Guest Post by Chris Uhlik. Dr Uhlik did a BS, MS, and PhD in Electrical Engineering at Stanford 1979–1990. He worked at Toyota in Japan, built robot controllers, cellular telephone systems, internet routers, and now does engineering management at Google. Among his 8 years of projects as an engineering director at Google, he counts engineering recruiting, Toolbar, Software QA, Software Security, GMail, Video, BookSearch, StreetView, AerialImaging, and research activities in Artificial Intelligence and Education. He has directly managed about 500 engineers at Google and indirectly over 2000 employees. His interests include nuclear power, photosynthesis, technology evolution, artificial intelligence, ecosystems, and education.
(Ed Note: Chris is a member of the IFRG [a private integral fast reactor discussion forum] as well as being a strong support of the LFTR reactor design)
An average American directly and indirectly uses about 10.8 kW of primary energy of which about 1.3 kW is electricity. Here I consider the cost of providing this energy as coming from 3 main sources:
1. The fuel costs (coal, oil, uranium, sunlight, wind, etc)
2. The capital costs of the infrastructure required to capture and distribute the energy in usable form (power plants, tanker trucks, etc)
3. The operating costs of the infrastructure (powerline maintenance, plant security, watching the dials, etc)
The average wholesale electricity price across the US is about 5c/kWh, so the all-in costs of providing the electrical component is currently ~$570/person/year or 1.2% of GDP. The electric power industry including all distribution, billing, residential services, etc is $1,120/person/year or 2.4% of GDP. So you can see there is about a factor of two between marginal costs of electricity production (wholesale prices) and retail prices.
The rest of this energy comes from Natural gas, Coal, Petroleum, and Biomass, to the tune of 6.36 kW/person.
I’m going to make the following assumptions to calculate how much it would cost to convert to an all-nuclear powered, fossil-carbon-free future.
Assumptions (*see numbers summary at foot of this post)
- I’ll neglect all renewable sources such as hydro. They amount to only about 20% of electricity and don’t do anything about the larger fuel energy demand, so they won’t affect the answer very much.
- Some energy sources are fuel-price intensive (e.g. natural gas) and some have zero fuel prices, but are capital intensive (e.g. wind). I’ll assume that nuclear is almost all capital intensive with only 35% of the cost coming from O&M and all the rest going to purchase costs plus debt service.
- I’ll use 8% for cost of capital. Many utilities operate with a higher guaranteed return than this (e.g. 10.4%) but the economy historically provides more like 2–5% overall, so 8% seems quite generous.
- I’ll assume 50 year life for nuclear power plants. They seem to be lasting longer than this, but building for more than 50 years seems wasteful as technologies advance and you probably want to replace them with better stuff sooner than that.
- Back in the 1970’s we built nuclear power plants for about $0.80–0.90/watt (2009 dollars). In the 1980’s and 90’s we saw that price inflate to $2.09–3.39/watt (Palo Verde and Catawba) with a worst-case disaster of $15/watt (Shoreham). Current project costs are estimated at about $2.95/watt (Areva EPR). Current projects in China are ~$1.70/watt. If regulatory risks were controlled and incentives were aligned, we could probably build plants today for lower than the 1970’s prices, but I’ll pessimistically assume the current estimates of $3/watt.
- Electricity vs Combustion: In an all nuclear, electricity-intensive, fossil-carbon-free future, many things would be done differently. For example, you won’t heat your house by burning natural gas. Instead you’ll use electricity-powered heat pumps. This will transfer energy away from primary source fuels like natural gas to electricity. Plug-in-hybrid cars will do the same for petroleum. In some cases, the total energy will go down (cars and heat pumps). In some cases, the total energy will go up (synthesizing fuel to run jet transport aircraft). I’ll assume the total energy demand in this future scenario is our current electricity demand plus an unchanged amount of energy in the fuel sector, but provided instead by electricity. I.e. 1.3 kW (today’s electricity) + 6.4 kW (today’s fuels, but provided by electricity with a mix of efficiencies that remains equivalent). This is almost certainly pessimistic, as electricity is often a much more efficient way to deliver energy to a process than combustion. (Ed Note: I discuss similar issues in these two SNE2060 posts).
- Zero GDP growth rate
Result: In this future, we need 7.7 kW per person, provided by $3/watt capitalized sources with 8% cost of capital and 35% surcharge for O&M. The cost of this infrastructure: $2,550/person/year or 5% of GDP.
Alternate assumptions:
- Chinese nuclear plant costs of $1.70/watt
- Higher efficiency in an electric future were most processes take about 1/2 as much energy from electricity as they used to take from combustion. 1.3 kW from old electricity demands (unchanged) + 3.2 kW from new electricity demands (half of 6.4 kW). And fuels (where still needed) are produced using nuclear heat-driven synthesis approaches.
Alternative result: $844/person/year or 2% of GDP.
Conclusion: Saving the environment using nuclear power could be cheap and worth doing.
Numbers*:
Year: 2008
GDP: $14.59T
Population 306M
Electricity: 12.68 quads
Non-electricity fuels: 58.25 quads
Natural gas: 16.33 quads
Coal: 1.79 quads
Biomass: 3.46 quads
Petroleum: 36.67 quads
Average retail electricity price: 9.14 c/kwh
Electric power industry: $343B/yr
Electricity transmission industry: $7.8B/yr
Per person statistics:
GDP: $47,680
Electricity: 1.29 kW (average power)
Fuels: 6.36 kW
Brave New Climate 
335 replies on “The cost of ending global warming – a calculation”
Please explain thr KW equation. Is figure a daily consumption or yearly? More detail please.
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Stewart, it’s an expression of average power, so if you want yearly consumption in kWh then multiply that number by (365 x 24) 8,760.
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An interesting post, but I would appreciate some amplification and clarification.
We are told that the average American citizen uses 10.8kW of primary energy of which 1.3kW is provided as electricity. Later in the same section, we are informed that the rest of this energy comes from natural gas, coal, petroleum and biomass and amounts to 6.36kW/person.
10.8 less (6.36 plus1.3) equals 3.14. Is one to assume, therefore, that the missing 3.14 kW is either net energy content of imported stuff or, alternatively, is food energy (on the basis that biomass in this post is not counted as food energy)?
Could we have a bit more detail on what is implied by “The cost of this infrastructure: $2550/person/year” needed to provide 7.7 kW power/person? This works out at 3.78 cents/kWh, but how can I assess its relevance – surely it can’t be an indication that tne author assesses that conversion to all nuclear power will result in a 25% fall in wholesale electricity costs (3.78 versus current 5 cents/kWh)? So what lesson am I being too stupid to draw?
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Nice estimate and while I do now know the detailed figures estimates appear reasonable to me. However, I was wondering that shouldn’t it be, in a way, more reasonable to subtract the costs of “business as usual” scenario since the number of people willing to return to a pre-industrial society is limited? Maintaining current energy production does not come for free.
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Chris, I think you are saying we can afford to make the transition off fossil fuels. On a more personal level I have determined that I need to purchase 2 kW of solar tracking PV and 2 kW of nuclear to provide 20,000 kWh annually for my home and EV and the cost to me is about $20,000 which I can afford. The solar and nuclear combo has a daily output pattern roughly matching the total system load profile here. I know that I have not included the energy needed for all the services I use. Those would have costs also, possibly doubling my $20,000 estimate, but still affordable. Now all we need to do is get everyone on board to doing the transition. I don’t think this will happen until customers are allowed to directly invest in nuclear.power.
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Following
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yeah: I have the same question as douglas. In quads, the routine number I hear for the u.s. is 100 quads.
the writer here has ~70 quads.
about the same amount missing. is this waste of some sort?
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Chris is talking about an all-electrified US, Greg. The 100 quads is primary, not final energy.
Douglas, you forgot the primary energy that went into producing that electricity – on a 33% efficiency, you (roughly) have your ‘missing’ energy. The 6.4 kW is for ICEs, gas heating etc. You should also be calculating the kWh price on the basis of delivered electricity, not primary energy.
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hey gene:
if you’re getting 15,768 of your kwhs from nuclear, why spend the rest on solar? (8760 * 2 *.9 cf)
would you get a 22 % cf on your solar? that’s pretty good.
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I would invest in solar also to earn brownie points with my sierra club friends and have bragging rights. Also we need some power source that roughly tracks the daily peak demand and solar would probably fill the nitch nicley for that requirement. The 22% CF on solar would be single axis tracking arrays here in Texas. I have been told it can be as high as 27% in west Texas. I would prefer to have the solar closer to my home though and maybe take a hit on the CF. You know its my out of pocket money, i.e. my toy, so why not spend the money as I see fit. I think of the solar and nulcear investments as toys for big boys ha ha.
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@ Gene Preston,
It seems to me like Sierra Club would like nothing else than a massive implementation of natural gas fired cogen with some wind sprinkled on top.
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I’m not in favor of the wind plus natural gas plan. There is nothing sustainable about that plan. We will have broken down wind generators about the time the gas runs out. It looks bad, requires lots of transmission lines, wastes natural gas, and still creates a lot of CO2.
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My cost estimates are more pessimistic than Chris Uhlik’s but it remains the case that
(1) on-shore wind + pumped hydro backup
(2) soon, solar PV + same backup
(3) NPPs
all have very similar prices which are in excess of those for natgas fired thermal without any form of FCOAD fee.
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Chris Uhlik,
Good article. Clear. Well laid out (for me).
Good simplifying assumptions.
But I suspect you may be underestimating energy consumption growth.
I’ll have to take a careful look later and go through it more carefully
First reaction is well done.
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FF energy could have a while to go yet although the uranium discoveries may help:
http://www2.chinadaily.com.cn/china/2011-01/17/content_11861839.htm
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Chris,
I’ve read your article a second time and now have a few more comments.
I believe $3/W for capital costs is too low in the western democracies with the currenet regulatory imposts and investor risk premiums. We need to remove these imposts.
Cutting 5% or even 2% from GDP is an enormous penalty. It would be unacceptable to voters, I suspect. Especially as, in my opinion, we can have what you are proposing without cutting GDP at all. In fact, we can improve the economy, as well as social and envoironmental outcomes. And we must aim to do so if we want to get easy acceptance and, therefore, fast adoption
If we remove the impediments to low cost nuclear that exist in the western democracies nuclear can be economically viable; so we can build new capacity with nuclear instead of coal and gas. Costs for nuclear will come down over time and we will replace existing coal and gas generators as they reach the end of their life.
Our focus in the western democracies should be on highlighting the many impediments to low-cost nuclear that exist throughout our societies.
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And 250 years of gas:
http://www.upi.com/Science_News/Resource-Wars/2011/01/19/IEA-lauds-unconventional-gas-reserves/UPI-83531295444312/
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Chris,
One other comment. I don’t think any other country in the world, other than the USA is still working in archaic units like quads (and pounds, poundals, tons, gallons, rods, poles, purchs, feet, inches, ounces, fulongs, miles or any other of those units the kings of England came up with). Could I suggest you convert to international (SI) units.
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With heat pumps and electric cars there are the additional issues of private consumer investment and adequacy for needs. The consumer may need to spend another $3k and $30k of his/her own money for electric heat pumping and transport. Will that be enough for most people? I’ve yet to hear of any homeowner satisfied with air source heat pumps on frosty nights so out comes the gas or wood fire or resistive heater. The current trickle of buyers for cars like the subsidised Chevrolet Volt tend not to be outer suburb battlers with long commutes; for example junior night staff at a hospital.
Thus electricity substitution for fuel may have practical limits. Pensioners will want gas heaters and battlers will want cars that run on hydrocarbons. There may be ways around this such as rationing thermal comfort to a single room or restricting hydrocarbon cars to those who really need them. Such changes will need to overcome huge social inertia and a sense of entitlement.
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Barry,
I think the title of the article is misleading. The article is not about “the cost of ending global warning”. The article is about the cost of replacing fossil fuel with nuclear energy, or, at most, the cost of reducing emissions. It is a leap of faith too far to imply that doing so will stop global warming.
I feel that misleading titles to articles like this turn off those middle-of-the-road people you want to get to who are open minded, interested, wanting facts but not spin.
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we have an air source heat pump that switches to gas when it gets cold: just above freezing.
to avoid the gas, we’d have to get a ground source heat pump, which costs like 20 grand for our pretty small house–by u.s. standards.
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A very insightful article. I must say Chris Uhlik sounds like a very interesting (and very clever) person.
A question: Over what time-frame is the estimate of 2-5% of GDP? E.g. is it assumed that it will cost up to 5% of GDP for a single year, or over several or many years, or indefinitely?
Also, if the GDP growth rate is assumed not to be zero, how does this affect costing?
2-5% sounds a reasonable cost to pay to assist in the prevention of runaway global warming, and providing future energy security. Australian military expenditure is ~2% GDP, every year. In the USA it’s >4%. Investment in nuclear and other climate change mitigation strategies can really be viewed as defense spending too, and I think most people (in Australia at least) would agree.
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Tom Keen,
But it’s a massive waste if it has no effect on the climate (which is probably the case). So first, you’d need to establish what would be the costs and benefits and the return on investment. And you need that done by groups that are competent, credible, impartial and not already inside the CAGW Alarmists’ tent.
Tom, you have a different interpretation than I do about the consequences of a 2% to 5% drop in GDP. I see the drop in GDP (however much it is) as the consequence that would result from bad policy (such as if government overrides markets and directs what technology industry must invest in).
The 2% and 5% GDP figures likely overstate the drop in GDP. However, just to make the point let’s use these figures as representing the drop in GDP. A 2% drop in GDP might mean a permanent GFC. A 5% drop in GDP might mean a permanent Great Depression.
Perhaps Chris could enhance his article by providing the equivalent of his drop in GDP in terms of % unemployed, e.g. 2% drop in GDP = 20% permanent unemployment , 5% drop in GDP = 50% permanent unemployment.
I don’t know the figures, but it might help Tom and others to understand what a sustained drop in GDP means if it was expressed in terms of the unemployment rate that it would cause.
The really silly thing about the economically irrational arguments put forward by many is that they are being presented without having properly considered the alternatives. In fact there is clearly strong resistance to considering the economically rational alternatives. I mentioned them in an earlier post on this thread (at 12:21PM).
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Where does anyone say that there will be a 2-5% drop in GDP? This was a cost range for the technology changeover. The new infrastructure would be part> of GDP.
Of course if GDP increases, the cost, expressed as a function of GDP declines. It might be of course that their is a reconfiguration of the elements of GDP (perhaps if people spend more on energy they spend less on more discretionary things like imported consumables) but this is a quite separate thing. Also, as others have pointed out, amongst the things they are no longer spending money on would be support of coal and gas fired power stations, petroleum, NG etc …
It might be of course that you can’t straight swap some of these — not all usages can be put onto the grid (heating, cooking for example and there are sunk costs in gas connections) or if they can, not at low cost, but that then is off the cost of retooling.
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Chris, thank you using the SI unit of power, kilowatt! It is much easier to understand, and do mental arithmetic with, than clunky units of energy per clunky unit of time.
I believe that the Australian equivalents are 7.6 kW, of carbon fuels, of which about about 4 kW are used to produce 1.3 kW of electricity.
I am afraid that your title should read “The cost of replacing carbon fuels”, because the CO2 already in the atmosphere is going to continue inflicting global warming for centuries to come.
BTW, 1 quad/annum = 34 GW
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Fran,
Again you haven’t a clue what you are talking about.
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‘And you need that done by groups that are competent, credible, impartial and not already inside the CAGW Alarmists’ tent.’
Since this blog is called ‘Brave New Climate’ I guess that rules out just about everyone on here anyway. Any estimates of the hit to GDP of having large parts of Australia, Pakistan and Brazil under water?
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@Fran
You mention that we already have considerable sunk costs in gas reticulation. When nuclear plants can efficiently produce gigawatt quantities of hydrogen from nuclear plants, the advantages of domestic gas can be realised without carbon emissions.
It is something of a consolation that the current political momentum in Australia towards a massive investment in (methane) gas reticulation for electric generation will not be entirely wasted, if the consequent carbon emissions really do get methane replaced by 2050 or so.
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Peter
You lack locus standi to make the claim Peter, especially since your argument misread the original article.
I doubt it. It would make more sense to run electricity over lines than H2 through pipes. H2 is slippery stuff and embrittles metals.
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oops … last blockquote is from Roger Clifton
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David Benson, wind + pumped hydro backup would be fine if the pumped hydro component were available. Here in Texas all the coastal plains are flat.
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I think it would a mistake to abandon the gas grid. It could be increasingly supplied with ‘unnatural gas’ such as fermentation biogas or synthetic (Sabatier process) methane made using nuclear hydrogen and recycled biocarbon. Methane does not embrittle pipes, has high energy density around 40 MJ/kg and some 8 million vehicles worldwide run on it. Most importantly it’s better for Chinese wok cooking than electricity.
However I’m unable to find well researched cost data on alternative methane. I believe the biogas used by the Swedish train and bus system has a continuous thermal equivalent power of about 0.3 GW. Perhaps the high cost of synfuels will force electrification to all but unavoidable users of hydrocarbons. That would include outback trucking where no rail lines go and of course cooking by wok.
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Gene Preston, on 22 January 2011 at 9:35 PM — Possibly some limestone caverns could be scarified to form the lower reservoirs for pumped hydro, but I doubt Texas has any. Another alternative is to form large, deep holes in the ground for a form of pumped hydro; I posted a link to that, called gravity power, on the current open thread, not too far above the bottom.
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John Newlands, on 23 January 2011 at 6:54 AM — Syngas can be reformulated into methane. Here is a potential future method to make the syngas.
Syngas: Solar Fuel, With High Efficiency
http://www.sciencedaily.com/releases/2011/01/110119102746.htm
http://pubs.acs.org/cen/news/89/i01/8901notw3.html
High-Flux Solar-Driven Thermochemical Dissociation of CO2 and H2O Using Nonstoichiometric Ceria
http://www.sciencemag.org/content/330/6012/1797.abstract
Inexpensive electricity could assist in the difficult problem of the air capture of CO2.
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I just posted the following info on Grist. Would someone see if these numbers are reasonable for the US? Thanks.
The US government cannot force rooftop solar because it would drive the national debt too high. Consider that 14 trillion in debt translates into $45000 per person. Per capita energy in the US is about 340 MBtu/yr or 100,000 kWh per person per year, all industries. One solar panel of 1000 watts or 1 kW costs about $6000 fully installed on a rooftop and produces about 1230 kWh annually. Therefore it would take 100,000/1230 = ~80 kW of rooftop solar per person to power the nation at a cost of 80×6000=$480,000. If the US were to borrow money to pay for these solar panels it would drive the US national debt from 14 trillion to over ten times greater than that, or about 150 trillion dollars. Now where is the US government going to get 150 trillion dollars?
Did I get my figures correct on this?
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David we are using what is called the Edwards Aquiifer, which are limestone ca verns, to store as much drinking water as possible. Thats where San Antonio gets their drinking water and its runnint short. I’m afraid we don’t have enought caverns to produce any significant amount of energy. But you have an interesting idea about digging a big hole in the ground to store water and use it as storaage for pumped hydro. I’m afraid it would be far too costly to dig the hole. I thing there is one area here on Barton Creek where I live that could be used to make a small lake, but it would take two lakes, an upper and a lower one. The environmental impact and opposition would be horrific. I once commissioned a study to do pumped hydro on Lake Travis and it looked good, however the environmental impact would be too great today to do this. Maybe if it had been set up a long time ago when the population was slim and environmental concerns were mostly absent, it might have been possible, but not today.
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Gene Preston,
I’d beg to differ with you on this statement. Pumped hydro can be excellent (where the hydrology, topography and geology is suitable) when matched with reliable, low cost, baseload generators such as coal and nuclear. It is not even close to being viable at large scale to back up for intermittent, unreliable renewables like wind and solar.
There are several comments on the Pumped Hydro thread about this subject and this ‘back of an envelope’ calculation makes the economics pretty clear (I think): https://bravenewclimate.com/2010/04/05/pumped-hydro-system-cost/#comment-86108
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I’m sorry there are just no pumped hydro sites around here.
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DB the solar synfuel process sounds hellishly expensive allowing for the low conversion efficiency (<1%) and equipment cost. If we could get very cheap hydrogen we could react with it CO2 captured from a dense source, not air.
GP your PV calculation could allow for each home having $20k of battery backup. Regular commenter Podargus could confirm. Some pronuclear survivalist neighbours are off-grid PV and can barely run a TV set at times. I wonder if a high PV grid would have trouble with frequency synchronization.
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John you said:
Some off-grid PV and can barely run a TV set at times. I wonder if a high PV grid would have trouble with frequency synchronization.
We are having some difficuilty with frequency synchronization here in Texas with the 10,000 MW of wind when the system is down in the 30,000 to 40,000 MW total load range. Texas is electrically isolated (except for small DC ties) from the other regions in the US so we can’t lean on them as the wind varies up and down in output.
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Gene Preston, on 23 January 2011 at 9:53 AM — Take a look at the gravity power link. They claim the costs will be comperable to more conventional pumped hydro.
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what are the consequences of the proposed cut in GDP?
Annual cost of current electricity generation infrastructure:
Annual cost of proposed electricity generation infrastructure to provide an equivalent product:
Difference = $1,980/person/year or 3.8% of GDP (for the same product!).
What would be the consequences to the USA economy?
What would be the consequences in terms of:
– unemployment rate?
– cuts in services such as Health, Education, infrastructure,
– living standards, quality of life, disposable income, etc?
The consequences need to be weighed up – properly, by organisations capable of doing the analysis properly and impartially.
Where there is, possibly, an economically rational alternative, as I believe there is, then it seems to me to be ludicrous to avoid investigating the alternatives.
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Gene,
Perhaps my reply to your previous comment not clear. Just to clarify
In your first comment you said:
I answered and explained that I think the statement is wrong (except in perhaps a very few special cases). Did you see the comment I pointed you to?
You then said
I wasn’t talking about Texas. I was talking about anywhere and answering your generic statement that in effect says pumped-hydro can make wind and solar viable.
I believe pumped hydro cannot be an economic way to make wind and solar power viable. This may help explain: https://bravenewclimate.com/2010/04/05/pumped-hydro-system-cost/#comment-86108
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Gene Preston asked us to check his calculation. Converted to international units, it reads:
Total US concumption is about 11.4 kW per person.
One solar panel of 1 kW capacity costs about US$6000 fully installed on a
rooftop and produces about 0.140 kW across the year. Therefore it would take
11.4*1/0.14 ~ 80 kW of rooftop solar per person to power the nation …”
In the calculation, average consumption is divided by average production. This is only meaningful if the peak production in summer (for a PV panel), is somehow stored efficiently through the period of minimum production, (winter) which I believe in most parts of the US is peak consumption period.
I suspect that 6 $/W wouldn’t cover the sort of energy storage required by solar PV to be relied on as a grid supplier.
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I may be interpreting this wrongly, but a (pessimistic) 5% of GDP to provide 7.7 kW, compared to 1.2% of GDP to provide 1.3 kW, sounds like a really good deal. An ~4 fold increase in percentage of GDP to provide an ~6 fold increase in electricity capacity.
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Another question:
Is the factor of two difference between wholesale and retail prices currently observed in the US always proportional to the wholesale price of electricity? I.e. if the wholesale price of electricity did rise to 5% of GDP, would the retail price then add up to 10% of GDP?
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*e.g. not i.e.
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Roger Clifton,
And the rest!
The cost of energy storage capacity ($/kWh, or $/J if you prefer) is also important.
You may have missed this:
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Tom,
You cannot justify a massive expenditure like this unless you can understand the consequences. So far I haven’t seen you make any attempt to quantify, let alone, understand the consequences of the massive expenditure you are supporting.
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When I said wind+pumped hydro would be fine I didn’t mean economically or reliably. I just meant that it might be possible to store enough wind energy to make it through a night, but not every night (or day). Wind+pumped hydro is neither economic nor reliable.
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Thanks Roger and I agree teh $6000 per kW for a rooftop is probably low. Also I did not consider seasonal nor time of day. The purpose of my posting to Grist was to illustrate the absurdly high cost of rooftop solar panels. I guess I was most worried that my statement about needing 150 trillion more US dollars was what concerned me, and I was wondering if my calculations were incorrect and the increased debt to the US were much less, say ‘only’ 15 trillion dollars (ha ha) instead of the 150 trillion I had estimated. Using your corrections would increase that 150 trillion cost even more.
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To David Benson concerning the gravity power link, we have already dismissed wind+storage is a viable power source both from economics and reliability. Can you give a web address to the best reference for the gravity power link? I would think that only water would have sufficient volume and low cost to use gravity for energy storage, i.e. pumped hydro.
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There is one more new idea I would like to bounce off this group. Suppose I said my personal discount rate right now is 0%. I am not earning any money in any of my investments, nothing in the stock market, my retirement annuity looks like 0% return assuming I live 20 more years, my treasury note is a really low percentage. I think 0% also represents that if I make an investment now in energy its just as important to me in 20 years as it is now so I feel justified in using the 0% rate at this time. So what does that do for my energy investments versus utility investments? It does a lot.
For example ERCOT lists a levelized price of 16 cents per kWh for solar tracking PV. Recent solar PV plants built near me are in the $4 per watt cost range, actually 3.7 to be precise. If I bought one kW of that plant for $4000 and it has a life of 25 years, and the capacity factor is 20%, then the annual energy produced is 8760x.2 = 1752 kWh and 25 years is 43800 kWh, then the energy cost to me is effectively 4000000/43800 = 9.13 cents per kWh whereas the utility financed version of the same plant would be 16 cents per kWh.
If I wanted this kind of power source, wouldn’t I want to purchase it ourright if I had the cash in hand, rather than have my utility finance it?
Lets see what this does for nuclear power. Assuming a cost of $5000 per kW and a life if 40 years the energy cost at a 0% discount rate when 1.6 c/kwh is added for O&M and the capacity factor is 95% is 500000/(8760x.9×40)+1.6= 1.6+1.6 = 3.2 cents per kWh. That seems like a good investment to me. However the utility will show that same plant cost as at least 9 cents per kWh. Again I can finance the new nuclear plant at a lower cost than the utility can.
Shouldn’t we customers be allowed to finance our own plants?
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Barry,
Thank you for explaining my mistake over having forgotten about primary energy needing to be 3 times greater than electrical energy. However, I’m still struggling to understand the message of this post.
I think that the author is saying that 7.7 kW of electrical energy is going to be as useful as the 10.8kW of energy in all its current forms. Fair enough. This means that an approximately sixfold increase in electrical energy must be planned for. If this is to be provided by nuclear power, what is the author’s assessment of the financial implications? Is he saying that nuclear power could provide all the electricity at a cost of 10% of GDP (5% wholesale x 2)? If so, given that energy currently represents approximately 10% of GDP, the effects would be financially neutral. Thus, one might suppose that if nuclear were phased to replace coal and gas plants as they reached their end of lives and replaced energy import costs from petroleum, there would be no financial penalties to the economy. As has already be pointed out, consumers would face some extra costs associated with transition to electricity in areas of air conditioning and transport, this can be phased and won’t impact GDP. But, I’m not sure that this is what the author is asking us to believe. Equally, is his $3/watt a realistic figure? Peter Lang seems to think both that $3/watt is too low and that the 5% GDP (wholesale) is an extra on top of energy’s existing share of GDP – obviously a quite different interpretation. Again, are we talking a one off extra capital expenditure equivalent in amount to 5% of one year’s GDP or an ongoing annual cost relative to current ?
The emperor’s new clothes come to mind. Could either you or the author explain what the post was supposed to be about so that it can be understood by simpletons like me?
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You really should not consider storage and solar together. Solar is mostly useful for load shaving. In that sense it will have some capacity value. I am wondering if a large number of EV batteries connected to the grid can give a short term power supply response, i.e enough time for GTs to be started, and they would have value on the network. But they are not related to solar any more than the car batteries are related to wind or any other generation. The only problem with this idea is the EV batteries are not being designed to be two way power suppliers so the concept of using car batteries as short term storage on the grid is probably not going to happen, ever, in my opinion.
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Tom/Peter/Fran: I’m confused about GDP … always have been. GDP is the market value of goods and services. Why does spending money on a bunch of power stations push it down as Peter seems to be suggesting but spending money on beer and cigarettes push it up?
Chris: Good article … as has already been pointed out, some of this cost isn’t over and above the natural cost of keeping the current infrastructure humming, but working out how much won’t be simple. Just as people replace cars every 12 years or so anyway, so moving to an electric vehicle won’t be an additional cost if done over the course of the rebuild.
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The Tres Amigas SuperStation is proposed to connect the various parts of the US grid, including Texas, purportedly so that renewable energy can flush back and forth between areas of supply and demand. Although this would decrease the storage required, the $1 billion cost of the alteration to the grid should be added to the bill for renewables.
One advantage, probably communicated sotto voce between Congressman, is that it would allow nuclear power to be generated in Mexico and consumed in the US, without fuss.
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Douglas Wise,
No. I did not say that at all. I would ask you to stop misrepresenting what I say (a habbit you have been following for over a year). If in doubt, ask.
I’ll post another comment on this later this morning.
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http://www.investorwords.com/2153/GDP.html
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Geoff Russel,
Good question. Firstly, I should state that I am not an economist, and have only a layman’s understanding of the subject.
So I asked an economist. Here is his reply:
My question: “If a country doubles the cost of producing electricity, does that mean that GDP has gone up or down?”
His answer:
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Tom Keen, on 23 January 2011 at 2:39 PM — Err, no. For a PUD there is no profit so around here the retail price is about 3–4 conts/kWh above the wholesale price. For a IOU the is an assured profit range of around 12–20% on operations. Translating that into the retail markup is quite complex for vertically inegrated power companies such as mine. However my ultility does buy power from BPA so using the Mid-Columbia Hub wholesale price of 2.7 cents/kWh then the utility adds another 4.1 cents/kWh in wheeling the power to my meter.
There are well over 2000 power utilities in the USA and 50 ultity commisions; I won’t attempt to generalize.
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Gene Preston, on 23 January 2011 at 9:34 PM — I previously informed you where to find the link for gravity power, but here it is again:
http://gigaom.com/cleantech/a-new-energy-storage-option-gravity-power/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+earth2tech+(GigaOM%3A+Cleantech)
It is indeed a form of pumped hydro which may (or may not) prove economically viable.
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A Study for Neverland’s Future Electric Power
Neverland has ample high quality solar lands available and also some Tier I wind locations (generates 30% of the time) way out on the edge of Flatland Province where nobdy lives; new transmission lines would be required to use wind.
Neverland has no fossil sources; all coal and nat gas is imported (similar to Japan). Neverland uses lagacy coal burners for most of the power, has a small lagacy pumped hydro for load balancing and has been increasingly turning to CCGTs for load following to met the daytime demand. This so-called daytime demand has a phase lag with respect to solar insolation, with the actual peak occurring at 6 pm, evry day being just like the previous one.
With the price of thermal coal now at $120 per short ton and concerned about the national security implications of importing natgas, Neverlan plans to move away from fossil fuels as rapidly as may be.
(1) Build NPPs to replace the coal burners. Assume these are $4/W units which with available financing give LCOE=9.3 cents/kWh.
(2) Solar thermal is currently less expensive than soal PV. With about 7 hour thermal storage, LCOE=13.7 cents/kWh. So Neverland should start buiding a few of these for the daytime load. On cloudy days (yes, a few are in Neverland) the CCGTs pick up the load.
(3) Use demand management for those power uses which are schedulable. These can then run when the wind blows using LCOE=7.1 cents/kWh (which includes the cost of the new transmission lines). As is possible, attempt to use some form of demand management to shift the daytime load to earlier in the day with less demand in the late afternoon and evening.
(4) Start building another, larger pumped hydro facility. When solar PV drops below 11.7 cents/kWh then for daytime load following use that in combination with the new pumped hydro facility for use late in the day. Energize the pumped hydro via another NPP.
(5) If solar PV drops below the cost of another NPP, as is predicted to occur, build lots more solar PV for energizing the pumped hydro facilites. Keep the best of the legacy coal burners and all of the CCGTs as backup for cloudy days.
This is the least cost plan I could devise. Comments are encouraged and most welcome.
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GDP: Using a dip in GDP doesn’t sound like a good enough reason for dismissing something that looks to be necessary to prevent the slashing of GDP by about 2150 and there is plenty of economic dispute about GDP as a measure of welfare and standard of living anyway …
http://en.wikipedia.org/wiki/GDP
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Keeping on track, I have a question relating to the lead article is:
What would be the consequences to the USA economy of raising the cost of energy by the amount estimated by Chris Uhlik? Please provide the consequences in terms of:
– unemployment rate?
– cuts in services such as Health, Education, infrastructure,
– living standards, quality of life, disposable income, etc?
I’d suggest the consequences need to be weighed up – properly, by organisations capable of doing the analysis properly and impartially.
It is not good enough to say “I believe such an expenditure would be good value”.
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Geoff Russel,
Yes, there is dispute about use of GDP. There is dispute about almost everything. But GDP is an important component of the UNDP Human Development Index. There are masses of data showing the correlation (I accept that does not prove cause) between GDP and other Human Development Index measures. Until we have better, GDP is the best we have.
Well, that is your belief. It is certainly not mine.
Firstly, I didn’t say dismiss it. I am arguing that we need to understand the consequences and make them plain for all to see. Not just avoid mentioning them and try to impose your beliefs without proper analysis. Also, I am arguing we need to properly evaluate the alternatives to raising the cost of energy.
You mentioned “plenty of economic dispute about GDP as a measure of welfare and standard of living anyway”. There is much more dispute about ‘catastrophe’ resulting from global warming – a belief you want to use to justify imposing irrational policy decisions. I believe the real catastrophe would be if the economically irrational policies proposed by the CAGW Alarmists were implemented.
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Hansen’s latest argument for a safe level of CO2 (NOT CO2-eq) of below 350 is in a draft paper here:
Click to access 20110118_MilankovicPaper.pdf
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The Tres Amigas substation is in the middle of nowhere with no lines planned to connect to it. This has to be a perk that some legislator tacked on to a funding bill somewhere along the line. Our PUC legal council even intervened at FERC to try to stop it because Texas has no plans to build a line to it. If you look at the distances and losses and costs of delivering power over those distances the economics are not going to work out. Houston Light and Power tried to purchase TVA power many years ago and abandonded the idea when local sources of power were always cheaper than the imported cost of power, even when that imported power was from very low cost generation in TVA. Anyway to truly transport power over the distances across the US you would have to transmit it at least at 765 kV and there are no 765 kV lines within thousands of miles from Tres Amigas. Just watch, it will be the substation with no lines, sort of like the international airport in Alaska with no flights. I read that one of the things that brought down the Soviet Union was a serices of bad investments that did not work. Looks like the US is repeating that mistake.
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Geoff Russel,
Do you agree that all reasonable alternatives should be evaluated before imposing a policy?
Do you accept that imposing a carbon price, or imposing a high cost energy option by any means, will damage the economy?
Do you agree that if we slow the economy (such as happened in the GFC and the Great Depression) it makes us less able to take the actions we could otherwise have taken, not only to cut CO2 emissions but for all the other things humaninty wants – in rich and poor countries?
Do you agree that we should properly consider all the economicaly rational alternatives to a carbon price or any imposed high cost energy solution?
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Regarding all the comments about the desirability of a “drop of 5% in GDP”…
Three points:
1. My basic conclusion was, “Saving the environment using nuclear power could be cheap and worth doing.” Compare GDP changes to saving the planet from extreme warming to evaluate relative desirability.
2. The calculation put an upper bound on the cost at about 5% of GDP assuming $3/watt nuclear capex. But the Chinese are demonstrating (as the USA did a few decades ago) that it is possible to build nuclear plants at closer to $1.70/watt. With reasonable assumptions and regulatory policy, I belive the cost could be under 2% of GDP. This is lower than the current USA energy sector, so the net loss of GDP would be in the loss of the fossil fuel industry at a relatively smaller gain in the nuclear and electricity distribution industries. Presumably there would be a stimulating effect as fossil fuel consuming machines (like automobiles and space heaters) were replaced with electric machines.
3. Historically, large manufacturing pushes that were not combined with a wartime destruction of an economy have led to increased economic growth. I believe that a “big spend” on upgrading our electricity production infrastructure will yield dividends and growth that make the net effect positive. I wish I could make a simple calculation that proves this, but that’s more complicated.
In any case, I think the quality of life would increase for most people, but maybe not so much for the unemployed oil tanker unloading folks, coal miners, coal train drivers, gasoline station attendants, etc. In any large economic dislocation, there are winners and losers (e.g. auto workers won vs buggy whip makers lost). In this case, I’m proposing that the average person wouldn’t notice the difference economically, but the air would be cleaner, global warming would slow, and life would go on. Compared to outfitting every rooftop with 80 kW(peak) of solar PV panels and finding 6 month storage, this is a MUCH cheaper way to solve the same problem.
I’m not sure what the confusion is about “~70 vs 100 quads”. 10.8 kW/person * 306M people * 8766 hours/year = 1.04e20 Joules (99.85 quads) details of the breakdown available from LLNL at https://publicaffairs.llnl.gov/news/news_releases/2009/images/energy-use_big.jpg This does ignore food, but food is down around 1–2% so it’s in the noise.
Regarding solar alternatives…
Solar is currently vastly more expensive per average kWh produced than nuclear, but it has a few advantages:
1. solar installation is much more incremental than nuclear
2. solar is vastly simpler from a regulatory perspective
3. solar is on a fast learning curve (about 18%) so it could (IMO probably will) win in the end, after all, look at all those self-installing, self-repairing, capex-free solar cells based on chlorophyl covering our planet today. I fully expect technology to advance to the point where nanotech/biotech PV and photo-chemical cells again sustainably generate a significant share of the world’s human energy demand (like they did several thousand years ago).
In the mean time, I worry that atmospheric CO2 levels will rise to dangerous levels while we wait for solar energy and storage technologies to mature. So while the solar learning curve is fast, I worry that maybe it isn’t fast enough. I can’t do the calculation because I don’t think anyone understands climate dynamics well enough yet to definitively say what CO2 level is “too high”. From what we know today, I think CO2 levels are already too high and we are in for substantial sea level rise over the next century no matter what. I’d prefer we get off fossil fuels sooner by using mature nuclear technologies to displace fossil carbon now in order to minimize the (substantial) damage. And I did this little calculation to show that the cost of doing so isn’t unreasonably large and is in fact small compared to doing the same thing with conventional renewables.
As for natural gas…
Natural gas is only half as carbon intensive (per joule of combustion heat) as coal, so if you believe as I do that we need to dramatically curtail our CO2 emissions, then natural gas isn’t good enough.
As for synfuels from nuclear heat…
These will be important for applications where we have no good alternative technology, such as long distance air travel. I think jet transports and heavy trucks will use diesel fuel for a long time. We’d best synthesize these fuels from recovered atmospheric carbon dioxide and hydrogen produced from chemical processes driven by high temperature nuclear reactors. But, collecting enough carbon for business as usual isn’t possible. The US fossil carbon flux is about 170e12 moles/year. If we planted the entire state of Kansas with fast-growing saw-grass and harvested it without any fossil carbon fuels, we’d collect only about 5e12 moles of carbon or 3% of the necessary amount, roughly what US aviation uses today. We don’t have enough land to use biomass to collect enough atmospheric carbon to displace the 66e12 moles of petroleum carbon or the 35e12 moles of natural gas carbon that we use each year, or the 11e12 moles of coking coal we use for steel making or the 9.7e12 moles of fossil carbon we release making cement.
As for pumped hydro…
Good locations are rare and many are already exploited. Pumped hydro is not scalable to a significant fraction of the necessary storage. Large flow batteries could be scaled, but they will cost more than nuclear power plants of the same capacity. Building load-following nuclear is cheaper than building storage. To make nuclear load-following, either build plants with large excess reactivity like the navy (dangerous) or build LFTR which continuously removes fission product neutron poisons like xenon.
As for energy consumption growth…
I agree that energy consumption will (and should) continue to grow. I’d like to see the entire population of the world rise to ~7 kW/person and I’d like to see a significant fraction of the population have access to space and interplantary travel. That scenario is consistent with an extrapollation of historic energy consumption growth. All the more reason to accept the scalable solution of nuclear power. I made the no-growth assumption to simplify the calculation, but the story just gets more compelling if you assume growth.
As for uranium availability…
Fast reactors enable the burning of U238 of which we have plenty and can extract from sea-water indefinitely. The world’s rivers are replentishing the ocean with U238 faster than we would use it if 100% of human energy were provided by IFRs at 10 kW/person for everyone on the planet. Thorium is even more plentiful. These fuels will last longer than the hydrogen in the sun. Also, technology changes everything so planning beyond 100 years is almost certainly irrelevant.
As for the costs of replacing cars and space heaters…
Most of these machines are replaced relatively quickly compared to a wholesale conversion from fossile fuels to nuclear-sourced electricity. I think the mean lifetime of automobiles is under 7 years and I suspect the mean lifetime of home furnaces is under 30 years. If electricity costs were brought down to ~$0.025/kWh, people would upgrade to electricity fast enough.
As for the effectiveness of air-sourced heat pumps on very cold nights…
You can supplement a heat pump with resistance heat on the few coldest nights and/or buy sufficient insulation and thermal mass to do most of your heating during the day. My ICF home in Oregon has a thermal time constant of several days. With standard loads and 6 people in the house, the heater never runs even when outside temps average 0 degC. When it gets colder than that, I run the heater for a few hours in the afternoon.
As for the title being missleading…
The article is about the cost of ending the global warming contributions of future CO2 emissions. The conclusion is that the economic costs of a wholesale transition to nuclear electricity is a small fraction of GDP.
As for time-frame of the GDP change…
The 2–5% of GDP is continuous. Power plants need to be built, maintained, decommissioned, and rebuilt. I used 50 year plant life and 8% cost of capital. If the plants last on average longer than 50 years, the costs are somewhat reduced. But I believe technologies will improve and costs will come down enough that old plants will often be retired before end-of-life. But this will usually be done when the new plant costs are even lower, so again costs are reduced.
I don’t think GDP growth signficiantly affects the fraction of GDP needed for energy production. But assuming zero GDP growth rate simplifies the calculation.
“2-5% sounds a reasonable cost to pay to assist in the prevention of runaway global warming, and providing future energy security. Australian military expenditure is ~2% GDP, every year. In the USA it’s >4%. Investment in nuclear and other climate change mitigation strategies can really be viewed as defense spending too, and I think most people (in Australia at least) would agree.” My sentiments exactly!
As for “it’s a massive waste if it has no effect on the climate”…
I believe that anyone who denies atmospheric CO2 has little influence on climate and/or that humans are not dramatically changing atmospheric CO2 levels has not studied climate modeling and doesn’t deserve serious attention when commenting on these matters. Waiting around while all uncertainty is removed from the cost esimates is irresponsible. I don’t think YOU have an inate right to experiment with the climate that MY children will inherit.
As for the consequences of such a “massive expenditure”…
“You cannot justify a massive expenditure like this unless you can understand the consequences.” I think the consequences of not9999 developing a solution like this is extended low standard of living for most of the world’s population followed by massive flooding of most populated areas. A shift of 2–5% of GDP from fossil fuels to nuclear seems like a much more benign alternative.
Finally, I’m not seriously proposing an exclusive change to nuclear overnight. I DO think that a massive shift from fossile to electric technologies is prudent AND building nuclear as fast as we can is long overdue. If we get our act together, the degree of climate change will be minimized. It might still be very large, but it will be smaller than if we continue to sit on our hands while a real, scalable solution is waiting.
Chris
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Peter Lang – Canada with about the population and GNI as Australia manages to operate 22 nuclear reactors without falling into penury as a nation.
Although these only supply a bit more than 15% of our generation nationally, it is 55% in Ontario, our industrial heartland and richest province.
It would seem to me that Oz could afford to go down the nuclear path a fair way before suffering any major impacts from the possibility of higher cost energy.
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I dare say that the 24,000 people a year who die directly from the effects of coal fired power generation would have a much better quality of life, living standards, and they’d be able to spend their disposable income too.
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I’m not so clever with formatting, apparently. [Ed: fixed]
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DV82XL,
Really!. Were they built now, at current costs?
Come on. Surely you have a better understanding of the economics than this comment suggests.
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Tom Keen,
Try putting it all together. Anyone can pull out a single statistic and say that is all that matters. That is like what the Helen Caldicot types do. They talk about their granny who died from cancer, so its deadly and that’s what nuclear power does.
Why don’t you attempt to answer the question.
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Chris Uhlik,
Thank you for your detailed responses to my and many other’s comments.
You say:
I agree we should adopt nuclear, for many reasons … if it’s cheap. If it’s not cheap, then we have to do the options and cost benefit analyses – thoroughly, properly and impartially.
I agree nuclear should be cheap. The reasons why it is not cheap, in western democracies, is what I believe we need to expose to the public. This is where our efforts should be, not on continually trying to ram down the public’s throat that we face disaster and catastrophe if we don’t stop burning fossil fuels.
That would need to be done properly, by a group that is impartial and competent to do it. Some believe in CAGW, others don’t.
The $3/W figure is well below the recent bids in the USA, so it is probably too low, unless we can convince the public to remove the impediments to low cost nuclear power. Educating the public about what is causing nuclear to be far too costly is what our efforts should focus on, IMO.
Why do you believe this? Can you provide a link to an authoritative source (like IEA, EIA, DOE, etc.)? What would we have to do to make this happen? I also suspect it is possible if we remove the impediments to low-cost nuclear power. If nuclear is cheaper than coal (with externalities included for all generator types), then I agree with you that GDP will be increased not decreased. The key is to allow nuclear to be cheaper than coal. In that case there will be little opposition (except from the die-hard anti-nukes). This is clearly what we should be aiming for, because it gives a triple bottom line benefit. The alternative approach, trying to argue the environmental benefits are all that count and ignoring the economic consequences of policies that increase the cost of energy, will be almost impossible to win.
That is a belief. I’d suggest you’d needs more than that to carry that argument.
But what does that mean? I suggest there is a significant misunderstanding about the consequences of slowing GDP growth.
The comments towards the end about belief in catastrophe, I’ll leave alone.
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Peter: Chris answered most of the questions you asked me, and did a better job than I could anyway. I do believe that we (the next+1 generation) face disaster if we don’t stop burning fossil fuels so I’m more concerned with making a workable decision and getting on with it than spending an eternity chasing the best possible decision. That said, really good designers come up with solutions which allow flexibility as technology changes so engineers need to be thinking about generators and transmission systems which aren’t tied to particular energy source modes. In computing we talk about getting the interfaces right and the design can adapt as technology developes. Easier to talk about than to do and easier in software than in
hardware :)
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This is a great thread. Thanks Chris for your analysis and all the very well informed comment.
1. I speculate that the implementation cost would be significantly lower than discussed ($3/w) due to the massive economies of scale of a 100% conversion, such as prefabricated power-stations and standardisations etc.
2. What would be the leakage/cost.problem in Texas of pumping hydro in the U.S. if it were pumped up say in Washington State, does the grid not work over such distances? (Genuine question, no sarcasm!) PS What about the Chisos Mtns in the Big Bend?? Great spot!)
3. I am sceptical about claims that human industry is forcing the climate. I think the best reasons for nuclear power is cheap, clean and safe. (Clean makes sense not in a CAGW sense, but int he sense that the climate is a complex system, its probably smarter not to rock the boat!)
Pip
(Peter, you posts are brilliant.)
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Peter Lang – Two are being refurbished, at great cost, two more are scheduled for refurbishment, and two more new builds are being planned by Ontario. Nor were the original builds cheap – there where great cost overruns, yet in the long run they have been profitable.
It looks like you are the one trying to blow off real world evidence here, not me.
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“Why do you believe this? Can you provide a link to an authoritative source (like IEA, EIA, DOE, etc.)?”
http://www.phyast.pitt.edu/~blc/book/chapter9.html
Click to access Made%20in%20China.pdf
Fangchengggang plant, 2.07 GW, $3.5B — these are the domestically produced design based on the AP-1000.
http://www.world-nuclear-news.org/IT_New_plant_gets_go_ahead_in_China_1907101.html
Chris
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Geoff Russel,
I do understand what you believe. But surely you must realise that many voters are not convinced about by the extreme alarmism being argued by what are seen by many as extremists. Given that, surely it is worth at least considering options that the CAGW doubters can support.
It is not about getting the best possible decision. It is about getting the population to support a policy that will seriously damage the economy when they doubt the Alarmists’s spin about catastrophe. It will be hard to win the doubters over given that the CAGW Alarmists are stridently opposed to even considering alternative ways to achieve the objective of cutting emissions, other than by the economically irrational ways the Alarmists want imposed on society. The CAGW Alarmists simply do not want to even consider the alternatives. That is scary. It makes many people, like me, distrust much of what they stand for and believe. On one hand they believe they have looked impartially at the evidence for CAGW. But on the other hand they do not want to consider rational ways to deal with it. How can we trust that they are considering anything objectively and rationally? Given what these groups have forced on society before, and the consequences of those actions, why should doubters trust what appear to be extremist claims.
So I would want a proper, impartial due diligence investigation before I would be prepared to vote for what looks like seriously damaging policies.
There is no point in continually repeating the CAGW mantra. Most people want to know that the due diligence has been done before wasting masses more of our wealth.
I realise that none of this is cutting through to those contributing here. But my suggestion is to hear the message, because there is a large proportion of the electorate that will not support economically irrational polices and more waste.
Without broad support, implementing policies to cut emissions and replace fossil fuels will be a stop start process. I’d go further and say without nuclear being allowed to be cheaper than coal, it will be a long slow process to get it implemented in Australia.
I’ve suggested a way forward that would get the broad support of the community, but for some reason, it seems to me the active contributors on BNC don’t want to consider it. Or perhaps it is because money matters are not their strong suit. If that is the case, then surely it is incumbent on them to get a better understanding about what makes the world go ‘round.
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Chris Uhlik,
I see what you are basing your $3/W capital cost figure on now. Most here are familiar with the Chinese and Korean costs. However, the AP1000 vendor’s cost estimates for a new plant in USA is not a contracted cost or a completion cost. Vendor’s estimates have proven to be wildly optimistic when it comes time to bid and even more optimistic by the time the plant is completed.
http://web.mit.edu/nuclearpower/
The problem is the many impediments to low-cost nuclear in the wwestern democracies. That is what we need tro deal withy. That is the issue that BNC contributors do not want to even begin to look into. (see: https://bravenewclimate.com/2010/01/31/alternative-to-cprs/#comment-110262)
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Another consideration in regard to relative value and ‘cost’ is ‘compared to what’. I guess we will have to wait for another spike in the oil price for nuclear to become ‘cheaper’. I’m sure the Middle East won’t disappoint!
Unfortunately or fortunately, it is this relative cost that is the spur for adaptation to nuclear power. Australia has vast coal reserves.
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DV82XL,
They were built in the 1970s and 1980s. So were most of the other NPPs in the western democaracies. But few are being built now in western democracies.
The point I was trying to make is that nuclear energy was estimated to be the least cost way to generate electricity (estimated lowest LCOE) when the decision was made to build these plants.
But that is not the case in the western democracies any more. The reason, as you have pointed out very well in many of your previous comments, is a whole host of impediments to low-cost nuclear power in the western democracies.
I believe we have to identify these impediments, determine the effect of them on the LCOE, rank them in order of which are having the greatest effect on raising the LCOE of nuclear energy, and working out what governments would need to do to remove them so that we can allow nuclear to compete with coal.
Just for interest, here is a comparison of Canada and Australia in 2010 is:
GDP ($trillion) = $1.5T, $1.3T
GDP per capita = $41,016, $65,869
GDP growth rate = 5.6%, 3.3%
Inflation = 1.4%, 2.8%
Unemployment = 8.0%, 5.4%
You are correct that the two economies are fairly equivalent; much closer in GDP than I had realised.
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Peter:
What are you talking about? … who forced what and
when?
I’ve looked at 110262 and am sure that plenty of
BNC contributors would welcome a level playing field for nuclear/renewables but I for one favour
active discrimination against coal!
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Peter, perhaps you could try quantifying the massive upheavals that the energy market capturing 2-5% of GDP would cause. You have not substantiated this claim, merely stated that it is irrational to support it.
On GDP:-
The formula for calculating GDP is
Y = C + I + (X – M) + G
Where
C = Consumer Spending
I = Investment made by industry
X = Exports
M = Imports
G = Government Spending
So I’m curious as to where your economist friend friend subtracted the cost of electricity infrastructure. The silly thing about GDP is that all costs (that is, every dollar that is spent) is added up and counted towards growth, regardless of whether it is good, bad or otherwise.
Oh, and if this statement: “e.g. 2% drop in GDP = 20% permanent unemployment , 5% drop in GDP = 50% permanent unemployment.” isn’t alarmist, I don’t know what is.
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Chris Uhlik,
I wrote my last reply to you having clicked on a wrong link. Please ignore my comments about AP1000 vendors. I’ve just opened your first link http://www.phyast.pitt.edu/~blc/book/chapter9.html and see it says exactly what I’ve been saying.
http://www.phyast.pitt.edu/~blc/book/chapter9.html
BNCers take note. This is what I’ve been saying.
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Geoff Russell
There have been many comments on this elsewhere, for example on the “Alternative to Pricing Carbon” thread. https://bravenewclimate.com/2010/01/31/alternative-to-cprs/ Here are a few examples:
– Who led the anti-nuclear movement for the past 50 years? (their effectiveness in stopping nuclear in the western democracies means that CO2 emissions from electricity generation are 10% to 20% higher now than they would have been had its development not been stopped)
– Who argued for bio-diesel (causing extensive deforestation in the tropics)?
– Who continually equates solar power and wind power with stopping climate change as if one is directly related to the other? (This has been going on for twenty years. Just look at the ABC and most of the media. They invariably equate renewables and climate change in the same sentence).
– Who got DDT banned, causing tens of millions of deaths
This has also been discussed at length on the “Alternative to Pricing Carbon” thread.
Active discrimination translates into sovereign risk. If you are intending to steal from the investors who invested in the plant in good faith, then how do you suspect you will get investors to invest in a nuclear power plant? Investor risk premium has increased in Australi8a in the past three years due to a succession of such policies such as
– the proposed mining tax, which is proposed to be applied retrospectively to existing mines
– effectively confiscating the value of Telstra from the Telstra share holders
– threatening to impose a carbon price (tax or ETS) on generators that were bought in good faith from government owned utilities
– many more examples posted in comments on other threads
Geoff, if it is very easy to make simplistic statements. But to implement good policy it has to be robust and handle the many complexities. Sovereign risk is one of the main reasons the cost of nuclear is too high in Australia.
Could I urge BNCers to have look, or another look, at how I am proposing we can get to nuclear in Australia at a cost less than coal: https://bravenewclimate.com/2010/01/31/alternative-to-cprs/#comment-109491
Subsequent comments on this thread say a lot more. This comment contains links to the some significant comments regarding how I believe we could get broad support for a policy that would survive over a long time period.
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Pip Willis,
Dead right.
You might be interested in this which gives my suggestion about how we can get there in an economically rational way, and therefore attract broad support:
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Tom Keen,
It’s your turn to have a go. I refer you back to this question which you have not answered yet (and not has anyone else):
I get the impression you are trying every trick in the book to avoid addressing this important question. I understand the tactic of diversion, so please don’t waste my time any more. You can learn about basic economics and GDP for yourself. If you don’t understand the basics, then it is pointless raising the sorts of questions you are. My examples of the effect of cutting GDP on unemployment were posed as part of the question. It’s up to you to do the necessary analyses to allow you to provide a sensible answer to the questions I’ve posed (and that you and everyone else should be posing for yourself without me prompting you to). If you are not considering such questions yourself, without having to be prompted, you are irresponsible, IMO. Not that that is unusual amongst extremists and those who are dominated by single-issue politics.
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Tom Keen,
I am annoyed about having my statements misrepresented. This is what I said that you then twisted:
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Peter Lang – Because of inflation, the refebs underway and planned will cost almost as much as a new build in some cases, yet these will still go ahead because these plants are financially viable. In fact New Brunswick wanted to build a second merchant plant at Point Lepreau supplementary to the Provence’s needs, to sell power to New England, and Hydro Quebec wanted to buy into that project. As well I mentioned above that two new reactors are being planned for Ontario.
I think you have to revisit some of your assumptions in light of the Canadian experience.
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For the left the answer must involve sunshine, puppies and
the destruction of everyone not as enlightened as themselves and
democracy as representational government. So the answer is NO! in
the name of social, sexual and artistic justice!!
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Chris Uhlik:
Thanks for your explanatory comments of 24th Jan at 1.00pm. I think I can now see what you’re driving at and, in essence, I think most here would agree. However, your calculations and assumptions, IMO, tended to confuse the issue. You suggested a cost for building and running sufficient nuclear reactors to provide for more or less all of the energy needs of the United States with the assumption that GDP would remain constant. This cost, you intimated ,would represent up to 5% of GDP. However, given that GDP is the aggregate of all consumer plus government spending plus the value of exports less imports and given that your cost represented wholesale and not retail value, I think you should have used a figure of 10%.
Before this suggestion causes Peter Lang to fall from his pram, it is worth noting that energy expenditure currently makes up about 10% of GDP. Thus, on your figures (which are subject to debate), there would be no adverse impacts on the discretionary incomes of American citizens involved in converting to an all nuclear energy policy.
Do you agree with my interpretation of your post or am I continuing to have a flawed understanding?
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my private conspiracy theory… the GE(nbc) nuclear plant
design is inferior to the Westinghouse(cbs) design. GE, in their
effort to delay construction until they can find a better design
has resulted in their embrace of the wh and their so-called green
energy advocacy, with the exception of advocating nuclear power.
each plant represents a sizable amount of money for the company
that recieves the contract. Immelt is there to make sure that
nuclear production doesn’t occur, until they can earn a slice of
the pie.
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Peter Lang:
Like me, you admit to only having a layman’s understanding of economics. However, I would have expected that you might have sniffed out the inconsistencies in the two definitions of GDP to which you treated us at 9.15 and 9.53 on the 24th Jan. The first, consistent with that given by Tom Keen at 8.29pm on the same day, is flatly contradicted by the second ( “GDP is value added, so it’s income after costs have been deducted.”)
As far as I’m aware, GDP is unrelated either to gross or net income. It is correct, I think, to suppose that capitalism cannot long survive zero GDP growth because such growth is necessary for the repayment of debt. It is, of course, possible for GDP to grow while per capita discretionary incomes fall (declining living standards). I suspect that many of us have been getting confused over technically defined terms.
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Dr. Uhlik, did you account for the capital cost of
conversion to heat pumps and electric cars? My hunch is that these
costs would dwarf the costs of the new power plants and
transmission infrastructure, but I’d be interested if anyone has
actually estimated these costs, and how they would be phased
in.
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“The cost of this infrastructure: $2,550/person/year or 5%
of GDP.” Is that GDP for one year? If so, you should spread it out
over a number of years.Then the % of GDP will be much
lower.
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Why do the images in this story link to larger versions of
themselves? This is extremely distracting and makes it almost
impossible to read.
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Peter Lang: the cohen you cite above is good. have you found any updates to cohen or do you think cohen works well enough for the u.s.–given the absence of nuke builds (basically) since he wrote?
douglas: what you say about capitalism is very important but seems about half right. growth is necessary to repay debt but the debt is itself undertaken with the expectation of growth. if you just say the former, it makes it sound like once the debt is repaid, then capitalism would no longer necessarily have the motive to grow.
growth is built into capitalism, though so are barriers to growth–like so much inequality that further consumption requires debt.
at any rate, peter lang seems basically right about capitalism’s relation to unemployment, though Douglas’s caveats are important.
Decline of economic growth (generally correlated with lower gdp) will generally correlate with increased un and under employment. but just as douglas notes the possibility of growth and declining living standards, so could there be higher un and underemployment even with growth: at least in a particular country, due to outsourcing or employment reducing technologies.
Geoff Russel: have you written anything on the relation between sustainability and exponential growth?
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[…] Could we solve the global warming problem by
converting our enegery production entirely to nuclear?
Here’s how much it would cost. […]
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sorry geoff. I left the second “l” off your name (but I got the double “ff”).
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