36 thoughts on “Sandpit

  1. My view on the flawed carbon tax is that it will bring the much needed reality check forward rather than endless more years of debate. The fact is we’ll need a 400% increase in non-hydro renewables between now and 2020 to achieve the 20% target. If, barring recession, we fail as almost certain to cut 160 Mt of CO2 by 2020 the proposal is to spend billions buying foreign offsets. Given the parlous state of the healthcare system that kind of spending seems unlikely. Therefore we are setting ourselves up to fail.

    Add to that the fact we are increasing exports of coal and liquefied gas at the very same time we are undergoing carbon penance at home. As Four Corners points out the Great Barrier Reef appears set to take a double hit from climate change and coastal development from new coal terminals. It is claimed that carbon tax will see coal fired generation replaced with gas. I think parts of Australia that have gas will build new gas fired plants but whether any coal plants are mothballed (eg Vic brown coal) is doubtful. At best I think we can expect minor efficiency gains from the carbon tax. Within a few years there will have to be a major review of what works and what doesn’t. Hopefully we’re getting there.

  2. Yes, our state of hypocrisy is marvelous; lip service with a puny, token carbon tax and full steam ahead on coal mines, gas mines, coal gasification and importing oil for all the SUVs on the road.

    Humans will not change until the laws of physics force them to change. Scarcity of carbon fuels and other resources is the only phenomenon which will slow the destruction of the holocene climate benignity.

  3. South Australia early 2005 – no significant amount of wind power.
    South Australia now – about 20% of electricity generated by wind.
    Hitting a 20% target is not that big a deal, especially now that the cost of PV has fallen so far.

  4. @Ronald Brak
    That SA windpower is counterbalanced by gas fired generation rather than electricity imports from interstate. However the two gas pipes that supply SA, from Moomba and Pt Campbell Vic will be running empty within 15 years. How useful will windpower be when that happens? In particular SA windpower fails to help in heatwaves when all the aircons go on. Of SA’s 1100 MW of nameplate windpower only some 5% or 55 MW can be relied on in hot weather.

    I wouldn’t hold my breath waiting for SA geothermal to provide reliable power. It was supposed to deliver two years ago then last year and so on.

  5. Hermit, you are asking what good is 20% of normal electricity supply compared to no electricity supply? Seriously?
    (By the way, SA as a whole has a lot more than 15 years worth of gas and the use of wind power has significantly reduced its consumption and extended supply, but I’m still gob smacked by the point I mentioned above.)

  6. @Ronald Brak
    44% of SA’s electricity supply comes from gas with the Torrens Island baseload station being Australia’s largest single gas user. Wind and gas absent hydro are highly complementary and live or die in tandem. The only way I see for SA to get an extension of time on gas is to connect Moomba to eastern Queensland coal seam gas. As we saw on Four Corners on Gladstone harbour development they seem to want all the gas for themselves. I think it may take Federal intervention to guarantee that gas supply. It would also have to be ‘world price’ not long term sweetheart deals.

    SA has a potentiallly staggering round the clock energy source but posting rules prohibit.

  7. This side of some serious developments in energy storage/buffering, non-hydro renewables are going to struggle to make a serious impact. There is some scope in demand management and I’ve seen it claimed that using surplus energy to lower the temperature of deep freezers to far below what is required for persishables and then letting them warm to the safety point might be a cost-effective way of managing the volatility of intermittents but I’m not sure how scaleable or even technically feasible that is. The idea of a very large e-vehicle fleet (and its demurred batteries) to use as buffering and cheap storage sounds plausible but again, we have almost zero capacity in that area right now.

    It does seem clear though that a reliance on intermittents means in practice locking in very significant fossil-thermal capacity — perhaps 1GW thermal to stand behind 1GW non-hydro renewables. If the HDR project and perhaps other geothermal can be had at accepatbale cost, then perhaps that (along with some pumped hydro, perhaps some waste biomass) might get us off fossil HC, but we are going to have to get a move on, sharpish.

  8. @Fran Barlow
    We could also beef up the peak power capacity of hydro without building any more dams. Just put more turbines in existing dams, and you have a whole heap more load-following ability. This is the perfect complement to wind and solar. Also, 24 hour solar thermal is interesting, but costs aren’t declining as fast as other technologies.

  9. The idea of a very large e-vehicle fleet (and its demurred batteries) to use as buffering and cheap storage sounds plausible but again, we have almost zero capacity in that area right now.

    That would play havoc with the terms of battery warranties.

  10. Just having large e-vehicle fleet and charging it when power demand is lesser, overnight, would provide such buffer and cheap storage. No need to use it as a buffer additionally to have such effect, or do you think Fran thought of using car battery charge to power house appliance? 🙂

  11. John,

    I am keen to hear your thoughts, or anyone elses, on the current debate in the US (primarily in the blogosphere) about NGDP targeting. It seems to have some support and critics on both sides? The most vocal supporter of course is Scott Sumner

  12. @critical tinkerer

    At least some of the possible models of e-vehicle usage — (e.g. Better Place) presume battery swap stations (to facilitate quick turn around. In this situation, whole bank of batteries would be sitting in various states of charge (in addition to those connected to the grid and charging in various carparks).

    If, for example, we had 500,000 e-vehicles, one would presumably have sufficient stored capacity for at least 1.25 million vehicles so that’s a lot of potential storage. If the cost of batteries declines then at least some people with PV on their rooves could store their excess there as well. Imagine vehicles parked at work and connected to the grid. If they are fully charged and on one of those 17 days when there’s a heat-related peak you could draw down very significant power from the fleet as a whole without affecting the functionality of the vehicles since

    a) each vehicle wouldn’t need to surrender much capacity
    b) once the peak passed they could begin redrawing power
    c) most people wouldn’t need more than what was needed to drive their cars home and if they did they could specify their vehicle not to be drawn down.

    If the batteries were all leased then the actual battery life would be a factor in the lease costs. Alternatively, if the person is merely paying for the power used, it would go into the power costs. A person who recharges their car from a home PV still gets the advantage because the residual power in the battery pack comes off usage when they swap. If they recharge during the off-peak and sell during the peak they might make a profit on the deal.

  13. Imagine if it was fashionable to regulate the banks locally, and in the way that we used to back in the 60’s? We could stop the wealth-drain these guys have been creating since the early seventies, and even more-so since the mid-80’s. You see we could force their loanable funds, to be going almost exclusively to cap-ex expenditure, and mostly on cap-ex for business startups, small and medium-sized businesses.

    When I was a young fellow if you knew the banker he’d extend an over draught, as a sort of friendship thing, but he’d try and persuade you to get by with less. In the Southern Hemisphere, well Australasia at least, we had really benevolent bankers. Its so hard to understand that now. The trading banks would create a bit of new money through the chequebook system. But this was just greasing the wheels of trade and paying for their services. The savings banks, would invest your savings locally to build up local businesses.

    Its the allocation of capital that creates wealth and this wealth would wind up in local small business hands, they’d employ people. and considering where technology was at that time we were astonishingly well-off. One bloke could look after his lady and three toddlers, on a starter wage, and be paying off his house. Idyllic by todays standards, and really all about the soundness with which banks then allocated funds. The savings banks had very little money creation capacity.

    Now supposing we came down on consumer finance. Corporate finance too. Margin loans. Pretty much anything that wasn’t directed on buying something to increase production. Well then the new money creation wouldn’t be all that bad. Whenever you have loanable funds going to non-cap-ex spending it will simply blow out the cost of those things that are being borrowed for.

    We see the way the Northern Hemisphere banks have those societies by the throat. In our part of the world, on strictly utilitarian grounds, we ought to reverse that metric before its too late. We ought to take our banks, clip their wings, wrestle them too the ground, hog-tie them, and see to it, that we are the boss and they are exemplar’s of loanable funds allocation.

  14. Hermit, if South Australia suddenly lost all its natural gas supply today, do you think South Australia would be better off if it didn’t have any wind capacity?

  15. @Fran Barlow
    And if you were going to sell energy to the grid from your car, you’d make sure the price differential was high enough to offset any capital depreciation from shortening the battery life.

  16. Looks like we are well ahead of schedule for catastrophic climate change. News updates on that front are nothing but bad. But our denial buddies will continue to claim all just a coincidence, just natural variability. The NYTimes has a nice cartoon that can be sent to wish deniers the “Season’s Greetings”.

  17. @Ronald Brak
    The wind farms would be less useful if possibly expensive interstate electricity imports were needed to iron out the fluctuations. Some 40-60% of electricity demand is steady and that needs reliable supply. SA needs a major new source of base load power to replace that currently met by Leigh Creek coal and Cooper Basin gas both of which are dwindling fast. That’s just to replace existing generation but new capacity will be needed for projects like the Olympic Dam expansion.

  18. Hermit, thanks for your reply. I am trying to work out if you think wind power is useful in South Australia without gas. So, do you think South Australia would be better off without any wind capacity if its gas supply was cut off today?

  19. @Hermit

    SA needs a major new source of base load power … {my emphasis}

    It’s something of a minor point, but I think it’s time we stopped ignoring people using “baseload” in this way. This refers to the typical and continuous demand for power from a power distribution region. Baseload plants are plants capable of meeting this continuous demand (which is doubtless why in many minds it is associated with fully despatchable power plants).

    The distinction is important though. By way of comparison, the scheduled network of public transport could be seen as a baseload transport system, but it is not fully despatchable. It cannot be ramped up if demand rises too rapidly, nor can it be ramped back suddenly if demand in one region declines. If for example, a train line is rendered inoperable due to a tree falling on power lines, replacement buses can’t be despatched in real time to cover the outage. Having once worked as a bus driver, I can attest that there is very little redundant capacity in the system. The baseload transport system however works at low cost, fairly predictably and is maintainable. That, rather than flexibility, is its strength. Buses can, by analogy with power plants be seen as having some load following capacity. They still aren’t fully despatchable though. You still need to call in drivers and get them to where they are needed. Like load following plants, they are a more expensive way of meeting volatile demand and cost more per usage unit to maintain and their flexibility comes at the expence of capacity factor. The closest thing we have to peaking transport, is probably taxis. These are very expensive and very responsive. The closest thing we have to deal with peak demand is hydro or OCGT gas plants.

    Most of the plants used to meet baseload demand are more despatchable than most non-hydro renewables (biomass or geothermal plant might be exceptions) and this adds to the confusion, yet we should choose our words carefully. What most industrial centres need is highly available power along with a mix of other capacity with varying levels of greater despatchability.

    If there were cost and technically effective ways of making the output of volatile energy harvest technologies more despatchable then fairly obviously, sources like wind and solar PV would immediately become a lot more relatively valuable (as would wave and tidal).

  20. From the closed thread:

    “Try not to patronise me Jarrah”

    Julie, I wasn’t. Your arguments clearly showed that the conceptual category you place “the market” in was that of something separate from humanity, and that advocacy of market mechanisms is to reject the simultaneous operation of non-market systems for problem-solving. It’s a common mistake among leftists.

  21. @Fran Barlow

    Interesting analogy. It is worth adding that nuclear power plants can be built to provide base power and highly dispatchable power. The best of both worlds. Some of the physics of the molten core in an LFTR tend to make it an almost automatic load following power source.

  22. These kinds of conversations all seem a bit useless without numbers. What are all the costs of various technologies? How much money would we have to spend to make a grid “smart” and how much extra “load-following demand” would we get? What is the average yearly downtime of a 24 hr solar thermal plant, and how does it compare to that of gas or coal? How feasible is it to ramp up the variable capacity of existing hydro dams? What about load-following geothermal? Without some serious engineering stats we’re all just chasing our tails.

    I will however, add to the problem by saying something subjective myself. Right now in Australia, peak power consumption every year always comes when it’s hot and sunny. In other words, peak power demand when it’s not hot and sunny is much lower than absolute peak power. Right now we have enough non-solar power to meet peak demand even when it is sunny. This means it will be a long time before we need to add new capacity that meets demand when the sun is not shining. Solar can provide all the required increase in peak capacity for a long time to come.

  23. John

    After various hairy chested statements on bringing the budget into surplus by 2012 which is now being threatened by international and domestic ‘weakening’ our treasurer is proposing to bring in a mini-budget to slash spending (by finding various ‘efficiencies’ no doubt). Really, the hairy chested statements are best left to the hairy chested, whose constant “No, No, NO” negativity the public are beginning to sicken of anyway.

    I suggest that now would be a good time for prominent economists like yourself to point out once again that now is not the time for an austerity budget particularly in Australia. Maybe another open letter signed by prominent economists would be good? If balancing the budget by 2012 is so crucial (even though we know it is not) increasing taxes on those whose marginal propensity to spend is least, that would be the better off, would be preferable to slashing expenditure. Or increase expenditure and increase taxes on the rich better still.

  24. Dan, I went off on a tangent in another thread and mentioned a red beard who wanted to execute prisoners. (And I do think of him as a red beard. No hair on top with a man dangling out of the bottom of the beard.) I think his problem was simply a normal type of human thinking carried too far. A lot of people like to watch sports and support a team and they will support their team and consider it to be the best and regard the opposing team as terrible, completly regardless of what the actual evidence maybe. And for the most part this kind of thinking is all fine and harmless when it is confined to sports or online computer games, but it tends to become counter productive when applied to all aspects of life.

    I think red beard thought that if someone commits a crime and ends up in prison then they are no longer part of team Lawful Society and therefore must be on an opposing team – Team Evil. When I said I didn’t approve of executing them he decided I must be part of the opossing team and therefore I must be pro rape, pro murder and pro car theft. When I explained that I wasn’t pro these things and actually against them, he seemed genuinely surprised and I guess he put me in a strange new category. I got the feeling I had expanded his horizons.

    I didn’t change his opinon, but on the bright side, while I’m sure red beard has the power to vote, I’m pretty sure he isn’t a member of Parliment or Prime Minister. I don’t even think he’s a shadow minister.

  25. TerjeP, while it is technically possible to build a nuclear power plant to provide peak power, it is not at all economically possible. Electricity from a nuclear plant that operates half the time costs roughly 95% as much as power from a nuclear plant that runs all the time.

    If you are talking about using the molten salt in the primary loop for thermal storage that’s a trick that isn’t limited to nuclear plants. And it should be cheaper outside of a nuclear plant because the precautions required for dealing with a radioactive medium are unnecessary. Gas, coal, biomass and thermal solar could all be used for thermal storage and could potentially be more efficient than nuclear by operating at a higher temperature. Even electricity from wind turbines could be used to heat a medium, although the opportunity cost of using electricity from wind would normally be higher than using heat, unless the wind was blowing hard and demand was low.

  26. Sam, red beard is just a beard I met. I believe there was a person inside it, but I could have been mistaken. That’s not much I can tell you about him that I haven’t mentioned above. He was red and bushy and wanted to execute prisoners.

  27. Do grown-ups (even lorn-order ones) actually reason like that? Very glad that I move in different circles, or so it seems.

  28. I think people who think like that aren’t that rare, Dan. It does seem to be a natural ground state of humanity that requires at least some slightly enlightened self interest to overcome. That’s why people say things to children like, “Think about other people once and a while,” instead of, “Stab the non-believers!”

  29. Jarrah back at #21 Ok, if you say so. Still I think it was a ‘quibble’ but that’s what you lawyer types like to do. 🙂

  30. @Ronald Brak

    TerjeP, while it is technically possible to build a nuclear power plant to provide peak power, it is not at all economically possible. Electricity from a nuclear plant that operates half the time costs roughly 95% as much as power from a nuclear plant that runs all the time.

    So what you’re saying is that provided that running the nuclear power plant at capacity all the time is itself not that expensive for peak power, all we need to do is to find some other valuable use for the surplus power to get it at a marginal cost of about 5%.

    Ok, so maybe off-peak power users aren’t willing to pay 95% of peak price, but there are tasks that could run during the off-peak — recharging electric cars, pumping water, doing desal, and so forth that could keep the plants occupied. The key question is whether the plant is able to sell power for a high enough price during the peak to ignore the losses during the off-peak.

  31. Fran, in answer to your question, can an *ahem* plant sitting mostly idle make enough money supplying peak power to ignore its losses during periods of low demand: No it can’t.

    What you suggest above applies just as well to a coal plant as to an *ahem* plant. They are both high capital, low fuel cost methods of generating electricity. (The marginal cost of coal to a power plant in Australia is often only a few dollars a tonne.) You may have noticed that we try to avoid having coal plants operate at below their normal capacity for any appreciable length of time because it is generally cheaper to use gas and/or hydroelectricity where they are available to provide peak power rather than to build coal plants that lie idle for much of the time.

    So if coal power plants can’t manage it, then much more expensive *ahem* plants can’t.

    (And I’m getting deja vu. I explained exactly this same point to some bald guy ages ago.)

    And it really doesn’t makes sense to consider building an *ahem* plant to meet peak demand now that load following point of use solar is so much cheaper than *ahem*. It is obvious that the generating capacity that is both cheaper and more closely matches demand is the better choice. (And this does’t mean that something else such as natural gas may currently be cheaper still.)

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