While political issues grab our attention, but Kam U Tee says the economic turmoil offers an opportunity to develop a multi-pronged energy strategy, which would include renewable energy.
Over the past decade, we have experienced increasing financial turbulence. Currently, the sub-prime collapse seems to have sucked in sound housing loans, insurance companies and finally banks, leading to a full blown world financial crisis.
It appears that a credit bubble had been growing for the past 25 years. In the late 80s, Ravi Batra, an economist, wrote a book, “The Great Depression of 1990”, predicting that the world was heading toward economic disaster. For over 15 years, this seemed an over-pessimistic evaluation of the situation. There are many and complex reasons for bubbles, but Batra’s simple answer was that bubbles were fundamentally caused by growing inequalities in incomes in the population. Those well endowed with savings would want quick returns and were drawn to risky investments. He evoked the 60-year Kondratief cycle, during which growing contradictions would reach a limit and boil over.
My view is that the 60-year cycle was disrupted by a new factor not envisaged by him; namely the recent escalating price of oil, in particular over the last decade, from US$20 per barrel in 1995 to over US$140 just before the present collapse.
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All goods and services can be eventually equated to their energy inputs, so that if energy costs go up, so too would goods and services. This results in a virtual reduction of purchasing power that contracts the economy. It would seem, from this distance, the US Federal Reserve’s response each time was to increase liquidity by lowering interest rates and/or taxes; in the process, we appear to have been lurching from one bubble to another larger bubble.
Concurrently, oil-exporting countries accumulate huge surpluses, and after spending on luxury goods, are driven by the declining value of money to re-invest their accumulated funds in US financial institutions, who then must find commensurate returns for their clients. In a saturated market, the sub-prime crisis was the result of people who could ill afford to buy quality homes, being enticed to make purchases on expectation that increasing prosperity or increasing inflation would enable them to sell their purchases after expiry of the initial grace period of low interest charges.
Those who made the loans understood the risks, and packaged them into Collateralized Debt Obligations (CDO’s) and these were given AAA ratings by rating agencies and sold to unsuspecting investors all over the global landscape, thus completing the chicanery of using other peoples money to gamble on expected inflationary increase of prices, meantime earning fat bonuses for themselves.
Prospects
My instincts tell me that in the final outcome, money and investments must be put into real goods and services that improve the material benefit of all levels of society; this is the creed of us engineers. So called “financial engineering” is not a term we understand.
From our point of view, the prosperity of the last century was fuelled by the advent of cheap oil. Over the last hundred years, we have burnt up one trillion barrels (1 bbl = 22 US Gallons); known reserves may be another trillion, with another trillion or two made possible by technology such as horizontal drilling, water and steam injection, and drilling deeper and over the oceans. Simple arithmetic shows that oil will not see us through another century. (Present consumption is 86 million barrels/day. Assuming an average of 100 million barrels/day for 50 years, we will consume another 1.6 trillion barrels).
The fundamental postulate of peak oil theory states that when a field is half depleted, we can no longer increase the rate of extraction. The present volatility is caused by the fact that for several reasons, the rate of extraction has stagnated at 86 billion barrels/day, so that there is little reserve margin available.
We may have reached the point where the more energy we use, the more it will cost.
Can we change to a situation where the more we use, the less it will cost, and in the process save the world from increasing wild swings of the economy, not to say also from ecological disaster as well.
Alternative energy sources
The sun’s flux falling on earth, is estimated at 87,000 Terawatts (1012 watts). The wind’s energy is another 270 Terawatts, compared to present energy consumption of just over 15 Terawatts. If only we can tap into a fraction of this available energy, our civilisation can possibly endure (other suicidal tendencies apart) as long as the sun shines!
Wind-mill turbines and photo thermal and photo voltaic panels are being developed, but these sources are intermittent. What happens when the sun does not shine or is obscured by clouds and what happens when the wind is not blowing? Considering that we have only addressed this problem within the last few decades, technology is still a limiting factor. At the moment, solar and wind power can only provide 20 per cent of our energy consumption; electricity generated from these sources has to be connected to the supply grid and anchored by fossil fuel generators or by nuclear generators.
An interim step
Fossil fuel plants, hydro generators and nuclear generators must still provide base load generation, but with increasing inputs of wind and solar, through the common grid system. Some scientists propose to clean up emissions (carbon dioxide, nitrous oxide etc) from fossil generating plants, but this is not yet doable. Nuclear fission has to overcome the psychological fear factor of the Three Mile Island mishap and the Chernobyl disaster. Runaway fission was the problem but new second and third generation nuclear plants have safety features and procedures incorporated in them. France generates 80 per cent of its power from nuclear fission plants, and Japan, 30 per cent despite memories of Hiroshima and Nagasaki
Currently, the urgency caused by climate change, has forced all governments to reconsider the use of nuclear energy. Fourth generation plants using radio active neutral gasses such as helium or nitrogen as coolants are passive safe (they are self regulating, they do not melt or explode, and require no active safety measures) and are suitable for modular scalable construction.
This means that the reactors can be small and mass produced at controlled factories and constructed in modules, with additional units added as demand rises. Uncomplicated features mean that they can be run without dozens of doctorate degree operatives. They can burn up a higher proportion of fissionable material, producing less toxic wastes, leading Bruno Comby, President of Environmentalists for Nuclear Energy (many of whose members include renowned greenies, such as James Lovelace), to claim that the wastes created from burning energy for one household over 40 years is only a vitrified golf-ball in size. Such wastes can be stored temporarily at the plant pending reprocessing or disposed into geologically stable rock formations.
These scalable plants, such as the Pebble Bed Reactor or the Hyperion uranium hydride capsule, await final certificated approval from the US Nuclear Regulatory Commission, and are due for mass production within the next decade.
Possible terrorist attacks are still a point of contention, but environmentalists such as Lovelace think that this issue is still manageable, compared to climate change and possible rising ocean levels, which will inundate whole cities.
Grid management
The above envisages many suppliers can be connected to the grid; feed in tariffs, protocols for trade offs against base load generators have to be developed. In England and some other European countries, a central distribution agency controls the grid, with all supply generators connected to it. Consumers can elect to nominate a supplier of choice to pay their charges to. This is a more democratic environment, and allows the public to support green technologies directly. If any subsidies are required, the consumer can choose to shoulder some of it.
Wind and sun power
In order to achieve commercial viability, wind and solar must compete with coal, and the holy grail of engineers is to achieve parity at US$ 1/watt of power.
Wind turbines have achieved parity and are being implemented on a large commercial scale. Denmark produces 20 per cent of its electricity by wind power.
Solar thermal generation concentrates the sun’s radiation with a field of mirrors which are made to track the sun across the sky. Concentrated by several magnitudes, thermal heat is stored in a fluid which then evaporates to drive generating turbines. Because turbines are large items of equipment, solar thermal plants are mostly built over large tracts of desert.
Solar voltaic power: Previously cells had been made from high purity silicon crystals, which had to be grown, sawed and doped. Costs were four times greater than coal generation.
Newer technologies include vacuum-deposited wafers and even photo-sensitive nano-ink printed on flexible substrates at above 100 ft/minute. These can bring manufacturing costs down to less than US$1/watt, but these cells need to feed into grids, and will require inverters to convert DC to AC as well as transformers and electronic controls, which may add another US$1/watt to installation costs.
Wafers can provide higher efficiency ( 30 per cent plus), and the thin film cells attain only 18 per cent efficiency. But where land is already paid for, they are competitive, and it is not impossible to envision whole cities covered with such cells.
Energy storage
Storage devices make wind and solar more applicable; flywheels, insulated heated oil storage tanks and even pumped storage reservoirs are used. These devices have limited applicability, and more portable devices are needed.
Lead acid batteries have been used in vehicles for almost 100 years, but they cannot endure deep cycle discharges, are heavy and do not last long.
Lithium batteries have been made available for portable computers, but such storages are 10 times more expensive than lead/acid, and initially, they can overheat and catch fire. Newer devices with more stable chemistry such as lithium-iron-phosphate have been developed. GM’s plug-in electric Volt and Japanese mild hybrids are looming in our rear-view mirrors, as the pressure to limit CO2 and other pollutants mounts.
Newer chemistries such as the lithium-sulfur battery with charge densities of 300w/kg – meaning that it will now be possible to have a 50 kg battery power an all electric car over a distance of 200km – are in developers’ experimental works. Such research can still be subsidised as part of pump-priming economic activities and our government can cut import duties for such vehicles.
Replacing the internal combustion engine
Internal combustion engines (ICE) have been with us almost a hundred years. They need to suddenly accelerate and brake and operate at variable speeds, often idling in traffic jams. Petrol engines seldom attain more than 25 per cent efficiency, even with fuel injection and compressor boosted air inlets. Diesels may attain 30 per cent efficiency because of higher compression ratios, but by the same token, must be more robust and limited to larger engine sizes. Replacing them with electric, plug-in hybrid or mild hybrids can achieve reductions in fossil emissions, even if electric supplies come from power stations but these have efficiencies of over 40 per cent because of constant speeds of turbines and co-generation.
It is anticipated that mass production models will come online beginning from 2010, but even so, the number of gas guzzlers on the roads still number in the millions. Andrew Grove, ex-chairman of Intel, is a passionate fan of electric vehicles and advocates an active programme to retrofit existing petrol vehicles. It may require active government encouragement to make a meaningful impact in 10 years.
Petrol stations can install large batteries of 1 Megawatt capacity, charge these with wind turbines of photo voltaic panels and give a ten-minute charge to full electric cars.
It is my contention that growth of these industries to move the world slowly away from escalating oil prices can provide the engine of growth for the next 50 years.
Conclusion
To sum up, we need a game-changing plan to convert our fossil fuel based civilisation into a more diversified energy consuming entity, producing less carbon dioxide, and less subject to the vicissitudes of social/political monopoly situations. Hydrocarbon fuels can still be reserved for chemical and fertiliser manufacture.
In this regard, the sun’s energy is limitless and is distributed over the whole surface of the earth. This can make possible a more democratic vehicle of wealth creation.
Technologies to exploit this source of energy await ramping up to mass production. By developing a multi-pronged strategy, using wind, solar, bio-fuel, and even nuclear energy, and developing high-density long-life storage batteries, we can avoid an escalation of the economic storms that lie ahead and slowly move to an era of unlimited prosperity.
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