The developing world (non OECD) is on a path to a high energy future based on fossil fuels. It is simply the affordable path and as such the only viable path out of poverty. Most of the of the doubling of world energy consumption by 2050 is projected to come from the developing world, by which time it will consume more energy than the developed world.

The developed world (OECD)  is already high energy and despite much weeping and gnashing of teeth, is projected to continue burning more fossil fuels at current rates into the foreseeable future.

 Interestingly, the world already spends about $200B/y on alternative energy generation, over half its $400B/y overall investment in new electricity generation. This is divided roughly equally between the OECD and non-OECD countries. This is an objective measure of the considerable amount the world is collectively currently willing and able to pay for fossil fuel free energy.

Unfortunately this currently only buys about 17GW average generation, or about 1% of world electricity generation, or about 0.1% of world primary energy. This is insufficient to reduce CO2 emissions which are projected to rise every year into the foreseeable future. The level needed to be on a path to reduce CO2 emissions is 500GW to 1TW average new clean generation every year. This is twenty to fifty times current levels.

This highlights the patently obvious but constantly ignored fundamental nature of the problem. To paraphrase James Carville “Its the economics, stupid.” This succinct phrase gets to the heart of political reality. No matter if the energy problem is seen as climate change, energy security, resource depletion or poverty, the real problem is the economics. Energy is just too big a part of the world economy for it not to be so. Significantly increasing the cost of energy by replacing fossil fuels with current high cost wind, solar and nuclear will never be politically acceptable.  

So we are at an impasse. The current technologies lead to policy proposals that are politically unacceptable and a very polarized debate that can never succeed in forming a consensus.  

The politically viable solution to this economic problem is new sources of clean sustainable energy at lower cost than fossil fuel energy. Unfortunately the current energy policy consensus is frozen like a deer in the headlights. The common wisdom is no such present or near future low cost technology exists and the need for immediate action means we should find ways to finance more of current high cost technologies. Unfortunately this policy approach violates the first law of politics and as such has failed and is doomed to continue to fail.

Breaking the impasse needs fresh thinking to get more options on the table. The consensus that there is no possible low cost energy alternatives is a self fulfilling prophecy if it leads to no attempt to search for such solutions.

Policy proposals tend to be broad and vague. Here is an explicit proposal that is not meant to compete with the status quo. Relative to world energy investment of about $1.6T/y, $10B/y seems an affordable amount to spend on energy R&D focused exclusively on high risk, clean electricity generation, power plant solutions. This is not basic research and it is not government R&D. A model is Space-X. Space-X is a private company focused on a product and works on fixed price contracts with fixed deliverables. Its like venture funding. Say The US, Europe, and China each established $3B/y venture funds to fund high risk energy development companies. By high risk, I mean high risk.

Already, despite starvation levels of investment, some such companies exist. There are several fusion energy companies. There are several companies focused on sustainable fission of Thorium and U238. There are high altitude wind companies, wind on the ocean, solar in space, the desert, and the stratosphere. Funding these and others to start with would bring out a lot more. Companies would start at say $10M/y or more depending on their current stage of development. Funding would be for fixed deliverables and if on successful paths a few would get to say $500M/y, keeping the average at around 100 companies at $100M/y. This portfolio approach would lead to exploring many approaches and the probability of significant advances in less than five years. One significant success is all that is needed.  Its not inconceivable that private equity would eventually join the party, and share the risks and rewards.

By Edmund Kelly

This chart visually illustrates the economics of energy discussed in the previous post. The left column shows all major energy segments. The middle column expands the energy investment segment and the right column expands the power generation investment segment. The numbers in each segment are Trillions of dollars. Its interesting that Solar is the biggest segment of power generation investment but it provides the lowest average power, a testament to the political power of renewable energy. 

By Edmund Kelly

Alternative energy exists solely because of a political will to make it so.  It has been uneconomic from its modern inception in the 1970's, driven by the first oil crises. As a result, market driven economic viability has never been a central part of the alternative energy mindset.  At its core it has been driven by two perceptions. The first was simply the need for a clean fossil fuel replacement largely regardless of cost. The second was that given time, costs would reduce to make them more acceptable.  

The political will influenced government to provide subsidies to nurture the business. These subsidies now exceed $100B/y of investment worldwide and prop up a total investment of about $250B/y. However a business that depends so heavily on government support is subject to all the problems of such reliance. Firstly government support is volatile, driven by who wins elections. Secondly, subsidized industries are notoriously inefficient. Any long term subsidy regime encourages business that live off the subsidies with little or no incentive to improve.

The perception that costs would reduce has been borne out by time, but the path has been a rocky one. The recent history of PV shows the erratic nature of this progress.  On a day to day basis no one sees the big picture. When PV prices were stable for a decade, the perception was of stagnation which led to betting on thin film PV. When prices were falling the perception was they would continue to fall, regardless of fundamentals. Also, market size of a heavily subsidized industry is not perceived as inextricably tied to the size of subsidy.

If government continues to support the PV business, costs will decline to a point where PV is competitive for some fraction of energy for sunny locations, but to be a complete solution other technologies like long distance transmission and storage have to become economically viable as well. The current rate of improvement put that point out beyond 2050. This is the status quo. Governments willing to provide limited subsidy, a business happy to live of this subsidy with its current size and rate of growth and an alternative energy political consensus that thinks this is actually working.

This status quo is not reducing CO2 emissions and will not reduce CO2 emissions out to 2050. Realists point out that change of the degree necessary to reduce CO2 takes many decades and huge political will. While alternative energy imposes large new costs, the current small political will for change is directly measured by the small amount we are collectively willing to pay for subsidies. The only way to increase the political will is to reduce the cost at a faster rate or better yet turn things around and make clean energy an economic benefit.  This perception is sadly lacking.

The optimists place their hope in technological breakthroughs, and so we get daily updates on basic research, most of which we know will go nowhere, but create the illusion of progress.  The sad reality is that basic research takes decades to make it from the lab to the market and decades more to achieve large scale.

To scale quickly a technology needs both a long gestation to viability and to be mass producible. PV has recently demonstrated that it is at this point. The rapid scalability has surprised governments that provided subsidies assuming a slower ability to scale. Germany spent over $150B in two years for about 15GW before they adjusted. China just ramped to over 12GW in one year from a standing start for a lot less.

So PV technology is at a point where we can make and deploy as much as we can afford. The problem is the high cost of the resulting  electricity, especially if you count the costs of intermittency and storage, is just too much money for economies to sustain.

StratoSolar is only PV in a new location. It reduces the cost of resulting PV electricity to market competitive levels and increases the reliability of the supply.  There is no new technology or resource that limits its ability to scale. If it is proven viable, the major thing that needs to scale is PV manufacturing, the thing that has already demonstrated scalability. This is a lot like computers in the late 1980s. A large CMOS semiconductor manufacturing business had matured and companies like Sun Microsystems that built computers based on this technology rapidly scaled to volume in the millions. This pattern repeated itself for PCs in the 10s to 100s of millions and recently for mobile phones in the billions, as the cost of computers reduced with volume over time. The common elements are ability to scale supply and an affordable product with sufficient demand to match the supply. 

From an investment perspective the risk is like betting on a Sun Microsystems. They had engineering and market risk, but they were fundamentally enabled by available semiconductor technology. They were small investments in small teams that integrated existing technologies to build new products for very large new businesses. The market demand they produced could be met  by the scalable semiconductor supply. Similarly, StratoSolar can create a demand that can be met by a scalable PV semiconductor supply.

It’s continuing the triumph of the semiconductor age.

by
Edmund Kelly

The non-fossil energy from current nuclear, wind and solar are failing and will continue to fail in reducing CO2 emissions. This is borne out by all credible projections by the EIA, IEA world bank and others. Optimists in all current non-fossil energy camps rationalize why these projections are wrong, but my assessment agrees with the objective observers.

Too much of alternative energy is wishful thinking. No current choice is economically viable so the common reasoning is to pick one and argue it will get better if we support it wholeheartedly, and by implication reject the other alternatives. This makes for a polarized debate that goes nowhere.

Currently the US spends about $12B/y on green energy. With current politics its hard to see this amount growing. This amount of subsidy will support wind, solar and bio at slow growth rates if they get cheaper. This is the acceptable amount of subsidy that balances the current political realities. Realistically the subsidy level is more likely to fall, with the wind PTC on a yearly cliff and the solar ITC expiring in 2016.

Energy is too big a part of the economy with too many powerful entrenched interests for government to afford the subsidies or fight the battles necessary for any meaningful impact based on currently available technologies.

Current economic and political realities make it clear that economically viable clean energy that does not need subsidy is the only way to grow clean energy.

My point is not that we should stop supporting current non fossil fuel alternatives. What we do need to do is to invest intelligently in new  non fossil technologies that might have the potential to succeed. While the debate centers on in fighting between the current alternatives, and a search for more taxes and subsidies to prop them up, a real debate on how to grow the pool of options cannot start. The air has been pulled from the room.

A new approach to fund power plant development (rather than basic research) is needed. A model I like is SPACEX. This is essentially a government funded system level startup that is succeeding. Rather than the cost plus model of government contractors, this was essentially funded with fixed priced contracts for tangible results. Unfortunately the DOE has not learned from NASA's experience, and even if it had, entrenched fossil fuel interests ensure that Congress will block any attempts at reform.

A stepped funding model that offered initially small funding for tangible results, with more funding as viability is demonstrated would allow a range of new ideas to be tested cheaply. There are currently a handful of fusion energy and advanced sustainable safe nuclear companies that could benefit from investments in the $10M/y to $100M/y range. There are some crazy wind and solar alternatives that might succeed. Were they to demonstrate they were on a path to viability, larger funding for the few that make it would be forthcoming.  A yearly budget of $10B could fund dozens of new system level energy companies. The key would be to avoid long term subsidies for boondoggles. The $10B/y is just a swag. Less could easily accomplish a lot, and it all does not have to come from the US.

By Edmund Kelly

I have written previous posts pointing out the benefits of StratoSolar for Japan and the UK, two very densely populated countries with few indigenous energy sources and a desire for clean energy. 

Though China is not as committed to clean energy the potential benefits of StratoSolar for China seem even more compelling, though for different reasons.

In general, solar and other renewables solve three problems:

1)      Fossil fuels are a finite resource.

2)      Burning fossil fuels damages the environment and is causing climate change.

3)      Energy security. Dependence on imported energy threatens national and economic security.

Interestingly, for the US, none of these problems are currently regarded as particularly serious, and the environmental argument 2)  is the only one propping up alternative energy.

China is the inverse of the US. For China 1) and 3) are already a problem today, and at China's rapid rate of economic growth the problem is only getting worse. China is now the world's biggest oil importer, but its oil consumption is set to a least triple by 2040, 75% of which will be imports.  This puts the Chinese economy at huge risk from oil price volatility and/or supply constraints. China has a lot of coal so coal is not in as precarious a situation, but China currently imports a lot of coal from Indonesia and Australia.

An unlimited local source of cheap energy solves these problems.  Not only does it remove the resource and security problem, it also potentially provides an economic  competitive advantage.  China has leveraged cheap coal energy into dominance of energy intensive industries like steel, aluminum and chemicals. If StratoSolar provides cheaper energy it can continue that strategy, with the added benefit of no pollution.  It also puts China in a leadership position in a technology of world significance. Following the PV cost reduction path and investing in fuel synthesis technology could cement and enhance this leadership position.

A quick short term benefit is StratoSolar deployment in China  would help some specific industries that China has overbuilt; aluminum and PV silicon. StratoSolar systems consume a lot of aluminum for the structure, and clearly use PV panels.  StratoSolar systems deployed on a large scale would rapidly become the world's  biggest aluminum and PV consumer.

Food for thought.
By Edmund Kelly

The StratoSolar concept is usually greeted with a high degree of skepticism.  The obvious way to answer this skepticism is to build it and demonstrate that the system works reliably and delivers low cost electricity.  This creates a catch 22 situation: It is necessary to raise money to demonstrate viability.  However, without a demonstration of viability it is impossible to raise money.  

Independent investors like venture capital or private equity are unable and unwilling to quantify the risks of something that appears so different.  Despite the view that venture capital invests in risky things, the reality is that they are mostly herd followers, and won't touch anything that has un-quantified risk.

The financing problem is further compounded by the fact that there are no general energy companies that have R&D budgets to fund energy as a general category. The energy field is isolated factions, each only concerned with their own business and wary of competition.  Oil and gas, coal, nuclear, wind, solar and  bio-fuel are separate islands.  They raise capital individually and spend it exclusively on their sector. Oil and gas have the most money to invest, but they see exploration as their R&D and other sectors as competitors.

In theory, government should see a big energy picture, but in practice democratic governments treat energy as multiple separate political constituencies and funds flow separately to each sector.  The only government funded sector that treats energy somewhat broadly is research, so peer reviewed science projects get some relatively small R&D funding.  This funding flows through pretty rigid highly regulated channels within academia and the national labs. The current US system provides no funding channel for possible new power system level entrants. 

Compounding this difficult funding landscape is the polarization of public opinion.  People are drawn into camps. Environmentalists see current wind, solar and bio-fuels as the solution and any new contender as a devious plot to undermine their support and delay or stop dealing with the climate problem.  Those who think wind and solar are impractical and favor nuclear only want nuclear.  Those who don't accept climate change or don't want the government involved favor burning fossil fuels.  This polarization of society is reflected in possible investors, most of whom fall into one of these polarized camps. This makes it hard for anything new to get consideration.

In pursuing investment we have gradually evolved an approach that uses engineering ingenuity to reduce the cost of the first step that proves viability. This is in the hope that a smaller investment enlarges the potential initial investor pool.  This is based on the expectation that seeing is believing and that crossing the divide to a minimal functioning system will give confidence to larger high risk investors attracted by potential for very large profit. 

Our other approach is to try and provide data and insight, mostly via the web site and blog, that can help reduce the general impression of science fiction by explaining the concept in more detail and with more context.  This unfortunately only works for those willing to make a significant effort, and is a pretty hard sell.

Overall raising money for this venture has proven to be  a far more complex problem than the actual technical design.
By Edmund Kelly

All approaches to eliminating CO2 emissions rely on a transition to a predominately electricity based energy system. We have EIA projections for energy demand in 2050, so it is possible to model different fossil fuel free energy systems that meet this energy demand. This is not an attempt to predict how the future will unfold, but by showing all the pieces and their relationships it helps in understanding the impact of various technologies on the overall system.

Today there is no significant electricity storage, and fuel synthesis from electricity is equally insignificant. The need to handle intermittent energy sources, and the need to provide liquid fuel for transportation mean that both technologies are necessary at significant scale by 2050 if fossil fuels are to be replaced. The relative cost of energy from each and the sector energy efficiency and demand for either fuel or electricity will determine the relative size of storage and synthesis. 

The range of possible outcomes is large and dependent on too many variables to predict. We only show centralized large scale storage but distributed storage at the destination, like batteries in transportation, residential or commercial sectors will also affect the balance of demand between fuel and electricity.

Fuel synthesis and electricity storage only exist today as small research prototype systems.  Alternative energy is too expensive, and synthesis and storage add considerable expense on top of the cost of energy they take in, so there is no economic incentive to invest in either.

The fundamental enabler for storage and synthesis is cheap electricity. Today we make electricity from fossil fuel. An electricity economy inverts this and makes synthetic fuel from electricity. If the synthetic fuel has to compete with fossil fuel, it needs to be cheaper. This means electricity has to be very cheap. Today's $4.00/gal gasoline is $0.10/kWh. The cost of electricity plus the cost of paying for the synthesis plant have to at least match this. If StratoSolar electricity costs $0.06/kWh initially, that leaves $0.04/kWh to pay for synthesis and conversion energy losses. That's about $0.80/Wp capital cost. That capital cost is a stretch for mature fuel synthesis but is not possible with today's technology. Investing in these technologies at the scale necessary for the decade or so needed  will only happen when it is clear that electricity is cheap and will get cheaper.

So the clean energy cost target is not competing with today's electricity, but being considerably cheaper. Wind and solar are about a factor of two too expensive to compete with electricity in favorable markets today.  That makes them four to six times too expensive to compete with fossil fuels using synthetic fuels.

Sankey diagrams are very useful for visualizing energy systems. They simultaneously show the elements of a system and their interconnectedness, along with a quantative representation of the magnitudes of the elements and the energy flows between them. 

Here are sankey diagrams for two possible StratoSolar driven energy scenarios that satisfy the projected energy demand in 2050. The first scenario assumes that the sectors consume fuel and energy like they do today. The second scenario assumes that sectors adjust to consume more of the considerably cheaper electricity, and their efficiency improve because of this. 
By Edmund Kelly

I have updated the web site main page to show graphs illustrating the extra solar energy available at 20km altitude. The visual comparison seems to be more compelling and revealing than simply quoting numbers.

NASA has provided a convenient SSE database covering daily ground level solar insolation for the entire planet based on satellite data gathered over 20 years.  Using this data and a model for solar insolation at 20km we show comparisons for significant urban locations at latitudes from 23 to 60 north.  StratoSolar insolation is just a little less than top of atmosphere insolation which is widely available data, (including in SSE) and a convenient check on the StratoSolar estimates.

A perusal of these charts shows how large and consistent the benefit of StratoSolar is. Desert level insolation is commonly used to optimistically represent solar, but the combination of a desert and a large urban area is rare, and the cost of long distance transmission offsets any benefit.  California does not appreciate how lucky it is in this respect.  North Africa, the Middle East and Australia are about it. An optimistic world average for ground PV utilization is 15%.

The chart accompanying the graphs condenses the visual solar insolation into numbers and also provides the equivalent utilizations which are useful for estimating actual power from a given PV nameplate power.
By Edmund Kelly

Click for larger image

I have produced a short video that introduces StratoSolar as a possible solution to the looming CO2 climate crunch. Awareness of the problem is growing and some action is occurring, particularly in China. However, action on a scale necessary to solve the problem is not occurring, and as the video explains is very unlikely to occur with today’s technologies or politics. 
By Edmund Kelly

World energy use is rising with GDP growth, mostly in China and other rapidly developing economies.

Most of this energy comes from burning fossil fuels.

There is a well agreed political goal to try to limit CO2 to 450ppm to limit the risks of climate change.

Today the OECD consumes a little more than half of world energy (71,480TWh). By 2050, OECD countries are projected to consume little more than today (92,380TWh), but non OECD countries are projected to consume more than twice as much as OECD countries (198,526TWh). Most of this growth in energy consumption will be driven by economic growth in non OECD countries. Most of this energy will come from burning fossil fuels. Non fossil fuel energy supply, particularly wind and solar is projected to grow substantially from (21,392TWh) today to (70,703TWh) by 2050, but will only account for about 25% of all energy in 2050.

The problem is the higher cost of alternative energy competes with economic growth.  If you are poor,  economic growth is far more important. The only rational solution to this conundrum is to find a source of alternative energy that is cheaper than fossil fuel energy. This allows economic growth while reducing CO2.

The fundamentals driving these IEA projections are economic.  Alternative energy  from wind and solar is not market competitive, nor expected to be for the foreseeable future, so its market size is driven by the scale of government subsidies and taxes. Because of competing national objectives, world agreement is not possible, so alternative energy grows based on political will in individual nations. This will, as with all things political is very fickle. 

The IEA projections assume that fossil energy supply will grow to meet demand, and CO2 reduction will remain a low priority. The known  supplies of coal and gas will likely meet projected demand. Oil is more problematic. Oil demand already regularly exceeds supply and given economic growth, fuel efficiency will have to improve at a rapid rate to keep supply and demand in balance. Looking objectively at these numbers a few things are pretty apparent.

1)      Long before 2050 the world will face a CO2 crunch

2)      An oil crunch driven by demand constantly exceeding supply is highly likely.

3)      What OECD countries do will hardly matter. The non OECD countries will be the major CO2 emitters and oil consumers.

These oil and CO2 crunches are big sources of potential conflict. The oil crunch will increase the cost of oil. This will reduce economic growth. As the CO2 affects become more obvious and more difficult to deny, the demarcation line will be more between OECD and non OECD countries, rather than within OECD countries as at present.

As stated earlier , the only rational way to avoid these looming conflicts is to find a CO2 free energy source that is cheaper than fossil fuels.  This removes clean energy as an impediment to economic growth.  Instead it has the opposite effect. It enhances economic growth. 

This is the point where as usual I plug  StratoSolar as a clean and cheap energy source that meets all the requirements.
By Edmund Kelly