal sacrifice is very large to themselves. They want uniform rules so that everyone is sacrificing.

Sports give us some good analogies: no player is going to wear protective gear that gives them a disadvantage, but they are likely to be very much in favor of uniform rules that require all players to wear the gear.

But, if you talk the talk, Shouldn't you walk the walk, or be a hypocrite?

Sure. If a climate scientist says that everyone should take the individual initiative to stop flying, and then goes ahead and flies, he's a hypocrite.

But...is that the case? Do scientists actually say that? I suspect not. I think if you look at their public statements on What Should Be Done (if you can find any - many confine themselves to the science), I think you'll find that they recommend changes in public policy, and when they talk about individuals they mention relatively minor personal changes like CFLs and electronic thermostats: things that actually save people money, or are minor sacrifices.

We don't want to lump together everyone who deals with climate change. Is the average climatologist out there being an activist? Mostly not.

Scientists....activists..mostly different. Sure, there's the occasional Hansen, but they're mostly different groups.

Doesn't this suggest that human nature isn't conducive to solving climate change via billions of people deciding to restrain their fossil fuels consumption?

Sure. Individual actions can help a bit, but it's very clear that public policy ("rules of the game") is the big lever.

If a police chief were to advocate for a law against drunk driving, and then were to commit the currently legal act of drunk driving, we wouldn't think much of him.

Sure. I'd have to say that I'd agree that climate scientists probably are being at least a little hypocritical. Part of it is probably external influences, like pressure to go to meetings for professional reasons, and family desire for vacations. And, partly....they're human.

But...does that really say anything about climate science? Of course not. It does say something about the difficulty of dealing with climate change. I'm not all that optimistic, and I would say that we really need to develop cheaper low-CO2 tech, to make dealing with climate change less painful to implement.

Here's a comment from WCW:

hypocrisy is not interesting, and even if it were, this is not hypocrisy. Individual virtue is not a solution to collective-action problems. The way we solve collective-action problems is collectively. The fair question about hypocrisy is something like, have you organized to help stop AGW, have you voted for people who have committed to stopping AGW, and such. Any question about individual behavior is prima facie misdirection, and calls into question the motives of the questioner.

Good points.

How much electricity does the Volt use?

2009-07-26T21:08:00.003-05:00

We don't have all of the information we might like. On the one hand, the 1st-generation Volt gets at least 40 all-electric miles on both the EPA city and highway cycles, and does it using an effective battery capacity of 8 KWHs (50% of the nominal 16 KWHs). That gives us .2 KWH/mile, battery to wheel.

Efficiency is likely to improve with later generations - especially aerodynamics (the most important factor with an electric drivetrain, where regenerative braking greatly reduces acceleration/braking losses), but also peripheral loads. The importance of aerodynamics can be seen with the ultra-streamlined Aptera, which is expected to use only .07 KWH per mile.

On the other hand, that doesn't include the charge-discharge losses, which are usually 7-10% for li-ion, or AC-DC conversion losses, which can range from 1% to 75% (for small, cheap "wall-warts"). And, those efficiency improvements could easily go to larger vehicle size (though not to acceleration: one of the nice things about electric motors is that they get more efficient as they get larger, unlike infernal combustion engines).

You could use .25KWH/mile, if you wanted to be conservative.

But would the Chevy Volt pay for itself?

2009-07-25T13:01:00.006-05:00

I was asked:

I only drive 10,000 miles per year, and I'd guess only half of that would be on the 40 mile electric range. Electricity is expensive, and I don't have a meter that charges less at night. Would that really pay for itself for the average driver like me?

Well, let's look at the numbers:

Annual Vehicle Miles Travelled: US total VMT is about 2.9 trillion. There are about 230M 4 wheel light vehicles, for an average of about 12,500 miles per vehicle per year. Newer vehicles are driven more, so about 13,000 miles is probably about right.

% of electric miles: For one who drives 12K miles per year, the % will be about 80%. This will seem more intuitive when one remembers that 50% of all VMT is commuting; the average commute is well below 40 miles; and even someone who commutes 50 miles will still drive 80% of the time on electric.

So, total electric miles will be about 10,000 per year for the average driver - a large minority will drive even more.

Electricity costs: the energy act of 2005 mandated that utilities make smart meters available to their customers. These programs often aren't well publicized, but they should be there - look carefully at your utility's web site. If you like, tell me your utility, and I'll see if I can find it - this wouldn't be the first time I've surprised someone by finding their utilities time-of-day metering program.

The average price of electricity in the US is about 11 cents/KWH. That gives a cost of 2.3 cents per mile ($.01165/KWH x .2KWH/mile). Any decent smart meter program should cut that in half.

If I get my employer to let me charge during the day, wouldn't that be expensive peak power?

It's likely that most employers won't find it worth their while to meter individual power outlets in the parking garage: they'll consider it a low-cost employee benefit, paying for itself with good PR. It's likely that when the cost becomes high enough to matter that the utility will have in place programs that take advantage of the load-following and frequency regulation services that EV/PHEVs will provide, and therefore charge relatively little for the KWHs to EV/PHEVs.

Will there really be enough early adopters to pay the high price of the first plug-in hybrids?

Yes. There's an enormous pent up demand, and a PHEV like the Volt doesn't have a range limitation like the EV1, and has 0-60 in 8.5 seconds (much faster than the EV1, though even the EV1 made drivers very happy) - there's no compromise at all. Also, don't forget that there's a $7,500 tax credit for buyers of vehicles like the Volt.

The EVs of a hundred years ago didn't have to contend with 21st century safety regs and product liability litigation. Voltage high enough, for example, to electrocute a first responder using the "jaws of life" to pry someone out of a wrecked EV requires some care.

Voltage problems and other safety questions for electric drivetrains were solved in the Prius long ago - that's really not a realistic concern.

Volt Battery costs, part 3

2009-07-21T16:58:00.027-05:00

Well, at last I've found an authoritative source for the cost of the Volt's battery pack.

The CEO from CPI (the company that builds the Volt packs today) says the pack will cost $350/KWH for the cells. We saw in another article costs of $1,000 per KWH for the available 8KWH capacity of the battery pack, which equals $8,000 per pack.

"All four of these items together justify a 2.5x premium for the AT application (or approximately $ 1,000/available kWh) compared to the $350/stated kWh of a CE system, CPI says."

http://www.greencarcongress.com/2009/02/profile-li-ion.html#more

That includes the cost of the pack, with electronic controls.
-----
For a minority of drivers, who would drive 15k electric miles per year, a Volt will pay for itself at $3.35 gas (an $8K battery over 10 years is $800 per year - a Prius uses 300 gallons to drive 15K miles, and a Volt would use 240 fewer gallons). This would include long-distance commuters (say, driving 30 miles each way and charging at work for 230 work days per year, and 10 miles per day on the other 135 days per year) and fleet drivers such as taxis whose vehicle can be used two shifts per day, and yet don't go that far and can be charged during multiple breaks (taxis typically drive 100,000 miles per year, putting 300,000 on a hybrid in just 3 years) - perhaps 10% of drivers?

Now, there are other costs: there's $.01-.02 per mile for electricity ($.01 for the average person charging at night, $.02 for during the day). But, what about the value of time? Saving 30 trips to the gas station at, say, 7.5 minutes each, is 3.75 hours. At $20/hours, that's another $75 per year. Also, maintenance costs will be less: very few oil changes, etc. Together, these roughly pay for the electricity.

The current battery might require $4-$5 gas to capture a large % of the rest of drivers. They will have to wait for the 2nd or 3rd generation of Volt, which will be less expensive, or for more expensive gasoline - whichever arrives first.

What costs are you assuming for this?

I'm assuming $24K for the Prius - I've seen news reports indicating that's the average actual US selling price (Edmunds says the base price is $22K). The same reports indicated that the average price for the US overall was $28K. Edmunds says that one high mileage competitor, the Jetta TDI, has a base price of $23,370 (I note there are a lot of options), with 33 MPG.

Now, on Volt cost analysis. I'm assuming a Prius cost, with an $8K battery added. I think it's clear that the Volt with no battery will be no more expensive to manufacture in large volume than a Prius.

Why do I think that?

Electric drive trains are cheaper than ICE (internal combustion engine) drive trains. Heck, a ten year old can build one from scratch with wire, cardboard and pliers (with really good instructions.....) - I don't think anyone can say that about an ICE. A Volt is an EV with an onboard backup generator and a lot of good programming of the electronic controls. That won't be any more expensive than a Prius, which also has dual drive trains. Heck, the Volt should be cheaper, as the auxiliary ICE support systems can be smaller.

Electric drive trains are oooooold. EV's were sold in large volumes 100 years ago, commercially, until cheap gasoline killed them. GM sold electric trucks in large, commercial volumes from 1912 - 1918. There are something like 30,000 EV conversions on the road in the US (you'd be amazed what hobbyists do). Submarines have had them for what, 80 years? Freight trains have them. The largest container ship in the world has them. There are many tens of millions of small, non-highway legal EVs in use. It's very likely that there are more electric motors in use in the world than ICEs.

EVs are easy to do. Optimizing them, as well as the batteries, to make them as competitive as possible (which is what GM and other companies are obsessing over right now) is good old fashioned engineering - no rocket science*, no tech breakthroughs. PHEVs require a bit more work to optimize the connection between the backup generator and the electric drive train, but that's good old fashioned programming.

Now, the latest batteries do represent tech breakthroughs, but that's done. All that remains is ramping up production volumes and getting prices down. Is there any question that will happen? Not really. I think one can be rationally skeptical of Tesla: it's a small company, and perhaps it will fail. But the major car companies, like GM? Not now, with a very clear US gov public policy in place, and rising gas prices to back that up.

Do we need better batteries?

No. It would be really nice to have something like the Firefly new-tech lead-acid, or the Eestor ultra-capacitor make batteries really cheap, to really make it clear that the ICE era was over.

But, it's not necessary in order for EVs and PHEVs to compete with $5 fuel with the current battery price, and for them to compete with $3 fuel in 4 years without the credit.

*I was amused to note that the CEO from CPI quoted above has a PhD in Aerospace Engineering, so he's literally a rocket scientist.

Is the Volt battery too expensive? (part 2)

2009-07-13T00:19:00.011-05:00

A new Wired article says that electric cars cost too much, because the needed batteries cost $20,000 to $30,000.

The article is correct: Tesla tells us that their 52 KWH battery cost $20,000 wholesale a year ago (for about $400/KWH), so the article's estimate of a $20-$30K price is roughly ok. At that price, batteries are still too expensive for EVs to provide a driving range that is comparable to an ICE vehicle, at a comparable market price.

It's worth noting that this is probably not true if one includes non-market external costs - costs which are real, but not included in the market price), so for those buyers who are willing to pay for non-market costs even though they don't have to, the car pays for itself. That's a relatively small niche market, but it's real. It's also worth noting that the Tesla provides serious sportscar performance at a price that is lower than that of comparable ICE vehicles, so it's actually competitive in that niche.

But, all of the above doesn't matter, because...we don't need pure EVs. PHEVs like the Chevy Volt will eliminate 90% of liquid fuel consumption at a life-cycle cost which is comparable to, or less than, that of an ICE.

Take the Tesla battery and reduce it from 52KWH to 16 KWH, and we get a price of about $6,000. Apply the 8% annual price reduction that Tesla reports seeing in the markets (and which both NIMH and li-ion batteries have been experiencing consistently for the last 10 years) over the period 2008 to 2012 (when the Volt will get to serious volumes) and we get a price of about $4,000. That's about $300/KWH, as predicted here. "I do expect the price will come down to perhaps as low as $200 per kilowatt-hour when mass production begins in 2010 and 2011," she says." They'll use less expensive materials than 1st Gen li-ionbatteries; the larger format is much less expensive (Tesla uses about 7,000 batteries!); and they'll have very, very large production volumes relative to most 1st-gen li-ion. Large production volumes reduce costs very quickly.

The Volt's non-battery components won't cost any more than those of a Prius when manufactured in volume. Toyota is selling it a profit, at about $24K on average. It has an electrical drivetrain, and an ICE drive train. The only real difference in cost between it and a Volt is the battery. If the battery adds $4,000, that's $28K, or the average new ICE vehicle.

Here's what GM's CEO says about the Volt's costs: “My job is to get it out there and get it right the first time but then get it cost-effective so that we can do a huge number,” he said. “If I had to go with my first generation, we couldn’t really pencil a business case. Any new technology is expensive, but if you get to the second or third generation you find that the cost goes way down”.

Now, I think GM is over-pricing the Volt in order to capture the premium that early adopters re willing to pay, as well as the new tax credit. It's worth noting that he Volt was originally planned to sell at about $30K. Then, the federal government passed a $7,500 tax credit aimed at the Volt, and the expected price of the Volt rose to...the high 30's. Similarly, Mitsubishi plans to sell the iMiev for the high 40's in Japan (that's where the $50K price comes from - it's an estimate based on the price in yen, and is before Japanese subsidies - the price in the US is likely to be very different), where tax credits will bring the price back down to...about $30K. I see a pattern.

Didn't GM raise their expected cost long before a $7500 tax credit was passed?

The tax credit was in the planning stages well before that. The credit is clearly customized for the Volt (some people in Washington call it the "Volt-credit", or something like that) - GM was certainly involved in the planning.

Perhaps their earlier $30k price was just hopeful dreaming at an early stage of the design?

Well, a PHEV is no harder to cost out than an ICE. Keep in mind that EVs have been around for 100 years (GM sold electric trucks in large quantities from 1912-1918); that there are probably 100 million electric vehicles in use, albeit not highway legal; that electric motors are ubiquitous and extremely well understood; that GM designed and built the EV-1, which supplied much of the technology of the Volt; that GM has enormous experience in large electric drivetrains in electro-diesel trains; and that electric drivetrains are much simpler than ICEs. Heck, whenever a new generation of Prius came out, GM would tear it down and cost it out, down to every component. They know how to cost these things out.

Perhaps as the design got fleshed out their estimated break-even cost rose above $40k?

Yes, and they said the reasons were: unexpected costs to get high energy efficiency components ready for the 1st gen; and inclusion of the cost of two batteries, just to be safe. Even if you believe that GM really thinks they need to plan for 2 batteries, these aren't costs that will exist for later models.

And hasn't that estimated price gone as high as $48?

Well, Lutz once said in an interview that they might have to charge $48K to make a conventional profit. But again, that's for the 1st gen Volt. And, we have to remember that pricing is an artifact of accounting: GM is spending about $1B on R&D for the Volt: if you allocate that to the first 50K of vehicles, that's $20K per vehicle. If you allocate it to the fist 1M vehicles, it's only $1k.

Keep in mind that an EV is much simpler. It will cost substantially less when produced in volume. Look at the Prius: it costs about $24K, and it has two drivetrains.

Why don't we see EV's, especially in Europe?

2009-06-05T15:50:00.003-05:00

Sometime people ask: if plug-in's and EV's are such a good idea, and if they're competitive at, say $3 gasoline prices, then why aren't they used more in Europe, where gas prices are higher?

There are a number of factors:

1) A different capital cost to operating cost picture.

EVs and PHEVs trade a higher purchase price for lower fuel consumption.

In Europe, fuel prices are 2-3 times as high as in the US, but due to historical factors (shorter distances, higher fuel taxes due to the high % of imports), average car in Europe uses about 1/3 as much fuel as one in the US. Further, European taxes on new cars are generally much higher in the US.

Thus, the economic case for EVs and PHEVs is actually worse in Europe, and the lack of EVs and PHEVs in Europe really doesn't add any useful information to the question of how competitive electric powertrains really are with oil in the US.

2) Pure EV's still can't compete on convenience with ICE vehicles. Even in Europe, fuel costs are only a part of driving costs, and the lower cost of an EV hasn't been quite worth the inconvenience. The logical transition from an ICE to an EV is the PHEV, which for some reason wasn't explored seriously until very recently when GM took that path. Now that GM is pursuing PHEV extremely seriously, they're planning an Opel version for Europe.

3) Europeans have fewer garages, as their housing is much older.

4) Tax preferenced diesel occupies the high-MPG niche.

and perhaps most importantly,

5) there were large barriers to entry (billions in R&D and retooling, as well as resistance from ICE oriented manufacturers) for PHEV's, and there wasn't an obvious need for them. There was resistance from people in the industry who's careers would be hurt. This ranges from assembly line workers and roughnecks to automotive and chemical engineers. And, you've got to give them respect and compassion: they're people, and deserve to be helped as much as possible during a necessary transition away from oil.

Until we find a way to help these people, they're going to desperately fight any proposals to transition away from their industries, by honest attacks or dishonest: whatever works. You can't really blame them: they're just trying to protect their lives and families.

Biofuels, fuel cells, nuclear power, carbon sequestration all involve more chemical/process engineering R&D, and building of plants and retirement of old technologies. Isn't reduction of greenhouse gases is gonna be a golden age for the Chemical Engineering?

I suspect that this kind of thing is much more attractive to students and professors than it is to engineeers with 10-20 years of experience, who've attained high salaries in large companies due to their narrow expertise in a particular area, in that company. For them, I suspect any change which threatens their company threatens them personally.

On the other hand, the momentum has now shifted: most of those R&D $ have now been spent; the technology is better tested; the cost comparisons have shifted; and there's enormous pressure for PHEV's from regulators.

Is solar cost competitive?

2009-05-15T12:08:00.001-05:00

Not quite yet, but it's coming:

"The economics of solar power are changing rapidly. And if the Prometheus Institute for Sustainable Development (PI) is right that solar module prices will fall more than 50% by 2012, grid parity will be achieved across many parts of the US."

http://setenergy.org/2009/05/11/much-of-us-to-enjoy-solar-grid-parity-by-2012/

They assume rising electricity prices (which is pretty realistic, with CO2 pricing apparently on the way), but we don't need to focus on that.

The fact is, that PV grid-parity is beginning to emerge right now for a very few specific applications and locations. This will just expand over the coming years, and the assumption of rising power prices will only change the inflection point by 2-3 years.

Also, keep in mind that this is the unsubsidized price, which doesn't reflect any of the externalities, like CO2, sulfur, etc, etc.

The fact is, that solar is here: as production expands, prices will continue to fall, and demand will rise explosively.

Why is talking about energy so hard?

2009-05-12T17:10:00.002-05:00

It can be very hard to talk about the kind of big changes in our energy infrastructure that we really need. Traditionalists and activists talk past each other. Here's pretty good article
about that - it's also fairly realistic about what's most likely to happen, (though I think it discounts what we could do, if we wanted to...) .

"One executive decried the “cheap shots” taken at the oil and gas industry by climate change activists, and then a few moments later mentioned how much he liked a print ad that offered a false choice between offshore drilling and high gasoline prices."

"An attendee stood before a panel of major oil company executives and ask how the energy industry could engage more fruitfully with policymakers and the public on climate change, then admitted that she had boycotted a recent local presentation by T. Boone Pickens about his energy plan for the country simply because he was an oil baron."

"what I see is both sides—the green/climate change side and the fossil fuel side—retreating to their corners, throwing up walls of propaganda, and demonizing the other side."

Do Electric Vehicles cost less to maintain?

2009-05-12T16:50:00.021-05:00

Car manufacturers and dealers think so:

"Car dealers are nervous a shift from gas to electric cars will mean that they don't see their customers as often as they currently do.

The design of the electric car is really simple. There's not a lot of parts, so there won't be much need for maintenance says Mark Perry, Nissan (NSANY) Americas' head of Product Planning. When he said that, was speaking to a group of dealers at an event in New York to show off Nissan's upcoming electric. (We stood outside the circle of dealers and listened in.) "

I've heard a contention that transmissions are the most important cause of car scrappage (" you can call any wrecking yard sales clerk and ask him why most of the cars in his yard are there ,if not because of an accident that rendered them undriveable,and he will tell you the same thing. The used mechanical component that is most often sold out is the automatic transmission. Among lower class working people who drive older cars this is accepted as a given as certain as death and taxes").

So, what about transmissions?

Well, EVs (and Extended range EVs like the Volt) don't have them. EVs generally do have a reduction gear to reduce the ratio of engine rpm to wheel rpm, which is often called a transmission. However, it's not the multi-speed affair with a torque converter and one or more clutches that drive conventional vehicles, and so reliability will be very high.

Regenerative braking greatly reduces brake wear. Brake maintenance is a significant cost. Even Prius brake wear is greatly reduced, and it only has partial regenerative braking. Taxi drivers with Priuses are very happy about that cost reduction.

EV's have no starter motors, transmissions, mufflers, tuneups (plugs, air filters), timing or other belts, fuel pumps, engine coolant (with fan, radiator, hoses and pump), valves, oil (with filter and pump), exhaust pipes or muffler, catalytic converter, supercharger, idle control, or fuel injection. The engine has only one moving part, almost no internal friction, and is likely to last forever. Brake costs are greatly reduced.

Wouldn't all of this likely reduce maintenance costs by roughly 75%?

Jay Leno has a 1909 Detroit Electric model that's still working just fine - it's even still using the original battery.

**EDIT:
11/10: the Leaf’s service manual is out now.

The Leaf requires ABSOLUTELY NO SERVICE. No oil change, transmission fluid, spark plugs, tuneups, oil filter, gas filter, air filter, radiator leaks, muffler changes, power steering fluid, transmission radiator leaks, brake pads, emission control sensor failures, air care inspections...

The only recommendation: inspect/replace brake fluid every 30,000 miles.

**2nd edit

Fleet EV managers seem particularly aware of the potential maintenance savings:

“On an equivalent 100 mile-per-day diesel vehicle, we spend roughly $900 per year in preventive maintenance – oil changes, filter changes, anti-freeze adds, and eventually transmission oil changes. With the electric vehicles, we take that down to $250 per year.

The electric trucks are only equipped with four grease fittings and no engine or transmission oil. The truck must still be taken to look at brake lines and other wear components that may be cracked. Overall, there is virtually nothing that goes wrong with these things.” – Staples vehicle fleet manager

http://www.greenfleetmagazine.com/article/3201/what-staples-expects-from-all-electric-medium-duty-work-trucks/p/2

What about cultural obstacles?

2009-05-09T12:07:00.005-05:00

Doesn't moving to renewable energy, greater efficiency, and a lower environmental "footprint" require a cultural change? Culture changes slowly - what hope is there for the change we need?

Change can come from surprising places:

Producers and advocates of green technology are taking note. The Defense Department derives 9.8% of its power from alternative sources and is looking to expand use of wind, solar, thermal and nuclear energy. Some believe that the military has the potential to become a catalyst, helping to turn more expensive power sources into financially viable alternatives to coal and petroleum.

"If the military were to go green, I think that this really could achieve some environmental goals, for a very simple reason: the military is so big," said Matthew Kahn, an environmental economist at the UCLA Institute of the Environment.

Although that remains to be seen, Kahn noted that it would not be the first time the military has had a transforming effect on technology. Cellphones, the Global Positioning System and the Internet all have roots in the military.

Some in the green energy sector hope that as the military adopts alternative power sources, the technology will gain broader acceptance among political conservatives.

""Just hearing that their military is embracing this new technology that was thought of as left-of-center is going to swing people's thoughts" about using it, said David Melton, president of Albuquerque-based Sacred Power Corp., which installed some of Ft. Irwin's photovoltaic panels and wind turbines.

Military officials concede that changing an institutional culture that until recently was far from green has sometimes been an uphill battle. But at a time of shrinking defense budgets, they say, commanders are finding that making their facilities more energy-efficient and generating some of their own power can yield significant cost savings."

The Army has more than 12 million acres, including large tracts that cannot be used for military, residential or commercial purposes because they are intended as buffers between bases and the civilian population. Some of that land, Eastin said, would be ideal for a solar array, wind farm or geothermal project. Within 15 years, he predicts, the Army "will be a net energy exporter."

http://www.latimes.com/news/science/environment/la-me-army-green26-2009apr26,0,4417523.story?page=2&track=rss

Nate Hagens asks: A green 'military' is kind of an oxymoron don't you think? I suspect they would be green in peacetime and take whatever energy they need during war. Which I suppose is an ecological improvement over taking whatever energy they need during wartime AND peacetime...

Answer:

As far as the oxymoron goes..I know what you mean. That's the whole point: if the military does it, that takes it out of the realm of treehuggers, makes it a hard-headed business proposition, and gives conservatives permission to pursue it.

As far as the rest: aren't we involved in a war now? I mean, what war bigger than Iraq is going to come along? Russia? China? Canada?

If you read the whole article, I think you'll see that they're looking at a wide range of energy consumption, including energy efficiency. In fact, they're beginning to realize that their current immense refueling needs are a major strategic vulnerability, whether it's tanks, planes, or soldiers.

DARPA is funding R&D of batteries, PV, wind (wind provides 1/3 of Guantanamo's electricity), etc, etc. Everything.

All of this means that whatever they do, they'll use fewer Fossil Fuels.

Is the Limits to Growth world simulation accurate?

2009-04-03T16:17:00.012-05:00

The well known LTG model lacks energy as a discrete component - it only includes "non-renewable resources", which it assumes will become increasingly difficult to extract as limits are reached. In other words, Return On Investment will decrease.

Without an explicit analysis of energy, the model is invalid, as we see in a report of an attempt to add energy as a component here; http://europe.theoildrum.com/node/5145 . It says the following: "in a world with unlimited energy, any chemical compounds useful as a raw material but not as an energy source could be easily obtained "

Energy Return on Energy Invested (EROEI) is a key, foundational element to the energy component of this new model: "The available data on EROEI is very spotty, but it’s such a crucial concept to explain what may happen in the future with energy sources that I believe a model would be inaccurate if it didn’t include it in some way."

This new model assumes that renewable EROEI is low:
"Renewables aren’t used until the end of the 21st century, due to their low EROEI: "

The new model predicts serious problems in the medium term, in large part because renewables don't start to grow in a serious way until 2075, due to their low EROEI.

Wind and solar have high EROEI*, therefore, the energy component of the model is incorrect, and so is the overall model.

*Oddly, this model also makes the unrealistic assumption that nuclear fuel will be depleted within the 21st century.

How quickly is wind growing?

2009-03-31T15:58:00.005-05:00

Wind power in the US in 2008 added 21.2 Terawatt hours (8.4GW nameplate @29% capacity factor).

That was 32% of our 10-year growth of 66 Twhrs per year, and about 60% higher than the installations in 2007. At that growth rate wind could provide 100% of new power in less than 4 years, and after that start replacing coal.

There's no reason we couldn't resume that growth curve, should we decide to. Obviously, wind isn't growing as fast right now due to our current financial problems, but I imagine nuclear isn't helped by the financial mess, either (also, 2009 may well show zero or very small electricity demand growth, so there's a nice match there of supply and demand side stagnation).

How expensive is the wind power needed to eliminate coal??

2009-03-14T15:39:00.011-05:00

In my previous post, I said we could build enough wind capacity to replace coal for $400 billion. Coal supplies half our electricity - can we really do that?

Sure. Here's how I came up with that number:

The US generates about 50% of our electricity from coal, which amounts to an average of 220 gigawatts. Wind, on average, produces power at 30% of it's nameplate rating, so we'd need about 733GW of wind. Wind costs about $2/W, so that would cost about $1,466 billion. Transmission might raise that about 10%, to about $1,613 billion.

Now, roughly 50% of coal plants need to be replaced in the next 20 years, so about 50% of the $1.6T coal replacement investment is needed anyway; new coal plants are just as expensive per KWH as wind, so that half, or $800B of the investment can be eliminated from our considerations.

Coal plants cost about $.035/KWH to fuel and operate, which is about 50% of the cost of wind. That's an expense that we'll have either way, so we can eliminate 50% of the remainder, which is about $400B: all told, we can discount the wind investment by 75%!

Wind's intermittency is often raised as another source of cost: I address that here.

--------

So, that gives us a cost of roughly $400B, or $40B per year for 10 years. That's a small % of US manufacturing, and a very small % of GDP.

A bargain.

Would dramatically reducing CO2 emissions be expensive?

2009-03-14T12:00:00.008-05:00

No, surprisingly enough.

The British Stern report projected a cost of 1% of GDP per year, and later Stern revised that to 2%. I think that's too high. Fortunately, we don't have to rely on some kind of authority to figure this out - at least for the US, I think we can do the calculations ourselves.

Most CO2 emissions in the US come from coal - a solution that eliminates coal and a large % of oil consumption will get us most of the way.

Well, replacing coal with wind in the US would only have a net cost of about $400 billion*. Light vehicle transportation accounts for 45% of US oil consumption - replacing it wouldn't cost anything at all, if you include all costs and savings over the vehicle lifecycle**.

$400B divided into a $14T economy is 3%. Over 20 years, that's only .15% per year. Not much, really.

*, ** I'll show the calculations for this on following days.

Does Peak Oil mitigation hurt Climate Change?

2009-03-12T11:49:00.008-05:00

No, probably not. Here's a conversation I had recently:

Randall Parker said :

Nick G,

Peak Oil versus AGW: Peak Oil has the advantage of causing a shorter term necessity with personal direct feedbacks. When the oil production starts the big decline people will have to come up with solutions. Their choices will be so stark and immediate that they'll act, invest, move, research, insulate, cut back. Each person will see immediate costs and benefits for their own decisions.

I am thinking that, however, Peak Oil helps with AGW in two ways:

1) Peak Oil will accelerate the shift to electric cars. Electricity has many ways to get generated, some much cleaner than others. That shift makes it easier because the cost differences btw the dirtier and cleaner ways to generate electricity aren't huge and they are narrowing.

2) We will do more insulating and have more incentives to develop more efficient ways to use energy.

My guess is that domestic opposition to coal plants will stop coal's growth in the US and then we will use less oil. So the US CO2 production trend will start going downward (if it isn't already trending downward). It is Asia that will keep producing more and more CO2 emissions.

I replied:

Randall,
I agree with your thoughts on Peak Oil versus AGW.

A few more:

"the cost differences btw the dirtier and cleaner ways to generate electricity aren't huge and they are narrowing"

1) There's some indication that new coal has overall costs similar to or higher than wind! Some proposed coal plants in the US (not sequestering carbon, but cleaning up all other index pollutants, like mercury) have capital costs around $2.5/W, which gives overall costs of $.08-.09/KWH, which is higher than wind: http://gristmill.grist.org/story/2008/6/4/123223/5089 . On the one hand, some of this may have been a temporary capex cost problem, due to a construction bubble, but on the other, this is an "overnight" cost, which doesn't include the cost of the construction period, which is much longer for coal than for wind (or nuclear). In any case, it kind've looks like coal is no longer the cheap option.

2) There is a plausible argument that the swing night-time electricity producer for the near-term will be coal (which has spare night-time capacity, and lower fuel costs than gas), and that therefore new demand, like electric vehicle (EREV/PHEV/EVs), will be mostly supplied by coal. Coal, as we all know, produces twice as much CO2 per BTU as oil. Conversely, electric vehicles are 6x as efficient as your average light vehicle, and 3x as efficient as a Prius. Therefore, it looks like EV's will still produce less CO2 than ICE's.

3) Demand Side Management of electric vehicle charging (and, later, V2G) provides, in effect, almost free storage to wind power. Wind and EV's are synergistic. More electric vehicles supports a higher grid market share for wind power.

"It is Asia that will keep producing more and more CO2 emissions."

The faster we deploy new, cheaper renewable power and electric vehicles, and the sooner we achieve economies of scale, the sooner those things can move to Asia and displace coal. We've said that before...but it's worth saying again.

I think we agree that there isn't a significant conflict between solving PO and solving climate change, and that in fact solutions for one are generally helpful for the other.

The one exception may be a move from oil-fired electrical generation to coal: the US has phased out oil-fired generation (for all but 3% of the market - the remainder is in odd places like Hawaii), but very roughly 25% of world oil consumption is for electrical generation. I kind've think that move won't happen very much, however, as 1) coal isn't really cheap, as we saw above; 2) much of the world's coal is in the US, which probably won't be excited about large coal exports; 3) many countries will put at least a small implicit price on the emissions (both index and CO2); and 4) wind and solar tend to have lower incremental costs and shorter lead times, which helps off-set their higher capital costs.

How pessimistic should we be?

2009-03-10T16:46:00.007-05:00

I was recently asked that question, more or less. Below I duplicate the dialogue:

Nick, our disagreement about Peak Oil boils down to a question of capital replacement. While I do not foresee the collapse of civilization I do think that the costs and lead times on capital replacement and lead times in organizing new industries around new ways of doing things will cause a long deep recession as Peak Oil's decline hits full force.

I've become more pessimistic about Peak Oil due to the financial crisis. Imagine how bad the next financial crisis will get when the amount of oil available is declining 3%-10% per year.

I answered:

"Our disagreement about Peak Oil"

I don't think we differ that much - I think we have a real challenge ahead, that certainly could hurt us economically. That said, I'm somewhat more optimistic. Below I'll comment on each of your points in detail.

"a question of capital replacement"

Peak Oil (PO) is mainly a liquid fuel problem, and cars turn over fairly quickly, even now (9M per year is still not bad). We have substantial idle production currently, and putting it to use making extended range EV's (EREVs) is a social problem which I am reasonably hopeful we'll solve. EREVs are currently ready for production - I recently saw a fully finished production-ready prototype of the Chevy Volt. It's just a matter of ramping them up.

Hybrids are a transition to plug-in's (PHEVs) and EREVs, and Honda Insight and Prius production could be ramped up fairly quickly (Toyota has a second plant waiting in Texas for expansion of Prius production).

"While I do not foresee the collapse of civilization "

For a significant % of those in the world of PO, that makes you a "cornucopian". Have you looked at dieoff.com?

"costs and lead times on capital replacement"

The Volt R&D is pretty much done. Production will start in 18 months - that's not bad.

"organizing new industries around new ways of doing things will cause a long deep recession as Peak Oil's decline hits full force"

Well, GDP measures activity, and PO could keep us mighty busy. GDP gets a bump up after natural disasters.

High oil prices hurts the US's GDP mainly because of the income transfer to oil exporting countries. If OEC's can be persuaded to take T-bills, then GDP will be ok (at the cost of a large long-term wealth transfer). After their current reminder that oil prices can also go down, leaving them to live off investments, I think OEC's will be more receptive to that.

The current crisis is largely a failure of petrodollar (and Asian exporter dollar) recycling: low income households were borrowing directly from oil-exporting (and Asian) countries through CDO's, but it turned out they didn't have good collateral, and we're returning to financing our trade deficit with national debt, rather than personal debt. That's much more workable for the long-term.

I'm a bit more pessimistic about Climate Change, and a bit more optimistic about PO, because of their differing dynamics. Take Y2K: it was a problem with a purely man-made system, and so it's cure was relatively straightforward. PO has a geological element, but ultimately it's mostly a problem with human systems - heck, with the right national consensus we could reduce oil consumption by 10% overnight, 25% in 3 months, and 50% in 5 years. CC, on the other hand, has enormous natural lag times, and dynamics which we understand only poorly.

Is street parking a barrier for PHEV(plug-ins) or EV's?

2009-03-05T16:07:00.005-06:00

Not really: more than 90% of vehicles have garage parking or a driveway, parking lot or other off-street space.

"PARKING: Slightly more than nine in ten American households (91 percent) have at least one car, van, or light truck at home for personal use.
Because 71 percent of homeowners and 35 percent of renters have more than one vehicle, parking space can be a real concern. Garages or carports are common for households living in single-detached units—just over three in four of these homes (76 percent) have a covered shelter for vehicles. Townhouses or row houses, on the other hand, include a garage or carport less than half the time (46 percent). In both mobile homes and units in multiunit buildings, the proportion is 26 percent.
At homes without a garage or carport available, vehicles may be left either on the street or in a driveway, parking lot or other off-street space. For homes without a garage or carport, some kind of off-street space is available at 87 percent of the detached units, at about 75 percent of both the single-attached units and units in multiunit structures, and at 90 percent of the mobile homes.
All this leaves about 7.8 million households who must rely on street parking. Of course, not all of those households have vehicles. Four in ten households who report no offstreet or garage parking also have no vehicles."

Here's the source.

I live in SoCal - most people I know have too much stuff in their garages to use them. On the street where I live almost all the cars are parked on the street or in the driveway in front of the garage. What about us?

I see this occasionally, but in the midwest this is fairly rare. I would guess that it's a symptom of very temperate weather combined with home prices much higher than average for the country that put space at a premium. I would guess that the availability of PHEV/EV's will encourage more people to actually use their garages.

Apartment dwellers face similar obstacles for charging up cars as they have for getting efficient appliances and good insulation: They get the benefits of the investments in charging facilities or insulation. But the landlords spend to provide the equipment. What about them?

Well, many don't have cars, and many others use mass transit. I would think that this will encourage the use of carsharing (like zipcar.com ). The remaining will need public infrastructure: outlets in parking meters, parking garages, or gas stations. Fortunately, that's a small %.

Is the Volt's battery too large/expensive?

2009-03-03T16:17:00.009-06:00

A recent study Carnegie Mellon University argued that "plug-in" hybrid-electric vehicles, like the Chevy Volt, are too expensive. Are they right?

No. They assumed that the battery would cost $16,000 (or 1,000/KWH). As GM says, that's way too high. (Oddly, they also conclude that a plug-in with a 10 mile range would be better, because drivers would stop and charge every 10 miles!)

Similarly, $10,000 for the Volt's battery has been widely reported in the media, but we shouldn't rely on mass media! Really, no one knows how much the batteries cost. The $10K figure is purely speculation. Here's an example, in the CS Monitor. We see that it doesn't say $10K. Here's what the article says: "the race isn't over making a Chevy Volt battery designed to run 40 miles on a single charge that could (emphasis added) cost as much as $10,000." We can see that the reporter doesn't have a firm source for this cost figure.

Elsewhere, the article says: "Still others say that the cost of new battery power for PHEVs may drop faster and already be lower than what has been widely reported at perhaps $500 per kilowatt-hour or even less, says Suba Arunkumar, analyst for market researcher Frost & Sullivan.

"I do expect the price will come down to perhaps as low as $200 per kilowatt-hour when mass production begins in 2010 and 2011," she says."

Tesla's cost is $400/KWH - it's very likely that GM will pay $200-$300 in volume. The batteries won't be produced in large volumes for several years. They'll use less expensive materials than 1st Gen batteries; the larger format is much less expensive; and they'll have very, very large production volumes relative to most 1st-gen li-ion. Large production volumes reduce costs very quickly.

GM is pricing the Volt high purely to capture the early-adopter premium and the federal rebate - their official justification is that they're pricing in 100% replacement of the battery under warranty, which really isn't credible. We can expect the Volt to cost less than $30K with large volume production.

Is the battery too large?

Yes, they're only using 50% of the battery - a 50% depth of discharge (DOD) is very conservative. That means they have to use a 16 KWH battery to get an effective 8 KWH's. They could be more aggressive (and probably will be in the future), but they're very sensitive to the bad publicity that early battery failures would create.

Could they use a battery that allowed a deeper DOD?

No, there aren't any batteries on the market that are more durable as measured in charge cycles. Tesla's batteries aren't expected to last more than 400 cycles, and the Volt will do 5-10x as many. In theory, the Volt could have a smaller battery. That would mean a shorter range, which would still accomodate many drivers. That might more perfectly optimize costs, but then it wouldn't feel like a big step forward. It wouldn't feel like a real EV, with generator backup - instead, it would feel like an incremental hybrid. Both GM (for PR) and buyers want a large, step forward, I think.

Why does the US have difficulty paying for oil imports?

2009-03-02T10:06:00.006-06:00

This is really asking: why isn't the US competitive in it's exports, so that it can pay for imports?

The US has several major problems: a persistent negative balance of trade with oil exporting countries; another persistent negative balance of trade with Asia; loss of manufacturing jobs; bubbles in the financial and real estate sectors; and slowing economic growth.

Economic growth slowed in the 70's and 80's; sped up in 90's; and crashed recently.

The US doesn't have enough engineers (civil, manufacturing, software, etc) - we have to import students from other countries, something which has gotten a bit harder lately, as reverse brain drains send talented engineeers and scientists back to India and China.

What's the common thread?

Military spending: half of all US engineers work directly (West Point is an engineering school) or indirectly (Boeing, etc) for the military. Sometimes we get indirect benefits, spinoffs like the Internet (developed by the Defense Advanced Research Projects Administration to make military communications more resilient), but a lot is classified, and at best ends up in domestic products that can't be exported.

In the 90's the US reduced the military, and growth took off (and we had our first budget surpluses in decades). In the 00's we took the military option: innovative energy strategies like the PNGV program (the US hybrid program which sparked Japan's Prius) were ended, and we chose a military invasion of the M.E to guarantee oil supplies.

Now this administration is pushing investment into innovative energy strategies, and (slowly)winding down the Iraq war. Are we on the right track at last? Can we sustain it?

Can bicycling replace 50% of driving?

2009-02-28T19:13:00.005-06:00

First, some background. A reader offered this reference and suggested that "they reckon half the trips in america can be done in a 20 minute ride."

So, can bicycling replace 50% of driving?

Not really. First, 50% of US trips may be short enough for a bicycle, but....they're very short trips..and would only account for a relative small% of miles traveled. Second, I don't see a real analysis of how many of those trips could truly be handled by bicycles: many trips involve multiple people, large loads, bad weather, or physically limited drivers for whom bicycles will never be appropriate. I couldn't find how they calculated the 50%, but if we assume that it corresponds to their best-case scenario for bicycling market share, we're talking about 8% of miles driving, of which half (or 4%) is probably realistic. If these are slow urban miles that are more energy intensive than average, maybe 5% of fuel consumption.

Bicycling is A Good Thing, but it's not the main solution. The main (fast) solution is replacement of oil with renewable electrity, mostly in transportation, which in turn is mostly light vehicles, starting with hybrids, moving through plug-in's (for a long time), and ending with EV's.

I'd like to see a real analysis of bicycle safety vs driving; and what it would take to provide real safety; and comparison of various solutions, including lanes, boulevards* and truly separate bike roads. I think we should expand bicycling (and electric bikes, and segways), but it will take a while to do properly.

*“bicycle boulevards,” typically residential streets where traffic volume and speed are reduced to levels at which bicyclists, pedestrians, and motorists can comfortably share the road.

Do plug-in hybrids really get good mileage?

2009-02-26T12:49:00.015-06:00

14 specially customized plug-in hybrid Toyota Priuses didn't do much better than standard Priuses in fuel efficiency. Google's own fleet of hybrids and plug-in hybrids (Ford Escapes) are only averaging 28.6 mpg while their pluggable versions of the Escape hybrd get 37.7 mpg for a 32% improvement. That doesn't sound great. (hat tip to futurepundit.com)

It looks to me like the main problem is that they're starting with a Prius or Escape. Both of these are parallel hybrids which use both the gasoline engine and the electric motor, even if you stay within the 30 mile range of the batteries. If you drive with a leadfoot or at highway speeds, the battery doesn't get used that much.

A series hybrid plug-in like the Chevy Volt has only an electric motor. It uses only the battery for the first 40 miles. 78% of commuters wouldn't use any gas at all. Combine that with 50 MPG (twice as large as the average US light vehicle) for the 20% of driving after the battery runs low, and overall fuel consumption would be reduced by about 87%* (for a 567% improvement in MPG!).

* A Volt would use about 20% as much fuel as a very efficient (35MPG) conventional car - that's 12.6% as much fuel as the average 22MPG car.

Is wind growth stopping, and hurting wind manufacturers - can we see this in the stock market?

2009-02-25T13:08:00.012-06:00

Yes, partly.

GE, of course, has seen it's stock fall, but that's because of their finance arm. IOW, they're not a "pure play". Vestas is the other large player: I took a look at them, and they seemed to be doing
pretty well especially for a large, capital stock manufacturer. Such manufacturers are always hit hard by the stock market in a recession like this. They still seem to be profitable - and orders are increasing a bit from last year. It's not clear if world wind installations will be as high as last year (that was also affected by the US's delay in extending the PTC - that killed some early 2009 deals), but they'll still be quite healthy from a longer-term point of view.

Will wind grow in a free market?

Yes, with regulations: CAFE, cap and trade, feed-in tariffs, and utility market share requirements are all compatible with free markets - they just provide guidance to the market.

Can renewables compete with dirt cheap oil and coal ?

Not until recently, when better regulation arrived, and sparked dramatic growth in the market,which produced economies of scale, new engineering, and thus much cheaper prices.

Now, let's be clear on wind's competitiveness. Coal is the big problem: old, dirty plants are dirt cheap. They will be for 50 years, if we continue to build and use them. We don't need wind to deal with PO, we need it to deal with climate change. We may or may not decide to aggressively replace coal with wind, but it's useful to know that it wouldn't be all that expensive: just $2T, less than the cost of a lot of other things: Iraq war, the US finance bailout, etc, etc. Of course, wind has a payback, unlike war, and parts of the finance bailout - in the long run, and counting all costs, it's likely to more than pay for itself.

The main problem with energy isn't technical, it's political: the 20% of the workforce who would be made obsolete will fight it quite hard. But, it's useful to come to consensus that this is the case, and that the technical barriers aren't that big a deal.

What about oil?

The short term problem isn't electricity, at least in the US. It's more moving to PHEV/EV's, and we are, in fact, doing that. The Volt will be in large scale production in 2 years (GM is building it's future around it), and others will be as well.

What if we have a sudden oil shortage?

We have more than enough energy to build new vehicles. For that matter, we can carpool and telecommute during the transition. We really can. I'm often baffled by the lack of awareness of the potential of carpooling: the US could cut it's oil consumption by 25% in 3 months, if it chose to. It would be inconvenient, and require an emergency to do, but everyone would still get to work.

Are we running out of coal (part 2)?

2009-02-24T17:46:00.021-06:00

Again, for better or worse, the news is that we are not.

A recent report by the US Geological Survey looks at the recoverable reserves of the Gilette field in Wyoming, currently the largest producer in the US.

It found that at current low prices, about $10/ton, that only about 6% of the coal in the field could be economically produced.

On the other hand, if the minemouth cost of coal rose to $30/ton, the retail cost of coal-fired electricity would increase only 10%*, but economically-recoverable coal reserves would increase six times. At $60/ton, 77 billion tons would become economic, enough to singlehandedly maintain US coal consumption for about 75 years. And, that's without Montana coal (Powder River), or the Illinois basin, which I discussed previously.

A spirited discusion of the report can be found here (you'll have to watch out for the tone of pessimism, which is endemic on the site).

Aren't you just taking the USGS at face value?

Not at all - I look at the detail from the USGS, the EWG, Rutledge, industry reports, etc, etc. Ultimately, I find that there really isn't disagreement on the facts, just the interpretation. Those who see coal as peaking are looking at demand for coal, in the context of cheaper and better alternatives. See more discussion of this below.

Will Peak Oil make diesel too expensive to transport coal?

No.

A $100/bbl increase in the cost of oil would increase the cost of transporting a ton of coal by $100/bbl x 1bbl/42 gal x 2.65 gal/ton** = $6.3/ton. That's a 3% increase in the cost of electricity, which means that railroads will be easily be able to out-bid other potential users, like trucks.

Coal transportation by rail can also be converted in a relatively straightforward manner to use electricity instead of diesel, meaning that reduced oil supplies are highly unlikely to have a significant direct impact on the ability of the US to transport coal.
We're going to have to make a conscious decision to eliminate coal - it's not going to run out, and make the decision for us.

What about this report?

"Despite significant uncertainties in existing reserve estimates, it is clear that there is sufficient coal at current rates of production to meet anticipated needs through 2030. Further into the future, there is probably sufficient coal to meet the nation’s needs for more than 100 years at current rates of consumption. However, it is not possible to confirm the often-quoted assertion that there is a sufficient supply of coal for the next 250 years. A combination of increased rates of production with more detailed reserve analyses that take into account location, quality, recoverability, and transportation issues may substantially reduce the number of years of supply." From Coal: Research and Development to Support National Energy Policy

There's no real disagreement here - what disagreement there is, comes from a different frame of reference.

1st, they say "it is clear that there is sufficient coal at current rates of production to meet anticipated needs through 2030". I would argue that's probably all we need, for the transition to renewables.

2nd, they say "there is probably sufficient coal to meet the nation’s needs for more than 100 years at current rates of consumption". I would argue that's certainly all we need, for the transition to renewables (or fusion, for that matter - in 100 years things will be very different).

Finally, they say that there are risks beyond 100 years: the coal is there, but that 1) the US might dramatically increase it's rate of consumption - I think that's highly unlikely, 2) other issues may get in the way. Well, if we really were to face a situation where our economy's collapse could be prevented by digging up our national parks...the national parks wouldn't stop us.

All in all, I'd say that report supports the perspective that in the US, there's no realistic prospect of inadequate electricity caused by real, physical limitations.

*Electricity in the US is about $0.10/kWh, and US coal generates about 2,000kWh/ton. That gives a retail price of electricity of $200 per ton of coal used, so a cost of $10/ton for coal represents only 5% of the overall retail price.

**Rail transportation is about 440 ton-miles/gallon on average, and coal is at minimum 500 tm/gallon. Coal trains are probably even more fuel efficient, because the ratio of load to tare weight is greater than most other rail freight (particularly intermodal). 600 tm/g might be a good estimate. Low-sulfur coal in the US travels roughly 1,000 miles before being used (high sulfur coal travels much less).

Fuel consumption is driven by 1) acceleration and climbing; 2) drive-train friction; 3) wheel friction; 4) wind friction. 1 and 3 will rise (and fall) with weight, but not the others. If coal trains weigh much more, and will be substantially more efficient on average. Conversely, dead-head trains on the return trip from the power plant to the coal mine would consume less fuel, but the decline won't be 100%.

If the industry stat is 440m/g, we can assume that coal gets at least 600 miles/gallon one way (1.52 gallons per 1k miles). The empty train might use 50% as much the industry average for fuel on the dead-head leg (or, in effect, 880m/g, or 1.14 g/kmile). 1.52 + 1.14 = 2.65 gallons for the 2,000 mile roundtrip.

The 440m/g industry stat must include dead-heading: IIRC coal is roughly 1/3 all US train traffic, and it's not the only freight with this problem, so the above calc (which allocates this overhead cost only to coal) is conservative.

Could we run out of lithium for EV batteries?

2009-02-23T16:13:00.032-06:00

Lithium is reasonably abundant, and reasonably widely distributed: it's mostly produced now in S. America, but China is expanding production, and there are substantial sources elsewhere. It can be recycled efficiently.

It's rather like uranium: in the short run there could be boom-bust cycles of supply expansion and shortfalls, but in the medium-term there aren't really resource limits.

There was a widely read analysis a couple of years ago that raised questions (The Trouble with Lithium: Implications of Future PHEV Production for Lithium Demand, William Tahil, Research Director, Meridian International Research, January 2007 http://www.meridian-int-res.com/Projects/Lithium_Problem_2.pdf ) but those questions have been answered pretty thoroughly. The amount used by each battery isn't that great: one estimate is that most lithium chemistries require around 3+lb/kWh of lithium carbonate, so for a 16KWH Volt type battery we would need about 50 lbs of lithium carbonate (or about 0.3kg of Lithium metal equivalent per kWh, per Tahil). At that level, there's more than enough lithium (see reference below). In the short term, battery producers are very experienced at this sort of thing - for instance GM is assembling the Chevy Volt battery from cells made by LG Chem, the largest li-ion cell producer in the world - I suspect LG is pretty good at getting long-term contracts for their supplies.

At $2.75/lb, that's only $137.50, or 3.4% of the likely Volt battery cost of $4k (wholesale in 2-4 years). A doubling in the price of lithium would only increase the cost of a $30K vehicle (after $7,500 credit) by $137.50.

Here's another good general discusion. If you want a more detailed discussion look here and here, and for some debate go here. A study by the Dept. of Energy's Argonne Lab here said "Known Lithium reserves could meet world demand to 2050".

What about recycling?

Well, according to this, lithium is so cheap currently that it hardly pays, but in a sign of unusual foresightedness, lithium recycling is being put in place. This site indicates that li-ion battery recycling is widely available.

Are lithium-ion batteries, like those in GM's Volt or the Nissan Leaf, unsafe?

No. They're using newer chemistries which are more stable than the the cobalt-based chemistry in laptops or the Tesla. A123systems iron-phosphate chemistry is very stable. Others, like the manganese-spinel LG chemistry is significantly different, and safer.

Toyota has questioned the supply of lithium. Do they know something?

No. The industry as a whole, including GM, Nissan, and Honda are banking on lithium batteries. They also are pretty good at sourcing supplies.

As far as Toyota is concerned - sadly, this is part of a pattern of dishonesty. Several years ago they committed to 1st gen li-ion (cobalt) from a supplier in their Keiretsu, and then Toyota had some Q/A PR problems, and 1st gen li-ion had thermal runaway (fire) problems, and Toyota became nervous. They decided to go w/2nd-gen li-ion, but were caught without a good supplier. They're "dissing" li-ion until they can get their act together, and on the road. This is similar to their dishonest "dissing" of competitors to the Prius, especially GM's Volt (here's an example).

You talked about short-term supply problems. Couldn't these be a problem?

Yes, and they already are. Prius and other hybrid production has been slowed down by NIMH battery shortages, and it looks to me like the same is true for li-ion batteries. OTOH, we shouldn't exaggerate the problem: the supplies are out there, and these large companies are very good at solving these problems over time. On the 3rd hand, in the case of a fuel emergency, it might be difficult to ramp up battery production overnight - we'll need contingency plans for the interim.

Uranium? You mentioned Uranium - is there a question about Uranium supply?

No, my reading doesn't support that. In the short run there certainly could be modest boom-bust cycles of supply expansion and shortfalls, but in the medium-term there aren't really resource limits.

I haven't really seen a definitive resolution of the question, but it looks to me like there are too many alternative sources of uranium, including weapons recycling, reprocessing and expansion of existing mines (including mines in the US, at substantially higher costs, of course), for us to have an absolute shortage.

Here's an example of the kind of change that might happen: "It is also relevant to note there that, as discussed above, enrichment capacity can to some extent be used to produce additional uranium supply, by operating enrichment plants with a lower U-235 assay in the tailings stream. This means that utilities can reduce their uranium demand by 10% or more provided they have access to sufficient enrichment capacity at a price which makes this economic (i.e. provided it is less expensive to buy more enrichment than to buy more uranium). Furthermore. so long as they have surplus capacity, enrichment Plant operators can physically operate their plants at lower tailings assays than that specified in contracts with utilities, effectively producing additional uranium (which they can then sell in the market). This is always likely to be an attractive option for enrichment plant operators. as their marginal costs of production will normally be less than the price paid by utilities for enrichment services." From Nuclear Development Market Competition in the Nuclear Industry: Nuclear DevelopmentBy OECD, Ad Hoc Expert Group on Market Competition in the Nuclear Industry page 60-61

It would be nice to have a really clearcut, definitive answer, but uranium supply looks nothing like oil to me. Oil flows into reservoirs. Where there are no reservoirs it's lost forever, and where there is a reservoir you have a pool with fairly defined edges, the edge of which you can hit relatively abruptly.

That's very different from uranium which is much more abundant relative to consumption, much more widely distributed, with ore-quality distribution that is much more uniform than oil.

There's a spirited discussion here.

When will we see a working Chevy Volt?

2009-02-23T11:19:00.002-06:00

Now!

At the Chicago Auto Show I asked the woman introducing the Volt if it had a real drive-train, and yes, the Volt on display is a working model! And, there’s another as well! So, there are two completely finished Volt prototypes!

Up until now GM had a working drive-train, but they were only testing it in makeshift car bodies borrowed from other models - "mules". Now, they've assembled the whole thing, with all of the unique, electric accessories that were designed for maximum efficiency.

A milestone.

Would eliminating coal be difficult?

2009-02-21T13:52:00.006-06:00

No.

We'd need only about $1.6T of wind investment to completely replace coal in the US, and power all light vehicles.

How did I come up with that? Well, we generate about 50% of our electricity from coal, 220 gigawatts. Wind, on average, produces power at 30% of it nameplate rating, so we'd need about 733GW of wind. Wind costs about $2/W, so that would cost about $1,466 billion. Transmission might raise that about 10%, to about 1,613 billion.

That's actually in the ballpark of the cost of the status quo, all told, given how expensive coal plants are to build ($4-$7/W), and the cost of fueling them. It's less than the cost of the Iraq war, all told.

That's only 73GW per year over 10 years. That's quite comparable to the average amount of generation the US installs every year right now. We built about 8.5GW last year in wind alone, IIRC, and expanding that to 73GW wouldn't be that big of a deal.

No big deal at all.

If we were to go to a 100% electric economy wouldn't we need 5 to 10 times as much electrical generation?

Not really. Electrifying all light vehicles, which account for 45% of US oil consumption, would only require an increase in generation of about 17% (220M vehicles x 12K miles/vehicle x .25KWH/mile = 75GW) in overall generation (450GW).

Wind, on average, produces power at 30% of its nameplate rating, so for light vehicles we'd only need 250GW of wind (75GW/30%). Wind costs about $2/W, so that would cost about $500 billion. Transmission might raise that about 10%, to about $550 billion. That's only $50B/yr for 11 years.

PHEV/EV's won't cost any more than existing light vehicles - the average light vehicle in the US costs $28K, and you could certainly add a plug and a much larger battery for $4k.

The same thing applies to air-source heat pumps for space heating.

Electricity is much more efficient than oil and gas.

Should we prioritize walking, biking and public transport?

2009-02-17T14:54:00.012-06:00

Well, we should encourage all of these things. I wish I had more room for titles, for what I really want to ask is: should these be considered more important than electrification of light vehicles (cars, etc.)?

The answer to that is no.

Walking can't replace light vehicles quickly. In the long run localization will help, but vehicles can be replaced 10x as fast as housing: half of all light vehicle miles driven come from vehicles that are less than 6 years old.

Ask anyone who's bicycled for any sustained distance and time - it's not very safe in most places. To be safe, biking needs large infrastructural investments in the form of dedicated, physically separated and protected lanes. Further, exercise is certainly good for you, but renewably powered electric vehicles are much lower C02, due to the FF-intensivity of our food supply.

Electric bikes are probably the very lowest CO2 transportation. Bicycling purists tend to object to them - I guess it's due to excessive emphasis on exercise, and a lack of awareness of the CO2-related benefits of electricity vs food calories. They're much more accessible for the partially disabled, and people who can't arrive at work all sweaty. The Chinese are moving to electric bicycles as well as electric cars. That's a great thing, but in the US we'll mostly use electric cars.

Bikes have bad aerodynamics: motor bikes have very poor economy given their size and weight. Bicycles are only more efficient because of their low speed. An electric bike might use only 10wh/mile, but that's at 5-15 miles per hour. Bikes have terrible aerodynamics (though not a big cross-section), so an input of 50Wh/mile will be needed to allow you to move close to the normal cruising speed for a Prius (if you're that kind of risk taker).

OTOH, a Prius at 10MPH might well use about 1 HP, or 750W, or 75Wh/mile (and less than 20Wh/pax-mile, with 4 passengers), while a bike would need about 50W. Does that make much difference? An EV would only use about 2,400 KWH's per year. That's the electricity supplied forever by .9 KW of wind capacity, which would cost about $1,800. One-time. That's not much.

But are people buying cars of any kind now?

Construction is down to 500K homes per year, vs 10M light vehicles. We'll replace vehicles 10-20x faster.

Isn't the average turn over time for the whole existing fleet of cars is about 17 years?

Until recently, cars less than 6 years old accounted for 50% of miles driven. New car sales have fallen less (-40%) than new homes (-60%).

Shouldn't we educate folks and pushing for policies that get more and more people out of their cars?

A good idea, but most people don't commute long distances because they're in love with their car: that's the only way they can find affordable housing.

Public transport is important, but slow to build. Buses can be bought quickly, but they use as much oil as the average car per passenger. They use more than a Prius, and 4x as much as a carpooling Prius. Rail is much better, because it can be electrified and because it supports Transit Oriented Development but it's slow to build. We need fast solutions for the majority of the problem.

Aren't we moving to a new paradigm of localization?

We're moving to renewably powered electricity. That will work quite well, and look a fair amount like life today. If we want to move to a different way of life, we'll have to make an explicit and separate decision to do so: PO and CC won't force the decision.

Is a gas tax a good idea? or a higher CAFE?

2009-02-17T12:31:00.012-06:00

Yes, but any one of them won't be enough.We need all of them.

We need a tough automotive Corporate Average Fuel Efficiency (CAFE) standard to provide planning certainty.

We need feebates (fees for low efficiency new cars, rebates on high efficiency cars) or fuel taxes to make people want to buy efficient vehicles, and to properly weight operating costs. Otherwise, buyers don't want to buy them, and car companies have to lose money on small cars to sell them - that means car companies fight CAFE tooth and nail. You even have the perverse effect of low prices making small cars seem low-status.

We need taxes to give buyers of used cars an incentive for to look for efficiency: half of all miles driven are driven by vehicles over 6 years old.

Finally, everyone needs an incentive to drive efficiently.

We need a balanced set of regulations and incentives to prevent or mitigate weird results, like the SUV loophole. It's very much like tax policy - minimize any particular tax, broaden the base, and prevent odd side effects.

Here's the story that started this post.

Could solar supply all our electricity?

2009-02-16T16:58:00.021-06:00

Yes, it could if necessary, but it wouldn't be the cheapest way to do things.

It makes no sense to try to solve our supply problems with just one source. A pure solar US doesn't make much sense for a lot of reasons:

1) The US uses an average of 450GW of electricity. At 20% capacity factor, we'd need 2,250GW of solar to provide that much. 2,250GW of solar would produce a peak of production about 3x as high as noon-time consumption (very roughly 750GW). PV doesn't have built in storage, so that would be a big problem. Demand Side Management could help (see my earlier posts), but at some point there would be diminishing returns. For CSP, even if molten salt storage is pretty cheap that's still a lot of unnecessary infrastructure.

2) Winter is also a big problem. In particular, wind is better at night and during winter. A combination of wind and solar makes much more sense, as they're complementary. We can keep existing fossil fuel plants around for the 5% of the time that we have prolonged, widespread calm periods, or use bio-mass (wood provides 1% of US electricity currently, and is much more sensible as a use for biomass than ethanol).

3) Solar is more expensive than wind (currently at least $15 per average Watt vs $6/W for wind), so we need a higher proportion of wind in the mix. Both wind and nuclear will provide power during the day, and solar would only make sense for the peak component. I can't see a need for more than about 500GW of solar, which would give us a market share of very roughly 30% of KWH's.

Here's an extremely simplified preliminary model: let's assume today's 450GW consumption, plus 75 for PHEV/EV's for a total of 525GW. Current consumption is probably 250GW for 7PM to 7AM, and roughly 650GW for 7AM to 7PM. PHEV/EV charging might raise night time demand to 350GW, and daytime to 700GW. Wind and nuclear might provide the baseload of roughly 350GW and solar could provide the daytime an extra 350GW. That would give an average from solar of 175GW, or 33%.

What about net-metering - doesn't that allow consumers to provide all of their needs through solar power?

Yes, but most net-metering programs are limited by statute to a small % of KWH's, perhaps 1%. Those caps can get lifted, as they did in CA lately, but it won't make sense economically to raise them much above 10% or 15%.

Couldn't ice-storage A/C and electric vehicles time-shift demand?

Sure, but there is a cost to ice-storage A/C, both in terms of capital and efficiency, and night time charging is a bit more natural for PHEV/EV's.

What about a massive PV farm?

Something like that would be on the utility side, and would have to compete with wholesale prices, which are half those of retail. PV is best on the retail side.

It makes more sense for PV to be on I/C rooftops, which is where 80% of CA installations (by KW) are happening, because of economies of scale and flat roofs. New construction is best because of integration with the roof, but these days new I/C construction won't provide a lot of square feet. The ideal size for consumer-side installation is about 90% of the consumer's noon demand - that eliminates the need to deal with selling power back to the utility, and maximizes savings.

Residential is 80% of installations, but they're much, much smaller than I/C on average, and much less economic. Residential only make sense currently because of the non-economic value to the home-owner, which can be substantial. Residential new construction might make sense in the future if the industry achieves very large integrated roof-module manufacturing economies of scale (right now PV roof tiles are surprisingly expensive), and if installation becomes very efficient through integration with the construction process.

How much would the non-module cost of a large PV massive solar farm run us?
The Balance of System includes controls, inverters, mounting structures, and wiring. These are a very fast moving target. Their prices have fallen very quickly in the last few years, and some innovative approaches are in competition. I would hope that overall system prices would fall to $2/W in 10 years, which would give $.10/KWH. That's the average US price currently, so I would think that it would beat peak prices in most of the country at that time.

As I discuss in a previous post, I think that we're now at grid parity without subsidies in ideal locations. That means that PV will continue to grow very, very quickly due to demand. Heck, even now in the worst bank panic since 1929, PV is still growing, albeit slowly enough that supply can finally catch up with demand and prices can begin to fall as quickly as costs.

Is there a problem with solar for peaking in the evening when people come home from work? Won't we still need natural gas for evening peaking?

That's the traditional utility point of view, which is incentivized by a regulatory framework that's based on capital investment ROI. When faced with a peak demand, they think first of new generation, then of expensive central storage.

Demand Side Management is far better, faster, easier and cheaper. Charge based on time of day, and sell cheap timers that lower the thermostat on the A/C (as well as the fridge) at noon, instead of middle evening. Overall KWH consumption rises slightly (due to a larger differential between inside and outside temperatures), but this would be far more efficient than ice storage.
Also, PHEV/EV charging will avoid peak times - GM is working very closely with EPRI and a large array of utilities and DSM companies to make it work.

People will do simple things like reducing lighting in the evening, which will reduce lighting KWH as well as A/C. People will be creative.

Dynamic pricing could cut peak demand, certainly. The regulators just have to allow it. When's that gonna happen?

Actually, it's not only allowed, it's mandated by the energy bill of 2005 - all utilities have to be offering it now. I believe PG&E is aggressively rolling it out over the next several years. The stimulus bill throws some money at this as well.

The utilities aren't all that excited by it, because the capex ROI regulatory model is still in place for most utilities. That means that most are sticking at the pilot program point, where customers can have it on request. Here's an example: http://www.thewattspot.com/ .

Even with dynamic pricing some people are going to turn on the air conditioner.

Sure, but 1) I wasn't talking about less A/C, I was talking about earlier A/C (and refrigeration) and 2) you only have to shift part of demand to move the curve earlier, to where solar shines (pun intended).

"Reduce lighting in the evening: This really undermines the utility of the light bulb. "
Much lighting isn't needed, and that if people pay a little more attention to turning out the lights when it's most expensive, that will make a difference.

I'd also note that if we move to residential PV, the capex needed for energy will become much more transparent to residential customers, and they're likely to realize that there are much higher ROI opportunities than PV, like better lighting, appliances and A/C. A/C in particular could be much more efficient with relatively small marginal investments at routine replacement points.

Won't the big cost cut for installation will come when solar panels replace roof shingles?

That certainly makes sense, but solar shingles exist now, and for some reason they're quite pricey - I'm not sure why.

That would be most true of new construction (after builders perfect the integration), as residential retrofits require a lot of custom work: evaluation of site, angle, and insolation and custom design, sizing, and wiring (including controls and inverter). Installation of wiring is going to be somewhat involved in most multi-story buildings, involving significant pulling of cable, with every installation requiring solving new problems. We only have 500K units/year of residential new construction lately, which would only get us about 2GW per year. Even at more normal construction rates, new residential isn't enough.

Industrial/commercial flat roofs are really the best place for retrofits: you tend to have unobstructed insolation (low-rise I/C districts, and few trees), flat roofs, much simpler wiring (conduit and cable chases designed for easy access and additional wiring) and much larger installations, which give you economy of scale. It's a nice fit with chains, like Walmart, that have access to a lot of buildings of similar design.

Do wind & solar need storage?

2009-02-11T17:53:00.017-06:00

No. It is often argued that wind and solar intermittency create a need for expensive utility electricity storage facilities. I would argue that there several much more cost-effective alternatives: demand side management; geographical dispersion; and using existing generation as backup.

First, covering demand from storage for any significant time would be very, very expensive. Better to handle as much as possible with almost anything else, and use storage as a much lower priority resource.

Second, I believe there is general agreement that wind can achieve a market share of at least 10%, and probably 20%, with current load-following techniques (including modest levels of the alternatives I'll describe below), so wind can grow quite a bit without anything that might seem exotic. If wind captured only 20% of the market, it could displace 40% of coal, or 20% of coal and 50% of natural gas.

1) The first alternative is Demand Side Management (DSM): short term intermittency is far better handled with DSM than with central storage, especially as the number of plug-ins and EV's grows. DSM is almost free to utilities, and has both effectively instant response times and enormous capacity.

Plug-in/EV charging can be scheduled when it's needed. If your problem is too much wind in the middle of the night, charging can go there, and easily be 1/2 of demand. Heck, for short periods it could be as much as you wanted: visualize 150M plug-in's pulling 6KW each, for a total of 900GW!

Plug-in/EV's could also provide V2G, and provide additional supply in similar numbers.
Does it seem hard to imagine that many plug-in/EV's, or hard to imagine them ramping up quickly enough? Well, the thing to keep in mind is that they can grow as quickly as wind and solar: we could easily produce 10M plug-in/EV's per year in 10 years.

We should note that DSM for PHEV/EV's is more important than V2G. It sidesteps battery cost issues, as well as other complexities that come from using wires in two directions. OTOH, it's highly likely that the 2nd generation Li-ion batteries now being put into production will last longer than the vehicles they power, rendering the cost per cycle question unimportant for V2G.

It's important to maintain clarity about the timeframe and context of our discussion. If we're really talking about a grid that has a very large % of renewables, we're either talking about decades in the future, or a world in which our society makes a much, much larger commitment to dealing with energy issues than it has so far. In such a world, a very large number of PHEV/EV's with relatively large batteries is extremely likely. In that case, it's reasonable to assume that we're talking about over 100 million PHEV/EV's, with batteries that can effectively hold 25KHW or more. Such batteries could power vehicles for days between charges, and provide enormous flexibility for DSM (much more than a 8 hour scenario one might consider).

There is enormous potential from creative use of PHEV/EV's, potential that we are far from understanding. I would note just one: the motors in PHEV's are extremely efficient, on the order of diesels. A fleet of PHEV's would provide backup capacity on the order of 500GW that could be sustained for days, using engines that would be as efficient and far cleaner than most diesel generators. Would we want to use such a capability often? Of course not, but it's availability would be enormously valuable.

3) it's easy to exaggerate the intermittency we need to handle: it wouldn't take much interconnectedness to take advantage of geographical dispersion of negatively correlated wind and sources.

4) solar is negatively correlated with wind, both on a daily basis and seasonally.

5) we also have the option of backup by (hopefully) largely obsolete FF generation plants, so DSM (or storage) wouldn't have to handle very long (but rare) events. The US has slightly less than 1,000GW of nameplate capacity. US average generation is about 450GW, so the overall US capacity utilization is less than 50% - that's useful for people to keep in mind: we have lots of extra generating capacity, which would provide a lot of buffer, especially from Natural Gas, which is the most flexible source. That would help make it possible to dramatically expand wind generation.

I'd love to see a really good simulation of these methods. Unfortunately, no one has seen the need, as 10-20% market penetration seemed distant. There have been analyses of the benefits of combining geographically separated wind sites: they found that variance was dramatically reduced, to the point that it seemed reasonable to describe wind as base-load.

Finally, if we insist on storage, it wouldn't cost that much. A kilowatt (nameplate) of wind costs about $2,000. It might need 4 hours of storage at $120 using lead-acid (1KW x 30% capacity factor x 4 x $100/KWH) - that's not so much.

---------
Here's an article about Google's effort to facilitate such things with in-home power monitoring (hat tip to Bob G).

Cheap solar is here!

2009-02-11T17:49:00.003-06:00

First Solar is a very large manufacturer of thin-film PV. Their panels cost $1.08/watt to make, and sell for about $2.50/W.

These numbers are reliable: First Solar provides it's KW sales volume, and revenue $ figures in it's quarterly reports, so the $2.50 figure is pretty easy to calculate. First Solar is a publicly traded company, and those numbers are from their investor communications. If the cost data isn't real, there will be some very big shareholder lawsuits and regulatory consequences.

They're the price leader, so they're under little competitive pressure. Further, they say that costs continue to fall. A sales price of roughly 2x manufacturing cost is pretty common, so I think a sales price of $2/W in the near future is a reasonable expectation. I think that could get us to $3/W for large commercial rooftop installations.

With reasonable assumptions (25 year life, 7% interest, 20% capacity factor) we get $.15/KWH which, for S CA peak retail rates, amounts to grid parity without subsidies. A milestone.

Is the Volt's battery too large/expensive?

2009-02-06T16:28:00.006-06:00

No. $10,000 for the Volt's battery has been widely reported in the media, but we shouldn't rely on mass media!

Really, no one knows how much the batteries cost. The $10K figure is purely speculation.

Here's an example, in the CS Monitor ( http://features.csmonitor.com/innovation/2009/01/22/worldwide-race-to-make-better-batteries/ ). We see that it doesn't say $10K. Here's what the article says: "the race isn't over making a Chevy Volt battery designed to run 40 miles on a single charge that could (emphasis added) cost as much as $10,000."

That indicates that the reporter doesn't have a firm source for this cost figure.

Elsewhere, the article says: "Still others say that the cost of new battery power for PHEVs may drop faster and already be lower than what has been widely reported at perhaps $500 per kilowatt-hour or even less, says Suba Arunkumar, analyst for market researcher Frost & Sullivan.

"I do expect the price will come down to perhaps as low as $200 per kilowatt-hour when mass production begins in 2010 and 2011," she says."

Tesla's cost is $400/KWH - it's very likely that GM will pay $200-$300 in volume.

The batteries won't be produced in large volumes for several years. They'll use less expensive materials than 1st Gen batteries; the larger format is much less expensive; and they'll have very, very large production volumes relative to most 1st-gen li-ion. Large production volumes reduce costs very quickly.

GM is pricing the Volt high purely to capture the early-adopter premium and the federal rebate - their official justification is that they're pricing in 100% replacement of the battery under warranty, which really isn't credible. We can expect the Volt to cost less than $30K with large volume production.

Is the battery too large?

Yes, they're only using 50% of the battery - a 50% depth of discharge (DOD) is very conservative. That means they have to use a 16 KWH battery to get an effective 8 KWH's. They could be more aggressive (and probably will be in the future), but they're very sensitive to the bad publicity that early battery failures would create.

Could they use a battery that allowed a deeper DOD?

No, there aren't any batteries on the market that are more durable as measured in charge cycles. Tesla's batteries aren't expected to last more than 400 cycles, and the Volt will do 5-10x as many.

In theory, the Volt could have a smaller battery. That would mean a shorter range, which would still accomodate many drivers. That might more perfectly optimize costs, but then it wouldn't feel like a big step forward. It wouldn't feel like a real EV, with generator backup - instead, it would feel like an incremental hybrid. Both GM (for PR) and buyers want a large, step forward, I think.

A plug-in parallel hybrid, like the plug-in Prius, connects to gas engine directly to the wheels, and avoids wasting energy in converting gasoline to electricity. Won't it get better mileage?

No, because there are more variables than RPM. People can get anywhere from 35MPG to 75MPG (or more) depending on how they drive. A big variable is the fact that the Volt can turn the engine off entirely, eliminating the waste that comes from just running when you don't need to.

Even if it were true (and it's not) would it matter? If the Prius can get 60MPG on the highway, properly driven, and the Volt only gets 50MPG, does that matter? A Prius, driven the standard 12k miles, uses 240 gallons/yr. A volt would use 48-60, depending on the MPG: that's only a 12 gallon difference.

Is wind/solar intermittency a fatal problem?

2009-02-06T15:37:00.015-06:00

No.

There are many solutions to wind & solar intermittency, each of which is very expensive if taken to an extreme, including pumped storage, CAES, or a planet girdling HVDC system. If you combine the best of each, you're likely to get a much lower cost system.

More importantly, Demand Side Management is very, very cheap, and extremely effective. It's overlooked because it's not "incented" by utility rate regulation.

220M plug-in's and EV's could provide all of the demand buffering that wind could every want. Add V2G (see here for a UK-oriented discussion), which is a bit more expensive but very practical, and you get all of the capacity you need for handling system variance on an hourly or daily basis.

All you'd need is to retain large fossil fuel plants for the 5-10% of the time when wind was calm for a week or more.

The obstacles to a renewable grid aren't technical, they're social: up to 20% of the workforce would be made obsolete. They have an enormous incentive to fight change.

Do you have references for this?

Here's a discussion by Amory Lovins's RMI: http://www.rmi.org/images/PDFs/Transportation/RMIPHEV_decouple_AESP.pdf.

On the other hand, it's very easy to analyze - no experts or peer-reviewed papers are needed.

Take 220M vehicles, with 25KWH effective capacity battery (3x that of the Volt), for a total of 5.5 Terawatt hours. Charging them using 220 volt, 30 amp connections will take about 4 hours, but create peak demand of more than the grid's current capacity, so vehicle charging would be spread out over several days, giving lots of leeway for dynamic scheduling.

If you want, say, 50% of KWH from wind then you need an average of 225 gigawatts from wind. At 30% capacity factor, that's about 750GW of nameplate capacity. An individual wind turbine can hit 100% of capacity, but a windfarm rarely goes above 85%, and a nationwide network would very rarely go above 50%, just based on the laws of large numbers (variance rises more slowly than the mean), and the fact that many windfarms would be negatively correlated to each other (one part of the country is windy, and another is calm).

That means peak wind generation might be 375GW. Night time demand might be 200GW, so we need to soak up 175GW. Our 5.5Twhr plug-in/EV fleet could draw that for 10 hours, using less than 1/3 of it's capacity.

Similar calculations apply for V2G.

Solar appears to have more short-term intermittency, which suggests that PHEV/EV buffering, with it's very fast response time, would be especially valuable for solar.

Do we face "peak water"?

2009-02-02T12:00:00.003-06:00

Probably not as long as we have plentiful electricity.

It's a very serious problem:

"A quick spin through recent headlines reveals just how badly -- and how soon -- we're going to need new supplies of freshwater: Over the past 18 months in the United States alone, the governor of Georgia declared a state of emergency due to water shortages; salmonella contaminated municipal water in Colorado; and eight states ratified the Great Lakes Basin Compact, an agreement designed to ensure that Great Lakes water, nearly 20% of the world's freshwater, won't be shipped beyond those basins -- not even to nearby Minneapolis or Pittsburgh.

Worldwide, the picture is far bleaker. Global water consumption has roughly doubled since World War II, and yet, according to the United Nations, 1.1 billion people still have no access to a clean, reliable supply. Eighty percent of disease and deaths in developing countries -- more than 2.2 million people a year, including 3,900 children each day -- are caused by diseases associated with unsanitary water. The cost of waterborne diseases and associated lost productivity drains 2% of developing countries' GDP each year."

..."In energy-rich, water-desperate countries in the Middle East and Asia, desalination already fills a vital role. Saudi Arabia currently produces about 18% of the world's desal output, and the Middle East is expected to invest $30 billion in the technology by 2015. Places such as Algeria, Dubai, Libya, and Singapore all depend on desal for drinking water. China's desal investments are expected to increase by an order of magnitude, from about $60 million to more than $600 million in the next 10 years. The worldwide market, now about $11 billion, is expected to explode to $126 billion by 2015."

..."What the world really needs is a very low cost to desalinate water. We said 10 cents per meter cubed [an 80% reduction from today's average]. But you can't think incremental innovation will get us there. You have to think breakthrough. It will take new science, new engineering, breakthrough innovation."

..." ADC has been running a pilot study, funded partly by grants from the state of California that in 2006 produced water for roughly the same price per gallon San Diego residents pay -- and using 1 kilowatt-hour less energy per 1,000 gallons than the State Water Project. The ADC project produced an average household's daily water demands using about as much energy as a PC."

http://www.fastcompany.com/magazine/132/water-water-everywhere.html?page=0%2C0

Cement that eats carbon dioxide

2009-01-08T17:16:00.008-06:00

Making the 2bn tonnes of cement used globally every year, for concrete and other things, pumps out 5% of the world's CO2 emissions - more than the entire aviation industry.

A new cement has been developed, which consumes rather than produces CO2.

http://www.guardian.co.uk/environment/2008/dec/31/cement-carbon-emissions

**11/19/10 Update

"There’s a story in Technology Review about a Halifax, Nova Scotia-based company called Carbon Sense Solutions that has found a way to make precast concrete products CO2-sucking vacuums. The interesting thing about concrete is that over hundreds of years they absorb CO2, a natural process called carbonation. The amount of absorption partially offsets the CO2 emissions that result from the calcination of limestone during the manufacture of cement, which is a key active ingredient of concrete. One problem, however, is that during the earlier stages of carbonation the outer two or three millimetres of the concrete forms a hardened crust that significantly slows down CO2 absorption. What Carbon Sense claims to have done is packed hundreds of years of carbonation into as little as one hour, using a curing process that consumes dramatically less energy than conventional heat/steam curing (see presentation here). In fact, compared to steam curing, company CEO Robert Niven says his approach — building on 40 years of research at McGill University — uses up to 44 per cent less energy and 39 per cent less water.

Now, it only works with precast concrete products — i.e. prefab tunnels, manholes, septic tanks, walls, blocks and beams. Even concrete wind-turbine towers are precast. This represents between 10 to 15 per cent of the North American concrete market, which is predominantly ready-mix (i.e. construction folks mix it and mould it on site). In some European countries, however, precast is closer to 40 per cent of the market. Given we’re talking about a $125-billion global market annually, even 10 per cent is a market worth pursuing.

Frankly, it sounds too good to be true, given the cement and concrete industry represent more than 5 per cent of global CO2 emissions and something has to be done about it. If all precast operations used Carbon Sense’s process, it would sequester as much as 20 per cent of those emissions in concrete, says Niven."

http://www.cleanbreak.ca/2008/07/24/concrete-that-sucks-co2-that-is/

And...

Call him cement man.

Back when Stanford Professor Brent Constantz was 27, he created a high-tech cement that revolutionized bone fracture repair in hospitals worldwide. People who might have died from the complications of breaking their hips lived. Fractured wrists became good as new.

Now, 22 years later, he wants to repair the world.

Constantz says he has invented a green cement that could eliminate the huge amounts of carbon dioxide spewed into the atmosphere by manufacturers of the everyday cement used in concrete for buildings, roadways and bridges.

His vision of eliminating a large source of the world's greenhouse CO2 has gained traction with both investors and environmentalists.

Already, venture capitalist Vinod Khosla is backing Constantz's company, the Calera Corp., which has a pilot factory in Moss Landing (Monterey County) churning out cement in small batches.

http://www.truth-out.org/article/green-cement-may-set-co2-fate-concrete

New developments

2008-11-23T13:17:00.006-06:00

This blog provides a reference - a FAQ. As I learn things, I add them to the individual articles, whose posting dates don't change as they are updated. People need a way to know what's new, so, they'll be here in this post. It will be at the top unless I add an entirely new post.
-------------------------------------------------
Is solar being slowed down by the current credit crunch?

Only slightly. For instance, one of the largest suppliers has cut it's 2009 forecasted growh from 75% to 58%. (posted 12/22/08)

Are-plug-ins-economically-justified?

EV technology, while more than adequate, will continue to improve. Regenerative braking eliminates one source of waste (or finds a new energy source, depending on your perspective) by capturing vehicle kinetic energy: another source is the vertical kinetic energy now lost to shock absorption, which appears to have been solved. (posted 11/23/08)

Nick's Energy FAQ

Will EVs and hybrids take off quickly? (part 2)

What should energy books convey?

Can the US raise oil production enough to make N. America oil independent?

Will developing economies get greater value from oil, and therefore out-bid the US?

Are electric vehicles fun to drive?

What kind of car should we buy?

Are we in overshoot?

What is "BAU"? Should we change it?

Is infinite exponential growth possible?

Is aviation sustainable?

Does US production follow a Hubbert's Peak model?

Is Jeremy Grantham right about Peak Everything?

Is our current monetary system sustainable?

How much do batteries cost? - part 7.

Resistance to Change: #7 in a Annoying Series

How much do batteries cost? - part 6

Why isn't trucking moving faster to electric vehicles?

Can we reduce CO2 emissions from concrete?

What if something can't compete? "viability" vs "competitiveness"

Is the average voter helpless over energy policy?

Resistance to Change - Yet More...

Do we need oil? - short form

More Resistance to Change....

Are Electric Vehicles cost effective?

Even more resistance to change

More resistance to change

Will farm equipment, like tractors & large combines, survive Peak Oil?

Climate Change denial

Does pollution reflect environmental limits?

Could we use solar power for transportation?

How quickly will we move to electric vehicles?

Will energy alternatives be too expensive? Feasibility vs Competitiveness:

Will we prevent climate change?

Are Electric Vehicles inevitable?

Why do people resist change?

Can we really transition from oil fast enough to deal with Peak Oil?

What is the real cost of electricity?

I'm back!

Are posts on hold?

Is climate change real? Part 2

Has photovoltatic solar reached grid parity?

Have EVs and plug-in hybrids reached the tipping point?

Is energy innovation slowing down?

Which is better for energy - regulation or free markets?

Volt battery costs, part 6

Will Chinese fossil fuel consumption grow? Part 3

Will Chinese oil demand grow? Part 2

Will Chinese oil demand grow?

Will oil prices stay high?

How important is the energy to manufacture vehicles?

How do we overcome resistance to change?

Does sustainability mean less complexity?

Is Climate Change real?

How expensive is the wind power needed to eliminate Chinese coal??

Volt battery costs, part 5

Would we have been better off without oil?

Could race cars go electric?

How quickly can Plug-in hybrids grow?

How's wind doing?

Can a plug-in hybrid compete on price?

How good is the new EV, the Leaf?

Volt battery costs, part 4

Is there enough wind resource to provide all of our electricity?

Should we expect climate scientists to cut their carbon footprint?

More Volt Questions...

How much electricity does the Volt use?

But would the Chevy Volt pay for itself?

Volt Battery costs, part 3

Is the Volt battery too expensive? (part 2)

Why don't we see EV's, especially in Europe?

Is solar cost competitive?

Why is talking about energy so hard?

Do Electric Vehicles cost less to maintain?

What about cultural obstacles?

Is the Limits to Growth world simulation accurate?

How quickly is wind growing?

How expensive is the wind power needed to eliminate coal??

Would dramatically reducing CO2 emissions be expensive?

Does Peak Oil mitigation hurt Climate Change?