BBC on Oil - are low prices here to stay

CLAPTON

antrobus wrote: »

Well, there you go folks!

There might well be whole global effort out there to reduce Co2 emissions with a big showdown scheduled in Paris for the end of the year, but now we know that all "this stupid green nonsense" is just a waste of time, as we are all going to carry on burning up fossil fuels as per usual.

there will be no 'showdown' in Paris or anywhere else; where ever does that mean?

antrobus

CLAPTON wrote: »

there will be no 'showdown' in Paris or anywhere else; where ever does that mean?

It means that there is a UN Climate Change Conference scheduled for Paris in December 2015 where the intention is to get everybody to agree to legally binding carbon emission targets.

Don't you ever read the news?:)

CLAPTON

antrobus wrote: »

It means that there is a UN Climate Change Conference scheduled for Paris in December 2015 where the intention is to get everybody to agree to legally binding carbon emission targets.

Don't you ever read the news?:)

there have been numerous conferences with intention for results.
'legally binding' has no basis in law.

haven't you read the newspapers for the last 30 years?

Martyn1981

cells wrote: »

The value of solar output (or the output of any source you cannot control) is worth only the unit of energy saved not the whole system cost.

The unit of energy saved will vary by location, eg in the USA nat gas is some 1 cent a unit and to turn that into electricity in a CCGT at 50% equates to just 2cents


From memory I remember the EIA released a paper showing OV costs now and projected into the future for ground abd residential rooftop and it was roughly half the price for large scale ground which makes sense from economies of scale and the fact you don't need as much labor to install ground vs scaffolding and roof works


The opex as you say can't be lower for a thousand units dispersed aroind the country on top of roofs vs a farmer field all in ome place. If something goes wrong and it will then fixing it is easier on ground and all in one place. Also ground mount allows over sizing the oanels vs tje inverters which helps lower cost.

Cheers that makes more sense. But should you be pricing natural gas in US prices when ours is about 3X more. Also you need to consider the CO2 cost. I appreciate that AGW may not be accepted by some, but the whole point of trying to displace FF's is to reduce CO2 production. If it has no value, then there's no point in renewables.

Definitely accept that large farm scale PV will be cheaper than domestic roof mounted, but I'm still not sure about that 2X figure unless that's simply comparing CapEx. Also note that whilst scaffolding costs are saved, you can't ignore the substantial cost of the ground mount, the ground preparations, and the installing of that ground mount. There's also the administrative costs, legal, planning and grid connection fees.

Regarding Opex. Whilst I accept that faults may occur, they are highly unlikely with PV. So I was referring to the zero annual running costs of domestic PV, v's the annual running costs of farm scale, since land, insurance and security have to be considered.

I think most installers recommend undersizing inverters for domestic installs too. Perhaps 10 to 20% depending on location and orientation.

Too further complicate the issue however, you also have to remember that farm v's domestic operate in different markets, supply side v's demand side, so the relative income streams also differ, which has a serious effect on their economics. Supply side sells into a market priced at roughly 5p/kWh whereas demand side operates in a market which has a value closer to 15p. In fairness though, since around 2/3 will be exported, I suppose a weighted average of around 8p/kWh is probably fairer.

Anyway, certainly one to watch, especially with the recent CfD auction results where PV was even cheaper than on-shore wind, with winning bids of £50/MWh, though I personally struggle to believe that PV can deliver that (essentially subsidy free leccy) yet. But we'll see.

Mart.

cells

Martyn1981 wrote: »

Cheers that makes more sense. But should you be pricing natural gas in US prices when ours is about 3X more. Also you need to consider the CO2 cost. I appreciate that AGW may not be accepted by some, but the whole point of trying to displace FF's is to reduce CO2 production. If it has no value, then there's no point in renewables.

Definitely accept that large farm scale PV will be cheaper than domestic roof mounted, but I'm still not sure about that 2X figure unless that's simply comparing CapEx. Also note that whilst scaffolding costs are saved, you can't ignore the substantial cost of the ground mount, the ground preparations, and the installing of that ground mount. There's also the administrative costs, legal, planning and grid connection fees.

Regarding Opex. Whilst I accept that faults may occur, they are highly unlikely with PV. So I was referring to the zero annual running costs of domestic PV, v's the annual running costs of farm scale, since land, insurance and security have to be considered.

I think most installers recommend undersizing inverters for domestic installs too. Perhaps 10 to 20% depending on location and orientation.

Too further complicate the issue however, you also have to remember that farm v's domestic operate in different markets, supply side v's demand side, so the relative income streams also differ, which has a serious effect on their economics. Supply side sells into a market priced at roughly 5p/kWh whereas demand side operates in a market which has a value closer to 15p. In fairness though, since around 2/3 will be exported, I suppose a weighted average of around 8p/kWh is probably fairer.

Anyway, certainly one to watch, especially with the recent CfD auction results where PV was even cheaper than on-shore wind, with winning bids of £50/MWh, though I personally struggle to believe that PV can deliver that (essentially subsidy free leccy) yet. But we'll see.

Mart.

Thats the thing it doesn't matter if the PV is installed in your roof or in a farmers field the true value to society is just the unit of fuel saved.

think of it this way, UK PLC needs to import coal and gas. What is the difference between installing 10MWp on a farm or 2000 x 5KWp on roofs to the import bill? Nada

you can account for it 15p or 5p or whatever but its just a transfer from one account to another the true value is only the marginal gas saved.

and yes gas is more expensive here than the USA but not as much as you suggest. Summer gas prices (when PV output is highest) will likely be around the 40p/therm marl and maybe lower. That means 1.3p/kwh. Convert it to electricity at 55% in a ccgt and you have 2.35p/kwh as the true value of PV output in the UK

any figure you choose above that is fiddiling to make PV look more attractive.



the above is true for PV and wind because they are uncontrollable. If you have a controlanbe source (or an uncontrollable one that just happens to peak at the right time eg PV in grids that peak around mid-day in hot nations) then the true valie is closer to 5p/kwh as it allows you to shut down other plants


and if you use thay real figure of 2.35p/kwh you find PV is worth very very little. A 4kwp system in the UK generating 3800kwh a year is only worth ~£90/year to the UK in saved fuel.

cells

CLAPTON wrote: »

there have been numerouss with intention for results.
'legally binding' has no basis in law.

haven't you read the newspapers for the last 30 years?

Politicians can write into law a legally binding collective certainty that the sun will rise from the west but it wont happen

For all the hot air about paris no seriois government agency believes fossil fuel use is going to stop rising let alone go flat or reverse. Individual countries may fall in output thanks to cherry picking a nice start date and small efficency gains but that will be more than offset by poorer countries who dont want to be poor anymore


anyway the technology that have true promise in stopping FF use growth are

Robo cars
Combined coal gas turbines (aka burning coal at 60% efficency)
Nuclear

Windpower might be capable of producing upto 20% of primary energy but creates lock in. Also its unknown how global wind patterns might change if we tried to generate a continuous 3TW from wind-poweer.

Martyn1981

Thanks cells, interesting. I do buy into your argument of the saved value of gas, and accept that gas was around 40p/therm last summer, but in the previous years it was nearer 60p, so it's hard to make long term decisions when prices are so in flux. But as I said these savings, be they 2.35p, or 3.5p don't include the value placed on carbon savings.

I appreciate that some still don't accept the need to reduce CO2, but the roll-out of renewables is largely based on the need for CO2 reduction, so that cost can't be ignored.

The reason I pointed out the different economics of demand side v's supply side PV was to address your comments that any PV would logically be supply side because it's cheaper. However, the point I was trying to make was that the different income streams can make up for that, so rooftop PV isn't at an economic disadvantage so there's no reason to believe that large scale ground mount systems will outdo smaller rooftop installs. In fact, looking at the commercial rooftop sector, they will benefit from most of the cost savings from size, but have an income stream of approx twice that compared to the supply price of leccy since they'd expect to consume most generation on site, off-setting import (supply side) leccy prices.

For now though, I can't see oil prices rising too far any day soon, so your off-setting of gas costs is probably reasonable, but I don't think carbon costs should be dismissed.

Back to the recent CfD auction, it'll be interesting to see if there's any fallout regarding nuclear (pun intended) since both PV and on-shore wind were far cheaper today, than the proposed costs for nuclear in 2023+. Looking at off-shore wind bids, it also looks like they'll be undercutting nuclear too by the early 2020's.

This decade is certainly one of change, I guess it's just the scale that is uncertain.

Mart.

Generali

cells wrote: »

it does not matter if the panels are in Australia or china or Zimbabwe the output is worth only the saved fuel not the full system cost. As such the value of solar PV oitput is very low in the order of 3cents per kwh.

Even in Australia a 1kwp system operating at 25% CF is worth just 45 dollars a year in true value. 2200kwh generated at a true value of 2cents/kwh. It doesn't matter if retail prices are 20 cents the true value to society is 2cents as thats the only true gain.

Why wouldn't the value be the fuel plus my share of the costs of running the power station that is no longer needed.

If I can find a way to store the electricity then you can add to that the price of the 'poles and wires', i.e. the infrastructure that gets the electricity to me.

In all honesty I don't care about the value to society as that sounds like one of those dangerous communist ideas, I just care about the price I pay. It is starting to become a problem in Aus that a lot of people now effectively have no electricity bill so who pays for the multi-billion dollar bill for the coal-powered power station? The solution will be to increase the standing charge on the electricity bill or reduce again the feed in tariff. That will simply drive more people to look for storage solutions.

The economics of solar remind me of the economics of the zombie robot driving apocalypse: once people start to do it the rest are forced to by the numbers. You can only afford power stations as currently configured if you have everyone using them.

cells

:eek:

Martyn1981 wrote: »

Thanks cells, interesting. I do buy into your argument of the saved value of gas, and accept that gas was around 40p/therm last summer, but in the previous years it was nearer 60p, so it's hard to make long term decisions when prices are so in flux. But as I said these savings, be they 2.35p, or 3.5p don't include the value placed on carbon savings.

I appreciate that some still don't accept the need to reduce CO2, but the roll-out of renewables is largely based on the need for CO2 reduction, so that cost can't be ignored.

The reason I pointed out the different economics of demand side v's supply side PV was to address your comments that any PV would logically be supply side because it's cheaper. However, the point I was trying to make was that the different income streams can make up for that, so rooftop PV isn't at an economic disadvantage so there's no reason to believe that large scale ground mount systems will outdo smaller rooftop installs. In fact, looking at the commercial rooftop sector, they will benefit from most of the cost savings from size, but have an income stream of approx twice that compared to the supply price of leccy since they'd expect to consume most generation on site, off-setting import (supply side) leccy prices.

For now though, I can't see oil prices rising too far any day soon, so your off-setting of gas costs is probably reasonable, but I don't think carbon costs should be dismissed.

Back to the recent CfD auction, it'll be interesting to see if there's any fallout regarding nuclear (pun intended) since both PV and on-shore wind were far cheaper today, than the proposed costs for nuclear in 2023+. Looking at off-shore wind bids, it also looks like they'll be undercutting nuclear too by the early 2020's.

This decade is certainly one of change, I guess it's just the scale that is uncertain.

Mart.

The true saving to the nation is just the fuel saved eveything else is internal account fiddling to make Johns account look better at Jane expense.

LNG is booming right now with the USA expected to start exporting by end of this year and Australia gearing up to become a big LNG exporter so I would expect prices to be very competitive over the next few years.


one off nuclear is too expensive the UK should opt for 25GW and ditch the wind/PV or not do nuclear at all and just keep fossil fuels and efficency

The cost of co2 as you put it, is just imaginary there is no cost of expelling co2 into the air. A cost might be placed on co2 but it will be totally artifical. Also as I have noted the IPCC expect some 70 years of positives before any net negatives (so by your cost on co2 model shoild we pay a bonus to coal plants as they are creating a 70 year positive?)


Perhaps the most effective thing that could be done is for the rich nations to subsidise into existence robo cars (-80% fuel use) and coal gas turbines (cheap 60% efficient coal plants). Those two can do far far far more than any realistic deployment of PV or Wind or Nuclear or all three of them combined.

cells

Generali wrote: »

Why wouldn't the value be the fuel plus my share of the costs of running the power station that is no longer needed.

If I can find a way to store the electricity then you can add to that the price of the 'poles and wires', i.e. the infrastructure that gets the electricity to me.

In all honesty I don't care about the value to society as that sounds like one of those dangerous communist ideas, I just care about the price I pay. It is starting to become a problem in Aus that a lot of people now effectively have no electricity bill so who pays for the multi-billion dollar bill for the coal-powered power station? The solution will be to increase the standing charge on the electricity bill or reduce again the feed in tariff. That will simply drive more people to look for storage solutions.

The economics of solar remind me of the economics of the zombie robot driving apocalypse: once people start to do it the rest are forced to by the numbers. You can only afford power stations as currently configured if you have everyone using them.

Think of it this way.

a city with a tube system
everyone uses it twice a day every day
£5 per day ticket

You along with everyone else decide to save some money by purchasing a bicycle to use 1 day a week and save £5 a week

the tube system now has virtually the same costs so needs to up its price to £5.83 to survive and you need to pay ot as you need the tube


You go from £5 a day x 7 days = £35
To £5.83 a day x 6 days = £35

Aka no saving

The only way you can get a saving is by using your bicycle everyday and not touching the tube. Or...use your PV cells off grid...but that is not possible and far more expensive.



So in Australia where coal is plentiful and cheap you might have 2p guel cost and 18p other to make 20p total. Your PV panels onlu truly save the 2p not the 20p. Anything above the fuel saving is just an internal accounting trick.


also even disregarding all of this, lets say that PV cells are 1/10th the price they are now which isn't possible imo....what will happen is that at some point adding more PV means the added PV will be paid nothing or a negative figure as its addog power when none is needed. A so called saturation point. And that happens between 15-30% of a grid leaving thr other 70-85% as coal and gas. Unless some form of storage is made cheap enough...but that isn't possible for simple physics reasons