Tuesday, July 31, 2018

2019 US recession?



The yield spread--the difference between the yield on 10 year treasury bonds and 2 year bonds--is a sort of guide to economic conditions 2 years down the line.  It's not perfect.  For example, the yield spread (the green line in the chart above) forecast a slowdown in 1997-1999, but the actual recession only came at the end of 2000.  It forecast a much stronger recovery in 2008-2012 after the GFC than in fact happened (although after very deep recessions, the economy's response to stimulatory measures is much weaker and slower than after shallow recessions, because of the negative effects of the loss of confidence.  You can't "push on a string".)

Now it's forecasting a slowdown, at the minimum.  Yet GDP growth is accelerating.  Part of that acceleration is due fiscal stimulus ( the result of Trump's massive tax cuts) and part is due to the strengthening recovery in the rest of the world.  Plus, there is not a perfect fit between the yield spread and growth.  Other forces play a part in expanding or contracting growth.

The rising Fed Funds rate is also pointing towards a slowdown.  The chart shows that 12 month change in the Fed Funds rate, inverted (because rising interest rates lead to falling growth and vice versa) Notice how the 1997-1999 aberration between the yield spread and growth is explicable as a result of moves in the Fed Funds rate.  The rising Fed Funds rate (i.e., shown as declining in the chart below) points towards an imminent US slowdown.  This will be exacerbated as the effects of fiscal stimulus fade.  And it will be worsened by a trade war.  A recession in 2019 seems increasingly plausible.



➥(I forgot to put into the second chart that the Fed Funds rate has been plotted with a 21 months lag, just as the yield spread has)

Battery breakthrough

Even as conventional lithium-ion battery prices decline, there are several new technologies being developed.  One of the original inventors of the lithium-ion battery, John Goodenough, who is now a hale 96, is involved in a new lithium-glass battery.

A recently published paper in the Journal of the American Chemical Society titled “Nontraditional, Safe, High Voltage Rechargeable Cells of Long Cycle Life” (April 24, 2018) offers a glimpse into future battery technology. The following are some of the highlights of this new invention (via Axios and the JACS article):
1. It operates at room temperature.

2. It is a safe cell battery since it uses no liquid electrolyte.

3. It has “… double the energy density of existing lithium-ion…” batteries.

4. It can be both fast charged and fast discharged.

5. It is an “…all-solid-state rechargeable battery cell….”

6. It uses lithium.

7. It has a plasticizer able to react to changes in volume and store Lithium ions.

8. It uses a low cost oxide host cathode (meaning no Cobalt is used).

9. It can be charged to 5-volts. “The cell can be charged to a high voltage versus a lithium anode because of the added charge of the EDLCs [electrostatic double-layer capacitors].”

10. It has a long cycle life having achieved over 23,000 cycles. If cycled daily in an electric car, this would imply a usable life of 63-years.

11. Battery cell capacity increases as the number of cycles increases. This happens because the “…Li+- glass is not reduced on contact with metallic lithium, [thus] no passivating interface layer contributes to a capacity fade; instead, the discharge capacity increases with cycle number as a result of dipole polarization in the Li+-glass electrolyte leading to a capacity increase of the Li+-glass/plasticizer EDLC.”

12. It has the ability to retain a charge when unplugged.
In short, this is a low-cost, safe, high-energy-density, long-life, and low-degradation battery. It overcomes every single problem of current battery technology. In my opinion, this happens as a result of overcoming both the lithium-ion SEI (solid electrolyte interphase) battery problem and material degradation due to volume expansion.

Professor Goodenough had this to say regarding current lithium-ion battery technology, “There are three basic problems with the lithium-ion battery. First, you can’t charge it fast enough. Second, you can’t overcharge it without getting oxygen. And third, it’s got a flammable electrolyte with a window that’s not big enough. If you want energy density, you’ve got to have the voltage times the current.”

Several manufacturing companies are interested in the new battery technology, and are currently working in getting it ready for mass production; however, a working product will [only] be ready in a few more years from now.

More specifically in March 2017, Professor Goodenough had this to say, “…we have done many tests with laboratory cells. Manufacturing a marketable battery cell will take about 2 years of development by a competent battery company, but we have over 50 companies showing interest to be able to perform tests of our results. I am optimistic that our tests will be verified and that product development will begin soon.” These “…battery companies have shown interest in validating our findings and marketing products.”

Non-confirmed comments suggest that Tesla is aware of this technology.

[Read more here]

These new batteries will have a much longer life than conventional lithium-ion ("a usable life of 63 years"!!!!) and will therefore, when manufacturing gets up to speed, be much cheaper.

In 10 or 15 years' time, batteries will be ubiquitous: in our houses, in businesses, in out transport, in micro-grids, at substations in conventional grids, and at wind and solar farms.

Monday, July 30, 2018

The evil stupidity of climate denialism



This is a post from Open Mind.  I'm posting it in its entirety because I think it's excellent.


Imagine every single report ever about the link between cigarette smoking and lung cancer, from the 1960s when the surgeon general’s report came out up to the present day, beginning with the statement that “No single case of lung cancer can be definitively linked to smoking.

Now imagine being inundated by op-eds in the Wall Street Journal and reports from Fox News on the link between cigarettes and heart disease saying that People got heart disease long before there were cigarettes. Heart disease rates are always changing. It’s just a natural variation. Imagine someone “adjusting” rates of emphysema for the increase in population at risk, levels of ozone (natural of course, not man-made), the growth of urban vs. rural population, and concluding that emphysema has actually declined since people started smoking. Imagine someone repeating again and again that laryngeal cancer is mainly due to changes in the output of the sun.
 
Imagine the surgeon general pointing out that there is a huge consensus among physicians and medical researchers that smoking exaggerates all those illnesses, but a public relations guy appears and says there’s no such consensus — it’s based on flawed reports, he says, it’s just a made-up hoax. Imagine a “petition” from a group calling themselves the “Institute of science and medicine” claiming that over 31,000 scientists have signed their petition endorsing their view that There is no convincing scientific evidence that smoking is causing or will, in the foreseeable future, cause catastrophic health impact … and that …there is substantial scientific evidence that increases in smoking produce many beneficial effects …

Imagine hearings in the U.S. Senate and the U.S. House of Representatives disputing the health impacts of smoking. Imagine four U.S. Senators calling for an end to a smoking-education program, calling it “propaganda.” Imagine the chairman of the committee on space, science, and technology calling the scientific evidence a fraud. Imagine a congressman suggesting that increases in lung cancer, heart disease, and emphysema are due to rocks and dirt filling up our lungs. Imagine the Republican candidate for governor of Pennsylvania saying that one of the causes of lung cancer is … body heat from increased population.


Imagine the president of the United States tweeting that the smoking-disease link is just a hoax, a plot devised by the Chinese to make the American tobacco industry non-competitive.

If you can imagine that, then you know what the current political “climate” in the U.S.A. is like when it comes to the subject of man-made climate change.
There are always interesting articles at his blog.  I recommend it.


Extreme global weather the face of climate change

Chart shows global temperature anomaly in the 12 months to June each year.   Source: NOAA.  The 1998 and 2016 El Niños are clear, as is the longer-term uptrend.  There are rising odds of a new  El Niño in 2019.


From The Guardian:

The extreme heatwaves and wildfires wreaking havoc around the globe are “the face of climate change,” one of the world’s leading climate scientists has declared, with the impacts of global warming now “playing out in real time.”

Climate change has long been predicted to increase extreme weather incidents, and scientists are now confident these predictions are coming true. Scientists say the global warming has contributed to the scorching temperatures that have baked the UK and northern Europe for weeks.

The hot spell was made more than twice as likely by climate change, a new analysis found, demonstrating an “unambiguous” link.

Extreme weather has struck across Europe, from the Arctic Circle to Greece, and across the world, from North America to Japan. “This is the face of climate change,” said Prof Michael Mann, at Penn State University, and one the world’s most eminent climate scientists. “We literally would not have seen these extremes in the absence of climate change.”

“The impacts of climate change are no longer subtle,” he told the Guardian. “We are seeing them play out in real time and what is happening this summer is a perfect example of that.”

“We are seeing our predictions come true,” he said. “As a scientist that is reassuring, but as a citizen of planet Earth, it is very distressing to see that as it means we have not taken the necessary action.”

[Read more here]

Friday, July 27, 2018

Tesla Powerpacks in Samoa




I talked here ('Energy Poverty') about how micro-grids of solar panels, battery storage, and a limited village-wide grid in villages would allow millions of people in developing countries to escape energy poverty more cheaply than the traditional way, i.e., building giant coal-fired power stations and an extensive national grid. 

But solar plus storage is now also cheaper than diesel for island grids.

One of Tesla’s earliest microgrid projects with Powerpacks was deployed in American Samoa and now the company deployed two bigger systems in order to help the country of Samoa transition their energy production from the more expensive and polluting fossil fuels, like diesel, to renewable energy.

It started on the island of Ta’u in American Samoa where Tesla deployed a 1.4 MW solar array and a 6 MWh energy storage system with 60 Tesla Powerpacks back in 2016.

Tesla’s energy storage system could cover the island’s electricity needs for 3 days and enabled them to retire a costly and polluting diesel generator.

The Samoa islands are located about 4,000 miles from the West Coast of the United States and the transport of the diesel alone was a significant part of the cost of the electricity supplied to the resident of Ta’u and it wasn’t always a guarantee that the boats would come.

It enabled a new kind of security and reliability to the island grid and now the concept is expanding to other islands in American Samoa.

Now Tesla has deployed two more Powerpack projects at the Fiaga Power Station and the Faleolo International Airport on the main island for a total of 13.5 MWh of energy storage capacity.

[The Prime Minister] added:

“Since the batteries have been running on trial tests, the quality (voltage and frequency) of the electricity supply has been very steady and not fluctuating as before. On least cost operation, E.P.C. is now able to reduce the use of diesel generators from four to two and sometimes limited to one generator during off-peak times. E.P.C. is now working collaboratively with Tesla in taking one step further to totally operate the system without a diesel generator.”
[Read more here]

When the tide peaks, it's not always immediately obvious that it's happening.  Is that wave a little lower than its predecessor, or am I imagining it?  Yet, after a while it becomes obvious that the tide is retreating.  The tide is going out for fossil fuels.  And their decline is accelerating.

➥ The first solar/battery pack combo in 2016 had roughly 14 hours of storage, assuming a 30% capacity for the solar panels.   Presumably this will be adequate most of the time, and the diesel generators will be kept as back-up for exceptional periods of low insolation.  As battery costs plunge, increasing storage capacity will become relatively cheap, and the diesel generators will be turned off permanently.


Thursday, July 26, 2018

Over 6,000 Model 3s per week

Or at least, so Bloomberg's Tesla Tracker forecasts.  Although their forecasts have moved around a lot over the last 3 months (partly because of Tesla's shutdowns of their assembly line for improvements) their estimate for total production in the quarter was only 2% out.

For me, the interesting question is whether Tesla will go on with this rapid rate of expansion.  Musk has admitted that this explosion in production has been hell, and the temptation must be to slow down the rate of expansion from now on.  His original chart of planned production was an S-curve,  and we're prolly more than half way through that.  And there are plenty of other Tesla initiatives which need attention: the solar roof tiles, the solar panel business, and Powerwall and Powerpack.  At 6000 Model 3s per week, Tesla is profitable, and it must be very tempting for him to try and avoid having to raise capital on the stock or bond markets.  A sustained 6000 per week will reassure the markets that Tesla will survive and flourish, and it will also generate positive cash flow and profits.


Wednesday, July 25, 2018

Real wage growth anaemic

Since the GFC (global financial crisis) real wage growth, i.e., the growth in wages after inflation has been accounted for, has fallen sharply.  The blue bars show real wage growth in Q4 2017, year-on-year, and the purple dots show real wage growth in Q4 2007, just before the GFC hit.   Remember that since the GFC, all these countries have experienced some rise in real GDP, which implies what we know from other evidence that all or most of the growth in GDP has not "trickled down" to the workforce.

Source: OECD

Monday, July 23, 2018

Denver to go 100% renewable by 2030

Denver


From EcoWatch:

Denver became the 73rd city in the U.S. to commit to 100 percent renewable energy when Mayor Michael Hancock announced the goal in his State of the City speech Monday, The Denver Post reported.

The commitment is part of the city's larger 80×50 Climate Action Plan unveiled by Hancock Tuesday, which seeks to reduce Denver's greenhouse gas emissions 80 percent from 2005 levels by the year 2050.

"Climate change threatens our people directly, putting our health, environment and economy—our very way of life—at risk," Hancock said, as reported by The Denver Post.

The plan calls for all municipal facilities to source their electricity from renewable sources like wind and solar by 2025 and for the city's entire electric grid to go renewable by 2030.

Denver first made its commitment to reducing emissions 80 percent of 2005 levels by 2050 in its 2015 Climate Action Plan. The current plan is the result of almost two years of discussion with experts and community stakeholders, Hancock wrote in a letter introducing the full text of the plan.

Hancock said that cities had a particular responsibility to act on climate change.

"Though cities account for only two percent of land globally, they are responsible for more than 70 percent of carbon emissions," he wrote.

[Read more here]

This pattern of municipalities setting ambitious renewable energy targets is repeated across the world.   And in the USA, even though at Federal level the government is doing the best it can to bring back coal,  states and municipalities are working hard for a greener future.  Thanks to a combination of falling costs and increasing evidence that global warming is happening and getting worse, the push to de-carbonise our economies just keeps getting stronger.

Sunday, July 22, 2018

Tesla heading for $100/kWh cell cost

I talked here (EVs cheaper than petrol cars by 2022) about how rapidly battery costs were falling.  EV Obsession has just reported that Musk thinks Tesla's battery packs will be below $100/kWh of storage by 2020.

One of the more interesting revelations to come out of the 2018 Tesla Shareholder Meeting  was updated information about Tesla’s current battery costs and projected reductions over the next 2 years.

A question was put forward by shareholder Joel Sapp, via twitter — “has Tesla broken the seal of $100/kWh?” Initially, Chief Technical Officer J.B. Straubel gave a polite, interesting, but non-specific answer regarding the current costs. Then CEO and Chairman Elon Musk took the microphone and answered as follows:

"We think at the cell level probably we can do better than $100/kWh maybe later this year… depending upon [stable] commodity prices…. [W]ith further improvements to the cell chemistry, the production process, and more vertical integration on the cell side, for example, integrating the production of cathode and anode materials at the Gigafactory, and improved design of the module and pack, we think long-term we can get below $100/kWh at the pack level. Which is really the key figure of merit for a car. But long-term meaning definitely less than 2 years."

It’s good to see Tesla is still both well ahead of the competition on costs today, and also still on track to keep improving their costs at around 15% per year. The most recent cost indication we had was in early 2016, when Tesla said they were already under $190/kWh cost at the pack level. Transforming cells, via modules, into the whole battery pack typically adds 30% cost per kWh on top of the cost of the cells alone. Here’s the graph of Tesla’s battery pack cost trend line, showing significant cost advantage over the industry average which is regularly tracked by BNEF:



Source: EV Obsession


[Read more here]

Note that this chart is plotted on a log scale, which is a much better way to show rates of growth or decline.  A straight line means a constant rate of increase or decrease.

What the chart indicates is that by 2025, even non-Tesla manufacturers will be able to sell EVs as cheaply as petrol/diesel cars (ICEVs)

This also has vital implications for transforming the grid.

Currently, the Tesla Powerwall battery costs $5,900 for 13.5 kWh of storage (including the inverter/transformer but not other supporting hardware)  Let's assume the inverter costs $700 (and inverter costs are falling rapidly too) that means the battery pack costs $5,200.  This is 3 times what the car battery pack costs about now ($130/kWh).  Tesla needs to charge this much because it needs to make a profit and generate cash to show it can, and that need won't go away until prolly the end of this year or later.  Also, why cut the price of the Powerwall/Powerpack when sales are not demand constrained but supply constrained?   Plus, Tesla batteries are still cheaper than the competition.  The cost of the car battery pack gives some idea, though, of just how far battery costs for grid and household storage could fall.  At $100/kWh storage, the cost per kWh delivered will be just  2.7 cents for 24 hours of storage.  You will be able to have a battery with a day's supply in your house for less than $1 per day.  OK, retail battery storage will prolly remain relatively more expensive than car  batteries if only because of installation, which will not be at industrial scale.  But for wholesale/utility-scale storage, with its economies of scale, storage will add just $27/MWh for 24 hours of storage to the cost of wind or solar. Remember, that's just 2 years away.  Renewables will be unbeatable.

If you think  of global CO2 emissions being (very roughly) 1/3rd for electricity generation, 1/3rd for land transport and 1/3rd for everything else (steel, cement, sea transport, agriculture, and forest clearing) we will probably be able to cut emissions by 2/3rds by 2030 as we green our grid and our transport.  The pressure to deal with the remaining carbon-heavy industries and to stop forest clearing will be intense.

Saturday, July 21, 2018

Tesla bet the shop

Source: Teslarati


Tesla bet the shop on the Model 3, and it's looks very likely that that bet has succeeded.  From Teslarati:

True to the CEO’s prediction, the 5,000/week milestone that the company achieved at the end of Q2 2018 seemed to have ushered in a new standard for the production of the electric car. Prior to the end of Q2, Tesla was still struggling to build the Model 3 according to its self-imposed targets. Despite doubts from Wall St. that the 5,000/week pace for the Model 3 was unsustainable, signs have emerged since the beginning of July suggesting that the production ramp of the vehicle this Q3 2018 would be better than what critics expect.

Tesla’s journey to reach this point, however, has been painful. In an interview earlier this month with Bloomberg, Elon Musk admitted that his Model 3 gamble came at a high price. Musk noted that while he believes that the Model 3’s production hell is about to end, the whole ordeal has caused him to develop some “permanent mental scar tissue.” In the same interview, Musk also mentioned that he is optimistic about the next few months, and that he would let Tesla’s results speak for themselves.

These results are starting to emerge in a steady stream now. Since the beginning of July, Tesla does not appear to have relaxed its push to deliver as many Model 3 as possible. Test drive programs were started, more than 19,000 new Model 3 VINs were filed in half a month, a new 5-minute Sign & Drive delivery system was adopted, and the Fremont factory appears to be as busy as ever.

Reports have also emerged that Tesla Senior Director of Investor Relations Aaron Chew recently met with investors and analysts, where he reportedly revealed that Tesla is targeting a sustained production rate of 5,000-6,000 Model 3 per week for the third quarter. To support this continued ramp, Tesla seems to be optimizing its workforce once more. Since July started, the electric car maker’s hiring activity has jumped 19%. On July 1, Tesla had 1,662 job openings, and by July 16, the company had 1,974 open positions. Among these, openings for sales and deliveries, such as Customer Experience Specialists and Delivery Experience Specialists were many. Openings for Field Service Associates, which would be assigned to Tesla Energy, have also shown a rise since the beginning of the month.

Perhaps Tesla’s biggest vote of confidence for the Model 3, recently came in the form of Sandy Munro of Munro & Associates, who recently completed his teardown and analysis of the electric car. While initially critical of the Model 3 due to its build quality, Munro ultimately admitted in a recent Autoline Network segment that he had to “eat crow” with regards to the electric car, adding that the vehicle, particularly its battery and electronics, were a “symphony of engineering.” Munro also concluded that based on his company’s teardown and analysis, the Model 3’s Long Range RWD variant could give Tesla a 36% profit. The Detroit veteran further noted that even the base Model 3, which costs $35,000, can give Tesla a profit of 18%.

[Read more here]


California reaches emissions target early

From The San Francisco Chronicle:

In a major win for California’s fight against global warming, the state appears to have hit its first target for cutting greenhouse gases — and it reached the goal early.

Data released Wednesday by the California Air Resources Board show that the state’s greenhouse gas emissions dropped 2.7 percent in 2016 — the latest year available — to 429.4 million metric tons.

That’s slightly below the 431 million metric tons the state produced in 1990. And California law requires that the state’s emissions, which peaked in 2004, return to 1990 levels by 2020.

Since the peak, emissions have dropped 13 percent. The 2008 financial crisis helped, cutting the number of miles Californians drove and the amount of freight moving through the state’s ports, railways and roads. But emissions have continued falling in recent years even as the state’s economy has expanded.

[Read more here]




In absolute terms, the cuts required from now on are indeed significant.  But, actually, achieving those goals is feasible.  Assuming emissions continue to fall by 2.7% per annum, emissions will have fallen to 300 metric tonnes, which misses the 2030 target.  It is likely, though, that the fall in emissions will accelerate, as EVs and PHEVs gain market share, and as gas and gas peaker plants are replaced by solar plus storage.  At a decline of 3.6% per year, just 1 percent per annum more than California achieved in 2016, the 2030 target will be achieved.  From 2030 to 2050, the decline in emissions would have to increase to 5.4% per annum (the absolute decline year to year will be 17.2 million tonnes a year vs 13.1 million tonnes per year between 2016 and 2030) to achieve their 2050 target, and again, this seems feasible.

Reminder:  Between 2004 and 2016, California's real GDP rose 26%.  Proving conclusively -- if we needed such proof -- that we can cut emissions while maintaining economic growth.  California, the world's 6th largest economy, is showing us how it can be done.

The tiny nation hosting a new space race

Luxembourg.  Source: BBC


I talked here about how SpaceX with its BFR will cut the cost of launching a kilogram of cargo into space from $22,000 to $180, a decline of more than 2 orders of magnitude.  Tony Seba says that if you get a cost decline of one order of magnitude, that will lead to "disruption", where a new technology replaces an older one, and leads to whole new industries emerging.  Think of mobile phones and the internet and the new industries these created (Uber, Amazon, Google, Netflix, blogging .....)  It's tempting to think, yeah, yeah, but that's all years away.  And yet the BFS (the upper stage of SpaceX's new giant rocket/spaceship combination) will be performing short "hops" in the first half of next year, before doing orbital launches in 2020.  Meanwhile, in one European country, space industries already make up 2% of GDP:

As a new space race gathers pace, many tech executives have sold Mars as humankind’s off-Earth destiny. But they may be looking too far afield. Our most immediate chance for life-beyond-Earth lies much closer, a path likely to be blazed by far lesser-known companies.

Building colonies on the Moon will “provide a blueprint to Mars”, Nasa scientists say. The men and women who will found these lunar settlements will in all likelihood be employed by small private mining companies, not tech tycoons. Many of these companies are connected to the tiny EU nation of Luxembourg.

Amazingly, Nasa believes such Moon colonies could be established within the next four years.

Takeshi Hakamada is one of those trying to boldly return to where humanity has set foot. This time, however, there is a much more commercial dream in mind: to scour the Moon for profitable mineral and gaseous resources, as well as life-sustaining lunar water.

Hakamada is the CEO of ispace, a private space exploration company based in Tokyo, which also has a presence in Luxembourg. It plans to complete a lunar orbit in 2020, and then attempt a soft lunar landing in 2021.

“Our first two missions will act as a demonstration of our technology. From there, we will begin to establish a high-frequency transportation service to bring customer payloads to the moon,” he says. “If we find water resources on the Moon, we can develop a whole new resource industry in space.” The discovery of a frozen water basin would be a monumental moment for our species, as it would allow humans to stay off Earth for longer periods.

Hakamada is far from alone in his cosmic ambitions. There now are 10 space-mining companies (including ispace) legally domiciled in Luxembourg since the launch of the country’s space resources law in February 2016. This was fuelled by a fund worth $223m (200m euros/£176m). For these space ventures, the Moon is one of two primary targets being considered; commercial ventures also are eyeing near-Earth asteroids for mining metallic resources (as covered in this recent story on BBC Future). Between the Moon and an estimated 16,000 near-Earth asteroids, the resources available could be rich enough to produce the world’s first trillionaire, some experts – including renowned astrophysicist Neil deGrasse Tyson – have said.

[Read more here]


Friday, July 20, 2018

Life after coal

Port Augusta, South Australia (Source: Wikipedia)



The largest solar farm in the southern hemisphere lies on arid land at the foot of the Flinders Ranges, more than 300km north of Adelaide. If that sounds remote, it doesn’t do justice to how removed local residents feel from what currently qualifies as debate in Canberra.

As government MPs and national newspapers thundered over whether taxpayers should underwrite new coal-fired power, mauling advice from government agencies as they went, residents of South Australia’s Upper Spencer Gulf region have been left to ponder why decision-makers weren’t paying attention to what is happening in their backyard.

In mid 2016, this region was on the brink, hit by the closure and near collapse of coal and steel plants. Now it’s on the cusp of a wave of construction that investors and community leaders say should place the region at the vanguard of green innovation – not just in Australia but globally. There has been an explosion in investment, with $5bn spread over the next five years. There are 13 projects in various stages of development, with more than 3,000 construction and 200 ongoing jobs. The economy of this once-deflated region has been transformed and those who live here are starting to feel hopeful again.

The Port Augusta mayor, Sam Johnson, a 32-year-old former Liberal [in Oz, that means conservative] member, is continually surprised at how resistant some are to the idea that the energy environment has changed. “You might choose to ignore what’s happening here now because we’re out of sight, out of mind, but the reality is that what’s happening here is going to be happening on the eastern seaboard in the next 10 years,” he says.

In simple terms, the Upper Spencer Gulf transition story goes like this. Port Augusta was a coal town, home to the state’s only two lignite – or brown coal – plants, Playford B and Northern. Playford B, ageing and failing, was mothballed in 2012. Northern, the larger and younger of the two, closed in May 2016 when owner Alinta Energy decided it was no longer economically viable. The Leigh Creek mine that supplied it, by then offering up mostly low-quality coal, shut at the same time. About 400 workers at the plant and the mine lost their jobs. Roughly a third retired, a third found other employment locally and a third had to leave town to find work.

At the same time, further around the gulf, the steel town of Whyalla was teetering precipitously after the owner, Arrium, put the mill in voluntary administration facing debts of more than $4bn.

Two years on, the Port Augusta city council lists 13 projects at varying stages of development. And Whyalla has unearthed a potential saviour in British billionaire industrialist Sanjeev Gupta, who not only bought the steelworks but promised to expand it while also spending what will likely end up being $1.5bn in solar, hydro and batteries to make it viable.

Gupta says the logic behind his investment in solar and storage is simple: it’s now cheaper than coal.
If you have time, read the whole article.  The 13 projects include Australia's first concentrated solar power (CSP) plant, its first salt-water pumped-hydro storage system, a combined solar/wind/storage farm which will deliver baseload electricity, and the southern hemisphere's largest solar farm.  And by the way, all these projects will take South Australia's renewables as a per cent of its electricity demand to over 80%.  This will be the highest in the world for a region which has no hydro power.  Notice also in the table in the article that almost all the projects include storage of one kind of another, as you would expect with renewables penetration at this levels. 

The Labor Party in SA lost the last state election, and before the election, the Liberals [i.e., the conservatives] were very hostile to the energy transition that Labor had been pushing.  Now that they're in office, they have flipped, and are supporters of the shift.  They also support the construction of a a new high-voltage interconnector to NSW to sell SA's surplus power into the NSW electricity market, which is the largest in the country.


Thursday, July 19, 2018

Carbon Taxes won't hurt the economy.

From Dana Nuccitelli at The Guardian:

Eleven teams participated in a recent Stanford Energy Modeling Forum (EMF) project, examining the economic and environmental impacts of a carbon tax. The studies included “revenue recycling,” in which the funds generated from a carbon tax are returned to taxpayers either through regular household rebate checks (similar to the Citizens’ Climate Lobby [CCL] and Climate Leadership Council [CLC] proposals) or by offsetting income taxes (similar to the approach in British Columbia).

Among the eleven modeling teams the key findings were consistent. First, a carbon tax is effective at reducing carbon pollution, although the structure of the tax (the price and the rate at which it rises) are important. Second, this type of revenue-neutral carbon tax would have a very modest impact on the economy in terms of gross domestic product (GDP). In all likelihood it would slightly slow economic growth, but by an amount that would be more than offset by the benefits of cutting pollution and slowing global warming.

The modeling teams examined four carbon tax scenarios, with starting prices of $25 or $50 per ton of carbon dioxide, rising at 1% or 5% per year. These are somewhat modest policy scenarios; CCL proposes a starting tax of $15 per ton rising at $10 per year, and the CLC proposes $40 per ton rising around 4% per year. The most aggressive policy considered by the Stanford EMF teams ($50 per ton rising 5% per year) falls in between these two proposals.

The modeling studies consistently found that for all four carbon tax policies considered, whether the revenue is returned via rebate checks or by offsetting income taxes, the direct economic impact is minimal:

In every policy scenario, in every model, the U.S. economy continues to grow at or near its long-term average baseline rate, deviating from reference growth by no more than about 0.1% points. We find robust evidence that even the most ambitious carbon tax is consistent with long-term positive economic growth, near baseline rates, not even counting the growth benefits of a less-disrupted climate or lower ambient air pollution

The last sentence is critical. The analyses consistently found that coal power plants would be the biggest losers if a carbon tax were implemented, and the costs associated with health impacts from other pollutants released by burning coal (e.g. soot and mercury) are substantial. Phasing out coal power plants results in significant health and economic benefits to society.

So does slowing global warming, of course. A working paper recently published by the Federal Reserve Bank of Richmond concluded that US economic growth would slow by an extra 0.2–0.5% per year if we stay on our current climate path (3–3.5°C global warming) than if we meet the 2°C Paris target. This compares favorably to a less than 0.1% per year slowing of the US economic growth rate under the carbon tax scenarios.

[Read more here]
In economics, it is a general principle that we need taxes to pay for collective goods like justice, police, local roads, etc.  We should therefore choose better taxes over worse taxes.  So we tax alcohol and cigarettes but not green veggies.  From that point of view, a carbon tax is a good tax, especially if it is introduced slowly so that the economy has time to get used to it, because it slows global warming and reduces pollution.  If the proceeds of the carbon tax are distributed to the populace via, say, a quarterly cheque, it will have no macro-economic effect and will in fact be slightly re-distributive, because the poor spend proportionately less (and therefore proportionately less on stuff made with fossil fuels) than the rich do, while the carbon tax "dividend" will be an equal amount per capita.  It also means that every member of the public can see their compensation for higher petrol and gas prices.

The carbon price each year 2020–2050 in proposals by Citizens’ Climate Lobby (blue), the Climate Leadership Council (red), and the four approaches modeled by the Stanford EMF teams (green). Illustration: Dana Nuccitelli

The new electric VW Kombi

The VW 'ID Buzz', alias 'The New Kombi'.  Source: Green Car Reports



After the massive diesel-testing scandal ("Dieselgate") VW entered full-on PR mode, promising it would do better, and that it would start switching its production to EVs.  Nearly 3 years later, and it's becoming clear that they really meant it--new humongous battery orders, and new "concept" models.  The one I like most is the replacement for the VW Kombi, an iconic vehicle from my youth.  And now, VW has announced that the new EV range will also be produced in Germany as well as the US, to ensure that demand can be satisfied, and to tweak the range for US tastes.  The new Kombi will go on sale in 2022.   Despite this late roll-out, it does look as if VW is genuinely making the shift to EVs.   It's not at all clear that the other large legacy car makers are, though Jaguar and Volvo also appear to be switching.

Volkswagen plans to build two of its upcoming electric cars in the United States.

VW's North American CEO, Hinrich Woebcken, told British magazine Autocar that the models will be built in the United States and sold domestically.

"For strong product momentum, they need to be produced in the USA," he said. "It’s not possible to come into a high-volume scenario with imported cars. We want to localize electric mobility in the U.S.”

After years of selling niche products imported from Germany that were too expensive and too small to compete with big sellers in the U.S., VW began designing separate models for the U.S. market and building them in Tennessee.

The Passat, built in Tennessee for sale in the U.S. and China, is significantly larger than the Passat sold in Europe. The Atlas was designed specifically for the U.S. as the largest SUV VW has ever made. It is now sold in Britain, too.  The company has had considerably more success selling the Passat and Atlas here since it designed the cars specifically for the U.S. Building them here makes it cost-effective, as well.

[Read more here]

One thing's for sure.  The new Kombi, with the powerful torque from an electric motor,  will have much better speed uphill than the old one! 

Wednesday, July 18, 2018

Energy poverty

There are some 1 billion people in the world without electricity.  If you have access to electricity, you take it for granted.  A press of a switch, and there's light, or warmth, or access to the outside world via phone or internet.  If you look at poor countries round the world, they correlate well with energy poverty.  The revolution that electricity has brought since the late 1880s is taken for granted by people in developed countries, yet it is perhaps one of the greatest inventions ever, and changed the world dramatically.  So closely were electricity output and industrial production intertwined that up until recently, growth in electricity production/demand was an excellent indicator of growth in overall industrial production.  And that close relationship between economic growth and electricity demand has only ended in recent years in developed countries because of the invention of things like LED light bulbs and more efficient white goods.

Bringing electricity to developing countries is complicated.  It's not just a question of building new power stations but also of building out the grid.  And those mammoth projects have to be funded.  We in developed countries take the grid for granted.  It's there, with wires on the street.  But it took decades to build out, and it costs.  A lot. 

In the wake of the Sustainable Development Goal conference underway this week at UN headquarters in New York, Bloomberg NEF has released an analysis on the potential for off-grid solar PV to meet clean energy demands of the estimated 1 billion people currently living without access to electricity.

According to the analysis there are five key factors that indicate off-grid solar PV is going to play a pivotal role in providing universal energy supply.

Chief among these factors is the cost of power grid expansion. The analysis stipulates that it could range between $266 and $2100 per household to establish a connection. In high-income areas, this is less of a problem, as households are equipped to pay additional energy prices. Additionally, energy prices would climb higher in low-income areas, as the grid operators have to amortize the installation with modest energy consumption.

Bloomberg NEF calculates that energy from solar home systems costs around $1.5/kWh and if sourced from microgrids would be $0.29-0.77/kWh. The report goes on to claim that the costs of electricity after a new connection would be $1/kWh, hence higher than the costs of energy if a microgrid is deployed.

[Read more here]

Micro-grids make a huge difference to economic output and productivity:

At a UN High-Level Forum on Sustainable Development Goals, global off-grid solar association, Gogla, released a new report evaluating the economic impacts of off-grid solar systems in East-Africa. The report, sourcing data from 2,300 households, indicates that the deployment of solar systems in the region has had a significant impact on the respondents’ lives.

The data shows that 58% of the households, which had recently installed an off-grid solar system, worked more or developed their enterprises, due to the availability of electricity. Additionally, 36% of the households reportedly ramped up their average income by an additional US$35 per month. In the region in question, this is equivalent to 50% of the average monthly GDP of a household.

Furthermore, because of electric lighting, the respondents reported that they could spend 44% more time at work or on chores. Previously, nightfall had prematurely interrupted these activities. This improvement generates income for the households and increases the economic activity of business owners, the report says.

With the possibilities of using technologies like smartphones more, 11% of the respondents reported that they had started a new business following electrification from off-grid solar systems. In 7% of the households, at least one member of the household reported having received a new job as a result of the solar energy deployment.

The report surveyed 2,300 people from Kenya, Mozambique, Rwanda, Tanzania, and Uganda. A range of companies delivered small-scale pay-as-you-go solar systems, which comprised a solar panel, battery, LED lighting and potentially other devices, depending on customer needs.

[Read more here]

The coal-loving Right argues that the best way to get rid of energy poverty is to build massive coal-fired power stations in developing countries.  Nope.  Aside from the fact that coal power stations need prodigious quantities of water, and produce pollution, they and the extensive national grids they require are too costly.  The best way to get electricity to poor communities in Africa, Asia and elsewhere is to build out tens of thousands of solar-powered micro-grids, in every village which is currently unconnected to an outside grid.  Our best foreign aid would be to fund such micro-grids, not giant projects like dams and power stations.  The good news is that poor countries tend to be located in places where insolation is the greatest.  This makes them perfectly suited to solar grids.

A micro-grid solar installation in Olturoto, Kenya.  Source: PV Magazine

Putin's rug

From the Ozzie cartoonist Peter Broelman




Monday, July 16, 2018

Immigrants are stripping Europe of her culture

Dear old Donald.  Such a star.


Temperature and sea level rise

A nice chart from @ArtforCC

The horizontal axis shows time, the vertical axis the sea level anomaly, and the colours the global temperature.  As the comment thread suggests, next time they should label the axes!  But it's still a nice way to depict them.


Sunday, July 15, 2018

Heatwave makes Americans believe in climate change

Source: The Star


From The Guardian:

The warm temperatures that have scorched much of the US appear to be influencing Americans’ acceptance of climate science, with a new poll finding a record level of public confidence that the world is warming due to human activity.

A long-running survey of American attitudes to climate change has found that 73% of people now think there is solid evidence of global warming. A further 60% believe that this warming is due, at least in some part, to human influences.

Both of these findings are record highs in a twice-yearly survey that has been conducted by the University of Michigan and Muhlenberg College since 2008. The latest poll was conducted during May, which was hotter than any May recorded in the contiguous US in 124 years of record keeping, according to the National Ocean and Atmospheric Administration, eclipsing the 1930s during the Dust Bowl era.

“There’s lots of evidence that contemporary weather is a contributing factor to belief in climate change,” said Chris Borick, director of the Muhlenberg College Institute of Public Opinion. “But there are other factors. People are telling us they are experiencing a climate that isn’t what they remember in the past and the evidence itself, such as declining polar ice, is having an effect. Americans are moving to a lot more confident space on this.”

But there remains a yawning ideological divide when it comes to climate change in the US. The survey found that while 90% of Democrats accept there is solid evidence of climate change, only 50% of Republicans feel the same.

Read more here.

The funding that oil and coal interests have given to the Right has successfully poisoned the well.  But even Republicans are starting to accept that there is climate change.  It is just their representatives in politics, beholden to the fossil fuel interests that fund them, which don't.  Every decade that goes by, global temperatures will rise another 0.2 degrees C.  Time to vote out polticians and parties which don't take climate change seriously.




Tesla battery capacity and range

An interesting article from Inside EVs:

As the chart shows, individual data points are all over the map, but the overall trend is just what you’d expect: higher power consumption at higher speeds. At 65 mph on a flat road, the median Model S consumes about 20 kW. That’s a lot of power – the large and powerful Model S is not the most efficient of EVs – but it’s far less than any fossil vehicle would burn. ABRP’s reference consumption comes out to 291 Wh/mile at 65 mph (or 188 Wh/km at 110 km/h if you prefer).

Source: Electrek
(FYI, 30 metres/second equals 108 kph or 67 mph)


There are other interesting charts showing range compared with temperature, which you can see here.  As you'd expect, when you have to run the car's heater, range is reduced, though because these are Teslas, still OK.

What interested me, though, was the energy consumption difference between EVs and ICEVs.  188 Wh/km for an EV at 110 kph is equivalent to 0.2 litres of petrol(gasoline) per 100 km--see this handy calculator.  Compare this with average (i.e., including low speeds) petrol consumption of 5-10 litres per 100 kms for ICEVS (5 l/100km for small cars up to 10 for big ones--see this info sheet.)  A Tesla Model S is the equivalent of a Merc (7.4 l/100 km) or an Audi (9.1 l/100 km.)  That means that in terms of energy usage, EVS are about 40 times more efficient than ICEVs at converting power to kinetic motion.  I knew EVs were much more efficient, but I had no idea it was that much.

Saturday, July 14, 2018

US EV/PHEV sales up 49%

US EV (all electric) and PHEV (plug-in hybrid electric) sales in the US rose 49% in June over June 2017.


As a percentage of total car and light truck sales, the trend in EVs/PHEVs continues to be steadily rising.



Year on year growth is high partly because 2017 was a year of slow growth in EV sales as the market waited for the new Nissan Leaf and the Tesla Model 3.  Having said that, if Tesla achieves my forecasts (production of 10,000 Model 3s per week by Mid-December 2018) total US EV sales will more than double, just from the Model 3 alone, taking EV sales to over 3.5% of all car sales.




➥ Caveat:  It's possible that having achieved 5000 Model 3s per week, Tesla might slow the growth in production, for a  couple of reasons. 

  • The additional new temporary production line at Fremont is in a tent with a limited permit from the municipality.  Building a permanent expansion to the factory will take time.  
  • And although Tesla will be profitable and cash-flow positive in Q3 and Q4, Musk may wish to fund more of Tesla's growth from internal cash flow and less from the markets.  That would mean growth in output would slow.
  • The company has been in "production hell', as Musk calls it.  Maybe they'd like to slow things down a bit.

Friday, July 13, 2018

Chad picks solar

Ennedi Plateau in northeastern Chad


Chad isn't big in the scheme of things to do with global warming, except as a sufferer of its effects.  Its population is about 14.5 million, of whom 13 million have no access to electricity.  Why do I find it so interesting?  Because Chad won't be choosing solar because of fossil fuel's effect on the climate.  From their point of view, if the big emitters (US, Europe, China, India, Japan and Russia) aren't doing anything, why should they, a poor country, make big sacrifices?  No, they're doing it because solar is cheaper.

Because they already have 125 MW of diesel and heavy fuel oil generation capacity, they won't need storage to balance solar output.  They can just run the fossil fuel generation at night and let solar take care of demand in the day.  The 200 to 400 MW capacity of the new solar investment will produce 60 to 120 MW of output, assuming a capacity factor of 30%.  So this new solar capacity will do more to cut the cost of electricity than to expand supply.  But that's not a bad thing: electricity from diesel or oil is very expensive.   Access to cheap energy is the key to economic development.  The next stage will be to add solar PV with storage (or a CSP plant), for the capital, and solar PV with storage for regional towns.  Insolation across most of Chad is among the highest in the world.  Building out a grid would be very costly, so distributed generation via solar plus storage is the way to go.

Across Africa, solar is taking off.  Costs are falling, and the understanding and awareness of grid operators and governments is increasing.  It makes the bitter recalcitrance of right-wing governments in the US and Australia towards renewables even harder to understand.

Thursday, July 12, 2018

World IP decelerates

My index of world industrial production (composed of the weighted average of the industrial production indices from 50 countries) has rolled over.  That's not the same thing as saying the world is in recession.  Not yet, anyway.  What has rolled over is the year-on-year growth rate--world IP is growing more slowly.  Right now, 70% of the industrial production indices I monitor are growing more slowly than they were  (some are now going negative).  The big positives are the US and Canada, with Mexico also improving in recent months, where IP growth rates are still accelerating.  Europe and the BRIC countries are slowing.

The chart below shows the year-on-year change in world industrial production compared with the percentage of year-on-year rising growth rates of the 50 monitored countries.  This diffusion index, as it is called, tends to lead turns up and down.  If the US and Canada turn down--and the Fed will go on raising the Fed funds until something breaks--the world will be perilously close to a recession.  If the trade wars intensify, a recession will be inevitable. 

I have some more on this, but that's for another post.


Sunday, July 8, 2018

The coal flip out

I found this chart (from IEEFA) telling.  The black bars represent additions to capacity of coal-fired power stations.  Notice how from 2015-16 to 2017-18 new coal capacity plunges, to be replaced by capacity added in solar.  It's a complete inversion: solar goes from small to dominant and coal goes from dominant to small.  This trend is only likely to continue.  Solar will just go on getting cheaper, coal will remain filthy, polluting, water-guzzling and expensive.  India has just announced a new 100 GW by 2022 solar target.  This is pretty much double the current construction rate.

Within the next 18 months to 2 years, solar will become cheaper than new coal in all the other countries in Asia, especially given the current crash in PV module prices.  Currently, coal is still cheaper than solar, just.  But when the cost of solar drops below coal in these countries, their shares of solar vs coal will also flip.   Steady retirements of coal power stations in developed countries will 
combine with no new coal power stations in developing countries to cause peak coal--in just a few years' time.



Oz's Rabid Right denialists

Via JPratt27:




Saturday, July 7, 2018

2017: A record year for renewables

In 2017, just 22.6% of investment in new generation capacity was in fossil fuels.  Some of that was in gas, which is still (though prolly for not much longer) the complementary generation of choice to match renewables, because it can be easily dialled up and down to match fluctuations in demand and supply.  I forecast that the percentage of new investment in electricity generation for coal will fall away to zero over the next 5 years, while investment in gas will continue at a diminishing pace for a little longer.  That 22.6% will be half that in 5 years and gone in 10.


Unfortunately, by end-2017 just 7.5% of total electricity generated came from wind and solar.  (My data, based on IRENA's data  plus a variety of other sources, have a slightly lower number, 7%.) 

However, the growth in output from wind and solar is very high.  In 2002, just 0.34% of world electricity came from wind+solar.  By 2010, that had reached 1.79%, by end 2017, 7%.  Assuming ( for wind) that the last 5 years' growth in output, 16% per annum, is continued, and assuming solar ups its 5 year growth pace from 33% per annum to 40% (solar is now the cheapest source, and storage is plunging in cost) then, by 2020, wind+solar will be 10.24% of total electricity generation, by 2025 29.11% and by 2030 99%.  That assumes the growth in global electricity demand accelerates from the current 3-ish % per annum to 4.5% to allow for the increase in demand for electric cars/lorries/buses.  Of course, we still have to allow for hydro and legacy nuclear in the mix, so wind+solar will never reach 100%, and the growth rates in wind and solar will slow as we get closer to market saturation.  But the key point is that we will achieve zero (or near zero) emissions from electricity generation in 2030 or thereabouts.  Alas, by then, world temperatures will have risen another 0.2 degrees C.



Friday, July 6, 2018

Model 3 dominates

In June, Tesla's Model 3 again dominated US EV sales.  In fact Tesla's 3, Y and X, were the top-selling pure EVS.

GM's Bolt and the Nissan Leaf are the only other 100% electric cars which sell above 1000 per month, but the Model 3 leaves them way behind, now.  Note that the chart shows sales not production.  It is probable that Tesla reduced deliveries in June so that its total sales won't exceed 200,000 until early July, in order to extend the $7500 Federal tax credit.  Which means Model 3 sales will jump in July.

(Source of data: Inside EVs)






Rising inequality reduces growth

See more David Horsey cartoons here.


It is pretty much accepted in economics that some inequality in income is not only fair, but also adds to economic growth.  A doctor, who studies for 5 years, and goes without income during that time, perhaps also ending up with a huge student-loan debt, should earn more than people who haven't done what she did.  How much more is a matter for debate.  The economists' answer is that the market will decide--if the benefits doctors gain aren't enough, fewer people will study to be doctors and a doctor shortage will develop.  (Of course, medical associations constrain the supply of doctors by setting high standards for entry into the profession, allegedly for safety reasons.  However, ambulance paramedics who study basically what doctors study, but for 4 years instead of 5 or 6, earn less than half what doctors earn.  Medical, law, and other professional associations are effectively trade unions/monopolies, and their power is always written into the law.)

Or take Elon Musk.  He has transformed or is in the process of transforming three key industries: space, transport and energy.  Good on him that he has in the process made himself enormously rich, though that is clearly not his motivation.   We should be glad that he has been successful driving these transformations, and not regret his reward.

So most economists agree that some degree of inequality is necessary for growth.  But how much inequality?  And, critically, if some inequality is good for growth, would more inequality be better?  Well, it turns out that rising inequality decreases growth:

Income inequality has widened in most OECD member countries during the past two or three decades. These trends are well documented (see references). According to a traditional measure of inequality, the Gini coefficient, income inequality rose by 10% from the mid-1980s to the late 2000s, while the ratio of top income decile to bottom income decile reached its highest level in 30 years.

Within countries, indicators of inequality, such as the Gini coefficient, say little about who has benefited or lost from these trends. A closer look at the situation of households provides a more complete picture and shows that in many OECD countries, gains in disposable incomes have fallen short of increases in GDP. This has been particularly the case for poorer households: in nearly all OECD countries for which data are available, GDP growth was substantially higher than households’ income growth in the lowest quintile.

Some countries have seen widening disparities in the lower half of income distribution, taking place even when overall inequality has been narrowing–this pattern is particularly striking in Spain. In other countries, such as Australia, the United Kingdom and the US, between 20% and 50% of total income gains generated have accrued to the top 1% of households, pointing to rising inequalities also within the upper half of income distribution.

A certain degree of income and wealth inequality is a characteristic of market economies, which are based on trust, property rights, enterprise and the rule of law. The notion that one can enjoy the benefits from one’s own efforts has always been a powerful incentive to invest in human capital, new ideas and new products, as well as to undertake risky commercial ventures. But beyond a certain point, and not least during an economic crisis, growing income inequalities can undermine the foundations of market economies. They can eventually lead to inequalities of opportunity. This smothers social mobility, and weakens incentives to invest in knowledge. The result is a misallocation of skills, and even waste through more unemployment, ultimately undermining efficiency and growth potential.

To explore the question further, our study estimated a relationship for GDP per capita in which a change in income inequality was added to standard growth drivers such as physical and human capital. The idea was to test whether the change in income inequality over time has had a significant impact on GDP per capita on average across OECD countries, and if this influence differs according to whether inequality is measured in the lower or upper part of the distribution. The results show that the impact is invariably negative and statistically significant: a 1% increase in inequality lowers GDP by 0.6% to 1.1%. So, in OECD countries at least, higher levels of inequality can reduce GDP per capita. Moreover, the magnitude of the effect is similar, regardless of whether the rise in inequality takes place mainly in the upper or lower half of the distribution.


[Read more here]

As in medicine, where one pill may help you return to health, but 10 will make you sick, in economies, modest inequality is good for growth, while extreme inequality is bad.  If inequality has risen 10%, the implication is that growth has been 6 to 11 percentage points lower than it would have been.  It's bad enough that whereas once the tide of economic good fortune lifted all the boats, now it only lifts the superyachts, but it's a real problem when too many superyachts mean there is no tide at all.

Here are some of several previous pieces I've written on this:

Inequality reduces growth.

The rich get richer

The Failure of American capitalism

The new American aristocracy

Karl Marx was right.