Dear Reader,
“Compensatory generation” is not a topic that I would expect to be discussed around most dinner tables. In fact, I rarely hear anyone talking about it at all.
I’ve actually written about it quite a bit in The Bleeding Edge, with regard to the truth about what fuels electric vehicles (EVs). In order for us to have a complete picture of the benefits (or lack thereof) of EVs, we have to understand the complete lifecycle of the electricity from production to distribution, and ultimately utilization.
After all, electricity has to come from somewhere. More than 60% of electricity in the U.S. comes from coal and natural gas, with another 20% plus coming from nuclear fission reactors. Using electricity produced by fossil fuels to “fuel” an EV is the same as using gasoline… the only difference is where the fossil fuels are being burned (i.e., at the power plant or by the car).
Today, we’re going to have a look at the distribution of electricity after it has been produced. This is where “compensatory generation” and “compensatory emissions” come into play.
Here is what a typical power distribution network looks like:
Source: Semantic Scholar
After the electricity has been generated, which is typically from fossil fuels, it is sent to a power transformer, which prepares the electricity for distribution over power transmission lines. The distribution takes place over long distances and ultimately arrives at transmission substations, which further divides distribution to other substations, and ultimately industrial parks, commercial buildings, businesses, and eventually homes.
That’s all straightforward, but where things become problematic is in the transmission over these long distances over the power lines – The problem is that it is not an efficient process. As power is transmitted over the metal power lines, it causes resistance, which causes heat, and that ultimately results in material losses of electricity.
What this means is that the power industry needs to burn more fossil fuels to make up for the electricity that is lost through transmission. That’s compensatory generation, which also results in compensatory losses:
In the chart above, we can see that the compensatory losses from all this extra power generation results in almost one billion additional metric tons of carbon dioxide emissions. To put that into context, that’s almost as much as the annual emissions of all heavy trucks, and it’s more than the total emissions of the chemicals industry.
As I’ve written before, in most developed countries, we tend to see electricity losses through transmission and distribution fall somewhere between 7–15%. That’s a huge number. That’s why so much additional electricity needs to be generated to offset those losses.
But in countries like India and Brazil, the numbers are higher at 19% and 16%, respectively. And in some developing markets, the losses are greater than 50%. Imagine having to produce twice as much electricity as is needed just to account for transmission losses. Such an incredible waste.
It is possible to dramatically reduce these losses, but it would require a massive, global infrastructure project. Power transmission and distribution equipment would have to be upgraded to the latest, most efficient technologies. And inefficient transmission lines would have to be entirely replaced with high-tech distribution wires that reduce these distribution losses.
In the past, these inefficiencies weren’t considered to be that important. After all, energy has largely been cheap and readily available in most countries. But today, even a 15% or 20% reduction in electricity costs would make a huge difference to the average business or consumer.
It pains me to hear discussions or policies about clean energy without taking into consideration the whole picture. EVs are not a path to a clean future if the power generation, and power distribution and transmission issues, are not addressed at the same time. They simply displace carbon emissions.
Elon Musk and SpaceX have made another interesting announcement… The company is partnering with T-Mobile to enable remote cell phone coverage via its Starlink satellite constellation.
We’ve talked about Starlink quite a bit recently. For the sake of new readers, Starlink provides satellite internet services to consumers in remote locations where there are few, or no, alternatives for broadband internet access.
The big news is that Starlink will power cell phone coverage in remote locations as well. It’s the perfect complement.
And what makes this so interesting is that it will work with normal smartphones. T-Mobile customers won’t need any special equipment. That’s right, Starlink satellites will be able to transmit directly to a normal smartphone.
That’s because the satellites will operate over the same radio frequency (RF) spectrum as the phones. T-Mobile will set aside a certain amount of its spectrum specifically for this purpose.
Some of the media’s response to this development was pretty funny. I did get a good chuckle from this story. Some in the tech media suggested that this service makes nationwide 5G irrelevant. But nothing could be further from the truth.
All SpaceX and T-Mobile are doing here is filling in the gaps. This technology can eliminate all dead zones outside of its normal cellular network’s range. For example, if we’re hiking out in the mountains outside of the range of any cell tower, we’d still be connected via the Starlink network.
But it’s not a normal 4G or 5G wireless connection… This will be a low-bandwidth service. And it won’t work indoors.
Data transmission will, comparatively, be at a crawl (about 2 Mbps). It’s nothing like 5G. The speed will be good enough to send a text message or make a call (with latency and likely audio distortion). But that’s about it.
So really, this is primarily designed for emergencies. T-Mobile customers will always be able to reach out to somebody in the event of an emergency, no matter where they happen to be.
Of course, SpaceX and T-Mobile need to go through the Federal Communications Commission’s (FCC) approval process for this kind of service. But I’m excited to see this happening. There is great utility here.
And this is the first of what I believe will be many similar deals to follow. The reason is that wireless carriers have the RF spectrum to utilize for this kind of service. And companies like Starlink or Lynk Global have the satellites and technology to enable this kind of connectivity, via satellite to smartphones.
The great news is that dead zones will become a thing of the past. But let’s not be tricked by the uninformed media coverage… This technology is not going to compete with or replace 5G.
Orbital Reef, a project we’ve been tracking, just hit a major milestone. As a reminder, this is a new space station that Jeff Bezos’ Blue Origin is working on.
And Orbital Reef just passed its system definition review. That means NASA signed off for the project to move forward. This is a huge development.
The goal has always been for Orbital Reef to launch and become operational in space by 2027. Here’s an artist’s rendering of what it will look like:
The Orbital Reef Space Station
Source: Orbital Reef
How cool is this?
And with its system definition review out of the way, Orbital Reef’s timeline remains intact. That’s important because there is a sense of urgency here.
Regular readers may remember that there are talks of decommissioning the International Space Station (ISS) later this decade. That’s because it is reaching the end of its useful life.
The ISS launched on November 20, 1998. That means we are closing in on 24 years of the ISS in orbit. We need new space stations with up-to-date technology to fuel the burgeoning space economy.
Orbital Reef is one of the top candidates here. But it’s not the only one.
Another company on our radar, Axiom Space, is making great progress at an even faster pace.
Axiom’s approach is different though. It has partnered with NASA and has the exclusive right to attach modules of its future space station to the ISS. Axiom’s first module is scheduled to launch in 2024, and many more modules will follow.
Then, when the ISS is formally retired – and scheduled to plunge somewhere into the South Pacific – Axiom’s modules will decouple from the ISS as a standalone space station.
However it plays out, we are going to see new space stations in operation before the end of this decade. Axiom will be first, by 2025 at the latest, and one or two will follow around 2028. This is the beginning of a new space race, and an entirely new economy established in Earth’s orbit.
I know that this topic may seem a bit out there, but it is all happening right now. SpaceX for launch vehicles to orbit the Moon and Mars, Axiom Space for the first privately owned space station, a return to the Moon by mid-decade with a lunar base to follow, and a raft of companies developing the technology to mine valuable minerals from asteroids and the Moon to support a permanent presence in space…
We’re well on our way to becoming a multi-planetary species.
We’ll wrap up today by debunking a popular narrative.
I suspect most of us have heard about how the U.S. is falling behind Asia when it comes to science, technology, engineering, and math (STEM) education.
There was a lot of truth to this claim at one time. But we have seen a dramatic shift over the last 10 years.
And new research shows that the U.S. has turned a corner. The data actually surprised me…
This chart tells this story:
As we can see, the number of students at U.S. universities obtaining degrees in the humanities field peaked around 2012. These are majors like art, drama, gender studies, history, language, literature, philosophy, religious studies, and sociology. The broad humanities category has been on the decline over the past decade.
Meanwhile, the number of students obtaining degrees in science and computer science (CS) has been rising rapidly. In fact, science majors overtook humanities majors for the first time in 2017, and it appears CS majors are just a year or two away from surpassing the humanities as well.
This may come as a surprise to many of us. It directly counters the popular narrative. But it makes perfect sense.
Advanced CS literacy is one of the most valuable skill sets in the workforce today. Anyone who understands software development and how to code can command a very high salary in the marketplace – as can somebody with knowledge of artificial intelligence (AI) and machine learning (ML) techniques.
And there’s a high demand for these skills in most industries today, even ones that may not be immediately obvious.
Take biotechnology, for example. There was a time when chemistry majors were best suited for research and development within the biotech industry… Not anymore.
Today, computational biology is a very hot area within the biotech space. And computational biology is all about CS.
Today’s kids grow up with computers from elementary school on. It’s part of their daily routine. And they know when they look to college where the most jobs will be found, and the best salaries will be made. That’s why we are seeing such a strong surge in science and CS degrees.
And interestingly, this is creating a “third wave” for CS education. This next chart tells that story:
This chart depicts CS degrees as a percentage of all bachelor’s degrees (Bas) from U.S. colleges and universities. And we can see that CS degrees topped 4% exactly three times in modern history… Those are the three waves.
The first wave came back in the late 1980s. This was when mainframe computing became pervasive and there was strong demand for computer science skills.
The second wave came when the “dotcom boom” made the internet go mainstream. No surprise there.
And now we are in the midst of the third wave. And this one is the biggest of all.
It began when the 2008 financial crisis gave rise to the current generation of digital-first technology companies. These were the first companies to really focus on building their entire business with digital technology and leaving the analog processes behind.
Needless to say, I’m very excited about this trend.
From my perspective, STEM education is absolutely critical if we want to have a competitive workforce here in the U.S.
Even with CS degrees on the rise, there are still a massive number of job vacancies that aren’t filled due to the lack of workforce with these skills. That’s why corporations tend to be supportive of foreign work Visas. Right now, they are critical in filling those vacant roles.
We’re headed in the right direction, and I can only hope that this trend continues.
Regards,
Jeff Brown
Editor, The Bleeding Edge
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
