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Nuclear `hard to justify', says GE chief

Nuclear power is so expensive compared with other forms of energy that it has become "really hard" to justify, according to the chief executive of General Electric, one of the world's largest suppliers of atomic equipment.

"It's really a gas and wind world today," said Jeff Immelt, referring to two sources of electricity he said most countries are shifting towards as natural gas becomes "permanently cheap".




Wind power
by Jerome a Paris (etg@eurotrib.com) on Tue Jul 31st, 2012 at 05:14:31 AM EST
Interesting article. If you follow to the Bloomberg article referred there, it can be read:


From 2004 to Q3 2008, the price of PV modules remained approximately flat at $3.50-$4.00/W,
despite manufacturers making continuous improvements in technology and scale to reduce their
costs. Much of this can be attributed to the fact that the German, and then Spanish, tariff
incentives allowed project developers to buy the technology at this price, coupled with a shortage
of polysilicon that constrained production and prevented effective pricing competition.
The 18
largest quoted solar companies followed by Bloomberg made average operating margins of
14.6%-16.3% from 2005 to 20083.

Consequently, both polysilicon companies and downstream manufacturers expanded rapidly.
When the Spanish incentive regime ended abruptly at the end of September 2008, global demand
stayed roughly flat at 7.7 GW in 2009, from 6.7 GW in 2008, while polysilicon availability
increased at least 32%; enough to make 8.5 GW of modules, with an additional 1.6GW of thin
film production. As a consequence of this sudden need to compete on price, wafer and module
makers gave up some of their margins, and the price fell rapidly from $4.00/W in 2008 to
$2.00/W in 2009.
The ability of manufacturers to drop their prices by 50%, and still make a
positive operating margin, was due to the reductions in costs achieved over the previous four
years, driven by scale and advances in wafer, cell and module manufacturing processes, as well as
to improved performance resulting from better cell efficiencies and lower electrical conversion
losses (Wesoff, 2012).

(bold mine)

This can either be seen as an argument for a "free-market" approach, or alternatively the state gives the initial boost to help establish industrial critical mass and then market forces can operate. A bit like the "Internet" model where the (US) state reasearched and built the infrastructure and then, with critical mass, the market could then enter.

If it is technologically underdeveloped and capital intensive, the initial boost might be critical.

by cagatacos on Tue Jul 31st, 2012 at 06:55:36 AM EST
[ Parent ]
This can either be seen as an argument for a "free-market" approach, or alternatively the state gives the initial boost to help establish industrial critical mass and then market forces can operate.

Or, it can be seen as a negation of the "free-market" frame: the state and the market were both present throughout. The part I would have bolded was this:

The ability of manufacturers to drop their prices by 50%, and still make a positive operating margin, was due to the reductions in costs achieved over the previous four years, driven by scale and advances in wafer, cell and module manufacturing processes

The cost reductions due to scale were the result of large volumes, thanks to the framework set by the state (the stable markets and the feed-in tariffs). The technology development was due to competition between producers on this separated market.

The uneven market price reduction you describe is more indicative of haphazard state policy than any transition from some state-dominated to a market-dominated regime. Contrary to what the article claims, the Spanish incentive regime didn't end, it was only changed with massive and differential rate reductions, crashing the market and resulting in an oversupply situation on the world market. The article also omits to mention degression, that is the (usually annual) reduction of feed-in tariffs, a field where Germany and Spain followed a different philosophy: Germany had pre-set degression rates in a law, Spain had rates re-set every year by government decree.

The Spanish feed-in law produced a bubble because it was high enough to make residential rooftop profitable but offered the same rate for large on-ground plants with few restrictions on siting, thus the latter sub-market drew venture capital with high profits. It was right to burst this bubble, but it would have been better to create an orderly transition with multiple smaller rate reductions rather than one big one.

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

by DoDo on Tue Jul 31st, 2012 at 07:17:03 AM EST
[ Parent ]
In manufacturing, as in so much, scale matters.

A.  Lot.

Necessary fixed costs of plant and equipment are more or less the same for manufacturing one widget per week as one widget per hour.  Sales price need to cover 52/year versus 2,000/year will obviously have to be greater in the former.

 

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Aug 2nd, 2012 at 11:44:47 AM EST
[ Parent ]
on what planet is 15% growth (6.7 GW to 7.7 GW) "roughly flat"? In the same period when global oil usage grew at -1%?
by jam on Tue Jul 31st, 2012 at 09:39:48 AM EST
[ Parent ]
Natural gas 'permanently cheap' is bollocks.

The price should be held globally at a level necessary to destroy demand, and as much of the resulting surplus as possible should be invested in renewable energy, and in the cheapest energy of all - energy saved.

In order to do this you need to literally monetise energy. Deficit financing and funding simply will not cut it.

IMHO one of the Big Trades of the 21st century will be the value of IP and Knowhow exchanged for the value of carbon fuel saved.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Jul 31st, 2012 at 07:50:03 AM EST
[ Parent ]
In an offshore article about Vattenfall losing €5.6M from the Thanet project offshore cable glitsch (now solved), i found this:


Vattenfall also announced today that it has submitted an application to Sweden's radiation authority for permission to develop plans for new nuclear power stations. Chief executive Løseth emphasised that the company has not made any binding decisions to pursue new nuclear. "We are just investigating building new nuclear in the Nordic market," he said, adding that there are other options for replacing lost capacity when Sweden's existing nuclear power stations are decommissioned. These options include additional renewables capacity.


"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Tue Jul 31st, 2012 at 10:49:46 AM EST
[ Parent ]

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