The real cost of unreliable energy

The frog and the scorpion arrived at the edge of a river at the same time. Both wanted to get to the other side. The scorpion asked the frog for a ride on the frog’s back because the scorpion could not swim.

The frog objected, saying that the scorpion might sting him if he was on the frog’s back.

The scorpion replied that he would not do that because if he stung the frog as they crossed the river he would drown himself.

So they set out, and midway across the river the scorpion stung the frog.

As they both went down the frog said “Why did you do that?”

“Because I am a scorpion.”

Consider the relationship between renewable energy and the energy from conventional sources, mostly coal. As the installed capacity of RE increases on the back of subsidies and mandates it erodes the financial viability of coal power. We are told that it is so much cheaper that coal can’t compete, and indeed it will be a great benefit if the old coalers close well in advance of their normal lifetimes.

Why is RE so much cheaper than coal power?

Quite simply because solar and wind providers are not covering the cost of “firming” that is, filling the gaps on windless nights between the peak levels of RE supply on sunny and windy days.

RE is like the scorpion, getting a ride on the back of the frog.

As long as the frog is strong enough to carry the scorpion, that is, to provide all the power that is demanded by the grid on windless nights, the lights will stay on and nobody will be alarmed

However the scorpion is slowly and steadily killing the frog by undercutting the price of coal in the market.

When the scorpion has killed a little more of the “frog”, say a couple more coal-fired power stations, there will be a tipping point when there is not enough conventional power left to keep the lights on through windless nights, or dinnertimes during a wind drought.

The analogy is imperfect because the wind and solar providers don’t die when there is not enough conventional power to keep the lights on, it is the grid that dies, or large parts of it, with all the services that the grid supports.

The RE “scorpion” is supposed to want to keep the grid alive, in the same way the scorpion in the story ostensibly wanted to get to the other side of the river. But RE cannot keep the grid alive through windless nights without the help of the conventional power “frog”.

And as the grid dies on a windless night, someone might ask the “scorpion” why it killed conventional power and hence the grid, to which RE would reply “because that is what I do.”

Far from being cheaper, the real cost of RE plus firming is much more expensive than conventional power.   This is demonstrated in an elaborate model of the NEM – the electricity system of SE Australia, with estimates for the cost of power from different sources and combinations of sources. The existing (base) case 1 and also 2, replacing brown coal with nuclear, costs between $60 and $80 per MWh.

The options 3 (replacing all coal with nuclear) and 5 (replacing all coal with nuclear) would cost between $60 and $80 per MWh.

Case 4 that they described as the AEMO plan at the time would cost in the order of $250 per MWh in 2040.

Case 6 shows a 100% renewable mix comprising solar PV, wind and hydro with support from pumped storage and some battery storage. Because of low capacity factors, solar PV and wind require a combined total of 110,000 MW of capacity. There is also a need for 30,000 MW of pumped storage capacity for 3 days. To this must be added high-cost additional transmission to get the power to points of high consumption where it is needed, making a total SLCOE of $ 415.50 / MWh.

Of course all the assumptions in the model can be disputed but the fact remains that the RE enthusiasts have not yet come to grips with the full implications of turning aspirational RE goals into reality. Up to date they have been able to ignore the value of the free ride that they are getting on the back of conventional power (the frog) that provides the “firming” or backup to cover the gaps in wind and solar supply (the scorpion).

28 thoughts on “The real cost of unreliable energy”

  1. Unfortunately the problem is natural gas availability. We are seeing this play out in the UK and EU, with gas prices quadrupling this year. Two more electricity retailers went bankrupt this week, because they can’t raise their electricity prices to pay for wholesale electricity produced by gas turbines.

    The same will occur here. The electricity generation system must have gas since electricity cannot be stored. When wind isn’t blowing gas has to be used. There is no choice. And when supply is insufficient the price will quadruple here too. Or more than quadruple.

    So I agreed with options 1, 2 and 3 in the chart, but 5 is totally wrong – much much too low in price. Gas doesn’t grow on trees.

    And I suspect 4 and 6 are wrong too, especially 6 since there is no way that enough storage can be built. It’s the same problem there but with battery materials: when everyone is buying batteries all at the same time the price of the metals will skyrocket. It takes decades to get mines in operation, and the Greens are just as opposed to them as they are to fracking and coal seam gas.

    Why have our elites all gone collectively insane like this lately? The economics are totally obvious.


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  2. Why have our elites all gone collectively insane like this lately? The economics are totally obvious.

    Because it’s nothing to do with the environment- it’s all about wrecking the real economy and lining the pockets of grifters.


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  3. I was horrified listening to Josh Frydenberg confirming that Oz was going to sign up to zero emissions by 2050 , however after thinking through the rationale that we would be ostracised by all the other countries signing and the problems of finance if we did not sign I can see not so bad when this is so far off we will all be dead . So how will this be managed and now who is the scorpion?
    Out thinking the left and the greens Scomo has made the first move of getting nuclear subs in the mix . Of course two way Albo having his useful idiots complain about cost , demanding no nuclear industry etc etc although agreeing with the policy but all this will be negotiated through the legislation and he will only give no nuclear weapons.
    Now 2022 when AGL close down Liddell and suddenly there is a percentage of available , affordable energy gone with no replacement . Like Adelaide Victoria andNSW will be relying on batteries . , btw great for building new subs let alone keeping the lights on . What’s a government to do when we have no connectors to other countries who can send energy to us . Do you reckon we might do a deal with France for a nice long cable like the one from a solar farm here up to Singapore ? Gas ? hardly fossil free. So what’s left that we have plenty of and maybe we need to have some just in case we need some for subs . Now there’s the sting.


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  4. When Liddell closes so will Tomago aluminium. All good, except of course that we won’t be producing any aluminium, which really doesn’t matter because I’m sure the Chinese will sell us what we need. Too easy.


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  5. minsays:
    September 25, 2021 at 9:11 am
    2050…not so bad when this is so far off we will all be dead .

    ..
    My daughter will be 39 in 2050.
    Why do so many of you think this way?
    “I’ll be alright, by the time it ends in utter collapse I’ll be dead”? Who thinks this way?


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  6. The only generation to have shrugged it’s shoulders and decided the way out is to burn everything up: political capital, debt, education, the power grid and other infrastructure, defence, real progress, and leave a worse world for coming generations.
    What the hell happened to you all to make you this way? It’s sick.


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  7. Say ten years ago, you would be surprised at what trash like Guy and Fraundenberg said this week but not any more. These people, the political class, are dangerous trash. Just like in the US, UK and Canada.

    Interesting to the consider the heir to the throne- once he seemed like a quaint eccentric. Now we know he is a very dangerous, elitist misanthrope. Trash too.


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  8. Mandatory primary frequency response

    Addressing a need for improved power system security
    Stable frequency is an important part of maintaining a secure power system. Frequency
    varies whenever electricity supply does not exactly match consumer demand. A large
    disturbance can cause an uncontrolled change in frequency, resulting in a significant
    disruption to the power system.

    In its 2018 Frequency control frameworks review, the Commission concluded that
    frequency performance under normal operating conditions had been declining in recent
    times as shown in the figure below. The final report included a frequency control work plan
    that set out actions and reforms to be undertaken by the market bodies to support effective
    frequency control in the national electricity system, including regulatory reforms to increase
    the provision of primary frequency response from generators.

    Historically in the NEM, only synchronous generators, such as coal, gas and hydro, have provided primary frequency response. However, non-synchronous generators such as wind, batteries and solar PV, can also provide primary frequency response. In early 2019, separate and related rule change requests were submitted from AEMO and Dr. Peter Sokolowski. Both of these proponents identified in their rule change requests that the reduction in primary frequency response by generators in the NEM has made it more difficult for AEMO to maintain the power system in a secure operating state and has reduced the system resilience to disturbances. The Commission has consolidated the two rule change requests and has published a single final determination and final rule.


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  9. miltonfsays:
    September 25, 2021 at 10:40 am
    Well I sure as shit don’t think that way.

    ..
    Not all, not all, not all.
    (To quote Jesse Lee Peterson)
    People like you are the exception Milt.
    Surely you can see that?


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  10. Never let it be forgotten; this is all happening in Australia under a supposedly conservative federal government.

    The lieboral party stopped being conservative the 70s. Fraser filth was just a continuation of Whitlam but with Fraser in the top job.


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  11. The only generation to have shrugged it’s shoulders

    Sadly, no, Arky.

    Some of us have been fighting the good fight for over 30 years. When we tried to explain things to our parents, they would also say, “Oh, I’ll be dead and gone before that happens.” In fact, we heard that a lot. We still hear it from the older generation, as well as our own, now.

    That’s where I disagree with Struth. We have been fighting. The problem is simply that there are not (have not been??) enough of us. The boiling frog, the ‘want of a nail’, the ‘because I was not a Jew’ stories all exist because they are true.


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  12. Arky I didn’t mean it that way but in 29 years If we extrapolate from what is happening in the UK and Germany now where Putin is playing funny buggers with the gas. Look at the cartoons from UK , Germans can’t afford energy bills so I reckon there will be a peasants’ revolt as technology will not keep up.


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  13. I was horrified listening to Josh Frydenberg confirming that Oz was going to sign up to zero emissions by 2050 , however after thinking through the rationale that we would be ostracised by all the other countries signing and the problems of finance if we did not sign I can see not so bad when this is so far off we will all be dead . So how will this be managed and now who is the scorpion?

    the fascist elites have decided democracy be damned, they know where the future is how to profit from it. So pressure is exerted through mega corps, courtesy of davos. recalcitrants are social credited out of modern society.

    You will own nothing is really the end game. you either live on UBI or if you work, you rent everything so you can be socially credited out for non compliance.

    marxism is ancient history, this digital fascism 1.0.


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  14. People have become sheeple. Or tyrants given the opportunity.
    I have been warning about and resisting this for years.
    Heads on pikes might make a bit of difference.


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    3
  15. Say ten years ago, you would be surprised at what trash like Guy and Fraundenberg said this week but not any more. These people, the political class, are dangerous trash. Just like in the US, UK and Canada.

    it makes no difference which government is in power as far as the outcome, the only difference is the rate of change. mega corps are by-passing or amplifying government policy based on the davos agenda. the UN used to drive this agenda, but seems davos has the ear of the billionaire class.

    the davos agenda is framed as common good, capitalism is framed as a failure for the common good. capitalism is only for the enlightened elites who know what is best for us all, the proles can eat synthetic protein, flavoured water and insect gruel, while the elite feast on filet mignon, caviar and real champagne.

    The network of all your devices including your car and home will control your existence through AI rulers.

    This alliance of big corp and big government is digital fascism 1.0


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  16. The network of all your devices including your car and home will control your existence through AI rulers.

    This already happening in china. Serpentza reported on this. You jay walk, the street camera picks up your face, automatically identifies you. It can do this through knowing your mobile phone as well. A fine is automatically issued and your bank account is automatically debited the penalty and as well as your social credit. Your bad social credit also affects all your friends lowering their social credit, encouraging them to pull you into line or ostracise you.


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  17. When Liddell closes so will Tomago aluminium. All good, except of course that we won’t be producing any aluminium

    Worse than that, Uh Oh.

    Right now Tomago is acting like a giant battery – sopping up power when there’s too much windy energy and shutting down when the power price spikes – which they do when “asked” to by government. So they’re providing a market stabilization service as well as making some aluminium. It can’t go on. No one would invest capital to keep such an operation open.


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  18. I can see Morrison eventually convincing Barnaby to crab-walk into supporting the 2050 thing. I have no idea what the cost of his support will be, and maybe we should get ready for more nice brick dunnies to be built on regional sports grounds, but Barnaby has a momentous decision to make: go with Frydenberg and take the country renewable (and hope rural people remember all those dunnies), or hold the line.

    Which is partly why I’m such a fan of going nuclear for real, while cutting renewables adrift. If you want to go to net-zero, like whenever, the roadmaps laid out by the Matt Kean’s of this world are the very last way you’d do it.


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  19. This is already happening in China. You jay walk, the street camera picks up your face, automatically identifies you.

    I’m sceptical.

    A Chinese bloke I knew once told me – “you round-eyes all the look the same to us”

    So why wouldn’t that also be the case with Chinese people?
    moderated

  20. I like the Frog and Scorpion analogy. I can see the relevance but it is painfully obvious that those in power cannot. They are blindly being pushed by the rabid RE fraternity and as a previous commentator has said, kindergarten arithmetic will show the present push for solar and wind cannot work. Where I ask is the sound financial analysis of RE power generation costs? I mean the cost analysis that includes ALL the associated costs, ie upgraded to 750 kV DC transmission lines, augmented distribution lines to pretty well the whole country to accommodate all electric vehicles (that is huge and no one has put a dollar figure on it yet), storage to overcome 12+ hours with no sun (most RE advocates ignore the FACT that the sun only shine somewhat less than 50% of the time), the list goes on! In addition to lack of complete costing there is the absence of sound engineering investigation into the technical feasibility of the RE proposals. For example how is power from a large solar farm in the NT going to be made available to Melbourne or Sydney? A replacement of coal stations by solar and wind is a pipedream of RE zealots with no sound engineering or financial basis. Small compact nuclear plants are the only viable option. Clean, easy to locate near present power lines, these will ease the way towards widespread use of EVs. Come on RE proponents use your heads and think a bit.
    moderated

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