About Tim Morgan’s Surplus Energy Economics

Welcome to Surplus Energy Economics at WordPress, the blog site for Dr Tim Morgan, former head of research at Tullett Prebon.

Although this blog will cover a wide range of topics, my main interest is in a radically new way of thinking about economics. This is explained in my 2013 book Life After Growth.

Disclaimer

This website is intended for those interested in economics and related subjects. It does not provide investment advice, and must not be used for this purpose. Information given here is believed to be reliable but cannot thus be guaranteed. No liability can be accepted for any material contained on this website. Material published here is copyright, but can be quoted in brief, provided that attribution is given.

28 thoughts on “About Tim Morgan’s Surplus Energy Economics

  1. Tim, you need to familiarize yourself with Gail Tsverberg’s views ( ourfiniteworld.com) that the financial cost, not the energy cost , is a more practical way of looking at the dynamics of future oil
    supply.

    • Tverberg is by far the best analyst of the broader energy situation that I am aware of.

      Tim’s Perfect Storm is without a doubt the single best piece of analysis that I have seen.

  2. I really like your blog on surplus energy economics. I believe that oil , like horse-drawn and coal fired steam power is going to become obsolete and be replaced by electricity from solar and wind. Thus a new currency will be required that is compatible with electrical energy , I believe bitcoin may become the new global energy currency. I have built a prototype system I call VCFSEE which creates virtual currency from surplus electrical energy. Please check out my white paper VCFSEE. Thank you. Tim Wayre.

  3. Replacement of oil by alternative sources

    While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.

    Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:

    4 Three Gorges Dams,[14] developed each year for 50 years, or
    52 nuclear power plants,[15] developed each year for 50 years, or
    104 coal-fired power plants,[16] developed each year for 50 years, or
    32,850 wind turbines,[17][18] developed each year for 50 years, or
    91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years

    The world consumes approximately 3 CMO annually from all sources. The table [10] shows the small contribution from alternative energies in 2006.

    http://en.wikipedia.org/wiki/Cubic_mile_of_oil

    Renewable energy ‘simply won’t work’: Top Google engineers

    Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.

    Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.

    Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.

    All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.

    In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
    http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
    http://techcrunch.com/2011/11/23/google-gives-up-on-green-tech-investment-initiative-rec/

    http://dailycaller.com/2015/12/25/top-11-problems-plaguing-solar-and-wind-power/

    Germany Runs Up Against the Limits of Renewables

    Even as Germany adds lots of wind and solar power to the electric grid, the country’s carbon emissions are rising. Will the rest of the world learn from its lesson? After years of declines, Germany’s carbon emissions rose slightly in 2015, largely because the country produces much more electricity than it needs. That’s happening because even if there are times when renewables can supply nearly all of the electricity on the grid, the variability of those sources forces Germany to keep other power plants running. And in Germany, which is phasing out its nuclear plants, those other plants primarily burn dirty coal. https://www.technologyreview.com/s/601514/germany-runs-up-against-the-limits-of-renewables/

    Germany’s Expensive Gamble on Renewable Energy : Germany’s electricity prices soar to more than double that of the USA because when the sun doesn’t shine and the wind does not blow they have to operate and pay for a completely separate back up system that is fueled by lignite coal http://www.wsj.com/articles/germanys-expensive-gamble-on-renewable-energy-1409106602

    Why Germany’s nuclear phaseout is leading to more coal burning

    Between 2011 and 2015 Germany will open 10.7 GW of new coal fired power stations. This is more new coal coal capacity than was constructed in the entire two decades after the fall of the Berlin Wall. The expected annual electricity production of these power stations will far exceed that of existing solar panels and will be approximately the same as that of Germany’s existing solar panels and wind turbines combined. Solar panels and wind turbines however have expected life spans of no more than 25 years. Coal power plants typically last 50 years or longer. At best you could call the recent developments in Germany’s electricity sector contradictory. https://carboncounter.wordpress.com/2015/06/06/why-germanys-nuclear-phaseout-is-leading-to-more-coal-burning/

    • A pretty sobering post. Have a look at this StratoSolar.com . I’ve always wondered where the energy to replace worn out windmills and solar panels would come from. Perhaps it’s time to move to Scotland and start planting carrots and potatoes. Take 4 windmills with you so you have power for a lifetime. It’s where I’m moving to for my retirement which will begin shortly.

    • Hi Donald. I believe that solar installations will soon be cheaper than glass and tiled roof and will last over 50 years and become far more efficient than they are today. They will be absolutely everywhere because they will be cheaper to install than traditional roofing materials. Also all electrical appliances will become much more efficient so we will require less electricity. These forces combined will mean we will have surplus energy available within the next couple of decades. We will require a new currency system that is compatible with new forms of Energy , bitcoin is perfect for this because each currency unit is a direct measurement of energy. The incompatible debt based Petro Dollar fiat system will slowly become obsolete as oil phases into obsolescence , just as horse drawn and coal fired steam did , note all major currency shifts throughout history have always occurred lagging behind new technology cycles.

    • Tim

      Thanks for your comments, and debate is always welcome!

      My model shows renewables already cost-competitive with fossil fuels, indeed ahead in some instances, and there seems little doubt that, whilst fossil fuels will go on getting costlier, technology will carry on reducing the cost of renewables.

      However, I think there’s one distinction I’d like to point out. Technology is not an infinite process, but operates within an envelope determined by the laws of thermodynamics. Renewables can produce energy at lower cost than new oil or gas fields found and developed today. But what they are not (in my view) going to do is to match the cost-effectiveness of the giant oil fields of the past, like Al Ghawar.

      Also, we need to use legacy assets to finance the expansion of renewables.

      There are so many issues to discuss on this!

  4. You should make sure to have spare parts for all of your windmills – also you will need to have a stockpile of appliances that you will run off your windmills – in case they break…

    You might want to have an army as well — because those without windmills will try to take your windmills.

    • Well I would only use one windmill at a time and keep the others in storage. You’re right about possible problems from others as it would be very difficult to remain completely hidden.

      I have been reading about CMO and we just seem to be heading towards an energy disaster which is being denied. If you have looked at the solar website I hope it at least gave you some room for hope.

  5. Replacement of oil by alternative sources

    While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.

    Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:

    4 Three Gorges Dams,[14] developed each year for 50 years, or
    52 nuclear power plants,[15] developed each year for 50 years, or
    104 coal-fired power plants,[16] developed each year for 50 years, or
    32,850 wind turbines,[17][18] developed each year for 50 years, or
    91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years

    The world consumes approximately 3 CMO annually from all sources. The table [10] shows the small contribution from alternative energies in 2006.

    http://en.wikipedia.org/wiki/Cubic_mile_of_oil

    Renewable energy ‘simply won’t work’: Top Google engineers

    Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.

    Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.
    Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.

    All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.

    In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
    http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
    http://techcrunch.com/2011/11/23/google-gives-up-on-green-tech-investment-initiative-rec/

    Germany’s Expensive Gamble on Renewable Energy :

    Germany’s electricity prices soar to more than double that of the USA because when the sun doesn’t shine and the wind does not blow they have to operate and pay for a completely separate back up system that is fueled by lignite coal http://www.wsj.com/articles/germanys-expensive-gamble-on-renewable-energy-1409106602

    Why Germany’s nuclear phaseout is leading to more coal burning

    Between 2011 and 2015 Germany will open 10.7 GW of new coal fired power stations. This is more new coal coal capacity than was constructed in the entire two decades after the fall of the Berlin Wall. The expected annual electricity production of these power stations will far exceed that of existing solar panels and will be approximately the same as that of Germany’s existing solar panels and wind turbines combined. Solar panels and wind turbines however have expected life spans of no more than 25 years. Coal power plants typically last 50 years or longer. At best you could call the recent developments in Germany’s electricity sector contradictory. https://carboncounter.wordpress.com/2015/06/06/why-germanys-nuclear-phaseout-is-leading-to-more-coal-burning/

    Germany Runs Up Against the Limits of Renewables

    Even as Germany adds lots of wind and solar power to the electric grid, the country’s carbon emissions are rising. Will the rest of the world learn from its lesson? After years of declines, Germany’s carbon emissions rose slightly in 2015, largely because the country produces much more electricity than it needs. That’s happening because even if there are times when renewables can supply nearly all of the electricity on the grid, the variability of those sources forces Germany to keep other power plants running. And in Germany, which is phasing out its nuclear plants, those other plants primarily burn dirty coal. https://www.technologyreview.com/s/601514/germany-runs-up-against-the-limits-of-renewables/

    • Nuclear power – according to the website the link about Google engineers took me to – seems to be the only answer. My Dad (who trained to be a scientist but ended up in the Patent office because it paid better) told me this when I was very young and worrying about the oil price shocks of the 1970’s. We may never get Fusion to work so they only alternative must be Fission. However building 2600 nuclear power plants probably isn’t feasible even if there was the will to do it.. Looks like we’re doomed. Have you any ideas before I go and sit in my cave?

  6. I think we need a new discussion on energy – unfortunately, I’ve been bogged down with financial/economic stuff as part of completing SEEDS, and finding ways of enabling us to combat flat-earth economics and neoliberal quackery.

    • Every 20 minutes this planet receives enough solar energy to power the entire human civilization for 1 year. If we can capture just 0.0038% of the solar energy which touches this planet we will no longer have a requirement for any other energy source. Oil has simply acted as a solar energy battery , a middle-man , until we reach a level of electronics technology where we will no longer require this middle- man , the end of internal combustion marks the beginning of the end for the requirement for fossil fuels. Internal combustion for cars will be completely obsolete by 2030. This will also mark the end of the Petro backed Dollar system and we will require a new type of electronic currency system that will directly represent units of electrical energy.

  7. StratoSolar PV provides a complete, lower cost replacement for fossil fuels

    hahahahahahaha … stopped reading at the first sentence.

  8. It’s not my analysis — it is the analysis of these two men – who had a mega million dollar budget to determine the feasibility of a nenewable powered world:

    Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.

    Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.

    Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.

    Who are you?

  9. Drinking the Kool Aid I see.

    Can you point me to a solar panel that was made without fossil fuel involvement?

    • Hi Fast Eddy. Perhaps you think you are some kind of invisible Eddy current which can flow around rational thought and discussion. I believe I have solved the surplus energy problem with VCfSEE using the Virtual Energy Currency system otherwise now known as bitcoin. If you have a rational argument against that then please present it. Thank you.

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