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The Forum > Article Comments > Itís time for an energy debate in Australia > Comments

Itís time for an energy debate in Australia : Comments

By Martin Callinan, published 23/6/2005

Martin Callinan argues we need to consider all options including nuclear when assessing the nationís energy policy

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A sensible debate must be an informed debate. I've only written once sentence, and already there's a problem. In disussing this topic and others, I repeatedly come against a brick wall because the people I'm trying to debate with seem to lack any understanding of the basic economics and physics of the process. Attempts to educate fall on deaf ears. Anything that conflicts with preconceived notions is simply ignored. Maybe I'm also guilty of the same things - I have no way of telling.

One particular issue that some people seem incapable of getting their heads around is that financial capital has a cost. Over and over I see the idea expressed that since you only pay it once, it doesn't really need to be taken account when deciding how much the power will cost to the consumer. This is particularly noticeable when trying to discuss the economics of solar power.

I question the idea that large scale windfarms do not suffer the uncertainties of supply inherent in smaller ones. At least, when the wind farms are only on the scale of Bass Strait. Weather patterns are a lot larger than that, and I believe that there will be periods when the entirety of Bass Strait would have only minimal winds. These occasions may not be that frequent, but when they occurred, we would have to have to be a reasonable way of dealing with the power shortfall (which we don't).

One concern I've expressed elsewhere about windfarms is that they have a largely ignored external cost, that is imposed on producers that have a higher marginal cost. This is because the latter are effectively used as free backup for when the windfarms cannot produce. I've never seen this properly costed.

Nuclear power stations are not an unmixed blessing in the effect they have on the reliability of the system. If such a power station trips offline due to a network failure, and has to be shut down, it can take days to restart. Not so good if that one plant is providing a significant slice of your total power.
Posted by Sylvia Else, Thursday, 23 June 2005 1:38:13 PM
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The following technology is worth a look:-

http://www.enviromission.com.au/
Posted by Terje, Saturday, 25 June 2005 12:08:33 AM
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Sylvia, youíre right. Capital allocation certainly does have an opportunity cost and economic considerations are always contingent and interdependent, making consideration of them a lot more complicated than, say, buying groceries. A similarly overlooked consideration of wind power is that once built it you do not have to then buy / supply any fuel or deal with any waste.

The contention that large scale windfarms are not restricted by wind variability compared to small isolated windfarms is easy enough to checkout. Have a look at the wind speeds on any dayís weather reports of a sample of towns along the Victorian coast. Victoria has about 1800km of coastline, far far more than the UK east coast.

Power shortfalls can be dealt with as they are dealt with today, with coal. We will be using and exporting coal for many years to come; right up until renewable energy meets all demand.

Terje, Enviromission is an enormously promising enterprise. Itís a privately funded large scale ď24hour supplyĒ renewable power station. The sooner it is built and producing its 200MW the sooner large scale renewables will attract decent investment capital.

(Disclosure: I used to own shares in enviromission. In accordance with conflict of interest laws and guidelines I sold all my energy and environment related shares prior to the last federal election before I taking up work with the Federal Shadow Environment Minister.)
- Unfortunately for me but good for the company, they have risen 50% since.
Posted by martin callinan, Saturday, 25 June 2005 1:19:48 AM
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It seems the Solar Tower is now the energy saviour of choice but we don't even know yet if it will deliver what it promises. I remember reading similar optimism about fusion power in a Boy's Own annual about thirty years ago. However I think the problem is now so urgent we should accelerate work on unconventional energy sources so in five years time we have a clear idea of what works and what doesn't. The reality may be that the technologies that work have major problems of capital cost, waste disposal and/or poor thermal efficiency. Like the characters in 'Waiting for Godot' we want to believe there is a simple solution.
Posted by Taswegian, Saturday, 25 June 2005 8:21:57 AM
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The economics of all renewables mean that they must be aimed at base load generation. No one will construct a renewable 'fueled' peaking station.

If wind power is used as a substitute for existing base load capacity, the latter being used only when (possibly infrequent) wind power is unavailable, then it is undermining the economics of the current infrastructure. One can take the view that that's too bad - though it has implications for any future re-investment in that base load capacity.

If wind power is used to augment the existing baseload capacity, then new standby capacity (probably gas powered - it's less capital intensive) needs to be constructed alongside the wind capacity. This represents an additional capital cost that has to be factored into the economics of wind power.

Solar capacity, whether solar tube, or otherwise, has the problem that it only functions during the day, and works best when there's no cloud, so it also involves some standby capacity, and alternative generation capacity to cover the night-time base load. It makes sense for the alternative capacity (but not the standy capacity) to be storage based - perhaps additional pumped storage in the Snowy's for example together with more generating capacity there (I don't know whether that's feasible). Either way there is still an additional capital cost involved.

It's not that these issues render the renewables infeasible, but they do seem to be largely ignored by proponents, which make the informed debate difficult to start.

Sylvia.
Posted by Sylvia Else, Saturday, 25 June 2005 9:35:02 AM
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Like all problems there are a variety of solutions. Most require the allocation of upfront capital which will then return a dividend obtained from the energy produced. The difficulty is getting the money for the upfront capital for investment in new technologies because the capital that is used to build the next set of generators comes in one way or the other from income from existing energy consumption.

This capital is mainly interested in ways of increasing the consumption of its existing products. For example it is not interested in using capital from selling energy to save energy. It is unlikely to be interested in other ways of generating energy particularly if it is more expensive. The system will continue down the path of more coal fired plants because that is the low risk path and that is where the money comes from to build more generating capacity.
Posted by Fickle Pickle, Saturday, 25 June 2005 12:10:30 PM
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