Coal Powered Electric Cars!
Your tablet, your phone, your Mac and Apple Watch. Your electric lawn mower and composter – all powered by coal . . .
The rich environmentalist buys a Chevy Volt, (he gouges the taxpayers by taking a $7,500 “clean energy” tax credit) then accuses others of bad behavior for driving “gas guzzlers” that “kill our planet”. He is “progressive” and “loves our home, the earth”. He is “saving the planet” and only he “cares about our children”. He pulls into his garage at night, plugs in his electric car and charges the batteries. The electricity comes from the local coal plant. Brilliant!
John Mueller – Armored Column
Please Share with Friends and Family – God Bless America!
Earlier this month Stanford University announced that its endowment would divest itself of any investments in companies “whose principal business is coal.” It was, they said, a principled move reflecting their concerns about global warming. Stanford’s timing was auspiciously contemporaneous with the release of the White House’s new 800+ page global warming report, Climate Change Impacts In The United States.
You do not have to have an opinion on global warming, or coal itself, to see a logic problem with the posture of eschewing companies that produce coal, but supporting companies that use lots of it. And we are not referring to coal-burning electricity utilities (though logic would argue Stanford divest there too), but to the legion of tech companies that are in many cases right in Stanford’s backyard, and that are some of the world’s biggest users of coal-by-wire.
The principle business of the tech community is anchored in bits. But all bits are electrons (or their quantum cousins, photons) and thus the Internet’s monthly exabytes of data traffic consumes vast quantities of electricity. Coal remains the principle source of electricity for the U.S. and the world.
Companies such as Apple, Amazon, eBay, Facebook, Google, HP, IBM, Microsoft, Oracle, Rackspace, Salesforce, Twitter, and Yahoo, consume huge amounts of electricity from the grid, where over 85% of electricity comes from coal, natural gas, and uranium. The inescapable fact is that hydrocarbons utterly dominate the information-communications-technology (ICT) energy supply chain where coal is, on average, the biggest player supplying 40% of domestic electricity. Just ask Greenpeace, which released its new analysis of Internet energy use earlier this year.
Thus, for example, Google and Microsoft have built massive data centers in Iowa where coal supplies 70% of the electricity. As it happens, Iowa is also second only to Texas in wind generation. In Iowa, datacenter operators enjoy the benefit of saving a ton of cash, and getting green credit for investing a share of those savings in financing wind farms.
What about those wind turbines, you may ask. Well, wind can’t supply datacenters directly because the Internet runs 24×7 and wind is sporadic. Big hydro dams are an alternative, of course, but there are precious few of those and they frequently generate environmental opposition too. Natural gas is an emerging alternative (in the U.S.), but its price is more volatile and presents a challenge for locking-in guaranteed savings for big electric users, and for many environmentalists shale gas is no more favored than coal.
The global perspective matters, both for Stanford’s principles and economic reality. The well-known tech giants own or use datacenters all over the world. And while they are the digital economy’s icons, there are thousands of other lesser-known companies and tens of thousands of datacenters around the world, from Manhattan to Beijing, chasing the same cost metrics.
Speaking of China, for the sake of consistency, Stanford should embargo its portfolio managers from buying into the much anticipated and hot IPO of Alibaba which has an 80% market share of all on-line retail in China – a kind of eBay and Amazon combined, only bigger. Alibaba’s massive datacenters operate, at low cost, on China’s 80% coal-fired grid.
We all know where Apple’s products are assembled – China! Details of Apple’s worldwide manufacturing here
The pressure on datacenter operators to find cheap reliable power is going to escalate. Chasing expensive power won’t help. As the cost of data-centric technologies continues to decline, while electricity rates continue to climb, it will soon cost datacenter owners more to power computers than to buy them. The two costs are already roughly equal.
Meanwhile, demand for bits is escalating not just with the emergence of new big data services in developed nations, but also with torrid rise in data traffic in emerging economies. It is easy to see the physical linkage, not just the logical linkage, between the growth in electric-fueled bits and the source of electricity. According to the International Energy Agency (IEA), during the last 10 years of rapid tech growth, coal supplied 68 percent of the world’s additional electricity supply, and will account for at least half going forward even if a forecast $4 trillion in global alternative energy subsidies are actually spent.