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. @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.

  2. 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.

  3. @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.

  4. 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.

  5. 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.

  6. 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.

  7. 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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