Holistic Approach To Energy (Technology Issues)

Includes: TM, TSLA
by: Zoltan Kiss

Holistic approach takes an overview of the transformational changes in the energy industry as it moves to renewable energy generation from the use of fossil fuels.

For maximum environmental benefit, we analyze an ultimate renewable energy scenario, where all sources of energy are led back to Solar PV.

The main users of energy can be grouped as stationary users and mobile users. The suppliers of energy can be central (utilities), and distributed generators (microgrids, user-supplier).

The optimum technologies are discussed both for stationary and mobile applications.

The role of renewable hydrocarbon (RHC) and renewable hydrocarbons from atmospheric CO2 (RHC-ACO2) has advanced as the best replacement route for fossil fuels.

This article is the third in a series, outlining an energy transformation in the 21st century, where the world economy is moving from a fossil fuel based energy supply to a clean renewable Solar Photovoltaic (SPV) based energy. In the first article, the cost evolution of different energy sources are compared, with the conclusion that by 2020, SPV will be the lowest cost energy generation everywhere in the globe. In the second article, the growth forecast of this industry is quantified and the implications of central versus distributed electricity generation is recognized. In this essay, the holistic nature of energy is used to examine the many different consequences for our lives.

It is not by accident that hydrocarbons are used as the preferred energy carrier for our civilization. At a great cost, the cycle and structure was established to bring this portable energy in its various forms from its extraction deep in the earth to the user. It took hundreds of millions of years for the sun's energy to convert the CO2 atmosphere of the earth, using hydrogen from water, into different forms of hydrocarbons, leaving oxygen that we breathe in its place. Then it took another several hundred million years to bury these hydrocarbons as deep into the earth as possible. Then along comes man and his civilization and it only takes him an instant (a few hundred years), on this cosmic scale, to extract and burn much of this heavenly treasure and reconvert the oxygen we breathe back into CO2.

As throughout history, man's inventiveness again has enabled us to avoid the crisis created by excessive use of fossil fuels. Developments in SPV electricity generation are giving us the lowest cost energy source, which in turn enables us to create affordable renewable hydrocarbons, which should enable us to transition into a clean energy future with minimum waste of the existing infrastructure. This essay hopes to outline the guidelines, and how best we can come to this clean energy future while everything changes and everything remains the same.

Holistic approach to the grand energy transformation from the age of fossil fuels to the age of renewables considers and optimizes all the interdependent elements of the new energy industry for the common good. In the process, a course is mapped out, where the environment will be protected, the efficiency of SPV generation and photosynthesis will be maximized, and the sharing of the societal benefits in job creation, in wealth creation and the use of the sun's energy will be equally secured for all. The article takes for granted that the lowest cost electricity generator among the renewables will be SPV. The holistic approach of the present thesis is divided into two essays. In the present essay, the aspects of the technological effects are described, while in a second essay, the social implications will be discussed.

With the holistic view, comes the necessity of facing the consequences of global warming. For the moment, let us assume that the reader accepts the existence of global warming and takes it into consideration in planning the energy supply of the 21st century. A recent study funded by Google (NASDAQ:GOOG) (NASDAQ:GOOGL) presents us with an inescapable conclusion. Since the half life of CO2 is approximately 100 years in the atmosphere, the present effects of global warming will not improve with even 100% renewable energy use, unless we start withdrawing the CO2 from the atmosphere. This is the focus where our R&D and politics will have to be centered. This is the basis of the necessity for Renewable Hydrocarbons from Atmospheric CO2, RHC-ACO2, research and development. Of course, it does not abate the urgency of drastically reducing the new CO2 we allow into the atmosphere, it just further brings home the need for action on both fronts.

Since we are betting our future on SPV generation, let us just briefly examine that there are no catastrophic limitations affecting our environment, as 10 billion people on earth will get most of their energy from the sun through SPV. We assume that the 10 billion people will all have access to the same amount of energy as the average person uses in the US today. This energy is approximately 100,000 kWh/year/person. This includes all personal, commercial, industrial energy use, whether it is in the form of electricity or fossil fuel.

The total energy consumption is forecast to be 1 x 10(15) kWh/year, covering an area of 2 x 10(12) square meters, or 2 x 10(6) square kilometers. If the US population remains about 5% of world population, 100,000 square km will be covered with PV, about 1% of the area of the US. Similarly, within the accuracy of this estimate, it is safe to conclude that about 1% of the earth land area is needed to provide all the energy from the sun for earth with a 10 billion population.

A case can be made that in our lifetime, in the 21st century, this energy transformation from fossil fuels primarily to SPV generation will be the largest economic event. An economic transformation of the energy industry will involve a cumulative $100 trillion investment over a 50-year period. We want to make sure that this will be a seamless transformation as far as possible, with the minimum cost and fair gain for all.

This energy transition began in the beginning of the 21st century and cumulatively less than 1% of the industry has changed over to SPV, as of 2015 (Solar 1). At the end of 2015, SPV will represent a cumulative 200 GW of electricity generation worldwide. There is sufficient history to give us guidance of what is going well and what we have to watch out for as we move into the industry in (Solar 2). The main tasks still to be fulfilled are:

i. The cost of SPV generation to be further reduced in the next decade to $0.02 to $0.03 per kWh;

ii. Appropriate storage technologies for the different applications to be identified and developed;

iii. Technologies for electric vehicles, and EVs to mature, including a seamless transition to EV fueling stations;

iv. Technically efficient introduction of microgrids into the national energy supply have to be identified, leading to a harmonious interconnection of the distributed microgrids with the central grid, resulting in the "Smart Grid"; and

v. The development and commercialization of RHC and RHC-ACO2 has to be advanced.

All the goals of the holistic approach to energy culminate in the necessity to develop Renewable Hydrocarbons from Atmospheric CO2, or RHC-ACO2.

Further Developments Of SPV Technology

In the age of Solar 1, c-Si technology was developed and commercialized to a level, where 22% efficient c-Si modules are produced commercially. The price of the modules are under $1.0 per watt, and systems can be installed at a cost of $1.60 per watt. This brings the cost of SPV electricity generation to $0.06 per kWh in areas of insolation of 2000 peak sun hours per year or greater.

C-Si efficiencies at 22% are near their theoretical limit. Further development can yield only marginal gains, but SPV technology is capable of reducing further the cost of SPV electricity by at least an additional factor of three, by increasing the terrestrial module efficiency to over 40% for thin film based SPV modules. The US PV industry e.g. SolarCity (OTCPK:SCTY) is talking about a Gigafactory of c-Si production. This avenue against a 60 GW Chinese manufacturing capacity is not likely to be competitive and bring back PV module manufacturing to the US. We have to realize that the owner of the future PV module manufacturing facilities will be the owner of the future oil wells and we should bring all our economic powers to bear. The US should make the utmost effort to develop the next generation of PV technology and keep the production capacity and jobs here.

The existing energy sources, both for electricity and for transportation, have been centrally owned and controlled by large corporations. The distributed nature of sunshine lends itself for a decentralized generation and ownership such as represented by microgrids.

The advantages of the microgrid distributed power are:

  • The lowest cost SPV electricity generation is by user owned microgrids. By eliminating two unnecessary middle men, the utilities and the third-party lease owners, the savings can be 50%.
  • The energy supply is not as vulnerable to terrorism, cyber attacks and the elements as the electricity from the central grid is.
  • The efficiency of SPV generation within the microgrid is about 25% higher than through the grid interactive system, and shutting the central grid down does not shut the SPV down.
  • Finally, by tying SPV generation to large central utilities and third-party lease financing companies, the user will continue to pay rent for the sun. Beyond the rent payments, the US model also increases the cost of SPV electricity by at least 50% compared to the European prices.

In the US, we have installed so far 10 GW of SPV, almost all utility interactive. The majority of owners are either the utilities or third-party financiers. The last example is the lease financed residential installations. The average cost of the installed system over the past 10 years was about $6 per watt. Of the $6 per watt, at least $2 per watt was subsidized by taxpayers (or ratepayers), amounting to $20 billion. This $20 billion migrated to the suppliers of capital. As the industry grows in the next decades by 1000 fold, this wealth transfer could run into trillions.

Storage Technologies For Renewable Energy

With more than 100 GW SPV installed worldwide, the rate of growth of further renewable energy development is definitely limited by a lack of suitable energy storage technologies. To be able to penetrate all the applications now filled by fossil fuels, storage has to be found for at least three different applications:

i) To satisfy the daily load curve of electricity supply;

ii) To solve the issue of seasonal variations in the need for electricity, including heat supply;

ii) To find a renewable energy produced fuel for transportation.

Renewable energy for home use

In most parts of the world, the daily electrical load curve is only partially covered by SPV generation. In California for example, 40% of the load, mostly used for air-conditioning, is outside the time of SPV generation. Technically, this can be solved by the use of batteries, but it is a question of cost. Seasonal variation in energy use is a further major challenge. We either have to take care of the seasonal variation with seasonal energy storage, or we have to oversize the SPV generation for one of the seasons. This can be an economic solution, if the generation cost of kWh is lower than the cost of storage. If we use excess capacity of generation to solve the seasonal load curve variation, then we have to be able to sell the excess generation in one of the seasons. This is a further argument to stay connected to a smart grid. Of course, the excess SPV capacity can also be taken care of by using it to generate some transportation fuel at the site of the microgrid.

Figure 1 shows the schematic diagram of a stand alone microgrid with both battery and compressed hydrogen storage. Compressed hydrogen is a suitable interim solution. This can be produced locally with water electrolysis. As the ultimate solution is to use liquid RHC in transportation, this would also be the best solution for seasonal storage. Finally, to produce this with the energy generation of the local microgrid would create the most flexible energy supply.

Figure 1 Schematic diagram of a Renewable Energy Box, REBOX

For stand alone microgrids, such as a residential home, the best selection from Table 1 is NiFe batteries for daily load variation and compressed hydrogen for seasonal storage. To reduce the amortization cost of batteries, the number of usable cycles becomes most important. This makes the NiFe batteries specially suitable for the microgrid applications to follow the daily load curves. For the seasonal load variation, compressed hydrogen is a practical solution today. The microgrid SPV generated electricity is used to generate H2 by electrolysis of water, and a dedicated compressor puts the H2 into the local pressure tank. Subsequently, Hydrogen from the pressure tank is converted to electricity with a dedicated fuel cell.

Some of the electronic storage mechanisms are listed in Table 1. This is not a complete list of viable energy storage schemes. Hydrogen stored in solids, Boron hydride compounds and various metallic solids such as aluminum and silicon are all useable sources for renewable energy storage.

On the Table 1 below, five different storage mechanisms are listed.

A) The energy stored Li batteries

B) Energy stored in NiFe batteries

C) Hydrogen gas stored in high pressure tanks

D) Energy stored in formic acid, RHC

E) Energy stored in fossil fuels

The holistic approach to energy assumes that whatever fuel will be selected, it will be created with renewable clean energy, such as SPV.

Table 1

Storage medium Li battery NiFe H(2) RHC Fossil Fuel
Energy density (MJ/kg) 0.8 0.25 132 12 42
Energy density (MJ/l) 2.0 0.7 5.6 9 36
Storage cost ($/kWh) 1.02 0.05 0.35 0.1 0.1
Number of cycles 1000 10,000 n/a n/a n/a

Picking the winning technology for EVs

For transportation, we have to have energy densities close to those of fossil fuels. Even the highest energy density battery based on lithium-ion, is an order of magnitude lower than the energy density of fossil fuels. The 1,000 cycles life for the Li-ion battery is also adequate for EV application.

Most of the car companies have started to offer some form of non-polluting electric vehicles, or EVs. There is the pure EV, running on batteries as used by Tesla (NASDAQ:TSLA); the "Plug in Hybrid" or PHV, such as the Prius and Fuel Cell based vehicles; FCV, running on hydrogen fuel as compressed hydrogen, such as the Mirai by Toyota (NYSE:TM).

EVs are a much discussed topic today. Just in Seeking Alpha there are several articles on Tesla each day, with hundreds of comments following each article. The two primary proponents of battery powered EVs are Elon Musk of Tesla and Hans-Jakob Nausser of Volkswagen (VLKAY). They are both certain that batteries are the right technology and they just dismiss FCV competitors, such as Toyota. Our analysis finds FCV fueled by compressed hydrogen and a fuel cell, a compelling and superior intermediate solution until a liquid RHC based fuel becomes available.

A simple calculation for the Tesla battery EV and the Toyota Mirai FCV compares the cost of travel. In the case of Tesla, the battery pack is amortized over its life of 570 cycles or 120,000 miles. For the Toyota Mirai, the cost of the hydrogen pressure tank plus the fuel cell are amortized over the same 120,000 miles.

Note: For battery EVs, range is a real problem. For FCVs, the range can easily be extended. For both battery EVs and FCVs with compressed hydrogen, filling stations are an additional cost. For the ultimate EV, fueled by either RHC or RCH-ACO2, a non-polluting liquid fuel, coupled with a fuel cell and no CO2 emission is the best holistic solution. In this scenario, no change is required in the existing fueling stations.

Renewable Hydrocarbons, RHC, Or Renewable Hydrocarbons From Atmospheric CO2, RCH-ACO2

The fourth column of Table 1, under RHC, the renewable hydrocarbons, lists formic acid, or HCOOH. This is the acid that ants produce and it has a vinegary taste. A colleague of mine from RCA Labs, Dr. R. Williams, about 40 years ago, patented the electrochemical production of formic acid from CO2. Dr. Williams and his associate also have demonstrated the conversion of CO2 into formic acid and measured the efficiency of production.

Figure 2. The last five links of the hydrocarbon combustion chain

Figure 2 shows the last five steps of the combustion of hydrocarbons, ending in the CO2 gas. The Williams patent basically teaches us how to make the first step back up on the hydrocarbon chain from CO2 ==> HCOOH, using SPV electricity.

It certainly is an existence proof that hydrocarbons can be produced electrochemically using SPV electricity. There have been several publications and patents since that time related to the subject. I know at least of one commercial effort dedicated to the use of formic acid in the renewable energy cycle by Mantra Venture Group (MVTG).

If RHC is economical, that should be the fuel of choice for transportation. It could be the fuel in an FCV or a non-polluting combustion engine. Calculations based upon the Williams demonstration, as described in the patent, indicate that using formic acid as a fuel, produced by SPV generated electricity, will result in a competitive fuel cost in the vehicle with batteries or fossil fuel, with the added benefits of no pollution, no range limitations and the fuel is dispensable in existing petrol stations. The calculations are detailed on postfreemarket.net.

The next issue is to define the manufacturing technology of RHC for petrol and other high octane liquids, so as to go back up on the HC chain industrially.

Reforming on large industrial scale has been done for some time. The most notable process is the Fischer-Tropsch process that was the primary source of fuel during the Second World War both for the Germans and the Japanese. Recent cost calculations indicate that the F-T produced diesel oil can be competitive with crude oil at a price of $30 per barrel.

Of course, there are an infinite number of variations among the hydrocarbons to be designed for RHC. One example is to start with hexane, a liquid hydrocarbon, and to degrade it (oxidize spontaneously) to another liquid hydrocarbon in the chain, formic acid. This process gives up hydrogen and generates -496 kcal/mole free energy (the waste is water). In the reverse process, with the use of catalyst and appropriate solvents and added energy in the form of SPV electricity, the formic acid is reformed back to hexane. In the process, we are back to the original hydrocarbons again, without any pollution in the cycle.

In light of the issues raised in the Google study, this process has to be accomplished, where the starting CO2 is withdrawn from the atmosphere. The bases of the 21st century energy has to be SPV + RHC-ACO2

Disclosure: The author is long MVTG. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.