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Electricity costs exhibits

I note that there has been some interesting discussion here on costs of electricity, especial the comparative value of fossil fuels versus nuclear (and renewables). This is a point I will revisit from a number of perspectives over the next few months, because I agree with commenters like Arthur Dent, Peter Lang and DV82XL that this is a critical issue (though not the only one). For now, here are a few interesting points to inject into the conversation.

First, I have a paper coming out shortly in the journal Energy, co-authored with Martin Nicholson and Tom Biegler. It is called “How carbon pricing changes the relative competitiveness of low-carbon baseload generating technologies” (DOI: 10.1016/j.energy.2010.10.039), but is not yet available online — when it is, I’ll write up an overview of it on BNC. The core message of this paper, based on a standardised meta-review of the last 10 years of authoritative assessments of levelised cost of electricity (LCOE) and life cycle emissions (LCE), is that nuclear is the lowest-cost option for mitigating carbon emissions; moreover, is already competitive with pulverised fuel coal (under the right conditions). I’d like to say more now, but I’ll have to wait until it’s been formally published online. Press releases etc. will be forthcoming…

Still, there are other things I can point out for now.

Exhibit #1: IEA/OECD projected nuclear costs for 14 countries — 2010 update:

Exhibit #2: 2016 Levelized Cost of New Generation Resources from the Annual Energy Outlook 2010:

Exhibit #3: OECD electricity generating cost projections for year 2010 on – 10% discount rate, c/kWh:

country nuclear coal coal with CCS Gas CCGT Onshore wind
Belgium 10.9 10.0 9.3-9.9 13.6
Czech R 11.5 11.4-13.3 13.6-14.1 10.4 21.9
France 9.2 12.2
Germany 8.3 8.7-9.4 9.5-11.0 9.3 14.3
Hungary 12.2
Japan 7.6 10.7 12.0
Korea 4.2-4.8 7.1-7.4 9.5
Netherlands 10.5 10.0 8.2 12.2
Slovakia 9.8 14.2
Switzerland 9.0-13.6 10.5 23.4
USA 7.7 8.8-9.3 9.4 8.3 7.0
China* 4.4-5.5 5.8 5.2 7.2-12.6
Russia* 6.8 9.0 11.8 7.8 9.0
EPRI (USA) 7.3 8.8 8.3 9.1
Eurelectric 10.6 8.0-9.0 10.2 9.4 15.5

Exhibit #4: Electricity prices by country (selection — have more than 5 million people), with % energy generated by nuclear and technosolar* renewables (only domestic generation is counted):

*Wind and solar. Hydro and conventional geothermal are not listed here as they are highly location-specific and not scalable to replace fossil fuels.

A super-crude multiple linear regression of these data yields the following equation:

Electricity price (c/kWh) = 20.5 – 0.1*N% + 0.5*T%

i.e. baseline cost is 20.5 c/kWh, with each percentage unit of nuclear reducing the price by 0.1 c/kWh and each % of technosolar adding 0.5 c/kWh to the price. (Don’t draw any serious conclusions out of this super-simplified analysis).

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This is data from the real world. Yes, there are caveats — aren’t there always? Draw your own conclusions.

By Barry Brook

Barry Brook is an ARC Laureate Fellow and Chair of Environmental Sustainability at the University of Tasmania. He researches global change, ecology and energy.

259 replies on “Electricity costs exhibits”

Try “Load Based Licence Fee”. That’s the term currently used by the DECCW (the EPA) in NSW. This fee amounts to millions of dollars per annum and is levied on anything and everything relevant to an industrial operation, including of course mining and power generation.

If talk of Carbon Tax is dropped in favour of a ramped-up LBL fee the effects will be the same, except that the cash would then flow to the Commonwealth rather than the States.

As somebody just said – a political issue.

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“I’ve offered suggestions on BNC, but they are not making any headway because, I suspect, of the deeply held underlying beliefs of many of the participants here.”

Peter,

You are constantly talking about ideological beliefs and how people should drop them, yet YOU are the one who is constantly ascribing political positions to commenters here, almost always on completely unfounded bases. It looks very much like you are the one who is trying to advance a political agenda.

You say “put aside all your ideological baggage that you want to tie to climate change;”. Well, perhaps you should put aside all your ideological baggage that you want to tie to conservative economics.

The “Alarmist” claims about climate change made by Barry and others on this site are very well reasoned and supported strongly by evidence. I wonder why you bother making “derogatory” claims on a site which was initially made to communicate climate science, and continues to look at solutions to what is unequivocally a very serious problem.

I’d be much happier to listen to your main points if you cut the political nonsense which you repeatedly attach to the majority of your claims. You’re not winning any support doing this.

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John Bennetts, on 17 November 2010 at 12:32 PM — If you want to call it ab LBL fee that sounds fine. Unfortunately, it does not appear to apply to transportation fuels?

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David Benson is correct. Transport fuels are not covered.

I guess that LBL is a conceptual framework which is at present going nowhere relevant to this thread.

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Well said Tom Keen.
We have tried to get Peter off his ideological hobby-horse before, here on BNC, however, his foot seems stuck in the stirrup ready for re-mounting:) on any occasion. Peter – play the ball not the man – that is the standard of discourse we encourage in Oz. That said, I admire your intellect, knowledge and perseverance when you use it to promote nuclear energy.

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FACTSHEET
AUSTRALIAN ELECTRICITY GENERATION
TECHNOLOGY COSTS – REFERENCE CASE 2010

Click to access EPRI%20Fact%20Sheet.pdf

Comments:

1. Not a fair comparison because of the exclusion in the LCOE calculation: “Excludes grid connection, transmission, and firming (standing reserve requirements)”. Wind and solar are not comparable with fossil fuel and nuclear.

2. Why is wind shown out of its correct ranking order (on the basis of LCOE) in each chart? This seems like a bias. It seems it has been shown on the 2015 chart ranked about four or five technologies higher than it should.

3. Geothermal, of the types proposed for Australia, have never been demonstrated. They have decades of development before they are commercially viable at the scale required to make a significant contribution to Australia’s electricity supply

4. Little allowance for cost reduction of nuclear between 2015 and 2030 but large cost reduction for solar technologies.

5. I presume the projected LCOE for solar thermal with storage is based on the assumption that solar thermal with storage will be able to provide baseload generation. This is a highly optimistic assumption. For a fair comparison of LCOE why not assume that we will manufacture small to medium nuclear power plants on a production-line like tanks during WWII, and at a cost for such production?

My opinion:

6. Despite what others may argue, the LCOE will be the critical determinant of how, when, how much and at what rate nuclear will be rolled out (in Australia, in the developed countries and in the underdeveloped countries – eg Ethiopia and the like). We can get over all the other public perception problems relatively quickly, if the cost is below that of coal – which it could be if we removed the impediments and sent the right signals to investors.

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@Peter Lang:
“We can get over all the other public perception problems relatively quickly, if the cost is below that of coal – which it could be if we removed the impediments and sent the right signals to investors.”

In Australia, the wrong signals to investors, at present, include the legal bar on nuclear, fuzzy public misapprehensions re the nuclear fission cycle, the uncertainty re carbon pricing and the fact that so many investment decisions are made in a distorted market, eg government iniatives for solar and wind, especially rooftop domestic units which will never be economic except in niches such as ultra-remote locations. I would agree that LCOE is A critical determinant, but not that it is THE critical determinant.

Thanks for bringing this paper to our attention. I imagine that there is a full report somewhere which more fully sets out assumptions, data sources, etc. I also imagine that it will never be publicly released.

Barry’s figures for NPP (Exhibits #1 and #2 above) do not range as high as those from PRI. Is this due to use of of North American data in lieu of best available practice? If so, then there should be more allowance for cost decreases as the cheaper NPP technologies filter through.

The authors of the EPRI report appear to have gone out of their way to ensure that they did no favours for NPP options.

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Its interesting to observe wind is priced the same as nuclear (LCOE). The nuclear capacity factor is assumed to be 85%, which I think is low, and as Peter remarks in his first point above, the indicated LCOE for wind is nothing like the full cost.

Its frustrating to continually see the critical transmission and firming costs omitted in comparisons of technosolar to other technologies. I can only assume the solar costs indicated here are omit “firming”, meaning this “factsheet” is comparing the cost of daytime solar power to other generators. What is the cost of nighttime solar power?

Is there some mechanism whereby the NEM could properly attribute wind and solar externalities to those generators? Having operators pay for the required transmission seems obvious. But is there any way the cost and CO2 emissions from backup could be clearly attributed to operators? They would of course complain about having to work within the outmoded baseload paradigm ..

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I assume ACIL Tasman’s report for AEMO was an input into the LCOE estimates. The figures could perhaps be reconciled using the AT report’s assumption that a tonne of CO2 will cost $23.

Some entries lack credibility. Surely it makes a difference if the power station is 100 km from a black coal source as opposed to say 10 km. It seems fairly heroic to estimate CCS costs when there are no operating plants. There seems to be an element of flavour-of-the-month with the low estimate on hot sedimentary geothermal. What real world data is that based on? Perhaps their next report will be on the biology of Mars.

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You never seem to see a table of LCOE estimates that doesn’t contain contentious entries. That includes Wikipedia’s version. For example natural gas is currently cheap in the US but not in Europe. These tables need additional columns to cover
1) CO2 costs say at 3c per kg
2) expected subsidies
3) costs to achieve say 85% capacity using only replication and transmission
4) costs to achieve 85% capacity using gas fired generation.

As it stands LCOE tables seem to come out every six months or so like edicts from the Vatican. Then commentators say this bit can’t be right and so it goes on.

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@John Newlands:
I like the idea of CO2-e price sensitivity data being included in LCOE tables, along with indications of transmission and firming costs for each option, but then the whole would extend beyond 4 pages, which I presume was a mandatory maximum length of document.

Seemingly, niether politicians nor the wider public can digest more than 4 pages, including a few pretty graphs and charts.

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I think you will find that the LCOE tables in the Fact Sheet are identical to the ones published in the ABARE Aus energy projections to 2029-2030 report released in March so nothing new here. They were derived by EPRI.

Although the Fact Sheet doesn’t say so, these are 2009 A$ not 2010. The costs are derived in US$ and converted. The A$ range in 2009 was 0.6 to 0.9 so depending on when the conversion was done will have a significant bearing on the actual dollar values.

John Morgan these figures do not include firming but they are life-time assessments and they do account for variation in output from solar and wind so it isn’t just the solar day-time. What is not included is any external back-up needed to make the technologies dispatchable.

85% capacity factor is realistic. You might have an availability factor of 90% (10% for maintenance) but because of some part-loading and parasitic losses the actual output delivered to the bus-bar is only 85%.

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@ John Bennetts:

My fear is that Australia will seek to follow a nuclear option, only to discover that our little country has wasted too much time while the trade systems of the world progressively are stressed and fail during the next decades. Who cares whether the Koreans, the Chinese, the French or the Canadians have the best NPP designs, if none of them want to do business half way around the globe and resource wars are breaking out around them?

What’s this? Is this by the same John Bennetts who told me to drop dead for questioning ABARE in that old thread? Come on John, there are no ‘resource wars’ coming, ABARE says we’ve got plenty of everything!

(nudge nudge wink wink)

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@eclipsenow:
Yes, eclipsenow, this is the same JB who you tangled with before. Last time it was about one-track-mind the end is coming oil is going to cost a squillion and I won’t get any of it so the world will change forever raving. Of course peak oil is coming/has arrived. Of course changes will happen, just that I do not see calamity around the corner on this front… yet, and I certainly have not declared war on ABARE over their methodology.

My reference was to potential resource wars (mainly over food and water and rising seas), not about FF scarcity. Who needs to travel anyway? Really? The tourism business is built entirely on a false premise, which is that the grass on the other side (of the globe) is greener. I like my grass to be at home and for the car and the two utes to stay in the shed.

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The rise and rise of gas. After Darling Downs Qld then Mortlake Vic the next gas fired power station will be Mannum SA
http://www.adelaidenow.com.au/news/south-australia/m-power-station-near-mannum-to-meet-summer-demand/story-e6frea83-1225961131811
They say they will work towards 1000 MW capacity which seems a lot for a peaking plant. Perhaps it will become the replacement for the Torrens Island closed cycle baseload plant which is Australia’s single largest gas user.

I believe the unannounced plan is to connect Cooper Basin (Moomba) with central Qld coal seam gas and I gather a section of pipe is being replicated now. Let’s face it folks the higher powers have decided on the coal replacement technology and it is gas. Talk of 80% CO2 cuts and serious carbon prices can’t be taken seriously.

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@John Newlands:
Don’t forget that Bayswater Power Station is close to both the North-South and the East-West pipeline routes which are proposed for CSG. B2 power station is proposed for and has been approved for either air cooled CCS ready coal (whatever and whenever that comes to pass, OR CCGT, again air cooled. 2000MW. Not strictly peaking, but at least flexible.

Compared to the black coal alternatives, and after allowing for the auxiliary energy demand of the air cooled side of things, the potential carbon reduction is nowhere near 80% wrt, say, the existing adjacent 2.7GW Bayswater Power Station.

As for CCS: Pull the other leg. I have yet to hear of a suitable storage formation in the Hunter, guaranteed not to EVER release the CO2 back into the atmosphere.

Have you a handle on the 80% figure? It seems to be a bit high except perhaps wrt conventional brown coal, which is not a fair comparison unless additional brown coal is being proposed somewhere in the NEM.

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Hi John B,

Of course peak oil is coming/has arrived. Of course changes will happen, just that I do not see calamity around the corner on this front… yet, and I certainly have not declared war on ABARE over their methodology.

Glad to hear it. Although I don’t think in my most fevered moments that I questioned ABARE’s *methodology* but their focus. I’m sure they are great on domestic resources, but oil is an internationally traded commodity and peak oil is a global phenomenon. It was the head of ABARE’s flimsy replies to the peak oil task-force that really set my teeth on edge.

But I agree with you on the potential water and food crisis, yet disagree that peak oil can be so easily dismissed. And have you followed the increasing chatter about peak coal becoming imminent? Seems impossible, unthinkable… until one divides total reserves into roughly half and labels the first half ‘easy and increasing’ and the second half ‘difficult and decreasing’. Whack on a bell curve, and it all comes clear.

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just get on with the first 20 to 40 NPP’s at any cost Australia

@ John, Quokka, David Benson, Tom Keen, Barry, and others I have missed:

I agree!

The Left Versus Right debate has bored us all to tears long enough.

I left BNC for a few weeks there because every 2nd post seemed to scream FREE MARKET, SAFETY REDUCED, LOWEST COST NUCLEAR IS THE ONLY WAY TO SAVE THE WORLD!!!!!!!!

I’m grateful to DV8 who spelt it out so clearly:

Frankly claiming without proof that nuclear is over engineered, is not going to garner much support in the industry. It is just not a credible position to take. And no one will take it seriously at all if you can’t point to where the over building, and over engineering is occurring. Simply saying ‘I believe’ to a group of engineers won’t get you far.

And then Barry:

This line of argument, along with your drum beating about making nuclear ‘less safe’ to reduce costs, is a gold-plated guaranteed sure path to failure in getting public acceptance, however rational it may seem to you. I have no doubt about that.

I’m glad to see some more flexible economic paradigms finally standing up to this agenda-driven bullying.

Let’s just agree to get the job done — whatever it takes — and bust all the anti-nuclear myths along the way.

Also, what gives with the ‘binary’ nature of the hard right? They are so quick to slander anything a tiny degree left of their position as COMMUNIST!

EG: Tom Keen said:

Peter, I’m unsure where you got the idea that this appeals to the “hard left” or that John Bennetts is advocating socialist policies.

Agreed! Peter’s world seems so ‘all or nothing’! If it’s not HARD right it’s socialist. As if there are not an infinite number of economic ratios in between. As if we can’t move the “government to market” dial 0.5% to the left without Peter screaming COMMUNISTS!

Why are the hard-right so quick to slander any *tiny degree* left on the dial as ALL the way Left? Why are they so BINARY in their paradigms? It’s On or Off, a FREE market or North Korean Dictator! That’s all there is folks. No really. ;-)

They’re blind to the infinite degrees of possibility between their artificial and contrived economic bookends.

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@eclipsenow:

Peter has intentionally put aside some of his issues about how the marketplace works/will work. I suggest that you do also. Yesterday’s debate is about as tasty as yesterday’s food.

Peter has brought to our attention a significant contribution, one that the politicians will pick up and dissect for the next news cycle – 6 hours to 6 months – and I appreciate very much the chance to look at its bonafides before it gets to the front page of the Australian wearing different clothes.

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Peter has intentionally put aside some of his issues about how the marketplace works/will work. I suggest that you do also. Yesterday’s debate is about as tasty as yesterday’s food.

We’ll see. I’ve only been catching up recently, and must have missed the part where Peter agreed to stop riding his hobby horse to death in front of us all. Got a link? Cause I’m sure this particular horse is going to have another run. And another. As I said, it’s one of the reasons I stopped coming here.

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EN, there is no need for a link. Peter’s opinion is clear and will probably not change any time soon. On this thread, he has made clear that which is technical discussion and that which is personal opinion. See Item 6 of 8:12pm, 25th November.

That’s clear enough, surely.

The topic of this thread is the current comparative cost of stationary power via various technologies, not the re-opening of old wounds or off thread discussion of peak oil or peak coal.

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“current comparative cost of stationary power via various technologies”

I guess one has to emphasise current comparative cost, and shut off all the ABC specials coming next year on peak oil and peak coal. Fine, I can play that game. But if you think peak coal is ‘off thread’ for that much longer, you’re mistaken. It’s coming. Fast.

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JB looking at various links suggests that central Qld CSG will be split 3 ways
1) a pipe to the Gladstone liquefaction plant
2) a connector to NSW
3) a link to Adelaide via Moomba
The Wiki entry on Moomba say its gas will peak in 2016. Different configurations seem possible
– NSW ex-coal CCS CO2 going to Cooper Basin
– Qld CSG going to NSW without CCS
with the latter being the simpler approach. However the Bayswater B proposal says they regard gas (presumably without CCS) as too expensive.

Australian gas has been set a Herculean task
– replace 50 Mt a year of oil
– replace 120 Mt of domestic black and brown coal
– earn the same export income as 260 Mt of coal.

80% CO2 reductions by 2050 were bandied about by Bob Brown et al a year ago. While some say combined cycle gas can save 55% CO2 compared to pulverised black coal I recall a comment on another blog that said the saving in the US was more like 35%.

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EN I pointed out before that Vic’s Latrobe Valley is supposed to be good for another 800 years but SA’s Leigh Ck only 30 years. It’s hard to see big remote deposits like SA’s Arckaringa Basin ever going commercial. OTOH you hear of plans to build a huge ammonia plant based on coal at Collie WA.

I was surprised to hear that the ill fated coal mine at Greymouth NZ was their biggest. Perhaps Kiwis should grow our fruit & veg as we mine the coal and our river systems dry up most years. Political peak coal for Australia could be tomorrow if they announced a hard CO2 cap (including exports) and didn’t weaken it with giveaways.

The general vibe seems to be that we will greatly expand coal exports to China and India but new power stations in Australia will be gas. No coal miners lose their jobs. I expect carbon tax to be negligible and when local power prices keep going up we’ll comfort ourselves with all the export dollars. I think Australian coal won’t decline until China and India go bad, nothing to do with geology or the next El Nino. Peak spot price for black thermal coal maybe $200/t by 2015, declining thereafter due to world recession.

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OK, but does that include exponential growth in coal demand as CTL kicks in to alleviate peak oil? (Assuming we go that way for airlines and heavy vehicles, even if we adopt Electric Cars, Trolley Buses and New Urbanism to replace conventional cars?)

“Research in 2009 by the University of Newcastle in Australia concluded that Australian coal production could peak sometime after 2050.[3] While the Australian Coal Association (ACA) optimistically estimates that Australia’s identified black coal resources could last more than 200 years based on rate of production in 2007, this does not account for brown coal stocks.[14]”
http://en.wikipedia.org/wiki/Peak_coal#Australia

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Thanks, John N.

We are in substantial agreement, however the actual development approval was for either/or. Either dry cooled CCS-ready coal or CCGT, with air cooling for the condensers. Either way, there is a capital cost attached to air cooling, along with additional auxilary power costs and plenty of noise from the fans.

Both Queensland and NSW CSG proposals are feeling a strong headwind of public concern. This isn’t going to go away any time soon.

I stand by my observation that the Scottish CCS trial is by no means a lay-down misere. It might demonstrate what I have said for years – that CCS uses so much capital and energy that the underlying process (PF coal) becomes unattractive commercially.

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EN if/when petrol prices increase I think road transport will split into PHEVs and NGVs, neither using much liquid fuel. Jet fuel may have to come from GTL to get the power-to-weight ratio. Thus I see gas going to GTL and CNG putting it in direct conflict with power station demand and LNG export.

I don’t see the public accepting CTL, not only here but if the Chinese make it using a percentage of Aussie coal. If nontrivial carbon tax ever happened (unlikely) then CTL would pay double since the Fischer Tropsch plant emissions without CCS are about the same as tailpipe emissions in the vehicle. Sure there is a CTL with CCS plant (Bismark) in the US but the costs and revenues are atypical. It would take years to build CTL plants in Australia not fast enough to keep up with oil decline.

Another possibility is that oil prices don’t increase much because demand falls as supply dwindles. As we see now there may be no early price signal to make the switch to alternative propulsion. Trouble is a sudden panic could set in. I’d almost bet on that happening in the next 5 years. Holden might come out with an NGV under $25k and the switch will be on. No need for CTL.

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I see EN is still riding his ‘peak oil’ and ‘peak coal’ hobby horse to death, as are most others riding their hobby horses.

And the vitreol and personal attacks continue, perhaps even increased. Where is the moderator who decided to enforce the “Comments Policy” but apparantly only against those who do not share the same beliefs as the disciples.

All the other personal attacks and polically laced material (as long is it is properly aligned with the beliefs here) is allowed to run, perhaps even encouraged.

BTW, I opened the thread to post this link. Enjoy!

Click to access AEGTC%202010.pdf

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EN, don’t get your hopes up with every passing fad. I am convinced that this battery swap solution will never progress beyond a small niche and almost certainly will undergo various generational changes along the way.

My main reason? Batteries with sufficient storage capacity are evolving pretty fast and at this stage it is not easy to see the whole commercial picture or the environmental one – resource constraints, end of life disposal and recycling issues, etc.

I expect the next petrol price shock to drive this process much further than any blue sky development, especially one in Canberra. JN’s 5 year estimate seems pretty close to the money. That’s when fuel cells and batteries will go head to head, with only one dominant winner.

We all know that nothing useful happens in Canberra, don’t we? Canberra! I’m still chuckling.

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Canberra might be funny but what about the C40?

Bloomberg is urging the world’s top 40 cities coalition against climate change to adopt EV’s for their taxis.

As the world’s great cities put their electric taxi rollout plans into effect under Bloomberg’s leadership, they are starting to look at our Tokyo Electric Taxi Project, which we launched last April to demonstrate switchable-battery EVs in the marketplace for the first time. Recently extended for an additional three months, the project shows how EVs – and electric taxis in particular – can make a major impact in terms of reducing emissions. In Tokyo, for example, taxis make up only 2% of passenger vehicles, but are responsible for 20% of the city’s transport emissions. And here in the host city of Hong Kong, transportation creates 50% of the ground level pollution with taxis and light delivery vehicles alone accounting for more than half of that.

By electrifying our cities’ taxis, we not only take a chunk out of harmful emissions, but also deliver a fast, silent, efficient – almost futuristic – way to travel. Having clocked over 25,000 miles during the demonstration so far, 97% of passengers reported a very positive experience, and 73% said that when they ride a taxi, they want it to be electric. As Bloomberg points out, starting with the taxi segment maximizes the number of people who can experience the future of transportation and get them primed to adopt EVs themselves.

Now, C40 is watching switchable-battery electric taxis come to the San Francisco Bay Area to cement the region as the EV capital of the U.S. Seeing the success of the project in Tokyo – both in terms of emissions reduction and quality of life – the U.S. Department of Transportation (via the Metropolitan Transportation Commission “MTC”) awarded us a major grant to help us launch the U.S. taxi project. After analyzing a variety of proposals, the MTC decided on the Better Place approach based on its ability to move the needle the most on emissions reduction, mentioning that the application scored the highest marks of all filings.

The C40 meeting is now winding down in this Asian business hub, the center of a region from which many next-generation transportation solutions will emerge. As the mayors from the world’s greatest cities prepare to depart, I am eager to see how their experiences here translate into policy and action at home.

http://tinyurl.com/2v94h5v

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Sorry, the conversation moved along from the impact of peak coal on the price of stationary electricity generation through to broader peak coal implications. I was merely responding to points that developed.

I’ve moved this post about Better Place across to the Open Thread. Think of it. Taxis run 24/7. This is happening in San Francisco, in front of the C40. It seems like San Francisco will be adopting this big time. That’s just awesome.

But enough for this thread.

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Barry, there was a spasm of OT and personal stuff this morning post-0800. I believe that it has blown over. Feel free to delete this message after reading, because it gets us no closer to the substantive topic.

This evening, many of your readers will be heads down over the 200+ page report linked by Peter at 3:14. Great stuff!

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Thanks John. And to everyone — the general point is this: I don’t want to restrict commenting, mute people or generally do any censorship whatsover. I tried, for as long as possible, to say nothing regarding the whole political/accusational stuff. But there comes a limit. If everyone exercises a reasonable amount of judgement, I’ll not feel the need to intervene. It’s only the extreme circumstances that force my hand. Please don’t do that, and we’re all happy, and can tread the comments sections in BNC in the spirit they’re intended — for wide ranging discussions that cover a whole raft of views, and in which people are encouraged to be frank, open and honest. Just not personal.

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Comments on the Executive Summary to the EPRI report “Australian Electricity Generation Technology Costs – Reference Case 2010”

Click to access AEGTC%202010.pdf

1. The report is a Consultant’s report, and is clearly written to support the policies of the government that commissioned it.

2. Page v

“Due to water limitations within Australia, all cases evaluated were based on the use of dry cooling (air cooled condensing).”

Nuclear should also be compared on the basis of sea-water cooling (i.e. lower LCOE by about 10%).

3. page vii

“Capital cost and operating and maintenance cost estimates were developed based on US, Gulf Coast rates for equipment, materials, labour and labour productivity.”

So, apparently no attempt has been made to consider what the LCOE of nuclear would be if we removed the impediments to nuclear that exist in the USA and would be even higher in Australia.

4. page viii

“Australia is encouraging a broad portfolio of technologies and is already committed to initiatives to accelerate the development of carbon capture and storage (CCS), renewable energy technologies (including solar and geothermal technologies) and energy efficiency to reduce the carbon intensity of Australia’s electricity system.”

Not true while nuclear, the least cost low emission technology, is prohibited. This statement demonstrates the report is written to suit and support the client’s policies. If the report was not biased it would have stated clearly, right here in the second paragraph of the Executive Summary, that nuclear is banned by Government policy.

5.. page viii

“The report provides a technical and economic assessment of globally available technologies with greatest relevance to Australia.”

“Globally available” is a distortion. The report compares nuclear, a mature, commercially available baseload technology with technologies that are not available commercially, not available at the scale required and not capable of generating baseload (or dispatchable) power. Examples are: solar thermal, solar PV, wind, tidal, wave, biomass, geothermal (in non volcanic environments), IGCC, and Carbon Capture and Storage.

6. page viii

“Understanding the technical and commercial parameters of available stationary energy technologies in the Australian context will help define Australia’s options for responding responsibly and cost effectively to pressures on energy systems. The cost and performance of the available technologies is also an important input to work to determine the cost of economy-transforming structural change necessitated by a response to the challenges of climate change, energy security and economic prosperity.”

This paragraph has been written or edited by a government spin doctor/bureaucrat.

7. page ix

“Costs for new technologies are expected to decline more rapidly than mature technologies as there is greater opportunity for ‘learning by doing’, ‘technology development’ and ‘economies of scale’ to lead to more efficient, lower cost plants.”

The statement is true in principle. However, nuclear has been prevented from going through its development cycle because of the restrictions that have been placed on it. The cost reductions that have been continually predicted over the past 20 years for solar thermal have not eventuated.

8. page ix

“The levelised cost of electricity analysis presented in the report can provide an indicative comparison between technologies. However, site, market and system dependant factors such as transmission and firming costs will have a very significant impact on the ultimate mix of technology required to provide an efficient and reliable system. “

True. Important point to remember. This means we cannot compare the LCOE of intermittent renewables with dispatchable power sources such as fossil and nuclear plants.

9. page x

“This report provides … an analysis of the levelised costs of each technology using a common methodology and set of assumptions.”

Not true. Intermittent, non dispatchable, technologies with low capacity factors are compared with fully dispatchable, baseload technologies with high capacity factors.

10. page x

“Also of importance in interpreting the results is the implication of the relative position of each technology on the capital cost learning or ‘Grubb’ curve. As a technology moves along the continuum of development, the accuracy of performance and cost estimates tends to improve.”

True. However, nuclear’s progress along the cost learning curve has been retarded by 40 years of political opposition (in the developed nations). Once the blocks are removed, the impediments are removed, and we get a level playing field for requirements (such as safety requirements) across all technologies, nuclear can also begin to follow the cost reduction curve it would have followed if it had not been prevented from doing so by 40 years of nonsensical opposition to it.

11 page xi

“KEY ASSUMPTIONS (selected)

Coal supply is assumed to be based on characteristics of Hunter Valley black coal and Latrobe Valley brown coal. The coal plant sites are assumed to be mine mouth with conveyors delivering coal from the mine to the site with storage sized for 5 days generation.

No SO2 or NOx reduction systems are included due to the very low sulphur content of Australian coal, unless SO2 reduction is required by the CCS technology.

This assumption is favourable to coal and CCS

For all technologies, dry cooling systems are necessary.

Ths assumptions is unfavourable to nuclear. Nuclear should be lacated on the coast and use sea-water cooling.

Cost boundaries include all equipment required to generate electricity (boilers, turbine generators, solar collectors, etc.) and all support facilities needed to operate the plant (emissions control equipment, wastewater-treatment facilities, offices, etc.).

The cost boundary also includes the connection equipment, but switchyard and associated transmission line costs are not included due to system-specific conditions.

This assumptions is favourable to renewables. Renewables are located far from demand centres, have higher switchyard and transmission costs than fossil fuel and nuclear plants Renewables also require higher power/frequency control grid management costs and these are not included in these comparisons.

CO2 compression equipment and energy penalties are included for plants with carbon capture. Capital costs for CO2 pipeline and storage area for sequestration are not included in cost and performance data. A nominal AUD20/tonne for transport and sequestration has been included for levelised cost of electricity analysis.

These costs are a major uncertainty. This assumption is highly favourable to CCS

For solar thermal technologies, a range of direct normal insolation (DNI) of 5, 6 and 7 kWh/m2/day was used. For reference, some Australia specific DNIs are: Canberra = 4.9 kWh/m2/day; Mildura 5.8 kWh/m2/day; and Alice Springs 7.2 kWh/m2/day.

These assumptions look optimistic and highly favourable to solar thermal. A) I understand the US plants are finding that the actual output of the plants is considerably less than calculated from DNI, especially in winter. There is still little information on actual performance output, at short time intervals (like 5 to 30 mins) from solar thermal plants. So any predictions of output based on DNI should be treated with caution.
B) The prediction is being based on average annual DNI rather than worst case actual output. C)quoting figures for Alice Springs and Mildura indicates that transmission costs would be significant; however, transmission costs are excluded from the analysis. Tis is highly favourable to solar thermal.

Total Plant Cost (TPC) and O&M cost estimates carry an accuracy of +/-30%

That is a ridiculously low figure. That level of accuracy would not be assumed until detail design for a specific plant at a specific site and with all the local political issues resolved. Experience to date with solar thermal, would suggest an accuracy of +/- 500% would be more realistic for projections of future LCOE of solar thermal plants.

The following items are excluded from the capital costs:

CO2 injection wells, pipelines to deliver the CO2 from the generation plant fence to the storage facility and all administration supervision and control costs for the facility. (However, the levelised cost of electricity analysis includes a nominal AUD20/tonne for transport and sequestration to cover these costs)

This assumption favours CCS

Large differences between original cost estimates and actual installed costs have been common. Some of these differences have resulted from the type of estimate given, such as a “goal” type of estimate without explicit consideration of the likelihood of achievement.

True – particularly for solar thermal. It suggests that solar thermal projections are likely to be highly optimistic (as they have been historically). The same should be expected for geothermal, CCS and IGCC

11. Page xv

The solar plant, since it operates with free fuel, was considered to operate whenever sunlight could provide energy (plus use of the stored thermal energy).

Highly optimistic. This means no unscheduled. This is totally unrealistic for an immature technology. There will also be long periods (months to years) where plants are operating well below capacity due to the time needed to remove cacked on dust from dust storms.

12. page xv

RESULTS
The low end estimates of the charts assume a best case scenario: capital cost estimates and fuel prices are at the low end of the sensitivity ranges investigated in this study, project and site specific costs are assumed to add only 5% to the TPC (baseline is 7.5%), CO2 transportation and storage cost is assumed to be only AUD10/tonne (baseline is AUD20/tonne), and, for renewable technologies, the best available resource was assumed (DNI = 7 kWh/m2/day for parabolic trough and central receiver; wind class 6 (average wind speed of 8.4 m/s) for wind turbines).

The low end estimates for nuclear should be based on costs with all impediments to nu clear removed, investor risk premium moved from nuclear to coal and renewables, and the cost for 2030 based on rolling out small NPPs from production facilities (like producing tanks for war). If we are going to base the low end estimates for solar thermal, CCS etc on all the most optimistic assumptions possible, then why not fdo the same for nuclear? Surely, in a report like this, it should at least show what would be possible if we were serious about cutting emissions (world emissions) at least cost.

13. page xv

The high end estimates of the charts assume the higher side of the uncertainties: capital cost estimates and fuel prices are at the high end of the sensitivity ranges investigated in this study,
project and site specific costs are assumed to add 10% to the TPC, CO2 transportation and storage cost is assumed to be AUD30/tonne, and, for renewable technologies, the worst available resource was assumed (DNI = 5 kWh/m2/day for parabolic trough and central receiver; wind class 3 (average wind speed of 6.7 m/s) for wind turbines).

Nonsense. The high end estimates for solar thermal are nowhere near the higher end cost that are estimated based on costs of available technology and on projections based on past trends. The estimates for solar thermal (and for all the immature technologies) are highly optimistic).

14. Page xvi

Multi-dimensional sensitivity analysis was also conducted on 2015 technology levelised costs of electricity. These sensitivity analyses are presented as ‘Tornado’ graphs showing the effect of different assumptions on the levelised cost of electricity results. Capital costs were varied by +/-30% of the baseline cost results. ….

Garbage in, Garbage out. Or, more appropriately, policy driven inputs gives policy desired outputs (or no more jobs for you, thanks!! Don’t call us, we’ll call you.). Surely, the capital costs for solar thermal, should be varied by +500% at the high end, and nuclear varied by -50% below the UAE cost at the low end.

15. Page xvi

For all technologies except for the wind turbine, the plant life was varied between 20 years and 40 years with a baseline lifetime of 30 years.

Why not 60 years for nuclear? (60 years is the standard design life for modern nuclear power plants)

16. Page xvi

Some technologies are only capable of operating for short periods (due to fuel limits) or face commercial incentives to operate for short periods of time (due to high relative fuel costs). Shorter operating periods for these technologies means that their capital costs must be recovered over shorter operating periods. As a consequence these technologies have a LCOE which is very sensitive to capital, fuel and resource costs.

I wonder which they are. I wonder if nuclear is included as one of the technologies that has a short fuel life.

17. Page xvii

The Tornado charts are complete nonsense because the inputs are based on +/- a percentage where the percentage selected in based on the authors’ bias (to suit the client’s bias).

They provide tornado charts for Solar thermal, photovoltaic, wind, Black coal PC with CCS, Brown coal PC with CCS, OCGT with CCS and CCGT with CCS. But no tornado chart for nuclear!!!! I wonder why. Is anyone still in doubt about the bias in this report?

18. Page xxii

Process and review
To ensure the report’s output is consistent with Australian conditions, a comprehensive stakeholder consultation process was built into the program.

No wonder the report is biased towards renewables and CCS and against nuclear. Take a look at the “Advisory Group” and “Reference Group” participants (page xxii – xxiii).

This report is clearly biased towards renewables, CCS and against nuclear. It is clearly driven by government policy and carefully appointed special interests.

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Eclipsenow: repetitively off topic.

What about this Sahara nonsense? Are you really claiming that 50% of the world’s energy can come from one desert, thousands of km away from the loads? No transmission system? Or, perhaps, HVDC at scales never before attempted? Do you consider this to be a practical pointer towards a realistic future, or a pipe dream?

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Austrailia get ready. Here comes you cheap nuclear power.

China evolves basic reactor design for export markets
The main type of power reactor being built in large numbers in China is the CPR-1000, based on the French 900 MWe design imported for Daya Bay in the 1980s. Known as the ‘improved Chinese PWR’, it features digital instrumentation and control and a design life of 60 years. Standard construction time is 52 months, and the unit cost is under CNY 10,000 (US$ 1500) per kilowatt. China Guangdong Nuclear Power Corporation (CGNPC) led the development of the CPR-1000 and has established a nearly complete domestic supply chain. However, at present Areva retains intellectual property rights. CGNPC is continuing to develop the design and its evolution to Advanced CPR-1000 as a third-generation reactor design with full Chinese intellectual property rights. At the China International Nuclear Symposium this week, CGNPC said it expects to make the ACPR-1000 available for local build and overseas markets in 2013.

There’s over 200 posts here and I still do not know whether any of you think Australia would buy cheaper-than-coal from China.

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@ John B,
I was merely posting for some backup over on their blog ‘Next Big future’ — to point out the reality of electricity costs. They’re a frustrating mob because they seem happy to discuss nuclear power, but then backtrack and seem to promote this solar PV idea as positive! Errrgh!

I mean, they’re happy to confirm what Martin Burkle said above.

http://nextbigfuture.com/2010/11/china-could-start-exporting-nuclear.html

Just wondering if I could have some backup on this rather popular blog to the effect that they should stop rabbitting on about renewables as it affects their credibility.

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With military hardware there seems to be an unwritten rule that it must come from Europe or the US. As in if we bought jet fighters from the Russians they might withhold spare parts. However the ACPR-1000 reactor is semi French semi Chinese so that’s a grey area.

I think $1.50/w is optimistic in a country like Australia that has underemployed lawyers, meddling bureaucrats and attention seeking politicians. Perhaps Australia could cut a deal with China whereby they build the plants and we give them uranium.

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