The Future of Energy CanSIA Western Solar Conference 2010 Calgary Alberta John MacDonald

1. The Future of Energy CanSIA Western Solar Conference 2010 Calgary Alberta John MacDonald

2. Life Today OUR GENERATION ENJOYS THE BEST QUALITY OF LIFE HUMANS HAVE EVER EXPERIENCED SINCE OUR SPECIES APPEARED ON THIS PLANET. OUR PROSPERITY & QUALITY OF LIFE IS DEPENDENT ON THE READY AVAILABILITY OF ABUNDANT AFFORDABLE ENERGY.

3. Security - Dependence on Foreign Energy Environmental Concerns Climate Change Demand and Supply Energy Issues OBSERVATION Given a choice between protecting the environment and impact on their Pocketbook, the majority of people will opt for protecting their Pocketbook

4. Demand and Supply - A key Question When will the Demand for Energy exceed the Conventional Supply? The likely result will be Increases in the Price of Energy and Instability in that Price The timing of this is very uncertain but it will happen

5. Optimistic Supply Case Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Range of Demand Nuclear Biomass Hydro Primary Energy Supply [ExaJoules/Yr] Coal Gas Oil Year

6. Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Association for the Study of Peak Oil and Gas (ASPO) Range of Demand Nuclear Primary Energy Supply [ExaJoules/Yr] Hydro Biomass Coal Gas Oil Year Pessimistic Supply Case

7. Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Association for the Study of Peak Oil and Gas (ASPO) Range of Demand Nuclear What will fill the Gap?? Primary Energy Supply [ExaJoules/Yr] Hydro Biomass Coal Gas Oil Year Filling the Gap

8. Filling the Gap - 2 Solutions • Increased use of Nuclear Energy • Renewable Energy Sources • Solar • Wind • Tidal • Biofuel derived from biomass • Geothermal • Wave • Small Hydro (Run of River) • Large Hydro

9. Secure • A local energy source • Environmentally Benign • Inexhaustible Properties of Renewable Energy • But it is either intermittent or strongly location dependent or both

10. Geothermal 1,600 1,600 WBGU: German Advisory Council on Global Change Other REs 1,400 1,400 Solar heat 1,200 1,200 Solar electricity 1,000 1,000 Primary Energy Supply [EJ/Y] Primary Energy Supply [EJ/Y] 800 800 Wind 600 600 Biomass adv Biomass trad 400 400 Hydro-PW Nuclear PW 200 200 Gas Coal Oil 0 0 2100 2100 2010 2010 2030 2030 2060 2080 2000 2000 2020 2020 2040 2040 2050 2050 2070 2090 YEAR YEAR WBGU’s World Energy Vision to 2100 WBGU: German Advisory Council on Global Change

11. Shell – WBGU Comparison

12. “Grid Parity” – The Holy Grail • What is “Grid Parity”? • Equality of the renewable energy price per kilowatt-hour (kWh) with the currently accepted kWh price from the grid

13. Getting to “Grid Parity”Challenges • Bridging the current cost differential • Renewable energy incentives • Generation of firm, dispatchable energy from renewable sources • Creation of renewable energy dominated supply systems and subsystems • Integration of renewables into existing energy systems and managing the transition

14. Getting to “Grid Parity”Solar Energy System Cost & kWh Price • Fuel is free! – Enhances price stability • Large up-front investment, amortized over a defined time period • Kilowatt-hour price is driven by the cost of amortizing the capital investment combined with the cost of operation and maintenance.

15. Getting to “Grid Parity” - Technology • The technology must: • Maximize the number of kilowatt-hours generated annually per unit of capital invested. • This is the key performance parameter • Produce the rated power over the amortization period and beyond. • Have low maintenance and operating costs.

16. Getting to “Grid Parity”Bridging the cost gap • Incentives (that reduce to zero over time) • Performance-based – Incentivizes performance improvement • Capital rebate – Leads to commoditization – only price matters • Tax-based • Others

17. Performance-Based Incentives(Example: Feed-in-Tariff) • Guarantees a stable price environment and a stable return on investment (~8%) for a stated period (typically 20 years) • Attracts private capital into the process of realizing a mature renewable energy industry by creating a stable and realistic pricing environment. • Motivates renewable energy companies to innovate and discover ways to improve the number of kWh per annum per unit of invested capital in order to remain competitive. (Performance counts) • Is an investment in future energy price stability • Reduces the time to reach grid parity. • Money can be made doing all the right things to get there.

18. Achieving “Firm” Energy Delivery Renewable Energy Sources are either intermittent or strongly location dependent or both. How can we create a system that can generate FIRM renewable power ANYWHERE?

19. 70 60 50 Solar Wind 40 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Achieving “Firm” Energy Delivery Big Hydro Small Hydro Blending Wind and Solar in Minnesota (example) Firm Renewable Sources Intermittent Renewable Sources Tidal Biomass Geothermal Wave GRID CONTROL SYSTEM Solar Wind Fossil Fuel & Nuclear Large Scale Storage LOAD

20. Renewables in the MainstreamCreating the Infrastructure • This is a very large undertaking • The structure will be very different from what we have today • The design is highly location dependent • It will require much innovation and creativity • It will take much time • Time that we may not have much of • IT IS TIME WE TOOK MAINSTREAM RENEWABLE SYSTEM ARCHITECTURE SERIOUSLY

21. A Parting Thought on Architecture Distributed Generation coupled with Distributed Storage??