Another thread for lengthy debates, off-topic exchanges, long posts on regular hobby-horses etc.
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Another thread for lengthy debates, off-topic exchanges, long posts on regular hobby-horses etc.
John Quiggin 
Ronald Brak,
You are quite correct. However, we are comparing orders of magnitude difference in the cost of electricity from nuclear versus renewables, whereas what you are pointoing out is a difference in percentages of cost. There is a difference in scale.
It is true that load following nuclear plants are a little more expensive than baseload only plants. But in a fully or near fully nuclear system, about half the plants would be baseload only and half would be load following. The cost of electricity from the load following plants would increase as the amount of electricity they produced decreased (ie as their capacity factor decreased due to load following).
Gas and hydro are the least cost for for providing peak and intermediate power now, but this will change over time. Nulcear will get cheaper, gas will get more expensive and there is little more hydro capacity available.
@Ronald Brak,
The point I was making is that NPPs can do load following. The contrary is frequently asserted to be the case.
As to the economics, at what point NPPs cease to be economic when operated in such a manner would need proper modelling of the grid. Average utilization 85%, 75% etc. Who knows, but it is important to recognise that there is a measure of flexibility.
Which begs the question of how should peaking load be handled? Partly by storage – eg pumped hydro? Renewables with storage? Nuclear with storage? The storage requirements should always be lower for nuclear because the electricity to charge the storage can be scheduled.
Incidentally, wind and solar are also capital intensive and need to be run as much as possible to turn a dollar.
@Ronald Brak
This is quite true, and of course the rapid ramping up and down does sacrifice efficiency so the savings are smaller still. You’d be far better off selling the power cheaper.
There is nothing wrong in principle with cheap power. If no ecological footprint was entailed in the production of energy and the resource was unlimited, then the cheaper it was, the better. A debate has arisen because of course, there is a huge and dangerous set of externalities with fossil hydrocarbons, and these are of course limited, the subject of military conflict, expensive, and needed for things other than energy production, all of which recommend that we use them as a last resort.
Nuclear power even at the margin is not of course free or unlimited or without a footprint, but it comes pretty close. There are some really useful things you could do with a lot of cheap power low footprint, abundant power. Desalination comes right to mind.
One contributor at BNC suggested that we could set up a desal plant at Ballina or perhaps on the Gold Coast and pipe desal from the ocean via the towns in the border river region to the Severn/McIntyre Dumaresq Rivers that feed the Murray Darling. Doing this with fossil hydrocarbons would be wasteful in the extreme, but with spare nuclear capacity? Why not?
Ideas for Peter Lang to do with a cool trillion dollars..
Plan 1: build 40 “three gorges dams” an generate 18 * 40 (720) gigawatts of baseload electricity.
or if the environmentalists are correct
build 13 “three gorges dams” and generate 240 gigawatts of base load electricity.
Just think what you could do with 4 trillion dollars, Peter!
Sometimes you have to laugh at how reality bites. Almost simultaneous with BilB ridiculing Peter Lang for his (co-authored) estimate that 100% renewables in Australia would cost well over a trillion dollars, came this on Climate Spectator.
A trillion dollars just happens to be what the Europe will have to spend in the next decade alone, to pay for efficiency, “an estimated 50,000 km of electricity transmission lines” and “huge investments in green energy sources” – exactly the sort of thing that the ZCA plan calls for.
In light of this, BilB, I don’t think it’s Peter Lang that should be feeling embarrassed.
Fran #39/3,
Yes they can, Fran, if they have additional turbines in the turbine houses. The costing information is in the document that Franz Trieb made available to you. No there is not a complete 1 gig installation that I am aware of as yet, but I could be wrong.
What will happen in the unlikely event that Australia went down a nuclear path is that as Nuclear facilities were built GneIIPV will be taken up at an accelerating rate as its viability is based on direct savings made for both household electricity and transport energy. However the uptake of distributed power systems would not stop once generation capacity of combined distributed and nuclear generation replaced all fossil generation capacity. As surplus energy entered the system, brokered by small non core industry players, the viability for nuclear would begin to decline until reactors were forced to shut down. Only a few reactors would survive the overrun of capacity and the wild fluctuations that would result. At that point new energy storage and natural gass microgeneration businesses would begin to appear, made viable by the spot market for electricity in low solar periods. This is an absolutely certain outcome as GenIIPV is cost viable today without a carbon price or governemnt subsidies. The impacts of peak oil on transport energy costs will make distributed energy an essential component of future living standards.
The only future for Nuclear is for the production of liquid aviation and heavy transport fuels (and it is almost certain that heavy shipping will have to go nuclear within the next 15 years). But it is unlikely that land based Nuclear plants would be able to compete with solar thermal plants established to produce fuels in Australia. Such Solar plants would not have a need for storage facilities and would operate when the sun was shining and rest when not, and their structural layout is more compatible to fuel production than Nuclear. Their running costs would be very low.
The real future. You heard it here first.
Kark Duffet,
How in the hell does Europe’s 730 million population energy spend in any way relate to Australia’s 22 million population energy spend needs.
Please explain.
Sorry “M”ark saw it too late to correct. But please explain anyway.
And just when it was looking all so good for the Nuclear industry comes
Awww!
@BilB
Thanks BilB … Interesting article on some of the mitigating factors against nuclear in the US:
Sluggish Economy Curtails Prospects for Building Nuclear Reactors
* The economic slump, which has driven down demand and the price of competing energy sources, and the failure of Congress to pass climate legislation has changed all that, at least for now.
* It’s principally because of the economic situation,” he said.
* One major factor driving the cautious stance of both the industry and the government is the fall in electricity demand, which peaked in 2007.
*The plunge in the price of natural gas has also made nuclear power far less competitive.
* natural gas prices may remain low because a technology called hydraulic fracturing has vastly increased the estimate of recoverable reserves.
* the unwillingness of Congress to pass climate change legislation that would put a price of some sort on carbon-dioxide emissions.
So basically, gas is cheaper (because like coal it doesn’t pay to pollute) and the economy is in a hole so new capacity is risky.
That doesn’t suggest renewables are about to become economic.
Interesting that here we see the absolute stupidity of putting nuclear power into the same basket as the hydrocarbon merchants. What you are cheering about here BilB is the fact that gas can trade at nuclear’s expense and may well have found a way to extend its supply, with all that implies for the atmosphere.
Nuclear costs more but it doesn’t pollute. Gas does.
There is more to it, Fran. If you are following the ASPO conference, you will have heard that with oil at $85 per barrel, an accepted recession trigger value, and oil unlikely to fall much below that ever again, the US may not recover from recession with out very painful change. Gas from shale appears to be buoying up the energy situation but this is an extremely limited resource. The US is in a mess (that’s nicely poetic) thanks to George W Bush. The US may just have to learn how to manufacture for itself again. But if recession is the reason for delaying a Nuclear rennaiscence then there may never be a time, if the US recession settles into be a dull ache.
Australia survived Howard, but only because we are resources rich (still).
Fran Barlow:
The spare nuclear capacity would have to be incredibly cheap because such water would otherwise be expensive not just from the desalination but also from the energy needed to lift it 800-900m to get over the Great Divide. Also, even if this was feasible it would be more feasible to just collect water from the Clarence before desalination is worth considering.
Also, in general, desalination is way uneconomic for agricultural purposes. Usually, the only market you can slug for the cost of desalination are city slickers, normally ones who, like Melbournites, have a government that has no qualms about ripping-off their constituents.
And this shows how corrupt the nuclear industry is.
Why should capitalists be gifted loan guarantees from taxpayers? Is this economic theory, or is it more a political circumstance?
Are similar loan guarantees available for renewables?
So as well as a carbon-price – society also needs a nuke-waste price to fund removal of high-level waste by space transport (currently at around $10,000 a kg, but falling).
Are you kidding? Renewables have something much better than those pesky loan guarantees, which have to be paid for in advance. They have direct subsidies on a scale any other industry would kill for. Admittedly, they do have an existential dependence on them.
@Chris O’Neill
At the margin, it would be. The cost of the fuel per GWh is very small. And of course, there would be communities in the path who might like to buy the water.
What? Steal from another river system? Rob Clarence to pay Darling?
Oh I’m not bothered about that. This would be mainly for environmental flows, though there’d be no problem selling it at cost to communities who wanted to use it on the way through to offset the cost. For years the Murray-Darling system has been pillaged and now there’s a bunfight about how much of a flow it should get. I say we ought to restore it, and if there are irrigators there who feel their crops will be economic buying irrigation water, then fine. Let them buy as much as they like at the marginal cost. If they can’t afford it let them grow their crops some place else.
@BilB
That’s as maybe. It may well be that large sections of the vehicle fleet are pushed onto the grid which would be no bad thing. Nuclear would make these all near ZEV and relieve the economy of some of the burden of oil-prices.
That’s improbable though it can’t be excluded. It certainly won’t help renewables if that happens though.
Actually, the US is offering some loan guarantees to renewable projects. The big difference to nuclear is that they are being snapped up and used.
Whereas nukes are high risk, prone to big delays, cost overruns and complete project failures, renewables – even though much of it is uncharted territory (offshore wind, big CSP, etc.) – investors know they can be built on time and deliver reliable, predictable energy.
And the fact that the fuel is free and never-ending just sweetens the deal. Also, the public actively want renewables – not so much nuclear.
Here’s another piece of information to add to the nuclear fan club’s cognitive dissonance:
– State Lawmakers Do Not Share Congress’ Nuclear Love: Shoots 0-8 in State Legislatures During 2010. “Loan Guarantee Fever” in Congress not repeated by states. Kentucky to Arizona, industry lobbyists fail to overturn bans, pass costs on to consumers or get nuclear classified as “renewable energy”.
Despite ~50 years of subsidy and development, nuclear still cannot compete in the market.
@DavidC
David C – another favourite of the billionaires lobby groups is dismantling social security – organisations like Cato have spent years and years claiming there is a crisis in US social security – just like this.
http://www.cato-at-liberty.org/social-security-in-the-red/
Apparently there isnt at all.
http://krugman.blogs.nytimes.com/2010/06/21/zombies-have-already-killed-the-deficit-commission/
and here
http://seminal.firedoglake.com/diary/56536
You unquestioning regurgitating pro nukers can support the billionaires club if you like but they wont pay you and they they dont care if their policies are harmful to others along the way – just like nuclear. All they want to to a) make a buck or b) save a buck on taxes.
Its that simple.
There are no other concerns from the lobbying billionaires.
Whats more insidious is they spend decades on these campaigns.
If they have the money to throw at these stinktanks and lobby groups – we clearly are not taxing them enough.
PS Prof – you will have to excuse Prof Krugman but I think he plagiarised your book!
DavidC – I made a comment about the billionaires lobby groups and got moderated – actually I had three links in it. Ill try it with 2.
Another favourite of the billionaires lobby groups is dismantling social security – organisations like Cato have spent years and years claiming there is a crisis in US social security – just like this.
http://www.cato-at-liberty.org/social-security-in-the-red/
Apparently there isnt at all.
and here
http://seminal.firedoglake.com/diary/56536
You unquestioning regurgitating pro nukers can support the billionaires club if you like but they wont pay you and they they dont care if their policies are harmful to others along the way – just like nuclear. All they want to to a) make a buck or b) save a buck on taxes.
Its that simple.
There are no other concerns from the lobbying billionaires.
Whats more insidious is they spend decades on these campaigns.
If they have the money to throw at these stinktanks and lobby groups – we clearly are not taxing them enough.
PS Prof – you will have to excuse Prof Krugman but I think he plagiarised your book (see his piece on the zombies killed the deficit commission in June)!
BilB, the European expenditure is basically just to do not much more than stand still in terms of emissions. It won’t result in the retirement of any fossil-fuelled generation capacity. The ZCA plan, on the other hand, is close to a lock, stock and barrel reconstruction of our electricity generation, over a similar geographic area (hence the transmission line component is in the same ballpark).
I think the comparison is a fair one, and that you owe Peter Lang either a more incisive analysis of his critique, or an apology.
Mark Duffet,
You are making a truckload of wild assumptions. From memory of announcements of a year and a bit back this programme that is being talked of is the framework for the Desertec programme that will build and link CSP solar thermal plants across the top of Africa with the European grid. This is a massive programme that will involve at least 20 European and African states and require submarine cables at Gibraltar, from Libya to Italy and across the English channel. Give it some time and you will have all of the proof for the operational success of large scale thermal CSP that you guys have been craving.
Peter Lang’s “research” conclusions are total crap, nothing can change that.
Mark D,
In last months “Australian Manufacturing Technology” there were a swag of articles on engineering for large scale renewables including wind, tidal, and tracking photovoltaic. This months magazine features Canberra based Wizard Power who are tooling up to produce parabolic dish concentrators for 500Mw of installed capacity thermal CSP a year. So it seems that it will not be long before we have large scale operational thermal CSP in Australia.
Haven’t seen anything for Nuclear industry engineering technologies yet, but will let you know if I do.
Some Desertec background
http://www.psfk.com/2010/06/desertec-african-solar-energy-to-help-power-europe-by-2014.html
and there are always the doubters
http://www.bnet.com/blog/energy/desertec-plan-for-european-solar-power-unlikely-to-materialize/3622
Fran Barlow:
If that’s true then where else in the world do they do it? (i.e. run all the nuclear plants in a system at 100% because they can virtually give away the electricity). If that were true then nuclear power stations would normally have some industry like Aluminium smelting set up next to it to make sure the nuclear plant is used 100% all the time. The fact that this hasn’t happened shows that nuclear power is not cheap at the margin. There’s also the small matter that desalination infrastructure cost is not cheap at the margin, not to mention water pumping and piping infrastructure cost.
Ever heard of the Snowy? Most of the water going down the Clarence ends up in the sea. Farmers have wanted governments to divert rivers going east back inland for a long time. Of course, the farmers want someone else to pay for it.
Re Desertec
Whatever the engineering realities and cost of Desertec (and it would not be cheap) does anybody really contend that nations in Europe are going to outsource a large slice of their energy security to North Africa? Or in the Australian context are SE Asian nations likely to outsource their energy security to Australia. Would Australia outsource it’s energy security to Indonesia?
I find it impossible to believe that nations would leave themselves exposed to the point where a flick of a switch turns the lights out or be exposed to what would essentially be monopoly pricing.
Some development in this area might be possible, but I’d suggest that there would very quickly be a limit that would not easily be crossed.
Quokka,
The Queensland government is in the process right now is talking with New Guinea about a hydro dam in Papua to supply electricity to Australia.
Half of our oil comes from other countries.
There are extremely good reasons that offer more security to Europe from Desertec than risk. Think about it.
The Bass Straight link was supposed to provide cheap renewable hydro power to Victoria, and no soubt some such power has crossed to Victoria in that manner, but the main effect of the link has been to increase the level of coal-fired power consumed in Tasmania by connecting it to the coal stations of Victoria. Hydro is a far more viable power source than solar thermal. What makes anyone think the outcome would be any different for North Africa?
While finance experts promote risk diversification (don’t put all your eggs in one basket) more or less constantly, the idea of having the real resource equivalent, namely a portfolio of energy sources, has passed the ‘nukes’ by. By ‘nukes’ I mean those who keep on comparing ‘nuke’ to 1 alternative and those, who want to have a ‘nuke’ paradise (only nuke).
The finance experts’ advice is sound for equity securities, assuming there is no leverage of equity securities*, and assuming there is underlying real resource and production diversification.
I am not sure the ‘nukes’ would be interested in the question of ‘the cost of capital’ because this would raise the rather awkard question of a ‘risk premium’ (not only equity puzzle). What, God forbid, the ‘nukes’ would have to consider the possibility of the public not wishing to take on the negative externality risks? Dictators (socialists as well as corporatists) don’t have to worry about this, I do understand that much.
This brings me to income distribution. In societies where the income distribution isn’t very skewed, people (not superfunds) can express their personal risk preferences in the equity market. When this conditions of a reasonably flat income distribution is not met, then voting in elections is another way. It is regrettable that some people, who shall remain unnamed here, try to influence state governments to by-pass the information aggregaton process on risk-preferences. Shame on them.
Reading the sandpit gives me the idea that in comparison to ‘the nukes’, v. Hayek was a social democrat. Its all relative, as they say.
*I am making this rather strong assumption of no leverage at all to avoid the complexity of dealing with ‘prudent’ borrowing behaviour.
Spreading the risk. Very good point Ernestine. The ‘nukes’ would probably accept this advice from their own financial advisers but apparently it doesnt apply to our energy sources, which completely convinces me that the “pro nukers no matter what else is on offer, no matter where, no matter when, ” is entirely a fundamentalist political decision.
May be we should remind them “dont put all your energy in one basket.”
The ‘nukes’ mindset is rather fixed and and unbending isnt it? Perhaps a little too much so which gives the game away. Wonder how they would deal with being compelled by others into putting their life savings where their mouths are ie only into nuclear shares?
@Alice
Speculating about motivations is one activity totally outside my skill set.
Erskine Goss,
You said:
“While finance experts promote risk diversification (don’t put all your eggs in one basket) more or less constantly, the idea of having the real resource equivalent, namely a portfolio of energy sources, has passed the ‘nukes’ by. By ‘nukes’ I mean those who keep on comparing ‘nuke’ to 1 alternative and those, who want to have a ‘nuke’ paradise (only nuke).”
This is not correct, at least it is not what I am saying. What I am saying is all options should be available. None should be prohibited as nuclear is in Australia. Then we should have the least cost option that meets our requirements for low cost electricity, low emissions, safety, and low environmental foot print.
But it seems to me that the anti-nukes want to ban nuclear and therefore, are trying to make a case that renewables can do the job. Clearly they cannot do the job, are hugely expensive, have a higher environmetal foot print and are no safer. Yes, no safer!!.
Renewables cannot provide more than a small proportion of our electricity supply. This is the point I am making. But the anti-nukes, and pro-renewables don’t seem to want to consider rational discussion. They seem to want to run on some belief, such as Greenpeace’s “Love Wind, Hate Nuke”. That seems to be the substance of the anti-nuke, pro-renewables advocates.
We know that nuclear power can produce about 80% of our electricity demand, at least cost, safely and cleanly. It has been demonstrated for 30+ years by France. Many other countires have over 50% of their electricity supplied by nuclear. No large or middle size economy has more than a few percent of their power supplied by non-hydro renewables. (Yes, I know Denmark generates about 20% of its power from wind. But we need to acknowledge that this has to be exported and only about 4% of the wind energy can be used in country) . Most people do not understand any of this. They just keep on repeating a mantra: “Renewable good, nuclear evil”.
Ernestine Gross ,
My appologies for mis-spelling your name (both of them). I sent before checking.
@Ernestine Gross
Speculating about the motives of others is not outside my skill set Ernestine – not these days.
One simply cant take at face value so called “genuine science” or “genuine research” or “genuine statistics” at all any more (sad to say there are so many charlatan opinions being paraded before our eyes – and this topic has more than its fair share as well).
For example PL says
“Yes, I know Denmark generates about 20% of its power from wind. But we need to acknowledge that this has to be exported and only about 4% of the wind energy can be used in country”
Denmark actually exports wind energy PL – I would have thought than an argument for renewables.
@Chris O’Neill
There are a range of desal options using nuclear power in operation at the moment. Three basic methods are used — RO, MED and MSF. RO and each have their advantages. Multistage Flash Distillation (MSF) is effectively cogen since waste heat from the plant is used. This produces purer but more expensive water than RO and is what we’d want if we were thinking about feeding the MDB.
Depending on how salty the water is it can require about 6KwH per m3 to produce potable water. Kwinana in Perth is a little over 4KWh per m3, though there are economies of scale. Fairly obviously, if you wanted to produce 1GL of water though you’d require about 4GWh plus whatever was needed to pump the output to the river source: not a huge marginal cost if you fit the work around other demand.
The point is though that it has been done for years. In Aktau, Kazakhstan for example a small (135MW) fast reactor not only supplied up to 135MW of electrical power, but produced 27 years worth of 80ML per day. More than half of its power was used for this purpose. Argentina is in the process of commissioning a plant to do desal and power.
What would be unusual is that we we would be essentially attempting to use desal to restore the health of the MDB, perhaps cutting transport costs by piggybacking on demand for water between the collection site and the sources of the river and to some extent downstream for irrigators. Our main “client” would be the river system.
If we are serious about saving the river then we have to put a value on it, and to compare that value with the cost of the infrastructure to do it.
Well there’s Kola and Balakovo in Russia …
True but misleading. The ecology of the land beside the Clarence would be radically changed if you started tapping it to refill the Darling.
The idea of building a plant big enough to foreclose new coal capacity, retire existing capacity and with enough left over running at optimal efficiency to repair the Darling and supply the northern table lands with water at perhaps $1 per Kl all on near-zero emissions sounds very appealing.
Sure the supply infrastructure wouldn’t be cheap. Yet wouldn’t it be nice to have a major engineering project aimed at restoring the MDB? How much do we value the longterm health of the system is a question we need to consider. It could be like the 21st century version of the Snowy Scheme — this time aiming to restore a river system than to sacrifice one. And there would be one or two jobs in the project as well.
@Alice
It exports the energy at bargain basement prices, and buys back energy at high prices from Norway and Sweden and Germany, each of whom can sell it back to them because they have hydro, nuclear and coal respectively.
So Danish wind works because of Norwegian hydro, which is adequate because of nuclear and fossil hydrocarbon backup from the others in the grid. There’s very little evidence that Danish wind is contributing efficienctly in cost terms to Denmark being less CO2 intensive. It may well be that the principal beneficiaries of Danish wind are Norwegians.
@Fran Barlow
Fran Denmark uses wind and Norway, Sweden and germany all have some hydro – yet diversification into renewables isnt part of your schema?
Ive heard of lots of countries utilising renewables now Fran but your dear Professor Brook tolerates the slogan “renewables wont work” on his website? Thats not true because they are already in use. Why so one eyed Fran? Renewables clearly are working and the more they are working and the more countries that start using them, the better.
@Finrod
Well no, it wasn’t. It was meant to provide cheaper peak generating capacity to the mainland and a net transfer of energy to Tasmania. The energy/year was already being consumed in Tasmania and they wanted more.
As was planned.
Solar thermal would produce a net increase in energy production in North Africa. There was no increase in Tasmania’s net energy production associated with building Basslink.
@Alice
That’s because in context (renewables can enable/support retirement of fossil hydrocarbons at acceptable cost in footprint, dollars and on the needed timeline) renewables won’t work. Our hydro resources are tapped out.
Personally, I think geothermal might yet work in the senses above, in Australia. Waste biomass might make a contribution. But at the scale we are discussing, renewables aren’t going to work, even here.
@Peter Lang
No need to apologise for mis-spelling both my names. Typographical errors can happen anywhere and in my case I make more than I would like.
I am setting aside your assumptions about people whom you classify as ‘anti-nuke’.
Let me ask you a question: How do you calculate the ‘cost of capital’ for any energy source useful for consumption, either directly by people or indirectly via produced commodities?
@Fran Barlow
There go those goalposts again. You were talking about marginal generating cost per GWh and then suddenly start talking about desalination using waste heat. This still does not have a particularly low marginal cost. AFAIR, it’s only used in countries with very limited water resources that are prepared to pay a lot per litre of water. And you still have to pay for the enormous amount of energy to pump the water to the crest of the Great Divide.
As I said, it has only been used in countries with very limited water resources that are prepared to pay a lot per litre of water. Kazakhstan is an example of this. Who is going to be the bunny to pay the high cost of this water to replace irrigation water that is taken out of the MD basin for virtually nothing?
That’s just not true. In the case of Kola-1, the load factor last year was 63.26%. Even when this is close to being true, it is only so because the nuclear station is part of a system whose minimum demand is greater than the full output of the nuclear station. That doesn’t mean they will give away their electricity virtually free. They still want to be paid to cover their capital cost. The extra electricity from a bigger nuclear power station costs more than zero because the extra cost to build a bigger nuclear power station is more than zero (quite a bit more than zero).
$1 per Kl, if that, to replace irrigation water that is sold for a tiny fraction of that cost is just laughable.
@Chris O’Neill
Once you have met your capital cost and the plant is operating commercially, everything else extra is, to the plant operator, at the marginal cost. That’s not to say the operator won’t charge what the traffic will bear. The fact is though, running the plant at its optimal thermal efficiency is ideal from the plant operator’s POV, providing the operator gets it a commercial return. As we have seen with off-peak pricing, the cost of ramping down and up makes the definition of commercial return a lot less.
You do, but what are you going to do? If we don’t get a steady supply of water into the system, it dies. That’s our legacy. You can cut allocations (and I fully support that) and resume marginal operations (I also support that) but if there is drought (inevitably, with AGW this will come) then the river will still die because even the reduced call on the water will be too much. So my question is — what is it worth to save the river system? IMO, quite a bit. If the energy to be used to raise the water to the height and places needed to get it into the Darling is near zero emissions, why should anyone care how much we use?
Plainly, you’d have to charge the same for river water as the cost of supplying it, though if you had takers on the line from Ballina or the Gold Coast who had already bought it, you could treat it and move it on for a reduced cost, since the first buyers had already repaid some of the cost of producing and conveying it.
Ernestine Gross, the reasons for diversification an investment portfolio simply have no equivalent in the design of the electricity grid.
There is no inherent virtue in diversification of electrical generator types. The design requirements for the power grid are primarily capacity and reliability at an affordable price. And for us, today, eliminating CO2 emissions. If diversification helps meet those requirements, then diversify. If a monolithic system is better, then go with that. Diversification is not desirable for its own sake, but only insofar as it helps meet design goals. And if it works against design goals, then its undesirable.
Now, if you seek to design a grid with a high penetration of renewable energy, then you do need to number up, to diversify across modes, build over very large geographic ranges, and keep fossil fuel stations alive, in order to ensure the very high redundancy that is required to meet the reliability goal. But thats only a consequence of accepting the artificial constraint that you must use renewables and not use nuclear. And its lead in your saddlebags so far as meeting the design goals.
But if you don’t artificially constrain your choice, then the optimal path to the design goal is a predominantly nuclear and hydro composition, with natural gas generators as a transitional component along the way. Thats not very diverse. But so what?
If my financial adviser told me to diversify my portfolio I’d say sure. If he told me we should diversify the generation mix in the grid because thats what he tells his clients to do with their equities, I’d judge him to be an innumerate fool and sack him.
@John Morgan
I’ll start with the easy bit. You write:
“If my financial adviser told me to diversify my portfolio II’d say sure. If he told me we should diversify the generation mix in the grid because thats what he tells his clients to do with their equities, I’d judge him to be an innumerate fool and sack him.”
You missed the point. The point is that diversification in equity securities is possible (in the sense of reducing risk for a give expected rate of return on investment) if and only if the pay-offs of the equities are not identical under all circumstances but are inversely related under at least one circumstance. (Numeracy, without further specifications, is not a sufficient condition to understand this point.)
It is an empirical fact that there is ‘residual risk’ with nuclear power. (I’ve listed publications, including from France, a long time ago.) It is also an empirical fact that there is a small probability risk of a large negative environmental and health and saftey impact associated with nuclear power (Chernobyl to name one). Your grid design approach does not deal with this. That is to say, your goal (electricity grid design) is merely constraint in the overall description of the problem in a model of an economy that is non-dictatorial.
I read somewhere here some praise for Kazakhstan, as to the pumping of water overland.
As am not wishing to clutter the discussion with trivia out of context, shouldn’t ask if this the operation that has being stuffing up the Sea of Aral for thirty years, now?
God bless techno fixes, particularly when all the thinking has been done beforehand to cover contingencies, a bit like Chernobyl?
Or the Murray Darling.
@Fran Barlow
It exports the energy whenever the wind blows which means it has to take whatever the price is at the time. So it’s a price-taker.
This is always true in the case of Norway which sells its hydro-electricity whenever the price is highest. The price it pays to the others just depends on the price when it needs to buy it and that depends on the time of day.
You could also say that Swedish nuclear works because of Norwegian hydro but so what? Hydro is in a class with gas turbines as far as generating economics go, i.e. low generator cost and high operating (which includes lost opportunity) cost. People might think that hydro has a low operating cost but they are ignoring the lost opportunity cost of using water. Once the water is used, you can’t use it again and its supply is limited. Coal, nuclear and wind have a high generator cost and low operating cost but with wind the output varies. But back to Danish wind working because of Norwegian hydro. That’s true so why not make use of that fact? Places that are well endowed with hydro can integrate wind extremely well so that’s where a good opportunity lies. The problem lies with systems that don’t have much hydro. It’s much more difficult to integrate wind into such systems.
It’s in competition with nuclear so depending on the cost of nuclear it may not be cost efficient for reducing CO2 emissions.
@Fran Barlow
You’re still not getting it. To meet the capital cost, the operator has to be able to sell as much electricity as possible for whatever they can get for it. If someone came along and said “I’ll pay you virtually nothing for electricity if you build a bigger power station so that I can use the off-peak electricity when no-one else wants it”, the power station builder just wouldn’t be interested. The nuclear power station builder has to get a reasonable price for all of the electricity his power station will produce to justify the size (and cost) of the power station.
And you’re also ignoring the fact that desalination plants have an enormous capital cost which means they won’t be interested in operating them for only the fraction of the day that electricity cost is off-peak.
Because people care about money. Even if someone decides that extremely expensive water supply systems are eventually needed, the far cheaper first option is stopping irrigation.
@Chris O’Neill
You miss the point. Whatever the capacity of the plant, if it is to meet the demand for power it will for at least some of the time either have to ramp down at very little cost saving or maintain its output by meeting some other demand for which it is paid more than it would save ramping down. That is why all fully dispatchable plants offer off-peak power at a discount. This is seen as a weakness of nuclear plants, but it’s actually a benefit, if you have some task that needs the power but would be uneconomic, except at the margins, and wherer variability in output is not a constraint.
Bear in mind that load following plants tend to be more expensive to build. Having an open contract to supply power for desal from excess capacity makes the economics of the plant better, providing of course that there is an adequate commercial demand for desalinated water. Unlike power, it doesn’t matter if the plant’s output of desal varies from day to day because people aren’t waiting at the other end with drinking cups.
Again. this isn’t necessarily so. It could be that in order to avoid peaking plants, which are inevitably the least efficient in thermal terms and to conserve our hydro resources, perhaps as back up (and thus avoid redundant thermal hydrocarbon spinning reserve, that we would size plants to cover, in combination, the peak demand, which would mean we’d have a lot more spare capacity. We might get offpeak 12 or even 14 hours per day.
I asked:
Chris responded:
People do care about money, particularly if it’s perceived as their own. Other people’s money on the other hand, ranks a lot lower. The hysterical posturing by Abbott notwithstanding, most people care a lot less about lower taxes or budget surpluses than unemployment and poor government services. When the mining thugs ran against the RSPT they wailed about taxes not on the basis that they were evil, but that they would cost jobs and cause the mining thugs to take their exploitation elsewhere to people more willing to be ripped off. (OK they weren’t honest enough to put it quite like that).
There’s also no issue about spending $25-40bn on submarines because that’s defence. There’s no issue on spending billions locking up asylum seekers because that is an existential good, in the opinion of the mainstream. I heard that Australia was spending about $1bn each year keeping the troops in Afghanistan, but hardly anyone bothers about that.
The key issue then is not the money involved, but the politics attending its disbursement. If you can claim that something is an existential good, then the opposition will find it hard to oppose it. Saving the Murray-Darling and what rightwingers see as authentic Australia is going to be a tough one to oppose.
Stopping irrigation OTOH, is politically fraught because you can run the sort of campaign we see now against it. Of course, stopping irrigation can’t in itself save the MDB because we have no idea how climate change will play out.
Now personally, I very much support reducing demand upon the river system, ideally by forcing out marginal producers or rural value and restoring, so far as one cam, the pre-existing riparian ecology of the regions. Yet it would be an easier argument to make if one could guarantee that those who wanted to stay weren’t being left with a stranded asset — that if they were prepared to pay the cost, they could irrigate because we would ensure that the water was there.
If you’re right, and the water cost would simply be too great to make this viable even as a top up for rain, then plainly, nature would take its course and we’d not need to supply as much to the river. But the politics of this would work for the environment either way.
Prof fresh sand please .
@Erskine Goss
Sorry, I must say I think this is bunch of faff.
The striking thing about equities markets is the high correlation between stocks. You can protect against an individual stock going belly up, or a sector or industry performing poorly, by diversification, but you cannot protect against severe market downturns no matter how cleverly a long only portfolio is constructed. How do we know this? Because nobody has.
It is not too taxing to see how this is very different from the failure of a plant in an electricity grid. There is no “knock on” effect unless the grid is under provisioned to start with. Even in the event of design basis failure, investigation is likely to locate the cause and the possibility of similar failures averted by remedial action before they occur. This is hardy related in any way to cascading financial institution failures.
And while we are talking about risk assessment, the probability risk assessment for new Gen III+ nuclear power plants is of the order of 1 in 10^7 years of reactor operation for a core damage incident and an order of magnitude less for a large radiation release into the environment. They really are several orders of magnitude safer than the RMBK at Chernobyl, not to mention the fact that safety culture is MUCH improved in the countries of the former Soviet Union.
There’s a residual risk in just about anything. It’s a matter of quantifying it – something that financial markets and investors have been spectacularly bad at doing. Furthermore risk to investors capital is NOT the same thing as risks to the general well being. If investors risk assessment is in general not especially good when it comes to their own capital, it is essentially non-existent when it comes to the general well being. Free market fundamentalists (which I must assume you are by your choice of language) simply cannot comprehend this rudimentary fact.
If from an engineering and economic point of view nuclear power plants are the only realistic option for completely decarbonizing electricity supply, whether finance capital thinks so or not (or in fact cares a whit about CO2 emissions) at any particular point of time doesn’t change reality.
Such is the nature of risk, Quokka,
“risk assessment for new Gen III+ nuclear power plants is of the order of 1 in 10^7 years of reactor operation for a core damage incident ”
that where there is any possibility of failure what ever the odds, the failure has equal probability of occuring in the first operation as it does in the millionth.