The future of energy generation and storage

[Chronos-Plutus]

Perhaps the piece of information missing here, and noting that this is a stock market forum not an energy forum, is about the medium term situation in Australia and the implications of that.

The following major sources of energy supply are about to be removed and that's what creates the need for replacements.

I'm posting here only that data which the Australian Energy Market Operator has released via reports available to the public etc. You could interpret that to mean the list may have omissions but I won't comment on anything not public knowledge.

2020: Closure of 2 x 120 MW units at Torrens Island A power station (SA, gas)

2021: Closure of another 1 x 120 MW at Torrens Island A

2022: Closure of the final 120 MW at Torrens Island A. Closure of 1 x 420 MW at Liddell (NSW, coal).

2023: Closure of the final 3 x 420 MW units at Liddell. Closure of the 180 MW Osborne power station (SA, gas). End of all gas production from currently producing fields in the Otway Basin which has a current capacity of 113 TJ / day.

2023 or 2024: Reduction of approximately 40% in peak gas production capacity from the Longford gas plant in Victoria due to depletion of a key gas field will reduce capacity substantially. Dates are estimated and subject to some uncertainty but it's in that window of time as follows (figures are for Gippsland Basin production processed at Longford gas plant, by far the largest supply source into south-eastern Australia):

2018 = 1168 TJ / day (full plant capacity)

2020 = 1059 TJ / day maximum flow rate
2021 = 1007 TJ / day maximum flow rate
2022 = 992 TJ / day maximum flow rate
2023 = 967 TJ / day maximum flow rate
2024 = 629 TJ / day maximum flow rate

Companies involved with the above:

Torrens Island 'A' power station = AGL
Liddell = AGL
Osborne = Origin Energy

Otway Basin gas production = multiple operators.

Gippsland Basin gas production processed at Longford = BHP / Esso joint venture.

Note that the above is not set in stone and is subject to ongoing revision of data based on observed field pressures etc (gas fields) and plant condition (power stations).

Now there is still gas which can be developed, it is certainly possible to build new power generation and so on so I am not saying the end of the world is coming, the sky is falling and so on. What I am attempting to do however is outline the environment into which any company you invest in which operates in this area will be selling into. An environment of diminishing gas production and closure of significant existing generating capacity.

That is ~2.34 GW of power generation capacity. Building a ~1.3GW nuclear powerplant can replace the gas powerplants for the next 50 years. Or the SA government can build ~3.9GW of wind farms, twice in 50 years.

Anyway; I think that I have made my point tonight on the theme of nuclear energy. It isn't as dangerous or as costly as so many people claim.

 

[Smurf1976]

Hydro capacity factor in Tasmania is ~41%

Across the system over the long term it's 41.8% to 48.9% depending on what assumptions are made as to climate.

Short term it can be pushed around hugely given the storage capacity at some stations is very large relative to annual discharge - at the extreme there's up to 5 years' worth of water sitting there in one case if the dam's full.

Some individual stations are drastically different however and do go into the 80's % as that was their original design basis. Others go as low as 30% and there's one with provision in the original civil works to be dropped down to 22% capacity factor in future if warranted.

For primarily economic reasons it's publicly disclosed that Hydro Tas intends reducing plant capacity factors, in some cases substantially, since doing so better aligns with what the market requires at a national level going forward. That is, it intends raising peak output far more than energy output.

In that context they're considering going as far as installing a new 20km tunnel and replacement power station in one case since the present operation is the most consistent producer of electricity in the entire National Electricity Market. That was a desirable attribute back in the 1930's when built but not so desirable going forward. It's nothing to do with me, I'm in SA these days, but Hydro Tas has put the investigations into that so far online - it's all public, nothing's confidential.

As for nuclear - well if it can be done in an economically viable manner then I'm not opposed in principle. Likewise I doubt that AGL or Origin or anyone else would ignore it if they think they can do it cheaply enough to be profitable. They're in business to make money for shareholders after all so they're unlikely to ignore it if it's attractive financially.

My point isn't an ideological one. It's just background info for anyone investing in companies planning to supply gas into south-east Australia (that is, NSW / ACT / Vic / SA / Tas) or electricity into the National Electricity Market but especially NSW, ACT, Vic, SA.

I'm not arguing on ideological grounds, just pointing out what the market opportunity is noting that there's a few companies, some of them ASX listed, which have an interest in being involved using various different approaches in terms of technology, resources and location.

 

[Smurf1976]

Adding to my previous posts, looking at gas production in Victoria from present sources then the forecast reduction in 2024 as compared to 2020 is, if we value it at $5 / GJ (roughly the current price) worth about $800 million a year. 361 PJ in 2020 down to 202 PJ in 2024 is the forecast.

That's a potentially company making opportunity for any small cap which successfully finds gas and brings it into production and could work out very nicely for shareholders. A lot of "if" there of course - I'm just highlighting that the market opportunity is there, how it gets filled being the question.

Or alternatively someone could make quite a bit of money moving gas through pipelines from WA or Queensland or importing it etc since they'll very rapidly become a "too big to fail" operation.

 

[qldfrog]

It is short-term political vision that has killed the nuclear energy option in Australia. Our politicians think in 3 to 4 year political cycles, not in half century energy security cycles. Then there is the environmental activist army that have been indoctrinated to believe that nuclear energy is dangerous. Australia can't afford to continue down this path of myopic stupidity. We need leaders with vision, and we need them yesterday.

As for the concept of a Molten Salt Small Modular Reactor (MSSMR), Australia would have been able to look into such a proposition if we had of built and established a nuclear industry decades ago.

Back on the issue of capital intensity for nuclear energy; as I said, nuclear power has an infrastructure lifespan ~2 times, and a capacity factor ~3 times, that of wind and solar. This means that for a wind or solar farm to produce the same amount of electricity; it needs to built twice and have a nameplate capacity 3 times greater than the nuclear powerplant. So for a 1GW nuclear powerplant equivalent, the wind or solar farm needs to be 3GW and be built twice.

And nuclear waste has to be cooling ina sed swimming pool for 1000 years yeap. Tell me about capital costs and running costs or short term visions.
France has/had 70pc of electricity power from nuclear....i think i know what i am talking about if i say it is an economic no go
But definitively try fusion or thorium if you feel like development of a new branch..good luck with Australia expertise...

 

[basilio]

Anyway; I think that I have made my point tonight on the theme of nuclear energy. It isn't as dangerous or as costly as so many people claim.

You may think that Chronos.
The facts of Nuclear power indicate otherwise.

 

[SirRumpole]

Not sure why you're puzzled. Good things take time. If we adopt your recommendations, we will never develop and establish a nuclear industry in Australia. A piece of uranium, the size of a golf ball, has enough energy in it to provide power for an individual's lifetime in a Western country.

As for the MSR, research has demonstrated that it is commercially feasible; it is just a matter when, not if it will be done. Australia can either join the nuclear community and become a leader, or just sit back and do nothing.

You prefer the nothing option.

Proponents of nuclear power in Australia it seems to me always want to privatise the profits and socialise the costs.

There is no way a private company could pay the costs of insurance (in the unlikely event that they could even get insurance in the first place) of cleaning up after a Fukishima type accident or the costs of storing nuclear waste for thousands of years. Those costs would necessarily fall onto the government/taxpayers and I doubt if any government in Australia would want to take on that responsibility when there are less risky options available.

If we really want to go nuclear , then maybe this is an option.

https://en.wikipedia.org/wiki/Accelerator-driven_subcritical_reactor

 

[basilio]

If we really want to go nuclear , then maybe this is an option.

https://en.wikipedia.org/wiki/Accelerator-driven_subcritical_reactor

I believe the Thorium mini reactor was the proposal Chronos was suggesting.
It does have merit but the costs are still far higher than other technologies and as I suggested it won't be commercially available for another 20 years.

But the critical point you make is still valid. Nuclear power has always been developed with huge Government subsidies for development. And governments have had to pick up the tab for clean ups and disasters.

And no one yet has cleaned up an end of life nuclear power station.

 

[sptrawler]

A good article by the BBC, on small modular reactors and the state of development.
https://www.bbc.com/future/article/20200309-are-small-nuclear-power-plants-safe-and-efficient

I personally think the issue will be self resolving, at this point in time there is no difinitive answer, necessity will drive the generation mix.
If renewables and storage, can keep up with increased demand and coal retirement, I'm sure it will be utilised.
If it can't the reliance on gas will increase, then the issues surrounding gas, will become the topic of the day.
Nuclear may be in hibernation, but it will be required longer term, as there are many countries that haven't the topography for renewables.
We tend to be very Australia centric with our discussion, not many countries are endowed with a huge flat land mass and a small population that lends itself to renewables.

 

[SirRumpole]

believe the Thorium mini reactor was the proposal Chronos was suggesting.

I believe there is a difference between a molten salt reactor and an accelerator driven subcritical reactor, but I'll leave that to any nuclear physicists who happen to be wandering around here.

 

[Chronos-Plutus]

You may think that Chronos.
The facts of Nuclear power indicate otherwise.

Basilo, I have just provided you with the undisputed scientific facts. I have a background in finance and mechanical engineering; so I think I have a stronger grasp of how nuclear powerplants work with the associated capital costs; than the vast majority of commentators.

 

[Chronos-Plutus]

And nuclear waste has to be cooling ina sed swimming pool for 1000 years yeap. Tell me about capital costs and running costs or short term visions.
France has/had 70pc of electricity power from nuclear....i think i know what i am talking about if i say it is an economic no go
But definitively try fusion or thorium if you feel like development of a new branch..good luck with Australia expertise...

Nuclear is a political no-go, not an economic no-go. The economics for nuclear stack up over a half century timeline when compared to solar and wind.

 

[Chronos-Plutus]

I believe the Thorium mini reactor was the proposal Chronos was suggesting.
It does have merit but the costs are still far higher than other technologies and as I suggested it won't be commercially available for another 20 years.

But the critical point you make is still valid. Nuclear power has always been developed with huge Government subsidies for development. And governments have had to pick up the tab for clean ups and disasters.

And no one yet has cleaned up an end of life nuclear power station.

Stop putting words in my mouth about a thorium reactor. I have been clear that I am talking about a Molten Salt Small Modular Reactor using uranium, not thorium.

The carbon emissions for nuclear power generation is less than solar and on-par with onshore wind.

 

[Chronos-Plutus]

Proponents of nuclear power in Australia it seems to me always want to privatise the profits and socialise the costs.

There is no way a private company could pay the costs of insurance (in the unlikely event that they could even get insurance in the first place) of cleaning up after a Fukishima type accident or the costs of storing nuclear waste for thousands of years. Those costs would necessarily fall onto the government/taxpayers and I doubt if any government in Australia would want to take on that responsibility when there are less risky options available.

If we really want to go nuclear , then maybe this is an option.

https://en.wikipedia.org/wiki/Accelerator-driven_subcritical_reactor

Fukishima was built on a coastline prone to tsunamis.

 

[basilio]

Basilo, I have just provided you with the undisputed scientific facts. I have a background in finance and mechanical engineering; so I think I have a stronger grasp of how nuclear powerplants work with the associated capital costs; than the vast majority of commentators.

Given your overwhelming confidence in your various finance and engineering skills I'm amazed you havn't been head hunted to kick start Australia's new glorious cost competitive nuclear industry.

Get a grip Chronos. There is some serious talent on ASF. Smurf for one is respected by on and off the Forum as a fair dinkum expert in the analysis of capital costs of the various energy sources. Regardless of your opinion my skills I can also read numbers that make it absolutely clear that currently:

1) Nuclear energy projects still require massive external financial support to come to fruition
2) New projects including MSR will not be commercially available for decades to come
3) The risks associated with nuclear energy can only be assumed by Governments. No insurance company or the industry itself is willing to take on these responsibilities.

The overwhelming problem for nuclear however is the fact that alternative renewable energy sources have become so much cheaper in the past decade. Economics, mature and still rapidly improving technology and the capacity to bring decentralized,clean, renewable energy to production in a very short time frame is a powerful new reality.

But don't take my word for it. Check out what the scientists at the CSIRO have to say.
,
New CSIRO, AEMO study confirms wind, solar and storage beat coal, gas and nuclear
An updated study on current and future generation costs by the CSIRO and the Australian Energy Market Operator confirms that wind, solar and storage technologies are by far the cheapest form of low carbon options for Australia, and are likely to dominate the global energy mix in coming decades.

The first report, GenCost 2018, identified that wind and solar were by far the cheapest forms of new generation technologies, clearly cheaper than coal, and even when combined with storage, remained easily the cheapest form low carbon electricity options.

A draft of the updated study, GenCost 2019-20, has been quietly posted on the AEMO website and confirms that wind and solar and storage remain the cheapest technologies, now and into the future, and much cheaper than the technologies promoted by the Australian government – gas, carbon capture, and nuclear.
https://reneweconomy.com.au/new-csi...-and-storage-beat-coal-gas-and-nuclear-57530/

 

[Chronos-Plutus]

Given your overwhelming confidence in your various finance and engineering skills I'm amazed you havn't been head hunted to kick start Australia's new glorious cost competitive nuclear industry.

Get a grip Chronos. There is some serious talent on ASF. Smurf for one is respected by on and off the Forum as a fair dinkum expert in the analysis of capital costs of the various energy sources. Regardless of your opinion my skills I can also read numbers that make it absolutely clear that currently:

1) Nuclear energy projects still require massive external financial support to come to fruition
2) New projects including MSR will not be commercially available for decades to come
3) The risks associated with nuclear energy can only be assumed by Governments. No insurance company or the industry itself is willing to take on these responsibilities.

The overwhelming problem for nuclear however is the fact that alternative renewable energy sources have become so much cheaper in the past decade. Economics, mature and still rapidly improving technology and the capacity to bring decentralized,clean, renewable energy to production in a very short time frame is a powerful new reality.

But don't take my word for it. Check out what the scientists at the CSIRO have to say.
,
New CSIRO, AEMO study confirms wind, solar and storage beat coal, gas and nuclear
An updated study on current and future generation costs by the CSIRO and the Australian Energy Market Operator confirms that wind, solar and storage technologies are by far the cheapest form of low carbon options for Australia, and are likely to dominate the global energy mix in coming decades.

The first report, GenCost 2018, identified that wind and solar were by far the cheapest forms of new generation technologies, clearly cheaper than coal, and even when combined with storage, remained easily the cheapest form low carbon electricity options.

A draft of the updated study, GenCost 2019-20, has been quietly posted on the AEMO website and confirms that wind and solar and storage remain the cheapest technologies, now and into the future, and much cheaper than the technologies promoted by the Australian government – gas, carbon capture, and nuclear.
https://reneweconomy.com.au/new-csi...-and-storage-beat-coal-gas-and-nuclear-57530/

Well; lets work through some numbers together then?

What is the average capital cost of a 1GW nuclear powerplant that will last 50 years?

Then we can will need to agree on the average capital cost of 3GW solar or wind farm; which will need to be built twice in 50 years.

Pretty simple math really.

 

[sptrawler]

Fukishima was built on a coastline prone to tsunamis.

Also it was 50 years old, so that made the design a 1960's model, many things have improved since the 1960's.
Many lessons have been learnt and critical core cooling would be high on the list of priorities, that would have improved since that design era.
Compare a 1960's car to the cars we have now, compare most machinery since the 1960 to present, everyone thinks nuclear development has stood still since Fukishima and Chernobyl were designed in the 1960's.
IMO that is a pretty naive attitude, I have never spent much time researching nuclear power generation, but I have had enough to do with power generation to know it is a constantly developing field.
Gas turbine efficiency has improved from approx 20% in the 1970's, to nearly 50% now and I'm talking open cycle.
So to use 1960's nuclear technology, to criticise current nuclear generation, is like comparing 1960's solar panels with those available now.
As long as it can be shown to be safe and cost effective, it should be considered, IMO.
As I said earlier, IMO nuclear will have to be used in some places, as it will be the only option for 'clean' energy generation.
Also as Chronos said, there is no getting away from the energy density.

 

[qldfrog]

Nuclear is a political no-go, not an economic no-go. The economics for nuclear stack up over a half century timeline when compared to solar and wind.

With all due respect this is pure BS look at UK France and US...
The only reason we use nuclear is weapon grade uranium
For Japan, it was independence
Obviously include the cost of building running and then cutting your power plant in small packets wrapped in melted glass and stored in pool or in ancient salt mine with 24/7 cooling protection etc

 

[basilio]

 

[basilio]

From CSIRO Energy Report (See above)

And despite ferocious criticism by the nuclear lobby, its estimates for nuclear remain unchanged, largely because it says there have been no technology advances since the last report. It does recognise the potential for small nuclear reactors in certain scenarios, but these are heavily qualified: they are at least a decade away, and would still deliver a levellised cost of energy at least twice that of wind and solar and storage.
https://reneweconomy.com.au/new-csi...-and-storage-beat-coal-gas-and-nuclear-57530/

 

[Chronos-Plutus]

With all due respect this is pure BS look at UK France and US...
The only reason we use nuclear is weapon grade uranium
For Japan, it was independence
Obviously include the cost of building running and then cutting your power plant in small packets wrapped in melted glass and stored in pool or in ancient salt mine with 24/7 cooling protection etc

Nuclear Levelised cost of electricity is cheap relative to renewables: