The Future of Energy

CanSIA Western Solar Conference 2010Calgary Alberta

John MacDonald

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.

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

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

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

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)

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??

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

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

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

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.

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

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?

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

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??