The Moral Case for Fossil Fuels

[Barrister]

And here comes Minsky with his usual anti-free market retoric.

A>B is a mathematical relation, not rhetoric.

A+B however was pure rhetoric.

I guess a joke that revolved around knowing the principals of Social Credit ideology was a bit too obscure even for languish.

[CountDeMoney]

EIA
http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

Levelized cost of electricity (LCOE) is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-kilowatthour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle. Key inputs to calculating LCOE include capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs, financing costs, and an assumed utilization rate for each plant type.3 The importance of the factors varies among the technologies. For technologies such as solar and wind generation that have no fuel costs and relatively small variable O&M costs, LCOE changes in rough proportion to the estimated capital cost of generation capacity. For technologies with significant fuel cost, both fuel cost and overnight cost estimates significantly affect LCOE. The availability of various incentives, including state or federal tax credits, can also impact the calculation of LCOE. As with any projection, there is uncertainty about all of these factors and their values can vary regionally and across time as technologies evolve and fuel prices change.

Forecasted LCOE? For 2019?  So in other words, "Magic 8 Ball says, 'Cannot predict now'."   

And even with the higher fixed O&M for nukes, it's  is still better deal with the Variable O&M compared to fossils (gas + coal).  Not to mention how many Katrinas we could have between now and 2019 that would blow those projections all to hell anyway, while nuclear power just hums right along, all nice and warm.

[Berkut]

You can't hug a child with nuclear arms.

[The Minsky Moment]

Forecasted LCOE? For 2019?  So in other words, "Magic 8 Ball says, 'Cannot predict now'."   

It's 2019 because it assumes new build.  If you start a nuclear project now, completion by 2019 would be splendid achievement.

There is an element of estimation but that does not work in favor of nuclear at all.  On the contrary, because combined cycle gas is now so common, construct costs can be estimated fairly accurately.  But nuclear is a lot more risky.  Right now there are two significant nuke construction projects, and both have suffered significant delays (1 yr) and overruns (around $1 billion or so each).  And both have a good deal more time to go.

And even with the higher fixed O&M for nukes, it's  is still better deal with the Variable O&M compared to fossils (gas + coal).  Not to mention how many Katrinas we could have between now and 2019 that would blow those projections all to hell anyway, while nuclear power just hums right along, all nice and warm.

OA&M doesn't include fuel costs - that is separate.  OA&M is pretty cheap and predictable for gas.

[CountDeMoney]

OA&M doesn't include fuel costs - that is separate.  OA&M is pretty cheap and predictable for gas.

So, where the "Variable O&M (including fuel)" for Advanced Combined Cycle, Natural-Gas Fired is $45.5 per MWh and the "Variable O&M (including fuel)" for Advanced Nuclear is $11.1 per MWh in 2012 dollars, it should really say "Not Variable O&M (including fuel)"?     

[The Minsky Moment]

OA&M doesn't include fuel costs - that is separate.  OA&M is pretty cheap and predictable for gas.

So, where the "Variable O&M (including fuel)" for Advanced Combined Cycle, Natural-Gas Fired is $45.5 per MWh and the "Variable O&M (including fuel)" for Advanced Nuclear is $11.1 per MWh in 2012 dollars, it should really say "Not Variable O&M (including fuel)"?   

Fixed O&M is the one I referred to above.
The one cost advantage nuke has is fuel costs.  Assuming uranium stays cheap.  And assuming the US gov't can figure out a way to make the nimbys go yucca themselves for disposal.

But from the POV of an investor, that big capital hit up front is a killer.  And just as big is the very long lead time before completion.  That is lots of time with a big negative number carrying interest and lots of time before any revenue flows in.  It is the antithesis of the usual investment model for these kinds of projects where the goal is to get the revenue flow ASAP.

Practically what it means is you want nuclear you either need a state backed entity or some real carbon taxation.

[dps]

The premise is ridiculous.  Fossil fuels are an instrumentality.  You can't make a moral case for them any more than you can make a moral case for ball bearings or concrete.  The question is simply cost and benefit. 

Yeah, that's true.  The point that "M]ore energy means more ability to improve our lives; less energy means less ability—more helplessness, more suffering, and more death" is basically correct--the standard of living of a society is largely a function of its energy usage--use more energy per capita, and you can provide people with a higher standard of living.  And I think most of us would agree that providing people with a higher standard of living is a desirable goal.  But the source of that energy is mostly a technical, not moral, issue.

[Martinus]

The premise is ridiculous.  Fossil fuels are an instrumentality.  You can't make a moral case for them any more than you can make a moral case for ball bearings or concrete.  The question is simply cost and benefit. 

Yeah, that's true.  The point that "M]ore energy means more ability to improve our lives; less energy means less ability—more helplessness, more suffering, and more death" is basically correct--the standard of living of a society is largely a function of its energy usage--use more energy per capita, and you can provide people with a higher standard of living.  And I think most of us would agree that providing people with a higher standard of living is a desirable goal.  But the source of that energy is mostly a technical, not moral, issue.

I don't think "the source of energy" is a technical issue. What if you fuel your power plant with puppies?

[Viking]

The premise is ridiculous.  Fossil fuels are an instrumentality.  You can't make a moral case for them any more than you can make a moral case for ball bearings or concrete.  The question is simply cost and benefit. 

Yeah, that's true.  The point that "M]ore energy means more ability to improve our lives; less energy means less ability—more helplessness, more suffering, and more death" is basically correct--the standard of living of a society is largely a function of its energy usage--use more energy per capita, and you can provide people with a higher standard of living.  And I think most of us would agree that providing people with a higher standard of living is a desirable goal.  But the source of that energy is mostly a technical, not moral, issue.

I don't think "the source of energy" is a technical issue. What if you fuel your power plant with puppies?

?

[jimmy olsen]

Coal is dead.

http://www.theguardian.com/commentisfree/2014/jul/07/solar-has-won-even-if-coal-were-free-to-burn-power-stations-couldnt-compete

Solar has won. Even if coal were free to burn, power stations couldn't compete

As early as 2018, solar could be economically viable to power big cities. By 2040 over half of all electricity may be generated in the same place it's used. Centralised, coal-fired power is over

    Giles Parkinson   
    theguardian.com, Monday 7 July 2014 02.53 BST   
    Jump to comments (1129)

Last week, for the first time in memory, the wholesale price of electricity in Queensland fell into negative territory – in the middle of the day.

For several days the price, normally around $40-$50 a megawatt hour, hovered in and around zero. Prices were deflated throughout the week, largely because of the influence of one of the newest, biggest power stations in the state – rooftop solar.

"Negative pricing" moves, as they are known, are not uncommon. But they are only supposed to happen at night, when most of the population is mostly asleep, demand is down, and operators of coal fired generators are reluctant to switch off. So they pay others to pick up their output.

That's not supposed to happen at lunchtime. Daytime prices are supposed to reflect higher demand, when people are awake, office building are in use, factories are in production. That's when fossil fuel generators would normally be making most of their money.

The influx of rooftop solar has turned this model on its head. There is 1,100MW of it on more than 350,000 buildings in Queensland alone (3,400MW on 1.2m buildings across the country). It is producing electricity just at the time that coal generators used to make hay (while the sun shines).

The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year. State-owned generators like Stanwell are specifically blaming rooftop solar.

Tony Abbott, the prime minister, likes to say that Australia is a land of cheap energy and he's half right. It doesn't cost much to shovel a tonne of coal into a boiler and generate steam and put that into a turbine to generate electricity.

The problem for Australian consumers (and voters) comes in the cost of delivery of those electrons – through the transmission and distribution networks, and from retail costs and taxes.

This is the cost which is driving households to take up rooftop solar, in such proportions that the level of rooftop solar is forecast by the government's own modellers, and by private groups such as Bloomberg New Energy Finance, to rise sixfold over the next decade. Households are tipped to spend up to $30bn on rooftop modules.

Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.

The impact on Queensland's markets last week is one of the reasons why utilities, generators and electricity retailers in particular want to slow down the rollout of solar.

The gyrations of wholesale power prices are rarely reflected in consumer power bills. But let's imagine that the wholesale price of electricity fell to zero and stayed there, and that the benefits were passed on to consumers. In effect, that coal-fired energy suddenly became free. Could it then compete with rooftop solar?

The answer is no. Just the network charges and the retailer charges alone add up to more than 19c/kWh, according to estimates by the Australian energy market commissioner. According to industry estimates, solar ranges from 12c/kWh to 18c/kWh, depending on solar resources of the area, Those costs are forecast to come down even further, to around 10c/kWh and lower.

Coal, of course, will never be free. And the rapid uptake of rooftop solar – dubbed the democratisation of energy – is raising the biggest challenge to the centralised model of generation since electricity systems were established more than a century ago.

Network operators in Queensland, realising the pent up demand for rooftop solar, are now allowing customers to install as much as they want, on the condition that they don't export surplus electricity back to the grid.

Households and businesses have little incentive to export excess power. They don't get paid much for it anyway. Ergon Energy admits that this will likely encourage households to install battery storage.

The next step, of course, is for those households and businesses to disconnect entirely from the grid. In remote and regional areas, that might make sense, because the cost of delivery is expensive and in states such as Queensland and WA is massively cross-subsidised by city consumers.

The truly scary prospect for coal generators, however, is that this equation will become economically viable in the big cities. Investment bank UBS says this could happen as early as 2018.

The CSIRO, in its Future Grid report, says that more than half of electricity by 2040 may be generated, and stored, by "prosumers" at the point of consumption. But they warn that unless the incumbent utilities can adapt their business models to embrace this change, then 40% of consumers will quit the grid.

Even if the network operators and retailers do learn how to compete – from telecommunication companies, data and software specialists like Google and Apple, and energy management experts – it is not clear how centralised, fossil-fuel generation can adapt. In an energy democracy, even free coal has no value.

[Martinus]

Supporters of solar energy seem to believe that availability of solar power is the same across the globe. 

[Viking]

no, solar is not a replacement for baseline electricity generation, even if it were cheaper, it would not work for the simple reason that it varies with weather and it is very very very difficult to store.

If coal is dead then Shale Gas killed it.

[Martinus]

I just love how Greens constantly use Fukushima as an argument against building nuclear plants in Europe. Idiots or populists?

[Martinus]

no, solar is not a replacement for baseline electricity generation, even if it were cheaper, it would not work for the simple reason that it varies with weather and it is very very very difficult to store.

If coal is dead then Shale Gas killed it.

Yeah that's what I said in the post right before yours.

Energy is the main reason I am so reluctant to vote for Green parties. Especially in Europe, they are playing right into the hands of Putin.

[grumbler]

Coal is dead.

http://www.theguardian.com/commentisfree/2014/jul/07/solar-has-won-even-if-coal-were-free-to-burn-power-stations-couldnt-compete

Solar has won. Even if coal were free to burn, power stations couldn't compete

As early as 2018, solar could be economically viable to power big cities. By 2040 over half of all electricity may be generated in the same place it's used. Centralised, coal-fired power is over

    Giles Parkinson   
    theguardian.com, Monday 7 July 2014 02.53 BST   
    Jump to comments (1129)

Last week, for the first time in memory, the wholesale price of electricity in Queensland fell into negative territory – in the middle of the day.

For several days the price, normally around $40-$50 a megawatt hour, hovered in and around zero. Prices were deflated throughout the week, largely because of the influence of one of the newest, biggest power stations in the state – rooftop solar.

"Negative pricing" moves, as they are known, are not uncommon. But they are only supposed to happen at night, when most of the population is mostly asleep, demand is down, and operators of coal fired generators are reluctant to switch off. So they pay others to pick up their output.

That's not supposed to happen at lunchtime. Daytime prices are supposed to reflect higher demand, when people are awake, office building are in use, factories are in production. That's when fossil fuel generators would normally be making most of their money.

The influx of rooftop solar has turned this model on its head. There is 1,100MW of it on more than 350,000 buildings in Queensland alone (3,400MW on 1.2m buildings across the country). It is producing electricity just at the time that coal generators used to make hay (while the sun shines).

The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year. State-owned generators like Stanwell are specifically blaming rooftop solar.

Tony Abbott, the prime minister, likes to say that Australia is a land of cheap energy and he's half right. It doesn't cost much to shovel a tonne of coal into a boiler and generate steam and put that into a turbine to generate electricity.

The problem for Australian consumers (and voters) comes in the cost of delivery of those electrons – through the transmission and distribution networks, and from retail costs and taxes.

This is the cost which is driving households to take up rooftop solar, in such proportions that the level of rooftop solar is forecast by the government's own modellers, and by private groups such as Bloomberg New Energy Finance, to rise sixfold over the next decade. Households are tipped to spend up to $30bn on rooftop modules.

Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.

The impact on Queensland's markets last week is one of the reasons why utilities, generators and electricity retailers in particular want to slow down the rollout of solar.

The gyrations of wholesale power prices are rarely reflected in consumer power bills. But let's imagine that the wholesale price of electricity fell to zero and stayed there, and that the benefits were passed on to consumers. In effect, that coal-fired energy suddenly became free. Could it then compete with rooftop solar?

The answer is no. Just the network charges and the retailer charges alone add up to more than 19c/kWh, according to estimates by the Australian energy market commissioner. According to industry estimates, solar ranges from 12c/kWh to 18c/kWh, depending on solar resources of the area, Those costs are forecast to come down even further, to around 10c/kWh and lower.

Coal, of course, will never be free. And the rapid uptake of rooftop solar – dubbed the democratisation of energy – is raising the biggest challenge to the centralised model of generation since electricity systems were established more than a century ago.

Network operators in Queensland, realising the pent up demand for rooftop solar, are now allowing customers to install as much as they want, on the condition that they don't export surplus electricity back to the grid.

Households and businesses have little incentive to export excess power. They don't get paid much for it anyway. Ergon Energy admits that this will likely encourage households to install battery storage.

The next step, of course, is for those households and businesses to disconnect entirely from the grid. In remote and regional areas, that might make sense, because the cost of delivery is expensive and in states such as Queensland and WA is massively cross-subsidised by city consumers.

The truly scary prospect for coal generators, however, is that this equation will become economically viable in the big cities. Investment bank UBS says this could happen as early as 2018.

The CSIRO, in its Future Grid report, says that more than half of electricity by 2040 may be generated, and stored, by "prosumers" at the point of consumption. But they warn that unless the incumbent utilities can adapt their business models to embrace this change, then 40% of consumers will quit the grid.

Even if the network operators and retailers do learn how to compete – from telecommunication companies, data and software specialists like Google and Apple, and energy management experts – it is not clear how centralised, fossil-fuel generation can adapt. In an energy democracy, even free coal has no value.

You resurrected an article thoroughly discussed when it came out in order to justify making a stupid assertion?  Well-done,  Not even you can out-Timmay you.