|Drill, baby, drill
||[Oct. 6th, 2008|12:37 pm]
The 2030 Challenge website has a great graphic that puts the whole offshore oil discussion in perspective:|
That Page also points out that replacing the world's fossil fuel use with nuclear power would require the construction of about 13,000 new nuclear plants, conservatively estimated to cost $77 Trillion. Of course, the gross world product is only $65T.
Nuclear power costs $6-$10 per watt? Given that 10 years ago I was seeing $1/watt for coal and nuclear, $4 for solar, I'm skeptical.
Even if the figures are right, they're kind of floating in thin air. How does do they compare to the cost of what they'd be replacing? What's the lifetime on a modern plant, for the cost to be amortized over? What's the cost of replacing all that power -- at equal reliability -- with renewables?
I'd also note that replacing fossil fuel use with standard nuclear is replacing a lot of thermal power with electricity. Of course that's going to cost, as you struggle to low-entropy forms of power. Replacing gas heat with electric heaters? Yeah. OTOH, if you run a heat pump...http://en.wikipedia.org/wiki/Economics_of_new_nuclear_power_plants
says nuclear power plant cost estimates are sensitive to assumptions about interest and discount rates, with recent commodity prices also being a factor.
$1/watt for coal is way low. For nukes, it's WAY low. $4/watt is also low for PV -- it's more like $7-9/watt for utility scale PV. $4 might be about right for concentrating solar thermoelectric, though, so maybe that's they were talking about.
Big central plants are enormously sensitive to the cost of capital, and coal and nuclear particularly so (as opposed to natural gas, which has lower capex but higher fuel costs). In practice, those capital costs are usually underwritten by the government, though some combination of guaranteed minimum ROI and straight-up tax breaks and subsidies. This means that the cost of energy is strongly tied to the cost of fuel, and only weakly tied to the capital cost of the plants.
One common fallacy among the coal-is-cheap crowd is to base their cost estimates on old coal plants that were built before the Clean Air Act and which are grandfathered such that they do not have to comply. It's hard to be sure what the costs would be these days, because no one has built a significant new coal plant since the CAA passed, but credible (i.e. from anywhere but the coal industry) estimates run $2.5-4/watt for a CAA compliant coal plant. Add another $1-2/watt if it's IGCC (cleaner and higher efficiency, and has the potential for carbon sequestration); add another $1-??/watt if carbon sequestration is actually included.
Sean Casten at Gristmill has lots about coal plant economics, and the cost of capital for energy plants in general.
I'm less familiar with the details of financing nuclear plants, but my impression is that they are even further along the high-capex/low fuel cost curve than coal is. RMI has lots of information about nuclear plant economics. I've mostly ignored that discussion because, in addition to major financial breaks, the nuclear industry is asking the government for a complete release of liability (which is the only way they can get private financing at all). That, in my mind, is just simply unacceptable -- they want profit without the risk, and the finance sector has just demonstrated what a bad idea THAT is.
Besides which, supply-side solutions are of limited interest. I am interested in supply technologies because they will be important in the transition away from fossil energy, but they are of limited relevance to our immediate problem: There is no supply side solution available (any tech, no matter how dirty) that can address exponentially growing energy demand. We are going to have to reduce our per capita energy use (in the developed world) dramatically, through efficiency and good design. Anything else we do in the meantime is either just buying us time, or just being a distraction (depending on what we do with the time thus gained).
They also go on about the "Huge" new deposits in the polar sea that'll be available once that pesky ice-cap melts...
Assuming there's anything there at all [which isn't proven] it'll be around 20-30 years before it comes on stream, at around 1.5 Mb/d even using the most optimistic estimate based on their figures.
Or, for the price of a spiffy new oil field with rigs, we could build three Solar Power towers, and generate enough energy to meet the worlds needs, and then some. Oh, but then the oil companies would go out of business, because we'd be using hydrogen as a power store/fuel and electricity as our primary source.
Can't have that say the politicians, as they pocket the 'campaign funds' provided by petroleum industry lobbyists.