Well, not directionally surprised. But the amount necessary to manage variable generation is what matter. Up a little is surely fine. Up a lot, to be 2x max demand, would be excessive and costly.
A new coal plant with mine, ash dam, cooling water supply etc costs $5-8bn/GW to build and at current load factors would deliver about 5,500-6,000 GWh/y and a peak of 1GW. Include finance and depreciation operation and maintenance at current coal prices it has to make $170-200/MWh depending on interest rates to make a profit.
A 1 GW wind 1.5 GW solar 1.5 GW/6 GWh battery plant would deliver peak power of at least 1.8 GW and annual output after 10% curtailment of 6,000 GWh/y. It would cost about $7.5bn and have a breakeven of around $95-110/MWh, so who cares whether it has a nameplate capacity of 1 GW of coal or 4 GW of renewables/storage,
Based on the perfomance of renewables in Queensland on its worst day using just half the storage it would deliver 15 GWh of energy and its worst week 105 GWh. Every coal unit in Queensland has had days and weeks offline in the last few years.
The renewable system delivers cheaper power with higher availability, higher peak output, costs less, doesn't pollute the land, the atmosphere or the water table and it doesn't need enough water as a city of 100,000 people.
Does Ben Beattie sell his car because it is designed to carry 4-5 people safely at 130km/h at at least 50% usage but it actually averages 1.2 people at <40 km/h and 4% usage
I'm happy to focus on the details and glad you do too Peter.
Why in your example are renewables cheaper if both alternatives to spend $7 billion of capital costs generate 6,000GWh/yr? Is this just coal input cost? Is that really $80-100/MWh just in coal?
And the other important point is WHEN and WHERE the energy is generated in both cases, no? I think the crux of Ben and Aidan's points are the cheaper generate doesn't mean cheaper electricity if it adds more costs in other parts of the network to manage the variability of that generation.
Because coal has to buy fuel and hopefully, they pay the same price as irrigators to buy water. Market coal prices in NSW are $130-160/tonne+ freight + disposal costs of coal ash (10-25% ash content) so at 0.4 tonnes /MWh $55-80/MWh coal related costs. Also, stuff that runs at 550-1500C i) costs more, lots of fancy alloys, hydrogen cooling for the alternators etc ii) requires more maintenance so that is at least another $10/MWh plus water at about $2/MWh. ($10-20/MWh in a drought) not to mention the sludge from the SOx/PM2.5 scrubbers which produce another 20-50,000 tonnes of sludge a year and cost $5-10/MWh to operate
The main cost in managing the variability is in storage, that is included in the above price and obviates much of the gas usage currently used to manage variable demand. Further the old coal/gas system also had redundant capacity. Twenty five years ago there was 39 GW of coal and gas on the system that peaked at 23 GW and averaged 18.8 GW. Who paid for the excess capacity then?
Please don't quote Aidan, he has no relevant qualifications in engineering or economics he confuses output with demand and has such an ego that he belives that he can show the 65 year old global nuclear industry how to lower costs, despite having never built a shed let alone a power plant.
This lamentation about coal ramping is like trying to protect the canals from the railways. I thought economics was all about creative destruction and efficiency, but again the bulk of the Economics "profession" finds itself more and more in the service of vested interests rather than the community.
You talk about rooftop solar being a huge mistake, but:
1. Transmission & distribution are the biggest costs, as you mention in this podcast! Not only does distributed generation add nothing to these costs, it actually reduces the need for further investment by colocating sources & loads.
2. It is totally false that rooftop solar isn't controlled - and they don't use 4G sim cards to do it. Every inverter installed in the last 10 years ramps down it's power gradually as voltage or frequency increases. This is not "Australia having the weirdest inverter standards in the world", it's just sensible engineering.
That's why despite the hysterics over the last decade about the "system screaming, please stop putting solar in", rooftop solar continues to go from strength to strength. This trend will only continue as battery prices continue to fall.
Maybe tiny rooftop solar on houses only make sense in situations where consumers are getting ripped off massively (thanks privatisation). Retail/Commercial/Industrial rooftop is here to stay though.
Great discussion. I enjoyed hearing Ben be interviewed verses his normal podcast. Well spoken, no umms or errs, happy to answer any question directly in detail... refreshing compared to any Politician, Bureaucrat, or lobby group who all twist and turn to avoid a direct answer they can be held accountable too. Even some solution's presented based on his opinion very worthy of further detailed investigation. Well done both of you.
Thank you for this interesting interview. As someone who also studied electrical and electronics engineering (with a focus on electronics), I found this discussion particularly informative.
For balance, I'd suggest conducting a follow-up interview with a pro-renewables engineer. Engineering with Rose (available on YouTube) would be an excellent candidate for this perspective.
I agree with many of the points raised, particularly regarding gas prices driving electricity costs through marginal pricing in our market. While America flooding the market with cheap gas would benefit the rest of the world, I'm skeptical this would happen given it would likely increase domestic American energy prices.
However, I diverge on the nuclear power plant discussion. My opposition isn't based on safety concerns, which are largely manageable, but rather on economic and strategic grounds. As a coal and gas superpower, nuclear power wouldn't meaningfully enhance our energy security. I fear nuclear could become another LNP high-speed rail – a costly project with questionable returns.
For genuine energy security, we should address our oil import dependence. This could involve expanding domestic oil production where feasible, but also embracing alternatives like CNG-powered vehicles (widely used across Asia) and encouraging electric vehicle adoption.
The anti-neoliberalism trend of the 2010s has been concerning. This period has seen poor economic growth, mounting public debt, and a slowdown in global development – interrupting the reduction in global inequality that hyper-globalization had been facilitating.
Regarding renewables, I believe solar and batteries have a future, but they shouldn't have received subsidies. Market forces would have naturally led to solar adoption by the late 2040s as costs decreased. Unfortunately, premature green policy interventions have distorted this natural market progression.
One complicating factor with the Trump presidency is because Musk and a bunch of California lunnies are his administration this time. Musk is just a less extreme environmentalist so I doubt they'll start encouraging more coal or whatever. I wouldn't even be that surprised if he keeps most of Biden green subsidies or implements a carbon tax.
When solar and wind replace coal, with no change in demand, nameplate capacity goes up. Should we be surprised?
Well, not directionally surprised. But the amount necessary to manage variable generation is what matter. Up a little is surely fine. Up a lot, to be 2x max demand, would be excessive and costly.
You haven't established that. The difference in nameplate capacity reflects the fact that VRE has lower capacity factors, offset by even lower costs.
We are nowhere near 2x max demand. There's occasional curtaliment, rapidly being addressed by storage.
What a silly old argument.
A new coal plant with mine, ash dam, cooling water supply etc costs $5-8bn/GW to build and at current load factors would deliver about 5,500-6,000 GWh/y and a peak of 1GW. Include finance and depreciation operation and maintenance at current coal prices it has to make $170-200/MWh depending on interest rates to make a profit.
A 1 GW wind 1.5 GW solar 1.5 GW/6 GWh battery plant would deliver peak power of at least 1.8 GW and annual output after 10% curtailment of 6,000 GWh/y. It would cost about $7.5bn and have a breakeven of around $95-110/MWh, so who cares whether it has a nameplate capacity of 1 GW of coal or 4 GW of renewables/storage,
Based on the perfomance of renewables in Queensland on its worst day using just half the storage it would deliver 15 GWh of energy and its worst week 105 GWh. Every coal unit in Queensland has had days and weeks offline in the last few years.
The renewable system delivers cheaper power with higher availability, higher peak output, costs less, doesn't pollute the land, the atmosphere or the water table and it doesn't need enough water as a city of 100,000 people.
Does Ben Beattie sell his car because it is designed to carry 4-5 people safely at 130km/h at at least 50% usage but it actually averages 1.2 people at <40 km/h and 4% usage
I'm happy to focus on the details and glad you do too Peter.
Why in your example are renewables cheaper if both alternatives to spend $7 billion of capital costs generate 6,000GWh/yr? Is this just coal input cost? Is that really $80-100/MWh just in coal?
And the other important point is WHEN and WHERE the energy is generated in both cases, no? I think the crux of Ben and Aidan's points are the cheaper generate doesn't mean cheaper electricity if it adds more costs in other parts of the network to manage the variability of that generation.
Because coal has to buy fuel and hopefully, they pay the same price as irrigators to buy water. Market coal prices in NSW are $130-160/tonne+ freight + disposal costs of coal ash (10-25% ash content) so at 0.4 tonnes /MWh $55-80/MWh coal related costs. Also, stuff that runs at 550-1500C i) costs more, lots of fancy alloys, hydrogen cooling for the alternators etc ii) requires more maintenance so that is at least another $10/MWh plus water at about $2/MWh. ($10-20/MWh in a drought) not to mention the sludge from the SOx/PM2.5 scrubbers which produce another 20-50,000 tonnes of sludge a year and cost $5-10/MWh to operate
The main cost in managing the variability is in storage, that is included in the above price and obviates much of the gas usage currently used to manage variable demand. Further the old coal/gas system also had redundant capacity. Twenty five years ago there was 39 GW of coal and gas on the system that peaked at 23 GW and averaged 18.8 GW. Who paid for the excess capacity then?
Please don't quote Aidan, he has no relevant qualifications in engineering or economics he confuses output with demand and has such an ego that he belives that he can show the 65 year old global nuclear industry how to lower costs, despite having never built a shed let alone a power plant.
As for ramping this is October 2014 where wind and solar hardly got a look in. Coal ramped every day https://anero.id/energy/2014/October.
This lamentation about coal ramping is like trying to protect the canals from the railways. I thought economics was all about creative destruction and efficiency, but again the bulk of the Economics "profession" finds itself more and more in the service of vested interests rather than the community.
Now interview Mark Diesendorf.
Interview coming in a couple of weeks. Good suggestion
You talk about rooftop solar being a huge mistake, but:
1. Transmission & distribution are the biggest costs, as you mention in this podcast! Not only does distributed generation add nothing to these costs, it actually reduces the need for further investment by colocating sources & loads.
2. It is totally false that rooftop solar isn't controlled - and they don't use 4G sim cards to do it. Every inverter installed in the last 10 years ramps down it's power gradually as voltage or frequency increases. This is not "Australia having the weirdest inverter standards in the world", it's just sensible engineering.
That's why despite the hysterics over the last decade about the "system screaming, please stop putting solar in", rooftop solar continues to go from strength to strength. This trend will only continue as battery prices continue to fall.
Maybe tiny rooftop solar on houses only make sense in situations where consumers are getting ripped off massively (thanks privatisation). Retail/Commercial/Industrial rooftop is here to stay though.
Great discussion. I enjoyed hearing Ben be interviewed verses his normal podcast. Well spoken, no umms or errs, happy to answer any question directly in detail... refreshing compared to any Politician, Bureaucrat, or lobby group who all twist and turn to avoid a direct answer they can be held accountable too. Even some solution's presented based on his opinion very worthy of further detailed investigation. Well done both of you.
Pitty that most of it is irrelevant or misleading
Thank you for this interesting interview. As someone who also studied electrical and electronics engineering (with a focus on electronics), I found this discussion particularly informative.
For balance, I'd suggest conducting a follow-up interview with a pro-renewables engineer. Engineering with Rose (available on YouTube) would be an excellent candidate for this perspective.
I agree with many of the points raised, particularly regarding gas prices driving electricity costs through marginal pricing in our market. While America flooding the market with cheap gas would benefit the rest of the world, I'm skeptical this would happen given it would likely increase domestic American energy prices.
However, I diverge on the nuclear power plant discussion. My opposition isn't based on safety concerns, which are largely manageable, but rather on economic and strategic grounds. As a coal and gas superpower, nuclear power wouldn't meaningfully enhance our energy security. I fear nuclear could become another LNP high-speed rail – a costly project with questionable returns.
For genuine energy security, we should address our oil import dependence. This could involve expanding domestic oil production where feasible, but also embracing alternatives like CNG-powered vehicles (widely used across Asia) and encouraging electric vehicle adoption.
The anti-neoliberalism trend of the 2010s has been concerning. This period has seen poor economic growth, mounting public debt, and a slowdown in global development – interrupting the reduction in global inequality that hyper-globalization had been facilitating.
Regarding renewables, I believe solar and batteries have a future, but they shouldn't have received subsidies. Market forces would have naturally led to solar adoption by the late 2040s as costs decreased. Unfortunately, premature green policy interventions have distorted this natural market progression.
One complicating factor with the Trump presidency is because Musk and a bunch of California lunnies are his administration this time. Musk is just a less extreme environmentalist so I doubt they'll start encouraging more coal or whatever. I wouldn't even be that surprised if he keeps most of Biden green subsidies or implements a carbon tax.