Sunday, 24 May 2020

Fund Managers with £320 million to invest, should you: Invest now in Onshore Wind OR invest in Advanced Nuclear Power Plants in 5 years time????

£320 million of capital investment is going into South Kyle Onshore Windfarm right now. The first electricity generated will be in Q1, 2023.

One of the first Advanced Nuclear Power Plants (NPPs), the BWRX-300 Small Modular Reactor (SMR) will commence operation in 2027 and should become available in the UK by 2030.

This is South Kyle Windfarm:

And this is the BWRX-300 Advanced NPP


The most significant factor investors should consider about advanced SMRs is their build programmes are now down to 2 years - no different to an offshore wind farm. So the cost-of-capital burden that has drained investment from conventional npps is utterly negated. Comparing investments, it need not be considered a part of 'Significant Costs'.


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For the South Kyle Windfarm investment, assuming the full 15,768,000 MWh are generated by 2048, the first significant cost is a capital investment content of: £20.29/MWh.

The second significant cost is O&M. As the International Renewable Energy Agency (IRENA) puts it: "...O&M data is not consistently reported, making comparisons difficult...":


For an Installed Capacity of 240,000 kW, O & M = £211.2 million.
The second significant cost is an O & M content of: £13.39/MWh.

Fuel, as is stated frequently, is 'free energy'. The third significant cost is a fuel content of : £0.00/MWh.

Decommissioning cost data for the UK is non-existent. A detailed 2017 report on a USA onshore windfarm works out at $155,613/MW of installed capacity. Add in USA inflation of 4.6% and the 'long term' exchange rate of £1.00 = US$1.15 and the cost for South Kyle is £34.0 million.The fourth and final significant cost is a decommissioning content of £2.16/MWh.
Palmer's Creek Windfarm. Page 9-6; Para. 9.9.2

The significant cost total is £35.84/MWh. When applied to 15.77 million MWh is £565.2 million.

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A capital investment of £320 million in an Advanced NPP like the BWRX-300, would secure earnings from 163.5 MW of the 300 MW installed capacity. That would generate 1,289,376 MWh per year, and 77.36 million MWh over the 60 years lifespan. The first significant cost is a capital investment content of: £4.14/MWh.

It is then possible to ascertain all of the remaining costs: Fuel fabrication; O&M; waste fund; decommissioning fund - from an analysis of Hinkley Point C npp. All of these costs add up to 23.00/MWh in 2018, requiring factoring in the 2018 € to £ exchange rate and UK inflation to 2020. The remaining significant cost is a 'balancing' investment content of £25.10/MWh

The significant cost total is £29.24/MWh. When applied to 77.36 million MWh is £2.26 billion.

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So what does that mean for the pension pots that have gone into the £320 million offshore wind farm, commencing generation in 2023 and earning for every MWh sold at the going Wholesale Price.

Thinking in terms of a Wholesale Electricity Price of £50.00/MWh, by 2048, after its 25 years lifespan of economical operation, South Kyle will have generated an income of £778.4 million, with significant costs of £678.6 million. That's a potential for dividend payments from earnings of £213.3 million. 

Working out at £0.67 for every £1.00 of capital invested.

Meanwhile, it is reasonable to assume the Pension Fund Manager holding onto his £320 million until 2030 would probably have partaken of 'opportunity earnings'. Then by 2030, the £320 million invested in advanced npps starts earning on the Wholesale Market.

Again,thinking in terms of a Wholesale Electricity Price of £50.00/MWh, by 2048, after 18 years of operation, the proportion of the BWRX-300 npp in which the £320 million of capital was invested, will have generated an income of £1.16 billion, with significant costs of £584.2 million. That's a potential for dividend payments from earnings of £481.8 million.


But they will carry on for another 42 years of economical operation to reach £1.606 billion.

Working out at £5.02 for every £1.00 of capital invested (7.5X more)

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WHAT TO DO???


DO NOT INVEST IN OnSHORE WIND NOW - KEEP YOUR PENSION FUNDS SAFE FOR ANOTHER 
5 YEARS AND INVEST IN 
ADVANCED NUCLEAR POWER PLANTS! 



Thursday, 21 May 2020

Fund Managers with A$1.73 billion to invest, should you: Invest now in Solar Projects OR invest in Advanced Nuclear Power Plants in 5 years time????

A$1.73 billion of capital investment is going into Robertstown Solar Project in South Australia. It is a single tracking solar power plant, with a capacity factor of 23%, compared to the 10% or so, experienced in nations like the UK, in temperate zones.
This is Robertstown Solar Project.
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One of the first Advanced Nuclear Power Plants (NPPs), the BWRX-300 Small Modular Reactor (SMR) will commence operation in 2027 and should become available in the Australia by 2030. 

And this is the BWRX-300 Advanced NPP

At the current exchange rate, the cost of US$675 million giving a capital investment cost of A$1.028 billion. So A$1.73 billion of investment would finance 505 MW of BWRX-300 'capacity'.

The most significant factor investors should consider about advanced SMRs is their build programmes are now down to 2 years - no different to Solar PV or Wind Farm projects. So the cost-of-capital burden that has drained investment from conventional npps is utterly negated. Comparing investments, it need not be considered a part of 'Significant Costs'.

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For the Robertstown Solar investment, assuming the full 30.12 million MWh are generated between 2022 and 2052, the first significant cost is capital investment content:, which works out at A$57.44/MWh.

The second significant cost is O&M. The National Renewable Energy Laboratory (NREL) in the USA predicts a 2020 cost of US$10.5/kW/yr. At the current exchange rate, that equates to A$16.0/kW/yr. For 500 MW of installed capacity, that's a total cost over 30 years of A$240 million. The O & M cost content works out at A$7.97/MWh.
NREL Operation and Maintenance (O & M) Costs

The third significant cost is fuel and since it is stated frequently that this is 'free energy' the fuel cost content is A$0.00/MWh.

The fourth and final significant cost is decommissioning. An Oct 2017 RFF Report gives a cost for decommissioning a 300 MW US Solar PV Project at $45,976/MW. That's $22.99 million for 500 MW Robertstown Solar. Using 2017 exchange rate and adding in Australia's inflation brings it to A$31.45 million This Decommissioning cost content is A$1.04/MWh.

RFF Report. P.36; Table 9.

The significant cost total is A$66.45/MWh. When applied to the 30.12 million MWh, the cost is A$2.00 billion.
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For the Advanced NPP, the BWRX-300, 505 MW of installed 'capacity would  generate 3.98 million MWh of 24/7 electricity every year and 238.9 million MWh over their 60 years lifespan. The first significant cost is a investment capital content of A$7.24/MWh.

It is then possible to ascertain all of the remaining costs: Fuel fabrication; O&M; waste fund; decommissioning fund - from an analysis of Hinkley Point C npp. All of these costs add up to €23.00/MWh in 2018. Factor in the 2018 € to A$ exchange rate and Australia's inflation to 2020 and this significant cost is A$37.17/MWh.
Pie Chart: Hinkley Point C nuclear power plant


The significant cost total is A$44.41/MWh. When applied to 238.9 million MWh, the cost is A$10.61 billion.
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So what does that mean for the pension pots that have gone into the  A$1.73 billion utility scale solar pv projects, commencing generation in 2022 and earning for every MWh sold at the going Wholesale Price?Thinking in terms of a Wholesale Electricity Price of A$86.00/MWh:
After a 30 years lifespan of economical operation, by 2052, Robertstown Solar will have generated an income of £2.59 billion, with significant costs of A$2.00 billion. That's a potential for dividend payments from earnings of A$590 million

Working out at A$0.34 for every A$1.00 of capital invested.
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Meanwhile, it is reasonable to assume the Pension Fund Manager holding onto his A$ million until 2027 would probably have partaken of 'opportunity earnings'. Then by 2030, the A$1.73 billion invested in advanced npps starts earning on the Wholesale Market.

Again,thinking in terms of a Wholesale Electricity Price of A$86.00/MWh:
After 22 years of operation, by 2052,  the BWRX-300 generation will have raised an income of A$7.53 billion, with significant costs of A$3.89 billion. That's a potential for dividend payments from earnings of A$3.64 billion (6X more).

But it will carry on for another 38 years of economical operation to reach A$9.94 billion


Working out at A$5.75 for every £1.00 of capital invested (17X more).
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WHAT TO DO???

DO NOT INVEST IN SOLAR POWER NOW - KEEP YOUR PENSION FUNDS SAFE FOR ANOTHER 5 YEARS AND INVEST IN ADVANCED NUCLEAR POWER PLANTS! 




Sunday, 17 May 2020

Fund Managers with £424 million to invest, should you: Invest now in Solar Parks OR invest in Advanced Nuclear Power Plants in 5 years time????

£424 million of capital investment will be going into Cleve Hill Solar Park if the decision to go ahead is given; it is expected within weeks. 


This is Cleve Hill Solar Park


One of the first Advanced Nuclear Power Plants (NPPs), the BWRX-300 Small Modular Reactor (SMR) will commence operation in 2027 and should become available in the UK by 2030 requiring a capital investment of £587 million (2020).

And this is the BWRX-300 Advanced NPP

The most significant factor investors should consider about advanced SMRs is their build programmes are now down to 2 years - no different to Solar PV or Wind Farm projects. So the cost-of-capital burden that has drained investment from conventional npps is utterly negated. Comparing investments, it need not be considered a part of 'Significant Costs'.
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For the Cleve Hill investment, assuming the full 14 million MWh are generated between 2023 and 2063, the first significant cost is capital investment content:, which works out at £30.29/MWh.

The second significant cost is O&M. The National Renewable Energy Laboratory (NREL) in the USA predicts a 2020 cost of $10.5/kW/yr. At the 'Long Term' exchange rate of £1.00 = US$1.15 that equates to £9.13/kW/yr. For 350 MW of installed capacity, that's a total cost over 40 years of £127.82 million. The O & M cost content works out at £9.13/MWh.
NREL Operation and Maintenance (O & M) Costs

The third significant cost is fuel and since it is stated frequently that this is 'free energy' the fuel cost content is £0.00/MWh.

The fourth and final significant cost is decommissioning. An Oct 2017 RFF Report gives a cost for decommissioning a 300 MW US Solar PV Project at $45,976/MW. That's $16.09 million for 350 MW Cleve HIll. Using 2017 exchange rate and adding in UK inflation brings it to £13.0 million This Decommissioning cost content is £0.93/MWh.

RFF Report. P.36; Table 9.

The significant cost total is £40.35/MWh. Which, when applied to the 14 million MWh generated is £564.9 million.

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For the Advanced NPP, the BWRX-300, the first significant cost of capital investment is works out at £4.13/MWh.

It is then possible to ascertain all of the remaining costs: Fuel fabrication; O&M; waste fund; decommissioning fund - from an analysis of Hinkley Point C npp. All of these costs add up to €23.00/MWh in 2018. Factor in the 2018 € to £ exchange rate and UK inflation to 2020 and this significant cost is £25.10/MWh

Pie Chart: Hinkley Point C nuclear power plant

The significant cost total is £29.23/MWh - but that is for a capital investment of £587 million. So a capital investment of £424 million would fund 102.5 million MWh (72%) of the total 142.0 million MWh. When applied to 102.5 million MWh the cost is £3.00 billion.
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So what does that mean for the pension pots that have gone into the £424 million utility scale solar pv projects, commencing generation in 2023 and earning for every MWh sold at the going Wholesale Price?

Thinking in terms of a Wholesale Electricity Price of £50.00/MWh, by 2063, after a 40 years lifespan of economical operation, Cleve Hill will have generated an income of £700.0 million, with significant costs of £564.9  million. That's a potential for dividend payments from earnings of £135.1 million. 

Working out at £0.29 for every £1.00 of capital invested.

Meanwhile, it is reasonable to assume the Pension Fund Manager holding onto his £424 million until 2030 would probably have partaken of 'opportunity earnings'. Then by 2030, the £424 million invested in advanced npps starts earning on the Wholesale Market.

Again,thinking in terms of a Wholesale Electricity Price of £50.00/MWh, by 2063, after 33 years of operation, the 72% portion of the BWRX-300 generation will have raised an income of £2.82 billion, with significant costs of £1.65 billion. That's a potential for dividend payments from earnings of £1.17 billion.

But it will carry on for another 27 years of economical operation to reach £2.13 billion


Working out at £4.49 for every £1.00 of capital invested (15.5X more).
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WHAT TO DO???

DO NOT INVEST IN SOLAR PARKS NOW - KEEP YOUR PENSION FUNDS SAFE FOR 
ANOTHER 5 YEARS AND INVEST IN ADVANCED NUCLEAR POWER PLANTS! 

Sunday, 10 May 2020

Fund Managers with £9.0 billion to invest, should you: Invest now in Offshore Wind OR invest in Advanced Nuclear Power Plants in 5 years time????

£9.0 billion of capital investment is going into Dogger Bank Offshore Windfarm right now. The first electricity generated will be in 2023 and full capacity reached in 2026.

One of the first Advanced Nuclear Power Plants (NPPs), the BWRX-300 Small Modular Reactor (SMR) will commence operation in 2027 and should become available in the UK by 2030.


This is Dogger Bank A; B; C - Offshore Windfarm:


And this is the BWRX-300 Advanced NPP


The most significant factor investors should consider about advanced SMRs is their build programmes are now down to 2 years - no different to an offshore wind farm. So the cost-of-capital burden that has drained investment from conventional npps is utterly negated. Comparing investments, it need not be considered a part of 'Significant Costs'.

For the Dogger Bank investment, assuming the full 426 million MWh are generated between 2025 and 2050, the first significant cost is capital investment: £21.13/MWh.

The second significant cost is O&M. Research data is sparse, but a 2016 publication references a similar site: 800 MW Wind Farm D. The O&M cost is €75.2 million/yr. Pro rata that to 3,600 MW and factor in the 2016 € to £ exchange rate and UK inflation to 2020 and this significant cost is £17.50/MWh.
Page 6; Table 1; Wind Farm D. (2016)

The third significant cost is fuel and since it is stated frequently that this is 'free energy' the cost is £0.00/MWh.

The fourth and final significant cost is decommissioning. A research paper from DVL, a world authority on maritime affairs, settles at €400,000/MW. Factor in the 2015 € to £ exchange rate and UK inflation to 2020 and this significant cost is £2.70/MWh.
Page 9; Fig 9 (2015)

The significant cost total is £41.33/MWh. When applied to 426 million MWh is £17.61 billion.


For the Advanced NPP, the BWRX-300, the first significant cost of capital investment is £4.13/MWh.

It is then possible to ascertain all of the remaining costs: Fuel fabrication; O&M; waste fund; decommissioning fund - from an analysis of Hinkley Point C npp. All of these costs add up to 23.00/MWh in 2018. Factor in the 2018 € to £ exchange rate and UK inflation to 2020 and this significant cost is £25.10/MWh

The significant cost total is £29.23/MWh. When applied to 2,177 million MWh is £63.63 billion.
Pie Chart: Hinkley Point C nuclear power plant

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So what does that mean for the pension pots that have gone into the £9.0 billion offshore wind farm, commencing generation in 2025 and earning for every MWh sold at the going Wholesale Price.

Thinking in terms of a Wholesale Electricity Price of £50.00/MWh, by 2050, after its 25 years lifespan of economical operation, Dogger Bank will have generated an income of £21.30 billion, with significant costs of £17.61 billion. That's a potential for dividend payments from earnings of £3.69 billion. 

Working out at £0.41 for every £1.00 of capital invested.

Meanwhile, it is reasonable to assume the Pension Fund Manager holding onto his £9.0 billion until 2030 would probably have partaken of 'opportunity earnings'. Then by 2030, the £9.0 billion invested in advanced npps starts earning on the Wholesale Market.

Again,thinking in terms of a Wholesale Electricity Price of £50.00/MWh, by 2050, after 20 years of operation (1/3rd of its lifespan), BWRX-300 npps will have generated an income of £36.26 billion, with significant costs of £21.20 billion. That's a potential for dividend payments from earnings of £15.07 billion.

But they will carry on for another 40 years of economical operation to reach £45.21 billion

Working out at £5.02 for every £1.00 of capital invested (12X more).
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WHAT TO DO???

DO NOT INVEST IN OFFSHORE WIND NOW - KEEP YOUR PENSION FUNDS SAFE FOR ANOTHER 5 YEARS AND INVEST IN 
ADVANCED NUCLEAR POWER PLANTS!