Sunday, May 08, 2011

The escalating "carbon neutral" energy debate

We've procrastinated ourselves into such a narrow corner regarding energy and climate change that there are no "easy" resolutions to our dilemma. Options for a sustainable energy future remain, but the longer we wait to implement them, their deployment runs the risk of becoming more politicized and expensive.

Meanwhile, Gaia is not procrastinating. She will achieve a resolution with or without us. (GW)

The debate: Wind vs. Nuclear

By John Spears
The Star
May 6, 2011

Replacing the province’s nuclear generators with wind turbines would drive up power bills and eat up vast swaths of countryside, one analysis shows.

But advocates of renewable energy say the comparison doesn’t acknowledge the huge subsidies the nuclear industry receives from electricity ratepayers.

It’s a debate that’s likely to sharpen as a provincial election nears, the Liberal government defends its renewable power push and Ontario Power Generation moves forward on its proposal for new nuclear reactors.

Bruce Sharp of Aegent Energy Advisors analyzed the effects of replacing nuclear reactors with wind turbines. He concedes it is a theoretical exercise: “No one could seriously propose replacing all of Ontario’s nuclear power exclusively with wind.”

Some green power advocates who oppose nuclear would replace it with a combination of renewable sources — including solar and hydro power, as well as wind — plus aggressive conservation programs and some high-efficiency gas-fired generation.

But Sharp made the analysis to demonstrate that bringing in massive amounts of renewable power isn’t as simple as it seems.

In 2010, Ontario nuclear plants churned out 82.8 billion kilowatt hours of power. That meant the province’s 10,500 megawatts of nuclear generation capacity ran on average about 90 per cent of the time.

Replacing that with wind power is complicated because the wind is variable. On average in Ontario, it runs at 27.8 per cent capacity, Sharp figures.

That means if a turbine theoretically produced 100 megawatt hours of electricity if it ran flat-out without stopping year-round, under actual wind conditions it would only produce 27.8 megawatt hours.

So replacing nuclear output with wind turbines that have a lower energy output means the turbines would have to have a much higher generation capacity — 34,000 megawatts, compared with nuclear’s 10,500 megawatts.

The turbines would cover 14,200 square kilometres of territory — that’s a square with sides of almost 120 kilometres.

Wind also requires backup generation: Sometimes there is no wind at all, but residents and businesses still need power. Building enough natural gas-fired plants to back up the turbines, and buying gas to fuel them, would cost $1.92 billion a year in capital and extra operating costs, Sharp calculates.

Occasionally, wind will also overproduce, blowing hard when there is little demand and producing surplus power — as has happened on several occasions this year.

There’s a cost to selling surplus power at a loss, and a cost in building new transmission lines to service widely dispersed wind farms.

Putting all of these theoretical costs together, Sharp figures that replacing nuclear with wind, and building the gas-fuelled backup systems, would cost the power system an extra $7.7 billion a year. That, he calculates, would translate into an increase of 5.6 cents a kilowatt hour on the power bills of most Ontario consumers.

For a household using 800 kilowatt hours of power a year, the increase including GST would be $632 a year, Sharp figures.

If that sounds like enough to make consumers want to stick to nuclear, green-power advocates argue that the economics of nuclear have their drawbacks, too.

Nuclear also gets a deal from ratepayers in the form of special contracts that are considerably higher than the spot-market price.

Consider that the average spot price of power on Ontario’s electricity market in 2010 was 3.79 cents a kilowatt hour — compared with only 3.16 cents in 2009.

Ontario Power Generation sells its nuclear output for a contracted price of 5.6 cents a kilowatt hour.

Bruce Power has a more complicated arrangement. The output from its Bruce A station — in which two of four units are still undergoing a refurbishment that is years behind schedule and far over budget — fetches 7.2 cents a megawatt hour, according to the Ontario Energy Board.

Output from the Bruce B plant is supported by a floor price of 5.1 cents a kilowatt hour. Since the average market price has been below the floor price, it has triggered substantial payments.

Keith Stewart of Greenpeace estimates payments under the floor price may have totalled as much as $250 million in 2010.

The Ontario Power Authority and Bruce Power said the payments are confidential and wouldn’t comment.

The power authority releases only a global total of what it pays to all generators who have contractual deals — which includes nuclear operators, gas-fired generators and renewable power generators such as gas, wind and solar.

Most of those contracts pay prices higher than the average market price.

The total payout for all the contracts was $1.62 billion in 2010, up from $1.4 billion in 2009.

Consumers make up the difference through an extra charge called the “global adjustment” or “provincial benefit,” which is adjusted monthly, and now often equals or exceeds the actual price of electricity.

Thursday at 9 a.m., for example, the hourly electricity price was 3.25 cents a kilowatt hour; the global adjustment was 4.3 cents.

Premium prices being paid for renewable energy are often blamed for Ontario’s rising power prices, Stewart says.

But he argues they’re not the chief culprit.

“It’s these types of nuclear top-ups, and to a lesser extent gas contracts, that’s actually driving the provincial benefit,” Stewart contends.

And new-build nuclear plants will require even higher prices if they are going to cover their costs, he says.


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