2025 Economic Developments in China and India, and the Future of American Solar and Wind

Brian Wang has a very interesting post based on economic projections by Rio Tinto, the international mining outfit. Rio Tinto clearly wants to know about future metal demands in the global economy. Of course this is important for Rio Tinto to know since it takes both time and a lot of capital to develop a new mine, and an accurate future projections is a way to control investment risks. Rio Tinto's projections are most interesting because they foresee the most significant driving force in the world economy as the development of China. The development of India will be a second major world economic driver. The Rio Tinto projection focuses on the next 15 years, and foresees rapid advances for both Chinese and Indian economies, with dramatic increases in personal income and standards of living. From Rio Tinto's perspective, the most important aspect of this picture is the demand for metals, and Rio Tinto for sees dramatic increases in Chinese and Indian demand for copper, and by implication for iron (steel) and aluminum.

While it would be fascinating to speculate on the consequences of these developments on the peoples of China and the United States who will by 2025 find themselves in the middle of an energy crisis, brought on by a decline in the world supply of petroleum, and the certainty of Anthropogenic Global Warming. I am assuming that by 2025 reality will have caught up with the most confirmed AGW skeptic. What I am interested in is how the economic development of China and India will impact the American efforts to deal with this dual energy crisis.

The Rio Tinto model suggests that Asian demand for the raw materials for developed societies, such as copper, steel, aluminum and cement would increase, and by implication there will be a steady increase in the price of these commodities. It will be plausible then the price in American dollars for copper, steel, aluminum and cement will be much higher than it is now, and that the ability of the United States to compete for these commodities on the international market will be seriously compromised by the large American international debt, especially the debt to China.

The competitive disadvantage of the United States will adversely effect many of its options in dealing with the dual energy crisis, because the raw materials for building new energy producing resources will be subject to increasingly onerous dollar inflation of materials costs. These developments will preclude energy approaches that will require high levels materials inputs, and will favor energy sources that will use lower cost materials, or smaller material inputs. These factors would tend to favor nuclear energy over renewables for both obvious and hidden reasons. The obvious reason is that nuclear requires far less copper, steel, aluminum and cement by the kW of generating capacity than Wind and Solar generating facilities do. We can infer from Barry Brook's discussion in the previous link, that the material requirements for a large renewables development in the United States would make such a development unsustainable.

Renewable advocates seldom talk about costs, that is advocates with the exception of Ed Ring. Prior to the 2008 vote on California Proposition 7, which mandated that by 2025 50% of California power be produced by renewables. Ring observed:

There is nothing wrong with encouraging clean, renewable, domestically produced energy. But California’s proposition 7 “would, if approved, require California utilities to procure half of their power from renewable resources by 2025" . . .

since Californians by 2025 are going to be consuming about 1,000 gigawatt-hours per day, if proposition 7 is enacted, 500 gWh per day will have to come from wind and solar power.

Solar power, installed – not including transmission or storage infrastructure – costs about $7.0 million per megawatt of output; this equates to $7.0 billion per gigawatt. If this sounds expensive, it is, but to get a truly accurate price you have to also take into account yield. Even in sunny California, solar energy (in terms of full-sun-equivalent hours), can only be harvested on average for 4.5 hours per day, which means to get 500 gWh of solar generated electricity each day in California, you would need to install 111 gigawatts of solar arrays (500/4.5), which would cost $777 billion dollars.

Wind power, installed – is a better deal currently than solar – insofar as you can probably get costs down to around $2.5 million per megawatt of output, or $2.5 billion per gigawatt. But the yield figures are also not promising. In California there is widespread disagreement on the yield for wind power – credible estimates range from 10% (2.4 hours per day) to 25% (6.0 hours per day). Given the magnitude of what is being proposed, it would be prudent to project wind yields in California somewhere in the middle of this range, say 17.5%, or 4.2 hours per day. This means to get 500 gWh of wind generated electricity in California you would need to install 119 gigawatts of solar arrays (55/4.2), which would cost $297 billion dollars.

Ring added,

It is tempting, and not entirely implausible, to expect prices for solar power to drop significantly over the next several years. But given the cost of balance of plant and installation labor, it is unlikely solar electricity is going to get measurably cheaper than wind power no matter how inexpensive the actual collector materials become. Moreover, the costs for new transmission lines and grid upgrades, the costs for massive energy storage units (since the sun and wind are only producing power during small portions of the day), and the costs for land aquisition, permitting and fighting environmentalist lawsuits will be substantial. For these reasons, estimating the total cost for California to deliver 50% renewable electricity at $300 billion is probably the very best case, if not fantastically optimistic. This is $20 billion per year for the next 15 years. Readers are encouraged to critique these projections.

Ring, did not include the costr of materials inflations in his estimate of costs.

A second serious materials problem for the development of renewables is materials requirements for electrical transmissions systems necessitated by the remote locations and the necessity of generation backup associated with a renewable dominated grid. Electrical Engineer E.G. Preston, who "by profession" does

transmission studies for wind and solar clients.

Preston, who has a PhD in Electrical Engineering, has an very impressive resume, clearly qualifies as an expert on renewables transmission, that is someone who would be accepted as an expert witness in court cases involving renewable related electrical transmission. In addition Preston does not have an ax to grind. Thus what he has to say about renewables transmission systems deserves serious attention. commenting on the recent Jacobson-Delucchi Scientific American article, A path to sustainable energy by 2030", Preston states:

Because the wind and solar and water and geothermal projects are not in the locations of the existing power plants, new lines will be needed. Looking at the graph on page 63, and carefully measuring scales on the graph, I estimate that there is 40,000 MW of wind and 40,000 MW of centralized solar on that graph. . . That leaves us needing 80,000 MW of new wind solar and geothermal generation just to serve California. I think an estimate of 500 miles from wind and solar resources to major load centers is reasonable. A 500 kV transmission line is rated at about 2000 MW max power. But you don't want to operate it at that power level because the losses are too high and there is no reserve capacity in the line to handle the first contingency problem. Therefore I will estimate we will load the new 500 kV lines to about 1500 MW on average. So we have 80,000 MW of renewable sources widely scattered around the Western System (WECC) with each carrying 1500 MW so that we need roughly 50 new 500 kV lines of 500 miles each, for a total length of 25,000 miles.

Preston adds

The article assumes there is little solar power energy storage and it also assumes the wind be blowing at night. We know for sure that the solar power is not available at night so we are nearly totally dependent on wind for night time energy. You are going to ask about the geothermal energy. One geothermal project I recently worked on for determining the transmission access for looked like a good project until the geothermal energy extraction failed to work. Recently other geothermal projects have created human induced earthquakes. Geothermal energy seem less likely today than just a few years ago. So we are nearly totally dependent on wind energy for the nighttime CA energy as envisioned in the 100% renewables by 2030. If we plan for those few occurrences when there is no wind in the WECC system, we must interconnect WECC with the rest of the US so CA can draw power from other wind generators that do have wind (hopefully) outside the WECC area, such as the Texas coast and east of the rocky mountains where massive wind farms can be constructed. However we will need at least 40,000 MW of lines that I estimate will average 2000 miles in length. If we used 500 kV lines, we would need about 25 of these lines bridging from WECC to the US eastern grid and ERCOT and the total length would be about 50,000 miles.

Of course, the increased cost of materials will effect the cost of transmission lines as well.

Prestons estimate is far more parsimonious in its guess about the number of solar and wind installations require to meet California's electrical need, and given a system of the magnitude Ring foresaw to meet California's 2025 electrical needs, a far larger local transmission system would have been required. Given the nuclear power cost advantage of both China and India over the next 20 years, the energy future of the United States and indeed the economic future looks quite dismal without a major technological breakthrough.

The Flawed Renewables Paradigm

When I first began thinking about renewable generation of electricity, the first question I asked was "how are you going to provide electricity when the sun is not shining, or the wind is not blowing?"  I got two different answers in response,  The first answer was that we will use the existing generating resources of the grid to bridge any gap when the wind does not blow and the sun does not shine.   The existing resources being "nuclear", a word that causes most renewable advocates to foam at the mouth whenever it is mentioned.  Almost all of  the grid resources that renewables advocates would depend on bun fossil fuels.  Coal, which every renewables advocate professes to hate, even though some of them take coal money to advocate something called carbon capture and sequestration, is marked by renewables advocates for replacement by renewables. Natural gas, which is after all a carbon based fuel, is almost always treated in the thinking of renewables advocates as an honorary renewables and carbon free resource.   Thus we have renewables advocates, in effect, arguing emitting CO2 is OK as long is prevents the use of new reactors in the generation of electricity.  

When I looked at the entire energy economy, I saw that there were areas where it would be very difficult to replace fossil fuel.  For example some cement manufacture require 1500 degrees C heat.  Advanced high temperature reactors produce 1000 C.  The theoretical maximum for LFTR's with carbon-carbon parts is somewhere around 1200 C.   Thus heat for cement manufacture, and other industrial processes, may have to come from natural gas.  Land transportation can be electrified.  Unless small reactor power plants for ships become a practical reality ocean going transportation may remain dominated by fossil fuel power for a long time.  Air transportation is heavily dependent on fossil fuel and if the air transport industry is to continue to exist, it may remain dependent on fossil fuels for a long time to come. Fossil fuel consumption may continue to be required for agricultural use.  Fossil fuels may continue to have a variety of military uses.  Thus if our goal is an 80% reduction in fossil fuel use by 2050, it is unlikely that much of the remaining 20% will be devoted to the generation of electricity.   Thus we will have to assume that the 2050 electrical system will have to do without any fossil fuel backup.  

In 2007 I looked at these facts and came to the startling conclusion that neither a renewable dominated electrical generation systems, nor a conventional nuclear dominated system was likely to be affordable as a replacement for the fossil fuel electrical generation.  In addition energy had to be found to power surface transportation.  Other energy gaps included a new technology for lower temperature industrial process heat, were not well filled.  

I found Robert Hargraves' Pebble Bed Reactor site.  I was impressed with the argument for factory production of  of Pebble Bed Reactors, but I knew of a radical reactor design that could be mass produced, and which in a number of ways was superior to the PBR, and which was amenable to mass production.  

But natural gas is not renewable, it is expensive, and when it is burned carbon dioxide gas is produced. There is something else about natural gas that renewables advocates will not tell you. When natural gas is burned radioactive gases such as radon get released. Now the big rap against nuclear power is the argument that the danger of releasing radioactive materials like radon is two great and thus nuclear power is toxic and dangerous. When renewable advocates tell you about how clean natural gas is they ignore the release of the very radioactive and toxic gas radon from natural gas powered plants, and the ignore the emissions of CO2 from the same natural gas fired generating facilities.

When it is pointed out to renewables advocates that their plan to use grid resources when mother nature fails to cooperate in the production of renewable generated electricity, they fall back on energy storage. Three schemes get mentioned: Battery storage, pump storage, and Compressed Air Energy Storage (CAES). In addition solar thermal electrical schemes may rely on energy storage in such media as molten salt, or pressurized water. All energy storage schemes are expensive, in fact so expensive that when the cost of the storage system and redundant generating capacity required to produce the energy to be stored, the cost of carbon free renewable systems almost invariably turns out to be higher than the cost of nuclear power. In addition the CAES solution requires the burning of natural gas.

Thus the renewables paradigm is either requires that we continue burning natural gas or turn to a storage solution that makes renewables produced electricity more expensive than nuclear power.  Thus renewable generated electricity either will not completely displace the use of carbon based fuels, or it displace them at a cost that is higher than new conventional nuclear power. It would be very damming if the cost of a carbon-free renewable system were to be higher than the cost of a conventional nuclear power system.  

The renewable paradigm yields the following operational hypothesis: "Renewable electrical sources can replace replace carbon emitting fossil fuel burning electrical generating systems at a lower cost than nuclear power."

The Null hypothesis would be: "Renewables can only replace carbon emitting fossil fuel burning electrical generating systems at a cost that is higher than nuclear power."

I have repeatedly tested the Null hypothesis on Nuclear Green using actual cost information from the renewables industry, and data on capacity from reliable sources.  When I had to make assumptions, I was if anything generous to the renewables industry, but it would have been unreasonable to assume that nuclear costs would be subject to inflation while renewables  costs would not be, unless it could be shown that renewables costs would not be subject to the same inflationary pressures  that nuclear costs would be.  That evidence has yet to emerge. Repeatedly. I have tested the null hypothesis in Nuclear Green case studies of renewables costs.   The null hypothesis tests have  shown that renewables cost data supports rather than falsifies the null hypothesis.  That is it has not been possible, using cost data and capacity factor data, to show that it would cost less to replace the fossil fuels electrical generating system with a renewable based system, than it would cost to replace it with a nuclear based generating system.  Thus the renewables paradigm fails the falsification tests.   Admittedly it is has not been possible to explore every possible renewables system, because in some cases there is not enough empirical data to construct a test, so while the range of possible renewable options has been shown to be very limited - for example wind, PV and most forms of ST have been shown to fail the falsification test - it has not yet been possible to run the falsification test on every form of  ST.  

I have performed falsification test on both state wide and national renewables plans.  The state plans were for wind generation in Texas, and the plan to produce 33% of California's electricity from renewable by 2025.   I also tested the Picken's energy plan, and the google energy plan. Both plans had nation wide scope, both plans contained significant flaws in addition to failing the falsification test for their renewables components.  It is clear then claims that the claim that a renewables based electrical generating system will cost less than a nuclear based electrical system is not not derived from facts.  

Thus renewables, at a cost that is lower than the cost of nuclear power, cannot fully displace the use of fossil fuels.   It would appear that the cost of fully replacing the use of fossil fuels in electrical generation would drive the cost of an all renewable electrical generating system  to a cost level that is higher than the cost of a nuclear based system.

Solana, subsidies and future solar cost

I have some more solar (CSP) construction cost and performance data. Solana CPS facility under construction at Gila Bend, Ariz., will have a name plate capacity of 284 megawatts. The facility will cover about 1,900 acres. And its cost is piously estimated at 1 Billion. No power output estimate is reported but the power will reportedly sell for 4 billion dollars over a 30 year period of time. Assuming a 23% capacity factor that we calculated from Nevada Solar 1, the daily power out put would be 24 X 280 MWs X .23 = 1.5456 GWh Per day, The $1 billion dollar figure would appear to be proportional the Nevada Solar 1 construction costs which ran little more that $4 million per name plate MW. $4 Million X 280 MWs = $1120 Million. 1 Billion would be about 10% less, but who wants to bet on the $1 Billion figure considering inflation? We had to go with a dummied up capacity factor from Nevada Solar 1, but as we will see the data is not out of line. We get an average of 192 MWh electrical production. Now lets try out our .23 per KWh cost figure. 192 MWh is worth 192,000 X .23 X 8 = $253,280 x 365 = $128,947,200 which is remarkably close to $4 Billion divided by 30 years = 133,333,333.

We also have a similar land use pattern. 280 MW of name plate power requires 3 square miles of land. We don't have any information on water use yet. The Solana data set is fat from complete and our cost figure is far from final but the data I do have increases my confidence in the Nevada Solar 1 data set and conclusions I have drawn from it.

Solar investment exists because of government subsidies: The government now pays 30 percent of the capitol investment costs of businesses that invest in solar power to meet our energy need.

Renewable energy production tax credit: This program gives wind, solar, geothermal and other renewable power sources a leg up with a 1.9-cent per kilowatt-hour tax credit, which makes them more competitive with natural gas or coal-fired power plants. Every advocate of solar power believes that solar power in an "infant industry" that needs to be supported by such lavish subsidies. Failure to do so, the solar advocates tell me, will doom the human species to disappear from the face of our planet.

In addition to investments in solar arrays rate payers or tax payers are boing to pick up the tab on a $1.5 million per mile cost for new transmission lines.

Depending on various factors, building one MW of solar energy can involve an investment of up to $7 million. That is before interest, and does not include overnight energy storage. Solar theorist claim that solar investment costs are going to drop to a $3.5-5 million soon. It is not clear if that figure includes inflation, because the word inflation never appears in discussions of solar power. According to solar experts in the next few years the cost of solar facilities may drop as low as $2.5 million per MW. That is expected to happen shortly after the Starship Enterprise gets its warp drive coil.