Kyoto – A Perspective (Part 42)

Posted on Mon 06/23/2008 by

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SOLUTIONS.
PLANT REPLACEMENT ECONOMICS.

Before deciding on replacements, and then deciding on where they need to be constructed, let’s look at some of the economics, and I know that just by saying that, some readers will probably turn away, but if you ask me, this is not only interesting, it throws up some very surprising information.

First we need to look at efficiency, and this is very important no matter what those who lean in the environmental direction would like to tell you, because after all, if the Government, the Electric Authority or the Private Company find that the cost is just too great, then that process of construction will not even be commenced, no matter how loud the protestations might be. Altruism does not enter the environmental equation if the cost is too high. The reason for that is the howls of protest when the huge costs are passed on to the end consumer of the electricity. Even considering the process will be connected onto a grid consisting of power from numerous sources, those costs will still add to the end price of the electricity, and considerably so.

When you again look back at the pie chart for current sources of electricity, generation, you see that the one titled ‘Others’ produces only 3% of the total power in the US. This 3% is made up from five sources. Two of these sources make up just on half of the total, those being Wood (and wood derivatives) and waste (including gas generated from the landfill from household trash). The other three are from the three newer technologies, Geothermal, Wind and the two versions of Solar Power. (Photovoltaic panels, and solar thermal, both processes coming under the one heading, Solar.)

Of this 50 percent that Solar sector only makes up only 1.2% of that total, or 0.6% of the total production from all those other sources When extrapolated out to the total power production for the whole of the US, Solar power makes up just slightly more than one hundredth of one percent or 0.000125 of the total.
Why is that?
Because the technology is not yet perfected. What technology there is in existence right now is so costly that ramping up in this solar sector is just not viable. It can be done on small scales and even on a small scale the plants are extremely costly, cover a fairly large area, produce variable power and cannot yet be used to replace baseload power. There is the capability that they can be connected to the grid as one source among many, but for whole areas to be powered by solar power alone is still a long way off into the future. The use of solar power by focusing mirrors onto a collector, and then using this to heat salt to a molten stage, and then using this molten salt to boil water to produce steam to drive a turbine sounds a promising new direction, but again, the cost right now is astronomical when compared to the other processes, and so far it has not been used to produce the huge numbers needed for baseload power. Whether or not this process can in actual fact be made economically viable, that waits to be seen.

However, while the production of solar power is slowly increasing, and Geothermal power stays relatively constant, what is ramping up is the production of wind generated power. This alone has been effectively doubling every two years, and in forward estimates, there are as many plans for wind turbine power plants as there are for those combined cycle turbine plants using Natural Gas. This alone is what is driving that small segment of the overall power production pie chart to show an increase more than double in the US compared to the rest of the Planet.

The economics will be hotly debated by those who have interests in one camp or another, but when viewed dispassionately, numbers can show some surprising things.
It all depends upon efficiency, and I know I keep mentioning it, but this is a most important factor. Efficiency decrees if it can be used for baseload power.
A huge 2000MW coal fired power plant can hum along at close to 90% of its maximum nameplate capacity.

You can total up a number of solar panels in an array that have a total name plate capacity of 2000MW, but the killer thing here is that efficiency rating. Currently solar panels have an efficiency of close to 20% and that’s on the up side of conservative. What that means is to achieve the same amount of power as that coal fired plant, you’ll need five of these solar plants. The efficiency is creeping up, and so for this case here, I’ll quote on the upside of that efficiency and go for around 30%, an efficiency rate they have hopes of reaching within ten years or so. Using the latest state of the art technology as the plant powering Nellis AFB in Nevada, currently the largest solar array in the US, then it would require close on 31 million similar solar panels, and cover an area of nearly 100 square miles, and that is just to replace ONE large coal fired plant. The cost would also be prohibitive going on the Nellis cost, making this proposed replacement plant cost around $43 Billion.

Then, on top of that, you will need to significantly ramp up the construction of new factories to produce the panels. There are currently a dozen or so places in the US constructing solar panels, and the bulk of them are produced overseas, the ones for the Nellis Plant being produced in the Philippines and constructed in (wait for it) China. At the current rate of panel production, you would need not just one dozen plants for panel construction in the US, but 500 of them and it would then still take close on ten years to construct the panels needed just for this one plant.
Now can you see the problems inherent with solar power on a large scale.

Let’s look at wind power then. The efficiency for this process is close to 35%. So for this example here I’ll refer you to the Cape Wind solar site and use those figures for a reference. Using that efficiency rate, and quoting for the one 2000MW coal fired plant, you will need 15 of these plants. This will cover an area of close on 375 square miles and cost $15 Billion. Again, just to construct the nacelles alone will need considerable ramping up of the factories producing these also. Considering the variability of the wind, the area will have to be carefully selected, and the problem with such a huge area as this is constructing the infrastructure not just for the towers, but the transmission lines and everything associated with that. It’s just not going to be something that can be placed in the one area. Keep in mind that this is just to replace ONE large 2000MW coal fired power plant.

As a point for comparison, I want you to look at this. What I’m going to do here is to speculate for a nuclear power plant, and then compare that to the cost for an equivalent new coal fired plant and then use those figures to compare to the others quoted above for solar and wind power.

What you need to keep in mind here also is perspective. People who are on the side of using the nuclear process will quote one set of figures and those in favor of coal will have their own figures, and the two sets of figures for the same process will be wildly different, so what I’m going to do is to quote on the pessimistic side for Nuclear and the optimistic side for coal.

A nuclear plant will cost in the vicinity of $7 Billion keeping in mind that number is inflated because of the cost of the money for 7 years before the plant comes on line and starts to return some of that money. The plant will last for up to 60 years, and will then need to be decommissioned. The cost for this decommissioning has been speculated at being the same as for the initial construction, (not including the original interest) around $3 Billion. The cost of the fuel rods going into and then being sent off for storage has also been speculated at being around half the original cost, so then add another billion to that. The total amounts to $11 Billion. This compares favourably with both wind and solar especially.

Okay then, let’s look at coal shall we. We’ve got out of the habit of constructing these so the cost has increased since those recent large ones have been constructed. However, I said I was going to quote on the optimistic side of the ledger here. The construction cost for a large 2000MW coal fired plant is around $2 billion dollars. This is quite generously optimistic, as a currently proposed large coal fired plant has been costed at $4.76 Billion, so this figure of $2 Billion is really optimistic. That plant is being held up at every turn, and will very likely not be constructed at all.

During the life of the plant, around the same for a nuclear plant, it will need replacement boilers, heating systems, replacement coal furnaces, conveyor belts for the coal, new scrubbers, and other things associated with coal, exacerbated by working in a very dirty environment such as is the nature of coal. When the plant needs to be decommissioned, there’s no problems like that with the nuclear plant, but the site will need to be extensively cleaned up, so the total for all of that might amount to $1 Billion tops, when added in with those previously mentioned running costs. This brings the total cost in at around $3 Billion. So, you can see from this that coal fired plants are infinitely cheaper than all the other processes.

So using that wonderfully erroneous and very distracting phrase, ‘clean coal’ or carbon capture and storage (CCS), lets then add the amount it will cost to retrofit the Plant for this capability. Considering that it’s still theoretical, and you’re talking construction of the carbon capture and liquefaction facility, the vastly extensive piping to those storage areas and the facility to put it back into the ground, then the speculation has it that it might double the lifetime cost of each of those plants. So that makes the cost of a huge baseload coal fired plant around $6 Billion. So now you can see why those coal plants are in vogue and why there is talk that CCS is the way to go. I mean, after all, it’s just so much cheaper than all the other processes.

Wait a minute. I forgot something. Silly me.
So then what about the coal itself. Again, I’m going to go on the (really) optimistic side and quote the cost for coal in today’s dollars, and conservatively quote for just the less than average 10,000 tons per day. So the cost for the coal extrapolated out for the 60 year life span of the coal fired power plant comes in at $22 Billion dollars

Hey, don’t believe me. Work it out for yourself. 10,000 (tons) X 365 (days) X 60 (years) X 100 (dollars per ton for coal at today’s price, which is in actual fact closer to $120 per ton, and there is some conjecture that the cost could very soon be $150 per ton.)

So then the true cost for a 2000MW baseload coal fired power plant comes in now at close to $30 Billion.

See the surprising thing now. The coal process is not cheap. The coal process is not, and never can be clean.
Now that lifetime costs are added in, Coal fired Power Plants are not as attractive as they first seemed, because selective quoting of just construction costs is not the whole picture. You can see why politicians in coal producing States, and coal mining Companies themselves would have you believe that coal is still a viable option.

KPPSTony