Category Archives: Fossil Fuels

Coal, oil, etc

This is how Big Oil will die

Seth Miller, The Medium, 24 May, 2017.

It’s 2025, and 800,000 tons of used high strength steel is coming up for auction.

The steel made up the Keystone XL pipeline, finally completed in 2019, two years after the project launched with great fanfare after approval by the Trump administration. The pipeline was built at a cost of about $7 billion, bringing oil from the Canadian tar sands to the US, with a pit stop in the town of Baker, Montana, to pick up US crude from the Bakken formation. At its peak, it carried over 500,000 barrels a day for processing at refineries in Texas and Louisiana.

But in 2025, no one wants the oil.

Let’s bring this back to today: Big Oil is perhaps the most feared and respected industry in history. Oil is warming the planet — cars and trucks contribute about 15% of global fossil fuels emissions — yet this fact barely dents its use. Oil fuels the most politically volatile regions in the world, yet we’ve decided to send military aid to unstable and untrustworthy dictators, because their oil is critical to our own security. For the last century, oil has dominated our economics and our politics. Oil is power.

Yet I argue here that technology is about to undo a century of political and economic dominance by oil. Big Oil will be cut down in the next decade by a combination of smartphone apps, long-life batteries, and simpler gearing. And as is always the case with new technology, the undoing will occur far faster than anyone thought possible.

And here is what is disruptive for Big Oil: Self-driving vehicles get to combine the capital savings from the improved lifetime of EVs, with the savings from eliminating the driver.

The costs of electric self-driving cars will be so low, it will be cheaper to hail a ride than to drive the car you already own.

Here is the full article

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Nuclear energy: the best option for South Africa?

Energize, Chris Yelland, May, 2017

Eskom appears to be more concerned with building new nuclear power stations than in signing power purchase agreements with independent power producers which use renewable energy sources. Energize caught up with energy analyst and managing director of EE Publishers, Chris Yelland, and asked his opinion of what generation technologies South Africa should opt for.

Chris, you are seen by many as an informed energy analyst and your views and opinion are highly regarded by people in the energy sector and the general public. However, there now seems to be a perception that you are opposed to nuclear energy. So where do you stand?

No, I am not in any camp – not in the renewables camp, and not in the nuclear camp. Being labelled in this way is a kind of personalisation of the issues that is unhelpful. It is a sign that the proponents or opponents are unable to address or answer the real issues rationally, and therefore resort to personalisation of the issues, labelling people and putting them into little boxes.

I am certainly not opposed to a nuclear new-build in South Africa on ideological or technology grounds. But there are real issues that both nuclear and renewable energy proponents must deal with.

What are these real issues that must be dealt with by the nuclear industry? Can you elaborate on them?

Firstly, there are public perceptions of political motives, political interference and corruption associated with  mega-project procurements. There are widespread public impressions that things are happening in secret behind closed doors, that due process is not being followed and that there are some rather sinister motives. Whatever we think of the perceptions, whether they are true or not, they actually need to be dealt with.

The high upfront capital cost and associated financing and affordability of such mega-projects is is an issue. One really has to deal with the high up-front capital cost issue, because it is one of the big drawbacks of nuclear.

We must also fully understand the levelised cost of electricity (LCOE) from nuclear power over the lifetime of the plant, taking into account the overnight capital cost, interest during construction, debt, fuel, operating, maintenance, decommissioning and waste disposal costs. The LCOE indicates the overall cost, in Rands per kilowatt hour of the electricity delivered from a nuclear power plant, in order to be able to compare it properly on a similar basis with other technologies.

Nuclear power stations take a long time to build, up to ten to twelve years per reactor, and mega-projects are prone to high cost and time overruns.

South Africa needs flexibility in an uncertain and unpredictable world, where electricity demand is difficult to predict in the years ahead, and disruptive technologies are on the horizon. Technologies such as wind, solar PV and energy storage may change the rules of the game.

Is it prudent to commit to a single technology and a single vendor for a fleet of mega-power projects with long lead times for 80 to 100 years in an uncertain world? Or would it be better to proceed with multiple, smaller projects with short and reliable lead-times, and lower price tags, that can be ordered and built flexibly to meet changing demand, economic circumstances and technologies?

These issues are not actually nuclear vs. renewables, but a issues of inflexible mega-projects vs. smaller flexible projects. So it’s not a question of being anti-nuclear or pro-renewables. It’s a question of giving oneself enough flexibility to deal with the real world in the decades and century ahead.

Here is the full article

The South African government hasn’t given up the fight for nuclear

Hartmut Winkler, Professor of Physics, University of Johannesburg, in The Conversation, 17 May, 2017.

Nuclear energy in South Africa is a highly contested issue; so much so that a court recently ruled against the government’s plans to issue a contract for the construction of eight new nuclear power stations.

The ruling appeared to have delivered a significant blow to President Jacob Zuma, and those who support him, who had set their sights on immediate nuclear expansion. The court’s decision was met with jubilation by those opposing the nuclear plan.

The expectation was that the government would appeal the decision. It didn’t, but this shouldn’t be read as a shift in its thinking.

Minister of Energy Nkhensani Kubayi made it clear after the court ruling that, while there would be no appeal, the government remained fully committed to nuclear expansion, and was planning to initiate a new process without delay.

This signals a realisation by government that an appeal would have little chance of success, and that a lengthy court process would tie up the parties in legal cases for months or even years. This would delay a nuclear build even further.

The minister has made it clear that the government is not giving up on its push for the controversial nuclear plan. But it has realised the process must start from scratch. This is the clearest indication yet that Zuma intends launching the nuclear build before his term of office ends in 2019.

Adding to fears that the government isn’t giving up the fight was the surprise reinstatement of Brian Molefe as CEO of the country’s power utility Eskom. Molefe left the job under a cloud six months ago. His reappointment led to immediate and widespread public outrage. Many have interpreted his return as beefing up the quest for nuclear.

Molefe’s return, however, isn’t as critical to the nuclear project as imagined, as Eskom has maintained his pro-nuclear stance in his absence.

What’s more important is that it’s clear that contestation around the future of South Africa’s energy sector will continue unabated. This despite the president having been severely weakened in recent months, and with it the power of the pro-nuclear lobby supported by his faction.

And here is the original in The Conversation

Eskom funding may be muffling dissenting voices on nuclear

EE Publishers, Micah Reddy, amaBhungane, 28 April, 2017

The lure of millions in Eskom funding appears to have muzzled two research institutions previously highly critical of the state-owned utility’s plans to procure a fleet of nuclear power stations.

In the case of the Council for Scientific and Industrial Research (CSIR) amaBhungane understands that the CSIR’s Energy Centre has been effectively gagged since a secrecy-shrouded meeting in March this year between acting Eskom CEO Matshela Koko and his counterpart at the CSIR, Dr. Thulani Dlamini.

In the other case, the Centre for Renewable and Sustainable Energy Studies (CRSES) at Stellenbosch University withdrew comments it had submitted for publication that were highly critical of Eskom’s nuclear plans.

In an email seen by amaBhungane, CRSES director Wikus van Niekerk said: “We receive significant funding from Eskom, some from a programme where Matshela is personally involved in, and I need to be careful how I react in public not to put this at risk.”

Eskom, the CSIR and CRSES have all denied that Eskom has in any way tried to rein in independent research or debate on nuclear or renewable energy options.

Case 1: CSIR Energy Centre

Several industry insiders, who asked not to be named, raised the alarm after the CSIR Energy Centre’s head, Dr. Tobias Bischof-Niemz, suddenly pulled out of an event on South Africa’s future energy supply in early April.

They told amaBhungane that a strong rumour had emerged that at Koko’s March meeting with the CSIR chief executive, Eskom had pledged a significant sum – R100-million was mentioned – for CSIR research on technology related to nuclear energy. AmaBhungane was unable to independently verify the claim.

While there is no evidence of any untoward quid-pro-quo, the same sources noted that the CSIR Energy Centre has withdrawn from other public engagements on renewable energy and South Africa’s future energy mix.

Adding to suspicions is the reluctance of both Eskom and the CSIR to disclose any detail of the meeting between Koko and Dr Dlamini.

Both institutions declined to answer questions about who attended the meeting, what was discussed and whether Koko offered the CSIR additional funding, as rumoured.

Eskom spokesperson Khulu Phasiwe told amaBhungane the two institutions have had a long-running partnership: “CSIR and Eskom continue to enjoy a strong relationship in spite of occasional, but understandable, disagreements. Interim Group Chief Executive, Mr. Matshela Koko, meets with our partners on a continuous basis and, by their nature, these meetings are confidential.”

Phasiwe said Eskom had R30,8-million worth of “multi-year collaborative projects” underway with CSIR and another R17,5-million worth were “actively under consideration”.

The CSIR insisted the organisation “did NOT receive any payments from Eskom in order to stop any research that we are conducting,” but ignored questions about Bischof-Niemz’s non-attendance at the April event where he was scheduled to give a presentation on renewable energy.

Up to now the CSIR Energy Centre has been vocal about its research on South Africa’s optimal energy mix, which suggested that the price of renewables had dropped to the point where government’s plan to procure 9,600 MW of nuclear power did not make financial sense.

By contrast, the CSIR’s recent formal response to the Department of Energy’s latest draft energy policy – the Integrated Resource Plan (IRP) – was quietly placed on the CSIR website in early April without publicity or further commentary.

Asked about this, CSIR spokesperson Tendani Tsedu said: “The organisation will not comment any further on the submission made to the DoE since the CSIR submission is already public information as indicated above. This will also allow the DoE to conclude its internal processes towards the finalisation of the IRP.”

Last year the CSIR Energy Centre began publishing the findings of its studies into South Africa’s future energy scenarios.

The groundbreaking research showed a strong preference for renewable energy and posed a major challenge to the case for nuclear, of which Eskom has been a strong proponent.

The results of the research were widely cited and the CSIR Energy Centre’s staff presented their findings at conferences, seminars and business and technical briefings. They also did not shy away from voicing critical opinions on energy matters in the media.

But sources close to the CSIR Energy Centre told amaBhungane that the Centre’s staff appear to have been muzzled and are now avoiding public engagements on their renewables and IRP-related research.

According to Dudley Baylis, energy director of Bridge Capital – one of the organisations involved in the April event where Bischof-Niemz was due to speak – the CSIR Energy Centre informed the organisers at the last minute that they were “unable to share their energy scenario work”.

Other sources say that the CSIR Energy Centre has recently had to cancel similar events and media interviews related to energy systems, and that Bischof-Niemz is subject to a virtual gagging order by CSIR’s management.

Approached for comment, Bischof-Niemz referred amaBhungane to the CSIR’s communications manager.

Here is the full article

Op-Ed: Eskom, a slow-moving train wreck

Daily Maverick, Dirk de Vos, 12 May, 2017

The South African government, it seems, loves policy-making space and resists anything that would constrain this space. It is therefore a pity that very little policy, good or bad, gets to be implemented. Part of the problem is the top-down approach to policy-making. It means that while we get a never-ending supply of policy documents, too little consideration is given to “the facts on the ground”

Not paying attention to practical implementation makes us vulnerable to poor ideas such as pursuing a nuclear build programme that keeps returning, zombie-like. A recent contribution by Rob Turrell using advice given to the Minister of Science and Technology by the respected National Advisory Council on Innovation (NACI) shows that practically speaking, South Africa simply does not remotely have the capacity to participate meaningfully in any nuclear programme.

As an investment company, Eskom is a slow-moving train wreck. A big part of the problem are the disastrous Medupi, Kusile and Ingula projects, its existing debt and the funds it is yet to borrow. Chris Yelland did a convincing calculation of the massive (up to now) cost over-runs and then the price at which Medupi and Kusile would have to supply electricity to the grid if they were stand-alone operations.

In short, the price that they could supply the grid when (if) they are completed is well above Eskom’s own selling price for electricity. Eskom disputes Yelland’s calculations but refuses to disclose the details of its own. It should be noted that Eskom cannot even provide the required information to the regulator to enable it to make a tariff determination. Bluntly, Eskom is borrowing to continue financing the construction of stranded assets. …

Here is the full, depressing article