Nicole Foss on finance and bubbles

This is the first film of 5 produced by Nicole Foss about the Peak Oil and Economic Crisis we are currently facing. The other 4 are in the main body of the post. The Automatic Earth’s co-editor Illargi has an interview in the “Words” section as an MP3.

In the new economy there were 3 types of people                                                
The have’s,                                                                                                                     The have not’s,                                                                                                              And the have-not-paid-for-what-they-have’s.        

Satyajit Das ; “Built to Fail”                                                      http://www.themonthly.com.au/nation-reviewed-satyajit-das-comment-built-fail-1544

The following post features extracts from a Nicole Foss article in TAE from 2009 http://theautomaticearth.blogspot.com/2009/07/july-1-2009-renewable-power-not-in-your.html  called “Renewable Power? Not in your lifetime.” calling on Nicole’s insights into her knowledgr of power systems and international finance.

It should also be remembered that a United Nations Report from February 2011, the “World Economic and Social Survey 2011” has put the financial cost of “repowering” the Green economy with renewables at between $15-20 TRILLION. This is discussed in the second post on this blog

https://awayfromitall.me/2011/09/28/the-green-economy-can-the-current-growth-system-be-the-basis/#more-12

Nicole Foss is senior editor of The Automatic Earth (TAE), where she writes as Stoneleigh. TAE integrates a study of the global economy with a peak oil perspective. Previously, Foss served as the editor of The Oil Drum – Canada. Foss ran the Agri-Energy Producers’ Association of Ontario, where she focused on farm-based biogas projects and grid connections for renewable energy. While living in the UK, Foss was a Research Fellow at the Oxford Institute for Energy Studies, where she specialized in nuclear safety in Eastern Europe and the Former Soviet Union, and conducted research into electricity policy at the EU level.

Her academic qualifications include a BSc in biology from Carleton University in Canada (where she focused primarily on neuroscience and psychology), a post-graduate diploma in air and water pollution control, an LLM in international law in development from the University of Warwick in the UK. She was granted the University Medal for the top science graduate in 1988 and the law school prize for the top law school graduate in 1997.

With people hanging so many of their hopes on an electric future, it seems timely to inject a dose of reality. This is meant as a cursory overview of some of the difficulties we are facing with regard to electrical power in the future. The extraordinary technical and organizational complexity of power systems is difficult to convey, and there is far more to it than I am attempting to address here.

First off: As we are entering a depression, within a few years hardly anyone will have the money to buy an EV. Second: the grid could not come close to handling the current transportation load even if EVs could become common. An economy based on EV transportation would have to be fueled by base-load nuclear that doesn’t currently exist and would take decades to build, and no one builds anything in a depression.

What they do is mount a losing battle to maintain existing infrastructure and hope they don’t lose too much before better times return. This depression will last long enough that the infrastructure degradation will be enormous, even without the impact of above ground events resulting from serious societal unrest. Attempts at recovery after deleveraging are going to hit a hard energy ceiling. Power systems are critical to the functioning of a modern economy, but are almost completely taken for granted. That will not be the case in a few short years.

The general assumption is that we are well on our way to building a future of renewable energy powered smart grids that will be able to accommodate not only our current demand, but much of our transportation load as well, thanks to EVs.

Unfortunately, much of this techno-positivist vision is nothing but pie-in-the-sky, thanks to the limitations of the electrical grid, as well as the low EROEI of renewable energy, the effect of receding horizons on the prospects for scaling up renewable energy development and the impending deflationary collapse of the money supply.

Investment in grid infrastructure, as with public infrastructure of most other kinds, has been sadly neglected for a long time. Much of the existing grid equipment is at or near the end of its design life, as are many of the power plants we depend on. (For instance, in Ontario we haven’t got around to paying for the last set of nuclear power plants we built, that are now approaching the end of design life and have had to be very expensively re-tubed in recent years.

The outstanding debt is some $40 billion, and the debt retirement charge we pay doesn’t even cover the interest.) Liberalization in the electricity sector has led to a relentless whittling away of safety margins in many places. Where we once had a system with a great deal of resilience through redundancy, that is generally no longer the case. In North America we now have an aging system with a very limited capacity for accommodating either new generation or new load, and we have great difficulty building any new lines.

As the power system was designed under a central station model to carry power in one direction only, with high voltage transmission and low voltage distribution, the modifications that would be required to enable two-way traffic, especially at the distribution level, are very substantial. Comprehensive monitoring and two-way communication would be required down to the distribution level, with central control (dispatchability, or at least the power to disconnect) of large numbers of very small generators.

The level of complexity would be vastly higher than the existing system, where there are relatively few generators to control in order to balance supply and demand in real time, and maintain system parameters such a frequency and voltage within acceptable limits.

The mismatch between renewable resource potential, load and grid capacity is considerable. Resource potential is often found in areas far from load, where the grid capacity is extremely limited. Developing this potential and attempting to transmit the resulting power with existing infrastructure to where it can be used would involve very high losses. Many rural areas are served by low voltage single phase lines, and the maximum generation size that can be connected under those circumstances is approximately 100kW.

Even where three-phase lines exist, so that larger generators can be connected, carrying the power at low voltage is particularly inefficient, as low voltage means high current, and losses are proportional to the square of the current. Building high-voltage transmission lines to serve relatively small amounts of renewable energy would be an exceptionally expensive and difficult proposition, especially in a capital constrained future.

Renewable energy generation far from load could amount to little more than a money generating scheme, as a premium rate will be paid from the public purse for the time being, but little of the power might reach anywhere it could actually be used.

Difficulties occur when generation proposed would amount to more than 50% of the minimum load on the feeder. At this threshold, special anti-islanding measures are required that add considerable cost to the grid connection. In North America, we have large geographical areas served by a network of long stringy feeders with very low load. Adding much of anything to this system will be very challenging.

In much of Europe, where renewable energy penetration is relatively high, the population density is high enough to be served by a three-phase grid composed of relatively short feeders with high loads. Many of the limitations faced by North America simply do not apply in places like Germany, Denmark or the Netherlands. The North American grid has more in common with rural Portugal or the Greek Islands.

Far from a future of greater high-tech connectedness under a smart-grid model, where EVs would charge at night and cover both transportation needs and power storage, we are looking at a much more fragmented picture. We are very unlikely to see massive AC grids covering anything like the area they do now, and much less likely to see power carried over large distances.

Rural areas may well be cut off and will have to provide any power they need themselves (yet another example of the core preserving itself at the expense of the periphery). This will mean a drastic cut in demand to a third world level in many rural areas, and may lead to other areas with no power production, and no money to build any, being abandoned completely or reverting to a pioneer lifestyle.

In urban areas, where dispossessed rural people migrate in very hard times, electricity provision in places down on their luck could look more like a picture of a favela in Rio de Janeiro. It’s a far cry from a neat and tidy high-tech vision of efficiency.

1 thought on “Nicole Foss on finance and bubbles

  1. Pingback: Elektrische Zahnbuerste

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