Miscellaneous And Off Topic Subjects

[Dr. Strangelove]

So, globally, China and India are the issue with coal. It's cheap and abundant. Cheap energy helps combat poverty. My guess is those countries are still under-served, energy-wise. So even renewables could come in at cost-competitive prices in those markets they very well be simply filling unmet demand.

And China is rapidly changing. Beijing just days ago boasted that they have finished converting all the city's power planets from coal to natural gas. This in response to the massive environmental problems coal plants have caused there.

https://phys.org/news/2017-03-beijing-coal-power-natural-gas.html

[iam416]

In any event, you can never figure out where it's going to show up. Expecting it to happen in one area is futile. For 40 years, people have been waiting for a breakthrough in alternative energy. By far the biggest energy breakthrough of my lifetime has been fracking. It did more to establish energy independence than all other innovations, advancements, and regulations of the last 40 years combined. It has been so profound that the country is becoming a big energy exporter.

I agree with this entirely. My views are on energy, generally. I expect improvements in renewables, but I more expect more, cheaper energy in the future -- period.

The markets are out there. Demand for energy isn't going anywhere.

[Hannibal]

Human ingenuity is something that you can expect in a very broad sense, but you never know where to expect it. This is an important point to drive home because most discussions about alternative energy assume that it's a given. It isn't. We might find a miracle cure for cancer in the next 20 years. Or it might be a unicorn that is unsolved 100 years from now.

I don't just feel this way about alternative energy BTW. IMHO our society is too imaginative and not practical enough. Don't get me wrong, you need the imagination to keep society moving forward, but you also need a practical sense to tell the realistic ideas from the bullshit ones and figure out return on investment.

[hack]

I didn't say that they struggle with it. But a cost per KW-hr number is utterly worthless without knowing the assumptions that go into those numbers. This is especially true if it includes amortized capital cost. What kind of facility life do they assume? 10 years? 20 years? 50 years? What cost of capital? I don't know whether the entire industry has standard set of assumptions for a presentation like this. Having seen similar circusmstances in a different industry, I would say that they probably don't.

They do. As I have said multiple times, levelized cost of electricity is an industry metric and you can look up what it is and what it means.

It appears that there was $44bn invested in solar in the US in 2015. You're saying that the people behind that money don't know how to make those calculations.

[Dr. Strangelove]

Reports that in his meeting with the House this morning, Trump was making semi-veiled threats against the Freedom Caucus folks.

"We'll get wiped out in 2018 if we don't pass this...you all will probably get primaried"...that sort of thing

[hack]

My bad on the airline laptops/iPads ban -- I hadn't known it includes more than just those two airlines. With Emirates, Qatar and Turkish Airlines also impacted, that now does strike at the heart of the UAE's business model and the Turkish Air strategy too. Still, it would seem to me that the real beneficiaries are the European Airlines that actually fly to these desinations. Delta suspended Istanbul service a while ago. I wonder if they suddenly bring it back, or if they would be able to.

[hack]

yeah, looks like no US airlines fly non-stop to Dubai, Istanbul or Riyadh. Jetblue has a codeshare with Emirates. I wonder if someone at Jetblue is a target? That seems farfetched. Seems more reasonable to think it's just another way to fan the Muslim-ban flames.

[Dr. Strangelove]

Britain's enacting a similar ban so maybe there's been a specific terror threat. Dunno.

Just seems odd that when Emirates Air and, say, United share the same security personnel at Dubai airport, why is one safe and the other is not? Abu Dhabi in particular has some of the strictest pre-flight security in the world and it's on the list.

[froot loops]

Reports that in his meeting with the House this morning, Trump was making semi-veiled threats against the Freedom Caucus folks.

"We'll get wiped out in 2018 if we don't pass this...you all will probably get primaried"...that sort of thing

I'm not sure he has got the politics right on this. The odds are much higher they get wiped if they do pass it.

[Hannibal]

They do. As I have said multiple times, levelized cost of electricity is an industry metric and you can look up what it is and what it means.

It appears that there was $44bn invested in solar in the US in 2015. You're saying that the people behind that money don't know how to make those calculations.

Knowing what the metric means isn't the same thing as knowing all of the assumptions that go into it. The size of the facility in question is a huge assumption because solar and wind don't benefit from economies of scale as much as gas and coal. Especially coal, because of all of its complex equipment. The cost of capital is a huge assumption too. Please show me where there is some sort of mandated industry standard for these numbers. The regulatory environment being assumed is important too. I want to see the compliance costs being assumed for each form of energy. If the fossil fuel numbers include a CO2 credit cost, then it distorts the numbers. You can't say that solar or wind have been advanced to the point where they are economically better than carbon if you are adding a carbon tax to the carbon numbers.

I also don't know the context in which that presentation was given and how transferrable it is to say, Pennsylvania, which receives a lot more of its power from coal than a place like Arizona. This is important if you are talking about replacing coal with renewables at any decent scale since the best areas for renewables might be places where people already aren't using much coal.

Here is a graph that I found on the wikipedia page about this topic.





If I am understanding correctly, those numbers do include a big carbon regulatory penalty for the fossil fuels. If you take that cost out then it paints a picture in which renewables are not cost competitive on a large scale. Those are also projected costs that assume constant improvement. Never a given. But they might be competitive in some places and not others, in remote places but not densely populated ones. Thus, you see windmills on the plains of Texas that are sitting on top of masive reserves of natural gas and oil. But in Houston, you don't.

Interesting though that you want me to place blind trust in investment bankers. i.e. the greedy liars who were the sole cause of the 2008 recession.

[hack]

Again, the term has a real and specific meaning, and if you want to apply an extra layer or three of skepticism go look it up. As for whether there will be penalties for emissions, or a tax, well, that's something investors are going to factor in. When you have people like James Baker or George Shultz advocating for it, that's a pretty good indication of the extent of acceptance for the idea across ideological lines.

I can see why an ideological approach would lead to you believing that counts as subsidy for renewables, but it can also be argued that allowing continued emissions is ``privatizing the profits and socializing the losses.'' That's subsidy for petroleum. It has been for years. Even Geezer opposes that.

You're right that any projected costs assume constant improvement in something. In the case of renewables, there are no assumptions. The cost of the sun never changes. All your costs to access the source of energy are up-front. You build now and pay now, so if costs for solar installation fall later, you miss out on those savings. Assumptions come when you have to commit to 30 years of buying coal, oil or gas.

In sum -- at an extreme end of the ideological spectrum it is certainly possible to reshuffle the definitions to make it seem like in no place, ever, would renewables be competitive. Or that pointing out that investment bankers know how to evaluate an investment is the equivalent to placing ``blind trust'' in them. Obviously we can appreciate them for their quantitative abilities whilst simultaneously being aware of their ethical shortcomings.

If you're engaging in all that, however, you've abandoned your markets-rule principles. You now believe in a market that has to be protected from itself so you don't have to accept that the things your political oppenents like have turned out to be very good ideas.

[Hannibal]

You're right that any projected costs assume constant improvement in something. In the case of renewables, there are no assumptions. The cost of the sun never changes. All your costs to access the source of energy are up-front. You build now and pay now, so if costs for solar installation fall later, you miss out on those savings. Assumptions come when you have to commit to 30 years of buying coal, oil or gas.

There are a ton of assumption on renewables. You are assuming an improvement in efficiency and what it will cost per Megawatt generated. That is huge since those numbers historically have been very poor and they are supposedly what has been improving lately. But there isn't a guarantee that they will continue to do so. There isn't even any guarantee that the numbers that you see for right now aren't complete bullshit.

I don't believe that a market needs to be protected from itself. But I am not the one advocating for wholesale change, mandates, and subsidies. That's what you guys have been doing for decades. If you think that the market can be left to decide for itself then we wouldn't be having this conversation. I agree though. If we can power New York City with solar panels then let the market decide.

And yes, it is interesting that we are supposed to place blind trust in the honesty and accuracy of the institution who singlehandedly caused the Great Recession of 2008. I should assume that they are never wrong and that they never have any conflicts of interest (like being the underwriters of altenative energy companies). Except mortgage-backed securities. I guess this means we can absolve the repeal of the Glass-Steagall act from any blame from now on?

[hack]

Were the market left to decide for itself energy producers would have to pay the full costs, rather than socializing the losses. We've called this politics in this country, but, in the end it is privatising gains and socializing losses, as the state is left to pay for environmental damages caused by the private entity retaining its profits.

The costs are locked in at the time of construction. Yes, you get less power /MW of capacity, but that won't change with new technology. There is no potential upside from future technological improvments for existing renewables facilities. Therefore there are fewer assumptions and fewer variable costs in the future.

I think you DO believe a market needs to be protected from itself. This is one example. You want to define subsidy or tax in a specific way that is ideological and not based on economic considerations. You also voted for Trump, who is all about protectionism. If you were truly a free-marketeer, you wouldn't do that stuff.

[entropy]

Something to lighten the mood..

http://www.scarymommy.com/ryan-reynolds-parenting-tweets/?utm_source=FB

Sent from my iPad using Tapatalk

[Hannibal]

Were the market left to decide for itself energy producers would have to pay the full costs, rather than socializing the losses. We've called this politics in this country, but, in the end it is privatising gains and socializing losses, as the state is left to pay for environmental damages caused by the private entity retaining its profits.

Except that there is no quantification of these "losses" that you speak of, so your argument is total bullshit. Well, except for a myriad of issues that fossil fuel producers and users already pay out the ass for. The socialization of these losses stopped decades ago**. But those aren't the numbers in question here. I'm not questioning whether it's fair for the coal numbers to include the cost of sulfur scrubbers. The cost of compliance for CO2, on the other hand, is the result of purely arbitrary carbon numbers imposed by politicians who have probably never opened an engineering or finance textbook in their lives. I'd hardly call that the workings of a "free market". But if you disagree, then fine. Just be honest about whether these alternative energy sources can compete without massive CO2 compliance costs. Right now, I'm not seeing that. It at least needs to be an asterisk on the slide.

If you were truly a free-marketeer, you wouldn't do that stuff.

I have addressed this at least a few times by now. I'm pretty sure that you know that and you understand my reasoning for this.

**Edit: It appears that some fracking losses are being soclialized because the regulatory environment has not caught up with it. I expect that to happen over the next 10 years and for fracking to remain a thing despite this.