The Peak Oil Crisis: Alternatives

Something few of us are aware of is the massive waste built into the energy systems we have built over the last 100 years. This week, I am going to talk about electricity generation, but the same point can be made about the internal combustion engine which is a monument to inefficiency.

Most electricity is generated in massive remotely located plants – be they powered by coal, oil, natural gas, or nuclear reactors. These edifices, on average, waste two-thirds of the fuel that goes into them. Most energy is lost as waste heat that goes into the air or a local body of water, and the rest in line loses while bringing the power tens or hundreds of miles from the generator to the user.

In terms of green house gases, we could have the same lights, appliances, heating and air conditioning for half the carbon emissions if we simply switched from the current paradigm to decentralized power generation. If we toss some user conservation into the equation — more efficient lights, appliances, insulation, and whatever – it just might be possible to stretch dwindling supplies of oil, natural gas, coal, and uranium far enough to allow time to replace fossil fuels with renewable sources of energy.

Combined heat and power (CHP), also known as cogeneration, is an efficient and reliable approach to generating power and thermal energy from a single fuel source. The fuel can be any of the traditional fossil fuels – coal, oil, natural gas or nuclear or even some renewables such as biomass. The main point is that the generating plant, most likely a smaller one, must be located close to the end user so that the excess heat can be used to heat and cool buildings or help power manufacturing facilities. The key point is that excess heat be piped to some useful purpose and not just wasted.

There is nothing new about cogeneration; it has been around for decades. Currently almost 8 percent of electricity in the US is generated at CHP plants. The problem, however, is that given the current economic and regulatory environment, cogeneration simply is not spreading fast enough to keep up with the need to reduce carbon emissions and the need to replace fossil fuels.

This is not pie in the sky. There are already cogeneration plants working in Denmark, Sweden and the Netherlands that, in some cases, are attaining 95 percent efficiency in their consumption of fuel. The EU has pronounced cogeneration as the best solution to reducing carbon emissions from electricity generation.

Although there are very impressive facilities running around Copenhagen, probably the most advanced project is in Malmo, Sweden where the goal is to produce electricity, and to heat and cool the town only with local, renewable fuel sources. The folks in Malmo probably have the formula for transitioning to the future about right.

They start with cogeneration plants with separate networks for electricity and heat transfer running around the town. Buildings on the network are not only highly energy efficient, but they also have solar panels for trapping heat and generating electricity and, in some cases, small wind turbines. When a building is generating more energy than it needs for its own use, it feeds the excess back into the appropriate network so that it can be used elsewhere in town. Thus, every building can be considered a mini renewable cogeneration plant.

The long run goal in such a plan is to switch the central cogeneration plant from fossil fuels to biomass, with wind, solar and sea power taking up the slack. With every building making a contribution to the collective effort, the whole plan seems elegant and feasible.

Now to the question of just how the folks in Europe have managed to get themselves closer to the renewable energy nirvana. I hate to say this, but it seems to have a lot to do with regulation and taxes, something we are currently adverse to here in America, preferring to let the markets sort things out. It seems the Swedes have some of the highest carbon emission taxes in the world, which is a good place to start. However, there are all sorts of other actions governments can take to encourage greater efficiency. These could range from forbidding the construction of non-cogeneration electric power plants to raising the taxes on coal and natural gas not used in cogeneration plants.

Another part of this is the regulatory/land use situation. Since cogeneration depends on building the generating station close to its customers so that the excess heat will have some place useful to go, you obviously will run into local opposition. I would suspect large increases in electricity costs will go a long way to overcoming such opposition. As coal may be the only affordable fossil fuel available a decade or two from now, the whole emissions and carbon sequestration issue also will be part of the equation.

How do we get to a world of cogeneration someday phasing into all renewables? Obviously it will be a lengthy process costing trillions of dollars, for it involves a fundamental reengineering of our energy delivery systems. I suspect rapidly increasing costs and shortages for the energy used to generate electricity and keep us warm will be the main driver. Oil-fired electricity generation will soon price itself nearly out of the market, soon to be followed by natural gas, soon thereafter leaving coal as the predominant fossil fuel.

Getting through the decades after oil, natural gas, coal, and uranium production goes into depletion will be one of the more difficult transitions the world has to make in this century. Conservation will be the first priority followed by maximizing the efficient use of non-renewable energy sources we have left. Cogeneration is too good an idea. Its time will come.