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.

Sunday, January 24, 2016

Do we need storage for renewables?


 If an individual household wishes to go off grid, the cost of ensuring 100% supply security is very high at current battery prices, because to provide 100% supply security means you have to allow for a complete absence of sunshine or wind for several days in the area where your house/farm is.  It may be windy or sunny 100 km away, but that doesn't help you.   For the grid as a whole, this is much less true. The grid acts as a pseudo battery because varying demand and supply are averaged out across the whole grid. You don't turn on your heating at the same time as your neighbour does. Your solar panels don't produce electricity at the same time as the panels in a town 100 km away.

But the fact is that all supply is variable. Most ppl opposed to renewables because of their "variability" ignore the fact that hydro for example is also variable. Even wet countries like Norway or Scotland can have droughts.   And coal and nuclear power stations need to be periodically shut down for maintenance, or go off line because of accidents.  Also, all demand is variable too. The daily fluctuations in demand are substantial.  Even the hour-to-hour and minute-to-minute demand variations can be large.

Yet the grid has been coping with that for 100 years. It does this by good planning, and because the variability of many diversified and varied suppliers and consumers is greatly reduced when they are combined, and also by oversupply.  Grid operators buy more capacity than they need, to ensure there are no blackouts.  The principle of diversification is the same as reducing fluctuations in a portfolio by holding different stocks from different sectors.

So, you don't in fact need to back up each and every individual windmill and each solar panel with old-fashioned baseload power.  Which means you don't have to include the cost of storage into the cost of renewable electricity unless you have undiversified supply sources or renewables rise above some percentage of the supply. 50Hertz, the former East German grid operator, reckons that limit is 70%, and they are already at 50%.

But even were this not true, the cost of storage is plummeting. The annual decline in the cost of lithium-ion batteries as just one example of storage, is about 23%, a trend consistent over three decades. This means that in 5 years, storage will be about 75% cheaper than now. Currently, the Tesla Powerwall battery (designed for household, not utility use) has a LCOE of about US 13.5 cents per kWh. If battery costs continue to decline, the cost of stored electricity will be about US 3.5 cents per kWh in 5 years' time. The costs of large-scale Tesla batteries for utilities or businesses is (according to reports; no pricings have been officially released) about half the small scale pricing. Storage is already cost effective for peaking power (the 2 or 3 hours a day when demand is greatest).  It will soon be useful for storing solar power from the midday insolation peak for evening use.   Note also that you can manufacture "synthetic natural gas" using the Sabatier process so that even gas peaking power plants could potentially be green.

In addition, variable costing will stabilise demand. Most electricity tariffs globally set fixed retail prices whereas wholesale prices can fluctuate dramatically. Many activities can be postponed or rescheduled to take advantage of lower wholesale prices. For example, in Australia we have had several occasions when wholesale prices have been negative: a good time to heat your water, charge up your batteries or your EV, if that were reflected in the retail charges.  A Tesla electric car stores enough electricity (a usable 75 kWh) to power an average US house (using 10.9 kWh per day, 2014 data) for nearly a week. As EVs spread, they will become part of the grid "backup", charging when prices are low, releasing power when they are high.

That favourite of climate change denialists, nuclear power, doesn't actually solve the problem of variable demand, although it does make supply (on average) more stable.   And nuclear power stations and the power they produce are horribly expensive, even with large subsidies.   Worst of all is the lethally toxic by-product, plutonium,

Saturday, January 23, 2016


I mentioned Dana Nuccitelli's piece about the problems with satellite data here. But the article has a scary--no -- a terrifying chart in it:


It shows several different estimates of global temperature anomalies, smoothed with a 12 month moving average, going back to 1980.  During that time, the average global temperature has rising a terrifying 0.8 C.    In 35 years.  Holy macaroons with cream on!

If this trend continues, and there's no reason why it won't as we continue to pump CO2 into the atmosphere,  global temps will rise another 0.8 C by 2050.   We will be perilously close to the  2 C limit scientists think will cause tipping points.  And if the trend increase accelerates ....

Meanwhile, the deniosphere, after saying for years that temps haven't risen for 18 years by picking the el nino peak in 1998 as the starting point, so "proving" global warming has ceased, now say that 35 years isn't long enough to determine a trend in climate.

Thursday, January 21, 2016

Light rail

A tram/light rail system is the cheapest mass transit option for medium density suburbs, cheaper than freeways and high density underground rail.  Sydney, after getting rid of its tram network in the 50s, has started rebuilding a light rail network, as the blogger "My Ordinary Life" mentions:

The Sydney Light Rail has announced it is adding 90 services a week to its Central Station to Dulwich Hill line. Passenger numbers rose 60% in the last financial year. The line was extended to Dulwich Hill in 2014. 
This bodes well for the Randwick and CBD extensions currently under construction.

Light rail is nice: it runs like a tram on city streets, but becomes a train of sorts in the suburbs.  And the power it runs off can come from renewables, it produces no diesel fumes, and its stops (in the city) are close to where you want to go.

Hottest ever December

NOAA's estimates for December global temps have been released.  There's no surprise that they're now the hottest ever measured, by a long chalk.

Source: NOAA.  Click on chart to enlarge.

And the year to December was also the hottest ever measured.  

In their desperation, however, the deniosphere dismiss these numbers.  Instead of measuring the temperatures outside their windows, they have turned to satellite data, which show that temperatures are not rising.  According to them.  That oil company toady, Ted Cruz, is using satellite data to claim that the world hasn't warmed for the last 18 years.  Dana Nuccitelli at the Guardian comprehensively dismisses this rubbish, here.

Monday, January 18, 2016



Since we moved up here 25 years ago, to the mountains north-west of Melbourne, we've seen major changes in our climate.  In the first 5 years, we used to get snow every winter, sometimes several falls.  The first frosts came in April, and the first warm day in September--after which it would usually go back to being cold!  It only really warmed up in October.

We haven't had snow for years now, barring one very short fall in July last year.  And these days, we don't get the first frosts until June or July.  Meanwhile, the first warm day comes in August.  In summer 25 years ago, we'd get occasional very hot days (35 C) but always it would be just for a day before the temperature dipped back to the mid 20s.  Now we often get day after hot day, and the temperatures are higher.

One should be cautious of anecdote, of local stories.  There might after all be other places, perhaps,  which have got colder.

But what if there is a logical explanation, one which is global? Doesn't the local experience reinforce the statistical record elsewhere?

We know, as a matter of simple physics, and can show by a simple experiment which can be carried out in a high school lab, that carbon dioxide absorbs infra-red radiation. This heats the earth, just like a car left in the sun gets warm. In fact, if all the carbon dioxide in the atmosphere were somehow removed, earth's average temperature would drop 35 C, and the world would become an ice world. This stuff is so basic it is totally accepted by science.

We know, by scientific measurement, that carbon dioxide in the atmosphere has risen from around 280 ppm to over 400 ppm. We know that the higher the concentration the greater the greenhouse effect. We know this.

We know as a result of measurement by a variety of climate institutes (NOAA, Hadcrut, NASA/GISS, Japan Meteorological Agency, BEST, that global temps have risen over the last 130 years, not in a straight line because there are all sorts of short and medium term cycles, but consistently over longer periods. We know this.

So yes, given the cycles, the fact that temps are higher than 25 years ago doesn't by itself prove anything. BUT---the fact that this is happening in the context of a consistent theory is very strong supporting evidence. Just as the rise in sea levels is (the fluctuations in temperature are smoothed out in sea level rises, because of the thermal buffering of the ice caps) is strong supporting evidence, because the sea level can only rise in the long term because of rising temperatures, which expand the volume of the water in the sea and melt the ice caps.

 Now, we could say, we need to wait another X (how many? 25?) years before we're 100 % satisfied, and hope like hell that another 1 or 2 or 3 degrees C rise in temps will not happen, or we can say, it's a very plausible theory, and it makes sense to do something about it. Especially since renewables are now cheaper than fossil fuels, and the switch will cost us nothing in terms of growth and living standards, whereas a 3 degree rise in global temperatures would be catastrophic for our civilisation. Even more scary, we run the risk of melting methane clathrates on continental shelves. Methane is 86 times more potent a greenhouse gas than carbon dioxide over 20 years (it eventually decays into CO2 and water).

I think I am right in saying we have very little time left. And I find my own patience with climate change denialists vanishing as I consider the world we are bequeathing to our grandchildren.

Sunday, January 17, 2016

We need electric cars. Now.

Smog in London, 2011

This Guardian piece about rising levels of lethal air pollution only emphasises the huge need the world has for electric vehicles (EVs).

They're still more expensive to buy than ICE (internal combustions engined) vehicles, because batteries are still costly.  And even though battery costs are falling by 20%+ per annum, they will remain expensive for another 5 years.  But every country could subsidise EVs and fund the subsidies via an annually rising tax on petrol and diesel.  Replacing our existing fleets of cars, lorries and buses with their electric equivalents would also reduce CO2 emissions, if the electricity which powered them came from renewables. That's a global gain, though still a good thing, and local politicians might not really care.  But the local gain is clean air and fewer deaths.

EVs might be pricey to buy, but they are very cheap to run.  For example, even with horribly expensive Australian electricity (26 cents per kWh) a week's driving a Tesla S with the 85 kWh battery (total range 426 km) would cost just $22.  In fact, you could if you wanted use Tesla superchargers for free, but there's really no point.  The superchargers are really designed for long distance travel.  Plus, the only servicing needed is to rotate the tyres and fill the windscreen washer reservoir.  Cheap.