Archive for the 'Energy from the desert' category

Great News About Coal in China

Apr 16 2014 Published by under Energy from the desert

Greenpeace has published a short report on recent trends in Chinese coal consumption, titled “The End of China’s Coal Boom“. Thanks to this Tweet by Kees van der Leun for the link.

The report shows plans of multiple provinces in China to either reduce or massively reduce the use of coal. Beijing stands out with a reduction of 50% over the next couple of years. This is partly motivated by the fact that coal is not only bad news for the climate. It also means massive air pollution.

Collectively, these measures would lead to 1.3 Gt less CO2 emissions in 2020. In comparison, the EU target for 2020 is only 0.451 Gt. Clearly, these measures will have a massive impact.

Such a reduction in coal consumption will need other energy sources. That of course means rapid growth of renewable. As pointed out in the Greenpeace report, solar has gone to over 20 Gw installed capacity in 2013, up from only 8 Gw in 2012 and less than 1 Gw in 2010. That’s exponential growth. Wind is at around 89 Gw in 2013, up from 44 Gw in 2010 and less than 6 Gw in 2007. Again, that’s exponential growth.

This is of course also very good news for any project of generating renewable energy in the Mongolian Gobi desert. The big market in China with a need to replace massive coal use is just next door.

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Bad News for E-ON

Apr 12 2014 Published by under Energy from the desert

E.ON is one of the big German power companies. They decided to leave the Desertec industrial initiative, according to this article at WDR. Thanks to this Tweet by Heiko Stubner for the link.

Maybe they think that they still have a chance to make money with their conventional power stations. But those times are gone. Even without Desertec, renewable energy is eating their lunch.

The big energy companies in Germany need a new strategy. Desertec is one alternative for them.

They own 30 percent of the London Array, which is good news for them and for the climate. But they may fall back in the race for owning a piece of the Northern African desert energy infrastructure.

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Solar Energy: Build Once, Use Forever (BOUF Principle)

Dec 14 2013 Published by under Energy from the desert

Build once, use forever (BOUF). That’s a desirable property solar power has.

Here are some real world examples to illustrate this:

The Suez Canal was opened in 1869 and is still in use today, 144 years later. The final cost of building that was more than double the original estimate, and the Suez Canal Company was in financial difficulties for the first couple of years after the opening, since traffic was less than expected.

Does anyone today care what the cost of building that project was in the 19th Century? Isn’t it evident that this piece of global infrastructure that has dramatically increased World trade has paid its cost back to humanity many times over?

Another example would be the Itaipu dam, the World’s largest hydro power plant by electricity generated per year (94.68 TWh in 2008, supplying 90 percent of electricity consumed in Paraguay and 19 percent of electricity consumed in Brasil).

It was built in a joint effort between these two countries between 1966 and 1984. Construction cost was 19.6 billion dollars.

And like the Suez Canal,  it will very likely be used for centuries to come. That’s important when discussing costs. For such a project, the real cost per kWh for society is extremely low. The calculated cost for the company building this infrastructure of course needs to reflect the fact that they must break even in a reasonable amount of time. They can’t wait centuries to pay back their capital.

But that doesn’t change the fact that energy from such a BOUF project is basically free after the capital investment has been paid back after a couple of decades. The turbines may need to be replaced every once in a while, since they have moving parts. But the dam follows the BOUF principle. Build once, use forever.

The same is probably true for solar power. Solar panels have no moving parts. Therefore I expect them to be useful for centuries, just like dams and canals. That in turn obviously means that if you place a large number of solar panels in the deserts in Africa and Mongolia, the cost of doing so as calculated per kWh generated over a couple of centuries would be basically zero.

The same is true for the mirrors used for concentrated solar power. A mirror will reflect sunlight for centuries, just like a dam will collect water for centuries. Like with the dam, you need to replace the turbines every once in a while, but you get a source of energy to power them for free, if you take this long-term view.

The same is true for the towers built to mount wind turbines on. While the turbines will only work for decades, the towers may be used for centuries.

In contrast, fossil fuel is ruled by the principle “Burn Once, Lose Forever” (BOLF).

Fossil fuel is basically only very old biomass. Humanity is burning through stocks of biomass stored in 5.3 millions of years every year. The only reason fossil fuel looks so cheap as it does now is that no one considers the cost of replacing it once its gone. Once that little cost factor enters the equation, people would be crazy to burn this treasure just to get a bit of heat.

And that’s before global warming costs even get mentioned.


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Chinese Grid Company SGCC Joins Desertec Industrial Initiative

Dec 13 2013 Published by under Energy from the desert

Reports Daniel Wetzel in this Welt article (in German). Thanks to this tweet by Stefan Krauter for the link.

This is very welcome news. Obviously any Desertec project in the Mongolian Gobi desert will profit from the World’s largest utility getting involved.

I have blogged about this before, so I am going just to reprint my last comment about this from June:

Daniel Wetzel has published a rather strange article at Die Welt (in German) discussing changes in the membership of the “Desertec industrial initiative”.

The weird thing is, the article asserts that the initiative is losing a lot of members in its headline, but it reports that there were 12 companies founding the initiative in 2009, and there are 20 members right now. I am not sure how the math is supposed to work out on that. In my view, 20 is more than 12.

And he plays down the rather significant fact that the Chinese company SGCC is applying for membership. I have blogged about this last November, when the news of SGCC applying for membership broke. But let’s just state some facts about them again.

Anybody checking the Wikipedia article on SGCC will find out that:

  •  SGCC is the largest electric utility in the World.
  • They have over 1.5 million employees.
  • They had over $265 billion in revenue in 2011.
  • They had over $5.6 billion in net income in 2011.

Just for reference, let’s compare that to the Siemens losers who have left the Desertec industrial initiative. According to their own homepage, they have:

  • 86,000 employees (around 5.7% of SGCC) in 2012.
  • Revenue only a measly EUR 27.5 billion (around 10% of SGCC) in 2012.
  • Net income 2.2 billion in 2012 (Siemens as a whole lost over EUR6.7 billion. Makes sense that they wouldn’t be able to afford the Desertec industrial initiative membership fee).

The article explains that the membership will decide next week if they accept SGCC as a new member. I think it would be highly advisable to do so.

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Some Questions on Energy from the Mongolian Gobi Desert

Dec 04 2013 Published by under Energy from the desert, Mongolia

I received a couple of questions from a journalist who is working on a story about renewable energy from the Gobi. I’ll answer them here, since that makes it more convenient to link to previous posts.

Question 1: Why can the Asian super grid vision possibly meet Japan’s future energy security needs?

Whatever the Asian super grid delivers to Japan’s future energy security needs will be on top of whatever would be available without that project.

Assume for example that the project is delivering 10 percent of Japan’s electricity in 2025. Then China decides to turn off the delivery (they can do so, since the power lines would run over their territory). That would mean that Japan would be back to the status quo right now.

It would of course also mean that Japan might want to keep relations to China so friendly that this kind of thing doesn’t happen.

Before electricity from Mongolia reaches the Japanese market, it will reach the Chinese market, which is located conveniently right next door. That will be of major strategic importance for doing something about climate change. There is still a lot of coal capacity in China to replace, and a major Gobi project could contribute to that goal.

Question 2: Do you think Japan, South Korea and China will ever be able to strike a deal on the interconnected grid system?

I don’t know. We will need to wait and see.

But the way to go ahead is to strike a deal with Korea first. Masayoshi Son does have some contacts there. There is no need to wait for everyone to be on board before building the first power lines. Just go ahead and do the Korea connection first.

Question 3: Project finance represents another big question mark. Have multilateral institutions showed any support in terms of low cost financing so far? Can we expect the RE produced in the Gobi desert to reach grid parity?

Multilateral institutions like the World Bank and the German KfW have been involved in financing the Ourzazate project in Morocco, which is one of the first projects to go ahead in the Sahara Desertec vision.

The European Development Bank and the Netherlands Development Finance Company have already provided the first modest $85 million in funding to Newcom in 2012.

Softbank has plans to invest $626 million in a 300 MW wind project in the Gobi. They also have received a lease from the Mongolian government for an area larger than the Tokyo prefecture to use for further projects.

And Son thinks he can get wind energy for 3 cents a kWh in the Gobi, which would be pretty good if true. Eventually solar will of course be even cheaper.

Last question: How is the casino development related to the whole Asia super grid project?

If Mongolia goes ahead and builds a casino at Zamyn-Uud, obviously that project would need a lot of electricity for the many hotels that go with such a project. That would be good for the desert energy project, since it would provide a source of demand close up. One alternative would be to sell power to the Oyu Tolgoi project, where the plan still seems to be to build a stinking coal power plant.


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Renewable Energy Needs Copper (and Steel and Aluminium)

Nov 01 2013 Published by under Energy from the desert, Mongolia

Says this article at Nature Geoscience. Their numbers:

If the contribution from wind turbines and solar energy to global energy production is to rise from the current 400 TWh to 12,000 TWh in 2035 and 25,000 TWh in 2050, as projected by the World Wide Fund for Nature, about 3,200 million tonnes of steel, 310 million tonnes of aluminium and 40 million tonnes of copper will be required to build the latest generations of wind and solar facilities. This corresponds to a 5 to 18% annual increase in the global production of these metals for the next 40 years.

Right now, that means that investing in Turquoise Hills Resources becomes even more interesting in the long term. I recall that I have them on my List of Global Warming Stocks.

Of course, Oyu Tolgoi is one of the World’s largest copper deposits. If demand is going up because of the transition to renewable energy, shares of Oyu Tolgoi will be worth more in ten years as they are now.

And if a large scale renewable energy project in the Gobi desert actually gets to speed, it will of course help to have the necessary copper resources right at the doorstep of the project, which would be another strategic advantage the Gobi has over the Sahara for the concept of energy from the desert (besides the convenient location right next to the gigantic Chinese energy demand).

Full disclosure: I do not hold Turquoise Hills Resources stock right now, but intend to invest there in the next couple of months.

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Suez Canal Project in Mongolia

Oct 31 2013 Published by under Energy from the desert, Mongolia

The Business Council of Mongolia just reported that a company called “GDF Suez” has signed a memorandum of understanding with Newcom on developing renewable energy resources in Mongolia, at the occasion of the French Foreign Minister visiting Mongolia.

I know Newcom as the leading Mongolian renewable energy company. They are operating the Salkhit wind farm.

I had not heard of GDF Suez, though.

From their Wikipedia article I understand that this company has its roots in the 19th Century project of building the Suez Canal. The “GDF” part comes from “Gaz de France”, a company that joined in a merger in 2006.

Of course, the Suez Canal was a large scale project with a significant global impact.

I think that a large scale renewable energy project in the Mongolian Gobi desert may have at least the same kind of impact as the Suez Canal had at the time.

Bonus link: My book “Energy from the Mongolian Gobi desert” (Free PDF file).


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Fifty Fifty: A Simple Observation on the Price of Oil and Solar

Oct 09 2013 Published by under Energy from the desert

About a week ago I blogged about a new report on the cost Germany has to pay for fossil fuel commissioned by the German Green party and written by Steffen Bukold. I noted that all renewable energy is domestic energy. Getting the transition to renewable energy done faster will save Germany trillions of dollars in costs for fossil fuel imports.

But here is another interesting fact I learned from that study. At page 17 the study tells us that in 1972 one barrel of oil cost $2 in average. In contrast, in 2012 that number had gone to over $100. Oil prices increased by a factor of 50 in only forty years.

And from the Wikipedia page on solar cells we can see that the cost of solar was $100 a watt in 1972. So if the cost of solar was $2 per watt now, solar would have gone down by a factor of fifty in the same time oil went up by a factor of fifty. That would be nice for the exact symmetry achieved. It also would make my headline correct.

However, in the real world things don’t play out quite that way. Actually solar is now at around $0.46 per watt, and it was around 0.50 in 2012. So that’s a decrease by a factor of 200 in forty years.

That of course means that the relation between prices of oil and solar has changed by a factor of 10,000 in those last forty years.

And there is no end in sight. Solar will get cheaper. And oil will get more expensive, as the low hanging fruit oil fields become depleted and new energy demand from China and India kicks in.

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“Gravity Power” Energy Storage Plans in Germany

I am familiar with the idea of using large holes in the ground with a piston of mountain size moved hydraulically as an alternative to pumped water energy storage from Eduard Heindl’s concept of “Lageenergiespeicher” (Statusenergystorage, in a direct translation).

Instead of pointing to past posts on this blog on the concept, I’ll just go ahead and reprint them:

Moving Mountains for Energy Storage, July 1, 2013

TedX talk by Professor Heindl on his idea of storing energy:

I have blogged about this concept before, in November 2011. I like it. As Heindl explains in this talk, it is cheap (per kWh), has a high efficiency, and a low footprint.

The only problem is that there are none of these projects built yet. It may work, but it is still an unproven concept.

Eduard Heindl “Energiespeicher” blog, Nov. 17, 2011

At the Brave New Climate blog, there is a thread running on energy storage right now. One of the comments in that thread pointed to the “Energiespeicher” blog by German professor Eduard Heindl. I just added a permanent link to that blog (it is in German language).

“Energiespeicher” means energy storage, and professor Heindl has an interesting idea he calls “Lageenergiespeicher”, which might be translated as “Sysiphus” into English, or “statusenergystorage” for a more direct translation. He wants to cut out a VERY BIG ROCK out of a mountain and float it on water.

That would seem to get much more storage power per square meter of area used. A rock 500 meters in diameter and 1000 meters in depth would yield 1.7 TWh in storage capacity, using less than 1% of area and costing less than 10% compared to pumped hydro.

This was always an interesting concept. That’s because in contrast to pumped hydro, you don’t need mountains, and you need much less area, since most of the action is happening under the ground.

The problem until now was that Heindl promoted the idea, but there was no project actually implementing the concept in sight.

That has changed.

From this article by Wolfgang Kempkens at WirtschaftsWoche Green (in German) I learn that an American company called “Gravity Power” has plans to actually build three “Gravity Power Modules” in southern Germany. According to the article, they would have a combined capacity equal to the pumped hydro storage plant at Goldisthal in Eastern Germany.

According to Wikipedia, this is the largest hydro plant in Germany, with a capacity of 1,060 MW and the ability to store up to 8.5 GWh.

However, the area needed for this installation is 55 hectares for the upper basin alone. Over 200 hectares of forest was removed for building it, leading to strong opposition from environment protection groups, including a lawsuit that was settled for 3.58 million Euros.

In contrast, according to the article at WirtschaftsWoche Green, one “Gravity Power Module” needs only 12,000 m2 (1.2 hectare), or about two soccer fields, so three of them come at a cost of 3.6 hectares, compared to the 200 hectares needed for Goldisthal.

There is probably nothing to keep people from installing some solar panels and wind turbines on top of the shaft.

Readers of the “Silo saga” by Hugh Howey may find the concept attractive for other reasons.

“Gravity Power” has received patent US 8166760 B2 for their “System and Method of Storing Energy”. The application for that patent was filed on Feb 4, 2009. In contrast, Eduard Heindl says he got his idea in 2010, which would be later than this patent application.

Here is a 2011 Youtube record of a presentation by Gravity Power CEO Tom Mason about the technology:

He notes several advantages of this technology: They can build such a system in a couple of years, as opposed to the close to 10 years needed for a pumped hydro project. One reason is that permitting will be much easier, since it doesn’t use much land, has no emissions, and doesn’t use any water once the system is filled. Constructing the shaft takes only about a year, the longer time is needed to get the turbines delivered.

The system scales nicely, and they can install it wherever they can bore a large hole in the ground, which means they can go close to the existing grid or demand centers.

They can save about 10 percent of the cost by using abandoned mine shafts. Mason quoted a cost around $1000 a kW in his 2011 presentation, including 20 percent contingency and 15 percent profit. That compares to between $2,000 to $3,500 for pumped hydro projects if one starts from scratch, as opposed to using some existing reservoir.

They expect beating traditional pumped storage efficiency (which is between 75 and 80 percent), because they can work with constant water pressure, while pumped storage works with variable pressures.

Tom Mason sees Germany as a great opportunity, since replacing nuclear with renewable means Germany will need storage.

He also notes that this system is as flexible as possible, it can be turned on and off in a matter of seconds.

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Asahi Article on Asia Super Grid

Sep 11 2013 Published by under Energy from the desert, Mongolia

Asahi just published an article about Softbank CEO Masayoshi Son’s idea of an “Asia Super Grid” (in Japanese language). This is the first installment in a series of articles. Thanks to this tweet by Tetsunari Iida for the link.

The “Asia Super Grid” concept wants to link Asian electricity markets, like those in the European Union, with a special view to building large-scale renewable energy in the Gobi desert. See my book “Energy from the Mongolian Gobi desert” for some detail.

I learn from this article that Son has set up a joint venture corporation with a Mongolian partner (probably Newcom, though the article doesn’t say so). They have already received a lease from the Mongolian government for an area of 220,000 hectares, which is larger than Tokyo prefecture and would be enough to support 10 GW of wind capacity.

The article says Son wants to generate the wind energy for less than 3 yen per kWh (a figure he also cited last May at a “Clean Energy Summit” in Korea, see my blog post at the time).

Obviously this kind of project needs political support. The article describes that Son has been able to talk to the highest levels of both the Chinese and the Korean governments.

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