Understanding capacity

Let’s avert our eyes for a moment from the slow motion energy policy train wreck that is playing out on our domestic scene. Fortunately there is a ready topic to hand.

The inability of so many who dabble in the energy pool to actually understand how it works is on display in the mainstream and social media most weeks and has been especially so in recent days in hyperbolic international reaction to the latest International Energy Agency publication looking at the state of play for renewable energy.

This has reached some sort of apogee (or do I mean nadir?) with no less than Christiana Figueres (the former head of the UN climate change activities) tweeting in the wake of the rush of gee-whiz media coverage of the IEA report that the “speed of the energy transition every day more jawdropping” (sic) on the basis of “solar to surpass nuclear by end-2017.”

This sort of stuff flows, as the knowledgeable readers of this blog know, from misunderstanding of capacity factors and of the fact that a megawatt of dispatchable power will deliver considerably more over a year than one of intermittent nature.

In the case of the Figueres, absurdly, the link she provides to the article exciting her tweet contradicts her point in its second sentence: “While nuclear currently far exceeds solar in terms of energy generation, some predict solar could be the world’s largest source of energy by 2050.” (I’ll come back to that use of “energy” in a moment.)

Yes, it is estimated that by the end of 2017 the capacity of solar power globally is likely to be 390 gigawatts versus the current 391.5 GW for nuclear reactors – but the electricity output of the two resources is 2,476,670 gigawatt hours a year at present from nuclear versus 375,000 GWh from solar, nuclear having a capacity factor around 90 per cent compared with about 24 per cent for solar PVs (with 32 per cent for wind farms and 58 per cent for today’s global coal fleet).

The IEA says that solar power “could feasibly” be the world’s single largest source of electricity (not energy overall) by 2050; readers will all know my view of projecting so far forward – the equivalent, as I have written frequently before, of standing in 1984 and predicting today’s scene.

Shorn of all the BS littering the public energy debate, what the IEA is asserting is that renewables collectively will increasingly take market share from fossil fuels in global power production. Stop the presses!

The agency, much criticized for leaning too far to fossil fuels in the past, seems to me to be now a tad anxious to paint itself a greener shade of black and this comes through in how it shapes and presents statements like the latest one. Dig deep enough in the material and you find the IEA saying “Coal (will) remain the largest source of electricity generation in 2022 (but) renewables (in all forms) are closing in on its lead.”

Today, actually, the global need for power is being met primarily by 9,200 terawatt hours of coal-burning generation and 5,700 TWh from gas turbines. In addition, 2,600 TWh comes from nuclear plants and 6,000 TWh from all forms of renewable energy, of which by far the dominant are hydro systems.

To break the shares down, in round terms coal generation is providing 39 per cent, gas almost 23 per cent, hydro 16 per cent, nuclear a bit under 11 per cent, oil just on four per cent and the collection of sources that include solar and wind just on five per cent with biofuels and waste about two per cent.

Broadly speaking, the agency is forecasting that coal-fired power production will be just under 10,000 TWh a year in 2022 and gas-fired around 6,000 TWh – that’s a rise for fossil fuels — while all forms of renewables will jump quite strongly to just over 8,000 TWh (of which hydro generation will still represent nearly half) with the nuclear contribution staying around 2,600 TWh.

No matter how the whirling dervishes of green boosterism twist and turn, this means that conventional power production (coal, gas, hydro, nuclear) will continue providing the vast bulk of world electricity five years from now, notwithstanding “jawdropping” investment in wind, solar and battery storage in the interim.

One of the factors that tends to get lost in all the hoo-ha is the growing role of electricity in the overall energy scene. It amounts to about 18 per cent of total energy production today and you can find a range of crystal ball views of where it is going over the decades towards the middle of the century, the most popular being about 40 per cent. How this latter amount of electricity (or even, say, a 25 per cent share) will be sourced is a very large open question but how demand will be sourced through the next decade is not really that difficult to work out.

A problem with discussing global warming just in the context of power stations is that the issue (obviously) relates to all energy supply and use. The US Energy Information Administration, in its latest forecasts, suggests all global energy demand could rise 28 per cent between 2015 and 2040 – and, to the chagrin of the environmental activists, this scenario sees actual coal supply (in all its forms) rising a bit even as gas becomes the fastest-growing fossil fuel.

As the EIA carefully says, this is not a prediction of what will happen but rather of “what may happen given certain assumptions and (its) methodologies.”  To which it rightly adds: “Energy market projections are subject to much uncertainty, as many of the events that shape energy markets and future developments in technologies, demographics and resources cannot be foreseen with certainty.”

(If I ran the world, this sentence would be a mandatory prominent caveat in every media report of the “transition.”)

The grand dichotomy here is between the views (IEA, EIA, BP, Statoil, ExxonMobil, Shell etc) of an inexorable rise in world energy demand and those of the deep green activists with a neo-religious belief that peak energy demand can be achieved in the not too distant future.

Coming back home, today’s local energy policy battleground is occupied by the mainstream pragmatists seeking to ensure, to quote Josh Frydenberg, that emissions reductions are not pursued at the expense of reliability and affordability of electricity and gas supply and the idealists (and anti-capitalists in at least some cases) who want to bring about the earliest possible demise of fossil fuels and also to baulk any move to embrace new nuclear technology. We also have populists like Bill Shorten trying to play to both sides of this divide.

Scams like the solar assertion that kicked off this post are a weapon in this conflict – as an annoyed tweeter has responded to Figueres this week, the concern is that readers will walk away “with a lie in their heads” about what is actually going on in the energy marketplace.

Because this can influence how Australians vote, it is a not-unimportant issue at federal and State political levels – and this week’s “summit” is another reminder that our energy supply house of cards is teetering ever more dangerously because of politics.

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