Welcome to the age of diminishing returns

Thursday, July 24, 2014

Mineral depletion: the trouble with gold

The main point that I am making with my latest book, "Extracted" is that mineral depletion is one of the major sources of our present economic and environmental troubles. Explaining this point is not easy: most people still seem to believe that depletion means "running out" of something. But that's not the case. Depletion is a gradual phenomenon that goes on all along the cycle of extraction of all mineral resources. Extraction starts with the "easy", high concentration resources, but gradually must move to more expensive, low concentration ones. As a result, the returns on extraction diminish with time (and extraction also causes more damage to the ecosystem). One of the consequences is the high prices we are seeing nowadays for all mineral commodities. It is not that we are running out of anything, but ore grades are falling everywhere, extraction is becoming more and more expensive, and that must have an effect on the market prices. The gradual disappearance of low cost/high grade ores can be seen with practically all mineral commodities, but it is especially evident with some of them. The article below is reproduced from Steven S. Rocco's blog and it describes the present situation with gold. As you can see, the gold industry is processing more and more ore to produce less and less gold. It is the inexorable law of depletion at work: we are not running out of gold, and we probably never will. But we'll have to face a falling supply.


From "SRSRocco report"

TOP GOLD MINERS: Yields Fall To The Lowest Levels Ever

By Steven S. Rocco () on July 18, 2014

With the results for 2013 finally in, the top gold miners average yield fell to the lowest level ever.  This is a surprising development considering that the average price of gold dropped to a low of $1,411 in 2013.  Normally when the price of gold falls, gold miners switch to higher grades to remain profitable.

However, the top five gold miners’ average yield declined another 5% in 2013.  If we look at the chart below, the top five gold miners (Barrick, Newmont, AngloGold, Goldfields* & Goldcorp) average yield fell from 1.26 grams per ton (g/t) in 2012 to 1.20 g/t in 2013.

(*Note:  GoldFields spun-off three mines into a new company called Sibanye Gold in 2012.  The data below includes both companies listed as GoldFields.)

Top 5 Gold Production & Average Yield 2005-2013

Furthermore, the average gold yield for the group declined from 1.68 g/t in 2005 to 1.20 g/t in 2013.  Which means these miners lost 0.48 g/t in just eight years… a 29% decline.  That might not sound like a lot, but if we do the math… it’s a substantial loss.

The next chart provides the astonishing blow to the gold mining industry.  In 2005, the group processed 464 million metric tons of ore to produce 25.2 million ounces of gold at an average yield of 1.68 g/t.  In 2013, this same group processed 592 metric tons of ore (27% more), to produce 22.9 million ounces of gold.

This is the negative side of the gold mining industry.  Moreover, the amount of waste rock removed is even greater.  For example, Newmont reported the following data in their 2007 & 2013 Sustainability Reports;

Newmont Statistics

2005 Gold Production = 8.2 million oz
2005 Total Waste Rock = 425 million tonnes
2005 Waste Rock/Production Ratio = 52 metric tons/ gold oz
2013 Gold Production = 5.5 million oz
2013 Total Waste Rock = 620 million tonnes
2013 Waste Rock/Production Ratio = 113 metric tons/ gold oz

Newmont doubled the amount of waste rock generated to produce an ounce of gold in 2013 than it did in 2005.  This wasn’t a straight increase over the eight year time-span.  However the waste rock/ production ratio was 86 metric tons per ounce of gold in 2012… 65% higher than 2005.

The more waste rock Newmont has to remove, the more energy is consumed in the process.  In 2005, Newmont consumed 19 gallons of diesel in its operations to produce one ounce of gold.  By 2012, this increased to a staggering 31 gallons per ounce…. a 63% increase in seven years.
As we can see, falling ore grades become a very expensive factor for the mining industry.

Not all the top five gold miners suffered a decline in average yields in 2013.  Barrick, Newmont and AngloGold saw a drop in average yields in 2013, while GoldFields (include Sibanye Gold) and GoldCorp reported a slight increase.
The company who suffered the largest decline in yield was AngloGold:

AngloGold Production & Average Yield 2005-2015

AngloGold’s average yield fell 15% in 2013 compared to 2012, while Newmont declined 10% and Barrick at 6%.  Even though these declines seem quite large, I imagine we may actually see a leveling off or increase in yields from these companies in 2014.

Unfortunately, high-grading their mines to remain profitable at lower prices is only a temporary solution. Worse yet, the link provides information on how this method can leave a great deal of gold in the ground due to selecting the high-grade ore while leaving low-grade ore uneconomical to extract.
So, if these top gold miners decide to high-grade their mines, we may see a leveling (or slightly rising) of yields in 2014.  However, this may actually speed up the decline rates in yields further down the road.

I am waiting for data to be released by two companies so I can update my chart on the average diesel consumption per ounce from the top five gold miners.  With the majority of results already in… I can honestly say, diesel consumption per ounce in 2013 will hit a new record high.

As ore grades continue to decline, the cost to produce gold will inevitably rise.  Some readers believe the higher energy price will be the factor to push the value of gold to new highs.  Actually, I don’t believe this will be the case.
The world cannot afford high oil prices.  We may experience temporary OIL PRICE SPIKES, but I doubt the price of a barrel of Brent crude will continue to rise towards $200.

The price of gold and silver will rise to extreme levels in the future not on the back of higher oil prices, but rather due to a falling oil supply and its impact on the $100+ trillion of worthless paper-mache floating around the world’s markets.

Monday, July 21, 2014

Surfing the Italian tsunami

Italy is being hit by an economic tsunami caused by the high costs of mineral commodities which is destroying its industrial system and plunging the country in a deeper and deeper crisis. Unfortunately, the Italian government seems to be still locked in the obsolete paradigm of "restarting growth" no matter at what costs and that is worsening the problem instead of solving it. Others are trying to solve the problem by turning Italy into a giant amusement park for foreign tourists, obviously not a long term solution. However, some Italian companies are trying to fight the collapse by being more efficient, more innovative, and more creative. They are, in a sense, surfing the tsunami.

One of these companies is "Loccioni", an Italian company dedicated to energy management and other hi-tech ventures. Recently, they organized an international meeting where I had a chance to participate. It was a rare occasion to see a small Italian company able to take such an innovative stance. Here, Tatiana Yugay of the University of Moscow reports on the event.

From Tatiana Yugay's blog "santatatiana"

On July 10-11, my virtual friend Prof. Ugo Bardi invited me to participate in an interesting event “2Km di Futuro: Smart Community and Social Immagination”. The name itself looked rather intriguing and furthermore I was  intrigued by the fact that I couldn't find the locality Angeli di Rosora even in a very detailed road atlas of Italy. Fortunately, on the eve of the Forum the organizers had sent me a link to a specially created apps for the event. It was very helpful since the apps contained all the necessary info about the event, including the agenda and navigation. I found out that the road of about 200 km was very easy and it would take roughly two hours to get there from my town of Montesilvano, Abruzzo. In fact, the event took place in the neighboring region Le Marche. As I was driving inland by a picturesque highway Ankona-Rome, I wondered what a kind of surprise could I expect in the middle of nowhere? I love a tranquil beauty of Le Marche with green hills topped by tiny mediaeval boroughs. However, I couldn't imagine that one of those boroughs wold be capable to host an international meeting of such a scale.
Nevertheless, all my doubts were dispelled as soon as I arrived at the place of destination, namely, the Loccioni group. On both banks of a small river and right on the highway Ankona-Rome, there were situated two big buildings with a modern industrial look. The courtyard and lobby were full of buzzing groups of participants.
I had attentively studied a preliminary program beforehand and was very much surprised that almost all the declared speakers had really arrived. My long experience of participating in conferences suggested that VIPs never come and, at best, send their representatives. Fortunately, 2Km Forum was an exception to the general rule. We had a pleasure to listen and observe presentations by Piero Cipollone, Executive Director of the World Bank; Vincent Kitio, an Energy Advisor of the UN-Habitat; Vittorio Prodi, member of the European Parliament; Carlo Papa, Chief Innovation Officer of Enel Green Power; Young Chul Park, Vice-President of Samsung Electronics et al. Moreover, there were present about 200 attendees from Italian and foreign universities and enterprises.
Enrico Loccioni, head and founder of the Loccioni group, opened the Forum. I was struck by the fact that the main keyword of his brief speech was “belezza” or beauty. The beauty of creating smart community, preserving the beauty of natural and architectural environment, the art of disseminating beauty and so on. 
The first session “Smart Community” was moderated by Massimo Russo, Director of Wired Italia. Prof. Ugo Bardi, who represented the Rome Club, opened the session. The title of his recent book “Extracted. How the Quest for Mineral Wealth Is Plundering the Planet” (Chelsea Green Publishing, Vermont, 2014) speaks for itself. The main pathos of his speech was directed against predatory use of non-renewable resources which causes damage to the planet's ecosystem and slowdown of economic growth. I follow Ugo Bardi's blog and always enjoy his encyclopedic knowledge and brilliant improvisations, however, I'm not that pessimistic. Maybe, because I live in Russia and teach economics. In fact it's difficult to be a catastrophist in a country so rich in all kinds of rare resources.
The next speaker, Ken Webster of the Ellen MacArthur Foundation, presented an optimistic vision of a circular economy which challenges the appreciation and exhaustion of rare resources. According to Webster, the main concepts of the circular economy are the recirculation and access to resources” as opposed to “ownership”.
One more rival concept was presented on the second day by Enzo Rullani, professor at TEDis, Venice International University and Director of t.Lab of CFMT, Milan. As an expert on the knowledge economy, he presumed that the paradigm of rare, more and more expensive resources was well suited to the industrial capitalism but in the informational society the main resource is information which is abundant and has been becoming more and more cheap.
I'm not going to give an account of all the presentations since they were far beyond my field of competence. Though, I'd like to mention one more presentation. Thomas Herzog, a German architect, who worked on the design of Loccioni's buildings and the surrounding area, described the masterplan of the project pace by pace. In fact, he had been realizing Enrico Loccioni's concept of belezza. 
Photo credit: Thomas Herzog
The masterplan had to take into account not only the direct productive purpose of the buildings but also their aesthetic perception. As I wrote earlier, the site is surrounded by charming mediaeval hilltowns. According to Herzog, people who live in these villages use to look down at the valley where Loccioni's buildings are located, so he was always keeping in mind their bird's eye view.
When I was walking over the bridge, I stopped to make a shot and remembered Herzog's words. You can see on the photos that the modern industrial building perfectly fits into the environment.
After the session, there was a small tour about the enterprise. First of all, we could observe the prime concept of the Loccioni group - a micro-grid – in action.
Then we watched how a young operator was training a robot hand to type on a computer keyboard.
In the courtyard, a representative of Nissan was demonstrating Nissan hybrid cars. Meanwhile tiny robots were crawling on the lawn.
After the first meeting, we spent a wonderful night in a genuine mediaeval atmosphere of St. Helene Abbey.
The apéritif consisting of Le Marche's specialties was offered in a severe monastery setting.
The main courses were served in an elegantly decorated enclosed porch.
After the dinner, we were invited to the former church which now serves as a concert hall with an excellent acousticsThe Loccioni group had prepared a wonderful surprise for us. A famous Italian composer and pianist Giovanni Allevi played his brilliant compositions on the piano. He is very young and has a modern look with thick curly black hair and always wear black t-shirt and jeans. Frankly speaking, I'm not fond of modern piano music, but Allevi is a genius who lives in music, his “secret love”.
The final accord was made by the picnic under a venerable oak. Local farms and winemakers presented very tasty typical Le Marche's foods.

Wednesday, July 9, 2014

Italy: adapting to collapse

The new San Lorenzo mall in Florence, Italy. An American style food court designed mainly with international tourism in mind. It is an example of the attempt of the Italian economy to adapt to the ongoing collapse of its traditional manufacturing sectors, trying to exploit new sources of revenue. So far, this brand new set of restaurants seems to have been successful. Unfortunately, however, even foreign tourists may be an unsustainable resource. 

If you happen to visit Florence, these days, you may notice the brand new food mall on the upper floor of the ancient downtown market. It is a major restructuration of what used to be a vegetable market, which used to be patronized mainly by locals. Now, it is a typical American style, "food court" with many different restaurants sharing the same tables.

From my personal experience, I can tell you that the food in this place is of medium quality; overpriced, but not terribly so. It is the kind of food that foreign tourists have come to expect in Florence, I'd call it fusion food with a Florentine veneer. Note that I have no intention of discouraging you from trying this place. On the contrary, it is at least a way to avoid the many abominable tourist traps you may be unfortunate enough to stumble upon in Florence (you may also like to take a look at some notes of mine on the ancient Florentine cuisine). I just wanted to note how it the new food court is an example of the present trends of the Italian economy.

I have already discussed the Italian collapse in previous posts (one and two). The collapse keeps going and the latest results from the Italian Statistical Institute (ISTAT) indicate that Italy has lost 25% of its industrial production after 2008, with no signs of improvement in view. Politicians are screaming about "restarting growth" but there is little that anyone can do facing such a disaster. The best they seem to be able to conceive is to trick the statistics in order to create the appearance of a non-existing recovery.

The collapse is mainly the result of the increasing burden on the Italian economy of more and more expensive imported mineral commodities. This extra burden has destroyed the competitivity of the Italian manufacturing industry. As a consequence, the Italian economic system is actively re-adapting, trying to find new resources. It must find "light" market niches, areas which don't need large amounts of energy and minerals to be run. It is finding them mainly in the fashion and the food industries.

If you live in Italy, and especially in Florence, you can't avoid noticing how the fashion industry is prospering; you can see that also from highly debatable initiatives such as "dressing" the Baptistery church in Florence as if it were a gigantic foulard. Gone are the traditional manufacturing power centers, and with them there went much of the traditional financial power in Italy. The Monte dei Paschi Italian bank survived the Black Death during the Middle Ages, but it may not survive peak oil! Even the celebrated new prime minister of Italy, Mr. Matteo Renzi, is a consequence of the new balancing of the economic power in Italy.

Tourism is also quickly gaining a new status of fundamental resource in the Italian economy. Tourism has always been a traditional Italian industry, but now it is becoming something new: with impoverished Italians traveling less and less, International tourism is becoming dominant. But it is not any more the time when international visitors would stay in Italy for months or years, to explore the ancient culture and landscape. Now, tourists stay a few days at most and have little time and interest to explore things other than the standard sightseeing tours in the art cities: Venice, Florence and Rome. The result is the concentration of tourism in areas where it can be efficiently exploited by initiatives such as the food court in Florence I was reporting about. Outside these centers, tourism is in trouble, too.

So far, the expanding economies of some countries, primarily China, are providing an increasing flux of tourists to the main touristic centers of Italy. However, it takes little to expose the fragility of this small economic boom in Italy. Think of the possibility of a new financial crisis, such as the one of 2008, and you can imagine what's going to happen. Will the upper floor of the San Lorenzo market return what it used to be? Maybe, and my impression is that we really lost something by dismantling the old vegetable market.

Monday, July 7, 2014

The age of diminishing technological returns: a review of "The Age of Low Technologies" by Philippe Bihouix

Atomic cars are a good example of too much technology (image from "secondchancegarage"). The concept of diminishing technological returns of is the subject of the recent book Philippe Bihouix, "The Age of Low Technologies" (In French, "L'Age des Low Tech")

Recently, a friend of mine showed me an app for his new smartphone. It is called "catspeak" (or something like that) and allows you to choose a message to send to your cat which, then, the phone will translate and vocalize in cat language. Unbelievably, it works! At least, my cats seemed to be very impressed by being addressed by the phone with the meowing meaning "go away" or "I'm angry at you."

This idea of speaking to your cat using a smartphone app seems to be the most egregious example I can find of the concept of "too much technology". Think of  the cost of modern smartphones in terms of precious and non renewable resources. Then, you can't avoid to wonder how is it possible that they are used for such silly purposes.

The concept of "too much technology" is the subject of the recent book by Philippe Bihouix (one of the co-authors of "Extracted") titled "The Age of Low Technologies" (In French, "L'Age des Low Tech"). Bihouix is a first class technologist, at ease in several different fields from electronics to biotechnologies. And his criticism of the naive enthusiasm of the public for the new gizmos presented in the media is simply devastating. He takes no prisoners in his demolition of some of the pet ideas of some fashionable technological gurus. Just read the section on nanotechnologies and, well, you'll see what I mean. The nanotechnologist has no clothes, really.

A consequence of diminishing returns is the phenomenon we call "peaking" as the result of overshoot when people misjudge the long term returns of their activities. It occurs with oil extraction and it also occurs with new technologies: they tend to "peak." They reach extreme performance and then slow down, adapting to a compromise between performance and cost. 

The best example of this phenomenon is, I think, with today's planes. They have noticeably slowed down from the time of the supersonic Concorde, to emphasize efficiency and comfort. The Concorde was simply too expensive to be a practical technology: it was a plane in overshoot. It is likely that something like that will happen to today's smartphones - right now, they are wonderful devices, but they are in a condition of  resource overshoot. In the future, we will not be able to maintain their extreme performance facing the increasing costs of rare mineral resources. That doesn't mean that smartphones will disappear (although that's not impossible) but it means that some kind of compromise between performance and cost will have to be reached. 

Bihouix's book is very much based on this concept: that is how it will be possible to balance performance and cost after "peak technology". It is a fascinating description of a world which moves a little slower than ours and which, of course, can't pretend to keep growing forever. But it is also a world rich of possibilities; not less interesting than ours and also better under many respects. 

A truly remarkable book - by all means recommended! There is only this small problem with the language, but, come on, don't you eat sometimes a baguette and drink café au lait? Then, "L'age des low tech" is worth of a little effort of deciphering! 


Monday, June 30, 2014

Lessons from a failed energy revolution: the real reasons of the nuclear failure

(Image from global warming art). In this post, I argue that nuclear energy ceased to be a viable option in the world's energy mix as the result of the disappearance of the subsidies it received in the form of plutonium purchases by the military. This event was accompanied by a demonization campaign that forever destroyed the reputation of nuclear energy as an environmentally benign technology. In this story, there are several points of contact with the present situation with renewables, targeted by a demonization campaign destined to prolong the agony of fossil fuels.

So far, no energy transition has been planned or managed in advance. Moving, for instance, from wood to coal or from coal to oil was the result of price mechanisms which made the transition convenient for everybody. There never was any need for governments to subsidize diesel locomotives to replace steam ones.

Today, we are going through a new energy transition, one that will take us from fossil fuels to renewable energy. The problem is that price mechanisms, alone, may not be sufficient to drive the transition fast enough. Hence, many governments have enacted rules and created incentives designed to favor renewable energy. These measures have been successful in promoting the growth or renewables, but, right now, the incentives are under attack everywhere in a situation of increasing competition for ever diminishing resources. So, the transition is at risk.

As it is often the case, the past can be a guide for the future and we can learn something by looking at a past case of a failed energy revolution: nuclear energy. This story is worth retelling today because of the many points which are starting to appear surprisingly similar to the present situation with renewables.


The nuclear industry started, literally, with a bang; with the first nuclear bomb of Alamogordo in 1945. But nuclear reactors are older than that. The Alamogordo warhead used plutonium produced by the first nuclear reactor in history, the "Chicago Pile" which had started operating in 1942. It had been built exclusively to produce plutonium for military purposes, just as the other reactors of the same period. These early reactors generated a lot of waste heat and it was soon clear that this heat could be used to produce electric power. That was the origin of the concept of "atoms for peace", popular in the 1950s.

In the mid 1950s, the first commercial reactors for the production of electric power appeared and, subsequently, nuclear energy production grew rapidly, to the point that it seemed possible to create an energy system based entirely on nuclear sources, at least for the production of electricity. It was a moment of great optimism and the age of electricity "too cheap to meter" really seemed to be around the corner.

But, in the 1970s, something happened that brought the expansion of the nuclear industry to a screeching halt. From the mid 1980s onward, the number of new reactors has been barely sufficient to replace the old ones, with the total production of nuclear energy slowing down its growth and showing a decline during the past few years (image on the right from Wikipedia). The nuclear industry failed its objective of becoming the world's main source of electric power; a market that was instead kept by fossil fuels; in particular by coal.

Various interpretations have been proposed to explain the decline of nuclear energy. Often, several different causes are said to have acted together as you can read, for instance, in "Ten Blows that stopped nuclear power." By far, however, the most popular interpretation seems to be that the nuclear industry was killed by the growing environmental movement. It is an interpretation that pleases both nuclearists (it gives them someone to blame) and environmentalists (who see themselves as a powerful force in the issue).

These explanations make some sense. But do you really believe that as many as ten causes all acted in the same direction to explain such a clear trend as the nearly complete stop to the construction of new reactors? And do you really think that the environmental movement could have such a success in bringing on its knees a supposedly healthy industry, considering the success that the same movement is now having, for instance, in stopping the emissions of greenhouse gases from coal plants?

Rather, I propose here that there is a clear single cause that brought nuclear power on its knees in the 1970s. It was, simply, that nuclear energy stopped being subsidized by the US government. At that point, building new plants became unprofitable and the expansion of nuclear power stopped.

The question of the subsidies needs some explanation, because the nuclear industry often claims it needs none. A list of subsidies is given in the 2011 report by Doug Koplow, who, however, seems to have missed what was probably the historically most important subsidy to the Western nuclear industry: the production of plutonium for the US military to be used for military weapons. This market was probably of the same order of magnitude as that resulting from the sales of electricity and were a major source of profit for the owners of nuclear plants (for an estimate of these revenues, see note at the end of this post)

With the expansion of nuclear power, the production of plutonium increased in proportion. But, in 1977, the US senate approved a law forbidding the reprocessing of spent fuel from nuclear plants nuclear plants to produce plutonium. In a sense, it was a badly needed decision, since the growing production of plutonium was creating an economic and strategic disaster. The risk of nuclear proliferation increased with the amount of plutonium produced and the number of warheads in the US and in the URSS military systems was growing out of control with more than 30,000 nuclear stockpiled in the US alone. That gave to the concept of "overkill" a whole new meaning (image source). Apart from the strategic problems it created, plutonium purchasing was also a considerable financial burden for the US government, at that time in a serious financial difficulties generated by the ongoing oil crisis.

The disappearance of the revenues from reprocessing was a major blow to the nuclear industry. It did not send out of business the existing nuclear plants, since the main cost of nuclear energy production is the plant itself. But, in the tight financial moment of the late 1970s, it became nearly impossible to find the large resources to pay for new nuclear plants with the perspective of a return on the investment only for the remote future (if ever). Coal plants could produce higher revenues at smaller initial costs and it is there that investments in energy production were directed. In a sense, we can say that the nuclear industry was a victim of the crisis of the industry that it was supposed to replace: the fossil fuel industry.

The (apparent) end of the oil crisis in the second half of the 1980s eased the world's financial situation, but it didn't help the nuclear industry, which had failed in developing lower cost technologies and still couldn't compete with fossils at the low prices of that period. The new crisis of the first decade of the 21st century reversed again the trend. Today, we see new claims about the need of going nuclear and some evidence of new nuclear plants being programmed. But this nuclear renaissance is slow to start and it may do little more than replace the obsolete plants which badly need to be scrapped.

An interesting point in this story is how stop to the nuclear subsidies was accompanied by the demonization the nuclear industry.  Up to the early 1970s, environmentalists had been generally neutral and often favorable to nuclear energy. Afterward, instead, the tide turned decisively against nuclear energy, with the fortunate slogan "Nuclear? No thanks" created in 1975. We have no evidence that the anti-nuclear campaign was masterminded by some secret agency (but it cannot be ruled out, either). What we can say is that the campaign was extremely effective and in turning nuclear power into the absolute bugaboo of all environmentalists.


Now, let's move forward to our times and let's look at the situation of renewable energy. The similarities with the story of the nuclear industry stand out clearly. The renewable industry enjoys significant subsidies from governments and grew rapidly to production levels comparable to those of the nuclear industry.  Whereas nuclear subsidies were generated mainly by military needs, subsidies to renewables have been generated by the perception of the horrendous external costs of both fossil and nuclear energy. In the first case (fossils) mainly in terms of climate change, in the second (nuclear) in terms of proliferation, contamination, etc.

The problem with external costs, however, is that they are paid by the whole community while the profits of the activities generating them go only to the owners of the plants. Hence, when subsidies or "internalization" start to bite on profits, fossil lobbies will start fighting back. One of the ways they have to undermine public support for renewables is to use demonization campaigns in the media. These campaigns are especially evident in wind power, but also for photovoltaic power and other clean energy technologies. It seems that this approach is starting to pay off for the fossil lobby. Today, a significant fraction of the environmental movement seems to be considering renewable energy almost as evil as nuclear energy. 
We are not yet to the point to see the diffusion of slogans such as "Photovoltaics? No thanks" but never underestimate the power of media and the gullibility of people. PR campaigns tend to generate entrenched legends which, in the long run, are extremely difficult to dislodge from the collective perception. We have examples of this behavior with the demonization of the study "The Limits to Growth" of 1972 and, today, with the demonization of climate science. There is a real risk that a well financed negative PR campaign coupled with punitive financial measures could reduce the renewable industry to something similar to what the nuclear industry is today: obsolete plants and old men reminiscing of past glories.

But the transition to renewable energy is the only hope we have to overcome the resource crisis and the climate crisis we are facing. Renewable energy is showing rapid progress: costs are going down, efficiency is increasing, and new solutions for energy storage are being developed. Renewable energy is now a credible competitor for fossil fuels even without subsidies and it needs not suffer the same failure of nuclear energy. But we need to watch out for a last ditch attempt of the fossil lobby to get rid of a competitor by lies and slandering. We need to keep the momentum for the transition to a better world. And to keep it, we must fight for it.


Note: plutonium subsidies for the nuclear industry. 

I haven't been able to find data on how much money the military paid to the nuclear industry in exchange for plutonium during the 1960s and 1970s. Maybe it is still a military secret, but we can at least make a rough estimation.

First of all, the total amount of plutonium produced for the US military alone is of some 111 metric tons (source). Since plutonium does not exist in the Earth's crust, all of it must have been created in nuclear reactors. How much is this plutonium worth? At present prices, plutonium is said to be worth something between 1000 and 5000 $/g (source). So, all the plutonium stored by the US military is worth something of the order of 100 - 500 billion dollars. No peanuts, indeed  Now, consider that this sum was paid in an arc of time of about 20 years and that today the nuclear industry in the US sells about 40-50 billion dollars of electric power (source). We see, therefore, that the subsidy to nuclear energy coming from the sales of plutonium was very significant.

Let's try another approach. A 1 GW nuclear plant was reported in 1976 to generate something like 250 kg of plutonium per year (source). At today's prices, that could be worth between 250 million dollars and one billion dollars. According to the data available (source) a total nuclear capacity of 100 GW in the US generated 790 million MWh, that is, about 8 million/MWh per GW of nominal power. Let's take a value of 50 $/MWh (source), it follows that a 1 GW nuclear reactor generates revenues for 400 million dollars per year. Again, we see that the plutonium produced by the reactor  worth a significant fraction of the revenue from electricity sales, perhaps even more than that!

Of course, these data are obtained using the present plutonium prices; at the time, prices were surely different. And note also that the civilian nuclear industry did not "sell" plutonium to the military - they couldn't do that because they lacked the facilities to extract and refine plutonium (of the right isotopic composition) from their spent fuel. They just provided their spent fuel rods to specialized plants which would extract and refine plutonium 239 which then was transformed into weapons or stockpiled. The calculation is just an estimate of the value of the plutonium production during the heydays of the nuclear industry, and that must have provided a significant benefit to the industry.

Monday, June 23, 2014

Photovoltaic Water

Water produced by condensing humidity from the air using solar energy. Starring Francesco El Asmar. Photo by Ugo Bardi

When we started working on producing water from atmospheric humidity, myself and my friend and colleague Toufic El Asmar thought it was a mad idea. Energy is expensive and water condensation requires a lot of it. Yet, as we kept working on the concept, we found that it made sense. Sure, it takes energy, but, with the progress of technology, renewable energy is becoming cheaper and cheaper. And at some moments, renewable energy really costs zero. At those moments, you should store it, but storage is the expensive part of renewable power. So, why not transform solar energy into something that you can store at little or no cost, for instance clean, drinkable water? After all, water is fast becoming a scarce commodity in many regions of the world.

So, the idea was born of a "solar water machine" which uses electric energy from photovoltaic panels to drive a water condenser which collects humidity from the air. The water is then filtered and made drinkable by adding a small amount of natural salts. The machine is more complex than this; it also collects rainfall and it can clean and purify water from almost any source, producing up to two hundred liters of pure water per day. Its solar panels make it completely self-sufficient: you may place it anywhere; it doesn't need to be connected to the grid (although it may be). So, it is good for remote places, for emergency situations, and for a variety of needs. Here is the "Acqua dal Sole" system, the day of its official presentation in Capannori, Italy. The people involved in the project are lined up in front of the machine (including yours truly).

Now that I told you the essential, let me tell you some more details about this idea. It all started some years ago, when myself and Toufic El Asmar prepared a project about using solar collectors to produce air conditioning for North African and Mid-Eastern Countries. The idea was that these countries enjoy a high solar insulation, which could be collected using parabolic mirrors to heat up an absorption air conditioning system. The project was approved by the European Commission with the name of "REACT" and it led to the manufacturing of two prototypes, one in Morocco, the other in Jordan.

As time went by, however, the rapid fall of the price of photovoltaic panels made parabolic solar collectors obsolete. But while working on the React project, we noticed how solar refrigeration could produce a lot of water by condensation from the air. That led us to study the subject more in detail and the European Commission sponsored a project called "Aqua Solis". Our idea was to study an approach completely different than the large scale desalination plants which are commonly used nowadays to produce water for dry countries. The idea was to develop "village scale" systems; improved versions of the old "solar still" idea. Cheap, simple, and with no need of the expensive pipeline systems needed for the conventional desalination plants. The basic idea was to create versatile systems which could use photovoltaic energy for water production, but also for any use needed at a particular moment

In time, this study evolved into a patent filed by me (Ugo Bardi) and Toufic El Asmar and to a working device: the "Acqua dal Sole" system, built by the Italian companies Sinapsi and Sinerlab, on a project by Archistudio. The "Acqua dal Sole" system is at present located in an area close to the airport of Capannori (near Lucca, in Italy) where a high tech aeronautics company, "Zefiro" has kindly offered space for a test. The water produced is free for anyone stopping by, although for bureaucratic reasons you will read on the tap the sign "not drinkable" (in Italian). But it is perfectly drinkable and very good, I can tell you that!

We are looking at practical applications and markets for this device. Of course, that depends on the cost but, as the prices of PV keep falling, it is likely that water from the air could be a revolution in the way water is produced in the world, especially in areas where it is badly needed. And also on the way renewable energy is stored.

Once you have seen the "photovoltaic camel" you can understand how fast the range of applications of PV panels is growing. Photovoltaics is an emergent technology which has the possibility of reshaping the world in ways which, at present, we can't even imagine.

Acknowledgement: the people who worked on the "Acqua dal Sole" project

Ugo Bardi (University of Florence)
Eugenio Baronti (Zefiro s.r.l.)
Lorenzo Cardarella (Sinapsi s.r.l.)
Toufic El Asmar (Food and Agriculture Organization, FAO)
Filippo Niccolai (Sinerlab s.r.l.)
Francesco Niccolai (Sinerlab s.r.l.)
Michele Tosti (Sinapsi s.r.l.)