Welcome to the age of diminishing returns

Sunday, October 30, 2011

The Future of Energy and the Interconnected Challenges of the 21st Century

Guest post by Francois Cellier


Francois Cellier is senior researcher at the ETH in Zurich, Switzerland. He is known for many contributions in the field of modelling and perhaps the readers of this blog know him for his work with "The Oil Drum". Cellier was present at the meeting on Energy of the Club of Rome in Basel on which I reported earlier on "Cassandra's Legacy". Here, he presents a more detailed report. As a personal comment on this post, I note that Francois may appear very pessimistic when, at the end of his post, he ask the question "Are we merely a club of old men (and a few women) crying on each other's shoulders?" I think Francois' intention is not to imply that it was a meeting of old men as, instead, there were several young people attending and giving contributions. The point is, I think, is that we must never feel too old to believe that we can make a difference! 


The Future of Energy and the Interconnected Challenges of the 21st Century

François E. Cellier
Department of Computer Science
ETH Zurich
CH-8092 Zurich
Switzerland

Email: FCellier@Inf.ETHZ.CH
URL: http://www.inf.ethz.ch/~fcellier/



The Club of Rome, in collaboration with the Dept. of Environment and Energy of the City of Basel, Switzerland, recently convened a two-day international conference entitled The Future of Energy and the Interconnected Challenges of the 21st Century. The meeting was held October 17 and 18, 2011, at the Hôtel des Trois Rois in Basel. The conference -by invitation only- brought together a group of about 30 scientists from around the globe to discuss issues relating to resource depletion (Peak Oil) and climate change. Also present was a delegation of the Basel City government including the mayor and the minister for energy as well as several members of parliament.

This report summarizes some of the outcomes of our discussions.

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In Basel, the Club of Rome was given a warm welcome. Basel is by far the most environmentally conscious city of Switzerland. To illustrate my point: Basel reduced its per capita energy consumption between 1991 and 2010 from 5.4 kW to 4.0 kW, a reduction by a whopping 26%. This is a highly impressive figure. The average energy consumption in Switzerland is currently at 5.4 kW, down from 5.5 kW 10 years ago.

Basel has both topographic and political advantages over other cities and regions in the country. On the one hand, Basel-City is the smallest of our Cantons. It essentially consists of the city only. Thus, population density is very high, and public transportation systems are excellent.

While the average number of cars per 1000 inhabitants in the country currently lies at 514 cars, there are only 320 cars per 1000 inhabitants in Basel. Most of the houses in the inner city were built long before the advent of cars, and consequently, they rarely come with garages. There are a good number of public parking garages in the city center, but they are expensive and time-limited, and the residents usually have no parking lots anywhere close to their homes. Thus, in many cases, owning a car in Basel creates more of a problem than being of benefit. About 60% of the workforce comes to work by public transport, and only 30% come to work using private cars. The remaining 10% either walk, or ride to work by bike. Real estate is very expensive due to the limited space available, and therefore, there are few gas stations in the city. Car owners usually fill their vehicles outside the city limits, and as a result, their fuel consumption is not counted in the energy statistics of the city, which to some extent, distorts the picture.

In addition, Basel has political advantages. As in most high-income countries in the Western world, our city governments tend to be a bit more progressive, a bit more energy- and environmentally conscious than municipalities in the countryside. This is true for throughout Switzerland. In contrast to Basel, however, which is a city-state, other metropolitan areas are surrounded by a hinterland that is often more conservative and exerts considerable influence on the city and cantonal politics. The Basel-city government is able to pass any local legislation that suits them without facing opposition. The more conservative neighboring Basel-Countryside is a separate Canton and has no say on city regulations.

Yet, while these advantages may explain the lower energy consumption in Basel as compared to the Swiss average, they fail to explain the rapid decrease in energy consumption over the past 20 years. To this end, a number of different incentive schemes have been introduced step-by-step.

  1. At present, most homes in Switzerland continue to be heated by oil, while Basel is actively promoting the connection of private homes to a centralized district heating network. Centralized district heating is much more efficient than individual oil heating, because much of the heat used by the district heating network is waste heat from the waste incineration plant and other industrial plants in the region, which essentially is available for free. Any additional heat that needs to be generated by burning fuel is produced with higher efficiency, because industrial oil burners can be operated cost-effectively at higher temperatures than single-dwelling oil burners. In Basel, the percentage of central oil heating systems in private homes has decreased significantly, and the electrical resistance heaters advocated in some areas of Switzerland no longer exist at all.
  2. Then there was introduced an "energy levy" of some 5% that is being used for energy modernization programs and for upgrading older, less energy-efficient buildings, for subsidies of solar thermal installations, and generally for subsidies of investments in renewable energy systems of all kinds.
  3. In addition, inhabitants of Basel pay an additional 5 Cents incentive tax per kWh of consumed electricity. This tax is reimbursed to all households and companies in the city as a lump-sum payment of CHF 75 per year and is also being used to reduce payroll taxes of companies located in the City-State.
  4. Finally, Basel was the first city in Switzerland to introduce cost-covering feed-in tariffs for solar. These stipulate that the public electricity company must buy all electricity generated by photovoltaic systems and CHP (combined heat and power) plants at a standardized cost of production. Home owners offer their roofs to the local electricity company and to private investors, such as solar co-operatives, virtually for free. At the current time, the costs for this arrangement remain slightly above the market price for conventionally generated electricity. The electricity company is allowed to pass on the incurred costs to its customer base, leading to an increase in price of approximately 0.4 Cents per kWh. At present, Basel has already more than 3 MW of installed photovoltaic power. The Basel feed-in tariff model is expected to be adopted shortly throughout Switzerland. Similar legislation is in place in Germany and has, in past years, led to a veritable explosion in installed photovoltaic power.

The price of photovoltaic systems is dropping rapidly. One kg of silicon for a photovoltaic system cost as much as $500 on the spot market in 2008. The price has meanwhile dropped to $40 and may soon be as low as $5-10. This decrease is caused less by cheaper raw materials than by increasing efficiency in the production of crystalline silicon. Modern fluidized-bed reactors are considerably more energy-efficient than the previously used Siemens process, and as a result, the EROEI of photovoltaic systems is improving. Grid parity may be reached by 2012.

If you are interested in reading the exposé by Basel parliamentarian Rudolf Rechsteiner on these and related topics, you can find it here.

The Swiss National Parliament recently passed legislation pertaining to the fact that no additional permits for new nuclear power stations will be issued in the future, and the five currently operational nuclear power stations will need to be phased out over the coming 20 years. At this time, Switzerland generates approximately 35% of its total electricity through nuclear power. Yet, extrapolating from recent experiences in Germany and recognizing that photovoltaic systems can be deployed rapidly, Basel parliamentarians at the meeting were optimistic that the loss of nuclear power will be able to be compensated for by an increase in photovoltaic systems and other renewables in a timely manner. Additional pump storage reservoirs may be required for load balancing and other reasons, but the loss of nuclear power does not necessarily lead to electricity shortages in Switzerland.

The attendees at the meeting concurred that the supply of conventional oil will soon no longer be able to meet demand, i.e., Peak Oil, if it hasn't occurred already, is imminent. Switzerland, which consumes about 2/3 of its total energy in the form of fossil fuels, will need to reduce its energy consumption. Yet, even the gradual loss of fossil fuels must not necessarily lead to a catastrophic breakdown (at least not immediately). About half of our oil consumption is caused by central oil heating systems, and a huge potential exists for improving the energy efficiency of our buildings. Technology is already available that allows us to construct buildings that are energy neutral, i.e., that generate as much energy as they consume. Historic structures, of which there are many in Switzerland, may not lend themselves to easy upgrading; nevertheless, a lot can be accomplished to reduce our dependence on fossil fuels for space heating.

Undoubtedly, in the near future, we will no longer be able to take our SUVs to the nearest gas station whenever it suits us, but Switzerland features one of the densest public transportation networks on the entire planet. While other Western countries in the 20th century systematically dismantled their public transportation systems (under the constant and growing influence of the oil companies), Switzerland consistently modernized and enlarged its public transportation network. In the future, we may need to limit the use of our cars to shorter trips, e.g. to the nearest train station. A reduction in available gas may thus represent more of a discomfort and nuisance than a true disaster.

Unfortunately, these assumptions only hold true if we postulate that the rest of the world will be able to cope equally well with the consequences of diminishing oil reserves, which is anything but certain. Peak Oil means Peak Food. Even now Switzerland is unable to feed its population of 8 million people. We currently import about 60% of our food.

While world population will likely peak long before 2050, it is by no means a given that the Swiss population will have peaked by then as well. If Switzerland continues to outperform its neighbors economically, the already enormous pressures caused by immigration will continue to increase. A recent survey in Germany revealed that 10% of all Germans questioned expressed the opinion that they would consider moving to Switzerland – not because they like Switzerland better than Germany, but for purely economic reasons … and Germany is among the richest nations in Europe.

How will we feed additional immigrants if even now our arable land has shrunk drastically due to increased urbanization? How will we keep our own industrial base operational even with sufficient locally generated energy if the economies of the nations around us are faltering due to energy shortages? For these and other reasons, Peak Oil may still turn into a disaster for Switzerland.

In addition, concerning the issue of anthropogenic climate change, most attendees expressed a much more pessimistic outlook. Certainly the energy crisis will bite us long before climate change takes its toll. However, energy issues can be dealt with after the fact in a reactive mode, even if it is uncomfortable, while the "sins" committed today with respect to the continuing emission of greenhouse gases are expected to lead to irreparable damage fifty years from now. For this reason, anthropogenic climate change represents a challenge that needs to be dealt with pro-actively in the here and now, and there is no discernible political will to do so. Despite being cognizant of the fact that inactivity now may lead to a veritable catastrophe 50 years down the road, elected officials still opt for the coming long-term disaster over short-term inconvenience. Large segments of the population are lacking awareness of the coming disaster, and politicians are prepared to ignore it because unpopular decisions taken by them now will jeopardize their future reelection due to their constituents' poor comprehension of the issues at hand.

Some of the exposés presented were outright alarming. According to Ian Dunlop, a senior member of ASPO Australia and a member of the Club of Rome, unless we start reducing the CO2 emissions right now at a rate of 9% per year, we will be unable to stay within the 2oC increase in temperature considered safe by the IPCC. As this clearly will not happen, we are almost certain to end up with a rise of at least 4oC within the 21st century. Yet, an average increase of 4oC worldwide translates to a rise of 6oC in central Europe, and an increase of 8-12oC in the Arctic.

The melting of the glaciers will dry up rivers and the disappearance of the Greenland ice will lead to a rise of the sea levels by 7 meters. Coastal areas, including a large number of major cities, which are presently home to roughly a third of the world population, will be flooded. Coastal regions will be devastated by hurricanes of unseen proportions, while regions further inland will experience increased desertification. Such change may lead to a die-off scenario where the total world population would shrink rapidly.

According to Dunlop, measures to drastically decrease CO2 emissions would need to be taken within the next 5-6 years to prevent disaster. Thereafter it will be too late. The massive technological and social changes needed to accomplish these goals may entail a war-like setting where everyone is cooperating because there are no alternatives. Yet, as the effects of climate change will not affect us in major ways for another 30-40 years (some effects are already in evidence, as shown by the escalating number of extreme events around the world over the past decade in particular that have already claimed many lives), there is no political will whatsoever to tackle the problem, even if this should mean the end of the world as we know it.

CO2 emissions are inextricably linked to the burning of fossil fuels. For this reason, Peak Oil and anthropogenic climate change are not two separate issues. They must be addressed together. Mankind may choose to ignore one or the other, but cannot do so without risking serious consequences.

Our Western democracies served us well for the past centuries. They offered us freedom and prosperity to a degree never seen before. They also turned out to be more robust than the alternative model embraced by Eastern Europe in the 20th century. While countries that had implemented communist social systems were slow to change, our market economies proved to be highly adaptive to a changing environment.

However, we never before faced a situation where our decisions literally affected the survival of our civilization 50 years in the future, and it remains to be seen whether our political system is able to effectively deal with such a "stress test," or whether our political structures will force us to helplessly submit to our own destruction and that of our planet.

As it stands, the most cooperative and constructive government in terms of dealing with the brewing "perfect storm" ahead may be the Chinese government. Western governments are, at this point, run by representatives that are mostly lawyers (and in-officially by bankers and CEOs of multinational corporations). By contrast, the Chinese leadership consists primarily of engineers. They do understand models and are perfectly capable of reading and interpreting charts. They do everything in their power to help mitigate the coming disaster (and they can afford to do so, because they don't need to fear for their re-election), but their problems are formidable. The Chinese cannot reduce their per capita energy consumption now, and they will not be able to do so for a good number of years to come. The average Chinese citizen remains very poor, compared to their European or American counterpart. China needs to consume more energy to improve the desperate living conditions of a large segment of its population. China is currently burning lots of coal for electricity generation. They are fully aware that this adds significantly to the world's CO2 emissions. According to Prof. Wenying Chen of Tsinghua University, China currently does not see a way around it, as the Chinese are unable to generate enough electricity by other means. Yet, the Chinese leadership is willing to listen and is receptive to any suggestion that will help them reduce their CO2 emissions.

One last note: The Copenhagen meeting demonstrated once again that the top world leadership is incapable of addressing this highly urgent problem, although an immediate prescription for decisively reducing CO2 emissions may be necessary to save our civilization. It was mentioned that it is much easier to deal with politicians at the local level. City mayors and regional governments may have both the will and the means to positively contribute to a local solution. Good examples are likely to have a signaling effect and may convince governments of neighboring areas to adopt successful strategies seen elsewhere. Basel is a good example of that. However, will such a decentralized approach be sufficiently effective to save our planet in time from destruction?

I am very grateful for having had the opportunity to participate in this meeting. It turned out to be an eye-opener in more ways than just one. Yet, after two days of intensive talks, I am asking myself, what have we accomplished? Where is the outreach? Are we merely a club of old men (and a few women) crying on each other's shoulders over spilled wine? What can we do to make a difference?

4 comments:

  1. Wau,

    one of the best and most informative climate presentations (from Ian Dunlop) I have seen!

    But I have a technical question: If global CO2e emission reduction between 5-9% p.a. is needed, it will need to be 3-6 times FASTER than during the greatest economic recession since WW2.

    And, actually, financial crisis probably speeded up the use of coal. It would be interesting to see some thoughts of Ian Dunlop on current debt crisis and proposed EU "solutions", which include INCREASE in leverage, thus assuming rapid economic growth in the future (since otherwise the debt cannot be repaid).

    Mike Maloney suggests that we can have functioning fiat currencies, only if we have exponential rise in debt. Otherwise we have a collapse (i.e. deflation). Austerity measures does not help, either. See his presentation here (highly recommended):

    http://www.youtube.com/watch?v=hxdsfa8OFVc

    Alex

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  2. And,

    of course, we should better forget the "carbon capture and storage" technology, see this recent example of CCS (financial) failure in UK:

    http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-15371258

    I guess CCS is classic example of trying to solve too much complexity by even more complexity (just as is the nuclear energy), but this can only work under bussinees as usual. And we know it has finished. Probably forever.

    And it is the same as trying to solve the problem of aging population of (developed) countries by adding more population growth. But aging population is *THE CONSEQUENCE* of population growth in the past!

    Alex

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  3. There is nothing here I disagree with, however, I have to admit, I almost stopped reading when the term "grid parity" was used in relation to PV.

    All grid parity seems to mean is that a system can provide enough energy into the grid to receive enough money back to pay the capital and running costs, for a given time. This says little about how much use a system will be in replacing a given faction of fossil fuel power.

    "In the future, we may need to limit the use of our cars to shorter trips, e.g. to the nearest train station."

    The developed world could keep our cars and use them less, but why would we bother, on average? The cost per unit distance travelled by car rises as the distance travelled per year drops, just consult your local automobile club's running costs tables. The same is true for any other private transport where capital and standing costs are paid by the household, but the smaller/cheaper the vehicle, the lower these costs. The use of the automobile within cities is perhaps the least beneficial use, ideally, cities would move away from car use towards public transport, walking and bicycling.

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  4. My comment about using cars to reach the nearest train station wasn't meant to concern city dwellers. It was addressing the people who live out in the boonies where no public transportation is available. They may still require cars (possibly EVs) to reach the nearest access point to the public transportation system.

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