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The Future of Energy in Japan – NEW Solar Trillions in Japanese

Foreword to the Japanese edition of “Solar Trillions”

On a clear afternoon on May 25th, 2012, solar in Germany generated 22GW, which represented a third of the whole country’s power needs [1]. This broke the world record. The following afternoon, solar generated 50% of Germany’s power, again breaking the previous world record. At the same time, solar drove German wholesale electricity costs DOWN by more than 40% in 2012 compared with 2008.[2] This represented more than €5 billion ($6.7 billion) in cost savings – assuming that the utilities passed the savings on to consumers.[3]

These facts have shattered myths and misinformation that utilities persist in telling you: that solar is expensive, that the grid cannot sustain more than a small percent of clean energy, and that solar is not ready to scale.

Much has happened in the energy world since “Solar Trillions” was initially published in the United States three years ago. The most important event for my Japanese readers is certainly the ongoing disaster at the Fukushima Dai-ichi nuclear power plant. This nuclear disaster makes reading this book even more vital. That is why we decided to offer the eBook version for FREE. After you read this book please tell all your friends about it. Feel free to email them an electronic copy or point them to where they can download it. Download it from Google Books here: http://bit.ly/ZeWHBl or from the Apple iTunes iBookstore soon.

Solar Keeps Growing Exponentially

The solar installed base continues to grow at exponential rates of more than 50% per year globally. In the United States solar wattage has doubled every year over the last three years.

Germany continues to be the world’s leading adopter of solar. As of October, 2012, there were 31 GW of solar connected to the grid.[4] This is the peak power equivalent of 31 nuclear power plants. The country’s maximum monthly power production from conventional sources in 2012 ranged from 50 GW to 65 GW [5]. In July, 2012, it became fairly common for solar to generate between 20% and 35% of the country’s total power needs.[6]

Europe continues its commitment to clean energy. In 2011 fully 69% of all the new power plant capacity in Europe was either solar or wind: 48% solar and 21% wind.[7] Spain built the world’s first baseload (24/7) solar power plant in July 2011. This 17MW solar plant has 15 hours of molten salt energy storage that generates electricity at anytime during the day or night – at 11pm, 1am, or 3am. I was there soon after it opened. Read about it on my blog here: http://bit.ly/W9es7w [8].

The United States is building a massive solar infrastructure of both concentrating solar power (CSP) and Photovoltaics. The US has more than 4,200 MW of projects under construction and more than 23,000 MW under development. [9] That is just for plants greater than 1 MW and does not include residential or commercial sizes. New Silicon Valley solar companies such as SolarCity, SunRun, and Sungevity are building hundreds of thousands of home and commercial solar. SolarCity recently went public at a valuation of more than $1 billion – and has gone up since.

In 2013 we should see the opening of the world’s largest baseload solar power plant (110MW) in Nevada (which will power Las Vegas into the evening hours) and the world’s largest solar plant (392MW) in California. MidAmerican Energy, a subsidiary of Berkshire Hathaway acquired what will be the world’s largest solar power plant (579 MW) when it opens in 2015. Since this company is run by Warren Buffet, probably America’s most successful investor, it may signal the mainstream acceptance of solar.

In the meantime, solar costs continue to drop, sometimes dramatically. In 2011 alone solar PV panels costs went down by 50% followed by more than 20% in 2012. Solar is already cheaper than what electricity consumers pay their utilities in dozens of markets around the world. The market price of solar panels is below 70 ¢/W. Some think (or hope) that this cost will ‘stabilize’ or even go up. I have seen business plans for solar panels at less than 50 ¢/W next year. The total capital cost of building a utility scale solar power plant has dropped below $2. Gerlicher Solar announced that they will build a 250 MW solar plant in Spain without any subsidies.[10] Solar is already cheaper than the grid in much of Spain so this company feels comfortable that solar can compete with conventional sources of energy without financial help from the government.

Saudi Arabia has announced that they will deploy 41,000 MW of solar (the peak equivalent of 41 nuclear power plants) – at a cost of $109 billion.[11] Why? They’re burning oil to produce electricity for things like water desalination. Instead of burning oil that they can sell for $100 per barrel (or more) in the open market they will use solar which produces electricity at a small fraction of the cost – equivalent to less than $20 per barrel.

By 2015 it is expected that unsubsidized solar will be cheaper than the grid for more than two thirds of American consumers. This means that more than 40 million homes will have to make a decision of whether they pay less for clean solar or more for dirty gas, coal, and nuclear that they buy from the utilities. The decision will not be about being green but about saving green (dollars). This residential market alone may be worth a trillion dollars (Solar Trillions.) The US commercial solar market may be larger. Similar trillion dollar market opportunities await around the world.

The Fukushima Dai-ichi Nuclear Disaster

Needless to say, Japan has lived through the tragic Fukushima Dai-ichi nuclear disaster. While there is very little positive that can be said about this type of tragedy, it has proved that nuclear is dangerous, expensive, and dirty – and that the country can live without nuclear.

Japanese citizens are not just paying for this disaster with their lives and their health but also with their wallets. The cleanup has already officially cost Japanese taxpayers more than $100 billion dollars [12] and will likely end up costing many times that over the next few decades.

Japanese taxpayers have learned that they are personally insuring the nuclear industry. This is because nuclear is uninsurable. Private insurance companies insure buildings like the new Freedom Tower in New York City (which was built on the site of the former World Trade Center towers.) Private insurance companies insure against the risk of hurricanes and airplane accidents – but they will not insure nuclear. Why? After more than six decades of data on nuclear power plants they know the risks. Not a single insurance company has stepped forward to cover the full costs of a nuclear accident. Not in Japan, not in the US, not in Germany. They know nuclear is too dangerous too insure. So taxpayers bear the costs.

A study commissioned by the German government reports that if a private insurance company were to insure a nuclear plant, the premium would amout to 0.139 €/kWh (19.9 ¢/kWh) to 2.36 €/kWh ($3.39 ¢/kWh).[13] That is, it would cost even more to insure nuclear than to generate nuclear. The report also concluded that
1. It would cost up to €19.6 billion ($25.1 billion) to insure a single 1 GW nuclear plant, and
2. The expected damage value of a nuclear disaster (in Germany) is 5,756 billion Euro ($8.27 Trillion).

Compare that with Germany’s Gross National Product (GDP) which was about $3.57 trillion in 2011. This means that a nuclear disaster would cost Germans more than the value of their whole economy for two years. In order words, a nuclear disaster could bankrupt one of the largest economies in the world.

Faced with such daunting data Germans decided to shut down eight nuclear reactors after the Fukushima disaster and their whole nuclear industry by 2022. Most countries in Europe have accelerated the nuclear phase-out process that they started after the Chernobyl nuclear disaster in 1986. Italy held a referendum in 2011 where 94% of voters rejected nuclear.[14]

Nuclear is uninsurable. But insurance aside, isn’t nuclear supposed to be cheap? Not quite. When the utilties say that nuclear is ‘cheap’ and generates power at 6 ¢/kWh or 9 ¢/kWh, or whatever magic accounting number they come up with, they are talking about power plants that were built in the 1970s or 1980s and have been paid for. (Fukushima Dai-ichi was commissioned in 1971.) Nuclear costs have escalated consistently over the last thirty to forty years. It is up to ten times more expensive to build a nuclear power plant today than it was back then. A new nuclear power plant will produce power at somewhere between 25 ¢/kWh and 30 ¢/kWh.[15] According to FirsSolar CEO James Hughes, a new solar power plant (without government subsidies) can produce power at about 10 ¢/kWh to 14 ¢/kWh depending on size, technology, solar radiation and interest rates. [16] Also, you can put up solar on your rooftop in hours or days. It takes at least ten years to build a new nuclear power plant.

This means four things:
1. New nuclear power generation is almost twice as expensive as the total costs of generating solar (or wind.) That doesn’t include nuclear insurance (which taxpayers subsidize separately).
2. It would be more expensive just to insure nuclear than the total cost of generating solar (or wind.)
3. If you add the cost of generation and private insurance, nuclear would be up to ten times more expensive than solar.
4. Nuclear is getting more expensive while solar is getting cheaper.

Politicians or energy executives who say to you that ‘nuclear is cheap’ or ‘solar is expensive’ probably have their hands in your pockets – or will soon.

The time for solar is now

In Germany solar is already cheaper than utility power (“grid parity). Japan is sunnier on average than Germany, so the cost of solar electricity should be lower in Japan than in Germany. Solar in Japan will be cheaper than what consumers pay the utilities (“grid parity”) by 2015, according to Bloomberg New Energy Finance.[17] That’s only two years away!

Speaking in my clean energy class at Stanford last year, Danny Kennedy, the President of Silicon Valley solar installer Sungevity, said that 78% of his customers start saving money on day one. Since then the cost of solar panels has gone down more than 30%.

Located next door to Stanford University where I teach, the city of Palo Alto recently signed a 25-year deal to buy solar power for about 7.7 ¢/kWh.[18] Compare this number to what your utility is telling you that solar will cost. Also, look at your power bill and see how much you’re paying. They’ll tell you that solar is too expensive and that Japan is not a sunny county. Consider this: the solar Feed-In-Tariff in Germany is between 11.28 Eurocents/kWh (14 Yen/kWh) for large solar plants and 16.28 Eurocents/kWh (20.3 ¥/kWh) for installations smaller than 10 kW (homes or small businesses).[19] That is, solar in Germany is already cheaper than what homes in Japan are paying for dirty nuclear and fossil power. Germany is less sunny than Japan. Ask your utility why you’re paying more for dirty power than what Germans are paying for clean solar power.

The time to go solar is now. Learn more in this book and spread the word. Solar is not just the future of energy. It’s the present.

For more information, videos, and the latest news, check out my blog (tonyseba.com/blog), YouTube channel (http://www.youtube.com/tonyseba), join the Solar Trillions facebook page (https://www.facebook.com/SolarTrillions), or follow me on twitter (tonyseba).

Again, that is why we decided to offer the Japanese eBook version of Solar Trillions for FREE. After you read this book please tell all your friends about it. Feel free to email them an electronic copy or point them to where they can download it. Download it from Google Books here: http://bit.ly/ZeWHBl or from the Apple iTunes iBookstore soon. You can also purchase the print version (http://amzn.to/ZGlfTq) or Kindle version on Amazon.com.

Endnotes

[1] https://tonyseba.com/cleanenergyeconomy/germany-100-solar-power-by-2020/
[2] http://www.renewableenergyworld.com/rea/blog/post/2012/05/lots-of-solar-power-may-reduce-not-increase-electricity-prices
[3] Renewable Analytics: “Effects of PV Electricity Generation on Wholesale Power Prices – Analysis March – July 2012”
[4] http://en.wikipedia.org/wiki/Solar_power_in_Germany
[5] http://www.ise.fraunhofer.de/en/downloads-englisch/pdf-files-englisch/news/electricity-production-from-solar-and-wind-in-germany-in-2012.pdf
[6] Renewable Analytics – “German Case Study Grid Adaptation to Intermittent Power Sources”, presentation at Solar Exchange West, August 2012
[7] “Wind in Power”, “2011 European Statistics”, Feb 2012, European Wind Energy Association, http://www.ewea.org/statistics/
[8] https://tonyseba.com/large-scale-solar/the-worlds-first-baseload-247-solar-power-plant/
[9] http://www.seia.org/research-resources/major-solar-projects-list
[10] http://www.gehrlicher.com/en/home/press/details/article/gehrlicher-solar-espana-signed-with-the-government-of-extremadura-the-agreement-for-the-constructio/
[11] http://www.bloomberg.com/news/2012-05-10/saudi-arabia-plans-109-billion-boost-for-solar-power.html
[12] http://www.bloomberg.com/news/2012-11-07/fukushima-137-billion-cost-has-tepco-seeking-more-aid.html
[13] Report URL: http://www.bee-ev.de/_downloads/publikationen/studien/2011/110511_BEE-Studie_Versicherungsforen_KKW.pdf
[14] http://en.wikipedia.org/wiki/Nuclear_power_in_Italy
[15] http://www.huffingtonpost.com/rep-bernie-sanders/its-time-for-a-solar-revo_b_460195.html
[16] http://reneweconomy.com.au/2012/interview-first-solar-ceo-james-hughes-72086
[17] http://www.bnef.com/Presentations/download/90
[18] http://www.stanforddaily.com/2012/11/15/palo-alto-enters-25-year-solar-energy-contract/
[19] http://www.germanenergyblog.de/?p=12092

Tony Seba at Gemasolar - the world's first baseload (24/7) solar power plant in the world.

Will Germany Achieve 100% Solar Power by 2020?

On a clear Friday in May 2012 Germany generated more than 22 GW of solar power. This represented about a third of the country’s power that afternoon and was equivalent to the output of about 20 nuclear power plants.(1) The following afternoon solar generated fully half the power in the country.

Tony Seba at Gemasolar - the world's first baseload (24/7) solar power plant in the world.

Tony Seba at Gemasolar, the world’s first baseload (24/7) solar power plant in the world.

Solar penetration numbers that seemed far-fetched just a few years ago are already becoming commonplace in Germany. This abundance of solar has pushed peak power prices down as much as 40% thus saving electricity consumers substantial money.(2)

But Germany is not stopping there. The country’s leadership has announced that they will triple their solar infrastructure to 60-70 GW by 2020. Which means that on a clear afternoon in August 2020 Germany will generate 100% of its peak power with solar electricity.

Peak power, total power

Peak power does not mean total power. While 60-70 GW of solar capacity will be impressive, it will represent only about 10% of the country’s total generation capacity. This means that Germany will get 100 percent solar only for a couple of hours per day during sunny afternoons. Furthermore Germany’s solar (or wind) infrastructure today does not have the ability to time-shift power generation for later consumption (think Tivo for electricity). In order for solar (and wind) to make a bigger impact in the overall power generation picture Germany will need to build an energy storage infrastructure.

Spain already has baseload and intermediate solar power plants that allow them to meet power demand in the evening. I wrote about the world’s first baseload (24/7) solar power plant last year.(3) These are, however, concentrating solar power (CSP) plants with molten salt thermal energy storage. Molten salt storage technology is fairly cheap ($50 to $100 per kWh) which makes it financially viable today. The U.S. is currently building a fleet of solar CSP with storage in California, Nevada, and Arizona.(4)

CSP works in places with high, desert-like solar radiation such as the U.S. SouthWest, Southern Spain, the Middle East and North Africa. Germany doesn’t use molten salt storage because it doesn’t have enough solar radiation to make this technology viable.

Solar Photovoltaic (PV) technology generates electricity under any type of sunshine but it needs electric (not thermal) energy storage. There are several technologies that can be used for this purpose, from century-old workhorses like lead acid batteries to newer contenders such as Zinc-Vanadium Redox, Lithium-Ion batteries and super-capacitors. They all have different capabilities (power density, energy density, efficiency) but most are still not financially viable for mainstream applications.

Solar panels have dropped in cost by an order of magnitude over the last decade or so because of an increase in investment, installed capacity, R&D, and competition. Wind turbines went down a similar experience curve a decade or so before solar. The challenge (and opportunity) for battery manufacturers is to match solar and wind and drop their cost by an order of magnitude over the next decade.

The Ultimate Job Generation Machine

The business opportunities in enabling Germany, California and other clean energy economies to achieve higher solar and wind penetrations are substantial. For instance, the demand for grid storage solutions will grow more than fifty-fold in just five years, from $3 billion in 2012 to $160 billion in 2017, according to PriceWaterhouseCooper’s Brian Carey.(5)

Germany’s clean energy job generation engine has turned into the country’s ultimate driving machine. Today there are 380,000 clean energy jobs in the country up from 30,000 in 2000, according to Hans-Josef Fell, a Member of the German Parliament. Mr Fell and I spoke at the recent Intersolar North America show in San Francisco. The equivalent number in the United States would be roughly 1.4 million clean energy jobs, since the U.S. population is nearly four times Germany’s.

Germany is poised to be the world’s first large economy to be 100% solar-powered at a given time. The country will face technical challenges but if the recent past is any indication Germany’s clean energy policies will attract hundreds of billions in investments and create hundreds of thousands of jobs to develop and deploy the clean energy generation, energy storage and smart-grid technologies to make it happen.

Sources:
(1) “Germany breaks world record for solar power generation with 22GW”,
PV-Tech, May 28, 2012, at http://www.pv-tech.org/news/germany_breaks_world_record_for_solar_power_generation_with_22gw
(2) “Solar PV Reducing Price of Electricity in Germany”, Feb 9, 2012, Cleantechnica http://cleantechnica.com/2012/02/09/solar-pv-reducing-price-of-electricity-in-germany/
(3) “The World’s First Baseload (24/7) Solar Power Plant in the World”, June 21, 2011, https://tonyseba.com/large-scale-solar/the-worlds-first-baseload-247-solar-power-plant/
(4) “Baseload (24/7) Solar: A Brief History and Bright Future of a Game-Changing Innovation”, July 5, 2011, https://tonyseba.com/large-scale-solar/baseload-247-solar-a-brief-history-and-bright-future-of-a-game-changing-innovation/
(5) “Energy Storage Outlook: Promising Technologies, Applications, and Business Models for the Future”, July 9, 2012, presentation at Intersolar North America.

Video: Can Bio Energy (bioethanol, biodiesel) Scale? Are Biofuels Sustainable?

Biofuels like bioethanol and biodiesel, and biomass like wood pellets, have been supported by governments around the world as a form of ‘renewable’ energy and as a way to achieve ‘energy independence’ by substituting bio energy for imported oil. But is bio energy clean? And can it scale? Is bio energy sustainable? Can it be financially viable?

Watch this excerpt from a recent keynote on the Future of Energy where I talk about biofuels and biodiesel, starting with the fact that green plants are solar plants.

Grameen Shakti - Solar Home System Adoption Curve

Can the Poor Afford Solar?

Seventy percent of the Bangladeshi population has no access to electricity—a shameful number in a nation with such great solar radiation. Lack of energy makes it difficult if not impossible for people to better themselves socially and economically. Without electricity you can’t run an efficient poultry farm, a food catering business, or even a basic home sewing business.

So Grameen Bank founder and Nobel Peace Prize winner Dr. Mohammed Yunus started Grameen Shatki to bring solar power to the people. GS would employ the same principles as Grameen Bank: to give poor and rural people access to a resource with which mainstream institutions and “the market” had formerly neglected to provide them.

In 1997, Grameen Shakti provided the know-how and the credit for the installation of 228 solar panels. GS trains installers who go door-to-door in rural centers promoting the benefits of solar electricity. Since most homemakers are women, 50% of these installers or “engineers” are also women. Bangladesh is a socially conservative country. Having men performing these duties is problematic because it’s not considered appropriate for women to be visited at home by a man who is not their husband or other close family member. But this very restriction on women at home creates an opportunity for other women to learn skills and earn money.

Over the decade after 1997 Grameen Shakti grew almost a thousandfold. By 2008 it had installed a cumulative 220,000 “Solar Home Systems” and was still growing at 100% per year. It had also provided “green jobs” to 8,000 people, of whom 4,000 were “engineers” or installers. Most of these 4,000 people were school dropouts (it’s common in Bangladesh for girls to leave school very early in order to help at home) who might otherwise not have had a chance at decent jobs and economic advancement. (2)

Grameen Shakti - Solar Home System Adoption Curve

Bangladesh Solar Home System Adoption

The cost of a Grameen Shakti solar home system (SHS) including the (Japanese) rooftop solar panels, the electronic components, and a battery is $350-$400. Buyers put down 10-15% of this cost and get a 3-year loan to amortize the system (2). At this point they own a solar generating system that should provide electricity for 20 years.

The energy capacity installed by Grameen Shakti as of March 2009 is 11 MW, equivalent to the PS10 tower power plant in Seville. This capacity benefits up to 2 million people daily and produces 44 MWh per day. (3) The electricity lights up homes, powers television sets, and recharges cell phones at night.

These solar generators are mainly displacing kerosene, which is people’s main source of light and cooking energy throughout Bangladesh—and throughout much of the poor world. Kerosene costs up to $2 per kWh, about 20 times what I pay for electricity in San Francisco. The poorest of the poor are paying much more than we are, both in absolute terms and as a percentage of their incomes!

What’s more, kerosene also kills people, not just by fire but by producing noxious fumes. According to UNESCO, more than two million children died from acute respiratory disease in 2000; 60% of these deaths were associated with indoor air pollution and other environmental factors (4). Kerosene is not just expensive. It’s downright dangerous.

Meanwhile, solar energy is even more capable of distributed operation than cell phones are, since solar PV has no need even for transmission towers. The potential to reach everyone everywhere and give them access to modern energy is unique to solar. Can anyone say “democratization of energy”?

The sky is literally the limit for the growth of solar energy. Grameen Shakti plans to install one million solar home systems by 2012 and wants to create 100,000 green jobs by 2015 (5). Create jobs and advancement opportunities for the poor, save children’s lives, and save the planet too? This sounds like another Nobel Peace Prize to me. In January 2009 Dipal Barua, who spun off Grameen Shakti from Grameen Bank in 1997 and has been its Managing Director since, won the $1.5 million Zayed Future Energy Prize (6).

Grameen Shakti proves that a profit-making, market-based enterprise with a social purpose can give millions of poor people access to electricity without a transmission grid
, just as China proved that similarly inexpensive processes can give phone access to hundreds of millions without a traditional telecommunications infrastructure.

Solar makes Power to the People an affordable reality. Today.

Adapted from “Solar Trillions – 7 Market and Investment Opportunities in the Emerging Clean-Energy Infrastructure”, Chapter 6 – Opportunity IV—”Power to the People: Residential-Scale Solar” (Copyright © 2009 by Tony Seba). Available at Amazon.com http://www.amazon.com/Solar-Trillions-Investment-Opportunities-Clean-Energy/dp/0615335616

Endnotes:
(1) Grameen Shakti “At A Glance March 2009,” http://www.gshakti.org/glance.html
(2) “Grameen Shakti Brings Sustainable Development Closer to Reality in Bangladesh” , GreenBiz.com, January 21, 2009, http://www.greenbiz.com/blog/2009/01/21/grameen-shakti
(3) Grameen Shakti “At A Glance March 2009,” http://www.gshakti.org/glance.html
(4) United Nations Education Scientific and Cultural Organization (UNESCO) World Water Assessment Programme http://www.unesco.org/water/wwap/facts_figures/water_energy.shtml
(5) Grameen Shakti “At A Glance March 2009,” http://www.gshakti.org/glance.html
(6) “Zayed Future Energy Prize Recognizes Dipal C. Barua,” Reuters, January 19, 2009, http://www.reuters.com/article/pressRelease/idUS154081+19-Jan-2009+PRN20090119

Solar Trillions Cover

The Solar Water Heater Market Opportunity

On December 1, 2008, General Electric announced that it was entering the solar water heater market (1). The previous year a grand total of 12,000 such heaters were sold in the United States residential market. GE is one of the largest companies by revenues and market capitalization in the world. To move the needle at this company, a business has to sell in the billions and promise steady growth as far as the eye can see. Why would GE get into such a tiny market?

Let me take you back in time to mid-twentieth-century Israel. After the country experienced its first major energy crisis in the 1950s, it made solar water heaters compulsory. By 1983, 60% of Israeli homes had solar water heaters and now every new home in the nation has to heat water this way. In Israel today, 90% of homes have solar water heaters (2). This is not some touchy-feely environmental movement: it’s the law.

While the U.S. is playing catch-up, the solar water heater market offers tremendous growth opportunities. There are more than 90 million homes in this country, virtually all of which have a water heater. More than 1 million new houses are built each year and most of this growth is in the south and western parts of the country—the sunny areas.

Solar water heaters are three times more energy efficient than electric water heaters and twice as efficient as gas-fired heaters. Given that 15% of a typical residential energy bill goes to water heating, a homeowner could save up to 10% of that bill by switching to a solar water heater.

Each year 9 million (non-solar) water heaters are sold in the United States. A market penetration anywhere near Israel’s, and GE’s business would grow exponentially in this country. Water heater prices vary, but in 2006 consumers spent an average of $440 to replace their water heaters ($581 for gas units and $353 for electric units). (3) This would make water heaters a nearly $4 billion-a-year market—$160 billion over the next four decades. That’s just in America!

Hawaii requires that all new homes built in 2010 and after come with a solar water heater. California’s Solar Hot Water and Efficiency Act of 2007 has created a goal of installing 200,000 solar water heaters in the state by 2017. Other countries like Australia and Spain have also approved laws requiring solar water heaters for new construction.

While many companies are chasing the high-tech route to win in solar, there are multibillion-dollar opportunities like the solar water-heater market that are heating up right now. GE should know.

Adapted from “Solar Trillions – 7 Market and Investment Opportunities in the Emerging Clean-Energy Infrastructure”, Chapter 6 – Opportunity IV—”Power to the People: Residential-Scale Solar” (Copyright © 2009 by Tony Seba). Available at Amazon.com http://www.amazon.com/Solar-Trillions-Investment-Opportunities-Clean-Energy/dp/0615335616

Endnotes:
(1) “GE Plunges into Solar Water Heater Market,” Contractor Magazine, accessed July 16, 2009 at http://contractormag.com/green-contracting/ge_plunges_solar/
(2) “90 % Of Israeli Homes Have Solar Water Heaters,” Environmental News Network, July 7, 2008, http://www.enn.com/energy/article/37584
(3) “The Residential Water Heater Market 2006,” Kema Report #E06-158, July13, 2006

Solar Trillions Cover

Can Egypt join the ranks of Energy World Powers?

If Egypt were to realize less than one percent of its solar energy potential, it could be a larger energy producer than all the Middle East oil exporters put together. It could power the energy needs of its growing population and could be a net exporter of solar electricity to Europe.

How large is Egypt’s potential? To find out let’s look at one of Egypt’s engineering achievements: the Aswan hydroelectric plant. To generate 2.1 GW Egypt created Lake Nasser, a 6,000 Km2 (2,300 square miles) artificial lake. What if Egypt took the equivalent land mass (6,000 Km2) and built solar plants? How much power could that generate?

A Concentrating Solar Power (CSP) plant the size of Lake Nasser (which powers the Aswan hydro plant) could generate the equivalent of about 9 billion barrels of oil per year. This is equivalent to oil production from the whole Middle East! (1) This could be done using today’s technology (which is rapidly improving in efficiency and decreasing in cost!)

Egypt’s total land mass is about 1 million Km2, most of which is uninhabited deserts. Basically we’re talking about taking 0.6% of the land mass of this country to turn it into an energy world power!

Distributing the power

How would Egypt distribute all that energy to gigawatt-hungry nations? Right now, Egypt’s transmission grid is connected to Jordan, Syria, and Turkey to the northeast. To the west it is building an interconnection with Libya, which is also working on a link with Tunisia that will be connected to Morocco and Spain. Spain is connected to Portugal and has a small connection with France. Of course, selling to Europe through that old grid would not be efficient.

New Zealand already powers the North Island with power generated in the South Island—with HVDC transmission lines underwater between the two islands. The same could be done in the Mediterranean. I will later talk specifically about HVDC lines. Suffice it to say that it only leaks 3% every 1,000 Km.

Furthermore, the cost of producing solar power is rapidly falling. It is expected to fall to the equivalent of oil at $20 per barrel by 2020 and to $15 per barrel beyond that point. Remember that oil hit $147 in 2008 and is now hovering around $80 per barrel now. So Egypt could generate power at 10-25% of what it pays today.

Yet despite Egypt’s superior solar resources and export possibilities, 83% of that nation’s electricity today comes from burning oil or natural gas—which is quite expensive and released 34 million tons of carbon into the atmosphere (about half a million tons per Egyptian.)

Egypt can certainly build solar plants. This country has built massive civil engineering projects like the Aswan Dam and the Suez Canal. Can this country rise to the challenge of making itself an energy world power? Two centuries after Napoleon’s military power invaded Egypt, Cairo can turn the tables by exporting solar power back to Europe. This time, though, it would be a peaceful mutually beneficial endeavor—using solar energy and HVDC lines.

Egypt could go from a net importer of expensive energy to a net exporter of energy. It could create a massive number of jobs building and operating solar power plants and it could attract companies like data center operators seeking abundant and inexpensive energy.

Egyptian entrepreneurs, investors, and policy-makers have the opportunity to create massive wealth, a more prosperous economy, a high standard of living for its population, and a brighter and cleaner future.

Doing the numbers

All the numbers here come from Franz Trieb and his team at the German Aerospace Center (DLR). (1) Take a look at the numbers and let me know what you think!

Assumptions:
Solar irradiance = 2,400 kWh/m2/yr
Solar-to-electric net efficiency = 11%
Land use = 95% land use (linear fresnel)
Heating value of 1 Barrel of oil = 1,600 kWh

Solar Power generation per year per Km2 = 1 million m2 * 2,400 KWh/m2/yr

Oil-equivalent Solar Power per Km2 per year = 1 million m2 * 2,400 kWh/m2/yr / 1,600 kWh = 1.5 million barrels of oil/km2/yr

Lake Nasser has 6,000 Km2 so the total solar power the equivalent land could generate would be = 6,000 Km2 x 1.5 million barrel = 9 billion barrel/yr

According to the U.S. Energy Informatio Agency (EIA) total Middle East Oil production in 2006 was about 9.2 billion barrels – or about 31% of the world total.

Sources:
(1) Franz Trieb et al,”AQUA-CSP – Concentrating Solar Power for Water Desalination” German Aerospace Center 2007
(2) “Assessment of Parabolic Trough and Power Tower Technology and Performance Forecasts,” Sargent & Lundy, 2003

The Future of Energy

Welcome to my blog on the Clean Energy Economy!

I believe that the clean energy economy will produce some of the most important new business opportunities of this generation and the twenty-first century. New companies, industries, regions, and countries will emerge to dominate the emerging multi-trillion dollar firmament. The entrepreneurs, investors, and societies who emerge on top have a once-in-a-generation chance to redraw long-ossified boundaries and reap vast amounts of wealth in the process.

In many ways energy is the most important industry in the world.

In 2007 worldwide energy revenues were $6.3 Trillion. That was before energy prices more than doubled. A simple calculation, assuming stable prices and annual demand growth of 1.75%, tells us that the world will spend at least $382 trillion in energy over the next four decades. Just to compare, the whole Gross Domestic Product of the United States in 2009 was $14.4 trillion .

Energy is also the most important global strategic issue today. Many other industries and issues are tightly linked with and dependent on energy: clean water and food supply; war and terrorism; poverty and disease; the environment and the economy; even human rights.

Our energy choices inevitably affect all these issues. Attempting to draw a simplistic picture of energy that separates energy from these issues will not work. You just cannot fool Nature. For instance, America’s – and much of the world’s – clean water supply will be tightly dependent on our energy choices. We will reach ‘peak water’ before we reach ‘peak oil.’ I will write about both a crisis in the making and entrepreneurial opportunities in water.

The Architecture of Energy

The whole architecture of energy will change: from centralized to distributed, from horizontal to vertical, from wasteful to efficient, from dirty to clean. Think about how personal computers transformed computing. Think about how cell phones transformed telephony. Think how PCs, cell phones, and the Internet together transformed most industries and most economies over the last 30 years.

Here are some of the characteristics of this new architecture of energy that will impact and transform our future.

1- Energy wants to be distributed.

2- Energy wants to be scalable.

3- Energy wants to be grid-independent.

4- Energy wants be embedded.

5- Energy wants to be clean.

6- Energy wants to be social.

7- Energy wants to be free.

In this blog I will elaborate on all these topics and on the opportunities being created for the entrepreneurs who take advantage of this new architecture. (You can also go to Amazon.com and buy my recently published book “Solar Trillions – 7 Market and Investment Opportunities in the Emerging Clean-Energy Economy” where I also reveal markets worth trillions of dollars.)

What Happens in Energy Doesn’t Stay in Energy

That the new architecture of energy will transform the energy industry is a given. What is not well understood is that the new architecture of energy will touch every industry in the world.

The PC, the cell phone, and the Internet transformed not just computing and the information technology industry. They transformed dozens of industries, from publishing to automotive to retail to education. They also created new growth opportunities for those who “got it.”

Similarly many industries and most large companies around the world will be shaken up by the technology tsunami unleashed by society’s move to the clean energy economy. The energy-intensive industries will be the first ones to feel it: transportation, construction, electric appliances, and retail are obvious examples

Just as PC, cell phone, and Internet did before, the clean energy economy will deliver more power to the people, and in the end the consumer will be better off. Industries and companies that just sit tight and collect money while creating little value for the end user will feel the pain – they same way such companies did with the advent of the Internet.

Any CEO who thinks that what happens in the energy industry stays in the energy industry has his or her head in the sand. Every Fortune 500 company, from Wal-Mart to American Airlinesto Nestle’, will feel the transformations wrought by the clean energy economy. And any CEO who allows the oil, coal, and nuclear industries to define government energy policy will face the fate of General Motors, Digital Equipment Corp, and Sears.

Google knows this. That’s a major reason why they have entered the energy business. Nissan knows this. That’s why they’re furiously developing the battery-electric vehicles of the future. Wal-Mart knows this. That’s why they’re redefininng their business for carbon-free energy.

Resistance will be futile. Imagine computer mainframe vendors successfully resisting society’s move towards the personal computer. Imagine the landline phone companies successfully resisting the mobile phone or internet telephony. Imagine newspaper publishers and encyclopedia vendors successfully resisting the Internet.

But resist many will. The transition to the clean energy economy will be anything but clean. Few executives and few industries want to give up a multi-year, multi-trillion dollar gravy train. In true Orwellian fashion, old dirty energy industries will claim and get massive government subsidies – much more than they already get. In true Orwellian fashion, dirty will be clean while clean energy will be attacked on “environmental” grounds. There will be cynical attempts to push for politicians to include dirty energy as part of their “Renewable Energy Standards.” Taxpayer money will freely flow in the direction of these dying industries.

The Clean Energy Century

President Obama has said that “the nation that dominates the clean energy economy will be the nation that dominates the next century.” That nation will be the host of the Googles, Apples, Intels, Microsofts, General Electrics, and Ciscos of the clean energy century. What choice are you making today?

In this blog I will attempt to provide analysis and perspectives on the clean energy economy – especially from an entrepreneurial point of view. Thirty years from now, the clean energy economy will have brought more wealth, created higher standards of living, better jobs, and a healthier world than ever before. That’s something to look forward to.

So welcome to my clean energy economy blog. Together, let’s “Create Wealth, Grow the Economy, and Save the Planet!”

Tony Seba

Footnotes:
(1) U.S. Dependence on Oil in 2008: Facts, Figures, and Context,” Andrew Grove, Robert Burgelman, and Debra Schifrin, Stanford Graduate School of Business, Research Paper No. 1997, August 2008

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