Email

The One Element That Will Change the Energy Landscape

by | published October 15th, 2015

We’re now on the brink of a new development in renewable energy that will push this sector to the next level.

Renewable energy sources such as solar and wind have become fixtures of the current power grid. But for the next big advances to occur, the developmental process itself will take center stage.

I have already noted here in Oil & Energy Investor that both wind and solar have reached grid parity in many parts of the U.S. That means it is not more expensive to use them in the generation of electricity than it costs to employ natural gas or even coal.

Yet, as a number of commentators have pointed out, the next step for renewables will involve a transformation in how the energy sources themselves are applied and used. This pivotal development involves the ability to lower the cost of energy generation even further.

And at the heart of this evolution lies a surprising, yet basic, element.

Here’s my take on the one thing set to transform the renewable energy landscape forever…

Renewable Energy Costs Continue to Decline

The Energy Information Administration (EIA) has reported that the U.S. is on track to add some 20 gigawatts (GW) of large (“utility scale”) power generation in 2015. The transition in fuel sourcing for this new capacity is dramatic – just about half (49.5%) will come from wind power, 31.5% from natural gas, and 11% from solar. The remaining 8% is covered by nuclear, biomass, geothermal, and other non-hydrocarbon sources.

Within the next four months more than 1 million U.S. homes will be powered by solar energy. Some industry estimates put the households actively considering solar at 6 million and rising. Meanwhile, wind power had emerged as the largest single component in new utility-scale generation nationwide. The grid transformation taking place in states like Texas is staggering.

The annual rise in electricity rates on average has paralleled the broad rise in electricity usage. Most recently, the EIA has reported June, July, and August electricity usage by an average residential consumer as increasing 4% over the same three-month period last year.

In both wind and solar, however, the cost of utility-scale generation continues to decline. This is going to have a positive impact on power bills. Both are registering advances in infrastructure cost savings. With wind, this is found in the approximately 40% decline in turbine expenses since 2008. Most of those savings have been kicking in over the past two years.

Iron Is the Key to New Solar Technology

Solar is nearing a next-generation transformation in how cells are manufactured. And that holds the prospect for one of the most dynamic changes in both cost and production.

The key here is what materials are required to serve as the basis for the cells that generate the electricity. This remains a cost consideration because ruthenium, a rather expensive metal, has been required to first capture the sunlight and then convert it into electricity.

Previous attempts to replace the metal with something cheaper have not succeeded. The problem involves what the conveying material turns sunlight into. Electrons are necessary to produce electricity. Unfortunately, previous attempts have managed only to produce a lot of heat.

However, there is now an approach showing great promise. It involves using nanoscience, specifically nanostructured titanium dioxide and a dye that can be applied to solar energy, enabling the capture and conversion of energy without losing it through heat.

The key to all of this, however, may be the ability to use a simple and cheap substance as the basis of the process.

And that substance is iron.

On the Verge of Remarkable Developments in Solar

A breakthrough using iron is moving forward, with some very positive results published a few months ago (here). Using any metal that costs less than ruthenium would put solar in the lead as the least expensive power sources, even with the continuing inversion problem involving the loss of considerable electricity between the generation phase (as direct current) and the transfer to the power grid (where it needs to be alternating current).

These new material applications should finally allow scientists to use iron and other plentiful and inexpensive metals in lowering the cost of manufacturing solar cells. This will undoubtedly cut the cost of production, which is a huge step toward making solar energy more marketable.

We’re on the verge of some truly remarkable developments that will usher in an age when we can use solar energy for a genuine crossover of energy types. I have been watching some of these advances for some time.

In the very near future, we are likely to be dealing with a very different energy landscape.

And that always opens up some great investment opportunities. I’ll keep you posted.

Please Note: Kent cannot respond to your comments and questions directly. But he can address them in future alerts... so keep an eye on your inbox. If you have a question about your subscription, please email us directly at customerservice@oilandenergyinvestor.com

  1. Malcolm Rawlingson
    October 15th, 2015 at 18:54 | #1

    Kent, Both renewables and solar power in particular, are over hyped in their ability to provide meaningful amounts of electricity. It is the amount of electricity that the facility actually produces divided by the amount it COULD produce if it operated 100% of the time at full power that really means something. It is called Capacity Factor. As you will no doubt have noticed the power output of all solar panels at night is zero….there is no sunlight. That means for roughly 50% of the time solar panels produce no power at all….zero. Even if the cost is the same, purchasing a power plant with a guaranteed maximum of only 50% capacity factor means the REAL cost is double. For the same investment a gas, coal or nuclear plant can deliver nearly 100% capacity factors since they are not dependent upon the Sun which, unfortunately has a regular and predictable habit of being on the other side of the earth half the time. So all else being equal in order to produce the SAME capacity factor as a nuclear plant you would need one solar array to make the electricity during the day and a SECOND solar array feeding a battery to provide the same power overnight. So you will require TWO solar arrays PLUS a battery. Lets leave aside for the moment that hundreds of acres of land are required to produce the same output as a 1000MW nuclear plant. Many commentators have mixed Gigawatts of installed capacity with Gigawatt-hours of electricity generation. I can have a Terrawatt of installed solar capacity but at night the output is still zero. Of course if the Good ‘Ole US government is footing the bill through tax rebates and subsidies then go for it…but it does not change the physics and it does not change the engineering. They are still a very poor use of energy dollars….and the Chinese who manufacture most solar panels are (once again) laughing all the way to the Bank of China while embarking on the largest nuclear expansion in history (27 plants under construction as we speak and 70 planned).
    Actions speak louder than words. The Chinese know where their energy will come from and it ain’t solar.
    Malcolm

  2. Stephen Robertson
    October 16th, 2015 at 13:08 | #2

    1-/16/15 Kent,
    I realize it’s too early to invest in the next generation of nuclear power, but I hope you are aware that, within a decade, molten salt reactors will be commercially available. These reactors will be much, much less expensive to construct, are scalable (the smallest size could be carried in a pickup truck), consumes nuclear waste as fuel as well as thorium (vastly more prevalent than uranium and therefore much cheaper), can’t meltdown nor can its fuel be used to make a nuclear weapon. This is far and away the most likely long-term solution to the world’s energy problem, and as the public becomes aware of the potential of MSRs in the next few years you may well see a fall-off in acquisitions off solar and wind. I suggest it would be wise to keep track of this power source, and I’m sure your readers would be interested in its development..

  3. October 17th, 2015 at 02:34 | #3

    HEADLINE: MANY VERY SAD FACES WERE OBSEVED AT TODAY’S FUNERAL FOR KILLER OIL!!
    QUESTION: HAVE PUTIN AND XI JINPING BEEN ADVISED?
    CONFUSED: ME!! DO I SELL XOM AND OXY TONIGHT???
    PLEASE HELP. AM 78, OLD, MORE DIMWITTED THAN EVER AND UNUSUALLY EAGER TO JUSTIFY THEIR SALE AND SUSEQUENT TRANSFER OF ALL PROCEEDS TO THE OBAMA ADMINISTRATION TO CONTINUE THEIR GOOD WORKS!!!

  4. Mark Sander
    October 17th, 2015 at 08:01 | #4

    If houses had an extra DC circuit built in you could avoid both the inefficient
    inversion process to AC and then the inefficient conversion back to DC. Also
    manufacturers could make more appiances that run on DC or that have a input DC jack
    Some day all electronics will be DC only since
    the convergence from AC to DC is weighty and inefficient. All solar homes should have DC circuits to run DC appliances.

  5. Leo Lamb
    October 17th, 2015 at 09:19 | #5

    I read recently of natural gas being converted to gasoline. Your comment?

  6. October 18th, 2015 at 15:57 | #6

    Vast advantage of solar is that it can incur low transmission costs, by close by or direct installation, on buildings served by it. Transmission efficiencies are such, that transmission from far-away generating plants, will eat up, up to half of the energy. (That’s a rough figure.) And it incurs more competition, with the prospect of lowering prices, as is happening with wind power, too. Nuclear reactors also put out a lot of heat into the environment. And the current nuclear disaster, may be severely crippling life, in the entire Pacific, at this moment, as well as affecting populations in states like Hawaii and California Nuclear demands incredibly complex safety monitoring. In fact, Canada built a reactor for medical isotopes, not that long ago, and decided to shelve it, due to this difficulty. All reasons to go for solar.

  7. Naveen Menon
    October 19th, 2015 at 22:07 | #7

    Kent ji,
    Glad to know about developments in Renewable energy.
    Please tell this Obama Admin to sign on the dotted line (not to veto)of ‘Crude oil Export ban lift’ bill passed by the House of representatives last week by 261 votes. Apparently they need 290 votes to avoid presidential Veto. Don’t you think it makes sense to pass the bill?
    Upstream oil companies want this ban lifted as it will create jobs and lift oil prices in USA. However, those anti-fracking environmentalist want total ban on fracking as it has polluted water in places like Bakken(north dakota) and in states of pennsylvannia.

  8. Naveen Chennai india
    October 19th, 2015 at 22:37 | #8

    Kent, Additionaly, renewable will get a boost if Climate change is man made. While I dont believe in man made climate change theory, but the fact is here we are experiencing hot weather like never before. The lakes have all dried up everyone in my Tamilnadu state buys water or they have to drill for water (bore well.)
    Experts have already identifed New Delhi (Capital of india) top 10 water starved city in the world.
    I noted that in USA North east/mid west will continue to experience severe cold winter whilst West (California/Oregon etc..) will as usual fell the heat. This is Polar vortex caused of polar jet streams changing pattern affecting the weather.
    Therefore we need to minimize use of fossil fuel.
    Soon in the future we will be trading water as a commodity in the CMe/NYMEX exchange.

  9. Jeff
    December 29th, 2015 at 11:18 | #9

    @Henri Steenaart
    Solar is great when the sun is shining, but what do you do at night or on cloudy days, send everyone at work home? No, you must use a reliable alternate source, which means all solar (and wind) power must have 100% backup capacity. So we still have to build other power sources and have them fired up and ready to go online. Great as a supplement on a limited scale, but not really an economically feasible long term solution.

  10. Will S.
    January 4th, 2016 at 17:05 | #10

    @Malcolm Rawlingson

    The answer therefore is to build out the electricity grid, so that no matter the sun’s elevation/position, there is sufficient capacity to meet the earth’s energy needs… All this means is that the output/cost needs to be at most half the cost of alternative carbon-based energy systems.

    OR… We explore Thorium MSR and Thorium/Beryllium fuel rods as replacements for existing U238 rods, in existing nuclear facilities.

    The latter is already available, just the political will to force changes. BUT, unlikely as long as we need enriched Plutonium for ICBMs due to our insecurities and threats from overseas dictators…

    Still I live in hope.

    W.

  11. July 15th, 2016 at 10:05 | #11

    @Leo Lamb
    Converting natural gas to liquid fuel is already an established technology, but requires favorable market pricing for both commodities to be commercially viable. Sasol has already designed a $US 10b plant to do just that, and was on the verge of building it, but cancelled its construction when oil prices collapsed in 2015.

  1. No trackbacks yet.