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Energy the nexus of everything: May 2009 Archives

Today, prices for electricity are based almost entirely, over 90%, on the capital and fuel costs of power plants and transmission lines. The other small percentage of the price of grid-based electricity is based upon the ancillary services that coordinate the activities on the grid. Through the grid operator, consumers pay these ancillary services such as enabling new generation to come online or go offline on short notice (minutes) and demand response mechanisms where consumers can decide to get paid to turn off large loads, such as factories and commercial buildings.

The push for renewable energy essentially needs to flip the current price relationship to 90% for ancillary services and only 10% for fuel and capital. Well, getting the cost of electricity to be < 50% based upon fuel and capital costs may never happen, but because the fuel for renewable is free (sun, wind, geothermal heat, waves, etc.), certainly the fuel cost can be minimized and brought near zero. Many people believe this is why a grid based upon renewable electricity generation will ultimately be cheaper than the current grid based upon fossil fuels. It is not obvious that intermittent electricity with free fuel will be cheaper, but a good goal is to keep the price of electricity the same while taking the fuel costs to zero. Furthermore, electricity that is twice as expensive will not be a new burden if we design our buildings and use patterns to consume half of the electricity.

The reason that a renewable electric grid will not necessarily be cheaper than a fossil fuel grid is that the intermittent nature of renewable generation forces two basic actions to happen - both of which increase costs:

1) People adapt themselves to the grid – people can adapt their habits and usage of electricity to the output profile of renewable generation, and

2) People adapt the grid to themselves – we can adapt the electricity output profile of renewable generation to our electricity usage habits.

Both actions, or strategies, will happen simultaneously in an undetermined proportion to be discovered in the future. The first item in the list above means that people alter their schedule, which we could assume is now optimized for their leisure and income, and any changes to that schedule mean someone will have less leisure time or income, or both. No new gadgets necessarily need to be added to the electric grid except the actual generation systems themselves. The second item above implies that we install gadgets such as storage systems along with smart appliances and meters such that we can essentially program these new infrastructure items to shift and store electricity from when we don't want it to when we do want it. Obviously, manufacturing, installing, and operating these new gadgets will cost money that is not currently being spent - although many regions of the US are in the early stages of moving to the "smart grid" and "smart home" systems that will define how much the grid will adapt to people. Ideas go so far as to even include plug-in electric vehicles in the smart grid concept, marrying devices that can be used for transportation and home electricity usage.

The future cost of electricity from a high renewable scenario is unknown, but don't expect it to be cheaper. It may or may not even be more stable as stability costs money. Although, there are reasons that future electricity prices may be more variable on short time scales (minutes to hours), they will likely be with less long term impacts (years) for the magnitude of the variability as compared to natural gas-based generation, for example.

So we need to "flip flop" the composition of electricity prices from being primarily based upon fuel to being primary based upon the capital costs of renewable and storage systems with free fuel. We need to get these renewable systems on the grid so we can learn sooner or later how to best integrate them into our grid ... and our daily lives.

Wind-powered electricity generation in Texas in 2008 reached 14.6 terawatt-hours (TWh) compared to 8.2 TWh in 2007. Given that the total electricity generation in Texas was 402.7 TWh in 2008, the wind generation as a percentage of the total was 3.6%, compared to approximately 2.0% in 2007. This is not the highest percentage of generation for any state, but it is the highest total quantity of wind electricity. Texas also had approximately 8,000 MW of wind power capacity installed by the end of 2008.

Likely due to the economic downturn, but perhaps also a relatively mild summer in 2008, total electricity generation in Texas dropped 2.9 TWh from 405.6 TWh in 2007. Another interesting note is that electricity generation using natural gas was 199.2 TWh in 2007 and 192.8 TWh in 2008, a drop of 6.4 TWh. Not entirely coincidentally, this 6.4 TWh is the same amount of increase in wind generation from 2007 to 2008. A study by General Electric in 2008 showed that as wind generation increases in the Texas electric grid, ERCOT, it will primarily displace natural gas generation. This is because natural gas generation is on the margin in Texas and also accounted for approximately 49% of electricity in 2007. Furthermore, Texas generation capacity is approximately 70% natural gas units. The high quantity of natural gas capacity makes it relatively easy, but not easy, for Texas to incorporate wind power into its electricity grid because they are the units most capable (as compared to coal and nuclear) of ramping up and down to follow the wind power fluctuations.

Early in 2009 the first wind farm along the Texas coast became operational in Kenedy County of South Texas. This wind farm is positioned in one of the most traveled migratory bird routes in the world as many of the North American birds get funneled by the Gulf of Mexico along their route. This makes the wind farm controversial as compared to all others in Texas that are in West Texas with different, but generally less wildlife. It was the only wind farm opposed by the Audubon Society due to being located in a highly traveled zone for birds. However, the wind farm operators, Babcock and Brown, have installed procedures for curtailing the wind turbines should weather force birds to fly as low as the turbines. Many remain skeptical.

It remains to be seen the full impact of these wind farms, and we may get some indication over the course of this year. Wildlife and scenic issues have so far help up all other offshore and coastal wind farm sites in the US, and scenic criteria have already been ruled not applicable in Texas for locating wind farms. Let's hope bird impacts do not occur widely such that they create a black eye for the wind industry after growing away from the initial bird issues of Altamont Pass in California. Designs using tubular towers eventually evolved, thus removing the built-in perches that attracted some birds. Let's hope the birds avoid the turbines on the Texas coast, because Texas is set up well to continue to lead in wind power production, and there's no better place than the #1 oil, gas, ... and wind power producer in the US.

A recent paper from the University of Minnesota, by Sangwon Suh and others, estimates the change in embodied water in corn ethanol from 2005 to 2008 (see: Water Embodied in Bioethanol in the United States;

This paper indicates that the state with the highest quantity of embodied water per corn ethanol is California - strangely higher than Arizona and New Mexico, both of which are estimated to be both growing corn and producing ethanol from it. The range of consumptive water embodied in corn ethanol is 5 to 2,140 liters H2O per liter ethanol. The high end of the range translates to a higher value as compared to my previous study on the water intensity of transportation, likely due to a different assumption regarding how much irrigation water is consumed. Suh assumes that all withdrawn irrigation water is consumed, whereas I used United States Geological Survey data for estimating consumption by subtracting how much withdrawn irrigation water is returned to the source.

The difference in the methods of Suh and myself are not that important, and Suh does us a favor by tracking the changes from 2005 to 2008. During this time period he estimates that the embodied water in corn ethanol has increased 46% and the total consumptive water use has increased by 68%. This implies that more marginal lands, with worse climates for corn agriculture, and being used to grow corn, for food or fuel. This tendency is of course the fear of many that we will be using irrigated agriculture for biofuels on marginal lands even though many are assuming annual crops or perennial grasses on these lands will not be irrigated. In many regions, such as over the Ogallala Aquifer, industrial agriculture has already been overexploiting groundwater resources. It is important to know that the vast majority of the water embodied in corn ethanol is from farming, and thus it is farming corn in general that impacts the water resources, and not necessarily the push for corn ethanol. The Renewable Fuels Standard simply creates another marker for corn, and exacerbates the situation.

Recent work we've done at the University of Texas at Austin's Center for International Energy and Environmental Policy together with members of the Bureau of Economic Geology shows that in 2005 the water embodied in light duty vehicle transportation fuels in the US accounted for approximately 2.5% of the total water consumption. By 2030, we estimate this could be up to 10%, mainly due to increasing ties in the nexus of energy and water in the form of biofuels. This consumption of nearly 14,000 billion liters holds for a vastly different diversity in the number of miles driven on different fuels from 23% - 71% based upon petroleum - quite a spread! So we have many ways to use our water resources for creating new fuels for transportation ... or food, but that's another story.

Energy and water are inextricably linked. If we consider food as energy, which we should since it is the substance that powers our bodies, then the energy-water nexus is perhaps the most important in the agricultural sector. When we use agriculture to grow crops for biomass that is later converted to liquid fuels, then the energy-water nexus is even more apparent. I calculated how much water is used for driving light duty vehicles (cars, vans, light trucks and sport utility vehicles) and published the results in Environmental Science and Technology (10.1021/es800367m). Results are also summarized in a commentary in Nature Geoscience volume 1.

The results vary from 0.1-0.4 gallons of water per mile (0.2 - 1 L H2O/km) for petroleum gasoline and diesel, non-irrigated corn for E85 vehicles, and non-irrigated soy for biodiesel. Additionally, driving on electricity from the US grid consumes near 0.2-0.3 gallons of water per mile (0.5 - 0.7 L H2O/km). The reason is that water is used to cool off the coal, natural gas, and nuclear power plants on the grid. However, if irrigated corn is used to make E85 ethanol in the United States, then the water consumption jumps by one to two orders of magnitude to 10-110 gallons of water per mile (23-260 L H2O/km), with an average of 28 gallons of water per mile driven. Keep in mind that only about 15-20% of corn bushes are irrigated to any extend in the US.

This information is only an introduction to the energy-water nexus, but the US government is looking at it more closely recently due to research showing how constraints on one side can create problems for the other. This is typified by potential legislation proposed by Senator Bingaman: The Energy and Water Integration Act of 2009. This bill use similar language as in my Env. Sci. and Tech. paper in measuring the life cycle impact of water for transportation in terms of water consumed per distance traveled. Hopefully, research, industry, and government efforts can minimize impacts on water resources and use them wisely for our energy future.

The concept of using water resources sustainably, especially for growing biomass for liquid fuels, makes one wonder about water embodied in imports and exports in general. Is it better for the US to import biofuels from Brazil that are grown from sugar cane that might not stress water resources as much as corn agriculture does in the US? The US has a tariff on imported ethanol, but not imported oil. If the US has an energy policy goal of reducing imports from the Middle East, then it seems like the tariffs would be switched since the US has friendly relations with the Brazilians. So it seems the current US energy policy is to literally trade domestic water for foreign oil. I guess it could be worse.