Russia close to economic collapse as oil price falls, experts predict

www.guardian.co.uk

Russia is now lurching towards a major economic crisis, experts predicted today, following news that the price of oil had slumped to under $50 a barrel.

The collapse in the value of oil was likely to have several catastrophic consequences for Russia including a possible devaluation of the rouble and a severe drop in living standards next year, they warned.

With oil prices tumbling, and his own credibility at stake, Russia’s prime minister Vladimir Putin today insisted that the country’s economy was still robust.

Speaking at a meeting of the pro-Kremlin United Russia party, Putin told delegates in Moscow the country would survive the current global financial turmoil - which he blamed on the US.

But the Kremlin is acutely aware that any loss of confidence in the Russian economy could lead to a loss of confidence in Putin and his ally Dmitry Medvedev, who took over from Putin as Russia’s president in May.

Medvedev’s biggest initiative so far has been to float an extension in the presidential term from four to six years - a proposal that entrenches the current Kremlin’s grip on power, and which Russia’s loyal Duma is likely to approve on Saturday.

Putin today said his administration would do everything it could to prevent a recurrence of Russia’s last oil-related financial crash in 1998 - which saw the savings of many ordinary Russians wiped out. But the plummeting oil price leaves him little room for manoeuvre. Experts suggest that Russia’s economy is now facing profound difficulties, despite two massive stabilisation funds accumulated during the booming oil years.

The fall in oil prices from $147 this July to below $50 today has blown a gaping hole in the government’s budget calculations. It is now facing a $150bn shortfall in its spending plans - and will have to slash expenditure in 2009.

Today Putin sought to assure hard-up Russians that their social benefits would not be affected, promising a $20bn assistance package. “We will do everything, everything in our power … so that the collapses of the past years should never be repeated,” he said.

The oil slump, however, exacerbates Russia’s already severe economic problems. Since May Russian markets have lost 70% of their value. Russia’s central bank, meanwhile, has been spent $57.5bn in two months trying to prop up the country’s ailing currency.

“If the current trend continues with the government supporting the rouble, oil prices falling and a slowing economy we are going to have a major crisis,” said Chris Weafer, an analyst with the Moscow brokerage Uralsib.

He added: “There will be more pressure on the rouble and an extremely difficult first quarter next year.” Russia was more vulnerable than other countries because it was still an oil state, and had failed to diversify its economy, Weafer added.

Both Putin and Medvedev have blamed the Bush administration for the current financial mess. Putin today accused the US of recklessness. “Cheap money and mortgage troubles in the US have caused a real chain reaction, [and] paralyzed the global financial market,” he complained.

Russia’s state-controlled TV has also sought to portray the crisis as an American problem, largely ignoring its impact at home. This strategy was not very sensible, analysts suggested today, since job losses and salary cuts in Russia were beginning to mount.

“In terms of the trigger Putin is correct. The bomb came from the US,” Weafer said. He added, however: “The shockwaves have hit a much weaker structure than the [Russian] government has acknowledged. The economy is going to hell in a handcart.”

Original article

http://www.guardian.co.uk/world/2008/nov/20/oil-russia-economy-putin-medvedev

Plumbing the oceans could bring limitless clean energy

www.newscientist.com

by Phil Mckenna

FOR a company whose business is rocket science Lockheed Martin has been paying unusual attention to plumbing of late. The aerospace giant has kept its engineers occupied for the past 12 months poring over designs for what amounts to a very long fibreglass pipe.

It is, of course, no ordinary pipe but an integral part of the technology behind Ocean Thermal Energy Conversion (OTEC), a clean, renewable energy source that has the potential to free many economies from their dependence on oil.

“This has the potential to become the biggest source of renewable energy in the world,” says Robert Cohen, who headed the US federal ocean thermal energy programme in the early 1970s.

This has the potential to become the biggest source of renewable energy in the world

As the price of fossil fuels soars, private companies from Hawaii to Japan are racing to build commercial OTEC plants. The trick is to exploit the difference in temperature between seawater near the surface and deep down (see diagram).

First, warm surface water heats a fluid with a low boiling point, such as ammonia or a mixture of ammonia and water. When this “working fluid” boils, the resulting gas creates enough pressure to drive a turbine that generates power. The gas is then cooled by passing it through cold water pumped up from the ocean depths via massive fibreglass tubes, perhaps 1000 metres long and 27 metres in diameter, that suck up cold water at a rate of 1000 tonnes per second. While the gas condenses back into a liquid that can be used again, the water is returned to the deep ocean. “It’s just like a conventional power plant where you burn a fuel like coal to create steam,” says Cohen.

The idea of tapping the ocean’s different thermal layers to generate electricity was first proposed in 1881 by French physicist Jacques d’Arsonval but didn’t receive much attention until the world oil crises of the 1970s. In 1979, a US government-backed partnership that included Lockheed Martin, lowered a cold water pipe from a barge off Hawaii that was part of an OTEC system generating 50 kilowatts of electricity. Two years later, a Japanese group built a pilot plant off the South Pacific island of Nauru capable of generating 120 kilowatts.

In the first flush of success, the US Department of Energy began planning a 40 megawatt test plant off Hawaii. Then in 1981, the funding for ocean thermal technologies began to dwindle. It dried up altogether in 1995 when the price of oil began to drop, eventually falling below $20 a barrel.

Now rising fuel costs have revived interest in this neglected technology. In September, the Department of Energy awarded its first grant for ocean thermal energy in more than a decade, giving Lockheed Martin $600,000 to develop a new generation of cold water pipes.

Cohen believes this could eventually lead to 500 MW OTEC plants on floating offshore platforms sending electricity to onshore grids via submarine cables, and factory ships “grazing” the open ocean for power.

Lockheed’s first goal is to get a test facility up and running. The company has got together with Makai Ocean Engineering of Waimanalo, Hawaii, to build a 10 to 20 MW plant, most likely off Hawaii, that it hopes to have up and running in the next four to six years. The plant - including a 1000-metre pipe some 4 metres in diameter - would feed electricity to the island’s energy grid via submarine cables.

While Lockheed gears up for its test facility, a plant for the US military could come online even sooner. OCEES International, based in Honolulu, is finishing designs for an ocean thermal facility to be built off the island of Diego Garcia in the Indian Ocean, which is home to a major US military base.

The plant would provide 8 MW of electricity and would also power the desalination of 1.25 million gallons of seawater per day. OCEES says it could be up and running by the end of 2011.

At the moment Diego Garcia is powered entirely by diesel fuel, and base commanders see ocean thermal as a means to energy independence. “It’s a strategic military installation in the middle of the Indian Ocean,” says Harry Jackson of OCEES. “They don’t want to rely on others to provide their power.”

“I think OTEC has the potential to develop sufficient power output much quicker than wave buoys or tidal power would,” says Bill Tayler, director of the US navy’s Shore Energy Office. “It would take a lot of buoys to produce 8 to 10 MW of power. We’re looking at them all but have our hopes on OTEC.”

Still, both teams will have to work out issues such as how to connect the floating, bobbing platforms to fixed submarine power lines. Heat exchangers will have to be designed in a way that prevents excessive buildup of algae, barnacles and other marine organisms that could clog the system.

If these test plants are a success, larger, commercial-scale plants could transform the energy equation on Hawaii, where nearly 77 per cent of electricity is generated by burning oil. “It will be the major energy game changer for our state and elsewhere in the world if we can get OTEC working well at the 100 MW level or larger,” says Lockheed collaborator Reb Bellinger of Makai Ocean Engineering.

But scaling up won’t be easy. “A 100 MW plant might have a pipe 30 feet in diameter suspended 3000 feet. That’s not a small challenge. You’ve got this huge structure vertically suspended. You’ve got a lot of stresses and strains from current, from the movement of platform on the surface - how you are going to anchor it and install it?” asks Bellinger.

Smaller designs have already run into trouble. In 2003, Indian engineers building a 1 MW ocean thermal plant attempted to lower an 800-metre cold water pipe into the ocean from a barge in the Bay of Bengal only to lose the pipe in 1100 metres of water. A new pipe met the same fate the following year. “Both times there were some winch problems and it fell to the bottom of the sea,” says Subramanian Kathiroli, director of India’s National Institute of Ocean Technology. “I don’t think we will ever be able to go beyond 5 to 10 MW with present knowledge,” he says.

Yet the technology will have to be scaled up if OTEC is ever to make a significant impact on the green power market. Hans Krock, who has worked on OTEC designs for the University of Hawaii, the US Department of Energy and others since 1980, says he’s tired of testing. “Pilot tests have been done,” Krock says. “It’s not a matter of design, it’s a matter of getting the economics right.”

Krock, who founded OCEES in 1988, recently left to start Energy Harvesting Systems, a firm with ambitious plans to build a 100 MW OTEC plant off the coast of Indonesia. The electricity it generates will be used to produce hydrogen, a green fuel that could be used to power zero-emission vehicles. Krock says he has funding for the $800 million plant and it could be up and running within two years, once building contracts are finalised.

For Cohen, who has also waited decades for ocean thermal to come into its own, such a large plant seems overambitious, especially as it is coupled with the production of hydrogen, whose distribution structure is still largely undeveloped.

“Scaling up so quickly could be risky,” warns Cohen. “I’d like to see us move fast on ocean thermal but I think we have to be careful.”

Lake ontario helps toronto chill out

As governments and private companies around the world look to capitalise on ocean thermal energy, an offshoot of the technology is already up and running. Instead of trying to harness cold, deep water for electricity production, the city of Toronto in Canada uses water from the bottom of Lake Ontario to cool its buildings. Makai Ocean Engineering of Waimanalo, Hawaii, recently helped construct the city’s cold-water air conditioning system that will save 60 megawatts of electricity when it is fully connected to buildings in the city’s centre. The system works by pumping water at a temperature of 4 °C from a depth of 80 metres and then sending it to buildings within the city via three pipes, each5 kilometres long. The cold water is then used to cool air.Makai is working on a similar cold-water air conditioning system for Honolulu in Hawaii. “Ocean thermal energy is the big prize, but cold-water air conditioning can play a major role in cutting energy needs, and it can do it today,” says Reb Bellinger of Makai.

Original article:

http://www.newscientist.com/article/mg20026836.000-plumbing-the-oceans-could-bring-limitless-clean-energy.html?full=true

Duke Energy Generates Unique Wind Energy Partnership with World’s Largest Retailer

www.marketwatch.com

Duke Energy has entered into an agreement with Wal-Mart, the largest retailer in the world, to provide electricity for its growing Texas market.
This partnership will be the first substantial purchase of wind energy in the U.S. by Wal-Mart. The deal also represents one of the first sales of power directly from a specific wind project to a major retailer.
Beginning in April 2009, Wal-Mart will purchase electricity directly from Duke’s Notrees Windpower Project, located in Ector and Winkler counties, Texas. The project will provide clean, renewable energy to up to 15 percent of 360 Wal-Mart stores and other facilities in Texas.
“We’re proud to partner with Wal-Mart on this innovative initiative,” said David Marks, Duke Energy Generations Services senior vice president of wind energy. “Our customers want energy products and services that keep them competitive, yet respond to environmental concerns.”
The first phase of the Notrees facility will enter commercial operation in December.
This generation capacity is part of the 500 megawatts of wind power Duke Energy will have on line by the end of this year. Duke’s Ocotillo Windpower Project, located in Howard County, Texas, began operations in September. When completed in 2009, the Notrees project will provide 150 megawatts of electricity.
Duke Energy Generation Services (DEGS) develops, owns and operates electric generation for large energy consumers, municipalities, utilities and industrial facilities. DEGS specializes in developing innovative and environmentally sound generation solutions using a variety of fuels, including wind and other renewable energy sources.
Duke Energy, one of the largest electric power companies in the United States, supplies and delivers electricity to approximately 4 million U.S. customers and natural gas service to approximately 520,000 customers in its regulated jurisdictions. The company has approximately 35,000 net megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky. In addition, Duke Energy has more than 4,000 net megawatts of electric generation in Latin America, and is a joint-venture partner in a U.S. real estate company.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.
Forward-looking statement
This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “target,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” and similar expressions. Forward- looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements; state, federal and foreign legislation and regulatory initiatives that affect cost and investment recovery, or have an impact on rate structures; costs and effects of legal and administrative proceedings, settlements, investigations and claims; industrial, commercial and residential growth in Duke Energy Corporation’s (Duke Energy) service territories; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on Duke Energy operations, including the economic, operational and other effects of hurricanes, droughts, ice storms and tornadoes; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; unscheduled generation outages, unusual maintenance or repairs and electric transmission system constraints; the results of financing efforts, including Duke Energy’s ability to obtain financing on favorable terms, which can be affected by various factors, including Duke Energy’s credit ratings and general economic conditions; declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy’s defined benefit pension plans; the level of credit worthiness of counterparties to Duke Energy’s transactions; employee workforce factors, including the potential inability to attract and retain key personnel; growth in opportunities for Duke Energy’s business units, including the timing and success of efforts to develop domestic and international power and other projects; the performance of electric generation and of projects undertaken by Duke Energy’s non-regulated businesses; construction and development risks associated with the completion of Duke Energy’s capital investment projects in existing and new generation facilities, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules, and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; and the ability to successfully complete merger, acquisition or divestiture plans. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

original article

http://www.marketwatch.com/news/story/Duke-Energy-Generates-Unique-Wind/story.aspx?guid={FB1E81AF-C7DD-4F79-8AF7-19CB952269BF}

IEA Oil Report: “Time is Running Out”

energyandcapital.com

Nothing Short of an Energy Revolution

By Chris Nelder
Thursday, November 13th, 2008

After some six months of leaks and previews, the long-awaited World Energy Outlook report from the International Energy Agency (IEA) is finally out. And in many ways, it is the bombshell we expected.

The agency struck a new tone of urgency in the report, as it sharply reduced its outlook for the growth of world oil production.

The opening paragraph was blunt and on the mark:

The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable - environmentally, economically, socially. But that can - and must - be altered; there’s still time to change the road we’re on.[1] It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution.

For the first time, the IEA included in its analysis a study of the depletion rates of the world’s top 800 oil fields. Why they didn’t include that crucial information in the past we don’t know, but as readers of these pages are well aware, it’s the hole in the bucket that is the very heart of the peak oil study.

The rates they found were high enough to surprise even me: 6.7%[2] for past-peak fields, increasing to 8.6% by 2030 (the end date of the report’s “reference scenario”). Averaged across all fields, the rate is 5.1%,[3] but that includes 3.4% for the very largest fields, 6.5% for the next-largest and 10.4% for the next size down.

This is important, because the fields being discovered today are all in the smaller categories. As the world’s largest and most productive fields, which are also its oldest, go past their peaks and into decline, the smaller newer fields with the higher depletion rates play a more dominant role.

Decline rates eac 11-13-08

But these are only the “observed decline rates.” The authors distinguish that from a “natural decline rate,” which “strips out the effects of ongoing and periodic investment” (whatever that means; as far as I am aware, all oil fields require some sort of ongoing investment). The authors note that the natural decline rates “are about a third higher on average than observed decline rates,” with a current global average of about 9%, increasing to 10.5% by 2030.

Against such high decline rates-up from a generally accepted 4.5% estimate only a year ago-the agency calculates that the world will need to add a whopping 64 million barrels per day (mbpd) of new capacity between 2007 and 2030 in order to meet an anticipated demand growing at 1.6% per year.

That’s like adding six new Saudi Arabias (up from five less than two years ago, when I wrote Profit from the Peak).

That’s like adding a new Kuwait every single year.

The report goes on to say if the world does not add 30 mbpd of new capacity by 2015—equivalent to three new Saudi Arabias—it “will cause an oil-supply crunch” by 2030. More incredibly, that 30 mbpd must include 7 mbpd of new capacity above and beyond all currently planned projects! That’s over 1 mbpd of new, unplanned, unfunded capacity, plus a presumed 5 mbpd of planned new capacity (which seems highly doubtful) every year for the next 6 years.

Where Do You Find Six New Saudi Arabias?

One might reasonably ask then, just where exactly do they think all that new oil is going to come from, since global oil discovery has been in continuous decline for over 40 years?

The IEA sidesteps this question, blithely noting that “The volume of oil discovered each year on average has been higher since 2000 than in the 1990s, thanks to increased exploration activity and improvements in technology, though production continues to outstrip discoveries (despite some big recent finds, such as in deepwater offshore Brazil).”

A chart of the history of world oil discovery quickly nullifies that thin argument:

oil discovery trends 11-12-08

Here is the IEA’s scenario, in graph form, on where those six new Saudi Arabias will come from:

oil supply outlook eac 11-13-08

You can see the clear peak of “currently producing fields” right around now, after which we’ll have a massive increase in “fields yet to be developed” followed by another big chunk of “fields yet to be found.” A steady increase in “non-conventional oil” and natural gas liquids round out the supply picture. (We’ll get to the problems with this scenario in a moment.)

Finally, they project that the rate of oil production will increase fairly steadily to 104 mbpd (excluding refinery gains) by 2030, at which point a peak in global production is implied, but not directly stated:

Although global oil production in total is not expected to peak before 2030, production of conventional oil - crude oil, natural gas liquids (NGLs) and enhanced oil recovery (EOR) - is projected to level off towards the end of the projection period. Conventional crude oil production alone increases only modestly over 2007-2030 - by 5 mb/d - as almost all the additional capacity from new oilfields is offset by declines in output at existing fields. The bulk of the net increase in total oil production comes from NGLs (driven by the relatively rapid expansion in gas supply) and from non-conventional resources and technologies, including Canadian oil sands.

Out of morbid curiosity, I dug up a few older World Energy Outlook reports from the IEA for comparison. Their 2006 report had oil production increasing to 116 mbpd by 2030, needing only $4.3 trillion in investment to achieve. And their 2004 report didn’t see any peak before 2030, and needed only $3 trillion to achieve 121 mbpd by 2030.

See a pattern here? They’re slowly backing into the truth.

Here’s my prediction: their 2010 report will state that the new peak is only 95 mbpd, at a cost of over $30 trillion. And by 2012, they’ll admit that the peak was in fact in June of this year, at 87 mbpd. By 2030, fully 20 years past the peak, world oil production will likely be under 70 mbpd.

Coming Clean

Several new admissions caught my eye.

For one, they finally seem to have put their hopes for a resurgence in non-OPEC production to rest, saying it is “at plateau and is projected to start to decline by around the middle of the next decade.” This was a bit of a vindication for me, as I had struggled with the lower-quality data I could get nearly three years ago when researching Profit from the Peak, and concluded that all future production would have to come from OPEC, despite what the official projections said.

Another pleasant surprise was this statement: “The super-majors have been struggling to replace their proven reserves and expand production, while the share of their cash earnings that is returned to shareholders has been growing.” Back when I was writing Profit from the Peak I suspected as much, but wasn’t able to round up the data to completely prove it, and besides, my Wall Street buddies thought I was being too “conspiratorial” about that point. Boo-yah, boys!

I also have to applaud their sharp criticism of the way that the corrupt governments of the African oil-producing nations do not share their oil revenue wealth with their desperately impoverished peoples. This is an issue I wrote about in the book that is hardly ever mentioned in the energy press, but which remains a serious threat to future oil production. So long as the criminal inequity of the status quo maintains, Africa will never be stable enough that we can count upon her to help produce the world’s precious few remaining barrels.

The $26 Trillion Question

In order to accomplish all this, the IEA projects that the world will need to spend $26 trillion[4] by 2030, or over $1 trillion per year. Of that, over $13 “goes simply to maintain the current level of supply capacity” because so much of the world’s energy infrastructure will need to be replaced by then. As Matthew Simmons has often noted, most of the existing worldwide oil industry infrastructure is literally rusting away.

Ultimately, this report chooses to lay the question of future oil production at the feet of investors. If that $1-trillion-plus a year materializes, the IEA believes the energy can be had. If not, it won’t be the fault of geology or technology that oil production doesn’t meet our projected demand. And their projected increases will have to come from essentially unproven sources.

So much for their scenario. Our question is: Can it be done? Or perhaps more accurately, will it be done?

Yhprum’s Law

The only way I can see the IEA scenario coming to pass is under the opposite of Murphy’s Law, which Wikipedia tells me is “Yhprum’s Law.” That is, everything that can possibly go right, will. In particular:

  • Most of the new oil and gas production would have to come from OPEC, since non-OPEC is “at plateau.” [That phrasing is so pretentious that from now on, I shall refer to the oil peak as a plateau with an aristocratic French accent.] Yet only Saudi Arabia has any real hope of significantly increasing its supply. It has recently produced around 10 mbpd, it has a stated capacity of about 12 mbpd, and some anticipate (while others doubt) that it will eventually reach 15 mbpd. But that’s really about it for any OPEC production growth. The Saudi king has also stated more than once that he’s more interested in long-term stewardship of the resource than in short-term maximization of profits. So let’s be generous and give all of OPEC a net production increase of 5 mbpd over current levels.
  • IEA anticipates a massive new wave of production from the Canadian tar sands. Yet Suncor and other major tar sands producers have recently announced that they are scaling back their production plans due to the low price of oil, the uncertain global growth outlook, and problems in arranging credit for the massive capital needed to expand these projects amid a global credit market lockup. From a current level of about 1.5 mbpd production from the tar sands, I believe the research that points to a possible 3.5 mbpd a plateau by 2030. But the absolute peak of 5 mbpd looks increasingly doubtful, due to the availability and cost limitations on water and natural gas. So I’d allow no more than another 2 mbpd for the tar sands by 2030.
  • Third, the reliance on enhanced oil recovery (EOR) will prove, I think, to be a false hope. The decades-long history of EOR suggests that perhaps it doesn’t increase total recovery at all, it just produces some of the remaining oil faster; or in the best case, it thickens and lengthens the tail of production somewhat. The implication in the report that the global recovery rate might be raised from the current roughly 30% to some 40% seems highly unlikely to me based on the historical evidence.
  • The report still claims that reserves are growing in a significant way (which is wishful thinking) and that current proven reserves of oil and NGLs of around 1.2-1.3 trillion barrels “is enough to supply the world with oil for over 40 years at current rates of consumption.”

    This is truly one of the low points of the report, since the authors surely know that oil production doesn’t go a plateau for decades, then suddenly hit a wall and go to zero. After the peak, it declines, gradually, on the back of a bell curve. By avoiding any clear statement on the global peak, and pinning such enormous hopes on such slim straws as EOR and undiscovered fields, the report avoids having to deal with such unpleasant details.

    The fact is that 20 years from now, we’ll likely be down to three-quarters of today’s energy budge, and 40 years from now, we’ll be down to less than half. That’s the fact that any honest assessment of our situation would emphasize, not some misleading statistic about 40 years’ worth of oil. It’s more like 100 years’ worth, at production rates that decline relentlessly, starting right about now.

  • The report claims that ultimately recoverable conventional oil resources will prove to be 3.5 trillion barrels. Again, this seems extremely unlikely, as it is based on a significant amount of oil yet to be found, and highly questionable reserves growth. I believe 2.3 trillion barrels is closer to the right number here, with 1.1 already produced and 1.2 still to go.
  • Similarly, the report anticipates a production of 1-2 trillion barrels from tar sands and extra-heavy oil (the stuff that Venezuela has in abundance), plus oil shales (which I believe will never prove to be economical), for a total of some 6.5 trillion barrels. Then they add in another 2.5 trillion barrels for coal-to-liquids and gas-to-liquids, for a total of 9 trillion barrels in unconventional what-have-yous. This conjecture would require another entire article to debunk, so I won’t get into it now (it’s all in my book anyway), but suffice to say that I would be very surprised to see this lot, put together, add more than half a trillion barrels to the recoverable total.
  • The money, the money, the money. Can anybody really conjure up a scenario, given the current state of the financial markets and the prospect of a global recession for the next year or more, that the world is somehow going to commit to spending more than $1 trillion per year for the next 22 years straight? When oil is hitting new lows daily, and a global deleveraging is sucking money out of every energy investment under the sun? If they can, I want some of what they’re smoking.

    IEA chief economist Fatih Birol expressed his own concerns: “We see and hear about energy investments being delayed … This is a major worry and could lead to a supply crunch and much higher oil prices than we’ve seen before.”

    The press slide deck reinforced this point, asking if the financial crisis and economic slowdown will affect investment in energy to the point where it sets us up for a supply crunch once the economy gets back on its feet. (This is an important question I plan to take up in a future article.)

The $35 Trillion Challenge

As for the price outlook on oil, I think the agency’s assessment was good:

Prices are likely to remain highly volatile, especially in the next year or two. A worsening of the current financial crisis would most likely depress economic activity and, therefore, oil demand, exerting downward pressure on prices. Beyond 2015, we assume that rising marginal costs of supply exert upward pressure on prices through to the end of the projection period.

The report also placed a heavy emphasis on controlling carbon emissions, and was unequivocal about the importance of merging the energy and climate change challenges into a unified effort—something I have advocated for years. I have no doubt that carbon emissions will soon come with a global price, and that those who are well positioned to profit from it, be they carbon credit marketers or wind power generators, will see a booming future. In addition to the $26 trillion investment in energy infrastructure, the report suggests another $9.2 trillion will need to be invested in carbon control in order to meet a goal of 450 parts per million of CO2 equivalent in the atmosphere.

So that’s our global challenge: to invest another $35 trillion in energy and carbon emissions over the next 20 years. That means an unprecedented market opportunity for clean energy technologies like wind, solar, geothermal, biomass and marine energy. It means that we literally must throw money hand-over-fist at renewable energy and an electrically powered infrastructure.

In sum, I don’t find their scenario terribly credible. Adding another 64 mbpd of oil production capacity from the existing, very well explored, and very well exploited resource base-a 74% increase over current levels-seems quite impossible even under the best of circumstances, let alone attempting it even as the largest fields are going into decline.

Which means that the real outlook for oil production and its cost is likely much worse than even this dire-sounding warning from the IEA suggests. And the outlook for renewable energy is even greater.

While the report certainly has its flaws, on the whole I think it’s a big move in the right direction for the IEA. It’s heartening to see them stepping up and addressing the twin devils of climate change and peak oil more directly, and I hope that the world is paying attention to its unflinching warning.

We’ll let them have the last word:

For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed, but not necessarily in the way we would like to see…[W]hile market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over…It is within the power of all governments, of producing and consuming countries alike, acting alone or together, to steer the world towards a cleaner, cleverer and more competitive energy system. Time is running out and the time to act is now.

http://www.energyandcapital.com/articles/iea-oil-report/782

Tech Watch: Nukes In Your Yard and Fuel Cells In Your Pocket

fastcompany.com

Two companies are doing two very different things to address the energy problem in America. How about a mini-reactor giving your neighborhood nuclear power? Or would you like thin fuel cell chips to give your gadgets juice?

there are two energy sources that folks aren’t exactly comfortable with, it’s hydrogen fuel cells and nuclear power. The first involves using and storing large amounts of highly explosive liquid hydrogen, and is reminiscent of that most menacing of atomic bombs. The second one calls to mind Chernobyl, Three Mile Island, and, well, atomic bombs. But we might be well served to get over our fear of fission and hydrogen if we’re to avail ourselves of the solutions of the future, two of which bring nuclear power and fuel cells uncomfortably close to home. More specifically, into your neighborhood, and into your pants.

The first device is a compact nuclear power plant about the size of a minivan that could power up to 20,000 homes, and run uninterrupted for 10 years without needing to be refueled. The energy modules were originally the brain-child of scientists at Los Alamos National Laboratory, but have since been commercialized and developed by a company called Hyperion Power Generation. Hyperion announced this week that it is now taking orders for the mini-reactors, and will commence mass production within five years.

Hyperion claims that the diminutive power plants, which can be buried underground - out of sight, out of mind, as the saying goes - will generate electricity for about $0.10 a watt, anywhere in the world. That’s greater than the average cost of residential electricity in the United States, but for areas with high-density energy needs and little space for electrical infrastructure, the Hyperion devices could be a good deal at $25 million each. Distributed over 10,000 homes, for example, the cost is only $2500 for an entire decade of electricity.

The plants are easily transported because of their small size, and can be plopped down in remote areas that don’t currently have electricity available. They have no moving parts, and never require service or maintenance. The company says the device is incapable of “going supercritical,” or in lay-speak, melting down and killing everyone; if the enclosure is breached or a malfunction occurs, the fuel cools instead of suffering a run-away reaction. It’s also not a terror risk, says the company; to enrich the fuel to weapons-grade, you’d need “nation-state resources.” After its ten years of fuel are spent, it produces a wad of waste about the size of a melon, which could theoretically be recycled into new fuel, or lobbed at your neighbor’s place with a water-balloon launcher.

Hyperion says it already has 100 orders for its devices, mostly from oil and electrical utilities companies. The company plans to build 4,000 mini nuclear modules between 2013 and 2023, which may sound like wide distribution - unless compared to the potential market a new energy technology called Fuel Cell Sticker, made by a company called MyFC. Their fuel cells can fit inside cell phones, of which there are some 3.3 billion in the world, as of 2007.

Fuel Cell Stickers are ultra-thin hydrogen fuel cells that are malleable and foldable, and look something like sticks of gum with webbed, metallic facing. The small hydrogen packs could be molded to fit inside curved, irregularly-shaped mobile phone enclosures like the backplate of Apple’s iPhone 3G, providing long-term battery power in a smaller form-factor than traditional lithium ion batteries.

The first actual product to incorporate the Fuel Cell Sticker technology is MyFC’s 1636 Chip. It measures only 3mm thick at .2 ounces in weight, and has a maximum output of 0.75 watts; that’s less than a RIM Blackberry battery, but multiple stickers can be layered inside a phone enclosure for more power. The 1636s should be entering commercial production soon, and will sell for reasonable, consumer-level prices according to CrunchGear. To see how electrochemical devices generate power, check out a good summary on MyFC’s website. Let’s hope that tiny fuel cells can’t go “super critical” either - especially while one is in your pants pocket.

original article

http://www.fastcompany.com/news/2008/11/11-fuel-cell-sticker-hyperion-nuclear%20energy.html

How Floating ‘Energy Islands’ Could Power the Future

livescience.com

The ocean harbors abundant energy in the form of wind, waves and sun. All of these could be sampled on something called an Energy Island: a floating rig that drills for renewables instead of petroleum.

The concept is the brainchild of inventor Dominic Michaelis. He was originally unsatisfied with the slow progress in developing ocean thermal energy conversion (OTEC), a process in which cold water is pumped up from the deep ocean to generate electricity.

“Nothing new was happening with OTEC, so I thought why not bring other marine energy technologies on board?” Michaelis said.

The Energy Island that he and his son have designed would have an OTEC plant at its center, but spread across the 2,000-foot-wide (600-meter-wide) platform would also be wind turbines and solar collectors. Additionally, wave energy converters and sea current turbines would capture energy from water moving around the structure.

One of these hexagonally-shaped islands could generate 250 megawatts (enough power for a small city), Michaelis said. Even more power is possible by mooring together several Energy Islands into a small archipelago that could include greenhouses for food, a small harbor for ships and a hotel for tourists.

To attract possible investors, the Energy Island team will present their concept this week at the U.S. China GreenTech Summit in Shanghai.

Running hot and cold

The principle reason to build an Energy Island is to harvest OTEC.

“The advantage of OTEC over other marine energy technologies is that it’s constant, 24 hours a day and all year round,” Michaelis told LiveScience.

This is because it is based not on the sun or the wind or the waves, but on the temperature difference between warm water at the sun-heated surface and cold water in the deep, dark ocean.

The biggest temperature differences can be found in tropical seas, where the surface water is around 80 degrees Fahrenheit (25 degrees Celsius).

This warm water is drawn in from around the Energy Island and used to evaporate a working fluid, which might be seawater or ammonia. The resulting vapor pushes a turbine that produces electricity.

To condense the vapor back to fluid, cold water at about 40 degrees Fahrenheit (5 degrees Celsius) is pumped up from a half mile below the surface. This condensation creates a pressure drop that helps suck more vapor through the turbine blades.

The same basic process occurs in a coal-fired or nuclear power plant, but the temperature difference between water boilers and cooling towers is much greater than in an OTEC system.

Large overhead

The first OTEC plant was built in 1930 on a Cuban shoreline and produced 22 kilowatts of power. Only a handful of other facilities (both floating and land-based) have been constructed since, with the largest being a 250-kilowatt pilot plant in Hawaii. None are currently operating.

The main drawback has been the inherent inefficiency of converting a relatively small temperature difference into electricity. In fact, some of the early OTEC designs used more energy than they were able to produce.

An OTEC plant requires a lot of energy to circulate massive amounts of water. The Energy Island, for example, will need more than 100,000 gallons (400 cubic meters) of cold water pumped up per second.

This is why Michaelis incorporates other marine energy technologies to help “prime” the OTEC system.

Fringe benefits

The clean power generated by an Energy Island could be transmitted to shore by underwater cables. Or it could be used to make hydrogen from water, and this hydrogen fuel could be shipped to the mainland in order to produce electricity in fuel cells.

The exported electricity might run 9 to 13 cents per kilowatt-hour, depending on how the project is financed, Michaelis said. A single Energy Island has an estimated price tag of $600 million.

However, electricity is not the only thing these man-made isles can offer.

If seawater is used as the OTEC working fluid, it will be desalinated through the cycle of evaporation and condensation. For each megawatt of electricity produced, an OTEC plant can supply 300,000 gallons of fresh water per day, Michaelis said.

Moreover, the cold water pumped up from the ocean depths is full of nutrients that could support fish farms or some other form of aquaculture.

original article

http://www.livescience.com/environment/081112-pf-energy-islands.html

Engineer has leak proof CO2 storage idea

upi.com

A U.S. engineer says he’s developed a leak-proof carbon sequestration storage method that eliminates the risk of CO2 escaping via buoyancy.

Engineering Professor Steven Bryant and colleagues at the University of Texas at Austin note the standard approach to carbon capture and storage involves injecting compressed CO2 into a deep underground formation.

But Bryant said that risks the gas, which is less dense than water, might escape from the storage formation through buoyancy.

Bryant suggests instead of injecting compressed CO2 directly into a deep underground formation, wells should be drilled in the salt-water filled formation and the salt water extracted.

He said the carbon dioxide could then be dissolved in the salt water and the CO2-laden water pumped back into the same formation. Since the CO2-laden water is denser than compressed carbon dioxide and slightly denser than the original brine, it will have no tendency to rise toward the surface.

“This process has several advantages,” Bryant said, “but the most important is that it eliminates the risk of sequestered carbon dioxide escaping from the storage formation.

Bryant is to present his research in Washington next week during the ninth annual International Conference on Greenhouse Gas Control Technologies.

original article

http://www.upi.com/Science_News/2008/11/13/Engineer_has_leak_proof_CO2_storage_idea/UPI-34401226602797/

Green Car Technology Plans of the World’s Richest Investors

www.hybridcars.com

As concerns over global warming, high gas prices, and dependence on foreign oil snowballed in the last few years, movers and shakers around the country decided to get in on the green car revolution. For six of those megamillionaire entrepreneurs, owning a Prius just wasn’t enough—each has taken major stakes in a green transportation technology. But as these men surely know—or are about to learn—most small green car and alternative fuel companies face an uphill battle. Which of these wealthy tech investors do you think will be the most successful?


1Warren Buffett

(Net Worth: $62 Billion+)

Buffett

“Export Chinese-made, plug-in hybrid cars”

The Plan: Warren Buffet recently acquired a 10 percent stake in the Chinese electric carmaker, BYD, for $232 million. BYD hopes to use the money to expand into the US and European markets. The company has unveiled a pair of plug-in hybrid sedans, quoting all-electric ranges from 60 to 70 miles. BYD says it hopes to sell cars in Europe and the US by 2010.

The Reality: Crash tests have proved disastrous for BYD thus far, and manufacturing a car that can meet rigorous American safety standards by 2010 is probably nothing more than a pipe dream.

2 T. Boone Pickens

(Net Worth: $3 Billion)

Pickens

“Convert cars to run on compressed natural gas”

The Plan: Before becoming one of America’s most iconic oilmen, T. Boone Pickens spent his youth wildcatting, which is the practice of drilling semi-random holes in the ground in search of oil. His strategy for solving the energy crisis is decidedly more targeted—though it still involves drilling lots more holes in the ground. Pickens spent nearly $60 million promoting the use compressed natural gas in automobiles, which is the centerpiece of his “Pickens Plan” for energy independence.

In addition to promoting the technology through television commercials and a failed California ballot initiative, Pickens invested $160 million into the development of a mass-market natural gas vehicle. He is also the primary shareholder of Clean Energy Fuels, America’s largest compressed natural gas distribution company.

The Reality: The Pickens Plan can’t succeed without massive government support, and thus far there is little evidence to suggest that his advertising campaign has moved people or politicians beyond moral support to real action—especially considering the current lack of CNG vehicles and refueling infrastructure. Many critics point out that converting American vehicles to CNG simply replaces one form of non-renewable energy with another, setting us up for another energy crisis down the road.

3Andy Grove

(Net Worth: Around $400 million)

Miles

“Retrofit gas-guzzlers into plug-in hybrids”

The Plan: Andy Grove started at Intel in its infancy—he was its third employee—and eventually rose to the rank of chief executive. Since retiring, Grove has become an activist for a post-petroleum America. He fears a future in which the major countries in the world—particularly the United States and China—go to war over the oil that is the lifeblood of their economies.

At a July 2008 energy conference, Grove touted conversions of conventional vehicles into plug-in hybrids as our best hope for energy independence. He called on federal tax credits covering the retrofitting of 10 million trucks, vans, and SUVs by 2012. Grove also asked for more support from venture capitalists and the Small Business Administration to stimulate growth in the sector leading to cheaper, more efficient conversions.

The Reality: It’s one thing to convert a hybrid, like a Toyota Prius, into a plug-in hybrid, but converting a standard gasoline vehicle into a plug-in hybrid is an entirely different matter. It requires impractical and unproven tactics like mounting extra external wheels or motors to existing cars. It’s unlikely that entrepreneurs or a cash strapped federal government will approve the kind of money to support what is widely considered a non-starter.

4Miles Rubin

(Net Worth: Unknown)

Miles

“Manufacture the first mass-market, all-electric sedan”

The Plan: Miles Rubin made his fortune trading textiles and medical devices, eventually running Ralph Lauren’s blue jean line in the ’90s. He’s been involved in the environmental movement since the 1970s when he lobbied Congress to promote alternative energy sources, but Rubin’s big dive into green capitalism didn’t come until 2004, when he founded Miles Electric Vehicles. He’s already invested $35 million into the venture and expects to double that number by the time Miles’ next release hits the market.

The company started out with two low-speed neighborhood electric vehicle releases, the ZX40ST Electric Truck, and the ZX40 (a subcompact car.) The limited market for these vehicles makes it difficult for carmakers to reach the economies of scale that would enable them to be profitable however, so Miles’ make or break offering will be the XS500 Highway Speed Sedan. Slated for release in 2009, the XS500 will be able to hit speeds of up to 80 mph, and is expected to cost between $30,000 and $35,000—after a $7500 government rebate.)

The Reality: Miles has yet to complete crash tests on the XS500 sedan, and its prospects are far from certain. Furthermore, as an all-electric car, the XS500 will have a driving range of roughly 120 miles—which is not practical for many car buyers. If the XS500 is forced to compete with a similarly priced plug-in hybrids that can run on both gas and electric to achieve a driving range comparable or higher than a gas-powered car, it’s difficult to imagine it succeeding.

5Vinod Khosla

(Net Worth: $873 million)

Khosla

“Shift away from hybrids to biofuel cars”

The Plan: Vinod Khosla was co-founder of Sun Microsystems in the early 1980s and went on to form the capital investment firm, Khosla Ventures, entirely with his own money. Khosla has made dozens of investments in green energy firms, and has a special place in his heart—and wallet—for biofuels. Said Khosla in a recent Huffington Post article:

“High cost options like hybrids and electric cars may sound good, but are unlikely to materially reduce carbon emissions. The only cost effective option likely to get broad market acceptance is cellulosic fuel cars in the next decade or two.”

The Reality: Corn-based ethanol is viewed by many as more of a giveaway to farmers than a viable form of renewable energy. Fluctuations in corn prices have lead to troubled times for many ethanol producers, with one of the largest players in the game, VeraSun, filing for bankruptcy protection last week. The so-called second generation of biofuels, such as cellulosic ethanol made from feedstocks including wood chips and switchgrass, face similar financial challenges. And that’s if the cellulosic technology pans out—far from certain.

It’s quite possible that Khosla will end up losing a significant amount of money on his ethanol investments if current trends continue. Billionaire Richard Branson has already renounced his earlier support for biofuels on “economic and environmental grounds,” but Khosla remains committed.

6Elon Musk

(Net Worth: more than $300 million)

Musk

“Build high-end, all-electric cars”

The plan: In 1999, Elon Musk co-founded the company that would eventually become PayPal, and owned 12 percent of PayPal at the time of its sale to eBay for $1.5 billion. Since then, Musk has split his time between SpaceX, a space exploration company, and Tesla Motors, makers of a $109,000 high-performance all-electric sports cars. He’s already invested more than $55 million of his fortune into Tesla and expects to spend even more before the company launches its slightly more affordable second model.

The Reality: Tesla Motors acknowledged that it is losing money, struggling financially, laying off employees, and closing its Detroit-area office. It’s unknown how long it will take for the company to deliver the $109,000 Roadster to 600 customers with confirmed orders. The Model S, its second model, has been pushed back several times, leading many to take its current 2011 release date with a grain of salt.

From Tesla’s earliest days, critics have questioned its core energy strategy—powering a new ground-up vehicle via 6,831 laptop batteries all wired together.

original article:

http://www.hybridcars.com/investing/green-car-technology-plans-of-worlds-richest-investors-25230.html

IEA: After the credit crunch, the oil crunch: watchdog warns over falling supplies

www.guardian.co.uk

The International Energy Agency is to call today for an energy revolution and a “major de-carbonisation” of global fuel sources as the world confronts tighter oil supplies caused by shrinking investment.

The energy watchdog is warning for the first time that oil output could pass its peak as power shifts from “super-majors” to national companies controlled by producer states. It highlights a potential oil-supply crunch.

The unprecedented wake-up call comes as the European commission says in a report due out tomorrow that while oilfields decline, the balance of supply and demand will become “increasingly tight, possibly critically so”.

It adds: “The need to address climate change will require a massive switch to high-efficiency, low-carbon energy technologies.”

The commission report warns that oil supplies are limited, with reserves and spare output capacity concentrated in a few hands. “Recent severe price rises and volatility on oil and gas markets reflect these changing trends”, it says.

Both bodies express heightened anxieties that the west’s energy requirements could be squeezed as emerging economies such as China consume more oil and conclude long-term deals with oil-rich states. This could be exacerbated by a restriction on investment by the Organisation of Petroleum Exporting Countries (Opec) - possibly joined by Russia - to boost revenues. Opec will control 51% of output by 2030 compared with 44% in 2007.

Rising demand

The IEA’s latest World Energy Outlook predicts that global energy demand will increase 45% between now and 2030 and oil prices will rise to $200 a barrel by then - or $120 at 2007 prices.

It says the recent surge in prices to just shy of $150 this summer has highlighted the “ultimately finite” nature of oil and gas reserves.

“The immediate risk to supply is not one of a lack of global resources, but rather a lack of investment,” the report says. “Upstream investment has been rising rapidly in nominal terms but much of the increase is due to surging costs and the need to combat rising decline rates - especially in higher-cost provinces.”

“Expanding production in the lowest-cost countries will be central to meeting the world’s needs at reasonable cost.”

The IEA was founded during the oil crisis of 1973-74 and acts as energy policy adviser to 28 countries including Britain.

Global oil demand and supply is projected to rise from 84m barrels a day to 106m in 2030, with all of this increase driven by emerging economies, but the IEA sees conventional oil output peaking before then. Most of the increased production will come from natural gas liquids and non-conventional technologies such as Canadian oil sands.

Adequate investment

The agency says there is enough oil to support rising demand and output, with proven reserves of up to 1.3tn barrels - or enough for 40 years - and potential reserves of as much as 3.5tn barrels. But it says the increased output “hinges on adequate and timely investment”.

Up to 64m barrels a day of extra gross capacity - the equivalent to almost six times that of Saudi Arabia today - needs to come on stream between 2007 and 2030. Almost half of that is required by 2015, with an extra 7m barrels a day over current plans approved within the next two years “to avoid a fall in spare capacity towards the middle of the next decade”.

The IEA warns bluntly: “There remains a real risk that under-investment will cause an oil-supply crunch in that timeframe.”

It says a detailed analysis of 800 fields owned by 54 “super-giants” shows that the decline in production is likely to accelerate as oilfields become depleted. This means that the global decline rate of 6.7% for fields past their peak will increase to 8.6% in 2030 and may fall even faster, at 10.5%, without adequate investment.

The 50 largest oil companies, the IEA says, plan to invest $600bn (£380bn) in upstream oil and gas by 2012. But such companies often do not have access to the regions with the largest reserves. The national companies in countries such as Saudi Arabia and Venezuela will account for 80% of increased output by 2030.

“The dominance of national companies may make it less certain that the investment projected in this outlook will actually be made,” it says, pointing to the lack of financial firepower and technical expertise of such firms.

Claude Turmes, a Green MEP and rapporteur on renewables for the European parliament, said: “IEA is talking about a huge disruption to the market between now and 2015 and in the long-run - without a huge investment in Saudi, Iraq and Iran which may not be in their interest.”

Like the commission, the IEA calls for a dramatic shift towards “greener” energy to prevent global warming, saying that, on unchanged policies, the average temperature will rise 6°C by the end of the century. That is triple the maximum increase sought by the EU in its climate change policies.

It says that, on current trends, greenhouse gas emissions will rise by 45% to 41 gigatonnes (Gt) in 2030, with three-quarters of the increase coming from China, India and the Middle East as urbanisation there grows exponentially.

In its most ambitious scenario for cutting emissions and limiting the global temperature rise to 2°C, it says hundreds of millions of homes and businesses will have to change the way they use energy.

OECD countries will have to cut emissions by 40% from 2006 levels by 2030 while emerging economies will have to limit emissions growth to 20%.

original article:

http://www.guardian.co.uk/business/2008/nov/12/oil-gas-companies-credit-crunch

Solar Thermal Power May Make Sun-Powered Grid a Reality

www.Popularmechanics.com By Alex Hutchinson

Planted in the New Mexico desert near Albuquerque, the six solar dish engines of the Solar Thermal Test Facility at Sandia National Laboratories look a bit like giant, highly reflective satellite dishes. Each one is a mosaic of 82 mirrors that fit together to form a 38-ft-wide parabola. The mirrors’ precise curvature focuses light onto a 7-in. area. At its most intense spot, the heat is equivalent to a blistering 13,000 suns, producing a flux 13 times greater than the space shuttle experiences during re-entry. “That’ll melt almost anything known to man,” says Sandia engineer Chuck Andraka. “It’s incredibly hot.”

The heat is used to run a Stirling engine, an elegant 192-year-old technology that creates mechanical energy from an external heat source, as opposed to the internal fuel combustion that powers most auto­mobile engines. Hydrogen gas in a Stirling engine’s four 95 cc cylinders expands and contracts as it is heated and cooled, driving pistons to turn a small electric generator. The configuration of the dish and engine represent the fruit of more than a decade of steady improvements, developed in collaboration with Arizona-based Stirling Energy Systems.

On a crisp morning this past January, Andraka and his colleagues fired up Dish No. 3. The temperature was around freezing, and the sky was 8 percent brighter than average—the contrast between the cold air and the hot sun helps the engine run more efficiently. When power began to flow from the 25-kilowatt system, it did so with the highest conversion efficiency ever recorded in a commercial solar device: 31.25 percent of the energy shining onto the giant dish flowed into the grid.

To Bruce Osborn, president and CEO of Stirling Energy, this merely confirmed something that he already knew: The system, which his company calls the SunCatcher, was ready to exit the laboratory. “The rocket science is already done,” he says. The challenge remaining is to turn the prototypes into a low-cost, mass-producible design—“just a question of good, old-fashioned engineering,” according to Osborn. To that end, Stirling Energy signed the two largest solar energy contracts in history with two Southern California utilities, promising to build up to 70,000 SunCatchers and provide power for a million homes. Construction starts next year.

Big promises from solar power companies are nothing new. “It is stern work to thrust your hand into the sun and pull out a spark of immortal flame to warm the hearts of men,” an AT&T publicity film crowed after the invention of the silicon photovoltaic (PV) cell in 1954. “Yet in this modern age, men have at last harnessed the sun.”

Well, sort of. The Bell Solar Battery, as it was called, had some successes—powering the first communications satellite, in 1962, for instance—but hopes of cheap, plentiful energy have remained elusive.

PV cells and concentrating solar thermal (CST), the two basic methods for harnessing the sun’s power, have made great strides since those early days. But inflation in the cost of raw materials, such as silicon, combined with decades of cheap fossil fuels has kept overall solar energy consumption in the U.S. at 0.08 percent. And a series of new technologies that looked promising in the lab have proved impractical on the open market, leaving many observers to conclude that the age of solar energy will always remain just around the corner.

Meanwhile, though, almost under the radar, a few solar technologies have reached maturity. A type of silicon-free solar panel, half as expensive as silicon cells, has rapidly turned Arizona-based First Solar into the biggest solar-panel maker in the country. And along with Stirling Energy’s SunCatcher, new CST designs promise to provide a steady flow of solar electricity—even at night.

Solar Thermal

Click to enlarge

(Illustration by Dogo)

Big power utilities love CST for two reasons, says Reese Tisdale, a senior analyst at Emerging Energy Research, based in Cambridge, Mass. “It’s large-scale and it’s [usually] steam-powered, so it’s not so different from the gas- and coal-fired plants they’re familiar with.” The idea is not new—in fact, nine CST plants with a combined capacity of 354 megawatts have been operating in the Mojave Desert since their construction between 1984 and 1991, powering the homes of 500,000 Californians and proving the design’s reliability. (An average coal plant produces about 670 Mw.) The plants use a “parabolic trough” design, with more than 900,000 mirrors, shaped like a skateboarder’s half-pipe in vast arrays over 1500 acres of desert. The mirrors adjust to track the sun across the sky, reflecting and concentrating its rays onto liquid-filled pipes. The hot liquid, in this case oil, then boils water, which produces steam to spin a turbine.

Progress on CST plants ground to a halt after natural gas prices plummeted in the 1990s. It wasn’t until last year that the next major plant in the United States opened: a 64-Mw parabolic trough system in Boulder City, Nev., called Nevada Solar One, built by the Spanish company Acciona. Now there are 13 other plants, totaling 5100 Mw, in advanced planning stages in ­Flor­ida, Arizona and California; most will use parabolic troughs. Stirling Energy pursued a different kind of system, one that offers more flexibility and better efficiency.

Bruce Osborn started his research career at Ford Motor Co., and the key advantage of his solar dish is one his former employers would understand. “Henry Ford used to say you can have your car in any color as long as it’s black,” Osborn says, “and that’s our approach, too.” The planned 900-Mw Stirling Solar Two plant near San Diego will eventually have as many as 36,000 identical dishes, and the 82 mirror panels that make up each dish come in only two shapes. That design choice causes a slight decrease in power output, in exchange for the advantages of low-cost mass production.

Parabolic Solar Trough: The long mirrors in parabolic trough plants are designed to focus incoming sunlight onto a narrow, liquid-filled tube that runs parallel to the array. At the Nevada Solar One plant, 180,000 mirrors help heat a mineral-oil transfer fluid to 735 F.

Modularity has other benefits, too. Since each 25-kw SunCatcher has its own Stirling engine producing electricity, there’s no single point of failure. “If something goes wrong with one dish, it doesn’t matter,” Osborn says. In contrast, the thousands of mirrors in a parabolic trough plant all feed a central turbine, so when the turbine is down for maintenance, power production stops. The SunCatcher design also shortens the wait for power during construction: Electricity will flow once the first 40 are built—a “solar group” that can churn out 1 Mw.

The breakthrough efficiency of the dish results from focusing the sun’s rays on a single spot instead of on a long pipe, which allows temperatures to reach 1450 F, compared to 750 F for parabolic troughs. In addition, the Stirling engine has a relatively flat effi­ciency curve: It produces close to maximum output even when the sun is obscured or low in the sky. So while the record 1-hour effi­ciency achieved earlier this year was 31.25 percent, the SunCatcher’s full-year, sunrise-to-­sunset efficiency is still a respectable 24 to 25 percent, roughly double that of parabolic trough systems.

Another twist on CST designs confronts the challenge that dogs every solar power scheme: “When the sun sets, that’s it for the day,” as Tisdale puts it. “But in Arizona in midsummer, it’s hot as hades, so people have their a/c cranked until 9 or 10 in the evening.” A hot liquid can be stored more efficiently than electricity; the analogy used by one industry executive is that a $5 thermos can hold as much energy in the form of heat as a $150 laptop battery can store electrochemically. Two 50-Mw plants that should begin operations by the end of this year in Spain will operate on this principle, using what amounts to a giant thermos filled with molten salt.

In the U.S., a thermal storage facility is scheduled for completion in Gila Bend, Ariz., in 2011. The 280-Mw Solana plant, being built by Spanish company Abengoa Solar, will use a parabolic trough design, but will incorporate a thermal storage tank that can keep the plant running for 6 hours with no sun. “We could design a plant that runs 24 hours a day,” says Fred Morse, an adviser for Abengoa who was formerly the Department of Energy’s solar czar, “but that would make no economic sense.” Instead, the plant is designed to cover Arizona’s peak energy-use periods, when power is most expensive.

A Matter of Scale

Click to enlarge

(Illustration by Dogo)

The enormous scale of the Abengoa and Stirling Energy plants provides an answer to skeptics who doubt whether a few rooftop panels here and there can ever play a meaningful role in the world’s energy portfolio. But size also creates its own set of problems. For one thing, the power has to be transmitted to where it’s needed, and the empty deserts best suited for sprawling CST plants tend to be in the middle of nowhere. The site of Stirling Energy’s future plant for the San Diego market currently has enough transmission capacity for 300 Mw, or 12,000 dishes. The remaining 24,000 dishes will be built only if San Diego Gas & Electric is able to complete a proposed 150-mile transmission line between the plant and the city.

Water use is another issue. CST plants with steam turbines can require hundreds of millions of gallons of water to cool their con­densers—a challenge in regions where water is already at a premium. In this respect, Stirling Energy’s hydrogen­-based system has a significant advantage, since it only uses water to rinse the mirrors every few weeks. Osborn estimates that the San Diego plant, when producing power for 500,000 households, would use the same amount of water as 33 average homes.

Utility-scale solar power also requires enormous capital, which keeps it out of reach of people in the developing world, where such solutions are desperately needed. That’s a challenge RawSolar, an MIT spinoff, is trying to meet with a dish that is just 12 ft. wide, and simple and cheap enough to make for stand-alone operation. The nonprofit Solar Turbine Group, another MIT spinoff, built an even more bare-bones mini-CST system in Lesotho last summer, using spare car parts for the heat engine.

The most natural fit for small-scale solar, though, is the good old photovoltaic cell. It takes in sunlight and spits out electricity with no moving parts, requires no water and can be situated wherever electricity is needed, to avoid transmission losses. PV panels can generate useful amounts of electricity even in the weaker sunlight of northern states where big CST plants aren’t practical. Also, they’re ideal for homeowners, since they are simple to install and maintain—in fact, integrated building materials like PV roof tiles will make new homes even easier to connect.

original article continued at :

http://www.popularmechanics.com/science/research/4288743.html?page=1