Key Issues in US/World Energy
Dance to the Revolution 2013-02-04
I attended several interesting energy conferences in the past week, including Energy Innovation 2013 and a two-day private meeting at Brookings (which is why I can’t make references as to who made which remarks). Here’s a run down of the key issues discussed in these conferences. Do you agree or disagree with some of these points? And how do you see the future of world’s energy?
Natural Gas Vs. Renewables
Arguments for natural gas:
- Yes, solar panel price is down, but there is still balance of system cost. High penetration of wind and solar is not a trivial issue, because someone would have to bear the cost of natural gas power running at 15% capacity. Now every 4 GW of wind needs 3 GW of natural gas to balance it.
- Natural gas buys us time to solve renewables’ intermittency problem.
- Natural gas is the killer app for coal in US and many other countries. Gas infrastructure is least capital intensive. Less sunk cost and easy demand response.
- Think about cost not just as the cost of technology, but the total cost of deployment. Even though the solar panel price is down, the “soft cost” isn’t in the US. Cost of installation is $2-2.60/watt in Germany, and twice as much in US.
Arguments for renewables against natural gas:
- Instead of looking at solar as energy source, think about it as part of an integrated system with demand response EV.
- Water use in energy is second largest water usage behind agriculture. And fossil fuel is heavy in water use whereas renewables use none.
- US can’t back renewables with subsidies like Germany did with solar. It’s not sustainable. All subsidies, fossil fuel and renewables, should be eliminated in US.
- PTC now is promiscuous and funds any wind project. It has to do more in innovation, and be allocated in smart and advanced projects such as combined wind and storage.
- Until the public are more educated on radiation and nuclear, we won’t go far in the area. However, Nuclear Regulatory Commission’s responsibility is public safety, not advocacy, not to inform and educate the public.
Innovation and the Way Forward
- US and Europe are irrelevant to future energy demand growth, which would happen in developing countries like China, India, South America. And innovation comes out of growth — China’s CNOOC has $15 billion in energy innovation budget.
- We must harness the best system we know of, capitalism, to deal with emissions. Put a price on carbon and give businesses the profit motive.
- We need to bear in mind that we are solving a global problem, so we need scaleable, global solutions and bipartisan agreement.
- We need to note how risk-averse US has become.
- We don’t have time, yes, but the question is how to get to zero-carbon. We need a cure, not just to slow down the symptom.
- We must remember that more than 1.4 billion people worldwide have no access to electricity, and 1 billion more only have intermittent access. Energy access is life saving. Average lifespan for people without electricity is more than 30 years shorter than the rest of us.
- Despite trends in population growth and urbanization, energy access will continue to require a combination of on grid, mini-grid and off-grid solutions.
- Don’t overlook the transaction cost for energy access, e.g. in India, it takes 7 years to get permission and licensing from all relevant agencies for a small hydropower.
- The key to sustainable energy access is not the technology. It is critical to establish sustainable institutions with the management capacity, sound revenue-collecting systems, good business practices. Advanced metering is not the only solution, we must engage with the community, finding people who are trainable. Community participation is the KEY to success.
- Here when we discuss eliminate subsidies for fossil fuel, we must remember lots of these countries lack the social safety net, and see the natural resource reality of that country.