How much and where does power generation come from and why? Of interest to global investors.

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This week I again had the opportunity to speak the truth about money, which is one of my mainstays. We need to invest trillions of dollars in technology in the right way to get rid of the climate chaos we've created. Over the past 15 years, my efforts to accumulate enough wisdom to create predictions of what the future will look like have allowed organizations like Jefferies Group, the fifth largest investment bank in the U.S., to engage me to speak to their clients.

Like the recent report by the International Energy Agency (IEA) and the Global Organization for''s Energy Interconnection Development and Cooperation (EIDC), an organization set up by China to deal with large-scale power grids, Jefferies understands that grid investment has remained insufficient for many years. Any advances created through technical innovation, such as LEDs, have already been utilized, and large-scale power generation and storage projects are waiting in long regulatory queues. This is why Jefferies invited me to speak earlier and ask questions about the reasons for choosing electrification and why it is important for regularity of investment.

In this talk, I reviewed all types of material electricity generation, past and present, my preliminary expectations of what''how much of the world's energy should be provided by these types of energy sources in 2060 or 2080, and the impact of these projections on investment in the overall electricity market.

As I emphasized in my opening remarks, electricity is the future of energy. It is much more efficient than other energy molecules and thus will become more economically viable in the future. Any pathway that involves converting energy by creating molecules such as green hydrogen or synthetic fuels will be more expensive compared to alternatives that can electrify with batteries or grid connection. The entire ground transportation system and all heating systems will be powered by''enough electricity through solar panels to meet demand. Therefore, building wind and solar farms in places with strong wind and sunshine and transmitting this electricity to demand centers will be an important task. The system will also require more electricity transmission and more powerful distribution networks.

Let's look at a list of different types of electricity generation and my projections.

In general terms, the organizing principle is based on aging technologies, new technologies that will dominate, and technologies that are part of the big picture. And we will also look at some possible implications.

As before, the professional's opinion for a period of several decades has''a large margin of error. This is the likely scenario based on my professional opinion. Does it not show the correct predictions? No. But I think they are more accurate forecasts than most others.

Hydropower

China and other regions are still building hydropower plants, and there are still a lot of untapped natural resources in the northern parts of the continents. If hydroelectric power plants are built in regions with small biomass and its residues are completely removed, the carbon footprint caused by the construction is offset during the construction. Hydropower plants are multi-generational strategic assets. They tend to be seasonal: high generation in the spring and low generation in the fall.'''This often offsets wind generation, for example in Brazil, where I have been studying the patterns in discussions between the global technology giant and Brazil's power grid operators.

But such plants have limitations. The large western U.S. hydroelectric plants were built during periods of unusually high precipitation, after which the region became semi-arid again. This drought has been exacerbated by induced climate change, leading to threats to power generation. It is no coincidence that China's 2022 permits for coal-fired power plants were triggered by droughts in western China, and so their hydro fleet was unable to exceed its performance. This will not be a permanent condition as China builds massive wind and solar projects, and''so coal-fired generation will decline starting in 2024, as I noted recently in my article giving the nuances of the situation.

Hydroelectric plants, because of their synchronous generation that provide voltage and frequency control, are typically equipped with high-voltage alternating current (HVAC) systems, but they can also be modified with non-synchronous generators and direct high-voltage direct direct direct direct current (HVDC) systems.

Coal power

Coal remains the most disadvantageous form of power generation in terms of negative externalities. But, as with hydroelectric and nuclear power plants, coal-fired generation involves generation by synchronous''asynchronous turbines that provide voltage and frequency control during the generation process. But now we have a solution.

We will always generate electricity from methane, starting with fossil natural gas and then moving on to biomethane. It's a convenient, cheap, high-energy molecule, it stores well in the salt depths, and so its use will decline over time. Moreover, it will increasingly be powered by biomethane. This will be part of energy security strategies in the absence of bright sun and wind, and even if some countries have to burn methane for a couple of weeks a year every decade or 50 years, it will be much better than the situation now. Methane is a more sensible''s energy storage molecule in such cases than hydrogen.

Airports and oil sands facilities burn natural gas to generate electricity and heat buildings and processes. This will all be replaced by heat pumps for commercial facilities and 45% industrial heating, as well as other electric heating technologies for higher temperature requirements. The Alberta oil sands odds will of course disappear, so too will the massive amounts of natural gas they burn to create steam to develop and process the sand oil in their grid.

Most of these facilities will, of course, install solar panels and heat pumps in parallel, which means increasing''electricity consumption, but will change the demand for energy on the grid. Will biomethane be used for co-generation in general? Yes, possibly, but it will be a rounding error.

Nuclear power

As I discussed last week with Dr.

Projected''China's nuclear power capacity is still growing exponentially, while the nuclear power plant program remains flat, average annual generation is currently only three reactors online, but they are not in commercial operation, so in 2023 it is possible that China will have no new reactors.

I attribute this to the fact that China abandoned the third point, unified design, for other strategic goals, and that was a mistake. That goal was China's international nuclear reactor sales and construction. China knew that other countries would also be interested in building nuclear power plants, so they developed about eight different designs of nuclear power of different technologies up to the present''time. Thus, they have destroyed economies of scale. They are also exploring other nuclear power plant designs in labs and in prototyping mode, expanding the problem, not reducing it.

Remember that until the UK and US decided that China was a threat, not a partner, China co-built the Hinkley Site C reactor with French company EDF. That is no longer true.

I remain happy with almost every reactor that comes into commercial operation, but the peculiarities of this type of power generation will prevent it from becoming a major player, and its relative production will be greatly reduced.

Wind power generation

Ground-mounted wind farms are cheap and easy to build in''below maximum potential to exploit peak price spikes and compete in ancillary markets such as the new UK inertia market.

On land, wind farms are boring ancillary facilities for electricity generation, the flexible coal-fired power station of the modern grid. The only problem is that they stand out and can annoy people.

Offshore wind farms can be installed on a large scale because it is easier to transport huge blades and props to offshore sites by ship than by rail and road to onshore sites, and the energy from wind over the sea is higher and more stable closer to the surface. We are now building offshore wind farms with a capacity of in''several gigawatts in 10 months. Offshore sites are still understudied and often closer to major cities. Floating wind power plants are developing rapidly.

The average cost of offshore wind farms will always be higher than onshore wind farms, but they have higher fill factors to compensate.

Since submarine cables are required to transport electricity ashore, HVDC will always dominate the field. Wires with helium inside storing green hydrogen produced at sea will remain in the dream realm of proponents of using molecules for energy.

The predicted dire times for Western offshore wind power are turning out to be part of a structural realignment of the market: the Chinese''the benefits of such modularity.

There is a lot of land on Earth that is either dedicated to agriculture or cannot be used for other purposes. With HVDC, solar power can be transported eastward for three hours to meet peak demand in the evening, and sent northward from less populated equatorial zones.

Like wind farms, electric power management systems will allow them to operate in direct reserve mode to eliminate small variations and to control frequency and voltage. As the share of solar in the grid grows, more and more solar power will operate at less than its maximum potential to economically utilize peak prices and compete in markets''additional services such as a new inertia market in the UK.

The solar panels will be installed on rooftops and close to commercial and industrial sites such as distribution centers, airports, manufacturing buildings and industrial facilities. They will operate by plugging back into the grid, mainly to reduce electricity costs, but some will also be used to provide electricity to the grid at least part of the time.

For example, there are many flat roofs on industrial parks and transportation centers. They will attract a lot of solar panels.

Although all of the total energy for many commercial as well as residential properties will be provided by solar''panels, this will not always meet the time of day requirements. This will require extending the grid connection in two directions and also by capturing energy.

Heavy industry will require huge amounts of electricity, so distribution lines to large facilities will be very powerful and can even be considered small transmission lines.

Although there is housing in apartments, the demand for them is lower than Asia, India or Africa. There are more flat roofs on apartment buildings, but the ratio of roof area to per capita energy use is much lower in such buildings.

As with commercial and industrial facilities, solar panels on residential buildings reduce the cost of grid reinforcement and''reduce transmission needs, so they have their advantages. Except for the off-grid obsessed types who have a one-in-a-thousand share, there is no need for grid provision other than the law of normal loads, which tend to create about 5-8% on the energy consumption of a corner facility. This is a matter of degree, not a disagreement over principle.

Other types of energy

There are some other technologies that I have added because of their percentage. Geothermal energy leans toward earthquake and volcano zones, and deep geothermal energy is interesting, but it increases long-term risks. Tides have their own problems, making them the equivalent for the old definition of a personal boat,''i.e. a hole in the water that you spend money in.

Remote mines have fairly long lives, are in remote locations and are typically surrounded by unpopulated areas, so they will be powered by their own renewable energy and storage systems - combinations of wind, water and solar that make sense for specific geographic conditions. With applications from BHP, Rio Tinto and Fortescue this year for battery and microgrid systems for mining equipment, it was only a matter of time before this was realized.

Storage hydroelectric power and various types of battery technology will play a role in reducing the need for further power generation''through temporary electrical energy management. Different segments will be met using specific technologies. The only problematic option is very long term storage for 10 or 100 years for weather events, so it will be used as special strategic reserves. Other than that, it won't be hydrogen, except for some countries that make bad decisions. There is little evidence that hydrogen is an excellent candidate for long term storage, except that we want to use it for energy. There are better molecules for that.

The increase in loads will lead to increased aerospace heat transfer capacity from and to the environment utilizing''Electricity consumes more electricity than burning natural gas for heat. One unit of electricity removes 2-7 units of heat, depending on the season and the source of air, land or water. Therefore, this is a non-linear increase.

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