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Put up or shut up

The CSIRO and AEMO (Australian Energy Market Operator) released the draft update to their annual ‘GenCost’ – cost of energy generation – report in the past week. It pointed out nuclear energy generation wasn’t particularly cheap and was hardly the ‘silver bullet’ to drive Australia’s decreasing reliance on coal energy generation into the ground. As the report is in draft, there is the provision that someone with sufficient knowledge and evidence in the area could point out to the CSIRO that they erred in the compilation or presentation of the evidence used to argue their point of view. It is also unlikely that the update would have been issued unless there was a good chance that no substantial changes would be made.

Energy generated from renewable sources is cheaper than energy generated from nuclear energy by quite a margin, the GenCost report has found. Unsurprisingly, the Energy Minister welcomed the report as it broadly aligned with the government’s publicised objective to move energy production away from coal and gas to fully renewable sources. The Opposition was less welcoming, with Energy Spokesperson Ted O’Brien claiming the government was ‘weaponising’ the report to argue that nuclear energy generation wasn’t viable in Australia.

O’Brien claims the report looks at the issue through an ‘investment’ lens rather than a ‘consumer’ lens. He is splitting hairs. Either he has forgotten simple economics or he isn’t letting the facts stand in the way of a good story. Inherently, companies exist to generate a financial return on investments made by their shareholders. It is called profit. If a company doesn’t make a profit, it will eventually use up all its financial resources and ask shareholders for more or declare bankruptcy. The investors need the consumers to purchase their product rather than similar alternatives. The purchase price typically is higher than the cost of the inputs to the product, which is returned to the investors as profit. Maybe O’Brien might like to discuss how the two ‘lenses’ are different.

As Katherine Murphy noted in The Guardian

The CSIRO’s new analysis this week noted conventional nuclear power is now cheaper than it used to be. But it also points out that some of the low-cost nuclear found overseas has either been “originally funded by governments” or was at a point where capital costs had been recovered. This allows plants to charge less for their generation because they don’t have to recover the costs of new, commercial, nuclear deployment. Given we don’t have existing generation here, this isn’t an option for Australia.

While we are on facts, here’s another one. The only company to have a small modular nuclear power plant [O’Brien’s favoured option] approved in the United States has recently cancelled its first project due to rising costs.

O’Brien isn’t the only one who should know better trying to talk down renewable energy production. Gina Rinehart is one of Australia’s wealthiest people. She provides considerable funding to the IPA (Institute of Public Affairs) which is a conservative leaning ‘think tank’ and apparently a nursery for upcoming conservative politicians.

Rinehart must be happy with her investment in the IPA as she is currently spruiking some research from the organisation that states that at least one third of Australia’s arable land will be required to generate sufficient electricity once the last coal and gas fired power stations are closed down The research was released to the world by the IPA using the well-known academic peer reviewed journal “X”, formerly “Twitter”.

The problem is the research misses a few facts. Michael Pascoe is a finance writer for The New Daily. He asked a couple of economists who work for the Australia Institute to review the IPA’s calculations and they found

The IPA assumes renewables need to replace the total primary energy from fossil fuel use instead of the actual delivered energy – the stuff that counts, what we get to use.

“Most of the energy from fossil fuels is lost as heat,” explain Messrs Saunders and Ogge. “For instance, for coal at least 60 per cent of the primary energy from coal in coal power is lost as heat, at least 40 per cent from gas.

“Renewables do not have to replace the waste heat from fossil fuels, just the delivered energy, which is significantly less than half the primary energy figure which includes waste heat.

Pascoe goes on to suggest (correctly) that the land required for renewable energy production doesn’t have to be prime arable land, although sheep apparently like the shade provided by solar panels and will in return help to keep the grass under control.

So what is it with conservatives and renewable energy? Leaving aside the discussion around conservatives views on climate change and emissions reduction for a minute, is the concern that renewable energy is far more democratic? After all, you and I can install solar panels on the roof of our house with possibly a battery in the garage and to an extent dictated by energy regulations, finance and availability we can eliminate or at worst reduce significantly our requirement to purchase commercially generated electricity. It really doesn’t help the business model of the extractors of fossil fuels who have until now had a captive market.

It isn’t only electricity generation profits that are at risk here. The increasing uptake of electric vehicles is reducing ongoing demand for petrol and diesel, as evidenced by some traditional petrol retailers installing EV charging facilities. The problem for the retailers is that EV charging can be done at home from the solar panels and batteries, so we are far less dependant on their services. The EV can, in some cases, also be used a a battery to reduce the domestic dependence on commercially generated electricity as well.

On top of conservatives being told that fossil fuel extraction will be subject to far less demand and consequently be far less profitable, it breaks the business model they know and understand. And thats the real problem here. It’s a brave new world which is far more democratic than large companies having the monopoly on the ability to generate electricity. Even though most of us have hesitation when it comes to change, most of us either embrace it because we see the possibilities or learn to live with it.

Society will adapt as demonstrated when the ‘horseless carriage’ gained supremacy over the carriage with horses. Arguably, the change made the world far more democratic as the costs of running a horseless carriage were far less than a stable of horses. We all got used to carrying a small computer that could also make phone calls around in our pockets or bags very quickly as well.

There may be really good arguments for alternatives to renewable energy – but O’Brien hasn’t given us one yet and Rinehart frankly should have pulled her funding if the IPA can’t do far better than the drivel they have presented as ‘research’ on this occasion. It’s time to put up or shut up.

 

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17 comments

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  1. Ian Joyner

    “Opposition was less welcoming, with Energy Spokesperson Ted O’Brien claiming the government was ‘weaponising’”

    So, says the side that weaponises things more than anyone else. This is a common tactic, accuse your opponent of doing exactly what you are doing. They weaponised the Voice referendum. They weaponised anything to do with climate change. They weaponised refugees. Etc.

  2. New England Cocky

    It appears that Opposition Energy spokesperson Ted O’Brien is touting for the LIARBRAL$ leadership by demonstrating his wonderfully contorted logic when attacking the falling cost of energy generated by solar, wind and other alternative means to coal fired power stations.
    .
    Alternative energy has a supply side cost of ”free” inputs which is difficult to beat for any other energy generating system that ”burns raw materials” requiring purchase.
    .
    So O’Brien is not letting the facts get in the way of political invective because few Australian corporations worry too much about going broke and into bankruptcy.
    .
    Naturally it is unreasonable to expect a COALition pollie to understand thermodynamics and efficiency losses because that requires a knowledge of Mathematics, an unwanted pre-requisite for COALition pre-selection and a definite hinderance when determining the benefits of government contracts to corporations making ”political donations” to the LIARBRAL$ party.
    .
    The only thing that is permanent is change, and Australians have a distinguished history of making change for the benefit of Australian voters. Government sponsored child-care payments, divorce law reform and free radio & television services being just three of many ….. all made by LABORT governments.

  3. Phil Pryor

    There is a Ted O’Brien, apparently, said to be a spokesman for energy for the dreadful dills, or conservatives. He is an economics idiot, and ignores basics, facts. No-one, anywhere, will insure nuclear power generation. Only nations with military nuclear weaponry have some generation as a derivative, a side issue, and recently, companies have gone bankrupt or have been nationalised as a result of the stupendous and stupid costs. We here have no knowledge, no experience, and would have to buy retail, sign up for robbery increases over time, pay out for all maintenance. Meanwhile our world suffers, boils, storms, declines.

  4. Terence Mills

    Opposition Energy Spokesperson Ted O’Brien was interviewed by Patricia Karvelas recently, at a time when he was lambasting Labor for not adopting nuclear energy as the coalition had now done.

    He was asked how many Small moduar reactors the coalition were planning to have ; how much they would cost ; how soon they could go online ; where they would be located etc.

    He could not answer any of these basic questions.

    This was not a policy but a coalition brain fart.

    By the way, if solar arrays are planned for good grazing land so much the better a sheep can keep the grass down benefit from the shade and reduce fire risks. Cattle can happily graze between wind
    turbines : so all good.

  5. totaram

    I don’t understand how the IPA has managed to retain its status as a “tax exempt Research Institution” all these years. I doubt if they have ever published anything in a reputable peer-reviewed journal. It is just a propaganda factory for the “conservatives” although it often tries to even set the agenda for what they should be doing. But none of this can be called “research”.

    The “research” on which Gina Reinhart based her talk is so ridiculously wrong that even a year-seven school pupil could fill it with holes. You can find critiques of it on-line easily.

    How do we get the tax-free status revoked, especially when these crooks reuse to even reveal who their “donors” are?

  6. Clakka

    Ha ha ha haaar, yet another hilarious clown from the LNP.

    The newest state-of-the-art nuke power generation plant, is in the UK. By the time it starts generating it will cost 3 times its original £13 billion budget and be 3 years later than contracted in 2016. Wow, talk about accurate feasibilities and vfm.

    On might ask O’Brien and his mates do they have shares in:

    Areva (France)
    GE / Hitachi (US / Japan)
    Mitsubishi Heavy (Japan)
    Kepco (Sth Korea)
    or
    Rosatom (Russia)

    Maybe they’re filtering through Christopher Pyne and Joe Hockey?

    Oh, how silly of me!

    They’ll of course be buying off-the-shelf SMRs from Walmart.

  7. Roswell

    Andy56,

    Has one of your comments gone missing?

  8. andyfiftysix

    roswell, yes and no…..i pulled it because i was repeating what was already said.

    Gina is a classic case of the money being bigger than the brain. Its obvious she has ambitions to be an IPA intellectual. As pig headed as her old man? Probably. Unfortunately Gina, you aint got it. Clearly if you read a report and cant see the stupidity of the assumptions, you should go back to the money stack and be happy. Clearly she is thinking beyond her $4/hr pay rate. ( slap slap slap)

  9. Roswell

    Thanks, Andy.

  10. New England Cocky

    Check out this Australian designed and developed energy storage system ….. that Australian ”business leaders” have ignored for about 40 years.

    https://www.abc.net.au/news/science/2023-02-02/vanadium-redox-flow-battery-and-future-of-grid-energy-storage/101911604?utm_source=sfmc&utm_medium=email&utm_campaign=abc_specialist_science_sfmc_20231227&utm_term=&utm_id=2270338&sfmc_id=90428325&fbclid=IwAR2E2ZzymTZi_2FVUuCe4Wmx2BMS56ukJj_l2akqB8sXY1JVBwQki4z6KEI

  11. Steve Davis

    Cocky, thanks for the link.
    It will be interesting to see if you get any push-back.

    From your article “”[The companies] couldn’t see beyond that. They couldn’t see the big picture.”
    Another argument against liberalism. Liberalism can only focus on short-term advantage.

  12. Ken Fabian

    When it comes to saving fossil fuels from global warming nothing beats nuclear – and nothing is how much zero emissions energy these dangerously irresponsible – negligent – politicians are planning to make with it . The one certainty is that the current LNP don’t care about global warming and do not want a zero emissions world. Having made them up themselves, they see green monsters in the shadow of every solar panel or wind turbine or battery farm.

    Truly the deniers are the true doomists in this, incapable of facing up to reality, so overwhelmed by their economic and political alarmist fears that even conceding the problem is real and serious is beyond them. Made worse by LNP (and Labor too) policy devolving into a “free” market where the highest bidder buys the policies they want – and cashed up fossil fuel companies and investors are the highest bidders. Absolutely not about duty of care (and Labor pollies are as inclined to argue in highest courts that they don’t have any as LNP).

    And yet, even with all that advantage on the side of fossil fuels solar energy is the most built sort in the world already, within only about 1 decade of crossing into cost competitiveness. Less than 7 years since the SA Big Banana… Battery was brought online and whole mega battery factories have sprung up in that time, sufficient to have about 20 times that capacity in place just in Australia, that quickly.

    We will get a LOT more solar and wind and batteries despite the FF incumbent’s advantages and influence which includes the biggest energy subsidy of all – the enduring amnesty on accountability for climate (and health) harms and costs, that people will be still be paying for for centuries to come – but to achieve zero emissions we absolutely do need deliberate, foresighted policy enacted built into the bottom line – not the ongoing conflating and confusing of the bottom line of the wealthiest export mining companies with our nation’s bottom line.

    Their wealth will protect THEM from climate harms (they think) so there is no difference to the way they support fossil fuels and oppose renewables to be had from them taking the science on climate seriously; they already do know, thus all the support for Doubt, Deny, Delay – not because they think the science is wrong but because they know it is correct. But it is only up to them because our politicians weak and are letting us down.

  13. Andrew Smith

    Symptom of both parties and all media being captured by the fossil fuel right, imported US agitprop and PR strategies, too easy?

    Fact is nuclear is being used as a ‘delaying’ tactic to try to head off faster transition from fossil fuels aka Brexit vs. EU (shared with Russia?).

    However, they cannot defy ‘gravity’ as explained by Burn-Murdoch in FT (23 Sep ’22), includes an excellent graphic comparison of transition rates and economic growth

    ‘Opinion Data Points: Economics may take us to net zero all on its own. The plummeting cost of low-carbon energy has already allowed many countries to decouple economic growth from emissions’

    https://www.ft.com/content/967e1d77-8d3c-4256-9339-6ea7025cd5d3

  14. andyfiftysix

    New England Cocky, i dont want to rain on your parade but some things we need to get straight.

    Li Ion batteries are a FIRST GENERATION iteration. They are 500-1000cycle battery with a high degree of thermal management to stop them from self destructing. Its also where the 20-80% optimal charge idea comes from.

    So when you compare new generation batteries, stop comparing them to LI Ion.

    LiFePO 4 battery or LFP battery is the current darling of EVs. 3000-7000cycles with minimal thermal management and no restrictions on charge ie 0% or 100% has no effect on the life of the batery. These batteries also use less lithium in their chemistry.

    I know its a little technical and pedantic but its like comparing chalk and cheese. I am all for new ideas and innovation but dont get ahead of yourself. If you misunderstand the technology, your going to draw the wrong conclusions.

    So when i read these posted “ads” i want to know what the new tech is really competing with. Also to underscore how important it is to get your facts straight, a massive amount of lithium has been discovered around the world this year. That will help to drive down its costs. Its a very fluid technology from all sorts of angles but some people will exaggerate how good their new battery design is. I dont trust anyone who deliberately lies by omission . If your friggin battery is so good, WTF do you need to use such crude methods to dumb down the facts.

    This new type of battery does seem to have some redeeming features so i wont can it outright. I just hate the way the facts are projected to put it on a pedestal.

    New England Cocky, i was once a nuclear fusion enthusiast. But as the song goes…once bitten twice shy babe..i dont tollerate misinformation from anyone.

  15. New England Cocky

    @ andyfiftysix: Thank you for your informative post. The Vanadium redox flow battery ISOLD AUSTRALIAN TECHNOLOGY from the UNSW innovators … dating back to about 1980!!
    .
    I recommend that you check with UNSW for further technical details to satisfy your ”[in]tolerance for misinformation”.
    .
    I claim no expertise in these technical matters except an ability to read widely and speculate about possibilities that may accrue. Good luck with the pursuit of nuclear fusion …..
    .
    However, I note that processing Lithium is a ”ecologically dirty process” in much the same way as Gold extraction using Mercury to float the Gold away from the slurry is a dirty polluting process.

  16. 2353NM

    @Andyfiftysix & New England Cocky – Redox Flow batteries are made in Australia and exported worldwide -> https://redflow.com/.

    My (limited) understanding is that while they don’t use ‘rare’ minerals, they can be ‘re-generated’. As the energy density isn’t as good, the batteries aren’t good in mobile applications such as EVs.

  17. paul walter

    Brilliant, pertinent piece of journalism.

    Just a question, why do we then need fossil fuels production in the Levant, with he barbarism with Gaza, when we are moving to renewables?

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