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Thursday, May 19. 2011

Energy costs

h/t SDA


Posted by Bird Dog in Hot News & Misc. Short Subjects at 10:41 | Comments (16) | Trackbacks (0)

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This has been one of my points...well, forever....

Capital (upfront) costs for implementation of alternatives, versus ongoing (but rising) costs of traditional energy makes alternatives a horrendously LONG TERM investment. Few have relatively good payouts (if they have one at all).

A time is approaching where this won't be true - but one drawback is (based on current economic conditions) we may not have money to spend on upfront costs at that point.

This, by the way, is not an argument for government intervention now. In fact, it's an argument to keep government OUT because if it gets to involved NOW there will be tremendous economic loss - making the future econmic situation just that much more severe.

There will not be any substantial "gains" by switching to alternatives, only a shift in payments for utility costs (and a presumed, but in no way assured, reduction in those costs over time).

That said, I remain steadfast in my belief that the correct argument for alternatives is the need for competition in the marketplace. The Ed Begleys of the world can keep the alternative market moving until the guys like you and me can actually afford it. Ed can't seem to realize that it works for him because he has money to burn - but that's ok, I respect his willingness to be economically absurd because it makes him feel better about himself.

I also remain steadfast in my belief that there are SOME alternatives which make alot of sense right now if instituted well. Such as geo-thermal. The payout on this is a good one, not too long term, and current methods could allow for 2 homes which happen to be close to each other (such as my neighbor and I) to split costs, thereby reducing the payout time further.

Now, if I could only get my wife to LIKE the idea of geothermal.............
#1 Rick on 2011-05-19 10:53 (Reply)
You're right.

With the decline of the dollar and rising taxes on energy, the best investment for myself is to pay for a renewable resource upfront with my capital, instead of paying a la carte over time.

I will pay in 2011 dollars for energy used in 2031.

As a bonus, my house will be warmer/cooler and my lights will stay lights on if the energy distribution channels get disrupted.

Also, missing on the chart is Solar-Air and Solar-Water which has better ROI than Solar-PV.

Mike
#1.1 Mike on 2011-05-19 14:30 (Reply)
Why is the conventional oil entry at ~$20 capital cost per barrel? It's now around $100.
#2 BBen on 2011-05-19 10:55 (Reply)
Production cost., over life of project.
#2.1 Bird Dog on 2011-05-19 11:03 (Reply)
Off-shore oil (deep or shallow water)? Saudi Oil?
#2.1.1 BBen on 2011-05-19 11:14 (Reply)
I am having a real hard time buying the numbers on ethanol and bio diesel.

Ethanol is as good a deal as coal generated electricity? Seriously?
#3 B Moe on 2011-05-19 12:53 (Reply)
One problem with building energy solutions, is that as soon as we do so, we become dependant on such. Many Americans are bloated, pampered and spoiled. At least compared to our fit, resourceful and self-reliant forbearers.
#4 Commander Clopfelter on 2011-05-19 14:10 (Reply)
I used to be bloated, but then I soiled my Pampers.
#4.1 Big___Al on 2011-05-19 14:22 (Reply)
Our forebears weren't all that fit. And part of the reason the ones who WERE fit was due to all the work they did just keeping their renewable resources renewed!

Chopping wood, patching cracks in the cabin so snow didn't drift in, etc.

We DO become dependent, but mainly because our energy sources are more steady and reliable than theirs were - and that's a good thing. Now, I'd be happy to sacrifice a little of the reliability for a little extra work and lower costs. I think many people would be willing to do that.

But many others are happy to just sit back and toast in their homes at 77 degrees as they watch TV. Hell, Obama keeps the White House at a balmy temperature even as he rails against people wasting energy!!

Fact is, there's nothing wrong with being lazy OR wanting to be comfortable. But there is something wrong with not wanting to work in order to be that way (sure, it's a conundrum - you can't be working and be lazy....but if you've worked long and hard enough, you have the right to be lazy!!)
#4.2 Rick on 2011-05-19 16:21 (Reply)
What I say is true. Not preaching or judging but just inserting the Law of Unintended Consequences into the discussion. For many politicians, it’s the beauty of the system.

Me, the effort of going from fat, drunk and stupid to strong, informed and self-reliant has been worth it, but certainly not without unintended consequences of their own.
#4.2.1 Commander Clopfelter on 2011-05-19 17:24 (Reply)
I heard yesterday, on the radio, a man who installed wind turbines explain that in order to get maximum efficiency from the turbine mechanism, they had to make the works very lightweight. That factor meant that the useful life would be about half as long as expected, so that it would have to be replaced in only about five years. Confirmed by Chris Horner from his knowledge of Danish wind farms (His wife is Danish).

Elsewhere, I've seen indications that offshore turbines are subject to unexpected damage from salt water. Some offshore installations lasted only a couple of years before having to be replaced, and both installation and replacement are exceedingly difficult offshore, as well as hugely expensive.
#5 The Elephant's Child (Link) on 2011-05-19 14:49 (Reply)
I think it might be instructive to compare some of the alternative energy sources the way we in DoD compare weapon systems. A new helicopter is not unlike a wind turbine; a nuke plant is not unlike a new fighter or a ship. You have non-recurring costs up front, then acquisition costs, then operations and maintenance, and finally, disposal costs. Overlaying these separate cost accounts is the useful service life, making assumptions about utilization rates. And then replacement costs start the accounting over.

I suspect this has not been done, at least as far as e.g., wind farms. I've recently learned that wind farms are extremely maintenance-intensive and somewhat failure-prone. I wonder if this knowledge has been factored into these top-level cost estimates?

TC
#6 Leatherneck on 2011-05-19 17:12 (Reply)
The coal vs nuclear comparison is very site-specific.

Here in California, we have no local coal resources and coal would have to be delivered by train over the Sierra Nevada or by barge from who knows where. That gives nuclear a big cost advantage.

In North Dakota, there's LOTS of easy-to-get-at coal and costs disfavor nuclear.

In either case, they sure beat wind and solar.
#7 Joseph Somsel on 2011-05-19 17:13 (Reply)
You'd actually be very surprised how little transportation adds to the cost when bulk shipping. I had a friend who while working for a shipping company in Honolulu ran the numbers on how much shipping costs added to the cost of toilet paper. Turns out only $0.02/pack. What jacked up the price was storing it in warehouses using up high priced land on Oahu.
#8 JKB on 2011-05-19 17:24 (Reply)
I also, like Rick above, have been trying to persuade my wife on the idea of geothermal. It sounds promising, but I'm not sure I'm persuaded myself yet!

There's a rather large upfront cost, especially for an individual homeowner, but the scary part for me is that they only claim maybe a 25-year life span for the underground system components. Skeptic that I am, I assume it will be less, requiring some expensive reworking.

I'm not sure I have a 25-year life span ahead of me anyway, so maybe it doesn't matter...
#9 Big___Al on 2011-05-19 20:57 (Reply)
Useless oversimplifications.
Doesn't matter if they come from left or right in the debate - they're still useless.

Photovoltaics are VERY cost effective in certain applications - like lighting and phone service along remote highways, and to power irrigation and other remote equipment.

To get the numbers on your table - somebody probably decided to ignore niche uses of renewables, and focus on how cumbersome they are to scale up.

Which is dishonest in addition to oversimplified.

When it comes to this topic - suddenly the champions of innovation become Luddites. Sure, let's let the market determine how these new technologies are used. But pissing contests like this table get us nowhere.
#10 Ben David on 2011-05-20 04:29 (Reply)

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