The Energy Shortfall - Can Wind Fill the Gap?

Introduction

I'm a well known pessimist about the potential of wind and solar power to to plug the coming energy gap. In defense of my concerns, here is some analysis of the energy we will need to replace over the next few decades and the potential for wind power to address that shortfall.

Caveat: As with the previous articles in this series, the analysis is intended solely to clarify future trends based purely on the situation as it now exists and the directions it shows obvious signs of taking. The model does not include any effects of the various large-scale changes in direction that have been proposed to cope with declining oil supplies or rising levels of greenhouse gases. Solar or nuclear power "Manhattan Project" style efforts, for example, are not considered. Treat this scenario as a cautionary tale: Given projected trends in energy supplies, energy efficiency and population levels, this is a probable outcome if we just continue business as usual.

Supply vs. Demand

First we need to decide how much energy is the world going to need over the next few decades. We can find out how much we've used in the past from the BP Statistical Review of World Energy 2007. From that source we find that over the last 20 years global primary energy consumption has grown by an average of about 2% per year.

The world demand in the future is harder to predict, because we're heading into a time of recession (at the very least). Given the coming uncertainties and the possibility for a global conservation effort, for this scenario I cut the growth estimate of 2% in half, for a conservative average growth of 1% per year. That gives the following demand curve (MTOE stands for Millions of Tonnes of Oil Equivalent):

Now we need to decide what the energy supply will look like over that period. I did a fairly careful analysis of that question last year, and published it in this article. The following curve uses the data from that analysis, and aggregates the expected supply of oil, natural gas, coal, hydro and nuclear power:

Looking at those two graphs, it is obvious that there will be a growing gap between energy supply and demand:

Wind Power Potential

Here is a well-known chart from the World Wind Energy Association showing world wind capacity, installed and planned out to 2010:

We can extract the annual increase in installed capacity from that chart to give us the next graph. It shows the annual capacity addition out to 2050. It uses the data from the above chart out to 2010 and a mathematical projection from 2010 to 2050. It shows an estimate of the amount of wind capacity we will be able to add each year.

How does that added capacity compare to the requirement created by the gap we saw opening up above?

In order to answer that question I translated that gap into annual wind capacity installation requirements as follows:

I determined the amount of new energy required each year by subtracting the total demand in the previous year from the total demand in the current year.
I converted MTOE to TWh by multiplying by 4.42, the same conversion factor BP uses in their Statistical Review.
I converted the TWh figure into GW of capacity by first multiplying first by 8.76 to convert TWh of energy required per year to GW of power, then multiplying by 4 to account for an average capacity factor of 0.25.

I then plotted the resulting curve on the same graph as the actual installation curve shown just above. The result looks like this:

The projected growth in actual wind installations is a second-order polynomial projection, and that may turn out to be excessively conservative. Nevertheless, As you can see, a remarkable disconnect begins to develop in the coming decade. With the current increase in installed wind capacity the situation looks increasingly difficult as the decades roll by. I'm not saying it's impossible to plug the gap, but it looks to me as though there will be a massive energy shortfall unless something truly remarkable happens.

A small point of clarification is required about the above graph. As long as the curve of actual additions stays below the curve of required additions, the shortfall in cumulative capacity will continue to grow. Only once the installation curve rises to meet the requirement curve does the gap stop increasing. Then, mathematically speaking, installations would need to consistently exceed requirements to reduce the supply-demand shortfall. In the scenario above, it looks as though the gap would stop growing in about 2060 or so.

Objections

When I first published this article I received a number of objections to the assumptions and methodology. Each of those objections is addressed below. You may decide for yourself if my rebuttals are correct or sufficient.

You Shortchange the Role of Conservation

One question that comes up in response to any analysis like this is whether conservation can play enough of a role to soften the blow of energy decline. Might we be able to conserve our way out of the gap?

My answer is, "What amount of annual global energy reduction through conservation do you think is possible, probable and realistic?"

Our economic system is built on an intrinsic assumption of permanent growth, and has shown no sign at all of changing that cornerstone principle. If that continues to be the case, then conservation and efficiency improvements have to be modeled as an improvement in the energy intensity of the global GDP (I previously discussed energy intensity in this article.

As high-return energy sources like oil and gas are used up and gradually replaced by lower-return sources like biofuels and wind turbines, is such an improvement even possible? Some analysts (and I am among them) argue that it's not possible, that the reduction in the EROEI (Energy Return on Energy Invested) of the world's aggregate energy supply will cancel out most efficiency and conservation improvements. As a result I do not feel that the realistically expected levels of conservation will be enough over the time we have remaining.

You Didn't Mention Solar, Tidal or Fusion Power

There isn't enough history of large-scale solar or tidal installations yet to project a realistic growth curve for either. Certainly solar power might have a bright future :-)

but it's still too early to tell. Current global installed solar capacity is only 5% of wind. I used wind as a proxy for all renewables, because it has a very healthy growth curve, and one that can be extrapolated with some degree of confidence. I prefer to base my projections on a reasonable amount of historical data.

The same need for evidence mandates my exclusion of fusion -- let's get a couple of fusion reactors up and running first, and then see where we're at.

The Capacity Factor You Used is Too Low

Wind turbines typically put out a lot less power than their nameplate rating might suggest. While a turbine can theoretically put out any amount from 0 to 100% of its nameplate rating, the accepted 'average" range is 25% to 30% of nameplate capacity. However, some turbines in operation are putting out 35% of their rated capacity. Perhaps my assumption of 25% was too low?

For a global analysis like this I assume that since we'll be putting up wind around the world, the amount required will necessarily force us to build wind farms in some less-than-ideal locations (say in Africa or much of South Asia). As a result, I based the analysis on the lower number -- coming in on the low end of the first standard deviation for the global picture seems reasonable.

In fact, according to installed capacity figures for 2004 and 2005 from the American Wind Energy Association, and wind generation figures for 2005 from the Energy Information Administration, the actual wind generation capacity factor in the USA for 2005 was just a bit over 25%. The assumption appears sound.

What About High Efficiency Electric Transportation?

This argument insists that much of the additional electricity will be used for transportation. Since electric cars are much more efficient than gasoline powered automobiles, it will require less electrical energy to replace the transportation needs not being filled by gasoline.

While this argument is true, it doesn't tell the whole story.

A bit less than 70% of oil is used for transportation. Natural gas (which contributes to the total energy gap) is a very minor player in that application: it's used mainly for electricity, process heat and petrochemicals. As a result the overall impact of the higher efficiency of Electric Vehicles vs. Internal Combustion vehicles is diluted.

In addition, the conversion factor of 4.42 TWh of electricity per MTOE used by by BP is significantly lower than the thermal energy of oil (11.63 TWh of thermal energy per MTOE as given in standard conversions. As a result, the conversion the conversion factor already takes into account the higher efficiency of electricity, and certainly much of the improved efficiency of electric cars.

One last point is that some of the energy gap is due to the decommissioning of older nuclear reactors at their end-of-life, with insufficient construction to replace them. Any energy lost from that source has to be directly replaced by electricity from another source, with no source-related efficiency improvements available.

You're Ignoring the Price Elasticity of Gasoline Demand

This argument maintains that as gasoline prices rise due to shortages that gasoline use will fall off to compensate.

The own-price elasticity of demand for transportation fuel is actually quite low (i.e. demand is very price inelastic). Typical elasticity figures for gasoline in developed nations are around -0.1. That means that a 10% increase in fuel prices would result in only a 1% drop in demand. Even that figure seems too high in the short term given the fact that North American driving habits really haven't changed appreciably as gasoline prices have risen over the last couple of years. Part of that may be due to the lack of available substitutes like electric cars, but that's the picture at the moment.

The reason I think the elasticity picture is unlikely to change much in the near term is that fuel costs are still a small part of family budgets. That means that gasoline prices would need to rise a lot before most people saw much economic sense in investing in a new type of vehicle. I don't expect such a shift to be widespread before the next vehicle replacement cycle is over in 15 years.