Archive for the ‘Energy’ Category

“Renewable energy keeps oil price high”- Saudi Oil Minister

November 5, 2010

It would seem that the current oil price is determined by the level at which renewable energy costs are politically acceptable. The conclusion then must be that if the “renewables” go out of fashion and become less politically correct then the oil price could be significantly lower than it is!

The Financial Times carries the story:

Ali Naimi, the oil minister of Saudi Arabia, was in mischievous mood on Monday night, positing an oil price of $70 to $90 for the foreseeable future, and suggesting that oil consumers should be happy with such a settlement – because a price of more than $70 was needed to justify investments in renewable energy.

His remarks, which came in response to questions from the Financial Times at a dinner hosted by the Singapore International Energy Week, did not go down well with all sections of the audience – some were unhappy that the world’s biggest oil producer should suggest they be content with an oil price they felt was unnecessarily high.

Mr Naimi justified his $70 to $90 prediction, which he called a “comfortable zone” that should be welcomed by oil producers and consumers alike, by reference to renewable energy, which he suggested gave oil an “anchor” price. If the oil price were to fall below $70, then renewable energy would not be competitive, he said.

In other words, he seemed to be implying, governments and companies that have invested in renewable energy are at least partly responsible for setting a de facto minimum price for oil of $70 per barrel.

Nothing to do with those oil-producing countries wanting a price more than $70 and “less than $90”, and tailoring their production accordingly, then.

In fact, Mr Naimi said, the world’s oil market was already “a little bit oversupplied”, which he suggested proved that it was renewable energy that was keeping prices up.

By the way, that $90 – an upper limit of the range that he carefully dropped into the conversation – was $10 a barrel more than Mr Naimi had previously suggested was the range of the “comfort zone”. Oil markets took note, and prices nudged up: Nymex December West Texas Intermediate, a US benchmark, rose $1.88 to $83.31 a barrel just after the remarks.

Coal still king as green power IPO struggles

November 4, 2010

Black vs. green. Wikimedia commons

“Green” is no longer as fashionable and trendy as it used to be. The slime of Climategate has had its impact as has the arrogance of the alarmists. But if the hard-headed world of business investments is anything to go by it seems “black” is begining to trump “green”. An earlier post described the huge success that Coal India’s IPO had. This needs to be contrasted with the tepid response to the the IPO for ENEL Green Power which also listed today.

http://www.reuters.com/article/idUSTRE6A31RH20101104

Waning investor interest in clean energy contrasted sharply with enthusiasm for coal on Thursday as shares in Enel Green Power fell on their debut while Coal India’s soared.

Enel Green Power (EGP), which generates clean energy from hydro and geothermal to wind and solar and is Europe’s biggest listing since 2008, dropped over 4 percent on its debut despite a cut price offered to lure investors.

Shares of Coal India, a similar sized share sale at around $3.5 billion, gained 40 percent in Mumbai on the same day.

“The struggle for renewables reflects the fact that they are quite capital-intensive, in a world that is capital-constrained, and face regulatory uncertainty,” Robert Clover, alternative energy equity analyst at HSBC said.

India, which has the world’s fifth biggest coal reserves after the United States, Russia, China and Australia, is riding an economic boom that is thirsty for fuel.

“Fundamentally, Coal India is a structural play on India’s rising energy demand,” said Binay Chandgothia, chief investment officer at Principal Global Investors in Hong Kong.

TOP EUROPEAN LISTING

Europe has seen a resurgence in public offerings as equity markets trade around 6-month highs, and many European companies have managed to get their initial public offerings toward the upper end of their price guidance.

But EGP’s parent company Enel, an Italian power giant that also controls Spain’s Endesa, struggled to woo professional investors for the sale of up to a third of its renewable unit against a backdrop of underperforming green energy stocks

It was forced to cut the price to 1.6 euros a share from a price range of 1.8-2.1 euros, and early guidance of 1.8-2.4 euros, raising only 2.5 billion euros ($3.5 billion) compared with the 3 billion euros it had wanted to help reduce debt.

Institutional investors had raised concerns over EGP’s lower growth rate versus peers, its lack of a track record and uncertainty on green energy incentives, despite its wider geographical footprint and technology mix.

The Italian power giant, which also controls Spanish utility Endesa, eventually managed to get the deal away thanks to interest from retail investors, but it will raise less than its 3 billion euro ($4.2 billion) target, key to cut debt.

Even after the price cut, shares fell over four percent both in Milan and Madrid on the first day of trading.

“”In any jumbo IPO you want it to trade up so that you can say the market has a good feeling about it, but I don’t think a lot of people expected this to trade well given how much went to retail,” said a source close to the deal.

By contrast, an attractive IPO valuation for India’s dominant coal miner spurred demand from investors who applied for more than 15 times the number of shares on offer in the country’s largest-ever IPO. Enel Green Power IPO was just 1.1 times covered.

The Coal India listing comes at a time of record foreign fund inflows into Indian stocks and in one of the best years for IPO fundraisings for the country.

Sexy Coal India shares list with an opening gain of 32%

November 4, 2010

 

Bombay Stock Exchange

BSE: Image via Wikipedia

 

The Coal India IPO where the Government of India divested 10% of its shares in the worlds largest coal producer was massively oversubscribed. The share price was set at 245 Rs at the top of its offer range of 225 – 245 Rupees.

The shares were listed today and the price immediately zoomed to 324 Rs showing an opening gain of 32%.

The Economic Times reports:

The world’s largest coal producer today listed on the bourses with a handsome premium and zoomed over 32 per cent, over its IPO issue price of Rs 245 per share, to hit a high of Rs 324.75 in the first hour of trade on the Bombay Stock Exchange.

Partha S. Bhattacharyya, Chairman & MD, Coal India Limited says, “Many records have been broken and many peaks have been scaled. For the officials intensely involved in the process, the feeling largely resembles to that of a mother who has just given birth to a child. Indeed it is a moment of birth in the capital market that brings in huge responsibility on the management to rear the newborn baby into a strong and mature turnout by living upto the expectations of the investing community consistently.”

Prasad Baji, Senior VP, Edelweiss says, “Technically Coal India’s valuation is running not just as a coal company but since its model is different, it is selling in India where there is an assured offtake and its pricing will never see a price tag, therefore, it is not typically a commodity play as compared to other coal companies.

Investors included Janus Capital, Fidelity, Franklin Templeton and Capital International. Domestic investors included State Bank of India , ICICI Bank and Life Insurance Corp. Maximum subscription was in the high net worth category with subscription of around 25 times. Amit Aggrawal, a financial services executive who borrowed Rs 90 million to bid for Coal India shares, says that he would take some profits off the table at Rs 320 a share. “I may hold back some shares and sell them at a later stage,” says Mr Aggrawal.

Bats among the windmills

November 3, 2010

New “research” has shown that if wind turbines operate for less time – then the number of bat deaths at wind turbines would be reduced!

Paradoxically, it is the bats’ sophisticated sonar -based flying ability which enables them to avoid the spinning blades of a wind turbine, but which kills them.

Many large birds are killed by impact with the whirling blades of wind turbines but the large number of bats that are killed die because the blood vessels in their lungs explode as their sonar helps them to avoid the blades themselves but which lands them in the low pressure zone behind the blades.

The latest independent reports estimate the number of birds killed by wind turbines at about 100,000 per year. That’s according to a 2007 report from the National Research Council called “Environmental Impacts of Wind-Energy Projects. The American Bird Conservancy estimated in 2003 that between 10,000 and 40,000 birds were killed each year at wind farms across the country, about 80 percent of which were songbirds and 10 percent birds of prey. “With the increased capacity over the last seven years, we now estimate that 100,000 – 300,000 birds are killed by wind turbines each year,” said Conservancy spokesman Robert Johns.

 

Brazos Wind Farm in the plains of West Texas

BAT KILLER: The zone of low pressure behind wind turbine blades seems to be responsible for killing migrating bats:Image via Wikipedia

 

Wind Turbine blades are airfoils and there is an air pressure drop across the blade width of 5 – 10 kiloPascals. The low pressure zone behind the blades does not persist for very long and the air pressure quickly equalises a few metres behind the blades. The greater the power output of a turbine, the greater its height, the greater the pressure drop and the larger the low-pressure zone. But it is this low pressure zone which is a death trap for bats.

Scientific American: Scientists have known since 2004 that wind farms kill bats, just as they kill birds, even though the flying mammals should be able to avoid them. Many biologists thought that the bats, like their avian counterparts, might be falling victim to the fast-spinning turbine blades. But an examination of 188 hoary and silver-haired bats killed at a wind farm in southwestern Alberta in Canada between July and September in 2007 showed that nearly half showed no external injuries—as would be expected if the giant blades had smashed the flying mammals to the ground.
Instead, 90 percent of the 75 bats the researchers ultimately dissected had been killed by burst blood vessels in their lungs, according to results presented in Current Biology—suggesting that the air pressure difference created by the spinning windmills had terminated them, not contact with the blades. “As turbine height increases, bat deaths increase exponentially,” says ecologist Erin Baerwald of the University of Calgary in Alberta, who led research into the deaths as part of her master’s project. “What we found is a lot of internal hemorrhaging.”

Pressure drops of as low as 4.4 kilopascals kill common lab rats and all the bats autopsied showed internal damage and bleeding consistent with this type of death, known as barotrauma. “If bats have a lungful of air as they fly through the air-pressure change, there’s nowhere for the air to go,” Baerwald explains. “The small blood vessels around the lungs burst and fill the lungs with fluid and blood.”

This may also explain why, although some birds are killed by wind farms, the majority of casualties are bats.

Recently research has suggested that the colour of a turbine can affect the attraction exercised on insects which seem to like congregating at wind turbines. The gathering of insects is thought to be the reason why so many bats make their way to these locations. The research suggested that insects do not like the colour purple and it has been proposed that painting all wind turbines purple could save some bats.

Now new research published online November 1, 2010 in Frontiers in Ecology and the Environment has come to the not very unsurprising conclusion that if wind turbines operate for less of the time less bats will be killed!!

Via EurekAlert we learn that:

In a study to be published online November 1, 2010 in Frontiers in Ecology and the Environment (e-View), a journal of the Ecological Society of America, Edward Arnett from Bat Conservation International in Austin, Texas and colleagues examined the effects of changes in wind turbine speed on bat mortality during the low-wind months of late summer and early fall.

Currently, most wind turbines in the U.S. are programmed to begin rotating and producing power once wind speed has reached approximately 8 to 9 miles per hour (mph)—the wind speed at which turbines begin generating electricity to the power grid is known as the cut-in speed. Wind turbines with a low cut-in speed run more frequently than those set at higher cut-in speeds since they begin rotating at lower wind speeds.

The researchers found that, by raising the cut-in speed to roughly 11 mph, bat fatalities were reduced by at least 44 percent, and by as much as 93 percent, with an annual power loss of less than one percent. That is, programming the turbines to rotate only when the wind reached approximately 11 mph or higher caused the turbines to rotate less frequently and, therefore, killed significantly fewer bats. Because this was performed during months with seasonably low wind speeds already, the overall energy loss was marginal when the researchers calculated the annual power output.

“This is the only proven mitigation option to reduce bat kills at this time,” said Arnett. “If we want to pursue the benefits associated with wind energy, we need to consider the local ecological impacts that the turbines could cause. We have already seen a rise in bat mortality associated with wind energy development, but our study shows that, by marginally limiting the turbines during the summer and fall months, we can save bats as well as promote advances in alternative energy.”

Of course it does not need a great deal of research to conclude that if the wind turbine did not rotate at all no bats would be killed, and if the contraption did not even exist then all  bird collisions with the stationary towers could be eliminated.



US wind power installations down by 72%

November 1, 2010

The New York Times

 

broken wind turbine: image thetechherald.com

 

In July, the American Wind Energy Association reported that it was having a lousy year. It appears the third quarter of 2010 wasn’t much better.

According to an analysis released on Friday, the trade group reports having its slowest quarter since 2007, adding just 395 megawatts of wind power capacity. For the year to date, new installations were down 72 percent.

Natural gas, the chief fossil-fuel competitor to renewable sources of electricity, is also dirt cheap these days, making wind power a tougher sell for cost-conscious utilities and state regulators. Despite lots of talk on Capitol Hill about the hazards of fossil fuels, their contribution to climate change and the need for broad, long-term supports for the renewables industry, legislators have failed to reach agreement on what that might look like.

But then the lobbying  gets going

“If federal policymakers do not act quickly to provide investment certainty through a Renewable Electricity Standard, and longer-term tax policy like our competitors enjoy,” Denise Bode, the chief executive of the wind association, said in a prepared statement, “the U.S. wind industry will continue to stall out.”

Elizabeth Salerno, director of industry data and analysis with the American Wind Energy Association, said in a phone call that state-level policies have helped. Roughly 30 states have mandatory targets for diversifying their energy portfolios with more renewable power. “They’ve been doing a great job leading the effort to get renewables installed over the past decade,” Ms. Salerno said.

The trade group reported some interesting developments — including Oregon’s emergence as the leader in new wind installations for the third quarter, eclipsing Texas, which has long held the top slot. The reason, the group suggests, is that Texas has hit a transmission wall and is trying to sort out how to get its west Texas wind resources to the load centers in the center of the state.

Nuclear renaissance: Vietnam gets nuclear reactors from Russia and Japan, Japan gets access to rare earths

November 1, 2010

Now Vietnam is going nuclear with its first 2 plants coming from Russia and the next 2 from Japan. Unexploited rare earth deposits in Vietnam are receiving a great deal of attention from countries hit by the Chinese monopoly on rare earth supplies.

Chosun Ilbo reports

Russian President Dmitry Medvedev and his Vietnamese counterpart Nguyen Minh Triet have called for increased trade and investment between their two countries. The two leaders met Sunday in Hanoi to seal a nuclear plant construction agreement and other bilateral deals. Under the $5 billion agreement, Russia will build Vietnam’s first nuclear power plant. Construction is expected to start in 2014.

Asahi Shimbun reports on a deal where Japan  gets access to the rare earth resources in Vietnam in exchange for two 1000 MW nuclear reactors worth 14.4 billion $ to the Japanese nuclear construction industry.

The nuclear reactor construction agreement, worth an estimated 1 trillion yen ($14.4 billion), gives the green light for Japanese companies to build nuclear facilities in an emerging nation’s fledgling nuclear industry for the first time.

The two reactors will be built in the southeastern province of Ninh Thuan and are scheduled to start operations in 2021. They will have a combined output of 2 gigawatts. Vietnam plans to build 14 nuclear reactors by 2030. Construction deals for four reactors in Ninh Thuan province have so far been agreed upon, including the two to be awarded to Japan. Russia won the rights to build two reactors in December last year.

Japan, which has been trying to use infrastructure exports as a springboard for its flagging economy, began bidding for the nuclear reactor project earlier this year. In August, a delegation of Japanese business leaders led by Japan’s industry minister visited Vietnam to lobby officials. They offered financial assistance and training for Vietnamese people.

Visiting Prime Minister Naoto Kan and Vietnamese Premier Nguyen Tan Dung also agreed on joint development of deposits in Vietnam of rare earth elements, part of a Japanese drive to reduce its reliance on China for supplies of the vital raw materials, which have been obstructed following a diplomatic dispute with Beijing.

A joint team of Japanese and Vietnamese businesses is currently applying for rare earth mining rights. The Japan Oil, Gas and Metals National Corp. discovered rare earth veins in the northern Lai Chau province about 10 years ago. Toyota Tsusho Corp., Sojitz Corp., and an arm of a Vietnamese public corporation have been preparing plans for joint development.

The underground reserves are believed to be capable of yielding 3,000 tons of rare earths a year, about 10 percent of Japan’s current annual requirement.

The Japanese government has offered to provide expertise and training in surveying, excavation, and processing the rare earth metals to Vietnam. Japan is also likely to dip into official development assistance to help the country build infrastructure such as roads and water supply near the mines. In a separate project, Sumitomo Corp. is looking into mining rare earths in Yen Bai province in the north of Vietnam.

Solar power subsidies go wrong even in Australia

October 31, 2010

The evidence that subsidies are inherently unhealthy and can be counter-productive continues to grow :

Now the Sydney Morning Herald reports that in NSW

HOUSEHOLDS will pay an extra $600 on their electricity bill over six years to cover the $2 billion cost of the failure of the state government’s overly generous solar power scheme. If elected in March, the opposition will have the scheme, which runs to the end of 2016, reviewed by the auditor-general so that it can decide on its future.

From midnight last Wednesday, the government slashed from 60¢ to 20¢ per kilowatt hour the tariff paid to households installing solar panel systems because the surging number of applications has blown out the scheme’s cost.

In reports tabled in Parliament last week, the government disclosed that it had been advised that even after slashing the tariff for solar panels, it anticipated 777 megawatts of solar panels would be installed by the time the scheme closed. Already, 200 megawatts of capacity has either been installed or ordered. The reports detailed the total cost to households is forecast to reach $1975 million by 2017, placing a burden on homes at a time when power prices are rising sharply already.

The government refused to indicate when it first became aware that the initial 50-megawatt target had been breached, which triggered an automatic review of the scheme. The government began that review in August. However, Country Energy, one of the largest distributors in NSW, was informing solar industry officials as early as May that the target had already been reached. Even so, the government ”dithered until August” before holding its review, with the report only completed last week, opposition climate change spokeswoman Catherine Cusack said yesterday.

‘Labor’s billion-dollar blowout will be passed on to families who will pay at least an extra $100 per year on their electricity bills every year until 2017,” she said. The total cost to families in some regional areas could be $1000.

The NSW scheme paid existing solar clients 60¢ per kilowatt hour for all energy produced; other states have ”net” schemes that pay for surplus power after domestic use is taken off. NSW had the most generous scheme – now the least. Victoria’s net scheme pays 60¢ per kilowatt hour, Queensland pays 44¢ and Western Australia pays 40¢.

Sweden: Opposition to wind power grows

October 30, 2010

Freely translated from Ny Teknik:

Opposition to wind power is now so extensive that it can be compared with nuclear public opinion as it was more than 30 years ago. Now opponents are kicking-off a campaign with the slogan “Wind power – no thanks.”

 

Wind Power - No Thanks

 

With 20 000 registered members and a symbol reminiscent of the 80’s symbol “Nuclear power – no thanks’, the Association for Swedish Landscape Protection is growing steadily as is the opposition to wind power.
“You can definitely compare today’s opinion with the movement against nuclear power, “said Karin Hammarlund, a researcher in landscape analysis at SLU, to the newspaper “Miljörapporten”
But there is one important difference between the protests against nuclear power and the resistance to wind power, says Karen Hammarlund.
“What is causing concern is not wind power technology in itself but how it affects the landscape and social structures”.
According to Elisabeth von Brömsen, chairman of  Swedish Countryside Protection, the resistance movement has this year gained about a thousand new members, both private individuals and associations.

It is beginning to get through, I think, that with the existing nuclear and hydro power available in Sweden, the role for intermittent wind power is marginal and primarily as an exercise in the following of  “fashion”. It has little to contribute to either generation capacity or transmission security. And it is expensive.

But the nuclear renaissance is continuing steadily anyway and history will probably show the “wind story” to be little more than a diversion from common sense for a decade or two.

Nuclear Renaissance continues: Germany extends life of nuclear reactors

October 30, 2010

Der Spiegel:

Opponents of nuclear power suffered a setback in Berlin on Thursday as the federal parliament approved legislation that would effectively repeal Germany’s planned withdrawal from atomic power. Now nuclear plants can stay open an average of 12 years longer than originally planned.

Environment Minister Norbert Röttgen, a member of Merkel’s CDU, countered  criticism by saying: “You are at a dead loss when it comes to energy policy.” He said the Greens, SPD and far-left Left Party were scaremongering and merely seeking to gain votes. “They are placing their party interests before the interests of the country,” he said. Röttgen also stated that his government’s energy plan — which foresees 80 percent of all electricity coming from clean energy sources by 2050 — was the most ambitious renewable energy program in the world.

The Green Party, in particular, sought in vain on Thursday to prevent the vote at the last minute.

Jörg van Essen, a senior party official with the FDP, angered many with his statement that, “it has never done any parliament in history good when a party appeared appeared wearing the same uniform,” a statement he made while staring at the Greens. Members of the party were angered by the statement, which they considered to be a comparison to the uniformed Nazi members of parliament during the Weimar Republic era.

Meanwhile, members of the government accused the Greens of disobeying parliament. “The Greens need to know one thing: The greater the racket they cause, the more damage they do to themselves in terms of how seriously they are taken outside,” said Peter Altmaier, a senior member of the CDU.

The quiet renaissance is continuing in other parts of Europe as well. The Financial Times points out that:

In Italy, which decommissioned its four power stations after the country voted for a moratorium following the 1986 Chernobyl disaster, the government is considering new nuclear power stations. Sweden has embarked on a similar path, voting earlier this summer to overturn a 30-year-old ban on new reactors. Neighbouring Finland has announced plans to build two reactors in addition to one already under construction. In the UK, the coalition government, is also backing new plants.

Several east European countries, many of which are dependent on gas imports from Russia, are also proposing new reactors.

“Globally, there is a nuclear revival,” says Colette Lewiner, head of the Energy and Utilities division at Capgemini, “but it is much bigger and sustained in Asian countries, in particular in China, which has proposals to put eight to nine reactors into operation a year.”

For Europe’s cash-strapped governments, hit by the credit crunch, extending the life of an existing reactor is much cheaper than building a new one. In France, for example, recent estimates suggested it would cost about €500m ($697m) to extend the life of a 1,000MW reactor for 20 years. This compares with a cost of about €3bn for the same capacity from a new one that would have a lifespan of about 60 years, says Ms Lewiner.

On the fuel supply side as well companies are developing strategies and positioning themselves to take advantage of the renaissance. From London South East comes the news that:

Severstal, the largest steelmaker in Russia, has made a bid approach for its first uranium asset in Spain, seeking to diversify its mining business and benefit from an expected rise in European demand for nuclear power.

Severstal has approached Berkeley Resources Ltd about a possible takeover of the uranium exploration company worth about A$304 million ($294.9 million), sending Berkeley shares sharply higher in London.  Severstal is considering a cash bid for Berkeley, also listed in Sydney, at A$2.00 (122 pence) per share, Berkeley said in a statement on Friday.

The big due diligence question will concern the start-up of a uranium concentrate line that is part of the Salamanca project, Renaissance Capital analyst Boris Krasnojenov said. The line operated for 16 years before closing in 2000 due to low uranium prices. ‘Some people believe that nuclear generation is the future for Europe because regulation measures linked to coal generation emissions will increase,’ Krasnojenov said.


Solar power subsidies are not sustainable

October 28, 2010

 

The power plant.

Planta termosolar Andasol: Image via Wikipedia

 

In Spain the huge subsidies (with feed in tariffs as much as ten times the average cost of electricity production) had led to a rush of developers getting into projects which is now proving unsustainable. Bloomberg reports that

Solar investors  were lured by a 2007 law passed by the government of Prime Minister Jose Luis Rodriguez Zapatero that guaranteed producers a so-called solar tariff of as much as 44 cents per kilowatt-hour for their electricity for 25 years — more than 10 times the 2007 average wholesale price of about 4 cents per kilowatt-hour paid to mainstream energy suppliers. Now more than 50,000 other Spanish solar entrepreneurs face financial disaster as the policy makers contemplate cutting the price guarantees that attracted their investment in the first place.

Spain stands as a lesson to other aspiring green-energy nations, including China and the U.S., by showing how difficult it is to build an alternative energy industry even with billions of euros in subsidies, says Ramon de la Sota, a private investor in Spanish photovoltaic panels and a former General Electric Co. executive. “The government totally overshot with the tariff,” de la Sota says. “Now they have a huge bill to pay — but where’s the technology, where’s the know-how, where’s the value?”

The situation in Germany is equally disturbing. The New Scientist reports

Solar power is intermittent and can arrive in huge surges when the sun comes out. These most often happen near midday rather than when demand for power is high, such as in the evenings. A small surge can be accommodated by switching off conventional power station generators, to keep the overall supply to the grid the same. But if the solar power input is too large it will exceed demand even with all the generators switched off. Stephan Köhler, head of Germany’s energy agency, DENA, warned in an interview with the Berliner Zeitung on 17 October that at current rates of installation, solar capacity will soon reach those levels, and could trigger blackouts.

Subsidies have encouraged German citizens and businesses to install solar panels and sell surplus electricity to the grid at a premium. Uptake has been so rapid that solar capacity could reach 30 gigawatts, equal to the country’s weekend power consumption, by the end of next year. “We need to cap installation of new panels,” a spokesperson for DENA told New Scientist.

The experience with highly subsidised feed-in tariffs is proving to be less than successful. In country after country the use of such subsidies is proving to be a major distortion, unhealthy and unsustainable. Countries such as India which are contemplating the use of similar subsidies for promoting intermittent, wind or solar power are beginning to have second thoughts and are now having to consider caps. It is beginning to sink in that such intermittent capacity cannot be counted into the generating base and does not reduce the need for alternative, backup generating capacity. Moreover the use of intermittent power from solar and wind only ensures that the operating conditions for the alternative capacity and for the grid are fundamentally more inefficient. This in turn leads to a hidden cost as a consequence of using the solar or wind power.

It is likely that these subsidies will have to be scaled down drastically.