The debate between the Coalition and the Labor Party has long had an
ethereal dimension. They are in furious contention, though both are
promoting a wind/solar future. Labor says it wants to see wind, solar,
hydro, and batteries supplying all but 2 per cent of the market, while the
Coalition – as per Frontier Economics – says it wants to see a similar profile
but with nuclear providing 29 per cent of supply.

After Tony Abbott’s Prime Ministership, the Coalition adopted a Labor-lite
electricity policy. Like Labor, it has paid obeisance to the Western world’s
prime energy goal of reducing carbon dioxide emissions, though at a
reduced pace to that of Labor. It is unclear whether the Coalition actually
accepts the ALP view that wind and solar, suitably firmed with controllable
power (termed ‘dispatchable’ in the electricity market) is the cheapest
form of electricity.

If it does, it is badly advised.

Frontier Economics recognises that nuclear, in most of Australia, cannot
meet the costs that are readily achievable with black or brown coal. It
justifies its preference for nuclear by asserting that coal stations would
need to incorporate carbon capture and storage to receive a social licence,
thereby doubling their costs.

In the era of Donald Trump, the credibility of that position is fast
disappearing. Trump will dismantle the coal phobia from January 20 next
year, the result of which will see Australia and other OECD countries
joining China, India, and other successful ‘third world’ countries in
adopting the cheapest form of power. For most of Australia that is coal
(nuclear facilities might be competitive in South and Western Australia),
for most of Europe and Japan it is nuclear, while for the US it is gas.
Frontier Economics puts Australia’s nuclear costs at $10 billion per 1,000
MW generator with an operation and fuel cost of $30 per MWh. Capital
comprises some 74 per cent of nuclear costs and hence a price of $115 per
MWh is expected.

The last major official study on costs for Australia, the highly
credentialed Switkowski report on uranium, was issued in 2006 and put
the costs of coal-generated electricity without carbon capture and storage
at $63 per MWh (in 2024 dollars). This cost is consistent with that of
GHD/Solstice, which, in research conducted for the Minerals Council, put
the capital cost of coal generators at less than one-third that which Frontier
Economics estimates for nuclear power. The Solstice study assessed the
costs for coal-generated electricity (in today’s dollars) at between $49 and
$95 per MWh (where stations run 90 per cent of the time).

At $63 per MWh, a coal-based system, in Australia would deliver electricity
at about half the price of the nuclear, wind, solar, and battery system
modelled by Frontier Economics. Not only is this important for the
economy as a whole but without such cost savings, it would not be possible
to ensure the survival of the energy-intensive smelting industries. That
means closure of aluminium and nickel smelters that are competing against
oil and gas-rich nations and coal-based electricity in Indonesia.

It needs to be understood that renewables can only be built if they are
subsidised. The subsidies come in two main forms, one is as renewable
energy certificates that provide revenues to wind and solar whenever they
run. This puts them in the black as long as the electricity spot price is
above minus $31 per megawatt hour. Unsubsidised sources cannot operate
at such a loss. A more recent subsidy mechanism is in the form of the
Orwellian named Capacity Investment Scheme. Under this, the taxpayer has
guaranteed a premium price (which the government refuses to reveal) for
contracted wind and solar facilities, whenever they run.

A coal-based electricity system not only means a halving of the costs of the
electricity supply system favoured by the government but the
fundamentally intermittent system is impossible to provide reliability
except at horrendous costs involving the totally untried technology of long-
term battery storage.

Nor could a renewables-dominated system coexist with the high capital
cost electricity supply sources that are coal and nuclear. Those generators
can only be economic if they operate at around 90 per cent. Spreading the
capital cost over lower outputs wrecks their economics. Coal and nuclear,
unlike hydro (which has limited fuel supply) and gas (which has lower
capital costs), do not complement wind and solar. Or, at least they do not
do so if they are obliged to back-off when there is ample wind and solar.
I believe it is wrong to claim, as others have, that ‘nuclear can provide the
steady baseload power needed to complement intermittent sources like
wind and solar’. Frontier Economics recognises this and its modelling
implicitly forces renewable energy supplies to back-off when nuclear is
available. This, together with the constricted increased transmission
building that Frontier Economics proposes, is recognised by the chorus of
opposition to Frontier Economics’s proposal from the renewable industry’s
subsidy-seekers.

Finally, forecasts 30 years ahead in the electricity market have been
markedly inaccurate. The aforementioned Switkowski report pictured the
2029/30 electricity supply to be 69 per cent coal and 22 per cent gas; wind
and solar were seen as contributing 2 per cent. For 2024, wind and solar
have 28 per cent, coal 46 per cent and gas 19 per cent.

****

More information about the author, Alan Moran, at LinkedIn.

This article is republished from Regulation Economics and The Spectator Australia, more information: https://www.regulationeconomics.com/_files/ugd/b6987c_fbfc8e7c36754271b753ff50d90ac715.pdf

The feature image is of me, Jennifer Marohasy, in the UK where the King gets a royalty from every wind farm.

From the Thomas Jefferson Institute for Public Policy

By Steve Haner

Another analysis of the energy dilemma facing Virginia, this one commissioned by a Democrat-controlled legislative panel, has concluded that use of natural gas to make electricity is going to have to grow over coming decades, not shrink.  Virginia’s anti-hydrocarbon energy laws are doomed to fail because of Virginia’s global dominance in the data center industry. 

The new 150-page report takes its own look at Virginia’s future energy demand and the best mix of generation to meet it.  It reaches the conclusions Dominion Energy Virginia also reached in its most recent integrated resource plan.  Data centers by themselves are driving an enormous future demand curve, as Dominion claimed.  The abandonment of coal and natural gas demanded by the Virginia Clean Economy Act (VCEA)  creates an energy deficit, even if the data center growth proves slower than the current projections.

The energy consulting firm Energy + Environmental Economics (E3) was retained by the Joint Legislative Audit and Review Commission (JLARC) to look at the future electricity demand created by Virginia’s prominent role in the data center industry.  Using proprietary models looking out to 2050, it produced several possible scenarios but all included expansion of natural gas and all caused significant rate increases, also a parallel conclusion from the Dominion IRP. 

In fact, this report projects natural gas must expand, and will remain necessary beyond the mandated retirement dates in the VCEA even if the data center growth doesn’t happen.  It plugs the gap in some scenarios by using hydrogen in place of natural gas in thermal energy plants.  But that remains an unproven, experimental technology not used at scale anywhere.  An entire very expensive infrastructure would be needed to create and transport the hydrogen to Virginia power plants.  

Only fantasy technology can comply with the fantasy VCEA.  The nuclear plants E3’s scenarios envision are somewhat closer to reality, but still years if not decades away.  “In the absence of policy, there is still a significant role for coal and gas generation, comprising another ~30% of demand,” the consultant reports.  This was on a slide marked “No Data Center Growth, No VCEA.” Carbon emitting source are even more prominent on scenarios that include the demand growth, with some adding a new natural gas plant every two years.

Virginia’s average citizen ratepayers, those not advised by utility accountants and lawyers, have every reason to be wary.  Just about everybody in the room will have an employer or client they seek to protect or enrich, or a political boss dependent on campaign contributions from the companies present.  Utilities and green energy advocates are major funders of what remains of Virginia’s news media.

Financial rent seeking and political muscle helped put Virginia into this dilemma, a perfect example of the wise warning to be careful what you ask for.   Major financial incentives were created as far back as 2010 to lure the data centers to Virginia, as outlined in the JLARC report.

The state gives a major tax break on the sales taxes it would otherwise collect as the data centers are constructed and filled with computers.  The value of that tax subsidy was just under $1 billion in 2023, JLARC reports.  In many cases, the state tax lure is coupled with local incentives.  Virginia is also attractive because so much Internet fiber backbone runs through the state, and because federal government clients fill the landscape. 

It worked. “Northern Virginia is the largest data center market in the world, constituting 13 percent of all reported data center operational capacity globally and 25 percent of capacity in the Americas,” JLARC reports.  There are also significant facilities in the Richmond area, a cluster in Southside Virginia (mostly Microsoft) and even a new giant facility proposed for Appomattox.

Virginia’s Democrats didn’t want the lecture on energy reality they got from Dominion and have dismissed warnings against thermal energy retirements coming from the PJM Interconnection. Will a report from a consultant they commissioned get the message through?

By Jo Nova

And so it begins, scientists start peeling off the climate change labels from the ideology

The Trump clean-out has not even started and the bow wave is washing off some of the faded advertising.

Just as ESG and DEI are quietly disappearing into the bushes, soon, “climate change” will vanish too.

One day most scientists will say “we always knew it was overdone”. But right now, brave scientists are sticking to their beliefs … playing the victim card and adopting new advertising to keep their funding.

Oliver Milman, The Guardian

The prospect of an even more ideologically driven Trump administration slashing budgets and mass-firing federal staff has given America’s scientific community a sort of collective anxiety attack. “We all feel like we have a target on our backs,” said one National Oceanic and Atmospheric Administration scientist, who added that agency staff are already seeking to “pivot” by replacing mentions of the climate crisis with more acceptable terms such as “air quality”.

“My god, it’s so depressing,” said another federal scientist about the incoming administration. A doctoral candidate, when asked about entering the workforce under Trump, simply puffed her cheeks and groaned. “If someone offered me a departmental position now, I’d jump,” said one Nasa researcher.

It’s not like modern science is a lap-dog serving whoever feeds them the biscuits.

Science is in such a crisis, even the Guardian staff realize something is wrong:

But scientists in the US face a broader crisis beyond the next president, amid a swirl of misinformation and declining trust in the profession among the American public. Overall trust in scientists has fallen by 10% since the pandemic, Pew polling has shown,…

And the AGU President, who helped turn science into a religion, accidentally explains some of it:

“When we get that kind of polling data, it is concerning,” acknowledged Lisa Graumlich, a paleoclimatologist and the current AGU president.

“The conspiracy theories are out there, the misinformation is there,” said Graumlich. “Social media engines and the algorithms can take a person that isn’t necessarily prone to a conspiracy mindset and have them end up in this rabbit hole of misinformation.”

Where was Graumlich when NASA and NOAA were spreading misinformation that science is done by groupthink and consensus? Or when they pretended evidence came from computer simulations of Earth, and not the real thing?

And yet, already, in The Guardian desert of journalism — one tiny sensible shoot appears:

Some researchers think scientists should adapt to this hyper-partisan environment by sticking to unadorned facts, rather than anything that could be seen as campaigning. “We have been come to be seen as just another partisan lobbying group,” said Ken Caldeira, a climate scientist.

That’s a good start.

H/t to Willie Soon.