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Over the past several years there has been much ongoing reporting on and discussion about electric power in Ontario. Most of that reporting and discussions have revolved around such issues as the $32-billion debt the utility once incurred and the projected shortfall in future generation capacity. There is much political support for shutting down the coal fired power plants and much opposition to expanding nuclear power generation. Over the next few years Ontario will likely exhaust the capacity to develop new mega-hydroelectric power installations.
Importing Hydroelectric Power:
For several decades most of Ontario was once self sufficient in generating electric power. The urgent need to develop new generation capacity over the next several years includes the possibility of importing electric power from other provinces such as Quebec, Labrador and possibly Manitoba. Only a very small region of Eastern Ontario operates outside of the Ontario power grid. That region receives some 55Mw of electric power from Quebec or less than 1/6th of 1% of Hydro Quebec's total hydroelectric generation capacity of over 33,000Mw.
Over the next few years and since 2006 Hydro Quebec may be expected to develop some 4500Mw of new generation capacity, a portion of which may be sold to Ontario. Some of the planned new hydroelectric generation capacity from Labrador may also be allocated to Ontario, possibly using transmission lines across Quebec with new interconnections built to main power lines in Eastern Ontario. The power level may supplement and exceed the output of the Canadian side of the Moses-Saunders power dam that serves much of Eastern Ontario.
High-Altitude Wind Power:
New developments in electrical generation technology could offer Ontario an option that was unforeseen at the time when the Manley commission undertook a comprehensive study into the future of Ontario's electrical power supply. Makani Wind Power, Sky Wind Power and Magenn Power are among several companies that are developing high-altitude wind power conversion. Powerful winds blow across Hudson Bay and also James Bay during winter with total wind energy below 20,000-feet altitude estimated to approach 5,000,000Mw.
There are some 1500-islands on the eastern side of Hudson Bay and some 100-islands on the eastern side of James Bay, both near the western coast of Quebec and within proximity of Quebec's James Bay hydroelectric power dams. Powerful high altitude winds blow over those islands as well as over Quebec's western coast. Each high-altitude wind generator may be capable of generating over 10Mw output with sufficient space to install over 10,000-units. Estimated power generation costs during winter is estimated at less than $0.06/Kw-hr.
There may be enough reliable, steady, high-altitude wind energy during winter to generate enough power to reduce water flow rate through hydroelectric power dams along the St Lawrence River system. During winter the hydrological cycle could replenish water volumes in the Great Lakes and assure enough seasonal storage volume to allow additional hydroelectric output on that river during summer. The navigation channel in St Lawrence River east of Montreal may need to be dredged and deepened to ensure passage to commercial shipping during winter. The alternative would be to build new seasonal navigation locks on the river near Quebec City to maintain water depth.
Ocean Power and Storage:
Powerful ocean tidal currents surge twice daily in each direction through the channels of Hudson Strait. It may be possible to generate some 10,000Mw of electric power for 2-cycles of 5-hours each every day from 2-channels at the western exit of Hudson Strait. That power could be connected into Hydro Quebec's James Bay facilities using 1000Kv UHV-DC power transmission. Hydraulic storage is available in New York State and in Michigan and there is potential to develop large-scale hydraulic storage capacity between large bodies of water at different elevations in Quebec and in Ontario. Such storage would make productive use of excess ocean power and wind power that occurs during off-peak periods.
The Nuclear Option:
The Government of Ontario is committed to developing new nuclear generation capacity despite opposition from several environmental groups. One of the concerns has been the record of cost over runs in the past. New developments in China's nuclear industry promises to reduce the capital cost of nuclear power plants. Chinese engineers have proposed to mass-produce numerous nuclear components to ensure the availability of the technology and to lower overall costs of nuclear installations by 30% to 40%.
China's projected future need for electricity requires a massive increase in nuclear generation capacity. Several Asian nations have indicated their interest in generating electric power using Chinese nuclear technology. Should the economic downturn persist over the next several years, Ontario may have to consider the possibility of using nuclear power from China as a means by which to reduce costs. A domestic company may negotiate a partnership with the Chinese nuclear industry to gain access to lower costing mass-produced nuclear technology.
There has been some recent opposition in Ontario to stand-alone natural gas fired power plants that release large amounts of heat into the atmosphere. Protestors supported the productive use of the exhaust heat such as in a district heating system. Such systems do exist in Ontario and some use natural gas fired marine piston engines. Large gas turbine engines do emit a hotter exhaust that can generate saturated steam. There are several industries that can use the combination of electric power and the exhaust heat.
It is possible for multiple neighboring industries to share heat and electric power from a single turbine. Except that Ontario regulations presently prohibit such a practice. Such a proposal originated in an industrial town Eastern Ontario in 1989, except that it was vetoed the Ontario power regulator. Both industries subsequently closed with a considerable loss of jobs in a region that had been stricken with high unemployment.
There is growing support for small-site natural gas fired power generation plants that use the exhaust heat productively. Companies such as Honeywell and Capstone have announced their intention to offer turbine units of some 150Kw output. The exhaust heat from these small units may be used to heat a building during winter of to energize an absorption refrigeration air conditioner system.
Regulation and Private Power Transmission:
The electric power industry in Ontario is heavily regulated. Economic regulation has allowed the government to assure the electorate of low power prices. Except that regulation does shave its downside. Nobel economist George Stigler had undertaken extensive research into economic regulation and showed that whatever the merit over the short term, that economic regulation ultimately fails over the long-term. Other economists have used the econometric method to show that economic fails over the long term.
Deregulating any heavily regulated industry has its downside and can cause economic upheavals that can last for many years. Financial regulations were revised after Greenspan and the US Federal Reserve lowered interest rates to record levels that help facilitate the US housing boom that culminated in the recent mortgage meltdown. The situation in the Ontario power industry can open the door to allow for the existence of a regulatory-free sector involving small-site power generation.
One of the cornerstones of power regulation is the prohibition on connecting a private power line across a private property line. In district heating water lines and steam lines are connected across property lines to carry thermal energy. The temperature in some steam lines is high enough to activate a Stirling-cycle engine and a steam engine using other lines. Water flowing inside a pipe at high enough pressure and volume can drive a hydraulic turbine and perform mechanical work or drive an electrical alternator on an adjacent property.
A mechanical drive shaft can legally be connected across a property line and either drive machinery or electrical equipment. It is possible to transmit electric power using closely spaced microwave dishes or by using coupled magnetic resonance technology that can transmit electric power through the air. A powerful beam of light using sulfur fusion technology can shine on to a fresnel lens on an adjoining property. The lens may connect to an optical fiber distribution system that can provide interior lighting inside a large building.
There is a wide range of possible means by which to transmit a few to several hundred kilowatts of energy across a property line. It may be beyond the scope of provincial authorities to regulate the use of all the technologies as some would fall under federal jurisdiction. There may be merit in repealing the prohibition that prevents 2-mutually agreeable parties from connecting a private electric power line across their property line, especially if the power is generated by a clean and non-polluting technology that operates on renewable energy.
Regulatory-free Renewable Power:
The Government of Canada and the Government of Ontario have both indicated a willingness to encourage development of energy conversion using clean renewable sources. There would be merit in allowing small-site renewable energy conversion to operate free from economic regulation. People would have the choice to purchase power from a large utility or from a private provider using independent power lines. The provider may have the choice of selling to neighbors or to a utility.
A small-site renewable energy power provider could only supply a limited number of customers and would only require a very small transmission network. There are numerous potential sites along rivers where small-site hydroelectric installations would generate less than 100Kw and only serve a small neighborhood. Many small entrepreneurs may be willing to invest in or develop small-scale power technologies from renewable energy and generate enough power for themselves and their closets neighbors.
There are ongoing new developments in wind power conversion, solar energy and waterpower conversion. The cost of these technologies may be expected to decline over the next several years. One new development in waterpower involves a technology that resembles a large eel that wiggles in fast moving water current. One variant of the technology can pump water that may pass through a hydraulic turbine while another variant pumps air that may pass through an air turbine. Either turbine may be located on shore and drive an electrical alternator.
People would benefit from the freedom to develop and use small-site renewable energy technologies that pose no harm to people, animals, marine life, birds or marine traffic. A proliferation of regulatory-free small-site installations that operate on renewable energy could evolve and account for 100Mw to over 1000Mw or up to 5% of generation capacity in Ontario. Such development could encourage new entrepreneurial development and provide opportunities for people to become acquainted with new evolving small-site power technologies.
During 1998 Eastern Canada including Eastern Ontario endured a severe ice storm that incapacitated much of the power grid. A few small communities that had locally generated electric power were able to remain functional. A proliferation of regulatory-free small-site clean power generation could help more small communities endure a catastrophe such as another severe ice storm. Most communities may benefit from having access to a few kilowatts to a few megawatts of locally generated clean power using renewable energy.
At the Manley report on the future of Ontario electric power was produced, it reflected the then state-of-the-art of proven electric power generation technologies. Several years have passed since the completion of that report and new technological developments have occurred in the power generation industry. High-altitude wind power and lower-costing mass-produced nuclear components are among the new developments. There are also ongoing advances occurring in small-site power generation technologies.
Politically, the provincial government would want to avoid the likely upheavals that would occur following a total economic deregulation of the power industry. Such upheavals may be avoided by allowing small-site renewable energy power generation to operate free from economic regulation, including the freedom of property owners to connect private power lines across their property lines. While some readers may vehemently disagree with some of the content of this article, some revision to the now dated Manley report may be appropriate.
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Ferdinand E. Banks 3.9.09
I'm sorry, but neither Professor Stigler nor anyone else "showed" that electric deregulation does not work. Actually, for the most part, it works to the benefit of everyone except the large generating firms that want deregulation so that they can 'game' the system, or otherwise take advantage of the dumb politicians and naive consumers.
As for your remark about econometrics, please take note that it includes the segment CON. I taught it for 3 or 4 years and I would appreciate not hearing more about it.
Bob Amorosi 3.9.09
Regulation can and does work in the long run but provided regulated consumer rates fund the development of the electricity industry over time. Sadly, this was not the case in Ontario historically. In an attempt to keep rates relatively low in Ontario during the last 30 years (or more), in part to maintain many industry’s competitiveness, the electricity industry was starved for capital to re-invest in the grid and in new technologies, including badly needed generation growth. One of the results here was the massive $32 billion debt left stranded by the old publicly-owned Ontario Hydro utility when it was broken up, which consumers are still paying for. Regulation that kept consumer rates artificially below the true cost of electricity was responsible, and also compounding the debt over time was soaring costs at Ontario Hydro that included obscene exorbitant staff salaries.
Bob Amorosi 3.9.09
Furthermore Fred, hence the perceptions and conclusions by some like Professor Stigler that regulation doesn't work in the long run. I suspect Ontario's experience is not entirely unique either, since I hear there has been massive under investment in maintaining the grid in many parts of the US too, in part due to lack of money from ratepayers.
Ferdinand E. Banks 3.9.09
Let's look at the statement regulation doesn't work, which suggests that deregulation does work. Well, I guess that I can add Ontario to New South Wales as places where deregulation works, because there are not many more. It certainly didn't work in Alberta, and probably elsewhere in Canada. Also, in my former home state of Illinois it was a disaster, and it was a disaster in Sweden and Norway and New Zealand and South Austraiia, and California and ...many other places, which I will name if this discussion goes further. Incidentally, there was no need to mention Professor Stigler, because he knew about as much about ELECTRIC regulation and deregulation as his secretary.
Lack of money from ratepayers you say. Well, smart regulation is supposed to work so that generating companies get the money they need to make necessary investments. Remember the story in California: deregulation meant that generators did NOT invest. Why should they if they prefer more money to less, and the same thing happened in the UK and probably many other places.
The story on electric deregulation is this: MOSTLY IT FAILED, ALTHOUGH IT PROBABLY HAS WORKED IN SOME PLACES , ESPECIALLY WHERE THERE WAS EXCESS GENERATING CAPACITY. Of course, those cataclismic failures are mostly forgotten now, but not by yours truly.
Bob Amorosi 3.9.09
There's another camp that views regulation in electricity as completely unnecessary if there can be genuine market competition for generators to sell their power, and genuine freedom of consumer choice in who they buy it from. Regulation is unnecessary in most other industries with competing suppliers and consumer choice. Len Gould's IMEUC market reform proposals tabled on this website proposes just such freedoms and true competition for electricity.
PERHAPS DEREGULATION HAS FAILED IN MOST OTHER PLACES BECAIUSE CONSUMERS NEVER HAD ANY FREEDOM OF CHOICE AS TO WHO THEY MUST BUY THEIR ELECTRICAL POWER FROM. Is this not common sense given monopolies tend to screw the consumer without regulations?
Just wait for it Fred, regulation may someday go the way of the dodo birds if distributed local generation becomes widespread and successfully commercialized, because many more choices for consumers will emerge to buy power from. Some are even likely to opt out of being connected to the central grid if localized power sources enable them to be totally self-sufficient and independent of the grid.
Ferdinand E. Banks 3.10.09
Physical depreciation is a cost, and smart regulation is supposed to take this cost into consideration when ruling on price. As for "genuine market competition", how can this happen when generation is a monopoly or strong oligopoly thing - and rightly so, given increasing returns to scale. When they deregulated in California, local generators made sure that output was adjusted so as to increase their profits, and the same was true of out-of-state generators - or "out of state criminals" as Governor Gray Davis called them.
"Local generation". An ignoramus of a student here started sounding off about local generation and I was compelled to inform him that clown time was over. Local generation is an Amory Lovins kind of option which is supposed to make nuclear unnecessary. By the way, in my first post I seem to have confused regulation with deregulation. Please accept my deepest apologies. What Professor Stiglitz showed was that regulation did not work, which is something like George Bush showing that the hiding of weapons of mass destruction in Iraq would not work - only there were no weapons of mass destruction in that country to be hid.
No thanks. The executives and technicians in the utility industries deserve high salaries and recognition, but that's about it. When they deregulated in the UK and Sweden they turned high salaried people into millionaires virtually over night. Maybe they deserve to be millionaires, but not at my expense.
Bob Amorosi 3.10.09
On the contrary, generation is NOT a monopoly or oligopoly, it is the local distribution companies that are monopolies. Here in Ontario the wholesale generator market is already deregulated to a large extent where an independent system operator takes bids periodically throughout the day from all the competing generators. I understand this is the same situation in most places in the US too. However the consumer retail rates are fixed according to regulation because consumers must buy their power from one local distributor.
As for local power generation replacing central nuclear stations, think again Fred. The vision most politicians have is that local generation will emerge in parallel with nuclear, not replacing it. As for economies of scale, presently local generation remains expensive relative to large central generators. But what you ignore is the huge sums of money being poured into research and development of various forms of local distributed generation. And governments are noticing them, and have subsidy programs in place to foster their commercialization because they know that by developing and growing their businesses, system costs are surely to come down in time. How much lower they will go is open for debate though.
Fred, you sound too much like Alan Caruba on this website, totally ignoring what most people around you especially on this website are talking about in many articles.
Bob Amorosi 3.10.09
Regulators in Ontario (called the Ontario Energy Board) adjust consumer retail rates once or twice a year, and the funds collected by local distributors from consumers are passed through to generators. Since the generators sell their power at real-time prices into a deregulated wholesale market, the money from consumers may result in generator profits or losses on an annual basis. So our regulators will tweak consumer rates up or down once or twice per year based on whether all our generators combined have lost or made money over the previous year. Out fixed regulated consumer rates are in effect a heavily dampened real-time price, with a time-constant that flattens out the variations over 6 to 12 month time frames.
Regulation is supposed to account for aging infrastructure maintenance, and new generation growth to meet demand growth. Bu clearly consumer rates have not done this in much of the US, leading to claims by many that deregulation has failed. This is absolutely no surprise because rates have been kept artificially low by public pressure on governments and their regulators to keep a leash on rate growth over decades..
Bob Amorosi 3.10.09
Correction - .... leading to claims by many that REGULATION has failed.
So in reality, it is consumers and public pressure, including lobbyist interest groups opposed to building new central generators, who are at the root cause of the APPARENT failure of rate regulation. What this message says is that consumers want, and indeed they DEMAND, the lowest possible consumer rates. So what better reason to consider giving consumers access to real-time generator prices for their retail consumption, as proposed in Len Gould's brilliant IMEUC market reform proposals detailed on this website.
Len Gould 3.10.09
Though it may seem confused, I can say I agree with both Bob and Profesor Banks.
Bob is correct, that regulation is an outmoded process with too many flaws to tolerate for any long-term future given the options which modern communications, intelligent local controllers and access to public data COULD provide if governments would get out of the way. The only reason strict price regulation ever made sense was because the transaction costs of any alternative were too high, but those of us, like Bob, who are tuned in to the capabilities of modern electronics, realize that that impediment has already gone away.
Yet Professor Banks is also correct, that what is TODAY called de-regulation, is a farcical failure as it must be, combining the worst features of a free market system with the worst features of full regulation, especially where incumbent utilities have not been broken up into MANY relatively SMALL specialist competing generating entities and small regional wires-only distribution monopolies. California is an excellent example of the latter, leaving huge powerful incumbents in place who controlled far too much of the market. I realize that was not the core "apparent" cause of problems, but had the gaming of Enron not occured, this problem would soon enough have reared it's ugly head.
The core purpose of de-regulation must be to enable the complete re-structuring of our electricity supply structure regarding generation. We need to enable / encourage tens of thousands of small micro-CHP units to take over entirely th burning of all remaining natural gas in 90% thermal efficient Combined heat-and-power units, where electricity is generated whenever the grid needs electricity, and the waste exhaust heat is stored for space heating / heat-driven refrigeration use as required. Systems like GE's SOFC fuel cell systems, WhisperGen's Stirling boiler-generators, Honda's entries, or those of many others now or soon arriving. We need to implement a system where these systems can compete evenly and fairly with multi-gigawatt central nuclear stations, while gradually out-competing central coal and gas turbine generation. We also need to enable / enforce customers implementing of off-peak PHEV charging, perhaps grid-wise PHEV's, application of 1$ / watt solar PV where logical when it arrives (soon), distributed solar-thermal generation built into roof systems, wind generation, etc. etc. Most of these technologies have been available and technically known since the last energy crisis, but are still being stalled by a lack of fair market access. Trying to resolve that with crude price-control regulation is impossible, so therefore we must pitch price regulatin and implement systems so that true markets can sort out the issues. Otherwise, we'll simply continue to fight over meaninglesss questions (is wind generation economically viable? define viable. etc. etc.) endlessly.
Ferdinand E. Banks 3.10.09
Bob, as far as I know, generating companies tend to form a strong oligopoly, although obviously there are some regional monopolies. In the case of Sweden (and elsewhere) these oligopolies often grew stronger because some of these companies merged after deregulation. The mistaken belief in Sweden, the UK, California and elsewhere was that deregulation would result in increased investment in the wholesale sector, which would tend to weaken oligopolies, but this did not happen because the directors of generating companies and potential generating companies are not fools. I knew this years before electric deregulation became popular with half-educated economists, which is why I was against it.
You say that distribution companies are monopolies. Maybe they are and maybe they arn't, but in Germany there are a relatively few generators, and a couple of hundred distributors. The exact market form however is uninteresting to me because Germany has the highest electricity price in West Europe, thanks to the 'freedom' that was established in the electric market, and things are likely to stay that way because they too have some kind of independent system operator whose main function to organize what comes down to a theft from consumers, while employees of this 'brokerage' enjoy marvelous salaries and working conditions. Unfortunately I have some other work to do now, but deregulation is one of my favorite subjects, and I can assure you that if this discussion continues I will make you familiar with all of the details of this scam. Scam! I remember asking one of my best students here if he knew anything about Nordpool, and his answer came back loud and clear: just another scam.
Let me also mention that in this country the directors of the large industries were initially in favor of deregulation. They have changed their tune now. One of the directors of the employers or industry organizations published an article in one of the leading newspapers asking for a return to deregulation. Why didn't the government do this? The answer is because like you and the author of this article they do not understand the underlying economics. They actually believe that deregulation will make things better for consumers - by which they mean households and industries. What you should do though is to go into EnergyBiz Insider, and look for the letters about deregulation. As one of them pointed out, in my former home state, Illinois, electric deregulation was worse than a scam.
Oh no, Bob. I consider myself a member of the theory police where this subject is concerned, although I would prefer not having to make any 'arrests' for a while.
Bob Amorosi 3.10.09
No one disputes that all out deregulation attempts had failed in the past, or is doomed to fail again. Just read Len's comment above. The real problem with failures of deregulation is lack of genuine competition allowing consumers to purchase electricity from the source of their choice. Deregulation will never work under the current market paradigms we have in a monopolized local distribution utility business. Len and I are suggesting his IMEUC market reforms along with more technology in the hands of consumers and in the grid, to permit genuine competition.
I don't know what aspects of a market reform concept you don't understand, since all you like to do is recant the failed experiences in the past with attempts at deregulation that DIDN”T include any market reforms. Anyway, I wouldn't worry too much because regulation of consumer rates won't be disappearing yet for a long time in most places. But over time if distributed local generation takes off commercially and becomes economically successful on a wide scale, there will be growing pressures from the public to access electricity without the burden of regulated rates, because if nothing else there will be LOTS of generators around, big and small.
You seem to believe widespread local generation including renewable sources will never be economical to compete with the economy of scales of large central generators. Time will tell, but given all the money being poured into R&D of these technologies, I wouldn’t bet on it. You see Fred this is where you and I differ hugely. I as an engineer have witnessed what can happen with substantial investment in R&D, and unlike you I generally have faith in it, and even admire those who at least take the risks trying. There is never any guarantee of winning, but it’s like playing lotteries - if you don’t spend on the tickets, you are guaranteed to lose.
I may not understand all economics principles because I am not an economist, but I do understand capitalism and what engineering can do to commercialize new products, given the money invested to do it.
Len Gould 3.10.09
Well, Fred, I must concede that you certainly know a lot more about economics, and expecially power industry marketing, than I do, and given your adamant opposition to the automated market system i've proposed, must conclude that there are still fundamental design flaws in it. I just wish you had the time to point those out to me.
Ferdinand E. Banks 3.11.09
This 'discussion' began with the statement by the author that Professor Stigler had shown that regulation will not work, which ostensibly was backed up by econometrics . This is completely and totally wrong, and worse irrelevant. Actually it is just as silly as saying that Fred Banks has shown that deregulation will not work.
Then Bob wants to tell me about the independent system operator, one of the first probably came into operation in the famous California fiasco, and whose main function turned out to be making it easier for generators to steal from consumers. We have something like this in Scandinavia, and believe me I'm almost glad, because if consumers are dumb enough to bid for or allow their distribution companies to bid for low cost electricity generated in their countries against buyers in high electric-price countries, they deserve what they get.
And Len, about my knowledge of power industry marketing, believe me, I know/knew a lot, but at this moment hardly anything. One of the reasons is that it's not necessary to know anything, because of my intimate knowledge of the bottom line. I have been encountering members of the deregulation booster club at seminars and conferences in 4 or 5 countries for the last 8 years, and I've never seen such a smooth - though at the same time ignorant - collection of pretentious hustlers, almost all of whom are subsidized in one way or other by power companies and 'other interested' organizations and individuals who are involved with the very lucrative power industry. The problem here is that engineers dont know enough about the economics of regulation/deregulation, and economists as a rule know even less than engineers, because those ladies and gentlemen are lazier and more frustrated than the engineers, and as a rule are surrounded by fools..
About local generation being able to compete with central generation (in e.g. nuclear plants). That's just Amory Lovins type of nonsense. Of course there will be more of this, which is well and good, but a few swans dont make a summer.
Bob Amorosi 3.11.09
Well Fred, if you think Amory Lovins type of nonsense describes local generation being able to compete with central generation, perhaps you should be more careful in your quick assumptions. Like Alan Caruba on this website, you ignore what a lot of business people around the world are working hard to change, with significant dollars being invested.
One of the inherent costs of large central generators built into the grid are the long distance grid transmission lines themselves. Most local generation won't need these large expensive high-voltage lines that travel miles across the countryside. So if the other local generator costs come down sufficiently, particularly for the renewable sources that have free fuel costs, they WILL reach a point where they can compete with central generators in time. Just because local generation hasn’t reached a competitive level yet with central generation is no excuse to give up on them, as you continually insist on doing. Their costs ARE dropping as a direct result of expanded commercialization, and as a direct result of the intensive R&D going on to improve them.
In engineering design, the mark of creativity and innovation are those who are not satisfied with the status quo in a given technology, and continually challenge those who say advancements are just not possible. It’s a good thing you quit engineering school years ago Fred, you would have not made a very good designer in my opinion.
Len Gould 3.11.09
Well it looks, Fred, as though your objections to any market-based electricity pricing mechanism are based in two or perhaps three issues. 1) the price-increasing effect of exports to higher-cost neighbours 2) the tendancy of generating entities to charge higher prices rather than lower prices under de-regulation when allowed. 3) possibly the difficulty of getting nuclear generation financed under the uncertainties of a market-based system. On the issues:
1) price-increasing effect of exports Though I can see the problems this causes for Sweden (and in fact any neighbour of Germany), I don't see i applying here in North America, as here most neighbouring jurisdictions are already relatively close enough in wholesale price that the cost of transmission and losses keeps eg. Ontario fairly well able to set its own local prices. The situation where eg. Sweden has very low-cost generation due to reliable storage hydro and fairly old nuclear while Germany has quite high-cost generation due to banning of nuclear and commitment to wind generation, seems to me to be a fairly unique case and not necessarily a general case.
2) higher prices rather than lower prices under de-regulation I think you impute this tendancy to de-regulation only, in error. One example: Atomic Energy Canada Ltd. is clearly on record as having offered to construct its new ACR1000 Gen3+ design, an advance of the CANDU 6, just a few years ago for significantly less than US$1500/ kw (in fact, $1100 to 1300, though the exchange rate has bounced around a lot since, difficult). The CANDU reactor generates equal-cost power to competing designs because though it IS more expensive per kw to build than eg. PWR's or BWR's, having more complex controls, costly initial charge of heavy water, on-power refueling robots etc., it is cheaper to operate because no fuel enrichment needed. So US$1500 should be the high end of present new reactor construction costs. But I'm consistently seeing now public statements of US$4000+ to build light-water reactors. My conclusion is that PERHAPS there is some effect of price regulation in there, eg. THE HIGHER THE UTILITY CAN GET THE COSTS OF GENERATION, THE MORE MONEY THEY MAKE because regulators like to set profit as a fixed percentage of costs. The incentives operate on both de-regulated systems, as you fear, and on regulated systems, which is rarely ever acknowledged.
3) I don't see "getting financed under de-regulation" as an issue for nuclear. Witness Bruce Power in Canada, a private entity presently operating 4,200 MW of Nuclear in Ontario under de-regulation. They fought strongly to win the contract to build the 2 new reactors now being purchased, but lost out to OPG (government owned competing generating company). Their reaction to loosing the first 2 was to propose an ADDITIONAL 4 to 8 new reactors at 3 other sites in Ontario, with sufficient commitment that they've committed $300 million to the licensing process. They also are proposing concurrently building 2 new reactors in Alberta and 2 more in Saskatchewan, all privately financed. All these locations are presently operating de-regulated markets (except perhaps Sask), so I don't think de-regulation hurts nuclear build.
In summary, I dislike "present" de-regulation as much as you do, but rather than your proposed solution, to revert to regulation, I'd like to see us move to a genuine free market system (IMEUC perhaps with a modified market design). I believe it would work well, and provide many benefits including prices at least as low as full regulation.
Ferdinand E. Banks 3.11.09
Strange how you have started to get everything wrong, Bob. I was first in my class in everything that I liked, to include machine design, structural design, thermodynamics,...and some others. I also worked as an engineer for the US Navy designing terminal installations for radar and 40 mm anti-aircraft weapons. But that isn't the best: The best is that I failed everything except english and history my first year of engineering school, and shortly after was expelled from the US Army's leadership school - the only expellee in my class.
That, however, is irrelevant for this discussion. What is relevant here is that business persons have not and are not going to waste their time and money with serious investment in 'distributed power', or local generation or whatever they call it. They will TALK a good game, but they are not playing. I see that here in Sweden, and the biggest hypocrite of all is the director of Vattenfall - one of the largest generators/utilities in Europe - who can't open his mouth without telling folks how green he is. The wave of the future is the new Finnish Gen 3, which weighs in at 1600 MW.
I can also assurel you that I would love to trash distributed investment, but only if I was paid to do so. Why bother otherwise when people who should know better, like your good self, have decided to believe in the scam known as electric deregulation. Incidentally, given that sitting in a Gen 3 nuclear plant 'is safer than sitting in your Cadillac in front of your mansion, long distance power lines are mostly unnecessary, since the reactors can be in your back yard.
Bob Amorosi 3.11.09
Fred, if deregulation of ANY sort is a scam as you claim, then why are you not pointing out the design deficiencies of Len Gould's IMEUC reform proposals he has asked for above. To my knowledge, it is very unique and has never been tried by anyone. To imply that any deregulation scheme is doomed to failure is mere theory on your part if some schemes like Len's has never been tried, but alas will never work. In fact it insinuates that even Len's proposals are a scam. I am very surprised, for having worked in engineering before, surely you would / should be open to at least critique alternative market designs that potentially can overcome past deficiencies in design.
Furthermore, I don't think the massive numbers of wind mills now running in the US or in Canada were donated from shrewd business people "talk". Someone developed them with investment money, built, and paid for them, and I'm certain it wasn't the owners of large central generators or utility distribution companies.
Bob Amorosi 3.11.09
If small nuclear reactors are possible to be located in my back yard, then they would qualify as distributed local generation. Let us know when one is commercially available, and can be implemented without massive government safety regulations overseeing them adding their costs. We would love to be educated on its engineering marvels.
Bob Amorosi 3.11.09
Sorry to disappoint anyone further about nuclear, but president Obama's huge economic stimulus package bill was revised today dropping nuclear and coal subsidies but it still includes massive spending on green energy initiatives, including efficiency upgrade incentives. The final version of the bill deleted $50 billion in loan guarantees for new nuclear station investments, and $4.6 billion for carbon-capture-and-sequestration R&D.
Your message is apparently not getting though to Washington it seems Fred. What a shame. Here in Ontario though we still have plans to build at least one large new nuclear station.
Ferdinand E. Banks 3.11.09
Bob, what you call the "massive" number of windmills in the US supplies about or may less than 1 % of generated power. It's mostly a scam, engineered by people like Boone Pickens. I thought everybody in this forum knew that.
As for getting through to Washington, when Obama started talking about increasing the number of American soldiers in Afghanistan he turned me into a Republican if the republicans choose the right presidential and vice presidential candidates in 2012.
And yes, Bob, that local generation theory of yours is CRANK, just like Obama's energy program.
And Len, I've been trying to get more information on the Candu reactor. When I go back to Paris in a few months I'll look more closely at these cost estimates, because if it is $1500/kW, then that reactpr os strictly unbeatable, and I'll try to get through to somebody, to use Bob's expression, though not the guy who wants to send 17000 more soldiers to a war that was won 5 years ago, and cannot be won again.
Bob Amorosi 3.11.09
Five to ten years from now we'll see whose theories are crank and whose are not. In the meantime Fred, don't bother critiquing Len's IMEUC reform proposals as he asked you to do. It's pretty obvious now it will merely be propaganda to erase any doubts that your theories might possibly be crank. Heaven forbid, how dare I even suggest they might be, but as they say there's a first time for everything.
I hate to disappoint you further Fred, but not only is Obama's administration set to stimulate and advance renewable source and local distributed generation methods but so is Ontario with their Green Energy Act. And judging by what California has been doing, and Europe had started years ago, you have your work cut out for yourself to get through to lots of prominent people in governments all around the world. Good luck, you're going to need it.
Ferdinand E. Banks 3.12.09
Yes, heaven forbid as you put it Bob, but you see, you're talking about the future where deregulation is concerned, while I'm talking about the past. YOU DONT SEEM TO COMPREHEND WHAT TOOK PLACE 5 OR 10 YEARS AGO, SO WHAT MAKES YOU AN EXPERT ON 5 OR 10 YEARS IN THE FUTURE?
NOW, LET ME GIVE YOU AND EVERYONE ELSE CHECKING OUT THIS DISCUSSION THE BOTTOM LINE. They have just produced a green energy thing here in Sweden also. The purpose in both Sweden and Canada is to get votes or curry favor from persons who believe or say that they believe that green energy can replace nuclear. This is what they call a scam. Yes, more green energy is necessary, but it probably must sit on a larger nuclear base. Why should that be so difficult to understand? And once more, if e,g, CANDU reactors can generate electricity for $1500/kWh, then no collection of fools in Sweden or Canada or anywhere else is going to convince anyone of any importance in the future that large nuclear installations should be replaced by what you call local generation, regardless of what those persons of importance say when the TV cameras are turned in their direction. $1500/kWh is a number that a smart guy like me can run with.
Where getting through to prominent people is concerned, I've never been able to get through to them in the past, and so I don't see why things should be any different in the future. Here I can go back to when I was boarded out of leadership school in the army. I had done something pretty bad, although I don't know what it was, nor did they tell me, but perhaps they didn't tell me because they knew that I didn't give a _______ .
Ferdinand E. Banks 3.12.09
I've just had a look at a thick document prepared by one of the most prestigious consultancies on the face of the earth. Now I know why Bob has suddenly abandoned his common sense and is talking about windmills in the countryside replacing nuclear, because that document is the essence of pretentiousness and nuttiness. But even so it's a valuable document because it says what the Great Unlearned want to hear: NUCLEAR IS UNNECESSARY - WIND (AND THE LIKE) WILL TAKE US WHERE WE WANT TO GO.
The interesting thing for me were the academic referees of the document, where with the exception of Lord Stern there was hardly a complete analytical brain between them. As for Lord Stern, he is indeed a better mathematical economist than yours truly - though definitely not a better teacher of that subject than humble Fred - but his Lordship's highly recognized book on warming is a disgrace to the profession, as is the document referred to above, and neither of the two should have been written, and if written should not have been paid for.
Bob Amorosi 3.12.09
I never believed for a minute that wind mills or any other renewable source generation method will completely REPLACE nuclear, but the arrogance of the likes of Fred love to put words in other people's mouths all the time. In fact I don't claim ANY single generation source will totally dominate our future energy needs.
As much as Fred keeps dreaming, and bashing anyone who differs with him on this website, nuclear will NOT be the ONLY solution implemented, merely one of several. Nor will it be a dominant solution. My claim here now has ABSOLUTELY NOTHING TO DO WITH ME not seeing what has happened over the last 10 years and claiming to be some sort of an expert on deregulation. On the contrary, it is common sense to simply look around and accept the fact that Fred's or anyone else's vision of nuclear or bust is NOT being shared by the people the matter, namely increasing numbers of policy makers in governments all over the world.
Sweat dreams Fred, or should I say more accurately don't let your nightmares get the better of you.
Bob Amorosi 3.12.09
By the way, Toyota claimed yesterday they are targeting sales of 1 million Prius hybrids on the road by next year, 10% in Europe alone. Some say this is too optimistic, but I see more and more of them on Ontario's roads every month. Now the Prius is not a plug-in, but the plug-ins are coming starting with the Chevy Volt next year provided GM doesn't fail. Many other hybrid models are continually being announced by auto companies coming soon too. And for the hybrids like Prius that are not plug-ins, I'll bet we'll soon see aftermarket chargers appearing for sale that you can retrofit that will convert a non-plug-in to a plug-in.
Another one of my wonky non-expert predictions is that within 5 years we could see potentially millions of PHEVs on our roads, especially when consumers discover the bargain energy from electricity rates are compared to the cost energy in gasoline. Sorry again to disappoint expert economists like Fred, but it doesn't take being an economist to predict this. All it takes is the common sense of most average consumers.
Many are working on grid-wise technologies that could some day tap into PHEVs as mass distributed storage for the grid that can feed back into the grid when needed. I have news for you Fred, this is precisely one form of a distributed local generation resource identified as an application for Smart Grid development. And if it materializes as many are working towards seeing, just wait for it, some people are going to charge their PHEVs with a rooftop solar PV or mini-windmill to make money selling power into the grid. Sound like science fiction? The technology exists and isn't rocket science today to do this.
Len Gould 3.12.09
Fred: "About local generation being able to compete with central generation (in e.g. nuclear plants). That's just Amory Lovins type of nonsense." -- Something which does unarguably make sense in a non-Lovins way, is moving to burning all fossil fuels used for space heating and power generation, (natural gas, home heating oil) in micro-generating units rather than in simple furnaces or in large central turbines. Point: The best electrical generating efficiency even a large complex CCGT can get burning gas is perhaps "nearly" 60% in ideal conditions when new, a lot of nat gas is burned in simple-cycle peakers getting perhaps 25% to 30%, while present home heating furnaces will get 0% (electrical generating efficiency). It should be a no-brainer to design a cheap stirling-cycle engine-generator to get 15% electrical effiiency while providing an additional 75% efficiency as heat from the exhaust. What that means to the homeowner is that by purchasing .15 more kwh of natural gas per kwh of natural gas previously purchased solely for heating, they also get .15 kwh of electricity. Essentially the electricity is generated at 100% efficiency, at the price per kwh of natual gas. With a typical home requiring about 6 kw average continuous of space and water heating "in season", it can essentially get its typical 1 kw of electricity at the cost of natural gas.
To now, the benefits of this system have not outweighed the cost, but with recent and future energy cost increases, and developments in generation like GE's SOFC's, it is only a matter of time. It is time for the grid and electricity markets to get ready.
Bob Amorosi 3.12.09
Getting back to the subject of this article, the development and adoption of many other generation sources in Ontario, or elsewhere, particularly large numbers of smaller local generation sites, requires a parallel effort we all now as Smart Grid. A crucial necessity for Smart Grid to be realized is the development and commercialization of the technologies behind a smarter grid. Although some are being worked on as I write this, there needs to be far more investment in its R&D to make it affordable and practical by our utility industry, and by ratepayers. This is especially true for any self-healing features in a Smart Grid because these represent the most advanced characteristics of a reliable utility grid. They are presently the subject of much theory but not much practice, as described in the other article currently posted on this website “Research on the Characteristics of a Modern Grid: Self Heals” by Bruce Renz.
Without substantially more investment in R&D, we probably face waiting many years if not decades for the utility industry to adopt many other generation sources and Smart Grid on a wide scale. The utility industry suffers from a chronic lack of resident engineers to develop Smart Grid applications, starved by years of under-funding to re-invest into hiring fresh engineers to investigate new technologies. Money for R&D of Smart Grid implementation and applications is badly needed not only for pure research but for applied research and development of new commercial grid products and systems. It is the utility engineers that make it happen, not just pure research alone in laboratories or by outside consultants.
There are many other historical examples in high-tech industries that illustrate this. Case in point. Electronic LED devices have been around since they were discovered three decades ago from pure research in laboratories. They first appeared in consumer products in the 1970’s as small lights in stereos and the numeric readouts in calculators. Today they are making massive inroads into marvelous new lighting applications for energy efficiency in commercial and residential LED lighting. This is a direct result of the heroic creative design engineers "applying" knowledge of LEDs, recognizing their potential new applications and developing practical applications over time. The semiconductor industry has also benefited from their further research and development re-investment, to create more color varieties of larger and more powerful LED devices than ever thought possible before, all driven by the wealth created from commercialization of their new applications.
If I had my way, every utility company would get funding from regulators to hire at least one electronics and computer engineer, and then develop commercial partnerships with the high-tech industry and traditional utility asset manufacturers (who make the breaker switches and sub-station transformers etc.). By offering their utility grids as platforms for experiments and pilot trials, utility companies have an opportunity to play a critical role in developing new Smart Grid systems with these partners. Combined too with regulatory reform, utility companies could later sell new systems they help to develop to other utilities in other parts of the world, as a way to raise more income. Sadly, such ambitious ventures are not even on the utility industry’s or governments’ or regulators’ radar screens.
Ferdinand E. Banks 3.12.09
Bob, THE solution is electricity. Large amounts of reliable electricity. I'm not going to elaborate on that because if you dont understand and accept that short sentence, then you couldn't possibly understand the elaboration. LARGE AMOUNTS OF RELIABLE ELECTRICITY IS THE ANSWER.
I haven't attempted to explain that to the movers and shakers in Sweden because they are too dumb to understand. Try this one on. This country is one of the most environmentally successful in the world, but they have decided to send a few hundred million dollars to stone age countries in order to satisfy some BS mandate from somebody. In this country hydro and nuclear supplies most of the electricity, which means that there are very few emissions from electric generators. SO, instead of suppressing emissions from transportation (which is the major source of CO2 emissions) by supporting ethanol producers in this country, the prominent persons who impress you so much let the ethanol producers here go bankrupt, and send money to Pago Pago and Guadacanal - or somewhere similar.
That brings us to your talk about hybrids and PHEVs. Hybrids and PHEVs mean large amounts of reliable electricity, and reliable electricity in my book means nuclear. But I'll save that lecture for some other time.
Ferdinand E. Banks 3.12.09
One final remark, Bob. You asked me if something sounded like science fiction. No, it doesn't sound like science fiction. Where the next decade (or maybe two is concerned), it sounds like foolishness. It sounds crank. Looney-tune.
Bob Amorosi 3.12.09
I perfectly agree large nuclear stations supply us already with large amounts of reliable electricity supply. Our generator fleet in Ontario has I believe over 50% of its total power capacity in nuclear right now. The apparent economic problem is many people and government policymakers don't want to cough up the huge capital to build lots of new nuclear plants without other power sources in the mix, no matter how reliable nuclear may be. Many believe, sometimes wrongly, that with enough engineering applied to other sources, the latter can be made almost as reliable as nuclear. Maybe not as plentiful a supply, but just as useful.
With carbon cap&trade or carbon tax schemes looming, consumer rates for electricity across the US within a year are set to double or more according to many utility industry execs in the latest reports. Now under this scenario, do you think for a minute that regulators and consumers will have the stomach to cough up huge capital investments in a blitz of building lots of new nuclear stations? I seriously doubt it very much indeed. If nuclear had much lower up-front costs, I'm sure things would be much different.
I am not against nuclear, but I don’t blame those who want and demand alternatives and choice. Consumers are accustomed to having choices, and now government policymakers are going to see to it that we do as well with more widespread forms of power generation.
Ferdinand E. Banks 3.13.09
Alternatives and choice are certainly alright with me, but tht isn't what we are talking about here. What we are talking about is 'choosers' being misled by the neurotic propaganda of the anti-nuclear booster club. Under no circumstances do I consider myself qualified to calculate how much nuclear a country or region should have, although in the case of Ontario, which according to you has a 50% nuclear generating capacity, I believe that - sooner or later - decision makers will be able to decide the optimal generating arrangement.
For instance, if we take Len Gould's figure of $1500/kW as the investment cost for AECL equipment, then it is absolutely clear to me that the existing nuclear inventory is in no danger of being torn down and turned into plow shares.
Bob Amorosi 3.13.09
I have never said the existing nuclear fleet is in danger of being torn down in Ontario to be replaced by distributed local generation. We're talking about GROWTH in the generator fleet, and currently there are plans to build only one more central nuclear plant. Only coal is in danger of being torn down, and relatively soon over the next few years, and along the way help add much more distributed local generation including wind.
Fred seems to be paranoid that by GROWING the other sources of distributed generation, the nuclear industry is suffering from some sort of propaganda campaign against them. Sounds very much to me like the Alan Caruba mentality of my way or the highway. Maybe he should look up the definition of propaganda in light of his own rants' words.
Like I said Fred, keep on dreaming, huge efforts to build only lots more nuclear stations is not policymakers' radar screens in Ontario, and not in most of the rest of the world. Government central bankers would have to print huge sums of money to do so, and that is the last thing they want to do.
Bob Amorosi 3.13.09
I have more news for you Fred. The "science fiction" that I mentioned above, you know the one that you quickly pounced on to ridicule as “foolishness”, “crank,” and “looney-tune”, is ALREADY HAPPENING.
There are growing numbers of wealthy consumers who have invested in rooftop solar or wind mills as their costs continue to drop. An individual consumer can sell energy back into the grid from their own local generator on their property. It doesn't use Plug-in Hybrid Electric Vehicles for any storage (yet), but if desired you can add a bank of batteries for storage inside the house. Even without storage, these local generators can inject energy back into the grid on a part-time basis.
Don’t believe me yet Fred? Ontario's urban local utility distributors including my own have policies in place now for residential or commercial customers planning to install their own local generation on their own property. During some periods of the day, any excess generating capacity from a consumer's system can be delivered back into the grid, and during the balance of the day the customer can draw power conventionally from the grid. An appropriate service meter to measure power flow in both directions is placed on the customer, and the utility company pays or credits the customer a specified rate for the energy they inject into the grid.
So there !
Bob Amorosi 3.13.09
Fred, get your pills or booze out, I think you'll need them because you won't be able to sleep well after this.
In today's news media the Ontario government has announced sweeping huge incentives to develop large numbers of distributed local generators, both large and small in size. In the on-line Toronto Star newspaper article by energy reporter Tyler Hamilton titled "Fixed Prices Proposed For Green Energy Projects", web link below, Ontario is offering 20-YEAR CONTRACTS of fixed heavily subsidized prices to buy power from them. If you look at the price numbers, they are miles above current consumer retail rates. So that tells me consumer rates are set to rise very substantially over time, something I have been preaching for months on this website. The prices offered are broken out according to generator type, with the highest price a whopping 80.2 cents per kwhr for rooftop solar PV systems under 10kW !
Our energy minister George Smitherman is quoted in it: "We'd have to get to 100,000 rooftop installations to get to just one per cent of overall installed (power) capacity in the province," said Smitherman.
Fixed Prices Proposed For Green Energy Projects by Tyler Hamilton http://www.thestar.com/article/601464
With these lucrative levels of incentives, people will start considering increasing their mortgagies on new and existing homes to finance putting a rooftop generator on it.
Ferdinand E. Banks 3.13.09
What is new to you, Bob, is twenty years old to me. Maybe you should go back to school and learn how to count and read english. Twenty years is at least the amount of time that they have been talking about the 'renewables' revolution, and when you look at the numbers you see that quantitatively these alternative energies are trivial - although I dont have anything against them increasing.
BUT, I don't care whether they are trivial or not, quantitatively or qualitatively. As the leading academic energy economist in the world I have decided that most of my time is best spent trying to figure out what will happen with oil production and price, and trying to convince what you call prominent people that they should maintain the nuclear capacity in their region, and probably expand it somewhat.
I will also inform the FBI and CIA of the above, and suggest that you should come under their scrutiny if you insist on becoming involved with things that you don't seem to be able to understand, like nuclear and electric deregulation. Of course, whether those noble establishments are interested in my suggestions is quite another matter, but I wouldn't bet on it.
In so far as informing my good self about the energy prices and policies in your home state/province, I have the following to say. Nobody in their right mind would try to figure out the thinking of politicians or their advisors in a matter of this sort, even if they did have a useful education in energy economics - which they don't.
Bob Amorosi 3.13.09
The problem with you Fred is you are LIVING in the past twenty years, refusing to look forward into the next twenty, totally ignoring that people and money are continuously working to make distributed local generation lower cost and competitive with other traditional large central generators. We've been hearing many other things for the past twenty years too, like peak oil was coming but no one of any importance listened or believed in it until it actually happened finally.
Ontario politicians and I don't need an education in the economics of nuclear or deregulation to understand that electricity regulation will continue in my home province, and that nuclear will still be part of our electricity grid for a long time to come yet.
What you need to do Fred is wake up and smell the roses BEYOND the economics of yesterday and today, because the economics of one technology versus another have a BIG habit of CHANGING over time, all because of creative heroic design engineers who innovate, and quite often because of sympathetic government policymakers that provide incentives to commercialize their work. And THAT Fred is my lesson in economics !
Now that I think about it Fred, you would never survive in a modern research institution like a university as a professor, because most such places require recognition of innovation and a desire to pursue it and publish it. You fail miserably so on this.
Take that !
Bob Amorosi 3.13.09
One other thing Fred, since when is the FBI or CIA interested in ANYONE becoming involved in things they don't understand. Among other things, people go to school to better understand new things they are unfamiliar with, don't they? So that they can get involved with new things, right? Don't you as a professor in your profession actually promote people to learn? Give me a break.
You imply that little old me, an aging electronics design engineer would be some kind of threat to US lawmakers and US security if I became involved in the nuclear industry and promoting deregulation. HA! What a joke. If this isn't propaganda on your part, nothing else is.
Maybe you don't need my advice Fred about taking pills or a stiff drink to sleep better. From the sounds of your wild propaganda here, you must surely be on a lot of them already. Oh, and don't worry, I have no intention of getting involved in the nuclear industry or joining lobbyist groups to promote deregulation. It's not my area of specialty.
Bob Amorosi 3.13.09
Our old friend Malcolm, our resident Ontario nuclear industry profession voice on Energy Central has been ominously silent in this discussion. He has showed fierce opposition to widespread distributed local generation too in the past. I suppose his silence here suggests he is seething in disgust over what our Ontario government has announced in its Green Energy Act, and massively large incentives to promote investment in it by business people and especially average consumer home owners.
Malcolm, I hope you're reading this, and that someday your neighbors put up a rooftop solar PV or other system. Then you can have a drink on the patio with them every other summer day while the sound of money flowing into their bank accounts form Ontario's Power Authority (at 80.2 cents per kwhr) plays music in the background.
Ferdinand E. Banks 3.14.09
Malcolm, Madonna, George W., Bruce Willis, Eminen, Ice Cube and the rest of you rappers out there, better check out some of these sounds, For instance, "people and money" working to make distributed generation competitive with large central generators! Better check out 'Little House on the Prarie' while you are about it, and Big House at Langley Virginia, where CIA regulars meet and greet every day except Marilyn Monroe's birthday, when they are in the situation room watching 'Some Like it Hot'.
What about paying some attention to those "heroic design engineers" you mentioned. I worked with a few of those in Los Angeles - Northrup, Hughes - and Mister, when I was on a bus going to Fort Ord I thanked my lucky stars that I had seen the last of those gentlemen for a while. Incidentally, did I mention that I was fired by Huges. Well I was, and if you encounter my supervisor - Michael May - tell him that I thought of him a short time later when I was sitting on the Boul Mich, watching the real world go by.
About the economics of large central installations vs distributed generation. I think that there is room for both. If I were interested - which I'm not - I would elaborate on this, although I think that I'll let 'the market' work it out.
Bob Amorosi 3.14.09
Yes, I realize most people don't have the time or interest in paying much attention to those "heroic design engineers". Next time you board a modern plane to travel to your next propaganda seminar, or go shopping and buy electronic toys to play with, or type these blogs on your keyboard, or simply use electric power from those marvelous nuclear power plants you love so much, remember... it wasn't little old ladies or eccentric old economists that invented them. Picture our world without them and just maybe you wouldn't have a job either because we would all be living in the dark ages.
'The market' will work everything out, I completely agree. The nice thing about 'the market' is heroic design engineers know how to create new ones for new inventions all the time, for that is their job in spite of those who ignore and ridicule them. Most economists pretend they know better about how markets and the economy work, but in truth many would be typically better off pursuing a career in fortune telling.
Bob Amorosi 3.14.09
It should be apparent now that Fred is completely opposed to Len Gould's IMEUC market reform ideas for I'm sure he views them as a form of electricity deregulation. No debate necessary, no critiquing it necessary, for Fred knows best. When Ontario leads the way into the future with adopting widespread local distributed generation, Fred will look back one day and try to figure out how the markets and commercial activity and jobs that grew out of it came into being, for he surely will want some of the credit for predicting them as the "leading academic energy economist in the world".
Here's my prediction and advice as an armchair economist and dumb but heroic design engineer. Don't buy shares in companies making parts for nuclear plants. Those industries won't be growing as quickly as the ones involved in the distributed local generation business, especially in Ontario.
Ferdinand E. Banks 3.14.09
You seem to have some problem with the English language, Bob. Don't you remember me saying that I worked as an engineer for the US Navy, and that I had been first in a half dozen of my classes in engineering school. I could easily have been a design engineer in anything, but when the time came to make a choice between engineering and economics I chose the latter for reasons I prefer not to go into here - unless of course you pay me to go into them. By the way, at least 80 or 90 percent of my class left engineering after X years. They left because they weren't needed, and their bosses made that clear to them after a few years.
Something similar concerns Len's IMEUC. For me the bottom line with electric deregulation is not that it won't work, but that it hasn't worked. IT HASN'T WORKED! Please make some effort to understand that before you tell me about what is going to happen in 10 years. Even in California and Illinois there are ignoramuses who claim that it could have worked if only.... IT COULD HAVE WORKED IF ONLY THE PEOPLE WHO MIGHT HAVE HELPED IT TO WORK HAD NOT BEEN SO GREEDY! But they were greedy, and they are still greedy, and so that's that for that subject.
About this green nonsense of yours, didn't you see where Lord Browne said that he was wrong about emissions trading. He was wrong while the best energy economomist in the world was right again.
Bob Amorosi 3.14.09
I wouldn't pay you a cent Fred for anything, let alone explain why you chose economics. You see Fred I do understand the English language, and I understand business principles far better than you do.
The first rule in business in commercializing a product or technology is producing it for a price the market will bear. The ignoramuses who claim nuclear is the most economical source of electricity by far over any other source would fail business 101 miserably - if a market cannot bear the capital costs, it doesn't matter how good or efficient the product is.
The nuclear industry is its own worst enemy. They have a fuel supply that would last for hundreds of years to produce huge amounts of energy, an environmental footprint among the greenest and smallest in the power generation industry, and a technology that is highly advanced and reliable. But such is all a total complete waste if society cannot afford its up-front costs to implement it.
If you don’t understand this Fred, you are surely not a leading world economist in my book. If nuclear was the best source by far economically, banks and private investors would be lining up to finance building them, but most have heads on their shoulders from passing business 101, and are not.
Ferdinand E. Banks 3.15.09
I chose economics for three reasons that you - but not me - understand perfectly: WINE, WOMEN AND SONG. About banks and investors, they seem to be the problem today, and not the solution. But you wouldn't know that since you read comic books instead of newspapers.
Len puts the kW cost of nuclear at 1500 dollars. Let me suggest that you give some thought to waht that means as an up-front cost for a mondern society.
Bob Amorosi 3.15.09
OK Fred, lets agree the kW costs of nuclear are 1500 dollars. Compare that with a10kW rooftop solar PV system that typically costs 20000 dollars ballpark or more last time I looked, which is at least 2000 dollars per kW. Sure it's more than nuclear but at least it's on the same order of magnitude, not far above nuclear.
Now here's the real strategy Fred by our policymakers. To build many new nuclear plants and spend untold billions of dollars requires their huge up-front capital costs to be spread out by regulators with rate increases to all customers. This is a tough pill to swallow, because too many consumers will rebel and in many cases cannot afford the increases. It simply is political suicide. But governments also know that other consumers with deeper pockets COULD afford it. So the problem is how to tap into those consumers that have the deeper pockets first, while at the same time grow the grid’s generation capacity to keep up with demand growth.
The answer my dear economist is right before your eyes. Provide incentives to more affluent consumers to invest in distributed local generation, and if the incentives span many years, the addition of large numbers of new local small generators over time has a similar effect of growing the grid's capacity.
And the real goodies are this - as larger numbers of distributed local generators are commercialized, the businesses developing them expand, and more money gets reinvested back into R&D to refine those technologies which can lower their capital costs over time, potentially to become more competitive with nuclear. It comes down to spreading the huge capital costs of expanding the grid's capacity over a longer time frame, and tapping into deeper pockets first to pay for it.
At least the comic books I read don’t blind me to reality the way your wine, women, and song do.
Malcolm Rawlingson 3.15.09
Bob you are forgetting one detail in your argument. Please go out tonight at midnight and tell me if you see the Sun shining brightly. If you do then you are right and I am wrong. What you will see is that the Sun is not shining. That means the output of ALL solar rooftop photovoltaic systems is zero....that is nil none nothing...no electricity being produced at all. I would like it to be otherwise but the fact is that the fuel source for solar panels is not there half the time at least. So how you can possibly make the statement that rooftop solar is just as reliable as nuclear power just boggles my mind. It can ONLY be 50% at the very best in equatorial regions where there is about the same number of hours of daylight as night. In Northern hemispheres the number is even worse. Reliability is measured by one number and one number only for ALL generators and that is capacity factor. The amount of electricity ACTUALLY produced divided by the amount of electricity the generator COULD have produced if it operated 100% of the time at its maximum nameplate MW. For Solar that number is less than 50%. For nuclear that number is well over 90% and as a result of extraordinary efforts on the part of the nuclear industry for several reactors we are approaching 100%. So please do not try to convince any one that solar or wind generatorsare more reliable than nuclear. They simply are not and what is more never can be because you cannot improve the reliability of the wind or make the Sun shine more hours. I am all in favour of alternative sources of energy and conservation. All good things to do. But without large scale electricity storage I do not see wind or solar replacing large power plants as much as we might wish it to be. Wishing unfortunately does not replace mathematics. Malcolm
Bob Amorosi 3.15.09
No one is saying solar PV or other forms of distributed local generation are as reliable as nuclear. Practically nothing is as reliable as nuclear. But reliability comes at a premium cost which our politicians are willing to give up some of to live in the real world. I have experience in designing for reliability in electronics, such as military products, and believe me, high reliability ALWAYS costs more to implement.
Yes storage is the key issue, many know it, and are working on improving it. Even with today's inefficient expensive battery storage, its cost will come down as much more storage proliferates with PHEVs becoming mass marketed, at a dealership near you soon. Storage will become much like the electricity grid we all used to know with lots of excess peak capacity, and as long as we didn't exceed that capacity, no one cared how inefficient it was. That has now obviously changed.
Bob Amorosi 3.15.09
I should also add large central generators will never be completely be replaced by distributed local generation, only partially replaced. For example, instead of building say 3 or more large nuclear plants in Ontario to meet our future demand growth needs, plans are to get away with building just 1.
Bob Amorosi 3.15.09
By the way Fred, regulation requiring regulators to spread out huge new capital costs of building large central generators with rate increases to all consumers is regulation's biggest weakness. It is totally unfair to the poorer consumers in society who cannot afford substantial rate increases.
Just this past week, the regulators in Ontario (the Ontario Energy Board) were reported starting to look into differentiated consumer rates, specifically to lower them for low income consumers having trouble paying their utility bills in today's battered economy. Governments won't allow utility companies to let non-paying customers freeze in the dark by cutting off their power completely. Utility companies are presently allowed to put 15-amp breaker limiters on homes that default on their bills to reduce their losses, but the hardship endured in such measures are still very stiff.
If they proceed with this, it would be the first time regulation in Ontario would have non-uniform rates for all residential consumers, in essence a form of slight deregulation.
Just imagine the growth in defaults on bill payments if rates were to double or triple in the future, which could result in part from building many new large expensive nuclear plants simultaneously.
Ferdinand E. Banks 3.15.09
Bob, regulated Swedish electricity gave this country the lowest cost electricity in the world, and some of the lowest priced, so you just don't know what you are talking about now. And nobody said anything about building many large nuclear plants simultaneously, at least not now.
My suggestion is that you argue the details of what has or will happen in Ontario with Malcolm, because as far as I am concerned you've just got it wrong. And listen, just as Goebbels was able to fool the Gemans into continuing a war they could not win, you and your green friends seem to have some ambitions to do the same thing with the generation of electricity.
I don't understand this argument. You say that distributed generation will never replace large central generators, which is all that I have claimed. The problem for me is that I know that the green machine wants to replace ALL nuclear generation, every reactor, large or small.
Bob Amorosi 3.15.09
I can assure you Fred I have no green friends, nor have I ever said distributed generation will totally replace every reactor or other large central generator. I only predict they will eventually compete with them economically to become a comparable portion of generation in significant amounts of overall grid capacity in time.
Our regulated uniform electricity prices will go much higher in future because of carbon taxes or cap & trade schemes, and to pay for Smart Grid initiatives, not necessarily because of much more distributed local generation. If I don't know what I am talking about, then neither do large numbers of other people in the world, including many policymakers in many governments around the world.
The bottom line is nuclear has obscenely high up-front capital costs for most to be able to stomach regardless of its inherent advantages, and is the primary reason government policymakers, bankers, and private investors are refusing to line up to finance them in significantly larger numbers to meet our future demand growth. There will be some nuclear builds, but not on the scale the pro-nuclear club would prefer to see.
And as far as regulation is concerned, uniform consumer rates have served us pretty well until now, before peak oil and threatening climate change, and while we had loads of grid capacities. It also worked well as long as consumers in developed countries could enjoy unconstrained growth where most could afford regulated rates participating in prosperous economies. But these conditions have all changed or are changing for the worse, so I predict that while regulation of the electricity industry will remain for a long time yet, uniform consumer electricity rates will gradually morph into deregulation of rates in incremental steps, and not all at once. The reason I predict this is consumers will demand access to the generator of their choice when much more distributed local generation takes hold, akin to Len Gould’s IMEUC reform ideas, mainly because as regulated uniform rates skyrocket for the previously mentioned reasons, there will be a growing number of consumers at lower income levels who simply won’t be able to afford uniform electricity rates for everyone.
Good luck in spreading your message Fred, you’re going to need a lot of it. I rest my case.
Ferdinand E. Banks 3.16.09
If nuclear investment costs can be standardized at $1500/kW, then you have no case. And listen, to you and everybody else tuned in to this forum. I'm not in the business of spreading a message or anything else.
About your predictions and mine. I predicted the movements in the oil price and the failure of deregulation. I think that suffices for the time being.
Bob Amorosi 3.16.09
If nuclear (investment) is such a bargain as clearly implied by you Fred, we should all be seeing far bigger actions to build them in much greater numbers. But indeed we are not seeing this, so I think THAT suffices for the time being.
Ferdinand E. Banks 3.16.09
"...far bigger actions..." There it is in a nutshell: words of wisdom from a devoted reader of the financial and industrial literature.
THE NEW NUCLEAR RENAISSANCE HAS JUST STARTED, or so they say.
Better go down to the nearest 7-11 and put in an order for a comic book that tells you how the great worlds of finance and industry function.
Bob Amorosi 3.16.09
"THE NEW NUCLEAR RENAISSANCE HAS JUST STARTED"
Really?? I would like to believe it since I am actually a big fan of technological marvels like nuclear power plants. Sadly, such a renaissance is not underway in my backyard, or anywhere within sight of any 7-11's that sell those great comic books.
Even Obama's administration has decided to let the nuclear industry fend for itself by omitting their $50billion in loan guarantees first proposed from his stimulus package. But if you believe Fred, nuclear should theoretically have no trouble getting financial support based on their own strengths, and ultimately not need any government policymakers' help.
I hope to someday read all about nuclear’s emerging success stories in my next great comic book.
Bob Amorosi 3.16.09
Deregulation of consumer prices will never work as long as consumers must pay for their energy into one pool of money collected by a local distribution company (LDC) for redistribution to all competing generators in the wholesale market. So in my view there can never be any true retail competition until this changes.
Ontario's Green Energy Act legislation is proposing to allow LDCs the option to get back into the generator business but only for local distributed generators under 10MW. The reasoning is that feasibility of any new local distributed generation is very site specific, and implementing it impacts only the LDC's local grid, so therefore an LDC should have the freedom to participate in owning such generators if they choose to.
Now here's the biggest news of Ontario's Green Energy Act: it also proposes to allow LDCs to raise consumer rates to pay for any new consumer conservation projects if they choose to, spelling the potential end of uniform rates for all consumers in Ontario down the road. This in my view reads as a form of deregulation, if only a small step towards deregulation.
Ferdinand E. Banks 3.16.09
Yes, REALLY. REALLY AND TRULY. Better get in touch with someone who can read, Bob, or who reads something besides comic books, because EVERYONE knows that they are suiting up for the next nuclear game.
Bob Amorosi 3.16.09
For the benefit of all the uninformed readers like myself, I would love to hear from those “suiting up for the next nuclear game” on this website forum, besides our honorable professor Banks. To be safe however I won’t hold my breath waiting for them.
Ferdinand E. Banks 3.17.09
Another bad mistake on your part, Bob. There were 30 reactors on order the last time I heard, and another hundred or so projects were being discussed.
Would somebody please inform this man what is going on in the world.
Bob Amorosi 3.17.09
Sorry Fred, 30 reactors worldwide won’t solve North America’s problems in electricity. In Ontario we are discussing 100,000 solar PV rooftop systems to achieve 1% of our present total installed generator capacity. If it really takes off in Ontario to even say just 5% of installed capacity, that's half a million systems. Now add Obama's stimulus plans in the US and there could be literally millions of them in North America within 5 or 10 years. Put on your business hat, take out your calculator, and start crunching the numbers of what commercializing millions of solar PV systems will do to their production costs.
Yes indeed the markets will determine everything. But why should I waste my time repeating myself here anymore, for I am sure I will be told I am dreaming.
Ferdinand E. Banks 3.17.09
Solar in Canada, and the energy component of Obama's stimulus plan. Have you ever heard the song 'Wishing will make it so'. That isn't even a dream.
Why doesn't some Canadian come forward and tell friend Bob that he doesn't know what he's talking about?
Bob Amorosi 3.17.09
Sorry again Fred, it's not just me doing the talking. The 100,000 solar PV systems in Ontario are being discussed by Energy and Infrastructure Minister George Smitherman, and many others.
It would seem I'm a victim of Fred from being primarily the big bad messenger on this website, but whet he doesn't seem to care about is that by ridiculing me, he is ridiculing many others behind the scenes too, both here in Ontario, California, probably Texas, and of course in Washington.
I suggest you check out the latest EnergyCentral article just posted here titled “The Impending Resurgence of Small-site Decentralized Power Generation” by author Harry Valentine today. There’s far more money being invested in R&D for this than I had ever dreamed, in plenty of technologies besides solar PV.
Yes Fred, lots of educated scientists, engineers, and investors are putting their money where their mouth is, and talking about it just as I am for sure. If Fred doesn’t’ become even a bit more open minded, he risks being accused by other writers here of being hired or paid by the nuclear industry to keep up his smear campaign on this website, just as Alan Caruba has been similarly in past for his propaganda writing machine. But he won't be accused by me, rest assured. Fred would make a great salesman selling cars, being very tenacious and believing so strongly in the product of nuclear that his salesman's puffery is limitless.
Ferdinand E. Banks 3.18.09
You're running out of things to say, arn't you Bob, and you also need a memory course. Tam Hunt has already accused me of being a "shill" for the nuclear industry. As for investors putting their money where their mouths are, that's why so many of them are cleaning out their desks or going to the welfare offices.
Fred selling automobiles! Fred can't even drive. When he tried he drove a jeep into a brick wall and an assault gun into a ditch. As for Fred reading a new article by Mr Valentine on distributed power, would you ask Albert Einstein to read one of your comic books.
About Alan Caruba, his scientific work doesn't impress me, but I suspect that we agree on certain things. I'm still a US citizen and a real democrat, and not a fellow traveler, but the new president's energy intentions are strictly looney-tune. Of course, I wish him the best of luck, but under no circumstances do I intend to put my arrogant shoulder to his energy wheel.
Paul Stevens 3.18.09
Bob, I came to a jolting stop when I read your paragraph:
"No one is saying solar PV or other forms of distributed local generation are as reliable as nuclear. Practically nothing is as reliable as nuclear. But reliability comes at a premium cost which our politicians are willing to give up some of to live in the real world. I have experience in designing for reliability in electronics, such as military products, and believe me, high reliability ALWAYS costs more to implement."
This in response to Malcolm's pointing out that solar capacity factor (reliability) would always be less than 50% (sunshine CF). In a previous comment you applauded the $0.80 kwhr our government is willing to pay producers for solar generated electricity. That sounds to me like the worst of all possible worlds. Terrible reliability, and a price that is 13 times higher.
And yet, even at that price, the average homeowner can expect to take 12 years to payoff the $30,000 investment that would only provide 1/3 of his homes electricity if he were stupid enough to use it himself, instead of selling it back to the grid. (All figures from recent news story).
I don't know enough about Lens proposals to argue one way or the other, but I agree with Dr. Banks that the problem with regulation in Ontario was badly managed regulation. Taking the revenues generated, stripping them away from the old Ontario Hydro, and then starving the capital investment.
The huge cost over runs were largely the result of government interference, governmental delays mandated while the corporation had billions borrowed at a time of 18-20% interest rates, and include the cost of importing power from more expensive jurisdictions like NY when the projects weren't ready in time to meet the energy demands of the province.
Like I said, bad regulation. On the other hand, a lot of your argument is that we have only seen "bad deregulation". Not sure which I prefer. I know when I read about Californias $0.28 kwhr cost for electricity, compared to Ontarios 6.2 kwhr, I knwo where my preferences lie.
Bob Amorosi 3.18.09
No one in his right mind thinks that 80 cents per kwhr will become the rate consumers would accept paying for rates if solar PV became a substantial portion of generation in Ontario. It may be extremely out of whack with current rates, but the whole point is to spur investment in long payback timeframes, hence the 20-year guarantees.
Besides, I predict the 80-cents and 20-year carrots being offered are only temporary. I'll bet that these are only carrots to lure consumers with deep pockets. If the take-up starts rolling well with thousands of bites, and if the cost of the systems drop as they are already now doing, I expect the government to revise them in time to lower the subsidized 80-cent rate, and to shorten the guarantee of 20-years.
Bob Amorosi 3.18.09
Running out of things to say? Yes, I am because Tam is probably right, and Fred is probably sadly mistaken, but I am in no position to prove it one way or another.
Tam accusing Fred of being a shill was either before my time participating here on this website forum, or if it was after I certainly didn't pay much attention back them. I noticed Tam has nothing to say in this discussion because he is smart enough to avoid wasting his time anymore. After all, a shill is a shill, and would write just about anything to defend their propaganda without backing it up with any hard facts on this forum, regardless of what others say.
Fred badly needs a course on how capatalism works. It just might enlighten him on how untold numbers of scientists, engineers, and investors developing new technologies unthinkable before got rich in the US. Many created a whole new high-tech industry in California over the last 30-years that became the envy of the world. Developing distributed source generationor or any other alterantives to large central nuclear plants is certainly not without risks, but many see it as gold mine.
You can relax Fred, since I indeed have nothing more to say (to your propaganda).
Bob Amorosi 3.18.09
Also, anyone who invests in solar isn't doing it for higher reliability's sake. They are doing it to either make money selling power part time into the grid, and / or become independent of the grid if they invest in sufficient storage.
Smart meters today are designed to measure "delivered " AND "received" energy, because some customers will use power from the grid when the sun doesn't shine, and inject it back into the grid when it does shine.
Bob Amorosi 3.18.09
Check out the EnergyCentral article just published titled "Distributed Photovoltaics: Utility Integration Issues and Opportunities" by Tom Key.
If I had money to invest, I would be buying shares in solar PV companies right now. According to you, there must be a lot of stupid people out there buying these systems, but I don't think they are that stupid.
Kent Wright 3.18.09
On 3.16.09 Bob Amorosi said: “ ….. I would love to hear from those ‘suiting up for the next nuclear game’ on this website forum…..”
As of December 31, 2008 the US NRC has 17 new applications on the docket with target startup dates in the 2015 to 2020 range. [Source: Nuclear News, March 2009 issue, page 62; or you can go to the NRC’s website for same info] In rough numbers, this is 17% more power from nukes yielding perhaps >30% more grid energy per year. This is easy to say because the current fleet of around 100 reactors, at 10% of US nameplate power capacity, supplies 20% of the US’s electricity in kw-hours. Based upon this well-documented observation, each new kw of nuke capacity is worth essentially double the kw-hours of all other sources combined and around an order of magnitude greater than all non-combustible sources combined.
This cannot be brushed aside as “too little, too late.” The timeframe for getting even a few new nukes in service in the next decade is about the same timeframe that PV solar is projected for even a fraction of the deliverable kw-hours per year of electricity for the same nameplate capacity.
Take note that I place high value on GRID applications because the grid is, and will undoubtedly remain, the most reliable backup to intermittent sources -- just as it is already in California and Arizona rooftop solar projects. Upgrading the grid to accommodate new intermittents is in the works in the Obama administration. That plan is unlikely to be overtaken by a vast new system of batteries or thermal storage units, unless there are much stronger economic influences than now exist to force the change --- possible perhaps, but not likely in the coming decade.
On another note, the nuclear renaissance is not merely summed up in new reactors alone. The relicensing of about one-half of the existing reactor fleet has already raised “new”, or extended, capacity for an additional 20 years by around 50,000 MW. If the remaining reactors are granted renewals, the “new” MWs will double to over 100,000 MW without the cost of significant new investment expense.
Bob Amorosi 3.18.09
Ontario is only planning on one new nuclear plant, with its existing other three kept refurbished, and also completely shutter coal plants within several years. This has put tremendous pressure to accommodate capacity needs with large investment incentives in other forms of generation, including some NG and all non-combustibles, plus a major drive to increase efficiency and adopt a culture of conservation with the public.
I am not surprised by the re-licensing numbers for nuclear in the US since they simply cannot expire and be taken them off the grid. I have always maintained that nuclear will continue to be part of the grid, with some new plants built, but new ones will not appear in enough numbers or quickly enough to head off the problems facing the grid in the shorter term. I would also applaud the creative design engineers who have found ways to increase their output capacities too without building whole new reactors to do so.
My advice to invest in solar companies still sticks though because they will enjoy much higher growth rates that nuclear. The only thing that might change this is if existing nuclear plants were decommissioned and needed to be completely replaced in significant numbers. As for the 17 new plants being applied for, let’s see how many get approved.
Ferdinand E. Banks 3.18.09
Paul, I don't remember saying anything - or very much in any case - about deregulation in Ontario, because the classic deregulation blunder in Canada was in Alberta. Though it was a genuine deregulation blunder, it was not so important because Alberta is a rich province, and therefore the citizens of that region did not get overly upset. They had plenty of good things to think about, and money enough to buy these items if they were for sale.
But please note how Bob is always predicting things. He predicts - or implies - that some of the 17 new plants being applied for in the US will not be approved. Well I'm going to make a prediction at this point: REGARDLESS OF HOW MANY GET APPROVED, THAT IS MERELY THE FIRST STEP IN THE US' NUCLEAR RENAISSANCE. The new president's desire to attain some kind of energy independence - or partial energy independence - cannot go anywhere if he follows the advice of people like the good Bob, or for that matter his so-called energy team.
Bob also suggests that we buy some shares in solar something-or-other. Why not, because that isn't what we are talking about in this forum. As far as I know, Canada and the US are still free countries, and so amateur investment advisors are free to give all the half-baked advice they want, but that freedom cuts both ways. We can ignore what these people say, and question why they say it..
Bob Amorosi 3.18.09
Wow..... imagine that! . ..That the new US president would even think of following my half-baked advice, and that I also have a so-called energy "team" behind me. I am truly amazed by the persuasive powers of discussion forums like this. Or are these claims perhaps really just paranoia in realizing that propaganda's worst enemy is recognition of hard reality. If the new US president took my advice, or if droves of other professionals line up to be on some sort of team behind me, I would love to hear from them. The encouragement alone would be refreshing for a change.
I have more news for the pro-nuclear club. Concentrated solar power (CSP) has made breakthroughs in engineering design right here in Toronto Canada. Morgansolar.com has dramatically cut capital costs of CSP by using patented light-guide optics, needing more than 1000 times less silicon cell area for a given amount of sun-light area captured. I don't have cost fgures but they claim to be "extremely low cost" and "affordable" on their website.
Look out Malcolm, your neighbors in Ontario might be buying a Morgan Solar Inc. CSP system sooner than you think. Get the coolers and beer ready for your patio parties.
Kent Wright 3.18.09
I have no doubts that “investment incentives” in the form of government mandates and transfer payments will raise a great deal of new capacity in NG and non-combustibles, such as solar; and that such a plan will be a boon to investors and developers. In fact, I have already invested modestly in those areas for exactly those reasons. What I doubt is that the public, i.e., consumers, ratepayers and taxpayers, will benefit greatly.
Bob Amorosi 3.18.09
Consumers, ratepayers, and taxpayers, may not benefit greatly as you say, there is definitely risk involved. In the short term the greatest benefits will accrue to only those who buy into a system from all the incentives to sell power back into the grid. It's largely a gamble right now that the rest of us will benefit down the road, and that's what policymakers are betting the subsidies on. It's also very politically fashionable to promote anything green, so what better place to do it than in electricity generation, particularly when there are no easy choices to make for picking the future of generation. Fred will no doubt disagree completely here.
I have witnessed the pace of technological change in many things, accelerating over the years largely because computer-aided design and the internet have empowered designers like myself to create, realize, and test new ideas with lightning speed compared to even 20 years ago. Fred and many others will continue to ignore and belittle attempts to solve technical problems that others failed to solve long ago. Many today are being overcome with innovation all the time now.
Malcolm Rawlingson 3.18.09
Bob, Just to correct a slight error in your statements above. Ontario is planning to build two new nuclear power plants at Darlington each of 1200MW each. They will have capacity factors well into the 90 - 95% range and a lifespan in excess of 40 years. The site will be able to accommodate a further two plants of similar size should the Province opt for that. In addition our PRIVATE nuclear operator Bruce Power has already restarted two of the Bruce A reactors and is investing in the refurbishment of the other two. Go on the website of Bruce Power and see whether Bruce Power considers nuclear power a good investment. I think you will find they do and are making a good living doing it. In addition Bruce Power is proposing two power plants in Alberta, two in Saskatchewan and rumour has it they have purchased land next to the Nanticoke coal burning plant so that when the Province decides to close it they can use the power lines and switch yard for new nuclear.So the facts do not support your case in any way.
We have both public and private enterprises investing heavily in nuclear power. Hardly a vote of no confidence.
I applaud the technological breakthroughs in Solar Power. All we need is a technological breakthrough to make the Sun shine at night and we are well on our way to a solar utopia...until of course the government taxes the sunlight falling on your house...which they inevitable will. A simple light meter connected to your electricity meter and you could be subsidizing the Government. Make up for all the lost gas revenues from electric cars.
So we will be making so much solar energy we will put all the wind farms out of business. Ooops - aren't we investing billions in that bright idea already.
Also Bob can you invent for me a simple inexpensive method of removing three feet of snow off my roof since that is what tends to happen between November and March in my neck of the woods. I think it is called the Great Canadian Winter. All the great technological breakthroughs in solar technology don't work when under several feet of snow for months on end.
So while my neighbour is up on his roof risking life and limb to eke out a few watts of power I'll be sitting indoors in my nuclear powered house waiting to dial 911 when he falls off.
You really do need to be much more practical Bob.
All this reminds me of the great Urea Formaldehyde foam caper. A great Utopian save energy scheme that saved nothing and cost billions to rip it all out after the Government paid unsuspecting householders a fortune to install it in the first place and get sick as a result.
The neurotoxin (mercury vapour) filled light bulbs we are now promoting will go the same way when we see the levels of mercury in our kids going up as it inevitably will.
The world is littered with poorly thought out schemes Bob. All I am asking is for you to think before promoting the next stupid idea.
Malcolm Rawlingson 3.18.09
The problem with designing stuff at lightning speed is that you forget the basic fundamentals of what you are trying to do and get wrapped up in the design. That is very evident from Bob's writings here. And it means that stupid designs get produced at the same lightning speed as the good ones. The speed at which you can design something has NOTHING to do with its usefuleness and practicality. That requires careful up front thought not fast design.
The fundamentals of solar electric power in Canada and most of the Northern Hemisphere Bob are:
1. The Sun does not shine at night. 2. It snows in Winter 2. Water freezes to ice when the temperature falls below zero degrees centigrade.
Now please get your computer aided lightning speed design brain to work on THOSE basics of solar electric energy Bob and tell me what your solutions are.
The reason why these are important are:
1. The lack of sunshine at night cause the output of all photoelectric cells to fall to zero. Even the most efficient super fast deisgned - wizardry of modern technology cannot change the fact that of there are no photons there is no electricity. No Sun = No electrical output. 2. Similarly two to three feet of snow on your wonderfully efficient solar panel will cause its output to drop to zero. So count out your panels producing very much when the snow flies. 3. Freezing rain which is a weather phenomenon we get in Canada in the shoulder seasons will cover solar panels on exposed roof tops with a thick coating of opaque ice which also reduces the output of a solar panel to about zero. It can be there all season long unless some brave soul goes up on the roof to chip it off. Believe me its sticks to everything really well ie car windshields.
So one can expect output to be at best 50% of installed capacity at best and in winter months probably l10% or less. And as you see it has absolutely nothing to do with the design of the solar panel and lots to do with the weather.
All the great design in the world doesn't help you when you steer your ship into an iceberg. What is so much more important is to know where you are going not how fast you can get there.
Malcolm Rawlingson 3.18.09
I don't belong to a pro-nuclear club. I belong to the common sense club. I dislike bursting your bubble Bob but distributed energy is not poised to replace nuclear any time soon. If coal is phased out there is only one large scale means of generating electricity left. That is nuclear power. Without it your lights will go out and so will mine.
The people investing billions in nuclear power plants around the world know that what Fred says is accurate. They have done the math and done their forecasts and they know that the green energy is mostly a political lever and will not produce anything like the amount of electricity the world requires. Of course that means one thing. When supplies of electricity are short the price goes up way way up. So if your cost base is 1.5 - 2 c/Kw hour and you can sell it for twenty times that @ 95% capacity factor your power plant will be paid for in no time flat and all the rest is gravy.
A 1200MW plant selling power at 20C/kW-hr makes about 6 million a day gross. That is about 2 billion a year. Power plant paid for in 2 years and for the next 38 years is all gravy.
If you want to make good returns invest in power companies building nuclear plants.
Ferdinand E. Banks 3.19.09
Please allow me to add the following to what Malcolm said.
Two ignoramuses from the executive ranks of the anti-nuclear booster club published an article in a Swedish newspaper a few days ago claiming that nuclear was expensive relative to wind and solar and the rest. What these two fools want is not what Bob wants - i.e. Bob is willing to accept some nuclear. They want nuclear liquidated, and replaced in its entirety by wind and the rest.
The TV audience knows that this is madness, but they are so afraid of being unpopular that they read or listen to this nonsense.
Ergo, I think that Bob should back up and admit that maybe he got his facts wrong. We all have to do this from time to time, and believe me, it's no big deal.
Bob Amorosi 3.19.09
Those lightning speed computers and other heroic design engineers are working on battery storage solutions for solar, and PHEVs. They are not there yet, but I wouldn't be so hasty to rule them out. When PHEVs take off, just watch how much more effort and money is pumped into their engineering design.
When your neighbors are selling power into the grid Malcolm during daylight hours for 8 months of the year with their new solar rooftop systems in Canada, sipping drinks on the patio while money is flowing into their bank accounts, you may regret someday calling them stupid ideas.
I don't work in the power industry but as an electrical engineer even I understand the basic fact that the grid is CAPABLE of handling part-time generator sources, and one of the Smart Grid initiative's purposes is to handle a LOT more of them. If the grid wasn't capable we wouldn't have peaking plants now would we.
Bob Amorosi 3.19.09
"Ergo, I think that Bob should back up and admit that maybe he got his facts wrong"
Perhaps I will regardomg solar power when we get a snowstorm in Toronto Canada in July.
Bob Amorosi 3.19.09
In the latest EnergyCentral article titled "Distributed Photovoltaics: Utility Integration Issues and Opportunities" author David Key writes;
"Conventional grid-tied and off-grid PV will be used on rooftops, in ground-mounted arrays, and as components in end-use devices. Building-integrated PV (BIPV) systems and novel grid-interactive and grid-independent devices will be enabled by advanced PV, inverter, storage, communications, and end-use technologies. According to previous EPRI analysis, distributed PV likely will begin driving significant changes in the electricity enterprise within the next decade in many regions of the country."
According to you Malcolm, and Fred, the US and Canada are just full of people in the utility industry with stupid and impractical ideas let alone the TV audience.
I should have learned by now and simply stop writing on this forum and keep my mouth shut. It baffles me why I get lambasted for posting my comments when the authors actually publishing articles on this prominent subject seem to be immune to it.
Bob Amorosi 3.19.09
Regarding nuclear in Ontario, I realize there are two new reactors planned but they are to be built last I heard at the existing Darlington nuclear plant site, and not as two separate plants. Hence I think of them at one new nuclear plant. It’s too bad for the Nanticoke coal plant that is slated to close permanently, there was a recent proposal by the Bruce nuclear plant owners to build the new reactors there when the coal plant is shuttered, but the Ontario government refused.
Jim Beyer 3.19.09
Perhaps someone could enlighten me here. Honestly. With respect to electricity distribution and use, aren't the industrial and residential users completely different types of consumers? (With commercial users somewhere in between?). It would seem to me industrial users would be price sensitive, large users per capita, lower infrastructure costs (due to high density of use).
Residential consumers are less price sensitive, low use per capita, and very high infrastructure costs (all those meters monitoring $20 per month in electricity). My vague understanding is that the industry is split into rough thirds for residential, commercial, and industrial. This dichotomy of the system is probably a huge motivator for a regulated electricity economy, as the market forces are not aligned.
It makes sense that residential electricity should cost more, due to the much higher infrastructure costs. The cost of the electricity itself is probable negligible to that equation. Likewise, the VALUE of DG (distributed generation) is in the avoided infrastructure costs, over time. The (high) cost of DG is likewise negligible in this equation. (We DO have the reality that much of this infrastructure is already in place, however.)
It would seem to me that DG would be most beneficial to residences, whereas large single plants like nuclear power would benefit industrial. Again, commercial is somewhere in between. (A big-box store like a Wal-Mart actually has enough roof area to power itself via solar, if it could afford to. No way that could happen with any sort of factory.)
It would seem to me that the electricity providers makes lots of cash on the industries, and lose money or maybe just break even on the residential market. I'd think they'd applaud DG in the residences, as it would cut down on their infrastructure needs, over time.
Any DG that can even just approximate base-load (e.g. solar, much less so wind) could be banked against the existing power plants. Over time, if successful, DG could even result in deferring the need for new plants.
I guess I'm not looking at this as an either-or thing, because the reality is that industrial vs. residential energy use are as different as apples and oranges.
Malcolm Rawlingson 3.19.09
Ah Jim...some common sense. Of course the markets are different. If you take away or reduce the effectiveness of the base load power how long do you really think those big power consuming industries will stay in Ontario or any jurisdiction for that matter. If they can they will go to where the power is the cheapest. That is already the clear driver for the location of aluminium smelters. For nickel it is hard to move the nickel mine but nickel is available in Newfoundland as well as Sudbury these days. For steel - it can and will go anywhere. For the auto industry and all the parts suppliers - they have no particular ties to anywhere any longer. While electricity costs are not the only factor in where big industries locate they certainly do influence the decision making.
And Bob how long do you think anyone can pay the guaranteed 42c/kw-hour for solar produced electricity without going broke. I can assure you there is not a single industrial producer of anything that can stand THAT price. Therefore in order to maintain it huge subsidies will be required.
I can see why you aren't a millionairre so I did the calculation in the next post just to illustrate why you will not make a lot of money with solar panels.
Malcolm Rawlingson 3.19.09
So Bob, For your benefit and for anyone else who expects to make a small fortune with solar power plants on their roof. Here is the accounting 101. I have made it as simple as I can.
I'll do it for a 1kW panel. Just multiply by the number of installed kilowatts to get your final numbers.
Let's say we run our 1kW panel for 24 hours (forget the Sun for a minute) at an income of 42 cents per kilowatt hour.
We will make a total of 1kW x 24 hours x 0.42c/kWhour = $10.08 per diem. (I think I spend that on Tim Hortons coffee every day)
Lets say there is zero maintenance or repair and that the plant operates at 100% capacity factor (still forgetting the Sun for a moment) then we will make a total of
$10.08 x 365 = $3679.20 for each and every kilowatt installed. Looks like a money spinner to me...but hold on.
For about 4 months of the year in Canada the output will be zero or close to it. So we really are making money for only two thirds of the year.
0.67 x $3679.20 = $2453.80
Now lets bring back the Sun into our calculation. The panel will only produce at full rated capacity of 1kW on a good sunny day. Each and every day is not sunny and gosh darn here I go again the sun does not shine at night.
So during the 8 months of the year it is only likely to produce 50% of the electricity it COULD produce if we lived in the land of the midnight Sun which we do not.
So applying a generous 50% to our huge dollars above and now we are down to
0.5 x $2453.80 = $1226.90
So not too shabby but hard to make a living off that. And now here is the kicker.
We have Governments that like to tax us. This revenue is considered taxable income and at a marginal tax rate of about 50% in Ontario that would leave us with a NET income of
0.50 x $1226.90 = $613.45
For lower earnings one would make more but not many low income people will be able to afford the installation costs.
So even if one had a large roof capable of putting 10kW of capacity the income from that is only $6134.50 - hardly the road to riches you dream of.
Now the installation of these panels will be from AFTER TAX income.
I have not deducted from this several important items because (hopefully) I have got the message through to you already.
1. You must also deduct your own consumption. You will be importing electricity at night and during the winter months and any time your system does not operate....cloudy days etc 2. You must deduct the capital cost of installation - unless the good ole guv gives them away. But someone has to get up on your roof and put them in. 3. I have not included storage...Ok your $50,000 PHEV will do that. :)
So at the astonishingly high price of 42 c/kW hour you will only be able to make just over 600 bucks per installed kilowatt. for a whole year of operation. At the realistic price of 4.2 c/kWhr you will only make 60 bucks per year per installed kW.
So Bob Invest your life savings in solar if you want to but please don't think you are going to make lots of dough doing it You simply cannot.
Now there are some developments which I might be tempted to invest in. My good friend Paul Stevens sent me some data a few weeks ago that indicated a new treatment process for massively increasing the number of photons from solar cells. The single 1kW panel could produce 10 times the amount of power which means it would work better in lower light levels.
But I would not hold out the hope of making your millions from PV panels on your roof. The people who sell them to you might but not the people who install them.
I use Wal-mart as a great indicator of what is worth doing. I have not seen a single solar panel on any Wal-mart Store in Canada. Sam Walton knew a thing or two about making money and it did not appear to include festooning his stores with very large roof tops with solar panels. Why would he do that when he can buy it for peanuts from the big producers or from subsidised producers.
A smart man was our Sam. If you want to make money you need to listen to the people that have not the people who wish they could.
So here endeth the Solar Panel accounting course. I hope you are wiser now.
Malcolm Rawlingson 3.19.09
Regarding your comments on the difference between "plant" and "reactor". I amsure you used the term "one" because it trivialised the massive size of the plant.
The only number that matters is not one plant or two reactors but installed capacity of 2400 MW.
Lets put it another way.
2,400,000,000 watts = 2,400,000 kilowatts = 2.4 MILLION 1 kW solar panels that can operate 24 hours a day seven days a week.
In reality you would need to install 4.8 million solar panels at 50% cf to equal this ONE plant.
So please don't trivialize this committment by saying it is "only" one plant.
That one plant is ONLY equivalent to putting a 1kW panel on every single roof top in Ontario....and hoping for Las Vegas weather in winter :)
Malcolm Rawlingson 3.19.09
Just one last comment for Bob, I am not trying to lambast you. You are clearly a very intelligent person who I greatly respect for having the courage to come here and make a case you believe in. That makes you a top notch person in my eyes along with all the other contributors here. We are here to challenge ideas not personalities. I am only posting here to challenge your views based on what I know from over 40 years in the nuclear business and counting.
I am not here to insult you and if I have - you have my most sincere apologies. I also do learn much from what you say and you have changed my opinion in some areas.
Ferdinand E. Banks 3.20.09
I've also always been interested in reading what Bob has to say, but not when he comes to the conclusion that nuclear can be played down. Nuclear is going to turn out to be indispensible, as are the renewables, because the key issue is electricity, but it will take lots of electricity with a nuclear base to enable us to use those renewable items the way they should be used.
Bob Amorosi 3.20.09
Ontario’s Green Energy Act is proposing 80cents per kwhr for any rooftop solar system up to 10kW. That doubles all your accounting numbers.
The Ontario government is being clever by offering 20-year guaranteed contracts because even though today no one could afford paying 80 cents let alone 42 cents per kwhr, I'll bet regulated rates will climb steadily and likely reach 80 cents BEFORE 20 years from now. So at the end of 20 years, those solar subsidies could very easily no longer be a subsidy. To my limited knowledge, rates are presently under 10 cents here in Ontario, and twice or more in some US states. If rates double or triple within the next year or two as many predict from carbon taxes or cap & trade schemes looming on the power industry alone, then rates are not far off 42 cents anymore.
I agree taxes are a big disincentive if a consumer must do everything after taxes. We'll have to wait and see what the government will allow, but I'm betting the Ontario government will treat private rooftop solar investors as small businesses, since they ARE selling something, where all the equipment, installation costs, and any maintenance costs would not be after taxes but before.
What ultimately matters is the up-front capital costs versus the payback time, which is exactly the same problem with large central nuclear plants that many politicians and rate payers have a hard time stomaching. In the case of rooftop solar it's future success in large numbers hinges on equipment and installation costs coming down, efficiency going up, and regulated consumer rates going up over time substantially, which are all happening right now or are threatening to.
I still maintain we will need SOME nuclear for base load, and I fully realize we would need millions of rooftop solar systems to even compare with the output of even one nuclear plant. But that won't matter if rooftop solar does become widespread because there's another factor at play here - consumers loathe having to pay regular utility bills, and they loathe being beholden to lack of choices. Given AFFORDABLE choices, most consumers will opt to be less dependent on the grid, maybe not totally independent but less so.
Jim Beyer 3.20.09
I agree with Fred, but also with Bob to some extent. I am surprised at just how expensive nuclear is, at least compared with coal. Perhaps that shouldn't be the case, but that's the way it is. Nuclear is simply more complicated than coal plants in many ways. Coal has complications too (huge rail infrastructure needed) but that's already there.
I dunno if Obama is actually anti-nuke, but he certainly isn't mentioning it enough. If Obama is taking the solar-wind-renewable route, they best we may get is an improved infrastructure and a smarter and more efficient grid. That wouldn't be the end of the world, but probably not the best way forward.
I could re-work the question and ask, if nuclear power is so affordable, then why aren't they being funded? It's because that notion is not readily believed by potential bondholders. (I've said before nuclear power's actual cost is in the 8 cents per kw-hr range; not 4-5 and not 10-16; 8). But that's still with a 40-year pay-off time frame. That's a big risk. What the demographics of a site going to be 40 years hence? How does one assess that risk?
One can also argue legitimately that the actual cost of wind is probably higher than that, given the variable output (Jeff A. says I shouldn't say intermittent...) But a wind turbine is only a few million dollars or so; a nuclear power plant is at least a few billion. Wind is a much easier and smaller game to play. (Now if only the Wall St. types could issue nuclear power plant bonds instead of CDOs -- could they become nuclear toxic waste?)
Bob Amorosi 3.20.09
"I could re-work the question and ask, if nuclear power is so affordable, then why aren't they being funded? It's because that notion is not readily believed by potential bondholders. (I've said before nuclear power's actual cost is in the 8 cents per kw-hr range; not 4-5 and not 10-16; 8). But that's still with a 40-year pay-off time frame. That's a big risk. What the demographics of a site going to be 40 years hence? How does one assess that risk?"
Jim’s statement here is precisely the point behind all the economic arguments for or against any sort of power generation.
Given choices, consumers, investors, industries, and governments find it's much easier to stomach shorter term pay-offs or pay-backs with gradual investment instead of huge sums up-front. Given how difficult it is to predict the future of energy economics, it tends to keep Fred employed I'm sure because the economics change constantly. It is also why governments are looking to mitigate the risks with policymaking that promotes a mixture of generation sources, and not place all their eggs into one or two large baskets.
Len Gould 3.20.09
I'm not sure anyone here is discussing "ruling out" a nuclear baseload. I know I'll get real upset if ever again Onatrio goes to a condition of importing electricity as the consecutive Socialist and Conservative provincial governments in the 1990's had us doing. That said, there still remains about 50% of existing load which nuclear is simply not efficient at providing. Seems to me that Bob is arguing about the "peaky top" 50% of the load curve while Malcolm and Fredare arguing about the steady baseload 50% of the load curve. IMHO, you're both right.
Just another note, regarding Malcolm's rough guestimate of solar production per kw installed in Ontario. Far better to use scientific solar maps, readily available now for any area of interest. eg. the VERY BEST solar resource in N America is in rural western Arizona, where a kw of solar panels installed fixed on a flat roof can be expected on average to receive 8.0 kwh / day or 2,920 kwh / yr. For comparison, any place in Ontario the same sq. meter of panels will receive 4.5 kwh / day or 1,643 kwh / yr. which is not too shabby and definitely BETTER than Germany, which has the largest solar installed kw of any country in the world. It also compares fairly well with the solar resource available in Phoenix, Az, where the same sq. m. of panel will receive 6.85 kwh / day insolation, or 2,500 kwh / yr.
In Ontario, if that sq. meter of solar panels costs you $850 to install (eg. $5,000 / kw) then it will pay for itself in 3.81 years at the new heavily subsidized feed-in rate of $0.80 / kwh. In Phoenix, Az, with no subsidy rates at $0.11 / kwh, the same panel will take 18.18 yrs to payback. NOTE: Several new developments are now in process, eg. Morgan Solar - Sun Simba - Concentrating which can substitute 98% of the PV area with cheap plastic lenses which WILL shortly reduce that $5,000 / kw cost to less than 1/10th, making the subsidies unnecessary. However, we do need the subsidies in place to overcome the huge negative resistance as above, during the company statrup phase.
Len Gould 3.20.09
sorry, revise my statement above "western Arizona, where a kw of solar panels installed fixed on a flat roof " to "western Arizona, where a sq meter of solar panels installed fixed on a flat roof " No change to the numbers.
Len Gould 3.20.09
Just guessing, but once technology and Chinese inverter manufacturers doing big volumes bring the cost per kw of solar down to the $500 / kw range, providing a 3.81 year payback at $0.08/kwh rates in Ontario, even Sam Walton might start haunting Walmart decisionmakers if they don't install them.
Bob Amorosi 3.20.09
Thanks Len, the numbers are better than I even dreamed.
3.81 years payback time is marvelous. Even at 5 or 6 years, consumers with deep pockets will seriously consider buying in, especially when building a new home. Even new home builders will take notice because adding the cost to the mortgage might be trivial and worth it if they can advertise a new home has lower electric bills in combination with all the other efficiency stuff built in. If regulated rates start going up substantially too, as I have been spouting off about for some time here, this alone will sensitize consumers to their electricity bills and inspire many more to consider solar.
Len Gould 3.20.09
Agreed Bob. And it would be a BIG help if utilities would start charging real-time prices for electricity on somethig like an hourly basis or less. Most solar generation happens during peak and near-peak periods, where even in Ontario with its cheap peaking resources, the true value of electricity goes well above the average $0.10 now charged on flat-rate. TOU helps some, but will soon become completely unmanageable for the regulators once solar starts making real penetrations. Regulatory rate-setting of TOU rates (and informing customers) will become a completely farcical exercise once solar and other micro-DG systems gain a measurable share of the generation market.
Utilities should start getting ready now, with smart real-time markets.
Michael Keller 3.20.09
What happens when it's cloudy, the early morning, the evening or at night? Not so good for solar energy.
Most homes do not have flat roofs nor are they oriented for the optimum collection of solar energy. Doubtful that most roofs on existing homes are designed for the additional structural loads from solar panels either.
Payback calculations need to include the realistic capital cost of the investment, financing costs and a realistic estimate of incoming revenue (if any).
The point: solar remains impractical for large scale deployment in most locals, especially in places that do not have much sunshine – like Germany, Canada and large chunks of the US. Unless, of course, you do not mind draining the taxpayers wallet to fund subsidies! Oh, I forgot, as long as the government can just print money, bailouts are free.
Ferdinand E. Banks 3.20.09
What is happening above is simple. Some crank ideas about the efficiency of wind and solar have been put into circulation and picked up by Bob, and apparently many of the contributors to this forum have concluded that they will become unpopular if they substitute the truth for Bob's nonsense.
Myself, I'm not interested in popularity or treating ignorance with respect. Kent Wright has alluded to a calculation showing that nuclear is probably the least expensive source of electricity, while. Len has mentioned an investment cost of $1500/kW; but even if this were $2000/kW I think that it can be shown that a reactor with an investment cost of 1500-2000 dollars a kilowatt, and a 'life' of at least 70 years, is unbeatable where cost is concerned.
A problem now of course is that engineers and technicians have gotten out of the habit of constructing reactors. and while a few firms are not in this situation, many are. But I'm not interested in the habits of individual firms because that is not what economics is all about, and I can promise you that I intend to make a fool of anyone who - at one of my lectures - questions the following statement. SWEDISH REACTORS SUPPLIED ALMOST HALF OF THIS COUNTRY'S ELECTRICITY, AND THE COST WAS AS LOW OR ALMOST AS LOW AS ELECTRICITY FROM NORWAY'S HYDRO. The PRICE was also the lowest or almost the lowest until the ignoramuses got into the discussion, and were treated with a respect that they didn't deserve. If you believe this, and it happens to be true, then no further discussion is necessary.
Bob, I don't know what the electricity situation is in Canada, and I give considerably less than a damn, but my children have dual (US-Swedish)citizenships, and so I am not prepared to entertain the kind of bunkum that you picked up from a comic book or silly TV show about solar and wind, and which struck your fancy. Your talk about dedicated engineers may sound good to some ears, but not to mine. I know about some of the things done by dedicated engineers during WW2 who made the mistake of listening to ignorant and stupid amateurs, and believe me when I say that I'm not impressed..
Len Gould 3.20.09
I find it humerous that Mr Keller can post the rant he did so closely AFTER my discussion which refutes him ;
Bob Amorosi 3.20.09
The comic book and TV show businesses are booming here in polar bear land known as Canada. In any case we could care less either about Sweden's past and present problems, so rest assured I won't be asking any crank economists from Sweden to entertain us or anything we might say in this forum from here on in, I guarantee it.
And by the way, engineers in WW2 who listened to ignorant and stupid amateurs are much smarter by far today since very few are lining up applying for any jobs in the nuclear reactor design industry. They know better where to find their future fortunes, and it sure isn’t going to be in any company building reactors. Same goes for many scientists and investors today too.
Ferdinand E. Banks 3.21.09
Crank? Did I hear the word Crank, Bob? And what is this about comic books and show business? That sounds like elitism to me. And you say that there are no jobs for nuclear design engineers! I'm going to leave that contention for someone else to discuss, although if somebody asked me I would say that the market for those ladies and gentlemen couldn't be better. You are aware, I hope, that universities are reestablishing their faculties of nuclear engineering.
Crank economists from Sweden. That's not me, Bob. That's those other people, and there are plenty of them.
Michael Keller 3.23.09
Ambrosi, your analysis is just plain incorrect. Try as you might, the laws of physics and economics can not be discarded just because you do not like the results. Sooner or later, reality rears it's ugly head.
You do no real favors to renewable energy interests by grossly overstating the merits (and there are many) of the technologies.
The fortunes of nuclear power (as well as renewable energy) rest ultimately with economics.
I'm content with letting market forces decide winners and losers. I am not content, however, with having radical, environmental kool-aide drinkers short-circuit the process.
PS Canada’s good fortunes rest with the tar sands, the price of oil, plentiful natural resources and hard working folks. Renewable energy is nothing more than bug dust in Canada’s grander economic future.
Ferdinand E. Banks 3.24.09
I have nothing at all against Bob playing Mr know-it-all, but he should do it on some other site or forum or whatever it is they call it. Where this topic is concerned he simply has it wrong. His approach is wrong, as is the present approach to energy matters of the US government. Note the word 'present', because I am making the assumption that the US government will eventually get their heads screwed on right.
Bob Amorosi 3.24.09
Keller and Banks,
Maybe you guys should take a course in reading before dismissing all the merits of renewable energy technologies. It seems you haven't noticed all the other authors publishing articles about them on this website since you have nothing much to say to them, only me. As for me taking my comments to some other website, I probably will with pleasure since this is a complete waste of time. It should be readily apparent that professor Banks cares little or nothing about what anybody says on any subject unless it agrees with his own preaching. I am quite thankful I am not a member of his cult.
I wouldn’t hold your breath for the US government to change their course on energy policy anytime soon. When carbon taxes or cap & trade programs are implemented, it will affect every sector of the economy like no other government imposed program, with the potential to redistribute vast sums of money. Consumption of alternative products and services that emit less or no carbon will only work if alternatives are available and affordable to industry and consumers, but such is not always the case yet. It’s too bad that more nuclear is one alternative that is not so available or affordable.
We will eventually look back on 2007 and realize we never had it so good for the economy and standard of living in North America because the future promises to be much different. To those readers who feel they won't need to change their energy consumption habits, they are in for a rude awakening after our governments get through with all the changes coming.
Michael Keller 3.24.09
Actually Bob, I do agree with your above observations concerning the redistribution of wealth and need for reasonably affordable energy.
However, I do not believe solar energy and wind are yet generally reasonably affordable, although they may reach that point as technology moves forward.
As to nuclear, I tend to agree that it is too expensive in it's current form and the cost needs to be brought down significantly. To that end, I refer all to www.hybridpwr.com as one possibility.
Jim Beyer 3.24.09
I think some of the confusion on this thread is due to the 80 cents per kw-hr being so very far out of kilter as to what one would normally pay. I'm not sure one should assume that electricity prices would really be that high in the next 20 years. If they are, then we are doing something very wrong.
Also, if they really were that high, major companies and processes would cease to function; being far too expensive to do at that point.
I'm sure the subsidy was to encourage the deployment of a small number of solar panels. If too many are deployed, they will probably roll it back. At the end of the day, someone has to pay for all of this.
Jeffrey Anthony 3.24.09
An amazing collection of misinformation, lies, and half-truths -- not to mention insults. Incredible.
Don Hirschberg 3.25.09
I am quite impressed by how well you all type.
Ferdinand E. Banks 3.25.09
I'm innocent. I haven't done anything wrong. It's that other guy.
I also don't think that nuclear is going to be too expensive, at least not when they get back into the rhythm of constructing reactors. Once again I go to the Swedish experience: 12 reactors were constructed in 13 or 14 years, starting from NOTHING. And those reactors eventually produced electricity at a cost as low as Norwegian hydro, which means the lowest cost electricity in the world.
That couldn't be done today of course. Nutters, neurotics and opportunists like the former prime minister would see to that. As for the affordability, anyone who claims that nuclear isn't affordable needs to have their brain examined. The cost of sending a couple of Swedish battalions to stone age countries somewhere in the Third World, or a handful of parasites to Brussels, would pay for annother thousand megawatts of nuclear electricity. The issue here is simple - at least for me. IF...IF it is possible to construct a nuclear facility (in this country) for $1500-2000/kW, then the government should finance it. Why turn to Wall Street. Why waste time trying to reason with people like Bob, or those on Wall Street for that matter.
Bob Amorosi 3.25.09
Anthony, "An amazing collection of misinformation, lies, and half-truths -- not to mention insults. Incredible."
This statement may be true about our comments here, however it won't be detrimental to the future energy paths the US government and Ontario are on. You can bet on solar and wind power being a growing part of distributed generation for the next few decades.
I normally wouldn't stoop so low as I have done in these rants but professor Banks is hallucinating on drugs if he thinks most governments will agree to spend massive billions on large numbers of new nuclear plants at a time when competition for public funds is as high as it is now, and at a time when every government is going into deficits for many years to come. As much as we need some nuclear for base generation, it's just not going to be paid for up front in most places without doing something radically different like what the folks in Georgia are proposing for the new plant they want approved - that is soaking ratepayer with gradually increasing rates over many years while construction is underway. This would be a very tough pill to swallow anywhere.
Ferdinand E. Banks 3.26.09
You refuse to understand, don't you Bob, but that's OK with me, because I know that if you don't get the message here, you would get it if you found yourself in a seminar room or conference with me.
I just received some information from Italy, and in Sweden they have started courses in nuclear engineering again and announced that the number of technicians working in nuclear plants will not be allowed to decrease. The problem is that you've received some crank information about solar and wind, and because you think that the decision makers - or movers-and-shakers - have bought this nonsense, you want to show that you are on their side, to run with them (as the Chinese once put it). You want to make it clear that you are in their corner.
Well I'm not in the corner of anyone who refuses to deal in mainstream logic. My students in Sweden are informed on the first day of my lectures that if they don't want to do some serious thinking, like getting the right answer when they add two plus two, they can get the _____ out of my classroom and stay out, but lately I've mellowed, by which I mean I've tried to show them the error of their ways. Of course, I don't always use academic language, but why bother when some of the people you deal with prefer to replace logic with fantasies.
Bob Amorosi 3.26.09
From Harry Valentine's other article posted on this website titled "The Impending Resurgence of Small-site Decentralized Power Generation", commenter Warren Reynolds, an ex-nuclear engineer, posted this comment below yesterday. After reading it carefully professor Banks, you may want to consider detoxification from the banned substances you seem to be on.
The cost of a nuclear power plant has risen to $8 billion today not $5 billion. They are too expensive to build ! The IAEA has shown that nuclear power rates are the highest at $0.14- 0.16/kw-hr. Dr. Chu, Secy of DOE has stated that no more commercial nuclear waste will go to Yucca Mtn depository. It is already 75% committed to Government nuclear waste. As an ex-nuclear engineer, I know nuclear's "dirty secrets". Let me put the final nail in the nuclear coffin. A GE report has shown that the profit in nuclear power is only 3% over its 25 year amortization cost. The only reason the nuclear plants were originally built was the direct and indirect Government subsidies. The cost for dismantling these nuclear "dinosaurs" will be in the $ billions and passed on to the rate-payers. Eighteen European nations have voted to ban, stop construction or dismantle nuclear power plants. No, nuclear is not the answer."
Ferdinand E. Banks 3.26.09
You must be under a terrible strain to expect a man as intelligent as I am to believe nonsense like the above Bob. I have been in touch with AECL of Canada about the reactors they have constructed in China, and I am satisfied that neither you nor anyone else is correct about a cost of 8 billion - ALTHOUGH THE PLANT IN FINLAND MAY COST THAT MUCH. These costs could result because people like you made fools of intelligent people - though not as intelligent as I am - and convinced them to stop constructing nuclear plants, and to send nuclear technicians and workers to the welfare office. But that sort of thing will come to an end when they start building large numbers of plants. Already in Sweden they have announced that the number of persons working in the nuclear plants will be maintained indefinitely.
As for a 3% profit over an amortization period of 25 years, I think that Kent Wright explained what that meant, although since you don't understand investment theory maybe it didn't make any difference, and I'm not going to explain it. Why, because nothing is as worthless as words expended in a debate in cyberspace with someone who doesn't know anything and doesn't want to know. Incidentally, they have/are dismantled the two reactors in Malmö, and nobody anywhere has suggested that billions of dollars are involved.
As for the IAEA, THEY HAVEN'T SHOWN ANYTHING. The IAEA is what George Orwell called "an indoor welfare scheme". I've been going to conferences for decades, and I've yet to hear a paper read by one of those parasites. Incidentally, Harry Valentine mailed me once to tell me about a huge oil strike in the Dakotas. There is no readily obtainable oil of any significant dimension in the Dakotas. People who want to get rich selling worthless land.have put the idea of a new Saudi Arabia into circulation. The US is also not going to be invaded by the army of mercenaries from Albania and Monoco that are now training in Ontario.
Len, tell this man about the cost of Canadian nuclear; and for the record, I don't give a ______ about Professor Dr Chu, nor his underbosses.
Bob Amorosi 3.26.09
For your badly needed education professor Banks, here in Ontario we have some of the lowest regulated rates in North America hovering around 7 cents per kwhr today, and that is with just over half of our generator fleet capacity in nuclear plants. But what you don't want to know or prefer to ignore is that every ratepayer including me was saddled with "debt retirement" charges on our bills a few years ago to pay off the billions of dollars in stranded debt the old Ontario Hydro piled up in part from the massive costs of building our nuclear plants 20 and more years ago.
Our basic electricity rates of 7 cents per kwhr that you love so much because they are regulated are in reality bogus, false, and totally misrepresent what the true cost of electricity in Ontario was. I may not be an economist but I sure know what I am paying on my electricity bill every month just as the other 5 million rate payers in Ontario are doing, and will be saddled with for many years to come before the debt is paid off.
There's no way on earth, or anywhere else that is burning fires, that you'll convince most of the 5 million ratepayers in Ontario that professor Banks knows better about nuclear. Malcolm and a few of his cronies who work here in the nuclear business are about the only exceptions.
Ferdinand E. Banks 3.27.09
The way to solve this dilemma is to stop building nuclear and replace reactors with the things that you and the other know-nothings want:: wind, solar, distributed, etc.
But of course, that can't be done, and so it's necessary to rely on experts. Only you and I have different ideas about who those experts are. A large percentage of the ladies and gents that you call experts are half-educated fools who need to be taught how to think.
Now, I know that you have forgotten how to add and subtract, but here in Sweden, with electric generation handled almost equally by hydro and nuclear, we had the lowest cost electricity in the world (together with Norway) and, to my great surprise, some of the lowest priced electricity. But no, that wasn't good enough. The ignoramuses and neurotics came to the conclusion that anything nuclear did, renewables and the like could do better, and because of the political set-up were able to get this absurd reasoning accepted by the TV audience.
About your high electric bills. You are just getting what you deserve. If you and voters like you had elected the right people, that wouldn't have been necessary . Almost every day I hear about how things are going bust in the US, but they should have thought about that when then put George Bush back in the White House. Here in Sweden we also pay more than we should pay also for electricity because the government tricked the electorate into voting the country into the EU, and also sends billions to stone age countries in the Third World.
But unlike you, I don't worry about these things. Official foolishness is one of the costs of democracy, and as Clint Eastwood pointed out in one of his films, democracy is bad business, but it's better than the alternative. By the way, Clinta was in my battalion at Ford Ord, California. Despite what he claims about not being able to go to the Korean War, he was able to enjoy that war at the Fort Ord swimming pool.
Bob Amorosi 3.27.09
The US and Canada are full of "no-nothings" according to professor Banks. He should run for president or some other high office because that's about the only way he is going to prove it to everyone on this forum since he refuses to post many facts, just bullying and outright insults to half of the other professionals who comment on this website. This type of buffoon would make a good politician because it inspires emotions in voters and the TV audience, and has big habit of misleading them.
Bob Amorosi 3.27.09
Correction - "know-nothings".
Here's some factual data on rooftop solar in Ontario.
A 3kW system can be installed and connected to the local grid with off-the-shelf equipment for about 30,000 Canadian dollars, less if you can install it yourself. This amount of power should provide an average homeowner about one third of their household energy consumption, and at 80 cents/kWhr that Ontario is proposing to pay for 20 years, it should generate on average across the year about $7 per day, or about $2500/year. This average takes into account that on summer days it will make much more than $7/day, and in winter much less if anything at all.
At $2500/year it will take only 12 years to pay off the system, and from then on it’s all gravy. And with the advances in solar like morgansolar.com is poised to market, and with falling equipment costs every year, that 12 years is shrinking.
No doubt if there is a huge take up of rooftop solar in Ontario after the first few years, they will probably scale back the 80-cent offer to something lower for new ones, but by then costs will have also come down. It's no longer unthinkable that we could see several hundred thousand rooftop solar systems in Ontario within 5 to 10 years.
These numbers are for real, not some crank fish story from a know-nothing as professor Banks would claim. And I really think Malcolm should reconsider his refusal to believe in solar too when some of his neighbors are padding their bank accounts doing nothing but letting the sun shine, and probably working somewhere else at some day job earning a regular income. BTW Malcolm, I checked and implementing a rooftop solar system to sell back into the grid will definitely be considered by the Canada Revenue Agency to be a small business operation with all the income tax deduction incentives enjoyed by a commercial business.
Ferdinand E. Banks 3.28.09
Well, it looks to me like I've been relieved from talking to a certain know nothing, since he has decided to attack his compatriot Malcolm. Why not take on Len while you are about it, Bob?
You say that you might see several hundred thousand rooftop solar systems in Ontario in X years. I certainly hope so. I'm not against that arrangement. I want more windmills too. Both wind and solar will be necessary in Y years. But to keep the TV audience happy with their wind and solar, large nuclear installations are essential. I wont try to explain this to you BOb because you wouldn't understand. Better spend the day with your comic books, and in the evening go an see Clinta's new movie.
Bob Amorosi 3.28.09
I'm sure everyone in Ontario is just thrilled that professor Banks would be happy with this arrangement of several hundred thousand rooftop solar systems and more windmills. And he should be happy too that I agree completely that some new nuclear plants will be necessary too, which is why we are planning on two new reactors. What professor Banks doesn't admit however is that WITHOUT this arrangement, we would need more than 2 new nuclear reactors. The result is all ratepayers will save substantial up-front sums of money, which is a novel concept in professor Bank's world.
Bob Amorosi 3.28.09
BTW even my comic books have a history of teaching young people about good versus evil, and sometimes even about saving money. Too bad professor Banks doesn't preach such important concepts. I haven't seen a single numerical analysis by him posted on this website in all the months I've been posting here, and I won't hold by breath waiting for one either.
Ferdinand E. Banks 3.29.09
Well, if 2 new reactors are on order in Ontario, you can tell the movers and shakers that the leading academic energy economist in the world fully approves. I assume that this is the number decided on by people like Malcolm, and that's good enough for me. As for those other things that you are so fond of, I'm quite content that readers of comic books and viewers of midday TV soap operas should be allowed to make the decisions.
Numbers. The boss of the Swedish energy establishment often asks me for numbers. In return he has heard himself referred to as an ignoramus. Somehow this leads me to believe that he will convince himself that he can do without the precious opinions of yours truly.