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Water, Energy and other resources

By Dave Elliott

Energy resources aren’t the only thing we are running short of. Water resources could be the next big issue. And conventional energy systems have a big impact on that and will be affected by water scarcity. All thermal/steam raising energy systems need cooling, and maintaining access to water is likely to become a major problem for fossil and nuclear plants as climate change impacts: http://www.worldenergy.org/news-and-media/news/climate-change-implications-for-the-energy-sector-key-findings-from-the-ipcc-ar5/ Continue reading

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Land use and energy

By Dave Elliott

By their nature, renewable energy flows are diffuse and the technology for capturing energy from the flows has to cover relatively large areas. It is instructive, and sobering, to revisit Professor David MacKay’s calculations about the areas required to match the energy needed per person from renewable sources: http://www.withouthotair.com/.

However, as I noted in an earlier post (on his comparisons between wind/solar and shale gas), some of his analysis is a little limited, and the general conclusions have to be put in perspective. Continue reading

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Green energy transformations

By Dave Elliott

The International Energy Agency (IEA) has released a new report “the Power of Transformation”, which concludes that the integration of large amounts of renewable energy can be achieved by any country at only a small increase on whole system costs, compared with the current fossil-fuel-heavy electricity systems. The IEA used present-day costs for solar PV and wind, which are likely to continue to fall, with wind and PV being set to provide the bulk of the generating capacity in transformed electricity systems. Continue reading

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PV solar – is that all we need?

By Dave Elliott

PV solar is booming, as I noted in my last post, with over 130 GW in place globally and some see it as overtaking all other renewables, with prices falling dramatically. Indeed a new study “The Economics of Grid Defection” by the US Rocky Mountain Institute (RMI) says that PV solar and new cheap battery technology will soon mean that we won’t need power grids. Continue reading

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PV solar versus wind

By Dave Elliott

With costs falling rapidly, PV solar is moving ahead fast and some see it as likely to become a major renewable source in the future, if not the dominant one. The World Energy Council notes that in its new Symphony global energy scenario, “by 2050, globally, almost as much electricity is produced from solar PV as from coal,” and Shell’s recent “Oceans” scenario saw solar as being the largest single energy source globally by 2060. Continue reading

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Glaciologists and primary school children pass judgement on each other

At last week’s UK Antarctic Research Symposium in Bristol, scientists were visited by a group from the local Hareclive Primary School. The students, all members of the Room 13 art project based at the school, had judged the photo competition for delegates at the Symposium and the International Glaciological Society British Branch meeting held earlier in the week.

Prize photo by Mark Brandon

Prize photo by Mark Brandon

Joint first prize went to Mark Brandon of the Open University, UK, for his picture “A blue berg waiting to calve” at Jokulsarlen, Iceland, and to Jan De Rydt of the British Antarctic Survey for “Early morning sun halo whilst measuring the ice thickness of the glacier” at Pine Island, Antarctica.

Close runner-up was Martin O’Leary from Swansea University’s photo entitled “With around two thousand inhabitants, Tasiilaq is the largest settlement on the east coast of Greenland. The lack of light pollution, along with its location on the Arctic Circle, make it an ideal place to see the northern lights. Here, researchers take pictures and enjoy the display, after a successful field season”.

Photo of early morning sun halo whilst measuring the ice thickness of the glacier at Pine Island, Antarctica.

Prize photo by Jan De Rydt

In third place was Michael Meredith, also of the British Antarctic Survey, for “The view from the library. Sometimes it’s hard to concentrate on reading about Antarctic science, when the real thing is just out the window distracting you….” taken at Bransfield House on the Antarctic Peninsula.

Each of the 16 judges assigned marks out of ten to the 32 photos entered in the competition. In turn, delegates at the UK Antarctic Research Symposium and the International Glaciological Society British Branch meeting voted for their favourite artwork created by the children, using an arguably-less-rigorous one vote per delegate system. The standard was extremely high and the top three places went to pictures of penguins.

Art work by students from Room 13 Hareclive

Room 13 artwork

The school students were inspired to create the art following a pre-conference outreach visit from Bristol University ice researchers, led by Tamsin Edwards, in which they discussed life in the Arctic and Antarctic, re-created one of explorer Shackleton’s lifeboats in the playground, and tried on polar clothing.

“Thank you for taking us seriously,” said Lily from Hareclive Primary School at the end of her speech to delegates.

 

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Water source and gas fired heat pumps

By Dave Elliott

Heat pumps are seen as a clever way to get an energy upgrade, with the input energy driving a compression cycle, pumping heat collected from outside a building into radiators inside, like a fridge working in reverse. Most systems use heat from the air or from the ground, but there are also some water-source systems. For example there are large water-source heat pump schemes in Scandinavia, feeding heat to district heating networks. About 60% of the total energy input for Stockholm’s Central Network is provided by a district heating plant with six large heat pumps using the sea as a heat source. Warm surface water is taken during summer, while in winter, the water inlet is in 15m depth where the temperature is at constant +3°C. Helsinki in Finland also has large heat pump plant producing district heating with capacity of 90 MW, as well as cooling, with capacity of 60 MW, using heat from the sea and from wastewater led into the sea from a central wastewater treatment plant.

These are large projects, but a medium-scale system is being developed in the UK, using Mitsubishi’s Ecodan pump, which was voted the best new product or technology at the 2014 Climate Week Awards. It’s the first application of a system of its kind in the UK, and is backed Mike Spenser-Morris, a local developer and director of the Zero Carbon Partnership. The heat pump will use the Thames to provide hot water for radiators, showers and taps in nearly 150 homes and a 140-room hotel and conference centre at Kingston Heights in Richmond Park, cutting heating bills, it’s claimed, by up to 20%. It’s based on using water drawn from two metres below the surface of the Thames, where the ambient temperature, sustained by ambient heat from the sun, stays at around 8C to 10C all year round. A system of heat exchangers, pumps and condensers boost that to 45C. The electricity used to power the system is supplied by Ecotricity, which makes it zero carbon. According to a report in the Independent on Sunday, the system is thought to have cost about £2.5m, though this is for a ‘first of a kind’ project. The cost of future systems should be lower, and the Renewable Heat Incentive can offset supply costs.

Energy Secretary Ed Davey told the Independent on Sunday: ‘This is at a really early stage, but it is showing what is possible. You never have to buy any gas- there are upfront costs but relatively low running costs. I think this exemplifies that there are technological answers which will mean our reliance on gas in future decades can be reduced. Here you have over 100 homes, you have a hotel with nearly 200 bedrooms and a conference centre that won’t be using gas. It will be using renewable heat from the nearby River Thames. This is a fantastic development. My department is exploring the potential for this sort of water-source heat pump across the UK, so we’re going to map the whole of the UK for the potential’: www.independent.co.uk/environment/climate-change/exclusive-renewable-energy-from-rivers-and-lakes-could-replace-gas-in-homes-9210277.html

As the Independent noted, in theory, any body of water, including tidal rivers as well as standing water such as reservoirs and lakes, can be used as long as they are in the open and heated by the sun. The Government has a target of 4.5 million heat pumps across the UK, though most will be using heat from air or ground and will be small domestic units. Prof. David MacKay, until recently DECC’s chief scientific adviser, has described a combination of heat pumps and low carbon electricity as the future of building heating. However, as I’ve noted before, there are limits to the viability of small domestic systems: they make most sense in off gas-grid areas. Larger units, feeding district heating networks, are more efficient, and make more sense in urban areas, where there are large heat loads. Operation at the larger scale also make it easier to provide an effective maintenance regime, important for heat pumps, which need careful adjustment and servicing to maintain optimal performance. Otherwise the coefficient of performance (CoP), usually expected to be around 3, can fall dramatically. For example, in winter in damp cold countries like the UK, the external heat absorption pipes of air source heat pumps can develop a film of frost, reducing the heat flow. Without regular de-icing, the pump then has to work harder, potentially, in the extreme, reducing the CoP to perhaps 1 or less- making it less efficient than a simple one bar electric fire.

Moreover, large or small, the current type of heat pump run on electricity, and it’s been argued that the idea of shifting to heat pumps instead of gas for home heating on a national scale may be suboptimal, since using heat pumps run on mains electricity generated in large gas fired-plants, may be no more efficient than using gas direct in a domestic scale condensing boiler. It’s also argued that the wide-scale use of electric heat pumps is impractical, since the electricity network could not supply the large amount of power needed – the gas grid carries 4 time more energy than the power grid. It’s perhaps worth noting in this context that in the 1950’s, Southbank’s Festival Hall was heated by a large 7.5MW gas fired heat pump using the Thames as a heat source, although it seems it was taken out mainly as it produced too much heat: it was oversized www.architectsjournal.co.uk/home/rolls-royce-performance/181204.article#

There is now renewed interest in gas-fired absorption cycle heat pumps. They are less efficient than the electric motor driven compression-cycle variant, but gas is cheaper/kWh than electricity, much of which, after all, is made inefficiently by burning gas (and coal), so a 50% net fuel saving is claimed. At the World Renewable Energy Congress in London in August, Prof. Bob Critoph from the University of Warwick noted that there were now three domestic gas-fired systems on or very near to market (Robur, Vaillant, and Viessmann) with others under development. He proposed a mixed heating solution with both gas-fired and electric heat pumps, and also the use of hybrid electric heat pump-gas boiler systems, e.g. for older properties. He felt that the proposed mix, whilst not being the minimal emission route, was an affordable and pragmatic solution to domestic heating. There are of course other novel ideas, for example solar thermal fired absorption cycle heat pumps, which may have relevance even in the UK, with the combined air source/solar Solaris system claimed to be 25% more efficient than standard air-source electricity-powered units depending on location: www.uk-isri.org/case-studies/solaris and http://cordis.europa.eu/publication/rcn/16280_en.html

Whatever the heat and power source, are heat pumps the way ahead? Some say that large community scaled gas-fired combined heat and power (CHP) plants, with CoP equivalents of up to 20, are better in energy efficiency and carbon emission terms than heat pumps of any scale or type. That may be true at present, but, longer term, if electric heat pumps use green electricity, or gas fired heat pumps use green gas (biogas or stored gas produced using surplus wind/solar-derived power), then net emissions would be near zero. Although the same would be true for green gas fired CHP.

In the final analysis, given its high CoP, CHP seems to have the edge for the moment, but, in economic terms, the optimal systems choice may depend on the location and the size of the load. One of the largest gas-fired heat pump systems so far is the 140kW unit at Open University: http://www.modern-building-services.co.uk/news/archivestory.php/aid/9841/__65279;Ener-G_teams_up_boreholes_with_absorption_heat_pumps_.html

In some locations, large water sourced units may make sense, but large gas-fired units might have even wider applications. But then so may CHP, linked to district heating networks. However, to complicate matters further, it may not be a straight choice between CHP and heat pumps: e.g. a heat pump can be run using electricity from a CHP plant, while using the heat from the CHP plant as its heat source, thereby upgrading the heat output. Plenty of room for innovation! http://setis.ec.europa.eu/system/files/JRCDistrictheatingandcooling.pdf

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Why only comparing energy prices is the wrong approach: a case study of residential photovoltaic costs in Germany and the United States

Introduction to 3-part discussion:

This 3-part series discusses the cost of residential photovoltaic (PV) panels in the U.S. compared to Germany, and shows that while most aspects are different, there are some important similarities. This creates a nuanced perspective on answering the question: “Is residential PV more or less expensive in the U.S. compared to Germany?”

  1. The paid cost of installing residential PV is much cheaper in Germany versus the U.S.  This relates to the facts that the U.S. and Germany have different:
    1. regulations, experience and learning from installing PV, and profit margins for installers (see Part 1),
    2. financial incentives to promote PV installations: the Feed-in-Tariff (FiT) in Germany versus the Personal Tax Credit (PTC) in the U.S. (see Part 2), and
    3. culture and roles for government that created differences in electricity prices, tax policies (for energy and other goods), and social services.
  2. Despite the differences, the U.S. and Germany both spend the same fraction of their GDP on both residential electricity and total energy (see Part 3). An amazing coincidence? That is a question for further study, but it provides evidence that
    1. overall energy costs are similar in each country, and
    2. you cannot separate the cost of energy in a country from the broader context of that country’s energy and social policies

Part 1: Comparing Cost of Residential PV in Germany versus the United States

Part 1: short intro

Past surveys show that the cost of installing residential PV in Germany are much lower than in the U.S. even though the technology is the same.  In 2011, it cost twice as much to install a PV panel on your roof in the U.S. versus Germany. The major differences in installed costs relate to each country’s different incentive programs, regulations, profits, and labor costs.   Here I use older data on prices and costs (from 1980-2011), but the concepts here are applicable no matter what the updated costs of any particular energy technology. To learn more, click here for more details.

Part 1: more details

Customer financial incentives have been heavily influential in promoting the installation of residential photovoltaics (PV).  As the cost of PV panels themselves has dropped over the past several years (from 4-5.5 $/W in 2006 to 1-4 $/W in 2011, [1]), so has the installed cost of the panels also dropped.  NOTE: All discussion of installation costs assumes the unit of “constant, or real, 2011 U.S. dollars”, or “$2011”, even, but I refrain from specifying the year 2011, and simply use “$”.

What you pay as a PV owner is usually termed the “installed cost.” The cost of the PV panel is one of the major components of the installed cost of PV, but there are other significant costs such as inverters (convert direct current to alternating current), mounting design and materials, regulatory costs, profits, and labor costs.   In other words, you can buy a PV panel and set it on your lawn, but it costs more money to pay someone to put it on your roof and wire it to your house.

Let us focus on the question of PV installation costs for residential applications (as opposed to large scale solar farms).  Lawrence Berkeley National Laboratory (LBNL) investigated this question in comparing the installed costs of PV in the United States and Germany in 2011 [2].  This comparison is interesting because the cost of the PV panels themselves was exactly the same but installed costs of residential PV systems in Germany were much lower than in the U.S. In 2011 the cost in the U.S. was 6.2 $/W versus 3.0 $/W in Germany (see Table 1).

If I define “soft costs” as those other than for materials and hardware, there is a 2.7 $/W difference in “soft costs” between the U.S. and Germany.  This difference accounts for the vast majority of the installed PV cost disparity. Half of this difference is 1.6 $/W in U.S. installer profit versus 0.3 $/W profit in Germany.  However, the labor costs in the U.S. were 0.59 $/W versus 0.23 $/W in Germany. Further, U.S. installers spent an average of 75 person-hours per installation versus 39 person-hours in Germany.  Both electricians and non-electricians involved in installing PV in the U.S. also get paid more per hour than their counterparts in Germany. Thus, U.S. installers spend more time at higher wages when installing PV panels while making higher profit.  According to LBNL, some of the reason for more installation person-hours in the U.S. is due to a higher proportion of PV systems installed on roofs that require penetrating the roof (due to different roofing materials and some higher wind speeds in U.S.) and additional regulatory requirements that govern installation criteria.

Table 1.  Average installed cost of residential PV panels in 2011, in Germany and the U.S., as estimated by the Lawrence Berkeley National Lab [2] (BoS = balance of system).

Cost item U.S. ($/W) Germany ($/W) U.S. 2010 (labor hrs) Germany 2011(labor hrs)
Module 1.83 1.82
Inverter 0.55 0.33
Other hardware 0.47 0.23
Profit + labor + other 3.34 0.62
Installation labor only 0.59 0.23 75 39
Profit only 1.61 0.29
Total 6.19 3.00

The results of the LBNL study are enlightening (all referencing costs in 2011 U.S. dollars):

  • PV module costs are the same in U.S. and Germany: PV modules are sold in a global market and prices are similar around the world,
  • Other “balance of system” hardware was slightly more expensive in U.S. versus Germany,
  • Installation costs are over twice as high in the U.S. than Germany, and perhaps half this cost difference (~ 1.3 $/W) was due to German installers having more experience from installing more capacity than in the U.S. (the more you install, the faster and cheaper you can install), and

There are many reasons for these results, the reasons are difficult to separate, and hence, all people do not agree on the reasons.   Perhaps two of the most influential factors are (i) the differences in financial incentives and (ii) the price of residential electricity in the U.S. and Germany  To read about the financial incentives, click here: Part 2: PV Incentives, and to read about residential electricity prices, click here: Part 3: The Price is Wrong – U.S. versus Germany.

Part 1: References

[1] IEA (2012) TRENDS IN PHOTOVOLTAIC APPLICATIONS: Survey report of selected IEA countries between 1992 and 2011, Report IEA-PVPS T1- 21 : 2012, available January 7, 2014 at: http://www.iea-pvps.org/index.php?id=3&eID=dam_frontend_push&docID=1239.

[2] Joachim Seel, Galen Barbose, and Ryan Wiser (2013), Why Are Residential PV Prices in Germany So Much Lower Than in the United States? A Scoping Analysis, Lawrence Berkeley National Laboratory, February 2013 Revision, (with Updated Data on Installation Labor Requirements), available January 7, 2014 at: http://emp.lbl.gov/publications/why-are-residential-pv-prices-germany-so-much-lower-united-states-scoping-analysis.

[3] ALSO SEE: Galen Barbose, Naïm Darghouth, Samantha Weaver, and Ryan Wiser, (2013). Tracking the Sun VI: An Historical Summary of the Installed Price of Photovoltaics in the United States from 1998 to 2012 (report LBNL-6350E), July 2013, available January 7, 2014 at: http://emp.lbl.gov/publications/tracking-sun-vi-historical-summary-installed-price-photovoltaics-united-states-1998-201.

[4] DSIRE website, Federal Incentives/Policies for Renewables & Efficiency: (http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US37F).

 

Part 2: Residential PV financial incentives

Part 2: short intro

For financial incentives, Germany has used a Feed-in Tariff (FiT) and the U.S. has used a Personal Tax Credit (PTC) for residential installations (the corollary is the Investment Tax Credit (ITC) for commercial systems) [1].   The FiT incentivizes production and sales of electricity whereas the PTC incentivizes capital investment to enable the PV owner to offset the purchase of electricity.  It is important to understand the differences in impacts from these different incentive policies. Some believe the PTC in the U.S. has incentivized U.S. installers to increase the installed cost to obtain the government rebate.

Part 2: More details

For financial incentives of installing residential PV systems, Germany has used a Feed-in Tariff (FiT) and the U.S. has used a Personal Tax Credit (PTC) (the counterpart is the Investment Tax Credit (ITC) for commercial systems) [1].   It is important to understand the differences in impacts from these different incentive policies.

In Germany, the FiT pays the PV owner a fixed price for each kWh fed into the electric grid (i.e., for each kWh not used by the home owner).  In 2004, the value of the FiT was equivalent to 0.90 $/kWh decreasing to approximately 0.40 $/kWh by 2011[1] [2]. This was a planned decrease in the value of the FiT as part of the original incentive law in Germany.  As a comparison, the German residential electricity price, including taxes, was 0.23 $/kWh and 0.35 $/kWh in 2004 and 2011, respectively (see Figure 2.1). For most of its history, until 2012, the FiT was higher than the price of electricity, and is the main reason that Germany has more PV solar capacity than the U.S.

Part2_Figure1

 

 

 

 

 

 

Figure 2.1. Residential electricity prices, including taxes, in the U.S. and Germany based upon nominal U.S. dollars [original data source: IEA Energy Prices and Taxes].

 

In the U.S., the PTC subsidizes the installation of the PV system by reducing the cost of the installation by 30% of installed costs. This incentive is independent of the quantity of electricity actually generated by the PV panels.  An important difference between the FiT and PTC is that the PTC is a “tax credit.” A tax credit reduces the federal taxes for the PV owner.  Thus, if I install a PV system at cost of $10,000, I get a $3,000 PTC (at 30% of $10,000) to help pay my taxes.  If the owner owes fewer taxes than all money received via the PTC during the year of installation, then the owner cannot fully take advantage of the PTC in that year.  The PV owner can carry over the tax credit to the next tax year (at least until 2016 per the Energy Improvement and Extension Act of 2008) [1].

Remember this important distinction: the FiT incentivizes renewable electricity generation, and the PTC acts to reduce the fixed percentage part of the cost of installation.

In Germany, both the FiT (selling PV electricity to grid) and relatively high retail electricity price (compared to the U.S.) incentivize the homeowner to generate PV electricity.  Residential electricity prices in Germany are approximately three times those in the U.S (see Figure 1).  The FiT and electricity price pushes German installers to compete for customers on installed costs since the installer does not benefit from PV electricity sales or a federal rebate.  Some believe the PTC in the U.S. has incentivized (to some degree) U.S. installers to increase the installed cost to obtain the highest government rebate, but not so high as to be uncompetitive.  Here I explain how this can be interpreted.

While the 2011 average total installed system PV costs in the U.S. were over 100% higher than Germany (see Table 1 of Part 1), another common way to compare costs is to look at the cumulative amount of installation costs, rather than during a single year.  The reason for this second method is based on the idea that as more of a technology is installed, the more efficient and cheaper it becomes to install the technology due to installers “learning” how to do better each time.  Thus, it can be considered more ‘equivalent’ to compare installed costs at the same cumulative quantity of installation rather than the same calendar year.

To assess “learning” effects of PV installation, I focus only on costs of installation, or the “non-module” costs (i.e., all costs other than the price of the PV panel). The Lawrence Berkeley Lab study notes that the non-module costs of PV were only about 36% higher (4.9 vs. 3.6 $/W) in the U.S. versus Germany at the same cumulative installed capacity of approximately 4-5 GW [2].  That is to say, after both countries installed 4 GW of residential PV (in 2007 for Germany and 2011 for the U.S.), the U.S. installation cost was 36% higher than in Germany – very close to the PTC level in which the U.S. government subsidizes 30% of the full installation cost.

Is this a coincidence? Perhaps, but there is logic behind the rationale that federal incentives based on installed costs act to increase the installed cost.  In other words, when the federal government provides the PTC to the consumer, the consumer afford a 30% higher price for a PV installation, and the consumer effectively passes that incentive to the installer.

Is the FiT of Germany or the PTC of the U.S. better? I say there is no answer to this question, but you must read Part 3: The Price is Wrong that discusses electricity prices and expenditures to understand why.

Part 2: References

[1] DSIRE website, Federal Incentives/Policies for Renewables & Efficiency: (http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US37F).

[2] Joachim Seel, Galen Barbose, and Ryan Wiser (2013), Why Are Residential PV Prices in Germany So Much Lower Than in the United States? A Scoping Analysis, Lawrence Berkeley National Laboratory, February 2013 Revision, (with Updated Data on Installation Labor Requirements), available January 7, 2014 at: http://emp.lbl.gov/publications/why-are-residential-pv-prices-germany-so-much-lower-united-states-scoping-analysis.

 

Part 3: The price is wrong: how to determine if solar photovoltaic electricity is cheap

Part 3: short intro

It is not the price of residential electricity (or price of energy in general) that is the best determination of whether or not electricity is expensive.  Instead, a better metric is the total expenditures on energy relative to total household incomes, country GDP, or other metrics using some measure of wealth or disposable income.  When compared to GDP, both the United States and Germany spend 1−1.5% of GDP on residential electricity, even though the price of residential electricity in Germany is three times that in the U.S.  Further, the U.S. and Germany spend the same fraction of GDP on total energy. To learn more, click here for more details.

Part 3: more details

In Part 1 I discussed that in 2011 the installed cost of residential photovoltaics (PV) in the U.S. (6.2 $/W) was twice as high as in Germany (3.0 $/W).  In Part 2, I explained that the higher costs are completely due to “non-module” costs, or all costs other than the PV module that houses the PV cells that generate electricity from sunlight.  In this discussion I contextualize the price and expenditures for residential electricity in the U.S. and Germany.

The costs of installed PV are often discussed in units of “dollars per watt of installed capacity,” or “$/W.”  This is different than the cost of the generated electricity over time, stated as “dollars per kilowatt-hour” ($/kWh), or perhaps “cents per kilowatt-hour.”  For most of us, our electricity bill is based upon an electricity price rate in units of $/kWh. Thus, if I consumed 1,000 kWh per month, and my monthly electricity rate is 0.10 $/kWh, I owe $100 for that electricity.

Ultimately as consumers we care more about $/kWh than the installed cost as $/W, but the installed cost is the dominant cost factor that determines the $/kWh cost of PV electricity.  The other major factor is how much the sun shines where you install the panel.  The amount of sunlight in a given location is called “insolation.”  In Germany, the annual solar insolation is 1,000-1,500 kWh/m2/yr whereas the U.S. varies more widely from 1,400 kWh/m2/yr in western Washington to 2,500 kWh/m2/yr in the desert Southwest (see the very informative National Renewable Energy Laboratory map comparing insolation rates in the U.S. to Germany [1]).  The higher the insolation, the more electricity is generated, and the lower the cost (in $/kWh) of PV electricity.  Thus, for the same cost of installation, in $/W or total dollars, the “levelized” cost of electricity in $/kWh can be over twice as high in Germany as in the U.S.

Figure 3.1 shows U.S. and German residential electricity prices (including taxes).  In 2010 the German residential electricity price was approximately three times that of the U.S.  Both prices include taxes.  German taxes are 40-45% of the total price, and U.S. taxes are usually 0%-10% depending upon the state (often based on the state sales tax) [3].  This large difference in taxation reflects one of the main reasons why it is hard to compare price across countries.

The tax rates, not only on electricity, reflect many differences in the culture, politics, energy resource availability, and social structure between each country.  Both the U.S. and Germany are world leaders in technological innovation, so taxes do not describe differences in incentivizing technology, though it is relevant to note that the industrial electricity price in Germany is approximately 1/3 of the residential price.  But because Germany provides more social services than the U.S., taxes on citizen consumption are higher to pay for these services. I won’t pontificate whether either strategy is better or worse, but for now note that they are different.

Part3_Figure1

Figure 3.1.  Residential electricity prices, including taxes, in the United States and Germany.  Units are in nominal U.S. dollars per megawatt-hour.  Data are from International Energy Agency [3].

 

Since residential electricity prices are difficult to compare in the U.S. and Germany due to varying social service and taxation policies, how can we determine if residential electricity, much less PV panels, are cheaper in one place or another?  One way is to look at total expenditures on energy.  Expenditures equal price times consumption. Figure 3.2 shows total expenditures on residential electricity in both countries as a fraction of GDP in each country (another valid metric would be expenditures as a fraction of household income).  The interesting finding is that both the U.S. and Germany spend about the same amount on residential electricity: typically 1.0% – 1.4% of GDP!  This means that while the average American has a lower residential electricity price (1/3 those of Germany) they consume a much higher quantity of electricity than the average German (almost 3 times more).  In 2011, residential electricity consumption in the U.S. was approximately 35% of total electricity at 1,440 TWh & 4,600 kWh/person; in Germany it was approximately 26% of the total at 140 TWh & 1,700 kWh/person [5, 6]. Taking this concept one step further, we can ask: Does one country spend more on electricity but less on natural gas (for example), or vice versa?

Figure 3.3 shows the fraction of country GDP spent on all energy, including commodities such as oil that typically dominate overall energy expenditures.  Amazingly, again since the 1980s, the U.S. and Germany have spent the same fraction of GDP on energy!  This similarity occurs despite very different histories, cultures, social structures, policies, and energy prices.

Because of this similar trend of Figure 3.3, we cannot say that energy is more or less expensive in either one of these countries, since countries allocate the same fraction of their economic output to pay for energy. It therefore might be most accurate to say that energy costs are very close to equal in the U.S. and Germany. Other important details about energy imports versus exports, and their effect on trade balance provide further insight (e.g., Germany net imports a higher share of its energy than the U.S. but has a trade surplus, whereas the U.S. runs an account deficit) but I will save a detailed discussion of this complicated issue for another day.

Part3_Figure2

Figure 3.2. The fraction of country GDP spent on residential electricity, using prices that include taxes, in the United States and Germany.  Data are from International Energy Agency.  Estimated expenditures are from calculations of the author [7].

Part3_Figure3

Figure 3.3  The fraction of GDP estimated as spent on energy in the United States compared to Germany. Energy expenditures are equal to annual price multiplied by annual consumption quantity.  “Energy” is composed of: oil (including crude oil, natural gas liquids, and other unrefined feedstocks), natural gas (residential, industrial, and for electricity generation), coal gas (residential, industrial, and for electricity generation), and both industrial and electricity consumption coming from the fraction of electricity generation from non-fossil generation (e.g., nuclear, hydropower).  Except for oil (first import price), the prices for consuming each energy commodity include taxes. Estimated expenditures are from calculations of the author [7].

Part 3: References

[1] NREL map of solar insolation in the United States and Germany: http://en.openei.org/w/index.php?title=File:NREL-pvmap-usgermanyspain-poster-01.jpg.

[2] How Different Energy Sources Create Electricity Price Differences Between Countries, Available February 6, 2014 at: http://www.theoildrum.com/node/7215.

[3] IEA Energy Prices and Taxes: http://www.iea.org/statistics/topics/pricesandtaxes/.

[4] Finnish Energy Industries (2010), Energy Taxation in Europe, Japan and The United States, available February 6, 2014 at: http://energia.fi/sites/default/files/et_energiav_naytto_eng_040211.pdf.

[5] EIA International Energy Statistics, accessed September 5, 2014 at: http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=2&pid=2&aid=2.

[6] World Bank population data for 2011, accessed September 5, 2014 at: http://data.worldbank.org/indicator/SP.POP.TOTL.

[7] King, Carey W. and Maxwell, John P. (Master’s Thesis), in preparation for journal article.

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Renewables vs shale gas

By Dave Elliott
As a parting shot, after standing down as DECC’s Chief Scientific Advisor at the end of July, Prof David MacKay produced a comparison of renewables (wind and solar) and shale gas: http://withouthotair.blogspot.co.uk/2014/08/shale-gas-in-perspective.html

The headline figure (as picked up by the Telegraph: http://bit.ly/1BgLC95) was that wind farms cover around 700 times more land area /kWh of energy produced at the site than shale gas wells. However, as usual with renditions of MacKay’s approach to land-use comparisons, this simple statistic is arguably a little misleading. As he admits, the actual area covered by wind turbine bases and access roads is very much less that the area covered by the wind farm, most of which can be farmed as usual. So, using his figures, the wind turbine /gas well land use ratio falls from 700:1 to 18:1

There are also other aspects that need to be considered in the comparison, some of which he covers in side notes. The energy content of the shale gas emerging from the well isn’t the same thing as the electricity output of a wind farm (or solar farm)- the gas has to be burnt in a power plant to generate energy (at 50% efficiency at best) and that also takes up room. This might reduce the wind turbine /gas land use ratio from 18:1 to perhaps 9:1 or less. And unless we condone the release from the gas-fired power plant of CO2 to the air, there will also have to be a carbon capture plant and a CO2 gas storage system- taking up a large area somewhere, and reducing the efficiency of the gas plant. That might add another factor of 2 or more, so maybe we are down to a ratio of 4:1 or less.

Hydraulic fracking also uses very large amount of water– that has to come from somewhere. It also creates large amounts of contaminated water, which has to be stored and/or treated, presumably somewhere else. It’s hard to know how to take these factors into account in land use terms. Another factor of 2? In the final analysis, overall, there might not be that much in it, if the land-use comparison is done fairly, at least for on-land wind, depending on location. And of course the whole land-use comparison collapses if we are talking about offshore wind. Or for that matter, offshore shale wells.

MacKay also looks at ground-mounted solar farms. Certainly solar farms (as opposed to roof-mounted PV arrays) do take up land space, on MacKay’s figures, around 8.5 times more than for wind turbines/kWh, although less than the total equivalent wind farm area. But, rebalancing the comparison, the Solar Trade Association has pointed out that much of this land can be grazed and most (perhaps 95%) of it can be used for wild flower growth, aiding biodiversity:
http://solar-trade.org.uk/media/140428%20STA%20BRENSC%20Biodiversity%20Gudelines%20Final.pdf

MacKay also looks at the truck movements associated with each option. His figures for solar and wind (nearly all during construction) seem high, those for shale gas low: he assumes all water is piped to and from the shale gas well site, but surely some water, and certainly fracking chemical fluids, would have to be tanked in throughout the operation, while some wastes would have to be tanked out. As for visual intrusion, his choice, for comparisons sake, of 10 temporary shale gas-drilling towers, may well be perceived as uglier but less invasive overall than his choice of 87 much taller 2MW wind turbines, though it will surely depend on the location. Some people positively like the look of wind turbines, seeing them as elegant symbols of low-impact energy extraction. It’s hard to see drilling rigs like that, although we have yet to have major shale gas projects in the UK to test that out. If, as it has been suggested, the UK may have 1000 wells started each year, attitudes may harden, as projects attempt to go ahead and impacts become apparent. My favorite unknown is whether excess gases will have to be flared off. That would make for quite a spectacle in rural areas…

At it stands, DECC’s most recent public opinion survey found that 79% of those asked backed renewables like wind and solar (82% backing solar, 67% on-land wind) while only 24% supported shale gas extraction: https://www.gov.uk/government/statistics/public-attitudes-tracking-survey-wave-10

There are also wider strategic issues: an emphasis on shale gas could undermine the development of renewable energy and efforts to respond to climate change. Scientists for Global Responsibility (SGR) and the Chartered Institute of Environmental Health (CIEH) have produced a report reviewing current evidence associated with shale gas extraction. SGR Director and report co-author, Dr Stuart Parkinson, said: ‘The evidence we have gathered shows that exploiting yet another new source of fossil fuels such as UK shale gas is likely to further undermine efforts to tackle climate change. We need to focus on low carbon energy sources, especially renewables, together with concerted efforts to save energy.’ The report calls for rethink, arguing not only that impacts may be high and regulatory oversight insufficient, but also that on-land wind power may be cheaper than shale gas. www.sgr.org.uk/pages/shale-gas-and-fracking-examining-evidence

The governments current decarbonisation policy envisions fossil gas being replaced as a heating option by green electricity from wind and solar and by nuclear electricity, used to power heat pumps. See my next post. That could make for a huge saving in gas – and emissions. And it would reduce the need to import increasingly expensive gas as north sea reserves dwindle. There will still of course be a need for gas to run electricity generating gas turbines, with some of those being used at times to balance variable renewables like wind and solar. However, although some new more flexible gas plants may be needed as old ones retire and renewables expand, the extra gas required for balancing, over and above what is used by the gas CCGT units at present, will be relatively small. And, as the Pugwash 2050 scenario explored, using the DECC calculator, if UK renewables expanded to 70% and alternative supply and demand side balancing options were developed, the need for gas for power generation would fall, so that, with proper commitment to energy saving, by 2050 well under 10GWof gas fired capacity would be needed. And increasingly it could use green gas- from biomass/waste AD and also possibly via surplus wind/PV to gas conversion, some of this also being use at high efficiency in CHP plants feeding district heating networks. There are disagreements about how much biomass could be available and used, but the Tyndall Centre says that by 2050, 44% of the UK’s energy requirements could be met by the increased utilisation of biomass, including household waste, agricultural residues and home-grown energy crops i.e. with no imports: www.tyndall.ac.uk/communication/news-archive/2014/uk-failing-harness-its-bioenergy-potential

It is possible than gas could find a new market in transport, assuming the governments plan to see that electrified via a shift to electric vehicles is not successful. Certainly SNG/CNG could play a helpful role in fuelling trucks and large vans. But, as the Tyndall report suggests, much of this could be green gas. So why exactly do we want all this shale gas? Perhaps, with, tragically, renewable expansion already being constrained by government policies, it’s to compensate for that and also in case the nuclear expansion programme fails to materialize.

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Biomass burning impacts: the debate continues

By Dave Elliott
The seemingly endless debate on the impacts of burning biomass continues. At one extreme there are those who see almost all use of biomass as suspect. More specifically there are objections to using whole trees or stem wood, especially if imported so that the source is less sure. One claim is that this can produce more carbon emissions net than would be produced from burning coal, and depletes biogenic carbon stores.

It’s actually a complex issue, since forests are managed for a variety of purposes. As a new EU report on ‘Biogenic Carbon and Forest Bioenergy’ from Forest Research notes:
‘Typically, forest bioenergy is produced as a complementary co-product of wood material/fibre products. It is unusual for forest bioenergy to be the sole product from harvested wood’. However it says EU forest bioenergy is likely to increase significantly, so that ‘it will be necessary to intensify management of EU forests in order to increase removals of primary wood and/or import more wood into the EU and/or mobilise the availability of sources of other woody biomass.’ But it claims ‘A requirement to produce forest bioenergy seems unlikely to become the principal driver of forest management unless demand for forest bioenergy becomes very intense’. In particular is suggest that ‘demand for forest bioenergy seems likely to be met through increased extraction of harvest residues including poor-quality stemwood and trees, the use of sawmill co-products and recovered waste wood. Some small roundwood may be used as a source of bioenergy. It is less likely that forest bioenergy will involve consumption of wood suitable for high value applications, such as sawlogs typically used for the manufacture of sawn timber’.

Having set the scene it notes that, given this complex and changing pattern of sourcing, ‘Biogenic carbon can make a very variable contribution to the GHG emissions associated with forest bioenergy. Consequent GHG emissions can vary from negligible levels to very significant levels (similar to or greater than GHG emissions of fossil energy sources)’, although ‘in some specific cases, forest bioenergy use may be associated with net carbon sequestration’ e.g. when the replanting or rotation rate is high.

Nevertheless ‘There is widespread recognition in the research literature that increasing the levels of wood harvesting in existing forest areas will, in most cases, lead to reductions in the overall levels of forest carbon stocks compared with the carbon stocks in the forests under previous levels of harvesting. Where the additional harvesting is used to supply bioenergy as the sole product, then such forest bioenergy will typically involve high associated GHG emissions (i.e. compared with fossil energy sources) for many decades.’
http://ec.europa.eu/energy/renewables/studies/doc/2014_05_review_of_literature_on_biogenic_carbon_report.pdf

It is this that groups like Friends of the Earth (FoE) and Biofuelwatch focus on, claiming that this is now what is happening- to feed giant biomass combustion plants like Drax with wood pellets from North America, some of which are allegedly made from stemwood. Even so that doesn’t necessarily mean they are against the use of all biomass. For example FoE’s new report ‘Felled for Fuel’ focuses on, and objects to, ‘burning trees for electricity’. Instead it wants the government to ‘refocus support for bioenergy on the use of feedstocks such as agricultural and forestry wastes and biogas from sewage, food waste and other organic wastes’ and also to limit the use of the available sustainable biomass ‘to modern combined heat and power (CHP) plants which would ensure the most efficient use of these limited feedstocks, making use of the energy for heat as well as generating electricity’. www.foe.co.uk/sites/default/files/downloads/felled-fuel-46611.pdf

FoE does see overall biomass use as being constrained though by more careful assessment of sources and their bio-impacts. It calls for ‘the government’s ambitions for bioenergy to be scaled down and capped at a level that ensures supplies can be
sourced sustainably and domestically’. That raises many issues. Some see bio-conversion of big old coal plants as a useful stop gap, but if that’s not on, then others look to specially grown energy crops as a viable new source, in addition to wastes. And to the use of wood for heat production at the local level. It’s a broad ranging debate.

DECC’s new, long awaited, Bio-carbon Calculator may help clear the air a bit in relation to large scale biomass conversion plants. DECC uses it to assess a range of scenarios for the net carbon balance that would be associated with North American biomass used in the UK, with different land use changes assumed. It concludes that ‘in 2020 it may be possible to meet the UK’s demand for solid biomass for electricity using biomass feedstocks from North America that result in electricity with GHG intensities lower than 200 kg CO2e/MWh, when fully accounting for changes in land carbon stock changes. However, there are other bioenergy scenarios that could lead to high GHG intensities (e.g. greater than electricity from coal, when analysed over 40 or 100 years) but would be found to have GHG intensities less than 200 kg CO2e/MWh by the Renewable Energy Directive LCA methodology’.

So it can produce more emissions than coal, but also, done right, with proper choice and regulation of sources, it can be fine. The Renewable Energy Association agreed: ‘Anyone using biomass in accordance with the guidelines set out by the UK government would be lower-carbon than other fuels.’

However DECC says the energy input requirement of biomass electricity generated from North American wood used by the UK could be significantly greater than other electricity generating technologies, such as coal, natural gas, nuclear and wind. That may limit its use. But DECC says Energy Input Requirements can be cut e.g. by reducing transport distances and the moisture content of the biomass. So overall it sees some projects as viable. www.gov.uk/government/publications/life-cycle-impacts-of-biomass-electricity-in-2020

Will that end the debate? Unlikely! FoE said it was vital to have tougher regulation and clearly it’s not convinced that stem wood isn’t being used. But at least the various stakeholders are almost now on the same analytical page, or ought to be, in relation to biomass conversion! How they then decide to respond in terms of strategic development priorities is another matter. Interestingly, DECC won an appeal against a Judicial Review ruling that required it to reinstate a large DRAX biomass conversion project which it had turned down. So it won’t now happen. And DECC has also said, in its allocation statement for future CfD rounds (limiting them to £205m p.a.), that it was‘ not at present intending to release a further budget for biomass conversion’, i.e. after the current ‘early’ CfD round. Clearly biomass conversion is something of a hot potato! https://www.gov.uk/government/news/over-200-million-boost-for-renewables

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