A fair analysis overall, but I'd take issue with a few things.

The first is the assumption that consumption must increase. There's a lot of scope for efficiencies in our economy. Many states have by a combination of advertising, progressive pricing and advertising significantly dropped their water consumption - domestically, anyway. The same is surely possible for energy.

The second is that the assumption that renewables need to replace fossil fuels one-to-one. This isn't necessarily so. For example, it's well-known that around two-thirds of coal's energy is lost to heat when converting it to electricity. So 100 units of coal-fired generation don't require 100 units of renewables, only 33.

More electrical use lends itself well to certain economies of scale, since transporting people and freight by electric train is a well-established practice, while transporting them by electric vehicle is not so well-established; and electric trains are indifferent to how the electricity was generated.

This I think makes easier the big ask you're making of renewables.

Thirdly,

There is no net gain in wealth from this expenditure it is simply replacing the energy infrastructure we already have. This expenditure would therefore represent a huge erosion of individual wealth.

That's one way of presenting it. However, I note that in many public discussions, we find that while renewables, hospitals, schools and railways are called a cost, fossil-fired plants, mines, railways for coal, submarines and the like are called an investment that'll create jobs.

Of course, the truth is that all of those things are both a cost and an investment that'll create jobs. The only reason to mention one and not the other is that you support one bit of spending but not the other.

Fourthly, I do not think it fair to call it a "huge erosion of individual wealth", since after the spending we'd have the infrastructure. If I knock down a rotting old house and build a shiny new one, I am "simply replacing the old [housing] infrastructure" and some may argue I have "no net gain in wealth". But in fact I have a shiny new house. I am in debt, but... I have a shiny new house.

Fifthly, what the essay misses is that we're building new infrastructure to replace the old all the time. Power plants, roads, railways, hospitals, schools, housing and so on wear out. We have to rebuild and replace them. The only question is what we replace them with: something like the old thing, or something new?

So rather than the cost accounting you give here, a better accounting would simply look at how much X amount of renewables would cost compared to X amount of fossil fuel generation, combined with the cost of fuel over the plant's lifecycle. We then find that while the bill is high, it's not as high as this one - and may even be cheaper.

Lastly, the essay ignores the possibility of creating exports. Historically, when countries spend several percent of their GDP on an industry, they get large exports from it. The Big Five spend a lot on arms, but export a lot, too; Denmark spends a lot on wind, but exports a lot, too; China spends a lot on solar, and exports a lot of that.

So it'd be more true to rewrite your conclusion as,

There is no net loss of wealth from this expenditure as it is simply replacing the energy infrastructure we already have. This expenditure would however generate a profitable export industry and jobs for tens of thousands of Australians.

That is as biased as your own conclusion, but contains more of the truth.

Oh, and you missed geothermal as a generation method. I can understand if you say something like, "possible resources are not well-studied so it was excluded from this analysis", but you just failed to mention it at all.

How exactly are you defining "wealth"?

"The paradigm of continually increasing growth driven by increasing population and an expectation of improving standards of living -- ".

That paradigm must be changed by addressing the demand side of the equation as well as supply.A good place to start is to have a zero immigration policy and a program to reduce the birth rate.
Population levels are fundamental to resource limits as well as environmental degradation,which includes climate change.
As Kiashu states,there is no mention of geothermal as an energy source neither is nuclear.
The dreaded N word will no doubt raise the usual crys from the people who have an almost religious bias on this subject.

"Unfortunately this will only complete the conversion task in around 160 years. In fact the conversion will never be achieved because the rate of gain in renewables is lower than the forecast increase in consumption. Clearly, the expenditure required must be re-examined in this light."

Aeldric I think you have also identified the need for a high EROEI (see post on Part I) to support our way of life...

Personally I agree with Kiashu in that our economy does not need to grow - for instance we have downscaled our lives and need (?) less than 1Kw of solar - this is a comfortable but non energy intensive lifestyle. Not only have we substituted our energy use with solar but used the opporuntiy to lower our usage - which is only about 20% of what it was before moving out to our block.

But still I don't think we are sustainable in that we rely on batteries - of which all types rely on scarce metals, and until we find a different way to store electrons then we should probably be better off looking at lamps and candles for light.

The question is then can we build a high EROEI alternative energy system in the next 5 to 25 years - if no then we should forget about it and do stuff we know we can do - like making our food production small scale, organic and local, and learn to make low impact housing amd to preserve our knowledge base.

Phoenix,
The problem with projecting any type of growth rates over 40 years, either production or consumption, small changes can lead to big differences.

I think you conversion efficiency(60%) of NG for heating being replaced by electricity is low, heat pumps are now 300% efficient replacing gas heating 70-90% efficient(70-75% reduction).
Also electric vehicles seem to achieve 0.13-0.4kWh/km replacing ICE vehicles (6-12L/100km) 200-400MJ/100kM or 0.55-1.1kWh/km(av 75% reduction).

Costs for wind farms seems high( more like $AUD 2,000/kWh capacity), and the capacity factor of Infigen's 550MW in Australia(the largest wind farm owner) is 36%.

We should allow 1% annual reduction in energy intensity/ GDP whatever the GDP actually grows at in next 40 years. Switching from FF to renewable or nuclear electricity will give additional gains.

The most import question is : Can we replace today's FF consumption by renewable energy within 40 years? If we can do this using today's technology then we have a chance of meeting future increases in GDP by better technology, conservation etc.
We can probably replace all road private and freight transport by electric road or electric rail using a 50% increase in todays 30GW electricity.
Drastic reductions in metal smelting and air travel seem necessary, and very achievable without any major problems, so probably a 100% increase in today's electricity would enable most FF to be replaced at today's consumption rates. This would require an additional 110GW average or 300GW wind turbine capacity(7.5GW per year). We installed 0.65GW(1.3 Billion) wind in 2008, so about X11 this rate(15Billion per year). Seems very possible.
Your projections of requiring a 600% increase in electricity are probably not going to be possible unless solar technology improves much faster than most anticipate.

"How Much Time Do We Have?"
Anyway impending oil crisis can be mitigated using new exploration technologies. For example,
http://phenomenon-in-oil-accumulation.weebly.com

It's a bit of an exaggeration for a country as immensely rich in natural and energy resources as Australia to be considered doomed in the face of coming depletion.

When I do a quick search I come up with much different fossil fuel numbers.
Australia has 86 Gt of coal(eia), 750 G m3 of natural gas( more with coal seam methane) and 24 Gb of recoverable shale oil. It imports .250 Gb of oil and exports .25Gt of coal(2/3 of production). Electricity is about 300 Twh on a 50 Gw grid. It may be a prudent to cap Australian coal exports.

The most important problem would seem to be how to reduce fossil fuel consumption to reduce greenhouse emissions. Coal is a problem but the technology for converting coal to cleaner natural gas and burying the CO2 in saline aquifers or unmineable coal seams has been proven practical. Converting coal electricity to natural gas will reduce emissions by half for the same number of BTUs, joules, kwhs, etc.

The main use for fossil fuels should be to balance out intermittent renewable sources feeding the grid. Natural gas is the idea fuel to pick up the slack when the sun isn't shining or wind dies down. Using fossil fuels as a backup source will extend them going forward, so FF electricity needs to be heavily taxed.

As far as liquid fuels go, the quickest way to get GHG reductions in to increase the production of sugar cane ethanol--Australia produces 36 million tons which would result in a billion liters of ethanol which could replace all the gasoline used at 600 million liters per year. Oil shale production which has been stopped could produce required large amounts of domestic diesel if necessary.

IOW, 1)reduce GHG by using more natural gas, 2) convert coal to NG and sequester the CO2 for a backup to renewables 3) maximize renewable power to the grid, 4) a mix of biofuel and oil shale to substitute for imported oil. These measures, along with reducing consumption should easily extend Australia's energy system for 100 years.

Other countries, like the USA are nowhere nearly as fortunate.

Reposted from the main TOD site.

I have several problems with this article.

1. The Coal, Natural Gas and Uranium reserves are extremely conservative.
2. The assumption that consumption of these resources will grow exponentially until the moment they are consumed.
3. The assumption that the cost of alternative energy resources will remain constant at present values.
4. The assumption that advanced nuclear technology will make no impact.

For (1) coal reserves would immediately be doubled if they include Victoria's currently economic Brown coal reserves. Actually the technology to extract water from lignite has been developed and there is a consortium that has concrete plans to export it.

http://www.martinplacesecurities.com.au/Publications/2008/MPS%20IER%20Re...

The black coal reserves are what current miners have taken the time to fully quantify. The final resource value is almost certainly far higher, even without in-situ coal underground gasification which can unlock the energy content in very deeply buried coal deposits.

http://www.lincenergy.com.au
http://www.carbonenergy.com.au

For Coal Seam methane, new advances are continually made. Queensland/NSW have gone from facing imports of nat gas from 2011 to being large net exporters over a 3 year period! ie In 2006 projections showed those states needing imports now they will be exporters.

The 1.15 million tonnes of Uranium is well out of date. All by itself, the resource at Olympic dam has been re-assessed to 1.9 million tonnes.

http://www.world-nuclear-news.org/newsarticle.aspx?id=14130

For (2) it is obvious that exponential increases in extraction will not continue indefinitely. Particularly since most of the energy content is exported. The authors should work out a more sophisticated extraction profile, like say, a logistic sigmoid.

I would be extremely surprised if the combination of (1) and (2) did not show at least 1 century of resources in Australia.

For (3) there is scope for a factor of two decrease in price for solar thermal and substantial price decreases for PV. Large scale PV modules have already dropped below $1/watt.

http://en.wikipedia.org/wiki/First_Solar

For (4) there are variety of new technologies that will substantially increase the energy extracted from Uranium from the present 1% to 10% or greater. This immediately increases the EROI for nuclear by a large factor and in turn makes mining large and more dilute Uranium resources energetically favourable for many, many centuries.

http://www.pmforum.org/blogs/news/2008/08/deep-burn-development-project-...
http://nuclearinfo.net/twiki/pub/Nuclearpower/WebHomeWasteFromNuclearPow...

Even then, assuming reasonable GDP growth and investment in just renewable energy at your quoted prices, we get pretty close to your required 1.8 trillion by 2050 for Australia.

Starting from a 1 trillion economy and 3% GDP growth and 2% diverted to renewable energy I get 1.6 trillion by 2050.

With a 2% GDP growth rate and 3% invested in renewable energy I get a total of 1.9 trillion by 2050.

I can post the spreadsheet if you like. It's all straight forward.

The above calculations take no account of the effects that EROEI will have on net energy recovered.

Does anyone have any example curves to show quantitatively how EROEI declines as a function of resource remaining? For oil, gas or coal, especially oil, this would be interesting to look at. Single wells or fields or even countries.

Failing that is there a theoretical model that has been applied to the problem that has at least some grounding in observed data?

The shape of this curve would help understand both the degree of the problem and the speed with which it is likely to develop.

Thanks

TW

What this article screams to me is that 'BAU' will not remain constant as the century progresses to mid-point even without an early peak (let's just assume for a moment that Armagedon does not start on June 12th 2012...) This is why it is simply not possible to state a given % growth rate and extrapolate ad-infinitum.

Energy prices will soar and the exponential nature of growth will be exposed as just the early part of an 's' curve. Within this context energy efficiency will rise to the fore and IMO cleaner-coal, gas and in-turn 4th generation more efficient nuclear will be used to try and plug the gap along with breader reactors.

All the time the price signal will be creating mini-crashes and spiralling upwards and demand destruction / efficiency / renewables will come to the fore. It's a complex chaotic picture.

Nick.

The bottom line of the table says we'll do better than 80% less CO2 by 2050, more like 100%. The gas lobby says Australia has 500 tcf of natgas and coal seam gas. That's 19.4 Mt per tcf not sure what that is in cubic metres but more than a century they reckon.

Some 20 year scenarios would be illuminating. They would need to factor in new demand for electricity such as desalination and transport less savings from smart meters and so on. There will clearly be a gas boom both as a vehicle fuel when oil seriously declines and also for electrical generation if talk ever gets serious about CO2 cuts. After 20 years or so heavy domestic gas demand may force a rethink about LNG exports.

I suspect that 'old' brown coal (eg Latrobe Valley) will get a series of get-out-of-jail cards to keep going until economic exhaustion. For example power stations will get makeovers to look 'capture ready' and other stalling tactics. I see only a modest wind build and no nuclear so long as the ALP-Green mindset holds sway. That is make fashionable talk about carbon cuts but do nothing to alter the status quo.

Basically I expect Australia to keep burning and exporting coal at current rates. In lieu of 'new' coal and to replace oil gas will become the fuel of choice even though the world price will climb. By 2030 I doubt Australia will have enough capital left for either serious renewables or nuclear.

Here is calculation concerning the energy cost of transitioning to renewables (No, I am not rejecting the use nuclear energy. I am just giving a sample calculation.). I define the following variables:

C0 : Current yearly net energy supply from depleting resources

L : Length of time in years over which C0 linearly descends to zero. Yes I know this is probably not a realistic assumption. So sue me.

f×C0 : Target yearly net energy supply at the end of L years. If f<1 then we are undergoing energy descent.

P : Average energy payback time in years of new renewable installations.

µ: Energy utilization rate of renewable generators. µ is the fraction of the life time energy produced by a renewble generator which is left over after the energy used in manufacturing and installation is subtracted out. If the generator produces constant energy for LR years then µ=(LR-P)/LR

In order to produce f×C0 units of net energy per year an over capacity will be required since in long term equilibrium we must replace worn out generators on an ongoing basis. The total capacity that needs to be installed to produce f×C0 units of net energy per year is f×C0/µ.

I will assume that this capacity is installed at a uniform rate over the L years of depletion of the conventional resources. That is we install (f×C0)/(µ×L) units of new renewable generation each year. The energy cost of this installation is (P×f×C0)/(µ×L). If we divide this number by C0 we get the energy cost as a fraction of the intial yearly supply of net energy from depleting resources:

Fractional Energy Cost = (P×f)/(µ×L)

To give a specific example suppose P=4 years, f=1, L=30 years and µ=26/30=0.867 (This value of µ corresponds to constant energy output over a lifetime of 30 years.) Plugging in the numbers we find:

Fractional Energy Cost = 4/26=0.154

Not to jump on the bandwagon, but not only is nuclear a viable long term option (in breeder form - and there are other technologies besides Thorium being discussed and already tested and operational) but it would seem to be a key option.
(As far as fuel, supply may not be as limited as we've been led to believe. Anyone want to jump in on the seawater extraction concept for nuclear fuel?? - The Japanese seem to be doing this already)

Seawater Extraction Cost

The article doesn't seem to track the environmental load of CO2, Methane, NOx, and other greenhouse and toxic gas - not to mention mercury and radioactive components of coal/oil combustion...Only energy demand. The overall costs of each technology are important to consider. And what about a bridge or extension to the "renewables"? Shouldn't Nuclear be a consideration, however the alarmists have spun it? The waste issue becomes relatively a non-issue when breeders are put into the mix. Also, wouldn't it be good to consider the possible use of Nuclear to generate hydrogen?

As far as the Biomass contribution there are serious concerns regarding the depletion of useable land and societal food vs fuel considerations that have been raised (eg. Pimental in "Food, Energy, and Society")

On another note: Anyone have any ideas for disposal of a 25 year old PV panel? There are some toxic concerns, as well as costs, that must be addressed here as well, right? A few of the toxics in the waste stream for PV: Gallium arsenide (GaAs), copper indium diselenide (CuInSe2), cadmium telluride (CdTe)

Solar Cell Disposal

I agree that it will take a basket of technologies to support society as we know it....but to leave Nuclear out because it is classed "nonrenewable" seems to defeat at least one of the BIG possible options before the discussion starts. How much of the solar PV technology is still in development? (Titanium Dioxide clear cells for instance) The problem, as I see it, is that current solar PV tech is also non-renewable in that the cells typically have 20 to 30 year life spans. And typical performance degrades from a high of 20% conversion (on sunny days - key point here!!) to 15% in roughly 5 years. (a 25% drop) IMHO, This means that output must be compensated from other sources over time. Certainly others who are smarter than I would know, but from my limited perspective, I would not include solar PV as a peak demand supplier or as a way to expand demand over time, at least not without overbuild considerations (which brings up the question of effective use of resources)and direct connections to the gods of the sun.

On another note, a radical idea would be to decommission naval nuclear vessels and park them next to key demand locations, say like Sydney, and plug them in. (OK, its not THAT easy...still something like that has been done in special cases) Russia has hundreds of these vessels ready for decom. The interesting thing is that these highly enriched Naval units come with their own portable containment vessel and can last 20 to 30 years or more (newly developed cores are pushing the limits to 50 years). Outside the subject of this discussion but on a separate thread it might be nice to consider the ?real? threat of nuclear proliferation. Alarmists will likely try to point this out and I would love to entertain a thread on this subject if I had sufficient time.

Still, my compliments to the chef for putting such forward thinking into a strategy for energy. My hat's off to you.

I would ask you to apply your methodology to my homeland. It should be fast to do:
We have no coal
We have no gas
We have no oil
We have no uranium

As we have no resources and we have not put in place renewable technologies to provide for our energy needs, tomorrow when I wake up I will have a problem, according to your thinking.

You have made a nice excercise, but the energy problem is universal, not Australian. You are assuming that your resources will stay in Australia, but they will go wherever they are paid in the world, for the benefit of the owners of the resources and leaving the australian cars unfuelled.

SORRY, THIS COMMENT WAS RE-SENT BY MISTAKE, AND I HAVE DELETED IT.

Thanks for this illuminating post and follow up comments. Very informative as always.

I am curious about concentrating solar power. According to information I read on the Solar One and Solar Two projects in California, a 160 km x 160 km patch of Nevada desert covered by giant CSP farms utilizing existing technology could generate electrical power equal to all the energy consumption of the continental US from all sources. Similarly, a 1,000 km x 1,000 km area in North Africa could generate electrical power equivalent to the entire energy consumption of the world (est. in 2005). Those are awfully bold claims, and I'd like to hear your professional opinions on them.

The Desertec Project claims that there would be only a 3% loss of power per 1,000 km with high voltage undersea / overland DC power cables from diverse CSP facilities in North African countries to Europe. Assuming the remaining technological challenges and cost issues are resolved, what remains is political and financial. But those have real enough challeges too. If Desertec is feasible in Afica and Europe, then isn't there a potential that Western Australia could well be the Saudi Arabia of solar for Asia? Political stability would undoubtedly be an important consideration for buy in by countries like China, Japan and Thailand.

http://www.desertec.org/

I understand that CSP has some very real challenges, notably in energy (heat) storage. Molten salts seems very promising, but the challenge is keeping it hot enough long enough to generate power through a cloudy period or overnight, let alone a few days. However, perhaps this challenge is not insumountable. The utilization of a portion of the CSP generation to desalinate seawater for use on desert farms and nearby cities seems to be an important benefit as well.

thx for presenting this interesting and pragmatic approach to 'set the stage'. I like simple but correct calculations for reality checks which can keep a discussion on track. In your cost calculation I wonder, however, if one should not include the enormous fuel cost savings. As soon as the renewable energy harvesting infrastructure operates and grows less and less fuel has to be purchased - at least a region which has no non-renewable resources in its soils and has to buy it from the outside would feel this lifted burden. The calculation below followed a discussion we had years ago after the G8 summit in Petersburg (2006 I guess?)

... lately we speculated over a coffee, if the amount the G8 discuss / intend to spend for boosting oil promotion, is in billion or trillion US$(for background info see http://www.energybulletin.net/14013.html? btw in those days nobody was really used to think in trillion US$). I couldn't keep my fingers from a little exercise - what could 17 trillion US$ change if invested it in PV instead (these are 12 zeros after all !)

In today's costs of approx. 6000US$/kWp (installed & small scale PV) this would result in an installed PV capacity of 3TW, annually producing 3PWh (if yield is 1kWh/a per installed 1Wp). If we assume a conversion efficiency of 10%, this 17GUS$ PV power plant would cover 30'000km2 (or 173x173km2, almost Switzerland). Oil contains approx. 10kWh_therm and produces 3kWh_elec per liter, thus this could replace approx. 1000 billion liters of oil or approx. 6Gb/a which equals approx. one fifth of the world production *). Would we re-invest the savings in oil expenditures into new PV installations we could add 80GW or 2.6% of the installed capacity (@ 70 US$/b) every year. This growth rate would allow doubling the installed capacity within 26years... **)

*) assuming that most of the services which currently oil delivers would improve considerably if we would first transform it to electricity i.e. electric vehicles and electric heat pumps.
**) of course prices would fall drastically in such mass produced technologies and the doubling time could shorten, but on the other hand costs were not accounted for (maintenance, grid connection, storage needs etc.)

$5000 per kW for PV on average are too high for a long term calculation:

First Solar has already reached $980 per kW:
http://www.edn.com/article/CA6640264.html
QS Solar aims at $750 per kW:
http://www.solarplaza.com/article/solar-module-sales-price-of-1-per-watt...
Oerlikon Solar even aims at $700 per kW by 2010 (and currently is at $1500 per kW).
http://www.spectrum.ieee.org/energy/renewables/first-solar-quest-for-the...

Since the module costs are significantly higher than the installation costs and converter costs it's unlikely that PV will cost $5000 kW per kW in the long term future.

Also solar heating is less costly and can heat cool as well as cool buildings and thus reduce the heating fuel as well as the electricity demand:
http://www.solarserver.de/solarmagazin/anlage_0308_e.html
http://www.solarcool.com/index.php?article_id=1&clang=2

China installed almost 17 GW of solar heating in 2007 alone (17 GW in one single year !).
http://www.ren21.net/pdf/RE_GSR_2009_Update.pdf

You left out OTEC. It is a technology which could provide all of eastern Australia's electricity. The close proximity of most of Oz's people to the tropical and subtropical waters to this huge energy reserve is obvious. Some innovations could improve the feasibility of OTEC and export of these innovations could be a wealth maker for Australians.

No currently viable technology exists for large scale smelting of iron ore using renewable energy sources.

How about Direct Reduced Iron fed a reducing gas (CO and H2) produced from air and water via electrolysis and the Sabatier Process? (It may be that H2 is a sufficient reducing gas on its own, as there's a full pathway from Fe3O4 to Fe using just H2, removing the need for the Sabatier Process entirely.)

This is a considerable commitment involving the expenditure at current values of 2.3% of GDP or $25 billion per year...Unfortunately this will only complete the conversion task in around 160 years.

$25B per year, for 160 years, gives $4,000 billion.

Let us assume we expend 5% of the entire Australian GDP... This expenditure amounts to $54 Billion (2009 Dollars) per year. At this rate we will complete the task in around 74 years.

$54B per year, for 74 years, gives $3,996 billion.

...38 years of proven reserves of fossil fuel energy remaining in the ground...we could elect to undertake the transition in the period dictated by our remaining fossil fuel reserves. In this case we would need to expend $95 Billion per year or around 9% of GDP to complete the exercise by 2051.

95B per year, for 38 years, gives $3,610 billion.

On the other hand, at the top we see:

"The total direct cost of revamping Australia’s energy production infrastructure will be in the order of $2,200 Billion."

There seems to be another calculation error.

If we start replacing fossil fuels over a 40 year period, we'll be 25% done in 10 years, yes? We'll be using 25% less FF. In 20 years, we'll be 50% done. We'll be using 50% less FF. In 30 years, we'll be using 75% less. At the end of 40 years, we'll be using none, and have 50% of a 40 year supply of FF left.

Therefore, according to this simplified model, we really have 76 years to replace FF (that's how it works out - it's a bit like paying off the principal of a mortgage). Now, of course this is oversimplified, and we really want to replace FF (and coal in particular) in 20 years, not 80, but the calculation error is real. It looks like we really don't have to worry about running out of FF before we finish installing renewables.

And, in this scenario, we're talking about $2,200B over 76 years, or $28.9B per year, or about 2.7% of Australia's GDP. Pretty doable. Really quite cheap, in fact, when you consider there's no fuel cost.

I'd say we can stop worrying about running out of fossil fuels, and start worrying about how to stop using them before we run out, to mitigate climate change.

In other words, we're going to have to make a conscious choice to stop using coal and other FF - geology isn't going to do it for us.

For better or worse.