The Vector: Is the Transition to Renewables Too Slow?

The US government’s stimulus package will double the country’s renewable energy capacity by 2012 (from 28.8 GW from renewable energy in 2008 to 57.6 GW) , according to a White House progress report launched by Vice President Joe Biden towards the end of August. At the same time, stimulus action is expected to cut the cost of solar generation and EV batteries

“The government plants the seeds, the private sector nourishes and makes it grow,” according to the Vice President. “If we’re as innovative as we’ve been in the past, we launch entire new industries.” Biden expects the cost of solar power to drop to equal fossil fuel generated power by 2015.

But is this rate of transition fast enough? Is the rate of transition in our hands? And what will the consequences be if oil supply drops faster than we can replace it with renewable sources?

The optimists

Stanford University academics Mark Jacobson and Mark Delucchi examined the feasibility of a 20-year transition from oil to renewable energy sources in a submission on US Energy Policy in 2009.

Obviously, such a transition is a massive task. But the Stanford researchers say largescale projects have been successfully undertaken in very short timescales before. Jacobson and Delucchi point to the speed of construction of the 47,000-mile US interstate highway system after 1956, one of the largest public works programs in history. They also point to the transformation of the US automobile manufacturing sector from 1939 to ramp up aircraft production. The country was producing around 2,000 aircraft a year in ’39. By ’45 that figure had increased to almost 100,000 units. (The complexity, size, efficiency and effectiveness of the aircraft also took a major leap forward in those six years.)

The pessimist

However, proposals such as Jacobson and Delucchi’s, as well as Al Gore’s concept of a 10-year transition, have been criticised as far too optimistic in a recent book by energy guru, Professor Vaclav Smil from the University of Manitoba. (‘Energy Transitions: History, Requirements, Prospects,’ Praeger 2010)

History tells us that energy transitions take generations to complete, according to Smil. The transition away from oil will require change on a scale never before attempted, he says. Changing a global infrastructure designed to be run on oil cannot be undertaken overnight either. The process is therefore likely to take even longer than the transition from horsedrawn and wind transport to coal and the transition to oil, says Smil.

Coal began to be used as a fuel for industry at the end of the Eighteenth Century. Smil’s analysis tracks the rate of transition to the new fuel. Globally, coal began to supply more than 5% of all fuel energies around 1840, more than 10% in the early 1850s, more than a quarter of the total by the late 1870s, and one half by the beginning of the twentieth century. The transition to oil from the 1890s was also slow.

In Smil’s analysis, governments should base their policies on the expectation that oil will be the principal fuel for the next 40 years – and focus on limiting consumption of this commodity.

“Affluent countries should thus replace their traditional pursuit of higher energy output and increased conversion efficiency with a new approach that would combine aggressively improved efficiency of energy conversion with decreasing rates of per capita energy use. This combination would be the best enabler of the unfolding energy transition. Until we get such history-changing conversions as reliable, inexpensive PV cells generating electricity with 50% efficiency or genetically engineered bacteria exuding billions of liters of kerosene, it is the best way to ensure that new renewables will come as close to displacing fossil fuels as is economically advantageous and environmentally acceptable.”

A sinking roller coaster

What would a world look like where renewable energy is coming onstream at a slow rate? Gail Tverberg, an actuary who writes for the OilDrum.com has speculated on this. She paints a pretty grim picture. She believes the result would be oscillating oil prices – rather than permanently high oil prices.

“When oil prices rise but are not met with immediate solutions leading back to lower prices, consumers respond by reducing discretionary spending, or by defaulting on debt. Either of these responses tends to lead to recession, reduced oil demand, and a reduction in oil price,” according to Tverberg.

Eventually growth in demand (perhaps from China and India) can be expected to raise prices again, but again, new oil supply /new technology /new substitutes are likely to be delayed, so that higher prices are likely to give rise to further reduced discretionary spending and debt defaults, resulting in more recession.

When excess demand is pushing the cost of oil beyond a point of affordability (which Tverberg believes is currently around $85 per barrel), the likely outcome is that production of oil will at some point in the not too distant future, start to decline, rather than just stay flat, as it becomes more and more difficult to find oil that can be extracted at affordable prices and an adequate energy return.

The connection that everyone hopes for–lower production leading to higher prices (easing the energy transition by improving the economics of investment in renewables) doesn’t seem to be a very robust one, according to Tverberg’s thesis.

A warlike mentality needed?

Professor Smil makes a compelling case. Bill Gates talks about the need for energy miracles to get us out of them. But the incredible expansion in aircraft production is equally compelling evidence of our capabilities. The difference between the transition from automobile to aircraft production, and the transition to coal or oil fuels is the level of political unity and government involvement. We seem to be capable of achieving miracles if we unite in the face of an all-threatening danger.

Perhaps government action will need to help the energy farmers as well as the seed producers.