Tag Archives: energy technology

Half way there

The UK has made excellent progress on reducing emissions.  But the hard part is yet to come.

The UK’s Climate Change Act (2008) established a legally binding obligation to reduce UK emissions by at least 80% from 1990 levels by 2050.  This is an ambitious undertaking, a sixty year programme to cut four in every five tonnes of greenhouse gas emissions while simultaneously growing the economy.

The story so far is, broadly, an encouraging one.  2016 emission were 42% below 1990 levels, about half way to the 2050 target[1].  This has been achieved in 26 years, a little under half the time available.  And it has been achieved while population has grown by about 15%[2] and the economy has grown by over 60%.  The reduction in emissions from 1990 to 2015 is shown on the chart below, which also shows the UK’s legislated carbon budgets.   There is of course some uncertainty in the data, especially for non-CO2 gases, but uncertainties in trends are less than the uncertainty in the absolute levels, and emissions of CO2 from energy, which is the largest component of the total, are closely tracked.

The UK is half way towards its 2050 target, in a little under half the available time …

Source: Committee on Climate Change

The chart below shows the sectoral breakdown of how this has been achieved, and this raises some important caveats.

Progress in some sectors has been much more rapid than others …

Source: Committee on Climate Change

The largest source of gains has been the power sector, especially if a further fall of a remarkable in emissions from power generation in 2016 is included (the chart only shows data to 2015).  While renewables have made an important contribution, much of this fall has been due to replacing coal with gas.  This been an economically efficient, low cost way of reducing emissions to date, to which UK carbon price support has been a major contributor.  However coal generation has now fallen to very low levels, so further progress requires replacing gas with low carbon generation – renewables, nuclear and CCS.  This is more challenging, and in some cases is likely to prove more expensive.

The next largest source of gains, roughly a third of the total reduction, is from industry.  However, while detailed data is not available, a large part of this reduction may have been due to broader economic trends, notably globalisation of the world economy leading to heavy industry becoming more concentrated in emerging economies.  This trend may also have had some effect on electricity demand and thus emissions.  The aggregate reduction in global emissions may thus be smaller than indicated by looking at the UK alone.  Reducing global emissions still requires a great deal more progress on industrial emissions, especially in emissions intensive sectors notably iron and steel and cement.

Progress in reduction of emissions from waste, especially methane from landfill, has been a third important contributor.  Again, this has been highly cost-effective reduction.  However about two thirds of emissions have now been eliminated so further measures will necessarily make a smaller contribution, though there is much that can still be done with the remainder such as eliminating organic waste from landfill.

Other sectors have done much less, and will need to do more in the years to come.  Progress on f-gases may be helped by the recent international agreement on HFCs, although more will still need to be done.  Transport emissions have made only slow progress in recent years.  It is essential that electrification is encouraged so that a large change similar to that achieved in the power sector can be achieved in transport.  The buildings stock remains an intractable problem, and the first priority must be to at least make sure that new buildings are built to the highest standards of insulation.

So continuing the trend of falling emissions in future will be difficult and will require new and enhanced policy measures.  But in 1990 the prospects of achieving what has already been achieved doubtless looked daunting, and progress to date should encourage further efforts in future.

Adam Whitmore -25th April 2017

Material in this post draws on a presentation by Owen Bellamy of the Committee on Climate Change at a British Institute of Energy Economics seminar on 5th April 2017.

[1] The UK’s domestic emissions need to go down slightly more rapidly than the headline target would suggest due to the role of international aviation and shipping.  This is shown on the chart.  However the broad message is the same.


The constrained role of biomass

The role of biomass in the world energy system looks likely to be constrained, so there will be a need to focus on high value applications where there are few low-carbon alternatives.

This is the second of two posts looking at the role of biomass.  Here I focus on potential resource constraints.

A wide range of possibilities

The amount of biomass available to provide energy depends a lot on the amount of land available to grow energy crops, and how much that land can yield.   Different assumptions on these variables produce quite different estimates of the total resource, and numerous studies over the years have produced a wide range of results.    The amount of waste biomass available also matters, but potential availability from this source is smaller.

A comprehensive review of estimates of the biomass resource was carried out two years ago by researchers at Imperial College[i] (see chart).  It showed a variation in estimates of a factor of around 40, from of the order of 30 EJ to over 1000 EJ (1EJ =1018 J, or a billion GJ, or 278 TWh).  This compares with total world primary energy demand of just under 600 EJ, transport demand of around 100 EJ, and at least 250 EJ to produce present levels of electricity, assuming biomass combustion to remain relatively inefficient[ii].

Estimates of available biomass resource

biomass chart processed

Source: Slade et. al. (2014)

The authors examine reasons for differences in estimates, which I’ve summarised in the table below.  The differences are largely assumption driven, because the small scale of commercial bioenergy at present provides little empirical evidence about the potential for very large scale bioenergy, and future developments in food demand and other factors are inevitably uncertain.

Reasons for variation in estimates of total biomass supply

Range Typical assumptions
Up to 100EJ Limited land available for energy crops, high demand for food, limited productivity gains in food production, and existing trends for meat consumption.  Some degraded or abandoned land is available.
100-300 EJ Increasing crop yields keep pace with population growth and food demand, some good quality agricultural land is made available for energy crop production, along with 100-500Mha of grassland, marginal, degraded and deforested land
300-600EJ Optimistic assumptions on energy crop availability, agricultural productivity outpaces demand, and vegetarian diet
600 EJ + Regarded as extreme scenarios to test limits of theoretical availability


Reasons for caution

In practice there seem to me to be grounds for caution about the scale of the available resource, although all of these propositions require testing, including through implementation of early projects.

Land Availability

  • There will rightly be emphasis on protection of primary forest on both carbon management and biodiversity grounds, with some reforestation and rewilding.
  • There is little evidence of a shift away from meat consumption. With the exception of India, less than 10% of people in  most countries are vegetarian despite many years of campaigning on various grounds[iii].   In China meat consumption is associated with rising living standards.
  • Demand for land for solar PV will be significant, although a good deal of this will be on rooftops and in deserts


  • The nitrogen cycle is already beyond its limit, constraining the role of fertiliser, and water stress is a serious issue in many places (agriculture accounts for 70% of current fresh water use). The UN Food and Agriculture Organisation has projected fairly modest increases in future yields.

Policy support

  • Difficulties in limiting lifecycle emissions from biofuels are likely to lead to caution about widespread deployment.
  • Concerns about food security may limit growth of biofuels.

Small scale to date, despite many years of interest

  • There has been little progress to date compared with other low carbon technologies. Though traditional biofuels remain widely used, modern biofuels account for a very small proportion of demand at present.  World biofuels consumption currently accounts for only 0.2% of world oil consumption[iv] .  Many biofuels programmes have had subsidies cut and there is still limited private sector investment.

In this context some estimates of the potential for biomass to contribute to energy supply seem optimistic.  For example, Shell’s long-term scenarios (Oceans and Mountains) show biomass of 74 EJ and 87 EJ respectively for commercial biomass, 97-133 EJ including traditional biomass by 2060[v].  These totals are towards or above the more cautious estimates for the resource that might ultimately be available (see table above).  A recent review article[vi]  suggested that by 2100 up to 3.3 GtCp.a. (around 12 billion tonnes of CO2) could be being removed, and producing around 170EJ of energy.  However the land requirements for this are very large at about 10% of current agricultural land.  The authors suggest instead a mean value for biomass potential of about a third of that, or 60EJ.

On balance it seems that biomass is likely to account for at most less than 10% of commercial global energy (likely to be around 800-900EJ by mid-century), and potentially much less if land availability and difficulties with lifecycle emissions prove intractable.

It thus seems likely that biomass energy will be relatively scarce, and so potentially of high value.  This in turn suggests it is likely to be mainly used in applications where other low carbon alternatives are unavailable.  These are not likely to be the same everywhere, but they are likely often to include transport applications, especially aviation and likely heavy trucking, and perhaps to meet seasonal heat demand in northern latitudes.  For example, according to Shell’s scenarios aviation (passengers + freight) is expected to account for perhaps 20-25EJ by 2050, and biomass could likely make a useful contribution to decarbonisation in this sector.

None of this implies that biomass is unimportant, or has no role to play.  It does imply that policies focussing on deploying other renewable energy sources at large scale, including production of low carbon electricity for transport, will be essential to meeting decarbonisation targets.  And the optimum use of biomass will require careful monitoring and management.

Adam Whitmore  – 11th April 2016


[i] Slade et.al., Global Bioenergy Resources, Nature Climate Change February 2014

[ii] Data on final consumption and electricity production from Shell and IEA data.  35% efficiency for biomass in electricity is assumed, which is likely to be somewhat optimistic, especially if CCS is employed.

[iii] https://en.wikipedia.org/wiki/Vegetarianism_by_country

[iv] BP Statistical Review of World Energy

[v] http://www.shell.com/energy-and-innovation/the-energy-future/shell-scenarios.html  These totals include biofuels, gasified biomass and biomass waste solids, and traditional biomass.

[vi] Smith et. al., Biophysical and economic limits to negative CO2 emissions, Nature Climate Change, January 2016.  The paper estimates land requirement for 170 EJ of 380-700 Mha, around 10% of total agricultural land area in 2000 of 4960Mha.

Deploying CCS on fossil fuel plant is more of a priority than implementing negative emissions technologies

The potential for biomass with CCS and direct air capture of CO2 should not distract from deployment of CCS on fossil fuel plants over the next few decades.  Among other things, learning from CCS on fossil fuels will help make eventual deployment of CCS on biomass cheaper and more effective.

There appears to be increasing likelihood that atmospheric concentrations of greenhouse gases will grow to exceed levels consistent with the target specified in the recent UNFCCC Paris agreement of limiting temperature rises to “well below” two degrees.  Such an outcome would require CO2 to be removed from the atmosphere faster than natural sinks allow, in order to restore concentrations to safe levels.  Near zero net emissions in the latter part of this century will also be needed to stabilise concentrations.

Many models of future emissions pathways now show negative emissions technologies (technologies that result in a net decrease in CO2 in the atmosphere) needing to play a major role for in meeting climate goals. They have the potential to remove carbon dioxide from the atmosphere in the event of “overshoot” of target atmospheric concentrations, and to balance remaining emissions from sectors where abatement is difficult with a view to achieving net total emissions of close to zero.  But the application of such technologies should not be considered in isolation.

Bio Energy with CCS (BECCS)

Bio energy with CCS (BECCS ) is the most widely discussed approach to negative emissions.  BECCS is not a single technology but a combination of two major types of CO2 removal.  Bioenergy from burning biomass to generate electricity or heat emits a substantial amount of CO2  on combustion – around as much as a coal plant.  However much of this can be captured using CCS.  More carbon dioxide is reabsorbed over time by the regrowth of the plants, trees – or perhaps algae – that have been harvested to produce the bioenergy.  Together, the capture of the CO2 from the flue gas and the subsequent absorption of CO2 from the atmosphere by regrowth of biomass can lead to net removal of CO2 from the atmosphere, although this takes time.  (The net amount of CO2, that is emitted on a lifecycle basis from burning biomass without CCS depends on the type of biomass and is subject to considerable variation and uncertainty – a controversial topic that would need another post to review.)

However at an energy system level, where the CO2 is captured – biomass plant or fossil fuel plant – is less relevant than the total amount that’s captured.  Broadly speaking, if there is a biomass plant and fossil fuel plant both running unabated the same benefit can be achieved by capturing a tonne of CO2 from either.

Indeed there may be advantages to putting CCS on a conventional plant rather than biomass plant.  It may be technically more tractable.  Furthermore, CCS require a lot of energy to capture the CO2 and then to compress and pump it for permanent storage.  Biomass is likely to be supply constrained (again, this is an issue that requires a post in itself), so using biomass rather than fossil fuels to provide this energy may limit other applications.  Only when there are no fossil fuel plants from which to capture CO2 does biomass plant become unambiguously a priority for CCS.  This is clearly some way off.

Furthermore biomass with CCS for electricity generation may not be the best use of bioenergy.  Converting sunlight to bioenergy then turning that into electricity is a very inefficient process.  Typically only 1-2% of the sunlight falling on an area of cropland ends up as useful chemical energy in the form of biofuels.  There are various reasons for this, not least of which is that photosynthesis is a highly inefficient process.  Burning biomass to make electricity adds a further layer of inefficiency, with only perhaps a third or less of the energy in the biomass turned into electricity.  Sunlight therefore gets converted to electricity with an efficiency of perhaps 0.5%.  This compares with around 15- 20% for solar cells, implying that scarce land is often likely to be best used for solar PV.  (The calculation is closer if solar PV is used to create storable energy e.g. in the form of hydrogen).   For similar reasons the use of biofuels rather than electricity in transport is inefficient, in part because internal combustion engines are less efficient than electric motors.

Limited available biomass may be better used for those applications where it is the only available lower carbon energy source, notably in aviation and (likely) heavy trucks, or for other applications such as district heating with CCS, where the ability to store energy seasonally is especially valuable.

At the very least, detailed system modelling will be required to determine the optimal use of biomass.  Suggesting that BECCS should have a major role to play simply because in isolation it has negative emissions may lead to suboptimal choices.

Direct Air Capture (DAC)

Direct Air Capture (DAC), where carbon dioxide is chemically absorbed from the atmosphere and permanently sequestered, can also reduce the stock of CO2 in the atmosphere.  However the typical concentration of CO2 in a flue gas of a power plant or industrial plant is several percent, about a hundred times as great as the concentration of 0.04% (400 ppm) found in the atmosphere.  This makes the capture much easier.  Furthermore, millions of tonnes can be captured and piped from a single compact site using CCS, generating economies of scale on transport and storage.  In contrast DAC technology tends to be more diffuse.  These considerations imply that CCS from power plants and industrial facilities is always likely to be preferable to direct air capture until almost all the opportunities for CCS have been implemented, which again is a very long way off.

Uncertainties and optionality

There are many uncertainties around negative emissions technologies, including the availability of biomass, cost, and the feasibility of reducing emissions in other sectors.  For these reasons developing optionality remains valuable, and research to continue to develop these options, including early trial deployment, is needed, as others have argued[i].

One of the best ways of developing optionality is to deploy CCS at scale on fossil fuel plants.  This will reduce the costs and enable the development of improved technologies through learning on projects.  It will also help build infrastructure which can in turn benefit  BECCS.  This needs to run in parallel with ensuring that the lifecycle emissions from the bioenergy production chain are reduced and biodiversity is safeguarded.

Negative emissions technologies may well have a role to play in the latter part of the century.  But they seem likely to make more sense when the economy is already largely decarbonised.  In the meantime deployment of CCS, whether on industrial facilities or power plants, needs to be a much greater priority.

Adam Whitmore – 21st March 2016

[i] Investing in negative emissions, Guy Lomax,  Timothy M. Lenton,  Adepeju Adeosun and Mark Workman, Nature Climate Change 5, 498–500 (2015)  http://www.nature.com/nclimate/journal/v5/n6/full/nclimate2627.html?WT.ec_id=NCLIMATE-201506



Grains of rice, Japanese swords and solar panels

Even Greenpeace has underestimated the growth of renewables.  In particular, solar has been growing exponentially, and may continue to be so for a while, though likely at a slower percentage rate.

Greenpeace did much better than many at projecting the growth of renewable energy sources in the 2000s.  Their projections were very close to outturn for wind – the 1999 projections were a little below outturn, the 2002 projections a little above.  However even Greenpeace underestimated the growth of solar.  The projections were nevertheless startlingly better than those of the IEA, who have, as I’ve previously noted, consistently underestimated the growth of renewables by a huge margin.  Growth of solar has been exponential, as has that of wind (at least until recently).  Greenpeace appears to have done well by following the logic of exponential growth.

Greenpeace’s projections for wind growth in the 2000s were close to outturn, but they underestimated the growth of solar …


Exponential growth is so powerful that it can confound intuition about how large numbers can become.  The counterintuitive power of exponential growth is illustrated by the process of making a traditional Japanese steel sword.  The supreme combination of strength and flexibility of such a weapon is said to derive from the way an exponential process layers the metal.  As the metal is beaten out and folded repeatedly to forge the sword the number of layers in the metal doubles up each time.  Following this simple process 15 times creates 215 layers, well over 30,000.  This would be impossible in any other way with traditional methods, and the number of layers created would be hard to comprehend without doing the formal calculation.  This property of producing very large numbers from simple repeated doublings may have contributed to previous projections for renewables seeming implausible, because they were so much greater than the then installed base.  This may have contributed to even Greenpeace being a little cautious in its projections for solar.

Nevertheless exponential growth inevitably runs into limits as some stage.  This is captured by the classic fable of grains of rice on a chessboard, where one grain is put on the first square, two on the second, four on the third, eight on the fourth and so on, doubling with each square.  Half way through the chessboard the pile of grains, though very large, is manageable – around 50 tonnes for the 32nd square.  However amounts then quickly begin to go beyond all reasonable physical constraints.  The pile on the final square would contain 263 grains of rice, which is about 230 billion tonnes.  This is about 300 times annual global production, and enough to cover not just a square of the chessboard but the entire land surface of the earth (to a depth of about a millimetre or two).

Extrapolating growth rates for solar PV from the period 2000 to 2013, when cumulative installed capacity doubled every two years, runs into similar limits.  At this growth rate the entire surface of the earth would be covered with solar panels before 2050.  This would provide far more energy than human civilisation would need, if there were room for any people, which there would not be because of all the solar panels.   So are there constraints that imply that renewables are now in second half of the chessboard – or, if you prefer a more conventional model, the linear part of an s-curve for technology adoption?

Looking at solar in particular, as I’ve previously commented, it needs a lot of land, but this is unlikely to be a fundamental constraint.  Some have previously suggested a limit as technologies reach scale, defined as about 1% of world energy supply, after which growth becomes more linear.  However solar manufacture and installation are highly scalable, so there are fewer obstacles to rapid growth than with traditional energy technologies.

Costs are rapidly falling, so that solar is becoming competitive without subsidy, both compared to other low carbon technologies and, increasingly, with high carbon technologies, especially if the cost of emissions is taken into account.  There is no obvious limit to how low the costs of solar cells can go that is likely to bind in the foreseeable future, although the ancillaries may show slower cost falls.  The costs of lithium ion batteries are also falling rapidly, having approximately halved in the last five years and continuing to fall at a similar rate.  As a result daily storage is becoming much more economic, reducing the problem of the peakiness of solar output and easing its integration into the grid, although seasonal storage remains a daunting challenge.

Solar still accounts for only around 1% of world electricity generation so globally there are plenty of opportunities globally in new electricity demand and from scheduled retirement of existing generating plant.  The vexed issues around grid charges, electricity market structures and role of incumbents may slow growth for a while, at least in some jurisdictions, but seem unlikely to form a fundamental barrier globally as long as costs continue to fall.

In short there seem few barriers to solar continuing to grow exponentially for a while, although likely at a slower percentage rate than in the past – each doubling is likely to take longer than two years given the current scale of the industry.  Solar can still continue moving quite a long way up the chessboard before it hits its limits.  How large the industry will become will need to await a future post, but provisionally there does not seem any reason why solar PV should not become a 300-600 GW p.a. or more industry.

Policy has played an important role in the development of solar to date mainly by providing financial incentives.  It will continue to play an important role, but this will be increasingly around removing barriers rather than providing a financial stimulus.

Of course I cannot know if this fairly optimistic view is right.  But it does at least to avoid some issues that might bias projections downwards.  First, it recognises the potential validity of counter-intuitive results.  In a sector such as energy which usually changes quite slowly the numbers resulting from exponential growth can seem implausible.  This can lead to rejection of perfectly sound forecasts, as the intuition of experienced professionals, which is based on long experience of incremental change, works against them.  Second it avoids assuming that all energy technologies have similar characteristics.  Finally, it takes into account a wide range of possibilities and views and considers the drivers towards them, helping to avoid the cognitive glitch of overconfidence in narrow limits to future outcomes.

The rate of growth of renewables is intrinsically uncertain.  But the biases in forecasts are often more towards underestimation than overestimation.  If you’ve been in the energy industries a while it’s quite likely that your intuition is working against you in some ways.  Don’t be afraid to make a projection that doesn’t feel quite right if that’s where the logic takes you.

Adam Whitmore – 25th November 2014


In the calculations of the results from exponential growth I have, for simplicity, assumed very rough and ready rounded values of 40,000 grains of rice = 1litre = 1 kg.  I’ve assumed 10m2/kW (including ancillaries) for the area of solar panels. The land surface of the earth is 1.5 x108 km2.  Solar capacity doubled around every 2 years from 2000 to 2013, growing from 1.25GW in 2000 to 140 GW in 2013 (source:  BP statistical review), reaching a land area of around 1400km2.  217 times its current area takes it past the land surface of the earth, so it would take to 2047 (34 years from 2013) with doubling of installed capacity every 2 years to reach this point.  The source of the story about sword-making is from the 1970s TV documentary The Ascent of Man and accompanying book.

For data on Greenpeace’s historical projections see:

http://www.greenpeace.org/international/Global/international/publications/climate/2012/Energy%20Revolution%202012/ER2012.pdf See pages 69 and 71


Making climate change policies fit their own domain

A new framework acts as a sound guide for policy formation.

There is a widely held narrative for climate policy that runs something like this.  The costs of damage due to greenhouse gas emissions are not reflected in economic decisions.  This needs to be corrected by imposing a price on carbon, using the power of markets to incentivise efficient emissions reduction across diverse sources.  Carbon pricing needs to be complemented by measures to address other market failures, such as under-provision of R&D and lack of information.  Correcting such market failures can help carbon markets function more efficiently over time.  However further interventions, especially attempts by governments to pick winners or impose regulations mandating specific solutions, are likely to waste money.  This narrative, even if I have caricatured it a little, grants markets a central role with other policies in a supporting role.  Its application is evident, for example, amongst those in Europe who stress and exclusive or central role for the EUETS.

While this narrative rightly recognises the important role that markets can play in efficient abatement, it is incomplete to the point that it is likely to be misleading as a guide to policy.  A better approach has recently been characterised in a new book by Professor Michael Grubb and co-authors.  He divides policy into three pillars which conform to three different domains of economic behaviour.  Action to address all three domains is essential if efforts to reduce emissions to the extent necessary to avoid dangerous climate change are to succeed.  These domains and the corresponding policy pillars are illustrated in the chart below.

Three domains of economic behaviour correspond to three policy pillars …

Domains and pillars diagram

In the first domain people seek to satisfy their needs, but once this is done they don’t necessarily go further to achieve an optimum.  Although such behaviour is often characterised by economists as potentially optimal subject to implicit transaction costs this is not a very useful framework.  Much better is to design policy drawing on disciplines such as psychology, the study of social interactions, and behavioural economics.  This domain of behaviour relates particularly to individuals’ energy use, and the corresponding policy pillar includes instruments such as energy efficiency standards and information campaigns.

The second domain looks optimising behaviour, where companies and individuals will devote significant effort to seeking the best financial outcome.  This is the domain where market instruments such as emissions trading have the most power.  Policy making here can draw strongly on neoclassical economics.

The third domain is system transformation, and requires a more active role from governments and other agencies to drive non-incremental change.  The policy pillar addressing this domain of behaviour includes instruments for technology development, the provision of networks, energy market design, and design and enforcement of rules to monitor and govern land use changes such as deforestation.  Markets may have a part to play but the role of governments and other bodies is central here.  The diversity of policies addressing this domain means that it draws on a wide range of disciplines, including the study of governance, technology and industrial policy, institutional economics and evolutionary economics.

As one moves from the first to the third domain there is increasing typical scale of action, from individuals through companies to whole societies, and time horizons typically lengthen.

This framework has a number of strengths.  It is both simple in outline and immensely rich is its potential detail.  Each domain has sound theoretical underpinnings from relevant academic disciplines.  It acknowledges the power of markets without giving them an exclusive or predominant role – they become one of three policy pillars.  It implies that the vocabulary of market failures becomes unhelpful, as I’ve previously argued.  Instead policy is framed as a wide ranging endeavour where the use of markets fits together with a range of other approaches.  While this may seem obvious to many, the advocacy of markets as a solution to policy problems has become so pervasive, especially in Anglo-Saxon economies, that this broader approach stands as a very useful corrective to an excessively market-centric approach.

The framework is high level, and specific policy guidance needs to draw on more detailed analysis.  The authors have managed to write 500 pages of not the largest print without exhausting the subject.  However, the essential framework is admirable in its simplicity, compelling in its logic, and helpful even at a high level.  For example it suggest that EU policy is right to include energy efficiency, emissions trading and renewables – broadly first, second and third domain policies respectively – as well as to be active in third domain measures such as improving interconnection, rather than relying exclusively on emissions trading (although as the EUETS covers larger emitters, so first domain effects are less relevant for the covered sector).

The framework in itself does not tell you what needs to be done.  In particular the challenges of the third domain are formidable.  But it provides a perspective which deserves to become a standard structure for high level guidance on policy development.

Adam Whitmore – 31st October 2014

Why have the IEA’s projections of renewables growth been so much lower than the out-turn?

The IEA has greatly underestimated the growth of renewables for some years now.  This illustrates how important it is to allow for unexpected outcomes if policy design is to be robust, as even well informed projections can be very different from the subsequent out-turn.

(For an update on the IEA’s projections of renewables see also this post.)

The International Energy Agency’s (IEA’s) annual World Energy Outlook (WEO) is a thorough and well researched analysis of the outlook for the world’s energy systems[1].  Over the years it has become the standard view of the world’s energy use now and in the coming decades.  However it has had an extraordinarily poor track record in projecting the growth of solar and wind power in recent years.  The charts below compare the IEA’s projections over the last few years with the out-turn for both wind and solar.  Projections have been revised upwards each year.  But they have still been consistently too low, by a very large amount in most instances, with the pattern persisting over many years for two different groups of technologies, wind and solar PV.   As recently as 2006 it was expected to take until the 2020s to reach current levels of wind capacity, and until the 2030s to reach current levels of solar capacity, with current solar PV capacity almost an order of magnitude greater than expected in just seven years ago.

The IEA’s projections have consistently increased over the years, but still fallen short of actual deployment ….

wind and solar past projections

It would, of course, be wrong to suggest that because past projections have been underestimates the current projections will also be too low.  However the most recent projections continue to show rates of deployment that appear very cautious.  The graphs below show the IEA’s projected rate of installation in the most recent WEO (for 2012) under its central New Policies scenario compared with past and current growth rates.  For both wind and solar projected installation rates start below 2012 levels and remain roughly constant or fall over time.

IEA’s projection show declining rates of deployment for both wind and solar …

wind and solar current projections

Decreases in installation rates are of course possible.  Wind installation seems likely to be lower this year than last, although the rate of solar deployment continues to grow.  However, projecting flat or slowly declining installation rates over the next couple of decades suggests either that current rates are a spike, or that installation is moving towards saturation.  Neither of these possibilities seems likely.  Costs are continuing to fall, especially for solar, renewables still account for a very small share of total generation, and drivers towards deployment of low carbon technologies seem likely to strengthen rather than weaken over the period.  One does not need to be an advocate of renewables to expect that these industries are more likely to grow than shrink over the next couple of decades, even if growth of annual deployment may be much slower than in the past.  It would seem more plausible if a central case scenario were projecting some continuing growth in annual installation, with decreases very much a low case.   It will be interesting to see how these projections are adjusted in the next edition of the WEO due out in a few weeks.

So what has led to this persistent underestimation of growth?  There may have been a reliance on individual jurisdictions’ plans, with more caution than seems with hindsight to have been warranted about the rate at which policy might move.  This seems to have led to linear extrapolation of capacities when technologies were in a phase of exponential growth.  Projections for wind have improved in recently years as growth appears to have become more linear (at least temporarily), and following a large upward revision in the projected rate of addition between the 2009 and 2010 editions of the WEO.  It may also be that there is some inherent caution about new technologies.  However the IEA – along with many others – has tended, if anything, to be somewhat optimistic about CCS, so this cannot be a complete explanation.  There are also specific circumstances that have played a role, notably being somewhat slow to recognise the falling costs of solar PV, with even the costs from the 2012 edition being well above actual values[2].

There may also be a deeper explanation rooted in institutional conservatism.  Taking a conservative view of future prospects in the energy sector can be necessary to avoid being swayed by the latest fad.  A conservative view recognises the realities of the long time horizons and vast scale of the world’s energy systems.  However it can carry the risk of missing the role of genuinely transformative technologies, as appears to be the case here.  The IEA’s current caution may still prove justified.  But  Eurelectric, the European power industry association, noted in a recent report that the European power sector is already undergoing one of the largest transformations in its history[3].  Such changes seem likely to be a global phenomenon.  Wind and (especially) solar PV seem likely to form part of the largest transformation of the energy sector at least since the growth of oil consumption in the middle decades of the 20th century, and perhaps since the invention of the steam engine.  The IEA seems to be slow to recognise this.

Whichever way the future turns out, the IEA’s past projections show how different actual out-turns can be from even well-informed projections.  This provides and important reminder that none of us can be sure about future changes to the energy sector, and policy design must always be robust against things turning out to be different from expectations.

Adam Whitmore – 8th October 2013

Solar deployment – are there limits as costs come down?

A kWh is a different product depending on when and where it is delivered.  The rapid fall in the costs of solar PV implies that building grids, storage and commercial arrangements able to match supply and demand is much more urgent.  This will require strong policy drivers.

Falling costs are making solar PV increasingly competitive with other forms of electricity generation.  This post looks at what might limit solar PV’s deployment if costs continue to fall and reach levels low enough to allow for additional expenditure on grids, storage and demand-side infrastructure while remaining economically competitive.   I’m not taking a view on if or when this will happen, or how low costs might become – there is still a significant way to go to reach that point on a global basis.  I’m simply looking at what the remaining barriers would be if they did.  I’ll use some rough and ready numbers to look at what it might take for solar to produce around a third of the world’s electricity consumption.  I’ll assume this illustratively to be about 17,000TWh (out of a total of around 50,000TWh) by mid-century[1], which would be around 180 times the 2012 total of around 93TWh[2] of solar PV output.

As has often been noted, the solar resource is easily large enough to provide such large amounts of electricity.  Recent data from the US National Renewable Energy Laboratories (NREL) shows average US output of 70kWh/m2 based on total site area (i.e. not only the panels)[3].   Generating 17,000TWh on this basis (likely a conservative assumption, as panel efficiency is likely to increase over time) would require an area of around 240,000km2, less than 0.2% of the world’s land surface.  This is a huge area – about the size of the United Kingdom – but far less than the land devoted to agriculture, which uses solar energy to grow food.  And solar power can often make use of spaces – such as rooftops and deserts – that have few alternative uses.   Local planning and environmental concerns seem likely to become a more prominent issue as solar deployment grows.  However these concerns seem unlikely to place a fundamental limit on the industry globally.

A solar industry meeting a third of world electricity demand would be very large, but not infeasibly so.  It would require about 300GW of capacity to be added each year on average worldwide, around 10 times the 2012 installation rate, which has grown to its current level in just a few years.

However, matching the location and timing of supply to demand is a huge challenge.  Electricity at a different time and place is a different product and so part of a separate market.  Grids and storage help link these different markets[4] and so minimise load shedding (though some may still be required).

The first problem is geographical proximity.  In some cases (such as California and Mexico) demand is quite close to high quality solar resources.  However in densely populated countries with weak solar resources, such as the UK, the challenge is much greater[5].  Electricity may need to be brought from sunnier regions, especially in winter, requiring large scale transmission infrastructure.  There may be more local issues. For example in Japan, grid reinforcement will be needed to bring power from the north to more populous areas, crossing boundaries between regional utilities[6].  However problems in this respect may not be universal.  One recent study indicated that the German grid is already quite robust[7].

Matching the timing of output and demand is even more problematic.  Solar output is much peakier than system demand, and peak output and demand will often not coincide.  One indication is that load balancing becomes a significant problem when solar begins to account for more than around 10-15% of generation[8].

As solar penetration increases relative prices at different times of day are likely to shift, which may well cause demand to respond.  More sophisticated market arrangements and system operation are likely to become important features of most scenarios with extensive penetration of renewables.

Matching the timing of peaks by moving power from where the sun is shining to where the demand is located could imply  tens or hundreds of GW of power to be moved across continental distances.  This is because the point at which the sun is highest in the sky (around noon), when solar output tends to be at its maximum, moves quite quickly across the surface of the earth.  At the equator it travels at just over 1000miles/hour, implying that to service demand even an hour later in the day power must be moved hundreds of miles from west to east.  The chart below shows how far west you need to go to shift the time of peak one hour later at the latitudes of some of the world’s major cities.  To move the peak a quarter of the day – from a noon production peak to 6pm demand – you need to move power a quarter of the way round the world.  And the direction does not always help.  To meet later demand on the US west coast solar panels would need to be out in the Pacific Ocean rather than Arizona and Texas. ( Putting more west facing panels in California itself helps this.  There is some loss of total output but the match to system peak improves).  China, with its population concentrated on the east coast, is better served in the evening, but would run into problems in the morning.  This implies that load balancing using transmission will be a huge challenge from a technological, regulatory and commercial perspective.

Solar production needs to be hundreds of miles west to meet a demand peak one hour later in the day at the latitude of the world’s major cities…

Chart of distance

Even the most extensive links may not be enough on occasions when the sun is over the oceans.  The map below shows where the sun is shining at midnight GMT on 21st December.  There is an hour or so of setting winter sun still left on the US west coast, and the weak first hour or two of the day’s output from panels in east Asia, with Australia in daylight (and therefore with some intriguing export possibilities if links can be built far enough).  But the whole of Europe, Africa, the Middle East, India, and almost all of Russia and North and South America and a good deal of the rest of Asia are in darkness.

daylight map

Building storage to address this problem is challenging because of the huge scale needed, as well as because of  the cost.  The subject is too large to go into here in detail, although one recent study showed it to be crucial for reaching a third of supply in  North America  [9]. In northern Europe very large amounts of storage are required even to balance load within the day. Seasonal storage (because for example average intensity of sunlight in the UK is nine times higher in summer than in winter) would require enormous capacity[10]Germany’s subsidy for storage as part of new residential PV systems, which was introduced in May, and California’s plan for 1300MW of storage by 2020 are early examples of the type of initiative that is likely to be required.  Among other effects the premium for hydro power for load balancing is likely to increase.  And reductions in load factor due to no storage being available and so surplus remaining unused at peak will be less of a problem the lower the capital costs of solar become.

Building transmission and storage infrastructure, along with the arrangements to manage them, will take decades at the scale required.  And getting the costs of storage down will also be hugely challenging.  This will be accompanied by the need to make significant changes to market mechanisms so that they can more effectively balance supply and demand.  None of this will be achieved easily, and strong policy drivers are likely to be required for this to happen as fast as now looks likely to be required if solar is to play a central role in decarbonising power systems.

Few expected solar to become quite so cost competitive quite so quickly.  This largely unanticipated increase in competitiveness leads to a similarly accelerated programme now being required to build grids and storage able to incorporate increasingly large amounts of solar into the world’s power systems.

Adam Whitmore  –  25th September 2013

[1] This is broadly similar to Shell’s Oceans Scenario, which shows 20,800 TWh of solar generation, 36% of a total of 57,800TWh.  The total consumption considered here is based on an extrapolation to 2050 of the IEA’s New Policies scenario for 2035 to 2050.  This may be higher with increased electrification of end use.  It may be lower with greater efficiency, but in any case only intended to indicate order of magnitude.  See http://s01.static-shell.com/content/dam/shell-new/local/corporate/Scenarios/Downloads/Scenarios_newdoc.pdf

[2] Source BP Statistical Review of world energy, 2013

[3] http://www.nrel.gov/docs/fy13osti/56290.pdf.  I’ve taken the average for large solar of 3.4 acres per GWh.

[4] Consumers cannot readily substitute between consumption in different places and at different times – you need electricity in your living room now, and electricity in someone else’s living room later is not the same product.  A hypothetical monopolist could profitably impose a small but significant non-transitory increase in price, implying that the markets are separate.

[5] David MacKay. Solar energy in the context of energy use, energy transportation ans energy storage.  Philosophical Transactions of the Royal Society Vol 371,number 1996.

[10] See reference 3 above for a discussion of this point.