Saturday, December 04, 2010
The reality today is that the world has changed enough so that it is possible to build a profitable business model around the concept that atomic energy is, in fact, "too cheap to meter." I do not even mind if I am quoted as saying so. ..
The business model currently in place for electricity in most places is that it is a "natural monopoly" business where a single, government owned or government protected enterprise manufactures, transmits and delivers the product on demand to end users. Each customer uses a measurable quantity of electricity, which is recorded by a meter, and receives a periodic bill for that amount of use. There are other components to the bill - there is a basic service charge, a fuel adjustment charge, specified taxes and fees, and, in the case of many larger scale users, a capacity charge that varies based on the maximum amount of electricity used during peak demand times. (Actually, there are a few more complications that do not fit into the above summary, but I will try to hold your attention by avoiding too many details.)
The whole model is based on the idea that making electricity consumes a certain quantity of raw material, labor and other cost components that make it necessary and fair to charge customers for each unit of electricity that they use. Measuring, keeping records and issuing accurate statements for that use consumes a certain amount of company resources - in other words it costs consumers money - but, under current conditions, that is seen as a required cost of doing business.
The major reason why metering is necessary, however, is that the fossil fuels consumed to produce electricity represent between 60 and 90% of the production cost of that electricity. If the electricity is not needed, the fuel consumption rate can be reduced in almost direct proportion, so producing less electricity really does cost the utility company less money...
In contrast, nuclear plants have fuel costs that are low enough to disappear into insignificance. They also have permanent crews that do not get much smaller when the plant is not running. In fact, it is often more expensive to maintain a nuclear plant in a shutdown than it is to operate it.
Because of those characteristics, measuring the actual use for each customer is not required; it would be more cost effective and fair if customers were charged a flat fee based on the amount of power that they wanted to have available at any one time. This capacity charge would be more like a cable bill or a local phone bill. The utility would know how much capacity it needed to have on hand and could invest wisely to ensure that it could meet its obligations and it would save money in its billing systems.
So if nuclear produced the large preponderance of electricity a flat rate in which we paid based on the maximum power we would ever want would give much better price signals & thus power would be used more efficiently. This is like off peak electricity but moreso
It would, of course, make a mockery of all these tokenist ecofascist calls not to keep equipment on standby overnight, when electricity use is low, but it would also encourage us to do most heating at times when we aren't using it for other stuff. It would encourage industry to time its electricity use with maximum efficiency.
It also makes a nonsense of those self styled "moderate" politicians who recognise that wind cannot keep the lights on and that we need nuclear but still want an excuse for subsidising wind firms they make money from by saying we need a "balanced power portfolio". In fact the system runs much more efficiently if we do not have to mix & match. In the same way car engines work better if they are designed to work on one specific fuel source without "balancing" petrol with diesel, sugar or coal.
It is doable, far cheaper & more practical than Scotland continuing subsidisng windmillery by £1 bn a year.
So the longer a nuclear power station lasts, the better its business case: 50 to 100 years, hopefully.