Assessing Energy Futures 4

“Objective, neutral” Forecasts “Desired future” Backcasts

“Normative values” Scenarios Michael Totten Conservation International January 27, 2006

Vaclav Smil Chapter 3 on Against Forecasting is superb. Essential reading about forecasting energy supply and price.

1 ExaJoule=6.8 billion gallons of gasoline

Off by 714 billion gallons of gasoline

105 EJ US govt.’s Energy Independence legislation Corporate & government projections of total U.S. primary energy use from the 1970s. Forecasters clearly did not anticipate the ability of the economy to deliver energy services with less consumption, cost and risk..

Amory Lovins

1 billion gallons/day

Seattle Mayor Greg Nichols

Multiple uncertainties & uncontrollables

(forecasting)

Scenario planning is appropriate for systems in which there is a lot of uncertainty that is not controllable. In other cases optimal control, hedging, or adaptive management may be appropriate responses. G. Peterson et al., “Scenario Planning, a tool for conservation in an uncertain world,” Conservation Biology, V. 17:2, April 2003

Cloudy Crystal Ball BACKCASTING SCENARIOS reason from a desired future situation and offer a number of different strategies to reach this situation. NORMATIVE SCENARIOS take values and interests into account.

European Environment Agency

http://europa.eu.int/

Normative values Scenario Select a portfolio of market-based energy service options, policies, incentives and regulatory measures that satisfy multiple criteria for accruing myriad values and benefits, including: •

• • • • • • •

Optimizing the delivery of efficient energy services at the point of use as the key goal, rather than simply expanding [ever-larger] resource supplies [shipped over ever-longer distances] Biodiversity friendly (terrestrial, freshwater, marine) Economically affordable now, or in foreseeable future (via R&D) Risk resistant and risk-manageable – against inflation, price spikes, sudden disruptions, acts of nature or malicious attack Resilient - if the energy system fails, it fails gracefully, not catastrophically Climate, Air & Water Quality friendly Externalities and adverse impacts are minimal and capable of further reduction through innovation and best practices Experience Curves are robust - potential for significant, ongoing improvements in cost, performance, reduced footprint, etc. through ongoing R&D and cumulative learning experiences

Visualizing Planetary Overheating Humans release greenhouse gas emissions (carbon dioxide, CO2) equivalent to a Mount St. Helen volcanic eruption every other day Atmospheric CO2 concentration now 380 parts per million (ppm) and increasing 2 ppm annually

Visualizing Rapid Overheating 1100

Your children’s lifespan Your lifespan Your parents lifespan

Today

Global temperature Past rising 15 to 60 400,000 times faster than years

carb on dioxi de

methane

Your grandchildren’s lifespan

The present atmospheric CO2 concentration has not been exceeded during the past 420,000 years and likely not during the past 20 million years.

Species at risk of extinction from climate change

25 billion tons of CO2 emissions/year are lowering the ocean’s pH and acidifying the ocean, detrimental to organisms that secrete shell material made of calcium carbonate, e.g. phytoplankton and coral reefs. Scientists warn the ocean pH change will persist for millennia and acidified to a much greater extent than has occurred naturally in at least 800,000 years Royal Society UK

http://www.ipcc.ch/

Range of global energy-related and industrial CO2 emissions for the 40 SRES scenarios

Historically, gross CO2 emissions have increased at an average rate of about 1.7% per year since 1900. If that historical trend continues global emissions would double during the next three to four decades and increase more than sixfold by 2100.

1990 range

2005 GHG emissions = ~5 GtC How much in a world twice as populated and 10X the gross world product in 2100?

Stabilizing atmospheric GHG levels

Contraction & Convergence

“ . . . the logical conclusion of a rights-based approach.” IPCC Third Assessment - June 2000

HOW TO TRANSFORM MARKETS INTO CLEAN, SAFE, SECURE, SUSTAINABLE ONES?

OIL SUPPLY unSAFE, inSECURE, unSUSTAINABLE

Oil Disruption Vulnerabilities Below: Saddam Hussein's setting fire to the oil wells in Kuwait, February 1991. The black smoke plumes of more than 700 individual oil well fires are being blown to the south.

Oil tankers must run a gauntlet of narrow sealanes. About a fourth of the non-Communist world’s oil must pass through the Strait of Hormuz. The Strait connects the Persian Gulf, to the left, with the Gulf of Oman, to the right. The

NUCL EAR POW ER?

The fascination with nuclear power is due to the fact that 1 ton of uranium can displace 20,000 tons of coal

Unfortunately, uranium-generated electricity carries some intrinsic downsides that are inherently intractable: • • • • •

•

Ever-present target of nuclear facilities for military or terrorist attack; Dual civilian-military nature of a nuclear reactor; Proliferation of weapons-grade material; Diversion of uranium fuel for military or terrorist use in fabricating atomic bombs; Contaminant fuel wastes that remain radioactive for millennia; and,

Generating systems that can fail catastrophically, with disastrous human health and ecological consequences lasting for generations, and economic impacts lasting for centuries

Displacing coal use worldwide by 2100 would require constructing a 100 MW nuclear reactor every 10 hours for the entire century. It would require reprocessing weapons-grade plutonium for use in breeder reactors by 2050. This would produce 5 million kilograms of plutonium per year, equal to 500,000 atomic bombs, annually circulating in global commerce.

Terrori sm – the 21 st Century Real ity After the September 11th terrorist attack with airplanes it is a most uncertain world presenting inherently Among the many unanswerable sources electricity, What-if of questions. nuclear power creates a target with the greatest risk of major, destructive acts of terrorism and acts of aggression by national or subnational groups. If not, why President & Congress spending $1 trillion every 30 months on Military & Security?

Nuclear reactors as targets? Unlike the World Trade Center disaster, a hit on a nuclear reactor would unleash orders of magnitude greater damage both in scale and over time. Over $300 BILLION IN LOSSES.

Chernobyl s tri gger ed mal ici ou sly?

The Chernobyl accident released 100 times more radiation than the atomic bombs dropped on Hiroshima and Nagasaki. It led to the permanent evacuation of 135,000 people from an area of nearly 3,000 square dentkilometers. contaminated 31,000 square kilometers or 12,400 square m

It is estimated that 30,000 people may die prematurely of cancer induced by radiation exposure from the release

Catastr ophi c, not gracef ul fai lures

Chernobyl nuclear accident caused $200 billion losses.

Nuclear – inherently brittle power? 1000 MW reactor contains >15 billion curies (~2,000 Hiroshima A-bombs’ fallout) +heat and mechanical/chemical energy facilitating release comparable to a megaton ground burst 

Cut onsite & offsite power and the core melts



1-kT bomb 1 km away (in parked truck) melts core



Wide body jet or certain standoff attacks can release virtually the full core inventory



Seriously contaminate

Nuclear legacy – terrorist zones? A legacy of many vulnerable targets and a looming question of how many more will be added before shifting to targets that fail gracefully, not catastrophically.

$1 Trillion Costs to Decommissions Nuclear Facilities through 2050

IAEA, 2004 Annual Report www.iaea.org/

Nuclear waste shipment vulnerabilities 60 million people would be within one mile of the 100,000 truck and rail shipments proposed to ship waste to Yucca Mountain . ~ 40,000 metric tons of spent fuel discharged from U.S. commercial nuclear reactors through 1999 is currently stored at about 70 power plant sites around the nation (+2,000 tons more annually)

Nuclear waste shipment accidents? The burning railway cars that paralyzed Baltimore’s traffic and bottled up the main eastern transport and cyberartery of the United States in 2001, could have been carrying spent nuclear fuel rods. The clean-up wouldn't take weeks. It would take centuries. New Department of Energy regulations allow for rail cars to carry lethal nuclear fuel. Each of the 180 rail containers of atomic waste from Calvert

Megadamus negavitae

7% of total global GHG emissions, rising to 15% given potential expansion

Fr agmented R iver B asins

Of 227 large river basins assessed, 37% are strongly affected by fragmentation and altered flows, 23 % are moderately affected, and 40%

WRI, Ramsar, IUCN, IWMI Water Resources E Atlas, Watersheds of the World, 2003, w

Freshwater Fish Species Threatened

%

Fish species 8 times more threatened than mammals or birds in the USA

21st century Hydro Damming Threatens to Exceed Last Century’s Damming -- Mostly in Biodiversity Habitat

Hydro dams that are costly & ecologically damaging can be displaced through lower cost & lower impact Energy & Water options n lo Ya

n Ya e gtz

Jiang

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a

Jin

g an nc La

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Jian

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Yet, China has other viable options, such as four times more wind power than hydro resources, and 50% water efficiency savings through drip irrigation.

Min Jiang

Dadu He

g

200 hydro dams planned on rivers running through the biodiversity hotspots of Sichuan and Yunnan provinces.

Sh

an (Y

) ze t g

Jia

>150 MW 50 to 150 MW

ng Jia (M g)

on

ek

Amazon damming

ed dams and reservoirs in Brazil’s Amazonian

ana Brava I on Tocantins

Source: Fearnside PM. 1995. Hydroelectric dams in the Brazilian Amazon as sources of “greenhouse”

Net E mis sio ns fro m B ra zi lia n R eserv oirs comp are d with Comb ined Cycle Na tural Ga s Emissio Emissio Emissio DAM

Tucu ruí Curu áUna Balbi na

Reser voir Area (km2)

Genera ting Capacit y (MW)

24330

4240

72

40

3150

250

ns: Hydro (MtCO2eq/yr)

ns: CC Gas (MtCO2eq/yr)

5.7

8.60

2.22

3.87

1.8

0.15

0.02

7.50

12.6

6.91

0.12

57.58

Km 2 / MW

ns Ratio Hydro/ Gas

Source: Patrick McCully, Tropical Hydropower is a Significant Source of Greenhouse Gas Emissions: Interim response to the International Hydropower Association, International Rivers Network, June

DE -C ARB ONI ZE D FO SS IL FU ELS ? Coal externalities worldwide range between $160 billion and $1.2 trillion per year that are not reflected in coal-fired electricity prices

Fossil-based hydrogen future?

Abundant Coal & abundant problems Coal is massively abundant in the world, but also enormously problematic.

The potential cost for cleaning up US spoiled lands runs in the tens of billions of dollars. Still, coal companies are removing entire mountaintops to expose the coal below. The wastes are generally

In the US, more than 264,000 acres of cropland, 135,000 acres of pasture, and 128,000 acres of forest have been lost.

Super-sized SUVs Driving Disasters

U.S. Perverse Tax subsidy – 50% tax break for SUVs over 3.5 tons -- Up to $100,000 tax break!! U.S. cars average 9.3 km per liters (22 mpg), Military Hummer imitators <5 km/liters (
USA Oil Consumption patterns

Source: Transportation Energy Data Book: No. 23, DOE/ORNL-6970, Oct. 2003; and EIA Annual

The random walk of world real crude-oil price, 1881–1995

Eliminating USA Oil dependency $70 billion per year net savings and create a million net jobs in USA

“Perhaps the most rigorous...analysis of what it will take to wean us from foreign oil was tasked by the Pentagon and carried out by…Rocky Mountain Institute, a respected center of hard-headed, market-based research.… [T]he book argues persuasively that by 2035 we can be entirely independent of imported oil and that ‘it will cost less to displace all of the oil that the United States now uses than it will cost to buy that oil.’”

www.oilendgame.org/

— Robert C.McFarlane (National Security Advisor to President Reagan),

Amory Lovins

Oil-saving & Substitution Options www.oilendgame.org/ actual projected

@ $12/bb

@< $26/bb

Accrue cost- & tax-free CO2

$70 billion per year Net Savings

www.oilendgame.org/

Accelerated with Golden and Platinum Carrot Incentives

Winning the Oil Endgame – www.oilendgame.org/

High-performance policies needed

Smart Growth & Less Sprawl

Collaborations: Alliance for a New Transportation Charter, Smart Growth America, Smart Growth Network, Funders’ Network for Smart Growth & Livable Communities, Smart Communities Network, Surface Transportation Policy Project, TDM Encyclopedia

Green Buildings – ecologically sustainable, economically superior, higher occupant satisfaction

Public library – North Carolina

The Costs and Financial Benefits of Green Buildings, A Report to California’s Sustainable Building Task Force, Oct. 2003, by Greg Kats et $500 toal.$700

per m2 net present value Heinz Foundation

Oberlin College Ecology

Hig h-E Wi nd ow s di sp la ci ng pip el ine s full use of super Incidentally, windows in the U.S. could save the equivalent of an Alaskan pipeline (2 million barrels of oil per day), as well as accrue over $10 billion per year of savings on energy bills. .

Dayl ight ing coul d displ ace 100 GWs

Lighting & AC to remove heat from lights consumes half of a commercial buildings electricity. Daylighting can provide up to 100% of day-time lighting, eliminating massive amount of power plants and saving tens of billions of dollars in utility bills. Some daylight designs integrate PV solar cells.

Combined Heat & Power (CHP) 81 GW capacity in 2004 – 8% of total US generation Other Mfg 8% Metals 5%

Other Industrial 6%

Food 8%

IAL T N E T O P W 0 2 Refining 0 2 y b W M 12% r 0,000 a e l c u n + o dr y h S U l l a uals s g n i v a s t e n 0+ billion s t u c O C s 2 n o t n o i l l i m 10

Comm'l/Inst 11%

Chemicals 33%

Paper 15%

Importance of Policy drivers Since 1974, California electric use per capita has stayed flat at 7000 kWh. Mainly through building and appliance standards and utility conservation programs, saving billions of dollars. But USA electric use has grown 50%. If the USA had followed Calif. it would use 1/3 less electricity, equivalent to 10 Arctic National Wildlife Refuges, and be saving over $100 billion annually.

senfeld, Commissioner, California Energy Commission, 2002, [email protected]

Efficiency -- thwarted & ignored Could satisfy half of all new global supply, but…

Energy Assessment, Energy and the Challenge of Sustainability, UNDP, 2000]

Biodiversity-friendly climate solutions Solar & wind & perennial biomass appear most benign at large-scale over long term

Climate-useful, but Biodiversity-Unfriendly

CROPS FOR ENERGY

Semi-efficient, ambitious renewable scenario

Biofuels for US cars on no new land? TODAY & BUSINESS 30 AS million USUAL hectares soy

animal protein feed

oils

Professor Lee Lynd, Big or Little Potatoes? Role of Biomass in America’s Energy Future, Feb. 2004, http://

NEXT DECADE & 30 million hectares FUTURE switchgrass

Switchgrass 1 to 3x protein productivity + 5 to 10 x mass productivity of soybeans Cellulose animal oils hydrolyzed into protein 30 billion feed gallons ethanol

Biodiversity friendly Bioenergy? Perennial prairie grasses

Growing America’s energy future? A 2004 assessment by the National Energy Commission concluded that a vigorous effort in the USA to develop cellulosic biofuels between now and 2015 could:  Produce the first billion gallons at costs approaching those of gasoline and diesel.  Establish the capacity to produce biofuels at very competitive pump prices equivalent to Nathaniel Greene et8 al.,million Growing Energy, roughly

Growing America’s energy future? Multiple benefits would accrue:  Rural American farmers producing these fuel crops would see $5 billion of increased profits per year.  Consumers would see future pump savings of $20 billion per year on fuel costs.  Society would see CO2 emissions reduced by 6.2 Nathaniel Greene et al., Growing Energy, How Biofuels Can help end America’s oil billion tons per year, dependence,

Fuel Efficiency Impact on USA Land Requirements for Biofuel Production

Of the practically exploitable U.S.wind resources of moderate or better quality, 95% are located in the sparsely populated 12 Great Plains states, where the generation potential is three times total U.S.electricity generation at present.

Wi nd Royal ties – 2 nd source of income US Farm Revenues per hectare

Crop revenue

Govt. subsidy

non-wind farm

Wind profits

windpower farm $0

$50

$100

$150

$200

$250

windpower farm

non-wind farm

$0

$60

windpower royalty

$200

$0

farm commodity revenues

$50

$64

govt. subsidy

clear and Alternative Energy Supply Options for an Environmentally Constrained World, April 9, 2001, T

Federal electricity subsidies % Federal subsidies to nuclear, photovoltaic, solar thermal electric, and wind electricity technologies and to the industries as a whole totaled:

100 90 80 70

$200 billion between 1947 and 1999 (in 2005 dollars).

60

Nuclear received 96%, while solar power received less than 3% and wind power less than 1%.

30

50 40 20 10 0 Wind power

Renewable Energy Policy Project, www.repp.org/

PV & Solar Nuclear Thermal power Electric

PV meeting US electricity - distributed 10% efficient commercial PV systems can supply all US electricity (about 800 GW) from 2 million hectares distributed throughout the 50 states.

Larry Kazmers ki, Dispellin g the 7 Myths of Solar Electricit y, 2001, National Renewab le Energy Lab, www.nrel .gov

Where PV systems stand in the USA Source: Christy Herig, Customer-Sited Photovoltaics Focusing on Markets that Really Shine, NREL, www.nrel.gov/research/pv/cust-sited.html

Photovoltaics are cost-effective at today's prices of about $6 to $7 per watt.

Attributes of breakeven PV systems •Compensation for power at retail electric rates •Tax credits •Financing, leasing, and depreciation options •Net-metering options and/or rate-based incentives •Building credits for architectural applications •Willingness to pay for clean power and innovation

PVs are cost-effective at $6 to $7

Economics of Commercial BIPV

Reference costs of facade-cladding mate

Eiffert, P., Guidelines for the Economic Evaluation of Building-Integrated Photovoltaic Power Systems, International Energy Agency PVPS Task 7: Photovoltaic Power Systems in the Built Environment, Jan. 2003,

Economics of Commercial BIPV Net Present Values, Benefit-Cost Ratios and Payback Periods for ‘Architectural’ BIPV (Thin Film, Wall-Mounted PV) in Beijing and Shanghai a 15% Materi (assuming Econo Investment Tax Credit) Shang al mic Beijing hai Replac Measur ed e NPV +$18,5 +$14,2 Polish ($) BCR 86 37 ed 2.33 2.14

Stone

PBP

1

1

PBP

2

2

NPV +$15,3 +$11,0 (yrs) 73 24 Alumin ($) BCR 1.89 1.70 um SunSlate BuildingIntegrated Photovoltaics (BIPV)

(yrs)

Byrne et al, Economics of Building Integrated PV in China, July 2001, Univ. of Delaware, Center for Energy and Environmental

Electricity Potential from BIPV

Stefan Nowak, The IEA PVPS Programme – into the second decade of International Co-operation

Using LCD manufacturing techniques Solar PV electricity at 3 to 5 cents/kWh

Key to achieving competitive PV systems (i.e., $1 per Watt fully installed) is to use a similar cluster production model used so successfully in achieving breakthrough cost reductions and extraordinary productivity gains in Liquid Crystal Display (LCD) manufacturing. The result would make PV systems a highly competitive electricity choice. “At the price of $1.00 per peak watt for a complete and installed system, the payback time in states like California is under 5 years. Therefore, we expect the demand for solar energy systems Marvin S. Keshner and RajivaArya, Potential Reductions Resulting Super-Large-Scale to explode…. With 30 Study yearoflifetime, assuming 6% from interest, a

Manufacturing of PV Modules, National Renewable Energy Lab Report NREL/SR-520-36846, October

12 mi llion hectar es of 10% ef f. PV systems coul d supply US total energy needs – fuel s and el ectri ci ty

A concept called a solution space was used as part of the citiesPLUS process to identify the pathway to reach each sustainability target.

Forging a Sustainable Energy System in Greater Vancouver: Suggested Approach and Preliminary Policy Directions for the GVRD (July 2003), prepared by Sheltair Group, 2003, www.citiesplus.ca/