Powering the Future: A Scientist's Guide to Energy Independence

by Daniel B. Botkin

  Figure 13.3 Scenario 2: Year 2050, if no change in per-capita use, heavy reliance on wind and solar. The population increases as forecast by the U.S. Census Bureau; coal, oil, and natural gas provide 1% each; nuclear and hydro provide the same quantity as at present; geothermal and biofuels provide 5% each; and the oceans 2%. Solar and wind split the rest and provide 38%.

  The calculations for Scenario 2 (no change in per-capita use and a heavy reliance on solar and wind energy) are more complicated than for Scenario 1 (business as usual) because of the technological differences between renewable alternative energy sources—wind, solar, and ocean—and energy sources that use a fuel that must be mined to obtain the energy stored within them. With a fossil-fuel-fired electrical power plant, the energy content of a unit of fuel is known, as is the efficiency of energy conversion. In contrast, although each alternative-energy installation has a maximum capacity, the actual yield is a variable depending on environmental conditions.

  I have restricted the calculations of solar energy to photovoltaics, not considering solar thermal, for simplicity and because right now it looks like photovoltaics will be the dominant technology. For solar and wind each, the required generation capacity is 15,215 billion kilowatt-hours (Figure 13.3 and Table 13.3).6 Based on these, in 2050 solar capacity would have to be 12.2 billion kilowatts and wind-energy capacity would have to be 6.48 billion kilowatts.7 (In the Endnotes, in the section for Chapter 13, you will find a table in note #7 that compares the costs per kilowatt-hour for coal, solar, and wind.)

  What will this cost?

  Estimating the costs of future investments is not simple and it takes us into cost–benefit analysis. Economists agree that in making such estimates, we have to take into account what else we could be doing with the money we are considering investing in something—such as building a new power plant. Economists refer to this as consideration of the “social discount factor.” This becomes important in our analysis because economically there are two fundamentally different kinds of energy installations: those that require the continual purchase of fuel (fossil fuels, biofuels, uranium for nuclear power plants); and those that do not (solar, wind, ocean, geothermal). Matthew J. Sobel, William E. Umstattd Professor of Operations Research, Case Western Reserve University, kindly did these calculations that take the social discount factor into account for me, based on the analyses done throughout this book. Here are the results.8

  Solar energy installations today average $6.81per watt. Wind-energy installations recently have ranged between $1.00 and $3.00 and today average $1.71 per watt. For both, there would be negligible subsequent costs after the initial outlay. (Estimates of maintenance costs are hard to find, but the existing ones suggest they will not be greatly different for coal, solar, and wind.) Using a standard social discount of 5% for Scenario 2, “Per-Capita Use as Usual,” solar energy installations would cost $38.6 trillion and wind energy installations would cost $7.6–10 trillion, or a total of $46–49 trillion for the two. If work on these installations began immediately and continued at the same pace until 2050, an investment of about $1.1–1.22 trillion would be required each year in current U.S. dollars.

  According to the 2009 federal budget, U.S. federal receipts in 2008 were $2.524 trillion, and 2009 receipts were forecast to be $2,186 trillion.9 Thus, this business-as-usual approach to per-capita energy use is obviously going to result in an expensive transition from fossil fuels to solar and wind. New technologies and improvements in existing ones will lower the costs, and economists will tell you that the amount of energy people use changes quickly with changes in energy costs. There’s also some comfort in knowing that in 2009 the federal budget forecast that 2019 federal tax receipts would rise to $4.446 trillion. Consider also that the 2008 U.S. Department of Defense budget was $0.593 trillion ($593 billion) and the estimated 2009 DOD budget was $728 billion, so the annual transition costs to Scenario 2, with no reduction in per-capita energy use, is 50% higher than the 2009 DOD budget.10 For those interested in additional comparisons, here are some other funding allocations in the 2009 U.S. federal budget:

  • Department of Energy: $26.4 billion

  • Transportation: $70.5 billion

  • Environmental Protection Agency: $7.8 billion

  • Climate Policies (Clean Energy Technologies): $0

  • Total for these: $104.7 billion

  According to the United Nations Environment Program, there was a total investment of $155 billion worldwide in 2008 in renewable-energy technologies, and “the G-20 group of nations recently announced stimulus packages totaling $3 trillion or 4.5 per cent of their GDP.”11

  These government budget numbers help us to weigh the relative cost of the energy conversion. It’s much harder to get an analogous estimate of the total national outlay from private corporations. Clearly, however, there will either have to be massive additional federal expenditures, or the transition will not be funded significantly by the U.S. federal government and will instead have to be done by the private sector. Either way, it will be a major economic and technological commitment.

  The bottom line is that Scenario 2, with unchanged per-capita energy use, just doesn’t look particularly good.

  Scenario 3: Per-capita use drops 50%, solar and wind provide two-thirds

  A third and more realistic scenario is of a future in which each person in the United States uses about half as much energy as each American uses today. This means that per-capita use in the United States in 2050 would be about the same as it is today in Great Britain, Germany, and Japan—an energy level at which, on average, these people live well (Table 13.4 and Figure 13.4). The information and analyses in the two preceding chapters indicate that Americans could lower their energy use to this level with little or no loss in the quality of life and, in fact, considering that there would be less pollution and surface mining, probably an improvement.

  Table 13.4 Scenario 3: U.S. energy use in 2050 assuming a 50% drop in per-capita use and heavy reliance on solar and wind. Each fossil fuel provides only 1% of the energy; nuclear power provides the same amount it did in 2007 but a greater percentage (11.71%) of the total energy than in 2007. Hydropower also provides the same quantity as in 2007 but a percentage increase from 2.9% in 2007 to 4.3%. Biofuels and ocean energy each provide 5%. This leaves a shortfall, which for the sake of simplicity is accounted for by an increase in low-intensity geothermal (assuming that the costs will be less than that of any fossil fuel energy it replaces).

  Figure 13.4 Scenario 3: U.S. energy use in 2050 assuming a 50% drop in per-capita use and heavy reliance on solar and wind. Each fossil fuel provides only 1% of the energy; nuclear and water power provide the same as in 2007; and biofuels, geothermal, and ocean energy each provide 5%.

  Although a 50% reduction seems very large, most of it should be pretty painless for the individual. It will mainly require more-efficient cars, more-efficient cooling and heating, and so forth—technological improvements rather than radical changes in our personal lifestyles. The great advantage is that the demand for solar and wind energy would be only 44% of what it would be if there were no improvement in per-capita energy use. There is one important caveat, however. According to an article in the New York Times, “Electricity use from power-hungry gadgets is rising fast all over the world. The fancy new flat-panel televisions everyone has been buying in recent years have turned out to be bigger power hogs than some refrigerators.”12 The International Energy Commission estimates “consumer electronics”—all our computers, cell phones, video games, and so on—use 15% of home energy use, that this is likely to triple by 2030, and, if so, would require “building the equivalent of 560 coal-fired power plants, or 230 nuclear plants.”13 Meanwhile, we lovers of computer gadgets complain about the amount of energy jet airplanes use. Perhaps this is another case of not-in-my-backyard—that we may be looking to solve somebody else’s problem far away at 35,000 feet, while ignoring the energy problem occupying our ears and fingertips.

 
Wind and solar for Scenario 3 are together projected to contribute 6,448 billion kilowatt-hours by 2050 (Table 13.4). Solar energy capacity would have to be 5.22 billion kilowatts, and wind energy capacity would have to be 2.75 billion kilowatts.14,15 We can ask: Will production capacity for solar and wind meet this challenge? Interestingly, production of photovoltaics has been increasing rapidly, growing by 49% from 2005 to 2006, then another 54% between 2006 and 2007, and increasing a remarkable 91% between 2007 and 2008. Overall, from 1999 to 2008, production increased twelve-fold (1185%), with 987 megawatts produced in 2008.16 At this growth rate, the goal of 5.22 billion kilowatts required for Scenario 3 would be reached by the year 2037, well short of the deadline year of 2050.

  Based on current installation capabilities, the billions of kilowatts of solar capacity required in Scenario 3 would take an area of 5,307 square miles, about 2% of the area of Texas. The 2.88 billion kilowatts of wind turbines would take 1,140 square miles, less than half a percent of the land area of Texas.17 All the solar and wind energy production for this scenario could be accommodated by about 2.5% of the land area of Texas, or about 0.2% of the land area of the lower 48 states. By comparison, urban area occupies 3% of the lower 48 states, cropland 22%.18

  Taking into account a 5% annual social-discount factor, here are the results for Scenarios 2 and 3:

  Scenario 2 (Per-Capita Use as Usual): Wind

  and solar replace fossil fuels and together

  provide 64.4% of the energy required: Cost: $91.34 trillion

  Scenario 3 (With Energy Conservation): Wind

  and solar share equally and provide 64.4%

  of the energy required: Cost: $34.77 trillion19

  This is expensive, but how does it compare to alternatives? Perhaps surprisingly, importing petroleum costs a sizable fraction of the projected installation costs for Scenario 3. For example, in 2008 the United States imported 3.57 billion barrels of oil at an average daily price of $95.62 per barrel, for a total import cost of $341.46 billion. (At this writing in 2010, oil prices exceed $70 per barrel, which would amount to $250 billion annually.) The 2008 total cost of importing oil was about 37% of the annual cost of Option 3’s transition to solar and wind by 2050.

  Can we plan a reasonable future based on coal?

  Coal is the one fossil fuel we’re not going to run out of in the next 50 years or so, even using existing technology, and it has been fairly cheap, so it’s reasonable to ask: What if Americans opted for a coal-energy future rather than solar and/or wind? But consider: With wind and solar, most costs—close to all from this long-term perspective—are for installation alone, because the energy from then on is free. With coal, after paying to install a coal-fired plant, there are annual costs for the coal itself, all the indirect costs of mining’s toxic pollution and destructive effects on the land, and additional costs of “clean-coal” plants to bury carbon dioxide. To make matters even more complex, the National Renewable Energy Laboratory views the total money spent to run a coal-fired power plant (including pollution and land restoration costs) as an economic benefit to the state where the plant is located, while my analysis sees these as expenses.

  In June 2008, the U.S, Energy Information Agency recalculated the costs to mine coal and determined that at $10.50/ton, the cost a few years ago, only 6% of the coal in Wyoming, the country’s largest reserve, would be economically recoverable.20 At the time of this writing in 2010, the price of coal delivered to U.S. power plants averages $36.06 per ton. But worldwide, coal is selling at much higher prices, and prices have been rising to as much as $120 a ton (Figure 13.5).

  Figure 13.5 The price of coal has been rising rapidly in recent years, for example, doubling between October 2007 and April 2008. (Source: AP Images/Platts, AP)21, 22

  Factoring in a social discount of 5%, the cost of a transition that has coal replacing petroleum and natural gas and providing 64.4% of the energy by 2050 is $31.07 trillion. This is based on the traditional estimates of the costs of building coal-fixed power plants—between $1 and $2 per watt. But as noted in Chapter 3, these costs have been rising rapidly, and one report estimates the cost as high as $3.50 per watt. This would obviously make the total cost much greater.

  Could wind do it alone without solar?

  We might in theory consider a future in which wind provides 64% of the energy and solar none, in the hope that this would lower the costs even more. Obviously, at present efficiencies and prices, wind is much cheaper than solar, so it would make economic sense to emphasize wind over solar—except for one thing: There is more solar energy available, and it is more consistent.

  Interestingly, if wind alone provides 64.4% of our energy needs, the cost falls to $6.44 trillion, which, distributed evenly over 40 years, would be $161 billion a year. (All the cost estimates are summarized in Table 13.5.)

  Table 13.5 Total Costs of a Transition to Wind and Solar from 2010 to 2050 (Taking into Account a 5% Annual Social Discount Factor)

  The American Wind Energy Association estimates that the windiest 20 states have enough wind-energy potential to provide one-third to one-half of all the energy Americans currently use—and half of the total energy used in Scenario 3. However, with present technologies, depending totally on land-based wind installations may not be feasible in the United States because of various kinds of opposition to local wind turbine installations, environmental and social. Even allowing for the possibility that additional offshore sites could be found and developed at the same costs as onshore sites, it’s unlikely that a nation would want to go completely to wind energy, for several reasons, including landscape beauty, bird mortality, and the risks of relying on just one energy source. Variety provides redundancy, so if anything goes wrong on a large scale with one form of energy production, others are available.

  In sum, wind is already more cost-effective than coal. The net present value for wind is less than for coal even if coal were free. In fact, coal would need a $177-per-ton subsidy to cost as little as wind alone, taking a 5% annual social discount factor into account. Solar, on the other hand, is unlikely to be cost-effective against coal as both are priced today within the United States, unless we take into account all the costs associated with mining and strip mining (costs of erosion, land restoration and conservation, sedimentation, and health care), which I have not done. (However, this story could change considerably if installation costs of coal-fixed power plants triple or quadruple, as some reports indicate.)

  As for solar energy, assuming the total costs are in installation, and there are no maintenance or other costs, solar matches coal when coal reaches $433.64 a ton (taking into account net present value).

  How about a nuclear future?

  I haven’t considered nuclear power as the major replacement for fossil fuel because, as you saw in Chapter 5, “Nuclear Power,” with continued competition for fuel for conventional nuclear reactors, there just won’t be enough uranium. Despite what you may hear from corporations in France and elsewhere, breeder reactors and nuclear-fuel recycling are still too experimental, are unlikely to be successful and safe on a large scale, and are even less likely to provide the large amount of energy needed in 40 years.

  Constructing a conventional nuclear power plant costs $5–14 billion.23 For nuclear energy to replace wind and solar in Scenario 3, the U.S. would need 572 functioning nuclear power plants by 2050—that’s 468 in addition to the 104 running now. That would require 12 new plants a year (the first 12 to be added by the end of 2012). This seems out of the question, given how much time it takes to determine the plant design, find a suitable site, get all the approvals, and carry out the construction. It also seems unlikely that sites could be found that would be politically acceptable for 468 new plants. After all, that’s an average of more than 10 new plants per state, if the lower 48 states are included. And we could forget about Rhode Island, Delaware, Connecticut, and probably Vermont and New Hampshire, because of their small size, leaving 43 states and an average of more than 11 new
plants per state.24,25

  As discussed in Chapter 5, the lifetime of a nuclear power plant is about 30 to 40 years, and the cost to decommission and dismantle a nuclear power plant is estimated to range from $200 million to more than $600 million.26 For example, the Maine Yankee nuclear power plant near Portland, ME, one of the first commercial nuclear power plants in the country and one of the first to be decommissioned, cost $231 million to build and is estimated to cost $635 million to dismantle. (And this is an estimate made in 2003.) According to Matthew Wald in a Scientific American article, decommissioning this power plant is “an unglamorous task that was not fully thought through during the era when plants were being constructed.27 Except for one or two experimental power plants, none of the decommissioned nuclear plants in the United States have actually been taken apart and all the radioactive material transported to safe storage.