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Disputing the Haskayne School of Business Presentation- “Canada’s Energy Future: Renewable Energy in Vogue?”

Opinion Contributed by Michelle Stirling © 2017

On Oct. 19, 2017, I attended a University of Calgary, Haskayne School of Business presentation by David Jacoby, President of Boston Strategies International.  The group in attendance were mostly supply chain managers, along with other members of the public, like myself.

original michele photo susan

Michelle Stirling, Communications Manager, Friends of Science Society

The event description opened with what I found to be an odd phrase:  “Renewable energy transformation is fashionable everywhere…” Fashionable?… but things were about to get odder yet.

Mr. Jacoby’s presentation opened with reference to the Paris Agreement, with some disparaging comments about his own US government’s rejection of the agreement. He showed a map of the world with Alaska and the US marked in red – to  illustrate the outstanding climate laggard of the world.  He seemed to think that if ‘everyone’ else in the world was on board with the Paris Agreement, the US should agree to it.

A detailed review of the Paris Agreement shows that it is basically an unbalanced effort at extorting money from the industrialized West, in particular the US, with no benefit to the environment, and that the Paris Agreement will not meet the objectives of reducing greenhouse gases or preventing climate change.[1] If Canada were to attempt to meet the Paris goals, according to Ottawa energy policy consultant, Robert Lyman, “Achieving the aspirational goal of 80 per cent reduction recommended by the IPCC would mean reducing emissions to 147 megatonnes CO2 equivalent. That would be comparable to reducing Canada’s per capita emissions and our energy economy to the current levels of Bolivia, Sudan or Iraq.”[2] The Americans clearly understood the extortionate and economically crippling outcomes and that is the main reason President Trump pulled out of the Paris Agreement.

The Green Climate Fund, associated with the Paris Agreement allowed that countries, some with the highest GDP would not be required to contribute, but could apply as recipients. Others with the highest per capita incomes like Kuwait, Saudi Arabia, Singapore, UAE, would not have to contribute, while deeply indebted Greece would be required to pay. (Updated: This paragraph added Oct. 23, 2017 at 7:13 am)

Mr. Jacoby then moved on to a graph showing an astounding growth in renewables (wind/solar primarily) against a foreground flat-lining or even declining graph of conventional energy sources.  The style of presentation of this graph left the impression that renewables would be exceeding conventional energy sources – in fact, according to Robert Lyman’s summary of the International Energy Agency’s 2016 report:

  • In 2014, the shares of primary energy supply by energy source were: oil, 31.3%; coal, 28.8%; natural gas, 21.0 %; biofuels and waste, 10.3%; nuclear, 4.8%; hydro, 2.4%; and “other”, including all renewables energy sources, 1.4%. (Message: Fossil fuels now account for 81% of the world’s energy supply and renewables just over one per cent. That situation will not change soon, easily or cheaply.)[3]

 

  • A power point linked within this recent blog post regarding the recent Generation Energy conference illustrates the expected growth of fossil fuels, based on BP and US EIA statistics.[4] While renewables are still a growth industry, they still will be a very small component. Oil and gas are mature industries and this is reflected in the stability of their markets though overall fossil fuel demand is forecast to continue to be in demand worldwide.
bp shares of global primary energy consumption lyman sept 9 2017

Graph from BP Statistical Review 2017 shows renewables as a fraction of global energy consumption and continued rise in natural gas; only slight declines in oil and coal.

Surely this crucial context and statistical ratio should have been presented.

Based on reports from Ottawa energy policy consultant, Robert Lyman, and other peer-reviewed experts, I dispute many claims of Mr. Jacoby.

  1. Wind and solar are not the cheapest forms of power, no matter what the reduction in the cost of the devices (turbines/panels). Extensive multi-billion-dollar infrastructure, transmission/distribution lines and appropriate 24/7 dispatchable conventional power plants must be part of the system (typically Combined Cycle ‘peaking’ Natural Gas plants) for wind or solar to operate on the grid. The Energy Return on Energy Invested in wind/solar is extremely low.

 

  1. Wind and solar cannot be compared as “apples to apples” with coal, natural gas, hydro or nuclear because they are intermittent forms of power; they also require massive areas of land; they are extremely low density. Prof. Michael J. Kelly of Cambridge notes that due to the very poor Energy Return on Energy Invested, wind and solar cannot support even basic society, let alone one of higher education, culture and aviation.  He calls it ‘total madness’ to continue going down this path.[5] At best, wind and solar are supplemental; with specific applications in some cases for remote locations or non-grid applications.

    mj kelly EROI threshold table lessons from tech

    Graph from Prof. MJ Kelly’s paper showing that wind and solar do not meet the economical threshold to support basic society. See footnote 5.

 

  1. Solar is an energy sink in Canada; anything north of 35 N latitude is an energy sink location for solar panels. The objective of wind and solar is supposedly to reduce CO2 emissions – however they simply drive up the cost of electricity.  Ontario Professional Engineers report that adding more wind and solar to their grid will also drive up CO2 emissions! What has happened in Europe is that industries have simply left for places with no environmental regulations – like China – so ‘reducing’ emissions in Europe to increase them in China.  In the case of Germany, emissions have risen because they have had to add more coal plants for cheap baseload to back up the addition of so much wind and solar to the grid. To get an idea of the additional costs for infrastructure, the recent paper “Burden of Proof: A comprehensive review of the feasibility of 100% renewable-electricity systems” [6] (Heard et al 2017) offers this shocking insight: “In Germany where penetration of solar photovoltaic systems is the highest in the world, voltage overloading is leading to grid reinforcement requirements expected to cost €21–27 billion [E-bridge consulting cited in 96].”

 

  1. In recent email correspondence with Robert Lyman on the topic of renewables he wrote to me: Renewable energy (wind, solar, geothermal and biomass) would not provide a single kWh of electricity if it were not for major government subsidies. The subsidies begin at the research stage, and continue with production, siting, regulation (i.e. exemptions from the environmental review processes that conventional energy projects must undergo), exemption from local government taxes and land use planning requirements, government mandates to utilities (whether privately or publicly owned) to purchase them regardless of cost, tariff practices (e.g. feed-in-tariffs), income tax exemptions, forced backup by fossil fuel plants (i.e. cross subsidization by other utility generators tolerated by public utility commissions) and, in the case of solar, utility buy-back of surplus power so that all other ratepayers must pay the costs. Without massive subsidies, there would be no renewables.” (Note: These comments apply to Ontario most specifically, and broadly to other jurisdictions with some variation.)

 

By contrast, in Canada, fossil fuels are not subsidized, they provide the basic by-product elements for thousands of useful products and millions of jobs, and they return billions of dollars to governments in terms of taxes. None of this is true of renewables.

shutterstock_92717938.jpg

Image licensed from Shutterstock for Friends of Science report “Keep Canada in the Black”

 

Surely this important context should have been presented to the audience.

  1. Mr. Jacoby suggested that soon self-driving, electric vehicles would dramatically change the car market and lead to a substantial drop in oil production/consumption.  Regarding electric vehicles, again, the tale is told by the numbers. Robert Lyman has summarized material from International Organization of Motor Vehicle Manufacturers (OICA) and Clean Technica on vehicle numbers/trends:[7]
  • Of 907 million personal vehicles on the road worldwide in 2014, 405,000 were EV’s. EVs constituted 0.04 % of the PVs on the road globally.
  • Sales of all-electric trucks and buses are negligible.
  • Of 88 million new vehicle sales in the world in 2014, 307,000 were EVs. That is, the EV share of new vehicle sales was 0.35%. In 2015, that probably rose to one half of one percent.
  • To reach 60% of present PV sales by 2040, EV sales would have to increase to 120 times today’s level.
  • The potential growth in total vehicle sales globally is immense, especially in Asia, the Middle East and Africa. The likelihood that EV sales will constitute 60% of the much-increased sales of all vehicles by 2040 approaches zero.
  • Internal combustion engines, powered by petroleum fuels, will be the dominant source of motive power for a very long time.

 

  1. Despite Mr. Jacoby’s claims that we could simply electrify our vehicles, and his reference to Tony Seba of Stanford (author of “Clean Disruption of Energy and Transportation – How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030”), that we will be all on automatic self-driving electric cars within a decade, this is highly unlikely. An article in the Jan. 2017 edition of American Scientist Sigma Xi Society magazine and a letter to the editor the following month discuss the challenges of integrating such vehicles into society – and there are many.[8] As well, energy commentator Euan Mearns demonstrates, in an example for the EU, that societies would have to concurrently add many more terawatts of conventional power generation for fully electric vehicles and upgrade the grid for billions….trillions of dollars.[9] Not to mention, at present there is no viable alternative to diesel for heavy hauling transport.

 

  1. Jacoby made passing reference to battery storage as a means of resolving the issues of intermittency of wind/solar, referencing Mr. Elon Musk’s work on the PowerWall and large battery projects. According to energy commentator Euan Mearns, battery storage is a ‘Holy Grail,’ far from being able to meet market needs, far from market ready, and if technical issues could be overcome, costly beyond measure.[10]  Some excerpts of his commentary:
  • Battery storage needed to convert Germany’s 2013 solar generation to baseload: $800 billion, about 13 times the $66 billion cost of installing the ~33GW of solar capacity involved.
  • Battery storage needed to convert solar generation equal to a year of Hinkley nuclear generation to baseload: $700 billion, about 28 times the ~$25 billion cost of the Hinkley (UK nuclear) plant.
  • Battery storage needed to convert solar + wind generation equal to a year of Hinkley nuclear generation to baseload: $350 billion, about 14 times the cost of the Hinkley nuclear plant.
  • Battery storage required to convert one month of UK wind generation to baseload:up to $500 billion, over twice the $200 billion cost of the ~100GW of wind capacity involved. (Note 1: storage requirements for a complete year would likely be significantly higher. Note 2: the lower-storage options discussed in the “estimating storage requirements” post are achieved by increasing wind capacity and curtailing large amounts of wind power.)

 

  1. Jacoby said that Saudi Arabia was demoting oil. Perhaps they are, but on the scale of ‘climate laggards’ in the world, they are at the bottom, while we Canadians are at the top of the pile in terms of renewable energy installation, generation and consumption!  None-the-less, we still require conventional fuel – especially for transportation and heating. We Canadians live in a climate of significant extremes of cold plunging down to -40C/F in winter; rising to +35C/95F in summer. We Canucks are challenged by sparse population and vast distances for our transportation and supply chain.  The Saudis are a competitor to Canadian oil and gas and not a role model in terms of climate change or renewable energy. [11] You would think that with all that sunlight and the Saudis would have already covered the desert with solar panels and proven its worth. Not so much.

Euan Mearns mix of energy gen in countries kim d sent link

Figure 3: Electricity generation by source as percent of total electricity generation. G20 countries, 2015. Hydro, nuclear and wind, solar etc are the low-carbon sources. Thermal generation is dominantly coal and gas.

In closing, I found it very odd that Canada’s Energy University – the University of Calgary – hosted a presentation that appeared to misreport the facts on renewables and conventional energy use world-wide.  No matter how many renewables are built, they all rely on masses of fossil fuels throughout the process of mining, manufacturing, transportation, installation and operation – along with typically a need for Combined Cycle Gas Turbine power generators to back up the grid 24/7.  These ‘peakers’ also offer the best earnings for utility companies, thus the intermittent nature of wind and solar becomes the ‘generator’ of profits for companies and investors – but a burdensome debt for consumers who pay the subsidies on all fronts, the integration costs, transmission lines, carbon taxes, coal phase-out costs, and then – the higher power prices. The result for all these costs is a less reliable power grid.  Blackouts and power dips and surges, once the sign of a developing  nation is now emblematic of nations with widespread wind/solar integration.  Surely we should accept the “Lessons Learned” by others and not go down this path. Should this not be the lesson being taught at a business school, at an energy university?

wind solar prices and power costs EU

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[1] http://blog.friendsofscience.org/2017/06/09/the-cop21-agreement-just-the-facts-please/

[2] http://blog.friendsofscience.org/2017/05/10/can-canada-survive-climate-change-policy/

[3] http://blog.friendsofscience.org/2016/11/14/facts-and-fallacies-on-world-fossil-fuel-use-vs-renewables/

[4] http://blog.friendsofscience.org/2017/10/16/clean-energy-canada-and-genenergy-are-just-kidding-you/

[5] https://www.cambridge.org/core/journals/mrs-energy-and-sustainability/article/lessons-from-technology-development-for-energy-and-sustainability/2D40F35844FEFEC37FDC62499DDBD4DC/core-reader

[6] http://www.sciencedirect.com/science/article/pii/S1364032117304495

[7] http://blog.friendsofscience.org/2016/12/11/a-tale-told-by-numbers-world-vehicle-trends/

[8] https://www.americanscientist.org/article/setbacks-and-prospects-for-autonomous-vehicles

[9] http://euanmearns.com/how-much-more-electricity-do-we-need-to-go-to-100-electric-vehicles/

[10] http://euanmearns.com/the-holy-grail-of-battery-storage/

[11] http://euanmearns.com/electricity-and-energy-in-the-g20/

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1 Comment

  1. That is a measured, accurate and well considered opinion Michelle.

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