On the World stage, momentous events are unfolding. The USA, UK and France have bombed Syria risking confrontation with Russia. The Israelis are more than a little concerned about Iranian involvement in Syria. And on the Korean peninsula, peace between N and S is on the cards spreading prosperity and more energy consumption for all. On the second tier, oil production in Venezuela and Mexico continue to tank. No one should be surprised, therefore, that Brent has breached $74/bbl. The only thing standing in the way of another severe oil price spike is the N American frackers going back more seriously to work. They may one day be joined by frackers in Saudi Arabia, China and Russia.
The chart below from the February OMR is one of the more important produced by the IEA showing the balance between supply and demand leading to either stock draw or additions. So important in fact that I have decided to leave it there from the last report 2 months ago so that it can be compared with the equivalent chart from the April OMR that is reproduced just below it.
The difference between the two charts are quite subtle but with dramatic impact. Data revisions result in crude oil stock draws for 7 quarters backdated from 4Q 18. This has meant that the IEA now sees OECD crude oil stocks at the 5 year mean at the present day. The momentum of the trend will see OECD crude oil stocks shooting to the low side. Even higher oil prices may be on their way.
Readers should note that since January 2018 I have been employed as a consultant at ETH Zurich. ETH are a well-kept secret, but are in fact the number 10 ranked university in the world, up there with CalTech, MIT and Imperial College.
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The price of residential electricity has risen in lockstep with growth in renewable capacity in Europe but not in the US, and because of this European residential electricity rates are now roughly twice US rates. The reasons for the difference are a) that renewables surcharges are added to residential electricity bills in Europe but not in the US and b) that residential electricity bills in Europe have increased roughly in proportion to the amount of money spent on renewables growth. Residential rates in US states are set by state Public Utility Commissions that are legally obliged to set prices at levels that are fair to both consumers and providers. As a result the European bill payer pays for new wind, solar etc. while US renewables expenditures are offset by adjustments to the federal budget that are not itemized but which ultimately get paid by the US taxpayer.
New England’s transition to renewable electricity is complicated by differences between the generation mixes in and the renewables targets set by its six component states. New England’s approach to fostering renewables by replacing dispatchable fossil fuel generation with wind and solar also does not help. New England does not have enough pipeline capacity to feed its gas plants during high-demand periods when gas generation is most needed, and during the cold weather at the end of 2017 it had to mobilize essentially all of its remaining coal and oil-fired capacity to keep the lights on. If coal and nuclear plant retirements continue blackouts would appear to be inevitable during future cold weather periods. Barring a miraculous advance in energy storage technology New England’s electricity sector also has essentially zero chance of ever going 100% renewable. (Inset: 670 MW Pilgrim nuclear plant, scheduled for shutdown in 2019).
As discussed in numerous previous posts the world will need immense amounts of energy storage to transition to 100% renewables, or anywhere close to it, and the only technology that offers any chance of obtaining it is sea water pumped hydro (SWPH) storage. Here I consider the practical aspects of SWPH and conclude that there are only three places in the world where a combination of favorable shoreline topography and minimal impacts would allow any significant amount of SWPH to be developed – Chile 
An introduction to tidal stream power was given on Monday in this post: 
It’s day 10 of 13 on the Energy Externalities game and its become clear that player fatigue is setting in (or maybe its Easter Holidays). “I don’t want to play any more, scoring technology already proven to not work”. To all players, please stick with it, the results continue to provide indicators with some precision. More on this below the fold. To rekindle interest, I’m jumping to tidal lagoons that we have featured in a number of prior posts.
With solar thermal, I am beginning to wander further away from systems where I have a reasonable grasp of their operation. There are two main classes of concentrated solar power (CSP) namely parabolic mirrors that focus solar energy onto a pipe filled with water that raises steam and a central tower configuration where an array of mirrors focusses the Sun’s energy onto a central tower, raising steam to drive a turbine (inset image).
Diesel powered electricity generation is a niche common on isolated island grids like El Hierro and in certain countries, like the UK, recently adopted as peaking plants. They have the advantage that they can quickly and easily be switched on and off and the disadvantage that they are expensive to run. Answering some of the questions below for diesel is a bit tricky. For example, when it comes to fatalities we need to consider fatal accidents in the Global oil production and refining industries. But diesel for power generation uses only a tiny fraction of global oil production (<1%?). Power diesel accidents therefore need to be pro-rated accordingly but then adjusted to the amount of electricity produced. Not an easy task to scale in your head.
Solar PV is a multidimensional energy system difficult to evaluate on a global basis. Maximum concentration required from The Game players! First, there is solar thermal hot water, solar thermal power generation (also known as CSP) and solar PV. Today’s game is exclusively on the latter. And in solar PV there are two main families of panels: 1) thin film and 2) polycrystalline. Today’s game is exclusively on the latter. Add to that the fact that solar PV works much better at low latitude than high, not only from the resource perspective but also from the seasonal storage one. In short, solar PV makes much better sense in Arizona and Mexico than it does in Aberdeen. Politicians tend to see devices that generate free, clean electricity, while I tend to see expensive devices made from coal in China that produce electricity some of the time.
Hydroelectric power produces no pollution once the dam is built and the valley flooded. It is dispatchable and widely regarded to be the “Rolls Royce” of renewable energy. Based on trapping rainfall produced by solar energy trapped in high valleys that were created by plate tectonics that is driven by spontaneous nuclear fission within the lithosphere. 
It’s now day 5 of the Energy Externality Game and time to move onto the first of the new renewables, namely wind power. Loved by Green groups who see only reduced CO2 emissions, wind farms are hated by many others who see a blot on the landscape. Here at Energy Matters we normally just see high cost noise being added to a grid that needs to be balanced from second to second with some precision. This high cost noise needs to be mitigated and the cost of that mitigation is normally borne by others, not the wind farm operators.
It’s now day 4 of the Energy Externality Game. Diesel generators were next on the list, but I decided to skip over that for the time being and to move on to the more exciting topic of nuclear power. Nuclear power has a long supply chain and needs to take into account U mining, ore processing and upgrading to yellow cake; enrichment and fuel manufacture; construction of enrichment facilities, reactors and power stations; operation of the foregoing; decommissioning and waste storage.
Its day 3 of the Energy Externality Game already and we move onto biomass-fired-electricity. Most biomass electricity currently resides in Europe, where much of the fuel is imported from North America. In evaluating biomass we need to consider the whole supply chain from timber operations in N America, transport to and from the wood pellet factory, transport across the Atlantic Ocean, off-loading and transport to power station. We then need to consider the externalities associated with power generation.
Day 2 of The Energy Externality Game and we are assessing gas fired power generation using a combined cycle gas turbine (CCGT). In scoring gas we need to take into account the whole of the gas exploration and supply side of the business (which is complex, see below), transportation of gas and the CCGT operation itself. I was a little disappointed in the level of audience participation yesterday, with only 11 participants in total, although the results are very interesting. It would be really good if we could push that beyond 20. Hopefully all of yesterday’s players will play again. Once you get in the swing it takes <10 minutes to compile the scores.
