Universal Energy
Two great industrial energy systems are now in place: the thermal, based on extracted fuels, and the universal, based on fundamental particles. How countries, companies and communities choose between them will determine their future energy leadership.
Different in Kind
Install a wind turbine, a solar panel, stand back – they start to generate electricity.
Construct a coal plant, a gas plant, stand back – they stand idle.
They stand idle, waiting to be fed fuel extracted from fields of coal or gas, purified, graded, taken to their gates, before the burning that generates their electricity.
Wind and solar are different energies in kind, not degree.
The solar photon is a gauge boson, the fundamental force carrier of electro-magnetic energy: it arrives pure and infinite from the universe around us: free, inexhaustible and in-place.
Craft an appropriate technology, and its energy appears: no more creation is required.
You will therefore look in vain, no matter how hard you try, even in the appendices, to find any tables of solar and wind energy production in the official reports of BP, IEA, OPEC or any other energy institution.
You will only find their consumption.
All this is a clue to how abruptly our future energy system is about to change.
The undisputed notion that you need to produce a unit of energy to be able to consume it has to be abandoned.
This is causing a crisis not only in energy markets, but even in the concepts and vocabulary we use to describe energy.
In our familiar thermal system, defining primary energy is plain and tangible, obvious even:
“Primary energy’ is simply energy as it is extracted or captured, before it can be converted into heat or mechanical work. Primary energy includes ‘molecules’ of energy – i.e. the chemical energy in the coal entering a power station on a conveyor belt, or the crude oil extracted from a well.”
Not with wind and solar:
“Wind and solar become “energy products” at the point of generation of electricity. their “primary energy equivalent” is the electricity generated.”
Energy Revealed
This is decisive.
Solar irradiation and wind movement are not primary energy inputs like methane or coal pellets – they are not produced, only revealed as energy by appropriate technologies.
Thus – the electric power that wind and solar generate is the new primary energy, displacing the multi-step thermal systems we are commonly used to.
Our energy system is not undergoing change – it is undergoing inversion.
Dematerialisation
In the new energy system, as we consume more, we will produce less; as we install more, we will spend less.
As we consume more, we produce less?
As we “import” more free, universal energy into the current system the combination becomes more efficient.
Our thermal energy system is a local work-around; a brute force (and erstwhile effective) way to energise resources we historically found to hand via combustion – coal and gas, then oil.
A giant and impressive system perhaps, but still a work-around, given the pure energy surrounding us.
Relying on thermal energy means just over a third of it is converted into useful energy services – the rest is rejected (see this visually here).
Two-thirds of our global energy system is rejected and lost, mostly as disordered heat; steaming air, hot pipes and so on.
But as wind and solar grow rapidly to become a larger proportion of the energy mix, they displace the thermal system with 100% efficient primary energy.
Conveyor belts of coal with their energy-intensive hinterlands of extraction and logistics, are now suddenly un-needed: the precise energy equivalent is achieved by simply installing factory-made panels and turbines, onshore or offshore, connecting them to a grid, and standing back.
Put another way, the ratio of useful energy to total energy consumed is now increasing.
More, with less.
As we install more, we spend less?
Analysts such as Lazard have tracked the cost of making electricity via fossil fuels, wind and solar over time.
The cost of producing power from fossil fuels (and nuclear) has been level for many years.
The cost of generating electricity from newly-built coal and gas power plants has stabilized at about $60-100/MWh, or about $30-50/MWh from existing plants, where you only have to focus on fuel and maintenance.
As recently as 2010, the economics of wind and solar energy were a long, long way from being competitive with this – they were over two to four times more expensive.
Now their costs are not only competitive with new thermal plants, but with the power produced by existing ones.
To underline this point, wind and solar electricity projects have rapidly moved away from subsidy support, their costs now mostly set by market auctions.
All in eight years.
source: Lazard
source: IEA
This speed of improvement is because the costs of thermal energy and solar / wind energy are governed by different laws: laws in the sense of deep scientific or economic principles that drive outcomes.
Thermal energy system costs follow two laws: the laws of thermodynamics and mechanics (which set practical limits on useful energy at about 33%) and economic laws of major construction projects which cause costs to grow over time due to complexity.
Hence the flat-line of performance shown by thermal plants.
But when energy is infinite, free and already-processed it only makes sense to talk about the cost of making the technologies that best reveal it.
The costs of wind and solar, universal energies, are therefore driven by the laws of manufacturing, not thermodynamics or projects, and particularly by phenomena such as Wright’s Law which states that technology costs decrease as a power law of cumulative production.
In non-mathematical terms this means that as an activity gets repeated, the process gets more efficient, bringing down costs, causing more units to get built, reducing costs again and so on in a positive loop: this process is not a simple line though, the positive loop makes it a curve so costs drop very quickly over time.
Wind and solar costs have followed this power law: their installed costs fell by 65-85% over the last eight years, suddenly making them competitive.
This will persist: Wright’s law applies to all components of a manufactured system, thus even with tariffs on panels, total installed costs will continue to rapidly improve.
And even as total investment dollars of solar and wind may drop from year to year, the amount of installation will continue to increase, as unit costs decrease.
McKinsey, a consultancy, believe these trends willl bring forward wind / solar growth by over 20 years compared to industry prior predictions.
source: McKinsey
We install more, but spend less.
The Choice
We can model energy growth out to 2050 using current rates of growth of the main energy sources – not (and this is crucial) as a prediction, but as an impressionist version of how the energy system can invert.
source: dollarsperbbl estimates, BP
The first three blocks in our impression are the energy sources that actually contribute to global energy services today: the useful third of fossil fuels and nuclear (nuclear creates electricity via thermal means), plus 100% of electricity from hydropower and wind / solar.
The other two segments are the ghosts of the receding thermal system: the rejected and lost energy of the fossil fuels we continue to burn, and the thermal energy displaced by wind and solar technologies as they grow rapidly as a proportion of total energy.
The chart therefore shows two worlds: the bottom four segments add up to the energy we may actually use; adding the fifth segment shows how much we would use if we stayed totally dependent on thermal energy.
Three other details to note:
First, if we do stay fully thermal for the next 30 years, our consumption of energy will grow without a limit, to more than 60% above today, with all the ramifications for carbon emissions and increasing extraction costs.
In contrast, importing universal energy via wind and solar technologies pulls our overall consumption down within the next few years, forcing a primary energy peak in the early 2020s, and increasing useful energy to over 50% of the total by the late 2020s, and 75% by the 2040s.
Carbon emissions would be reduced substantially as a consequence, by over 25% pa by the 2040s, potentially reducing exposure to higher temperature ranges.
Finally, supporting solar/wind energy deployment will force down the real unit cost of energy delivery, in line with Wright’s law as we grow more focused on manufactured rather than extracted energy.
Cost reductions could be substantial: latest auctions for solar and wind electricity are already below $20/MWh, or 50% cheaper than gas or coal facilities.
Leveraging the new energy system also reflects the form of the world ahead.
By replacing the materials and molecules of extraction and construction with the bits and atoms of wireless technologies, wind/solar energy efficiency and scalability accelerate the processes of dematerialization.
Telephone poles and cables, vinyl records and compact discs, cameras, fax machines and paper-backs all make way for the weightless digital organization of data on an iphone.
And, electricity leaps the transport species barrier forcing out thermal fuels; a plug socket replacing all the engineering infrastructure and storage facilities the current system requires.
Energy’s era of providing basic heat and movement, but with massive thermodynamic losses and high-risk externalities such as CO2 emissions, is potentially complete.
The Open Gate
Science, technology, engineering and economics have brought us to this point.
The new energy system has limitations in terms of land access and infrastructure development. But compared to the vast engineering challenges that faced the un-built thermal system of over a hundred years ago they seem mundane.
Developments in battery storage and demand management are removing concerns about intermittency and back-up (the-sun-doesn’t-always-shine / wind-doesn’t-always-blow argument): another benefit of relying on a manufactured technology that is progressing through the layers of multiple learning curves.
Two global energy systems are now in play.
Individuals, communities, companies, countries and international bodies can now choose between them. They are equivalent in energetic terms.
The final component standing in the way of change is the human willpower via policy to do it.
Changing from thermal to universal energy is a matter of setting achievable goals and following them with reinforcing policies: targets for wind / solar as a fraction of total energy, by a certain date, abutted with carbon pricing for example.
Plus a focus on the reinforcing positive impacts such as emissions reductions, climate protection, lower national power costs, and reduced dependence on the vagaries and volatility of imports from the thermal system.
This is not a naïve vision of energy utopia – wind/solar energy technologies exist economically at industrial scale today, subsidy-free, able to oust thermal equivalents.
It is instead emphasizing, as in the chart, the growing contrast between the futures of those who take advantage of universal energy, and those who instead reinvest in thermal.
Already multiple communities in many countries are suffering from the technology shift.
By denying the reality of a transition, local and state government or private companies delay a more effective change for their workers: uneconomic mines with smaller and smaller payrolls stay open long after their burners should have gone cold.
Instead, their workers could be redeployed thoughtfully to alternate roles in the growing range of innovative, labour-intensive, energy services being born.
It may seem grizzled and expedient to cater to existing cultural and electoral expectations regarding thermal jobs – but it does those very groups and communities no good to shield them for just that little while longer from the energy disruption underway.
So, for example, the great manufacturing nations with limited thermal fuels such as China and India are leading the transformation.
50% of all the EVs and 99% of all the e-buses on the planet are today built in China, by Chinese firms.
They are not being built in Detroit:, nor likely ever will. Expertise is being accumulated in China, and now exported.
And India’s importation and leverage of solar and wind means it is likely that no more new fossil fuel capacity construction is required in the country, with the consequence that future CO2 emissions could drop by 25% compared to current estimates.
source: McKinsey
The energy world ahead needs more skills in coding, battery chemistry and solid-state physics, less in geology and refining.
And energy needs to be re-envisioned – the opportunities afforded by wind and solar are only just getting under way.
Universal electricity should be within reach within a few years, EV running costs are already 75% lower than today’s thermal fuel system, and will trend lower very quickly.
The transformations, cost reductions and new service offers continue from there.
The manacles of thermodynamics have been lifted off, and we can now stride from the thermal compound into the daylight.
But the longer nations or corporations halt before the exit, the more they risk their workers being unable to leave at all.
Instead they can walk through the gates, leave the dark, idle plants behind, and look instead at the machines turning and facing toward the sun, bringing universal energy for everyone to use, and then improve.
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