MitchJi
Trying to learn kindness, patience & forgiveness
Even more disgraceful is our use of depleted uranium shells to take out tanks during the war. Childhood (and adult) cancer rates went up as a result.
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I happen to see both these articles the same day:
Economist article about the disruptions in the energy market from Renewables:
http://www.economist.com/news/brief...ury-old-model-providing-electricity-what-will
and an article about how we may need to go to H2 FCEV since electricity prices will get so high due to demand from BEVs.
Peter Nowak: Despite what Elon Musk says, don’t count hydrogen fuel cells out just yet | The National
Quote:
Speaking on stage at the World Government Summit in Dubai last week, Mr Musk mused about the effect that electric batteries, such as those produced for cars and homes by his company Tesla, will have on energy demand.
Total global energy usage is divided evenly between electricity, transport and home heating, he said, but that’s about to change dramatically now that battery-driven vehicles are about to break out.
"Over time, that will transition to predominantly electricity. The demand for electricity will probably triple," Mr Musk told the audience.
Author concludes:
Hydrogen fuel cells may be less efficient and more expensive than electric batteries right now, but this could change. Everyone involved in making fuel cells is working to make them cheaper.
If they succeed, and if electricity costs do spike up, they may ultimately provide a reasonable alternative to battery-orientated energy, even if they can’t achieve efficiency parity.
End quote.
Guess he hasn't read the Economist article.
Economist article about the disruptions in the energy market from Renewables:
http://www.economist.com/news/brief...ury-old-model-providing-electricity-what-will
and an article about how we may need to go to H2 FCEV since electricity prices will get so high due to demand from BEVs.
Peter Nowak: Despite what Elon Musk says, don’t count hydrogen fuel cells out just yet | The National
Quote:
Speaking on stage at the World Government Summit in Dubai last week, Mr Musk mused about the effect that electric batteries, such as those produced for cars and homes by his company Tesla, will have on energy demand.
Total global energy usage is divided evenly between electricity, transport and home heating, he said, but that’s about to change dramatically now that battery-driven vehicles are about to break out.
"Over time, that will transition to predominantly electricity. The demand for electricity will probably triple," Mr Musk told the audience.
Author concludes:
Hydrogen fuel cells may be less efficient and more expensive than electric batteries right now, but this could change. Everyone involved in making fuel cells is working to make them cheaper.
If they succeed, and if electricity costs do spike up, they may ultimately provide a reasonable alternative to battery-orientated energy, even if they can’t achieve efficiency parity.
End quote.
Guess he hasn't read the Economist article.
So much hinges on where the cost of batteries goes. Do the math and it's clear why Tesla's targeting batteries for $100/kWh. It's a price point where renewable electricity plus battery would beat Clean Coal, conventional natural gas and conventional oil. In the USA, where natural gas is cheap CCGT + battery could be dominant. Even with historically low prices, wind and PV prices are expected to fall _another_ 15-20%. At $100/kWh battery systems would become economical enough that they could sell en masse to residential and commercial consumers by being both a back-up system and allowing cheaper electricity through _production_ response rather than demand response.
Estonia To Finance 1,000 Megawatt Offshore Wind Farm At Hiiumaa
Talk about energy independence...way to go, Estonia!
Talk about energy independence...way to go, Estonia!
TheTalkingMule
Distributed Energy Enthusiast
So when does $100/kWh home battery become reality? It always seems to be "9-18 month away". At what point am I going to be able to buy a $2,000 20kWh battery at retail from Tesla Energy?
TheTalkingMule
Distributed Energy Enthusiast
Exactly, Russia (and former USSR) has weaponized gas and oil far too long. The proper response is to deploy renewable energy, batteries and EVs. Remember that Lithuania wants a Gigafactory and lots of EVs. It's not just about energy and jobs.
MitchJi
Trying to learn kindness, patience & forgiveness
But Elon also said that the energy required to generate electricity can be reduced by about half with sufficient storage. Very soon renewables plus storage will be the least expensive way to do that. That at least changes the timeline, even without factoring in V2G.
I think the basic issue here is the distinction between primary energy and final energy. Primary energy is the thermal content of fuels, while final energy is the useable energy that the consumer uses. So about 2/3 of primary energy used to make electricity is lost as waste heat in the generation process, and then there are other transmission losses along the way to the consumer. The primary energy going into wind and solar are not really valued as such. Nobody worries about all this sunlight that is wasted everywhere. Rather the energy produced by these renewable is primary energy. That is, a kWh of electricity is about 3412 BTU of energy. Sometimes analysts will give this a primary energy offset that is about 3 times this. But this is simply to understand how much fuel is being offset, not consumed in the process of generation.
So if you look at the energy supply being reduced to so many TWh of production, the amount of primary energy used can be reduced by about 2/3 and still the supply of useable TWh remains the same. So it becomes a bit tricky to talk about electricity production tripling as the whole energy market become electrified. This is true if you measure primary energy as fuel offsets, but not true if one is talking about final energy. It's the difference between thinking of energy primarily as heat (BTU) or as electricity (kWh). The world will need much few BTUs as renewables and batteries optimize useable kWh.
I suspect that al-Naimi had understood that it was just a matter of time until solar and batteries would displace oil. He wanted simply to allow market forces to work in the oil market with no limit to production.
Next Oil Rally? Futures Say Market Is Tightening | OilPrice.com
I think the author's interpretation of the futures curve is wrong. The future curve is going into backwardation because the back end of the futures curve is declining, not because the front end is climbing. If the market were tightening, then the front end would be increasing faster than the back end. But when the back end is declining faster than the front end, this is the expectation that supply is increasing in the future. The glut will persist.
I think the author's interpretation of the futures curve is wrong. The future curve is going into backwardation because the back end of the futures curve is declining, not because the front end is climbing. If the market were tightening, then the front end would be increasing faster than the back end. But when the back end is declining faster than the front end, this is the expectation that supply is increasing in the future. The glut will persist.
Investors See Oil Break Out of Narrow Range With Record Bets
This article covers the competing views of net-long hedge funds and net-short oil producers. I suspect that hedges are pushing up futures that are 6 to 12 months out, while producers are pulling down futures that are 1 to 6 years out. Hedgies are propping up the spot price by holding inventory of the market. They do this on expectation that OPEC oil freeze will work. This could unravel very quickly if anything should compromise this expectation.
This article covers the competing views of net-long hedge funds and net-short oil producers. I suspect that hedges are pushing up futures that are 6 to 12 months out, while producers are pulling down futures that are 1 to 6 years out. Hedgies are propping up the spot price by holding inventory of the market. They do this on expectation that OPEC oil freeze will work. This could unravel very quickly if anything should compromise this expectation.
Jonathan Hewitt
Active Member
I forgot to mention that hedge funds are pretty nimble with influencing the media, while oil producers have nothing to gain by talking down the market. So media is likely tilted toward oil hype.
adiggs
Well-Known Member
I think the author was over-reliant on a particular piece of data - drawdown in crude storage from oil tankers (floating storage). As the author points out, that's the most expensive storage available, and your storage of last resort when you can't find on-land storage (at less money) for a contango trade.
I think a different interpretation, consistent with @jhm's explanation, is that traders that own oil on oil tankers are selling out of those positions / unloading tankers because they can see that the contango that made it profitable to buy oil 6 months ago, store it for 6 months, and then sell today it is coming to an end. And they REALLY don't want to be left owning a tanker full of oil that they can't sell for what they paid for the oil (plus the storage).
I expect that when they put these trades on, wherever possible, they put the whole trade on all at once. Buy the oil, pay for the storage for a set period, and sell the oil in 6 months (thereby locking in their profit, and "eliminating" risk). And with the tightening being seen, there aren't new versions of those trades to put on, and thus oil stored on tankers is being delivered to the counter parties that 6 months ago bought the oil for delivery today (even though the people taking delivery have the same storage problem everybody else has).
If the storage information has the level of detail, then I imagine we're going to see the volume of oil stored in cheaper storage further increasing, even as tankers are being emptied. We might even see, soon, from the companies that own oil tankers, that they aren't able to lease them out as quickly as they want to. I figure if that starts happening, it'll show up first in the daily rates on the spot market to rent an oil tanker. Once it starts, if the dry bulk market has been an indication, those spot rates for a ship can fall far and fast.
adiggs
Well-Known Member
Heh - and everything to gain from the hype. That's an interesting market conundrum - hedge funds and oil producers are on opposite sides of the trade, but they're on the same side in their desire to see the price move.
Good observation about the media bias shared by both sides of that trade. That's a good reason for the whole thing lasting longer and longer (and most likely leading to an even bigger economic problem when it breaks and everybody heads for the exit at the same time).
Of course, I think the only rational view of things is that it's the hedge funds that are at the biggest risk here. If the price goes up, the producers sell more future contracts at the higher price, and cheerfully accept the price that they have available today and are gladly locking in as much as they can.
If the price goes down, then the producers take the price they've locked in, and worry about what happens to them in 2-5 years as those contracts run out. The hedge funds meanwhile will be the funding source for a few years of O&G production
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