Modi changes India’s national conversation with Renewable Energy

by John Brian Shannon.

Prime Minister-elect Narendra Modi of India. Image courtesy of: www.narendramodi.in
Prime Minister-elect Narendra Modi of India. Image courtesy: www.narendramodi.in

India’s newly-elected Prime Minister, Narendra Modi says 400 million Indian citizens presently living without electrical service in rural areas of the country will have electricity within five years via upcoming, massive investments in solar power.

Not only that, but the country’s various electrical grids (which are not necessarily connected to each other, nor to the main national grid) will benefit significantly from thousands of distributed solar installations by adding to overall capacity and helping to stabilize weaker parts of the infrastructure.

PM-elect Modi sees no reason why each rooftop in the country cannot install a number of solar panels. Indeed, when millions of rooftops are involved with an average of 10 panels per rooftop (for example), and plenty of land that is unsuitable for growing crops and entire canal systems are already covered with solar panels, you know big numbers are coming.

So, what could India do with 1 billion solar panels?

For starters, every home and business in the country could have reliable (daytime) electricity. Many towns and villages in remote areas would have electrical power for the first time in their history, thereby allowing them entry into the world’s knowledge-based economy. With the advent of electricity, education and commerce should flourish and easy access to online government services will offer significant benefit to many millions of India’s citizens.

And for locations with home-battery backup or diesel-backup power, 24-hour-per-day electricity will become the norm. Employment and productivity in these regions could be expected to rise dramatically and online medical advice could be a lifesaver for those who live in remote areas. All of these are good things to have in a rapidly developing nation.

Then there is the possibility of electrical power sales between electrical power producers and energy consumers of all sizes, whether neighbour-to-neighbour or direct-to-utility, along the projected pathways of the constantly evolving grid system. Finally, (daytime) surplus electricity sales to neighbouring countries like Bangladesh, Pakistan, Nepal and Bhutan might become commonplace and profitable.

Mr. Modi is taking on an unparalleled task, fraught with challenges. Here is a comment on the present state of affairs in India as it relates to the proposed rural electrification of the country.

Four hundred million Indians, more than the population of the United States and Canada combined, lack electricity. An official of India’s newly elected Prime Minister, Narendra Modi, recently said that his government wants every home to be able to run at least one light bulb by 2019. Administrations have made similar claims numerous times since India gained independence in 1947, but this time renewable power sources could bring the longstanding promise closer to a realistic vision.

In a sprawling, diverse country of more than 1.2 billion residents this task is tantamount to a second green revolution, the first being agricultural advances that relieved famine across the subcontinent in the middle of the 20th century. — ThinkProgress

India’s utility industry is at a ‘tipping point’

The Indian utility industry is comprised of a mishmash of coal-fired generation, less than reliable nuclear power plants noted for their high maintenance costs, oil-fired power generation, along with some hydro-electric dams and biomass power generation. The ‘pylons and powerlines’ component of the national grid in India is in need of a complete overhaul. On top of all that, the fossil and nuclear power producers have been heavily subsidized for decades and theft of electricity continues to be a multi-billion dollar problem.

Prior to the Indian election, the country’s utility industry was summed up by industry expert, S.L. Rao;

Power retailers were behind on 155 billion rupees ($2.5 billion) of payments to their suppliers as of Jan. 31, reducing their ability to provide electricity to customers. Blackouts may spread as state utilities in Delhi, Haryana and Maharashtra slash consumer bills in a populist wave before elections. That’s jeopardizing a $31 billion government bailout of the industry, which requires companies to boost rates.

“The power sector needs tough politics, and the only person in politics today who might be capable of that kind of toughness is Modi,” said S.L. Rao, the head of India’s central electricity regulator from 1998 to 2001, according to his website.

The Indian utility industry “has reached a stage where either we change the whole system quickly or it will collapse.” Rao, who was appointed to the regulatory body by an independent committee, said he maintains no political affiliation. — Bloomberg

On the bright side however, India’s outgoing Prime Minister Manmohan Singh had begun a process to inform citizens of the benefits of renewable energy and was instrumental in promoting a 4 GigaWatt(GW) solar park being built in four stages. At present it is only partially operational, with 1GW of power flowing now and construction of the three remaining stages continues at a brisk pace. When completed, it will easily be the largest solar park in the world.

Dr. Singh also directed policy towards massive wind power capacity additions, with major offshore wind installations due to come online in 2015. However, even with the efforts of PM Singh, only 4% of total electrical generation came from renewable energy in 2013. Prime Minister Singh’s policy goal of 20GW of solar by 2022 looks likely to be superceded by PM-elect Modi. Perhaps in dramatic fashion.

Tulsi Tanti, Chairman of the Pune India based wind power company The Suzlon Group, told the newswire today that, “the BJP-led government will provide an environment conducive for growth and investments, with major reforms in the infrastructure and renewable energy sector. This is important as India’s economic environment will act as a catalyst in reviving the global economy.” — Forbes

It is time to roll up our sleeves and get to work

Hundreds of thousands of direct and related jobs are expected during the 2014-2024 Indian renewable energy boom. And, bonus for consumers, the falling cost of solar and wind power electricity rates will have an overall deflationary effect on the national economy.

Later, as solar and wind power begin to displace fossil and nuclear power, declining healthcare costs, improved crop yields, cleaner air in cities resulting in a better quality of life for citizens — the new and stable energy paradigm will remove many of the historic constraints on the country and its people, allowing India to become all that it can and should be.

At this point, it looks like India’s transition to renewable energy may happen quickly and turn out to be the good-news story of the decade with massive economic, environmental, and human health ramifications — not just for India but for the region and the world. Hats off to India!

Follow John Brian Shannon on Twitter: @JBSsaid

Renewables and the Future of Oil Companies

by John Brian Shannon.

It may surprise you to know that the world’s oil companies see renewables as an unstoppable force. Some oil companies have issued landmark reports informing us that by 2100 at the latest the world will be getting 90% of its energy from renewable energy, indicating this could happen as early as 2060 under certain geopolitical conditions.

Although oil companies were initially hesitant to embrace renewable energy, in recent years their position has changed somewhat, as the many positive attributes of renewables began to convince senior oil executives that changes were on the horizon and their choice was to either embrace that change or accept an ever-declining energy market share. By their own admission only 10% of late-century energy will be met by petroleum.

In the final analysis, energy is energy after all, and it is the energy business that the oil companies are in.

So, rather than cede energy market share to up-and-coming renewable energy companies, big oil decided to become involved in renewables, first with biofuel, then solar, and later, wind. Some oil companies even purchased solar companies with their already installed and operating solar farms to gain experience in the new frontier.

The Oil Industry: Early Oil

In the early 20th century it was all about the oil, but in the later 20th century it was all about refining it into diverse products and the oil industry then morphed into a much larger entity named the petrochemical industry which created billions of tons of plastics, fertilizers, liquids, products and even medicines every year. The petrochemical sector includes the natural gas segment and thousands of miles of pipelines exist on every continent except Antarctica to move methane from gas wells to processing facilities and then forward it as usable natural gas to the end users.

A much larger industry had sprung up out of the original oil industry, one that was far larger than the one that had merely pulled oil out of the ground and refined it for transportation use.

The High Cost of Oil

Almost all countries heavily subsidize their oil and natural gas industries, and the United States is a great example. Oil companies there get over $4 billion dollars per year (yes, every year) to ensure stable petroleum supplies, compliance with regulations even in difficult drilling locations, and to help levelize gasoline prices across the country.

It is commonly reported that the petroleum industry (worldwide) receives over $500 billion dollars worth of subsidies and tax breaks every year. The worldwide oil and gas subsidy reported by the EIA for 2012 was $550 billion dollars and 2013 will have a similar subsidy figure attached to it.

Besides the massive taxpayer funded subsidy scheme for oil and gas are the externalities associated with the burning of all those long dead and liquefied dinosaurs. For each ton of gasoline burned, 4.5 tons of CO2 are created. If you add up all the billions of tons of gasoline that have been burned since the first Model T Ford rolled off the assembly line on August 12, 1908, it totals an incredible amount of CO2. Not to mention the billions of tons of non-CO2 airborne emissions created by our petroleum burning transportation sector since that date.

All this burning has a significant healthcare cost for nations (look at China, for example) and pollution-related damages will continue to affect the agriculture sector and cause damage (spalling) to concrete structures like buildings, bridges and some roads.

Although an excellent source of energy for motive power with high output per unit, the necessary high subsidies and unfortunate climate-changing externalities have conspired to considerably shorten the age of oil.

Natural Gas, the ‘Bridge Fuel’ to a Renewables Future

The oil companies are ahead of regulators on this one. Knowing that emission regulations were getting stricter every decade, petroleum companies knew that they had to pull a rabbit out of a hat, as gasoline and diesel can burn only so cleanly without prohibitively expensive technology. This is why we hear every day about ‘Natural Gas the Bridge Fuel to the Future’ and how natural gas will revolutionize our power generation segment and transportation sector.

Convincing regulators, utility companies, and automakers to switch to natural gas became the new mantra of oil company executives in order to meet increasingly stringent emission targets in developed and emerging nations.

The ‘Bridge Fuel’ will peak between 2040 and 2045 in most published oil company scenarios and somewhere between 2060 and 2100 natural gas itself will be almost completely replaced by renewables.

Although natural gas is hundreds of times cleaner burning than other fuels, it still emits plenty of CO2, but emits only minute quantities of toxic gases — and, importantly, no airborne soot or particulates.

By mid-century or 2100 at the latest, cleaner burning natural gas will be replaced in order to meet emission targets, and natural gas would lose out to renewable energy anyway — even without emission regulations — for the simple reason that solar and wind have zero fuel cost associated with their operation, while natural gas will always have a fuel cost and a separate delivery cost per gigajoule.

Imagine all of the costs involved in prospecting for and siting natural gas fields, purchasing the land, drilling, installing pipelines, processing methane into natural gas and adding even more pipelines to deliver natural gas to the end user. It all adds up, and even the most efficient gas producers/processors/pipeliners must cover their overhead.

There are no comparable ongoing fuel or distribution overheads with renewable energy.

What will we miss in the Clean Energy Future?

Once a solar or wind power plant hits completion all it needs is for the Sun to rise or the wind to blow. No drilling, no processing, no pipelines, no supertanker spills or pollution, and no CO2 sequestration required. Just plenty of clean renewable energy.

For all the right reasons, renewables are making progress. Economics, human health and our environment are the factors driving this energy change-up.

Let’s hope in our energy future that oil companies and gas companies, simply yet profoundly, morph themselves into energy companies and upon actualizing it, become renewable energy companies in the process.

For further renewable energy reading:

World Cumulative Solar Photovoltaics Installations,  2000-2012
The world installed 31,100 megawatts of solar photovoltaics (PV) in 2012—an all-time annual high that pushed global PV capacity above 100,000 megawatts. There is now enough PV operating to meet the household electricity needs of nearly 70 million people at the European level of consumption. Image courtesy of the Earth Policy Institute
World Cumulative Installed Wind Power Capacity 1980-2012
Even amid policy uncertainty in major wind power markets, wind developers still managed to set a new record for installations in 2012–with 44,000 megawatts of new wind capacity worldwide. With total capacity exceeding 280,000 megawatts, wind farms generate carbon-free electricity in more than 80 countries, 24 of which have at least 1,000 megawatts. At the European level of consumption, the world’s operating wind turbines could satisfy the residential electricity needs of 450 million people. Image courtesy of the Earth Policy Institute.

Distributed Energy – The Next Logical Step

by John Brian Shannon

Distributed Energy adds capacity to the electrical grid during the hours that electrical demand is highest, adding to grid stability and lowering costs for consumers

Over the centuries, different kinds of energy and energy delivery systems have been employed by human beings. In the Neolithic Period some 10,000 years ago, our ancestors sat around campfires for the light, warmth and security that a fire can provide. Neolithic people mostly ate their food raw, but are known to have cooked meat and occasionally grains over a fire.

For many centuries that general energy usage pattern continued and the only difference was the kind of fuel (coal later replaced wood and straw) and the size of the fire and the number of people it served.

New ways of using energy

The Industrial Revolution changed all that for people in those suddenly developing nations. New energy technology offered huge economies of scale — whereby the larger the power plant, the more efficiently it could produce affordable power for large numbers of people.

The first electrical grids were then formed to transport electricity from large-scale coal power plants or hydro-electric dams to population centres.

Since then, every decade shows larger and more efficient power plants and ever-larger populations being served by this wonderfully efficient grid system. Huge power plants and sprawling electrical grids delivered electricity to citizens over very long distances and at reasonable rates, while investors, utility companies, and power producers received reasonable rates of return on their investment.

It was (and still is) an excellent model to employ, one which brings electrical current from remote power plants to electricity users at an energy price that works for everyone. Except for the fact that some power plants produce unimaginable amounts of pollution and are necessarily and massively subsidized by taxpayers, this has been a winning energy model for a number of decades. And this very successful and reliable model will continue to provide our electricity for many years to come.

But there are serious drawbacks to grid power

Utility-scale power generation requires huge power plants, each costing tens of billions of dollars in the case of nuclear power plants, billions of dollars each in the case of hydro-electric power plants, and hundreds of millions of dollars in the case of coal power plants.

All coal and nuclear power plants were heavily subsidized by taxpayers, or they couldn’t have been built in the first place

It doesn’t end there, as coal fired power plants use hundreds or even thousands of tons of coal every day of the year at a cost of $50. to $160. per ton, not to mention the huge infrastructure costs required to build the ports and rail lines to transport the coal — paid for by taxpayers. And then add to that, the freight costs paid to the shipping companies and the railway companies to transport that coal to the power generation site. Most of the coal that Asia burns comes from North America and Australia. Even within coal rich North America, thousands of miles of railway tracks were laid down to transport North American coal to North American coal power plants.

Let’s not forget the environmental costs associated with all that toxic smoke either. China and the U.S. each produced 7.2 billion tons of coal fired CO2 in 2010 and that number is rising every year. Not to mention the many toxic oxides of nitrogen and sulfur, along with soot and airborne heavy metals that are produced wherever power plants burn coal.

Nuclear power plants likewise, use expensive to produce nuclear fuel rods or pellets and simply could not survive without massive government subsidies. Then there is the storage problem, as the so-called ‘spent fuel’ is highly radioactive and must be securely stored for up to 20,000 years in temperature-controlled conditions. Again, massive taxpayer funded infrastructure must be provided to store the world’s ever-growing pile of spent fuel.

Other than costing billions of dollars and disrupting river flows and fish habitat, hydro-electric power is a benign and good electrical generation solution. If only there were enough rivers to provide all the electricity that 7.1 billion people require! With almost every possible river already dammed on the planet, hydro-electric power plants provide only 16.2% of the world’s electricity.

An even better energy model has arrived in the form of distributed energy

Simply stated, distributed energy is created when many homes or businesses place solar panels on their rooftops or wind turbines on their properties — and then connect it to the electrical grid. Either solar panels or wind turbines can be used in the distributed energy context.

With progressive policies designed to strengthen and balance existing electricity grids, distributed energy can play a large role in ameliorating our present energy challenges.

Distributed energy is the opposite of utility-scale electrical power generation in three very important ways

  • Distributed energy emits no measurable pollution.
  • Distributed energy assists the grid operator to locate the energy source close to electrical demand centres.
  • Unimaginably large and expensive national utility grids crisscrossing the countryside are not required in the case of distributed energy.

Connecting distributed energy to the grid results in many positives for micro-energy producers, homeowners, businesses, and the grid operator. During the daytime, solar panels may produce more electricity than the homeowner or business can actually use — although during that same time of day, the utility company power plants may be straining to produce all the electricity that the grid demands during those peak hours.

Net-Metering to the Rescue!

Therefore, energy-sharing takes place via the use of a net-metering system allowing the homeowner or business owner to sell their surplus electricity to the utility company. Net-Metering allows homeowners and businesses to sell their excess electricity to the grid at a profit, while retaining all the benefits of grid connection. Installation of a net-meter at each home is the essential part of a distributed energy grid.

New financing options are becoming available to homeowners and businesses to install rooftop arrays — and even renters are able to purchase renewable energy through innovative programmes designed to boost the market share of renewables.

Some auto assembly plants in Germany and in the U.S.A. have installed wind turbines on their properties, or on nearby land purchased specifically for that purpose. Both BMW and Volkswagen are famous for building great cars, and for being distributed wind producers that have installed wind turbines near their factories, to ensure more reliable power and to avoid energy price spikes. Many ‘world citizens’ admire their environmental commitment.

IKEA, WalMart and Walgreens are famous for installing solar power plants on their store rooftops and warehouses, and WalMart, Google and Apple Computer and others, have purchased wind farms in an effort to Go Green and to alleviate the energy price spikes which are so common in the U.S. and Europe. Well done.

Distributed Energy pays off!

In California, homeowners with solar panels on their rooftops are receiving cheques for up to $2000. — or even larger amounts in the case of larger rooftop solar installations — from their utility company every January, to pay for all the surplus electricity they’ve sold to the utility company during the course of the year. California law mandates that distributed energy producers be paid up-to-date by February 1 of each year and other energy policies in the Great Bear state prove their commitment to a

In Australia, many thousands of homes with solar panels on their rooftops have dramatically added to overall grid capacity and stability by curtailing the power outages common there during peak demand hours, and some coal power plants have shut down while other coal plants are now planning for decommissioning.

Understandably so, the heavily subsidized coal and nuclear industries fear the rapidly growing distributed energy model, although coal exports to China from coal giant Australia continue at a frenetic pace.

Turn down the burners — the Sun is up!

Natural gas and hydro-electric power producers cautiously embrace distributed energy as an augmentation of their efforts to provide reliable electricity to the grid — as they can all exist as energy producers at different hours of the 24 hour day — and for very different reasons none of them are able to eclipse the others.

Distributed energy typically produces its power during peak demand hours, and is known for reducing electricity costs across-the-board due to the Merit Order effect, which is a ranking system utility companies use to decide which energy generator to employ (in real-time) throughout the day and night.

In fact, distributed energy is all about adding peak demand power to the grid — resulting in a stronger, more reliable power grid while displacing dirty energy in the process — and monetarily rewarding citizens for their surplus electricity.

Wind Power Setting New Records in Asia

by John Brian Shannon.

Global Wind Power Capacity Set to Rise

In recent years, about 100,000 MegaWatts (MW) of wind power have been installed every three years, globally. As wind turbine technology and production facilities have ramped up, turbine costs have fallen significantly — resulting in a predictable demand curve.

The U.S. and China are by far, the world’s major players, with Germany, Spain, and Japan holding respectable positions in capacity and in turbine technology. As China entered the game, their massive manufacturing sector went into overdrive to meet expected demand. Some countries, (like the Netherlands) licensed their advanced turbine technology to China which worked to further speed production and installations inside the Middle Kingdom.

Huge increases in turbine supply, have resulted in huge increases in installations. The supply/demand result displays brilliantly in the chart below.

World Cumulative Installed Wind Power Capacity 1980-2012
World Cumulative Installed Capacity 1980-2012. Image courtesy of the Earth Policy Institute.

Looking at the chart, is there any doubt that the brisk pace of turbine installations will continue? Barring localized disruptions due to changing regulations or lowering of regional subsidy schemes, it looks like 100,000 MW will be added to the world grid every three years until 2020 at the very least.

Wind Power Ready for Takeoff in Asia

A recent Global Wind Energy Council (GWEC) report informs us that 2013 was a relatively ‘slow year’ for turbine installations with only 12.5% global growth over 2012 numbers. Most of the blame for this rests on the ‘on again — off again’ uncertainty surrounding the expiration of the PTC (Production Tax Credit) in the U.S. which was responsible for severely limiting the number and size of installations in that country.

Except for America, most of the world saw growth in turbine installations for 2013. China, especially, took off at a full gallop,beginning 2013 with 75,324MW of installed wind power and adding another 16,100MW by Jan 1, 2014 – amounting to almost half all new wind power installations worldwide! Installed capacity in China now totals 91,424MW leading the GWEC to speculate the country’s wind industry may be entering a new phase of maturity.”

China has embarked on the greatest push for renewable energy the world has ever seen. A key element involves more than doubling the number of wind turbines in the next six years. Already the world’s largest producer of wind power, China plans further massive increases. From a current installed capacity of 75 GigaWatts the aim is to achieve a staggering 200 GigaWatts of installed wind power by 2020.” — BBC

Wind surpasses Nuclear in China in 2013

At 2% of total electrical power generation in China wind surpassed nuclear (1.2%) last year, to become the country’s third-largest generator of electricity, after fossil fuels (all fossil fuels together total 78.2%) and hydro-electric (18.5%).

By 2020, even accounting for the growth of all other kinds of energy in China, it will represent 4% of total electrical generation. Which doesn’t sound like much, but it is a staggering number in itself, especially when compared to the rest of the world’s turbine installations combined!

What can renewable energy investors expect 2014-2020?

Plenty of growth for one thing. Better turbine technology and enhanced reliability, for another. More focus on so-called ‘wind corridors’ — those areas within a country’s boundaries where it happens to be most advantageous to place each turbine — yet close enough to electrical demand centres to be economical. Dramatically increased efficiency due to placing the turbine unit atop taller towers in the 200-300m range. Falling turbine prices will continue, courtesy of the massive entry into the global turbine market by China. And, turbine technology improvements and installations will continue at a rapid pace within China, and at a steady pace globally.

Perhaps the final word on the state of the industry in 2014 should go to David Shukman, the BBC’s science editor: “If any country can industrialise wind power and make it pay, it’s China.”