Renewable Energy is More than Gee-Whiz Glitz

1332_nrel_House_USE.jpg By: Matthew Marichiba
Hunting for work recently, I happened upon an opening for Director of Renewable Energy Engineering, which sounded perfect for the ambitions of a friend of mine. (It sounded perfect for my ambitions too, but I’m several years shy of the necessary qualifications.) In hard economic times, people help each other out, so I forwarded the listing to my friend. A couple weeks later he wrote back to say, “They called me back! I’ve got a phone interview next Tuesday.” And because his background is not in renewable energy, he added “Um…I’m not exactly sure what to do next.”
Renewable energy is not my specialty either, but I do have a career in electrical engineering and a head full of systems-thinking principles from my MBA at Presidio. That’s enough for me to hold strong opinions on the subject, and I like to think that mine are the kinds of opinions that every director of renewable energy engineering needs. So I sat down to help my friend out by outlining my thoughts on the subject. What came out, I discovered, were not technology-specific details, but rather principles that apply to any technology. They seemed like the kinds of big-picture principles that everyone should know, not just aspiring renewable energy professionals, and so I reproduce my list of “Renewable Energy Principles for 2009” here.

RE has to go hand in hand with EE. Energy efficiency (EE) is the biggest, best-known pot of renewable energy (RE) out there. Once you invest in efficiency gains, you reap those gains year after year. The Factor Four movement had some steam for awhile, and claimed that 4x gains in energy efficiency were well within reach. While striving to swap out 16 TW of global power production, it’s wise to consider the possibility that we might only have to put back 4 TW if we think outside of the “produce energy” box.

Business issues with energy efficiency

It’s good to be aware of the well-known hurdles to implementing better energy technologies in companies.
Capital vs. operational expense accounts: Capital expenditures to invest in EE or RE projects (such as on-site solar or geothermal) are accounted separately from the monthly expenses to pay for the energy, water, solid waste processing, etc. This leads to suboptimal financial decisions. For example, the department that builds the building does it for as cheap as possible, even when a more efficient (but more costly) building would pay off the difference quickly.
Split incentives: If a building is leased, the property owner doesn’t reap the benefits of installing RE and EE solutions, and therefore has no incentive to make the investment.
Budget boundaries: Generally the department that pays for utilities is different from the department that uses the utilities. So the energy payer tends to see it as a fixed expense of doing business, and the energy user has no incentive to try to use less.
Overly-stringent hurdle rates: Many companies arbitrarily impose a payback period of two or three years, which can amount to >40% internal rate of return (IRR), even though they couldn’t achieve such a high IRR elsewhere.

Life cycle impacts
Consider the overall life-cycle impacts of any technology. Sure, photovoltaic solar cells emit zero emissions in use, but you can bet your bottom that fossil fuels are used to produce them and to dispose of them (at present, anyway). Likewise for toxic inputs or outputs: recycling or remediating toxic chemicals will require further energy use. So the question is, after accounting for all the inputs required to make it and all the waste outputs that come out of it, are you really doing better than the fossil fuels you’re trying to replace?

Renewable inputs
Are all the inputs truly renewable and/or 100% recyclable? All mineral deposits in the earth’s crust are non-renewable resources, not just fossil fuels. A technology that eliminates fossil fuel consumption by switching to something else that requires a constant stream of some other mined substance is destined for the same fate as fossil fuels– unless those substances are 100% recyclable at end-of-life and you can mine and recycle them at the necessary scale.

Affordability & accessibility for “the other 4 billion”

Whatever the ultimate renewable energy solution is, it must work for more than the most affluent 2 billion people on the planet. It has to work for the poorest 4 billion as well. There will be different solutions for countries at different levels of development. (I imagine there will be multiple solutions even for similar countries.) Whatever the case, it’s safe to say that “solving” the energy problem only for the richest 2 billion will not solve the problem overall.

Beating the price of coal
Google’s RE campaign has put effort and awareness into the notion that renewable energy (RE) has to get cheaper than coal (C) in order to achieve a broad energy switchover, because the price of coal is the obvious “no brainer” threshold. It’s actually unlikely that renewable energy will ever get cheaper than coal or oil, because of simple supply and demand effects. Once RE=C, you get a surplus of C, which drives the price back down. Kilowatt for kilowatt, the price to generate RE has to be cheaper than the cost to extract oil and coal, which is unlikely when you consider that the entire world economy is based on sucking oil and coal out of the earth. Luckily, policy also affects the cost of fossil fuel extraction, which leads us to…

Until the RE<C goal is somehow realized, policy and politics are going to be part of the picture. A full-scale transition to renewable energy is an undertaking of such magnitude and complexity that politics can’t be avoided. So the specification for that solution, whatever it is, must include that it be politically viable. The development process needs to include stakeholder engagement along the way to ensure we end up with a product the public wants to use.

The sheer scale of the issue is unlike any other engineering challenge, because maintaining a steady flow of fossil fuel is an entrenched, necessary foundation of our economy (for now). A project to decommission and recycle all the oil rigs, oil tankers, offshore drilling platforms, pipelines, and refineries alone would be the greatest industrial undertaking in human history. For the sake of setting public expectations, we need to keep perspective on the scale of the issue. This is a massive undertaking which won’t be accomplished overnight (or in one presidency) and will surely have ups and downs along the way.

Getting power to the people
Power needs to be where the people are. Lots of neat-o ideas are impractical, because they only address a method to generate energy, without considering how to hook to the grid and get it to humans. The grid itself plays a big part in the overall solution. There are many issues at play: What transmission lines we do have need to get more efficient; distributed generation could eliminate the need for many transmission lines; the grid needs to accommodate these distributed agents coming on and off the grid; technology is allowing the grid to influence user consumption to balance the overall needs of the system. The point here again is to see the big picture. People don’t want renewable energy plants (or smart grids, for that matter); they want ubiquitous, reliable power to live their lives in comfort. Transmission and the grid are integral parts of that ubiquity and reliability.

Not about gee-whiz glitz
In the end, the renewable energy solution will not be about the nerdy sex-appeal of specific technologies. This factor is difficult to stomach for Silicon Valley engineers and entrepreneurs who have come to expect the fast growth and dynamism of eBays and Googles. (It’s also worth noting that physical technologies operate at the speed of the physical world– a fair bit slower than information.) All the technology in the world won’t make a pinch of difference, unless the issues above are also addressed sufficiently. In my mind, the renewable energy challenge is about finding an elegant, whole-system solution that encompasses all the above factors.

I leave this article with the same advice I left my friend: You’re a director, not an engineer. Don’t be ashamed of not knowing precise technical details of any one technology. There are a bunch of renewable technologies, and you obviously can’t be a master of them all. (That said, it’s nice to know the general categories of renewables: solar, wind, geothermal, biofuels, tidal, hydro, etc.) And so it goes for us, as ordinary citizens. As technologies in the clean energy revolution come and go– and many will come and go –we need to be able to see the larger picture. We need to assess individual strategies in light of the whole system and its guiding principles.

Matthew Marichiba is a writer, engineer, community organizer, and MBA in sustainable management living in Santa Cruz, CA. He helps organizations develop profitable strategies to bring forth a world that is environmentally sustainable, socially just, and spiritually fulfilling. He can be reached at matthew at marichiba dot com

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