Breaking the Climate Deadlock the future of clean power generation. Vinod Khosla Khosla Ventures Nov 2008

Transcription

1 Breaking the Climate Deadlock the future of clean power generation Vinod Khosla Khosla Ventures Nov

2 Where Does Electricity Come From?

3 China and India together account for 79 percent of the projected increase in world coal consumption from 2005 to 2030 EIA 3

4 At the end of 2005, China had an estimated 299 gigawatts of coal-fired capacity in operation. To meet the demand for electricity that is expected to accompany its rapid economic growth, an additional 735 gigawatts of coal-fired capacity (net of retirements) is projected to be brought on line in China by 2030 EIA 4

5 Key Issues Electricity : ~40% of man-made CO 2 Coal: largest culprit Action needed for 80% reduction by

6 What Can Solar Do? Solar: near zero-emissions power! 1% of world s desert: meet all power demand US: 100 x 100 mile area in Nevada India: less than 1% of land area Europe: Less than 3% of Morocco s land 6

7 Source: Gerhard Knies, CSP 2008 Barcelona Scalability: solar Wind waves SOLAR BIO OTEC Gas Oil World energy use HYDRO Uranium R. Perez et al. COAL 7

8 Source: Ecole des Mines de Paris / Armines 2006 Global Solar Irradiance Map 8

9 What Must Solar Achieve to Succeed? Cost less than fossil fuels ($ KWh in 2007 dollars) Dispatchable generation Storage key for intermittent sources Reliability and uptime equiv. to fossil fuels 9

10 carbon: irrational policies Germany: 57% world PV 10 Source: Creating a U.S. Market for Solar Energy, by Rhone Resch, President of the Solar Energy Industries Association.

11 carbon: irrational policies Germany: 57% world PV US: 7% world PV 11 Source: Creating a U.S. Market for Solar Energy, by Rhone Resch, President of the Solar Energy Industries Association.

12 carbon: irrational policies Solar PV installations in the Bay Area Moscone Center vs. San Jose; 20% improvement in isolation! Cost of Moscone center PV: $6,222 per KW At $0.12KWh, 2.2% return on investment (below inflation!) Warner-Lieberman bill giving credits away to today s inefficient technologies! Zero-Emission Buildings UK estimate (40% higher home building cost) 12

13 carbon: California solar roofs program California Million Solar Roofs Program $3.3 billion Goal: 3,000 MW by 2017 California generation capacity (2003) 61 GW Best case-scenario less than 5% of CA capacity! 13

14 carbon: California solar roofs program solutions should make a material impact! 14

15 Solar Power: PV Advantage: distributed power-generation Ideal where peak demand = max solar radiation Scaling: no storage, no base-load power SEIA: Grid parity by 2015 (US) 15

16 Solar Power: Solar Thermal Advantage: Base-load power thermal storage is key Low technical risk, low adoption risk California operations since the 1980 s Primary risk: Cost per KW of installed capacity 16

17 Solar Thermal Power: 1914

18 Illustrative Solar Thermal Plant 18

19 Plant Output Storage For Time-shifting To Storage Direct Solar 6 AM 9 AM 12 PM 3 PM 6 PM 9 PM Time of Day 19

20 Plant Output Storage For Time-shifting To Storage Direct Solar From Storage Direct Solar 6 AM 9 AM 12 PM 3 PM 6 PM 9 PM Time of Day 20

21 Plant Output Storage For Time-shifting To Storage Direct Solar Direct Solar Direct Solar From Storage From Storage 6 AM 9 AM 12 PM 3 PM 6 PM 9 PM Time of Day 21

22 solar thermal: day / night power 22 Source: John O Donnell

23 thermal storage is cheap Electricity Flywheel $4000/kWh Heat/Air/Hydro Molten Salt $45/kWh VRB batt $ /kWh increased cost of power Concrete $25-45KWh lower cost of power CAES, Pumped Hydro Source: NREL for heat storage (2007), Dr. Doerte Laing, DLR (2008), VRB battery costs from company and Appalachian Power, CAISO estimate for Flywheel costs (Beacon Power) 23

24 thermal energy storage Commercial Available Today Steam Accumulator molten salt storage based on nitrate salts In Testing Solid medium sensible heat storage - concrete storage Latent heat - PCM storage Combined storage system (concrete/pcm) for water/steam fluid Improved molten salt storage concepts Solid media storage for Solar Tower with Air Receiver 24 Source: Doerte Laing, German Aerospace center

25 Policy Needs: Short-Term Expansion of technology-neutral RPS More economic than feed-in tariffs Stabilization incentive standards Low-cost capital availability Cost of capital is key determinant of cost 25

26 Policy Needs: Med-Term Carbon pricing framework Investment in transmission infrastructure Focus on regional power transmissions (i.e - DESERTEC) 26

27 Source: Gerhard Knies, CSP 2008 Barcelona Scalability:Land is not (remotely) a constraint 27

28 Source: Gerhard Knies, CSP 2008 Barcelona Scalability:Land is not (remotely) a constraint world electricity demand (18,000 TWh/y) can be produced from 300 x 300 km² =0.23% of all deserts distributed over sites 28

29 Source: Gerhard Knies, CSP 2008 Barcelona Scalability:Land is not (remotely) a constraint 3000 km More than 90% of world pp could be served by clean power from deserts (DESERTEC.org)! world electricity demand (18,000 TWh/y) can be produced from 300 x 300 km² =0.23% of all deserts distributed over sites 29

30 area requirements to power the USA (150 km) 2 of Nevada covered with 15% efficient solar cells could provide the USA with electricity ½ as much land with 30% efficient turbines 30 Source: J.A. Turner, Science , p. 687.

31 the right encouraging innovation < : HVDC Hydro Geothermal Solar Wind Biomass 31 31

32 DESERTEC concept for EU-MENA 10,000 GW from solar! Source: Gerhard Knies, Taipei e-parl. + WFC /2 32

33 price of power 2011 and Carbon Tax O&M Charge (Fixed & Variable) Energy Charge Capital Charge 150 $/MWh Gas Peaker Nuclear IGCC CCGT Coal Ausra CLFR CF24% Ausra CF60% (w/storage) Source: Ausra. All prices are estimated as of April 2008, in 2008$; Carbon tax of $30 is assumed. Ausra CLFR 24% price is as of 2011, and 60% w/storage is in

34 price of power 2011 and Carbon Tax O&M Charge (Fixed & Variable) Energy Charge Capital Charge Solar Peaking Pricing 150 $/MWh Solar Baseload Pricing 0 Gas Peaker Nuclear IGCC CCGT Coal Ausra CLFR 24% Ausra 60% (w/storage) Source: Ausra. All prices are estimated as of April 2008, in 2008$; Carbon tax of $30 is assumed. Ausra CLFR 24% price is as of 2011, and 60% w/storage is in

35 price of power 2011 and Carbon Tax O&M Charge (Fixed & Variable) Energy Charge Capital Charge 150 $/MWh Gas Peaker Nuclear IGCC CCGT Coal Ausra CLFR CF24% Ausra CF60% (w/storage) Source: Ausra. All prices are estimated as of April 2008, in 2008$; Carbon tax of $30 is assumed. Ausra CLFR 24% price is as of 2011, and 60% w/storage is in

36 PuG power requirements Coal (PC) Coal IGCC+CCS Nuclear Natural Gas Wind Solar (PV) Solar (CSP) Engineered Geothermal Scalability High CO2 Storage Med** High Low* Low* High High Reliability High Low High High Low* Low* High High Price Stability Carbon Price Benefits Dispatchable Power Med Med Low-Med Low High High High High Low Low High Med High High High High Yes Yes Yes** Yes No No Yes Yes Adoption Ease High Low High** High Low Med High High Technology Risk Low High Med Low High Low High Low Med High *Wind and Solar PV are severely disadvantaged due to the lack of storage power is available when generated, not when needed, stopping them from serving as base-load power generators ** Nuclear energy is always on, generating electricity even when it is not needed (and when prices are negative, such as the middle of night). High decommissioning costs and a lack of effective waste-disposal are both significant factors in limiting its scalability 36

37 PuG power requirements CSP and EGS meet Utility Needs! *Wind and Solar PV are severely disadvantaged due to the lack of storage power is available when generated, not when needed, stopping them from serving as base-load power generators ** Nuclear energy is always on, generating electricity even when it is not needed (and when prices are negative, such as the middle of night). High decommissioning costs and a lack of effective waste-disposal are both significant factors in limiting its scalability 37

38 key criteria Trajectory: What is or What Can Be Cost Trajectory Scalability Trajectory Carbon Trajectory Adoption Risk Capital Formation Optionality Carbon Reduction Capacity 38

39 Cost Cost trajectory: Undesirable (hydrogen fuel cell?) Fossil + Carbon Cost Fossil Fuel Cost Subsidy/Support Needed Ideal (Cellulosic biofuels?) Time 39

40 Carbon Emissions Trajectory Carbon trajectory: Undesirable (natural gas?) Fossil Fuels Minimum Target Ideal (Cellulosic biofuels?) Time 40

41 Source: The Carbon Productivity Challenge, McKinsey Original from UC Berkely Energy Resource Group, Navigant Consulting cost: driving down the cost curve 41

42 cost: not all technology curves are the same Cost (Normalized) Wind Coal Solar PV

43 cost: not all technology curves are the same Cheapest now does not mean cheapest later! Trajectory Matters! 43

44 declining technology cost Generations of Solar Photovoltaics Crystalline Silicon Amorphous Silicon Thin-Film Thin-Film Multi-Junction 44

45 but tech cost decline isn t enough Total Cost Cost (Normalized) Construction Cost Inputs (Feedstock/Land) Technology Cost

46 but tech cost decline isn t enough Total cost decline is based on relative proportion of cost types Should we focus on low cost low efficiency cells or high efficiency? 46

47 adoption risk - $2,500 nano ICE or hydrogen? the Chindia test on relevance 47

48 capital formation Short Innovation Cycles (3-5 years) Not fusion ; Not nuclear ; Not CCS Mitigate technical AND/OR market risk quickly and cheaply (technical) - solar thermal (market) corn ethanol Investor returns at each stage of technology development Unsubsidized market competition: 7-10 years 48

49 capital formation Private money will flow to ventures that return investment in 3-5 year cycles! 49

50 capital formation: pathway for solar thermal 2008: Proof of concept mitigating technology risk Costs at $0.16 per KWh 2010: Deployment as peaking power (vs. natural gas) Costs at $0.12-$0.16 KWh Less with low cost loans Ongoing tech optimization & storage : Deployment as base-load (vs. coal) Costs at $0.10-$0.12Kwh including storage Adoption risk: PUG power, cost 50 Note: All costs in 2006 $

51 % of power from liquid fuel % of power from electric sources optionality: hybrids or biofuels? 0% 100% 100% 0% Time Tata Nano vs. Honda Hybrid (India) 2010: >100X the volume? 51

52 carbon reduction capacity is key 1.9 Growth Offers the Greatest Carbon Reduction Opportunity! Index (2008 = 1) Growth stock Replacement of old stock Improvement of current stock

53 Carbon Productivity = GDP / Emissions World GDP Growth Source: The Carbon Productivity Challenge, McKinsey Original GDP projection from Global Insight through 2037 carbon reduction capacity: 10X increase in carbon productivity! 10 9 Index (2008 = 1) Carbon Productivity Growth Required = 5.6%/yr World GDP Growth = 3.1%/yr 2 1 Emission decrease to 20GT CO 2 e by 2050 = -2.4%/yr

54 Carbon Productivity = GDP / Emissions World GDP Growth Source: The Carbon Productivity Challenge, McKinsey Original GDP projection from Global Insight through 2037 carbon reduction capacity: 10X increase in carbon productivity! Index (2008 = 1) Less reduction now, but greater capacity to respond in the future?

55 goal: cost, carbon & scaling trajectory, capital formation, low adoption risk, & optionality 55

56 or get to work khoslaventures.com/resources.html 56