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Energy Continued

Prof. Kulcinski believes that the growth of the energy industry will continue, but fossil fuels will eventually run out. With the recoverable resources unable to cover the shortfall, he suggests turning to nuclear energy and renewables. The National Renewable Energy Laboratory provides analysis and support for renewable energy development. The cost of renewables has been declining over the years, but future declines may be limited. This chart shows the levelized cost of electricity for various renewable energy technologies.

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Energy Continued

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  1. Energy Continued Kulcinsky’s Solution China’s Trend

  2. Prof. Kulcinski’s View • Growth will continue • Fossil Fuels will run out • Recoverables won’t cover shortfall • Bring on the Nukes

  3. Renewables • What is the technological development/cost story? • Turn to National Renewable Energy Laboratory

  4. Renewables The Energy Analysis Office (EAO) integrates and supports the energy analysis functions located in many of the Laboratory's research programs and technology centers. With offices in Washington, D.C., and Golden, Colorado, the Energy Analysis Office promotes understanding and collaboration through all of its analysis activities http://www.nrel.gov/analysis/ • How much could Renewables be expected to supply?

  5. Renewable Energy Cost Trends Levelized cents/kWh in constant $20001 4030 20 10 0 100 80 60 40 20 0 PV Wind COE cents/kWh 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 70 60 50 40 30 20 100 1512 9 6 30 10 8 6 4 20 Solar thermal Biomass Geothermal COE cents/kWh 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2002.ppt) 1These graphs are reflections of historical cost trends NOT precise annual historical data. Updated: October 2002 Generally Declining, but future declines limited

  6. Renewable Electricity Technology Cost TrendsChart Notes, Page 1 Background • The Cost Curves are expressed in constant, 2000 year dollars and based on a uniform set of financial assumptions consistent with Generating Company Ownership (balance-sheet financing). • Actual project costs can vary substantially – not only over time, but from project to project – based on variables such as siting and permitting costs, land costs, transmission access, labor costs, and financing terms. • The Cost Curves are not based on specific project data, but are composite representations derived from a variety of sources outlined below.  Historic costs from 1980 to 1995 generally reflect costs that were published in various DOE Renewable Energy Program plans such as five-year program plans, annual budgets, and other program publications.  The Future Cost Curves generally reflect how the DOE Renewable Energy Programs expect the costs of renewable energy to decrease through lowered technology costs and improved performances, resulting from R&D efforts and other factors.  Projections of cost to 2020 for biomass, geothermal, and photovoltaic energy technologies are based on the DOE/EPRI Renewable Energy Technology Characterizations published in 1997. Wind and solar thermal costs represent more recent DOE Renewable Energy Program projections.  The Cost Curves generally assume the availability of high-quality resources. This is an important point because systems using lower quality resources are being built, in some cases with costs as much as double those shown.  The Cost Curves do not include the effects of tax credits or production tax incentives.

  7. Renewable Electricity Technology Cost TrendsChart Notes, Page 2 General Observations • The renewable technology cost trends typically show a steep decline from 1980 to the present. Projections show this decline to continue, but at a slower absolute pace as the technologies mature. • Historic cost of energy trends reflected in this chart are in broad agreement with the trends published in “Winner, Loser, or Innocent Victim? Has Renewable Energy Performed as Expected?“ Renewable Energy Policy Project, Report No. 7, April 1999. Technology Specific Notes Wind technology cost projections represent wind power systems in locations with Class 6 resources. Low wind-speed turbine technology is under development, which will make available large amounts of usable wind resources that are closer to transmission. Lower costs will result from design and technology improvements across the spectrum from foundations and towers, to turbine blades, hubs, generators, and electronics. Biomass cost projections are based on gasification technology. Lower costs will result from technology improvements indicated by current pilot plant operations and evaluation, including improvements in feedstock handling, gas processing/cleanup, and overall plant design optimization. Geothermal cost projections are for Flash technology. Cost reductions will result from more efficient and productive resource exploration and characterization as well as from continued improvements in heat exchangers, fluid-handling technologies, turbines, and generators. Solar thermal cost projections are for Parabolic Trough and Power Tower Technologies and are based on a detailed due-diligence study completed in 2002 at the request of DOE. Cost reductions will result from improved reflectors and lower-cost heliostat designs, improved solar thermal receivers, heat exchangers and fluid handling technologies, and turbines and generators, as well as from volume manufacturing. Photovoltaic cost projections are based on increasing penetration of thin-film technology into the building sector. Likely technology improvements include higher efficiencies, increased reliability (which can reduce module prices), improved manufacturing processes, and lower balance of system costs through technology improvements and volume sales.

  8. Renewables • Expected impact based on Kulcinski

  9. NOTE THAT SOLAR DOESN”T APPEAR HERE AND HYDRO HAS LONG TERM ISSUES

  10. Ethanol • Large questions remain concerning the viability of ethanol Professor Attacks Enthusiasm for Bio-Fuels http://www.npr.org/templates/story/story.php?storyId=5184874

  11. Ethanol Professor Attacks Enthusiasm for Bio-Fuels by Martin Kaste Morning Edition, February 2, 2006 · A growing number of Americans are embracing ethanol and bio-diesel as possible alternatives to gasoline. But one Berkeley engineering professor is waging a campaign against what he considers a delusion about bio-fuels. http://www.npr.org/templates/story/story.php?storyId=5184874 LISTEN

  12. Renwables • Current Global Demand: 71 Billion BOE/ Year • All Kulcinski’s Alternatives might reach: 75 renewables + 5 to 10 in solar BOE/Year in the distant future • But with population and consumption growth this will soon be swamped • Demand may reach 150 BOE/Year in 30 years or so • Is this a closet argument for Nukes???

  13. GLOBAL ENERGY DEMANDAND THE BATTLE FOR OIL

  14. INCREASED DEMAND FOR OIL • Recent Global economic expansion is driving the biggest increase in oil demand for sixteen years. Source: International Energy Agency • Demand grew by 2 m barrels per day in 2004 • Demand is now outstripping supply worldwide. Source: PriceWaterhouseCoopers (early 2005 comment) • Slowed a bit with higher prices in late 2005, but poised to continue growth • Note Feb 2006 – Auto use in China up 70% on the year

  15. Supply only part of Energy Pinch • Transportation Issues • Movement capacity • Long term security • Oil and ocean routes • Security and radioactive materials • Refining Issues • NIMBYism and refineries (see next slide) • Aging refineries and new heavy crudes

  16. TRENDS. US AND CHINA • In 2005 the US demand for energy was growing at 3.5% in the second quarter of this year, the largest gain since 1999. • The rapidly expanding Chinese economy has led to an energy demand which is up a staggering 20% over 2004.

  17. INVESTMENT • Electricity investment needs • as a result of such economic expansion and the increasing energy demand • estimated at $10 trillion dollars, three times higher than investment in the sector over the last 30 years. (Sone 2004)

  18. CHINARECENT ENERGY FACTS • China accounts for at least 40% of the growth in global oil demand. • In 2004 China will use 830,000 barrels a day more than last year which is about a third of world demand growth, which may soon be fifty percent. • Chinese energy consumption will more than double in the next twenty years. • Source: US Energy Information Administration

  19. REASONS FOR CHINESE ENERGY DEMAND GROWTH • A huge population now supporting a consumer-like capitalist economic expansion. • The inefficiency of energy use in China, where 50% more energy per unit of output is needed than even in India. • The large concentration in China in four very energy intensive areas, (steel, aluminium, cement and chemicals).

  20. CHINESE ENERGY SUPPLY ASPIRATIONS • To avoid US oil dominance in Iraq, China has signed a hydrocarbon deal with Russia for a new hydrocarbon pipeline to China. • China wants Russia to route a new Siberian pipeline into China. • It is seeking new supplies in the Caspian, in Kazakhstan, in Indonesia and in Latin America – Venezuala • China also is building a pipeline through Burma to avoid the Malaccan Straits and potential security problems

  21. REASONS WHY OIL DEMAND IS OUTSTRIPPING SUPPLY • The desire by Opec countries for high prices has meant they have let their supply margins decline. • Opec 1979 production capacity: 34 million barrels a day, • 2004 average production capacity: 30 million barrels a day. • Result Opec spare capacity is much more limited.

  22. How trustworthy is data • An Overestimation of reserves by countries and companies • Recent Shell reserves controversy. See also a book by Ken Deffreyes “Hubberts Peak the impending world oil shortage”

  23. Other Factors • Political turmoil in Africa and Middle East has meant limited access by oil companies to exploit reserves. Problems with Russian oil, will it be used for political purposes and thus foreign investors may be scared off. • Russia using Natural Gas as a political weapon???

  24. Variation on Hubbert’s Peak: How Much Oil and Where Peak Oil Ass. Nuclear Issues April 2003

  25. Where’s the oil???

  26. The last frontiers • Russia’s Race to the ends of the earth

  27. Out to Sea in Brazil Note the great variation in estimated recoverable oil, in perspective North Slope Alaska oil came in at less then 1/3 of initial high estimates "The volume of recoverable oil belonging to the nation could vary from 3.7 billion to 15 billion barrels, with the most likely estimate being 7.9 billion barrels," the national petroleum agency (ANP) said in a statement

  28. Supply and Export

  29. http://lugar.senate.gov/energy/graphs/crude.html

  30. Oil and Conflict

  31. Where’s our stuff?

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