Let’s face it this has not been a good year for “warmists” as the believers in human-induced climate change are sometimes derogatorily called. Revelations of what, at best, can be called shoddy workmanship by researchers, but what may actually may be closer to fraud, have tainted beyond repair the credibility of the “global warming” alarmists. The poke in the eye for climate scientists has been even more telling because the publications that have been actively reporting their sins have often been impeccably left-leaning; for example witness the reports by the British Guardian newspaper on the climate scandals at the University of East Anglia. No great right-wing conspiracy this. We might also note that back in the U.S.A, one of the warmists’ fondest dreams took a nosedive last week when Senator Reid announced that the so-called "cap-and-trade' energy proposal that passed the U.S. House of Representatives last year would not be taken up by the Senate.
This whole mess that the establishment climate scientists seem to have gotten themselves into seems to us to be neatly summed up in the words of Jonathan Foley, Director of the Institute of Environment at the University of Minnesota and apparently still a true believer in the global warming story. Speaking this week at the impeccably establishment Aspen Institute, Dr. Foley was quoted as saying “Climate scientists — stop talking about climate science. We lost. It's over. Forget it,”
Should proponents of the Smart Grid concept be worried by all of this? After all, the billions of dollars that have been spent on Smart Grid have often been justified in the name of preventing global warming. For example, consider the Smart Grid project in a district of Stockholm, Sweden where ABB is working with the Nordic utility Fortum. The main objective of this project is to cut down on carbon emissions and it partly funded by the Clinton Climate Initiative Program, with this specifically in mind.
Many other Smart Grid projects around the planet are less focused on climate change issues, but somehow “climate change,” “global warming” and “greenhouse gases” are words that seem to pop up inevitably whenever Smart Grids are mentioned or when executives in the Smart Grid business are trying to sell their ideas to investors and governments.
So if climate change is a dying issue, will the Smart Grid concept follow it into oblivion? We don’t think so. What Smart Grids need is another raison d’etre. And we think they have one. As James Carville might have said, “it’s the economy stupid.”
Well it’s the economy of China and India, anyway.
Sometime in the 1970s these countries understandably decided in their collective consciousness that they wanted to have lots of goods and services, just like their cousins in the West and Japan. And in the past ten years or so it has become clear that the hugely talented peoples of these vast nations are quite capable of achieving their goals.
But consider China. For years the Chinese grid has suffered from lackluster funding that has resulted in blackouts and a major infrastructure collapse during the snow storms in 2008. The Chinese power grid is currently made up of 1.18 million kilometers of older transmission lines that carry approximately 3 million GW of electricity. Almost 7 percent of that this power is lost from inefficient power transfer. At the same time the demand for power in the country is expected to double by the year 2020.
India is in a similar position and the writer of this blog well remembers being in Jaipur 12 years ago and discovering that the electricity went off after 9 pm. As a tourist this was rather quaint in its way. But it isn’t the kind of infrastructure that is destined to give birth to great new companies with the prospects of more jobs, goods, services and general prosperity; the goals of Indian and Chinese economic development.
So the Indians and the Chinese are building Smart Grids to help them build their economy. The business and trade press are full of huge numbers about how much will be spent on these grids. They are astronomical. In NanoMarkets/Smart Grid Analysis’ recently published report on market opportunities in Asia , we project, for example, that the Chinese market for high-voltage DC transmission systems alone will be worth $7.8 billion by 2017, just to take a specific example.
But unlike what supposedly happens in Las Vegas, what happens in India and China is unlikely to remain there. Absent the invention of some extraordinarily low-cost energy source, Indian and Chinese economic development – and the rapid growth this entails in energy use -- is going to push up the real cost of energy throughout the world. And this, we believe, is one good justification in itself for building the Smart Grid in the developed nations. Essentially, there are two points to be made here.
First, a key factor favoring the Smart Grid concept is enhanced efficiency of delivery, which may result from (say) newly engineered types of Smart Grid transformers or improved management and monitoring; the latter a key part of the Smart Grid concept. Greater efficiency is essentially a way of reducing real energy costs and we believe it will become a key driver for Smart Grid markets in the next few years. For example, in NanoMarkets Smart Grid Analysis’ study of market opportunities in the distribution sector of the Smart Grid business published this month, (here) we project that $5.2 billion in Smart Grid distribution automation and related gear will be sold by 2017, and the purpose of much of this gear will be to enhance efficiency. By the way, these numbers don’t even account for the standard PCs and operating systems that will be sold along side of this specialist hardware and software.
The second point relates to solar and wind power. No doubt about it, the reasons for deploying these renewable power sources certainly takes a great hit if the climate change argument goes away. And Robert Bryce has reminded us in his great new book “Power Hungry: The Myths of Green Energy and the Real Fuels of the Future” the idea of green energy source making much of a dent in our need for fossil fuel and nuclear energy is essentially infantile.
However, we think that Bryce’s book may go a little too far in its implications that solar and wind power are both a waste of time. Both technologies are very early in their technological evolution and it is quite possible to imagine (say) a photovoltaic panel of the future equipped with nanotextured absorber material and cheaply manufactured concentrators having a major contribution to make to our energy needs in a world – perhaps a decade from now -- in which real energy prices are increasing because the peoples of Asia are getting more prosperous. If this is the case then we will most certainly need more Smart Grids with their implicit ability to handle distributed and highly variable power sources.
Bottom line: the priority to industrialize in India and China implies the deployment of Smart Grids in these nations and rising energy real energy prices for the rest of us. Such rising prices may in turn prove a real economic driver to build Smart Grids all over the world.
And there is not one whisper in any of this analysis about global warming!
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