More Mini-Nukes

Looks like the PBMR may get beaten in the race for a mini-nuke... Frank (PS: note the cents are US cents)

http://www.greentechmedia.com/articles/read/sandia-joins-race-for-mini-reactors

Eskom slumps to record R9,7bn loss on big coal, metals-linked derivatives swing

This makes for scary reading! Frank

Eskom slumps to record R9,7bn loss on big coal, metals-linked derivatives swing

By: Terence Creamer

27th August 2009

State-owned power utility Eskom slumped to its worst ever loss of R9,7-billion in its 2008/9 financial year to end March, primarily on higher coal costs and a massive fair value loss on embedded derivatives, associated with pricing agreements the utility has with metals smelters in South Africa and Mozambique.

Had it not been for the big swing in the loss associated with metal-price-linked contracts, the Eskom's operating loss for the year was a considerably lower R3,1-billion.

But the results were also negatively affected by a 2,4% falloff in sales of electricity to 214 850 GWh, partly the result of load shedding and partly a consequence of the slowdown in demand brought on by the recession.

Eskom, which employs 37 857 people and has a total of 4,3-million customers, had a nominal capacity is 44 193 MW and net maximum capacity is 40 503 MW.

CEO Jacob Maroga indicated that actions were being taken in a bid to try and return the business to a breakeven position during the current 2009/10 financial year.

COAL CRUNCH

Eskom spent a whopping R25,4-billion on coal in the period, some R7-billion more than the R18,3-billion spent on the primary-energy source in 2007/8. It bought 133-million tons, 13-million tons more than the 120-million tons of 2008, and burnt 121-million tons, a level likely to be repeated in the current financial year.

The higher expenditure was mainly the result of Eskom's use of short-term contracts, deployed to rebuild stockpiles that had been depleted to unacceptable levels, and helped precipitate the load-shedding crisis of early 2008. Moreover, this restocking was implemented at a time when the export coal price was peaking at above $100/t.

Stock levels were now running at a far more comfortable 41 days as compared with the 13 days of stocks at the peak of the 2008 crisis.

The additional costs were also a consequence of the fact that the existing power-station fleet, which was having to be run harder owing to capacity shortfalls, was burning more coal than that contracted for with the dedicated, or tied, collieries. More coal also had to be transported from distant mines, which had added considerably to logistics costs.

Coal cost savings of R4-billion were being targeted for the current financial year, as Eskom gave greater priority to engagements with the coal-mining industry to better manage these costs. A national coal forum had been established to reduce the coal costs to Eskom and coal costs had already started to moderate.

Eskom was concerned, however, that there was currently insufficient coal-mining capacity in South Africa for long-term supply contracts to be concluded, as new mines had not been opened.

DISCOUNTED POWER CHALLENGE

A far more difficult problem to resolved, however, was the one relating to the discounted electricity prices to aluminium and ferrochrome producers - contracts that had been negotiated at a time when the utility was power flush and which effectively transformed South Africa into a major world aluminum producer in a matter of a few decades.

But as Eskom's reserve margin had declined and the country had experienced blackouts, the utility has been keen to extricate itself from the deal, which it viewed as unsustainable and in conflict with its shareholder's stated position that all State-owned enterprises move to end embedded-derivatives contracts that could cause undue earnings volatility.

In the year to March 31, Eskom's commodity-linked pricing contracts with aluminum producer BHP Billiton (which were based on London Metal Exchange prices adjusted for the rand: dollar exchange rate) as well as other smaller arrangements, had deepened the losses by a whopping R6,6-billion.

"Correcting embedded derivatives is a big issue," Eskom CEO Maroga told Engineering News Online, while chairperson Bobby Godsell added that Eskom would be engaging its commodity-liked customers with a view to achieving more equitable pricing.

Godsell stressed that it stilled valued its commodity-linked customers, but stressed that the contracts were concluded a long time ago and under very different circumstances.

"These customers have long-term as well as short-term interests and we will simply sit down with them and explain why these contracts are problematic, not only in price, but also because of the accounting uncertainty that they impose that makes proper strategic management of resources very difficult.

"We will look at both the form and the content of the contracts and I would hope that we could come to a good long-term basis of doing business," Godsell said.

NOT SUSTAINABLE

In the context of a R385-billion, five-year capital investment roll-out, the scale of the loss was viewed as "unsustainable" by Eskom, which still had an R80-billion funding shortfall for its Medupi, Kusile and Ngula projects.

The much discussed funding plan - which was meant to be finalised soon, given that Eskom wanted clarity ahead of the September deadline for its full submission to the regulator of a new tariff application under the second multiyear tariff determination period (MYPD-2) - would be key to placing the utility back on a sustainable footing.

Earlier, the National Energy Regulator of South Africa granted Eskom an "interim" 31,3% increase in its electricity tariff while it awaited the funding plan and the MYPD-2 application.

Eskom has continually stressed the need for an average tariff that reflected the full cost of electricity, as well as to support a build up of reserves to help it fund the capital expansion.

But business and labour have argued for a "smoothing" of such increases, suggesting that a spike would have devastating consequences for the economy and employment.

For that reason, the funding plan envisaged will probably not have an over-emphasis on revenue generated from tariffs alone, with the financing gap being closed through a combination of equity or near equity, government guarantees, commercial and development-finance debt, as well as consistent and transparent tariff increases.

Government had already provided R60-billion in the form of a subordinated loan with equity characteristics, and had made a further R176-billion available in the form of guarantees.

A development bond, which would enable South Africans to invest in the expansion of their energy system, was also being considered – with Martin Creamer.

Cars & the grid

This, my friends, is the way I see the future of electric cars and the grid. Viva the Smart Grid! Viva! Frank

PS: Cars are evil

http://ecogeek.org/automobiles/2913-ford-will-roll-out-plug-ins-with-smart-grid-tech

SA working on financial instruments to boost renewable projects

The article below talks about three funding mechanisms for Renewable Energy:

· REFIT – Best idea, let’s wait and see if it happens – see my comments below

· REFSO – A joke

· REMT – Brilliant, but little clout

ESKOM to produce 6000GWh of Renewables Energy, 60% of our target? How? They just shelved their only wind farm and only solar project?

“700 MW” of Renewables. If we assume 60% for ESKOM, that leaves 280MW for IPPs. It is a bad joke! Even 700MW is a bad joke. We can do 2GW wind in the Cape easy! See below...

“Challenge of connecting generators to the grid should not be underestimated, as it was substantial” = lots of excuses why NOT to connect renewable energy from Independent Power Producers.

To fund Renewable Energy “A massive electricity price increase would be required to meet those targets and costs.” = rubbish! The 2c levy by treasury is already enough for over 2GW of wind farms.

Seems to me that DoE (Department of ESKOM, er sorry, Energy) is eating up all the garbage that ESKOM is spewing to them.

Come on, we (South Africa) can do better than this!

Frank

From: http://www.engineeringnews.co.za/article/sa-working-on-financial-instruments-to-boost-renewable-projects-2009-08-17

RE: 50|50 Environmental Program to be taken off the air

I think it is a travesty that the leading environmental program on TV is to be taken off the air. Please support this petition to try and stop this happening. Frank

http://www.save5050.co.za/

BP stand for "back to petroleum" - oil giant shuts clean energy HQ, slashes renewables budget up to $900 million this year, dives into tar sands

You definitely cant leave it to big oil to solve the energy problems. They know how to make money from petrol, not from anything else. So I am dying of not surprise reading this article.

From: http://climateprogress.org/2009/06/30/bp-stand-for-back-to-petroleum-oil-giant-shuts-clean-energy-hq-slashes-renewables-budget/

RE: G.D.P. R.I.P.

This is a great article on why we should do away with GDP. One of the core flaws he picks up is that "every instance of replacement of a natural-capital service with a built-capital service shows up as a good thing" in GDP. Intuitively to do this makes no sense. Read on for more! Frank

http://www.nytimes.com/2009/08/10/opinion/10zencey.html

Another reason (or two) to not be building coal power stations

To run coal power stations, Eskom needs 1) coal and 2) water.

1) Coal – we don’t have enough. The world does not have enough. We don’t have enough oil either, and thanks to SASOL Coal = Oil. Thus the price is going to go through the roof. Thus running coal fired power stations will become expensive.

2) Water – we don’t have enough. And dry-cooling is expensive.

Frank

ESKOM's Energy Dilemma: http://business.iafrica.com/news/1857243.htm

RE: Chevrolet Volt

It’s amazing to what extent legislation can support green-washing. Chevrolet has just launched their hybrid electric-petrol car, the Volt, with the claim that it does 230 miles to the gallon, or approximately 100 km per litre. This calculation is according to the US Environmental Protection Agencies draft calculator for calculating such a value. The value, of course, is meaningless, as it is only for short distances and it INCLUDES the distance travelled using the electric charge when the car is not using any petrol at all!

Applying the same methodology to a completely electric car would claim that it gets an infinite amount of mileage for every gallon of gas...

Article on the Volt: http://wheels.blogs.nytimes.com/2009/08/11/gm-chevy-volt-gets-230-mpg/

RE: Climate Change Seen as Threat to U.S. Security

Pay the price today, economically, or later, militarily. Frank

From: http://www.nytimes.com/2009/08/09/science/earth/09climate.html?_r=1&th&emc=th

Wish you weren't here: The devastating effects of the new colonialists

This makes for scary reading. You could just as well replace “food” with “energy”. Those with money continue to exploit the poor, and as all resources become more scarce, one can only imagine the backlash from the deprived and dying.

http://www.independent.co.uk/environment/nature/wish-you-werent-here-the-devastating-effects-of-the-new-colonialists-1767725.html

China starts building first 10-GW mega wind farm

Imagine that! China builds one wind farm a quarter of the size of the whole of South Africa’s generation capacity! That’s probably about 5000 turbines.

From: http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE5771IP20090808

Cost of Nuclear 1 - SA

Alas, it appears that the figure quoted by Eskom chief executive Jacob Maroga for the cost of the new nuclear plant for South Africa was wrong. He said R300 billion. Seems that is the cost for the next THREE nuclear plants. Thus the cost of nuclear is not ZAR 75 million / MW but rather ZAR 25 million / MW. Still more than wind, and that is without overruns.

But, I am not sure what is more scary, the fact that nuclear is still expensive and we’ll do it anyway, or that the Chief Executive of ESKOM does not know what they cost!

Frank

Power to the Tower!

Concentrated Solar Towers are good to go! This one was turned on yesterday. Another company has orders for 2GW. Frank

http://www.greentechmedia.com/articles/read/esolar-shows-off-its-solar-thermal-tower/

Update on Nukes

Here is a great little article on Nuclear from the Home Power magazine in the US that a friend sent me. http://www.homepower.com/article/?file=HP132_pg110_PowerPolitics

There is also another good article on the state of nuclear at http://europe.theoildrum.com/node/5631 by Dr. Michael Dittmar, a researcher with the Institute of Particle Physics of ETH Zurich, and he also works at CERN in Geneva. Here are some highlights:

• The overall fraction of nuclear energy to electric energy has gone down from 18% in 1993 to less than 14% in 2008. With electric energy providing roughly 16% of the world-wide energy end use, one finds overall a nuclear energy contribution of less than 2.5%.
• The number of produced TWhe of electric energy from world-wide nuclear power plants is now lower than in 2005, and it has decreased by about 2% from a maximum of 2658 TWhe in 2006 to 2601 TWhe in 2008.
• Today and world wide, 48 nuclear power plants with a capacity of about 40 GWe are under construction. Only 10% of them are being constructed within OECD countries, which host currently about 85% of the existing nuclear reactors. However, about 100 older reactors with slightly larger capacity are reaching their retirement age during the same period. It follows that even if all 48 reactors might be connected within the next 5 to 10 years to the electric grid, it will be difficult to maintain the current level of TWhe produced by nuclear energy.
• The natural uranium equivalent required to operate the 370 GWe nuclear power plants of today is roughly 65,000 tons per year. However during the past 10 years, the world-wide uranium mines extracted, on average, only about 40,000 tons of uranium per year, and the difference had to be compensated for by secondary resources. According to the data from the Red Book 2007 and the WNA, the remaining civilian uranium stocks are expected to be exhausted during the next few years. Consequently the current uranium supply situation is unsustainable.
• The urgency to increase world-wide uranium mining by a large amount is well documented in the current and past Red Book editions and related official declarations. However, the latest uranium mining data indicate that new uranium mines will not be capable to compensate for the diminishing secondary uranium resources, and that it will be difficult to fuel the existing 370 GWe. It seems that either a rather welcome but improbable further large conversion of nuclear weapons into reactor material will happen during the coming years, or fuel supply problems within the next 3-5 years will force a 10-20 GWe reduction of the operational nuclear power capacity.

Frank

Sasol sponsors Stellenbosch solar thermal energy research

With no offense to my friends at Stellenbosch University, but this is greenwashing on SASOL’s part. It is a pity that it is a giant petrochemical company is sponsoring this work, and R3-million is piddly sum too. Last year in June, during the oil crisis, SASOL was making R100 million per day!!! (http://www.mg.co.za/article/2008-06-06-sasols-profit-rockets-to-r100m-each-day). I challenge SASOL to give one days profit to Stellenbosch University.

When will the industrial sector / government see the light and invest in solar in the same way they invest in fossil fuel processes (coal to oil, gas to oil) and nuclear? The money is great for Stellenbosch, but greenwashing for SASOL.

Frank

Article at: http://www.engineeringnews.co.za/article/sasol-sponsors-stellenbosch-solar-thermal-energy-research-2009-08-04

Fly TURTLE airlines

Now THIS is the way to fly! :) Frank

From: http://cleantechnica.com/2009/07/28/solar-blimp-to-fly-from-nyc-to-paris-rests-on-land-or-water/

World is running out of oil

"The era of cheap oil has ended”.

Here we go again. Last time oil got to around USD160 a barrel, where will we go this time? And oil at that price means any economic recovery will stall.

Don’t forget this will impact the price of coal and food. Coal = oil (ie SASOL). Food = oil (ie biofuels). And all of these exacerbate climate change. For South Africa, you can guarantee electricity prices will continue to rise dramatically.

Frank

http://www.busrep.co.za/index.php?from=rss_&fArticleId=5111083

Cost of nuclear demo plant soars to R31bn

So a new conventional nuke (Nuclear-1 @ 4000 MW and 75% capacity factor) is going to cost us around ZAR 300 billion, and the much smaller PBMR around ZAR 31 billion (assuming 75% capacity factor). For the conventional nuke, that is ZAR 75 million / MW. Assuming that both the heat AND electricity are used form the PBMR, that is ZAR 110 million / MW.

Wind is only ZAR 16 million per a MW (assume 27% availability), and concentrated solar with storage (ie dispatchable, with 40% availability) ZAR 38 million per MW. Even taking into account capacity factors, that makes wind and solar cheaper than nuclear.

What on earth are we doing with our industrial strategy?????

Frank

From: http://www.busrep.co.za/index.php?from=rss_&fArticleId=5109729

Levi factory dumping waste

Here is a great (ie disgusting) example of “externalisation of costs”. I love Lesotho, and makes me sick the exploitation there, of the people (like in this example) and natural resources (like the Lesotho Highlands Water Scheme) - Frank

http://www.news24.com/Content/Africa/News/965/b96c0ad386474d2993707ba8dd4b2239/02-08-2009%2006-58/Levi_factory_dumping_waste

Engineering News Highlights

A lot in the Engineering News this week.

First, DPE minister Barbara Hogan supports the PBMR: http://www.engineeringnews.co.za/article/minister-re-affirms-that-government-is-behind-pbmr-nuclear-programme-2009-07-30. She argues that it is a great way to develop a product to export. It is not. And it wont be for electricity any more, but for heat. See also: http://www.engineeringnews.co.za/article/sa-nuclear-company-concentrates-on-core-competences-and-diversifies-markets-2009-07-31

Then, a new “miracle” vertical axis turbine (VAWT): http://www.engineeringnews.co.za/article/sa-researcher-develops-new-vertical-axis-wind-turbine-configuration-2009-07-31. It is presented as increasing energy yields by 400%, but this is an unfair comparison to normal VAWTs as this configuration has more than 2x the wind area than a normal VAWT, so at best ,maybe a 30% increase, but this would probably put it beyond the limits of what can actually be harvested from the wind, so there is something else happening here. Not to mention that the configuration of the “blades” is awful in terms of vibration on the main shaft! I cannot see this design practically working versus a traditional VAWT of the same area.

And lastly, a summary of an energy caucus I went to: http://www.engineeringnews.co.za/article/civil-society-should-be-directly-involved-in-determining-sas-energy-future-2009-07-31. Worth a read. The main outcome is an argument for openness and transparency in all that ESKOM and the DoE are doing – at the moment, most of the energy happenings happen behind closed doors.

Frank