Physical Insights

An independent scientist’s observations on society, technology, energy, science and the environment. “Modern science has been a voyage into the unknown, with a lesson in humility waiting at every stop. Many passengers would rather have stayed home.” – Carl Sagan

Archive for the ‘energy economics’ Category

The Australian Government’s domestic solar PV subsidy…

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The federal government has recently announced it will scrap the unpopular means test for the federal subsidy for domestic solar PV arrays, which restricted the rebate to households earning less than $100,000.

The size of the rebate was, formerly, $8 per watt of installed nameplate capacity, up to a maximum of $8000. The rebate will now be smaller; $5/W, up to a maximum of $7500.

Sounds good, right? But it’s horrendously expensive – the government is in effect paying $5/W for the cheapest, nastiest polycrystalline silicon PVs on the market.

There are scores of companies jumping on the bandwagon to sell these little 1-1.5 kW rooftop PV systems, advertising and promoting and installing them – because they’re making a fortune from the increase in business resulting from the subsidy.

The government rebate does not cover the full cost of such a system – therefore, in order to get as much interest as possible, the vendors are trying to keep the costs of such systems as low as absolutely possible, so that the cost that the customer pays is as small as possible. Therefore, all such systems are exclusively cheap, inefficient, basic polysilicon devices. After all, an advanced solar-concentrating collector with a high-efficiency CdTe cell or stacked heterojunction cell or sliver cell or whatever does not attract any higher subsidy than the basic polycrystalline Si device.

Advocates such as the Australian Greens say that such a scheme “supports the solar industry” – but all it does is supports the environmentally-damaging low-cost manufacturing of polycrystalline silicon in China, and doesn’t support innovation in advanced PV technology or anything like that.

What if the same amount of subsidy might be better spent elsewhere? Here’s a hypothetical idea to think about.

1. Go and find a suburb or a city or a community which has about 31,000 households. I’m certain there are 31,000 households in this country who support what I’m about to elucidate.

2. Get each household to put up AUD $1200 or so, temporarily.

3. Take that 25 million US dollars and purchase a 25 MWe Hyperion Power Module, or something similar.

4. At 25 MWe divided between 31,000 households, that’s a little over 25 GJ per year, which is a little more than Australia’s present average household electricity consumption. This doesn’t just generate a fraction of your household electricity needs – it generates 100% of it, and there will be no more electricity bills.

5. That corresponds to a nameplate capacity of 807 watts per household. Since the government hands out a subsidy of $5/W for solar photovoltaics with a 20% capacity factor, they should hand out $22.50/W for nuclear energy with a 90% capacity factor, right?

6. Collect your $18,157.50 rebate from the government. Less the $1200 investment, that’s $16,957.50 immediate profit in your pocket. This is exactly the same rate of payment per energy produced that presently exists in the form of the PV subsidy.

7. Go to the pub. Got to stimulate that economy, you know.

I wonder how many ordinary Australian households would support nuclear energy if you paid them $17,000 for doing so?

To replace one Loy Yang type coal-fired power station* with solar cells, we would need 6,082,342 homes equipped with 1.5 kW solar photovoltaic arrays.
With an $7500 rebate for each one, that would cost the government 45.6 billion dollars per each large coal-fired power station.

* (Loy Yang generated 15,995 GWh in 2006.)

Solar photovoltaics typically have a capacity factor of about 20%, and we’ll suppose the panels have a lifetime of, say, 30 years.
Therefore, this scheme costs the government 9.5 cents per kWh generated.

If the government purchases nuclear power plants, they will cost, say, 10 billion dollars (let’s be conservative) for a nuclear power plant with two 1100 MW nuclear power reactors which will operate with a 90% capacity factor and a lifetime of 50 years. The capital cost of plant dominates the overall cost of nuclear energy.

Therefore, the nuclear power plants would cost the government 1.15 cents per kWh – 12% percent of the cost of the solar rebate scheme. That’s the government’s rebate alone – without the rest of the price of these systems.

All this solar rebate is is another mendacious political enterprise involving renewable energy which can’t be scaled up, which hands out free money to the public, makes a bunch of money for the solar panel vendors (including many dangerous fossil fuel vendors such as British Petroleum), and mendaciously makes the government look like they’re actively getting the country running on clean energy.

ASIDE: I’m going to start cross-posting some blog content on the Daily Kos. I think it’s a nice site to engage with many, many readers – many of whom perhaps aren’t already so convinced of the virtue of nuclear energy – so, there’s plenty of engaging, active discussion, and the opportunity to maybe convince some people – even if that’s just a few people it’s still a very positive thing.

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Not-really-clean-coal for Victoria.

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Just two days before the Garnaut report on climate change is handed down, the Victorian Government has given the go-ahead to a new brown-coal power station in Latrobe Valley.

Environmental campaigners said it was “complete madness” to approve the $750 million plant, but the Government said the station would use new technology that would slash greenhouse gas emissions.

The project is a joint venture between consortium HRL and Chinese power giant Harbin Power, and will receive funding of $100 million from the Federal Government and $50 million from the Victorian Government.

“The $750 million HRL plant will use technology which has been developed right here in Victoria and is part of the new generation of clean coal power stations designed to slash greenhouse gas emissions,” said the Energy Minister, Peter Batchelor.

“The project uses a process called integrated drying gasification combined cycle (IDGCC) which can reduce emissions of CO2 from brown coal-fired power generation by 30 per cent and reduce water consumption by 50 per cent, compared to current best practice for brown coal power generation in the Latrobe Valley.”

Robert over at Larvatus Prodeo actually reported on this at length last year, when the project was first announced, and there’s a good body of details of the project and discussion to refer to there.

Typical generators burning Victorian brown coal generate 1175 g CO2e per kWh of electricity generated.

The IDGCC plant will reduce carbon dioxide emissions by 30% – so, that’s about 823 g CO2e/kWh.

For a good supercritical black coal burning plant you’ve got about 863 gCO2e, and 751 g for natural gas, or 577 g for combined cycle natural gas – which is about the absolute lowest you’ll get for a fossil fuel.

The carbon dioxide emissions are still high as all hell. It’s basically the same as a black coal fired power plant – in absolutely no way is it low in greenhouse gas emissions. All that the IDGCC technology is really accomplishing is to turn a plant powered by brown coal – the most especially inefficient and carbon dioxide intensive form of coal – into the emissions equivalent of a more conventional black coal fired plant. Make no mistake – the entirety of that dangerous fossil fuel waste is being discharged straight into the environment, as per business as usual.

But there’s one aspect to this which I find interesting, in particular.

This plant is slated to cost 750 million (Australian) dollars, and will have a nameplate capacity of 400 MW.
That is; $1875 per kilowatt of nameplate capacity.

The US nuclear energy industry is aiming to build new nuclear power plants for a cost of $1500 to $2000 per kW capacity.

The General Electric ABWR was the first third generation power plant approved. The first two ABWR’s were commissioned in Japan in 1996 and 1997. These took just over 3 years to construct and were completed on budget. Their construction costs were around $2000 per KW.

Westinghouse claims that the AP1000 power reactor will cost $1400 per KW for the first reactor and fall to as low as $1000 per KW for subsequent reactors.

I don’t know what kind of capacity factor is to be expected from an IDGCC plant – but at best, it’s comparable to that of nuclear power. If the capacity factor is significantly less, then this decreases the economic competitiveness of the coal plant relative to nuclear power still further.

We’re looking at the construction of a coal-fired power station that is not mitigating its carbon dioxide emissions in any meaningful way, emitting about 823 g CO2e/kWh straight into the atmosphere, along with all kinds of other dangerous coal byproducts, where the construction of a new nuclear power plant is already likely to be directly competitive, if not superior, on construction cost terms, even in the absence of any kind of emissions trading scheme, carbon dioxide ‘price’, carbon dioxide capture and storage or carbon dioxide sequestration.

What’s up with that?

Written by Luke Weston

July 3, 2008 at 4:52 am