Category: OTEC

New Book: ‘Water, Energy, and Environment – A Primer’

After a long hiatus from blogging while I worked on a new book, I am pleased to announce that the book ‘Water, Energy, and Environment – A Primer’ will be published by International Water Association Publishing (IWAP) on February 18th (2019). It will be available in both printed and digital form, and the digital version will be downloadable for free as an Open Access (OA) document.

To access the free digital version go to IWAP’s OA website on Twitter: https://twitter.com/IWAP_OA.

Attached below is front material from the book, its preface and table of contents. Designed to serve as a basic and easily read introduction to the linked topics of water, energy, and environment, it is just under 200 pages in length, a convenient size to throw into a folder, a briefcase, or a backpack. Its availability as an OA document means that people all over the world with access to the internet will have access to the book and its 10 chapters.

With the completion of the book I plan to return to a regular schedule of blogging.
…………………………..
Contents
Preface ………………………………….. xi
Acknowledgement ……………………….. xv
Acronyms ……………………………… xvii
Epigraph ……………………………….. xxi
Chapter 1
Water and its global context …………………. 1
1.1 Earth’s Water Resources . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Saline Water and Desalination Processes . . . . . . . . . . . 2
1.3 Energy Requirements and Costs of Desalination . . . . . 5
1.4 Demand for Freshwater . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Implications of Limited Access to Freshwater . . . . . . . . . 9
1.6 Actions to Increase Access to Freshwater . . . . . . . . . . 10
1.7 Gender Equity Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Chapter 2
Energy and its global context ……………….. 13
2.1 Energy’s Role in Society . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Energy Realities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 What is Energy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.4 Energy Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4.1 Important questions . . . . . . . . . . . . . . . . . . . . . . . 18
2.4.2 How is energy used? . . . . . . . . . . . . . . . . . . . . . . 18
2.4.3 Electrification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Chapter 3
Exploring the linkage between water
and energy ……………………………….. 23
3.1 Indirect Linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2 The Policy Linkage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3 The Conundrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4 Addressing the Conundrum . . . . . . . . . . . . . . . . . . . . . . . 26
3.5 The Need for Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 27
Chapter 4
Energy production and its consequences for
water and the environment …………………. 29
4.1 Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2 More on Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.3 Environment and Religion . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3.1 The theocentric worldview . . . . . . . . . . . . . . . . . 33
4.3.2 The anthropocentric worldview . . . . . . . . . . . . . 34
4.3.3 Other worldviews . . . . . . . . . . . . . . . . . . . . . . . . . 34
Chapter 5
Energy options ……………………………. 37
5.1 Fossil Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2 Nuclear Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3 Geothermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.4 The Sun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.5 Energy Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.5.1 Energy demand . . . . . . . . . . . . . . . . . . . . . . . . . . 40
vi Water, Energy, and Environment – A Primer
5.5.2 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.5.3 Saving energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.5.4 Accelerating implementation . . . . . . . . . . . . . . . 43
5.5.5 Energy Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5.6 The lighting revolution . . . . . . . . . . . . . . . . . . . . . 45
5.5.7 Energy efficiency in buildings . . . . . . . . . . . . . . . 48
5.5.7.1 Zero energy buildings . . . . . . . . . . . . . 48
5.5.7.2 Electrochromic windows . . . . . . . . . . . 52
5.6 Energy Efficiency in Industry . . . . . . . . . . . . . . . . . . . . . . 54
5.7 Energy Efficiency in Transportation . . . . . . . . . . . . . . . . 56
Chapter 6
Fossil fuels ………………………………. 61
6.1 Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.1.1 Carbon capture and sequestration . . . . . . . . . . 63
6.1.2 A conundrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.2 Petroleum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.2.1 Oil spills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.2.2 Peak oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.3 Natural Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
6.3.1 Methane hydrates . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.3.2 Fracking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Chapter 7
Nuclear power ……………………………. 85
7.1 Nuclear Fission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.1.1 Fission fundamentals . . . . . . . . . . . . . . . . . . . . . . 85
7.1.2 Introduction to nuclear issues . . . . . . . . . . . . . . . 87
7.1.3 Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.2 Nuclear Fusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.2.1 Fusion fundamentals . . . . . . . . . . . . . . . . . . . . . . 91
7.2.2 Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.2.3 Barriers to Fusion . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.2.4 Pros and cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.2.5 Thoughts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Chapter 8
Renewable energy ………………………… 97
8.1 The Sun’s Energy Source and Radiation
Spectrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
8.2 Direct Solar Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.2.1 Photovoltaics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.2.2 Concentrating solar power (CSP) . . . . . . . . . . 108
8.2.2.1 Power tower . . . . . . . . . . . . . . . . . . . . 109
8.2.2.2 Linear concentrator . . . . . . . . . . . . . . 110
8.2.2.3 Dish engine . . . . . . . . . . . . . . . . . . . . . 111
8.2.2.4 CSTP history . . . . . . . . . . . . . . . . . . . 112
8.2.2.5 Advantages and disadvantages . . . 112
8.2.2.6 Thermal storage . . . . . . . . . . . . . . . . . 113
8.2.2.7 Current status . . . . . . . . . . . . . . . . . . . 114
8.2.2.8 Concentrating photovoltaics (CPV) . 115
8.3 Solar Power Satellite (SPS) System . . . . . . . . . . . . . . 116
8.4 Hydropower and Wind Energy . . . . . . . . . . . . . . . . . . . 119
8.4.1 Hydropower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
8.4.2 Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
8.4.2.1 Onshore wind . . . . . . . . . . . . . . . . . . . 121
8.4.2.2 History . . . . . . . . . . . . . . . . . . . . . . . . . 124
8.4.2.3 An onshore limitation . . . . . . . . . . . . . 124
8.4.2.4 Offshore wind . . . . . . . . . . . . . . . . . . . 125
8.5 Biomass Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
8.5.1 Sources of biomass . . . . . . . . . . . . . . . . . . . . . . 129
8.5.2 Wood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
8.5.3 Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
8.5.4 Algae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
8.5.5 Biochar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
8.5.6 The future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
8.6 Geothermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
8.6.1 Sources of geothermal energy . . . . . . . . . . . . . 134
8.6.2 Manifestations of geothermal energy . . . . . . . 135
8.6.3 Uses of geothermal energy . . . . . . . . . . . . . . . . 135
8.6.3.1 Geothermal power generation . . . . . 136
8.6.3.2 Ground-source heat pumps . . . . . . . 138
8.6.4 An unusual source of geothermal energy . . . . 140
Ocean Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
8.7.1 Wave energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
8.7.1.1 Wave energy conversion
devices . . . . . . . . . . . . . . . . . . . . . . . . 142
8.7.1.2 Potential and pros and cons . . . . . . . 143
8.7.2 Ocean current energy . . . . . . . . . . . . . . . . . . . . 144
8.7.3 Tidal energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.7.3.1 Barrage . . . . . . . . . . . . . . . . . . . . . . . . 146
8.7.3.2 History . . . . . . . . . . . . . . . . . . . . . . . . . 147
8.7.3.3 Environmental impacts . . . . . . . . . . . 147
8.7.4 Ocean thermal energy conversion (OTEC) . . 147
8.7.4.1 Barriers . . . . . . . . . . . . . . . . . . . . . . . . 148
8.7.4.2 OTEC technologies . . . . . . . . . . . . . . 148
8.7.4.3 Other cold water applications . . . . . . 149
8.7.4.4 OTEC R&D . . . . . . . . . . . . . . . . . . . . . 149
Chapter 9
Energy storage …………………………… 151
9.1 Storage and Grids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
9.2 Types of Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
9.2.1 Traditional and advanced batteries . . . . . . . . . 153
9.2.1.1 Lead–acid . . . . . . . . . . . . . . . . . . . . . . 153
9.2.1.2 Sodium sulfur . . . . . . . . . . . . . . . . . . . 153
9.2.1.3 Nickel–cadmium . . . . . . . . . . . . . . . . . 154
9.2.1.4 Lithium-ion . . . . . . . . . . . . . . . . . . . . . 154
9.2.1.5 Supercapacitors . . . . . . . . . . . . . . . . . 155
9.2.2 Flow batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
9.2.3 Flywheels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
9.2.4 Superconducting magnetic energy
storage (SMES) . . . . . . . . . . . . . . . . . . . . . . . . . 158
9.2.5 Compressed air energy storage (CAES) . . . . 159
9.2.6 Pumped storage . . . . . . . . . . . . . . . . . . . . . . . . . 160
9.2.7 Thermal storage . . . . . . . . . . . . . . . . . . . . . . . . . 161
9.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
9.4 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
9.5 Fundamental Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Chapter 10
Policy considerations …………………….. 165
10.1 Important Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
10.1.1 Is there a physical basis for understanding
global warming and climate change? . . . . . . 166
10.1.2 Is there documented evidence for global
warming and climate change? . . . . . . . . . . . . 168
10.1.3 Can global warming and climate change be
attributed to human activities, and what are
those activities? . . . . . . . . . . . . . . . . . . . . . . . . 170
10.1.4 What are the potential short- and long-term
impacts of global warming and climate
change with respect to water supply,
environment, and health? What is the
anticipated time scale for these
impacts? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
10.1.5 What can be done to mitigate the onset
and potential impacts of global warming
and climate change? . . . . . . . . . . . . . . . . . . . . 179
References ……………………………… 183
Index …………………………………… 189

……………………

Preface
This book springs from my strong conviction that clean water and clean energy are the critical elements of long-term global sustainable development. I also believe that we are experiencing the beginning of an energy revolution in these early years of the 21st century. Providing clean water requires energy, and providing clean energy is essential to reducing the environmental impacts of energy production and use. Thus, I see a nexus – a connection, a causal link – among water, energy, and environment. In recent years we have adopted the terminology of the water-energy nexus for the intimate relationship between water and energy, and similarly we can apply the term nexus to the close connections among water, energy, and environment. Thisuse of the term nexus can be, and has been, extended to include the related issues of food production and health. Dealing with, and writing about, a two-element nexus is difficult enough. In this book, I will limit my analysis and discussion to the three-element water -energy-environment nexus and leave the discussion of other possible nexus elements to those more qualified to comment.

This book also springs from my observation that while there are many existing books of a more-or-less technical nature on the three elements of this nexus, a book addressing each of them and their interdependencies in a college-level primer for a broad global and multidisciplinary audience would be valuable. Consideration of these and related issues, and options for addressing them, will be priorities for all levels of government. They will also be priorities for many levels of the
private sector in the decades ahead, both in developing and developed nations. A handbook-style primer that provides an easily read and informative introduction to, and overview of, these issues will contribute broadly to public education. It will assist governments and firms in carrying out their responsibilities to provide needed services and goods in a sustainable manner, and help to encourage young people to enter these fields. It will serve as an excellent mechanism for exposure of experts in other fields to the issues associated with the water-energy-environment nexus. Further, in addition to the audiences mentioned above, target audiences include economists and others in the finance communities who will analyze and provide the needed investment funds, and those in the development community responsible for planning and delivering services to underserved populations.
The book is organized as follows: the first chapter will be devoted to the concept of nexus and how the three elements, water, energy, and environment, are inextricably linked. This recognition leads to the conclusion that if society is to optimize their contributions to human and planetary welfare they must be addressed jointly. No longer must policy for each of these elements be considered in its own silo. Chapters 2 and 3 will be devoted to spelling out global contexts for water and energy issues, respectively. Chapter 4, on related environmental issues, will address the issues of water contamination, oil spills, fracking, radioactive waste storage, and global warming/
climate change. Chapter 5 will be a discussion of energy efficiency – i.e., the wise use of energy – and its role in limiting energy demand and its associated benefits. Chapter 6 will focus on the basics of fossil fuels – coal, oil, natural gas – which today dominate global energy demand. Chapter 7 will discuss nuclear-fission-powered electricity production, which today accounts for 10% of global electricity. It will also discuss the prospects for controlled nuclear fusion. Chapter 8 will discuss the broad range of renewable energy technologies – wind, solar,hydropower, biomass, geothermal, ocean energy – which are the basis of the now rapidly emerging energy revolution. Chapter 9 will discuss the closely related issue of energy storage. Finally, Chapter 10 will address
policy issues associated with water, energy, and environment, discuss policy history and options, and provide recommendations.

Peter Varadi Sees a Dim Future for the Oil Industry

The attached article by Peter Varadi presents a dim view of the ability of big oil companies to adapt to rapidly changing global conditions. It reflects his personal experiences as a solar energy pioneer and entrepreneur dealing with representatives of the oil industry, starting in the 1970s. The article was first published earlier this week in the e-journal Energy Post (www.energypost.eu.com) and is republished here as an important perspective on the future of an important part of the fossil fuel industry.

……………………………

Twilight of the Gods of Oil
by Peter F Varadi

For most of the past 40 years OPEC, the association of Big Oil exporters, and the Big International Oil Companies controlled our lives, but they have started on an inevitable decline, writes solar pioneer Peter F. Varadi. Competition from renewables and smaller players as well as tighter climate polices will make their business model obsolete. According to Varadi, their corporate culture makes it unlikely they will be able to adapt.

OPEC was initiated in 1960 by five countries and by the 1970s had 12 members who controlled the flow of oil and its price. Everybody remembers the 1973 oil crisis which ushered in a recession in the US and other countries. In the following years OPEC regularly made threats and on at least one occasion caused another crisis, in 1979. They forgot the age old saying that one should not make war with one’s customers. The customers will react somehow.

And they did – as is evident from the fact that today among the World’s top 10 oil producing countries only four are members of OPEC and the USA, which was the hardest hit by the 1973 “oil embargo”, now exceeds in oil production legendary oil producer Saudi Arabia by no less than 12.5% and the Russian Federation by 29%. Among the 20 oil producing countries with daily production over 1,000,000 bbl/day there are only 10 OPEC countries.

A case in point is Brazil, where crude oil production in 1980 was 182,000 bbl/day (barrels per day) and in 2014 catapulted to 2,950,000 bbl/day – more than is produced in the OPEC countries Kuwait, Venezuela and Nigeria.

The destructive effect of the “corporate culture” is to prohibit companies from moving into a new but related field

OPEC is at a point where it is falling apart. It consists now of a group of haves and have-nots. The have-nots want the largest, Saudi Arabia, to decrease production but they do not understand that we are not in the good old days anymore. There is now plenty of oil and the new exploration method, fracking, has turned the table around.

The conclusion is as, BP Chief Economist Spencer Dale said recently, “OPEC is simply powerless”. If this would be the script of a movie about OPEC, the next frame would have only two words “THE END”.

Corporate culture
The Big Oils, international oil companies ExxonMobil, Shell, Chevron, BP, Total and others have also gone past their zenith and started on their twilight journey. In the future they may either transform themselves (as some German utility companies are attempting to do) or become immaterial, as happened to companies such as Kodak, RCA, Xerox, Polaroid and many others – names the present generation does not even remember.

The similarity between these forgotten companies is that they all rode up to the top and then went down and became oblivious. The reason was not that people stopped making photographs or buying TV sets or making copies of their papers – the reason was that they started doing these things differently, and the companies’ “corporate culture” made it impossible for them to adapt.

Thus, for example, Kodak’s management and technical staff could not believe that digital imaging could even threaten the traditional film business. Their “corporate culture” did not let them do it and 124 years after it was founded it filed for bankruptcy in 2012.

There are many similar examples. The conclusion is that the destructive effect of the “corporate culture” is to prohibit companies from moving into a new but related field which ultimately could make their dominant business secondary or even obsolete. And that is happening now with the Big Oils.

Deeper and deeper
John D. Rockefeller’s oil empire was structured to control the oil refinery and distribution business. ExxonMobil, a descendant of Rockefeller’s Standard Oil, is still the largest refiner in the world. It is hard to pinpoint the time when oil companies started to concentrate on finding and producing more and more oil and gas. But by the 1960s they had developed expertise and money to carry out very large projects, which came to be the hallmark of the “corporate culture” of Big Oil.

The story of Shell’s “Polar Pioneer”, the oil rig used to start the exploitation of the very large oil resources in the Arctic, will be a famous milestone in the history of Big Oil

Drilling to find oil started 156 years ago in 1859 in Pennsylvania with the 69.5-foot (21.2 meter) deep “Drake well”. As demand increased the oil companies developed technology to find new oil and gas reservoirs. They had to go deeper and deeper to discover new oil formations, many of them offshore under deep sea water, and lately even in the Arctic. Today a great number of drilling rigs are being used which can operate in water deeper than one mile (1,600 meters) and can drill to a depth of 5 miles (9,000 meters) or below. In 2012 ExxonMobil completed the world’s deepest well on the Sakhalin shelf in the Russian Far East: 7.7 miles (12,376 meters) deep and 7.1 miles (11,426 meters) out under the ocean.

The cost of these deep and offshore drillings is unbelievably high. The daily rental cost of a deep water drilling rig used for example in the Gulf of Mexico is about $500,000 excluding other expenses. Because of their expertise and wealth, this type of drilling assured Big Oil a dominant position. The cost of drilling was immaterial because the upward elasticity of the price of oil seemed to be infinite.

The price of oil (per barrel) at the beginning of 2000 was $25. This lasted for 3 years when in 2003 it started to move higher. In 2005, it had doubled and 3 years later in 2008 doubled again and reached $100. From 2008 the price of oil fluctuated between $90 and $110. However, by the middle of 2014, the price started to decline sharply and by the beginning of 2015 it was $50 – half of what it was 6 months before. Since then it has been in the $35 to $50 range, which was the price of a barrel of oil 11 years ago (data: US Energy Information Administration).

Small club
The stability of the price of oil in the period of 2008 to mid 2014 prevailed in spite of increased usage in China and India and of interruptions from major suppliers such as Libya, Iran, Iraq, and Venezuela. These were counterbalanced by improved efficiency of products using oil, such as cars, switching from oil to natural gas in electric power stations and the beginning of the tightening of policies related to global warming. The high price of oil also encouraged more drilling and by now over 100 countries are producing more than 1,000 bbl/day.

But there was another reason why prices eventually came down, a new technology called “fracking” to extract oil and gas from shale, which started to be used on a large scale. Drilling for oil deeper and deeper at very challenging locations became extremely expensive in comparison. It required enormous amount of capital and therefore it was a small club which was able to do it. Fracking required little money and therefore lots of startups got in.

The question now is will Big Oil find new areas to grow?

Fracking experiments, the injection of fluid into shale beds at high pressure in order to free up petroleum resources (such as oil or natural gas) were started in the 1950s, but large scale utilization first occurred in 1968. It was then used mainly to improve the production of vertically drilled oil or gas wells. When it was realized that oil and gas inclusions in shale were in many cases horizontal and not vertical, horizontal “fracking” to create oil and gas wells was started in the 1980s but more generally used from 1991 on.

Nonetheless in 2010 still only a negligible amount of oil was produced in the US by fracking. Five years later, in the beginning of 2015, close to 50% of US production was from fracking. To appreciate how much oil is produced in the USA by “fracking” one should consider, that at the beginning of 2015 daily production was somewhat more than the production of two OPEC countries, Kuwait and Algeria, put together.

Polar Pioneer
Big Oil knew about this and could have easily branched into fracking when it was still in its infancy. But Big Oil’s “corporate culture” could not let them to believe that their well established and successful drilling technology could be affected by shale fracking. As Big Oil ignored it a number of small organizations were able to get started.

Shell, for example, ignored fracking for a long time. When they did get in, they were, as Karel Beckman writes in his recent article, “simply unable to survive in this kind of highly competitive market in which small, versatile players set the tone.” Please remember that Kodak also entered the digital camera business belatedly, but had to close it because similarly they could not compete with the many relatively small organizations which had entered that field.

It seems Mr. Tillerson was not informed that since 2000 over $500 billion was invested in solar PV alone

The story of Shell’s “Polar Pioneer”, the oil rig used to start the exploitation of the very large oil resources in the Arctic, will be a famous milestone in the history of Big Oil. Until the end of the summer of 2015, Shell’s management seemed to still believe in Big Oil’s motto: “Damn the cost of drilling and full steam ahead.” They towed the gigantic oil rig to the Chukchi Sea, offshore Alaska, and paid $620,000 per day during the summer drilling season, and $589,000 a day for the rest of the year, to lease the rig.

“Polar Pioneer” started drilling on July 30, 2015. But Shell obviously realized that under the new market circumstances the exploitation of Arctic oil will not be profitable and that this condition may last for a decade or more. On September 27 the company announced that it would pull back from oil exploration in Alaska and started to tow the Polar Pioneer back to Seattle. We can mark this date, September 27, 2015, as the day the twilight of Big Oil’s dominance started.

The question now is will Big Oil find new areas to grow?

At a loss
As Shell demonstrated the “corporate culture” of Big Oil makes it unlikely that it will be able to adapt to the world of “fracking”. Another problem is described in the recent book “The Price of Oil” by R.F. Aguilera and M.Radetzki. The world is headed for an era of oil “superabundance” in which the low price of oil will prevail and oil produced with oil rigs costing $500,000 per day can only be sold at a loss. This would mean not only loss of profit but also lower revenues.

The oil companies could reverse this trend and diversify into the field of renewable energy. But this will be difficult for them to do. I know this from my own experience. As I describe in my recent book, “Sun Above the Horizon”, around 1973 the oil companies got involved in the solar photovoltaic business. There were two reasons for this:

1. The fashionable doomsday reason: oil and gas will run out, solar energy is permanent. Oil companies should get in now (in the 1970s) to invest in the development of the continuation of their oil and gas business.
2. The other reason was that a few leaders of the oil industry correctly envisioned that PV, because of its decentralized nature, would become an independent parallel energy source to oil and gas.
The terrestrial PV industry was started in 1973 but by the end of 1983 the major PV manufacturers in the world were all owned by oil companies: AMOCO’s Solarex Corporation (USA); ARCO’s Arco Solar (USA); Exxon’s Solar Power Corporation (SPC) (USA); BP’s BP Solar International (UK).

The Paris climate agreement makes it clear that the world will not turn back on serious global warming policies

Ultimately all of them got out of the PV business. Why? The major reason is their “corporate culture”. To show the way they are thinking, this is what ExxonMobil CEO Rex Tillerson told investors on May 27, 2015, explaining why the company isn’t investing in renewable energy: “We choose not to lose money on purpose”.

It seems Mr. Tillerson was not informed that since 2000 over $500 billion was invested in solar (PV) alone, including by Warren Buffett’s MidAmerican Energy investment of $2.0 billion to buy the 579 megawatts Antelope Valley Solar Projects in California. Buffet is not known to lose money on purpose

As of losing money by investing in renewables, Mr. Tillerson was also a little bit misinformed. Solar PV manufacturer “First Solar Inc.” recorded sales in 2014 of $3,391,814,000 and made 8.5% profit which is a little more than the 8.1% ExxonMobil made in the same year.

So for Big Oil to get back now to PV is the same as getting into “fracking”.

Not many options
In the days when Big Oils calculated their odds in PV, their only risk was that they would lose their investment, which was not much more than the loss of a single dry hole. But even the minimum investment today for Big Oil is much bigger. Two big oil companies are now in the PV business but both are only minor participants.

Shell with Showa Shell Solar (Japan) was started in 2006, manufacturing the thin film CIGS solar cell/module. The company was renamed Solar Frontier in April 2010. Solar Frontier’s manufacturing capacity will reach over 1 GW in 2015, which is about 3% of today’s PV manufacturing. French Total invested 1.1% of their entire market capitalization to buy 60% of SunPower (a US PV manufacturer). Today, if Occidental Petroleum (OXY) were to buy 60% of SunPower (SPWR), Occidental would have to put up about 5.9% of its entire market capitalization. If OXY were to buy 60% of Solar City (SCTY), it would need to put up 7.2% of its market capitalization.

The Paris climate agreement makes it clear that the world will not turn back on serious global warming policies. There do not seem to be many options left for Big Oil. If they want to avoid the fate of Kodak, they could split up like German utilities Eon and RWE did, and shed their drilling business, in the same way telephone companies did with their land line business. After that in their twilight, they will have to compete in a brave new world.

Note:
Peter F. Varadi Peter F. Varadi is the co-founder in 1973 of SOLAREX Corporation, Rockville, MD (USA), which pioneered the utilization of solar cells (PV) for terrestrial applications. By 1978 it had become the largest PV Company in the world. He recently wrote a history of the early years of the solar industry, Sun Above the Horizon.
© Peter F. Varadi. All rights reserved

It is Time to Take the Next Step on Energy Policy

The following piece was first published on energypost.eu and the text is reprinted here as a new blog post.
……………………..

US desperately needs a national energy policy
September 24, 2015 by Allan Hoffman

The US – and indeed the world – is at a crossroads when it comes to the choice on how we want to provide energy services in the future, writes US energy expert Allan Hoffman. According to Hoffman, the US desperately needs a national energy policy that recognizes the importance of moving to a renewable energy future as quickly as possible. Without such a policy, economic growth, the environment and national security will suffer.

There are two fundamental ‘things’ needed to sustain human life, water and energy. Water is the more precious of the two as reflected in the Arab saying “Water is life.” Without water life as we know it would not exist, and there are no substitutes for water – without it we die.

We also need energy to power our bodies, derived from chemical conversions of the food we consume. We also need energy to enable the external energy services we rely on in daily life – lighting, heating, cooling, transportation, clean water, communications, entertainment, and commercial and industrial activities. Where energy differs from water as a critical element of sustainable development is the fact that energy is available in many different forms for human use – e.g., by combustion of fossil fuels, nuclear power, and various forms of renewable energy.

Critical juncture

Today the U.S., and indeed the world, stands at a critical juncture on how to provide these energy services in the future. Historically, energy has been provided to some extent by human power, by animal power, and the burning of wood to create heat and light. Wind energy was also used for several centuries to power ships and land-based windmills that provided mechanical energy for water-pumping and threshing. With the discovery and development of large energy resources in the form of stored chemical energy in hydrocarbons such as coal, petroleum, and natural gas, the world turned to the combustion of these fuels to release large amounts of thermal energy and eventually electricity with the development of steam power generators. Nuclear power was introduced in the period following World War II as a new source of heat for producing steam and powering electricity generators and ships.

My recommendation is to put a long-term and steadily increasing price on carbon emissions to motivate appropriate private sector decisions to use fewer fossil fuels and more renewable energy and let the markets work

Renewable energy, energy that is derived directly or indirectly from the sun’s energy intercepted by the earth (except for geothermal energy that is derived from radioactive decay in the earth’s core), has been available for a while in the form of hydropower, originally in the form of run-of-the-river water wheels, and since the 20th century in the form of large hydroelectric dams. Other forms of renewable energy have emerged recently as important options for the future, driven by steadily reducing costs, the realization that fossil fuels, while currently available in large quantity but eventually depletable, put carbon dioxide into the atmosphere when combusted, contributing to global warming and associated climate change. Renewable energy technologies, except for biomass conversion or combustion, puts no carbon into the atmosphere, but even in the biomass case it is a no-net-carbon situation since carbon is absorbed in the growing of biomass materials such as wood and other crops.

Support for renewables is also driven by increasing awareness that while nuclear power generation does not put carbon into the atmosphere it does create multigenerational radioactive waste disposal problems, can be expensive, raises low probability but high consequence safety issues, and is a step on the road to proliferation of nuclear weapons capability. Another driver is the now well documented and growing understanding that renewable energy, in its many forms, can provide the bulk of our electrical energy needs, as long disputed by competing energy sources.

Clean future

All these introductory comments are leading to a discussion of the energy policy choice facing our country, and other countries, and my recommendations for that policy. This choice has been avoided by the U.S. Congress in recent years, much to the short-term and long-term detriment of the U.S. We desperately need a national energy policy that recognizes the importance of energy efficiency and moving to a renewable energy future as quickly as possible. That policy should be one that creates the needed environment for investment in renewable technologies and one that will allow the U.S. to be a major economic player in the world’s inevitable march to a clean energy future.

Before getting into policy specifics, let me add just a few more words on renewable energy technologies. Hydropower is well known as the conversion of the kinetic energy of moving water into electrical energy via turbine generators. Solar energy is the direct conversion of solar radiation directly into electricity via photovoltaic (solar) cells or the use of focused/concentrated solar energy to produce heat and then steam and electricity. Wind energy, an indirect form of solar energy due to uneven heating of the earth’s surface, converts the kinetic energy of the wind into mechanical energy and electricity. Geothermal energy uses the heat of the earth to heat water into steam and electricity, or to heat homes and other spaces directly. Biomass energy uses the chemical energy captured in growing organic material either directly via combustion or in conversion to other fuel sources such as biofuels. Ocean energy uses the kinetic energy in waves and ocean currents, and the thermal energy in heated ocean areas, to create other sources of mechanical and electrical energy. All in all, a rich menu of energy options that we are finally exploring in depth.

Controversial

Energy policy is a complicated and controversial field, reflecting many different national, global, and vested interests. Today’s world is largely powered by fossil fuels and is likely to be so powered for several decades into the future until renewable energy is brought more fully into the mainstream. Unnfortunately this takes time as history teaches, and the needs of developing and developed nations (e.g., in transportation) need to be addressed during the period in which the transition takes place.

The critical need is to move through this transition as quickly as possible. Without clear national energy policies that recognize the need to move away from a fossil fuel-based energy system, and to a low-carbon clean energy future, as quickly as possible, this inevitable transition will be stretched out unnecessarily, with adverse environmental, job-creation, and other economic and national security impacts.

My recommendation is to put a long-term and steadily increasing price on carbon emissions to motivate appropriate private sector decisions to use fewer fossil fuels and more renewable energy and let the markets work. Nuclear power, another low-carbon technology, remains an option as long as the problems listed earlier can be addressed adequately. My personal view is that renewables are a much better answer.

The revenues generated by such a ‘tax’ can be used to reduce social inequities introduced by such a tax, lower other taxes, and enable investments consistent with long-term national needs. In the U.S. it also provides a means for cooperation between Republicans and Democrats, something we have not seen for several decades. It is clear that President Obama ‘gets it’. It is now more than time for U.S. legislators to get it as well.

Editor’s Note (Karel Beckman, energypost.eu)

Allan Hoffman, former Senior Analyst in the Office of Energy Efficiency and Renewable Energy at the U.S. Department of Energy (DOE), writes a regular blog: Thoughts of a Lapsed Physicist.

On Energy Post, we regularly publish posts from Allan’s blog,in his blog section Policy & Technology. His writings often deal with issues at the intersection of energy technology, policy and markets. Allan, who holds a Ph.D. in physics from Brown University, served as Staff Scientist with the U.S. Senate Committee on Commerce, Science, and Transportation, and in a variety of senior management positions at the U.S. National Academies of Sciences and the DOE. He is a Fellow of the American Physical Society and the American Association for the Advancement of Science.

Documenting the 1970s – Part 1 of 2

A theme that has emerged in some of my recent blog posts is that many useful thoughts on renewable energy policy were formulated in the late 1970s, but that the U.S. was slow to pick up on the opportunities (e.g., see ‘A Personal View’). In the course of reviewing materials long-stored in my basement files I have found quite a few documents that were published at that time that support this theme, and I will use this blog to make sure that some of them are easily available.

The first of two documents I will post is the June 20, 1979 message sent by President Carter to the U.S. Congress that outlined “..the major elements of a national solar strategy.” It was based on the DPR (Domestic Policy Review of Solar Energy) that had been delivered to the President six months earlier. It shows that President Carter understood the importance of committing “..to a society based largely on renewable sources of energy” way back when. He deserves great credit for this foresight, which unfortunately was not shared by his successor in the White House.

image

The attached document is quite long, for which I apologize, but well worth reading. It demonstrates that U.S. thinking about energy was quite advanced more than three decades ago, and that it is only in recent years, under President Obama, that we have started to seriously implement those long-ago ideas and proposed policies. It is a shame and national disgrace that it has taken so long to do this, and dispiriting to comprehend what could have been accomplished but wasn’t. However, as we say, better late than never.

Further early discussion of these ideas will be presented in the follow-up post ‘Documenting the 1970s – Part 2 of 2′.

……………………………………,,,,,

FOR IMMEDIATE RELEASE

June 20, 1979

Office of the White House Press Secretary
THE WHITE HOUSE
TO THE CONGRESS OF THE UNITED STATES:
On Sun Day, May 3, 1978 we began a national mobilization in our country toward the time when our major source~ of
energy will be derived from the sun. On that day, I committed our Nation and our government to developing an aggressive
policy to harness solar and renewable sources of energy. I ordered a major government-wide review to determine how
best to marshal the tools of the government to hasten the day when solar and renewable sources of energy become our
primary energy resources. As a result of that study, we are now able to set an ambitious goal for the use of solar energy
and to make a long term commitment to a society based largely on renewable sources of energy. In this Message I will outline
the major elements of a national solar strategy. It relies not only on the Federal government, both Executive and Congress,
but also on State and local governments, and on private industry, entrepreneurs, and inventors who have already given us significant progress in the availability of solar technologies. Ultimately, this strategy depends on the strength of the American people’s commitment to finding and using substitutes for our diminishing supplies of traditional fossil fuels.

Events of the last year — the more than 30% increase in the price of oil we import and the supply shortage caused
by the interruption of oil production in Iran — have made the task of developing a national solar strategy all the more
urgent, and all the more imperative. More than ever before, we can see clearly the dangers of continued excessive reliance on oil for our long-term future security. Our energy problem demands that we act forcefully to diversify our energy supplies, to make maximum use of the resources we have, and to develop alternatives to conventional fuels. Past governmental policies to control the prices of oil and natural gas at levels below their real market value have impeded development and use of solar and renewable resource alternatives. Both price controls and direct subsidies that the government has provided to various existing energy technologies have made it much more difficult for solar and renewable resource technologies to compete. In April of this year I announced my decision to begin the process of decontrolling domestic oil prices. Last November, I signed into law the Natural Gas Policy Act which
will bring the price of that premium fuel to its true market level over the next five years. Together, these steps will
provide much-needed incentives to encourage maximum exploration and production of our domestic resources. They provide
strong incentives to curb waste of our precious energy resources. Equally important, these steps will help solar and renewable resource technologies compete as the prices of oil and natural gas begin to reflect their real market value.
Consumers will see more clearly the benerits of investing in energy systems for which fuel costs will not escalate each year. Industry can plan and invest with more certainty, knowing the market terms under which their products will compete.

We must further strengthen America’s commitment to conservation. We must learn to use energy more effiCiently and productively in our homes, our transportation systems and our industries. Sound conservation practices go hand in hand with a strong solar and renewable resource policy. For example, a well-designed and well-insulated home is better able to make use of solar power effectively than one which is energy inefficient. We must also find better ways to burn and use coal — a fossil fuel which we have in abundance. Coal must and will be a key part of a successful transition away from oil. We must and will do more to utilize that resource. Solar energy and an increased use of coal will help in the near and mid-term to accelerate our transition away from crude oil.

But it is clear that in the years ahead we must increasingly rely on those sources of power which are renewable. The
transition to widespread use of solar energy has already begun. Our task is to speed it along. True energy security —
in both price and supply — can come only from the development of solar and renewable technologies. In addition to fundamental
security, solar and renewable sources of energy provide numerous social and environmental benefits. Energy from the sun is clean and safe. It will not pollute the air we breathe or the water we drink. It does not run the risk of an accident which may threaten the health or life of our citizens. There are no toxic wastes to cause disposal problems. Increased use of solar and renewable sources of energy is an important hedge against inflation in the long run. Unlike the costs of depletable resources, which rise exponentially as reserves are consumed, the cost of power from the sun will go down as we develop better and cheaper ways of applying it to everyday
needs. For everyone in our society — especially our low-income or fixed-income families — solar energy provides an important way to avoid rising fuel costs. No foreign cartel can set the price of sun power; no one can embargo it. Every solar collector in this country, every investment in using wind or biomass energy, every advance in making electricity directly from the sun decreases our reliance on uncertain sources of imported oil, bolsters our international trade position, and enhances the security of our Nation.

Solar energy can put hundreds of thousands of Americans to work. Because solar applications tend to be dispersed and decentralized, jobs created will be spread fairly evenly around the Nation. Job potentials span the ranges of our employment spectrum, from relatively unskilled labor to advanced engineers, from plumbers and metal workers to architects and contractors, from scientists and inventors to factory workers, from the small businessman to the large industrialist. Every investment in solar and renewable energy systems keeps American dollars working for us here at home, creating new jobs and opportunities, rather than sending precious funds to a foreign cartel.

Increased reliance on solar and renewable technologies can also increase the amount of control each one of us as individuals and each of our local communities has over our energy supplies. Instead of relying on large, centralized energy installations, many solar and renewable technologies are smaller and manageable by the homeowner, the farmer, or the individual factory or plant. By their very nature, renewable technologies are less likely to engage the kind of tension and conflict we have seen in other energy areas, such as the problems
posed by siting a very large energy facility, or trading off between surface uses of land and development of the energy minerals that might lie below that land.

Finally, solar and renewable technologies provide great international opportunities, both in foreign trade, and in the ability to work with developing nations to permit them to harness their own, indigenous resources rather than become dependent on fuels imported from other nations.
It is a mistake to think of solar energy as exotic or unconventional. Much of the technology for applying the sun’s power to everyday tasks has been in use for hundreds of years. There were windmills on our great plains long before there were high tension wires. There were factories in New England using waterpower long before the internal combustion engine was invented. In Florida, before World War II, there were more than 60,000 homes and buildings using solar hot water heaters. The Native Americans who built the great cliff dwellings of the West understood and applied solar heating principles that we have neglected in recent years, but which are available for us to use today.

These traditional and benign sources of energy fell into disuse because of a brief glut of cheap crude oil. These years are over. That inescapable fact is not a cause for despondency or a threat to our standard of living. On the contrary, it presents us with an opportunity to improve the quality of our lives, add dynamism to our economy and clean up our environment. We can meet this challenge by applying the time-tested technologies of solar power, and by developing and deploying new devices to harness the rays of the sun.

The government-wide survey I commissioned concluded that many solar technologies are available and economical today. These are here and now technologies ready for use in our homes, schools, factories, and farms. Solar hot water heating is competitive economically today against electric power in virtually every region of the country. Application of passive design principles that take into account energy efficiency
and make maximum use of the direct power of the sun in the intrinsic design of the structure is both good economics and good common sense.

Burning of wood, some uses of biomass for electricity generation, and low head hydropower have repeatedly been shown to be cost competitive.

Numerous other solar and renewable resources applications are close to economic competitiveness, among them solar space heating, solar industrial process heat, wind-generated electricity, many biomass conversion systems, and some photovoltaic applications. We have a great potential and a great opportunity to expand dramatically the contribution of solar energy between now and the end of this century. I am today establishing for our country an ambitious and very important goal for solar and renewable sources of energy. It is a challenge to our country and to our ingenuity. We should commit ourselves to a national goal of meeting one fifth – 20% – of our energy needs with solar and renewable resources by the end of this century. This goal sets a high standard against which we can collectively measure our progress
in reducing our dependence on oil imports and securing our country’s energy future. It will require that all of us examine carefully the potential solar and renewable technologies hold for our country and invest in these systems wherever we can.

In setting this goal, we must all recognize that the Federal government cannot achieve it alone. Nor is the Federal budget the only tool that should be considered in determining the courses we set to reach this goal. The extent to which solar and renewable technologies become more competitive will depend upon the cost of existing sources of energy, especially oil and natural gas. The degree to which existing solar technologies achieve widespread use in the near term will be as much if not more a function of the commitment on the part of energy users in this country to consider these technologies as it will be a function of the incentives the government is able to provide.

State and local governments must make an all-out effort to promote the use of solar and renewable resources if the
barriers now found at those levels are to be overcome. Zoning ordinances, laws governing access to the sun, housing codes,
and state public utility commission policies are not Federal responsibilities. Although the Federal government should
provide leadership, whether or not these tools are used to hinder or to help solar and renewable energy use Ultimately
depends upon decisions by each city, county and state. The potential for success in each of these areas is great; the
responsibility is likewise. I call on our Governors, our Mayors, and our county officials to join with me in helping
to make our goal a reality.

American industry must also be willing to make investments of its own if we are to reach our solar goal. We are setting
a goal for which industry can plan. We are providing strong and certain incentives that it can count on. Industry, in
turn, must accelerate and expand its research, development, demonstration, and promotional activities. The manufacturing,
construction, financing, marketing, and service skills of American business and labor are essential. Banks and financial
institutions will need to examine and strengthen their lending policies to assure that solar technologies are offered a fair
chance in the marketplace. Universities and the academic community must mobilize to find ways of bringing those solar
and renewable technologies that are still not ready for commercial introduction closer to the marketplace. Small
businesses and family farmers also have opportunities for significant use of solar and renewable resources. They, too,
must join in this effort.

Finally, each one of us in our daily lives needs to examine our own uses of energy and to learn how we can make solar
and renewable resources meet our own needs. What kind of house we buy, or whether we are willing to work in our own communities to accelerate the use of solar energy, will be essential in determining whether we reach our goal.

The Federal government also has a responsibility in providing incentives, information, and the impetus for meeting our 20%
solar goal by the year 2000. Almost every agency of the Federal government has responsibilities which touch in one way or another on solar energy. Government agencies helped finance over one million U.S. homes in 1978. By their lending policies and their willingness to assist solar investments, these agencies have significant leverage. The Tennessee Valley Authority is the Nation’s largest utility and producer of power. It has a far-reaching opportunity to become a solar showcase — to set an example for all utilities, whether public or privately owned, of how to accelerate the use of solar technologies. The Department of Defense (DOD) is a major consumer of energy and a major provider of housing. A multitude of opportunities exist for DOD to demonstrate the use of solar.

The Agency for International Development (AID) works full time in helping other countries to meet their essential needs, including energy. Solar and renewable resources hold significant potential for these countries and, through AID, we can assist in promoting the worldwide application
of these technologies.

The Department of Energy has a particularly significant responsibility in aiding the development and encouraging the use of solar energy technologies, in providing back-up information and training for users of solar, and, generally, in directing our government-funded research and development program to ensure that future solar and renewable technologies are given the resources and institutional support that they need.

As a government-wide study, the Domestic Policy Review of Solar Energy has provided a unique opportunity to draw together the disparate functions of government and determine how best to marshal all of the government’s tools to accelerate the use of solar and renewable resources. As a result of that study, the set of programs and funding recommendations that I have already made and am adding to today will provide more than $1 billion for solar energy in FY 1980, with a sustained Federal commitment to solar energy in the years beyond. The FY 1980 budget will be the highest ever recommended by any President for solar energy. It is a significant milestone for our country. This $1 billion of Federal expenditures — divided between incentives for current use of solar and renewable resources such as tax credits, loans and grants, support activities to develop standards, model building codes, and information programs, and longer term research and development — launches our Nation well on the way toward our solar goal. It is a commitment we will sustain in the years ahead.

I am today proposing the establishment of a national Solar Bank as a government corporation to be located within the Department of Housing and Urban Development (HUD). It will provide a major impetus toward use of today’s solar technologies by increasing the availability of financing at reasonable terms for solar investments in residential and commercial buildings. The Solar Bank will be funded at $100 million annually out of the Energy Security Trust Fund from revenues generated by the windfall profits tax. The Bank will be authorized to provide interest subsidies for home improvement loans and mortgages for residential and commercial buildings. It will pay up front subsidies to banks and other lending institutions Which, in turn, will offer loans and mortgages for solar investments at interest rates below the prevailing market rate. Ceilings on the amount of the loan or portion of a loan which can be subsidized will be set.

The Solar Bank will be governed by a Board of Directors including the Secretary of HUD, the Secretary of Energy, and the Secretary of the Treasury. The Board of Directors will be empowered to set the specific level of interest subsidy at rates which will best serve the purposes of accelerating the use of solar systems in residential and commercial buildings. Standards of eligibility for systems receiving Solar Bank
assistance will be set by the Secretary of HUD in consultation with the Secretary of Energy. The Solar Bank I have proposed is similar in many respects to that introduced by Congressman Stephen Neal of North Carolina. A companion bill has been introduced in the Senate by Senator Robert Morgan of North Carolina. To them. and to the co-sponsors of this legislation, we owe our gratitude for the hard work and sound conceptual thinking that has-been done on how a Solar Bank should be designed. The Solar Bank will complement the residential and commercial tax credits that I originally proposed in April 1977 and that were signed into law with the National Energy Act last November.

To provide full and effective coverage for all solar and renewable resource technologies which can be used in residential and commercial buildings, I have recently proposed two additional tax credits, to be funded out of the Energy Security Trust Fund. I am directing the Department of the Treasury to send to the Congress legislation which will provide a 20% tax credit up to a total of $2,000 for passive
solar systems in new homes. Credits will also be proposed for passive solar in commercial buildings. Passive solar applications are competitive today, but we need to provide incentives to owners, builders, architects, and contractors to ensure early and widespread use.

I am also directing the Treasury to prepare and transmit
legislation to provide a tax credit for purchasers of airtight
woodburning stoves for use in principal residences. This
credit would equal 15% of the cost of the stove, and will
be available through December 1982. There is a great potential
to expand significantly the use of wood for home heating. It
can help lower residential fuel bills, particularly as oil
and natural gas prices increase.

With these levels of assistance, hot water heating can
be made fully competitive with electricity. In many instances,
complete passive solar home designs, including solar heating
and cooling, will be economically attractive alternatives.

A strong Federal program to provide accurate and up-to-
date solar information to homeowners, builders, architects
and contractors will be coupled with these financial incentives. The Department of Energy has established a National Solar User Information Program to collect, evaluate and publish
information on the performance of solar systems throughout
the country. Expanding the government’s information dissemina-
tion systems through seminars, technical journals, state energy
offices, and the Solar Energy Research Institute will be a
major thrust of DOE’s program in 1980. The four Regional
Solar Energy Centers will become fully operational in 1980,
providing information to the general public and to groups
such as builders, contractors, and architects who will play
key roles in the acceleration of solar technologies.
To be fully effective, however, these incentives must
be combined with a determined effort by the architects,
engineers, and builders who design and construct our homes
and offices, schools, hotels, restaurants, and other buildings
we live and work in. I am calling upon thE deans of our
schools of architecture and engineering to do their part by
making the teaching of solar energy principles an essential
part or their curricula. The young men and women being
trained today must learn to regard the solar energy and overall
energy efficiency of the buildings they design as no less
important than their structural integrity. I call as well
on America’s builders to build and market homes which offer
the buyer freedom from escalating utility bills.

In the end, it will be consumers of this country who
will make the purchasing decisions that will dictate the
future of this industry_ They must have confidence in
the industry and in the products which it produces before
they will be willing to make necessary investments. To
this end. both industry and government must be ever vigilant
to assure that consumers are well protected from fraud and
abuse.
* * * * *
Significant opportunities for use of existing solar
technologies are also available in the agricultural and
industrial sectors of our economy. Industrial process heat
can be generated using solar technologies. Critical agricultural activities — fueling tractors, running irriga:ion pumps and drying crops — provide numerous opportunities for the use
of solar and other renewable resources. Biomass, gasohol, wind energy, low head hydro, and various direct solar technologies hold significant promise in the agricultural and industrial sectors. I will soon be
forwarding legislation to the Congress which will:
Provide a 25 investment tax credit for agricultural and industrial process heat uses of solar energy. This is a 15% addition to the existing investment tax credit and it will remain available through 1989. This responds directly
to the concern expressed in the Domestic Policy
Review that the tax credit currently provided in
the National Eoergy Act is set at too low a level
and expires too early to provide needed incentives.
These uses now account for about 25% of our energy
demand. Substitution of solar and it her renewable
resources for a portion of this energy would
significantly reduce our dependence on foreign oil.
Permanently exempt gasohol from the Federal gasoline
excise tax. More and more Americans are learning
that a gasohol blend of 90 gasoline and 10 alcohol
which is made from various agricultural products
or wastes — is an efficient octane-boosting fuel
for automobiles and other gasoline engines.
The existing tax incentives of the National Energy Act
will continue to stimulate the uses of these teohnologies
in the industrial and agricultural sectors.
The Department of Agriculture will have a significant
responsibility for informing farmers and other agricultural
users of energy about how solar and other renewable sources
can begin to help meet their needs. The Farmers Home Adminis-
tration and other agencies within the Agriculture Department
will continue to provide financial and technical assistance
to farmers in using solar and other renewable technologies.
The TVA is demonstrating what can be done by utilities
in helping private industries, farmers, and residential
customers apply existing solar technologies. The goal of
the TVA’s “Solar Memphis” program is to install 1,000 solar
water heaters this year by offering long-term, low-interest
loans, by inspecting solar installations, and by backing
manufacturers’ warranties. In addition, the TVA’s 1.75 million
square foot passive solar office complex in Chattanooga, Tennessee will be designed to be completely energy self-sufficient and will be a model for the nation in the use of renewable technologies in office buildings.

The Small Business Administration is now operating a
solar loan program for small manufacturers and purchasers
of solar technologies. Next year, the SBA aims to triple
the amount of funds available to small businesses under this
program over the amount originally appropriated. We will
also marshal the efforts of agencies such as the Economic
Development Administration to include solar and other renewable
resources within their assistance programs.
These activities, along with the basic information
dissemination programs of the Department of Energy, will help
increase the use of solar and other renewable resource technologies in residential, commercial, agricultural, and industrial buildings.

Finally, we will strive to increase use of solar energy
by the Federal government itself. An estimated 350 solar
systems will be placed in government facilities and buildings
over the next fifteen months. Energy audits of all large
federal buildings will be completed in 1979. DOE will con-
tinue to develop guidelines which take into account the
lifetime energy costs of various systems. The Department
of Defense, which accounts for about 72% of all government-
owned buildings, 1s playing a major role in the federal solar
buildings program. To date, DOD has over 100 solar projects
in various stages of completion, ranging in size from solar
hot water heaters in residences to solar heating and air
conditioning of Naval, Air Force and Army base facilities.
When all of the presently planned solar projeots are complete,
DOD estimates that they will be providing more than 20 billion
Btu’s of energy. The Federal government must set an example,
and I call upon the states to do likewise.
* * * *
The Domestic Policy Review recommended several important
changes in the direction and nature of the Federal research
and development program for future solar and renewable resource
technologies. It found that solar demonstration programs
for active hot water systems and high-cost centralized solar
electric technologies had been overemphasized at the expense
of those systems which hold wider potential to displace the
use of oil and natural gas.

As a result of the Domestic Policy Review, the FY 1980
budget for DOE’s research and development program for solar
and renewable energy sources was redirected toward technologies
such as photovoltaics, biomass, wind energy, and systems for
generation of process heat. To respond to these new priorities,
over $130 million in increased funding was provided in the
R&D program, an increase of 40% over FY 1979 levels.

While solar heating and cooling units are already being
used to meet the energy requirements of buildings throughout
the country, the DOE is supporting continued advances in these
products, by providing funds to industry, small business,
Federal laboratories, and the research community to reduce
the cost of solar systems and to improve performance. Improved
system design, analysis, and system-integration activities
are being carried out for active heating and cooling systems,
passive systems, and agricultural and industrial process
heating systems. The program also supports product improve-
ments for such key components as solar collectors, energy
storage units, and controls.
Photovoltaics, which permit the direct conversion of
sunlight into electriCity, hold significant promise as a solar
technology for the future. Research and development efforts
are directed at reducing the cost of photovoltaic systems.
In addition, new systems which produce hydrogen through
an electrochemical reaction can be used to produce electricity.
There is no question about our technical ability to use photo-
voltaics to generate electricity. These systems are already
used extensively to meet remote energy needs in our space
program. The main issue now is how to reduce the costs of
photovoltaics for grid-related applications such as providing
electricity to residential buildings over the next five to
ten years. The photovoltaic program involves all aspects
of research and development, from hardware components to
materials, marketing and distribution systems. The Federal
government has already made commitments to purchase $30 million
of photovoltaic systems at a specified cost per watt as a
means of stimulating private efforts to reduce the cost of
this technology.

DOE’s research and development program has also emphasized
wind energy. Our objective is the development of wind systems
which will compete cost-effectively with conventional technologies. There will also be efforts to develop wind technologies for small units suitable for farm and rural use and for large utility units.

Biomass conversion holds significant promise as a major
source of renewable energy over the coming decades. Liquid
and gaseous fuels produced from organic wastes and crops can
displace oil and natural gas both as direct combustion fuels
and as chemical feedstocks. Some biomass fuels, such as gasohol, are in use today. Others, such as liquid fuels from organic wastes, require additional research and development.

In the coming fiscal year, DOE will complete construction
of the solar power tower in Barstow, California. Such systems
could potentially displace some oil- and gas-fired generators.
The DOE solar thermal program is also concentrating on reducing
to near commercial levels the costs of distributed receiver
systems by 1983 and similarly reducing the future costs of
central receiver systems. This program supports R&D efforts
in advanced space heating and cooling, photovoltaic concen-
tration, and high temperature industrial heat applications.

The oceans are another potential source of solar energy.
We will pursue research and development efforts directed toward
ocean thermal energy conversion, and other concepts such as
the use of salinity gradients, waves, and ocean currents.
DOE is working with the National Aeronautics and Space
Administration to evaluate the concept of a solar power
satellite system (SPS) which would capture solar energy in
space for transmission to earth. A determination will be
made in January 1981 on whether this system should proceed
to the exploratory research stage.

DOE will undertake intensified efforts involving solar
energy storage and basic solar energy research. In the basic
research area, emphasis is being placed on the development
of new materials to better use or convert the sun’s energy,
solar photochemistry (including the possibility of using
electrochemical cells to convert the energy of sunlight into
electricity and/or fuels) and research on artificial photo-
synthesis.

In Fiscal Year 1980 we will begin building a new 300-acre solar research facility for the Solar Energy Research Institute at Golden, Colorado. This institute, along with
four regional solar centers established across the country,
will help provide a focus for research and development
activities and will become information centers for individuals
and firms who market or install solar equipment.

In addition to DOE’s research and development activities,
several other agencies will continue to support commercial
introduction of solar technologies as they become available.
AID, TVA and the Department of Agriculture now have and will
continue to have significant responsibilities in the demon-
stration of new solar and renewable resource systems.

The Domestic Policy Review identified numerous specific
program suggestions, many of which I believe can and should
be implemented. Over the course of the coming weeks, I will
be issuing a series of detailed directives to the appropriate
agencies to implement or consider recommendations in
accordance with my instrUctions.

Some of these suggestions involve detailed budget issues
which should be taken up in our normal budget planning
process. In order to provide much-needed flexibility to DOE
to respond to these — and other — suggestions, I am directing
the Office of Management and Budget to provide an additional
$100 million to DOE for use on solar programs beyond that
which had previously been identified for the FY 1981 base
program.

…………..

An essential element of a successful national solar
strategy must be a clear central means of coordinating the
many programs administered by the numerous agencies of
government which have a role in accelerating the development
and use of these energy sources. I am today directing that
the Secretary of Energy establish a permanent, standing
Subcommittee of the Energy Coordinating Committee (ECC) to
monitor and direct the implementation of our national solar
program. The ECC membership includes the major agencies
which have responsibilities for solar and renewable resource
use. By using this existing mechanism, but strengthening
its focus on solar and renewable activities, we can provide
an immediate and direct means to coordinate the Federal solar
effort. The Subcommittee will report on a regular basis to
the ECC, and through it directly to me, on the progress of
our many and varied solar activities. The Subcommittee will
be able to identify quickly any problems that arise and the
ECC will provide a forum to resolve them. Since the member-
ship of the ECC includes key agencies of the Executive Office
of the President, especially the Office of Management and
Budget, the Special Assistant to the President for Consumer
Affairs, the Council on Environmental Quality, and the
Domestic Policy Staff, direct and easy access to my staff
and Members of the Cabinet is assured.

The Standing Subcommittee of the ECC has an extremely
important responsibility. I am expecting it to provide
the leadership and the day-to-day coordinating function
which will be essential as we strive to meet our national
solar goal.
…………

We are today taking an historic step. We are making a
commitment to as important a goal as we can set for our
Nation — the provision of 20% of our energy needs from solar
and renewable sources of energy by the year 2000.

We are launching a major program — one which requires
and has received a significant commitment from the Federal
government to accelerate the development and use of solar
technologies.

We are marshalling the best that the agencies of government
can provide and asking for the commitment of each of them,
in their diverse and numerous functions, to assist our country
in meeting our solar goal.

The stakes for which we are playing are very high. When
we speak of energy security, we are in fact talking-about
how we can assure the future economic and military security
of our country — how we can maintain the liberties and freedoms which make our Nation great.

In developing and implementing a national solar strategy
we are taking yet another critical step toward a future which
will not be plagued by the kinds of energy problems we are
now experiencing, and which will increase the prospects of
avoiding worse difficulties.

We have set a challenge for ourselves. I have set a
challenge for my Presidency. It will require the best that
American ingenuity can offer, and all the determination which
our society can muster. Although government will lead, inspire,
and encourage, our goal can be achieved only if each American
citizen, each business, and each community takes our solar
goal to heart.

Whether our energy future will be bright — with the
power of the sun — or whether it will be dim, as our fossil
resources decline, is the choice that is now before us. We
must take the path I have outlined today.~
JIMMY CARTER
THE WHITE HOUSE,
June 20, 1979.

Ocean-based Energy: What Is Its Potential? (Part 1 of 2)

    Ocean energy comes in four distinct types (five if you include offshore wind energy – see earlier blog on this topic): wave energy, ocean current energy, tidal energy, and OTEC (ocean thermal energy conversion). Together they represent a major new energy source for the world and all have been shown to work. The major problems are reliability and cost and all are in early stages of development.

    Given the potential length of this blog, and my goal to keep each blog easily readable, I have decided to break up the ocean energy blog into two parts, the first on wave energy (Part 1), to be published today, and the second on the three other listed ocean energy technologies: ocean current energy, tidal energy, and OTEC (Part 2), to be published in a few days.

    Part 1: Wave Energy
    Wave energy is the most advanced, with a large and growing literature and several operating demonstration sites. Wikipedia defines ‘wave energy’ as “…the transport of energy by ocean surface waves, and the capture of that energy to do useful work – for example, electricity generation, water desalination, or the pumping of water (into reservoirs).” Wikipedia further explains that “Waves are generated by wind passing over the surface of the sea. As long as the waves propagate slower than the wind speed just above the waves, there is an energy transfer from the wind to the waves.”

    image

    It is interesting to note that since wind energy is an indirect form of solar energy (winds are generated by uneven heating of the earth’s surface by solar radiation) then so is wave energy. Waves are irregular, varying in frequency and height, and successful wave power conversion systems will tap as much as possible of the kinetic energy in the up and down motion of waves to generate electricity or mechanical power. R&D efforts, of which there are now many with a major testing/demonstration site off the coast of Scotland, are focused on doing this energy capture at the lowest possible cost. Many different designs are being created and tested.

    M limageimage

    What is wave energy’s potential? The answer is huge – the kinetic energy in wave motion is a big number. Specifically, the Ocean Energy Council states that “An average 4-foot, 10-second wave striking a coast puts out more than 35,000 horsepower per mile of coast.” Another estimate (Wikipedia) is that “In major storms, the largest waves offshore are about 15 meters high and have a period of about 15 seconds, …such waves carry about 1.7 MW of power across each metre of wavefront.” The global potential is estimated to be more than 2 terrawatts (TW) – current global generating capacity is a bit more than 5 TW.
    Wave energy also offer several advantages over other renewable energy technologies: it is produced 24/7, is more steady in output than wind or solar (i.e., higher capacity factors), has lower infrastructure costs (requires no access roads ), and is less obtrusive visually than offshore or land-based wind turbines. Of course wave energy still requires cabling to deliver power to shore and incurs all the difficulties of operating reliably in a marine environment. The next decade should see considerable progress in developing this technology and realizing its potential. Please stay tuned!