Saturday, 9 April 2011

Response To Turton & Co...

This will be my last comment on that thread at Turton's place, as the three of them (Turton, "M" and Robert Scott Kelly) do not seem to be seriously interested in considering the costs of increasing the proportion of Taiwan's total electricity generation from renewable sources to 25%. I wish I hadn't brought up that report on Scotland, as it just gave Turton a technicality with which he could deliberately evade the logic of my argument, which is valid. Another self-criticism would be that I haven't made enough of the load management problems associated with wind power and other renewable sources (although those problems can be solved). Turton's remarks in italics, mine in regular type-face.

* * *

"It clearly states that the upward pressure on prices is not seriously affecting the wind industry."

The wind industry in Scotland was built up incrementally - the price changes do not affect those wind turbines already built, but those which are planned for the future. Different assumptions must be made in Taiwan because Tsai has openly talked about replacing nuclear power (18% of total electricity production), and the environmentalists have gone even further and suggested 25% (and no doubt some will be pushing for a figure of 28%-30% in order to replace coal). Whereas in Scotland landowners were not in a position to know the scale of the demand for wind turbines before setting their prices, this is far more likely to be the case in Taiwan because of Tsai's announcement - one which makes her seem moderate in comparison to some of her supporters. The farmers association will already be thinking about this because they are going to make a killing if they play their cards right.

"Robert has already pointed out that fallow land is in huge supply in Taiwan, never mind that the amount of land which your simplistic calculations identify is only a tiny plot compared to the 32000 square kms Taiwan has."

My calculations are simple because the problem is simple. What simple Robert failed to grasp was that acquiring many plots of land on that sort of scale has significant cost implications. Only 2000 square kilometres might actually be available and all of it controlled by farmers - who are politically organized enough to dictate the financial terms of any lease arrangements, assuming the State does not coerce them. Since the farmers control the limited supply of land, and they are looking at essentially one buyer (Taipower, via a Tsai government) there are only two reasons why they would not take advantage of this: one is that the government may threaten to cut their subsidies and other benefits, whilst the other is that the government may threaten them with force. That doesn't mean the windfarms could never get built - but it does mean they would likely cost far more than they would if the State was not involved in either agriculture or energy. Wind power is great, but trying to do it on the sort of scale being talked about would be a serious blunder.

"Believe it or not, not only can existing technology fulfill Tsai's demands but future wind technologies will perform even better -- Norway has just deployed the first 10 MW floating wind machine which can be placed in really deep water where constant and powerful winds blow."

Those existing technologies are called combined-cyle gas turbines.

I am aware of the 10 MW turbines in Norway: the prototype cost almost NT$2 billion. Let's assume the production version would cost 10% of that at NT$200 million. Let's further assume that, because of technological improvements and a suitable wind environment (an assumption which might not be transferable to Taiwan - I don't know), such a 10 MW turbine will operate at 50% efficiency across a year. In order to replace nuclear power in Taiwan in electricity volume alone (leaving aside the cost implications of load management), a minimum of 820 of those turbines would have to be built. If we were to be more cautious and assume an average efficiency of 25%, then 1,640 of them would have to be built. In capital costs alone therefore, at NT$200 million per turbine, we're talking between NT$164 billion and NT$328 billion. And then there will be the maintenance, power transmission and grid connection costs - costs which are significantly lower for either a nuclear or a gas-fired power plant.

"You tend to think of wind as a "mature" technology without really thinking that wind is a package of technological systems, many of which are still in their infancy (like deployment and siting techs) while others are moribund and likely to see revolutionary development when the switch to renewables occurs (like transmission tech and transmission system organization technologies)."

That may well be so (although those improvements will most likely be marginal) - but the context for this debate is the 14 year time frame in which a Tsai administration would like to phase out nuclear power in Taiwan and replace it - or perhaps even exceed it - with renewables like wind. Even if those revolutionary changes do occur in the next 14 years, they will have to occur before any investment decisions are made.

"...overcoming Taipower's aversion to it, as well as reforming Taiwan's hidebound regulations."

Get the State out of both agriculture and energy.

* * *

I corrected some minor typos.


  1. I'm concerned about Turton's thought processes. If your post is indicative of his overall argument, he's arguing for both more and less state intervention, confiscating private property (which only the state can do, evidently, because the leftists would certainly condemn any corporation for doing so) and, as you quote, "...overcoming Taipower's aversion to it [I'm assuming here he means wind power/a combination of alternative energies], as well as reforming Taiwan's hidebound regulations."

    I'm concerned. Does he not understand that Taipower is state-owned and that "hidebound regulations" are state-made?

    You're right--I think they are not serious. Or they are completely oblivious to the contradictions in their own arguments. (Or, alternatively, they're doing this on purpose. This would not surprise me, either.)

  2. "...he's arguing for both more and less state intervention..."

    The quantity of State regulation, or the degree of State involvement in any given industry is of little interest to a pragmatist like Turton. Due to his background fears over global warming, the only relevant question to him is simply can enough wind turbines be built, not what the costs of building enough of them would be. Someone like Turton will occassionally argue for less State intervention if it suits his ends - his outlook on this is pragmatist, not principled.

  3. " NT$200 million per turbine, we're talking between NT$164 billion and NT$328 billion..."

    Isn't this actually about the range of the cost of a nuclear power plant?

  4. Yes, although for offshore the real figure will be much higher than this once you take into account maintenance (especially in a typhoon prone region) and transmission costs. Offshore is still a joke. Onshore is much better, but only if it is built to a sensible scale and exposed to free competition from start to end.

    You must also remember that for nuclear plants in democratic countries that cost may be inflated by political uncertainty and continual construction delays - as has been the case in Longmen and this is what scares off potential investors.

    In any case, looking at what happened to commodity prices last year, it is combined-cycle gas turbines - not the environmentalists and their market-rigged renewables - that are the politically and economically realistic option.

    In the meantime, the development of polywell reactors continues to struggle along on a shoe-string budget. I wish they'd get out of their stupid Navy contracts and get some real money - they should have finished that thing already.

  5. Mike,

    I see. I haven't gotten tied up in these sorts of issues with him. I mostly follow his thoughts on Taiwan and China. I've chimed in a couple times on Facebook (of all places) when he rips on rightists for making environmental issues political but tends to overlook (conveniently) the fact that leftists are often the ones who politicize the shit out of this stuff to drum up political support. My problems are not with environmental science--oh, if it would only be more scientific!--but the politicization of the whole thing (as though Al Gore is an expert). Otherwise, I steer clear. Perhaps I should follow his posts more often to catch his lines of argument. Thanks for the clarification.

  6. "...when he rips on rightists for making environmental issues political..."

    Oh, he's a seasoned pro at this.

  7. ...account maintenance (especially in a typhoon prone region)...

    Typhoon turbines. Now that would be interesting.


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