There’s been a bit of discussion about nuclear power lately, but it tends very much to the abstract. I thought I would look into the question of when, if ever, nuclear power might be a reasonable option for Australia to consider, and how we should go about it.
An obvious starting point is the Switkowski report commissioned by the Howard government, which I’ve uploaded here. There are three main points which allow me to provide an answer to the question, at least for the next decade or so.
(i) In the absence of a substantial carbon price nuclear power is not competitive with coal
(ii) First-of-a-kind (FOAK) nuclear plants are likely to be very expensive (above $80/MWh), not competitive with wind or gas (even with CCS)
The estimate is that ‘settled down’ long run costs could be $40-$65/ MWh, which is competitive with wind and cheaper (for the moment) than other renewables.
Let’s take “settled down” to refer to a design with at least 5 examples completed and operating in developed countries, at least some of them built on greenfield sites (that is, not next to existing nuclear power plants which already have a lot of the necessary infrastructure). It seems clear that these minimal conditions can’t be met before 2025 at the earliest. The US, which has been attempting for a decade to restart its nuclear industries is still at the pilot stage, exploring a number of technologies, and offering to subsidise the construction of three plant designs for each major option. Most of the proposals are on existing sites, only six have reached the point of a plant actually being ordered, and none is anywhere near starting construction. Given a sharp acceleration in progress, the emergence of a highly successful design and a lot of new orders towards the end of this decade, the 2025 date might just be reached.
That suggests that Australia should forget about nuclear power entirely for at least the next five years. If things are going well for nuclear, and not so well for renewables, that would be the time to start setting up regulatory structures, looking for sites and so on.
John Quiggin 
Jarrah well demonstrates the problem of economistic dogma.
For example, he states;
in the same breath as he denies that there are social aspects to be cosidered by economists in power generation; viz
So for economists some social aspects are:
wind power – noise, eyesores, – damage other social interests
hydro – dams contradict social needs
nuclear – waste, monopolisation, linkage to weapons threatens present and future society
fossil – carbon impacts society
Even Nobel prize winning economists recognise that economics cannot deal with all externalities and must eventually relay on government to tell people what they can and cannot do to obtain better outcomes [see R Coase – J. of Law and Economics – Oct. 1960, v3.]
Jarrah-type economics, like many others, pretends to do one thing, but in fact does the opposite.
BilB – I’ve never been to Hong Kong but I think I would find it too crowded and besides my family and friends are here. Still it’s an option.
… Australia should forget about nuclear power entirely for at least the next five years
Maybe its just me, but I should have thought that if you think you are going to eventually need something and you know that it has a long lead time you’d want to start sooner rather than later. Sorta like carbon abatement generally.
That’s especially so if the most time consuming but cheap parts of getting it going are political, regulatory and planning rather than actually building (the US experience is extreme on this – we can surely do better than that but it’s still likely to be long).
The other point to make is that nuclear technology has better long-run prospects of getting big cost reductions than the likely carbon-reduced alternatives. That’s not an argument for its immediate introduction (lets see if those prospects are realised), but it is an argument against knee-jerk opposition to the very idea of nuclear power. We should be preparing the ground; training some nuclear engineers and doing our share of the R&D.
In @50
“relay” should be “rely”
@conrad
This is a good point, but it surely applies to all such basic industrial facilities.
What I would do is to compel the developer of the facility to “borrow” the money needed to replace the plant at the end of its effective commercial life (e.g. 40 years) which funds would be held in escrow. The plant is subject to compliance with all relevant standards and in extremis it it fails to make adequate remedy on direction within the time needed the state can step in and use so much of these funds as are needed to bring the plant up to code and compel the plant operator to redraw and refinance the debt. A persistent non-compliant operator (or one that went bankrupt) could have its licence forfeited to another properly qualified operator by tender and forfeit to the winning tenderer its escrow funds. If and when a fully compliant plant operator decided that the sunk cost had been fully recovered and wanted to rebuild or reconfigure or simply leave the business, these funds would be released when all of its obligations were fully discharged.
The debt service costs of this loan would then be built into the wholesale energy cost, minimising intergenerational debt inequities. Imagine a situation in which some new breakthrough improvements in technique became available half way through the sunk cost recovery period (e.g 18-25 years in). Instead of needing to raise new capital, the operator could draw down the requisite funds, make the improvements, reconfigure its loan obligations to cover the new sunk cost end-date and move on. That way, we would have each facility persistently approaching maximum efficiency without dead-weight costs militating against renewal.
“why are you in Australia, when you could be living in Hong Kong where they pay almost no tax at all.”
.
I did work there for some years, and I might go back — especially if mainland China replaces their smog-stacks with nuclear-stacks and the air gets cleaner. Also, I’m not sure “almost no tax at all” correlates well with 16% tax. Personally, I wouldn’t encourage people too much, because last time I was there, I was also surprised at the number of Australian professionals working there (teachers, doctors etc.) that Australia can ill-afford to lose. I imagine this will be a problem for the nuclear industry — even if you want reactors, it might well be hard to get enough staff that know how to use them.
@TerjeP (say tay-a)
No, it should be as general as possible, while avoiding ‘double-dipping’. Agriculture, forestry, mining, concrete and steel etc ..
Payroll tax is state-based so complex negotiation would attach to this. I’d prefer social expenditure on means-tested community facilities that would offset other non-discretionary elements of people’s expenditure — housing, transport, childcare, health, community food banks, education etc.
On the contrary, this should be emphasised. It’s ironic that you oppose an ETS in favour of a tax, and I prefer the ETS to a tax. I suspect I know why that is though, so perhaps it is not so ironic.
Chris Warren, you start your entire premise about oppositon to nuclear power by stating that the concerns with this technology are not economic. But you didn’t state what those concerns are. This is a real gap, you have assumed we know what you’re worried about but the fact is we don’t. What are your non-economic concerns with nuclear power, simply stated?
He thinks nuclear power involves slavery.
wilful
I posted here some time ago a lengthy description of the failures of nuke reactors to deliver what the proponents promised in terms of some of the following reasons why nuke reactors are not feasible:
[1]safety – several reactors having accidents in different countries in recent years releasing radioactive material in one case undetected for years.
[2]-cheap electricity, -in many cases any electricity at all due to closures caused entirely by engineering and other faults. 3 countries at least have had to shut down all nuke electricity generation for lengthy periods of time due to faulty designs and/or accidents.
[3]- delayed and lengthened building times and higher than initially promised costs
[4]- performance claims -the superduper you beaut ‘new’ reactors, the stuff of wet dreams for nuke proponents, not actually existing but always promised as just over the horizon
[5]-significant levels of GHG emissions over the full cycle, lower than coal maybe but far higher than the alternatives
And….most significant of all…..NO answer to the expensive dangerous long term waste problem[please don’t respond with the claim that new tech cuts storage time down to only 10-20 generations].
There is simply no reason to even consider nuke.
Much better to invest in safer, cheaper, baseload capable, proven technology of the sustainable type that is ready to go virtually now.
BTW I’ve come in late on this thread so if I’ve covered material previously covered ..sorry.
[cntd]
The next three issues are:
Chernobyl happened, and commercialisation will introduce, in time, similar short-cuts in nuclear plants due to commercial pressures for shareholder returns.
Rogue states and terrorists will plausibly develop nuke weapons in the next 500 years.
Nuclear technology perpetuates global Third world – First World dichotomy. Haiti is unlikely to afford nuke plants but can develop solar, wind and tidal. How can small states – Chad, St Helena, Monaco expect to have afford nukes and have sites for location and waste storage?
But most importantly, experience has shown that industry lobbyists lie, misrepresent, buy influence and elections, and do not maintain agreements after the event. They protect themselves with commercial-in-confidence precepts and we only find out about nuclear accidents long after the events. We have learnt a lot through the nicotine wars, so we need to be protective against simplistic arguments being peddled by economists and nuke industry websites. We have no way of knowing that we know how many nuclear accidents have in fact occurred.
The amount of investment in nuclear plants is damaging investment in better alternatives.
Switching to nuclear does not address underlying problem as to why we need more and more population, debt and energy?
@fred
fred, the only one of those issues that isn’t strictly economic in nature is safety – for those of us with a distaste for actuarial type discussions where lives are assigned an economic value.
I think you’ll find that the latest, suerduper you beaut new reactors, the “Gen 3+” types are in fact now being built, are in existence. The final cost of the tenth or hundredth of this design hasn’t been determined yet, but we’ll know one day…
I think you’re completely and utterly wrong on #5. This shibboleth has been demolished many times.
And I’m curious to know what “safer, cheaper, baseload capable, proven technology of the sustainable type that is ready to go virtually now” is.
This blog is a mess.
Posts missing and in the wrong order.
My #10 above is clearly missing the earlier part.
The whole original post has disappeared.
Fran, whilst your suggestion sounds like a good idea, it’s basically the one that has had many problems in the Europe and the US. Basically, the escrow funds were never big enough (presumably it’s hard to estimate costs of something in 60 years time), and I think in Europe in some cases they got used for other things (a bit like the Aus. government looking at the Future Fund I guess). I can’t find a good summary now, but here is quick summary of stuff going on in the US. Europe is in an even worse position I believe. That’s why I think the upfront fund needs to be over-estimated, not held at all by the government, and preferably guaranteed by someone else. I realize that’s a problem for many industrial things, but I’d rather have, say, Coode Island next to me than a reactor that didn’t get decommissioned. Whilst I like nuclear power (having breathed in enough coal smog for two life times), such a big number to start with is sure to put the public off it, although I could be wrong.
@conrad
One suspects that the problem wasn’t estimating future costs but having the political will to impose an appropriate charge in a climate in which CO2 and other fossil fuel pollutants were uncosted.
It’s a simple enough thing to work out a dollar cost for replacing the plant today and dealiung with the projected volume of hazmat today and to allow rolling averages based on cost curves already established in the field. If anything, one suspects that costs will fall in real terms 40 years from now so any one based on historical data ought to be generous.
The amounts could be reviewed on a 3-5 year cycle based on contemporary analysis — which would itself be an incentive for ongoing R&D.
So for wilful and others,
Even though this blog is not working properly; the real issue is:
Should society accept;
“cheap” “efficient” nuke energy for some, that cannot be shared amongst all the worlds nations and that risks a very rare accident but with catastrophic outcomes, or
more expensive energy that can be shared amongst all the world’s nations but may risk infrequent accidents but with no damage to society.
The second option is clearly preferable but there is no economic way to obtain it.
So it’s about safety and risk of catastrophic accident? Sorry, it’s just that you haven’t crystallised this point.
@Chris Warren
It can be shared, either directly through UH3 small scale nuclear batteries, or by supplying power via HVDC from secure locations.
The calculus is wrong. There can be no accidents these days that have “catastrophic consequences” in properly designed plants. TMI melted down and killed … nobody.
What is certain is that the ordinary operation of coal plants meets the catastrophic failure standard every year. And when there is an accident, it is even worse.
The actual cost of renewables is likely not merely to be more expensive but orders of magnitude more expensive than coal or nuclear. That means that in urbanised locations within developing countries, coal and gas or oil will dominate the supply of energy, with all that entails. Insisting they pay for renewables, is unrealistic. Supplying them with the reneawables isn’t much more realistic.
i think australia should take a look at thorium for nuclear power, alot cleaner from what ive read.
http://www.wired.com/magazine/2009/12/ff_new_nukes/
Fran, you keep making these sweeping
“The actual cost of renewables is likely not merely to be more expensive but orders of magnitude more expensive than coal or nuclear”
dumb remarks which are just….not true. You’ve done no research to back up such comments, so cut it out until you can substantiate them.
wilful
How do you get to that conclusion from @10 above. @15 was not just about safety and risk. It appears you are paying sufficient attention or are just reading what suits you.
Rogue states can still emerge even from a 100% safe industry. How can small states or undeveloped states develop nuke plants and waste repository, even if 100% safe?
It seems to me that Chernobyl “crystallised” the risk of accident and social consequences.
@Chris Warren
Chris, you were the one who made a distinction between ‘moral’ and ‘social’. I merely continued your distinction, bizarre as it may have been, and asked for clarification.
You appear to have an image in your mind of economists as bald bespectacled beancounters who know the price of everything and the value of nothing. This caricature is plainly false – this whole argument is taking place on the blog of an eminent economist who is renowned for taking the “social aspect” into consideration.
“Even Nobel prize winning economists recognise that economics cannot deal with all externalities”
So now you are accepting “economistic dogma”? Flip-flopper. Looking at your list of externalities, the only one I can see not amenable to economic analysis is the future threat of nuclear weapons. This is because of the massive margin of error that would have to be applied, rendering quantification almost useless. But by the same token, NO form of analysis can tell you whether the risk is greater than the reward (which is what we’re trying to establish).
“must eventually rely on government to tell people what they can and cannot do to obtain better outcomes”
This assumes perfect government. I see criticism of the assumptions behind ‘perfect’ competition models in economics all the time, rightly so. Yet strangely these same critics commonly believe that, merely by being in government, certain groups of individuals will transcend the real-world limitations on those assumptions.
“Rogue states and terrorists will plausibly develop nuke weapons in the next 500 years.”
500 years??? Hahahahahahaha.
I think John’s assessment is a fair one. There is only one way nuclear power will be considered seriously in Australia — seriously to the point that there is bipartisan support, which is an absolute necessity — and that is if the economics work.
I’m quite resigned to the fact that we are not going to be the ones to prove or disprove this question — it will be left to developing economies like China and India, and other nations that have immediate reasons to pursue nuclear power (South Korea and Japan due to lack of any apparent alternatives, UAE and other oil/gas rich nations that wish to sell rather than use their prized non-coal fossil fuels). The FOAK and replicated build action is happening now in these places, and in 5 or so years, the world will be in an excellent position to assess just how well these projects have developed and how the economics of nth-of-a-kind builds stands up.
What does this mean for nuclear in Australia? There is no time for foot dragging. We should be conducting a serious and ongoing public dialogue on the issue, monitoring and learning from international experience, training our next generation of engineers and upskilling the relevant components of the workforce, investigating appropriate ways to license and legislate for the site requirements, reactor safety oversight, and so on. There is much to do in the next 5 years on the nuclear front, even it if doesn’t involve pouring concrete foundations!
Ch
@Chris Warren
Chris, what I’m doing is asking you to state your non-economic objections clearly. Until you do so, we’re forced to interpret, which is potentially unfair to you.
Jarrah
This is rubbish.
In a moral society there is no distinction, and I do not make a distinction between social and moral. I require social outcomes to be moral at the same time. I do not make a distinction – both apply together – moral outcomes must apply to society.
This is rubbish
i never said this and it is not my view.
This is rubbish
What dogma?
More rubbish
There is no assumption of perfect government. I presume that a responsible, democratic goverment based on separation of powers is sufficient.
Jarrah you should stop putting false words into other peoples’ mouths and then criticising the false words.
If you cannot understand the likely amount of political changes amongst world powers that occurs over 500 years (and possible risks) then you are not competant to deal with such issues.
Your signoff is typical.
wilful
I am not sure you are interpreting things properly – hence your problem.
If I say:
but then someone “interprets” this as
then they demonstrate they cannot interpret plain words reasonably.
So it is hard to then waste time when the same people ask, viz:
The solution is for you to increase your skills in interpretation, as the text already is at a level suitable for intelligent 15-year olds.
The objections at @11 seem reasonably clear and easy to interpret – for most anyway.
Do I have to dumb it down further?
No chris, the problem is that you’re leaving it open for interpretation. Don’t be all passive aggressive smartarse on me*, all I’m asking is for you to clearly state what your problem is. There was some problem with the thread here, obviously, where you clearly articulated genius failed to show through. I didn’t see your post at #11 until after I’d asked you to clarify what the hell you were on about.
Anyway, your argument at #11, is that what we should respond to?
* actually, go ahead, I’ll just ignore you as someone who’s more interested in winning arguments than debating ideas.
@Chris Warren
“and I do not make a distinction between social and moral”
Chris, this is you earlier:
So either you are making a distinction, or you consider “social, environmental, generational and moral” to all be the same thing.
“i never said this and it is not my view.”
But you did say:
So obviously you consider economists as having little to contribute beyond glorified accounting. As for ‘dogma’, I was pointing out your inconsistency in decrying economic analysis, then citing economists.
“I presume that a responsible, democratic goverment based on separation of powers is sufficient.”
Sufficient for what? And I put it to you that in fact your claim that we “need” government to tell us what to do because we can’t choose it for ourselves relies on heroic assumptions about the capacity of government to assimilate and act upon information in an optimal (or even ‘better’) way.
wilful
Unbelievable!
If you’d read what you should have, you wouldn’t have raised the issue.
The other objections were posted but seem to have got misdirected by this blog.
You should take a step back, Chris, take a chill pill, stop posting for a few minutes, and realise that I wasn’t attacking you, and your aggression is getting in the way of things here.
To those who find fault with nuclear’s need for government support I could point out that the fossil fuel industry gets plenty while showing little sign of belching fewer megatonnes of CO2. For example the WA and Federal governments have indemnified Chevron the operator of the Gorgon gas field. If any or all of an eventual 120 million tonnes of CO2 escapes from storage in a saline aquifer below Barrow Island the taxpayers pay all damages. That’s CO2 that was already dissolved in the natural gas; the cleaned gas still creates more CO2 when it is burned. In the US nuclear indemnity, the Price Anderson Act, went through legislation. To my knowledge the Oz gas equivalent is purely an administrative decision.
The economics of nuclear energy,as always, requires olympian optimism. No matter how sure the numbers they always balloon to the ridiculous in reality. And nowhere has yet shown how the the cradle to grave costs can be justified. Always hiding costs and hoping noone notices. No matter, the proponents win if ground is turned, and the sunk costs preclude cancelling the project.
I’m actually supportive of nuclear in the energy mix. Maybe someone can oneday prove that it’s possible to build a safe reactor on a sensible budget. It’s silly for Australia to consider it at this stage though.
Eh.. South Korea? Japan? Both have nuclear industries with recent building experience and reactors that are proven designs, and a willingness to export them.
Fran – it is somewhat amazing that cutting payroll tax is too complex and yet lumbering industry with mountains of red tape isn’t. If we can have wall to wall Labor across state and federal tiers and they can’t work things out through dialogue then what business do they have telling the rest of us what to do.
I don’t doubt that nuclear does work but it shouldn’t do so without strong regulation – which makes it less of a libertarian’s ideal energy source.
Back to geothermal; I’m not sure it’s ever gotten much serious funding and definitely not the kind of fast-tracking nukes got to get started and that geothermal needs. Australian gov’t R&D funding strongly favours Carbon Capture but I suspect that’s only because they are the captives of carbon. Geothermal’s share is a pittance in comparison. Large scale energy storage’ share? I suppose we’ll rely on the laptop market for battery R&D and hope it’s scalable. One thing for sure is that it won’t become a high priority in Australia.
For all the hype about new gen nuclear, there doesn’t look to be a lot of it yet. It sounds promising – but so do highways paved with solar cells.
Isn’t the real problem that we don’t want clean energy enough to pay extra for it and all the policies to tackle climate change involve no significant costs and negotiating to do the very least we can get away with.
I think that Pr Q’s point that nuclear doesn’t look economical without a strong carbon price is where the most likely answer lies; put a big price on Carbon and a lot of alternatives to fossil fuels, including nuclear, will look more attractive. But that would be a “big new tax” no matter where and how productively that revenue gets spent. Of course, the moment that looks like becoming reality will be when the rolling shutdowns of coal plants will begin – to show everyone who has the real power in Australia’s energy sector. It’s a sector that will welcome nuclear no more readily than renewables and it’s not above flexing it’s muscle.
wilful
You need to reconsider your conduct and revisit the issue in more sensible terms. without adding to confusion.
Hong Kong does use nuclear power though, from over the border at Daya Bay. I’m about 30km away at the moment.
To free up a lazy $20 bil I suggest cutting the broadband rollout in half. Satellite and wireless internet provide reliable alternatives to fibre optic cable. $20 bn might buy three gigawatt nuclear power stations with integrated desalination. I’m pessimistic that any form of the ETS that gets up will impose a serious carbon price, more than say $10-20 a tonne. The Commonwealth could lend the funds at low interest to generators who agree to retire coal fired power stations.
The problem of nuclear waste has been mentioned by several commenters. As for safety, there seems to be a perception that there have been improvements since Chernobyl. In one sense the perception is justified (there hasn’t been another event like Chernobyl) but in another it turns out to be a bit more complex even if one assumes that no more Chernobyl or TMI events will occur.
Below is a link to a May 2007 paper, authored by seven EU and USA scientifically qualified specialists, titled “An Account of Events in Nuclear Power Plants Since the Chernobyl Accident in 1986”
It is a rather long paper, but worthwhile reading – IMHO.
http://www.greens-efa.org/cms/topics/dokbin/181/181995.residual_risk@en.pdf.
To call nuclear energy ‘clean’ is, IMO, irresponsible public relations stuff which may be counterproductive.
To illustrate difficulties arising for individuals, consider the following bits of information.
1. The said ‘improvement’ does not exclude the release of radioactive iodine 131. Only if the release of this agent exceeds a specified annual limit will it count as an ‘event’.
2. Individuals who have a particular thyroid condition abosorb radioactive iodine 131 more (in some precise sense which is too long to specify here) than other people. This is harmful.
3. The only known cause of non-H. lymphoma is radiation.
How easily would an individual with condition 1 find the bits of information 2 and 3? How is the individual supposed to choose a place of residence and how often does this individual (and family if applicable) have to move? These are practical questions.
@Ernestine Gross
To my knowledge nuclear facilities and even airports are supposed to detect for radioactive iodine (I129 and I131) then immediately intervene. Release events were in the past like the A-bomb testing days. OTOH we get a double whammy from coal burning, global warming plus diffuse radiation
http://www.epa.gov/rpdweb00/tenorm/coalandcoalash.html
@Ernestine Gross
Ernestine – thanks for this link on the residual risk of the nuclear industry. It is a very good study.
It is a long paper but for anyone here who thinks that nuclear energy is the solution to the problems of AGW and or brushes aside risk of nuclear failures like Chernobyl (on the basis that “nothing has happened since”) dont miss this.
So Ill post Ernestine’s link again (and Ernestine – this should be a regular standing journal link – to be posted monthly!).
http://www.greens-efa.org/cms/topics/dokbin/181/181995.residual_risk@en.pdf.
Having read through all of the other comments I think JQs perspective is fair. That being that nuclear is someway off, if at all. Further that it only makes sense if you are convinced that the current approach to baseload power is required.
I would have thought that the need to change from coal presents a whole range of alternatives, that need to be considered. Why not move to a much more diversified energy network. If I have solar panels on my roof, and send all my garbage to a small waste-to-energy plant (that is located where the current transfer station is), how much significant “baseload” power will be required? This distributed approach also encourgaes me as the consumer to minimise my energy usage and to update my technology whenever I wish. I would have thought that like so many things that an individualised solution was likely to be the way of the future.
Yes industry will require energy, but perhaps that simply becomes an additional factor when siting a new plant. So it means you have your aluminium smelter adjacent to a major solar facility, or wind, or geothermal, or tidal.
Then you dont need nuclear – unless industry wants it and can justify the cost and clean up. Which I would think in a modern world would be unlikely as many of their shareholders would be unlikely to support the notion.
@JJ
Although I am in favour of including nuclear power (especially throium, IFRs etc) in Australia’s (and the world’s energy mix) I don’t disgree with the kinds of no regrets measures you propose. These and others I can imagine would seem eminently sensible in terms of waste management, energy efficiency and public buy-in of the broader goal of having a small footprint. I strongly support urban consolidation, and within that model, localised energy options (such as roof-mounted wind on high rise), ground-heat pumps perhaps incorporating waste heat from stored onsite waste, relatively localised processing of sewage and grey water and associated water recycling, some localised pumped storage at the same facilities, increased local public transport, parking hubs connected to transport nodes along main connecting roads, marginal real-time charging for access to road infrastructure and so forth …
Where I part company with the many of the advocates of such measures is the idea that these (along with renewables) represent a whole solution to the problem of decarbonisation. They don’t and can’t. At best really good ubiquitous measures can slow the growth in emissions in greater volume and at at lower cost and earlier than can new clean energy sources. It’s the low hanging fruit, but as the allusion implies, once it is picked, it is gone. If you haven’t also decarbonised by the time that day arrives, emissions (both of GHGs and associated toxics), will continue to accrete. This is especially true if a substantial part of what is now transport energy demand gets put onto the grid (which is after all one of the things one would want to do). It’s also very clear that world population will continue to grow until at least 2050 and thopse 3 billion of us now (and their successors) who live a lot worse than we would minimally accept will need to do things that will increase their per capita energy demand. Again, good design of human systems can slow this growth relative to what it be if they copied the western model, but it won’t eliminate or reduce it, obviously. While rural Asia, Subcontinent, Africa and Latin America can obviously make significant use of renewables (especially the non-grid-connected parts) urban areas will need serious baseload capacity if they are to be able to supply their rural hinterlands with the light industrial goods they will need.
In some cases — geothermal may be a good renewable baseload option — certainly those with access to the geothermal energy of the Rift Valley in East Africa will do well to use it. That said, figures of $5-10,000 installed are being quoted. Until some serious plants go up, we simply won’t know.
@JJ
Your summary makes sense to me.
@JJ
Given that the six aluminium smelters allegedly pay (it’s a commercial secret) only 10% or so of what households pay for electricity, I doubt whether substantial price increases are politically possible. Thus a smelter paying 3c per kilowatt hour for grid electricity is not going to pay 30c and survive the overseas competition. To get a regular enough power supply from non-hydro renewables will require excess generation capacity and energy storage, both expensive. The process before smelting that converts bauxite to alumina is also energy intensive. That’s why the aluminium industry got free permits under the ETS due to trade exposed status. I think a cash subsidy or tariff protection would be more transparent.
As to some other ideas about distributed small scale generation I don’t see the evidence that they work on a pilot scale let alone getting enough public participation. Carbon penalties may tip the odds somewhat but then we are all paying more. The major replacement for coal must have massive grunt and round the clock reliability.
@Hermit
Personally, I’d favour making them pay full price and then forcing them to choose between trying to sell stranded assets and trading with their costs internalised.
Australian aluminium (well the aluminium in Victoria certainly) is some of the filthiest and most CO2-intensive aluminium in the world. If the smelting went anywhere else, it would be cleaner, even allowing for transport costs. (In practice, it would probably go to Queensland)
Really, with the subsidy being paid, you could put every displaced Victorian aluminium smelter worker on a “retraining” stipend of $50K per annum for the next ten years and still have plenty of change.