Will there be buyers for Queensland’s uranium

Dumping yet another election promise, Campbell Newman has just announced the end of restrictions on uranium mining in Queensland. Crikey asked for my opinion (their article is here, maybe paywalled). I said

The end of Queensland’s ban on uranium mining comes at a time when long-term prospects for uranium markets have never looked bleaker. The failure of the “nuclear renaissance” in the US means that at most 2-4 new plants will be built there this decade, while older plants will close as plans for upgrades and license extensions are put on hold. In Europe and Japan, not only will there be little or no new construction, but the phaseout of existing plants is being accelerated. China’s big expansion plans are still on hold after Fukushima, and the program as a whole is being scaled back in favor of renewables. In these circumstances, uranium exporters must accept lower prices, be less choosy about their customers, or both. As one of the few markets with significant growth potential, India is in a strong bargaining position. It’s not surprising that the Gillard government has been keen to overlook India’s contribution to nuclear proliferation and the limited progress that has been made in separating civilian and military programs and stockplies.

134 thoughts on “Will there be buyers for Queensland’s uranium

  1. Quokka, you seem confused. If you look back at what I wrote you’ll see that I did not promulgate the theory that PV favours coal over nuclear. Instead I pointed out that solar competes with both coal and nuclear and I mentioned that solar helped eliminate baseload generation in South Australia. And that was coal baseload generation, not nuclear.

    I’ll try to explain myself clearly in point form:

    1. The cost of installing small scale solar PV in Germany is approaching $2 a watt. India has much lower labour costs and so will be able to install solar at a considerably lower price than Germany.

    2. Point of use solar is already becoming popular in India as a way to save on diesel for generators that are used during what are often daily power cuts. India could end most power cuts by greatly raising electricity prices, but is unlikely to do this and if they did it would reduce the amount of money solar saves on diesel but increase the amount of money solar saves on electricity bills.

    3. About 300 million Indians have no access to grid electricity and solar is often their only source of electricity. There is a massive market for solar power in India which will drive low cost installation.

    4. As solar capacity increases it will drive down the cost of electricity during the day as it has in Australia, Germany, Italy, Spain, etc. A 1% solar penetration is enough for this effect to be seen.

    5. As the price of electricity is driven down during the day, it will reduce the attractiveness of investing in powerplants that provide baseload power. These types of plants include nuclear plants.

    6. As a result, less nuclear plants will be built and there won’t be a large Indian market for Australian uranium.

    And I will mention that India has a large hydroelectric sector and hydroelectricity works very well in conjunction with wind and solar.

    In there anything you disagree with in the above points Quokka? For example, do you doubt that solar can be installed for $2 a watt or less in India? Or that solar lowers daytime electricity prices? Or that solar capacity is rapidly expanding in India? If you could challenge my thinking on specifics I would enjoy that.

  2. I bought a crappy solar/dynamo torch/radio from Aldi about three years ago.

    It can also run on batteries, but I have never put any in because the idea was to have a camping radio/emergency torch which didn’t need batteries.

    The old camping ‘trannie’ used about $5 of batteries every few months. I haven’t worked out what the power-point rechargeable batteries worked out at, but they cost a fair bit and obviously needed FF 240V to charge.

    The crappy solar radio cost about $30. It has only ever been charged from the sun (or very occasionally by winding the dynamo when the charge died late at night). By my rough reckoning we are already about $10 ahead and the thing is going strong.

    All it takes is a bit of planning so you leave the radio out in the sun for as long as possible.

  3. @Ronald Brak

    You seem to be under the delusion that India (or any other country) are going to persist with electricity market mechanisms that are guaranteed to ensure insecurity of supply. They will not. Capacity in an electricity market has economic value and there will without a shadow of a doubt be mechanisms that ensure payment for that. It’s not just about LCOE. Those mechanisms may be a capacity market or long term power purchase agreements or whatever, but it is absolutely guaranteed that there will be some such mechanisms. Watch what the UK does with it’s electricity market reforms.

    Security and stability of supply most definitely has an economic value and it will be priced.

  4. It is perfectly obvious to me that the “baseload myth” crowd have not comprehended the scale of the issues with intermittent renewables. Germany produces about 8% of it’s electricity from wind power. Already it is causing serious problems by dumping excess power from wind onto it’s central European neighbours and they are getting cranky about it, as it is threatening to cause blackouts:


    These problems will increase far faster than linearly with increasing intermittent generators. Solvable? Possibly, but at what cost and even more importantly, how long will it take. There is absolutely no question that it will slow the deployment of these technologies and an all renewable supply (other than with lots of hydro) is a pipe dream for the foreseeable future. It’s just not a realistic proposition. It would be well to consider the climate implications of that reality.

  5. @ Quokka

    The “renewables de-stablise the baseload grid!” lie is the Break Glass In Emergency “argument” of the fossil-nuke cabal.

    We even have a successful example in South Australia of high penetration wind power, up to 30% with plans to press on to 35%.

  6. Quokka, are you trying to say that solar in India will make their electricity supply less secure? A technology that people are installing precisely because electricity supply is not stable in India? How does solar make India’s electricity supply less secure? If Kumari Batachargee installs a solar PV system on her roof just how does that make India’s electricity supply less secure? Are you saying that solar power is not load following in India?

  7. Quokka, are you in Australia? I ask, because you write things that are directly contradicted by current Australian reality. You say that 8% wind penetration is a serious problem in Germany when South Australia gets about a third of its electricity from wind and solar. When the cost of intergrating wind power in South Australia is less than the reduction in electricity prices it has resulted in. When I am getting an 8.1% cut in my electricity bill starting next year here in South Australia thanks to wind and solar pushing electricity prices down. When South Australia’s electricity supply is now more secure and less likely to suffer summertime blackouts thanks to solar. And when South Australia’s hydroelectric capacity is a whopping big 1.9 megawatts. So I ask, just how does installing solar, an electricity source that is load following, make electricity supply less secure?

  8. @Ronald Brak

    PV is NOT load following – that is just absurd. SA is NOT Germany and SA is NOT India. Capacity factor of wind in SA is I believe. over 30%, in Germany just 18% and worldwide about 23%. PV in Germany has a capacity factor of what? About 11%. The lower the capacity factor the greater the problems. SA is a tiny market, relatively speaking, and with a tiny population density. Need I go?

  9. @Ronald Brak

    Not it is your argument that PV will make electricity generation less secure because a purported low LCOE will make it uneconomic to run reliable baseload plant of which the only realistic options are coal and nuclear. And I’m telling you that policy will not allow that situation to develop to an extent that it compromises security of supply because PV cannot deliver in that area.

    India has many problems with electricity supply, including shortage of baseload capacity, shortage of peaking capacity, grid deficiencies, widespread theft of electricity etc etc. India will move to improve matters and not rely on individuals to fire diesel generators or install PV when the lights go out. PV may well be a very useful tool to deal with higher daytime demand, but that does not mean that there will not be more coal and nuclear and it it pure fantasy to suggest otherwise. It is a classic case of people believing what they want to believe.

  10. So Quokka, are you saying that if solar power became very cheap, no one would build any generating capacity to supply electricity when the sun isn’t shining in India? That Indians would just sit in the dark saying, “If only solar power hadn’t become so cheap we would have electricity to watch Saathiya Saath Nibhana on TV, but because of solar’s low cost there is now no electricity after sundown.” That seems rather unlikely to me.

  11. Hitachi has bought the Horizon nuclear power sites in the UK. Looks like the UK will be getting some boiling water reactors, probably ABWRs. They are a large reactor. If the UK manages to get about 16 new large reactors built by the end of the 2020’s (which the Climate Change Committee described as “not challenging”), that combined with on and off shore wind may well see a genuinely low emission electricity supply by 2030. This is a very sensible policy, and one that I think will be closely watched internationally.

    I believe the full details of the electricity market reforms will be made public soon, including transparent nuclear costs.

  12. @ quokka

    “including transparent nuclear costs”

    That’s a joke right? EDF have been reported (Bloomberg) as asking for £100-140MWh. Now that Hitachi have arrived and the UK govt can likely play one off against the other they’re hoping to set the strike price at a rumoured £85MWh which will likely make the projects borderline. Even then £85MWh is ~175% of the current wholesale.

    That would already be dearer than wind, and will be dearer than est 2015 solar-PV (even in low CF UK).

    This is going to be massive failure by the denier Tories who have simultaneously worked to make renewable projects harder and gas access/use easier. Truely a superb example of the fossil-nuke cabal in action.

  13. @Pete Moran

    Those numbers were nothing other than pure speculation, and in fact categorically denied at the time by EDF.

    The UK Climate Change Committee’s “Renewable Energy Review”, drawing on multiple sources gave these figures:

    On-shore wind: 8.0-9.5 p/kWh
    Off-shore wind: 11.0-15.5 p/kWh
    PV: 31.5-46 p/kWh
    Nuclear: 6-10 p/kWh
    Unabated gas: 4-7.5 p/kWh

    On-shore wind: 7.5-9.0 p/kWh
    Off-shore wind: 11.0-15.5 p/kWh
    PV: 17.5-33 p/kWh
    Nuclear: 5.5-10 p/kWh
    Unabated gas: 5-11 p/kWh

    On-shore wind: 7.0-8.5 p/kWh
    Off-shore wind: 8.5-13.5 p/kWh
    PV: 11-25 p/kWh
    Nuclear: 5.0-10 p/kWh
    Unabated gas: 5-14 p/kWh

    It is not very honest to compare cost of new nuclear to current wholesale price of electricity without also comparing that of other technologies for new build.

    It is perfectly clear from the CCCs assessment that nuclear is likely to be competitively priced with only unabated gas being definitely cheaper – at this time.

    The CCCs figures are broadly in line with other authoritative sources, and endless repetition of memes about nuclear cost is not going to change that.

    We shall see shortly what the actual costs for Hinckley C are, and until such time, I place zero credence in politically motivated internet speculation.

  14. One hundred pounds per megawatt-hour would come to a wholesale price of 15.5 cents a kilowatt-hour. If they settle for 85 pounds per megawatt-hour that would come to about 13 cents a kilowatt-hour. That’s about what point of use solar now costs in Germany. How embarrassing! Looking at these figures it’s hard not to conclude that the nuclear industry is either unable to build a reactor that provides low cost electricity, or for some reason has decided not to.

  15. @Ronald Brak

    You are seriously claiming the CCCs figures demonstrate nuclear is “too expensive”? You have a bad dose of denial.

    As for point of use solar in Germany, get back to me when it generates as much low emission electricity as the nuclear capacity that has recklessly been shut down or is on death row.

    I an quite aware of the NREL LCOE calculator. Also on that page is a link to the transparent energy costs data base, go there and go to the LCOE tab. The numbers are similar to the CCCs. As are the IEA’s, the EIA’s DECC’s etc etc.

    It is quite plain to me that stopping nuclear power has a higher priority than avoiding dangerous climate change for some people. Time to be be honest, and stop the ridiculous claims about economics of nuclear power which are quite plainly shown to have little basis.

  16. @ Quokka

    “As for point of use solar in Germany, get back to me when it generates as much low emission electricity as the nuclear capacity….”

    Germany is on track to generate MORE electricity this year from PV than previously supplied by nuclear. The only argument you have is WHEN it is generated, not quantity.

    On that front, the Germans appear to be managing perfectly fine.

    “It is quite plain to me that stopping nuclear power has a higher priority than avoiding dangerous climate change for some people.”

    No, I don’t want to see money wasted on “too-cheap-to-meter” which is in an expensive terminal decline, distracting from community acceptable alternatives that have very broad support.

    (Sorry to jump in Ronald).

  17. @Ronald Brak

    Even using his own figures – the cost advantage for nuclear is not worth the risks.

    Sensible public policy would ensure that nuclear plants are banned.

    The reason there is so much frantic fervor for nukes is that a nuclear plant can monopolise energy production, and can be somewhat cheaper if long run impacts are excluded from consideration.

    So this should be the end of the line on this issue.

  18. Well yes, Chris, my arguement was that with the figures Quokka gave for the Kudamalam reactors nuclear will have a hard time competing with solar because solar will result in lower daytime electricity prices. Quokkas arguements against this so far appear to have been:

    1. Use an authorative source. This was after I had used figures he’s given.
    2. Solar will result in more coal use. This was after I had pointed out that solar competes with coal.
    3. Solar will decrease grid security. Apparently if solar is cheap Indians won’t bother to build any capacity to meet demand after the sun goes down. Personally I don’t think that this is the case.
    4. Baseload generating capacity is necessary but no explanation of why.
    5. Wind power apparently has something to do with solar not being competitive, but I’m afraid I don’t really understand his point.
    6. And finally I’m biased, which, since I used the figures he provided, suggests that Quokka is biased as well.

    So I can’t say that I’ve been convinced that solar won’t be competitive with nuclear in India. Some things that could convince me that the expansion of Indian nuclear will larger than I expect would be:

    1. Evidence that it is not possible to build cheap solar in India. But since India already has or had the cheapest installed solar in the world, this seems most unlikely.
    2. Lloydes of London or a similar reputable group agreeing to (partly) insure nuclear at a cost of around one cent a kilowatt-hour or less.
    3. Bill Gates or other wealthy individuals donating billions to build free Indian nuclear reactors.

  19. @Pete Moran

    Germany is on track to generate MORE electricity this year from PV than previously supplied by nuclear. The only argument you have is WHEN it is generated, not quantity.

    No it isn’t. You are just making stuff up. According to the IEA July Monthly Electricity Stats, the 2012 year to date figures were

    Nuclear: 51,975 GWh
    Solar, Wind, Geothermal, Other: 46,812 GWh

    And that with a large portion of nuclear capacity arbitrarily shut down. In 2010, nuclear generated 133,149 GWh.

    Wind generates at least twice as much electricity as PV in Germany.

    Your claim is wildly inaccurate.

  20. @ Quokka

    Yes, you are correct. I apologise. That was my poor translation from Fraunhofer Institute’s monthly reports (to Oct 2012).

    They say renewables (aided especially by continuing strong growth in PV installation) is on track to account for MORE gross electricity generation than the OPERATING nuclear capacity in 2012.

  21. Ronald Brak :
    Quokka, can you give us the names of some nuclear power plants built in developed countries in the last ten years and their cost?

    Why don’t you DYOR research for a change?

    Sth Korea is an OECD country. Their typical build time from first concrete to commercial operation is less than five years. IEA 2010 “Projected Cost of Generating Electricity” reported LCOE for OPR-1000 (Generation II design) as $32-48/kWh at 5% and 10% discount rates respectively. And for the APR-1400 (Generation III design) $29-42.

    How do they manage this? Building standardized designs backed by long term vision and policy.

  22. @Chris Warren

    Even using his own figures – the cost advantage for nuclear is not worth the risks.

    Thank you for stating an honest position. But consider why others are banging on about costs, rather than demonstrating a similar degree of honesty.

  23. So, doing my own research, I see that South Korean households now pay over 120 won per kilowatt-hour or about 11 cents Australian. I assume that South Korea will be able to install solar as cheaply as Germany and looking at South Korean capacity levels for solar and seeing that the cost of money to homeowners is about 5%, the cost of point of use solar in South Korea should be about 11 cents a kilowatt-hour. And I see it’s particularly useful as their peak demand is in the summer from 2 to 5 in the afternoon. So, it appears that point of use solar will be competitive in South Korea once they reach German installation costs. And as I’ve mentioned before, even a small amount of solar penetration pushes down electricity prices, which hurts the economics of baseload generating capacity.

  24. @Ronald Brak

    For the very last time – point of use solar is little more than a distraction from the main game which is to shut down coal. Why the obsession with it? Yes, there is a merit order effect with solar and no it does not drive the average cost of electricity. In Germany the renewables levy is about to increase to 5.2 euro cents/kWh – to support mostly solar and wind generating about 12% of Germany’s electricity. How can this possibly be construed as reducing electricity prices?

    The obsession with merit order effect of point of use solar seems to be indicative of a one trick pony. What else have you got? What happens when the suns not shining. It’s really desperate stuff.

    Sth Korea’s cabon intensity in electricity generation in 2009 was 489 gms C02/kWh – lower than Germany’s and will drop faster than Germany’s as their ambitious nuclear program comes to fruition. This is surely the point – not whether some consumers somewhere are getting cheaper peak power while paying more for average electricity costs.

  25. Ronald Brak :
    Quokka, nuclear power in Germany receives the wholesale price for electricity. It is the wholesale price that solar is pushing down.

    The retail renewables levy will now be more than the wholesale cost of electricity in Germany. How much more obvious can it be that whatever renewables are doing in Germany, it is not pushing the overall cost of electricity down – it is pushing it up. It may be arguable that is acceptable if the measures are effective in reducing emissions but that does need to be assessed by comparison with other options.

    It is plain that all this talk about merit order effect is extremely ill thought out. What happens when there is so much solar and wind on the grid that the market forces price to zero, or even negative as has occurred in the US due to tax credits effects. At northern latitudes, this is going to happen much sooner than may be thought. A solar capacity sufficient to supply 10% of Germany’s electricity would almost certainly do it. The economics of renewables are highly dependent on being paid for running at their maximum achievable load factor. This is the overbuild problem in action.

    I am always prepared to learn. In fact I enjoy it. However, it is perfectly obvious I have little to lean here as the discussion starts with an assumption that nuclear is evil, and the objective is to fire off as many debating points as possible, no matter how ill thought out and unsubstantiated. As an example, I am simply incredulous at the ridiculous spin on low nuclear LCOE costs for Sth Korea. They are low for new build of any technology. Get over it. Deal with the world as it is, not a reality morphed to suit ideology.

    There is a very worrying trend among some environmentalists and Green Parties to substitute ideology for science and repetition for rigor. Fred Pearce recently published a piece on this and although the stuff on DDT may be debatable , the rest is spot on. The reaction was self righteous and quite illuminating. There is also a frightening lack of humility, exhibited by the certitude of claims that nuclear is not necessary. Just how is this known with such certainty? Efforts to decarbonize energy supply have barely scratched the surface. There is simply no discernable effect on global emissions which just keep going up. But what little there has been is celebrated as some huge achievement because that’s what propaganda demands. Unfortunately the atmosphere don’t care.

    I was considering joining the Greens a couple years ago. They are a bitter disappointment though I remain on the left. I’m sure I’m not the only one coming to reach this conclusion.

  26. Quokka, you appear to be confused about the difference between wholesale and retail electricity prices and the role they play in influencing what type of generating capacity gets built. Wholesale prices are paid to generators to supply electricity to the grid. Retail prices are what customers pay. The retail price includes the wholesale price and distribution charges. As a result, retail prices are higher than wholesale prices.

    If the cost of solar electricity is higher than the wholesale price, but lower than the retail price then point of use solar capacity will be installed as it saves people money on their electricity bills. This point of use solar capacity reduces demand for grid electricity and so reduces the wholesale price as lower demand results in lower prices. Also, point of use solar supplies electricity to the grid at zero fuel cost, so it doesn’t matter how low the wholesale price gets, solar electricity will keep being supplied as long as it is available. In Australia, even if the wholesale price of electricity was zero it would still be cheaper to use point of use solar than grid electricity because of our high distribution costs.

    Baseload plants such as coal and nuclear are hit particularly hard by reduced wholesale electricity prices as they have low fuel costs and so don’t save much money by shutting down or reducing output on sunny days.

  27. The more nukes – the more intense the leakages.

    In America there were 38 leaks from underground piping between 2000 and 2009, according to an industry document presented at a tritium conference. Nearly two-thirds of the leaks were reported over the latest five years.

    Here are some examples:

    At the three-unit Browns Ferry complex in Alabama, a valve was mistakenly left open in a storage tank during modifications over the years. When the tank was filled in April 2010 about 1,000 gallons of tritium-laden water poured onto the ground at a concentration of 2 million picocuries per liter. In drinking water, that would be 100 times higher than the EPA health standard.

    At the LaSalle site west of Chicago, tritium-laden water was accidentally released from a storage tank in July 2010 at a concentration of 715,000 picocuries per liter — 36 times the EPA standard.

    The year before, 123,000 picocuries per liter were detected in a well near the turbine building at Peach Bottom west of Philadelphia — six times the drinking water standard.

    And in 2008, 7.5 million picocuries per liter leaked from underground piping at Quad Cities in western Illinois — 375 times the EPA limit.

    Earlier – Braidwood Nuclear Power Station in Braceville, Ill. Braidwood has leaked more than six million gallons of tritium-laden water in repeated leaks dating back to the 1990s — but not publicly reported until 2005.

    see: msnbc.msn.com/id/43475479/ns/us_news-environment/#.UJK431FOOT0

    So, assuming normal American commercial practice, the flow of tritium into the environment will only increase.

    And that is a good measure of the honesty of the nuclear lobby, repeated leaks not reported publicly until 2005.

    In this situation, only fools would support expansion of this rancid industry.

  28. I’ve just read that coal use in China in August was down 7% from the previous August. As in Australia, an important contributer to the decline in coal use has been the increase in solar and wind power capacity. This makes me think that China won’t be a large future market for Australian uranium either.

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