Posts Tagged ‘Renewable energy’

Solar Energy is in crisis

September 20, 2012

The solar energy industry is in crisis and I keep reading that it is because subsidies are being reduced or eliminated. As if subsidies come for free. I don’t believe subsidies work and the current crisis only proves that the fundamental issue is not subsidies but that solar energy is not (yet ?) commercially viable. It surely has a place in some very particular situations and the best use of solar energy remains with some isolated users or as a “support” for other energy sources. But for base-load power generation it is just  not viable.

Peter Glover writes in the Energy Tribune:

The global solar power industry is in crisis. The industry blames widespread national subsidy cuts and over productivity; China, in particular, being widely vilified on the second count. However, the real cause of the solar industry’s malaise runs deeper, rooted, as it is, in the inescapable fact that, in terms of current technology, commercial scale solar energy remains a non-viable proposition.


Spain to tax renewable energy

July 13, 2012

Yet another unwanted consequence of having subsidies in the first place.

First the Spanish Government encouraged a “renewables boom” by providing feed-in tariffs which were obscenely generous (about 4 times higher than the going rate) and irresistible to developers.  This was only one of the many acts of profligacy which has led to the current crisis.

And now the Spanish Government is to try and redress the balance by imposing “a levy to spread the expense of closing a gap between costs and revenue in the country’s electricity business, which has racked up debts of 25 billion euros” . Since the largest gap between true cost and revenue is of course with solar and wind plants they will be hardest hit by the levy.



Subsidy madness in the name of environmentalism is unsustainable

July 6, 2012

I don’t believe in subsidies.

In over 30 years in power generation I have yet to see a convincing case of public subsidies in the market place actually helping to commercialise new technologies. I have seen cases where Government support at the research stage has helped to bring new areas into focus and which has eventually led to commercially driven investments which have deployed the technology. But temporarily distorting the market place by means of public subsidy is unsustainable and does not – in itself – help to make a new technology commercially viable. In fact an artificially distorted market in favour of a new technology only helps to cuccoon and insulate it such that there is no incentive left to make it competitive. Subsidies shift the focus from technology development to  subsidy maximisation and when subsidies begin to be removed all creativity is wasted on prolonging subsidies.

The case of subsiding the market place for the deployment of renewable energy is a case in point. Developing technology for wind and solar power is desirable but distorting the market place to deploy wind and solar is just plain stupid and unsustainable.

1. Der Spiegel

Solar subsidies cost German consumers billions of dollars a year and are widely regarded as inefficient. Even environmentalists are concerned that Berlin’s focus on solar comes at the detriment of other renewables. But the solar industry has a powerful lobby, and politicians have proven powerless to resist.

…… A new study by Georg Erdmann, professor of energy systems at Berlin’s Technical University, reveals just how far Germany’s current center-right governing coalition — made up of Chancellor Angela Merkel’s CDU and the business-friendly Free Democrats (FDP) — has strayed from its own self-imposed goals. Erdmann has calculated the effects that the latest changes to the EEG will have between now and 2030. He believes that subsidies for renewable energy, including an expansion of the power grid, will saddle energy consumers with costs well over €300 billion ($377 billion). ….

2. BBC News

Fight on for wind power subsidies

Wind power firms warn they may take the government to court if they get caught in a political row over subsidies. After conducting technical studies, the energy department proposed a subsidy cut of 10% for power from onshore wind. But the chancellor is under pressure from back-benchers to scrap subsidies, and is said to favour a 25% cut.

The industry body, Renewable UK, says it may take legal action if the government makes a decision that overrides its own technical evidence. … 


California’s Green Suicide

New economic impact study on California’s Global Warming Solutions Act finds that the average California family will end up paying an additional $2,500 annually by 2020. In addition, the state is expected to lose an additional 262,000 jobs, 5.6 percent of the gross state product, and a whopping $7.4 billion through decreased annual state and local tax revenues as a result.

The California Manufacturers and Technology Association released a new report last week that suggests costs associated with AB 32 may be a lot higher than previously estimated. AB 32, otherwise known as the California Global Warming Solutions Act of 2006, was signed into law by Governor Arnold Schwarzenegger- propelling California to the forefront in the fight against global warming. Successful passage of the law effectively turned the state into one of the most stringent regulators of green house gas emissions in the nation and globally. Some would argue that the move all but eliminated California’s competitive edge in today’s market. ……

Political correctness shifts away from wind in the UK

June 21, 2012

I have a theory that political correctness is transient and driven by electoral advantage. But common sense – over time – provides the restoring force.

The move away from wind power euphoria is becoming all more evident in the UK. It is a shift that is inevitable since – eventually – common sense does prevail. And as with all such shifts of political correctness it is accompanied (or is it caused) by a change which appears to provide some electoral advantage for somebody. Causes which once provided electoral advantage to the Greens across Europe – because they were seen (partly) as being the “minority” view being suppressed by the establishment – are now themselves part of the establishment view across most parties. But these views are now perceived as being suppressive and coercive and the backlash is beginning to move us back towards common sense.

No doubt the coming Age of Gas will be supported by all the political parties as reduced energy costs provide electoral advantage. And being cynical, it will also – just like wind power – be exploited to excess, to the point where it becomes coercive and suppressive of other alternatives and then political correctness will shift again.

Benedict Brogan writes in The Telegraph:

A government re-think on costly green energy resources is a winning statement of intent. .. 


Renewable Energy Law has weakened the German electricity grid

May 13, 2012

The Renewable Energy Law was introduced 12 years ago in Germany. It prioritises the use of “green energy”. What was thought to be a way of helping the introduction of new technology and fulfilling a political agenda has backfired and has led to a severe weakness of the electricity grid and the second-highest electricty price in Europe.

The Law leads to large conventional coal and gas plants leaving the grid far too early  and these are the only plants which can guarantee a stable supply of power. This in turn has led to many of these plants being decommissioned prematurely since they were being forced to operate at uneconomic levels of loading. They are then no longer available to compensate when the wind does not blow or at night or on cloudy days as wind and solar power generation fluctuate wildly.

The hidden costs of renewable power are now being revealed and an entirely new market for “balancing power” has appeared. The “balancing power” – nearly always gas-fired  – is just to compensate for the inherent unreliability of wind and solar.  For every 100 MW of renewable capacity added around 70 MW of (mainly) gas-based balancing capacity has to be added to ensure a stable and steady supply of power. With subsidies and “balancing” costs added to the direct cost of building wind or solar plants, the actual costs of renewable power have been exorbitant and have contributed significantly to the increase of electricity prices to the consumer. Germany now has the second highest consumer electricity price in Europe (second only to Denmark with its profligate use of subsidised wind turbines)

The German Federal Network Agency has issued a report warning of the dangers during the coming winter. Daniel Wetzel of Die Welt writes (translation from GWPF – Philip Mueller):

Last winter, on several occasions, Germany escaped only just large-scale power outages. Next winter the risk of large blackouts is even greater. The culprit for the looming crisis is the single most important instrument of German energy policy: the “Renewable Energy Law.”


Wind and solar to get licence to kill bald eagles for 30 years

May 11, 2012

It would seem that the wind lobby is more influential with the US Government than the wildlife lobby. Of course there is a lot more money involved in extracting subsidies for wind and solar energy than there is in wildlife.

The US Fish and Wildlife Service has been investigating the increased incidence of wildlife deaths (large birds, foxes and tortoises among others) at solar and wind energy project sites. The USFWS now proposes – presumably because these deaths will continue for a long time at such projects – that they be given a licence to kill for 30 years! But this support for solar and wind projects is a tacit acknowledgement by the US Fish and Wildlife Service that renewable projects are rather more dangerous to large birds and other wildlife than the enthusiasts would like us to believe.

Euphemistically, the USFWS obscures these licences to kill  under the innocuous sounding “programmatic permits to authorize eagle take“.

The Foundry has this :


India, Italy to cut renewable energy subsidies

April 4, 2012

Subsidies for renewable energy only distort the market and are counter-productive. The game in renewable energy (wind and solar) has become the extraction of subsidies rather than the production of electricity. The sooner they are dismantled the better.

Two developments in Italy (which is virtually bankrupt) and in India (where growth is slowing) – both driven by economic considerations – are indicators that that some of the artificial gloss around renewable energy may be peeling off. Exorbitant feed-in tariffs for renewable energy are to be curtailed in Italy while very attractive tax-breaks for wind-power in India are to be reduced.

Italy to cut renewable energy subsidies

Italy will move to reduce taxpayer subsidies to its renewable energy sector after last year’s boom in solar power, Industry Minister Corrado Passera says. The official said Saturday in Cernobbio, Italy, that taxpayer subsidies doled out to the wind and solar power industries had generated “excessive” investments in the sector, The Wall Street Journal reported. “Italy has important goals to meet and even surpass,” he said, but added, “we need to do so without over-reliance on taxpayer resources.”

The government, Passera said, will in the coming years “realign” the level of its incentives to those of other European countries. ….

The Hindu Business Line reports on the new budget measures in India. Windmill developers to lose tax breaks

Windmill developers will no longer enjoy lower tax outgo in the first year, for investing in windmills.

Effective April 1, accelerated depreciation – which allows the investing company to fast track the write-off of certain assets for tax purposes – will not be allowed to wind energy developers. The Income Tax department has amended the rules regarding this, through a notification.

Until FY-12, a deduction of up to 80 per cent was allowed if the wind project was commissioned before September of a fiscal. Projects commissioned in the next half of the fiscal got a 40 per cent deduction. Now developers will only be allowed 15 per cent depreciation.

But wind equipments will still enjoy the 20 per cent additional depreciation prescribed for power equipments in the recent Budget. That would make for an effective 35 per cent depreciation. …….

Strong winds in Scotland – wind turbine burns

December 9, 2011

It’s well known that wind turbines don’t like strong winds — but a simple shut down is preferable to this:

Ardrossan wind farm in North Ayrshire on 8th December

Subsidies for electricity production in the US show that renewables are far from commercialisation

November 23, 2011

Data for 2010 is now available from the US Energy Information Administration.  Solar and Wind power are still a long way from being commercial with just direct subsidies being equivalent to 7.8 and 5.6 cents/kWh respectively. Indirect subsidies and increased costs for alternate capacity are not included.

My view of subsidies in power generation is that they are usually counter productive and provide windfalls for developers and constructors but rarely lead to benefits for the consumers of electricity.

Factors Affecting Electricity Prices:

The average retail price of electricity in the United States in 2010 was 9.88 cents per kilowatt-hour (kWh). The average prices by type of utility customer were:

  • Residential: 11.6¢ per kWh
  • Transportation: 11.0¢ per kWh
  • Commercial: 10.3¢ per kWh
  • Industrial: 6.8¢ per kWh


Wind power has less potential than claimed and the role of gas is underestimated

August 14, 2011

That the intermittent nature of solar and wind power inherently limits how such capacity can be installed and despatched seems pretty obvious but has always been underestimated by the renewable energy lobby. As subsidies are reduced in the face of government cutbacks and as the still very high costs of renewable power work their way into electricity tariffs some of the “green sheen” surrounding solar and wind power is becoming decidedly tarnished.

A new  study of the UK energy system has been published by the Oxford Institute for Energy Studies 

The Impact of Import Dependency and Wind Generation on UK Gas Demand and Security of Supply to 2025

By Howard Rogers

Summary: This paper by Howard Rogers challenges the assumption of UK government policy papers and projections that, as a result of substantial increases in renewable and other low carbon generation capacity, the role of gas in the will decline rapidly over the next decade and beyond. The study suggests that gas will retain a central and undiminished role in the UK power generation sector. Although its role in the power generation sector may change, gas is likely to be particularly important in respect of ensuring security of supply in the context of increasing intermittent wind generation. As a result, additional gas storage will be needed and, given current market conditions, immediate attention needs to be devoted to creating incentives to ensure this will be provided.

The Telegraph writes:

UK Windpower targets are ‘unfeasible’

Howard Rogers, senior research fellow at the Oxford Institute for Energy Studies, said in a study that Britain’s power network is not built for wind power accounting for more than a third of capacity on the system.

He said that any more than 28 gigawatts of wind would mean it is likely that turbine owners would regularly have to be paid to keep capacity off the system. Earlier this year, six wind farms were paid £900,000 to stop generating for one night, because the system became overloaded.

The study challenges the ambitious estimates in a study commissioned by the Government which estimates that 58 gigawatts of wind is likely to be built in a “medium activity” scenario by 2030, out of a total system of 80 gigawatts of capacity. …. Mr Rogers said this does not fully consider the ability of the grid to cope with the intermittency of wind, which often does not blow at all or can be too strong, causing overload.

“It would appear that the more ambitious targets for wind generation in the UK have been formulated without a full appreciation of the costs and complexities caused by the intermittency of very substantial levels of wind generation,” the report says. “The analysis concludes that the maximum feasible level of wind generating capacity is 28 gigawatts.

At higher levels than this, the country faces the prospect of short notice intervention to reduce turbine output with the added complication that forecasts of wind speed beyond six hours into the future are inherently uncertain.”

The Oxford Institute for Energy Studies is allied to three Oxford University colleges but also receives funding from “members” and sponsors, such as gas producers BP and BG Group and companies with huge investments in wind power, including Centrica and Dong Energy. Its gas research is also sponsored by National Grid.

Professor Jonathan Stern writes in the preface to the study: “It is no part of the remit of the Oxford Institute for Energy Studies gas research programme to promote natural gas, either in the UK or more generally. We are gas researchers not advocates or lobbyists. However, our research increasingly suggests that the likely future role of gas in energy balances has and continues to be underestimated.”


Wind stops wind power….. 

Bio-gas is out, shale gas is in and there is no “peak” gas in sight!

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