Evolution of environmental awareness

Humans have always changed their surroundings. Some of those changes we no longer even recognize—for example, the clearing of forests to create Europe’s agricultural farmlands. No one now sees these fields as forests that once were. Similar changes elsewhere are more obviously detrimental to local or global conditions. Tropical rain forests grow in the poorest of soils. Clear them and the ground is of very little use. Not only that but the removal of forest cover can lead to erosion and flooding, as well as the loss of ground water. Most of these effects are negative.

Part of the problem is the ever-increasing size of the human population. Where native tribes could survive in the rain forests in Brazil, the encroachment of outsiders has led to their erosion. A similar effect is at work in power generation. When the demand for electricity was limited, the effect of the few power stations needed to supply that demand was small. But as demand has risen, so has the cumulative effect. Today that effect is of such a magnitude that it cannot be ignored.

Consumption of fossil fuels is the prime example. Consumption of coal has grown steadily since the Industrial Revolution. The first sign of trouble resulting from this practice was the ever-worsening pollution in some major cities. In London the word “smog” was invented at the beginning of the 20th century to describe the terrible clouds of fog and smoke that could remain for days. Yet it was only in the 1950s that legislation was finally introduced to control the burning of coal in the U.K. capital.

Consumption of coal still increased, but with the use of smokeless fuel in cities and tall stacks outside, problems associated with its combustion appeared to have been solved. Until, that is, it was discovered that forests in parts of northern Europe and North America were dying and lakes were becoming lifeless. During the 1980s the cause was identified: acid rain resulting from coal combustion. More legislation, aimed at controlling the emissions of acidic gases such as sulfur dioxide and nitrogen oxide, was introduced.

Acid rain was dangerous but worse was to come. By the end of the 1980s scientists began to fear that the temperature on the surface of the Earth was gradually rising. This has the potential to change conditions everywhere. Was this a natural change or human-made? Scientists did not know.

As studies continued, evidence suggested that the effect was, in part at least, human-made. The rise in temperature followed a rise in the concentration of some gases in the atmosphere. Chief among these was carbon dioxide. One of the main sources of extra carbon dioxide was the combustion of fossil fuels such as coal.

If this is indeed the culprit, and the weight of evidence available makes it prudent to assume that it is, then consumption of fossil fuels must fall or measures must be introduced to remove and secure the carbon dioxide produced. Otherwise, the global temperature is likely to rise to a level that could cause disruption and destruction in many parts of the world. In the worst case it is possible to imagine some catastrophic change to global conditions. It has now become one of the main challenges for governments all over the world to reduce the amount of carbon dioxide being released into the atmosphere without crippling their economies.

The way in which fossil fuels are used in power generation is gradually changing as a result of these discoveries and the legislation that has accompanied them. Other technologies also face challenges. Nuclear power is considered by some to be as threatening as fossil fuel combustion, though it has its advocates too. Hydropower has attracted bad publicity in recent years but should still have an important part to play in future power generation. Meanwhile, there are individuals and groups prepared to go to almost any lengths to prevent the construction of wind farms, which they consider unsightly, and objections to solar power plants have started to be heard.

At the same time, electricity is vital to modern living. Therefore, unless the world is going to regress, technically, the supply of electricity must continue and grow. On that basis, compromises must be sought and technical solutions found that do not result in irrevocable damage. These are the challenges that the power industry faces, and with it the world.

Environmental effects of power generation

Much human activity has an effect on the environment and, as already outlined, power generation is no exception. Some of these effects are more serious than others. The atmospheric pollution resulting from coal, oil, and gas combustion has had obvious effects. But combustion of fossil fuel also releases a significant amount of heat into the environment, mostly as a result of the inefficiency of the energy conversion process. Is this a serious side effect? In most cases, it probably is not.

Power stations have a physical presence in the environment. Some people will consider this a visual intrusion. Most make noises, another source of irritation. There are electromagnetic fields associated with the passage of alternating currents through power cables. A power plant needs maintaining, servicing, and often to be provided with fuel, which will generate road or rail traffic. All of these factors will have an impact on people living within the vicinity of a facility even if they do not affect a wider area.

Clearly, some of these effects are more far-reaching than others. Even if they are not far-reaching, the local effects of a power station may be a significant issue for a population that lives immediately adjacent to the facility. Deciding what weight must be given to such considerations when planning future generating capacity can be a fearsomely difficult issue. It is the big issues, however, particularly global warming, that will have the most significant effect on the future of power generation.

Carbon cycle and atmospheric warming

The combustion of fossil fuels such as coal, oil, and natural gas releases significant quantities of carbon dioxide into the atmosphere. These fuels were created from organic material growing on Earth’s surface that became buried, locking the carbon they contained within the body of the planet. Since the Industrial Revolution the use of these fuels has accelerated. The consequence appears to have been a gradual but accelerating increase in the concentration of carbon dioxide within Earth’s atmosphere.

Before the Industrial Revolution the concentration of carbon dioxide in the Earth’s atmosphere was around 270–280 parts per million (ppm). Between 1700 and 1900 there was a gradual increase in atmospheric concentrations but from 1900 onwards, the concentration changed more rapidly, as shown in Table 2.1. From 1900 to 1940 atmospheric carbon dioxide increased by around 10 ppm, from 1940 to 1980 it increased by 32 ppm, and by 2000 it had increased by a further 30 ppm. In 2010 the concentration was 21 ppm higher than in 2000. By then the total concentration was 390 ppm, around 40% higher than in 1700.

If the increase in carbon dioxide concentration is a direct result of the combustion of fossil fuels, then it will continue to rise until that combustion is curbed. Estimates of future concentrations are at best speculative, but Table 2.1 includes a range of estimates for both 2050 and 2100. The worst case in the table shows concentrations doubling in 100 years.

While the increase in carbon dioxide concentration is clear and continuous, the increase in global temperature is more variable. The evidence for a fossil fuel connection with the increase in concentration of carbon dioxide is compelling, but the cycling of carbon among the atmosphere, sea, and biosphere is so complex that it is impossible to be certain how significant the human-made changes are, or what other factors may be involved.

The atmospheric emissions of carbon from human activities such as the combustion of coal, oil, and natural gas amounted to a total of around 8.6 Gtonnes in 2012. While this is an enormous figure, it is tiny compared to the total carbon content of 750 Gtonnes in the atmosphere. This atmospheric carbon is part of the global carbon cycle. There are roughly 2200 Gtonnes of carbon contained in vegetation, soil, and other organic material on Earth’s surface, 1000 Gtonnes in the ocean surfaces, and 38,000 Gtonnes in the deep oceans.

The carbon in the atmosphere, primarily in the form of carbon dioxide, is not static. Plants absorb atmospheric carbon dioxide during photosynthesis, using the carbon as a building block for new molecules. Plant and animal respiration, on the other hand, part of a natural process of converting fuel into energy, releases carbon dioxide to the atmosphere. As a result there are probably around 60 Gtonnes of carbon cycled between vegetation and the atmosphere each year, while an additional 100 Gtonnes are cycled between the oceans and the atmosphere by a process of release and reabsorption. Thus, the cycling of carbon between the atmosphere and Earth’s surface is a complex exchange into which the human contribution from fossil fuel combustion is small.

The actual significance of the additional release of carbon dioxide resulting from human activity depends on the interpretation of various scientific observations. The most serious of these relate to a slow increase in temperature at Earth’s surface. This has been attributed to the greenhouse effect, whereby carbon dioxide and other gases in the atmosphere allow the sun’s radiation to penetrate the atmosphere but prevent heat leaving, in effect acting as a global insulator.

If human activity is responsible for global warming, then unless carbon dioxide emissions are controlled and eventually reduced, the temperature rise will continue and probably accelerate. This will lead to a number of major changes to conditions around the globe. The polar ice caps and glaciers will melt, leading to rises in sea level, which will inundate many low-lying areas of land. Climate conditions will change. Plants will grow more quickly in a carbon dioxide–rich atmosphere.

Not all scientists agree that changes in our practices can control the global changes. There have been large changes in atmospheric carbon dioxide concentrations in the past, and large temperature swings. It remains plausible, though unlikely given the weight of evidence now available, that both carbon dioxide concentration changes and global temperature changes are part of a natural cycle and that the human contribution has little influence.

In the second decade of the 21st century the weight of the scientific evidence suggests a strong link between human release of carbon dioxide and global warming, but it may be impossible to find absolutely conclusive proof. Unfortunately, the nature of scientific inquiry will always leave open the possibility, however remote, of an alternative interpretation. But in the meantime conditions will continue to change. And if human activity is responsible, the change may eventually become irreversible.

Even if a link between an increase in carbon dioxide concentration and the rising global temperature cannot be made with absolute certainty, it is clear that combustion of fossil fuel is creating more carbon dioxide than would naturally have entered the atmosphere. This fact itself provides a powerful reason to act to slow and eventually reverse the release of the gas. However, there are also economic considerations and these are generally not in favor of any rapid adjustment. How the competing demands are balanced is likely to determine the fate of the globe.

Controlling carbon dioxide

Fossil fuels are all derived from trees and vegetation that grew millions of years ago and subsequently became buried beneath the surface of the earth. Without man’s intervention the carbon contained in these materials would have remained buried and removed from the carbon cycle. As a result of human activity they have been returned to the carbon cycle.

An immediate cessation of all combustion of fossil fuel would stabilize the situation. That is currently impossible. Too much global economic activity depends on burning coal and gas. As the figures in Table 1.2 showed, predictions suggest that the use of fossil fuels, particularly coal, will increase over the next decades, not decrease. The popular strategy in some regions of switching fuel from coal to gas reduces the amount of carbon dioxide generated but does not eliminate it.

One short-term measure would be to capture the carbon dioxide produced by a combustion power station and store, or sequester, it in a way that would prevent it from ever entering the atmosphere. Technologies exist that are capable of capturing the carbon dioxide from the flue gas of a power plant, and these are being developed for commercial deployment. Finding somewhere to store it poses a more difficult problem.

One solution is to pump it into exhausted oil and gas fields. There are other underground strata in which it might be stored. A third possibility is to store it at the bottom of the world’s oceans. The enormous pressures found there would solidify the gas and the solid would remain isolated unless disturbed. Whether this would be environmentally acceptable is another matter.

These solutions are all expensive and none is particularly attractive. However, they may become necessary as short-term solutions. Over the longer term the replacement of fossil fuels with either renewable technologies that do not rely on combustion or with biomass-generated fuel that releases carbon dioxide when burned but absorbs it again when it is regrown, will be necessary if conditions are to be stabilized. That appears likely to take most of the coming century, at least.

Hydrogen economy

A switch to sustainable renewable technologies would appear to offer a practical means to control power plant emissions of carbon dioxide, but it will not solve all global problems associated with fossil fuel. What about all the other uses, particularly for automotive power? A more radical solution might be to switch from an economy based on fossil fuel to one based on hydrogen.

Fossil fuels, particularly oil and gas, have become a lynch pin of the global economy because they are so versatile. The fuels are easily stored and transported from one location to another. They can be used in many different ways, too: power stations, internal combustion engines, cookers, refrigerators—all these and more can be powered will one of these fuels.

Renewable electricity sources such as hydropower, solar power, wind power, and biomass can replace fossil fuel in power generation but they cannot easily be adapted to meet all the other uses to which fossil fuel is put. The most salient of these is transportation. One solution that is being followed by vehicle manufacturers is to build electric vehicles that have batteries to provide their energy source. These batteries must then be recharged regularly from the grid, perhaps using renewably generated electricity. This is one vision of a fossil fuel–free future.

Hydrogen offers an alternative. Instead of a battery, a vehicle can carry a supply of hydrogen that it can burn in a conventional reciprocating engine to provide power. Alternatively, the hydrogen can be used to provide energy for a fuel cell that will generate electricity from it. This then provides convergence with battery-powered vehicles.

Hydrogen has the immense advantage that it can replace fossil fuels not just in vehicles but in virtually all applications. Not only can it be used to power an internal combustion engine, but it can be burned to provide heating or cooling. Conventional fossil fuel power plants can burn it to generate electricity. Moreover, it can be stored and transported with relative ease. And it is clean. When it is burned, the only product of its combustion is water.

Where would the hydrogen for a hydrogen economy be found? The primary source would be water, and the best way of making it would be by use of electrolysis. Renewable energy power plants would generate electricity and the electricity would be used to turn water into hydrogen and oxygen. The hydrogen would be captured and stored for future use.

This may seem like an expensive and inefficient method of generating fuel. It is, although scientists are working hard to improve the efficiency. For a hydrogen economy to work today electricity from renewable sources needs to become much cheaper—cheaper probably than all but the cheapest electricity today. Even so, it offers a vision for the future in which life continues in much the same way as it does today. That can be seductive.

Economics of electricity production

What, exactly, is the cost of a unit of electricity today? That is not an easy question to answer. In basic economic terms the cost depends on the cost of the power station—how much it costs to build (this figure should include the cost of any loans needed to finance the construction and this can end up being one of the main contributors to the final cost of the electricity)—the cost of operating and maintaining it over its lifetime, which is typically 30 years for a combustion plant; and the cost of fuel. If all these numbers are added up and divided by the number of units of electricity the plant produces over its lifetime, then this is the basic unit cost of electricity. In most cases there will then be an addition to cover either profits if the plant is owned by the private sector or for future investment if the plant is publicly owned, to arrive at the cost to the consumer of the power.

With some adjustment for the change in the value of money over the lifetime of the plant, this calculation results in a figure called the levelized cost of electricity (LCOE) for a particular plant or technology, a figure that is often used to compare the value of different types of power plants.

The LCOE calculation is theoretical. It is impossible to know in advance exactly how a power plant will perform economically, because future conditions and costs are impossible to obtain in advance. On the other hand, anybody building a facility will want to know if it is going to be economical before actually constructing it. To get around this problem, guesses have to be made about the future performance and costs over its lifetime. Assumptions must also be made about some economic factors that take account of the changing value of money. These add a great deal of uncertainty to the result but the basic equation remains the same.

When this calculation is carried out for a range of different types of generating plants, the cheapest new source of electricity in many developed regions of the world will prove to be a natural gas–fired combined-cycle power plant. This type of plant is cheap, quick to build, and relatively easy to maintain. Capital cost of construction is low but the fuel price is relatively high, so for a plant of this type the cost of fuel is the most significant determinant of electricity prices. While gas is cheap, so is electricity. However, when gas prices rise, the plant can rapidly become uneconomical compared to other sources.

Gas prices have a history of volatility and this adds an element of risk when calculating the cost of electricity from a plant of this type. Other power stations, particularly those that use renewable energy where the energy source (the fuel) is free, are not exposed to this volatility. So while the cost of electricity from a plant of this type may be on average more expensive, it is also more stable. This is being recognized as a significant factor when evaluating the economic viability of new sources of electric power.

Externalities

Risk and prices volatility aside, does the basic economic equation described before take account of all the factors involved in generating electricity? There is a growing body of opinion that says no. It says that there are other very important factors that need to be taken into account too. These are generally factors such as the effect of power production on the environment and on human health, factors that society pays for but not the electricity producer or consumer directly. These factors are called externalities.

A major study carried out by the European Union (EU) with support from the United States over a decade in the 1990s estimated that the cost of these externalities within the EU, excluding the cost of global warming, were equivalent to between 1% and 2% of EU gross domestic product.

The cost of electricity in the EU in 2001, when the report of the study was published, was around €40/MWh. External costs for a variety of traditional and renewable energy technologies as determined by the study are shown in Table 2.2. Actual external costs vary from country to country and the table shows the best and worst figures across all countries. These figures indicate that coal combustion costs at least an additional €20/MWh on top of the €40/MWh paid by the consumer, and could cost as much as an additional €150/MWh. Gas-fired generation costs at least an additional €10/MWh, while the external costs for nuclear and most renewable technologies were a fraction of this.

If consumers were forced to pay these external costs—by the imposition by governments of some form of surcharge, for example—the balance in the basic equation to determine the cost of electricity would shift in favor of all the noncombustion technologies. Of course, such a move would initially penalize consumers because a high proportion of the world’s electricity comes from fossil fuel and the capacity cannot be replaced overnight. It would not suit fossil fuel producers either and it would drive up manufacturing prices, initially at least, affecting global economics. Over the long term, however, if the analysis is correct, everyone would benefit.

Life-cycle assessment

Another important tool for establishing the relative performance of power generation technologies is a life-cycle assessment. The aim of a life-cycle assessment is to measure the performance of a power plant with reference to one or more parameters, such as its emissions of carbon dioxide or the energy efficiency of its power generation. The assessment covers the complete life cycle of the plant starting from the manufacture of the components that were used to construct it and ending with its decommissioning.

The LCOE calculation discussed earlier is a type of life-cycle assessment of the economic performance of a power station. If one were instead examining the lifetime amount of carbon dioxide produced by a fossil fuel–fired power plant, one would examine not only the amount produced by burning the fuel in the plant, but also that produced when electricity or some other form of energy was used to manufacture the components used to build the plant, and any produced when the plant was dismantled and recycled. All these quantities can then be added up and divided by the amount of electricity the plant generates to provide a figure for the amount of carbon dioxide for each unit of power.

When carbon dioxide emissions are studied figures show, as would be expected, that coal-, gas-, and oil-fired power plants release massively more carbon dioxide for each unit of electricity they produce than do most renewable technologies. Typical figures are given in Table 2.3. Similar results are found for other common combustion plant emissions such as sulfur dioxide, carbon monoxide, and nitrogen oxide.

There are other types of life-cycle assessment that can be carried out. Another of relevance to power plant performance is the total energy balance of a plant. This involves a calculation of the number of units of energy a power station produces for each unit of energy it consumes over its lifetime. Energy is used to manufacture components for a power plant. For a fossil fuel plant, energy is used to harvest and deliver the combustion fuel to a power plant. The fuel itself contains energy that is consumed. And energy is consumed during the decommissioning of a power plant. All these units of energy must be added together and then divided by the total number of units of energy the power station delivers.

When the energy content of the fuel is included in the calculation, renewable generating technologies often appear as relatively poor performers. This is because while a thermal power plant can convert between 45% and 60% of the energy in its fuel into electricity, a wind turbine will generally struggle to convert more than 40% of the wind energy into electrical energy and a solar plant typically less than 20%. On the other hand, while these renewable efficiencies are relatively low, the energy that is not converted is not wasted—it simply isn’t used. The energy from a combustion fuel that is not converted into electricity is released as waste heat.

A more useful comparison can be made by excluding the actual energy content of the energy source. One set of energy payback ratios calculated on this basis is shown in Table 2.4. The figures in the table confirm that when the energy source is excluded most renewable technologies score more highly than fossil fuel power plants on this measure, though the manufacture of solar cells is relatively energy intensive, making the energy payback ratio for this technology low. Some newer solar photovoltaic fabrication technologies will have better energy payback ratios than shown in Table 2.4, which is based on silicon solar cells. Biomass scores similarly to coal- and gas-fired power plants on this measure because the power plant technologies are relatively similar. Hydropower, wind power, and nuclear power are the best-performing technologies based on these figures.

The bottom line

Most environmental assessments of power generation indicate that there are benefits to be gained in shifting from reliance on fossil fuels to other, primarily renewable, forms of generation. In most cases, however, the determining factor remains cost. Indeed cost has become more decisive over the last 20 years as the control over the power generation industry has shifted, in many parts of the world, from the public sector to the private sector.

The private sector requires short-term return on investment. This favors technologies that are cheap to build because loans for construction are small and can be repaid quickly. Most renewable technologies are capital intensive. The generating plant costs a lot to build but very little to run because the fuel (e.g., wind, sunlight, or water) is usually free. These plants are more cost effective over the long term, probably 20 years or longer, but less so over a shorter term.

Governments cannot direct the private sector but they can influence the industry with legislation, surcharges, and incentives. Such governmental tools are being used with some effect. Financial institutions are also beginning to heed the shift in consensus. In June 2003 a group of commercial banks agreed to a set of guidelines called the “Equator Principles,” which are intended to provide a framework for assessing the social and environmental issues associated with a project seeking a loan. These guidelines are voluntary but potentially significant.

A shift away from fossil fuels will have a profound effect on the whole power generation industry. Not only generation but transmission and distribution management and structure will be affected. The change will, initially at least, be expensive. As a result, change will come slowly. What does appear clear in the second decade of the 21st century is that the change will come.