A Planet of Humans using Coal, Gas and Renewables – Recent 10-year history

You probably noticed a flurry of anti-renewable energy media out there lately.  Movies, blogs and streams of articles from documentarians and old timers from the energy industry. The common thread seems to be that renewable energy is a left-wing fantasy vacation and can’t be taken seriously. “They don’t work, they use too much energy to build and they cost too much”, or words to that effect.  “Supporting historic ways of providing energy is the only answer for a thinking person”, would be the common theme.  

 However, on the other side of the coin, the latest IEA forecast (November 2019) acknowledge the role of renewables and concede that electrification of transport is likely.  Investment in solar and wind is forecast to continue to grow and has tipped over $1.5 Trillion in the 2010 to 2020 period. 

 Are these forecasts wrong? Have investors and policy makers been blinded by global warming alarmists and bending to their pressure? The anti-renewable lobby would say ‘yes’.

 So, what is the truth? Are solar panels and batteries technically viable? What is the math driving the economics? Can we rely on renewable energy for electricity or is it just wishful thinking?

 Consider the following:  

 Going back 10 years

 In 2009, I was asked to join a think-tank exercise at the Aspen Institute to help define the transition from coal to renewable energy and the role natural gas would play in that transition.  It was one of many across the US at the time. The Obama administration wanted input and they got it.

 This think-tank included representatives from large US utilities, oil companies, the DOE and several other government entities. I was the lone Canadian. It culminated in a classified white paper addressed to the President that likely had a role to play in broader USDOE energy policy and shaped the essential first steps to decarbonizing the electricity grid by 2040. 

 To summarize the thinking at that time, here are five primary observations driving the recommendations:

1.    Making electricity from coal means 70% of the energy is wasted and is the worst power generation technology for local pollution.  

 2.    Gas turbines can turn down rapidly as renewable energy surges. Coal power, on the other hand, is intolerant to such fluctuations and will “crowd-out” renewable energy. It also requires hydro storage or inter-tie agreements to dump excess power during night-time periods.

 3.    By 2009, natural gas was about to have a massive boost in production.  Fracking and recovery technology had many breakthroughs and Qatar and Russia were flooding Asia. A similar flood of gas was about to hit the North America market.

 4.    Carbon emissions from gas and cogeneration is approximately half that of coal.  Converting to gas could almost single-handedly deliver on carbon reduction targets.

 5.    if gas replaced coal generation, the oil and gas industry would contribute royalties to government coffers; as there are no coal royalties. 

 With these issues considered, the recommendations to the USDOE and the Obama Administration were:

 1.    Close aging coal plants as soon as possible;

 2.    Enable regulatory support to build gas-fired combined cycle, district energy and cogeneration plants; and

 3.     Put in place stimulus, primarily through placing a price on carbon, for wind and solar power generation. 

 The recommendations, consistent with those from other sources, were accepted as a foundational part of the US energy policy. And they were implemented by most regulatory entities across the US.  

 The results were rapid and meaningful. 289 coal plants have closed since 2010, including 50 since the Trump administration took power. 51 more are planned to close in the next few years. This meant coal-based electricity has been cut in half; about 800 million MWhs in total. In round numbers, this reduction was replaced with about 2/3rds by gas-fired generation and 1/3rd by wind and solar. Gas really did enable more wind and solar as a replacement of coal and covered for the fluctuations quite nicely.  

 It also created a death blow to sulphur dioxide (SO2) and nitrous oxides (NOx) in the air. By the end of the decade, these two killers were down to 10% of their glory days of late 1990s. (See graph above).

 This occurred to even greater degrees in Europe and Asia, and by 2020 the really big prize was delivered. 

 This volume of turbines and panels deployed between 2010 and 2020 allowed wind and solar to attain substantial ‘economies-of-scale’. This meant wind and solar are now on par with gas technology and cheaper than coal.  This now means every electricity grid can add gas, wind and solar to completely replace coal without increasing consumer pricing. This is the holy grail of renewable energy advocacy – to seek ‘on par’ economics with fossil fuel.  Carbon pricing has completed its initial job and created new norms and competitive prices.

 Contrary to renewable energy critics, the growth in solar and wind is now running at an incredible compounded annual growth rate (CAGR) of 40%. Mega-projects are appearing, such as a recent solar PV plant in India, Shakti Sthala, that generates enough power for 3 million residents and the planned 6,000 MW Hornsea off-shore wind farm in the UK; enough to single-handedly supply the peak demand of the country of Scotland.

 So, what is the underlying genius of this? The critics said it can’t be done. Here’s the answer:

 1.    A solar panel will produce 22 times more electricity than it uses in fuel to make one. A coal plant uses 4 times more fuel than the useful electricity it creates; 75% of the energy is rejected into cooling ponds.  22:1 versus 1:4.  What this means is, in round terms, solar is roughly 88 times more ‘fuel efficient’, over its life, than coal. (A wind turbine produces roughly the same ratio; between 20 and 25 times more energy than it took to manufacture one.)

 2.    In the US, open-cycle gas turbines represent 28% of the installed capacity and often run to provide air conditioning at peak times. Air conditioning consumes about 30% of all electricity in the USA and is used in 87% of homes. If you assume that corelates perfectly to when the sun shines, the US alone could build 300,000 MW (30% of 1 Billion MWs of current capacity) of solar without needing a gas turbine to back it up.  This would indicate the demand for solar is 20 times what exists so far and when deployed, would re-purpose the current 270,000 MW of peaking capacity to back-up wind. Throw in a cabinet of batteries with every solar installation and that would double the market potential and provide solar for evening peak use.  

 3.    In grids with substantial hydro systems attached, where solar offsets air-conditioning and where wind can be stored in the form of water behind dams, 100% renewable grids are entirely possible. Even Canada, a cold climate, could become 100% renewable in this scenario. The hydro capacity in BC, Alberta, Manitoba, Ontario and Quebec could displace all of the coal in neighbouring provinces by reworking transmission grids. Virtually all locations in the world where hydro is greater than 50% of the supply could contemplate a 100% renewable grid. 

 4.    Wind, solar and batteries, such as those applied in South Australia, could mean 100% renewable energy is possible in any warm weather geography. This is about half of the US and also about half the world population.

 5.    EVs can reside in every home. Two EVs charging at night is about the same as an average household demand during the day. In broad terms, solar, hydro, wind and batteries can run the day and hydro and wind fill cars and (a bit of other stuff) at night.  

 6.    Cold climates also have nuclear, cogeneration and district energy for large industry and central heating. 

 The sum total of this means more than half the world population could follow South Australia’s example and be 100% renewable and about 50% of the population could be about 75% renewable with gas playing a support role.  This would decarbonize the electricity grid, world-wide, to be over 85% carbon-free.

 Yes, this is heaps of silicon and heaps of lithium and other metals. New mining areas will need to open. Resources will be critical to develop for sure. But with electrification from solar, wind and batteries being ‘88 times more fuel efficient’, we can be confident the replacement mines of silicon, lithium or cobalt, are far less in number than the coal mines, copper mines, cement plants, foundries, aluminium plants, etc. to make the energy that is 70% wasted.  

Based on the US experience of cutting coal in half in 10 years, it is entirely possible to see the remaining US conversion to be completed in the next decade.  A world with 80% less carbon for electricity by 2040? Seems quite possible if policies continue to support the original thesis.

 At this point, the world would have essentially reinvented itself and somebody will be ready to get in front of that parade.  Rewiring the world should be a major economic boom for those who don’t mind applying capitalism to cleaning up the planet.