1. The significantly lower cancer death rate of the nuclear workers cohort compared to the non nuclear worker controls suggests that increased low LET radiation may have stimulated their immune systems, as reported in other irradiated populations (Calabrese and Baldwin, 2000).
2. There was a  24% lower Standardised Mortality Ratio (SMR) from all causes of
   the nuclear exposed cohort (p < 10–16) compared to the non nuclear exposed controls. A 24% lower SMR implies a 2.8-year increase in average lifespan.

Click on the following link

Sponsler and Cameron 2005 Shipyard Worker Study

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It’s tied to the cost of our food, clothing, housing, healthcare and the inventions of our modern societies. The less it costs and the fewer resources it consumes, the more society flourishes

In this interview with Nick Rheinberger on ABC Illawarra we discuss my recent essay on Energy and Human Dignity. You can listen to the interview here

Link to the original essay is here

Energy Sustainability and Human Dignity

The post Energy Density and Human Dignity on ABC Illawarra first appeared on Nuclear for Climate Australia.

Energy is the lifeblood of our society.

It’s tied to the cost of our food, clothing, housing, healthcare and the inventions of our modern societies. The less it costs and the fewer resources it consumes, the more society flourishes. Human development progressed after we replaced energy sources that used a lot of effort to harvest such as wood burning and draught animals. From 1AD to 1650AD per capita GDP did not increase and people lived and died in poverty. Burning wood and growing crops only produced about ten units of energy for each unit of effort invested. This was just enough for subsistence living and nothing for surplus development[i]

After 1650AD coal burning started and societies went from gaining ten units of energy at subsistence levels to thirty units for every unit expended. The world grew and flourished from surplus energy. Nuclear power can deliver vastly better gains. Current plants provide a hundred units of energy for every unit invested. Newer fourth generation types such as molten salt reactors could see this multiplier double again. Atom for atom, splitting the uranium nucleus gives us 20 million times more energy than burning an atom of carbon.

Most of us hoped that switching to low carbon energy sources would create a system with reduced environmental impact. Unfortunately attempting this with wind and solar ignores history’s valuable lesson – increased energy density drives wealth and creativity.

Harvesting our environment for low grade energy using wind and solar yields poor returns for our efforts reverting to values of around ten similar to when we burned wood. Worse still, a high price will be paid by our native habitats and rural landscapes. Society cannot be held hostage to the vagaries of the weather. Load shedding by industry is raising the white flag on our economy. The risks of failure with randomly variable power sources are so high, and their environmental toll so great, that we must embrace a sustainable large scale roll out of nuclear energy.

Unintended Consequences

We know from history that technologies can have greater impacts than we initially recognise. In the 1950s the public was swayed by the freedom of private motor vehicle use. This led to urban sprawl and the destruction of public transport infrastructure such as the removal of Sydney’s tram network. The car came to dominate the design of our cities and towns. Consumerism grew to match our sprawl and required the ability of cars to carry goods from huge car parks in a way that individuals on public transport could never match.

Consumerism has now found fertile ground in distributed and micro energy systems with the rush to subsidised solar PV combined in some cases with batteries. The equipment is consumer grade and, in the hands of people who did not sign up to be micro power station managers, it’s questionable how these systems will perform or last. Under ideal conditions, they use at least twelve times the materials per unit of energy of a modern nuclear power plant and generate twelve times the emissions.

The trouble is, as the Canberra Battery Testing Centre recently found, battery storage fails quite often with only 25% working as they were supposed to. The rest had problems ranging from temporary breakdowns to complete failure. Failure of PV systems and batteries, or early upgrading to newer technology, means they become high carbon emitting, materials intensive sources of electronic pollution.

Sustainability of Nuclear Energy

The United Nations[ii], the European Union Joint Research Council[iii] and EDF[iv] have reported on the life Cycle Assessment of electricity generation options. They found that nuclear energy has lower emissions than any other generating source including wind and solar. Current nuclear plants have emissions as low as 4 gr CO2/kWh. Wind is typically around 30 gr CO2/kWh but with the addition of material’s hungry batteries emissions climb to 110 gr CO2/kWh. Solar is similarly afflicted with emissions intensities up around 70 gr CO2/kWh inclusive of batteries even in ideal conditions.

Nations and states with nuclear energy such as France, Sweden and Ontario consistently have amongst the lowest emissions and no nation, without strong backup from its neighbours, has yet achieved low carbon emissions with wind or solar.

The energy density of nuclear fission drives its very low materials consumption. If the term “renewable” is to mean anything sensible then nuclear energy is the best example.

In addition to the climate change potential, the UN report expanded its comparisons to a further thirteen environmental metrics covering things such as exotic minerals, particulate matter, pollution of the land and seas and water use. When it came to issues of non-cancer forming human toxicity, nuclear energy and wind were equal, beaten only by small scale hydro. As a source of human cancer forming toxicity nuclear energy carries less risk than almost all other energy systems including wind and solar and is beaten only by small hydro.

When all factors were tallied in the UN report, nuclear energy performed better on environmental grounds than wind and PV and was only beaten by small hydro.

The Human Toll

Finally, we come to the human toll. The large nuclear plants being built by France are expensive because the French are rebuilding its industrial and human capacity and inventiveness. As the roll out continues, costs and timelines will reduce and the result will be secure low carbon energy for France and Europe more widely.

Cross the border into Germany and we see the fearful toll on humanity and the environment being extracted by German energy policy. As the war in Ukraine rages, Germany leads the charge in funding Russian war crimes by purchasing oil and gas. This action flows directly from a Greens’ party led push to turn off nuclear power plants in favour of increased gas and coal burning.

Germany could turn its nuclear power plants back on. It could reduce emissions; it could increase arms shipments and it could help to save Ukrainian lives, but chooses to support Putin instead.

Solar PV extracts a similar human toll. In Australia we could choose to invest in our industry and human talent by a nation-wide roll out of nuclear power plants. Instead, we choose to import PV systems from China manufactured at the lowest cost by slave labour[v]. The People’s Republic of China (PRC) has placed millions of indigenous Uyghur and Kazakh citizens from the Xinjiang Uyghur Autonomous Region into what the government calls “surplus labour” and “labour transfer” programmes. Here, some 45% of the world’s polysilicon is made and 90 Chinese and international companies have supply chains which are affected. If your solar gear is made in China, chances are it’s on the backs of slave labour and that’s what underpins the CSIRO and AEMO’s claims for cost reductions in solar energy.

Labor’s Direction

Our new Government needs to put the labour back into Labor. We cannot hitch our energy security onto low-cost imports of polluting solar and wind equipment requiring continuous replacement from places like China and India.

We must invest in our own human capital just as France, Canada and South Korea are doing with their nuclear energy programmes.

[i] Decouple podcast and Commodities Investor Leigh Goehring

[ii] Life Cycle Assessment of Electricity Generation Options. United Nations Economic Commissions for Europe 2021

[iii] EU Joint Research Centre technical assessment of Nuclear Energy. Technical assessment of nuclear energy with respect to the ‘do no significant harm’ criteria of Regulation (EU) 2020/852 (‘Taxonomy Regulation’)

[iv] Life Cycle Analysis of the EDF nuclear fleet, 2019

[v] https://www.shu.ac.uk/helena-kennedy-centre-international-justice/research-and-projects/all-projects/in-broad-daylight

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Dr Robert Barr’s brilliant model of Australia’s electricity generation looks at different scenarios using renewables, nuclear and a mix of both to find the optimal solution.

Only by using as much of our existing transmission infrastructure as possible and building nuclear power plants on our existing grid will we keep the costs down and ensure near term success.

This presentation by Robert Barr and Robert Parker explores the economics of this energy mix and examines actual nuclear power plant options. We look at what we could build, how long it would take and possible suitable locations.

https://www.youtube.com/watch?v=vQC5ijEieXE

We must avoid the temptation to go for 100% renewables. This is the “hurry up and fail” pathway that will only end up with huge costs of extra poles and wires, excessive battery and pumped hydro storage and a system that’s massively complex. It will also bury us in mountains of wasted materials and environmental damage.

The post Nuclear Power – Australia’s Secure Energy and Climate Solution for a Century first appeared on Nuclear for Climate Australia.

Amended 20/7/2021

Introduction

Angus Taylor has an inquiry going into dispatchable energy and storage options for electricity production. The terms of reference suggest the need to enable Variable Renewable Energy Sources (VRE) such as wind and solar to be integrated into the National Electricity Market (NEM) in a dispatchable or usable form.

Our analysis of AEMO’s Integrated System Plan (ISP) out to 2042 and ultimately to a decarbonised electricity sector demonstrates that a system based on nuclear energy will have much lower costs and achieve carbon reductions more quickly. It will achieve these cost benefits in part by eliminating the need for large amounts of energy storage and the expansion of the existing transmission and distribution system.

Our submission to the inquiry directly compares the costs and emissions profiles of such an integration with those of a nuclear energy based system. The headings in this article address some of the key terms of reference.

Current and Future Needs

The current and future needs are taken to be the current and future annual energy demand on the NEM as outlined in AEMO’s National Electricity Forecasting at http://forecasting.aemo.com.au/Electricity/AnnualConsumption/Operational.

There are a great many scenarios that make up AEMO’s Integrated System Plan 2020. For brevity we quote the current and future electricity demands in 2042 as follows:

The total demand in 2042 will form the basis of comparison of VRE and Nuclear energy-based systems. Many of the remaining AEMO ISP scenarios could be compared however the relative benefits of nuclear energy will remain.

Existing, new and emerging technologies

The small nuclear power plant used in this comparison is the General Electric BWRX boiling water nuclear power plant from General Electric Hitachi.

From GE’s promotional material this plant’s benefits are:

• Cost competitive: projected to have significantly less capital cost per MW when compared with a typical water-cooled Small Modular Reactors (SMR)
• World class safety: designed to mitigate loss-of-coolant accidents (LOCA) enabling simpler passive safety – Emergency Planning Zone EPZ limited to site boundary
• Innovative cost-competitive design: designed to allow the Nth-of-a-kind (NOAK) BWRX-300 to be competitive with the levelized cost of electricity of natural gas and renewables
• Passive cooling: designed to allow steam condensation and gravity to cool the reactor for a minimum of seven days without power or operator action
• Quick Deployment: Deployable as early as 2027, thanks to proven know-how, supply chain, components, certified fuel and simpler construction techniques

Figure 1 – Anticipated view of BWRX 300 two pack

BWRX 300 boiling water nuclear power plant from GE-Hitachi
US$2,500/kW, Allow A$4,580/Kw or A$1.374 Billion per unit

General Electric are focused on ensuring the BWRX 300 is cost competitive in the very tight North American market where shale gas prices are making other generators uncompetitive. The cost sensitivity is shown in Figure 3 where the BWRX 300 has a significantly lower levelised cost of generation than other nuclear power plants and is on a par with shale gas generation and renewables.

Figure 3 Cost competitive position for the BWRX 300 “Nth of a kind” in US$/MWh on a cost per plant basis

Comparative efficiency, cost, timeliness of development and delivery, and other features of various technologies

The comparative analysis of renewable and nuclear based systems is shown in the charts in Figure 4 and Figure 5. Both comparisons shown are based on the costs for wind, solar, batteries, pumped storage and fossil fuel generators derived from CSIRO Gen Cost 2020-21. The cost for nuclear energy is based upon the publicly available General Electric (GE) anticipated cost adjusted for deployment in Australia.

https://nuclear.gepower.com/build-a-plant/products/nuclear-power-plants-overview/bwrx-300

For the purposes of this comparison we have used a capital cost of A$4,580/kW for the GE BWRX 300 small nuclear power plant. Further significant gains are also made in the staffing levels and so the operational values used are A$8.47/MWh for fuel and A$16.72/MWh for operations.

Figure 4 utilises CSIRO costs in 2021 for each technology. Much is made of the future anticipated cost reductions for batteries, solar and wind technologies. These reduced values are reflected in Figure 5. While the costs of a fleet of small nuclear power plants would also decline with time, this has not been assumed in our comparisons.

Figure 4

Figure 5

Comparison assumptions and outcomes

Six energy plans are shown in the charts. Each energy plan has been run through the Electric Power Consulting’s Energy Model. The model matches a mix of energy generators and storage devices to meet the demand on the National Electricity Market (NEM) which uses about 199TWh/year.

It contains demand data for three consecutive years from 2017. The demand is measured at half hour intervals.

Inputs into the model include:

• Capital costs
• Fixed and variable operational costs
• Discount rates,
• Min and max generation limits for each generator
• Ramp rates
• Carbon emissions both from combustion and embedded.
• Arbitrage options
• Transmission, Distribution, loss factors and retail margins

Using these inputs the model derives the System Levelised Costs of Energy (SLCOE) and energy prices to wholesale and low voltage retail customers.

The model also calculates the actual shares of energy for each generator, capacity factors and costs of carbon abatement.

Description of the six energy plans:

1. NEM 2021 Gen Mix – this uses the existing NEM based mix of coal, gas, wind, solar and hydro with the existing transmission, distribution and ancillary services costs. It is intended to act as a “control” for subsequent plans and demonstrate the correct order of costs and emissions.
2. ISP 100% RE + Pumped Storage – This plan uses wind, roof top and utility level solar and existing hydro as the generators. Storage is provided by 5.1GW of batteries and 21GW of pumped hydro.
3. ISP Step DP1 – This plan was determined by AEMO and uses the residue of coal plants, existing hydro, combined and open cycle plants, plus wind and roof top and utility grade solar. Storage is provided by 12.8GW of batteries and 9.7 GW od pumped hydro.
4. ISP Central DP1 – This plan determined by AEMO is a less aggressive option than the Step Change and uses more coal and gas. Storage is provided by 6.6GW of batteries and 7.7GW of pumped storage.
5. Nuclear ISP 50% + VRE 2042. This plan eliminates coal use and allows for the use of 15.25GW of small nuclear power plants which would amount to 54 generating units on the NEM grouped in large plants in the same manner as our existing coal plants have multiples of coal generators. They would be located primarily at the sites of existing coal and gas generators or close by the grid at coastal locations. Additional generation is provided by 7.1GW of existing hydro, 2.5GW of open cycle gas, 11 GW of wind and 41 GW of roof top and utility solar. Storage is provided by 6.5 GW of Pumped Hydro and 7GW of batteries.
6. Nuclear ISP 76% + VRE 2042. This plan eliminates all coal and gas. It also eliminates the use of wind energy due to its high reliance on gas energy as a backup resource. It utilises 23GW of small nuclear power plants amounting to 82 generating units on the NEM grouped in large plants. They would be located primarily at the sites of existing coal and gas generators or close by the grid at coastal locations. Additional generation is provided by1GW of existing hydro and 22.5 GW of roof top and utility solar. Storage is provided by 4 GW of pumped hydro and 4.5GW of batteries.

Results of Comparison

Both the 2021 and 2042 CSIRO cost base scenarios, plus our assessment of the GE plant, show significant cost benefits when nuclear energy is included in the mix compared to systems based on exclusively on variable renewables. These results are consistent with a recent OECD[i] study of the Texas ERCOT (Electricity Reliability Council of Texas) system. This highlighted the impact that variable wind and solar have on electricity system costs and the cost of the extra backup generators, costly transmission lines and excess capacity required.

In particular, the plan which deploys 76% of nuclear energy is the least cost and eliminates all fossil fuel combustion. Its minor emissions of 22 gr CO2/kWh are derived from embodied carbon in the construction of all the generators.

System Management – a grounding in reality

The use of nuclear energy on the NEM would provide a system free from the consequences and complexity of juggling a variable renewable system with all attendant storage and ancillary services costs.

Figure 6 shows the interaction of the generators and storage required to meet the load. The nuclear power plants are running at high and economic capacity factors of 84% and are meeting the base load power demand. During the daily cyclic demand, a combination of the existing hydro plus solar and storage are meeting the load. The option exists to substitute open cycle gas plants for some of the storage at a modest overall emissions intensity of an additional 10 – 20 gr CO2/kWh.

Reference to international examples.

This system has precedent – it’s very similar to that deployed in France for the past 30 years and has created amongst the lowest cost energy systems in the EU. France built 63 GW of nuclear energy over a 22 year period. Their Generation II plants had a materials intensity at least double that of the modern BWRX 300 plants. In effect Australia, with only 23 GW of installation, would be set with a construction project consuming about 20% of the effort made by France in the 1970’s to 1990’s.

Only a massive loss of confidence would prevent Australia from doing the job in one or two decades.

Figure 6 – Nuclear ISP 76% + VRE

In Figure 7 and Figure 9 we see examples of the complex juggling act required to manage systems dependent on variable renewable energy with storage. In figure 8 we see the large amount of surplus solar that is “spilled” under VRE systems. It’s highly variable occurrence on a daily basis means its use in hydrogen manufacture is problematic. In figure 9 we also see the problem of managing coal plants with high levels of solar. These will have vacated the market long before this type of operation is attempted.

Figure 7 – ISP 100% RE + Pumped Storage

Figure 8 – ISP Central DP1

Concluding Remarks

Under the current NEM market structure no investment in base load generation or even large scale pumped hydro storage will take place without Government intervention. Therefore to enable Australia to have a low cost, low carbon electricity system will require mechanisms to be put into place that guarantee a return on investment and ensure consumers are insulated from excessive financing costs.

As can be seen from Figure 4 and Figure 5 the costs of energy generation is a minor portion of the total cost of electricity yet the type of generator determines the scale of transmission required. We must focus on keeping the costs of transmission and distribution to a minimum if we are to have competitive electricity prices.

A system using high levels of nuclear energy:

• Maximises the benefits of the existing transmission and distribution system and existing transport and cooling resources
• Eliminates the need for large amounts of storage and grid expansion
• Minimises the impact of weather induced risks.
• Will operate reliably and economically for at least 80 years and save on the vast costs of periodic replacements required by wind, solar and batteries.

Such a system will provide a large number of very highly skilled jobs and stabilise local communities. It will provide a massive lift in the levels of education and security to regional Australia and along the way it eliminates carbon emissions to the electricity sector.

Robert Parker

Founder of Nuclear For Climate Australia

[i] THE COSTS OF DECARBONISATION: SYSTEM COSTS WITH HIGH SHARES OF NUCLEAR AND RENEWABLES, NEA No. 7299, © OECD 2019

A PDF version of this post is available at the following link

NUCLEAR ENERGY – AUSTRALIA’S LEAST COST LO W CARBON ENERGY SOLUTION

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“Most human beings have an almost infinite capacity for taking things for granted”.

• Aldous Huxley

“Taken in its entirety, the grid is a machine, the most complex machine ever made. The National Academy of Engineering called it the greatest engineering achievement of the 20^th century. It represents the largest industrial investment in history.”

• Phillip Schewe, The Grid: A Journey Through the Heart of Our Electrified World

Over the course of the 20^th century, nations with advanced economies gradually built electrical networks to transmit electrical power long distances, from power stations to large load centres and to then distribute it within those load centres (T&D). Developing nations are now busily building out their own electrical infrastructure.

But why did electricity become the ubiquitous form of energy? After all, gas lighting was common in the early 20^th century as were kerosene fridges and wood stoves and water heaters. Industry made extensive use of centralised steam-driven rotating energy. Why has lighting and refrigeration been completely converted to electricity and why is cooking heat, water heating and space heating dominated by electrical appliances? And why does industry rely on electrical motors for over 99% of mechanical drive applications?

Other than a handful of visionaries, it was not obvious to people that electricity was that useful to begin with. Kerosene lanterns served as admirable sources of light and, unlike the new electric light technology, did not require expensive cables be retrofitted to homes and businesses. But then the electric motor was developed. Over time, inventors and engineers realised that the same cable could be used to provide power to run fans, compressors, heating elements and dozens of other devices. Many challenges had to be overcome to make this invisible, silent, and potentially dangerous source of energy safe for widespread adoption. Advances in transformers, insulation technologies, protective relaying and measurement were all necessary. Innumerable power and control devices located throughout the network and working in perfect coordination was a crucial precondition for a reliable grid and this is still true today. A second precondition was prudent investment in power system redundancy.

Much later, and only because electricity was so widely available, computer scientists and engineers realised that microelectronic circuits and later computers could use this source of convenient and reliable energy. The preceding 50 years of development in electrical power engineering enabled the development, then boom in industrial and personal electronics which are now as ubiquitous as the electricity network which spawned them.

And the spread of electrification is not over, in fact it is likely entering another growth phase which will dwarf the demand increases seen in advanced economies over the last 30 years. As governments and citizens around the world grow more concerned about the impact of CO2 emissions on our planet and changing geopolitical realities heighten the importance of energy security or sovereignty, more of our transport sector will transition from using fossil fuels to electric vehicles (EVs) or hydrogen fuel cell vehicles (FCVs). The hydrogen for FCVs does not exist in nature in useable form (unlike fossil fuels) but is released from water using electrical power. Lots and lots of electrical power. Industry is also looking at ways of using electricity or hydrogen to replace coal in traditional blast furnaces used for steel manufacturing & increase the efficacy of recycling to reclaim raw materials.

Regardless of which automotive technology is taken up in greater numbers, our society’s demand for electricity is set to soar.

This sprawling and complex network does not operate autonomously – in fact it is rather fragile and requires constant intervention by network operators. Importantly, the control of the electrical network is centralised because historically, this has proven to be the only viable operating approach. Every second of every day, network operators, demand forecasters and power station operators need to ensure that the supply of electricity exactly matches the demand and that the network of power lines can get the electricity to where it is needed without becoming overloaded. Failure to do so results in power blackouts which, mercifully, are exceedingly rare in Australia. One reason for this is the disciplined and well-trained personnel that operate and maintain our electrical infrastructure and I feel lucky to have observed and worked alongside these men and women in a professional capacity.

So, we understand that operating the traditional electrical grid, with large, centralised power stations and one-way power flows is already complex. We also know that our demand for electricity, and so out reliance on it, is set to increase as EVs and FCVs replace cars, trucks and buses that run on petrol and diesel. And the recent blackouts in Texas have reminded us that modern societies like Australia rely on electricity to a degree that is only apparent when it is taken away from us.

And despite all this, AEMO and various state government policies are going to dangerously compromise network reliability by making electrical grid operations even more complex. It is not yet clear how generation redundancy will be impacted by increasing solar and wind but as it becomes less financially viable to leave coal generators supplying the grid at low capacity factor, privately-owned generators will be forced to retire these units instead of suffering ongoing losses.

Whilst our legacy coal-fired power fleet have become reviled for their outsized CO2 emissions, they continue to provide essential operational flexibility to network operators. Power station operators are learning to ramp their generators up and down with a regularity that were never anticipated when they were designed and built. Combined with open cycle gas turbines (OCGT), this gives grid operators the ability to compensate for rapid swings in power output from wind and solar generation or when another baseload generator trips. They also provide non-energy grid services which can only be provided by thermal generators such as frequency control and spinning reserve that allow network operators to shore-up the robustness of the grid.

Many of these power stations are approaching the end of their operating lives and are being operated in a fashion that is making them less reliable overtime. What will replace them?

There is much talk of battery storage, but this excitement is sadly misplaced. The mathematics of providing grid-scale back-up of intermittent renewables across hours, days or weeks for an advanced industrial society quickly establishes that hope should be abandoned when it comes to grid-scale batteries.

Note: Grid scale batteries such as Hornsdale are very effective for fast response services and will be essential as renewable energy becomes more widespread. This does not mean they are suitable for grid scale storage which spruikers claim can be combined with intermittent renewables to replace baseload thermal generators. These are very different applications which operate on very different scales.

Whilst expensive, pumped storage is more readily scalable than batteries and, providing our dry nation receives consistent annual rainfall, projects like Snowy 2.0 will increase our ability to store modest amounts of renewable energy, round trip losses notwithstanding. Unfortunately, we don’t have the climate or geography of Norway, Sweden or Canada so whilst pumped hydro could be part of the energy-storage mix, it will never be the silver bullet that can replace thermal generation.

What about hydrogen storage? Despite having poorer round-trip efficiency than batteries and despite the need for vast amounts of ultra-pure water and despite the difficulties of constant operating swings of electrolysis units to match the changing output of wind and solar (aka yo-yo operation) and despite the difficulty of economically sourcing enough platinum, ruthenium and iridium to make the cathodes and anodes (some of the rarest and most expensive elements)…hydrogen (actually ammonia) does have some promise. But let’s be realistic. All the worlds industrial capacity to economically scale ammonia storage and propulsion technologies will not be enough to displace fossil fuels in transport applications till the end of the century. And then it might be considered a serious option for grid-scale energy storage…we need to replace our current generation fleet at least once, maybe twice, during that time.

What about demand response? International experience indicates that the uptake is very minimal and doesn’t provide good value for money. Similarly, household solar generation and storage is not only the most expensive way to produce electricity, it also creates the most waste and creates enormous headaches for distribution networks which require substantial upgrades to reverse the direction of power flow twice a day. As the subsidies for home PV systems gradually wind down before disappearing in 2030, only crippling energy prices would prompt anyone to replace these systems at their own cost and it is likely that by mid-century, home PV systems will be a thing of the past.

Note: The winding down of subsidies from the small-scale renewable energy scheme commenced in 2017 and decreases each year until 2030 when the scheme ends.

We are already seeing some evidence of the grid becoming more difficult to manage. AEMO uses two market facilities to give network operators access to certain attributes that can only be provided by power stations with a rotating generator (coal, gas, hydro, nuclear). These are called RERT (reliability and emergency reserve trader) and FCAS (frequency control ancillary services). Previously there was little requirement for these services, or in the case or RERT, none at all. But that has changed in recent years as shown in the chart below.

There is no single reason for the escalating RERT and FCAS costs, however accommodating the increasing penetration of intermittent renewable energy is known to be a major contributor to the increased difficulty of grid operations implicit in the trends above. Ailing reliability of legacy coal-fired power stations is another factor.

Finally, the traditional grid has one advantage over the “grid of the future” – it’s already built and operational. The cost of adding new transmission lines, upgrading existing transmission and distribution capacity and re-configuring the way these systems work so they can accommodate constant, large and fast changes in power flows will cost a bomb. Recent American and European experience points to the difficulty of permitting new transmission lines and this is before one considers the enormous cost – costs that are rarely acknowledged in public discussions when spruikers talk about growing penetration of intermittent wind and solar and “the grid of the future”.

Conclusion

Under the AEMO ISP, our electrical grid will soon be expected to manage patchy grid-scale storage, increasing reverse power flows or “vanishing loads” from behind-the-meter PV systems, dozens of infrequently operated OCGTs, unreliable demand response markets… all whilst trying to integrate more intermittent renewable energy. This will compromise system reliability and place more strain on our electrical grid and the men and women who operate it 24/7/365. I’m afraid that losing our legacy coal-fired power stations will tip them (and us) into widespread blackouts more frequently than what we are accustomed to.

The electrical grid of an advanced industrial nation needs to be as simple and robust as possible. It also needs an “anchor tenant”. Nuclear energy is the only technology that can replace coal-fired power stations and allow us to integrate more renewable energy whilst maintaining the reliability that is essential. Anyone who tells you that we don’t need a dispatchable baseload “anchor tenant” to backstop our electrical grid is expecting our society to take a leap of faith which has a high probability of ending badly.

The post We Must Ensure Our Electrical Grid is Fit for Purpose by James Fleay first appeared on Nuclear for Climate Australia.

Click on the image or text to hear the interview

Rob Parker speaks with Michael McLaren on 2GB

The post Rob Parker speaks with Michael McLaren on 2GB about nuclear energy first appeared on Nuclear for Climate Australia.

This article by James Fleay of DUNE – Down Under Nuclear Energy looks at investment in nuclear energy on the National Electricity Market.

Nuclear energy is clean, cheap, reliable and safe.

Like many advocates for nuclear energy in Australia, my colleagues and I believed that if the Federal Government would only repeal the ban on nuclear power, business or state governments would eagerly build nuclear power plants (NPPs) to rapidly cut emissions, reduce power prices and improve network reliability. In fact, this belief prompted the creation of DUNE a company formed to study the investment case and present the facts to politicians and power market participants.

After all, being thus informed, they would hasten to repeal said law…right? How wrong we were.

The federal ban is only the first challenge to deploying clean, cheap and reliable power in Australia. The second, and much bigger problem, is our liberalised, energy-only National Electricity Market (NEM) and the out-of-market subsidies that provide additional revenue to solar and wind generators. Dr Kerry Schott, the chief advisor the Energy Security Board (ESB) recently confirmed this in an article in The Australian. Among other things, she confirmed that the NEM was not functioning to attract much needed new investment in “always on” power generation. Despite high power prices and a need for investment in “always on” generation, our NEM market design will not support NPP investment[1].

For all their desirable attributes, a NPP involves a large, upfront expenditure to build the plant (CAPEX) and a long development period without revenue from sales. For simplicity, let us assume that the developer can access construction finance for a reasonably low rate and that the project delivery team are world class (no cost or schedule overruns). Let us also assume that modern small modular reactor (SMR) designs do result in faster, cheaper, and more predictable project delivery. So, in a market with high power prices, what else does a NPP developer need to make an investment decision?

Simple: The developer must know in advance that for at least the first 20 years of operation (preferably longer), the NPP will sell most or all its electricity for a given price. Because of the size of the investment and its time horizon, NPP developers cannot justify investment wholly exposed to merchant risk – the investment must be underwritten by contracted future production. This is the only way that any investment of this nature can be sanctioned, including LNG plants, petrochemical plants and any other capital-intensive utility or manufacturing facilities.

Of course, contracts that underwrite large CAPEX investments are more complicated than described above. Usually the “fixed price” is actually a price range that includes a ceiling to protect the buyer and a floor to protect the developer. Also, one developer may require as little as 70% of nameplate capacity be sold in advance, accepting merchant risk (spot price) for the other 30% whilst another developer may require that 100% of production is pre-sold. Various contractual mechanisms are used to protect both parties from credit risk, project risk, exogenous risk (i.e. future transmission constraints), regulatory risk and poor operational performance. Because the investment is fully or substantially protected from market risk, the contract price of the power can often be discounted to prevailing market rates as the risk premium implied in the hurdle rate can be reduced.

There are also obvious benefits to the buyer including long range price stability which may be needed to underwrite their own capital investments or safeguard operational viability (think steel and aluminium smelters).

As current generation capacity retires and provided there is a willing buyer, investments of this kind could make sense in markets with low price volatility, stable energy policy and well established, unchanging regulatory frameworks; none of which can be said about the NEM.

With regards to a privately funded NPP investment, indeed any large investment with a long project duration, the NEM has deficiencies which need to be addressed.

Volatility

In a normal market, the price signal = investment signal. However, as price volatility increases, the price signal becomes meaningless as an investment signal. Combined with persistent policy and regulatory change (including direct market intervention), high volatility leads to a complete investment freeze for assets that do not attract out-of-market revenue.

Note: This is not a criticism of the Federal Governments recent threats of market intervention, including building a combined cycle gas plant in the Hunter Valley. Unfortunately, these interventions are justified.

Of course, when average power prices get very high, some investors will be lured into the market despite the high volatility. Unfortunately, though rationally, these higher-risk investors have short time horizons and favour low upfront costs and quick deployment, even if they incur higher operational costs. Further, the technology must be optimised to take immediate advantage of high prices without being exposed to low or negative prices a few hours later (when the sun comes up or the wind begins to blow). This is one reason for the proliferation of small-medium, fast start open cycle gas turbines and reciprocating engines within the NEM, despite high gas prices. Even with high average prices, a high volatility market cannot support large private investments with long time horizons, nuclear or otherwise.

Another consequence of high price volatility is increased financialisaton[2] of the power sector, though the impact to power prices is difficult to quantify. I will cover this in a future article.

Subsidy Led Investment

Provided their production is not curtailed, solar and wind power generation assets can access additional revenue that, under current law, would not be extended to a NPP should the nuclear ban be lifted. These payments take the form of large generation certificates (LGCs) which, under the Renewable Energy (Electricity) Act 2000, liable entities (electricity retailers) are obligated to regularly purchase. These provide renewable generators with an additional $30 – $40/MWhr.

The result of this policy, indeed its very intention, is that investment for at least a decade has been nearly entirely focused on capturing these out-of-market subsidies – implications for system-level costs of electricity be damned!

Given their very low operating costs and non-existent availability obligations, this means that renewable generators can and do bid into the market at rates close to $0/MWhr or even negative because they receive guaranteed out-of-market revenue.

The Government has confirmed that this program will be ramped down as planned but the calls for its expansion and perpetuation may prove difficult for the PM and Energy Minister to ignore.

For nuclear power plants to be built in the NEM, they would require equal access to out of market payments. Alternatively, out of market payments would be abandoned in favour of carbon pricing.

The Value of Availability and Dispatchability

The NEM is what is referred to as an “energy only” market and, like its Texan counterpart, ERCOT, was conceived at a time when all sources of power generation, regardless of fuel type, had similar operating characteristics including availability and dispatchability. Because these qualities were intrinsic to all generators, there was no need to value these attributes separately nor much need to worry about short-run adequacy of supply.

Things began to change as the portion of intermittent renewable energy began to increase. Primarily because of their very low short-run marginal costs (and assuming no transmission constraints), renewable energy generators receive priority dispatch when they are available but have no obligation to maintain supply. Largely at the mercy of the market and the weather, network operators must quickly and at any price, find and dispatch alternative generation when renewable generators exit the grid to meet demand for electricity or blackouts will ensue. This scenario happens daily and usually results in periods of elevated prices as fast start, open cycle gas turbines (OCGT) are brought online. This is the very real cost of intermittency[3], which is not borne by renewable energy investors, but by energy consumers.

High penetration of intermittent renewable energy will always result in OCGTs being the marginal supply. Consequently, markets with very low gas prices, have reduced costs of intermittency (though the misallocation of precious gas resources is unforgiveable). In a market with high gas prices, such as Eastern Australia, the costs of intermittency are staggering.

So, if intermittency has a cost, does it follow that availability and dispatchability have economic value as characteristics of energy? Preeminent historian of energy, Vaclav Smil seems to think so. In Chapter 7 of his magisterial Energy and Civilisation: A History, Smil states

“Past adoptions of new energy sources and new prime movers could never have had such far-reaching consequences without introducing and perfecting new modes of harnessing those energies and controlling their conversion to supply required energy services at desirable rates” (emphasis added)

I have found that the value of constantly available energy is so obvious that non-technical people intuitively grasp it, though they often do not think about it or bother how the “miracle of the grid” is achieved[4].

In a collaboration with the Nuclear Economics Consulting Group, DUNE prepared a submission to the Energy Security Board (ESB) which outlined an alternative market structure that aligns incentives towards dispatchable, high availability generation technologies (or combinations thereof). Very simply, our proposal is for separate markets which use reverse auctions for “always on” and “intermittent plus firming” supply which are roughly proportional to the baseload and variable portions of the grid’s daily load profile and I will describe this proposal further in a future article.

Of course, there are already various measures used in other power markets throughout the world to incentivise availability and dispatchability. These include capacity markets, out-of-market capacity payments and others.

Regardless of the market design, no NPP (or other “always on” technology) will be built in a grid that does not confer a value to these critical attributes without which our modern, high-energy society would not be possible. In fact, there is not much incentive to properly maintain our nation’s existing “always on” assets.

Conclusion

If DUNE or others are ever to be successful in deploying nuclear energy in Australia, there are many obstacles that will need to be overcome and the investment case, for the investor and consumer alike is foremost among them. Simply pointing to low power prices in nuclear nations like France, Sweden and Ontario (Canada) and assuming the investment case will follow because of elevated power prices in the NEM does not recognise that the current design of the NEM will not support an NPP investment decision regardless of how high average power costs get.

But this realisation begs a further question; if a power technology is zero-emissions, unquestionably safe, “always on” and has very low operating costs and a very long operating life, why can’t an investment case be made in a market with internationally high power prices? Is it a problem with the technology or the market design?

Over to you Dr Schott.

[1] A strong argument can be made that electricity supply is not improved by the application of certain types of market structures (such as those found in parts of the US, Australia, UK etc.) and that reconfigured Government utilities may achieve better public interest outcomes; however, I will leave this for a future article.

[2] Financialisaton in this context describes the rise of market instruments (also referred to as synthetic) and trading activity as a layer on top of the infrastructure. Power systems can be effectively operated (though not always efficiently) without the layer of market instruments and energy trading. The market instruments and trading activities are not required for the supply of electricity and impose an additional cost. If this additional cost is less than the efficiency improvements achieved through the introduction of the market, then financialisation can be beneficial.

[3] Levelised Cost of Electricity (LCOE) quantifies the all-in cost of power at the generating station’s metering terminals, minus capital recovery. LCOE was a useful metric to assess the cost competitiveness of a generation technology when all generators had similar availability and dispatchability attributes. With the rise of intermittent renewable energy which does not have these attributes to the same degree, LCOE has become a meaningless metric (the proverbial comparison of apples and oranges). However, LCOE is still often used by renewable energy advocates who point to the very low LCOE of wind and solar when claiming renewables are now cheaper than all other sources of power. Serious energy policy now uses System Levelised Cost of Electricity (S-LCOE) to reflect the costs of intermittency and other externalised costs of renewable energy not borne by renewable investors.

[4] Interested non-technical readers should refer to Meredith Angwin’s Shorting the Grid which is the best non-technical description I have read of how network operators ensure grid availability of greater than 99.99%.

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Why don’t we demand Zero Emissions Always On Affordable Power

The post Why Don’t we Demand Zero Emissions, “Always On”, Affordable Power? first appeared on Nuclear for Climate Australia.

For the same money nuclear energy can deliver power prices at half those of NSW Energy Minister’s $32 Billion renewable energy scheme.

The renewable energy scheme would deliver only mediocre emissions reductions at about half our existing levels or about 400gr CO2/kWh.

For the same money, a fleet of 25 small nuclear power plants using our existing grid would get emissions down below 50 gr CO2/kwh or around 10 times better than renewables.

Similar outcomes would occur in most other Australian states.

On this podcast Rob Parker speaks with 2GB’s Luke Grant on Australia Overnight about such a nuclear energy scheme and how our entire state could benefit.

Listen to the interview by clicking on the slider:

The $32 billion renewables plan for NSW announced by Matt Kean would, if implemented, consign our state to high power prices, entrench gas use and expensive storage and deliver only a modest reduction in carbon emissions.

Robert Parker

Nuclear For Climate Australia

https://nuclearforclimate.com.au/

The post Nuclear Energy Podcast – Low cost and a proven low emissions first appeared on Nuclear for Climate Australia.