Why Wind is pitiful for most regions on earth

[Enthalpic + 1,496]

1 hour ago, Eyes Wide Open said:

Bringing jobs back to America.

 

Trade balance is getting worse not better:

https://tradingeconomics.com/united-states/balance-of-trade

 

"The US trade deficit widened to $54.6 billion in May of 2020 from an upwardly revised $49.8 billion in April, and higher than forecasts of $53 billion. It is the biggest trade gap since December of 2018 []

The deficit with China widened $1.9 billion to $27.9 billion."

 

 

[BradleyPNW + 282]

14 hours ago, Eyes Wide Open said:

You do understand that you have just endorsed Donald Trump. Bringing jobs back to America.

 

Donald told us he is the only one who can save coal jobs. 

 

[markslawson + 1,057]

19 hours ago, BradleyPNW said:

I used the Google example because it impacts skills clustering which is the contemporary value of cities. Historically, energy infrastructure followed labor. But now the type of labor that holds cities together -- highly skilled labor -- is decoupling from people. 

Energy intensity- the amount of energy required for each additional unit of GDP - has been declining for decades, and the labor intensive jobs industries have been shifting away from the western economies to Asian countries mostly. But there's no indication in developing countries that energy is shifting away from cities, so I'm now at a loss over what point you were trying to make. Perhaps I won't try to work it out.. leave it with you..  

[BradleyPNW + 282]

2 hours ago, markslawson said:

Energy intensity- the amount of energy required for each additional unit of GDP - has been declining for decades, and the labor intensive jobs industries have been shifting away from the western economies to Asian countries mostly. But there's no indication in developing countries that energy is shifting away from cities, so I'm now at a loss over what point you were trying to make. Perhaps I won't try to work it out.. leave it with you..  

Over the past 200+ years economic geography shifted from agricultural regions to cities. You can know when a country industrialized based on where their cities are built. Countries that industrialized early have cities in the heartland. Countries that industrialized more recently have new cities on the coast, they leapfrogged the heartland cities. Here's a journal article that explains it in detail: https://academic.oup.com/qje/article/133/1/357/4110418?fbclid=IwAR1EqacfcmKVc7O7jWXrWPuWI1Zx0u85fSkErugKvEY1i8t7Op0HZnSspqc

We're probably going to see economic geography shift again as computers start automating professional knowledge work. COVID might have already started the shift. No one knows how that will play out which is why it's a good idea to do scenario planning. 

[NickW + 2,714]

19 hours ago, BradleyPNW said:

Donald told us he is the only one who can save coal jobs. 

 

 

[0R0 + 6,251]

18 hours ago, BradleyPNW said:

Over the past 200+ years economic geography shifted from agricultural regions to cities. You can know when a country industrialized based on where their cities are built. Countries that industrialized early have cities in the heartland. Countries that industrialized more recently have new cities on the coast, they leapfrogged the heartland cities. Here's a journal article that explains it in detail: https://academic.oup.com/qje/article/133/1/357/4110418?fbclid=IwAR1EqacfcmKVc7O7jWXrWPuWI1Zx0u85fSkErugKvEY1i8t7Op0HZnSspqc

We're probably going to see economic geography shift again as computers start automating professional knowledge work. COVID might have already started the shift. No one knows how that will play out which is why it's a good idea to do scenario planning. 

I don't think that AI is actually any more than a productivity tool for the knowledge worker, as the data intake is doubling or more every year or so then they just need those tools to keep up, there are just not enough people to do the work.

The big shift I do see is that the knowledge workers are moving out of the cities into suburbia exurbia and small towns. They are now being hired wherever they happen to be living without having to relocate. That is ultimately breaking the real estate blockage of the big cities that has not managed to construct in proportion to jobs growth, thus causing atrocious rents, packed offices, absurd home prices and no ability to attract people at an affordable cost. That is because the construction gap has created a situation where the new worker is paying 50% of income for rent, that in a high tax state, thus after rent disposable income is often less than 30% of gross income. The HR value for the pay premium required for bringing  a new employee into an urban job in has been $40k (2017) and growing rapidly.and multifamily households are already at 50-70% in many Silicon valley towns, LA, SD, Seattle etc..

The most intense domestic US cause of income inequality is the real estate log jam of the coastal and other cities where one must go to be in high tech finance science etc.to get a job. That due to high energy costs in the 2010 turnover period when oil was ~$100 and above, that pushed workers and businesses into major cities and out of exurbs, marginal peripheral city neighborhoods, and the broad interior of the US. Locals blocked new construction in order to obtain higher bids for their real estate. Many "community" movements were using any possible excuse to block construction of new residential units. Thus the situation that in the extreme, that left only 25% of gross income after tax and rent for many in the cities. Particularly those with a cost of living index above 300%.

The Work from Home movement that got its kickstart with the CV19 actions forcing all to use the long available video and collaboration software is bringing waves of people leaving the city. The bite of high rents and taxes is going to be reduced substantially and leave the disposable income after rent or mortgage payment at something closer to 50% as the cities equalize with the broad country. The improvement in life for these workers and those who follow them out of the cities will be a shock in every way. If the Fed continues supporting the banks to keep their books available for this enormous draw on their lending capacity then this can start right now. Entire municipalities have already had their inventory of houses put into contract and new housing construction contracts are up from last year by a tremendous margin, at +50% y/y. Not just as a working out of delayed demand.

My formerly mostly boomer neighborhood has kids and young parents for the first time in two decades. The racial composition has become more diverse and by quite a margin.

This all depends on the Dems losing the election, as their ""green'" agenda would destroy the movement which is driven by cheap gasoline and unobstructed construction.

 

[Keith King 0]

Opportunities and Challenges Of A Balanced Energy Transition

Keith King and Jerry Kepes

 

Justified concerns about global warming have resulted in many companies and countries announcing aggressive targets to lower green house gas emissions. Renewables, such as wind and solar, are seen as substitutes for fossil fuels in pursuing this objective. Renewable energy has become increasingly cost competitive but are intermittent and need a "backup" system for times when they are not generating power.  Additionally, what is often not acknowledged, is the natural resource requirements for renewable energy. Limited availability of these required natural resources, particularly cobalt, may limit the application of renewables to reliably meet our energy needs.  We need a balanced energy transition that reduces green house gas emissions but also provides reliable energy supplies. A balance that will likely include fossil fuels as well as renewables.  

The Motivation:

According to NOAA (NOAA) the average carbon dioxide (CO₂) concentration in the earth's atmosphere averaged about 225 parts per million (PPM) over the last 800,000 years; today it is nearly twice that average at 417 PPM. The scientific consensus (Scientific Consensus: Earth's Climate is Warming) is that this is due to man's efforts to burn carbon (coal, oil and gas), deposited over the past 600 million years, in the last 200+ years. 

Throughout geologic time the amount of CO₂ in earth's atmosphere has been closely linked to global temperature, sea level and even mass extinctions. 

“The last time the atmospheric CO₂ amounts were this high was more than 3 million years ago, when temperature was 2°–3°C (3.6°–5.4°F) higher than during the pre-industrial era, and sea level was 15–25 meters (50–80 feet) higher than today.” (NOAA) 

These warmer conditions and higher sea levels will cause more severe weather systems, flooding of coastal cities, desertification, increased insect reproduction rates and acidification of marine waters with resulting negative effects on marine life.

Commitment:

As a result of this awareness, coupled with social pressure, 124 countries  (Track) have committed to be carbon neutral or at least greatly reduced carbon emissions by 2050.   As of this writing only one country, Bhutan, is carbon neutral.

Individual companies, Repsol, BP, Eni, Shell, TOTAL and Equinor, have also committed to greatly reduce emissions or meeting net zero carbon emissions by 2050.  These companies are large enough to spread their risk by continuing the discovery and development of oil and gas (albeit at a reduced rate) while building expertise in renewable resources.  This differs from Chevron and ExxonMobil which have only modest interest in renewables. 

The investment community is committed.  As Blackrock's Larry Fink writes in his 2020 letter to CEOs, “the investment risks presented by climate change are set to accelerate a significant reallocation of capital, which will in turn have a profound impact on the pricing of risk and assets around the world...We believe that sustainability should be our new standard for investing.” (Blackrock)     

 

It's more than just the Environment:

Renewables are becoming increasingly economically competitive with fossil and nuclear energy sources. Lazards  (lazards), who analyzes the cost of energy on an annual basis, finds the following.

 "Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 13.0) shows that as the cost of renewable energy continues to decline, certain technologies (e.g., onshore wind and utility-scale solar), which became cost-competitive with conventional generation several years ago on a new-build basis, continue to maintain competitiveness with the marginal cost of existing conventional generation technologies.”

They go on to report that onshore wind and "Solar PV-Thin Film Utility Scale" are among the cheapest forms of energy.

The reason for the drop in wind and solar pricing is due to "Wright's Law" as referenced by Ramez Naam (RamezNaam). 

Wright’s Law is essentially "learning-by-doing" and states that for every doubling of production there is a constant decrease in per unit manufacturing cost. 

For example, the price of solar modules per watt of power drops by 25% for every doubling of cumulative manufacturing.

As a result of this gain in efficiency, resulting from growing production, the cost of solar has not only dropped, but dropped far faster than IEA or EIA or anyone else predicted. For example, in 2010 IEA predicted that utility scale solar would produce electricity at 20 cents per kilowatt hour in 2020. In fact it's under 5 cents. 

The sun doesn't always shine:

So far this article presents a rather bullish view for renewable energy sources but there are some limitations that adversely affect reliability . Firstly, lets look at consistency of supply.  In addition to the sun not always shining, the wind does not always blow.  Let take a hypothetical example. In a world striving for zero emissions, you would have maybe 70+ percent renewables.  What happens when the sun is not shining AND the wind is not blowing?  There is a great deal of speculation about energy storage systems which can manage this uncertainty.   Shouldn't we have that in-place before moving to a world that depends on the majority of our energy coming from renewable sources? 

The most practical backup system, as seen today, is gas combined cycle power plants since it is economic and relatively clean (lazards).  In our hypothetical scenario, where renewable energy sources support 70+ percent of the system, the needed investment for required back-up system would be enormous.  But in most cases this becomes less of an issue since existing gas infrastructure investment has already been made.

A backup system, however, based on energy storage, maybe batteries, is more challenged because this infrastructure does not currently exist and would require added investment to insure reliability. Furthermore, as seen in the next section, there are risks regarding some of the raw material that goes into batteries. 

The unseen resource requirements:

“The transition to 100% renewables also comes with requirements for new patterns of material use to support the renewable energy infrastructure, including wind turbines, solar cells, batteries, and other technologies." (Requirements for Minerals and Metals for 100% Renewable Scenarios)  

Clean technologies rely on a variety of minerals, principally cobalt, nickel, lithium, copper, aluminum, silver and rare earths. Cobalt, lithium and rare earths are the metals of most concern for increasing demand and supply risks.

Cobalt: The annual demand for cobalt from rechargeable batteries (electric vehicles and storage) could exceed current production rates in 2023, even with recycling and technology improvements.  The cumulative total demand to 2050, with current technology and no recycling, could exceed current reserves by 400%. Even with recycling and a shift to technologies that use less cobalt, the cumulative demand will still exceed cobalt reserves. (Requirements for Minerals and Metals for 100% Renewable Scenarios) Not only are there limited supplies of Cobalt but even these supplies are potentially at risk. Most Cobalt production comes from The Democratic Republic of Congo (DRC) which produces 51,000 (USGS) metric tons annually or 7 times the next largest producer, China.  There has been a war in the DRC at different levels of intensity since 1994. 

Lithium: The cumulative demand for lithium by 2050 will exceed the reserves unless there is a shift to a high recycling rate. The cumulative demand could be as high as 170% of the current reserves with the current technology. Most production is from Australia.

Rare earth elements: These elements are not particularity rare (despite their name) so total supply is not the issue.  The challenge is that rare earths are controlled by a single country. About 85 percent of the world’s rare earths comes out of a few mines in China. (USGS) 

Looking to the future: 

"Renewable" energy may be limited by essential elements that are not renewable: Should we still call them renewable?  Production of these input elements are far more concentrated in far fewer countries than oil and gas production; some carrying significant political risk. This will have significant impact on the United States as it shifts from energy independence to becoming dependent on unreliable foreign supplies. Furthermore, because energy from renewable sources is fundamentally intermittent it cannot reliably provide power at all times.  We need to consider fossil fuel backup until there is a commercially viable energy storage system.  Betting on a 100% renewable world and ignoring oil and gas investment could carry risk of energy shortages. Of course, continuing to burn fossil fuels at the current rate could have unacceptable environmental consequences.   In our bi-polar politically charged world where we are 100% for or against an idea, political party etc it may be difficult to conceive of a balanced approach to the "Energy Transition": but that is what we need.

[BradleyPNW + 282]

16 hours ago, 0R0 said:

I don't think that AI is actually any more than a productivity tool for the knowledge worker, as the data intake is doubling or more every year or so then they just need those tools to keep up, there are just not enough people to do the work.

The big shift I do see is that the knowledge workers are moving out of the cities into suburbia exurbia and small towns. They are now being hired wherever they happen to be living without having to relocate. That is ultimately breaking the real estate blockage of the big cities that has not managed to construct in proportion to jobs growth, thus causing atrocious rents, packed offices, absurd home prices and no ability to attract people at an affordable cost. That is because the construction gap has created a situation where the new worker is paying 50% of income for rent, that in a high tax state, thus after rent disposable income is often less than 30% of gross income. The HR value for the pay premium required for bringing  a new employee into an urban job in has been $40k (2017) and growing rapidly.and multifamily households are already at 50-70% in many Silicon valley towns, LA, SD, Seattle etc..

The most intense domestic US cause of income inequality is the real estate log jam of the coastal and other cities where one must go to be in high tech finance science etc.to get a job. That due to high energy costs in the 2010 turnover period when oil was ~$100 and above, that pushed workers and businesses into major cities and out of exurbs, marginal peripheral city neighborhoods, and the broad interior of the US. Locals blocked new construction in order to obtain higher bids for their real estate. Many "community" movements were using any possible excuse to block construction of new residential units. Thus the situation that in the extreme, that left only 25% of gross income after tax and rent for many in the cities. Particularly those with a cost of living index above 300%.

The Work from Home movement that got its kickstart with the CV19 actions forcing all to use the long available video and collaboration software is bringing waves of people leaving the city. The bite of high rents and taxes is going to be reduced substantially and leave the disposable income after rent or mortgage payment at something closer to 50% as the cities equalize with the broad country. The improvement in life for these workers and those who follow them out of the cities will be a shock in every way. If the Fed continues supporting the banks to keep their books available for this enormous draw on their lending capacity then this can start right now. Entire municipalities have already had their inventory of houses put into contract and new housing construction contracts are up from last year by a tremendous margin, at +50% y/y. Not just as a working out of delayed demand.

My formerly mostly boomer neighborhood has kids and young parents for the first time in two decades. The racial composition has become more diverse and by quite a margin.

This all depends on the Dems losing the election, as their ""green'" agenda would destroy the movement which is driven by cheap gasoline and unobstructed construction.

 

With regard to solar and wind it will take a long time to actually build enough to run into problems. Knowledge worker automation supply shocks will also take a long time. So I wouldn't worry about gasoline prices. Telecommuting + electric vehicles will reduce demand for gasoline by then. In the near term, Democrats do a better job getting electric vehicles on the road and increasing MPG requirements that move the national fleet toward hybrids. 

The OP suggested turning European mountain ranges into pumped hydro to store renewable energy. We'd have to build a lot of renewables before we had to do anything like that. If you propose something like that you need to think about when it would happen and how people will live and work at that time. 

The greenies are absolutely right about investing in solar/wind/HVDC right now. We should build as much as we can as fast as we can reasonably build it. National security alone makes it a no-brainer. But it would probably also help lights-out factories as they start popping up during the next decade. Solve the intermittency problems with natural gas first then move on to other solutions. In addition, the nuclear advocates are right about modular nuke. President Obama's 'All Of The Above' strategy is a good strategy. Donald's 'But Muh Coal' strategy -- if you can call it strategy -- was just dumb. 

Edited July 8, 2020 by BradleyPNW