Malcolm Duffield

Tricks of Accountancy?

I previously demonstrated that the NT Power Utility (Power & Water Corporation) puts about $698 of margin on the cost of the energy content of every 100L of fuel that they turn into electricity (albeit not overly efficiently). This assumes they pay similar fuel prices to us. However, given how much they buy, I’d imagine they get their fuel MUCH cheaper.

They nevertheless sell the output energy to us at $0.265 per KWh. It seems fair to assume that the margin for ‘on costs’ (at the very least 365%) is used to cover the costs associated with the inefficiencies of burning the fuel, servicing the Internal Combustion Engines and generators, distributing the electricity over the grid and paying for the management and staff that make this all possible (oh, and amortising the original investment in the publicly-owned Grid and Generation assets – if that’s not already done).

Still, fossil-fuelled electricity looks somewhat expensive when compared to solar PV – with fossil fuels needing at least 365% on-costs!

Naturally – if the Power Utility used solar PV there’d be some solar panels, batteries and controllers to amortise (say over 10 years – ‘though panel warrantees are now 25 years – so they could be amortised over a longer period if so desired) and of course there’s the grid to amortise, maintain and operate (management and staff to pay, etc.) but the zero-input cost on fuel (which effectively negates any photon to electron conversion inefficiencies) would make a significant saving (no fuel cost!) that the utility could (should?) pass on to us, the NT public – the ‘owners’ of the utility operation!

Given that the PV panels, controller and batteries don’t need a lot of maintenance, or management (they’re intelligent devices) – and never need an oil change, doesn’t it seem reasonable that we should expect a dramatic reduction in the price of electricity?

Of course, someone may have calculated the ‘on costs’ of solar PV deliberately disadvantageously? Given a fuel cost of ‘zero’ – all PV ‘on costs’ are infinite when expressed as a percentage of fuel cost. If such accountancy is applied without thought (or is applied with malice aforethought) we all suffer!

Is it safe to assume that our politicians are smart enough to spot (and prevent) that?

We’re all standing on the shoulders of Giants

Thanks, w(h)ere due.

I’d like to sincerely thank all the people who are presently, or have in the past been, responsible for the production of coal, oil and gas. It is inarguable that without their diligent, ambitious, and oft highly creative engineering we would not have advanced as a society.

That we have advanced to a stage where we are capable of powering our not inconsiderable energy needs entirely through the use of renewables, is without question due to advances made possible through the use of fuels extracted from the ground.

That society has evolved such amazing technologies, manufacturing skills and scientific understanding gives me confidence that today’s climate ‘problem’ can be surmounted – provided we start working on it with urgency. We need to repeat the kind of urgency that the coal, oil and gas industries amply demonstrated as they scaled to meet the energy needs of a voraciously industrialising world – throughout the span of my lifetime.

Think of all the technologies that had to come into being to enable us to build photovoltaic panels and batteries, and yes windmills and hydro-electric plants too – scaled to a size able to supply the needs of a home, shopping centre, factory, major city, state or indeed country.

Managed for efficiencies that we could barely imagine, even just 15 years ago, we are now able to provide reliable power around the clock, and in its most convenient form (electricity) enabling us to heat, cool, light and cook – and power our tools, vehicles and even our ‘heavy industries’ at zero marginal-cost and without significant negative environmental impact.

On behalf of my children and grand-children, it is my fervent hope that those companies and individuals that made the fossil fuel industry ubiquitous will turn their skills to making renewables equally ubiquitous for the benefit of all on planet Earth.

And soon, please.

Thanks in advance.

More power related maths

From the previous post on fuels (Petrol or Diesel) 3.2 GJoules of energy costs, let’s say, $150. It follows if, assuming that the fuel is burnt most efficiently by a very good generator – giving say 30% conversion of fuel energy to electricity, then that 3.2GJoules*0.3=960 MJoules of electrical energy can be had from that fuel with that generator.

From experience small sites (such as the caravan park at Douglas Daly Waters) typically need ~ 10 KVA (to keep the bar and kitchen fridges and pumps going). Working backwards 960Mj will last 27 hours @10KVA so on that basis 270 kWh cost $150 – to keep the maths simple I’ve assumed a power factor of 1 – hence, excluding maintenance and depreciation, their per kWh cost is $0.56 – around double the utility price!

Of course, if they offer “powered sites” they may need to run a second generator!

Obviously, subsidised diesel ($1.20 per litre I believe) would makes the cost of a kWh $0.44 (almost twice what ‘townies’ pay!) – and that too excludes maintenance and depreciation costs.

Let’s not forget that at such diesel-powered remote sites electricity also comes with noise and pollution – which is weird given that peace and quiet surely must be the imagined reward for living far away from the convenience of town-life?

That’s costing the business $219,000.00 per annum – not allowing for maintenance, depreciation or ‘hot days’ (when even more diesel is used) – and that’s assuming they get the $1.20 (subsidised) price – and ignores the cost they’ve got to pay to get it there!

It’s not like they don’t get enough Sun for PV to work for them.