News roundup

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The 2nd longest suicide note in history

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The Republican national convention is currently kicking off and things aren’t off to a great start. The cops are calling for the state’s open carry law to be suspended (after recent police shootings they’ve come to realise that the solution to a bad guy with a gun is and making sure he’s not armed, and not hiding in a crowd of 100 other armed nutters). And with the cult of Trump in town and lots of angry anti-Trump protesters, trouble is all but guaranteed.

Many leading republicans are skipping the convention (and probably with all the guns are very glad to do so!) as they want to stay well away from the train wreck otherwise known as Trump. As a result the roster of speakers at the convention is a little thin, even Trump’s wife and daughter is having to speak, oh and the boss…

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Department of Energy & Climate Change axed

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I’ve been warning for quite sometime that a Brexit vote would be a disaster for the environment. By and large there is a strong correlation with voting leave and climate change denial and other anti-scientific beliefs. Of course others, such as Monbiot, say its not so bad (then again he said the same thing about Hinkley C).

Well we now have proof of just why we had every reason to be concerned. The new UK PM Theresa May has axed the entire department of energy & climate change. I mean we are talking Trump level of political vandalism here.

Oh, and this was straight after appointing Boris Johnson as foreign secretary, a gaffe prone liar (according to the French minster) who has managed to insult both Hilary and Trump as well as President Obama and many other world leaders. As the Swedish PM concluded, this is clearly some sort of joke that posh public school boys get but the rest of don’t.

Now we are assured that the aims of the former DECC will instead be split between the department for environment and rural affairs (DEFRA) and a newly enlarged department of Business Energy and Industrial Collapse Strategy. However, this ignores the entire reason why the DECC was created in the first place.

The idea was that climate change is such an important issue that you needed one body to push it up the agenda and set out a strategy for how we would tackle it, as well as handle complex negotiations with other international partners on the matter. Splitting up responsibilities vastly complicates matters and will ultimately slows down the pace of change. Quite apart from the problem of having to separate sets of civil servants implementing essentially two separate plans. Departments such as DEFRA or trade and industry often had a perverse incentive to ignore the issue or not take it seriously, given tackling climate change was often contradictory to some of their other objectives.

Now I will admit, there’s some aspects of how the DECC works I’ve not liked. They seem to be beholden to armchair Oxbridge professors and other pipe smokers in the Royal Society who don’t live in the real world (hence why many of them are rabidly pro-nuclear!) and often tend to ignore simple off the shelf solutions.

For example I once sat through a DECC presentation which preposterously proposed that 70% of the UK’s final energy consumption would be in the form of electricity by 2030. Keep in mind the current figure is closer to 20%, so they were proposing a 3.5 fold increase in electricity production in 2 and a bit decades (well actually more like 4 fold when you account for growth in energy consumption). Think about that, 3-4 times more power stations, transmission lines, etc. And we’re ignoring the fact that the main use of energy in the UK is winter heating (about 36%) and transportation (30%), both of which would involve cycle efficiency losses if powered via electricity. Plus the demand for heat is highly seasonal and would require either massive redundancy or storage to meet the winter peak.

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UK’s total final energy consumption broken down into the three critical pathways of heat, electricity and transportation fuels [Source: Sheffield University, 2015]

But all of that said, I’d rather have some sort of strategy than none. And the problem is that this announcement would be just plan bad by itself. But on top of it there’s the fact that in charge of the two departments replacing the DECC are Andrea “Fruitcake” Leadsom and Greg “Mr Fracking” Clark, both known to be pro-fracking. Andrea Loathsome Leadsom also happens to be a bit of a climate skeptic, as well as wanting to allow fox hunting and sell off the UK’s forests. I could say that this amounts to putting the fox in charge of the hen house, but they just shot all the foxes and the chickens too.

So it is now all but a certainty that the UK will miss its current climate change targets. And those targets were interim targets, i.e. nothing to do with the Paris climate change conference. Needless to say the changes of the UK meeting those targets is about the same probability that Boris could make it out of North Korea alive after his inevitable comments about the Kim Jung-un.

Which brings us back to Hinkley C. Now some will say, why is the UK building this thing? Well aside from all the vested interests as well as the Tories warped views on nuclear, it also now becomes the go to smoke screen behind which to hide inaction on climate change….while pressing full steam ahead with fracking. If anyone asks what the government’s doing about climate change, they mumble something about Hinkley C. Its a bit like someone being told by their doctor to lose weight. So they buy an exercise bike. But not only do they never use it, they don’t even bother to pick it up from the store. But if anyone asks, they can legitimately claim to have bought an exercise bike.

Of course arguably, the Tories have never really taken climate change seriously. Its just under Cameron they were a little better at pretending they actually gave a rats arse about it.

If the first day of the Tories post-Brexit Britain is anything to go by, we are in serious trouble. It will therefore probably be crucial that other nations bring diplomatic and economic pressure to bear on the Uk to bring them back in line. And obviously it serves as yet another argument in favour of Scottish independence. It was once put to me that you need a single energy plan for the whole Island. To which my reply is, not if one half of the Island doesn’t have a plan, other than handing control over to a pair of fox hunting, evangelical fracking fruitcake climate change denier.

Posted in clean energy, climate change, fossil fuels, Global warming denial, nuclear, politics, power, Shale Gas, Shale oil | Tagged , , | 3 Comments

The beast that will not die

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Figure 1: Is Hinkley C really Brexit proof?

Often a big news event is the time people try to bury bad news. Here’s a few you might have missed. However another story that some may have missed is that the DECC has raised its estimate for the cost of Hinkley C to be just short of £37 billion. This is more than double their previous estimate. Hinkley C is in fact now on course to become the most expensive object on earth.

It means that the installed kW cost of Hinkley C is now likely to exceed £11,000 per kW against £1,250 for solar. Yes Hinkley is now 9 times more expensive than a similar installed capacity of solar (and yes the capacity factor of solar is lower, but its not going to be 9 times lower!). Hinkley is now almost certainly going to be more expensive than the Severn Barrage, which was estimated would have cost between £10 – 34 billion….yet it would have provided a peak power output of 8-10 GW’s of electricity (i.e. Hinkley is between 8 to 2.5 times more expensive per installed kW). And the official reason for cancelling the Severn barrage was cost. And it is also more expensive than the three Gorges dam (which supplies about 20 GW’s!) and was generally seen as an example of the sort of wasteful government spending we often associate with communist regimes (yes the Chinese communist party is more careful with its money than the UK under the Tories!).

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Figure 2: Hinkley C is now more expensive than both the Three Gorges dam and Severn Barrage

In terms of LCOE, its not clear what those costs will now be. Suffice to say, a lot more than the agreed strike price of £92.5/MWh (in 2011 money). Recall EDF were originally looking for closer to £140/MWh and the ICEPT report (Harris et al 2012) estimated a figure closer to £164-174/MWh. Certainly any power from Hinkley is going to be much more expensive than any the other alternatives. Assuming a 2025 start up the estimated costs are £110/MWh for solar, onshore wind at £88/MWh and offshore wind at £100/MWh.

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Figure 3: LCoE costs for Hinkley C compared to German Renewables [Source: energytransition.de (2015)]

So clearly the government subsidy (beyond the strike price, which already represents a far more generous subsidy than offered to renewables) is going to have to go up (yes we are now paying a subsidy on top of a subsidy….which now also needs a further subsidy!). And the punch line is they are probably going to pinch the money for that from other renewable energy projects. At this rate they’ll probably be no money left for renewables. What’s the bet they start taxing wind farms (rather than fossil fuel plants) to fund Hinkley? Already the expectation is that the UK will now miss its renewable energy targets as a result of Brexit. I wonder what Monbiot, who originally backed Hinkley C, has to say for himself now?

Furthermore, as this latest cost estimate was released just after the Brexit vote, its not clear if they’ve fully accounted for the costs of Brexit in this latest estimate. The falling value of the pound is making everything more expensive, an important factor given how much of the hardware for Hinkley will have to be bought in from overseas. One could argue for delaying the project and re-issuing tenders (which could see some British firms get in on more of the action) but that would delay an already overly delaying project even more.

Such a large project, the like of which the UK has not seen since the channel tunnel (which was also largely a French led project), will mean bringing in expertise from overseas. So what do they plan on doing if the UK brings in all sorts of immigration restrictions and quotas? I’m guessing EDF could probably smuggle them over in the back of lorries (I’m doubtful any customs officer is going to feel the need to search a truck labelled “nuclear” to verify its contents). But jokes aside, this will delay the project and push up costs. So all in all, don’t be surprised if the cost of Hinkley rises again…..and again….and again! And as I mentioned in a prior post its only after the plant is build that the real fun and games will likely start (well if you define fun as sitting in the dark surrounded by candles eating cold canned food).

And speaking of power cuts there are warnings (yet again) that the UK could be vulnerable to power cuts this winter. Now yes, this is sort of an annual prediction. But it is based on the fact that the UK has a creeky, ageing and dilapidated energy infrastructure with a wafer thin margin of spare capacity. The UK is increasingly dependant on supplies of electricity from abroad, particular during winter. And most of that power comes the EU, whom the country gave a two fingered salute to the other month. And buying power off them just got a lot more expensive. And it becomes less likely that the 20 billion/year the UK needs to spend on new energy infrastructure will materialise. Already Siemens has pulled back from a flagship wind power manufacturing facility in the UK.

So Hinkley C is finished then, surely now it will be cancelled as a result of Brexit? .………………………….sorry I laughed so hard there I had to pick myself up off the floor. No, Hinkley C is not going to be cancelled. It is the beast that will not die. There’s too much political capital, too many vested interests riding on it. If EDF told Osborne that to finish Hinkley C they needed to sacrifice all of Britain’s first born babies to Beelzebub, without batting an eyelid, he’d pick up the phone and start making the arrangements.

Indeed the chances of Hinkley C being cancelled become less likely now due to Brexit. If such a large project, enjoying such an unprecedented level of political support, a project we were assured would go ahead, leave or remain, was to now be cancelled that would send out a very worrying message. Basically no other large infrastructure project could then be guaranteed not HS2, Heathrow expansion, that £20 billion/year in energy projects I mentioned earlier, all would be put under threat. It would be a Lehman Brothers moment for the post-Brexit UK economy, likely resulting in another round of market panic and capital flight.

So my guess is that they will proceed with this project regardless, until someone is elected to a position to stop it. And btw, the labour party is in favour of Hinkley, as are both the main parties in France. So while Hinkley is Brexit proof, it is for all of the wrong reasons. About the only thing I can suggest is putting the word “Hinkley” into the dictionary as being a term to describe an unstoppable train wreck of a project that proves to be so poisonous and soul destroying that it kills off the entire industry it was meant to save.

Posted in climate change, economics, nuclear, politics, power, renewables, subsidy, sustainability | Tagged , , , , , | 3 Comments

Austerity off – but not the pain

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Boris has suggested in a recent article that we should think of the positives of brexit. Well okay, for starters he’s not going to be PM, his two Bullingdon buddies Cameron & Osborne will also be joining him in the job’s centre soon enough, Farage has gone, oh and Osborne appears to have finally thrown his toys out of the pram and declared that the policy of austerity is over. Given the uncertain political waters the UK is now entering into both he and the likely new PM (Teresa May) have accepted that they cannot met the planned fiscal targets (of course we’ve known that for sometime) so he’s going to give up even trying to cut the deficit.

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Of course the reality is that the Tory policy of austerity was always smoke and mirrors. The reality is that the chancellor’s policy flies in the face of Keynesian economics

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The Consequences of Brexit

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I was away on holiday during the vote, I mean I go away for 3 weeks and you lot exit the EU, WTF! Oddly enough I was outside the EU in Norway, basking in land of milk and honey the leave camp promised us?…well actually no.

The Norwegians couldn’t understand why Britain left the EU. They have to pay to be a member of the EEA (one of them was moaning to me about its considerable costs) yet not gain any of the benefits of being an EU member. The main reason why Norway is not in the EU boils down to fisheries. Not because they fear EU regulations, actually they feel the EU doesn’t regulate fisheries enough.

But at least the Norwegians have control over their borders right? No! There are more migrants per capita in Norway than in the UK, about 25% more in fact and they…

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Trump’s Energy plan

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Figure 1: Trump isn’t exactly known as a fan of wind farms

Trump recently released his energy plan. As you can imagine it was slim on details but included the expected, bashing renewables, wanting to renegotiate the Paris deal and lifting numerous environmental restrictions on fossil fuel production, nuke the Whales, burn down the Amazon, usual. Needless to say the environmentalists are aghast at the prospect, as too are many other commentators on energy.

Putting aside the issues of the environment, his plan seems to be based on a simpleton vision of “green stuff bad” and “fossil fuels good”. However, not so, renewables, are creating far more jobs in the US than coal or the oil industry. Cutting off renewables at the knees will cost many American’s their jobs, not save jobs. The US renewables industry now employ’s over 750,000 people and is worth tens of billions of dollars.

Also the fundamental problem facing US coal producers, who are seeing their industry decline, is competition with natural gas producers. Yes, renewables, in particular wind energy are part of the reason they are getting hammered on price, but their main competitor is the natural gas industry. If Trump promotes more drilling, then those coal miners he was promising more work too will instead be all out of a job.

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Figure 2: The decline in coal is closely matched by a rise in Natural gas demand [EIA & Zerohedge.com, 2012]

Of course, the oil and gas industry is stuck in the doldrums not because of Obama, but because of low oil and gas prices worldwide. Making more oil and gas available will not improve their situation, it would in fact lower prices even further. And similarly making the US energy independent would not lower prices. So long as America is connected to free markets, it is connected to changes in the global supply of oil and gas. If prices go up in other parts of the world, they will go up in the US.

The only way he could please both fossil fuel lobbies would be by intervention in the energy market and artificially inflating energy prices (i.e. what Sarah Palin would call “central planning“). Of course that may not be terribly popular with voters paying more for energy, in particular higher prices at the pumps. President’s have lost elections over rising energy prices before. Oh, and while a lost of subsidies would hurt renewables, higher energy prices would actually make them more competitive.

Indeed he’s hinted in speeches that he might directly intervene in the industry, baring the sale of oil to this country or that (in which case he’d be hit with retaliatory sanctions), blocking certain projects he disagrees with, etc. Well the problem straight away with that is that while American fossil fuel production has increased recently its still short by some margin, about 24% short in the case of oil. So cutting the US off from international markets would straight away push up prices and lead to 70’s style queues outside petrol stations.

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Figure 3: US monthly motor oil demand, seasonal fluctuations [EIA 2012]

Also its worth remembering that oil supply/demand fluctuates, so even if the US was at 100%, there are times of the year (such as the summer driving season) when supply does not match demand and without imports from overseas, the price would skyrocket and there would be shortages. The opposite then happens during lean times.

But would such policies increase the rate of oil drilling? There’s a possibility the answer is no. Investors might well take fright at such direct action by the government. They would worry that while it benefits them now, it would be a step towards nationalisation of the energy industry longer term. After all, if the government pulls populist levers today, what about when energy prices rise in the future (back to where they were in 2007) and he’s under pressure from voters come the next election to bring down prices?

And what about the environment? He’s also talked about getting rid of the department of environmental…..until it was pointed out that there’s no such department (so the EPA might be safe because he can’t spell its name!). Also the only wall he’s building right now is a wall in Scotland to protect his precious golf course from future sea level rise, which he doesn’t believe will happen.

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Figure 4: Climate denier Trump wants a wall in Scotland to protect his golf course for sea level rise…don’t think the Mexicans will pay for it tho!

Well quite apart from the long term impact of climate change, there’s the issue of pollution. Trump seems to assume everyone but hippies is okay with the pollution caused by oil and gas drilling. However this is not true. If the federal government reneges on its responsibilities, that will throw the decision back to state legislators. However, many of them will oppose such plans, as they will be besieged by lots of angry voters looking to get such projects stopped. Keep in mind, not everyone in West Virginia supports the coal industry. There are many voters in large cities in the Marcellus shale region who worry about the impact on drinking water from shale gas drilling.

Grassroots environmental campaigns have derailed major energy projects before. Recall that in the wake of three mile Island almost every single US nuclear reactor project then under construction was halted, generally due to pressure put on state or county level politicians by concerned voters and grassroot movements. And some of those reactors were only a few screw turns from going online. So there’s every chance his policy could have some unintended consequences.

Trump’s energy plan is in short a recipe for chaos. Fundamentally, what it reveals is that he’s less an advocate of free markets and more of a national socialist. He seems to mix all the worse aspects of Hugo Chavez with North Korean Juche, crony capitalism and an almost cartoonist hatred of the natural world.

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REN 2016 Report: How renewables are going mainstream

Cartoon about windpower and economy

Figure 1: Renewables, no longer for hippies!

The latest Renewable energy global status report is out, which reveals that 147 GW’s of new renewable generating capacity was added last year. I haven’t had a chance to crunch the numbers, but that’s probably a enough capacity to generate a good 600 TWh/yr worth of energy generating capacity.

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Figure 2: Growth in renewables 2015 [Source: REN 2016 Report]

This includes 50 GW’s of new solar panels and 62 GW’s of wind turbines. Solar thermal has also continued to grow strongly, with 26 GW’s added. Biofuels production is now at a level of 120 billion litres of fuel produced a year, equivalent to roughly 2.5 million bbl/day of oil production (i.e. a fairly large oil field!).

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Figure 3: Average growth rates in different renewables last year and the 5 year average [Source: REN 2016 Report]

In short, what the report is saying is that long term trends that I pointed to in a prior post are not some one off fluke. If anything the rate of renewable’s roll out is accelerating. Overall more renewables capacity was added this year than fossil fuel capacity. So overall we are starting to turn the corner, the ship is starting to respond to the helm, the question is did we turn the wheel hard a starboard too late.

Indeed its the other trends in this report that are really of interest. Firstly, renewables is no longer the business of hippies (not that this was ever true anyway!). Its a $286 billion industry that employ’s over 8 million people worldwide. The solar power industry alone employ’s 2.7m people, with a further million employed in solar thermal.

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Figure 4: Renewable energy Jobs and employment worldwide [Source: IRENA 2016]

Also developing countries are becoming the major purchaser and producers of renewables. This is both good news and bad news. It suggests that developing nations are taking climate change seriously and are trying as hard as they can to avoid copying our wasteful polluting habits. It means that many people in developing countries who have previously been denied access to electricity by economic circumstances are now gaining the benefits.

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Figure 5: Renewables are changing the energy landscape in Africa [Source: IRENA 2016]

However the downside is that all of the jobs will flow to these countries longer term and countries with anti-renewable governments in charge (such as the UK) could be about to miss out on the biggest industrial change in our planet’s history. This will probably lead to longer term entrenchment (i.e. we oppose renewables because it means more jobs to China…even though the US led the world in renewables production before Bush came to power).

And nuclear? Well the latest IEA report say’s its generating about 2,478 TWh/yr of electricity, but still stuck in the doldrums with little sign of anything that could be called “growth”. In the last 4 years the renewables industry has added a similar scale of generating capacity (measured in TWh/yr so this accounts for the intermittent nature of certain renewable systems), as the nuclear industry has added over the last 50 years. So next time someone one tells you nuclear is essential and that we should prioritise it over renewables, tell him to go away read some statistics.

However, all is of course not rosy in the garden. There is of course the fact that cuts in tariffs means that while renewables is still growing in European countries, the rate of installation is slowing. I also worry that a lack of joined up thinking (e.g. a failure to plan in energy storage projects, develop renewable heat and transport) might cause things to stall further down the line.

Indeed, the head of Vitol, a major energy trading company recently commented that yes renewables are now a serious business, which nobody in the real world of energy would want to ignore, but there’s still limitations as to what we can achieve with renewables at a time of low oil prices. He commented:

But we see the power sector moving to gas and renewables, the growth in electric cars. Yes, they are likely to come in but will they make sufficient dents in our business so that it is no longer viable? I think, hopefully not.”

But in some ways I am very encouraged we are seeing renewables and electric cars because it reduces the likelihood of a nasty spike in the price of oil, which is incredibly damaging to developing countries.”

In short, what he’s saying is that renewables are now mainstream and only a fool (speaking of Trump!) would ignore that but some level of support is still needed. I would argue that subsidies are probably not the best idea, but some sort of a carbon tax. Also he’s saying that renewables are now a means of insulating us from any interruptions to oil production (e.g. war in the middle east, ensuring a soft landing from peak oil) and helping to keep prices down. But of course lower oil prices makes renewables less competitive.

So we are getting there, but we ain’t out of the woods yet.

Posted in clean energy, economics, efficiency, energy, fossil fuels, nuclear, politics, power, renewables, subsidy, sustainability, sustainable, technology | 2 Comments