ExxonMobil, XTO, and climate change strategy
On January 24, 2014, the The Society of Environmental Journalists and the Woodrow Wilson Center’s Environmental Change and Security Program presented a panel discussion titled The Year Ahead in Environment and Energy.
I found out about it via this tweet from Andy Revkin:
Video: Enviro journalists on Keystone, gas boom, western drought, much more at @TheWilsonCenter http://t.co/e2qGzltlSu #sej
— Andy Revkin (@Revkin) January 25, 2014
Because I know that many of you don’t have the time nor the patience to watch an hour long Q&A session, I toughed it out for you. There is a fascinating exchange featuring Coral Davenport of the New York Times and Suzanne Goldenberg of the Guardian.
Danny Richter: Hello. My name is Danny Richter. I’m with the Citizens’ Climate Lobby and I’m curious about the intersection between business and climate. There were a couple of stories by Coral in December about 29 businesses that are using an internal carbon price and today, about Coke, and the impact of drought on their business.
It seems to me, if it’s not new for businesses, it’s new for the rest of the world, especially congressmen. And there dose seem to be an emphasis on a carbon tax, which of course our group likes, but I’m curious about your thoughts. How might this new emphasis or awareness of businesses caring about climate affect the psychology of your average Republican congressman.
Coral Davenport: That will be really interesting to see. One business that I’m going to be keeping a close eye on is Monsanto, which is another one of these companies that is
seeing volatility, that is in a lot of red districts and has also talked about seeing volatility. Anyone who works with agriculture in any way is pretty open about experiencing volatility, unpredictability, changes in weather.
A lot of these companies are very closely affiliated with the Republican Party, are major donors. ExxonMobil is another really interesting one. They are very open about acknowledging carbon emissions cause climate change; they’re on the same page as the IPCC with the science. They’re incorporating a price on carbon; they’ve proposed a possible carbon price tax swap, should the day ever come. They’re always clear to say they’re not lobbying for it now, but should the day ever come and it looks like a carbon tax will be on the table, ExxonMobil has their own proposal.
You know, they’re a major contributor to Republican lawmakers and they’ve been comfortable saying “we’re going to be in a different place from these lawmakers. I think that’s where, if there is going to be a shift in the Republican Party, I think it’s going to be when their corporate friends and donors say, well, this is where we are on this.
Suzanne Goldenberg: But it’s interesting, isn’t it that ExxonMobil, until 2007-2008 was one of the big funders of the climate change denial movement.
Coral Davenport: (Interrupting) Yeah, until they bought XTO. No, it wasn’t under pressure, it was when they bought XTO and became the largest natural gas producer in the US and then became poised to profit.
Suzanne Goldenberg: But they now no longer contribute to that, and yet Republican beliefs on climate change continue to oppose the science, so…?
Coral Davenport: Well, I think that there…
Suzanne Goldenberg: We did see a clear break here between corporations and the Republicans in congress and it seems that there are a lot of ideological forces that come into play as well, not just business groups…
The Coral Davenport article that Mr. Richter mentioned was published by the New York Times on December 5, 2013. The web version of the article appears under the headline of Large Companies Prepared to Pay Price on Carbon.
The article describes how different businesses have a different opinion on the relationship between CO2 emissions and climate change, and that, contrary to what Ms. Goldenberg implies, it has nothing to do with science or ideology. Most for-profit companies have no ideology; their job is to make money for shareholders. If the business thinks they can implement a strategy that enables them to see an overall increase in profit from carbon taxes and actions to control emissions, they will lobby for those changes.
Businesses that calculate their businesses will be harmed by carbon taxes or actions to restrict CO2 emissions will lobby against those types of initiatives. Here is an important quote from Ms. Davenport’s December 5th article:
Robert Murphy, senior economist at the American Energy Alliance, said his group was not concerned that it had taken a different position from the major oil companies. “We’re not taking marching orders from Big Oil,” he said.
In fact, Koch has a longtime resentment of the biggest oil companies.
According to company history, Koch’s founder, Fred Koch, the father of Charles and David, invented a chemical process to more efficiently refine oil but was blocked from bringing it to the market by the nation’s largest oil companies, including Standard Oil of New Jersey, which today is known as Exxon Mobil.
People at Koch say sore feelings remain to this day.
My goal here is to stimulate critical thinking about why you hear what you hear about the risk of climate change. I believe it helps to explain why the public perception has undergone noticeable cycles during the period since 1992, when the first major world wide conference of the parties (COP) on climate change took place in Kyoto, Japan.
In the mid to late 1990s, when natural gas seemed abundant enough to be cheap and it’s suppliers want to build market share, they promoted its lower CO2 emissions. People in the media started caring a lot about climate change because their advertisers seemed concerned. Major environmental groups joined in the chorus and often received substantial foundation or individual donor grants for doing so.
When natural gas prices rose high enough in the period from 2004-2008 to make a nuclear renaissance, even with its high start up costs, seem like an economically viable course of action, there was strong support for the movement that denied the value of action to reduce CO2 emissions. Compared to coal, natural gas may seem clean, but compared to nuclear energy’s 10-20 grams of CO2 per kilowatt hour (lifecycle), natural gas’s 400-600 grams of CO2 per kilowatt-hour are staggeringly high.
After the Great Recession destroyed natural gas demand and the technological combination of hydraulic fracturing combined with horizontal drilling provided a surge in supply, prices fell to lows that were less than 1/6th of the monthly highs in 2008. That price collapse hurt some gas producers, but its main effect was to make the revival of nuclear equipment and construction infrastructure looks dauntingly expensive.
Now that the US nuclear renaissance seems like a distant future dream, the sine wave of public interest in CO2 driven climate change has bottomed out and seems poised to increase again. That rise will be another demonstration of the power of propaganda to mold public opinion for profit.
Aside: On the advice of an Atomic Insights reader, I recently started studying the work of a man named Edward Bernays. My first step was to read his 1928 classic titled Propaganda. If you are interested in how business marketing departments think and strategize, that’s a decent place to start. End Aside.
The petroleum industry’s marketing machinery has had about 165 years to develop its skills. It can be compared to Major League Baseball or the NFL; they are masters of marketing. On the same scale, nuclear industry marketers are still playing tee-ball or flag football.
Aside: To be fair, there were NEI signs behind the goal at Washington Capital National Hockey League games in 2009. End Aside.
There is no doubt that it is a bad idea, for a number of reasons, to continue dumping 36 billion tons of CO2 into the atmosphere every year. It’s also not such a great idea to engage in extreme measures to dig stored hydrocarbons out of the ground every year to supply a growing, more prosperous world population.
Investing an enormous amount of capital to shift to another hydrocarbon fuel source that is only half as dirty as coal seems analogous to building a bridge halfway across a gorge; it results in a precarious position with no easy escape.
That is especially true since we know that we have at least three available superfuels (uranium, thorium and plutonium) that can provide inexhaustible sources of nearly CO2-free power. I’m positive that the smart folks at ExxonMobil know about nuclear energy and are making plans to position themselves to prosper in a fission fueled economy.
It’s time to take action to encourage them to feel the need to implement their strategies more quickly than planned.
I believe Exxon used to own a nuclear fuel fabrication facility in Richland, Wash. They know nuclear.
If those guys aren’t smart enough to know nuclear, they have the money to hire those that do.
Shell had intermittent interest in nuclear power too, but it didn’t come to anything.
I’d really like to see the oil and gas giants diversify into nuclear, I don’t care who gets the profits from it as long as someone with a lot of oompf is shouldering the task.
This is interesting too, “…invented a chemical process to more efficiently refine oil but was blocked from bringing it to the market by the nation’s largest oil companies…” and I wonder why that was, or if it’s correct anyway. Because oil companies are always looking for more efficient refining, as that lowers their costs. You’d think they’d jump at a better process, buying it from Koch like they buy the best cracking catalysts from specialist companies.
Nitpick on spelling, Rod, as I see that Engineer Poet didn’t point to it yet: “…departments thing and strategize…” is “think” I guess.
Thanks. Spelling error corrected. Shell’s biggest interest in nuclear was its 50% purchase in 1973 of Gulf General Atomics. Gulf invited Shell in to provide additional capital to develop the 10 HTGR’s for which it had orders. They were a scaled up version of the 330 MWe reactor that was operating at Ft. St. Vrain.
After the purchase, Shell’s sales force spent a good portion of the next year visiting customers and convincing them to cancel their orders. The official story line is that they did due diligence after they invested and decided that the design was not really ready, which meant that the projects would be money losers.
I have a different interpretation of why a major oil company would work so hard to stop the sales of more efficient HTGRs that had several operational advantages over LWRs..
Future post topic?
36 billion tpy into the atmosphere, or less than a thousand tpy of fission products most of which stay locked up inside their cladding? Yet the Greens strain at the nuclear gnat while swallowing the renewable camel.
Rod, for how many years have we, collectively, been “dumping 36 billion tons of CO2” into the atmosphere? I am curious because of the pause in global average temperature increases over the past 15 years that none of the IPCC climate models predicted. You know I favor nuclear fission-based power for base-load electricity and industrial heat processes and look forward to the deployment of hundreds or thousands of SMRs in whatever fuel configuration can be approved by the NRC. The need for, and use of, hydrocarbon liquid fuels for transportation purposes will not be directly impacted by expanded nuclear power use, other than in coal liquefaction, perhaps. I appreciate your keeping us informed on these various topics.
1. Every surface temperature dataset shows global surface temperatures increasing over the past 15 years. Cowtan and Way (2013) showed pretty convincingly that the apparent slowdown in recent global surface temperature datasets is largely an artifact of incomplete geographical coverage.
2. Over 90% of the global energy imbalance goes into ocean heat content; only 3% goes into the atmosphere. There is no indication of any slowdown in OHC increase over the past 15 years.
3. IPCC climate models are roughly as variable as the Earth’s actual climate. Out of 21 models of the IPCC AR4-A1B model group, 7 show periods of 15 years or longer, ending in the 21st century, in which the global surface temperature trend was 0.73° per century or less (matching the GISS trend for the past 15 years). So when you say “none” of the IPCC models predicted it, I have to wonder where you’re getting your information.
…”ExxonMobil know about nuclear energy and are making plans to position themselves to prosper in a fission fueled economy.” What? No leaks? Where’s Julian Assange when we need him?
The plan must be not to develop it themselves but just acquire companies already developing fissioning systems. How soon can we get them to sweep through the landscape and really get things rolling again?
When it actually comes to their own money, what odds do we place that they’ll invest in weak, Low power density, intermittent power sources to ameliorate their Carbon expenditure?
“The plan must be not to develop it themselves but just acquire companies already developing fissioning systems. How soon can we get them to sweep through the landscape and really get things rolling again?”
I’d guess in less than 10 years. Mr.King Hubbert’s peak oil is already happening despite the finding of new oil. It would be less risk and probably less cost to just buy something that works as an investment. Don’t worry, the same rich folks that run the oil business will be owning the nuke business when the time is right.
It might not be a bad thing for those people to be in the nuclear business. They have talented people that could use nuclear process heat to fabricate new fuels. They’ve got a lot of money to do it as well. Maybe they could develop the LFTR as a side project.
The fossil fuel industry certainly has capital resources and project management skills that would allow them to do very well in the nuclear energy business. However, they need to learn how to operate in a very different type of business where people are more important than the ability to negotiated sweet deals with tribal leaders, dictators and oligarchs and where patient technology development is more important than the ability to move massive quantities of material from one side of the globe to the other.
Much of the capital equipment that gives the oil companies their existing value would not be worth as much in a world where a 9 gram pellet of fuel contains as much energy as three barrels of oil. It would be worth even less once recycling has been refined to the point where that same pellet contains as much energy as 60 barrels of oil.
Fission may have a future, but wind and solar have a present–do the math:
For order of magnitude thinking: 5000 5 MW wind turbines per state could provide all the electricity we need, including powering electric (or hydrogen) cars. That’s doable.
We’re investing almost $1 trillion per year on oil development (Carbon Tracker data). Just shifting that money to renewables would get us to 80% reduction in fossil fuels in 10-20 years: A 5 MW wind turbine costs about $5M, so that trillion dollars could buy 200,000 turbines–each year. Solar comes in at similar prices. That trillion comes out to enough new power for another 1 billion people with European or American lifestyles per year. That includes the 20% power factor for wind (or solar). But add another factor of 3 for transmission and some storage, and we can do 8 billion people in 24 years at current wind and solar prices. Those costs will fall another 2-4x in that time.
We don’t have to wait for a nuclear revival to get moving full speed towards eliminating fossil fuels. Of course we could wait, but the cost of waiting is high.
Thank you for joining in the conversation. I hope you enjoy it enough to stick around for a while.
You will find people here who love doing the math and enjoy learning by following links to good reference material. To keep spam under control, posts with more than a link or two may take a few hours to make it through moderation, but we encourage those links rather than telling people to “Google it.” Search engines don’t alway provide easy access to the source the poster was using as their reference.
Now that those preliminaries are over, I’m interested in learning more about your numbers.
Where can one order a 5 MWe wind turbine for onshore use? I am especially interested in finding the vendor that is offering such machines for just $1,000 per kilowatt of peak capacity.
The annual electricity generation in the US is roughly 4 million GW-hours. Here is a table from the Energy Information Agency that provides some useful summary numbers for 2012 – http://www.eia.gov/electricity/annual/html/epa_01_01.html (The table says “thousand megawatt-hours, that’s the same as GW-hrs.)
If your proposed 5,000 wind turbines each have a capacity of 5 MW and operate at a generous capacity factor of 33%, the total generation that your system would provide would be 5,000 x 5 MWe x 1 GW / 1000 MW x 0.33 x 8760 hours/year x 50 = 3.6 million GW-hrs.
If they operate at a more realistic CF of 25%, the total generation would be 2.7 million GW-hrs.
You are a little shy of the requirements. I’ll stop there and let others pick at a few more points.
: A 5 MW wind turbine costs about $5M, so that trillion dollars could buy 200,000 turbines–each year. Solar comes in at similar prices.
Do we really want to plaster over land and seascapes and pristine mountains and deserts with windmills and glass panels at any price just to get our juice?
“Do we really want to plaster over land and seascapes and pristine mountains and deserts with windmills and glass panels at any price just to get our juice?”
Well, I’ve seen San Onofre and Diablo, and they ain’t exactly what I’d call “pretty”‘.
I’m well aware of the visual destruction of our wild areas that our quest for energy entails. Living in Tehachapi, and regularly commuting through the Mojave, I have the opportunity to see huge windfarms as well as acreage gobbling solar facilities. And having stood on the bluffs in Bakersfield, overlooking the Standard oilfields in and around Oildale…..I have plenty of visuals with which to base an opinion.
Personally, I find the windfarms less than visually offensive. The newer generation of towers and turbines are actually attractive and streamlined, in a techie sort of way. And the actual desert and hillsides, at ground level, enjoy an ability to maintain the natural flora and fauna of the area. I’ve actually seen wild horses grazing under the turbines five minutes out of Tehachapi out towards Willow Springs. And the native vegetation, although thinned, is thriving. This is true of the desert wind farms as well. Certainly, I prefer the visual of a large wind farm over the environmental carnage that is the defining image of an oilfield, such as the Oildale field, where the landscape is obscenely altered and scarred.
And the solar fields? Well, if you’re headed into Tehachapi on the Mojave side of the Tehachapi mountains, through Willow Springs, you pass one such solar field that is about two miles off the highway. The first time I glimpsed it, I mistook it for a body of water, as the panels are really quite low to the ground, and the sun shimmer tricked my eyes. As the highway ascends in altitude, it becomes apparent that you are looking at a solar facility. But at no time are you assailed by a visual obscenity, and it certainly lacks the in-your-face impact that a nuclear plant presents as you drive by it, or a wind farm, or an oilfield.
My personal preference, as far as having the least impact visually, is remotely placed solar farms, such as the one outside of Willow Springs. The low profile of the facility is desirable. But then, of course, you need the infrastructure to get the energy to the consumer….and those erector set towers are certainly not “low profile”, although, come to think of it, I noticed no such towers around this partricule facility. Perhaps they are going underground?
Honestly, I’m glad, when I am looking at the hillsides around Tehachapi, I’m seeing wind turbines, and not a nuclear power plant, or an oil field. I think that herd of wild horses would agree with me.
Im not sure the eagles would agree.
Wind does not “replace” nuclear power. Ever.
Also look at the land use/power generation stats before you make a judgment call here.
Just in rated capacity it is about half the output of San Onofre and involves over 10,000 acres. Thats support infrastructure like road pads and grid resources.
San Onofre was less than 100 acres.
How can you be so unmindful of reality in your “environmentalism.”
I was making the comparison to the Alta Wind Energy project current intrusion and technically wild horses shouldn’t even be there. They are not endemic. Eagles, raptors and condors are.
Here’s an existing issue that confronts California and other parts of the country at various times: we (CA) are facing a drought due to one of the driest winters on record, following 2 previous winters of less-than-adequate rain and snow pack. Southern California gets most of its fresh water from Northern California reservoirs. California has not built new surface water storage in over 30 years while its population has increased by nearly 20 million people. One viable way to increase fresh water for SoCal is to desalinate ocean water, thereby mitigating the need for NoCal water. How do you propose wind turbines or solar farms could accomplish that task? As far as I know, only nuclear power plants could provide the heat and concentrated electricity needed to enable the desalination processing and industrial process heat for various uses in LA manufacturing.
I care about the entire environment not just co2 emissions. You can’t tell me that putting up thousands of ugly wind turbines that will clear the air of any living birds or clearing hundreds of square miles to be covered with solar panels is good for the environment. In my opinion being able to take in unspoiled scenic views and hear birds in the background is a very important part of environmentalism. The argument that cats kill as many birds as wind turbines is total bs, cats are not killing bald eagles!
“You can’t tell me that putting up thousands of ugly wind turbines that will clear the air of any living birds….”
Sorry man, but thats pure unadultered horse crap. I have never seen, elsewhere, the diversity and plentitude of bird life we enjoy in Tehachapi. The bird of prey population is thriving.
Proof is in the pudding. I live near huge windfarms, and this “slaughter” of birdlife is pure propaganda.
Are some birds killed? Undoubtedly. But the carnage you describe? Horseshit.
“In my opinion being able to take in unspoiled scenic views and hear birds in the background is a very important part of environmentalism”
You gotta be kidding me! The wind farms are wiping out the birdsong? Now you got me chuckling… What right wing pro-fossil fuel global warming nutjob mouthpiece filled your brain with that….oh…uh..oops….I forgot…the pro-fossil fuel thing is a left wing plot. Right Paul?
Egads, the left wing has launched a War On Birds. God help us!
I never said anything about polotics or being pro fossil fuel. Please do not try to put words in my mouth. I live in Minnesota and I have seen the dead birds first hand. I can tell by your other comment that you think wind turbines look good. I completely disagree, they alter both the day time view and the night with there flashing red lights. Using the excuse that you are saving the envirment as your excuse to kill wildlife is crazy
It is and it seems to be especially destructible to endangered and highly stressed bird species. (and bats – do not forget them)
” November 2013, the Department of Justice successfully prosecuted Duke Energy under the Migratory Bird Treaty Act for the killing of 14 golden eaglesat a wind farm in Wyoming. “
Birds, Blades, and the Brutal Business of Clean Energy ( http://science.kqed.org/quest/2014/01/09/birds-blades-and-the-brutal-business-of-clean-energy/?utm_source=rss&utm_medium=rss&utm_campaign=birds-blades-and-the-brutal-business-of-clean-energy )
Obama administration gives wind industry a pass for killing birds
An estimated 573,000 birds were killed last year in the U.S. by wind turbines, the AP reported, citing a study published in March in the journal Wildlife Society Bulletin. About 83,000 of those were estimated to have been raptors.” ( http://grist.org/news/obama-administration-loves-wind-energy-hates-birds/ )
And PLEASE, just like you mentioned above, let one of the winders tell me cats kill more raptors!
Your cost figures are hard to accept. The largest wind turbine commercially available, the Enercon E-126, costs €11M, or $15M, for 7.5 MW, which is $2/Watt, or twice the cost you’re quoting. Wind turbines don’t scale particularly well, since the amount of energy available in the wind varies with the square of the rotor diameter, while the mass of the turbine (and hence its cost) scales with the cube of the rotor diameter. Applying this rule to a 5MW turbine implies a cost of $1.63/Watt, still much higher than your figure. This would imply that the cost of 250,000 such machines as you propose would cost $2 trillion.
Assuming a generous 35% capacity factors for wind turbines, an all-nuclear+hydro grid with a 75% capacity factor (typical in all-nuclear France), and with the same total output, could be built for $3.5 trillion, assuming $6/Watt for nuclear, which is the average of the four AP-1000s currently under construction in the US.
But the all-wind system would have to be rebuilt at least twice over, considering that the average wind turbine life (in Denmark at least) is 22 years, while nuclear plants can be expected to last more than 50 years on average (and the APS has recently said there’s no physical reason a nuclear plant can’t go 80 years if properly maintained). Which makes nuclear cheaper in the long run.
Then when we consider the load-following issues of wind and the need for gas backup, the bigger problem becomes clear: wind isn’t really fossil-free. You can’t get to zero fossil emissions with a renewable-only system, unless you massively overbuild and accept equally massive curtailments during windy periods, both of which would drive the price of wind up to stratospheric heights. Nuclear doesn’t have that problem, which means not only is it cheaper, its more environmentally benign.
Buffett is expected to pay $1 billion for 1,050 MW wind farm in Iowa. That’s some $0.95/Watt capacity. Energy cost is expected to be around $82.61/MWh (compared to $78.30 MWh for coal or $69.71 MWh for NG as of December of last year).
“Turbine prices have fallen 26 percent worldwide since the first half of 2009, bringing wind power within 5.5 percent of the cost of electricity from coal, according to data compiled by Bloomberg.”
Iowa gets some 24.5% of it’s electricity from wind, and has an industrial retail price for electricity of around 5.71 cents/kWh (lower than my state of Illinois that gets some 48% of it’s generation from nuclear).
Can you provide an estimate for energy costs for the AP1000s at Vogtle or VC Summer (understanding it is operated on baseload basis and not meeting 100% of demand), and in support of your statement that nuclear is “cheaper in the long run,” and by how much? The projected energy costs for new nuclear in UK is perhaps as low as £89.50/MWh, which is some $148.30/MWh at today’s exchange rate, or some 80% more expensive than the cost of energy that Buffett is expected to provide).
“understanding it is operated on baseload basis and not meeting 100% of demand” – how do you know that? Can you see the future too? Modern nuclear can have capacity factors over 100 percent. Also as the best wind sites are taken newer wind power will have even lower capacity factors.
There are significant economic challenges to operating nuclear plants on a load-following basis. At current capital costs, these appear to be prohibitive (divining the future has nothing to do with it).
EL, saying it repeatedly doesn’t make it so.
And neither does denying the prohibitive cost factors (and wear from daily cycling) to operating nuclear plants with capacity factors in the range of 60% (or perhaps even much less).
@EL : Let’s imagine, this were true (it’s not, it’s been done sometimes, for example we can see in the PRIS public database Biblis-A in Germany in 2010 had an operational factor of 63% but a production of 45% reflecting low average load).
What do you propose to use instead of nuclear ? Do you realize the problem of wear due to daily cycling exists also with all fossil technologies ?
Except that it’s much worse with them because cycling means different rate of actual physical *burning*, and a very long list of varying physical phenomenons associated with the change of the speed of introduction of flammable materials inside the plant.
I’m glad Warren Buffet is getting a good deal on used wind turbines. But new turbines cost more, just like new cars do, and for the same reason: wind turbines wear out. The wind industry itself says the cost for new turbines is between $1.30 and $2.20 / Watt, and that’s a reliable enough source for me. So I feel quite comfortable in saying the median cost for a new wind turbine, installed, is $1.75/Watt.
Vogtle is coming in at $14.9 billion for two AP1000 units:
V.C. Summer is coming in at $9.8 billion for two AP1000 units:
Average cost for all four units is therefore $6.175 billion for each 1 gigawatt reactor, or $6.18/Watt.
At typical 90% capacity factor and a pessimistic 50 year plant lifetime, each reactor will produce 394,470,000 MWh of electricity during its lifetime. Total capital cost is therefore $15.65/MWh produced.
At $1.75/Watt for new wind turbines, a 1 MW wind turbine cost $1.75 million. Assuming a 30% capacity factor and typical 22 year lifetime, the turbine will produce 57,856 MWh of electricity. Total capital cost is therefore $30.24/MWh produced, about twice the cost of nuclear.
Nuclear does have higher O&M costs than wind, because nuclear plants provide lots of high-paying jobs. I don’t necessarily see that as a bad thing.
How are these used wind turbines? This is a new order for 448 Siemens SWT-2.3-108 wind turbines with nacelle fabrication in Hutchinson, Kansas, and blades manufactured in Ford Madison, Iowa.
Energy cost per equipment cost is not a meaningful number. You’re going to have to throw in O&M costs, fuel costs, capital costs, connection, decommissioning, spent fuel fees, etc., before you even get close to a meaningful number. Do you have this for the AP1000 (or not)? Bloomberg suggests energy cost for the Berkshire Hathaway order will be 82.61/MWh. And this is well within cost estimates for onshore wind from most other sources (DOE, NREL, EIA, industry specific, trade group, academic, etc.).
Good catch, I should have read your link more closely. But then again, so should you have. The $1 billion order to Siemens is for generators, nacelles, blades and rotors; it specifically does not include towers nor construction costs. In fact, according to your link, the entire all-up cost for the 5-farm project is $1.9 billion, or $1.81/ Watt. That’s pretty closely in line with the industry average I posted.
If you’re looking for total cost of generation (LCOE), wind and nuclear are about the same, according to the OpenEI’s Transparent Cost Database: about 4 cents per kWh. Or you can look at EIA’s LCOE analysis, and after correcting for omitted systems costs and the difference because of plant lifetimes, nuclear comes in at $76/MWh and onshore wind at $86/MWh, again very comparable.
The difference is that wind’s need for gas backup (when deployed in bulk) means that it’s not really carbon free, while nuclear is.
Thanks for the updates.
Bloomberg (and others) give info on manufacturing to highlight local content of equipment. Siemens SWT 2.3-108 model includes specifications on the tower.
While specific details are lacking, the purchase apparently also includes a deal on service and maintenance (here): “Siemens will be responsible for service and maintenance of the wind turbines, the company said in the announcement Monday.” I assume this is not a part of $1 billion purchase price for equipment, but it IS a part of the Bloomberg LCOE estimate.
You’ll find the best available information on installed costs (by year, capacity weighted averages, and region) in DOE’s Wind Market Report: “The Interior region—with both the largest sample and the fewest outliers—was the lowest-cost region on average, with average costs of $1,760/kW” (p. 36).
And yes … I have seen energy cost estimates for new nuclear in $76/MWh range (MIT for example), but none specifically for the AP1000 projects under construction in the US. It’s worth highlighting, with a service date of 2016 on the first reactor, Vogtle it is already $700 million over budget and 19 months behind schedule.
@Keith, you said:
“You can’t get to zero fossil emissions with a renewable-only system, unless you massively overbuild …”
This would not be true if the “renewable-only” advocates would accept nuclear power as a backup source. Granted, the load following capabilities needed would be better accomplished by the coming SMR generation of nuclear reactors, but I think those will be ready by the time the massive solar and winds farms in the works would need them, if not before.
The pro-renewable crowd needs to show the same tolerance toward nuclear as the pro-nuclear crowd shows towards renewables. It would snap them out of their delusions.
The bottom line: Nuclear power is, for all practical purposes, as
“renewable” as wind, solar, hydro, biomass, etc. There will
never be a “Peak Actinides” problem on this planet in any time-frame relevant to human civilization.
@ William Vaughn
Well, maybe. But if you’ve got enough nuclear to back up wind, why build wind in the first place? What’s the advantage of taking on the extra systems costs associated with the need for extra load-balancing? Because you’re certainly not saving any carbon emissions that way.
The fastest load-follower is the natural gas combustion turbine (NGCT), which is fast-starting but inefficient. Combined cycle gas turbines are much more efficient, but take about twice as long to ramp up, on a par with existing nuclear reactors. I have no idea whether either of the proposed SMRs would be able to ramp up rapidly. In fact, existing nuclear plants were designed as baseload generators, and there was simply no need to engineer load-following into them. It would be interesting to see what could be done with a reactor specifically designed to load-follow; I’m betting you could do as well as NGCTs.
Robert Hargraves makes the very interesting point that a 30% CF wind turbine mated with a 70% CF NGCT actually emits more carbon than a 100% CF combined cycle turbine, because of the lower efficiency of the NGCT. This again makes you wonder why we should do wind in the first place.
In fact, existing nuclear plants were designed as baseload generators, and there was simply no need to engineer load-following into them.
That is not exactly true. There are several people who participate in discussions here who are qualified as senior reactor operators on B&W designed nuclear plants. They can testify that the B&W series of reactors was specifically designed with good load following characteristics. There were some regulatory decisions that prevented the plants from being put into a mode in which the dispatch center could control the output and the plant owners later decided that it was more profitable to operate at a very steady power level in a system where there is always a higher cost generation source that can be turned down first.
I’ll testify that at least one of the SMR vendors is specifically designing a substantial load following capability.
Could nuclear energy’s revival spell trouble for LNG? Japan is considering nuclear energy restart. This could hit LNG use by 20%
Note: link in post fixed by moderator.
Well Japan’s NRA is taking its sweet time … The Oi reactors were inspected inside out while operating last July.
Then they stopped for refuelling in September and can’t be given the green light again ?
The NRA says that the quality of the paperwork from the applicants is the cause. Funny, the NRC says the same thing about those who applied for new licences 7 years ago.
Is the NRA copying the NRC’s death book ?
the claim that the carbon obsession is cyclical and poised to come back aggain after hitting the bottom is laughable futurology.
It is at the bottom because it’s based on junk science like many preceding malthusian scares (e.g overpopulation, pesticides, acid rains, ozone hole, peak-oil), because the general public is aware it’s a taxing scam, because temperatures refuse to rise for over 15 years despite billions of tons of “carbon pollution” in the air, because the green lobbies know the carbon scare is toast and are switching to some new end-of-the-world narratives…
No need of conspiracy theories when Occam’s razor is plentiful.
Feel free to maintain your own opinions. On the scale of atmospheric and geologic history, 15 years is a blink of an eye. People who point to that period also make the mistake of drawing a line from a local peak to the present without taking into account the variations between each year.
I put skepticism over global climate change into the same category as skepticism over peak oil. Both are quite real, even if they are inconvenient for people that can more about their present wealth and power than about the long-term and widespread prosperity of human society.
By the way, Occam’s razor is a way to evaluate natural events. It does not apply to the complexities of human decision-making, purposeful propaganda and self-delusion.
” temperatures refuse to rise for over 15 years despite billions of tons of “carbon pollution” in the air”
Are you serious? Newsflash – that was never proven true. In fact the opposite is looking more the case. Thats right – acceleration.
( http://www.climate.gov/sites/default/files/styles/inline_all/public/globalsurfacetemp_1880-2012_NOAA.png?itok=WznknijH )
( http://www.climate.gov/sites/default/files/styles/inline_all/public/DecadelTempAnom1880-200.jpg?itok=-0i1pTkt )
( http://www.nodc.noaa.gov/OC5/3M_HEAT_CONTENT/heat_content2000m.png )
Also Occam’s razor – “principle states that when answering a problem or searching for a cause for something, one should never make more assumptions or posit more causes than the minimum necessary to solve the problem.”
And if it was a actual valid logical argument it would support that man made, potentially problematic for us and already in some locations environmentally catastrophic warming is occurring.
Perhaps you should skip invoking the 14th century tropes and truisms.
Just curious, why do you think so many fossil fuel companies emphasize the advantage of methane as a lower carbon alternative to coal?
Rod- Thank you for your calculations there.
Regarding wind turbine costs, this is the most clear answer I found:
I assume that you and your readers are familiar with efficiency trends leading to reduced electrical demand, and the continual decrease in wind and solar costs per megawatt,
I think you showed my point that wind and solar are viable alternatives now. Nothing against nuclear in the future, but the fastest way to restore a healthy climate is to build on what is working now.
We’d all expect France and S. Korea to continue building nuclear plants, but in the US, any new nuclear plants are decades into the future, in which time we’ll have built up wind and solar to provide 50% to 85% of our needs.
Wind and solar capacity have been increasing by 25% and 55% per year respectively for the last 6 years. If we provide the capital to continue that growth for another 12 years, we’d have reduced fossil fuel consumption by 80%. That’s where the trillion dollars/year from oil development will be useful.
At that point nuclear could have had time to start coming back in favor in the US, and make a big impact.
I’d like you and your readers to consider this two-pronged approach: continue nuclear R&D and licensing work, AND continue building out wind and solar.
The important point is that we can restore the climate by 2070 using existing technologies.
Future breakthroughs, like improved nuclear, when they appear, will just have the restored climate come sooner. What’s needed is committed action now, and committed action requires an achievable goal. Knowing that we can restore the climate with existing technologies and financing allows us to argue less, and build more.
Are you aware that there are five large nuclear reactors under construction in the US today that will probably all be operating well before 2020?
As I noted in my first response back to you, I did not produce an exhaustive rebuttal to the idea that wind cannot replace fossil fuel, but one of the big problems with your calculation is the fact that the wind, even when distributed over very large land areas, almost never blows at an average speed. It can disappear for a week or more at a time in regions as large as the entire eastern United States when a high pressure area arrives. At other times, a grid that has enough wind generation to provide demand “on average” will be oversupplied to the point of instability.
Another major problem with wind is that construction projects seem to come to a complete halt whenever the Production Tax Credit or the “Investment Tax Credit in lieu of PTC” expires. That indicates that the economics are not as favorable as you imply. Costs for installed wind generation are not inevitably going to fall; there is a lot of material involved whose price is not subject to any kind of mass production savings or learning curves.
That’s cool about the 5 new reactors in the next 6 years. Very cool.
While those are coming on line, we’ll be continuing to build more wind and solar. By 2020 a 5 kW home solar system will be $5000, and wind will be supplying about 8% of the US power.
Germany is up to 25% renewable electricity, 60% on a couple days this summer–and their grid is stable, even though they’re the first to deal with large amounts of wind and solar.
How much backup generation capacity nearby does a 2 GW nuclear plant need in order to deal with maintenance, refueling and problems?
Hey–I’ve got friends at SRI in Menlo Park California who are working on what used to be called cold fusion–they’re generating power now, and could provide another silver bullet.
But I am installing new solar panels and a heat pump, and after this year I’ll be getting free heat, free electricity, and free “gas” when I buy an electric car (only drive a few thousand miles/year, so an electric car is several years away).
As POA says–let’s make the best of everything we’ve got and just get to work!
Peter, EP covered a lot of good ground, but I have a few comments/questions.
1. Will you be taking your house off the grid? You will need a shed full of batteries, chargers and inverters, and more solar panels to cover the 30% round trip energy losses. Include those costs, initial and recurring as batteries and electronics fail.
2. Is your utility covered by mandatory net metering laws, requiring it to provide free storage service to you at the expense of customers who cannot afford to dabble in solar? Is that fair and ethical?
3. The electricity you buy directly from the utility is one third of all the electricity that supports your life. What do you propose for the other 2/3?
“Germany is up to 25% renewable electricity,”
The largest portion of which was actually from so-called bio-fuels, or, in this case, wood burning. About 3 – 4 percentage points of those 25 are from pre-existing hydro. So that represents no change nor progress at all.
So, Germany is really getting somewhere around 12% of its electricity from wind and solar.
Those high-peaking days? Those are actually a disadvantage. Think about how this works. As long as wind and solar only provide 10 – 20% of the needed power, on days when they peak far beyond 10 – 20% other things can be shut down, and one can still use all of the solar or wind energy.
But what happens when wind and solar supply 50 or 100% of the power? Now, when they peak really high, there’s no other generators to shut down. So one must just dump the excess power and not use it. Now look at what that does to your averages. Peaks are a natural park of wind and solar. If you cut off the peaks and don’t use them, then your wind and solar plants will have a lower total amount of generation for the year.
As you creep closer to 100% wind and solar, you must discard more and more of the peak power which pokes up above the average generation. So each new wind or solar facility can contribute less and less of its actual capacity to the power you actually use. Yet, each new facility is still just as expensive. This means that the cost per energy generated goes up higher and higher as your wind and solar capacity exceed 20% of the total.
Peter, if I had to categorize you I’d put you in the “educated but non-technical” bin (not knowing about capacity factor is a red flag). You have the notion that sprinkling some renewability-dust (on rooftops and 400-foot towers) over the electrical grid is all that’s needed to eliminate fossil fuels. If only it was that easy. (Or so cheap; for every dollar of wind turbine or PV panel, you can add another $1-$2 in transmission and power-conditioning cost.)
What you blithely assume will be simple is, in fact, excruciatingly difficult. It is so difficult that Denmark, the world leader in renewability efforts (which has massive interconnections to neighboring countries with large hydro resources) is still struggling to pass 50% RE on its grid. You think the USA could just leap past Denmark and go as high as 85%? This is what’s known as wishful thinking, which shades imperceptibly into delusion.
If you cannot do your own calculations and catch your own mistakes, you are hopelessly over your head.
A point you used as a drunk uses a lamppost, for support rather than illumination. It doesn’t affect the nature of the remaining load, just the absolute size.
No. We see that you believe you have, when in fact you have not. You have not done the slightest thing to take into account the unwelcome effects that variability has on the efficiency of the rest of the grid. In the real world, diminishing returns set in early.
We also see that your thinking doesn’t extend one iota past the electric grid. Electric generation uses a minority of all fossil fuels. You need to handle space and water heating, non-electric industrial energy and transportation as well. These users must be supplied as-needed, not as-available; if you don’t, economies can collapse. If you don’t have answers for these, you don’t have a solution. And recall, you came into this discussion not knowing what capacity factor is.
I’d like you to consider a different two-pronged approach: eliminate the subsidies and mandates which place wind and solar on a pedestal, and take direct aim at carbon and methane emissions (which form most of the threat to the climate) and petroleum consumption (which produces most of the energy-price vulnerability of our economy). Don’t pay for building things, pay only for results. Use feebates to tax bads and reward goods.
The European Commission has just re-written its climate policy to allow nuclear energy as a carbon-free energy source. France is far ahead of Denmark in both per-kWh and per-capita carbon emissions. If we could get the price of an AP1000 down to $3000/kW (the Chinese are already making them for less, IIUC) then the US grid could be nuclearized for about the same average per-kW price as your wind scheme, but without any of the trans-continental power lines, massive battery farms and other accessories that any RE-centric scheme cannot do without.
I expect you to reject this idea out of hand. For many, “green energy” is an article of faith which must be professed to achieve salvation. You sound like one such, but I would love to be surprised.
What does being drunk have to do with it. Isn’t it enough just to do the research, and look at the evidence?
It does effect the nature of the remaining load and not the absolute size (contrary to what you have suggested)
Power conditioning costs are very small. And transmission costs are not attributed to a single generation source (unless it’s to connect a resource to the grid). Nuclear plants, as a consequence of their dense and centralized energy supply, also require transmission enhancements.
You’ve provided a few general and unspecific claims here, but not a lot of careful or detailed thought to the topic. Particularly if we wanted to look at your inaccurate statements about efficiency, and misleading claims about transmission costs (both by manner of accounting, and with respect to total share of generation cost).
You might want to follow through on the articles citing the study you are referencing.
For very high levels of penetration this “problem” suggests a solution, which is a movement away from slow ramping coal fired plants as a means of balancing the grid (here). Other mitigation alternatives include improved modeling, larger interconnections, and firming outputs with energy storage (here).
Regardless, as these studies suggest, the carbon savings from wind are still verity large (despite having in place any of these available mitigation alternatives).
You just did it again, TWICE:
That’s a 37-page PDF and a page with no fewer than 3 PDFs totalling at least 134 pages, NONE of which you pin down any further than brief phrases as to what you expect to prove with them. Speaking of which, the 112-page intermittency report states this:
Your “supporting” documents turn out not to support your sweeping generalization at all.
That is simply dishonest of you. It shows that you have no respect for truth, or anything other than trying to “win” a debate via the Gish Gallop of piling on claims too fast to be refuted. Shame!
Intermittent generators require transmission resources way out of proportion to their average output.
Which they can fill to capacity upwards of 90% of the time. Generation is usually placed near “load centers”, to minimize transmission losses and cost. It’s typically clustered to minimize land cost. “Distributing” that generation would run costs up, especially if it is “distributed” hundreds or thousands of miles from the users it is asked to serve.
The nuclear-based grid in France is nearly carbon-free. The wind-heavy grid in Denmark emits many times as much CO2 per kWh. But you ignore this, because you start from your conclusion and cherry-pick your way back to something that looks like factual support.
These are all valid links, and provide substantive information directly relevant to the topic.
Counting them and adding up page numbers is not a very informative or meaningful critique. Are you seriously suggesting you don’t see the relevance of IEA study to the concerns you raised about energy efficiency? I find that seriously surprising (since so many of your concerns, many of them unfounded, are specifically discussed in the report).
Do you know of some other way to assess these issues without specifically referencing the “system in which they are embedded.” I don’t. If you have better numbers than these, by all means please provide them. They are entirely consistent with other estimates I have seen (from DOE, BPA, and elsewhere). I’m happy to provide you with further links on this topic (if it doesn’t meet whatever criteria you have for a Gish Gallop type of piling on).
And yes … transmission is a common resource shared by all energy developers. This is how it is funded, and this is how it is assessed by Public Utility Commissions and similar bodies guided by Federal and State rules, assessments on what is in the public interests, and input from relevant stakeholders (via public hearings and other guidance). I don’t see what is new or unusual to this.
What is different, however, is that energy markets are changing. The industry terms this a disruptive challenge. Others look at it as new opportunities (here and here).
You can look to the past, and an antiquated grid that most serious people consider to be insecure and broken, or you can embrace the future (and make long overdue investments that best meet the public interest and today’s changing energy markets). I think most of us here understand (however reluctantly so) the direction in which this is going.
And just as an aside, I’d like to express the hope that sooner or later the nuclear, wind, and solar advocates join forces in thier mission, and quit with this adversarial bullshit that so harms the universal goal they ALL should be pursuing. On this website, and many others, this “my way or the highway” crap is not a constructive path to a constructive narrative.
My bet? We will need ALL the alternatives to fossil fuel if we are going to have any hope of reversing the damage we are doing to our planet and its fragile climate and ecosystems. Wind and solar are promising as the technologies develop.
And so too might nuclear be, if its advocates are to be trusted in thier assertions. I’m not there yet. I know that ANY “disaster” that may befall a windfarm is far more preferable than that of a landscape poisoned and rendered uninhabitable by a nuclear accident.
With the caveat that things that do not work (failing to scale or having large externalities) are not alternatives.
France essentially de-carbonized its grid using nuclear and keeping its hydro. Denmark and Germany have not even approached France’s achievement. By this measure, wind and PV are not alternatives; they maintain and enforce fossil dependence.
Hiroshima, Nagasaki and even the territory around Chernobyl are inhabitable and inhabited. What you speak of has not yet occurred, and is of such slight likelihood compared to climate impacts that we should just accept the possibility and press on.
France essentially de-carbonized its grid using nuclear and keeping its hydro.
So did Switzerland and Sweden. Finland seems to be getting close. Even Brazil is within range of accomplishing the same feat. Those mountainous countries were fortunate enough to have more hydro capacity available, so they did not have to build as many nuclear plants.
Two dead after Dutch turbine fire ( http://renews.biz/52979/two-dead-after-dutch-turbine-fire/ )
And how many deaths are we up to at Fukushima from radiation? Zero??
I have noticed that Exxon has stopped funding climate change deniers. I thought it was due to the change in leadership from Lee Raymond to Rex Tillerson.
Not everyone seems happy with thier wind turbines:
UK slashes spending on global warming by 41%.
I dispute the 5 MW wind tower for $5M figure; here in the Cleveland area, Lincoln Electric put up a 2.5 MW wind turbine that cost $5.9M (and got $1.475 of that paid by various taxpayers); here is the link: http://newsroom.lincolnelectric.com/News+Releases/lincoln+electric+wind+tower.htm#.UuZukDYo7RY
I drive past it each morning and early evening, and I can tell you that the wind tower is not spinning at those times 50% of the time or worse.
By the way, Occam’s razor is a way to evaluate natural events. It does not apply to the complexities of human decision-making, purposeful propaganda and self-delusion.
As a former hippy and current true political radical (where “radical” means from the root) I am predisposed to hate nuclear, but as a true political radical I hate rigid, narrow thinking even more. Another commenter mentioned Edward Bernays. He was the relatively unknown other father of modern PR. Ivy Lee, the former “press agent” who remade the image of John D. Rockefeller, most ruthless robber baron of the Gilded Age, into the kindly philanthropist he is mostly known as today, usually gets the credit. But Edward Bernays was the wonk who drew from anthropology, psychology, literature, or any source he could find to discover the nuts and bolts of manipulating public opinion. That pinko radical Dwight Eisenhower’s famous Iron Triangle has morphed into an Iron Rectangle. The Military Industrial Complex is now The Military Industrial Political PR Complex with the addition of the multibillion dollar PR-think tank-lobbying-media component. We find ourselves in the disquieting position of having a difficult time even knowing what is even true, much less what is right or wrong. We are rapidly moving into a time when the old rules no longer work and the new rules…we don’t know the new rules.
All that being said, I am truly grateful for such a voice of sanity as I detect here. For a fuzzy minded idealist such as myself, I must rely on those able to “do the math” AND who are aware of the uncertainties of that method. We must destroy at every opportunity the destructive arrogant ignorance of catabolic materialism, the philosophy of logical positivism. We cannot and must not remove values, meaning, and purpose from scientific or public policy debate. One is reminded of Archimedes’ naive assertion that given a place to stand and a long enough lever, he could move the universe. Theoretically true, but insane.
I am a fan of the strategy articulated by Amory Lovins decades ago that we should evaluate the costs and benefits of all the available alternatives, remove the self-interested regulation than unfairly favors a few, and see which ones work best. We are long past the frontier days when subsidy and tax policy were needed to encourage public works. Someone mentioned feebates. We don’t have Bucky Fuller’s Comprehensive Anticipatory Design Science, but we surely need it. I see the germ of that science in such discussions as this. To paraphrase a quote I read many years ago, in science or in making love,there is something to be said for brilliant but cold technique, and something to be said for amateur enthusiasm, but what we really want is passionate virtuosity. Keep up the good work of seeking Truth (whatever that might be).
Namaste to you as well.
In the past few months I have been reading up on the influence of the Rockefellers and their PR machine on many aspects of American life. It is a bit depressing to “follow the money” through the foundations, grants and NGOs to find out just how pervasive their thoughts have become.
Did you know that John D. Rockefeller Sr. bankrolled the University of Chicago and essentially paid for its first 20 years of operation?
Did you know there was a tight link between John D. Rockefeller III and Paul Ehrlich on the issue of zero population growth? Are you aware of the way that David Rockefeller networked around the world to make sure that Chase benefitted from the dramatic increase in fossil fuel prices in the 1970s? What about the way that Nelson Rockefeller influenced the Gerald Ford decision to abstain from nuclear fuel recycling? Did you know that David Rockefeller was the king maker who introduced an unknown Georgia governor to his friends at Bilderberg and later helped to get him elected as President of the United States?
I learned these things – and a good deal more – from reading a good biography of John D. Rockefeller and by reading David Rockefeller’s proud autobiography.
Amory Lovins has said some intelligent things, but his interpretation of reality has been too often influenced by his appreciation of the finer things in life brought by his profitable work for fossil fuel companies. His embrace of “cogeneration” for example, ignores the fact that the fuel source is diesel fuel. During a July 18, 2008 appearance on Democracy Now!, Lovins made the following admission about his employers “You know, I’ve worked for major oil companies for about thirty-five years, and they understand how expensive it is to drill for oil.”
His 1976 seminal article for Foreign Affairs (a Rockefeller publication, by the way) was filled with compliments about coal https://atomicinsights.com/blast-from-the-past-from-a-clean-coal-advocate-amory-lovins/.
I smell 1-5 future Smoking Guns post topics from this comment.
From a modern day pop culture angle, I wonder if there could be any Rockefeller-tied smoking gun links with the NBC show “30 Rock” featuring staunch anti-nuclear advocate Alec Baldwin (just thinking aloud).
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