Off-piste

When my information changes, I change my mind. What do you do?

In an ideal world, evidence will lead conclusions. So when evidence is updated in, as a good example, a peer-reviewed article, the conclusions will consequently change.

But conclusions often lead the evidence instead. This was obvious in the case of the retraction of a paper asserting that European countries that support nuclear energy in their supply mixes achieve less for the global climate. Upon serious review, the weight of the authors’ evidence actually indicated a contrary, but apparently unwelcome conclusion. Of course, by this stage the paper had generated headlines.

Falsehood flies, and the truth comes limping after it.

The most recent major work of Mark Jacobson’s group at Stanford, offering a vision of entire nations perfectly well supplied in energy exclusively  from solar, wind and water based technologies, also came up short following careful, serious and painstaking review. In a dark turn completely outside the peer-review process, Jacobson now intends court action against the journal and the lead author of the critique.

 

A good summary has already been provided by Keith Pickering, and another by Alex Berezow.

Bulls do not win bull fights. People do. People do not win people fights. Lawyers do.

Here are many of the relevant resources for the context of this case, gathered in one place for convenience:

The 2015 paper proposing the “Low-cost solution to the grid reliability problem with 100% penetration of intermittent wind, water, and solar for all purposes”

A paper by Loftus and co-workers which included Jacobson’s work as one of the outliers among a number of studies with questionable levels of detail and feasibility

A 2017 review of many “100% Renewable Energy” scenarios, including Jacobson’s work, using simple feasibility criteria

A related literature review from the Energy Innovation Reform Project

The “Clack et al.” formal literature critique of the Jacobson Group scenario

Jacobson’s response in the same journal, and as a blog at EcoWatch

Clack and co-authors’ dissection of Jacobson’s response

Context and commentary at Brookings.edu

Follow-up work by Jacobson, featuring the abrupt need for 4 billion kilowatts of output capacity from battery storage

 

 

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Traction

With the number of grass-roots pro-nuclear energy voices these days reaching critical mass, the volume of evidence-based nuclear-inclusive analysis rapidly expanding, and the specific cause of this blog – the removal of Australia’s unjustifiable nuclear energy prohibition – being taken up by organisations like The Minerals Council Uranium Forum, I’ll be focusing a lot less on updates and analysis. So I’d like to leave, for now, with a collection of authoritative and indispensible resources to help continue the spread of awareness around the issue of climate-friendly nuclear energy, the residual myths clinging to it and the stubborn opposition it unfortunately still faces.

Science Update: Hiroshima and Nagasaki
Paul Willis is Associate Professor of palaeontology at Flinders University

The report and wide-ranging resources of the South Australian Nuclear Fuel Cycle Royal Commission

Nuclear medicine comes from nuclear reactors
Dr Geoff Currie is Associate Professor in medical radiation science at Charles Sturt University and Clinical Professor of molecular imaging at Macquarie University

China-U.S. cooperation to advance nuclear power: mass-manufacturing and coordinated approvals are key
Cao, Cohen, Hansen, Lester, Peterson and Xu, 2016, and their response to anti-nuclear critics.

Did you really come from Fukushima?
Ryugo Hayano is Professor of physics at Tokyo University

Fear is a killer: Nuclear expert reveals radiation’s real danger
Experience in Nagasaki, Chernobyl and Fukushima has taught Shunichi Yamashita that anxiety and disruption can hurt people far worse than radiation itself
Shunichi Yamashita is vice-president of Nagasaki University and radiation health management adviser for Fukushima Prefecture

 

Culture of safety can make or break nuclear power plants
The safe shutdown of Onagawa Nuclear Power Plant, with the 2014 Nuclear Technology journal article here

The fantasy of quick and easy renewable energy
The Brookings Institution is a highly-regarded, non-partisan US research group

Related critical analysis in the literature of various “100% renewable energy” propositions can be examined in this article: Burden of proof: A comprehensive review of the feasibility of 100% renewable-electricity systems

An effective response to climate change demands rapid replacement of fossil carbon energy sources. This must occur concurrently with an ongoing rise in total global energy consumption. While many modelled scenarios have been published claiming to show that a 100% renewable electricity system is achievable, there is no empirical or historical evidence that demonstrates that such systems are in fact feasible.

Ben Heard is an Australian environmentalist, PhD candidate at the University of Adelaide and founder of Bright New World

How renewable energy advocates are hurting the climate cause
Paul McDivitt is a science and environmental writer with a master’s degree in journalism and mass communication from the University of Colorado Boulder

Baseload capacity – which nuclear energy opponents variously denounce as mythical, irrelevant or unnecessary – operates in modern national supply systems such as these to affordably and consistently ensure low-emissions electricity. Be wary of what truly motivates anyone who would discard this proven model of supply. Sources: Electricity Map, France, Belgium, Sweden, Ontario.

Excerpts from Climate Gamble
by a talented pair of independent Finnish environmentalists. Insisting both on serious climate action and excluding nuclear energy is, fundamentally, a gamble with the global climate.


Michael Shellenberger is an American environmentalist and author, and founder of Environmental Progress

 

Shining Sun, Blowing Wind

…when the sun doesn’t shine and the wind doesn’t blow.

You’ve surely read such a phrase in any number of articles about supplying climate-friendly electricity to households and economies. Me, I roll my eyes every time I see it, no matter who the author is, but that’s mainly because it has to already be numbingly obvious that sometimes it’s cloudy or nighttime or calm.

Yet you wouldn’t know it from headlines like

This and articles like it invariably rely on significant dispatchable hydro but you wouldn’t know it from the choice of image.

or hot takes like

More than 150,000 [rooftop PV] systems installed in the last year alone would produce enough energy for 226,000 homes.

Why not? Because of last night on the mainland, for example:

Care of Tomorrow.

That’s an average of 91% fossil fuels supplying the evening’s electricity, with most of the remainder from existing hydro. The perseverance of solar and wind development in Australia is absolutely commendable, but even with all current projects completed this picture from last night would barely change.

Renewable energy advocates (and I count myself as one) were cautioned at the beginning of the year to be mindful of the reality of energy supply systems. When the triumphalism shown by advocacy groups like GetUp eventually fails to translate into rapidly diminished fossil fuel consumption at those times when the sun’s not shining and the wind’s not blowing, the resulting cynicism might make the “Tony Abbott years” not seem so bad by comparison.

GetUp heralds Australia’s progress with renewable energy as “the end of the era of big polluting energy companies dominating the market” but the growing awareness of waste and pollution also generated directly by the big overseas manufacturers of their favoured alternative energy sources must be addressed, not ignored just because it’s not happening here.

I’ll conclude with official data on annual shares from Australia’s technology mix.

Comparing Like for Like

Since you’re reading this blog, you’ve almost certainly encountered this claim:

We don’t need nuclear because we can use renewables.

For renewable sources like geothermal and hydroelectric this may apply, since they can provide guaranteed generation around the clock. But the former has been abandoned in Australia and both can meet only a small portion of our future requirement for climate-friendly electricity.

But in truth the claim invariably refers to solar and wind, not all renewables. For a scalable technology like solar power to hypothetically meet such a demand profile, storage is implicitly included, or at least invoked upon inquiry. David Green of Lyon Solar described it well:

If we really want to address the penetration of large-scale renewables – and not just be able to satisfy the market you can connect large-scale batteries onto the grid – you need to be able to demonstrate that power generated from renewables can be dispatched with power from the batteries like base-load power, so it’s not creating problems.

However, the size of Lyon’s projects instead indicate a peak demand role in the power market. The megawatt hour (MWh) capacity of their batteries are too limited to supply constant overnight power (not to mention the unlikely economics of supplying at low overnight prices). So the question still remains, what would that look like, and how would it compare to the modern nuclear energy technology some believe it supercedes?

Simplified capital costs over time

In this thought experiment, we’ll use

By multiplying the number of 50 MW class solar plants to ensure that excess generation above this number equals overnight requirements, an idealised “solar+storage plant” can be modelled. Slightly more than 3 Broken Hill-sized plants would be needed but we’ll assume three for simplicity. Similarly, operational costs are excluded for both technologies.

Thus, we can compare assumed overnight capital costs for a NuScale plant, 60 year design life, and twelve solar+storage plants which would hypothetically match its nameplate capacity. As mentioned in the Finkel Review, the lifespan of lithium ion technology is 10 years so the cost of regular replacement has been factored in, in addition to renewal of the solar panels after 30 years (assumed to be half today’s cost).

When the capabilities of the two technologies are hypothetically levelised in this simplified way, it appears that the specific argument on cost is reversed.

Estimated required land area

The area of Broken Hill solar plant is 140 hectares. Thirty-six such plants will need about 5,000 hectares, only slightly smaller than the area of Sydney Harbour. However they don’t all need to be co-sited.

NuScale’s plant, which is now under formal design and licencing review by the US Nuclear Regulatory Agency, will cover a little over 36 hectares, including its maximum required emergency planning boundary. It can essentially be situated anywhere that would be suitable for an industrial facility, as water is not necessary for operational cooling. Notably, other options may well be available for the 2030 timeframe.

Material requirements levelised by generated energy

The US Department of Energy 2015 Quaternary Technology Review estimated various levelised material requirements for major electricity sources. Additionally, silver and uranium requirements can be authoritatively sourced. Charting these estimates illustrates the difference in amounts of materials needed by solar and nuclear, for the same amount of electricity produced.

This doesn’t include the materials like lithium, graphite and cobalt needed for the batteries, which aren’t a power source. It is assumed that materials needed for iPWR (intergrated pressurised water reactor) type SMRs are sufficiently similar to conventional PWRs.

This thought experiment attempts to match solar energy capability to that of nuclear. It hardly needs to be said that the reverse is a much less valuable exercise. Cyling a collection of SMRs daily between 0% and 100% output (with considerably less in poor weather) makes little sense in many ways, not least of which is the consequence of diminshed emissions abatement in a system still overwhelmingly supplied by coal and gas combustion. The whole benefit of including nuclear energy sources is they represent a drop-in replacement for dispatchable fossil fuel fired generators.

There are also commercial scale examples of battery storage paired with wind farms, such as the facility in Rokkasho, Japan. The particular battery chemistry used – sodium sulphur – was recently evaluated in California with sobering results.

We won’t compare the potential emissions savings since authoritative research puts solar and nuclear both at desirably low factors. However, the extra material intensity of batteries may contribute dramatically to lifecycle emissions, depending largely on their country of manufacture.

Solar plants and battery modules can be installed rapidly. In contrast, a certain first time regulatory cost and lead-time for that nuclear plant is unavoidable. Yet it isn’t necessary to overstate this hurdle. In its submission to the South Autralian Nuclear Fuel Cycle Royal Commission, Engineers Australia observed that ANSTO’s OPAL research reactor is of similar size but greater complexity than an SMR unit, and concluded:

The OPAL development at Lucas Heights provides an excellent management example for an SMR nuclear power station in South Australia. Extensive international guidance is available from the IAEA to assist in establishing a nuclear power program…

Australia already has a competent and very well managed regulatory regime with staff with wide international experience. Many of the ARPANSA staff have extensive experience in operating nuclear power plants both civil and military. There is no fundamental reason why the ARPANS Act 1998 cannot be amended to include the regulation of nuclear power in Australia.

The results illustrated here should not be taken as any reason not to build solar, especially paired with storage so as to shift generation to meet high demand, like Lyon Solar’s projects. The importance of this was underscored in the Finkel Review.

However, excluding nuclear energy, with its specific supply profile that can’t realitically be emulated by a variable source like solar, is probably unjustifiable on grounds of cost, land use, material intensity or regulatory challenges. This isn’t intended to downplay the regulatory and public education headwinds the technology faces, but rather to emphasise how important it is – considering the results here-in – to face them now and seriously begin the process. As the Engineers Australia submission noted:

The utilisation of a mix of all low emissions electricity generation technologies will be essential to achieve long-term greenhouse gas emissions targets.

What can be more serious than achieving targets that are aggressive as possible with everything available?

 

Levelised Cost of Electricity – a Few Thoughts

Following on from the previous article regarding the misuse of metrics, this article is a guest post by Keith Pickering. More of his analysis and commentary can be found at Daily Kos.

A few thoughts on LCOE, Levelized Cost Of Electricity.

The first thing to realize that LCOE is, and always has been, an investment tool, designed for investors, to aid investors in energy markets make investment decisions. And when LCOE is used for that purpose, it is (usually) appropriate.

The problem comes when we want to use LCOE to make public policy decisions, which can (and usually do) have a different set of decision parameters than financial investment. One obvious difference is in asset lifetime.

For example, the US Energy Information Agency publishes LCOE estimates every year, and while they do a pretty bad job of explaining how they compute things, one thing they do say is that for all energy types they use a lifetime of 30 years. Why? Because banks don’t make loans for longer than 30 years, that’s why. Now if you’re considering whether to loan money to an energy project, that 30 year lifetime makes perfect sense. But if you’re planning an energy infrastructure for half a century or more, the 30-year lifetime in your LCOE calculation will systematically undervalue long-lifetime assets (like nuclear and hydro) and systematically overvalue short-lifetime assets (like wind.) Using a 30-year lifetime implies, essentially, that generating assets with a lifetime of more than 30 years will have zero asset costs during their lifetimes beyond loan payoff. Essentially that pretends that the electricity cost would *drop like a stone* to extremely low levels at the 30 year point. But those really low future electricity costs are *never reported* in LCOE; the assumption is just left out there, unmentioned.

Another thing to realize is that a key component in all LCOE calculations is the “discount rate.” Basically, the discount rate is the annual rate of return investors would expect to get on a properly valued asset. If the discount rate is high, investors want their money back right away. High discount rates value the present highly, while discounting the future strongly. High discount rates therefore penalize technologies that rely heavily on long-term fixed assets (once again, hydro and nuclear.)

Discount rates are used elsewhere too, for example in computing the Social Cost of Carbon (SCC). If you’re taking the long view, a low discount rate values the future more highly. For that reason, climate hawks like to use low discount rates when computing SCC, because that computation raises carbon cost. The carbon we emit today will continue warming the earth for centuries, and will continue to cause damage for that entire time. The lowest possible discount rate will capture (some of) that future damage and value it when computing SCC. The US government currently uses a 3% discount rate when computing SCC. And even that may be too high, when you consider the entire lifetime of CO2 in the air.

To be consistent, then, us cliamte hawks should also press for an equally low discount rate when computing LCOE; that is the socially responsible way to value the future in the face of long-term climate change. But EIA uses a Weighted Average Cost of Capital (which is the discount rate by another name) of 5.5%, nearly twice the rate used in computing SCC. That doesn’t mean it’s wrong; for an investment tool, it’s appropriate. But again, if you want to use LCOE for policy purposes, there are other things to consider.

The investment management company Lazard publishes their own LCOE results every year, and every year the low-low LCOE of wind is caressed and trumpeted by certain wind-loving types. It’s no coincidence that Lazard is heavily involved in wind energy stocks, and has skin in the game as far as wind energy is concerned. The Finnish blogger Jani-Petri Martikainen has already cataloged some of the many thumbs Lazard puts on their scale to favor wind, and it’s no surprise that jacking up the discount rate is one of them: Lazard’s rate is a whopping 9.6%, which immediately rockets high-asset technologies (like hydro and wind) way up in price. Then they lower their LCOE (for wind only) by assuming hugely unrealistic (55% !!) capacity factors for wind. The net result is that Lazard’s bottom-line wind numbers look about like EIA’s (so they can reassure their customers that they’re doing it right) while all other technologies are way too high. It’s utterly deceptive, but they apparently hook the investors they’re trolling for.

Another good LCOE resource is the OpenEI Transparent Cost Database, which is a meta-analysis of everybody else’s LCOE, but with homogenized parameters for tax rate, discount rate, and capacity factors for the various technologies. Unfortunately it looks like it hasn’t been updated in more than a year now, but it does have everything spreadsheeted out, which lets you examine the calculations and play around with the assumptions. With OpenEI’s standard parameters, nuclear already looks appropriately cheap, even in the first thirty years. And if you count the second thirty years of expected plant life, it’s no contest.

The Hornsdale wind farm in South Australia operates under a tariff agreement with the Australian Capital Territory worth $77 per megawatt hour. In the absence of this arrangement, it would derive revenue from selling Large-scale Generating Certificates as the majority of incentivised renewable generators do in Australia. Stage 2 was completed in 2016, adding 100 megawatts for $250 million. For comparison, the cost of the first 100 megawatt stage at Snowtown in the same state in 2008 was $220 million – practically the same, adjusted for inflation. The impact of adding to so much wind capacity on system strength in South Australia, as identified in the Finkel Review, is not accounted for in the tariff. However, Hornsdale stage 2 is trialing a method to supply Frequency Control Ancillary Services to the market.

One final word about cost. You often read about some contracted electricity price for some new installation (typically solar) that is impressively low. These Power Purchase Agreements (PPAs) are common in the industry, but you should be aware that PPA price is always lower than LCOE. That’s because a PPA does more than transfer energy: it also transfers risk, from the seller to the buyer. If you want to build a new generator (of any type), you’re taking different financial risks: the risk that the project will never get built, and the risk that you won’t be able to sell the electricity, or not for the price you need. Banks understand these risks and set the interest rate on the loan accordingly. When a PPA is signed, the first part of that risk (that it won’t get built) has already passed, because as a general rule a PPA isn’t signed until the generator is already built. And when a PPA is signed, the second risk component (not being able to sell it, or for the right price) has also been eliminated. With a newly signed PPA in hand, the generator owner can re-finance his loan to a very, very low rate, because at that point the risk is almost completely gone. The buyer of the electricity (the other party in the PPA) has assumed the risk that the price he’s paying on the PPA will be lower than the price he could have gotten elsewhere on the wholesale spot market. Because the buyer is assuming that risk, he expects a lower price than he otherwise would have gotten; and because the seller is shedding that risk, he’s willing to sell at a lower price too. Generally, a PPA price is about what LCOE would be if the discount rate were close to zero.

 


 

Many thanks to Keith for this clarifying commentary. I added the description of Hornsdale wind farm to help illustrate it with real world Australian context.

For the reasons mentioned above, and as it’s so heavily relied on by anti-nuclear campaigners, I avoid using Lazard’s analysis on this blog. But its latest edition included this piece of important guidance which many would be wise to take on board.

Even though alternative energy is increasingly cost-competitive and storage technology holds great promise, alternative energy systems alone will not be capable of meeting the baseload generation needs of a developed economy for the foreseeable future. Therefore, the optimal solution for many regions of the world is to use complementary traditional and alternative energy resources in a diversified generation fleet.