Saturday, October 6, 2012

Various transitions to future energy sources


I normally try to avoid making predictions about the future because there is only one true statement about predictions: as soon as you make a prediction about the future, it's wrong. Every prediction is inevitably wrong. Luckily, on average, humans are pretty good the making investment predictions that pay off (though, not always.) So, keeping in mind that there are many possible futures, I'd like to given some details into what I see as some of future paths for our energy technologies.  In each  topics I discuss below, the transition will be slow, but in each case, the technology can grow without government subsidies. The main thing to remember is that we live in a society in which most of our power plants sit idle. We live in a society in which our cars operate only roughly 1 hour a day (and many operate less than this much on average.) At 1 hr / day, that's a capacity factor of roughly 4%. We spend a lot of money on the engine, and then only use roughly 4% of the time. In the future, I expect to see our cars being used to generate electricity that can be directly used at our homes or be input directly into the electrical grid. Below are a list of some of the important changes I expect to see in the future:  (Note that the ideas here should not be construed as advice on into which particular companies to invest)

(1) Fuel cell vehicles that power our homes when they are parked in the garage
The use of our cars to power our homes will require that there is a reformer that converts natural gas into hydrogen. Luckily, this technology is already being developed by a variety of companies (including Honda and Nuvera.) Producing hydrogen in your garage from natural gas could rapidly change the economic viability of owning a fuel cell vehicle. The reason why producing electricity via your car could work is that (a) a fuel cell vehicle is extremely quiet, (b) the only emissions from the vehicle are water vapor, and (c) the emissions from the reformer are water vapor and carbon dioxide. The reformer runs fairly quietly because it doesn't need to be large since it runs throughout the day to produce the hydrogen. The exhaust from the reformer must be vented via a pipe to outside of the garage, but that's only so that you don't decrease the amount of oxygen in the garage. The reformer makes no local pollutants (i.e. no NOx, SOx, and particulates.) Initially, only a few multi-car families will likely purchase fuel cell cars. In the short-run, the driving force for buying a fuel cell vehicle will be to lower your electricity bills and to allow the family to fill up a car from home without having to go to the gas station. This will likely first take off in Southern California, where there are already a number of hydrogen refueling stations. Here's a list of existing hydrogen fueling stations. It's not a larger number stations, except in places like LA. In the long-run, once there is a critical mass of fuel cell vehicle owners, there will be a lot more options for filling your vehicle with hydrogen.
The reasons that I could see fuel cell vehicles really taking off in California are the following: (a) high electricity prices, (b) high gasoline prices, (c) reasonable natural gas prices, (d) favorable weather for aqueous fuel cells equipment...i.e. no freezing weather, (e) a number of celebrities who probably don't want to fill up their cars with gasoline at the pump, (f) net metering laws allowing people to sell their excess electricity to the electrical grid, and (g) a free-thinking, independent mindset of wanting to produce electricity at home rather than relying on an electricity grid that will likely become more erratic as the mandates for renewable energy increase.
So, it seems like CA has a lot of the right things in place for fuel cell vehicles to take off rapidly. What's missing is companies that will sell fuel cell vehicles and home-based NG-reformers. Though, this appears to be not too far in the future. Honda was the first fuel cell company to start leasing fuel cell vehicles in the US when they started a pilot-program in Southern California, and now it appears that Hyundai will be doing something similar with its Tuscon crossover vehicle, though this program will start in Europe first. In addition, Honda and Toyota have also recently confirmed launching fuel cell vehicles in 2015. My guess is that people in CA might only be a few years ago from being able to purchase a relatively cheap fuel cell vehicle and NG reformer. Another reason that I'm optimistic about the "fuel cell vehicle / NG reformer" combo is that interest rates for cars is so much lower than interest rates for power plants right now. (The reason is that if the people who take out the loan on the car/reformer end up defaulting, then the bank can take the car/reformer. You can't repo a power plant like you can repo a car/reformer and sell it to a new owner.)

 (2) Rapid expansion of home-based solar PV in California, Arizona, New Mexico, Colorado and Texas
I expect to see decreasing prices of solar PV in the future because there are a number of companies like Crystal Solar which are now using technologies in which the silicon is chemically deposited onto a substrate rather than being grown into a single crystal and then sliced into thin wafers. These technologies will likely bring down the cost of solar PV panels to $0.50/W (without installation and  in today's US dollars.) Once the cost of solar panels reaches $1/W (with installation), we will see solar PV take off in most major cities that receive a decent amount of sunlight. If PV panel costs reach $0.50/W, then solar panels might be cheap enough that the solar panels could be sold at stores and installed by the homeowner. Think about the number of people who would buy a $500 solar panel (1kW), a $200 smart-meter and a $100 4-year warranty at Home Depot/Lowes/Best Buy/Costco/Sam's Club, and then install the equipment themselves. Once you get the total price (including the smart-meter and the warranty below $1000), then people can start putting the solar panels on their credit cards. This makes financing the solar panels extremely easy.  (Given that panel costs are currently in the range of $700-$1000/kW from the best companies in the world, this scenario is probably five to ten years away from happening in places like California. Once you start mass consumption of the solar panels at Home Depot/Lowes/Best Buy/Costco/Sam's Club, you significantly reduce the logistical costs associated with power plant siting.)
It's important to put this $/kW values in context. The only fair way to compare the economics of solar energy is to do a full rate of return on investment analysis. However, for the purposes of simplicity, I want to point out that if the upfront capital cost (Capex) of solar PV from Buy/Costco/Sam's Club is $800/kW at 20% capacity factor on the homeowners roof, then this is like a $3200/kW Capex at 80% capacity factor. For comparison, the Capex for nuclear power plants is around $5000/kW at ~90% capacity factor.
We are already seeing in California that companies are starting to pop up that own the solar panels and agree to sell electricity to the homeowners at prices below the price of electricity from the grid. As the $/W of solar panels decreases and as the market moves to producing flexible solar cells that can be installed by homeowners, solar rooftop PV will likely grow rapidly and will force regulated utilities in places like California to have to compete with Big Box stores. My bet is on the Big Box stores to out compete the regulated utilities in California. In summary, I expect to see solar rooftop PV will grow rapidly in places like CA (where you can sell the excess electricity to the grid) because the price of solar PV panels will soon reach the price at which it can be sold in Big Box stores.
(3) Natural gas cars, trucks & buses that fill up at home or at gas stations that sell CNG
There are still a large number of cities (even cites that are in the middle of the Marcellus shale) whose bus transportation systems run off of diesel. Given the extremely low price of natural gas, it seems absurd that more cities aren't retrofitting their existing buses to store natural gas rather than diesel. The savings each month in lower fuel prices is greater than the monthly loan payment required on the loan to make the retrofits. (See Figure 1 in this 2012 report for fuel savings) The extra savings each much (i.e. saving in fuel greater than the loan payment) should be invested by the city into natural gas companies. This investment becomes a hedge against possible increases in the price of natural gas in the future.
But buses aren't the only transportation vehicles that should switch to natural gas. Honda now sells piston-based natural gas vehicles and you could purchase a small NG compressors so that you can fill up your vehicle at home. In the future, rather than a piston-based NG engine,  it will make sense in some states to have fuel cell vehicles with on-board NG reformer. In bullet#1, I discussed a hydrogen fuel cell vehicle that uses a NG reformer at home, but in places like Pennsylvania, one could also likely see the reformer being moved directly onto the car because there are more options for filling up your vehicle with natural gas than hydrogen.  Like in bullet#1, the car could be a net producer of electricity at your house because the vehicle would be connected to the home's natural gas lines. This means that the car could silently operate on hydrogen from reformed natural gas. In this case, when you pull your car into the garage, you need to hook three lines to your car: (a) an electrical connection, (b) a natural gas connection, and (c) an exhaust connection to outside the garage. [Note that in bullet#1, you only need (a) and (b) because the exhaust line remains connected to the reformer.]
The fuel cell vehicle with an on-board NG reformer is a particularly interesting vehicle because it could fill up from your home, could run silently while it is in the garage, and could produce electricity for your home and for your neighbors. Since this vehicle stores natural gas on-board rather than hydrogen, the options for fueling the vehicle away from home will be very different than for the hydrogen vehicle. The DOE/EERE decided a few years ago to stop funding research into on-board reformers. (At the time, this decision made sense, but now with cheap natural gas, this decision seems to be a bad one.) With the capability of powering your house via the hybrid fuel cell-battery power system. Your home is protected from a power outage! Even better, you probably would make a lot of money if there were a power outage because the price of electricity would shoot up and you would be able to sell the electricity from your car at a price much, much higher than the price you pay for the natural gas it takes to make the electricity.
(4) Conversion of existing coal fired power plants into natural gas combined cycle power plants and to waste-to-energy power plants
I expect that many of the coal-fired power plants that recently shut down or that will be shutting down will eventually be re-opened in the next decade using natural gas and/or municipal solid waste as the fuel. In places where there is a competitive market for electricity (such as the Mid-Atlantic states in the PJM market), I expect that many of these recently shut power plants will be retrofitted with natural gas turbines and/or new boilers that can handle municipal solid waste (MSW). Most of the piece of equipment at the power plant will remain the same, and of course, most of the workers at the plant can be re-hired since they are already familiar with the equipment and the permit process for the new plant will be significantly easier than for a green-field construction of a new power plant.
For the natural gas option, one would have to add a natural gas turbine and increase the electrical capacity of the wires and transformers at power plant. The old coal boiler is now the heat exchanger that captures the waste thermal energy, and which allows the power plant to meet the EPA's new regulation of emitting less than 1 lb of CO2 per kWh of electricity. Natural gas power plants without the waste heat exchanger and a steam turbine (i.e. NGCC) will be unlikely to meet the new criterion for greenhouse gas emissions. So, the existing air compressors, heat exchangers and steam turbines will likely remain at the plant. This means that the cost to retrofit the power plants will be significantly less than building a new power plant.
Another likely course of action will be to add a new combustion unit that can handle municipal solid waste. The coal boiler would stay as the heat exchanger that creates the steam to drive the existing steam turbine. The new combustion unit would have to be designed to handle municipal solid waste, which would be likely mixed with limestone to capture strong acid gases created in the combustion unit (such as HCl). Waste plastics have significant amounts of chlorine, and one way to capture the chlorine is to add solid bases like CaCO3. In order to handle municipal solid waste, it's likely that there will be some other filters required to be purchased and placed after the steam boiler. This includes particulate and heavy metal capture devices. (As you'll notice by following the link to a 1987 report, this industrial scrubber equipment is not new technology.) The retirement of old coal power plants means that there is now a very cost effective way of turning municipal solid waste into a source of electricity. Rather than spending the money on a new power plant, companies can purchase existing power plants and spend the money retrofitting them to capture particulates, heavy metals, and NOx.
(Depending on the price of natural gas and the price of carbon dioxide emissions, we may see some coal power plant retrofitted with greenhouse gas capture devices if the power plants are near CO2 pipelines or depleted oil/gas wells.)

In summary, in either option, people working at the power plant will continue to have jobs producing electricity. The only difference is that there will be significantly less generation of air pollution and greenhouse gases from the new power plant.

Bullets (#1,3,&4) inevitably beg the question: where will we get all of the natural gas to power our cars, trucks, buses, homes, and power plants? Here's a list of ways of increasing the production of natural gas to meet the expected increase in demand.

(5) Increased drilling and fracturing of tight shale formations to produce natural gas, ethane and natural gas liquids (propane, butane)
Since this is a hot topic right now, I'll just suggest that you follow one of the many links.
(6) Coal and waste to natural gas (and sequester the co-produced carbon dioxide)
Rather than directly combusting coal or municipal solid waste in power plants, another potentially economically viable option is to convert the coal and municipal solid waste to natural gas and carbon dioxide at locations where there is coal and municipal solid waste. The natural gas and the carbon dioxide would be piped away from the chemical plant so that there is no air emissions at the chemical plant (except for if there were an accident or perhaps during start-up/shut-down procedures.) Some of the natural gas would be used directly at the chemical plant to fill the gas tanks of the vehicles that deliver the coal or municipal solid waste to the chemical plant. This seems like a better idea than transporting the coal and municipal solid waste long distances to be combusted (or sent to a landfill) because it reduces the amount of air emissions into the atmosphere while likely being cheaper to implement.
We already have one site in the US that turns coal into natural gas and carbon dioxide. The natural gas is sold on the market and the carbon dioxide is piped to oil fields in Canada. The company is called the Dakota Gasification Company and the plant is located in Beulah, ND. While I have my own designs on how to turn coal and municipal solid waste into natural gas and carbon dioxide, there are a number of existing gasification reactor technologies available to turn coal and municipal solid waste into natural gas. Some companies, like GreatPointEnergy, directly convert the coal to CH4&CO2. Most gasification companies, such as GE, Shell, Sasol-Lurgi and others, convert coal/MSW into H2&CO and then reacting these gases in a separate catalyst bed to turn the gases into CH4 and CO2. At this point in time, the gas is cooled and the CO2 is separated out from the CH4 because it is a weak acid gas. The CO2 would be compressed and piped to a depleted oil/gas well and the methane (i.e. natural gas) would be sold on the market. Given the number of depleted oil/gas wells near major cities, a company could turn municipal solid waste from New York City into natural gas and carbon dioxide, and sequester the carbon dioxide in depleted oil/gas wells in New York State and Pennsylvania. There are also major cities located near the CO2 pipelines that links CO2 in Utah/Colorado with oil/fields in Texas and CO2 in Mississippi with wells  in Louisiana. (see map here) MSW from cities like Albuquerque, New Orleans, and Denver could be sent to a gasification reactor to be convert into natural gas and carbon dioxide, and then the CO2 could be sent right into existing pipelines. This way, there's no air emissions that the chemical plant, and therefore, the chemical plant will not be a major nuisance to its neighbors. In fact, the chemical plant should allow local residents free natural gas for their vehicles as a way of promoting a sense of community.
(7) Increased use of anaerobic digestion at wastewater treatment plants
Right now, most wastewater treatment plants in the US use aerobic digesters to remove chemical oxygen demand from waste water. This process consumes electricity because of the need to supply compressed air to the digesters. However, there are ways of turning waste water into pure natural gas. One option would be separate the methane from the carbon dioxide in the biogas. Right now, this option isn't being actively pursued because of (1) the low price of natural gas, (2) other inerts like N2 the biogas which are hard to remove, and (3) the low pressure of the biogas stream. Though, we might see in shift in the future to sending the biogas directly to a high temperature fuel cell, such as the Bloom Box or the Fuel Cell Energy's Direct FuelCell, rather than separating the methane from the carbon dioxide, hydrogen sulfide and nitrogen. This will depend on the price of electricity and the price of natural gas. In long-run, I think that Bloom will be able take over and grow the biogas market because (a) the device is infinitely quieter than the GE Jenbacher piston engine and significantly more efficient. Noise is a major issue at any chemical plant. As well, biogas-to-electricity efficiency is really important because anaerobic digesters are not cheap. 50% efficiency vs. 25% efficiency means that the anaerobic digester can be half the size for the same electrical output. Since the price of the anaerobic digester normally dominates the upfront costs of converting from aerobic digestion to anaerobic digestion, high temperature fuel cell equipment will likely allow this market to grow rapidly. (But this means that Bloom Energy has got to get its act together and start learning how to mass produce its equipment. Their current practices are antiquated and they are employing an extremely expensive labor supply. Lowering production costs will likely mean allowing Chinese companies to produce the Bloom Box, and then having it shipped to wherever it will be used. Once Chinese companies starts mass producing high temperature fuel cells and anaerobic digesters, the waiting list to purchase this equipment for waste water treatment plants will be extremely long.)

So, this is my list of likely energy equipment in the future. The trends are the following: (1) home-generation of electricity either via solar PV or NG-reformed low temperature fuel cells; (2) mass production of equipment either via smart-meters and solar PV at Big Box Stores or mass production of fuel cells in China; and (3) a switch to natural gas and municipal waste from coal. For those of you who work in the coal mining industry, you will still likely see continued employment in this field because of either shipments of coal to other countries or perhaps innovative uses of coal in the future. For example, see my post on using coal in farming. I expect to see an increased use of coal in farming because coal can increase the productivity of marginal croplands. While this idea might seem strange, coal (after having been chewed on by various fungus) is an excellent fertilizer for growing plants. It already has all of the sulfur, nitrogen and phosphorous that crops need to grow. We can use the stored energy in the coal without emitting acid gases, greenhouse gases or particulates into the atmosphere.
While all of these technologies are ramping up, I expect to see a slow trend away from oil in our vehicles. This is not because we are running out of oil. It's due to the increasing cost of producing oil and due to the fact that we will want a future in which our cars power our homes, and to do this, they will have to operate silently and they will have to be powered using the only fuel that is pipelined to people's homes: natural gas. I am quite optimistic about the future because there are a number of economically viable technologies that will allow us to grow the global economy without increasing our impact on the rest of life forms on the planet. So, I'll end on this note. Let me know your thoughts on any of ideas.

3 comments:

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