Australian news, and some related international items

For General Electric, offshore wind looks like a winner, but Small Nuclear Reactors a costly folly.

GE Power Plays: Wind Might Blow Coal, Gas And Nuclear Away, Seeking Alpha,  Apr. 29, 2020 Keith Williams

GE offshore wind: massive offshore turbine Haliade-X 12MW looks like a winner.

GE-Hitachi Nuclear Energy may be a receding opportunity.

GE might sell its steam power business and rationalise its fossil fuel interests.

The power and renewables businesses are important in considering investment in GE.

………. Nuclear Small Modular Reactors : GE-Hitachi BWRX-300

There is a lot of talk in the nuclear industry and also in political circles from groups who are opposed to solar PV and wind developments, yet who acknowledge the need for low emissions technologies. The World Nuclear Association (WNA) has an excellent summary of many proposed developments in the area of Small Modular Nuclear Reactors (SMRs). The list of projects is long but many (most) seem to be struggling. A key point from the WNA report is the following : “Licensing is potentially a challenge for SMRs, as design certification, construction and operation licence costs are not necessarily less than for large reactors.” This is a huge red flag for any SMR project.

A second objection is cost of nuclear power versus solar PV/wind plus storage. There is a lot of information about these relative costs, including well into the future. I am not aware of any studies that suggest that any nuclear technology will be able to compete with renewables and storage on price.recent study (December 2019) by the Australian Energy Market Operator (AEMO) and CSIRO concluded that SMR nuclear reactors will generate power costing ~8x that of rooftop or solar PV and wind, with solar and wind costs of power generation being similar. 

……. With Small Modular Reactors the poster child of nuclear power supporters, it is clear that there is a lot riding on this potential saviour for the nuclear industry after Fukushima and recent delays and cost blowouts in the European (especially UK, French and Finnish) nuclear industries.

With current focus on emissions reductions and the climate emergency, this is an excellent time for low emissions technologies. However, the need is now and renewables (solar PV and wind) plus storage (pumped hydro and batteries) are making a lot of progress in addressing the needs. My question is whether the cost structure and long lead times mean that nuclear technology is too expensive and late to play a part.

recent summary of the current state of the nuclear industry as a whole is depressing reading for someone who is enthusiastic about the nuclear industry’s prospects. A lot has to happen in the next decade and SMR technology isn’t ready yet. Is GE investing a lot in a technology that can’t compete with the dramatic advances in solar PV, wind and battery storage?……

GE’s adventures in nuclear developments seem like the kind of speculative play GE could happily fund when it was one of the world’s biggest and most powerful engineering companies. It doesn’t have that status anymore and my take is that it needs to cut its cloth and focus on projects that will have more immediate commercial outcomes. Of course, that is asking for a big rethink about how GE sees itself, but does it really have a choice if it wants to survive?

Offshore wind business

While there is some apprehension in the wind industry, especially in the US and China, as changes in regulations come into force next year, and 2020 has been messed up by COVID-19, there is a long-term future for wind power; offshore wind prospects look huge………

GE Renewable Energy is a major wind turbine supplier, with more than 42,000 of its turbines (mostly onshore) installed. Its role in the wind industry is extensive, from manufacture, digital optimization, operations and maintenance. Its onshore turbines range in size from 1MW to 5MW. GE installed ~50% of onshore turbines in the US last year, a 40% increase compared with the number of onshore turbines it installed in the US in 2018.

The offshore market is still emerging, with turbines substantially bigger than those used onshore. …..

The area that looks to me as if it could become a big winner is in offshore wind turbine developments, ….

A lot of investors have GE in their portfolios and a lot more are probably reflecting on whether GE might once again become a secure safe-haven investment. My biggest issue with GE is that it seems to me it is yet to understand that it is no longer the huge and dominant business that can afford to make big bets that burn a lot of cash. The current SMR nuclear programs in GE seem to be in this category. They have a very low chance of success but require major resources. I’d prefer not to have these distractions in a company I invest in…..

April 30, 2020 - Posted by | General News

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