dbNet Energy Economics

There are many links to articles referenced as sourcing for articles on this site. If the links are outdated or "retired", here is a link to Wayback Machine that may recover the source articles. The link is also repeated in the left margin on each page of this Energy Economics section.

Introduction

Energy was a top enabler of the rapid progress of the last century. Now, energy will be the existential topic for this century. Physics, economics, politics, wealth, and more - hot topics. There's plenty written about it that will expand your knowledge and interest. Read The Prize by Daniel Yergin, or see the PBS series of the same name if you can. Note - The Prize is now available on Amazon Prime!

The PBS special "The Prize" was published on VHS, and is currently out-of-print. Copies are available on Amazon but are expensive. You may be able to find a copy on eBay, or by Bing/Google. Also try your local or metro public library.

These days, energy is near the front of everyone's thinking.

Interactions and performance of economies around the world, driven by energy, are visibly affecting all of us and we are increasingly aware of that.
Many are concerned about environmental considerations.
Energy policy around the world is in the forefront of news and politics.
Many people are interested in "green" jobs, and "green" is related to energy sourcing and usage among other things.
New companies and ventures are emerging to develop new cleantech technologies, while a lot of "green" work is also underway throughout the huge energy establishment.

The business of energy is closely interwoven with politics. With rare exception, in the public forum discussion of energy-related topics is held point-by-point with little or no context of world energy structure. This makes every point equally important, and everyone is an expert. The result is that many people have strong opinions about energy but very few have a realistic context to judge reality or practicality. And on all sides, argument points may be made in ignorance, or with information that is obfuscated or withheld, in order to advance an agenda. It's a confusing subject.

This site is intended to provide a practical context. First it gives a quantitative overview of current energy usage, to help us know what quadrant of the universe we're in as we consider current topics; and then explores related topics discussed in a way to help a very practical subject for thoseinterested, getting a "green job".

Questions considered on this site include:

What are the fundamentals that drive the Energy Complex? How are they quantified? What is the architecture for energy development?
What kind of companies will ride fundamentals to success? Which will wither? What is being funded right now? What kind of personal investments should we make?
Green careers: where and when will they emerge? In particular, for Silicon Valley professionals?

Site Organization

This Website defines the problem by organizing it into the following topics:

Primary Sources: Current metrics on sources of power and use of power, define economic output and politics among regions. Energy policy can affect both of these to major effect.
Economics: supply and demand must maintain or improve current economic balances in order to minimize perturbation of everyone's way of life. Economic systems are profoundly affected by changes to growth on the order of 2%, and particularly to any degree of negative growth.
Renewables: because of physics, renewables must overcome a tall barrier to compete with carbon-based sources. Use of less-competitive energy sources directly affects economics of energy use and ultimately of national and regional economic systems.
Transmission: Distance between source and use is important: first that distributions systems be in place to connect the two, and second that transmission efficiency and conversions are inherently part of the economics of energy use.
Energy storage: a requirement because usage is not uniform but varies daily and seasonally. It is also needed for mobile use, a large component of today's energy use. Efficiency of energy conversion required for storage input and output generally dominates efficiency of a storage system. Carbon sources inherently provide storage (this took millions of years...); renewables do not so energy-efficient and weight-efficient solutions must be developed.
The SmartGrid is proposed as a way to manage efficient access to energy sources and to manage its usage at delivery points. This requires high-technology and communication and likely can build on the Internet. It seems likely that the entire energy system could evolve in a fashion analogous to the development of the Internet during 1995 - 2005.
The rarest expertise is always the ability to sustainably monetize a technology or idea. The Ventures section of these pages tracks business development to address the energy-content topics described above. They will use and develop the technologies just described, but are ultimately where the economics of this energy topic will be played out.

Energy Transition

Much material on this website contains background data relevant to energy transition. Here is an article with an excellent summary and historical perspective on prior energy transitions, and constraints due to energy density, EROEI, and energy distribution.

Energy Transitions Past and Future

Green Jobs

The site intent is to structure the energy topic, identify problems and opportunities, and to focus on directions taken by participants that are quantifiably sustainable in all key regards including economics, climate, politics, and independence. If we can achieve this, then we can make better choices about our jobs and investments.

It seems improbable that there will be a large number of jobs posted in a category called "green jobs". Granted, there will be jobs evaluating and implementing use of specific types of materials and processes; jobs in conserving energy and materials; jobs involving business practices; jobs installing equipment; all of which may be considered to be directly "cleantech". But more broadly, there are companies with business missions in many ways affecting areas you may consider to be "green". Jobs at these companies will have normal skill requirements in relevant technical, logistical, management and other roles, and of course contribute to the companies' overall business objectives. So for purposes of this website, those jobs are considered to be "green jobs".

With that description, there will be many companies with "green" missions. This site particularly focuses on energy sourcing and use.

This site is not about posting a job board. Rather, its purpose is to

Identify key topics in energy and energy use, and explore the subjects to give a high level and quantitative context. It will be quantitative so you can judge relative scope or importance or opportunity or hurdle.
Provide links to definitive or at least descriptive sites.
Identify organizations working in these areas.

As much as possible, the topics will be taken to the point of identifying organizations that you can explore to understand their objectives, and if interested, to advance your career in that area.

From links provided to organizations identified, you should be able to research the business mission and to determine if a job exists or may come into existence that fits your qualifications and direction. Or start a new venture.

Consider this a starting point; you can identify company competitors on business sites like Yahoo! Finance, use LinkedIn to find contacts and groups that may help you expand your search. This is the Internet, use your imagination!

Broader Definition of Sustainability

A further idea of the site is to identify a path that is business-sustainable, fundamentals-driven and balanced among responsibilities, without bias. Most everyone these days considers "sustainable" to mean environmentally sustainable.

This site points out that business sustainability is as important as environmental sustainability, and shorter term. Business sustainability requires creation of profit: more money out of the business than money into the business. More energy out than energy in. More value out than value in. This creates jobs.

More precisely, Internal Rate of Return greater than Cost of Funds, including all incremental source-to-use costs, savings and returns and excluding subsidies.

A word of warning. Green Jobs, and the business underlying them, may have profound and negative effect on the economy, according to Analysis of green energy initiatives in Spain through 2008 (and subsequent Spanish Government follow-up presentation of analysis; and translation and discussion). The US effort is modeled after the effort in Spain. In Spain, each green job created, cost 2.2 jobs elsewhere in the economy. Only one created job in ten was in permanent operation; others were fixed-term such as installation. The effort resulted in 31% higher public electric cost, drove out energy-intensive industry, diverted capital to low-return projects from higher-return projects, and created need for perpetual investment in high-cost infrastructure. (As of 2010, Spain has currently scaled back their effort due to effects on their debt and on the Spanish economy, as reported by Bloomberg and others.)

(14 May 2010) China as well is not immune from economic risk in their huge wind power program, according to the UK Guardian. China is building huge wind power capacity, and a large industry behind it to produce the equipment. The logic is that capacity will create the market for the energy. However, the wind farms are expected to operate at a loss with payback taking 20 years, and require state assistance or preferential policies. Capital is limited to fully develop the wind program, and also for development of the grid. Use of the electricity from the wind farms is paced by development of the grid, and the State Grid is un-enthusiastic to subsidize this. Wind power is sold to the grid at about 0.53 yuan (US$0.08) per kWh compared to 0.20 yuan for coal and 0.35 yuan for hydropower and costs more than this in various regions of China. A primary consideration for entering the wind market in China is the ability to withstand losses. Developers are not in the market to make profit, but rather to gain a foothold in the market and to pursue subsidies and stimulus funding.

So it remains to be seen if the US can create jobs, and whether they can avoid these issues. Simplistically, the issues in Spain seem to be the degree to which the public sector distorted the market, by diversion of capital to lower-NPV projects; and this contributed to depression of the economy. Remember that taxes don't create wealth. Taxes only move money from one place to another. Creation of sustainable jobs requires creation of wealth, and this requires creation and use of incremental capital. Since the public sector is funded by taxes from the private sector, jobs must be created in the private sector, in companies profitable in the energy business independent of taxes and subsidies, if they are to be sustainable.

Input

The motivation for this site is not political. These topics are closely intertwined with politics so that's not going to be easy.

Some conclusions are drawn on the site. They are highlighted in blue, as is this paragraph. Quantified primary sources are identified and linked that drive the conclusions. You may or may not agree with site conclusions, and you are welcome to identify quantified, primary, linked sources that may affect the conclusions, and they will be considered and could affect the conclusions.

The objective of this site is not to promote a specific direction; it is to identify a sound direction that provides net energy gain and is sustainable in all dimensions including but not limited to economics. Then the objective is to help determine jobs that promote that direction.

About

This site is researched, written, published, operated and maintained by a private individual privately employed, outside of government or political or advocacy organization, using publicly-available data.

Data analysis and presentation on this website have been prepared using the data-mining techniques described in the Programming Projects section of the website.