Energy economics and rocket science with Casey Handmer

https://www.complexsystemspodcast.com/episodes/solar-economics/

by vikrum • 2 years ago

63 42 2 years ago

wesleyd• 2 years ago

Listened to this yesterday. Super enjoyable. Made the point that electricity in the future will be consumed much closer geographically to where it is generated than today - and so we probably don’t need huge interconnects - but much less close in time (because batteries).

pfdietz2• 2 years ago

This has considerable geopolitical implications. Fossil fuels are very mobile, so one can be flexible in siting energy-intensive industries.

But in a solar world, heavy industry will be at those places with the best solar resource. If you live in a renewable energy armpit, like say the eastern parts of Europe, your heavy industry is out of luck.

ragebol• 2 years ago

renewable energy armpit

armpit? What is that supposed to mean exactly? (I consider myself a near native English speaker...) A bad place to be in I suppose, but never heard this phasing.

aesch• 2 years ago

Casey Handmer's company is creating synthetic hydrocarbons from renewable energy. Here is a good video where he gives a tour of the company and talks about its goals: https://www.youtube.com/watch?v=NngCHTImH1g.

Curious what people think about the idea of synthetic hydrocarbons? It is a seemingly obvious idea that I hadn't heard about until recently, as long as you can use energy efficiently to create the synthetic hydrocarbons.

churchill4• 2 years ago

Synthetic hydrocarbons will likely fail, simply because of the same reasons vertical farming failed. Once you're spending money on infrastructure to capture solar energy, losing 80% to inefficiency, before piping into your vertical farm via LEDs (losing another 50% to 80%), a farmer who draws free sunshine will outcompete you because he's using free energy while you're spending millions to power a small factory sized farm; energy isn't free.

Likewise, Casey's idea (Terraform Industries) requires solar energy to convert air and water to natural gas. It'll cost 10x the price of the gas Qatar & Saudi Arabia pump out of the ground essentially for free. These technologies won't be viable until humanity is pressed harder and prices (for food or fuel) climb.

schiffern2• 2 years ago

Inevitably the solution to the anti-profitability of running (essentially) a gas power plant in reverse is government subsidies. Amazing how otherwise "efficient market" folks can forget market wisdom the moment big change is needed in big industries.

The touted advantage is that instead of market-driven electrification of multiple sectors you only need one big silver bullet technology, however these are futile systems that actually reduce the total amount of energy available to society (vs electrification which does the opposite). And since the pricing signals are messed up by subsidies you can't invest in the economically optimal amount of energy efficiency. This is precisely the opposite of the sort of activity we might want to subsidize.

Handmer has some great writing on space subjects, but on this we're going to disagree.

d_burfoot• 2 years ago

The analogy to vertical farming is a tempting one, but ultimately misleading. There is a crucial difference between TI-produced natural gas and Saudi-produced gas: the former is carbon neutral, the latter isn't.

For every molecule of CH4 TI creates, they're pulling a molecule of C02 out of the atmosphere to do it. When you burn a CH4 molecule from a Saudi well, you're moving carbon from the ground into the atmosphere.

DoctorOetker• 2 years ago

You seem very confident in your position, and I am reminded of the confidence of people exclaiming solar power would never take off back when commercially available PV efficiencies were in the single digit percentages. Going from 8% to 24% effectively tripled PV panel output on a per area basis, even though it sounds like just a 16% increase.

Given your confidence, I assume you are aware of efficiency bottlenecks and their associated fundamental thermodynamic limits.

What do you believe is the bottleneck, and what thermodynamic principle limits it?

At renewable farm scale everyone has read about negative pricing etc, so it seems there will always be a niche to profit from.

How can you predict in advance the capex investment cost in advance of future developments?

Pumping up fossil fuel certainly comes with costs (even when excluding moral and future costs), think of employees, securing facilities against attack, etc.

Given Western divestment from Russian fossil fuels, on non-economic grounds, why couldn't we similarly some day divest from fossil fuels?

It'll cost 10x the price of the gas Qatar & Saudi Arabia pump out of the ground essentially for free.

What a bizarre statement, 10x 0 = 0.

If you want to educate people how you believe electroreduction of CO2 to be a dead end, please give scientific and economic evidence that renewable fuels could never become cheaper than sourcing and or distributing fossil fuels.

Veserv2• 2 years ago

Their thesis is probably that solar electricity will soon be (as an example) 1/10th the price of natural gas electricity and that they believe they can get 10-30% storage/conversion efficiency. Therefore, the price of synthetic natural gas will be cheaper than current natural gas.

There are a number of acknowledged assumptions in that model and other potential problems that may make their thesis incorrect, but you have raised none of them so far nor directly refuted the thesis.

wrsh073• 2 years ago

"will likely fail" is a surprising claim when it's not clear to me that vertical farming won't still have a chance to succeed

For vertical farming, the question at the limit shouldn't be comparing solar and a farmer directly using sun, it should be: can we vertical farm on land that was unsuitable for farming? Is the cost of land increasing while the cost of solar decreases?

Retric• 2 years ago

The problem with synthetic hydrocarbons isn’t energy abstractly its capital vs energy costs. The more hours per month of electricity you want the more you end up paying on a per kWh basis.

So if you’re fine turning all the equipment off most the of time you can get really cheap power, but having a 1 billion dollar facility including its workforce doing nothing 70% of the time is expensive. On the flip side if you want 24/7 operation you end up with much higher per kWh rates.

amelius• 2 years ago

having a 1 billion dollar facility including its workforce doing nothing 70% of the time is expensive

We work normally only about 33% of a day.

sien2• 2 years ago

There are a few companies doing it.

Prometheus Fuels is another, they have been on HN previously :

https://news.ycombinator.com/item?id=31264388

They have a cool website :

https://prometheusfuels.com/

There are some companies that want to use nuclear power , Valar Atomics is one :

https://www.valaratomics.com/

The cost estimates seem to be 4-10 times as expensive as fossil fuels.

sn92• 2 years ago

The cost estimates seem to be 4-10 times as expensive as fossil fuels.

Importantly, this cost is expected to decrease precipitously as the cost of solar energy declines exponentially and as the the conversion technology continues to improve through iteration and economies of scale.

wrsh073• 2 years ago

One of the most exciting things not really mentioned elsewhere in the thread (as far as I see!) is that you can make synthetic hydro carbons wherever you want.

If you wanted to have a refueling airport in the middle of the ocean, you could put up a bunch of renewable energy generation (expensive!), use that energy to produce jet fuel (this handwaves a lot / might not be feasible as stated), sell jet fuel that you haven't had to transport

Similarly, while our global logistics are incredible, some of the cost of oil etc is that we need good systems for transporting it (pipelines, ships). Instead, imagine producing it on location.

Finally, my favorite model for new technologies (not really useful if you believe the Weinersmith "A city on Mars" thesis) is: will this technology be useful on Mars or the moon?

Eg Hyperloop makes much more sense if you already are operating in a vacuum

From that lens, I think technology like this is pretty useful to create.

mataslauzadis• 2 years ago

Casey is awesome!!!

dredmorbius• 2 years ago

For those prefering a direct audio link:

<https://chrt.fm/track/993DGA/media.transistor.fm/bec9beab/c9...> (MP3)

yobbo• 2 years ago

Around 10 minutes in, they discuss why the price/unit of aircraft fell between "kitty hawk and WW2", whereas it has increased exponentially since then.

The actual answer to this is "target" monetary inflation. That is, increasing the money supply at a slightly faster rate than the increase in productivity makes prices rise at a fixed pace.

Energy economics and rocket science with Casey Handmer

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