TCASE 2: Energy primer

Before getting entangled in the thorny bramble of sustainable energy options, I thought it helpful to arm you with a set of terminological secateurs. So TCASE #2 (recalling that TCASE = the Thinking Critically About Sustainable Energy series) is a brief primer and glossary on energy terms. This is not meant to be anything comprehensive, but it’s enough to get your technical feet wet and to understand some of the units and concepts that are liberally thrown around by those who are used to talking in the energy jargon. (If readers feel I have missed something important [no doubt], please feel free to add this to the comments, and I will also update this post to reflect the important suggestions.)

Anyway, first up, we need to understand the difference between power and energy. Let’s say you have a jug of water. It has some volume, which is the amount of water the jug holds. Now, let’s say you gradually tip out the water — the flow of water (the amount of water being poured per unit time) is a rate. Well, in caricature, the volume of water is like energy, and the flow of water is like power. Not a perfect analogy, but they never are…

Now, when measuring anything, you could use any manner of units. I’m going to consistently stick to SI (Système Internationale) units. If you want to translate back and forth (imperial, metric, nonsensic, etc.), look up the tables here. The basic SI unit of energy is the Joule. The basic unit of power is the Watt (W), which has units of Joules per second (J/s). So, a 60 W incandescent light globe uses up energy at a rate of 60 J/s, or 216,000 J per hour (60 x 3,600 = 216 kilojoules, kJ). Or, to express it another way, in one hour (h) that light would use up 60 Wh worth of energy, and in a day, it’d use 60 x 24 = 1,440 Wh, or 1.44 kWh. So, kWh are a unit of energy.

Energy comes in various forms, such as heat and electricity (the ones that are relevant to TCASE — there are also forms such as ionising radiation, light etc.). Heat (hereafter thermal) energy is considered lower quality than electrical energy — it’s less flexible and difficult to transport — but thermal energy is easier to store. Also, many power production methods, such as coal- or gas-fired, nuclear, geothermal and solar thermal power stations, generate thermal energy and then convert it to electrical energy, in a process that necessarily must throw away waste heat (roughly 2/3 of it) — first used in a practical way by Thomas Newcomen and later improved upon by James Watt. This is commonly done via a steam generator and condenser, although gas turbines are also used. Indeed, combined cycle gas turbines use both a gas turbine (Brayton cycle) and then use the waste heat to power a steam turbine (Rankine or Sterling cycle), which increases their conversion efficiency. Efficiency is strongly affected by the temperature differential, so if (for instance) your steam goes in really hot and then is water cooled, this will be more efficient than if your steam goes in at a lower temperature and then is air cooled. So air cooling saves water, but lowers your efficiency.

Wind turbines are connected (via gearing) to an electrical generator directly, and so avoid the need to first produce thermal energy. Solar photovoltaics also generate electricity without any thermal step, via the photoelectric effect. A hydro or tidal power device will generally use the flow of water to turn a turbine, rather than expanding steam or gas, and an ocean wave generator might pump water to shore at high pressure to turn a turbine. You get the idea.

An important thing to distinguish is the difference between conversion efficiency and capacity factor. You might, for instance, have a nuclear power station that has a conversion efficiency of 38%, but a capacity factor of 92%. What’s the difference? The conversion efficiency is (roughly) the efficiency with which thermal energy is converted into electrical energy through one or more steps. The capacity factor is the amount of energy a power station generates over a given length of time compared to the energy it might have produced if it had been running at full power for the whole period. There is a good explanation of capacity factor on Wiki.

Here, let’s take an example of wind turbines to better explain capacity factor. One of the largest wind turbines yet built is the Enercon E-126 (see picture), which produces a peak power of 6 MWe (that’s 6,000 kWe, where the “e” distinguishes this as electrical energy as opposed to “MWt” for thermal energy). This impressive structure has rotor (blade) diameter of 126 m, and a hub height of 198 m. Let’s say you stuck this on the west coast of the Eyre Peninsula, where it sometimes got strong wind speeds that allowed it to generate its full rating of 6 MW. Other times, the wind would be modest, weak, or calm, at which times it would be generating at less than its peak (nameplate) power. It would also shut off it the wind got too strong in a gale. Now, let’s say you tallied up the energy this turbine had generated over the course of one year at this site, and found it to be 16,820 MWh. If the turbine had generated at full power the whole time, you would have expected it to have produced 6 x 24 x 365 = 52,560 MWh. So, in this case, it’s capacity factor for the year was 16,820/52,560 x 100/1 = 32 %.

Alternatively, let’s say an AP-1000 nuclear power station was rated at 1,154 MWe, and for 11 months it was run at this power output. Then, for one month (say December) it was offline being refueled. It would generate 1154 x 24 x (365-31) = 9,250 GWh for 11 months and for December it would generate 0 GWh. It’s capacity factor would, in this example, be 9,250/10,109 x 100/1 = 91.5 %. And so on, for all the other technologies we’ll be discussing in TCASE.

So, 1 gigawatt (GW) = 1,000 megawatts (MW) = 1,000,000 kilowatts (kW) = 1 billion Watts (W). Solar panels are usually described in terms of their peak kW power. Wind turbines are (these days) usually rated in MW. Nuclear power stations are expressed in MW or GW. Almost universally, their peak (nameplate) electrical power, rather than thermal power or average power (after accounting for capacity factor), is what is reported. So watch out when converting to energy.

Finally, recall I said a W was in units of J/s? A J is a unit of energy. But why then did I start to talk about energy in kilowatt hours (kWh) etc.? Well, this is often a convenient way to express energy (David Mackay chose to use this as his standard), as it’s easy to mentally switch back and forth between power and energy (though there is also the potential to get confused!). Also, J is too small to be of much practical value. But the megajoule (MJ) is a useful value for expressing the energy content of a litre of liquid fuel (for instance), and the petajoule (PJ) and exajoule (EJ) are sufficient for expressing the energy use of nations and civilisations. For instance, the primary energy use (thermal and electrical) of the global human enterprise in 2007 was (very approximately) 500 EJ, which is 138,890 TWh (terawatt hours) — where 1 TW = 1,000 GW. I’m sure by now you’re getting the hang of this!

I like to use EJ and TW when expressing really large energy budgets and power demands — which, incidentally, is the topic of TCASE #3.

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  1. Unfortunately in the public debate on energy the measurement of choice is most often “number of average homes,” which of course can mean whatever the propagandist using it wants it to be…


  2. Good primer, although I suspect that most readers here know most of this. Still it is always good to get your terminology straight.

    Capacity factor is important but it does not tell the full story. Photovoltaics have a low capacity factor by virtue of it being dark at night. However that at least is a regular predictable event that we could somewhat accomodate via demand management (typically via price signals but also in other ways). We could close mines and factories at night, stop desalination plants at night, heat domestic water in the daytime, avoid night pre-cooling of office buildings etc. However the unpredicatable and enduring outages (eg three weeks of unexpected cloud cover) are much more difficult to accomodate even thought it would effect capacity factor far less than the 365 nights we get each year.


  3. Yes TerjeP, you’re quite right, and of course such matters will be discussed in detail in future TCASE posts. Dispatchability is another key factor that makes capacity factor only part of the story. This post was done with the intention of getting those not familiar with energy terms up to speed, and so I expect it to be of only modest interest to already avid BNC readers/commenters.

    Thanks to other for their comments so far, including the grammatical error!


  4. Thanks Barry,

    With the explanation on conversion vs. capacity factors, would it be beneficial to include perhaps something on the way in which they interact, ie. the overall efficiency of a power source from energy inputs (conversion) to power output (capacity).

    I might be on the wrong track here, but is it possible to have a power station with an impressive sounding capacity factor but a conversion factor so inefficient it’s not worth running it?


  5. In terms of energy production plant efficiency isn’t really a useful point of comparison between technologies. For instance some modelling of the solar updraft tower suggests that it would produce much more reliable and much cheaper power than a photovoltaic plant even though it’s efficiency is far lower. If it produces cheaper power due to a much lower capital cost who cares about the fact that it wastes (fails to capture) more sunshine. Efficiency is a design consideration for any given plant but only as a cost control method and not for any other practical reason. If it was cheap enough a solar array with an efficiency of 2% may be superior to a more expensive one with an efficiency of 30%.


  6. p.s. The above point is why I think putting solar panels on residential homes is generally dopey even if they can achieve reasonable efficiency. The install cost and the long term maintenance cost is likely to be a cost killer. To their credit the ALP has shifted subsidies away from such initiatives to much more practical and cost effective intiatives such as home insulation and the like.


  7. The little appreciated complementary aspect of residential PV is the fact the homeowners tie themselves in knots trying to stay within their average output. Making it harder is the fact 2009 has been exceptionally cloudy in parts of Australia. Frequent rain washes the bird poo off the panels, otherwise the only maintenance required in the early years is an occasional climb on to the roof with a fluffy duster. PV makes the householder ‘own’ their electricity use rather than take it as a privilege.

    This leads me to think that non-dictatorial demand management could be more effective that we realise. Instead of expensive PV perhaps cross tiered pricing of grid supply can get an equivalent result. For example within daily peak/off peak could be a base rate for the first 10 kwh peak (say 15c/kwh) then a penalty rate for peak use over 10 kwh, say 30c. Force the homeowner to think about cost minimisation. At the same time help them with a free or subsidised smart meter paid for by ETS revenue. $10bn could buy $1000 a year of green gadgets per home. Installing them creates green jobs.


  8. I must admit John in #11 I have PV cells on my roof and my behavior has not changed one iota as you suggest. I hear the low hum at dawn and I smile, but I must admit I’ve had the system a year and I’ve never even checked the output!

    TerjeP’s comment about removing the eco-virtue from my panels is spot on… in fact I yearn for a day where you don’t have to be eco-virtuous to do things that make economic sense.

    Back to the panels… well the subsidies just made economic sense to me… sadly I missed out on the WA Govt’s handouts to say sorry for not implementing a better feed in tarriff but ahh well. Of course without the significant subsidy there is no way I’d have put the cells up – I could acheive far greater energy savings fo the outlay that would have cost me.

    Hmm that means I have panels but am also rational and informed… maybe I’m a one off?


  9. I’d be interested in a breakdown of what you guys paid for your units and what it saves you on an annual basis. No doubt subsidies may change the individual calculus. However I stand by the assertion that directing subsidies toward home insulation is much more effective.


  10. With (significant federal) subsidies I paid ~$4,000 for the system all up, and I worked out that with the state feed-in tariff, it will save me about $350 to 500 pa, so the payback period is ~8 to 12 years. All rounded figures, but that’s in the right ballpark for payback with the up-front subsidies and ongoing feed-in tariff. Without any subsidies, the payback is closer to 25 to 30 years.


  11. Lets assume $400 pa. Given that the annual saving is tax free income then assuming you are on a marginal tax rate of 40% the annual return is like earning $666 in pre-tax interest. In other words 16% per annum. So assuming zero maintenance cost and no depreciation of the asset I’ll concede that this represents a quite rational investment in personal terms.

    How much did the taxpayers of Australia invest in your system?


  12. Subsidies met about $7,500 of the $11,500 total system up-front cost. It would not have been worthwhile without this subsidy, with the 44c/kWh net feed-in tariff being a sweetener (only net, not gross, so I’m guessing I only get it for at most few hours a day when its sunny and people are not in the house for one reason or another). Good point about marginal return after tax considerations.

    Of course my system doesn’t make any contribution to reducing Australia’s greenhouse gas emissions below the mandatory renewable energy target, as the REC sales are part of the subsidy.


  13. The taxpayers of Australia benefit from power utilites being able to meet their MRET requirements at zero cost for land (it is on my roof), and in fact I’ve paid $3500 towards a solar panel that some utility would have had to build if I hadn’t done it for them and flogged then the renewable energy certificate. Granted a power utility would most likely be able to install PV at a significantly lower cost per unit due to economies of scale.

    In essence the tax subsidy is really a payment to power utilities in terms of removing the cost they would have to bear to install the capacity if it was not on my and Barry’s roof.

    It is a win-win all round, unless of course you get hung up on the fact that you don’t actually add any more capacity to the grid if you sell your RECs.

    As a taxpayer I subsidise many things for others… roads for example as I’m a commuting cyclist. Me no complain.


  14. It’s cheaper on my roof!

    The high feed in tarriff in SA really only reflects, again, that the energy company would otherwise have had to install the capacity themselves (due to MRET) and would then be making a big loss selling that power to a consumer at 15c kwh.


  15. TerjeP (#17)

    I think yiu missed something in your cost benefit analysis for solar panels. If you deposit $4000 in a term deposit, you earn the interest, pay tax on it and still have the $4000 capital at the end. With the solar panel, it is worth nothing at the end.

    By the way, the ACT governmnents subsidy is $0.50/kWh for EVERY kWh you generate, and this is guaranteed for 20 years. It is not net!!. And you get other generous subsidies as well. Until mid June you received $8,000 from the federal government and about $1,500 in other subsidies for a 1kW panel. The total cost to the home owner for a 1kW installation was about $3200 until mid June. But even this was a marginal investment in purely financial terms. It assumed no intention to move house for 20 years, no maintenance for 20 years, and no risk of change of government policy.

    The CO2 avoidance cost is $4,051/tonne CO2-eq avoided. For comparison, C trading schemes are putting C costs at $10-$40 per tonne. the avoidance cost is paid by all Australians.


  16. Matt – forceably taking $7500 from one group of people and giving it to another group of people and then declaring that everybody wins is not at all convincing. About 15 cents in every tax dollar disappears in government adminstrative overheads and there is probably an additional 40 cents lost to general welfare through dead weight losses. Advocates of transfers ignore these costs all too frequently. Not to mention the basic loss of liberty and autonomy.

    Barry – the flip side of the improved marginal return by including your assumed marginal tax rate is that if you were selling the power to your neighbour rather than discounting the cost off your bill then you would be subject to quite different tax treatment. Taxes such as income tax operate as a trade tariff applicable to inter household trade. They are more destructive that tariffs on inter nation trade (because the rate is typically higher and most trade isn’t international anyway). In short if you were a net producer of power the marginal return from extra panels would be different. There is an extra hidden subsidy occuring here.


  17. Living here in SW Tas there is no feed-in tariff, just 16.5c a kwh credit. After the wettest year since 1927 or so my electricity account is somehow still $163 in surplus. All the indications are for non-stop rain ahead so I don’t know when I’ll get a few spare kwhs up. Note this is only possible if most of the grid can accommodate minor intermittent input.

    I disagree with feed-in tariffs at either residential or commercial level. The rationale given by Jerome a Paris et al is that increased scale drives down average fixed costs, an argument that applies to anything. After a FiT phaseout period commercial generators of wind and solar should bid for electricity supply in 10 minute blocks at a price that covers their expected average costs. That is, higher than gas or uncarbon taxed coal and with no obligation on electricity retailers to obtain renewable credits.

    An interesting perspective on Tasmanian energy is the implied subsidy from the 2c per kwh price to the State’s three electrorefiners,
    It works out about $166,000 per employee. No doubt a touted silicon refinery will get the same deal. This could be why the island imports ever increasing amounts of coal power from the mainland; it’s buying jobs.


  18. Here in the ACT, PV uptake appears to have been going on apace since the feed-in tariff was introduced. And yes, I completely agree that it makes little sense in terms of cost per tonne of emissions reduction.

    However, there’s another significant psychological factor, which has been a part of the thinking of those that I know of that have installed PV recently: the idea of self-sufficiency. Partly, perhaps, long-standing resentment against the utilities; partly as a partial UPS during (incredibly rare) blackouts, and partly, I suspect, as a kind of minor doomsday insurance – something that could be valuable if it all goes pear-shaped (pandemic, food crisis, …) and social services and utility networks start to fall apart.

    Also, Barry, a couple of typos:

    – in the third last para: “Solar panels are using described in terms of their peak kW power”: a surplus “using”?

    – near the end of the second last para: “terrawatt hours”: should be “terawatt”.


  19. Barry
    In Logic, How can a sale be part of a subsidy? A sale is a sale and a subsidy is a subsidy.

    I am sure that you are aware that what you did was sell your deemed proof of generation certificates being the RECs that were probably used by liable wholesalers and retailers to meet their mandatory obligations under the Renewable Energy (Electricity) Act, or perhaps if they were sold before July this year they were turned into GreenPower and sold to a neighbour.

    I think that what you are describing is that your sale was treated as if it was a subsidy which is the widespread promotion that leads people to such a decision, if they even understand enough for there to be a decision.


  20. To Peter Lang Re:
    “The CO2 avoidance cost is $4,051/tonne CO2-eq avoided. For comparison, C trading schemes are putting C costs at $10-$40 per tonne. the avoidance cost is paid by all Australians”.

    I cannot agree with your assessment on the avoidance cost. With the Federal Government now allowing the legal householder count and 5 MWh of RECs to sell into the mandatory market we have a six fold count this year. The net result is that we now have 4MWh less renewables for every deemed MWh created so this is actually a harm cost with the false solar credits concept. Australian electricity users are now subsidising voluntary solar panels to reduce Australias total renewable electricity, rather than just paying to achieve nothing at all, as the scheme did before July.

    I am however puzzled as to why you would just drop in carbon trading scheme cost ranges. These costs are notional permit sale or secondary market costs that need to be considered in the broader context of the permits that are given out for free and the compensation that will be granted. They are numbers manipulated by governments based on what is perceived that the economy might be able to afford in the short term but they do not reflect the cost of mitigation and not at the scale that we will need to avoid disaster.


  21. Matt #30,

    The grid connected systems being installed in the ACT do not act as UPS nor as a source of power if the grid goes down. They feed into the grid and have no storage. Off-grid systems with storage are far more costly. I suspect all those reasons you gave are invalid, although I do accept people are buying such systems thinking they can do all those things. The population is being grossly misled in many ways about renewable energy.


  22. Matt I think you’d need a battery backup to act as a UPS in a crisis. When those BP inverter boxes can’t detect grid AC they switch off the panels so you get nothing. This could be critical in a bushfire when you want to run say a 400w electric hose pump and the mains are down. That’s why I bought a small petrol driven water pump as back up.

    You’ve touched on my only real fear about a nuclear Australia; what if it became a semi retirement job for failed politicians or it was run by Enron type creeps?


  23. Oh yes, I should have clarified that: the PV installations I referred to (and surmised on the psychology behind) were rural installations with storage. I can see the confusion since that followed a comment on urban PV uptake with feed-in: sorry about that.


  24. When factoring the true cost of a solar system you need to consider the cost of replacing the Inverter within the contract period and also hope you don’t suffer a lightning strike. After all you are contracted to the government and any failures of equipment are at your (full) cost.


  25. Barry Brook — Quite a good primer!

    You may wish to consider adding that thermal energy can only be stored for a few hours. For long term storage one can use the potential energy obtained bby pumped storage or via hydrocarbons such as biomethane or fossil fuels. Note that for very long term storage, refined fuels won’t do; those degenerate with age. Methane, butane and propane will not, I believe.


  26. David #37, you’re right, although technically, if your thermal conductivity/emissivity is low enough, you can retain heat for much longer than a few hours. Indeed, I’ve seen claims from the molten salt/graphite block engineers that these heat stores are able to hold a decent amount of heat energy for many days (perhaps weeks). But if you want to store energy for many weeks or months, then you have little recourse but to go for chemical storage or other mechanical forms (such as compressed air) with very low ambient losses.


  27. There are massive losses in Compressed Air Energy Storage (CAES) from heat lost during compression that has to be returned by some estimates the equivalent of 1 Watt must be added for every 3 Watts generated by a CAES system.

    While you are correct in saying that a molten salt heat reservoir can hold heat for a considerable length of time, this is not the case if heat is being drawn off to generate power,


  28. … molten salt/graphite block … heat stores are able to hold a decent amount of heat energy for many days (perhaps weeks) …

    Depending on their volume-to-surface ratio.

    But hot graphite tends to burn. Don’t assume an energy proposal makes any sense at all just because it gets attention from civil servants. As the major class of oil and gas rentier, in the race to outmode oil and gas, they have an interest in picking losers, and they’re not always subtle about it.

    I suspect if the graphite-block story were sensible, it would involve magnesium oxide blocks. These, or rather, blocks whose composition is mostly MgO, have long seen high-temperature service under the name firebrick. Somehow, graphite firebrick, despite being even more refractory than MgO, has not made inroads.

    (How fire can be domesticated)


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  34. The efficiency of solar panels or wind energy does matter, because land use is a major downside of renewables with low energy density. David MacKay estimates in _Sustainable Energy without the Hot Air_ that supplying the United States’ energy needs with solar power would require a solar farm roughly the area of Arizona! see
    So if solar panels became available that can use the energy from more wavelengths of light, like this:
    it makes solar power look better.


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