It was insightful to say the least, and slightly distressing to say the most. I was fortunate to attend a Committee for Economic Development of Australia (CEDA) forum recently on South Australia’s energy future.

Sadly, the scheduled speaker on nuclear energy, Eric Smyth from Toro Resources, was prevented from attending by a certain ash cloud.  I took some careful notes from the day though. Here’s what I learned.

From SA’s energy Minister Michael O’Brien I learned “we must replace the coal generation assets, carbon price or not”. He added that the Leigh Creek coal reserve will run out at 2020 at the latest. It was mentioned that the resource could be expanded by “shandying” the coal. This means bringing in other coal by boat and mixing it together with the Leigh Creek reserves to prolong the life of the assets. If ever there was proof of our addiction to fossil fuels, surely that is it: burning one fossil fuel to ship in another fossil fuel to top up reserves of a third fossil fuel, in the year 2011 when we know full well we need to stop using fossil fuels.

I then learned that South Australians can expect dramatic rises in the price of electricity, in the order of around 30%, quite rapidly. The expected carbon price is in fact the lesser contributor to this anticipated rise. The main culprits are:

  • Required investments in upgrading/replacing aging transmission and distribution infrastructure
  • Strong upward price pressure on gas, of which SA consumes a lot
  • The looming need to replace our coal plants due to both the age of the plants, and the dwindling coal resource
  • Only then, the additional pressure from a carbon price comes into play

In the very same speech, the Minister then very casually, as if the result were perfectly obvious, made it clear that the expected pathway for South Australia is to transition from coal to more gas and keep investing heavily in renewable energy.

Pardon? I am concerned that I may have been the only person in the room who noticed that this assumption is in direct defiance of all of the pressures on power prices the Minister had just nominated, i.e. a portfolio of generation that will embed:

  • Significant additional investment needs in poles and wires to connect renewable generation sources, and possibly upgrades to gas transmission infrastructure
  • Greater dependence on a fuel with sky-rocketing global demand, where the price of fuel strongly impacts the price of the electricity
  • Locking in massive exposure to the carbon price for the 40-60 year life of this very expensive infrastructure

The Minister is hardly unique in running on this assumption of moving to gas, such is its dominance in forecasts and scenarios of Australian and world energy trends. We seem on track to do this in preference to an introduction of nuclear power which would embed:

  • Virtually nil additional transmission and distribution infrastructure investments because nuclear plants can be readily sited near the existing network, even to the extent of using the exact same sites as to-be-decommissioned coal
  • Virtually nil exposure to fuel prices, since the price of uranium makes little difference to the price of nuclear electricity (because it requires so little fuel)
  • Virtually nil exposure to the carbon price because it is zero carbon

The refusal to even talk about this power source and instead punish South Australians with even higher power prices defies common sense and responsible economic leadership. I felt like I was sitting in some sort of logical twilight zone. I had better harden up as its early days for me on this issue yet.

After slapping myself in the face a few times to recover, I enjoyed several interesting presentations on SA’s energy future. In the absence of Toro, much of the discussion centred on renewables, which is reasonable given SA’s huge share of Australian wind power and great solar resource.

What I liked about this day is that I wasn’t hearing from activists of any kind. I was hearing from the people and organisations who are out there working damn hard to actually get renewables up and running at scale in Australia. From that point of view I weight their feedback very heavily since they are operating from a less emotional and frankly more honest motivator: their own success, financially and professionally speaking. They are also operating from a vantage point where platitudes are meaningless, and practicalities are everything. The people I am talking about are:

  • Mark Headland from Investec, who has been responsible for securing project financing for a large wind farm in Western Australia
  • Craig Chambers from Parsons Brinkerhoff, who has obviously poured a lot of blood, sweat and tears into preparing a comprehensive project plan for a large Concentrating Solar Thermal power plant, in the hope of securing funding under Solar Flagships.
  • Professor Mary O’Kane, Chairperson for the Australian Centre for Renewable Energy. She knows a thing or two about renewable energy as you would expect, and spoke a lot about the prospects of geothermal power for South Australia.

So what did they say? Well, as the title of the post suggests, while they all remained appropriately positive about these ventures and the prospects for renewable generation in general, it was one reality check after another in terms of how much renewables can be expected to contribute in the coming decades. Here are a few direct quotes from my notes of the day (NB I was not recording, so no doubt some paraphrasing has crept in):

Professor Mary O’Kane

“We talk about them (renewables) as if they are ready…they are actually often inefficient and involve long timeframes, high technology risk and high financing”. (ACRE is heavily involved in supporting geothermal, and this quote and much of Professor O’Kane’s presentation was relevant to discussion of geothermal).

“Efficiency improvements in solar technology can be expected in the order of percentages, not jumps and revolutions.”

“Australia has a long, skinny grid. It is hierarchical, and not designed to pick up renewables.”

Mark Headland

“Meeting the existing renewable energy target will require an 8-fold increase in wind generating capacity in Australia”.

“Windy land isn’t a scarce resource; the scarce resource is windy land with a connection”.

Craig Chambers

“Quarantining the necessary area of land for the proposed solar development is a big challenge”.

“It’s difficult to get a commitment for a small quantity of gas to be delivered for the times the plant will require back-up”.

The presentations gave me confidence that I have not inadvertently become a renewable energy knocker over time. My approach through Decarbonise SA is a realistic one. In a goal of rapid decarbonisation, there is simply no way of glossing over these significant constraints to the expansion of renewable energy. I am more than happy to see intelligent and driven people, such as  those I have quoted above, throw themselves at the challenge of overcoming these constraints. But I would be eternally grateful if we might enable open discussions on nuclear power to take place at the same time without the objections, tacit or otherwise, of the supporters of renewable energy. That is no direct reference to any of these speakers, but rather to the generalised attitude of renewable-or-nothing that pervades environmentalism in South Australia.

So when question time arrived, it felt like the room had had half a conversation about energy. Now, I sat on my hands at the Garnaut presentation, but if you can’t talk nuclear at CEDA… so up went the hand.

“We’ve just heard Michael O’Brien tell us to expect huge price rises on the back of transmission and distribution costs, rising fuel costs, and a carbon price. But everyone seems to automatically assume that we will be changing coal for gas and more renewable, which will increase our exposure to all of these things. Surely it’s time to consider nuclear power, with nearly no exposure to changes in fuel price, no exposure to carbon price, and no need to build new infrastructure. Shouldn’t we look at nuclear?”

Imagine my delight when MC Hamilton Calder chimed in to say that I had asked, to the exact points, the question that Erica Smyth from Toro Resources had wanted asked. Result!

Jason Kuchel from SACOME gave clear support for considering Small Modular Reactors to enable remote mining exploration without the constraint of power supply. The next supportive answer came from a surprising source in Professor Mary O’Kane, who said “Of course we should be considering it… but we should also be considering geothermal”.

Had I been a member of the panel, I would have challenged this to be sure she was not suggesting that the two technologies were somehow comparable in terms of their ready deployment, having just heard in some detail the challenges that are being experienced in identifying and proving the geothermal resource and actually getting power from it. I decided it was the better part of valour not to duke it out from the floor.

To complete the session, a question from an Adelaide University professor hit the nail on the head: “Nothing I have heard today is going to enable us to hit the targets we need to meet in cutting greenhouse gases”. Professor, I couldn’t have said it better myself. We must always keep a clear head around what we are actually doing; building renewable energy or cutting greenhouse gas emissions. While related, the two are not the same thing.

Just days later, the first two winners of funding under the Federal Government Solar Flagships program were released. As I have repeatedly stated I am not anti-renewables, and nor am I anti these specific projects. My congratulations to the successful bidders, and no doubt we will learn much from the implementation of these projects. However I do hope that the numbers I am about to run by you will begin to put paid to the persistent suggestion that nuclear power is somehow a comparatively expensive way to generate zero carbon electricity in Australia, even with our superior solar resource.

The first successful project is the Moree Solar Farm. Here are the vital statistics:

  • 150 MW of photo voltaic technology mounted on single axis trackers
  • 650,000 solar panels
  • 1,200 hectares (12 km2)
  • Anticipated annual generation of 404,000 MWh, giving a capacity factor of 31%
  • Cost of $923 million, with funding of $306.5 million
  • These figures suggest a cost of $6,150 per kW installed capacity

The second successful project is the Solar Dawn solar thermal gas hybrid plant. Here are the vital statistics:

  • 250 MW of concentrating solar thermal
  • Total cost of $1.2 billion, with funding of $464 million plus an extra $75 million from the Queensland State Government
  • Using a bit of reverse number crunching based on the “number of households” they say it will supply (70,000, versus 45,000 for the Moree Solar Farm), I get a capacity factor of just under 30%.
  • These figures suggest a cost of around $4,800 per kW of installed capacity

The World Nuclear Association quotes a world median price of $4,100 per kW installed for nuclear, suggesting it is comfortably cheaper than both Solar Dawn and Moree Solar Farm. But of course, lest we forget the capacity factor. Where the above projects sit at around 30% (which is about typical for this intermittent power source), nuclear can deliver at above 90% capacity factor. In South Australia, were nuclear to do the current job of our coal baseload, our peaky demand profile means we could expect it to deliver at 60% capacity factor: fully double the output of electricity per installed MW, available on demand 24 hours a day. In both financial and reliability terms there is clear daylight between nuclear power and solar. Land and resource requirements are other serious considerations where nuclear comes out way ahead.

Let’s not be coy. With over $500 million available to a single project, the consortia applying for this funding have not held anything back. These projects are the best examples of what solar can deliver in Australia in 2011. Furthermore, we are not talking about Government support in the form of loan guarantees or special insurance schemes, as the enemies of nuclear power like to constantly harp on about. Three quarters of a billion dollars has just been committed to transfer from the Australian Government to the private sector. These projects are not run by Mum and Dad community collectives. We are talking the likes of BP here people.

It’s time to face facts. We have tricked ourselves into having expectations of technologies like wind, solar and geothermal that far exceed their capacity to deliver. We can’t go on ignoring the fact that there is gross mismatch of timing between the current urgency of the climate crisis and the likely future ability of these technologies to deliver on our energy needs, cost effectively and at scale. That’s nobody’s fault. It’s not a conspiracy. It’s not lack of funding, research or support. It’s the challenge of taking energy that is dispersed, dilute, intermittent and location-specific and then capturing, storing, moving and dispatching it to where we need it, when we need it. It’s bloody hard, and so far we are not that good at it.

Good luck to these renewable initiatives. But in the serious fight against climate change, it’s not going to be enough. To urgently expel coal from the energy supply and give ourselves a fighting chance of wresting back control of the climate, we need to deploy the most affordable, zero-carbon, baseload suitable energy source available right now. That’s nuclear power.

29 comments

  1. Very solid work, Ben, great stuff. I reckon you ought to submit it (suitably modified) to Giles Parkinson at climatespectator.com.au. As well as getting a wider audience, it’d be a good litmus test as to whether they are genuinely about climate solutions, or just renewable energy cheerleading.

    I’m a bit surprised to hear of “challenges that are being experienced in identifying and proving the geothermal resource”. Maybe it’s because this is the aspect that I know a bit about (in a professional sense), but I would have thought this to be the easy part. Heaven help them if they’re struggling with that, because “actually getting power from it” will be a damn sight harder.

    I take it that any notion of replacing/stretching out Leigh Creek with brown coal from Bowmans or elsewhere in the St Vincent Basin (as was toyed with in the early 1980s) was right off the table?

    1. Hi Mark, thanks for that. I’ll follow you suggestion and make the submission.

      For the geothermal, I’m afraid so. Even the knowledge of how big the resource is, and where, is pretty high level, basically to the point where they struggle to get financing to do further work. The problem is that the exploration itself to get more certainty is so damn difficult and expensive, it’s a really vicious cycle. I was really suprised to learn just how much further away geothermal is than I had believed it to be a few years ago. It sounds like it has not been a fun process for those trying to do it.

      No mention of opening up new coal reserves in South Australia.

      1. Interesting. It’s not like SA doesn’t have substantial coal resources (http://www.pir.sa.gov.au/__data/assets/pdf_file/0009/90198/sa_coal_potential.pdf), but they’re generally either low-grade, remote, or deep, or some combination of the three. It seems that coal seam gas or in-situ coal-to-liquids or gasification might be the means by which some of these might be exploited. Maybe the presumption of the CEDA forum was that the carbon tax would price these out of the market, but it doesn’t look any of the non-nuclear alternatives are ready to compete at the scale required any time soon. Not that this helps with decarbonisation, of course.

  2. Thanks you Ben for committing your time and energy in representing this issue in the CEDA forum.

    Did anyone from the panel respond to your question? If so, what was the nature of the response? In particular, did the Minister speak to your points?

    1. Hi John,

      The Minister did as Minsters do, which is open with a speech and then leave (not a criticism of him, just an observation that it is normal). Beyond what I wrote up, there was little more response to my question from the panel of 7. The representative from International Power mentioned a “broad portfolio of solutions including nuclear, renewables and clean coal…”, but he is so completely vested in prolonging coal I can’t give his reponse much credence other than as a way of keeping coal in the picture, given that nuclear is the only thing that might displace it.

      The funny part came right at the beginning after the MC had thrown it to the panel to asnwer. There was about three seconds of total, uncomfortable silence before Jason Kuchel came to the rescue. You would think I had proposed catching and burning hairy-nosed wombats as a power source, such was the discomfort. It’s insane that this is the case even at a forum like CEDA, we really need to get over it. Overall I was disappointed with the quality of the response.

  3. 1200 freaking hectares of productive land to go under those solar panels? Still, if it’s beef ro dairy farming, at least we’ll save the methane emissions. I wonder what the embedded energy cost of that glass and steel is. And what the expected life of the asset is? Not the 80 years you can get from a nuclear power plant I bet.

    The limited information on how much gas Australia has left isn’t necessarily reliable, but if we switched to gas fired power genertaion, it appears we’d run out in about 30 years: http://www.theoildrum.com/node/4094

    1. I suspect Geoff Russel would have some ready figures on the embodied energy. Geoff, if you are listening…

      I know. 1200 hectares of farmland in a world of changing climate and spiralling population. It beggars belief that this is flagship environmentalism.

  4. Professor Mary O’Kane said:

    “Of course we should be considering it [nuclear power]… but we should also be considering geothermal”.

    The way O’Kane frames this comment is a perfect illustration of the way the question of nuclear power is framed in general, that is, with the implicit assumption that a proposition which includes nuclear power must somehow automatically mean that renewables will be excluded. Why do answers on nuclear power always have to be qualified with ‘warnings’ that renewables must also be pursued? I wonder, is this because (in Australia) pro-nuclear sectors of the community have traditionally been right wing and the right is thought to reject renewables (and all that renewables have traditionally stood for on the left); or is it because they fear nuclear power’s efficacy will render the pursuit of the various renewable ‘alternatives’ unnecessary?

    Perhaps it’s a little of both. Historically speaking, there is some truth to the first of these concerns, but we must somehow make it clear that, like nuclear power, renewables are just tools and that in both cases their adoption as representatives for this or that political ideal is mere symbolism. Neither tool can deliver us the kind of societies we want if your, or my, idealised future does not marry with the desired future society of the majority. For example, if renewables are being built and deployed by the likes of Rio Tinto, AREVA and BP with the intention of supplying the needs of modern western societies whose populations number in the billions, then they are not going to deliver us a decentralised, small scale, low population, friendly, inclusive world of eco-villages. On the other hand if everyone does want a low population, small scale, low environmental impact society then small modular reactors would be a useful adjunct to the change.

    As to the second concern I don’t know that a grid which is supplied by 100% nuclear power would actually be ideal. I believe load following is made much easier if one has at least one other generator type which can quickly respond to changes in demand. As such, I imagine geothermal would be the the perfect compliment to nuclear power in the SA grid and the two most certainly would not be mutually exclusive.

  5. Oh and you’re too charitable to the proponents of renewable energy. While they’re certainly dealing with real world figures and complexities, I’m sure they’re also needing to upsell their products, individually and collectively, a sense of gloom about the realities of renewables wouldn’t be terribly politic.

  6. Marion,we have had coal generated electricity for years without any sort of load following backup.Latterly gas has been used for peak generation,probably because it is cheaper to build a small gas plant than expand a coal burner. Tell me,why can’t a modern nuclear plant load follow or load shed a with any less efficiency than a 30 year old coal plant?

    By the way,deep hot rock geothermal is a very long way from commercial application.

    1. Podargus

      I don’t pretend to be any sort of expert on energy matters but judging by your criticisms you aren’t either.

      Tell me,why can’t a modern nuclear plant load follow or load shed a with any less efficiency than a 30 year old coal plant?

      I didn’t say it wasn’t possible but that it wasn’t ideal. If one had a second, mature, zero emissions, electricity generating technology at hand which was ideal for load following – hydro say, or maybe, one-day, in the future, dry rock geothermal (would it be ideal for load following?) – then, in terms of efficiency and cost effectiveness, one would be a fool not to use it. Unnecessarily running your power stations at a low capacity factor is surely not ideal.

      My comment on geothermal does not make the assumption that it is commercially available now; it merely holds to the possibility that it will be available at some time in the future, in which case both nuclear and geothermal (or some whopping great, cheap, storage solution, or whatever) would be complimentary technologies as opposed to being competing alternatives.

    2. Tell me,why can’t a modern nuclear plant load follow or load shed a with any less efficiency than a 30 year old coal plant?

      My understanding is that they can’t, not readily at all, it takes up to a day to fully spin up or down a large coal or nuclear power plant, and if forced to laod follow, they either simply waste a lot of energy and run well below peak efficiency, or run as they’re designed to and shed they electricity (into the ground?). Trying to load follow can degrade the asset. A gas turbine is far more switchable, it can come onstream in 15 minutes or so, as can hydro.

      They build peaking gas plants that are expected to operate for only a few months of the year (summer afternoons, winter mornings) because they’re relatively quick and cheap to build, and sell their electricity at premiums. Not something that a nuke, with their massive capital cost, can afford to do.

      Of course, solar and wind don’t follow demand, they follow supply. Which many think is a fatal flaw. Even in the hottest clearest deserts, one cloud can cause major spikes in production, that the system has to deal with.

      The least carbon energy system would have all fo the baseload provided by non-switchable sources (nukes of course, plus those renewables that are steady, being wave, tidal, geothermal), expected additional summer demand periods covered by CST, and peak loads covered by hydro and biofuels (timber and crop wastes). Wind can spin around and do what it does, as long as it’s no more than 15% of the total mix.

  7. Noting some of the focus on HDR geothermal, that was perhaps the biggest “Reality Check” area of the whole session. It is certainly not proving to be easy. It is very expensive to explore. There is a huge investment in transmission required to access it. Mary O’Kane was pretty frank about all of this while reinforcing ACRE’s continued committed support. The big challenge seems to be getting things to a point where banks will play ball and come to the table with some money. I think financial institutions provide perhaps the best analysis of how viable these things are, because they bring a minimum of emotional bias to the decision of whether or not to invest.

    This is why I have spoken in this post not about the fault lying with the technologies, but rather with our expectations of them, which are clearly right out of whack. If we deploy a generation of nuclear power as our zero carbon energy it would alleviate the absurd pressure we are placing on technologies like geothermal to perform at such a massive scale, so soon.

  8. Great work Ben, thanks for the report. I’m only surprised you didn’t volunteer to take Eric Smyth’s place on the panel…

  9. Marion and wilful – you’re correct,I’m certainly no expert on energy matters and I have no idea how
    grid systems are controlled.I have a great deal of admiration for the people who do the job.

    And they have been doing that job for many years now with coal fired generators.A conventional nuclear plant is similar in many respects to a coal burner in that there must be sufficient spinning reserve to cover peak loads or unanticipated events.With nuclear that spinning reserve is not costing the environment anything and it won’t be costing the operator very much either.

    We are never going to achieve anywhere near 100% efficiency in fuel use.Any quest for that is detracting from the mission – get coal and gas out of electricity generation in Australia ASAP.

    This is the urgent task and making equivocal statements about supporting
    renewables,geothermal,gas backup etc etc will not further the cause of nuclear electricity generation one iota. It is obvious to me that nuclear alone is our only realistic option.

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