According to photovoltaic industry analyst SolarBuzz, total PV installations in 2007 were 2826 MWpeak, representing a growth rate of 62 % (!!!) over 2006 . By way of comparison, Worldwatch claims that PV installations were 2935 MWpeak in 2007 (hat tip Peak Energy).
Germany continues to be the main driver for the PV industry, although Spain is now coming on very strong with their subsidy program as well. Ontario now has a similarly (over) generous subsidy program in operation so we are starting to see many announcements for PV power plants there as well. Japan is falling behind as their subsidy program was for a fixed capacity (i.e. 100,000 homes).
Thin film is growing much faster than poly- and mono-crystalline Silicon. SolarBuzz claims growth of 123 %, from 180 MW to 400 MW of installed capacity. Since a lot of the newer thin-film capacity is either CdTe or microcrystalline Silicon rather than the simpler amorphous Silicon (which happens to degrade quicker), the 400 MW number is probably actually 'firmer' than the 180 MW deployed in 2006.
The current leader of the direct bandgap thin film solar industry is First Solar of Ohio. The manufacturer of CdTe thin film solar cells has gone from $67 million in sales in the first quarter of 2007 to $197 million in the first quarter of 2008. Net profits increased 830 %, from $5 million to $46.6 million. With profits being about 25 % of sales, they have a much higher profit margin than most industries, including any oil major. That tends to imply they will be able to grow their production capacity very, very fast. They are currently advertising for 105 positions. According to the above report, First Solar is selling their modules for $2.45/Wpeak, and since the cost of sales is 47 % of total sales, that implies a cost of $1.15/Wpeak.
It will be interesting to see how the CIGS manufacturers stack up. As long as the price of solar is supported by overly generous government subsidies we aren't going to see technology sorting out winners and losers in the market, however.
Update: in case you wonder what $1.15/Wpeak means, I calculate that for an environment with a capacity factor of 0.2 (i.e. San Franciso), when amortized over 25 years it works out to under $0.04/kWh. Each peak Watt will average 1.6 kWh/annum (max of 1.75 kWh in first year, dropping by 20 % over 25 years). Assumptions: energy inflation of 2.5 %/annum, general inflation of 2.5 %/annum, interest on financing of 6.0 %/annum. You have to add in all ancillary costs onto that four cent figure (such as frames, inverter, etc.) but the point remains obvious.
21 May 2008
28 April 2008
Magna Proposes Plug-in Hybrid
An article by George Keenan in the Globe and Mail has revealed that Magna International Inc., the huge Canadian automobile parts manufacturer, is proposing to build a plug-in hybrid vehicle by 2010. The owner, Frank Stronach, was interviewed by Keenan and stated,
My personal suspicion is that Magna is looking to get into the hybrid parts business, and developing a complete vehicle is a way for them to achieve this. Magna has previously stated that they think hybrid sales will top 1.7 million a year by 2013. Right now Ford's hybrid efforts are stymied by the fact that most of their supply chain is Japanese. GM will have similar issues with the Volt.
This project is largely simply good business practice by Magna in the face of increasing fuel costs. The article makes clear that the viability of a plug-in hybrid is a function of the difference between the price of oil and the price of gasoline. Fortunately, plug-in hybrid technology can be rolled out in small increments, gaining market share first from the early adopters and then through economic advantage as the price of batteries declines and gasoline increases.
I did take a look at the comments in the article (probably a mistake), and I was a little annoyed to see that people were suggesting that we didn't have the electricity or power would be supplied by "Ohio coal plants." Practically, all the early adopters of plug-in cars can be recharged by the idle capacity that exists and night-time. Giant thermal plants aren't easily throttled down, so there is typically a surfeit of power that is otherwise wasted at night. In the future, plug-ins can be aggregated to act as 'deferrable demand' for the power utilities, smoothing out the intermittency of solar and wind power, and allowing greater market penetration from those technologies.
New technologies such as hybrids offer a great market for Magna's parts and its ability to build complete vehicles, Mr. Stronach said in an interview, noting that cars with Magna-developed hybrid engines are already being tested in Europe. "You don't have to be a great scientist to know that we're going to be out of oil sooner or later," Mr. Stronach said.The effort is being fronted by Magna Steyr in Austria. Steyr actually builds complete vehicles that are badged under other manufacturers. Magna is budgeting $30 million for the effort, which is hardly insignificant when you consider it's only over two years, even for corporate research (i.e. no cheap graduate student labour). Overall I think that their project will be late, however, unless their goal is simply 'proof of principal'. That said, Magna claims to already be working on the project, so who knows how long they've kept this under wraps. Magna is also involved with the Tesla Roadster.
My personal suspicion is that Magna is looking to get into the hybrid parts business, and developing a complete vehicle is a way for them to achieve this. Magna has previously stated that they think hybrid sales will top 1.7 million a year by 2013. Right now Ford's hybrid efforts are stymied by the fact that most of their supply chain is Japanese. GM will have similar issues with the Volt.
This project is largely simply good business practice by Magna in the face of increasing fuel costs. The article makes clear that the viability of a plug-in hybrid is a function of the difference between the price of oil and the price of gasoline. Fortunately, plug-in hybrid technology can be rolled out in small increments, gaining market share first from the early adopters and then through economic advantage as the price of batteries declines and gasoline increases.
I did take a look at the comments in the article (probably a mistake), and I was a little annoyed to see that people were suggesting that we didn't have the electricity or power would be supplied by "Ohio coal plants." Practically, all the early adopters of plug-in cars can be recharged by the idle capacity that exists and night-time. Giant thermal plants aren't easily throttled down, so there is typically a surfeit of power that is otherwise wasted at night. In the future, plug-ins can be aggregated to act as 'deferrable demand' for the power utilities, smoothing out the intermittency of solar and wind power, and allowing greater market penetration from those technologies.
23 April 2008
Recycled Steam
So I'm in the process of moving (yet again), which has put the brakes on me producing another technical post. So, in lo of that, I think I'll beat on a journalist. Yeah I know, it's like killing kittens, they're just so cute and helpless, but hey, if it helps me vent some frustrations, it's all good.
So I recently read in The Atlantic (home of the esteemed James Fallows) an article by Lisa Margonelli on combined heat and power. In general, this article is fairly good, especially the second half. However, I still saw some paragraphs that rankled. Let's dive in, shall we?
Ok, so definition time: this article is about combined heat-and-power (CHP), but you won't see those words in this article. In fact, the article only talks about the other way around — capturing waste heat to make electricity.
CHP usually aims to take an industrial activity where you burn a fossil fuel for process heat, and run the fuel through an electricity generation process first and use the waste heat for the process. Margonelli, on the other hand, provides an example where electricity is used for heating. This isn't common, because electricity is still far more expensive than natural gas on a pure dollar per Joule basis. In fact, it's only used when you need either extremely high purity or extremely high temperatures. Such as,
TANSTAAFL (There Ain't No Such Thing As A Free Lunch) applies here as much as anywhere. For some plants, better insulation may be a better buy.
The other giant impediment to CHP the article sort of dances around but never really addresses. In the giant race to the bottom of labour costs (i.e. off-shoring), it is a pretty big gamble for a power plant to setup for combined heat and power and then hope that their customer will still be around in five years. Low-grade steam isn't something you can pump around the state to find a new customer because you'll simply bleed it all off as parasitic losses to the pipeline. So I think the emphasis on Free Trade which has introduced such volatility in the cost of labour is probably a big part of the general failure of CHP to have a big impact on our energy economy.
The other reason CHP hasn't really taken off is that natural gas hasn't turned out to be as cheap or as fungible as expected, and it's the only fossil fuel that's really clean enough to run with decentralized power and easily pipelined. Coal isn't.
So I recently read in The Atlantic (home of the esteemed James Fallows) an article by Lisa Margonelli on combined heat and power. In general, this article is fairly good, especially the second half. However, I still saw some paragraphs that rankled. Let's dive in, shall we?
The U.S. economy wastes 55 percent of the energy it consumes, and while American companies have ruthlessly wrung out other forms of inefficiency, that figure hasn’t changed much in recent decades.and, later,
For the better part of a century, we’ve gotten electricity from large, central generators, which waste nearly 70 percent of the energy they burn.A ha! Yes, the ever popular confusion regarding the difference between useful work and waste heat. Once is forgivable as editorial discretion, but twice is a pattern. Let's take nice, high-pressure and hot steam and pass it through a steam turbine. Surprise, we lose heat and pressure from the steam in order to run the Rankin cycle. You can take that steam and pass it through another turbine, but the 2nd cycle will get a lot less electricity out for the same capital costs. The final potential use then is to take the latent heat from the low-quality steam and dump it somewhere: process heat for drying , heating the factory floor, or speeding up some chemical reaction.
Ok, so definition time: this article is about combined heat-and-power (CHP), but you won't see those words in this article. In fact, the article only talks about the other way around — capturing waste heat to make electricity.
CHP usually aims to take an industrial activity where you burn a fossil fuel for process heat, and run the fuel through an electricity generation process first and use the waste heat for the process. Margonelli, on the other hand, provides an example where electricity is used for heating. This isn't common, because electricity is still far more expensive than natural gas on a pure dollar per Joule basis. In fact, it's only used when you need either extremely high purity or extremely high temperatures. Such as,
Heat, which in some industrial kilns reaches 7,000F, can be used to produce more steam.tungsten tool making for one. Needless to say, most industrial activity isn't involved in the manufacture of refractory materials, zone-refined silicon, etc. This is my major problem with the article. The example provided isn't very representative of industrial uses of heat. What can be economic for a specialty steel refiner probably isn't for an ethanol plant or oil refinery.
TANSTAAFL (There Ain't No Such Thing As A Free Lunch) applies here as much as anywhere. For some plants, better insulation may be a better buy.
In some industries, investments in energy efficiency also suffer because of the nature of the business cycle. When demand is strong, managers tend to invest first in new capacity; but when demand is weak, they withhold investment for fear that plants will be closed. The timing just never seems to work out. McKinsey found that three-quarters of American companies will not invest in efficiency upgrades that take just two years to pay for themselves.This says a lot more about business leaders' acumen than the particulars of a efficiency upgrade. If you can't generate some cash flow to invest in capital equipment (and that is what we are discussing here — a gain in productivity) during a boom you probably aren't going to survive the inevitable bust. Why the emphasis on capacity growth? Are the CEOs really that concerned about losing market share? Or is this just an example of knee-jerk brownian attitudes? Or are executives just really dumb? (Don't answer that.)
The other giant impediment to CHP the article sort of dances around but never really addresses. In the giant race to the bottom of labour costs (i.e. off-shoring), it is a pretty big gamble for a power plant to setup for combined heat and power and then hope that their customer will still be around in five years. Low-grade steam isn't something you can pump around the state to find a new customer because you'll simply bleed it all off as parasitic losses to the pipeline. So I think the emphasis on Free Trade which has introduced such volatility in the cost of labour is probably a big part of the general failure of CHP to have a big impact on our energy economy.
The other reason CHP hasn't really taken off is that natural gas hasn't turned out to be as cheap or as fungible as expected, and it's the only fossil fuel that's really clean enough to run with decentralized power and easily pipelined. Coal isn't.
02 April 2008
Boom and Bust Stifles Non-resource Economic Activities
Canada is, by in large, a resource-based economy. There's significant manufacturing in Ontario and Quebec, but most of the country operates on the principle of collecting natural resources and selling them to more populous countries. Basically we take advantage of our low population density relative to the fact that we're the 2nd largest country in the world. Being a resource economy comes with the drawback that you live at the mercy of the large economies of the world.
One often heard complaint is that we don't process our raw materials to add value to them, to any significant degree. In British Columbia in the 1990s the cry was over raw logs being exported to Japan without any milling.
The Globe and Mail's Inside Energy Blog had a post up recently on how the provincial and federal governments were showing no interest in pushing bitumen producers towards upgrading the product to synthetic crude in Alberta. Rather, they pipeline the bitumen (and presumably some solvent) South to the terminals around Chicago so that it can be upgraded there. The obvious complaint by unionized workers is that it should be done locally.
Technically, upgrading the bitumen elsewhere makes Alberta's carbon dioxide emissions look just a little better, but the net addition to the atmosphere is still going to be the same. The reason the corporations might want to do this is pretty obvious: labour is very expensive in Alberta, and much cheaper in the American Midwest.
The problem with this whole concept of trying to encourage a "value-added" industry is that it simply cannot survive the boom-and-bust resource cycle. To put it simply, if you are a manufacturer, would you want to put your operation in Alberta with the knowledge that in a boom all your costs would inflate like crazy and your employees decamp for the oil patch? And in a bust, the USA is likely in a recession, so you hurt then too. It seems like a no-win situation.
Peter Lougheed (famous ex-premier) is well known for wanting to develop a plastics industry in the province, but I simply don't see it happening without a radical change in the royalty structure. The development of "value-added" industry would require provincial governments to apply a brake to resource development when commodity prices are high, something they generally don't have the discipline to do.
One often heard complaint is that we don't process our raw materials to add value to them, to any significant degree. In British Columbia in the 1990s the cry was over raw logs being exported to Japan without any milling.
The Globe and Mail's Inside Energy Blog had a post up recently on how the provincial and federal governments were showing no interest in pushing bitumen producers towards upgrading the product to synthetic crude in Alberta. Rather, they pipeline the bitumen (and presumably some solvent) South to the terminals around Chicago so that it can be upgraded there. The obvious complaint by unionized workers is that it should be done locally.
Technically, upgrading the bitumen elsewhere makes Alberta's carbon dioxide emissions look just a little better, but the net addition to the atmosphere is still going to be the same. The reason the corporations might want to do this is pretty obvious: labour is very expensive in Alberta, and much cheaper in the American Midwest.
The problem with this whole concept of trying to encourage a "value-added" industry is that it simply cannot survive the boom-and-bust resource cycle. To put it simply, if you are a manufacturer, would you want to put your operation in Alberta with the knowledge that in a boom all your costs would inflate like crazy and your employees decamp for the oil patch? And in a bust, the USA is likely in a recession, so you hurt then too. It seems like a no-win situation.
Peter Lougheed (famous ex-premier) is well known for wanting to develop a plastics industry in the province, but I simply don't see it happening without a radical change in the royalty structure. The development of "value-added" industry would require provincial governments to apply a brake to resource development when commodity prices are high, something they generally don't have the discipline to do.
31 March 2008
Lifetime Electricity Costs for High-end Video Cards
So a few weeks ago I discussed how we're going to need a greater emphasis on low power consumption electronic design in the future. I thought it would be helpful to actually put down some numbers and see how big a cost power consumption is for high-end computer equipment. On some equipment, especially that used in server farms such as hard drives, power draw is already an important metric. For other components, we often are not even given consumption numbers by the manufacturers.
High-end graphics cards are becoming particularly power hungry, as this chart by anandtech.com shows. The two current best-performance at a reasonable price-point video cards are the 8800GT by NVidia and Radeon 3870 by ATI. Even idling, these systems chew through an impressive amount of power — 165 W in the case of the NVidia product and 125 W for the ATI one. I don't know if anandtech.com's methodology is normalized for the efficiency of the power supply or not, but regardless they are burning a lot of power for doing next to nothing. Average residential electricity prices are up to 10.4 ¢/kW·h now in the US for 2006.
Let's assume that the lifetime of a card is always on at idle for two years. "Idle" in this case would basically extend to using any 2-D application, such as browsing the internet or using a word processor. Only 3-D accelerated games are going to stress these systems to any significant degree.
As we can see, the operational cost of these two cards is roughly comparable to the purchase price. Even with the modern price of gasoline, automobiles don't have such a high proportion of their lifetime cost associated with fuel.
Both of these cards come with 512 MB of fast memory spread out over eight chips. However, a single buffer at 1280x1024 pixels with 32-bit resolution requires less than 6 MB of RAM, so there's no need to maintain all that memory powered on for the vast majority of computer applications. One chip should suffice for a triple buffered display.
Similarly, it should be technically possible to clock down the processor and bus speeds dynamically to reduce the power consumption of the GPU. Alternatively, one could embed a slow GPU for 2D applications. Most motherboards are available with on-board video on the Northbridge chipset which is just fine for web browsing (useful if you ever want to flash the BIOS on your video card BTW). The marginal cost of on-board graphics is probably around $5 to the manufacturer.
I find it somewhat surprising that neither of the major graphics manufacturers have tried to radically improve the power performance of their cards. There is, potentially, a major competitive advantage to be had. For example, if ATI was to spend $5 per card and drop the idle power requirement to 1/8th that of the Nvidia model, and advertise that fact and the estimated savings aggressively, they could recapture a lot of the market share they've ceded since the heyday of the Radeon 9700 Pro.
High-end graphics cards are becoming particularly power hungry, as this chart by anandtech.com shows. The two current best-performance at a reasonable price-point video cards are the 8800GT by NVidia and Radeon 3870 by ATI. Even idling, these systems chew through an impressive amount of power — 165 W in the case of the NVidia product and 125 W for the ATI one. I don't know if anandtech.com's methodology is normalized for the efficiency of the power supply or not, but regardless they are burning a lot of power for doing next to nothing. Average residential electricity prices are up to 10.4 ¢/kW·h now in the US for 2006.
Let's assume that the lifetime of a card is always on at idle for two years. "Idle" in this case would basically extend to using any 2-D application, such as browsing the internet or using a word processor. Only 3-D accelerated games are going to stress these systems to any significant degree.
| Video Card | NVidia 8800GT | ATI Radeon 3870 |
| Initial Purchase Price | $260 | $255 |
| Idle Power Consumption | 165 W | 125 W |
| Expected Lifetime | 17500 hours | 17500 hours |
| Lifetime Est. Power Consumption | 2187.5 kW·h | 2887.5 kW·h |
| Lifetime Electricity Cost | $300.30 | $227.50 |
| Total Cost | $560.30 | $482.50 |
As we can see, the operational cost of these two cards is roughly comparable to the purchase price. Even with the modern price of gasoline, automobiles don't have such a high proportion of their lifetime cost associated with fuel.
Both of these cards come with 512 MB of fast memory spread out over eight chips. However, a single buffer at 1280x1024 pixels with 32-bit resolution requires less than 6 MB of RAM, so there's no need to maintain all that memory powered on for the vast majority of computer applications. One chip should suffice for a triple buffered display.
Similarly, it should be technically possible to clock down the processor and bus speeds dynamically to reduce the power consumption of the GPU. Alternatively, one could embed a slow GPU for 2D applications. Most motherboards are available with on-board video on the Northbridge chipset which is just fine for web browsing (useful if you ever want to flash the BIOS on your video card BTW). The marginal cost of on-board graphics is probably around $5 to the manufacturer.
I find it somewhat surprising that neither of the major graphics manufacturers have tried to radically improve the power performance of their cards. There is, potentially, a major competitive advantage to be had. For example, if ATI was to spend $5 per card and drop the idle power requirement to 1/8th that of the Nvidia model, and advertise that fact and the estimated savings aggressively, they could recapture a lot of the market share they've ceded since the heyday of the Radeon 9700 Pro.
16 March 2008
Carbon Trading, Bubble Hysteria
In the past, I thought that carbon trading of the style proposed by the Kyoto treaty could be a positive way to affect change, both from the point of view of climate change and peak oil. I have gradually come to change my mind, and I now favour a vanilla carbon tax with no loop holes. My decision was largely made watching the fallout from the dot-com bust, and now the US mortgage security shenanigan's.
Anything that Wall Street can game to enrich themselves, they will game. These crony capitalists with their derivatives and good-old-boys compensation schemes are really the enemy of free market entrepreneurship. If you bought $50 puts on Bear Sterns on Monday (10Mar2008), you gained a lot of money, but no wealth was crated.
I fail to see any advantage in giving Wall Street access to the carbon market.
A lot of people suspect that the recent run-up in commodities is largely due to money flowing out of mortgage securities and into commodities. I am not convinced of this, due to a number of factors.
Past pump and dumps in commodities — such as nickel — can work because you can store an entire years worth of the world's nickel production in a single large warehouse. On the other hand, a day's worth of oil production is roughly a cube 300 m on each side. It's very difficult to take oil out of the system unless you are a national oil company.
Furthermore, demand remains remarkably inelastic. Predictions of any tipping point where demand suddenly falls off at some price-point haven't panned out. When oil is consumed, it's really gone.
In addition, a huge hunk of the recent run-up in crude oil prices is simply due to the devaluation of the US dollar. The proof is in the US dollar index. So yes, the US is getting hosed on their oil consumption but the majority of the world's consumption is pretty well hedged against this rise.
China even subsidizes the cost of oil to their citizen-consumers. They have to do something with their dollar reserves. So even if we see a lot of demand destruction for petroleum from the USA it's not clear if that will really hammer the price of oil back down to $80 for a sustained period. The twin inflationary and deflationary pressures currently at war between the US Federal Reserve and Wall Street respectively make that an extremely difficult call to make.
I know one thing for sure. I will never hire someone with an MBA on their resume.
This brings up another question, namely is there potential for a bubble in investment in the so-called 'Cleantech' sector?
The world economy is in a slow transition from fossil fuels to alternative sources of energy, true or false? If you answer "true," then your only reasonable explanation for a bubble would be that the alternatives are growing at an unsustainable rate relative to the increase in the price of fossil fuels.
Unlike say, Pets.com or granite counter tops, a wind turbine or photovoltaic power has intrinsic value. They produce electricity, which is a very high-quality form of energy. I can calculate the net present value of a set of photovoltaic panels to a rather high degree of accuracy (~10 %), merely by noting the climate in which they are installed and their age.
The gap between the cost of doing work with oil as your energy source compared to electricity continues to enlarge. Consider, with electricity at $0.09/kWh, natural gas futures at $10.00/MMbtu, and oil at $111/bbl, the value of switching to electrons may pay back quickly. Note: these numbers are changing as fast as I can type this article.
At this point, electrifying train tracks or heating your home with a heat pump looks really good going forward (natural gas isn't nearly as fungible as oil). Look at it this way, there are 153 million employed people in the US, and they consume 19.6 million barrels of oil a day. That's $14.20/day or $5190 a year per (money earning) person at current prices. That's a lot of Starbucks.
There is a potentially enormous sum of money to be made in weaning North America, Japan, and Europe off the oil habit. It's not going to be easy since there is still a massive amount fossil fuels in the Earth's crust. The saving grace of the alternative energy industry is that its costs will go down with time whereas fossil fuel companies will have to extract poorer and poorer quality resources and hence become more expensive.
Of course, not everyone involved in cleantech will be idealists. A number of companies will be formed with the express aim of relieving investors of their capital. These fraudsters will primarily aim at people conceited enough to believe that they understand science, but lack the actual formal education to evaluate what they are seeing in numerical terms. I'm looking at the dot-com millionaires here. Beware the Rube Goldberg machine, or the company with salaries a much higher proportion of their expenses than equipment.
I will say, from personal experience, doing research in a corporate environment where every line of research has to have an immediate application and money for equipment is tight isn't very efficient compared to government funded labs. Now the bureaucracy, well...
Anything that Wall Street can game to enrich themselves, they will game. These crony capitalists with their derivatives and good-old-boys compensation schemes are really the enemy of free market entrepreneurship. If you bought $50 puts on Bear Sterns on Monday (10Mar2008), you gained a lot of money, but no wealth was crated.
I fail to see any advantage in giving Wall Street access to the carbon market.
A lot of people suspect that the recent run-up in commodities is largely due to money flowing out of mortgage securities and into commodities. I am not convinced of this, due to a number of factors.
Past pump and dumps in commodities — such as nickel — can work because you can store an entire years worth of the world's nickel production in a single large warehouse. On the other hand, a day's worth of oil production is roughly a cube 300 m on each side. It's very difficult to take oil out of the system unless you are a national oil company.
Furthermore, demand remains remarkably inelastic. Predictions of any tipping point where demand suddenly falls off at some price-point haven't panned out. When oil is consumed, it's really gone.
In addition, a huge hunk of the recent run-up in crude oil prices is simply due to the devaluation of the US dollar. The proof is in the US dollar index. So yes, the US is getting hosed on their oil consumption but the majority of the world's consumption is pretty well hedged against this rise.
China even subsidizes the cost of oil to their citizen-consumers. They have to do something with their dollar reserves. So even if we see a lot of demand destruction for petroleum from the USA it's not clear if that will really hammer the price of oil back down to $80 for a sustained period. The twin inflationary and deflationary pressures currently at war between the US Federal Reserve and Wall Street respectively make that an extremely difficult call to make.
I know one thing for sure. I will never hire someone with an MBA on their resume.
This brings up another question, namely is there potential for a bubble in investment in the so-called 'Cleantech' sector?
The world economy is in a slow transition from fossil fuels to alternative sources of energy, true or false? If you answer "true," then your only reasonable explanation for a bubble would be that the alternatives are growing at an unsustainable rate relative to the increase in the price of fossil fuels.
Unlike say, Pets.com or granite counter tops, a wind turbine or photovoltaic power has intrinsic value. They produce electricity, which is a very high-quality form of energy. I can calculate the net present value of a set of photovoltaic panels to a rather high degree of accuracy (~10 %), merely by noting the climate in which they are installed and their age.
The gap between the cost of doing work with oil as your energy source compared to electricity continues to enlarge. Consider, with electricity at $0.09/kWh, natural gas futures at $10.00/MMbtu, and oil at $111/bbl, the value of switching to electrons may pay back quickly. Note: these numbers are changing as fast as I can type this article.
| Energy Currency | Energy Cost (US$/GJ) | Energy to Work Efficiency | Exergy Cost |
| Electricity | 25.00 | 1.0 | 25.00 |
| Natural Gas | 9.50 | 0.4 | 23.70 |
| Crude Oil | 17.35 | 0.35 | 49.55 |
At this point, electrifying train tracks or heating your home with a heat pump looks really good going forward (natural gas isn't nearly as fungible as oil). Look at it this way, there are 153 million employed people in the US, and they consume 19.6 million barrels of oil a day. That's $14.20/day or $5190 a year per (money earning) person at current prices. That's a lot of Starbucks.
There is a potentially enormous sum of money to be made in weaning North America, Japan, and Europe off the oil habit. It's not going to be easy since there is still a massive amount fossil fuels in the Earth's crust. The saving grace of the alternative energy industry is that its costs will go down with time whereas fossil fuel companies will have to extract poorer and poorer quality resources and hence become more expensive.
Of course, not everyone involved in cleantech will be idealists. A number of companies will be formed with the express aim of relieving investors of their capital. These fraudsters will primarily aim at people conceited enough to believe that they understand science, but lack the actual formal education to evaluate what they are seeing in numerical terms. I'm looking at the dot-com millionaires here. Beware the Rube Goldberg machine, or the company with salaries a much higher proportion of their expenses than equipment.
I will say, from personal experience, doing research in a corporate environment where every line of research has to have an immediate application and money for equipment is tight isn't very efficient compared to government funded labs. Now the bureaucracy, well...
11 March 2008
Squestration in the Oil Sands
Soooo.... last year the federal government of Canada introduced a bunch of new environmental programs. This year, they threw a lot of that out the window. Now we have a new environmental program: legislating projects that produce large quantities of carbon dioxide to employ sequestration. These large sources are coal plants and oil sands developments. The obvious loophole for everyone to observe is that it only applies to projects started after 2011, and there's evidently no grandfathering.
I'm not sure I believe whether they Conservative government actually intends to go through with this. Afterall, they are a minority government and while the opposition has no stomach for a new election, they aren't likely to last until 2011. The proof will really be in the activity in the oil patch. If they all rush to start projects before 2011 and have nothing scheduled after that, then maybe the Conservatives are actually serious.
Another question that crosses my mind is the quantity of good sequestration locations in close proximity to the main oil sands patch by Fort McMurray. Alberta is, generally speaking, a big sedimentary basin but the Northeast portion of the province is somewhat different if my memory is correct.
Personally, I foresee the cost of sequestering 'dirty' fuel sources such as bitumen or bituminous coal being onerous. Alberta already has the highest electricity prices in the nation and prices can only accelerate with the introduction of sequestration.
I'm not sure I believe whether they Conservative government actually intends to go through with this. Afterall, they are a minority government and while the opposition has no stomach for a new election, they aren't likely to last until 2011. The proof will really be in the activity in the oil patch. If they all rush to start projects before 2011 and have nothing scheduled after that, then maybe the Conservatives are actually serious.
Another question that crosses my mind is the quantity of good sequestration locations in close proximity to the main oil sands patch by Fort McMurray. Alberta is, generally speaking, a big sedimentary basin but the Northeast portion of the province is somewhat different if my memory is correct.
Personally, I foresee the cost of sequestering 'dirty' fuel sources such as bitumen or bituminous coal being onerous. Alberta already has the highest electricity prices in the nation and prices can only accelerate with the introduction of sequestration.
15 February 2008
The Difference between Economics and Physics
In economics, one assumes people are rational. In physics, one tests assumptions.
Economics
Physics
14 February 2008
Low-power Control Electronics
Phase-change Memory
Intel has recently shipped a beta-test commercial phase-change RAM (hat tip: Fraser's Energy Blog). I refer readers to the Wikipedia article on PCRAM for background. Phase change RAM relies on the application of heat to transform a rare-earth glass from a glassy (amorphous) to crystalline state. This is the same process that is used in writing to DVDs, except that instead of applying heat by a laser, it's applied by an electronic current. In a DVD, the index of refraction of the material can be altered, while for PCRAM the resistivity of the material is the method for storing bits.
Aside: that the EETimes.com article I linked states that the role-out of this product was delayed due to Intel not being able to get a big loan for its new subsidary operation. Another result of the debt bubble I guess.
Phase-change RAM is interesting from an energy perspective in that it non-volatile, i.e. it requires no power to store data, unlike conventional RAM. You only need to apply power when you want to read or write from it. It's also, apparently, much faster and robust than flash memory. Some of the discussion around this technology suggests that memory access requires around 5 ns, which would make it comparable to DDR2-800MHz RAM with standard memory timings.
Intel is delivering a testbed 128 MB chip, which is obviously on the small side for the moment. Compare that to my 16 GB flash USB stick. As they move to a smaller process, the memory density will increase geometrically.
So reader may be wondering, "Nice, but what does this have to do with energy?" It's a simple fact that renewable power supplies like photovoltaics or wind turbines are going to require control electronics household appliances in order to control the demand side. The first step is to have net and smart metering, and then link that to items like the air conditioner and refrigerator in order to create a pool of deferrable demand for the power utilities.
Let's say you have a refrigerator burning 400 kWh per year, that's equivalent to a constant power draw of 45 W. Does it make any sense to add 40 W of control electronics in order to communicate with the utility and cycle the fridge on and off as the wind blows? Obviously not. Hence the need for control electronics that barely sip electrons. Non-volatile memory is a big part of this. The items to look for are for low-voltage processors either with radically scalable clock speeds or multi-core devices where a slow device turns on the faster one, and highly efficient AC to DC power supplies.
Actually migrating from our current vampire appliances to something brighter is going to take a long, long time if we are relying on electricity costs and consumer awareness to do the job. For one thing, many appliances don't come with labeling that indicates their power consumption, and they should so a green consumer can make an informed choice. Practically, government regulation of electronics is required to encourage all manufacturers to develop low-power electronics. The objective would be to ensure that the leaders in power thrifty electronics aren't put at a competitive disadvantage compared to their lower-tech competitors, who don't have to put up the investment into R&D. Mandates have had enormous success in improving the efficiency of air conditioners and refrigerators in recent years. Electronics is a sector that needs much of the same.
Negative Capacitance Transistors
On the topic of low voltage processors, Sayeef Salahuddin and Supriyo Datta proposed in Nano Letters a concept for radically reducing the operating voltage required to switch the gate in a transistor (warning: math skills and subscription required for access). By way of reminder, the power an electronic circuit draws is proportional to the current and square of the voltage,
What Salahuddin and Datta are proposing is to replace the standard insulting dielectric portion of the gate with a ferroelectric insulator (such as BaTiO3 that would exhibit 'negative capacitance' when placed in series with a regular capacitor. A negative capacitor is one where the charge stored decreases with increasing voltage. The authors show that such a device would basically act as a voltage transformer/amplifier, and allow the control signal that initiates switching to be much smaller.
This proposal is, at the moment, a theoretical construct. We will probably see one of the universities with extensive fabrication laboratories try to build an experimental device sooner rather than later, however.
Intel has recently shipped a beta-test commercial phase-change RAM (hat tip: Fraser's Energy Blog). I refer readers to the Wikipedia article on PCRAM for background. Phase change RAM relies on the application of heat to transform a rare-earth glass from a glassy (amorphous) to crystalline state. This is the same process that is used in writing to DVDs, except that instead of applying heat by a laser, it's applied by an electronic current. In a DVD, the index of refraction of the material can be altered, while for PCRAM the resistivity of the material is the method for storing bits.
Aside: that the EETimes.com article I linked states that the role-out of this product was delayed due to Intel not being able to get a big loan for its new subsidary operation. Another result of the debt bubble I guess.
Phase-change RAM is interesting from an energy perspective in that it non-volatile, i.e. it requires no power to store data, unlike conventional RAM. You only need to apply power when you want to read or write from it. It's also, apparently, much faster and robust than flash memory. Some of the discussion around this technology suggests that memory access requires around 5 ns, which would make it comparable to DDR2-800MHz RAM with standard memory timings.
Intel is delivering a testbed 128 MB chip, which is obviously on the small side for the moment. Compare that to my 16 GB flash USB stick. As they move to a smaller process, the memory density will increase geometrically.
So reader may be wondering, "Nice, but what does this have to do with energy?" It's a simple fact that renewable power supplies like photovoltaics or wind turbines are going to require control electronics household appliances in order to control the demand side. The first step is to have net and smart metering, and then link that to items like the air conditioner and refrigerator in order to create a pool of deferrable demand for the power utilities.
Let's say you have a refrigerator burning 400 kWh per year, that's equivalent to a constant power draw of 45 W. Does it make any sense to add 40 W of control electronics in order to communicate with the utility and cycle the fridge on and off as the wind blows? Obviously not. Hence the need for control electronics that barely sip electrons. Non-volatile memory is a big part of this. The items to look for are for low-voltage processors either with radically scalable clock speeds or multi-core devices where a slow device turns on the faster one, and highly efficient AC to DC power supplies.
Actually migrating from our current vampire appliances to something brighter is going to take a long, long time if we are relying on electricity costs and consumer awareness to do the job. For one thing, many appliances don't come with labeling that indicates their power consumption, and they should so a green consumer can make an informed choice. Practically, government regulation of electronics is required to encourage all manufacturers to develop low-power electronics. The objective would be to ensure that the leaders in power thrifty electronics aren't put at a competitive disadvantage compared to their lower-tech competitors, who don't have to put up the investment into R&D. Mandates have had enormous success in improving the efficiency of air conditioners and refrigerators in recent years. Electronics is a sector that needs much of the same.
Negative Capacitance Transistors
On the topic of low voltage processors, Sayeef Salahuddin and Supriyo Datta proposed in Nano Letters a concept for radically reducing the operating voltage required to switch the gate in a transistor (warning: math skills and subscription required for access). By way of reminder, the power an electronic circuit draws is proportional to the current and square of the voltage,
P = I Vsuch that the voltage a circuit operates on matters a lot when determining power consumption, and how much heat needs to be extracted from it. Nominally, a field-effect transistor (FET) requires about 60 mV to switch. As electronics get smaller and smaller, the power density is increasing, which causes components to run hotter and hotter. The fundamental limitations to Moore's Law are not so much components getting down to the atomic scale but pulling the heat out before the chip melts.
What Salahuddin and Datta are proposing is to replace the standard insulting dielectric portion of the gate with a ferroelectric insulator (such as BaTiO3 that would exhibit 'negative capacitance' when placed in series with a regular capacitor. A negative capacitor is one where the charge stored decreases with increasing voltage. The authors show that such a device would basically act as a voltage transformer/amplifier, and allow the control signal that initiates switching to be much smaller.
This proposal is, at the moment, a theoretical construct. We will probably see one of the universities with extensive fabrication laboratories try to build an experimental device sooner rather than later, however.
02 January 2008
Oil Touches $100
Crude oil managed to hit three digits today for a brief period. A flight to safety it seems, what with the bump in gold as well.
Robert Rapier is pretty lucky on his bet. I think it was the holiday break that saved him.
Robert Rapier is pretty lucky on his bet. I think it was the holiday break that saved him.
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