The great energy transition from fossil fuels to renewable sources of energy is underway. As fossil fuel prices rise, as oil insecurity deepens, and as concerns about pollution and climate instability cast a shadow over the future of coal, a new world energy economy is emerging. The old energy economy, fueled by oil, coal, and natural gas, is being replaced with an economy powered by wind, solar, and geothermal energy.
We inherited our fossil-fuel-based world energy economy from the nineteenth and the twentieth centuries. The nineteenth century was the century of coal. During the twentieth century oil took the lead. The twenty-first century will belong to wind.
It is time to design an energy economy for the twenty-first century, one that is carbon free, pollution free, and that does not require water for cooling as thermal and nuclear plants do. Once we define our goals, the field narrows quickly. Coal, oil, and natural gas are an important part of our energy past, but not of our energy future.
Global emissions of carbon dioxide (CO2), the principal climate-altering greenhouse gas, come largely from burning coal, oil, and natural gas. Coal, largely used for electricity generation, accounts for 44 percent of global fossil-fuel CO2 emissions. Oil, used primarily for transportation, accounts for 37 percent. Natural gas accounts for the remaining 19 percent.
Coal: The burning of coal is still expanding overall, largely because of its rapid growth in China and India, yet its use is declining in many countries and has been phased out in others. Some countries, such as Denmark and New Zealand, have banned new coal-fired power plants.
In the United States, the number two coal user after China, coal use dropped 12 percent from 2007 to 2011. This trend is expected to continue due in part to widespread opposition to coal now being organized by the Sierra Club’s Beyond Coal campaign. The burning of coal in the United States claims 13,200 lives each year. The campaign’s initial focus was to stop the licensing and construction of new coal-fired power plants. With nearly a de facto moratorium on new plants now in place, Sierra is now working with local groups to close the 491 coal-fired power plants currently operating in the United States. As of February 2012, the Sierra tally shows 106 of these plants scheduled for closure.
When New York City Mayor Michael Bloomberg announced in July of 2011 that he was contributing $50 million to the Beyond Coal campaign, Michael Brune, head of the Sierra Club, called it a “game changer.” With Bloomberg, one of the most successful businessmen of his generation, saying coal has to go, many others within the business community will reexamine their position on coal. It could also help push the United States, and indeed the world, to a tipping point on coal. Even before this announcement, a number of major investment banks had curbed their financing of coal operations.
Oil: Oil accounts for only 5 percent of the world’s electricity generation, with Saudi Arabia and Japan in the lead. Since oil-generated electricity is becoming ever more costly, it is expected to continue to decline rapidly in the years immediately ahead.
Since oil is used largely for transport, we can phase it out by electrifying the transport system. Already urban subway, light-rail systems, and high-speed intercity rail systems are electrified. And now with plug-in hybrid and all-electric cars coming to market, cars will soon be able to run largely on clean electricity. A study by the U.S. Pacific Northwest National Laboratory estimates that over 70 percent of the electricity needs of a national fleet of plug-in cars could be satisfied with the existing electricity supply, since the recharging would take place largely at night when there is an excess of generating capacity.
This shift from costly imported oil to cheap domestically produced wind energy is both environmentally and economically attractive. An analysis from Professor Michael McElroy of Harvard indicates that using wind-generated electricity to operate cars could cost the equivalent of 80-cent-a-gallon gasoline.
Oil is acquiring an increasingly negative image as production shifts from land-based oil fields to off-shore fields with the potential for huge spills—witness the Gulf of Mexico BP spill, an even larger spill off the coast of Nigeria, and another spill off the coast of Brazil. Further raising pollution levels is the growing share of oil coming from tar sands, as in Canada’s Alberta province, and from oil shale.
Natural Gas: With natural gas, there is a strong industry campaign not only to promote natural gas but to sell the idea that it is much more climate-benign than coal because its carbon emissions are only half those from burning coal. This claim is being challenged by the scientific community.
A recent Cornell University analysis of natural gas produced by hydraulic fracturing, or fracking, a much-touted key to expanding production, indicates that gas extracted in this manner is even more climate-disruptive than coal. This is largely because of the methane leakage associated with the technology. A study by the National Center for Atmospheric Research (NCAR), a U.S. government-supported research center, has reached a similar conclusion.
Beyond this, industry claims of vast gas reserves that would be available with fracking in the United States were grossly overstated. An August 2011 U.S. Geological Survey assessment indicates the additional technically recoverable reserves available from fracking are only one fourth those previously estimated by the U.S. Department of Energy.
Nuclear Power: The last half of the twentieth century brought us nuclear power, once widely touted as the electricity source of the future. Although nuclear reactors supply 13 percent of the world’s electricity, it has been clear for some time that nuclear power has a limited role in our energy future. It is simply too expensive.
The two countries most often cited as success stories for nuclear power are France, which gets over 70 percent of its electricity from nuclear plants, and China, the leader in building new nuclear plants. In reality, while France is building a single 1,600-megawatt nuclear plant, it is planning to develop 25,000 megawatts of wind generating capacity by 2020, of which 6,800 megawatts are already online. In China, which has 11,800 megawatts of nuclear generating capacity and 62,400 megawatts of wind generating capacity, wind power is already leaving nuclear power in the dust. While nuclear facilities take years, and sometimes decades, to get up and running, wind farms can go up in a matter of months. Both France and China are turning to wind big time.
More recently, the Fukushima nuclear meltdown in Japan and the associated release of radiation into soil, air, and water is helping lower the curtain on the nuclear era. The decline of nuclear power, initially driven by economics, is now also driven by fear.
Among the renewable sources of energy—wind, solar, and geothermal—each has a major role to play, but wind is on its way to becoming the centerpiece of the new energy economy.
As of 2012, world solar generating capacity totals 67,000 megawatts and geothermal electric generating capacity totals nearly 11,000 megawatts. Wind capacity is 238,000 megawatts.
Solar Power: The growth in solar cells that convert sunlight into electricity can only be described as explosive, expanding by 70 percent in 2011. The world’s 67,000 megawatts of PV installations can, when operating at peak power, match the output of 67 nuclear power plants. Solar-generated electricity is particularly attractive in desert regions such as the U.S. Southwest or North Africa because peak generation meshes nicely with peak air conditioning use.
Germany, with an installed PV power generating capacity of 24,700 megawatts, is far and away the world leader in installations. Italy is second with 12,500 megawatts, followed by Japan, Spain, and the United States.
Early photovoltaic installations were all small scale—mostly residential rooftop installations. Now that is changing as utility-scale PV projects are being launched in several countries. The United States, for example, has under construction and development more than 100 utility-scale projects, adding up to 22,000 megawatts of generating capacity.
In July 2009, a group of 11 leading European firms and one Algerian firm, led by Munich Re and including Deutsche Bank and Siemens, announced that they were going to craft a strategy and funding proposal to develop utility-scale solar thermal generating capacity in North Africa and the Middle East. Their proposal would meet the needs of the producer countries and supply part of Europe’s electricity via undersea cable.
This project, the Desertec Industrial Initiative, could develop 300,000 megawatts of solar generating capacity—huge by any standard. It is driven by concerns about disruptive climate change, by depletion of oil and gas reserves, and by heavy dependence on gas from Russia, a risky source. Morocco is already planning five large solar-generating projects, ranging from 100 to 500 megawatts in size. Algeria reports that it has enough harnessable solar energy in its desert to power the world economy.
With installations of solar PV climbing and with costs continuing to fall, cumulative PV generating capacity, growing at 40 percent per year, could reach 1,100 gigawatts (1 gigawatt = 1,000 megawatts) in 2020, roughly one fifth of current world electricity generating capacity of 5,000 gigawatts from all sources. Although this estimate may seem overly ambitious, it could in fact be conservative. It is now often cheaper to install solar panels for individual homes in developing country villages than it is to supply them with electricity by building a central power plant and a grid.
Geothermal Energy: Among renewable sources of energy, geothermal is the last to gain momentum. Many countries have enough harnessable geothermal energy to satisfy all of their electricity needs. Despite this abundance, as of 2012 only some 11,000 megawatts of geothermal generating capacity have been harnessed worldwide, enough to provide electricity for some 10 million homes.
Roughly half the world’s installed geothermal generating capacity is concentrated in the United States and the Philippines. Most of the remainder is in Indonesia, Mexico, and Italy. Altogether some 24 countries now convert geothermal energy into electricity. El Salvador, Iceland, and the Philippines respectively get 26, 25, and 17 percent of their electricity from geothermal power plants.
In mid-2008, Indonesia—a country with 128 active volcanoes and therefore rich in geothermal energy—announced plans to develop 6,900 megawatts of geothermal generating capacity. It could run its entire economy with geothermal energy. Japan, a country known for its thousands of natural hot baths, could replace all its nuclear power plants with geothermal plants.
Among the geothermally rich Great Rift countries in Africa, Kenya is the early geothermal leader. It now has 200 megawatts of generating capacity and is planning to add 2,100 more by 2020, enough to more than double its current electrical generating capacity from all sources. The United States, with 130 confirmed geothermal plants under construction or development, will be bringing at least 1,000 megawatts of generating capacity online in the near term. Worldwide, this accelerating pace could yield 200,000 megawatts of generating capacity by 2020.
Wind Energy: Wind, which has opened a wide lead on both solar and geothermal energy, is emerging as the centerpiece of the new energy economy. Wind farms, now generating power in some 80 countries, have a worldwide generating capacity of nearly 240,000 megawatts. China and the United States are the world leaders with 62,000 and 47,000 megawatts of generating capacity, respectively. Germany, Spain, and India round out the top five.
Countries with the highest share of their electricity coming from wind include Denmark at more than 25 percent, Spain 16 percent, and Germany 8 percent. The United States gets 3 percent of its electricity from wind farms.
Within Germany, three states in the north are leading the world into the wind century. These include Saxony-Anhalt, which gets 48 percent of its electricity from wind, Brandenburg with 47 percent, and Mecklenburg-Vorpommern and Schleswig-Holstein, both at 46 percent.
Germany is only getting started. As of 2012, it is planning a massive harnessing of offshore wind resources. Some 25 planned offshore projects, totaling nearly 8,500 megawatts of capacity, are already licensed, with many more in the pipeline.
In the United States, 38 of 50 states now have utility-scale wind farms. Texas, Iowa, California, Illinois, and Minnesota are the leaders in generating capacity. Texas, long the U.S. leader in oil production, now also leads in wind electric generation, having eclipsed California in 2006.
Among the leading wind-harnessing states, South Dakota now gets 22 percent of its electricity from wind and Iowa gets close to 20 percent. In Texas, 7 percent of electricity comes from wind farms, but with transmission lines under construction to link both wind-rich west Texas and the Texas panhandle with the state’s population centers, this could double in the years ahead.
Over the last decade, world wind electric generating capacity grew at nearly 30 percent per year, its expansion driven by its many attractive features. It is abundant, carbon-free, and nondepletable. It uses no water, no fuel, and little land. Wind also is locally available, scales up easily, and can be brought online quickly. No other energy source can match this combination of features.
One reason wind power is so popular is that it takes very little land. Although a wind farm can cover many square miles, wind turbines occupy only one percent of that area. Compared with other renewable sources of energy, wind energy yield per acre is off the charts. For example, a farmer in northern Iowa can plant an acre in corn that yields enough grain to produce roughly $1,000 worth of fuel-grade ethanol per year or he can use that same acre to site a wind turbine that can produce $300,000 worth of electricity each year.
Since turbines occupy only one percent of the land covered by a wind farm, ranchers and farmers can, in effect, double-crop their land, simultaneously harvesting electricity while producing cattle, wheat, or corn. With no investment on their part, farmers and ranchers can receive $3,000–10,000 a year in royalties for each wind turbine on their land. For thousands of ranchers in the U.S. Great Plains, wind royalties will one day dwarf their earnings from cattle sales.
Wind is also abundant. In the United States, three wind-rich states—North Dakota, Kansas, and Texas—have enough harnessable wind energy to easily satisfy national electricity needs. An article in the Proceedings of the National Academy ofSciences calculates that China has enough harnessable onshore wind energy to expand its current electricity consumption 16-fold. And North Sea wind can easily supply Europe’s electricity needs.
Another attraction of wind energy is that it is not depletable. The amount of wind energy used today has no effect on the amount available tomorrow. In Texas, where oil money is now going into wind farms, investing in “wells” that will not go dry is increasingly attractive.
Unlike coal, gas, and nuclear power plants, wind farms do not require water for cooling. As wind backs out coal and natural gas in power generation, water will be freed up for irrigation and other needs.
Perhaps wind’s strongest attraction is that there is no fuel cost. Once the wind farm is completed, the wind generated electricity flows indefinitely with no monthly fuel bill. This enables wind farm developers to routinely offer 20-year fixed-cost power purchase agreements to utilities. It is this price predictability that gives wind a strong edge over natural gas with its long history of price volatility.
And wind farms scale up easily. Wind mega-complexes under construction dwarf the world’s largest coal or nuclear generating complexes. And it has happened almost overnight. Early on, wind farms were typically 50 to 100 megawatts. Then some wind farms were built with a few hundred megawatts of capacity. A wind farm now planned for Wyoming to supply electricity to the desert Southwest will have at least 2,000 megawatts of generating capacity. BP’s Titan wind farm complex in South Dakota, where construction has begun, is tentatively slated for 5,000 megawatts when completed. Once the transmission line linking the wind-rich Texas panhandle with load centers to the south is completed, the panhandle’s planned Mariah wind complex could reach 10,000 megawatts. Wind farms are already surpassing both coal, where the larger generating plants are 3,000 megawatts or so, and the largest nuclear complexes, which rarely go beyond 5,000 megawatts of generating capacity.
Developing Wind Energy
But in this young industry, a fledgling compared with coal, this is just the beginning. China has seven wind complexes under construction of more than 10,000 megawatts each. The largest, which is in Inner Mongolia province, will have a generating capacity of 38,000 megawatts when completed. This one mega-complex could satisfy the electricity needs of an entire country like Poland or Egypt.
Future wind complexes in the Great Plains, in the North Sea, off the coast of China, or the eastern coast of the United States, employing large, highly efficient wind turbines, may also have generating capacity measured in the tens of thousands of megawatts. Planning and investment in wind projects is occurring on a scale not previously seen in the traditional energy sector.
Wind farms can also be built quickly. While it may take a decade to build a nuclear power plant, the construction time for the typical wind farm is one year.
One of the obvious downsides of wind is its variability. But as wind farms multiply, this becomes less of an issue. The wind profile of a single wind farm can fluctuate widely, but since no two wind farms have identical wind profiles, each wind farm added to a grid reduces variability. A Stanford University research team has pointed out that with thousands of wind farms and a national grid in a country like the United States, wind becomes a remarkably stable source of electricity, part of the baseload.
In more densely populated areas, there is often local opposition to wind power—the NIMBY (‘not in my backyard’) response. But in the vast ranching and farming regions of the United States wind is immensely popular for economic reasons. For ranchers in the Great Plains, farmers in the Midwest, or dairy farmers in upper New York State, there is a PIMBY response (“put it in my backyard”). Farmers and ranchers welcome the additional income from having wind turbines on their land. Rural communities compete for wind farm investments and the additional tax revenue to support their schools and roads.
One of the keys to developing wind resources is building the transmission lines to link wind-rich regions with population centers. For offshore wind, this requires a whole new set of transmission facilities. Countries in Western Europe are planning such a grid to link to the vast wind resources of the North Sea.
There are already commercial precedents so grid builders are not starting from scratch. For example, ABB, a Sweden-based global leader in power and automation, has recently laid a 400-mile high voltage direct current (HVDC) undersea cable that links Norway, with its abundance of hydropower and wind power, to the Netherlands. Germany is building a heavy duty undersea cable to link to the wind-rich region of the Baltic Sea.
Off the east coast of the United States, where there are now plans to develop offshore wind farms stretching from Cape Cod to the Carolinas, Google, along with Marubeni and other investors, has announced plans to lay 650 miles of offshore cable that would parallel the coast, stretching from roughly New York to Norfolk, Virginia. The heavy duty cable network will facilitate the offshore wind development that can supply electricity to populous states such as New York, New Jersey, Pennsylvania, Maryland, and Virginia.
Perhaps the most exciting grid project under development is the so-called Tres Amigas electricity hub, a grid interconnection center, to be built in eastern New Mexico. It will link the three U.S. electricity grids—the Eastern grid, the Western grid, and the Texas grid. Tres Amigas, which will use high-voltage lines to link the three grids where they are close to each other, is a landmark in the evolution of the new energy economy. This initial linkage of the three grids allows electricity to move from one part of the United States to another as conditions warrant. By matching surpluses with deficits over a broader area, electricity wastage and consumer rates can both be reduced. The groundbreaking is expected in July 2012, with construction starting the following fall.
U.S. long-distance transmission lines that are already operational include those linking wind resources in Washington and Oregon with California and its 38 million consumers. Two HVDC lines are slated to link wind farms in wind-rich Wyoming with California. One is already under construction. Another will link southern Idaho, western Wyoming, and Nevada with California.
A similar long-distance line to link the wind resources of Kansas, Oklahoma, and the Texas panhandle with the southeastern United States is in the planning stages. Several other transmission lines already built, under construction or planned, are designed to carry wind electricity from North and South Dakota to Minnesota, Wisconsin, and other states in the industrial Midwest.
Renewable Energy Potential
It was noted earlier that world electricity generating capacity in 2010 was roughly 5,000 gigawatts. We at the Earth Policy Institute anticipate that the roughly 1,000 gigawatts of hydropower generating capacity in 2010 will increase to 1,350 gigawatts in 2020. We noted earlier that solar generating capacity could reach 1,100 gigawatts. Geothermal energy could increase to 200 gigawatts in 2020. These three would total roughly 2,600 gigawatts by 2020.
Now for wind. How fast can we expand wind electric generation? Over the last decade, the most rapid annual growth in world wind electric generation was in 2001 when it increased 37 percent. The slowest was 21 percent in both 2004 and 2011. At the national level, U.S. wind generating capacity expanded by 45 percent in 2007 and 50 percent in 2008. Meanwhile, China, starting from a small base in 2005, expanded at over 100 percent per year for four consecutive years, reaching 26,000 megawatts of generating capacity in 2009. It now has more than 62,000 megawatts. Whether we look at past wind power growth rates for the world, the United States or China, we know that rapid growth in wind generation is possible.
If climate change were to become chaotic and the world decided to cut CO2 emissions quickly, it could be done with a wartime-like mobilization to expand wind generation. If we were to pull out all the stops and expand wind generation during this decade at 40 percent per year, the 238 gigawatts of generating capacity at the end of 2011 would expand to 4,900 gigawatts in 2020. This, combined with the hydro, solar, and geothermal generation levels cited above, would total 7,500 gigawatts of generating capacity, enabling us to back out all of the coal and oil, and most of the natural gas, now used to generate electricity. Nighttime surpluses would permit recharging batteries as gasoline-burning cars are replaced with plug-in hybrids and all-electric cars. This would facilitate backing out much of the oil used for transportation.
One reason for the unusually large 7,500 gigawatts of generating capacity, which is much higher than the roughly 5,000 gigawatts of world generating capacity today, is that the capacity factor, the share of time a generating facility produces electricity, varies widely. In the United States, for example, the U.S. Department of Energy calculates coal’s average capacity factor at 72 percent and wind at 36 percent. This means that one needs twice as much wind-generating capacity as that of coal to produce the same amount of electricity.
For purposes of calculation, let’s round the 4,900 gigawatts of wind generating capacity in the new economy to 5,000 gigawatts. This would require 2.5 million wind turbines of 2 megawatts each or roughly 300,000 wind turbines per year over this decade. Can we produce those? For sure. Keep in mind that the world today is producing some 70 million cars, trucks, and buses each year. If we can do that, we can certainly produce 300,000 wind turbines per year.
Many of the wind turbines needed to back out fossil fuels in electricity generation worldwide could be produced in idled automobile assembly plants in the United States alone. The great thing about using this idled capacity, aside from putting skilled workers back to work, is that it already exists. It would, of course, need to be modified to shift from automobiles to wind turbines, but it is entirely doable. In World War II, Chrysler went from making cars to tanks in a matter of months. At Ford Motor Company’s vast Willow Run assembly plant, B-24 bombers were rolling off the assembly line in a steady flow around the clock. If we could do that then, we and the rest of the world can certainly build the 300,000 wind turbines per year we now need to build the new energy economy and stabilize climate.
Wind, which is abundant, cheap, and easily harnessed, almost certainly will be the centerpiece of the new energy economy. During the fossil fuel era, investments were short term, yielding returns only until the oil wells dried up or the coal veins were depleted. Then new investments were required on an ongoing basis. Now, for the first time since the Industrial Revolution began, we are investing in sources of energy that can last as long as the earth itself.