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Is nuclear energy more expensive than offshore wind?

by Jerome a Paris Thu Jul 19th, 2012 at 07:28:47 AM EST

This is what is suggested in a recent article of the Times:


French demand high price for `rescuing' nuclear industry with two new reactors (behind pay wall, but accessible here)

According to well-placed industry sources, EDF Energy has told officials that it needs about £165 per megawatt hour, almost four times the existing wholesale price of electricity, if it is to go ahead with Hinkley Point.

(...)

The Government has warned EDF Energy, and its junior partner Centrica, that nuclear power subsidies must be lower than offshore wind power to ensure public acceptance. The company argues that the total costs of the giant new offshore wind projects planned for the North Sea will be £180 per mw/h [sic], making nuclear slightly cheaper.

That this is even in discussion shows how difficult it is to know the price of new nukes. Proponents of nuclear have long argued that nuclear power was really cheap, in the 3-4c/kWh (i.e. 30-40 EUR/MWh) range, and the recent report by the Cour des Comptes in France noted that the actual price of nuclear power in France over the past 30 years had been close to 50 EUR/MWh (see a summary of the report in English here (pdf)). But that was in the good old days when the country could - and knew how to - do industrial policy, and could fund nuclear power plants using sovereign discount rates (5-8% over 30-40 years) rather than private investor discount rates (10-15% over 15-20 years).

The Cour des Comptes notes that future nuclear power was unlikely to be cheaper than 80 EUR/MWh, and massive delays on the Olkiluoto and Flamanville plants being built by Areva in Finland and France (the former now pushed back again to a cumulative 5 year delay at the minimum) have made the calculation even more complicated.

I had heard rumors that EDF could be asking the British government for a 115 GBP/MWh tariff, in itself a stunning admission that nuclear was not so cheap (and making it barely cheaper than offshore wind, which currently benefits from tariffs in the 120-130 GBP/MWh range in the UK, and can be expected to go down significantly over time, as the sector industrializes and gains scale). But 165 GBP/MWh is definitely more expensive than offshore wind (the whole offshore wind industry would jump with joy if offered a flat tariff at that level) and massively more expensive than onshore wind (which costs 60 GBP/MWh or so and could be deployed on a large scale in the UK if it were not for NIMBY obstacles).

Beyond showing the UK government desperation to get some nukes built, this story suggests, more than anything else, that Germany's decision to stop nuclear altogether actually makes economic sense. Of course, it's not going to be easy, and there are serious engineering and technical problems to be solved, but they can be resolved if sufficient commitment is put towards that goal. In Germany, that commitment is there. In the UK, I think it's there as well (offshore wind will not be sacrificed to do nukes), but it's still not seen as the core priority - unless the push for nukes is actually a devious plot to make offshore wind look comparatively cheap...


Display:
You should crosspost this at the orange place. There's a nuclear crowd there on  the warpath against renewables that could benefit from being forced with hard data that shows nuclear isn't the super cheap alternative that they paint it as.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Wed Jul 18th, 2012 at 09:02:43 AM EST
by Jerome a Paris (etg@eurotrib.com) on Wed Jul 18th, 2012 at 12:40:38 PM EST
[ Parent ]
Jerome on DKos:
Sorry I haven't been around for a while

Work has kept me busy, and the eurozone stuff is too depressing to blog about.

Oh, please, at least you have a non-depressing job to blog about.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Wed Jul 18th, 2012 at 12:51:33 PM EST
[ Parent ]
well, I do that, but not on a daily basis.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Wed Jul 18th, 2012 at 01:02:28 PM EST
[ Parent ]
I went and commented, but probably after the witching hour for an Agent Orange essay.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Jul 18th, 2012 at 09:20:59 PM EST
[ Parent ]
I also wonder how much more expensive new coal is becoming. The need to replace T24 steel in boilers led to announced 2-4-year delays for practically all new plants in construction in Germany, but I haven1t seen a cost estimate yet.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Jul 18th, 2012 at 12:12:23 PM EST
The reasonable thing is to create a stable framework and let wind and nuclear duke it out. May the best one capture the most market share. Abolish all subsidies, guaranteed rates etc etc, and just introduce a high tax on carbon dioxide emissions.

If this is not enough, supply the state-owned power company with sovereign credit, and it will be enough.

Further, I disagree with Jerome's argument that the Germans might be reasonable to shut down their nukes. This is not so. It might (or might not) be reasonable for the Germans not to build new nukes, but prematurely closing current ones is folly, as they are veritable printing presses now that the loans are paid down. The old Swedish nukes produce electricity at less than 1 eurocent per kWh now that the loans are paid back. The same should be true in Germany.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Jul 18th, 2012 at 03:32:30 PM EST
But that just means that the government's future value of money setting will choose the winner.
by njh on Fri Jul 20th, 2012 at 12:37:23 AM EST
[ Parent ]
You lost me there.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 20th, 2012 at 05:07:00 AM EST
[ Parent ]
One of the most important aspects of the levelised cost of energy (LCOE) is the discount rate used. High capital, low O&M projects (e.g. wind, solar) prefer a very low discount rate. Low capital, high O&M (e.g. fossil) prefer a higher discount rate. Who "wins" very much depends on the cost of capital.
by jam on Fri Jul 20th, 2012 at 10:46:21 AM EST
[ Parent ]
Indeed it does.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 20th, 2012 at 11:49:34 AM EST
[ Parent ]
The reasonable thing is to create a stable framework and let wind and nuclear duke it out. ay the best one capture the most market share. Abolish all subsidies, guaranteed rates etc etc, and just introduce a high tax on carbon dioxide emissions.

The trouble is that, even with the limitations in your last sentence, there can be several different "stable frameworks" and the ability to capture market share depends on them (the fitness of competitors is determined by the environment). Things like the financial framework, approval, zoning laws. But I'm sure you have been told this already.

prematurely closing current ones is folly

The reason for the premature closures is of course not economic but that the plants had safety issues and operators like Vattenfall cannot be trusted. Then again, there would be an economic dimension if the old plants were required to implement retrofits according to the newest standards (with the protective hull being the main cost factor).

That said, I don't disagree that the precise implementation of the Merkel II government's nuclear phaseout is not reasonable. In a proper planned transition, the phaseout part should be continuous and not big steps, the advertised replacement should not be throttled, other "replacement" should be throttled even if it hurts big business, and grid development should have been pushed more energetically from the start.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Jul 20th, 2012 at 05:25:13 AM EST
[ Parent ]
Again quoting the French Senate report, it appears that the  54 € / MWh estimate for nuclear electicity includes the cost (about 5 € / MWh) of heavy-duty revisions to all the existing plant, both to prolong its life another 30 years and to implement post-Fukushima security. Sounds remarkably cheap... but only if they are effectively able, and allowed, to run them for an extra 30 years after the end of their design life :

Électricité : assumer les coûts et préparer la transition énergétique Electricity: acknowledging the costs and preparing for the energy transition

Votre commission s'interroge toutefois sur le pari que semble faire EDF : ces investissements, égaux aux trois quarts du coût de construction historique des centrales (72,9 milliards d'euros selon la Cour des comptes94(*)) se placent, en effet, dans la perspective de la prolongation des centrales nucléaires. M. Proglio a indiqué clairement aux membres de votre commission que « ces investissements comprennent une large rénovation, sorte de « grand carénage », indispensable à l'approche des trente ans de fonctionnement. Une fois cette rénovation réalisée, les centrales pourront fonctionner pendant trente nouvelles années, sans préjuger, bien sûr, des avis qui nous sont délivrés tous les dix ans par l'ASN. »

Your Committee nevertheless is curious about the bet that EDF seems to be making : these investments, equal to three quarters of the historical construction costs of the plants (72.9 billion euros according to the Court of Auditors) are made, indeed, in view of the extension of the life of nuclear power plants. Mr. Proglio has made it clear to your committee members that " these investments include a wide-ranging renovation, sort of" major overhaul "critical to the perspective of thirty years of operation. Once the renovation is completed, the plants will run for thirty more years, without prejudice, of course, to notices issued to us every ten years by the nuclear safety authority . "
Ainsi ces travaux ne produiront-ils véritablement leur effet sur le plan économique qu'à condition que la durée d'exploitation des centrales soit effectivement prolongée au-delà de trente ans : il s'agit d'une forme de pari économique, l'Autorité de sûreté nucléaire ou l'autorité politique pouvant en décider autrement. Thus these works really only produce their economic effecst on the condition that the duration of plant operation is effectively extended for at least thirty years: it is a form of economic bet, since the Nuclear Safety Authority or the political authority may decide otherwise.

It comes down to trust, in the end. Every nation's nuclear safety record is excellent, until it isn't.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Fri Jul 20th, 2012 at 06:02:02 AM EST
[ Parent ]
Design life is not 30 years. It's 40 years. The extensions make the lifetime 60 years.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 20th, 2012 at 08:48:25 AM EST
[ Parent ]
And I would submit that it's far easier to make a wind turbine with a 60 year lifetime than it is a nuclear plant. The turbine just needs to have oversized bearings and gears, but the materials in the reactor are fundamentally damaged by the radiation. Also there is the question of how much of the original plant is still in use at the end of the cycle--compared to how much has been replaced during use.

Also the claim that nuclear plant re-fueling can be timed to coincide with a low period of power demand is questionable, given that the refueling takes months. It takes, what, a day to replace a blade on a turbine?

by asdf on Fri Jul 20th, 2012 at 09:02:34 AM EST
[ Parent ]
In France, there are enough reactors so that they can be rotated out of service one by one without making a huge hole in production (and the pauperized maintenance staff tour around France as their jobs move, sleeping in caravans etc.) The homogeneity of the plant makes this fairly easy to plan. Until you get the same systemic problem everywhere at the same time, of course...

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri Jul 20th, 2012 at 09:17:01 AM EST
[ Parent ]
Even the reactor tanks themselves can be replaced by newer ones when the old ones become brittle. It has been done already in the US, IIRC.

Nuclear plant refuelling is always done during summer, in Sweden at least. At that time, demand is so low anyways that the slack can be picked up by our hydroplants without a hitch. And not all nukes need to be refueled at the same time. A standard refueling operation takes a few weeks.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Jul 20th, 2012 at 11:53:37 AM EST
[ Parent ]
Here's an interesting comparison. When hybrid cars came out, one of the techniques used to reduce fuel consumption was "auto stop" of the engine. When you stop the car, the engine stops.

Then when you need to go again, the engine needs to start back up. (Obviously it's more complicated than that!) So the immediate reaction of the hybrid-car-denier community was "that's going to wear out your starter motor really fast!"

But obviously it doesn't wear out your "starter motor" because there is no starter motor. It's some combination of traction motor or motors, depending on the system, but the old-fashioned starter motor with Bendix drive engaging the flywheel is not in the picture at all.

Similarly with wind turbines, what you have today is a pretty complicated system with high-load gearing between the hub and the generator, plus what amounts to a helicoptor rotor blade management system to deal with varying wind strengths. The gearing can be replaced by direct drive connections, and one would think that over time the blade management system could also be simplified. So there's lots of space for technical improvements that go in the direction of simplification of the mechanical system--potentially down to something with very few moving parts.

Meanwhile, despite 60+ years of investment in engineering, nuclear reactors are fundamentally complicated, dangerous, and expensive.

by asdf on Fri Jul 20th, 2012 at 02:16:33 PM EST
[ Parent ]
That's probably because you don't use much air conditioning in Sweden. In the mediterranean latitudes it would probably be best in winter. After the hydroelectric dams get full if possible.

res humà m'és aliè
by Antoni Jaume on Fri Jul 20th, 2012 at 03:57:05 PM EST
[ Parent ]
True. So : we get an extra half-life. (boom boom!)

And cheap at the price : one wonders why/whether new build has to be so fiendishly expensive. My guess is that the EPR is just a poor design.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Fri Jul 20th, 2012 at 09:13:02 AM EST
[ Parent ]
I'd say that a lot of it has to do with lack of n-experienced workers and companies, and a lack manufacturing capacity for heavy forgings and so on.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 20th, 2012 at 11:55:09 AM EST
[ Parent ]
The reasonable thing is to create a stable framework and let wind and nuclear duke it out. May the best one capture the most market share. Abolish all subsidies, guaranteed rates etc etc, and just introduce a high tax on carbon dioxide emissions.

It's inherently silly to sell baseload on marginal pricing spot markets. Fixed prices makes sense for baseload as a market structure even more than as an infant industry protection.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jul 22nd, 2012 at 03:36:07 PM EST
[ Parent ]
I don't disagree. Still, even in a marginal-cost pricing structure, individual consumers (big and small) can and indeed do make long-term fixed power deals with the generators. My utility offers the options of spot pricing for my power, and also fixed price contracts lasting for 1, 2, 3, 5 or 10 years.

Ironically, such contracts undermine the efficiency of the power market, at least when small consumers who aren't likely to stop using power when the price spikes, are given such options.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Mon Jul 23rd, 2012 at 06:42:26 AM EST
[ Parent ]
Which is why you need to have three different sorts of contracts: Fixed-price, fixed-volume, forward-price, scheduled-volume, and flexible price, load-following volume.

Ideally, Joe Q. Consumer would have a contract structured so that he has a baseline quota, which can vary over the day, week and year, and then pays a higher spot charge for going over that baseline.

The utility would then offer Mary Q. Producer a fixed rate for delivering power at the convenience of the producer, a higher forward rate for delivering on 24 hour notice, and a still higher rate for delivering at the convenience of the consumer. The utility would make money on the spread, and on the fact that Joe Q. Consumer will normally be within his quota (because he is risk-averse and because he has noise in his demand profile), which allows the utility to diversify out the noise in individual consumer profiles and to exploit its lower risk aversion.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 08:06:01 AM EST
[ Parent ]
Two points:

The cost of new nuclear powerplants is obviously not a relevant argument for turning existing nuclear power plants off prior to the end of their design life. That money has already been spent, the concrete poured, the steel forged, ect, and you dont get a refund.

Secondly: Paying private investors doubledigit returns on low carbon infrastructure in the current economic and climatic situation, regardless of type is.. gah. I dont have polite words.
That is not an argument against nuclear, it is an argument against our entire financial framework for building infrastructure.

by Thomas on Wed Jul 18th, 2012 at 04:58:08 PM EST
Thomas:
The cost of new nuclear powerplants is obviously not a relevant argument for turning existing nuclear power plants off prior to the end of their design life.

Indeed no. The argument about shutting them down is about safety.

A completely objective assessment of the safety of Europe's nuclear plants is not possible, because you can't buy insurance against a Fukushima type disaster. i.e. there is no rational way to assess whether the risks are justified by the economic benefit.

The reason new nukes are completely unaffordable, and will not be built without sovereign strategic decisions and sovereign financing (whatever fig-leaves may be employed) is that providing a high level of safety is horribly expensive. Pro-nuclear people no doubt believe that the safety standards that are now required are absurdly excessive. But this is demonstrably in the domain of belief.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Jul 19th, 2012 at 04:10:22 AM EST
[ Parent ]
"providing a high level of safety is horribly expensive"

A safe nuke is not more expensive than a dangerous nuke. Nukes are expensive, period.

For example, the Fukushima accident would never happened if the plants had been protected by a comparatively cheap 20 metre high seawall.

And even if such a thing was lacking and the plants had indeed suffered core meltdowns, 99.9% of the radioactive emissions would have been avoided if the plants had been equipped by protective filters, cheap and simple enough that all Swedish nukes had them installed in the 80's.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 10:49:29 AM EST
[ Parent ]
Which suggests that the question is whether one lives in a society in which one can trust its regulatory institutions to require such things. Clearly the Japanese do not. I see little reason to have faith that we Americans do.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Jul 19th, 2012 at 10:40:08 PM EST
[ Parent ]
If that is so, you have far more acute problems to deal with than nuclear power or any energy crisis...

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 20th, 2012 at 05:07:58 AM EST
[ Parent ]
Well, we do have both more acute and more serious long term problems than the energy crisis ~ though for the specific area where the breakdown of regulation of nuclear power plants comes home to roost, its both plenty acute and plenty serious long term ~ but over a 50 year period, I do not trust a US institution to remain free of capture by the industry for the whole 50 years. If you could point to a 50 year interval in US history when it had not occured in any given regulatory institution, I'd accept that its possible, but it still wouldn't be likely.

The US has ample sustainable, renewable energy sources that can be tapped with already existing renewable energy harvest technology for all our energy needs, if we adopt a sustainable economy, and if we don't adopt a sustainable economy then having nuclear power isn't going to save us. Our major energy challenge is vested interests standing in the way of abandoning energy profligate systems that they directly profit from.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Jul 20th, 2012 at 01:50:21 PM EST
[ Parent ]
Well, we do have both more acute and more serious longshort term problems than the energy crisis...

Namely, are we going to starve to death this coming winter due to massive crop failures...

by asdf on Fri Jul 20th, 2012 at 02:19:20 PM EST
[ Parent ]
Not in the US ~ switching to cereal grain and beans instead of grain-fed industrial farmed meat would keep starvation at bay. That's a flip side of the energy profligacy. What would be at risk would be massive subsidized agribusiness profits, and so the Congress would divert more food stamp budget into direct subsidy to long term unsustainable monoculture.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Jul 20th, 2012 at 05:47:52 PM EST
[ Parent ]
I tend to agree with you about shutting down plants prematurely. I'd note, cynically, that they are not shut down yet.

Your point about private returns is spot on, and it applies as much to nuclear as to renewables. Given the context we live in (no public sector investment as imposed by the EU), renewables can get lower cost of funding, if the regulatory framework is done right, than nukes can, because risk will be perceived as lower.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 05:52:52 AM EST
[ Parent ]
no public sector investment as imposed by the EU

Do you know in what way this is actually stated, in what regulation, what law, what directive, or so on?

I imagine that given how the rules are actually framed, there might be certain loopholes, like borrowing via the state, then having the state issue all the cash to the state-owned utility via a rights issue, and so on. I.E. keep all the debt with the sovereign and have the utility funded solely through equity.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 10:55:25 AM EST
[ Parent ]
no public sector investment as imposed by the EU

Do you know in what way this is actually stated, in what regulation, what law, what directive, or so on?

"Illegal state aid" rules.

Or, at any rate, their interpretation by the European Commission.

As a first step, it has to determine whether a company has received State aid, which is the case if the support meets the following criteria:

  • there has been an intervention by the State or through State resources which can take a variety of forms (e.g. grants, interest and tax reliefs, guarantees, government holdings of all or part of a company, or the provision of goods and services on preferential terms, etc.);
  • the intervention confers an advantage to the recipient on a selective basis, for example to specific companies or sectors of the industry, or to companies located in specific regions;
  • competition has been or may be distorted;
  • the intervention is likely to affect trade between Member States.

By contrast, general measures are not regarded as State aid because they are not selective and apply to all companies regardless of their size, location or sector. Examples include general taxation measures or employment legislation.


If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Thu Jul 19th, 2012 at 11:05:42 AM EST
[ Parent ]
So, when the French state saved Alstom, that was clearly illegal state aid? The very ownership of state companies like Vattenfall or EdF is illegal state aid? State investment to support SME's are illegal state aid as well? Someone should tell the Swedish government then. Furthermore and very clearly, all bank bailouts are illegal state aid.

This seems very much a rubber paragraph, which can be used whenever someone has an axe to grind, and to be ignored when it fits the interests of the Commission.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 11:14:04 AM EST
[ Parent ]
Furthermore and very clearly, all bank bailouts are illegal state aid.

And Commissioner Almunia and his staff are going to be controling the process...

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Thu Jul 19th, 2012 at 11:35:13 AM EST
[ Parent ]
Yay.

Ok, this is what the rules say:

By contrast, general measures are not regarded as State aid because they are not selective and apply to all companies regardless of their size, location or sector

So... offer all companies, no matter what size or sector or owner, the option of taking part in a massively diluting rigths issue, where the government injects, say 10 % of current equity in the company, and in return gets new shares equal to 1000% of the current number of shares. This would be equal and open to all, but no company would ever except the "offer", except one that is already 100% state-owned.

In this way you could issue sovereign bonds and transfer the cash into state-owned power companies while avoiding the illegal state aid rules.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 11:43:49 AM EST
[ Parent ]
If the value of the loans were measured to 'energy units' instead of current currencies. this would marry with Chris Cook's ideas, wouldn't it?

"We can all be prosperous but we can't all be rich." Ian Welsh
by melo (melometa4(at)gmail.com) on Thu Jul 19th, 2012 at 01:23:05 PM EST
[ Parent ]
Commodity pegs are just as deflationary as gold buggery or ECBuggery.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Thu Jul 19th, 2012 at 06:45:26 PM EST
[ Parent ]
Isnt that because all commodities have become hedge fund spec?
Plus the fact they are diminishing supply?
Investing in solar rollout is trusting a source of energy that is as close to infinite as we'll ever need.
There would be risk of some inflation during short to medium term due to bandwaggoning/carpet-bagging but it would settle down when the train got rolling and the thrillseekers went looking for a bubble with more quick profits.
Plenty sunshine for everyone to get pie.

"We can all be prosperous but we can't all be rich." Ian Welsh
by melo (melometa4(at)gmail.com) on Fri Jul 20th, 2012 at 08:18:12 AM EST
[ Parent ]
No, it is because if you peg your money to a real resource (be it gold, oil, carbon, or entropy) you allow society to potentially generate credit claims to more real resources than can actually exist (and, based on past experience, this potentiality will eventually be realised) which is then followed by a debt-deflation cycle when the bubble pops.

Fiat money allows such nonsense to be inflated away (which is why inflation-indexed debt is as systemically risky as especie pegs).

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Fri Jul 20th, 2012 at 08:57:25 AM EST
[ Parent ]
Not just that - Your monetary base gets vulnerable to technological shocks.

.... actually it is even worse than that. Shock implies surprises, but energy production is predictably going to dee upheavals.  - it is the one sector of the economy guaranteed to experience technological changes. I dont know how we will be producing electrons in 2032, nor what they will cost, and neither does anyone else. -

 I can list half-a-dozen highly plausible optinons for future generation mixes and technologies off the top of my head - some of them are unavoidably moderately more expensive than unmitigated coal, and some of them are ridiculusly cheap. Either of which would completely wreck any currency based off the supply of power. Bad, bad, bad idea.

by Thomas on Fri Jul 20th, 2012 at 06:36:25 PM EST
[ Parent ]
Thomas:
some of them are ridiculously cheap.

promises, promises...

just supposing we envision a future ever embroigled in the 'winner-takes-all' zero-sum game we call predatory capitalism, couldn't we make at least it fair?

ie no whining when the wheel turns against you and you bet loses to the house. if your currency breaks on the reefs of reality, then cut your losses and bet on another one.

or go home and bake cookies...

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Fri Jul 20th, 2012 at 07:59:28 PM EST
[ Parent ]
well, State ownership is not a factor, as the EU was not allowed to decide on forms of ownership, but State-owned firms are supposed to finance themselves without a State guarantee, explicit or implicit.

That applied to EDF but also to the Landesbanken, whose business model (borrow cheap and lend cheap to local companies) was broken by the EU to comply with the "competition" demands of the London-based (and US-owned) investment banks. So they had to borrow expensive, and turned to crazy stuff like MBS to earn the equivalent revenue, while their past clients went to the investment banks for loans (and get cut off at times of crisis...)

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 12:37:25 PM EST
[ Parent ]
I wouldn't put all the blame on Anglo banks. While the prime beneficents are the rentiers in the financial sector these Competition rules favor all well established players.

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter
by generic on Thu Jul 19th, 2012 at 01:14:19 PM EST
[ Parent ]
This seems very much a rubber paragraph, which can be used whenever someone has an axe to grind, and to be ignored when it fits the interests of the Commission.

Quite.

Which, given the macroeconomic acumen of the current Commission, translates to "no significant public investment in anything useful."

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 03:04:58 AM EST
[ Parent ]
La facture d'électricité des Français augmenterait de 50% d'ici à 2020French electricity bills to increase by 50% by 2020
La facture moyenne d'électricité d'un ménage français va s'alourdir de 50 % d'ici à 2020 à cause des investissements élevés du renouvelable et ceux croissants du nucléaire, selon un rapport de sénateurs présenté mercredi 18 juillet. Sous réserve, souligne le texte, d'une législation et de comportements de consommation inchangés.
Citant des projections de la Commission de régulation de l'énergie (CRE), ce rapport estime que la facture annuelle d'un ménage type ayant souscrit l'option heures pleines-heures creuses - et a priori équipé d'un chauffage électrique - atteindrait 1 307 euros en 2020 contre 874,5 euros en 2011.
The average electricity bill of a French household will increase by 50% by 2020 because of high investments in renewables and increasing investments in nuclearenergy, according to a Senate report presented on Wednesday, July 18. Subject, says the text, to unchanged legislation and consumer behavior. Citing projections of the Energy Regulatory Commission (CRE), the report estimates that the annual bill of a typical household having subscribed the option "peak/off-peak hours" - and a priori equipped with electric heating - reach 1,307 euros in 2020 against 874.5 euros in 2011.
"Se pose aujourd'hui la question d'énormes investissements, on peut parler de 400 milliards d'euros à horizon de vingt ans", a souligné le rapporteur écologiste de cette commission, Jean Dessessard. Sur l'augmentation de 433 euros attendue sur la facture (qui est hors TVA), 28 % viendront de la taxe dite CSPE (contribution au services public de l'électricité, qui inclut notamment les tarifs d'achats subventionnés des énergies renouvelables), 37 % des réseaux électriques et 35 % de la production d'électricité elle-même. "This raises the question today of huge investments, we can talk about 400 billion euros in next twenty years" , stressed the rapporteur of the commission, the ecologist Jean Dessessard. The expected increase of 433 euros on the invoice (that is excluding VAT), 28% will come from the tax known as CSPE (contribution to public services of electricity, which includes subsidized purchase rates for renewable energy ), 37% from electrical network charges and 35% from electricity production itself.
Il ressort des évaluations des sénateurs que les coûts de l'électricité nucléaire française sont encore sous-évalués : en incluant les travaux de maintenance post-Fukushima, la commission les évalue à 54,2 euros par mégawattheure. C'est plus que l'évalution du rapport de référence publié par la Cour des comptes au début de l'année (49,5 euros) et plus que le prix de l'accès régulé à l'électricité nucléaire historique (Arenh), c'est-à-dire le prix officiel du courant nucléaire, qui est de 42 euros depuis le 1er janvier.The evaluations of the senators indicate that the costs of French nuclear electricity are still undervalued: including maintenance work post-Fukushima, the commission evaluates to 54.2 euros per megawatt hour. This is more than the evalution of the baseline report published by the Court of Auditors at the beginning of the year (49.5 euros) and more than the price of regulated access to nuclear power history (ARENH) that is to say the official price of nuclear power, which is 42 euros since 1st January.
Le rapport, comme celui de la Cour des comptes publié au printemps, relève aussi des "incertitudes" supplémentaires notamment sur le démantèlement, plus les coûts d'assurances pour un accident ou des frais de recherche. Des coûts qui porteraient le total à 75 euros le mégawattheure, même si la Commission s'est refusée à effectuer officiellement cette addition "parce qu'on n'a pas voulu rajouter des incertitudes aux incertitudes", selon M. Dessessard.The report, like that of the Court of Auditors published in the spring, also points out further "uncertainties" including the dismantling, plus the cost of insurance for accidents, or research costs. Costs that would bring the total to 75 euros per megawatt hour, while the Commission declined to make this addition officially "because we did not want to add uncertainties to uncertainties" , according to M . Dessessard.
L'ÉOLIEN TERRESTRE, "UNE FILIÈRE COMPÉTITIVE" onshore wind, "A COMPETITIVE INDUSTRY"
Les travaux de la commission, présidée par le sénateur UMP Ladislas Poniatowski, ont été adoptés par tous les membres à l'exception des communistes qui ont voté contre, dénonçant une logique de "justification de l'augmentation du coût de l'électricité". Des sujets sensibles comme l'avenir du nucléaire ont aussi été évacués en annexes, et n'ont pas fait l'objet d'un vote, ont précisé les membres de la Commission.The findings of the commission, chaired by Senator UMP Ladislas Poniatowski, were adopted by all members except the Communists who voted against, denouncing a logic of "justification for the increased cost of electricity ". Sensitive issues such as the future of nuclear were also evacuated into appendices, and have not been put to a vote, said the Commission members.
Côté renouvelables, les sénateurs relèvent que l'éolien terrestre est "d'ores et déjà une filière mature et compétitive", avec un prix de 82 euros du mégawattheure. L'éolien en mer reste encore beaucoup plus cher - plus de 220 euros - tandis que le photovoltaïque culmine toujours entre 229 à 371 euros, même si on est redescendu de sommets de 580 euros du fait du tour de vis sur les tarifs d'achat.On the renewables side, the senators note that onshore wind is "already a mature and competitive industry" , with a price of 82 euros megawatt hour. Offshore wind is still much more expensive - over 220 euros while photovoltaic is from 229 to 371 euros, even if it has dropped down from highs of 580 euros due to the tightening of rates of purchase.
La France, qui s'est engagée à atteindre 23 % d'électricité renouvelable en 2020 (contre 13 % l'an passé), reste l'un des pays les moins chers d'Europe pour l'électricité. Mais les sénateurs soulignent que la consommation étant plus élevée, la facture totale se retrouve gonflée par rapport à nos voisins. Les économies d'énergie, le stockage d'électricité et les réseaux intelligents sont considérés comme les pistes pour alléger les factures.France, which is committed to achieve 23% renewable electricity in 2020 (against 13% last year), remains one of the least expensive of Europe for electricity. But senators pointed out that because consumption is higher, the total bill is inflated compared to our neighbors. Energy conservation, electricity storage and smart grids are considered the tracks to alleviate the bills.
NÉCESSAIRE TRANSITION ÉNERGÉTIQUE NEEDED ENERGY TRANSITION
Evoquant "le prix à payer pour amorcer la transition énergétique", la commission estime que "l'augmentation provisoire du prix de l'électricité due aux renouvelables, incontestable, doit donc être prise pour ce qu'elle est : un investissement nécessaire pour l'avenir".Referring to "the price to pay to begin the energy transition" , the Committee considers that "the temporary increase in electricity prices due to renewable is undeniable, and must be taken for what it is: a necessary investment for the future ".
La publication de ce rapport est censée permettre d'éclairer le débat sur la transition énergétique prévu à l'automne par le nouveau gouvernement. Ce débat est une promesse électorale du président de la République, François Hollande, qui s'est engagé à développer les énergies renouvelables de façon à réduire de 75 % à 50 % la part du nucléaire dans la production électrique d'ici à 2025 et à fermer d'ici à 2017 la centrale nucléaire de Fessenheim (Haut-Rhin). Le gouvernement a par ailleurs décidé de limiter la hausse de l'électricité à 2 % au 1er août et réfléchit à un "réforme structurelle" des tarifs de l'énergie qui passerait par des prix progressifs distinguant les consommations essentielles et celles de confort.The publication of this report is supposed to allow an informed debate on energy transition, planned for the autumn by the new government. This debate is an election promise of President of the Republic, Francois Hollande, who is committed to developing renewable energy to reduce from 75% to 50% the share of nuclear in electricity generation by 2025, and close by 2017 the Fessenheim nuclear power plant (Haut-Rhin). The government has also decided to limit electricity price rises to 2% on 1st August and is considering a "structural reform" of rates that would use progressive prices distinguishing between essential consumption and comfort consumption.

This is a consensus report by an all-party committee. I won't comment the PC position, because I'm feeling charitable today.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Jul 19th, 2012 at 06:51:29 AM EST
One of the things that I do not understand is why there is so much talk about offshore when onshore seems a much more interesting approach...
by cagatacos on Thu Jul 19th, 2012 at 07:32:39 AM EST
[ Parent ]
There is considerable and developing local opposition to onshore wind projects. There's a good share of NIMBYism in that, but also environmental concerns about implantation of industrial structures in rural areas, including the impact on the landscape.

If you'd asked people ten years ago about their perception of windmills, there'd probably have been a majority for saying they were esthetically pleasing, a "green" symbol, reassuring because non-polluting or dangerous, etc. Now a lot of people will tell you they disfigure the countryside, are oppressive, make people ill, and are only there to make a pile of subsidy money for rich people. Some incumbent energy industry/ies has/ve been doing a PR job...

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jul 19th, 2012 at 09:01:58 AM EST
[ Parent ]
That in the UK seems to be very much the case, but I wonder (i) is it the same elsewhere? and (ii) are any other reasons (more "rational")?
by cagatacos on Thu Jul 19th, 2012 at 09:11:10 AM EST
[ Parent ]
It's the same in Sweden. No one likes the windmills, except people who live far from them. The solution for us is that someone figured out that Sweden is a sparsely populated country mostly covered in deep forests, where the population density is even lower. So you add 20 metres to the height of the turbines and put them in the forests, where they cannot be seen except from a pretty short distance.

And lo and behold, Swedish forests are owned mostly by massive corporations (google SCA + Statkraft) and cooperatives, so it's easy for the power companies to make deals with them.  

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 11:00:24 AM EST
[ Parent ]
It's the case in rural France.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jul 19th, 2012 at 12:08:30 PM EST
[ Parent ]
"More rational" reasons : as I say, concerns about the environmental impact of industrial structures in previously untouched areas (woods and hills), concern about previously unspoiled landscapes. These may shade into NIMBYism, but not necessarily.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jul 19th, 2012 at 12:11:55 PM EST
[ Parent ]
Hm. There are no "previously untouched areas" in France or the UK. They have been fashioned by human stewardship for thousands of years.

In previous centuries, people had a more pragmatic approach to unsightly windmills. They knew they needed the energy. These days, we have our priorities wrong.

That's not to say that all potential wind sites should be used indiscriminately. Actual nuisance should be reduced. Seeing windmills on the skyline doesn't count as a nuisance.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Jul 19th, 2012 at 12:18:05 PM EST
[ Parent ]
Seeing windmills on the skyline doesn't count as a nuisance.

The right to define a nuisance lays with those who live next to it.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 12:52:42 PM EST
[ Parent ]
Right, and the farmers leasing out a few hundred square meters of field space to allow a turbine to be constructed have spoken with their signatures on the dotted line.
by asdf on Thu Jul 19th, 2012 at 01:38:22 PM EST
[ Parent ]
The people who live next to the turbines are often not the same ones as the people who own the land. For example, the previously mentioned company SCA is erecting turbines close to where some of my friends live, and this company own land equal to more than half the area of the Netherlands, 2.6 million hectares.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Jul 19th, 2012 at 02:25:56 PM EST
[ Parent ]
When I talk about "skyline", I'm talking about five or ten km away, not the people who live next to the windmills, who are interested parties and must be listened to.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Thu Jul 19th, 2012 at 03:39:09 PM EST
[ Parent ]
If the windmill had been invented in India 3000 years ago they night have been studded with multicoloured gods and demons, their basse daily laved with coconut water and festooned in marigolds and tuberose.
Om

"We can all be prosperous but we can't all be rich." Ian Welsh
by melo (melometa4(at)gmail.com) on Thu Jul 19th, 2012 at 01:29:45 PM EST
[ Parent ]
"previously untouched" by industrial installations or industrial agriculture.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jul 19th, 2012 at 03:55:59 PM EST
[ Parent ]
and one which is, naturally, not said loudly, is that the strongest opponents are often the owners of the land on which the wind turbines are NOT situated, who are jealous of the income of the guys with the wind tribunes (which amounts to something like 10,000 euros per year per turbine, for a loss of a few square meters of usable land).

Wind power
by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 12:34:11 PM EST
[ Parent ]
It's one thing that such cncerns exit, but just how widespread are they in the population really? A problem in Britain has always been that a loud anti-wind minority has been assumed to represent a silent majority. Do you have a French poll on the subject?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jul 20th, 2012 at 01:15:09 AM EST
[ Parent ]
For example, a recent poll on "spoiled landscape":

Holiday plans affected by windfarms - Environment - Scotsman.com

A total of 80 per cent of people in the UK - and 83 per cent of Scots surveyed - said the presence of a wind farm would not affect their decision about where to stay when on a holiday or short break in Britain.

When asked if wind farms spoiled the look of the countryside, 52.1 per cent of people in both Scotland and across the UK disagreed, with a further 29.3 per cent in the UK and 28.3 per cent of Scots saying they neither agreed nor disagreed.

Only 18.7 per cent in the UK and 19.6 per cent of Scots said wind farms did spoil the look of the countryside.

The most in-depth poll I saw which focused specifically on local opinion, was also from Scotland nine years ago, and found that people closest to the wind farms are the most supportive:

Public Attitudes to Windfarms: A Survey of Local Residents in Scotland

  • People living close to windfarms (within 20 km) like the areas they live in, mentioning the peacefulness (28%), scenery (26%), rural isolation (23%) and friendly people (20%) as particular strengths. When asked to say what the shortcomings are, most commonly mentioned are a lack of amenities (20%), poor public transport (18%), and lack of jobs (8%). Just five people (0.3%) spontaneously mention windfarms as a negative aspect of their area.

  • Three times the number of residents say that their local windfarm has had a broadly positive impact on the area (20%) than say that it has had a negative impact (7%). Most (73%) feel that it has had neither a positive nor negative impact, or expressed no opinion.

  • People who lived in their homes before the site was developed say that, in advance of the windfarm development, they thought that problems might be caused by its impact on the landscape (27%), traffic during construction (19%) and noise during construction (15%). However, only 12% say the landscape has been spoiled, 6% say there were problems with additional traffic, and 4% say there was noise or disturbance from traffic during construction.

  • ...People living closest to the windfarms tend to be most positive about them (44% of those living within 5km say the windfarm has had a positive impact, compared with 16% of those living 10-20km away). They are also most supportive of expansion of the sites (65% of those in the 5km zone support 50% expansion, compared with 53% of those in the 10-20km zone).

  • Similarly, those who most frequently see the windfarms in their day-to-day lives tend to be most favourable towards them (33% of those who see the turbines all the time or frequently say the windfarms have had a positive impact on the area, while 18% of those who only see them occasionally say the same).



*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jul 20th, 2012 at 01:36:21 AM EST
[ Parent ]
I can't cite a poll offhand, but I have personal knowledge of a groundswell of opposition to windmills in rural areas of SW France and in the Mediterranean coastal strip of Languedoc (flat, uninspiring landscape for the most part). I know people in hilly country who are undoubtedly "green-minded" who are passionately determined to prevent skyline wind projects (and they are succeeding). And the coastal opposition seems to veer towards threats of violence and sabotage (I have seen roadside graffiti threatening the "wind lobbyists" with the "rising anger" of the people).
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jul 20th, 2012 at 03:01:39 AM EST
[ Parent ]
  • Can you say if this is the case of a loud minority or a wider majority?
  • How much connection is there to the UK? Merely import of rhetoric, or organisational connections?
  • How much involved are farmers in wind projects in that region? Not at all, they only lease land, or are given shares in projects, or are there even community projects fully owned by locals?
  • Is your sample big enough to differentiate public opinion in areas where there are windmills already and areas without?


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jul 20th, 2012 at 03:42:09 AM EST
[ Parent ]
Well, I'm not running a poll organisation... ;)

On the first question, I have been surprised by the number of people I've heard express fairly virulent anti-wind opinions. And the movement is wide enough to stop local projects not far from where I live.

I'm aware of no connection with the UK. This movement (as far as I can make out) is endogenous. It took off from the coastal areas.

Afaik farmers (as such) are not so much involved in the hill projects - landowners may be. They can lease and pick up rent. In some cases they can build their own projects (possibly after having bought land for the purpose). But there are also local-authority projects (one of which, locally, see above, is not going to see the light of day because of widespread opposition).

The more you go towards the Med coast, the more built projects there are, and the more virulent the opposition.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jul 20th, 2012 at 03:54:52 AM EST
[ Parent ]
In hilly area, the place to put wind farms is on the crests. And it's also on those crests that the hiking trails go through... hiking trails that provide most if not all of the non-agriculture local business. And hiking on a path transformed into an industrial-strength dirt road for the purpose of building wind mills is not as romantic as on a smaller path !  (not to mention hiking while the windmills are being built).

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Fri Jul 20th, 2012 at 10:08:05 AM EST
[ Parent ]
In hilly areas in Appalachia, the working alternative is to blow the crests sky high in mountain top removal coal mining.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Jul 20th, 2012 at 05:42:15 PM EST
[ Parent ]
No coal has been mined in France for 20 years... And also, there are alternative places to put windmills such as offshore or the Rhône valley which is thoroughly industrialised and has a reasonable wind resource.

The Massif Central is more densely populated than Appalachia, also.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Fri Jul 20th, 2012 at 08:29:38 PM EST
[ Parent ]
It may be that the UK is particularly favorable terrain for that tactic ~ in the US, that may well be successful in holding up deployment of onshore wind in some states, but in a state like Iowa, the farmers want the money from the leases and the state sure as hell better not stand between the farmers and those lease payments.

This kind of issue doesn't even require a Republican farmer to vote for a Democrat ~ just turn out to vote against an anti-wind and for a pro-wind Republican delegate to the county Republican convention.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Jul 19th, 2012 at 09:46:27 AM EST
[ Parent ]
It depends where you are, also. In places like Texas and Colorado, huge wind farms are possible because nobody lives anywhere nearby. In Indiana, they're more visible but still in a rural area. If you start putting them in suburbs, it's going to get ugly fast.
by asdf on Thu Jul 19th, 2012 at 12:31:23 PM EST
[ Parent ]
Well.  I don't think that anyone is planning on putting them in the suburbs.  Nonetheless the largest windfarm in Indiana is in Benton County  (2 projects, ~1000 MW), which is technically in the Lafayette Metro area.  You can actually see the towers from most places in Fowler, which is the county seat.  It doesn't really seem to have stirred up that much protest.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Jul 19th, 2012 at 06:56:52 PM EST
[ Parent ]
The "best" reason for preferring offshore to on is that offshore winds are stronger and steadier.
by jam on Fri Jul 20th, 2012 at 10:55:56 AM EST
[ Parent ]
The North Sea continental shelf is really special. Where else on the planet is there a comparable geological base for offshore wind?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Jul 20th, 2012 at 11:01:45 AM EST
[ Parent ]
Maybe Indonesia?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 20th, 2012 at 11:56:43 AM EST
[ Parent ]
Some candidates:

North Sea
Caspian Sea
Indonesia/New Guinea/Norhtern Australia
New Zealand
East China Sea
Orhotsk Sea
Bering Straits
Falklands
Hudson Bay

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Fri Jul 20th, 2012 at 12:41:57 PM EST
[ Parent ]
Lake Erie.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Jul 20th, 2012 at 05:40:35 PM EST
[ Parent ]
Thats why there is sabre rattling about the Falklands!

(No, not really.)

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Sun Jul 22nd, 2012 at 08:04:10 AM EST
[ Parent ]
beyond geology is to be near a significant (and credit worthy) load center...

That seems to take most of your list off - leaving possibly New Zealand and (some of) the Great Lakes. The North East of the Us is probably the only other area which makes sense: otherwise Japan will make a lot of sense for floating technology, once it's made to work at a decent cost.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Jul 22nd, 2012 at 05:17:18 PM EST
[ Parent ]
New zeeland doesnt really have much use for... any. power sources other than conventional hydro, tough. It is essentially "Norway, southern hemisphere edition" as far as hydro resource goes.
by Thomas on Mon Jul 23rd, 2012 at 02:53:53 PM EST
[ Parent ]
Except local opposition stopped a number of projects, which were more akin to Island's; as is the presence of geothermal. Wind does have a chance, especially as New Zealand has some of the world's best on-shore sites (capacity factors like for North Sea off-shore wind farms or higher).

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jul 23rd, 2012 at 03:15:57 PM EST
[ Parent ]
Seems like Shanghai would be a significant and credit worth load center if the manufacturer of the wind turbines paid their workers in ¥RMB.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 03:23:43 PM EST
[ Parent ]


Austerity can only be implemented in the shadow of a concentration camp.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 03:30:28 PM EST
[ Parent ]
So long as the Chinese have an economic need to discount the Yuan Renminbi against the dollar, not quite as strong a load center in US dollars, but if they decide to shift the weight of their basket-peg away from the US$, then certainly, those paying workers in US$ as well.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 03:37:25 PM EST
[ Parent ]
It seems to me that printing RMB to buy dollars to pay for a wind farm would depress the RMB against the US$ just as effectively as printing it to buy Uncle Sam's IOUs and stockpile them at the central bank. This not so? And if it is not so, then why aren't more African countries printing local currency and buying out Uncle Sam with it?

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 03:42:13 PM EST
[ Parent ]
The way that a nation avoids becoming exposed to an exchange rate meltdown a la many Southeast Asian nations in the Asian Financial Crisis is avoiding excessive debt denominated in foreign currency.

Which is why the parenthesised part of "a significant (and credit worthy) load center" brings the country of manufacture into play: in what currency is the credit being created? If its being created in Yuan Renminbi, then Shanghai is both a substantial and a quite credit worthy load.

But if the credit is drawn on an electrical utility, rather than on the Chinese government, the fact that China plays neo-mercentalist games with their currency raises reasonable suspicions about the multiple-decade credit worthiness of an enterprise that sells in Yuan Renminbi, if its loan is denominated in € or ¥ or US$.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 04:00:31 PM EST
[ Parent ]
The way that a nation avoids becoming exposed to an exchange rate meltdown a la many Southeast Asian nations in the Asian Financial Crisis is avoiding excessive debt denominated in foreign currency.

Quite. But the Chinese government has enough reserves to cover the gross Chinese hard currency debt, so there is no overriding need to continue to depress the exchange rate by adding to these reserves rather than by buying real stuff. If you buy the real stuff you want with dollars bought with your newly minted currency, it will also depress the exchange rate.

But if the credit is drawn on an electrical utility, rather than on the Chinese government, the fact that China plays neo-mercentalist games with their currency raises reasonable suspicions about the multiple-decade credit worthiness of an enterprise that sells in Yuan Renminbi, if its loan is denominated in € or ¥ or US$.

I'm not sure how you get to that conclusion, unless you believe that the Chinese government will further depress the exchange rate at some point? The sign of the exchange rate pressure looks wrong for a simple cessation of mercantilist gamesmanship to impair the solvency of such an entity.

It looks to me like political risk would be a lot more significant than vanilla currency risk over a 20-30 year period.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 04:16:39 PM EST
[ Parent ]
It looks to me like political risk would be a lot more significant than vanilla currency risk over a 20-30 year period.

In what way, shape or form are they in any way distinct and separable for a country that is pegging its exchange rate? The exchange rate risk is a policy risk, combined with a risk of losing a capacity to enforce policy.

Substantial credit risks here are (1) the exchange rate risk and (2) the default risk of the actual borrower. From the perspective of US-based consortium raising funds in US$ capital markets, that default risk has to be seen as quite substantial. By contrast, for a Chinese-based consortium raising funds in China, converting what foreign exchange they require on a current rather than capital basis, the default risk seems likely to look much better compared to other investment opportunities in China.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 06:28:21 PM EST
[ Parent ]
I was thinking of currency risk in terms of loss of ability to maintain a peg and subsequent movement of the floating rate.

Of course, loss of ability to maintain the peg is not always distinguishable from loss of willingness to maintain the peg. But it usually is, and I think it is useful to distinguish between the risk of a foreign government deciding to screw your investment over and the risk of a foreign government being unable to decide not to screw your investment over. The latter is a risk which can be forecast with some delicacy. The former is far closer to a Knightian uncertainty.

I find that it usually pays dividends to separate those two sorts of risk.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jul 24th, 2012 at 04:26:31 AM EST
[ Parent ]
In the abstract I guess, but the current pegging regime of China is to peg at a discount against a basket of foreign currencies, which eliminates the risk that they will be unable to maintain the peg. The risks that a creditor raising funds in US$ and having their electricity bought in Yuan Renminbi faces are (1) that China opts to increase the discount at which they are pegging, and (2) that China opts to reduce the weight of the US$ in the currency basket that they peg against, opening up the Yuan Renminbi / US$ exchange rate to greater volatility.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Jul 24th, 2012 at 06:40:19 PM EST
[ Parent ]
Sure, Shangai is a real load center, problem is that they have access to 2c/kWh coal-fired power, so there's not going to be a case for offshore wind until that changes. I would not trust a government that says "I'll pay you 12c/kWh for 15 years if you do offshore wind" in such circumstances, especially not China's.

Even Russia is not able to sell gas to China given how cheap coal has been.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Tue Jul 24th, 2012 at 05:10:46 AM EST
[ Parent ]
Also - rather relevantly to this thread, China has astonishingly low construction costs for fission reactors. Largely because they have a very experienced heavy construction sector, which keeps the projects on time and on budget. At this point, odds are fairly good that the first EPR to sell power will be selling it to Chinese consumers - Now, whether this is a viable path to a low-carbon china depends on how much they could scale up their build programme before running into bottlenecks.
by Thomas on Tue Jul 24th, 2012 at 05:32:09 PM EST
[ Parent ]
Yes, given that we can be reasonably confident that the current rate of domestic coal production cannot be maintained through to the end of the current decade.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Jul 24th, 2012 at 06:42:30 PM EST
[ Parent ]
European Tribune - Is nuclear energy more expensive than offshore wind?
offshore wind, which currently benefits from tariffs in the 120-130 GBP/MWh range in the UK

That's ~160€/MWh. Is the French Senate estimate of 220€/MWh realistic? Are there reasons why UK offshore would be cheaper?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jul 19th, 2012 at 08:44:57 AM EST
[ Parent ]
Wouldn't the UK have access to the North Sea resource?

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Jul 19th, 2012 at 09:47:37 AM EST
[ Parent ]
True - the UK has better offshore wind resources than France.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Thu Jul 19th, 2012 at 09:54:10 AM EST
[ Parent ]
Jerome can confirm, but I'd assume that the main drivers for differences in cost per MWh are in the denominator ~ say, (arbitrary figures) average 40% yield vs average 30% yield. Though there'd also be an establishment cost, which could result in a country with more installed capacity being further down a degressive feed-in tariff schedule.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Jul 19th, 2012 at 10:00:53 AM EST
[ Parent ]
It's the wind levels on one side, and the balance of project depth and distance to shore (which depends on what your coastal areas is like). The North Sea is unique in not being deep (not beyond 40m and often quite less) over hundreds of square miles. So you don't need bigger foundations as you go further out, only a longer cable. That has a real impact on the cost side.


Wind power
by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 12:32:29 PM EST
[ Parent ]
well... the French government is trying to kick-start a homegrown offshore wind industry (against the spirit of the EU which forbids industrial policy of course). They apparently didn't have any such concern in the UK. This presumably adds a bit of cost, because you're talking about creating an industry practically from scratch.

The UK now presumably has a certain amount of sunk-cost infrastructure for servicing the building of offshore farms, lowering the cost of additional farms. I guess.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Jul 19th, 2012 at 09:53:23 AM EST
[ Parent ]
220 EUR/MWh is on the high side, given that bids were supposed to be below 175 EUR/MWh in most zones (200 EUR/MWh in a couple) and that you need to add about 20 EUR/MWh for transmission costs.

But yes, the wind resource is not as good off the French coasts as it is off the UL coasts.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 10:02:21 AM EST
[ Parent ]
On the technical side, how are the measurement campaigns set up when the masts should be offshore? Do you build a platform just of the mast offshore or do you trust data points in the vicinity (lighthouses?)?

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine
by UnEstranAvecVueSurMer (holopherne ahem gmail) on Thu Jul 19th, 2012 at 02:57:49 PM EST
[ Parent ]
You don't actually need onsite data offshore - correlation with met data from not-too-distant sources is good enough - offshore wind is predictable over long distances and you can use mesoscale studies (modelisation done using NOAA data for instance).

The one tricky issue offshore is wake effect (i.e. the impact of one row of turbines on the production of the row "behind" them) as it can be quite significant (10-30% for individual rows) in some wind directions - both from the wind fair itself as from neighboring ones.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 04:12:28 PM EST
[ Parent ]
Thanks. Some further questions if you have the time...

Do you use raw NOAA data or GFS + validation using other meteorological models? GFS afaik underestimates wind speeds, especially for higher speeds, so I would be curious to see how one corrects for that.

As far as wake losses are concerned, I suppose your regular 2.5/5 diameter rule does not apply... but why is that? Is it because wake effects do not move linearily with rated power?

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine

by UnEstranAvecVueSurMer (holopherne ahem gmail) on Thu Jul 19th, 2012 at 04:27:25 PM EST
[ Parent ]
What 2.5/5 diameter rule?

Spacing is determined by the energy-weighted wind rose.  But it takes anywhere from 12 to >20 diameters before upwind turbulence has decayed and boundary layer mixing has replenished the energy taken out by the upwind row.

No project developer uses such spacing today, which puts extra load cycles on the downwind turbines in any direction.. There should be a happy medium, with well understood tradeoffs between energy capture and excessive load avoidance. But proper spacing greatly increases cable costs as well, so... it's often not under major consideration.

We'll have to wait for more operational data from the low rpm greater diameter WTs to see how great the problem is before there's a chance of establishing a rule of thumb. This can also be an underestimated problem between projects, when they are clustered with a narrow shipping lane between.

The science is obtained incrementally.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Fri Jul 20th, 2012 at 08:06:20 AM EST
[ Parent ]
Offshore these days is typically spaced 7 diameters apart in the prevailing wind direction and 5 in the other direction.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 20th, 2012 at 12:16:24 PM EST
[ Parent ]
You do get higher correlation by having a mast to use as a base station. The most expensive ones are complete research stations, which can be used for wave and current measurement and environmental issues. They can run over €3M, which can be shared between projects. Germany has built two in the North Sea and one in the Baltic. FINO 1 was operational since 2003, and FINO 3 since 2009.

You can visit FINO 1, 2, and 3 on the web, starting in english HERE.  You can get live speed data and images. FINO 3 cost €12M which includes years of research and measurement projects. It measures to 105m, with a 15m lightning rod taking it to 120m.

There are less expensive versions primarily aimed and wind and wave measurement. The technology of floating stations is gradually gaining acceptance as well, or at least entering the market, usually LIDAR or SODAR based. Here's a test of one model:

I believe many of the larger projects will need to have a station, because there is no substitute for onsite data. This can help with power curve verification as well as wake analysis, so should prove cost effective, especially if shared.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Thu Jul 19th, 2012 at 05:03:19 PM EST
[ Parent ]
yes - which means you don't need wind masts at every project location, which is what I meant.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 20th, 2012 at 12:19:01 PM EST
[ Parent ]
Yup. And the FINO masts are a perfect example of valid government funded infrastructure (which you comment on often), which provides significant value to project financing. The German masts were funded by the government, the EU, and private research groups on the studies.

When such base stations are established, then short-term floating LIDAR and turbine sited measurements can be very well-correlated.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Fri Jul 20th, 2012 at 01:01:49 PM EST
[ Parent ]
The most depressing part, especially in the way it was reported in the French media, is to see EELV (Greens!) senators (unwittingly?) propagate the message that, of course, the price of electricity will double by the end of the decade, because of the "heavy investments in renewable energy", feed-in tariffs and other subsidies. Talk about shooting oneself in the foot...

If you wanted to ingrain the perception that "renewable energies = taxes and subsidies" even deeper in the French public, you couldn't have done any better. This is the not so subtle message that has been pushed by conventional wisdom and corporate media; many ordinary folks now believe that solar or wind are at best, a speculative bubble or even a scam to subsidize their hard won tax euros to politically connected lobbies.

Of course a large part of that perception is 180 degrees from the reality, but never mind, this is that very perception that's going to shape the upcoming political debates in the near future (just like: we must reduce state spending to reduce state debt level).

Many people's reaction to these news are along the lines: forget about solar and wind mills (un-serious), what we need is more nuclear power plants (serious).

by Bernard on Thu Jul 19th, 2012 at 03:49:40 PM EST
[ Parent ]
The main problem with Le Monde's write-up, and it's not EELV's fault, is that they quote prices for nuclear which, although higher than those previously quoted, manifestly refer to existing nuclear capacity. Whereas the renewables pricing is manifestly about new build; thus, we are invited to compare apples to oranges.

Having consulted the report itself, it mentions the projected price of electricity from new build (EPR reactors) at 70 to 90 euros/MwH.

(It also mentions in passing, that the price guarantee demanded in the UK by EDF, of the order of 90 to 110, is higher because of the merit order effect, i.e. they are afraid that demand for nuclear electricity would be uneven because of renewables!)

(I note that you cite the error made by most of the press, equating a 50% increase in prices with a doubling, i.e. 100% increase... innumerate journalists...)

The courageous answer for EELV, I suppose, is to do like the PC... deny reality because it's inconvenient.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Jul 19th, 2012 at 05:01:05 PM EST
[ Parent ]
Indeed, it's how the Senate report has been spun in the mainstream media: "doubling" of electricity bills (elementary arithmetic be dammed), selective quoting of EELV senators attributing some of the reasons to investments in renewable energy, little mention (if any) of the cost of nuclear that's not so cheap after all...

No, denying reality is neither courageous neither good strategy, unless you're a rabid right-winger of course. But for those of us who favor fact & reality based policy, the reality is not always "inconvenient": haven't we read right here that wind "makes power too cheap" and that, all things considered, nuclear energy is not so cheap, to the point where investors start backing off?

Those are certainly worthy points to bring into the debate, especially for EELV. Instead, the perception that's likely to remain for the overall French public is that wind and solar are costly and "un-serious" "gadgets" for tree-huggers. Not a smart move, I'd think...

by Bernard on Sat Jul 21st, 2012 at 08:22:54 AM EST
[ Parent ]

U.K. Seen Doubling Power Price To Guarantee New Reactor: Energy

The future of the U.K.'s nuclear industry will be decided on one number: the price the government's willing to guarantee Electricite de France SA will get for generating atomic power.

EDF and government officials will negotiate the so-called strike price for new nuclear power plants by the end of the year. To ensure the Paris-based utility makes a final decision on a new reactor in southwest England, the U.K. must set a price between 95 pounds ($148) and 105 pounds a megawatt-hour in 2020, double the level power trades at today, according to Bloomberg New Energy Finance.

(...)

When negotiating with the department of energy, EDF will argue that costs of nuclear have increased significantly given delays at reactor construction sites in France and Finland, as well as post-Fukushima safety precautions, according to Bloomberg New Energy Finance analyst Brian Potskowski.

Increased Capital Costs

Based on increased capital costs and a rate of return of 10 percent to 11 percent, the company will need a guaranteed power price of 95 to 105 pounds, he said. The upper limit on this strike price is 130 pounds, which is the compensation level for offshore wind, he added.

"If the U.K. government really wants new nuclear built, there aren't any other options on the table other than EDF and Centrica," Daniel Grosvenor, head of Deloitte LLP's nuclear team in London, said in a telephone interview. "All the utilities are going to look at this as a robust investment decision. No one is going to take a punt."

"robust" is one of these new corporate buzzwords...


Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jul 19th, 2012 at 10:43:20 AM EST
Heh. I say let the free market decide! That'll surely result in no plants at all getting built (at best some gas plants), and then we'll get an actual phyisical lack of power, rolling blackouts and enormous price spikes which create "incentives" to build new plants, which will come online 5-10 years after the disaster strikes, while in the meantime rolling blackouts remain and all power-intensive industry is forced out of the country. :)

Markets yay, planning boo!!!11

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Jul 19th, 2012 at 11:06:14 AM EST
[ Parent ]
As usual, this analysis seems to focus on the supply side without appreciation for the demand side. If there were a 100% conversion to wind power, side effects related to distribution and availability factor would be obvious, but since it's only a partial conversion, it seems as if these costs are overlooked.

Some demand adjustments are inexpensive such as scheduling. Others are more expensive, such as the distribution network. Others are really expensive but accounted for differently, such as household battery storage. If you have x% penetration by wind compared to y%, these costs change.

It doesn't seem right to hold the demand side of the equation constant while trying to optimize the supply side...

by asdf on Thu Jul 19th, 2012 at 12:59:21 PM EST
Europe's offshore wind power capacity up 50% in a year | EurActiv

Europe's offshore wind capacity soared by 50% in the first half of 2012, compared to a year before, figures from the European Wind Energy Association (EWEA) show.

The association's `key trends and statistics' report says that 132 new offshore wind turbines, providing 523 megawatts (MW) of power were fully connected to the grid in the first six months of 2012, compared to 348.1 MW in the same period in 2011.

The figures for wind turbine builds were even more impressive with 103 erected in five wind farms since January - a 95% increase on the equivalent period in 2011.

The average size of wind turbines grew to 4MW, up 14% on last year, and 30% more turbines were connected to the grid.

Christian Kjaer, chief executive of EWEA, hailed the news as a triumph in the face of economic adversity.

"Offshore wind power is increasingly attracting investors, including pension funds and other institutional and corporate investors," Kjaer said in a statement. "But it would be good to see more activity in southern Europe where jobs, investments and growth are desperately needed."

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jul 20th, 2012 at 03:17:15 AM EST
Deepwater: High Temps Enable Offshore Wind To Produce Massive Amount Of Electricity

Deepwater Wind says its proposed Deepwater Wind Energy Center (DWEC) could reach maximum output on the hottest days of summer in the Northeast - coinciding with the time of highest demand.

(...)

According to data from AWS Truepower, had the DWEC - a 900 MW offshore wind farm planned 30 miles east of Montauk and 20 miles south of the Massachusetts and Rhode Island mainland - been operating, the project would have reached its maximum output during the afternoons of both June 20 and June 21, when the heat wave was at its peak.

While the wind farm is projected to produce at an average of approximately 45% capacity over the course of a full year, Deepwater says its output could have been in the range of 65% to 90% capacity during most of the hottest hours of the heat wave.

"One of the great benefits of offshore wind power is that its output surges during those hot afternoons in the dog days of summer," says Bill Moore, CEO at Deepwater Wind, who attributes the power surge to the so-called "sea breeze" effect.

"When temperatures rise onshore and heat the air, that hot air rises," Moore explains. "The resulting drop in air pressure onshore causes cooler air from the ocean to accelerate toward the coast. Those cooler ocean breezes also produce steady wind that powers our offshore wind turbines."



Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 20th, 2012 at 06:36:55 AM EST
Hi Jérôme, interesting bit.

Sometime ago I made a back of the envelope calculation on offshore wind costs and got a figure well below 120-130 GBP/MWh. This was based on info you posted on one of the north sea projects, which I can't find at this time :). In any case, this figure is a feed-in tariff, do you have an idea of the real cost? Or maybe how long it thanks for a project to reach break-even with such tariff?

Vencit omnia veritas.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Fri Jul 20th, 2012 at 07:56:02 AM EST
Feed-in tariffs allow investors to get a return on their investment at a lowish rate (7-8% for onshore wind, for instance), taking into account the leverage that can be put in place (again ,for onshore, 80% of debt at 5% cost or so).

Offshore, return expectations are a bit higher (but not that much) and debt is a bit more expensive so you get a average cost of capital at 8-9% rather than 6-7% for onshore.

Tariffs typically last 15 years but can be less.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jul 20th, 2012 at 12:21:10 PM EST
[ Parent ]
But that was in the good old days when the country could - and knew how to - do industrial policy, and could fund nuclear power plants using sovereign discount rates (5-8% over 30-40 years) rather than private investor discount rates (10-15% over 15-20 years).

Welcome to the wonderful world of not having a sovereign currency.  This will ultimately be the Achilles's heel of the EU: sovereigns without sovereign currencies, and a sovereign currency without a sovereign.

by rifek on Sat Jul 21st, 2012 at 09:41:38 PM EST
by Jerome a Paris (etg@eurotrib.com) on Sun Jul 22nd, 2012 at 05:17:56 PM EST


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