Not quite Mr. Gilligan

Producing just one ton of aluminium uses more power than the average family does in 15 years.

About 3 years I think.

I tonne of Al uses around (from Australian numbers) 15 MWh. The average families usage for a year (from Scottish figures) is 5 MWh.

But yes, it\’s a lot and Huhne is playing silly buggers with the \’leccie price which will mean the last smelter closes down. As the Anglesey one has already closed because the nuclear power plant specifically set up to feed it is not longer allowed to \”subsidise\” it.

And a very interesting set of numbers:

The Renewable Energy Foundation (REF) and The Sunday Telegraph asked Colin Gibson, former power network director at the National Grid, for an estimate that takes into account these production costs. His figures suggest that across its whole life, onshore wind will cost as much as £178 per megawatt hour of electricity generated, three times nuclear (£60). Offshore wind, with its much higher construction cost, is more than four times dearer, at £254 per megawatt hour.

This is when you add in the costs of building the backup and the connections to the grid.

Which means, remarkably, that offshore wind power simply doesn\’t make the grade. Something I hadn\’t realised. I knew it was expensive, but not so expensive that it doesn\’t pass the Stern Review test.

Which is, let us recall, that the cost of not having emissions must be lower than the costs of the damage such emsissions would cause.

We have our damages number, $80 per tonne CO2 (or we can use his \”upgrade\” of $120 a tonne).

OK, so let us also take our most polluting form of generation, coal, and how much CO2 do we get per MWh? According to the septics it\’s 2 lbs per kWr or close enough to a tonne per MWh.

So, looking purely at the carbon costs, non-carbon generation can only be $120 per MWh, at the most, more expensive than coal fired for it to be a sensible thing to be doing.

I\’ll assume that coal and nuclear are about the same price (I\’m pretty sure that coal is cheaper, otherwise we wouldn\’t be having all these arguments, but bear with me here).

So, coal is £60 per MWh, competing sources have to be no more than £60 plus $120 in order to be viable even including carbon costs. Call it £140, £150.

Onshore wind doesn\’t meet this test, let alone offshore, which is even more expensive. And we don\’t even have that infant industry argument either. We can posit that solar PV is coming down in price so quickly that supporting it until it is viable makes sense (I know I generally argue the other way around, that because solar PV is coming down in price so quickly we don\’t need to support it…..my point here is rather than windmills aren\’t on that same technological cost curve so even if the argument works for solar it doesn\’t for wind).

But this simply does not hold true for windmills.

So, even if we include all of the carbon costs, even if we do everything just as the Stern Review (and even sensible economics) suggest, we still shouldn\’t be building bloody windmills.

So why are we?

It can\’t be blackmail, for with Huhne, given the leaving his wife for a lesbian PR dolly, the speeding points and his past as an MEP, what on earth could there be to blackmail him over?

 

11 thoughts on “Not quite Mr. Gilligan”

  1. Wikipedia on domestic energy consumption in temperate climates give 20MWh per household, though this figure is approximate and not specific to the UK. [Note this excludes private car petrol consumption, which some might think should be included in direct ‘family energy consumption’, but probably neither Andrew nor Tim in this discussion.]

    This 20MWh is more than the 15MWh (1,712 Watts continuous equivalent) that Andrew Gilligan looks to be claimings.

    It is certainly vastly more than Tim claims by reference to Scottish Power (3MWh, or 571 Watts continuous equivalent). That might be down to a confusion between electricity consumption and total energy consumption. Alternatively … the Scottish are a hardy and economically minded people.

    Best regards

  2. The energy in wind is too dilute, in both space and time, to be recovered economically. This has been perfectly obvious for decades, so the whole business is a just a heap of lies.

  3. Closing Lynemouth is a *good thing*. There’s no point in smelting aluminium anywhere where the grid mix is largely fossil-fuel based: far better to do it all in Iceland (and everywhere else that’s got a low population and vast amounts of easily tappable non-fossil energy). If the UK had significant bauxite deposits, there might be *some* logic in Lynemouth – but since we’ve neither, it’s clearly a Ricardo-stupid thing for us to do.

  4. @john b: I’m sure the workers up in Northumberland will be delighted that you have decided that they be thrown on the dole and their work be sent to Iceland. They will be very grateful for your enlightened direction of the economic life of the nation. Where would we be if we just allowed market forces to direct where stuff was made? Far better to have production directed by all wise economic commissars like yourself.

  5. There’s no point in smelting aluminium anywhere where the grid mix is largely fossil-fuel based

    Why not? I agree that Iceland could have a lot of potential in such areas, but that depends upon the cost of the geo-thermal vs cost of coal or gas, additional cost of transport to/from Iceland etc, not to mention the one off cost of closing down an existing, profitable plant in Lynemouth and building a new one in Iceland.

  6. “I’m sure the workers up in Northumberland will be delighted that you have decided that they be thrown on the dole and their work be sent to Iceland.”

    If the business isn’t profitable, the work they’re doing doesn’t add value (aluminium smelting is not a labour-intensive industry, so cutting wages is unlikely to make a blind bit of difference), so yes, of course they should be on the dole + retraining schemes, etc. That’s why we don’t mine coal, or manufacture buggy whips.

    “Where would we be if we just allowed market forces to direct where stuff was made?”

    Which is what we’re doing. Electricity prices are rising to reflect the social cost of
    carbon emissions. I’m not saying that Lynemouth should be closed – just that, if it closes because it can’t make money given UK electricity prices that incorporate the cost of carbon, then that’s a good thing. If it can still make money given UK electricity prices that incorporate the cost of carbon, then that’s an even better thing. But (or so its owners claim), it can’t.

    “Why not? I agree that Iceland could have a lot of potential in such areas, but that depends upon the cost of the geo-thermal vs cost of coal or gas, additional cost of transport to/from Iceland etc, not to mention the one off cost of closing down an existing, profitable plant in Lynemouth and building a new one in Iceland”

    Agree in principle. In practice, the cost of geo and hydro power in Iceland is almost zero, the cost of transporting things to and from Iceland is surprisingly low (I worked as a consultant to an Icelandic shipping company a couple of years ago, so did some work looking at this). The cost of closing the plant at Lynemouth and building another one is the only reason why it hasn’t shut already – nobody would site a new smelter there.

  7. I hardly think the State decreeing that electricity prices should rise to pay for Renewables constitutes ‘market forces’ somehow.

  8. In the absence of anyone else to price externalities, applying Pigouvian taxes is the least inefficient solution.

    Ideally, as in Australia, the revenue would be used to cut taxes on Things We Want (e.g. jobs for poor people – the Aussie carbon tax revenue is being used to massively cut tax rates for the low paid) – but even if the money’s wasted on random crap, that still leads to better outcomes than a market that doesn’t price externalities.

  9. Well I suppose it comes down to whether you believe there are any ‘externalities’ to which method one uses to generate electricity…………….

  10. Tim, you might want to check that Gibson chap’s figures for yourself. You might also want to check the difference between baseload (i.e. nuclear) and peak (i.e. wind and gas) power.

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