Please go to www.swapsol.com AND help spread the Greatest News since the Bible.

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.

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.

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.

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.

"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.

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.

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..

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 _______ .

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.

So there!

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.

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.

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.

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.

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.

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.

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.

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.

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 !

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.

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.

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 !

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.

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.

Cheers Malcolm.

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.

'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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Would somebody please inform this man what is going on in the world.

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.

Why doesn't some Canadian come forward and tell friend Bob that he doesn't know what he's talking about?

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.

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.

"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.

Paul

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.

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).

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.

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.

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.

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.

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..

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.

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.

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

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

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.

Malcolm

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.

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.

Perhaps I will regardomg solar power when we get a snowstorm in Toronto Canada in July.

"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.

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.

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

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

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

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.

Malcolm

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.

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?)

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.

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.

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.

Utilities should start getting ready now, with smart real-time markets.

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.

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..

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.

Crank economists from Sweden. That's not me, Bob. That's those other people, and there are plenty of them.

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.

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.

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.

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.

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.

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.

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/Len,

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."

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.

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.

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.

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.

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.

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.