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Continuing serialization of Mark Mills’ report New Energy Economy: An Exercise in Magical Thinking.

This part 8.  

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Sliding Down the Renewable Asymptote  

Forecasts for a continual rapid decline in costs for wind/solar/batteries are inspired by the gains that those technologies have already experienced. The first two decades of commercialization, after the 1980s, saw a 10-fold reduction in costs. But the path for improvements now follows what mathematicians call an asymptote; or, put in economic terms, improvements are subject to a law of diminishing returns where every incremental gain yields less progress than in the past (Figure 4).

This is a normal phenomenon in all physical systems. Throughout history, engineers have achieved big gains in the early years of a technology’s development, whether wind or gas turbines, steam or sailing ships, internal combustion or photovoltaic cells. Over time, engineers manage to approach nature’s limits. Bragging rights for gains in efficiency—or speed, or other equivalent metrics such as energy density (power per unit of weight or volume) then shrink from double-digit percentages to fractional percentage changes. Whether it’s solar, wind tech, or aircraft turbines, the gains in performance are now all measured in single-digit percentage gains. Such progress is economically meaningful but is not revolutionary.

The physics-constrained limits of energy systems are unequivocal. Solar arrays can’t convert more photons than those that arrive from the sun. Wind turbines can’t extract more energy than exists in the kinetic flows of moving air. Batteries are bound by the physical chemistry of the molecules chosen. Similarly, no matter how much better jet engines become, an A380 will never fly to the moon. An oil-burning engine can’t produce more energy than what is contained in the physical chemistry of hydrocarbons.

Combustion engines have what’s called a Carnot Efficiency Limit, which is anchored in the temperature of combustion and the energy available in the fuel. The limits are long established and well understood. In theory, at a high enough temperature, 80% of the chemical energy that exists in the fuel can be turned into power.74 Using today’s high-temperature materials, the best hydrocarbon engines convert about 50%–60% to power. There’s still room to improve but nothing like the 10-fold to nearly hundredfold revolutionary advances achieved in the first couple of decades after their invention. Wind/solar technologies are now on the same place of that asymptotic technology curve.

For wind, the boundary is called the Betz Limit, which dictates how much of the kinetic energy in air a blade can capture; that limit is about 60%.75 Capturing all the kinetic energy would mean, by definition, no air movement and thus nothing to capture. There needs to be wind for the turbine to turn. Modern turbines already exceed 45% conversion.76 That leaves some real gains to be made but, as with combustion engines, nothing revolutionary.77 Another 10-fold improvement is not possible.

For silicon photovoltaic (PV) cells, the physics boundary is called the Shockley-Queisser Limit: a maximum of about 33% of incoming photons are converted into electrons. State-of-the-art commercial PVs achieve just over 26% conversion efficiency—in other words, near the boundary. While researchers keep unearthing new non-silicon options that offer tantalizing performance improvements, all have similar physics boundaries, and none is remotely close to manufacturability at all—never mind at low costs.78 There are no 10-fold gains left.79

Future advances in wind turbine and solar economics are now centered on incremental engineering improvements: economies of scale in making turbines enormous, taller than the Washington Monument, and similarly massive, square-mile utility-scale solar arrays. For both technologies, all the underlying key components—concrete, steel, and fiberglass for wind; and silicon, copper, and glass for solar—are all already in mass production and well down asymptotic cost curves in their own domains.

While there are no surprising gains in economies of scale available in the supply chain, that doesn’t mean that costs are immune to improvements. In fact, all manufacturing processes experience continual improvements in production efficiency as volumes rise. This experience curve is called Wright’s Law. (That “law” was first documented in 1936, as it related then to the challenge of manufacturing aircraft at costs that markets could tolerate. Analogously, while aviation took off and created a big, worldwide transportation industry, it didn’t eliminate automobiles, or the need for ships.) Experience leading to lower incremental costs is to be expected; but, again, that’s not the kind of revolutionary improvement that could make a new energy economy even remotely plausible.

As for modern batteries, there are still promising options for significant improvements in their underlying physical chemistry. New non-lithium materials in research labs offer as much as a 200% and even 300% gain in inherent performance.80 Such gains nevertheless don’t constitute the kinds of 10-fold or hundredfold advances in the early days of combustion chemistry.81 Prospective improvements will still leave batteries miles away from the real competition: petroleum.

There are no subsidies and no engineering from Silicon Valley or elsewhere that can close the physics-centric gap in energy densities between batteries and oil (Figure 5). The energy stored per pound is the critical metric for vehicles and, especially, aircraft. The maximum potential energy contained in oil molecules is about 1,500% greater, pound for pound, than the maximum in lithium chemistry.82 That’s why the aircraft and rockets are powered by hydrocarbons. And that’s why a 20% improvement in oil propulsion (eminently feasible) is more valuable than a 200% improvement in batteries (still difficult).

 Finally, when it comes to limits, it is relevant to note that the technologies that unlocked shale oil and gas are still in the early days of engineering development, unlike the older technologies of wind, solar, and batteries. Tenfold gains are still possible in terms of how much energy can be extracted by a rig from shale rock before approaching physics limits.83 That fact helps explain why shale oil and gas have added 2,000% more to U.S. energy production over the past decade than have wind and solar combined.84

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Next up is  Part 9 Digitalization Won’t Uberize the Energy Sector.

cbdakota