Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Tuesday, September 19, 2017

48% of electricity from rooftop solar

In the chart below, the blue area shows net demand from the South Australian grid on the 17th of September 2017 after output from rooftop solar.  The yellow shows output from rooftop solar.  The black line shows the wholesale price of electricity.  The downward spike between 5 a.m. and 6 a.m. is because there was trouble with SA's interconnector with Victoria.  In fact the wholesale price went negative (-$44/MWh) because there were strong winds and nowhere to ship the power.  (A perfect opportunity for batteries, you'd think.)  The peak in demand at 1 a.m. is because everybody's geysers (hot water cylinders) are timed to go on, a relic of the days when electricity was produced by coal power stations and all that excess supply from invariable baseload had to be soaked up when demand was low between midnight and 5 a.m.

This is a record for SA, and it happened in spring.  It's a couple of months from midsummer. Rooftop supply will be much larger in December, but so will demand because of aircon.   Ultimately, a big percentage of daylight demand for places between latitudes 35 or 40 north and south of the equator will be satisfied by rooftop solar.  And we will rely on wind, CSP and batteries to provide power at night.

[Read more here]


Monday, September 18, 2017

Why India must dump coal

Smog in India (Source)

From the Hindustan Times:

Coal is at risk from competition from low cost renewables, volatile commodity prices, growing concerns about air pollution, worsening water availability for cooling, the increasing incidence of heat waves that reduce operating efficiencies and, of course, necessary action to tackle climate change. These factors in combination are driving the structural decline of coal, led by China. According to Wood MacKenzie, coal use in China has dropped by 40% in the last five years.
According to Morgan Stanley, solar power in India has recently reached a tipping point, becoming more affordable than coal. Other Asian economies already seem to understand the dynamic of coal being highly risky. For example, South Korea’s newly elected President Moon Jae-In’s is moving to phase out coal and shift into solar and wind. Taiwan is expanding its renewable energy plans whilst reducing its reliance on coal by a third, from 45% to 30% by 2025.
Analysts now argue that coal usage in India will peak in the next five to 10 years. India will join China, and other East Asian economies, in halting new coal growth. No new coal plants are set to be commissioned for the coming decade, according to the Central Electricity Authority’s draft plan. And 37GW of old coal could be shut down, while Coal India is set to close 37 mines
While Europe and India are at different stages of development, the European experience shows how investing in coal can go badly wrong. Between 2005 and 2008, European power companies planned to build 65 new coal-fired power plants, with 49 gigawatts (GW) of capacity, but only 12 were actually built. More cancellations are expected.  In Germany alone, 20 GW has been cancelled.
[Read more here]

Sunday, September 17, 2017

China plans to ban petrol/diesel vehicles

The Chinese car-maker BYD is the world's largest producer of EVs.  This is the BYD Qin EV300.
Picture source: Green Car Reports 

Though no date has been set, China has announced that it is working towards a total ban on the sales and production of fossil-fuelled vehicles.  I've mentioned China's tight targets here and here.   China is doing this because of its horrendous air pollution.  But it's also doing it because it wants to dominate the developing electric car industry.  It produces and buys a third of the world's car output.  No car maker will be able to ignore this policy.  China is too big a market,  especially since India has now said it will ban petrol car sales by 2030.  It is all too likely that China will use its domestic push towards EVs to drive down unit costs and increase its car sales globally.  Car makers have been dragging their feet about EVs.  But the disaster of the diesel scandal, the extraordinary success of Tesla, and now more and more bans of fossil-fuelled car sales within 15 years around the world must be provoking some serious rethinking in auto boardrooms.

[Read more here and here]

Smug pilots

From Will McPhail of the New Yorker

Why wind has got so cheap.

Some more snippets from the Windlab Prospectus.

The first modern wind turbine built, in Denmark in 1978, had a capacity factor of just 7%.

Just to show how big wind turbines are.  This is one blade of the rotor.  Pic looks as if it was taken in Queensland.  Note solar panels on the roof of the small business on the right.

Soft denialists note: the wholesale price of electricity is determined by the most expensive bidder/generation source, and that is NOT renewables.  It is gas.  Gas in Oz is much more expensive than in the USA.  Gas is vulnerable to falling costs of storage.  When the costs of dispatchable electricity (from batteries or molten salt storage from CSP) fall below the costs of gas peaking plants, they will be favoured over gas in the bidding "stack".

This might appear to be of interest to Australia only.  But the technological shifts are global.  The cost declines in wind are global.  The gradual undercutting of coal is a global phenomenon.  What is different in different parts of the world is the applicable rate of interest/discount rate/cost of finance and the cost of connections to the grid.

Friday, September 15, 2017

Are you fed up?

A perfect Cathy Wilcox cartoon. (I should explain--there is currently a "referendum"/survey taking place in Oz about whether gay marriage should be made legal, plus a huge debate about renewable energy, with the trogoldytes on both issues more or less the same people)