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As the energy is essentially free, renewable electricity costs, like those of nuclear electricity, are almost entirely dependent on the up-front construction costs and the method of financing these.  Minimising the initial investment, relative to the expected energy yield, is critical to commercial viability.  But revenue is also dependent on when, and where, the energy can be delivered to meet the demand patterns of energy consumers.

For example, if it requires four times the capital investment in equipment to extract one megawatt hour (1 MWh) of useable electricity from sunlight, as compared to extracting it from wind, engineers need to find ways of quartering the cost of solar capture and conversion equipment; or increasing the energy converted to electricity fourfold; to make solar directly competitive.

Similarly if a technology produces electricity when consumers don’t want it; or produces it so far from the consumer that most of it is lost in transmission; then the revenue available will be proportionately less than a similar investment that better matches demand; or is located close to where it is consumed.

 

In most developed nations, including Australia, electricity is a traded product with the market price fluctuating from hour to hour; day to day; season to season; in five minute intervals, according to supply and demand.

 

Without government intervention in the market, supply and demand determines the return that is available to an investment; while the engineering solution and qualities of the resource determine the energy that a particular investment can theoretically deliver.

 

Before intervention, current renewable technologies, with the exception of hydro- electricity, are substantially less competitive, in terms of return on investment, than fossil fuels or nuclear electricity.  It follows that wherever alternatives are in use there are other factors at play: such as the cost or practicality of a grid connection; or a government intervention in support of renewables.

In Australian electricity markets this intervention takes the form of Renewable Energy Certificates (RECs) described later. Other governments have other instruments such as cap and trade carbon reduction schemes; carbon taxes; energy buy-back schemes; and tax breaks; to achieve similar ends.

 

In Australia grid losses are of particular concern. Australia’s population of just over 21 million is highly concentrated in a few large cities; just eight cities accounting for over 70% of the population. The largest Sydney; Melbourne; Brisbane; Perth and Adelaide account for 63% but are separated by distances of between 670 and 3,600 km; ‘as the crow flies’. This is similar to the continental USA and a substantially greater area than the entire EEC.

Transmitting electricity over such distances results in significant losses.  The market price received by a generator is therefore influenced by transmission costs and the point on the grid into which electricity generated is injected.  A renewable energy project remote from the points of high demand will receive a lower price than one adjacent. 

Very high voltage DC (HVDC) technology can reduce the net grid loss problem over long distances, and this is in use for links to Tasmania and South Australia, but it adds at least two costly voltage translations and the additional capital cost, together with the low capacity factor of wind and solar, precludes its use in most, if not all renewables dedicated situations.

 

Even with the present substantial and probably increasing REC cross-subsidies from electricity consumers, transmission factors limit the economic distance an exploitable wind or solar resource can be from the main electricity grid and electricity consumers.

 

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Travel

Bridge over the River Kwai

 

 

In 1957-58 the film ‘The Bridge on the River Kwai‘ was ground breaking.  It was remarkable for being mainly shot on location (in Ceylon not Thailand) rather than in a studio and for involving the construction and demolition of a real, fully functioning rail bridge.   It's still regarded by many as one of the finest movies ever made. 

One of the things a tourist to Bangkok is encouraged to do is to take a day trip to the actual bridge.

Read more: Bridge over the River Kwai

Fiction, Recollections & News

Oppenheimer

 

 

When we were in Canada in July 2003 we saw enough US TV catch the hype when Christopher Nolan's latest ‘blockbuster’: Oppenheimer got its release.

This was an instance of serendipity, as I had just ordered Joseph Kannon’s ‘Los Alamos’, for my Kindle, having recently read his brilliant ‘Stardust’.  Now here we were in Hollywood on the last day of our trip. Stardust indeed!  With a few hours to spare and Wendy shopping, I went to the movies:

Oppenheimer, the movie - official trailer

 

Read more: Oppenheimer

Opinions and Philosophy

Electricity price increases

 

 

14 April 2011

New South Wales electricity users are to suffer another round of hefty price increases; with more to come.

The Independent Pricing and Regulatory Tribunal (IPART) has announced that electricity prices for the average New South Wales resident will increase by 17.6 per cent from July.  Sydney customers will pay on average about $230 more each year, while rural customers will face an extra $316 in charges.  IPART says it is recommending the increases because of costs associated with energy firms complying with the federal government's Renewable Energy Target (RET).  The RET requires energy firms to source power from renewable sources such as solar or wind.

What is this about and how does it relate to the planned carbon tax?

If you want to know more read here and here.

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