Electricity prices - what next?

There seems to be a lot of missing the wood for the trees in some of this discussion. Not helped by the largely rhetorical missives from our climate-change-denialists.

Some Themes.

1. The UK gas price/electricity price scenario is highly dependent on the unique pseudo-market structure of the UK's end-user supply. Worth reading on this score is James Meek, On the Boil, London Review of Books 43(19) 2021-10-07 https://www.lrb.co.uk/the-paper/v43/n19/james-meek/on-the-boil 

I live in Germany. The head of the city's power supply company was interviewed in the paper and regrets that the cost of electricity will be going up by 16% in 2022. They are required to commit to prices (gas and electricity) for the year, in advance. Of course they hedge. There are nominally cheaper companies who try to trade on the spot prices. You can go with them if you want: like choosing to day-trade or to put your money in market-tracking funds. 

I know, right now, because of my usage history, how much power (gas + electricity) will cost me in 2022, if I care to take the couple of hours to do a bit of arithmetic. 

2. What is written here about costs of generating electricity from coal, gas, nuclear, wind, PV rarely considers the externalities. If you factor them in, according to best guesses, the calculations come out somewhat differently. William Nordhaus won the Nobel Memorial Prize in Economics in 2018 for this. His book The Climate Casino (Princeton U.P. 2013) is well worth engaging with. 

Of course, he takes the established climate science seriously, so our denialists are not likely to agree with his sums. The methods are key. 

3. Reengaging with nuclear seems to attract some. There are two major externalities which have not been dealt with satisfactorily in the 70 years of the industry's existence. One is waste disposal. There is a lot of it; it needs to be put somewhere safe for 10,000 years; there is no generally-accepted proposal for how or where, and there has never been. Note that this issue does not go away with SMRs. The other is the cost of worst-case scenarios. TMI turned out to be pretty small-fry, and it is fairly straightforward (though not uncontroversial) to cost it using standard environmental-risk techniques. Costing Chernobyl, even saying you only care about human life and picking your favourite SVL, is all but impossible because of the various estimates of deaths in various reports, which differ by two to even three orders of magnitude. And that is not even beginning to count environmental degradation. In contrast, costing Fukushima via SVL is easy: €0. Nobody is said to have died. However, best cost estimates appear to be somewhere between $200+bn (the official government estimate of cost) and $470-660bn (Japanese Centre for Economic Research) https://www.scientificamerican.com/article/clearing-the-radioactive-rubble-heap-that-was-fukushima-daiichi-7-years-on/ and even higher (nobody seems yet to be counting what all this did to Pacific Ocean ecosystems -- or will do, when all that contaminated water is released into it). Safety worries do not go away with SMRs. Indeed, they might even increase, when you have to spread competent staff and operations amongst many sites (think of cybersecurity assurance for control systems. Cybersecuring five plants is easier on almost any measure than cybersecuring five hundred).

There seems to be a lot of missing the wood for the trees in some of this discussion. Not helped by the largely rhetorical missives from our climate-change-denialists.

Some Themes.

1. The UK gas price/electricity price scenario is highly dependent on the unique pseudo-market structure of the UK's end-user supply. Worth reading on this score is James Meek, On the Boil, London Review of Books 43(19) 2021-10-07 https://www.lrb.co.uk/the-paper/v43/n19/james-meek/on-the-boil 

I live in Germany. The head of the city's power supply company was interviewed in the paper and regrets that the cost of electricity will be going up by 16% in 2022. They are required to commit to prices (gas and electricity) for the year, in advance. Of course they hedge. There are nominally cheaper companies who try to trade on the spot prices. You can go with them if you want: like choosing to day-trade or to put your money in market-tracking funds. 

I know, right now, because of my usage history, how much power (gas + electricity) will cost me in 2022, if I care to take the couple of hours to do a bit of arithmetic. 

2. What is written here about costs of generating electricity from coal, gas, nuclear, wind, PV rarely considers the externalities. If you factor them in, according to best guesses, the calculations come out somewhat differently. William Nordhaus won the Nobel Memorial Prize in Economics in 2018 for this. His book The Climate Casino (Princeton U.P. 2013) is well worth engaging with. 

Of course, he takes the established climate science seriously, so our denialists are not likely to agree with his sums. The methods are key. 

3. Reengaging with nuclear seems to attract some. There are two major externalities which have not been dealt with satisfactorily in the 70 years of the industry's existence. One is waste disposal. There is a lot of it; it needs to be put somewhere safe for 10,000 years; there is no generally-accepted proposal for how or where, and there has never been. Note that this issue does not go away with SMRs. The other is the cost of worst-case scenarios. TMI turned out to be pretty small-fry, and it is fairly straightforward (though not uncontroversial) to cost it using standard environmental-risk techniques. Costing Chernobyl, even saying you only care about human life and picking your favourite SVL, is all but impossible because of the various estimates of deaths in various reports, which differ by two to even three orders of magnitude. And that is not even beginning to count environmental degradation. In contrast, costing Fukushima via SVL is easy: €0. Nobody is said to have died. However, best cost estimates appear to be somewhere between $200+bn (the official government estimate of cost) and $470-660bn (Japanese Centre for Economic Research) https://www.scientificamerican.com/article/clearing-the-radioactive-rubble-heap-that-was-fukushima-daiichi-7-years-on/ and even higher (nobody seems yet to be counting what all this did to Pacific Ocean ecosystems -- or will do, when all that contaminated water is released into it). Safety worries do not go away with SMRs. Indeed, they might even increase, when you have to spread competent staff and operations amongst many sites (think of cybersecurity assurance for control systems. Cybersecuring five plants is easier on almost any measure than cybersecuring five hundred).

And one more, I guess. I don't understand the technical deal with house power supplies adapting to heat pump + EVs. Run another line in from the road, separate box, new wiring for heat pump + EV chargers. This may all be under the control of organisations that currently don't want to be bothered to do this. But this is not a technical problem. I also don't see why it should cost more than, say, £4K (let alone £15K). I was quoted (the equivalent of) less than that to run separate gas+electricity lines to a part of my building which I was considering supplying separately a couple of years ago; and that involved 20-30m to the building itself.

Add £4k to the cost of a heat pump and EVCP and they don't look very cost-effective. I have looked at the cost of replacing my CH boiler with a condensing one and the pay-back period was up to 50 years. It certainly wouldn't be cost effective to put in heat pumps, and I'd need several, which really would annoy the neighbours.

I am well aware that there are other costs in switching to heat pump + EVs. The cost of the pump, the cost of the EVs, the cost of the chargers, and the cost of removing your previous boiler and connecting the HP to your heating system, for example. As well as the cost of prepping your home for pure-HP warmth (in my case, likely a six-figure sum with current tech). I was just querying the £15K figure for connection, as you did.

Any sensible energy company would buy futures when offering a fixed-price contract, but it seems that the ones who have failed in UK did not do that.

It seems that Hinckley C is being built to contain a Chernobyl style cock-up. Granted the consequences of contaminating densely populated UK would be far worse than sparsely populated northern Ukraine, but are our engineering systems that bad? As for Fukushima, what do you expect when you build in an earthquake zone?

There are many ways of avoiding a rerun of Chernobyl. Not performing experiments on your kit without having performed an accurate hazard analysis is one of them.

The EPR design being built at Hinckley is also at Flammanville (started 2007) and Olkiluoto (started 2005), neither of which are on-line yet. Any NPP is a complex piece of engineering. The question is not whether it is "that bad", but rather whether any system that complex can be engineered by any collection of humans to be free of catastrophic failure. (There are no satisfactory engineering risk analyse techniques that can accommodate scenarios that absolutely must never happen. And that is even before you consider the situation that somebody deliberately tries to get such a scenario to happen.)

Also note that all the NPPs in California, as well as many in the US Mid West, are built in "earthquake zones". I wouldn't attribute the Fukushima accident primarily to that. How I do attribute it can be seen in my iet.tv talk at https://scsc.uk/scsc-116 or read in a version of the paper at https://rvs-bi.de/publications/Papers/LadkinFukushimaAccOnlineVersion.pdf

Chris Pearson said:

It seems that Hinckley C is being built to contain a Chernobyl style cock-up.

Very unlikely as the Chernobyl RBMK reactors will never be built again. The only ones left in operation are in Russia. All of which have been modified.

Peter Bernard Ladkin said:

I wouldn't attribute the Fukushima accident primarily to that.

Indeed, a rare double earthquake, which the reactors withstood followed by the 46ft tsunami that did the damage. The backup diesel generators were located seaward of the plant on skids and were swept away. Four of the 6 reactors were stupidly built on too low an elevation.

Well, the bots are getting better. Still some way to go, though.