The cost of ending global warming – a calculation

Gregory Meyerson, @ 26 January 2011 at 12:59 PM:

Thank you for taken all that trouble to prepare the comment with the statistics from the World Bank. I have to apologise that I haven’t taken the article very seriously. To me this is simply cherry picking data. It doesn’t answer my points in a convincing way at all.

1. the world is getting better in nearly all the UNDP HDI measures as time progresses, over any extended time period
2. The underdeveloped countries are improving faster than the developed countries (as they should)
3. The gap between rich and poor is reducing (you will always be able to pull out a few figures and specific time frames to refute any overall trend)
4. You have picked some short time frames to make a point – that is meaningless – it is equivalent to trying to make a point about global warming over a short time period;
5. Socialism is clearly an anchor on progress. Globalisation and capitalism are what produce the growth and improvement in conditions (overall, not for every individual at every particular point in time)
6. We need incentive, otherwise no forward progress is made. There must be a reward for effort and risk taking, otherwise no one would work hard or take risks. Employees, who have never taken serious financial risks, feel they are being undervalued. Society on the whole doesn’t see it this way and never has. The employees whinge about the entrepreneurs’ wealth (those that succeeded and ignoring all the ones who went broke), but are not game to take financial risks themselves.
7. Free trade, not international aide, is what the underdeveloped and developing countries need. This is equivalent to the difference between giving a person a real job or the dole.

Greg, no point in discussing this any point. We’ve done it to death for a year and a half. You are just wrong, and that is the fact of the matter :)

BTW, I’ve provided the links before, and can’t take this seriously enough to be bothered doing it again.

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Gene said:

But like Fran said, it might be cheaper to just build load following units rather than build energy storage.

Or even non-load-following but higher capacity units since sooner or later this extra capacity will be used.

As always this would be worked out on a case by case basis.

One can imagine though, a variety of reactors in a complex which in toto would rarely be used at full capacity and which could be individually backed off quite slowly but which in aggregate cut output quite quickly.

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Conceivably baseload electrical output could be a lot more than the typical 40% of peak. Excess output could be used to split water by electrolysis and the hydrogen stored in low pressure tanks. When demand was above average fuel cell generators (with surplus heat in winter) could burn the hydrogen.

OK this sounds horrendously inefficient since small scale tests suggest a round trip efficiency of just 7% e.g. the Stewart Island experiment http://www.siei.org/
Ceramic fuel cells with even a few kilowatts of power can cost tens of thousands of dollars I gather. However pumped hydro is near maxed out and batteries can double wholesale electricity costs. I believe fuel cells scale better than batteries. The marginal cost of doing this with nuclear will a lot be less than solar.

Before criticising his ask what if we don’t have load following NP by the time natural gas runs out.

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Peter Lang:

I am beginning to get the impression that you are interested in identifying and removing the impediments to low cost nuclear power. Perhaps there are other readers here who have yet to appreciate this. Therefore, it is not for me to suggest that you shouldn’t continue repeatedly to hammer home your message on every thread.

I would, however, suggest that those interested in the subject might like to look at a new website: http://deregulatetheatom.wordpress.com

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Whether you believe in Global Warming or not, the smartest thing for Australia to do is burn coal, to provide the cheapest energy, attract industry, grow the economy, and save the money to deal with anthropogenic climate change should it be real, or spend it on something else when it is proven not to be so.

Sounds like Arthur Dent . Perhaps the community are all becoming radical communists, in that case.

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Tom Keen,

As long as you, and the others of similar persuasion, continue to deny economically rational policies, and argue the most inane nonsense (like raising the cost of electricity won’t damage the economy), then I suspect the most sensible and rational thing to do is to keep going with coal until we can make some progress on removing the impedimentst to low cost nuclear (or other countries do first and we follow in their wake).

I see you resistance to economically rational policies as the same sort of resistance that has prevented progress for 40 years. You are an example of what a real Denier is.

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Tom Keen,

We’ve been over that a dozen times. It is not practicable to internalise all the costs of externalities of all electricity generators and all industries in a fair and balanced way. So why pick on just one externality, just one generator technology and just one industry (electricity)?

We could make more progress if you (and others of similar pure but single issue beliefs) that not everyone shares your concerns about catastrophic or dangerous man made global warming. So either you die in a ditch trying to stay pure to your beliefs, or you compromise and try to find a solution that will bring the majority of voters on board to support a policy that will be robust for the long term.

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Could readers with more engineering knowledge than I expand a bit further on the pros and cons of load following?

If a nuclear reactor can be designed to load follow, are there any significant economic savings to be made relative to running continuously at full power? Presumably, there may be less fuel consumption , but possibly more wear and tear and more initial capex. It is clear that, barring limited pumped storage, as far as electricity is concerned, you use it or lose it.

It thus seems to me that electricity generators might be more economically efficient if they diversified and didn’t solely strive to match the needs of their customers. I believe that some industrial processes (eg aluminium smelting) need power continuously , but it seems that there might be others that could function with power that was intermittent or liable to fluctuate, albeit less efficiently than if operated at full and continuous power. The question then becomes whether the economic consequences of this inefficiency were less than those of storage or load following.

Clearly, processes that could operate with a discontinuous power source could make use of both nuclear and renewable energy, but it seems likely that the discontinuity would always be less in the case of nuclear. I was wondering whether liquid fuel or fertiliser production companies might be suitable acquisition prospects for electricity generators?

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Tom Keen,

I don’t understand what you are talking about with this statement:

I wasn’t talking about internalising negative externalities.

I think perhaps you did not understand what I said. All industries have externalities (for example lead in petrol, road deaths, etc). We try to internalise the most significant ones until there is a break even point where it is not worth doing any more.

With electricity generation there are many externalities other than CO2. Google ExternE and read about them and the estimated costs of them.

Now, re-read my last post to you.

You’re putting the tail firmly before the dog if you think pure economic arguments are going to get enough of society on side for it to ever happen.

You are misrepresenting what I’ve been saying for a very long time or you have not understood. Perhaps you should read the links I’ve provide repeatedly so you can understand. I am not saying we must not educate the population. What I am saying is that will not succeed if nuclear is more costly than coal. Tom, you have not understanding of this, so it really is a waste of time me trying to explain it to you anymore.

It is really frustrating continually repeating the same message and you and others seem to willfully misrepresent it. Doing so, as you and several others do repeatedly (Fran and Douglas Wise are two others who do so repeatedly) makes me distrust you, distrust your methods, your integrity and by extension the methods and integrity of those of similar views. My distrust is because the Greens seem to have no ethics whatsoever. All they care about is getting their way; for them the end justifies the means. They believe they are correct and everyone else should just agree with them. But anyone with half a brain can see their policies would be disastrous (as similar policies have proven to be in the past, over and over again).

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@Douglas Wise

I was wondering whether liquid fuel or fertiliser production companies might be suitable acquisition prospects for electricity generators?

I’m rather short on the engineering knowledge, but I did work for a fertilizer manufacturer quite a few years ago. Production of ammonia and products derived from ammonia such as urea and ammonium nitrate is via continuous process which needs some period to reach equilibrium. Indeed shutting these things down, which happens every few years for maintenance is an expensive exercise.

There are some minor batch processes such as producing alum, but most of it, I believe has to run 24/7.

Not only is gas the feedstock, I think it provides the process heat and other energy. In the Urea prill plant, gas turbines were used to drive the compressors. From memory something like 400C and 100 atmospheres which is quite substantial.

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Chris, a few years ago there were some coal plants here in Texas that just refused to back down at night time so that their total generation within their control area was an excess, i.e. more generation than load. It resulted in inadvertent energy. Other control areas compensated for the rogue utility’s operation by backing down their plants. Someone had to back down on generation otherwise the frequency would have drifted away from 60 hz. The situation was quickly corrected when the responsible utilities that backed down on their generators said they were going to take the excess energy being generated by the coal plants at zero cost, i.e. not pay for the energy. It may not be all that easy to find loads that can increase their load at night time. Possibly a bunch of electric vehicles could take advantage of that situation by increasing their charging rate. But it would take a rather smart grid to make that automatic.

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You are talking about time of use rates. They might help customers shift their energy usage to times of the day when power is lower in cost. However experience shows that most people are to busy with other activities to be concerned with saving a few cents by shifting load. There would be an additional cost for setting up the accounting that allows you to have time of use rates. It could be a big effort and not result in much difference in how the grid operates. You would still need load following generation. There will always need to be load following generation. Otherwise the grid is unstable.

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Barry Brook, on 27 January 2011 at 1:53 PM — Currently in the US CCGTs with a design life of 40 years have 30 year financing; wind turb ines with a 20 year design life have 15 year financing. A Gen III NPP has a 60 year design life. I suspect5 that the utility cannot pay its $6 billion cost in so sshort a time as 25 years, not having the cash flow. I now think I should have used 45 years for the length of financing.

Gene Preston mentioned something about 11.8% but in the simplified LCOE calculator I should have added more to simulate risk insurance and deprecation.

Also, my O&M cost was way to low. I should use 8766 h/yr x $0.031/Kwh = $271.746/kW-yr.

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Yup, those are the standard numbers. But when was the last time you were offered a 12.5% ROI for 45 years? I want some of that! Also, the Chinese are offering plants at $1700/kW, so why do you want to buy the ones offered at 2.6x the price?

Here are numbers a nuclear optimist might use:
30 year finacing @ 5%
Capital cost $1200/kW (no pressure vessel, factory built, close containment)
Capacity factor 75% (load following)
O&M $100/kW-yr (highly automated)
Heat rate 10000 Btu/kWh
Fuel cost $0.002/MMBtu (thorium)
gives
Simple LCOE = 2.8 cents/KWh

A government that cared could engineer a regulatory regime and R&D and financing structures to make this a reality. That government is going to be very competitive.

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Gene, I’m not talking about time of use billing. I’m talking about dynamic pricing. On a night when a big powerplant is offline, the prices would be higher than on a night when the winds are blowing strong. Making decisions every day about what to buy or not buy and when is how markets shift resources to cheap suppliers. A monopoly where the rates change between day and night is not the same thing at all.

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Chris Uhlik, on 28 January 2011 at 11:38 AM — Unfortunately, the Chinese may not be allowed to vend the CPR-1000 outside the PRC. Even if allowed, US NRC is most unlikely to approve the type.

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jess or anyone:

what is the proliferation resistant feature of the thorium modular reactor?

if this has been discussed before, I can’t remember where.

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Gregory
My bomb making skills are a little rusty, but with nuclear weapons, H-bomb, A-bomb, Neutrino/Dirty Bomb all use very heavy elements, Uranium/ Plutonium, which are not used, apart from (I believe) starter amounts, which are very very small, in the Thorium reactors (LFTR). So, no risk of some extremist making a fissile bomb.

I look forward to being corrected!

Pip

PS Peter, you know I’m your biggest fan, but your post, ‘Nuclear cheaper than coal, how?’ asks for many stars to align does it not? God forbid, but whacking a price on emissions would be the easy way to make nuclear power cheaper than coal, yes? But I suppose there would be significant downsides in the extra cost of everything. But, its going to happen, Canberra will follow London et al in Europe on this “how green is my valley” competition.

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Peter Lang interesting article on natgas. Critics often allude to fugitive CH4 emissions from pipes adding to that from mines, swamps, tundras and possibly warming seas. There are also delayed NO2 emissions (GWP of 310) from the breakdown of fertilisers made from natgas.

However all that may seem irrelevant to the business lobby. My more immediate question for Martin Ferguson MP is how is Australia going to replace a million barrels (143,000 tonnes) a day of mostly imported oil? That is for both fuel and chemical feedstock. Gas is too good to burn in power stations when there are alternatives.

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This wikipedia article on Uranium-232 does a pretty good job of explaining the gamma radioactivity of the uranium produced in a LFTR.

http://en.wikipedia.org/wiki/Uranium-232

While I agree that the uranium produced in a LFTR isn’t going to be used for weapons production, like all nuclear reactors (fusion included) they are a copious source of neutrons. There are basically two routes to nuclear weapons: enrichment of natural uranium to HEU with >>20% U235, and neutron irradiation of natural uranium (mostly U238) to make Plutonium 239. Historically, everyone with bombs seems to have started with enrichment and then proceeded to lightly toasting uranium to make plutonium. Basically all the big powers who want bombs have them. The radical smaller countries will get their bombs by enriching uranium or by buying them. That’s why the US is so exercised over Iran’s nuclear fuel enrichment efforts. Iran wants to make fuel for their reactors in order to decouple themselves from the potentially uncooperative United States which has a history of imposing economic embargoes against them. But with enrichment capability comes U235 bomb-grade material production capability — just keep running some of the uranium through the enrichment facility over and over again.

The other way to make bombs is by producing Pu239 with neutron irradiation. All reactors can do this, but some are particularly well designed for it. Pressurized water reactors are pretty bad at it because you have to take them apart to refuel and you need frequent (~weeks) refueling cycles to generate bomb quality Pu239. This really messes up their utility for civilian power production while the bomb making activity is going on. And it takes several cycles to make enough for one bomb. Something like this was done once by the UK as a demonstration of feasibility, but they used a Magnox not a PWR. Some reactors like CANDU with online refueling capability are especially good for Pu239 production. These are sort of dual purpose reactors: civilian power and military plutonium production. I think the Russians have some dual purpose reactor designs as well.

LFTR doesn’t actually exist. LFTR variants could be designed to make dual purpose relatively difficult or relatively easy. There are good reasons to make it easy in the first reactors. Basically, the right LFTR design can convert any fissile into very clean burning U233 for starting up other LFTRs. Those second generation LFTRs would be very nice because they would generate very little actinide waste and their U233 would be contaminated with U232 and Thalium-208, so very bad for bomb making. But if you can irradiate Th232 to make U233 and ship it off to another reactor, you can probably also figure out how to irradiate U238 and make Pu239 and ship it off to your bomb factory. I don’t subscribe to the theory that LFTR is especially proliferation proof. That’s arguing from a failure of imagination. But I do think that all civilian power reactors are essentially innocent of being used in bomb making. All of the world’s nuclear bombs (and there are tens of thousands of them) were made in specially constructed bomb making facilities. Worrying about civilian reactors being used to make bombs seems missplaced. Lots of countries have made bombs and none of them did it that way. There are easier, more efficient ways to make bombs.

I’d also be in favor of a vigorous inspection regime imposed on all countries operating nuclear power plants or enriching or processing fissile fuels. The US should participate in being inspected by randomly selected teams of international inspectors just like all other nuclear countries. I think even Iran might agree to something like this if the US did too. That’s a fair and I believe effective way to make sure nobody misappropriates highly enriched fissile material for military purposes.

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David that 11.8% should not be used in your calculations. It was an ad hoc number created by the US energy czar Carol Browner who was just fired from her job. http://online.wsj.com/article/SB10001424052748703555804576102810159169324.html

I see you used an even higher interest rate in the next posting. Let me ask you this David, can you make an investment that will give you a guaranteed 12% return on your money today? The answer is no. Can the millions of people who want to see nuclear power get a 12% return? – No. So if those millions of people pooled their money and bought a nuclear plant, they might even consider a 0% interest rate appropriate. I would. If you use 0% interest you will get about a 3.6 cents per kWh energy cost for the nuclear plant. To me this better represents the future value of nuclear power.

Chris you are talking about unit commitment. In todays systems we will not be taking off line large coal plant or nuclear plants if the wind is blowing. We will take off line gas plants and if we have to, back down on coal plants. Texas doesnt have enough nuclear power to ever have to back it down. I understand that France cycles nuclear plants routinely, but I’m sure they never have to take them down because they sell the excess power to other countries.

David, you are correct about utilities not offering TOU rates through their smart meters. They put the meters in to advantage their own operation without thinking much about what the customer actually wants. Lets see if we can change that. I’ll be sending testimony today to my local PUC asking for them to allow residential customers an opportunity to own off site generation. That should bring out a lot of utility opposition.

Pip, my estimated cost for nuclear power is only 3.6 cents per kWh. Isn’t that lower in cost than coal? At 5000 $/kw, buy one kW and run it for 40 years. Divide that cost by the energy produced and you get 1.6 cent per kwh. Add 2 cents per kWh for fuel and O&M and that gives you the 3.6 cents per kwh. Currently I am earning 0% interest on my other long term investments so 0% is appropriate from my perspective.

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Gene Preston, on 28 January 2011 at 9:35 PM — The 12.5% “interest” was set artificially high to cover risk insurance and depreciation, neither of which is directly included in that Simple LCOE calculator. The number I have for interest is 10.5% so I simply added 2% to cover the other factors.

Variable rates in the State of Washington are not yet available because the state utility commision has not yet approved any such plan. I suspect that once enough of those so-called samrt meters are installed then variable rate pricing will become available.

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Peter

Thanks for your post, I absorbed what I could! Essentially, most people posting agree nuclear can be cheap, clean and safe.

The issue, particularly in Australia, where there is a moratorium on nuclear power, is political.

The current energy ‘market’ displays the tinkering from Governments performing political stunts to woo a noisy minorities.

You suggest that the coalition will not proceed first with a nuclear power policy, as it will be electoral suicide. It would be hard therefore to see why the ALP would decide it wouldn’t be. The key to breaking this dead-lock would be for The Greens to accept consideration of nuclear power.

It seems to me that at the heart of The Greens mantra, there is a great hypocrisy, they are the most strident about dangerous climate forcing and yet in denial about the only realistic mitigation.

Yet this logic seems out-dated. It surely must be time to realise that an absence of nuclear power consideration in a political manifesto is a glaring weakness. I am not convinced that a consideration of nuclear power is electoral suicide.

Or of course, become a noisy minority. I suspect the ban on nuclear was a conspiracy from big coal!

So, back to Hugh Jackman on Oprah, saying, “I only use nuclear power to cook my breakfast cereal!”

Gene, I loved Texas. Great roads. Yes, nuclear can be cheap, but is it too much to think the Government will allow it to be? (They’d be thinking “there’s a good buck for us here, we could buy those new stealth fighters!”

pip

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HI David

Yes, well, I’m afraid your right. The key word is ‘can’ be cheap, not ‘is’. What is stopping nuclear power being cheap?

BTW, Peter, Chris or Fran or anyone with superior engineering skills, why can’t NPP use pumped hydro in reverse tidal locations for load following? NPPs can be coastal, desal, population considerations, etc, why not some tidal storage. What would be the tidal movement at say Galverston Tx?

Interestingly, I used to live close to a medieval tidal mill on the Teign river in Devon UK. No idea like an old idea!

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Hi Pip,

Thanks for your post, I absorbed what I could! Essentially, most people posting agree nuclear can be cheap, clean and safe.

The issue, particularly in Australia, where there is a moratorium on nuclear power, is political.

It seems to me that at the heart of The Greens mantra, there is a great hypocrisy, they are the most strident about dangerous climate forcing and yet in denial about the only realistic mitigation.

Yet this logic seems out-dated. It surely must be time to realise that an absence of nuclear power consideration in a political manifesto is a glaring weakness.

I do not believe there is any chance that the Greens Party will change policy to support nuclear. They would lose most of their support base. It won’t happen, IMO.

Labor will dump its anti-nuclear policy at its National Convention in December this year. Anna Bligh, ALP National President, made the announcement on 23 December 2010. All the other key players had been aligned before hand so they all made the right sort of noises, immediately after Anna Bligh’s announcement. NSW Labor Party has moved its Policy Convention forward in time so it can pass resolutions to support the policy change at the National Convention. It is inevitable Labor will dump its anti nuclear policy in December.

The real risk we face is about what Labor will change its policy to. Will it endorse polices and wording that lock us in to a high-cost nuclear regime (like USA, Canada, UK and Europe) or into a low-cost nuclear regime? If Labor says words to the effect “we’ll allow nuclear but we’ll ensure it will be the safest in the world and it must be world’s best practice” and all that sort of spin, then nuclear in Australia is doomed for at least another decade.

Somehow, an environmental NGO will be persuaded (bribed) to come on board and support Labor’s policy. Bit by bit, one or two others will change their policy too. That is all that is needed. The Greens and the rest can sing themselves to sleep or get overstressed and have a heart attack. Either way, they will become irrelevant, except they may seriously damage us by forcing us to go down the high cost route. This is what they want, and this is what a Carbon Tax or ETS will ensure happens.

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Pip,

You suggest that the coalition will not proceed first with a nuclear power policy, as it will be electoral suicide. It would be hard therefore to see why the ALP would decide it wouldn’t be. The key to breaking this dead-lock would be for The Greens to accept consideration of nuclear power.

It is electoral suicide for the Coalition to lead on nuclear. It is far too easy for Labor to run an anti-nuclear scare campaign. They have done this at every election since 1990. Even if Labor supported nuclear, it would be easy for them to say, “the Coalition stands for low cost and you cannot trust them to provide adequates safety”. The safety issue, if raised in an election campaign, is what will send us, irreversably, down the high cost route. We will not be able to undo that for a decades or more. We will be committed to the high cost nuclear option, which means it will be implemented only very slowly.

Only Labor can take the initiative. What enlightened voters should be doing now, IMO, is doing all we can to persuade the media, population and key players in the Labor party that there is a really big difference between allowing nuclear versus allowing and advocating low-cost nuclear. We must help them to understand the difference and go for the latter option: allow and advocate low cost nuclear

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I’m not sure that that (“only Labour can take the initiative”) is the only perspective Peter.

I hear what you are saying, but what the sensible political thing would be to say is “We support consideration of nuclear power and want to set up a Clean Energy Tribunal to report back to government with the best way forward.” I think DV82XL made a comment somewhere about the Civil Aviation Authority being a regulatory body that appears aligned to the industry not against it, which I thought was good. Such a ‘Tribunal’ would invite industry advocates, government and academics, I would hope.

Again, where this nuclear debate needs to happen is in the pages of the tabloids and mainstream media. Perceptions need to change. The ‘waste’ issue needs to be met. The Greens need to be seen on this issue as the cave man nay-saying cooking fires, because they are in fact the same as bushfires, etc etc, what is Huge Jackman doing ont his issue! Ha!

Pip

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Pip,

I don’t know wheter you read this in the links I provided, but I think it is worth posting it again here for those following this thread but not reading the links.

There is an alternative to putting a price on carbon. A much better alternative in my opinion. That is to remove all the impediments to low cost clean electricity.

Here are examples of impediments we should remove.

The sort of impediments and regulatory distortions to the market that are blocking nuclear in Australia are:

1. ban on nuclear power
2. high investor risk premium because of the politics
3. Renewable Energy Targets
4. Renewable Energy Certificates
5. Feed in Tariffs for renewables
6. Subsidies and tax advantages for renewable energy
7. Subsidies and tax advantages for fossil fuel electricity generators
8. subsidies for transmission and grid enhancements to support renewable energy
9. massive funding for research into renewable energy
10. massive subsidies for research into carbon capture and sequestration (CCS)
11. Guarantees that the government will carry the risk for any leakage from CCS
12. No equivalent guarantee for management of once used nuclear fuel
13. Massive subsidies and government facilitation for the gas industry, coal seam gas and coal to gas industries (despite the latter putting toxic chemicals into the ground water and the Great Artesian Basin water)
14. Fast tracking of the approvals process for wind power, solar power, gas industry, coal industry while nuclear industry remains banned from even fair comparative studies by Treasury, Productivity Commission, ABARE, Department of Climate change and more. We can just imagine what the approvals process would be like for a nuclear power plant!!

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Pip,

I think just about everyone on BNC agrees we need to popularise the debate. And everyone is doing the best they can using their own skills. And an enormous amount is being done. Did you look at the new thread just posted today. If you look through the comments it gives a clue to what people have been doing for quite some time.

The Coalition cannot lead this. Every time they do it leads to a negative campaign from Labor. The Liberals have been making comments that Labor needs to take another look at nuclear, and do it properly, but they cannot say any more than that or they get branded as pro-nuclear, and “would you want one in your back yard?”. Labor is the government, they are the ones with the anti-nuke policy and they are the ones that have opposed it for 40 years of more. It has to be Labor that leads off.

If you look back at some of the other links there is a lot about this on BNC already, but I am not going to try to find them now. I want to watch Aussie Kim win the tennis for Australia.

Yes, changing “renewables’ for ‘clean’ is what I proiposed in the lead article to “Alternative to the CPRS”. Please have a read of that lead article and the comments I linked to, otherwise I have to just keep repeating stuff. And, as I said in a previous comment, I’d suggest we should hold this discussion on the “Alternative to CPRS” thread.

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Gene,

It is not simply and interest rate. It is much more complicated than that.

EPRI, MIT, Chicago Unit, RAE, Frontier
and ACIL-Tasman (amongst others) explain the methods, assumptions and inputs they use.

Fontier:

Click to access Consultant%20Report%20-%20Frontier%20Economics%20-%20Methodology%20and%20Assumptions%20%202nd%20addendum%20-%20Review%20of%20regulated%20retail%20tariffs%20and%20charges%20for%20electricity%202010%20to%202013%20-%20WEBSITE%20DOCUMENT.PDF

ACIL Tasman:

Click to access 419-0035.pdf

ACIL Tasman’s inputs for calculating the Weighted Average Cost of Capital (WACC) are given in Table 2.4.2, p21.

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Hey Peter:

thanks for reposting your list of impediments to nuclear.

it is very useful.

can you refer me to some numbers for your items (subsidy, tax advantage, target, investor premium) where numbers are relevant?

Also, when david benson says above (for u.s.) that wind is cheaper than nuclear, I am not sure if he is disagreeing with the dominant analysis of wind on this site put forward by yourself, Barry and others.

what does cheaper mean? if it takes LCOE into account (even accepting u.s. regulatory ratcheting with nuclear), does it do so in hi penetration scenarios?

I don’t see how it could. Let us recall what Trainer says:

… it can be quite misleading to think in terms of the
levelised cost of electricity from specified renewable sources when estimating total system costs. Advocates of renewables typically do this, for instance claiming that the levelised cost of
wind power is comparable to that of coal fired power.

This might be so if lifetime outputs at average capacity are compared, but that overlooks the point stressed above that the crucial task is to
maintain the required level of output. Because there will be times when wind cannot contribute much and resort must be made to redundant plant, the cost of providing that plant needs to be somehow included in the cost of the wind sector. It is an essential
part of the wind sector if that sector is to be able to make its contribution continually, just as an emergency generator must be understood as part of the total energy supply cost of a hospital
(Lenzen, 2009 recognises this in passing).

The dumping issue similarly indirectly increases total system capital cost because it means that some of the generating capacity built supplies energy that is wasted, or stored inefficiently, meaning again that plant constructed has to be greater than the
amount that would meet demand if all its output could be used.

These problems could be reduced to the extent that some processes such as steel, cement and fertilizer production and freezer boosting could be carried out only when surpluses are available. There is some scope for this but the implications for intermittent operation of furnaces etc. are problematic.

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Greg Meyerson.

thanks for reposting your list of impediments to nuclear.
it is very useful.

So, now that you, and hopefully others, can see what you are missing by not going to the links I post, can I urge you to look again at the ones listed below? They explain some other impediments to nuclear not included in the list above and also explain how, by removing the most important impediments, we could get nuclear cheaper than coal in Australia – something Chris Uhlik, DV82XL and others believe is achievable. As DV82XL said in a previous post on this thread (when he was mad as hell with me) nearly all the impediments are caused by government. So they can be removed by government. Please read these links and try to put it together – like I have it all together, correctly, in my head :)

Subsidies that encourage fossil fuel use in Australia.

Click to access CR_2003_paper.pdf

Impediments to low-cost nuclear – Industrial Relations

Alternative to Carbon Pricing

Sovereign Risk – a major impediment to low cost nuclear

Alternative to Carbon Pricing

Alternative to Carbon Pricing

Nuclear cheaper than coal in Australia. How?

Alternative to Carbon Pricing

Just humour me for a while until I can get my message across, then we can argue about Carbon Price versus removing the impediments to low cost nuclear.

The next link is the “Terms of Reference” for a study I want the government to direct the Productivity Commissions to do as a first step, and BNCers to initiate here to help to get public awareness of the advantages of removing the impediments to low cost nuclear instead of imposing a carbon price.
Suggested Terms of Reference for a “Productivity Commission” Investigation into the impediments to low-cost nuclear

Alternative to Carbon Pricing

I believe that just going through this exercise would make the public much more aware of all the impediments we have imposed on nuclear and all the benefits of it in comparison with the default option, coal and gas. Just doing this study would help to get out to the public the sort of information that is in DV82XL’s thread and in the Barry Cohen chapter that Chris refers to upthread. Going through this process would be an excellent way to educate the public, in my opinion.

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Gregory Meyerson, on 30 January 2011 at 3:53 AM — Regarding solar,
“he who does not learn to store
shall have no power after four.”

Unfortunately, I don’t know a ditty which so cleverly points up the intermittency of wind. But one cannot have a merely windy grid unless you are willing to only have electricity when the wind doth blow; I know of two localities in Africa where that is the case.

Here in the Pacific Northwest we enjoy a massive supply of hydro (my power is 51% hydro generated). Hydro can be ideal for acting as the balancing agent for wind but there are limits. First, BPA (operator of most of the dams) stated that up to 20% (nameplate) wind was acceptable. But then the minimum stream flow requirements during spring runoff were increased to improve fingerling survival rates. This meant that BPA told the wind operators that BPA might shut them off at any time, but typically only during the spring runoff. This was sufficiently financially a disincentive that the next utility to the south, Pacificorp, in whose retail area most of the existing wind farms lie, purchased a 520 MW CCGT to backup the wind farms instead of having BPA do it.

So the next big increment of wind farms will go in even further south and rely on the CCGT for backup.

Oh well, when the wind blowth not at least no natgas is being burned.

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thanks david and peter:

I asked the question about wind because it wasn’t entirely clear, david, from your remarks up thread what you thought, and if there was a disagreement, I thought it might be a good idea to confront it.

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The thing that leaps out at me (haven’t read all comments so maybe this is made there) is the assumption that a cost that applies for doing something rarely (in this case, building “Areva EPR”, which apparently has had a doubling of cost announced in the last few days, maybe bad-luck on the blog writing timing) is the same cost that will apply when doing something on a huge scale (big enough to affect markets in steel, concrete, to a lesser extent energy, etc). If the change to nuclear is for the reasons of climate change (not, eg, an individual nations energy security) it needs at the least to be done over most of the world at current world energy use (if not at levels which are equitable energy usage worldwide) and done relatively quickly (say over 40 years). Unless huge numbers of other building projects are cut back whilst this is going on, I would expect a significant rise in the cost of commodities like steel, concrete, etc, rises in wages (due to a shortage of skilled staff), etc. There’ll certainly be some economies of scale and the fact that we’re starting from within a depressed world economy is marginally better than the highs in development of 4/5 years ago in pushing costs downwards,but I wouldn’t expect them to be big enough to significantly counteract these effects.

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