1. The Future of Energy CanSIA Western Solar Conference 2010 Calgary Alberta John MacDonald

2. Life Today 2 OUR PROSPERITY & QUALITY OF LIFE IS DEPENDENT ON THE READY AVAILABILITY OF ABUNDANT AFFORDABLE ENERGY. OUR GENERATION ENJOYS THE BEST QUALITY OF LIFE HUMANS HAVE EVER EXPERIENCED SINCE OUR SPECIES APPEARED ON THIS PLANET.

3. Energy Issues Security - Dependence on Foreign Energy Demand and Supply Environmental Concerns Climate Change Environmental Concerns Climate Change OBSERVATION Given a choice between protecting the environment and impact on their Pocketbook, the majority of people will opt for protecting their Pocketbook

4. Demand and Supply - A key Question When will the Demand for Energy exceed the Conventional Supply? The likely result will be Increases in the Price of Energy and Instability in that Price The timing of this is very uncertain but it will happen

5. Optimistic Supply Case Oil Gas Coal Biomass Nuclear Hydro Range of Demand Primary Energy Supply [ExaJoules/Yr] Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Year

6. Pessimistic Supply Case Oil Range of Demand Gas Coal Biomass Nuclear Hydro Primary Energy Supply [ExaJoules/Yr] Year Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Association for the Study of Peak Oil and Gas (ASPO)

7. Filling the Gap Oil Range of Demand Gas Coal Biomass Nuclear Hydro Primary Energy Supply [ExaJoules/Yr] Year Sources: International Energy Agency (IEA) Energy Information Agency (EIA) German Advisory Council on Global Change (WBGU) Association for the Study of Peak Oil and Gas (ASPO) What will fill the Gap??

8. Filling the Gap - 2 Solutions Increased use of Nuclear Energy Renewable Energy Sources Solar Wind Tidal Biofuel derived from biomass Geothermal Wave Small Hydro (Run of River) Large Hydro

9. Properties of Renewable Energy Secure A local energy source Environmentally Benign Inexhaustible But it is either intermittent or strongly location dependent or both

10. Primary Energy Supply [EJ/Y] 1,600 1,400 1,200 1,000 800 600 400 200 0 WBGU: German Advisory Council on Global Change YEAR 2000 2060 2070 2080 20902050 2010 2020 2030 2040 2100 Geothermal Other REs Solar heat Solar electricity Wind Biomass adv Nuclear PW Gas Coal Oil Biomass trad Hydro-PW Primary Energy Supply [EJ/Y] 1,600 1,400 1,200 1,000 800 600 400 200 0 2000 2010 2020 2030 20402050 YEAR WBGU: German Advisory Council on Global Change WBGU’s World Energy Vision to 2100

11. Shell – WBGU Comparison 11

12. “Grid Parity” – The Holy Grail What is “Grid Parity”? Equality of the renewable energy price per kilowatt-hour (kWh) with the currently accepted kWh price from the grid 12

13. Getting to “Grid Parity” Challenges Bridging the current cost differential Renewable energy incentives Generation of firm, dispatchable energy from renewable sources Creation of renewable energy dominated supply systems and subsystems Integration of renewables into existing energy systems and managing the transition 13

14. Getting to “Grid Parity” Solar Energy System Cost & kWh Price Fuel is free! – Enhances price stability Large up-front investment, amortized over a defined time period Kilowatt-hour price is driven by the cost of amortizing the capital investment combined with the cost of operation and maintenance. 14

15. Getting to “Grid Parity” - Technology The technology must: Maximize the number of kilowatt-hours generated annually per unit of capital invested. This is the key performance parameter Produce the rated power over the amortization period and beyond. Have low maintenance and operating costs.

16. Getting to “Grid Parity” Bridging the cost gap Incentives (that reduce to zero over time) Performance-based – Incentivizes performance improvement Capital rebate – Leads to commoditization – only price matters Tax-based Others 16

17. Performance-Based Incentives (Example: Feed-in-Tariff) Guarantees a stable price environment and a stable return on investment (~8%) for a stated period (typically 20 years) Attracts private capital into the process of realizing a mature renewable energy industry by creating a stable and realistic pricing environment. Motivates renewable energy companies to innovate and discover ways to improve the number of kWh per annum per unit of invested capital in order to remain competitive. (Performance counts) Is an investment in future energy price stability Reduces the time to reach grid parity. Money can be made doing all the right things to get there. 17

18. Achieving “Firm” Energy Delivery 18 Renewable Energy Sources are either intermittent or strongly location dependent or both. How can we create a system that can generate FIRM renewable power ANYWHERE?

19. Achieving “Firm” Energy Delivery Solar Wind Tidal Wave Small Hydro Intermittent Renewable Sources Big Hydro Biomass Geotherma l Firm Renewable Sources GRID CONTROL SYSTEM LOAD Large Scale Storage Fossil Fuel & Nuclear Blending Wind and Solar in Minnesota (example) Solar Wind 0 10 20 30 40 50 60 70 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

20. Renewables in the Mainstream Creating the Infrastructure This is a very large undertaking The structure will be very different from what we have today The design is highly location dependent It will require much innovation and creativity It will take much time Time that we may not have much of IT IS TIME WE TOOK MAINSTREAM RENEWABLE SYSTEM ARCHITECTURE SERIOUSLY 20

21. A Parting Thought on Architecture 21 Distributed Generation coupled with Distributed Storage??