Why waste heat is the problem and not CO2 – go long carbon price

In an attempt to preamble this post with qualifications on not being pro this or that, not anti this or that, an anarchist or muppet media cheerleader, I might try to convince you this is not a promotion of anything else but free thinking. But somewhere within that preamble you would form an expectation of what this post may (or may not) contain and you would end up disappointed in some way, shape or form. So f*ck it, I’ll save you the time and me the effort. You see I don’t care if the planet is getting hotter by 1 degree every 10 years. Why? Because there is nothing I can personally do about it if it is, except adapt myself and my family to it as it changes my life. Since supposedly intelligent and morally attached representatives are forcing this change onto me, I may as well have a say in how I deal with it.

Now that might sound like resignation to you, but the reality of life after $5Trillion in bailouts following the collusion and fraud of 2008 has woken me up to my own opinions. This is simply an extension of that realisation.

Intuitively, 380ppm (or more correctly 0.038%) of CO2 does not sound like a whole lot. In economic terms, 0.038% expressed as a growth rate of anything is pretty small. But it is not a rate of change, it is the measured value of CO2 in the atmosphere. I’ve tried to put thoughts on this previously with little success –
a) Commentary: On the hypocrisy over climate change
b) AGW and accurate global population distributions

The end result is truly the trade of the millennium – a one way sure thing. That is, go long carbon prices, and stay long. Pass the trade certificates onto your children and them onto theirs. It’s about the concept of ‘heat rate’ (thermal efficiency) and the reality that in the US in 2011, 63% of all the energy used to generate electricity was waste, and mostly as waste heat. Waste heat sources can be measured as kW(th) thermal, as equivalent references to other kW units of energy and power. But get the 63% number – that means greater than half of all energy converted as ignited/burnt/combusted was waste heat.

Some further background
You would understand the kilowatt unit ‘kW’ for your metered electricity, call this kWe (for kilowatts of electricity). When electricity is run through a filament light (typical incandescent bulb), almost all of this kWe is converted to heat through the resistance of the filament – it gets hot. The same for toasters, kettles, element stoves etc. The kilowatt hour (kWH) is the measure of 1 kilowatt run continuously for 1 hour.

Most simply, a 1000watt (1 kW(e)) bar heater running for 1 hour uses 1 kWH(e) producing 1 kW(th) thermal heat. Converting kW(e) back into kW(th) thermal produces heat you can feel with your hands at home, every day.

The verification data comes from the EIA’s latest US electricity summary data. The US EIA has recently published this graphical representation that virtually no-one would fully appreciate -http://www.eia.gov/totalenergy/data/annual/pdf/sec8_3.pdf

The graphic (with my markups below) showing the reality of the US electricity industry
(note: this is not a fossil fuel love/hate)

US EIA electricity generation - click image
– don’t let the green colour fool you, it’s from the EIA
– might not include secondary or tertiary heat recovery technologies
– most electricity conversion losses are at thermal power plants (as heat);
– metered electricity = net generation + T&D losses ; (transmission and distribution)
– approx 63% of all energy used for US electricity generation in 2011 wasn’t converted to electricity;
(very diplomatic of the EIA to say the least; some well chosen words)

So the 63% that “wasn’t converted to electricity” was what then? … and why would it be left shaded green? I have nothing against green per se, or monochromatic graphics. The thermal power plants would be coal, fuel oil, syngas, natural gas, bio fuels, bio mass and nuclear. 65.5% of the total energy used to generate electricity in the USA is fossil fuel derived. To be fair on the EIA data, waste heat recovery systems and cogen/trigen/CHP technologies are probably not included in the above stated conversion losses. At best, heat recovery technologies are still not very widespread and might lift the total average heat rate up a few percentage points – certainly would not lift the network heat rate higher than 50%.

The bottom line – the heat rate of the US electricity industry is a mere 37%. This is the residual (left over) output of kWe generation of the total energy needed to generate it. It means that thermal waste (as kW(th)) is almost DOUBLE this, but substantially more than all combined metered electricity generated in the US is wasted as heat.

BUT WAIT! This is a global phenomenon not restricted to borders of the US. You might argue the US would be a leading example of high efficiency power generation, without naming names. So using a heat rate of 37% for total global electricity production would not be unfair. Globally, 63% of all energy consumed to generate electricity is heating up the atmosphere. Again, the best case is slightly less wasted heat using heat recovery cogen/trigen/CHP technologies.

Thought experiment – imagine a heating element running 24hours 7 days (24/7/365) doing nothing but heating up the local area? This thermal waste heat element is equal to the total amount of electricity being generated and delivered to homes and factories 24/7/365.

For you own verification – a far better current statistical summary of global trends is from the iea.org

Alteratively World Energy Outlook 2012 (also from the iea)

IEA world statistics 2012 - click image
– critical to understand this increasing trend
– no indication or mention of efficiencies or heat rates
– no indication or mention of heat recovery technologies
– the heat rate of the global system is not likely to change appreciably on current (increasing) trends
– the heat rate (and waste heat) is greatly unaffected by any treatments targeting CO2 of existing/future generation units

Conclusion (the controversial bit)
I am hopeful that more intelligent people than I read this with direct experience in the climate argument. I don’t think the ICC reports acknowledge heat rate and the waste heat content as per above. Instead, they opt for the CO2 content of the waste, and not the enormous amounts of heat wasted in generating electricity around the world. Which is a gaping flaw in the AGW debate in my humble opinion. By my back of the envelope calculations, this heat alone (when adding it up globally) accounts for more immediate and measurable climate change than the contribution of 380ppm (0.038%) of CO2.

This previous article (link) has a more estimates for global heat rates including motor vehicles. It is a much larger problem globally.

Directing environmental policy towards addressing this glaring oversight on efficiencies and waste heat (and NOT C02) would be an impossible mission. I cannot get myself past CO2 being the lesser of 2 evils and a massive financial opportunity for those who stand to benefit from trading CO2. Far worse would be that addressing CO2 fails to do anything at all to reverse the temperature trends – this would be a human travesty of epic proportions should the environmental conditions worsen as predicted.

Food for thought while everyone is hell bent on solving the Al Gore CO2 problem. If Al had used this argument while on the scissor lift to heaven artificially scaled J-curve CO2 chart, I might have listened to his whole argument. While the current CO2 policies will have an impact to reduce the gross levels of waste heat above, it won’t be significant simply because it is not the focus. Yes, cogen/trigen/CHP plants offer a partial solution – you are not going to know how much until it’s too late, or the carbon price is $2500/ton – whichever occurs sooner. Certainly less of an impact in developing/emerging markets, even if they use CO2 scrubbers. The reality is that only those few people who read this, or something similar to it will even be aware of a larger issue going unaddressed, much less understand it.

Regards, … and try to stay cool for fellow southern hemisphereans, it’s gonna get warm out there!

p.s. the above is limited to just electricity generation heat rates. My previous (un)controversial article estimated a much bigger heating problem. Long carbon prices – it really is the trade of the millennium if this is how they think they are going to solve it.


About atradersrant

Self-employed private trader of equities, commodities and FX for income and investment; Follow me at your own risk! I provide analysis of major market & economic trends .. with too much commentary on fraud and corruption that is rife in the open market.
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One Response to Why waste heat is the problem and not CO2 – go long carbon price

  1. Pingback: What in the World is Waste Heat Recovery? | Tres Llamas

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