A mini-series on the future of energy
By Dave Wilkin, P. Eng., M.Eng. and Tim Lutton, BSc., MBA
Our previous articles demonstrated the challenges in reducing carbon and particulate emissions in the face of high population and economic growth, and the geopolitics of uneven distribution of reserves. Now we examine the technologies vying for a role in our energy future.
First, wind and solar energy combined provide about two per cent of global energy. Yet due to their nature, they are unable to produce a steady supply of energy, and their output therefore varies dramatically—between ten per cent and 30 per cent, depending on local climate, with extended periods when no energy is produced at all. The missing 70–90 per cent of energy must come from other sources, such as natural gas plants running on stand-by, or extremely expensive energy-storage systems, including battery storage or pumped hydro-power. This also requires very costly expansion/retrofit of the power-grid to balance the uneven energy load, as the grid wasn’t built with variable energy supply or highly distributed, unreliable sources of energy in mind. Today, wind/solar doesn’t replace any power generation facilities, and its share of the energy grid share can exceed approximately 25 per cent when power imports from neighbouring jurisdictions/countries supply the missing power when needed, as Germany and Denmark have recently discovered.
Most of the cost reductions typical for new technologies have already occurred (over 80 per cent so far for solar), so don’t expect significant future declines in cost for many greener technologies. Dave estimated the capital costs to replace all Canadian carbon-based energy with wind/solar at $5 trillion. Globally, it would likely exceed $100 trillion. Sadly, media reporting and environmental activists mislead policymakers and the general public about these economic limitations. They also downplay the environmental and community impacts. One German study found that to replace all carbon-energy with wind power required their entire country to be covered in huge windmills, spaced every mile. Notably, solar and battery-storage component manufacturing is rare-earth resource intensive (China has 85 per cent global production and 70 per cent of reserves) and with battery life hovering under ten years, a growing toxic-waste issue is very real.
Hydro-electric power remains at the heart of Canada’s electricity supply, suppling over 60 per cent of our electricity (>90 per cent in Quebec/BC) and an 18 per cent energy share. Globally it meets approximately seven per cent of the energy demand. Building large hydro projects today can be exceedingly expensive, as Newfoundland’s Muskrat Falls project unfortunately discovered, where the total project cost will exceed $13 Billion. This is five times more than equivalent-sized gas-powered plants. Also, building these hydro projects causes damaging methane gas to be released from flooded areas behind dams. Globally, there are few good sites left to exploit, so growth is limited.
Nuclear fission generates four per cent of all global energy today. On the upside, over 200 years of uranium reserves exist for nuclear fission purposes. On the other hand, nuclear fission plants have higher capital costs, require costly waste disposal, and carry some nuclear proliferation risks. However, it remains the only proven grid-scale, zero-emissions, option left. A range of new reactor designs are coming that should lower up-front capital costs (and shorten project delivery times). Today, nuclear plant operating costs are among the lowest of any plants. Sadly, high capital costs, a past few nasty accidents and heavy anti-nuclear lobbying continues to hamper the sector, so most countries are not investing (notable exceptions are China, South Korea and France). Worse yet, 65 per cent of nuclear plants in service today face retirement over the next two decades. That lost energy supply will almost certainly be replaced with carbon-based energy, as Germany discovered the hard way. We see nuclear-fission power playing a key, though capped, future role. We note that nuclear fusion still faces significant engineering challenges and thus remains a distant future hope.
Biofuels/biomass have a similar energy share as wind and solar. They burn cleaner than coal or oil, but not as clean as natural gas/propane. They also carry other environmental and ecosystem impacts, including land use changes/deforestation, and the generation of pollution during production. Hydrogen energy is insignificant today and is really an energy storage/transport mechanism, not a true energy source. It’s very volatile and lacks storage and distribution networks. As for geothermal power, it’s economically and technically viable only in those rare locations where near-surface geothermal activity exists, such as Iceland and Hawaii. None of these energy sources are likely to be a major future player.
Carbon Capture and Storage (CCS) can remove up to 90 per cent of CO2 emissions from power plants, but it’s relatively expensive when high CO2 transportation and storage costs are included. As it does not address depletion of carbon-energy reserves, it remains a transition option. This is particularly important in Asia, where coal still supplies over 50 per cent of their energy requirements.
Key to know is that just 16 per cent of all global energy is delivered through the electric grid, but most future greener energy will be delivered that way. Therefore, the power grid must be significantly expanded, made more intelligent and resilient for a more vulnerable 21st century world, which faces increasing cyberattacks and potentially more extreme weather events.
The Bottom-line: No ‘silver bullet’ replaces today’s 85 per cent global carbon-based energy market, meaning future energy will come from many sources. Let’s be clear, future energy costs are increasing greatly. The era of cheap energy is ending.
Our next article portrays a bad future scenario, demonstrating how the main system pieces interact, with potentially devastating consequences. Watch for it!
Dave Wilkin is a Professional Engineer who lives in Huntsville. He is an electrical engineer with a career spanning 35 years in IT, banking and consulting.
Tim Lutton worked in the natural gas and LNG industry for 32 years; with Imperial Oil in Canada, and ExxonMobil in the USA, Australia and Qatar and now lives in Huntsville.
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