Tuesday, September 25, 2012

From the Climate Policy Network

Coal Era Beckons For Europe As Carbon Giveaway Finishes

Unintended Consequences of the Anti-Shale Campaign

European utilities are poised to add more coal-fired power capacity than natural gas in the next four years, boosting emissions just as the era of free carbon permits ends. “The economics for coal are near the best we’ve seen in five years,” Laurent Segalen, a director at ECMF, said yesterday in an interview from London. Buying UN credits for 2013, after they plunged almost 80 percent in the past year, is “an amazing bargain,” he said. Utilities will add as much as 10,600 megawatts of new coal plants in seven central European countries in the next four years, compared with 1,600 megawatts of new natural-gas capacity, Patrick Hummel, a UBS analyst in Zurich, said in the report. –-Matthew Carr, Bloomberg, 21 September 2012

Germany’s largest utilities are shunning cleaner-burning natural gas because it’s more costly, while the collapsing cost of carbon permits means there’s little penalty for burning coal. Germany’s increasing coal consumption is part of a global return to the fossil fuel that’s cheaper than most alternatives. The amount of coal burned worldwide rose 5.4 percent to account for 30 percent of total energy use last year, the highest proportion since 1969, according to BP data.—
Bloomberg 20 August 2012

The entire carbon emission decline in the US in 2012 comes from falling carbon emissions from coal and oil and disproportionately from coal. From January to May 2012, coal emissions fell 132 million tons or from 756 million tons in the same 2011 period to 624 million tons. That is an 18% decline and almost entirely as a result of more gas displacing coal generation this year. Indeed, coal’s electricity generation market share fell from 42% for all of 2011 to 32% in April and 34% in May. Since gas is displacing more coal and oil than anything else, natural gas is cutting carbon emissions in the US more than anything else. That is a fact! --
John Hanger, 17 September 2012

As gas is displacing coal for electricity generation in the US, the shale revolution has led to a dramatic reduction in CO2 emissions – down to 1992 levels. According to government officials, the main reason is that cheap and abundant shale gas has led power plant operators to switch from coal to natural gas. In order to replicate the US energy revolution, Europe would need to exit coal and switch to natural gas. Yet the green lobby's shale gas blockade together with its opposition to nuclear energy is causing the exact opposite: it has led to a renaissance of coal. Indeed, CO2 emissions in the EU as a whole are likely to rise 43 million metric tons this year because of increased coal burning at power stations, according to Barclays analysts. --Benny Peiser, 
Public Service Europe, 29 August 2012

Germany is being horribly caught out by precisely the same delusion about renewable energy that our own politicians have fallen for. Like all enthusiasts for “free, clean, renewable electricity”, they overlook the fatal implications of the fact that wind speeds and sunlight constantly vary. In fact, a mighty battle is now developing in Germany between green fantasists and practical realists. Because renewable energy must by law have priority in supplying the grid, the owners of conventional power stations, finding they have to run plants unprofitably, are so angry that they are threatening to close many of them down. The government response, astonishingly, has been to propose a new law forcing them to continue running their plants at a loss. --Christopher Booker, The Sunday Telegraph, 23 September 2012

 Wind energy equipment manufacturer Siemens Energy Inc. will lay off 615 workers in Iowa, Kansas, and Florida in part because Congress has not renewed a tax credit for wind energy, the company said Tuesday. The company blamed difficult market conditions due to lack of congressional action on a wind energy tax credit as well as increased use of natural gas-fired power plants. -–
Associated Press, 18 September 2012

 At its peak in 2008 and 2009, the industry employed about 85,000 people, according to the American Wind Energy Association, the industry’s principal trade group. About 10,000 of those jobs have disappeared since. And now the industry is facing a big political problem in Washington: the Dec. 31 expiration of a federal tax credit that makes wind power more competitive with other sources of electricity. But without the tax credit in place, the wind business “falls off a cliff,” said Ryan Wiser. --Diane Cardwell,
The New York Times, 21 September 2012

Greens have an odd knack for developing useless and expensive government policies. Ethanol, ballyhooed as a way to reduce greenhouse gasses, raises food prices for the poor and, in the U.S., actually increases greenhouse gas emissions at great cost. Costly programs to create “green jobs” seem to produce more scandals than jobs. And now we have a subsidy program for electric cars that costs money but otherwise gets nothing done. --Walter Russell Mead,
The American Interest, 22 September 2012

European Union plans to cap the use of food-based biofuels are a major setback for an industry once seen playing a central role in the fight against climate change, but now more often cast as the villain following a series of global food price spikes. Industry sources and analysts predict the plan could trigger a wave of plant closures across Europe. --
Reuters, 22 September 2012

Here’s an interesting bad news/good news story about a deal between two companies that have consistently played Dumb and Dumberer on shale gas, Gazprom and Centrica. The bad news is that when these two crooks work together, consumers generally pay the price. The good news is that it could be a lower price. --Nick Grealy,
No Hot Air, 21 September 2012
The Secretary of State for Energy and Climate Change, Ed Davey, has written an article in which he claims that “there are five myths that need to be knocked down” (DECC website). Davey has selected these “myths”, and ignored other criticisms of the Draft Bill in this article. Unfortunately, he has chosen to set these “myths” up as straw men, and then raised his objections. The result is anything but convincing. --Dieter Helm, University of Oxford, 20 September 2012


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