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Renewable and fossil electricity generation costs compared
Posted by Rembrandt on December 27, 2010 - 3:02pm
To reduce fossil fuel use in electricity generation, the implementation of renewable energy is supported via subsidies or market mechanisms in many countries. These are required because the costs of renewable electricity are substantially higher than fossil fuel based power generation. In this article, the difference in cost structure is made clear by looking at the 2009 industrial and household electricity price in comparison with short-term cost forecasts for 2015 for nuclear, fossil, and renewable electricity generation.
Special attention is paid to the difference in interest rates of borrowed capital for energy projects. This has a large influence on nuclear and renewable energy costs as these require larger upfront capital investments. For example, nuclear electricity becomes cheaper than natural gas generation at low discount rates, but more expensive at high discount rates. In case of renewables at higher discount rates only onshore wind costs fall below household electricity prices in most countries, while in case of lower discount rates this is also the case for offshore wind and solar thermal electricity.
Introduction
The future electricity supply of countries is highly dependent upon making choices under uncertainty. The lifetime of a power plant is at least 20 years and can range up to 60 years, so the selection of power plant types has a long lasting effect. The costs of fossil fuel or nuclear power plant inputs is difficult to forecast as events in recent years show, and similarly is it difficult to forecast the decline in costs of renewable energy.
One of the choices that politicians have to make in the present is how to support renewable energy sources. Many OECD countries have put in place feed-in tariffs, which provide a fixed tariff on top of electricity prices to pay for renewable electricity. The idea is to stimulate renewable electricity to the extent that prices drop sufficiently over a long time period, so that it will be able to compete with fossil fuel power sources. Opposition to this system comes from those who think that costs will not drop sufficiently, at least not in the foreseeable future, leading to a lasting cost burden for society to create access to sufficient electricity supply.
To make an informed decision we, therefore, need to know a lot about different aspects of electricity generation. Including the technical potential of different electricity sources, how base-load and intermittent electricity sources can be combined, the requirements and costs of the electricity grid, and how the costs of electricity generation will develop over time depending upon technological change and input costs.
In this article a part of the data is provided for such an analysis by outlining the anticipated costs of electricity generation in OECD countries in 2015, and comparing this with 2009 price levels. This gives a perspective on how big the gap is between the costs of fossil/nuclear and renewable electricity generation in the near- to midterm future, as well as an idea about what society can afford to pay. The costs of electricity storage are not incorporated here, as these are not that relevant at the renewable electricity shares we are talking about in the near term future.
The costs of electricity generation at different discount rates
The generation costs of electricity sources for OECD countries are documented in detail by the International Energy Agency (IEA). Every few years they publish a report on the Projected Costs of Generating Electricity. The report documents the costs of electricity generation five years ahead by looking into expected costs of power plants built, as well as some are planned for construction in the near-term future in the OECD. For the 2010 report data of 187 power plants have been taken, including 72 renewable electricity power plants, 20 nuclear light water reactors, 27 natural gas fired power plants, 48 coal power plants, and 20 CHP power plants of which most are natural gas fired.
The calculations take total costs of the power plant during its lifetime including decomissioning in case of nuclear energy. These are divided by electricity generated during the same lifetime to get costs per kWh generated. The main financial factor of influence is the interest that needs to be paid on the capital borrowed for the power plant investment, also called the discount rate. The IEA includes two interest rates for their cost calculations, 5% and 10%, which provide a lower and upper bound. Jerome a Paris of the Oil Drum, who works in energy project investment for the wind sector, informed me that for private sector investments in energy projects 7-8% is a reasonable interest rate in today's market. Utilities on the other hand are closer to a 5% rate for long term investments as they are able to borrow very cheaply. A second factor of major importance are assumed fossil fuel prices. As I do not have access to the full report I unfortunately do not know what the IEA assumed in this respect.
The data from the IEA report is given in table 1. There median costs and the cost range in dollar cents per kWh for seven different electricity sources is tabulated. The costs in general vary widely per source, for example at a 5% interest rate the levelised costs for Nuclear electricity generation were found to range between 2.9 and 8.2 dollar cents per kWh (in respectively Korea and Hungary).
The price of electricity
Electricity prices for household and industry in the OECD are documented in detail in the Energy Prices & Taxes report of the International Energy Agency. The differences between industry and households price levels of this data set were described in detail in a previous post. The importance of making this distinction in choosing for the type of electricity supply is that there is a large difference in cost patterns. In nearly all countries industrial users of electricity use the most electricity and have to pay the lowest electricity price, as the tax burden mainly goes to household electricity users. The most extreme example is Denmark where electricity prices including taxes for Industry users are 12 US dollar cents per kWh, while household electricity prices are 36.5 US dollar cents per kWh. In discussing about the affordability of electricity sources for society it makes sense to look at both industrial and household electricity prices, and compare these with electricity generation costs. Often comparisons are only made on the household level which paints a distorted picture.
The electricity price and costs of nuclear and fossil electricity compared
Figures 1 to 4 give an overview of median OECD electricity generation costs for coal, natural gas, and nuclear electricity at 5% and 10% discount rates. The numbers used are from the IEA can be found in table 1. These are compared with the price of electricity in 2009 for 27 selected countries at a household and a industry price level. Households and small companies usually pay higher prices due a different tax structure. Sometimes, such as in my home country the Netherlands, there are also price agreements between public utilities and large industrial energy users to keep them more competitive. The industry price level, therefore serves as the lower bound, and the household price level as the upper bound of the electricity price.
The electricity price and costs of renewable electricity compared
Figures 5 to 8 give an overview of median OECD electricity generation costs for onshore wind, offshore wind, photovoltaic solar, and solar thermal electricity at 5% and 10% discount rates. The numbers used are from the IEA and can be found in table 1. These are compared with the price of electricity in 2009 for 27 selected countries at a household and a industry price level.
Observations
These observations pertain to a comparison between 2009 electricity prices, and the IEA 2015 expected median costs of electricity generation. These should be seen as best available indicators, not as absolute realities for the short-term future. They do not incorporate fully all factors such as storage costs, intermittency requirements, and flexibility of electricity generation. For a fully meaningful comparison incorporating such issues is required which will be the goal of future posts in this series.
- The costs of nuclear, coal, and natural gas are expected to remain cheaper than all renewable energy sources in the short-term future.
- The cost of nuclear electricity generation is strongly influenced by the chosen discount rate. At the 5% interest rate, nuclear energy is less expensive than natural gas while at a 10% interest rate it is more expensive.
- At a 5% interest rate, the costs of onshore wind electricity are significantly below electricity prices exluding taxes for households as well as industry in most countries, but this changes for a 10% interest rates where costs rise above industry electricity prices in 22 out of 27 countries.
- The costs of offshore wind electricity and solar thermal electricity at a 5% interest rate are below electricity prices excluding taxes for households in 14 out of 27 countries, but above prices for industry. At a 10% interest rate the costs rise above the electricity price for both household and industry in the majority to all of 27 countries.
- The costs of photovoltaic solar will remain above electricity prices in the short-term future regarding what interest rate used or whether household or industry electricity prices are taken as a reference.
- The costs of renewable energy are in general highly affected by a higher interes rate on borrowed capital, but this is even more so for solar energy technologies.
End notes
The author is aware that this is only a partial analysis and that it would have been better to:
- Compare electricity costs of different technologies for respective countries, but the author does not have the data to make such a comparison.
- To also include merit order effects for wind-electricity on the power market in this overview. Detailed information can be found in this report.
- Include data on the costs of electricity storage and how this affects the price of electricity.
If someone wants to provide specific information on these in the comments that would be helpful.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Some early thoughts as I'll need to re-read the article
1) capacity adjustment; if an intermittent source has 25% capacity factor it is not really comparable with coal or nuclear. Fix it to make the capacity say 85% either through overbuilding or gas fired backup.
2) discounting; just work out costs to 20 years from now. Forget decommissioning costs of retired plant as they are unknowable and too far into the future.
3) CO2 penalties; either cap and trade or carbon tax. At a minimum I'd assume a carbon tax of $20 per tonne of CO2 or 2c per kilogram. That could make a big difference to coal's cost advantage which is the whole point.
4) location dependence; presumably solar thermal won't be practical at 60 degrees north nor offshore wind mid-continent. Perhaps a compatibility map should be added.
My mistake if any of these points have already been incorporated. More later.
Regarding capacity ~ since the cost given is for generated electricity, not for production capacity, that already adjusts for different relationships between average production and capacity ~ an additional capacity adjustment would be double counting.
That is correct, however a quality adjust would be merited. Note the quality adjustment isn't necessarily negative, if it is solar PV or solar thermal, and it comes during peak demand, the quality multiplier could be well above one.
1. Discounting all cash flows, including decommissioning, is the technically correct way of doing this analysis. You are correct that the difficulty in estimating costs is a problem, but that is mitigated, to some degree, by the long duration as this reduces their impact significantly. Using a 20 year period and ignoring everything after that has too much risk of favoring technologies that produce most of their value over a period of not much more than 20 years and have significant decommissioning costs.
2. The discount rate should be based on cost of capital, not just cost of debt. This is typically done using a weighted average cost of capital (WACC) (http://en.wikipedia.org/wiki/Weighted_average_cost_of_capital). Aswath Damodaran of NYU has done estimates of cost of capital by sector and estimates power generation WACC in the US at 8.23% (http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htm).
3. It is not technically correct to use the same cost of debt for all technology types or to view utility borrowing rates as a proxy, although for purposes of this analysis, it is probably the best first pass. Cost of capital is defined by the riskiness of the project not the borrower. Utilities have a low cost of debt because they are borrowing for low risk projects (proven technologies, safe off take agreements, etc). If a utility borrowed to invest in an internet start up, they would either borrow at the same rate as you or me if it was done as non-recourse finance, or it would increase their overall borrowing cost of it were done on their balance sheet. Again, for purposes of this analysis, I don't think it is worth creating different costs of capital for each technology type, but we should be aware that this would be the technically correct method.
4. Several factors, such as fuel costs, technology cost curves, decommissioning, subsidies, etc. would make good sensitivity analysis topics.
Overall, this is a great analysis and I will look forward to reviewing it and the comments more carefully. Thanks.
Given the finite and depleting nature of our fossil fuel resources, a good case can be made for using a "Social Discount Rate" for evaluating these tradeoffs as opposed to the traditional market based WACC approach. This is what Sir. Nicholas Stern did in his Stern Review on the Economics of Climate Change as discussed here. http://www.nytimes.com/2006/12/14/business/14scene.html
Having a too high of a discount rate often leads society into Social Traps http://faculty.babson.edu/krollag/org_site/soc_psych/platt_soc_trap.html that are difficult, if not impossible to get out of.
True. Stern has done excellent work in this area and I will follow your links. However, a social discount rate is easier to use when the cost of the problem can be clearly defined, as it can be in climate change. In the current analysis, climate impacts and other pollution related problems could easily be incorporated, either as part of the core analysis or as a set of scenarios. Future energy costs could be as well, but forecasts can be highly subjective. But I do agree that you point is an important one.
Jack - Thanks for your response. I value the the WACC approach in capital budgeting and have depended upon it for decades....and still do for my business. However, lately, the more I have been thinking about the social implications of peak fossil fuels and climate change, the more it causes me to reconsider using "market" discount rates built up using the CAPM in these areas. I am of the belief that we too often use too high of a discount rate to make important long term decisions and it has lead to many social traps that we now have to deal with. While it is difficult to forecast our fossil fuel situation, there is strong case to be made that we are at or near peak fossil fuels. Given that we have a finite FF energy bank account, we need to make important decisions on the rate at which we should begin investing these FF assets into creating a renewable energy stream that will operate well into the future with little fossil fuel energy support. IMO using traditional discount rates gives too much weight to the present and causes us to continue to burn up our remaining fossil fuels without due consideration for the future.
Jim,
I think it's a mistake to focus too much on discounting. The real problem we face in kicking the FF habit is the resistance of a minority that will be be injured - those whose careers and investments depend on legacy industries.
A realistic discount rate, combined with the appropriate public policy (e.g., carbon and fuel taxes, efficiency regulations, etc) will work just fine.
"A dark ideology is driving those who deny climate change. Funded by corporations and conservative foundations, these outfits exist to fight any form of state intervention or regulation of US citizens. Thus they fought, and delayed, smoking curbs in the '70s even though medical science had made it clear the habit was a major cancer risk. And they have been battling ever since, blocking or holding back laws aimed at curbing acid rain, ozone-layer depletion, and – mostly recently – global warming.
In each case the tactics are identical: discredit the science, disseminate false information, spread confusion, and promote doubt. As the authors state: "Small numbers of people can have large, negative impacts, especially if they are organised, determined and have access to power."
http://www.guardian.co.uk/commentisfree/2010/aug/01/climate-change-robin...
and
"The billionaire brothers Charles and David Koch are waging a war against Obama. He and his brother are lifelong libertarians and have quietly given more than a hundred million dollars to right-wing causes."
http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?curren...
Good comments Nick. As you point out, there are lots of good tools available in the toolbox....including creating more transparency relating to FF subsidies and externality costs.
And there are a heck of a lot of external costs that need to be charged back to the consumers of oil/FF: direct pollution, CO2, $3T in war costs...
A dark ideology is driving those who deny climate change.
And what about the people who see proposed solutions as nothing more than a way to enrich the "Monied class"?
http://www.environmentalleader.com/2009/12/08/uk-report-just-30-of-carbo...
Carbon reduction spending is only 30% effective. For every unit of cash spent on the Carbon reduction - a unit goes to investment bankers like Goldman Sachs.
I agree that it is becoming increasingly important to incorporate social costs in energy project investment analysis, but haven't seen many methodologies that are robust enough. I have seen projects that forecast pollution control cost offsets (often in biogas projects in livestock or agricultural process sectors), but this is driven by actual or expected impacts of the regulations on industry cash flows, so the external costs are already internalized by the government. Thailand created a very powerful and successful regulatory framework that was driven largely by energy security concerns. Their methodology was something like setting rough targets for new generation by sector, then creating incentives to help developers meet these. The incemtives consisted of feed in tariffs that varied by technology and project size, as well as a broad supporting environment that improved project economics. In some cases, government incentives reduced cost of debt to near zero.
As I mentioned above, incorporating the social costs of climate change are relatively straight forward as we have a huge amount of data on impacts and some premise for future carbon costs.
While I agree that we face a future of resource constraints, it is going to be near impossible to incorporate these at a large scale in public sector projects until the government formally acknowledges the issue. I think the private sector may well invest in projects that have exposure to energy prices as part of an investment strategy in the case that their own internal price forecasts are higher than the market's.
I do think many countries and investors are starting to incorporate energy security in energy policy, investment startegy and target setting, but have not yet seen a formal methodology. I do think we need one.
As well as a doubling in the discount rate it would be really useful to know the sensitivity to fuel cost (or to see the split between capital, non fuel operating cost and fuel costs for each mode). Gas in particular would be expected to be very fuel cost sensitive.
So . . . to some degree this says we should invest a lot in renewables now while interest rates are low.
But that said, it is really hard to get much buy in considering that natural gas is real cheap right now, is domestic, and is relatively clean.
Renewables, or nuclear.
Yes, I know that those who favor one usually consider the other anathema. I suggest these people read James Lovelock and see if enlightenment follows.
Howard Odum would have also agreed.
Once man can show that man can be responsible with fission power man should then proceed.
Replacing the bones of corpses of people who work in the fission industry with broomhandles in order to attempt to cover up how dangerous fission is shows how far Man has to go. Along with successful attacks on fission plants can create a 30 mile no-go zone per the Chernobyl example - Man's war like nature
On the renewable side you have people who advocated taking every scrap of plant matter, charring it, and mixing the char with Zinc to make batteries who ignored the strip mining of soil fertility in that vision of a solution.
You all might wish to look at changing the money system (money acts as a proxy for energy) so it is no longer based on interest thus requiring "growth" and move to a powerdown model.
For a good study, someone really needs to determine a link between commodity prices and interest rates. This only seems to be looking at the CapEx costs which are obviously heavily tied to interest rates. Renewables will have bigger CapEx but zero fuel costs for solar & wind. The non-renewables will have a lower CapEx cost but they have to pay for fuel. Obviously, higher interest rates will hit the renewables harder since they have larger up-front CapEx that must be financed with loans that become more expensive at higher interest rates . . . . but what about the fuel costs? Do they also natural rise along with interest rates? Interest rates are often pushed up by central bankers when they sense inflation. And inflation hits fuel costs (often very hard). So perhaps one has to assume rising fuel costs at the same time as rising interest rates since those interest rates may have been pushed up by bankers in direct response to inflation (which is rising fuel costs).
Perhaps the changes between the two are not very big? . . . although rising interest rates hit renewables harder, the non-renewables will be hit by higher fuel costs thus making it a wash?
This is obviously just off-the-cuff rambling . . . serious analysis would be interesting.
> serious analysis would be interesting.
Makes me remember a statement by a German politician, Horst Seehofer I think it was, which went about like: I always thought dealing with costs in the health system was complicated. That was before I had seen it in the energy sector. He's a former health minister.
That said, for renewable electricity sources in the US, the publications from the Berkeley Lab's Environment Energy Technologies Division look pretty solid (e.g. this one).
Mind you, other places can yield widely different quantities. Wind in Switzerland was said to cost around 20 cent not so long ago. In Spain, it seems to be priced at 4.5 now, in Portugal at almost ten. I remember it being 6 to 7 cents in Spain a couple years ago. UK onshore wind was usually rather expensive, even though they have a far better resource base. It seems safe to say that all generation price is local, and nothing will get built on OECD average.
Turbine prices at the factory gate may vary too. Went up recently even as delivered quantity increased hugely, now on the way down again even as raw materials are becoming more pricey. Learning curves will get you only so far, other factors have their say. Financing, other commenters have spoken about it probably better than I could.
I also understand the fossil side less well, but can't stop wondering if the IEA'd be prepared to offer hedging against the above coal generation price in 2015. Nuclear fission is military tech and thereby priceless indeed.
Then there is the cost versus price theme. Observation skills have lead me to the conclusion that there is no agreement on the costs of the various options, let alone in monetary terms. Good for forum debates.
Final note that the Berkely Lab also have some data on geothermal in Exploration of Resource and Transmission Expansion Decisions in the Western Renewable Energy Zone Initiative and that I couldn't find anything recent on biomass from them. The latter by the way is an entire topic of its own, as you may have guessed. Somebody?
Wind in Spain, it seems to be priced at 4.5 now
Spain is home to Gamesa - a firm that has had 'issues' in China.
http://www.nytimes.com/2010/12/15/business/global/15chinawind.html
If the cost of wind depends on local development and then worldwide sales China may see low wind costs also.
Three points, for now.
These costs do not, of course, include the many external costs, such as effects of climate change, expense of long term storage if nuclear waste, even the much more minor problems of birds and wind towers. And of course, the likelihood that carbon will eventually taxed and even rationed should also be figured in.
Another notable feature of the graph is the apparently high cost of solar. But in most areas, solar will be performing at its peak just as peak energy use is occurring--the hottest, sunniest times corresponding as they usually do to the highest AC usage. And around here, at least, an institutions use of electricity at the years peak electricity use sets the charges for the electricity that the utility will charge for the whole year.
It would be hard to figure this in precisely, but it is safe to say that future high temperatures/high electricity usage in the future will on average exceed those of the past, due to GW.
The other huge factor left out was the comparative expense of nega-watts. A watt saved is a watt earned, after all. I am betting that conservation measures of various sorts are going to be far, far lower than any of these production-oriented approaches.
Has anyone tried to incorporate these factors into a fuller calculation of the relative costs of these modes of electricity generation?
I totally agree with the comment about "negawatts" (while admitting my conflict of interest since I work in energy efficiency). While EE is always the "red-headed stepchild" in any energy discussion, I have no doubt that energy efficiency will be by far the most economic approach as compared to ANY new generation option that is fairly burdened with externalities, transmission/distribution costs,etc.
Although the EU has much lower energy intensity per unit of GNP than the US, there is tremendous opportunity for energy conservation in Europe. Single-glazed windows, uninsulated attics/walls, and and ancient inefficient furnaces/boilers abound. While these low-hanging fruit of EE are not addressed, investing in new generation seems like an obvious mis-allocation of funds. While Northern Europe has reasonably good building codes for new construction, the vast majority of the existing building stock has not been addressed. Also electric resistance heating is very common in Europe, allowing energy consumption reductions of 50% or better by using heat pumps instead, etc., etc.
Much better said than I could have. Sometimes even some environmentalists sound a bit like Dick Cheney to me with their near exclusive focus on production. It's like focusing on adding more logs to the fire while all the doors and windows are just standing open.
Is this just some kind of inherent myopia, or is it that there is much more money to be made (and lost) in production than in conservation?
FWIW, we're replacing 400-watt metal halide steelers in a municipal garage that operates 24/7 with 6-lamp T8 high bay fluorescents. The installed cost of these replacement high bays is approximately $150.00 (fixture, labour, permit, man lift, lamp recycling, etc.) and the demand reduction is 0.233 kW. This translates to be just under $650.00 per kW saved and the corresponding cost per kWh is less than $0.01 when amortized over ten years. For a facility that operates 60 hours per week, the ten-year cost per kWh saved is $0.02 and virtually nil after that.
In an office environment, we can replace a 4-lamp T12 troffer with a new 3-lamp T8 lay-in, reducing fixture load from 160 to 63-watts, often with a notable bump in light levels. At an installed cost of $75.00 per fixture, the cost per kW saved is less than $800.00, and at 60 hours per week, the ten-year cost per kWh saved is $0.025, or less when you factor in the related a/c savings.
We've trimmed our labour charges for 2011 and negotiated some very aggressive pricing with our material vendors so that our DSM services will be even more cost-competitive going forward.
Cheers,
Paul
Our college is about to replace the program that controls temperature in most buildings on campus for the first time since it went in the 70s (or early 80s). This will not only save millions, paying for itself in two to three years, it will make all the buildings much more comfortable, rather than the over heating and over cooling (and sometimes both at the same time!) that seems to have been the norm.
Even so, it wouldn't have happened if it weren't for a particularly persistent facilities guy, and a grant from the stimulus package.
Count yourself amongst the lucky ones. We've been working with the facilities manager for a major New Brunswick university for several years now trying to convince the Board of Regents to fund various efficiency upgrades and no matter how compelling business case they don't budge. The university is fairly well-endowed, but they're unwilling to finance these kinds of initiatives even though the risk is low and the returns far exceeds their traditional investments. It's beyond comprehension.
Cheers,
Paul
What reasons do they give? Assuming they're willing to give some kind of feedback...
Hi Nick,
No official explanation offered, at least none has been passed on to us. Anything beyond that would be speculation and hearsay so I should probably leave it at that.
Cheers,
Paul
Note that 95%+ of today's nuclear "waste" is either unburnt uranium (U-235 or U-238) or isotopes of Pu, Am and Cm which are themselves fuel for reactors we know how to build.
Essentially all uranium is either fissionable with fast neutrons or fertile material (or both). That means none of it is "waste" until it is either fissioned or transmuted (by accident) into americium or curium which doesn't make energy in the reactor it's in. Fast-spectrum reactors have a much greater probability of fission than neutron capture. If you want to get rid of this "waste", argue for fast-spectrum reactors which will turn it into heat and fission products before it becomes a problem!
Another solution is LFTR, (Liquid Fluoride Thorium Reactor). It can be run on Thorium, and/or SNF, (Spent Nuclear Fuel). Waste from todays reactors gets burned up in LFTRs with a reduction of nuclear waste over time.
LFTR uses a thermal spectrum, so it has many of the same issues regarding actinide burning that LWRs do (they tend to capture slow neutrons and get heavier rather than fissioning). But actinides can be used to start LFTRs which then go on using U-233 they breed from Th-232, and the remaining actinides (and any bred by chance in a LFTR) finished off in fast-spectrum reactors. The two types are complementary.
The largest input into costs, particularly for the nuclear option, is the time involved for permitting and construction. I did not find the assumptions used for schedule with resulting impacts on materials inflation and interest during construction.
That is an excellent point. Large solar plants can come on line very quickly and can be returning capital within a year or so. This would change the equation substantially compared to a much longer period for other systems.
I am not an advocate for solar in developing countries generally as the higher costs lead to significantly higher rates at even low percentages of generation. However, I spoke with some policy makers in the Philippines recently who may need to make a trade off of a higher cost installed capacity base for increased power now. Solar looks better in this context.
A distinction needs to be made between grid-connected and off-grid solar in developing countries. While I agree that grid connected solar is usually too expensive a central generation option for developing countries, off-grid solar lighting systems are rapidly penetrating developing country markets with and without subsidy, since off-grid solar PV competes with expensive, inconvenient, and dangerous kerosene and car batteries.
Between cell-phones and local power, some regions in developing countries may not bother to connect to national grids for a long time, if ever. In remote regions, local generation and storage may be cheaper than transmission and distribution costs, and even if they are not, funds to extend the grid are just not available anyway.
good point. There was a good NYT article a few days ago on that:
http://www.nytimes.com/2010/12/25/science/earth/25fossil.html?_r=2&pagew...
We have many locales that are off grid and served by diesel generators. A restaurant on the hill, houses along the bay etc. With the cost of grid connect the cost of solar needs to be compared with cost of running a genset, not just the fuel but the transport of it with many places around the bay accessible only by boat. Comparing the cost of solar vs electric units,in those situations, makes no sense at all.
NAOM
Solar installations can be built progressively more easily than FF. The first stage can be producing while the second is in construction and the 3rd in preparation etc. How does this affect the costings on a project?
NAOM
Implementing the project in stages would shorten cash flow tenor and provide value in terms of real options, the ability to decide later whether and how to proceed. This would significantly reduce cost of capital in the latter case and the NPV of the cash flows in the first.
Energy, not money is the real economic wealth. Money can be printed or created with the stroke of pen and is only a marker for economic wealth.
Given the critical nature of energy to humanity, a case can be made for using a very low discount rate (ie 0%-1.5%) in evaluating energy alternatives....even if the "market" discount rate for money is much higher. Sir Nicholas Stern used a similar approach in valuing the future impacts of climate change.
Using this very low discount approach makes it more apparent that we need to invest some of our remaining FF energy bank account into renewable energy supplies that will last (at least a while) beyond cheap oil. That is, convert finite and depleting energy assets into an annuity stream of future energy flows. Of course, this also makes nuclear power a lot more cost competitive.
Money is merely a medium of exchange. The thing that is being exchanged is energy.
I think you just about said that money represents energy, which is correct. I presented some details on that a while back.
http://www.theoildrum.com/node/7048/735318
"I think you just about said that money represents energy, which is correct."
Dechert, I'd go further than that and argue that money represents BIOLOGICAL, or ecological energy, not just plain old energy. This is because all money is a claim on human labour and human labour is powered solely by ecological energy sequestered from sunshine by plants (of course there is more to human consciousness than just energy but this is the thing which drives our bodies to do work).
I think I have managed to bridge together thermodynamics, ecology, and economics. I have written a long winded treatise which summarizes my thoughts if you are up for some late night reading. You seem like the kind of person that would be interested in that kind of thing. It would be interesting to hear your thoughts. I still would like to expand a few areas more, like the current banker fraud that is destroying the world's financial system.
http://markbc.wordpress.com/thermodynamics-for-economists/
Well, I don't agree with that. I noticed in your essay that you distinguish between "technical" energy and "biological" energy. The cold hard fact: energy is energy. It's all energy. Strictly speaking, we are only machines through which energy flows. It's always the energy that does the work, whether it's a person carrying a bucket of water or a pump pushing water through a pipe.
"The cold hard fact: energy is energy. It's all energy. Strictly speaking, we are only machines through which energy flows."
Ahh, but that is where you are simplifying it based on a mechanical kW-hr definition. As I explained, it is easy to convert biological energy to technical energy by burning biomass and then doing what have you with the liberated energy, be it heat, kinetic, or elecrical. But you cannot go the other way and make biological energy out of technical energy because all food is made by plants. You simply cannot eat gasoline or anything that can be made from it, unless you burn it to make electricity and power artificial lights to grow plants. And then we are back at "biological" energy because that food had to be made by plants! So "biological" and "technical" energy are indeed very different from the perspective of economics and ecology.
You can take exception to the arbitrary names I have assigned to "technical" and "biological" energy, but my logic is sound.
And many scientists would disagree with your strictly mechanical "machines through which energy flows" description of biological organisms. While this is undoubtedly a part of what makes biological organisms what they are, it is definitely not all. It is incomplete. But just because it is incomplete does not make it invalid, so I agree with your statement only to a degree.
Your distinction may or may not have value. I am not sure.
My version of biophysical economics starts with EA=EP-EC where EA is the Energy Available to do things other than produce energy. EP is the Energy Produced, and EC is the Energy Cost of producing EP. I think, roughly speaking, others sometimes say "net energy," which would correspond to what I call EA... and "gross energy" is EP.
This equation, EA=EP-EC would never distinguish between technical and biological energy. It always holds no matter what. As some have pointed out, in a modern economy, almost all (like 99 percent) of the energy in the equation is what you'd call technical energy. If you go through the link I gave earlier, you'll see I walk through a scenario where it's all biological energy. If I extend that scenario to include, say, fire, I can show how the equation still holds and is applicable to economics. It's a different sort of economics, though.
"in a modern economy, almost all (like 99 percent) of the energy in the equation is what you'd call technical energy. "
I don't know if I agree with that 99% figure, but overall it's very high. Brazil uses a lot of ethanol to drive its cars. And the other energy, the one that I am focussing on, is food energy which drives our bodies and by extension all human labour and our economy.
"This equation, EA=EP-EC would never distinguish between technical and biological energy."
That's ture, thermodynamics is thermodynamics regardless of what type of energy you are dealing with. But my point is that when it comes to food and the energy which it provides for our bodies, all of it comes from plants (like 100%), so right there by definition we are dealing only with biological energy. Technical energy is excluded fromthe table.
I am going to guess 2500 calories (really kilocalories) per day per person. There are about 4 BTUs per kilocalorie, so that's about 10,000 BTUs per day per person. Figure we have around 300 million people. That makes 3 trillion BTUs per day. So for a year, it would amount to about 1 quadrillion BTUs (or one "quad"). The US is averaging a little less than 100 quads of energy consumed per year, according to Dept of Energy. So, this energy -- food energy -- makes up about one percent. Food energy is probably not included in the Dept of Energy statistics.
It might be a little more than a quad, but not much. The US population is a little more than 300 million and average daily caloric intake might be over 2500.
Considering stats like 50% of 'food' gets 'wasted' from farm to table and the amount of 'human food' (say oats/corn...ignoring starlink corn) which is fed to animals that are then made into 'food' - tracking the 'food' will be harder than the above.
Any scientist that passed high school physics knows that energy means the ability to do work. Work is done with energy. No energy, no work.
The economy is about work. The economy is about energy. Frederick Soddy, a pretty good scientist, nailed that one about 90 years ago.
Not all energy is equal as outlined by Howard Odum in his discussion on Transfomity and Emergy. http://dieoff.org/page170.htm
I appreciate Odum's work. He was one of the first authors I read on this subject when I first started thinking about this in the 1970s.
However, I never saw the need to coin new words for different types of energy. I always found terms like "emergy" and "emdollars" a bit daffy.
Documenting the flow of energy is like accounting processes with money. I think we'd introduce a lot of confusion if we invent a lot of different words for "dollars" depending on how the dollars were moving, or being stored, or carried, or where they come from. It's complicated enough that we have Euros, Pesos, Pounds, etc.
I mean, in our biophysical economics text books, if we want to talk about the embodied energy of a product meaning the energy that went into making the thing, we can do that. We don't need a new word to do that. We can talk about entropy and depreciation in the same textbook.
Documenting various differences in qualities is also a major challenge. Understanding heat rates is useful.
I disagree. The "dollar" of investment bankers is not as valuable as the "dollar" of a farmers resulting food product.
Picking a different value to discuss different things is well known - as you note Pesos, Pounds et la.
That's a nice essay. I enjoyed reading it through. I've only had a chance to go through once so far, but just a couple of points/questions:
- I'm not sure I fully understand the value of distinguishing between your 'technical' and 'biological' energies. Surely the 'biological' is just equivalent to current 'Food Production' sustainability quotas? Those quotas take into account energy that could potentially be made available to sustaining / increasing food production. Why the need to complicate such an issue? Just clarification needed on my part.
- There is also one point I think you could perhaps have a rethink about:
I agree that there is potentially an abundance of energy waiting to be tapped into but the key issue here is that, presuming you would like to sustain a similar complexity of civilisation to the current one and continue to improve life qualities, the ability to capture that energy in the future is not guaranteed. To give you a very hypothetical situation, imagine if the worst of the worst happened and following stresses from Peak Oil we did collapse to a pre-Industrial feudal-type society. You can see that although potentially the energy is still there to be captured in, say, nuclear fission plants and oil deep under the oceans, society would lack the ability to access it via pre-Industrial methods (i.e. by hand or crude tools). I'm struggling to make my point succinct just now, but I would try to compare it to a 'critical mass' reaction - without reaching that critical mass, nothing happens. It doesn't matter if you can come within 1% or 99.9%, you'll still not reach the end goal. So, to summarise it shouldn't be assumed that just because the energy is out there that it's a given that we'll be able to harness it. The situation needs very careful management in my opinion.
Cheers,
N.
Edit: Perhaps a better analogy would be quantum energy states. At the moment we could be said to be in a higher energy state than pre-Industrial. If we were to drop to a lower state, i.e. pre-Industrial, then it may be that we would no longer have access to enough easy energy to make the jump back up to a higher state. And, unfortunately, there's no in-between.
Hi iagreewithnick,
Thanks for your thoughts. Do you have any more info on Food Prodution sustainability quotas? I don't know much about them. I make the distinction between biological and technical energy because as far as I can see, and based on everything I have learned about biochemistry (and by observing the worldwide health epidemic as a result of our addiction to processed food -- in other words, the more artificial the food is and the farther it is away from the original plant form, the worse it is for our health), food cannot be made by anything other than plants. You can't make it from oil, electricity, or any other energy source besides sunshine. So food energy is in a special class of energy, as I said because all food must be produced by plants sitting happily out in the sunshine somewhere. No other energy source has this limitation. The one exception is to use conventional energy to power lights to grow plants, but I don't think that's viable on a large scale. The Sahara has an almost limitless amount of energy available, but in terms of being able to convert that into food, it's not available to us, because no plant is going to be happy sitting out in the midle of a parched sand dune, until we can find a way to economically and sustainably provide water to that sand dune.
"I agree that there is potentially an abundance of energy waiting to be tapped into but the key issue here is that, presuming you would like to sustain a similar complexity of civilisation to the current one and continue to improve life qualities, the ability to capture that energy in the future is not guaranteed. To give you a very hypothetical situation, imagine if the worst of the worst happened and following stresses from Peak Oil we did collapse to a pre-Industrial feudal-type society. You can see that although potentially the energy is still there to be captured in, say, nuclear fission plants and oil deep under the oceans, society would lack the ability to access it via pre-Industrial methods (i.e. by hand or crude tools). I'm struggling to make my point succinct just now, but I would try to compare it to a 'critical mass' reaction - without reaching that critical mass, nothing happens. It doesn't matter if you can come within 1% or 99.9%, you'll still not reach the end goal. So, to summarise it shouldn't be assumed that just because the energy is out there that it's a given that we'll be able to harness it. The situation needs very careful management in my opinion."
That's a very good point and I made the assumption that society would remain organized enough to be pumping out competitively priced solar panels, wind turbines, electric cars, and heat pumps if things go really bad, which may not be the case. I remember reading on this site several months ago an article talking about the relationship between complex social organization (invoking entropy into the analysis) and the amount of easily accessible energy available to that society. Unfortunately I didn't bookmark it, does anyone remember this?
Actually, you can. Electricity and CO2 is sufficient for at least some archaea to make methane (at 80% efficiency, no less). Methanotrophic bacteria consume the methane, and a few steps up the food chain you have something edible. Life is amazingly flexible.
The idea of a system which can convert electricity to food at double-digit efficiencies is interesting, and I don't think we're all that far from it. It probably just needs all the pieces put together. We'd first see it done for space missions.
If the same low discount rate is applied to pollutants and other things which cut future returns on natural capital, ash dumps from coal and topsoil loss would weigh far more heavily in our calculations.
Even more so if the fuel is not just free, but yields a "tipping fee" for taking it.
This is what the Integral Fast Reactor should have been doing for us already. GE-Hitachi's S-PRISM concept is claimed to be buildable in volume for $1300/kW. The initial fuel supply would be reclaimed plutonium and actinides from spent LWR fuel, and it would run until end of life (40-60 years, perhaps longer) on reclaimed LWR uranium or depleted uranium from existing stores. This would dispose of the existing spent LWR fuel and convert most long-lived radwaste to isotopes with half-lives of 30 years or less. This waste would leave the plant already encapsulated in glass for long-term disposal, but it would only need isolation for a few hundred years. We could build a pyramid out of it in a desert and let the Cerenkov radiation at night turn it into a tourist attraction. Long before it got as old as Giza, it would be inert.
The USA has enough DU in stock (some 470,000 tons of elemental U) to supply all electricity for about 1500 years or all US energy requirements for around 300 years. If you apply a 1.5% discount rate to this, the value of recovering the energy in the spent LWR fuel and eliminating the future costs of Pu/Am/Cm disposal would make it highly attractive. The eliminated costs of coal ash and sulfur emissions would make coal un-competitive even if CO2 is priced at 0.
Even more good reasons for using a social discount rate. That was quite the cite on the S- PRISM concept. Remember when we used to build things like this!!
I'll be impressed when the builders of said things go to Congress and demand the repeal of Price-Anderson because they are just that safe.
Well, everything else gets its subsidies...why should nuclear be excluded?
This is true only as long as externalities and the scarcity value of fossil fuels (non-renewable premium) remain uncosted. In addition fossil fuel generation is often subsidised, or receives some other special consideration. The playing field is definitely not level; and as long as the FF lobbyists have their way it will never be.
SD - Good points on FF subsidies and the costs of externalities.
See:
Estimating US Government Subsidies to Energy Sources 2002 – 2008, Environmental Law Institute, 2009. http://www.elistore.org/Data/products/d19_07.pdf
and
The Toll from Coal, Clean Air Task force, September 2010. http://www.catf.us/resources/publications/files/The_Toll_from_Coal.pdf
These subsidies and externality costs can amount up to an additional 11 cents per kwh according to this report. "Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use," National Academy of Sciences, National Academy of engineering, Institute of Medicine, National Research Council, October, 2009. http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12794
As far as I know, we have yet to go to war to insure our access to another regions rich resources of wind and sun (or tide and geothermal, for that matter).
Nice job Rembrandt.
[They do not incorporate fully all factors such as storage costs, intermittency requirements, and flexibility of electricity generation. For a fully meaningful comparison incorporating such issues is required which will be the goal of future posts in this series.]
I look forward to that. Intermittent, unreliable, non dispatchable kWh's are not worth much. Imagine a world in which the grid simply delivers kWh's from a seller to a buyer for a small fee, like the post office.
Consumers could buy long term contracts from reliable producers at an agreed cost or take their chances on a real time spot market where prices could be high, low or not available at any cost.
Owners of intermittent sources would have to build their own backup plants to acquire long term contracts and consumers using the spot market would have to acquire their own backup generator, most likely using oil based fuel.
We are still firmly locked in the age of fossil fuel because we have not done the R&D required to produce the technology required to make the transition to something better. A good summary on R&D is here.
http://theenergycollective.com/david-lewis/48960/us-energy-rd-can-it-bea...
Wrong. Grid-connected solar kWhs have a premium value because they are produced exactly when they are needed.
"Dispatachable" peaker kWhs are VERY EXPENSIVE because of very low capacity factors. For example, gas-fired peakers here in California only run a few afternoons in July and August, if at all. Gas fired peakers have to be maintained and cost $/sq ft even while not running, which is almost all the time. For the next 6 months, most of the fossil fuel power plants in CA will not run at all.
[Wrong. Grid-connected solar kWhs have a premium value because they are produced exactly when they are needed.]
WRONG.
Germany leads the world with 15 GW of solar cells. You can get a daily graph of solar output here.
http://www.sma.de/en/news-information/pv-electricity-produced-in-germany...
You have to go back to Dec 23 to find any significant output. The peak that day was 0.7 GW out of 15 GW, and occurred about 1PM. Average solar output in December is negligible.
In the summertime production often peaks in late morning or early afternoon due to cloud formation in the afternoon, while demand peaks in late afternoon and extends well into dark hours.
This has nothing to do with the point. Peak capacity for grids in the Northern Hemisphere are sized for the summer peak. For example, today, the peak load in California was maybe 33 GW. It might be double that at 4pm in JUL or AUG.
It is no surprise that direct solar is not going to contribute a high percentage in Dec. You can only discount the value of solar or wind if they produced at times (like 4am) when baseload plants have everything covered. Of course, we never have solar at those times. Sometimes we have wind at those times. Even then, we have 4 GW pumped hydro in CA that can be used if necessary, for storage. Pumped hydro can be greatly increased as needed.
In short, intermittency is not an issue right now with renewables, and won't be until we reach 40 GW or so installed. BTW, all the new big plants going in are solar thermal. Check out the one from Rice Solar LLC. It will store heat and continue generation into the evening. http://www.energy.ca.gov/siting/solar/index.html
Keep in mind that solar panels on a user roof not only onload the generation of electricity, they also unload the distribution of electricity.
Blackouts in America usually happen because of power line failures. There are other failure modes, like explosions, politics, corruption, inability to continue to afford subsidies, etc.
"Peak capacity for grids in the Northern Hemisphere are sized for the summer peak."
Minor edit;
Peak capacity for grids in California and other southern states are sized for the summer peak.
I have 12 kw of electric heat in this house (Eastern Washington), and one through-the wall AC unit that pulls 3 kw. It's used about 15 evenings a year. The electric heat is used for about 7 months a year, although obviously all the baseboards are not on at once (At least I hope it's not that cold.)
At work the draw is usually about 55 MW, and there is a slightly higher draw in winter than summer, but only a percent or two.
Where that is a real problem for this time of the year with solar and wind power is that this area has about 8 hours of daylight, and usually heavy cloud cover, and no wind. About 85% of the local power is hydro, and rest is split between a coal plant and the local nuclear plant. There are windmills in the area, but this time of the year they don't do much. March is a different matter.
Yeah, I knew that as soon as I hit save. I have a California-centric world view for some reason.
It's probably true for northern climates in Europe and elsewhere. Availability of cheap hydro electricity will also be a factor.
Thanks for reading.
[This has nothing to do with the point. Peak capacity for grids in the Northern Hemisphere are sized for the summer peak. For example, today, the peak load in California was maybe 33 GW. It might be double that at 4pm in JUL or AUG.]
By 4 pm in august solar power in California is near zero. Click the link under graph for more data.
http://www.tep.com/Green/GreenWatts/SolarHistorical.php?p=1280728800
[Pumped hydro can be greatly increased as needed.]
Pumped hydro is mature technology. Why aren’t people building it en mass now? Where are all the great locations just waiting to be developed? How long is the permitting process? How many people want an ugly pumped hydro plant in their backyard, what does it cost?
More importantly a nuclear plant could use pumped hydro much more effectively by running it through a full charge discharge cycle every day taking full advantage of peak pricing every day, while a large solar or wind pumped hydro plant might see a full load cycle 4-10 times per month.
[In short, intermittency is not an issue right now with renewables, and won't be until we reach 40 GW or so installed.]
Only true for developed countries that have a massive conventional grid to provide free backup and power conditioning for renewables. We need a global solution.
U.S. coal plants were designed for 40 year lifetime and average age is 42 years. Fossil backup plants will have to be rebuilt if we go with intermittent sources, and that should be included in their cost estimates.
[Check out the one from Rice Solar LLC. It will store heat and continue generation into the evening.]
OK, I looked it up, here are the only relevant facts I could find.
[The proposed project will be capable of producing approximately 450,000 megawatt hours (MWh) of renewable energy annually (only 51.4 MW average output)
Estimated $750-850 million capital cost]
So, construction cost is $15.56 per watt, several times higher than nuclear. No information on how much energy is stored, how long it will last, life expectancy of the plant,(the demo plant only ran 3 years).
Bad weather could shut it down for several days at a time, so fossil backup power will still be required if California goes heavily into solar.
The German feed in tariff is 56 euro cents per kWh. If nuclear got the same deal they could build a 1.5GW plant with an annual capacity factor of 0.9 that would earn $7.4 billion the first year. It could pay for itself in less than two years and become a huge cash cow for its owners for the next 50+ years.
California is going to order utilities to buy solar power regardless of price. That could be more expensive than Germany.
http://www.cleanenergyauthority.com/solar-energy-news/california-feed-in...
You pick one single day in August in Arizona and then say that in CA power is near zero by 4 PM. Looks to me that they had a storm system move in at that time. This nonsense drives me crazy. I'm all for good data making a point, but this is again completely wrong. We have a panel system, live in Northern CA and we still have a lot of solar output at 4 PM.
[You pick one single day in August in Arizona]
Peakearl, I will repeat, Click the link under the graph (VIEW DATA FOR...) for more data.
http://www.tep.com/Green/GreenWatts/SolarHistorical.php?p=1280728800
I reviewed a months worth of data and found few days without substantial interruptions, and very little energy produced after 4pm.
Here is a link to today’s California demand curve.
http://www.caiso.com/outlook/outlook.html
Notice that at 4PM, just when solar is dying, the demand curve turns sharply up, the exact opposite of dechert’s claim that “Grid-connected solar kWhs have a premium value because they are produced exactly when they are needed.”
The peak is at 6pm and remains above the 4pm level until 930pm.
[I'm all for good data making a point, but this is again completely wrong.]
Great, provide a link to the right data.
Today is meaningless in terms of peak demand, that comes in the summer with AC use. Demand increases in the winter for lighting and heat as the sun drops but is vastly below summer demand. At the moment, our panels are producing nothing due to the clouds, but it doesn't matter. Our PV panels provide all our net need over the year, mostly at peak need times.
Note that the peak for today is supposed to be about 30,000, while in the summer it can get up to 50,000. Winter doesn't matter. We have hydro and abundant other sources in winter with low demand.
I did check your link before and again it was for individual days in Arizona, not average in California. The link below shows that in July, PV production in California at 4 PM is about half of noon peak, consistent with our real world experience. It is going down fairly rapidly at that time, but the peak demand in summer is also generally decreasing around that time. The curves don't match ideally, but they do overlap to a very meaningful degree.
http://www.stanford.edu/group/efmh/jacobson/Articles/I/HosteFinalDraft.pdf
[At the moment, our panels are producing nothing due to the clouds, but it doesn't matter. Our PV panels provide all our net need over the year, mostly at peak need times.]
Well that is wonderful; the grid provides free backup power and power conditioning. That works great as long as it is a tiny fraction of well to do people who can take advantage of net metering. The middle class who cannot afford an expensive solar system can pay higher rates to subsidize your free backup power.
What happens when all the customers net zero? How does the utility stay afloat?
[[I did check your link before and again it was for individual days in Arizona, not average in California.]
My point exactly; the link you provided is a fairy tale, where every day is an average day. Where is the real data? If California goes big into solar and wind what happens on the days when the whole state is cloud covered with very little wind?
What happens when there is a hundred year heat wave with no wind and the sun goes down?
I'm not sure your point beyond hyperbole. Cloudy days in August are extremely rare, and if it is cloudy there is no problem with electricity because temperatures will be relatively temperate. I never proposed powering the entire state with PV. I only am suggesting it helps. I am talking real world, you are not. I gave the expected solar production, which is consistent with my experience. I am middle class. I drive a small car. My neighbors who you seem worried about paid enough more for their large cars (not even counting annual gas costs) to pay for a system for themselves if they want it. The difference is my money pays back, albeit slowly, while theirs is gone in 2 years. Don't accuse me of some kind of elitism.
By the way, we pay a monthly fee to be grid connected - it isn't free, and in the summer when we are generating more than we use it reduces the amount of expensive peak electricity that PG&E has to purchase from out of state. If we end the year with a surplus, they get it. If we end up behind, we have to pay.
When there is a hundred year heat wave and no wind we are all in trouble anyway. There will be shortages, brownouts, blackouts, etc, just like there have been before renewables were much of the scene. We can't afford enough fossil fuel or other plants to supply the extremely rare episodes in any case. That would require carrying a huge amount of excess capacity that we can't afford anyway. The biggest disaster is when we have droughts and not enough water in reservoirs to generate hydro. We have no provision to cover that either. What is your point, though? Are you thinking that fossil fuels will be available forever in inexhaustible quantities. Are you suggesting we go 100% nuclear and cover the state with them? What is your recommendation?
[What is your recommendation?]
There are over 3 billion people around the world who want to join the middle class soon. If the U.S. could reduce its emissions to zero instantly, the savings would be gobbled up by the developing world.
The most important goal for the U.S. is to use our technical capacity to develop low emission energy sources that are less expensive than fossil fuel. People across the world will switch to the new less expensive sources quickly and voluntarily, not kicking and screaming.
Energy is so important to the human race that we must implement a plan that does not have failure as an option.
SHORT TERM STRATEGY
1 Drill, drill, drill. Drill in Alaska, drill offshore, drill wherever we have oil and gas. Each $10 per barrel that oil goes up costs Americans another $80 billion per year. Each 1 cent per kWh that electricity goes up costs Americans another $40 billion per year.
We need fuel to keep our economy going so that we can afford to develop the new technologies that the world needs.
2 Level the playing field so that we are forced to pay the true cost of energy from each source. Eliminate all energy subsidies.
When you take a load of trash to the city landfill you pay a fee per pound of trash. Humans have been using the atmosphere as a free waste dump since we gained control of fire. Atmospheric dumping of hazardous material is producing severe adverse effects on human health and global climate. We should charge an atmospheric dumping fee equal to the best estimate of the cost of damage done by the toxic waste being injected into our atmosphere. Low emission technologies will become more competitive on a level playing field.
3 Conservation is a strategy that is being implemented already due to rising energy costs, and it will increase. Improving insulation and using more efficient appliances make good sense.
Conservation sometimes comes at a high cost. For example sales of motorcycles and mopeds are exploding. The motorcycle fatality rate per mile is seven times higher than for cars. The fatality rate for bicycles is seven times higher than motorcycles. Econobox cars are less survivable in accidents than large cars built with the same level of technology.
Higher electricity prices mean less security lighting. There’ll be more muggings and rapes on college campuses and parking lots. Homes will be colder in winter and hotter in summer. More people on limited income will have to choose between paying for food, medicine or utility bills.
The cost of conservation includes increased human suffering and death. The sooner we develop clean safe abundant sources of inexpensive energy, the sooner we can minimize these costs.
INTERMEDIATE TERM STRATEGY
Use proven technology to reduce our dependence on foreign oil.
1 Accelerate the mainstreaming of emerging technologies including hybrid, all electric and fuel cell vehicles.
2 Mass produce floating nuclear power plants to increase our supply of clean emissions free energy electricity. A company called Offshore Power Systems built a facility to do that in Florida during the seventies, but it was never put into production due to a downturn in the economy that stalled growth and canceled orders.
http://www.atomicinsights.com/aug96/Offshore.html
3 Convert most stationary application of natural gas to electricity. Use our natural gas supply to displace imported oil. Automakers can convert from gasoline to natural gas quickly and cheaply.
LONG TERM STRATEGY
1 Increase R&D for energy by more than a factor of ten to $100 billion per year, 90 cents per day for each of us. Push every technology as hard as possible, build prototypes of everything as it becomes possible and publish the performance data.
When someone says R&D most people only hear “Research”. In truth Development is the really expensive part, and the U.S. has done very little of that in recent decades.
Build intermediate scale plants of all promising technologies, nuclear, cellulosic biofuel, solar power, geothermal, coal with full sequestration. For those technologies that are successful in medium scale we should built at least one full scale commercial size plant.
We have yet to build a fully sequestered coal plant after years of talk. We need to try even if the first plant is a failure.
There are dozens of ways to split a uranium atom. What are the odds that a steroidal submarine reactor is the best? There are huge improvements to be made in nuclear power plant design and construction, yet we have not built a new experimental reactor since 1973. We should be building experimental models of at least two molten salt reactors, the simple uranium MSR and the thorium breeder MSR. We should be building Integral Fast Breeder demo plants, sodium cooled and lead cooled. We should be working on small modular reactors.
2 Spaceship earth is less than 8,000 miles in diameter and covered largely by water. With the appropriate use of technology it could be a near paradise for 500 million to 1 billion people, without putting too much stress on the other species that share this planet, but we are over 6 billion, headed for 10 billion, with two thirds living in poverty.
Earth can never be paradise for 10 billion people, unless your idea of paradise is sitting in an air conditioned high rise apartment building, surfing the internet, eating insect pate. It will take a massive infusion of technology to provide a comfortable life for all those people while preserving whatever is left of the environment.
Population has to be on the table in any serious discussion of the future. The U.S. population has more than doubled since WW II. Had we stabilized it at that level we would have abundant inexpensive energy, water and food supplies.
Curtail immigration and give each person who graduates from high school the right to contribute one half of the DNA for two children. People who want more than two children would have to buy the rights from someone who has not used theirs. The price would be set by the balance of supply and demand.
CONCLUSION
The road of progress is paved with stones of failure. By spending 90 cents per person per day to push every technology as fast as possible, the best technologies and breakthroughs, whatever they are, will emerge as leaders in the shortest possible time. 95% of that money will probably be wasted on unsuccessful technology, but that is cheap insurance to assure that we get the best solution. Relying on a bunch of gray haired law school graduates in Washington to cherry pick technology is a formula for disaster.
The new technologies will tend to suppress rising energy costs. I believe the savings could surpass the annual R&D cost within 15 – 20 years, and save over $2,000 per year per person within 30 years, not to mention a large improvement in the environment and quality of life with this approach. 100 years from now energy will be cheap, clean and abundant.
A big R&D push will provide the U.S. with new products that are highly desirable all over the world, providing Americans with high paying manufacturing jobs and products to sell overseas to eliminate our trade deficit and strengthen the dollar.
We have wasted the last 30 years, it’s time for a change.
THank you, I understand where you are coming from now. I am not sure I share your optimism about the results of drilling, nuclear, R&D, etc, but it is an interesting proposal.
Okay, I like it so far.
Fail! Fail! Fail!!!
That was Nixon's response to the initial oil shock in 1973. We drilled drilled drilled and production went down down down.
Recently,exploration costs have jumped to $90 billion ... more than triple what it was just a few years ago (see aer). How much more do you want to spend on drill drill drill? Do you really think it production will not just go down down down? Are you aware that US oil production peaked in 1970? And that it is about half what it was despite Alaska oil and off-shore oil.
So far, your strategy fails.
Fail. This cannot be done. The reason: energy production and consumption is intimately woven with many societal-scale issues involving health, safety, freedom, environment, economy and so on. Energy is necessarily a centerpiece in public policy. No policy decisions taken will ever be completely neutral with respect to whether it favors one source of energy or another. Subsidies don't necessarily involve tax credits or other cash incentives. For example, if we decide a certain level of mercury spewed into the air is okay, then we subsidize coal by sacrificing health of citizens who get sick as a result of the policy. If we don't allow mercury vapor at all, then other energy technologies will be favored over coal burning.
In other words, we have always subsidized one form of energy or another to a certain degree. That will continue because the public policy issues tied to energy are very inevitably important.
Fine, but conservation does not solve the production problem. I'm not sure how you plan to "accelerate the mainstreaming...." With subsidies? With cheerleading? For example, when you say "fuel cell vehicles" we run into some very heavy issues. You need fueling stations with hydrogen. This means you need a hydrogen pipeline grid. It will probably not be economic to have a hydrogen generating plant at the fueling station. I already posted a link studying that issue. To get to a reasonable cost per kg of H, you need a pretty big plant. If we're really going to have fuel cell vehicles, then we're really going to need a hydrogen pipeline grid feeding the fueling stations. So, who is going to build the pipeline? Do we pour money into fuel cell R&D?
This is a non-starter. Maybe you see someone opening a check book to underwrite this? I don't see anyone ready to do that. Are you opening your check book for this? Just how many 10s of billions are you ready to risk of your own money? Let me give you a reality check: no one would touch this project unless the government provided massive subsidies, guarantees, and so on. And they would need to blow away massive public opposition to the project. I'm not sure how you deal with that one. Basically, the only way we get nuclear is with totalitarian leadership, command economy, and vastly more intrusive security to thwart attempts to sabotage the nuclear floaters.
Reminder: this is not a command economy. You can't just say, "do this." I think you should pull out a calculator and figure out just how quick and cheap it would be to convert cars to natural gas. If it is naturally a good deal, you should probably figure out why more people aren't doing it right now. There really is nothing to stop anyone from doing that absent your exhortation. Clue: it is expensive to convert your car. If we say have the car maker stop making gasoline vehicles and just make natural gas vehicles, there is the small problem of the 130,000 fueling stations that would have to be converted. Given that the average cost of a new car is running close to $30 grand, Americans will have to spend $6 trillion to replace the 200 million + cars on the road. This doesn't sound quick or cheap. Again, you'll have to exercise your totalitarian powers to get people to put out a lot of money for cars with less power and less driving range. Short of becoming an absolute dictator, you can't do this.
NO. The biggest problem the US faces is unemployment. The US gov and practically every state faces massive deficits. If people aren't working, they can't buy things that bring revenue. They also aren't paying income taxes if they aren't making any money. Unemployment is getting worse every day, and spending a bunch of money on R&D will not employ very many people.
Every technology we need to have an economy powered by 100% renewable energy is already ready commercially available or ready to be commercialized. Cost reductions are seen as these technologies are deployed in larger scales. We don't really need much more government sponsored R&D. We need legislation and incentives that will cause greater and greater deployment of renewable technologies. This will take a lot of investment and a lot of work: exactly what's needed to put people to work so they have money to spend and can pay their taxes.
We've blown many billions on this type of stuff over the past 60 years with little to show for it. There is not a single breeder in commercial operation in the US and not a single kWh of power has have been marketed from a fusion power plant. I say no more subsidies for nuclear!.
Not really. People need decent jobs. Your recommendations would not lead to any job growth.
If you only had the power! And what if someone has a child without proper rights granted to them by you? BTW, is that you granting the right, or the government?
Nevermind. Your vision is certainly futuristic and forward-looking. Absolutely bizarre, though.
What is your solution that does not have failure as an option?
Nuclear has been subsidized far less per kWh than solar or even wind, and it pays taxes for "waste disposal" which go into a black hole created by special interests devoted to its destruction.
Those same special interests have prevented breeders from going into operation. The problem with breeders has never been the reactors (which work just fine), it's the rest of the fuel cycle outside the reactor. Separation of materials from oxide fuels requires wet chemistry which is very expensive and messy. Metallic fuel can be processed in a bath of molten salts, which gets enough "hot" fission products into the reclaimed fuel that it is self-protecting against diversion (the bogeyman of the anti-proliferation crowd). The process is so simple that it can be done at the reactor site, so fuel never has to leave the hot cell (another protection against diversion).
The concept to put these processes together was called the Integral Fast Reactor, or IFR. The IFR was killed in 1994 by political machinations, not because it wouldn't work but precisely because it would. Author Tom Blees claims that the employees who worked on the project were forbidden to talk about it. This is research we've already paid for, but anti-nuclear interests (like coal) have blocked us from using it and done their best to keep us from even learning about it.
This isn't the first time this has happened, either; the molten-salt reactor was killed in the 1970's by AEC director Milton Shaw, and the personnel at ORNL were forbidden to talk about it. I suggest reading this analysis of WASH-1222 to see how one ideologue given authority beyond his competence can destroy the work of dozens of subject-matter experts.
This wouldn't surprise me, the FF people do like their subsidies and have continually worked to discredit other energy options. Look no further than the case against renewables that "can't stand on their own without subsidies." That is a case of the pot calling the kettle black.
LOL. That's an interesting formulation. It might even be true, but it is also grossly misleading. Hint: nuclear had a 30-year headstart. Eisenhower started the "Atoms for Peace" program back in the 1950s. For example, I remember Nixon's budget for renewable energy R&D. I was hoping to see it in the billions. IIRC, it was $220,000. Billions in subsidies were going to nuclear and oil. But your formula would hold since there were zero kWh in commercial solar back then. Your formula is a fake.
Fact remains: a pittance was going to renewable energy R&D. Renewable energy support is still a pittance compared to subsidies for non-renewable energy. Ever hear of the oil depletion allowance? Do you have any idea how that worked?
Well, uh, no. They don't work just fine. Breeders are enormously complex and expensive compared to relatively simple conventional nuclear plants. Japan has one. It was recently restarted after being down for 14 years due to repairs. To say it's working fine would be overly generous. It is not operating commercially and they don't know when it will.
http://news.sciencemag.org/scienceinsider/2010/05/japan-restarts-trouble...
The US has no breeders working. The same Nixon that spent $220,000 on renewable energy R&D was pushing $100s of millions per year of public money on the Clinch River Breeder.
http://en.wikipedia.org/wiki/Clinch_River_Breeder_Reactor_Project
The US embraced breeder technology. It just wasn't commercially viable. The excuses you give just don't matter. If uranium fuel quadruples in price, breeders may become competitive with conventional light-water reactors. But by then, no one will be able to justify building either one.
The interesting thing is the potential for new knowledge, technology and implementations with good economy, not how much earlier generations spent for each technology.
Btw, 14 years is enough to build and test another prototype, I sense a lack of will to test many solutions in parallell.
Nope. The Smith-Putnam wind turbine predates the Manhattan Project. Concentrating solar power systems go back to pre-WWI.
Not for lack of trying. I agree that solar has a lot of potential. The problem is that it's around 20 years behind wind on the cost curve, and intermittency and seasonal variation isn't going to be fixed by technical improvements.
Yes. Also quite irrelevant to nuclear power, especially the waste-disposal tax and the fixed $30 million/year fee per reactor charged by the USDOE.
The EBR II was tested in a loss-of-cooling scenario. As the core heated up, the structure expanded and the fuel pins bent outwards as they were designed to do. This increased neutron leakage and the reactor shut itself down, no control activations or emergency cooling systems required. You call that complex?
The EBR II was decommissioned as part of the same suppression effort which killed the IFR.
No, the Monju FBR was down for a short time due to a thermowell fatigue failure in the secondary sodium loop (non-radioactive). It stayed down because of the scandal which followed the attempt to hide the incident: politics, not physics.
Japan was a partner in the IFR project. When the Clinton administration cancelled it in 1994, Japan's contribution had to be refunded. The refund was more than the cost of running the test program to its intended end. This is one of the reasons why no US entity will undertake construction of a reactor without loan guarantees from the US government; without Washington having skin in the game, the political risks are too great. After all, if Washington wants to change the rules of the game, it should have to pay off the sunk costs. Fair's fair.
Again, politics, not physics.
The US assumed the task of spent-fuel disposal for a fixed per-kWh fee, which made it irrelevant how much actual waste a plant generated or how long it lasted. The US hasn't taxed CO2 emissions from fossil plants, or even the sulfur killing pecan groves in Texas. Don't talk to me about "commercially viable" until all of that's priced in.
Again, what you say is true, but deceptive and misleading. The conversation had to do with subsidies. Remember? You were claiming nuclear had less subsidies per kWh. Renewable energy received practically no subsidies at all before nuclear developers were raking in billions. BTW, I remember the Putnam turbine from a course I took in 1975: Engineering 161, Solar Energy Engineering with Marshall Merriam at UC Berkeley. Putnam made that project go with no federal help at all. It was a great pioneering effort. I think it only ran a total of about 1000 hrs. It broke down a couple of times and there just weren't resources available to fix it. The last straw was when the hub broke and the blades went flying. Oil was very cheap after the war and there just wasn't enough profit in it
There was a lack of trying in government. There was practically no gov effort at all until Pres Carter and Gov Brown took a few baby steps. Those efforts were nearly buried when oil prices collapsed in the mid-80s. Reagan took the solar panels down from the White House. Gov Deukmejian practically killed off the solar industry with a stroke of a pen.
No, not really. It is taking people a long time to understand the potential of solar. It also doesn't quite fit in the command-and-control model favored by totalitarian types.
The fact the industry is still small doesn't tell the story. It is growing rapidly. Take the present installed capacity and apply a 20% grown rate per year and see what it might be in 25 years.
I'll give you a clue. CA is scheduled to install more than 3 GW of direct solar in 2011. If we do that and increase new installs by 20% each year, we'll install 55 GW in 2027 and the total installed by then will be more than the 300 GW I use as a target for a 20 year conversion. There is no reason it can't be done. If the solar industry as a whole continues to grow at 20%, there will be more solar energy produced than the US currently uses.
Actually, both wind and solar are currently growing much faster than 20% per year.
More nonsense. CA's energy budget (assuming a reasonably healthy economy), will be $4 trillion over the next 20 years. 100 GW of storage at $1500/kw would run $150 billion. Storage is a drop in the bucket compared to all we will be spending on energy.
[delete more boring stuff about why breeders don't work]
Apparently you don't remember me quoting you saying that nuclear had a 30-year head start. The truth is very much the opposite; wind and solar have centuries of history of use, and there were attempts to commercialize them before mankind had ever created a controlled chain reaction... commercial attempts which mostly failed. Also, most of the claims of nuclear subsidies include all of the R&D for the Manhattan Project and military power systems. This is, put simply, ridiculous; wind and solar cannot power a submarine.
Nuclear, too. Fossil fuels looked cheap, however briefly.
Enough with the slurs already. I've already had to suppress my urge to label you with various sexual pejoratives, and you can bloody well stop it right here. Besides, like the European "Antifa" types behaving indistinguishably from the Brownshirts of 30's Germany, the real totalitarians are most often the ones pointing fingers; like homophobes often being closeted gays, they do it to deflect attention.
I did that quite some time ago. Wind is roughly 1-2% of US generation, and solar is about 0.01%. Applying a 20%/year growth rate puts solar at the 1% level in about 25 years. Wind is the big contender in the near term, with Texas alone able to supply more than 2x total US annual generation needs; at 20%/year, it would be there by 2035. Of course, that's not going to happen; the natural growth pattern follows the logistic curve, not a pure exponential.
Nuclear is already about 20% of US electric generation. It would be much more if it were not for prejudicial interference from government. It's time to get out of the way.
Do you even know the difference between a GW and a GWh? Have you calculated how many GWh of storage is required, and how much physical resources this would take? Have you calculated the losses in the system? Have you identified the resources (stockpiles) which can handle the situations when the storage runs out?
I have identified a stockpile which can run the USA for 300 years, and I was late to the party on that one.
Why, uh, yes, I do. And I assume you do also. And since you understand the difference, you would also know that GWh would not be a meaningful indication of storage capacity by itself. That is, we need to know the rate at which energy can be put into storage and the rate at which energy can be taken from storage.
For example, suppose you have 150 billion pounds of water at 100 ft. Then you have 15 trillion ft-pounds of energy ... or [pulling out calculator] 5.6 GWh. Then if you figure your turbine-generator is 90% efficient, you can say this potential energy is worth about 5 GWh of electricity. However, if your turbine is 10 kW, then it would take forever to get your 5 GWh and, in fact, the energy you have stored really has little commercial value.
So, in doing these ballpark estimates, I think it is best to start with the rate at which energy would need to be put into storage, and the rate it would need to be taken from storage... aka "power."
Yes, I have done some rough estimates. But at this point, there are too many variables for me to try to give much detail and I don't have the time.
For example, I think we will wind up with many different storage systems. It's very hard to predict the mix. I think the solar thermal power tower with thermal storage is a very important design. If it can reach a 65% capacity factor as predicted, this reduces other storage requirements by quite a bit.
I also think fuel cells will make a big difference. If fuel cells become cheap enough (I think they will), we will have a hydrogen pipeline. I don't care what anyone on this forum thinks about that. It is crystal clear to me. Fuel cell vehicles mean you need hydrogen. It is not going to be very economic to truck hydrogen and it is not going to be economic to liquefy it. The estimates I've seen for electrolysis (including the paper I already referenced) make it clear that having the hydrogen generating plant at a fueling station is not going to be practical. You'll see large hydrogen generating plants that feed several fueling stations via pipeline.
There are also heat-driven processes for producing hydrogen with solar thermal, and we will have to see if any of those become economic.
In any case, there is no great precision needed at this point. We have natural gas as a backup. We can implement storage systems to gradually replace the natural gas plants as the requirements become more and more clear over the years.
I read this and I just had to stop. The statement "GWh would not be a meaningful indication of storage capacity by itself" is just so mind-bogglingly clueless that I cannot explain anything to someone who would make it. It is literally as wrong as "gallons would not be a meaningful indication of gasoline capacity."
You're grossly wrong about the cost of compressor/turbine systems too (entire simple-cycle gas turbine plants cost much less than $1500/kW), but until you can get your head around the fact that the quantity of stored energy is THE figure of merit and GW of capacity is relatively cheap to change (adding turbines to a dam is cheap, increasing the amount of water stored is next to impossible), there is no way to have a discussion with you.
Also, you have completely beggared my list of socially acceptable terms for persons of faulty concepts and ideologies. PZ Myers likes to use "demented ****wit" but I think you've earned something several levels stronger than that.
I think you are demonstrating your own cluelessness. I gave a hypothetical example to illustrate what I said, namely, that GWh is not going to adequately describe storage capacity. In fact, the power rating is more indicative of cost. That's why, for example, pumped hydro costs are normally given in terms of power, not energy.
For example,
http://www.rkma.com/utilityenergystorageSAMPLE.pdf does not even mention MWh or GWh. All figure are given in terms of MW or GW.
Name-calling. How clever.
Don't talk to me about "commercially viable" until all of that's priced in.
At the point where fission is safe enough to have the makers of the technology to not need Price-Anderson then its safe enough for widespread use.
Perhaps the Nuclear of the Future is Fusion
"fluff"
http://www.cbsnews.com/stories/2009/04/17/60minutes/main4952167.shtml
"science"
http://www.lenr-canr.org/
The 'magic' may be making 50-80 nm structures...and Man is only really starting to get that kind of uniformity down. Odds are the metals used are toxic to humans at that size - just like Carbon is.
Suppose you own an oil and gas company that operates to the highest possible standards of safety. Under Price Anderson for oil the government could force you to pay for the BP disaster, even though you had no responsibility or control over their operating practices. It is unethical and un American.
I have repeatedly come out against Price Anderson. It is an unethical burden no other industry carries and should be eliminated.
http://www.theoildrum.com/node/3877#comment-335609
Price Anderson is simply a testament to the irrational fear and ignorance of our leaders and others who think it is important.
If you had access to a modern Gen III plant how would you create a Chernobyl like accident, details please?
What is your recommendation to solve the global energy problem that does not have failure as an option?
If you had access to a modern Gen III plant how would you create a Chernobyl like accident, details please?
With this mythical access - how much explosives are mythical there?
(and realistically posting a how to on getting a nuke plant to become a pile of radioactive debris is a sure way to have various government branches gain you a visit or 2 from the Feds.)
What is your recommendation to solve the global energy problem that does not have failure as an option?
I've posted it before.
You can have all the explosives you can carry. What will you do with it, blow up the reactor? You cannot get close to it, radiation and heat will kill you. The reactor vessel is steel 5 inches thick. It is surrounded by a steel reinforced concrete shield 10 feet thick. Your explosives might blow the paint off the outside surface.
To melt the core you have to disable 3 trains of emergency low pressure injection and 3 trains of emergency high pressure injection and the operational water systems. How will you do that?
And if you melt the core so what? Reactive fission products will plate out on surfaces inside the containment. Perhaps some noble gasses will escape, no big deal. Nobody outside the plant boundary will be hurt.
But if you could gain access to a Boeing 747 cockpit you could kill 40,000 people by crashing it into a crowded sports stadium. Do you support Price Anderson insurance for the airlines?
Provide a link.
Does anyone have references to studies which show a correlation between the amount of outside lighting and crime?
Would 'econoboxes' be safer if there were much fewer larger vehicles sharing the roads, and if all vehicles were speed governed to <40 MPH in cites and <70 MPH on Interstates??
If anybody has links to such a study, it would be the International Dark Sky Association
pdf warning:
Security Lighting: Let's Have Real Secuity, Not Bad Lighting
Lighting and Crime
U.S. Department of Justice Study of Street Lighting and Crime
Rethinking the Conventional Wisdom of Security Lighting
Too Much Outdoor Lighting Pollutes the Sky, Wastes energy, and Creates Safety Hazard
[Would 'econoboxes' be safer if there were much fewer larger vehicles sharing the roads,]
Yes. If roads were limited to Econobox traffic only, they would be significantly safer. However, in a barrier crash, or a head on crash with an identical vehicle, the minimum possible deceleration force depends on the distance from the front bumper to the passenger compartment, which is generally shorter in Econobox types.
More interior room allows for thicker air bags, front and side, more leg room, more steering wheel crush distance etc.
A serious flaw in the "Bigger vehicles are safer" equation is that most people killed in SUVs are killed in rollovers. That kind of ruins the "safer in a head-on collision" calculation.
SUVs are generally top-heavy and have unsophisticated truck suspensions. Make a sudden turning maneuver, and over they go. Most people who drive SUVs are lousy drivers (I only say that because I have seen them drive) and don't know what maneuvers to avoid.
By contrast, a Honda Accord can skid completely sideways down the highway at well over the speed limit, and will only roll if it hits a low curb or something. It has a very low center of gravity and a much more sophisticated suspension than an American SUV.
Statistically, the safest cars are the imported luxury cars. They have a lot of "crush space" ahead of the engine, low centers of gravity, and sophisticated suspension systems, non-skid braking, active steering, etc, etc. They're also fairly heavy, and unlike American SUVs, the mass is in the right places to protect you in an accident. That's a deliberate design feature.
And minivans also have a very low fatality rate. That probably has more to do with the way people drive them than with crush space or sophisticated suspension systems. They're more likely to be rear ended than have a head-on crash.
Yea, a friend rolled his last SUV recently ~ 10 times after he sailed into a patch of black ice at ~ 60 mph.
He used his insurance money to buy yet another SUV, in the belief that SUVs are safer vehicles.
The police told him he was extremely lucky he didn't die in his roll-over...but what lesson did he take away? Not the one concerning high center of gravities and over-confidence that 4WD can somehow allow one to drive as they please on ice!
Yes, if you hit a patch of black ice, you are better off driving the aforementioned Honda Accord than an SUV. At least if you get the Accord skidding sideways down the road it is highly unlikely to roll, whereas the SUV will quite likely do so.
The best solution is to learn how to drive on ice. The little town I grew up in couldn't afford a snowplow or a sanding truck, so we just backed down the snow until it was glare ice, and drove on it. And since my brother and I couldn't afford new tires we always drove on bald ones. We just got used to spending most of the winter in a controlled skid.
But for those people who didn't get this kind of training in their misspent teenage years, don't think an SUV will save your butt if you drive on ice. While they have more straight-line traction, they don't steer or brake on ice any better than a Japanese econobox, and if you hit bare pavement while travelling sideways they will roll.
Note that the site is in north-EASTERN Arizona, a state which does not use DST. The production at 4 PM local time at points east or west will be quite a bit higher.
The utility's webmaster should be roundly criticized for failing to provide a "click on calendar date" capability. The time stamp changes by 86400 between sequential dates and appears to be roughly coincident with the Unix epoch (starting at midnight 1/1/1970, though probably in local time). You can calculate the value for any date you please by adding or subtracting 86400 times the number of days you wish to jump. I went back to June, and found that the power production was much more even outside the monsoon season and it peaked at 11 AM local. There appears to be no data available before mid-June, which suggests that the array was only brought on-line this year.
Not to put too fine a point on it, but this is not exactly the "California demand curve." It's the curve for the Cal ISO area... covers a little more than 80% of the state. Los Angeles Dept of Water and Power is not part of that. Nor is Sacramento Municipal Utility District. There are several other smaller utilities not part of Cal ISO.
We also get power from WAPA (http://www.wapa.gov/ ). This is federal hydro power that goes to local governments. For example, the Bay Area Rapid Transit system gets WAPA power.
The German feed in tariff is 56 euro cents per kWh.
Actually it is between 21.11 Cent and 28.74 Cent per kWh. And they don't require costly repositories, no costly decommissioning, no uranium imports, no cooling water and never produce power at night when demand is low.
http://www.solarserver.de/solar-magazin/nachrichten/aktuelles/kw44/bunde...
U.S. coal plants were designed for 40 year lifetime and average age is 42 years.
So what. The US has already 400 GW natural gas power and North America has already 175 GW hydro power and increasing hydro power can be done without requiring new dams (a dam does not care how many turbines run off of it). And most household energy is required for heat energy and heat energy can be stored cheaply.
Besides there's absolutely no reason for the US to use double as much electricity as other developed countries.
Uh, no. Let me put this another way: Peak power is defined as Noon to 6pm. Partial Peak is 8am to Noon and 6pm to 10pm. All solar output delivered to the grid is produced at peak or partial peak times. This is why your claim of non-dispatchable power being worthless is so ridiculous. The fact that solar output does not exactly match load is a minor issue. It's pretty close.
Here, I am talking about California. We have 200 major lakes and around 70 reservoirs. We also have something like 800 miles of coastline. Although it hasn't been done yet as far as I know, the ocean could be used as a lower reservoir for pumped hydro. The potential for expansion is many times what would ever be needed.
Here is something from the California Energy Commission: http://www.energy.ca.gov/hydroelectric/index.html
Pumped hydro will be expanded as needed. Right now, we have all we need. As with any energy project, there are siting issues and capital cost issues. Capital cost is high, while O&M is very low. Hydro O&M runs a fraction of a penny per kWh.
So, you like pumped hydro if used with nuclear, but not with renewables? I think you have exposed your hand.
Let me explain something with respect to the future of nuclear power in California: it's a dead issue. California enacted a moratorium on nuke plant construction 35 years ago. The most recent attempt to lift the moratorium flew like a uranium-filled lead balloon. http://abclocal.go.com/kabc/story?section=news/local&id=5215883
There is no need here for greater baseload capacity. The value of additional nuke off-peak kWhs is near zilch at this point. If you were the greatest nuclear power sales person on the plant (which you are not, btw), you might try to focus on something innovative such as a plant along the coast that pumps water at off-peak hours.
Another innovative use of a nuclear power plant might be to dedicate it to hydrogen production. The study of hydrogen production I cited in my OCT 3rd article (see pg 27 http://www.safeenergyassociation.org/ad/eroi.pdf ) has the facility located at a nuclear plant. http://www.inl.gov/technicalpublications/Documents/4310610.pdf However, there is no ready use for that much hydrogen. The value of hydrogen depends heavily on fuel cell technology. If fuel cells can be made cheaply (it seems like they can but it will take a while), then the interest in hydrogen production will grow by leaps and bounds.
In any case, I don't think there will be any new nuclear power plants built in California. This is a very old debate and that coffin has many nails in it. Feel free to re-visit, but it is a waste of time. California is going solar. To get some clues, you might want to look at Governor-elect Brown's platform: http://www.jerrybrown.org/Clean_Energy Brown takes office next Monday, btw.
Renewable energy (solar, really) is a global solution. It just looks a bit different in different circumstances. Renewable energy is available everywhere. There are wind turbines working fine in Antarctica. Each area requires a little different plan depending on circumstances existing there. The US as a whole should look at how to get energy from west to east since renewable sources are most abundant in the west while energy use is most intense in the east.
False. There are many different ways to store energy. Mostly, this issue is just something for skeptics to cackle about. No matter what path we take (assuming the economy does not totally collapse), the US is going spend $40 trillion on energy over the next 20 years. In the larger scheme of things, energy storage amounts to a small fraction of the overall task. The fact that storage may cost us a trillion or two, just doesn't matter. It's just something we have to have. We'll probably spend more on new shoes.
Another big hole in your nuclear vision: If we went for the nuclear option for a future free from fossil fuel, we would need just as much or more energy storage as with renewable energy. Energy storage is just something we have to do not matter what. It's not really a big deal.
Here is a presentation (this link is also in my OCT 3rd article) on the demo plant:
http://files.harc.edu/Projects/CultivateGreen/Events/20070212/SolarTower...
Unlike nuclear, the life of the solar plant is unlimited. With a bunch of these towers in the desert, there is no component that can't be replaced with minor impact on the overall energy production. It can last forever with proper maintenance. With nuclear, the reactor vessel is a hard limitation. The plant has to be decommissioned after a few decades. Also, missing from your analysis, we don't have any nuclear fuel. Do you happen to have some? I don't. There are only a few places you can get uranium. Breeding or fusion could help alleviate the nuclear fuel problem, but the technology doesn't exist commercially at this point, and it may never exist at anything resembling commercial viability. Solar is not cheap, but it is cheap enough. It gets cheaper the more we do it.
You are grossly underestimating nuclear costs. Look at the cost of new nuclear plants -- not old ones. In the US, estimates are skyrocketing (see links to that too in my OCT 3rd article). Now we also have to consider that every nuclear plant is a potential terrorist target. We know there have been plans to intentionally create a Chernobyl-style disaster. This was part of the 9-11 planning and there was also a plan to attack the Palo Verde plant in AZ. Who is going to guarantee that? You? Exxon? BP? Exelon? Nuclear can only proceed if the government underwrites and guarantees everything.
With a command economy, slave labor, and vastly more intrusive security, nuclear might work -- for a while. Otherwise, forget it. The future is renewable energy.
It has been well demonstrated that the more renewables we install, the cheaper and better they get. The fuel will never run out and is always free. It's a no-brainer, really. My estimate: renewable energy plant costs (including storage) can be amortized with less that 10% of GDP over the next few decades. In other words, we can stabilize EROI at no worse than 10 (we are already a little worse than EROI 10, on average). Eventually, energy costs will be all O&M. EROI will rise. The sun will keep coming up, too. Really.
No, you tipped yours. If one energy source can cycle several times as much energy through a storage system in a year as another, the cost of that storage (in amortization per kWh) will be proportionally lower. I'm a fan of storage myself (CAES more than hydro, because it's more adaptable) but the point is irrefutable.
The pumped-storage plant in Ludington, MI was built to time-shift nuclear power from weekends to weekdays.
California will either build nuclear plants, import nuclear power, or go dark. The state can make good use of solar, but it can't make it using only solar.
Oh, I don't care. I've been a renewable energy advocate for 35 years. I worked in the industry in the 1980s. I founded a couple of groups to promote renewable energy. One of those groups is still percolating along 22 years later without much help from me.
As for CAES ... that's fine too. PG&E is looking at commercialization of compressed air. Flywheels have good potential. I think hydrogen will work, too, although it depends heavily on how cheap fuel cells can become. If fuel cells get down to $50/kw as some people project, we will be using hydrogen for cars. A big fat hydrogen pipeline grid will also be able to store quite a bit by allowing the pressure to vary.
With a solar economy, electric cars would be charged during the day. This would also become part of the grid and part of the overall storage scheme.
Baloney. California has enough renewable energy potential to power the entire US several times over. Of course, we won't generate that much because renewable energy is available everywhere and there are even better states with potential for exporting renewable energy.
We could provide all of the energy used in CA by developing less than 2 percent of our land for renewable energy production. Here are a few rough numbers for starters. CA consumes about 8.4 quads per year for all uses. We could produce that much, including storage, with 300 GW installed with a 30% capacity factor. This would mostly be wind, PV, and solar thermal. We already have a few GW existing of wind, biomass, hydro, and geothermal. For round number simplicity, figure we add 300 GW at $3 per watt for the production facilities.
300 GW x .3 = 90 GW average
90 GW x 8600 hrs = 774,000 GWhr per year
774,000 x heat rate of 11,000 per kw = 8.5 quads
The heat rate I use here is conservative. A lot of the energy we would be replacing is gasoline, which has a poor heat rate in automobiles. Since we would be moving to electric cars, which are much more efficient (gasoline engines typically lose more than 80% to heat), overall energy consumption for transportation would be reduced significantly.
The capital cost of the plants would be $900 billion. Let's build 100 GW of storage so we never dump power. Add $1500 per kw of storage capacity and that's another $150 billion. Add $100 billion for transmission and distribution facilities (including $30 billion for hydrogen pipeline grid ... 30,000 miles times $1 million per mile).
The cost of the conversion would come out to something less that $1.2 trillion. Given that CA expects to spend $4 on energy over the next 20 years (assuming a reasonably healthy economy), the $1.2 trill should be affordable. That is, it would not be $1.2 trill on top of the $4 trill CA would expect to pay on non-renewables because as we are making the transition, an increasing amount of non-renewable energy doesn't have to be purchased.
At the end of the 20-year transition, energy costs would go down because energy costs would become only O&M -- no fuel cost and capital costs would already be covered. We'd fund the $1.2 trillion transition with $1.2 we did not have to pay for non-renewable energy during this period.
NOTES:
Capacity factor: wind in CA currently has 30% capacity factor on year round basis ... 20% in fall and winter, and 40% in spring and summer.
PV may be only 15% or so but solar thermal will make up the difference because we'll have much more of it. I also assume that solar thermal with thermal storage will win out. This design potentially will have capacity factor over 50%.
Cost per watt: currently, wind is already less than $3 per watt. Solar PV is running $4-5 per watt for commercial installations. But $3 per watt is already in sight. First Solar modules are down to 80 cents per watt and under $3 installed cost are expected soon. Solar thermal systems are going in around $5 per watt. The first big ones are being built now and cost reductions are expected as experience is gained. $3 per watt is certainly achievable, and perhaps less when installed on a truly massive scale. Most of the power would be generated at solar thermal plants.
Storage: $1500 per kw is a round figure that should allow for many different types of storage. Hydrogen production runs about $500 per kw and figure development of some underground caverns may be needed to cover seasonal needs. Flywheels could be a substantial part of the storage and power conditioning. Compressed air and pumped hydro would be employed as well and the $1500 should be adequate for large-scale expansion of these. The 100 GW takes into account that electric cars would be charged during the day. Time-of-day price incentives would ensure people want to charge the cars at the right times.
The analysts at NREL appear to disagree with you; at least for wind, California's potential is only about 2.5% of US consumption (can't even power the state). Texas is the powerhouse, or should I say "blowhard". Solar seems to keep running into protected this and endangered that. I suggested a while ago that the state cover all the mall and 7-11 parking lots with concentrating dishes with Stirling engines, but somehow nobody went for that either. Not sure what they'd endanger. Is the burnt-brown Valley Girl hard to find? The place was lousy with them when I last spent much time there, and I thought they got their natural coloration at salons and beaches.
NREL's figure for California's wind potential is only 34 GW installed, so you're relying very heavily on the others. One cloudy week and you'd be in big trouble. I wouldn't even think about hydrogen; it's both quite lossy in conversion and the systems are very expensive even if used in continuous duty.
A point I noted 6 years ago. But energy is one thing, firm power is a very different thing. Using nuclear energy to re-heat stored air for CAES is one way that power can be firmed up without carbon emissions. EVs can help manage power on a scale of seconds to hours; beyond that, you need very large scale storage systems or generation based on energy stockpiles as opposed to energy flows. Uranium and thorium are the biggest energy stockpiles on the planet. The BRICs aren't ignoring them out of ideology, and we're fools to do it ourselves; we've been fools to halt the developments where we led until we decided to quit the race.
Not really. As I mentioned, this potential is mostly in direct solar. Somewhere along the line, I mentioned build-out of wind to 60 GW.
NREL's wind information is a bit dated and a bit conservative. These estimates change every time bigger and better turbines come on the market. For example, in my OCT 3rd article, I use figures from Enercon regarding the E-126. You'd see twice as much energy from a given windpark if developed with these [huge] turbines compared to the more normal sized ones NREL was probably figuring. We have also found that replacing smaller turbines with few larger ones kills fewer birds. So the trend over the years is likely to be for larger turbines.
Besides that, the NREL figure is for land only. There is large potential off-shore, especially in the north. 60 GW is a reasonable figure for ultimate wind potential for CA.
Nonsense. Solar thermal in the Mojave desert in CA has a history going back 30 years. The variables are well understood and well documented. The early plants were parabolic trough. Most of the ones going in now are also parabolic trough. But I think the one to watch is this one:
http://www.energy.ca.gov/sitingcases/ricesolar/index.html
There isn't much guess work here. This project is the result of many years of testing. I visited the first prototype in 1987 in person. It was 120 deg F that day out there. I spoke with the engineers there and found it a bit frustrating that they planned to spend so many years on the prototypes. Anyway, here we are 23 years later and the thing is ready for commercial installation. If you look at pg 8 of this presentation, you'll see they expect to have, eventually, a 60 - 65% capacity factor with 16 hrs storage.
http://files.harc.edu/Projects/CultivateGreen/Events/20070212/SolarTower...
Once capital costs are amortized and we're paying only for O&M, this is going to be very cheap electricity.
I prefer the one 93 million miles away. In California, anyway, nuclear is out and solar is in. No looking back on what might have been with the breeders. We don't care about the breeders. Ancient history.
A factor of 2 isn't a bit, it's a lot.
Well, if California changes its laws to allow the ancient, tiny wind turbines on lattice towers (like these) to be taken down and replaced by modern machinery.
But do you know what climate change is going to do to cloud cover?
This is exactly the selling point of nuclear, also.
California is also the state which has protected its illegal-alien MS-13 drug dealers so they could remain in the country to kill the father and both sons of the Bologna family. We'll see how long the rest of the country allows this dementia to last before it demands responsibility.
Storage is measured with two numbers, GWh stored and the rate at which the GWh’s can be moved in and out in GW. What are you calling for?
Pick the worst week in the last 30 years and design to that. My guess is you will need at least three days of storage to get through the worst week. That is 6,500 GWh at a cost of $800 billion for storage bringing the total cost to about $2 trillion, $54 thousand for each man woman and child in California.
The intermittent powered grid will be carrying huge loads at peak generation times, charging car batteries, charging pumped storage facilities and supplying peak customer demand all at the same time, requiring much higher current and bigger, uglier, heavier transmission lines that spend most of their time at low capacity factors. Power line losses go up proportional to current squared times length so short lines evenly loaded on a nuclear powered grid would keep losses down.
You would also need huge oversized transformers and circuit breakers at substations to handle the peak current loads. Your grid cost estimate is very much lowballed.
Just getting the permits to cover the state with huge ugly transmission lines, solar farms, windmills and pump storage facilities is going to take forever, literally forever.
In reality you will have to build and maintain a fossil backup system in perpetuity. Include the cost of that system and its emissions. Include escalating fuel costs and emission fees in the future.
For your $1.2 trillion cost estimate you could buy 160 1.5GW nuclear plants with an average output of 216GW at 0.9 capacity factor. Refueling and maintenance outages are scheduled for spring and fall, so the full 240 GW would be available in the summer. In reality half that number of plants would be more than enough to meet your specs.
By building the plants near load centers the transmission lines would be short and their cost per mile would be lower because they would be smaller and well loaded most of the time.
The Rice solar plant design point is for a capacity factor of 0.34 Have any plants achieved 0.5 on an annual basis?
What is your recommendation to solve the global energy problem that does not have failure as an option?
[We have 200 major lakes and around 70 reservoirs.]
Pumped storage lakes are ugly industrial facilities except when they are full, and they are off limits to recreation, housing or any other use. How many can get permits for industrialization?
[If you were the greatest nuclear power sales person on the plant (which you are not, btw), you might try to focus on something innovative such as a plant along the coast that pumps water at off-peak hours.]
Interesting, I mentioned Offshore Power Systems which built a facility to mass produce floating nuclear power plants that could be located along coastlines, and I mentioned how nuclear could make better use of pumped storage than intermittent energy sources. You’re making progress.
[There is no need here for greater baseload capacity.]
True if you have no interest in getting off fossil fuel.
[Another big hole in your nuclear vision: If we went for the nuclear option for a future free from fossil fuel, we would need just as much or more energy storage as with renewable energy.]
That might be true in some fantasy land paper study where every day is an average day, but in the real world where a huge high pressure dome can sit over the SW U.S. creating a huge heat wave for days with little or no wind, it will not fly. Solar cell efficiency goes down in hot weather.
As electric cars and smart grid technology emerge, nighttime loads and prices are going to rise. The percentage of power consumption that is baseload will increase, making reliable baseload even more attractive.
[we don't have any nuclear fuel. Do you happen to have some? I don't. There are only a few places you can get uranium.]
We don’t need much, 59 pounds of uranium for an 80 year lifetime supply of electricity with our primitive pre model T reactors, 6 ounces with breeders. Sea water has over 3 billion tons at a price per kWh that is less than coal, but land based supplies are cheaper for the foreseeable future.
[Now we also have to consider that every nuclear plant is a potential terrorist target]
That is one of the advantages of nuclear power. It may lure terrorists away from the softer targets. The 9/11 deaths would have been limited largely to the passengers had they gone after nuke plants.
[We know there have been plans to intentionally create a Chernobyl-style disaster]
Not possible without a Chernobyl reactor with no containment building and a positive coolant void coefficient of reactivity.
The reality is that the world is still firmly locked in the fossil age. A few wealthy countries will dabble in renewables until they become poor countries, but people around the world will continue to extract fossil fuel and burn it until something cheaper and more convenient is made available.
What is your global solution that does not have failure as an option?
Btw, who is the greatest nuclear power sales person on the plant (sic)?
OT: Bill, using the <blockquote> tag
or the <i> tag for this (or <b> for bold) is a lot clearer than putting quotes in square brackets.
Rahm Emanuel.
Terrific, I can hardly wait for an all nuclear electric Chicago.
Bill,
I am blinded by the light of your well-made case for the U.S. to build out state of the art nuclear base-load electrical generation capabilities.
With proper design and operations, including preventative Mx, nuclear plants would make a reliable baseline for our electrical generation requirements.
The storage issue needs to be dealt with...we should complete Yucca Mountain and use it to temporarily store the wastes until we achieve re-processing and fast-spectrum reactors which would react the 'waste' as fuel and leave us with much more benign second-order waste products with shorter half-lives.
Nuclear generation would be much better than coal-fired generation: little Co2, no No2, So2, no mercury, cadmium, radioactive particles spewed into our air and our food chains...
This approach would be a great semi-re-purposing of LANL and LLNL and SNL and the rest of our DOE National Lab organizations...and The Naval Reactor organization...all these organizations could help jump-start this approach.
Plus, building and operating a 'fleet' f nuclear plants would support demand for more folks with science/math/engineering degrees, and would provide enduring well-paid employment.
Nuke is expensive.
So what? Quadruple the price of electricity, AND divert some monies being foolishly spent on MIC mis-adventures and subsidize the re-invigoration of the U.S. nuke power industry.
This approach is open to us now....it doesn't require break-throughs such as are required for fusion power generation, which will be someday or never. The approach requires sound science, engineering, and policy and program management.
Aw shucks, its just common sense I think, thanks Heisenberg.
Rod Adams recently had an interesting response to a similar comment. Look at the comments to this post and see what you think.
http://atomicinsights.blogspot.com/2010/12/kirk-sorensen-talks-to-google...
Thanks for the link to this blog...I bookmarked it.
Underground storage - yes. Burial - no. Many reasons, future use, better future reprocessing, easier inspection, better disposal techniques etc. Wouldn't take long to bury in a hurry if there was a need.
NAOM
- once in YM, the usual suspects will demand it not be let out again.
- if we replace our LWRs with something like the IFR we might as well place them on the same sites (access to transmission lines and cooling already provided) and produce the first fuel load from SNF on the spot using most of the same systems which will reprocess the fuel in operation. This avoids shipping of hot spent fuel and all the difficulties associated with it.
The big question may be "what do you do with all the excess reclaimed uranium" (an IFR will use only a small fraction of the uranium passed through a LWR over the same lifetime). It's not waste, and the U-236 content doesn't make it very radioactive. It will be the largest fraction of the products of reprocessing by far. Since it will still have about 1% U-235, maybe CANDUs will buy it. The CANDUs can probably use Th-232 for reactivity control and sell the resulting U-233.I'm game.
If we could commit to building out per your plan (or some version thereof) then sure, leave the fuel where it is at.
We are missing the boat by not leveraging our people's skills..folks from Naval Reactors, Los Alamos, Lawrence Livermore, and other government and academic institutions.
H
Heh. I had the idea of reprocessing LWR fuel on-site myself, but I just discovered that GE-Hitachi has checked the idea out enough to propose it officially (page 7).
Maybe by the time that 300 of these are built in China we will get the bright idea to build some ourselves...
With proper design and operations, including preventative Mx, nuclear plants would make a reliable baseline for our electrical generation requirements.
Proper design does not factor in man's warring nature.
And asking Man and Man's Corporations to have 'proper design and operation' is a foolish position. The industry is regulated (thus a metric for proper) and has fines for not following what is "proper" - why are the fines collected not $0?
When the operators can show they can go without fines for years "we" will know proper operation is possible.
From the NRC:
"The most complete and recent probabilistic risk assessments suggest core-melt frequencies in the range of 10-3 [one in one thousand] per reactor year to 10-4 [one in ten thousand] per reactor year. A typical value is 3x10-4 [three in ten thousand]. Were this the industry average, then in a population of 100 reactors operating over a period of 20 years, the crude cumulative probability of [a severe core melt] accident would be 45 percent."
Nuclear Regulatory Commission. "Delayed Access to Safety-Related Areas and Equipment During Plant Emergencies" (Information Notice No. 86-55). 10 July 1986.
Since that report we have had roughly 2,500 reactor-years of operation in the USA and a substantial fraction of that in France, with nothing close to a core-melt incident... using Gen II reactors.
Just one more example of how the dangers of nuclear power have been exaggerated.
Don't overgeneralize. The peak in the US is in the summer when everyone turns on their A/C, while the peak in Canada is in the winter when everyone turns on their electric heat.
There are definite advantages to this because when US demand is high in summer, Canada sends power from its giant hydroectric dams south, and when Canadian demand is high in the winter, the US sends power from its giant coal-burning power plants north. As long as the grid holds up, no ice storms hit, and no solar flares occur, it works very well.
Except for the parts that don't work well - I'm thinking of California and Ontario here. The most populated US state and the most populated Canadian province. Yes, except for them the system works great.
We had a discussion about Germany some time ago and we all (I think) agree that Germany is really not the greatest for solar. I am in No Cal and we clearly have very predictable solar power during the months and times we really need it. It is certainly not the answer everywhere, just like hydro or other locally available energies.
In addition, these analyses often disadvantage solar in calculating output over far too short a time, for example 20 years. More realistically it should be 30 or probably 40 years. In addition, while the price of solar is rapidly declining, the cost of fossil fuel is continuing to increase. This article and it's link doesn't indicate the assumptions that were used in calculating solar cost.
A study reported in IEEE Power and Energy magazine makes a good case for the benefits of low penetration wind (<20%) as part of the mix. http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=4787535 Given the availability of spinning reserves combined with the improved ability to predict wind speeds a few days in advance makes it much easier to integrate wind into the system. This study cites a price for backup costs at about $4 to $5 per Mwh. A reasonable reduction in burning up our remaining FF energy bank account is beneficial to humanity and welcomed.
Modern nuclear plants can be used as "spinning reserve" for wind. France is already using nuclear plants in load following mode.
Would love to see a good cite on that.
Rembrandt,are you factoring in the cost of storage and extra grid investment into the cost of renewables? Nuclear can provide base load power without these extra costs.
The cost of waste disposal and the time frame for approval and building nuclear plants is greatly exaggerated,IMO.This mindset presupposes that governments can't safely modify their process in the interests of expediting nuclear plants and that Gen 4 technology will not greatly reduce the volume and lifespan of nuclear waste.
According to the article, no. Of course, as noted above, these are average energy prices, not split between base load, following load, and peak load, and the cost of the storage and extra grid investments required to provide peak load power from nuclear is not included either.
"The cost of waste disposal and the time frame for approval and building nuclear plants is greatly exaggerated,IMO."
The cost of these things for nuclear (to date) are well known, though ongoing. The costs of
disposalsequestering and converting existing wastes have yet to be determined (consider Yucca Mountain). Whether or not these costs are being 'exaggerated' has also yet to be determined, IMO.[Whether or not these costs are being 'exaggerated' has also yet to be determined, IMO.]
Here is an interesting video on spent nuclear fuel.
http://nucleargreen.blogspot.com/2010/12/kirk-sorensen-asks-is-nuclear-w...
I didn't read every last nook and cranny of the article but I don't think hydro electricity is mentioned anywhere. Strange. I think it is the cheapest of all. Why the ommission?
Most hydro sites have already been built up.
This includes all the high storage (equals high reliability, even during droughts), low cost (mostly a geological issue, and usually inversely related to high storage), low external effects (mostly the evaporation from the surface of the reservoir), low political risk, and low distance to user.
BC and Quebec are planning some new big ones.
The analysis is very valuable, and I look forward to poring over it in detail. But it cries out to be said that an 'economic' argument (cost-vs-cost, in dollars) is irrelevant to the life-and-death decisions being made by our species, i.e., the 'externalities'.
What I'm trying to say is that 'externalities' are not a side issue; they are THE issue: climate change, increasingly destructive extraction industries, and the military and moral cost of suppressing the populations of areas where fossil fuels are found. (I didn't set out to be a polemicist; it just seems to be happening to me.)
We can, and should, provide the economic analysis to those who can only deal in economic paradigms; but to think exclusively within our 'business as usual' mindset will ultimately prove fatal.
A+ point. We should be considering ways of reframing our decisions so that the most important costs are included rather than focusing on whether or not good choices are possible under a flawed decision-making paradigm. Most of us already know what the less-polluting sources of energy are. Economics is about making good choices, not simply maximizing short-term dollar returns. An economic system that fails to consider the socialized costs of dirty energy ignores crucial quality-of-life considerations and leaves the public vulnerable to catastrophic risks by discounting them into oblivion. It is the failed system that deserves criticism, not the alternatives devalued for their inability to compete within said system.
Thanks again, Rembrandt.
By the way, when will we see the next monthly oil report. It's been a few months now, and I'm getting antsy '-)
dohboi, I was much more interested to read 'oilwatch monthly' a few years ago when all produced at maximum capacity. Now there is much guessing about spare capacity. Rembrandt just follows official EIA/IEA numbers, which put it at about 6 mbd. I think it is a lot lower, not in the last place because most OPEC countries are cheating on their production quota.
Yes, I think we probably passed 'peak reliability of any official oil-related stats' a long time ago. It's still interesting to see--if even the main stream figures can't hide peak, You know we are long past screwed.
Wish I had the time for ones to put together some figures and post a proper analysis but no, this is a just one of my many hobbies. All I can manage is to point to some direction of interest...
Here in Finland the public broadcaster made an investigative report on the MOT -program (script in Finnish) about our new electricity market.
The gist of it was that the particular characteristic of peak consumption of over 15000 MWs during the coldest days of winter compared to summer average of 8000 MW (June only 4500 MW) with the free market of electricity we have in Scandinavia and increasingly over the whole Eurasia will cause prices to rise. Currently we import electricity from Russia and Estonia during the winter. The trouble is, those countries also need that electricity on those days.
The market mechanism should work to balance this out if you have built enough capacity for the peak and we do have excess capacity coming online with the mandated renewables and the largest nuclear reactor in the world (as well as just having given licenses to build two more). This is all good if you forget that electricity cannot be stored reliably in any meaningful quantities.
The problem lies in the power companies who having invested greatly in their new power plants will want to secure their returns by selling the electricity in bulk to large industrial consumers with long term contracts. This is especially true of nuclear power which is particularly costly in terms of return on investment to run with less than full power seasonally.
Intermittent renewables like the wind will also seek to hedge their returns by trying to fix their costs down using contracts - for them it is even more problematic since you cannot govern the winds and stopping the wind mills when the market price is low doesn't store the wind for later time. You run at full speed no matter what (except maybe when the market price goes negative).
This creates a situation in Finland when on a hot and windy summer month our electricity consumption would be only half of what the power companies would like to feed us.
For the consumer all this excess production should be a win-win. The more capacity they build the cheaper the electricity will get, we were told by our politicians. Unfortunately it seems the opposite. Someone has to pay for that overcapacity plus a return for the capital, and its not going to the be the investor.
Last winter we had some weeks of record cold and the market price for electricity peaked on some hours at 1400 cents/KWh compared to typical 4 cents/kWh (last Feb. EUR = 1.3 USD). Small power companies and distributors, who had sold household consumers cheap annual contracts, now had to buy hugely expensive electricity from the market and sell it for next to nothing to those consumers just when the consumption was at its peak (75-80% of electricity is used during the winter months). For some of them those few weeks ended up wiping away all of that years returns.
It is claimed by the program that the electricity companies are squirring to install digital electricity meters to enable automated meter reading because this way they can eventually start billing customers the real daily or even hourly market price. The green lobby has long insisted that this is a good thing because it allows the consumer to regulate their electricity consumption according to the real cost and thus balances out peak consumption. It remains to be seen how many of us would keep a daily lookout of the meter and switch off our appliances and cooking and heating to save a few euros.
The program also point out the economies of some of the energy saving heating solutions in this new situation. Particularly heat pumps have become very fashionable in Finland. They consume less electricity then a direct heating through electricity and because of the high price of heating oil have also become economical to add to houses with oil heating. The trouble with them is again peak consumption occurring during the coldest time of the year. Normally a heat pump compressor motor consumes less energy then it produces but not after the outside air goes below -20. And all these heat pumps running away on the grid during the coldest days on otherwise oil heated houses will just add to peak consumption. Partly for the same reason geothermal heatpumps also add to the peak consumption unless they replace direct electrical heating.
So, the problem lies in the peak mode of consumption: heating. The program suggests that we should give back the subsidies to wood heating, particularly wood pellet heating, which has a low initial investment cost because it can be retrofitted into existing oil burning heaters. The largest producer in Finland for wood pellets is Vapo, with existing production capacity several million tons per year. Last year they produced only half a million tons, most of which was exported to Sweden.
This gives me a reason suggest a principle: however you produce it, electricity seems to have a fundamental inflexibility: you need to consume it as you produce it - and ones you start you cannot stop. This creates anomalies and absurd situations which unregulated markets distort further. Extreme example perhaps being Enron in California.
Storable fuels and means of electricity production which need not 'return their investment' during the next quarter, are ideal because they are not spent in vain but only when needed and thus do not create artificial reasons for their consumption either. Wood pellets being good example as you can fill your hopper when you feel like and consume as much or little as you need.
With electricity its more difficult as most forms of renewable electricity production are indeed heavy on initial investment as well as having no way to regulate or store the output. Micro-hydroelectric being the only one that comes to mind having these properties. But massive hydroelectric hasn't the many benefits which we expect from renewables.
I think these ideas and lessons are increasingly applicable to other countries as well. Finland being in the very north doesn't make us special in terms in heating needs since the difference with the rest of Europe is greatly compensated by the fact that our houses are properly insulated and thus during the cold snap their heating isn't that much different from a brick and mortar Victorian house in central london or the moors of ireland on a cold winter morning (i've lived there, I know!) which are impossible to get warm. You went to bed with the radiator!
- Ransu, Tampere -11C
REO - "Fair Information on Energy" - a Danish organization that supports the introduction of nuclear energy in Denmark has very precisely proven that Denmark exports the overflow of wind energy on windy days to the effect that only half of the energy produced by more than 5000 windmills on 40.000 square km is used in Denmark on a yearly basis. The rest is compulsory exported to Norway or Germany at low prices. We once had af flourishing nuclear scientific environment which was completely destroyed by the wind mill industry which has grown from a sweet baby to a grotesque monster - a beggar second to none - and even worse the windmills do not deliver what they are supposed to. Still the Danish population still firmly believes that wind energy contributes positively to our society and only very few politicians want to discuss all the problems in connection with wind energy and the civil servants in the Ministry of Energy only deliver optimistic and distorted information to the flow of ministers who actually have no basic knowledge on energy what so ever. I am so glad that the Swedes still are in full control of their common sense and continue to expand their nuclear industry – in that way the eastern part of Denmark will be sure to receive energy from a secure source.
"Fair Information on Energy" Organisation.
Where's the web site of that organisation?
Here it is - but it is all written in Danish: http://www.reo.dk/
Actually Denmark exports over 90% of its wind turbines with a profit and France doesn't do the same with its nuclear power plants: http://www.businessweek.com/news/2010-06-23/areva-sees-first-half-operat...
Despite the fact that France can benefit from international taxpayer paid organizations such as Euroatom and IAEA to promote nuclear energy for free and despite the fact that nuclear has received significantly more R&D subsidies than wind, PV, biomass, hydro, solar thermal, geothermal, tidal, wave and efficiency COMBINED:
http://www.world-nuclear.org/sym/2001/fig-htm/frasf6-h.htm
In fact Austria without nuclear power pays almost double as much on Euratom than on its 1011 MW wind power plants:
http://www.igwindkraft.at/index.php?mdoc_id=1009697
And as opposed to nuclear wind energy does not require taxpayer backed loan guarantees either:
www.npr.org/templates/story/story.php?storyId=15545418
www.bloomberg.com/apps/news?pid=20601087&sid=aC7VY11v6aMw
Not to mention that wind is actually free and imported uranium is not:
http://www.technologyreview.com/blog/arxiv/24414/
And wind power plants do not only have lower capital costs they do not create expensive decommissioning costs, do not require expensive ultimate repositories, do not require lengthy construction times and do not require cooling water:
http://www.guardian.co.uk/world/2008/jul/10/nuclear.nuclearpower
http://www.postandcourier.com/news/2008/aug/27/nuclear_surge_needs_waste...
Needless to say that wind power always produces more power in the winter when Europe requires more electricity and France is forced to import electricity: http://af.reuters.com/article/energyOilNews/idAFLDE6B119W20101202
"however you produce it, electricity seems to have a fundamental inflexibility: you need to consume it as you produce it - and ones you start you cannot stop."
That may be the case now but I think that could change without too much difficulty. Excess electricity can be used to produce hydrogen from electrolysis of water. This can be stored indefinitely for later use when electricity production is low. It could be either run through fuel cells (which I agree are not economical right now), or simply burned in an engine or power plant to make electricity (we already do this with natural gas and hydrogen would behave very similarly).
Of course the above scenario loses quite a bit of efficiency, because when you convert water to hydrogen and back again this is quite inefficient, but it does offer a way to store excess electricity when it is over-abundant. This inefficiency must be weighed against the alternative negative externalities associated with doing things the old fashioned way -- things like fossil fuel depletion and pollution and nuclear waste disposal.
It's not a matter of efficiency. Hydrogen economy doesn't scale, it will never scale. Nobody has yet suggested a practical conversion plant of any significant scale which could convert hydrogen at such a rate. There already exists practical grid storage mechanisms which are way cheaper as well as on the market with existing engineering: pumped storage for example. And is there a lot pumped storage being built? No.
[rant] Here's another one of my 'principles': if you can't show me some real world engineering examples I'm not going to be impressed. I do real world engineering at a physics lab everyday and I can tell you it gets pretty disillusioning. That's why I can't stand to read popular science rags, I mean mags with articles about the latest this and that techno gimmick promising to save us being "just around the corder" like fusion power.
[sarcasm] Have you seen any flying cars lately or even a supersonic passenger aircraft? - or perhaps even some sort of space shuttle? Perhaps one day we might colonize the moon - of course we would have to go there first. [/sarcasm]
For most people technology is magic and engineers are the poor bastards having to make up the illusions. But then they tell us it has to be on budget! That's why there's this tranceiver waiting to be fixed on my table from the 70's, because we can't afford to re-engineer a new one![/rant]
I'm sorry for being impatient but people should use the TOD search box more often. Would save a lot of reruns... Here is a collection of links (courtesy of SamuM) to some past highlights on hydrogen.
I can understand your frustration with the hydrogen economy and I would agree with you. I am definitely not a hydrogen advocate but merely stating that there are alternatives if we really need them. I also don't think that you are factoring in how much the prices of fossil fuels are going to go up in the next year when the US dollar hyperinflates. Then maybe we will see more pumped storage using local electricity generation.....
I too am an engineer working in a variety of energy production applications so you may not want to rant so much. But thanks for your links to hydrogen efficiencies because that is somethng I had not nailed down yet and I was looking for the hard numbers. I will go through them in more detail.
"Have you seen any flying cars lately or even a supersonic passenger aircraft?"
I've seen an electric car and now Nissan is selling them to Joe Public. They will mostly be charged overnight when electrical demand is low. What's even more interesting is that here in North America where the gasoline I buy comes from tar sand, the amount of natural gas + electricity wasted simply to refine tar sand into gasoline is enough to charge an electric car to go just as far! In other words, the EROEI of Alberta tar sand is about 1!
So while you don't like reading popular science mags (I can understand some of your frustration), I see the painfully slow progession of energy technology as having more to do with the interests of established big business who throws as many wrenches into the progress as possible in hopes that the majority of the population will still be addicted to fossil fuels when the supply crunch comes and prices explode.
Excess electricity can be used to produce hydrogen from electrolysis of water. This can be stored indefinitely for later use when electricity production is low.
Stored indefinitely - no.
Until I see where one can show Don Lancaster is wrong
http://www.tinaja.com/h2gas01.asp
And show how Ulf Bossel is wrong
http://www.thewatt.com/node/78
I'm not gonna just believe your position is even close to right.
How much truth is there to this opinion, and is this effect seen in Iowa where much lower temps are common.
"It gets better. As the temperature has plummeted, the turbines have had to be heated to prevent them seizing up. Consequently, they have been consuming more electricity than they generate."
Read more: http://www.dailymail.co.uk/news/article-1342032/RICHARD-LITTLEJOHN-You-d...
Wind energy in cold climates.
http://virtual.vtt.fi/virtual/arcticwind/experience.htm
Executive summary
Projected Costs of Generating Electricity – 2010 Edition is worth reading for assumptions/limitations of the study.
Besides the fact that this report completely ignores the costs and cost savings of efficiency measures especially in the inefficient US and also leaves out combined heat and power plants:
http://hes.lbl.gov/consumer/profitable
http://www.iea.org/files/CHPbrochure09.pdf
New nuclear is more expensive than suggested by IEA. According to this study financed by the nuclear industry new nuclear is at 11.1 cents/kWh when capital costs of only $4000/kW are assumed:
http://keystone.org/files/file/about/publications/FinalReport_NuclearFac...
However capital costs of new nuclear are meanwhile double this amount:
http://www.thestar.com/comment/columnists/article/665644
http://www.npr.org/templates/story/story.php?storyId=89169837
http://www.rmi.org/rmi/Library/E09-01_NuclearPowerClimateFixOrFolly
And wind is actually significantly cheaper than 13.7 cents/kWh. According to this Department of Energy report wind energy costs are 4.9 cents/kWh on average:
http://www.nrel.gov/docs/fy07osti/41435.pdf
The reason why China is installing significantly more renewable energy than nuclear energy is simply because renewables have a cost advantage: http://www.ren21.net/Portals/97/documents/GSR/REN21_GSR_2010_full_revise...
By the way, according to the EIA the oil prices will be around $55 in 2030 - why does Rembrandt assume that EIA is a credible source?
The cost of wind power per KWh is a function of how much total wind generation is assumed because the best sites are the cheapest and as you expand capacity, you move into more expensive sites. In the US and other Northern countries, the marginal increase in cost may a occur at a fairly high level of generation. However, in hotter climates, this is not likely to be the case. The first 5% of capacity is going to be cheaper than the next 5%, and so on.
This is true. But the technology is also improving. So there is likely to be some kind of U shaped curve where costs keep moving down, until eventually the site quality degradation outruns the technology improvements. Wind is not at the bottom yet (at least here in Minnesota) as there are many sites in Minnesota where older turbines are being replaced with newer designs and even those turbines don't incorporate some of the newest blade research.
Fossil fuels went through a similar U in that the cheapest oil could be recovered with 50 foot wells, but the engines were so inefficient that most of that wonderful high EROeI fuel was lost as waste heat. Somewhere in the 50's or 60's we hit the low point of the U where we tapped out the efficiency gains of engines etc, and could not longer compensate for the rising cost of fuel. Then we started lowering delivered services (smaller cars with less cargo room, etc).
I am guessing a study of the whole well to wheels (or well to industrial use, or whatever) efficiency over time would give us a pretty good explanation of growth of the US economy.
That's a nice theory. It sounds reasonable, and I've heard it a number of times. It also has almost nothing to do with reality.
The reasons wind parks get built are pretty complicated. In the 1980s and 90s, almost all the grid-connected commercial wind turbines were in California. California is nowhere near the best place for wind.
There are huge areas with great wind potential in the US (especially from Texas up to the Canadian border) that are practically untapped (Pickens work notwithstanding). A lot of this potential is stranded because there is not much use for the power nearby and we have no commitment to build the necessary transmission and storage facilities that would be needed to take advantage of it. There are also major NIMBY issues.
I understand that a national hydrogen pipeline grid is not a popular idea on this forum, but such a thing would solve the problem. It would cost a lot to build and maintain, but it would be a very small percentage of the money we will have to allocate for energy over the next couple of decades.
I wrote about this some in my OCT 3rd article ... at
http://www.safeenergyassociation.org/
Fossil fuel heating systems and hot water heaters can also be replaced by heat pumps and powered with wind energy and thus save fossil fuels without worrying how to produce alternatives. Most household energy is needed for heat energy (washing, heating, cooling, bath etc.) and storage of heat energy is cheap and simple.
This house in central Europe stores solar heat energy from the summer in order to provide sufficient heating and hot water during the entire winter: http://www.jenni.ch/pdf/Mediendokumentation_Einweihung%20Solar-MFH%2031....
And transmitting electric energy efficiently over large distances is easy and several orders of magnitudes cheaper than maintaining the largest defense budget in the world:
http://www.abb.com/industries/ap/db0003db004333/137155e51dd72f1ec125774b...
Besides: The US has currently absolutely no lack of flexible power plants:
http://www.eia.doe.gov/cneaf/electricity/epa/epa_sum.html (The US has 12 times more natural gas than wind power capacity).
http://www.erg.com.np/hydropower_global.php (North America has 5 times more hydro than wind power capacity).
In addition: Even heat pumps entirely powered by co-generation plants reduce the natural gas consumption by at least 50% (if the co-generation plants and heat pumps replace fossil fuel heaters).
And a hydrogen network may not exist but a ammonia network does:
http://www.ammoniafuelnetwork.org/
A couple of notes:
Financing can be a tricky beast and although reductionism can be helpful to conceptualize something reducing a complex activity such as power generation reduced to one variable (“interest rate”) muddies a discussion rather than clarifies it.
(Rembrandt:Je moet heel erg voorzichtig met deze termen zijn.)
Financing is almost always a mix of debt and equity financing on the extremes with frequently hybrid instruments like preferred stock, “units” like stocks with attached warrants and mezzanine financing of different seniority levels thrown in. The returns on all these different types of financing can significantly different. Capital structure matters greatly from both a return as well as a risk perspective. And don’t forget the roll that taxation plays in determining the capital structure of a utility.
To give a few quick examples:
A bond can be issued as a liability of just a project, the company who is undertaking the project or even the municipality in which the project is located. The three bonds will carry different costs of capital and will also have different returns to the investors at the same cost to the utility, for example, in the case of the municipal bond, the location of the investor.
A lot of financing is equipment specific. For example, if you’re building a powerplant and are buying turbines from GE there are different way of financing it: GE capital (in reality some subsidiary) can finance it with or without recourse to either the specific turbine, a specific batch of turbines or even all the turbines they deliver for the project. All 3 different recourse levels come with different terms/costs. These different terms has an effect on the rate of return required by other bondholders because if the turbines are pledged as collateral to specific loans there is going to be less collateral for other bond holders.
Alternatively you may be able to issue corporate bonds, munis or for example get a bank loan to finance the turbines.
Financing can be fixed rate or floating rate and either amortizing or bullet.
Financing can have a range of maturities which has an effect of your financing rate.
A significant source of financing for alternatives can be Production Tax Credits (PTCs). These credits can be NPVd and sold off to certain entities which need tax credits.
As an aside, because alternatives tend to be price takers rather than price makers a lot of creditors require production to be hedged, either completely or largely. Hedging can be done through various means – off-take agreements fixed as to quantity with either a cap and/or a floor, fixed as to quantity as well as price, a straight swap etc…. That by itself changes the return profile as well as the volatility of the investment.
On the equity side all the above plays into coming up with a valuation but there are also a lot of other factors playing into the cost of capital – for example, whether one entity can own 49.9% or 50.1% of the voting stock will dramatically influence your effective cost of capital. The leverage matters a great deal to both general creditors as well as the equity holders. Not all utilities are levered to the moon. The ones which are in trouble, and therefore in the news, may be, but the causality can be tricky to determine.
If you’re building a coal plant all the above applies but in addition the input side (coal and water) have to be dealt with. Most coal plants have long term contracts (often 10+ years) for coal fixed as to quantity where the price is set annually based on some index of relevant coal grades or sometimes a BTU calculation.
I guess all of this is just a very long way of saying that the table with different electricity costs at different rates has a variance associated with it which is so large as to effectively make it useless in evaluating specific options such as renewable vs non renewable. A complex situation has been reduced too much.
(And if one were to build a powerplant with 100% equity the whole table effectively becomes irrelevant anyway, at least in most cases.)
And let’s not even go into the underlying energetic (is that a word?) difference between alternatives and FF based power generation which is the crux of the whole issue yet completely sidestepped.
Rgds
WeekendPeak
The studies appear to be using the discount rate as a broad guage approxmation for cost of capital. To be accurate would require separately considering the debt and equity parts of the investment. The income tax policy on the profits used to provide a return on equity would vary by country. Another country variation would be the property tax on investments.
The global study approximates all debt, publicly owned generation costs.
Just like in oil/gas drilling what matters for projects to be realized is the marginal cost, not the average cost.
As the currently installed base of FF powerplants is not recently installed the average cost is likely not going to be the marginal cost. Additionally, for “new” technology like solar/wind average finance costs are likely to change because of more experience / datapoints. Furthermore, a lot of traditional sources of finance (especially in the US) are new to financing these types of operations and are still on the steep part of the learning (read:cost) curve. European banks have much more experience in financing alternatives which is why a lot, if not most US alt. energy projects are (lead) financed by Europeans.
Rgds
WeekendPeak
I would not have been able to convert my home to a net-zero solar powered home that uses no oil or gas without the subsidy. I attached a video explaining the changes my family made to reach net-zero status.....
http://www.youtube.com/watch?v=hHmXhgBhtWk
MrEnergyCzar
Interest rates are completely and utterly irrelevant.
The very best time to buy a house is when interest rates are highest. This is because the price of the house can only go up as interest rates drop. Your analysis assumes the very opposite.
The Australian Government released a report on the Levelized Cost of Electricity Generation covering FF (with and without CCS) and Renewables with estimates for 2015 and 2030
They used a weighted cost of capital of 8.4%
Australian Electricity Generation Technology Costs (pdf)
This report is riddled with assumptions that makes the conclusions hard to accept. Of the generation methods listed Australia currently has little or no nuclear, wavepower, offshore wind, geothermal or solar thermal. As of this month I'd say the plug has officially been pulled from carbon capture and storage and there will be minimal new hydro. At the moment new cleantech in Australia is basically either onshore wind or PV.
I tend to agree with you
Natural gas seems to be the most obvious/realistic/pragmatic choice to me for Australia in the short term
Personally I am interested in solar thermal with storage (increased capacity factor), but I think we have to wait and see how the Spain/USA projects perform first
Anyone who has followed Geodynamics knows just how difficult Hot Rocks can be
I struggle to see how PV can make any real headway in replacing 45GW of generating capacity
Nuclear NIMBY and not without a carbon tax
Coal CCS - dreaming
Many of the comments touched on the weakness of the author's assumptions. First, the ruling elite have already decided FOR US that the future is coal, oil, and gas--caution be damned. They have done so through the phony "Copenhagen Accord" and "Climategate"--they have unleashed the dogs of global-warming deniers. The ruling elite doesn't give a damn about science and that is a contextual fact that the author seems to know nothing about.
Nuclear power is a disaster and can not be underwritten/insured except by government and is done so at the expense of future generations. The fuel is finite and, of course, toxic.
Coal is going to kill most life on the planet. So maybe the author should factor into the equation how cheap mammalian life is in his 'economic' model.
Feed-in tariffs have worked well for renewable energy. The problem is not cost! The problem is that these decisions are being made by the ruling elite and are not subject to rational debate or economic analysis.
All the precision without socio-economic analysis of the top-down decision-making process in a totalitarian corporate world is evidence of a confused mind.
I think it is evidence of commenting on the article rather than the world at large.
Rgds
WeekendPeak
The photovoltaic number seems very high. Consider that for the average location in the US the insolation (sunlight) is about 1800 kWh/m2-year. This results in 1.8 kWh per rated Watt of generating capacity (which is how photovoltaic modules are currently priced). Most modules are specified for a 25 year lifetime although it seems likely that they will last significantly longer than this. Some manufacturers talk about 40 year lifetimes and degradation rates tend to bear this out. Over 25 years one could therefore expect 45 kWh per rated W of module. At $0.215/kWh this represents an investment of nearly $10/W for the system. If one assumes a 5% cost of capital amortized over 25 years this would allow a purchase price of $2.7/W. Large systems are currently available in this price range. However, it should be considered that the price of energy may also rise over 25 years. Therefore the 5% cost of capital seems to me to be unreasonably high.
For reference, First Solar is currently producing CdTe modules at a cost of $0.78/W and the lowest current Si module manufacturing cost is estimated to be $1.10/W. In large systems one could reasonably expect to install systems for $1/W (see the First Solar stockholder presentations for background on how). This would result in a system price of $1.78/W plus profit to the manufacturer. If this profit were 20% for the whole system one could expect to pay $2.14/W installed. If one rated Watt of capacity generates 45 kWh over its lifetime then this works out to 4.75 dollar cents per kWh plus the cost of capital.
Note that photovoltaic systems compete at the customer's electric meter, and therefore at a retail price, while all other systems compete at the grid connection point, and therefore at wholesale price. This results in roughly a factor of two difference in competitive cost/kWh. Based on the above one might expect photovoltaic technologies at current manufacturing costs to be competitive a the consumer's electric meter without subsidy if the effective net cost of capital above inflation in energy prices at the consumer electric meter is 2.5%.
Prices of renewables will come down in time, but we have to think about the cost on the environment. That makes renewables a much better deal, and fossil fuels outrageously expensive. The Organic Mechanic has a great selection of products to upgrade your home to be more efficient to cut down on emissions, take the load off the grid and reduce dependence on fossil fuels.
Is anyone familiar with Red Leaf Resources? They were the hit of the 30th annual Oil Shale Symposium a few months ago.
Excellent posting, Rembrandt. However I doubt that it is always realistic to apply a 5 or 10% interest rate. This is only correct for investors who borrow money for their investment into an energy facility, which is for example probable for investments in big facilities like a nuclear power plant. But for example as far as I can see in Germany, most people who invest in small-scale roof photovoltaic panels (which is 99% of all PV plants) use their savings for the investments. And many also use PV as an investment to make a pretty good profit, which wouldn't be profitable if they had to borrow the money in the first place. Thus, in these cases the high credit interest rate doesn't apply. Instead here the correct discounting factor is the inflation-corrected interest rate of the respective opportunity costs (i.e. the comparable rent from a low-risk investment the savings would have been used for, e.g. on a bank savings account). I guess that this inflation corrected value would be rather in the order of 2%. So in all these cases the discount rate is much lower, which makes e.g. investments in PV more profitable than what your article suggests.
Also in many cases interst levels on savings accounts are not even matching inflation
http://www.ft.com/cms/s/2/75e6c9dc-e11c-11df-90b7-00144feabdc0.html
Also in the case of PV it is quite likely that the cost of installing the PV will add a similar value to the house itself, its no different from spending the money on buying new furniture and carpets.
What the EROEI or ROI of a new bath, carpet and a larger television?
Traditional financial analysis would consider solar panel installation as far riskier than an FDIC insured savings account. In fact, it would probably be considered as riskier than highly rated corporate bonds.
If an individual was really going to keep all of that money in a savings account, then in that one case the discount rate could be the expect saving return over the period, maybe 2%. If they were going to keep it under their mattress, it could effectively be negative as the money would gain nothing and is at risk of theft or damage.
If you are 100% certain that you will stay in the house for the life of the project and have an energy use profile that doesn't change much, then the cash flows would be considered fairly low risk, but this is may not be the case for average people.
However, for the bulk of people (or any calculation at a public policy level), the opportunity cost would be much higher and there is risk to the cash flows. It may well be that some individuals have a lower cost of capital than average, but this wouldn't change the analysis.