Energy Independence Is Cool(er)? by Chris Trayhorn, Publisher of mThink Blue Book, May 14, 2007 There is growing interest in the U.S. both in achieving some increased degree of energy independence and in reducing CO2 emissions to minimize global climate change. While both are broad “goals,” no plan yet exists to accomplish either. Some believe that the U.S. should make a comprehensive effort to become completely energy independent, while others believe that a significant reduction in our dependence on foreign energy sources would be worth accomplishing. Similarly, some believe the U.S. should ratify the Kyoto Protocol, while others believe that CO2 emissions must be far more drastically reduced to stabilize CO2 concentrations in the atmosphere. Those who believe that atmospheric CO2 concentrations must be stabilized at or below 500 ppm to avoid irreversible, catastrophic global climate change estimate that this would require approximately a 75 percent reduction in global annual anthropogenic CO2 emissions by 2050. Achieving this level of global CO2 reductions on a per capita basis would require a reduction of approximately 95 percent in U.S. CO2 emissions over the same period. Following is a conceptual plan that would meet this reduction and, in the process, allow the U.S. to become completely independent from foreign sources of energy. It is intended merely to demonstrate the feasibility, expansive scope and massive costs associated with the above-stated goals, not to accept or endorse them. It also does not suggest that this conceptual plan is the only approach; merely that it represents one possibility. The fundamental assumptions underlying the development of this conceptual plan are as follows: U.S. population will continue to grow, reaching about 500 million by 2050; U.S. per capita energy consumption will remain relatively stable throughout the period; All current U.S. electricity generation capacity, with the exception of hydroelectric generation, will have reached the end of its useful life by 2050; All current U.S. energy-consuming systems and equipment will have reached the end of their useful lives by 2050; Technology that is not on the path to achieving the plan goals will not be implemented; and, New technologies will continue to be developed and implemented throughout the period. Each of these assumptions is subject to challenge; some are subject to legislative and regulatory interventions. Stationary Sectors The U.S. currently has an electric generation capacity of approximately 950 gigawatts, with a capacity reserve margin of ~17 percent, serving a population of ~ 300 million. Figure 1 illustrates energy flow in the U.S. All but ~100 gigawatts of this capacity (hydro and pumped hydro) will need to be replaced by 2050. In addition, the U.S. will require additional capacity of ~ 600 gigawatts by 2050 to meet the electric demands of its ~500 million population. This means that a total of ~ 1450 gigawatts of new and replacement generating capacity must be sited, designed, approved, financed and constructed over the next 43 years. This requirement could be reduced by a combination of demandside management, efficiency improvements and conservation; however, no national goal quantifies this potential and no national plan exists to accomplish it. No technology has yet been demonstrated at near-commercial scale that can accomplish permanent fixation of CO2. Therefore this plan assumes that all new central generation, other than renewable generation, will be nuclear until permanent fixation of CO2 has been demonstrated. This plan further assumes that renewable generation sources will provide 20 percent of total generating capacity in 2050, or ~ 300 gigawatts. The renewable share of generating capacity could be substantially larger if the technology to exploit dry hot rock geothermal resources, ocean thermal energy conversion or wave energy generation becomes economically practical. The renewable share could also be substantially greater if large-scale electric storage technology becomes commercially available and economically feasible early in the planning period, thus expanding the applicability of both solar and wind generation. Assuming a three-year design and approval cycle and a 10-year construction and commissioning cycle for nuclear generation, this would require the completion and commissioning of ~40 gigawatts of new central generation capacity each year, beginning in 2020. All of this capacity construction would have to occur, regardless of any effort to reduce CO2 emissions, to meet growing demand for electric power. However, the mix of generating technologies, including the fraction of renewable generation, would be affected by the efforts to control climate change. In addition, all residential, commercial and industrial end uses of natural gas, propane and fuel oil would be replaced by electricity or renewable fuels, assuming that biofuels can be produced and consumed with zero net CO2 emissions (ZNE). It is highly unlikely that CO2 fixation technology will be developed sufficiently within the planning horizon to make distributed CO2 capture and fixation economic. This would involve the construction of an additional ~750 gigawatts of electric generation over the planning period. Finally, all transportation use of gasoline and diesel fuel would be replaced with some combination of electric power, electrolytic hydrogen and ZNE renewable fuels. This would require the construction of an additional ~750 gigawatts of electric generation, the equivalent useful energy capacity of ZNE biofuels, or some combination of both sources. Therefore, if we assume that a combination of advanced nuclear generation technology, increased design commonality, expedited siting and design approval, uninterrupted construction and expedited commissioning results in an installed capital cost for nuclear generation of $1,500 per kilowatt, the generation investments required are shown in Figure 2. Regulatory delays could easily increase these investment requirements, as they did during the construction of the existing U.S. nuclear fleet. Once the technology for permanent CO2 fixation has been developed and demonstrated, new coal generation facilities could also be included in the generation mix. The amounts in Figure 2 do not include estimates of the investments required in nuclear fuel processing and reprocessing to support these nuclear plants. They also do not include any estimate of the investments needed to reinforce and expand the electric transmission and distribution infrastructure. Assuming that the current relationship between generation investment and transmission/distribution investment persists in the future, these investments would be on the order of $1 trillion. The sale of natural gas-, propane- and fuel-oil-powered residential and commercial appliances and equipment would be prohibited after 2020. This would permit them to serve out their normal useful lives and be replaced by electric appliances and equipment, or refitted to burn ZNE biofuels by 2040. This would then permit the natural gas pipeline system to be refitted or replaced to transport compressed hydrogen and the propane pipeline system to be refitted for biofuels transportation. Some gas and liquid pipeline capacity would still be needed to serve chemical manufacturing plants and fertilizer industry needs. It is assumed these industries would have sufficient scale to apply permanent CO2 fixation technology similar to that used on coal-fueled power generation. No attempt is made here to estimate the cost of replacing customer-owned direct natural gas, propane and fuel-oil burning equipment, since this equipment would be expected to require replacement during the planning period. Replacement with high-efficiency electric appliances would involve relatively modest incremental investment in most cases. Transportation Sectors Accomplishing a 95 percent reduction in U.S. CO2 emissions would require the complete replacement of petroleum-based fuel systems with ZNE engines and electric motors, since it is highly unlikely that permanent CO2 fixation technology will be applicable to vehicles, at least during the planning period. The vehicle fleet will consist of electric vehicles, hybrid and plug-hybrid vehicles, fuel cell vehicles and engine-driven vehicles. Vehicle fuels would include hydrogen and renewables, such as ethanol and bio-diesel, assuming that the renewable fuels can achieve ZNE. Based on a useful life of ~20 years for transportation vehicles, no new gasoline, E-85 or petro-diesel vehicles would be available for sale after 2020, allowing the vehicle fleet to be retired at the end of its useful life and replaced with ZNE vehicles by 2040. The petroleum refining infrastructure could then be largely retired, and the pipeline transportation infrastructure could be refitted for the transportation of renewable liquid fuels. The petroleum marketing infrastructure could also be completely refitted for the sale of renewable liquid fuels and compressed hydrogen. The investment in electrolytic hydrogen production facilities to produce the hydrogen required for vehicle fuel would range from $1 trillion to $3 trillion, depending on the portion of the market using hydrogen fuel cells or hydrogen-fueled engines and the types of vehicles in the H2 vehicle mix. The investment in distribution and marketing facilities is also estimated to be in the $1 trillion to $3 trillion range. No attempt is made here to estimate the cost of replacing transportation vehicles, since they would also need replacing during the planning period. At that time, they would be replaced with ZNE vehicles. Related Issues The U.S. is already experiencing regional water supply shortages at its current population of ~300 million. These shortages will be exacerbated by the anticipated population increase. Nuclear electric generation facilities located near the coasts or offshore would have access to virtually unlimited supplies of salt or brackish water for power plant cooling, as well as for desalination and the separation of hydrogen for use as vehicle fuel. The incremental investment required to use surplus off-peak electricity to produce the additional potable water required by the U.S. population in 2050 is on the order of $1 trillion. Assuming the average load factor on the U.S. generation fleet does not increase significantly above current levels, surplus generation capacity could be used offpeak to provide both potable water and hydrogen. The investment required in water purification and hydrogen production facilities is difficult to determine, because it is a function of the cooling water requirements of the new power generation facilities and the relative competitiveness and market acceptability of hydrogen as a vehicle fuel. Summary & Conclusions This cursory analysis suggests that it would be technically possible for the U.S. to transition to full energy independence by 2050, using technology to reduce U.S. CO2 emissions by ~95 percent. The total investment cost of this transition would be on the order of $10 trillion over the period. This estimate is based on data from a variety of sources within the U.S. government, including the Energy Information Administration and the national laboratories; and, in many cases, is based not on the current cost of the approaches identified but on projections of future costs. The total costs could be substantially higher if the anticipated technology improvements and cost reductions fail to occur or occur later in the planning horizon. Approximately 75 percent of this investment would be incremental to a business-as-usual scenario. This investment is approximately equivalent to the U.S. annual gross domestic product; thus it would require investment of about 2 percent of GDP per year over the planning period. Achieving this transition would require an immediate decision to proceed toward these goals. It would also require federal and state actions to accelerate facility siting approval and regulatory review and approval of design, construction and commissioning. While this is certainly possible and has been accomplished in other countries, it would represent a major shift for the U.S. The timely siting of the new power generation facilities will be perhaps the greatest political challenge, in light of the NIMBY (not in my backyard) and BANANA (build absolutely nothing anywhere near anyone) issues that have historically plagued the power industry in general and the nuclear power industry in particular. One potential approach to siting nuclear generation, hydrogen production and water desalination plants is to develop floating, offshore facilities installed on barges anchored behind massive artificial breakwaters. This concept, first “floated” by Westinghouse and Tenneco in the 1970s, would involve construction of “cookie cutter” facilities on the barges, which would be towed into position and placed in service. In today’s world, these floating power parks would require the protection of anti-ballistic missile and antisubmarine warfare installations to protect them from attack. One of the benefits of this approach is reduction of the costs associated with the one-off design of these facilities, as well as reduction in the time and cost of construction and inspection. Siting would likely be a major political issue, as evidenced by the resistance to liquefied natural gas terminals, oil production platforms and even wind farms offshore but within sight of land. It’s questionable whether the political will exists to make this massive investment in this time frame. If stabilizing CO2 concentrations is the goal, however, this conceptual plan represents at least one approach to getting there. Filed under: White Papers Tagged under: Utilities About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.