Open Thread 19

The previous Open Thread has gone past 650 comments, so it’s time for a fresh palette.

The Open Thread is a general discussion forum, where you can talk about whatever you like — there is nothing ‘off topic’ here — within reason. So get up on your soap box! The standard commenting rules of courtesy apply, and at the very least your chat should relate to the general content of this blog.

The sort of things that belong on this thread include general enquiries, soapbox philosophy, meandering trains of argument that move dynamically from one point of contention to another, and so on — as long as the comments adhere to the broad BNC themes of sustainable energy, climate change mitigation and policy, energy security, climate impacts, etc.

You can also find this thread by clicking on the Open Thread category on the cascading menu under the “Home” tab.


A conversation starter: I recently delivered a talk at the Australian National University (ANU) on nuclear energy and climate change. This was the Director’s Colloquium at the Research School of Physics and Engineering (I thank the staff for being such gracious hosts). Further details about the event can be found here.

What I particularly like about this recording is that the slideshow is matched to my speech, so apart from not seeing me (who needs to?), you feel like you are actually at the lecture.

Edit: A high resolution PDF of the slideshow can be downloaded here (6 MB file)

The talk goes for about 50 minutes (plus question time). I trust you will get some useful information out of it.


  1. With nuclear energy expected to cost around $173/MWh in Australia under a regulatory and political regime like those in the USA and Australia, nuclear will not be viable in Australia. According to this the CO2 price would have to reach around $100/tonne CO2 to make nuclear viable.

    There is not going to be any real progress in Australia on nuclear until we are prepared to look seriously at what is making nuclear in the western democracies around 2.5 times the cost of nuclear in Korea and other Asian nations (around $5800/kW projected price in USA and Australia versus $2300/kW in Korea )

    We need to analysis and find the reasons for excessively high cost, and then decide what if anything can be done to allow nuclear to be implemented in Australia at a cost similar to the cost in Korea.


  2. Peter Lang, on 15 October 2011 at 2:24 PM — Your costs for NPPs in the USA appears way off. The Summer Westinghouse AP-1000 justification documents give US$0.076/kWh.

    As I stated on the earlier Open Thread (but it seems you refused to look at), Australia would be well advised to look to the British regulatory scheme rathr than the sclerotic USA NRC.

    Finally, price is actually not the major issue as including the externalities for burning coal pushes coal far above any unbaised estimate for NPPs. The major issue is public acceptance; I opine (in a naive manner) than you’ll need about 75% voter acceptance before beinging able to move forward.


  3. How much money do you think could be saved by ‘piggybacking’ our regulatory regime on the NRC or other regulatory bodies by only accepting already licensed designs? That way only site planning and ongoing tasks like maintenance oversight would need to be funded.

    Alternatively, would it be possible to create institutions that exist outside of the political cycle and hence made immune to unnecessary ratcheting of regulations, without the problems regarding the lack of oversight?
    This might require a Government-Owned, Government-Operated nuclear power company, or perhaps an extra-legal commission. Any other ideas?


  4. Is anyone around here interested in the topic of how to get more efficient in advocating?

    If so, has anyone read Dale Carnegie “How to win friends and influence people” yet?

    Or any other suggestions on interesting material on that subject?

    I do recall a post and discussion thread at “Decarbonize SA” on the topic “Why pro-nuclear has failed when anti-nuclear has succeeded” in July.


  5. My fear with the Olympic Dam expansion is that piecemeal development will lock in certain configurations which could snooker desirable developments later. Recall the original specs were for 690 MWe additional power supply and 187 megalitres per day desalination. However future developments could include;

    Greater capacity and transmission The suggestion of an east-west HVDC link to unify the eastern and WA grids has been dismissed as pie-in-the-sky. However the SASDO2011 report has called for increased transmission for Eyre Peninsula (west of Pt Augusta) to export its prime wind power. I assume one day when subsidies are dropped there will still be a case for x% windpower in the grid. The bigger question for SA is replacing 2 GW generation capacity now provided by Leigh Ck coal and Cooper Basin gas but both fading fast. New capacity is needed not only for OD but the State as a whole.

    Regional water supply Up to 66 GL/y is now pumped from the River Murray to Pt Augusta, Woomera (70km from OD), Whyalla and Pt Lincoln. It would be good to retire that network to conserve river flow. In addition Ceduna just outside the network will grow with the zircon shipping industry and the town is looking at costly solar desal. Several prospective uranium mines near OD such as Carapateena will also need water supply. BHP are facing a PR disaster if they persist with the intended Whyalla desal which has marine conservation issues and poor salinity dispersal. Note that is still 320 km from OD. It’s not only the wrong place but may be too small.

    Uranium enrichment and thorium Enrichment has been put forward as a new industry by SA Mines Minister Tom Koutsantonis. One ISL mine wants to make uranium fluoride not oxide on site. I don’t know what amounts are anticipated or whether it might use gas centrifuges or the Silex laser process. I’ll assume whatever form it takes will need tens of MW power supply. If NP is viable the question becomes whether CANDU reactors get preference or a type that needs imported enriched uranium. A related issue is thorium oxide production in association with rare earths, sources being OD tailings and the proposed Whyalla plant that will use ore railed from the NT.

    Therefore before any major works are started a longer term ‘big picture’ plan should be sketched. It would be stupid to do X then a short time later say we should have done Y.


  6. Barry,

    Excellent presentation. And good answer to first question.

    About half way through the presentation you discussed likely timeframe until SMR’s are commercially available. You mentioned 2025 to 2030. You also mentioned that Australia might wait and start with SMR’s. I’d suggest Australia should not try to be at the front of proving the commercial scale prototypes. We’d want to wait until the particular design we intend to adopt is proven commercially viable at commercial scale. Realistically, that might be around 2030 to 2035. So, if we are going to wait for commercially proven SMR’s we are delaying the start of nuclear in Australia until around 2030 to 2035.

    I agree this time scale is likely for Australia to go nuclear given the strong public and political resistance to nuclear in Australia and the political opportunism in advocating anti-nuclear policy. We’ve lost 5 years since the UMPNE report put nuclear firmly on the table in 2006 and it was rejected by the electorate at the 2007 election. I expect the recent developments (legislating CO2 Tax and ETS) have delayed serious consideration by at least another 5 years, probably longer. The obvious reluctance to debating what are the impediments to low cost nuclear in Australia, even amongst nuclear advocates who contribute to BNC, is a clear sign of how strong the opposition is to even consider this issue.


  7. Looking at this:
    It would seem gas is likely to become our main source of electricity generation for quite a long time. The CO2 tax and ETS assures that gas is likely to be the direction we will take, along with continuing subsidies for renewables to give politicians nice photo opportunities. Nuclear will not be viable for a very long time – given we are not even prepared to debate what is making the authoritative estimates of its cost much more expensive in Australia than in Korea.


  8. @ Peter Lang, on 15 October 2011 at 2:24 PM:
    Have we not been through this study before? The LCOE mid-range comparison figures for nuclear and pulverised black coal plus CCS indicates a difference of about $20/MWh. this is after assuming CCS efficiency of 85% or whatever, ie carbon emission intensity of about 80kg/MWh.

    To close this gap, a carbon price of $200 plus is indeed needed, so I agree with your statement of relative cost, but so what? If I take a load of solid waste to the local municipal tip the current dumping fee is $150 per tonne, and that material is not of a kind which would damage the biosphere for ever. A CO2 cost of $150 or even double that is generous by comparison.

    However, considering the damage to the biosphere from CO2 emissions is only part of the difference.

    I am personally at ease with suggestions that the particulate and other emissions of coal fired power are damaging the economic commons and thus that it appropriate for this damage to be reduced via a dumping fee.

    Perhaps a more appropriate response, from a community acceptance point of view, is to agitate for outlawing of construction of new electrical generation capacity using technologies which do more damage to the economic commons than other available technologies.

    That would show nuclear in an entirely different light.

    Regarding the difference in overnight capital cost of NPP’s in USA Vs other places around the globe, we have all had this discussion before. The US clearly are way out of step with the rest of the world when it comes to nuclear plant regulation.

    A public campaign to ensure that the best of comparable approval and supervision environments is appropriate and overdue. Assumptions that the US experience will be repeated in Australia are dangerous, expensive and just plain wrong when there are other examples to consider, amongst them being the British and the French. EPRI made a bad call by using US costs and excluding consideration of better alternative experience worldwide – I’m sure that this was stated on BNC about a year back.

    Perhaps the government, in its wisdom, guided this decision – it is not clear from the report, which I have commenced re-reading. If so, the government was just plain wrong.

    In summary:
    1. $200 dollar carbon prices don’t worry me if that it what it will take to reduce global CO2 emissions. Australia cannot afford to unilaterally adopt this figure, but we must start somewhere. The current federal legislation appears to be a reasonable starting point.

    2. Reported NPP overnight construction costs do appear excessive and unjustifiable in a global context. I suspect that the then Rudd Government may have influenced this decision, in order to ensure that nuclear options didn’t come out a street ahead of the peleton.

    3. The much talked about difference in regulatory environments in, for example, France, Great Britain, USA and Australia are overdue for exposure, analysis and discussion, because this remains very poorly understood by the public, the majority of whom don’t appear to be aware of the comparative costs and benefits attached to this issue. $20/MWh would make a difference to the rank order of baseload power options.

    Can you point us to such a study?


  9. On Australian nuclear costs I seem to recall a high weighted cost of capital heavily inflated that cost. Federal loan guarantees or direct low interest loans could bring that right down. For example failed US solar company Solyndra got half a billion at 4.1% pa
    I wouldn’t speculate on the levelised cost of coal with carbon capture since I doubt it will ever happen.

    If gas is the baseload fuel of the future how come the Vics aren’t taking up the offer of Federal money?


  10. John Bennetts,

    The government’s figures for the LCOE difference between pulverised coal (without CCS) and nuclar is $95/MWh not $20/MWh (see table 10-4 and 10-13 here:
    Forget CCS, it is a fantasy at this stage.

    The remainder of your comments suggests you may have missed the whole discussion starting here:


  11. No, Peter L: I have not considered coal without CCS for years. Not that I consider CCS to be a mature technology, but that’s another issue altogether. That is why I was referring to {pulverised black coal plus CCS}. That is why I used the figures relevant to that. The reported differential is about $20/MWh. Don’t even think of vandalising my world with non-CCS comparisons or more non-CCS power stations. That implies rejection of the science relating to climate change and this is certainly not the place or the time to do such a thing.

    Pulverised coal power stations have been around for more than a century. They are 1800’s technology with 1900’s control systems. There is no reason to adopt them as the base line.


  12. This is my explanation of why we’ve lost five years so far and at least another five years, probably more.

    We are clearly not ready to debate or look into why nuclear is much more expensive in the western democracies than in Korea and other Asian countries. We’re in denial.

    We’ve lost 5 years since the Howard government proposed allowing nuclear power in Australia as an important way to reduce emissions at least cost. Labor ran a strong anti-nuclear campaign leading up the 2007 election and won Government.

    Labor will probably remain opposed to nuclear power because they fear a large proportion of their supporters would vote Greens if Labor dumped their anti-nuclear policy.

    Therefore, we are at least three elections away from when a Coalition government may be prepared to reintroduce nuclear to the electorate. And it could only do so if Labor was weak at the time or Labor dumped its anti-nuke policy.

    Why three elections way. The Coalition cannot offer nuclear as a policy at the next election because Labor, with the benefits of incumbency, will run a massive scare campaign against it. There is no way the Coalition will introduce it at the next election.

    The following election may have to be a double dissolution election to remove the Greens control of the senate. That election will be to get a mandate for the bills that have been put forward by the Coalition and rejected twice by the Senate. They will include repealing the CO2 Tax and ETS legislation and reinstating the border controls that this government dismantled, amongst others. So nuclear will definitely not be put forward as a policy at that election.

    At the third election, if the Coalition is in a strong position, and nuclear looks like a cheaper option than gas at that time, then it may risk putting it forward. But that is probably around 2017. Who knows what will; be the situation by then.


  13. John B, you may want to consider a non existent technology as an option but I am not doing that. You can let your beliefs run your analyisis, but that is not rational. CCS has not been proven to be economically viable at the scale that will be needed any more than geothermal, solar or wind. They are all a dream. So I do not deal with CCS at all. The options are coal (without CCS), gas (without CCS) gas and renewables, or nuclear.

    According to the most recent figures for Australia, we’d need to increase the LCOE of our baseload electricity generators by around $140/MWh compared with current coal generators, $95/MWh compared with new coal (no CCS) or $76/MWh compared with new CCGT (no CCS).

    Any of those cost increases are unacceptable.


  14. I have no qualifications to argue the merits of potential base load power sources. However, every three months I get a power bill that tells me how much Carbon Dioxide I’ve put into the atmosphere. Nuclear power doesn’t do that.

    Whenever I mention this to friends, they talk about Chernobyl, Three Mile Island and Fukushima. Most are resistant to facts; there is a common belief that thousands of people died in each of these events.

    Personally, I’d prefer a nuclear plant in every State, honesty and no CO2…


  15. Hi, Peter.

    I did not say that CCS is proven, workable or available.

    I did say that, without CCS, coal is terrible and must be penalised in accordance with the damage it does to our climate and our environment. New PF coal should be outlawed, QED. CF Bayswater B planning approval – the only technologies permitted are gas and “CCS ready Coal”, ie not coal. To weigh up anything against coal is to accept that 1900’s standards are still OK.

    Demonstrably, they are not.

    Generation options scenarios must exclude pulverised coal as an option. The comparison is between baseload coal (impossible, because 85+% CCS is not yet possible), gas in various ways, but with CCS (again, not possible), and nuclear, in its several forms.

    The 2007-09 Labor government appears to have steered the discussion away from nuclear at competitive world prices in order to tilt the scales strongly in favour of wind and sunlight. If you favour considering base load power from fossil fuels without consideration of the unacceptable handicaps that these fuels, then you steer towards coal/oil/gas to the detriment of nuclear… ie, to argue for a carbon-impaired world and against an energy rich low carbon future. That, I will not do.

    Anything further about the real differences between France, GB and USA regulation of nuclear power and the lessons for Australian regulators?


  16. I’m at a loss to explain what happened here;

    A number of times I was targeted for supposedly making unsupported claims about the performance of Areva equipment.

    For some reason John Bennetts is able to imply the performance must be in the negative because “he was in the control room”, (producing no data himself, BTW), but I am not allowed say that we have a long term data set from Kimberlina (and less-so from Liddell – different generation).

    The only argument can be that both are assertions. OK, I concede the point. What gives??

    The strongest remark I think I have made is that the Areva/Ausra tech onsite at Kimberlina works as advertised. Areva back it, UQ will review it for Solar Dawn. I can’t offer anything further than that. Is one required to break legal agreements for commercial products to argue on BNC when that is not material to what I was saying?

    I’d invite John Bennetts to email me directly (if that were possible somehow). Both Ben Heard and Barry Brook have my email address if needed.
    John Bennetts remark was a personal opinion on the Open Thread which is allowed on BNC without references. Your comment stated that you had a scientific data set and therefore, even on the OT, you should back that up with a link to the precise information.


  17. An update to my comment here; regarding the burning of 660,000ha of grass.

    My office received a response from the WA Environment Minister Bill Marmion which says in part;

    “The Department of Environment and Conservation calculates the greenhouse gas emissions from it’s prescribed burns at the end of each financial year … from biomass burning including methane, nitrous oxide and indirect greenhouse gases.”

    then basically a list of reasons why they were doing it and then finally

    “Carbon dioxide emissions are not included in the calculation as no net carbon dioxide is emitted. This is based on the assumption that an equal amount of carbon dioxide is taken out of the atmosphere through vegetation growth as is emitted through combustion in these areas.”

    My question specifically asked if the relative releases of burning compared to decomposition were calculated.


  18. (Comment deleted.)
    The dangers, environmental disruption, eons long waste storage and weapons production potential brought by nuclear are a detriment to man. Nuclear energy is not a consideration in any serious effort to develop environmentally sound energy policy.
    BNC no longer posts comments denying the scietific consensus af AGW. To remind all readers of Barry’s position:

    The working context in which BNC is embedded is that climate change is a critical problem to solve. The motivation for the blog (henceforth) is to seek the most effective solutions and discuss the pros/cons. If you are a climate change sceptic (or whatever), you are welcome to comment on the relative veracity of the proposed solutions (or even argue that none of them are suitable, if you can put a coherent case). But this is not the place to debate the whole “Is it? Isn’t it? … happening “space. We’ve moved on from that. If such dialogue entertains you, then there are plenty of other places on the ‘net to engage in this ‘repartee’ to your heart’s content. BNC is now principally a place to discuss the options for moving away from fossil fuels, and when there are posts on climate change, they will be about updates to the science.

    please stick to the comments policy as stated. Your comment re nuclear is a personal opinion and as such is allowed to stand on the Open Thread even though you supply no evidence or references.


  19. Peter Lang, on 15 October 2011 at 2:24 PM said:

    According to this the CO2 price would have to reach around $100/tonne CO2 to make nuclear viable.

    Exelon’s generation mix is 93% nuclear.

    Exelon operates in Illinois, New Jersey and Pennsylvania.
    The population trends in those states are flat with little or no potential for growth(internal migration in the US is southward).

    Nuclear is 48% of the mix in Illinois, 50% in New Jersey and 34% in Pennsylvania.

    More nuclear in Exelon’s primary markets leaves them with the French problem…what to do with excess off peak capacity.

    The cost effectiveness of any technology in any market is based on conditions in those markets. LCOE is merely a ‘starting point’. Exelon would need a $100/ton CO2 tax before they would invest in new nuclear in their markets based on their market conditions.

    South Carolina Electric and Gas is building two AP1000’s with or without loan guarantee’s based on market conditions.

    Same country as Exelon but with different regional load profiles

    As to the broader question as to why nuclear is more expensive in Western countries I’m not sure that is the case when adjusted for wage rates. FOAK is clearly more expensive.

    The Kepco quote for UAE was based on 4 units at a single site.

    In the case of an AP1000 reactor a ‘one of a kind’ crane is used for assembly. There is also an on site fabrication building. Those are outlays where the cost is the same whether you are building 1 or 4 units.


  20. I am increasingly of the opinion that facts and argument are not particularly relevant factors in electricity policy – in most jurisdictions. If the concern is to return to a rational, scientific, basis for policy, I think this is what needs to be addressed. Without this, the dollars and cents, engineering and technological questions, aren’t going anywhere.
    I would avoid the same vernacular as the fortune teller/renewable seller type with a world-view that Michael Lind is not without justification in calling Green Malthusianism.
    The language that sent me searching through my old religion and philosophy concepts is the visionary language, particularly among proponents of FiT programs – which fund technologies that are seen to be the future, despite the facts the sources have been demonstrably ineffectual in reducing overall emissions anywhere they have been implemented. Monbiot’s questioning of whether the goal is reducing emissions or building wind and solar capacity must almost universally be answered, honestly, as increasing solar and wind.
    The substitution of IWTs and PV panels, for carbon reductions, necessitated Germany’s removal of nuclear capacity earlier this year – because nuclear capacity is almost universally operated as baseload and renewables don’t fit with baseload sources. It’s important to confine the cultists that ignore the facts surrounding renewables by focusing on a total energy system.
    To that end, I’ll reference a recent MIT Centre for Advanced Nuclear Energy Systems article feuturing a very interesting approach to calculating storage needs under extreme (singe source) scenarios –
    This approach – to energy, not only electricity – seems to me more appealing. It also provides a rare vision of a largely emissions-free economy.
    Conversely, Forsberg’s reference on fuel from natural gas (Shell’s Pearl plant) should serve as a reminder to those pumping more renewables backed by more natural gas capacity, that gas prices are unlikely to stay decoupled from oil prices.


  21. Alister,

    It’s good to have people point out the reactions of people in the community to mention of nuclear. You said, in your last sentence:

    Personally, I’d prefer a nuclear plant in every State, honesty and no CO2…

    I would too. But only if we can have it at a cost that is competitive with coal. That is clearly not the case at the moment. It’s not even close and not likely to be for a very long time. I’ve changed my tune recently. I now recognise it is not close to being competitive for Australia, and the denial of that fact by the nuclear supporters on this web site has reinforced for me that there is no hope of us tackling the underlying problems that make it too expensive. For 2 years I’ve been trying to get people on BNC to engage in discussing and identifying the factors that are making nuclear too expensive for Australia. The next step would be to identify which of these factors could be removed, how and on what time scale. It is clear, this opens up politically divisive issues and people just don’t want to go near this. Many of the beliefs that the Left hold dear would have to be challenged. It’s too hard.

    I said, I want nuclear but only if it is competitive with coal. What I mean by this is, given the best long term projections, new nuclear plants would give us electricity cheaper than coal over the life of the plant. I advocate including the externalities where there is a overall benefit to doing so. It has to be pragmatic. I do not believe CO2 Tax or ETS is an appropriate way to internalise the damage costs of CO2-e in the absence of an international agreement. As far as I am concerned the selection of the CO2 price is purely political and is totally out of balance with other even more important externalities that have to be dealt with too. I am strongly opposed to the CO2 Tax and ETS. I’ve laid out my reasons here in my submission to the “Joint Select Committee on Australia’s Clean Energy Future Legislation” here and in subsequent comments.


  22. There are two main reason why I now believe nuclear will off the political agenda for Australia for at least another five years and probably longer.

    1. it is not economically viable
    2. political realities

    Economics: The most recent authoritative estimates of the capital cost for nuclear in Australia is about $5,800/MWh. That is consistent with authoritative, impartial, figures in the USA. This shows that currently Exelon would need a CO2 price of about $100/tonne CO2 to make new nuclear viable in its region in the USA. The CO2 price needed to make new nuclear viable for Exelon has increased from about $45/t in 2008 to $100/t in 2010. The two main reasons are the price of gas has fallen considerably and projected demand growth has fallen. The development of coal seam gas in Australia will also probably give gas more advantage over nuclear than was the case in previous reports, such as the ACIL-Tasman (2009) report. It is pretty clear that nuclear will not be an economically viable option in Australia for a very long time. Perhaps not until Small Modular Reactors are proven to be commercially viable. This may be around 2030 to 2035. Until then I expect we may remain with coal and gas with some demonstration projects for solar, wind, geothermal and CCS.

    Politics: nuclear cannot be offered to the community while the political parties with anti-nuclear policies have control of the Senate. The anti-nuclear parties will have control of the Senate until 2017 at the earliest unless there is a double dissolution election. If there is a double dissolution election, the anti-nuke parties may lose control of the Senate, but it will still be another three years, at least, until a major party would take a pro-nuclear proposal to the electorate. That would still be around 2017 or later The anti-nuclear parties are not likely to change their policy to pro-nuclear because anti-nuclear scaremongering is a sure election winner in Australia. Any party running an anti-nuclear scare campaign will win every time. It’s far too enticing to give up this electoral advantage.


  23. If the NSW political landscape requires that new Hunter Valley baseload stations are either coal seam gas or CCS ready coal then they are well into the realms of fantasy. I see there is a proposal that makes it OK to drill for CSG on prime farmland if there is an ‘offset’ property just as good but undrilled
    Somehow this guarantees no loss of farm output which they will have to explain. Therefore we have
    1st fantasy – coal will be OK if it is ‘CCS ready’
    2nd fantasy – CSG doesn’t hurt farming because there are other farms.


  24. Fine, ignore the externalities associated with burning coal; I’m sure the grave diggers will appreciate the extra income.

    As for small nuclear reactors (SMRs), there are two Gen III designs and two Gen IV designs currently moving towards commericialization in the USA. The smallest is the Nuscale 45 MWe unit. This should receive its NRC type license in 2018 CE; I predict several untilities in the USA will immediately begin constructing these, partly becuase of flexibility and partly becuase of assuredly lower overnight capital costs. The other is the B&W (rather larger) offereing; as TVA has expressed serious interest in acuiring about a half dozen of these units I suspect it’ll be next to receive NRC type approval.

    The two Gen IV projects are in an unfortunate on-again, off-agin mode (as best as I can determine). One is the Hyperion unit which is somewhat similar to a design which the Russians will soon commercialize in larger sized offerings. The Hyperion unit will have a role to play but probably not for utility scale power. The other is the GE Hitachi PRISM about which I have no opinion regarding commercial success.

    But as for pricing, it is clear that building the heavy civil components for the Westinghouse Ap-1000 in a factory in Liverpool will lower the construction cost; so much so that if these units are ever built in Australia it will still probably pay to have the heavy components constructed in Liverpool and shipped to the sites in Australia. But it is even clearer that the Nuscale unit will be have significantly lower construction cost than the Westinghouse AP-1000. Probably more expensive that the (correctly adjusted) cost of US$2250/kW for the Gen II+ CPR-1000 by quite a bit, but less than the US$3900/kW for the Westinghouse AP-1000s being built entirely on-site in the USA.

    In summary, I now hold (along with DV82XL) that price is not the issue. Convincing the public is. This includes talking about the relative health risks of burning stuff versus fissioning stuff.


  25. Peter Lang, on 16 October 2011 at 9:31 AM said:

    For 2 years I’ve been trying to get people on BNC to engage in discussing and identifying the factors that are making nuclear too expensive for Australia.

    #1 Regulatory risk – if there was an Australian authority they wouldn’t approve an American reactor that wasn’t approved in America – at least approved in America part seems to have been resolved
    #2 Construction risk – the French reactor in Finland is badly over budget…the French claim it’s FOAK issues and the Finnnish regulator…who knows the truth…until one is built on budget no one is going to buy one…The AP1000 hasn’t been built in a Western’s too early to tell if the ‘sales brochure’ of ‘on time, on budget’ construction for the AP1000 is just ‘salesmen talk’ or reality

    #3 Demand Risk – Has to be able to compete on price to guarantee it can sell 90% of it’s power at a profit.

    All three risks affect financing rates…financing rates effect the price that one has to charge for electricity which effects demand risk.

    Here is the actual budget for VC Summer #2 and #3. They’ve sunk $1 billion so far and they are mostly ‘on time and on budget’.

    Click to access 2011Q2BLRAReport.pdf


  26. It was an excellent presentation. Barry is a very good speaker.

    I liked the plot of the build out in France nuclear. Totally a great investment and I am glad they were smart enough not to change directions.

    My hope is that the Chinese will get smart right up front ( they probably are already) and do tons of nukes since they do them for around half or more below US price. It is the best way and the Chinese govnmnt can do it..



  27. The Westinghouse AP-1000s under construction in China are on time and slightly under budget according to the press releases reworked by World Nuclear News. The version of the AP-1000 for the four almost-under-construction (the contract for the transformers has been let) in the USA has a slightly more expensive civil structure component (at NRC demand) but that should not effect the construction schedule.


  28. @ Peter Lang, on 16 October 2011 at 10:05 AM:

    Yes, I saw, read and digested the referenced comments and the paper to which they refer.

    If, as appears very probable, regulatory issues are making one technology more expensive that it should be wrt other technologies and nations, then we are probably in agreement that these must be highlighted in a way that will help our political masters to avoid falling into the high cost trap and adopt the lower compliance costs of other comparable countries, whilst still achieving satisfactory physical, financial and social outcomes in matters such as land use planning, plant safety, community safety, community health, environmental impact, national security, security of supply, external costs (eg transmission systems), fair scheduling of individual generating units and technologies, firness of tariffs, including feed-in tarrifs, existence and effects of REC’s and similar, costs passed to other generators, equity and magnitude of government subsidies, if any… the list is considerable.

    Hence my interest in France and the UK and perhaps other western nations’ nuclear regulatory regimes within the broader perspective of their national energy market.

    I have seen assertions and broad comparisons. I wonder whether there is, out there somewhere, more specific analysis of just what has worked best and what has not. If our politicians are unaware of what best practice regulation looks like, how can they possibly achieve an optimal outcome? Has AEMO, for example, produced anything of value here?


  29. Harrywr2,

    It’s good to see someone make at least an opening comment on this long avoided issue.

    However, it needs much more than an opening, high level comment. It needs in depth discussions to identify the actual factors, what is their impact, which could be addressed, how could they be rectified, what is the priority order, and how long would it take.

    If you are serious, and some others also want to get into this issue, then perhaps you and others could suggest to Barry there is enough interest to run a separate thread on this issue.

    I’ve made many comments on this in the past, but they have generally drawn little or no response. Largely they’ve been ignored or there has been some sort of high-level motherhood statement. But no attempt to take a serious look into this.

    I’ve summarised some of my previous comments, and included links to some of the most significant earlier comments, here:

    I’d urge you and others too look at that if you are genuinely interested in following through on this.


  30. The Mojave solar project is a conjunction of the best solar resource on the planet, good proximity to demand centres, a solar resource that correlates reasonably well with the load, access to important lessons from previous projects, and a Californian 20% renewable energy target, or in other words, to quote from Top Gun “It doesn’t get any better than this Maverick”. It recently received a $1.2B loan guarantee. The renewable energy power purchase agreement between PG&E and Mojave Solar remains confidential.

    Total cost US$1.6 B
    Capacity 250 MW (no storage)
    Cost US$ 6,400/kW (compare around $665 to $1,000/kW for obvious competitor – GT)
    Capacity factor 28%
    Jobs created 900 ($1.8M per job)

    Click to access ELEC_3876-E.pdf

    But despite the conjunction of ideal circumstances, the California Public Utilities Commission stated

    For all the strengths underlying the Mojave Solar project, it has one significant weakness – the cost. Information provided by PG&E shows that this contract is significantly more costly than other procurement opportunities available to PG&E.

    The Mojave project highlights both the strengths of solar thermal in locations where it is best suited and going to have its best chance of success, to the harsh reality that no matter how hard you try, there is never going to be a cheap way to install hundreds of thousands of mirrors (or millions) over 1,765 acres, with an energy source that is only available a quarter of the time.


  31. Only 496 signatures on the petition with less than two weeks left. Not looking good. At this rate, only about a thousand will have signed by the deadline.

    [nonsense regarding Fukushima and Tokyo deleted]


  32. Graham Palmer wrote:

    The Mojave solar project is a conjunction of the best solar resource on the planet, good proximity to demand centres, a solar resource that correlates reasonably well with the load, access to important lessons from previous projects, and a Californian 20% renewable energy target …

    Jobs created 900 ($1.8M per job)

    Let’s work on this a little more. Three sources: NREL and BLM fact sheets, and Marketwatch news story. 830 temporary construction jobs for a period of some 1.5 years is 1200 construction job years (as reported by NREL). Project will also create 80 annual O&M jobs and has a power purchase agreement for 25 years (so that’s another 2000 job years). Lastly, project will also create “over a thousand direct and indirect service and manufacturing jobs throughout the supply chain that will span the country” (for another 1500 direct and indirect construction job years at the low end). Using total capital expense for the project ($1.6 billion), that comes to some $340,000/job (or $500,000/job if we exclude direct and indirect supply chain). I went looking for Office of Management and Budget (OMB) scorecard for the loan guarantee, but could find none in a quick search. OMB is an independent agency within the US Gov, and would provide a full accounting of projected job creation, cost breakdown, capital expenses, operation of plant and contribution to local tax base, and stuff like that.

    This appears to be on par for what I get for Calvert Cliffs (doing a rough approximation). $9.6 billion for 1,600 MW power plant ($6,000/kW capital cost), 4,000 short lived construction jobs (no accounting for job years provided), 360 permanent jobs (at 14,400 job years), or roughly $522,000/job (excluding supply chain jobs). Anybody else have a better source for nuclear and projected cost of job creation?


  33. EL, agree that the figure for “cost per job” is a grey area my back-of-the-envelope figure was simply to imply that despite such a large investment, so few jobs would be created. But the point more generally is to what extent expensive, low-intensity, energy reduces productivity, thereby destroying jobs, in which cheaper, more effective alternatives exist.

    To understand the fallacy of the government creating
    green jobs through subsidies and regulations, we have to refer to the writing of French economist Frédéric Bastiat. Back in 1850, Bastiat explained the fallacy that underlies such thinking in an essay about the unseen costs of such efforts. He called it the “broken window” fallacy.

    In other words, for the same money, why couldn’t California employ 5000 people to dig, then re-fill holes for 10 years on a wage of $30K, and wouldn’t this also create employment? What would the net benefit be to Californian by investing in the Mojave plant relative to installing the most cost-effective technology available, and is this investment really the optimum use of a scarce resource? How does this compare with R&D investment etc?


  34. EL, agree that the question of “how much employment does a nuclear build create?” is an interesting question, but perhaps misses the point. We don’t build a power station to create some jobs in construction, but to produce an essential commodity that permits society to function, and to hopefully sell the product into a market at sufficient profit to stay in business.


  35. The latest weasel word appears to be ‘biobanking’ when you politely refrain from drilling or mining good farmland to leave some for later. Perhaps we should wait for ‘exobanking’ so if Earth’s CO2 gets too high but some other planet reduces CO2 all will be well. If Australia truly had 180 years of coal left surely they wouldn’t need to dig up or drill prime farmland as there would be plenty of other sites. Therefore I think coal could get expensive with or without carbon tax. That may gazump those other weasel words ‘carbon capture ready’.

    On gas for future baseload or to shadow mandated subsidised wind power I suspect really only WA and Qld have the long term gas supply. Both States appear hellbent on selling it overseas. Absent new pipelines I wonder if LNG tanker ships could sail around the coastline to deliver gas to Australian coastal cities in competition with Japan for example. Can’t happen? I wonder if that is another reason for Adelaide’s Torrens Island station building cryogenic storage tanks.


  36. Sadly, what I said about Tokyo is true. Many have already evacuated, to other parts of Asia, such as Vietnam. Northern parts of the city have higher radiation levels than Chernobyl evacuation zones:

    Not that this means we shouldn’t pursue IFRs, which don’t rely upon diesel for cooling. If IFRs were used, none of this would have happened. It boggles the mind that LWRs are still the design most commonly proposed, especially since there isn’t enough uranium for those reactors, with Megatons to Megawatts ending in 2013. This is LWR “lock-in,” like how we still use the qwerty keyboard to type. The qwerty board was invented by the typewriter’s inventor to purposefully be as difficult to type with as possible to avoid keyboard jamming. However, because this is the type we learned, we may be stuck with this keyboard forever! LWR was developed first for naval propulsion because of its compactness, and now LWR “lock in” will be difficult to avoid. Maybe we should just totally give up on LWR.


  37. “George”, your link to that blog of anti-nuclear activist Alexander Higgins is hardly reliable. Do you have a link to a reputable analysis (e.g. from NISA or IAEA), or evidence that anyone in Tokyo is taking this seriously? I’d strongly encourage you to be more critical in your evaluation of your sources — remember this classic xkcd cartoon:
    Check your sources carefully!
    Most things you find on the internet are… wrong.


  38. Any thoughts on this?

    Also, with regard to demand risk I would suggest that people look at the demand pattern in a place with a very large baseload proportion like Victoria (due to the Latrobe Valley power stations).
    From the look of daily demand data from AEMO (source: ) you could easily integrate about 5 GW of baseload nuclear power into the Victorian section of the NEM grid without significant problems (siting and transmission requirements excluded), possibly another 3 GW more if there were appropriate off-peak storage system built and load-following built into the plants. That’s a lot of displaced coal.

    If you built two dual-reactor AP-1000 plants at the same time you could replace Hazelwood, Yallourn and Loy-Yang A. That cost is about $10-$15 Billion for the plants themselves.

    My question is this: How much solar power at today’s prices could be built for that cost in terms of average output? Answer should be in terms of capacity factor * peak output if possible.


  39. Harrywr2 @ 16 October 2011 at 10:26 AM

    Thank you for this link to the budget and June 2011 progress report for the VC Summer #2 and #3. . I did read it when you posted it; apologies for not saying so at the time.

    It is an interesting status report. Following are my comments:

    1. EPRI (2010) estimates the Total Plant Cost would be $5,742/kW (in 2009 AUD$/kW sent out) for new nuclear in Australia. The estimating assumptions are in Section 4. For comparison, the VC Summer #2 and #3 budget in the link you provided is US$5,371 for 2,200 MW, or $2,441/kW (in 2011 USD). What is the reason for the large difference? I’d suggest we need to understand what is causing this difference. The EPRI figures are what the Australian government is using. If we think they are wrong, we’d need to be able to demonstrate what is wrong with EPRI’s assumptions.

    2. This says: combined priced tag for the project is $9.8 billion.”. What does this figure include that the $5.371 billion figure does not? Which is the correct figure to compare withy the EPRI projection for Australia and why? (The $9.8 billion is $4,455/kW.)

    3. Appendix 1 says “Based on April 1, 2009 Performance Measurement Baseline Schedule”. This is a give way the project is using Earned Value Management (EVM) (or Earned Value Performance Measurement (EVPM)) method for reporting project status, project performance and Estimate at Completion. The EVPM method maximise the probability of bringing large projects in on budget and schedule and of minimising cost blowouts. It is interesting and revealing that Australia’s largest public funded project, the $50 billion National Broadband Network (NBN) (now projected to be $78 billion), is not required to use EVPM.


  40. Will there are no signs Victoria is considering any large scale generation except brown coal. The Morwell MW gasified brown coal + natgas hybrid plant won’t replace any large units. If I recall Hazelwood is due to retire in 2031 but amazingly the owners accept that it is a dinosaur. The Federal fund for converting 2000 MW of brown coal to something else seems to have only one taker far and that’s the small Playford plant in SA to be replaced by a solar boost system to the newer coal plant next door.

    Carbon tax should add about 1.35 X 2.3 = 3.1c per kwh to Victorian power bills. I wonder if the plan is to chuck a wobbly this time next year about the hardship on working families and get some kind of reprieve, eg to NSW black coal levels of tax . Loy Yang A is also the land node for the Basslink cable which aims to ‘drought proof’ Tasmania through dry spells. If Vic gas isn’t plentiful enough to replace coal the politically expedient approach would be to keep burning brown coal with a partial carbon tax exemption. That way a decision on brown coal replacement can be postponed for a decade. I’d almost bet on it.


  41. John Newlands:

    To say that Hazelwood is due to retire in 2031 is to torture the meaning of the phrase “due to retire”.

    Constructed in the 1960’s and designed for a life of 25 years, it has had more life extensions than enough. It is now comparable to a human being approaching his 140th birthday after several lots of open heart surgery, with new hips, eyes and knees, blind and deaf, requiring daily dialysis and more, saying that he must have his driver’s licence re-issued, because he isn’t due to retire for another decade.


    It’s long past time for the old dear to be put out of its misery. Posturing about the lost value of a couple of decades’ imaginary generation at Hazelwood is just window-dressing by owners seeking an extortionate price.


  42. Peter Lang, on 17 October 2011 at 12:28 PM — My understanding (such as it is) is that US$4455/kW buys one all the planning and permitting costs, plus the interest forward to NPP completion for that, all the site purchase and preparation costs, plus the interest forward to NPP completion for that, plus actual construction costs, plus the interest forward to NPP completion on that. So these various financing costs of engineering planning, permitting and site prepartion (ppp), instead of being expensed against current operations, end up boosting the eventual cost of the NPP quite a bit. Not all state utility commissions in the USA require this form of bookkeeping; some allow ‘reasonable’ ppp costs against current revenues. I hope I’ve said that properly and clearly, not being well versed in these matters yet.


  43. It’s pretty obvious that the plans are for the Latrobe Valley to convert to IDGC possibly with CCS, which in all likelihood will simply be a politically astute way of burning gas whilst subsidising the Latrobe Valley.

    Hazelwood will probably go on the Australian Government’s conversion list along with Playford in all likelihood. The HRL prototype plant is up in the air due to funding concerns. If that doesn’t go ahead then they’ll probably build a CCGT plant to partially replace Hazelwood and put in a bit more wind power to ‘green’ it up a bit.

    However, if someone with some vision and common sense came along with a plan then I would suggest that Victoria is one of the better suited states for nuclear power due to its existing large baseload capacity and hence relative ease of conversion.


  44. The future looks bright for the IFR, simply because there is no alternative. New data coming out for 2011 really makes the alternatives of the past, coal and gas, look pretty bleak. “Shale gas” has received loads of hype, but has an EROEI and flow rate lower than tar sands. According to Canada’s top geologist, “there may be 100 years of methane, but it may take 800 years to produce.” Shale gas can’t even cancel out declines in conventional gas much longer, declines that are about to excellerate. As for coal, a new study suggests peak coal could be this year, 2011. Already, demand for coal is outstripping supply around the world.


  45. I have been doing some research on fusion lately, and it would appear that the biggest problem is that it releases its energy as neutrons. In a commercial deuterium tritium fusion plant like ITER, they will have to tear apart the insides of the reactor every few months due to neutron damage, then build them back up again– there’s no possible way to do this at an acceptable cost. Does anyone here see any way out of the neutron problem, or more promise for other forms of fusion, such as deuterium deuterium or deuterium 3He?


  46. Will I agree CCGT is a stopgap measure for Vic looking at reserves to production in Table 3.1 of this report

    Click to access item.phtml

    for the Gippsland, Otway and Bass basins. However that production is not yet serving much baseload. Vic gas is also piped under Bass Strait to Tasmania’s two gas fired power stations and other users.

    I understand CCGT plant can last 40 years. Unless Vic can get
    1) coal seam gas piped from Qld or NSW
    2) WA LNG shipped around the coastline
    3) local gas discoveries perhaps aided by fracking
    a new gas plant would have to close early, say by 2025 at the latest. At least Vic has plentiful developed coal (unlike SA) so CCS could be their stalling tactic if the Feds play along with it..


  47. John Newlands, on 17 October 2011 at 2:23 PM — CCGT vendors state a design life of 40 years. However, nobody knows how long any CCGT will last, which depends in part in how it is operated. Nonetheless, I opine most will last in excess of 40 years.


  48. DN and DBB: Have you ever looked through innards of a 40-year old boiler? Or a 30-year old GT? I have no doubt that a 40-year design life is possible, provided that operation was either at a 5 or 10% capacity factor or a steady 80%, which would be prohibitively expensive from a fuel perspective.

    That leaves the high capital route of peaking plant and 10% capacity factors.

    In between, the GT would literally crack up and the boiler side of things would need new headers and other really serious stuff inside 40. Besides which, the steam turbines used either daily or full time would be pretty close to stuffed by their 25th birthday unless somebody has really pulled creep and cracking into line.

    Electrical and control systems will look decidedly ratty at 40 years if not fully replaced earlier, as also some other auxillaries such as fans and pumps.

    Like my old power station, I suggest that a 40-year old CCGT is certain to have a lot in common with Grandfather’s Axe: Three new handles and two new heads and still going strong.


  49. Graham Palmer wrote:

    But the point more generally is to what extent expensive, low-intensity, energy reduces productivity, thereby destroying jobs, in which cheaper, more effective alternatives exist.

    To understand the fallacy of the government creating
    green jobs through subsidies and regulations, we have to refer to the writing of French economist Frédéric Bastiat. Back in 1850, Bastiat explained the fallacy that underlies such thinking in an essay about the unseen costs of such efforts. He called it the “broken window” fallacy.

    Frédéric Bastiat “broken window” fallacy assumes that spending a dollar in any instrance is always the same, and says nothing about what happens to that dollar once it leaves the shopkeeper’s hands. He understands the “invisible hand” of the marketplace (a la Adam Smith), but not the tableau économique of François Quesnay (on the multiplier effect). Who’s to say whether the shopkeeper spending his money, or the glazier (once payment for the window has been received) makes the most rational choice of what to do next with that legal tender (where it can do the greatest amount of work)? In fact, in traditional liberal economics (even of the British variety), it’s enough just to move that money around (to wrest it away from the stranglehold of the penny pinching and miserly shopkeeper), and put it into the hands of the laborer where it can do some work (and conduct a great deal of commerce). Digging holes and moving money around is exactly what we want to do to re-start an ailing economy (and it doesn’t matter the cost). Hence the “famous” digging holes analogy of Keyenes: “Just as wars have been the only form of large-scale loan expenditure which statesmen have thought justifiable, so gold-mining is the only pretext for digging holes in the ground which has recommended itself to bankers as sound finance; and each of these activities has played its part in progress — failing something better” (Ch 10, “General Theory of Employment, Interest, and Money: The Marginal Propensity to Consume and the Multiplier”).

    So what does this mean for energy development and green jobs. I suppose we could write a whole book about it (and provide a trenchant look at French and British political economy in the process). But since nobody wants to do that (and nobody would read it here anyway), I’ll simply say in shorter form it has something to do with creating new markets for commerce, trade, and goods (all the stuff that jobs are made from). Spending is awfully good, whether it’s the shopkeeper who does it or the glazier (in this, I think even Bastiat would agree). But what we are truly after is the “something better,” and in this we’re interested in consumption and the multiplier (or creating markets where private actors will be willing to invest and take risks, to make a return on their investment by meeting consumer demand, and both with or without public incentives as a significant measure of personal freedom and liberty). Only then will digging holes or fighting wars become any less enticing as a pathway for economic growth and stimulus (and the shopkeeper can sit back and relax and not have to worry about broken windows in the first place). The glazier (who has an interest in repairing windows) has plenty of work to keep him or her busy building new offices and residence once private markets get rolling again. And if ever another recession were begin, my recommendation to the shopkeeper would be … get some “broken window” insurance (and not less work for the glazier)!


  50. El:

    Ever thought of using paragraphs?

    A dense block of text is… well… dense.

    The multiplier effect is irrelevant to your argument – the point is that money can be spent productively or it can be wasted on a broken window.

    Once spent, both dollars are equivalent in terms of multiplier effect, unless you pretend to know the difference in spending habits between shopkeeper and glazier in very great detail. This then would become a discussion about the shopkeeper or the glazier as individuals, not as members of a community.

    There is simply no good reason to assume that a magical multiplier effect will restore not only the value of the dollar but also add further value, thus making window-smashing a worthy profession.

    To claim, as you appear to be doing, that JM Keynes would advocate “moving money around” or throwing money at makework schemes under all situations is simply not correct. Re-read your references and you will find that even Keynes only favours this under specific circumstances, ie those when insufficient money is in circulation. This is what the Americans called Quantitative Easing recently as the Fed tried unsuccessfully to coax a bit of growth into the economy.

    In times of oversupply of money, eynes would certainly not have advocated what you are defending, because this is the road to inflation and destruction of wealth.

    Bastiat was quite correct to counsel against wasting money, and the example cited by Graham Palmer is also quite correct.

    I offer a further illustration of what is happening. Forget money and think value, which is the term I shall use where perhaps an economist might use the term “utility”.

    The value of the window is not enhanced by smashing it.

    The value of a MWh of power generated in one way is not, of itself, greater than the value of a MWh of power generated in any other way.

    If Company A chooses to use expensive power sources, it will have higher input costs than Company B which takes the best that the market can offer.

    This leaves Company A with less with which to its workers, who thus either work for lower pay or risk losing their jobs entirely when Company B puts Company A out of business.

    This is what Graham Palmer’s reference shows is happening. There is no argument that can justify additional input costs in the way that you have attempted to claim.

    There is, however, room for argument about externalities, which might take the form of a carbon tax (for example), designed to avoid reduce the damaging behaviour of those who would otherwise cause demonstrable damage to the economic commons of society by free-loading off our commonly owned and shared resources such as clean air and water, liveable environment and so forth.

    There is value in avoiding damage to the commons.

    There is no value in simply tossing money at expensive items when cheaper comparable items of similar utility are available.

    This is Economics 101 as I first studied it and as I revisited it 30 years later in the 1990’s. I’m sure that it hasn’t changed since then. Real economists may take over from this point.


  51. @Zachary pointed to some “Peak Coal!” literature, which includes – “the world will finish off the coal that is easy to reach and high-quality”.

    True blue believers in the renewables movement have a basic tenet of faith that the world’s resources are gunna run out. Then, only those people who have been virtuous enough to install renewables equipment will survive. And in the process, escape judgement for their emissions.

    When you consider that with enough energy and ingenuity the rock under your feet today will become the car that you drive tomorrow, it’s pretty clear that their predictions of the end of the world are not based on fact.

    Typically the renewables salesmen use weasel words like “cheap” or “published reserves” or “accessible”. When you analyse their English, their purportedly technical statements amount to saying the equivalent of “tomorrow’s demand cannot continue to be met with yesterday’s technology/infrastructure”. And of course it can’t. There is an essential difference between something labelled as yesterday’s or tomorrow’s: in the meantime we have worked hard to make sure it is different.

    If we are to connect with environmental conscience among our listeners, we couldn’t do better than to persuade them that it isn’t the resources that are the problem, it’s the wastes that industry converts them into. The most destructive waste that we continue to create is a gas. Need I go on?

    If someone wanted to make a buck out of growing public fear, he or she could probably make a comfortable income selling windmills, or prayer wheels and shouting about “Peak Resources!”. It wouldn’t make much difference to their emissions, just that they wouldn’t feel so guilty about it.


  52. Hi all,

    I like this website because I feel at home. That is, we are all here for the same thing- the future of our energy. However, an alien looking from the outside would be fooled into thinking we are very stuck in our ways and tend to blindly accept, or outright reject certain technologies.

    This to a certain extent I would say is true, but if only they looked outside at what we have to deal with from lobbyists (of all persuasions), political activists and the general laymen community, they would have a much more positive view of

    Our future energy mix, no doubt, will be a mixture of a variety of technologies. And, research into energy will continue just lke every year since the begininning of the industrial revolution.

    My field of research is renewable energy (photovoltaics). I’ve put up with plenty of illogical criticism in the past, and some quite warranted. But this, i believe, is nothing compared to what nuclear advocates will have to deal with in future, the amount of negative emotion able to be conjured up by simply mentioning the word ‘nuclear’ is often extraordinary. Nuclear (in particular IFR’s) should be given rational consideration in our future energy mix, but this won’t happen if we do not address the general public’s perception of nuclear- or more importantly- the difference of new techs like IFR’s have compared with Gen I & II.

    Nuclear waste, weapons proliferation, meltdowns and accidents are the most common thing to spring to mind to many in the general community. It seems such a tragedy if by addressing those issues with new technology, mentioning only one word (‘nuclear’) makes it all a waste of time.


  53. I have a question regarding energy crops, and I suppose this is a good place to ask:

    Food shortages in many regions of the world are not a result of humanity having exceeded the “carriage capacity” of the planet but unequal distribution. With less food wastage in the developed world, more efficient distribution and the introduction of industrial-scale agriculture in the developing world, the planet can easily sustain 9-10 Billion people. That’s the consensus.

    Now what about energy crops? It is often claimed that energy crops replace food crops, leading to food shortages in poor countries. What is the magnitude of that problem today?

    And how much of the world’s arable land could in theory be dedicated to growing energy crops without risking food shortages?


  54. Max, you have indeed come to the right place.

    I am sure that you and I will learn from those who respond. First, please recognise that there are very heavy costs associated with moving things around. Foods are an example.

    Some people make a distinction between those foods that are human dietary components and other organic/straw products.

    Please do not think that this is rude, but are you considering the protein/food portion of your agricultural yield, or the cellulose fraction?

    Protein is available, more or less, as food to humans.

    Cellulose is food for termites and animals with several stomachs, and who probably expell large volumes of methane, which is itself a bit of a worry from a climate change point of view.

    So, consider what your target issue is: is it corn (eg starch) or the husks (eg cellulose)?

    Both contain energy. The question is: can humans digest the form of energy that you are interested in? Please return here and discuss this further.


  55. @Peter Lang, on 17 October 2011 at 12:28 PM said:

    EPRI (2010) estimates the Total Plant Cost would be $5,742/kW (in 2009 AUD$/kW sent out) for new nuclear in Australia. The estimating assumptions are in Section 4. For comparison, the VC Summer #2 and #3 budget in the link you provided is US$5,371 for 2,200 MW, or $2,441/kW (in 2011 USD). What is the reason for the large difference?

    The $5.371 billion cost(actual dollars when spent) for VC Summer #2 and #3 are PER UNIT.
    $4.3 billion constant 2007 US dollars + estimated inflation of $1.1 billion. The bulk of the construction financing costs at VC Summer are being passed thru to current electric rate payers and aren’t being capitalized. SCE&G is a regulated utility. The rates they are allowed to charge for electricity allows for a fixed return on investment.

    If I understood the EPRI report correctly they used constant 2009 Australian dollars(no allowance for inflation) but they capitalized construction costs at 8.5% interest.


  56. Harrywr2,

    Why do you say that cost is fore one unit? The report titles says “Units 2 and 3” and the tiles on Appendicies 2 and 3 say they are for units 2 and 3 and the times period is through to completion of untis 3. Appendix 1 shoes all the milestones for the project and they are for Units 2 and 3.

    You are correct the EPRI figures are in 2009 A$ and WACC is 8.4% (before tax).

    Comparing the EPRI report and the VC Summers status report explains some of the reasoons capital cost differences.

    The Australian capital cost figure is higher because the Australian figure is for a greenfield site whereas VC Summers is a brownfield site.

    Furthermore, Australian labour costs are higher and productivity lower; the factor is 1.71.

    There is also an exchange rate conversion factor, USD = A$1.23.

    This goes some way to explain why nuclear will be higher cost in Australia than in USA even if we could remove many of the impediments to low cost nuclear.

    And nuclear in USA and Australia will be higher cost than in Korea for a number of reasons, especially investor risk premium.


  57. @Roger Clifton, on 17 October 2011 at 6:52 PM said:

    If someone wanted to make a buck out of growing public fear, he or she could probably make a comfortable income selling windmills, or prayer wheels and shouting about “Peak Resources!”

    Investments in electricity generating technology tend to be long term with relatively slow payback periods. A purely selfish choice involves deciding whether I am going to pay interest to a banker for a technology that has little or no future fuel cost or am I going to minimize what I have to pay to the bank for interest and pay whatever I have to pay for future fuel costs. Whichever choice I make I’m going to be stuck with my decision for 30 to 40 years.

    The banker tells me he will give me a fixed rate on the interest.
    The coal miner tells me he doesn’t know what his future costs will be.

    So I need to make a decision based on what I believe the future cost of coal mining will be.

    I can use many guides…historical price trends etc to make an estimate.

    In the US at least the numbers that are most troubling are
    1) The number of tons per hour a coal miner can extract has dropped from over 4 to less then 3 in a decade East of the Mississippi.
    (Wyoming coal miners are doing nicely at 29 tons per hour but even that is a substantial drop from 44 tons per hour)
    2) Coal surface transportation rates have been trending up for a decade.

    The US is the worlds second largest coal producer and the productivity trends are headed in the wrong direction. Wyoming coal is still inexpensive but it is 1,500km from the nearest ship/population center.

    US Annual Coal report 2001

    Click to access 05842001.pdf

    US Mine productivity 2009

    Click to access table21.pdf


  58. Peter Lang, on 17 October 2011 at 10:39 PM said:

    Harrywr2-Why do you say that cost is fore one unit?

    Actually…I’m a bit mistaken…the costs are for SCE&G’s 55% share of the total project…so a bit more then 1 unit.
    Chief Operating Officer Steve Byrne told the S.C. Public Service Commission that the “future-dollar” cost of SCE&G’s 55% share of the project is now projected at $5.6 billion. That works out to atotal project cost of $10.2 billion. When regulators approved the expansion, the estimated final cost was almost $11.5 billion

    Inflation hasn’t been as high as was that dropped quite a bit off the ‘final cost’.

    As far as investor ‘risk premiums’, a couple of sets of reactors built on time and on budget decreases two of the three risks(regulatory and construction cost). All that is left is ‘demand’ risk.
    In the US Southeast the delivered price of steam coal is over $90/ton and they have no usable wind(Hurricanes don’t count as usable). The only real demand risk is from ‘shale gas’.


  59. PL &Harrywr2,

    great discussion on costs.

    Why are these companies borrowing the money for these plants?? Makes no sense and has a huge cost implication. somewhat akin to running out and financing a new car. Why don’t these utilities start socking the money away way in advance??

    So VC summers plants are approx 4500$/kw. but the real number needed is $/kwh over the life of the plant and that’s the advantage of Nukes….asked in another way what is going to happen to the SC customers projected cents/kwh they pay on their monthly bill??


  60. GeorgeS, I do’t know about SC, but there are many regulators that won’t allow a project to be part of a customer’s bill until complete – here’s an article touching on this from Florida:

    This is the type of issue I tried to touch on earlier: The costs are never agreed upon. In my jurisdiction, Ontario, costs are still hotly debated and the last new reactor to come online was in 1994! The debates are over the value of loan guarantees, financing costs, contracts guaranteeing the sell of production, insurance, long-term disposal costs….
    So while I clearly see a benefit of discussing ways to control costs, I’d have no expectation on unanimity on any estimate, or even an estimated range.
    I also think the cost of innovative units, such as the SMR’s and waste-fueled reactors isn’t overly relevant in the FOAK stage. What Ontario, or Australia, does is far more important in terms of a story that can be replicated, than in terms of the cost to themselves at the FOAK stage — and I think any effort to close the fuel cycle carries the promise of payback that a cheaper unit may not. One such payback is the opportunity for cheap output in the future that will power the currently impoverished parts of the world, and prevent the Indias and Chinas of tomorrow from adding to emissions.

    I will also once more note a publication that is anti-nuclear, that gives another common argument on costs (specifically of the UAE decision):
    European regulators also now require plant designs to include a “core catcher” that would catch the molten fuel (corium) if it breached the reactor’s pressure vessel in the event of a failure of the emergency cooling system. When AREVA failed to win the UAE tender,Lauvergeon
    claimed that the reason that the proposed EPR was 15 percent more expensive than a Gen II PWR was because of costlier safety enhancements—such as the core catcher and the reinforced containment—that were designed to prevent offsite radiological impact. Buying the Korean APR1400, she said, was like buying “a car without air bags and safety belts.”
    -page 27 of

    I note that partly because the unsubstantiated post on this thread earlier (since removed) played directly to the ‘core catcher’ safety spin in this quote.


  61. GeorgeS, on 18 October 2011 at 2:58 AM said:

    .asked in another way what is going to happen to the SC customers projected cents/kwh they pay on their monthly bill??

    It’ll go from an average 8.3 cents to 11.4 cents/KWh in 2020 assuming fossil fuel costs for their remaining generating equipment doesn’t increase at least according to this 210 page document filed in 2008 with the S C Regulators –

    Click to access 3B3E3E6F-F48A-A3C5-50C13F96CFDBA604.pdf

    Appendix H goes thru all the various alternatives that were looked at and the underlying assumptions. Considering the decision point was 2008 their assumptions relating to gas prices were valid but probably not so valid in hindsight…but then we don’t know what gas prices are going to be in 2020 which was part of their decision making matrix…diversity of fuel mix in order to avoid ‘market volatility’.


  62. Max re energy crops I rely quite heavily on both biodiesel and firewood and I conclude that neither are large scale solutions. About 80% of my car fuel comes from biodiesel made from waste vegetable oil. In winter I heat with firewood and I cook on a wood stove year round. Both the WVO and wood are free because I happen to live close to areas that serve fast food to tourists and to forests. I have yards large enough to store tonnes of wood, drums of oil stacked in rows and neighbours who don’t object. Those factors don’t apply to 99% of the population.

    My conclusion from all of this is that current forms of biofuel are limited and remain fossil fuel dependent. For example natural gas is needed to make the methanol catalyst for biodiesel and petroleum diesel runs the forestry industry that creates the firewood byproduct. I believe we should conserve natural gas as a future transport fuel and not burn so much in power stations. When gas is short supply by mid century we might have to make synthetic fuel at great cost. I’m not sure this is even physically possible for a greater world population than today. In short forget energy crops but conserve natural gas instead.


  63. BBD, Mark’s ideas have been discussed extensively, but you could start here:

    Mark is a supporter of renewables and distributed power and a passionate critic of nuclear. He is a critic of “baseload” because he is opposed to both of the primary baseload supplies, coal and nuclear, and given that intermittent renewables are not “baseload” without some form of storage or backup, it makes sense to attack its underlying validity.

    He has done a lot of work modelling wind and trying to develop scenarios which would enable Australia to wean itself off coal, relying on renewables, natural gas and agricultural biomass. I don’t think there is anything wrong with environmental academics trying to formulate theoretical plans, and some of these ideas can be eventually worked into practice, but I think the overriding issue on this blog is discussing real solutions.


  64. Graham Palmer

    Thank you for the link to your piece, with which I have no quarrel. I am also concerned that Diesendorf’s analysis is incomplete and over-stated.

    It sounds as though there’s no direct response to D10 (I can’t find one). Perhaps this is a missed opportunity ;-)


  65. Harrywr2,
    Thx for the link I spent about 40 minutes or so studying it. I will need to spend more time on it though. They seem to make a reasonable case for it. raising rates from 8 to 11 cents between now and 2020 doesn’t seem to be unreasonable if they can not get a lot of cost over runs. …but it would take someone a lot smarter than me in that field to read between the lines and feret out all the milions of assumptions that went into the study. Looks like maybe they guessed a little high on gas prices and we have no $/ton penalty on CO2 at this time (or am I wrong) so if the study was done today perhaps they would have opted for NG due to low prices.

    Seems lie SMR’s are the hot ticket for keeping construction costs overruns down as it becomes a plug and play deal. ie the reactor is simply a transducer. just add more transducers if you want more power.


  66. Karl-Friedrich Lenz, on 15 October 2011 at 2:56 PM

    If so, has anyone read Dale Carnegie “How to win friends and influence people” yet?

    You prompted me to go looking. I had never read the book, but now it’s on my “must do” list; I’m going to attend my first ever Toastmaster’s meeting tomorrow. The 1981 revised edition of How To Win Friends and Influence People is available, free, online. The Internet and Google will take you to many many places… ;D

    On a completely different topic: a new paper Assessing the health risks of natural CO2 seeps in Italy is relevant to those who, for whatever reason, have a liking for carbon capture and storage. CBC Radio’s Quirks and Quarks ran an interview with R. Stuart Haszeldine, one of the paper’s authors, on October 15, 2011. The show describes the segment thus:

    Seeking CO2 Seeps

    Carbon Capture and Storage is a technology that promises to solve our greenhouse gas problems by burying carbon dioxide underground. The CO2 then will be sequestered away from the atmosphere for geological time, much like the oil and gas that it came from. However, among the issues around CCS is whether there will be major hazards associated with accidental leakage of the CO2. To understand this, Dr. Stuart Haszeldine, a geologist and the Professor of Carbon Capture and Storage at the University of Edinburgh, and his colleagues, studied the impact of natural carbon dioxide seeps in Italy. This CO2 is produced by volcanic activity and escapes to the surface through tiny fissures in subsurface rock, and Dr. Haszeldine thinks this is a good analogue for how CO2 might occasionally escape from underground storage.

    From the paper’s abstract, my emphasis:

    Here we quantify historical fatalities from CO2 poisoning using a database of 286 natural CO2 seeps in Italy and Sicily. We find that risk of human death is strongly influenced by seep surface expression, local conditions (e.g., topography and wind speed), CO2 flux, and human behavior. Risk of accidental human death from these CO2 seeps is calculated to be 10-8 year-1 to the exposed population. This value is significantly lower than that of many socially accepted risks. Seepage from future storage sites is modeled to be less that Italian natural flux rates. With appropriate hazard management, health risks from unplanned seepage at onshore storage sites can be adequately minimized.

    IIRC from the interview there have been more than 20 actual fatalities in the last 50 years or so. Since I live in Alberta, I went looking for sour gas seeps because I had heard that H2S can also accumulate in low lying places and kill people. I didn’t find a good summary or single source for this; there’s lots about sour gas in the oil industry though.

    On the subject of rational debate: I chanced to hear Calgary, Alberta’s Mayor Naheed Nenshi talking about his first year in office. At about 7:45 in part one of the interview he says

    If you ask me one thing that I was surprised about, coming into this role as someone who hadn’t been a politician before, was that sometimes what’s clearly the right answer based on the data still can’t happen.

    There’s certainly lots of discussion here on this point. Barry, take note: before running for Mayor, Nenshi was (among other things) an instructor at Calgary’s Mount Royal University.


  67. Harrywr2,

    Thank you for clearing up that the status report is for 55% of the total project cost of units 2 and 3. That makes sense now and fits fairly well with the EPRI cost projections for Australia, given the differences: brownfield versus greenfield, and the exchange rates, labour cost and productivity differences between Australia and USA.

    I think we have confirmed that the EPRI 2010 cost figures (in 2009 AUD) are reasonable projections for new nuclear in Australia. We could adjust the EPRI figures to 2011 AUD if we wanted to take this a little further, but it would be approximate only.

    As far as investor ‘risk premiums’, a couple of sets of reactors built on time and on budget decreases two of the three risks(regulatory and construction cost). All that is left is ‘demand’ risk.

    MIT (2009) estimated investor risk premium to be 26% for new nuclear in the USA. Given Australia’s opposition to nuclear, I’d expect it would be significantly higher in Australia.

    Sovereign risk is a significant factor. That is the risk that the people and government will change their mind in the future and decide to effectively confiscate the investors’ investment without proper compensation. Or simply ramp up the costs of keeping the plant going by applying ever increasing regulations and costs to the operation of the plant. That is a big risk and investors need a significant premium to compensate for it.

    I’ve dealt with a lot of this in the link I provided in an earlier comment:

    The important point for all those who have been concerneda bout the EPRI report’s cost projections is that this discussion supports the EPRI cost figures.


  68. GeorgeS, on 18 October 2011 at 2:58 AM — The rate payers price of electricity is bound to go up due to several factors: general inflation (typically pegged @ 3%); new equipment is much more expensive that the (fully depreciated) old equipment so I arbitrarily add another 1% to the discount rate. Using that in the NREL calcultor, and starting from 8 cents/kWh I obtain an LCOE of 9.8 cents/kWh which generally agrees with about 11 cents/kWh in 2021.

    More briefly, the increased costs of electricity have little to do with the choice of generation technology employed; in any case a regualted utility is required to choose ‘the best available’.


  69. GeorgeS, on 18 October 2011 at 8:10 AM said:

    Looks like maybe they guessed a little high on gas prices and we have no $/ton penalty on CO2 at this time (or am I wrong) so if the study was done today perhaps they would have opted for NG due to low prices.

    Yep…SCE&G did guess a little high on gas prices and we don’t currently have a $/ton penalty on C02. I think they could still justify the nuclear plant based on ‘energy mix’ diversity and the possibility of a future CO2 tax.


  70. GeorgeS,

    So VC summers plants are approx 4500$/kw. but the real number needed is $/kwh over the life of the plant and that’s the advantage of Nukes….asked in another way what is going to happen to the SC customers projected cents/kwh they pay on their monthly bill??

    The capital cost figure is a major component of the LCOE and therefore we need to know it before we can calculate the LCOE.

    The LCOE is a calculation of the levelised cost of electricity over the life of the plant. Your questions is asking about the “price” to the customer, not the cost of generating the electricity. Estimating the retail price is far more complicated and can only be for specific grid, region and projected future market conditions. Therefore, in making decisions between technologies in the early planning phases – to inform government policy decisions as we are doing for Australia – we commonly use LCOE rather than the price.

    The EPRI report calculates the LCOE for nuclear in Australia would be $173/MWh (2009 A$). That is over five times the average cost of our baseload generation now, and over twice the cost of new coal (without CCS).

    So we have a big gap to cloise if we want nuclear to be economically viable in Australia. Furthermore, if we want Australia to contribute to cutting world emissions (as opposed to simply transferring them to other countries), then the gap must be closed by reducign the LCOE of nuclear, not by raising the LCOE of new coal. This explains why:


  71. John Bennetts wrote:

    Once spent, both dollars are equivalent in terms of multiplier effect, unless you pretend to know the difference in spending habits between shopkeeper and glazier in very great detail. This then would become a discussion about the shopkeeper or the glazier as individuals, not as members of a community.

    Thanks … that was fun, and a very excellent reply. I largely agree with you (and don’t see the need to argue the point). What we’re both after is sustainable business models, and this means attention to costs, quality of service, and avoidance of waste (in order to remain competitive). Jobs created on this basis will always be “higher value” than make-work projects (smashing windows or digging holes), which it should be noted do in fact sometimes create value and perform a service during times of economic hardship (and stimulate much needed demand). So perhaps we’re answering two different questions. I particularly like your attention to externalities.

    But one issue that is still unresolved for me … how do we get the miserly shopkeeper to part with his or her money and put it to work for the good of society (when they are holding on to it with an ever and ever tighter and narrowly focused grip). Especially for projects that are worthwhile in the long run, but costly in the short run. I’m not sure if the rational shopkeeper model (a la Bastiat), purely focused on short term returns and attentive to minimizing long term risks, is the best social agent for either of our approaches. Nuclear has too high an up front cost to attract their attention (with other comparable technologies), and has other risks too, and who wants to be an early adopter on renewables (when costs are anticipated to come down with better manufacturing and innovation). If left to the rationalists, we’ll simply keep digging holes in the ground for coal, oil, and natural gas, continuing to pollute our air and water, and transition to the next least costly approach when forced to do so and in response to the next big crisis (after the shopkeeper has benefited significantly from peak supplies and high prices, and extracted their pound of flesh and significantly held back consumption and demand … hence, economic growth). In a way, to look at the issue from another perspective, it might not be all that important for renewables and nuclear to duke it out on cost effectiveness. What’s more important is that they win the fight for competitiveness and utility with things such as war and gold mining (to return to Keynes). There seems to be plenty of money around for a great variety of value related endeavors, but we don’t always spend it as such. In fact, we act against our long term rational self-interest all the time (drugs, fast cars, gambling, carbon emitting energy sources), and seem quite comfortable with the waste and frivolousness that surrounds us every day. What’s the cost of a window to a shopkeeper when everything else in the store is a trinket or tchotchke with no identifiable purpose or utility?


  72. It should be blatantly obvious from the previous comments between Harrywr2 and me that:

    1. Nuclear is not viable in Australia. It is not viable now and it will not be for a very long time. People are not going to stand for a five fold increase in electricity cost – especially when the benefits of doing so cannot be demonstrated. A few will but most wont support this.

    2. The carbon price needed to make nuclear viable in Australia is far too high and is not going to happen. It will be totally unacceptable. Very few will believe it is justified.

    3. Those who want to push for nuclear in Australia should review their approach.

    The CO2 tax/ETS is an “own goal”.


  73. David B. Benson, on 18 October 2011 at 8:34 AM said:
    The rate payers price of electricity is bound to go up due to several factors: general inflation (typically pegged @ 3%);

    Of course but is that included in the analysis that Harry gave in the link????
    I don;t know.
    I think not


  74. Some interesting comments on the Texas situation, sent to me by Gene Preston (who sometimes comments here). Seems they are stuck between a rock and two hard places:

    While we are discussing wind, you should know that ERCOT (Texas) is near a crisis point in having enough capacity to meet the peak demand. Consider the three types of dispatch that a new entry into the ERCOT market might consider (keep in mind generators only make money selling kWh in ERCOT since there is no capacity market):

    1) Peakers generate revenue only during the peak load periods. Their revenue stream to cover fixed costs is very erratic. This erratic revenue stream is not attractive to investors.

    2) Mid range generator’s energy sales are dropping due to more and more wind generation coming on line. Consider that a new efficient gas generator could be operated as either a mid range generator or a base load generator. Either way, the uncertainties with how much wind there will be in the system, and whether natural gas will fall under CO2 regs, and also whether the natural gas prices and supply will remain attractive is causing many proposed gas plant projects to take pause. Many are deciding they will just hold off for now on making that new gas plant investment. A few companies are making the plunge with a new gas plant, but mostly the others are holding off for now. So the mid range generators are not rushing out there building new plants at this time, even though there is a looming shortage of capacity.

    3) Base load generators would have to bid rather high prices in an energy market to cover fixed costs, but this is likely to throw them into a non base load dispatch mode. Therefore the energy only market is too risky for a base load plant to invest billions into, so these base load plants are not being built in sufficient numbers at this time. Lack of financing is the main reason the STP units 3 and 4 nuclear plant had to be cancelled. The plant looked great from a technical viewpoint. And the price of the plant was expected to cost only about 8 cents per kwh. But even that good deal was not good enough to be financed in the ERCOT market because you can’t bid 8 cents per kwh and expect to get base load operation in an energy only market. Now if that plant had been financed as fixed payments and then the variable costs bid on the market, it would have always been base loaded. But that is not how ERCOT works, so the plant had to be cancelled.

    ERCOT and the PUC have been working on how to solve the capacity problem, but so far have not found a way to make the energy only market work to insure there will be enough capacity to meet the peak demand.

    Did you notice that new generation cannot be financed at any level, especially high capital cost low fuel cost base load generation? Also more and more wind is knocking out energy sales in mid range gas generation which is making those investments risky. Gas is the very thing wind needs to keep the network stable. One economist critical of my points made two points themselves. He said that prices need to significantly rise to justify capital expenditure (prices are set by competitive bidding) and he said that we have too much base load generation (if you can believe that). What he really wants is more rapid response gas generation to accommodate more wind, but that marriage is becoming more and more strained. Texas is likely to have more rolling blackouts in the next few years as more and more dependency is placed on wind.

    The energy only market design is why we have no new nuclear plants under construction in Texas. The market design is an institutional barrier to paying for the capital cost of nuclear. Also, there was and is a strong anti nuclear movement in Texas through various political groups such as the Sierra Club and Public Citizen. They are very vocal. They are also very anti coal, pro solar and pro wind.


  75. If nuclear is not economically viable, where did Martin Nicholson’s analysis draw this conclusion from?

    Australia could save up to $185 billion net in abatement costs by 2050 if 25 gigawatts of nuclear generation capacity were built instead of building new fossil fuel generators.

    Anti-nuclear activists, (deleted inflammatory comment) often make the assertion nuclear is not economically viable. I’m yet to see a coherent analysis refuting what Nicholson’s excellent analysis concludes.


  76. GeorgeS, on 18 October 2011 at 10:04 AM — I presue the economic planners for Southern Co. take general inflation into account in some fashion, but I am actually not much enjoying this excursion in the ecomincs of the electricity industry.

    To try one again, this time from around here, a new wind farm’s output is purchased by Idaho Power for a staring price of 6.1 cents/kWh but raising to 12.2 cents/kWh in 20 years, that being the agreed estimate in the increased wholesale price of electric energy over that period. From NREL’s calculator (if I’m using it correctly) that levelizes as 9.0 cents/kWh at 4% interest.


  77. Tom Keen, on 18 October 2011 at 10:29 AM — Australia could surely manage a turnkey operation such as the South Koreans are providing in the UAE. That means (in current dollars) capital cost of US$3800/kW for an LCOE of US$0.081/kWh for the first 30 years and after that about $0.028/kWh for the remainder of the NPPs useful life (probably another 30 years). [I have difficulty believing P.L.’s analysis.]


  78. Just to be clear, the SV Summers total project cost is US$5,227/kW, not $4,500/kW (mentioned by someone else). SV summers is a brownfield development. Greenfields developments would be expected to be higher cost. With the higher labour cost and lower labour productivity in Australia, it would seem the the EPRI forecasts for Australia are not unreasonable (also need to take into account the change in exchange rates from 2009 to 2011 would reduce the EPRI figure by about 20%). I’d say we should accept the EPRI LCOE cost for nuclear at $173/MWh to be about right and the best figure we have.

    Therefore, the high end cost figure in Martin Nicholson’s conclusion:

    For an additional cost of between zero and $82 billion to add 25 GW of nuclear generators into the Treasury core policy

    is the appropriate one to use. The low end figure can only be achieved if we are prepared to remove the impediments to low cost nuclear in Australia – an issue we’ve been unwilling to tackle.

    The $185 billion projected savings not likely to be realised as most previous comments on this acknowledge.


  79. Barry, Paul Hyslop (ACIL Tasman) has been saying something similar about Australia’s market for a while, for example,

    Look, the problem with the renewable energy target is it’s very expensive and it doesn’t bring about much abatement because it doesn’t target emissions, it targets producing renewable energy. But the renewable energy essentially displaces the most expensive generation, not the highest emissions generation, and the most expensive energy is essentially the gas-fired power and it has the lowest emissions. So, what we’re doing is we spend a whole lot of money to bring renewable energy in to displace gas-fired power when in fact gas-fired power is what we want to displace the coal fired power.



  80. Sorry to pop out of nowhere with this, but it’s the Open Thread…
    Can those here familiar with Diesendorf (2010) The Base Load Fallacy and other Fallacies disseminated by Renewable Energy Deniers point me to a good critique?
    The paper (small pdf) is available here:

    Click to access BP16%20BaseLoad.pdf

    I know this will be obvious to you all, but I’ll say it anyway.

    This paper by Diesendorf hasn’t been peer-reviewed or accepted for publication in any professional scientific journal as far as I can tell.

    The 2010 paper by Nicholson, Brook and Biegler (to give but one example) reaches very different conclusions, and it has the very significant distinction that it is published in a mainstream well-regarded peer-reviewed scientific journal.

    If we conduct something of a meta-analysis of published scientific literature (not non-peer-reviewed website publications) that deals with the economics, environmental attractiveness or fossil-fuel displacement potential of nuclear energy, which position is bourne out by the majority of the research – the anti-nuclear position or the pro-nuclear position?


  81. @ EL, on 18 October 2011 at 9:29 AM:

    Hi, EL.

    Your question re the value of a shop window Vs the value of the trinkets behind it points to the definition of value, or, as I stated above, utility.

    The marketplace is not interested in the input costs of products. They are for the producer to worry about. The market is a means whereby the marginal utility of a good is subjectively matched against the marginal utility of the alternatives, including saving and borrowing.

    Enter the concept of satisficing. Look it up on Wiki-something, rather than clog this thread. My point is that it is entirely rational for potential purchasers to withdraw from the market once their needs are met. There is nothing that says that, at ever lower prices, ever greater sales will ensue, either on a personal or a society-wide scale.

    Hence, the shopkeeper is entitled, in my view, to keep a store of money as a hedge against future wants and needs, even including stacking away a few billion dollars for his progeny to inherit. That is not an ethical problem and it does not disrupt the operation of either the market or of society as a whole.

    You cite drugs, fast cars and gambling as examples of irrational behaviour. When viewed as entertainment, these are economically rational markets – I may agree with you that they deserve a low personal ranking, but are they any more or less irrational than pretty clothes as against utilitarian clothes, flower gardens as against vegie patches, etc? I think not, yet these personal decisions are accepted with good grace by the community of which I am part. The example of Imelda Marcos’s thousands of pairs of shoes illustrated that there is a limit, but social acceptance does not equate to economic rationalism, whereby the first pair of fancy shoes may well be one too many in terms of what they can achieve as assessed via a strict cost/benefit analysis.

    So, sugar might be my drug of choice – daily, I put it in my cup of tea. I’m hooked. From an economist’s perspective, I am exactly the same type of economic actor as the heroin addict of which you speak.

    Your conundrum is clearly not about basic classical economic theory and shopkeepers and savings.

    Is it not matters of personal and collective choice that govern political and social norms that determine society’s responses to damage to the economic commons, emission of CO2, driving recklessly, acceptance of sugar as a drug of dependance but not acceptance of heroin?

    I don’t wish to put words into Peter Lang’s mouth, but I take him to be broadly educated, widely experienced, highly rational, strongly attracted to ideas of cost efficiency, consideration of direct costs and so forth, yet less attracted to subjective considerations of softer, hard to justify or quantify externalities, such as placing a price on CO2 emissions or the cost of a huge nuclear safety bureaucracy which add to the cost of a project whilst contributing nothing directly towards achieving its goals.

    This post is becoming too long, even for a loquatious fellow such as I, so I will move on.

    EL, your answer lies not in the value that you personally place on the shopkeeper’s wares, but the value that the shopkeeper places on them.

    Regarding externalities, often the tables are turned – society must find ways to regulate the actions of citizens and corporations so that the perceived costs of externalities are borne by those whose actions bring them about. By definition, dealing with externatities is often not a matter of cost/benefit study, nor of rational analysis.

    As an engineer, I had to learn that the value of a (say) a variation claim for additional work done while constructing a concrete bridge is not the sum of the direct costs, plus a margin for supervision, plus 10% profit. That is fundamentally wrong, even though the contract might say that this is the way that claims for extras must be valued.

    The value of the additional work is the amount of money that the Principal can be persuaded to pay and the Contractor to accept. Neither more, nor less. My experience has been that some of the largest claims have resulted in payments in the range 10 to 1000% of the contractor’s true additional costs. I have been on all sides of this, Principal and Contractor, ripped off and ripper-off. The lesson for the junior engineers around me was and is that the true value of something is always negotiable, personal, subject to social rules and never fixed until the final handshake. Price and power are intertwined in a way that cost and benefit are not.

    Big projects will proceed when their time has come and not before. They will always have a visionary at the helm, yet this is not assessable via a cost/benefit study. They will always involve social/political enablement. That is not able to be costed, either, but it is as necessary as project financing and efficient engineering designs. No project ever got built just because of a beautiful set of numbers, especially not nuclear power stations.


  82. @ Graham Palmer, on 18 October 2011 at 11:52 AM:

    “But the renewable energy essentially displaces the most expensive generation, not the highest emissions generation, and the most expensive energy is essentially the gas-fired power and it has the lowest emissions. “

    This statement is dangerously misleading. It is probably correct in the case of CCGT and incorrect for OCGT. Individual sites will have their own costs and emissions, as also different gas sources.

    This is certainly not a case of one size fitting all. There is a risk that the public will be led astray by a slogan “Gas=good, Coal=bad”, quite likely being hoodwinked into OCGT peaking plant fed from poorer quality gas resources. This could be an expensive backward step, from both a cost and a climate point of view.

    Reference (1 of many possible):

    Click to access 2016levelized_costs_aeo2011.pdf

    The US Energy Information Administration’s LCOE Annual Energy Outlook 2011, Table 1: for new plant supplying in 2016:

    CCGT 66
    New hydro (USA, remember) 86
    CCGT+CCS 89
    Conventional Coal 95
    Wind 97
    Geothermal 102
    Advanced nuclear 114
    Solar PV 243
    Solar thermal 311

    Clearly, it is meaningless to say that renewables will displace the highest cost energy – renewables in the form of solar ARE the highest cost electricity and wind is still higher cost than CCGT.

    The other half of the quotation relates to emissions intensity.

    I’ll leave it to others to find a comparable citation, but I am far from convinced that OCGT is always lower in emissions intensity than, for example, new advanced black coal generation, with or without CCS, once fugitive and production emissions are accounted for.

    This is a perfect example of the blind leading the blind – the interviewee has made a sweeping, unsupported and incorrect statement and the interviewer has gone along for the ride. It is a misleading waste of time and effort.


  83. Luke, the issue with Mark is not whether his baseload paper is peer-reviewed, but the fact that the Australian ABC (with some notable exceptions) and Fairfax News have a strong pro-renewable/anti-nuclear position, and Mark is often a “go to” person. He is articulate and tells environmentalists what they want to believe, and a reasonable person would have little reason to believe that what he has to say is strongly contested by professionals in the energy supply industry.

    I maintain that a big part of the problem was created many years ago when the most vocal proponents of a “realist” energy policy tended to be climate sceptics, reducing the value of their opinion once people had made up their mind that climate science was valid. Both the ABC and Fairfax adopted a mainstream climate position early, and in the process, also adopted the mainstream environmentalist position on energy, and haven’t seen fit to change.

    For example:


  84. GeorgeS, on 18 October 2011 at 10:04 AM said:

    David B. Benson, on 18 October 2011 at 8:34 AM said:
    The rate payers price of electricity is bound to go up due to several factors: general inflation (typically pegged @ 3%);

    Of course but is that included in the analysis that Harry gave in the link????

    The South Carolina regulator and SCE&G deliberately chose the balance between ‘capitalized construction financing’ and ‘pass thru financing’ to mimic an inflation rate of 2.5%. The rate payers will pay a bit extra now but they will avoid paying interest on a billion dollars worth of construction financing interest for 30 years.

    That’s one of the nice things about regulated utilities…they can look at a 40 year time horizon and play with financing models that maximize the long term price stability. Of course, some of the regulated utilities were completely incompetent which is the bad thing about regulated utilities.


  85. Harry,
    In the SCE&G report all the LCOE numbers appear to be LCOE for the entire utilities generating mix. The 2 new nukes end up raising the amount of nuclear from 11pct to 27%. So the projected 8 cent/kwh to 11 cents/kwh is just from raising the amount of nuclear in the mix from 11 to 27%. Therefore the LCOE of the nuclear component BY ITSELF must be a pretty high number probably approaching PL’s number of 17 cents/kwh.

    Would you agree? or am I all off base.


  86. John

    Your conundrum is clearly not about basic classical economic theory and shopkeepers and savings.

    Is it not matters of personal and collective choice that govern political and social norms that determine society’s responses to damage to the economic commons, emission of CO2, driving recklessly, acceptance of sugar as a drug of dependance but not acceptance of heroin?

    … EL, your answer lies not in the value that you personally place on the shopkeeper’s wares, but the value that the shopkeeper places on them.

    Your post is very interesting (and there are many key points in it). I like very much how you have combined the rational features of the marketplace with the subjective considerations of political and social norms (which can sometimes be the result of long-term social struggle, competition between diverse social and interest groups, and collective will and popular sentiment). Perhaps I am reading a little into your post, but this seems to me what you are saying (that both “value” schemes have to be brought together). We can even graph this kind of thing schematically: with cost variables on the vertical axis (the rational component), and the collective or subjective component of “value” on the horizontal axis (composed of such things as mutually agreed upon goals and collective “interests” such as clean air and water, personal liberty or freedom, fairness, sustainability, affordability, objectivity of markets, accountability for high rates of consumption, and things like that). While this is obviously a common sense perspective, it’s useful to have it mapped out (and identified). It helps us better understand the complex and sometimes contradictory variables and trade-offs that go into difficult energy choices, and also provides a useful counterweight to perspectives that try and reduce decision making to a single variable such as costs or resource availability (which I think is often a strategy of the status quo, or miserly shopkeepers, to distract away from other socially meaningful considerations). I think we can agree … we need better tools to assess these questions, and we don’t yet have a means to fully address or price externalities (and take full account for energy production and it’s lasting impacts … “broken windows” and all).

    Something that caught my attention in the news today. A quick look at the New York Times business section clearly shows where the main cohort of short term rationalists are making their play: and it’s natural gas. Several stories on the huge influxes of capital and consolidation going on in pipeline development (here too on financing), Perry promising less regulation (when rationality meets political norms), Russians plying ice free waters along the NE passage with tankers full of gas condensate, more mergers and consolidation going on in oil and gas fields in US, and much more. There’s plenty of money around, that’s for sure, but it all appears to be focused on one place (or resource). The die appears to be cast, and the deck stacked … nuclear and other low-carbon alternatives don’t appear to have a rational fighting chance in hell (for at least the next 30 or 40 years), and carbon emissions will continue to rise.


  87. The sidebar links to an ABC Drum article about CO2 from Australia’s fossil fuel exports. I thought I’d try to refine that somewhat. The article says the latest annual coal exports were 153 Mt thermal and 164 Mt coking. BHP uses CO2 factors of 2.39 and 2.71 respectively. Last year’s LNG exports were 18 Mt but growing 11% annually so call it 20 Mt for this year. Engineering Toolbox gives a CO2 factor of 2.8 for gas.

    Thus we have
    (153 X 2.39) + (164 X 2.71) + (20 X 2.8) = 866 Mt CO2

    To say Australia is a carbon hypocrite is putting mildly, more like a carbon sleazebag. By 2020 we are supposed to get domestic CO2e down to around 480 Mt from coal, gas, oil, fluorocarbons, fugitive methane and deforestation. Yet CO2 from exported fuels is likely to be double that. Why did we go through this stupid pretence of concern over global emissions?


  88. GeorgeS, on 19 October 2011 at 3:32 AM said:

    Therefore the LCOE of the nuclear component BY ITSELF must be a pretty high number probably approaching PL’s number of 17 cents/kwh.

    PL’s number is based on Australian labor costs being considerable higher then US labor costs and an exchange rate differential.

    The SC plant is on track to cost $4.3US (2007 dollars), which will likely end up being $5.3US billion in actual dollars accounting for inflation in construction costs by the time of project finishes. So the more then 11 cents accounts for inflation in the cost of building the plant.

    One of the difficulties in comparing a capital intensive vs fuel intensive energy technology is what inflators to use for fuel costs.

    Between 1980 and 2000 the cost of coal in the US declined in real terms. Since 2000 the delivered cost of coal has increased 6.7% per year. Much of that in transportation costs the rest in declining productivity. (25% decline in productivity in the last 10 years)

    In South Carolina the current cost of delivered coal is $90/ton -$3.6/GJ . With a 6.7% inflator it will be $160/ton- $6.4/GJ by 2020. SO2/NOx controls are required on all new coal fired plants in the US to the best of my knowledge.

    The EPRI study Peter Lang references uses a mine mouth coal fired plant without SO2/NOx controls in the hypothetical coal plant cases if I read correctly.

    Click to access AEGTC%202010.pdf

    Black Coal prices are for higher ash coal that is generally not considered export parity coal. AUD1.5/GJ was used for the base case analysis…Brown coal price of AUD1.0/GJ is representative of a new mine, cost from existing mines is closer to AUD0.5/GJ. AUD0.75/GJ was used for the base case analysis..

    There is not a lot of fuel cost difference between a brown coal plant with fuel costs of AUD0.75/GJ and a nuclear plant.

    So PL’s point that the cost of electricity from a new nuclear plant would cost double a new coal plant is valid.


  89. Harry,
    fyi my engineer friend who works for GE just got back and flex 50 CCNG is around 1000-1200$/kw. So it looks like up front costs of SC nukes is around 3-4 times CCNG.

    If one looks at LCOE, do you know what the SC nukes are predicted to be and how that compares to LCOE of CCNG?? (I know lots of assumptions like running gas lines etc but just an approximation)


  90. John Bennetts, on 18 October 2011 at 5:04 PM — LCOE comparisons: the NREL sLCOE calculator comes with associated pages which give a range of values for overnight capital costs for various generation technologies. There is also a page for fixed O&M costs. However, for NPPs, after the comments by Cyril R. and checking the results against the completely pid off nearby BWR, for NPPs I use a fixed O&M costs of US$180/kW-yr, a variable O&M of US$0.005/kWh and a fuel cost of 0. These seem to be giving suitable numbers. However, the construction costs reported by World Nuclear News don’t cover the ppp or financing costs; an approximate mutiplier for the USA is 1.25–1.40.

    For wind and solar I try to use either contracted busbar rates when I can find these or else USG loan guarantees and then use the NREL calculator.

    It remains a bit murky; you could try the UN’s IEA?


  91. GeorgeS, on 19 October 2011 at 6:05 AM — Harry previously pointed out that VC Summer has an LCOE of US$0.076/kWh. I checked that using the NREL sLCOE calculator and obtained US$0.074/kWh by assuming a 60 year life for the NPPs.

    Another utility to consder the TVA. Their power upgrade plan includes, other than some CCGTs, finishing a B&W NPP which is 55% complete (and the contract for finishing it, let to Areva, is for about US$3900/kWh. It also includes ‘a’ new NPP which I now intrepret to mean about a half dozen of the B&W mPower units.


  92. David B. Benson, on 19 October 2011 at 7:09 AM said:

    GeorgeS, on 19 October 2011 at 6:05 AM — Harry previously pointed out that VC Summer has an LCOE of US$0.076/kWh.

    Then how is PL coming up w/ 17 cents/kwh. Yes I know it’s Australia but if the up front costs in $/kw are close to the same in US and Australia why is the LCOE so much different??


  93. GeorgeS,

    Therefore the LCOE of the nuclear component BY ITSELF must be a pretty high number probably approaching PL’s number of 17 cents/kwh.

    Yes. You are correct.

    The EPRI (2010) report gives costs in 2009 AUD for total project cost = $5,742/kW and LCOE = $173/MWh. EPRI used an exchange rate for mid 2009 of 1.23. If we convert those figures to mid 2011 USD (to be equivalent to the SV Summers costs reported in the June 2011 status report) the EPRI figures become: total project cost = $5,015/kW and LCOE = $151/MWh.

    The VC Summers #2 and #3 are budgetd to cost $5,227/kW (2011 USD). This is close to the EPRI cost, converted to June 2011 [1], of $5,015/kW. Therefore, if we use the same assumptions for calculating LCOE as EPRI used, then the LCOE of the VC Summers #2 & #3 plants would be = US $151/MWh.


    EPRI cost for nuclear in Australia (EPRI figures converted to June 2011 USD)
    TPC = $5,015/kW
    LCOE = $151/MWh (15.1c/kWh)

    VC Summers #2 & #3 (June 2011 USD)
    TPC = $5,227/kW
    LCOE = $157/MWh (15.7c/kWh)

    Remember, the EPRI figures are for a Greenfield site and the VC Summers figures are for a brownfield site. Therefore, the VC Summers figures would have to be inflated to be comparable with the EPRI figures.

    We can conclude from this that EPRI figures for Australia are more likely to be an underestimate than an overestimate of the cost of nuclear in Australia.

    Therefore, this confirms that the realistic cost figure to use in the Martin Nicholson paper [2] is the high end of the range. This supports this comment: (this comment has not been refuted so I think we can safely assume is it accepted as correct).

    [1] Conversion USD to AUD on 30 June 2011

    [2] Cutting Australia’s carbon abatement costs with nuclear power


  94. I should have also inflated the EPRI figure by about 2% (from 2009 to 2011) as per the inflation figures in Appendix 4, Chart A here This would change the EPRI figures to:

    EPRI cost for nuclear in Australia (EPRI figures converted to June 2011 USD)
    TPC = $5,115/kW
    LCOE = $154/MWh (15.4c/kWh)

    VC Summers #2 & #3 (June 2011 USD)
    TPC = $5,227/kW
    LCOE = $157/MWh (15.7c/kWh)

    That makes the EPRI and VC Summers figures are even closer.


  95. I checked the summary of the EPRI report

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

    to see if financing costs included a risk premium for nuclear. It seems they used 8.4% weighted cost of capital for all generation technologies. That’s the theory but the facts on the ground are
    1) about 45% of the capital costs for the solar flagship projects in Moree NSW and Chinchilla Qld will be paid by the Feds ie no interest and no repayments
    2) the 2000 MW coal retirement fund may be very generous (details are vague), again perhaps 0% interest and low/no repayments on substantial sums.

    The green utopians would no doubt go berserk if nuclear got similar handouts to wind, solar and geothermal. Unfortunately we may have to wait to show these other projects underperform.


  96. John Newlands,

    The green utopians would no doubt go berserk if nuclear got similar handouts to wind, solar and geothermal. Unfortunately we may have to wait to show these other projects underperform.

    A better way would be to jettison the trenchant opposition to a ‘direct action’ approach. Instead of “wait to show these other projects underperform” we could remove the mass of regulatory and other impediments that are preventing nuclear being competitive with coal. I suggested a way we could do that in numerous comments on previous threads and summarised here:

    By the way, we’ve had at least 20 years of “wait to show these other projects underperform”. It’s been shown continuously. How long do you argue we should keep trying that approach?

    This saying is applicable:
    if we always do what we always did,
    we’ll always get what we always got


  97. Looking at Appendix M in the file found by harrywr2:

    Click to access 3B3E3E6F-F48A-A3C5-50C13F96CFDBA604.pdf

    and simply crudely taking the sum total (including transmission facilities), using the approximately 2.234 GW for a brace of Westinhouse AP1000s, I find a crude capital cost of US$5140/kW.

    Assuming a 30 year loan @ 11% and the values previously stated for the other data in the NREL sLCOE calculator, the LOCE over the life of the loan is US$0.100/kWh. Now assuming the units have a useful life of 60 years, for the last 30 of those the LCOE is about US$0.059/kWh which averages to $0.0795/kWh (there are surely some inaccuracies in the way I have done this, but no serious ones; I am under the impression that Southern Co. states the LCOE is US$0.076).

    So I have no idea how (very) much larger LCOE values for VC Summer have been obtained.


  98. @John Newlands – “Yet CO2 from exported fuels is likely to be double that. Why did we go through this stupid pretence of concern over global emissions? ”

    Perhaps we should get our own house in order before we say rude things about our customers’ habits. There are an awful lot of them, and they may not like it.

    Moral turpitude? Maybe. If you and I are not getting rich from our (Aust) carbon exports, our suburban neighbours are. And our superannuation policies, and our real estate. Jobs? More jobs than we can afford to risk on such talk. Not in a crowded bar, anyway.

    We could at least try to lift our moral standards up to that of opium farmers who say it is alright to export it, as long as we don’t smoke it ourselves.

    Starting at home, we can work on the alternatives, such as looking for storage for small grids and nukes for big grids.


  99. RC it’s the hypocrisy. I’m pretty sure the host nations of all our coal customers were represented at the climate conferences. Perhaps on the way home they forget their promises to cut back. Even Kyoto in Japan the birthplace of such conferences may be using more imported coal.

    In my opinion our coal and gas exports should decline after 2015 when we go to a CO2 cap based system that is internationally consistent. We cut x% they cut x%. It would be utterly bizarre if we were making billions selling fossil fuels to foreigners then paying billions to foreigners for carbon credits. The alternative could be to neither buy nor sell virtual CO2. I can predict this issue will go ballistic as the day draws near.

    We don’t sell alcohol to minors as they are considered irresponsible consumers. Ditto coal and LNG. Like minors they may be able to get what they want elsewhere but it will get tougher. As a backup measure to reduced fuel exports I suggest an alliance between Europe, Australia and Scandinavia. That alliance can slap a carbon tariff on goods from greenhouse non-compliant nations (read India and China) to start the ball rolling. Sarkozy likes the idea for France. it’s clear to me nothing will happen until it starts to get nasty or depletion slows everything down.


  100. Another correction to the cost figures in my comment @ 19 October 2011 at 8:59 AM

    I’ve re-read Harrwr2’s comment of 18 October 2011 at 2:13 AM (which I had misinterpreted previously) and Appendix 2 of the VC Summers June 30, 2011 status report [1]. I’ve also applied the inflation factors from Appendix 4. I’ve revised the complete comment and figures below. My apologies for the corrections (and repetition).

    GeorgeS, @ 19 October 2011 at 3:32 AM

    Therefore the LCOE of the nuclear component BY ITSELF must be a pretty high number probably approaching PL’s number of 17 cents/kwh.

    Yes. You are correct. (but a little less in 2011 USD)

    The EPRI (2010) report gives costs in 2009 AUD for total project cost = $5,742/kW and LCOE = $173/MWh. EPRI used an exchange rate for mid 2009 of 1.23. If we convert those figures to mid 2011 USD (to be equivalent to the SV Summers costs reported in the June 2011 status report) the EPRI figures become: total project cost = $4,763/kW and LCOE = $143/MWh.

    The V. C. Summers 2 and 3 are budgetd to cost $4,571/kW (2011 USD). This is close to the EPRI cost, converted to June 2011 [2], of $4,763/kW. Therefore, if we use the same assumptions for calculating LCOE as EPRI used, then the LCOE of the V.C. Summers 2 & 3 plants would be = US $138/MWh.


    EPRI cost for nuclear in Australia (EPRI figures converted to June 2011 USD)
    TPC = $4,763/kW
    LCOE = $143/MWh (14.3c/kWh)

    V. C. Summers 2 & 3 (June 2011 USD)
    TPC = $4,571/kW
    LCOE = $138/MWh (13.8c/kWh)

    Remember, the EPRI figures are for a Greenfield site and the V. C. Summers figures are for a brownfield site. Therefore, the V. C. Summers figures would have to be inflated to be comparable with the EPRI figures.

    We can conclude from this that EPRI figures for Australia are more likely to be an underestimate than an overestimate of the cost of nuclear in Australia.

    Therefore, this confirms that the realistic cost figure to use in the Martin Nicholson paper [3] is the high end of the range. This supports this comment: (this comment has not been refuted so I think we can safely assume is it accepted as correct).

    [1] V. C. Summer Nuclear Station Units 2 & 3; Quarterly report; Quarter ending June 30, 2011

    Click to access 2011Q2BLRAReport.pdf

    [2] Conversion USD to AUD on 30 June 2011

    [3] Cutting Australia’s carbon abatement costs with nuclear power


  101. GeorgeS, on 20 October 2011 at 3:28 AM said:

    So is the LCOE of VC summers 7.6 cents/kwh or 13.8 cents/kwh??

    Maybe it has to do w/ the length of time that the LCOE is calculated as David B. Benson, on 19 October 2011 at 11:31 AM said.


  102. David B. Benson, on 19 October 2011 at 3:31 PM said:
    A suggestion floated on some Open Thread was to form a cartel of the major coal exporting nations; all would extract a similar sized minerals tax on coal exports.

    Using imported coal or natural gas already carries with it a substantial transportation cost premium.

    Platts June 2011 international coal price report –

    Click to access intlcoalreport.pdf

    Using imported coal for baseload doesn’t compute lacking external factors such as lack of access to nuclear technology, lack of access to uranium or lack of public acceptance of nuclear power.

    India was on the nuclear suppliers group blacklist for a long time due to their dabbling in nuclear weapons.

    It’s only been 2 or 3 years since the US and other members of the nuclear suppliers group worked out a legal framework for ‘non-alligned’ countries to acquire civilian nuclear technology without someone threatening to drop a bomb on their heads.


  103. GeorgeS, on 20 October 2011 at 3:41 AM said:

    So is the LCOE of VC summers 7.6 cents/kwh or 13.8 cents/kwh??

    Here is a presentation given by EPRI in 2010…LCOE appears to be in the 8 cent/Kwh range.

    Click to access E234049_R_James_-_Prospects_of_Nuclear_Power.pdf

    If I finance $4.5 billion at 8.5% for 30 years I get an annual loan payment of $421 million. At 90% utilization I get 7884 GW of electricity for a loan cost per KW/h of 5.3 cents.

    If I capitalize the construction costs of VC Summer at 8.5% interest using the schedule of VC Summer I end up with a total cost of $6.8 billion for 55% of 2.2 GW. 6.8/(2.2 * .55) = $5,600/Kwh. The loan payment ends up being $516 million per year. 6.5 cents/KWh.

    If I look at the annual budget for Columbia Generating Station a 30 year old 1.1GW reactor, the annual budget ends up being 3.2 cents to 4.2 cents/KWh depending on whether it is an outage year.

    Click to access Section%202%20-%20Columbia%20Generating%20Station%20and%20Long-Range%20Plan.pdf

    So if I average 3.2 and 4.2 cents/KWh operating costs = 3.6 cents/KWh

    5.3 + 3.6 = 8.9 cents/KWh
    6.5 + 3.6 = 10.1 cents/KWh

    It’s hard to compare American apples to Australian apples.
    VC Summer is being built as a pair. So licensing costs are split across two units rather then 1 unit.

    In addition some of the licensing costs were shared by a consortium and DOE rather then a single utility building one nuclear power plant.

    Click to access NuStartFactsheet-1-22-08a.pdf


  104. GeorgeS,

    So is the LCOE of VC summers 7.6 cents/kwh or 13.8 cents/kwh??

    Maybe it has to do w/ the length of time that the LCOE is calculated as David B. Benson, on 19 October 2011 at 11:31 AM said.

    The LCOE of VC summers is 13.8 cents/kWh using the same assumptions as EPRI used. Changing the payback period to 60 years makes little difference to the calculations; none of the authoritative studies use that payback period period. You can read all the assumptions in the EPRI report I referenced. You can also get a good explanation of the methodology used in the UMPNE report referenced in Martin Nicholson’s paper. DBB might also find this explanation helpful.

    [4] EPRI (2006) Review and Comparison of Recent Studies for Australian Electricity Generation Planning:


  105. The figures cited in sidebar article show that over the half the tonnage of coal exports was for coking coal. According to Wiki a tonne of steel co-produces 1.7t of CO2. If India couldn’t get coking coal from Australia I think they would have to go to South Africa. Given that nobody is going to make steel with hydrogen any time soon the first priority should be phasing out thermal coal. I don’t think swapping with gas is the way to go as we should conserve gas. The deal should be less thermal coal more uranium. This is how Australia could strongly influence world carbon flows despite our small population.


  106. Harry,
    Thx for the response. Please bear w/ the dumb new guy a while longer :)

    Here is what I am trying to get at:

    We know that NPPs are very expensive up front BUT they sit there year after year cranking out power at or near 100% load (if things go correctly). They also have low fuel costs compared to fossil. Not sure about maintenance costs vs fossil. Also I suspect that the life of a nuclear plant is longer than most fossil plants.

    Therefore even though NPP has an up front cost of 3-4 times the fossil plant the LCOE of the nuclear plant should not be a factor of 4 higher than fossil due to the above stated advantages of NPPs.

    so just to pick a number for the SC plants of about 8 cents/kwh LCOE we have the following comparison of NPP vs fossil.

    4763$/kw——> 8 cents/kwh LCOE for the SC nukes

    1200$/kw——-> ???? cents/kwh LCOE for GE flex50 CCNG

    So what value is ???? cents/kwh for GE Flex50 CCNG???

    My point is it should NOT be a factor of 4 less due to the reasons stated in paragraph 1 above.

    My guess is 4 cents/kwh (except for the fact that NG is dirt cheap right now in the US so maybe it IS 2 cents/kwh).

    and obviously there are no penalties in the numbers for a $/ton price of CO2.


  107. Harrywr2,

    We posted our replies to GeorgeS at about the same time. We have given different answers, and this will be confusing for readers. I’ll try to track down why our answers are different. Part of it will be the handling of owners costs. These are not well explaind in the EPRI (2010) report but they are a large component of the cost.

    You say:

    It’s hard to compare American apples to Australian apples

    but that does not explain the difference in this case. I converted the EPRI (for Australia) total project cost to 2011 USD. The TPC for the two plants ($4,763/kW and $4,571/kW) are similar so what comprises those figures is not relevant in the conversion to LCOE. They are just a total project cost figure. Then we convert those figures to LCOE using the same assumptions (including the owners costs, which are not explicitly stated in the EPRI report). In that case we get LCOE of 14.3c/kWh and 13.8c/kWh (USD) for the two plants.

    Therefore, to get an LCOE of 8c/kWh there must be some significantly different assumptions used in the analysis.

    I’ll try to find the cause of the differencs today. If you can spot whay the differences first, that would be great.


  108. GeorgeS, on 20 October 2011 at 7:29 AM said:

    So what value is ???? cents/kwh for GE Flex50 CCNG???

    THe math on fuel costs for a 33% efficency fossil fuel plant ends up being pretty cost to $1/MMBtu = 1 cent/KWh.

    1 KWh = 3412Btu/hr

    1,000,000 Btu/ 3412 = 293 KWh.
    Then plug in the efficiencey

    If we use a plant that gets 50% then 293Kwh = 146KW.(GE claims 60 but that is under optimal conditions.

    So if we paid $1/MMBtu for our natural gas we would get 146KWh for a fuel cost of 0.68 cents/Kwh.

    Of cours gas is more then that…the average price delivered to an electric utility is running at about $5.20 – So we have a fuel cost of $3.56 assuming the plant is run at 50% efficiency. GE claims 60%.

    US Delivered natural gas prices for electricity sector

    if we assume $1.2B/GW as out capital cost our loan payment at 8.5% = $92 million/7884 (8760 hours * .9) our finance cost is 1.16 cents per KWh.

    3.56 + 1.16 = 4.72 cents per Kwh + O&M costs exclusive of fuel. US DOE estimates LCOE of natural gas advanced combined cycle to be about 6.6 cents/KWh and nuclear around 11 cents.


  109. harrywr2, on 18 October 2011 at 5:22 AM said:

    GeorgeS, on 18 October 2011 at 2:58 AM said:

    .asked in another way what is going to happen to the SC customers projected cents/kwh they pay on their monthly bill??

    It’ll go from an average 8.3 cents to 11.4 cents/KWh in 2020 assuming fossil fuel costs for their remaining generating equipment doesn’t increase at least according to this 210 page document filed in 2008 with the S C Regulators –

    A change from 8.3 cents to 11.4 cents over a 9 year period comes out to about a 4% increase per year. While this number is greater than inflation, it does not seem exorbitant for a utility that just took on a large amount of capital expenses, and will have reduced its fuels costs outlay for the next half century.

    The question is do the customers of the utility over the course of the life of the 2 units have a net benefit in total costs vs. say a cheaper capital but more expensive fuel plant like NG? I don’t have good enough information to answer this question.


  110. Nuclear power continues to die of an incurable attack of market forces. A huge and capable propaganda campaign by the industry and its political allies is spinning an illusion of a renaissance that deceives credulous journalists but not hard-nosed investors.

    The U.S. first got 19 percent of its electricity from nuclear power in 1988 [it] has fluctuated around that share ever since (peaking at 20.6 percent in 2001), and had a 19.4 percent share in 2006, officially projected to fall to roughly 15 percent in 2030.

    Without those nuclear plants, current U.S. CO2 emissions would have been higher if coal plants had been bought instead, or lower if cheaper, low- or no-carbon resources – efficiency, cogeneration, and renewables – had been bought instead.

    New nuclear plants are bought (sparsely) only by central planners, not in free markets. America’s, China’s, India’s, and Finland’s powerful nuclear lobbies cling to life in noncompetitive intensive-care units. My bias is to trust capitalists in New York more than bureaucrats in Beijing; if yours is different, I can understand how you might reach different conclusions.

    Not a single new nuclear project on earth has received a penny of private risk capital: they’re unfinanceable in the private capital market. The industry is therefore making strenuous efforts to get a $50 billion DOE blank check, and to shift to ratepayers, taxpayers, and unsophisticated officials of small public utilities (remember WPPSS?) the risks that private investors shun.

    The new Finnish reactor was authorized by an odd political process based on a cooked and limited-access study, then financed from captive customers’ long-term power-purchase contracts via heavily subsidized and allegedly illegal deals with French and German subnational parastatals. Once the industry’s poster child, the plant is two years late (the more they build it, the behinder they get) and hideously over budget. The builders are reportedly trying to renegotiate their ruinous fixed-price contract.

    The U.S. has had no new nuclear orders since 1978 (NRG’s Texas proposal isn’t an order—just a license application to establish subsidy priority), and every plant ordered since 1973 has been cancelled, despite decades of a cozy industry-designed regulatory system that bars effective public scrutiny and participation.

    S&P found that new 2005 U.S. subsidies roughly equal to the next six units’ capital costs (on top of big prior subsidies) won’t materially improve builders’ credit ratings, because most of the risks that concerned the capital markets remain. This unprecedented bailout experiment will probably have the same effect as defibrillating a corpse: it will jump, but it won’t revive.

    China has a world-leading nuclear goal of 40 GW by 2020 (enough to offset a tenth of global retirements meanwhile), but by 2006 had already installed a world-leading 49 GW of distributed renewables—seven times its 2005 nuclear capacity, increasing by sevenfold more GW per year. India gets 3 percent of its electricity from nuclear, but has far more wind power, ranking #3 in world wind expansion. No wonder: wind kWh are two to three-fold cheaper.

    Here’s how I view the competitive landscape for electrical services. Only two careful nuclear cost studies rest on empirical data: the 2003 MIT study found nuclear can’t compete with coal or gas; the 2007 Keystone study found nuclear costs 8 to 45 percent higher still. My analysis compares nuclear power (at the lower MIT costs) with the empirical costs of “micropower” and “negawatts,” which are far cheaper and hence are walloping all central plants in the global marketplace. (Details are in my December 2005 Nuclear Engineering International article “Mighty Mice” (RMI Publ. #E05-15), its backup #E05-14, my Royal Academy of Engineering lecture #E06-04, and our micropower database #E05-04, all at

    “Micropower” is The Economist’s term for cogeneration (two-thirds gas-fired and very efficient, saving over half the carbon), plus renewable generators, minus big hydro (greater than 10 MW). Worldwide in 2005, micropower:

    – generated one-sixth of all electricity and one-third of all new electricity;
    – generated from one-sixth to more than one-half of all electricity in 13 industrial countries;
    – added 4 times as much electrical output and 11 times as much capacity as nuclear added.

    Worldwide in 2006, micropower generated more electricity than nuclear power; nuclear power brought online 1.49 GW, less than photovoltaics did (1.74 GW) and a tenth what wind power did (15 GW). Nuclear lost 0.5 net GW (retirements exceeded additions) while micropower added roughly 34 GW. Distributed renewables got $56 billion of private investment while nuclear got zero.

    Negawatts (saved electricity) rival micropower in annual capacity effect. Both together probably now provide more than half the world’s new electrical services; central stations – nuclear, fossil-fueled, and big hydro – have less than 50 percent market share. The revolution already happened – sorry if you missed it.

    What part of this picture does anyone who takes markets seriously not understand? The small, fast options are triumphing in the global marketplace, because investors prefer their lower costs and risks. Their potential is enormous – for wind power alone, 35 times that of world electricity use – and they need less back-up than intermittent big thermal stations need now.

    Furthermore, efficiency has reduced energy use per household in places like Vermont that pay attention and invest properly. California has held per-capita electricity use flat for 30 years – saving 65 peak GW and more than $100 billion of power-system investment – while per-capita real income rose 79 percent, and is now accelerating those savings. But even these exemplars have barely scratched the surface. Fully applying modern efficiency’s potential would save half of U.S. oil and gas use at a sixth and an eighth of their respective prices (, and three-fourths of electricity at an eighth of its price (,, [Technology Atlas series]). I’m a practitioner, not a theoretician, and these findings are empirical: my team has lately redesigned more than $30 billion worth of corporate facilities in 29 sectors for superefficiency, generally at lower capital cost.

    We see electricity demand ratcheting downward over the medium and long term. The long-term prospects for selling more electricity are dismal….We will never get, we suspect, to a high enough price to justify building centralized thermal power plants again. That era is over.

    My 1976 Foreign Affairs article, which used a 50-year time horizon, accurately predicted the heretical “soft path” graph was 4 percent below actual U.S. energy consumption in 2000, without – or 1 percent above, with – normalization to actual GDP growth. U.S. electric intensity is trending downwards (falling by at least 2 percent in 6 of the past 10 years) although 48 states rewarded utilities for selling more electricity and penalized them for cutting customers’ bills. That perverse incentive is now reversing. This plus cost and climate pressures and revolutionary techniques will, I believe, ultimately make electricity demand stabilize and then decline in most states as it has in some. Most electricity is now wasted, and ultimately, economics wins. New central plants are uneconomic and getting more so.

    U.S. electricity consumption growth averaged 2.82 percent per year in 1984-2000, 1.2 percent per year in 2000-05, and 0.1 percent in 2006. Electric intensity fell by at least 2 percent in six of the past ten years. Cost and climate pressures and revolutionary efficiency techniques will ultimately make electricity demand stabilize and then decline in most states as it has begun to do in some. Most electricity is now wasted, and eventually economics wins. New central plants are uncompetitive and getting more so.

    More and bigger power plants and power lines are a key cause of more and bigger blackouts; roughly 98 to 99 percent of U.S. power failures and glitches originate in the grid, not from inadequate supply. CCGT power plants are cheaper and more reliable than the grid, so affordable and reliable power should now be generated at or near the customers. My Economist Book of the Year, Small Is Profitable (, documents how the same decentralization that has swept telephony and computing can make electricity roughly 10 times more valuable by capturing 207 “distributed benefits”: e.g., less financial risk from small fast units than big slow ones, and lucrative fuel-price hedging from renewables.

    USEIA reports U.S. electricity sales averaged 1.15 percent per year of growth from 2000-06, [and] 0.1 percent in 2006. But if they did grow quickly, the cheapest and fastest remedies would be efficient use and demand response, then micropower.

    Industrial countries should set a good example of least-cost energy investment, and help spread best not worst buys. More nuclear plants would worsen global warming by displacing 2 to 10 times less coal per dollar, more slowly, than negawatts and micropower (see “Mighty Mice”). I favor internalizing carbon costs (incumbents too must bid for allowances), but correct prices are less important than ability to respond to price, via “barrier-busting” (Climate: Making Sense and Making Money,

    The U.S. can hardly criticize China: America heavily promotes and subsidizes coal and coal-fired power stations, hasn’t (as China did until 2001) cut its energy intensity over 5 percent per year for a quarter-century, and doesn’t (as China has) make energy efficiency its top strategic priority. Like Thomas Friedman, I expect China will become a leader in energy efficiency (as it already is in renewables) and in climate protection, because otherwise it can’t afford to develop.

    Cutting global energy intensity not by the usually assumed 1 percent per year but by 2 percent per year would stabilize carbon emissions; 3 percent per year would stabilize climate (if it’s not already irreversibly damaged). But smart companies routinely and very profitably cut their carbon intensity or even their absolute carbon emissions 6 to 9 percent per year. I don’t see why 3 percent per year is hard, nor why it should be costly, since essentially everyone who buys energy efficiency makes money. Efficiency costs less than energy, so climate protection is not costly but profitable.

    We can solve the climate, oil, and proliferation problems at a profit – led by business – if we simply let all ways to save or produce energy compete fairly, at honest prices, regardless of their type, technology, location, size, or ownership. Norway already gets 100% of its electric power from distributed renewables, including wind. This is economics, plain and simple. Who’s not in favor of that? Are you? If so, you can join me in looking forward to a nuclear-free future and a richer, fairer, cooler, safer world.


  111. @John Newlands,

    You have to admire the spin on the reason given for the abandonment of the Scottish coal CCS project:

    The energy secretary told MPs the length of pipeline needed to take the CO2 to the undersea reservoirs made the scheme “unviable”.

    Really, I would have thought they would have considered this before commencing, and no doubt they did. The energy secretary is being somewhat less than forthright about the debacle.


  112. Several studies, including the Northwest Power & Conservation Council’s 6th five year power plan, rank CCGT as lowest cost, then wind and then NPPs. However, contract rates for wind farms in this region are running around US$0.061/kWh and rising at 4% per year for the life of the 20 year contract; that’s an LCOE of about $0.09/kWh. The thorough analysis of VC Summer’s cost justification documents results in the previously mentioned LCOE of US$0.076+/kWh. (That’s too high for ERCOT, the Texas power grid.)

    What seems quite certain is that the capital cost of CCGT equipment but also currently available Gen III+ NPPs is going to go up at about 4% perr annum. However, once the Gen III small modular NPPs are available the construction cost for NPPs will abruptly drop (but not a lot) due to build-in-factory efficiencies. The price of natgas? Dunno; EIA has been very poor at predicting this market.


  113. quokka the funny thing is there is a 1200 km gas pipe ‘Langeled’ under the North Sea from Norway to the UK, as seen on SBS ‘Coast’. Seems cost of piping is not a problem if the waste products go into the atmosphere.

    DB I see NG is selling for as low as $3.90 per mmbtu or gigajoule in parts of the US. Call it 0.4c per MJ but in Australia CNG diesel substitute could sell for 4c per MJ inclusive of fuel tax, a 10-fold price increase If the world trucking industry takes to CNG en masse perhaps the equilibrium gas price will settle about half way, say (40 + 4)/2 = $22. That price will be too hot for stationary users like power stations. Nukes will look cheap by comparison.


  114. John Newlands — Thanks for the guess. The independent, i.e., merchant owned, natgas CCGT electric power producers tend to go bankrupt already at around US$0.11+/MJ; at least that happened to one unit in this area when the price of natgas peaked.


  115. Harrywr2 and GeorgeS,

    I believe I’ve found the reason for the discrepancy between the LCOE figures I calculated for VC Summers and the LCOE EPRI stated in the link provided by Harrywr2. The discrepancy is because the VC Summers capital cost figure we used includes the owner’s costs whereas the EPRI figure for Australia does not. That is, the VC Summers capital cost figure is for Total Funds Required (TFR) whereas the EPRI figure (e.g. in Table 9-2) is for Total Project Cost (TPC). I’ve back calculated the owner’s costs it seems EPRI used; it seems TFR is almost twice TPC in the EPRI report. I’ll provide the figures in a separate comment. In the meantime, I’ve extracted some relevant sections from the EPRI report for Australia . These will help to understand the basis of the capital cost figures.

    All capital and O&M costs are presented as “Overnight Costs” expressed in June 2009 AUD.
    Capital Costs are presented at the TPC level. TPC includes:

    • equipment (complete with initial chemical and catalyst loadings);

    • materials;

    • labour (direct and indirect);

    • engineering and construction management;

    • contingencies (process and project); and

    • an allowance for project specific costs.

    Owner’s costs are excluded from TPC estimates.

    • The TPC estimates include all anticipated costs for equipment and materials, installation labour, professional services (engineering and construction management), and contingency. The following items are excluded:
    • escalation to period-of-performance;

    • owner’s costs – including, but not limited to land acquisition and right-of-way, permits and licensing, royalty allowances, economic development, project development costs, allowance for funds-used-during construction, legal fees, owner’s engineering, pre-production costs, initial inventories, furnishings, owner’s contingency, etc;

    • all taxes, with the exception of payroll taxes;

    • site specific considerations – including but not limited to seismic zone, accessibility, local regulatory requirements, excessive rock, piles, laydown space, etc;

    • additional premiums associated with an EPC contracting approach; and

    • import duties.

    To better represent real project costs, a nominal 7.5% allowance for the cost of other project and site specific factors has been included in the TPC presented in later sections of this report.

    Project Specific Costs

    Typically, EPRI cost estimates do not include project specific costs, such as site and technology selection studies, rights of way, road modifications and upgrades, permitting, and many other costs which depend on the owner and site-specific requirements. While it is difficult to calculate these types of costs for a general cost estimating study, they are costs that are none-the-less real and must be paid for via project revenue. Therefore, this study added an assumed 7.5% to the TPC to reflect an estimate of project specific costs.


    After total plant cost was developed for all of the technologies, the total capital required was calculated for cost of electricity calculation purposes. The total capital requirement (TCR) includes all capital necessary to complete the entire project. It consists of the following costs:
    • total plant investment at the in-service date, including an allowance for funds used during construction (AFUDC), sometimes called “interest during construction”; and

    • owner costs, such as:

    – prepaid royalties

    – preproduction (or startup) costs

    – inventory capital (fuel storage, consumables, etc.)

    – initial cost for catalyst and chemicals

    – land

    The owner costs included in this study were preproduction costs and inventory capital. Land costs and prepaid royalties were not included in TCR. However, the levelised cost of electricity tabulations in Section 10 of this report include a percentage allowance for other owner’s cost items that are typically required for an actual project.
    Preproduction Costs

    Preproduction costs cover operator training, equipment checkout, major changes in unit equipment, extra maintenance, and inefficient use of fuel and other materials during startup. For EPRI purposes, preproduction costs are estimated as follows:

    • one month fixed operating costs (operating and maintenance labour, administrative and support labour, and maintenance materials). In some cases this could be as high as two years of fixed operating costs due to new staff being hired two years before commissioning the plant;

    • one to three months of variable operating costs (consumables) at full capacity, excluding fuel. These variable operating costs include chemicals, water, and other consumables plus waste disposal charges;

    • twenty-five percent of full capacity fuel cost for one month. This charge covers inefficient operation during the startup period;

    • two percent of TPC This charge covers expected changes and modifications to equipment that will be needed to bring the unit up to full capacity; and

    • no credit for by-products during startup.

    Inventory Capital

    The value of inventories of fuels, consumables, and by-products is capitalised and included in the inventory capital account. The typical practice for fuel and consumables inventory is shown in Table 4-3. These assumptions are based on delivery of coal by rail and will change depending on current economic conditions and transportation bottlenecks. For the mine-mouth coal plants included in this study, only 5 days of on-site coal storage is required.
    An allowance for spare parts of 0.5% of the total plant cost is also included.

    The Components of Fixed Charges

    Annual fixed charges include the following components:

    • book depreciation;

    • return on equity;

    • interest on debt;

    • income taxes; and

    • property taxes, insurance, and other taxes.

    Calculating Annual Capital Revenue Requirements

    The annual capital, or fixed, charge is the sum of the book depreciation, return on equity, interest on debt, income taxes, and property taxes and insurance for a given year. To calculate the lifetime revenue requirement of a plant, the present value of these annual capital charges is calculated for each year and summed to determine the total present value. The present value is calculated based on the weighted average cost of capital (WACC) or discount rate, which is the product of the cost of debt (or interest rate) and the percentage of debt financing plus the product of the cost of equity and the percentage of equity financing.

    I’d urge anyone interested in understanding this to read Sections 4 and 5 of the EPRI report:

    Click to access AEGTC%202010.pdf

    What EPRI does not give is the actual figures that would allow us to calculate the Total Funds Required (TFR). So I’ve done a rough back-calculation to work out what EPRI used for the owner’s cost. Hold your breath – it’ll be in the next comment (but perhaps not today :)


  116. Still on the subject of cost and emissions of natural gas, including CSG:

    The Conversation has very meaty discussion starter at:

    Sorry about the long url. I am not yet proficient with tinyurls.

    In an article about the baffling nature of the illness which is affecting both sea life and fishermen in the Gladstone/Curtis Island area during construction of export facilities for Qld’s gas expansion, casual mention of 37Mtpa CO2-e emissions crops up due to production activities throughout the 30 year life of the project.

    In trying to get my head around this, I have started to work through one of the relevant EIS’s. The construction and dismantling operations (as identified in Volume 4 and Chapter 31 – GHG of Volume 5 of the EIS) list projected emissions during construction, production, transport, even end-user activities off site, plus more.

    Some very preliminary comments are:
    1. The GHG accounting in Vol 5 appears not to include GHG associated with air travel (FIFO) or long distance road commuting (DIDO) workers, each of whom will work 4-weeks-on, 4-off patterns, despite these having been listed in Volume 4. For a workforce of 1800 peak and construction period of 9 years, I estimate that there will be about 200,000 person round-trip journeys for workers, plus a further 50% for consultants and other non-working visitors. This 300,000 journeys are not included in Chapter 5’s reckoning of GHG, which counts road journeys starting from the city of Gladstone.

    Why am I mentioning this on BNC?

    I am forming the idea that the extraction, processing and transport of CSG results in large and significant discharges of CO2 to atmosphere, as do also the processes which are involved in manufacture of the materials of construction of the wells, pipelines, processing plants, shipping facilities and so forth. The question is “how large?” Simple calculation of CO2 impact at the end-user power station is inadequate to account for these other emissions. 37Mtpa, it now seems, might be a substantial underestimate of Gladstone’s impact. I hope to be able to extract some better whole-of-life emissions from all sources for this project and to work them back across the whole of life output, thus establishing a reasonable approximation, in the Australian context, of the additional CO2 penalty which CSG implies. This additional penalty will then be attributable to the end use activity, typically electricity generation in a CCGT at about 65% thermal efficiency. Even worse is if CCGT plant is being run in OCGT mode for load-following and at start-up if used intermittently. Worst of all, is if the generation takes place in OCGT peaking plant at 35+% thermal efficiency.

    Others will have done this work before me. If their work is available on line, I’d appreciate a reference.

    The EIS can be found at :


  117. If Amory Lovins is correct, then gas and coal it is for the future. With CCS a no-go, we’d better learn to adapt to warming. In that case, we shouldn’t waste any more money – like CO2 Tax and ETS – on trying to prevent warming.

    The other alternaative of cousre, the one BNCers dont want to consider, is to take “direct action” to allow nuclear to be cheaper than coal in a genuine market economy for electricity.

    Who saw the SBS documentary on the salvaging of the Russian nuclear powered and nuclear armed submarine, K129? It sank in the middle of the Pacific Ocean in 1968 and the Americans salvaged it in 1974. It’s a fantastic documentary. It shows what engineers can do in a hurry when they are given the command to do a job. The world could have economically viable SMR’s quickly too, if we gave the job to engineers, kept it secret, and got on with the job.


  118. Talking of Gladstone area the Boyne aluminium smelter is up for sale by Rio Tinto. Its CO2 emissions are over 0.5 Mtpa from CO2 in electricity generation and onsite perfluorocarbons. PFCs have a warming potential over 6,000 times CO2.

    is this an early casualty of carbon tax? Since few Australians believe in carbon tariffs perhaps Rio might let the business revenue slip through to China. That is retire the Gladstone plant and let China take up the slack. Few countries will slap a carbon tariff on aluminium made in China. Aluminium ingot requires 15 kwhe per kg I believe.


  119. John Newlands,

    You have stated exactly what will hwppwn under a CO2 Tax and ETS. We’ll shut down high emissions manufactruing in Australia. Other countries will take it up. They will emit juast as much CO2 as Australia. So the wolrd will not reduce emisisons. But Australia will lose revenue and lose manufacturing jobs. Importantly, we will be worse off. So we will be less aboe to provide the standard of living improvements, the services, the infrastructure thatr people want. And we’ll be less able to implement the best policies to adapt to whatever climate changes occur.

    Australia’s CO2 Tax and ETS is an own goal.


  120. I will look forward with interest to reading further responses to Amory Lovins’ post.

    Correctly, I think, he states that nuclear is suffering “an incurable attack of market forces”, adding that “not a single new nuclear project on earth has received a penny of private risk capital”. He appears to presume that the superior wisdom of the market proves his case that nuclear offers no realistic solution, stating that he has a “bias to trust capitalists in New York more than bureaucrats in Beijing”.

    Lovins suggests “that small fast options are triumphing because investors prefer their lower costs and risks”. Of course they do, but how many would have poured their money into wind and solar investments had state subsidies been absent?

    In his final paragraph, Lovins makes the plea that all clean energy generating technologies be allowed to compete on a level playing field. I would venture to suggest that, should this come to pass, nuclear would win. If one absents state subsidies, one would not expect private investors to invest in any clean technology until fossil fuel prices rose more or were made artificially more costly through carbon taxation.

    Peter Lang is constantly pleading for suggestions as to how to make nuclear cheaper. Amory Lovins may have done more to answer him than he thinks. However, they both appear to share the ideological view that the free market will, in all cases, come up with the best solutions. In most cases, I would concur, but I am of the view that very long term infrastructure projects must have state direction. Without the latter (involving either state owned and run operations or public private partnerships which involve subsidies) they won’t happen because of very high discount rates.

    The free market also imposes another obstacle to lowering nuclear costs in its predisposition to risk aversion. New generation reactors, with potentially cheaper inherent (as opposed to expensive engineered) safety and operating at higher temperatures offer the prospect of cheaper power. It seems unlikely that these will be developed without considerable state support, especially as most existing private builders of current nuclear designs would have no wish to accelerate their redundancy.


  121. Amory Lovins:

    “My bias is to trust capitalists in New York more than bureaucrats in Beijing…”

    My bias is not to trust capitalists in New York too much, when it comes to long-term thinking as opposed to making a quick profit. I would think the recent years would have been a pretty enlightening example about short-term incentives inherent in the system. Of course, if you think the free market and quarterly capitalism is the end-all solution, I can understand how you reach your conclusions.

    “Not a single new nuclear project on earth has received a penny of private risk capital: they’re unfinanceable in the private capital market. ”

    I’m not certain what you exactly mean by this, but two new reactors (Pyhäjoki-1 and Olkiluoto-4) are planned in Finland with 100% funding from industrial and municipal customers. They also wanted a third, but the parliament gave permission for only two. You may be right in that the participants are “captive customers” but they seem to be quite happy captive customers as they are ordering more – and there was hue and cry because not all who wanted a share could be accommodated. Perhaps they are very stupid, perhaps not.

    (Of course, as with any large-scale industrial project, the government is involved in some capacity and with some investments that you could call subsidies if you wish. I fail to see how this is much different compared to other energy projects.)

    “China has a world-leading nuclear goal of 40 GW by 2020 (enough to offset a tenth of global retirements meanwhile), but by 2006 had already installed a world-leading 49 GW of distributed renewables.”

    As with other numbers you are quoting, are we talking about installed capacity or actual production? Further, what is the effect of intermittent production and the cycling of necessary back-up power to emission savings?

    “California has held per-capita electricity use flat for 30 years – saving 65 peak GW and more than $100 billion of power-system investment – while per-capita real income rose 79 percent, and is now accelerating those savings.”

    What was the effect of outsourced production in this?

    Negawatts and more efficient micropower are both great. But three things come to mind. First, is there ever a diminishing marginal benefit for energy efficiency? I find it hard to believe that efficiency gains can just go on and on to the extent that is necessary, but I may be wrong.

    Second, should we really be increasing our reliance from gas? Especially when shale gas reserve estimates have been revised downwards and new studies, e.g. from Cornell, suggest that we may have been grossly underestimating the effects that gas infrastructure has on climate change? (Not even to mention all the other environmental effects from fracking.)

    Third, you believe electricity use is on decline. It may very well be so, but most reports agree that fossil fuels are at or near the peak production. Are you certain these developments – and other developments required to curb CO2 emissions – will not increase the demand for electricity?

    One example comes to my mind. Many environmental organizations are calling for reducing industrial use of fossil fuels, e.g. for steel production to switch from coal-using blast furnaces to cleaner electric arc furnaces. As a former foundry engineer, I have no problems with this – electrics have many advantages, not the least their capability to smelt charges composed entirely from recycled scrap. However, our single medium-sized electric steel mill, Outokumpu Tornio, swallows 4-5 TWh per year. That’s about two thirds of the entire wind generating capacity of that renewable poster boy, Denmark.

    And it’s more than half of what the rest of our entire metals and manufacturing industry consumes annually. Convert one other steel mill to electrics, and our entire manufacturing sector – not inconsiderable in size – would need to reduce their electricity usage to zero, yet electricity use would still grow.

    Similar developments are happening in regards to modern biorefineries. We’d very much like to do other stuff than just paper from our forests, but those new-fangled biorefineries are voracious consumers of electric power. The planned plants alone will add some 1-2 TWh to annual electricity consumption, and if we want to stop using oil altogether, we’d need something in the range of 10-15 TWh. Plus most of the biomass we’re able to sustainably harvest from our forests, biomass that is then not available to our micropower stations.

    I have read most of your books and wish to thank you for your interesting insights. But I will find your optimism seems misplaced as we continuously hear more bad things about, for example, Germany’s plans to add some 11 GW of coal-fired power to compensate for nuclear phaseout. Perhaps you could tour Germany and tell them that new central plants are uneconomic?


  122. @ John Newlands “It’s clear to me nothing will happen until it starts to get nasty or depletion slows everything down.”

    Depletion hysteria belongs to the renewables movement, so will be put in disrepute each time the renewables movement stumbles, so I believe that pro-nuclear arguments should stay clear of the bogey of depletion. We know it ain’t gunna run out, and can say so just like that.

    On the other hand, disaster panic does make for a shift in public thinking. Yes, an event in March this year does come to mind, but I really was thinking of a shift in British public thinking in 1940. In the late 1930s, experts were warning the British public of terrible events ahead, but were disbelieved, even as “The Phoney War” warmed up. Then, a series of military disasters culminating at Dunkirk caught the public imagination, Churchill’s leadership became acceptable, and the British public responded to the challenge of impending global disaster.

    There is a lag of about 30 years between the post-1920 graphs of CO2 and global temperature. By the time world public opinion recognises that it is being punished by the emissions of 30 years previous, we will be doomed to suffer the escalation of the 30 years since. In a mixed blessing, the randomness of large climatic disasters means that sooner rather than later there will be a time cluster of disasters that will mobilise world opinion. During the cluster, the rate of climatic disasters will be prematurely perceived in the public alarm as a level which the gradual trend would take many years later to achieve.


  123. Will, thanks, it may be Amory Lovins or a disciple to his cause — either way it’s clearly some pre-prepared text that he’s actually written that is being recycled on blog comments (no one else composes prose in quite that manner!). But, it’s an Open Thread, so I thought what the heck and let it through as some grist for conversation. And it’s already paid dividends via the excellent responses it’s provoked from Douglas Wise and J. M. Korhonen — so I’m happy with the outcome.


  124. John Newlands, on 20 October 2011 at 4:06 PM said:

    Talking of Gladstone area the Boyne aluminium smelter is up for sale by Rio Tinto…… That is retire the Gladstone plant and let China take up the slack.

    It would appear Rio is moving production to hydro-rich Canada
    It also plans to focus more on its Canadian aluminum operations picked up in the $38-billion purchase of Alcan, after announcing this week it will divest operations outside the country valued at about $8-billion.

    Alcoa appears to be moving some production from somewhere to hydro-rich Washington State.


  125. Lovins’ references to insurance, markets, and New York capture the spirit of the movie, Gangs of New York.
    It is interesting that so many people fashionably concerned with the environment so readily dismiss communal activity – such as providing power. Yesterday, a 2nd Canadian province (New Brunswick) turned away from increased market activity in the electricity sector (BC did last year and Ontario is increasingly likely to follow). Economics is a fairly hollow, and unhelpful, study beyond the perspective of political economy. Politically, people may well be far better served by not only communal power, but communal insurance. For instance, Alcan, as this thread has noted, expanding in Canada, is in both Quebec and BC – both jurisdictions with public power from generation to delivery.
    Which brings us to lobbies. Is it not fascinating how the nuclear lobby is constantly described as so powerful, and yet no reactors have been constructed in Mr. Lovins’ country for 25 years? This is laughable. Big Nuclear, and big hydro, both tend to be government dependent – some reasons are different, but the scale of the projects, the impacts on land use, and the timeframes for market access, are some. The money is in small-scale because it doesn’t require communal compromises. All cheer the small-scale scheme.
    But the small-scale, renewable, is a flop.
    Everywhere. The Rocky Mountain Institute is fabulous – for urban planning issues, and on demand reduction. But they show no ability to understand a simple spreadsheet, let alone a simple relational database. Those tools clearly show emission reductions in the US are linked to increases in nuclear output, and/or demand reduction. Is the argument embedded micro-generation is being misinterpreted as demand reduction?
    Another indicator than small being not quite so beautiful has recently been reported, in the NY Times. In 2011’s 2nd quarter, “residential installations cost $6.42 per watt; nonresidential installations cost $5.20 per watt and installations done by the utilities themselves cost $3.75 per watt.”
    I avoided linking to the World Nuclear Industry Status Report earlier in this thread – which has an introduction written by Amory Lovins, but it has sections arguing where nuclear is more affordable it’s because it is more dangerous. I’d suggest where it is more expensive its because there are stronger lobbies pumping failed schemes. So I’ll link to that report via my own blog post


  126. Re; “Not a single new nuclear project on earth has received a penny of private risk capital: they’re unfinanceable in the private capital market.”

    Lovins would seem to be correct, in that there are lots of loans, but all are likely backstopped either by contractors/sellers (usually government owned), or export credit agencies. Because of the lack of insurance, whether due to the tech or the insurance industry, risk mitigation is handled in the public sector.

    But most mortgages have not been insured privately either, in the US, but through Freddie Mac or Fannie Mae

    Does this mean housing is a dangerous technology?


  127. Amory Bloch Lovins wrote:

    We can solve the climate, oil, and proliferation problems at a profit – led by business – if we simply let all ways to save or produce energy compete fairly, at honest prices, regardless of their type, technology, location, size, or ownership. Norway already gets 100% of its electric power from distributed renewables, including wind. This is economics, plain and simple. Who’s not in favor of that? Are you? If so, you can join me in looking forward to a nuclear-free future and a richer, fairer, cooler, safer world.

    As someone who is sympathetic to Lovins’ environmental values and emphasis on renewable energy technologies and distributed generation, I find his defense of the status quo, rigged so called “free” energy markets, wall street bankers (operating increasingly as government contracted risk takers backed by taxpayer funded fail safes and the federal reserve), global trend analysis on emissions and renewable energy generation, and his polemic against nuclear (on seemingly emotional grounds) to be pretty unsatisfying.

    His cherished example appears to be Norway, which gets 99% of it’s electricity from hydro, is currently working to expand its natural gas capacity, and is leading the charge to increase our consumption of oil and natural gas (as a major producer of these carbon emitting fossil fuels). One could easily put Brazil or Canada on the same list too, as countries with huge resources in hydro (which emit a fair bit of CO2 in the case of Brazil), and are fast becoming major players on the global stage exporting fossil fuels and driving up consumption and emissions on a worldwide basis (driven by a broken energy system focused on short term immediate returns, sanctified in Lovins’ presentation, and externalizing long term risks, which can only be addressed by extra-market forces, i.e., policy). If he doesn’t see the role of policy in energy markets and technology development (except when it links up in a negative way with nuclear) I don’t see where he has given us any useful tools to work with (except to take a back seat to stochastic uncertainty and cross our fingers and hope for the best).

    What I see as missing from his approach is the importance of long-standing and publicly funded programs in research and development (especially as concerns transformational change in generation, transmission, storage, low cost manufacturing, innovative technologies, and efficiencies), laying the groundwork for change through expanded public investments in infrastructure and human capital (technical schools and advanced engineering programs), better international cooperation (on such things as emissions reductions, technology sharing, trade agreements, and policy support for developing countries), the need for policies that protect well-functioning free markets and better reflect collective goals (on costs, reliability, sustainability, environment, externalities, land and water use, safety and security, energy independence, etc.). And all of this takes a great deal of public debate, education, policy development, strategic thinking, and good faith discussion (even when working with opponents who don’t share your world view). Or perhaps especially with opponents who don’t share your world view! I’m not sure when Lovins became such a Milton Friedman disciple and energy neo-conservative, but markets are human constructs, and don’t operate free of human input and control (or “values,” whether we decide to acknowledge this or not). Understanding this fact (rather than mystically sweeping it under the rug) I believe helps us in meeting our long term conservation, emissions, and production targets (and doesn’t hurt us making best use of markets and governments, or collective decision making, to successfully meet our current and future long term goals and needs).


  128. On aluminium smelters relocating from areas dependent on coal fired electricity to hydro surely this is good for the planet as a whole. Rio’s other smelter on the market Bell Bay in Tasmania is supposedly powered by hydro but it’s suspiciously close to a gas fired power station and the node for the Basslink HVDC cable.

    If the smelters close other industries may gain. It’s alleged smelters pay 3-4c per kwh which some claim amounts to a subsidy w.r.t. normal prices. At Bell Bay this is thought to be $133,000 a year per employee. It seems there is no way nuclear power can make electricity that cheap though in Russia they make aluminium from igneous rock (nepheline) not bauxite.

    In Australia instead of giving an 80% electricity discount to aluminium smelters maybe they could give a 20 or 30% discount to other heavy power users. Example; uranium enrichment. We could also increase the aluminium recycling fraction, currently 1/3 I believe but we could make it 2/3. If a couple of Australia’s aluminium smelters leave town due to carbon tax it may not be the end of the world.


  129. John Newlands,

    On aluminium smelters relocating from areas dependent on coal fired electricity to hydro surely this is good for the planet as a whole.

    But that’s not what’s happening, is it. You stated yourself they are moving to China and elsewhere. Over time, industries will move to where electricity is cheapest. In the absence of cheap nuclear, our industries will be moving to countries where electricity is chepaest – i.e. coal fired. That is what you dearly belovered CO2 Tax and ETS will do – damage Australia for no gain.

    If the smelters close other industries may gain.

    You seem to be trying very hard to defend the indefensible! It’s telling how often the Left accuse others of being ideologues but do not recognise they are ideologues themselves.

    It’s alleged smelters pay 3-4c per kwh which some claim amounts to a subsidy w.r.t. normal prices.

    That’s a story some with an agenda argue. I am not sure it is correct. I understand baseload power for long term contracts, especially from the Victorian brown coal power stations, costs around 2.7c/kWh.


  130. CyrilR @ 20 October 2011 at 10:54 PM said:

    If I plug in Peter Lang’s high capital cost numbers on the Levelised Cost Calculator

    Using 6000/kW, 40 year loan, 10% interest, 100/kW-year fixed O&M, and total fuel plus variable O&M of 1.5 cents/kWh, I get about 10 cents per kWh. This is much lower than Peter Lang’s claim of the cost per kWh.

    I wonder if you saw my comment @ 20 October 2011 at 1:50 PM. It explains that the Total Project Cost does not include all the capital costs that must be included to calculate LCOE. If we use the NREL calculator to back-calculate the Capital Cost EPRI applied to derive their LCOE of $173/MWh, we calculate that the Total Capital Required is $11,100/kW, not the $5,742/kW Capital Cost EPRI gives in Table 9-2

    EPRI states the LCOE for nuclear in Australia (in consstant mid 2009 AUD) is $173/MWh. The componentst of this are:

    Capital = $137/MWh
    O&M = $26/MWh
    Fuel = $10/MWh
    LCOE = $173/MWh

    The Total Project Cost (or overnight cost) is $5,742. But this does not include AUFDC, ownewr’s cost and other costs explained in Sections 4 and 5 of the EPRI as report. To get the $137/MWh figure for the capital component of the LCOE (using the NREL Calculator), the Capital Cost (Total Capital Required) must be $11,100/kW.

    Below are the figures we need to input to the NREL Calculator to calculate the LCOE components. These figures are from Sections 9 and 10 of the EPRI report.

    Book life (years) = 30
    discount rate (WACC) = 8.40%
    Capital cost ($/kW) = $11,100
    Capacity Factor (%) = 85%
    Fixed O&M Cost ($/kW-y) = $146.90
    Variable O&M Cost ($/MWh) = $6.10
    Heat rate (Btu/kWh) = $10,331
    Fuel Cost ($/MMBtu) = $0.99

    Am I overlooking something? My calculation of $11,100/kw Total Capital Required and the fact that EPRI has not mentioned this figure is their otherwise thorough report is concerning.


  131. Peter L the suggestion of harrywr2 was that aluminium smelting relocate to hydro rich regions of US and Canada, not China. If a tonne of basic aluminium requires 15 Mwh of electricity and that comes from conventional black coal fired electricity then the carbon charge might be 15 X $23 = $345. That’s on top of a basic FOB price of ~$2,100/t.

    Thus a greenhouse rogue nation might find its export aluminium price goes up 16% or so when landed in a greenhouse compliant nation. If it was made with hydro electricity there is no major carbon charge, just for CO2 equivalent fugitive PFCs. In practice it might be rogue nations are penalised an arbitrary 20%, good guys 5%.. The end result should be less GHGs and more recycling.

    If Australia lost 2 or 3 of its 6 aluminium smelters that would reduce emissions and could make power prices cheaper for others. The workers could transfer to the newly advantaged industries e.g.electric transport.


  132. Peter Lang, on 21 October 2011 at 7:20 AM said:

    But that’s not what’s happening, is it. You stated yourself they are moving to China and elsewhere. Referring to Australian Aluminum Smelters.

    Rio Tinto is consolidating in Canada and Alcoa is shifting some global production back to Washington State. (Coal isn’t as cheap in China as it was 10 years ago). The rate Alcoa pays Bonneville Power for a fixed/interuptible demand of 320MW is $US34.60/MWh.

    Hydro-Quebec charges CAN$28.70/MWh + a monthly demand charge.

    Of course it’s not as simple a calculation as an Aluminum smelter moved from coal to hydro. Canada and the US Pacific Northwest have historically shifted excess power southward. Less excess power shifted south means someone is going to have to do something to make up the difference.


  133. Harrywr2,

    Thank you for those facts and long term contract costs. You are a wealth of interesting information.

    I am not sure if you are disagreeing with the overall point I was making or just clarifying some figures.

    The overall point I was making is that the CO2 Tax and ETS is an ‘own goal’ for Australia. see here: We are not helping to cut world emissions because the manufacturing industries (and jobs) we banish from Australia will be taken up somewhere else. The more manufacturing is moved out of Australia (as EU and USA have been doing for the past 20+ years), the poorer we become for no net cut in world emissions. There is no net cut in world emisisons because, by and large, the industries we export will move into countries with higher emissions intensity. Africa is the next region that will go through the development cycle that first Japan went through and China and India, Indonmesia and other Asian countries are going through now. Emissions from these countries will dominate emissions growth over the decades ahead. If we want to help reduce world emisisons we need low cost clean electricity generation. Raising the sot of electricity generation in Australia will not help the world reduce emissions. It will make us poorer and less able to implement the best policies. The CO2 Tax and ETS has stalled nuclear in Australia for at least another 5 years and probably longer.


  134. According to an article in the biz pages of today’s TNYT, the US has already slapped an import duty of 33% on some aluminium products from China. From earlier articles the combination of labor rate increases and genral inflation in China is around 10–20% per annum. Finally, the renminbi continues its slower appreciation against the dollar. So Alcoa’s decision to reopen two pot lines in Washington state comes as little surprise.


  135. Just as Australia legislates a CO2 Tax and ETS it seems the major economies are back pedalling.

    EU Weighs Pullback on Cutting Emissions

    Japan reconsiders plant to cut C emissions:

    Spain is cutting subsidies for wind power by 40%

    UK cutting incentives for wind farms and solar panels

    UK’s flagship carbon capture and storage project cancelled
    PL- please abide by the citation policy in future. One liners plus links, without thoughtful commentary and analysis, may be deleted.


  136. Whoever posted that, it was indeed written by Amory Lovins. He has proven to be consistently wrong time and again, yet retains his guru status no matter how wrong he is. If you’re a fan of nuclear, and haven’t yet read Robert Bryce’s classic article “Green Energy Advocate Amory Lovins: Guru Or Fakir,” please treat yourself to it:

    Making statements that wind is three fold cheaper, and nuclear can’t compete with coal or gas, is absurd. France and South Korea prove otherwise. Wind is horribly expensive, unreliable, and the turbines only last a decade to 15 years, even with high maintenance.


  137. I was going to let Peter Lang’s comment pass, but have reconsidered in the light of the content of the linked articles.

    So, in respect of PL @ 12:51pm today:
    1. EU Weighs Pullback on Cutting Emissions (WSJ)
    There is nothing newsworthy about Europe or any other organisation occasionally weighing progress and options, especially regarding an issue as important and potentially expensive as climate change. Let’s hope that they do so often and that the majority of the resulting decisions steer towards an energy rich, low carbon future.

    2. Japan reconsiders plan to cut C emissions (WSJ)
    This is a sister article to the first, from a Japanese perspective. Again. there’s nothing new or exceptional. Let’s hope that the Japanese simultaneously reconsider their newfound desire for increased coal and gas fired electricity.

    The Japanese nuclear power industry is copping a well-earned hammering lately. Given the history of not keeping up with trends in improved safety via retrofits and public embarassment due to the accident that had to happen, followed by the disclosures of lack of transparity, lack of safety culture and more in this industry, it is unavoidable that “reconsidering” be the order of the day.

    I am one who thinks that Fukishima and Tepco have been operating on borrowed time. Would it not be extraordinarily inept if the Japanese were NOT reconsidering their plans for the electricity industry, including the carbon emission targets?

    3. Spain is cutting subsidies for wind. Previous articles from similar sources indicate that unjustified and over-generous subsidies for solar power have been under review in many countries, as also charges of corrupt practices in the renewables industry. Nothing new here either.

    See, for example, BusinessWeek’s article re corrupt practices in Spain and Italy wrt solar and wind power, as long as 30 months ago.

    It has been noted many times in the history of mankind that, wherever there is fast hot money there will be conmen. Q.E.D. Let’s hope that Spain, Italy and, for that matter, Australia, see the problems that easy access to publicly funded subsidies inevitably bring with them. Again, no reason for gloating. Business as usual.

    4,5: UK cutting incentives for wind farms and solar panels and cancelling CCS project.

    One who frequently rails against subsidies and imposts of all kinds can hardly consider it exceptional or newsworthy that these developments are happening. The thin economic and engineering justification for these incentives and projects has been reported in BNC many times. Surely, it is not newsworthy that, although late, responses are under way to review and curtail those programs and policies which are failing?

    So, we have been reminded of that which Blind Freedy was already aware, which is that reviews in various countries are underway, driven by corruption, poor outcomes, unpopularity or even (Tepco) organisational failures, and that these reviews may result in changes to current energy policy settings. These are but steps along a twisting road.

    What is potentially more significant is that change is eagerly anticipated in many quarters.

    Pre-Fukushima, my perception was that the renewables spin doctors were in charge of our futures, with their 1% solutions.

    Six months post-Fukushima, it is encouraging to note the widespread expectation of analysis, change and seeking better outcomes. Acknowledgement of the existence of an illness may be the first step towards regaining one’s health.

    This comes at a great time, when a high ranking study which was financed with the intention to demolish the credibility of the existence of global warming has returned contrary findings to those which the backers sought, this being that the global average land temperature has risen 1 degree celsius since 1950. NOAA, HadRCU et al vindicated by the very researchers who set out to discredit them!

    I hope that we see very many more news articles in the near future announcing re-thinking of responses to the challenges of carbon emissions, the need to fairly allocate costs of these emissions to the emitters, to find ways to ensure an energy rich, safe and harmonious world.

    Peter, thank you for drawing our attention to these five very welcome news items.

    For the temperature study, see:
    For comment, see:

    Perhaps the end of the wastage of public funds on techno-magic wind and solar partial solutions to climate change is now a little closer.

    Perhaps uncomprehending passive public acceptance of poor nuclear operators will yield to public recognition of just how safe nuclear power can be and thus public demand that many more NPP’s be constructed to replace and augment those which are poorly operated and designed and must be closed – eg anything even remotely like Chernobyl, anything not continually upgraded to best practice standards as the decades rolled by, like Fukushimi.

    Perhaps public demand for a realistic price attached to the permits to discharge pollutants to atmosphere, including CO2, will level the environmental playing field when it comes to energy technologies.

    Maybe even new rules governing world trade, so that the emissions represented in traded products are accounted for and levied at the point of entry to pro-active nations.

    This illustrates the need to focus widely across the possible range of responses and outcomes regarding energy policy and climate change, rather than (for example) focussing relentlessly on compliance and labour costs associated with construction of new nuclear power capacity. The future of the world is about very much more than engineering.


  138. John Bennetts,

    I agree with many of your points. However, I suspect you may have missed the overall point I was attempting to make by posting the links.

    The fact is that the world is stepping back from grossly irresponsble, economically damaging, morally repugnant policies to cut CO2 emissions at a rate that is faster than can be achieved without seriously damaging economies. We are stepping back from the extremist policies being pushed by too many people for too long.

    Given the above, the Australian CO2 Tax and ETS is an own goal. It has set back genuine progress. That is the point of my comment. I was adding support to my previous comments on this thread and other threads, including: (which you said you had read and considered, and I presume accepted soince you did not disagree with it).

    Wishing for irrational policies will not help progress. A small group can wish all they like and try to force governments to make bad polices, as has happened here, but they are not policies that can survive in the absence of coordinated international action. Australia cannot lead the world by example. To believe we are that influential is naive.


  139. Peter Lang, you’ve added a cost that is already included in the $6/Watt estimate, and treated it as overnight cost.

    This is nonsense, the kind of silly-ness we see from the anti nuclear movement, they lump in all costs and pretend it is all overnight costs.

    Olkiluoto is the FOAK EPR and it costs 4 euros per Watt. This is after all the cost overruns and associated interest during construction.

    Interest during construction is not a problem if it is planned since you don’t have to finance everything at once – you go on JIT production/delivery, no need to make a steam generator and pay for it in year 1 when you need it in year 6 of the project. It is unplanned delays add big costs.

    Also $26/MWh for O&M is not correct. It is roughly $20/MWh for total non-capital costs (ie fuel+fabrication+maintenance+waste storage+decommissioning).

    I discussed this on EfT forum before, for the Olkiluoto EPR cost:

    Based on a table in this reference:

    Click to access e08034.pdf

    we find table 3.14 on page 104 showing some nice numbers about this project:

    Investment cost [€2007] 4 billion (ATW, 2007)
    Specific investment cost [€2007/kW] 2,500
    Availability [%] 90
    Typical capital cost [€2007/MWh] 35
    Typical O&M cost [€2007/MWh] 6-9
    Typical front-end fuel cost [€2007/MWh] 3.5-4.5
    Typical back-end fuel cost [€2007/MWh] 3-4 Decommissioning cost [€2007/MWh] 0.5-1

    Total generation cost [€2007/MWh] 48-53.5
    46 €/MWh according to (Dupraz, 2007)

    Taking the higher number to be conservative, 5.35 cents per kWh. Then adding the cost overruns for Olkiluoto on the 3.5 cent per kWh captal cost, which is 1.5x cost overruns over the initial 4 billion euros, this adds (0.5×3.5) = 1.75 cents per kWh.

    That makes the total cost 7.1 euro cents per kWh.

    Add a bit inflation to get to 7.5 eurocents in 2011 money.


  140. Peter Lang, on 21 October 2011 at 12:51 PM said:

    UK cutting incentives for wind farms and solar panels
    UK’s flagship carbon capture and storage project cancelled

    IMHO The UK is clearing the table for ‘nuclear without subsidy’. The UK is a ‘winter peak’ country. So solar panels will just cut into summer profit margins of the capacity that has to be built to meet winter peak. The wind blows half the time during nighttime off peak…same story.

    For nuclear to be financially viable in the UK they have to be able to sell all the capacity, all the time.

    CCS in the UK was never going to be financially viable. UK Coal needs a minemouth price of UK pounds 2.36(US$3.70)/GJ to make money.

    UK Coal financial statements.

    Click to access 29891958.pdf

    As to this point –
    The overall point I was making is that the CO2 Tax and ETS is an ‘own goal’ for Australia

    Energy intensive industries are going to flow to the cheapest source of energy. IMHO Those locations that have invested in capital intensive/low variable cost energy will eventually win the race.

    How to structure the financial incentives/penalties to encourage long term investments without having excessive negative short term consequences is a difficult question.

    If I look at the example of the new Finnish nuclear reactor and the fact that it’s horribly over budget. Areva claims, probably with at least a grain of truth, that the bulk of the cost overrun is due to an inexperienced Finnish regulator. Raising the price of fossil energy to overcome the problem of an inexperienced Finnish regulator wouldn’t seem to me to be the best plan.

    I suspect that the estimates by EPRI of how much a new nuclear plant will cost in Australia probably take into account massive construction delays due to an inexperienced Australian regulator.


  141. EPR at Olkiluoto was also FOAK in technology terms. But even then, 8 eurocents per kWh looks pretty affordable to me. Newer EPRs have less issues as the nth of kind economies sink in (eg Flamanville).

    I’m not surprised the Fins are going through with new nuclear plants. If even first of a kind plants are affordable, it looks pretty good.

    The Fins are on track to meet over 70% of their electricity by nuclear by 2020-25. They’re doing what France did. No one seems to notice – people are too busy wining about how expensive Olkiluoto is to notice what a transition is going on in Finland. I guess holding fat grinding axes in ones hands blinds the view of things further out on the horizon.


  142. PL & Harrywr2,
    I was out of town yesterday so I did not get back yesterday but thx for the responses.

    If we are calculating LCOE based on 30- 40 yr financing how do we figure in the fact that the NPP has a longer life than a CCNG plant. (I am assuming this but it may not be true). ie it is still cranking out kwh after financing charges have long gone away.

    Thx for the reading suggestion on project Azorian. I’m a Nuke fan, a submarine fan and a Hughes admirer so I downloaded the book to my Kindle. I was getting bored w/ Quest as he goes on and on and on about the quest for oil (yawn).


  143. GeorgeS, on 22 October 2011 at 5:20 AM said:

    If we are calculating LCOE based on 30- 40 yr financing how do we figure in the fact that the NPP has a longer life than a CCNG plant.

    As anyone with a mortgage knows…stretching out financing beyond 30 years doesn’t change the monthly payments by much.

    So we could calculate LCOE using 30 years at X % interest, then another 30 years at 0 percent interest and average the two. It would be valid, but it wouldn’t tell us how much we would have to pay for electricity tomorrow morning.


  144. harrywr2, on 22 October 2011 at 5:49 AM said:

    “As anyone with a mortgage knows…stretching out financing beyond 30 years doesn’t change the monthly payments by much.”

    LOL good one. pretty true.

    OK so here is my gross oversimplification of nuclear vs CCNG.

    The up front costs are about 4 times as high as CCNG
    The LCOE is ROUGHLY twice as much as CCNG

    So at the risk of sounding like a smart asss one could say that Nuclear needs gas backup.


  145. Cyril R., @ 21 October 2011 at 11:13 PM said:

    Peter Lang, you’ve added a cost that is already included in the $6/Watt estimate, and treated it as overnight cost.

    This is nonsense, the kind of silly-ness we see from the anti nuclear movement, they lump in all costs and pretend it is all overnight costs

    Thank you for your comment. I accept I may have made a mistake. However, if I have, I cannot understand the mistake I’ve made from what you’ve presented. I am not sure which of my comments you are referring to, because I’ve been dealing with both VC Summers and EPRI. I accepted up-thread that I’d had a misunderstanding about the capital cost figure for VC Summers. I corrected that. However, from then on I was dealing with the EPRI (2010) report to the Australian government. Did you read the EPRI report and have you identified an error in that report?

    I am working with the EPRI (2010) report to the Australian government because it has most of the figures needed to allow us to understand how they’ve derived their LCOE figure. Their LCOE for nuclear is $173/MWh (constant 2009 AUD). The capital component of LCOE is $137/MWh. They quote the Total Project cost (Overnight Cost) as $5,742/kW.

    If you enter the Total Project Cost (overnight cost) of $5742 in the NREL calculator the Capital component of the LCOE is $71/MWh; but according to EPRI it should be $137/MWh. To get $137/MWh we have to enter a capital cost (Total Capital Required) of $11,100/MWh. That means the AUFDC and other owner’s costs are $5,358/kW; these must be added to the Total Project Cost to get the Total Capital Required of $11,100/kW to enter into the Capital Cost box in the NREL Calculator.

    If I am misunderstanding something could you please explain it to me. Could you please refer me to the comment (date and time) and quote the section you are referring to. Without that it is difficult to understand what you are referring to.


  146. GeorgeS, @ 22 October 2011 at 5:20 AM:

    If we are calculating LCOE based on 30- 40 yr financing how do we figure in the fact that the NPP has a longer life than a CCNG plant.

    I strongly urge you to read Chapters 3, 4, 9 and 10 of the EPRI report:

    For nuclear, the components of LCOE are:
    Capital = 80%
    O&M = 15%
    Fuel = 5%

    You can calculate the equivalent figures for the other technologies from EPRI (2010) Chapter 10, Table 10-3 to 10-13.


  147. harrywr2, @ 21 October 2011 at 11:53 PM

    Thank you for your reply. I accept / agree with nearly all of it. I’ll comment on two statements

    Energy intensive industries are going to flow to the cheapest source of energy. IMHO. Those locations that have invested in capital intensive/low variable cost energy will eventually win the race.

    I agree that energy intensive industries will flow to the ;locatiosn with lowest cost energy. That will be coal for a very long time if we (the developed countries) do not address what is making nuclear higher cost than coal. Therefore, Australia raising the cost of coal generation with a CO2 Tax and ETS, will simply move energy intensive industries from Australia to other countries with low cost electricity – ie coal gnerated electricity. So we will not cut world emissions but will cut Australia’s ability to implement the best policies in the future. Instead of damaging our economy with a CO2 Tax and ETS – and damaging our capacity to impelment good policies – we should as a first step identify the impediments to low cost nuclear in Australia. Then work out the order of priority for removing tham and what we need to do to remove them. I’ve made a start on this previously and can provide the links if anyone is interested.

    90% of the projected growth in emissions to 2050 will come from thje developing world. If we want to cut world emissions we need to develop an alternative that can generate electricity cheaper than coal. We won’t do that by increasing the cost of the coal technologies in the west, because the developing countries will not follw. We need to focus instead, on removing the impediments to low cost nuclear. Most of the impediments have been caused by politics. That is what has to be addressed.

    I suspect that the estimates by EPRI of how much a new nuclear plant will cost in Australia probably take into account massive construction delays due to an inexperienced Australian regulator.

    I don’t think that is the main cause of the high cost. The construction time assumed in their analysis is 36 to 42 months. There are many other factors that are causing nuclear to be much higher cost than coal and gas. I believe the EPRI report is realistic. The issue is not that the report is wrong. The issue is that we have impediments to low cost nuclear and we are not prepared to face up to that fact. I’d urge all those who want to argue for nuclear in Australia to take this issue seriously and tackle it, rather than trying to ignore it.


  148. The list of greenhouse good guys now includes California. An alliance of California, Europe, Scandinavia, Australia, NZ and perhaps others could start imposing carbon tariffs on imports from China or carbon taxes on fossil fuel exports. I think the Western guilt thing about helping a developing country is wearing thin. The rest of the world must be asking why make sacrifices if others don’t.

    A problem with any coalition of avowed low carbon countries is that they all seem to have major lapses such as allowing questionable offsets. A bit like dieters who snack on chocolate. Australia is not alone in attempting carbon reduction, just that attempt is a bit feeble as they all are.


  149. GeorgeS, on 22 October 2011 at 6:18 AM said:

    So at the risk of sounding like a smart asss one could say that Nuclear needs gas backup.

    Gas is going to be with for a while(at least in the US). Nuclear makes for a poor peaker. You don’t save much by turning it down. In the US anyway coal is dying a long slow death. If I was ‘king of the world’ I would couple a gas plant with a nuclear plant. Then wait 30 years until the nuclear plant is paid off and buy a second nuclear plant to replace my broken down gas plant.


  150. The EPRI figures for Australia are confusing readers because they are ‘constant, mid-2009 AUD’. At that time the AUD = 0.81 USD.

    Below I’ve converted the EPRI figures (for nuclear) to ‘constant, mid-2011 USD’ to help comparisons. The VC Summers figures are in ‘constant, mid-2100 USD’.

    The EPRI figures we need to input to the NREL calculator to get EPRI’s LCOE figures, in ‘constant, mid-2009 AUD’, are:

    Mid-2009 AUD
    Inputs to NREL Calculator
    Book life (years) = 30
    Discount rate (WACC) = 8.40%
    Capital cost ($/kW) = $11,100
    Capacity Factor (%) = 85%
    Fixed O&M Cost ($/kW-y) = $146.90
    Variable O&M Cost ($/MWh) = $6.10
    Heat rate (Btu/kWh) = 10331
    Fuel Cost ($/MMBtu) = $0.99

    LCOE components (constant 2009 AUD/MWh)
    Capital = $137
    O&M = $26
    Fuel = $10
    LCOE = $173

    Capital Cost ($/kW)
    Total Project Cost = $5,742
    Owners costs = $5,358
    Total Funding Required = $11,100

    Below, the cost figures are converted to ‘constant, mid-2011 USD’:

    Mid-2011 USD
    Inputs to NREL Calculator
    Book life (years) = 30
    Discount rate (WACC) = 8.40%
    Capital cost ($/kW) = $9,173
    Capacity Factor (%) = 85%
    Fixed O&M Cost ($/kW-y) = $121.40
    Variable O&M Cost ($/MWh) = $5.04
    Heat rate (Btu/kWh) = 10,331
    Fuel Cost ($/MMBtu) = $0.82

    LCOE components (constant, mid-2011 USD/MWh)
    Capital = $113
    O&M = $21
    Fuel = $8.26
    LCOE (constant 2009 AUD/MWh) = $143

    Capital Cost ($/kW)
    Total Project Cost = $4,745
    Owners costs = $4,428
    Total Funding Required = $9,173


    EPRI (2010). Australian Electricity Generation Technology Costs – Reference Case 2010

    Click to access AEGTC%202010.pdf

    VC Summers June 2011 status report, Inflation Indices, Appendix 4, Chart B

    Click to access 2011Q2BLRAReport.pdf


  151. GeorgeS — A vertically integrated util9ity company charges according to the average of all generators on the utilities’ grid. A seperate, so-called merchant owned (MO), generator sells to the transmission and distribution companies for whatever price he can command. Of coursse the MO has to sell for enough $ to cover costs; for a CCGT that includes paying off the mortgage for the first 25 years [standard time in the USA]. Thereafter, the MO can make quite a bit of $ for the lifetime of the CCGT.

    This is not without risks to the MO, principally the variations in the price of natgas versus the rates the MO can command.

    There are one or two companies in the USA which do much the same with NPPs, although I’m under the impression these companies usually negotiate long term agreements with the transmission/distribution utility. Those companies make $ make assuring that there CF is as high as possible; one of them has a fleet average of 92% which is impressible for a bunch of Gen II NPPs. [For Gen III+ NPPs one expects better than that, but we shall have to wait to find out what CF can be maintained.]


  152. It seems TRU Energy will take up the offer of Federal funding for coal replacement
    That confuses what to put in the NREL calculator since a lot of the capital is free. Nonetheless I input
    lifespan 40 years r= 8.5% cf = 65% hr= 7,000
    fuel cost $7 capital cost $2040/kw
    The other parameters were unchanged. The fuel cost escalator will be easily 3% for Victoria.

    This gave an LCOE of 8.7c per kwh. It seems a bit strange putting in plant life of 40 years when it will have no fuel in 20 years. Why are TRU Energy doing this when
    a) gas will have to come from a long way away
    b) brown coal is so cheap with or without carbon tax?


  153. Barry Brook — Somewhere earlier you posted a link to the slides for your recent talk in Canberra (at the ANU?). Unfortunately in the nonce my ‘puter suffered a power outage and I didn’t mage to capture the link securely before hand.

    I would appreciate your reposting the link so that I can preserve it. [In particular this matter came up just now as I would like to pass it along to someone who seems to be on the verge of becoming mildly pro-nuclear power.]


  154. Are we too tightly focussed on the lowest achievable cost of nuclear power or the comparative costs of the various power technologies? Can examination of comparative costs of carbon reduction strategies ensure that appropriate energy strategies are adopted? Without public acceptance and support, the answers are No and No and No.

    I do not foresee low carbon electricity generation as being able to deliver by itself the reduction in global carbon emissions which are essential for a stable and livable climate.

    Population reduction, as explained by Barry on another thread of BNC, can only come too slowly and too late and then only if precursors are met, such as physical security, economic health and access to adequate energy sources across all nations.

    The response must be global, but how can this best be achieved? Kyoto and its children have resulted in sequestration of many tonnes of carbon – primarily, in the form of dead-tree copies of reports, buried in libraries. International cooperation, though essential, has been elusive.

    National action as proposed in legislation before the Australian Senate now, even multinational action, such as the EU’s targets and regulation and subsidies, have all been flawed and their efficacy doubted. Progress has been tentative and the current actions are being widely challenged.

    Some argue against single nation action, calling on the laws of the Rational Economy God as justification for relentless competition on the basis of price alone. Cheapest option. No unilateral action. Decrease costs of nuclear build. Decrease costs of nuclear regulation. And so forth.

    I cannot accept that the primary impediments to action to ensure the world’s best climate future are construction (ie, largely, wage) cost and regulatory compliance costs. A reasoned and maximal response must be deeper and broader than that and will involve public acceptance, errors, dead ends, trials and successes. A recent post from PL listed several such dead ends, eg abandonment of a CCS pilot in Britain, diminishing financial support for solar and wind in several nations. There are also nuclear power wind-backs in Germany, Japan and Switzerland.

    These trials and setbacks can be viewed as natural and essential steps on the path to firmer solutions. If Spain and Germany had not thrown billions at solar thermal and the Danes at wind turbines, would the limitations and capabilities of these 40-year old concepts be as well understood as they now are? Of course not – these setbacks are not nice, but they are very human. The human animal learns very well through experience and is in a class of one as the species which can communicate its learning around the globe.

    There is a clear parallel for nuclear power, but with a twist. Nuclear power’s measurable capabilities have been demonstrated and are well understood. Public perceptions of comparative costs and benefits, especially with relation to intangibles, are the current hold points. Consider what would happen if public acceptance was not the problem. Nuclear power costs and benefits would be compared without loadings (aka fudge factors or ignorance factors) with alternative technologies. Electricity from nuclear plants would not be disadvantaged in the marketplace through selective feed-in tariffs or renewable energy tariffs or scheduling priorities, because these tools would not exist. They are, at base, responses to perceptions that fossil fuels and nuclear power are less acceptable and thus must be penalised in the market.

    Against these considerations are the various flavours of so-called economically rational argument, based on competitive advantage in a market where externalities and emotion are banned from consideration. Real solutions must be tempered by consideration of broader objectives, including the over-riding objective of global climate health, which is rapidly becoming an overarching consideration, rather than an optional extra, or an irrelevance. An example of ultra-narrow economic argument being used to drive part of this discussion is cost comparison without consideration of the damage done to the commons due to the actions of polluters. These are allocated a zero cost, yet benefits are costed, eg income from power sales. This is clearly inadequate. A charge should be set at or above the cost of removal of CO2 from the atmosphere or the price barrier necessary to result in behavioural change which will result in verifiable decrease in CO2 emissions from other sources – ie, buying carbon offsets and operating in a capped carbon market.

    I have several times on BNC stated that the local tip fee for solid wastes in an engineered and managed waste management facility is $150/tonne. That charge is an impost on industry and commerce and puts Singleton and, by extension, Australia, at commercial disadvantage. Economic rationalists might well consider tip fees to be anti-competitive, an unacceptable impost and irrational. Yet people and businesses accept the need for the charge and pay tip fees every day of every week of every year and the world has not changed noticeably. The scale of the charge is a factor in its acceptance – it is a small item on the community balance sheet. Twenty-five years ago, the tip’s operations were funded out of local government general revenue. There were costs but these were not identifiable by those who paid them, the ratepayers.

    Incrementally, these charges have increased and a very large component is now skimmed off by the NSW Government. We don’t like it, but we still pay up. If the government didn’t get at me in this way, I have no doubt that I would pay an equivalent price elsewhere. There are, however, several positives. The tip is better maintained and operated. The charges are avoidable if I generate less waste (and I do). The closure plan is now funded.

    People readily accept the solid waste fee, even though its magnitude and details are not popular. This is not so, it seems, when it comes to the air that we breathe. There is nothing rational about allowing corporations to discharge wastes to the detriment of the atmosphere without any charge at all, simply because they don’t want to pay. Nice one, that. Other, competing, corporations (wind turbine manufacturers? Nuclear power station designers?), not so dependent upon these free dumping rights, might have a different take on this type of economic rationalism.

    To argue against any charge at all for emitting CO2-e pollutants to the atmosphere in an uncontrolled manner on the pretext that this is somehow economically irrational is to argue that all taxes and charges and regulations and laws add costs, hence no tax or government charge on any activity is economically rational, ergo: government is bad and should be discontinued immediately.

    Clearly, the matter of taxing (or whatever) CO2 emissions is not properly a question of nothing at all, ever. It is a question of how, and how much. The current Australian proposal is for a fee which is less than one sixth of the comparable tonnage cost for solid waste, starting next year sometime. The debate should be about magnitude of the dumping fee, rather than principle.

    The economy does not operate as a zero-sum game. Our win is not necessarily somebody else’s loss. A tax on carbon emissions is a cost, agreed, but the question is really about the effects of such a cost, in relation to possible alternative actions. Cost-benefit, if you will. Or comparative costing. The world has been jerked around quite a bit over the past several years due to failure of financial systems which are the creation and domain of Western economists. Economists, as a discipline and as a profession, must come to consider the USA-driven GFC and the current European unfolding train crash as their own Chernobyl and Fukushima. Trust in economics has been dealt as much a body blow as has trust in nuclear power.

    The current climate trend is a negative-sum game. Each incremental increase in atmospheric global CO2 comes at the expense of global climate systems and thence expense of all living species. We are fighting over an ever-shrinking slice of atmospheric and environmental pie. Everybody loses, without exception. We need to turn that into a positive-sum game. There cannot be any argument but that this is essential. There are real costs attached to business as usual. The rules have to be changed, including the unwritten rule that it is OK to toss damaging stuff into the sky.

    We are left with a conundrum, but not the one which we started with. It is not whether nuclear power, which is widely seen to be essential if this negative-sum game is to be turned around, can be made cheaper. It is not even about whether CO2 emitters should be penalised, or the classical economic argument that all additional costs are always anticompetitive, or even about whether economics is irrelevant.

    The conundrum is “What economic and decision theories can serve us best in the real world?“ I suggest that branches of social economics and political economics are at least as informative in this discussion as mean, heartless, dog-eat-dog classical economics. The economic tools used must be the servant of the master. None of us should be slaves to inhuman competition theory based in the 1800’s, especially when finding and implementing climate solutions will require broad and strong public acceptance of both the nature of the problem and the means of solution. There is room for discussion of options, but without public support, we will get nowhere near the necessary traction.

    Did I not mention costs? The total costs of all the money wasted on false starts and pilots with renewables is a tiny fraction of the cost of the Middle East’s recent and ongoing oil wars. No renewables program has come at greater cost than BP’s recent losses in the Mexican Gulf. Let’s keep costs in perspective. Germany’s renewable and anti-nuclear costs are huge, but far less than the bail-out of bank loans which Europe faces just to get back to Square One.

    Cost is not the decider – the deciders are (1) building and awakening, country by country, the public will to act to improve the chances for a livable climate future and (2) public education about what can help, what cannot help and how to tell the difference.

    Maybe this site needs more social scientists, advertising gurus and the like to help us to understand how public opinions are formed and changed.


  155. What will the Finns build next? Fennovoima has shortlisted two alternatives for the plant design: Areva’s EPR, an advanced pressurized water reactor rated about 1700 MWe; and Toshiba’s ABWR advanced boiling water reactor rated about 1600 MWe. In July 2011, Fennovoima invited Areva and Toshiba to bid for the delivery and construction of reactor and turbine islands for a new nuclear power plant in Finland. It expects to select the plant design in 2012-2013. from


  156. The Global CCS Institute is an arm of the Australian Federal Dept. of Energy and Climate Change.

    Those interested in CCS status and costs will find their recently released publication interesting.

    Click to access the_global_status_ccs_2011.pdf

    It is too wide-ranging to do justice with a short summary. Suffice to say that it appears to be a very well presented and comprehensive annual (2011) status report covering what is being done, where and by whom. For example, the status of all projects is listed, including the 8 projects which are currently operational – all relating to natural gas processing.

    “Figure 3 – Avoided costs of CO2 by technology in the power sector” will interest many BNC readers.

    At 140 pages, it’s worth bookmarking for future reference.


  157. Pingback: The current climate trend is a negative-sum game « SeekerBlog

  158. I can’t decide whether it’s sadness or schadenfreude that I feel, watching Mark Diesendorf and Matthew Wright (BZE) demolish each other’s ‘100% renewable energy for Australia’ plans ( If only they would take the next logical step, and realise that they’re both right (i.e. wrong!) – NEITHER plan is practical in either monetary, climate, resource or EROEI terms, at least without a substantial nuclear component.


  159. Have BZE properly critiqued Diesendorf’s stuff before? This is the second time I’ve read Diesendorf more or less dismiss the ZCA plan. The comments exchange is interesting. Perhaps you should jump in there and mention that they are both right (wrong), Mark Duffet ;)

    I also love the title “A cheaper path to 100% renewables”, then buried in the text “Although the UNSW study has not yet performed an economic analysis, our scenarios have the potential economic advantage over ZCA’s…”…


  160. If you’re not already familiar with “The Energy Trap”, the following link is worth following. It provides a mathematician’s-eye-view of the link between energy spent constructing alternative energy sources in a world with diminishing access to fossil energy sources.

    It is also a reasonable primer for the concept of EROEI, Energy Return On Energy Invested.

    The comments are worth thumbing through, as well. Allow 30 minutes total for article plus comments.

    Thanks, Mark D: the above link was in the comments to your article re Diesendorf et al.


  161. An article in today’s “The Australian” says electricity prices rose 16.5% last financial year and have risen 10.4% in the past 12 months. At the same time, oil and gas prices are down 4.4%.

    How does this help us reduce emissions? It just means we move from electricity to gas and oil, the opposite of the direction we need to move over the long term.

    The reasons for the electricity price rises are the mandatory renewable energy targets forcing electricity distributors to buy renewable energy and the upgrades to the transmissions and distribution systems needed to handle the renewable energy. Yes, I realise there is more to it than this, but let’s not try to obscure the reality that the government’s interferences and ever changing regulations of the electricity industry are causing high inflation of electricity prices.


  162. PL: Some would say that, without the Australian Energy Regulator AER and some central planning of the transmission systems SE Australia would need more, not less, expensive transmission and generation infrastructure yet still not be able to benefit from the presence of interconnectors between QLD, NSW, Vic, Tas and SA which improve reliability and competition as well as reducing the need for spinning reserve.

    Considering that the NEM has operated in much the same fashion as at present for a couple of decades, under various flavours of government, both State and Federal, your shot about “government interference” is a bit irrelevant.

    That leaves the RET’s and FiT’s and rebate schemes, which are the brainchildren of many different governments as they seek to win the popularity polls called elections. Despite being uneconomic, they are undoubtedly popular.

    I have yet to see an account of each of these subsidies explained and totalled up in such a way as to enable the casual reader to see what they are costing. A State by State comparison for the years 2005 – 2010 would be an excellent educational tool.

    By the way, this week the Chair of the ACCC singled out Victoria’s retailers, who are privatised and who own most of Victoria’s transmission system, as being of concern. Is this an instance of too little government involvement, allowing capitalist owners to rip off the retail customers? I have no link to that particular speech. At the foot of this comment I have listed a few others, all aimed at private corporations caught doing the wrong thing in the energy market.

    Perhaps it is better to leave political name-calling aside and focus on costs and technical opportunities for improvement and/or factual reporting and/or analysis.

    ACCC Chair’s speech. Sept 2011.

    Click to access item.phtml

    Press release re action against Energy Watch, a private enterprise which was ripping off retail customers.

    WA Solar power supplier Austech pays infringement penalty.

    Regarding those increasing costs, on another blog yesterday someone presented figures for increasing cost of transmission as a component of the total electricity bill,

    The theme was that transmission costs are increasing disproportionately.

    The figures in the article (in Climate Spectator??) indicated exactly the opposite: figures for 2001, 2012 and projection for 2030 (or thereabouts) were all within half a percent of 47% of the total.


  163. Australia’s electricity generation in 2009-10 was about the same as in 2004-05 . The proportions by fuel in 2009-10 were:

    Non-renewable fuels
    Black coal 52%
    Brown coal 23%
    Natural gas 15%
    Oil products 1%
    Other a 1%
    Total non-renewable 92%
    Renewable fuels
    Bagasse, wood 0.5%
    Biogas 0.4%
    Wind 2.0%
    Hydro 5.2%
    Solar PV 0.1%
    Total renewable 8.2%
    Total 100%

    In summary, coal generates 75% (the same proportion as nuclear in France), renewables 8%, of which hydro is 5%, wind 2% and solar 0.1%.

    Renewables share is up one percentage point in five years (from 7.2% to 8.2%)

    It’s clear that the 20% renewables by 2020 target is unrealistic.


  164. Another way of looking at the impossibility of meeting the RET is to say of today’s 8% some 5% is maxed out hydro. Thus we want to get from 3% non-hydro renewables in 2010 to 15% n.h.r. in 2020. Assuming steady overall generation (noting ZCA want us to consume less not more) that means a five fold increase in n.h.r. in a decade.

    A snowball would have more chance in hell. Add to that billions to be spent in foreign carbon credits in 2015. Add to that more CO2 from coal exports than at home. Two words… path etic.


  165. Peter Lang, on 25 October 2011 at 1:48 PM said:

    An article in today’s “The Australian” says electricity prices rose 16.5% last financial year and have risen 10.4% in the past 12 months

    According to a chart on page 15 of Coal Services annual report coal mine productivity in NSW has dropped from 5.8 tonnes/man hour in 2004 to 3.97 tonnes per man hour in 2010. Average wages are increasing as well.

    Click to access CSAR2010update.pdf

    It would appear from just looking at the NSW data that Australian coal mine productivity trends are lagging US productivity trends by about 5 years. I.E. Productivity in the US was rising in the ’80’s and ’90’s due to improvements is coal mining technology then began to drop around 2000.


  166. A combination of factors seems to prevent us from mentioning the elephant in the room, namely that increasing fossil fuel use by China and India must cook the planet. Reasons include
    1) we got rich now its their turn
    2) selling them coal helps both us and them
    3) many retail items are cheaper than ever in real terms
    4) their efforts to decarbonise will take a while.
    If a combined 2.5 bn people increase their emissions by just 5t CO2 per head that will increase global anthropogenic CO2 nearly 50%. I see no sign that this process will abate voluntarily. For a perspective on China’s emissions growth see

    Much as people don’t want to discuss it the consequences will keep coming up. Others will point out how silly it is to get Australia’s emissions under 500 Mt when emissions from our exported coal and LNG may be double that, due in large part to demand from China and India. When we get El Nino and $2+ petrol perhaps as early as 2013 people will look for scapegoats.


  167. John Newlands, on 26 October 2011 at 7:41 AM said:

    A combination of factors seems to prevent us from mentioning the elephant in the room, namely that increasing fossil fuel use by China…. I see no sign that this process will abate voluntarily

    China was exporting steam coal for $22/ton in 2002. The mine-mouth price of Australian coal is quite attractive, by the time if get’s loaded onto a train, then loaded onto a boat, then floated to china, unloaded from the boat and ends up at a Chinese power plant it’s not ‘cheap’ anymore.

    The US NRC has 4,000 full time employee’s. The Chinese equivalent had 300 as of March 2010.
    in March 2010 the central government allowed NNSA to increase its staff to 1000 within 2-3 years.

    The US has a significant advantage in finding the necessary ‘skilled workers’ for the Civilian nuclear industry because we have a ‘nuclear powered navy’ from which to draw trained specialists.

    IMHO What is driving Indian and Chinese coal consumption is balancing ‘need it now’ with avoiding building NPP’s without sufficient regulatory oversight. It takes time to expand highly technical organizations. I know I wouldn’t want to live next to a NPP inspected by someone with 90 days of experience.


  168. @harrywr2 if China and India are genuine in their CO2 concerns they could voluntarily submit to paying a refundable carbon tax on their fossil fuel imports from Australia. I’m not saying they don’t have every intention of going low carbon but as their dealer of choice Australia could help their resolve.

    The carbon tax on exported fuels would be
    thermal coal 2.4t CO2 per t coal X $23 = $55
    coking coal 2.7t X $23 = $62
    LNG 2.8t X $23 = $64
    yellowcake ~$x make it $5 for neatness
    with the money to be paid back into their sovereign green funds or for low carbon investment. Then in 2015 when we move to a CO2 cap based approach they take a suitable tonnage quantity cut, price effect unknown. Since Australia has a number of coal and LNG ports and is building more the global CO2 reduction should be significant. If China and India go elsewhere for a carbon fix then we, Europe and others carbon tax their goods and services on landing.

    Either CO2 is a problem or it’s not. If carbon pushers and customers don’t like this deal perhaps they aren’t genuine.


  169. ERCOT (the Texas grid) has had serious reliablity difficulties. (1) About three winters ago the cold high sat on the Texas panhandle and so the wind turbines stopped turing. ERCOT’s standby generators did not meet their commitments and so ERCOT had a class 1 power emergency, complete with rolloing blackouts. (2) Last winter two thermal generators (coal burners I believe) tripped off within one minute of each other as it was too cold. The resulting grid instability tripped off about a half dozen other thermal generators. Again ERCOT had a class 1 power emergency. (3) This past summer a hot high sat on Texas and so the wind turbines out on the plains once again stopped turning. The only wind (about 5%) which was of use was costal. As harrywr2 points out on the TCASE15 thread, ERCOT was just able to sweek by by various measures (and the fortune that the thermal plants were able to generate without tripping off).

    Earlier, up thread here I think, Barry Brook posted an e-mail from the Brave New Climate reporter in Texas. In that the difficulties of the Merchant Owned model of regulating a power grid were made clear; impossible to build anything but more wind turbines and natgas burners. Talk about more of the dog what bit you…


  170. Pingback: John Newlands: increasing fossil fuel use by China and India must cook the planet « SeekerBlog

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  172. Pingback: GHG emissions: it’s the developing world that needs help « SeekerBlog

  173. I apologize for the 404/bad link above. I rewrote my post on nuclear cooperation options that was prompted by John and Harry’s comments. Now there are two posts:

    GHG emissions: it’s the developing world that needs help

    China: nuclear development challenges

    Harry’s link to the China Focus op-ed identified a Chinese-born Johns Hopkins academic, Bo Kong, who is researching China’s nuclear development. That has led to other useful Kong publications.


  174. John Newlands, on 26 October 2011 at 9:07 AM said:

    if China and India are genuine in their CO2 concerns they could voluntarily submit to paying a refundable carbon tax on their fossil fuel imports from Australia. I’m not saying they don’t have every intention of going low carbon but as their dealer of choice Australia could help their resolve.

    Considering that Australia still refuses to sell India Uranium somehow I think India will be less then receptive that they should pay a tax on coal.

    Australia agreed to sell China Uranium 5 years ago.

    A tonne of imported steam coal in China or India costs in excess of $100. A 1,000MW coal plant burns in the neighborhood of 4 million tons a year for a fuel cost of $400 million per year. A Westinghouse AP1000 built in China is reported to cost around $2 billion.

    The finance argument for nuclear over coal in China or India is a ‘no brainer’.

    India’s current build rate for nuclear power plants is 2 per year.

    China’s build rate is around 6 per year. If one reads various editorials in Chinese English language newspapers there is some concern that the acceleration of China’s NPP build rate has out paced it’s ability to properly oversee the construction and operation.


  175. David B. Benson wrote:

    ERCOT (the Texas grid) has had serious reliablity difficulties. (1) About three winters ago the cold high sat on the Texas panhandle and so the wind turbines stopped turing. ERCOT’s standby generators did not meet their commitments and so ERCOT had a class 1 power emergency, complete with rolloing blackouts. (2) Last winter two thermal generators (coal burners I believe) tripped off within one minute of each other as it was too cold. The resulting grid instability tripped off about a half dozen other thermal generators. Again ERCOT had a class 1 power emergency. (3) This past summer a hot high sat on Texas and so the wind turbines out on the plains once again stopped turning. The only wind (about 5%) which was of use was costal. As harrywr2 points out on the TCASE15 thread, ERCOT was just able to sweek by by various measures (and the fortune that the thermal plants were able to generate without tripping off).

    Sounds like this has more to do with conventional thermal plants going off-line and extreme isolation of Texas grid than with intermittency of wind. As you suggest: 1) “standby generators did not meet their commitments,” 2) thermal generators “tripped off” (50 of them), and 3) 20 power plants shut down with razor thin reserve margins, and record prices approaching $600 per MWh. Certainly, ERCOT CEO Tom Doggett has not been faulting wind for any of these problems (here, here, and elsewhere). Barry’s source above is a good one, this one too (from Reuters) on “energy only” market, cheap natural gas prices, and uncertainty over EPA emissions rules standing in the way of new power plant construction. Sounds to me like they need more wind, a “capacity market” in Texas (as they have in New England and mid-Atlantic States), accept new emissions standards (they’re going to come one way or another), and a “mess with Texas” attitude to better partner with neighbors on grid development and interconnects.


  176. El,

    Sounds to me like they need more wind, a “capacity market” in Texas (as they have in New England and mid-Atlantic States),

    The electricity reliability council only allows 8% of nameplate capacity for wind in Texas. I think one could make the case that the ‘energy only’ market is what gave Texas 10GW of wind turbines(along with 30% subsidy)


  177. EL & Cyril R. — Thanks for the links, informtative of the parilous state of ERCOT. The anticorrelation of wind and demand once again suggests that wind ain’t much help.

    What we don’t have is an agreed upon quantitative Quality of Power (QoP) measure. Qualitatively, where wind stands is clear enough.

    EL — I fear you fail to comprehend just how big and isolated Texas is. [New transmission lines in Germany are expected to cost up to US$10,000/km. Texas has alota those kms.]


  178. It’s nice to see the admission that capacity markets are required where intermittent supply is generated on a ‘must take’ basis.
    That must be considered a cost of the intermittent supply, as the capacity market is required as a result of the devaluation of suppliers that can meet demand. had an article based on some Californian studies:
    “The same CAISO study that projected a 35% increase in “starts” for combined cycle units also forecasts that revenues for these units will drop by 16% as the influx of wind and solar generation on the system drives down energy prices and reduces the overall need for energy from gas-fired units. Revenues for gas-fired steam and simple cycle turbines are expected to decrease by even greater amounts—29% and 39% respectively.

    Flexible gas-fired generation in excess of historic planning reserve margins will be needed to reliably integrate increased renewable generation. However, capacity markets that have traditionally viewed resource procurement in terms of planning reserve margins and “resource adequacy” are not equipped to appropriately value and compensate generators for renewable integration services.”

    This week the council harrywr2 just noted, FERC, ordered wholesale marketers to better value load balancing power:
    A new rule enacted by the Federal Energy Regulatory Commission (FERC) on Thursday orders organized wholesale power market operators to pay “just and reasonable rates” for providers of regulation service, an ancillary transmission service that protects the grid by correcting deviations in grid frequency and balance on transmission lines with neighboring systems.

    I’d note the integration of wind into the BPA jurisdiction, as well as in my own IESO, has been done in exactly the opposite manner – Valuing intermittent sources far higher than the load balancing provided by existing, publicly owned, hydro assets.


  179. Californian energy expert group reaches same conclusions as BNC and pretty much everyone else that has looked at the issue in a hard-headed, quantitative manner. Jane C S Long, a member of that group, writes in Nature just out:

    In 2005, California threw down the gauntlet: by executive order, the state must reduce greenhouse-gas emissions to 80% below what they were in 1990, by 2050. Similar targets have been adopted in Europe, but the California goal is well beyond any federal policy taken on in the United States. Is it possible? What will it take to achieve it? For two years, I was part of a group of energy experts in California that tried to answer those questions. Our report, California’s Energy Future — The View to 2050 , was released by the California Council on Science and Technology earlier this year.

    It seems not to be paywalled (, however, some conclusions if you can’t be bothered reading it all:

    “To reach an 80% cut will take new technology.

    Emissions-free electricity is one hurdle. California has plenty of renewable resources, but they are intermittent. Energy-storage technology is not yet good enough to solve this problem, and no one knows whether smart-grid technologies can. Using natural-gas generators to firm up the supply will mean falling short of the 80% goal.

    A reliable reinvented energy system should provide base-load power without intermittency or emissions. California should exploit all the geothermal energy it can. Carbon-capture schemes should focus not on coal-fired plants, but on lower-cost natural-gas plants, which produce fewer emissions to sequester. And the state should rethink its opposition to nuclear power.”


  180. Cyril R. wrote:

    EL, the simple fact is that wind is making it worse for Texas:

    For Texas, wind fails just when it’s needed most.

    Well, you’re definitely not going to like this one then! With load shifting and storage equivalent to one day of average demand, this study found a highly constrained transmission grid such as Texas can sustain up to about 80% variable generation (from wind and solar), and with curtailment rates at less than 10%. Perhaps they need some solar to balance out the wind in West Texas, since both seem to correlate well together, and solar is also available when electricity demand is high (summer months and daytime).

    I remain unconvinced that wind is a deciding factor in any of these cases, especially when up to 20-50 power plants (representing some 7,000 MW of generation) were offline due to weather related shutdowns, and exceeded by several orders of magnitude operating reserve margins. Those are pretty important numbers too! Wind was producing what it was forecast to produce (roughly 7% of state’s total electricity demand), and helped minimize the production challenges from thermal plants (according to ERCOT CEO and other sources). Not too complicated.


    Scott Luft wrote:

    It’s nice to see the admission that capacity markets are required where intermittent supply is generated on a ‘must take’ basis.

    Yes … I basically agree. This is a productive way to approach the issue, and points to the challenges (and trade-offs) with intermittent sources (and additional impacts on balancing, frequency regulation, and integration services). I’m always looking for more information on this, particularly as it impacts current wholesale energy markets and the valuing of different generation sources. It seems to me this additional “capacity” cost can be dealt with in any number of ways, and perhaps incentivizing solutions away from costly fossil fuel back-up may be a good thing? The new FERC rules seem to be a positive step in the right direction. It doesn’t seem like they directly address any immediate concerns, but clear the way for further development of technologies and markets around fast-responding resources and are perhaps another signal that energy storage may be ready to go in the near future. Unanimous support seems to indicate these were relatively non-controversial and much needed reforms.


  181. The Diesendorf alternative plan to ZCA is described in this blog for 25/10/11
    Key elements appear to be
    1) burn more gas
    2) hibernate in winter.
    The first point seems odd if is supposed to be a path to 100% renewables. When gas runs out the backup will apparently be liquid biofuel, the very thing nobody seems to have got right yet.

    It seems when the wind blows and the sun shines everybody can have a good time. Otherwise it’s huddle under a blanket watching a small screen TV. Actually I’m not sure what the plan is for conserving energy in winter but it sounds hard. This will not be a public relations winner.


  182. David B. Benson – sorry about my local acronym. Independent Electricity System Operator, in Ontario. My province includes Niagara Falls – the Niagara River system plants provide close to 2000MW on our Canadian side, and the American side has roughly the same capacity (there is a water use agreement).
    That output, publicly owned, is regulated at about $37/MWh, while public wind generators receive a feed-in-tariff rate of $135/MWh (and a guaranteed sale on all generation).
    We also get about 60% of our consumption from nuclear last year, so most new generation is exported at about $30/MWh. And we get negative pricing. This is exactly the trend that occurred in Germany and led to calls to remove baseload. Fukushima was an excuse – the issue was already being noted by German politicians (some of whom were active in Ontario’s recent provincial election).

    This is a quote included in the World Nuclear Industry Status Report:

    ““If someone declares publicly that nuclear power would be needed in the baseload because of fluctuating energy from wind or sun in the grid, he has either not understood how an electricity grid or a nuclear power plant operates, or he consciously lies to the public. Nuclear energy and renewable energies cannot be combined.”—Siegmar Gabriel, then-Federal Environment Minister of Germany

    EL, I strongly disagree with the premise that storage can make wind valuable. Storage would make everything more valuable (running at higher capacity factors) – the relative value of wind would be unchanged.
    But …
    The market issues are interesting. It’s worth noting that Germany was putting out interests in capacity markets (also in moving from FiT to RPP), and received a very clever rebuttal from Norway’s Statkraft:


  183. Scott Luft — Thanks for the info. By the way Statkraft apears to be a German company [and overrates the Norwegian hydro systems capacity to store; already Denmark has to pay Norway to take away excess wind energy so the Danes can buy it back later.]


  184. I met the CEO/President of this company at lunch today:

    Click to access Buckminster%20Fuller%20Challenge%20Entry.pdf

    Fascinating what they are doing. A 2 wheel car that acts like a 4 wheel car. $12,000, 200 km range, 0-100 km/h in 4.6 s (I think I got that right) .

    Solo drivers commuting to and from work consume 21% of America’s energy budget. At one end of the transportation
    spectrum, this suggests we need to invest in mass transit and re design our cities. Such projects are decades in the
    making and are not applicable to the developing world. Domestically, there is a rush to build electric cars to eliminate
    pollution. But this does not solve the congestion problems and merely shifts the energy production out of the city.


  185. EL, your argument is that wind is such a small portion of Texas’ electricity supply, that it poses no destabilizing threat to its grid, is rather dumb.

    Don’t worry, its so useless, that we have so little of it, we don’t have to worry about how bad it is.

    Wind is unreliable and unproductive, but don’t worry, we don’t have much of it and we just use natural gas and ‘clean’ coal for the other 80-90% so we don’t have to worry about grid stability. Hum.

    If energy storage makes sense for Texas, that is completely seperate from whether wind makes sense for Texas. All large scale energy storage has been built to use cheap reliable productive baseload power to shift to peak power.

    This is a similar non-argument as the “efficiency and wind make sense” or the “hydro and wind provide x amount of electricity so they are useful”. Lumping in one good one to outshadow the bad marginal one is false advertising. If efficiency and energy storage make sense for Texas, they make sense without wind, and with baseload nuclear or coal. So take your pick, coal or nuclear.


  186. EL, on 27 October 2011 at 11:03 AM said:

    Well, you’re definitely not going to like this one then! With load shifting………

    A study was done on voluntary real time pricing as a mechanism to ‘shift load’

    Click to access 54238.pdf

    Most RTP programs have generated modest load reductions, in terms of their absolute magnitude. Of the ten programs for which an estimate of the maximum load reduction was provided, only two have generated load reductions greater than 100 MW, and only one has
    generated load reductions greater than approximately 1% of the utility’s system peak.For most programs, the modest load response directly reflects the small amount of load enrolled. However, some program managers also pointed to the fact that RTP prices have remained too low for participants to respond significantly, or suggested that few participants were price responsive


  187. David Benson, the change structure, but I believe remain completely controlled by Norway’s government:

    If the cost of intermittents is paying for capacity, and if the cost of capacity markets is distorting free markets and free trade – both of which should improve efficiencies and costs, again the full market value of intermittent supplies becomes a murky prospect.

    And that assumes pure markets are desirable for electricity supply.

    A real hard economic analysis would say Texas works just fine. In the winter they did have pipes freeze up – generally at older coal plants – knocking them offline, and that cascaded into rolling blackouts which in turn pointed out some areas of non-smart in their grid (the blackouts knocked out some gas generators). But they got through it with some rolling blackouts that were limited in duration, and price spikes.
    In the summer, same deal without the blackouts.
    That’s a free market (without free trade as ERCOT is, most likely deliberately, largely isolated from adjacent grids). People like to think of supply and demand driving price, but the scarier term for most people would be markets manage scarcity.
    Should poor people use air conditioners when it is very hot?
    Should poor people heat when it is very cold?
    These don’t strike me as strictly economic questions. The economic model needs to be ready to meet peak demands. $3000/MWh price spikes are a bad way to do that – socially, and politically.


  188. Scott Luft wrote:

    The market issues are interesting. It’s worth noting that Germany was putting out interests in capacity markets (also in moving from FiT to RPP), and received a very clever rebuttal from Norway’s Statkraft:


    That’s an interesting paper. Sounds like they are much more willing to let consumers pick up some of the slack in Europe (demand response, smart meters, residential curtailment or conservation) than we are here in the US (where “energy only” means energy all the time, and conservation for later). This is clearly where everyone is heading, but Europe is ahead of the game. They seem to think demand response, conservation, and some form of storage (pumped hydro from Norway, solar to hydrogen, batteries, or the like) are going to get the job done (and new peaking plants will come on line when they are needed). They cite many challenges in 2050 with an 80 percent renewable energy target and lack of a capacity market, but we aren’t there yet (and no need to put the cart before the horse). I like the emphasis on a zero marginal cost generation, but don’t like the high retail prices for energy in tight production markets that are needed before new capacity is built and brought on line. Seems to me there is a more reasonable middle path, and setting the price targets in a capacity market (together with higher penetrations of renewables in Europe) will be key. In Texas, they could use some assistance from Statkraft, and reach out to their neighbors for some help (although affordable hydro from Manitoba is a long ways away). Sounds to me like we’re all waiting for some energy storage to emerge out of the wings (until then, we can certainly build a few gas plants, keep up with transmission improvements, and start walking down the path of demand response and grid dispatchable loads).

    On a related note, in my neck of the woods (Illinois), the State legislature just overrode a democratic governor’s veto on a $3.2 billion dollar smart grid initiative. “Half of the utility’s equipment is more than 40 years old and 30 percent of it’s poles are more than 50 years old.” We had 3 weather related outages in my area this year (some lasting up to 5 days), and numerous throughout the state from frequent wind and thunderstorms. A small smart grid pilot project in Oak Park (20,000 homes) performed well during this period (with no outages), and legislators are promising the same from upgrades mainly in the southern part of the State. Construction is set to begin this January (and create an estimated 2,450 jobs). Governor opposed the proposal (sponsored by democrats) on the grounds it lacked adequate price controls, and reforms our “fiat” process for establishing retail prices for electricity in the State (in response to a record of past abuses from ComEd).


  189. EL, on 28 October 2011 at 4:00 AM said:

    Sounds like they are much more willing to let consumers pick up some of the slack in Europe (demand response, smart meters, residential curtailment or conservation) than we are here in the US (where “energy only” means energy all the time, and conservation for later). This is clearly where everyone is heading, but Europe is ahead of the game.

    So the British, Finnish, Polish and Czech nuclear expansion plans have been what?

    As far as residential curtailment I’ll quote a famous movie line

    Higgins: Not now – then! Ask ’em when they’re running out. Ask ’em when there’s no heat in their homes and they’re cold. Ask ’em when their engines stop. Ask ’em when people who have never known hunger start going hungry. You wanna know something? They won’t want us to ask ’em. They’ll just want us to get it for ’em!

    IMHO Smart meters and residential curtailment sound fine on paper…when people find out that their air conditioner is being turned down by the ‘central authority’ and their heat is being turned down by the ‘central authority’, the ‘central authority’ will find out exactly how much the public is wiling to ‘sacrifice’. In the US the ‘OWS’ movement already has a possibility of morphing into full fledged civil unrest.


  190. Conservation, curtailment, oh it all sounds so good, I feel all warm and fuzzy inside.

    Once again a simple numbers sanity check brings us down to reality:

    Click to access 25ELEC.pdf

    Europe has been conserving so well, that the electric demand has more than doubled over the last 4 decades and is showing no sign of slowing down.

    The warm and fuzzy feeling seems to have ebbed away, odd.

    So much for conservation. As we can see in the graph, nuclear has a substantial contribution to reducing fossil fuel use in electricity. And it can grow rapidly to actually reduce total fossil fuel generation, as the period before Chernobyl shows (1980s).


  191. Re sidebar link to the movie The Hunter; I haven’t seen the movie but the film crew stayed locally. My view is that the thylacine would have become extinct anyway as it couldn’t adapt fast enough, perhaps the same fate that awaits h. saps. Top predators need a rich energy supply and cannot cope when it dries up. I’ve noted that related species in the same order as thylacines have had a bumper year with La Nina weather and are big and healthy. It’s the lean times that are the killer if the species doesn’t adapt.


  192. harrywr2 wrote:

    IMHO Smart meters and residential curtailment sound fine on paper…when people find out that their air conditioner is being turned down by the ‘central authority’ and their heat is being turned down by the ‘central authority’, the ‘central authority’ will find out exactly how much the public is wiling to ‘sacrifice’. In the US the ‘OWS’ movement already has a possibility of morphing into full fledged civil unrest.

    I think of it more like an intelligent concierge, or CPA looking over your taxes (optimizing loopholes), than a nagging nanny tricking you into going to bed early at night. You set the criteria, and your energy company saves you money (by turning off your pool pump because you forgot to do so on the weekdays). I don’t count voluntary consumer RTP as the best bank for your buck in demand response, and assistance for low income residential consumers is very important. This will likely come from scheduling of larger loads in commercial and industrial contracts, municipal water and lighting systems, mass transit, and EV charging of commercial and private fleets. So you might notice the lights getting dimmer in your neighborhood when it’s 100 degrees out (as they do in Oslo for a 62% demand reduction), or when a cold snap shuts down your thermal plants at peak demand (and yes, even when intermittent sources are lagging behind the demand curve some 0-10% of the time). I haven’t seen much widespread disapproval of smart meters in pilot projects, and much of this is simply resistance to change (and initial sticker shock at real time costs for peak electricity). Our grid hasn’t changed much in more than 80 years. With all the technological and engineering expertise we have at our disposal, I find it hard to argue against a much needed facelift. I don’t see the OWS crowd objecting to infrastructure spending that improves public services and creates jobs (and especially in a well regulated marketplace where utilities and consumers are communicating better with each other).


  193. EL,

    I haven’t seen much widespread disapproval of smart meters in pilot projects, and much of this is simply resistance to change
    On behalf of several Maine residents, Skelton, Taintor & Abbott secured a landmark decision that will benefit utility customers throughout the country. Alan Stone, chair of the firm’s energy law group, successfully convinced the Maine Public Utilities Commission (MPUC) to find that it was an unjust and unreasonable practice for Central Maine Power Company (CMP) to refuse to permit residential and small commercial customers to opt-out of CMP’s smart meter program.
    MARIN COUNTY, Calif. — The Marin County Board of Supervisors Tuesday approved a one-year moratorium on the installation of PG&E’s SmartMeters in unincorporated areas of the county.
    The Union of BC Municipalities (UBCM) passed a request for a moratorium on BC Hydro’s Smart Meters, Friday, September 30.
    Santa Cruz Extends Smart Meter Moratorium
    British Columbia’s Green Party is urging a halt to smart meter installation across the province because of health and environmental concerns.


  194. Scott Luft — Thank you for the correction and also the interesting observations.

    Seems to me that one has to start with a reliabity goal. I’ve forgotten what FERC has settled upon, but when I saw it I thought that value was far too low. In any case, one aspect of reliability is providing enough capacity to meet peak loads (which seem to happen both in the summer and the winter in Texas?) Of course we will eventually attempt to use variable pricing around here in an ‘experiment’ to see if that, combined with the so-called smart meters already installed, makes much different in peak shaving. I personallydoubt that it will make more than a few percent difference in that peak; various energy efficiency measures ought to actually do more.

    In any case, once relaibility goals are established utilities can progress towards a economic mixture of generators which meets that goal; so far it appears that ERCOT hasn’t met the FERC reliability requirment for the past 3+ years.


  195. I for one do not disapprove smart grids and smart meters.

    I disapprove the notion that smart grids are magical things that will solve all wind and solar intermittency problems so that they can be used as the majority of our electricity supply. This notion is simply incorrect.

    Smart grids can’t make the sun shine at night or in winter, or make energy storage affordable. It can help with short term reliability, better integrate novel electric loads such as electric vehicles, heat pumps etc., and some consumer awareness/involvement/creating interest in energy issues, but it can’t solve the fundamental problems of wind and solar.


  196. EL, thanks for that.
    Smart grids should be good because data should be a good thing. I used to work for a company that promoted the idea that people with better data make better decisions.
    That’s very questionable. My main worry with your description is the process, if politics drove the implementation. I’d think the decisions would be more intelligent driven by the utilities and approved by an active regulator. Since Ontario decided every house would have a smart meter delivery charges doubled – since Ontario started introducing time-of-use pricing the peak rates are relatively stable, and off-peak has doubled. It doesn’t seem to be helping with efficiency – but it could. I’d think the decisions would be more intelligent driven by the utilities and approved by an active regulator. Hopefully your legislature was supporting utilities, in overriding the governor.

    If my reviews of EIA data are right, Illinois manages to get a surprisingly high emission intensity (a little over 500 g/kWh CO2) for a jurisdiction with half it’s generation from nuclear sources. I assume older coal is used primarily as an intermediate source, and replacing those units with CCGT would quickly drop total emissions (I’ll also note the recent Bentek study reportedly noted the neighboring area, particularly IA, as the most significant example of IWTs dropping emissions – I’d suggest due to most generation coming from coal there to begin with).
    IL could learn from Ontario’s experience with, particularly, the feed-in-tariff programs for wind – which have brought to market supply which has devalued all generation, and frequently required maneuvering of nuclear units to reduce production (steam bypass techniques)
    I did use Illinois as a comparison state in a piece I wrote on Ontario emissions – more related to air quality. Looking at it again, the one really notable thing about IL, over the past 20 years, is the increased generation.


  197. The US Pacific Northwest 6th Power Plan.

    Click to access SixthPowerPlan.pdf

    300 pages of how to deliver reliable, inexpensive power for the next 20 years. Lot’s of interesting stuff like impacts of expected plug in hybrids, impacts of direct control of residential air conditioning and space heating, impacts of conservation measures, impacts of wind turbines. Comparisons of Generating technologies including such ideas as burning cow manure. The wind graph for Jan 2009 on page 269 is a bit disconcerting, it would appear wind generation was zero for 12 days straight.


  198. harrywr2 — Thanks, but that is just for Bonneville Power Administration. My utlity only buys about 20% of its power from BPA and has its own long-range plan. However, I am sure that the Avista Utility planners read the NPCC power plans. :-)


  199. David B. Benson, on 29 October 2011 at 9:03 AM said:

    Thanks, but that is just for Bonneville Power Administration. My utlity only buys about 20% of its power from BPA and has its own long-range plan

    My understanding is that all the regional utilities except Bonneville feed their planes into the PNUCC, then Bonneville + PNUCC feed into the NW Council for the ‘regional’ plan.

    As an example NW Council shows about 5,800 MW of wind and BPA only shows 3,500. .


  200. harrywr2 wrote:

    On behalf of several Maine residents, Skelton, Taintor & Abbott secured a landmark decision that will benefit utility customers throughout the country. Alan Stone, chair of the firm’s energy law group, successfully convinced

    Seems to me a lot of these people are complaining about the health effects of the wireless technology that beams “electromagnetic frequency radiation” from SmartMeters, and the extremely high risk this radiation may penetrate their tin foil hats? In BC it’s “Citizens for Safe Technology,” in Marin County it’s worry over transmissions 45 seconds/day (at less power than a cell phone or baby monitor), Santa Cruz residents hear ticking noises from their meters, Greens cite environmental pollution from wireless signals, and Maine has thrown in the whole kit and kaboodle (health risks, peak energy pricing they don’t want to pay, mettlesome government regulations, and constitutionally limited government … “oh my”). Don’t they know today’s conventional meters also “beam” a wireless signal to the outside world, and is this any less intrusive than having a person visit your home each month to “take a reading”?

    For a look at what the OWS crowd might be thinking with respect to energy, this story from Colorado might be instructive. Boulder area residents are looking to vote out their utility company, and usher in an era of “energy home rule”: with more solar, more renewables, more smart meters, more personal responsibility for energy use, and less emissions from coal. And apparently, they seem willing to pay for it (and have been paying for it all along with higher utility costs and voluntary enrollment in solar energy and conservation programs). Xcel certainly isn’t turning away from the fight, and says “costs” are ultimately what everyone should be focused on … and the bargaining (or lobbying) power and scaling of services that a “too big to fail” energy company can provide.


  201. EL,

    Boulder area residents are looking to vote out their utility company, and usher in an era of “energy home rule”: with more solar, more renewables, more smart meters, more personal responsibility for energy use, and less emissions from coal

    Boulder is a ‘University Town’, 25% of it’s residents are between 18 and 24. 29,000 university students in a town of 100,000 is a huge proportion.

    Of course those 29,000 students will eventually graduate and move away. They won’t be left picking up the ‘minimum cost’ of $290 million to start a municipal utility.(Estimates range as high as high as $1.2 billion)

    Of course the original estimate for starting an electric utility based on ‘back of the envelope’ calculations was $27 million.

    Click to access 0149_001.pdf

    The National Center for Atmospheric Research is in Boulder, their computer center for some reason is being built in Wyoming.
    The computing center is expected to consume 3-4 MW of electricity.
    That would be enough to power how many homes in Boulder?


  202. Lucrative export gas prices favour new coal plant
    This is why Hazelwood Vic with cheap as dirt brown coal will never be fully replaced with gas unless carbon taxes are astronomical.

    If the Federal govt in about 2015 realises this but still refuses to allow nuclear they can do several things
    1) force WA and Qld to sell a share of gas to south eastern Australia
    2) allow some lame excuse like ‘carbon capture ready’ for coal plant
    3) allow absurdly generous offsets for new coal plant.

    The difficulties will be compounded moving to a CO2 cap when the ETS replaces carbon tax. Some convoluted reasoning will be needed to allow new coal plant. As in when we are 100 Mt CO2 over budget but claiming it’s sort of not really there.


  203. Peter Lang,
    I can’t disagree with many of your comments, but I’ll draw your attention to a short article from the height of the 1970’s Oil Crisis. I understand it was printed the day oil prices peaked – and it was titled “The Coming Energy Glut”
    I’m not convinced it is an argument for a carbon tax – but I’m more inclined to listen than I’ve been in the past after rereading it a couple of times. The argument is, in part, the elasticity of substitution is greater than the elasticity of demand.
    A trigger for the engineering innovation, for substitution, is a change in the existing pricing regime:

    “…if you change expectations about the price of the most important present energy source, namely oil, from under $3 a barrel before this autumn to a level where people and governments and profit-seeking entrepreneurs actually believe that it is going to be over $12 a barrel or $17 a barrel (or whatever is the figure that the latest hopeful Arab or temporarily panic-stricken auction bidder last thought of), then people and governments and profit=seeking entrepreneurs suddenly believe that billions of possible new answers will be more profitable than whatever of the “several million answers” is the one most people are using now…”,2425780


  204. Scott Luft, on 31 October 2011 at 1:43 PM said:

    A trigger for the engineering innovation, for substitution, is a change in the existing pricing regime:

    I would add that the inflation adjusted price of coal was dropping in the US from the 1980’s to about 2000 due to productivity increases. I know that Australia was also enjoying a productivity increase that only recently reversed.

    There is no point in investing in attempting to make a ‘cheaper, better, faster’ substitute for a product whose price was dropping.


  205. The British Global Warming Policy Foundation has released an new paper titled “The Myth of Green Jobs”.

    44 pages long, it’s a bit too long to precis here, however it is very much worth the time it takes to read it.

    Questions addressed by economist Prof Dr Gordon Hughes of the University of Edinburgh centre on:

    “Question 1 – Why would or should the creation of jobs be seen as a reasonable
    basis for assessing the merits of economic or, even more, environmental

    “Question 2 – If job creation is a relevant basis for assessing the potential impact
    of environmental policies, are there sound reasons to believe that green
    energy policies can lead to an increase in the total level of employment?”


    “Question 3 – Is there any convincing evidence that the green energy policies
    being implemented in the UK and the EU will actually lead to higher levels of
    total employment, either in the short term or long run?”

    It does a very good job at dealing with what the Prof calls “do-it-yourself economics” while debunking false claims about the economic basis for unreliables, especially wind power. The take-away message is predictable – money wasted today will result in a lower standard of living tomorrow.

    If in a hurry, read the introduction and conclusion then come back to the paper later when you have time to read toroughly.

    Written in plain english the paper is exceptionally easy to understand.

    This authoritative work is worth bookmarking for future reference.


  206. And another…

    Europe’s Green Energy Chaos, in European Energy Review.

    I don’t agree with everything written in this article, or the occasionally dense way that it is written, however it is the result of a pretty good effort to examine the statement “The EU’s climate and energy policies are too expensive, too ambitious, too complex – and ineffective to boot, argues Andrew MacKillop.”

    The author, predictably, reinforces my previously stated opinion that the European public will soon realise that many gee-whiz green renewable high cost low deliverables energy plans are unaffordable hobbies with minimal chance of achieving substantial CO2 reductions.

    He has done enough homework for a non-academic work.


  207. has anyone read the strahan article twittered by barry? It’s a criticism of germany’s decision to shut down its nuclear plants; and it supports the british decision to build more nuclear. but strahan still views nuclear as a bridging technology and he asserts with certainty that an all renewables scenario will find the “balancing technologies” it needs.

    Perhaps on pragmatic grounds one need not object too much to this. On the other hand, such views might delay research on future nuclear power. I would like

    to know where he gets his crystal ball.


  208. Energy density: It would be helful to have at one’s fingertips the energy densities for various low and high carbon scalable energy sources; hydro need not apply as not scalable. Further, the area required to store ‘wastes’ such as flyash and once through nuclear rods in dry casks.


  209. Generation III+ plants can use existing metal alloys, but Gen IV plants operating at higher temperatures will require new materials, which will need a long (eg 15-year) lead time to develop. from
    Heavy Manufacturing of [Nuclear} Power Plants
    which, after a long and not very interesting reading, certainly suggests that the world is quite well supplied with the heavy forging units required.


  210. A couple of weeks ago the Energy Users Association of Australia (EUAA) released its Renewable electricity in Australia: outcomes and prospects report. If it’s been reported anywhere, I missed it. I’ll let some quotes from the executive summary speak for themselves:

    Our estimate is that around $12bn of subsidy has been paid or is payable for renewable capacity that was added between 2001 and the end of 2010. Electricity consumers will bear around 87% of this amount with the remainder borne by governments.
    A conclusion of the analysis in this report is that in the period to the end of 2010, in terms of emission reduction or renewable energy production, there is little to show for subsidies that have been paid. In other words, the greenhouse gas abatement that will be achieved through renewable subsidies has so far come at considerable expense. Specifically, we estimate that for renewable plant commissioned by the end of 2010, each tonne of CO2-e emission abatement that that plant will achieve over its life has required $76 of subsidy. This can be compared to a proposed emission tax of $23/tonne.

    The high abatement cost is largely attributable to the fact that the least efficient technologies have attracted a disproportionate share of the subsidy. Around 30% of the total renewables subsidy paid (and payable) for plant commissioned between 2002 and 2010 has been allocated to photovoltaics (PV). Yet over its useful life, this PV will deliver less than 5% of the total renewable energy that will be produced from renewable generation commissioned between 2002 and 2010.

    It goes on to express optimism that the new Clean Energy Finance Corporation and Australian Renewable Energy Agency will improve this lamentable situation, though as it also says “It will also need to be clear on what the problem is to which the CEFC is the best solution”. If only.


  211. Great summary here from Ray Pierrehumbert on climate-carbon relationship – something to memorise:

    Here’s all you ever really need to know about CO2 emissions and climate:
    — The peak warming is linearly proportional to the cumulative carbon emitted
    — It doesn’t matter much how rapidly the carbon is emitted
    — The warming you get when you stop emitting carbon is what you are stuck with for the next thousand years
    — The climate recovers only slightly over the next ten thousand years
    — At the mid-range of IPCC climate sensitivity, a trillion tonnes cumulative carbon gives you about 2C global mean warming above the pre-industrial temperature.


  212. Another summary from Ray Pierrehumbert ( I am paraphrasing here folks)
    “humans have done ok out of evolution, it is a pity that we have not developed a moral compass that allows us to use technology wisely”


  213. Want to hear something positive, for a change?

    Every so often, we hear that nuclear plants are not safe because they are not designed to withstand impact from large aircraft.

    This is not true, at least in the case of the GE/Hitachi/Toshiba ABWR design which received design approval in the US very recently.

    That is one less furphy to argue about.

    I guess that this approval has come in time for the consortium to submit a proposal to the Czechs for their two or more proposed new plants for which the RFP was issued recently and which will close mid-2012.


  214. harrywr2 wrote:

    Boulder is a ‘University Town’, 25% of it’s residents are between 18 and 24. 29,000 university students in a town of 100,000 is a huge proportion.

    Of course those 29,000 students will eventually graduate and move away. They won’t be left picking up the ‘minimum cost’ of $290 million to start a municipal utility.

    Just to provide an update … it looks like residents of Boulder decided to vote out their “too big to fail” corporate power provider, and start down the road of establishing their own municipal utility. By a narrow margin of 51.78% and 50.27% (unofficial) on the two initiatives, both were “successful,” and voters agreed to a $1.9 million annual tax hike to begin the legal and logistical planning for the change (which comes out to around “$1.20 more per month for a residential customer”). I’m curious how many students actually showed up to vote? City planners confirm this simply starts the process, and is not a done deal. Opponents of the initiative outspent supporters 10:1, and I’m guessing last minute threats by Xcel to repeal solar rebate and energy-efficiency programs didn’t win the company any additional good will from undecided voters. Sounds to me like a bit of bad timing, and also poor communication or community outreach from the company.


  215. It’s strange that both Canada and Australia have huge uranium deposits, both signed the Kyoto protocol yet both countries are hellbent on exporting fossil fuels. In Canada’s case there are the two proposed pipelines for oil sands liquid, one line from Alberta to the British Columbia coast and the other from Alberta to Texas. A few days ago climate scientist James Hansen was arrested protesting the latter.

    In Australia’s case we have new coal mines and CSG developments. Next Monday’s ABC Four Corners program will apparently discuss some of the problems. Even stranger is the the idea that we have to turn ourselves inside out to get domestic net emissions under 500 Mt (a weak target) while CO2 from exported coal is over 700 Mt.

    Disgraceful as it is both streams of fossil fuel exports won’t cover depletion elsewhere in the world. Canadian oil sands are unlikely to provide more than 5% of world liquid fuel demand and all Australian coal exports are less than 10% of Chinese demand. However since they are lucrative the big end of town and their captive politicians think they must be onto something. In the end both will prove inadequate while having added billions more tonnes of GHGs to the atmosphere.


  216. Jon Seymour, I suggest you consult Atomic Power Review for an excellent running update:

    Looks like some spontaneous fissions of U-235 that are producing these trace Xe-133/135 fission products that were detected, rather than any evidence of a chain reaction within the slumped corium. Spontaneous fission occurs in all U-235 at a low rate (due to quantum tunnelling rather than neutron collisions), including the isotopes in the rocks under your feet.


  217. Actually it is uranium-238 that is more likely to fission spontaneously. There is a rock dating scheme based on this: fission-track dating. Looking at thin sections of an old uranium-containing rock, with a microscope, you can see the tracks. Of fission fragments.

    In a nuclear reactor, even-numbered isotopes such as plutonium-240, or as I like to call it, emilsegrium, are the source of a lot of spontaneous-fission neutrons.


  218. The xenon story is reminding me of the iodine story earlier: that it was somehow an evidence of chain reactions continuing was a fact that the anti-nukes were quick to point out. They were proven wrong just as the xenon story. But we did get good evidence, once again, of who were the quick jumping fear mongering anti-nukes, almost wanting to believe their own scare stories. People such as Arjun Makijani and Arnold Gundersen were quick to jump to such conclusions of chain reactions going on, and were wrong.

    Fukushima has made it quite clear who are the real scientists that investigate before jumping to conclusions, and who are the fearmongering anti-nukes that assume the worst by default or by faulty reasoning.


  219. The Guardian reports that the UK Institution of Mechanical Engineers has issued a scathing assessment of the much lauded renewable energy “plans” of Scotland.

    The report is here:

    One of the more interesting figures quoted is that electricity is only 20% of Scotland’s end energy use, while heating is 49%. Aside from the sheer futility of believing that smart fridges and electricity conservation in general is going to make any meaningful difference to emissions, this demonstrates the critical importance of greatly increased electricity consumption to electrify heating if needed emissions targets are to be achieved. It is not unreasonable to assume a similar situation for much of northern Europe.


  220. @ Quokka:
    Good find, sir!
    The Scottish Parliament has committed to a non-enforceable and unmeasurable goal. This report demonstrates comprehensively why it is also not SMART: Specific, Measurable, Achievable, Realistic and Time-based.

    I very much agree with the statement at the foot of Page 6 “Engineering experience has shown that project targets which are not bound by these [SMART] constraints are rarely achieved.

    It is pertinent to note that much of the conversation between otherwise like-minded individuals regarding pathways to low CO2, energy secure futures founders on this very rock.

    Often, claims made by proponents and idealogues, when subjected to even cursory analysis are seen to be not SMART. Then, the discussion becomes a wide-ranging argument, one side searching for facts and the other offering opinion in response. Both, however are in agreement about the fundamental goals.

    BNC’s many threads, indeed this one also, bear witness to this reality.

    It is most unfortunate when whole governments go along with the spin and do not first verify that the proposed targets are SMART.

    Back to the IMechE paper…
    … The starting point from which to measure gains has not been quantified. The government does not know current annual electrical, heat or transport energy consumption figures, nor what percentage of these is currently from renewables.
    … The government has established broad plans for the electricity industry only. The other 79.7% (FN1) of Scotland’s energy budget has been ignored, however with a target of 30%energy to be renewables by 2030, this is clearly not possible via electricity alone.
    … Nameplate ratings for renewables have been adopted by the government as though they were continuous. (FN2)
    … Having not allowed for capacity factors, this criticism is compounded by there being no allowance for the back-up energy sources which must provide the missing 75%, ie the difference between the nameplate rating of the renewables and that same rating after multiplying by the Capacity Factor.

    And so on it goes.

    Perhaps the worst aspect of this is that some who want to believe that the government should achieve real carbon emission reduction will refer to the government’s “Route Map” and believe it. They will be seduced into this belief and conclude that there is no need for further action.

    These same folk will then point to the Government’s unresourced and unachievable Route Map and, believing that it is adequate, will use it to campaign against those further actions which will be absolutely necessary if their standard of living is not to be eroded.

    Scotland currently has about one third of its population affected by energy poverty, after having brought the percentage down to 13.4% in 2002 (FN3). Energy poverty is influenced primarily by availability and price of energy. High cost, unreliable and optimisticly under-provided renewable energy plans suggest to me, that the Scottish are facing rapid and shocking increases in energy poverty until the proposed plan is recognised as being defective and corrective action implemented – Scotland is going to have very many people living in energy poverty for decades to come.

    This IMechE paper looks at the engineering aspects of the plan. The social outcomes are largely only presented from a factual perspective.

    It needs little imagination to envision the social disruption which, say, 50% or higher energy poverty would bring, or what an electricity-poor future means to industry and commerce.

    As a coal mining friend of mine is wont to say “Let them sit in the dark and shiver, they will soon understand the value of mining.” I would say that it is the value of reliable energy supplies that they would learn, but this lesson will come too late for many.

    Blowin’ in the Wind.
    Bob Dylan wrote and Peter, Paul and Mary used to sing:

    “How many deaths will it take till we learn/
    that too many people have died?
    The answer, my friends, is/
    blowin’ in the wind.
    The answer is blowing in the wind.”

    That any government could expose its population to such a deficient plan scares me.


    FN1: See Table 1, Page 10.
    FN2: Installed Capacity and Intermittency, P9.
    FN3: Fuel Poverty In Scotland, P17.


  221. It’s becoming clearer by the day that no amount of deadly floods or firestorms will make governments pay more than lip service to greenhouse mitigation. Our sense of entitlement overwhelms any nagging doubts. Now it seems at the next climate conference developing nations (ie China and India) will argue they are entitled to increase per capita emissions to catch up with the West. Some might question whether they are also entitled to 2.5 bn people.

    On the face of it the situation seems hopeless. Australia is going through the charade of a carbon tax while increasing coal exports and throwing money at hopelessly inadequate renewables. When that fails we will spend billions appeasing our guilt with foreign offsets which don’t actually change world carbon flows. I think it will come down to recession, depletion and geo-engineering to save the day. In that case we will have to ask whether our political leaders were any use at all.


  222. Looks like we’re emitting more CO2 each year than estimated in the IPCC worst-case scenario … so with six degrees or more of warming by the end of the century, what will the Earth look like?

    There’s this book called “Six Degrees”, which draws up some scenarios. I didn’t read it, but I watched the Nat Geo documentary. Are these predictions still valid?

    One thing that bugged me is the claim that “the tropics will become uninhabitable”. How can that be? The tropics were teeming with life when atmospheric CO2 and sea levels were high in the past. So what would make them uninhabitable? I can see the added energy going into more powerful storms and trade winds, but temperatures too hot for complex life, could that really happen?


  223. Max, on 5 November 2011 at 10:46 PM said:

    Looks like we’re emitting more CO2 each year than estimated in the IPCC worst-case scenario

    The US Lawrence Berkeley National Labs modeled China Energy usage and emissions earlier this year using a complex model rather then just emissions per unit of GDP ratios.

    Click to access 2050_Summary_Report_042811_FINAL.pdf

    In the LBNL model energy demand appears to be ‘front loaded’ with things that drive energy demand then saturate. I.E. Per person urban living area going from 20m2 per person to 32m2 per person in the last 10 years.(Figure 3,page 25) That takes a lot of concrete, steel and glass which are all energy intensive.

    For comparison the average per person living area in the UK is 44 meters.

    Housing statistics for EU –

    Click to access housing_statistics_in_the_european_union_2010.pdf


  224. quokka wrote:

    The Guardian reports that the UK Institution of Mechanical Engineers has issued a scathing assessment of the much lauded renewable energy “plans” of Scotland.

    I’ve looked over the IMECHE report, and it doesn’t look like the Institution of Mechanical Engineers has actually read the roadmap document upon which the Scottish government’s policy objectives are based? This seems incredibly strange and a very significant oversight (since the study is intended as a rebuttal to the government’s renewable energy targets).

    Throughout the roadmap document, one sees the following statements:

    “an equivalent of 100% demand for electricity from renewable energy” (p. 3, emphasis added).

    “We are aiming for an output equivalent to 100% of Scotland’s demand for electricity to be met from renewables, but it will be very important to understand that this does not mean Scotland will be 100% dependent on renewables generation: renewable energy is part of a wider electricity mix” (p. 3).

    “Scotland already meets nearly 30% of its electricity demand (equivalent), and nearly 3% of heat from renewable sources” (p. 9).

    “The electricity generation mix that we see for Scotland is set out in our Electricity Generation Policy Statement which we published as a draft last November and which we are now revising in line with our new target … The draft statement gives a clear view on the need for both rapid expansion of renewable electricity across Scotland and the underlying requirement for new or upgraded efficient thermal capacity in this low carbon generation portfolio, progressively fitted with CCS.” (p. 20).

    And much more along these lines …

    Clearly, they are placing a great deal of emphasis on potential offshore wind resources and CCS baseload generation (linking to the following report), and we do not yet have a great deal of real world studies on the performance of these technologies (so many assumptions are being made). IMECHE is correct to point these out, but to suggest that the generation goal is based on a 100% renewable energy target for electricity is an error (and it appears to me they have wasted their time rebutting a policy document that simply doesn’t exist).


  225. @ Max

    “the tropics will become uninhabitable”

    I haven’t seen the doco you’re referring to, but I assume it means it might become largely “uninhabitable” for humans (think central Australia or northern Canada, for example). I don’t know the extent to which the claim is true though.

    And while complex life will almost certainly still survive in the tropical regions, biodiversity may be severely affected.


  226. @ EL, on 6 November 2011 at 11:22 AM:

    Several points:
    1. The Scottish government was criticised for spouting nonsense about their so-called roadmap document, which I have now read. My thanks for the link. The basis of this criticism was clearly spelled out by the IMechE in thier discussion paper.
    2. EL’s entirely unfounded accusation that the IMechE reviewers have not read the document that they are critical of is unsupportable nonsense. Of course they did! It is not appropriate that somebody should display such a low level of acceptance of others’ points of view on this site or elsewhere.
    3. More specifically, the IMechE set down in great detail that they could find no explanation of terms used to measure proposed energy (or power) improvements or of the starting point.
    4. EL has quoted “Scotland already meets nearly 30% of its electricity demand (equivalent)… (p. 9).” and clearly support this claim, even though the IMechE has at Page 11 of their discussion paper stated, in relation to Scottish renewable energy achievements:

    “… by the end of 2009 a figure of about 20% was reached, which is very encouraging. Nevertheless, it should be noted that this is a percentage of a lower than anticipated electricity demand in Scotland, largely as a result of the recession and that in 2009 about half of Scotland’s renewable energy output was supplied from the legacy hydro-electric plants…”

    The Government’s 30% figure stands unsupported and challenged. It is not credible. The non-hydro renewables percentage is either 10% or 20%, but cannot be both. This cuts to the heart of IMechE’s criticism, which EL avoided responding to.

    Did EL read the IMechE’s report?

    I will not attempt a blow-by-blow comparison of the Institution’s report and EL’s contribution above, however I will point out that IMechE specifically and strongly emphasised the need for SMART (as cited by me above) solutions. As things stand, the Scottish government publication has been correctly accused of lacking rigour, failing to define terms, failure to identify current achievements or future goals in meaningful terms.

    I suggest that EL re-read the IMechE’s report attentatively and that this contributor develop an understanding of why these deficiencies are relevant and why addressing them is essential.

    IMechE has done a public service by pointing to the weakness of the governments’ “roadmap”. Their 21 pages demand a rational answer, because without the firm foundations that these answers could provide, the inaccuracies and unsubstantiated statements of the Roadmap’s 124 pages have been demonstrated to be not fit for purpose.

    This is not a trivial discussion point – it cuts to the heart of the credibility of both the Roadmap and the Scottish Government’s energy plans. Without clear, factual rigour, the Roadmap is worse than useless, as I stated in an earlier post. It is potentially very harmfull indeed.


  227. John Bennetts wrote:

    IMechE has done a public service by pointing to the weakness of the governments’ “roadmap”. Their 21 pages demand a rational answer, because without the firm foundations that these answers could provide, the inaccuracies and unsubstantiated statements of the Roadmap’s 124 pages have been demonstrated to be not fit for purpose.

    Hey John. The merit of my observation is very simple. The IMechE study is a rebuttal of a proposal based on 100% renewable energy generation. This is not the scottish government proposal! As the road map document clearly indicates, the scottish government proposal has a basis in current generation, CCS and other energy sources for balancing, grid enhancements and demand response, and additional renewables (most specifically offshore wind). If you have evidence to the contrary, please provide it. You have provided no direct quotes or any substantive argument related to either of these reports, just a suggesting that “somehow” my observations are inadequate. Forgive me for being so direct, but I’ve read through both these reports, and I’m not willing to just take your word for it. If you want to dispute my observations (which I have provided with direct quotations), you need to show your evidence for doing so.


  228. G.R.L. Cowan wrote:

    A little more than a year ago, in the “Do Climate Skeptics Matter” thread, I was accused of denying the existence of the “Better Place” electric car battery-swap scheme. If I did so, it was inadvertently.

    How’s it coming?

    I’m not sure your point? They have buy-in from Renault, Chery Auto (China’s largest independent automaker), and are rolling out the system in Israel, Japan, Denmark, Hawaii, Australia, and elsewhere.

    Personally, I don’t think this approach will likely succeed, I think it’s far more likely we’ll get an EV replacement with a 300-500 mile range in the next decade (especially looking at current development trends around metal-air batteries, used in railroad switches, hearing aids, pagers, medical devices, and which have specific energy densities much greater than today’s NiCd or lithium ion battery chemistries, here and here).


  229. John Bennetts wrote:

    EL: I did. ‘Nuff said.

    I must have missed it. Where did you show that the Scottish Government proposal is based on a 100% renewable energy generation target, and not a generation mix including renewables and new or updated thermal generation for balancing, baseload, and peak generation?

    The Scottish Govenment’s roadmap and Draft Policy Statement (2010) is unambiguous to this effect: “As a high-level conclusion, this analysis suggests that a Scottish electricity generation mix cannot currently, or in the foreseeable future, operate without baseload and balancing services provided by thermal electricity generation [highlighted as a pull out in the report] … it is unlikely that Scotland will meet its future energy needs without some form of electricity generation from thermal plant [sic.] as part of a balanced generation mix portfolio — either as baseload or peaking plant” (p. 26). I’m not sure how much more clear it can get than this, and why the IMechE study authors missed the mark so badly, and appear to have provided an extended analysis and technology review for a policy proposal that simply doesn’t exist.


  230. … if that frequency [of a serious nuclear accident] is taken as once in every 100,000 reactors-years – corresponding to International Atomic Energy Agency safety guidelines … from
    so the safety goal of ‘less LLE than eating peanut butter’ appears to come from IAEA guidelines.

    That report is also of interest for “We must not entertain the illusion that we can get out of nuclear by relying on energy savings and renewables,” UFE [France] president Robert Durdilly was quoted as saying by Bloomberg [News].


  231. Its true there is no silver bullet, if for no other reason, the energy applications vary wildly.

    But dishing out general remarks such as that gets us nowhere. We need a plan that adds up. Some bullets are more useful than others. Others are marginal and not worth the bother. With nuclear power plants we can get a long way. Displace fossil fired electricity plants with nuclear plants, including peaker plants, and use the excess nighttime capacity to charge plugin hybrids. Also run efficient heat pumps off the nuclear electricity to tackle most low grade space heating and hot tapwater. Use higher temperature (such as acoustic) heat pumps for medium grade industrial heat supply. And use good insulation for all thermal apps. These four technologies, nuclear plants, plugin hybrids,heat pumps, and good insulation, get us a long way. We still have to figure something out for long distance transport, such as aircraft, ships and trucks. Some bigger ships can be nuclear. Aircraft are more difficult and will have to run on the last fossil fuel budget such as LNG and maybe even coal to liquids – we can probably afford some if we displace most car fossil fuel use, power plant fossil fuel use, and space and industrial heating fossil fuel use.

    If we go the above way we’ll have solved most of the problem. We’ll figure something out for the remaining, higher hanging fruit, later.


  232. Nukes are the silver bullets that ricochet into other enemies like oil. With enough baseload grunt for the grid at a cheap enough price, we can artificially make many other fuels and energy niches. It’s the sheer baseload GRUNT that we need, and nukes do that well. Everything else is secondary. (Especially as we start to build more Dense and Diverse soaring modern ecocities).


  233. Moderator

    I’m trying to say that despite CCS being discredited time and time again the coal industry keeps trotting it out as our salvation. I wonder if Big Coal regrets putting so much PR reliance on it because it has come back to haunt them. In my opinion the coal industry has nothing to worry about for another decade or two so they should forget CCS and show pictures of happy families.


  234. EDF fined EUR 1.5m for spying on Greenpeace

    Just to put the icing on the cake, the security firm hired to do the dirty work was run by ex French secret service types. Given the history of Rainbow Warrior, mindbogglingly stupid is the phrase that comes to mind.

    This would be bad enough if state agencies were do it, but to have the biggest nuclear power producer doing it is a PR disaster.

    Nuclear companies must restrict themselves to site security and leave everything else to state agencies. No exceptions.


  235. It would appear someone has figured out how to help the Chinese Nuclear Industry with training issues.Exelon is one of the largest civilian nuclear power plant operators in the US.
    BEIJING—Exelon Corp. will provide consulting and training services to an arm of state-owned China National Nuclear Corp., in a signal that China’s secretive state-owned nuclear companies are determined to learn Western safety practices and other expertise in the aftermath of Japan’s nuclear incident in March.


  236. There’s a section of the latest annual report from the German Council of Economic Experts that is very interesting – with a section challenging existing German policies, and particularly the feed-in tariffs.
    The council notes, in what could possibly please Peter Lang and international carbon tax proponents at the same time, ” as climate protection is a public good, the costs of its provision must be borne at the national level alone, whereas its benefits accrue to all nations. It follows that the European Union’s pioneering role in respect of climate protection can only represent a transient situation and should not be pursued further unless it is guaranteed that other major polluters will, in turn, launch comprehensive initiatives to cut emissions.”
    The Council continues to promote a single electricity price through the distinction between the “cost-efficient construction of electricity generation capacity and dedicated promotion of innovation.”
    I hope that means investing in studying innovative technologies that close the nuclear fuel cycle, and storage technologies, and hydrogen fuels, and other technologies seen as promising, instead of wasting the ability to do so through reckless spending on existing technologies that have failed to meaningfully contribute to the reduction of emissions – but I’d recommend those interested in the economics to read the link directly (energy specific comments start on page 13).

    Click to access chapter_one_2011.pdf


  237. @ EN

    I definitely do not think that acceptance of nuclear power as a necessary alternative to fossil fuels is a minority position among energy experts. There certainly doesn’t appear to be a consensus position among them though, as with climate science, but I think when you have the IEA projecting more fossil fuel use in a low nuclear energy future scenario, you’ve got a broad acceptance that nuclear power is necessary to ameliorate the effects of climate change.


  238. @Scott Luft

    The German paper is based on the “Excuse Trick Scheme” fallacy in their criticism of feed-in tariffs. They say that since carbon emissions are fixed anyway in the ETS, it doesn’t matter that feed-in tariffs reduce carbon emissions.

    That very same fallacy is used by the German government to deflect climate based criticism of switching of nuclear power. They say that carbon permits are fixed anyway, so it doesn’t matter that Germany will build new coal plants.

    The problem with that is that those levels of permits are obviously fixed to a certain level because that level is needed, and the next decisions on these levels will depend massively on how much is actually used. “Carbon emissions don’t matter” doesn’t make sense, even with ETS in place.

    They also overlook the fact that the German feed-in tariffs are the main reason for the cost reduction by about an order of magnitude for solar photovoltaic. It is not just the TWhs produced in Germany that matter. The fact that solar will be the cheapest form of generation in less than a decade will have massive effects world wide.


  239. Hi Tom,
    that’s good to know. What other benchmarks would indicate to you the status of the nuclear campaign? Nuclear certainly doesn’t seem to be on the agenda for Australian energy suppliers. Or have I missed some new groundswell?


  240. @Karl-Friedrich, the criticisms are based on economics.

    I really think Germany – and my province of Ontario – are missing the point entirely. Whatever Germany did, it didn’t stop coal being the big market share winner, globally, over the past decade.
    Nor are the rich nations the key drivers of growth in forecasts.

    You note what the price of solar will be in a decade. I’ve already noted in our exchanges (and you already knew) that at 8% of total annual generation solar produces more supply than the grid demands at times. If you are telling me that in a decade’s time solar will be cost competitive in meeting peak demand (which I believe will occur around 7pm on a cold winter’s night), I’m not 100% convinced.

    So again, while Peter Lang’s challenges deal with Australia, they aren’t Australian challenges – they are global challenges. The challenge is how to make non, or low, emissions energy cheap.
    The paper suggests this is done with proper market structure (I don’t know how anybody selected the ETS over a carbon tax), and, separately, research programs to develop low cost, low emitting, sources.
    Spending lots to accomplish little is pointless at best – and an advert for coal at worst.


  241. @Scott Luft

    Exactly because it is a global challenge, just looking at German solar generation figures misses one of the important points of the feed-in tariff legislation, as stated in its first Article. Getting prices down. The German feed-in tariff was the single most important reason that has happened at a massive scale.

    Getting prices down to the point where they can compete with coal will lead to more solar energy pushing coal out everywhere. Especially in China, where they have their own feed-in tariff and are just starting to build some capacity.


  242. @Karl-Friedrich Lenz, on 13 November 2011 at 10:38 PM said:

    Getting prices down to the point where they can compete with coal will lead to more solar energy pushing coal out everywhere. Especially in China, where they have their own feed-in tariff and are just starting to build some capacity.

    The 2011 LBNL China 2050 projections –

    Click to access 2050_Summary_Report_042811_FINAL.pdf

    In the ‘best case scenario’ in 2050 China ‘Renewable’s has 70 GW Solar, 500GW wind, 550 GW nuclear and 400GW of Hydro


  243. Karl, the feed in tariff hides the value of unreliable power that is not there 90%. PV in Germany can’t be turned on when the sun is out, which is 90% of the time on average.

    The feed in tariffs completely hide this. It just gives money to marginal energy. It doesn’t matter how cheap solar will be in Germany, if it is not there you’re stuck with generating fossil back up. Non-dispatchable energy sources that are not there 90% of the time will lock Germany into fossil fuels even if solar costs 1 cent per kWh.

    This is not a complicated thing to understand. It requires that you look at the numbers, at energy storage cost, at when PV energy is available, and at the German electricity demand pattern. We’ve done all these things on this website, why won’t you understand?


  244. To facilitate comparisons of generation technologies, I propose considering availability (A) as distinct from capacity factor (CF). The latter depends upon system operator choices while the former depends only upon the generation technology [and the ability to keep the equipment in operating condition].

    To illustrate, consider first the Areva/Mitshubishi Heavy Industries’ ATMEA1: the availability is advertised as up to A = 0.978 but CF can run as low as 30% if the operator so chooses. Both are physical limitations [and possibly that high an availability cannot be maintained for 60 years].

    Now consider wind farms in the Columbia Basin. The advartised availability of the wind is 30% but experience has demonstrated that wind farm operators cannot maintain more than A=0.26-. As wind is scheduled first under all but the rarest of circumstances, a 5–6 year average gives wind power a CF of 25+%.

    SOmehow these two figures, A and CF, should be used to determine a Quality of Generation (QoG) figure for the various generation sources. I am open to suggestions as to how to determine, quantitatively, QoG.


  245. The CEO of the world’s largest wind turbine manufacturer agrees that, without tax breaks, sales fall off a cliff (Wednesday 9 November 2011).

    See the foot of page 3 of:

    “Global wind turbine makers said this week they are already bracing for what could be a major dip in turbine demand if a key U.S. tax credit for wind development is left to expire at the end of 2012.

    Wind energy markets “tend to fall off a cliff” when such tax credits run out, Ditlev Engel, chief executive of Denmark’s Vestas Wind Systems, the world’s largest turbine manufacturer, told Bloomberg on Wednesday. At issue is a [USA] production tax credit that allows wind farm operators to shave 2.2 cents off of each kilowatt-hour of wind power their turbines generate.


  246. DBB an alternative approach is given in Chapter 2 of this report by the Royal Academy of Engineers in the UK

    Click to access Cost_of_Generating_Electricity.pdf

    If I understand it right the basic approach is
    x(LCOE intermittent source) + (1-x) (LCOE open cycle gas)
    where x is the average capacity factor. However if the intermittent has some firm capacity it assumes an equal amount of combined cycle gas in the standby fraction.

    Anyways it comes up with some plausible looking numbers and highlights the sensitivity of renewables to the gas price.


  247. @ John Newlands:
    “Chapter 2 of this [7 years old] report…”

    You use the expression
    x(LCOE intermittent) + (1-x)LCOE Open gas cycle).

    My reading differs.

    We are not discussing LEAST cost of energy, but the cost of energy, which is the terminology used by PB.

    The PB report limits (1-x) the OCGT support fraction to 35%, with a footnote on P15 stating that the Royal Academy of Engineering recommends a figure of 20 to 25%. I will use PB’s figure.

    Let us adopt the following variables:
    x: Average capacity factor of the wind source.
    (NB The study excludes other intermittents, so extend to PV, ST, etc at your own risk.)
    y: The level of support of wind using OCGT.
    z: 35%, The level of support via OCGT but with credit for the avoided CCGT. PB, in the report, cost this at 1 pence per kWh – essentially the additional fuel usage due to efficiency differences between OCGT and CCGT, with both running on natural gas.

    The following relationship can be derived, where the COE is expressed in pence per kWh and energy units are kWh:

    The average cost of production of additional energy to the full extent of the nameplate rating of additional wind plant is
    = av. cost of wind fraction plus av. cost of straight OCGT fraction plus av. cost of the fraction which is OCGT substituting for CCGT (1 pence/kWh)
    = (COE (W) * CF(W) + COE(OCGT)*0.35 +1*(1-CF(W)-0.35))/CF(W)
    =(COE(W)*CF(W) + COE(OCGT)*0.35 + 0.65 –CF(W))/CF(W), expressed in Pence per kWh as at 2004.
    Illustrating this with typical figures from elsewhere in this same report, we may have as inputs:
    COE(W) = 3.7 pence/kWh for onshore wind with CF 35%.
    COE(OCGT) = 6.2 pence/kWh (Page 8).
    The average cost of power production using onshore wind and including backup thus becomes
    = (3.7*0.35 + 6.2*0.35 + 0.65 – 0.35)/0.35
    = 10.757 pence per kWh.

    The difference between 3.7 p/kWh and 10.757 p/kWh is attributable to the need to provide and operate intermittently additional OCGT to part-support wind when not available and for substitution of OCGT for CCGT for the remainder of the support.

    N.B. In the above, the only assumptions apart from data and assumptions obtained from the PB report is that onshore wind operates at a CF of 35%.

    The hidden cost of new UK on-shore wind is thus close to double the calculated COE from the wind turbines alone. This cost is currently borne via market mechanisms by the energy retailer as part of the cost of gas-fired energy and is passed to retail customers as part of the standard tariffs applicable to non-renewable electricity.

    The above analysis could be extended to any generation mix for electricity. Any contemplated next generating unit (in this case, onshore wind) will require a mixture of additional balancing plant, transmission upgrades, storage, etc, each of which involves lifetime and operating costs. Each will have operating effects on existing plant, eg as above, periodically forcing CCGT out in favour of a percentage of both old and new OCGT.

    Note that LCOE figures are only applicable to proposed new plant. Existing plant have existing average COE’s which will typically be higher than the anticipated LCOE for new plant.

    The above analysis, by adopting a 1 pence per kWh differential (fuel only) price between existing CCGT and existing OCGT is an initial attempt to recognise the capital-independent nature of differential operating costs for existing plant, as against the need to include capital costs for new plant. It ignores other operational factors such as increases or decreases in labour and maintenance costs per kWh sent out.

    Differential operating costs are not allowed for by using standard LCOE calculations and must be determined on a case by case basis which recognises and allows for operational inefficiencies due to load-following Vs static loads, especially when baseload designed plant is involved.

    The average inclusive cost of onshore wind in the above scenario, at 10.757 pence/kWh, is thus still an underestimate of the real cost to the system, despite the LCOE for this new wind power being 3.7 pence/kWh.


  248. JB I need to puzzle over this with respect to dividing by c.f. and weights not summing to unity. We could just multiply onshore wind costs by 100/35 or nearly triple but I’m not sure what this would mean.

    However I think we can agree that enthusiasts for intermittents cannot get away with quoting very low LCOEs when they are useless without hydro, gas, draconian demand management or permanent smallness.


  249. @Cyril

    We are talking about storage elsewhere. I was making a point about the purpose of the feed-in tariff here.


    Predictions are a tricky business, especially if one is talking about the future. Let’s just agree that all things equal having solar photovoltaic beat coal prices will help deployment of solar.


  250. DBB and JN:
    Yep, I was wrong. Thanks for the time that you two have taken to work through my musings.

    For each new kW of power based on onshore wind, we thus provide 1kW (nameplate) of new wind and fluff that up using OCGT for the other 65%.

    The project becomes akin to a consortium of wind and OCGT gas, with some additional cost to existing plant as handles the increased intermittency.

    Wind fraction: Cost = CF*LCOE = 0.35*3.7 = 1.3p

    New OCGT (next 35%) = 0.35*6.2 = 2.2 p

    More OCGT, plus 1p penalty for cycling existing CCGT = 0.3*(6.2 +1) = 2.2 cents.

    Total = 5.57p/kWh.

    The final factor may be an overestimation, because as PB indicate, existing standby OCGT capacity will probably be available for the cost of fuel plus O&M, plus the penny for forcing CCGT off line.

    Not knowing the 2004 operating costs for existing UK OCGT’s, 5.7 cents per kWh is thus an upper bound for the true price of onshore wind.

    This tallies pretty closely with the 5.4 cents, from Fig 1.1.

    LCOE is appropriate only to new plant and that market costs (COE) for existing plant used for balancing new intermittent generators are relevant when evaluating their contributions.

    It is noteworthy that the direct costs of wind’s 35% of the additional power are only 1.2 pence in 5.7, ie 21% of the cost of the extra 1kW. Any analysis which does not include costs for flexibly supplying the remaining 65% of the new (nameplate) load and incur 79% of the costs is not credible.

    The PB study clearly demonstrates that wind is balanced not by CCGT or baseload generation, but by OCGT, which has a relatively higher carbon footprint than either CCGT with or without CCS.

    Having already got egg on my face once today through poor calculations I won’t dig out the info now, but the carbon budget is probably going backwards even faster than the dollar budget.


  251. PL:
    Agreed, up to a point. Your ref does not identify costs accruing to existing generation, such as the 1 penny per kWh for forced switch from existing CCGT to new OCGT and the limits at which this takes place.

    Now that my wooly thinking has been addressed, the used car salesperson’s cost for onshore wind (3.7 pence as at 2004) is seen to have an upper bound of 5.7 pence The paper’s authors suggest 5.4 pence, which indicates close agreement. It is nice to be able to derive this from a paper issued by such authoritative sources as PB and the Royal Academy of Engineering.

    If only the full economic models submitted to and/or used by AEMO were publicly available! They would disclose actual O&M&Fuel costs, finance costs and more. These types of costs for existing plant are well shielded corporate secrets.


  252. @ Eclipse Now, 13 November 2011 at 3:19 PM

    Sorry for the delayed response. What other benchmarks could indicate the status of the nuclear debate in Australia? I’d say properly done polls, such as the 2011 Lowy Institute Poll, probably give a fairly accurate summary of the current state of acceptance of nuclear, in Australia at least.

    The prognosis doesn’t look good, obviously. And obviously the barriers are socio-politcal, not technical – when I said “broad acceptance” above, I was referring to those who have some expertise in energy (e.g. utility operators, researchers, academics etc.), not the general public.


  253. Does money matter, or are renewables programs justified by a “just do it” approach?

    Example 1. Californian Consumer Advocate Division Decries Approval of “Overpriced” CSP Project.

    Strong words objecting to approval of two new renewables projects on the basis that they are too expensive and including an objection that Abengoa Solar subsidiary Mojave Solar LLC has gained approval for their project, although the transmission network upgrades necessary for the project to provide resource adequacy… would not be completed until several years after the project was scheduled to achieve commercial operation. Does California really have enough money not to worry about waste and impracticality in its energy programs?

    Example 2.
    Relatively new German taxes levied on nuclear fuels and amounting to many hundreds of millions of dollars annually have been challenged on several grounds. The legal fight goes on, but this round has been decided in favour of the nuclear power industry. Apparently the tax was levied against nuclear fuels in order to provide capital for uneconomic green projects which are also supported through feed-in tariffs and market precedence on the basis of “must take” entry. I hope that the nuclear generators win, first in the courts and then in the arena of public opinion by drawing attention to the waste of public money in a time of fiscal stress… the EU does have monetary problems, does it not?


  254. Tom Keen,

    I’d say properly done polls….summary of the current state of acceptance of nuclear…prognosis doesn’t look good

    As this is an open thread I will yield an opinion.

    In my own State of Washington in the US if a statewide poll were taken today about the future of nuclear the ‘prognosis’ would not look good.

    A) We are not currently planning a nuclear plant
    B) The challenges of wind turbines are just beginning to appear.
    C) If another nuclear plant were to be built it would most likely not be near an urban population.The positive economic impacts of a nuclear plant to a rural community are enormous. Funding a rural school, police department, hospital etc out of the budget for a 1,000 MW nuclear power plant is only a ‘minor expense’.

    So I would postulate that if the challenges related to wind intermittancy can not be worked out in an economic manner and a rural community were found to be in favor of hosting a nuclear power plant were found the prognosis would be different.

    The fact that the Chinese have recently contracted with Exelon to help set up a training program for nuclear power plant operators would seem to indicate the answer to the question is ‘no that long’.


  255. John Newlands, AECL doesn’t actually exist anymore – which is precisely why there could be multiple vendors.
    It was purchased by SNC Lavalin earlier this year (one of the larger engineering firms in the World)- for next to nothing – but the Canadian government reportedly did retain intellectual rights and a commitment remained to complete planning on an Enhanced CANDU 6 (EC6).

    SNC Lavalin is pursuing the bid in Jordan, and signed a refurbishment agreement of an existing reactor in Argentina. That contact seems to be more managerial and licensing, leaving the bulk of the refurbishment employment (and expenses) in Argentina. SNC Lavalin would likely be happy to collect engineering and project management fees, and be less interested in maintaining intellectual property costs:


  256. John Newlands, I don’t want to dwell on a Wiki, but … most of the endnoter references are to the Ontario Clean Air Alliance, which is primarily a lobby group for the natural gas industry. Some valid points- Pickering is not the cream of the crop, Point Lepreau was bungled in the first attempt at retubing, and Bruce … well, I think the Bruce situation is greatly exaggerated, as that private operator receives less for their output than end consumers pay for it, with much of the difference going to private operators of natural gas plants (the OCAA have been very effective lobbyists!).
    Hydro-Quebec just released a forecast containing 20TWh of surplus generation capacity a year by 2020 – so the Gentilly II decision is not as straightforward as it is being presented either.
    The history of Canada’s CANDU’s contain elements of truth, but, for instance, Korea refurbished the Wolsong 1 CANDU reactor in 839 days –
    Wolsong 2, 3, and 4 were constructed on time and on budget. Investigating a CANDU option would involve SNC Lavalin’s international group, and likely contractors from Korea. Canada’s experience wouldn’t be the precedent to attempt to follow.
    Korea decided to follow a different technology, so studying that choice may lead you away from CANDU’s.


  257. A question for climate experts.

    What is the significance of rising atmospheric methane levels apparently following a protracted period of stasis?
    A friend of mine has translated it as a signal that a tipping point has already been reached and that we have have now passed the time when solutions can do any good. He considers the tundra to be emitting its methane in excessive amounts. Fugitive emissions from the gas industry could also be involved, but concentations are higher over the Arctic than over Hawaii.
    Can anyone provide solace or should we head for the hills?


  258. Seems that rather well known anti-nuclear campaigner Dr Chris Busby has finally shot himself in the foot, though perhaps not in the wallet

    Dr Christopher Busby, a visiting professor at the University of Ulster, is championing a series of expensive products and services which, he claims, will protect people in Japan from the effects of radiation. Among them are mineral supplements on sale for ¥5,800 (£48) a bottle, urine tests for radioactive contaminants for ¥98,000 (£808) and food tests for ¥108,000 (£891).

    The tests are provided by Busby Laboratories and promoted through a body called the Christopher Busby Foundation for the Children of Fukushima (CBFCF). Both the pills and the tests are sold through a website in California called, run by a man called James Ryan.

    …the prices being charged by are far greater than those of other mineral supplements on sale in Japan. Chemists in Tokyo sell bottles of 200 pills containing similar combinations of ingredients for ¥1,029 (£8.49). James Ryan’s website also charges a minimum shipping cost of ¥2,300 (£19).

    It looks like the UK Green Party is (quite rightly) dissociating itself from him. This surely must be the end of Busby as a credible “authority”.


  259. Much publicity in the world press has been given to Italian researcher Andrea Rossi’s ‘cold fusion’ technology, reportedly now tested and affirmed as viable and due to go into commercial production in the next two years. 8 units of energy out from 1 unit of energy in.

    I know there have been many hoaxes in the energy field, but searches on this one seems to come up mainly with commentary that Mr Rossi has stumbled upon an unexpected and verifiable energy technology that has the science community scratching their heads, albeit not discounting it.

    I would not normally give these things a second thought except that normally level headed colleagues of mine are giving the technology credibility.

    Though ‘cold fusion’ may not be an apt title, I’m wondering if any BNC readers have better information. A search of this site doesn’t seem to come up with any reference.

    Here is one reference – from the Journal of Nuclear Physics:


  260. Apologies for being off-topic comments in other thread. I’ll repost the first one here. The follow up, sent prior to moderation is lost unless copy was kept at BNC.

    Barry, I think the focus of this site needs to return to fighting climate science denial instead of endlessly arguing the relative advantages and disadvantages of renewables vs nuclear. After years of it, climate science denial, endorsed and promoted by mainstream Australian political parties continues unabated, the climate problem remains unaddressed and nuclear power is in a deep hole that no amount of logic and evidence can dig it out of.

    The discussion, sorry, needs to delve into the murkier realms of politics and motivations to know how and why nuclear is where it is and why, faced with the great challenge that looks made for nuclear, it’s struggling to even get the minimum traction to get it onto the table as an option. Out of that a real route to action on emissions might emerge. It sure isn’t from the current debate.

    I want to suggest to readers here that focus on the anti-nuclear green-left as the cause of nuclear’s woes is misplaced; yes they are the unreasoning and implacable enemies of nuclear they claim to be but it’s the Right’s decision to back fossil fuels all the way that has put nuclear where it is. The Right chose to deny science based reality for fossil fuels! In the process they betrayed nuclear. Even the truth about climate wasn’t and isn’t enough to get them to give up on fossil fuels and look to nuclear. The fossil fuel guys pointed and called out ‘Look out! Over there! Irrational and dangerous greenies!’ – as they stabbed nuclear in the back! It seem like most proponents of nuclear are still looking over there and still think that was who was responsible for the permanent injuries resulting.

    So if the Right doesn’t care about ‘facts’ and ‘logic’ and ‘reason’ when it comes to defending fossil fuels and insulating them from carbon pricing or other regulation, why would pro-nukers imagine the green-left can be moved that way? Or imagine that if anti-nukers would just shut up and go away, opposition to nuclear would inevitably dissipate? Past time you work out who your true enemy is. If renewables and nuclear share one thing, it’s a well resourced, well connected, well organised and implacable enemy in fossil fuels.

    Without the collapse of support for climate science denial the problem will remain stalled. It’s very irrationality makes it the weak point of the Right’s strategy to save fossil fuels – yet the Right, if it can be persuaded to abandon denying reality as a strategy, will turn to nuclear as if there was never a bad moment between them and be insisting that if they’d only known that the climate problem was real they’d have gone to nuclear first!

    The choice of the Right, to back fossil fuels over nuclear or anything else, have stolen 2 decades – so far – of effective action on climate from the world and gutted nuclear at the very moment pro-nukers must see as nuclear’s golden opportunity.

    There will be no nuclear in Australia as long as centre politics enables and gives fuel to climate science denial. ie the Right.

    Without climate as motivation, Australia will not adopt nuclear.

    The moment the Right drops it’s phony denial campaign nuclear will get itself onto the table – at a time when all the public support favours renewables. Renewables will have to get their day in the sun, so to speak, supported and subsidised, to prove they can deliver. Or not. ( added later – I think they’ll do a lot better than people here believe but I am not interested in debating the technical pros and cons of that here. Complete waste of everyone’s time. But I am interested in how the end of climate denial impacts perceptions about what’s good enough, what’s essential and how much sacrifice people may feel appropriate in preventing extreme climate change.)

    I’ve suggested here before that the only route that can realistically lead to take up of nuclear is a bipartisan appreciation of the seriousness and urgency of the climate problem and steep carbon pricing. For pro-nukers to oppose such policies until everyone just comes to their senses and agrees with them is giving aid and comfort to fossil fuels. The fossil fuel interests need to know the game is up, firmly and emphatically – and soon. Whether nuclear is ready or not. Whether the lion’s share of carbon tax money goes to renewables or not.
    Most Australians have worked harder and contributed more than I ever have and they deserve respect. Those who intend to vote against carbon pricing are not stupid but they have been systematically lied to about climate by mainstream political leaders and organisations they trusted. And that they should be able to trust.

    For those politicians of the Right that just went along with it, they’ve proved themselves gullible and driven by group-think and those are unforgivable in a member of parliament. But those who knew, and still know perfectly well that the climate problem is almost certainly real but who support and encourage climate science denial anyway… maybe that should wait until after the post mortem of the biggest and most irresponsible hoax that could be perpetrated in the face of a world changing global catastrophe.

    Without the collapse of support from the Right for the phony doubt, delay, deny campaign the climate problem will not be effectively addressed.

    Without climate as motivation nuclear will never be built in Australia.

    Nuclear is the backup energy plan and will not step straight from the pit it’s in straight into the drivers seat.
    Thank you for the re-post. While the OT may be used to express personal opinions and is more relaxed in commenting policy, BNC still prefers that commenters, from either side of politics, avoid long political discourses. History has shown that these types of discussions quickly deteriorate into acrimonious tit for tat.


  261. Dear Moderator, Overlong, granted. And thank you for allowing it. I admit I did intend to be a cat amongst the hawks but I do want to try and make people think and, maybe, (who knows – it is possible) to change some minds.


  262. Amazing how this long ideological rant from the Left is allowed on BNC, even encouraged, but attempts to balance these types of idelogical rants and tirades and dog whistles are deleted.

    If the left are looking for reasons why their Left ideology (including CAGW) has lost credibility they need to look no further than their attempts to censor all opposition.
    Peter – your reply was deleted because the comment to which you referred had also been deleted as it was on the wrong thread and a re-post was asked for on the Open Thread. The commenter complied so you may now reply to the comment on this Open Thread. Please read my remarks to KF, under his post, which explains that it is BNC’s policy to curtail political rants from both sides and not to “censor all opposition”.


  263. Also Peter, if your comments were phrased more cordially, they might have a better chance of surviving moderation. The one I deleted on the CEDA thread was an out-and-out whinge and yet another attack on climate scientists, and I won’t put up with that, as I’ve said before. As I also said, take a bit more care, or I’ll be forced to put you on permanent moderation.


  264. Ken Fabos,

    I admit I did intend to be a cat amongst the hawks but I do want to try and make people think and, maybe, (who knows – it is possible) to change some minds.

    I would also like to change minds. I would like to get the Left to open their minds and recognise what is causing the block

    You are not being a cat among hawks preaching Left ideology on BNC. Nearly everyone who blogs on BNC shares your ideology.

    So, please humour me for a minute, while I provide an alternative view to yours. I urge the Left to drop their demands that they prescribe the solutions for cutting GHG and allow the Right to propose and implement the solutions.

    First step is to understand why you are getting such strong resistance and push-back. I’ll post below a comment I posted in reply to John Bennetts’ comment on the CEDA thread (but it was deleted).


  265. @Ken Fabos,

    There is a very complex interaction between the politics of climate change and the political economy of energy and it happens on a global stage. It’s far too simplistic to assume that “if only” more people could be convinced on the urgent seriousness of AGW, all would be well. It hasn’t happened yet and there is no real indication of when it might happen. Taking this further and assuming some progression from this hoped for awakening and support for renewables to ultimately a preparedness to accept nuclear if renewables prove insufficient is a very dangerous path to tread.

    If the anti-nukes had their way, they would shut down nuclear power globally. There would be no Plan B, no R&D, no nuclear industry, no supply chain, no trained engineers and scientists – and nowhere to go. Quite likely a blunder of truly historic dimensions.

    Issues of energy deserve the same attention to critical thinking in public discourse as issues of climate science and if this treads on the toes of some anti-nukes, well that’s tough luck.

    PS I consider myself to be on the left and there is nothing I would like more than to see the Murdoch press simply vanish.


  266. This is become a terribly boring rehash of what various contributors have said (repeatedly) before.

    For quashing the ‘denialists’ there are many other sites available with possibly Skeptical Science being foremost.

    For ‘what to do about it’ there are many prespectives on a vaarieity of sites. Brave New Climate does well (with substantial visitors) by concentrating on electricity.
    Agreed – see my comment below.


  267. regulatory risk — a risk to which private companies are subject, arising from the possibility of legislation or regulations that will affect business being adopted by a government. from
    which is the most authoritative source I can readily find. Someone might care to attempt OED.

    So what is (mistakenly) called soveriegnty risk (which my search engine changes to soveriegn risk as used here is in fact regulatory risk [that the rules regulating an industry] may change.


  268. DBB: agreed.

    Peter is not alone in his misunderstanding.

    Precision in english language usage has its place.

    Lots of people don’t know what sovereign risk really means, especially mining types and journalists who want to use high-sounding words and phrases.

    Without clarity, how can the differences between sovereign risks be discussed in the context of the full range of commercial risks, especially when there are perfectly good, accurate terms to describe the anxt which foreign miners feel from time to time when they aren’t happy with individual governments? Australia, by any international assessment, presents effectively zero sovereign risk, despite pundit’s comments to the contrary.

    See, for example,, for Country Risk and its subset, Sovereign Risk.

    And, for several perspectives:

    Colonial First State’s Global Asset Management Team is quite specific about this:

    “There is a distinction between regulatory risk and credit risk. The term ‘sovereign risk’ has recently appeared in the media not only in relation to the issues with Greece and other European peripheries, but also in discussing Australia. For the former, it’s a default probability related issue; for the latter, it’s a matter of perception about how certain are the ‘rules of the game’ for doing business in Australia. The Resource Super Profits Tax has been represented by some commentators as an example of heightened sovereign risk in Australia. We believe this is a misuse of the term, but in any case it needs to be clearly distinguished from the more common use of the expression as they are very different concepts. For assessment of the Oz sovereign risk… [etc]“ (Bolding added.)


  269. @ harrywr2, on 20 November 2011 at 3:56 AM

    Just saw your comment. Thanks for some food for thought.

    I think the main difference between here in Australia and your state of Washington is that we’re not fighting for the approval to construct a plant here – we’re fighting for nuclear just to be allowed. Legislation needs to be changed (from memory, 2 or 3 pieces), and it’s a political minefield.

    I think in Australia we need at least a majority (i.e. > 50 %) of the total population not to oppose moves to repeal current legislation on the matter. Then we can talk about which communities would accept them. You certainly raise a valid point about the potential benefits to any community which accepts them.


  270. Barry, if you ask I will stop it here and take it elsewhere. I know my long rant might seem brutally provocative but that was the toned down version.

    It scares me to think that I actually could be right about the Right. I’d like to hear your reasons why if you think I am not.


  271. Tom Keen, on 22 November 2011 at 6:34 PM said:

    I think the main difference between here in Australia and your state of Washington is that we’re not fighting for the approval to construct a plant here – we’re fighting for nuclear just to be allowed

    A significant number of the states in the US have laws on the books excluding new nuclear from consideration until a ‘permanent waste repository’ is running. A number of them have repealed those laws at the request of a potential ‘host community’. Without a willing host community a lot of NIMBY laws stay.


  272. The latest Quarterly Essay 44 makes interesting reading and provides explosive commentary for a traditionally left-leaning publication.

    Andrew Charlton, Man-Made World: Choosing between progress and planet

    Andrew was senior economic advisor to the prime minister from 2008 to 2010. He provides an informative insider’s account of Copenhagen. He is quite blunt in stating that the Kyoto-style targets and time-tables approach has failed and should be buried, and that we need cheaper clean energy, not more expensive fossil-fuel based energy. There is little in his energy analysis that is new for regular BNC’s but Andrew’s courage in spelling it out for the masses deserves recognition.

    But these climate campaigns miss the most fundamental element of the equation: the world need more energy, not less. (pg 34)

    trying to roll out large scale renewable energy with current technology would be a terrible waste of money.(pg 33)

    Nuclear is cheaper and more reliable than renewable energy.(pg 39)

    For over forty years, some green activists have unwittingly made the climate problem worse through their opposition to hydro and nuclear. The consequence .. was that coal fired plants were built instead. (pg 41)

    Green groups .. say.. “green growth” will create “green jobs”..(but) delivering the mail eight times a day would mean numerous jobs but these are not good policy areas. (pg 41,42)

    In Australia, the objective of transferring to 100 per cent renewable energy in the near future is a pipe dream. (pg 47)

    A carbon price will help us reach the “low hanging fruit” .. but we will make more progess on climate change with policies that make clean energy cheaper than with policies that make fossil fuels expensive. (pg 53)


  273. Barry, my intent, combatative as I may seem, is genuine and not malicious. I meant to get your attention and rattle a few assumptions. I do urge you to look past the tone to the content of my rant.

    If you don’t want this debate at BNC, that’s your call but if you have anything you want to say but not here you should have my email address. I do have more to say about this and I’m not sure I can be sufficiently concise without loss of important content, but I will try my best if you will allow this discussion.


  274. I second Graham Palmer’s comments re Andrew Charlton’s Quarterly Essay. Extensive free views of it can also be gained via Google Books, but I’ve seen enough there (including many more choice quotes along the lines Graham has reproduced) to convince me to spend the $10 for an e-book version.


  275. Ken Fabos, I don’t find your suggestions confronting, I find them rather banal. I’ve been over this many times on BNC, and John Bennetts and David Benson explained my position well. If you are looking for toe-to-toe combat with climate sceptics, go elsewhere — there are plenty of boxing rings where it gets nice and bloody. As to sceptics and deniers (many apparently like to be called this), I consider these people to range from the misguided, to the ideologically blinded, to the uneducated and ill-informed (and everything in between — they’re all, in their way, unique), but all in all, they are not really the problem. The problem is the psyche of the human species (explained in my recent paper), and we’re not going to win a fight with ourselves. The fight to win is to get the right technologies in place, in time, so that the “T” part of the IPAT equation is given the latitude to fix the “P” and “A” components. Hence the focus of this blog, which is not about to change.


  276. Barry, I think any assurances from the Right about supporting nuclear are as hollow now as they were after the IPCC’s first report came out, when they didn’t decide to turn to nuclear. Until the Right gives up climate change denial/doubt/underestimation it’s hot air. Trusting the judgement of anyone in politics who goes along with it has to be a poor choice, even if in other areas they appear rational. A higher standard has to apply; they have the resources for expert advice, ought to have the good judgement to know when to use it and how to discriminate between a commercial assessment and answer to whether climate change is real and disruptive change is worth the effort, and a scientific one. And to at least know which one will most accurately describe reality. I urge you not to trust any politician who can’t do that even if are genuine enthusiast for nuclear power.

    I think the everyday climate change denier is all those things you say and banal besides but I do believe the full depths of the phenomena haven’t been revealed yet. Your reluctance to peel away it’s protections of free speech and democracy to get a real look at the uglier side one of the agents of your woes is something I find puzzling. It’s time people did go back there because I believe the 3 d’s(doubt, deny, delay) are a far more potent tool to protect the fossil fuel status quo than you credit it with. And it’s very irrationality makes it a weakness.


  277. There is an excellent article in The Guardian by George Monbiot, featuring more unmasking of the shyster Busby: “Christopher Busby’s wild claims hurt green movement and Green party
    The Green party adviser’s theories on the Fukushima nuclear disaster and a ‘leukaemia cluster’ in north Wales are baseless scaremongering – even the anti-nuclear lobby must oppose him”. There is also this highly relevant plea (near the end), with an important maxim bolded by me.

    Those who oppose nuclear power often maintain that they have a moral duty to do so. But it seems to me that moral duties cut both ways.

    We have a moral duty not to spread unnecessary and unfounded fears. If we persuade people that they or their children are likely to suffer from horrible and dangerous health problems, and if these fears are baseless, we cause great distress and anxiety, needlessly damaging the quality of people’s lives.

    We have a moral duty not to use these unfounded fears as a means of extracting money from frightened and vulnerable people, whatever that money might be used for.

    We have a moral duty not to divert good, determined campaigners away from fighting real threats, and into campaigns against imaginary threats. Dedicated and effective activists are a scarce resource. Wasting their lives by encouraging them to chase unicorns is a disservice to them and a disservice to everyone else.

    We have a moral duty to assess threats as clearly and rationally as we can, so that we do not lobby to replace a lesser threat with a greater one. If, as is already happening in Germany, shutting down nuclear power results in an increase in the burning of fossil fuels, especially coal, far more people will suffer and die as a result of both climate change and local pollution. If, as now seems likely, we wildly miss our carbon targets and commit the world to runaway warming, partly as a result of the nuclear shutdown, history will judge the people who demanded it harshly.

    So this article is a plea for people to try to step back from their entrenched positions and see the bigger picture. It asks you to be as sceptical about the claims you like as you are about the claims you dislike. It asks you to subject everyone who makes claims about important and contentious subjects to the same standards of enquiry and proof.

    I know that’s a tough call, but it is not as tough as wasting our lives inadvertently campaigning, on the basis of misinformation, to make the world a worse place.


  278. Graham Palmer and Quadrant.

    My son gives me a gift subscription to Quadrant each Christmas. It can at times be a challenging read so I put each one aside for long, quiet evening.

    I recommend both the magazine and the gift.


  279. @ Ken Fabos

    Your political musings are utterly pointless and unhelpful. You could equally say that any assurances from the [insert one false dichotomy political group here] of being legitimate about addressing climate change are hollow because they oppose viable solutions such as nuclear.

    James Hansen recently made it quite clear that he thinks by far the greater barrier to addressing the climate crisis is not climate sceptics, but a lack of support for plans that add up from those who accept the reality of climate change. See:

    To use an analogy: the Catholic Church accepts that AIDS exists and that it is a problem. Their solution? Abstinence! It doesn’t add up, but they promote it anyway. This has contributed significantly to pandemics in several parts of the world.

    How is this relevant? It is the lack of promoting viable solutions that is the main obstacle to addressing the problem, and ideology plays a huge part in it. And this is exactly the same with addressing climate change.


  280. Somebody must have had a memory lapse on the way home from the climate conference. Australia is making just about the biggest possible effort to turn underground carbon into atmospheric CO2. New mines, railways and coal loading ports are being constructed with the help of the State and Federal governments, the latest being Queensland’s Galilee Basin

    So what is the point of the domestic carbon tax? Australia’s 300 Mt coal exports create X 2.4 or at least 720 Mt of CO2. That is steadily increasing with government blessing. Yet we are supposed to bust our nuts getting domestic net CO2 from all sources down to 480 from 580 Mt. Hypocrisy is hardly the word for it, it’s more like criminally insane.

    See also the article on China, Coal and CO2 linked in the sidebar.


  281. JN and Harry, Vaclav Smil has a good take on metallurgical coal.

    The Iron Age & Coal-based Coke: A Neglected Case of Fossil-fuel Dependence

    Here is another challenge for the energy transformationists: steel’s fundamental dependence on coal-derived coke with no practical substitutes on any rational technical horizon.

    Arrival of the non-fossil world has a great appeal for green energy enthusiasts: they see the transition as highly desirable because of its environmental impacts, they are convinced it will give us sustainable energy supply, they claim that it will pay for itself, and all agree that it will leave us all better off.

    But ask where the steel for all those turbine and transmission towers,
    … all those biofueled vehicles, all those solar-heated buildings, all those rails and carriages for rapid trains running on wind and solar electricity …

    No amount of renewable electricity and no amount of bioethanol can smelt a billion tonnes of iron –- and all the charcoal that could be produced in a responsible and truly sustainable manner could be used to reduce only a small fraction of today’s iron needs, and even a smaller one of the future demand. There can be no doubt: coal-derived coke will be with us for generations to come.


  282. No viable replacement for coal-derived coke. No viable replacement for jetliner kerosene. No viable replacement for fossil fuel based fertilizers.

    Aluminium smelting is another interesting category. Even more important than steel owing to its importance in the manufacturing of light weight vehicles, wind turbines and solar panel frames. There’s no way to smelt aluminium except by using up stupendously large quantities of electricity. It’s an industry that’s been environmentally on the nose for decades owing to its consumption of power, yet it is this very same industry that will be very much in need in an energy transformed world.

    There’s no easy fix.


  283. BTW the CO2 mass multiplier is 2.71 for coking coal and 2.39 for thermal black coal according to BHP documents, 2.8 for natural gas according to Engineering Toolbox. If steel smelting and future jet fuel are the unavoidable uses for coal then we should keep coal use to that alone and not use it in the production of electricity or cement. However increased scrap steel recycling is an alternative to primary steel production and fast rail is an alternative to flying.

    Increasing carbon penalties (absent loopholes) should shrink coal use down to the indispensable applications. I helped deliver a load of scrap iron to a recycling centre the price at the time being a respectable $305 per tonne. Business was brisk to say the least. With aluminium at 15 Mwh electrical input per tonne I think we should pay more, such as 20c deposits on soft drink cans. I think the Australian government has erred by giving aluminium smelters a partial carbon tax exemption on the grounds of being ‘trade exposed’. A better approach is to assume other countries generate 15t CO2 per t Al then impose a carbon tariff of 15 X $23 = $345. That will help the industry afford nuclear electricity as in Russia.


  284. (Comment deleted)

    As per BNC comments policy, the blog is not to be used for posting denialism of the scientific consensus of AGW/CC including quoting fulminations from known denialist individuals and organisations. I remind you of Barry’s comment to you:

    The comment I deleted on the CEDA thread was an out-and-out whinge and yet another attack on climate scientists, and I won’t put up with that, as I’ve said before. As I also said, take a bit more care, or I’ll be forced to put you on permanent moderation


  285. JN,

    However increased scrap steel recycling is an alternative to primary steel production

    The recycling statistics for steel appear to be 83%.

    Page 23 – Aluminum Can Recycling Rates

    Click to access fl0000181.pdf

    Interestingly, the recycling rates don’t appear to be necessarily tied to a ‘can deposit’. I know where I live we don’t have ‘can deposits’. However ‘garbage/trash pickup’ is quite expensive and the city provides recycling pickup which is free. The motivation being to dump as much as possible into the recycling bin.


  286. @ chrisharries:

    All the examples you brought up of supposedly irreplaceable resources have acceptable substitutes as long as we have access to plentiful nuclear power. Your attempt to lump aluminium production in there is particularly puzzling. Surely if there is one metallurgical extraction industry amenable to nuclear power, it’s aluminium production, given its high reliance on copious electricity. Likewise with fertiliser production. Prior to WWII, nitrate production involved hydrogen electrolysed from water using cheap hydroelectric power. This is an industrial process made to order for nuclear power, once the natural gas (the current source of cheap hydrogen) runs out.


  287. chrisharries, John Newlands etc.

    Could biofuels be used for air transport? The idea of using biofuels for land-based transport definitely doesn’t add up, but for air travel it appears that it really is either fossil fuels or biofuels. So perhaps there may be a niche use for biofuels here? It may come down to which of the two options is the lesser evil.

    I agree with chrissharries that there is no easy fix. But there is a difference between not easy and practically impossible (e.g. “100 % renewable” economies).


  288. Thanks Tom,

    Agreed. Low cost aviation kerosene comes from light sweet crude and that’s the oil that’s vanishing most quickly, Libyan oil being the world’s highest quality in that regard. Converting planes to run on bio-fuels will mean significantly greater cost and I would suggest marine algae may be the only viable source for the quantities that would be required.

    I absolutely agree that it is impossible for renewables to fuel a highly advanced technological society, especially one that is on an exponential growth path. Several thousands of posts on this website have made that point. But I also disagree with those who seem to flippantly believe that if we go nuclear all problems will just disappear.

    There is a palpable angry frustration expressed by many who interact with this site because old nuclear is stuck in the public imagination. The day that a new generation, ‘safer’ nuclear technology becomes not only a possibility but a proven commercial success will be the day that much of that problem, I believe, will dissipate. I think it will always be very hard to win many people over to traditional nuclear power technology – there’s too much locked-in history behind it.


  289. @Tom Keen I doubt there will ever be enough biofuel of the current types to maintain cheap aviation. It’s unlikely biodiesel could replace otherwise similar kerosene as it has viscosity like water at 20C and honey at -5C, no good for freezing conditions. World aviation must shrink to due to fuel costs.

    @finrod I understand aluminium smelters are paying 3-4c per kwhe which can’t continue as electricity contracts expire. It would be perverse if any of our six smelters moved to China using Australian alumina (=purified bauxite) and Australian coal simply because of lower wages and carbon penalties.

    @harrywr2 I use the mass multiplier for tonnes as it fits the export data. The three main fossil fuels from memory are coking coal ~ 160 Mtpa, thermal coal ~150 Mt and LNG ~20 Mt, each set to massively increase due to Asian demand. There was talk of brown coal (lignite) pellets going to Vietnam. CO2 from exported fuel is at least 25% higher than domestic emissions.


  290. @John Newlands,
    It would be perverse if any of our six smelters moved to China using Australian alumina (=purified bauxite) and Australian coal simply because of lower wages and carbon penalties.
    Coal with an energy value of 5,500 kilocalories per kilogram at Qinhuangdao port slid 0.6 percent to a range of 845 yuan ($133) to 855 yuan a metric ton yesterday from a week earlier

    My math works out that Australian thermal coal exported to China ends up costing $6/MMBtu. If I put 1 MMBtu is a 35% efficient coal plant(1,000,000/3412 * 35% efficiency) I end up with 102 KWh for a fuel cost of 6 cents/KWh.

    My best ‘guess’ as to where the Australian Aluminum industry will run away to is Canada –
    An October 31st 2011 press release
    The Alouette aluminum joint venture is investing more than $2 billion over 15 years to expand the Quebec smelter following the allocation of 500 megawatts of cheap electricity by Hydro-Quebec…..The third phase of the Alouette expansion will increase the production capacity by more than 60 per cent to 930,000 tons of aluminum per year from 575,000 tons.
    Another company located in Canada in May 2001
    Novelis said it will build a new plant in North America to increase total North American aluminum capacity by 20 percent, and is expanding its plant in Brazil to increase aluminum production for cans.
    Another company in Canada
    Alcoa Inc. announced Monday that it would forge ahead with the second phase of a $2.1 billion investment in new smelters in Quebec, Canada

    Then this news from China –
    Smelters in China reduced output last month to the lowest level since February because of power costs and low prices, a National Bureau of Statistics report today showed.


  291. Aluminium smelting shows what is good for local jobs may not be best for the world as a whole. The signs point to China no longer becoming the cheap energy country. Some think China is peaking in coal now hence the global push for coal imports including from the US. Others say Mongolian coal will defer China’s coal supply peak til nearer 2030.

    Cheap electricity prices to aluminium smelters are regarded as a virtual subsidy. For example Tasmania’s Bell Bay plant is said to be ‘subsidised’ each year $133,000 per employee. I think it gets back to rivalry between States to attract heavy industry. There’s also the strategic argument that a country should have a home grown steel and aluminium industry in case of international turmoil.

    All this is not an academic exercise. Energy prices to the metals industries reflect what is happening right now in Federal politics, this issue being one of the triggers


  292. “No viable replacement for coal-derived coke. No viable replacement for jetliner kerosene. No viable replacement for fossil fuel based fertilizers.”

    There is a not-uncommon misconception that fertilizers are based on fossil fuels, or are somehow derived from fossil fuels and that they require an ongoing supply of fossil fuels for their production.

    That’s not really true.

    Most of all the fertilizer in the world is comprised of ammonia from the Haber process, nitrates derived from ammonia and oxygen, and a bit of phosphorus and potassium etc. that are mined minerals.

    Ammonia synthesis requires nitrogen, which is basically just air, and hydrogen. At the present time, the most popular (read: cheapest) source of hydrogen is the hydrogen which is a byproduct of the processing of natural gas and oil in the process of making other petroleum-based organic chemicals.

    But that’s absolutely not the only source of hydrogen, it’s well known that hydrogen can be obtained from water via electrolysis and/or thermochemical cracking.

    With thermal energy supplied from clean energy sources such as nuclear fission, it is perfectly possible to make ammonia, and nitric acid and ammonium nitrate etc, with only air and water and process heat.


  293. @ Luke Weston,

    Isn’t the problem with electrolysis that it’s currently much more expensive than hydrogen production from methane? Wikipedia says that electrolysis is currently responsible for only about 4 % of global hydrogen production, though doesn’t state a source, and I can’t find any figures on this.

    It’s a big problem seeing as we’re going to need to produce a hell of a lot more of it for a world population of 9 billion +. Though we’re going to have to become much more efficient in using industrial fertilisers, as there’s already far too much reactive nitrogen in the environment, which is wreaking havoc on marine ecosystems (to put it lightly). Better management practices and GM should help here, but I suspect fertiliser production is still going to have to greatly increase to feed everyone.


  294. I’ve just returned from the Thorium Symposium held at Parliament House yesterday and today. There was a lot of material covered, and i’ll get to work soon writing up an article putting my perspective on the event. For now, a few points which may be of interest to people here:

    When Martin Ferguson introduced the symposium, a couple of things he said stuck in my mind. First, there was a strong indication that Labor’s anti-nuclear stance was not exactly etched in stone, but he made a firm statement that nuclear power is not competitive with La Trobe coal. I suspect there could be more than one opinion on this, but he certainly presented that view as being solidly held.

    Martin Hoffman (Deputy Secretary at the Dept. of Resources, energy and Tourism, Martin Ferguson’s dept.) affirmed the government line, but gave plenty of hints that trhere were some inconsistencies here and there. He also was quite careful to point out that residential electricity consumption only accounted for 7% of energy consumed in Australia not long before explaining some things about residential demand management and the potential of smart grids. His talk was quite wide ranging and deserving of close attention.

    Dr. Adrian (Adi) Patterson, CEO of ANSTO, offered a great and insightful summary of the current state of play of thorium, MSRs, various other nuclear technologies, and ANSTO’s involvement with them. I had the opportunity to ask him if consideration had been given to the application of synrock technology to the storage of the high-level fission products produced by thorium breeder MSRs. I’m pleased to report that some consideration has been given to this issue by ANSTO, and there do not appear to be any obvious show stoppers.

    For some reason, many attendees are enamoured of the potential of subcritical ADS systems.

    There was much more, of course. I shall look at my notes over the weekend. We are also told that the presentations will be made available on their website in about a week.


  295. Some commenters on TOD are sticking with circa 2040 for world Peak Gas despite the wonders of fracking. Note the complete absence of fracking prospects in Victoria where the govt is going to pay for gas fired power stations to replace brown coal

    When we have 9 billion people needing to be fed on Haber process fertilisers I don’t think electrolysis will be helpful at current costs. We should save gas for later by not burning it in power stations. At the moment gas is every bit as trendy as wind and solar.

    Finrod in your report on the thorium conference please say if CANDUs for Australia got a mention.


  296. JN: The symposium was basically all about MSRs. CANDUs were mentioned once or twice in passing as an example of current technology, but I don’t recall their Th breeding potential being mentioned. It might have happened in private conversations people were having, but I recall no significant reference to them in the presentations.


  297. John Newlands, on 25 November 2011 at 8:47 AM said:

    Some think China is peaking in coal now hence the global push for coal imports including from the US.

    Quarterly US Metallurgical Coal Exports by destination

    Click to access t9p01p1.pdf

    Quarterly US Steam Coal Exports by destination

    Click to access t9p01p1.pdf

    US Metallurgical coal exports account for 2/3rds of US coal exports.
    In steam coal Europe accounts for about half and South Korea accounts for more then half of exports to Asia.

    There are various proposals to add to US Pacific Coast coal export facilities. Exporting Powder River Basin coal(Wyoming) has a number of challenges. The BTU content is quite low at 8500 BTU/pound – approx 4700 kcal/kg. It’s 1,000 miles by rail over the Rocky and Cascade mountain ranges to the the nearest port. Then there is the issue of finding a port with suitable channel depth with expansion possibilities. We also have rail track capacity issues – the two main east west tracks running thru Washington State are already at 70+% capacity with a total inbound freight load of 50 Million tons per year.
    Washington State Rail Plan according to the Washington State long range rail plan –

    Click to access StateFreightRailPlan.pdf

    No doubt there is room to export additional coal to Asia in range of 10’s of millions of tons per year. Getting beyond that involves substantial long term investment in rail tracks through mountainous terrain.


  298. If we are now labelling wind and solar as ‘unreliables’ I think we should call gas ‘future food’. The most versatile Haber process nitrogen fertiliser is prilled urea
    which currently wholesales for about $500 a tonne. A decomposition product in the soil is the potent greenhouse gas nitrous oxide. What if by 2050 urea were to cost say $2000/t inflation adjusted? This is because most of the gas will have been burned in power stations.

    We will have many more mouths to feed by mid century. We will need vastly increased electricity
    – to drive cars via batteries or synfuel
    – help buildings cope with extreme weather
    – to make synthetic nitrogen fertiliser.
    Somehow this has to be mostly done with windmills and solar panels. Good luck future generations.


  299. The text of Martin Ferguson’s introfuctory speech to the Thorium Symposium is now up on the Australian government website.

    After a quick scan, I can’t see that the minister’s claim that nuclear is not competitive with La Trobe Valley coal in Australia, but I recall him being fairly emphatic on that point in the actual delivery.

    @ moderator: Would these comments on the thorium symposium be better in the IFR/LFTR email exchange thread?

    I think they are OK for either thread but probably more relevant and easier to find and follow in the IFR/LFTR thread. Re-post them there if you wish.


  300. If I’m using the right data a $6 tonne of brown coal will attract about $18 of carbon tax when burned (less per tonne than black coal) so the effective cost is more like $24/t. However the conversion efficiency is poor. Now I wonder if the secret plan of the Baillieu government is to throw a tantrum next year along the lines of ‘they’ve forced higher power bills on working families when we have no other alternatives’. Since NP is banned and Victorian gas will cost 10X as much per GJ this is sort of correct.

    On thorium I wonder if Australia could sustain an annual production of 30,000-50,000 tonnes of ThO2, far more than U3O8 ever will. The Lynas rare earths plant in Malaysia is near completion, Arafura’s plant in Whyalla is apparently drawing up construction plans (aiming for 20,000 tpa of ThO2) and Iluka is stockpiling monazite sands in Geraldton. We’re rolling in the stuff.


  301. John Newlands, I suspect that you are using the wrong data. One t of brown coal generates a couple of tonnes of CO2, which at $23 per tonne amounts to an additional $46/tonne for the original coal. Effectively, closer to $52 per tonne.

    NSW power stations apparently buy their black coal at approximately $30/t plus delivery by rail. Say $35 per tonne comparison price and work the CO2 cost out from there. They are still behind Victoria on a cost per GJ, before and after the carbon tax. Somebody posted actual GJ figures for Vic and NSW domestic steaming coal recently. I can’t find that post.

    Perhaps another reader will calculate the before and after carbon tax costs for Vic and NSW coal. The comparisons in ($/GJ/efficiency) over time as gas increases in price will be a very strong indicator as to who feels the pain most during the next few years. No doubt every generator in the NEM has this graphed and hanging on the wall because the marginal cost of production of power for most suppliers is essentially the fuel cost. It spells the difference between life and death.


  302. @John Bennetts’

    A table of Australian coal grades Gj/t on page 93

    Click to access Energy-in-Australia-2011.pdf

    Black coal averages 23 GJ/t and lignite(Brown coal) averages 9,8 GJ/t.

    Table FE4 from US EIA lists pounds of CO2 per million BTU by coal grade. Basically 210 lb/MMbtu give or take 5 lbs except for Anthracite which is 227.

    In terms of a carbon tax there really isn’t much difference in cost/KWh between black and brown coal as the CO2 emissions are a function of heat content(carbon content) rather then the weight of the coal.

    2200 lbs divided by 210 lbs Co2/MMbtu = 10.47 MMBtu/tonne of Co2

    $23/10.47 = $2.19 = carbon tax per MMBtu.

    1 MMBtu divided by 3412 btu per watt * 35% thermal efficiency = 102 KWh per MMBtu.

    $2.19/102 KWh = 2.147 cents/KWh carbon tax +- 3% depending on coal grade.

    For reference the natural gas people claim 117 lbs of CO2/MMBtu.


  303. Brown coal must contain a lot of incombustible material perhaps silica to have a third the calorific value of black coal. It’s a kind of flammable soil which could be why it is ‘dirt’ cheap. The US DoE data somewhat bears out my earlier estimates. Like the well known authority Dr Sheldon Cooper I wish the US used metric units.


  304. John Newlands, on 27 November 2011 at 6:21 AM said:

    Brown coal must contain a lot of incombustible material perhaps silica to have a third the calorific value of black coal

    Lignite/’brown coal’ contains 30+% water. There is a drying process by which you can bring the Btu content per ton up to the level of ‘lower grade’ black coal, of course the drying process requires energy which kind of defeats the purpose unless one was looking to export it and reduce transport cost.


  305. Karl-Friedrich Lenz — What is feasible is a collection of generators [storage is a form of gneration] which meets the demand together with the reliability requirement. The usual assumption is that the least cost mixture, externalities included, is optimal.

    Since NPPs must undergo replenishment periodically irrespective of the achieved capacity factor in the interval the actual cost of consumables [which vary with capacity used] is very low. Therefore there is no economically justifiable incentive to include wind generators in a grid consisting entirely of NPPs.

    This conclusion does not change even when some form of storage is included. Assuming one desires to store in the form of methane [you write gas by which I assume methane is meant] the economics suggest that using excess nightime NPP energy to produce methane is superior to using ‘unreliable’ energy from the wind.

    The situation for utility-customer-owned solar PV is different and not treated in this comment as not being soley a matter of utility operated generation. However, the prior paragraphs apply to solar thermal as well so long as the LCOE exceeds that for NPPs, which appears to be the case.


  306. John Newlands, on 27 November 2011 at 9:04 AM said:

    lignite and CO2 rich biogas…….Strange how Germany sees a big future in both

    German Black coal mines are at a production depth averaging about of 920 meters which is pretty close to the maximum economic depth.

    The USGS considers coal ‘unrecoverable’ at a depth between 914 and 1200 meters depending on grade and various other factors.

    Click to access ChapterD.pdf


  307. @ harrywr2:

    I cannot see where the energy cost of boiling all that water off brown coal appears in your analysis.

    Presumably, the energy figures you provide for black coal (23 GJ/t) and brown coal (9.8 GJ/t) include the cost of energy spent boiling off the water so one is about 2.5 times as energetic in a nett sense than the other.

    Then we switch energy units to MMBtu, for reasons I don’t quite understand. I have an emotional dislike of Btu because it is a nonsense unit, devised for one purpose only – as a jargon term for use within an industry. What’s wrong with SI terms?

    After an excursion via US figures using lbs for mass and considering only anthracite energy conversion factors, comes a statement
    “CO2 emissions are a function of heat content (carbon content) rather then the weight of the coal.”

    Agreed, the CO2 emissions are a function of the heat contents of the coals. However, the carbon contents for different coals are not the same when expressed in terms of mass of C burned per kwh of energy sent out. Each tonne of input C becomes 3.67 tonnes of CO2 @$23 = $84.41/tonne of carbon burned.

    To be meaningful, we need to compare tonnes of carbon in coal input per unit of energy sent out (ESO), typically MWh.

    This would have the advantage of avoiding use of unfounded assumptions that both brown and black coal generators are 35% efficient. They are significantly different, in part because the auxiliary plant are not the same.

    Does anybody out there have either:
    … Figures for coal consumption Vs ESO for Vic brown and NSW black coal on an industry wide basis?
    … AND average carbon content/tonne for brown and black coal?


    … typical carbon intensity for generation of a unit of electricity sent out using Vic brown coal and the comparison figure for NSW black coal?

    These, plus knowledge of the costs of coal (Brown $6, Black $35, or whatever) and the carbon tax of $23/t emitted CO2 will give us the numbers we are looking for – fuel costs, post-June 2012, per unit of ESO.


  308. Demand Pushes Power Grid to the Limit,1518,799918,00.html
    The reality is that it has become increasingly difficult to construct transmission lines in a timely fashion, if at all, almost anywhere [as almost everywhere is more crowded and the last paragraph of the linked article becomes more relevant].

    Grid planners ought to attempt to place generation close to demand [although that might raise other NIMBY issues].


  309. @David B. Benson

    I assume you reply to something I wrote in the storage thread.

    I answered to Cyril R. in more detail on my blog. In short, if you already have displaced all fossil fuel with a nuclear only system, then yes, it does not make much sense to add wind or whatever, if as you assume the cost is higher.

    That situation is not reality anywhere. While there are some countries who run their whole electricity generation on renewable only and some who run it on nuclear and renewable, they all still use fossil fuel for transport or industry.

    The low carbon system needs to meet demand for electricity plus demand for transport, heating and industry uses of fossil fuel. It follows that you end up making a lot of fuel. It also follows that there is no such thing as unneeded low carbon energy generation for a long time to go.


  310. Karl, first let me say, that unreliably available wind and solar power won’t be used to make fuels, because of the low capacity factor (productivity) of the fuel factory. These are not cheap and you want to run it as industrial facility (70-80% capacity factor, compare to solar’s 10% in Germany). So if you have excess of these there is simply no economical use for them. You cannot run aluminium plants at 10% capacity factor, even if your power costs nothing. You’ll go bankrupt on capital inefficiency. No investor will spend a dollar in a synfuel plant that operates 10% of the time when they can also spend it in a plant that does run 80% of the time, even if the latter has higher fuel costs.

    Why use unreliable and expensive solar and wind to make synfuels if you can just liquify coal or use natural gas?

    If you want to cut CO2 emissions, why use unreliable unproductive power that cuts very little CO2 emissions per dollar and can’t run synfuel plants economically or practically? When you can just build a nuclear plant and run it for synfuels 24/7?

    There are these pesky things called ‘investors’ that need convincing.

    Second let me say something about wind and solar replacing fossil fuels. As pointed out before, they can only replace 20% or so and then the other 80% had better be flexible fossil plants to prevent your grid collapsing and to meet the load reliably. Your argument is that if (or as long as) we can’t get nuclear to meet close to 100% of the load, we must use wind and solar for that 20% and resort to burning 80% fossil. I disagree with this path. It is not strategic, it will lock us into fossil fuels, serve as an excuse to never ever build nuclear, and considering the costs, considering all these things, there is no interim ‘bridge’ transition benefit.

    We need to skip wind and solar and go directly to nuclear. Any other plan won’t add up to solve climate change. The sooner people realize wind and solar can’t do the job – because they really just can’t – the sooner they will accept nuclear as the real solution that adds up – because it does.

    I’m sorry that this is the truth, but that’s what it is.


  311. As a final note I’d like to point out that we need to be picking the low hanging fruit first to make the most effective transition.

    Powering aircraft with synfuels from wind/solar/nuclear is very inefficient. For the time being we must, in my opinion, focus on the low hanging fruit:

    – build nuclear plants equal to daily peak load
    – use excess nighttime nuclear power to charge plugin hybrids for commuter travel
    – reduce space heating by a factor of 4-8 by state of the art insulation, passive solar etc.
    – use heat pumps for remaining space heating demand
    – use accoustic heat pumps for industrial heat up to 200-300 degrees Celcius.

    This gets us 100% solution in electricity systems, about 70-80% of car miles driven, and all space heating demand, and about half of the industrial heat demand (half of it needs less than 300 degrees Celcius).

    This would be a good start. We’ll figure something out for long distance transport and “big things that go” later. Let’s be honest, we don’t have any solutions to these right now.


  312. @John Bennetts, on 27 November 2011 at 11:44 AM said:

    Then we switch energy units to MMBtu, for reasons I don’t quite understand

    Because the US EIA provides figures as to how many pounds of CO2 are emitted per MMBtu.of coal burned across a wide range of coal grades from a variety of coal mines.

    Based on 5,000+ samples there are variances in CO2 emissions by coal grade depending on ‘where’ it was mined. I.E. Within coal grade hydrogen content varies as well which affects heat rates.

    Bituminous coal(black) mined in Arkansas has a CO2 emission per MMBtu of 211.6 pounds. Lignite(brown) mined in Washington State has a CO2 emission per MMBtu of 211.7 pounds.

    Yes, I cherry picked the lignite with the highest hydrogen content and compared it to the bituminous coal with the lowest hydrogen content to make the case that nothing ‘exact’ can be concluded based simply on coal grade or heat content without knowing the specifics of the mine in question.

    As to the efficiency of black coal vs brown coal power stations.

    According to this article –

    Click to access EfficiencyCoal.pdf

    The most efficient operating black coal plant power plant in Europe as of 2005 is 47% efficient and the most efficient brown coal plant in Europe is 45%.

    A difference is 2% efficiency in terms of determining optimum costs can easily be offset by rail transportation costs and differences in extraction methods.

    As far as determining coal transportation freight rates. In the US the rates per ton mile vary from 1 cent per ton mile to more then 5 cents per ton mile. The rates from a specific mine to a specific coal fired electricity plant are considered ‘proprietary information’.
    US EIA report on coal transportation rates –

    Click to access waybill.pdf


  313. @Cyril R.

    Your assertion that wind won’t be used to produce fuel is falsified by the fact that it already is (references in storage thread).

    It will be further falsified if Desertec goes with the limestone option for energy transport (references in storage thread).

    And using wind to make gas makes sense, since the alternative is to just shut down your wind capacity whenever there is not enough demand.

    Investors love renewable energy, as well they should with feed-in tariffs in place. Look at the real world figures which show that last year’s investment in new renewable capacity has surpassed investment in fossil fuel capacity (no reference since this is open thread and that is common knowledge anyway).

    If your opposition to solar and wind is motivated by a desire to help nuclear energy, it backfires. There is no more secure way to make your pro-nuclear advocacy fail than attacking the large and firm majorities supporting deployment of renewable energy world wide.

    As to the suggestions in your “final note”, I would support all of that.


  314. Karl wrote:

    Investors love renewable energy, as well they should with feed-in tariffs in place. Look at the real world figures which show that last year’s investment in new renewable capacity has surpassed investment in fossil fuel capacity

    Investors like to make a profit, it does not matter if it is solar or natural gas, if it is subsidized heavily – ie several times its real market value – they will love it. It is true they like public relations effect from solar and wind, but it is not paramount for them.

    Again you’re confusing power with energy. It does not matter how many Watts you install, it matters how many kWhs you generate. Looking at real world figures and you see all that solar and wind are massively improductive compared to fossil generators. I’ve discussed this issue quantitatively here:

    As you can see the nuclear kW produces 17x more electricity than the solar kW for my country. So it is massively exaggerating to compare peak Watts of solar with nuclear. And also coal for that matter because coal is almost as productive as nuclear.

    I’ve put this in a graph as well with other sources to make an easy comparison of how productive each kW installed is over its lifetime:


  315. @ Karl. Dollars buy you something. In this case, they buy Watts. Your argument is that more dollars are spent in renewables than in fossil. This is because renewable Watts cost a lot and deliver very little compare to a fossil Watt.

    That’s my point about not confusing capacity and energy. Certainly dollars should not be the determining criterion for renewable energy success when renewable energy is the most expensive form of energy! This would result in drawing conclusions opposite to the truth.


  316. @Karl-Friedrich Lenz, on 28 November 2011 at 1:19 PM said:

    Look at the real world figures which show that last year’s investment in new renewable capacity has surpassed investment in fossil fuel capacity

    Did they include Chinese and Indian investments in coal fired capacity?


  317. Karl-Friedrich Lenz — France approaches 100% NPPs @ about 80% with some hydro andd a tiny bit of coal burning.

    Do as Gene Preston is: put realistic numbers into a computer program [socalled optimizer] which attempts to find the least cost mixs to met demand and reliability requirements. You will discover that [if all externalities are included — that means subsidies too] then an all NPP solution [puls whatever legacy hydro is around] wins over any other low-carbon mix of generator types.

    Of course if there are sunk costs in existing non-optimal genrators those probably ought to continue for there useful life; just don’t add any more.


  318. Commentators have been despairing over the Durban climate conference. I wonder if the news behind the news is that fossil fuels are on the downhill slope which explains the desperation to dig up anything that burns. For example Canada is contemplating withdrawal from the Kyoto protocol to legitimise the use of tar sands. On closer inspection we see at best that will provide less than 4m barrels a day out of current global liquid fuels usage of 87m or so barrels. Ditto coal usage in the world’s biggest emitter China; imports may simply be unable to make up a domestic shortfall. Possibly world oil shortages may reduce coal demand in any case.

    Delegates will even question the validity of offsets though I doubt this rort will be disallowed. My gut feeling is that we’ll have ineffectual climate conferences for another decade but then logistic problems for fossil fuels will start solving the problems for us. By mid century the problem will be getting adequate energy supply low carbon or not.


  319. @harrywr2

    Reference for renewable investment surpassing fossil fuel last year:,0,2421278.story

    That includes all countries, but not hydro power.

    See also this Bloomberg story that expects 7 trillion investment in renewable energy over the next 20 years (this time including hydro):

    7 trillion dollars is not bad for a start, though I would much prefer a commitment at Durban to spending 2% of GDP on renewable, as proposed by President of the Maldives Nasheed last month:

    That would work out to $1.26 trillion a year at present levels.


  320. @Karl-Friedrich Lenz, on 29 November 2011 at 9:33 PM said:

    See also this Bloomberg story that expects 7 trillion investment in renewable energy over the next 20 years

    The bulk of the subsidies in the US were part of a trillion dollar economic stimulus plan that ends next year and is unlikely to be repeated(IMHO)

    US Wind Association market report…page two is interesting..wind installations peaked in 2008.

    Click to access 3Q-2011-AWEA-Market-Report-for-Public-2.pdf


  321. One constant in energy discussions seems to be the assumption by wind and solar interests they should always get subsidies and mandates. Recall in Australia both Garnaut and the Productivity Commission said the MRET and REC subsidy should cease when carbon tax arrives. Didn’t happen of course.

    Perhaps the coal export industry has an even bigger sense of entitlement with proposals to double shipments from Newcastle. As we speak those coal buying countries will be making pledges of carbon abstinence at Durban but for some reason they keep buying more coal.

    The floods at Moree appear to be in the same fields as the proposed $750m solar flagship. No matter since rain and cloud don’t detract from its real purpose as a symbol.


  322. @David Walters

    From the IFR thread

    I will note here that while this issue of large vs small reactors is definitely the topic for another thread, people should not *assume* that smaller reactors are somehow more economical than large reactors. That 10 x 100MW reactors will be cheaper than 1 x 1000MW. This is completely unproven.

    The issue is financing. It’s hard to make the case that bringing 1,000 MW on line will automatically result in the sale of 1,000 MW worth of demand. Demand projections more then a couple of years into the future are notoriously poor. So if we think 6 years from decision to online(a pretty good pace) then the banks will demand a ‘risk premium’.

    If you can cut build time to 2 years the demand projections are firmer so the risk premium goes away.


  323. @ harrywr2, on 28 November 2011 at 3:33 AM:

    Hi, Harrywr2. I have enjoyed reading your references re efficiencies of brown Vs black coal stations.

    I am left with the feeling that, whilst there may be only a 2% efficiency difference between brown and black coal units, this does not translate into similar carbon dioxide outputs and hence to similar CO2 tax burdens.

    Broadly speaking, your second reference states that it takes about 3 tonnes of brown coal to generate the same electrical output as 1 tonne of black coal. Compare this with EIA, your ref#1, which indicates that carbon intensities are similar for brown and black coal.

    Assuming that both statements are correct in their own ways, then we must consider where these seemingly different results could come from and what they mean.

    Not being familiar with the methods of test and reporting methodologies of your two studies, I can suggest a possible cause.

    Has the moisture content in the coals been considered? It appears to me to be likely that the CO2 intensities are based on dry coal samples, yet the burn rates are for wet coal samples.

    Surely 3t of brown coal, as received, ie with moisture content above 30%, will contain much more elemental C than 1 tonne of black coal at say 18%, and thus emit a correspondingly larger amount of CO2 when burned? The energy required to boil off the water is about 5 times as much for brown coal as for black coal.

    The CO2 generated per tonne of dry coal may very well be similar, but not the usable thermal energy produced – called exergy in Ref #2.

    Put another way: 3 t of brown coal will consist of about 2 tonnes of dry matter.

    1 tonne of black coal, which you have demonstrated will produce about the same amount of electrical energy, will consist of about 800g of dry matter.

    If the ash and hydrogen contents in the two dried coal samples are similar, then the carbon emissions per MWh energy sent out for brown coal will thus be about 2.5 times as great as for black coal.

    One MWh of electrical energy sent out from a black coal station will result from burning about 0.5 tonnes of as-received coal, ie 0.4 tonnes of carbon. There will be 3.67 x 0.4 = 1.47 tonnes of CO2 emitted.

    For brown coal, that becomes 3.67 tonnes of CO2 per MWh.

    The carbon tax on 1 MWh of energy sent out is thus:
    Black coal: 1.47t CO2 @ $23 = $33.81/MWh (3.38 cents per kWh)
    Brown coal: 3.67 x $23 = $84.41/MWh (8.44 cents per kWh)

    Given that the average market price in the NEM for the past 2 years has been less than $50/MWh, the difference is significant.

    Can somebody confirm that the carbon tax is per tonne CO2-e, as I have assumed to be the case, and not per tonne of elemental carbon.