Key Concepts in Energy

225 Pages·2014·2.598 MB·English

by  Nuno Luis Madureira (auth.)

Nuno Luis Madureira
Key
Concepts in
Energy
Key Concepts in Energy
Nuno Luis Madureira
Key Concepts in Energy
1 3
Nuno Luis Madureira
Instituto Universitario de Lisboa
Lisboa
Portugal
ISBN 978-3-319-04977-9 ISBN 978-3-319-04978-6 (eBook)
DOI 10.1007/978-3-319-04978-6
Springer Cham Heidelberg New York Dordrecht London
Library of Congress Control Number: 2014932284
© Springer International Publishing Switzerland 2014
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part
of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or
information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar
methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts
in connection with reviews or scholarly analysis or material supplied specifically for the purpose of
being entered and executed on a computer system, for exclusive use by the purchaser of the work.
Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright
Law of the Publisher’s location, in its current version, and permission for use must always be obtained
from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance
Center. Violations are liable to prosecution under the respective Copyright Law.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
While the advice and information in this book are believed to be true and accurate at the date of
publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for
any errors or omissions that may be made. The publisher makes no warranty, express or implied, with
respect to the material contained herein.
Printed on acid-free paper
Springer is part of Springer Science+Business Media (www.springer.com)
Contents
1 Introduction ................................................ 1
1.1 Introduction ............................................ 1
1.1.1 The Time of Energy ................................ 1
1.1.2 Winners and Losers ................................ 3
1.1.3 Key Concepts ..................................... 6
2 Primary Energy/Useful Energy ................................ 9
2.1 Energy Measurement ..................................... 9
2.1.1 Input-Cycle Categories .............................. 9
2.1.2 The Measuring Rod of Money ........................ 12
2.2 Horsepower and “Calories” ................................ 13
2.2.1 The Power of Royalties ............................. 13
2.2.2 Blood Horses and Mechanical Horses .................. 16
2.2.3 The Changeover to Heat ............................. 18
2.3 Omnipresent Energy ...................................... 19
2.3.1 Energy Conservation ............................... 19
2.3.2 Man as a Living Machine ............................ 23
2.3.3 Overturning the Energy Value of Food .................. 27
2.4 Energy Aggregation ...................................... 29
References .................................................. 31
3 The Rebound Effect ......................................... 33
3.1 The Riddle of Saving and Spending .......................... 33
3.2 Antecedents of the Coal Question ........................... 35
3.2.1 Tapping the Unobservable ........................... 35
3.2.2 The Geological Evidence ............................ 37
3.3 The Economic Theory of Resource Depletion .................. 40
3.3.1 Startling Economic Factors .......................... 40
3.3.2 Coal and the Rebound Effect ......................... 41
3.3.3 Inevitable Scarcity ................................. 44
3.4 The Triumph of Geology .................................. 47
3.5 What to Expect from Energy Efficiency ...................... 50
References .................................................. 51
v
vi Contents
4 Technological Hybridization .................................. 53
4.1 Hybridization and Operational Asymmetry .................... 53
4.2 Fuel Oil: A New Energy Source ............................. 55
4.2.1 Coal and Oil ...................................... 55
4.2.2 US Oil Industry Markets ............................ 55
4.2.3 Innovation in Russia ................................ 57
4.2.4 Fuel Oil’s Market Share ............................. 59
4.3 The Hybridization of Steam Engines ......................... 61
4.3.1 Oil-Firing Burners ................................. 61
4.3.2 Margins of Decision ................................ 63
4.4 Hybridization and the World Economy ....................... 67
4.4.1 The Role of Oil-Producing Countries .................. 67
4.4.2 The 1920s Boom .................................. 69
4.5 Final Remarks .......................................... 70
References .................................................. 71
5 Last Gasp .................................................. 75
5.1 The Resilience of Old Technologies. . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.1.1 The Sailing Ships Effect ............................. 75
5.1.2 Creation and Destruction ............................ 77
5.2 Charcoal and Coke: An Overview ........................... 78
5.2.1 Objective and Subjective Assessments .................. 78
5.2.2 Fuel Efficiency in Ironworks ......................... 80
5.2.3 British Leadership in Coke Fueling .................... 81
5.3 The Fight Back from Traditional Industries .................... 84
5.3.1 The First Fight Back ................................ 84
5.3.2 The Second Fight Back ............................. 88
5.4 Ironworks and Forests .................................... 92
5.5 The Last Gasp in Prospect ................................. 94
References .................................................. 96
6 Oil Reserves and Peak Oil .................................... 101
6.1 Classifying Oil Reserves .................................. 101
6.2 Oil Conservation in the 1910s–1920s ........................ 105
6.2.1 The First Oil Survey ................................ 105
6.2.2 Forest Conservation and Oil Conservation ............... 107
6.2.3 The Ecological Commonalities of Oilfields .............. 109
6.2.4 Gas Pressure and Oil Recovery ....................... 110
6.3 The Technologies of Discovery ............................. 112
6.3.1 Finding Oil ....................................... 112
6.3.2 Surface Indicators and Seismic Methods ................ 114
6.3.3 The Oil Glut ...................................... 118
6.4 Peak Oil ............................................... 119
6.4.1 Hubbert’s Peak .................................... 119
6.4.2 Peak Oil Critics ................................... 124
6.5 Epilogue ............................................... 127
References .................................................. 127
Contents vii
7 Marginal Cost Pricing ........................................ 131
7.1 Rate Systems and Pricing .................................. 131
7.2 Classification of Consumption or Classification of Consumers ..... 132
7.2.1 The Competitive, Promotional, and Cost-Based Approach ... 132
7.2.2 The Demand-Charge System ......................... 134
7.2.3 Downgrading of Peak-Load Concerns .................. 136
7.3 Promotion Through Declining Price-Blocks ................... 138
7.3.1 Network Expansion and Promotional Rates .............. 138
7.3.2 The Invention of the Standard Consumer ................ 142
7.3.3 Critical Stands .................................... 145
7.3.4 Historical Overview ................................ 146
7.4 Marginal Cost Pricing as Time-of-Day Pricing ................. 148
References .................................................. 150
8 Energy Intensity ............................................ 153
8.1 The Decomposition of Energy Intensity ...................... 153
8.2 The Drive Toward Heavy Industrialization .................... 156
8.2.1 Energy Intensity: An Understated Concept .............. 156
8.2.2 Soviets, Electrification, and Industrialization ............. 157
8.2.3 Southern European White Coal ....................... 165
8.2.4 Energy Intensity in Brazil ............................ 169
8.3 The Environmental Kuznets Curve .......................... 174
8.4 Toward a Heavy Post-Industrial Society? ..................... 177
References .................................................. 177
9 Levelized Electricity Costs .................................... 181
9.1 Engineering the Economy ................................. 181
9.2 Nuclear Power Costs: Struggling with a Bad Reputation ......... 183
9.2.1 The Policy of Secrecy ............................... 183
9.2.2 Atomic Piles and Dual-Purpose Reactors ............... 184
9.2.3 The Indivisible Costs of Dual-Purpose Reactors .......... 188
9.2.4 Prototypes and Series ............................... 189
9.3 The Dawn of Super-Technologies ........................... 193
9.3.1 The Upscaling Cycle ............................... 193
9.3.2 The 0.3 Power Law ................................. 196
9.3.3 The 1970s Alterations ............................... 198
9.4 The Costs of the First Oil Shock ............................ 203
9.4.1 Oil Power ........................................ 203
9.4.2 The Aftershock .................................... 205
9.5 Levelized Costs in a Low-Carbon Economy ................... 210
Bibliography ................................................ 213
10 Overview................................................. 217
10.1 As Seen from Below ................................... 217
Chapter 1
Introduction
Abstract This book provides an encompassing, comprehensive, and cross-disciplinary
overview of energy issues clustered into eight concepts. The concepts are designed to
provide a bird’s eye perspective of the economy, technology, and history, without los-
ing sight of the contextual dynamic of business conjunctures, scienticfi trajectories, and
national policies. Overall, it strikes a balance between the normative content of ideas
and their troublesome, unpredictable, and contingent application by scientists, engi-
neers, and businessman.
1.1 Introduction
1.1.1 The Time of Energy
This book provides an encompassing, comprehensive, and cross-disciplinary overview
of energy issues clustered into eight concepts. The concepts are designed to provide a
bird’s eye perspective of the economy, technology, and history, without losing sight of
the contextual dynamic of business conjunctures, scienticfi trajectories, and national
policies. Overall, it strikes a balance between the normative content of ideas and their
troublesome, unpredictable, and contingent application by scientists, engineers, and
businessman. As time matters and as the time of energy proves a rather intricate web
of expectations, decisions, and habits, we pay particular attention to processes and to
outcomes.
Energy usage entails at least three different measures of time. At one extreme is
the time of consumers, who expect to be served instantaneously simply by activat-
ing a switch or by lifting the pump in the gas-filling station. The gesture is taken
for granted, because consumers have repeated it so many times and always with
the same result that only when extraordinary events disturb the routine, such as
blackouts caused by short circuits and overloaded electricity mains, queues, and
shortcomings provoked by strikes, rationing acts issued under rising international
N. L. Madureira, Key Concepts in Energy, DOI: 10.1007/978-3-319-04978-6_1, 1
© Springer International Publishing Switzerland 2014
2 1 Introduction
tensions or infrastructure damages wrought by natural disasters, only in such
disturbing circumstances do people actually realize that there is nothing guaran-
teed about energy supplies. From a technical standpoint, the disruption of con-
sumption happens because energy involves network chains and has high storage
costs. As a rule, the larger the dependence upon the network and the higher the
storage costs, the more instantaneous consumption becomes. The main example
is the operation of electrical systems where, at each instant in time, the amount of
electricity generated and put on the network must exactly equal the amount taken
off and consumed. Although the picture is changing quickly, up until now, there
has been no way of storing electricity economically and efficiently. For this rea-
son, the operators of electricity networks have learned to develop new scheduling
algorithms for hourly generation and the transmission of electricity, for example,
whenever some TV broadcast attains all-time peak ratings, and the population
joins together in front of the television at exactly the same time on a cold winter
night. To match this singular peak, some extra power generation must be instanta-
neously called upon. The phenomenon become noticed in the 1960s, when black
and white TV sets spread throughout entire societies generating mass audiences
for popular TV programs such as “Coronation street,” “Z Cars,” “Gunsmoke,”
“Bonanza,” “The Andy Griffith Show,” “Carosello,” “Cómicos y Canciones,” and
not to mention the “Miss World” contest. As a rule, the peak in electricity demand
tended to occur immediately after these programs ended, boosted by the simulta-
neous switching on of additional lights and electrical appliances such as kettles.
The second measure of energy duration is conveyed by the lead times for
energy transformation, generation, and distribution. Any change in the existing
infrastructure has to be anticipated some years previously, through forecasting
techniques, so as to meet future demand. The gap between the decision to invest
and the completion of the new productive unit may take 3 years in the case of an
oil refinery, natural gas power station, or natural gas pipeline, 4–5 years for a coal
power station, 5–8 years for an hydroelectric plant, and 6–9 years for a nuclear
power station. In this context, it is likely that those who sign the first contracts are
not the same parties as those later hosting the ribbon-cutting ceremony. Likewise,
owing to the gap, energy infrastructure lead times are beset with the symmetrical
problems of idle capital when the course of events creates underutilized generat-
ing capacity (the unanticipated slowdown in energy consumption after the first oil
shock) and disturbing market bottlenecks when the course of events yields capac-
ity shortages (gasoline scarcity and refinery outages after hurricane devastation).
Aside from these non-trivial circumstances, the time pattern of energy production
hinges on the dynamics of business cycle, the interest rates prevailing, the stability
of the regulatory and ownership frameworks, and on the opportunities for techno-
logical innovation. Shaped by medium-term planning, this duration has moreover
increasingly incorporated active community participation through public debate on
the environmental and amenity impacts.
Finally, the exploitation of natural resources is embedded in the economic long
term. From the outset, the prospection and discovery of underground deposits has
been a specialized activity in which amateur and professional geologists replaced
1.1 Introduction 3
wildcatters, speculators, small land leasers, and men of fortune. With the advances
in drilling technology, professionalization proceeded further, opening the way for
the takeover of natural resources by large corporations that transformed the activ-
ity into a multinational business by the close of the nineteenth century. The trend
toward concentration, prompted by mergers and fusions, reinforced the geostrate-
gic standpoint of decision-makers, ingraining the exploitation of coal, oil, natural
gas, and uranium deeper into the long haul. Recently, globalization brought busi-
ness concentration to new heights, boosting international oligopolies in the areas
of equipment supply, and engineering and consulting services, and further rein-
forcing the competitive reach of the biggest oil, gas, and electricity companies.
Besides the discovery of untapped deposits, the activity of exploitation promoted
the improvement of in situ geological knowledge, reducing the uncertainty about
the ultimate recoverable resource. This process in which knowledge appears as a
by-product of economic activity holds regardless of the differences in duration and
in the productivity of underground reserves. Naturally, deposit size, seam thick-
ness, and permeability and porosity of rocks are key factors for the economic fea-
sibility of recovery. The wide variation in lifecycle extraction can be illustrated by
the difference between the largest conventional oil field in the world, Al-Ghawa¯r,
in Saudi Arabia, with its 65 years of uninterrupted activity (and counting), and the
shorter duration of some labor-intensive coal mines in historical European pits,
which were exhausted in <10 years. Whatever the case, forecasts of future produc-
tion tend to be much more precise in this upstream activity than in other branches
of the industry. Equally significant is the fact that natural resource exploitation
has proven quite sensitive to the political economy of international relations and
affected by wars, guerrilla warfare, revolutions, coups, and governmental churn.
All of the above time measures—current consumption, future production, and
long-term extraction—are entwined in the daily supply of energy goods and ser-
vices. In the starkest terms, they correspond to the accounting of useful, final/
secondary, and primary energy, which means that the more we move back in the
process of energy transformation and conversion, receding from final consumption
to downstream and to upstream activities (miles travelled to gas and to crude oil),
the larger will be the inertia within the techno-economic system and the greater
the reliance on long-term commitments. It is the cross-temporality of expectations,
decisions, and habits that deeply roots energy concepts in history.
1.1.2 Winners and Losers
It was mostly during the nineteenth century that mankind systematically began to
tap into the legacy of carbon and carbon and hydrogen compounds accumulated
beneath the earth over the course of 360 million years. Courtesy of the practice
of drawing assets from this stored energy bank, developed nations were each year
able to add fresh inputs to their renewable resources of muscular force, biomass,
wind, and water power. What is more, large-scale usage of fossil fuels did not