[BLANK_AUDIO] When thinking about energy supplies it's useful to begin by simply cataloging the various primary sources available to us. One basic distinction. Is whether a primary source is based on minerals, or what we may refer to as a renewable. Renewable's. Are things like solar, you know, a familiar cassip characters, wind, hydro, biomass, maybe some less familiar. Forms we can harness energy out of wave activity and tidal activity, and then geothermal is actually reasonably common. But these are kind of a. Some familiar forms of renewable energy. We might think of a few of these as actually the most traditional forms of energy at least when considering in the context of the broader sweep of human history. For example, our earliest. Harnessing of energy lets say beyond that we acquire in food calories would of come from the thermal energy we took out of biomass by burning it. And then course prior to widespread industrialization, we were making use of wind and hydro power to do mechanical work. So in some sense even though renewables are seen as a somewhat of a. A new thing in developed economies they are really very traditional sources of energy. [BLANK_AUDIO] The other principle group of energy resources, are these non-renewable, or mineral based forms of energy. So, these include. Though the obvious fossil fuels, coal, gas, natural gas, and then something called gas hydrate which may not be used extensively in practice. They are essentially crystals of ice and natural gas found in marine environments, so. They may not be used in practice, but they do represent a large potential energy source. And then the other primary non-renewable or mineral-based form is nuclear power. Nuclear energy, in practice, uses uranium as a fuel and refers to the energy release through the process of nuclear fission. With a particular amount of, of the good. This is because of different primary energy sources produce goods with different energy densities. For example, this slide displays energy per unit volume or relative to gasoline. So, diesel and gasoline for instance are obviously derived from petroleum. Diesel is that fraction of petroleum products that actually has a relatively high energy density. So, it takes a less, a smaller volume of diesel to produce the same amount of energy and therefore the same amount of work as it does a given volume of gasoline. You know, alternatively, you could look at something like methanol over here. Methanol is also called wood alcohol, was traditionally used through destructive distillation of wood, the biomass. And that has an energy density per unit volume, of only half of gasoline, [SOUND] so it would take twice as much methanol, twice as, twice the volume of methanol, to produce the same amount of energy as a given volume of gasoline. Now if we were, what I did is I also included coal on this table. So, coal here is a kind of varies depending on the type of coal that you might find on the lower end, relatively unconsolidated bituminous coal. Has about 60% of the energy density of gasoline, and then more hard rock highly consolidated anthracite coal would be much, would be higher up around 75% of gasoline. Now you can also consider. The energy per unit mass of a given good. So, what this chart does is it takes the data that we have displayed in the prior chart, energy per unit volume, but also plots these, these energy products on a per unit mass basis. Again, all relative to gasoline. So, what you've, when you plot these, these energy products. This way, you know, what you're basically noticing, more so than the particular location of any one good, is that you have these general areas where relative to gasoline. We already know because we looked in this, this horizontal dimension anything that lies to the right of gasoline has a higher [UNKNOWN] volume means that it requires less, less space. The vertical dimension tells you just how heavy the thing is relative to gasoline. So, actually the, the things that. Or have low energy density, relative to gasoline, to move around, to produce the energy that could be produced by, let's say, a pound equivalent of gasoline. So, in general, what you're looking at is. You know, goods that have a high energy density per unit weight, and per unit volume, are relatively lighter. They're kind of on this spectrum, the lightest types of energy resources that you could consume and presumably they would actually. Command higher prices in the marketplace, because consumers would find them cheaper and easier to move around, because they take up less volume, and they are, they're less heavy. So, for instance, compared to gasoline here, you know, we look at methanol. We knew that it was only half the energy density by volume of gas, so it would require a lot more space to move around for the same amount of energy as would gasoline. But it's also only about half the energy density, on a mass basis, as is gasoline. So, it would take twice as much weight. Of methanol to move around to produce the same amount of energy as gasoline. It wasn't plotted in the original chart here from the Energy Information Administration, but if we put coal on here. Remember that was like varied between 60% by volume and 75% by volume of, of gasoline. You know it roughly works out to be kind of on a, on a. On a mass basis. About half as dense as gasoline, so you would require more space. And a lot more weight of coal. More volume and a lot more weight of coal to produce the same amount of energy as lets say gasoline. So, you kind of start to get a sense here from this chart why you know, these things derived from petroleum are particularly highly valued. Okay, as compared to say something that you might traditionally think of being generated by biomass, or let's say coal. A different type of non-renewable than petroleum based energy. But if what consumers really care about. Is the cost of utilizing these goods, the cost of doing the work that they demand then, maybe we can take a look at that cost more directly. Because in a sense, when you see these charts that are talking about energy density, this is still somewhat of an indirect measure of the cost. You're really talking about you know we're making that logical leap which is reasonable, but it's still a logical leap. That if things are require more space and they're heavier, then they're going to be more costly to utilize, but we can take a look at that cost more directly. If we look at what the Energy Information Administration provides for generating electricity. So, if we look at a particular type of consumable form of energy. Let's say in this case electricity, which we know can be used for lots of different types of work. The Energy Information Administration provides estimates of what they call the total system wide levelized cost of electricity generation. So, this measure represents the. Dollars per unit cost of electricity that have to be charged over the long term to pay for the cost of generating electricity from a particular fuel source. Values in the table represent the cost on a megawatt hour of the fuel and the fixed investment and the operating costs necessarily, necessary to generate. Electricity from that particular fuel. So, for example, for most advanced combined cycle generation these are natural gas fired generating facilities. We'll talk a little bit later about what some of these terms mean, but for the most advanced natural gas fire generation facilities. The cost of a megawatt hour in 2011 dollars are, you know, is about $66, $66 per megawatt hour. On the other end of the spectrum, you have these sources like offshore wind, and then solar thermal generation. These are upwards of. $220 per megawatt hour to produce electricity. Here in the U.S., what's our most common primary energy source that we use to generate electricity. Well it's coal. Conventional coal fire generation comes in at from this, based on this study, at about $100 per megawatt hour. So, we see a number of these advanced technologies are actually quite competitive. I think it's important to note that in the case of coal. The Energy Information Administration estimates factor in a, a 3% premium in the cost of capital in evaluating the levelized cost of conventional coal-fired generation. So, this adjustment is equivalent to an emissions fee of about $15 per metric ton of carbon dioxide. Other studies comparing the cost of plans with and without emission fees suggest that a $15 per ton CO2 fee adds about $15 to the levellized cost of coal fired electrical power on a $1 per megawatt hour basis. So, basically without this fee, in this study if we were to sort of imply impute subtracting out this this this fee based on on how costly this fee looks at from other studies. Then co fire generation is going to be. You know, basically move up here. It's going to be about 85 dollars per megawatt hour. Something in that neighborhood. So, without this fee it's at least as cost as effective as wind generation, less so than power derived from these, very, new. Cost effective and efficient combined cycle natural gas fire generation facilities. And of course for some of you that find this chart a little bit unusual that coal would be so middling here in, in its in its cost of generation. You know, really all boils down to. Whether you do or don't include the cost of carbon dioxide credits into building these generation facilities. So the, the, the cost if you don't include those really is much more intuitive, that it, about. You know, a little more costly than these, these new efficient natural gas fire generation facilities.
