How to lose half a trillion euros/ Electricity Costs raise alarms across Europe

"Renewable energy has grabbed a growing share of the market, pushed wholesale prices down and succeeded in its goal of driving down the price of new technologies. But the subsidy cost also has been large, the environmental gains non-existent so far and the damage done to today’s utilities much greater than expected."  -the Economist

Reports of discontent with European electricity policies from both the perspective of consumers saddled with ever-increasing bills for no more consumption, and utilities whose profitability has declined, along with their share value.
Higher Electricity Costs Raise Alarm Across Europe | IEEE Spectrum

Image from IEEE Spectrum page

British government predictions of sharply increased electricity prices in the next decades are getting renewed attention these days, as the country's opposition leader Ed MIlliband promised to freeze rates if elected prime minister. A March report from the Department of Energy and Climate Change found that with current policies subsidizing green power, electricity costs will rise 33 percent by 2020 and 41 percent by 2030.
In Germany, according to reports issued this month by IHS Inc. in Denver, Colo., green energy developers received $19 billion in subsidies last year, six times the comparable figure for the UK. Germany has pushed low-carbon and renewable energy technology harder than any other European country, with impressive results: Last year it produced 22 percent of its energy from "green" sources, five times as much as twenty years before. But the costs of those green advances have proven to be unsustainably high, from a political point of view.

Without Nuclear Power, Japan CO2 Emissions Rise

Without Nuclear Power, Japan CO2 Emissions Rise - Japan Real Time - WSJ:

Japan’s greenhouse-gas emissions climbed to their second-highest level on record in the last fiscal year, mainly because the country used more fossil fuels to make up for the loss of power produced by nuclear plants, all of which are now offline."
Japan produced the equivalent of 1.207 billion metric tons of carbon dioxide in the year ended March 2013, the Ministry of Economy, Trade and Industry said Wednesday. That was up 2.8% from the previous year, 7.4% higher than the year right before the Fukushima nuclear accident, and 14% more than fiscal 1990-1991, the benchmark year for the Kyoto Protocol, which calls for cuts in CO2 emissions.

Related:

German Renewables Surcharge Increases by 19%

Germany's "renewables surcharge" will go up almost 20% for 2014, despite the combined output from wind and solar generators reportedly being lower over the first 9 months of the year.

German Renewables Surcharge Increases by 19% to 6.24 ct/kWh in 2014 | German Energy Blog:

The renewables surcharge will amount to 6.24 ct/kWh in 2014. This is an increase of 19.38% from the 5.227 ct/kWh in 2013.
With the renewables surcharge pursuant to the Renewable Energy Sources Act (EEG), the so-called EEG surcharge, consumers pay for the difference between the fixed feed-in tariffs paid pursuant to EEG for renewable energy fed into the grids and the sale of the renewable energy at the EEX energy exchange by the TSOs. According to data by the TSOs renewable energy renewable energy fetched on average 32.99 EUR/MWh in September.

Continue reading at the German Energy Blog

Wind is down, but solar is up - partly explaining the rise.  Elsewhere some of the blame for the latest increase is being placed on the growing number of electricity consumers exempt from paying the surcharge, and the simple fact that wholesale market pricing is down (much of the EEG being the difference between contracted rates with suppliers and the sale price on the market)

Central's Radwanski reports Ontario scrapping new build plans for nuclear

Queens' Park Columnist Adam Radwanski has moved from the obscure inside articles to the front page of the Globe and Mail with a story on the Liberal government abandoning plans for new nuclear.

Ontario backs away from plans to buy new nuclear reactors | The Globe and Mail

Ontario’s government will shelve plans for a major new investment in nuclear power, according to industry and government sources.
Kathleen Wynne’s Liberals have decided against spending upwards of $10-billion to buy two new nuclear reactors as had been planned when Dalton McGuinty was premier, and will commit only to refurbishing existing ones, the sources told The Globe and Mail.

Meanwhile, over at the Toronto Star, John Spears (I'll suggest the only professional energy reporter in Ontario's mainstream media - despite my frequent criticisms of his articles) looks more than a step behind with, Nuclear industry faces "critical decade": OPG chief | The Toronto Star:

The Case for Combating Climate Change with Nuclear Power and Fracking

I should not have put off reading this because of the title (connecting nuclear power and fracking); it's a very interesting article

The Case for Combating Climate Change with Nuclear Power and Fracking — HBS Working Knowledge:

"...each energy source—oil, natural gas, wind, nuclear, solar, etc.—should have a market price based not only on its production costs, but also, in part, on its unique public costs reflected by revenue-neutral taxes: a carbon emissions tax, a security-of-supply tax, a catastrophe insurance tax, and even a local emissions abatement tax," he says. "While people hate the thought of paying more taxes, we are in truth paying most of these 'taxes' today. Unfortunately, the political process allows these taxes—or subsidies—to be hidden in rules, regulations, and foreign policy decisions."
...Lassiter is concerned that the massive carbon emissions from today's coal plants and transportation sector pose a major danger to mankind through the effects of rapid climate change. Less typically, he's more bullish on nuclear power and hydraulic fracturing, or "fracking," than he is on solar energy or wind power for addressing the worldwide carbon emissions problem. It's not that he has anything against renewable energy. It's that he hasn't seen evidence that renewable energy sources will get cheap enough, fast enough to slow global carbon emissions, particularly those from coal-fired power plants in China and India.
"The Chinese and Indians are going to clean up their local pollution problem—particulates and sulfur emissions—from coal plants, but the carbon emissions are an entirely different matter. To have a dramatic impact on those carbon emissions, you need to find something that beats a traditional coal plant in their countries on straightforward energy economics, and that's really, really hard to do," he says.

Continue Reading at Harvard Business School

Regressive Energy policies

Parker Gallant recently asked, "Has our electricity system turned into nothing more than a form of wealth transfer or, perhaps, a regressive tax?"

Ontario isn't the only jurisdiction where the wisdom of programs that transfer wealth from the poorer to the wealthier are being questioned

CA rooftop solar will cost other customers $1 billion per year | CalWatchdog.com

Wealthy rooftop solar homeowners will shift $1.1 billion per year in extra costs onto other electric ratepayers by the year 2020, according to a new study just released by the California Public Utilities Commission...
Net-metered electric customers had 78 percent higher median income than the median California household income.
The CPUC study, “California Net Energy Metering (NEM) Draft Cost Effectiveness Evaluation,” was released Sept. 26.   Net metering is where excess electricity from rooftop solar panels result in rolling a customer’s electric meter backwards. In this case, “net” means what remains after deductions. In a net metering system, property owners received a credit on their electric bill for all the electricity they generate. If they produce more electricity than they consume, they get a credit for excess production.
The CPUC study reports about two-thirds of the transfer of costs onto other customers comes from residential solar customers

The referenced study also notes that residential solar customers in California were, prior to solar panels on Net Energy Metering (NEM) plans, much larger than average users of electricity - California's utilities feature steeply tiered rates by consumption levels

Luftmess: checking up on air and carbon pollution

I was recently informed that the government of Ontario is now claiming in quasi-legal tribunals that industrial wind turbines (IWTs) are necessary for clean air.
I went looking for reports I'd read of declining air quality in Germany, Ontario's model for it's ill-fated feed-in tariff program attached to the equally questionable Green Energy Act.

One of the things that popped out at me during the seach was the German word "luftmess", which Google translates as "air measured"; I've taken that as a sign to comment further (being both a Luft and a ....).

A couple of themes deserve comment.
The first is the idea of economic choice (opportunity costs, etc).  At it's simplest, there might be a choice between constructing IWT's to displace pollution from coal plants and cleaning up the smokestack of the coal plants.  As wind produces little much of the time (in Ontario 80% of all IWT generation occurs in ~50% of all hours), it's unlikely to reduce traditional pollutants as much as installing selective catalytic reduction (SCR) and scrubber devices at the coal plants.

German air pollution rises despite green zones | DW (Germany)

Integration success leads to easy curtailment

An industry magazine puts a negative spin on a lot of positive developments in Spain as its newer government moves to control spiralling electricity costs that had been largely hidden in a tariff deficit.

Integration success leads to easy curtailment | Windpower Monthly:

... the control centre gives wind production more room for manoeuvre. Previously, the grid operator could order wind farms to stay offline hours ahead of its electricity schedule. During low demand periods, allowing all predicted wind power online could sometimes push flexible rapid-response gas offline, which would present a supply threat if wind finally fell short of expectations, as gas would be unable to bridge the gap. With the control centre, REE can now allow much larger amounts of wind to operate closer to the critical moment, temporarily reducing production if necessary rather than shutting down entire plants.
Being singled out for easy curtailment is only half of AEE's gripe. The other is that Spain - unlike Denmark and Germany — does not compensate generators for curtailed wind, despite wind having to pay for backup power from other technologies that enable nuclear, CHP, hydro and rapid-response gas to stay online. Cena says AEE is happy to help out the system, providing responsibilities and remuneration are spread evenly.
AEE admits that it is, of course, the centralised control that has enabled wind capacity and penetration to snowball over the years, a growth that is demanded by the EU's binding renewables objectives to 2020, by which date Spain is committed to reaching at least 35GW.

Continue reading at Windpower Monthly

Exporting LNG/Extolling Carbon Taxes

These two stories are connected as both are likely to increase the price of natural gas in North America.

Exporting should, I think properly, move North American prices up towards global commodity prices for natural gas.  I quote the Sierra Club's advocacy of cheap local supply of carbon (bizarre), as well as Dow's ignoble advocacy of protectionism for their supply so they can freely export their product.

Of course just taxing carbon is another way to move up price; one that's about as likely to be globally implemented as ...

U.S. Gears Up to Be a Prime Gas Exporter - NYTimes.com:

Cove Point, Maryland — Deep in a narrow underwater tunnel, workers wearing hard hats pedal bicycles towards a terminal, an island of gray pipes and pilings a mile off the Western Shore of Maryland on the Chesapeake Bay. When it originally opened in 1978, the chilly passageway was intended to bring liquefied natural gas from large tankers onshore to the Dominion Cove Point facility, where it was warmed, turned back into gas and sent on to customers.
But Cove Point has had a sporadic history and has not been visited by a tanker for delivery since 2011 thanks to reduced U.S. demand for natural gas. 

Now, Dominion Transmission wants to reverse the flow...

Capacity, Smart Grids, and DSM

A couple of articles, on securing appropriate generating capacity to meet demand at all times, caught my attention - in part due to some past comments I've encountered connecting capacity to demand management, and therefore the infrastructure and technical tools required to increase conservation and demand management (CDM) capabilities.

Federal Court Blocks Maryland Order to Build New CCPP | POWER Magazine

A federal court on Monday shot down Maryland’s drive to spur construction of a new combined cycle power plant outside of PJM’s capacity auctions.
Ruling in favor of various entities that had sued to block the plan, the U.S. District Court for the District of Maryland found that the state’s order last year for three Maryland utilities to enter into power purchase agreements with Commercial Power Ventures (CPV), which has been seeking to build a 661-MW plant near Washington, D.C., impermissibly invaded the Federal Energy Regulatory Commission’s (FERC’s) authority over wholesale power prices.
The case grew out of Maryland’s concern with meeting its future power needs, and with PJM’s ability to incentivize construction of new capacity within the state. Last April, after several years of study and hearings, the Public Service Commission (PSC) of Maryland ordered Baltimore Gas and Electric, Potomac Electric Power, and Delmarva Power & Light to execute contracts with CPV that would provide a guaranteed revenue stream to support construction of the plant.
The state has argued for several years that PJM’s Reliability Pricing Model (RPM) has failed to attract sufficient new generation capacity to Maryland and, as a result, the state is at risk of running short of power over the next few years. (continue reading)

 I'm a fan of PJM, so from my perspective this is a jurisdiction not trusting markets to provide capacity (which is, I think, an issue in Ontario regarding summer demand requirements).

Meanwhile, in the tight supply, "energy-only" market of Texas, talk of a capacity market will not go away