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The Future of Energy
CanSIA Western Solar Conference 2010Calgary Alberta
John MacDonald
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Life TodayLife Today
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OUR PROSPERITY & QUALITY OF LIFE IS DEPENDENT ON THE READY AVAILABILITY OF ABUNDANT AFFORDABLE ENERGY.
OUR GENERATION ENJOYS THE BEST QUALITY OF LIFE HUMANS HAVE EVER EXPERIENCED SINCE OUR SPECIES
APPEARED ON THIS PLANET.
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Energy IssuesEnergy Issues
Security - Dependence on Foreign Energy
Security - Dependence on Foreign Energy
Demand and SupplyDemand and SupplyEnvironmental Concerns
Climate Change
Environmental Concerns
Climate Change
OBSERVATION
Given a choice between protecting the environment and impact on their Pocketbook, the majority of people will opt
for protecting their Pocketbook
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Demand and Supply - A key QuestionDemand and Supply - A key Question
When will the Demand for Energy exceed the Conventional Supply?
The likely result will be Increases in the Price of Energy and Instability in that Price
The timing of this is very uncertain but it will happen
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Optimistic Supply CaseOptimistic Supply Case
Oil
Gas
Coal
BiomassNuclear
Hydro
Range of Demand
Prim
ary
Ene
rgy
Sup
ply
[Exa
Joul
es/Y
r]
Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU)
Year
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Pessimistic Supply CasePessimistic Supply Case
Oil
Range of Demand
Gas
Coal
Biomass
Nuclear
Hydro
Prim
ary
Ene
rgy
Sup
ply
[Exa
Joul
es/Y
r]
Year
Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Association for the Study of Peak Oil and Gas (ASPO)
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Filling the GapFilling the Gap
Oil
Range of Demand
Gas
Coal
Biomass
Nuclear
Hydro
Prim
ary
Ene
rgy
Sup
ply
[Exa
Joul
es/Y
r]
Year
Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Association for the Study of Peak Oil and Gas (ASPO)
What will fill the Gap??
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Filling the Gap - 2 SolutionsFilling the Gap - 2 Solutions
•Increased use of Nuclear Energy
•Renewable Energy Sources•Solar•Wind•Tidal•Biofuel derived from biomass•Geothermal•Wave•Small Hydro (Run of River)•Large Hydro
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Properties of Renewable EnergyProperties of Renewable Energy
•Secure•A local energy source
•Environmentally Benign
•Inexhaustible
•But it is either intermittent or strongly location dependent or both
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Prim
ary
Ene
rgy
Sup
ply
[EJ/
Y]
1,600
1,400
1,200
1,000
800
600
400
200
0
WBGU: German Advisory Council on Global Change
YEAR2000 2060 2070 208020502010 2020 2030 2040 2100
Geothermal
Other REs
Solar heat
Solar electricity
Wind
Biomass adv
Nuclear PWGasCoalOil
Biomass trad
Hydro-PWPrim
ary
Ene
rgy
Sup
ply
[EJ/
Y]
1,600
1,400
1,200
1,000
800
600
400
200
02000 2010 2020 2030 2040 2050
YEAR
WBGU: German Advisory Council on Global Change
WBGU’s World Energy Vision to 2100WBGU’s World Energy Vision to 2100
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Shell – WBGU ComparisonShell – WBGU Comparison
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“Grid Parity” – The Holy Grail“Grid Parity” – The Holy Grail
•What is “Grid Parity”?•Equality of the renewable energy price per kilowatt-hour (kWh) with the currently accepted kWh price from the grid
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Getting to “Grid Parity”Challenges
Getting to “Grid Parity”Challenges
•Bridging the current cost differential•Renewable energy incentives
•Generation of firm, dispatchable energy from renewable sources
•Creation of renewable energy dominated supply systems and subsystems
•Integration of renewables into existing energy systems and managing the transition
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Getting to “Grid Parity”Solar Energy System Cost & kWh
Price
Getting to “Grid Parity”Solar Energy System Cost & kWh
Price
•Fuel is free! – Enhances price stability
•Large up-front investment, amortized over a defined time period
•Kilowatt-hour price is driven by the cost of amortizing the capital investment combined with the cost of operation and maintenance.
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Getting to “Grid Parity” - TechnologyGetting to “Grid Parity” - Technology
•The technology must:•Maximize the number of kilowatt-hours generated annually per unit of capital invested.•This is the key performance parameter
•Produce the rated power over the amortization period and beyond.
•Have low maintenance and operating costs.
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Getting to “Grid Parity”Bridging the cost gap
Getting to “Grid Parity”Bridging the cost gap
•Incentives (that reduce to zero over time)•Performance-based – Incentivizes performance improvement
•Capital rebate – Leads to commoditization – only price matters
•Tax-based•Others
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Performance-Based Incentives
(Example: Feed-in-Tariff)
Performance-Based Incentives
(Example: Feed-in-Tariff)
•Guarantees a stable price environment and a stable return on investment (~8%) for a stated period (typically 20 years)
•Attracts private capital into the process of realizing a mature renewable energy industry by creating a stable and realistic pricing environment.
•Motivates renewable energy companies to innovate and discover ways to improve the number of kWh per annum per unit of invested capital in order to remain competitive. (Performance counts)
•Is an investment in future energy price stability•Reduces the time to reach grid parity.
•Money can be made doing all the right things to get there.17
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Achieving “Firm” Energy DeliveryAchieving “Firm” Energy Delivery
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Renewable Energy Sources are either intermittent or strongly location
dependent or both.
How can we create a system that can generate FIRM renewable power
ANYWHERE?
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Achieving “Firm” Energy DeliveryAchieving “Firm” Energy Delivery
Solar
Wind
TidalWave
Small Hydro
IntermittentRenewable
Sources
BigHydro
Biomass Geothermal
FirmRenewable
Sources
GRIDCONTROLSYSTEM
LOAD
Large Scale
Storage
FossilFuel &Nuclear
Blending Wind and Solar in Minnesota (example)
Solar
Wind
0
10
20
30
40
50
60
70
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Renewables in the Mainstream
Creating the Infrastructure
Renewables in the Mainstream
Creating the Infrastructure
•This is a very large undertaking•The structure will be very different from what we have today
•The design is highly location dependent•It will require much innovation and creativity•It will take much time
• Time that we may not have much of
•IT IS TIME WE TOOK MAINSTREAM RENEWABLE SYSTEM ARCHITECTURE SERIOUSLY
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A Parting Thought on ArchitectureA Parting Thought on Architecture
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Distributed Generation coupled with Distributed Storage??