Thank you for the opportunity to respond to criticism directed from Rauli Partanen in a recent article published in Energiauutiset.

Transcription

1 Thank you for the opportunity to respond to criticism directed from Rauli Partanen in a recent article published in Energiauutiset. Due to the nature of our research, which includes many assumptions about the future, we have always been open to constructive feedback. Indeed, the stated relevance of our work was not to direct public policy, but to extend public discourse concerning the future energy system of Finland. The voices of many must be heard before the best pathway for Finland can be determined. At the same time, we feel that our work has often been misunderstood and misrepresented by several individuals in both traditional and social media. Such is the case with Rauli Partanen s recent article in Energiauutiset, and his associated blog. Mr. Partanen questions the assumptions made related to the installed capacities of solar PV and wind power. Importantly, these were not assumptions at all, but were results of the analysis. We examined the potentials of several energy resources, and stayed within what are generally accepted as sustainable limits of those potentials. Recent research of the Finnish energy system concluded that the current market potential for solar PV would be 24 GW (Kosonen et al. 2014). Up to 30 GW for 2050 does not seem unreasonable by comparison. Mr. Partanen is correct, however, in showing that this is a large number, and it should be examined carefully. If one assumes that 0.02 km 2 would be needed for each MW of installed capacity, only 600 km 2 would be needed for solar PV. In the research we assumed that half of this capacity would be located on rooftops, so only 300 km 2 of space would need to be found for ground-mounted PV systems. This represents less than 0.1% of Finnish land area. As much of this area as possible should be low-, or zero-impact areas such as roadsides, parking lots, or fields that are not productive forestry or agriculture areas. The speed at which we assumed such capacity could be reached was not 30 years, as was stated in Mr Partanen s article, but 35 years ( ). Installing 30 GW of solar PV would be a challenge, but Germany has already installed more than 40 GW of solar PV in the past 15 years alone (Fraunhofer ISE 2015), and China installed 34 GW of solar PV in 2016 alone (IRENA 2017). Such development also allows consumers access to a generation technology that is already at or below current market prices for electricity in Finland. Germany has also installed more than 37 GW of onshore wind power capacity in the last 15 years. Our results showed that no more than 38 GW of onshore wind capacity would need to be constructed in Finland by Mr Partanen also questioned the cost assumptions we have made for solar PV, citing an outdated IPCC source which estimated the 2050 cost of /kw. We assumed 300 /kw for groundmounted systems and 400 /kw for rooftop systems. More recent research shows that our assumptions may have been too conservative, as costs for ground-mounted systems in 2050 are estimated to be 246 /kw (Vartiainen et al. 2017). For rooftop systems, the 2050 estimate is 289 /kw for industrial rooftop systems, 397 /kw for commercial rooftop systems, and 537 /kw for residential rooftop systems. If the rooftop systems were equally distributed amongst the three market segments, the average cost would be 408 /kw, basically the same as our estimate. Current tenders for rooftop systems in Finland today can be found at /kw, proving the IPCC source used by Mr Partanen is unreliable. Indeed, the IPCC has revised their estimates several times. Recent reports in the journal nature energy and The Washington Post (Creutzig et al. 2017; Harvey 2017) summarise how many energy system modellers, including the renowned International Energy Agency, have been underestimating the deployment of solar PV and are too conservative in their estimations of solar PV costs. At the same time, they state there has been too much optimism in

2 assumptions about the adoption of other low-carbon technologies (nuclear power and carbon capture and storage). The IPCC researcher of the mentioned article now assumes 30-50% of global electricity supply by 2050 will be based on solar PV, which is a 180 degree turn of IPCC insights. The value of 40 years we use for the lifetime of solar PV technology has been provided with a reference (Braisaz et al. 2015). In addition, a peer-reviewed summary by international PV life cycle analysis experts (Mann et al. 2014) suggests that a lifetime of 35 years is possible by 2025, and that this limit is due to inverter lifetime, and not specifically the solar PV module. We stipulate that our assumption on PV lifetime is progressive, but still reasonable, and in reference to Braisaz et al. (2015) even cautious. Mr Partanen has unprofessionally suggested that we have pulled our cost assumptions out of a hat. However, if one takes time to examine the comprehensive manner we have presented our cost assumptions, which have undergone thorough peer review before publication, one can clearly see that we have documented each of these assumptions with references to other peer reviewed studies and international reports. The small number of times when assumptions have been made by our group, we have provided detailed reasoning in the body of the text. Peer reviewers do not allow us to pull assumptions out of a hat, nor do we have any intention to do so as researchers committed to scientific principles and ethics. To suggest otherwise is unethical. We are prepared to adjust any assumption when presented with more accurate or reliable data. We have done our homework, and it has passed through a process of rigorous peer review. Our results have been published in three different scientific articles, all independently peer reviewed (Child and Breyer 2016a; Child and Breyer 2016b; Child and Breyer 2017). We ask that Mr Partanen acknowledge this, and rescind his unsubstantiated questioning of our ethics. An important and well-reasoned assumption was made concerning the estimated cost of nuclear power in Finland. The figure of 5000 /kw, which we cite as an overnight cost of construction, was provided by Rosatom, the company selected to build the proposed Fennovoima plant. They cite a cost of 6 billion for a 1200 MW plant (Deign 2014). To this we have added a conservative 10% to cover costs of financing, decommissioning and waste management. The International Energy Agency also adds 10-20% to overnight construction costs in their cost estimates to cover budget and time overruns. To this they add an additional 5% for decommissioning costs. They also estimate that decommissioning costs may be in the range of 1.5% for solar PV and up to 3% for wind turbines as a function of construction costs. Our fully referenced and peer review assumptions include decommissioning costs for solar PV and wind turbines within the category of fixed operational expenditures (Opexfixed). One study has shown a trend towards longer construction times and higher cost overruns that added on average 117% to overnight costs of the 180 nuclear reactors under study (Sovacool, Nugent, and Gilbert 2014). The Olkiluoto 3 reactor in Finland, originally scheduled for completion in 2010 for an overnight cost of 3 billion, is still not finished, and costs have almost tripled to 8.5 billion (Koistinen 2012). The story is similar for a European Pressure Reactor in France (Le Monde 2012). These costs do not include costs of decommissioning or waste disposal. In the case of Finland, the older reactors scheduled for decommissioning are estimated to be relatively low in cost when it comes time for their retirement in the years to come. The argument given for such low costs by international comparison is that they are small reactors in the range of 440 to 880 MW and can be disposed of with much less cost and effort than larger reactors. This may be true, and our cost estimates for future

3 nuclear reactors include the fact that larger reactors will be the future trend, as is the plan for Olkiluoto 3 and the proposed Fennovoima project. This will involve markedly higher decommissioning costs. Mr Partanen accurately explains that the physical lifetime of nuclear power plants can be up to 80 years. However, for the purposes of cost calculations, an economic lifetime is a much better parameter to use for several reasons. First, investors want their money back. The time horizon for this does not always stretch to the physical lifetime of the asset. Only large-scale hydropower projects are accepted as having economic lifetimes of up to 50 years. Secondly, nuclear power plants require extensive renovation in order to facilitate extension beyond years. The Olkiluoto 1 and 2 reactors, for example, went critical in 1978, and underwent major, costly upgrades in 2010 and 2011, just 33 years later, to increase capacity and extend the lifetime. Other analyses of the actual lifetimes of nuclear power plants around the world suggest that decommissioning occurs within 40 years on average (Farfan and Breyer 2016; Schneider and Froggatt 2014). In addition, another prestigious source uses a current lifetime of 40 years for the purposes of economic calculations (Lazard 2016). Our assumption of an economic lifetime of 40 years is reasonable. After careful consideration, and a comprehensive literature search, we questioned the reliability of the reference (Lovering et al 2016) that Mr Partanen presented related to the cost and lifetime of nuclear power plants. This source has been openly criticised by energy experts (Koomey et al. 2017; Gilbert et al. 2017) as factually incorrect, selective in its choice of data to analyse, unbalanced in its analysis, and biased in its interpretation. In the end, the Lovering et al article presented by Mr Partanen does not accurately demonstrate the real cost of constructing a nuclear power plant. It is also in contradiction to the negative learning and increasing costs that have been documented for the nuclear industry in France and the US (Grubler 2010). Admittedly, representing the real cost of nuclear power is tricky business, as subsidies for national nuclear programs may cloud the issue. For example, the IEA (International Energy Agency and Nuclear Energy Agency 2015) reports an overnight cost of construction for domestic nuclear power in South Korea to be 2021 USD/kW. However, Korean technology deployed in the United Arab Emirates is elsewhere estimated to be much higher. The Barakah 1-4 reactors built by the Korean Electric Power Corp., totalling 5380 MW, are estimated to cost 32 busd, or almost 6000 USD/kW (Schneider and Froggatt 2014; World Nuclear Association 2017). Likewise, the IEA reports an overnight cost of domestic Chinese reactors from USD/kW. However, the Karachi 1&2 reactors built by the Chinese National Nuclear Corporation in Pakistan cost 9.6 busd for the 2028 MW facility. This amounts to more than 4700 USD/kW. One is left to speculate to what extent some national nuclear programs are subsidised when domestic and global costs are in such contrast. We must therefore be very careful when making cost assumptions. Mr Partanen s further suggestion that we may have made assumptions with the intention of achieving a desired result is a baseless and malicious insult, and has no place in a respected newspaper. At the same time, his point that a sensitivity analysis could have been performed is reasonable. We do not claim to know definitively what future costs will be, which is why we base our assumptions on facts and extensive scientific literature reviews. The suggestion that our research result falls outside of the mainstream of scientific literature is also questionable. A recent review of 25 peer reviewed scientific publications by Mark Jacobson shows a growing body of research into 100% renewable energy systems around the globe (Jacobson 2017).

4 To this, one can add our further publications on Finland (Child and Breyer 2016b; Child and Breyer 2017) and a publication on the Åland Archipelago (Child et al. 2017). Despite the slander and rhetoric, Mr Partanen does manage to raise legitimate concerns and questions that are relevant as we move forward. Particularly, high capacities of power-to-gas that may be underutilized in terms of their hours of operation represent a risk to potential investors. The same was seen for combined heat and power plants to a lesser extent. This was an issue that we were not completely able to address in this first article, and it remains an important area of inquiry for us. Another issue concerned very high levels of electricity generation compared to today. This is why we dedicated two full scientific publications (Child and Breyer 2016b; Child and Breyer 2017) to analysing and explaining how balance between generation and supply may be found, and how efficiency and stability in the system could be increased. The electrification of several energy services such as heat through electric heat pumps, mobility through electric cars, as well as fuels and products through power-to-x will dramatically increase the need for sustainable electricity in the years to come. This will come from increasing capacities of solar PV and wind turbines. This changing technological landscape of global energy systems will present challenges for the future, which means that the results of scenario modelling will be of utmost importance to prevent disruption to energy markets, industrial competitiveness, and quality of life. We discuss such matters among the researchers at LUT, with our VTT and University of Turku colleagues, and with our Neo-Carbon Energy Advisory Board, made up of experts from across the country. We will continue to interpret all modelling results through logical filters, and we welcome the feedback and input of others. At the same time, based on our results, we find that the idea of a 100% renewable energy system for Finland has a legitimate position within the realm of public debate. In the concluding remarks of our publication, we suggest that future discourse and research evolve in Finland to include the possibility of a 100 % renewable energy system. We suggest that results of the vision and initial feasibility analysis (words specifically used in the title) of a 100% renewable energy system for Finland indicate that this could be a competitive cost option for Finland in 2050 with lower exposure to societal risks. We acknowledge that our work is the first of its kind in Finland, and openly admit to its limitations. Our modelling work has suggested an outcome, but societies choose ultimate solutions through informed discourse. The goal of any modelling work is not to direct decisions, but to expand discourse that leads to decisions. Why 100% renewable? For us the answer is clear, and is not motivated by any advocacy or mindset. An increasing number of individuals, companies, cities, regions, and countries have committed to this as a target (Global 100% RE 2017). In addition, the net zero emission target of the Paris Agreement requires aggressive action within energy systems. Non-energy carbon emission reductions may be relatively more difficult, expensive, or disruptive to achieve. Therefore, fully sustainable energy systems need to be achieved at an accelerated pace in order to honour international commitments. In closing, we invite anyone to question whether our work has succeeded on scientific merits, but we have given no reason for anyone to question our personal motivation as Mr Partanen has done. Despite any possible differences in opinion, we accept unconditionally that people share an honourable motivation to do what is right. We invite others to further this work, and continue ourselves to work towards expanding this analysis to show how a transition towards sustainability can be achieved. The

5 EnergyPLAN tool that was used in this study did not allow such analysis of the transition, as was clearly stated in our publication. Therefore, we are currently using another tool of our own creation, the LUT Energy System Transition Model, to perform this work. We also continue to revise our assumptions based on the best available information. References Braisaz, B, C Duchayne, M Van Iseghem, and K Radouane PV Aging Model Applied to Several Meteorological Conditions. In EU PVSEC. Hamburg. doi: /cbo Child, M., and C. Breyer Vision and Initial Feasibility Analysis of a Recarbonised Finnish Energy System for Renewable and Sustainable Energy Reviews 66. doi: /j.rser Child, Michael, and Christian Breyer The Role of Energy Storage Solutions in a 100% Renewable Finnish Energy System. Energy Procedia 99: The Role of Solar Photovoltaics and Energy Storage Solutions in a 100% Renewable Energy System for Finland in Sustainability 9 (1358): doi: /su Child, Michael, Alexander Nordling, and Christian Breyer Scenarios for a Sustainable Energy Sytem in the Åland Islands in Energy Conversion and Management 137: Creutzig, Felix, Peter Agoston, Jan Christoph Goldschmidt, Gunnar Luderer, Gregory Nemet, and Robert C Pietzcker The Underestimated Potential of Solar Energy to Mitigate Climate Change. Nature Energy Article 17. doi: /nenergy Deign, J Rosatom s Fennovoima Deal Reshapes New Nuclear. Nuclear Energy Insider. Farfan, Javier, and Christian Breyer Structural Changes of Global Power Generation Capacity towards Sustainability and the Risk of Stranded Investments Supported by a Sustainability Indicator. Journal of Cleaner Production 141: doi: /j.jclepro Fraunhofer ISE Energy Charts. Gilbert, Alexander, Benjamin K. Sovacool, Phil Johnstone, and Andy Stirling Cost Overruns and Financial Risk in the Construction of Nuclear Power Reactors: A Critical Appraisal. Energy Policy. doi: /j.enpol Global 100% RE % Renewable Energy Is Reality Today. Accessed September 8. Grubler, Arnulf The Costs of the French Nuclear Scale-up: A Case of Negative Learning by Doing. Energy Policy 38 (9): doi: /j.enpol Harvey, Chelsea We ve Been Underestimating the Solar Industry s Momentum. That Could Be a Big Problem. The Washington Post. International Energy Agency and Nuclear Energy Agency Projected Costs of Generating Electricity. Paris. doi: /cost_electricity-2015-en.

6 International Renewable Energy Agency (IRENA) Renewable Capacity Statistics Abu Dhabi. explained/index.php/file:electricity_generated_from_renewable_energy_sources,_eu- 28,_ _YB17.png. Jacobson, Mark Z Abstracts of 25 Peer-Reviewed Published Journal Articles Supporting the Result That the Electric Grid Can Stay Stable with Electricity Provided by 100% or near-100% Renewable Energy. rabstracts.pdf. Koistinen, Olavi Suomenkin Uusi Ydinvoimala Maksaa 8,5 Miljardia Euroa. Helsingin Sanomat. Koomey, Jonathan, Nathan E. Hultman, and Arnulf Grubler A Reply to Historical Construction Costs of Global Nuclear Power Reactors. Energy Policy 102. Elsevier: doi: /j.enpol Kosonen, Antti, Jero Ahola, Christian Breyer, and Albert Albo Large Scale Solar Power Plant in Nordic Conditions. In 16th EU Conference on Power Electronics and Applications. Lappeenranta. doi: / Lazard Lazard s Levelised Cost of Energy Analysis (Version 10.0). Le Monde Le Coût de l EPR de Flamanville Encore Revu À La Hausse. Le Monde. Lovering, Jessica R., Arthur Yip, and Ted Nordhaus Historical Construction Costs of Global Nuclear Power Reactors. Energy Policy 91: doi: /j.enpol Mann, Sander A., Mariska J. De Wild-Scholten, Vasilis M. Fthenakis, Wilfried G J H M Van Sark, and Wim C. Sinke The Energy Payback Time of Advanced Crystalline Silicon PV Modules in 2020: A Prospective Study. Progress in Photovoltaics: Research and Applications. doi: /pip Schneider, Mycle, and Antony Froggatt The World Nuclear Industry Status Report Paris, London, Washington, D.C. doi: / Sovacool, Benjamin K., Daniel Nugent, and Alex Gilbert Construction Cost Overruns and Electricity Infrastructure: An Unavoidable Risk? Electricity Journal 27 (4): doi: /j.tej Vartiainen, Eero, Gaëtan Masson, and Christian Breyer The True Competitiveness of Solar PV - A European Case Study. doi: /rg World Nuclear Association Country Profiles.