Wednesday, July 27, 2011

Cherry-picking 'figures of merit' to suit your argument: On "Power Hungry" By Robert Bryce

This post is a critical (but humorous) analysis of the book Power Hungry by Robert Bryce. My goal with this post is to remind people that:   books like Power Hungry are what happen when we all can't agree on a meaningful figure of merit by which to judge electricity generating power plants. In the words of the Walter Sobchek, "This isn't 'Nam. There are rules, Smokey." There would be a lot more clarity in Robert Bryce's book if he used one simple figure of merit by which to judge all of the competing technologies discussed in this book. Instead, he uses different criteria throughout the book.

I started reading the book because of the catchy title "Power Hungry: The Myths of Green Energy and the Real Fuels of the Future." I thought that it might do a good job attacking the problems of intermittent energy technologies like wind power. However, I feel like I was taken on a roller coaster ride through the land of energy misinformation. Bryce included just enough good points to keep me interested, and just enough junk to make me feel bad for even picking up the book from the library. I feel like I've just been abused by a lot of facts. Like he put a bunch of heavy facts in a sack, and then beat me with the sack repeatedly. Then after the first beating, he stuffed a bunch of 'figures of merit' into another bag, and then hit me with this bag until I was bloody and unconscious. There are over ten different 'figures of merits' that Bryce discusses depending on whether he wants you to 'like' or 'hate' the particular technology he's discussing at the moment. And he often changes his mind on a technology from chapter to chapter. In some chapters, he's pro-solar and, in some chapters, he's anti-solar. He confuses the reader because he cherry-picks his favorite figure of merit from chapter to chapter.

Is the correct figure of merit we care about the 'energy density'?  Or is it the power density?  Or perhaps it's the price/kW-hr? But the price today or the price tomorrow? Or perhaps it's the amount of steel and concrete used? Or perhaps it's the amount of birds killed? Better yet, perhaps it's the ability to scale up the technology in the next decade? Or perhaps it's the efficiency?



As I've stated multiple times before, there is only one real figure of merit: the risk-adjusted, internal rate of return on investment that includes the average price/kW-hr that the technology can generate on an open market and that includes the price of environmental/economic damage due to emitting pollution. This figure of merit, and this figure of merit alone, should be used to determine what types of electricity power plants should be built. Not the power density, or energy density, or the system efficiency, or the amount of steel/concrete per MW, or the even number of birds killed (though we should pay if our technology kills birds. For example, according to the book, Exxon Mobil had to pay $600,000 in 2009 for killing 85 birds. This does seem a little extreme, though. That's almost $10,000 per bird! $100 per bird seems a bit more reasonable, and wind turbines should pay this fine, and it should be included when calculating the internal rate of return on investment of a wind farm.)

To be somewhat fair, Bryce is not writing the book for the expert in the field. He's writing the book for the average lay person who might currently believe that wind and solar will save the planet...and not cause poor people to go hungry or birds to die. And for bursting the bubble for the average lay person, this is a good thing. (If electricity prices increase, then people will die from hunger and if wind farms are built everywhere, then birds will die. The question is: will more people and birds die if we mandate renewable fuels and electricity, then if we continue doing what we're doing? That's the tough question to answer. We don't really even have an agreed-upon framework for answering this question.) The problem is that the figures of merit that Bryce puts forward (so that we can answer the question "what is a 'good' power plant?") are not valid figures of merit.  Power density is nice, but when it comes to investing in companies, the correction figure of merit is the expected rate of return on investment, not the power density or the energy density or the system efficiency.

The question is: why did Bryce write this book for a public audience?  It's not the public's job to pick the winner's and loser's. That's the job of the Independent System Operator (ISO.) The public's job is to demand open electricity-generating markets and to force our politicians to tax pollution. That's it. It shouldn't be our job to care about which technologies wins and which technologies lose. We have other more important things to think about (like work or exercise or math or science or making jewelry or raising kids or playing music.) Let's demand a better electricity market and demand a tax on pollution, and then force the government to stop picking winners (like corn ethanol) or losers (like natural gas before the 1980's...in which the government mandated natural gas prices, effectively preventing the industry from drilling new wells). I think that Bryce wrote the book because he was fed up (just as I am) with government's misguided policies over the last century when it comes to energy development. And for this, he should be thanked. My problem with the book is that he never used to words 'rate of return on investment' in his book. (as far as I remember)


So, here's my summary about the book. It's an interesting read, but don't expect to find answers. If you aren't an expert in the field of electricity generation, expect the book to pop some pre-existing bubbles, like wind power is a perfect source of electricity. Don't expect to find answers to the question: where should I be investing my money, time or effort? To answer that question, you need to have a criterion for judging different power plant technologies. And Robert Bryce fails to put forth a meaningful criterion for judging different power plants.  (Power density just won't do) What I'm hungry for is not power, per say. What I'm hungry for is large rates of return on investment. I want society to grow.

No comments:

Post a Comment