Hazards Ahead – Speed Bumps on the Road to Decarbonization – Part 2

EXECUTIVE SUMMARY

In this article, I (Robert Lyman) examine the technological and cost barriers to the conversion of much of the world’s economy to use electricity as its primary energy source in place of fossil fuels.

Electricity Storage

Utilities that have a large share of wind and solar energy in their generation mix must ensure that supply is available during the seasons when production from these sources in low. Without thermal power generation to call upon, proponents believe that grid-level electricity storage, in the form of pumped storage (from reservoirs) or batteries will solve this problem. Pumped storage provides about 97% of grid power storage in Canada and the United States. Expansion of pumped storage reservoirs and facilities is possible, but there are relatively few sites available that would be suitable for it. In 2018, grid-scale battery storage in the United States provided about 1 GW-hr of capacity.

Storage is expensive. Pumped storage costs about U.S. $2,000 per kilowatt and grid-scale battery storage costs about $2,500 per kilowatt for a discharge duration of two hours or more. The longer the storage is needed, the higher the cost. Roger Andrews, a geophysicist with world-wide experience in the energy and mining industries, has estimated the combined wind and solar levelized cost of electricity without storage to be US $50/MWh and at least US $700/MWh with it. His estimates are in a range similar to that of the Clean Air Task Force (a Boston-based energy think tank), as reported by the MIT Technology Review. Battery storage, in short, is not an option that will ensure an affordable energy future based on high levels of renewables generation.

Electrification of the Light Duty Vehicle Fleet

By 2019, battery electric vehicles (BEVs) constituted 0.77% of the global light duty vehicle fleet and only about 1% of vehicle sales. Ignoring the slow rate of EV market penetration, several countries and sub-national jurisdictions have publicly committed to eliminating sales of internal combustion light duty vehicles as early as 2035.

Recharging a BEV with a 64-kilowatt battery at home with a level II, 240-watt charger requires up to ten hours, which can be done overnight. Not everyone will have access to a home charger. Electric vehicle owners living in a town house, row house or an apartment without access to a level II charger would have to rely entirely on the public fast-charging network. The significant number of people who park their cars on the street would also be dependent on the public fast-charging network, which in most countries is quite immature.

At the end of 2019, the U.K. had around 100,000 BEVs, representing about 0.3% of the light duty vehicle fleet (Gautam Kalghatigi ). These numbers would have to increase by at least 300-fold if the U.K. government is to replace all light duty vehicles. Further, if one were to assume a (very unlikely) 100-fold increase in BEV numbers to 2030 to 10 million, this would represent only 27% of the light duty vehicle fleet; 85% of U.K. transport would still rely on internal combustion vehicles. In 2019, 37,800 BEVs were sold in the U.K.; at this rate it would take 263 years to reach 10 million units.

The Electrification of Railways

The electrification of freight railways in the United States and Canada would require building and maintaining a high-voltage catenary system (an overhead system or wires along the railbed) that, within the United States alone, would span close to 140,000 miles in a wide variety of geographic locations. This probably would require delivering electricity through thousands of rail tunnels and rebuilding major bridges to provide clearance and support for the catenary wires.

Complete electrification would require conversion of 140,000 miles of rails, so the minimum direct capital cost would be in the order of $280 billion and the probable cost much higher. To that should be added the cost of replacing the more than 24,000 Class 1 locomotives in the existing fleet, which according to the Association of American Railways would be close to $100 billion. This does not include the cost of adding the electrical generation capacity that would be needed, for which no current estimates are available. If the cost of converting the present system to an electrified one were placed on the current industry, it would impose financial risks that many would be unwilling to accept. That means the conversion would have to be funded in part or in whole by governments, with the costs and risks largely borne by taxpayers.

The Electrification of Residential Heating and Cooling

The best studies of the probable costs of decarbonizing housing have been done in the United Kingdom. A major pilot project there concluded that emissions could be reduced by 60% for an average expenditure of 85,000 pounds (Cdn $146,000), and by 80% for an average expenditure of 135,000 pounds (Cdn $231,000). Assuming that these costs could be significantly reduced through a national effort, Professor Michael Kelly concluded that most existing U.K. residential housing stock could be retrofitted for a cost of about 70, 000 pounds each, or 2 trillion pounds (Cdn $3.43 trillion). In 2016, the Energy Technologies Institute estimated the cost of “deep retrofits” of the U.K. housing stock was more than 2 trillion pounds. In 2018, the Institute of Engineering and Technology published figures of 80,000 to 90,000 pounds per home. It is clear that only a small fraction of British households could afford such a cost. Taking into account the cost of adding electricity generation based on wind, and including heat pumps, the cost per house could rise to 150,000 pounds (CDN $257,000) or a national total approaching 4 trillion pounds (Cdn $6.85 trillion).

The Feasibility of Meeting the Mineral Supply Requirements

Mark Mills of the Manhattan Institute has examined the physics of fueling society, including the potential for wind, solar and biomass energy sources to meet the energy requirements now met by conventional energy sources. One of his key findings was that building wind turbines and solar panels to generate electricity, as well as batteries to fuel electric vehicles requires, on average, more than 10 times the quantity of materials, compared with building machines using hydrocarbons to deliver the same amount of energy to society.

In May 2021, the International Energy Agency (IEA) issued a report on “The Role of Critical Minerals in Clean Energy Transitions”. The report projected that the demand for key minerals such as lithium, graphite, nickel, and rare-earth minerals would explode, rising by 4200 percent, 2,500 percent, 1,900 percent, and 700 percent respectively, by 2040. The world does not have the capacity to meet such demand and there are no plans to fund and build the necessary mines and refineries. In addition, sharp increases in demand for these metals will raise commodity prices, which in turn with raise the prices of many other goods. It takes over 16 years for mining projects to go from discovery to first production. If countries started tomorrow, new production for these materials might begin after 2035. This places into context the claims by the governments of the United States, the United Kingdom and Germany that they will have carbon-dioxide-free electricity by 2035.

There are significant but often ignored security risks. The top three producers of three key “green” energy materials control more than 80 percent of global supply. China’s share of refining is about 35 percent for nickel, 50 to 70 percent for lithium and cobalt, and almost 90 percent for rare earth elements. Russia is in a dominant position in the supply of natural gas to western Europe. By comparison, the top three oil producers, including the United States, account for less than half of world supply. The most important security risk of all resides in the possibility that, having completely electrified western economies and then achieved high levels of reliance on wind and solar energy for the needed generation, there might be major interruptions in power supply because of weather, the failure of transmission systems, cyber-attacks, or sabotage. The economies of western countries would be at risk of severe and prolonged blackouts, with no alternative capacity available.