Coal?

[rukawa]

Coal is cheap. It could get cheaper. I guess this is one of those things that depends on what you believe.

 

I don't believe solar will be a viable alternative to coal.  There is no good way to store energy on the power grid. Grid stability is hugely important because the Power grid must perfectly match demand and supply at all times...PERIOD. Plus solar is unreliable and still very costly.

 

I don't think Shale Gas is sustainable. The decline rates are too high and required capital investment is too large. Most shale assets have been written down and guys like Rex Tillerson are outright stating that no money is being made. Eventually the shale adventure will end and probably with a number of bankruptcies. Once it does natural gas prices will go up.

 

EPA regulations may constrain the US but they don't constrain other countries. And EPA regulations can be changed easily if the next president is Republican.

[ItsAValueTrap]

Coal is cheap. It could get cheaper. I guess this is one of those things that depends on what you believe.

 

I'm not sure it will get cheaper.

 

We try to mine the most economic coal first.  Over time, the economics of coal will deteriorate because we mined the best stuff first.

The cost of labour and the cost of complying with environmental regulations is going up.  Politicians want to shut down coal plants to please their voters.

 

On the other side of the equation, technology could bring down the cost of production slightly.  But I just don't see any promising technology on the horizon.

 

Overall we can probably do cheap coal for a long time.

 

I don't believe solar will be a viable alternative to coal.  There is no good way to store energy on the power grid. Grid stability is hugely important because the Power grid must perfectly match demand and supply at all times...PERIOD. Plus solar is unreliable and still very costly.

 

I don't think Shale Gas is sustainable. The decline rates are too high and required capital investment is too large. Most shale assets have been written down and guys like Rex Tillerson are outright stating that no money is being made. Eventually the shale adventure will end and probably with a number of bankruptcies. Once it does natural gas prices will go up.

I mostly agree.

 

*Technology is bringing down the cost of shale gas somewhat.  We are getting a little better at fracking, longer laterals, and changing business practices to optimize shale extraction.  In some areas, the economics will improve once midstream infrastructure is built.

[topofeaturellc]

you don't use coal fired plants for grid stability.  I'm sure you could find a path from nat gas demand = higher price = higher coal prices,  but coal fired plants throttle up and down much more slowly than do modern gas fired plants.  Look at the case of germany where solar is a huge part of the network.  Even though there is a demand for power to fill in the gaps when the renewables aren't available, coal isn't being used to fill it.  Coal works best as baseload or at the low end of the mid merit where you can run most of the day. 

[yadayada]

disagree it could go much lower. 30% of coal mines are burning cash I think. If it goes much lower you would have to see a lot of new supply.. Or sharply reduced demand. But demand will grow, and I doubt much new supply will come online now.

 

A good way to play this is Emeco. Australia is lower cost then China with coal mining. So likely that more mines are shaken out in China first, and Australia will be the first to benefit. I would not like to pick most of the pure play coal stocks. This way you will have upside even if it does not pick up much. it is like a free option.

 

I do think solar will be the future. The more I read about Musk, the more I think batteries will come down quite a bit in price in the future. Solar price will go down and efficiency will go up. And if people have battery cars they might hook it up to their home and be completely self sufficient. With Musk's super battery factory, costs might come down a lot here. And this way you don't have to buy a battery just for your home. I think the Tesla S has a 85 or 60 KWH battery? Now the average household uses 30 kwh in 24 hours I think. Probably like 12-14 kwh of that is at night. So with a 60kwh battery, that would be less then 1/4th.

 

So solar will not come from the grid, but wil cause most people to use very little power on the grid. And I think at least 2/3 of the grid supplies residential. Add in companies putting solar on their roof, and utilities might get in trouble within the next 10 years. I mean cost of solar is coming within the range of wind power already. And solar will still get a very high effiency on cloudy days compared to sunny days, because most of the energy will get through the clouds. So You don't need to live in some tropical area to benefit.

 

Just google cost of solar, and you see plummeting cost graphs everywhere (even without subsidy). So even without batteries in most area's 40-50% of energy needs could come from solar for residential and some industrial area's. The average household consumes 20-30% more energy during the day.

 

This will probably also reduce the need for nuclear. Energy needs will be more variable, and nuke plants take some time to quickly shut down and start up.

 

Just my crazy speculation :D

[Liberty]

Solar is definitely the future, because it hasn't stopped coming down in price (how will coal fare when solar is half the current price? a quarter?), along with traditional batteries and the upcoming large scale liquid metal batteries that will be able to store MWhs of power. See:

 

 

Solar will shave off a good part of the profitable peak time during the day (it's already happening in Queensland in Australia), and others will end up with off-peak when selling electricity is a lot less profitable.

[yadayada]

Solar is definitely the future, because it hasn't stopped coming down in price (how will coal fare when solar is half the current price? a quarter?), along with traditional batteries and the upcoming large scale liquid metal batteries that will be able to store MWhs of power. See:

 

 

Solar will shave off a good part of the profitable peak time during the day (it's already happening in Queensland in Australia), and others will end up with off-peak when selling electricity is a lot less profitable.

 

im curious, why don't we use these already? I wonder how many charges there are without losing much of it's capacity? It seems the only real obstacles for wind and solar right now are some engineering and economies of scale problems. All we need is to set up the factories and start to crank large amounts of these things out for cheap.

[Liberty]

im curious, why don't we use these already? I wonder how many charges there are without losing much of it's capacity? It seems the only real obstacles for wind and solar right now are some engineering and economies of scale problems. All we need is to set up the factories and start to crank large amounts of these things out for cheap.

 

Why don't we have eletric cars yet? Well, these things take time to scale up, for prices to come down, for incremental improvements to make them good enough, for mindshare to be gained and trust to be built, to break down all the ways the old tech as encrusted into the world (ie. auto dealers trying to block Tesla from selling its EVs in many states, using old regulations and friends in high places).

 

What's important are the long term trends...

 

http://costofsolar.com/management/uploads/2013/06/price-of-solar-power-drop-graph.jpg

[topofeaturellc]

disagree it could go much lower. 30% of coal mines are burning cash I think. If it goes much lower you would have to see a lot of new supply.. Or sharply reduced demand. But demand will grow, and I doubt much new supply will come online now.

 

A good way to play this is Emeco. Australia is lower cost then China with coal mining. So likely that more mines are shaken out in China first, and Australia will be the first to benefit. I would not like to pick most of the pure play coal stocks. This way you will have upside even if it does not pick up much. it is like a free option.

 

 

You would need to figure out if the chinese government was willing to subsidize loss making coal mines and what level of return they would demand for reinvestment in capacity. 

 

It might actually be rational for them to keep cash burning mines running if it keeps employment up and insulates them from foreign issues.  Not to mention the chinese government has shown time and time again a willingness to accept a crazy low ROI if it promotes employment.

 

I suspect places like Indonesia will come off the supply curve before China - which implies a normal marginal cost lower than the data implies.

 

[rukawa]

I realize a lot of people on these boards believe the future is solar and believe in new battery technologies. I don't. And the people who actually run power systems don't. Like for instance the people who mathematically model supply and demand at OPG.

 

you don't use coal fired plants for grid stability.

 

Coal fired plants don't increase grid stability but they don't decrease it either. Solar and wind both increase grid instability hugely. Currently demand spikes are managed in a few ways: you run jet engines with Jet fuel which is incredibly expensive, if you are really lucky you have excess hydro power and you can just reduce/increase hydro to deal with changes in demand (Quebec does this for Ontario), or you use transmission lines and geographical diversity which doesn't always work.

 

Running jet engines with jet fuel because the sun is not shining is a hugely expensive way to avoid a blackout but scenarios like that are easily possible with huge amounts of solar power.

 

The problem here is that no one understands how difficult it is to run a power system. Its not like a market. In a market demand does NOT have to equal supply at all times. If it doesn't markets don't clear and you have stuff lying on shelves. Walmart does this everyday and doesn't blink an eye.

 

But on a power grid nothing can be left on the shelf for even one second. Demand must be mostly be equal to supply. Otherwise you will get changes in voltage and current and eventually blackouts. Small fluctuations are ok. But large ones have to be managed. For instance there is a spike in demand when people come home at around 5-6pm because people start turning things on. Solar and wind just make this much more unmanageable.

[frommi]

I realize a lot of people on these boards believe the future is solar and believe in new battery technologies. I don't. And the people who actually run power systems don't. Like for instance the people who mathematically model supply and demand at OPG.

 

you don't use coal fired plants for grid stability.

 

 

There is a huge political shift from using coal to using nuclear/gas/solar because of the polution caused by coal powered plants. That is something you shouldn`t underestimate and will drive the future away from coal, regardless if new technolgies will enable cleaner coal power plants (Because coal=polution is in everybodies head). And from a grid stability standpoint its even better to have more gas plants because you can switch them on/off a lot faster than coal plants. Most countries use nuclear power for the base load already, so there is no case for using coal at all for power generation. And my hopes in this regard for the very long term is that fusion power plants will replace nuclear power plants and solve all energy problems for a very long time. (But thats probably decades away, current estimates are for commercial fusion power plants around 2050.)

 

Some links:

 

http://www.forbes.com/sites/christopherhelman/2013/09/12/the-war-on-coal-goes-global-china-bans-new-plants-as-obama-epa-plans-killer-regs/

http://en.wikipedia.org/wiki/Fusion_power

 

So in essence not solar/gas will replace coal, but nuclear energy will do it in the next decade in china and fusion energy in the very long term worldwide.

 

[yadayada]

I realize a lot of people on these boards believe the future is solar and believe in new battery technologies. I don't. And the people who actually run power systems don't. Like for instance the people who mathematically model supply and demand at OPG.

 

you don't use coal fired plants for grid stability.

 

Coal fired plants don't increase grid stability but they don't decrease it either. Solar and wind both increase grid instability hugely. Currently demand spikes are managed in a few ways: you run jet engines with Jet fuel which is incredibly expensive, if you are really lucky you have excess hydro power and you can just reduce/increase hydro to deal with changes in demand (Quebec does this for Ontario), or you use transmission lines and geographical diversity which doesn't always work.

 

Running jet engines with jet fuel because the sun is not shining is a hugely expensive way to avoid a blackout but scenarios like that are easily possible with huge amounts of solar power.

 

The problem here is that no one understands how difficult it is to run a power system. Its not like a market. In a market demand does NOT have to equal supply at all times. If it doesn't markets don't clear and you have stuff lying on shelves. Walmart does this everyday and doesn't blink an eye.

 

But on a power grid nothing can be left on the shelf for even one second. Demand must be mostly be equal to supply. Otherwise you will get changes in voltage and current and eventually blackouts. Small fluctuations are ok. But large ones have to be managed. For instance there is a spike in demand when people come home at around 5-6pm because people start turning things on. Solar and wind just make this much more unmanageable.

yeah but solar will not be centralized. That means companies and residential area's will go off the grid. Which means more variance in power needs. Which means you need a lot of gas plants that can quickly ramp up and down. It means gas at night, solar by day. And on a rainy day you probably need more gas etc. So coal or nuclear will not do.

 

even without batteries, 55-60% of power is consumed during the day. So if everyone goes solar without batteries grid needs will go down by roughly 30-50%.

 

 

[topofeaturellc]

I am under the perhaps mistake impression that a modern CCGT is flexible enough for most standby power - especially when its for load rather than balancing - so its not quite as bad as needing aeroderivatives.

[jouni1]

I realize a lot of people on these boards believe the future is solar and believe in new battery technologies. I don't. And the people who actually run power systems don't. Like for instance the people who mathematically model supply and demand at OPG.

this. utilities bosses speaking off the record(liquored up) don't seem really enthusiastic about these new technologies. it's just PR/marketing.

[topofeaturellc]

I realize a lot of people on these boards believe the future is solar and believe in new battery technologies. I don't. And the people who actually run power systems don't. Like for instance the people who mathematically model supply and demand at OPG.

this. utilities bosses speaking off the record(liquored up) don't seem really enthusiastic about these new technologies. it's just PR/marketing.

 

nah - they've ALWAYS said this. ALWAYS.  I bet if you had asked them if Nat Gas would ever matter back in the 70's they would have scoffed.

 

The one valid point they make - although I think they overstate it by a magnitude is the extra costs associated with balancing a grid filled with small generators who want to sell into the market.

 

That's really the biggest problem, but its totally solvable - how to remunerate capital spent on assets that barely run but are required to keep things from breaking.

[yadayada]

Solar will be mostly of the grid. So if the value proposition is there for people vs grid power, and if power companies do not get the government to somehow ban solar, you will see a big decline in the need for grid power over the next few decades.

 

So who gives a flying fk what utility companies think, they will be obsolete for the most part within a few decades.

[jouni1]

 

Solar will be mostly of the grid. So if the value proposition is there for people vs grid power, and if power companies do not get the government to somehow ban solar, you will see a big decline in the need for grid power over the next few decades.

 

So who gives a flying fk what utility companies think, they will be obsolete for the most part within a few decades.

i believe centralized power generation has it's perks. it just makes sense. because of this i'm not sure a few decades is enough to kill off the electric utilities.

[Valueguy134]

I am under the perhaps mistake impression that a modern CCGT is flexible enough for most standby power - especially when its for load rather than balancing - so its not quite as bad as needing aeroderivatives.

 

Depends on the type of turbine and the plant and the situation you are in. A hot start will be very flexible as the turbine is essentially good to go.  From a cold start, it depends on the turbine.  I have built some plants where it's about 4 hours to bring online, others which much larger turbines that take a lot longer.  With combined cycle plants it takes a long time, mostly due to the fact that it is not economical to run it without the steam turbine (something that takes a very long time to bring online from a cold start upwards of 24hrs).

[SharperDingaan]

Coal is always going to be competing with gas, & be at a disadvantage - simply because it is the dirtier fuel (even after improving the actual combustion), & because it takes longer to spool up the plant. Gas is the cheapest fuel by which to manage erratic demand volatility, & it doesn't have to come from shale or conventional drilling. The world is full of easily accessible offshore methyl hydrate at depths that are not a problem; to get it out is a simple as raising the temperature at the end of a pipe in contact with the hydrate. The heat vaporizes the hydrate, & the change in pressure drives it to the surface. 

 

SD

[rukawa]

nah - they've ALWAYS said this. ALWAYS.  I bet if you had asked them if Nat Gas would ever matter back in the 70's they would have scoffed.

 

I was taught about power systems by a German Mathematician who works for OPG. The guy was careful, serious, extremely intelligent,  and had done a lot of work on supply/demand for OPG. When I say a lot of work I mean that they had the ability to model the whole supply stack for Ontario and the demand better than energy traders at banks. His focus was on modelling wind energy. His proteges actually went on to work at banks.

 

He was hugely skeptical of both wind and solar. And he thought the closing of coal power plants in Ontario was a huge mistake.

 

Its true the coal pollutes and has a disadvantage relative to Natural gas. But in my view Natural Gas supplies are not as easily available as people think. Shale gas has been hugely misleading in this regard because of the huge decline rates and the Wall Street hype.