Charged Up

So who here actually believes the government (I don’t care – pick one) is going to close all the coal-fired power stations by 2020? Anyone? Don’t be shy, we’re all friends here. Well – I’m not, but that guy there is kind of friendly. And now he’s got your wallet. Nice one.

So nobody believes that the government (I really don’t care, honestly – let’s say it’s the government of Finland) is going to close all the coal-fired power stations by 2020. No. Of course not! Preposterous. I mean, all right, we might conceivably phase it out over a period of, say, 30 years, but… industry would need to be on board, and we have the economy to consider. OK, no problem.

Well, actually, that is a problem. It’s a teensy tiny massive thermonuclear fucking problem actually. Because according to the latest data, unless we reduce emissions by 80% – in other words unless we emit a fifth of what we do now – by 2050, global temperatures will inevitably cross the 2 degree celsius threshold for catastrophic climate change. Why 80%? Well, in the West, we have to compensate for the fact that the populous, developing nations such as India and China will only be able to cut their emissions by 50%. Yep, just a measly 50%! Gosh, we’re letting them get away with it, aren’t we.

And 2050 seems a fairly long way away doesn’t it. I mean, I myself will be 79. Bloody ages away. But the problem is: we’re not in a steady state here. We’re growing (well, recent economic hiccups notwithstanding). Let’s say we want growth to be about 2% year-on-year (as it was in, say, 2004), and here’s the one and only time I’m going to be thankful to the red-faced, sweaty, chalk-throwing git who taught me about compound interest in primary school: that means growth of 1.02 to the power of 41 for the 41 years between now and then. Which means the economy will be two and a quarter times as big as it is now.

125% increase in GDP. More than twice as many businesses, twice as many people, twice as much transport, twice as much food, water, electricity. So now our target is to emit one fifth as much as we do today, but to emit less than a tenth per capita, and somehow to do this whilst doubling the productivity of the country.

Well, I mean what? Short of a major war, there’s absolutely no way any government, even the government of Finland, is going to introduce sufficiently draconian legislation to achieve these targets. Put simply, it is not a government-solvable problem.

And just in case we’re all thinking of throwing up our hands and going and mowing the lawn:

…the great ice sheets of Greenland and Antarctica … hold enough water to raise sea level by about 70 metres. Until recently, their contribution to sea level rise was negligible, and the IPCC predicted that Greenland would contribute 12 centimetres at most to sea level rise by 2100, while Antarctica would actually gain ice overall due to increased snowfall. “A lot of new results have been published since then to show that this very conservative conclusion does not hold,” says Eric Rignot of the University of California, Irvine.

To study the ice sheets, Rignot and colleagues have combined satellite-based radar surveys, aircraft altimetry and gravity measurements using NASA’s GRACE satellite. They found that ice loss is increasing fast. Greenland is now losing about 300 gigatonnes of ice per year, enough to raise sea level by 0.83 millimetres. Antarctica is losing about 200 gigatonnes per year, almost all of it from West Antarctica and the Antarctic Peninsula, raising levels by 0.55 millimetres. “The mass loss is increasing faster than in Greenland,” Rignot says. “It’ll overtake Greenland in years to come.”

If this trend continues, Rignot thinks sea level rise will exceed 1 metre by 2100.

1 metre doesn’t sound much, but:

…about 60 million people live within 1 metre of mean sea level, a number expected to grow to about 130 million by 2100.

Much of this population lives in the nine major river deltas in south and southeast Asia. Parts of countries such as Bangladesh, along with some island nations like the Maldives, will simply be submerged.

According to a 2005 report, a 1-metre rise in sea level will affect 13 million people in five European countries and destroy property worth $600 billion, with the Netherlands the worst affected. In the UK, existing defences are insufficient to protect parts of the east and south coast, including the cities of Hull and Portsmouth.

["Sea level rise: It's worse than we thought", New Scientist, July 2009]

So back to those coal-fired power stations. Why am I all of a pother and flibber about them? Surely I should be more worried about cars? I mean, I do drive a G-Wiz for Christ’s sake (actually, it’s for sale).

Well, here’s the thing: power generation represents about a quarter of all greenhouse gas emissions. Road transport: about one-sixth. And that’s just in the UK – in the US the proportions are much greater. Assume everyone will be driving an electric car in 10 years’ time. Trust me, it will happen. In 2020 we’ll be explaining to our kids that yes, well we actually used to just fart poisonous gases out of our cars into the air, yes the air we brothe…  they’ll be looking at us like we just lit up a cigarette. All the energy to charge up those electric cars has to come from somewhere. Further assume no net efficiency gain (wrong, but whatever): In 2020, power generation will represent roughly 40% of all potential greenhouse emissions.

Put it another way: if someone, somewhere, could just come up with a way of putting the coal-fired power generating industry out of business, we could nearly halve our greenhouse gas emissions.

Put them out of business? A whole industry? That’d be like… that’d be like… Oh wait. I know what it’d be like.

It’d be like putting the ocean liner industry out of business. It’d be like putting steam trains out of business. It’d be like putting typing pools, fax machines, phone companies and the TV and music industries out of business. In other words, it’d be the result of innovation and economics. Not government intervention.

And of course, just like with the phone, TV and music industries, we’re not actually talking about destroying them wholesale. They’ll only be slightly irrevocably and fundamentally changed forever, driven by a different business model, and with very different people running them.

A different business model. That’s the crux of the issue. At present, it’s just too damn cheap to generate power from coal. And, predictably, the dirtier it is, the cheaper it is.

The basic economics of power generation are that the customer pays about 10-14p per kWh to the retailer. The retailer then pays about 4p per kWh to the wholesaler (the generator)[1]. So if the cost to the generator is more than about 4p per kWh, they’re going backwards. According to the above chart, only coal, gas and nuclear are profitable. This is why there is absolutely no financial benefit to any generator in moving to renewables unless there is a way of setting and keeping a price for carbon, something which has so far proven unsuccessful. At the prevailing market rate, the cost to a coal-powered generator of carbon credits to cover their emissions would be about 1.5p per kWh. The numbers just don’t add up.

But what if we cut out the retailer? If the generator sells directly to the customer, then all of these technologies generate a nice gross profit. And what if we massively reduce the cost of operating such a business by breaking up the grid into small neighbourhood grids, each powered by a small, local generator? These could readily be interconnected to provide redundancy, similar to the way the Internet works for routing packets around failed network links.

This is not merely the dribbling lunacy of a crazed eco-donkey, either:

As part of its energy efficiency programme [Woking Council] implemented its first CHP system in 1992 and the UK’s first small scale CHP/heat fired absorption chiller system in 1994 for which the Council won the CHPA 1996 CHP in Buildings Award, followed by a series of private wire residential CHP systems (the first and still the only systems of their type in the UK). What marks these systems out from any other CHP system in the UK is the direct sale of cogenerated heat and green electricity to local customers at a lower price than for brown energy.

[http://www.chpa.co.uk/about_us/profiles/woking.shtml]

In Woking, this already exists! And the most exciting phrase above is, “…at a lower price than for brown energy.” (Allan Jones, the genius behind the system, is now working to introduce similar micro-generation technologies in London).

The only challenge now is how to make it into a business that can scale. Disruptive change, when it happens, happens extraordinarily quickly. Remember Netscape? Seemed like those guys were the bedrock of the Internet. Seemed like they’d be around forever. All it takes is a little innovation and an open approach to standards, and the whole ballgame can change overnight.

So, if I’ve managed to whet your appetite, stand by for the next post when I get into the business plan in more detail.

On the other hand, if you’re sitting there whanging your thumb with a hammer to obtain release from the dreadful, dreadful tedium, then cease whanging. I’ve finished.

Notes

1. The wholesale market fluctuated enormously in 2008. For the 2009 calendar year to date, the average price has been about £41 per MWh.