Green Energy Policies raise the Cost of Heating this Winter in the UK

Posted by PITHOCRATES - October 19th, 2013

Week in Review

You can either fight ‘manmade’ global warming or you can have low energy prices.  But you can’t have both (see British Gas to raise prices by 9.2% posted 10/17/2013 on BBC News Business).

British Gas is to increase prices for domestic customers, with a dual-fuel bill going up by 9.2% from 23 November.

The increase, which will affect nearly eight million households in the UK, includes an 8.4% rise in gas prices and a 10.4% increase in electricity prices.

The company said it “understands the frustration” of prices rising faster than incomes. The average annual household bill will go up by £123 [$198.89]…

The company said that the cost of buying energy on the global markets, delivering gas and electricity to customers’ homes, and the government’s “green” levies, were all factors in the decision to put up prices.

With a focus on renewables we bring fewer fossil fuels to market.  Coal, oil and natural gas.  And with the war against clean nuclear power we’re shutting down our reactors.  So instead we focus on the more costly wind and solar power.  Because it takes a lot more costly infrastructure to capture the ‘free’ energy from the sun and the wind.  So much that the taxpayer has to subsidize them.  To bring us that ‘free’ energy.  When the sun is shining and the wind is blowing, that is.  Which brings us to that costly distribution system.

People can put solar arrays on their home to use that ‘free’ solar power during sunny days.  But what about cloudy days?  And night?  Wind farms can generate ‘free’ wind power when the winds are blowing right.  But what about when they are not blowing right?  Either too fast?  Too slow?  Or not at all?  What then?  Fossil fuels.  That’s what.

Baseload power (typically coal that takes hours to bring on line) is a funny thing.  To be cost effective power plants run at full capacity 24/7.  When demand rises they can bring on some ‘peaker’ units (typically gas that are quick to bring on line) to add additional capacity.  So power companies have to maintain baseload power even if the people aren’t buying any to be available when solar and wind aren’t.  And if all the homes disconnected from the grid and ran on solar power during the day the power companies would still have to keep them physically connected to the grid.  So these homes can use their power at night.

This is why energy prices are rising.  Revenue at power companies are falling due to that ‘free’ wind and solar power while their expenses are not.  And because they are selling to fewer customers they have to charge them more to cover their expenses.

Affordable energy for the people lies with fossil fuels.  Not renewables.  Governments have to choose.  All the people.  Or their liberal base.  Less costly power from fossil fuels.  Or more costly power from renewables.  It’s that easy.  For you can fight ‘manmade’ global warming or you can have low energy prices.  You just can’t have both.

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Spain’s Massive Investment in Solar Power has Greatly increased the Cost of their Electric Power

Posted by PITHOCRATES - August 24th, 2013

Week in Review

People think renewable energy is the answer to all our energy problems.  But that isn’t quite so.  In fact, all it does is increase the cost of our electric power.  For sunshine and wind may be free.  But the equipment to harness the energy in sunshine and wind is not free.  It is very, very expensive.  And you need a lot of it.  You will not see one wind turbine service the power needs of one metropolitan area.  You may see a wind farm providing a small percentage of the electric power needs of a large metropolitan area.  And only when the wind blows.

Wind can blow day or night.  But it can also NOT blow day and night.  While solar panels will not work at all at night.  So you have massive investments to install renewable energy generation capacity.  And there will be times when they will provide no power.  So what do you do?  What do you do when the wind doesn’t blow and the sun doesn’t shine?  You turn to old reliable.  The electric grid.

This is why renewable energy is so costly.  It cannot replace our fossil-fuel power plants that can provide reliable power day or night in any type of weather.  It can only supplement what we call our baseload power.  Like our beloved coal-fired power plants.  One of the most cost-efficient ways to produce reliable electric power.  Which the power companies have to still run and maintain day and night.  For those who don’t have a wind turbine or a solar array providing their electric power.  And to light up the night.  So instead of one cost-efficient power generation system we have two systems.  One cost-efficient and one cost-inefficient.  And those who invested heavily into renewable energy are now having to deal with these very real problems (see Out Of Ideas And In Debt, Spain Sets Sights On Taxing The Sun by Kelly Phillips Erb posted 8/19/2013 on Forbes).

With so much sunshine at its disposal, Spain has aggressively pursued the development of solar energy: over the past ten years, the government has made significant advances in pressing solar energy and is one of the top countries in the world with respect to installed photovoltaic (PV) solar energy capacity.

It might, however, be too much of a good thing. Spain is generating so much solar power, according to its government, that production capacity exceeds demand by more than 60%. That imbalance has created a problem for the government which now finds itself in debt to producers. And not by a little bit. The debt is said to have grown to nearly 26 billion euros ($34.73 billion U.S.).

So how do you get out of that kind of debt? You propose incredibly onerous taxes and fines, of course. And you do it on exactly the behavior that you encouraged in the first place: the use of solar energy panels. That’s right. Spain is now attempting to scale back the use of solar panels – the use of which they have encouraged and subsidized over the last decade – by imposing a tax on those who use the panels…

…many residents in Spain generate enough electricity from solar that they get paid to selling the excess energy back to producers. This, it turns out, is a problem. The government is putting a stop to that, too: as part of the reform efforts (read: desperate measures), there will be a prohibition on selling extra energy.

If the power companies are providing all the power at night they have to maintain their power plants.  And their power distribution system.  Which means they even have to trim the trees away from their overhead power lines from people who use solar power during the day.  Nothing changes for the power companies.  Except that they can’t sell as much power as they once did.  So their costs of producing power remain the same.  But their revenue has fallen.  Forcing them to operate at a loss.  Or find other ways to replace their lost revenue.  Which they have to.  Because they must have the same capacity available during the day that they have at night.  Even if they aren’t selling as much power during the day as they are at night.  And the last thing they want to do is buy excess power back from homeowners with solar panels on their house when they’re producing their own power that they can’t sell.

Baseload power plants like coal and nuclear take time to bring on line.  They have to produce the heat that boils water into steam.  Then superheat the steam to remove all water from it.  So the steam can spin the generator turbines without damaging the vanes on the turbine.  And once they start these plants up they run these systems at full capacity where they produce power most cost-efficiently.  During peak demand they may bring on some gas-fired turbines that can start and produce power quickly.  And add them to the grid.  When the peak subsides they can shut down these gas-fired turbines and let the baseload generation carry the remaining load.

The Spanish government invested heavily into solar power for whatever reason.  It’s ‘free’ power.  It’s ‘clean’ power.  Or it was just a good way to create a lot of jobs.  But what Spain has now is a surplus of peak power generation during the day that doesn’t eliminate the need to maintain baseload power generation during the day.  Creating a surplus of electric power during the day no one wants.  While requiring power companies to maintain their baseload power during the day so they can provide power at night.  Incurring great costs on the power companies.  Which must be passed on to the same people who paid for the renewable energies subsidies.  The electric power consumer.

This is a classic example of a Hayekian malinvestment.  Friedrich Hayek of the Austrian school of economics said this is what happens when governments interfere with free markets.  They make investments to produce what they think is best while the market demands something else.  The market demanded low-cost electric power.  Which baseload power plants (coal and nuclear) provided.  But the government intervened and subsidized the more costly solar power.  This bad investment—or malinvestment—has only increased the cost of electric power for the Spanish consumer.  And now the Spanish have a big problem on their hands.  What to do with this surplus of peak power no one wants to pay for?  And how to replace the lost revenue of the power companies so they can cover their costs?  Two problems they didn’t have until the government intervened into the free market.

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Australia turns away from Nuclear Power because of Fukushima and Irrational Fear and Scaremongering

Posted by PITHOCRATES - November 11th, 2012

Week in Review

In the war to save the world from global warming one of the first campaigns was the battle against coal.  The backbone of baseload power.  One of the most reliable means to generate electric power.  Fed by a large domestic supply of coal.  You could always count on power being there in your homes with our coal-fired power plants feeding the electric grid.  But coal had to go.  Because they were melting the Arctic ice cap.  And raising ocean levels.  Not quite like they did during the Ice Ages when glaciers covered most of the Northern Hemisphere.  Until global warming pushed them back a couple of thousand miles or so.  At a time when only Mother Nature released the carbon boogeyman into the atmosphere.  But we ignore this historical climate record.  And only pay attention to temperature changes that suit the global warming agenda.  Because the real goal of the war to save the world from global warming is to expand government control into the private sector economy.

Australia wants to show the world that they take global warming serious.  They enacted a carbon tax.  To help fund their investment into renewable energy sources.  Which has increased the cost of electric power.  And if the carbon tax and higher utility prices weren’t enough they also are talking about raising their GST.  Of course the GST has nothing to do with climate change.  But it just goes to show that Australia is trying hard to raise tax revenue.  Which is perhaps the driving force behind their carbon tax.  Revenue.  On top of this there is a growing opposition to the only source of power generation that can duplicate what coal-fired power plants can do but without the pollution (see Meltdown fears crush case for nuclear power – Brisbane Times posted 11/11/2012 on Canberra Hub).

THE Fukushima nuclear accident has quashed consideration of nuclear power in Australia, with the government’s energy white paper arguing there is no compelling economic case for it and insufficient community acceptance…

Resources Minister Martin Ferguson has said it should remain ”a live debate”. Foreign Minister Bob Carr said before he re-entered politics: ”I support nuclear power because I take global warming so very seriously … [it] should certainly play a role in Australia’s future mix of energy sources.”

Deputy Liberal leader Julie Bishop has said it should be considered ”in the mix” and Senator Barnaby Joyce has said: ”If we are fair dinkum [i.e., truthful] about reducing carbon emissions … then uranium is where it’s going to be…”

Labor argues nuclear power is not economically necessary in Australia, since the carbon tax and the renewable energy target are already shifting power generation to renewables.

There are some fundamental truths about power generation.  Coal, natural gas, and petroleum provide reliable and abundant electric power while being safe but they pollute.  Nuclear power provides reliable electric power without any pollution but can be dangerous.  Though for the half century or so we’ve been using nuclear power the number of accidents that have claimed human lives is statistically insignificant.

There have been about 68 people killed in nuclear power accidents   If you count the future cancer deaths from the  Chernobyl accident you can raise that to about 4,000.  Fukushima in Japan claimed no lives other than one apparent heart attack someone had carrying heavy things in the aftermath of the accident.  It was nowhere near as bad as Chernobyl.  But if it, too, claimed 4,000 lives in future cancer deaths that brings the total death toll from nuclear power to approximately 8,000 deaths for the half century or so we’ve been using it.  Sounds like a lot.  But you know what nuclear power is safer than?  Driving your car.  In 2010 the number of motor vehicle deaths was just over 32,000.  Again, that’s for one year.  Making nuclear power far safer than getting into your car.

The opposition to nuclear power is based on fear.  And politics.  Not the facts.  Yes, nuclear power accidents are scary.  But there are very few nuclear power accidents.  For a statistically insignificant risk of a nuclear catastrophe we’re giving up the only baseload power source than can do what coal can do.  Give us abundant and reliable electric power.  But without the pollution.  However, they oppose nuclear power.  Not because of facts but because of irrational fear and scaremongering.  And if we know they’re doing this for nuclear power can we not conclude that they’re doing the same thing in the war to save the world from global warming?  Especially considering how many thousands of miles glaciers moved long before man released any carbon into the atmosphere?  Yes.  We can believe they base their war to save the world from global warming on nothing but irrational fear and scaremongering.

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India turns to Renewable Energy and Abandons Coal, causing one of the World’s Worst Power Outages

Posted by PITHOCRATES - August 5th, 2012

Week in Review

India suffered a massive power outage that left some 600 million Indians without power.  Stranding train travelers.  And trapping miners underground.  Not to mention leaving people to swelter in 100+ degree Fahrenheit temperatures.  In one of the most humid climates to ever grace our planet.  Some buildings had backup generators.  Including hospitals.  But these were few.   Most just suffered.  One wonders how this can happen in one of the biggest emerging economies.  India is, after all, one of the BRICS.  And being that the modern economy runs on energy it leaves one scratching their head.  If India has such a burgeoning economy where is their electricity production (see India: More than 600 million without power in biggest blackout ever by Rick Westhead posted 7/31/2012 on the Toronto Star)?

 While India has been aggressively trying to encourage investment in renewable energy sources such as solar and wind power, critics say it rarely upgrades its electrical grid. India has missed every annual target to add electricity production capacity since 1951, Bloomberg reported.

Oh.  They’ve been pouring millions into renewable energy to save the planet while they in essence have left their country plugged into the lamp post on the corner.  Here’s an interesting fact.  India just recently switched on the world’s largest solar photovoltaic power plant.  They are also a leader in wind power.  So they are working hard to remove their carbon footprint.  While their economy, and their people, starve for reliable electric power.  Let’s go to Bloomberg for more details (see Ambani, Tata ‘Islands’ Shrug Off Grid Collapse: Corporate India by Rajesh Kumar Singh and Rakteem Katakey posted 8/3/2012 on Bloomberg).

About 1.6 trillion rupees ($29 billion) spent by companies including Tata Motors and billionaire Mukesh Ambani-led Reliance Industries Ltd. (RIL), to quarantine their plants from the national grid is shielding India’s biggest users of electricity from disruptions. Sixty years of missed investment targets, transmission losses and theft is prompting factories to build their own plants boosting costs in a nation that suffers from the fastest pace of inflation among BRIC nations…

Five of India’s biggest electricity users generate 96 percent of their requirement, according to their annual reports.

India’s electric power is so unreliable that large consumers of electricity have to produce their own.  We call it captive power.    They generate it.  They keep it.  Which is only fair as they paid a fortune to generate it.  Which, of course, they pass on to their customers.  Via higher prices.  Which just adds to the inflation.

India has missed every capacity addition target since 1951, underscoring the urgency behind Singh’s effort to boost investment in power. As much as $300 billion, or 30 percent of the total spend planned on infrastructure, over the next five years is on the electricity sector, according to Planning Commission Member B.K. Chaturvedi.

The network in Asia’s third-largest economy loses 27 percent of the power it carries through dissipation from wires and theft, while peak supply falls short of demand by an average of 9 percent, according to India’s Central Electricity Authority. Some 300 million people in India, or one in every four, remain without links to the grid and the number will still be about 150 million by 2030, according to the Paris-based International Energy Agency.

The blackout engulfed as many as 19 of the South Asian country’s 28 states on July 31, with more than 100 intercity trains stranded on the second day…

They have been failing to meet demand since 1951?  Wow.  What a horrible track record.  Yet they can build the world’s largest solar photovoltaic power plant.  Even though their electric grid can’t transmit the insufficient power that they can produce.  And what’s astonishing is one in every four people doesn’t even have electricity.  This in one of the strongest emerging economies.  A country that is capable of doing so much better.  Full of people deserving so much better.  But they leave the electric grid to the elements.  While they spend a fortune to build the world’s largest solar photovoltaic power plant.  That can only “power a medium-sized city’s worth of homes.”  What a catastrophic misuse of investment capital.  No wonder large consumers of electricity are building their own generating capacity.

Companies plan to set up more than 33,000 megawatts of new captive power capacity and applications for approvals are pending with various state agencies, Rajiv Agrawal, New Delhi- based secretary of the power producers’ lobby said on Aug. 2. Some of these stations may not be set up because of a shortage of coal supplies, he said…

The pace of growth in generation has failed to keep up with demand because of a shortage in coal and natural gas supply, and deficient monsoon rains.

The world’s second-most populous nation suffers from frequent power outages that can last as long as 10 hours, amid summer temperatures of as high as 45 degrees Celsius (113 degrees Fahrenheit) in the capital, New Delhi. Power supply shortages shave about 1.2 percentage points off the nation’s annual growth, according to the Planning Commission…

This is what happens when you demonize one of the most energy-rich and reliable fuels.  Coal.  To reduce your carbon footprint.  Saving the planet may come at the cost of killing people.  Forcing people in an advanced society powered by electricity to go without electricity frequently.  Coal-fired power plants are the backbone of baseload power.  Those plants that run 24/7 to produce a steady stream of power to meet most of our needs.  These efficient heat engines can spin steam turbines forever as long as we feed them coal.  And a large coal-fired power plant can power everything in a region full of large cities.  Not just the homes in a medium city.

Subsidized electricity to farmers is also exacerbating electricity-supply bottlenecks, discouraging producers from adding capacity. India deliberately abandoned metering power supply for agricultural irrigation in the 1970s, as part of a strategy of switching to new high-yield crops, which required regular water supplies, Miriam Golden of the University of California and Brian Min of the University of Michigan said in a report published in April…

The Reserve Bank of India refrained from raising its benchmark interest rate on July 31 amid the slowest pace of growth in almost a decade and raised its inflation forecast to 7 percent from 6.5 percent, citing rising food prices and lack of roads, ports and power plants…

A dry monsoon season is a double whammy.  The lack of rain has lowered levels in the reservoirs at hydroelectric dams.  Reducing the amount of power they can produce.  On top of that the dry weather has forced farmers to irrigate their lands.  Using free electricity.  Which doesn’t discourage them in any way from sucking power off the grid.  Adding to the strain of the grid.  Doing their part in causing power outages.  Adding to inflationary pressures.  And loss in GDP.

This is a horrendous energy policy.  But you know who would approve of it?  President Obama.  For he is trying to do the same thing in America.  Shutter the coal industry and replace it with renewable energy.  He’s even cool on nuclear power.  Which is something the Indians are planning to expand to meet their exploding electrical demand.  Nuclear power.  So their horrendous energy policy is bad.  But it’s still a bit more sensible in one area.  They aren’t trying to shutter nuclear power, too.  Which happens to be one of the other most energy-rich and reliable fuels.  Joining coal to provide the backbone of baseload power.  Where a government will have it, that is.

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