EclecticLip

Energy Shift was chosen as a book club selection for much the same reason as Why Your World Is About To Get A Whole Lot Smaller: the company is in the alternative energy field, and so would benefit from employees knowledgeable about the energy sector.

As a policymaker-oriented volume, the book wasn’t as detailed or analysis-driven as I’d hoped.  An example comes in Chapter 2, which repeats the common refrain that energy demand will continue to rise by 2% per year for the foreseeable future.  It would seem to me that the developed world is likely to continue experiencing several years of economic malaise, in light of the debt overhang and worsening demographics.  Reduced consumer demand could somewhat dampen economic growth in developing economies as well, with a commensurate effect on energy demand.

None the less, the book was highly valuable, if only to know the kind of advice being given to movers and shakers.

As usual, if you enjoy the book summary, please consider supporting the author by purchasing a copy. 

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Energy Shift - summary

The EPIA’s recent estimate that solar PV installations grew 129% from 2007 to 2008 is excellent news.

While growth is likely to be stunted in 2009 (due in part to the collapse of the Spanish economy, last year’s biggest market) this is the kind of trend that should warm greens’ hearts, and not the planet.  One factor which works to solar’s advantage is the recent collapse in polysilicon prices back to “normal” levels — which will improve silicon-photovoltaics’ cost-competitiveness, even as some companies’ profit margins will be squeezed.

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While wind energy is cost-competitive with fossil fuels, the rule of thumb is that it can’t be used for more than about 20% of the grid, due to its intermittent nature.  Basically, to accomodate large amounts of wind, you need to be able to turn other sources of power on or off instantaneously — to account for situations where the wind dies down or comes up suddenly.  That means hydro (which accounts for about 20% of worldwide power generation; quelle coincidence!).

While solar is also intermittent, a big advantage it carries over wind is that it only provides energy during peak usage hours (from morning to evening).  Which generally makes it easier to tie into the grid.  While wind energy production will continue to overshadow (heh) solar electricity for a few years — generation capacity is currently about 120 GW to 5 GW — solar’s ease of grid tie-in should help it surpass wind perhaps a decade from now.

For now, the next milestone for solar will be to outpace nuclear; in 2007 new nuclear generation capacity was about 2 GW.  Solar installations in 2008 were about 3 GW peak, which normalizes to about 1 GW (since solar doesn’t provide energy at night, and provides a lower-than-peak amount of power in the morning and evening).

Late last year, one of the executives asked me to help write a paper on the future of energy.

McKinsey & Company have now published it. 

Other authors in the series include:

• Nobel Laureate and US Energy Secretary Steven Chu (“Time to fix the wiring”)
• Intel co-founder Andy Grove (“An electric plan for energy resilience”)
• peak oil titan Colin Campbell (“The end of the oil age”)

Cooler still, as this unPhotoshopped screengrab shows, we’ve got the top spot in the Energy section!!  (For now.)

Even cooler still, McKinsey had originally intended to circulate the essay collection at the World Economic Forum at Davos.  (Ultimately they published a subset, and ours didn’t make the cut.)  So I came within an editor’s whim of being able to put “…his work has been circulated at the World Economic Forum at Davos…” on my resume!

A long-form version of the essay will be made publicly available soon; I’ll link to that in due course.

Meanwhile, I think I’ll take a few more days off blogging to bask in the quietly ecstatic glow. 

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(click to enlarge)

Toyota substantially expanded production over the past decade or so, when demand was artificially increased by easy credit. I can’t help think that contributed to this announcement: an unprecedented eleven-day shutdown at its Japanese factories.

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