Sun - April 27, 2008 02:32 PM

The Magic Year

It's always dangerous to extrapolate current trends far into the future, but I've been doing it anyway for solar energy. I got my hands on a data set of the average price of photovoltaic modules over the past 25+ years (in constant 2006 dollars), thanks to Robert Margolis at NREL.

Keeping in mind that the data shows the prices of the PV modules only (not installation), the trend is remarkable: on average, the real price per watt of photovoltaic modules over the past 25 years has tracked almost perfectly to a curve which drops by half every 10.5 years (or about 6% per year). There are a few blips here and there--corresponding to supply and demand fluctuations--but the simple 6% annual drop in prices explains 96% of the variation in PV module cost over two and a half decades.

Given recent advances in photovoltaic technology, there's no reason to believe the trend won't continue for a while longer. It may even accelerate at some point.

At this point, it's natural to ask when solar panels will be cheaper than power from the electric company. You have to make some assumptions about the long term interest rate, how long the modules will last, and the relative cost of installation, and I came up with the answer that solar and grid power will be at parity somewhere between 2020 and 2025.

That's not the whole story, though, since it's reasonable to assume that the cost of electricity will increase faster than inflation for the foreseeable future. That means that while the cost of solar power is going down every year, the savings will go up--and the savings will continue to increase even after the solar panels are bought and paid for.

So in reality, it makes financial sense to install a photovoltaic system while it's still somewhat more expensive than grid power, since over the life of the system the savings will continue to increase. The Magic Year--the year when a brand-new photovoltaic system will pay for itself over its lifetime--depends on the assumptions you use about the inflation rate for electricity, the real interest rate, the life of the system, and so forth.

The Magic Year is 2015
The Magic Year is 2015 using these assumptions:

* The installed price of a photovoltaic system will be twice the price of the modules alone
* The price of the modules will continue to follow the historical curve
* Grid power today costs $0.10/kWh (about the price I'm paying now)
* The real inflation rate for grid power will be 3% (i.e. grid power will increase on average by 3% more than the inflation rate)
* The long-term real interest rate will be 3.5% (i.e. the interest rate will be 3.5 percentage points above the inflation rate)
* One watt of PV capacity will generate one kilowatt-hour of electricity per year (about the factor for Minnesota)
* The system will last 30 years
* After 30 years, the photovoltaic system will have no residual value (i.e. it will need to be completely replaced)

I used a Net Present Value (NPV) calculation, the standard way to figure the current value of future cash flow or savings. If the NPV is negative, then the system costs more to install than it saves over its lifetime; conversely, a positive NPV means the system pays for itself. The breakeven point (NPV = 0) is the Magic Year.

Your Magic Year may be different than mine. For example, in the California desert where grid power is more expensive and a photovoltaic system produces more power over a year, the Magic Year could be as early as 2007 (using the same interest rate and inflation assumptions). In Seattle, where hydro power is still cheap and it's cloudy all the time, the Magic Year could be 2025 or later.

Saving for the Magic Year
There are a lot of assumptions and an uncomfortable amount of extrapolation which go into calculating the Magic Year, but it seems reasonable to assume that 2015 will be the year to install a photovoltaic system here in Minnesota (give or take a couple years). She Who Puts Up With Me and I have decided to run with this assumption, and start putting aside some money every month with the idea of saving enough by 2015 to install a PV system big enough to bring our net electrical consumption to zero. We're also putting aside enough to pay for a major upgrade of our heating and air conditioning system at the same time--which might include switching to a geothermal heat pump.

In the meanwhile, we'll keep burning firewood in the winter--the stove has now paid for itself with gas savings--and doing smaller energy upgrades along the way like windows and lighting. 2015 is only seven years away, and by then we hope to have our net home energy use down to zero.

Posted at 02:32 PM | Permalink | |

Sun - February 10, 2008 12:47 PM

Biofuels are not the answer

I've been gradually becoming less and less excited about the potential for biofuels (ethanol, biodiesel, etc.) to replace fossil fuels, and I've now come all the way around to the opposite opinion of what I used to believe.

I'm now convinced that biofuels are not the answer, either to global warming or our limited reserves of liquid fossil fuels.

Conversion Efficiency
Biofuels are a way of storing the energy from sunlight in (usually) liquid form, suitable for powering vehicles, heating homes, and similar purposes. The problem is that when you measure the net energy content of the resulting fuel (after subtracting the energy required to process it, such as planting, harvesting, fermentation, distillation, etc.), you find that the ethanol, biodiesel, etc. contains almost a laughably small percentage of the original energy of the sunlight which fell on the field. We're talking about hundredths of a percent or less--with some scientists arguing that some fuels (like corn ethanol) actually contain less energy than what it took to process the plants into fuel.

While there's plenty of sunlight available--in theory, just the sunlight hitting Nevada is orders of magnitude larger than what's needed to meet global energy demand--there is a limited amount of arable land on the planet, and much of that is already farmed for food. Given how inefficient biofuels are at capturing solar energy, growing enough biofuel to meet demand will exhaust the available supply of land suitable to current farming practices and fuel crops.

This also sets up an unhealthy competition between growing food and growing fuel, one in which the energy demands of wealthy countries could lead directly to famine in poorer places.

Of course, new technologies could change this calculus. There's plenty of "land" available in the middle of the Pacific ocean, and a (hypothetical, as-yet-to-be-invented) process for farming massive floating algae beds could be an economical way to grow biofuels without competing against land currently used for food.

As things stand right now, however, existing biofuel technology simply won't be sufficient.

Solar Power
Once you realize that biofuels are nothing more than a grossly inefficient form of solar power, however, the answer to a big part of the problem becomes obvious. Existing solar-electric (either photovoltaic or solar-thermal) technology is reasonably efficient, and even starting to come within shouting distance of coal-based electricity in cost. The conversion is efficient enough that our current energy needs can be met with a reasonable amount of collector area, and as a bonus, the best sites for solar collectors are often unsuitable for crops so there would be no food vs. energy competition.

The problem is that the most efficient processes we have for capturing solar power today all convert the solar power into electricity. Electricity is the best choice for many energy uses, but is hard to store (in a compact and lightweight form) for powering a vehicle. You need either an efficient way to convert solar power into liquid fuel, or a better battery.

Battery technology is slowly improving, and commercially available electric cars today can go about 20 miles on a charge. That's enough for a lot of people's daily commute, but doesn't even come close to sufficient for long-haul trucking. The idea that we might someday have battery-powered airliners is almost laughable, given the limited weight available for fuel on an airplane.

Direct conversion of sunlight into liquid fuel is pretty much a pipe dream at this point. There has been some interesting progress in conversion of sunlight into hydrogen gas, but hydrogen (despite the hype) is a poor vehicle fuel: it's hard to handle, and takes up too much weight and space for the necessary pressure tanks.

Transition Plans
Existing products and technology show a likely path for weaning ourselves from fossil fuels. First will come longer range electric vehicles and plug-in hybrids. Shorter trips (which account for a disproportionate share of fuel consumption) will become mostly all-electric, though petroleum will still be used to fuel long trips. A commercially available car capable of going 60 miles on electricity alone seems possible within five years, and for most people that will result in daily gasoline usage close to zero.

More and more of the electricity from the power grid will come from renewable sources, especially wind and solar, now that those are close to or less than the cost of fossil fuels for peak generating capacity. Since those sources are somewhat unreliable, you may get a discount from the power company for not charging your electric car on days when there is less solar or wind power available.

That alone will dramatically reduce our need for fossil fuels, and requires no new technology.

Replacing liquid fuels for long-distance travel (trucks and airplanes) is harder to foresee. It may be that biofuel is necessary for those applications, but at least it will represent much less impact than trying to run our entire transportation infrastructure on biofuel. Better, though, would be a reasonably efficient process for converting sunlight to liquid fuel (maybe with hydrogen as an intermediate step)--but I'm not aware of any promising technology, or even serious research, in that direction.

Biofuel Niches
I don't think biofuels are a sustainable way to replace all our liquid fuel needs: the majority of the burden has to come from solar power and electricity.

There are some niches where it makes sense, though. Long-distance transportation is one of those. Waste biomass conversion (i.e. taking biomass which would otherwise just be landfilled, such as downed trees, agricultural waste, etc., and either burning it for heat or converting it to liquid fuel) is also sensible, though there isn't enough waste biomass around to make a big dent in our fossil fuel use.

But fueling your Hummer with biodiesel is not the way to save the planet.

Posted at 12:47 PM | Permalink | |

Wed - December 26, 2007 12:44 PM

December Gas Usage

The month of December was cold in the Frozen North, and we saved about $220 on our natural gas bill through the wood burning stove.

This bill marks almost exactly two years since we got the wood stove installed, and we're closing in on paying for it through fuel savings. To date we've saved about $2,600, and kept something like 25 tons of carbon dioxide out of the atmosphere.

The stove is starting to show some wear, though: a piece of fiberboard in a baffle in the firebox is disintegrating, and needs to be replaced (about sixty bucks for the part, and probably ten minutes to install). This is apparently expected to need replacement from time to time, since the manufacturer excludes it from the warranty.

Posted at 12:44 PM | Permalink | |

Wed - December 19, 2007 04:29 PM

Solar Installation Costs

Startup Nanosolar made a splash this week announcing that they're starting to manufacture photovoltaic panels for under $1/watt, and this has highlighted the rapidly dropping cost of solar-electric power.

This is an important milestone, of course, but it's a little premature to get all excited about going solar quite yet.

It's important to note that the $1/watt quoted in the press release is a manufacturing cost, not the retail price. Solar modules are generally in short supply, and odds are Nanosolar is charging a market price for its panels, or no less than slightly under the market price. For big megawatt-level installations, the market price is probably in the $2-$3/watt range right now. Ordinary humans like you and me still have to pay upwards of $5/watt, maybe as much as $7 for the stuff which is actually in stock at a real distributor.

If Nanosolar's manufacturing cost really is under $1/watt, however, their business is insanely profitable for the moment. That will give them the financial ability to quickly build new plants, ramp production, and help make the solar panels more available and much less expensive. So the gap between manufacturing and market price will narrow with time.

The more important problem, which won't go away with time, is the installation cost. From what I've seen, it costs around $2-$3/watt to install a residential-scale photovoltaic system. That's what it costs to buy wires, inverters, mounting brackets and other miscellaneous gunk, and then hire guys to crawl around on the roof bolting stuff together. Unlike the cost of the panels themselves, the installation cost isn't going to drop precipitously when a new factory comes online or someone invents a breakthrough process. Instead, you have to figure some clever way to nail more panels to a roof (safely!) with fewer hours of skilled labor.

Right now, for mere mortals, the total cost of a PV system looks to be in the $7 to $10/watt range, before any rebates or tax incentives. Here in Minnesota, solar becomes less expensive than the power company when the installed cost of solar drops to around $1.75/watt (assuming 6% interest and a 30-year system life). Solar becomes a no-brainer when the installed cost drops under $1/watt, allowing you to pay off the system (with interest) in around ten years from the savings in electricity.

It's pretty obvious that if the installation cost of a PV system is $2-$3/watt, you're never going to hit the $1.75/watt threshold even if the panels themselves are free. In fact, as the price of the solar panels drops, the system price will become more and more dominated by the labor and hardware to install them.

So is there hope that photoelectric power will ever be cheaper than grid power?

Yes. For starters, right now there are very few contractors with experience in solar power, making that a skill which is in very high demand. I expect that the installation price will drop over time, as more companies develop the skills and experience necessary to perform this work.

I also expect that as the cost of the panels keeps dropping, it will become more and more obvious that installation is a bottleneck. This will lead to the development of simpler installation systems: things like self-sealing roof anchors (to avoid having to install flashing around bolts), plug-together wiring systems, click-together mounting brackets, and so forth.

If the average Minnesota home uses about 5,000 kWh/year, and that requires installing about 5,000 watts of solar capacity (round numbers for the sake of simplicity), we hit the no-brainer threshold when the total system costs less than $5,000. If we're a few years in the future and the panels are down to $0.50/watt (contractor's price), that leaves about $2,500 to install a system with 25-30 panels, or 20-40 hours of labor. With a clever mounting and wiring system, it seems quite possible: 10-20 hours to install brackets and mounting hardware, then a few minutes to click each panel in place.

So cheap photovoltaic is coming. Just not as fast as the press releases might have you believe.

Posted at 04:29 PM | Permalink | |

Sun - November 25, 2007 08:30 AM

November Gas Usage

We got our November gas bill, and this month we saved about a hundred bucks through wood heat (details here). We're getting close to having saved the cost of the stove, which was a bit under $3,000 including installation. Not bad for less than two full seasons.

This is the time of year when we're starting to burn firewood in earnest, but haven't yet had to turn on the main furnace. The house stays reasonably warm (depending on how much sun we get) just with the wood stove, but we're consuming fuel at a healthy clip. I'm pretty sure we've got enough good, dry firewood to last the season, but I won't know for sure until we get a lot closer to spring. The woodpiles are disappearing alarmingly fast, so I hope I've estimated correctly in how much wood we'll need and how much I collected.

So far, we've completely consumed one small stack of wood, about 1-2 cords which were on the patio. I had been expecting this to last until sometime around the end of November, and I was pretty close: we used the last of it on Thanksgiving. Next up is the approximately six cords stacked in the garage, which I estimate will last us until sometime in the last half of February. The garage wood is the best stuff, with a lot of nicely seasoned oak and maple.

Then there's another 2-4 cords stacked under a spruce tree next to the garage, which should get us to the end of the wood burning season. I've also got several more cords under a different spruce tree, but that wood mostly still needs to dry for another season before its ready to burn. Some of it is quite green, having just been cut this fall, and some of it is cottonwood, which isn't very good firewood until very dry. There's probably four cords of cottonwood waiting to be split (equivalent to just two cords of oak), but I'm waiting to split it until it freezes and gets brittle.

The bottom line is that this year, for the first year, I think we really have enough well-seasoned firewood to last the whole winter, and a good start on the following winter. I made an effort this summer to try to collect two years' worth of firewood, so that we'll have a plentiful supply of dry wood. I didn't quite get two winters worth, but I did get maybe one and a half.

Posted at 08:30 AM | Permalink | |

Tue - October 30, 2007 02:19 PM

Questions to Ask About Alternative Energy

If you follow alternative energy news (where I define "alternative" as anything not derived ultimately from fossil fuels), you get deluged with announcements about promising new technologies, each of which seems to be poised on the brink of ending all our problems.

Most of this is hooey. There's a lot of money flowing into energy technology these days--for good reason--and so there's a lot of incentive to hype any new invention which might somehow conceivably be pressed into service for energy production.

Since most of the stuff you read about will never produce a single watt of power, it's important to keep some perspective on exciting new developments. Here's my list of questions you should ask about any new energy technology:

Has the technology been demonstrated outside the lab?
A lot of hype gets expended on technologies which exist only in the lab, and sometimes only on paper. There's a huge gap between a lab experiment showing that geewhizium-doped buckyballs can extract energy from cellulose and actually throwing your grass clippings into your household Mr. Power box and getting electricity out. Most promising technologies never make it out of the lab environment for a variety of reasons: poor operating reliability, sensitivity to common environmental conditions, short operating life, and so on. If a technology has actually been shown to work in real-world operating conditions, that's a huge step forward; otherwise, it may be interesting, but probably irrelevant.

Does the technology produce net positive energy over its lifetime?
Surprisingly, many of the technologies promoted as future energy sources don't actually produce energy by the time you subtract all the inputs. Biofuels, in particular, are controversial in this respect: some calculations show that corn ethanol actually contains less energy than it takes to produce by the time you add up the energy required to plant, harvest, transport, ferment, and especially distill the stuff. The fact that the calculation is even close shows that this is probably not a promising source of energy. Hydrogen fusion is a great example of an energy source which is easy to demonstrate, but has yet to demonstrate net positive energy output.

For a long time, photovoltaic solar cells had the same problem, in that it took more energy to produce a solar cell than the cell could reasonably produce in its lifetime--though manufacturing efficiency for solar cells has long since improved to the point where this is no longer the case.

Other technologies, like wind, hydroelectric, biomass (i.e. burning wood), and nuclear are unambiguously energy-positive.

Can the technology scale?
Humans consume a staggering amount of energy, around 5x10^20 joules per year, about five-sixths of which comes from burning fossil fuels. That's approximately the equivalent of 140 trillion watts of installed photovoltaic capacity. So any technology which is going to eliminate our dependence on fossil fuels has to be able to get big. Really big.

Our global economy has an astonishing capacity to build manufacturing capacity in a hurry: just look at how much infrastructure we''ve built over the past hundred years dedicated to things like refining petroleum, building cars, and processing foodstuffs. So I'm not worried so much about being able to manufacture energy infrastructure as long as the raw materials are plentiful. The kinds of things which can prevent a technology from scaling up are:

Limited resource: Some energy resources, like hydroelectric, geothermal, tides, and (to a lesser extent) wind only occur in a useful form in particular times and places; and while these can be very useful resources, they can't provide energy everywhere its needed. In some cases, the total global resource may be insufficient to replace more than a small fraction of our fossil fuel usage. Waste-to-energy schemes are inherently limited by the amount of trash available.

Limited materials: I've seen some proposed technologies which rely on exotic materials (platinum catalysts, etc.) which may not exist in enough abundance on the surface of the Earth to meet our energy needs. Fortunately, most alternative energy ideas use fairly commonplace raw materials, though there is some question about the availability of uranium for nuclear power (but see this rebuttal).

Limited area: The earth has a finite amount of area, and the space available for power generation for certain applications can be limited by the application (for example, the roof area of a car limits the amount of solar energy it can collect). For biofuels, which are essentially solar-to-liquid fuel, some calculations suggest that the current technology would require more arable land than currently exists in order to replace our fuel needs, though this could change with higher yielding crops and different growing techniques.

Environmental impact: Most alternative energy sources are fairly clean, but some present real problems. Nuclear, in particular, poses some tough disposal issues which haven't yet been solved even for our current level of production. It's not clear how we would deal with the waste produced if we ramped up to using nuclear power for the bulk of our energy needs.

Technologies which can't scale to the 10^20 Joule/year range are inherently destined to be niche energy sources. In my view, the only alternative energy source which has been proven to be scalable to global proportions is photovoltaics: with current technology, the entire global energy demand could be met by covering an area smaller than the U.S. desert southwest in solar cells. Of course, in practice the solar collectors would be spread out across the globe, and a large fraction (perhaps all) of the required collector area could be on rooftops and other currently unusable areas.

Posted at 02:19 PM | Permalink | |

Mon - July 23, 2007 03:57 PM

Solar Approaches

I recently mused about what would happen if there was an order-of-magnitude improvement in the price per watt of photovoltaic power. I also speculated that there's probably a 25% chance that we might see such a breakthrough in the next decade.

A 25% chance of an order of magnitude improvement in any technology over ten years is pretty aggressive for anything other than disk storage. So why am I so optimistic? Because there seem to be so many promising technologies out there, and there's no particular law of physics which says it can't be done.

To make this more tangible, think of a sheet of ply wood, 4' by 8'. Now imagine that this sheet of plywood is a solar panel. Now imagine that 4x8 solar panel costs $125 installed.

That's what an order of magnitude improvement in the price of solar power means.

That price isn't physically impossible. There are lots of materials out there which can be nailed to a roof for less than $125 for a 4x8 sheet, especially if this solar panel is replacing something else which would otherwise be nailed to the roof (such as a piece of plywood sheathing). It implies not only breakthroughs in photovoltaic technology, but also dramatically simplified installation techniques: the installers would have to pretty much nail down the solar panel, attach a couple wires, and be done.

Several different approaches are currently somewhere between the lab and the factory:

Thin Films
Thin films use technology similar to current silicon solar cells, but instead of manufacturing the solar cell on a silicon wafer, thin film technology deposits the semiconductor in an ultrathin layer on some substrate material. Some approaches use silicon, and others use more exotic semiconductors which outperform silicon in a thin film.

Thin film technologies have two advantages: less material and cheaper manufacturing. Less material is obvious, and that's important today when one of the main drivers of the price of solar cells is the price of silicon. Thin films can use 1% or less of the material as a comparable wafer.

Manufacturing is where this approach really shines: this is the same basic technique (though more complicated) used to coat aluminum on mylar to make those shiny metallic balloons. Thin film deposition is very well understood, there's lots of off-the-shelf equipment, and it's suitable for making vast rolls of material in a continuous process.

Right now, there are some thin film solar cells on the market, but the price is still an order of magnitude above traditional solar cells. This may partly be a function of low manufacturing volume (thin films really shine when made in truly mass quantities), and it may also be a function of immature technology. Some of the articles I've read suggest that manufacturing yields are still low, and durability under real-world conditions is still a big problem.

Photochemical Cells
Photochemical cells don't directly produce electricity, but instead use solar energy to produce a chemical reaction which can yield energy. The most research seems to be into photochemical cells which generate hydrogen gas from water (the hydrogen can then be consumed in a fuel cell to produce electricity, stored for later use, or used as a somewhat impractical fuel for vehicles). A catalyst submerged in water absorbs sunlight, and uses the energy to split water molecules yielding hydrogen and oxygen.

In the lab, photochemical cells have exceeded 10% efficiency, which makes them very promising. The problem is that the materials used to promote the chemical reaction tend to corrode in water. You get 10% conversion efficiency, but the electrodes only last a month or so: not very practical for the real world, especially if the catalysts are made of exotic materials.

On the other hand, if the durability issue can be fixed, photochemical cells have considerable potential. In addition, since the hydrogen gas can be stored for later use, it eliminates the problem of only having power available on sunny days.

Dye-Based Solar Panels
Another promising approach is the use of a photosensitive dye to absorb light and convert it into usable energy. Solar cells need to do two things: generate free electrons, and enforce a charge separation so that the electrons accumulate and can be used to do work (instead of just recombining right away). In a traditional solar cell, the same material serves both functions, so you need something which is efficient at both absorbing light and separating the charges.

A dye-based solar cell uses two materials: the dye (which absorbs light and generates electrons) embedded in a semiconductor matrix which creates the charge separation. This allows a much wider variety of materials, and much less expensive materials like Titanium Dioxide. Manufacturing can also be less expensive, since it can use techniques developed for processes like printing.

This approach also seems to have an advantage in low-light conditions: where silicon has a threshold intensity to produce power, the dye-based solar cells will keep producing a small amount of power even in low light. This could yield a significant boost in total annual power production, especially in cloudy climates and high latitudes.

According to the articles I've read, the first manufacturer of dye-based solar cells, G24 Innovations, is just now beginning production. I wasn't able to find any actual products for sale, so I don't know how the prices compare to traditional solar cells.

Other Approaches
Anyone with a cheap pocket calculator can do the calculations I've done which show that a substantial (though not impossible) improvement in solar cell technology will truly change the energy game--and not incidentally make a ton of money for the inventor.

Pretty much any mechanism which can turn a photon into a free electron is being pursued somewhere as a new solar technology. I'm reminded somewhat of the story of the invention of the light bulb: the carbon arc lamp proved the usefulness of a small clean-burning electric lamp, and inventors were working on the problem for a long time before Thomas Edison finally managed to make it practical.

Similarly, today's expensive silicon-based solar cells prove that there's a vast market for a cheap way to convert sunlight into electricity. If it can be done, someone will find a way, and probably within a few decades.

Posted at 03:57 PM | Permalink | |

Sun - July 15, 2007 12:21 PM

Dreaming of a Solar Future

When I was researching my article last week, I noticed that there seems to be a plethora of new photovoltaic technologies in the lab and just beginning to come to market. The Wikipedia article is a good overview of how solar cells generally work and some of the interesting stuff currently in research.

The important point is this: right now, nearly all commercial solar cells are based on silicon semiconductors, and the majority of those are fabricated using fairly conventional silicon wafers and techniques similar to integrated circuit fabrication.

This is a problem because, while chip fabrication is relatively cheap for things like Intel processors--which use only a few square centimeters of silicon wafer to make something quite valuable--it is expensive for solar collectors which can only collect so much energy per square meter.

In other words, you don't get the benefit of Moore's Law with solar cells because the solar cell can't get physically smaller without reducing the amount of energy available to collect.

It also means that solar cell manufacturing competes for raw silicon against all sorts of other semiconductor products, and a silicon shortage (like what we're seeing right now) will push the price of solar cells way up.

There are other solar cell technologies in development, though, some of which have the chance to dramatically cut the cost of solar cells. Some of these are based on organic dyes, photochemical cells, and other radically different approaches. None of these can beat silicon for conversion efficiency (yet), but some look extremely promising for reduced cost per watt. Some have other promising characteristics, such as better-than-silicon performance in low light, which could allow them to outperform silicon on a total energy delivered per nominal watt basis.

It's always risky predicting the future of new technologies currently in the lab, but with the diversity of different approaches, there's a reasonable chance that at least one will deliver on its promise. If energy prices remain high (an important factor), I would guess that there's about a 25% chance we'll see an order of magnitude cost-per-watt breakthrough in photovoltaics within the next ten years.

Difference In Degree Becomes Difference in Kind
I have a personal rule of thumb that any time the cost of something changes by an order of magnitude, it leads to not just radically less expensive technology, but entirely new usage patterns. So what would happen if the price per watt of a solar cell dropped from $7.50 installed (today) to $0.75 installed (in ten years)?

First, let me point out that this magnitude of decline implies that the cost of installation and other equipment will also have to drop, since the solar panels are only about 75% of the cost of a complete system today. On the other hand, an order of magnitude drop in the price of solar cells could lead to a substantial (though perhaps not a full order of magnitude) drop in the price of installation and other components. That's because when the price of the cells is so much cheaper, you can afford to be sloppier: you can use installation techniques which are less expensive but lead to the occasional dead cell or panel, you can afford less-than-optimal site selection, and the price of other system components is likely to drop as sales volume increases.

The most obvious effect of an order-of-magnitude drop in the price of solar cells is that photovoltaic power would be (over the long term) half the price of the stuff from the power company. The average Minnesota home uses about 8,000 kWh of electricity per year, and today you need to spend $60,000 upfront to generate all that electricity using solar cells. Cutting that price to $6,000 will induce a lot of homeowners (and nearly all commercial properties) to go solar. In fairly short order, only people who couldn't afford the upfront cost would lack solar electric homes.

The first ripple effect of this would be on the power companies. They would be in the odd position of being fed lots of power during peak times, and having to generate power only at night and on cloudy days. The role of an electric utility would have to shift from power generation and delivery to power storage--and the current net metering schemes would have to change to keep the utilities from going bankrupt. Barring some breakthrough in electric storage technology, the cost of electricity at certain times might actually go to zero, as the utility could be forced to find ways to safely dissipate excess power being delivered from all those solar systems. Offsetting that would be much more expensive electricity at times when solar is unavailable.

(Ironically, in this scenario the people hurt the most would be the very early adopters of solar power: the people who put in solar systems while they were still expensive, counting on net metering to defray some of the cost. Those people would see their net metering benefit cut dramatically, yet be stuck with very expensive and outdated systems.)

If electricity storage rather than generation is the biggest problem, one logical place to store lots of cheap and excess electricity is in our cars. Right now, on a per-watt-delivered-to-the-wheels basis, electricity is about half the price of gasoline for powering cars (that's because the cost-per-BTU of electricity and gasoline is about the same, but electricity can be turned into usable work at about twice the efficiency of gas). The drawback of electric cars has always been recharging (it takes too long, and the car doesn't go far enough on a charge). For a commuter vehicle--which is most cars most of the time--this isn't so much of an issue. With solar electricity (hypothetically) costing one-quarter as much as gasoline, it makes a lot of sense to keep a spare battery pack at home and charging during the day. Then when you get home, you swap battery packs (the car would have to be specifically designed to allow this, since battery packs are big and heavy).

Or, alternatively, your employer might provide a recharging station at the office. A small solar panel on the roof of the car would give a little extra range during the daytime, but wouldn't be enough for continuous driving such as on an extended road trip.

We could also see a drive towards the construction of much larger electric grids. Northern latitudes could draw power from more southerly locations in the winter (when there's not much daylight up north), and conversely, the south could get electricity from the north in the summer, when us Minnesotans get tons of daylight and the folks in Mississippi are running their air conditioners around the clock. East-west power transmission would also make sense.

If someone could figure out how to turn electricity into liquid fuel at over 50% efficiency (as far as I know such a process doesn't yet exist), then excess solar power would also be turned into fuel for airplanes, trucks, and other vehicles where solar electric power is impractical (at 50% conversion efficiency under this scenario, such a liquid fuel would cost about the same to produce as gasoline sells at retail). This would remove one of the last remaining uses for fossil fuels.

As an aside: I don't consider hydrogen a practical fuel, even though it can be easily produced from electricity. Hydrogen is simply too hard to store and transport to be useful as a vehicle fuel.

Pipe Dreams?
The scenario I've spun sounds like a fantasy, and in many ways it is. Consider, though, that the premise (an order of magnitude drop in solar cell prices) may not be likely, but it is certainly possible. There's no law of physics or economics which says that converting sunlight to electricity must be expensive.

I started thinking about this topic when Scooter (now 8 years old) mentioned that he's really worried about global warming. When I was 8 years old, the Big Issue I worried about was nuclear war with the Soviet Union and the resulting destruction of all life on the planet.

Amazingly, though, by the time I graduated from high school, the Soviet Union had completely disappeared. Back in the late 1970's, hardly anybody would have thought this was even possible, much less that it would happen within a decade. In retrospect, the seeds of this dramatic change were already sprouting, but nobody gave the scenario enough credibility to take it seriously.

Today, our Big Issue is the increasing cost of fossil fuels and the increasing levels of carbon dioxide in the planet's atmosphere. But if you look, you can see the seeds of a dramatic change beginning to sprout, nurtured by the very high energy prices and environmental problems which have people so worried.

I would not want to place bets on any particular technology which might give us cheap solar power--they're all too immature--but as long as the price of energy stays high, the search for a cheaper alternative will continue. If such technology exists, I'm confident we'll find it sooner or later.

Posted at 12:21 PM | Permalink | |

Sun - July 8, 2007 08:46 PM

The Solar Equation

On the heels of my article yesterday, I decided to crunch a few numbers about how much it really would cost to switch to photovoltaic (solar electric) power for home use.

I did some research, found a few numbers, and crunched them in a spreadsheet detailing how much per year it would cost to power using solar power.

A lot of people think in terms of how many years it will take to pay back the cost of the system, but the more relevant question is whether the system will cut your electric bill enough to pay the interest on a loan to fund the cost of building it. Any savings in excess of the interest expense can pay down the principal of the loan and eventually go into your pocket; or, if the system can't cover the interest cost, the difference has to come out of your pocket.

The relevant numbers are the cost per watt (installed) of the solar system, the energy generated per watt of the solar system over the course of a year, the retail price of electricity, and the long term interest rate (i.e. mortgage rate).

The range of estimates for the cost of a solar system is $7.50 to $11/watt, with larger systems being less expensive per watt. In Minnesota, one watt of solar panels will generate between 1.0 and 1.1 kilowatt-hours of energy per year on average (assuming that you've chosen a good site), which actually compares favorably with Texas and Florida.

On our last power bill, after all the fuel surcharges and whatnot, Excel Energy charged about 9.3 cents per kilowatt hour. Minnesota's net metering law says that the utility has to buy power from small producers (i.e. residential solar systems) at the retail price, even if the net usage is negative. That makes the calculation simpler as compared to some other states, where the utility is only required to pay wholesale prices.

For the interest assumption, I used 7%, which is the ballpark for long-term fixed interest mortgage loans these days.

The bottom line of all this is that with realistic assumptions for today's economy, each watt of installed photovoltaic capacity would cost about 43 cents/year: 52 cents to finance the system, minus 9 cents of power sold back to the power company.

Another way of looking at this is that photovoltaic power is currently five times as expensive as the stuff Xcel provides, and someone who installs a solar electric system to supplement grid power is subsidizing 80% of the cost of the electricity being sold to the power company.

This isn't the end of the story, though. Right now, Minnesota has a $2/watt rebate program for grid-connected solar installations, which brings the net cost per watt down to about $0.30 per year; or you can think of it as the power company is paying 20% of the cost of the system (from selling power back to the grid), the state is paying 20% of the cost, and the customer is subsidizing the remaining 60%.

Unfortunately, this rebate program is limited to $1 million total, and from what I can tell it may already be fully subscribed--meaning that no rebate is available for systems which aren't already being built. There's also a federal rebate which will pay 1/3 of the cost of a new photovoltaic system, but that's limited to $2,000 total, making it relatively unhelpful for larger installations.

Looking Ahead
Fortunately photovoltaic technology is still advancing rapidly and we can expect the costs to drop fairly rapidly in the coming years. Currently about 75% of the price (installed) seems to be for the parts, and 25% for the labor of installation. Of the parts, about $3-$5/watt is for the solar panels themselves, with the remainder (or about a third of the components) for batteries, inverters, circuit breakers, etc.

Right now the price of solar modules is relatively high because of a global shortage of silicon wafers, so it's not unreasonable to expect prices to drop by half within 3-5 years as new capacity comes on line. Other components are also likely to get less expensive as production volume increases and technology improves.

I would also expect installation prices to drop as companies gain experience, techniques improve, and new systems are developed which are simpler to install.

Is it reasonable to expect $5/watt installed photovoltaic systems within five years? I think so, especially for larger systems. It's also possible that we could see $0.15/kWh for electricity in the same timeframe if fuel prices keep going up. Those two assumptions cut the effective price of the photovoltaic system in half, down to $0.20/watt/year.

Longer term, it's not hard to see where the economics could actually come out positive:

1) A switch to market-based metering, where the price of electricity varies according to the actual demand for electricity at a given time of day. This favors solar power, since the peak power output matches neatly to the highest peaks of electric demand (sunny days in the middle of the summer). Given that $0.093/kWh is the average price (round the clock), it isn't hard to imagine that a photovoltaic system could yield over $0.30/kWh with a market-based price.

1a) Even in the absence of market-based pricing for electricity, it's not unreasonable to expect $0.30/kWh within 15 years if fuel prices continue to increase.

2) A drop in installed cost to around $3/Watt, driven by a 75% drop in the price of solar modules (not too hard to envision), plus a significant drop in the cost per Watt of installation and other components.

These two assumptions (and the 7% interest rate) give you a system which generates 9 cents/year in excess income from selling power, after paying the interest expense for the solar array. Assuming a lower interest rate or slightly better site selection (yielding 10% more energy per year per installed watt) rapidly increase the profit margin.

So the bottom line is this: With today's prices, you can expect to pay about five times as much for solar power as from the electric company, at least here in Minnesota. This is ignoring the environmental benefits of solar power, of course.

But with some reasonable assumptions, it's easy to see how this might be only 2-3 times as much within five years, and it's possible--given increasing fuel prices, market-based metering, and dropping photovoltaic prices--that solar power could pay for itself within 10-15 years.

Posted at 08:46 PM | Permalink | |

Sat - July 7, 2007 08:34 AM

Free Energy Discovered and Commercialized

In the hype over Steorn's failure of its "free energy" machine, I almost overlooked a different technology which offers almost limitless free energy and is already being commercialized. You might even have seen it in action but didn't really think about the implications.

That may be because the companies selling this free energy technology (and there is more than one) have not chosen to market as "free energy" the way Steorn and others have in the past, but instead they've been selling it as a way to supplement or replace traditional batteries on various devices, and as a relatively inexpensive "off grid" alternative for places where it's expensive or impossible to connect to a traditional generator. The cost per watt is still a bit too high to replace coal-fired power plants, but that should improve as the technology matures.

So how does it work? It exploits an obscure quantum mechanical effect first explained by Albert Einstein to create direct current electricity. Really, it's that simple: there are no moving parts (unlike Steorn's machine) and individual devices are expected to have a lifetime measured in decades in the field with no maintenance. The technology has been successfully demonstrated to have a net power output under the most rigorous possible conditions--including commercially available battery chargers which you can buy over the Internet today and work without being plugged in.

For those who claim that this violates Conservation of Energy, I can assure you that the physics is quite sound. Most people don't understand the equations, but those who do all agree that there's nothing which would keep this technology from working.

Best of all, this free energy technology doesn't require any exotic materials (no rare-earth magnets, for example): the raw materials are very common, and literally the only thing limiting its use is how quickly the manufacturing plants can be built. It is also completely silent and pollution free.

I know that some readers at this point will think I've gone completely off my rocker--after all, I have a graduate degree in physics and those who know me know that I'm usually very skeptical of wild claims of free energy. But this technology is real, and I've seen it in action.

Maybe a photo will convince skeptical readers: here's one, and another.

I know what you're thinking: I've been describing photovoltaics, and the pictures are just plain old solar cells!

Well, yes.

But every statement I've made is absolutely correct, and meets (or even exceeds) the claims made by inventors of purported "free energy" machines. The only difference is that a solar panel doesn't create energy from nothing, it captures the readily available power streaming in from the Sun. But there is so much solar power available that it might as well be limitless (it's hard to even contemplate how the human race might come close to using all the solar energy available).

Granted, solar power does have some practical limitations: it doesn't generate power at night, and very little on cloudy days. On the other hand, a "free energy" machine is likely to have even worse drawbacks, such as low power density, difficulty in manufacturing, exotic materials, and so forth.

So deluded inventors like the ones at Steorn are an amusing sideshow in the energy circus, but the fact is that technology already exists today which is far superior to anything they are proposing (and has the additional advantage of actually working). The technology exists today to largely eliminate our dependence on fossil fuels. The reasons we still pump oil are (a) oil is still cheaper than the alternatives for most applications, and (b) it takes a long time to build the physical infrastructure to generate the amount of power we presently consume.

Posted at 08:34 AM | Permalink | |

Sun - February 25, 2007 08:43 AM

February Gas Bill

It's been a wild month, weather-wise. After an astonishingly warm January, the first half of February was the worst cold snap in several years. We didn't hit the ultra-low lows that I've seen a couple times (the coldest temperature on our home thermometer was around -17), but we spent several days continuously below zero, then several more days with solidly subzero nights.

Then, as a sort of meteorological apology, we had a week of thaw, followed by the biggest snowstorm of several years which is just winding down now.

Our February gas bill neatly covered the period of the deepest cold, and this was the coldest average month on any gas bill we've had since I started keeping track two years ago. We also set a new record for gas savings, burning 250 fewer therms than what would be expected from the temperature. Since the price of natural gas we're paying is still above $1/therm, that's a hefty chunk of change in our pockets.

The total gas savings for this season is now over $900, and since we started tracking the total has topped $2,000. That's well over half the cost of the wood-burning stove insert. You can take a look at my spreadsheet if you really care.

We've got three months to go in this heating season, though we're definitely on the warming up side of things now--by the end of March, we're usually not having to heat the house all that much. That's a good thing, since the firewood supply is also getting very thin. I've started burning some seasoned firewood I collected earlier this season, even though it needs to dry inside for a week or so before being useful (the wood has been sitting unstacked, and is covered in snow). There's just a small amount of really good stuff left, and I'm keeping that in reserve for now.

Posted at 08:43 AM | Permalink | |

Thu - February 8, 2007 09:19 PM

Hydrogen Smackdown

Blogging has been light lately because of real-life intrusions, but I have to pass along this article: The Hydrogen Hoax.

As I've stated before, the idea that we might someday run our cars on hydrogen fuel is farfetched: hydrogen is not an energy source (merely an energy storage medium), it is difficult to store and manage, and other energy storage media are far more cost-effective.

This article makes pretty much the same points but with much more technical detail and in much stronger terms. Go read it.

Posted at 09:19 PM | Permalink | |

Thu - January 25, 2007 03:11 PM

Gas Usage: January

I got our gas bill for the month ending mid-January. This marks the midpoint of the heating season this year. During the month we saved 218 therms of gas, tying our record from the prior month.

It was just a couple degrees cooler than last month, which translated into a gas bill about $30 higher; and we saved $235 this month. We've saved $640 so far this season.

Even though the spot and futures prices for natural gas this year are quite a bit lower than last year, our "at the pump" price this month was $1.07/therm, down only a bit from $1.20 a year ago. Our gas company apparently does a good deal of price hedging, which protected us last year from the post-Katrina price spike, but it's hurting this year because some of last year's high prices are locked in.

The firewood supply is looking a little iffy. My best guess is that the supply I set aside for this winter will probably run out near the end of February--enough to get us well past the coldest part of winter, but not all the way to the end of the heating season in April. Fortunately, I've been starting to stockpile wood for next season, and some of that supply is already dry and good to burn. I can fall back on that if I have to, and it won't be nearly as bad as the green cottonwood I was reduced to burning by the end of last season. If the winter remains mild, that might shorten the spring heating "tail," stretching the remaining supply somewhat.

Posted at 03:11 PM | Permalink | |

Sun - December 24, 2006 08:05 AM

December heating bill

Mid-November to mid-December was unseasonably warm, but still plenty cold that we needed to keep the house warm. We got our gas bill for that period, and it came to a grand total of....$45.89.

We saved $227.25 on natural gas during the month, and a record 218 therms. For the season so far, we've saved over $400 on our heating bill, and the heating season isn't even half over.

It helps that the weather has been nearly optimal for cutting the gas bill: cold enough that we're running the wood stove flat out most of the time, but not so cold that we still need the furnace to keep up. It's also been sunny most days, which helps keep our house from cooling off quite as fast during the day.

My spreadsheet is here, where you can find other fun facts like the face we've reduced carbon dioxide emissions by 2,400 kilograms so far this season, and saved a cumulative total of nearly $1,500 since we began using wood heat (that's nearly half the cost of our stove insert).

Posted at 08:05 AM | Permalink | |

Fri - November 24, 2006 04:52 PM

November Gas Bill

We got our November gas bill today, and saved $126 on heating this month thanks to the wood stove.

Even though the past couple weeks have been unseasonably warm, we had a pretty good cold snap before that. Despite the cold snap, we haven't turned on the furnace yet, and the house has been (for the most part) pretty toasty.

I've noticed that even though the furnace isn't on, our daily gas usage has crept up slightly (to the tune of about 0.3 therms/day--about 50% above our summer usage, but still far below the 6.5 therms/day we would have burned if we didn't have the wood heat). I suspect that this is because when the weather is cold outside, we're more likely to cook meals on the gas stove, use the gas clothes drier rather than the clothesline, and take longer, hotter showers in the morning.

You can view the spreadsheet I use to track our gas usage here.

Posted at 04:52 PM | Permalink | |

Tue - October 24, 2006 12:27 PM

October's Heating Bill

We got our first heating bill of the season yesterday, and I'm going to track it again this year just like last year. One difference is that this year I've got a cool Google Spreadsheet set up so you can see just how much I'm saving.

Okay, hey, wake up there in the back row!

This fall has been significantly cooler than last year, though gas prices are a third lower. We've had some sustained chilly weather--nights have been consistently below freezing for a couple weeks now--but we haven't had to turn the furnace on at all yet. The house has been nice and toasty all thanks to firewood heat.

So the tally for October is 65 therms saved, and $50 more in our checkbook. Cumulatively we've saved a little over 1,000 therms of gas (that's 100 million BTU's) and over $1,100.

I've left blank rows for the rest of the season.

Posted at 12:27 PM | Permalink | |

Thu - September 21, 2006 02:29 PM

Doing the Math

Some years ago, I made the mistake of buying a multi-year subscription to Red Herring magazine just before it went bust. When Business 2.0 bought the assets and extended everyone's subscription, I wound up with a subscription to Business 2.0 which will probably survive my great-grandchildren.

The downside is that Business 2.0 epitomizes everything I can't stand about a lot of business reporting: its pages are full of "can't fail" business ideas, fluffy profiles of obscenely wealthy white men (not that there's anything obscene about wealth, only when it's not mine), and hype-filled coverage of improbable new technology.

I'd like to focus for a moment on the latter.

Take this profile of EEStor, which was part of an article on "disruptive technologies" in the current issue.

EEStor is proposing to power an electric car using a new generation of ultracapacitors. That's not a crazy idea, since today's electric cars have three significant technological challenges:

1) The batteries take up a lot of space and weight.

2) It takes a long time to charge the batteries.

3) Because of (1) and (2), the cars usually have a limited range in order to reduce charging time and size of the batteries.

Both batteries and capacitors store electricity, but traditionally, batteries can store more energy in a given volume, while capacitors have the advantage of charging and discharging much faster. Ultracapacitors are high-tech capacitors which boost the energy density over traditional capacitors, but still can charge and discharge quickly thus potentially solving problems #2 and #3.

So far so good. If the energy density is high enough, it makes a lot of sense to use an ultracapacitor to power an electric car. But where I fall down is this claim:

"If it works as its supposed to, it will charge up in five minutes and provide enough energy to drive 500 miles on about $9 worth of electricity."

Wow, it charges up in five minutes! (presumably at a special charging station not unlike a gas station)

But waitaminute, is that possible?

Let's see, $9 worth of electricity is about 100 kilowatt-hours, or the equivalent (more or less) of running a 1,000-watt hairdryer for about four days straight. It is really practical to get that much energy into a car in five minutes?

To make that work, while the car is charging our charging station will need to pump 1.2 megawatts of electricity into the ultracapacitor. That's enough to power about 1,200 average homes. For one car.

A single large charging station would have to be able to handle as much electricity as a small city, and worse, it would have to be able to turn the juice on and off constantly without dimming the lights in surrounding areas or causing massive power surges.

When you get to the megawatt levels, power transmission isn't as simple as connecting a couple wires together--it's more like a MIssissippi river of electricity, and if you stop it from going one way, it'll try to go somewhere else (sometimes with considerable force). Basic stuff like switching the power on and off becomes a significant engineering problem.

Don't forget the safety issues, either. The cables will have to handle tens of thousands of volts at very high currents (these would be essentially high-voltage transmission lines plugging directly into the car), so it probably isn't the sort of thing you want Joe Sixpack dealing with. In fact, you probably want Joe Sixpack standing safely behind a really big metal fence, since that much voltage can arc several feet if something goes wrong.

I don't mean to pick on this one technology--ultracapacitors really are a promising new technology if they can work out the cost and safety kinks--but a little more skepticism, or merely even balance, from this breed of business reportage would be greatly appreciated.

(As an aside--if you think the recent spate of exploding batteries in laptop computers is spectacular, imagine what would happen if a car-sized ultracapacitor developed an internal short-circuit such as might happen if it was damaged in a bad crash. Since capacitors can discharge almost instantaneously, all the energy content of the capacitor would be released at once. A quick calculation suggests that you'd get an explosion equivalent to a little under 200 lbs of TNT, giving new meaning to the phrase "car bomb." This doesn't happen with gasoline-powered cars because the fuel can't burn without first being mixed with an oxidizer.)

Posted at 02:29 PM | Permalink | |

Mon - September 11, 2006 05:06 PM

Wood Heat Savings Spreadsheet

She Who Puts Up With Me occasionally accuses me of being obsessive about tracing how much we're saving by burning wood instead of gas to heat our home.

This won't help.

I've posted the spreadsheet I used to calculate the gas savings last winter on Google Spreadsheets. You can now track my gas savings this winter right along with me.

Posted at 05:06 PM | Permalink | |

Wed - July 5, 2006 10:15 PM

There Is No Energy Problem

Conventional wisdom right now is that we (that is, the United States and the global economy) have an energy problem.

That's not quite true.

What we have are three distinct problems, all related somehow to energy.

First, we have a fuel problem. Specifically, there's a developing shortage of the stuff we most frequently use as fuel for motor vehicles.

Second, we have an electricity storage problem. There is no economical way to store large quantities of electricity to carry excess supply at one time of day to match excess demand at other times.

Finally, we have a carbon dioxide problem. Most of our biggest sources of energy release carbon dioxide into the atmosphere after that carbon had been locked underground for millions of years, causing a sharp increase in atmospheric CO2 levels.

There Is No Energy Problem
We have plenty of energy. The energy streaming onto the Earth from the Sun amounts to thousands of kilowatt-hours per year for every square meter of the Earth's surface. The roof of a typical home captures enough solar energy to more than meet that home's energy needs, even at an efficiency of solar collectors on the order of 10% or so (meaning that 90% of the energy goes wasted).

We could, in theory (and with appropriate infrastructure) meet the United States' entire energy needs through solar power with far less land than is currently devoted to growing food.

That's not even counting wind power, hydroelectric, nuclear, and other less-developed energy sources such as tides and waves.

Farms are nothing more than mechanisms for converting solar energy (plus water, labor, and fertilizer) into chemical energy in the form of corn, wheat, etc. This conversion is absurdly inefficient, orders of magnitude worse than solar electric conversion. Despite this inefficiency, we still consider it worthwhile to use corn and soybeans as a commercially viable source of fuel. That's how much extra solar energy we have.

The Fuel Problem
Unfortunately, this abundance of solar energy does not occur at the times and places we need it most, and it isn't concentrated enough to power a car (much less an airplane) with current technology. So we need concentrated chemical fuel for the energy to be useful.

Currently, we use oil and to a lesser extent natural gas. Those fuel sources are convenient, reasonably plentiful, and still (despite recent price increases) cheap. But they are not renewable, and they will run out at some point.

So the problem is finding some other source of concentrated chemical energy to use for a fuel in vehicles and for heat in the winter. Biofuels seem to be the most promising alternative right now, despite the insanely poor conversion rate from solar energy to ethanol or biodiesel.

But what we really need is some process that converts solar energy into a liquid chemical fuel without the intermediate step of growing an organism. Imagine, for example, a solar reactor which has a catalyst submerged in a mixture of carbon dioxide and water (that is, seltzer water). When intense enough light hits the catalyst, it converts the water and CO2 into a simple hydrocarbon plus oxygen.

The Electricity Storage Problem
Electricity is the most versatile of all forms of energy. Like chemical energy, electricity can be used for heat and light, but unlike chemical energy, electricity can power electronics and be converted into motion with nearly 100% efficiency (as compared to 20% to 40% efficiency for chemical fuel). Unlike chemical energy, electricity can't be cost-effectively stored, which means it basically has to be used at the same time it is generated.

Small amounts of electricity can be stored, such as in batteries and capacitors. That works for some specialized applications, like mobile power, but you can't economically power a city from giant banks of capacitors.

This is important because some of the most promising alternative sources of electricity--wind and solar in particular--are intermittent. There's no way to store the wind from a windy day to a calm one, and no way to store the sun from a sunny day to a cloudy day.

But if we can devise a way to cheaply store massive quantities of electricity (on the order of thousands of megawatt-hours) for periods of up to 24 hours, many alternative energy sources suddenly become a lot more viable. It is also worth point out, though, that we still have tons of cheap coal around, and the only reason to be looking at alternatives is because of the carbon dioxide problem.

The Carbon Dioxide Problem
Every time we dig any sort of fossil fuel out of the ground and burn it, whether that's oil, natural gas, or coal, we release carbon dioxide into the atmosphere from sources which had been locked up for millions of years. Conversely, all living things lock carbon in their bodies (or stems or whatever), which removes carbon dioxide from the atmosphere until that organism completely decomposes.

The problem is that we've been removing so much fossil carbon from the earth and releasing it as carbon dioxide that the Earth's atmosphere now contains far more CO2 than it has had in tens of thousands of years. This is almost certainly having an impact on global climate, and the impact will only get worse.

Unfortunately, there isn't much we can do at this point to prevent any effect from increased CO2. It is already happening. What we can do is work to find fuel and energy sources that don't rely on burning ancient deposits of carbon-based chemicals, so as to reduce future emissions.

The devil is that if we were faced with any two of the three problems, it would be fairly easy to solve them with current technology. But all three at once....that's hard.

Posted at 10:15 PM | Permalink | |

Tue - May 30, 2006 06:52 PM

Wood Heat Wrapup

We got our gas bill for the month ending mid-May, and this is the last heating bill for the season this year. During that month, we didn't run our furnace at all, using wood heat to heat the house as needed on cooler mornings. Our natural gas usage was 0.9 therms/day, as compared to 2.7 therms/day I predict we would have used given the temperature.

So that's about $45 saved that month.

For the entire heating season, the total is....

956 therms of natural gas saved, for a savings of $1,093.50. We kept 5,256 kg of carbon dioxide out of the atmosphere.

We saved about two-thirds of our total heating for the season: given how cold it was, we would have expected to burn 1,640 therms, but we actually burned only 684 therms.

The highest price we paid for gas this winter was $1.35/therm in October/November, and the lowest price we paid was $0.91/therm in April/May. The gas prices we paid never quite spiked to the level I was afraid they would hit, partly because of the warm winter.

Now we're getting ready for next winter. I've already got several cords of high quality firewood stocked, and I'm getting the stove back into shape. The firebrick which came with the stove appears to have been fairly poor quality, and it is spalled badly in several places. But firebrick is cheap and easy to replace (and specifically excluded from the manufacturer's warranty--grrrr), so that will be a simple chore.

Posted at 06:52 PM | Permalink | |

Fri - May 5, 2006 04:58 PM

Fuel is not Fungible

I've been writing about energy so much lately, that I figured it finally deserved a category of its own. So I'm kicking off this new category with a brief analysis showing that fuel is not fungible.

Fungible is just a fancy word that means you can easily replace one source or form with another. For example, an entrepreneur considering several different funding sources for his company might say that "money is fungible," meaning that a dollar from once venture capitalist is just as good as a dollar from a different VC.

People often assume that energy is energy, and you can easily substitute one form for another. Running out of oil? Switch to coal. Or natural gas. Or wind. Or hydroelectric.

The reality is that different forms of energy have very different characteristics in how portable, usable, and efficient they are. The most dramatic proof is in the different costs of different energy forms:

Natural Gas: $10/million BTU (at $1.00/therm)

Gasoline: $24/million BTU (at $3.00/gallon)

Electricity: $27/million BTU (at $0.10/kWh)

Coal: $0.82/million BTU (at $14.40/ton of low-BTU Powder River Basin coal)

Firewood: $8/million BTU (at $200/cord of oak firewood, delivered and stacked)

There is a factor of about 30 difference in cost between the cheapest form of energy and the most expensive. If fuel was fungible, this price difference could not exist because people would switch from the expensive sources of energy like gasoline and electricity to the cheapest forms. But very few people want to heat their homes with coal--the required emission controls alone would destroy the cost advantage in a small application--and the natural gas-powered plasma TV has not yet been invented.

We pay more for gasoline and electricity because those forms of energy are the most practical for many of the things we want to do everyday.

But there are a couple of other wrinkles. First, most firewood is used recreationally, and the price is basically the labor to split, dry, deliver, and stack the wood. In many places, raw firewood is a waste product available for the taking by anyone willing to haul it off. This very week, in fact, I got about a hundred million BTUs of oak firewood (four cords) just for the effort of removing it from someone's back yard.

The more interesting wrinkle is that electricity is not like other sources of energy. Coal, wood, gasoline, and natural gas can be consumed at over 90% efficiency if you just want their heat value, but if you want to use the energy for something like fueling a car or a train, you are stuck around 20% efficiency. Electricity, on the other hand, can be converted directly into motion at over 90% efficiency.

That means that for things like powering an electric car, the effective cost of electricity is more like $5 or $6 per million BTU, a fraction of the cost of gasoline. That's before you even start thinking about technologies like regenerative braking, recharging the car's batteries when you step on the brakes.

Despite that cost advantage, electric vehicles have generally failed in the marketplace except for niche applications like golf carts and light rail. It has been too hard to store enough electricity in a small enough space to be practical for a car that is expected to travel 300 miles before refueling.

(As an aside, it is a bit of a mystery to me why city busses aren't battery powered. Given that a typical bus has considerable storage space for batteries, can be recharged overnight, and doesn't need to go hundreds of miles each day, it seems like a natural application for battery-powered vehicles.)

It is possible to change energy from one form to another, but usually at a significant cost in terms of efficiency. The most common use of coal is burning it to generate electricity (losing 60% to 80% of the energy in the process), but it can also be liquefied to make a gasoline substitute. The holy grail of energy would be some form of energy which is as portable as gasoline, as clean and efficient as electricity, and as cheap as coal.

Hydrogen is promoted as this magic bullet, and while hydrogen is as clean and nearly as efficient as electricity, with present technology it is far more expensive than gasoline and harder to transport than coal or natural gas. Right now there is no universal fuel source, and no immediate prospects of finding one.

Posted at 04:58 PM | Permalink | |

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