How I Know Things Aren’t Too Bad In Odessa (yet)

I don’t watch a lot of TikTok, but somehow the algorithm one day put me onto a sandwich shop in Odessa. They do a live every morning (afternoon/early evening over there) which shows them making sandwiches, and transacting per normal. I hope that live is on every day.

This indicates that supply chain is still working as all of the ingredients seem to be in ample supply, the grid is up for electricity/internet, and the monetary system isn’t broken down as people seem to be transacting per normal.

Coming from a supply chain perspective, this seems to be good news for now.

Life in a Realm of Scarce and Expensive Energy

In one of the Hornblower novels, set in the early 1800s, the protagonist is staying in a hotel. Thinking about the bill he is going to have to pay on checking out, he realizes that there is going to be a significant item for ‘light’…ie, candles.   I believe this is historically accurate–candles were expensive enough that they could not just be given away free with the room.

Whereas for most of the last 100 years in America, you could just turn on the lights in your hotel room without worrying about what the added charge on your bill was going to be.   And–much more significantly in terms of energy use–you could adjust the heater or air conditioner to suite your temperature preference, again without worrying about added charges.

With the unrealistic energy plans of the Biden administration and of most European governments, such luxuries may soon be a thing of the past.   I doubt that you will actually have to pay extra for keeping the lights on, but it’s entirely possible that you may have to pay extra if you want it cooler than, say, 78 degrees in summer or warmer than 64 degrees in winter–perhaps with those thresholds adjusted according to the balance of total grid power demand and availability, so that an extreme air-conditioning surcharge kicks in at 88 degrees on an especially hot and windless day.

And not just in hotels. It’s likely that stores, restaurants, etc will get significantly cooler in winter and warmer in summer.   And unless you can afford to not worry about your electricity bill very much, you will likely have to adjust your home temperatures to fit the current supply/demand profile on the grid–indeed, in some jurisdictions, it may be prohibited to violate the required limits no matter how much you are willing to pay.   (With likely exceptions for certain ‘public servants’.)

Above and beyond the impact on individual citizens and families, you can expect that many kinds of energy-dependent businesses, especially manufacturing businesses, will become increasingly uncompetitive in the US.   Again, there will likely be an exception for certain politically-well-connected businesses. But overall, expensive US energy will likely drive a new wave of offshoring.

And I haven’t even talked about transportation.

The above is not carved in stone, of course, there is still a good chance to escape it, as people begin to perceive (from experience) the realities behind all the idealistic talk, theories, and harangues.   But it will be a close-run thing.

Anybody Surprised?

Battery metal costs, shortages could add years to pursuit of cheaper EVs

Surging battery prices and shortages of metals and materials  likely will last for some time, Toyota chief scientist Gill Pratt warned this week.

“The world has thought about this in too simple of a way,” Pratt said of the auto industry’s rapid shift to electric vehicles, warning “there’s going to be this crunch [of] not enough materials,” and conditions likely will remain “hard” in the near- and mid-term.

I’m not surprised:

Coming: a Battery Supply Crunch? (2017)

‘Green’ Energy: Materials-Intensive–And It Matters (2021)

Meanwhile, Biden and his ‘energy secretary’, Jennifer Granholm, are still telling people concerned about high gas price to just get an EV.

Nuclear Power: Has the Time Finally Come?

Commercial nuclear power emerged in the mid-1950s, to great enthusiasm. The Eisenhower administration promoted it as a major part of its  Atoms for Peace  program.  There was talk about ‘electricity too cheap to meter,’ and about making the world’s deserts bloom via nuclear-powered desalination.

And quite a few commercial nuclear plants were indeed built and put into operation.   In the US, there are presently 93 commercial reactors with aggregate capacity of 95 gigawatts, accounting for about 20% of America’s electricity generation.   But overall, adoption of commercial nuclear power has not met early expectations.   Costs have been much higher than were   expected.   There have been great public concerns about safety, stemming originally from the association of nuclear power and nuclear weapons as well as by practical concerns and then supercharged by the Three Mile Island accident in 1979 and then by Chernobyl (1986) and the Fukushima disaster in 2011.   Permitting and construction times have been long and   unpredictable, driven by the public concerns as well as by the general growth of regulation and litigation in the US and the custom, one-off manner in which these plants have been constructed.

There are reasons to believe that the stalled state of nuclear power may be about to change.   Some factors are:

Concerns about CO2 emissions, combined with increasing realization of the intermittent nature of wind/solar energy, point to nuclear as a solution that could be both practical and politically acceptable.   Europe’s dependency on Russian natural gas, the downside of which has been strongly pointed out by recent events, further builds the case for nuclear on that continent.   Politicians are feeling cornered between their promises of green-ness, the now-obvious dangers of energy dependency, and the need to not do too much economic damage if they want to get reelected.   Some will turn to nuclear.

The Cold War fears of nuclear annihilation are now a long way behind ussurely there are many fewer people who have nightmares about mushroom clouds than there were in, say, 1985.   (Although this point has been partially negated by Russia’s nuclear saber-rattling and by the battles around the Chernobyl areastill, I don’t believe nuclear fears are anywhere near the original-cold-war level)

The French experience with nuclear power, from which it generates about 70% of its electricity, helps build credibility for nuclear as a practical and safe energy source.   Also, the US Navy’s successful operation of nuclear submarines and other ships over several decades.

The downsides of wind and solar  in terms of their very considerable land use as well as their fluctuating outputs, are being better understood as a result of experience.   Starry-eyed views of a new technology often become a little less starry-eyed following actual experience with its downsides.

New-generation nuclear plants which can be largely built in factories, substantially reducing the on-site construction time and effort required and potentially reducing the capital costs per kilowatt, are being developed.   The greater standardization, as compared with one-off construction, will hopefully also reduce licensing problems and delays.   Very importantly, most of the reactors are designed to avoid meltdown situations even if left unattended and without backup power.

Most of the new plant designs are of a type called  Small Modular Reactors, although the definition of ‘small’ varies from case to case.   Companies in this space include the GE-Hitachi joint venture, a private company called NuScale (soon to go public via a SPAC), Rolls-Royce, the Canadian company ARC Energy, and a consortium of French companies developing a product to be called Nuwber.   I’ll discuss some of those SMR products in more detail later in this post.   There is also interesting work being done at Terra Power (Bill Gates is founder and chairman), which will probably merit a separate post, and on designs using thorium rather than uranium as a fuel.

The products which seem furthest along toward commercial adoption are the modular design from NuScale and the BWRX-300 from GE-Hitachi.

Some deals which are signed or in process:

In  Utah, NuScale plans to deploy their system for an organization called UAMPS (wholesale power services)

In  Romania, NuScale has a deal with SN Nuclearelectrica for a 6-module unit.

In  Canada, Ontario Power has picked the GE-Hitachi system for its first nuclear sitethey ultimately plan to install up to 4 reactors there.

In  Poland, GEH has a letter of intent for up to 4 BWRX-300s to be installed by Synthos Green Energy.   Also in Poland, NuScale is working with KGHM, a leader in copper and silver productionsounds like this application is for industrial energy rather than for grid electricity.

In  Estonia,   Fermi Energia OÃœ is moving toward deployment of a BWRX-300.

The  US Tennessee Valley Authority has  embarked on a program to install several SMRs at its Clinch River site, starting with the BWRX-300.

The CEO of Duke Energy, Lynn Good, says that the company is talking to GE-Hitachi and NuScale as well as TerraPower and Holtec International about SMRs and advanced nuclear with storage capability.

Despite the traction, however, numerous challenges remain for nuclear.

Read more

Worthwhile Reading and Viewing

A list of common cognitive biases

Formative experiences persist over long spans of time

The current status of artificial intelligence in medicine

Related: Limitations of neural networks   Also: Playing against AI can improve the abilities of human Go players.

The realities of energy storage.   I have observed that very few journalists comprehend the difference between a Kw and a Kwh–and why it matters.  (And this includes business and technology journalists.)

Paul Graham, at twitter:

Putin’s bungled invasion shows us that democracy’s greatest advantage, in the long term, is simply its “guarantee that leaders are regularly replaced.”  He was responding to this article.

Some people create or discover new things. Some enforce social norms. There is little overlap between the two.

Graham (who is one of the very few venture capitalists to have attended art school) also recommends this art history thread.