The Energy Crisis: Part 1—The Supply Side

The Energy Crisis: Part 1—The Supply Side

Stephen H. Unger
July 31, 2009

NOTE: Part 2 (on waste and inefficiency) can be accessed here

Roller coaster gasoline prices, global climate change, escalating demand for energy by the most populous nations, low and further deteriorating air and water quality in major cities. Big league problems, with no indication that adequate solutions are about to be implemented. How bad is the situation and what can be done? First, I will discuss the energy supply problem and possible solutions. In a follow-up article, that will appear soon, I will deal with the even more difficult issues of inefficiency and waste.

Ballooning Energy Consumption Rate

The US leads the pack: about 5% of world population consuming roughly 25% of world energy production, at a rate of over 11 KW/capita [1]. (Actually, since a large proportion of manufactured goods consumed in the US is produced elsewhere—mainly in China—while our exports are much less, charging to the US account the energy consumed in the production of the excess of goods would more realistically indicate the US energy consumption rate per capita). The world average (2006 figure) is about 2.6 KW/capita.

Since, in the two most populous countries, China and India, per capita energy consumption is rising rapidly, from very low levels, world energy demand is headed toward a catastrophically high level. For example, there is no way that world petroleum production could keep up with demand if per capita automobile usage in China and India were to approach, say, half the US level.

The US bears a disproportionate responsibility for this situation, since we have long been setting an example of lavish, wasteful, energy use. It is now up to us, not to preach to the rest of the world about a more sensible attitude toward energy, but, rather, to develop and implement the means for living decently in a sustainable manner. Only after we are clearly committed to such a drastic change would we be able to credibly urge nations at earlier stages of industrialization to not follow the path we took. Of course it would make sense for those nations to act this way even without our setting the example, but nations seldom learn from the experience of others.

There are a number of components of the energy problem. Burning fossil fuels produces air pollution and green house gases, and reserves of both petroleum and natural gas will be depleted in the foreseeable future. We need to develop alternative energy sources. Since it is unlikely that satisfactory alternatives can be found that could sustain even current usage rates, leave alone projected growth, we must find ways of reducing the demand for energy. One approach is to increase the efficiency of energy consuming devices and systems. Perhaps even more important, in terms of both cost and potential savings, is to reduce waste. Let's start with a survey of alternative energy sources.

The Supply Problem: What Should Replace Fossil Fuels?

We could classify energy sources as fossil fuel, hydro, nuclear, solar (subdivided into photovoltaic, solar thermal, wind, ocean waves, biomass), tidal, geothermal. The most plentiful fossil fuel is coal, which, unfortunately, is very harmful environmentally during both production and use.

Nuclear energy (fission) has been touted as the answer by those in the industry, but its only real advantage is that it does not produce significant amounts of greenhouse gases. Altho its supporters argue that the there is no real danger associated with nuclear power plants, the fact remains that, to this day, the industry still relies on the Price-Anderson Act [2] to shield it against the possibility of huge financial losses associated with a catastrophe. Private insurance companies have not objected to this government "intrusion" in their business. I believe that the absence of serious failures of aging nuclear power plants in recent years can be attributed to the competence of nuclear engineers and the willingness of so many of them to resist management pressure to cut corners. The problem of nuclear waste disposal remains unresolved, and there is also concern about the link between nuclear power and nuclear weapons. But, even aside from these factors, nuclear power, despite substantial government subsidies, is economically not competitive [3, 4].

While a lot of interesting work has been done on nuclear fusion by very able people, both in the US and elsewhere, practical reactors are nowhere in sight; the problems appear to be extremely difficult and it seems that success is always fifty years in the future [5]. Barring some dramatic breakthru, we cannot count on this technology for the foreseeable future, if ever.

The most widely used, and one of the fastest growing, alternative energy source is windpower [6]. It has been found to be a practical technology, capable of supplying very substantial amounts of energy, with no major environmental harm. A typical wind farm may operate 100 turbines, each rated at 2 MW. Note that, due to wind speed variation, the ratio of a turbine's average expected power output to its maximum output (called the capacity factor) may range between 0.2 and 0.4. Installed costs are of the order of $2/watt. Many wind farms are now being located off-shore.

Because smaller wind turbines (say 100 KW) are not that much less efficient than large turbines, the use of such turbines to serve the needs of people, or even commercial facilities within a small radius, is another useful way to exploit wind. Still smaller, rooftop mounted, micro-turbines, rated at roughly 5 KW and intended to serve one family's needs, are being sold, tho they are significantly less efficient. Issues such as noise, vibration, and durability make them somewhat controversial at this time. With respect to wind turbines of all sizes, it is important to understand that output power varies with the cube of wind speed. So, in drafty locations, wind turbines are highly productive, while at some other places they would serve only as expensive ornaments.

In the Mojave desert, solar thermal plants can be used to generate electricity at a reasonable cost. The cost rises considerably in less sunny areas. The same can be said of energy produced by photovoltaic (PV) arrays. Great progress has been made in bringing down the cost of PV (still quite high), and the prospects are good for further substantial cost reductions [7]. PV is simpler to use than is solar thermal, does not require cooling water or towers, requires less maintenance and, perhaps most important, can be deployed in small modules without sacrificing efficiency, so that small installations closer to the users are feasible. Solar thermal has the advantage that heat can be stored while the sun is shining, to reduce intervals of low power availability.

Hydroelectric power, involving large dams is a long established technology. The same dams are often also used for flood control, water supply reservoirs, and to facilitate irrigation. Building new dams necessitates sacrificing large tracts of land. Because silting eventually reduces reservoir capacity, the lifespan of hydro systems is limited.

An alternative energy source ultimately based on sunlight, but without the intermittency problem, is biomass. Of course, in the form of wood burning, this is one of the oldest energy sources. In recent years, ethanol, produced from corn, has been increasingly used to supplement gasoline as automobile fuel. It is usually a 10% additive to gasoline. Currently ethanol use for this purpose amounts to somewhat under 5% of gasoline consumption. However, there are serious concerns. A great deal of energy is consumed in the production and distribution of corn ethanol. Estimates of the ratio of energy derived from the finished product to the energy needed to produce and distribute it range from less than 1 to 1.67. Corn production is very hard on the land and requires a lot of water. It also requires the use of a great deal of prime farmland. Many argue that replacing gasoline as an automotive fuel with corn ethanol is a poor tradeoff.

But there may be other, more benign ways to convert biomass to energy. Extensive studies have shown that switchgrass, native to the North American plains can be used more efficiently to produce ethanol [8]. Energy ratio estimates for switchgrass exceed 5. Furthermore, its deep roots make it beneficial, rather than harmful to the soil. Switchgrass can also be burned as fuel for furnaces or heat engines.

Substantial work is in progress to develop processes for producing oil from various species of algae that can be grown almost anywhere [9]. It is promising enough to have attracted major funding by big oil companies, who indicate that commercial production is likely within a decade Unfortunately, there are proposals to modify algae genetically to optimize production. If this is done without careful attention being paid to the effects on these environmentally important life forms, and indeed this seems to be the case, there may be dire consequences [10].

Household garbage, waste paper, farm waste, and the like could also be used to generate ethanol, methanol, and perhaps methane gas.

Other schemes for exploiting solar energy include ocean thermal and solar ponds [11]. An indirect form of solar energy that comes in a very concentrated form is that from ocean waves [12]. Low-head hydro, harnessing energy from rivers and streams is also a useful technology, particularly in remote areas.

Another useful source of energy is heat emanating from the bowels of the earth, i.e., geothermal energy [13]. In some places, e.g., Iceland and Northern California, this is currently an important, low cost and usually low-polluting, energy source. There are many more places where useful amounts of geothermal energy can be tapped. Depending on the nature of the source and on the technology employed, the lifetime of a geothermal source may be limited.

Work has been done on all these technologies, but I believe they are promising enough to warrant a great deal more engineering work. Some in industry have a more skeptical view of alternative energy sources, considering them as problematic due to conventional economic considerations [14].

Is Bigger Necessarily Better?

At one extreme are huge power plants, such as 1 GW nuclear reactors, coal fired generators rated at many hundreds of megawatts, and even wind farms producing electric energy at the rate of hundreds of megawatts. At the other extreme are thousands of homes with solar panels on their roofs, and some with wind turbines. Even more extreme are photovoltaic powered pocket calculators. Small electric generators powered by currents in rivers and streams, or by low head waterfalls are also in this category.

Particularly with respect to heat engines of all types, efficiency increases with size. This is primarily because the bigger the engine, the larger the ratio of volume to surface area, which means that heat leakage and friction losses become proportionately smaller. Also it is easier to operate larger systems at higher temperatures, which also promotes efficiency. All other things being equal, construction costs for housing equipment are less per unit volume for larger buildings, again because of the larger volume to surface ratio. Personnel costs for operating a power plant generating nX kilowatts will be less than n times the cost for an X kilowatt plant. Considerations of this type motivated the historical growth in the size of electric power plants.

But there are other factors that favor small power plants. One is capital cost. Estimated construction cost for large coal-fired power plants is currently about $3.50/watt. (The corresponding figure for a nuclear power plant is roughly double that amount.) Because it takes years to build very large power plants, huge sums of money must be expended before there is any return. This makes it difficult to obtain private financing without government subsidies. A major contributing factor to the high cost per watt is that large power plants obviously are not mass produced.

Consider, for contrast, a modern automobile selling for $20,000. Its 150 HP engine corresponds to perhaps 100 kilowatts of electric power. Then if we ignore all other features of the car and assume the full price is allocated to it as a 100 KW generator, we are paying very roughly $0.20 per watt, an order of magnitude less than the per watt price for a large power plant. Confirmation of this point is that a 100 KW motor generator set (diesel) can be purchased for about $21,000 [15]. Relying on small systems also makes growth smoother in that additional capacity can be added as needed in small increments and with minimal construction delays.

A very large power plant, say 1 gigawatt, can supply the energy needs of hundreds of thousands of households. It is not likely to be located in the center of a densely populated area, so its output is usually going to be transmitted, on average, over many miles of wire and thru several transformers. Providing this network is costly, and energy losses, of the order of 10%, will be incurred. At the other extreme would be very small electric energy sources, such as PV panels, sited on the roofs of building, supplying the residents of individual apartment houses or even one-family houses. In between we might imagine modest sized generators, perhaps a mix of wind and photovoltaic, in residential (or business) areas feeding energy to consumers located within a radius of one or two miles. There would still be backup power grids, but these would be of relatively low capacity, and hence less costly. Transmission losses would fall to much lower values.

All power plants are subject to unexpected breakdowns, and most types occasionally have to be shut down deliberately for scheduled maintenance or, in the case of nuclear plants, refueling. When a gigawatt generator suddenly drops out, this is usually a serious matter. In order to avoid possibly very harmful consequences, it is necessary that the power grid be able to supply a great deal of energy very quickly. This puts a further burden on the transmission lines and transformers, and means that substantial backup units must be available for prompt deployment.

In contrast, if electric power is furnished by a large number of small units, the likelihood of simultaneous breakdowns of a significant fraction of these units is very small. So, while some reserve capacity is necessary, it is much smaller than what is needed to back up very large generators. This assumes that the system is designed to deal with factors that might simultaneously reduce the outputs of many units of the same type, e.g., calm winds shutting down wind turbines, or overcast skies affecting photovoltaic systems. Energy storage systems might sometimes be needed.

Summing Up

The aforementioned factors suggest that generating power at, or very close to, the point of use, using the grid as back-up to smooth out fluctuations in availability, is a very attractive idea. It also reduces the need to dedicate large tracts of land for power plants, and, where the source is solar or wind, it reduces the need for waste disposal and the environmental insults associated with mining. (Note that there would still be environmental costs associated with the manufacture of the power generating units.) In general, we can reasonably assume that we could phase out the use of fossil fuel and still be able to obtain energy at a substantial rate at a reasonable cost without devastating the environment.

But that doesn't mean that there are no limits to economically available power. It it essential, on sustainability grounds, that we reverse the trend of increasing power usage per capita. We must increase the efficiency of systems and devices that use energy, and, even more important, we must sharply reduce wasteful expenditures of energy. Fortunately, from an economic point of view, given the generally low efficiency with which we use energy, plus the sheer waste, it is currently a lot cheaper to reduce power usage by a watt than to add a watt of generated power. How this might be done is the subject of a follow-up article [16].


  1. Wikipedia, "Energy in the United States", Wikipedia, July 25, 2009
  2. Wikipedia , "Price-Anderson Nuclear Industries Indemnity Act", Wikipedia, June 15, 2009
  3. Amory B. Lovins, Imran Sheikh, and Alex Markevich, "Forget Nuclear"Rocky Mountain Institute Website, April 28, 2008
  4. Louis Bergeron, "Wind, water and sun beat other energy alternatives, study finds", Stanford University News, December 10, 2008
  5. Wikipedia, "Fusion power" Wikipedia, July 25, 2009
  6. Wikipedia, "Wind turbine" Wikipedia, July 21, 2009
  7. Wikipedia, "Photovoltaics", Wikipedia, July 29, 2009
  8. University of Nebraska-Lincoln, "Biofuel: Major Net Energy Gain From Switchgrass-based Ethanol" Science News, Jan. 14, 2008
  9. NewNet, "Algae considered as long-term replacement for crude oil, according to new report", New Energy World Network , July 15, 2009
  10. Anna Austin, "Biomass bpedia, July 25, 2009
  11. GEF Council, "report of the review of the ocean thermal energy conversion project (otec), bridgetown, barbados", Global Environment Facility, May 9-11, 2000
  12. US Dept. of the Interior, "Ocean Wave Energy"
  13. , "Geothermal power", Wikipedia, July 25, 2009
  14. Matthew L. Wald, "Cost Works Against Alternative and Renewable Energy Sources in Time of Recession" NY Times, March 28, 2009
  15. Americas Generators, "100 kW Perkins UL Open Three Phase Diesel Generator Set Tier 3", website
  16. Stephen H. Unger, "The Energy Crisis: Part 2—Inefficiency and Waste", Ends and Means, August 17, 2009

Comments can be sent to me at unger(at)cs(dot)columbia(dot)edu

Return to Ends and Means

hit counter