The miracle of 80% by 2035


And then a miracle occurs.President Obama made a pretty bold (and frankly unexpected) statement in the State of the Union address last week:

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.

Many journalists and bloggers have already expressed their interpretation of this statement. For my part, I’m not going to comment on what I think future policy decisions will be, or take a normative position on what our energy mix should look like in the future.

I will, however, try to paint a picture of how we’d get to “80% by 2035” and point out that, while it’s an admirable goal, achieving it wouldn’t be a panacea.

“80% by 2035” by the numbers

In 2009, the total U.S. net power generation of 3,950 billion kWh came from the following sources:

Figure ES 1. 	U.S. Electric Power Industry Net Generation, 2009

Sources: U.S. Energy Information Administration, Form EIA-923, "Power Plant Operations Report.”

Obama notably excludes from his laundry list of acceptable sources of electricity both conventional coal and petroleum — in aggregate 46% of the above. To give some historical context, here’s how the U.S. electricity mix has evolved since 1996:

Sources: U.S. Energy Information Administration, Form EIA-906, "Power Plant Report;" U.S. Energy Information Administration, Form EIA-920 "Combined Heat and Power Plant Report;" and predecessor forms.

The compound annual growth rates of these sources are the following:

  • Coal + petroleum: 0.1%
  • Natural gas: 5.8%
  • Nuclear: 1.3%
  • Hydro: -2.2%
  • Other renewables (mostly wind/biomass): 5.7%
  • Other: 1.7%
  • Total: 1.3%

What’s clear is that most of the growth in electricity generation has been driven by natural gas and non-hydro renewables. Coal and nuclear are either keeping pace, or losing footing. Not surprisingly, most of the capacity added to the U.S. power system over the last 15 years runs on natural gas:

Source: Energy Information Association, 2004-2005.

Putting this together with reports on the abundance of shale gas, it’s reasonable to think that natural gas will continue to be the dominant driver of growth in the production of power, despite its already large market share today. If we were to extrapolate the current growth rates of each source through 2035, in fact, we’d arrive at the following mix:

Source: My analysis, extrapolated from EIA data.

While an admittedly crude extrapolation, this analysis points to the feasibility of Obama’s goal: 24.1% is pretty close to 20.0%. With some additional acceleration in renewables or a few new nuclear plants, we could see ourselves hitting 80% by 2035.

Is this the right metric?

While it’s encouraging to see a pathway to sunsetting the dirtier sources of electricity, we should, however, be cautious in our optimism. Why? Because the above analysis excludes 72% of petroleum’s usage. Most of it goes into planes, trains, and automobiles, not power plants.

In 2009, U.S. primary energy flow across all sources and uses looked like this:

U.S. Primary Energy Flow by Source and Sector, 2009 (Quadrillion BTU). Source:  U.S. Energy Information Administration, Annual Energy Review 2009, Tables 1.3, 2.1b-2.1f , 10.3, and 10.4.

While only 46% of power comes from coal and petroleum, fully 58% of all energy we use comes from these dirty sources. Even more daunting, while there are reasonable substitutes for coal as a power source, there are few good substitutes for petroleum as a transportation fuel.

How would you replace 35.3 quads of petroleum? That’s roughly equivalent to 466 billion gals of ethanol, which is really the only reasonable substitute at scale today. (I suppose we could all go down the T. Boone Pickens natural gas vehicle route, but I’ve already decried that in another post.) The top two producers of ethanol are the U.S. (11 billion gals/yr) and Brazil (6.6 billion gals/yr). Those numbers are after 30+ years of heavy government intervention and subsidization in both countries. Maybe production doubles or triples over the next 30 years; but, regardless, it won’t make a significant dent in our massive need for transportation fuel.

Furthermore, U.S. ethanol is based on corn, which has 1/7th the energy density of sugarcane and half the productivity per hectare. The Congressional Budget Office has calculated that, to bridge this gap, corn-based ethanol costs the American taxpayer $1.78/gal in subsidies in addition to what he pays at the pump. I doubt this level of subsidy would be tolerated if we chose to scale this industry to even greater heights.

So, in conclusion, while Obama’s 80% by 2035 is admirable and even reachable, it doesn’t address the bigger need: to find a substitute for petroleum in transportation that works at massive scale. Ostensibly, we can get off coal over the next 30 years, but oil is a whole other, probably more significant problem to address as a nation.

P.S. Thanks to Chris Nedler of GetRealist.com for his input on this post.

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9 Responses to The miracle of 80% by 2035

  1. Jon says:

    Transportation is often left out in many of these discussions, but it is a critical piece of the equation. Great post.

  2. Will Sanchez says:

    Alex — Great post and analysis. However, to be fair, President Obama did say “America’s electricity” — seemingly deliberately excluding transportation in this year’s State of the Union. Despite being overly optimistic, the endorsement for pushing a national-level program for the adoption of petroleum substitutes and electrification of vehicles (> 1M hybrids by 2015) was a big portion of his 2008 SOU. With reports and data from the major automakers it clear that the 2008 goal will not be met (many knew this back in 2008, in fact) — it might have been a political blunder to admit his goal was not reached and lobby further/increased bi-partisan support for more government funding for transportation.

    Indeed transportation is necessarily a part of the problem and cannot be left out if emissions reductions and national security top the agenda. Thanks for the post.

    • Alex Taussig says:

      Will,

      Thanks for commenting. I realize Obama specifically excluded transportation fuel, but that’s kind’ve the point. I admire his commitment to de-carbonize our power system, but the real battle will be fought on the road and in the air with transportation. I’m a huge supporter of EVs, but even the best estimates put penetration in the single digits decades out. Vehicle electrification will be most prolific in the mild hybrid case, which still requires liquid fuels.

      Perhaps the only real solution here is efficiency, and for that matter high speed rail, but even this will take a long time to put a dent in those 35 quads/yr.

  3. Will Sanchez says:

    I absolutely agree — admirable commitment and attempt to headway to such a massive issue facing our society. However, one thing at a time. This could back-fire (will say it anyway), but the lower hanging fruit is in utility-scale clean energy sources (wind, solar, nuclear, clean coal, natural gas). Even vehicle efficiency really started getting traction over the last decade in the form of lightweight materials and body constructions, waste heat and other energy recovery, advanced engines, biochemical fuels, etc. To corner transportation as the sole culprit of our dirty energy footprint under 20% is a huge vision and compartmentalization effort. Once this is achieved, then massive deployments of transportation energy efficiency and clean source projects can take center-stage.

    With the size of our economy, just like you and many others, I would expect the bar to be set higher. I expect the President to cast a vision whereby transportation is also included, but I also want to be realistic in setting my expectations as to what can be accomplished in an American presidential term.

    I wholeheartedly agree that there are huge opportunities in transportation energy efficiency. If home & building efficiency stories have taught us anything it is that our current models of energy consumption & use were flawed; awareness and behavior changes alone (low capital intensity) could yield great savings. So why not in transportation? Of course this will not get close to appreciably reducing 35 quads/yr, but it should help. Coupled with EV adoption, some strides in biofuels, etc. and we start to amass benefits and, perhaps, making a dent.

  4. Frank Kushner says:

    I agree – will need oil for decades – here is a new process that just got funding.
    http://green.blogs.nytimes.com/2011/02/03/government-backs-1-billion-plan-to-make-gas-from-wood-chips/

    Stupid tree-hugging socialist-loving ultra-liberals will build ugly windmills (with guts from dead birds and bats on the ground) – but not allow oil drilling where tourists never travel. IDIOTS all of them. Where is Don Quixote to slay the windmills when you need him?

    • Alex Taussig says:

      Frank,

      I hesitated to approve this comment because it really doesn’t add much to the discussion, besides animosity. I especially take offense to your insinuation that energy is a partisan issue – that only liberals can love wind, and every conservative loves oil.

      These are problems that are much too important for petty bickering and name-calling between political parties. And, bring some numbers, some experience, and some justification to the table before you call someone an idiot.

      Now, on the issue you bring up, bird and bat kill were a big problem in the 90’s, but less so today. Newer turbines are designed to discourage roosting and make the blades visible to flyers-by. It’s often quoted that more birds are killed by housecats every year than wind turbines.

      Secondly, whether or not you want wind turbines has absolutely nothing to do with oil. There is very little crossover between the power and transportation fuel sectors. The question of whether we should “drill baby drill” all over the U.S. is one that should be considered on a case-by-case basis, since the externalities are localized to first approximation. However, there’s significant evidence (e.g. Deepwater Horizon) that secondary externalities extend beyond the region you’re drilling in, so we need to have a consistent federal policy and oversight that guides the E&P companies with a high degree of certainty. We also need that policy to come from a Congress and regulatory agencies that’s not in the pocket of the very industry it should be policing.

      So, in short, yes oil will be with us for a long time, but I don’t think that should make us happy. It’s a problem, not an inevitability. Let’s start fixing it with technology and policy.

  5. the rookie cynic says:

    I don’t think we’ll make up the difference as oil depletes. Natural gas will keep us going for awhile. People forget that the only reason we can produce ethanol is due to the enormous amounts of oil (in the form of fertilizer, pesticides, planting, harvesting, and transporting) used to make it in the 1st place. Our whole infrastructure was built with oil and there will be an “infrastructural inertia” from this that will make the transition to other forms of energy a bumpy one indeed. We’re just going to have less energy available to us. I don’t see anything on the horizon to replace oil. Human ingenuity is one thing, but you can’t alter the laws of thermodynamics after all.

    Thanks for the thoughtful analysis and killer graphs Alex.

    Cheers

    • Alex Taussig says:

      Very thoughtful response. Wish you used your real name.

      When I was first learning about cleantech in graduate school, I asked a chemical engineering PhD, “So, what’s the big deal with corn-based ethanol? Why is it so derided?” And he responded, “Oh nothing’s wrong with it. It’s a great way to turn natural gas into ethanol!”

      The energy balance doesn’t work, and, as you pointed out, we’ll need to use plenty of dirty stuff to make the clean stuff in lots of cases, just because of the heat requirement. Carnot strikes again…

      -Alex

  6. robdashu says:

    By 2035, the 13.8% from nuclear may go to zero, if significant radiactive releasing events take place in the next twenty years.

    Hydro energy may dwindle, as weather patterns change due to global warming, with the rain falling outside of the current drainage areas that feed hydroelectric dams.

    So there is even more instability thatn oil supply, and possibly more pressure from the need to replace other sources.

    Oh, and the natural gas glut may not last that long..

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