What the future of our energy system will look like continues to be a subject of heated debate. According to one well-established tradition, writes Professor John Mathews of Macquarie University in Australia, the route to decarbonisation will run via massive nuclear power systems to the hydrogen economy. But China and to some extent India are emerging as the principal practitioners of an alternative vision of energy growth, underpinning their vast industrialisation efforts with conventional renewables that are the products of manufacturing. According to Mathews, the world is much more likely to follow the second route. Renewables, he argues, are benign, provide energy security, create jobs and above all are the least expensive option.



How we envision the future of our energy systems is important as this tends to drive our policies and decisions. In a new scientific paper, “Competing principles driving energy futures: Fossil fuel decarbonisation vs. manufacturing learning curves”, published this month in the journal Futures, I contrast two broad energy visions.

Both are based on an argument concerning the phasing out of fossil fuels. One envisions a process of decarbonisation that evolves towards a centralised energy system based mainly on hydrogen, which includes large-scale ‘zero emission power plants” (ZEPPs), to be reached through the route of a massive expansion of nuclear power. The other, alternative vision is based on the expansion of decentralised renewable energies systems, such as wind and solar power, which are products of manufacturing and which embody increasing returns and decreasing costs. In this alternative vision, decarbonisation is not the primary driver but instead the side effect of a process of creative destruction of fossil fuels by lower-cost renewables.

The IIASA view of decarbonisation

The first “centralised” vision was developed by scholars who in the past were associated with the International Institute for Applied Systems Analysis (IIASA), an East-West research centre based in Laxenburg near Vienna founded jointly by the US and Soviet Academies of Science. It was first developed by the visionary physicist Cesare Marchetti when working at IIASA in the 1970s. It displays a marked techno-bias towards giga-scale nuclear power and the hydrogen economy as well as a marked disdain for present trends towards solar, wind and renewables generally.

The fact is that there is no relentless process of fossil fuel decarbonisation, leading inevitably to a hydrogen economy

Marchetti developed a ‘master-concept’ of decarbonisation as the driver of energy transitions, culminating in an article published in Futures in 1986, where he outlined his idea of a 50-year pulse underlying transitions in technology in energy, power and transport systems. Marchetti viewed energy transitions as moving ineluctably from one fuel source to another with continually lower carbon: hydrogen ratio: the sequence goes from wood (with a C:H ratio of 10:1, to coal, with a ratio of 1:1, to oil, with ratio of 1:2 and then natural gas (mostly methane, or CH 4 ), with a consequent ratio of 1:4. The sequence culminates in hydrogen, where there is no carbon at all.

This was surely an elegant idea, and it seemed to be based on an observable gradual decline in global carbon intensity in the real world, as shown in this figure:

Fig. 1. Declining global carbon intensity, 1860-1990

Source: Ausubel 1996, after Marchetti 1985

The problem is that this trend has recently reversed or at least stalled.

There has been no secular decline in global carbon intensity in the last two decades, as can be seen in this chart from the International Energy Agency (IEA):

Fig. 2. Global carbon intensity, 1990-2010

Source: International Energy Agency (2013), Tracking Clean Energy Progress 2013, OECD/IEA, Paris. 6DS: a trajectory assumed to result in temperature increase of 6 degrees C; 4DS a trajectory corresponding to 4 degrees C; and 2 DS corresponding to 2 degrees C.

The fact is that there is no relentless process of fossil fuel decarbonisation, leading inevitably to a hydrogen economy, and there is no clockwork mechanism, as Marchetti believed, driving substitution of energy sources one after another in a sequence leading from highly carbonised to the least carbonised source.

Marchetti’s notion of a relentless process of fossil fuel decarbonisation was a clever depiction of the way things stood in the world by the 1970s – but shocks like the oil shock of the 1970s (OPEC in 1973 and Iran in 1979), and the ‘China shock’ of rapid industrialisation utilising coal in the 2000s, and now the ‘India shock’ following perhaps a decade behind – not to mention the American coal seam gas ‘shock’ and the (small) inducements towards energy efficiency and renewables provoked by the ‘climate shock’ have all played their part in destroying the statistical regularity of the system.

Zero Emission Giga-Power Plants

Resting on the false foundations of a purported ‘decarbonisation’ driving the energy system towards nuclear and hydrogen, scholars in the IIASA tradition then make their own techno-optimistic proposals for giga-scale power plants (zero emission power plants, or ZEPPs) and their Continental Super Grids (CSGs) that (it is argued) are the only options that are consistent with these (non-existing) trends.

If we take China for example, we see that wind power in that country already exceeded the contribution of nuclear in terms of capacity by 2009 and in terms of electric energy generated by 2012

Marchetti envisioned the creation of giga-scale ‘energy islands’ which would be producers of nuclear power and nuclear-power-based hydrogen, standing apart from the wider industrial system, feeding their massive contribution to a global grid. All of this is very interesting – but quite irrelevant to the energy choices having to be made by countries today. Continental Super Grids (CSG) fed by dozens or so enormous ZEPPs seem an extremely unlikely pathway of energy evolution at a time when Google in the US cannot even negotiate a connection and transmission across the country for its proposed Atlantic Wind Connection. What is rarely canvassed in these discussions of a possible nuclear giga-future is the counter tendency towards smaller, modular nuclear reactors, which may be simpler, safer and cheaper than their giga-scale competitors. Bigger is not always better.

The validity of conventional renewables

The proponents of a centralised view in the IIASA tradition are quite disdainful of conventional renewable energy, especially solar and wind power. They tend to ignore hydropower altogether, as it does not fit into their scheme, although some countries, like Norway and Brazil, have largely built their electricity systems on it.

Wind power they disregard on the basis of its low power density and its supposed impossible demand on land areas. But if we take China for example, we see that wind power in that country already exceeded the contribution of nuclear in terms of capacity by 2009 and in terms of electric energy generated by 2012, as shown in Fig. 3.

Fig. 3 Electricity generation: Wind power vs. nuclear in China

Source: Mathews and Tan (2015). Primary data up to 2007 for wind power capacity and generation is available from the BP Statistical Review of World Energy 2014; data for the years 2008-2014 is available from the China Electricity Council; data for nuclear power capacity up to 2007 is from the EIA International Energy Statistics database.

Wind power is also frequently criticised for making excessive resource demands, but, as I show in another paper (Mathews and Tan, 2014), 1 TW of wind power, equivalent to the entire US electric generating system, requires 29 million tonnes of iron, 90 million tonnes of steel and 350 million tonnes of concrete. In China alone, the year 2012 saw the country’s industry producing 709 million tonnes of crude steel and 654 million tonnes of pig iron. So materials supply is not the issue.

The IIASA case against solar is built on equally flimsy foundations, e.g. assuming that solar panels “remain stuck at about 10% efficiency”, which is simply untrue. In Italy the Montalto di Castro solar PV power farm has been completed, covering 1.7 km2 with panels rated at 84 MW, and generating 140 GWh of electricity in a year. This is a real capacity factor of 19%. If we take these data and scale this up to the 1 TW of the entire US power system, we would need a land area of 20,000 km2 – or just over 0.2% of the US land area of 9.6 million km2.

An alternative vision of our energy future

Let me develop the real reasons why conventional renewables are likely to emerge as the dominant primary energy sources in the first half of the 21st century. The fundamental advantages of renewables, as revealed by practical experience in China as well as in industrialised countries like Germany where an energy transformation is well under way, are these.

As they scale renewable energies do not present greater and greater hazards. Instead they are relatively benign technologies, without serious risk

They are clean (low to zero-carbon); they are non-polluting (important in China and India with their high levels of particulate pollution derived from coal); they tap into inexhaustible energy sources; and they have close-to-zero running costs since they do not need fuel. They are also diffuse, which should be viewed as an advantage, since this means that renewable sources are decentralised, and can be harvested by both large and by small operations. So they are eminently practicable.

Some advantages of renewables are not at all obvious and need to be made explicit. Fundamentally, they are scalable. They can be built in modular fashion – one solar panel, 100 solar panels, 1000 solar panels. As they are replicated in this fashion so their power ratings continue to rise, without complexity cutting back on efficiency. This cannot be said of nuclear reactors, which have an optimal operational size – below which or above which the plant under-performs.

Moreover as they scale they do not present greater and greater hazards. Instead they are relatively benign technologies, without serious risks. When they use hazardous materials, such as the cadmium in Cd-Te solar, the solution would be to recycle materials in order to minimise the use and waste of virgin materials.

Most importantly, the superiority of conventional renewables lies in their cost reduction trends which are linked to the fact that they are always the products of manufacturing – and mass production manufacturing, where economies of scale really play a role. This means that they offer genuine energy security in so far as manufacturing can in principle be conducted anywhere. There are no geopolitical pressures stemming from accidents of chance where one country has deposits of a fossil fuel but another does not. Manufactured devices promise an end to the era in which energy security remains closely tied to geopolitics and the projection of armed force. As Hao Tan and I put it in our article published in Nature, manufacturing renewables provides the key to energy security.

Manufacturing is characterised by improving efficiencies as experience is accumulated – with consequent cost reductions captured in the learning or experience curve. Manufacturing generates increasing returns; it can be a source of rising incomes and wealth without imposing further stresses on the earth. Add to these advantages that renewables promise economic advantages of the first importance: they offer rural employment as well as urban employment in manufacturing industry; they offer an innovative and competitive energy sector; and they offer export platforms for the future.

The real driver of the renewable energy revolution is not government policy, or business risk-taking, or consumer demand. It is, quite simply, the reduction of costs

This is to list the advantages of renewables without even mentioning their low and diminishing carbon emissions. Indeed they offer the only real long-term solution to the problem of cleaning up energy systems.

With all these advantages, it is little wonder that China and now India are throwing so much effort into building renewable energy systems at scale. These are not exercises undertaken for ethical or aesthetic purposes, but as national development strategies of the highest priority.

So the real driver of the renewable energy revolution is not government policy, or business risk-taking, or consumer demand. It is, quite simply, the reduction of costs – to the point where renewables are bringing down costs of generating power to be comparable with the use of traditional fossil fuels, and with the promise of reducing these costs further still. Supergrids are also being promoted for renewables, but these are very different conceptions, based on integrating numerous fluctuating sources in IT-empowered grids, offering the same practicable, scalable and replicable energy future.

Against these advantages, the obstacles regularly cited are small indeed. There is the fluctuating nature of renewables, which can be addressed by various forms of systems integration (smart grids, demand response) and of course through energy storage, which is moving into the same kind of cost reduction learning curve that has characterised solar and wind power, promising rapid diffusion of both commercial and domestic energy storage units. With rapidly falling costs of storage providing the buffer that can even out fluctuating levels of generation, there is no further serious argument against renewables.

I conclude that of the two competing principles, the one based on decarbonisation and giga-scale nuclear plants producing hydrogen is destined to remain a fantasy, while the other based on renewables and the manufacturing of renewables devices, with their declining costs, is destined to power the further industrialisation of emerging giants like China and India. Donald Trump will discover this if he delivers on his campaign promise of a 100% pro-fossil fuels course and negates a renewables future.

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This article is based on a scientific paper by John A. Mathews, Competing principles driving energy futures: Fossil fuel decarbonization vs. manufacturing learning curves, which was published in Futures in November 2016 (.http://www.sciencedirect.com/science/article/pii/S0016328715300227)

John Mathews is author of the Greening of Capitalism: How Asia is Driving the Next Great Transformation”, published by Stanford University Press: http://www.sup.org/books/title/?id=24288. His latest book, “China’s Renewable Energy Revolution” (co-authored with Hao Tan) was published by Palgrave Pivot in September 2015: http://www.palgrave.com/page/detail/chinas-energy-revolution-john-a-mathews/?isb=9781137546241.

See his author’s archive on Energy Post.

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