freediver wrote on Aug 14^th, 2010 at 9:59pm:


Nuclear and Solar Thermal, plus some natural gas (CCGT technology).

Based on the capital projections, and the projected coal export profits of 100 Billion by 2015, it should only amount to 5%. Certainly a lot less than the  30% the ALP is proposing.

I'm not talking about underwriting the entire upfront capital here - just providing an incentive to make the project attractive for investors.

The objective is to establish a sustainable energy infrastructure. Once the power stations are being built, economy of scale starts to kick in. It's just a question of getting over the hurdle in a way that is not going to meet with opposition from voters.  Democracy is ironically the biggest obstacle to economic survival.

Talking of obstacles, we still have to invest in nuclear energy generation, at least for the first 50 years or so. Around 2050, we could transition to more efficient technology such as Thorium based reactors, or possibly Solar thermal. The market will still determine the most cost effective technology, because we're just talking about a kick start. Coal revenues will dwindle to zero by 2040 by this plan, so the new technology will have to be viable.

freediver wrote on Aug 15^th, 2010 at 9:48am:


From the capital expenditure projections. Based on total expenditure over a 5 year period, it starts around $10 billion, increases to $28 billion in 2025, peaking at $37 billion in 2035 falling back to about $30 billion by 2025.

I've already discussed the build rates that result in those capital estimates. Even at the peak of $37 billion, this equates to $7.4 billion per year, so even if we allow (say) a 30% construction grant, that equates to  $2.2 billion per year. Working on the basis that  a $100 billion profit by 2015 is too optimistic, and taking a figure of $50 billion, that equates to about 5% (well 4.4%). As you can see, there is a lot of contingency in there.

Now, you tell me how a 10% tax on coal exporting is going to harm Australia when our competitors already have higher tax rates?

I'm interested if anybody else thinks that this approach is a good one. As I see it, our main barrier is selling a tax system that will cost the general public. This approach doesn't cost the general public.

At projected $ per MWhr costs for 2020, yes it is.  There is more to it than that. Part of the justification is the fact that the competition will ultimately be forced out of business. Now if the Rio's and BHP Billitons have any sense, they will hedge their bets and go with renewable technology in order to stay in business.

freediver wrote on Aug 15^th, 2010 at 10:14am:


You have to take the 5% tax on profit into consideration and project current cost trends to 2020. I'll post on this further. The construction needs to be modular and constructed overseas, because Australian engineering costs are prohibitive.

freediver wrote on Aug 15^th, 2010 at 10:31am:


They would be built in China, in the same way that most new industrial plant for Australia is constructed in China today. I'm talking about the equivalent of US Generation III nuclear power plants with a design lifetime of 60 years.

There is an interesting cost comparison (US data)
http://nuclearfissionary.com/2010/04/02/comparing-energy-costs-of-nuclear-coal-g...

freediver wrote on Aug 15^th, 2010 at 12:32pm:


I realise that upfront costs are generally capitalised. The reason I split the costs was to illustrate the difference between Solar Thermal and Coal. With coal, there are ongoing transport and raw material costs. With Solar, the vast majority of the costs  are upfront, and mainly relates to maintenance and operational aspects.

So if the subsidies on Solar energy were lifted by a new government coming into power, it would be less of a deterrent for investors, because they would already have received their grant before commissioning.

all of the above

huh?