Book Review: Energy Innovation – Fixing the Technical Fix

The energy policy of our time is a mess. What can be done about it? Lewis Perelman addresses the problem by first analzsing its various roots and subsequently pointing towards possible solutions. Not surprisingly, the roots are manifold comprising technical as well as political sources. In a nutshell: there are very good reasons to go “away from emissions regulation and toward technology innovation”.  The ultimate goal is to “make clean energy cheap”.

Clean energy, however, does not become cheap by subsidising a particular branch of industry (as is currently the case in Germany with detrimental effects to the economy) but rather by providing the appropriate technology which is competitive against conventional energy sources.

Needless to say that there is a lot of effort put into R&D as well as innovation programs funded by countries and/or international organisations. In spite of that the great breakthrough is still lying ahead of us. Nevertheless, technology is the ultimate answer to our energy problems. Clearly, there are clean technologies, but so far none of them is cheaper and/or equally practical as the conventional carbon-based ones.

Perelman is convinced that governments have an important role to play in that game. I wonder why the market should not be able to create its own viable (and sustainable) solutions without regulators interfering. Nevertheless, also the role of government has its limits as Perelman acknowledges.

Thus the only way out from the current state of affairs is a big technology breakthrough. But how do we get there? There are clearly new ways needed to stimulate innovation in the energy sector. Thinking out of the box is paramount.  Going beyond conventional mechanisms to promote innovation may open new possibilities. Perelman discusses various ways to overcome the traditional path of innovation management, like new financing models, prizes, the role of philanthropists etc.

All in all, Perelman’s book offers a great insight into the complexity of the energy problem as well as into the even more challenging complexity of how to overcome it. Technology can save us – it has to!

Energy Innovation – Fixing the Technical Fix

by Lewis Perelman


Germany´s Energy Future – part 2

One year ago Germany decided to quit producing nuclear energy by 2022. Since nuclear power plants are a central pillar the German energy mix, contributing some 22.5% to the entire electricity output in 2010, this means that until 2022 the equivalent of 140.6 TWh (2010) has to be replaced by other sources. This is a minimum estimate ignoring increase in consumption.

Already at this moment Germany begins to face the consequences of last year’s decision. As nuclear plants are successively being phased out, more strain is put on other sources, in particular renewables. In addition, the power grid is experiencing severe tensions as more controllable sources of energy are being replaced by less controllable (and predictable) ones. Especially the latter is a constant, or rather growing source of trouble.

One the one hand, it’s a clear goal of German policy to increase the share of renewables substantially. On the other hand, it seems implausible to be able to replace the entire nuclear bloc by wind and solar capacities only. Thus, it appears inevitable to commission a number of conventional, i.e. thermal power plants which are supposed to act as a backup for the fluctuating input from e.g. wind farms.

In my view, it is pretty obvious that wind will be the main source of renewable energy in the future, considerably outnumbering all other renewable sources taken together.

In 2010 the total capacity of German wind farms amounted to some 27190 MW which produced some 36.5 TWh. Taking into account the average specific output of wind farms as calculated in one of our previous postings we may estimate the extra capacity needed in order to fill the gap. Then we could show that the average output of wind power installations amounts to some 1600 MWh annually per MW of installed capacity.

Having these figures at hand we may easily estimate how much extra wind capacity is needed in order to replace nuclear in its entirety. Thus if wind power is supposed to be the only substitute (which is certainly an oversimplified approach) it would mean that Germany needed almost 88000 MW of additional wind power by 2022, thus an extra three times as much as was installed up till 2010. This in turn would mean that the country needed more than 115000 MW in wind turbines by the time the last nuclear power station is decommissioned.

Between the year 2000 and 2010 an average of 2000 MW was commissioned annually, in total some 20000 MW of wind power. Extrapolating this trend to 2022 implies that some 24000 MW of new capacity could be added to the grid until D-day. However, what is needed is almost four times as much. Thus the annual growth rate should be close to 7800 MW. Even if we assume that wind will only replace half of the nuclear output, a growth rate of about 4000 MW annually would be necessary, i.e. twice as much as has been the case during the boom period 2000-2010.

The figure below shows two different scenarios for Germany´s wind power capacity. The business-as-usual scenario (BAU) is based on the assumption that wind capacity will grow at a rate of 1900 MW per year, which is equivalent to the increase in 2010. The Target scenario on the other hand assumes an annual growth of 7800 MW which would theoretically be sufficient to replace Germany´s entire nuclear production as seen in 2010.

Total installed wind power in Germany.

Given that there is considerable resistance among the population against onshore wind farms, it is indeed hard to see how this can be achieved. In addition, as  subsidies for renewable energies are becoming a serious burden for consumers, they are likely to be reduced in the future. This in turn may jeopardize further investment in wind power, and thus even the more conservative BAU scenario may, in fact, be too optimistic. As a consequence, other energy sources are desperately needed if Germany wants to maintain her standard of living. We will come back on this issue in another posting.

Renewable Energies in the UK

As in many other countries, the share of renewable energies in the UK is growing dramatically. During the past two decades renewables have surged at an impressive pace. In fact, supply from renewable energy sources has more than quadrupled since 1990 whereas overall consumption has remained fairly constant. The raw data of this analysis stem from Eurostat and UK National Statistics.

The huge gap in the respective trends between the overall energy demand and the contribution of renewables can be seen in Fig. 1 where the data for final energy consumption and the supply figures from renewable energies are shown. To make comparison easier we present the figures in an indexed form with 1990=100.

Fig. 1 Final energy consumption (FEC) and energy supply from renewable sources in the UK. 1990=100.

Whereas final energy consumption has increased only slightly (index value 105 in 2010) with a decreasing tendency since 2001, supply from renewables has more than quadrupled over the same period. Accordingly, the weight of  hydro, wind, biomass etc. in the energy mix has risen sharply. Nevertheless, this picture should not obscure the fact that in 2010 renewables contributed only 7 % to the entire energy production.

One interesting aspect of looking at the UK figures is to check the specific output of the various renewable energy sources, i.e. MWh produced per MW of installed capacity. Here we find significant differences between hydro, wind and other renewables as shown in Fig. 2. The latter comprise landfill gas, biofuels, waste combustion etc.

Fig. 2 Specific output of renewable energy sources in MWh per MW installed.

All of them show annual fluctuations which is normal since not the entire capacity is available all the time. Wind and hydro are particularly vulnerable to external factors. However, there is a significant difference between the two as regards short-term availability. Electricity generated from water is much more stable for the grid than wind which is by definition more erratic in its availability.

Apart from that we can see clearly in Fig.2 that the specific output of the various sources differs enormously. The least efficient way to produce electricity from renewables is wind as becomes apparent from Fig. 2. This conclusion is fairly independent of the fluctuating nature of all the sources taken into consideration. The average output of wind farms is 2140 MWh per MW installed. The values for hydro and others are 3060 MWh/MW and 5200 MWh/MW, respectively. Thus we may safely conclude that using hydroelectric plants is on average 43 % more efficient than using wind turbines. The difference is even more striking for the other renewables which tend to be more than 140 % more efficient than wind.

Given this state of affairs it might be worthwhile to put more emphasis on other green power sources rather than wind. However, wind farms have already become a significant factor in several countries as we have shown in some of our previous posts, e.g. here, here and here. Bearing in mind the inherent weaknesses of wind power, it appears that other renewables such as hydro and biomass are not only more reliable, but also more efficient. They, too, deserve their chance.

Renewables in Europe 3: Wind Power

In some European countries wind power is contributing significantly to the energy mix. At EU level, wind is the second largest source of renewable energy after hydro. Since its early stages in the 1990s the development of wind-generated electricity can only be described as breathtaking. In 2010 the biggest producers were Spain (44,165 GWh) and Germany (37,793 GWh), followed by UK (10,183 GWh) and France (9,969 GWh). All data for this brief analysis covering the period from 1990 to 2010 have been taken from Eurostat.

To get a feeling for the tremendous growth of the sector we may note that at EU level wind power has soared by a whopping 537,000 % during the past two decades, delivering some 149,000 GWh in 2010. The result of this incredible surge is that in some countries like Germany, Spain, and Denmark wind can no longer be considered a negligible contributor to the energy grid.

Fig. 1 gives an overview of the annual changes of power produced from windmills during the period in question.

Fig. 1 Wind power generation in selected countries, relative change compared to previous year

One stiking feature of this graphic is that the changes may also be negative, indicating that in the year n less energy has been produced than in n-1. This may happen as the amount of wind is fluctuating over the years. However, the negative growth rates are generally quite small, because new capacities are added every year. Moreover, with growing capacities in various areas the influence of prevailing calm tends to get weaker.

The other noteworthy issue is that the growths rates are slowly getting smaller. This is not surprising as the countries in our selection have already sizeable quantities of wind mills operating and the extra capacities added are small compared to the existing ones.

Fig. 2 gives an overview over the indexed production of wind-generated electricity with 1990 = 100.

Fig. 2 Wind power generation in some EU countries, 1990=100.

The picture gives a vivid impression of the potential of this source of renewable energy. Although Spain and Germany are the top producers of wind energy, the top performers are Portugal and Italy. It may be noted that the countries selected are significantly outperforming the EU average. The reason is that in some Member States like Poland (1700 GWh), Bulgaria (680 GWh), Romania (310 GWh), and the Baltic states (550 GWh in total) wind power is still in its infancy stage, contributing very little, both in absolute and relative terms, to primary energy production. That may, however, be expected to change in the future. In Malta and Slovenia wind-generated electricity is virtually non-existing.

In spite of being an ever growing contributor to the energy grid wind power faces some intrinsic weaknesses which, paradoxically, tend to become more serious the bigger its contribution becomes. The main source of concern is the fluctuating availability of wind in the atmosphere. This, in turn, leads to fluctuations in the energy supply which put additional strain on the entire grid. Conventional power plants have to be kept in reserve in order to counterbalance the variable inflow from wind energy. This is one of the most pressing challenges to be tackled in the near future, if wind power is to be not only a significant but also a stable  and reliable player in the whole energy mix.

Renewables in Europe 2: Photovoltaics

In a recent posting we discussed the development of energy produced from biogas in the EU over the past two decades. The growth rates, as for most renewables, were impressive, showing the huge potential of that particular source of energy. Simultaneously, it became clear that not all countries progressed at the same speed. Yet the overall contribution of biogas to the energy mix is still quite small.

Similar statements can be made about photovoltaics. At the beginning of the 1990s it was virtually non-existing. But soon things started changing.

Fig. 1 Energy generation from photovoltaics

In 1990 only the following countries produced more than one TJ (Terajoule) of solar power (in decreasing order): Spain, Italy, Portugal, Germany, Finland (!) and the Netherlands. The output of all other states now forming the EU was virtually zero. But gradually more and more countries embarked into photovoltaics. By the end of our reporting period, i.e. in 2009, just a handful of the 27 Member States remained abstinent from solar energy, amongst them the Baltic countries, Ireland, Poland and Romania. Due to the low starting level in practically every country, the relative changes experienced in each of them turned out to be close to 100% or even higher than that in some cases. Fig. 1 highlights the annual change of energy produced from photovoltaics in some selected countries. A significant increase is almost always linked to a corresponding growth in PV capacity.

The overall picture turns even more impressive when we take a different point of view.

Fig. 2 Electricity generation from photovoltaics, 1990 = 100

Fig. 2 illustrates how production figures have risen. The starting level is 1990 = 100. As can be inferred from the picture, some countries like Germany, Belgium and France even exceed the scale given. In 2009, Germany almost reached a whopping 600,000, thus being the unquestionable European champion in relative output since 1990. Spain (not shown) comes second with almost 100,000. One of the most striking examples, however, is Belgium where PV virtually did not exist until the year 2005, after which solar electricity began skyrocketing. In that context it is worthile noticing that Belgium is not a particularily sunny country. Nevertheless, PV is underlining its growth potential even in places where clear skies are not so frequent.

Having seen all those astounding figures we should not forget, however, that solar electricity is still a minor contributor to the entire power supply. This is true even in countries like Germany where the solar industry has been pampered with high subsidies. In any case, it will be exciting to follow the further development of photovoltaics in Europe over the next decades. Its full potential is still not exploited. The question is where its limits are.

Does Saving Energy Push Renewables?

Yes it does. Let us look at a concrete example in order to get the point. The EU plans to improve its energy efficiency by 20% by 2020. In other words, 20% less energy will be used by then, according to plans. The baseline is the primary energy consumption for 2010 which was 1770 Mtoe. Thus, if all measures are in place, by 2020 this figure should be down to 1416 Mtoe.

In all likelihood, the savings will concern almost exclusively the use of conventional energies (coal, nuclear, oil) whereas renewable energies will not be touched by this development. Therefore, we may safely assume that on the consumption side renewables will be equally well off  as they are now. In fact, this is a very conservative estimate. On the contrary, renewable energy use may well be expected to rise over the next decade. But let us stick to our conservative approach for the time being. In 2010, the consumption of renewables amounted to some 172 Mtoe corresponding to 9.7% of total consumption.

Fig. 1 EU Gross inland consumption in 2010

Given our  2020 scenario from above and keeping renewable consumption at 172 Mtoe, we may conclude that by then renewables account for about 12.2% of total consumption. Bear in mind that this is true even if energy production from renewable sources does not increase.

The projection for 2020 would consequently look like this.

Fig. 2 EU Gross inland consumption in 2020

Thus, by saving energy the relative weight of renewables in the energy mix is automatically increased. The bigger the savings on the one hand the bigger the extra share of renewable energies on the other.



Solar Energy from the Desert – How Much Do We Lose?

The idea of producing solar energy in the desert appears, at first glance, quite appealing. There is a lot of sunshine available, and annual fluctuations in productivity are negligible compared to locations further up north. The main problem is just to transport the electricity generated in the desert to the consumers who, generally, are not residing at the place of production.

Desertec is an ambitious project aiming at producing large amounts of (mainly solar) energy in the desert and transmitting it across the Mediterranean to the consumers in Europe. The anticipated transfer volume is expected to rise from 60 TWh per year in 2020 to about 700 TWh in 2050. The latter figure corresponds roughly to 20% of all electricity generated in the 27 EU Member States in 2007. So there is indeed a substantial amount of energy available in the desert sun which was clear from the outset.

The crucial problem we are facing here is the following: transporting energy requires energy, and the longer the transport route the more energy you need for transporting, i.e. the higher the losses. Even with the best available technology we would expect to get less electricity out of the socket than what has been put in at the beginning of the transmission line.

High-voltage direct current (HVDC) is currently the best available technology for transmitting electricity over very long distances. The losses amount to a minimum of 3% per 1000 km. Thus, for a transfer volume of 60 TWh we would expect to lose some 1.8 TWh over 1000 km. Desertec estimates the length of its transmission lines to be more than 3000 km in 2020. In case that we would encounter transmission losses of at least 5.4 TWh per year.  Taking into account the anticipated transfer volume and the expected length of the transmission network for 2050 we can calculate the power losses to be at least of the order of 75 TWh, i.e. more than the entire transfer forecast for 2020.

To put things into perspective, the anticipated transmission losses for the Desertec project correspond to the annual output of 7 nuclear power stations (taking the Isar 2 power plant as a reference which, as the top performing German nuclear plant, produces an average of 11 TWh per year).

Thus, apart from worries about the policitcal stability of the producing region and the related issue of security of supply which are clearly outside the scope of this posting, transmitting energy across the Mediterranean sea is facing technical limitations which, in their entirety, may add up to considerable factors. From a technical point of view, it is far from evident, that producing solar energy in the desert and pushing it over the sea to Europe is a smart way of doing things. It is certainly more promising to increase the number of solar power facilities in Europe and connect them to local grids rather than looking for a far-fetched solution.

Phasing Out Nuclear Energy – The Case of Belgium

Nuclear energy has been the main source of electricity generation in Belgium since the 1980s , accounting for 52% of total production in 2009. Nevertheless, the new government plans to abandon nuclear until 2025. Given the tremendous share of nuclear in the electricity sector, this represents a enormous challenge which, to a certain extent, outweighs even Germany´s daring decision to switch off its last nuclear plant in 2022.

In one of my previous posts I analyzed the situation in Germany and its potential to cope with the ambitious goal of phasing out nuclear by 2022. Then the conclusion was that there is indeed a realistic chance to meet the targets by enlarging the renewable sector. In Fig. 1 we see the distribution of the various contributions to the electricity grid in Germany in 2009.

Fig. 1 German electricity mix in 2009

Among the renewable part wind is the predominant source outweighing hydroelectricity more than twofold. Solar energy, though growing significantly during the past decade, is laging behind, its share corresponding to about 17% of the power production from windmills.

Fig.2 shows the equivalent for Belgium.

Fig. 2 Belgian electricity mix in 2009

The case of Belgium, however, differs in some aspects from the German case. First, its share of nuclear in the power grid is considerably larger than the German one. As mentioned above, this share corresponds to more than half of production output of Belgium´s power generators. In Germany, on the other hand, nuclear covered some 23% of electricity production in 2009. So, in relative terms, nuclear power has only half the weight in Germany than what is has in Belgium. Given the difference in size between the two countries, the absolute production figures are quite different with a total nuclear output of 134.9 TWh in the larger and 47.2 TWh in the smaller country. Thus, the task may look much less demanding for Belgium. However, the contribution of renewables to the electricity mix differs considerably between the two neighbours. In 2009 renewables accounted already for 16% of electricity output in Germany, whereas the corresponding value for Belgium was a mere 9%.

Supposing that the current nuclear production may entirely be replaced by renewables at the respective deadline, the two countries have to undergo respective growth rates which are significantly different from each other. In Germany, renewables may grow by an annual average of 9.3% in order to cope with the challenge, whereas in Belgium the growth rate must be some 14.6%. This gives us a solid indication about what lies ahead of the Belgian government.

What has been acheived so far? From 1998 to 2009 the primary energy production from renewable sources rose by 238% in Belgium. During the same period Germany faced an increase of 255% with both countries being by far the most dynamic in the renewable sector in Europe. Though these figures are indeed quite impressive we should not forget that during the twelve-year period from 1998 to 2009 Belgium has only five times managed to beat the growth rate it needs to keep during the next 14 years in order to switch completely from nuclear to renewables. Its German neighbour, on the other hand, could arrive at or even go beyond its expected growth rate seven times during the same period.

Thus it´s not only the fact that the smaller country needs to keep a higher annual increase than its German counterpart, but moreover Belgium is required to maintain this fast pace of growth over a longer time. Given this, the prospect of replacing all nuclear capacities with renewables does not look as optimistic as in the German case. Most likely, additional sources of electricity generation will have to be tapped. One potential candidate is gas the use of which increased by more than 270% since 1990.

Nevertheless, it will be interesting to see what share of renewable energy Belgium will have in 2025 when its last nuclear facility is supposed to leave the power grid.

Renewables in Europe – Who Is the Champion?

In this posting we analyse the contribution of various renewables to the energy mix. All raw data for the subsequent analysis have been taken from Eurostat.

Renewable sources of energy have seen a dramatic increase in the past decade. However, the relative growth is not distributed equally between the various sources. Solar panels and wind mills are mainly associated with the increasing use of renewables. This is mainly due to the media giving considerable room to them when it comes to emphasizing the importance of alternative energies.

And indeed the growth rates of solar and wind energy have been outstanding and, what is more, they are likely to continue growing over the next decades. However, growth rates may look impressive, especially when starting from a very low level. One should not forget that solar panels were hardly existing some twenty years ago, and the same is true for wind mills. Clearly, political targets served as a backbone for boosting their widespread use. This, in turn, has also led to considerable technological improvements, making solar and wind more competitive.

Put in perspective, hydro power, though lacking any increase during the past decade, is still by far the biggest source of renewable energy. Although their advance is impressive, solar and wind are currently much smaller contributors to the energy mix than hydro, as can be seen in Fig. 1. Actually, wind mills may have a realistic chance to outnumber their hydroelectric competitors within the next 10 to 15 years, depending on their pace of growth.

Fig. 1 Renewables in Europe. Production in GWh.

From Fig. 1 it is obvious that all other sources except hydro and wind are for the time being less important. In fact, in this figure wind, TWO (tide, wave and ocean) and biomass are hardly distinguishable. Let us therefore zoom in on that picture, taking into account all renewables except hydro. As a result we obtain Fig. 2.

Fig. 2 Renewables in Europe, all except hydro. Production in GWh.

Then it becomes obvious how much bigger the input from wind mills to the energy mix is than the production from solar, biomass and TWO. Still, the difference is at least one order of magnitude. Nevertheless, with solar growth rates being considerably bigger than the ones for wind power it is possible that the latter might be overtaken by the former within the next 15 to 20 years.

In order to get a feeling for the relative importance for solar, TWO and biomass, we zoom in once again on Fig. 2, thereby dropping the curve for wind energy. The results can be seen in Fig. 3.

Fig. 3 As in Fig.2, but without wind. Production in GWh.

From this, two things become clear immediately. First, the contribution of TWO has been essentially stable over the period in question. In addition, its input to the power grid is virtually negligible with less than 500 GWh in 2009. In fact, production figures for TWO have gone down since 1998, when 590 GWh were produced, amounting to a reduction of 15% over the period in question. The second observation is that solar energy is growing much more rapidly than biomass. Actually, solar could overtake biomass in 2009.

Hydropower and TWO may be considered as “established” technologies, i.e. they have been in place for the past 40 years or more. Their production capacity has remained unchanged for at least a decade. As a consequence, their output figures have deacreased rather than increased during that period. Wind, solar and biomass on the other hand have proven their potential to grow substantially. Their full capacity is still not exploited. In any case, it appears that their relative weight in the energy mix is going to become bigger in the future.

Renewable Energy in Europe

It goes without saying that renewable energies have received a lot of attention recently. Particularly Europe has been eager to extend its production capacities of solar energy, wind etc. Although, on a European scale, renewables are still playing a smaller role, their contribution to the energy mix has constantly risen during the past decade. This growing impact is likely to continue thoughout the continent ove the years to come.

Let us first have a glance at the situation of renewables in the EU-27. During the period 1998-2009 its production level has been up by 60.7%, contributing in 2009 some 148.4 Mtoe to the energy mix. Fig.1 shows the evolution of production figures for the respective period. All raw data for this figures as well as for the following ones have been taken from Eurostat.

Fig. 1 Production of renewable energy in Europe 1998-2009, Mtoe

There is, of course, a huge variety among the EU Member States when it comes to producing energy from renewables. Political, economic and geographical factors come into play, determining the pace at which new sources might replace the conventional ones. Some countries have already a certain tradition of using renewables, mainly water, while others have been starting more or less from scratch.

Fig. 2 provides us with an overview of the biggest producers of renewables in Europe. Only those countries were selected which in 2009 produced more than 10 Mtoe. The list comprises Germany, Spain, Italy, France and Sweden. Only two of them, France and Sweden, would have passed the selection criterion already in 1998.

Fig. 2 Production of renewables in selected countries, Mtoe

The eye-catching feature in this picture is Germany which starting from a relatively low level (7.8 Mtoe in 1998) managed to outgrow all the other big producers. In 2009, it produced some 27.7 Mtoe from renewables, an increase of 255%. However, this may be considered an intermediate step only, given that Germany recently decided to phase out its entire nuclear production capacity by 2022. It is very likely that a substantial part, if not all, of the nuclear output will be taken over by renewables. I have discussed this issue in one of my previous posts, Germany´s Energy Future.

Finally, let us have a look at the growth rates in those countries which are demonstrated in Fig. 3.

Fig. 3 Growth rate of renewable energy production in %, 1998-2009

Germany is the clear champion which does not come as a surprise after having seen Fig. 2. Spain and Italy saw an increase of renewable production of 75.5% and 69.9%, respectively. These two countries performed better than the EU average. On the other hand, France and Sweden show less than average growth rates with 22.2% and 13.0%, respectively. Why is that so?

France is the biggest producer of nuclear energy in Europe, generating some 75% of its electricity from nuclear power plants. Thus, unless France is closing down a substantial amount of its nuclear capacities, its potential for using renewables appears to be quite limited. The case of Sweden is slightly different. As can be seen from Fig. 2, it has always been a big player among the users of renewable energy with water being the main source. It appears that the potential for using hydroelectricity is largely exploited. Therefore Sweden must increase its usage of biomass etc. in order to see production from renewables going up.