Since the March 11 earthquake and tsunami severely damaged the Fukushima No. 1 nuclear power plant, faith in renewable energy sources has spread fast in many corners of the world as an emissions-free means of generating electricity. But placing excessive expectations on renewable energy sources could backfire on the Japanese economy and industry.
Major European countries like Germany, Switzerland and Italy have decided to do away with nuclear power. In Japan, major projects have been set afoot in Japan, each to construct a huge photovoltaic power plant to generate more than 1,000 kW of power with solar energy.
A principal impediment to a broader use of solar and other renewable energy sources has been their high costs. With China’s entry into the field, such costs have been reduced remarkably and the present anticipation is that 1 kW of electricity can be generated at less than ¥10 within a few years through renewable sources.
It must not be overlooked, however, that there is a crucial problem associated with the generation of renewable energy that cannot be resolved by lowering the costs. That relates to “energy returned on energy invested” (EROEI) or the “balance sheet” of energy.
The ratio of EROEI is obtained by dividing “the amount of usable energy acquired during a given life cycle” by “the amount of energy expended to acquire that energy in the same life cycle.”
This means the higher the ratio the more cost-efficient, and can be explained in layman’s terms with simple examples. The cost of operating most of the oil wells in the Middle East is close to nil because the oil gushes out on its own. So, it is possible to get oil worth 100 times the initial energy cost needed to bore wells. This means that the EROEI ratio is 100. In the case of extracting oil from oil sands, the ratio is as low as 20 because of a huge amount of energy is needed to build distillation facilities and extract oil from oil sands.
If the ratio is less than 1, more energy would have to be expended than what can be acquired. That is why nobody has ever thought of exploring uranium contained in seawater, which can feed nuclear power stations for 60,000 years, or methane hydrate reserves in oceans surrounding Japan, which can be turned into natural gas that lasts for 100 years.
According to studies conducted by the Cambridge Energy Research Associates (CERA) of the United States and other institutes, the EROEI ratios are estimated at 100 for oil wells in the Middle East, 100 for natural gas in Qatar, 30 for shale gas that requires injection of pressurized water and 50 for coal mining using powered shovels.
Compared with these high EROEI ratios given to these fossil fuel resources, extremely low figures are shown for others: 20 in the case of nuclear power, 15 for wind power and a mere 5 for solar power. Main reasons are enormous facilities needed for nuclear power generation (these facilities need a large amount of energy for construction and operation) and low generating efficiency inherent in wind and solar power generation.
All these facts and figures indicate that promotion of solar power generation for fear of drying up of fossil fuel reserves would be tantamount to relying on an energy source 20 times less efficient than oil, thus wasting natural resources globally.
Another serious problem would result from blindly expanding the use of renewable energy sources because electricity from such sources is unstable. Efforts to stabilize the supply of renewable electricity would require the use of high-tech equipment like lithium-ion batteries and fuel cells, which in turn consume large amounts of lithium, cobalt and other rare metals as well as rare earths such as dysprosium.
These materials are not only rare and difficult to mine but also heavily concentrated in a small number of countries – more than one half of the global lithium reserves are in Bolivia while South Africa and Russia have a combined 90 percent of the global platinum reserves.
Any move by these resource-rich countries to restrict export out of nationalistic motivation could lead to sharp increase in the prices of the materials. During the past decade since lithium began to be used in computers and cellphones, its price has shot up five times; the price of dysprosium has gone up 80 times during the past five years after it became a vital component of permanent magnet used in high performance motors for electric cars.
Many scientists are trying to develop new materials that would replace these rare metals and rare earth elements. But it is not likely that their efforts will bear fruit anytime soon.
Japan once was the global leader in developing and manufacturing solar cells and lithium-ion batteries. But its dominant position is being taken over by China and other Asian countries, which enjoy low production costs.
Moreover, the price spirals of rare metals and rare earth elements, much of them stemming from the nationalistic sentiments of the resource-rich nations, are strangling Japanese manufacturing companies, which enjoy large market share of key parts and components of high-tech products.
With the “shale gas oil revolution” initiated in the U.S., the confirmed global reserves of fossil fuel have increased. A ranking official of the U.S. Department of Energy has estimated that petroleum and natural gas resources can last for another 200 years.
Despite these changing circumstances, Japan seems so afraid of fuel resources being depleted that it believes blindly in the need for shifting to renewable energy sources. Ironically, such excessive expectations on renewable energy sources, which are believed to be “friendly to the environment,” are encouraging certain countries rich in natural resources to turn more nationalistic.
The result would be endless price hikes of rate metals and rare earth elements, which in turn will continue to distress the Japanese economy and industry.
This is an abridged translation of an article from the September issue of Sentaku, a monthly magazine covering Japanese political, social and economic issues.