Released April 11, 2013 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Below is an interview with Michael Dale, Post-doctoral Researcher with GCEP, conducted by Mark Bebawi, Power Research Analyst for Industrial Info.
Mark Bebawi (MB):
Tell our members about the Global Climate and Energy Project (GCEP). What is the organization's purpose?
Michael Dale (MD):
GCEP was set up about ten years ago, primarily by researchers at Stanford and Exxon Mobil Corporation (NYSE:XOM) (Houston, Texas). The point was for industrial sponsors to leverage the funds they provide to research in Stanford in order to try to look into the future and carry out fundamental research on game-changing technologies to permit the development of global energy systems with significantly lower emissions of greenhouse gases (GHG). There are four other industrial sponsors at present: General Electric (NYSE:GE) (Fairfield, Connecticut), Schlumberger Limited (NYSE:SLB) (Houston, Texas), Toyota Tsusho Corporation (OTC:TYHOY) (Tokyo, Japan) and DuPont (NYSE:DD) (Wilmington, Delaware). Every year, GCEP has one or two general calls, sometimes worldwide but usually to Stanford, looking across all areas of our portfolio. Some of the researchers looked at carbon capture, but the bulk of the research is into solar: photovoltaics (PV), solar fuels and ways to convert electricity to fuels. From time to time, we do a specialized call as well. The latest one we did was on net negative carbon emissions. We held a workshop last year with the world's leading experts on net negative emissions, got together to discuss the issue, and from that we put out a request for proposals in that area. We are now going through the resulting proposals.
MB:
That brings me to my first questions about net energy, not net carbon. The article I came across where I first saw your name was saying that solar power is not going pay off its energy debt until perhaps 2020. Let's get beyond that headline; what is net energy and what goes into the production of a solar panel?
MD:
Basically, in order to produce energy, we have to expend some energy up front. In the case of PV, we have to extract and process the raw materials. In the case of silicon, we have to dig out the silica and purify it by raising the temperature to about 3,000 degrees Fahrenheit, or about 1,700 centigrade, to get the impurities out. Then, once we have the pure silicon, for crystalline silicon, we have to melt it again to get the crystalline structure, then it is cut into wafers and assembled into a panel. All of that is up front energy. Once you install the system, it can start producing energy and, after a certain amount of time--one to two years for crystalline silicon--it will have paid back the energy that was required to manufacture it.
MB:
So if there is a two-year payoff, where does the 2020 date come from? PV has been around for quite a long time.
MD:
Well, all of this energy cost comes up front for a PV system at the level of the device. The PV industry is doubling in size every two years or less, so the industry installs new panels before the previous panels have had time to payback the energy required to produce them. This means that the industry as a whole is in an energy deficit--it is consuming more energy than the installed panels are producing. The analysis that we did was based on some deployment probabilities, and we calculated that this energy deficit was going to come to an end sometime between 2009 and 2015; in the worst-case scenario, by 2020 the PV industry would pay back the energy debt incurred during its initial growth.
MB:
Does this include all the energy used transporting and installing the panels, all the cables needed, and so on?
MD:
Yes, it does include all that. All the lifecycle assessment data we looked at included all of the balance-of-system materials like inverters, grid connections, cables, support structure and so on.
MB:
The next obvious question is: How does PV compare with other technologies in the renewable field? You have a detailed paper out on this already, but put it into layman's terms and give us a comparison between PV, concentrated solar power (CSP), wind, etc.
MD:
A solar panel is generally about 100 watts. If you work out the energy cost on a per-watt basis, then PV and wind are in a similar range--about 1 to 2 kilowatts (kW) hours per watt of capacity. Wind is slightly better than thin-film PV. Crystalline silicon is more energy-intensive. CSP is between thin film and crystalline. Wind and CSP have a higher capacity factor than PV; for every unit of capacity installed, they will produce more electricity. So that means that on a per-unit of electric basis, the energy intensity of wind and CSP is lower than PV.
MB:
This conversation so far is about efficiencies and energy production, but not about cost.
MD:
Exactly, you can think of this in terms of the efficiency of the economic system that produces the technology, not the efficiency of the device. We're talking about the energy cost, not the financial cost.
MB:
Have you looked at comparing those costs--financial costs vs. energy costs--to see if there is a relationship?
MD:
I haven't done that comparison across these technologies, and the picture changes over time, but we did produce a model to track the energy cost of these technologies that is borrowed from the financial world, where they track the cost of PV modules over time. This is called the learning curve, or experience curve model. We found that the rate of learning was comparable between the energy cost and financial cost. Another comparison we looked at was the breakdown of energetic cost throughout the cycle--from the extraction of raw materials, to producing crystalline wafers, to producing panels to installing the whole system--versus the financial costs at each stage. What we found there was that about one-third of the financial cost comes in the final stage, when you already have the panels and want to install them into a plant, whereas only about 13% of the energy cost comes at that stage. The difference there is what are called soft costs. Things like permitting, licensing and labor. About half the energy cost for crystalline silicon is getting from raw silica to the stage of the wafer.
MB:
I think one of the big picture questions that a lot of people reading this will ask will be how these percentage numbers compare with fossil fuels. What is the long-term prognosis for renewable, and at what point with they be truly competitive with fossils?
MD:
That is a very good question. That is the paper I am working on at the moment.
MB:
Maybe we can talk again when you've finished it.
MD:
That would be great. I would say that the way I think about it is in terms of fractional reinvestment. The question is how much of the energy that is produced by the industry is then consumed by that industry. For society as a whole, we want that value to be less than 10% for an energy sector. When the financial cost of energy is greater than 10% of GDP we tend to have recessions or other bad economic effects. You can take that as a first-order indicator that the industry needs to be consuming less than 10% of its own output. The PV industry is consuming about 80% to 90% right now, but that is mainly because it is growing so rapidly. The wind industry is around that 10% number, meaning that it only consumes about 10% of its own output to fuel its growth. In terms of a direct comparison between fossil fuels and renewable, this is a difficult thing to measure, in no small part because our whole system is primarily based on fossil fuels.
MB:
I always feel like it is not a very fair to compare renewables and fossils like that, because fossil fuels are already there. We are not expending any energy to create the fuels, they exist already, but the problem is that they are finite.
MD:
Right, exactly. The main point that we're stressing is that this net energy analysis number is very positive news for the PV industry--that despite its rapid growth, it is producing a net benefit to society. We also think that is important to keep looking at this issue, because driving down energy costs will result in even greater benefit to society. To that end, we think we need to supplement standard economic analyses with this net energy picture.
Michael Dale
Michael Dale joined GCEP as a Post-doctoral Researcher in February 2011. Prior to this, he undertook his Ph.D. in Mechanical Engineering with the Advanced Energy and Material Systems (AEMS) Laboratory at the University of Canterbury, New Zealand. His doctoral thesis was "Global Energy Modeling - A Biophysical Approach," which married net energy analysis with systems dynamic modeling to study the interaction of the economy with the energy sector. He also carried out a number of community-based energy-related projects while in New Zealand.
Michael's research interests include the long-term, large-scale dynamics of the energy-economy system; the energy-return-on-investment (EROI) of energy production technologies and how this value effects the classification and development of energy resources; and the transition from fossil fuels to renewable energy sources. He also holds a Masters Degree in Physics and Philosophy from the University of Bristol, U.K.
Inside Power is a new series featuring articles, interviews and reports highlighting multiple aspects of the Power Industry. From trends in electricity generation, transmission and distribution, to discussions with public and private utilities, engineering, procurement and construction companies, and technology providers, Inside Power seeks to provide insight into how the industry runs.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Mark Bebawi (MB):
Tell our members about the Global Climate and Energy Project (GCEP). What is the organization's purpose?
Michael Dale (MD):
GCEP was set up about ten years ago, primarily by researchers at Stanford and Exxon Mobil Corporation (NYSE:XOM) (Houston, Texas). The point was for industrial sponsors to leverage the funds they provide to research in Stanford in order to try to look into the future and carry out fundamental research on game-changing technologies to permit the development of global energy systems with significantly lower emissions of greenhouse gases (GHG). There are four other industrial sponsors at present: General Electric (NYSE:GE) (Fairfield, Connecticut), Schlumberger Limited (NYSE:SLB) (Houston, Texas), Toyota Tsusho Corporation (OTC:TYHOY) (Tokyo, Japan) and DuPont (NYSE:DD) (Wilmington, Delaware). Every year, GCEP has one or two general calls, sometimes worldwide but usually to Stanford, looking across all areas of our portfolio. Some of the researchers looked at carbon capture, but the bulk of the research is into solar: photovoltaics (PV), solar fuels and ways to convert electricity to fuels. From time to time, we do a specialized call as well. The latest one we did was on net negative carbon emissions. We held a workshop last year with the world's leading experts on net negative emissions, got together to discuss the issue, and from that we put out a request for proposals in that area. We are now going through the resulting proposals.
MB:
That brings me to my first questions about net energy, not net carbon. The article I came across where I first saw your name was saying that solar power is not going pay off its energy debt until perhaps 2020. Let's get beyond that headline; what is net energy and what goes into the production of a solar panel?
MD:
Basically, in order to produce energy, we have to expend some energy up front. In the case of PV, we have to extract and process the raw materials. In the case of silicon, we have to dig out the silica and purify it by raising the temperature to about 3,000 degrees Fahrenheit, or about 1,700 centigrade, to get the impurities out. Then, once we have the pure silicon, for crystalline silicon, we have to melt it again to get the crystalline structure, then it is cut into wafers and assembled into a panel. All of that is up front energy. Once you install the system, it can start producing energy and, after a certain amount of time--one to two years for crystalline silicon--it will have paid back the energy that was required to manufacture it.
MB:
So if there is a two-year payoff, where does the 2020 date come from? PV has been around for quite a long time.
MD:
Well, all of this energy cost comes up front for a PV system at the level of the device. The PV industry is doubling in size every two years or less, so the industry installs new panels before the previous panels have had time to payback the energy required to produce them. This means that the industry as a whole is in an energy deficit--it is consuming more energy than the installed panels are producing. The analysis that we did was based on some deployment probabilities, and we calculated that this energy deficit was going to come to an end sometime between 2009 and 2015; in the worst-case scenario, by 2020 the PV industry would pay back the energy debt incurred during its initial growth.
MB:
Does this include all the energy used transporting and installing the panels, all the cables needed, and so on?
MD:
Yes, it does include all that. All the lifecycle assessment data we looked at included all of the balance-of-system materials like inverters, grid connections, cables, support structure and so on.
MB:
The next obvious question is: How does PV compare with other technologies in the renewable field? You have a detailed paper out on this already, but put it into layman's terms and give us a comparison between PV, concentrated solar power (CSP), wind, etc.
MD:
A solar panel is generally about 100 watts. If you work out the energy cost on a per-watt basis, then PV and wind are in a similar range--about 1 to 2 kilowatts (kW) hours per watt of capacity. Wind is slightly better than thin-film PV. Crystalline silicon is more energy-intensive. CSP is between thin film and crystalline. Wind and CSP have a higher capacity factor than PV; for every unit of capacity installed, they will produce more electricity. So that means that on a per-unit of electric basis, the energy intensity of wind and CSP is lower than PV.
MB:
This conversation so far is about efficiencies and energy production, but not about cost.
MD:
Exactly, you can think of this in terms of the efficiency of the economic system that produces the technology, not the efficiency of the device. We're talking about the energy cost, not the financial cost.
MB:
Have you looked at comparing those costs--financial costs vs. energy costs--to see if there is a relationship?
MD:
I haven't done that comparison across these technologies, and the picture changes over time, but we did produce a model to track the energy cost of these technologies that is borrowed from the financial world, where they track the cost of PV modules over time. This is called the learning curve, or experience curve model. We found that the rate of learning was comparable between the energy cost and financial cost. Another comparison we looked at was the breakdown of energetic cost throughout the cycle--from the extraction of raw materials, to producing crystalline wafers, to producing panels to installing the whole system--versus the financial costs at each stage. What we found there was that about one-third of the financial cost comes in the final stage, when you already have the panels and want to install them into a plant, whereas only about 13% of the energy cost comes at that stage. The difference there is what are called soft costs. Things like permitting, licensing and labor. About half the energy cost for crystalline silicon is getting from raw silica to the stage of the wafer.
MB:
I think one of the big picture questions that a lot of people reading this will ask will be how these percentage numbers compare with fossil fuels. What is the long-term prognosis for renewable, and at what point with they be truly competitive with fossils?
MD:
That is a very good question. That is the paper I am working on at the moment.
MB:
Maybe we can talk again when you've finished it.
MD:
That would be great. I would say that the way I think about it is in terms of fractional reinvestment. The question is how much of the energy that is produced by the industry is then consumed by that industry. For society as a whole, we want that value to be less than 10% for an energy sector. When the financial cost of energy is greater than 10% of GDP we tend to have recessions or other bad economic effects. You can take that as a first-order indicator that the industry needs to be consuming less than 10% of its own output. The PV industry is consuming about 80% to 90% right now, but that is mainly because it is growing so rapidly. The wind industry is around that 10% number, meaning that it only consumes about 10% of its own output to fuel its growth. In terms of a direct comparison between fossil fuels and renewable, this is a difficult thing to measure, in no small part because our whole system is primarily based on fossil fuels.
MB:
I always feel like it is not a very fair to compare renewables and fossils like that, because fossil fuels are already there. We are not expending any energy to create the fuels, they exist already, but the problem is that they are finite.
MD:
Right, exactly. The main point that we're stressing is that this net energy analysis number is very positive news for the PV industry--that despite its rapid growth, it is producing a net benefit to society. We also think that is important to keep looking at this issue, because driving down energy costs will result in even greater benefit to society. To that end, we think we need to supplement standard economic analyses with this net energy picture.
Michael Dale
Michael Dale joined GCEP as a Post-doctoral Researcher in February 2011. Prior to this, he undertook his Ph.D. in Mechanical Engineering with the Advanced Energy and Material Systems (AEMS) Laboratory at the University of Canterbury, New Zealand. His doctoral thesis was "Global Energy Modeling - A Biophysical Approach," which married net energy analysis with systems dynamic modeling to study the interaction of the economy with the energy sector. He also carried out a number of community-based energy-related projects while in New Zealand.
Michael's research interests include the long-term, large-scale dynamics of the energy-economy system; the energy-return-on-investment (EROI) of energy production technologies and how this value effects the classification and development of energy resources; and the transition from fossil fuels to renewable energy sources. He also holds a Masters Degree in Physics and Philosophy from the University of Bristol, U.K.
Inside Power is a new series featuring articles, interviews and reports highlighting multiple aspects of the Power Industry. From trends in electricity generation, transmission and distribution, to discussions with public and private utilities, engineering, procurement and construction companies, and technology providers, Inside Power seeks to provide insight into how the industry runs.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
