Controlling the Post-Oil Energy Economy

The World’s First Solar-Hydrogen Demonstration Power Plant

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Béla LiptákBy Béla Lipták, PE, Columnist

In my September 2005 column(Can an Automation Engineer Control the Economy?), I described the control algorithms for the non-industrial process of the economy. I noted that the controlled variables (CV) and manipulated variables (MV) of all economies are the same. CVs include: GDP, deficit, dept, unemployment, value of the currency, the standing of the stock market, etc. The MVs include the interest rates and the policies concerning taxation, trade and energy policies, etc.

The capitalist and the communist “control loops” are quite different. The communist one is mostly feed forward (FF) and as such it keeps accumulating the model error until it self-destructs. On the other hand the capitalist control loop is a supply-demand modulated feedback (FB) control loop. Because the response of supply to demand is slow, this feedback configuration is slow to respond to changes in load variables (such as the cost of energy or the interest on loans) and requires retuning whenever the load or the process dynamics change. (For a general discussion of controlling non-industrial processes, refer to my 2005 articles in this magazine, which later became the basis of my lectures at Harvard University.)

The goal of this article is to describe the control system needed to smoothly convert the global economy from one that operated with exhaustible fuel resources (a batch process) to one that works with an inexhaustible and free energy supply (a continuous process). We know that for all transition loops it is essential to know the speed at which the set point can be changed if stability is to be maintained. We also know that the output of our control loop (the correction) must be proportional to the error (P), must reflect the integrated (I) area under the error curve (past inaction) and also project into the future by determining where the controlled process will get if the rate (D) of increasing error continues.

Lacking this understanding of the basics of process control (of any process) kept our “operators” (the political leaders of the planet) inactive and therefore the transition process has not even started. Today, the global economy in still controlled in a manual on-off mode where the incremental changes in the set points are made on a “lets see what happens” basis. What is worst, the operators don’t even understand the role of controller action and therefore some of their controllers operate in reverse. Examples of reverse action are the fighting of oil addiction by drilling for more oil or not realizing that with exhaustible supplies an increase in demand results in an increase in price while with inexhaustible supplies, the increase in demand causes prices to drop.

Measurements of the Controlled Process

Sir Nicholas Stern, former chief economist at the World Bank estimated that by 2020 the cost of continued reliance on fossil and nuclear fuels will reach 20% of the gross world product (GWP). The GWP today is approaching 50 trillion (the GDP of the United States was around $15 trillion in 2007 and is shrinking). If Sir Stern is correct, the cost of inaction (leaving the present economic control loop unchanged) will reach $10 trillion/yr by 2020, not to mention the social, environmental and “energy war” costs.

Comparing CostsAs shown in Table 1, both fossil and nuclear fuel reserves will be exhausted by 2100 and the cost of solar and wind energy are already competitive. These inexhaustible energies will drop further, because the more we use the lower the price gets as mass production and implementing new inventions become profitable (see the experience with computers).. In June 2008 the International Energy Agency (IEA) estimated that $45 trillion (1.1% of GWP yearly for 42 years) will be required to prevent energy shortages and climate change by mid-century if inaction continues and exhaustible fossil and nuclear energy sources are still used. They estimate that 32 new nuclear and 50 new fossil power plants (equipped with carbon capturing) would have to be built every year (at an investment of about $5 billion each - see Table 1). This would triple energy costs and drastically limit (if not reverse) global economic growth.

Therefore leaving the control loop of the economy in the “manual mode of inaction” would cost much more than gradually transferring to a clean and inexhaustible energy economy. Once the transition is completed, the fuel will be free and once the mass production of nanosolar collectors and reversible fuel cells (this invention of mine is described in my July 2008 column, Fuel Cell of the Future) start, the cost will drop even further.

The Properties of the Inexhaustible Energy Control Loop

Our planet receives more solar energy in 45 minutes than what mankind will need by the end of the century in a year. Therefore, if the global conversion to renewable fuels is completed by the end of this century, from that time fuel will be inexhaustible and free.

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