The rebound effect and ICT - why free energy may reduce CO2 emission

[I have long argued that energy efficiency, as a primary objective, is not sufficient to slow down, never mind reduce CO2 emissions.
The pressing challenge facing this planet is not energy consumption but CO2 emissions. It is not the amount of energy we consume, but the type of energy that really matters. If we can adapt our society away from our current fossil fuel fiesta to use only renewable power like solar and wind, then global warming could be significantly slowed down. Our planet, in a few hours receives more solar energy than we consume from all traditional fossil fuel based sources in a year. The biggest problem with renewable energy is its unpredictably and variability. Part of the solution is on the supply side which is to develop continent wide grids and energy storage systems. But an equally important of the solution is on the demand side and that is to develop technologies and applications that can work with this type of unpredictable energy. ICT can play a critical role in developing such solutions. This is the grand challenge for the ICT industry. Rather than focusing on energy efficiency as the primary objective, ICT companies and researchers need to focus on how to develop services and applications, for all sectors of society, that work only with renewable energy resources. Many of the technology implementations are very similar for energy efficiency, but the overall architecture outcome is a lot different.

One of the big challenges of a primary objectives of energy efficiency, is something called the rebound effect, also known as the Jevons paradox or Khazzoom-Brookes postulate. In a recent workshop held at University of Concordia in Montreal, Stephane Lepochat gave an excellent talk on the implications of the rebound effect on ICT, as well as the 4 different types of rebound effect . Given the many other examples of rebound effect in other sectors of society there is no reason to expect that ICT will not suffer from the same phenomena. In another talk by Chris Phillips dramatically showed the challenges we face if we try to solve the environmental impact of ICT through energy efficiency as the primary vehicle.

Charles Despins of PROMPT inc gave an excellent talk on the socio-economic opportunities on a carbon focused Green ICT strategy, as opposed to energy efficiency – not only to reduce carbon impact of ICT, but to help all aspects of society directly reduce its CO2 impact. Quebec, through PROMPT, is probably the only jurisdiction in the world that is funding research along these lines. While the rest of the world is still focused on energy efficiency, Quebec researchers and industry is taking a world leadership role in addressing the real problem facing this planet. Companies and researches in Quebec are doing innovative research and development at using ICT to use renewable energy only. Zero carbon clouds and networks, pathway charging systems using renewable energy for vehicles and public transportation, etc are some examples.

This approach undertaken by Quebec through PROMPT Inc may end up the secret weapon against global warming. As noted, in the article below, solar panels could soon produce the cheapest form of electricity. As the cost of solar panels continue to drop simple extrapolations indicate that electricity from solar panels, could soon be “too cheap to meter”. While many may remember this phrase from the hubristic days of nuclear energy, it is not unreasonable to expect this will soon will be the reality for electricity from solar panels. Jurisdictions that focus on building technology socio-economic solutions using such renewable energy could be the big winners, because not will it virtually eliminate CO2 emissions, the power itself will almost be free.

There is every expectation that energy consumption will continue to grow, especially as the developing world adopts western lifestyles. For this reason, I think it is simply illogical to expect that energy efficiency to be the primary objective in reducing CO2. A far more effective objective is to find ways to use renewable energy only.

Chris Phillips, University of London, UK
Dynamic Energy Management for Wired Communication Networks
http://users.encs.concordia.ca/~al_shaik/EJC_2011/Slides/Phillips_EJC_2011.pdf

Stéphane Lepochat, EVEA, Nantes, France
Taking into Account the Rebound Effect in LCA: Necessities and Difficulties
http://users.encs.concordia.ca/~al_shaik/EJC_2011/Slides/Lepochat_EJC_2011.pdf

Charles Despins, Prompt-Quebec and ETS
Socio-economic opportunities for a carbon-focused Green ICT strategy
http://users.encs.concordia.ca/~al_shaik/EJC_2011/Slides/Despins_EJC_2011.pdf

C. Despins et al., Leveraging Green Communications for Carbon Emission
Reductions: Techniques, Testbeds and Emerging Carbon Footprint Standards,
IEEE Communications Magazine, vol. 49, no. 8, August 2011, pp. 101-109


Four different types of rebound effect
- Direct Rebound Effect (substitution effect, pure price effect) :
Greater efficiency may lead to a lower price of the service (or product or technology) which in turn
may induce an increased use of this cheaper service.
- Indirect Rebound Effect (income effect, secondary effect) :
If prices of other commodities and income are constant, the reduction of costs for one commodity
due to a particular efficiency increase implies that consumers have more money to spend on other
goods.
- General Equilibrium Effect (economy-wide effects) :
The direct and indirect rebound effect lead to changed prices and consumption throughout the
economy, which may increase or decrease production in distant sectors and changes the
production functions.
- Transformational Effect :
This includes changes in consumer preferences, alteration of social institutions, and the
rearrangement of the organization of production.

Solar PV rapidly becoming the cheapest option to generate electricity
http://www.grist.org/solar-power/2011-10-11-solar-pv-rapidly-becoming-cheapest-option-generate-electricity

For a long time, the holy grail of solar photovoltaics (PV) has been "grid parity," the point at which it would be as cheap to generate one's own solar electricity as it is to buy electricity from the grid. And that is indeed an important market milestone, being achieved now in many places around the world. But recently it has become clear that PV is set to go beyond grid parity and become the cheapestway to generate electricity.

Whenever I say this I encounter incredulity, even vehement opposition, from friends and foes of renewable energy alike. Apparently, knowledge of the rapid developments of the last few years has not been widely disseminated. But it's happening, right under our noses! It is essential to understand this so that we can leverage it to rapidly switch to a global energy system fully based on renewable energy.
At a very large scale, the cost of manufacturing anything drops to just above the cost of its base materials. As scale goes up, per-unit costs come down. This is known as a "learning curve" -- the price per unit of capacity comes down by x percent for every doubling of cumulatively installed capacity. For solar PV modules, the learning rate has been exceptionally high, averaging 22 percent for the past two decades. The cost of the "balance of system," i.e., all other components needed, follows this trend line closely. So this is what we see happening now in PV:

Costs vary per country, and fossil fuels mostly don't get the right costs allocated for their CO2 emissions, but let's take two recent studies for the U.S. here. The Brattle Group published theConnecticut Integrated Resource Plan [PDF] in 2008. They found levelized cost per kWh for natural gas-fired power plants to be $0.076 to $0.092, and for coal, $0.086, both without carbon capture and storage. And in 2009, MIT issued its Update on the Cost of Nuclear Power [PDF], in which they found levelized cost per kWh for nuclear's competitors of $0.062 (coal) and $0.065 (natural gas), without any charge for CO2 emissions.
The cost of wind energy is already close to competitive with gas and coal. The recent Global Status Report [PDF] by REN21 states its kWh-cost for suitable locations as $0.05 to $0.09, for an average of $0.07. Wind power cost is still decreasing, due to learning effects, but at a much lower rate than the cost of PV.

It is highly unlikely that fossil fuels will get away without any charge for CO2 emissions in the long run. In a growing number of countries, such as the 27 countries of the European Union and Australia, this market distortion has already (mostly) come to an end. But let's assume that the cost of solar PV electricity needs to drop to below $0.06 per kWh to live up to the claim that it's the cheapest source of electricity. In sunny regions, we will need to halve the cost of PV power again to make that happen. Three doublings of cumulative capacity will do, since, according to PV's rapid learning curve, every doubling of capacity leads to a cost reduction of 22 percent. After three doublings the cost will be multiplied by 0.78 * 0.78 * 0.78 = 0.47.

Cumulative installed PV capacity globally was 40 gigawatts (GW) at the end of last year. Three doublings mean this has to grow by a factor of eight, to 320 GW, to achieve the necessary halving of cost. From 2005 to 2010, PV capacity installed annually grew by an average of 49 percent per year. Even if this slows down to 25 percent per year in the near future, we will reach 320 GW in 2018 -- that's only seven years from now!

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Green Internet Consultant. Practical solutions to reducing GHG emissions such as free broadband and electric highways. http://green-broadband.blogspot.com/
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