Saturday, 9 January 2016

Every new investment in renewable capacity is delaying GHG emissions reductions

by Peter Lang, January 9, 2016 at 1:22 am

... The important point that those who are concerned about reducing GHG emissions do not understand is that every new investment in renewable capacity is delaying GHG emissions reductions. They just don’t understand this, or don’t want. I’ve tried to explain it below (hopefully someone else can explain it more clearly).

Incentivising renewables is delaying progress to substantially reduce GHG emissions from electricity generation. Here’s why:

Developed countries need to develop the technologies the world can use to generate electricity and reduce GHG emissions (if that is required). Therefore, developed countries need a market in their own country to use the technologies so they can learn by doing and demonstrate they are viable for other markets to use – that is the country that develops them needs to demonstrate them.

The electricity system in developed countries is mature. Therefore, growth is limited to roughly a little more than GDP growth rate over the long term. Therefore, most new power stations are built to replace existing plants when they become uneconomic, rather than to meet demand growth.

Economic lives for a selection of technologies are roughly:

  • Hydro = 60-100 years
  • Nuclear = 30-60 years
  • Coal = 50 years
  • Gas = 30-40 years
  • Wind= 15-25 years
  • Solar = 15-25 years
  • Nuclear = 30-60 years

Now consider that a coal plant in a developed country is no longer economically viable. The owner decides to shut it down and replace it with something else. The owner does an options analysis. He takes into account the potential lives of the pants, the amortisation period and the cost after all incentives. With nuclear so heavily disadvantaged by many impediments (amounting to a factor of 4-10 increase to electricity costs) and renewables massively advantaged (by at least a factor of 2), the renewables plus gas back-up option is likely to be selected. You’ve now locked in about a four decade delay until that plant is due to be replaced again. Keep doing that each time a fossil fuel plant is due for replacement and you’ll never make any headway on reducing emissions or in developing low cost, low emissions electricity generation technologies for the world.

Reminder: nuclear is 100% effective at reducing emissions from the fossil fuelled electricity generation plants it displaces. However, that is not the case for intermittent, fluctuating, weather dependent renewables. The CO2 abatement effectiveness of these renewable technologies decreases as penetration increases – approximately 50% effective at 20% penetration.